Tenet says projections of volumes and earnings difficult amid uncertainty

Tenet said: "Due to the uncertainty of the current environment, projections of volumes and earnings for the remainder of the year create difficulty in predicting, with any precision, full year guidance. Significant impact from the pandemic is anticipated in 2Q20 with stabilization and recovery targeted in the second half of this year. The company may provide updates as events unfold over the next several months." Tenet added: "The company's 1Q20 operating performance was strong and ahead of expectations through mid-March 2020, reflecting the continued growth and operational discipline demonstrated in its results for 2019. However, since mid-March the COVID-19 pandemic has resulted in a material reduction in patient volumes associated with governmental orders limiting non-essential procedures and mandating "shelter in place," plus general apprehension among the public. Patient volumes impacted include emergency room visits, admissions, elective surgeries and other procedures. In addition, a substantial portion of the company's USPI ambulatory surgery centers have been closed and other centers are operating with very limited hours. The Company has an established and tested support structure in place to protect its caregivers and patients and manage infectious agents, including facility deep cleaning processes and appropriate security precautions. The company proactively planned for COVID-19 by making additional investments to enhance its inventory of personal protective equipment and other supplies. The company has encountered significantly higher prices for such supplies, but believes it currently has adequate supplies on hand. The company has taken various actions to mitigate the impact of COVID-19, including enhancing its liquidity by issuing $700 million of secured notes in April 2020 and increasing its line-of-credit borrowing capacity from $1.5 billion to $1.9 billion in April 2020, reducing its planned capital expenditures this year by $300 million, reducing discretionary spend, and flexing down costs or furloughing employees due to reduced patient volumes that do not impact the ability to provide care to current patient volume levels. The company is extensively planning how its businesses will ramp back up as government-imposed restrictions are lifted to protect the safety of all of its constituents and ensure resources are deployed appropriately for the volume levels as they recover."