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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
ý Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2023
OR
¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from               to
Commission File Number: 1-7293
TENET HEALTHCARE CORPORATION
(Exact name of Registrant as specified in its charter) 
Nevada
(State of Incorporation)
95-2557091
(IRS Employer Identification No.)
14201 Dallas Parkway
Dallas, TX 75254
(Address of principal executive offices, including zip code)
(469893-2200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common stock, $0.05 par valueTHCNew York Stock Exchange
6.875% Senior Notes due 2031THC31New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months. Yes ý No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company (each as defined in Exchange Act Rule 12b-2).
Large accelerated filer ý
Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ¨ No ý
Number of shares of the Registrant’s common stock outstanding at October 20, 2023 – 101,552 (in thousands)


TENET HEALTHCARE CORPORATION
TABLE OF CONTENTS
i

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TENET HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Dollars in Millions, Share Amounts in Thousands
(Unaudited)
September 30,December 31,
20232022
ASSETS
Current assets:
Cash and cash equivalents$1,054 $858 
Accounts receivable2,897 2,943 
Inventories of supplies, at cost413 405 
Assets held for sale140  
Other current assets1,855 1,775 
Total current assets 6,359 5,981 
Investments and other assets3,152 3,147 
Deferred income taxes4 19 
Property and equipment, at cost, less accumulated depreciation and amortization
($6,462 at September 30, 2023 and $6,201 at December 31, 2022)
6,260 6,462 
Goodwill10,415 10,123 
Other intangible assets, at cost, less accumulated amortization
($1,463 at September 30, 2023 and $1,428 at December 31, 2022)
1,400 1,424 
Total assets $27,590 $27,156 
LIABILITIES AND EQUITY  
Current liabilities:  
Current portion of long-term debt$141 $145 
Accounts payable1,202 1,504 
Accrued compensation and benefits787 778 
Professional and general liability reserves264 255 
Accrued interest payable273 213 
Liabilities held for sale17  
Contract liabilities86 110 
Other current liabilities1,662 1,471 
Total current liabilities 4,432 4,476 
Long-term debt, net of current portion14,901 14,934 
Professional and general liability reserves787 790 
Defined benefit plan obligations327 331 
Deferred income taxes278 217 
Other long-term liabilities1,684 1,800 
Total liabilities 22,409 22,548 
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries2,303 2,149 
Equity:  
Shareholders’ equity:  
Common stock, $0.05 par value; authorized 262,500 shares; 157,247 shares issued
at September 30, 2023 and 156,462 shares issued at December 31, 2022
8 8 
Additional paid-in capital4,818 4,778 
Accumulated other comprehensive loss(176)(181)
Accumulated deficit(436)(803)
Common stock in treasury, at cost, 55,695 shares at September 30, 2023 and
54,216 shares at December 31, 2022
(2,750)(2,660)
Total shareholders’ equity1,464 1,142 
Noncontrolling interests 1,414 1,317 
Total equity 2,878 2,459 
Total liabilities and equity $27,590 $27,156 
See accompanying Notes to Condensed Consolidated Financial Statements.


TENET HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Dollars in Millions, Except Per-Share Amounts
(Unaudited) 
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Net operating revenues $5,066 $4,801 $15,169 $14,184 
Grant income3 54 14 154 
Equity in earnings of unconsolidated affiliates51 51 155 151 
Operating expenses:  
Salaries, wages and benefits2,288 2,230 6,831 6,538 
Supplies877 817 2,659 2,413 
Other operating expenses, net1,101 1,018 3,319 2,966 
Depreciation and amortization224 209 654 628 
Impairment and restructuring charges, and acquisition-related costs47 24 84 97 
Litigation and investigation costs14 12 28 50 
Net losses (gains) on sales, consolidation and deconsolidation of facilities1  (12) 
Operating income568 596 1,775 1,797 
Interest expense(227)(222)(674)(671)
Other non-operating income, net4 6 8 6 
Loss from early extinguishment of debt  (11)(109)
Income from continuing operations, before income taxes345 380 1,098 1,023 
Income tax expense(79)(112)(243)(297)
Income from continuing operations, before discontinued operations266 268 855 726 
Income from discontinued operations, net of tax   1 
Net income266 268 855 727 
Less: Net income available to noncontrolling interests165 137 488 418 
Net income available to Tenet Healthcare Corporation common shareholders$101 $131 $367 $309 
Amounts available to Tenet Healthcare Corporation common shareholders:  
Income from continuing operations, net of tax$101 $131 $367 $308 
Income from discontinued operations, net of tax   1 
Net income available to Tenet Healthcare Corporation common shareholders$101 $131 $367 $309 
Earnings per share available to Tenet Healthcare Corporation common shareholders:  
Basic  
Continuing operations$0.99 $1.21 $3.60 $2.86 
Discontinued operations   0.01 
 $0.99 $1.21 $3.60 $2.87 
Diluted  
Continuing operations$0.94 $1.16 $3.41 $2.81 
Discontinued operations   0.01 
 $0.94 $1.16 $3.41 $2.82 
Weighted average shares and dilutive securities outstanding
(in thousands):
  
Basic101,544 107,923 101,869 107,732 
Diluted104,425 109,888 105,021 112,288 

See accompanying Notes to Condensed Consolidated Financial Statements.

