The upgrade of the Corporate Family Rating to Ba2 was based on Team Health's consistent operating performance, disciplined balance sheet management, as well as accretive acquisition strategy that has resulted in strong EBITDA growth. The upgrade also reflects Moody's increasing comfort that revenue and margins will continue to modestly improve despite increasing reimbursement pressures facing the healthcare sector.

Following is a summary of Moody's ratings actions for Team Health, Inc.:Ratings upgraded:

Corporate Family Rating at Ba2 from Ba3

Probability of Default Rating at Ba2 from Ba3

$250 million senior secured revolver expiring 2017 at Ba2 (LGD 3, 49%) from Ba3 (LGD 3, 47%)

$275 million senior secured term loan A due 2017 at Ba2 (LGD 3, 49%) from Ba3 (LGD 3, 47%)

$247 million senior secured term loan B due 2018 at Ba2 (LGD 3, 49%) from Ba3 (LGD 3, 47%)

Ratings affirmed:

Speculative Grade Liquidity Rating at SGL-1

RATING RATIONALE

The Ba2 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with modest leverage and strong interest expense coverage. Moody's also considers the benefit of the company's strong competitive position in a highly fragmented industry and stable cash flow. However, Moody's believes that risks around reimbursement and exposure to uninsured individuals could pressure revenue and earnings growth in the near to medium term. Moody's also expects the company to actively pursue acquisitions, yet fund any transactions in a manner that maintains credit metrics.

The rating outlook is stable, reflecting the company's relatively stable business profile and solid free cash flow, as well as Moody's expectation that credit metrics will improve modestly over the next year driven by higher earnings contribution from recent acquisitions.

Though not anticipated in the near term, a rating upgrade could be considered if Team Health substantially increases its size, scale and diversification while sustaining conservative credit metrics including debt/EBITDA below 2.5 times.

Moody's could downgrade Team Health if the company pursues material debt-financed acquisitions or shareholder initiatives. In addition, the rating could come under pressure should reimbursement or payor mix face increase pressures, an increase in the level of uncollectible accounts, an increase in medical malpractice claims in excess of amounts reserved for or the inability to retain physicians and/or hospital contracts are expected to materially impact operating results. More specifically, if debt to EBITDA increases above 3.5 times or free cash flow to debt declines below 10% Moody's could downgrade the rating.

The principal methodology used in rating Team Health Inc. was the Global Business & Consumer Service Industry Rating Methodology, published October 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Based in Knoxville, TN, Team Health Holdings, Inc. ("Team Health") is a leading provider of physician staffing and administrative services to hospitals and other healthcare providers in the U.S. The company is affiliated with approximately 8,000 healthcare professionals who provide emergency medicine, hospital medicine, anesthesiology, pediatric and other healthcare services. The company also provides a full range of healthcare management services to military treatment facilities.

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Ron Neysmith Vice President - Senior Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Peter H. Abdill, CFA MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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