What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-16 compared with 2025-02-27 · 214 added, 203 removed, 457 unchanged (48% of the section changed)

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Unless otherwise indicated, all relevant financial and statistical information included herein relates to our consolidated operations.

Additionally, unless the context indicates otherwise, Ardent Health Partners, Inc.

Additionally, unless the context indicates otherwise, Ardent Health, Inc.

and its affiliates are referred to in this section as “we,” “our,” or “us.”

Forward-Looking Statements

This Annual Report, including the following discussion, contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.

When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business.

In particular, we encourage you to review the risks and uncertainties described in the section titled “Risk Factors” included elsewhere in this Annual Report.

These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this Annual Report or implied by past results and trends.

Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

This Annual Report may contain certain “forward-looking statements,” as that term is defined in the U.S.

This Annual Report, including the following discussion, may contain certain “forward-looking statements,” as that term is defined in the U.S.

federal securities laws.

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Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should” and the negative of these terms or other comparable terminology often identify forward-looking statements.

When reviewing the discussion below, you should keep in mind the risks and uncertainties that could impact our business.

These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including the risk factors and other cautionary statements described under the heading “Risk Factors” included in this Annual Report.

These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this Annual Report or implied by past results and trends.

Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated include, among others:

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

(2) 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;

(3) 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;

(1) 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 on us of the federal government shutdown or other uncertain political, financial, credit and capital conditions;

(2) possible reductions or other changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs or state directed payments, that could have an adverse effect on our revenues and business;

(3) 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;

(4) effects of changes in healthcare policy or legislation, including the One Big Beautiful Bill Act (the "OBBBA") and any other reforms that have or may be undertaken by the current presidential administration, and legal and regulatory restrictions on our hospitals that have physician owners;

(5) the ability to achieve operating and financial targets, develop and execute mitigation plans to offset to the extent possible impacts from the OBBBA, the expiration of temporary enhanced subsidies for individuals eligible to purchase insurance coverage through health insurance marketplaces and imposition of tariffs, attain expected levels of patient volumes and revenues, and control the costs of providing services;

(6) security threats, catastrophic events and other disruptions affecting our, our service providers’ or our joint venture ("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;

(7) the highly competitive nature of the healthcare industry and continued industry trends towards clinical transparency and value-based purchasing may impact our competitive position;

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(17) 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 facilities to close temporarily or permanently;

(15) risks related to the Ventas Master Lease and its restrictions and limitations on our business;

(16) the impact of our significant indebtedness;

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

(18) risks related to the Master Lease with Ventas (“Ventas Master Lease”) and its restrictions and limitations on our business;

(19) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms;

(20) our failure to comply with complex laws and regulations applicable to the healthcare industry or to adjust our operations in response to changing laws and regulations;

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(22) actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements;

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

(24) inability to or delay in building, acquiring, selling, renovating or expanding our healthcare facilities;

(25) failure to comply with federal and state laws relating to Medicare and Medicaid enrollment, permit, licensing and accreditation requirements;

(23) 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;

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

(25) our status as a controlled

(26) the results of our efforts to use technology, including artificial intelligence (“AI”) and machine learning, to drive efficiencies, better outcomes and an enhanced

patient experience;

(27) our status as a controlled company;

(28) conflicts of interest between our controlling stockholder and other holders of our common stock;

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Texas, Oklahoma, New Mexico, New Jersey, Idaho and Kansas.

We deliver care through a system of 30 acute care hospitals and approximately 280 sites of care with 1,847 employed and affiliated providers as of December 31, 2024, an increase of 7.2% compared to December 31, 2023.

We deliver care through a system of 30 acute care hospitals and more than 280 sites of care with over 2,000 employed and affiliated providers as of December 31, 2025, an increase of 9.4% in total providers compared to December 31, 2024.

Affiliated providers are physicians and advanced practice providers with whom we contract for services through a professional services agreement or other independent contractor agreement.

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Recent Developments

Term Loan B Facility Repricing

On September 18, 2024, we executed an amendment to reprice our credit agreement (the "Term Loan B Credit Agreement") for our senior secured term loan facility (the "Term Loan B Facility").

The repricing reduced the applicable interest rate by 50 basis points from Term SOFR (as defined in the Term Loan B Credit Agreement) plus 3.25% to Term SOFR plus 2.75% and from base rate plus 2.25% to base rate plus 1.75%, and it eliminated the credit spread adjustment.

No modifications were made to the maturity of the loans as a result of the repricing and all other terms were substantially unchanged.

