TENET HEALTHCARE CORP - 10-Q filing on 2018-04-30

REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES

3 Months Ended

Mar. 31, 2018

REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES

As previously disclosed, as part of the formation of our USPI joint venture in 2015, we entered into a put/call agreement (the “Put/Call Agreement”) with respect to the equity interests in the joint venture held by our joint venture partners. In January 2016, Welsh, Carson, Anderson & Stowe (“WCAS”), on behalf of our joint venture partners, delivered a put notice for the minimum number of shares they were required to put to us in 2016 according to the Put/Call Agreement. In April 2016, we paid approximately $127 million to purchase those shares, which increased our ownership interest in the USPI joint venture to approximately 56.3%. On May 1, 2017, we amended and restated the Put/Call Agreement to provide for, among other things, the acceleration of our acquisition of certain shares of our USPI joint venture. On July 3, 2017, we paid approximately $716 million for the purchase of 23.7% of our USPI joint venture, which increased our ownership interest to 80.0%, as well as the final adjustment to the 2016 purchase price. The purchase price for these additional shares was subject to adjustment for actual 2017 financial results in accordance with the terms of the Put/Call Agreement. See Note 20 for additional information about the subsequent settlement of this adjustment.

The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the three months ended March 31, 2018 and 2017:



	Three Months Ended March 31,
	2018			2017
Balances at beginning of period	$	1,866		$	2,393
Net income	61			53
Distributions paid to noncontrolling interests	(30		)	(27		)
Purchase accounting adjustments	—			11
Accretion of redeemable noncontrolling interests	37			—
Purchases and sales of businesses and noncontrolling interests, net	8			—
Balances at end of period	$	1,942		$	2,430

The following tables show the composition by segment of our redeemable noncontrolling interests balances at March 31, 2018 and December 31, 2017, as well as our net income attributable to redeemable noncontrolling interests for the three months ended March 31, 2018 and 2017:



	March 31, 2018		December 31, 2017
Hospital Operations and other	$	526	$	519
Ambulatory Care	1,186		1,137
Conifer	230		210
Redeemable noncontrolling interests	$	1,942	$	1,866



	Three Months Ended March 31,
	2018		2017
Hospital Operations and other	$	6	$	4
Ambulatory Care	35		35
Conifer	20		14
Net income attributable to redeemable noncontrolling interests	$	61	$	53