2

TENET HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
Dollars in Millions
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Net income$266 $268 $855 $727 
Other comprehensive income:
Amortization of net actuarial loss included in other non-operating income, net1 2 5 7 
Unrealized loss on debt securities held as available-for-sale (1) (4)
Foreign currency translation adjustments and other1 2 1 3 
Other comprehensive income before income taxes2 3 6 6 
Income tax expense related to items of other comprehensive income (1)(1)(2)
Total other comprehensive income, net of tax2 2 5 4 
Comprehensive net income268 270 860 731 
Less: Comprehensive income available to noncontrolling interests165 137 488 418 
Comprehensive income available to Tenet Healthcare Corporation common shareholders$103 $133 $372 $313 

See accompanying Notes to Condensed Consolidated Financial Statements.

3

TENET HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in Millions
(Unaudited)
Nine Months Ended
September 30,
20232022
Net income$855 $727 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization654 628 
Deferred income tax expense75 208 
Stock-based compensation expense48 47 
Impairment and restructuring charges, and acquisition-related costs84 97 
Litigation and investigation costs28 50 
Net gains on sales, consolidation and deconsolidation of facilities(12) 
Loss from early extinguishment of debt11 109 
Equity in earnings of unconsolidated affiliates, net of distributions received5 14 
Amortization of debt discount and debt issuance costs25 23 
Pre-tax income from discontinued operations (1)
Net gains from the sale of investments and long-lived assets(25)(115)
Other items, net(1)12 
Changes in cash from operating assets and liabilities:  
Accounts receivable31 (39)
Inventories and other current assets(49)89 
Income taxes(46)(59)
Accounts payable, accrued expenses, contract liabilities and other current liabilities(38)(942)
Other long-term liabilities10 (28)
Payments for restructuring charges, acquisition-related costs, and litigation costs and
settlements
(105)(157)
Net cash used in operating activities from discontinued operations, excluding income taxes (1)
Net cash provided by operating activities1,550 662 
Cash flows from investing activities:  
Purchases of property and equipment(543)(472)
Purchases of businesses or joint venture interests, net of cash acquired(110)(224)
Proceeds from sales of facilities and other assets38 209 
Proceeds from sales of marketable securities, long-term investments and other assets40 61 
Purchases of marketable securities and equity investments(54)(68)
Other items, net(7)(8)
Net cash used in investing activities(636)(502)
Cash flows from financing activities:  
Repayments of borrowings(1,478)(2,786)
Proceeds from borrowings1,368 2,020 
Repurchases of common stock(90) 
Debt issuance costs(16)(24)
Distributions paid to noncontrolling interests(425)(432)
Proceeds from the sale of noncontrolling interests37 16 
Purchases of noncontrolling interests(127)(61)
Other items, net13 (49)
Net cash used in financing activities(718)(1,316)
Net increase (decrease) in cash and cash equivalents196 (1,156)
Cash and cash equivalents at beginning of period858 2,364 
Cash and cash equivalents at end of period$1,054 $1,208 
Supplemental disclosures:  
Interest paid, net of capitalized interest$(589)$(601)
Income tax payments, net$(212)$(148)
See accompanying Notes to Condensed Consolidated Financial Statements.
4

TENET HEALTHCARE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION
Description of Business and Basis of Presentation
Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a diversified healthcare services company headquartered in Dallas, Texas. Our expansive, nationwide care delivery network consists of our Hospital Operations and other (“Hospital Operations”) segment, our Ambulatory Care segment and our Conifer segment. Our Hospital Operations segment is comprised of our 61 acute care and specialty hospitals, a network of employed physicians and 107 outpatient facilities, including imaging centers, ancillary emergency facilities and micro‑hospitals. Our Ambulatory Care segment is comprised of the operations of our subsidiary USPI Holding Company, Inc. (“USPI”), which held indirect ownership interests in 457 ambulatory surgery centers and 24 surgical hospitals at September 30, 2023. USPI held noncontrolling interests in 157 of these facilities, which are recorded using the equity method of accounting. Effective June 30, 2022, we purchased all of the shares in USPI that Baylor University Medical Center (“Baylor”) held on that date for $406 million, which increased our ownership interest in USPI’s voting shares from 95% to 100% (see Note 13 for additional information about this transaction). Our Conifer segment provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. Almost all of the services comprising the operations of our Conifer segment are provided by Conifer Health Solutions, LLC, in which we own an interest of approximately 76% through our Conifer Holdings, Inc. subsidiary (“Conifer”), or by one of its direct or indirect wholly owned subsidiaries. In addition, we operate a Global Business Center (“GBC”) in Manila, Philippines.
This quarterly report supplements our Annual Report on Form 10‑K for the year ended December 31, 2022 (“Annual Report”). As permitted by the Securities and Exchange Commission for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all dollar amounts presented in our Condensed Consolidated Financial Statements and these accompanying notes are expressed in millions (except per‑share amounts), and all share amounts are expressed in thousands.
We adopted the Financial Accounting Standards Board’s Accounting Standards Update (“ASU”) 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), effective as of January 1, 2022 using the modified retrospective method. Among other amendments, ASU 2020-06 changed the accounting for diluted earnings‑per‑share for convertible instruments and contracts that may be settled in cash or stock. ASU 2020-06 eliminated an entity’s ability to rebut the presumption of share settlement for convertible instruments and contracts that can be partially or fully settled in cash at the issuer’s election. Additionally, ASU 2020-06 requires that the if‑converted method, which is more dilutive than the treasury stock method, be used for all convertible instruments. As a result of our adoption of ASU 2020-06, diluted weighted average shares outstanding increased by approximately 2,095 thousand shares and 2,330 thousand shares for the three and nine-month periods ended September 30, 2023, respectively, and diluted earnings per share available to Tenet common shareholders decreased by $0.05 and $0.16, respectively, for these same periods. For the three and nine months ended September 30, 2022, the adoption of ASU 2020-06 resulted in an increase in diluted weighted average shares outstanding of 1,134 thousand shares and 3,564 thousand shares, respectively, and a decrease in diluted earnings per share available to Tenet common shareholders of $0.04 and $0.02, respectively.
Certain prior-year amounts have been reclassified to conform to the current-year presentation. Contract liabilities – long-term are no longer significant enough to present separately. These obligations are now included in other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets.
Although our Condensed Consolidated Financial Statements and these related notes are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. The financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from the amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public.
5

