What changed in this filing

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Item 1A. Risk Factors

2026-03-16 compared with 2025-02-27 · 126 added, 115 removed, 805 unchanged (23% of the section changed)

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• changes in government healthcare programs, including Medicare and Medicaid, could have an adverse effect on our revenues and business;

• reduction in the reimbursement rates paid by commercial payors, our inability to retain and negotiate favorable contracts with private third party payors, or an increasing volume of uninsured or underinsured patients;

• reduction in the reimbursement rates paid by commercial payors, increased reimbursement denials or payment delays by commercial payors, our inability to retain and negotiate favorable contracts with private third party payors, or an increasing volume of uninsured or underinsured patients;

• effects of changes in laws, regulations, policies and government programs;

• security threats, catastrophic events and other disruptions affecting our, our service providers’ or our JV partners’ information technology and related systems, which have adversely affected, and could in the future adversely affect, our relationships with patients and business partners and subject us to legal claims and liabilities, reputational harm and business disruption and adversely affect our financial condition;

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• our facilities are heavily concentrated in Texas and Oklahoma, which makes us sensitive to regulatory, economic and competitive conditions and changes in those states;

• economic factors that have affected, and may continue to impact, our business, financial condition and results of operations;

• general economic and business conditions, both nationally and in the regions in which we operate, including the impact of challenging macroeconomic conditions and inflationary pressures, current geopolitical instability, and impacts from the imposition of, or changes in, tariffs, as well as the potential impact of federal government shut downs or other uncertain political, financial, credit and capital conditions, have affected, and may continue to impact, our business, financial condition and results of operations;

• negative impact of severe weather, climate change, and other factors beyond our control, which could restrict patient access to care or cause one or more of our facilities to close temporarily or permanently;

• risks related to the Ventas Master Lease and its restrictions and limitations on our business;

• the impact of our significant indebtedness, including our ability to comply with certain debt covenants and other significant operating and financial restrictions imposed on us by the agreements governing our indebtedness, and the effects that variable interest rates and general economic factors could have on our operations, including our potential inability to service our indebtedness;

• the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms, including our ability to comply with certain debt covenants and other significant operating and financial restrictions imposed on us by the agreements governing our indebtedness, and the effects that variable interest rates and general economic factors could have on our operations, including our potential inability to service our indebtedness;

• the impact of a deterioration of public health conditions associated with a future pandemic, epidemic or outbreak of infectious disease;

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• inability to or delay in building, acquiring, selling, renovating or expanding our healthcare facilities;

• our failure to comply with federal and state laws relating to Medicare and Medicaid enrollment, permit, licensing and accreditation requirements, or the expansion of existing or the enactment of new laws or regulation relating to permit, licensing and accreditation requirements;

• effects of changes in public healthcare policy, including any reforms that may be undertaken by a new administration, and legal and regulatory restrictions on our hospitals that have physician owners;

• inability to continually enhance our hospitals with the most recent technological advances in diagnostic and surgical equipment;

• our failure to comply with federal and state laws relating to Medicare and Medicaid enrollment, permit, licensing and accreditation requirements;

• the results of our efforts to use technology, including AI and machine learning, to drive efficiencies, better outcomes and an enhanced patient experience;

• our status as a controlled company;

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For example, as discussed in “Item 1.

Business—Reimbursement and Payment—Medicare” under Item 1, Congress established automatic spending reductions under the BCA and ARPA.

Business—Reimbursement and Payment—Medicare,” Congress established automatic spending reductions under the BCA and ARPA.

We anticipate that the federal budget deficit will continue to place pressures on government healthcare programs.

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The structure and mix of Medicaid supplemental payment programs vary across states, and the programs are subject to changes and governmental reviews at the federal and state levels, which could result in Medicaid supplemental payments being reduced, eliminated, or growing at a slower rate than expected.

We may also be impacted by SDP arrangements, which allow states to direct certain Medicaid managed care plan

expenditures, particularly as funding may be diverted from other payment programs, and we may not satisfy applicable criteria when payments are directed to a specific subset of providers.

We may also be impacted by SDP arrangements, which allow states to direct certain Medicaid managed care plan expenditures, particularly as funding may be diverted from other payment programs, and we may not satisfy applicable criteria when payments are directed to a specific subset of providers.

Federal policies that shape administration of the Medicaid program are subject to change, including as a result of changes in the presidential administration.

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Any material adverse effects to our results of operations resulting from future reductions in payments from government healthcare programs could be exacerbated if we are not able to manage our operating costs effectively.

If reimbursement rates paid by commercial payors are reduced, if we are unable to retain and negotiate favorable contracts with private third party payors, if insured individuals move to health plans with greater coverage exclusions or restrictions or narrower networks, or if our volume of uninsured or underinsured patients increases, our revenues may decline.

If reimbursement rates paid by commercial payors are reduced or we experience increased reimbursement denials or payment delays by commercial payors, if we are unable to retain and negotiate favorable contracts with private third party payors, if insured individuals move to health plans with greater coverage exclusions or restrictions or narrower networks, or if our volume of uninsured or underinsured patients increases, our revenues may decline.

Private third party payors, HMOs, PPOs and other managed care plans, typically reimburse healthcare providers at a higher rate than Medicare, Medicaid or other government healthcare programs.

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Revenues derived from private third party payors accounted for 44.3% and 43.5% of our revenues for 2025 and 2024, respectively.

