Tenet Healthcare Corporation (NYSE:THC) today announced it has repurchased $299 million of mandatory convertible preferred stock. This preferred stock would have converted into 51 million shares of the Company’s common stock on October 1, 2012, based on the most recent closing share price. In a related private financing, the Company issued $150 million of 8% senior notes due August 1, 2020 and $141.2 million of 6.25% senior secured notes due November 1, 2018.
In connection with these transactions, Tenet released its preliminary results for the quarter ended March 31, 2012. First quarter results included net operating revenues of $2.350 billion, an increase of 2.2 percent compared to the first quarter of 2011, and net income attributable to common shareholders of $58 million, or $0.13 per diluted share compared to $73 million, or $0.14 per diluted share, in the first quarter of 2011. State provider fees, Health Information Technology incentives, payer settlements, and gains contributed nearly $40 million more to Adjusted EBITDA in the first quarter of 2011 than similar items contributed in the first quarter of 2012.
“This repurchase of preferred stock avoids the potential issuance of up to 51 million additional common shares later this year,” said Trevor Fetter, president and chief executive officer. “As a result of this repurchase and the Company’s prior share repurchase program, completed in January of this year, our outstanding common share count was reduced by approximately 25 percent, on a fully dilutive basis. These aggressive actions to restructure our balance sheet provide a strong signal of management’s confidence in the value of the Company’s common stock. This confidence is bolstered by the solid start we’ve achieved in 2012 with strong growth in adjusted admissions, surgeries, and emergency department visits. Our first quarter performance allows us to raise our 2012 Outlook for Adjusted EBITDA by an additional $25 million. This is our second Outlook increase this year.”
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