Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Dec. 31, 2020	Jan. 31, 2021	Jun. 30, 2020
Entity Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	1-7293
Entity Registrant Name	TENET HEALTHCARE CORP
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	95-2557091
Entity Address, Address Line One	14201 Dallas Parkway
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75254
City Area Code	469
Local Phone Number	893-2200
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 1.1
Entity Common Stock, Shares Outstanding		106,196,295
Documents Incorporated by Reference	Portions of the Registrant’s definitive proxy statement for the 2021 annual meeting of shareholders are incorporated by reference into Part III of this Form 10-K.
Entity Central Index Key	0000070318
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Common Stock \| New York Stock Exchange
Entity Information [Line Items]
Title of 12(b) Security	Common stock,
Trading Symbol	THC
Security Exchange Name	NYSE
6.875% Senior Notes due 2031 \| New York Stock Exchange
Entity Information [Line Items]
Title of 12(b) Security	6.875% Senior Notes due 2031
Trading Symbol	THC31
Security Exchange Name	NYSE

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 2,446	$ 262
Accounts receivable	2,690	2,743
Inventories of supplies, at cost	368	310
Income tax receivable	1	10
Assets held for sale	140	387
Other current assets	1,502	1,369
Total current assets	7,147	5,081
Investments and other assets	2,534	2,369
Deferred income taxes	325	183
Property and equipment, at cost, less accumulated depreciation and amortization ($6,043 at December 31, 2020 and $5,498 at December 31, 2019)	6,692	6,878
Goodwill	8,808	7,252
Other intangible assets, at cost, less accumulated amortization ($1,284 at December 31, 2020 and $1,092 at December 31, 2019)	1,600	1,602
Total assets	27,106	23,365
Current liabilities:
Current portion of long-term debt	145	171
Accounts payable	1,207	1,204
Accrued compensation and benefits	942	877
Professional and general liability reserves	243	330
Accrued interest payable	248	245
Liabilities held for sale	70	44
Contract liabilities	659	61
Other current liabilities	1,333	1,273
Total current liabilities	4,847	4,205
Long-term debt, net of current portion	15,574	14,580
Professional and general liability reserves	735	635
Defined benefit plan obligations	497	560
Deferred income taxes	29	27
Contract liabilities – long-term	918	18
Other long-term liabilities	1,617	1,397
Total liabilities	24,217	21,422
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries	1,952	1,506
Shareholders’ equity:
Common stock, $0.05 par value; authorized 262,500,000 shares; 154,407,524 shares issued at December 31, 2020 and 152,540,815 shares issued at December 31, 2019	7	7
Additional paid-in capital	4,844	4,760
Accumulated other comprehensive loss	(281)	(257)
Accumulated deficit	(2,128)	(2,513)
Common stock in treasury, at cost, 48,337,947 shares at December 31, 2020 and 48,344,195 shares at December 31, 2019	(2,414)	(2,414)
Total shareholders’ equity (deficit)	28	(417)
Noncontrolling interests	909	854
Total equity	937	437
Total liabilities and equity	$ 27,106	$ 23,365

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Property and equipment, accumulated depreciation and amortization	$ 6,043	$ 5,498
Other intangible assets, accumulated amortization	$ 1,284	$ 1,092
Common stock, par value (in dollars per share)	$ 0.05	$ 0.05
Common stock, number of shares authorized (in shares)	262,500,000	262,500,000
Common stock, number of shares issued (in shares)	154,407,524	152,540,815
Common stock, number of shares held in treasury (in shares)	48,337,947	48,344,195

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Net operating revenues	$ 17,640	$ 18,479	$ 18,313
Grant income	882	0	0
Equity in earnings of unconsolidated affiliates	169	175	150
Operating expenses:
Salaries, wages and benefits	8,418	8,698	8,633
Supplies	2,982	3,057	3,004
Other operating expenses, net	4,125	4,171	4,267
Depreciation and amortization	857	850	802
Impairment and restructuring charges, and acquisition-related costs	290	185	209
Litigation and investigation costs	44	141	38
Net losses (gains) on sales, consolidation and deconsolidation of facilities	(14)	15	(127)
Operating income	1,989	1,537	1,637
Interest expense	(1,003)	(985)	(1,004)
Other non-operating income (expense), net	1	(5)	(5)
Gain (loss) from early extinguishment of debt	(316)	(227)	1
Income from continuing operations, before income taxes	671	320	629
Income tax benefit (expense)	97	(160)	(173)
Income from continuing operations, before discontinued operations	768	160	456
Discontinued operations:
Income from operations	0	15	4
Income tax expense	0	(4)	(1)
Income from discontinued operations	0	11	3
Net income	768	171	459
Less: Net income available to noncontrolling interests	369	386	355
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	399	(215)	104
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax	399	(226)	101
Income from discontinued operations, net of tax	0	11	3
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$ 399	$ (215)	$ 104
Basic
Continuing operations (in dollars per share)	$ 3.80	$ (2.19)	$ 0.99
Discontinued operations (in dollars per share)	0	0.11	0.03
Total earnings (loss) per share, Basic (in dollars per share)	3.80	(2.08)	1.02
Diluted
Continuing operations (in dollars per share)	3.75	(2.19)	0.97
Discontinued operations (in dollars per share)	0	0.11	0.03
Total earnings (loss) per share, Diluted (in dollars per share)	$ 3.75	$ (2.08)	$ 1.00
Weighted average shares and dilutive securities outstanding (in thousands):
Basic (in shares)	105,010	103,398	102,110
Diluted (in shares)	106,263	103,398	103,881

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 768	$ 171	$ 459
Other comprehensive income (loss):
Adjustments for defined benefit plans	(41)	(52)	(29)
Amortization of net actuarial loss included in other non-operating expense, net	9	10	14
Unrealized gains on debt securities held as available-for-sale	1	0	0
Sale of foreign subsidiary	0	0	37
Foreign currency translation adjustments	0	0	(4)
Other comprehensive income (loss) before income taxes	(31)	(42)	18
Income tax benefit related to items of other comprehensive income (loss)	7	8	6
Total other comprehensive income (loss), net of tax	(24)	(34)	24
Comprehensive net income	744	137	483
Less: Comprehensive income available to noncontrolling interests	369	386	355
Comprehensive income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$ 375	$ (249)	$ 128

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Millions	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Cumulative Effect, Period of Adoption, Adjustment	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Treasury Stock	Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2017			100,972
Beginning balance at Dec. 31, 2017	$ 483	$ 0	$ 7	$ 4,859	$ (204)	$ (43)	$ (2,446)	$ 43	$ (2,419)	$ 686
Changes in Shareholders' Equity
Net income (loss)	269						104			165
Distributions paid to noncontrolling interests	(148)									(148)
Other comprehensive income (loss)	24				24
Accretion of redeemable noncontrolling interests	(173)			(173)
Purchases (sales) of businesses and noncontrolling interests, net	106			3						103
Stock-based compensation expense, tax benefit and issuance of common stock (in shares)			1,565
Stock-based compensation expense, tax benefit and issuance of common stock	63			58					5
Ending balance (in shares) at Dec. 31, 2018			102,537
Ending balance at Dec. 31, 2018	624	1	$ 7	4,747	(223)	$ 0	(2,299)	1	(2,414)	806
Changes in Shareholders' Equity
Net income (loss)	(21)						(215)			194
Distributions paid to noncontrolling interests	(162)									(162)
Other comprehensive income (loss)	(34)				(34)
Accretion of redeemable noncontrolling interests	(18)			(18)
Purchases (sales) of businesses and noncontrolling interests, net	9			(7)						16
Stock-based compensation expense, tax benefit and issuance of common stock (in shares)			1,660
Stock-based compensation expense, tax benefit and issuance of common stock	38			38
Ending balance (in shares) at Dec. 31, 2019			104,197
Ending balance at Dec. 31, 2019	437	$ (14)	$ 7	4,760	(257)		(2,513)	$ (14)	(2,414)	854
Changes in Shareholders' Equity
Net income (loss)	582						399			183
Distributions paid to noncontrolling interests	(152)									(152)
Other comprehensive income (loss)	(24)				(24)
Accretion of redeemable noncontrolling interests	(4)			(4)
Purchases (sales) of businesses and noncontrolling interests, net	51			27						24
Stock-based compensation expense, tax benefit and issuance of common stock (in shares)			1,873
Stock-based compensation expense, tax benefit and issuance of common stock	61			61
Ending balance (in shares) at Dec. 31, 2020			106,070
Ending balance at Dec. 31, 2020	$ 937		$ 7	$ 4,844	$ (281)		$ (2,128)		$ (2,414)	$ 909

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Cash Flows [Abstract]
Net income	$ 768	$ 171	$ 459
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	857	850	802
Deferred income tax (benefit) expense	(128)	144	147
Stock-based compensation expense	44	42	46
Impairment and restructuring charges, and acquisition-related costs	290	185	209
Litigation and investigation costs	44	141	38
Net losses (gains) on sales, consolidation and deconsolidation of facilities	(14)	15	(127)
Loss (gain) from early extinguishment of debt	316	227	(1)
Equity in earnings of unconsolidated affiliates, net of distributions received	(37)	(32)	(12)
Amortization of debt discount and debt issuance costs	38	35	45
Pre-tax income from discontinued operations	0	(15)	(4)
Other items, net	(29)	(15)	(21)
Changes in cash from operating assets and liabilities:
Accounts receivable	195	(247)	(134)
Inventories and other current assets	(145)	(94)	17
Income taxes	19	8	(3)
Accounts payable, accrued expenses, contract liabilities and other current liabilities	1,302	12	(142)
Other long-term liabilities	221	3	(102)
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(333)	(192)	(163)
Net cash used in operating activities from discontinued operations, excluding income taxes	(1)	(5)	(5)
Net cash provided by operating activities	3,407	1,233	1,049
Cash flows from investing activities:
Purchases of property and equipment — continuing operations	(540)	(670)	(617)
Purchases of businesses or joint venture interests, net of cash acquired	(1,177)	(25)	(113)
Proceeds from sales of facilities and other assets — continuing operations	77	63	543
Proceeds from sales of facilities and other assets — discontinued operations	0	17	0
Proceeds from sales of marketable securities, long-term investments and other assets	59	82	199
Purchases of marketable securities and equity investments	(44)	(62)	(148)
Other long-term assets	(1)	(24)
Other long-term assets			15
Other items, net	18	0	6
Net cash used in investing activities	(1,608)	(619)	(115)
Cash flows from financing activities:
Repayments of borrowings under credit facility	(740)	(2,640)	(950)
Proceeds from borrowings under credit facility	740	2,640	950
Repayments of other borrowings	(3,293)	(6,131)	(312)
Proceeds from other borrowings	3,818	5,719	23
Debt issuance costs	(48)	(70)	0
Distributions paid to noncontrolling interests	(287)	(307)	(288)
Proceeds from sale of noncontrolling interests	14	21	20
Purchases of noncontrolling interests	(39)	(11)	(647)
Proceeds from exercise of stock options and employee stock purchase plan	23	12	16
Medicare advances and grants received by unconsolidated affiliates	187	0	0
Other items, net	10	4	54
Net cash provided by (used in) financing activities	385	(763)	(1,134)
Net increase (decrease) in cash and cash equivalents	2,184	(149)	(200)
Cash and cash equivalents at beginning of period	262	411	611
Cash and cash equivalents at end of period	2,446	262	411
Supplemental disclosures:
Interest paid, net of capitalized interest	(962)	(946)	(976)
Income tax payments, net	$ (12)	$ (12)	$ (25)

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

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 headquartered in Dallas, Texas. Through an expansive care network that includes USPI Holding Company, Inc. (“USPI”), at December 31, 2020, we operated 65 hospitals and over 550 other healthcare facilities, including surgical hospitals, ambulatory surgery centers (“ASCs”), urgent care and imaging centers, and other care sites and clinics. We hold noncontrolling interests in 107 of these facilities, which are recorded using the equity method of accounting. We also operate Conifer Health Solutions, LLC through our Conifer Holdings, Inc. (“Conifer”) subsidiary, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients.

Effective June 16, 2015, we completed a transaction that combined our freestanding ambulatory surgery and imaging center assets with the surgical facility assets of United Surgical Partners International, Inc. into our joint venture, USPI. In April 2016, we paid $127 million to purchase additional shares, which increased our ownership interest in USPI from 50.1% to approximately 56.3%. In July 2017, we paid $716 million for the purchase of additional shares and the final adjustment to the 2016 purchase price, which increased our ownership interest in USPI to 80.0%. In April 2018, we paid approximately $630 million for the purchase of an additional 15% ownership interest in USPI and the final adjustment to the 2017 purchase price, which increased our ownership interest in USPI to 95%, where it remained at December 31, 2020 and 2019.

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, 2020, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) using the modified retrospective transition approach as of the period of adoption. The amendments in this ASU required a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Upon adoption of ASU 2016-13 on January 1, 2020, we recorded a cumulative effect adjustment to increase accumulated deficit by $14 million.

Effective January 1, 2019, we adopted ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) using the modified retrospective transition approach as of the period of adoption. Our financial statements for periods prior to January 1, 2019 were not modified for the application of the new lease accounting standard. The main difference between the guidance in ASU 2016-02 and previous accounting principles generally accepted in the United States of America (“GAAP”) is the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under previous GAAP. Upon adoption of ASU 2016-02, we recorded $822 million of right-of-use assets, net of deferred rent, associated with operating leases in investments and other assets in our consolidated balance sheet, $147 million of current liabilities associated with operating leases in other current liabilities in our consolidated balance sheet and $715 million of long-term liabilities associated with operating leases in other long-term liabilities in our consolidated balance sheet. We also recognized $1 million of cumulative effect adjustment that decreased accumulated deficit at January 1, 2019.

Effective January 1, 2018, we adopted the FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) using a modified retrospective method of application to all contracts existing on January 1, 2018. 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. For our Hospital Operations and Other (“Hospital Operations”) and Ambulatory Care segments, the adoption of ASU 2014-09 resulted in changes to our presentation and disclosure of revenue primarily 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 uninsured patients, as well as co-pays, co-insurance amounts and deductibles owed to us by patients with insurance. Under ASU 2014-09, the estimated uncollectable amounts due from these patients are generally considered implicit price concessions that are a direct reduction to net operating revenues, with a corresponding reduction in the amounts presented as provision for doubtful accounts. For the year ended December 31, 2018, we recorded approximately $1.422 billion of implicit price concessions as a direct reduction of net operating revenues that would have been recorded as provision for doubtful accounts prior to the adoption of ASU 2014-09. At January 1, 2018, we reclassified $171 million of revenues related to patients who were still receiving inpatient care in our facilities at that date from accounts receivable, less allowance for doubtful accounts, to contract assets, which are included in other current assets in our consolidated balance sheets. The adoption of ASU 2014-09 also resulted in changes to our presentation and disclosure of customer contract assets and liabilities and the assessment of variable consideration under customer contracts.

Also effective January 1, 2018, we early adopted 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 income tax effects resulting from the Tax Cuts and Jobs Act and requires certain disclosures about stranded income tax effects. We applied the amendments in ASU 2018-02 in the period of adoption, resulting in a reclassification that decreased accumulated deficit and increased accumulated other comprehensive loss by $36 million of stranded income tax effects in the year ended December 31, 2018.

In addition, we adopted ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Liabilities” (“ASU 2016-01”) effective January 1, 2018, which supersedes the guidance to classify equity securities with readily determinable fair values to different categories (that is, trading or available-for-sale) and requires 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. Upon adoption of ASU 2016-01 on January 1, 2018, we recorded a cumulative effect adjustment to decrease accumulated deficit by $7 million for unrealized gains on equity securities.

Certain prior-year amounts have been reclassified to conform to the current year presentation. In our consolidated balance sheets, contract liabilities and contract liabilities – long-term, primarily related to Medicare advance payments we received, are now presented separately due to the fact that the balances increased substantially in 2020. Additionally, our financial statements and corresponding disclosures for prior periods have been recast to reflect retrospective application of the change in accounting principle discussed in the Professional and General Liability Reserves section of this note.

Use of Estimates

The preparation of financial statements in conformity with 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.

Professional and General Liability Reserves

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. 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.

