Trevor Fetter Q108 Conference Call Script

May 6, 2008

Thank you, operator, and good morning. Let me start by saying that I’m pleased with our results

for the first quarter. Tenet is performing more consistently than at any point in the recent past,

and it is becoming increasingly clear that the strategies we have in place are proving to be

effective.

• We’ve now had two consecutive quarters of breakeven to slightly positive same-hospital

admissions growth, which is a great improvement over the consistent declines we saw from

2004 through most of 2007. Our same-hospital admissions were up of 1.0 percent for the

first quarter, with flu contributing only 20 basis points.

• While we still have more work to do, this is the first quarter in a long time in which I would

say we’re pleased with our EBITDA performance. Same hospital adjusted EBITDA was up

23 percent to $239 million. And even though it’s still well below our industry peer

companies, our EBITDA margin rose 120 basis points year-over-year, to 9.9 percent,

continuing an upward trend of several quarters.

Thanks to our efforts across multiple initiatives, we now have a steady flow of physicians joining

our medical staffs. Going forward, we expect they will increase the number of patients they refer

to our hospitals.

• Additionally, we are getting attractive pricing increases from large commercial managed care

customers. I believe this is a result of our multi-year efforts to raise our standards for clinical

quality, improve the reputations of our hospitals and Tenet as a company, and employ better-

informed contracting strategies.

• The strong cost discipline we’ve demonstrated in the past few years continued in the first

quarter. One of the good things about our business is the operating leverage that you can

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generate through modest increases in volume when combined with good cost control. This

operating leverage helped us deliver good performance in the unit cost metrics that we

reported this morning.

• And though we saw a modest increase in bad debt expense, even here we made real progress.

The rate of growth in uninsured admissions slowed to 5.4 percent from the more challenging

7 percent to 10 percent growth rates we reported last year. Total uninsured and charity

admissions actually declined by 1.2 percent in the quarter.

Those of you who follow the large managed care companies are well aware that enrollment

trends across the managed care industry are flat. That trend, along with enrollment declines in

the rental networks, explains about one-third of the declines in commercial managed care

volumes that we experienced in the quarter. Also, over half of the loss in commercial volumes

comes from just three hospitals.

Steve Newman has some very interesting insights into commercial volume growth coming out of

our Targeted Growth Initiative which he will share with you in a few minutes.

EBITDA grew more than 20 percent in the quarter versus Q107. This stronger than anticipated

performance was driven by pricing and cost control. We expect continued good performance on

commercial pricing and costs. So, if we can close the remaining gap on volumes, particularly the

mix of volumes, we are well-positioned to meet our earnings objectives for the year. Looking to

our 2009 objective, we need to build upon our rate of volume growth and maintain the pricing

and cost discipline I just spoke about.

I’m pleased to report that our volume growth was strong in April, with same-hospital admissions

up by 3.7 percent and outpatient visits up by 2.8 percent. Because there was a lot of noise in Q1

this year due to leap year and Easter, we thought you’d find some year-to-date same-hospital

statistics to be useful. For the first four months, same-hospital inpatient admissions are up 1.6

percent, commercial is down 2.6 percent, charity and uninsured are up 1.3 percent and outpatient

visits are down 0.1 percent.

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I want to close by commenting on two other items:

• Earlier this month, we announced that we had signed a non-binding letter of intent to sell

USC University Hospital and USC Norris Cancer Hospital to the University of Southern

California.

If this goes through, it will settle all litigation between the parties. Though we would have

preferred to retain these hospitals, the continuation of the litigation was beginning, in my

opinion, to do irreparable harm. We disclosed in the 10-Q certain financial information

about the hospitals and the sale transaction, but the key take-away is that the sale price will

be equal to net book value at closing.

As a point of reference, the net book value was $311 million at March 31, 2008. Last year

the hospitals generated EBITDA, excluding corporate overhead and non-recurring items, of

approximately $25 million. A normal level of capital expenditures is at least $10 million per

year.

• Finally, let me remind everyone that we have our annual Investor Day scheduled for four

weeks from today in Dallas. It will be available via live webcast. This full day of

presentations will give us the opportunity to discuss, in detail, our operating strategies,

progress, and growth initiatives.

