Greetings, and welcome to the Tenet Healthcare Corporation Fourth Quarter 2019 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Regina Nethery, Vice President, Investor Relations. Please go ahead.

All right. We're pleased to have you joined us for a discussions of Tenet's fourth quarter and full year 2019 results as well as the company's outlook for 2020. Participating in today's prepared remarks will be Ron Rittenmeyer, Executive Chairmen and Chief Executive Officer and Dan Cancelmi, Executive Vice President and Chief Financial Officer. Saum Sutaria, President and Chief Operating Officer, will also be joining Ron and Dan for question-and-answer portion of today's call.Our webcast this morning includes an accompanying slide presentation, which has been posted to the Investor Relations section of our Web site, tenethealth.com. Our fourth quarter earnings press release and a news supplemental financial disclosures document have also been posted to our Web site.Listeners to this call are advised that certain statements may during our discussion today are forward-looking and represent Tenet management's expectations based on currently available information. Actual results and plans could differ materially. Tenet is under no obligation to update any forward looking statements based on subsequent information. Investors should take note of the cautionary statement slide included in today's presentation, as well as the risk factors discussed in our most recent Form 10-K and other filings with the Securities and Exchange Commission.Now I’ll turn the call over to Ron.

Thank you, Regina. Good morning, everyone. I would like to take a few minutes to recap 2019 and focus on our 2020 priorities before Dan discusses the quarter and the year in greater detail. Slide 4 captures our results for the fourth quarter and all of 2019. We view the fourth quarter as a solid performance across the enterprise. We were very aware of the skepticism of the guidance of our guidance at the third quarter call, and we realized there were some concerns as to our ability to make the end of the year as we had projected. This result represents the energy and dedication of our team, demonstrating the sustainable changes we are making, the rigor of our discipline and the consistent follow through on our commitments.Enterprise performance was very strong, with several key financial metrics up significantly year over year. Adjusted EBITDA by segment was up over 15% in our hospitals, over 24% in our ambulatory centers and over 8% at Conifer with 490 basis point improvement in Conifer’s EBITDA margin. The uptake in patient volumes in our care delivery platform was particularly notable.Across admissions, adjusted admission and ambulatory surgical cases, we produced an increase of roughly 2% to 3.5%. This was a solid result in line with our expectations and a continuation of the changes we've made over the last two years. Combined with the well maintained costs and other activities to drive performance on the bottom line, we had a really solid quarter for Tenet overall. Consolidated adjusted EBITDA grew more than 17%, which was above the midpoint of the outlook we provided roughly 12 months ago.Slide 5 has a quick snapshot of the key elements that when taken together all work to support sustainable performance and build a solid foundation for the continuous improvements…

Thanks Ron. Good morning, everyone. As Ron mentioned in his remarks, we produced a strong quarter. Slide 10 provides several highlights. On a consolidated basis, our fourth quarter adjusted EBITDA was up nearly 18%. This was primarily driven by double-digit growth in both the hospital and ambulatory segments, with our hospital segment up nearly 16% and the ambulatory segment up about 24%. Conifer also performed well growing adjusted EBITDA by 8% and increasing its margins by 490 basis points year-over-year.A key factor driving the results for both the hospital and ambulatory businesses was the continuation of our patient volume growth and solid pricing and revenue yield. Our hospital adjusted admissions grew 1.9%, which is the fourth straight quarter of growth in this metric. USPI produced strong surgical volume growth of 3.4% and USPI's total volumes, including imaging and urgent care cases, grew 5.7%, which is the ninth straight quarter of total case growth in our ambulatory business. Conifer continues to drive its growth through cost efficiencies.The incorporation of real time data into our decision making in 2019, a continued focus on the basics in our culture of accountability and cohesiveness, are all working together to help to ensure our patients and physicians are pleased with their Tenet experience, furthering our prospects for additional growth.Turning to EPS. Our full year U. S. GAAP loss was $2.35 per share. However, our adjusted EPS was income of $2.68 per share, which is earnings growth of 44%. The GAAP loss was primarily due to charges for our restructuring initiatives and early debt retirement costs related to our refinancings at locked in attractive interest rates, which reduced interest payments and cleared out any significant debt maturities until April, 2022.Turning to cash flows. We closed the year strong and we were very pleased that our net…

Thanks Dan. I would simply add that, I agree with Dan, we did deliver a very solid quarter. We've taken steps to make our cost savings a reality. We're going to continue to improve and tighten our overhead, successfully execute a complex offshore strategy, which is well underway. We have improved quality and care delivery. We ratified 16 labor contracts successfully. We are planning and executing the Conifer spin on schedule, while continuing to deliver good results. And we combined our three functional headquarters into a single effective efficient location.This was really all possible due to the culture changes that have taken hold, the willingness to seek new approaches and solutions and the overall team that leads this company. While we've not declared victory, we are today an entirely different company and we are committed to continued success. So would that, operator, I believe we'll open for questions.

