Triad Announces Preliminary Results & Guidance

2005 Results

Fourth Quarter

For the fourth quarter of 2005, the Company expects to reportdiluted EPS from continuing operations of approximately $0.65-0.67 onrevenue of approximately $1.3 billion. The Company estimates thatsame-facility inpatient admissions decreased approximately 0.4%;excluding the impact of a change in insurance admission criteria atcertain Alabama facilities and a shift in admissions from an existingTriad facility to a new Triad facility in the same market, the Companyestimates that same-facility inpatient admissions increasedapproximately 1.6%.

Triad expects to report a provision for doubtful accounts of9.4-9.6% of net revenue for the fourth quarter of 2005. Excludingself-pay discounts (which reduced both provision for doubtful accountsas a percent of net revenue and net revenue relative to what theywould have been without the discounts), the Company expects theprovision for doubtful accounts to be 12.5-12.7% of net revenue.

Full Year

For the full year 2005, the Company expects to report diluted EPSfrom continuing operations of approximately $2.78-2.80 on revenue ofapproximately $4.7 billion. The Company estimates that same-facilityinpatient admissions increased approximately 0.7%; excluding theimpact of a change in insurance admission criteria at certain Alabamafacilities and a shift in admissions from an existing Triad facilityto a new Triad facility in the same market, the Company estimates thatsame-facility inpatient admissions increased approximately 2.3%.

Triad expects to report a provision for doubtful accounts of8.3-8.5% of net revenue for the full year 2005. Excluding self-paydiscounts (which reduced both provision for doubtful accounts as apercent of net revenue and net revenue relative to what they wouldhave been without the discounts), the Company expects the provisionfor doubtful accounts to be 11.2-11.4% of net revenue.

The Company plans to release its actual fourth quarter and fullyear 2005 earnings in February 2006 and to conduct a relatedconference call at that time.

2006 Guidance

Diluted EPS

For 2006, Triad expects to achieve diluted EPS from continuingoperations of approximately $2.81-2.93. Effective January 1, 2006, theCompany began recording stock compensation expense, in accordance withStatement of Financial Accounting Standards (SFAS) 123(R); excludingstock compensation expense, which is expected to be approximately $20million after-tax, or $0.23 per diluted share, Triad expects toachieve diluted EPS from continuing operations of approximately$3.04-3.16.

Net Revenue

The Company expects 2006 revenue of approximately $5.4-5.6billion, including approximately $330 million in revenue fromMontclair Baptist Medical Center, Gateway Health System, and BeaconHospital. The Company acquired a majority interest in MontclairBaptist Medical Center in October 2005; it expects to close theGateway transaction in 2006 and to open Beacon Hospital in 2006 aswell.

Same-facility inpatient admissions are expected to growapproximately 2-3%.

Same-facility revenue/adjusted admission is expected to growapproximately 5.0-6.0%:

-- Medicare - 2.5-3.0% increase

-- Medicaid - (1.0)% decrease - 0.0% increase

-- Managed Care - 5.0-6.0% increase

-- All Other - 6.0-7.0% increase

-- Case Mix Increase - 0.5-1.0%

Provision for Doubtful Accounts

The Company's diluted EPS guidance incorporates an expectedprovision for doubtful accounts of approximately 8.7% of net revenuein 2006. This reflects the expected impact of the Company's self-paydiscount policy, which reduces both revenue and the provision as apercent of net revenue in 2006 relative to what they would have beenwithout the discounts. Excluding the self-pay discount policy, theCompany expects the provision for doubtful accounts to beapproximately 12.0% of net revenue in 2006. Triad believes that theprovision will likely fluctuate from quarter to quarter during 2006based on evolving business conditions and the effectiveness of Companyactions in response, and this may impact 2006 EPS.

Allowance for Doubtful Accounts

Triad has primarily utilized an accounts receivable lookbackprocess, augmented by other analytical methods, to determine theallowance for doubtful accounts; this process has been performed everyquarter since the Company's inception. The AR lookback process for thefourth quarter of 2005 reflected a favorable estimation of therequired allowance for doubtful accounts. Management was notcomfortable with the favorable allowance estimation determined throughthe AR lookback process, however, because the self-pay discountsappear to have skewed the results; therefore, management relied moreon other analytical methods to determine an appropriate allowance.Management has examined accounts receivable agings and recorded anallowance of approximately 62% of discounted self-pay receivables,which is more than what the AR lookback process would have required.The allowance for doubtful accounts continues to include the $15million to reflect potential further deterioration in historicalwrite-offs that the Company recorded in third quarter 2003.