With that, let me turn the floor over to Tenet’s chief operating officer, Dr. Steve Newman, to

provide further detail on our activities during the quarter.

Steve…

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Stephen Newman, M.D. Q108 Conference Call Script

May 6, 2008

Thank you, Trevor, and good morning everyone.

Let me start by reviewing our progress on medical staff development and relationship building.

Physician relations represents an appropriate starting point, because it is the cornerstone of our

business, and physicians are incredibly influential in determining our market share and growth.

We continue to place significant effort into our Physician Relationship Program, or PRP.

Through the PRP initiative we made 13,158 calls on 6,764 physicians in the first quarter. The

PRP targeted physicians with existing active staff privileges increased their admissions to our

facilities by 5.7 percent in the first quarter of 2008 compared to their admissions in Q107. This

is our best quarterly performance since we launched the PRP program in late 2005.

We also called on 497 unaffiliated physicians in the first quarter. This group of almost 500

physicians represents practitioners currently lacking admitting privileges at any of our hospitals.

This effort is aimed at redirecting physicians already in our service areas. This creates a virtual

pipeline for future expansion of our medical staffs. Many of the calls made in prior time periods

resulted in new physicians joining our staffs and contributed to the admissions we achieved in

the first quarter. We added 178 active medical staff in the first quarter net of attrition. When

added to the previously reported 2007 expansion of our active medical staff, this aggregates to a

10.3 percent growth of our hospitals’ medical staffs since the beginning of 2007.

I want to highlight some of the enhancements we are making in the PRP program. We are

extending the numbers of staff in our hospitals joining the PRP teams and educating them

through our expanded training curriculum. We are also launching a customized education

program for our hospital-based physician recruiters.

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Our overall admissions grew 1.0 percent in the quarter compared to admissions in the first

quarter of 2007. While we had a decline in aggregate commercial managed care admissions, the

aggregate number of negative 3.7 percent doesn’t tell the whole story. You will recall that two

years ago we began implementing our Targeted Growth Initiative, or TGI. Take a look at the

data on slide 15.

As you’re turning to slide 15, I need to make an important point about TGI. While we’re

showing you how we’re doing in attracting commercial patients to our hospitals in the targeted

service lines, a number of service lines which are heavily skewed towards commercial patients

were de-emphasized by TGI. These de-emphasized service lines often include neonatology,

obstetrics and selected outpatient services.

At the same time, TGI often emphasizes services that apply principally to the senior population.

For example, our resurgence in Florida, which made a key contribution to our profitability in the

quarter, was heavily Medicare-driven.

The point to keep in mind is that Targeted Growth means exactly that. We are targeting the

service lines with the greatest potential for growth in volumes and profitability. And, as slide 15

shows, for commercial managed care, the targeted service lines performed better than the

aggregate commercial volumes.

Let’s look at the eight service lines most commonly targeted for growth in our hospitals. Seven

of the eight service lines showed significant growth in comparison to volume in Q107. The

range is from up 0.4 percent to up 9.5 percent. The one service line that was down out of the

eight, as we’ve mentioned on other quarterly calls, was cardiovascular services, also known as

Cath/EP, which was down 12.9 percent. The emergence of local competitors has caused us to

lose market share in these services, but we have implemented plans to stabilize and subsequently

recapture market share in this service line.

Moving our perspective from targeted service lines to individual hospitals, commercial volume

declines were very concentrated with more than half the decline of 1,520 commercial admissions

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occurring in just three hospitals. Each of these hospitals was confronting unique local issues.

These issues are being methodically addressed, and we believe a number of them can be reversed

within a reasonably short time frame. In fact, in April we saw commercial admissions return to

flat in these three hospitals.

I would be remiss if I failed to spend just a few minutes highlighting the remarkable progress we

continue to achieve in Florida. Our 10 Florida hospitals had aggregate admission growth of 1.1

percent in Q108 over Q107. This is the best performance turned in by our Florida operations

since Q104. We have continued to succeed in reducing out migration from our network in

neonatology, cancer care and advanced cardiac services. We are regionalizing certain services

like advanced neuorointerventional activities at Delray Medical Center while several of our other

Florida centers are obtaining Primary Stroke Center designations and will act as referral sources

to Delray for the most advanced care. I should also note that commercial managed care open

heart procedures in Florida increased 14 cases or 17.7 percent compared to the first quarter of

2007. This is our first market share gain in Florida commercial open heart procedures since

2005.

