Tenet Reports Fourth Quarter 2020 Results Announces Plan to Retire $478 million of Debt Provides 2021 Financial Guidance Net income from continuing operations available to common shareholders in 4Q20 of $414 million vers

Tenet Reports Fourth Quarter 2020 Results

Announces Plan to Retire $478 million of Debt

Provides 2021 Financial Guidance

Net income from continuing operations available to common shareholders in 4Q20 of $414 million versus a net loss from continuing operations of $3 million in 4Q19

Consolidated Adjusted EBITDA in 4Q20 of $832 million excluding $446 million of COVID stimulus grant income, or $1.278 billion including the grant income, versus $799 million in 4Q19

Diluted earnings per share from continuing operations available to common shareholders in 4Q20 of $3.86 compared to a loss per share of $0.03 in 4Q19 Adjusted diluted earnings per share from continuing operations of $4.72 in 4Q20 compared to $0.95 in 4Q19

Net cash provided by operating activities of $3.407 billion in 2020 versus $1.233 billion in 2019. Free cash flow of $2.867 billion in 2020, or $1.2 billion in 2020 excluding $1.4 billion of Medicare advances received in 2020 and $260 million of deferred company payroll tax match in 2020, compared to $563 million in 2019 - growth of $644 million or 114%

Hospital segment net patient service revenue per adjusted admission up 19.4% on a same-hospital basis versus 4Q19 Ambulatory segment same-facility system-wide revenue per surgical case up 5.0% versus the prior year

Transformative ambulatory surgery portfolio transaction during 4Q20 further diversifies the Company's business mix

Continued focus on strategic cost reduction measures and corporate efficiencies helped partially mitigate the impact of COVID, including the impact of lost revenues and higher costs related to the pandemic

The Company also announced today it plans to retire $478 million of 7% senior unsecured notes due 2025 expects annual interest savings of $33 million

FY 2021 Outlook anticipates continuing recovery from the pandemic and growth from operational improvements

Net income from continuing operations available to common shareholders of $2.09 to $3.81 per diluted share

Adjusted EBITDA of $2.900 billion to $3.100 billion

Adjusted diluted earnings per share of $3.52 to $4.81

DALLAS - February 9, 2021 - Tenet Healthcare Corporation (Tenet) (NYSE THC) today announced its results for the quarter ended December 31, 2020 (4Q20).

Ronald A. Rittenmeyer, Executive Chairman and Chief Executive Officer, stated, "In 2020, we along with so many others faced challenges we had never experienced in the history of our company. Our ability to perform under such challenging and constantly evolving circumstances

underscores the strength of all of our colleagues within the Tenet enterprise and the positive impact of our multi-year turnaround. We implemented a comprehensive and active response to the pandemic, focused on the safety of our personnel and our patients, and steadily improved performance in each operating segment as we moved through the year. We continued to advance top-tier clinical programs to serve growing acute and chronic care needs in our hospitals, while completing a transformational ambulatory transaction and pivoting our business toward higher-growth, lower cost-of-care settings. And, we continued to post an improved level of margin performance at Conifer, whose support of all of their clients was exceptional.

Rittenmeyer continued, Our resilience as an organization was tested, and we outperformed, delivered on our commitments and continued building a framework for our future growth and success. We followed our stated strategy ensuring the improvements were sustainable and the changes became part of our permanent fabric. We are very proud of every one of our colleagues across the Tenet enterprise for their selfless commitment to our patients, each other and our communities.

Tenet's results for 4Q20 versus the quarter ended December 31, 2019 (4Q19) as well as the year ended December 31, 2020 (FY 2020) versus the year ended December 31, 2019 (FY 2019) are as follows

COVID-19 Pandemic (COVID)

As previously disclosed, the Company has been experiencing operational and financial challenges associated with COVID. As Tenet continues to manage COVID and its impact on operations, the Company remains committed to the highest standards of safety, with protocols focused on the protection of its patients and employees, including the distribution of vaccines to its caregivers. Operational teams monitor real-time data to ensure sufficient staffing, intensive care unit bed capacity and personal protective equipment (PPE). Outpatient facilities are also safely performing elective procedures, and the Company's hospitals and ambulatory platform continue to follow all state and local guidelines concerning elective care.

Transformative Acquisition

On December 10, 2020, the Company announced the acquisition of a portfolio of 45 ambulatory surgical centers from SurgCenter Development (SCD) for approximately $1.1 billion. As anticipated, all the related individual transactions were completed in 4Q20.

