Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2017	Jan. 31, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	TENET HEALTHCARE CORP
Entity Central Index Key	0000070318
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1.3
Entity Common Stock, Shares Outstanding (in shares)		101,107,955
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 611	$ 716
Accounts receivable, less allowance for doubtful accounts ($898 at December 31, 2017 and $1,031 at December 31, 2016)	2,616	2,897
Inventories of supplies, at cost	289	326
Income tax receivable	5	4
Assets held for sale	1,017	29
Other current assets	1,035	1,285
Total current assets	5,573	5,257
Investments and other assets	1,543	1,250
Deferred income taxes	455	871
Property and equipment, at cost, less accumulated depreciation and amortization ($4,739 at December 31, 2017 and $4,974 at December 31, 2016)	7,030	8,053
Goodwill	7,018	7,425
Other intangible assets, at cost, less accumulated amortization ($883 at December 31, 2017 and $772 at December 31, 2016)	1,766	1,845
Total assets	23,385	24,701
Current liabilities:
Current portion of long-term debt	146	191
Accounts payable	1,175	1,329
Accrued compensation and benefits	848	872
Professional and general liability reserves	200	181
Accrued interest payable	256	210
Liabilities held for sale	480	9
Other current liabilities	1,227	1,242
Total current liabilities	4,332	4,034
Long-term debt, net of current portion	14,791	15,064
Professional and general liability reserves	654	613
Defined benefit plan obligations	536	626
Deferred income taxes	36	279
Other long-term liabilities	631	610
Total liabilities	20,980	21,226
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries	1,866	2,393
Shareholders’ equity:
Common stock, $0.05 par value; authorized 262,500,000 shares; 149,384,952 shares issued at December 31, 2017 and 148,106,249 shares issued at December 31, 2016	7	7
Additional paid-in capital	4,859	4,827
Accumulated other comprehensive loss	(204)	(258)
Accumulated deficit	(2,390)	(1,742)
Common stock in treasury, at cost, 48,413,169 shares at December 31, 2017 and 48,420,650 shares at December 31, 2016	(2,419)	(2,417)
Total shareholders’ equity (deficit)	(147)	417
Noncontrolling interests	686	665
Total equity	539	1,082
Total liabilities and equity	$ 23,385	$ 24,701

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 898	$ 1,031
Property and equipment, accumulated depreciation and amortization	4,739	4,974
Other intangible assets, accumulated amortization	$ 883	$ 772
Common stock, par value (in dollars per share)	$ 0.05	$ 0.05
Common stock, authorized shares (in shares)	262,500,000	262,500,000
Common stock, shares issued (in shares)	149,384,952	148,106,249
Common stock in treasury, shares (in shares)	48,413,169	48,420,650

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net operating revenues:
Net operating revenues before provision for doubtful accounts	$ 20,613	$ 21,070	$ 20,111
Less: Provision for doubtful accounts	1,434	1,449	1,477
Net operating revenues	19,179	19,621	18,634
Equity in earnings of unconsolidated affiliates	144	131	99
Operating expenses:
Salaries, wages and benefits	9,274	9,328	8,990
Supplies	3,085	3,124	2,963
Other operating expenses, net	4,570	4,891	4,555
Electronic health record incentives	(9)	(32)	(72)
Depreciation and amortization	870	850	797
Impairment and restructuring charges, and acquisition-related costs	541	202	318
Litigation and investigation costs	23	293	291
Gains on sales, consolidation and deconsolidation of facilities	(144)	(151)	(186)
Operating income	1,113	1,247	1,077
Interest expense	(1,028)	(979)	(912)
Other non-operating expense, net	(22)	(20)	(20)
Loss from early extinguishment of debt	(164)	0	(1)
Income (loss) from continuing operations, before income taxes	(101)	248	144
Income tax expense	(219)	(67)	(68)
Income (loss) from continuing operations, before discontinued operations	(320)	181	76
Discontinued operations:
Loss from operations	0	(6)	(5)
Litigation and investigation benefit	0	0	8
Income tax benefit (expense)	0	1	(1)
Income (loss) from discontinued operations	0	(5)	2
Net income (loss)	(320)	176	78
Less: Net income attributable to noncontrolling interests	384	368	218
Net loss attributable to Tenet Healthcare Corporation common shareholders	(704)	(192)	(140)
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Loss from continuing operations, net of tax	(704)	(187)	(142)
Income (loss) from discontinued operations, net of tax	0	(5)	2
Net loss attributable to Tenet Healthcare Corporation common shareholders	$ (704)	$ (192)	$ (140)
Basic
Continuing operations (in dollars per share)	$ (7.00)	$ (1.88)	$ (1.43)
Discontinued operations (in dollars per share)	0.00	(0.05)	0.02
Total loss per share, Basic (in dollars per share)	(7.00)	(1.93)	(1.41)
Diluted
Continuing operations (in dollars per share)	(7.00)	(1.88)	(1.43)
Discontinued operations (in dollars per share)	0.00	(0.05)	0.02
Total loss per share, Diluted (in dollars per share)	$ (7.00)	$ (1.93)	$ (1.41)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic (in shares)	100,592	99,321	99,167
Diluted (in shares)	100,592	99,321	99,167

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (320)	$ 176	$ 78
Other comprehensive income (loss):
Adjustments for defined benefit plans	42	(73)	3
Amortization of net actuarial loss included in other non-operating expense, net	14	12	12
Unrealized gains (losses) on securities held as available-for-sale	6	2	(2)
Foreign currency translation adjustments	15	(53)	5
Other comprehensive income (loss) before income taxes	77	(112)	18
Income tax benefit (expense) related to items of other comprehensive income (loss)	(23)	18	0
Total other comprehensive income (loss), net of tax	54	(94)	18
Comprehensive net income (loss)	(266)	82	96
Less: Comprehensive income attributable to noncontrolling interests	384	368	218
Comprehensive loss attributable to Tenet Healthcare Corporation common shareholders	$ (650)	$ (286)	$ (122)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Millions	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Treasury Stock	Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2014		98,382
Beginning balance at Dec. 31, 2014	$ 785	$ 7	$ 4,614	$ (182)	$ (1,410)	$ (2,378)	$ 134
Changes in Shareholders' Equity
Net income (loss)	(88)				(140)		52
Distributions paid to noncontrolling interests	(50)						(50)
Contributions from noncontrolling interests	3						3
Other comprehensive income (loss)	18			18
Purchases (sales) of businesses and noncontrolling interests	252		124				128
Repurchases of common stock (in shares)		(1,243)
Repurchases of common stock	(40)					(40)
Stock-based compensation expense and issuance of common stock (in shares)		1,356
Stock-based compensation expense and issuance of common stock	78		77			1
Ending balance (in shares) at Dec. 31, 2015		98,495
Ending balance at Dec. 31, 2015	958	$ 7	4,815	(164)	(1,550)	(2,417)	267
Changes in Shareholders' Equity
Net income (loss)	(54)				(192)		138
Distributions paid to noncontrolling interests	(111)						(111)
Other comprehensive income (loss)	(94)			(94)
Purchases (sales) of businesses and noncontrolling interests	106		(40)				146
Purchase accounting adjustments	225						225
Stock-based compensation expense and issuance of common stock (in shares)		1,191
Stock-based compensation expense and issuance of common stock	52		52			0
Ending balance (in shares) at Dec. 31, 2016		99,686
Ending balance at Dec. 31, 2016	1,082	$ 7	4,827	(258)	(1,742)	(2,417)	665
Changes in Shareholders' Equity
Net income (loss)	(559)				(704)		145
Distributions paid to noncontrolling interests	(123)						(123)
Other comprehensive income (loss)	54			54
Accretion of redeemable noncontrolling interests	(33)		(33)
Purchases (sales) of businesses and noncontrolling interests	3		4				(1)
Cumulative effect of accounting change	56				56
Stock-based compensation expense and issuance of common stock (in shares)		1,286
Stock-based compensation expense and issuance of common stock	59		61			(2)
Ending balance (in shares) at Dec. 31, 2017		100,972
Ending balance at Dec. 31, 2017	$ 539	$ 7	$ 4,859	$ (204)	$ (2,390)	$ (2,419)	$ 686

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Cash Flows [Abstract]
Net income (loss)	$ (320)	$ 176	$ 78
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	870	850	797
Provision for doubtful accounts	1,434	1,449	1,477
Deferred income tax expense	200	41	42
Stock-based compensation expense	59	68	69
Impairment and restructuring charges, and acquisition-related costs	541	202	318
Litigation and investigation costs	23	293	291
Gains on sales, consolidation and deconsolidation of facilities	(144)	(151)	(186)
Loss from early extinguishment of debt	164	0	1
Equity in earnings of unconsolidated affiliates, net of distributions received	(18)	(13)	(99)
Amortization of debt discount and debt issuance costs	44	41	41
Pre-tax (income) loss from discontinued operations	0	6	(3)
Other items, net	(18)	(1)	59
Changes in cash from operating assets and liabilities:
Accounts receivable	(1,448)	(1,604)	(1,632)
Inventories and other current assets	(35)	(83)	(130)
Income taxes	(38)	(8)	18
Accounts payable, accrued expenses and other current liabilities	(10)	(51)	68
Other long-term liabilities	26	40	38
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(125)	(691)	(200)
Net cash used in operating activities from discontinued operations, excluding income taxes	(5)	(6)	(21)
Net cash provided by operating activities	1,200	558	1,026
Cash flows from investing activities:
Purchases of property and equipment — continuing operations	(707)	(875)	(842)
Purchases of businesses or joint venture interests, net of cash acquired	(50)	(117)	(940)
Proceeds from sales of facilities and other assets	827	573	549
Proceeds from sales of marketable securities, long-term investments and other assets	36	62	60
Purchases of equity investments	(68)	(39)	(134)
Other long-term assets	(10)	(31)	(4)
Other items, net	(7)	(3)	(6)
Net cash provided by (used in) investing activities	21	(430)	(1,317)
Cash flows from financing activities:
Repayments of borrowings under credit facility	(970)	(1,895)	(2,815)
Proceeds from borrowings under credit facility	970	1,895	2,595
Repayments of other borrowings	(4,139)	(154)	(2,049)
Proceeds from other borrowings	3,795	760	3,158
Repurchases of common stock	0	0	(40)
Debt issuance costs	(62)	(12)	(80)
Distributions paid to noncontrolling interests	(258)	(218)	(110)
Proceeds from sale of noncontrolling interests	31	22	11
Purchases of noncontrolling interests	(729)	(186)	(268)
Proceeds from exercise of stock options and employee stock purchase plan	7	4	15
Other items, net	29	16	37
Net cash provided by (used in) financing activities	(1,326)	232	454
Net increase (decrease) in cash and cash equivalents	(105)	360	163
Cash and cash equivalents at beginning of period	716	356	193
Cash and cash equivalents at end of period	611	716	356
Supplemental disclosures:
Interest paid, net of capitalized interest	(939)	(932)	(859)
Income tax payments, net	$ (56)	$ (33)	$ (7)

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a diversified healthcare services company. At December 31, 2017, we operated 76 hospitals (two of which we have since divested), 20 surgical hospitals, and over 470 outpatient centers in the United States, as well as nine facilities in the United Kingdom through our subsidiaries, partnerships and joint ventures, including USPI Holding Company, Inc. (“USPI joint venture”). We hold noncontrolling interests in 121 of these facilities, which are recorded using the equity method of accounting. Our Conifer Holdings, Inc. (“Conifer”) subsidiary provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities.

Effective June 16, 2015, we completed the transaction that combined our freestanding ambulatory surgery and imaging center assets with the surgical facility assets of United Surgical Partners International, Inc. (“USPI”) into our new USPI joint venture. We contributed our interests in 49 ambulatory surgery centers and 20 imaging centers, which had previously been included in our Hospital Operations and other segment, to the joint venture. We also refinanced approximately $1.5 billion of existing USPI debt and paid approximately $424 million to align the respective valuations of the assets contributed to the joint venture. In April 2016, we paid approximately $127 million to purchase additional shares, which increased our ownership interest in the USPI joint venture from 50.1% to approximately 56.3%. In July 2017, we paid approximately $716 million for the purchase of additional shares and the final adjustment to the 2016 purchase price, which increased our ownership interest in the USPI joint venture to 80.0%. In addition, we completed the acquisition of European Surgical Partners Ltd. (“Aspen”) for approximately $226 million on June 16, 2015. Aspen has nine private hospitals and clinics in the United Kingdom, which are classified as held for sale in the accompanying Consolidated Balance Sheet at December 31, 2017 as further discussed in Note 4.

Basis of Presentation

Our Consolidated Financial Statements include the accounts of Tenet and its wholly owned and majority-owned subsidiaries. We eliminate intercompany accounts and transactions in consolidation, and we include the results of operations of businesses that are newly acquired in purchase transactions from their dates of acquisition. We account for significant investments in other affiliated companies using the equity method. Unless otherwise indicated, all financial and statistical data included in these notes to our Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts).

Effective January 1, 2017, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which affects all entities that issue share-based payment awards to their employees. The guidance in ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Upon adoption of ASU 2016-09, we recorded previously unrecognized excess tax benefits of approximately $56 million as a deferred tax asset and a cumulative effect adjustment to retained earnings as of January 1, 2017. Prospectively, all excess tax benefits and deficiencies will be recognized as income tax benefit or expense in our consolidated statement of operations when awards vest.

Also effective January 1, 2017, we early adopted ASU 2017-07, “Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”), which the FASB issued in March 2017. The amendments in ASU 2017-07 apply to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715 of the FASB Accounting Standards Codification. The guidance in ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside a subtotal of income from operations. The line item or items used in the statement of operations to present the other components of net benefit cost must be disclosed. The amendments in ASU 2017-07 must be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the statement of operations. As a result of the adoption of ASU 2017-07, we reclassified approximately $28 million and $21 million of net benefit cost from salaries, wages and benefits expense to other non-operating expense, net, in the accompanying Consolidated Statements of Operations for the years ended December 31, 2016 and 2015, respectively, and approximately $31 million of other components of net benefit cost are included in other non-operating expense, net, in the accompanying Consolidated Statement of Operations for the year ended December 31, 2017.

Certain prior-year amounts have also been reclassified to conform to current-year presentation, primarily due to the adoption of ASU 2017-07 as described above.

Use of Estimates

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 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. Although we believe all adjustments considered necessary for a fair presentation have been included, actual results may vary from those estimates. 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 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.

Translation of Foreign Currencies

The accounts of Aspen were measured in its local currency (the pound sterling) and then translated into U.S. dollars. All assets and liabilities were translated using the current rate of exchange at the balance sheet date. Results of operations were translated using the average rates prevailing throughout the period of operations. Translation gains or losses resulting from changes in exchange rates are accumulated in shareholders’ equity.

Net Operating Revenues Before Provision for Doubtful Accounts

We recognize net operating revenues before provision for doubtful accounts in the period in which our services are performed. Net operating revenues before provision for doubtful accounts primarily consist of net patient service revenues that are recorded based on established billing rates (i.e., gross charges), less estimated discounts for contractual and other allowances, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“Compact”) and other uninsured discount and charity programs.

Gross charges are retail charges. They are not the same as actual pricing, and they generally do not reflect what a hospital is ultimately paid and, therefore, are not displayed in our consolidated statements of operations. Hospitals are typically paid amounts that are negotiated with insurance companies or are set by the government. Gross charges are used to calculate Medicare outlier payments and to determine certain elements of payment under managed care contracts (such as stop-loss payments). Because Medicare requires that a hospital’s gross charges be the same for all patients (regardless of payer category), gross charges are what hospitals charge all patients prior to the application of discounts and allowances.

Revenues under the traditional fee-for-service Medicare and Medicaid programs are based primarily on prospective payment systems. Retrospectively determined cost-based revenues under these programs, which were more prevalent in earlier periods, and certain other payments, such as Indirect Medical Education, Direct Graduate Medical Education, disproportionate share hospital and bad debt expense reimbursement, which are based on our hospitals’ cost reports, are estimated using historical trends and current factors. Cost report settlements under these programs are subject to audit by Medicare and Medicaid auditors and administrative and judicial review, and it can take several years until final settlement of such matters is determined and completely resolved. Because the laws, regulations, instructions and rule interpretations governing Medicare and Medicaid reimbursement are complex and change frequently, the estimates recorded by us could change by material amounts.