Term Loan B Facility Refinancing and Repricing

On September 18, 2025, we executed an amendment to our term loan credit agreement (the “Term Loan B Credit Agreement”) to refinance the outstanding term loans under our senior secured term loan facility (the “Term Loan B Facility”).

The amendment (i) reduced the applicable interest rate by 50 basis points from Term SOFR plus 2.75% to Term SOFR plus 2.25% and from the base rate plus 1.75% to the base rate plus 1.25%, (ii) extended the maturity date to September 18, 2032 and (iii) increased the baskets for certain fixed dollar negative covenants and (iv) reestablished principal payments under the amended Term Loan B Facility, which are due in consecutive equal quarterly installments of 0.25% of the refinanced $777.5 million principal amount beginning on December 31, 2025 (subject to certain reductions from time to time as a result of the application of prepayments), with the remaining balance due upon the new maturity date in September 2032.

All other terms of the Term Loan B Credit Agreement were substantially unchanged.

On September 18, 2024, we executed an amendment to reprice our Term Loan B Credit Agreement.

The repricing reduced the applicable interest rate by 50 basis points from Term SOFR plus 3.25% to Term SOFR plus 2.75% and from base rate plus 2.25% to base rate plus 1.75%, and it eliminated the credit spread adjustment.

No modifications were made to the maturity of the loans as a result of the repricing and all other terms of the Term Loan B Credit Agreement were substantially unchanged.

Regulatory Update

On July 4, 2025, Congress passed the OBBBA, its budget reconciliation act for fiscal year 2025.

The OBBBA includes provisions that may impact our financial performance and may substantially modify certain federal statutes and regulations to which our operations are subject.

The OBBBA provisions that may impact us have varying effective dates, and we are unable to predict whether or how future legislation, rulemaking, or judicial action will impact implementation of the OBBBA.

Of particular relevance to us, the OBBBA may reduce the federal government’s overall Medicaid expenditures and tighten Medicaid eligibility requirements.

The law limits eligibility for Medicaid by imposing work or community engagement requirements for adults under 65 years old in Medicaid expansion states, including states with waiver-based expansions, subject to limited exceptions, and requires eligibility redeterminations at least every six months for the Medicaid expansion state population.

State compliance is required by December 31, 2026.

In addition, the OBBBA includes significant changes to Medicaid funding mechanisms by restricting federal matching funds received by state Medicaid programs.

The law prohibits states from establishing new provider assessments or taxes, or increasing the rates of

existing provider assessments, for state fiscal years beginning after October 1, 2026, while also limiting the structure and application of such assessments.

The OBBBA also directs the U.S.

Department of Health and Human Services to revise regulations governing state directed payment (“SDP”) arrangements to cap total payment rates paid by Medicaid managed care organizations for certain services at Medicare payment rates instead of average commercial rates and imposes lower caps in Medicaid expansion states.

The revised regulations apply to SDP arrangements established on or after July 4, 2025 unless the program meets certain grandfathering criteria.

The OBBBA provides that payments under grandfathered programs will be reduced beginning January 1, 2028.

The OBBBA also made significant changes to the U.S.

federal tax law.

Significant tax provisions of the OBBBA that will impact us include (i) the return to the EBITDA formula used to calculate the business interest expense limitation under Internal Revenue Code (“IRC”) Section 163(j) and (ii) the allowance of 100% bonus depreciation for qualifying property placed in service after January 19, 2025.

The provisions of the OBBBA will reduce our current tax liability, but are not expected to have a material impact on our current year tax expense.

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.

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

Related to these budgetary concerns, the OBBBA increases the federal deficit such that the sequestration under the Pay-As-You-Go Act of 2010 is required, which could result in cuts to Medicare reimbursement of up to 4% in early 2026 if Congress does not take action.

In addition to changes made to federal healthcare programs, the OBBBA contains policy changes that are expected to decrease the number of individuals who obtain health insurance from Affordable Care Act (“ACA”) marketplace exchanges.

For example, the OBBBA effectively ends automatic renewals of coverage by requiring pre-enrollment verification of eligibility.

In addition to ending automatic renewals of ACA plans, the OBBBA eliminated federal enhanced subsidies of ACA marketplace exchange-based plans, which is likely to result in significant cost increases for ACA plans.

We also expect these reforms to ACA marketplace exchange-based plans to adversely impact results in 2026, partially offset by our ongoing resiliency and cost reduction initiatives.

Urgent Care Acquisitions

On January 1, 2025, we completed the acquisitions of certain assets and operations of 18 urgent care clinics in New Mexico and Oklahoma for a combined purchase price of $27.5 million.

The consideration transferred on December 31, 2024, consisted solely of cash.

