Tenet Reports Results for the First Quarter Ended

Tenet Reports Results for the First Quarter Ended March 31, 2017

DALLAS May 1, 2017 Tenet Healthcare Corporation (NYSE:THC) reported a net loss from continuing operations of

$52 million in the first quarter of 2017, a $3 million improvement when compared to a $55 million net loss from continuing operations in the first quarter of 2016. Adjusted EBITDA was $527 million in the first quarter of 2017,

down from $617 million in the first quarter of 2016.

In the first quarter, we achieved strong financial results, delivering Adjusted EBITDA

that was at the high end of our Outlook range, said Trevor Fetter, chairman and chief

executive officer. Today, we announced that we have reached a new agreement with Humana that we believe is in the best interests of both companies and our shared customers. We

also completed the sale of the majority of our home health and hospice businesses, sold our Managed Medicaid plan in Arizona, and entered into a definitive agreement to sell three acute care hospitals and related operations in Houston. In addition,

we announced that we are increasing our ownership of USPI to 80% this year. These actions are part of a strategic effort to reduce complexity across the enterprise and enhance returns for our shareholders.

Adjusted EBITDA of $527 million in the first quarter of 2017 represents a $90 million decline from $617 million of Adjusted EBITDA in the first

quarter of 2017. The decline was primarily attributable to three factors:

(i) no revenue being recorded under the California Provider Fee

program in the first quarter of 2017 versus $57 million in the first quarter of 2016 since the 2017 program has not yet been approved by the Centers for Medicare and Medicaid Services (CMS);

(ii) the sale of Tenet s hospitals in Atlanta, Georgia, which generated approximately $25 million of EBITDA in the first quarter of

2016 and which were divested on April 1, 2016; and,

(iii) approximately $7 million in

start-up losses in the first quarter of 2017 at the Company s new hospital in El Paso, Texas, which opened in January 2017.

Note that the $617 million of Adjusted EBITDA in the first quarter of 2016 was restated and equals: (i) $613 million of Adjusted EBITDA that was

originally reported for the first quarter of 2016, plus (ii) $7 million due to a change in pension accounting which lowered Salaries, Wages and Benefits by this amount, less (iii) $3 million of positive EBITDA generated by the

Company s health plan business in the first quarter of 2016.

Hospital Operations and Other Segment

Net operating revenue in the Hospital Operations and other segment was $4.115 billion, down 6.4 percent from $4.397 billion in the first quarter

of 2016. The decline was primarily due to the divestiture of Tenet s hospitals and related operations in Atlanta effective April 1, 2016 and not being able to record revenue under the California Provider Fee Program in the first quarter of

2017 since the extension of this program has not yet been approved by CMS.

On a same-hospital basis, patient revenue decreased to $4.068 billion,

down 1.0 percent from $4.108 billion in the first quarter of 2016. The decline was primarily due to a 2.5 percent decrease in adjusted admissions, partially offset by a 1.6 percent increase in net patient revenue per adjusted

admission. The Company s same-hospital revenue per adjusted admission was lowered by approximately 140 basis points due to the lack of CMS approval of the California Provider Fee Program. In addition, if we exclude patients that were insured by

Humana in both periods, same-hospital adjusted admissions declined 0.8 percent.

Adjusted EBITDA in Tenet s hospital segment was $309 million, representing a decline of

$109 million or 26.1 percent as compared to $418 million in the first quarter of 2016. The $109 million decline in EBITDA in the hospital segment was primarily driven by the California Provider Fee program, the divestiture of

Tenet s hospitals and related operations in Atlanta effective April 1, 2016, and start-up losses at our new hospital in El Paso, which collectively resulted in an $89 million year-over-year

decline in EBITDA in the hospital segment. In addition, a 5.4% increase in same-hospital charity and uninsured admissions contributed to a $34 million increase in the provision for doubtful accounts on a same hospital basis, from

$338 million in the first quarter of 2016 to $372 million in the first quarter of 2017, which placed pressure on the year-over-year EBITDA comparison.