In March 2020, we changed our method of accounting for our estimated professional and general liability claims. Under the new method of accounting, the liabilities are reported on an undiscounted basis whereas, previously, the liabilities were reported on a discounted basis. We believe that the undiscounted presentation is preferable because it simplifies the accounting for the liabilities, thereby increasing understandability of our financial results and financial condition, is consistent with the manner in which management evaluates our business, and results in an accounting method and financial statement presentation that is consistent with our key peers.

Accordingly, our financial statements and corresponding disclosures for the respective prior periods have been recast to reflect retrospective application of the change in accounting principle. We recorded the cumulative effect of the change in accounting principle as an increase of $44 million to accumulated deficit as of January 1, 2017. This change increased our accumulated deficit by $46 million, $63 million and $56 million at December 31, 2019, 2018 and 2017, respectively.

The following tables present the effects of the change in accounting principle to our financial statements:

Consolidated Balance Sheet:


	As Reported		Effect of Change in Accounting Principle		As Adjusted
At December 31, 2019:
Deferred income taxes	$	169	$	14	$	183
Professional and general liability reserves	$	585	$	50	$	635
Other long-term liabilities	$	1,387	$	10	$	1,397
Accumulated deficit	$	(2,467)	$	(46)	$	(2,513)

Consolidated Statements of Operations (in millions, except for per-share amounts):


	Year Ended December 31, 2020
		Prior to Change in Accounting Principle		Effect of Change in Accounting Principle		As Reported
Salaries, wages and benefits		$	8,425	$	(7)	$	8,418
Other operating expenses, net		$	4,159	$	(34)	$	4,125
Operating income		$	1,948	$	41	$	1,989
Income tax benefit		$	107	$	(10)	$	97
Net income		$	737	$	31	$	768
Net income from continuing operations available to Tenet Healthcare Corporation common shareholders		$	368	$	31	$	399
Earnings per share available to Tenet Healthcare Corporation common shareholders from continuing operations:
Basic		$	3.50	$	0.30	$	3.80
Diluted		$	3.46	$	0.29	$	3.75


	Year Ended December 31, 2019
		As Reported		Effect of Change in Accounting Principle		As Adjusted
Salaries, wages and benefits		$	8,704	$	(6)	$	8,698
Other operating expenses, net		$	4,189	$	(18)	$	4,171
Operating income		$	1,513	$	24	$	1,537
Income tax expense		$	(153)	$	(7)	$	(160)
Net income		$	154	$	17	$	171
Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders		$	(243)	$	17	$	(226)
Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations:
Basic		$	(2.35)	$	0.16	$	(2.19)
Diluted		$	(2.35)	$	0.16	$	(2.19)


	Year Ended December 31, 2018
		As Reported		Effect of Change in Accounting Principle		As Adjusted
Salaries, wages and benefits		$	8,634	$	(1)	$	8,633
Other operating expenses, net		$	4,256	$	11	$	4,267
Operating income		$	1,647	$	(10)	$	1,637
Income tax expense		$	(176)	$	3	$	(173)
Net income		$	466	$	(7)	$	459
Net income from continuing operations available to Tenet Healthcare Corporation common shareholders		$	108	$	(7)	$	101
Earnings per share available to Tenet Healthcare Corporation common shareholders from continuing operations:
Basic		$	1.06	$	(0.07)	$	0.99
Diluted		$	1.04	$	(0.07)	$	0.97

Consolidated Statements of Cash Flows:


	Prior to Change in Accounting Principle		Effect of Change in Accounting Principle		As Reported
Year Ended December 31, 2020:
Net income	$	737	$	31	$	768
Deferred income tax benefit	$	(138)	$	10	$	(128)
Accounts payable, accrued expenses and other current liabilities	$	1,343	$	(41)	$	1,302
Net cash provided by operating activities	$	3,407	$	—	$	3,407


	As Reported		Effect of Change in Accounting Principle		As Adjusted
Year Ended December 31, 2019:
Net income	$	154	$	17	$	171
Deferred income tax expense	$	137	$	7	$	144
Accounts payable, accrued expenses and other current liabilities	$	36	$	(24)	$	12
Net cash provided by operating activities	$	1,233	$	—	$	1,233


	As Reported		Effect of Change in Accounting Principle		As Adjusted
Year Ended December 31, 2018:
Net income	$	466	$	(7)	$	459
Deferred income tax expense	$	150	$	(3)	$	147
Accounts payable, accrued expenses and other current liabilities	$	(152)	$	10	$	(142)
Net cash provided by operating activities	$	1,049	$	—	$	1,049

COVID-19 Pandemic

In 2020, the COVID-19 pandemic impacted all three segments of our business, as well as our patients, communities and employees. The spread of COVID-19 and the ensuing response of federal, state and local authorities beginning in March 2020 resulted in a material reduction in our patient volumes and also adversely affected our net operating revenues in the year ended December 31, 2020. Federal, state and local authorities have taken several actions designed to assist healthcare providers in providing care to COVID-19 and other patients and to mitigate the adverse economic impact of the COVID-19 pandemic. Legislative actions taken by the federal government include the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, the Paycheck Protection Program and Health Care Enhancement Act (the “PPP Act”), which was signed into law on April 24, 2020, the Continuing Appropriations Act, 2021 and Other Extensions Act (the “Continuing Appropriations Act”), which was signed into law October 1, 2020, and the Consolidated Appropriations Act, 2021 (the “Consolidated Appropriations Act” and, collectively, with the CARES Act, the PPP Act, and the Continuing Appropriations Act, the “COVID Acts”), which was signed into law on December 27, 2020. Through the COVID Acts the federal government has authorized $178 billion in payments to be distributed through the Public Health and Social Services Emergency Fund (“Provider Relief Fund” or “PRF”). Additionally, the COVID Acts revised the Medicare accelerated

payment program in an attempt to disburse payments to hospitals and other care providers more quickly to mitigate the shortfalls due to delays in non-essential procedures, as well as staffing and billing disruptions. Our participation in these programs and related accounting policies are summarized below.

Grant Income. During the year ended December 31, 2020, we received cash payments of $974 million from the Provider Relief Fund and state and local grant programs, including $74 million received by our unconsolidated affiliates. Payments from the PRF are not loans and, therefore, they are not subject to repayment. However, as a condition to receiving distributions, providers must agree to certain terms and conditions, including, among other things, that the funds are being used for lost revenues and unreimbursed COVID-related costs as defined by the U.S. Department of Health and Human Services (“HHS”), and that the providers will not seek collection of out‑of‑pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. All recipients of PRF payments are required to comply with the reporting requirements described in the terms and conditions and as determined by HHS.

We recognize grant payments as income when there is reasonable assurance that we have complied with the conditions associated with the grant. Our estimates could change materially in the future based on our operating performance or COVID-19 activities, as well as the government’s evolving grant compliance guidance. Grant income recognized by our Hospital Operations and Ambulatory Care segments is presented in grant income and grant income recognized through our unconsolidated affiliates is presented in equity in earnings of unconsolidated affiliates in the accompanying Consolidated Statements of Operations for the year ended December 31, 2020. During the year ended December 31, 2020, we recognized grant income of $823 million in our Hospital Operations segment, and $59 million in our Ambulatory Care segment. We recognized an additional $17 million of Provider Relief Fund income from our unconsolidated affiliates during this period. We have deferred $18 million of payments, which amount is recorded in other current liabilities on our Consolidated Balance Sheet at December 31, 2020.

Medicare Accelerated Payment Program. In certain circumstances, when a hospital is experiencing financial difficulty due to delays in receiving payment for the Medicare services it provided, it may be eligible for an accelerated or advance payment pursuant to the Medicare accelerated payment program. The COVID Acts revised the Medicare accelerated payment program in an attempt to disburse payments to healthcare providers more quickly. Recipients may retain the accelerated payments for one year from the date of receipt before recoupment commences, which will be effectuated by a 25% offset of claims payments for 11 months, followed by a 50% offset for the succeeding six months. At the end of the 29-month period, interest on the unpaid balance will be assessed at 4.00% per annum.

In the year ended December 31, 2020, our Hospital Operations and Ambulatory Care segments received advance payments from the Medicare accelerated payment program following expansion of the program under the COVID Acts. Advances totaling $603 million are included in contract liabilities and $902 million are included in contract liabilities – long term in the accompanying Consolidated Balance Sheet at December 31, 2020.

Deferral of Employment Tax Payments. The COVID Acts permitted employers to defer payment of the 6.2% employer Social Security tax beginning March 27, 2020 through December 31, 2020. Deferred tax amounts are required to be paid in equal amounts over two years, with payments due in December 2021 and December 2022. During the year ended December 31, 2020, we deferred Social Security tax payments totaling $275 million pursuant to this provision.

Translation of Foreign Currencies

During the year ended December 31, 2019, we formed our Global Business Center (“GBC”) in the Philippines. The GBC’s accounts are measured in its local currency (the Philippine peso) and then translated into U.S. dollars. We divested European Surgical Partners Limited (“Aspen”) in August 2018; prior to that time, Aspen’s accounts were measured in its local currency (the pound sterling) and then translated into U.S. dollars. All assets and liabilities denominated in foreign currency are translated using the current rate of exchange at the balance sheet date. Results of operations denominated in foreign currency are 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

We recognize net operating revenues in the period in which we satisfy our performance obligations under contracts by transferring services to our customers. Net operating revenues are recognized in the amounts we expect to be entitled to, which are the transaction prices allocated for the distinct services. Net operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, 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. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to health systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities.

Net Patient Service Revenues—We report net patient service revenues at the amounts that reflect the consideration we expect to be entitled to in exchange for providing patient care. These amounts are due from patients, third-party payers (including managed care payers and government programs) and others, and they include variable consideration for retroactive revenue adjustments due to settlement of audits, reviews and investigations. Generally, we bill our patients and third-party payers several days after the services are performed or shortly after discharge. Revenues are recognized as performance obligations are satisfied.

We determine performance obligations based on the nature of the services we provide. We recognize revenues for performance obligations satisfied over time based on actual charges incurred in relation to total expected charges. We believe that this method provides a faithful depiction of the transfer of services over the term of performance obligations based on the inputs needed to satisfy the obligations. Generally, performance obligations satisfied over time relate to patients in our hospitals receiving inpatient acute care services. We measure performance obligations from admission to the point when there are no further services required for the patient, which is generally the time of discharge. We recognize revenues for performance obligations satisfied at a point in time, which generally relate to patients receiving outpatient services, when: (1) services are provided; and (2) we do not believe the patient requires additional services.

Because our patient service performance obligations relate to contracts with a duration of less than one year, we have elected to apply the optional exemption provided in FASB Accounting Standards Codification (“FASB ASC”) 606-10-50-14(a) and, therefore, we are not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations referred to above are primarily related to inpatient acute care services at the end of the reporting period. The performance obligations for these contracts are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period.

We determine the transaction price based on gross charges for services provided, reduced by contractual adjustments provided to third-party payers, discounts provided to uninsured patients in accordance with our Compact, and implicit price concessions provided primarily to uninsured patients. We determine our estimates of contractual adjustments and discounts based on contractual agreements, our discount policies and historical experience. We determine our estimate of implicit price concessions based on our historical collection experience with these classes of patients using a portfolio approach as a practical expedient to account for patient contracts as collective groups rather than individually. The financial statement effects of using this practical expedient are not materially different from an individual contract approach.

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 (“FFS”) 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 we record could change by material amounts.

We have a system and estimation process for recording Medicare net patient service revenue and estimated cost report settlements. As a result, we record 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.

Settlements with third-party payers for retroactive revenue adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care using the most likely outcome method. These settlements are estimated based on the terms of the payment agreement with the payer, correspondence from the payer and our historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews and investigations.

Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per-diem rates, discounted FFS 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. 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 implicit price concessions 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 in the accompanying Consolidated Financial Statements.

Generally, patients who are covered by third-party payers are responsible for related co-pays, co-insurance and deductibles, which vary in amount. We also provide services to uninsured patients and offer uninsured patients a discount from standard charges. We estimate the transaction price for patients with co-pays, co-insurance and deductibles and for those who are uninsured based on historical collection experience and current market conditions. Under our Compact and 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 at the time they are recorded through implicit price concessions based on historical collection trends for self-pay accounts and other factors that affect the estimation process. 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, co-insurance amounts 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. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to net patient service revenues in the period of the change.

We have provided implicit price concessions, primarily to uninsured patients and patients with co-pays, co-insurance and deductibles. The implicit price concessions included in estimating the transaction price represent the difference between amounts billed to patients and the amounts we expect to collect based on our collection history with similar patients. Although outcomes vary, our policy is to attempt to collect amounts due from patients, including co-pays, co-insurance 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 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. 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.

Conifer Revenues—Our Conifer segment recognizes revenue from its contracts when Conifer’s performance obligations are satisfied, which is generally as services are rendered. Revenue is recognized in an amount that reflects the consideration to which Conifer expects to be entitled.

At contract inception, Conifer assesses the services specified in its contracts with customers and identifies a performance obligation for each distinct contracted service. Conifer identifies the performance obligations and considers all the services provided under the contract. Conifer generally considers the following distinct services as separate performance obligations:

•revenue cycle management services;

•value-based care services;

•patient communication and engagement services;

•consulting services; and

•other client-defined projects.

Conifer’s contracts generally consist of fixed-price, volume-based or contingency-based fees. Conifer’s long-term contracts typically provide for Conifer to deliver recurring monthly services over a multi-year period. The contracts are typically priced such that Conifer’s monthly fee to its customer represents the value obtained by the customer in the month for those services. Such multi-year service contracts may have upfront fees related to transition or integration work performed by Conifer to set up the delivery for the ongoing services. Such transition or integration work typically does not result in a separately identifiable obligation; thus, the fees and expenses related to such work are deferred and recognized over the life of the related contractual service period. Revenue for fixed-priced contracts is typically recognized at the time of billing unless evidence suggests that the revenue is earned or Conifer’s obligations are fulfilled in a different pattern. Revenue for volume‑based contracts is typically recognized as the services are being performed at the contractually billable rate, which is generally a percentage of collections or a percentage of client net patient revenue.

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 $2.446 billion and $262 million at December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, our book overdrafts were $154 million and $246 million, respectively, which were classified as accounts payable.

At December 31, 2020 and 2019, $166 million and $176 million, respectively, of total cash and cash equivalents in the accompanying Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries, and $1 million and $2 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.

At December 31, 2020, 2019 and 2018, we had $93 million, $136 million and $135 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $85 million, $119 million and $114 million, respectively, were included in accounts payable.

During the years ended December 31, 2020, 2019 and 2018, we recorded right-of-use assets related to non-cancellable finance leases of $98 million, $141 million and $149 million, respectively, primarily for equipment.

Investments in Debt and Equity Securities

We classify investments in debt securities as either available-for-sale, held-to-maturity or as part of a trading portfolio. Our policy is to classify investments in debt securities that may be needed for cash requirements as “available-for-sale.” At December 31, 2020, we had no significant investments in debt securities classified as either held-to-maturity or trading. We carry debt 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 carry equity securities at fair value, and we report their unrealized gains and losses in other non-operating expense, net, in our consolidated statements of operations. If the equity security does not have a readily determinable fair value, the carrying value of the security is adjusted only when there is a price change that is observable from a transaction of an identical or similar investment. We include realized gains or losses in our consolidated statements of operations based on the specific identification method.

Investments in Unconsolidated Affiliates

We control 290 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 396 at December 31, 2020), as well as additional companies in which our Hospital Operations segment holds ownership interests, under the equity method as investments in unconsolidated affiliates and report only our share of net income as equity in earnings of unconsolidated affiliates in the accompanying Consolidated Statements of Operations. In the year ended December 31, 2020, equity in earnings of unconsolidated affiliates included $17 million from PRF grants recognized by our Ambulatory Care segment’s unconsolidated affiliates.