Thank you. At this time, we’ll be conducting a question-and-answer session [Operator Instructions]. Our first question comes from A. J. Rice with Credit Suisse. Please proceed with your question.

First of all, obviously on Conifer since we last spoke I guess you've announced the CEO addition there and that was a major milestone as you were thinking about moving toward the spin-off. Are there any other operational milestones that need to be checked, or is the focus on just moving a pace toward getting the spin-off in place by mid next year? And with his initiatives that he's going to implement, how long before you think -- obviously, you've made progress on the cost side, but maybe before the top-line starts to show growth again?

This is Ron. Thanks for the question. I would just answer it this way. I mean, he's been on board 10 days. So I can't tell you exactly what is, what our next, when he will hit some of those issues. But we are very well aware of them and he's very engaged in that stuff. So I'm just going to hold that for now, because setting some arbitrary date that we're going to all of a sudden see growth signed contracts. We were already starting down that road. It's really up to him to build out a sales team and make sure that we continue to execute that, but I can't give you a precise date.Well, you asked about operational initiatives, obviously, growth is one of them and we see that as very important. And then there's just several other things that we believe are important operationally internally to keep doing, which includes continuing to really evaluate whether or not we've got all the right people in the right roles. We're going to go deep and long on that as you would expect a new leader to do, and that was part of the plan.And then beyond that, we're going to continue down the path of some of the deals that are in play, see if we can get those closed and then we've got some other things that we're working on that really is more of a competitive conversation that it needs to stay internal now. But look I'm very excited about having the CEO on board. I think hiring Joe was probably one of the most important things we had on the list to get done, and it is done. And so now we just got to let it play out accordingly.But the rest of the stuff we have, there’s a timeline and schedule are pretty well buttoned up. We have work streams. We meet on them frequently. We have a cadence to it. All the various things you can ever think of are happening. We have teams dedicated to doing it. So I'm pretty comfortable that we are well within the sites of getting this done as planned. I don't see any road bumps…

And maybe one follow up would be, on the cash flow commentary. Obviously, as you move towards solidly generating meaningful free cash flow. When you think about low capital spending on the hospital side, you think about the opportunities for de Novo and acquisition tuck-ins on the USPI side. Will we see an increase in spending level on either of those areas? Or does that increased free cash flow mainly go to paying down debt?

This is Dan. Certainly, we continue to drive additional free cash flow, we will certainly look and I would say the two key priorities are investments in our ambulatory assets. The pipeline as we mentioned is incredibly strong, so we think there are a lot of good opportunities there. Paying down debt also is very important. And so as we generate free cash flow and as we've announced that we will be selling our Memphis facilities with proceeds of around $350 million. So certainly looking at reducing debt certainly a priority of the company in terms of reducing absolute dollar amount of debt, as well as reducing the leverage ratio, which obviously as we continue to drive earnings growth will help there as well.Now that doesn't mean we won't make any investments in the hospital business. We're making very strategic investments to grow certain service lines. And I think what you're seeing is starting to yield some returns in terms of volume growth that we saw this year. So we’ll continue to look for opportunities to allocate capital where we think we're going to generate the highest return.

The next question comes from Pito Chickering with Deutsche Bank. Please proceed with your question.

If you would say you're on the acute business, same store revenues here continue to grow quite well. Let's take the exchange admission growth was very high this quarter. Can you sort of walk us through surgeries for 2020 versus 2019 and exchange admission growth in 2020 versus 2019. How that's baked into your adjusted admission guidance?

Pito, it’s Saum, couple of couple of points. First of all, the exchange enrollment in 2020 is strong, especially in many of the states in which we operate. And you probably have seen some of the strongest numbers being in California. Our strategy has been consistent what Dan talks about with respect to our contracting in overall managed care. We've also had a very successful strategy over the years of being in network in many of the exchange programs and we continue to pursue those strategies. We think the exchange business is one that we can serve well in our acute care and ambulatory facilities. And so we expect to continue to perform in the exchange business going forward.I would say that on the second part of your question with respect to surgeries and frankly procedural based care. As you know over the past year, we've been focused in virtually all of our markets on shifting some of our strategic focus and deployment of clinical technology capital to be able to expand our surgical and procedure based services, including in an environment where some of that business is moving into the outpatient setting. We want the hospitals in the acute care setting to remain competitive and we will continue to make those investments and make surgical care a priority in the hospitals in 2020.