Operating results for the three and nine‑month periods ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: the impact of the COVID-19 pandemic on our operations, business, financial condition and cash flows; the impact of the demand for, and availability of, qualified medical personnel on compensation costs; the impact of cybersecurity incidents on our operations; overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; trends in patient accounts receivable collectability and associated implicit price concessions; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; impairment of long‑lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to cybersecurity incidents, natural disasters and weather‑related occurrences; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; gains (losses) on sales, consolidation and deconsolidation of facilities; income tax rates and deferred tax asset valuation allowance activity; changes in estimates of accruals for annual incentive compensation; the timing and amounts of stock option and restricted stock unit grants to employees and directors; gains (losses) from early extinguishment of debt; and changes in occupancy levels and patient volumes.
Our hospitals and outpatient facilities are subject to various factors that affect our service mix, revenue mix and patient volumes and, thereby, impact our net patient service revenues and results of operations. These factors include, among others: changes in federal, state and local healthcare and business regulations; changes in general economic conditions nationally and regionally, including inflation and the impacts of the COVID-19 pandemic and other factors on the business environment, the economy and the financial markets; the number of uninsured and underinsured individuals in local communities treated at our facilities; disease hotspots and seasonal cycles of illness; climate and weather conditions; physician recruitment, satisfaction, retention and attrition; advances in technology and treatments that reduce length of stay or permit procedures to be performed in an outpatient rather than inpatient setting; local healthcare competitors; utilization pressure by managed care organizations, as well as managed care contract negotiations or terminations; performance data on quality measures and patient satisfaction, as well as standard charges for services; any unfavorable publicity about us, or our joint venture partners, that impacts our relationships with physicians and patients; and changing consumer behavior, including with respect to the timing of elective procedures. These considerations apply to year‑to‑year comparisons as well.
COVID19 Pandemic
For the duration of the COVID‑19 pandemic public health emergency, which began in January 2020 and expired in May 2023, federal, state and local authorities undertook several actions designed to assist healthcare providers in delivering care to COVID‑19 and other patients and to mitigate the adverse economic impact of the pandemic. Among other things, federal legislation (collectively, the “COVID Acts”) authorized grant payments to be distributed through the Public Health and Social Services Emergency Fund (“PRF”) to healthcare providers who experienced lost revenues and increased expenses as a result of the pandemic. The COVID Acts also revised the Medicare accelerated payment program (“MAPP”). Our participation in these programs and the related accounting policies are summarized below.
Grant Income–Our Hospital Operations segment received cash payments from COVID‑19 relief programs totaling $9 million during the nine months ended September 30, 2023 and, during the same period in 2022, our Hospital Operations and Ambulatory Care segments together received funds totaling $155 million. These grant funds are included in cash flows from operating activities in our condensed consolidated statements of cash flows.
To receive distributions, providers agreed to certain terms and conditions, including, among other things, that the funds would be used for lost revenues and unreimbursed pandemic‑related costs as defined by the U.S. Department of Health and Human Services (“HHS”), and that the providers would not seek collection of out‑of‑pocket payments from a COVID‑19 patient that are greater than what the patient would have otherwise been required to pay if the care had been delivered by an in‑network provider. All recipients of PRF payments were required to comply with the reporting requirements described in the terms and conditions and as determined by the Secretary of HHS. PRF funds not utilized by the established deadlines, generally 12 to 18 months after receipt, will be recouped by HHS.
6