Summarized financial information for these equity method investees is included in the following table; among the equity method investees are four North Texas hospitals in which we held minority interests and that were operated by our Hospital Operations segment through the divestiture of these investments effective March 1, 2018. We recorded a gain of $11 million in the year ended December 31, 2018 due to the sales of our minority interest in these hospitals. 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, 2020		December 31, 2019		December 31, 2018
Current assets	$	1,309	$	1,180	$	842
Noncurrent assets	$	1,262	$	1,042	$	662
Current liabilities	$	(516)	$	(372)	$	(313)
Noncurrent liabilities	$	(866)	$	(739)	$	(430)
Noncontrolling interests	$	(621)	$	(579)	$	(530)

	Years Ended December 31,
	2020		2019		2018
Net operating revenues	$	2,665	$	2,680	$	2,469
Net income	$	702	$	765	$	599
Net income attributable to the investees	$	437	$	499	$	372

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 USPI. THVG represented $85 million of the total $169 million equity in earnings of unconsolidated affiliates we recognized for the year ended December 31, 2020, $79 million of the total $175 million equity in earnings of unconsolidated affiliates we recognized for the year ended December 31, 2019 and $70 million of the total $150 million equity in earnings of unconsolidated affiliates we recognized for the year ended December 31, 2018.

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. Interest costs related to construction projects are capitalized. In the years ended December 31, 2020, 2019 and 2018, capitalized interest was $5 million, $11 million and $7 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 or outpatient facilities, 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.

Leases

ASU 2016-02 was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Our adoption of ASU 2016-02 was accomplished using a modified retrospective method of application, and our accounting policies related to leases were revised accordingly effective January 1, 2019, as discussed below.

We determine if an arrangement is a lease at inception of the contract. Our right-of-use assets represent our right to use the underlying assets for the lease term and our lease liabilities represent our obligation to make lease payments arising from the leases. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. For our Hospital Operations and Conifer segments, we estimate our incremental borrowing rates for our portfolio of leases using documented rates included in our recent equipment finance leases or, if applicable, recent secured debt issuances that correspond to various lease terms. We also give consideration to information obtained from our bankers, our secured debt fair value and publicly available data for instruments with similar characteristics. For our Ambulatory Care segment, we estimate an incremental borrowing rate for each center by utilizing historical and projected financial data, estimating a hypothetical credit rating using publicly available market data and adjusting the market data to reflect the effects of collateralization.

Our operating leases are primarily for real estate, including off-campus outpatient facilities, medical office buildings, and corporate and other administrative offices, as well as medical and office equipment. Our finance leases are primarily for medical equipment and information technology and telecommunications assets. Our real estate lease agreements typically have initial terms of five to 10 years, and our equipment lease agreements typically have initial terms of three years. We do not record leases with an initial term of 12 months or less (“short-term leases”) in our consolidated balance sheets.

Our real estate leases may include one or more options to renew, with renewals that can extend the lease term from five to 10 years. The exercise of lease renewal options is at our sole discretion. In general, we do not consider renewal options to be reasonably likely to be exercised, therefore, renewal options are generally not recognized as part of our right-of-use assets and lease liabilities. Certain leases also include options to purchase the leased property. The useful life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The majority of our medical equipment leases have terms of three years with a bargain purchase option that is reasonably certain of exercise, so these assets are depreciated over their useful life, typically ranging from five to seven years. Similarly, some of our leases of information technology and telecommunications assets include a transfer of title and, therefore, have useful lives of 15 years.

Certain of our lease agreements for real estate include payments based on actual common area maintenance expenses and others include rental payments adjusted periodically for inflation. These variable lease payments are recognized in other operating expenses, net, but are not included in the right-of-use asset or liability balances. Our lease agreements do not contain any material residual value guarantees, restrictions or covenants.

We have elected the practical expedient that allows lessees to choose to not separate lease and non-lease components by class of underlying asset and are applying this expedient to all relevant asset classes. We have also elected the practical

expedient package to not reassess at adoption (i) expired or existing contracts for whether they are or contain a lease, (ii) the lease classification of any existing leases or (iii) initial indirect costs for existing leases.

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 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.

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 Hospital Operations segment generated 81% of our net operating revenues net of implicit price concessions in the years ended December 31, 2020 and 2019, and 80% during the year ended December 31, 2018. At December 31, 2020, each of our markets related to our general hospitals reported directly to our president and chief operating officer. Major decisions, including capital resource allocations, are made at the consolidated level, not at the market or hospital level.

Our Hospital Operations segment is comprised of our acute care and specialty hospitals, ancillary outpatient facilities, urgent care centers, micro-hospitals and physician practices. Our Ambulatory Care segment is comprised of the operations of USPI and included Aspen facilities in the United Kingdom until Aspen’s divestiture effective August 17, 2018. Our Conifer segment provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. 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.

As discussed in Note 5, certain of the facilities were classified as held for sale in the accompanying Consolidated Balance Sheets at December 31, 2020 and 2019.

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
EQUITY	Dec. 31, 2020
Stockholders' Equity Note [Abstract]
EQUITY	EQUITY Noncontrolling Interests Our noncontrolling interests balances at December 31, 2020 and 2019 in the accompanying Consolidated Statements of Changes in Equity were comprised of $116 million and $114 million, respectively, from our Hospital Operations segment, and $793 million and $740 million, respectively, from our Ambulatory Care segment. Our net income attributable to noncontrolling interests for the years ended December 31, 2020, 2019 and 2018 were comprised of $14 million, $16 million and $8 million, respectively, from our Hospital Operations segment, and $169 million, $178 million and $157 million, respectively, from our Ambulatory Care segment.

ACCOUNTS RECEIVABLE

12 Months Ended

Dec. 31, 2020

Accounts Receivable Additional Disclosures [Abstract]

ACCOUNTS RECEIVABLE

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


	December 31, 2020		December 31, 2019
Continuing operations:
Patient accounts receivable	$	2,499	$	2,567
Estimated future recoveries	156		162
Net cost reports and settlements receivable and valuation allowances	34		12
	2,689		2,741
Discontinued operations	1		2
Accounts receivable, net	$	2,690	$	2,743

Accounts that are pursued for collection through Conifer’s business offices are maintained on our hospitals’ books and reflected in patient accounts receivable. Patient accounts receivable, including billed accounts and certain unbilled accounts, as well as estimated amounts due from third-party payers for retroactive adjustments, are receivables if our right to consideration is unconditional and only the passage of time is required before payment of that consideration is due. Estimated uncollectable amounts are generally considered implicit price concessions that are a direct reduction to patient accounts receivable rather than allowance for doubtful accounts.

The following table summarizes the amount and classification of assets and liabilities in the accompanying Consolidated Balance Sheets related to California’s provider fee program at December 31, 2020 and 2019:


	December 31, 2020		December 31, 2019

Assets:
Other current assets	$	378	$	316
Investments and other assets	$	206	$	213

Liabilities:
Other current liabilities	$	110	$	115
Other long-term liabilities	$	56	$	57

We also provide financial assistance through our charity and uninsured discount programs to uninsured patients who are unable to pay for the healthcare services they receive. Our policy is not to pursue collection of amounts determined to qualify for financial assistance; 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. Some states have also developed provider fee or other supplemental payment programs to mitigate the shortfall of Medicaid reimbursement compared to the cost of caring for Medicaid patients.

The following table shows our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses and which exclude the costs of our health plan businesses) of caring for our uninsured and charity patients in the years ended December 31, 2020, 2019 and 2018.


	Years Ended December 31,
	2020		2019		2018
Estimated costs for:
Uninsured patients	$	617	$	664	$	641
Charity care patients	147		156		124
Total	$	764	$	820	$	765

CONTRACT BALANCES

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

CONTRACT BALANCES

Hospital Operations Segment

Amounts related to services provided to patients for which we have not billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period are contract assets. For our Hospital Operations segment, our contract assets include services that we have provided to patients who are still receiving inpatient care in our facilities at the end of the reporting period. Our Hospital Operations segment’s contract assets are included in other current assets in the accompanying Consolidated Balance Sheets at December 31, 2020 and 2019. Approximately 89% of our Hospital Operations segment’s contract assets meet the conditions for unconditional right to payment and are reclassified to patient receivables within 90 days.

In certain circumstances, when a hospital is experiencing financial difficulty due to delays in receiving payment for the Medicare services it provided, it may be eligible for an accelerated or advance payment pursuant to the Medicare accelerated payment program. As discussed in Note 1, the COVID Acts revised the Medicare accelerated payment program in an attempt to disburse payments to hospitals more quickly to mitigate shortfalls due to delays in non-essential procedures, as well as staffing and billing disruptions. During the year ended December 31, 2020, our Hospital Operations segment received advance payments from the Medicare accelerated payment program following expansion of the program under the COVID Acts. These advance payments are recorded as contract liabilities in the accompanying Consolidated Balance Sheet at December 31, 2020.

The opening and closing balances of contract assets for our Hospital Operations segment are as follows:


			Contract Liability –		Contract Liability –
			Current		Long-term
	Contract Assets		Advances from Medicare		Advances from Medicare
December 31, 2019	$	170	$	—	$	—
December 31, 2020	208		510		819
Increase	$	38	$	510	$	819

December 31, 2018	$	169	$	—	$	—
December 31, 2019	170		—		—
Increase	$	1	$	—	$	—

Ambulatory Care Segment

During the year ended December 31, 2020, our Ambulatory Care segment also received advance payments from the Medicare accelerated payment program following expansion of the program under the COVID Acts. At December 31, 2020, contract liabilities and contract liabilities – long-term in the accompanying Balance Sheet included $51 million and $62 million

of Medicare advance payments received by our unconsolidated affiliates for whom we provide cash management services. The opening and closing balances of contract liabilities for our Ambulatory Care segment are as follows:


	Contract Liability –		Contract Liability –
	Current		Long-term
	Advances from Medicare		Advances from Medicare
December 31, 2019	$	—	$	—
December 31, 2020	93		83
Increase	$	93	$	83

December 31, 2018	$	—	$	—
December 31, 2019	—		—
Increase	$	—	$	—

Conifer Segment

Conifer enters into contracts with customers to provide revenue cycle management and other services, such as value‑based care, consulting and project services. The payment terms and conditions in our customer contracts vary. In some cases, customers are invoiced in advance and (for other than fixed-price fee arrangements) a true-up to the actual fee is included on a subsequent invoice. In other cases, payment is due in arrears. In addition, some contracts contain performance incentives, penalties and other forms of variable consideration. When the timing of Conifer’s delivery of services is different from the timing of payments made by the customers, Conifer recognizes either unbilled revenue (performance precedes contractual right to invoice the customer) or deferred revenue (customer payment precedes Conifer service performance). In the following table, customers that prepay prior to obtaining control/benefit of the service are represented by deferred contract revenue until the performance obligations are satisfied. Unbilled revenue represents arrangements in which Conifer has provided services to and the customer has obtained control/benefit of services prior to the contractual invoice date. Contracts with payment in arrears are recognized as receivables in the month the service is performed.

The opening and closing balances of Conifer’s receivables, contract asset, and current and long-term contract liabilities are as follows:


					Contract Liability –		Contract Liability –
			Contract Asset –		Current		Long-Term
	Receivables		Unbilled Revenue		Deferred Revenue		Deferred Revenue
December 31, 2019	$	26	$	11	$	61	$	18
December 31, 2020	56		20		56		16
Increase/(decrease)	$	30	$	9	$	(5)	$	(2)

December 31, 2018	$	42	$	11	$	61	$	20
December 31, 2019	26		11		61		18
Decrease	$	(16)	$	—	$	—	$	(2)

The difference between the opening and closing balances of Conifer’s contract assets and contract liabilities are primarily related to prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are typically not distinct and are, therefore, recognized over the performance obligation period to which they relate. Our Conifer segment’s receivables and contract assets are reported as part of other current assets in our accompanying Consolidated Balance Sheets, and our Conifer segment’s current and long-term contract liabilities are reported as part of contract liabilities and contract liabilities – long-term, respectively, in our accompanying Consolidated Balance Sheets.

In both of the years ended December 31, 2020 and 2019, Conifer recognized $61 million of revenue that was included in the opening current deferred revenue liability. This revenue consists primarily of prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are recognized over the services period.

Contract CostsWe have elected to apply the practical expedient provided by FASB ASC 340-40-25-4 and expense as incurred the incremental customer contract acquisition costs for contracts in which the amortization period of the asset is one year or less. However, incremental costs incurred to obtain and fulfill customer contracts for which the amortization period of the asset is longer than one year, which consist primarily of Conifer deferred contract setup costs, are capitalized and amortized on a straight-line basis over the lesser of their estimated useful lives or the term of the related contract. During the years ended December 31, 2020, 2019 and 2018, we recognized amortization expense of $4 million, $5 million and $11 million, respectively. At December 31, 2020 and 2019, the unamortized customer contract costs were $24 million and $25 million, respectively, and are presented as part of investments and other assets in the accompanying Consolidated Balance Sheets.NET OPERATING REVENUES

Net operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to health systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities.

The table below shows our sources of net operating revenues less implicit price concessions from continuing operations:


	Years Ended December 31,
	2020		2019		2018
Hospital Operations:
Net patient service revenues from hospitals and related outpatient facilities:
Medicare	$	2,695	$	2,888	$	2,882
Medicaid	1,081		1,193		1,294
Managed care	9,022		9,516		9,213
Uninsured	162		92		96
Indemnity and other	658		679		596
Total	13,618		14,368		14,081
Other revenues(1)	1,172		1,154		1,204
Hospital Operations total prior to inter-segment eliminations	14,790		15,522		15,285
Ambulatory Care	2,072		2,158		2,085
Conifer	1,306		1,372		1,533
Inter-segment eliminations	(528)		(573)		(590)
Net operating revenues	$	17,640	$	18,479	$	18,313



(1)			Primarily physician practices revenues.

Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the years ended December 31, 2020, 2019 and 2018 by $6 million, $27 million and $24 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.

The table below shows the composition of net operating revenues for our Ambulatory Care segment:


	Years Ended December 31,
	2020		2019		2018
Net patient service revenues	$	1,960	$	2,040	$	1,965
Management fees	86		95		92
Revenue from other sources	26		23		28
Net operating revenues	$	2,072	$	2,158	$	2,085

The table below shows the composition of net operating revenues for our Conifer segment:


	Years Ended December 31,
	2020		2019		2018
Revenue cycle services – Tenet	$	514	$	556	$	568
Revenue cycle services – other customers	700		713		855
Other services – Tenet	14		17		22
Other services – other customers	78		86		88
Net operating revenues	$	1,306	$	1,372	$	1,533

Other services represented approximately 7% of Conifer’s revenue for the year ended December 31, 2020 and include value‑based care services, consulting services and other client-defined projects.

Performance Obligations

The following table includes Conifer’s revenue that is expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, at the end of the reporting period. The amounts in the table primarily consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume- or contingency-based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed-fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends December 31, 2032.


			Years Ending December 31,										Later Years
	Total		2021		2022		2023		2024		2025
Performance obligations	$	6,650	$	594	$	593	$	593	$	541	$	541	$	3,788

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

ASSETS AND LIABILITIES HELD FOR SALE

12 Months Ended

Dec. 31, 2020

Discontinued Operation, Additional Disclosures [Abstract]

ASSETS AND LIABILITIES HELD FOR SALE

In December 2020, we entered into a definitive agreement to sell the majority of our urgent care centers operated under the MedPost and CareSpot brands from our Hospital Operations and Ambulatory Care segments. As a result, we have classified these assets, totaling $126 million, as “assets held for sale” in current assets and the related liabilities, totaling $70 million, as “liabilities held for sale” in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2020. We expect to complete the sale of these facilities in the first quarter of 2021.

In the third quarter of 2020, a building we own in the Philadelphia area met the criteria to be classified as held for sale. As a result, we have classified the building and related assets totaling $14 million as “assets held for sale” in current assets in the accompanying Consolidated Balance Sheet at December 31, 2020.

Assets and liabilities classified as held for sale at December 31, 2020 were comprised of the following:


Accounts receivable	$	18
Other current assets	5
Investments and other long-term assets	39
Property and equipment	39

Goodwill	39

Current liabilities	(34)
Long-term liabilities	(36)
Net assets held for sale	$	70

In the fourth quarter of 2019, we reached a definitive agreement to sell two of our hospitals and other operations in the Memphis area and we classified the related assets and liabilities as held for sale in our consolidated balance sheet at December 31, 2019. Following action by the U.S. Federal Trade Commission to challenge the proposed transaction, we determined in December 2020 that we no longer intend to pursue the sale of the hospitals and related operations. These assets and liabilities were removed from assets and liabilities held for sale and are classified as held and used in the accompanying Consolidated Balance Sheet at December 31, 2020.