As a result, our ability to maintain or increase patient volumes covered by private third party payors and to maintain and obtain favorable contracts with private third party payors significantly affects our financial condition, results of operations and cash flows.

As a result, our ability to maintain

or increase patient volumes covered by private third party payors and to maintain and obtain favorable contracts with private third party payors significantly affects our financial condition, results of operations and cash flows.

Private third party payors continue to demand discounted fee structures, and the ongoing trend toward consolidation among payors tends to increase their bargaining power over fee structures.

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The interim and final rules and related guidance implementing the No Surprises Act, including those establishing the IDR process, have been and continue to be subject to legal challenges.

For example, in August

2023, a federal district court vacated certain provisions of these rules and related guidance documents regarding fees and dispute batching criteria.

For example, in August 2023, a federal district court vacated certain provisions of these rules and related guidance documents regarding fees and dispute batching criteria.

As a result, federal agencies issued a final rule in December 2023 that set forth new provisions governing payments associated with the IDR process.

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The resumption of Medicaid eligibility redeterminations following the expiration of this continuous coverage requirement in April 2023 resulted in significant Medicaid coverage disruptions and dis-enrollments.

Medicaid enrollment is generally expected to decline through fiscal year 2025 (which ends June 30, 2025, in most states).

CMS is monitoring the disenrollment process in an effort to protect eligible beneficiaries from inappropriate coverage losses during the return to Medicaid’s historical renewal, enrollment and eligibility determination practices, has established monetary penalties for states, and has required certain states to pause disenrollments due to noncompliant renewal systems.

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If we experience continued growth in uncompensated care, self-pay volume or deterioration in collectability of patient responsibility accounts, our financial condition or results of operations could be adversely affected.

Our business may be adversely impacted by changes in healthcare laws, regulations, policies and government programs.

The healthcare industry remains subject to ongoing reform efforts and is subject to changing political, regulatory and other influences.

Recent legislation and regulation at the state and federal level have affected and may continue to affect individual eligibility for coverage under the Affordable Care Act.

For example, although ARPA increased access to health insurance subsidies for individuals eligible to purchase coverage through Affordable Care Act marketplaces, Congress failed to extend these subsidies in late 2025, resulting in their expiration on December 31, 2025.

Efforts to renew the subsidies are ongoing in Congress, but the outcome of the efforts remains uncertain.

It is unclear whether the subsidies will be renewed or extended in the upcoming congressional term.

These and other changes and initiatives may impact the number of individuals that elect to obtain public or private health insurance or the scope or such coverage, if purchased.

Significant reductions in coverage and individual eligibility as a result of such efforts, such as expiration of the subsidies, may have an adverse effect on our business and financial condition.

Additionally, the OBBBA includes provisions that may impact our financial performance through substantial modifications to the federal statutes and regulations to which our operations are subject.

Relevant OBBBA provisions have varying effective dates, and analysis of their impact and timing is ongoing.

We are unable to predict whether or how future legislation, rulemaking, or judicial action will impact implementation of the OBBBA.

Of particular relevance to our operations, the OBBBA has reduced the federal government’s overall Medicaid expenditures and tightened Medicaid eligibility requirements, each of which are likely to drive an increase to the uninsured population.

Because our facilities rely in part on reimbursement from federal health care programs, including Medicaid, for the reimbursement of services rendered, these changes may have a negative impact on our financial performance.

We may be unable to achieve operating and financial targets, develop and execute mitigation plans to offset to the extent possible impacts from the OBBBA.

Ongoing budgetary uncertainties and continued efforts to reduce the federal deficit may result in further payment reductions from both the Medicaid and Medicare programs.

There is also uncertainty regarding whether, when, and what other health reform initiatives will be adopted and the impact of such efforts on providers and other healthcare industry participants.

CMS administrators may make changes to Medicaid payment models and grant states various flexibilities in the administration of state Medicaid programs, some of which may result in coverage reductions or decreased enrollment.

Reductions in the number of insured individuals or the scope of insurance coverage may have an adverse effect on our business.

Other recent health reform initiatives and proposals at the federal and state levels include those focused on price transparency and out-of-network charges, which may impact prices and the relationships between hospitals, patients, payors, and ancillary providers (such as anesthesiologists, radiologists and pathologists).

For example, among other consumer protections, the No Surprises Act imposes various requirements on providers and health plans intended to prevent “surprise” medical bills.

Other industry participants, such as private payors and large employer groups and their affiliates, may also introduce financial or delivery system reforms.

Finally, we are unable to predict the exact nature of future efforts to repeal, replace, or amend the Affordable Care Act, and we are unable to determine at this time the net effects of agency policy changes and reversals that may be enacted under the current or future administrations.

Likewise, we are unable to predict future reforms to the Medicare and Medicaid programs in the face of heightened regulatory uncertainty.

Changes to public policy and related healthcare reform initiatives including but not limited to those described here may have an adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Our business could be negatively affected by security threats, catastrophic events and other disruptions affecting our, our service providers’ or our JV partners’ information technology and related systems, which have adversely affected, and could in the future adversely affect, our relationships with patients and business partners and subject us to legal claims and liabilities, reputational harm and business disruption and adversely affect our financial condition.

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We and certain of our service providers have experienced breaches of cybersecurity from time to time, including phishing incidents and other social engineering schemes.

Our cybersecurity risk management program and processes, including our policies, controls or procedures and the other preventive actions we take to reduce the risk of such incidents and protect our information technology and sensitive and confidential data, may not always be fully implemented, complied with, effective or sufficient to defend against all such attacks.