We have a system and estimation process for recording Medicare net patient revenue and estimated cost report settlements. This results in us recording accruals to reflect the expected final settlements on our cost reports. For filed cost reports, we record the accrual based on those cost reports and subsequent activity, and record a valuation allowance against those cost reports based on historical settlement trends. The accrual for periods for which a cost report is yet to be filed is recorded based on estimates of what we expect to report on the filed cost reports, and a corresponding valuation allowance is recorded as previously described. Cost reports generally must be filed within five months after the end of the annual cost reporting period. After the cost report is filed, the accrual and corresponding valuation allowance may need to be adjusted. Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the years ended December 31, 2017, 2016 and 2015 by $35 million, $54 million, and $64 million, respectively. Estimated cost report settlements and valuation allowances are included in accounts receivable in the accompanying Consolidated Balance Sheets (see Note 3). We believe that we have made adequate provision for any adjustments that may result from final determination of amounts earned under all the above arrangements with Medicare and Medicaid.

Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per-diem rates, discounted fee-for-service rates and/or other similar contractual arrangements. These revenues are also subject to review and possible audit by the payers, which can take several years before they are completely resolved. The payers are billed for patient services on an individual patient basis. An individual patient’s bill is subject to adjustment on a patient-by-patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis. At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms as well as payment history. Although we do not separately accumulate and disclose the aggregate amount of adjustments to the estimated reimbursement for every patient bill, we believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised. We do not believe there were any adjustments to estimates of patient bills that were material to our revenues. In addition, on a corporate-wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans. Managed care accounts, net of contractual allowances recorded, are further reduced to their net realizable value through provision for doubtful accounts based on historical collection trends for these payers and other factors that affect the estimation process.

We know of no claims, disputes or unsettled matters with any payer that would materially affect our revenues for which we have not adequately provided for in the accompanying Consolidated Financial Statements.

Under our Compact or other uninsured discount programs, the discount offered to certain uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self-pay accounts are recorded. The uninsured patient accounts, net of contractual allowances recorded, are further reduced to their net realizable value through provision for doubtful accounts based on historical collection trends for self-pay accounts and other factors that affect the estimation process.

We also provide charity care to patients who are financially unable to pay for the healthcare services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues or in provision for doubtful accounts. Patient advocates from Conifer’s Medical Eligibility Program screen patients in the hospital to determine whether those patients meet eligibility requirements for financial assistance programs. They also expedite the process of applying for these government programs.

The following table shows the sources of net operating revenues before provision for doubtful accounts from continuing operations:



	Years Ended December 31,
	2017			2016			2015
Hospital Operations and other:
Net patient revenues from acute care hospitals, related outpatient facilities and physician practices
Medicare	$	3,389		$	3,526		$	3,579
Medicaid	1,325			1,341			1,449
Managed care	10,463			10,651			10,582
Indemnity, self-pay and other	1,740			1,694			1,814
Net patient revenues(1)	16,917			17,212			17,424
Health plans	110			482			423
Revenue from other sources	629			623			541
Hospital Operations and other total prior to inter-segment eliminations	17,656			18,317			18,388
Ambulatory Care	1,978			1,833			976
Conifer	1,597			1,571			1,413
Inter-segment eliminations	(618		)	(651		)	(666		)
Net operating revenues before provision for doubtful accounts	$	20,613		$	21,070		$	20,111


(1)	Net patient revenues include revenues from physician practices of $729 million, $745 million and $745 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Provision for Doubtful Accounts

Although outcomes vary, our policy is to attempt to collect amounts due from patients, including co-pays and deductibles due from patients with insurance, at the time of service while complying with all federal and state statutes and regulations, including, but not limited to, the Emergency Medical Treatment and Active Labor Act (“EMTALA”). Generally, as required by EMTALA, patients may not be denied emergency treatment due to inability to pay. Therefore, services, including the legally required medical screening examination and stabilization of the patient, are performed without delaying to obtain insurance information. In non-emergency circumstances or for elective procedures and services, it is our policy to verify insurance prior to a patient being treated; however, there are various exceptions that can occur. Such exceptions can include, for example, instances where (1) we are unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid or Victims of Crime, and it takes several days or weeks before qualification for such benefits is confirmed or denied, and (3) under physician orders we provide services to patients that require immediate treatment.

We provide for accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. Generally, we estimate this allowance based on the aging of our accounts receivable by hospital, our historical collection experience by hospital and for each type of payer over a look-back period, and other relevant factors. A significant portion of our provision for doubtful accounts relates to self-pay patients, as well as co-pays and deductibles owed to us by patients with insurance. Payment pressure from managed care payers also affects our provision for doubtful accounts. We typically experience ongoing managed care payment delays and disputes; however, we continue to work with these payers to obtain adequate and timely reimbursement for our services. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on unemployment rates and the number of uninsured and underinsured patients, the volume of patients through our emergency departments, the increased burden of co-pays and deductibles to be made by patients with insurance, and business practices related to collection efforts. These factors continuously change and can have an impact on collection trends and our estimation process.

Electronic Health Record Incentives

Under certain provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”), federal incentive payments are available to hospitals, physicians and certain other professionals when they adopt, implement or upgrade (“AIU”) certified electronic health record (“EHR”) technology or become “meaningful users,” as defined under ARRA, of EHR technology in ways that demonstrate improved quality, safety and effectiveness of care. We recognize Medicaid EHR incentive payments in our consolidated statements of operations for the first payment year when: (1) CMS approves a state’s EHR incentive plan; and (2) our hospital or employed physician acquires certified EHR technology (i.e., when AIU criteria are met). Medicaid EHR incentive payments for subsequent payment years are recognized in the period during which the specified meaningful use criteria are met. We recognize Medicare EHR incentive payments when: (1) the specified meaningful use criteria are met; and (2) contingencies in estimating the amount of the incentive payments to be received are resolved. During the years ended December 31, 2017, 2016 and 2015, certain of our hospitals and physicians satisfied the CMS AIU and/or meaningful use criteria. As a result, we recognized approximately $9 million, $32 million and $72 million of Medicare and Medicaid EHR incentive payments as a reduction to expense in our Consolidated Statement of Operations for the years ended December 31, 2017, 2016 and 2015, respectively.

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 approximately $611 million and $716 million at December 31, 2017 and 2016, respectively. As of December 31, 2017 and 2016, our book overdrafts were approximately $311 million and $279 million, respectively, which were classified as accounts payable.

At December 31, 2017 and 2016, approximately $179 million and $232 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries, and approximately $30 million and $85 million, respectively, of total cash and cash equivalents in the accompanying Consolidated Balance Sheets were intended for the operations of our health plan-related businesses.

Also at December 31, 2017 and 2016, we had $117 million and $179 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $79 million and $141 million, respectively, were included in accounts payable.

During the years ended December 31, 2017 and 2016, we entered into non-cancellable capital leases of approximately $162 million and $160 million, respectively, primarily for equipment.

Investments in Debt and Equity Securities

We classify investments in debt and equity securities as either available-for-sale, held-to-maturity or as part of a trading portfolio. At December 31, 2017 and 2016, we had no significant investments in securities classified as either held-to-maturity or trading. We carry securities classified as available-for-sale at fair value. We report their unrealized gains and losses, net of taxes, as accumulated other comprehensive income (loss) unless we determine that a loss is other-than-temporary, at which point we would record a loss in our consolidated statements of operations. We include realized gains or losses in our consolidated statements of operations based on the specific identification method.

Investments in Unconsolidated Affiliates

We control 227 of the facilities within our Ambulatory Care segment and, therefore, consolidate their results. We account for many of the facilities our Ambulatory Care segment operates (106 of 333 at December 31, 2017), four of the hospitals our Hospital Operations and other segment operates, and additional companies in which our Hospital Operations and other 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 the accompanying Consolidated Statements of Operations. Summarized financial information for these equity method investees, primarily from our Ambulatory Care segment and the four hospitals mentioned above, is included in the following table. For investments acquired during the reported periods, amounts reflect 100% of the investee’s results beginning on the date of our acquisition of the investment.



	December 31, 2017			December 31, 2016			December 31, 2015
Current assets	$	805		$	943		$	866
Noncurrent assets	$	1,223		$	991		$	854
Current liabilities	$	(354	)	$	(320	)	$	(301	)
Noncurrent liabilities	$	(389	)	$	(345	)	$	(377	)
Noncontrolling interests	$	(490	)	$	(494	)	$	(309	)

	Years Ended December 31,
	2017			2016			2015
Net operating revenues	$	2,907		$	2,823		$	1,335
Net income	$	558		$	573		$	436
Net income attributable to the investees	$	363		$	343		$	356

Our equity method investment that contributes the most to our equity in earnings of unconsolidated affiliates is Texas Health Ventures Group, LLC (“THVG”), which is operated by our USPI joint venture. THVG represented $69 million of the total $144 million equity in earnings of unconsolidated affiliates we recognized for the year ended December 31, 2017 and $61 million of the total $131 million equity in earnings of unconsolidated affiliates we recognized for the year ended December 31, 2016.

Property and Equipment

Additions and improvements to property and equipment exceeding established minimum amounts with a useful life greater than one year are capitalized at cost. Expenditures for maintenance and repairs are charged to expense as incurred. We use the straight-line method of depreciation for buildings, building improvements and equipment. The estimated useful life for buildings and improvements is primarily 15 to 40 years, and for equipment three to 15 years. Newly constructed hospitals are usually depreciated over 50 years. We record capital leases at the beginning of the lease term as assets and liabilities. The value recorded is the lower of either the present value of the minimum lease payments or the fair value of the asset. Such assets, including improvements, are generally amortized over the shorter of either the lease term or their estimated useful life. Interest costs related to construction projects are capitalized. In the years ended December 31, 2017, 2016 and 2015, capitalized interest was $15 million, $22 million and $12 million, respectively.

We evaluate our long-lived assets for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future undiscounted cash flows. If the estimated future undiscounted cash flows are less than the carrying value of the assets, we calculate the amount of an impairment if the carrying value of the long-lived assets exceeds the fair value of the assets. The fair value of the assets is estimated based on appraisals, established market values of comparable assets or internal estimates of future net cash flows expected to result from the use and ultimate disposition of the asset. The estimates of these future cash flows are based on assumptions and projections we believe to be reasonable and supportable. They require our subjective judgments and take into account assumptions about revenue and expense growth rates. These assumptions may vary by type of facility and presume stable, improving or, in some cases, declining results at our hospitals, depending on their circumstances.

We report long-lived assets to be disposed of at the lower of their carrying amounts or fair values less costs to sell. In such circumstances, our estimates of fair value are based on appraisals, established market prices for comparable assets or internal estimates of future net cash flows.

Goodwill and Other Intangible Assets

Goodwill represents the excess of costs over the fair value of assets of businesses acquired. Goodwill and other intangible assets acquired in purchase business combinations and determined to have indefinite useful lives are not amortized, but instead are subject to impairment tests performed at least annually. For goodwill, we perform the test at the reporting unit level when events occur that require an evaluation to be performed or at least annually. If we determine the carrying value of goodwill is impaired, or if the carrying value of a business that is to be sold or otherwise disposed of exceeds its fair value, we reduce the carrying value, including any allocated goodwill, to fair value. Estimates of fair value are based on appraisals, established market prices for comparable assets or internal estimates of future net cash flows and presume stable, improving or, in some cases, declining results at our hospitals, depending on their circumstances.

Other intangible assets primarily consist of capitalized software costs, which are amortized on a straight-line basis over the estimated useful life of the software, which ranges from three to 15 years, costs of acquired management and other contract service rights, most of which have indefinite lives, and miscellaneous intangible assets.

Accruals for General and Professional Liability Risks

We accrue for estimated professional and general liability claims, when they are probable and can be reasonably estimated. The accrual, which includes an estimate for incurred but not reported claims, is updated each quarter based on a model of projected payments using case-specific facts and circumstances and our historical loss reporting, development and settlement patterns and is discounted to its net present value using a risk-free discount rate 2.33% at December 31, 2017 and 2.25% at December 31, 2016. To the extent that subsequent claims information varies from our estimates, the liability is adjusted in the period such information becomes available. Malpractice expense is presented within other operating expenses in the accompanying Consolidated Statements of Operations.

Income Taxes

We account for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Income tax receivables and liabilities and deferred tax assets and liabilities are recognized based on the amounts that more likely than not will be sustained upon ultimate settlement with taxing authorities.

Developing our provision for income taxes and analysis of uncertain tax positions requires significant judgment and knowledge of federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets.

We assess the realization of our deferred tax assets to determine whether an income tax valuation allowance is required. Based on all available evidence, both positive and negative, and the weight of that evidence to the extent such evidence can be objectively verified, we determine whether it is more likely than not that all or a portion of the deferred tax assets will be realized. The main factors that we consider include:


•	Cumulative profits/losses in recent years, adjusted for certain nonrecurring items;


•	Income/losses expected in future years;


•	Unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels;


•	The availability, or lack thereof, of taxable income in prior carryback periods that would limit realization of tax benefits; and


•	The carryforward period associated with the deferred tax assets and liabilities.

We consider many factors when evaluating our uncertain tax positions, and such judgments are subject to periodic review. Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied: (1) the more likely than not recognition threshold is satisfied; (2) the position is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the taxing authority to examine and challenge the position has expired. Tax benefits associated with an uncertain tax position are derecognized in the period in which the more likely than not recognition threshold is no longer satisfied.

Segment Reporting

We primarily operate acute care hospitals and related healthcare facilities. Our general hospitals generated 79%, 78% and 83% of our net operating revenues before provision for doubtful accounts in the years ended December 31, 2017, 2016 and 2015, respectively. Each of our markets related to our general hospitals report directly to our president of hospital operations. Major decisions, including capital resource allocations, are made at the consolidated level, not at the market or hospital level.

Our Hospital Operations and other segment is comprised of our acute care hospitals, ancillary outpatient facilities, urgent care centers, microhospitals and physician practices. As described in Note 4, certain of our facilities are classified as held for sale in the accompanying Consolidated Balance Sheet at December 31, 2017. In the three months ended June 30, 2015, we began reporting Ambulatory Care as a separate reportable business segment. Previously, our business consisted of our Hospital Operations and other segment and our Conifer segment, which provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations and health plans.

Effective June 16, 2015, we completed the joint venture transaction that combined our freestanding ambulatory surgery and imaging center assets with USPI’s surgical facility assets. We contributed our interests in 49 ambulatory surgery centers and 20 imaging centers, which had previously been included in our Hospital Operations and other segment, to the joint venture. We also completed the acquisition of Aspen effective June 16, 2015, which includes nine private hospitals and clinics in the United Kingdom. Our Ambulatory Care segment is comprised of the operations of our USPI joint venture and Aspen facilities. The factors for determining the reportable segments include the manner in which management evaluates operating performance combined with the nature of the individual business activities.

Costs Associated With Exit or Disposal Activities

We recognize costs associated with exit (including restructuring) or disposal activities when they are incurred and can be measured at fair value, rather than at the date of a commitment to an exit or disposal plan.

EQUITY

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

EQUITY

Rights Agreement

On August 31, 2017, our board of directors (the “board”) declared a dividend of one preferred share purchase right per each outstanding share of our common stock issuable to our shareholders of record as of the close of business on September 10, 2017 (the “Record Date”). One right will also be issued together with each share of our common stock issued after the Record Date. In connection with the distribution of the Rights, we entered into a rights agreement (the “Rights Agreement”) intended to protect all shareholder interests as the board executes leadership and governance changes, and to diminish the risk that our ability to use our net operating loss carryforwards to reduce future federal income tax obligations may become substantially limited due to an “ownership change,” as defined in Section 382 of the Internal Revenue Code. Currently, the rights are attached to our common share certificates, and no separate certificates evidencing the rights have been issued. The rights will separate and begin trading separately from our common shares on the earlier to occur of (i) 10 business days after a public announcement that a person has become an “Acquiring Person” by acquiring beneficial ownership of 4.9% or more of our outstanding common stock (or, in the case of a person that had beneficial ownership of 4.9% or more of our outstanding common stock as of the close of business on the Record Date, by obtaining beneficial ownership of additional shares of common stock), or, in the event an exchange is effected in accordance with the Rights Agreement and the board determines that a later date is advisable, then such later date and (ii) 10 business days (or such later date as may be specified by the board prior to such time as any person becomes an Acquiring Person) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in such person becoming an Acquiring Person. In the event that a person becomes an Acquiring Person, each holder of a right, other than rights that are or, under certain circumstances, were beneficially owned by the Acquiring Person (which will thereupon become null and void), will thereafter have the right to receive upon exercise of a right and payment of $70.00 (the “Purchase Price”), one one-thousandth of a share of Series R Preferred Stock, subject to adjustment. The rights will expire on the close of business on the date on which our 2018 annual meeting of stockholders is concluded (or, if later, the date on which the votes of our stockholders with respect to such meeting are certified). Shareholders who beneficially owned 4.9% or more of our outstanding common stock as of the close of business on September 10, 2017 will not trigger the Rights Agreement so long as they do not acquire beneficial ownership of additional shares of our common stock at a time when they still beneficially own 4.9% or more of our outstanding common stock. Our board of directors may, in its sole discretion, also exempt any person from triggering the Rights Agreement, such as in the case where beneficial ownership of more than 4.9% of our common stock does not limit the use of our net operating losses.