Finally, I want to offer some additional color on April volumes. We were very pleased to see

April admissions growth of 3.7 percent over April 2007. Even if we normalize for the extra

weekday in April 2008 versus April 2007, this would have to be characterized as a very strong

performance. Importantly, all five of our regions achieved volume growth in April in a broad-

based resurgence over a softer March. And, importantly, commercial admissions grew by a very

encouraging 0.9 percent.

Let’s spend a few minutes looking at our outpatient business. We were particularly disappointed

with the decline of 1.1 percent in outpatient visits and a 2.1 percent decline from commercial

payers in the face of an extra day for Leap Year. The majority of losses was in imaging and

referred laboratory studies. While overall outpatient surgeries were down 1.7 percent, I am

pleased to report the volume of outpatient surgery in our freestanding centers increased 11.7

percent in the first quarter.

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With the moderation of outpatient losses over the last six quarters, we are becoming more

aggressive in implementing initiatives to recapture market share. To do so, we have expanded

the staff in our outpatient services group and continue to make selective and opportunistic

acquisitions in both ambulatory surgery centers and diagnostic imaging centers. This is a highly

competitive business, but we believe we can win the business with service excellence, quality

outcomes, operating efficiency and industry-leading throughput times which patients and

physicians increasingly demand. To this end, we are implementing centralized scheduling on a

number of campuses, giving physicians and their critically important office staffs, the ability to

do one-stop scheduling. We are also replicating techniques which are driving success in our

freestanding centers in our hospital-based outpatient surgery units.

Before leaving the outpatient discussion it is noteworthy that April outpatient volumes were up

2.8 percent compared to April 2007. Additionally this volume improvement was broad based

with 4 out of the 5 regions in the company showing gains for the month.

Turning to pricing, we achieved very solid improvements in the quarter. This is the tangible

result of the steady stream of new agreements successfully negotiated and announced since last

summer.

These enhancements include not only the normal inflationary resets, but also reflect significant

progress towards our objective of closing the pricing gap relative to competitors to achieve rate

parity. There are still isolated instances where we have yet to attain rate parity. While we have

negotiated the great majority of our contracts in the near-term, potential incremental gains

remain in the intermediate to long-term.

Our managed care team carefully monitors our commercial volume activity in each of our

markets. It has been interesting to observe that we have experienced good growth in commercial

volumes in many of the same markets where we have seen significant pricing gains. A

significant percentage of our pricing gains have simply closed the previously existing gap

between Tenet’s commercial rates and that of our key competitors. Since our rates have only

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just now caught up to our competitors, pricing has not been a deterrent to commercial volume

growth.

Last week we reached a memorandum of understanding with Independence Blue Cross for a new

multi-year contract which would give all of their subscribers in the Philadelphia area access to

our two hospitals, Hahnemann University Hospital and St Christopher’s Hospital for Children.

This new agreement will also cover our faculty practice physicians and all of our outpatient

facilities. We are also pleased that this new agreement includes provisions for our hospitals to

receive incremental payments for reaching mutually agreed upon quality goals. While the total

dollar amount of these potential quality payments is small relative to the size of the contract, this

formal recognition of quality differentials strengthens what we see as an important precedent in

the industry. Our strategy is to position ourselves for success in a pay for performance

environment.

We have also made substantial progress in improving the cost structure of our hospitals,

outpatient facilities and support services. Productivity, as measured by FTEs per adjusted

average daily census, improved 1.2 percent in the quarter compared to Q107. Same-hospital

contract labor expense per adjusted patient day was down 10.7 percent. Part of this was due to

an 18 percent reduction in registered nurse turnover in the quarter. Same-hospital supply costs

for the quarter were also well-controlled increasing by just 3.9 percent per adjusted patient day.

This is excellent supply cost containment in view of a 1.2 percent increase in orthopedic,

neurosurgical and general surgery procedures, which required the use of implantable devices.

While we made significant improvements in overall costs during the quarter we continue the roll

out new and improved tools for our managers to help them track productivity and improve

throughput and efficiency through process redesign. We are also expanding our efforts to

standardize many high cost implants.