Upon closing of the acquisitions, approximately $4.1 million was placed into escrow to cover potential working capital adjustments and to secure certain indemnification obligations pursuant to the terms of the purchase agreements.

This escrow amount is included in the total purchase consideration of $27.5 million.

Most of the combined purchase price for assets and operations acquired was recorded as goodwill with an immaterial portion allocated to identifiable assets acquired and liabilities assumed.

As of December 31, 2025, the fair values of assets and liabilities recorded related to these acquisitions were finalized and the measurement period was closed.

Initial Public Offering and Corporate Conversion

On July 19, 2024, we completed an IPO of 12,000,000 shares of our common stock, at a public offering price of $16.00 per share for aggregate gross proceeds of $192.0 million and net proceeds of approximately $181.4 million after deducting underwriting discounts and commissions of approximately $10.6 million.

On July 19, 2024, we completed an IPO of 12,000,000 shares of our common stock, at a public offering price of $16.00 per share (the “IPO”) for aggregate gross proceeds of $192.0 million and net proceeds of approximately $181.4 million after deducting underwriting discounts and commissions of approximately $10.6 million.

The IPO provided the underwriters with an option to purchase up to an additional 1,800,000 shares of our common stock, which was fully exercised by the underwriters, and, on July 30, 2024, we issued 1,800,000 additional shares of common stock at $16.00 per share for additional net proceeds of approximately $27.2 million, after deducting underwriting discounts and commissions of approximately $1.6 million.

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As a result of the Corporate Conversion, the outstanding limited liability company membership units and vested profits interest units were converted into 120,937,099 shares of common stock and outstanding unvested profits interest units were converted into 2,848,027 shares of restricted common stock.

Immediately following

the Corporate Conversion, ALH Holdings, LLC, a subsidiary of Ventas, Inc.

Immediately following the Corporate Conversion, ALH Holdings, LLC, a subsidiary of Ventas, Inc.

(“Ventas”), contributed all of its outstanding common stock in AHP Health Partners, Inc.

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On June 26, 2024, we executed an amendment to the credit agreement for our $225.0 million senior secured asset based revolving credit facility (the “ABL Credit Agreement”) to increase the revolving commitment by $100.0 million to $325.0 million and extend the maturity date to June 26, 2029.

Concurrent with the execution of this amendment on June 26, 2024, we also prepaid $100.0 million of the outstanding principal on our Term Loan B Facility.

Concurrent with the execution of this amendment on June 26, 2024, we also prepaid $100.0 million

of the outstanding principal on our Term Loan B Facility.

The $100.0 million prepayment was applied in direct order of maturities of future payments, and no modification was made to the Term Loan B Facility as a result of this prepayment.

2024 Supplemental Payment Program Updates

On April 1, 2024, the OK DPP became effective, under which hospitals receive directed payments through Oklahoma’s new Medicaid managed care delivery system.

The existing upper payment limit component of Oklahoma’s Supplemental Hospital Offset Payment Program will remain in place for certain categories of Medicaid patients that will continue to be enrolled in Oklahoma’s traditional Medicaid Fee for Service program.

In March 2024, New Mexico’s HDA Act was signed into law and subsequently approved by CMS on November 25, 2024 with an effective period of July 1, 2024 through December 31, 2024.

The HDA Act provides directed payments for hospitals that serve patients in New Mexico’s Medicaid managed care delivery system, resulting in reimbursement near the average commercial rate.

Under the OK DPP and the directed payment program pursuant to the HDA Act, we recognized an aggregate net benefit to pre-tax income of approximately $98.0 million during the year ended December 31, 2024.

Cybersecurity Incident

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

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

On October 4, 2024, we executed a settlement agreement to resolve the consolidated class action litigation.

On October 9, 2024, the Court preliminarily approved the settlement and set the hearing for the Court’s final approval of the settlement for August 1, 2025.

Settlement of the consolidated case on the agreed terms will require us to make cash settlement payments that will not have a material impact on our results of operations, financial position or liquidity.

Business—Cybersecurity Incident" for more information regarding the Cybersecurity Incident.

In November 2023, we determined that a ransomware cybersecurity incident had impacted and disrupted a number of our operational and information technology systems (the “Cybersecurity Incident”).

We continued to experience delays in billing claims and obtaining reimbursements and payments through the first quarter of 2024, and incurred certain expenses related to the Cybersecurity Incident, including expenses to defend claims brought by individuals and other expenses related to the Cybersecurity Incident.

On October 4, 2024, we executed a settlement agreement to resolve the consolidated class action litigation related to the Cybersecurity Incident.

On October 9, 2024, the District Court preliminarily approved the settlement.