We recognize grant payments as income when there is reasonable assurance that we have complied with the conditions associated with the grant. The table below summarizes grant income recognized by our Hospital Operations and Ambulatory Care segments, which is presented in grant income in our condensed consolidated statements of operations:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Grant income recognized from COVID-19 relief programs:
Hospital Operations$3 $54 $13 $150 
Ambulatory Care  1 4 
$3 $54 $14 $154 
We did not have any remaining deferred grant payments at September 30, 2023. Our liability related to deferred grant payments was $7 million at December 31, 2022, which amount was recorded in other current liabilities in the accompanying Condensed Consolidated Balance Sheets for that period.
Medicare Accelerated Payment Program (MAPP)–In certain circumstances, when a healthcare facility is experiencing financial difficulty due to delays in receiving payment for the Medicare services it provided, it may be eligible for an accelerated or advance payment pursuant to the MAPP. The COVID Acts revised the MAPP to disburse payments to healthcare providers more quickly and to allow recipients to retain the advance payments for one year from the date of receipt before recoupment commenced through offsets of Medicare claims payments. Recipients were also permitted to repay the advance payments at any time. Our Hospital Operations and Ambulatory Care segments both received advance payments from the MAPP following its expansion under the COVID Acts in the year ended December 31, 2020; however, no additional advances were received during the nine months ended September 30, 2023 or 2022.
Advances received by our Hospital Operations and Ambulatory Care segments were recouped through reductions of their respective Medicare claims payments. No advances were recouped or repaid during the nine months ended September 30, 2023, and there was no outstanding liability related to MAPP advances at September 30, 2023 or December 31, 2022. During the nine months ended September 30, 2022, $876 million of advances received in prior periods by our Hospital Operations segment and $4 million of advances received in prior periods by those facilities in our Ambulatory Care segment that we consolidate were repaid or recouped. Amounts recouped from our Hospital Operations segment and those facilities in our Ambulatory Care segment that we consolidate, together with any amounts we voluntarily repaid in advance of recoupment, are presented in cash flows from operating activities in our condensed consolidated statements of cash flows.
Leases
During the nine months ended September 30, 2023 and 2022, we recorded right‑of‑use assets related to non‑cancellable finance leases of $42 million and $64 million, respectively, and related to non‑cancellable operating leases of $116 million and $296 million, respectively.
During the nine months ended September 30, 2022, we sold several medical office buildings held in our Hospital Operations segment for net cash proceeds of $147 million and concurrently entered into operating lease agreements to continue use of the facilities. We recognized a gain of $69 million from the sale of these buildings, included in other operating expenses, net in the accompanying Condensed Consolidated Statement of Operations, and we recognized right-of-use assets and operating lease obligations of $109 million, in each case in the nine months ended September 30, 2022.
Cash and Cash Equivalents
We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were $1.054 billion and $858 million at September 30, 2023 and December 31, 2022, respectively. At September 30, 2023 and December 31, 2022, our book overdrafts were $150 million and $266 million, respectively, which were classified as accounts payable. At September 30, 2023 and December 31, 2022, $101 million and $140 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our insurance‑related subsidiaries.
Also at September 30, 2023 and December 31, 2022, we had $61 million and $196 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $46 million and $191 million, respectively, were included in accounts payable.
7

Other Intangible Assets
The following table provides information regarding other intangible assets, which were included in the accompanying Condensed Consolidated Balance Sheets:
Gross
Carrying Amount
Accumulated
Amortization
Net Book Value
At September 30, 2023:
Other intangible assets with finite useful lives:
Capitalized software costs$1,760 $(1,227)$533 
Contracts295 (159)136 
Other90 (77)13 
Total other intangible assets with finite lives2,145 (1,463)682 
Other intangible assets with indefinite useful lives:
Trade names105 — 105 
Contracts609 — 609 
Other4 — 4 
Total other intangible assets with indefinite lives718 — 718 
Total other intangible assets$2,863 $(1,463)$1,400 
At December 31, 2022:
Other intangible assets with finite useful lives:
Capitalized software costs$1,751 $(1,206)$545 
Contracts295 (146)149 
Other92 (76)16 
Total other intangible assets with finite lives2,138 (1,428)710 
Other intangible assets with indefinite useful lives:
Trade names105 — 105 
Contracts603 — 603 
Other6 — 6 
Total other intangible assets with indefinite lives714 — 714 
Total other intangible assets$2,852 $(1,428)$1,424 
Estimated future amortization of intangible assets with finite useful lives at September 30, 2023 was as follows:
Three Months EndingYears EndingLater Years
December 31,
 Total20232024202520262027
Amortization of intangible assets$682 $49 $133 $111 $98 $81 $210 
We recognized amortization expense of $128 million and $132 million in the accompanying Condensed Consolidated Statements of Operations for the nine months ended September 30, 2023 and 2022, respectively.
8

Other Current Assets
The principal components of other current assets in the accompanying Condensed Consolidated Balance Sheets were as follows:
 September 30, 2023December 31, 2022
Prepaid expenses$392 $400 
Contract assets190 200
California provider fee program receivables350 367
Receivables from other government programs220 187
Guarantees302 143
Non-patient receivables314 390
Other87 88
Total other current assets$1,855 $1,775 
Investments in Unconsolidated Affiliates
As of September 30, 2023, we controlled 324 of the facilities in our Ambulatory Care segment and, therefore, consolidate their results. We account for many of the facilities in which our Ambulatory Care segment holds ownership interests (157 of 481 at September 30, 2023), as well as additional companies in which our Hospital Operations segment holds ownership interests, under the equity method as investments in unconsolidated affiliates and report only our share of net income as equity in earnings of unconsolidated affiliates in our condensed consolidated statements of operations. Summarized financial information for these equity method investees is included in the following table. For investments acquired during the reported periods, amounts in the table include 100% of the investee’s results beginning on the date of our acquisition of the investment.
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2023202220232022
Net operating revenues$818 $788 $2,431 $2,351 
Net income$198 $192 $586 $554 
Net income available to the investees$114 $109 $342 $316 
NOTE 2. ACCOUNTS RECEIVABLE
The principal components of accounts receivable are presented in the table below:
 September 30, 2023December 31, 2022
Patient accounts receivable$2,670 $2,746 
Estimated future recoveries157 149 
Cost report settlements receivable, net of payables and valuation allowances70 48 
Accounts receivable, net$2,897 $2,943 
We participate in various provider fee programs, which help reduce the amount of uncompensated care from indigent patients and those covered by Medicaid. The following table summarizes the amount and classification of assets and liabilities in the accompanying Condensed Consolidated Balance Sheets related to California’s provider fee program:
 September 30, 2023December 31, 2022
Assets:
Other current assets$350 $367 
Investments and other assets$291 $197 
Liabilities:
Other current liabilities$145 $145 
Other long-term liabilities$69 $63 
9

