TENET HEALTHCARE CORP - FORM 8-K - EX-99.1

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8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - TENET HEALTHCARE CORP	a12-5965_18k.htm

Exhibit 99.1

Tenet Reports Fourth Quarter 2011 Results

4.6 Percent Increase in Adjusted EBITDA

5.4 Percent Increase in Net Operating Revenue

Company Raises 2012 Outlook for Adjusted EBITDA

DALLAS — February 28, 2012 — Tenet Healthcare Corporation (NYSE:THC) today reported Adjusted EBITDA of $294 million for the fourth quarter ended December 31, 2011, an increase of $13 million, or 4.6 percent, compared to $281 million for the fourth quarter of 2010. The Adjusted EBITDA margin in the quarter was 13.2 percent, compared to 13.3 percent in the fourth quarter of 2010.

In the fourth quarter of 2011, the Company reported a net loss attributable to common shareholders of $76 million, or a loss of $0.17 per diluted share, compared to income of $74 million, or $0.14 per diluted share, in the fourth quarter of 2010. These results included a $117 million pre-tax loss from early extinguishment of debt incurred in relation to Tenet’s strategy to extend debt maturities and reduce future interest expense. Excluding impairment, litigation and investigation costs, loss from early extinguishment of debt, and valuation tax adjustments from both fourth quarters, income from continuing operations, net of tax, was $42 million, or $0.10 per diluted share, compared to $43 million, or $0.08 per diluted share, in the fourth quarter of 2010.

“We recorded our eighth consecutive year of growth in Adjusted EBITDA which grew to $1.145 billion in 2011, a 9.0 percent increase over 2010,” said Trevor Fetter, president and chief executive officer. “The growth would have been even stronger had we been able to close some of the favorable payer settlements we have been working on for a number of months. Because the settlements remain likely, we are raising our 2012 Outlook for Adjusted EBITDA to a new range of $1.225 billion to $1.350 billion. We also recorded our fifth consecutive quarter of growth in adjusted admissions which grew by 1.3 percent. The favorable growth in patient volumes, combined with strong pricing growth, enabled us to achieve a 5.4 percent increase in net operating revenues in the quarter.”

Discussion of Results (Percentage changes compare Q4’11 to Q4’10, unless otherwise noted.)

Adjusted admissions increased by 1.3 percent. Admissions increased by 0.3 percent, and paying admissions were flat. Emergency Departments visits increased by 3.1 percent, and there was a 3.3 percent increase in admissions through our Emergency Departments. Total surgeries increased by 3.2 percent with inpatient surgeries declining by 3.1 percent and outpatient surgeries increasing by 7.6 percent.

Net operating revenues were $2.226 billion, an increase of $115 million, or 5.4 percent, compared to net operating revenues of $2.111 billion in the fourth quarter of 2010. As a result of the Company’s early adoption of a new accounting standard, net operating revenues are now reported after a deduction for the provision for doubtful accounts. Under the Company’s prior reporting standard, net operating revenues would have been $2.411 billion, an increase of 4.8 percent, compared to $2.301 billion in the fourth quarter of 2010.

Net patient revenue per adjusted admission was $11,633, an increase of 2.3 percent, compared to $11,370 in the fourth quarter of 2010. This pricing increase reflects improved terms in our contracts with commercial managed care payers, partially offset by an adverse shift in payer mix.

Selected operating expenses, which is defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased by 6.5 percent on a per adjusted patient day basis in the fourth quarter of 2011. The increase is primarily due to annual merit increases, an increase in the number of physicians we employ, and higher health benefit costs for our employees. The comparison to last year’s fourth quarter was made more challenging by a $10 million favorable adjustment in that quarter related to the estimated recovery of payroll taxes paid in prior years on behalf of medical residents. Selected operating expenses were also adversely impacted by lower

interest rates at quarter-end which contributed $14 million of increased expense between the fourth quarter of 2011 and 2010. Although claims experience for both malpractice and workers’ compensation expense continue to be favorable, lower interest rates increased the balances of these discounted liabilities. Supply costs were well-controlled, declining by $3 million, and were flat on a per adjusted patient day basis. Excluding the expenses from additional physician employment, the favorable payroll tax adjustment in the 2010 quarter, and expenses related to lower interest rates, the 6.5 percent increase in selected expenses per adjusted patient day would have been 4.4 percent.

