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Tenet Reports Strongest Volume Growth in Four Years for Quarter Ended June 30, 2008

August 5, 2008

Tenet Healthcare Corporation (NYSE:THC) today reported a net loss of $15 million, or $0.03 per share, for its second quarter of 2008, compared to a net loss of $30 million, or $0.06 per share, for its second quarter of 2007. Adjusted EBITDA, defined below, for the second quarter of 2008 was $163 million, an increase of 4.5 percent, as compared to $156 million for the second quarter of 2007. Adjusted EBITDA for the second quarter of 2008 excluded $12 million of EBITDA from USC University Hospital, which was moved to discontinued operations, and two other hospitals that were divested during the quarter. The exclusion of USC University Hospital from continuing operations and the impact of a $16 million adverse prior year cost report adjustment related to a pending CMS decision in connection with GME FTE limits and related reimbursement at one of our hospitals reduced continuing operations earnings per share by $0.03 per share.

“I am very pleased with our core, same-hospital growth in admissions as well as the increase in outpatient visits by paying patients,” said Trevor Fetter, president and chief executive officer. “Not only is this the best performance we’ve had in the last four years, it continues an improving trend and demonstrates the increasing effectiveness of our strategies around quality, targeted service lines, and physician relationships.”

“Same-hospital commercial managed care admissions were up 1.3 percent in the eight service lines representing the primary focus of our Targeted Growth Initiative,” said Stephen L. Newman, M.D., chief operating officer. “This growth was aided by net expansion of our active medical staff, which grew by 354 physicians in the second quarter, including 119 physicians at our new hospital in El Paso. We expect the increasing number of physicians on the medical staffs of our hospitals will prove to be a robust leading indicator of our ability to sustain our positive trend in volumes. Pricing increases were also strong in the quarter, with same-hospital net operating revenues from commercial payers growing by 7.5 percent.”

“We produced $42 million in adjusted free cash flow from continuing operations in the quarter,” said Biggs C. Porter, chief financial officer. “We are substantively unchanged in our outlook for 2008, adjusting it only for the reclassification of USC to discontinued operations. We are also maintaining our $1 billion 2009 objective for adjusted EBITDA despite the sales of USC, our interest in Broadlane, and other assets. These asset dispositions have an offsetting positive impact on shareholder value resulting from the reduction in net debt.”

Adjusted EBITDA

Adjusted EBITDA, defined below, was $163 million, or a margin of 7.6 percent of net operating revenues, in the second quarter of 2008. This represents an increase of $7 million, or 4.5 percent, from $156 million in the second quarter of 2007, and a margin decline of 20 basis points as compared to an adjusted EBITDA margin of 7.8 percent in the second quarter of 2007. Adjusted EBITDA was $379 million for the first six months of 2008 as compared to $337 million for the first six months of 2007, an increase of $42 million, or 12.5 percent.

Same-hospital adjusted EBITDA, defined below, was $171 million in the second quarter of 2008, an increase of $15 million, or 9.6 percent, from the $156 million in the second quarter of 2007. Same-hospital adjusted EBITDA margin increased by 30 basis points to 8.1 percent in the second quarter of 2008 as compared to a same-hospital adjusted EBITDA margin of 7.8 percent in the second quarter of 2007.

The two leased hospitals that remain in continuing operations but whose leases will not be renewed reported breakeven adjusted EBITDA in both the second quarters of 2008 and 2007. The results from these two hospitals have been excluded from the calculation of adjusted EBITDA as well as same-hospital adjusted EBITDA. These two hospitals are our Irvine Regional Hospital and Medical Center and Community Hospital of Los Gatos. The leases on these hospitals expire in February and May 2009, respectively. The results from these two hospitals will be excluded from the calculation of adjusted EBITDA in future quarters as well.

Adjusted EBITDA is a non-GAAP term defined by the Company as net income (loss) before: (1) the cumulative effect of changes in accounting principle, net of tax; (2) income (loss) from discontinued operations, net of tax; (3) income (loss) from leased hospitals whose leases will not be renewed; (4) income tax (expense) benefit; (5) net gains (losses) on sales of investments; (6) minority interests; (7) investment earnings; (8) interest expense; (9) litigation and investigation (costs) benefit; (10) hurricane insurance recoveries, net of costs; (11) impairment of long-lived assets and goodwill and restructuring charges, net of insurance recoveries; (12) amortization; and (13) depreciation. A reconciliation of net income (loss) to “adjusted EBITDA” is provided in Table #1 at the end of this release.

Same-Hospital Data

Same-hospital data excludes the impact of two hospitals: (1) Coastal Carolina Medical Center, which we acquired on June 30, 2007; and (2) Sierra Providence East Medical Center, in El Paso, which opened on May 21, 2008. Same-hospital data is the primary form of tabular data presentation in the narrative sections of this document.

Total-hospital data, including the contribution of Coastal Carolina Medical Center and Sierra Providence East Medical Center, is provided in the tabular presentation of data at the end of this document. As a result of this approach, certain amounts in the narrative section of this document will not tie to amounts in the condensed consolidated statement of operations.

At June 30, 2008, there were 52 hospitals in total-hospital continuing operations, a net decline of two hospitals from the 54 hospitals reported in total-hospital continuing operations at March 31, 2008. This change reflects the addition of Sierra Providence East Medical Center in El Paso, the sale of two hospitals, Garden Grove Hospital and Medical Center and San Dimas Community Hospital, both in California, and their reclassification into discontinued operations, and the reclassification of USC University Hospital into discontinued operations as a result of the anticipated divestiture of this hospital.

Continuing operations, both total-hospital and same-hospital, include the results from Irvine Regional Hospital and Medical Center and Community Hospital of Los Gatos. We previously announced our intent not to renew those leases. These two hospitals will remain in continuing operations until their respective leases expire.