Uninsured and Charity Patient Costs
The following table presents our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our uninsured and charity patients:
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2023202220232022
Estimated costs for:    
Uninsured patients$122 $131 $361 $389 
Charity care patients31 22 83 62 
Total
$153 $153 $444 $451 
NOTE 3. CONTRACT BALANCES
Hospital Operations Segment
Amounts related to services provided to patients for which we have not billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period are contract assets. For our Hospital Operations segment, our contract assets include services that we have provided to patients who are still receiving inpatient care in our facilities at the end of the reporting period. Our Hospital Operations segment’s contract assets were included in other current assets in the accompanying Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022. Approximately 89% of our Hospital Operations segment’s contract assets meet the conditions for unconditional right to payment and are reclassified to patient receivables within 90 days.
As discussed in Note 1, our Hospital Operations segment received advance payments from the MAPP following its expansion under the COVID Acts in 2020; however, no additional advances were received during the nine months ended September 30, 2023 or 2022. All remaining MAPP advances received by our Hospital Operations segment were either repaid or recouped during 2022 and 2021, which resulted in no outstanding liability at September 30, 2023 and December 31, 2022.
The opening and closing balances of contract assets and contract liabilities, as well as their classification in our condensed consolidated balance sheets, for our Hospital Operations segment were as follows:
Contract AssetsContract Liabilities – Current Advances from Medicare
December 31, 2022$185 $ 
September 30, 2023177  
Decrease$(8)$ 
December 31, 2021$181 $876 
September 30, 2022181  
Decrease$ $(876)
During the nine months ended September 30, 2022, $876 million of Medicare advance payments included in the opening contract liabilities balance for our Hospital Operations segment were either repaid or recouped through a reduction of our Medicare claims payments.
Ambulatory Care Segment
Our Ambulatory Care segment also received advance payments from the MAPP following its expansion in 2020; however, no additional advances were received during the nine months ended September 30, 2023 or 2022. All remaining MAPP advances received by our Ambulatory Care segment were either repaid or recouped during 2022 and 2021, which resulted in no outstanding liability at September 30, 2023 and December 31, 2022.
Conifer Segment
Conifer enters into contracts with clients to provide revenue cycle management and other services, such as value‑based care, consulting and engagement solutions. The payment terms and conditions in Conifer’s client contracts vary. In some cases, clients are invoiced in advance and (for other than fixed‑price fee arrangements) a true‑up to the actual fee is included on a subsequent invoice. In other cases, payment is due in arrears. In addition, some contracts contain performance incentives, penalties and other forms of variable consideration. When the timing of Conifer’s delivery of services is different from the timing of payments made by its clients, Conifer recognizes either unbilled revenue (performance precedes contractual right to
10