Noncontrolling Interests

Our noncontrolling interests balances at December 31, 2017 and 2016 in our Consolidated Statements of Shareholders’ Equity were comprised of $64 million and $89 million, respectively, from our Hospital Operations and other segment, and $622 million and $576 million, respectively, from our Ambulatory Care segment. Our net income attributable to noncontrolling interests for the years ended December 31, 2017, 2016 and 2015 were comprised of $11 million, $11 million and $24 million, respectively, from our Hospital Operations and other segment, and $134 million, $127 million and $28 million, respectively, from our Ambulatory Care segment.

Share Repurchase Program

In November 2015, we announced that our board of directors had authorized the repurchase of up to $500 million of our common stock through a share repurchase program that expired in December 2016. Pursuant to the share repurchase program, we paid approximately $40 million to repurchase a total of 1,242,806 shares during the period from the commencement of the program through December 31, 2015. There were no purchases under the program during the year ended December 31, 2016.



Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Dollar Value of Shares Not Purchased Under the Program
	(In Thousands)			(In Thousands)	(In Millions)
November 1, 2015 through November 30, 2015	978	$	32.71	978	$	468
December 1, 2015 through December 31, 2015	265	30.25		265	460
November 1, 2015 through December 31, 2015	1,243	$	32.18	1,243	$	460

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

12 Months Ended

Dec. 31, 2017

Accounts Receivable Additional Disclosures [Abstract]

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The principal components of accounts receivable are shown in the table below:



	December 31, 2017			December 31, 2016
Continuing operations:
Patient accounts receivable	$	3,376		$	3,799
Allowance for doubtful accounts	(898		)	(1,031		)
Estimated future recoveries	132			141
Net cost reports and settlements payable and valuation allowances	4			(14		)
	2,614			2,895
Discontinued operations	2			2
Accounts receivable, net	$	2,616		$	2,897

At December 31, 2017 and 2016, our allowance for doubtful accounts was 26.6% and 27.1%, respectively, of our patient accounts receivable. Our allowance was impacted by higher patient co-pays and deductibles, as well as increases in our uninsured revenues during the year ended December 31, 2017 compared to the same period in 2016. Additionally, the composition of our accounts receivable has been impacted by our divestiture activity.

Accounts that are pursued for collection through Conifer’s regional business offices are maintained on our hospitals’ books and reflected in patient accounts receivable with an allowance for doubtful accounts established to reduce the carrying value of such receivables to their estimated net realizable value. Generally, we estimate this allowance based on the aging of our accounts receivable by hospital, our historical collection experience by hospital and for each type of payer, and other relevant factors.

Accounts assigned to Conifer are written off and excluded from patient accounts receivable and allowance for doubtful accounts; however, an estimate of future recoveries from all accounts at Conifer is determined based on historical experience and recorded on our hospitals’ books as a component of accounts receivable in the accompanying Consolidated Balance Sheets.

We also provide charity care to patients who are financially unable to pay for the healthcare services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues. Most states include an estimate of the cost of charity care in the determination of a hospital’s eligibility for Medicaid disproportionate share hospital (“DSH”) payments. These payments are intended to mitigate our cost of uncompensated care, as well as reduced Medicaid funding levels. Generally, our method of measuring the estimated costs uses adjusted self-pay/charity patient days multiplied by selected operating expenses (which include salaries, wages and benefits, supplies and other operating expenses and which exclude the costs of our health plan businesses) per adjusted patient day. The adjusted self-pay/charity patient days represents actual self-pay/charity patient days adjusted to include self-pay/charity outpatient services by multiplying actual self-pay/charity patient days by the sum of gross self-pay/charity inpatient revenues and gross self-pay/charity outpatient revenues and dividing the results by gross self-pay/charity inpatient revenues. The table below shows our estimated costs of caring for our self-pay patients and charity care patients and revenues attributable to Medicaid DSH and other supplement revenues we recognize for the years ended December 31, 2017, 2016 and 2015.



	Years Ended December 31,
	2017		2016		2015
Estimated costs for:
Self-pay patients	$	648	$	609	$	598
Charity care patients	121		138		184
Total	$	769	$	747	$	782
Medicaid DSH and other supplemental revenues	$	864	$	906	$	888

We had approximately $312 million and $266 million of receivables recorded in other current assets and investments and other assets, respectively, and approximately $159 million and $49 million of payables recorded in other current liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheet at December 31, 2017 related to California’s provider fee program. We had approximately $537 million of receivables recorded in other current assets and approximately $139 million of payables recorded in other current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2016 related to California’s provider fee program.

ASSETS AND LIABILITIES HELD FOR SALE

12 Months Ended

Dec. 31, 2017

Discontinued Operation, Additional Disclosures [Abstract]

ASSETS AND LIABILITIES HELD FOR SALE

In the three months ended December 31, 2017, our hospital, physician practices and other hospital-affiliated operations in St. Louis, Missouri met the criteria to be classified as held for sale in accordance with the guidance in the FASB’s Accounting Standards Codification (“ASC”) 360, “Property, Plant and Equipment.” We classified $42 million of our St. Louis-area assets as “assets held for sale” in current assets and the related liabilities of $3 million as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2017. These assets and liabilities, which are in our Hospital Operations and other segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. There was no impairment recorded for a write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of the planned divestiture of these assets.

Also in the three months ended December 31, 2017, three of our hospitals in the Chicago-area, as well as other operations affiliated with the hospitals, met the criteria to be classified as held for sale. As a result, we classified these assets totaling $126 million as “assets held for sale” in current assets and the related liabilities of $52 million as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2017. These assets and liabilities, which are in our Hospital Operations and other segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. We recorded impairment charges of $73 million for the write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of the planned divestiture of these assets.

Additionally, certain assets and the related liabilities of our health plan in California, as well as the real estate related to our Abrazo Maryvale hospital we have closed in Arizona, were classified as held for sale in the three months ended December 31, 2017. We classified $18 million of assets as “assets held for sale” in current assets and the related liabilities of $9 million as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2017 related to these entities. These assets and liabilities, which are in our Hospital Operations and other segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. There was no impairment recorded for a write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of the planned divestiture of these assets.

In the three months ended September 30, 2017, we entered into a definitive agreement for the sale of our hospitals, physician practices and related assets in Philadelphia, Pennsylvania and the surrounding area. We classified $223 million of our Philadelphia-area assets as “assets held for sale” in current assets and the related liabilities of $52 million as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2017. These assets and liabilities, which are in our Hospital Operations and other segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. We recorded impairment charges of $232 million for the write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of this transaction, which closed effective January 11, 2018, resulting in net pre-tax proceeds of $152.5 million in cash and a secured promissory note for $17.5 million.

Also in the three months ended September 30, 2017, MacNeal Hospital, which is located in a suburb of Chicago, as well as other operations affiliated with the hospital, met the criteria to be classified as held for sale. As a result, we classified these assets totaling $202 million as “assets held for sale” in current assets and the related liabilities of $36 million as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2017. These assets and liabilities, which are in our Hospital Operations and other segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. There was no impairment recorded for a write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of the planned divestiture of these assets.

Additionally, our nine Aspen facilities in the United Kingdom met the criteria to be classified as held for sale in the three months ended September 30, 2017. We classified $406 million of our United Kingdom assets as “assets held for sale” in current assets and the related liabilities of $328 million as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2017. These assets and liabilities, which are in our Ambulatory Care segment, were recorded at the lower of their carrying amount or their fair value less estimated costs to sell. We recorded impairment charges of $59 million for the write-down of assets held for sale to their estimated fair value, less estimated costs to sell.

Assets and liabilities classified as held for sale at December 31, 2017 were comprised of the following:



Accounts receivable	$	211
Other current assets	123
Investments and other long-term assets	18
Property and equipment	557
Other intangible assets	10
Goodwill	98
Current liabilities	(169		)
Long-term liabilities	(311		)
Net assets held for sale	$	537

In the three months ended June 30, 2017, we entered into a definitive agreement for the sale of our hospitals, physician practices and related assets in Houston, Texas and the surrounding area, and we classified these assets and liabilities as held for sale. Effective August 1, 2017, we completed the sale for net proceeds of approximately $750 million and recognized a gain on sale of approximately $111 million.

The following table provides information on significant components of our business that have been disposed of or have been classified as held for sale in the year ended December 31, 2017:



	Years Ended December 31,
	2017			2016			2015
Significant disposals:
Houston
Income from continuing operations, before income taxes	$	133		$	67		$	85
Pre-tax income attributable to Tenet Healthcare Corporation common shareholders	$	132		$	64		$	82

Significant classifications as held for sale:
Income (loss) from continuing operations, before income taxes
Chicago-area	$	(82	)	$	(1	)	$	9
Philadelphia	(255		)	(75		)	(7		)
MacNeal	27			29			36
Aspen	(68		)	(16		)	(4		)
Total	$	(378	)	$	(63	)	$	34

In the three months ended September 30, 2016, certain of our health plan assets and liabilities met the criteria to be classified as held for sale. We classified $27 million of our health plan assets as “assets held for sale” in current assets and $13 million of our health plan liabilities as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2016. During the year ended December 31, 2017, we completed the sales of certain of our health plan businesses (or the membership thereof) in Michigan, Arizona and Texas at transaction prices of approximately $20 million, $13 million and $12 million, respectively, and recognized gains on the sales of approximately $3 million, $13 million and $10 million, respectively.

Our hospitals, physician practices and related assets in Georgia met the criteria to be classified as assets held for sale in the three months ended June 30, 2015. We completed the sale of our Georgia assets on March 31, 2016 at a transaction price of approximately $575 million and recognized a gain on sale of approximately $113 million. Because we did not sell the related accounts receivable with respect to the pre-closing period, net receivables of approximately $12 million are included in accounts receivable, less allowance for doubtful accounts in the accompanying Consolidated Balance Sheet at December 31, 2017.

In the three months ended June 30, 2015, we entered into a definitive agreement for the sale of the assets of our Saint Louis University Hospital (“SLUH”) to Saint Louis University. As a result of this anticipated transaction, we recorded an impairment charge of $147 million for the write-down of assets held for sale to their estimated fair value, less estimated costs to sell, in the three months ended June 30, 2015. We completed the sale of SLUH on August 31, 2015 at a transaction price of approximately $32 million, excluding working capital and subject to customary purchase price adjustments. Because we did not sell SLUH’s accounts receivable related to the pre-closing period, net receivables of approximately $3 million are included in accounts receivable, less allowance for doubtful accounts, in the accompanying Consolidated Balance Sheet at December 31, 2017.

Our hospitals, physician practices and related assets in North Carolina also met the criteria to be classified as assets held for sale in the three months ended June 30, 2015. We completed the sale of our North Carolina assets on December 31, 2015 at a transaction price of approximately $191 million and recognized a gain on sale of approximately $3 million. Because we did not sell the related accounts receivable related to the pre-closing period, net receivables of approximately $2 million are included in accounts receivable, less allowance for doubtful accounts in the accompanying Consolidated Balance Sheet at December 31, 2017.

During the three months ended March 31, 2015, we entered into definitive agreements to form two joint ventures with affiliates of Baylor Scott & White Holdings (“BSW Holdings”), the parent company of Baylor Scott & White Health, involving the ownership and operation of the hospitals formerly known as Centennial Medical Center, Doctors Hospital at White Rock Lake, Lake Pointe Medical Center and Texas Regional Medical Center at Sunnyvale (collectively, “our North Texas hospitals”) – which we continue to operate – and Baylor Medical Center at Garland – which is operated by an affiliate of BSW Holdings, which, through its affiliates, holds a majority ownership interest in the joint ventures. The transactions closed on December 31, 2015 at a net transaction price of approximately $288 million, and we recorded a gain on deconsolidation of these facilities of approximately $151 million. We also recorded an equity investment in the new joint ventures of approximately $164 million, which included $11 million of cash contributed at closing.

IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS	12 Months Ended
	Dec. 31, 2017
Restructuring Costs and Asset Impairment Charges [Abstract]
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS	IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS We recognized impairment charges on long-lived assets in 2017, 2016 and 2015 because the fair values of those assets or groups of assets indicated that the carrying amount was not recoverable. The fair value estimates were derived from appraisals, established market values of comparable assets, or internal estimates of future net cash flows. These fair value estimates can change by material amounts in subsequent periods. Many factors and assumptions can impact the estimates, including the future financial results of the hospitals, how the hospitals are operated in the future, changes in healthcare industry trends and regulations, and the nature of the ultimate disposition of the assets. In certain cases, these fair value estimates assume the highest and best use of hospital assets in the future to a market place participant is other than as a hospital. In these cases, the estimates are based on the fair value of the real property and equipment if utilized other than as a hospital. The impairment recognized does not include the costs of closing the hospitals or other future operating costs, which could be substantial. Accordingly, the ultimate net cash realized from the hospitals, should we choose to sell them, could be significantly less than their impaired value. 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 the facility’s most recent projections. If these projections are not met, or if in the future negative trends occur that impact our future outlook, impairments of long-lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material. At December 31, 2017, our continuing operations consisted of three reportable segments, Hospital Operations and other, Ambulatory Care and Conifer. Our segments are reporting units used to perform our goodwill impairment analysis. We completed our annual impairment tests for goodwill as of October 1, 2017. During the year ended December 31, 2017, we changed our annual quantitative goodwill impairment testing date from December 31 to October 1 of each year. The change in the goodwill impairment test date better aligns the impairment testing procedures with the timing of our long-term planning process, which is a significant input to the testing. Also, during January 2017, our Florida, Northeast and Southern regions and our Detroit market were combined to form our then Eastern region. Subsequent to this change, our Hospital Operations and other segment was comprised of our then Eastern, Texas and Western regions, which were our reporting units used to perform our goodwill impairment analysis. During October 2017, we further reorganized our business such that our regional management layer was eliminated. Due to this reorganization, our previous region reporting units for our Hospital Operations and other segment were combined into one reporting unit. The change in testing date and the change in reporting units did not delay, accelerate or avoid a goodwill impairment charge. We periodically incur costs to implement restructuring efforts for specific operations, which are recorded in our statement of operations as they are incurred. Our restructuring plans focus on various aspects of operations, including aligning our operations in the most strategic and cost-effective structure. Certain restructuring and acquisition-related costs are based on estimates. Changes in estimates are recognized as they occur. Year Ended December 31, 2017 During the year ended December 31, 2017, we recorded impairment and restructuring charges and acquisition-related costs of $541 million, consisting of $402 million of impairment charges, $117 million of restructuring charges and $22 million of acquisition-related costs. Impairment charges consisted of $364 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for our Aspen, Philadelphia-area and certain of our Chicago-area facilities, $31 million for the impairment of two equity method investments and $7 million to write-down intangible assets. Of the total impairment charges recognized for the year ended December 31, 2017, $337 million related to our Hospital Operations and other segment, $63 million related to our Ambulatory Care segment, and $2 million related to our Conifer segment. Restructuring charges consisted of $82 million of employee severance costs, $15 million of contract and lease termination fees, and $20 million of other restructuring costs. Acquisition-related costs consisted of $6 million of transaction costs and $16 million of acquisition integration charges. Year Ended December 31, 2016 During the year ended December 31, 2016, we recorded impairment and restructuring charges and acquisition-related costs of $202 million. This amount included impairment charges of approximately $54 million for the write-down of buildings, equipment and other long-lived assets, primarily capitalized software costs classified as other intangible assets, to their estimated fair values at four hospitals. Material adverse trends in our most recent estimates of future undiscounted cash flows of the hospitals indicated the carrying value of the hospitals’ long-lived assets was not recoverable from the estimated future cash flows. We believe the most significant factors contributing to the adverse financial trends include reductions in volumes of insured patients, shifts in payer mix from commercial to governmental payers combined with reductions in reimbursement rates from governmental payers, and high levels of uninsured patients. As a result, we updated the estimate of the fair value of the hospitals’ long-lived assets and compared the fair value estimate to the carrying value of the hospitals’ long-lived assets. Because the fair value estimates were lower than the carrying value of the long-lived assets, an impairment charge was recorded for the difference in the amounts. The aggregate carrying value of assets held and used of the hospitals for which impairment charges were recorded was $163 million at December 31, 2016 after recording the impairment charges. We also recorded $19 million of impairment charges related to investments and $14 million related to other intangible assets, primarily contract-related intangibles and capitalized software costs not associated with the hospitals described above. Of the total impairment charges recognized for the year ended December 31, 2016, $76 million related to our Hospital Operations and other segment, $8 million related to our Ambulatory Care segment, and $3 million related to our Conifer segment. We also recorded $35 million of employee severance costs, $14 million of restructuring costs, $14 million of contract and lease termination fees, and $52 million in acquisition-related costs, which include $20 million of transaction costs and $32 million of acquisition integration costs. Year Ended December 31, 2015 During the year ended December 31, 2015, we recorded impairment and restructuring charges and acquisition-related costs of $318 million, including $168 million of impairment charges. We recorded an impairment charge of approximately $147 million to write-down assets held for sale to their estimated fair value, less estimated costs to sell, as a result of entering into a definitive agreement for the sale of SLUH during the three months ended June 30, 2015, as further described in Note 4. We also recorded impairment charges of approximately $19 million for the write-down of buildings, equipment and other long-lived assets, primarily capitalized software costs classified as other intangible assets, to their estimated fair values at two hospitals. The aggregate carrying value of assets held and used of the hospital for which an impairment charge was recorded was $45 million as of December 31, 2015 after recording the impairment charge. We also recorded $2 million related to investments. In addition, we recorded $25 million of employee severance costs, $6 million of restructuring costs, $19 million of contract and lease termination fees, and $100 million in acquisition-related costs, which include $55 million of transaction costs and $45 million of acquisition integration charges.