Expands USPI ambulatory business in line with Tenet's stated strategy

Cements Tenet's position as the preeminent national musculoskeletal services leader across the care continuum

Investment is in lower cost of care, highly efficient, consumer-friendly facilities that improve healthcare affordability and access

Enhances Tenet's overall business mix and earnings profile

Early Retirement of Debt

The Company also announced today it plans to retire $478 million of 7.000 percent senior unsecured notes due in 2025 using available cash on hand. In conjunction with this transaction, Tenet expects its annual cash interest payments will be lowered by approximately $33 million.

Results from Continuing Operations Available to Tenet Common Shareholders

Net income from continuing operations available to the Company's common shareholders in 4Q20 was $414 million, or $3.86 per diluted share, versus a net loss from continuing operations of $3 million, or $0.03 per diluted share, in 4Q19. Also, 4Q20 included the benefit of $446 million pre-tax ($339 million after-tax, or $3.16 per diluted share) of grant income, including the impact of updated grant revenue recognition guidance authorized by the Consolidated Appropriations Act of 2021 enacted in December 2020.

For FY 2020, the income from continuing operations available to the Company's common shareholders was $399 million, or $3.75 per diluted share compared to a net loss from continuing operations of $226 million, or $2.19 per diluted share, for FY 2019. FY 2020 included an after-tax loss of $240 million, or $2.26 per diluted share, from early retirement of debt transactions, partially offset by the change in tax accounting method during the third quarter of 2020 of $119 million, or $1.12 per diluted share, and a favorable income tax benefit of $88 million, or $0.83 per diluted share, due to an increase in the deductibility of interest expense for income tax purposes as a result of the Coronavirus Aid, Relief and Economic Security (CARES) Act. FY 2019 included losses of $227 million pretax, $224 million after tax, or $2.14 per diluted share, associated with early retirement of debt transactions.

Adjusted Results from Continuing Operations Available to Tenet Common Shareholders

Reconciliations of net income available (loss attributable) to Tenet common shareholders to Adjusted net income from continuing operations available to Tenet's common shareholders are contained in Table #1 at the end of this release.

Tenet's 4Q20 Adjusted net income from continuing operations available to its common shareholders was $506 million, or $4.72 per diluted share, compared to $100 million, or $0.95 per diluted share, in 4Q19.

For FY 2020, Tenet reported Adjusted net income from continuing operations available to its common shareholders of $842 million, or $7.92 per diluted share, compared to $298 million, or $2.84 per diluted share, in FY 2019.

Reconciliations of net income available (loss attributable) to Tenet common shareholders to Adjusted EBITDA are contained in Table #2 at the end of this release.

Adjusted EBITDA in 4Q20 was $832 million excluding $446 million of grant income in 4Q20, or $1.278 billion including the grant income, compared to $799 million in 4Q19.

For FY 2020, Adjusted EBITDA was $3.146 billion compared to $2.730 billion in FY 2019.

Hospital Operations and Other (Hospital) Segment Results

Tenet's Hospital segment is comprised of acute care and specialty hospitals, ancillary outpatient facilities, freestanding urgent care centers (which are managed by USPI and operated under the MedPost brand and, as previously announced by the Company, nearly all are expected to be sold in early 2021), micro-hospitals and physician practices.

(a) Same-hospital revenues and statistical data include those for the 65 hospitals operated by the Company's Hospital segment continuously from January 1, 2019 through December 31, 2020. Revenues and volumes for any hospitals acquired or disposed of during that time frame are excluded. Includes revenues associated with hospital-affiliated outpatient centers. Net patient service revenues from physician practices are excluded.

(b) Adjusted admissions represent actual patient admissions adjusted to include outpatient services provided by facilities in our Hospital segment by multiplying actual patient admissions by the sum of gross inpatient revenues and outpatient revenues, then dividing that result by gross inpatient revenues.

Revenues and Volumes

Net operating revenues (which exclude grant income) in the Hospital segment were $4.065 billion in 4Q20, growth of 2.1 percent from $3.983 billion in 4Q19. The increase in revenues was primarily due to higher patient acuity and negotiated rate increases, which more than offset lower patient volumes as a result of COVID.

Net patient service revenues were $3.737 billion in 4Q20, growth of 1.7 percent from $3.673 billion in 4Q19.

Net operating revenues in the Hospital segment were $14.790 billion in FY 2020, a decline of 4.7 percent from $15.522 billion in FY 2019. The decrease in revenues was due to lower patient volumes as a result of the pandemic, partially offset by higher patient acuity, negotiated rate increases and admissions growth in January and February 2020.

Net patient service revenues were $13.611 billion in FY 2020, a decline of 5.1 percent from $14.339 billion in FY 2019.

The table below summarizes same-hospital volumes in the 2020 periods as a percent of the comparable periods in 2019 on a same business-day basis

Net patient service revenue per adjusted admission increased 19.4 percent year-over-year for 4Q20 primarily reflecting higher patient acuity, as well as negotiated rate increases.

Total selected operating expenses in the segment in 4Q20 only increased 0.9 percent, or $32 million, as continuing cost efficiency initiatives, as well as necessary cost reductions due to the decline in patient volumes associated with the pandemic, substantially offset incremental costs as a result of the pandemic, including temporary staffing and premium pay as well as higher supply costs for PPE. Selected operating expenses include salaries, wages and benefits, supplies and other operating expenses.

Adjusted EBITDA in the segment was $431 million in 4Q20 excluding $406 million of grant income, up 7.5 percent compared to $401 million in 4Q19. Including the grant income, Adjusted EBITDA was $837 million in 4Q20. The Adjusted EBITDA margin was 10.7 percent in 4Q20 (excluding $406 million of grant income and $21 million of revenues associated with the Company's closed health plan business) compared to 10.1 percent in 4Q19.

For FY 2020, Adjusted EBITDA was $1.911 billion compared to $1.449 billion in FY 2019. The Adjusted EBITDA margin was 12.9 percent in FY 2020 compared to 9.3 percent in FY 2019.

Ambulatory Care (Ambulatory) Segment Results

Tenet's Ambulatory business segment is comprised of the operations of United Surgical Partners International (USPI). As of December 31, 2020, USPI had interests in 308 ambulatory surgery centers, 40 urgent care centers (all of which operate under the CareSpot brand and, as previously announced by the Company, are expected to be sold in early 2021), 24 imaging centers and 24 surgical hospitals in more than 30 states. The Company owns 95 percent of USPI.

(c) Same-facility system-wide revenues and statistical information include the results of the facilities in which the Ambulatory segment has an investment that are not consolidated by Tenet (of the 396 facilities at December 31, 2020, the results of 106 were accounted for under the equity method for unconsolidated affiliates). To help analyze the segment's results of operations, management uses system-wide measures, which include revenues and cases of both consolidated and unconsolidated facilities. Prior-period amounts for acquired facilities are included in analyses of same-facility system-wide growth rates.

(d) Excludes the Baylor-related NCI impact of certain charges that were not included in Adjusted EBITDA. Such charges resulted in a reduction of NCI expense of $1 million in 4Q20 and FY 2020 and $4 million FY 2019.

Revenues and Volumes

The Ambulatory segment produced net operating revenues of $649 million in 4Q20, an increase of 2.7 percent compared to $632 million in 4Q19 reflecting higher patient acuity and new service line growth as well as the impact of revenues associated with the SCD portfolio transaction completed in December 2020, partially offset by lower patient volumes as a result of the pandemic.

For FY 2020, segment net operating revenues of $2.072 billion decreased 4.0 percent compared to $2.158 billion in FY 2019 due to the impact of the pandemic.

In the surgical business, which represents the majority of segment net operating revenues, same-facility system-wide revenues declined 0.7 percent in 4Q20, with cases down 5.5 percent and revenue per case up 5.0 percent reflecting higher acuity cases and new service

line growth. FY 2020 same-facility system-wide surgical business revenues declined 5.7 percent, with cases down 15.2 percent and revenue per case up 11.2 percent.

On a same-facility system-wide basis, total segment net operating revenues decreased 0.5 percent in 4Q20, with total cases decreasing 1.7 percent and revenue per case increasing 1.3 percent. On a same-facility system-wide basis, FY 2020 revenues decreased 5.6 percent, with total cases decreasing 10.0 percent and revenue per case increasing 4.9 percent.

The table below summarizes same-facility system-wide surgical cases in the 2020 periods as a percent of the comparable periods in 2019 on a same business-day basis

Segment Adjusted EBITDA of $290 million in 4Q20 declined 4.6 percent compared to $304 million in 4Q19, excluding $40 million of grant income in 4Q20. Including the grant income, Adjusted EBITDA was $330 million in 4Q20, up 8.6 percent from the prior year's quarter. Adjusted EBITDA less facility-level noncontrolling interest (NCI) was $214 million, up 12.6 percent from $190 million in 4Q19, or 1.6 percent higher excluding grant income.

For FY 2020, the segment generated Adjusted EBITDA of $868 million, a decrease of 3.0 percent from $895 million in FY 2019 due to the pandemic. Adjusted EBITDA less facility-level NCI was $558 million, a decline of 1.8 percent from $568 million in FY 2019.

Adjusted EBITDA for each of the 4Q20 and FY 2020 periods included the recognition of $40 million and $76 million, respectively, of grant income.

Conifer Segment Results

Tenet's Conifer business segment provides healthcare point-of-service and end-to-end business process services in the areas of hospital and physician revenue cycle management as well as value-based care solutions to healthcare systems, individual hospitals, physician practices, self-insured organizations, healthcare plans and other entities.

The Company continues to work on spinning off its Conifer segment. This transaction is expected to both enhance shareholder value and reduce the level of debt on Tenet through a tax-free debt-for-debt exchange.

During 4Q20, Conifer segment revenues increased 3.6 percent to $344 million, from $332 million in 4Q19, primarily due to the receipt of $9 million for services revenue previously fully reserved for in FY 2019 as a result of a client's bankruptcy. Revenues from third-party clients increased 5.2 percent to $201 million in 4Q20 from $191 million in 4Q19.

During FY 2020, Conifer's revenues declined 4.8 percent to $1.306 billion, from $1.372 billion in FY 2019, primarily due to planned hospital divestitures by both Tenet and other clients, and

the impact of the pandemic on client volumes. Revenues from third-party customers declined 2.6 percent to $778 million in FY 2020 from $799 million in 4Q19.

Conifer generated $111 million of Adjusted EBITDA in 4Q20, up 18.1 percent from $94 million in 4Q19 primarily due to continuing cost reduction initiatives and the $9 million receipt described above for revenues previously reserved for in FY 2019. The Adjusted EBITDA margin was 32.3 percent in 4Q20 compared to 28.3 percent in 4Q19.

Conifer generated $367 million of Adjusted EBITDA in FY 2020, down 4.9 percent from $386 million in FY 2019 primarily due to the impact of the pandemic on client volumes and client hospital divestitures, which were substantially offset by cost-reduction initiatives. The Adjusted EBITDA margin was 28.1 percent in both FY 2020 and FY 2019.

Balance Sheet, Cash Flows and Liquidity

Balance Sheet Highlights

(e) Net debt is total debt less cash and cash equivalents

Cash and cash equivalents at December 31, 2020 were $2.184 billion higher than December 31, 2019 to ensure sufficient liquidity given COVID operational pressures and uncertainty, and since the Company will begin to repay the Medicare advances in 2021.

The Company received approximately $1.5 billion of Medicare advance payments from the Centers for Medicare and Medicaid Services (CMS) in FY 2020 (approximately $1.4 billion is included in free cash flow). Repayment terms for the Medicare advance payments begin 12 months from the provider's receipt of the advance payments. An interest rate of 4 percent will also be assessed on any outstanding balances 29 months from the initial advance. The Company will begin repaying the advance payments in April 2021 and expects to fully repay the advances before interest starts to accrue in September 2022.

The Company had no outstanding borrowings on its $1.9 billion line of credit as of December 31, 2020 or February 9, 2021.

The Company's ratio of net debt plus the Medicare advances liability to Adjusted EBITDA was 4.70x at December 31, 2020 compared to 5.21x at September 30, 2020 and 5.31x at December 31, 2019. On a pro forma basis, assuming the Company owned the 45 SCD

centers acquired in December 2020 for a full year, the ratio would be approximately 4.42x as of December 31, 2020.

During FY 2020, the Company completed a series of successful debt offerings including

$700 million of 7.500 percent Notes issued in April 2020

$600 million of 4.625 percent Notes issued in June 2020 and

$2.5 billion offering of 6.125 percent senior unsecured notes in the third quarter of 2020 to retire all of the Company's previously outstanding 8.125% unsecured notes that were due in April 2022. These transactions eliminated any significant debt maturities until June 2023 as well as reduces future annual cash interest expense payments by approximately $50 million.

Cash flows and liquidity

Reconciliations of net cash provided by operating activities to both Free Cash Flow and Adjusted Free Cash Flow are contained in Table #3 at the end of this release.

The Company produced positive free cash flow of $280 million in 4Q20 versus $342 million in 4Q19.

Cash and cash equivalents decreased $854 million during 4Q20 to $2.446 billion at December 31, 2020 compared to $3.300 billion at September 30, 2020 primarily due to the acquisition of the 45 SCD ambulatory centers for approximately $1.1 billion described above.