invoice the client) or deferred revenue (client payment precedes Conifer service performance). In the following table, clients that prepay prior to obtaining control/benefit of services are represented by deferred contract revenue until the performance obligations are satisfied. Unbilled revenue represents arrangements in which Conifer has provided services to a client, and the client has obtained control/benefit of these services prior to the contractual invoice date. Contracts with payment in arrears are recognized as receivables in the month the services are performed.
The opening and closing balances of Conifer’s receivables, contract assets, and current and long‑term contract liabilities were as follows:
ReceivablesContract Assets – Unbilled RevenueContract Liabilities – Current
Deferred Revenue
Contract Liabilities – Long-Term
Deferred Revenue
December 31, 2022$37 $15 $110 $13 
September 30, 202317 13 86 12 
Decrease$(20)$(2)$(24)$(1)
December 31, 2021$28 $18 $79 $15 
September 30, 202222 16 111 14 
Increase (decrease)$(6)$(2)$32 $(1)
The differences between the opening and closing balances of Conifer’s contract assets and contract liabilities are primarily related to prepayments for those clients who are billed in advance, changes in estimates related to metric‑based services, and up‑front integration services that are typically not distinct and are, therefore, recognized over the performance obligation period to which they relate. Our Conifer segment’s receivables and contract assets at September 30, 2023 and December 31, 2022 were reported as part of other current assets in the accompanying Condensed Consolidated Balance Sheets, and its current and long‑term contract liabilities on those dates were reported as part of contract liabilities and other long‑term liabilities, respectively.
In the nine months ended September 30, 2023 and 2022, Conifer recognized $71 million and $55 million, respectively, of revenue that was included in the opening current deferred revenue liability. This revenue consists primarily of prepayments for those clients who are billed in advance, changes in estimates related to metric‑based services, and up‑front integration services that are recognized over the service period.
Contract Costs
Our unamortized deferred contract setup costs totaled $23 million and $24 million at September 30, 2023 and December 31, 2022, respectively, and are included in investments and other assets in the accompanying Condensed Consolidated Balance Sheets.
NOTE 4. ASSETS AND LIABILITIES HELD FOR SALE
In January 2023, we entered into a definitive agreement to sell our 51% ownership interest in San Ramon Regional Medical Center and certain related operations (“San Ramon RMC”) to John Muir Health. As a result, the assets and liabilities associated with San Ramon RMC were classified as held for sale in the accompanying Condensed Consolidated Balance Sheet and totaled $140 million and $17 million, respectively, at September 30, 2023. We expect the transaction to be completed by early 2024, subject to regulatory review and customary closing conditions.
Assets and liabilities classified as held for sale were comprised of the following:
September 30, 2023
Accounts receivable$28 
Other current assets8 
Property and equipment67 
Other intangible assets6 
Goodwill31 
Current liabilities(16)
Long-term liabilities(1)
Net assets held for sale$123 
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NOTE 5. IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITIONRELATED COSTS
Our impairment tests presume stable, improving or, in some cases, declining operating results in our facilities, which are based on programs and initiatives being implemented that are designed to achieve each facility’s most recent projections. If these projections are not met, or negative trends occur that impact our future outlook, future impairments of long‑lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material.
At September 30, 2023, our operations consisted of three reportable segments – Hospital Operations, Ambulatory Care and Conifer. Our segments are the reporting units used to perform our goodwill impairment analysis.
We record costs associated with restructuring efforts in our statement of operations as they are incurred. Our restructuring plans typically focus on the alignment of our operations in the most strategic and cost‑effective structure, such as the establishment of support operations at our GBC, among other things. Certain restructuring and acquisition‑related costs are based on estimates. Changes in estimates are recognized as they occur.
During the nine months ended September 30, 2023, we recorded impairment and restructuring charges and acquisition‑related costs of $84 million, consisting of $60 million of restructuring charges, $16 million of impairment charges and $8 million of acquisition‑related transaction costs. Restructuring charges consisted of $30 million of legal costs related to the sale of certain businesses, $10 million of employee severance costs, $9 million related to the transition of various administrative functions to our GBC and $11 million of other restructuring costs. Impairment charges for the nine months ended September 30, 2023 primarily arose from the write-down of an investment in an ambulatory surgery center held by our Ambulatory Care segment.
During the nine months ended September 30, 2022, we recorded impairment and restructuring charges and acquisition‑related costs of $97 million, consisting of $78 million of restructuring charges, $9 million of impairment charges and $10 million of acquisition‑related transaction costs. Restructuring charges consisted of $24 million of employee severance costs, $10 million related to the transition of various administrative functions to our GBC, $25 million of contract and lease termination fees, and $19 million of other restructuring costs. Impairment charges for the nine months ended September 30, 2022 were comprised of $5 million from our Hospital Operations segment and $2 million from each our Ambulatory Care and Conifer segments.
NOTE 6. LONG-TERM DEBT
The table below presents our long‑term debt included in the accompanying Condensed Consolidated Balance Sheets:
 September 30, 2023December 31, 2022
Senior unsecured notes:  
6.125% due 2028
$2,500 $2,500 
6.875% due 2031
362 362 
Senior secured first lien notes:  
4.625% due July 2024
 756 
4.625% due September 2024
 589 
4.875% due 2026
2,100 2,100 
5.125% due 2027
1,500 1,500 
4.625% due 2028
600 600 
4.250% due 2029
1,400 1,400 
4.375% due 2030
1,450 1,450 
6.125% due 2030
2,000 2,000 
6.750% due 2031
1,350  
Senior secured second lien notes:
6.250% due 2027
1,500 1,500 
Finance leases, mortgages and other notes405 453 
Unamortized issue costs and note discounts(125)(131)
Total long-term debt15,042 15,079 
Less: Current portion141 145 
Long-term debt, net of current portion$14,901 $14,934 
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Senior Unsecured and Senior Secured Notes