LONG-TERM DEBT AND LEASE OBLIGATIONS

12 Months Ended

Dec. 31, 2017

Long-term Debt and Capital Lease Obligations [Abstract]

LONG-TERM DEBT AND LEASE OBLIGATIONS

The table below shows our long-term debt as of December 31, 2017 and 2016:



	December 31, 2017			December 31, 2016
Senior unsecured notes:
5.000% due 2019	$	—		$	1,100
5.500% due 2019	500			500
6.750% due 2020	300			300
8.000% due 2020	—			750
8.125% due 2022	2,800			2,800
6.750% due 2023	1,900			1,900
7.000% due 2025	500			—
6.875% due 2031	430			430
Senior secured first lien notes:
6.250% due 2018	—			1,041
4.750% due 2020	500			500
6.000% due 2020	1,800			1,800
Floating % due 2020	—			900
4.500% due 2021	850			850
4.375% due 2021	1,050			1,050
4.625% due 2024	1,870			—
Senior secured second lien notes:
7.500% due 2022	750			750
5.125% due 2025	1,410			—
Capital leases	431			735
Mortgage notes	77			84
Unamortized issue costs, note discounts and premiums	(231		)	(235		)
Total long-term debt	14,937			15,255
Less current portion	146			191
Long-term debt, net of current portion	$	14,791		$	15,064

Credit Agreement

We have a senior secured revolving credit facility (as amended, the “Credit Agreement”) that provides, subject to borrowing availability, for revolving loans in an aggregate principal amount of up to $1 billion, with a $300 million subfacility for standby letters of credit. Obligations under the Credit Agreement, which has a scheduled maturity date of December 4, 2020, are guaranteed by substantially all of our domestic wholly owned hospital subsidiaries and are secured by a first-priority lien on the accounts receivable owned by us and the subsidiary guarantors. Outstanding revolving loans accrue interest at a base rate plus a margin ranging from 0.25% to 0.75% per annum or the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 1.25% to 1.75% per annum, 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 accounts receivable, including self-pay accounts. At December 31, 2017, we had no cash borrowings outstanding under the Credit Agreement and we had approximately $2 million of standby letters of credit outstanding. Based on our eligible receivables, approximately $998 million was available for borrowing under the Credit Agreement at December 31, 2017.

Letter of Credit Facility

We have a letter of credit facility (as amended, the “LC Facility”) that provides for the issuance of standby and documentary letters of credit, from time to time, in an aggregate principal amount of up to $180 million (subject to increase to up to $200 million). Obligations under the LC Facility are guaranteed and secured by a first-priority pledge of the capital stock and other ownership interests of certain of our wholly owned domestic hospital subsidiaries on an equal ranking basis with our senior secured first lien notes. On September 15, 2016, we entered into an amendment to the existing letter of credit facility agreement in order to, among other things, (i) extend the scheduled maturity date of the LC Facility to March 7, 2021, (ii) reduce the margin payable with respect to unreimbursed drawings under letters of credit and undrawn letters of credit issued under the LC Facility, and (iii) reduce the commitment fee payable with respect to the undrawn portion of the commitments under the LC Facility.

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 plus a margin equal to 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. At December 31, 2017, we had approximately $100 million of standby letters of credit outstanding under the LC Facility.

Senior Secured Notes and Senior Unsecured Notes

On June 14, 2017, we sold $830 million aggregate principal amount of our 4.625% senior secured first lien notes, which will mature on July 15, 2024 (the “2024 Secured First Lien Notes”). We will pay interest on the 2024 Secured First Lien Notes semi-annually in arrears on January 15 and July 15 of each year, which payments commenced on January 15, 2018. The proceeds from the sale of the 2024 Secured First Lien Notes were used, after payment of fees and expenses, together with cash on hand, to deposit with the trustee an amount sufficient to fund the redemption of all $900 million in aggregate principal amount of our floating rate senior secured notes due 2020 (the “2020 Floating Rate Notes”) on July 14, 2017, thereby fully discharging the 2020 Floating Rate Notes as of June 14, 2017. In connection with the redemption, we recorded a loss from early extinguishment of debt of approximately $26 million in the three months ended June 30, 2017, primarily related to the difference between the redemption price and the par value of the notes, as well as the write-off of associated unamortized note discounts and issuance costs.

Also on June 14, 2017, THC Escrow Corporation III (“Escrow Corp.”), a Delaware corporation established for the purpose of issuing the securities referred to in this paragraph, issued $1.040 billion in aggregate principal amount of 4.625% senior secured first lien notes due 2024 (the “Escrow Secured First Lien Notes”), $1.410 billion in aggregate principal amount of 5.125% senior secured second lien notes due 2025 (the “Escrow Secured Second Lien Notes”) and $500 million in aggregate principal amount of 7.000% senior unsecured notes due 2025 (the “Escrow Unsecured Notes”).

On July 14, 2017, we (i) assumed Escrow Corp.’s obligations with respect to the Escrow Secured Second Lien Notes and (ii) effected a mandatory exchange of all outstanding Escrow Secured First Lien Notes for a like principal amount of our newly issued 2024 Secured First Lien Notes. The proceeds from the sale of the Escrow Secured Second Lien Notes and Escrow Secured First Lien Notes were released from escrow on July 14, 2017 and were used, after payment of fees and expenses, to finance our redemption on July 14, 2017 of $1.041 billion aggregate principal amount of our outstanding 6.250% senior secured notes due 2018 and $1.100 billion aggregate principal amount of our outstanding 5.000% senior unsecured notes due 2019.

On August 1, 2017, we assumed Escrow Corp.’s obligations with respect to the Escrow Unsecured Notes. The proceeds from the sale of the Escrow Unsecured Notes were released from escrow on August 1, 2017 and were used, after payment of fees and expenses, to finance our redemption on August 1, 2017 of $500 million aggregate principal amount of our 8.000% senior unsecured notes due 2020.

On September 11, 2017, we redeemed the remaining $250 million aggregate principal amount of our 8.000% senior unsecured notes due 2020 using cash on hand.

As a result of the redemption activities in the three months ended September 30, 2017 discussed above, we recorded a loss from early extinguishment of debt of approximately $138 million in the period, primarily related to the difference between the redemption price and the par value of the notes, as well as the write-off of associated unamortized note discounts and issuance costs.

In December 2016, we sold $750 million aggregate amount of our 7.500% senior secured second lien notes (the “Second Lien Notes”), which will mature on January 1, 2022. We will pay interest on the Second Lien Notes semi-annually in arrears on January 1 and July 1 of each year, which payments commenced on July 1, 2017. The net proceeds of the Second Lien Notes were used, after payment of fees and expenses, to repay indebtedness outstanding under our Credit Agreement and for general corporate purposes.

All of our senior secured notes are guaranteed by certain of our wholly owned domestic hospital company subsidiaries and secured by a pledge of the capital stock and other ownership interests of those subsidiaries on either a first lien or second lien basis, as indicated in the table above. All of our senior secured notes and the related subsidiary guarantees are our and the subsidiary guarantors’ senior secured obligations. All of our senior secured notes rank equally in right of payment with all of our other senior secured indebtedness. Our senior secured notes rank senior to any subordinated indebtedness that we or such subsidiary guarantors may incur; they are effectively senior to our and such subsidiary guarantors’ existing and future unsecured indebtedness and other liabilities to the extent of the value of the collateral securing the notes and the subsidiary guarantees; they are effectively subordinated to our and such subsidiary guarantors’ obligations under our Credit Agreement to the extent of the value of the collateral securing borrowings thereunder; and they are structurally subordinated to all obligations of our non-guarantor subsidiaries.

The indentures setting forth the terms of our senior secured notes contain provisions governing our ability to redeem the notes and the terms by which we may do so. At our option, we may redeem our senior secured notes, in whole or in part, at any time at a redemption price equal to 100% of the principal amount of the notes redeemed plus the make-whole premium set forth in the related indenture, together with accrued and unpaid interest thereon, if any, to the redemption date. Certain series of the senior secured notes may also be redeemed, in whole or in part, at certain redemption prices set forth in the applicable indentures, together with accrued and unpaid interest. In addition, we may be required to purchase for cash all or any part of each series of our senior secured notes upon the occurrence of a change of control (as defined in the applicable indentures) for a cash purchase price of 101% of the aggregate principal amount of the notes, plus accrued and unpaid interest.

All of our senior unsecured notes are general unsecured senior debt obligations that rank equally in right of payment with all of our other unsecured senior indebtedness, but are effectively subordinated to our senior secured notes described above, the obligations of our subsidiaries and any obligations under our Credit Agreement to the extent of the value of the collateral. We may redeem any series of our senior unsecured notes, in whole or in part, at any time at a redemption price equal to 100% of the principal amount of the notes redeemed, plus a make-whole premium specified in the applicable indenture, if any, together with accrued and unpaid interest to the redemption date.

Covenants

Credit Agreement. Our Credit Agreement contains customary covenants for an asset-backed facility, including a minimum fixed charge coverage ratio to be met if the designated excess availability under the revolving credit facility falls below $100 million, as well as limits on debt, asset sales and prepayments of senior debt. The Credit Agreement also includes a provision, which we believe is customary in receivables-backed credit facilities, that gives our lenders the right to require that proceeds of collections of substantially all of our consolidated accounts receivable be applied directly to repay outstanding loans and other amounts that are due and payable under the Credit Agreement at any time that unused borrowing availability under the revolving credit facility is less than $100 million for three consecutive business days or if an event of default has occurred and is continuing thereunder. In that event, we would seek to re-borrow under the Credit Agreement to satisfy our operating cash requirements. Our ability to borrow under the Credit Agreement is subject to conditions that we believe are customary in revolving credit facilities, including that no events of default then exist.

Senior Secured Notes. The indentures governing our senior secured notes contain covenants that, among other things, restrict our ability and the ability of our subsidiaries to incur liens, consummate asset sales, enter into sale and lease-back transactions or consolidate, merge or sell all or substantially all of our or their assets, other than in certain transactions between one or more of our wholly owned subsidiaries. These restrictions, however, are subject to a number of exceptions and qualifications. In particular, there are no restrictions on our ability or the ability of our subsidiaries to incur additional indebtedness, make restricted payments, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, enter into transactions with affiliates or make advances to, or invest in, other entities (including unaffiliated entities). In addition, the indentures governing our senior secured notes contain a covenant that neither we nor any of our subsidiaries will incur secured debt, unless at the time of and after giving effect to the incurrence of such debt, the aggregate amount of all such secured debt (including the aggregate principal amount of senior secured notes outstanding at such time) does not exceed the amount that would cause the secured debt ratio (as defined in the indentures) to exceed 4.0 to 1.0; provided that the aggregate amount of all such debt secured by a lien on par to the lien securing the senior secured notes may not exceed the amount that would cause the secured debt ratio to exceed 3.0 to 1.0.

Senior Unsecured Notes. The indentures governing our senior unsecured notes contain covenants and conditions that have, among other requirements, limitations on (1) liens on “principal properties” and (2) sale and lease-back transactions with respect to principal properties. A principal property is defined in the senior unsecured notes indentures as a hospital that has an asset value on our books in excess of 5% of our consolidated net tangible assets, as defined in such indentures. The above limitations do not apply, however, to (1) debt that is not secured by principal properties or (2) debt that is secured by principal properties if the aggregate of such secured debt does not exceed 15% of our consolidated net tangible assets, as further described in the indentures. The senior unsecured notes indentures also prohibit the consolidation, merger or sale of all or substantially all assets unless no event of default would result after giving effect to such transaction.

Future Maturities

Future long-term debt maturities and minimum operating lease payments as of December 31, 2017 are as follows:



			Years Ending December 31,										Later Years
	Total		2018		2019		2020		2021		2022		Later Years
Long-term debt, including capital lease obligations	$	15,168	$	146	$	591	$	2,667	$	1,940	$	3,577	$	6,247
Long-term non-cancelable operating leases	$	1,217	$	211	$	180	$	150	$	129	$	104	$	443

Rental expense under operating leases, including short-term leases, was $340 million, $335 million and $292 million in the years ended December 31, 2017, 2016 and 2015, respectively. Included in rental expense for each of these periods was sublease income of $14 million, $13 million and $12 million, respectively, which were recorded as a reduction to rental expense.

GUARANTEES	12 Months Ended
GUARANTEES	Dec. 31, 2017
Guarantees [Abstract]
GUARANTEES	GUARANTEES Consistent with our policy on physician relocation and recruitment, we provide income guarantee agreements to certain physicians who agree to relocate to fill a community need in the service area of one of our hospitals and commit to remain in practice in the area for a specified period of time. Under such agreements, we are required to make payments to the physicians in excess of the amounts they earn in their practices up to the amount of the income guarantee. The income guarantee periods are typically 12 months. If a physician does not fulfill his or her commitment period to the community, which is typically three years subsequent to the guarantee period, we seek recovery of the income guarantee payments from the physician on a prorated basis. We also provide revenue collection guarantees to hospital-based physician groups providing certain services at our hospitals with terms generally ranging from one to three years. At December 31, 2017, 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 $163 million. We had a total liability of $138 million recorded for these guarantees included in other current liabilities at December 31, 2017. At December 31, 2017, 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 $23 million. Of the total, $18 million relates to the obligations of consolidated subsidiaries, which obligations are recorded in the accompanying Consolidated Balance Sheet at December 31, 2017.

EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2017

Defined Benefit Plan [Abstract]

EMPLOYEE BENEFIT PLANS

Share-Based Compensation Plans

We currently grant stock-based awards to our directors and key employees pursuant to our 2008 Stock Incentive Plan, as amended. At December 31, 2017, assuming outstanding performance-based restricted stock units for which performance has not yet been determined will achieve Target performance, approximately 5.7 million shares of common stock were available under our 2008 Stock Incentive Plan for future stock option grants and other incentive awards, including restricted stock units (4.7 million shares remain available if we assume Maximum performance for outstanding performance restricted stock units for which performance has not yet been determined). Options have an exercise price equal to the fair market value of the shares on the date of grant and generally expire 10 years from the date of grant. A restricted stock unit is a contractual right to receive one share of our common stock or the equivalent value in cash in the future. Options and time-based restricted stock units typically vest one-third on each of the first three anniversary dates of the grant. In addition, we grant performance-based options and/or restricted stock units that vest subject to the achievement of specified performance goals within a specified timeframe.

Our Consolidated Statement of Operations for the years ended December 31, 2017, 2016 and 2015 includes $59 million, $60 million and $77 million, respectively, of pre-tax compensation costs related to our stock-based compensation arrangements ($37 million, $38 million and $48 million, respectively, after-tax). The table below shows certain stock option and restricted stock unit grants and other awards that comprise the stock-based compensation expense recorded in the year ended December 31, 2017. Compensation cost is measured by the fair value of the awards on their grant dates and is recognized over the requisite service period of the awards, whether or not the awards had any intrinsic value during the period.



Grant Date	Awards	Exercise Price Per Share	Fair Value Per Share at Grant Date	Stock-Based Compensation Expense for Year Ended December 31, 2017
	(In Thousands)			(In Millions)
Stock Options:
September 29, 2017	409	16.43	5.63	1
March 1, 2017	928	18.99	8.52	3
Restricted Stock Units:
May 5, 2017	145		17.83	2
March 1, 2017	430		18.99	4
June 30, 2016	130		27.64	1
March 10, 2016	541		25.50	6
February 25, 2015	1,375		45.63	20
August 25, 2014	510		59.90	5
June 13, 2013	282		47.13	2
Other grants				15
				$	59

Prior to our shareholders approving the 2008 Stock Incentive Plan, we granted stock-based awards to our directors and employees pursuant to other plans. Stock options remain outstanding under those other plans, but no additional stock-based awards will be granted under them.