Plaintiffs filed a Motion for Final Approval of the Settlement (“Motion for Final Approval”), which we did not oppose.

Following a hearing on the Motion for Final Approval that was conducted on August 1, 2025, the Court ordered class counsel, the settlement administrator and us to implement the agreed upon settlement of the consolidated case.

Pursuant to the settlement, we made settlement payments, the total of which did not have a material impact on our results of operations, financial position or liquidity.

Upon entry of the Final Order, the clerk was ordered to close the case.

Pure Health Equity Investment

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Key Factors Impacting Our Results of Operations

Staffing and Labor Trend

Staffing and Labor

Our operations are dependent on the efforts, abilities and experience of our management and medical support personnel, such as nurses, pharmacists and lab technicians, as well as our physicians.

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In some of our markets, employers across various industries have increased minimum wages, which has created more competition and, in some cases, higher labor costs for this sector of employees.

Supplemental Payments

We receive a significant portion of our revenues from Medicare and Medicaid, and these programs are subject to extensive regulation and frequent changes.

Several states in which we operate utilize Medicaid supplemental payment programs requiring periodic CMS approval to provide funding that is separate from base rates.

These payments help offset shortfalls in Medicaid reimbursement but generally do not cover the full cost of providing care, particularly after considering state and local provider taxes used to fund the non‑federal share of Medicaid spending.

States and federal agencies continue to review and adjust supplemental payment structures, and some states have proposed modifications as part of their annual renewal process with CMS.

Recent federal legislation also introduces new limits on the financing and payment levels for certain programs.

We expect revenue from certain Medicaid supplemental payment programs to decline in 2026 compared to 2025 as program changes take effect.

We typically experience higher patient volumes and revenue in the fourth quarter of each year in our acute care facilities.

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For example, the No Surprises Act prohibits providers from charging patients an amount beyond the in-network cost sharing amount for services rendered by out-of-network providers, subject to limited exceptions.

For services for which balance billing is prohibited, the No Surprises Act includes provisions that may limit the amounts received by out-of-network providers from health plans.

For services for which balance billing is prohibited, the No Surprises Act includes provisions that may limit the amounts received by out-of-network providers from health

Any reduction in the rates that we can charge or amounts we can receive for our services will reduce our total revenue and our operating margins.

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We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenue at the estimated amount expected to be collected.

During the year ended December 31, 2025, a change in accounting estimate resulting from a modification to the technique used to estimate the collectability of accounts receivable and new information provided by recently completed hindsight evaluations of historical collection trends resulted in a decrease in revenue of $42.6 million.

During the third quarter of 2025, we implemented a new revenue accounting system that provided management with additional information to more precisely estimate the collectability of accounts receivable, particularly with respect to more timely consideration of payor denial and payment trends.

The detailed information provided by the new system during the year ended December 31, 2025, along with our recently completed analysis of historical collection trends, indicated our current collection estimate differed from historical collection estimates thereby resulting in a change in accounting estimate in accordance with ASC 250-10, A ccounting Changes and Error Corrections , to be accounted for during the year ended December 31, 2025 (the period of change) and applied prospectively.

Total revenue for the year ended December 31, 2025 increased $358.3 million, or 6.0%, compared to the prior year.

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The increase in adjusted admissions reflected growth in admissions, total surgeries and emergency room visits of 5.3%, 0.2% and 0.2%, respectively.

The increase in net patient service revenue per adjusted admission was attributable to a combination of a favorable payor mix, improved service mix as a result of ongoing service line optimization efforts, and an increase in supplemental funding compared to the prior year.

The increase in net patient service revenue per adjusted admission was primarily attributable to increases in revenue from Medicaid supplemental payment programs and higher reimbursement rates compared to the prior year.

Total revenue for the year ended December 31, 2024 increased $556.6 million, or 10.3%, compared to the prior year.

The increase in total revenue was attributable to an increase in adjusted admissions of 5.0% and an increase in net patient service revenue per adjusted admission of 0.6% compared to the prior year.

Admissions, total surgeries and emergency room visits increased 3.6%, 3.6% and 0.3%, respectively, for the year ended December 31, 2023 compared to the prior year.

The increase in total revenue for the year ended December 31, 2024 consisted of an increase in adjusted admissions of 4.8% and an increase in net patient service revenue per adjusted admission of 5.1%.

The increase in adjusted admissions reflected growth in admissions, total surgeries and emergency room visits of 7.1%, 0.7% and 4.5%, respectively.

During the years ended December 31, 2025 and 2024, we recorded revenue of $707.5 million and $530.3 million, respectively, related to Medicaid supplemental payment programs.