  Admissions, Patient Days and Surgeries ----------------------------------------------------------------------  Admissions, Patient Days and                   Same-Hospital Surgeries                        Continuing Operations ---------------------------- Q2'08    Q2'07   Change (%) ----------------------------------------  -------  -------  ---------- Commercial Managed Care Admissions                               37,381   38,229     (2.2) ----------------------------------------  -------  -------  ---------- Governmental Managed Care Admissions                               27,685   23,864      16.0 ----------------------------------------  -------  -------  ---------- Medicare Admissions                       40,600   40,991     (1.0) ----------------------------------------  -------  -------  ---------- Medicaid Admissions                       15,867   16,252     (2.4) ----------------------------------------  -------  -------  ---------- Uninsured Admissions                       5,979    5,724      4.5 ----------------------------------------  -------  -------  ---------- Charity Care Admissions                    2,497    2,479      0.7 ----------------------------------------  -------  -------  ---------- Other Admissions                           3,439    3,389      1.5 ----------------------------------------  -------  -------  ---------- Total Admissions                       133,448  130,928     1.9 ----------------------------------------  -------  -------  ---------- Admissions excluding Charity + Uninsured                                124,972  122,725     1.8 ----------------------------------------  -------  -------  ---------- Charity Admissions + Uninsured Admissions                                8,476    8,203      3.3 ----------------------------------------  -------  -------  ---------- Admissions through Emergency Department                               74,025   72,143      2.6 ----------------------------------------  -------  -------  ---------- Commercial Managed Care Admits / Total Admits                        (%)   28.0     29.2    (1.2) (a) ----------------------------------------  -------  -------  ---------- Emergency Department Admissions / Total Admits                        (%)   55.5     55.1     0.4 (a) ----------------------------------------  -------  -------  ---------- Uninsured Admissions / Total Admissions                          (%)    4.5      4.4     0.1 (a) ----------------------------------------  -------  -------  ---------- Charity Admissions / Total Admissions                          (%)    1.9      1.9      - (a) ----------------------------------------  -------  -------  ---------- Surgeries - Inpatient                     40,267   39,901      0.9 ----------------------------------------  -------  -------  ---------- Surgeries - Outpatient                    53,386   51,613      3.4 ----------------------------------------  -------  -------  ---------- Surgeries - Total                         93,653   91,514      2.3 ----------------------------------------  -------  -------  ---------- Patient Days - Total                      657,451  649,207     1.3 ----------------------------------------  -------  -------  ---------- Adjusted Patient Days (b)                 949,829  930,147     2.1 ----------------------------------------  -------  -------  ---------- Patient Days - Commercial Managed Care                                     148,419  153,096    (3.1) ----------------------------------------  -------  -------  ---------- Average Length of Stay            (days)    4.9      5.0    (0.1) (a) ----------------------------------------  -------  -------  ---------- Adjusted Patient Admissions (b)           194,104  188,775     2.8 ---------------------------------------------------------------------- (a) This change is the difference between the Q2'08 and Q2'07 amounts shown (b) "Adjusted Patient Days / Admissions" represents actual patient days / admissions adjusted to include outpatient services by multiplying actual patient days / admissions by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues. ---------------------------------------------------------------------- 

All regions achieved admissions growth of 2.5 percent, or better, with the exception of our Southern States Region, which experienced an admissions decline of 1.4 percent in the second quarter of 2008. Florida’s admissions growth was particularly strong with admissions increasing by 3.0 percent. Growth was also strong in Philadelphia with admissions increasing by 5.1 percent in the second quarter.

  Outpatient Visits ----------------------------------------------------------------------  Outpatient Visits                       Same-Hospital Continuing Operations ---------------------------- Q2'08    Q2'07   Change (%) ----------------------------------------  -------  -------  ---------- Total OP Visits                           959,839  962,420    (0.3) ----------------------------------------  -------  -------  ---------- Uninsured OP Visits                       100,733  104,486    (3.6) ----------------------------------------  -------  -------  ---------- Uninsured OP Visits / Total OP Visits                              (%)   10.5     10.9    (0.4) (a) ----------------------------------------  -------  -------  ---------- Charity Care OP Visits                     4,857    6,886     (29.5) ----------------------------------------  -------  -------  ---------- Charity Care OP Visits / Total OP Visits                              (%)    0.5      0.7    (0.2) (a) ----------------------------------------  -------  -------  ---------- OP Visits excluding Charity and Uninsured                                854,249  851,048     0.4 ----------------------------------------  -------  -------  ---------- OP Surgery Visits                         53,386   51,613      3.4 ----------------------------------------  -------  -------  ---------- Commercial Managed Care OP Visits         359,823  366,512    (1.8) ----------------------------------------  -------  -------  ---------- Commercial OP Visits / Total Visits  (%)   37.5     38.1    (0.6) (a) ---------------------------------------------------------------------- (a) This change is the difference between the Q2'08 and Q2'07 amounts shown ---------------------------------------------------------------------- 

Excluding uninsured and charity outpatient visits, outpatient visits increased by 0.4 percent in the second quarter of 2008 as compared to the second quarter of 2007. Our growth in outpatient visits continues to be adversely impacted by increasing competition from physician-owned entities providing outpatient services. Approximately half the large 29.5 percent decline in charity visits is attributable to the recent expansion of a county government clinic near one of our hospitals.

Imaging visits declined by 7,361, or 3.1 percent, more than fully accounting for the total decline of 2,581 outpatient visits. This was largely the result of volume losses to a growing number of competing retail imaging centers.

The 3.4 percent increase in outpatient surgery volume included a 28 percent increase in volumes at our freestanding ambulatory surgery centers.

  Revenues ----------------------------------------------------------------------  Revenues                            Same-Hospital ($ in millions)                    Continuing Operations ------------------------ Q2'08  Q2'07  Change (%) --------------------------------------------  -----  -----  ---------- Net Operating Revenues                        2,175  2,054     5.9 --------------------------------------------  -----  -----  ---------- Net Patient Revenue from Commercial Managed Care                                  886    824      7.5 --------------------------------------------  -----  -----  ---------- Revenues from the Uninsured                    159    156      1.9 --------------------------------------------  -----  -----  ---------- Charity Care Gross Charges (a)                 145    150     (3.3) --------------------------------------------  -----  -----  ---------- Provision for Doubtful Accounts ("Bad Debt")                                        153    142      7.7 --------------------------------------------  -----  -----  ---------- Uncompensated Care (b)                         298    292      2.1 --------------------------------------------  -----  -----  ---------- Uncompensated Care / (Net Operating Revenues plus Charity Care Gross Charges) (b)                            (%)  12.8   13.2   (0.4) (c) ---------------------------------------------------------------------- (a) Charity Care Gross Charges are not included in Net Operating Revenues (b) "Uncompensated Care" is a non-GAAP measure defined as Charity Care Gross Charges plus Provision for Doubtful Accounts (c) This change is the difference between the Q2'08 and Q2'07 amounts shown ---------------------------------------------------------------------- 

Net operating revenues for the second quarter of 2008 were adversely impacted by a $22 million change in prior year cost report and valuation allowance adjustments resulting from the net impact of unfavorable cost report adjustments of $9 million in the second quarter of 2008 compared to favorable cost report adjustments of $13 million in the second quarter of 2007. The principal reason for the net negative cost report adjustments in the second quarter of 2008 was a $16 million adverse adjustment related to a pending CMS decision in connection with GME FTE limits and related reimbursement at one of our hospitals. We are pursuing a reversal of CMS’s position on this matter. Excluding these cost report adjustments from both quarters, same-hospital net operating revenues would have increased by $143 million, or 7.0 percent, from the second quarter of 2007 to the second quarter of 2008.