In the three months ended March 31, 2019, we completed the sale of three of our hospitals in the Chicago area, as well as other operations affiliated with the hospitals; these assets and liabilities were classified as held for sale beginning in the three months ended December 31, 2017. Related to this transaction, we recorded loss on sale of $5 million and $14 million in the years ended December 31, 2020 and December 31, 2019, respectively, and an impairment charge of $24 million in the year ended December 31, 2018 for the write-down of the assets held for sale to their estimated fair value, less estimated costs to sell.

During the year ended December 31, 2019, we recognized an impairment charge of $26 million for the write-down of assets held for sale to their estimated fair value, less estimated costs to sell, as a result of planned divestitures. No impairment charge was incurred during the year ended December 31, 2020 related to our assets held for sale.

The following table provides information on significant components of our business that have been recently disposed of or are classified as held for sale at December 31, 2020:


	Years Ended December 31,
	2020		2019		2018
Significant disposals:
Income (loss) from continuing operations, before income taxes
Chicago area (includes a $5 million loss on sale in the 2020 period, $14 million loss on sale in the 2019 period, and $24 million of impairment charges in the 2018 period) )	$	3	$	(19)	$	(41)
Total	$	3	$	(19)	$	(41)

IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS	12 Months Ended
	Dec. 31, 2020
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 2020, 2019 and 2018 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, 2020, our continuing operations consisted of three reportable segments, Hospital Operations, 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, 2020. 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, such as the establishment of offshore support operations at our GBC in The Republic of the Philippines that we began in the year ended December 31, 2019. Certain restructuring and acquisition-related costs are based on estimates. Changes in estimates are recognized as they occur. Year Ended December 31, 2020 During the year ended December 31, 2020, we recorded impairment and restructuring charges and acquisition-related costs of $290 million, consisting of $92 million of impairment charges, $184 million of restructuring charges and $14 million of acquisition-related costs. Impairment charges include $76 million for the write-down of hospital buildings to their estimated fair values in one of our markets, which assets are part of our Hospital Operations segment. Material adverse trends in our recent estimates of future undiscounted cash flows of the hospitals indicated the aggregate 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 included 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 it to the aggregate carrying value of those assets. Because the fair value estimates were lower than the aggregate carrying value of the long-lived assets, an impairment charge was recorded for the difference in the amounts. The aggregate carrying value of the hospitals’ assets held and used for which impairment charges were recorded was $483 million at December 31, 2020. We also recorded $16 million of other impairment charges. Restructuring charges consisted of $65 million of employee severance costs, $50 million related to the transitioning of various administrative functions to our GBC, $23 million of charges due to the termination of the USPI management equity plan, $14 million of contract and lease termination fees, and $32 million of other restructuring costs. Acquisition-related costs consisted of $14 million of transaction costs. Our impairment charges for the year ended December 31, 2020 were comprised of $79 million from our Hospital Operations segment, $12 million from our Ambulatory Care segment and $1 million from our Conifer segment. Year Ended December 31, 2019 During the year ended December 31, 2019, we recorded impairment and restructuring charges and acquisition-related costs of $185 million, consisting of $42 million of impairment charges, $137 million of restructuring charges and $6 million of acquisition-related costs. Impairment charges consisted of $26 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for certain of our Memphis-area facilities and $16 million of other impairment charges. Of the total impairment charges recognized for the year ended December 31, 2019, $31 million related to our Hospital Operations segment, $6 million related to our Ambulatory Care segment, and $5 million related to our Conifer segment. Restructuring charges consisted of $57 million of employee severance costs, $28 million related to the transitioning of various administrative functions to our GBC, $6 million of contract and lease termination fees, and $46 million of other restructuring costs. Acquisition-related costs consisted of $6 million of transaction costs. Year Ended December 31, 2018 During the year ended December 31, 2018, we recorded impairment and restructuring charges and acquisition-related costs of $209 million, consisting of $77 million of impairment charges, $115 million of restructuring charges and $17 million of acquisition-related costs. Impairment charges included $40 million for the write-down of buildings and other long-lived assets to their estimated fair values at two hospitals. Material adverse trends in our then 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 included 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 $130 million at December 31, 2018 after recording the impairment charges. We also recorded $24 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for certain of our Chicago-area facilities, $9 million of charges to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for Aspen and $4 million of other impairment charges. Of the total impairment charges recognized for the year ended December 31, 2018, $67 million related to our Hospital Operations segment, $9 million related to our Ambulatory Care segment, and $1 million related to our Conifer segment. Restructuring charges consisted of $68 million of employee severance costs, $17 million of contract and lease termination fees, and $30 million of other restructuring costs. Acquisition-related costs consisted of $10 million of transaction costs and $7 million of acquisition integration charges.

LEASES

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

LEASES

The following table presents the components of our right-of-use assets and liabilities related to leases and their classification in our Consolidated Balance Sheet at December 31, 2020 and 2019:


Component of Lease Balances	Classification in Consolidated Balance Sheet	December 31, 2020		December 31, 2019
Assets:
Operating lease assets	Investments and other assets	$	1,062	$	912
Finance lease assets	Property and equipment, at cost, less accumulated depreciation and amortization	345		407
Total leased assets		$	1,407	$	1,319

Liabilities:
Operating lease liabilities:
Current	Other current liabilities	$	188	$	159
Long-term	Other long-term liabilities	999		858
Total operating lease liabilities		1,187		1,017
Finance lease liabilities:
Current	Current portion of long-term debt	122		143
Long-term	Long-term debt, net of current portion	151		182
Total finance lease liabilities		273		325
Total lease liabilities		$	1,460	$	1,342

The following table presents the components of our lease expense and their classification in our Consolidated Statement of Operations for the years ended December 31:


	Classification on
Component of Lease Expense	Consolidated Statements of Operations	2020		2019
Operating lease expense	Other operating expenses, net	$	247	$	211
Finance lease expense:
Amortization of leased assets	Depreciation and amortization	86		85
Interest on lease liabilities	Interest expense	11		15
Total finance lease expense		97		100
Variable and short term-lease expense	Other operating expenses, net	156		133
Total lease expense		$	500	$	444

Rental expense under operating leases, including short-term leases, was $326 million in the year ended December 31, 2018. Included in rental expense for the year ended December 31, 2018 was sublease income of $11 million, which was recorded as a reduction of rental expense.

The weighted-average lease terms and discount rates for operating and finance leases are presented in the following table for the years ended December 31:


	2020		2019
Weighted-average remaining lease term (years)
Operating leases	7.9		7.8
Finance leases	5.7		5.4

Weighted-average discount rate
Operating leases	5.5	%	5.6	%
Finance leases	5.6	%	5.5	%

Cash flow and other information related to leases is included in the following table years ended December 31:


	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	239	$	197
Operating cash outflows from finance leases	$	15	$	18
Financing cash outflows from finance leases	$	154	$	151

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	304	$	249
Finance leases	$	98	$	141

Future maturities of lease liabilities at December 31, 2020 are presented in the following table:


	Operating Leases		Finance Leases		Total
2021	$	231	$	133	$	364
2022	212		73		285
2023	191		29		220
2024	168		11		179
2025	141		9		150
Later years	544		87		631
Total lease payments	1,487		342		1,829
Less: Imputed interest	300		69		369
Total lease obligations	1,187		273		1,460
Less: Current obligations	188		122		310
Long-term lease obligations	$	999	$	151	$	1,150

In December 2020, we completed the sale and leaseback of a medical office building located in Hialeah, FL. The sale generated net proceeds of $60 million and a gain of $19 million, which is reflected in other operating expenses in the

accompanying Consolidated Statements of Operations at December 31, 2020. The lease agreement for the medical office building is for a period of 12 years and includes four sequential renewal options, each for a period of five years.

LEASES

The following table presents the components of our right-of-use assets and liabilities related to leases and their classification in our Consolidated Balance Sheet at December 31, 2020 and 2019:


Component of Lease Balances	Classification in Consolidated Balance Sheet	December 31, 2020		December 31, 2019
Assets:
Operating lease assets	Investments and other assets	$	1,062	$	912
Finance lease assets	Property and equipment, at cost, less accumulated depreciation and amortization	345		407
Total leased assets		$	1,407	$	1,319

Liabilities:
Operating lease liabilities:
Current	Other current liabilities	$	188	$	159
Long-term	Other long-term liabilities	999		858
Total operating lease liabilities		1,187		1,017
Finance lease liabilities:
Current	Current portion of long-term debt	122		143
Long-term	Long-term debt, net of current portion	151		182
Total finance lease liabilities		273		325
Total lease liabilities		$	1,460	$	1,342

The following table presents the components of our lease expense and their classification in our Consolidated Statement of Operations for the years ended December 31:


	Classification on
Component of Lease Expense	Consolidated Statements of Operations	2020		2019
Operating lease expense	Other operating expenses, net	$	247	$	211
Finance lease expense:
Amortization of leased assets	Depreciation and amortization	86		85
Interest on lease liabilities	Interest expense	11		15
Total finance lease expense		97		100
Variable and short term-lease expense	Other operating expenses, net	156		133
Total lease expense		$	500	$	444

Rental expense under operating leases, including short-term leases, was $326 million in the year ended December 31, 2018. Included in rental expense for the year ended December 31, 2018 was sublease income of $11 million, which was recorded as a reduction of rental expense.

The weighted-average lease terms and discount rates for operating and finance leases are presented in the following table for the years ended December 31:


	2020		2019
Weighted-average remaining lease term (years)
Operating leases	7.9		7.8
Finance leases	5.7		5.4

Weighted-average discount rate
Operating leases	5.5	%	5.6	%
Finance leases	5.6	%	5.5	%

Cash flow and other information related to leases is included in the following table years ended December 31:


	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	239	$	197
Operating cash outflows from finance leases	$	15	$	18
Financing cash outflows from finance leases	$	154	$	151

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	304	$	249
Finance leases	$	98	$	141

Future maturities of lease liabilities at December 31, 2020 are presented in the following table:


	Operating Leases		Finance Leases		Total
2021	$	231	$	133	$	364
2022	212		73		285
2023	191		29		220
2024	168		11		179
2025	141		9		150
Later years	544		87		631
Total lease payments	1,487		342		1,829
Less: Imputed interest	300		69		369
Total lease obligations	1,187		273		1,460
Less: Current obligations	188		122		310
Long-term lease obligations	$	999	$	151	$	1,150

In December 2020, we completed the sale and leaseback of a medical office building located in Hialeah, FL. The sale generated net proceeds of $60 million and a gain of $19 million, which is reflected in other operating expenses in the

accompanying Consolidated Statements of Operations at December 31, 2020. The lease agreement for the medical office building is for a period of 12 years and includes four sequential renewal options, each for a period of five years.

LONG-TERM DEBT

12 Months Ended

Dec. 31, 2020

Long-term Debt and Lease Obligation [Abstract]

LONG-TERM DEBT

The table below shows our long-term debt as of December 31, 2020 and 2019:


	December 31, 2020		December 31, 2019
Senior unsecured notes:
8.125% due 2022	$	—	$	2,800
6.750% due 2023	1,872		1,872
7.000% due 2025	478		478
6.125% due 2028	2,500		—
6.875% due 2031	362		362
Senior secured first lien notes:
4.625% due 2024	1,870		1,870
4.625% due 2024	600		600
7.500% due 2025	700		—
4.875% due 2026	2,100		2,100
5.125% due 2027	1,500		1,500
4.625% due 2028	600		—
Senior secured second lien notes:
5.125% due 2025	1,410		1,410
6.250% due 2027	1,500		1,500
Finance leases, mortgage and other notes	403		445
Unamortized issue costs and note discounts	(176)		(186)
Total long-term debt	15,719		14,751
Less current portion	145		171
Long-term debt, net of current portion	$	15,574	$	14,580

Credit Agreement

We have a senior secured revolving credit facility that provides for revolving loans in an aggregate principal amount of up to $1.9 billion with a $200 million subfacility for standby letters of credit. We amended our credit agreement (as amended, the “Credit Agreement”) in April 2020 to, among other things, (i) increase the aggregate revolving credit commitments from the previous limit of $1.5 billion to $1.9 billion, subject to borrowing availability, and (ii) increase the advance rate and raise limits on certain eligible accounts receivable in the calculation of the borrowing base, in each case, for an incremental period of 364 days (the “incremental period”). At December 31, 2020, we had no cash borrowings outstanding under the Credit Agreement, and we had less than $1 million of standby letters of credit outstanding. Based on our eligible receivables, $1.9 billion was available for borrowing under the revolving credit facility at December 31, 2020.

The Credit Agreement continues to have a scheduled maturity date of September 12, 2024, and obligations under the Credit Agreement continue to be guaranteed by substantially all of our domestic wholly owned hospital subsidiaries and secured by a first-priority lien on the eligible inventory and accounts receivable owned by us and the subsidiary guarantors, including receivables for Medicaid supplemental payments.

Outstanding revolving loans accrued interest during a one-month initial period following the April 2020 amendment at the rate of either (i) a base rate plus a margin of 0.75% per annum or (ii) the London Interbank Offered Rate (“LIBOR”) plus a margin of 1.75% per annum. Thereafter, outstanding revolving loans accrue interest at either (i) a base rate plus a margin ranging from 0.50% to 1.00% per annum during the incremental period and 0.25% to 0.75% per annum thereafter, or (ii) LIBOR plus a margin ranging from 1.50% to 2.00% per annum during the incremental period and 1.25% to 1.75% per annum thereafter, in each case based on available credit. An unused commitment fee payable on the undrawn portion of the revolving loans ranges from 0.25% to 0.375% per annum based on available credit. Our borrowing availability is based on a specified percentage of eligible inventory and accounts receivable, including self-pay accounts.

Letter of Credit Facility

In March 2020, we amended our letter of credit facility (as amended, the “LC Facility”) to extend the scheduled maturity date of the LC Facility from March 7, 2021 to September 12, 2024 and to increase the aggregate principal amount of standby and documentary letters of credit that from time to time may be issued thereunder from $180 million to $200 million. On July 29, 2020, we further amended the LC Facility to increase the maximum secured debt covenant from 4.00 to 1.00 on a quarterly basis up to 6.00 to 1.00 for the quarter ending March 31, 2021, which maximum ratio will step down on a quarterly basis through the quarter ending December 31, 2021. 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.

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 of 0.50% per annum. An unused commitment fee is payable at an initial rate of 0.25% per annum with a step up to 0.375% per annum should our secured debt-to-EBITDA ratio equal or exceed 3.00 to 1.00 at the end of any fiscal quarter. A fee on the aggregate outstanding amount of issued but undrawn letters of credit accrues at a rate of 1.50% per annum. An issuance fee equal to 0.125% per annum of the aggregate face amount of each outstanding letter of credit is payable to the account of the issuer of the related letter of credit. At December 31, 2020, we were in compliance with all covenants and conditions in our LC Facility. At December 31, 2020, we had $88 million of standby letters of credit outstanding under the LC Facility.

Senior Secured Notes and Senior Unsecured Notes

On September 16, 2020, we sold $2.5 billion aggregate principal amount of 6.125% senior notes, which will mature on October 1, 2028 (the “2028 Senior Notes”). We will pay interest on the 2028 Senior Notes semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2021. The proceeds from the sale of the 2028 Senior Notes were used, after payment of fees and expenses, together with cash on hand, to finance the redemption of all $2.556 billion aggregate principal amount then outstanding of our 8.125% senior unsecured notes due 2022 (the “2022 Senior Notes”) for approximately $2.843 billion. In connection with the redemption, we recorded a loss from early extinguishment of debt of approximately $305 million in the three months ended September 30, 2020, primarily related to the difference between the purchase price and the par value of the 2022 Senior Notes, as well as the write-off of associated unamortized issuance costs.

In August and July 2020, we purchased approximately $109 million aggregate principal amount of our 2022 Senior Notes for approximately $114 million. In connection with the purchases, we recorded losses from early extinguishment of debt totaling $7 million in the three months ended September 30, 2020, primarily related to the differences between the purchase prices and the par values of the 2022 Senior Notes, as well as the write-offs of associated unamortized issuance costs.