Pursuant to the terms of our stock-based compensation plans, awards granted under the plans vest and may be exercised as determined by the human resources committee of our board of directors. In the event of a change in control, the human resources committee of our Board of Directors may, at its sole discretion without obtaining shareholder approval, accelerate the vesting or performance periods of the awards.

Stock Options

The following table summarizes stock option activity during the years ended December 31, 2017, 2016 and 2015:



	Options		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Life
					(In Millions)
Outstanding at December 31, 2014	1,984,149		$	24.42
Granted	—		—
Exercised	(340,869	)	29.85
Forfeited/Expired	(36,438	)	42.08
Outstanding at December 31, 2015	1,606,842		$	22.87
Granted	—		—
Exercised	(111,715	)	17.88
Forfeited/Expired	(59,206	)	18.68
Outstanding at December 31, 2016	1,435,921		$	22.87
Granted	1,396,307		18.24
Exercised	(20,400	)	4.56
Forfeited/Expired	(247,006	)	24.37
Outstanding at December 31, 2017	2,564,822		$	20.35	$	2	4.8 years
Vested and expected to vest at December 31, 2017	1,233,497		$	22.67	$	2	1.5 years
Exercisable at December 31, 2017	1,233,497		$	22.67	$	2	1.5 years

There were 20,400 stock options exercised during the year ended December 31, 2017 with an aggregated intrinsic value less than $1 million, and 111,715 stock options exercised during the same period in 2016 with an aggregate intrinsic value of approximately $1 million. There were 1,396,307 performance-based stock options granted in the year ended December 31, 2017, with no stock options granted in the year ended December 31, 2016. On March 1, 2017, we granted 987,781 stock options to certain of our senior officers. These stock options will vest on the third anniversary of the grant date, subject to achieving a closing stock price of at least $23.74 (a 25% premium above the grant date closing stock price of $18.99) for twenty consecutive trading days within three years of the grant date, and will expire on the tenth anniversary of the grant date. On September 29, 2017, we granted our executive chairman 408,526 performance-based stock options. The options vest on the first anniversary of the grant date and become exercisable only if the average closing stock price calculated over any period of thirty sequential trading days during a four year performance period equals or exceeds $20.53 (a 25% premium above the grant date closing stock price of $16.43). The options expire on the fifth anniversary of the grant date.

The weighted average estimated fair value of stock options we granted during the year ended December 31, 2017 was $7.64 per share. The fair values were calculated based on the grant dates, using a Monte Carlo simulation with the following assumptions:



	September 29,	March 1,
	2017	2017
Expected volatility	46%	49%
Expected dividend yield	0%	0%
Expected life	3.01 years	6.2 years
Expected forfeiture rate	0%	0%
Risk-free interest rate	1.92%	2.15%

The following table summarizes information about our outstanding stock options at December 31, 2017:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Options	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
$0.00 to $4.569	150,486	1.2 years	$	4.56	150,486	$	4.56
$4.57 to $19.759	1,337,059	7.8 years	18.21		5,734	18.76
$19.76 to $32.569	822,890	1.8 years	20.87		822,890	20.87
$32.57 to $42.529	254,387	0.2 years	39.31		254,387	39.31
	2,564,822	4.8 years	$	20.35	1,233,497	$	22.67

As of December 31, 2017, approximately 46.2% of all our outstanding options were held by current employees and approximately 53.8% were held by former employees. Approximately 21.8% of our outstanding options were in-the-money, that is, they had exercise price less than the $15.16 market price of our common stock on December 31, 2017, and approximately 78.2% were out-of-the-money, that is, they had an exercise price of more than $15.16 as shown in the table below:



	In-the-Money Options				Out-of-the-Money Options				All Options
	Outstanding		% of Total		Outstanding		% of Total		Outstanding		% of Total
Current employees	508,193		90.9	%	676,734		33.7	%	1,184,927		46.2	%
Former employees	50,819		9.1	%	1,329,076		66.3	%	1,379,895		53.8	%
Totals	559,012		100.0	%	2,005,810		100.0	%	2,564,822		100.0	%
% of all outstanding options	21.8	%			78.2	%			100.0	%

Restricted Stock Units

The following table summarizes restricted stock unit activity during the years ended December 31, 2017, 2016 and 2015:



	Restricted Stock Units		Weighted Average Grant Date Fair Value Per Unit
Unvested at December 31, 2014	3,299,720		$	40.99
Granted	1,718,057		45.51
Vested	(1,210,159	)	38.40
Forfeited	(180,386	)	42.46
Unvested at December 31, 2015	3,627,232		$	44.69
Granted	1,626,329		30.05
Vested	(1,644,616	)	42.95
Forfeited	(434,412	)	38.59
Unvested at December 31, 2016	3,174,533		$	38.75
Granted	714,018		18.25
Vested	(1,397,953	)	35.50
Forfeited	(236,610	)	32.13
Unvested at December 31, 2017	2,253,988		$	35.20

In the year ended December 31, 2017, we granted 714,018 restricted stock units of which 518,229 will vest and be settled ratably over a three-year period from the grant date. In addition, in May 2017, we made an annual grant of 145,179 restricted stock units to our non-employee directors for the 2017-2018 board service year, which units vested immediately and will settle in shares of our common stock on the third anniversary of the date of the grant. The Board of Directors appointed three new members, one in October 2017 and two in November 2017. We made initial grants totaling 13,772 restricted stock units to these directors, as well as prorated annual grants totaling 23,935 restricted stock units. Both the initial grants and the annual grants vested immediately, however the initial grants will not settle until the directors’ separation from the Board, while the annual grants settle on the third anniversary of the grant date. In addition, we granted 12,903 performance-based restricted stock units to certain of our senior officers; the vesting of these restricted stock units is contingent on our achievement of specified three-year performance goals for the years 2017 to 2019. Provided the goals are achieved, the performance-based restricted stock units will vest and settle on the third anniversary of the grant date. The actual number of performance-based restricted stock units that could vest will range from 0% to 200% of the 12,903 units granted, depending on our level of achievement with respect to the performance goals.

In the year ended December 31, 2016, we granted 737,493 restricted stock units subject to time-vesting, of which 504,511 will vest and be settled ratably over a three-year period from the grant date, 57,139 will vest and be settled on the third anniversary of the grant date and 175,843 will vest and be settled on the fifth anniversary of the grant date. In addition, in May 2016, we made an annual grant of 90,105 restricted stock units to our non-employee directors for the 2016-2017 board service year, which units vested immediately and will settle in shares of our common stock on the third anniversary of the date of the grant. The Board of Directors appointed four new members, two in January 2016 and two in November 2016. We made initial grant totaling 13,190 restricted stock units to these directors, as well as a prorated annual grants totaling 19,648 restricted stock units. Both the initial grants and the annual grants vested immediately, however the initial grants will not settle until the directors’ separation from the Board, while the annual grants settle on the third anniversary of the grant date. In addition, we granted 474,443 performance-based restricted stock units to certain of our senior officers; the vesting of these restricted stock units is contingent on our achievement of specified three-year performance goals for the years 2016 to 2018. Provided the goals are achieved, the performance-based restricted stock units will vest and settle on the third anniversary of the grant date. The actual number of performance-based restricted stock units that could vest will range from 0% to 200% of the 474,443 units granted, depending on our level of achievement with respect to the performance goals. Moreover, in the year ended December 31, 2016, we granted 291,540 restricted stock units as a result of our level of achievement with respect to prior-year target performance goals.

As of December 31, 2017, there were $23 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 1.9 years.

Employee Stock Purchase Plan

We have an employee stock purchase plan under which we are currently authorized to issue up to 5,062,500 shares of common stock to our eligible employees. As of December 31, 2017, there were approximately 3,457,222 shares available for issuance under our employee stock purchase plan. Under the terms of the plan, eligible employees may elect to have between 1% and 10% of their base earnings withheld each quarter to purchase shares of our common stock. Shares are purchased at a price equal to 95% of the closing price on the last day of the quarter. The plan requires a one-year holding period for all shares issued. The holding period does not apply upon termination of employment. Under the plan, no individual may purchase, in any year, shares with a fair market value in excess of $25,000. The plan is currently not considered to be compensatory.

We sold the following numbers of shares under our employee stock purchase plan in the years ended December 31, 2017, 2016 and 2015:



	Years Ended December 31,
	2017		2016		2015
Number of shares	395,957		217,184		145,290
Weighted average price	$	17.28	$	17.21	$	43.96

Employee Retirement Plans

Substantially all of our employees, upon qualification, are eligible to participate in one of our defined contribution 401(k) plans. Under the plans, employees may contribute a portion of their eligible compensation, and we match such contributions annually up to a maximum percentage for participants actively employed, as defined by the plan documents. Employer matching contributions will vary by plan. Plan expenses, primarily related to our contributions to the plans, were approximately $128 million, $116 million and $105 million for the years ended December 31, 2017, 2016 and 2015, respectively. Such amounts are reflected in salaries, wages and benefits in the accompanying Consolidated Statements of Operations.

We maintain three frozen non-qualified defined benefit pension plans (“SERPs”) that provide supplemental retirement benefits to certain of our current and former executives. One of these SERPs was frozen during the year ended December 31, 2014. These plans are not funded, and plan obligations for these plans are paid from our working capital. Pension benefits are generally based on years of service and compensation. Upon completing the acquisition of Vanguard on October 1, 2013, we assumed a frozen qualified defined benefit plan (“DMC Pension Plan”) covering substantially all of the employees of our Detroit market that were hired prior to June 1, 2003. The benefits paid under the DMC Pension Plan are primarily based on years of service and final average earnings. During the years ended December 31, 2017 and 2016, the Society of Actuaries issued new mortality improvement scales (MP-2017 and MP‑2016, respectively), which we incorporated into the estimates of our defined benefit plan obligations at December 31, 2017 and 2016. These changes to our mortality assumptions decreased our projected benefit obligations as of December 31, 2017 and 2016 by approximately $10 million and $20 million, respectively. The following tables summarize the balance sheet impact, as well as the benefit obligations, funded status and rate assumptions associated with the SERPs and the DMC Pension Plan based on actuarial valuations prepared as of December 31, 2017 and 2016:



	December 31,
	2017			2016
Reconciliation of funded status of plans and the amounts included in the Consolidated Balance Sheets:
Projected benefit obligations(1)
Beginning obligations	$	(1,475	)	$	(1,455	)
Service cost	(2		)	(2		)
Interest cost	(62		)	(69		)
Actuarial gain(loss)	(31		)	(58		)
Benefits paid	120			109
Special termination benefit costs	(5		)	—
Ending obligations	(1,455		)	(1,475		)
Fair value of plans assets
Beginning plan assets	786			815
Gain on plan assets	122			36
Employer contribution	43			25
Benefits paid	(101		)	(90		)
Ending plan assets	850			786
Funded status of plans	$	(605	)	$	(689	)
Amounts recognized in the Consolidated Balance Sheets consist of:
Other current liability	$	(69	)	$	(63	)
Other long-term liability	$	(536	)	$	(626	)
Accumulated other comprehensive loss	$	266		$	322
SERP Assumptions:
Discount rate	3.75		%	4.25		%
Compensation increase rate	3.00		%	3.00		%
Measurement date	December 31, 2017			December 31, 2016
DMC Pension Plan Assumptions:
Discount rate	4.00		%	4.42		%
Compensation increase rate	Frozen			Frozen
Measurement date	December 31, 2017			December 31, 2016


(1)	The accumulated benefit obligation at December 31, 2017 and 2016 was approximately $1.448 billion and $1.461 billion, respectively.

The components of net periodic benefit costs and related assumptions are as follows:



	Years Ended December 31,
	2017			2016			2015
Service costs	$	2		$	2		$	3
Interest costs	62			69			64
Expected return on plan assets	(50		)	(51		)	(57		)
Amortization of net actuarial loss	14			12			12
Net periodic benefit cost	$	28		$	32		$	22
SERP Assumptions:
Discount rate	4.25		%	4.75		%	4.25		%
Long-term rate of return on assets	n/a			n/a			n/a
Compensation increase rate	3.00		%	3.00		%	3.00		%
Measurement date	January 1, 2017			January 1, 2016			January 1, 2015
Census date	January 1, 2017			January 1, 2016			January 1, 2015
DMC Pension Plan Assumptions:
Discount rate	4.42		%	4.67		%	4.16		%
Long-term rate of return on assets	6.50		%	6.50		%	6.50		%
Compensation increase rate	Frozen			Frozen			Frozen
Measurement date	January 1, 2017			January 1, 2016			January 1, 2015
Census date	January 1, 2017			January 1, 2016			January 1, 2015

Net periodic benefit costs for the current year are based on assumptions determined at the valuation date of the prior year for the SERPs and the DMC Pension Plan. As a result of the adoption of ASU 2017-07 discussed in Note 1 and Note 21, we recognized service costs in salaries, wages and benefits expense, and recognized other components of net periodic benefit cost in other non-operating expense, net, in the accompanying Consolidated Statements of Operations.

We recorded gain/(loss) adjustments of $56 million, $(61) million and $15 million in other comprehensive income (loss) in the years ended December 31, 2017, 2016 and 2015, respectively, to recognize changes in the funded status of our SERPs and the DMC Pension Plan. Changes in the funded status are recorded as a direct increase or decrease to shareholders’ equity through accumulated other comprehensive loss. Net actuarial gains/(losses) of $42 million, $(73) million and $3 million during the years ended December 31, 2017, 2016 and 2015, respectively, and the amortization of net actuarial loss of $14 million, $12 million and $12 million for the years ended December 31, 2017, 2016 and 2015, respectively, were recognized in other comprehensive income (loss). Cumulative net actuarial losses of $266 million, $322 million and $261 million as of December 31, 2017, 2016 and 2015, respectively, and unrecognized prior service costs of less than $1 million as of each of the years ended December 31, 2017, 2016 and 2015, have not yet been recognized as components of net periodic benefit costs.

To develop the expected long-term rate of return on plan assets assumption, the DMC Pension Plan considers the current level of expected returns on risk-free investments (primarily government bonds), the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns on each asset class. The expected return for each asset class is then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. The weighted-average asset allocations by asset category as of December 31, 2017, were as follows:



Asset Category	Target		Actual
Cash and cash equivalents	1	%	6	%
United States government obligations	1	%	1	%
Equity securities	62	%	57	%
Debt Securities	36	%	36	%

The DMC Pension Plan assets are invested in separately managed portfolios using investment management firms. The objective for all asset categories is to maximize total return without assuming undue risk exposure. The DMC Pension Plan maintains a well-diversified asset allocation that best meets these objectives. The DMC Pension Plan assets are largely comprised of equity securities, which include companies with various market capitalization sizes in addition to international and convertible securities. Cash and cash equivalents are comprised of money market funds. Debt securities include domestic and foreign government obligations, corporate bonds, and mortgage-backed securities. Under the investment policy of the DMC Pension Plan, investments in derivative securities are not permitted for the sole purpose of speculating on the direction of market interest rates. Included in this prohibition are leveraging, shorting, swaps, futures, options, forwards, and similar strategies.

In each investment account, the DMC Pension Plan investment managers are responsible to monitor and react to economic indicators, such as gross domestic product, consumer price index and U.S. monetary policy that may affect the performance of their account. The performance of all managers and the aggregate asset allocation are formally reviewed on a quarterly basis, with a rebalancing of the asset allocation occurring at least once a year. The current asset allocation objective is to maintain a certain percentage with each class allowing for a 10% deviation from the target.

The following tables summarize the DMC Pension Plan assets measured at fair value on a recurring basis as of December 31, 2017 and 2016, aggregated by the level in the fair value hierarchy within which those measurements are determined. Fair value methodologies for Level 1, Level 2 and Level 3 are consistent with the inputs described in Note 18.



	December 31, 2017		Level 1		Level 2		Level 3
Cash and cash equivalents	$	49	$	49	$	—	$	—
United States government obligations	5		5		—		—
Fixed income funds	308		308		—		—
Equity securities	488		488		—		—
	$	850	$	850	$	—	$	—



	December 31, 2016		Level 1		Level 2		Level 3
Cash and cash equivalents	$	60	$	60	$	—	$	—
United States government obligations	5		5		—		—
Fixed income funds	335		335		—		—
Equity securities	386		386		—		—
	$	786	$	786	$	—	$	—

The following table presents the estimated future benefit payments to be made from the SERPs and the DMC Pension Plan, a portion of which will be funded from plan assets, for the next five years and in the aggregate for the five years thereafter:



			Years Ending December 31,										Five Years
	Total		2018		2019		2020		2021		2022		Thereafter
Estimated benefit payments	$	936	$	88	$	91	$	93	$	94	$	94	$	476

The SERP and DMC Pension Plan obligations of $605 million at December 31, 2017 are classified in the accompanying Consolidated Balance Sheet as an other current liability ($69 million) and defined benefit plan obligations ($536 million) based on an estimate of the expected payment patterns. We expect to make total contributions to the plans of approximately $69 million for the year ending December 31, 2018.