A key competitive strength and a significant component of our growth strategy has been our well-established and differentiated JV model, which has resulted in partnerships with premier academic medical centers, large not-for-profit hospital systems, community physicians, and a community foundation.

During the years ended December 31, 2024, 2023, and 2022, total revenue related to these

JV entities was $1,732.1 million, $1,600.0 million, and $1,468.1 million, respectively, which represented 29.0%, 29.6%, and 28.6%, respectively, of our total revenue for such periods.

During the years ended December 31, 2025, 2024, and 2023, total revenue related to these JV entities was $1,843.1 million, $1,732.1 million, and $1,600.0 million, respectively, which represented 29.1%, 29.0%, and 29.6%, respectively, of our total revenue for such periods.

The following table provides the sources of our total revenue by payor:

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Interest expense 55,202 0.9 % 65,578 1.1 % 74,305 1.4 %

Interest expense, related party — 0.0 % — 0.0 % 9,470 0.2 %

Depreciation and amortization 155,703 2.5 % 146,288 2.5 % 140,842 2.6 %

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Other non-operating gains (23,320) (0.4) % (26,264) (0.4) % (1,613) 0.0 %

Other non-operating gains, related party — 0.0 % — 0.0 % (157,808) (3.1) %

Total operating expenses 6,037,981 95.5 % 5,603,012 93.9 % 5,257,869 97.2 %

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Net income attributable to noncontrolling interests 94,324 1.5 % 89,365 1.5 % 75,073 1.4 %

Net income attributable to Ardent Health Partners, Inc.

Net income attributable to Ardent Health, Inc.

$ 135,811 2.1 % $ 210,343 3.5 % $ 53,904 1.0 %

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This metric includes the managed clinical operations of the hospital at UT Health North Campus in Tyler, Texas (“UT Health North Campus Tyler”), a hospital owned by UTHSCT, an affiliate of The University of Texas System.

Since we only manage the clinical operations of UT Health North Campus Tyler, the financial results of such entity are not consolidated under Ardent Health Partners, Inc.

Since we only manage the clinical operations of UT Health North Campus Tyler, the financial results of such entity are not consolidated under Ardent Health, Inc..

On April 30, 2024, we closed UT Health East Texas Specialty Hospital, a long-term acute care hospital (the “LTAC Hospital”) in Tyler, Texas.

The LTAC Hospital's inventory and fixed assets were transferred or repurposed to be used by our other hospitals.

The LTAC Hospital had 36 licensed patient beds and accounted for approximately $2.6 million, $9.7 million, and $9.2 million of total revenue and a pre-tax loss of $0.4 million, $1.2 million, and $3.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The LTAC Hospital had 36 licensed patient beds and accounted for approximately $2.6 million and $9.7 million of total revenue and a pre-tax loss of $0.4 million and $1.2 million for the years ended December 31, 2024 and 2023, respectively.

(2) “Licensed beds (at period end).” This metric represents the total number of beds for which the appropriate state agency licenses a facility, regardless of whether the beds are actually available for patient use.

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The increase in adjusted admissions reflected growth in admissions, total surgeries and emergency room visits of 5.3%, 0.2% and 0.2%, respectively.

The increase in net patient service revenue per adjusted

admission was attributable to a combination of a favorable payor mix, improved service mix as a result of ongoing service line optimization efforts, and an increase in supplemental funding compared to the prior year.

Total operating expenses increased $345.1 million for the year ended December 31, 2024 compared to the prior year due to higher patient volumes but decreased 3.3% as a percentage of total revenue.

The decrease in total operating expenses, as a percentage of total revenue, was driven by decreases in salaries and benefits and supplies, as percentages of total revenue, compared to the prior year.

The decrease in salaries and benefits, as a percentage of total revenue, was primarily due to a decrease in contract labor expense of $28.2 million during the year ended December 31, 2024 compared to the prior year.

The decrease in supplies expense, as a percentage of total revenue, was driven by ongoing service line optimization efforts and execution on various supply chain cost reduction initiatives during the year ended December 31, 2024.

Total operating expenses increased $435.0 million, and increased 1.6% as a percentage of total revenue, for the year ended December 31, 2025 compared to the prior year.

The increase in total operating expenses, as a percentage of total revenue, was primarily driven

by an increase in professional and general liability losses.

During the year ended December 31, 2025, we recorded losses of $51.3 million related to the emergence of adverse prior period claim developments, particularly with respect to our New Mexico market, combined with increased social inflationary pressures as described further in Note 11, Self-Insured Liabilities, to our consolidated financial statements included within this Annual Report.