In June 2020, we purchased approximately $135 million aggregate principal amount of our 2022 Senior Notes for approximately $142 million. In connection with the purchase, we recorded a loss from early extinguishment of debt of approximately $8 million in the three months ended June 30, 2020, primarily related to the difference between the purchase price and the par value of the 2022 Senior Notes, as well as the write-off of associated unamortized issuance costs.

On June 16, 2020, we sold $600 million aggregate principal amount of 4.625% senior secured first lien notes, which will mature on June 15, 2028 (the “2028 Senior Secured First Lien Notes”). We will pay interest on the 2028 Senior Secured First Lien Notes semi-annually in arrears on June 15 and December 15 of each year, which payments commenced on December 15, 2020.

On April 7, 2020, we sold $700 million aggregate principal amount of 7.500% senior secured first lien notes, which will mature on April 1, 2025 (the “2025 Senior Secured First Lien Notes”). We will pay interest on the 2025 Senior Secured First Lien Notes semi-annually in arrears on April 1 and October 1 of each year, which payments commenced on October 1, 2020. A portion of the proceeds from the sale of the 2025 Senior Secured First Lien Notes was used, after payment of fees and expenses, to repay the $500 million aggregate principal amount of borrowings outstanding under our Credit Agreement as of March 31, 2020.

On August 26, 2019, we sold $600 million aggregate principal amount of 4.625% senior secured first lien notes, which will mature on September 1, 2024 (the “2024 Senior Secured First Lien Notes”), $2.1 billion aggregate principal amount of 4.875% senior secured first lien notes, which will mature on January 1, 2026 (the “2026 Senior Secured First Lien Notes”) and $1.5 billion aggregate principal amount of 5.125% senior secured first lien notes, which will mature on November 1, 2027 (the “2027 Senior Secured First Lien Notes”). We will pay interest on the 2024 Senior Secured First Lien Notes semi-annually in arrears on March 1 and September 1 of each year, which payments commenced on March 1, 2020. We will pay interest on the

2026 Senior Secured First Lien Notes semi-annually in arrears on January 1 and July 1 of each year, which payments commenced on January 1, 2020. We will pay interest on the 2027 Senior Secured First Lien Notes semi-annually in arrears on May 1 and November 1 of each year, which payments commenced on May 1, 2020. The proceeds from the sales of these notes were used, after payment of fees and expenses, together with cash on hand and borrowings under our senior secured revolving credit facility, to fund the redemptions of all $500 million aggregate principal amount of our outstanding 4.750% senior secured first lien notes due 2020, all $1.8 billion aggregate principal amount of our outstanding 6.000% senior secured first lien notes due 2020, all $850 million aggregate principal amount of our outstanding 4.500% senior secured first lien notes due 2021 and all $1.05 billion aggregate principal amount of our outstanding 4.375% senior secured first lien notes due 2021. In connection with the redemptions, we recorded a loss from early extinguishment of debt of approximately $180 million in the three months ended September 30, 2019, primarily related to the difference between the redemption prices and the par values of the notes, as well as the write-off of the associated unamortized issuance costs.

On February 5, 2019, we sold $1.5 billion aggregate principal amount of 6.250% senior secured second lien notes, which will mature on February 1, 2027 (the “2027 Senior Secured Second Lien Notes”). We will pay interest on the 2027 Senior Secured Second Lien Notes semi-annually in arrears on February 1 and August 1 of each year, which payments commenced on August 1, 2019. The proceeds from the sale of the 2027 Senior Secured Second Lien Notes were used, after payment of fees and expenses, together with cash on hand and borrowings under our senior secured revolving credit facility, to fund the redemption of all $300 million aggregate principal amount of our outstanding 6.750% senior notes due 2020 and all $750 million aggregate principal amount of our outstanding 7.500% senior secured second lien notes due 2022, as well as the repayment upon maturity of all $468 million aggregate principal amount of our outstanding 5.500% senior unsecured notes due March 1, 2019. In connection with the redemptions, we recorded a loss from early extinguishment of debt of approximately $47 million in the three months ended March 31, 2019, primarily related to the difference between the redemption prices and the par values of the notes, as well as the write-off of the associated unamortized issuance costs.

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 $150 million, as well as limits on debt, asset sales and prepayments of certain other 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 $150 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 and any outstanding borrowings under our Credit Agreement 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.

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, including finance lease obligations, as of December 31, 2020 are as follows:


			Years Ending December 31,										Later Years
	Total		2021		2022		2023		2024		2025		Later Years
Long-term debt, including finance lease obligations	$	15,895	$	145	$	100	$	1,925	$	2,494	$	2,607	$	8,624

GUARANTEES	12 Months Ended
GUARANTEES	Dec. 31, 2020
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, 2020, 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 $145 million. We had a total liability of $114 million recorded for these guarantees included in other current liabilities at December 31, 2020. At December 31, 2020, 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 $77 million. Of the total, $10 million relates to the obligations of consolidated subsidiaries, which obligations are recorded in the accompanying Consolidated Balance Sheet at December 31, 2020.

EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

EMPLOYEE BENEFIT PLANS

Share-Based Compensation Plans

We have granted options and restricted stock units to certain of our employees and directors pursuant to our stock incentive plans. 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 in the future, and the fair value of the restricted stock unit is based on our share price on the grant date. Typically, options and time-based restricted stock units vest one-third on each of the first three anniversary dates of the grant; however, certain special retention awards may have different vesting terms. In addition, restricted stock unit grants we make to our non-employee directors as part of their annual compensation vest immediately and are settled on the third anniversary of the date of grant, while initial grants to directors vest immediately but settle upon separation from the board.

We also grant performance-based options and performance-based restricted stock units that vest subject to the achievement of specified performance goals within a specified time frame. These awards generally vest and are settled on the third anniversary of the grant date with payouts ranging from 0% to 200% of the target value depending upon the level of achievement. For certain of our performance-based awards, the number of options or restricted stock units that ultimately vest is subject to adjustment based on the achievement of a market-based condition. The fair value of these awards is estimated using a discrete model to analyze the fair value of the subject shares. The discrete model utilizes multiple stock paths, through the use of a Monte Carlo simulation, which paths are then analyzed to determine the fair value of the subject shares.

At December 31, 2020, assuming outstanding performance-based restricted stock units and options for which performance has not yet been determined will achieve target performance, approximately 6.2 million shares of common stock were available under our 2019 Stock Incentive Plan for future stock option grants and other equity incentive awards, including restricted stock units. The accompanying Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 include $44 million, $42 million and $46 million, respectively, of pre-tax compensation costs related to our stock‑based compensation arrangements.

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, 2020. 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, 2020
	(In Thousands)					(In Millions)
Stock Options:
February 27, 2019	188	$	28.26	$	12.49	$	1
February 28, 2018	398	$	20.60	$	8.83	1
Restricted Stock Units:
May 29, 2020	103			$	15.71	2
February 26, 2020	1,038			$	27.80	9
January 19, 2020	24			$	37.14	1
February 27, 2019	790			$	28.26	9
January 31, 2019	318			$	21.99	2
March 29, 2018	293			$	24.25	1
February 28, 2018	160			$	20.60	1
Other grants						5
USPI Management Equity Plan	2,025			$	34.13	12
						$	44

Pursuant to the terms of our stock-based compensation plans, awards granted under the plan 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, 2020, 2019 and 2018:


	Options	Wtd. Avg. Exercise Price Per Share		Aggregate Intrinsic Value		Wtd. Avg Remaining Life
				(In Millions)
Outstanding at December 31, 2017	2,564,822	$	20.35
Granted	635,196	21.33
Exercised	(619,849)	18.19
Forfeited/Expired	(317,426)	35.30
Outstanding at December 31, 2018	2,262,743	$	19.12
Granted	230,713	28.28
Exercised	(306,427)	18.05
Forfeited/Expired	(226,037)	20.21
Outstanding at December 31, 2019	1,960,992	$	20.24

Exercised	(987,471)	17.96
Forfeited/Expired	(60,990)	23.28
Outstanding at December 31, 2020	912,531	$	22.51	$	16	6.4 years
Vested and expected to vest at December 31, 2020	912,531	$	22.51	$	16	6.4 years
Exercisable at December 31, 2020	282,652	$	19.80	$	6	5.6 years

There were 987,471 stock options exercised during the year ended December 31, 2020 with an aggregated intrinsic value of approximately $15 million, and 306,427 stock options exercised in 2019 with an aggregate intrinsic value of approximately $3 million.

There were no performance-based stock options granted in the year ended December 31, 2020, and 230,713 performance-based stock options granted in the year ended 2019. On March 29, 2019, we granted an aggregate of 7,862 performance-based stock options to a senior officer. The options will all vest on the third anniversary of the grant date because, in the three months ended March 31, 2020, the requirement that our stock close at a price of at least $36.05 (a 25% premium above the March 29, 2019 grant-date closing stock price of $28.84) for at least 20 consecutive trading days within three years of the grant date was met; these options will expire on the tenth anniversary of the grant date. On February 27, 2019, we granted to certain of our senior officers an aggregate of 222,851 performance-based stock options. The options will all vest on the third anniversary of the grant date because, in the three months ended March 31, 2020, the requirement that our stock close at a price of at least $35.33 (a 25% premium above the February 27, 2019 grant-date closing stock price of $28.26) for at least 20 consecutive trading days within three years of the grant date was met; these options will expire on the tenth anniversary of the grant date.

At December 31, 2020, there were $1 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 1.0 years.

The weighted average estimated fair value of stock options we granted during the year ended December 31, 2019 was $12.50 per share. These fair values were calculated based on each grant date, using a Monte Carlo simulation with the following assumptions:


						February 27,
						2019
Expected volatility						48%
Expected dividend yield						0%
Expected life						6.2 years
Expected forfeiture rate						0%
Risk-free interest rate						2.53%

The expected volatility used for the 2019 Monte Carlo simulations incorporates historical volatility based on an analysis of historical prices of our stock. The expected volatility reflects the historical volatility for a duration consistent with the expected life of the options; it does not consider the implied volatility from open-market exchanged options due to the limited trading activity and the transient nature of factors impacting our stock price volatility. The historical share-price volatility for 2019 excludes the movements in our stock price for the period from August 15, 2017 through November 30, 2017 due to impact that the announcement of the departure of certain board members and officers, as well as reports that we were

exploring a potential sale of the company, had on our stock price during that time. The risk-free interest rates are based on zero‑coupon United States Treasury yields in effect at the date of grant consistent with the expected exercise time frames.

The following table summarizes information about our outstanding stock options at December 31, 2020:


	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Options	Wtd. Avg. Remaining Contractual Life	Wtd. Avg. Exercise Price		Number of Options	Wtd. Avg. Exercise Price
$16.43 to $19.759	245,152	6.2 years	$	18.99	245,152	$	18.99
$19.76 to $35.430	667,379	6.5 years	23.80		37,500	25.08
	912,531	6.4 years	$	22.51	282,652	$	19.80

As of December 31, 2020, 68.8% of all our outstanding options were held by current employees and 31.2% were held by former employees. Of our outstanding options, 100% were in-the-money, that is, they had exercise price less than the $39.93 market price of our common stock on December 31, 2020.


	In-the-Money Options				Out-of-the-Money Options				All Options
	Outstanding		% of Total		Outstanding		% of Total		Outstanding		% of Total
Current employees	628,046		68.8	%	—		—	%	628,046		68.8	%
Former employees	284,485		31.2	%	—		—	%	284,485		31.2	%
Totals	912,531		100.0	%	—		—	%	912,531		100.0	%
% of all outstanding options	100.0	%			—	%			100.0	%

Restricted Stock Units

The following table summarizes restricted stock unit activity during the years ended December 31, 2020, 2019 and 2018:


	Restricted Stock Units	Weighted Average Grant Date Fair Value Per Unit
Unvested at December 31, 2017	2,253,988	$	35.20
Granted	765,184	24.74
Vested	(995,331)	32.63
Forfeited	(139,711)	36.01
Unvested at December 31, 2018	1,884,130	$	32.25
Granted	1,481,021	27.87
Vested	(1,562,191)	36.45
Forfeited	(339,461)	24.74
Unvested at December 31, 2019	1,463,499	$	25.08
Granted	1,767,730	27.72
Vested	(825,727)	25.66
Forfeited	(310,296)	32.09
Unvested at December 31, 2020	2,095,206	$	25.87

In the year ended December 31, 2020, we granted an aggregate of 1,767,730 restricted stock units. Of these, 607,198 will vest and be settled ratably over a three-year period from the grant date, 104,167 will vest and be settled ratably over a four-year period from the grant date, 359,713 will vest and be settled ratably over 11 quarterly periods from the grant date, and 13,805 will vest and be settled on the third anniversary of the grant date. The vesting of 579,413 performance-based restricted stock units we granted in 2020 is contingent on our achievement of specified performance goals for the years 2020 to 2023. In addition, in May 2020, we made an annual grant of 103,434 restricted stock units to our non-employee directors for the 2020-2021 board service year.

In the year ended December 31, 2019, we granted an aggregate of 1,481,021 restricted stock units. Of these, 337,848 will vest and be settled ratably over a three-year period from the grant date, 566,172 will vest and be settled ratably over nine quarterly periods from the grant date, and 353,354 will vest and be settled on the third anniversary of the grant date. In addition, in May 2019, we made an annual grant of 100,444 restricted stock units to our non-employee directors for the 2019-2020 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 two new members, one in August 2019 and one in October 2019. We made initial grants totaling 5,569 restricted stock units to these directors, as well as prorated annual grants totaling 13,257 restricted stock units. Both the initial grants and the annual grants vested immediately, however, the initial

grants settle upon separation from the board, while the annual grants settle on the third anniversary of the grant date. We also granted 7,427 additional restricted stock units that vested and settled immediately as a result of our level of achievement with respect to a performance goal on a 2013 grant and 96,950 additional restricted stock units as a result of our level of achievement with respect to a performance goal on 2014 grants.

As of December 31, 2020, there were $31 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 1.7 years.

USPI Management Equity Plan

2015 USPI Management Equity Plan

In 2015, USPI adopted the USPI Holding Company, Inc. 2015 Stock Incentive Plan (“2015 USPI Management Equity Plan”) under which it granted non-qualified options to purchase nonvoting shares of USPI’s outstanding common stock to eligible plan participants, allowing the recipient to participate in incremental growth in the value of USPI from the applicable grant date. Under the 2015 USPI Management Equity Plan, the total pool of options consisted of approximately 10% of USPI’s fully diluted outstanding common stock. Options had an exercise price equal to the estimated fair market value of USPI’s common stock on the date of grant. The option awards were structured such that they had a three or four year vesting period in which half of the award vested in equal pro-rata amounts over the applicable vesting period and the remaining half vested at the end of the applicable three or four year period. Any unvested awards were forfeited upon the participant’s termination of service with USPI, and vested options were required to have been exercised within 90 days of termination. Once an award was exercised and the requisite holding period met, the participant was eligible to sell the underlying shares to USPI at their estimated fair market value. Payment for USPI’s purchase of any eligible nonvoting common shares could be made in cash or in shares of Tenet’s common stock.

In February 2020, the 2015 USPI Management Equity Plan and all unvested options granted under the plan were terminated in accordance with the terms of the plan. USPI repurchased all vested options and all shares of USPI stock acquired upon exercise of an option for approximately $35 million.

2020 USPI Management Equity Plan

In February 2020, USPI adopted the USPI Holding Company, Inc. Restricted Stock Plan (“2020 USPI Management Equity Plan”) to replace the terminated 2015 USPI Management Equity Plan. Restricted stock units granted under the plan generally vest 20% in each of the first three years on the anniversary of the grant date with the remaining 40% vesting on the fourth anniversary of the grant date. Once the requisite holding period is met, during specified times the participant can sell the underlying shares to USPI at their estimated fair market value. At our sole discretion, the purchase of any non-voting common shares can be made in cash or in shares of Tenet’s common stock.

During the year ended December 31, 2020, USPI granted 2,556,353 shares of restricted non-voting common stock to eligible plan participants under the new plan. At December 31, 2020, 2,025,056 shares of restricted stock units were outstanding, all of which are expected to vest. The first vesting of these shares, which includes 382,550 shares, is expected to occur in February 2021.

The accompanying Consolidated Statement of Operations for the years ended December 2020, 2019 and 2018 includes $12 million, $11 million and $18 million, respectively, of pre-tax compensation costs related to USPI’s management equity plans.