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

The principal components of property and equipment are shown in the table below:



	December 31,
	2017			2016
Land	$	602		$	667
Buildings and improvements	6,837			7,277
Construction in progress	109			339
Equipment	4,221			4,744
	11,769			13,027
Accumulated depreciation and amortization	(4,739		)	(4,974		)
Net property and equipment	$	7,030		$	8,053

Property and equipment is stated at cost, less accumulated depreciation and amortization and impairment write-downs related to assets held and used.

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table provides information on changes in the carrying amount of goodwill, which is included in the accompanying Consolidated Balance Sheets as of 2017 and 2016:



	2017			2016
Hospital Operations and other
As of January 1:
Goodwill	$	5,803		$	5,552
Accumulated impairment losses	(2,430		)	(2,430		)
Total	3,373			3,122
Goodwill acquired during the year and purchase price allocation adjustments	5			251
Goodwill allocated to assets held for sale	(402		)	—
Total	$	2,976		$	3,373
As of December 31:
Goodwill	$	5,406		$	5,803
Accumulated impairment losses	(2,430		)	(2,430		)
Total	$	2,976		$	3,373



	2017			2016
Ambulatory Care
As of January 1:
Goodwill	$	3,447		$	3,243
Accumulated impairment losses	—			—
Total	3,447			3,243
Goodwill acquired during the year and purchase price allocation adjustments	86			236
Goodwill allocated to assets held for sale	(103		)	—
Impact of foreign currency translation	7			(32		)
Total	$	3,437		$	3,447
As of December 31:
Goodwill	$	3,437		$	3,447
Accumulated impairment losses	—			—
Total	$	3,437		$	3,447



	2017		2016
Conifer
As of January 1:
Goodwill	$	605	$	605
Accumulated impairment losses	—		—
Total	605		605
Goodwill acquired during the year and purchase price allocation adjustments	—		—
Total	$	605	$	605
As of December 31:
Goodwill	$	605	$	605
Accumulated impairment losses	—		—
Total	$	605	$	605

The following table provides information regarding other intangible assets, which are included in the accompanying Consolidated Balance Sheets as of 2017 and 2016:



	Gross Carrying Amount		Accumulated Amortization			Net Book Value
At December 31, 2017:
Capitalized software costs	$	1,582	$	(754	)	$	828
Trade names	102		—			102
Contracts	859		(60		)	799
Other	106		(69		)	37
Total	$	2,649	$	(883	)	$	1,766
At December 31, 2016:
Capitalized software costs	$	1,562	$	(676	)	$	886
Trade Names	106		—			106
Contracts	845		(43		)	802
Other	104		(53		)	51
Total	$	2,617	$	(772	)	$	1,845

Estimated future amortization of intangibles with finite useful lives as of December 31, 2017 is as follows:



	Total		Years Ending December 31,										Later Years
	Total		2018		2019		2020		2021		2022		Later Years
Amortization of intangible assets	$	1,101	$	154	$	137	$	111	$	96	$	85	$	518

We recognized amortization expense of $172 million, $152 million and $144 million in the accompanying Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

INVESTMENTS AND OTHER ASSETS

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS AND OTHER ASSETS

The principal components of investments and other assets in the accompanying Consolidated Balance Sheets are as follows:



	December 31,
	2017		2016
Marketable debt securities	$	56	$	49
Equity investments in unconsolidated healthcare entities	958		935
Total investments	1,014		984
Cash surrender value of life insurance policies	32		28
Long-term deposits	37		34
California provider fee program receivables	266		—
Land held for expansion, other long-term receivables and other assets	194		204
Investments and other assets	$	1,543	$	1,250

Our policy is to classify investments that may be needed for cash requirements as “available-for-sale.” In doing so, the carrying values of the shares and debt instruments are adjusted at the end of each accounting period to their market values through a credit or charge to other comprehensive income (loss), net of taxes.

ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2017

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

Our accumulated other comprehensive loss is comprised of the following:



	December 31,
	2017			2016
Adjustments for defined benefit plans	$	(170	)	$	(205	)
Foreign currency translation adjustments	(38		)	(53		)
Unrealized gains on investments	$	4		$	—
Accumulated other comprehensive loss	$	(204	)	$	(258	)

The tax expense allocated to the adjustments for our defined benefit plans, foreign currency translation adjustments and unrealized gains on investments were approximately $15 million, $5 million and $3 million, respectively, for the year ended December 31, 2017, and $18 million of tax benefit was allocated to the adjustments for our defined benefit plans for the year ended December 31, 2016.

PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE	12 Months Ended
	Dec. 31, 2017
Property and Professional and General Liablity Insurance [Abstract]
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE	PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE Property Insurance We have property, business interruption and related insurance coverage to mitigate the financial impact of catastrophic events or perils that is subject to deductible provisions based on the terms of the policies. These policies are on an occurrence basis. For the policy period April 1, 2017 through March 31, 2018, we have coverage totaling $850 million per occurrence, after deductibles and exclusions, with annual aggregate sub-limits of $100 million for floods, $200 million for earthquakes and a per-occurrence sub-limit of $200 million for named windstorms with no annual aggregate. With respect to fires and other perils, excluding floods, earthquakes and named windstorms, the total $850 million limit of coverage per occurrence applies. Deductibles are 5% of insured values up to a maximum of $25 million for California earthquakes, floods and wind-related claims, and 2% of insured values for New Madrid fault earthquakes, with a maximum per claim deductible of $25 million. Floods and certain other covered losses, including fires and other perils, have a minimum deductible of $1 million. Professional and General Liability Reserves At December 31, 2017 and 2016, the aggregate current and long-term professional and general liability reserves in the accompanying Consolidated Balance Sheets were approximately $854 million and $794 million, respectively. These reserves include the reserves recorded by our captive insurance subsidiaries and our self-insured retention reserves recorded based on modeled estimates for the portion of our professional and general liability risks, including incurred but not reported claims, for which we do not have insurance coverage. We estimated the reserves for losses and related expenses using expected loss-reporting patterns discounted to their present value under a risk-free rate approach using a Federal Reserve seven-year maturity rate of 2.33%, 2.25% and 2.09% at December 31, 2017, 2016 and 2015, respectively. If the aggregate limit of any of our professional and general liability policies is exhausted, in whole or in part, it could deplete or reduce the limits available to pay any other material claims applicable to that policy period. Included in other operating expenses, net, in the accompanying Consolidated Statements of Operations is malpractice expense of $303 million, $281 million and $283 million for the years ended December 31, 2017, 2016 and 2015, respectively.

CLAIMS AND LAWSUITS

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

CLAIMS AND LAWSUITS

We operate in a highly regulated and litigious industry. Healthcare companies are subject to numerous investigations by various governmental agencies. Further, private parties have the right to bring qui tam or “whistleblower” lawsuits against companies that allegedly submit false claims for payments to, or improperly retain overpayments from, the government and, in some states, private payers. We and our subsidiaries have received inquiries in recent years from government agencies, and we may receive similar inquiries in future periods. We are also subject to class action lawsuits, employment-related claims and other legal actions in the ordinary course of business. Some of these actions may involve large demands, as well as substantial defense costs. We cannot predict the outcome of current or future legal actions against us or the effect that judgments or settlements in such matters may have on us.

We are also subject to a non-prosecution agreement, as described in Item 1, Business – Compliance and Ethics, of Part I of this report. If we fail to comply with this agreement, we could be subject to criminal prosecution, substantial penalties and exclusion from participation in federal healthcare programs, any of which could adversely impact our business, financial condition, results of operations or cash flows.

We record accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and we can reasonably estimate the amount of the loss or a range of loss. Significant judgment is required in both the determination of the probability of a loss and the determination as to whether a loss is reasonably estimable. These determinations are updated at least quarterly and are adjusted to reflect the effects of negotiations, settlements, rulings, advice of legal counsel and technical experts, and other information and events pertaining to a particular matter. If a loss on a material matter is reasonably possible and estimable, we disclose an estimate of the loss or a range of loss. In cases where we have not disclosed an estimate, we have concluded that the loss is either not reasonably possible or the loss, or a range of loss, is not reasonably estimable, based on available information.

Securities Litigation

On December 20, 2017, the U.S. District Court for the Northern District of Texas granted the Company’s motion to dismiss the matter captioned In re Tenet Healthcare Corporation Securities Litigation and denied the plaintiffs’ request to amend the lawsuit. Because the plaintiffs did not appeal the court’s decision, the dismissal is final. The four court-appointed lead plaintiffs filed a consolidated amended class action complaint in April 2017 asserting violations of the federal securities laws against the Company and several current and former executive officers. The plaintiffs were seeking class certification on behalf of all persons who acquired the Company’s common stock between February 28, 2012 and August 1, 2016. The complaint alleged that false or misleading statements or omissions concerning the Company’s financial performance and compliance policies, specifically with respect to the previously disclosed civil qui tam litigation and parallel criminal investigation of the Company and certain of its subsidiaries (together, the “Clinica de la Mama matters”), caused the price of the Company’s common stock to be artificially inflated. In addition, the plaintiffs claimed that the defendants violated GAAP by failing to disclose an estimate of the possible loss or a range of loss related to the Clinica de la Mama matters.

Shareholder Derivative Litigation

In January 2017, the Dallas County District Court consolidated two previously disclosed shareholder derivative lawsuits filed by purported shareholders of the Company’s common stock on behalf of the Company against current and former officers and directors into a single matter captioned In re Tenet Healthcare Corporation Shareholder Derivative Litigation. The plaintiffs filed a consolidated shareholder derivative petition in February 2017. A separate shareholder derivative lawsuit, captioned Horwitz, derivatively on behalf of Tenet Healthcare Corporation, was filed in January 2017 in the U.S. District Court for the Northern District of Texas; however, on January 19, 2018, the plaintiff in the Horwitz matter voluntarily dismissed his case. The consolidated shareholder derivative petition generally tracks the allegations in the securities class action complaint described above and claims that the plaintiffs did not make a demand on the Board of Directors to bring the lawsuit because such a demand would have been futile. The pending shareholder derivative matter was stayed in the second quarter of 2017 pending the final resolution of the motion to dismiss in the consolidated securities litigation. The Company intends to vigorously defend against the allegations in the remaining purported shareholder derivative lawsuit.

Antitrust Class Action Lawsuit Filed by Registered Nurses in San Antonio

In Maderazo, et al. v. VHS San Antonio Partners, L.P. d/b/a Baptist Health Systems, et al., filed in June 2006 in the U.S. District Court for the Western District of Texas, a purported class of registered nurses employed by three unaffiliated San Antonio-area hospital systems allege those hospital systems, including our Baptist Health System, and other unidentified San Antonio regional hospitals violated Section §1 of the federal Sherman Act by conspiring to depress nurses’ compensation and exchanging compensation-related information among themselves in a manner that reduced competition and suppressed the wages paid to such nurses. The suit seeks unspecified damages (subject to trebling under federal law), interest, costs and attorneys’ fees. The case was stayed from 2008 through mid-2015. At this time, we are awaiting the court’s ruling on class certification and will continue to vigorously defend ourselves against the plaintiffs’ allegations. It remains impossible at this time to predict the outcome of these proceedings with any certainty; however, we believe that the ultimate resolution of this matter will not have a material effect on our business, financial condition or results of operations.

Ordinary Course Matters

We are also subject to other claims and lawsuits arising in the ordinary course of business, including potential claims related to, among other things, the care and treatment provided at our hospitals and outpatient facilities, the application of various federal and state labor laws, tax audits and other matters. Although the results of these claims and lawsuits cannot be predicted with certainty, we believe that the ultimate resolution of these ordinary course claims and lawsuits will not have a material effect on our business or financial condition.

New claims or inquiries may be initiated against us from time to time. These matters could (1) require us to pay substantial damages or amounts in judgments or settlements, which, individually or in the aggregate, could exceed amounts, if any, that may be recovered under our insurance policies where coverage applies and is available, (2) cause us to incur substantial expenses, (3) require significant time and attention from our management, and (4) cause us to close or sell hospitals or otherwise modify the way we conduct business.

The following table presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded during the years ended December 31, 2017, 2016 and 2015:



	Balances at Beginning of Period		Litigation and Investigation Costs			Cash Payments			Other		Balances at End of Period
Year Ended December 31, 2017
Continuing operations	$	12	$	23		$	(23	)	$	—	$	12
Discontinued operations	—		—			—			—		—
	$	12	$	23		$	(23	)	$	—	$	12
Year Ended December 31, 2016
Continuing operations	$	299	$	293		$	(582	)	$	2	$	12
Discontinued operations	—		—			—			—		—
	$	299	$	293		$	(582	)	$	2	$	12
Year Ended December 31, 2015
Continuing operations	$	73	$	291		$	(72	)	$	7	$	299
Discontinued operations	10		(8		)	(2		)	—		—
	$	83	$	283		$	(74	)	$	7	$	299

For the years ended December 31, 2017, 2016 and 2015, we recorded net costs of $23 million, $293 million and $283 million, respectively, in connection with significant legal proceedings and governmental reviews. Of these amounts, $278 million and $219 million for the years ended December 31, 2016 and 2015, respectively, were attributable to accruals for the Clinica de la Mama matters.

REDEEMABLE NONCONTROLLING INTEREST IN EQUITY OF CONSOLIDATED SUBSIDIARIES

12 Months Ended

Dec. 31, 2017

Noncontrolling Interest [Abstract]

REDEEMABLE NONCONTROLLING INTEREST IN EQUITY OF CONSOLIDATED SUBSIDIARIES

In June 2015, we formed a new joint venture by combining our freestanding ambulatory surgery and imaging center assets with the surgical facility assets of USPI. As a result of this transaction, we recorded approximately $1.477 billion of redeemable noncontrolling interests. In connection with the formation of the USPI joint venture, we entered into a stockholders agreement pursuant to which we and our joint venture partners agreed to certain rights and obligations with respect to the governance of the joint venture.

As part of the USPI transaction, we entered into a put/call agreement (the “Put/Call Agreement”) with respect to the equity interests in the joint venture held by our joint venture partners. In January 2016, Welsh, Carson, Anderson & Stowe (“Welsh Carson”), on behalf of our joint venture partners, delivered a put notice for the minimum number of shares they were required to put to us in 2016 according to the Put/Call Agreement. In April 2016, we paid approximately $127 million to purchase those shares, which increased our ownership interest in the USPI joint venture to approximately 56.3%. On May 1, 2017, we amended and restated the Put/Call Agreement to provide for, among other things, the acceleration of our acquisition of certain shares of our USPI joint venture. Under the terms of the amendment, we agreed to pay Welsh Carson, on or before July 3, 2017, approximately $711 million to buy 23.7% of our USPI joint venture, which amount is subject to adjustment for actual 2017 financial results in accordance with the terms of the Put/Call Agreement. On July 3, 2017, we paid approximately $716 million for the purchase of these shares, which increased our ownership interest in the USPI joint venture to 80.0%, as well as the final adjustment to the 2016 purchase price.

The amended and restated Put/Call Agreement also provides that the remaining 15% ownership interest in our USPI joint venture held by our Welsh Carson joint venture partners is subject to put options in equal shares in each of 2018 and 2019. In January 2018, Welsh Carson, on behalf of our joint venture partners, delivered a put notice for the number of shares that represent a 7.5% ownership interest in our USPI joint venture in accordance with the amended and restated Put/Call Agreement. The parties are in discussions regarding the calculation of the estimated purchase price relating to the exercise of the 2018 put option, which price is based on an agreed-upon estimate of 2018 financial results and is subject to a true-up following the finalization of actual 2018 financial results. We expect that the estimated payment to repurchase these shares will be between $285 million and $295 million, prior to any true-up payments related to actual financial results in 2017 or 2018. In the event our Welsh Carson joint venture partners do not exercise their 2019 put option, we will have the option, but not the obligation, to buy the remaining 7.5% of our USPI joint venture from them in 2019. In connection with the aforementioned put and call options, we have the ability to choose whether to settle the purchase price in cash or shares of our common stock.