Growing cybersecurity threats related to the use of ransomware and other malicious software may threaten the access and utilization of critical information technology and data and may also have an adverse impact on our clinical and business operations.

In November 2023, we determined that a ransomware cybersecurity incident had impacted and disrupted a number of our operational and information technology systems.

Upon detecting the incident, we quickly activated our incident response protocols and implemented a series of containment and remediation measures, including engaging the services of cybersecurity experts and incident response professionals.

We also promptly launched an investigation, engaged external counsel to support the investigation and involved federal and state law enforcement.

During this time, our hospitals remained operational and continued to deliver patient care utilizing established downtime procedures;

however, we advised local EMS systems and other providers to divert emergency ambulance transports to other facilities until the Cybersecurity Incident had been contained.

As a result of our investigation, we determined that the unauthorized actor acquired a copy of certain personal information and PHI of a limited number of our patients and personal information of employees, but did not gain access to our EHR platform.

We notified the impacted individuals and governmental authorities that require notification of such incidents for whom we have contact information and, as additional contact information becomes available, we may make additional notifications.

Additionally, because of the time taken to contain and remediate the Cybersecurity Incident, our online electronic billing systems were not functioning at their full capacities and certain billing, reimbursement and payment functions were delayed.

We estimate the Cybersecurity Incident had an adverse pre-tax impact of approximately $74 million during the year ended December 31, 2023.

This estimate includes lost revenues from the associated business interruption and costs to remediate the issue, net of insurance proceeds.

While our operations were no longer materially disrupted as of December 31, 2023, we continued to experience delays in billing claims and obtaining reimbursements and payments through the first quarter of 2024, and will incur certain expenses related to the Cybersecurity Incident, including expenses to defend claims brought by individuals (including class actions) and other expenses related to the Cybersecurity Incident.

The full scope of the costs and related impacts of this Cybersecurity Incident, including any future impact on our financial condition and results of operations, as well as the extent to which these costs will be offset by our cybersecurity insurance, has not been determined.

Business—Cybersecurity Incident."

Our cybersecurity risk management program and processes, including our policies, controls or

procedures and the other preventive actions we take to reduce the risk of such incidents and protect our information technology and sensitive and confidential data, may not always be fully implemented, complied with, effective or sufficient to defend against all such attacks.

Cybersecurity threats related to the use of ransomware and other malicious software threaten the access and utilization of critical information technology and data and may also have an adverse impact on our clinical and business operations.

For example, see “Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations—Cybersecurity Incident” for a description of a cybersecurity incident that impacted us in November 2023.

As cybersecurity threats continue to evolve, we may not be able to anticipate certain attack methods in order to implement effective protective measures, and we may be required to expend significant additional resources to continue to modify and strengthen our security measures, investigate and remediate any vulnerabilities in our information technology systems and infrastructure, or invest in new technology designed to mitigate security risks.

The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Additionally, the increased adoption of artificial intelligence technologies may heighten our cybersecurity risks by making cyberattacks more difficult to detect, contain, and mitigate.

Additionally, the increased adoption of AI technologies may heighten our cybersecurity risks by making cyberattacks more difficult to detect, contain, and mitigate.

Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, information technology systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

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Trends toward clinical transparency and value-based purchasing may impact our competitive position and patient volumes.

Healthcare consumers are able to access hospital performance data on quality measures and patient satisfaction, as well as standard charges for services, to compare competing providers.

Healthcare consumers are able to access hospital performance data on quality measures and patient satisfaction, as well as standard charges for

services, to compare competing providers.

For example, CMS publicizes on its Care Compare website performance data related to quality measures and data on patient satisfaction surveys that hospitals submit in connection with their Medicare reimbursement.

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We may be required to continue to enhance wages and benefits to recruit and retain nurses and other medical support personnel or to hire more expensive temporary or contract personnel.

However, certain practices to recruit nurses and medical support personnel that we believe are common in the industry, such as training and education programs that contain a repayment obligation, have been subject to scrutiny by the Consumer Financial Protection Bureau, and our ability to conduct certain types of recruiting initiatives in the future may be limited.

subject to scrutiny by the Consumer Financial Protection Bureau, and our ability to conduct certain types of recruiting initiatives in the future may be limited.

As a result of shortages, competition and inflationary pressures, our labor costs could continue to increase and/or our capacity could be negatively impacted.

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Third party payor controls designed to reduce costs and other payor practices intended to decrease inpatient services, surgical procedure volumes or reimbursement for services rendered may reduce our revenues.

Controls imposed by Medicare, managed Medicare, Medicaid, managed Medicaid and private third party payors designed to reduce admissions, intensity of services, surgical volumes and lengths of stay, in some instances referred to as “utilization review,” have affected and are expected to increasingly affect our facilities.

affected and are expected to increasingly affect our facilities.

Utilization review entails the review of the admission and course of treatment of a patient by third party payors and may involve prior authorization requirements.

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Generally, value-based purchasing initiatives tie payment to the quality and efficiency of care.

Medicare requires hospitals to report certain quality data to receive full reimbursement updates and does not reimburse for care related to certain preventable adverse events (called “never events”) or care related to HACs.

For example, Medicare requires hospitals to report certain quality data to receive full reimbursement updates and does not reimburse for care related to certain preventable adverse events (called “never events”) or care related to HACs.

Hospitals in the bottom quartile of HAC rates each year receive a 1% reduction in inpatient PPS Medicare payments.