In summary, our strategies to grow our admissions, our medical staffs, and to control our costs

are working. This, combined with improved pricing through managed care negotiation and TGI

focus, delivered significant bottom line improvement.

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With that let me turn the floor over to our chief financial officer Biggs Porter for his review.

Biggs…

Biggs Porter Q108 Conference Call Script

May 6, 2008 Thank you, Steve, and good morning everyone.

Trevor and Steve have already done a good summary, so I will focus more detail on some of the

financial elements in the quarter. Before I do, I will note that our first quarter adjusted EBITDA

of $234 million keeps us well on a path to achieve our outlook for $775 to $850 million in

adjusted EBITDA for the year.

On a same-hospital basis, adjusted EBITDA increased to $239 million, an increase of 23 percent.

It was a relatively straight forward quarter, but there are a few items I will mention:

1. Favorable cost report settlements, added $2 million pre-tax, down from the $12 million

recorded in the first quarter of 2007.

2. There was $8 million of bad debt mitigation resulting from the settlement of long overdue

disputed managed care accounts.

3. We recorded $6 million in funding from Georgia Medicaid, $4 million of which is

retroactive to last year, as the state reversed approximately $7 million of its funding cuts

we disclosed last year.

4. We recorded $6 million in distributions from an HMO in which we have an equity

interest.

5. We incurred impairment and restructuring charges of approximately $1 million, and

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6. We increased our provision for litigation related to California wage and hour and other

matters by $47 million.

The first four items I just mentioned are included in our adjusted EBITDA results, the last two

related to impairment and restructuring and litigation are not. It is, of course, a judgment call as

to which of these items might be non-recurring, not just for the quarter, but for the year. Of

those affecting adjusted EBITDA, the only item which I would rule out from repeating on an

annual basis is the $4 million retroactive portion of the Georgia Medicaid funding. I will talk

more about Medicaid funding in a minute.

Turning to volumes, the 1.0 percent admissions growth we achieved in the first quarter was

within the range used as the basis for our 2008 outlook.

A very strong January, and adequate to good admissions performance in February, was followed

by lower volume numbers in the month of March. Among other factors, there was no

meaningful contribution from flu admissions in March. In fact, flu added only 20 basis points to

our admissions growth for the entire quarter – and was essentially confined to the month of

February.

Assessing the underlying organic growth in admissions in the first quarter is complicated by both

Leap Year and an early Easter holiday. Although we looked at it, and I know others have tried to

measure the impact, we don’t think there is a single correct measure of the effects. Our only real

conclusion is that we were close to our outlook range for the year on admissions, but fell short in

outpatient visits and had a negative payer mix shift away from commercial managed care.

We are still early in the year, and we continue to believe we can achieve our outlook on

admissions of 1 to 2 percent growth, but believe at this point that outpatient visits will more

likely be in the range of 1 to 2 percent as well, rather than our original outlook of 2 to 3 percent.

We believe, however, that the softness in visits and commercial volumes have been and will be

more than offset by favorable pricing.

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Now on to revenues, first quarter consolidated net operating revenues rose to $2.4 billion, an

increase of 6.9 percent. Although helped by admissions growth, this 6.9 percent revenue

increase was principally due to strong pricing.

Slide 24 on the web shows that we experienced solid progress in all our key pricing metrics.

Same-hospital revenue per adjusted admission increased by 5.5 percent. The net effect of year-

over-year cost report adjustments and the unusual effects of the retroactive Georgia Medicaid

funding and first quarter HMO distribution, basically offset each other.

In addition to the positive effects of our managed care negotiations and other price enhancement

efforts, we averaged better than expected Medicare pricing in the first quarter.

Before leaving pricing, I want to insert a word of caution that we may experience some

moderation in pricing gains as we proceed through the year. There are four factors:

1. First quarter pricing was influenced by an increase in procedures requiring medical

devices. These higher priced procedures may not continue through the year at the same

level.

2. In the second and third quarter we anniversary earlier pricing enhancements from our

efforts to improve the accuracy of acuity capture in our emergency departments. We will

continue to make refinements as necessary to increase accuracy, although it is still early

to predict to what degree that might result in additional charges being captured.