And then for follow up, you have put out a leverage target for 2020, and I know that there's a lot of moving pieces like the divestitures that can occur this year and move that around but assuming that the Memphis hospital sales. Can you give us a range of where we should expect leverage to be in 2020 versus the end of 2019? Thanks so much.

Pito, it’s Dan. Certainly, again as I mentioned to A. J., as we have available free cash flow or proceeds from divestitures reducing debt is very important for us. And we have various tranches of notes that become callable this year at reasonable premiums. So we have flexibility and optionality in terms of reducing some debt this year either from free cash flow or asset sales. Now in terms of a leverage target, obviously, we want to get it below five and we've talked about that. We haven't set a specific target for the end of this year but certainly as we grow our cash flow generation and have proceeds, certainly one of the first areas we're looking at is reducing debt. And again, it all depends on opportunities out there from an investment perspective, whether that's ambulatory opportunities or any investments in the hospital side.

Our next question comes from Ralph Giacobbe with Citigroup. Please proceed with your question.

I was hoping you could talk a little bit more about the margin opportunity in the hospital segment. You had 100 basis points sort of expansion in the fourth quarter. I know you're flat for 2019. At the midpoint of guidance, it actually looks flattish maybe even down a tad, and hoping you can discuss that a little bit more on. And do you have margin target and what's the trajectory to get there? Thanks.

Ralph, it's Dan. Good morning. In terms of the hospital margins, they did improve nicely in the fourth quarter year-over-year. When we look at 2020 as you see on our walk from '19 to '20, the hospital margins are essentially flat down about 10 bps. But there's a couple things there that really had an impact on that and we called it out on our bridge in terms of some of the DSH reductions that are flowing through. Listen, we are obviously focused on continuing to improve our margins in our hospital business. As we continue to grow volumes, we will be able to take advantage of our operating leverage, we have available capacity in most of our facilities, so we can add incremental business and be able to spread fixed costs out over larger book of business.So it’s certainly what we're targeting in terms of as we move forward. We've got certainly very good visibility in the pricing moving forward, not only this year but into 2021. We continue to believe we'll be able to continue to manage costs very well. And it comes down to can we continue to drive volume growth in the hospital business. We close out the year strong and we’re obviously looking forward to continuing to deliver this year.

Ralph, this is Saum. The only thing I would say in addition to that is, obviously, we're very focused accretive rather than dilutive growth. And so, we got a lot to step over in 2020 from the standpoint of the payment cuts that were described in the supplementary materials. But the reality is that this is a year as we’ve established acute care growth in the business, we've also got more focused on profitable acute care growth and/or service line prioritization with a little bit more depth that will hopefully yield more margin expansion. We're very focused on it.

And then just follow up, I was hoping you can little bit about more about the commercial volume trend in the quarter, maybe how it compare to sort of the second and third quarter. And then on top of that, just any flu impact in the fourth quarter and if you’re willing to discuss sort of first quarter where you're seeing both in terms of flu and obviously a lot of headlines around corona virus? Thanks.

Sure, let me take that in reverse order. Obviously, we're monitoring the corona virus situation very carefully. There hasn't been any significant impact on the business or even clinical impact yet, but we're very well prepared across all of our facilities between USPI, the hospitals, the physician clinics and even our global business center. We've put a lot of effort into making sure that we're prepared to handle whatever may come, obviously, with the degree of uncertainty around how that may expand in the United States, so we'll see.The flu has really not been a material driver in the fourth quarter of in-patient activity. I'm sure that lower acuity visits with the flu in the urgent care platform have been helpful in terms of our attractive nonsurgical ambulatory numbers, but that's pretty much where we've seen the impact of the flu so far within the portfolio. On the commercial volume side, obviously, we're very focused on measuring our ability to attract commercial patients and our physicians’ ability to attract commercial patients to the services that we're able to offer, both elective and emergent services.And we're pleased with the fact that the prior multi-year trends of significant commercial volume declines have stemmed at this point in a commercial market that's not necessarily growing. It's a testament to the work that the operators are doing in their markets to make our assets more accessible, more attractive and provide the services they're looking for. So we remain very optimistic about our success on the commercial volume front in 2019 and carrying that into 2020.