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In addition, even if the operations of our business and the acquired businesses are integrated successfully, the full benefits of such acquisitions may not be realized, including the synergies, cost savings, revenue growth or other benefits that are expected.

These benefits may not be achieved within the anticipated time frame, or at all.

These benefits may not be achieved

within the anticipated time frame, or at all.

Further, we may incur additional unanticipated costs in the integration of our business with the acquired businesses.

These unanticipated costs could be substantial.

There can be no assurance that the elimination of certain duplicative costs, as well as the realization of other efficiencies related to the integration of the multiple businesses, will offset the

incremental transaction-related costs over time.

There can be no assurance that the elimination of certain duplicative costs, as well as the realization of other efficiencies related to the integration of the multiple businesses, will offset the incremental transaction-related costs over time.

As a result, we cannot provide any assurance that our acquisitions will result in the realization of the full benefits anticipated from the transactions.

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Additionally, the interests of our JV partners may differ from the interests of our Company as a whole, which could limit our ability to effectively operate the related VIEs and maximize the economic benefits of our JV model.

For example, it may be in a VIE’s interest to prioritize investment in hospital-specific infrastructure within its own health system, whereas it may be in the Company’s interest as a whole to allocate funds to certain other health systems with higher growth potential or to invest in other initiatives, such as technological innovation,

that might benefit all of our health systems.

Such divergence in interests could impact our ability to operate a VIE effectively.

Given that a significant minority interest in these nine hospitals are held by third parties, such as not-for-profit medical systems, universities, academic medical centers and foundations, a significant portion of our revenue and net income is subject to the risks of the VIE structure.

For the years ended December 31, 2024 and 2023, $1.7 billion and $1.6 billion, respectively, of our revenue and $242.5 million and $213.7 million, respectively, of our net income was attributable to our JVs and VIEs.

For the years ended December 31, 2025 and 2024, $1.8 billion and $1.7 billion, respectively, of our revenue and $248.4

million and $242.5 million, respectively, of our net income was attributable to our JVs and VIEs.

As of the date of this Annual Report, we are not aware of any conflicts between the VIE and us.

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UT Health East Texas accounted for 19.4% and 19.5% of our total revenue for the years ended December 31, 2025 and 2024, respectively, and 10.3% and 11.8% of our pre-tax income for the same periods, respectively.

Our next largest JV is in Pocatello, Idaho, where we operate and manage one hospital and twelve sites of care.

Our next largest JV is in Pocatello, Idaho, where we operate and manage one hospital and 14 sites of care.

This regional health system is named the Portneuf Medical Center.

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If there are delays or difficulties in enhancing business processes or our third party service providers do not perform, we may not be able to fully realize the economic and other benefits of the outsourced services, which could result in substantial costs, divert management’s attention from other strategic activities, or create other operational or financial challenges for us.

Moreover, although we take steps to monitor and regulate the performance of any parties to which we delegate services, arrangements with third party service providers may make our operations vulnerable if these vendors fail to satisfy their obligations to us as a result of their performance, changes in their own operations, financial condition or other matters outside of our control.

performance, changes in their own operations, financial condition or other matters outside of our control.

We may also face legal, regulatory, financial or reputational harm for the actions or omissions of such service providers, and we may not have effective recourse against the service providers.

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For example, Texas currently operates its Healthcare Transformation and Quality Improvement Program pursuant to a Medicaid 1115 waiver, the “Texas Waiver Program.” As currently structured, the Texas Waiver Program, which has undergone significant changes in recent years, provides funding for uncompensated care and includes several directed payment programs.

The Texas Waiver Program continues through 2030, but directed payment programs have limited approval periods, such as the Comprehensive Hospital Increase Reimbursement Program, or CHIRP, which is currently set to expire August 31, 2025.

The Texas Waiver Program continues through 2030, but unique directed payment programs have limited approval periods and must be renewed each fiscal year.

If Texas is unable to obtain future extensions or other approvals related to the Texas Waiver Program, including its directed payment programs, our revenues could be negatively impacted.

Further, it is difficult to predict whether and how Medicaid programs, including waiver programs, might be modified, extended, or eliminated, any of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

See see Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements.

Economic factors have affected, and may continue to impact, our business, financial condition and results of operations.

See Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements included within this Annual Report.

General economic and business conditions, both nationally and in the regions in which we operate, including the impact of challenging macroeconomic conditions and inflationary pressures, current geopolitical instability, and impacts from the imposition of, or changes in, tariffs, as well as the potential impact of federal government shut downs or other uncertain political, financial, credit and capital conditions, have affected, and may continue to impact, our business, financial condition and results of operations.

We believe broad economic factors, such as high unemployment rates in our markets and instability in consumer spending, could impact our volumes and our ability to collect outstanding receivables.

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Furthermore, the availability of liquidity and credit to fund the continuation and expansion of many business operations worldwide has been limited in recent years.

Our ability to access the capital markets on acceptable terms may be severely restricted at a time when we

would like, or need, to access those markets, which could have a negative impact on our growth plans, our flexibility to react to changing economic and business conditions and our ability to refinance existing debt.

Our ability to access the capital markets on acceptable terms may be severely restricted at a time when we would like, or need, to access those markets, which could have a negative impact on our growth plans, our flexibility to react to changing economic and business conditions and our ability to refinance existing debt.

An economic downturn or other economic conditions could also adversely affect the counterparties to our agreements, including the lenders under our credit facilities, causing them to fail to meet their obligations to us.