3. We believe that as we proceed through the year we may experience payor shifts from

higher priced smaller plans to our larger more competitively priced large payers and have

additional shifts between payer categories.

4. Offsetting this there will be additional increases in managed care which are already

negotiated.

We also continue to monitor the status of Medicaid funding in California and Florida. Although

these states continue to face budgetary pressures and we cannot predict the outcome, at this time

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we do not believe the effects will be material to our 2008 or 2009 outlook. Based on our current

understanding, the effect on 2008 appears to be less than $10 million.

As you can see there are still a number of variables that will affect pricing for the remainder of

the year. For this reason we have left our pricing outlook range fairly conservative. Obviously,

we will continue to monitor this.

We do believe we have good visibility into our managed care contract pricing for the next two

years, because approximately 84 percent of our commercial rates for 2008 and 68 percent for

2009 are already covered in signed contracts. As the majority of these contracts include

escalators, favorable commercial pricing momentum can be expected to continue.

Turning to costs, the cost strategies we implemented in the second half of last year had a

dramatic and very visible impact on our cost metrics in the first quarter.

Same hospital total controllable operating expense per adjusted patient day increased by just 2.6

percent. This is a very good result and consistent with the walk-forward for 2008 earnings we

shared with you on our fourth quarter call in late February.

Leading this tight cost control picture was an extraordinarily low 2.0 percent increase in same

hospital salary, wages and benefits (SW&B) per adjusted patient day. This growth was below

what we granted in our average merit increases. The low growth in SW&B is, therefore, the

result of declining headcount further supported by the effective management of temporary labor

costs. Some of these savings came from improved employee retention.

Supply costs also were well-controlled with same-hospital growth of 3.9 percent per adjusted

patient day. The growth in prosthesis and implant procedures and costs continued to pressure

this line item, increasing by more than $10 million, or approximately 11 percent.

We also realized a further decline in malpractice expense which declined by $4 million, or

almost 9 percent. This reduction was net of the adverse $5 million impact resulting from lower

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interest rates which increased the discounted future liability estimates. Absent the impact of

interest rates we would have achieved a 19 percent reduction in malpractice expense.

Our costs were somewhat negatively affected by increase in length of stay in addition to higher

utilization of medical devices. There was some revenue offset for these, but it does affect cost

performance particularly if you look at it from a per admit standpoint.

On bad debt, as previously mentioned, growth in same-hospital uninsured admissions moderated

in the quarter showing an increase of just 5.4 percent, and uninsured visits declined by 3.8

percent. This growth was well below the 10 percent increase in uninsured admissions

experienced in the fourth quarter. Revenues from the uninsured rose by $18 million, or 12.2

percent on a same hospital basis. This increase in uninsured revenue has been driven by

increases in our chargemaster as well as efforts to improve the accuracy of acuity capture in our

emergency departments.

These changes in uninsured charges create a parallel effect on bad debt expense. For the last

three quarters, our refined ED charge capture initiative has been the source of the majority of our

increase in bad debt expense.

Another significant factor influencing bad debt in the quarter was the net growth in the amount

of revenue billed as Balance After Insurance. The increase in “balance-after” added $4 million

to bad debt expense for the quarter.

An offset to bad debt was realized as a result of the resolution of some older disputes with a

commercial payer – the $8 million I mentioned earlier.

So to summarize, bad debt expense grew over the prior year first quarter by $16 million. Pricing

of the uninsured contributed $17 million, an increase in balance after insurance contributed $4

million and several miscellaneous items contributed an additional $3 million, for a total of $24

million. Bad debt was reduced by the aforementioned resolution of some older disputes with a

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commercial payer by $8 million. Since this settlement related to relatively old accounts

receivable, this cash had virtually no impact on our receivables.

Switching the focus to accounts receivable, slide 27 on our Web site, shows that the AR increase

was concentrated in the zero-to-90-day bucket, with both the 91-180 day and the over 180 day

buckets showing improvements. Managed care and aggregate self-pay collection rates remained

stable in the first quarter based on our 18 month look-back analysis.

While same-hospital uninsured admissions and revenues were up over prior year first quarter,

charity was down, making this another quarter in which there are opposing trends. As we have

stated on prior calls, it is difficult to trace the precise cause and effect on this. But we continue

to believe that our strategies to emphasize favorable product lines, educating patients on the

appropriate source for healthcare services and assisting patients with available funding options

are mitigations to what is a key risk in the industry.