  Pricing ----------------------------------------------------------------------  Pricing                          Same-Hospital ($)                        Continuing Operations -------------------------- Q2'08   Q2'07   Change (%) ------------------------------------------  ------  ------  ---------- Net Inpatient Revenue per Admission         10,753  10,502     2.4 ------------------------------------------  ------  ------  ---------- Net Inpatient Revenue per Patient Day       2,183   2,118      3.1 ------------------------------------------  ------  ------  ---------- Net Outpatient Revenue per Visit             694     635       9.3 ------------------------------------------  ------  ------  ---------- Net Patient Revenue per Adjusted Patient Admission                                  10,824  10,520     2.9 ------------------------------------------  ------  ------  ---------- Net Patient Revenue per Adjusted Patient Day                                        2,212   2,135      3.6 ------------------------------------------  ------  ------  ---------- Managed Care: Net Inpatient Revenue per Admission                                  11,414  10,805     5.6 ------------------------------------------  ------  ------  ---------- Managed Care: Net Outpatient Revenue per Visit                                       810     742       9.2 ---------------------------------------------------------------------- 

Pricing improvement was evident across all key metrics, primarily reflecting the improved terms of our commercial managed care contracts. Inpatient pricing in the second quarter of 2008 was adversely affected by the $16 million adverse adjustment that, as described above, is related to a pending CMS decision in connection with GME FTE limits and related reimbursement at one of our hospitals.

Outpatient pricing outpaced the growth in inpatient pricing due to an improving mix of procedures performed in our outpatient facilities.

  Controllable Operating Expenses ----------------------------------------------------------------------  Controllable Operating Expenses                 Same-Hospital Continuing Operations ------------------------ Q2'08  Q2'07  Change (%) --------------------------------------------  -----  -----  ---------- Salaries, Wages & Benefits             ($mm)   959    913      5.0 --------------------------------------------  -----  -----  ---------- Supplies                               ($mm)   390    359      8.6 --------------------------------------------  -----  -----  ---------- Other Operating Expenses               ($mm)   502    484      3.7 --------------------------------------------  -----  -----  ---------- Total Controllable Operating Expenses                           ($mm)  1,851  1,756     5.4 --------------------------------------------  -----  -----  ---------- Rent / Lease Expense (a)               ($mm)   38     38        - --------------------------------------------  -----  -----  ---------- Unit Cost Statistics --------------------------------------------  -----  -----  ---------- Salaries, Wages & Benefits per Adjusted Patient Day                    ($)  1,010   982      2.9 --------------------------------------------  -----  -----  ---------- Supplies per Adjusted Patient Day        ($)   411    386      6.5 --------------------------------------------  -----  -----  ---------- Other Operating Expenses per Adjusted Patient Day                             ($)   528    520      1.5 --------------------------------------------  -----  -----  ---------- Total Controllable Operating Expenses per Adjusted Patient Day                ($)  1,949  1,888     3.2 ---------------------------------------------------------------------- (a) Included in Other Operating Expenses ---------------------------------------------------------------------- 

On a per adjusted patient day basis, the 3.2 percent increase in controllable operating expenses is within our outlook of 3.0 to 3.5 percent for 2008.

On a per adjusted patient day basis, salaries, wages and benefits increased 2.9 percent in the second quarter of 2008 as compared to the second quarter of 2007. This increase is primarily due to merit increases for our employees, increased annual incentive compensation costs and increased health benefits costs, partially offset by a decline in full-time employee headcount and contract labor expense, and improved workers’ compensation loss experience.

Supplies expense per adjusted patient day increased by 6.5 percent in the second quarter of 2008 as compared to the second quarter of 2007. The increase in supplies expense is primarily due to the increased number of surgeries as well as higher costs for implants and pacemakers, reflecting both technology improvements and inflationary price increases. The increase in supplies expense was partially offset by lower cardiovascular and pharmaceutical supply costs, resulting from a decline in cardiovascular procedures and our initiatives to use more cost-effective pharmaceuticals. The increase in supplies expense is offset by revenue growth, including pass-through payments we receive from certain payers.

“Other Operating Expenses” per adjusted patient day increased by 1.5 percent in the second quarter of 2008 as compared to the second quarter of 2007. The increase is primarily due to the higher physician fees and contracted services, partially offset by lower information systems implementation costs, lower malpractice expense, and increased volume levels. Growth in our patient volumes reduces other operating expenses on a per adjusted patient day basis as a result of fixed costs in this expense category that do not fluctuate with changes in our patient volumes such as utilities, property taxes, rent, certain information technology costs and certain contracted services.

The “Other Operating Expenses” line item includes malpractice expense which was $39 million in the second quarter of 2008 compared to $45 million in the second quarter of 2007. This decrease is primarily attributable to improved claims experience partially offset by $3 million of incremental expenses related to a lower interest rate environment that increased the discounted present value of projected future liabilities.

  Provision for Doubtful Accounts ----------------------------------------------------------------------  Bad Debt                            Same-Hospital Continuing Operations ------------------------ Q2'08  Q2'07  Change (%) --------------------------------------------  -----  -----  ---------- Provision for Doubtful Accounts ("Bad Debt")                                ($mm)   153    142      7.7 --------------------------------------------  -----  -----  ---------- Bad Debt / Net Operating Revenues      (%)     7.0    6.9    0.1 (a) --------------------------------------------  -----  -----  ---------- Collection Rate from Self-Pay          (%)     36     35     1.0 (a) --------------------------------------------  -----  -----  ---------- Collection Rate from Managed Care Payers                                (%)     98     98      - (a) ---------------------------------------------------------------------- (a) This change is the difference between the Q2'08 and Q2'07 amounts shown ---------------------------------------------------------------------- 

Our provision for doubtful accounts increased primarily due to higher uninsured revenues, pricing increases and improved charge capture in our emergency departments. The adverse impact from these pressures on our bad debt expense were partially mitigated by higher collections at point-of-service and improved collection trends primarily related to self-pay accounts.