In addition, any shutdown of the federal government, failure to enact appropriations or other lapse in appropriations, hold on congressionally authorized spending or interruptions in the distribution of governmental funds could adversely affect our financial results.

Additionally, imposed or threatened tariffs have raised, and may continue to raise, the cost of certain medical supplies and products.

We have also experienced, and may continue to experience, supply disruptions, shortages, and other incremental costs.

Our hospitals and other healthcare facilities may be negatively impacted by severe weather, climate change, and other factors beyond our control, which could restrict patient access to care or cause one or more of our facilities to close temporarily or permanently.

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Further, Ventas would have the right in certain circumstances to exercise a purchase option with respect to certain personal property at the leased facilities.

Any such occurrence would have a material

adverse effect on our business, financial condition, results of operations, cash flows and profitability.

For additional information regarding the terms of the Ventas Master Lease, see Note 4, "Related Party Transactions" to our consolidated financial statements.

Any such occurrence would have a material adverse effect on our business, financial condition, results of operations, cash flows and profitability.

For additional information regarding the terms of the Ventas Master Lease, see Note 4, Related Party Transactions, to our consolidated financial statements included within this Annual Report.

Our principal equity holders’ interests may conflict with yours.

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For example, EGI-AM may have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in its judgment, could enhance their equity investments, even though such transactions might involve risks to you as a stockholder.

Furthermore, EGI-AM may in the future own businesses that directly or indirectly compete with us.

Furthermore, EGI-AM may in the future own

businesses that directly or indirectly compete with us.

EGI-AM may pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us.

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Ventas may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

Our significant level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations under our debt instruments.

Our significant level of indebtedness, and the ability to refinance such indebtedness on acceptable terms, could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations under our debt instruments.

As of December 31, 2025, we had $294.6 million (net of the original issue discount and deferred financing costs) of our senior notes outstanding, $764.2 million (net of the original issue discount and deferred financing costs) of borrowings under our senior secured term loan facility and $40.4 million of finance leases and other secured debt (excluding, for the avoidance of doubt, any rent expense payable pursuant to the Ventas Master Lease or the lease arrangement with MPT).

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In addition to competitive conditions in the industry in which we operate, our financial condition and operating performance are also subject to prevailing economic conditions and certain financial, business and other factors beyond our control.

The agreements that govern our existing indebtedness impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.

The agreements that govern our existing indebtedness impose significant operating and financial restrictions on us.

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If interest rates increase, our debt service obligations on our variable rate indebtedness will increase even though the amount borrowed remains the same, and therefore net income and associated cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

Effective August 31, 2023, we executed interest rate swaps with Barclays Bank PLC and Bank of America, N.A., as counterparties, with notional amounts totaling approximately $529.0 million, expiring June 30, 2026.

We have entered into these agreements to manage our exposure to fluctuations in interest rates.

Under these swap agreements, we are required to make monthly fixed rate payments at annual rates ranging from 1.47% to 1.48%.

The counterparties are obligated to make monthly floating rate payments to us based on the one-month Secured Oversight Financing Rate (“SOFR”), each subject to a floor of 0.39%.

We have entered into swap agreements to manage our exposure to fluctuations in interest rates.

On October 8, 2021, we executed interest rate swap agreements with Barclays Bank PLC and Bank of America, N.A., as counterparties, with initial notional amounts totaling approximately $529.0 million, effective August 31, 2023 and expiring June 30, 2026.

Under these swap agreements, we are required to make monthly fixed rate payments at annual rates ranging from 1.47% to 1.48% and the counterparties are required to make monthly floating rate payments to us based on the one-month Term Secured Oversight Financing Rate (“SOFR”), each subject to a floor of 0.39%.

On February 5, 2025, we executed interest rate swap agreements with Truist Bank and Royal Bank of Canada, as counterparties, with an effective date of June 30, 2025 and expiring June 30, 2029.

As of the effective date, the notional amounts totaled $0.6 million, and will accrete up to $400.4 million by June 30, 2026.

Under these swap agreements, we are required to make monthly fixed rate payments at annual rates ranging from 3.97% to 3.98% and the counterparties are required to make monthly floating rate payments to us based on one-month Term SOFR, each subject to a floor of 0.50%.

Furthermore, the United States-dollar London Inter-bank Offered Rate (“LIBOR”) was replaced with SOFR, a new index calculated by reference to short-term repurchase agreements for United States Treasury securities.

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In addition, daily changes in SOFR have, on occasion, been more volatile than daily changes in other benchmark or market rates, including LIBOR, which results from the volatility of SOFR reflecting the underlying volatility of the overnight United States Treasury repo market.

The Federal Reserve Bank of New York has at times conducted operations in the overnight United States Treasury repo market in order to help maintain the federal funds rate within a target range.

Federal Reserve Bank of New York has at times conducted operations in the overnight United States Treasury repo market in order to help maintain the federal funds rate within a target range.

There can be no assurance that the Federal Reserve Bank of New York will continue to conduct such operations in the future, and the duration and extent of any such operations is inherently uncertain.

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Although recipients are not required to repay funding received, provided they attest to and comply with certain terms and conditions, changes to interpretations of guidance on the underlying terms and conditions may result in the derecognition of amounts previously realized.

During the years ended December 31, 2023 and 2022, we received $8.5 million and $49.9 million, respectively, in cash distributions from the Provider Relief Fund and other state and local programs, all of which was timely expended.