Employee Stock Purchase Plan

We have an employee stock purchase plan under which we are currently authorized to issue up to 4,070,363 shares of common stock to our eligible employees. As of December 31, 2020, there were approximately 2.8 million 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 issued the following numbers of shares under our employee stock purchase plan in the years ended December 31, 2020, 2019 and 2018:


	Years Ended December 31,
	2020		2019		2018
Number of shares	254,767		215,422		228,045
Weighted average price	$	19.97	$	24.44	$	22.96

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, which we may match with employer contributions at our discretion. Employer matching contributions will vary by plan. Plan expenses, primarily related to our contributions to the plans, were $119 million, $127 million and $99 million for the years ended December 31, 2020, 2019 and 2018, 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. 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 Health Systems, Inc. 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 year ended December 31, 2019, the Society of Actuaries issued a new mortality base table (Pri-2012), which we incorporated into the estimates of our defined benefit plan obligations beginning December 31, 2019. During the years ended December 31, 2020 and 2019, the Society of Actuaries issued new mortality improvement scales (MP-2020 and MP-2019, respectively), which we incorporated into the estimates of our defined benefit plan obligations at December 31, 2020 and 2019. These changes to our mortality assumptions decreased our projected benefit obligations as of December 31, 2020 and 2019 by approximately $39 million and $14 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, 2020 and 2019:


	December 31,
	2020			2019
Reconciliation of funded status of plans and the amounts included in the Consolidated Balance Sheets:
Projected benefit obligations(1)
Beginning obligations	$	(1,369)		$	(1,301)

Interest cost	(47)			(58)
Actuarial loss	(92)			(132)
Benefits paid	79			123
Special termination benefit costs	—			(1)
Ending obligations	(1,429)			(1,369)
Fair value of plans assets
Beginning plan assets	790			731
Gain on plan assets	98			128
Employer contribution	38			33
Benefits paid	(57)			(102)
Ending plan assets	869			790
Funded status of plans	$	(560)		$	(579)
Amounts recognized in the Consolidated Balance Sheets consist of:
Other current liability	$	(63)		$	(19)
Other long-term liability	$	(497)		$	(560)
Accumulated other comprehensive loss	$	355		$	323
SERP Assumptions:
Discount rate	2.75		%	3.50		%
Compensation increase rate	3.00		%	3.00		%
Measurement date	December 31, 2020			December 31, 2019
DMC Pension Plan Assumptions:
Discount rate	2.53		%	3.60		%
Compensation increase rate	Frozen			Frozen
Measurement date	December 31, 2020			December 31, 2019

(1)The accumulated benefit obligation at December 31, 2020 and 2019 was approximately $1.426 billion and $1.367 billion, respectively.

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


	Years Ended December 31,
	2020			2019			2018
Service costs	$	—		$	—		$	2
Interest costs	47			58			56
Expected return on plan assets	(48)			(46)			(54)
Amortization of net actuarial loss	9			10			14
Special termination benefit costs	—			1			—
Net periodic benefit cost	$	8		$	23		$	18
SERP Assumptions:
Discount rate	3.50		%	4.50		%	3.75		%
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, 2020			January 1, 2019			January 1, 2018
Census date	January 1, 2020			January 1, 2019			January 1, 2018
DMC Pension Plan Assumptions:
Discount rate	3.60		%	4.62		%	4.00		%
Long-term rate of return on assets	6.25		%	6.50		%	6.50		%
Compensation increase rate	Frozen			Frozen			Frozen
Measurement date	January 1, 2020			January 1, 2019			January 1, 2018
Census date	January 1, 2020			January 1, 2019			January 1, 2018

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.

We recorded loss adjustments of $32 million, $42 million and $15 million in other comprehensive income (loss) in the years ended December 31, 2020, 2019 and 2018, 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 losses of $41 million, $52 million and $29 million were recognized during the years ended December 31, 2020, 2019 and 2018, respectively, and the amortization of net actuarial loss of $9 million, $10 million and $14 million for the years ended December 31, 2020, 2019 and 2018, respectively, were recognized in other comprehensive income (loss). Actuarial gains (losses) affecting the benefit obligation during the years ended December 31, 2020, 2019 and 2018 are primarily attributable to changes in the discount rate utilized for the SERP and DMC Pension Plan. Cumulative net actuarial losses of $355 million, $323 million and $281 million as of December 31, 2020, 2019 and 2018, respectively, and unrecognized prior service costs of less than $1 million as of each of the years ended December 31, 2019 and 2018 have not yet been recognized as components of net periodic benefit cost. There were no unrecognized prior service costs at December 31, 2020.

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, 2020, were as follows:


Asset Category	Target		Actual
Cash and cash equivalents	—	%	5	%

Equity securities	46	%	56	%
Debt securities	39	%	36	%
Alternative investments	15	%	3	%

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 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 and repurchase agreements secured by U.S. Treasury or federal agency obligations. Debt securities include domestic and foreign government obligations, corporate bonds, and mortgage-backed securities. Alternative investments is a broadly defined asset category with the objective of diversifying the portfolio, complementing traditional equity and fixed income securities and improving the overall performance consistency of the portfolio. Alternative investments may include, but are not limited to, diversified fund of hedge funds in the form of professionally-managed pooled limited partnership investments and investments in private markets.

In each investment account, the DMC Pension Plan investment managers are responsible for monitoring and reacting 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. The current asset allocation objective is to maintain a certain percentage with each class allowing for a deviation from the target ranging from 2.5% for alternative investments to 5.0% for fixed income investments, with a rebalancing of the asset allocation occurring when the portfolio exceeds the permissible deviation range.

The following tables summarize the DMC Pension Plan assets measured at fair value on a recurring basis as of December 31, 2020 and 2019, aggregated by the level in the fair value hierarchy within which those measurements are determined. 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.


	December 31, 2020		Level 1		Level 2		Level 3
Cash and cash equivalents	$	44	$	44	$	—	$	—
Equity securities	484		484		—		—
Debt Securities:
U.S. government obligations	76		76		—		—
Corporate debt securities	240		240		—		—
Alternative investments:
Private equity securities	8		—		—		8
Hedge funds	17		—		17		—
	$	869	$	844	$	17	$	8


	December 31, 2019		Level 1		Level 2		Level 3
Cash and cash equivalents	$	37	$	37	$	—	$	—
U.S. government obligations	9		9		—		—
Equity securities	461		461		—		—
Fixed income funds	283		283		—		—

	$	790	$	790	$	—	$	—

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		2021		2022		2023		2024		2025		Thereafter
Estimated benefit payments	$	845	$	83	$	85	$	86	$	86	$	86	$	419

The SERP and DMC Pension Plan obligations of $560 million at December 31, 2020 are classified in the accompanying Consolidated Balance Sheet as an other current liability of $63 million and defined benefit plan obligations of $497 million based on an estimate of the expected payment patterns. We expect to make total contributions to the plans of approximately $63 million for the year ending December 31, 2021.

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

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


	December 31,
	2020		2019
Land	$	612	$	602
Buildings and improvements	6,985		6,856
Construction in progress	33		184
Equipment	4,593		4,173
Finance lease assets	512		561
	12,735		12,376
Accumulated depreciation and amortization	(6,043)		(5,498)
Net property and equipment	$	6,692	$	6,878

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, 2020

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 2020 and 2019:


	2020		2019
Hospital Operations
As of January 1:
Goodwill	$	5,338	$	5,410
Accumulated impairment losses	(2,430)		(2,430)
Total	2,908		2,980
Goodwill acquired during the year and purchase price allocation adjustments	—		—
Goodwill related to assets held for sale and disposed or deconsolidated facilities	37		(72)
Total	$	2,945	$	2,908
As of December 31:
Goodwill	$	5,375	$	5,338
Accumulated impairment losses	(2,430)		(2,430)
Total	$	2,945	$	2,908


	2020		2019
Ambulatory Care
As of January 1:
Goodwill	$	3,739	$	3,696
Accumulated impairment losses	—		—
Total	3,739		3,696
Goodwill acquired during the year and purchase price allocation adjustments	1,581		43
Goodwill related to assets held for sale and disposed or deconsolidated facilities	(62)		—
Total	$	5,258	$	3,739
As of December 31:
Goodwill	$	5,258	$	3,739
Accumulated impairment losses	—		—
Total	$	5,258	$	3,739


	2020		2019
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 2020 and 2019:


	Gross Carrying Amount		Accumulated Amortization		Net Book Value
At December 31, 2020:
Capitalized software costs	$	1,800	$	(1,084)	$	716
Trade names	102		—		102
Contracts	872		(111)		761
Other	110		(89)		21
Total	$	2,884	$	(1,284)	$	1,600
At December 31, 2019:
Capitalized software costs	$	1,616	$	(912)	$	704
Trade names	102		—		102
Contracts	869		(94)		775
Other	107		(86)		21
Total	$	2,694	$	(1,092)	$	1,602

Estimated future amortization of intangibles with finite useful lives as of December 31, 2020 is as follows:


	Total		Years Ending December 31,										Later Years
	Total		2021		2022		2023		2024		2025		Later Years
Amortization of intangible assets	$	917	$	158	$	126	$	112	$	95	$	82	$	344

We recognized amortization expense of $172 million, $188 million and $185 million in the accompanying Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, respectively.

INVESTMENTS AND OTHER ASSETS

12 Months Ended

Dec. 31, 2020

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,
	2020		2019
Marketable securities	$	3	$	2
Equity investments in unconsolidated healthcare entities	1,024		978
Total investments	1,027		980
Cash surrender value of life insurance policies	42		36
Long-term deposits	67		59
California provider fee program receivables	206		213
Operating lease assets	1,062		912
Land held for expansion, other long-term receivables and other assets	130		169
Investments and other assets	$	2,534	$	2,369

ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2020

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,
	2020		2019
Adjustments for defined benefit plans	$	(281)	$	(257)


Accumulated other comprehensive loss	$	(281)	$	(257)

The income tax benefits allocated to the adjustments for our defined benefit plans was approximately $7 million and $8 million for the year ended December 31, 2020 and 2019, respectively.

NET OPERATING REVENUES

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

NET OPERATING REVENUES

CONTRACT BALANCES

Hospital Operations Segment

Amounts related to services provided to patients for which we have not billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period are contract assets. For our Hospital Operations segment, our contract assets include services that we have provided to patients who are still receiving inpatient care in our facilities at the end of the reporting period. Our Hospital Operations segment’s contract assets are included in other current assets in the accompanying Consolidated Balance Sheets at December 31, 2020 and 2019. Approximately 89% of our Hospital Operations segment’s contract assets meet the conditions for unconditional right to payment and are reclassified to patient receivables within 90 days.

In certain circumstances, when a hospital is experiencing financial difficulty due to delays in receiving payment for the Medicare services it provided, it may be eligible for an accelerated or advance payment pursuant to the Medicare accelerated payment program. As discussed in Note 1, the COVID Acts revised the Medicare accelerated payment program in an attempt to disburse payments to hospitals more quickly to mitigate shortfalls due to delays in non-essential procedures, as well as staffing and billing disruptions. During the year ended December 31, 2020, our Hospital Operations segment received advance payments from the Medicare accelerated payment program following expansion of the program under the COVID Acts. These advance payments are recorded as contract liabilities in the accompanying Consolidated Balance Sheet at December 31, 2020.

The opening and closing balances of contract assets for our Hospital Operations segment are as follows:


			Contract Liability –		Contract Liability –
			Current		Long-term
	Contract Assets		Advances from Medicare		Advances from Medicare
December 31, 2019	$	170	$	—	$	—
December 31, 2020	208		510		819
Increase	$	38	$	510	$	819

December 31, 2018	$	169	$	—	$	—
December 31, 2019	170		—		—
Increase	$	1	$	—	$	—

Ambulatory Care Segment

During the year ended December 31, 2020, our Ambulatory Care segment also received advance payments from the Medicare accelerated payment program following expansion of the program under the COVID Acts. At December 31, 2020, contract liabilities and contract liabilities – long-term in the accompanying Balance Sheet included $51 million and $62 million

of Medicare advance payments received by our unconsolidated affiliates for whom we provide cash management services. The opening and closing balances of contract liabilities for our Ambulatory Care segment are as follows:


	Contract Liability –		Contract Liability –
	Current		Long-term
	Advances from Medicare		Advances from Medicare
December 31, 2019	$	—	$	—
December 31, 2020	93		83
Increase	$	93	$	83

December 31, 2018	$	—	$	—
December 31, 2019	—		—
Increase	$	—	$	—

Conifer Segment

Conifer enters into contracts with customers to provide revenue cycle management and other services, such as value‑based care, consulting and project services. The payment terms and conditions in our customer contracts vary. In some cases, customers are invoiced in advance and (for other than fixed-price fee arrangements) a true-up to the actual fee is included on a subsequent invoice. In other cases, payment is due in arrears. In addition, some contracts contain performance incentives, penalties and other forms of variable consideration. When the timing of Conifer’s delivery of services is different from the timing of payments made by the customers, Conifer recognizes either unbilled revenue (performance precedes contractual right to invoice the customer) or deferred revenue (customer payment precedes Conifer service performance). In the following table, customers that prepay prior to obtaining control/benefit of the service are represented by deferred contract revenue until the performance obligations are satisfied. Unbilled revenue represents arrangements in which Conifer has provided services to and the customer has obtained control/benefit of services prior to the contractual invoice date. Contracts with payment in arrears are recognized as receivables in the month the service is performed.

The opening and closing balances of Conifer’s receivables, contract asset, and current and long-term contract liabilities are as follows:


					Contract Liability –		Contract Liability –
			Contract Asset –		Current		Long-Term
	Receivables		Unbilled Revenue		Deferred Revenue		Deferred Revenue
December 31, 2019	$	26	$	11	$	61	$	18
December 31, 2020	56		20		56		16
Increase/(decrease)	$	30	$	9	$	(5)	$	(2)

December 31, 2018	$	42	$	11	$	61	$	20
December 31, 2019	26		11		61		18
Decrease	$	(16)	$	—	$	—	$	(2)

The difference between the opening and closing balances of Conifer’s contract assets and contract liabilities are primarily related to prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are typically not distinct and are, therefore, recognized over the performance obligation period to which they relate. Our Conifer segment’s receivables and contract assets are reported as part of other current assets in our accompanying Consolidated Balance Sheets, and our Conifer segment’s current and long-term contract liabilities are reported as part of contract liabilities and contract liabilities – long-term, respectively, in our accompanying Consolidated Balance Sheets.

In both of the years ended December 31, 2020 and 2019, Conifer recognized $61 million of revenue that was included in the opening current deferred revenue liability. This revenue consists primarily of prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are recognized over the services period.

Contract CostsWe have elected to apply the practical expedient provided by FASB ASC 340-40-25-4 and expense as incurred the incremental customer contract acquisition costs for contracts in which the amortization period of the asset is one year or less. However, incremental costs incurred to obtain and fulfill customer contracts for which the amortization period of the asset is longer than one year, which consist primarily of Conifer deferred contract setup costs, are capitalized and amortized on a straight-line basis over the lesser of their estimated useful lives or the term of the related contract. During the years ended December 31, 2020, 2019 and 2018, we recognized amortization expense of $4 million, $5 million and $11 million, respectively. At December 31, 2020 and 2019, the unamortized customer contract costs were $24 million and $25 million, respectively, and are presented as part of investments and other assets in the accompanying Consolidated Balance Sheets.NET OPERATING REVENUES

Net operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to health systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities.

The table below shows our sources of net operating revenues less implicit price concessions from continuing operations:


	Years Ended December 31,
	2020		2019		2018
Hospital Operations:
Net patient service revenues from hospitals and related outpatient facilities:
Medicare	$	2,695	$	2,888	$	2,882
Medicaid	1,081		1,193		1,294
Managed care	9,022		9,516		9,213
Uninsured	162		92		96
Indemnity and other	658		679		596
Total	13,618		14,368		14,081
Other revenues(1)	1,172		1,154		1,204
Hospital Operations total prior to inter-segment eliminations	14,790		15,522		15,285
Ambulatory Care	2,072		2,158		2,085
Conifer	1,306		1,372		1,533
Inter-segment eliminations	(528)		(573)		(590)
Net operating revenues	$	17,640	$	18,479	$	18,313



(1)			Primarily physician practices revenues.

Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the years ended December 31, 2020, 2019 and 2018 by $6 million, $27 million and $24 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.

The table below shows the composition of net operating revenues for our Ambulatory Care segment:


	Years Ended December 31,
	2020		2019		2018
Net patient service revenues	$	1,960	$	2,040	$	1,965
Management fees	86		95		92
Revenue from other sources	26		23		28
Net operating revenues	$	2,072	$	2,158	$	2,085

The table below shows the composition of net operating revenues for our Conifer segment:


	Years Ended December 31,
	2020		2019		2018
Revenue cycle services – Tenet	$	514	$	556	$	568
Revenue cycle services – other customers	700		713		855
Other services – Tenet	14		17		22
Other services – other customers	78		86		88
Net operating revenues	$	1,306	$	1,372	$	1,533

Other services represented approximately 7% of Conifer’s revenue for the year ended December 31, 2020 and include value‑based care services, consulting services and other client-defined projects.

Performance Obligations

The following table includes Conifer’s revenue that is expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, at the end of the reporting period. The amounts in the table primarily consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume- or contingency-based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed-fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends December 31, 2032.


			Years Ending December 31,										Later Years
	Total		2021		2022		2023		2024		2025
Performance obligations	$	6,650	$	594	$	593	$	593	$	541	$	541	$	3,788

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE	12 Months Ended
	Dec. 31, 2020
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, 2020 through March 31, 2021, 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 $40 million for California earthquakes, $25 million for floods and named windstorms, 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 We are self-insured for the majority of our professional and general liability claims and purchase insurance from third-parties to cover catastrophic claims. At December 31, 2020 and 2019, the aggregate current and long-term professional and general liability reserves in the accompanying Consolidated Balance Sheets were $978 million and $965 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. As described in Note 1, in the three months ended March 31, 2020, we changed our method of accounting for our estimated professional and general liability claims, as well as other claims-related liabilities. Under the new method of accounting, the liabilities are reported on an undiscounted basis whereas, previously, the liabilities were reported on a discounted basis. 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 $320 million, $356 million and $399 million for the years ended December 31, 2020, 2019 and 2018, respectively, of which $120 million, $155 million and $176 million, respectively, related to adverse claims development for prior years.

CLAIMS AND LAWSUITS

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

CLAIMS AND LAWSUITS

CLAIMS AND LAWSUITSWe 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 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, but are subject to significant uncertainty regarding numerous factors that could affect the ultimate loss levels. 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. Given the inherent uncertainties associated with these matters, especially those involving governmental agencies, and the indeterminate damages sought in some cases, there is significant uncertainty as to the ultimate liability we may incur from these matters, and an adverse outcome in one or more of these matters could be material to our results of operations or cash flows for any particular reporting period.

Oklahoma Surgical Hospital Qui Tam Action

In July 2020, certain of the parties to a previously disclosed qui tam lawsuit filed under seal in May 2016 in the Western District of Oklahoma entered into a settlement agreement with the U.S. Department of Justice (“DOJ”) to resolve the matter. The parties to the settlement agreement include (i) Oklahoma Center for Orthopaedic & Multispecialty Surgery (“OCOM”), a surgical hospital jointly owned by USPI, a health system partner and physicians, (ii) Southwest Orthopaedic Specialists, an independent physician practice group, and (iii) USPI. Also in July 2020, OCOM entered into a corporate integrity agreement with the Office of Inspector General of HHS. USPI and Tenet are not parties to OCOM’s corporate integrity agreement.

As previously reported, an agreement in principle was reached with the DOJ in October 2019 to resolve the qui tam lawsuit and related investigations against USPI and OCOM for approximately $66 million, subject at that time to further approvals by the DOJ and other government agencies. In the three months ended September 30, 2019, we established a reserve of $68 million for this matter, which included an estimate of the relator’s attorney’s fees and certain other costs to be paid by USPI. In the three months ended December 31, 2019, we increased the reserve for this matter by an additional $1 million to reflect updated information on the other costs to be paid by USPI. In addition, in the year ended December 31, 2020, we increased the reserve for this matter by less than $1 million to reflect updated information with respect to the relator’s anticipated attorney’s fees and other costs. USPI paid the full settlement amount in July 2020, and the claims in the qui tam lawsuit against OCOM, USPI, Tenet and their affiliated entities, among others, were dismissed in August 2020. We paid the relator’s attorney’s fees and other costs in November 2020, which fully resolved this matter.

Government Investigation of Detroit Medical Center

Detroit Medical Center (“DMC”) is subject to an ongoing civil investigation commenced in October 2017 by the U.S. Attorney’s Office for the Eastern District of Michigan and the Civil Division of the DOJ for potential violations of the Stark law, the Medicare and Medicaid anti-kickback and anti-fraud and abuse amendments codified under Section 1128B(b) of the Social Security Act, and the federal False Claims Act related to DMC’s employment of nurse practitioners and physician assistants (“Mid-Level Practitioners”) from 2006 through 2017. As previously disclosed, a media report was published in August 2017 alleging that 14 Mid-Level Practitioners were terminated by DMC earlier in 2017 due to compliance concerns. We are cooperating with the investigation; however, we are unable to determine the potential exposure, if any, at this time.

Other Matters

In July 2019, certain of the entities that purchased the operations of Hahnemann University Hospital and St. Christopher’s Hospital for Children in Philadelphia from us commenced Chapter 11 bankruptcy proceedings. As previously disclosed in our Form 8-K filed September 1, 2017, the purchasers assumed our funding obligations under the Pension Fund for Hospital and Health Care Employees of Philadelphia and Vicinity (the “Fund”), a pension plan related to the operations at Hahnemann University Hospital and, pursuant to rules under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), under certain circumstances we could become liable for withdrawal liability in the event a withdrawal is triggered with respect to the Fund. In addition, pursuant to applicable ERISA rules, we could become secondarily liable if the purchasers fail to satisfy their obligations to the Fund.

We are also subject to 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, including lawsuits from patients, employees and others exposed to COVID-19 at our facilities. 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 in continuing operations during the years ended December 31, 2020, 2019 and 2018. No amounts were recorded in discontinued operations in those years.


	Balances at Beginning of Period		Litigation and Investigation Costs		Cash Payments		Other		Balances at End of Period



Year Ended December 31, 2020	$	86	$	44	$	(108)	$	4	$	26


Year Ended December 31, 2019	$	8	$	141	$	(55)	$	(8)	$	86


Year Ended December 31, 2018	$	12	$	38	$	(41)	$	(1)	$	8

For the years ended December 31, 2020, 2019 and 2018, we recorded net costs of $44 million, $141 million and $38 million, respectively, in connection with significant legal proceedings and governmental investigations. The costs in the 2019 period include $69 million of accruals for the now-resolved OCOM matter described above.

REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES

12 Months Ended

Dec. 31, 2020

Noncontrolling Interest [Abstract]

REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES

As part of the formation of USPI in 2015, we entered into a put/call agreement with respect to the equity interests in USPI held by our joint venture partners at that time. During 2016, 2017 and 2018, we paid a total of $1.473 billion to purchase additional shares of USPI to increase our ownership interest in USPI from 50.1% to 95%.

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 USPI held by Baylor. Each year starting in 2021, Baylor may put up to one-third of their total shares in USPI held as of April 1, 2017 by delivering notice by the end of January of such year. In each year that Baylor does not put the full 33.3% of USPI’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. Baylor did not deliver a put notice to us in January 2021. 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 the Baylor Put/Call Agreement, Baylor’s minority interest in USPI was classified as a redeemable noncontrolling interest in the accompanying Consolidated Balance Sheets at December 31, 2020 and 2019.

The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the years ended 2020 and 2019:


	December 31,
	2020		2019
Balances at beginning of period	$	1,506	$	1,420
Net income	186		192
Distributions paid to noncontrolling interests	(135)		(145)
Accretion of redeemable noncontrolling interests	4		18
Purchases and sales of businesses and noncontrolling interests, net	391		21
Balances at end of period	$	1,952	$	1,506

Our redeemable noncontrolling interests balances at December 31, 2020 and 2019 in the table above were comprised of $267 million and $383 million, respectively, from our Hospital Operations segment, $1.273 billion and $777 million, respectively, from our Ambulatory Care segment, and $412 million and $346 million, respectively, from our Conifer segment. Our net income attributable to redeemable noncontrolling interests for the years ended December 31, 2020 and 2019 in the accompanying Consolidated Statements of Operations included losses of $33 million and $37 million, respectively, from our

Hospital Operations segment, income of $153 million and $159 million, respectively, from our Ambulatory Care segment, and income of $66 million and $70 million, respectively, from our Conifer segment.

INCOME TAXES

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

The provision for income taxes for continuing operations for the years ended December 31, 2020, 2019 and 2018 consists of the following:


	Years Ended December 31,
	2020		2019		2018
Current tax expense (benefit):
Federal	$	—	$	(6)	$	(6)
State	30		26		33
	30		20		27
Deferred tax expense (benefit):
Federal	(131)		140		156
State	4		—		(10)
	(127)		140		146
	$	(97)	$	160	$	173

A reconciliation between the amount of reported income tax expense (benefit) and the amount computed by multiplying income 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, 2020 includes $1 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 $1 million is included for the year ended December 31, 2020 to reflect the reduction in the valuation allowance. Foreign pre-tax loss was $13 million for the year ended December 31, 2020, and $6 million for the years ended December 31, 2019 and 2018.


	Years Ended December 31,
	2020		2019		2018
Tax expense at statutory federal rate of 21%	$	141	$	67	$	132
State income taxes, net of federal income tax benefit	33		21		23
Expired state net operating losses, net of federal income tax benefit	1		2		9
Tax attributable to noncontrolling interests	(75)		(79)		(70)
Nondeductible goodwill	—		4		8
Nondeductible executive compensation	6		6		4
Nondeductible litigation costs	—		7		—
Expired charitable contribution carryforward	1		8		—
Impact of decrease in federal tax rate on deferred taxes	—		—		(1)
Reversal of permanent reinvestment assumption and other adjustments related to divestiture of foreign subsidiary	—		—		(6)
Stock-based compensation tax deficiencies (benefits)	(2)		4		5
Changes in valuation allowance (including impact of decrease in federal tax rate)	(226)		133		76
Change in tax contingency reserves, including interest	—		(14)		(1)
Prior-year provision to return adjustments and other changes in deferred taxes	14		(3)		(5)
Other items	10		4		(1)
Income tax expense (benefit)	$	(97)	$	160	$	173

The CARES Act includes a significant number of tax provisions applicable to individuals and businesses. For businesses, the CARES Act makes changes to the U.S. tax code relating to, among other things: (1) the business interest expense disallowance rules for 2019 and 2020; (2) net operating loss rules; (3) charitable contribution limitations; and (4) the realization of corporate alternative minimum tax credits. As a result of the change in the business interest expense disallowance rules, we recorded an income tax benefit of $88 million during the year ended December 31, 2020 to decrease the valuation allowance for interest expense carryforwards due to the additional deduction of interest expense.

In September 2020, we filed an application with the Internal Revenue Service (“IRS”) to change our method of accounting for certain capitalized costs on our 2019 tax return. This change in tax accounting method resulted in additional interest expense being allowed on the 2019 and 2020 tax returns. We reduced our valuation allowance by an additional $126 million in the year ended December 31, 2020 related to the change in accounting method.

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, 2020				December 31, 2019
	Assets		Liabilities		Assets		Liabilities
Depreciation and fixed-asset differences	$	—	$	621	$	—	$	282
Reserves related to discontinued operations and restructuring charges	8		—		14		—
Receivables (doubtful accounts and adjustments)	173		—		165		—

Accruals for retained insurance risks	223		—		209		—
Intangible assets	—		385		—		356
Other long-term liabilities	55		—		35		—
Benefit plans	265		—		274		—
Other accrued liabilities	74		—		45		—
Investments and other assets	—		73		—		95
Interest expense limitation	8		—		219		—
Net operating loss carryforwards	566		—		179		—
Stock-based compensation	11		—		19		—
Right-of-use lease assets and obligations	224		224		—		—
Other items	86		39		45		34
	1,693		1,342		1,204		767
Valuation allowance	(55)		—		(281)		—
	$	1,638	$	1,342	$	923	$	767

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


	December 31,
	2020		2019
Deferred income tax assets	$	325	$	183
Deferred tax liabilities	(29)		(27)
Net deferred tax asset	$	296	$	156

During the year ended December 31, 2020, the valuation allowance decreased by $226 million, including a decrease of $211 million due to limitations on the tax deductibility of interest expense, a decrease of $1 million due to the expiration or worthlessness of unutilized state net operating loss carryovers, and a decrease of $14 million due to changes in expected realizability of deferred tax assets. The balance in the valuation allowance as of December 31, 2020 was $55 million. During the year ended December 31, 2019, the valuation allowance increased by $133 million, including an increase of $130 million due to limitations on the tax deductibility of interest expense, a decrease of $2 million due to the expiration or worthlessness of unutilized state net operating loss carryovers, and an increase of $5 million due to changes in expected realizability of deferred tax assets. The remaining balance in the valuation allowance at December 31, 2019 was $281 million. During the year ended December 31, 2018, the valuation allowance decreased by $76 million, including an increase of $89 million due to limitations on deductions of interest expense, a decrease of $9 million due to the expiration or worthlessness of unutilized state net operating loss carryovers, and a decrease of $4 million due to changes in expected realizability of deferred tax assets. The remaining balance in the valuation allowance as of December 31, 2018 was $148 million. Deferred tax assets relating to interest expense limitations under Internal Revenue Code Section 163(j) have a full valuation allowance because the interest expense carryovers are not expected to be utilized in the foreseeable future.

We account for uncertain tax positions in accordance with FASB 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 following table summarizes the total changes in unrecognized tax benefits in continuing operations during the years ended December 31, 2020, 2019 and 2018. There were no such changes in discontinued operations. 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, 2020, 2019 and 2018.


	Continuing Operations
Balance At December 31, 2017	$	46
Reductions due to a lapse of statute of limitations	(1)
Balance At December 31, 2018	$	45
Reductions due to a lapse of statute of limitations	(14)
Balance At December 31, 2019	$	31
Reductions due to a lapse of statute of limitations	—
Balance At December 31, 2020	$	31

The total amount of unrecognized tax benefits as of December 31, 2020 was $31 million, of which $29 million, if recognized, would affect our effective tax rate and income tax benefit from continuing operations. In the year ended December 31, 2020, there was no change in our estimated liabilities for uncertain tax positions. The total amount of unrecognized tax benefits as of December 31, 2019 was $31 million, of which $29 million, if recognized, would affect our effective tax rate and income tax expense from continuing operations. Income tax expense in the year ended December 31, 2019 includes a benefit of $11 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, 2018 was $45 million, of which $43 million, if recognized, would affect our effective tax rate and income tax expense from continuing operations. Income tax expense in the year ended December 31, 2018 includes a benefit of $1 million in continuing operations attributable to a decrease in our estimated liabilities for uncertain tax positions, net of related deferred tax effects.

Our practice is to recognize interest and penalties related to income tax matters in income tax expense in our consolidated statements of operations. We did not have any interest or penalties on unrecognized tax benefits accrued at December 31, 2020.

The IRS has completed audits of our tax returns for all tax years ended on or before December 31, 2007. 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, 2016 remain subject to audit by the IRS.

As of December 31, 2020, no significant changes in unrecognized federal and state tax benefits are expected 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, 2020, our carryforwards available to offset future taxable income consisted of (1) federal net operating loss (“NOL”) carryforwards of approximately $2.367 billion pre-tax, $1.126 billion of which expires in 2021 to 2034 and $1.241 billion of which has no expiration date, (2) general business credit carryforwards of approximately $25 million expiring in 2023 through 2039, (3) charitable contribution carryforwards of approximately $195 million expiring in 2021 through 2025 and (4) state NOL carryforwards of approximately $3.728 billion expiring in 2021 through 2040 for which the associated deferred tax benefit, net of valuation allowance and federal tax impact, is $61 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, 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.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

EARNINGS (LOSS) PER COMMON SHARE

12 Months Ended

Dec. 31, 2020

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, 2020, 2019 and 2018. Net income available (loss attributable) to our common shareholders is expressed in millions and weighted average shares are expressed in thousands.


	Net Income Available (Loss Attributable) to Common Shareholders (Numerator)		Weighted Average Shares (Denominator)	Per-Share Amount
Year Ended December 31, 2020
Net income available to Tenet Healthcare Corporation common shareholders for basic earnings per share	$	399	105,010	$	3.80
Effect of dilutive stock options, restricted stock units and deferred compensation units	—		1,253	(0.05)
Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share	$	399	106,263	$	3.75
Year Ended December 31, 2019
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share	$	(226)	103,398	$	(2.19)
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	$	(226)	103,398	$	(2.19)
Year Ended December 31, 2018
Net income available to Tenet Healthcare Corporation common shareholders for basic earnings per share	$	101	102,110	$	0.99
Effect of dilutive stock options, restricted stock units and deferred compensation units	—		1,771	(0.02)
Net income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share	$	101	103,881	$	0.97

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. For this reason, all potentially dilutive securities were excluded from the calculation of diluted loss per share for the year ended December 31, 2019. Had we generated income from continuing operations available to common shareholders in the year ended December 31, 2019, 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 1,457 for the year ended December 31, 2019.

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTSOur 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 tables present this information and indicate 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.

The following tables disclose the assets measured at fair value on a non-recurring basis as of December 31, 2020 and 2019:


	December 31, 2020		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	$	140	$	—	$	140	$	—
Long-lived assets held and used	483		—		483		—

	$	623	$	—	$	623	$	—


	December 31, 2019		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	$	387	$	—	$	387	$	—

There were zero liabilities measured at fair value on a non-recurring basis as of December 31, 2020 and 2019.

As discussed in Note 6, we recognized an impairment charge of $76 million to write down buildings in one of our Hospital Operations segment’s markets to their estimated fair value.

In the year ended December 31, 2019, we recorded impairment charges in continuing operations of $26 million to write-down assets held for sale to their estimated fair value, less estimated costs to sell, for certain of our Memphis-area facilities.

Financial Instruments

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, 2020 and 2019, the estimated fair value of our long-term debt was approximately 104.5% and 106.4%, 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, 2020

Business Combinations [Abstract]

ACQUISITIONS

In December 2020, USPI acquired controlling interests in 45 ASCs (collectively, the “SCD Centers”) from SurgCenter Development and physician owners. The fair value of the consideration conveyed (the “purchase price”) for the SCD Centers was $1.115 billion, consisting of a cash payment of $1.097 billion, fully funded using cash on hand, and the assumption of $18 million of center-level debt.

In addition to the SCD Centers, we acquired ownership interests in 10 outpatient businesses (all of which are in our Ambulatory Care segment), and various physician practices during the year ended December 31, 2020. The aggregate purchase price for these acquisitions was $80 million.

During the year ended December 31, 2019, we acquired ownership interests in 10 outpatient businesses (all of which are in our Ambulatory Care segment), three off-campus emergency departments and various physician practices. The aggregate purchase price for the acquisitions was $25 million.

During the year ended December 31, 2018, we acquired ownership interests in 10 outpatient businesses (all of which are in our Ambulatory Care segment) and various physician practices. The aggregate purchase price for the acquisitions was $113 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 2020, including the SCD Centers, is preliminary. We are in process of assessing working capital balances as well as obtaining and evaluating valuations of the acquired property and equipment, management contracts and other intangible assets, and noncontrolling interests. Therefore,

those purchase price allocations, including goodwill, recorded in the accompanying consolidated financial statements are subject to adjustment once the assessments and valuation work are completed and evaluated. Such adjustments will be recorded as soon as practical and within the measurement period as defined by the accounting literature.

Preliminary or final purchase price allocations for all the acquisitions made during the years ended December 31, 2020, 2019 and 2018 are as follows:


	2020		2019		2018
Current assets	$	67	$	16	$	6
Property and equipment	63		20		19
Other intangible assets	14		4		9
Goodwill	1,581		43		220
Other long-term assets, including previously held equity method investments	38		24		(18)
Current liabilities	(45)		(16)		—
Long-term liabilities	(43)		(35)		(15)
Redeemable noncontrolling interests in equity of consolidated subsidiaries	(478)		(18)		(21)
Noncontrolling interests	(20)		(7)		(85)
Cash paid, net of cash acquired	(1,177)		(25)		(113)
Gains on consolidations	$	—	$	6	$	2

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. The goodwill total of $1.581 billion from acquisitions completed during the year ended December 31, 2020 was recorded in our Ambulatory Care segment. Approximately $14 million, $6 million and $10 million in transaction costs related to prospective and closed acquisitions were expensed during the years ended December 31, 2020, 2019 and 2018, 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, 2019 and 2018, we recognized gains totaling $6 million and $2 million, respectively, 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

The following table provides certain pro forma information for Tenet as if the SCD Centers acquisition had occurred at the beginning of the year ended December 31, 2019.


	Year Ended December 31,
	2020		2019
Net operating revenues	$	18,034	$	18,910

Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	470	$	(131)
Diluted earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders	$	4.42	$	(1.27)

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

Our business consists of our Hospital Operations 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 segment is comprised of our acute care and specialty hospitals, ancillary outpatient facilities, urgent care centers, micro-hospitals and physician practices. As described in Note 5, certain of these facilities were classified as held for sale in the accompanying Consolidated Balance Sheets at December 31, 2020 and 2019. At December 31, 2020, our subsidiaries operated 65 hospitals serving primarily urban and suburban communities in nine states.

Our Ambulatory Care segment is comprised of the operations of USPI and included Aspen facilities in the United Kingdom until their divestiture effective August 17, 2018. At December 31, 2020, USPI had interests in 308 ASCs, 40 urgent care centers operated under the CareSpot brand, 24 imaging centers and 24 surgical hospitals in 31 states. As described

in Note 5, certain of these facilities were classified as held for sale in the accompanying Consolidated Balance Sheet at December 31, 2020. At December 31, 2020, we owned 95% of USPI.

Our Conifer segment provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. At December 31, 2020, Conifer provided services to approximately 630 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 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. At December 31, 2020, we owned 76.2% of Conifer Health Solutions, LLC, which is the principal subsidiary of Conifer Holdings, Inc.

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, 2020		December 31, 2019		December 31, 2018
Assets:
Hospital Operations	$	18,048	$	16,196	$	15,705
Ambulatory Care	8,048		6,195		5,711
Conifer	1,010		974		1,014
Total	$	27,106	$	23,365	$	22,430


	Years Ended December 31,
	2020		2019		2018
Capital expenditures:
Hospital Operations	$	467	$	572	$	527
Ambulatory Care	51		75		68
Conifer	22		23		22
Total	$	540	$	670	$	617

Net operating revenues:
Hospital Operations total prior to inter-segment eliminations	$	14,790	$	15,522	$	15,285
Ambulatory Care	2,072		2,158		2,085
Conifer
Tenet	528		573		590
Other clients	778		799		943
Total Conifer revenues	1,306		1,372		1,533
Inter-segment eliminations	(528)		(573)		(590)
Total	$	17,640	$	18,479	$	18,313

Equity in earnings of unconsolidated affiliates:
Hospital Operations	$	6	$	15	$	10
Ambulatory Care	163		160		140
Total	$	169	$	175	$	150

Adjusted EBITDA:
Hospital Operations	$	1,911	$	1,449	$	1,401
Ambulatory Care	868		895		792
Conifer	367		386		357
Total	$	3,146	$	2,730	$	2,550

Depreciation and amortization:
Hospital Operations	$	739	$	733	$	685
Ambulatory Care	81		72		68
Conifer	37		45		49
Total	$	857	$	850	$	802

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

RECENT ACCOUNTING STANDARDS	12 Months Ended
RECENT ACCOUNTING STANDARDS	Dec. 31, 2020
Accounting Standards Update and Change in Accounting Principle [Abstract]
RECENT ACCOUNTING STANDARDS	RECENT ACCOUNTING STANDARDS Recently Issued Accounting Standards In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans –General (Subtopic 715-20) Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”), which applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments in ASU 2018-14, which remove, modify or add certain disclosure requirements as part of the FASB’s disclosure framework project to improve the effectiveness of the notes to the financial statements, are effective for us beginning in 2021. The adoption of this guidance will not impact our financial position, results of operations or cash flows. Recently Adopted Accounting Standards Effective January 1, 2020, as further discussed in Note 1, we adopted ASU 2016-13 using the modified retrospective transition approach as of the period of adoption. Also effective January 1, 2020, we adopted ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework – Changes to the Disclosure Framework Requirements for Fair Value Measurement” (“ASU 2018-13”) using the prescribed transition method and ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018-15”) using the prospective transition method. The adoption of ASU 2018-13 and ASU 2018-15 did not have a material effect on our financial position, results of operations or cash flows. Effective January 1, 2019, as further discussed in Note 1, we adopted ASU 2016-02 using the modified retrospective transition approach as of the period of adoption. Effective January 1, 2018, as further discussed in Note 1, we adopted ASU 2014-09 and ASU 2016-01, and we early adopted ASU 2018-02. Also effective January 1, 2018, we adopted ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments” and ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash,” both of which were applied using a retrospective transition method to each period presented and did not have any effect on our statements of cash flows.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

Supplemental Financial Information

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Supplemental Financial Information

SUPPLEMENTAL FINANCIAL INFORMATION

SELECTED QUARTERLY FINANCIAL DATA

(UNAUDITED)

The tables below present our quarterly results for the years ended December 31, 2020 and 2019. Quarterly amounts presented for the year ended December 31, 2019 have been adjusted to reflect the change in method of accounting for our estimated professional and general liability claims, which was implemented in March 2020. See Note 1 to the accompanying Consolidated Financial Statements for additional discussion of this change in accounting principle.


	Year Ended December 31, 2020
	First		Second		Third		Fourth
Net operating revenues	$	4,520	$	3,648	$	4,557	$	4,915
Net income (loss)(1)	$	159	$	169	$	(106)	$	546
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	93	$	88	$	(196)	$	414
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic	$	0.89	$	0.84	$	(1.86)	$	3.92
Diluted	$	0.88	$	0.83	$	(1.86)	$	3.86


	Year Ended December 31, 2019
	First		Second		Third		Fourth
Net operating revenues	$	4,545	$	4,560	$	4,568	$	4,806
Net income (loss)	$	72	$	121	$	(146)	$	124
Net income available (loss attributable) to Tenet Healthcare Corporation common shareholders	$	(12)	$	26	$	(226)	$	(3)
Earnings (loss) per share available (attributable) to Tenet Healthcare Corporation common shareholders:
Basic	$	(0.11)	$	0.25	$	(2.18)	$	(0.03)
Diluted	$	(0.11)	$	0.25	$	(2.18)	$	(0.03)


(1)			Includes income (loss) from federal, state and local COVID-related grants of $523 million, $(70) million and $446 million during the second, third and fourth quarters, respectively, of 2020. Income (loss) recognized under these grants is reported in grant income in the accompanying Consolidated Statements of Operations, except for $12 million, $(4) million, and $9 million of grant income included in equity in earnings of unconsolidated affiliates during the second, third, and fourth quarters, respectively, of 2020. No grant income was recognized in the first quarter of 2020 or during the year ended December 31, 2019.

Quarterly operating results are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: the impact of the COVID-19 pandemic on our operations, business, financial condition and cash flows; overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; trends in patient accounts receivable collectability and associated implicit price concessions; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; impairment of long-lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to natural disasters and other weather-related occurrences; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; gains (losses) on sales, consolidation and deconsolidation of facilities; income tax rates and deferred tax asset valuation allowance activity; changes in estimates of accruals for annual incentive compensation; the timing and amounts of stock option and restricted stock unit grants to employees and directors; gains (losses) from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect service mix, revenue mix, patient volumes and, thereby, the results of operations at our hospitals and related healthcare facilities include, but are not limited to: changes in federal, state and local healthcare and business regulations, including mandated closures and other operating restrictions; the business environment, economic conditions and demographics of local communities in which we operate; the number of uninsured and underinsured individuals in local communities treated at our hospitals; disease hotspots and seasonal cycles of illness; climate and weather conditions; physician recruitment, satisfaction, retention and attrition; advances in technology and treatments that reduce length of stay; local healthcare competitors; utilization pressure by managed care organizations, as well as managed care contract negotiations or terminations; hospital performance data on quality measures and patient satisfaction, as well as standard charges for services; any unfavorable publicity about us, or our joint venture partners, that impacts our relationships with physicians and patients; and changing consumer behavior, including with respect to the timing of elective procedures. These considerations apply to year-to-year comparisons as well.

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(In Millions)


	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, 2020	$	—	$	—	$	—	$	—	$	—
Year ended December 31, 2019	$	—	$	—	$	—	$	—	$	—
Year ended December 31, 2018	$	898	$	—	$	—	$	(898)	$	—
Valuation allowance for deferred tax assets:
Year ended December 31, 2020	$	281	$	(226)	$	—	$	—	$	55
Year ended December 31, 2019	$	148	$	133	$	—	$	—	$	281
Year ended December 31, 2018	$	72	$	76	$	—	$	—	$	148

(1)Includes amounts recorded in discontinued operations.

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

(3)Accounts written off.

(4)Allowance for doubtful accounts eliminated in 2018 upon adoption of Accounting Standards Update 2014-09, “Revenue from Contracts with Customers (Topic 606)”.

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

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, 2020, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) using the modified retrospective transition approach as of the period of adoption. The amendments in this ASU required a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Upon adoption of ASU 2016-13 on January 1, 2020, we recorded a cumulative effect adjustment to increase accumulated deficit by $14 million.

Effective January 1, 2019, we adopted ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) using the modified retrospective transition approach as of the period of adoption. Our financial statements for periods prior to January 1, 2019 were not modified for the application of the new lease accounting standard. The main difference between the guidance in ASU 2016-02 and previous accounting principles generally accepted in the United States of America (“GAAP”) is the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under previous GAAP. Upon adoption of ASU 2016-02, we recorded $822 million of right-of-use assets, net of deferred rent, associated with operating leases in investments and other assets in our consolidated balance sheet, $147 million of current liabilities associated with operating leases in other current liabilities in our consolidated balance sheet and $715 million of long-term liabilities associated with operating leases in other long-term liabilities in our consolidated balance sheet. We also recognized $1 million of cumulative effect adjustment that decreased accumulated deficit at January 1, 2019.

Effective January 1, 2018, we adopted the FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) using a modified retrospective method of application to all contracts existing on January 1, 2018. 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. For our Hospital Operations and Other (“Hospital Operations”) and Ambulatory Care segments, the adoption of ASU 2014-09 resulted in changes to our presentation and disclosure of revenue primarily 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 uninsured patients, as well as co-pays, co-insurance amounts and deductibles owed to us by patients with insurance. Under ASU 2014-09, the estimated uncollectable amounts due from these patients are generally considered implicit price concessions that are a direct reduction to net operating revenues, with a corresponding reduction in the amounts presented as provision for doubtful accounts. For the year ended December 31, 2018, we recorded approximately $1.422 billion of implicit price concessions as a direct reduction of net operating revenues that would have been recorded as provision for doubtful accounts prior to the adoption of ASU 2014-09. At January 1, 2018, we reclassified $171 million of revenues related to patients who were still receiving inpatient care in our facilities at that date from accounts receivable, less allowance for doubtful accounts, to contract assets, which are included in other current assets in our consolidated balance sheets. The adoption of ASU 2014-09 also resulted in changes to our presentation and disclosure of customer contract assets and liabilities and the assessment of variable consideration under customer contracts.

Also effective January 1, 2018, we early adopted 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 income tax effects resulting from the Tax Cuts and Jobs Act and requires certain disclosures about stranded income tax effects. We applied the amendments in ASU 2018-02 in the period of adoption, resulting in a reclassification that decreased accumulated deficit and increased accumulated other comprehensive loss by $36 million of stranded income tax effects in the year ended December 31, 2018.

In addition, we adopted ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Liabilities” (“ASU 2016-01”) effective January 1, 2018, which supersedes the guidance to classify equity securities with readily determinable fair values to different categories (that is, trading or available-for-sale) and requires 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. Upon adoption of ASU 2016-01 on January 1, 2018, we recorded a cumulative effect adjustment to decrease accumulated deficit by $7 million for unrealized gains on equity securities.

Reclassifications