Accounts Receivable

Consolidated accounts receivable were $1.450 billion at June 30, 2008, and $1.468 billion at March 31, 2008. Accounts receivable days outstanding from continuing operations were 53 days at June 30, 2008, flat compared to March 31, 2008 and December 31, 2007.

Cash Flow

Cash and cash equivalents were $352 million at June 30, 2008, an increase of $74 million from $278 million at March 31, 2008. Adjusted Free Cash Flow, defined below, was positive $39 million in the second quarter of 2008 compared to negative $6 million in the second quarter of 2007.

Adjusted Free Cash Flow, a non-GAAP term, is defined by the Company as cash flows provided by (used in) operating activities less capital expenditures in continuing operations, new and replacement hospital construction expenditures, income tax refunds (payments), net cash provided by operating activities from discontinued operations, cash flows from hospitals whose leases will not be renewed, and payments against reserves for restructuring charges and litigation costs and settlements. The reconciliation of net cash provided by (used in) operating activities, the most comparable GAAP term, to Adjusted Free Cash Flow is provided in Table #2 at the end of this release.

Significant cash receipts and disbursements in the second quarter of 2008 included:

 (1) $60 million in proceeds from the sale of facilities and other assets related to discontinued operations; (2) Capital expenditures of $110 million, consisting of $102 million in continuing operations and $8 million in discontinued operations; (3) $70 million in interest payments; (4) $22 million in principal payments (excluding interest of $2 million) related to the Company's 2006 civil settlement with the federal government; (5) Net income tax payments of $4 million; and, (6) $3 million payment to acquire a surgery center now affiliated with the Company's John F. Kennedy Memorial Hospital in California. 

Net cash provided by operating activities was $123 million in the second quarter of 2008 as compared to $285 million in the second quarter of 2007, a decline of $162 million. Factors contributing to the decline in cash provided by operating activities in the second quarter of 2008 compared to the second quarter of 2007 include the following:

 (1) Net income tax refunds of $169 million were received in the second quarter of 2007 compared to payments of $4 million in the second quarter of 2008; (2) Payments of $24 million ($22 million in principal and $2 million in interest) in the second quarter of 2008 related to our 2006 civil settlement with the federal government. No payments related to this settlement were required in the second quarter of 2007; and, (3) $31 million of additional cash flows related to enhanced management of our accounts payable. 

Outlook for 2008 and 2009

Tenet’s outlook for 2008 is substantively unchanged. However, we are updating the range of our 2008 adjusted EBITDA outlook for continuing operations only for the reclassification of the earnings of USC University Hospital to discontinued operations. Accordingly, the underlying performance of the hospitals in continuing operations is expected to remain the same as was reflected in the prior expressed outlook for 2008 adjusted EBITDA of $775 million to $850 million. After reflecting the reclassification of USC, the revised 2008 outlook for adjusted EBITDA for continuing operations is $750 million to $825 million, and the range for net loss is $120 million to $20 million. There is a parallel change in the 2008 outlook for adjusted cash flow from operations from the prior range of $400 million to $500 million to the revised 2008 outlook range of $375 million to $475 million. Tenet is maintaining its 2009 objective of $1 billion in adjusted EBITDA and approximately breakeven adjusted free cash flow.

A reconciliation of outlook adjusted EBITDA to net loss for the year ending December 31, 2008 is provided in Table #3; and a reconciliation of outlook adjusted net cash provided by operating activities, and outlook adjusted free cash flow from continuing operations to outlook net cash provided by operating activities for the year ending December 31, 2008 is provided in Table #4 at the end of this document.

Management’s Webcast Discussion of Second Quarter Results

Tenet management will discuss second quarter 2008 results on a webcast scheduled to begin at 9:30 AM (ET) on August 5, 2008. This webcast may be accessed through Tenet website at www.tenethealth.com. A set of slides which may be referred to during management’s remarks will be posted to the Company’s website at approximately 7:30 AM (ET).

Tenet Healthcare Corporation, through its subsidiaries, owns and operates acute care hospitals and related ancillary health care businesses, which include ambulatory surgery centers and diagnostic imaging centers. Tenet is committed to providing high quality care to patients in the communities we serve. Tenet can be found on the World Wide Web at www.tenethealth.com.

Some of the statements in this release may constitute forward-looking statements. Such forward-looking statements are based on our current expectations and could be affected by numerous factors and are subject to various risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended Dec. 31, 2007, our quarterly reports on Form 10-Q, and periodic reports on Form 8-K. Do not rely on any forward-looking statement, as we cannot predict or control many of the factors that ultimately may affect our ability to achieve the results estimated. We make no promise to update any forward-looking statement, whether as a result of changes in underlying factors, new information, future events or otherwise.

  TENET HEALTHCARE CORPORATION CONSOLIDATED OPERATIONS DATA (Unaudited)  (Dollars in millions except per share amounts)                Three Months Ended June 30, ------------------------------------------ 2008       %      2007       %    Change --------- ------- --------- ------- ------  Net operating revenues      $  2,184  100.0%  $  2,054  100.0%    6.3% Operating expenses: Salaries, wages and benefits                    (967) (44.3%)     (913) (44.4%)   5.9% Supplies                     (392) (17.9%)     (359) (17.5%)   9.2% Provision for doubtful accounts                    (154)  (7.1%)     (142)  (6.9%)   8.5% Other operating expenses, net               (508) (23.3%)     (484) (23.6%)   5.0% Depreciation                  (85)  (3.9%)      (77)  (3.7%)  10.4% Amortization                  (10)  (0.4%)       (8)  (0.4%)  25.0% Impairment of long-lived assets and goodwill, and restructuring charges                       (2)  (0.1%)       (8)  (0.4%) Litigation and investigation (costs) benefit                       (3)  (0.1%)        1     --% --------- ------- --------- ------- Operating income                  63    2.9%        64    3.1% Interest expense                (102)             (105) Investment earnings                4                15 Minority interests                --                (1) ---------         --------- Loss from continuing operations, before income taxes                           (35)              (27) Income tax benefit                16                 3 ---------         --------- Loss from continuing operations, before discontinued operations         (19)              (24) Discontinued operations: Income (loss) from operations                     6                (4) Impairment of long-lived assets and goodwill, and restructuring charges                       (7)               (3) Net gain on sales of facilities                     8                 2 Income tax expense             (3)               (1) ---------         --------- Income (loss) from discontinued operations, net of tax                        4                (6) ---------         --------- Net loss                    $    (15)         $    (30) =========         ========= Earnings (loss) per share Basic and diluted: Continuing operations $  (0.04)         $  (0.05) Discontinued operations               0.01             (0.01) ---------         --------- $  (0.03)         $  (0.06) =========         ========= Weighted average shares and dilutive securities outstanding (in thousands):                 476,308           473,212 

  TENET HEALTHCARE CORPORATION CONSOLIDATED OPERATIONS DATA (Unaudited)  (Dollars in millions except per share amounts)                 Six Months Ended June 30, ------------------------------------------ 2008       %      2007       %    Change --------- ------- --------- ------- ------  Net operating revenues      $  4,419  100.0%  $  4,155  100.0%    6.4% Operating expenses: Salaries, wages and benefits                  (1,947) (44.1%)   (1,853) (44.6%)   5.1% Supplies                     (780) (17.7%)     (726) (17.5%)   7.4% Provision for doubtful accounts                    (302)  (6.8%)     (276)  (6.6%)   9.4% Other operating expenses, net             (1,005) (22.7%)     (959) (23.1%)   4.8% Depreciation                 (168)  (3.8%)     (154)  (3.7%)   9.1% Amortization                  (19)  (0.4%)      (16)  (0.4%)  18.8% Impairment of long-lived assets and goodwill, and restructuring charges                       (3)  (0.1%)      (11)  (0.2%) Litigation and investigation (costs) benefit                      (50)  (1.1%)        2     -- --------- ------- --------- ------- Operating income                 145    3.3%       162    3.9% Interest expense                (206)             (210) Investment earnings                9                26 Minority interests                (1)               (3) ---------         --------- Loss from continuing operations, before income taxes                           (53)              (25) Income tax benefit                14                94 ---------         --------- Income (loss) from continuing operations, before discontinued operations                      (39)               69 Discontinued operations: Income (loss) from operations                     6               (26) Impairment of long-lived assets and goodwill, and restructuring charges                      (17)              (12) Net gain on sales of facilities                     8                 1 Income tax (expense) benefit                       (4)               13 ---------         --------- Loss from discontinued operations, net of tax           (7)              (24) ---------         --------- Net income (loss)           $    (46)         $     45 =========         ========= Earnings (loss) per share Basic and diluted: Continuing operations $  (0.09)         $   0.14 Discontinued operations              (0.01)            (0.05) ---------         --------- $  (0.10)         $   0.09 =========         ========= Weighted average shares and dilutive securities outstanding (in thousands):                 475,687           474,514 

  TENET HEALTHCARE CORPORATION BALANCE SHEET DATA (Unaudited)  June 30, December 31, (Dollars in millions)                              2008       2007 -------- ------------ ASSETS Current assets: Cash and cash equivalents                     $   352  $       572 Investments in marketable debt securities           8           20 Accounts receivable, less allowance for doubtful accounts                              1,450        1,385 Inventories of supplies, at cost                  170          183 Income tax receivable                              29            7 Deferred income taxes                             118           87 Assets held for sale                              385           51 Other current assets                              266          255 -------- ------------ Total current assets                         2,778        2,560 Investments and other assets                         271          288 Property and equipment, at cost, less accumulated depreciation and amortization         4,274        4,645 Goodwill                                             610          607 Other intangible assets, at cost, less accumulated amortization                            310          293 -------- ------------ Total assets                                     $ 8,243  $     8,393 ======== ============  LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt             $     2  $         1 Accounts payable                                  643          780 Accrued compensation and benefits                 338          393 Professional and general liability reserves       150          161 Accrued interest payable                          125          126 Accrued legal settlement costs                    167          119 Other current liabilities                         548          468 -------- ------------ Total current liabilities                    1,973        2,048 Long-term debt, net of current portion             4,775        4,771 Professional and general liability reserves          547          555 Accrued legal settlement costs                       118          163 Other long-term liabilities and minority interests                                           654          683 Deferred income taxes                                147          119 -------- ------------ Total liabilities                            8,214        8,339 Commitments and contingencies Shareholders' equity: Common stock                                       26           26 Additional paid-in capital                      4,431        4,412 Accumulated other comprehensive loss              (26)         (28) Accumulated deficit                            (2,923)      (2,877) Less common stock in treasury, at cost         (1,479)      (1,479) -------- ------------ Total shareholders' equity                      29           54 -------- ------------ Total liabilities and shareholders' equity       $ 8,243  $     8,393 ======== ============ 

  TENET HEALTHCARE CORPORATION CASH FLOW DATA (Unaudited)  Six Months Ended (Dollars in millions)                                     June 30, ---------------- 2008    2007 -------- ------- Net income (loss)                                     $   (46) $   45 Adjustments to reconcile net income (loss) to net cash from operating activities: Depreciation and amortization                          187     170 Provision for doubtful accounts                        302     276 Deferred income tax expense                             16       1 Stock-based compensation expense                        20      21 Impairment of long-lived assets and goodwill, and restructuring charges                                   3      11 Litigation and investigation costs (benefit)            50      (2) Pre-tax loss from discontinued operations                3      37 Other items, net                                        (3)    (12) Changes in cash from changes in operating assets and liabilities: Accounts receivable                                   (360)   (299) Inventories and other current assets                    15       5 Income taxes                                           (29)     60 Accounts payable, accrued expenses and other current liabilities                                   (89)   (200) Other long-term liabilities                            (25)     15 Payments against reserves for restructuring charges and litigation costs and settlements                     (56)    (28) Net cash provided by operating activities from discontinued operations, excluding income taxes            2      31 -------- ------- Net cash provided by (used in) operating activities                                         (10)    131 Cash flows from investing activities: Purchases of property and equipment: Continuing operations                              (233)   (217) Discontinued operations                             (10)    (18) Construction of new and replacement hospitals          (56)    (27) Purchase of business                                    (3)    (36) Proceeds from sales of facilities and other assets - discontinued operations                              83      53 Proceeds from sales of marketable securities, long-term investments and other assets                 14     442 Purchases of marketable securities                      (8)   (434) Other items, net                                         2      (4) -------- ------- Net cash used in investing activities              (211)   (241) Cash flows from financing activities: Repayments of borrowings                                (1)     -- Other items, net                                         2       1 -------- ------- Net cash provided by financing activities             1       1 -------- ------- Net decrease in cash and cash equivalents                (220)   (109) Cash and cash equivalents at beginning of period          572     784 -------- ------- Cash and cash equivalents at end of period            $   352  $  675 ======== ======= Supplemental disclosures: Interest paid, net of capitalized interest      $  (195) $ (191) Income tax (payments) refunds, net              $    (3) $  168 

  TENET HEALTHCARE CORPORATION SELECTED STATISTICS - CONTINUING SAME HOSPITALS (Unaudited)   (Dollars in millions except per patient day, per admission and per visit amounts)                      Three Months Ended June 30, ------------------------------ 2008        2007     Change ----------- ----------- ------  Net inpatient revenues              $    1,435  $    1,375   4.4% Net outpatient revenues             $      666  $      611   9.0%  Number of general hospitals (at end of period)                                 50          50    --  (a) Licensed beds (at end of period)        13,713      13,736  (0.2%) Average licensed beds                   13,715      13,746  (0.2%) Utilization of licensed beds              52.7%       51.9%  0.8% (a) Patient days                           657,451     649,207   1.3% Adjusted patient days                  949,829     930,147   2.1% Net inpatient revenue per patient day                                $    2,183  $    2,118   3.1% Admissions                             133,448     130,928   1.9% Adjusted patient admissions            194,104     188,775   2.8% Net inpatient revenue per admission $   10,753  $   10,502   2.4% Average length of stay (days)              4.9         5.0  (0.1%)(a) Surgeries                               93,653      91,514   2.3% Net outpatient revenue per visit    $      694  $      635   9.3% Outpatient visits                      959,839     962,420  (0.3%)  Sources of net patient revenue Medicare                               24.8%       25.0% (0.2%)(a) Medicaid                                8.2%        9.3% (1.1%)(a) Managed care governmental              13.2%       11.3%  1.9% (a) Managed care commercial                42.2%       41.5%  0.7% (a) Indemnity, self-pay and other          11.6%       12.9% (1.3%)(a)  (Dollars in millions except per patient day, per admission and per visit amounts)                       Six Months Ended June 30, ------------------------------ 2008        2007     Change ----------- ----------- ------  Net inpatient revenues              $    2,949  $    2,801   5.3% Net outpatient revenues             $    1,309  $    1,209   8.3%  Number of general hospitals (at end of period)                                 50          50    --  (a) Licensed beds (at end of period)        13,713      13,736  (0.2%) Average licensed beds                   13,725      13,742  (0.1%) Utilization of licensed beds              54.7%       54.3%  0.4% (a) Patient days                         1,366,298   1,349,698   1.2% Adjusted patient days                1,947,225   1,908,454   2.0% Net inpatient revenue per patient day                                $    2,158  $    2,075   4.0% Admissions                             273,703     270,001   1.4% Adjusted patient admissions            392,589     384,030   2.2% Net inpatient revenue per admission $   10,774  $   10,374   3.9% Average length of stay (days)              5.0         5.0    --  (a) Surgeries                              183,925     183,299   0.3% Net outpatient revenue per visit    $      678  $      622   9.0% Outpatient visits                    1,931,709   1,943,714  (0.6%)  Sources of net patient revenue Medicare                               25.4%       26.2% (0.8%)(a) Medicaid                                8.3%        8.2%  0.1% (a) Managed care governmental              13.4%       12.0%  1.4% (a) Managed care commercial                41.3%       41.4% (0.1%)(a) Indemnity, self-pay and other          11.6%       12.2% (0.6%)(a)   (a) This change is the difference between the 2008 and 2007 amounts shown 

  TENET HEALTHCARE CORPORATION SELECTED STATISTICS - CONTINUING TOTAL HOSPITALS (Unaudited)   (Dollars in millions except per patient day, per admission and per visit amounts)                      Three Months Ended June 30, ------------------------------ 2008        2007     Change ----------- ----------- ------  Net inpatient revenues              $    1,439  $    1,375   4.7% Net outpatient revenues             $      670  $      611   9.7%  Number of general hospitals (at end of period)                                 52          51     1  (a) Licensed beds (at end of period)        13,864      13,777   0.6% Average licensed beds                   13,829      13,760   0.5% Utilization of licensed beds              52.4%       51.8%  0.6% (a) Patient days                           659,534     649,207   1.6% Adjusted patient days                  955,538     930,147   2.7% Net inpatient revenue per patient day                                $    2,182  $    2,118   3.0% Admissions                             133,983     130,928   2.3% Adjusted patient admissions            195,522     188,775   3.6% Net inpatient revenue per admission $   10,740  $   10,502   2.3% Average length of stay (days)              4.9         5.0  (0.1) (a) Surgeries                               93,970      91,514   2.7% Net outpatient revenue per visit    $      689  $      635   8.5% Outpatient visits                      972,261     962,420   1.0%  Sources of net patient revenue Medicare                               24.8%       25.0% (0.2%)(a) Medicaid                                8.2%        9.3% (1.1%)(a) Managed care governmental              13.2%       11.3%  1.9% (a) Managed care commercial                42.1%       41.5%  0.6% (a) Indemnity, self-pay and other          11.7%       12.9% (1.2%)(a)  (Dollars in millions except per patient day, per admission and per visit amounts)                       Six Months Ended June 30, ------------------------------ 2008        2007     Change ----------- ----------- ------  Net inpatient revenues              $    2,955  $    2,801   5.5% Net outpatient revenues             $    1,316  $    1,209   8.9%  Number of general hospitals (at end of period)                                 52          51     1  (a) Licensed beds (at end of period)        13,864      13,777   0.6% Average licensed beds                   13,803      13,749   0.4% Utilization of licensed beds              54.5%       54.2%  0.3% (a) Patient days                         1,369,843   1,349,698   1.5% Adjusted patient days                1,957,182   1,908,454   2.6% Net inpatient revenue per patient day                                $    2,157  $    2,075   4.0% Admissions                             274,580     270,001   1.7% Adjusted patient admissions            395,000     384,030   2.9% Net inpatient revenue per admission $   10,762  $   10,374   3.7% Average length of stay (days)              5.0         5.0    --  (a) Surgeries                              184,483     183,299   0.6% Net outpatient revenue per visit    $      674  $      622   8.4% Outpatient visits                    1,953,945   1,943,714   0.5%  Sources of net patient revenue Medicare                               25.4%       26.2% (0.8%)(a) Medicaid                                8.3%        8.2%  0.1% (a) Managed care governmental              13.3%       12.0%  1.3% (a) Managed care commercial                41.3%       41.4% (0.1%)(a) Indemnity, self-pay and other          11.7%       12.2% (0.5%)(a)   (a) This change is the difference between the 2008 and 2007 amounts shown 

  TENET HEALTHCARE CORPORATION CONSOLIDATED OPERATIONS DATA Calendar Year 2008 by Quarter (Unaudited)  (Dollars in millions except per                             Six Months share amounts)                      Three Months Ended       Ended ------------------- 3/31/08   6/30/08      6/30/08 --------- ---------    ----------  Net operating revenues               $  2,235  $  2,184     $   4,419 Operating expenses: Salaries, wages and benefits          (980)     (967)       (1,947) Supplies                              (388)     (392)         (780) Provision for doubtful accounts       (148)     (154)         (302) Other operating expenses, net         (497)     (508)       (1,005) Depreciation                           (83)      (85)         (168) Amortization                            (9)      (10)          (19) Impairment of long-lived assets and goodwill, and restructuring charges                                (1)       (2)           (3) Litigation and investigation (costs) benefit                       (47)       (3)          (50) --------- ---------    ---------- Operating income                           82        63           145 Interest expense                         (104)     (102)         (206) Investment earnings                         5         4             9 Minority interests                         (1)       --            (1) --------- ---------    ---------- Loss from continuing operations, before income taxes                      (18)      (35)          (53) Income tax (expense) benefit               (2)       16            14 --------- ---------    ---------- Loss from continuing operations, before discontinued operations           (20)      (19)          (39) Discontinued operations: Income from operations                  --         6             6 Impairment of long-lived assets and goodwill, and restructuring charges                               (10)       (7)          (17) Net gain on sales of facilities         --         8             8 Income tax expense                      (1)       (3)           (4) --------- ---------    ---------- Income (loss) from discontinued operations, net of tax                   (11)        4            (7) --------- ---------    ---------- Net loss                             $    (31) $    (15)    $     (46) ========= =========    ========== Earnings (loss) per share Basic and diluted: Continuing operations          $  (0.04) $  (0.04)    $   (0.09) Discontinued operations           (0.02)     0.01         (0.01) --------- ---------    ---------- $  (0.06) $  (0.03)    $   (0.10) ========= =========    ========== Weighted average shares and dilutive securities outstanding (in thousands):                          475,066   476,308       475,687 

 TENET HEALTHCARE CORPORATION SELECTED STATISTICS - CONTINUING SAME HOSPITALS Calendar Year 2008 by Quarter (Unaudited)  (Dollars in millions except per patient day, per admission and per                        Six Months visit amounts)                     Three Months Ended        Ended ------------------- 3/31/08   6/30/08       6/30/08 --------- ---------    -----------  Net inpatient revenues              $  1,514  $  1,435     $    2,949 Net outpatient revenues             $    643  $    666     $    1,309  Number of general hospitals (at end of period)                               50        50             50 Licensed beds (at end of period)      13,716    13,713         13,713 Average licensed beds                 13,735    13,715         13,725 Utilization of licensed beds            56.7%     52.7%          54.7% Patient days                         708,847   657,451      1,366,298 Adjusted patient days                997,396   949,829      1,947,225 Net inpatient revenue per patient day                                $  2,136  $  2,183     $    2,158 Admissions                           140,255   133,448        273,703 Adjusted patient admissions          198,485   194,104        392,589 Net inpatient revenue per admission $ 10,795  $ 10,753     $   10,774 Average length of stay (days)            5.1       4.9            5.0 Surgeries                             90,272    93,653        183,925 Net outpatient revenue per visit    $    662  $    694     $      678 Outpatient visits                    971,870   959,839      1,931,709  Sources of net patient revenue Medicare                             26.0%     24.8%          25.4% Medicaid                              8.3%      8.2%           8.3% Managed care governmental            13.5%     13.2%          13.4% Managed care commercial              40.5%     42.2%          41.3% Indemnity, self-pay and other        11.7%     11.6%          11.6% 

  TENET HEALTHCARE CORPORATION CONSOLIDATED OPERATIONS DATA Calendar Year 2007 by Quarter (Unaudited)  (Dollars in millions except per share amounts)           Three Months Ended            Year Ended --------------------------------------- 3/31/07   6/30/07   9/30/07  12/31/07   12/31/07 --------- --------- --------- --------- ----------  Net operating revenues           $  2,101  $  2,054  $  2,093  $  2,127   $  8,375 Operating expenses: Salaries, wages and benefits        (940)     (913)     (930)     (971)    (3,754) Supplies             (367)     (359)     (356)     (375)    (1,457) Provision for doubtful accounts            (134)     (142)     (158)     (133)      (567) Other operating expenses, net       (475)     (484)     (483)     (492)    (1,934) Depreciation          (77)      (77)      (78)      (80)      (312) Amortization           (8)       (8)       (7)       (8)       (31) Impairment of long-lived assets and goodwill, and restructuring charges               (3)       (8)      (13)      (35)       (59) Hurricane insurance recoveries, net of costs              --        --        --         3          3 Litigation and investigation (costs) benefit        1         1        (3)      (12)       (13) --------- --------- --------- --------- ---------- Operating income          98        64        65        24        251 Interest expense        (105)     (105)     (105)     (104)      (419) Investment earnings       11        15        10        11         47 Minority interests        (2)       (1)       (1)       --         (4) --------- --------- --------- --------- ---------- Income (loss) from continuing operations, before income taxes              2       (27)      (31)      (69)      (125) Income tax (expense) benefit        91         3       (10)      (20)        64 --------- --------- --------- --------- ---------- Income (loss) from continuing operations, before discontinued operations               93       (24)      (41)      (89)       (61) Discontinued operations: Income (loss) from operations      (22)       (4)       (5)       28         (3) Impairment of long-lived assets and goodwill, and restructuring charges               (9)       (3)       (6)      (13)       (31) Net gain (loss) on sales of facilities            (1)        2        (5)       (4)        (8) Income tax (expense) benefit               14        (1)       (2)        3         14 --------- --------- --------- --------- ---------- Income (loss) from discontinued operations, net of tax                     (18)       (6)      (18)       14        (28) --------- --------- --------- --------- ---------- Net income (loss)   $     75  $    (30) $    (59) $    (75)  $    (89) ========= ========= ========= ========= ========== Earnings (loss) per share Basic and diluted: Continuing operations   $   0.20  $  (0.05) $  (0.08) $  (0.19)  $  (0.13) Discontinued operations      (0.04)    (0.01)    (0.04)     0.03      (0.06) --------- --------- --------- --------- ---------- $   0.16  $  (0.06) $  (0.12) $  (0.16)  $  (0.19) ========= ========= ========= ========= ========== Weighted average shares and dilutive securities outstanding (in thousands):         474,326   473,212   473,984   474,286    473,405 

  TENET HEALTHCARE CORPORATION SELECTED STATISTICS - CONTINUING SAME HOSPITALS Calendar Year 2007 by Quarter (Unaudited)  (Dollars in millions except per patient day, per admission and per visit amounts)                    Three Months Ended            Year Ended --------------------------------------- 3/31/07   6/30/07   9/30/07  12/31/07   12/31/07 --------- --------- --------- --------- -----------  Net inpatient revenues          $  1,426  $  1,375  $  1,395  $  1,427  $    5,623 Net outpatient revenues          $    598  $    611  $    617  $    619  $    2,445  Number of general hospitals (at end of period)              50        50        50        50          50 Licensed beds (at end of period)      13,743    13,736    13,743    13,773      13,773 Average licensed beds                13,736    13,746    13,743    13,773      13,750 Utilization of licensed beds         56.7%     51.9%     50.9%     51.8%       52.8% Patient days        700,491   649,207   643,501   655,790   2,648,989 Adjusted patient days               978,307   930,147   922,970   934,607   3,766,031 Net inpatient revenue per patient day       $  2,036  $  2,118  $  2,168  $  2,176  $    2,123 Admissions          139,073   130,928   130,909   134,088     534,998 Adjusted patient admissions         195,255   188,775   189,094   192,463     765,587 Net inpatient revenue per admission         $ 10,254  $ 10,502  $ 10,656  $ 10,642  $   10,510 Average length of stay (days)            5.0       5.0       4.9       4.9         5.0 Surgeries            91,785    91,514    92,489    91,567     367,355 Net outpatient revenue per visit $    609  $    635  $    650  $    652  $      636 Outpatient visits   981,294   962,420   949,485   948,865   3,842,064  Sources of net patient revenue Medicare            27.3%     25.0%     25.1%     25.4%       25.7% Medicaid             7.1%      9.3%      9.3%      8.7%        8.6% Managed care governmental       12.7%     11.3%     11.5%     12.9%       12.1% Managed care commercial         41.3%     41.5%     41.8%     41.3%       41.5% Indemnity, self-pay and other              11.6%     12.9%     12.3%     11.7%       12.1% 

  TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP Disclosures  (1) Reconciliation of Adjusted EBITDA  Adjusted EBITDA, a non-GAAP term, is defined by the Company as net income (loss) before (1) cumulative effect of change in accounting principle, net of tax, (2) income (loss) from discontinued operations, net of tax, (3) income (loss) from leased hospitals whose leases will not be renewed, (4) income tax (expense) benefit, (5) net gains (losses) on sales of investments (6) minority interests, (7) investment earnings, (8) interest expense, (9) litigation and investigation (costs) benefit, (10) hurricane insurance recoveries, net of costs, (11) impairment of long-lived assets and goodwill and restructuring charges, (12) amortization, and (13) depreciation. 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. 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). 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), the most comparable GAAP term, to Adjusted EBITDA, is set forth in the first table below for the three and six months ended June 30, 2008 and 2007.  (2) Adjusted Free Cash Flow  Adjusted Free Cash Flow, a non-GAAP term, is defined by the Company as cash flows provided by (used in) operating activities less capital expenditures in continuing operations; new and replacement hospital construction expenditures; income tax refunds (payments), net; net cash provided by operating activities from discontinued operations; adjusted free cash flow from leased hospitals whose leases will not be renewed; and payments against reserves for restructuring charges and litigation costs and settlements. The Company believes the use of Adjusted Free Cash Flow is meaningful, as the use of this financial measure provides the Company and the users of its financial statements with supplemental information about the impact on the Company's cash flows from the items specified above. 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 cash flows, some of which are recurring. The Company uses this information in its analysis of its cash flows excluding items that it does not consider relevant to the liquidity of its hospitals in continuing operations going forward. Adjusted Free Cash Flow is a measure of liquidity that management uses in its business as an alternative to net cash provided by (used in) operating activities. Because Adjusted Free Cash Flow excludes many items that are included in our financial statements, it does not provide a complete measure of our liquidity. Accordingly, investors are encouraged to use GAAP measures when evaluating the Company's financial performance or liquidity. The reconciliation of net cash provided by (used in) operating activities, the most comparable GAAP term, to Adjusted Free Cash Flow is set forth in the second table below for the three and six months ended June 30, 2008 and 2007. 

  TENET HEALTHCARE CORPORATION Additional Supplemental Non-GAAP Disclosures Table #1 - Reconciliation of Adjusted EBITDA (Unaudited)  (Dollars in millions)                   Three Months     Six Months Ended           Ended June 30,        June 30, --------------- --------------- 2008    2007    2008    2007 ------- ------- ------- ------- Net income (loss)                      $  (15) $  (30) $  (46) $   45 Less: Income (loss) from discontinued operations, net of tax               4      (6)     (7)    (24) ------- ------- ------- ------- Income (loss) from continuing operations                         (19)    (24)    (39)     69 Income tax benefit                   16       3      14      94 Minority interests                   --      (1)     (1)     (3) Investment earnings                   4      15       9      26 Interest expense                   (102)   (105)   (206)   (210) ------- ------- ------- ------- Operating income                     63      64     145     162 Litigation and investigation (costs) benefit                     (3)      1     (50)      2 Impairment of long-lived assets and goodwill and restructuring charges                             (2)     (8)     (3)    (11) Amortization                        (10)     (8)    (19)    (16) Depreciation                        (85)    (77)   (168)   (154) ------- ------- ------- ------- Adjusted EBITDA - continuing operations                               163     156     385     341 Less: Income from hospitals whose leases will not be renewed                --      --       6       4 ------- ------- ------- ------- Adjusted EBITDA                        $  163  $  156  $  379  $  337 ======= ======= ======= =======  Net operating revenues                 $2,184  $2,054  $4,419  $4,155 Less: Net operating revenues from hospitals whose leases will not be renewed                                   51      52     109     105 ------- ------- ------- ------- Adjusted net operating revenues        $2,133  $2,002  $4,310  $4,050 ======= ======= ======= =======  Adjusted EBITDA as % of adjuste



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