We did not receive any such funds during the year ended December 31, 2024.

During the year ended December 31, 2023, we received $8.5 million in cash distributions from the Provider Relief Fund and other state and local programs, all of which was timely expended.

We did not receive any such funds during the years ended December 31, 2025 or 2024.

In June 2024, payments under the PHSSEF ceased.

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We regularly maintain cash balances at third party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit.

If a depository financial institution in which we hold our cash and cash equivalents fails or if a depository institution is subject to other adverse conditions in the financial or credit markets, and impacts access to our invested cash or cash equivalents, our operating liquidity and financial performance could be adversely affected.

If a depository financial institution in which we hold our cash and cash equivalents fails or if a depository institution is

subject to other adverse conditions in the financial or credit markets, and impacts access to our invested cash or cash equivalents, our operating liquidity and financial performance could be adversely affected.

Risks Related to Regulation

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• the confidentiality, maintenance, interoperability, exchange, and security of medical records and other health-related and personal information, including data breach, ransomware and identity theft issues;

• the development and use of artificial intelligence and other predictive algorithms, including those used in clinical decision support tools;

• the development and use of AI and other predictive algorithms, including those used in clinical decision support tools;

• screening, stabilization and transfer of individuals who have emergency medical conditions;

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Several states in which we operate have also adopted similar fraud and abuse laws to the laws described above.

The scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with

broad discretion.

The scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion.

Some state fraud and abuse laws apply to items or services reimbursed by any payor, including patients and commercial insurers, not just those reimbursed by a federally funded healthcare program.

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The private parties are entitled to share in any amounts recovered by the government.

When an entity is determined to have violated the federal civil FCA, the government may impose substantial civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.

Medicare, Medicaid and other federal healthcare programs.

In addition, a number of states have adopted their own false claims and whistleblower provisions.

Certain of our facilities have been, are currently, and may in the future be subject to lawsuits, qui tam actions, civil investigative demands, subpoenas, investigations, audits and other inquiries related to our operations.

We and certain of our facilities have been, are currently, and may in the future be subject to lawsuits, qui tam actions, civil investigative demands, subpoenas, investigations, audits and other inquiries related to our operations.

These claims, lawsuits, and proceedings are in various stages of adjudication or investigation and involve a wide variety of claims and potential outcomes.

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We are routinely subject to audits under various government programs, and any delays timely providing requested records, negative audit findings or allegations of fraud or abuse may subject us to liability, such as overpayment liability, refunds or recoupments of previously paid claims, payment suspension or the revocation of billing or payment privileges in governmental healthcare programs.

Such actions, if imposed on the Company or its subsidiaries, could materially and adversely impact our revenue, financial condition and results of operations.

Such actions, if imposed on us or our subsidiaries, could materially and adversely impact our revenue, financial condition and results of operations.

Responding to investigations and qui tam lawsuits can be time-and resource-consuming and can divert management’s attention from the business.

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The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future.

Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot predict the impact of future laws, regulations, standards, or the perception of their requirements on our business.

Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot predict

the impact of future laws, regulations, standards, or the perception of their requirements on our business.

This regulatory landscape may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us.

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Should any of our hospitals be found to be noncompliant with these requirements, the hospitals could be assessed fines and penalties, could be required to refund reimbursement amounts or could lose their licensure or Medicare and/or Medicaid certification or accreditation so that such hospitals are unable to receive reimbursement from such programs and possibly from other third party payors, and our business could be materially adversely affected.

Our business may be adversely impacted by changes in public healthcare policy.

The healthcare industry remains subject to ongoing reform efforts and is subject to changing political, regulatory and other influences.

Regulatory uncertainty has increased as a result of the U.S.

Supreme Court decision in Loper Bright abrogating the Chevron Doctrine and the outcome of the 2024 presidential election.

In particular, the Loper Bright decision has increased uncertainty in future regulatory rulemaking by increasing the regulatory oversight powers of the courts, delaying or halting ongoing agency rulemaking processes, and prompting modifications or reversals of longstanding agency policy.

Rulemaking processes and agency policy are likely to be further shaped by recent presidential executive orders that seek to expand the powers of the Executive Office and establish, among things, a presidential advisory commission tasked with restructuring government agencies to reduce or eliminate regulations, government programs, and other expenditures.

Furthermore, a recently appointed commission of quasi-governmental personnel has been empowered to significantly reduce the size of the federal workforce.

If departmental efficiencies break down across the healthcare reimbursement system due to understaffing, we may be experience an increase in delayed or denied reimbursement.

At the same time, the Affordable Care Act remains the target of ongoing repeal and replace efforts.

Recent legislation and regulation at the state and federal level have affected and may continue to affect individual eligibility for coverage under the Act.

For example, ARPA increased access to health insurance subsidies for individuals eligible to purchase coverage through Affordable Care Act marketplaces;

while these subsidies have been extended through the end of calendar year 2025, extension into future calendar years remains uncertain.

These and other changes and initiatives may impact the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased.

We are unable to predict the exact nature of future efforts to repeal, replace, or amend the Affordable Care Act.

Significant reductions in coverage and individual eligibility as a result of such efforts may have an adverse effect on our business and financial condition.

There is also uncertainty regarding whether, when, and what other health reform initiatives will be adopted and the impact of such efforts on providers and other healthcare industry participants.

Reductions in the number of insured individuals or the scope of insurance coverage may have an adverse effect on our business.