Tenet s health plan business generated losses of $16 million in the first quarter of 2017 versus positive EBITDA of $3 million in the first

quarter of 2016. The revenue and expenses associated with the Company s health plan operations are included in Tenet s consolidated statements of operations, however, the results are excluded from Adjusted EBITDA in both periods.

Selected operating expenses in the segment, defined as the sum of salaries, wages and benefits, supplies and other operating expenses, increased

1.9 percent on a per adjusted admission basis.

Tenet s same-hospital exchange admissions were 5,168 in the first quarter of 2017, down 1.8 percent from the first quarter of 2016. Same-hospital

exchange outpatient visits were 51,008 in the first quarter of 2017, up 13.9 percent from the first quarter of 2016.

Tenet s provision for doubtful accounts was $383 million in the first quarter of 2017, representing a ratio of 7.4 percent of revenues before

bad debt, as compared to $376 million in the first quarter of 2016, or 6.9 percent of revenues before bad debt. The increase in the bad debt ratio was primarily attributable to a $34 million increase in uninsured revenues.

Tenet s uncompensated care costs, defined as the sum of the provision for doubtful accounts, charity care write-offs and uninsured discounts, was

$1.342 billion and $1.309 billion in the first quarters of 2017 and 2016, respectively, including $959 million and $933 million, respectively, of charity care write-offs and uninsured discounts that were offered through

Tenet s Compact with Uninsured Patients. Uncompensated care in the first quarter of 2017 represented 21.8 percent of revenue before bad debts, uninsured discounts and charity care write-offs, up from 20.6 percent in the first quarter

of 2016. Nearly all of Tenet s uncompensated care is associated with the Hospital Operations and other segment.

Uninsured plus charity admissions increased by 516 admissions, or 5.4 percent on a same-hospital basis in

the first quarter of 2017 compared to the first quarter of 2016. Uninsured plus charity outpatient visits decreased by 17,998 visits, or 12.5 percent, on a same-hospital basis.

Ambulatory Care Segment

During the first quarter of

2017, the Ambulatory segment produced net operating revenues of $455 million, representing an increase of 6.1 percent as compared to $429 million in the first quarter of 2016. In addition, the Ambulatory segment generated Adjusted

EBITDA of $153 million, up 12.5 percent from $136 million in the first quarter of 2016 and Adjusted EBITDA less facility-level NCI was $100 million, up 11.1% from $90 million in the first quarter of 2016.

The results of many of the facilities in which the Ambulatory segment has an investment are not consolidated by Tenet. 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. On a same-facility system-wide basis, revenue in the Ambulatory segment increased 6.1 percent, with

cases increasing 0.5 percent and revenue per case increasing 5.6 percent. Excluding patients insured by Humana in both periods, same-facility system-wide cases increased 2.4 percent in the first quarter of 2017.

During the first quarter of 2017,

Conifer s revenue increased 4.4 percent to $402 million, up from $385 million in the first quarter of 2016. Revenue from third party customers increased 11.5 percent to $243 million. Conifer generated $65 million

of Adjusted EBITDA in the first quarter of 2017, up 3.2 percent from $63 million in the first quarter of 2016.

Net Income and Earnings Per

Tenet reported a net loss from continuing operations of $52 million, or $0.52 per share, in the first quarter of 2017 compared to a net

loss of $55 million, or $0.56 per share, in the first quarter of 2016.

After adjusting for certain items which are listed on Table #2, Tenet

recorded an Adjusted net loss from continuing operations of $27 million, or $0.27 per share, during the first quarter of 2017, as compared to Adjusted net income from continuing operations of $45 million, or $0.45 per diluted share, in the

first quarter of 2016.

A reconciliation of GAAP net income available (loss attributable) to Tenet Healthcare Corporation common shareholders to Adjusted

net income from continuing operations and Adjusted diluted earnings per share from continuing operations is contained in Table #2 at the end of this release.

Cash Flow and Liquidity

Cash and cash equivalents were $572 million at March 31, 2017 compared to $716 million at December 31, 2016. The Company had no outstanding

borrowings on its $1 billion credit line as of March 31, 2017. Accounts receivable days outstanding were 55.4 at March 31, 2017 compared to 54.8 at December 31, 2016. Excluding the revenues from the Company s health plans in

both periods and revenues from the California Provider Fee program in the 2016 period (as previously mentioned no amounts were recognized in the 2017 period), accounts receivable days outstanding were 56.1 days and 56.7 days at March 31, 2017

and December 31, 2016, respectively.

Net cash provided by operating activities for the three months ended March 31, 2017 was $186 million,

representing a $39 million increase compared to $147 million in the first quarter of 2016. After subtracting $198 million and $208 million of capital expenditures in the three months ended March 31, 2017 and March 31,

2016, respectively, Free Cash Flow was an outflow of $12 million in the three months ended March 31, 2017, representing a $49 million improvement compared to an outflow of $61 million in the comparable period in 2016. Adjusted

Free Cash Flow was $9 million in the three months ended March 31, 2017, representing a $2 million decline from $11 million in the comparable period in 2016.

Net cash used in investing activities was $189 million in the three months ended March 31, 2017 compared to $320 million of net cash provided

by investing activities in the comparable period in 2016. The 2016 period included $573 million of proceeds from the sale of the Company s hospitals and related outpatient facilities in Georgia.

Net cash used by financing activities was $141 million in the three months ended March 31, 2017 compared to $95 million of net cash used in

financing activities in the comparable period in 2016. The 2017 period included the Company s purchase of the land and improvements associated with Palm Beach Gardens Medical Center, which was previously leased under a capital lease, for

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.

Tenet and Humana Inc. have reached a new, multi-year agreement in which all of Tenet s hospitals and hospital-affiliated outpatient centers and employed

physicians will be phased back into Humana s network between June 1, 2017 and October 1, 2017. All of USPI s facilities will be added to Humana s network on June 1, 2017.

The Company s hospitals that are being added to Humana s network on October 1, 2017 are in markets where Humana has a larger presence. These

hospitals represent the majority of the revenue that Tenet previously generated from Humana under its prior contractual relationship.

Definitive Agreement to Sell Acute Care Hospitals and Related Operations in Houston

Tenet and HCA Holdings, Inc. have entered into a definitive agreement for the sale of Tenet s acute care hospitals and related operations in Houston,

Texas. The transaction is expected to result in net proceeds of approximately $725 million and to be completed in the third quarter of 2017, subject to customary regulatory approvals and closing conditions.

The facilities included in the sale are three acute care hospitals (Cypress Fairbanks Medical Center, Houston Northwest Medical Center and Park Plaza

Hospital) and one long-term acute care hospital (Plaza Specialty Hospital), as well as other hospital-affiliated entities, including physician practices.

During 2016, these facilities generated net revenue after the provision for doubtful accounts of approximately $575 million and Adjusted EBITDA of

approximately $80 million.

Accelerating the Purchase of USPI

The Company has amended its put/call agreement with Welsh Carson Anderson & Stowe, which will result in Tenet owning 80 percent of the United

Surgical Partners International (USPI) joint venture on or before July 3, 2017. Currently, Tenet owns 56.3 percent of USPI. In 2017, Tenet will pay Welsh Carson $711 million to buy 23.7 percent of USPI at a multiple of

approximately 10x projected 2017 EBITDA less facility level NCI.

Tenet expects to buy from Welsh Carson another 7.5 percent of USPI in 2018 and

7.5 percent in 2019. As a result, Tenet expects to own 95 percent of USPI in 2019 with the remaining 5 percent owned by a subsidiary of Baylor Scott & White Health, which is USPI s largest

not-for-profit health system partner. The projected payments in 2018 and 2019 will be approximately $275 million to $325 million in each of the two years. The

actual payments in 2018 and 2019 will be determined based on USPI s financial performance, with Tenet paying a multiple of 10x EBITDA less facility level NCI.

The Company expects to fund these payments from general sources of corporate liquidity, including cash on hand, proceeds of asset divestitures and borrowings