Bad debt expense was $185 million, a decline of 2.6 percent, as compared to $190 million in the fourth quarter of 2010. Bad debt expense as a percent of revenues before provision for doubtful accounts declined to 7.7 percent, a decline of 60 basis points compared to 8.3 percent in the fourth quarter of 2010. The improvement in bad debt expense primarily was due to favorable adjustments related to updates to our estimates of collection rates in the fourth quarter of 2011 compared to unfavorable adjustments in the fourth quarter of 2010. The change in bad debt expense also was impacted favorably by deterioration in the age of managed care receivables in the fourth quarter of 2010 that did not occur in the fourth quarter of 2011.

Cash and cash equivalents were $113 million at December 31, 2011, a decrease of $72 million from $185 million at September 30, 2011. Cash used in the fourth quarter of 2011 included $178 million to repurchase 40.3 million shares of the Company’s common stock and $28 million for the purchase of five outpatient centers and certain assets related to acquired physician practices. Capital expenditures were $177 million in the fourth quarter of 2011, compared to $196 million in the fourth quarter of 2010. As of December 31, 2011, the Company had an outstanding balance of $80 million on its credit line.

Through December 31, 2011, the Company repurchased an aggregate total of 75.8 million shares of common stock since announcing its $400 million share repurchase program in May, 2011. These 75.8 million repurchased shares represent 15.5 percent of outstanding common shares at the time the program was initiated. The average repurchase price was $4.94 per share for a total expenditure of approximately $374 million. At December 31, 2011, there were 415 million shares of common stock outstanding. The full $400 million common stock repurchase program was completed in January 2012. In total, 81.1 million shares, or 17 percent of our outstanding shares, were repurchased at an average price of $4.94.

Outlook for Adjusted EBITDA

Tenet raised its 2012 Outlook for Adjusted EBITDA to a new range of $1.225 billion to $1.350 billion. Other than expected outpatient acquisitions, the Company’s 2012 Outlook represents purely organic growth.

Adjusted EBITDA in the first quarter of 2012 is expected to comprise approximately one-fifth of the Company’s total Adjusted EBITDA for the year. This reflects the expectation that the approximately $140 million in state provider fees will be recognized in the second half of the year. In addition, the expected ramp up of Tenet’s strategic initiatives, including cost efficiencies related to the Medicare Performance Initiative and incremental outpatient acquisitions, are expected to make more significant contributions to earnings in the second half of the year.

Tenet reconfirmed its 2013 Outlook range for Adjusted EBITDA of $1.335 billion to $1.535 billion. The 2015 Outlook range for Adjusted EBITDA, which includes the increased coverage of the uninsured pursuant to the Affordable Care Act, was reconfirmed at $1.75 billion to $2.25 billion.

Tenet’s statements on outlook constitute forward-looking information and are subject to the qualifications set forth at the end of this release.

Management’s Webcast Discussion of Fourth Quarter Results

Tenet management will discuss fourth quarter 2011 results on a webcast scheduled for 10:00 AM (ET) on February 28, 2012. This webcast may be accessed through Tenet’s website at www.tenethealth.com/investors. A set of slides that management intends to refer to on the call will be posted to the Company’s website at shortly before the start of the webcast.

Additional information regarding Tenet’s quarterly results of operations, including detailed tabular operational data, is contained in its Form 10-K report, which will be filed with the Securities and Exchange Commission and posted on the Tenet investor relations website before today’s webcast. This press release includes certain non-GAAP measures, such as Adjusted EBITDA. A reconciliation of Adjusted EBITDA to net income attributable to Tenet common shareholders is included in the financial tables at the end of this release.

Tenet Healthcare Corporation, a premier health care services company, operates 50 hospitals, 99 free-standing outpatient centers and Conifer Health Solutions, a leader in business process solutions for health care providers that serves over 250 hospital and health care entities nationwide. Tenet’s hospitals and related health care facilities are committed to providing high quality care to patients in the communities they serve. For more information, please visit www.tenethealth.com.

Media: Rick Black (469) 893-2647		Investors: Thomas Rice (469) 893-2522
Rick.Black@tenethealth.com		Thomas.Rice@tenethealth.com

# # #

This document contains “forward-looking statements” — that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include the factors disclosed under “Forward Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2011, our quarterly reports on Form 10-Q, periodic reports on Form 8-K and other filings with the Securities and Exchange Commission. The information contained in this earnings release and the attachments is as of February 28, 2012. The Company assumes no obligation to update forward-looking statements contained in this earnings release or the attachments as a result of new information or future events or developments.

Tenet uses its company website to provide important information to investors about the company including the posting of important announcements regarding financial performance and corporate developments.

TENET HEALTHCARE CORPORATION

CONSOLIDATED OPERATIONS DATA

(Unaudited)

	Three Months Ended December 31,
(Dollars in millions except per share amounts)	2011			%		2010			%		Change

Net operating revenues
Revenues before provision for doubtful accounts	$	2,411				$	2,301				4.8	%
Less provision for doubtful accounts	185					190					(2.6	)%
Net operating revenues	2,226			100.0	%	2,111			100.0	%	5.4	%
Operating expenses:
Salaries, wages and benefits	1,029			46.2	%	967			45.8	%	6.4	%
Supplies	391			17.6	%	394			18.7	%	(0.8	)%
Other operating expenses, net	517			23.2	%	469			22.2	%	10.2	%
Electronic Health Records Incentives	(5		)	(0.2	)%	0			—	%	—	%
Depreciation and amortization	105			4.7	%	101			4.8	%	4.0	%
Impairment of long-lived assets and goodwill, and restructuring charges, net	9			0.4	%	9			0.4	%
Litigation and investigation costs	31			1.4	%	6			0.3	%
Operating income	149			6.7	%	165			7.8	%
Interest expense	(100		)			(101		)
Loss from early extinguishment of debt	(117		)			(2		)
Income (loss) from continuing operations, before income taxes	(68		)			62
Income tax benefit (expense)	12					(2		)
Income (loss) from continuing operations, before discontinued operations	(56		)			60
Discontinued operations:
Income (loss) from operations	(2		)			15
Litigation and investigation costs	(17		)			—
Income tax benefit	9					7
Income (loss) from discontinued operations	(10		)			22
Net income (loss)	(66		)			82
Less: Preferred stock dividends	6					6
Less: Net income attributable to noncontrolling interests	4					2
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders	$	(76	)			$	74

Amounts attributable to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax	$	(66	)			$	52
Loss from discontinued operations, net of tax	(10		)			22
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders	$	(76	)			$	74

Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders
Basic
Continuing operations	$	(0.15	)			$	0.11
Discontinued operations	(0.02		)			0.04
	$	(0.17	)			$	0.15
Diluted
Continuing operations	$	(0.15	)			$	0.10
Discontinued operations	(0.02		)			0.04
	$	(0.17	)			$	0.14
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	432,454					485,549
Diluted	432,454					561,921

TENET HEALTHCARE CORPORATION

CONSOLIDATED OPERATIONS DATA

(Unaudited)

	Year Ended December 31,
(Dollars in millions except per share amounts)	2011			%		2010			%		Change

Net operating revenues
Revenues before provision for doubtful accounts	$	9,584				$	9,205				4.1	%
Less provision for doubtful accounts	730					738					(1.1	)%
Net operating revenues	8,854			100.0	%	8,467			100.0	%	4.6	%
Operating expenses:
Salaries, wages and benefits	4,082			46.1	%	3,900			46.1	%	4.7	%
Supplies	1,582			17.9	%	1,577			18.6	%	0.3	%
Other operating expenses, net	2,100			23.7	%	1,940			22.9	%	8.2	%
Electronic Health Record Incentives	(55		)	(0.6	)%	0			—	%	—	%
Depreciation and amortization	413			4.7	%	394			4.7	%	4.8	%
Impairment of long-lived assets and goodwill, and restructuring charges, net	27			0.3	%	10			0.1	%
Litigation and investigation costs	55			0.6	%	12			0.1	%
Operating income	650			7.3	%	634			7.5	%
Interest expense	(375		)			(424		)
Loss from early extinguishment of debt	(117		)			(57		)
Investment earnings	3					5
Income from continuing operations, before income taxes	161					158
Income tax benefit (expense)	(61		)			977
Income from continuing operations, before discontinued operations	100					1,135
Discontinued operations:
Income (loss) from operations	(22		)			11
Impairment of long-lived assets and goodwill, and restructuring charges, net	—					(1		)
Litigation and investigation costs	(17		)			—
Income tax benefit	33					7
Income (loss) from discontinued operations	(6		)			17
Net income	94					1,152
Less: Preferred stock dividends	24					24
Less: Net income attributable to noncontrolling interests	12					9
Net income attributable to Tenet Healthcare Corporation common shareholders	$	58				$	1,119

Amounts attributable to Tenet Healthcare Corporation common shareholders
Income from continuing operations, net of tax	$	64				$	1,102
Income (loss) from discontinued operations, net of tax	(6		)			17
Net income attributable to Tenet Healthcare Corporation common shareholders	$	58				$	1,119

Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders
Basic
Continuing operations	$	0.13				$	2.28
Discontinued operations	(0.01		)			0.03
	$	0.12				$	2.31
Diluted
Continuing operations	$	0.13				$	2.01
Discontinued operations	(0.01		)			0.03
	$	0.12				$	2.04
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	468,726					484,321
Diluted	485,181					560,631

TENET HEALTHCARE CORPORATION

CONSOLIDATED BALANCE SHEET DATA

(Unaudited)

	December 31,			December 31,
(Dollars in millions)	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	113		$	405
Accounts receivable, less allowance for doubtful accounts	1,278			1,143
Inventories of supplies, at cost	161			156
Income tax receivable	7			22
Current portion of deferred income taxes	418			282
Assets held for sale	2			14
Other current assets	378			289
Total current assets	2,357			2,311
Investments and other assets	156			164
Deferred income taxes, net of current portion	374			627
Property and equipment, at cost, less accumulated depreciation and amortization	4,350			4,304
Goodwill	736			652
Other intangible assets, at cost, less accumulated amortization	489			442
Total assets	$	8,462		$	8,500

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	66		$	67
Accounts payable	760			720
Accrued compensation and benefits	376			363
Professional and general liability reserves	75			84
Accrued interest payable	112			115
Accrued legal settlement costs	64			8
Other current liabilities	362			368
Total current liabilities	1,815			1,725
Long-term debt, net of current portion	4,294			3,997
Professional and general liability reserves	337			383
Accrued legal settlement costs	2			22
Other long-term liabilities	506			554
Total liabilities	6,954			6,681
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries	16			—
Equity:
Shareholders’ equity:
Preferred stock	334			334
Common stock	27			27
Additional paid-in capital	4,407			4,449
Accumulated other comprehensive loss	(52		)	(43		)
Accumulated deficit	(1,440		)	(1,522		)
Common stock in treasury, at cost	(1,853		)	(1,479		)
Total shareholders’ equity	1,423			1,766
Noncontrolling interests	69			53
Total equity	1,492			1,819
Total liabilities and equity	$	8,462		$	8,500

TENET HEALTHCARE CORPORATION

CONSOLIDATED CASH FLOW DATA

(Unaudited)

	Year Ended December 31,
(Dollars in millions)	2011			2010
Net income	$	94		$	1,152
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	413			394
Provision for doubtful accounts	730			740
Deferred income tax expense	81			(952		)
Stock-based compensation expense	24			22
Impairment of long-lived assets and goodwill, and restructuring charges, net	27			10
Fair market value adjustments related to interest rate swap and LIBOR cap agreements	—			3
Amortization of debt discount and debt issuance costs	30			31
Litigation and investigation costs	55			12
Loss from early extinguishment of debt	117			57
Pre-tax loss from discontinued operations	39			(10		)
Other items, net	(15		)	(4		)
Changes in cash from operating assets and liabilities:
Accounts receivable	(865		)	(744		)
Inventories and other current assets	(38		)	(17		)
Income taxes	(63		)	3
Accounts payable, accrued expenses and other current liabilities	(35		)	(84		)
Other long-term liabilities	(6		)	(58		)
Payments against reserves for restructuring charges and litigation costs	(44		)	(83		)
Net cash used in operating activities from discontinued operations, excluding income taxes	(47		)	—
Net cash provided by operating activities	497			472
Cash flows from investing activities:
Purchases of property and equipment—continuing operations	(475		)	(450		)
Construction of new and replacement hospitals	—			(13		)
Purchase of property and equipment—discontinued operations	—			(13		)
Purchases of businesses or joint venture interests	(84		)	(65		)
Proceeds from sales of facilities and other assets — discontinued operations	—			19
Proceeds from sales of marketable securities, long-term investments and other assets	59			84
Release of escrow funds	—			15
Other items, net	(3		)	3
Net cash used in investing activities	(503		)	(420		)
Cash flows from financing activities:
Repayments of borrowings under credit facility	(365		)	—
Proceeds from borrowings under credit facility	445			—
Repayments of borrowings	(843		)	(886		)
Proceeds from borrowings	900			601
Deferred debt issuance costs	(21		)	(27		)
Repurchases of common stock	(374		)	—
Cash dividends on preferred stock	(24		)	(24		)
Distributions paid to noncontrolling interests	(11		)	(8		)
Other items, net	7			7
Net cash used in financing activities	(286		)	(337		)
Net decrease in cash and cash equivalents	(292		)	(285		)
Cash and cash equivalents at beginning of period	405			690
Cash and cash equivalents at end of period	$	113		$	405
Supplemental disclosures:
Interest paid, net of capitalized interest	$	(347	)	$	(402	)
Proceeds from interest rate swap agreement	$	30		$	0
Income tax (payments) refunds, net	$	(10	)	$	34

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS — CONTINUING HOSPITALS

(Unaudited)

(Dollars in millions except per patient day, per	Three Months Ended December 31,								Year Ended December 31,
admission and per visit amounts)	2011			2010			Change		2011			2010			Change

Net inpatient revenues	$	1,536		$	1,477		4.0	%	$	6,163		$	5,929		3.9	%
Net outpatient revenues	$	751		$	730		2.9	%	$	2,984		$	2,903		2.8	%

Number of acute care hospitals (at end of period) (1)	50			50			—		50			50			—	*
Licensed beds (at end of period)	13,453			13,428			0.2	%	13,453			13,428			0.2	%
Average licensed beds	13,453			13,429			0.2	%	13,449			13,430			0.1	%
Utilization of licensed beds	48.5		%	49.3		%	(0.8	)	50.0		%	50.4		%	(0.4	)*
Patient days	599,859			608,890			(1.5	)%	2,452,156			2,473,017			(0.8	)%
Adjusted patient days	917,798			923,219			(0.6	)%	3,732,330			3,723,702			0.2	%
Net inpatient revenue per patient day	$	2,561		$	2,426		5.6	%	$	2,513		$	2,397		4.8	%
Admissions	127,321			126,977			0.3	%	515,693			512,972			0.5	%
Adjusted patient admissions	196,594			194,098			1.3	%	791,919			778,505			1.7	%
Net inpatient revenue per admission	$	12,064		$	11,632		3.7	%	$	11,951		$	11,558		3.4	%
Average length of stay (days)	4.7			4.8			(0.1	)	4.8			4.8			—	*
Surgeries	92,691			89,859			3.2	%	367,638			360,206			2.1	%
Net outpatient revenue per visit	$	749		$	730		2.6	%	$	739		$	741		(0.3	)%
Outpatient visits	1,002,842			999,827			0.3	%	4,039,456			3,917,758			3.1	%

Sources of net patient revenue
Medicare	23.3		%	23.5		%	(0.2	)	23.2		%	23.9		%	(0.7	)*
Medicaid	8.8		%	8.6		%	0.2		9.0		%	8.7		%	0.3	*
Managed care	57.8		%	56.9		%	0.9		57.0		%	56.5		%	0.6	*
Indemnity, self-pay and other	10.1		%	11.0		%	(0.9	)	10.8		%	10.9		%	(0.2	)*

* This change is the difference between the 2011 and 2010 amounts shown

(1) Number of hospitals includes the 49 general hospitals and our critical access facility

TENET HEALTHCARE CORPORATION

CONSOLIDATED OPERATIONS DATA

Fiscal 2011 by Calendar Quarter

(Unaudited)

													Year Ended
	Three Months Ended												Ended
(Dollars in millions except per share amounts)	3/31/11			6/30/11			9/30/11			12/31/11			12/31/11

Net operating revenues
Revenues before provision for doubtful accounts	$	2,481		$	2,349		$	2,343		$	2,411		$	9,584
Less provision for doubtful accounts	182			170			193			185			730
Net operating revenues	2,299			2,179			2,150			2,226			8,854
Operating expenses:
Salaries, wages and benefits	1,035			999			1,019			1,029			4,082
Supplies	404			399			388			391			1,582
Other operating expenses, net	506			529			548			517			2,100
Electronic Health Record Incentives	(25		)	(25		)	—			(5		)	(55		)
Depreciation and amortization	101			104			103			105			413
Impairment of long-lived assets and goodwill, and restructuring charges	8			2			8			9			27
Litigation and investigation costs	11			8			5			31			55
Operating income	259			163			79			149			650
Interest expense	(118		)	(98		)	(59		)	(100		)	(375		)
Loss from early extinguishment of debt	—			—			—			(117		)	(117		)
Investment earnings	1			1			1			—			3
Income (loss) from continuing operations, before income taxes	142			66			21			(68		)	161
Income tax expense	(51		)	(18		)	(4		)	12			(61		)
Income (loss) from continuing operations, before discontinued operations	91			48			17			(56		)	100
Discontinued operations:
Loss from operations	(15		)	(3		)	(2		)	(2		)	(22		)
Litigation and investigation costs	—			—			—			(17		)	(17		)
Income tax benefit	6			18			—			9			33
Income (loss) from discontinued operations	(9		)	15			(2		)	(10		)	(6		)
Net income (loss)	82			63			15			(66		)	94
Less: Preferred stock dividends	6			6			6			6			24
Less: Net income attributable to noncontrolling interests	3			2			3			4			12
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders	$	73		$	55		$	6		$	(76	)	$	58

Amounts attributable to Tenet Healthcare Corporation common shareholders
Income (loss) from continuing operations, net of tax	$	82		$	40		$	8		$	(66	)	$	64
Income (loss) from discontinued operations, net of tax	(9		)	15			(2		)	(10		)	(6		)
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders	$	73		$	55		$	6		$	(76	)	$	58

Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders
Basic
Continuing operations	$	0.17		$	0.08		$	0.02		$	(0.15	)	$	0.13
Discontinued operations	(0.02		)	0.03			—			(0.02		)	(0.01		)
	$	0.15		$	0.11		$	0.02		$	(0.17	)	$	0.12
Diluted
Continuing operations	$	0.16		$	0.08		$	0.02		$	(0.15	)	$	0.13
Discontinued operations	(0.02		)	0.03			—			(0.02		)	(0.01		)
	$	0.14		$	0.11		$	0.02		$	(0.17	)	$	0.12
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	486,902			486,794			468,753			432,454			468,726
Diluted	565,181			503,748			483,632			432,454			485,181

TENET HEALTHCARE CORPORATION

CONSOLIDATED OPERATIONS DATA

Fiscal 2010 by Calendar Quarter

(Unaudited)

													Year
	Three Months Ended												Ended
(Dollars in millions except per share amounts)	3/31/10			6/30/10			9/30/10			12/31/10			12/31//10

Net operating revenues
Revenues before provision for doubtful accounts	$	2,339		$	2,303		$	2,262		$	2,301		$	9,205
Less provision for doubtful accounts	188			173			187			190			738
Net operating revenues	$	2,151		$	2,130		$	2,075		$	2,111		$	8,467
Operating expenses:
Salaries, wages and benefits	987			969			977			967			3,900
Supplies	398			395			390			394			1,577
Other operating expenses, net	468			498			505			469			1,940
Depreciation and amortization	95			97			101			101			394
Impairment of long-lived assets and goodwill, and restructuring charges	—			(2		)	3			9			10
Litigation and investigation costs	2			2			2			6			12
Operating income	201			171			97			165			634
Interest expense	(109		)	(107		)	(107		)	(101		)	(424		)
Loss from early extinguishment of debt	—			—			(55		)	(2		)	(57		)
Investment earnings	1			1			3			—			5
Income (loss) from continuing operations, before income taxes	93			65			(62		)	62			158
Income tax (expense) benefit	(3		)	(20		)	1,002			(2		)	977
Income from continuing operations, before discontinued operations	90			45			940			60			1,135
Discontinued operations:
Income (loss) from operations	5			(5		)	(4		)	15			11
Impairment of long-lived assets and goodwill, and restructuring charges, net	1			(3		)	1			—			(1		)
Income tax (expense) benefit	(1		)	(2		)	3			7			7
Income (loss) from discontinued operations	5			(10		)	—			22			17
Net income	95			35			940			82			1,152
Less: Preferred stock dividends	6			6			6			6			24
Less: Net income attributable to noncontrolling interests	1			4			2			2			9
Net income attributable to Tenet Healthcare Corporation common shareholders	$	88		$	25		$	932		$	74		$	1,119

Amounts attributable to Tenet Healthcare Corporation common shareholders
Income from continuing operations, net of tax	$	83		$	35		$	932		$	52		$	1,102
Income (loss) from discontinued operations, net of tax	5			(10		)	—			22			17
Net income attributable to Tenet Healthcare Corporation common shareholders	$	88		$	25		$	932		$	74		$	1,119

Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders
Basic
Continuing operations	$	0.17		$	0.07		$	1.92		$	0.11		$	2.28
Discontinued operations	0.01			(0.02		)	—			0.04			0.03
	$	0.18		$	0.05		$	1.92		$	0.15		$	2.31
Diluted
Continuing operations	$	0.16		$	0.07		$	1.68		$	0.10		$	2.01
Discontinued operations	0.01			(0.02		)	—			0.04			0.03
	$	0.17		$	0.05		$	1.68		$	0.14		$	2.04
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	481,917			484,610			485,210			485,549			484,321
Diluted	559,228			502,549			559,850			561,921			560,631

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS — CONTINUING HOSPITALS

Fiscal 2011 by Calendar Quarter

(Unaudited)

													Year Ended
(Dollars in millions except per patient day, per	Three Months Ended												Ended
admission and per visit amounts)	03/31/11			06/30/11			9/300/11			12/31/11			12/31/11

Net inpatient revenues	$	1,653		$	1,497		$	1,477		$	1,536		$	6,163
Net outpatient revenues	$	733		$	751		$	749		$	751		$	2,984

Number of acute care hospitals (at end of period) (1)	50			50			50			50			50
Licensed beds (at end of period)	13,457			13,420			13,453			13,453			13,453
Average licensed beds	13,457			13,445			13,440			13,453			13,449
Utilization of licensed beds	53.3		%	49.5		%	48.7		%	48.5		%	50.0		%
Patient days	645,166			605,216			601,915			599,859			2,452,156
Adjusted patient days	963,039			926,328			925,165			917,798			3,732,330
Net inpatient revenue per patient day	$	2,562		$	2,473		$	2,454		$	2,561		$	2,513
Admissions	133,349			127,503			127,520			127,321			515,693
Adjusted patient admissions	200,353			196,862			198,110			196,594			791,919
Net inpatient revenue per admission	$	12,396		$	11,741		$	11,582		$	12,064		$	11,951
Average length of stay (days)	4.8			4.7			4.7			4.7			4.8
Surgeries	88,754			92,250			93,943			92,691			367,638
Net outpatient revenue per visit	$	725		$	739		$	742		$	749		$	739
Outpatient visits	1,010,848			1,015,830			1,009,936			1,002,842			4,039,456

Sources of net patient revenue
Medicare	23.2		%	23.6		%	22.7		%	23.3		%	23.2		%
Medicaid	11.6		%	7.5		%	8.0		%	8.8		%	9.0		%
Managed care	54.4		%	58.0		%	58.0		%	57.8		%	57.0		%
Indemnity, self-pay and other	10.8		%	10.9		%	11.3		%	10.1		%	10.8		%

(1) Number of hospitals includes the 49 general hospitals and our critical access facility

(1) Reconciliation of Adjusted EBITDA

Adjusted EBITDA, a non-GAAP term, is defined by the Company as net income (loss) attributable to Tenet Healthcare Corporation common shareholders before (1) cumulative effect of changes in accounting principle, net of tax, (2) net income attributable to noncontrolling interests, (3) preferred stock dividends, (4) income (loss) from discontinued operations, net of tax, (5) income tax (expense) benefit, (6) investment earnings (loss), (7) gain (loss) from early extinguishment of debt, (8) net gain (loss) on sales of investments, (9) interest expense, (10) litigation and investigation (costs) benefit, net of insurance recoveries, (11) hurricane insurance recoveries, net of costs, (12) impairment of long-lived assets and goodwill and restructuring charges, net of insurance recoveries, and (13) depreciation and amortization. The Company’s Adjusted EBITDA may not be comparable to EBITDA reported by other companies.

The Company provides this information as a supplement to GAAP information to assist itself and investors in understanding the impact of various items on its financial statements, some of which are recurring or involve cash payments. The Company uses this information in its analysis of the performance of its business excluding items that it does not consider as relevant in the performance of its hospitals in continuing operations. In addition, from time to time we use this measure to define certain performance targets under our compensation programs. Adjusted EBITDA is not a measure of liquidity, but is a measure of operating performance that management uses in its business as an alternative to net income (loss) attributable to Tenet Healthcare Corporation common shareholders. Because Adjusted EBITDA excludes many items that are included in our financial statements, it does not provide a complete measure of our operating performance. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company’s financial performance.

The reconciliation of net income (loss) attributable to Tenet Healthcare Corporation common shareholders, the most comparable GAAP term, to Adjusted EBITDA, is set forth in the first table below for the three and twelve months ended December 31, 2011 and 2010.

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP Disclosures

Table #1 - Reconciliation of Adjusted EBITDA to Net Income Attributable to Tenet
Healthcare Corporation Common Shareholders

(Unaudited)

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in millions)	2011			2010			2011			2010
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders	$	(76	)	$	74		$	58		$	1,119
Less: Net income attributable to noncontrolling interests	(4		)	(2		)	(12		)	(9		)
Preferred stock dividends	(6		)	(6		)	(24		)	(24		)
Income (loss) from discontinued operations, net of tax	(10		)	22			(6		)	17
Income (loss) from continuing operations	(56		)	60			100			1,135
Income tax benefit (expense)	12			(2		)	(61		)	977
Investment earnings	—			—			3			5
Loss from early extinguishment of debt	(117		)	(2		)	(117		)	(57		)
Interest expense	(100		)	(101		)	(375		)	(424		)
Operating income	149			165			650			634
Litigation and investigation costs	(31		)	(6		)	(55		)	(12		)
Impairment of long-lived assets and goodwill, and restructuring charges, net	(9		)	(9		)	(27		)	(10		)
Depreciation and amortization	(105		)	(101		)	(413		)	(394		)
Adjusted EBITDA	$	294		$	281		$	1,145		$	1,050

Net operating revenues	$	2,226		$	2,111		$	8,854		$	8,467

Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin)	13.2		%	13.3		%	12.9		%	12.4		%

Table #2 - Reconciliation of Outlook Adjusted EBITDA to

Outlook Net Income Attributable to Tenet Healthcare Corporation Common Shareholders
for Years Ending December 31, 2012, 2013 and 2015

(Unaudited)

	2012						2013						2015
(Dollars in Millions)	Low			High			Low			High			Low			High
Net income attributable to common shareholders	$	216		$	302		$	306		$	451		$	578		$	911
Less:

Net income attributable to noncontrolling interests	(15		)	(10		)	(15		)	(10		)	(15		)	(10		)
Preferred stock dividends	(18		)	(18		)	0			0			0			0
Loss from discontinued operations, net of tax	(10		)	(5		)	(5		)	0			(5		)	0
Income from continuing operations	259			335			326			461			598			921
Income tax expense	(166		)	(215		)	(209		)	(294		)	(382		)	(589		)
Income from continuing operations, before income taxes	425			550			535			755			980			1,510
Interest expense	(390		)	(370		)	(390		)	(340		)	(360		)	(280		)
Operating income	815			920			925			1,095			1,340			1,790
Depreciation and amortization	(410		)	(430		)	(410		)	(440		)	(410		)	(460		)
Adjusted EBITDA	$	1,225		$	1,350		$	1,335		$	1,535		$	1,750		$	2,250

Table #3 - Reconciliation of Outlook Adjusted EBITDA to
Outlook Income From Continuing Operations
for Years Ending December 31, 2012, 2013 and 2015

(Unaudited)

	2012						2013						2015
(Dollars in Millions except per share amounts)	Low			High			Low			High			Low			High
Adjusted EBITDA (from Table #2)	$	1,225		$	1,350		$	1,335		$	1,535		$	1,750		$	2,250

Depreciation and amortization	(410		)	(430		)	(410		)	(440		)	(410		)	(460		)
Interest expense	(390		)	(370		)	(390		)	(340		)	(360		)	(280		)
Income from continuing operations, before income taxes	425			550			535			755			980			1,510
Income tax expense (a)	(166		)	(215		)	(209		)	(294		)	(382		)	(589		)
Income from continuing operations (a)	259			335			326			461			598			921
Preferred stock dividends	(18		)	(18		)	0			0			0			0
Net income attributable to noncontrolling interests	(15		)	(10		)	(15		)	(10		)	(15		)	(10		)

Income from continuing operations, net of tax (a)	$	226		$	307		$	311		$	451		$	583		$	911

Weighted average shares outstanding (in millions)	489			489			491			491			503			503

Diluted EPS - continuing operations (a)	$	0.46		$	0.63		$	0.63		$	0.92		$	1.16		$	1.81

(a) Uses tax rate of 39 percent

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