Other Items

The Company's guidance for 2006 EPS from continuing operationsincorporates the impact of information systems conversion costs,increased utility costs and subsidies, and external developmentprojects. The Company plans to begin in 2006 a multiyear process toconvert its disparate information systems to one common system as partof an overall information technology strategic plan. While informationsystems operating costs are expected to remain the same once theconversion is completed, the Company will incur conversion coststhrough 2008; 2006 conversion costs are expected to be approximately$7 million after-tax, or $0.08 per diluted share. In addition, Triadexpects an increase of approximately $12 million after-tax, or $0.14per diluted share, from increased utility costs and subsidies forhospital-based physician services.

The Company expects to close on a venture to acquire a majorityinterest in Gateway Health System in Clarksville, TN, during the firstquarter of 2006, which is expected to have a neutral impact on 2006diluted EPS. The Company has also entered into an agreement to managethe operations of Beacon Hospital in Dublin, Ireland, which isexpected to open in the fourth quarter of 2006; this agreement isexpected to negatively impact 2006 earnings by $4 million after-tax,or $0.05 per diluted share, but should be accretive to earnings bymid-2007.

Capital Expenditures and Returns

Capital Expenditures

Capital expenditures are expected to total approximately $600-700million in both 2006 and 2007:

-- $125 million for maintenance

-- $175-225 million for internal expansion

-- $250-280 million for external development (including joint ventures, de novo hospitals, and acquisitions)

-- $50-70 million for information systems conversion

Expected Internal Rate of Return

The Company expects to achieve an average internal rate of return(IRR) on its development projects in the mid-teens range:

-- Acquisitions - 12-16% IRR

-- De Novo Hospitals - 14-18% IRR

-- Joint Ventures - 14-22% IRR

Return on Invested Capital

The Company also expects to achieve further gradual improvementover time, with occasional fluctuation, in its overall return oninvested capital.

Beyond 2006

Because of an increase in provision for doubtful accounts andinformation systems conversion costs, the Company expects 2007 dilutedEPS to grow approximately 10-13%; however, beyond 2007, the Companyexpects to return to annual EPS growth in the mid-teens percent range.

Triad will conduct a conference call at 9:00 am Eastern Time (8:00am Central Time) today, January 9, to discuss these results. To listento the call, please call 800-289-0743, confirmation code 2405109.International participants, please call 913-981-5546, confirmationcode 2405109. This conference call will be simulcast on the Internetvia the Triad website at www.triadhospitals.com. A recorded replay ofthe call will be available for 14 days at 719-457-0820 or888-203-1112, confirmation code 2405109.

Triad, through its affiliates, owns and manages hospitals andambulatory surgery centers in small cities and selected larger urbanmarkets. The Company currently operates 49 hospitals and 10 ambulatorysurgery centers in 15 states with approximately 8,845 licensed beds.In addition, through its QHR subsidiary, the Company providesconsulting, education, intensive resources and management services tohospitals and health systems throughout the United States.

This press release contains forward-looking statements based oncurrent management expectations. Numerous factors, including thoserelated to market conditions and those detailed from time-to-time inthe Company's filings with the Securities and Exchange Commission, maycause results to differ materially from those anticipated in theforward-looking statements. Many of the factors that will determinethe Company's future results are beyond the ability of the Company tocontrol or predict. These statements are subject to risks anduncertainties and, therefore, actual results may differ materially.Readers should not place undue reliance on forward-looking statements,which reflect management's views only as of the date hereof. TheCompany undertakes no obligation to revise or update anyforward-looking statements, or to make any other forward-lookingstatements, whether as a result of new information, future events orotherwise. This release contains certain financial information notderived in accordance with generally accepted accounting principles(GAAP), including adjusted EBITDA; the Company believes thisinformation is useful to investors and other interested parties; suchinformation should not be considered as a substitute for any measuresderived in accordance with GAAP, and may not be comparable to othersimilarly titled measures of other companies; reconciliation of thisinformation to the most comparable GAAP measure is included as anattachment to this release. All references to "Company", "Triad", and"Triad Hospitals, Inc." as used throughout this document refer toTriad Hospitals, Inc. and its affiliates.