In addition, we entered into a separate put call agreement (the “Baylor Put/Call Agreement”) with Baylor University Medical Center (“Baylor”) that contains put and call options with respect to the 5% ownership interest in the USPI joint venture held by Baylor. Each year starting in 2021, Baylor may put up to one-third of their total shares in the USPI joint venture held as of January 1, 2017. In each year that Baylor does not put the full 33.3% of the USPI joint venture’s shares allowable, we may call the difference between the number of shares Baylor put and the maximum number of shares they could have put that year. In addition, the Baylor Put/Call Agreement contains a call option pursuant to which we have the ability to acquire all of Baylor’s ownership interest by 2024. We have the ability to choose whether to settle the purchase price for the Baylor put/call in cash or shares of our common stock.

Based on the nature of these put/call structures, the minority shareholders’ interests in the USPI joint venture is classified as redeemable noncontrolling interests in the accompanying Consolidated Balance Sheets at December 31, 2017 and 2016.

The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the years ended 2017 and 2016:



	December 31,
	2017			2016
Balances at beginning of period	$	2,393		$	2,266
Net income	239			230
Distributions paid to noncontrolling interests	(128		)	(105		)
Purchase accounting adjustments	—			(47		)
Accretion of redeemable noncontrolling interests	33			—
Purchases and sales of businesses and noncontrolling interests, net	(671		)	49
Balances at end of period	$	1,866		$	2,393

Our redeemable noncontrolling interests balances at December 31, 2017 and 2016 in the table above were comprised of $519 million and $520 million, respectively, from our Hospital Operations and other segment, $1.137 billion and $1.715 billion, respectively, from our Ambulatory Care segment, and $210 million and $158 million, respectively, from our Conifer segment. Our net income attributable to redeemable noncontrolling interests for the years ended December 31, 2017 and 2016 respectively, on our Consolidated Statements of Operations were comprised of $18 million and $20 million, respectively, from our Hospital Operations and other segment, $170 million and $158 million, respectively, from our Ambulatory Care segment, and $51 million and $52 million, respectively, from our Conifer segment.

INCOME TAXES

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

The provision for income taxes for continuing operations for the years ended December 31, 2017, 2016 and 2015 consists of the following:



	Years Ended December 31,
	2017			2016		2015
Current tax expense (benefit):
Federal	$	(4	)	$	12	$	(2	)
State	23			14		28
	19			26		26
Deferred tax expense (benefit):
Federal	202			34		24
State	(2		)	7		18
	200			41		42
	$	219		$	67	$	68

A reconciliation between the amount of reported income tax expense (benefit) and the amount computed by multiplying income (loss) from continuing operations before income taxes by the statutory federal income tax rate is shown below. State income tax expense for the year ended December 31, 2017 includes $28 million of expense related to the write off of expired or worthless unutilized state net operating loss carryforwards and other deferred tax assets for which a full valuation allowance had been provided in prior years. A corresponding tax benefit of $28 million is included for the year ended December 31, 2017 to reflect the reduction in the valuation allowance. Foreign pre-tax loss for the years ended December 31, 2017 and 2016 was $70 million and $16 million, respectively.



	Years Ended December 31,
	2017			2016			2015
Tax expense (benefit) at statutory federal rate of 35%	$	(35	)	$	87		$	50
State income taxes, net of federal income tax benefit	4			16			18
Expired state net operating losses, net of federal income tax benefit	28			35			11
Tax attributable to noncontrolling interests	(113		)	(106		)	(59		)
Nondeductible goodwill	109			29			22
Nontaxable gains	—			(11		)	(11		)
Nondeductible litigation costs	—			37			44
Nondeductible acquisition costs	1			1			4
Nondeductible health insurance provider fee	—			2			2
Impact of decrease in federal tax rate on deferred taxes	246			—			—
Reversal of permanent reinvestment assumption for foreign subsidiary	(30		)	—			—
Stock based compensation tax deficiencies	15			—			—
Changes in valuation allowance (including impact of decrease in federal tax rate)	—			(25		)	4
Change in tax contingency reserves, including interest	(6		)	(9		)	7
Amendment of prior-year tax returns	—			—			(17		)
Prior-year provision to return adjustments and other changes in deferred taxes	4			12			(12		)
Other items	(4		)	(1		)	5
	$	219		$	67		$	68

On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits and deductions for individuals and businesses. For businesses, the Tax Act makes broad and complex changes to the U.S. tax code, including but not limited to, (1) reducing the corporate federal tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018, (2) repealing the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits may be realized, (3) creating a new limitation on the deductibility of interest expense, (4) allowing full expensing of certain capital expenditures, and (5) denying deductions for performance based compensation paid to certain key executives. International provisions in the Tax Act are not expected to have a material impact on the Company’s taxes.

As a result of the reduction in the corporate income tax rate from 35% to 21% under the Tax Act, we revalued our net deferred tax assets at December 31, 2017, resulting in a reduction in the value of our net deferred tax assets by approximately $252 million. The reduction was recorded as additional income tax expense in the accompanying Consolidated Statement of Operations for the year ended December 31, 2017. Approximately $6 million of the total $252 million increase in income tax expense is included in the net change in valuation allowance, with the remaining $246 million shown in the table above.

The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

While we are able to make a reasonable estimate of the impact of the reduction in the corporate tax rate, the revaluation of our net deferred tax assets is subject to further revision based on our actual 2017 federal and state income tax filings. In addition, our valuation allowance analysis is affected by various aspects of the Tax Act, including the new limitation on the deductibility of interest expense. As a result, the actual impact on the net deferred tax assets may vary from the provisional estimate due to changes in our estimates of 2017 taxable income and due to revisions in our estimates of the impact of the limitation on the deductibility of interest expense.

Deferred income taxes reflect the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The following table discloses those significant components of our deferred tax assets and liabilities, including any valuation allowance:



	December 31, 2017					December 31, 2016
	Assets			Liabilities		Assets			Liabilities
Depreciation and fixed-asset differences	$	—		$	411	$	—		$	683
Reserves related to discontinued operations and restructuring charges	15			—		13			—
Receivables (doubtful accounts and adjustments)	134			—		231			—
Deferred gain on debt exchanges	—			6		—			21
Accruals for retained insurance risks	225			—		351			—
Intangible assets	—			330		—			548
Other long-term liabilities	97			—		141			—
Benefit plans	268			—		457			—
Other accrued liabilities	42			—		60			—
Investments and other assets	—			79		—			130
Net operating loss carryforwards	399			—		653			—
Stock-based compensation	27			—		45			—
Other items	142			32		118			23
	1,349			858		2,069			1,405
Valuation allowance	(72		)	—		(72		)	—
	$	1,277		$	858	$	1,997		$	1,405

Below is a reconciliation of the deferred tax assets and liabilities and the corresponding amounts reported in the accompanying Consolidated Balance Sheets.



	December 31,
	2017			2016
Deferred income tax assets	$	455		$	871
Deferred tax liabilities	(36		)	(279		)
Net deferred tax asset	$	419		$	592

During the year ended December 31, 2017, we had no net change in the valuation allowance, but there was a decrease of $28 million due to the expiration or worthlessness of unutilized state net operating loss carryovers, an increase of $6 million due to the decrease in the federal tax rate, and an increase of $22 million due to changes in expected realizability of deferred tax assets. The remaining balance in the valuation allowance at December 31, 2017 was $72 million. During the year ended December 31, 2016, the valuation allowance decreased by $24 million primarily due to the expiration or worthlessness of unutilized state net operating loss carryovers. The balance in the valuation allowance as of December 31, 2016 was $72 million. During the year ended December 31, 2015, the valuation allowance increased by $9 million, $5 million due to the acquisition of USPI and $4 million due to changes in expected realizability of deferred tax assets.

We account for uncertain tax positions in accordance with ASC 740-10-25, which prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The table below summarizes the total changes in unrecognized tax benefits during the year ended December 31, 2017. The additions and reductions for tax positions include the impact of items for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductions. Such amounts include unrecognized tax benefits that have impacted deferred tax assets and liabilities at December 31, 2017, 2016 and 2015.



	Continuing Operations			Discontinued Operations				Total
Balance At December 31, 2014	$	38		$	—			$	38
Additions for prior-year tax positions	1			—				1
Additions for current-year tax positions	5			—				5
Reductions due to a lapse of statute of limitations	(4		)	—				(4		)
Balance At December 31, 2015	$	40		$	—	$	—	$	40
Additions for prior-year tax positions	2			—				2
Additions for current-year tax positions	—			—				—
Reductions due to a lapse of statute of limitations	(7		)	—				(7		)
Balance At December 31, 2016	$	35		$	—			$	35
Additions for prior-year tax positions	31			—				31
Reductions for tax positions of prior years	(15		)	—				(15		)
Additions for current-year tax positions	—			—				—
Reductions due to a lapse of statute of limitations	(5		)	—				(5		)
Balance At December 31, 2017	$	46		$	—			$	46

The total amount of unrecognized tax benefits as of December 31, 2017 was $46 million, of which $44 million, if recognized, would affect our effective tax rate and income tax expense (benefit) from continuing operations. Income tax expense in the year ended December 31, 2017 includes a benefit of $5 million in continuing operations attributable to a decrease in our estimated liabilities for uncertain tax positions, net of related deferred tax effects. The total amount of unrecognized tax benefits as of December 31, 2016 was $35 million, of which $32 million, if recognized, would affect our effective tax rate and income tax expense (benefit) from continuing operations. Income tax expense in the year ended December 31, 2016 includes a benefit of $9 million in continuing operations attributable to a decrease in our estimated liabilities for uncertain tax positions, net of related deferred tax effects. The total amount of unrecognized tax benefits as of December 31, 2015 was $40 million, of which $37 million, if recognized, would affect our effective tax rate and income tax expense (benefit) from continuing operations. Income tax expense in the year ended December 31, 2015 includes expense of $2 million in continuing operations attributable to an increase in our estimated liabilities for uncertain tax positions, net of related deferred tax effects.

Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense in our consolidated statements of operations. Approximately $1 million of interest and penalties related to accrued liabilities for uncertain tax positions related to continuing operations are included in the accompanying Consolidated Statement of Operations for the year ended December 31, 2017. Total accrued interest and penalties on unrecognized tax benefits as of December 31, 2017 were $3 million, all of which related to continuing operations.

The Internal Revenue Service (“IRS”) has completed audits of our tax returns for all tax years ended on or before December 31, 2007, and of Vanguard’s tax returns for fiscal years ended on or before October 1, 2013. All disputed issues with respect to these audits have been resolved and all related tax assessments (including interest) have been paid. Our tax returns for years ended after December 31, 2007 and USPI’s tax returns for years ended after December 31, 2013 remain subject to audit by the IRS.

As of December 31, 2017, approximately $1 million of unrecognized federal and state tax benefits, as well as reserves for interest and penalties, may decrease in the next 12 months as a result of the settlement of audits, the filing of amended tax returns or the expiration of statutes of limitations.

At December 31, 2017, our carryforwards available to offset future taxable income consisted of (1) federal net operating loss (“NOL”) carryforwards of approximately $1.6 billion pre-tax expiring in 2025 to 2034, (2) general business credit carryforwards of approximately $29 million expiring in 2023 through 2037, and (3) state NOL carryforwards of approximately $3.0 billion expiring in 2018 through 2037 for which the associated deferred tax benefit, net of valuation allowance and federal tax impact, is $12 million. Our ability to utilize NOL carryforwards to reduce future taxable income may be limited under Section 382 of the Internal Revenue Code if certain ownership changes in our company occur during a rolling three-year period. These ownership changes include purchases of common stock under share repurchase programs (see Note 2), the offering of stock by us, the purchase or sale of our stock by 5% shareholders, as defined in the Treasury regulations, or the issuance or exercise of rights to acquire our stock. If such ownership changes by 5% shareholders result in aggregate increases that exceed 50 percentage points during the three-year period, then Section 382 imposes an annual limitation on the amount of our taxable income that may be offset by the NOL carryforwards or tax credit carryforwards at the time of ownership change. On August 31, 2017, we entered into a rights agreement as a measure intended to deter the above-referenced ownership changes in order to preserve our NOL carryforwards (see Note 2).

EARNINGS (LOSS) PER COMMON SHARE

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER COMMON SHARE

The following table is a reconciliation of the numerators and denominators of our basic and diluted earnings (loss) per common share calculations for our continuing operations for the years ended December 31, 2017, 2016 and 2015. Net loss attributable is expressed in millions and weighted average shares are expressed in thousands.



	Net Loss Attributable to Common Shareholders (Numerator)			Weighted Average Shares (Denominator)		Per-Share Amount
Year Ended December 31, 2017
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share	$	(704	)	100,592		$	(7.00	)
Effect of dilutive stock options, restricted stock units and deferred compensation units	—			—		—
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share	$	(704	)	$	100,592	$	(7.00	)
Year Ended December 31, 2016
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share	$	(187	)	99,321		$	(1.88	)
Effect of dilutive stock options, restricted stock units and deferred compensation units	—			—		—
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share	$	(187	)	$	99,321	$	(1.88	)
Year Ended December 31, 2015
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share	$	(142	)	99,167		$	(1.43	)
Effect of dilutive stock options, restricted stock units and deferred compensation units	—			—		—
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share	$	(142	)	$	99,167	$	(1.43	)

All potentially dilutive securities were excluded from the calculation of diluted earnings (loss) per share for the years ended December 31, 2017, 2016 and 2015 because we did not report income from continuing operations available to common shareholders in those periods. In circumstances where we do not have income from continuing operations available to common shareholders, the effect of stock options and other potentially dilutive securities is anti-dilutive, that is, a loss from continuing operations attributable to common shareholders has the effect of making the diluted loss per share less than the basic loss per share. Had we generated income from continuing operations available to common shareholders in the years ended December 31, 2017, 2016 and 2015, the effect (in thousands) of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase in shares of 788, 1,421 and 2,380 for the years ended December 31, 2017, 2016 and 2015, respectively.

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Our financial assets and liabilities recorded at fair value on a recurring basis primarily relate to investments in available-for-sale securities held by our captive insurance subsidiaries. The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2017 and 2016. The following tables also indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. We consider a security that trades at least weekly to have an active market. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices for similar assets, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.



Investments	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable debt securities — noncurrent	$	56	$	42	$	14	$	—
	$	56	$	42	$	14	$	—



Investments	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable debt securities — noncurrent	$	49	$	23	$	26	$	—
	$	49	$	23	$	26	$	—

Our non-financial assets and liabilities not permitted or required to be measured at fair value on a recurring basis typically relate to long-lived assets held and used, long-lived assets held for sale and goodwill. We are required to provide additional disclosures about fair value measurements as part of our financial statements for each major category of assets and liabilities measured at fair value on a non-recurring basis. The following table presents this information and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows.



	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-lived assets held for sale	$	456	$	—	$	456	$	—
Long-lived assets held and used	$	—	$	—	$	—	$	—
Other than temporarily impaired equity method investments	$	113	$	—	$	113	$	—



	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-lived assets held and used	163		$	—	$	163	$	—
Other than temporarily impaired equity method investments	$	27	$	—	$	27	$	—

As described in Note 5, in the year ended December 31, 2017, we recorded impairment charges in continuing operations of $364 million to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for our Aspen, Philadelphia-area and certain of our Chicago-area facilities, as well as $31 million of impairment charges related to investments and $7 million related to other intangible assets, primarily contract-related intangibles and capitalized software costs not associated with the hospitals described above. In the year ended December 31, 2016, we recorded $54 million for the write-down of buildings, equipment and other long-lived assets of four hospitals to their estimated fair values, $19 million of impairment charges related to investments and $14 million related to other intangible assets, primarily contract-related intangibles and capitalized software costs not associated with the hospitals described above.

The fair value of our long-term debt (except for borrowings under the Credit Agreement) is based on quoted market prices (Level 1). The inputs used to establish the fair value of the borrowings outstanding under the Credit Agreement are considered to be Level 2 inputs, which include inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly. At December 31, 2017 and 2016, the estimated fair value of our long-term debt was approximately 100.2% and 93.9%, respectively, of the carrying value of the debt.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

ACQUISITIONS

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

ACQUISITIONS

During the year ended December 31, 2017, we acquired eight outpatient businesses (all of which are owned by our USPI joint venture) and various physician practices. The fair value of the consideration conveyed in the acquisitions (the “purchase price”) was $50 million.

During the year ended December 31, 2016, we completed a transaction that allowed us to consolidate five microhospitals that were previously recorded as equity method investments. We also acquired majority interests in 28 ambulatory surgery centers (all of which are owned by our USPI joint venture) and various physician practices. The fair value of the consideration conveyed in the acquisitions (the “purchase price”) was $117 million.

During the year ended December 31, 2015, we completed the transaction that combined our freestanding ambulatory surgery and imaging center assets with USPI’s surgical facility assets into a new joint venture. We also completed the acquisition of Aspen, a network of nine private hospitals and clinics in the United Kingdom. In addition, we began operating Hi-Desert Medical Center, which is a 59-bed acute care hospital in Joshua Tree, California, and its related healthcare facilities, including a 120-bed skilled nursing facility, an ambulatory surgery center and an imaging center, under a long-term lease agreement. Furthermore, we formed a new joint venture with Dignity Health and Ascension Health to own and operate Carondelet Health Network, which is comprised of three hospitals with over 900 licensed beds, related physician practices, ambulatory surgery, imaging and urgent care centers, and other affiliated businesses, in Tucson and Nogales, Arizona. We also formed a new joint venture with Baptist Health Systems, Inc. to own and operate a healthcare network serving Birmingham and central Alabama. We have a 60% ownership in the joint venture and manage the network’s operations. The network has more than 1,700 licensed beds, nine outpatient centers, 68 physician clinics delivering primary and specialty care, and more than 7,000 employees and approximately 1,500 affiliated physicians. Additionally, we acquired majority interests in nine ambulatory surgery centers and purchased 35 urgent care centers (all of which are owned by our USPI joint venture), and various physician practice entities. The fair value of the consideration conveyed in the acquisitions (the “purchase price”) was $940 million.

We are required to allocate the purchase prices of acquired businesses to assets acquired or liabilities assumed and, if applicable, noncontrolling interests based on their fair values. The excess of the purchase price allocated over those fair values is recorded as goodwill. The purchase price allocations for certain acquisitions completed in 2017 is preliminary. We are in process of finalizing the purchase price allocations, including valuations of the acquired property and equipment, other intangible assets and noncontrolling interests for some of our 2017 acquisitions; therefore, those purchase price allocations are subject to adjustment once the valuations are completed. During the year ended December 31, 2016, we made adjustments to the purchase price allocations for businesses acquired in 2015 that increased goodwill by approximately $59 million and increased depreciation and amortization expense by approximately $7 million for our Hospital Operations and other segment. During the year ended December 31, 2016, we made adjustments to the purchase price allocations for businesses acquired in 2015 that decreased goodwill by approximately $36 million for our Ambulatory Care segment.

Preliminary or final purchase price allocations for all the acquisitions made during the years ended December 31, 2017, 2016 and 2015 are as follows:



	2017			2016			2015
Current assets	$	7		$	51		$	457
Property and equipment	9			38			1,059
Other intangible assets	8			7			361
Goodwill	91			464			3,374
Other long-term assets	(3		)	(56		)	557
Current liabilities	(8		)	(30		)	(443		)
Deferred taxes — long term	—			—			(128		)
Other long-term liabilities	(2		)	(15		)	(2,146		)
Redeemable noncontrolling interests in equity of consolidated subsidiaries	(29		)	(190		)	(1,974		)
Noncontrolling interests	(18		)	(119		)	(147		)
Cash paid, net of cash acquired	(50		)	(117		)	(940		)
Gains on consolidations	$	5		$	33		$	30

The goodwill generated from these transactions, the majority of which will be deductible for income tax purposes, can be attributed to the benefits that we expect to realize from operating efficiencies and growth strategies. Of the total $91 million of goodwill recorded for acquisitions completed during the year ended December 31, 2017, $5 million was recorded in our Hospital Operations and other segment, and $86 million was recorded in our Ambulatory Care segment. Approximately $6 million, $20 million and $45 million in transaction costs related to prospective and closed acquisitions were expensed during the years ended December 31, 2017, 2016 and 2015, respectively, and are included in impairment and restructuring charges, and acquisition-related costs in the accompanying Consolidated Statements of Operations.

During the years ended December 31, 2017, 2016 and 2015 we recognized gains totaling $5 million, $33 million and $30 million associated with stepping up our ownership interests in previously held equity investments, which we began consolidating after we acquired controlling interests.

Pro Forma Information – Unaudited

Effective June 16, 2015, we combined our freestanding ambulatory surgery and imaging center assets with the surgical facility assets of United Surgical Partners International, Inc. (“USPI”) into the USPI joint venture. We refinanced approximately $1.5 billion of existing USPI debt, which was allocated to the joint venture through an intercompany loan, and paid approximately $424 million to align the respective valuations of the assets contributed to the joint venture. We also completed the Aspen acquisition for approximately $226 million.

The following table provides 2017 and 2016 actual results compared to 2015 pro forma information for Tenet as if the USPI joint venture and Aspen acquisition had occurred at the beginning of the year ended December 31, 2015. The net income of USPI for the December 31, 2015 was adjusted by $30 million to remove a nonrecurring loss on extinguishment of debt.



	Years Ended December 31,
	2017			2016			2015
Net operating revenues	$	19,179		$	19,621		$	19,018
Equity in earnings of unconsolidated affiliates	$	144		$	131		$	143
Net loss attributable to common shareholders	$	(704	)	$	(192	)	$	(171	)
Loss per share attributable to common shareholders	$	(7.00	)	$	(1.93	)	$	(1.73	)

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

SEGMENT INFORMATION

Our business consists of our Hospital Operations and other segment, our Ambulatory Care segment and our Conifer segment. The factors for determining the reportable segments include the manner in which management evaluates operating performance combined with the nature of the individual business activities.

Our Hospital Operations and other segment is comprised of our acute care hospitals, ancillary outpatient facilities, urgent care centers, microhospitals and physician practices. As described in Note 4, certain of our facilities are classified as held for sale in the accompanying Consolidated Balance Sheet at December 31, 2017. We also own various related healthcare businesses. At December 31, 2017, our subsidiaries operated 76 hospitals, primarily serving urban and suburban communities in 12 states (certain of which are classified as held for sale, as described in Note 4), as well as hospital-based outpatient centers, freestanding emergency departments and freestanding urgent care centers.

Our Ambulatory Care segment is comprised of the operations of our USPI joint venture and our nine Aspen facilities in the United Kingdom, which are classified as held for sale in the accompanying Consolidated Balance Sheet at December 31, 2017. At December 31, 2017, our USPI joint venture had interests in 247 ambulatory surgery centers, 34 urgent care centers, 23 imaging centers and 20 surgical hospitals in 28 states.

Our Conifer segment provides healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. At December 31, 2017, Conifer provided services to more than 800 Tenet and non-Tenet hospitals and other clients nationwide. In 2012, we entered into agreements documenting the terms and conditions of various services Conifer provides to Tenet hospitals, as well as certain administrative services our Hospital Operations and other segment provides to Conifer. The pricing terms for the services provided by each party to the other under these contracts were based on estimated third-party pricing terms in effect at the time the agreements were signed.

The following table includes amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Consolidated Balance Sheets and Consolidated Statements of Operations:



	December 31, 2017		December 31, 2016		December 31, 2015
Assets:
Hospital Operations and other	$	16,466	$	17,871	$	17,353
Ambulatory Care	5,822		5,722		5,159
Conifer	1,097		1,108		1,170
Total	$	23,385	$	24,701	$	23,682



	Years Ended December 31,
	2017			2016			2015
Capital expenditures:
Hospital Operations and other	$	625		$	799		$	786
Ambulatory Care	60			51			28
Conifer	22			25			28
Total	$	707		$	875		$	842

Net operating revenues:
Hospital Operations and other	$	16,260		$	16,904		$	16,928
Ambulatory Care	1,940			1,797			959
Conifer
Tenet	618			651			666
Other clients	979			920			747
Total Conifer revenues	1,597			1,571			1,413
Intercompany eliminations	(618		)	(651		)	(666		)
Total	$	19,179		$	19,621		$	18,634

Equity in earnings of unconsolidated affiliates:
Hospital Operations and other	$	4		$	9		$	16
Ambulatory Care	140			122			83
Total	$	144		$	131		$	99

Adjusted EBITDA:
Hospital Operations and other	$	1,462		$	1,586		$	1,657
Ambulatory Care	699			615			358
Conifer	283			277			265
Total	$	2,444		$	2,478		$	2,280

Depreciation and amortization:
Hospital Operations and other	$	736		$	709		$	702
Ambulatory Care	84			91			46
Conifer	50			50			49
Total	$	870		$	850		$	797

Adjusted EBITDA	$	2,444		$	2,478		$	2,280
Loss from divested and closed businesses (i.e., the Company’s health plan businesses)	(41		)	(37		)	17
Depreciation and amortization	(870		)	(850		)	(797		)
Impairment and restructuring charges, and acquisition-related costs	(541		)	(202		)	(318		)
Litigation and investigation costs	(23		)	(293		)	(291		)
Interest expense	(1,028		)	(979		)	(912		)
Loss from early extinguishment of debt	(164		)	—			(1		)
Other non-operating expense, net	(22		)	(20		)	(20		)
Gains on sales, consolidation and deconsolidation of facilities	144			151			186
Income (loss) from continuing operations, before income taxes	$	(101	)	$	248		$	144

RECENT ACCOUNTING STANDARDS	12 Months Ended
RECENT ACCOUNTING STANDARDS	Dec. 31, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENT ACCOUNTING STANDARDS	RECENT ACCOUNTING STANDARDS Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). In August 2015, the FASB amended the guidance to defer the effective date of this standard by one year. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We have completed our evaluation of the requirements of the new standard to insure that we have processes, systems and internal controls in place to collect the necessary information to implement the standard, which became effective for us on January 1, 2018, and we are drafting the new disclosures required post implementation. We used a modified retrospective method of application to adopt ASU 2014‑09 on January 1, 2018. For our Hospital Operations and other and Ambulatory Care segments, we used a portfolio approach to apply the new model to classes of payers with similar characteristics and analyzed cash collection trends over an appropriate collection look-back period depending on the payer. Adoption of ASU 2014‑09 will result in changes to our presentation for and disclosure of revenue related to uninsured or underinsured patients. Prior to the adoption of ASU 2014-09, a significant portion of our provision for doubtful accounts related to self-pay patients, as well as co-pays and deductibles owed to us by patients with insurance in our Hospital Operations and other segment. Under ASU 2014-09, the estimated uncollectible amounts due from these patients are generally considered a direct reduction to net operating revenues and, correspondingly, result in a material reduction in the amounts presented separately as provision for doubtful accounts. We also completed our assessment of the impact of the new standard on various reimbursement programs that represent variable consideration and concluded that accounting for these programs under the new standard is substantially consistent with our historical accounting practices. These include supplemental state Medicaid programs, disproportionate share payments and settlements with third party payers. The payment mechanisms for these types of programs vary by state. For our Conifer segment, the adoption of ASU 2014-09 will result in changes to our presentation and disclosure of customer contract assets and liabilities and the assessment of variable consideration under customer contracts. While the adoption of ASU 2014-09 will have a material effect on the presentation of net operating revenues in our Consolidated Statements of Operations and will impact certain disclosures, it will not materially impact our financial position, results of operations or cash flows. There was no cumulative effect of a change in accounting principle recorded related to the adoption of ASU 2014-09 on January 1, 2018. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which affects all entities that hold financial assets or owe financial liabilities. The guidance in ASU 2016-01 supersedes the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. An entity’s equity investments that are accounted for under the equity method of accounting or result in consolidation of an investee are not included within the scope of this guidance. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. Upon adoption of ASU 2016-01 on January 1, 2018, we recorded a cumulative effect adjustment to increase retained earnings by approximately $7 million. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which affects any entity that enters into a lease (as that term is defined in ASU 2016-02), with some specified scope exceptions. The main difference between the guidance in ASU 2016-02 and current GAAP is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. Recognition of these assets and liabilities will have a material impact to our consolidated balance sheets upon adoption. Under ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients. We are currently evaluating the potential impact of this guidance, which will be effective for us beginning in 2019, including performing an assessment of the quantity of and contractual provisions in various leasing arrangements to guide our implementation plan related to processes, systems and internal controls and the conclusion on the use of the optional practical expedients. In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. As further discussed in Note 1, we adopted ASU 2016-09 effective January 1, 2017 and, upon adoption, we recorded previously unrecognized excess tax benefits of approximately $56 million as a deferred tax asset and a cumulative effect adjustment to retained earnings as of January 1, 2017. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which applies to all entities that are required to present a statement of cash flows under Topic 230. ASU 2016-15 addresses the presentation and classification of cash flows related to (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies), (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. The amendments in ASU 2016-05 should be applied using a retrospective transition method to each period presented, unless it is impracticable. We do not expect the adoption of this guidance, which will be effective for us beginning in 2018, to have a material effect on our statement of cash flows. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash” (“ASU 2016-18”), which applies to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in ASU 2016-18 do not provide a definition of restricted cash or restricted cash equivalents. The amendments in ASU 2016-18 should be applied using a retrospective transition method to each period presented. We do not expect the adoption of this guidance, which will be effective for us beginning in 2018, to have a material effect on our statement of cash flows. In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350)” (“ASU 2017‑04”), which affects public business and other entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. The amendments in ASU 2017-04 modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. We early adopted ASU 2017-04 for our annual goodwill impairment tests for the year ended December 31, 2017, and such adoption did not affect our financial position, results of operations or cash flows. In March 2017, the FASB issued ASU 2017-07, which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside a subtotal of income from operations. As further discussed in Note 1, we early adopted ASU 2017-07 effective January 1, 2017 and such adoption did not have a material effect on our financial position, results of operations or cash flows In February 2018, the FASB issued ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220)” (“ASU 2018-02”), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act and requires certain disclosures about stranded tax effects. The amendments in ASU 2018-02 are effective for us beginning in 2019, with early adoption permitted, and may be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate tax rate in the Tax Act is recognized. We are currently evaluating the potential impact of this guidance, as well as the timing and method of our adoption.

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2017

Valuation and Qualifying Accounts [Abstract]

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(In Millions)



			Additions Charged To:
	Balance at Beginning of Period		Costs and Expenses(1)(2)			Deductions(3)			Other Items(4)			Balance at End of Period
Allowance for doubtful accounts:
Year ended December 31, 2017	$	1,031	$	1,434		$	(1,445	)	$	(122	)	$	898
Year ended December 31, 2016	$	887	$	1,451		$	(1,307	)	$	—		$	1,031
Year ended December 31, 2015	$	852	$	1,480		$	(1,388	)	$	(57	)	$	887
Valuation allowance for deferred tax assets:
Year ended December 31, 2017	$	72	$	—		$	—		$	—		$	72
Year ended December 31, 2016	$	96	$	(24	)	$	—		$	—		$	72
Year ended December 31, 2015	$	87	$	4		$	—		$	5		$	96


(1)	Includes amounts recorded in discontinued operations.


(2)	Before considering recoveries on accounts or notes previously written off.


(3)	Accounts written off.


(4)	Acquisition and divestiture activity

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

Our Consolidated Financial Statements include the accounts of Tenet and its wholly owned and majority-owned subsidiaries. We eliminate intercompany accounts and transactions in consolidation, and we include the results of operations of businesses that are newly acquired in purchase transactions from their dates of acquisition. We account for significant investments in other affiliated companies using the equity method. Unless otherwise indicated, all financial and statistical data included in these notes to our Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts).

Effective January 1, 2017, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which affects all entities that issue share-based payment awards to their employees. The guidance in ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Upon adoption of ASU 2016-09, we recorded previously unrecognized excess tax benefits of approximately $56 million as a deferred tax asset and a cumulative effect adjustment to retained earnings as of January 1, 2017. Prospectively, all excess tax benefits and deficiencies will be recognized as income tax benefit or expense in our consolidated statement of operations when awards vest.

Also effective January 1, 2017, we early adopted ASU 2017-07, “Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”), which the FASB issued in March 2017. The amendments in ASU 2017-07 apply to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715 of the FASB Accounting Standards Codification. The guidance in ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside a subtotal of income from operations. The line item or items used in the statement of operations to present the other components of net benefit cost must be disclosed. The amendments in ASU 2017-07 must be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the statement of operations. As a result of the adoption of ASU 2017-07, we reclassified approximately $28 million and $21 million of net benefit cost from salaries, wages and benefits expense to other non-operating expense, net, in the accompanying Consolidated Statements of Operations for the years ended December 31, 2016 and 2015, respectively, and approximately $31 million of other components of net benefit cost are included in other non-operating expense, net, in the accompanying Consolidated Statement of Operations for the year ended December 31, 2017.

Certain prior-year amounts have also been reclassified to conform to current-year presentation, primarily due to the adoption of ASU 2017-07 as described above.

Use of Estimates

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 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. Although we believe all adjustments considered necessary for a fair presentation have been included, actual results may vary from those estimates. 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 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.

Translation of Foreign Currencies

The accounts of Aspen were measured in its local currency (the pound sterling) and then translated into U.S. dollars. All assets and liabilities were translated using the current rate of exchange at the balance sheet date. Results of operations were translated using the average rates prevailing throughout the period of operations. Translation gains or losses resulting from changes in exchange rates are accumulated in shareholders’ equity.

Net Operating Revenues before Provision for Doubtful Accounts