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Tenet Healthcare Corporation

Tenet Healthcare Corporation. Tenet Healthcare Corporation Owns and operates acute care hospitals Other related health care services Tenet Hospitals have received National Recognition for Quality. Region Locations. Tenet California Santa Ana Office Santa Ana, CA 92707

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Tenet Healthcare Corporation

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  1. Tenet Healthcare Corporation

  2. Tenet Healthcare Corporation • Owns and operates acute care hospitals • Other related health care services • Tenet Hospitals have received National Recognition for Quality Region Locations Tenet CaliforniaSanta Ana OfficeSanta Ana, CA 92707 Tenet Texas-Gulf CoastDallas OfficeDallas, TX 75240 Tenet Central Northeast-Southern StatesAtlanta OfficeAtlanta, GA 30339 Tenet Florida-AlabamaFt. Lauderdale OfficeFort Lauderdale, FL 33309

  3. Tenet Healthcare Corporation • 69 hospitals • 18,009 licensed beds • ~76,000 employees • $9.9 B net operating revenues • ~690,000 admissions • 5.6 M outpatient visits 85% of hospitals in communities with above-average population growth

  4. Operating Attributes: • Market-leading regional networks • Wide variety of medical services, augmented by ancillary health care services • Prestigious academic medical centers • Technological Equipment, Instrumentation, and Specialty Physicians • Second largest for-profit hospital chain

  5. Tenet’s Goals • Being theBest Managed Hospital Company • Being theBest Place to Work in Health Care • Setting New Standards in Service and Quality for Patients • Achieving AttractiveReturnsfor our Shareholders

  6. Commitment to Quality Growth Cost People Quality Service

  7. “Get with the Guidelines” • Tenet’s Cardiovascular Program • American Heart Association’s Recognition: • Recognized Tenetfor having the largest number of participating hospitals • Recognized Tenetfor having MorePerformance Achievement Award WinningHospitals than any Other Health System in the Country

  8. Corporate Governance Quotient (CGQ)ISS Rating System • Eight Areas of Focus: • Board of Directors • Audit • Charter and Bylaw Provisions • Anti-Takeover Provisions • Executive and Director Compensation • Progressive Practices • Ownership • Director Education

  9. CGQ Better than S&P 500 Companies THC HMA HCA

  10. CGQBetter than Health Care Equipment & Services THC HCA HMA

  11. U.S. NEWS & WORLD REPORT 2005Edition Recognized Tenet Healthcare Corporation to have two of“America’s Best Hospitals” St. Christopher’s Hospital for Children

  12. Restructuring Steps: • Senior Management Changes • Divestiture of non-productive hospitals • Implementation of Cost Containment Measure • Investments into Capital Equipment Improvements • “Compact” program for Uninsured Patients

  13. Analyst Projected Earnings Growth Rate

  14. Tenet Healthcare Ave. Days to Collect 59 days Ending Days 57 days HMA Ave. Days to Collect 65 days Ending Days 67 days Accounts Receivable

  15. Value of Efficiency

  16. TTM 03/31/05 Operating Revenue = $ 9,844M Total Recurring Op Expenses = $ 9,814M Recurring Oper Profit = $ 30 M (Non-Recurring Items) Goodwill & Impairment = ($ 1,236M) Cost Litigation = ($ 72M) Restructuring = ($ 36M) Other loss debt = ($ 28M) Analysis of Operations

  17. PEG Ratio PEG = PE/Expected Growth Rate PE = Current Market Price/ TTM Earnings Tenet’s PEG = <1 Tenet’s Stock is Undervalued Since Tenet’s market price is low, and their expected growth rate is expected to rise dramatically: Now is the time to buy.

  18. Team Expectations for Stock Growth Projected: THC : initial 40%, 5% on-going HMA : –5% per year

  19. Invest in Tenet • HMA$24.05, -5% each year, ending stock price $18.61 • $500,000 buys 20,704 shares of stock • 5 years later 20,704 * $18.61=$385,290 • Dividends Paid $20,704 over the five year period • Loss for shareholders after 40% tax and dividend tax of 10% and $500,00 initial investment -$116,781 • THC$12.00, 40% first year, 5% growth each year thereafter, ending stock price $20.42 • $500,000 buys 41,666 shares of stock • 5 years later 41,666 * $20.42=$850,841 • Profitfor shareholders after 40% tax and $500,000 initial investment $210,504

  20. Doing the Right Thing • TenetsFinancial Performance is important; however, it is not the only indicator of a successfulhospital. • Doing the Right Thing for Patients and Employeeswill Reap its Rewards in the Future for the Stockholders and the Communities

  21. TENET • “The Higherthe Risk the MOREthe PROFIT” than HMA

  22. $ize Matters THC # 2 HMA # 8

  23. It Takes Money to Make MONEY

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