At September 30, 2023, we had outstanding senior unsecured notes and senior secured notes with aggregate principal amounts outstanding of $14.762 billion. These notes have fixed interest rates ranging from 4.250% to 6.875% and require semi‑annual interest payments in arrears. The principal and any accrued but unpaid interest is due upon the maturity date of the respective notes, which dates are staggered from January 2026 through November 2031. We completed the following transactions related to our senior secured notes during the nine months ended September 30, 2023:
In May 2023, we issued $1.350 billion aggregate principal amount of 6.750% senior secured first lien notes, which will mature on May 15, 2031 (the “2031 Senior Secured First Lien Notes”). We will pay interest on the 2031 Senior Secured First Lien Notes semi-annually in arrears on May 15 and November 15 of each year, commencing on November 15, 2023. We used the issuance proceeds, together with cash on hand, to finance the redemption of our 4.625% senior secured first lien notes due September 2024 (the “September 2024 Senior Secured First Lien Notes”) and our 4.625% senior secured first lien notes due July 2024 (the “July 2024 Senior Secured First Lien Notes”), as described below.
Also in May 2023, we paid $596 million using a portion of the proceeds from the issuance of our 2031 Senior Secured First Lien Notes to redeem all $589 million aggregate principal amount outstanding of our September 2024 Senior Secured First Lien Notes in advance of their maturity date.
In June 2023, we used the remaining proceeds from the issuance of our 2031 Senior Secured First Lien Notes along with cash on hand to redeem all $756 million aggregate principal amount outstanding of our July 2024 Senior Secured First Lien Notes in advance of their maturity date.
In connection with the aforementioned redemptions, we recorded losses from early extinguishment of debt of $11 million in the nine months ended September 30, 2023, primarily related to differences between the redemption prices and the par values of the notes, as well as the write-off of associated unamortized issuance costs.
Credit Agreement
We have a senior secured revolving credit facility that provides for revolving loans in an aggregate principal amount of up to $1.500 billion with a $200 million subfacility for standby letters of credit. We amended our credit agreement (as amended to date, the “Credit Agreement”) in March 2022 to, among other things, (1) decrease the aggregate revolving credit commitments from the previous limit of $1.900 billion to aggregate revolving credit commitments not to exceed $1.500 billion, subject to borrowing availability, (2) extend the scheduled maturity date to March 16, 2027, and (3) replace the London Interbank Offered Rate (“LIBOR”) with the Term Secured Overnight Financing Rate (“SOFR”) and Daily Simple SOFR (each, as defined in the Credit Agreement) as the reference interest rate.
Outstanding revolving loans accrue interest depending on the type of loan at either (a) a base rate plus an applicable margin ranging from 0.25% to 0.75% per annum or (b) Term SOFR, Daily Simple SOFR or the Euro Interbank Offered Rate (EURIBOR) (each, as defined in the Credit Agreement) plus an applicable margin ranging from 1.25% to 1.75% per annum and (in the case of Term SOFR and Daily Simple SOFR only) a credit spread adjustment of 0.10%, in each case based on available credit. An unused commitment fee payable on the undrawn portion of the revolving loans ranges from 0.25% to 0.375% per annum based on available credit. Our borrowing availability is based on a specified percentage of eligible inventory and accounts receivable, including self‑pay accounts. At September 30, 2023, we had no cash borrowings outstanding under the Credit Agreement, and we had less than $1 million of standby letters of credit outstanding. Based on our eligible receivables, $1.500 billion was available for borrowing under the Credit Agreement at September 30, 2023.
Letter of Credit Facility
We have a letter of credit facility (as amended to date, the “LC Facility”) that provides for the issuance, from time to time, of standby and documentary letters of credit in an aggregate principal amount of up to $200 million. We amended the LC Facility in September 2023 to, among other things, (1) extend the scheduled maturity date from September 12, 2024 to March 16, 2027, and (2) replace LIBOR with Term SOFR as the reference interest rate. Drawings under any letter of credit issued under the LC Facility that we have not reimbursed within three business days after notice thereof accrue interest at a base rate, as defined in the LC Facility, plus a margin of 0.50% per annum. An unused commitment fee is payable at an initial rate of 0.25% per annum with a step up to 0.375% per annum should our secured‑debt‑to‑EBITDA ratio equal or exceed 3.00 to 1.00 at the end of any fiscal quarter. A fee on the aggregate outstanding amount of issued but undrawn letters of credit accrues at a rate of 1.50% per annum. An issuance fee equal to 0.125% per annum of the aggregate face amount of each outstanding letter of credit is payable to the account of the issuer of the related letter of credit. The LC Facility is subject to an effective maximum secured debt covenant of 4.25 to 1.00. At September 30, 2023, we had $111 million of standby letters of credit outstanding under the LC Facility.
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NOTE 7. GUARANTEES
At September 30, 2023, the maximum potential amount of future payments under our income guarantees to certain physicians who agree to relocate and revenue collection guarantees to hospital‑based physician groups providing certain services at our hospitals was $354 million. We had a total liability of $302 million recorded for these guarantees included in other current liabilities in the accompanying Condensed Consolidated Balance Sheet at September 30, 2023.
At September 30, 2023, we also had issued guarantees of the indebtedness and other obligations of our investees to third parties, the maximum potential amount of future payments under which was approximately $88 million. Of the total, $21 million relates to the obligations of consolidated subsidiaries, which obligations were recorded in other current liabilities in the accompanying Condensed Consolidated Balance Sheet at September 30, 2023.
NOTE 8. EMPLOYEE BENEFIT PLANS
Share-Based Compensation Plans
The accompanying Condensed Consolidated Statements of Operations for the nine months ended September 30, 2023 and 2022 include $48 million and $47 million, respectively, of pre-tax compensation costs related to our stock‑based compensation arrangements.
Stock Options
The following table summarizes stock option activity during the nine months ended September 30, 2023:
 Number of OptionsWeighted Average
Exercise Price
Per Share
Aggregate
Intrinsic Value
Weighted Average
Remaining Life
   (In Millions) 
Outstanding at December 31, 2022
460,947 $23.33   
Exercised(76,507)$26.07   
Outstanding at September 30, 2023
384,440 $22.79 $17 4.3 years
There were 76,507 and 60,051 stock options exercised during the nine months ended September 30, 2023 and 2022, respectively, with aggregate intrinsic values of $4 million for both periods. All outstanding options were vested and exercisable at September 30, 2023. No stock options were granted during either of the nine-month periods ended September 30, 2023 or 2022.