Our next question is from Kevin Fischbeck with Bank of America Merrill Lynch. Please proceed with your question.

Question on the cost growth, the guidance that you guys gave on the cost growth. Is that net on the hospital side, net of the $110 million of cost savings, and I guess really what’s driving that cost growth?

Kevin, it’s Dan. It is the net costs efficiencies that we will capture this year as we close out our various actions that we talked about as part of our $450 million program. In terms of the overall cost growth, manage costs very well the past several years we expect that to continue. Certainly, as we continue to make certain investments to grow the business that's part of when we think about our cost structure for this year and beyond, so we're making certain investments to grow the business. And we think it's already begun to yield results and we’ll continue to look for those type of opportunities. So yes, those cost initiatives are baked into our cost growth outlook.

And you outlined a few rate cuts that were kind of headwinds to growth this year, but I guess even if we added those back, you're still talking about costs growth that's above pricing growth. So I guess as we think about in the future, how do we get to a point where your pricing growth is at least your cost growth. Is it about improving pricing outlook, or is it about improving the cost side, or is it you just need to grow volumes and that's really that’s all? Thanks.

So it’s really both. The revenue reductions related to DSH, if you normalize for them you have cost growth pretty much in line with the revenue yield. So there are some key investments that we began to make in 2019, and we'll make some additional investments this year and that gets included into our costs. And we obviously will be looking to do better. But right now from where we sit, we think that this is a reasonable range at this point.

Our next question comes from Josh Raskin with Nephron Research. Please proceed with your question.

I wanted to ask on the ASC side or the USPI side overall, looks like the center count actually fell and maybe I just don't have the numbers right there sequentially. That looked unusual for sort of 4Q and I know you've made some comments of the pipeline. So just wondering if something specific happened there? And then more broadly as you look at surgeries in markets where you've got a big ASC presence or a system partnership, et cetera. Are you seeing a situation where you're capturing volumes that are moving out of Tenet hospitals? Or do you think you're actually taking share on the overall surgery volumes in those markets?

Josh, this is Brett. Quick answer to your question, first, I'd say related to the facility count in Q4. We always kind of go through a process of looking to optimize our portfolio. In Q4, we did eliminate a couple of facilities that were no longer strategic for us. And we essentially either sold or close those facilities. It's a normal part of our portfolio optimization process. In terms of the pipeline overall, I mean we continue to have a very strong pipeline of acquisitions and de novos, and we had a number of deals that slipped from Q4 to Q1 since we hadn't completed due diligence and we won't close on those as you know, and so we are ready. As a result, we feel really good as Ron and Dan alluded to about achieving the $150 million in spend in 2020. In addition, although we only invested $50 million for the year, it was heavily weighted toward de novos. Therefore, the 2019 investment is projected to produce a comparable level of earnings once the de novos those ramp up to what would have occurred with a higher level of investment.I would say, to answer your second question related to share, yes, I mean, when you look at the business development activity that we're pursuing across the portfolio, there is a heavy emphasis on attracting physicians that are not part of our facilities, not a part of our network and adding new facilities and new service lines to our portfolio. Just to give you an example in 2019, we added 70 distinct service lines to 70 of our facilities across the portfolio primarily in the areas of spine, total joint, cardiac and robotic-assisted surgery. So when you do that, you not only obviously build additional business from your existing medical staff, but when you add those service lines, you're also attracting new physicians to your portfolio, which obviously translates into accretive growth.

The next question is from Matt Larew with William Blair. Please proceed with your question.

I wanted to ask quickly about capital allocation obviously. You've talked about the pipeline on the ASC side. But over the last several calls, you've also been talking about a pivot toward patients with chronic illnesses. Just wanted a sense for how you balance capital allocation here in 2020 and then what particular high acuity service line that you were targeting in terms of driving growth on the Hospital side in 2020.