Turning to cash flow and capital expenditures, as we discussed on our fourth quarter call, capex

in the first quarter included some “spill-over” from the fourth quarter. Accordingly most of the

capital spend in the quarter occurred in January as we paid for equipment which was delivered or

in the pipeline at the end of last year.

We still intend to adhere to our earlier outlook of $600-$650 million in capex in 2008. As we

also stated in our fourth quarter call, we anticipated that our capital spending would be more

balanced over the first and second half of the year, with significantly less concentration in the

fourth quarter. I should also note that we have received regulatory relief with respect to certain

of our California hospitals, which will reduce our seismic requirements over the next several

years. Although not likely to be significant this year, we are still determining how large the

aggregate effect will be.

With respect to cash flow, the earnings release lays out a fair amount of detail on the cash flow

of the quarter and how it compares to last year.

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You may recall that adjusted cash flow from continuing operations came in lower than

anticipated in the fourth quarter of last year, primarily due to working capital. I indicated in the

year-end earnings call that we were focused on payables and overdraft management and in

reducing days in accounts receivable over the course of 2008. In the first quarter we improved

our payables position consistent with our objectives. The improvement in accounts receivables

is still ahead of us, but we held the line in the first quarter with days in receivables flat against

last year end at 54 days. We are still targeting a two-day reduction in receivables days by the

end of the year.

Accordingly, receivables grew in the quarter proportionate to the growth in revenues, and as I

just said our growth in AR was in the “zero to 90 day” bucket.

Given $66 million in debt service and a $24 million payment to the DOJ in the second quarter, in

addition to continuing capital investments, our June 30 cash position is likely to be modestly

below the March 31 cash balance. June 30 is expected to mark our quarterly low-point in cash

for the year.

Going forward we expect cash to build as a result of stronger operating cash performance in the

second half of the year, our initiatives to produce $400 to $600 million of cash from balance

sheet improvement actions, and the resolution of the USC matter. The respective upside and

downside from there would largely be favorable resolution of the Redding insurance arbitration,

and the contingency reflected in our increased litigation reserve.

In terms of the $400 to $600 million in initiatives, progress is being made. The MOB transaction

is moving along as we have selected Jones Lang LaSalle as our broker on the transaction, and we

expect the formal offering announcement and related documents to go out in the next couple of

weeks. There is a slide on the Web giving some high-level information on the MOBs we own

and are being offered. We also continue to work with the other shareholders and the board of

Broadlane to establish an approach to monetization of current shareholder interests.

Accordingly, we still expect the list of action items making up the $400 to $600 million to be

completed by roughly the end of next year, although much of it could be and should be sooner.

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Some of you have asked about earnings loss from these balance sheet initiatives. From a bottom

line income standpoint, we expect the interest income generated from the cash proceeds to be

sufficient to offset any loss of EBITDA generated presently by these assets. Looking at

EBITDA alone, I don’t believe we will have a loss of EBITDA sufficient to change our

expressed outlook range for 2008 and the one billion or better in EBITDA targeted for 2009.

Moving to the outlook, slide 29 gives our current outlook for the key metrics of financial

performance. The 2008 outlook continues to include an expectation of adjusted EBITDA in the

range of $775 to $850 million – or growth of 10 to 20 percent over the $701 million of adjusted

EBITDA for 2007. At this time we are holding that outlook as we are the outlook on cash flow

and year-end cash. I will remind you though that the cash outlook does not include any of the

anticipated $400 to $600 million cash proceeds I just discussed. Nor does our outlook reflect

any effects of a sale of USC, the Redding arbitration, or the litigation for which we have

increased reserves.

We are adjusting our outlook for outpatient visits slightly as I described earlier, and offsetting

that with improved pricing. We have updated the 2008 and 2009 walk-forward chart on the Web

to show these effects.

In the prior quarters I have done rather detailed, if not tortuous, walk forwards from year-to-date

actuals to our outlook. This quarter I am happy to say that outside of the offsetting changes to

visits and price I just referred to, there is no real need to establish a new reconciliation of actuals

to the outlook.

Let me now ask our operator to assemble the queue for questions.