For example, among other consumer protections, the No Surprises Act imposes various requirements on providers and health plans intended to prevent “surprise” medical bills.

Other industry participants, such as private payors and large employer groups and their affiliates, may also introduce financial or delivery system reforms.

We are unable to predict the exact nature of future efforts to repeal, replace, or amend the Affordable Care Act, and we are unable to determine at this time the net effects of agency policy changes and reversals that may be enacted, whether as a result of the Loper Bright decision or the outcome of the 2024 presidential election.

Likewise, we are unable to predict future reforms to the Medicare and Medicaid programs in the face of heightened regulatory uncertainty.

Changes to public policy and related healthcare reform initiatives may have an adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

There are significant legal and regulatory restrictions on our hospitals that have physician owners.

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We incur substantial costs as a result of operating as a public company and our management is required to devote substantial time to new compliance initiatives and corporate governance practices of which we have limited experience.

As a new public company, we will incur significant legal, accounting, administrative and other costs and expenses that we did not previously as a private company.

As a public company, we incur significant legal, accounting, administrative and other costs and expenses that we did not previously as a private company.

We are subject to the reporting requirements of the Exchange Act, which requires, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition.

In addition, the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), and rules subsequently implemented by the SEC and the NYSE, impose numerous requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC has adopted additional rules and regulations in these areas, such as mandatory “say on pay” voting requirements that apply to us.

Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,

the SEC has adopted additional rules and regulations in these areas, such as mandatory “say on pay” voting requirements that apply to us.

Stockholder activism, the political environment and high levels of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and may impact the manner in which we operate our business in ways we cannot currently anticipate.

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These requirements have increased and will continue to increase our legal, accounting and financial compliance costs and have made and will continue to make some activities more time consuming and costly.

For example, we expect these rules and regulations to make it more difficult and more expensive for

us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.

For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.

These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our Board or our Board committees or as executive officers.

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The Sarbanes-Oxley Act, requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures.

One key aspect of the Sarbanes-Oxley Act is that we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, with attestation from our independent registered public accounting firm on the effectiveness of our internal controls, beginning with our annual report for the fiscal year ending December 31, 2025.

If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, investors may lose confidence in the accuracy and completeness of our financial reporting and the market price of our common stock could decline, and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities, which would require additional financial and management resources.

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Information blocking is defined as engaging in activities that are likely to interfere with the access, exchange or use of electronic health information, subject to limited exceptions.

In June 2023, the OIG published its final rule implementing the statutory penalties for information blocking,

which are up to $1 million per violation.

In June 2023, the OIG published its final rule implementing the statutory penalties for information blocking, which are up to $1 million per violation.

Enforcement of information blocking penalties began on September 1, 2023.

In June 2024, HHS finalized a rule to establish disincentives for healthcare providers that participate in certain Medicare programs and that have been determined by the OIG to have committed information blocking.

Current and future initiatives related to healthcare technology (including artificial intelligence and other predictive algorithms), data sharing and interoperability may require changes to our operations, impose new and complex obligations on us, affect our relationships with providers, vendors, healthcare information exchanges and other third parties and require investments in infrastructure.

In June 2024,

HHS finalized a rule to establish disincentives for healthcare providers that participate in certain Medicare programs and that have been determined by the OIG to have committed information blocking.

Current and future initiatives related to healthcare technology (including AI and other predictive algorithms), data sharing and interoperability may require changes to our operations, impose new and complex obligations on us, affect our relationships with providers, vendors, healthcare information exchanges and other third parties and require investments in infrastructure.

For example, HHS finalized a rule in December 2023 titled Health Data, Technology, and Interoperability:

Certification Program Updates, Algorithm Transparency, and Information Sharing (“HTI-1 Final Rule”) which, among other things, modifies the information blocking exceptions, and imposes transparency requirements for artificial intelligence and other predictive algorithms that are part of certified health information technology.

Certification Program Updates, Algorithm Transparency, and Information Sharing (“HTI-1 Final Rule”) which, among other things, modifies the information blocking exceptions, and imposes transparency requirements for AI and other predictive algorithms that are part of certified health information technology.

We may be subject to penalties or other significant disincentives or experience reputational damage for failure to comply with applicable laws and regulations.

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In either case, our results of operations and financial condition could be adversely affected.

Our efforts to implement new technologies, including AI and machine learning, could have an adverse impact on our business, financial condition, results of operations, or growth plans.

Advances in digital tools and emerging technologies have enabled the use of AI in various aspects of our operations.

When implemented appropriately, we believe AI‑enabled systems can help improve efficiency, support clinical and administrative workflows, and enhance the experience of our patients and employees.

However, AI technologies are still evolving, and their performance can be unpredictable.

The accuracy and reliability of AI outputs depend heavily on the quality and completeness of the data used, and underlying datasets may contain errors, omissions, or biases that could affect AI system results.

In addition, AI tools that rely on sensitive patient or operational information may increase the risk of cybersecurity incidents, privacy breaches, or other unintended disclosures.

If AI systems we use now or in the future do not function as expected, whether due to software defects, algorithmic limitations, implementation challenges, human error or other factors, we could experience operational disruptions, incur additional costs, or face reputational harm.

Even where AI operates as designed, we may be exposed to claims or enforcement actions alleging issues such as misleading representations, privacy or security violations, discrimination or intellectual property infringement.