The increase in total operating expenses, as a percentage of total revenue, was also impacted by increased provider assessments related to Medicaid supplemental payment programs for the year ended December 31, 2025 compared to the prior year.

Comparison of the Years Ended December 31, 2025 and 2024

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The increase in adjusted admissions reflected growth in admissions, total surgeries and emergency room visits of 5.3%, 0.2% and 0.2%, respectively.

Salaries and benefits — Salaries and benefits, as a percentage of total revenue, were 42.0% for the year ended December 31, 2025 compared to 42.5% for the prior year.

The decrease in salaries and benefits, as a percentage of total revenue, was primarily attributable to a decrease in contract labor expense of $28.2 million as a result of a combination of reduced contract labor rates and lower utilization, driven by ongoing recruiting and retention initiatives.

Total contract labor expenses, as a percentage of total salaries and benefits, were 4.0% and 5.5% for the years ended December 31, 2024 and 2023, respectively.

The decrease in salaries and benefits, as a percentage of total revenue, was primarily attributable to an increase in revenue from Medicaid supplemental payment programs revenue compared to the prior year.

Professional fees — Professional fees, as a percentage of total revenue, were 18.9% for the year ended December 31, 2025 compared to 18.4% for the prior year.

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Supplies — Supplies, as a percentage of total revenue, were 17.1% for the year ended December 31, 2025 compared to 17.3% for the prior year.

The decrease in supplies expense, as a percentage of total revenue, was attributable to ongoing service line optimization efforts and execution on various supply chain cost reduction initiatives, including improved inventory management, standardized surgical supply procurement and strategic sourcing.

Rents and leases — Rents and leases were $109.6 million and $103.6 million for the years ended December 31, 2025 and 2024, respectively.

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Other operating expenses — Other operating expenses, as a percentage of total revenue, were 10.3% for the year ended December 31, 2025 compared to 8.2% for the prior year.

Government stimulus income — During the year ended December 31, 2024, we did not recognize any government stimulus income.

Government stimulus income was $8.5 million for the year ended December 31, 2023.

Other operating expenses are comprised primarily of repairs and maintenance, utilities, insurance (including professional liability insurance) and provider assessments.

The increase in other operating expenses, as a percentage of total revenue, was primarily attributable to an increase in professional and general liability losses.

Other operating expenses, as a percentage of total revenue, was further impacted by increased provider assessments related to Medicaid supplemental payment programs for the year ended December 31, 2025 compared to the prior year.

Interest expense — Interest expense was $55.2 million and $65.6 million for the years ended December 31, 2025 and 2024, respectively.

Loss on extinguishment and modification of debt — On June 26, 2024, we executed an amendment to our ABL Credit Agreement and prepaid $100.0 million of the outstanding principal on our Term Loan B Facility.

Additionally, on September 18, 2024, we executed an amendment to our Term Loan B Credit Agreement.

In connection with these transactions, we incurred a loss on the debt extinguishment of $1.8 million related to the write-off of existing deferred financing costs and original issue discounts and transaction costs of $1.2 million related to the modification of debt during the year ended December 31, 2024.

On June 26, 2024, we executed an amendment to our ABL Credit Agreement and prepaid $100.0 million of the outstanding principal on our Term Loan B Facility.

The decrease in interest expense was attributable to the reduction in average outstanding principal of our Term Loan B Facility during the year ended December 31, 2025 compared to the prior year.

Loss on extinguishment and modification of debt — During the year ended December 31, 2025, we incurred a loss on debt extinguishment $0.5 million related to the write-off of existing deferred financing costs and original issue discounts and transaction costs of $6.8 million related to the modification of debt associated with the refinancing of our Term Loan B Credit Agreement on September 18, 2025.

During the year ended December 31, 2024, we completed a repricing of our Term Loan B Credit Agreement, executed an amendment to our ABL Credit Agreement and prepaid $100.0 million of the outstanding principal on our Term Loan B Facility.

In connection with these 2024 transactions, we incurred a loss on debt extinguishment of $1.8 million related to the write-off of existing deferred financing costs and original issue discounts and transaction costs of $1.2 million related to the modification of debt during the year ended December 31, 2024.

Other non-operating gains — Other non-operating gains were $23.3 million and $26.3 million for the years ended December 31, 2025 and 2024, respectively.

The increase in other non-operating gains was primarily the result of the recognition of a gain on insurance recovery proceeds of $19.4 million during the year ended December 31, 2024 related to the Cybersecurity Incident.

Other non-operating gains were primarily the result of the recognition of a gain on insurance recovery proceeds of $21.5 million and $19.4 million during the years ended December 31, 2025 and 2024, respectively, related to the Cybersecurity Incident.