It's Saum, a couple of different things here. First of all, the strategy of continuing to pursue a service portfolio that's best suited for people with multiple chronic illness, again whether it's acute emergent or elective care is still what we're focused on in 2020. Yeah, the balance of the capital investments across the portfolio, whether it'd be the Ambulatory segment, the acute care segment or even into specific service lines is really based upon, as Ron has described, a much more disciplined process of simply outlining market opportunity and return on investment that we expect from those investments. I mean we look at all of them with a level of rigor now that gives us a sense of how we should prioritize those investments and at the same time, take into consideration the fact that in some markets we're making investments to really lead the market and in some markets, we're making investments to improve our competitive position, but we may not be in a leading position, and you've got to make both sets of investments in order to continue to grow the business and expand the margins.In terms of the service lines, when you look at the patients who have chronic illness, especially those that are younger and with commercial insurance, you're really talking about a combination of broad-based bone and joint, the orthopedics and spine, cardiovascular and by that, it's a pretty broad definition of cardiovascular and increasingly, you're seeing more demand in the neurosciences area. The other thing to remember is the fundamentals of our acute care hospitals, which include trauma and general surgery continue to be growth opportunities in our markets and we continue to evaluate opportunities to expand an already large pool of trauma services that we offer in order to ensure that we're providing the right range of emergency services that often those patients require. So I would say that it's a pretty focused range. I mean, the things that are less acute and have moved into the outpatient setting and a really growing more in our Ambulatory facilities are less the area of focus from a capital standpoint in the acute care hospitals.

It's Regina. We're running a little tight on time so if we could limit your questions to just one and we'll take the follow-ups if time allows. Thank you.

Our next question comes from Brian Tanquilut with Jefferies. Please proceed with your question.

So I guess just my question as I look at the revenue per adjusted admission guidance for 2020, 1.5% to 2.5%. That's slightly lower than where you've been trending. So is there anything to call out there or is that just conservatism? And then what is assumption embedded in that on California Provider and timing? Thank you.

Brian, it's Dan. The reductions in the disproportionate share revenue that I mentioned that we have on our bridge whether there is the Medicare DISH reductions or the Medicaid reductions, that's what's having an impact on our aggregate pricing growth. Our commercial book of business, as I mentioned, were almost fully contracted this year and the pricing yield there should be very consistent with what we've been generating over the past several years. So we feel really good about that, but these reductions that kicked in related to the Affordable Care Act is really what is having an impact on that.

Our next question comes from Whit Mayo with UBS. Please proceed with your question.

Maybe just for Dan or Brett, I'm still struggling a little bit with USPI's revenue growth in the quarter. Consolidated revenues were up over 14%, which is twice the rate of the same-store revenue growth in the quarter and the consolidated segment usually grows much slower than the systemwide number. So is there anything else that contributed to the strong top line growth? You mentioned acquisitions weren't really a factor, maybe there was some de novos. I'm just having a tough time reconciling the growth. Thanks.

This is Owen Morris. This is CFO of USPI. We did see a strong organic growth in the quarter. If you see the 7.3% overall systemwide, it's reflective of the consolidated assets, performed really well. Even though we had a smaller volume, the normal in 2020, we actually continue to grow significantly in the quarter. So that was also a strong contributor, so there is no real outliers in this Q4 to this year.

What bridges the difference between the 14% growth and the 7.5% growth? I mean, presumably that's some level of inorganic acquisitions or de novos. I'm just struggling to figure out.

Yes, exactly. We had really strong well -- the acquisitions that we did produce strong consolidated revenues for us. And that was a contributor.

As well as in the fourth quarter last year, we closed some deals, but we didn't necessarily have a full quarter of revenue last year.

Our next question comes from Sarah James with Piper Sandler. Please proceed with your question.

Thank you. I was hoping you could give us a little bit more color on what the decision process looks like when you're deciding to do the service line expansion. So, what level of insight do you have on volume shifting sites of care, what type of data and analysis is available to you to inform your decisions on service line expansions? Thanks.

This is Saum. I mean, it's a broad question, and I'll try to address it this way, which is the types of things that we tend to look at are the underlying market growth, the demographics in the market. The utilization patterns that we see, the nature of the insurance coverage, the best site of care from the standpoint of cost, quality and service with respect to any particular clinical program and obviously, the ability to work with high-quality physicians that are able to provide those services in an effective and safe manner everywhere we go.And then obviously, our own internal data helps us understand our ability to provide those services in a way that's margin accretive. And so, there is a combination of market data, demographic data, competitive data and obviously, internal cost accounting data that goes into helping us think about where and how and in which markets to make certain types of service line investments, but again I would emphasize there's a qualitative component to this as well, which is you've got to have good practitioners that are willing to sign up for the types of quality programs that you want to build who choose to affiliate with us. And so, it's a combination of analytics and also just the on-the-ground legwork, trying to find those providers that are willing to build with you in that way.

Our next question comes from Justin Lake with Wolfe Research. Please proceed with your question.

