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Tenet Healthcare Corp THC
Q2 2013 Earnings Call Transcript

Transcript Call Date 08/06/2013

Operator: Welcome to the Second Quarter 2013 Tenet Healthcare Earnings Conference Call. My name is Cliff, and I'll be your operator today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I'd now like to turn the call over to Mr. Thomas Rice, Senior Vice President of Investor Relations. Mr. Rice, you may begin.

Thomas R. Rice - SVP, IR: Thank you, operator, and good morning, everyone. Tenet's management will be making forward-looking statements on this call. These statements are qualified by the cautionary note on forward-looking statements contained in our Annual Report on Form 10-K. During the question-and-answer portion of the call, callers are requested to limit themselves to one question and one follow-up question.

At this time, I will turn the call over to Trevor Fetter, Tenet's President and CEO.

Trevor Fetter - President and CEO: Thank you, Tom, and thank you all for joining us this morning. I want to start by updating you on the progress we're making towards completing the Vanguard acquisition and planning for a successful integration.

When we announced the acquisition six weeks ago, we were excited about the opportunity to add Vanguard's strong network of hospitals and complementary operational expertise to Tenet. I'm very pleased to say that we are even more enthusiastic today. As we gain a deeper understanding of Vanguard's market positions, their strategies, operating strength and people, the potential we see for the combined company is even greater. Both the Vanguard and Tenet integration teams are fully engaged in working well together. I'm very confident about the upside from this combination.

The approval process is also going well. Last Monday, the Federal Trade Commission notified us that it had granted early termination of the Hart-Scott-Rodino waiting period. This action clears a major regulatory hurdle and allows us to proceed with the transaction from an antitrust perspective. The remaining regulatory approvals which exist in a handful of states are proceeding smoothly. We've encountered no impediments of any kind, so I am confident that we will be able to complete the transaction before the end of the year, possibly as early as October.

Vanguard has assembled a set of strong market positions, and as we work together to combine forces, the strategic priorities are clear than ever. We're particularly looking forward to being in a number one or number two position in 19 markets. We're not changing any of the initial synergy assumptions at this time, but we are very pleased with what we've learned in the six weeks since announcing the transaction.

I would like now to turn to the results for the second quarter, which we reported this morning. Compared to the expectations we set in our preannouncement on June 24, we came in exactly where we expected to be on volumes, and better than we anticipated on EBITDA. We drove solid growth in outpatient visits, improved commercial pricing and strong cost control in order to increase adjusted EBITDA by nearly 17%. Conifer did a great job of keeping our bad debt expense stable and they also generated solid revenue growth in their business.

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