The following table summarizes information about our outstanding stock options at September 30, 2023:
 Options Outstanding and Exercisable
Range of Exercise Prices Number of
Options
Weighted Average
Remaining
Contractual Life
Weighted Average
Exercise Price
Per Share
$18.99 to $20.609
255,845 3.8 years$19.62 
$20.61 to $35.430
128,595 5.3 years$29.07 
384,440 4.3 years$22.79 
Restricted Stock Units
The following table summarizes activity with respect to restricted stock units (“RSUs”) during the nine months ended September 30, 2023:
Number of RSUsWeighted Average Grant
Date Fair Value Per RSU
Unvested at December 31, 20221,520,418 $66.36 
Granted758,028 $60.89 
Performance-based adjustment185,901 $48.97 
Vested(905,105)$48.31 
Forfeited(72,311)$65.47 
Unvested at September 30, 20231,486,931 $65.35 
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In the nine months ended September 30, 2023, we granted an aggregate of 943,929 RSUs. Of these:
309,282 performance‑based RSUs will vest and be settled as described in the paragraph below;
301,562 RSUs will vest and be settled ratably over a three‑year period from the grant date;
185,901 RSUs vested and settled immediately as a result of our level of achievement with respect to performance‑based RSUs granted in 2020;
42,626 RSUs will vest and be settled on the fifth anniversary of the grant date;
40,538 RSUs granted to our non-employee directors for the 2023-2024 board service year vested immediately and will be settled on the third anniversary of the grant date;
33,586 RSUs will vest and be settled on December 31, 2023;
20,707 RSUs will vest upon the relocation of one of our executive officers; and
9,727 RSUs will vest and be settled on the third anniversary of the grant date.
The vesting of the performance-based RSUs granted in the nine months ended September 30, 2023 is contingent on our achievement of specified performance goals for the years 2023 to 2025. Provided the goals are achieved, these performance-based RSUs will vest and be settled on the third anniversary of the grant date. For 301,562 of the performance-based RSUs granted during the nine months ended September 30, 2023, the actual number of RSUs that could vest ranges from 0% to 225%, depending on our level of achievement with respect to the performance goals; between 0% and 200% of the remaining 7,720 performance-based RSUs granted during this period could ultimately vest.
In the nine months ended September 30, 2022, we granted an aggregate of 633,880 RSUs. Of these:
287,308 performance-based RSUs will vest and be settled as described in the paragraph below;
237,381 RSUs will vest and be settled ratably over a three‑year period from the grant date;
53,716 RSUs granted to our former Executive Chairman were scheduled to vest and be settled ratably over 11 quarterly periods from the grant date;
35,482 RSUs granted to our non-employee directors for the 2022-2023 board service year vested immediately and will be settled on the third anniversary of the grant date;
9,215 RSUs will vest and be settled ratably over a four‑year period from the grant date;
6,170 RSUs will vest and be settled evenly on the third and fourth anniversaries of the grant date; and
4,608 RSUs will vest and be settled on the second anniversary of the grant date.
Other than as described below, the vesting of the performance-based RSUs granted in the nine months ended September 30, 2022 is contingent on our achievement of specified performance goals for the years 2022 to 2024. Provided the goals are achieved, these performance‑based RSUs will vest and be settled on the third anniversary of the grant date. The actual number of performance‑based RSUs that could vest ranges from 0% to 200% of 233,592 of the 287,308 units granted, depending on our level of achievement with respect to the performance goals. The aggregate number of performance-based RSUs granted in 2022 included 53,716 RSUs granted to our former Executive Chairman. These performance‑based RSUs, which vested at 100%, and the unvested portion of the 53,716 time‑based RSUs granted during the same period vested and settled in October 2022 in accordance with the disability provisions of our stock incentive plan.
The fair value of an RSU is based on our share price on the grant date. For certain of the performance‑based RSU grants, the number of units that will ultimately vest is subject to adjustment based on the achievement of a market‑based condition. The fair value of these RSUs is estimated using a Monte Carlo simulation. Significant inputs used in our valuation of these RSUs included the following:
Nine Months Ended September 30,
20232022
Expected volatility
53.6% - 65.6%
39.6% - 68.1%
Risk-free interest rate
4.2% - 4.8%
1.0% - 1.7%
At September 30, 2023, there were $47 million of total unrecognized compensation costs related to RSUs. These costs are expected to be recognized over a weighted average period of 2.0 years.
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USPI Management Equity Plan
USPI maintains a separate restricted stock plan (the “USPI Management Equity Plan”) under which it grants RSUs representing a contractual right to receive one share of USPI’s non‑voting common stock in the future. The vesting of RSUs granted under the plan varies based on the terms of the underlying award agreement. Once the requisite holding period is met, during specified times, the participant can sell the underlying shares to USPI at their estimated fair market value. At our sole discretion, the purchase of any non‑voting common shares can be made in cash or in shares of Tenet’s common stock.
The following table summarizes RSU activity under the USPI Management Equity Plan during the nine months ended September 30, 2023:
Number of RSUsWeighted Average Grant
Date Fair Value Per RSU
Unvested at December 31, 2022922,840 $34.13 
Vested(303,171)$34.13 
Forfeited(10,763)$34.13 
Unvested at September 30, 2023608,906 $34.13 
USPI did not make any new grants under the USPI Management Equity Plan during the nine months ended September 30, 2023 or 2022. USPI paid $12 million and $8 million in cash to repurchase a portion of the non-voting common stock previously issued under the USPI Management Equity Plan during the nine‑month periods ended September 30, 2023 and 2022, respectively. At September 30, 2023, there were 65 thousand outstanding vested shares of non‑voting common stock eligible to be sold to USPI.
NOTE 9. EQUITY
The following tables present the changes in consolidated equity (dollars in millions, share amounts in thousands):
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Treasury
Stock
Noncontrolling
Interests
Total Equity
Shares
Outstanding
Issued Par
Amount
Balances at December 31, 2022102,247 $8 $4,778 $(181)$(803)$(2,660)$1,317 $2,459 
Net income— — — — 143 — 74 217 
Distributions paid to noncontrolling interests— — — — — — (61)(61)
Other comprehensive income— — — 2 — — — 2 
Purchases of businesses and noncontrolling interests, net— — 2 — — — 17 19 
Repurchases of common stock(906)— — — — (50)— (50)
Stock-based compensation expense and issuance of common stock571 — (6)— — —