Thanks, good morning. I wanted to follow up on Conifer, more around how should we think about the timing of the information flow on Conifer. Now that you have a CEO, I'm thinking about the financial structure in terms of the debt signs of the Conifer spin, SEC filings necessary for the spin and the length of the contract with Tenet, et cetera.

We have a schedule to do that. It's spread out over the next year. I mean, we're talking about June of 2021. So we're a little bit over a year out. So some of what you're asking for will not be really discussed until actually the beginning of 2021. We're not in a position today to pay with debt. We'll look at in terms of debt-for-debt exchange. We had the process in place. But we're not ready to get to that point. There'll be a lot that will happen between now and then relative to hopefully its own growth and the Company itself. It's obviously a large cash producer. So it's a very important consideration when we get to that point, but we're not prepared to do that.So in terms of releasing of information, I think other than talking about the fact that we're on schedule and that we're finishing these lines, the addition of the CEO, other changes we will make to the infrastructure in announcing any deals we do, I don't see the technical things you're asking about really coming to bear until probably sometime right after the first of the year or certainly no earlier than the end of the year at this stage. I think that's pretty much what we're targeting at this point, because otherwise, we're going to debate certain points forever, and we're going to be putting out opinions, not facts. So I think we'll be doing that toward the end of the year. So I hope that answers your question.

Thank you. Our next question comes from Gary Taylor with JP Morgan Chase. Please proceed with your question.

I wanted to ask a few questions about cash flow and certainly appreciate you ended up hitting your cash flow guidance for the year that looks maybe questionable to some even through the third quarter, but you stuck to your guidance and you hit it, so congrats on that. Couple of questions for next year, this will be sort of the fourth year in a row where there is a couple of hundred million of restructuring litigation. So wanted a little color, I presume the Oklahoma settlement is that isn't that wondered what else was in that. And then secondly, are we correct that if you hit your 2020 guidance, federal NOLs will be exhausted and you becoming cash taxpayer in 2021?

Gary, it's Dan. Let me address that. In terms of free cash flow this year, so adjusted free cash flow is $875 million as we also disclosed in our guidance, we do have a projection for investments we will make or payments we will make related to either restructuring activities as we continue to transform the business or the legal matter that you mentioned. The legal matter that you mentioned, we disclosed that last quarter. That is in our projection for cash outflows for this year. So $875 million, there is roughly at the midpoint.There is about $213 million of restructuring payments and litigation payments we will make. We get this question a lot. The number of what's the anticipated level moving down the road, as we continue to go through our transformation, we will continue to have some of those a level of payments. I'm not sure they ever entirely go away 100%, but certainly the legal matter that something that would be behind us after this year, and we anticipate those type of investments would move down as we go into 2021 and beyond.

Our next question comes from John Ransom with Raymond James. Please proceed with your question.

I'm going to terrify you and attempt to do some math and just to make sure we are in the zip code. So, if we take the low-to-high cash flow guidance for 2020, we back out to $220 million to $225 million of litigation, $350 million to $370 million of NCI and then assume $150 million for USPI M&A, that's our estimate. And then we throw in $350 million for the Memphis asset sale, which I know it's not in your guidance. We're getting somewhere of $400 million to $600 million approximately of actual cash available to pay down debt. Is there something or anything you'd call out of that math that we're missing something.

No, that's right John. Again, I think you did the math right and you start with $875 million of adjusted free cash flow, a little over $200 million for the restructuring and investments and litigation payments, the non-controlling interest payments to our partners and predominantly in our Ambulatory centers, which are doing incredibly well. That's about $360 million at the midpoint. And then if you take into consideration, we anticipate sales proceeds from sale of the Memphis facilities of around $350 million. We'll have some available cash generation to be able to really look hard at it reducing debt.Absolutely, I mean it's not like we're going to be selling every facility in the Company. And we've been very clear that we continue to look at the portfolio and if it makes sense, there may be some assets within the portfolio that we would divest and obviously, continue to refine the portfolio and look for those types of opportunities to redeploy that capital.

We have reached the end of the question-and-answer session. At this time, I'd like to turn the call back over to Tenet management team for closing comments.

Well, I don't know much more to add. This is Ron Rittenmeyer. I just want to say thank you for joining us today. And of course, follow-up is available through Regina and anything that's needed, we'll try to be responsive as timely as possible. So with that, thank you very much.

This concludes today's conference. You may disconnect your lines at this time and we thank you for your participation.