Income tax expense — We recorded income tax expense of $56.2 million, which equates to an effective tax rate of 19.6%, for the year ended December 31, 2025 compared to income tax expense of $63.4 million, which equates to an effective tax rate of 17.4%, for the prior year.

The increase in income tax expense was primarily driven by an increase in income before income taxes attributable to Ardent Health Partners, Inc., which resulted in an increase in taxes at the federal statutory rate during the year ended December 31, 2024 compared to the prior year.

The effective tax rate was further impacted by a decrease in the percentage of pre-tax income attributable to noncontrolling interests during the year ended December 31, 2024.

Net income attributable to noncontrolling interests — Net income attributable to noncontrolling interests of $89.4 million for the year ended December 31, 2024 compared to $75.1 million for the prior year consisted primarily of $85.3 million and $57.5 million of net income attributable to minority partners’ interests in hospitals and ambulatory services that are owned and operated through limited liability companies and consolidated by us for the years ended December 31, 2024 and 2023, respectively.

The decrease in income tax expense was primarily driven by a decrease in income before income taxes, which resulted in a decrease in taxes at the federal statutory rate during the year ended December 31, 2025 compared to the prior year.

The increase in the

effective tax rate was primarily driven by an increase in noncontrolling interest earnings as a percentage of pre-tax income during the year ended December 31, 2025.

Net income attributable to noncontrolling interests — Net income attributable to noncontrolling interests was $94.3 million for the year ended December 31, 2025 compared to $89.4 million for the prior year.

This net income consisted primarily of $94.3 million and $85.3 million of net income attributable to minority partners’ interests in hospitals and ambulatory services that are owned and operated through limited liability companies and consolidated by us for the years ended December 31, 2025 and 2024, respectively.

Income from operations before income taxes related to these limited liability companies was $296.5 million and $285.6 million for the years ended December 31, 2025 and 2024, respectively.

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Comparison of the Years Ended December 31, 2024 and 2023

Total revenue — Total revenue for the year ended December 31, 2023 increased $279.8 million, or 5.5%, compared to the prior year.

The increase in total revenue for the year ended December 31, 2023 consisted of an increase in adjusted admissions of 5.0% as well as an increase in net patient service revenue per adjusted admission of 0.6% compared to the prior year.

Total revenue for the year ended December 31, 2023 also benefited from an increase in funding from supplemental government payment programs compared to the prior period.

Specifically, the amount of revenue recognized during the year related to the Texas Waiver Program was $208.0 million compared to $172.1 million during the prior year.

Salaries and benefits — Salaries and benefits, as a percentage of total revenue, were 44.1% for the year ended December 31, 2023 compared to 47.0% for the prior year.

The decrease in salaries and benefits, as a percentage of total revenue, was driven by the transition to an outsourced model in our end-to-end revenue cycle management process in July 2022 and our dietary and environmental services in November 2022 at substantially all of our facilities.

These transitions resulted in the shift of cost associated with such services from salaries and benefits to professional fees in our consolidated income statement.

The change in salaries and benefits, as a percentage of total revenue, was also driven by a decrease in contract labor expense of $86.7 million was primarily the result of reduced contract labor rates.

Contract labor expense also decreased as a result of reduced utilization, which was driven by ongoing recruiting and retention initiatives and reduced demand for supplemental staffing during the year ended December 31, 2023.

Total contract labor expenses, as a percentage of total salaries, benefits and contract labor expenses were 5.5% and 9.0% for the years ended December 31, 2023 and 2022, respectively.

Professional fees — Professional fees, as a percentage of total revenue, were 18.1% for the year ended December 31, 2023 compared to 14.4% for the prior year.

The increase in professional fees, as a percentage of total revenue, was primarily the result of the outsourcing of our end-to-end revenue cycle management process in July 2022 and our dietary and environmental services in November 2022 at substantially all of our facilities.

The transitions resulted in the shift of expenses associated with such services from salaries and benefits to professional fees in the consolidated income statement.

Professional fees, as a percentage of total revenue, were also impacted by increased cost for hospital-based care providers due to higher patient volumes and rising physician-related expenses.

Supplies — Supplies, as a percentage of total revenue, were 18.4% for the year ended December 31, 2023 compared to 18.6% for the prior year.

Rents and leases — Rents and leases were $97.4 million and $93.0 million for the years ended December 31, 2023 and 2022, respectively.

Rents and leases, related party — Rents and leases, related party, consists lease expense related to the Ventas Master Lease, under which we lease 10 of our hospitals, and other lease agreements with Ventas for certain medical office buildings.