We may also face risks if we are unable to effectively maintain or upgrade our information systems, integrate new technologies, or deploy AI technologies in a manner that keeps pace with evolving requirements, industry practices, or competitive dynamics.

Failure to do so could impair our ability to respond to regulatory changes, operate efficiently, or compete with organizations that are more successful in adopting and managing advanced technologies, which could have an adverse impact on our business, financial condition, results of operations or growth plans.

Risks Related to Ownership of our Common Stock

Our stock price could be volatile, and, as a result, our stockholders may not be able to resell their shares at or above the price paid for them.

Since our initial public offering, the price of our common stock as reported on the New York Stock Exchange has ranged from a low of $13.80 to a high of $20.19.

The price of our common stock could be subject to fluctuations in response to a number of factors, including those described elsewhere in this report and others such as:

The price of our common stock has been and could continue to be subject to fluctuations in response to a number of factors, including those described elsewhere in this report and others such as:

• United States political and economic factors unrelated to our performance;

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• other events or factors, including those from natural disasters, war, acts of terrorism, periods of widespread civil unrest or responses to these events.

Securities class action litigation is often initiated against companies following periods of volatility in their stock price.

This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.

We are currently, and may in the future be, subject to securities litigation, which is expensive and could divert management’s time and attention from our business, and could have a material adverse effect on our results of operations, financial condition, prospects and stock price.

Securities class action and shareholder derivative litigation is often initiated against public companies following periods of volatility in their stock price.

Legal proceedings like these, regardless of their merits or their ultimate outcomes, are costly, divert management’s attention and may materially adversely affect our business, results of operations, financial condition, prospects, and stock price.

The Company and certain of our executive officers have been named as defendants in a securities class action lawsuit and certain executive officers and the members of the board of directors have been named as defendants in a shareholder derivative lawsuit.

The complaints generally allege violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and breached their fiduciary obligations.

The complaints seek unspecified damages.

We intend to vigorously defend the claims made;

however, at this time no assessment can be made as to the likely outcome.

Therefore, we cannot determine the likelihood of loss, if any, nor estimate a range of possible loss.

Legal Proceedings" and the “Litigation and Regulatory Matters” section of Note 13, Commitments and Contingencies, in the notes to the consolidated financial statements contained elsewhere in this Annual Report for additional information about pending matters.

If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the price of our common stock may decline.

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EGI-AM and Ventas and certain of their respective affiliates engage in other investments and business activities in addition to their ownership of us.

Our certificate of incorporation provides that, to the fullest extent permitted by law, any officer or director of ours

who is also an officer, director, employee, managing director or other affiliate of EGI-AM or ALH Holdings, LLC (a subsidiary of Ventas) or any of their respective affiliates has the right, and has no duty to abstain from exercising such right, to engage or invest in the same or similar businesses as us, do business with any of our partners or vendors or employ or otherwise engage any of our officers, directors or employees.

Our certificate of incorporation provides that, to the fullest extent permitted by law, any officer or director of ours who is also an officer, director, employee, managing director or other affiliate of EGI-AM or ALH Holdings, LLC (a subsidiary of Ventas) or any of their respective affiliates has the right, and has no duty to abstain from exercising such right, to engage or invest in the same or similar businesses as us, do business with any of our partners or vendors or employ or otherwise engage any of our officers, directors or employees.

Moreover, our certificate of incorporation provides that, to the fullest extent permitted by law, no officer or director of ours who is also an officer, director, employee, managing director or other affiliate of EGI-AM or ALH Holdings, LLC (a subsidiary of Ventas) or any of their respective affiliates will be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that any such individual directs a corporate opportunity to EGI-AM or Ventas or any of their respective affiliates instead of us, or does not communicate information regarding a corporate opportunity to us that the officer, director, employee, managing director or other affiliate has directed to EGI-AM or Ventas or any of their respective affiliates (other than us), as applicable.

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Our certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, with certain limited exceptions, be the sole and exclusive forum for any stockholder (including any beneficial owner) to bring (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”) or our certificate of incorporation or bylaws, or (d) any action asserting a claim governed by the internal affairs doctrine.

The choice of forum provision of our certificate of incorporation does not establish exclusive jurisdiction in the Court of Chancery of the State of Delaware for claims that arise under the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, or other federal securities laws if there is exclusive or concurrent jurisdiction in the federal courts.

The choice of forum provision of our certificate of incorporation does not establish exclusive jurisdiction in the Court of Chancery of the State of Delaware for claims that arise under the

Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, or other federal securities laws if there is exclusive or concurrent jurisdiction in the federal courts.

Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock is deemed to have notice of and consented to the foregoing provisions.

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Future sales, or the perception of future sales, of our common stock may depress the price of our common stock.

If we sell, or any of our existing stockholders sell, a large number of shares of our common stock, or if we issue a large number of shares in connection with future acquisitions, financings, equity incentive plans, or other circumstances, the market price of our

common stock could decline significantly.

Moreover, the perception in the public market that we or our stockholders might sell shares of our common stock could depress the market price of those shares.

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In addition, certain stockholders have certain demand registration rights that could require us to file registration statements for the public resale of such stockholders’ common stock.

Such sales by such stockholder could be significant.

Such sales by such stockholders could be significant.

If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our share price and trading volume may decline.

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If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our share price or trading volume to decline.

We could be subject to securities class action litigation.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted.

A securities class action suit against us could result in substantial costs, potential liabilities and the diversion of management’s attention and resources.

We do not intend to pay cash dividends for the foreseeable future.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors