8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report:  May 5, 2014

(Date of earliest event reported)

TENET HEALTHCARE CORPORATION

(Exact name of Registrant as specified in its charter)

Nevada	1-7293	95-2557091
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

1445 Ross Avenue, Suite 1400

Dallas, Texas  75202

(Address of principal executive offices, including zip code)

(469) 893-2200

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition.

The information contained herein is being furnished pursuant to Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.”  This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On May 5, 2014, Tenet Healthcare Corporation (the “Company”) issued a press release reporting the financial results of the Company for the quarter ended March 31, 2014.  A copy of the press release is attached to this report as Exhibit 99.1 and incorporated herein by reference.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in the press release filed as an exhibit to this report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements are based on management’s current expectations and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results to be materially different from those expressed or implied by such forward-looking statements.  Such factors include, among others, the following: our ability to realize fully or at all the anticipated benefits of our merger with Vanguard Health Systems, Inc. (“Vanguard”) and to successfully integrate the operations of the Company’s and Vanguard’s businesses; the passage of health care reform legislation and the enactment of additional federal and state health care reform; other changes in federal, state and local laws and regulations affecting the health care industry; general economic and business conditions, both nationally and regionally; demographic changes; changes in, or the failure to comply with, laws and governmental regulations; the ability to enter into managed care provider arrangements on acceptable terms; changes in Medicare and Medicaid payments or reimbursement; liability and other claims asserted against the Company; competition, including the Company’s ability to attract patients to its hospitals; technological and pharmaceutical improvements that increase the cost of providing, or reduce the demand for, health care; changes in business strategy or development plans; the ability to attract and retain qualified personnel, including physicians, nurses and other health care professionals, and the impact on the Company’s labor expenses resulting from a shortage of nurses or other health care professionals; the significant indebtedness of the Company; the Company’s ability to integrate new businesses with its existing operations; the availability and terms of capital to fund the expansion of the Company’s business, including the acquisition of additional facilities; the creditworthiness of counterparties to the Company’s business transactions; adverse fluctuations in interest rates and other risks related to interest rate swaps or any other hedging activities the Company undertakes; the ability to continue to expand and realize earnings contributions from the revenue cycle management, health care information management, capitation management, and patient communications services businesses under our Conifer Health Solutions (“Conifer”) subsidiary by marketing these services to third party hospitals and other health care-related entities; and its ability to identify and execute on measures designed to save or control costs or streamline operations.  Such factors also include the positive and negative effects of health reform legislation on reimbursement and utilization and the future designs of provider networks and insurance plans, including pricing, provider participation, coverage and co-pays and deductibles, all of which contain significant uncertainty, and for which multiple models exist which may differ materially from the Company’s expectations.  Certain additional risks and uncertainties are discussed in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q.  All information in this report and the press release is as of May 5, 2014.  The Company specifically disclaims any obligation to update any forward-looking statement, whether as a result of changes in underlying factors, new information, future events or otherwise.

2

NON-GAAP INFORMATION

The press release filed as an exhibit to this report includes certain financial measures, such as adjusted EBITDA, that are not calculated in accordance with generally accepted accounting principles (GAAP).  Management recommends that you focus on the GAAP numbers as the best indicator of financial performance.  These alternative measures are provided only as a supplement to aid in analysis of the Company.  Reconciliation between non-GAAP measures and related GAAP measures can be found at the end of the press release.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

99.1Press Release issued on May 5, 2014

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TENET HEALTHCARE CORPORATION
	By:	/s/ R. Scott Ramsey
		R. Scott Ramsey
		Vice President, Controller and Chief Accounting Officer
Date: May 5, 2014

4

EXHIBIT INDEX

99.1Press Release issued on May 5, 2014

5

EX-99.1

Exhibit 99.1

Tenet Reports Adjusted EBITDA of $387 Million for the Quarter Ended March 31, 2014

Confirms 2014 Adjusted EBITDA Outlook Range of $1.8-1.9 Billion

DALLAS — May 5, 2014 — Tenet Healthcare Corporation (NYSE:THC) today reported Adjusted EBITDA for the first quarter ended March 31, 2014 of $387 million, an increase of $113 million, or 41 percent, as compared to $274 million in the first quarter of 2013.  The increase in EBITDA in the first quarter of 2014 was adversely impacted by an aggregate of $76 million related to several items, the largest of which included: (i) a $25 million revenue decline related to Medicare sequestration which was not in effect in the first quarter of 2013, (ii) a $22 million EBITDA decline primarily related to the loss of an uncapped health plan contract in Arizona, and (iii) a $12 million decline in California Provider Fee Program revenue recognition.

“Aided by our extensive preparations to serve the newly insured patient populations under the Affordable Care Act, we achieved a broadly-based improvement in our admissions trend in the first quarter, with a 0.3 percent increase in adjusted admissions and a 0.9 percent admissions decline on a pro forma basis,” said Trevor Fetter, president and chief executive officer.  “The strengthening volume trend was particularly pronounced in the states that expanded their Medicaid programs.  In these four states our Medicaid admissions grew by 17 percent and uninsured plus charity admissions declined by 33 percent.  We leveraged this top line contribution through solid cost control to approach the top quartile of our Adjusted EBITDA Outlook range.  Our EBITDA and volume growth would have been even stronger had it not been for the adverse impact of challenging weather events in many of our markets.  The quarter’s solid results demonstrate the powerful earnings momentum created by Tenet’s transformation from a regional operator of hospitals to a national diversified healthcare services company.  Based on these achievements and the continued smooth integration of our recent Vanguard acquisition, we are confirming our Outlook range for 2014 Adjusted EBITDA of $1.8 billion to $1.9 billion.”

Discussion of Results  (Percentage changes compare Q1’14 to Q1’13, and, unless otherwise noted, represent pro forma changes defined as including Vanguard’s legacy operations in both reporting periods.)

Including Vanguard’s operations in both reporting periods, first quarter 2014 pro forma adjusted admissions and admissions increased by 0.3 percent and declined 0.9 percent, respectively, compared to the first quarter of 2013.  The trend in commercial admissions strengthened in the first quarter of 2014 achieving the best quarterly same-hospital performance in more than six years.  Total same-hospital admissions declined 1.2 percent in the quarter and total admissions in the legacy Vanguard markets declined 0.5 percent.  Outpatient visits increased by 4.6 percent on a pro forma basis and 2.5 percent on a same-hospital basis.  More than 40 percent of pro forma outpatient growth was organic.  Surgeries grew by 7.7 percent on a pro forma basis and 13.1 percent on a same-hospital basis.  Emergency department visits declined 0.7 percent on a pro forma basis and grew by 2.7 percent on a same-hospital basis.

Tenet achieved an aggregate first quarter increase in pro forma Medicaid admissions of 17 percent, in the four states that expanded Medicaid eligibility effective January 1, 2014 under the Affordable Care Act (“ACA”).  Uninsured plus charity admissions declined by an aggregate 33 percent in these same four states.  Outpatient payer shifts were comparable in these four states.

Patients identified as insured by exchange products created as part of the Affordable Care Act increased sequentially during the quarter and this growth trend continued in April.

Tenet experienced a decline in Medicare and managed Medicare one-day admission stays, which contributed 26 basis points to the first quarter’s aggregate admissions decline on a pro forma basis.  A portion of the decline in one-day admissions may be related to the recently implemented Medicare two midnight rule.  The impact of severe weather events in certain markets is estimated to have reduced pro forma growth in admissions by 36 basis points and outpatient visits by 160 basis points.

Net operating revenues, after provision for doubtful accounts, were $3.926 billion, an increase of $40 million, or 1.0 percent, compared to pro forma net operating revenues of $3.886 billion in the first quarter of 2013.  These revenue increases primarily reflect improved terms in commercial managed care contracts, and growth in our outpatient and Conifer services businesses.  These growth drivers were partially offset by an approximate $75 million decline in health plan revenue due to a different contract with the state of Arizona Medicaid program that has fewer covered lives, and the absence of revenue recognition from the California Provider Fee program in the first quarter of 2014 compared to $12 million in the first quarter of 2013. Commercial managed care revenue increased 5.5 percent per admission and increased 0.2 percent per outpatient visit on a pro forma basis.  The impact of Medicare sequestration payment cuts reduced Adjusted EBITDA by $25 million in the first quarter of 2014. The sequestration cuts were not in effect in the first quarter of 2013.  Net patient revenue per adjusted admission was $11,692, a pro forma increase of 2.1 percent.

Selected operating expenses for hospital operations, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased by 1.5 percent per adjusted admission on a pro forma basis. This selected operating expenses metric for hospital operations excludes the Company’s Conifer services business, health plans, and a provider network in Southern California.  Excluding incremental expenses related to increased physician employment, the same-hospital increase in selected operating expenses per adjusted admission was 2.6 percent.  The operating expense increases reflect volume growth in our supply-intensive service lines, especially surgical volume, as well as increases in employee compensation.  The growth in supply-intensive service lines contributed to a 0.7 percent pro forma increase in the case mix index and a 7.7 percent increase in pro forma surgeries.  Electronic health records incentives recorded in the first quarter of 2014 were $9 million, a $4 million increase compared to $5 million recognized on a pro forma basis in the first quarter of 2013.  These incentive payments are not included in the definition of selected operating expenses.

Bad debt expense increased by $21 million, or 5.8 percent, to $380 million in the first quarter of 2014 compared to last year’s pro forma first quarter.  The increase in bad debt expense was primarily attributable to a temporary increase in the aging of receivables due to payment timing issues with certain payers and a $5 million same-hospital increase in uninsured revenues.  Bad debt expense as a percent of revenues before bad debts was 8.8 percent, a pro forma increase of 30 basis points compared to 8.5 percent in the first quarter of 2013. The same-hospital self-pay collection rate was 28.1 percent in the first quarter of 2014, a 70 basis point decline compared to 28.8 percent in the first quarter of 2013.  The same-hospital commercial managed care collection rate was 98.4 percent in the first quarter of 2014, a 30 basis point increase compared to 98.1 percent in the first quarter of 2013.

Conifer reported Adjusted EBITDA of $48 million, an increase of $16 million, or 50 percent, compared to $32 million in the first quarter of 2013.  Conifer’s revenues were $285 million in the first quarter of 2014, an increase of $74 million, or 35.1 percent, compared to $211 million in the first quarter of 2013.  Conifer’s first quarter 2014 EBITDA included $5 million of earnings from transactions that will not routinely occur on a quarterly basis.

Income from continuing operations in the first quarter of 2014, excluding $15 million in after-tax impairments, restructuring charges, acquisition-related costs, litigation and investigation costs and loss on debt extinguishment, was a loss of $12 million after-tax, or $0.12 per diluted share.  The comparable after-tax exclusions were $120 million in the first quarter of 2013, which resulted in income from continuing operations of $34 million, or $0.33 per diluted share.

Net loss attributable to common shareholders in the first quarter of 2014 was $32 million after-tax, or $0.33 per share, compared to a net loss of $88 million after-tax, or $0.85 per diluted share, in the first quarter of 2013. The first quarter of 2014 included a $79 million increase in pre-tax interest expense compared to the first quarter of 2013.  This increased interest expense is substantially due to the $4.6 billion of financing related to the Vanguard acquisition and $400 million to finance share repurchases during 2013.

Cash and cash equivalents were $141 million at March 31, 2014 compared to $113 million at December 31, 2013. Approximately $210 million of net revenues related to the California Provider Fee program, Texas Medicaid disproportionate share reimbursement, and the Texas uncompensated care 1115 Waiver program had not been received by the Company as of March 31, 2014. Accounts receivable days outstanding were 49 days at March 31, 2014 compared to 47 days at December 31, 2013.

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Outlook for Second Quarter and 2014 Adjusted EBITDA

The Company’s Outlook range for Adjusted EBITDA the second quarter of 2014 is $375 million to $425 million and earnings per share in a range of a loss of $0.39 per share to income of $0.12 per share. No revenue recognition related to the California Provider Fee Program is assumed in this Outlook. Incentive payments related to electronic health records are assumed to contribute $50 million to the second quarter Outlook.

The Company’s prior Outlook range for 2014 Adjusted EBITDA in a range of $1.8 billion to $1.9 billion is confirmed.

Management’s Webcast Discussion of First Quarter Results

Tenet management will discuss the Company’s first quarter 2014 results on a 10:00 a.m. (ET) webcast on May 6, 2014.  This webcast may be accessed through Tenet’s website at www.tenethealth.com/investors. A set of slides which will be referred to on the conference call is also available on the Company’s website.

Additional information regarding Tenet’s quarterly results of operations, including detailed tabular operational data, is contained in its Form 10-Q report, which will be filed with the Securities and Exchange Commission and posted on the Tenet investor relations website before the 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 leading health care services company, through its subsidiaries operates 77 hospitals, 190 outpatient centers and Conifer Health Solutions, a leader in business process solutions for health care providers that serves more than 700 hospital and other clients 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: Steven Campanini (469) 893-2247	Investors: Thomas Rice (469) 893-2522
Steven.Campanini@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,” “assume,” “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, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2013, and in 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 release is as of the date hereof.  The Company assumes no obligation to update forward-looking statements contained in this release as a result of new information or future events or developments.

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

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TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
(Dollars in millions except per share amounts)	2014			%		2013			%		Change
Net operating revenues:
Net operating revenues before provision for doubtful accounts	$	4,306				$	2,594				66.0	%
Less: Provision for doubtful accounts	380					207					83.6	%
Net operating revenues	3,926			100.0	%	2,387			100.0	%	64.5	%
Operating expenses:
Salaries, wages and benefits	1,921			48.9	%	1,161			48.6	%	65.5	%
Supplies	628			16.0	%	384			16.1	%	63.5	%
Other operating expenses, net	999			25.5	%	568			23.8	%	75.9	%
Electronic health record incentives	(9		)	(0.2	)%	—			—	%	100.0	%
Depreciation and amortization	193			4.9	%	114			4.8	%	69.3	%
Impairment and restructuring charges, and acquisition-related costs	21			0.5	%	14			0.6	%
Litigation and investigation costs	3			0.1	%	—			—	%
Operating income	170			4.3	%	146			6.1	%
Interest expense	(182		)			(103		)
Loss from early extinguishment of debt	—					(177		)
Net loss from continuing operations, before income taxes	(12		)			(134		)
Income tax benefit	1					53
Net loss from continuing operations, before discontinued operations	(11		)			(81		)
Discontinued operations:
Loss from operations	(8		)			(3		)
Income tax benefit	3					1
Net loss from discontinued operations	(5		)			(2		)
Net loss	(16		)			(83		)
Less: Net income attributable to noncontrolling interests
Continuing operations	16					5
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(32	)			$	(88	)
Amounts attributable to Tenet Healthcare Corporation common shareholders
Net loss from continuing operations, net of tax	$	(27	)			$	(86	)
Net loss from discontinued operations, net of tax	(5		)			(2		)
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(32	)			$	(88	)
Net loss per share attributable to Tenet Healthcare Corporation common shareholders
Basic
Continuing operations	$	(0.28	)			$	(0.83	)
Discontinued operations	(0.05		)			(0.02		)
	$	(0.33	)			$	(0.85	)
Diluted
Continuing operations	$	(0.28	)			$	(0.83	)
Discontinued operations	(0.05		)			(0.02		)
	$	(0.33	)			$	(0.85	)
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	97,161					104,103
Diluted*	97,161					104,103

*Had we generated income from continuing operations in the three months ended March 31, 2014 and 2013, the effect of employee stock options, restricted stock units and deferred compensation units on the diluted shares calculation would have been an increase in shares of 1,984 and 2,239 shares, respectively.

4

TENET HEALTHCARE CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
(Dollars in millions)	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	141		$	113
Accounts receivable, less allowance for doubtful accounts	2,141			1,965
Inventories of supplies, at cost	261			262
Income tax receivable	19			—
Current portion of deferred income taxes	577			581
Other current assets	839			789
Total current assets	3,978			3,710
Investments and other assets	355			405
Deferred income taxes, net of current portion	129			90
Property and equipment, at cost, less accumulated depreciation and amortization	7,723			7,691
Goodwill	3,070			3,042
Other intangible assets, at cost, less accumulated amortization	1,229			1,192
Total assets	$	16,484		$	16,130
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	622		$	149
Accounts payable	1,019			1,075
Accrued compensation and benefits	595			631
Professional and general liability reserves	140			156
Accrued interest payable	274			198
Other current liabilities	686			719
Total current liabilities	3,336			2,928
Long-term debt, net of current portion	10,612			10,690
Professional and general liability reserves	567			543
Defined benefit plan obligations	395			398
Other long-term liabilities	453			446
Total liabilities	15,363			15,005
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries	267			247
Equity:
Shareholders’ equity:
Common stock	7			7
Additional paid-in capital	4,576			4,572
Accumulated other comprehensive loss	(23		)	(24		)
Accumulated deficit	(1,454		)	(1,422		)
Common stock in treasury, at cost	(2,378		)	(2,378		)
Total shareholders’ equity	728			755
Noncontrolling interests	126			123
Total equity	854			878
Total liabilities and equity	$	16,484		$	16,130

5

TENET HEALTHCARE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Month Ended March 31,
(Dollars in millions)	2014			2013
Net loss	$	(16	)	$	(83	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	193			114
Provision for doubtful accounts	380			207
Deferred income tax benefit	(3		)	(55		)
Stock-based compensation expense	12			11
Impairment and restructuring charges, and acquisition-related costs	21			14
Litigation and investigation costs	3			—
Loss from early extinguishment of debt	—			177
Amortization of debt discount and debt issuance costs	7			5
Pre-tax loss from discontinued operations	8			3
Other items, net	(3		)	(10		)
Changes in cash from operating assets and liabilities:
Accounts receivable	(557		)	(251		)
Inventories and other current assets	(60		)	(44		)
Income taxes	(2		)	3
Accounts payable, accrued expenses and other current liabilities	29			(138		)
Other long-term liabilities	13			27
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements	(30		)	(7		)
Net cash used in operating activities from discontinued operations, excluding income taxes	(14		)	(5		)
Net cash used in operating activities	(19		)	(32		)
Cash flows from investing activities:
Purchases of property and equipment — continuing operations	(281		)	(133		)
Purchases of businesses or joint venture interests, net of cash acquired	(9		)	(5		)
Proceeds from sales of marketable securities, long-term investments and other assets	3			3
Other long-term assets	(4		)	29
Other items, net	—			2
Net cash used in investing activities	(291		)	(104		)
Cash flows from financing activities:
Repayments of borrowings under credit facility	(665		)	(200		)
Proceeds from borrowings under credit facility	430			220
Repayments of other borrowings	(24		)	(899		)
Proceeds from other borrowings	600			850
Repurchases of common stock	—			(100		)
Deferred debt issuance costs	(11		)	(15		)
Distributions paid to noncontrolling interests	(11		)	(6		)
Contributions from noncontrolling interests	13			—
Proceeds from exercise of stock options	6			15
Other items, net	—			2
Net cash provided by (used in) financing activities	338			(133		)
Net increase (decrease) in cash and cash equivalents	28			(269		)
Cash and cash equivalents at beginning of period	113			364
Cash and cash equivalents at end of period	$	141		$	95
Supplemental disclosures:
Interest paid, net of capitalized interest	$	(105	)	$	(125	)
Income tax refunds (payments), net	$	(1	)	$	3

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TENET HEALTHCARE CORPORATION

SELECTED STATISTICS — CONTINUING SAME HOSPITALS

(Unaudited)

(Dollars in millions except per patient day, per	Three Months Ended March 31,
admission and per visit amounts)	2014			2013			Change
Net inpatient revenues	$	1,569		$	1,536		2.1	%
Net outpatient revenues	$	859		$	813		5.7	%
Number of acute care hospitals (at end of period)	49			49			—	%*
Licensed beds (at end of period)	13,178			13,180			—	%
Average licensed beds	13,178			13,180			—	%
Utilization of licensed beds	51.0		%	50.9		%	0.1	%*
Patient days — total	605,042			603,285			0.3	%
Adjusted patient days	949,403			939,840			1.0	%
Net inpatient revenue per patient day	$	2,593		$	2,546		1.8	%
Total admissions	124,451			125,929			(1.2	)%
Adjusted patient admissions	196,855			197,665			(0.4	)%
Charity and uninsured admissions	8,387			8,603			(2.5	)%
Net inpatient revenue per admission	$	12,607		$	12,197		3.4	%
Average length of stay (days)	4.86			4.79			1.5	%
Total surgeries	114,734			101,413			13.1	%
Admissions through emergency department	80,910			80,208			0.9	%
Emergency department outpatient visits	414,193			402,078			3.0	%
Total emergency department	495,103			482,286			2.7	%
Outpatient visits	1,080,674			1,054,789			2.5	%
Charity and uninsured outpatient visits	111,857			110,240			1.5	%
Net outpatient revenue per visit	$	795		$	771		3.1	%
Net patient revenue per adjusted admission	$	12,334		$	11,884		3.8	%
Net Patient Revenues from:
Medicare	22.0		%	23.0		%	(1.0	)%*
Medicaid	7.4		%	8.0		%	(0.6	)%*
Managed care	59.5		%	57.9		%	1.6	%*
Indemnity, self-pay and other	11.1		%	11.1		%	—	%*

* This change is the difference between the 2014 and 2013 amounts shown

7

TENET HEALTHCARE CORPORATION

SELECTED STATISTICS — CONTINUING TOTAL HOSPITALS

(Unaudited)

(Dollars in millions except per patient day, per	Three Months Ended March 31,
admission and per visit amounts)	2014			2013			Change
Net inpatient revenues	$	2,440		$	1,536		58.9	%
Net outpatient revenues	$	1,346		$	813		65.6	%
Number of acute care hospitals (at end of period)	77			49			28	*
Licensed beds (at end of period)	20,279			13,180			53.9	%
Average licensed beds	20,263			13,180			53.7	%
Utilization of licensed beds	51.0		%	50.9		%	0.1	%*
Patient days — total	929,164			603,285			54.0	%
Adjusted patient days	1,525,379			939,840			62.3	%
Net inpatient revenue per patient day	$	2,626		$	2,546		3.1	%
Total admissions	194,273			125,929			54.3	%
Adjusted patient admissions	323,810			197,665			63.8	%
Charity and uninsured admissions	12,530			8,603			45.6	%
Net inpatient revenue per admission	$	12,560		$	12,197		3.0	%
Average length of stay (days)	4.78			4.79			(0.2	)%
Total surgeries	162,282			101,413			60.0	%
Admissions through emergency department	122,601			80,208			52.9	%
Emergency department outpatient visits	665,002			402,078			65.4	%
Total emergency department	787,603			482,286			63.3	%
Outpatient visits	1,947,687			1,054,789			84.7	%
Charity and uninsured outpatient visits	165,248			110,240			49.9	%
Net outpatient revenue per visit	$	691		$	771		(10.4	)%
Net patient revenue per adjusted admission	$	11,692		$	11,884		(1.6	)%
Net Patient Revenues from:
Medicare	22.6		%	23.0		%	(0.4	)%*
Medicaid	7.7		%	8.0		%	(0.3	)%*
Managed care	57.8		%	57.9		%	(0.1	)%*
Indemnity, self-pay and other	11.9		%	11.1		%	0.8	%*

* This change is the difference between the 2014 and 2013 amounts shown

8

TENET HEALTHCARE CORPORATION

SEGMENT REPORTING

(Unaudited)

	March 31,		December 31,
	2014		2013
Assets
Hospital Operations and other	$	16,162	$	15,874
Conifer	322		256
Total	$	16,484	$	16,130

	Three Months Ended March 31
	2014			2013
Capital expenditures:
Hospital Operations and other	$	273		$	131
Conifer	8			2
Total	$	281		$	133
Net operating revenues:
Hospital Operations and other	$	3,781		$	2,268
Conifer
Tenet	140			92
Other customers	145			119
	4,066			2,479
Intercompany eliminations	(140		)	(92		)
Total	$	3,926		$	2,387
Adjusted EBITDA:
Hospital Operations and other	$	339		$	242
Conifer	48			32
Total	$	387		$	274
Depreciation and amortization:
Hospital Operations and other	$	188		$	110
Conifer	5			4
Total	$	193		$	114
Adjusted EBITDA	$	387		$	274
Depreciation and amortization	(193		)	(114		)
Impairments and restructuring charges, and acquisition-related costs	(21		)	(14		)
Litigation and investigation costs	(3		)	—
Interest expense	(182		)	(103		)
Loss from early extinguishment of debt	—			(177		)
Net loss before income taxes	$	(12	)	$	(134	)

9

(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) the cumulative effect of changes in accounting principle, net of tax; (2) net loss (income) attributable to noncontrolling interests; (3) preferred stock dividends; (4) income (loss) from discontinued operations, net of tax; (5) income tax benefit (expense); (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 benefit (costs), net of insurance recoveries; (11) hurricane insurance recoveries, net of costs; (12) impairment and restructuring charges and acquisition-related costs; 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 months ended March 31, 2014 and 2013.

For certain pro financial information of the Company as if the Vanguard acquisition had occurred at January 1, 2013, see Note 14 of the notes to the condensed consolidated financial statements in the Company’s Form 10-Q for the three months ended March 31, 2014.

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP Disclosures

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

(Unaudited)

	Three Months Ended March 31,
(Dollars in millions)	2014			2013
Net loss attributable to Tenet Healthcare Corporation common shareholders	$	(32	)	$	(88	)
Less: Net income attributable to noncontrolling interests	(16		)	(5		)
Net loss from discontinued operations, net of tax	(5		)	(2		)
Net loss from continuing operations	(11		)	(81		)
Income tax benefit	1			53
Loss from early extinguishment of debt	—			(177		)
Interest expense	(182		)	(103		)
Operating income	170			146
Litigation and investigation costs	(3		)	—
Impairment and restructuring charges, and acquisition-related costs	(21		)	(14		)
Depreciation and amortization	(193		)	(114		)
Adjusted EBITDA	$	387		$	274
Net operating revenues	$	3,926		$	2,387
Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin)	9.9		%	11.5		%

10

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP Disclosures

Table #2 - Reconciliation of Adjusted Free Cash Flow

(Unaudited)

	Three Months Ended March 31,
(Dollars in millions)	2014			2013
Net cash used in operating activities	$	(19	)	$	(32	)
Less: Payments for restructuring charges, acquisition-related costs and litigation costs and settlements	(30		)	(7		)
Net cash used in operating activities from discontinued operations	(14		)	(5		)
Adjusted net cash provided by (used in) operating activities — continuing operations	25			(20		)
Purchases of property and equipment — continuing operations	(281		)	(133		)
Adjusted free cash flow — continuing operations	$	(256	)	$	(153	)

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP Disclosures

Table #3 - Reconciliation of Outlook Adjusted EBITDA to

Outlook Net Income (Loss) Attributable to Tenet Healthcare Corporation Common Shareholders

for the Year Ending December 31, 2014

(Unaudited)

	Q2 2014						2014
(Dollars in millions)	Low			High			Low			High
Net income (loss) attributable to Tenet Healthcare Corporation common shareholders	$	(43	)	$	12		$	30		$	153
Less: Net income attributable to noncontrolling interests	(20		)	(15		)	(65		)	(55		)
Net loss from discontinued operations, net of tax	(5		)	—			(5		)	—
Net income (loss) from continuing operations	$	(18	)	$	27		$	100		$	208
Income tax (expense) benefit(a)	12			(18		)	(66		)	(138		)
Income (loss) from continuing operations, before income taxes	$	(30	)	$	45		$	166		$	346
Interest expense, net	(195		)	(185		)	(760		)	(730		)
Operating income	$	165		$	230		$	926		$	1,076
Impairment and restructuring charges, acquisition-related costs and litigation and investigation costs(b)	—			—			(24		)	(24		)
Depreciation and amortization	(210		)	(195		)	(850		)	(800		)
Adjusted EBITDA	$	375		$	425		$	1,800		$	1,900
Net operating revenues	$	3,800		$	4,000		$	15,700		$	16,000
Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin)	9.9		%	10.6		%	11.5		%	11.9		%

(a)Uses a tax rate of 40% excluding unusual adjustments.

(b)Company does not forecast impairment and restructuring charges, acquisition-related and litigation costs for the remainder of the year.

11

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP Disclosures

Table #4 - Reconciliation of Outlook Adjusted EBITDA to

Outlook Normalized Income (Loss) from Continuing Operations

for the Year Ending December 31, 2014

(Unaudited)

	Q2 2014						2014
(Dollars in millions except per share amounts)	Low			High			Low			High
Adjusted EBITDA	$	375		$	425		$	1,800		$	1,900
Depreciation and amortization	(210		)	(195		)	(850		)	(800		)
Interest expense, net	(195		)	(185		)	(760		)	(730		)
Income (loss) from continuing operations before income taxes	$	(30	)	$	45		$	190		$	370
Income tax (expense) benefit (a)	12			(18		)	(76		)	(148		)
Normalized income (loss) from continuing operations	$	(18	)	$	27		$	114		$	222
Net income attributable to noncontrolling interests	(20		)	(15		)	(65		)	(55		)
Net income (loss) attributable to common shareholders	$	(38	)	$	12		$	49		$	167
Fully diluted weighted average shares outstanding (in millions)	98			101			100			100
Normalized fully diluted earnings (loss) per share — continuing operations	$	(0.39	)	$	0.12		$	0.49		$	1.67

(a) Uses a tax rate of 40% excluding unusual adjustments.

TENET HEALTHCARE CORPORATION

Additional Supplemental Non-GAAP Disclosures

Table #5 - Reconciliation of Outlook Adjusted Free Cash Flow

for the Year Ending December 31, 2014

(Unaudited)

	2014
(Dollars in millions)	Low			High
Net cash provided by operating activities	$	1,005		$	1,065
Less:
Payments for restructuring charges, acquisition-related costs and litigation costs and settlements(a)	(30		)	(30		)
Net cash used in operating activities from discontinued operations	(15		)	(5		)
Adjusted net cash provided by operating activities — continuing operations	$	1,050		$	1,100
Purchases of property and equipment — continuing operations	(1,000		)	(900		)
Adjusted free cash flow — continuing operations	$	50		$	200

(a)Company does not forecast impairment and restructuring charges, acquisition-related and litigation costs for the remainder of the year.

12