Rents and leases, related party were $145.9 million and $130.7 million for the years ended December 31, 2023 and 2022, respectively.

Other operating expenses — Other operating expenses, as a percentage of total revenue, were 8.3% for the year ended December 31, 2023 compared to 9.1% for the prior year.

The decrease in other operating expenses, as a percentage of total revenue, was driven primarily by lower cost related to our self-insured professional and general liability insurance.

During the year ended December 31, 2022, we recorded an adjustment of $40.1 million to our estimated liability reserve for unfavorable developments associated with prior year claims.

During the year ended December 31, 2023, we did not record an additional adjustment for our estimated liability reserve.

The decrease in other operating expenses, as a percentage of total revenue was offset by an increase in provider tax assessments for supplemental Medicare and Medicaid programs during the year ended December 31, 2023 compared to the prior year.

Government stimulus income — Government stimulus income was $8.5 million and $16.8 million for the years ended December 31, 2023 and 2022, respectively.

Interest expense — Interest expense was $74.3 million and $72.6 million for the years ended December 31, 2023 and 2022, respectively.

Interest expense, related party — During the year ended December 31, 2023, we did not recognize any related party interest expense.

Interest expense, related party was $9.5 million for the year ended December 31, 2022.

During the year ended December 31, 2022, interest expense, related party consisted of the interest portion of lease payments to Ventas associated with the MOB Transactions.

For additional information regarding the MOB Transactions, refer to Note 5, "Leases" to our consolidated financial statements.

Other non-operating gains — Other non-operating gains were $1.6 million and $18.7 million for the years ended December 31, 2023 and 2022, respectively.

Other non-operating gains, related party — During the year ended December 31, 2022, we recognized a gain of $157.8 million associated with the MOB Transactions.

See Note 5, "Leases" to our consolidated financial statements for additional information regarding the MOB Transactions.

Income tax expense — We recorded income tax expense of $22.6 million, which equates to an effective tax rate of 14.9%, for the year ended December 31, 2023 compared to income tax expense of $46.1 million, which equates to an effective tax rate of 14.8%, for the prior year.

The decrease in income tax expense was primarily driven by an decrease in income before income taxes attributable to Ardent Health Partners, Inc., resulting in a $33.6 million decrease in taxes at the federal statutory rate which was partially offset by a change in the valuation allowance of $13.6 million during the year ended December 31, 2023 compared to the prior year.

Net income attributable to noncontrolling interests — Net income attributable to noncontrolling interests of $75.1 million for the year ended December 31, 2023 compared to $76.5 million for the prior year consisted primarily of $57.5 million and $56.0 million of net income attributable to minority partners’ interests in hospitals and ambulatory services that are owned and operated though limited liability companies and consolidated by us for the year ended December 31, 2023 and 2022, respectively.

Income from operations before income taxes related to these limited liability companies was $243.7 million and $218.2 million for the year ended December 31, 2023 and 2022, respectively.

The remaining portion of net income attributable to noncontrolling interests consists of net income attributable to ALH Holdings, LLC’s minority interest in AHP Health Partners, our direct subsidiary.

During the year ended December 31, 2023, net income attributable to ALH Holdings, LLC was impacted by a change in ALH Holding, LLC’s noncontrolling equity interest.

For a discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, see “Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 27, 2025 and is incorporated by reference herein.

Supplemental Non-GAAP Information

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Performance Measure

• “Adjusted EBITDA” is defined as net income plus (i) provision for income taxes, (ii) interest expense and (iii) depreciation and amortization expense (or EBITDA), as adjusted to deduct noncontrolling interest earnings, and excludes the effects of losses on the extinguishment and modification of debt;

certain legal matters and related costs;

other non-operating losses (gains);

other non-operating (gains) losses;

Cybersecurity Incident recoveries, net of incremental information technology and litigation costs;

certain legal matters and related costs;

restructuring, exit and acquisition-related costs;

expenses incurred in connection with the implementation of Epic Systems (“Epic”), our integrated health information technology system, equity-based compensation expense, and loss (income) from disposed operations.

change in accounting estimate;

New Mexico professional liability accrual;

expenses incurred in connection with the implementation of our integrated health information technology system provided by Epic Systems;

equity-based compensation expense;

and loss (income) from disposed operations.

See “Supplemental Non-GAAP Performance Measure.”

Valuation Measure

• “Adjusted EBITDAR” is defined as Adjusted EBITDA further adjusted to add back rent expense payable to real estate investment trusts ("REITs"), which consists of rent expense pursuant to the Ventas Master Lease, lease agreements associated with the MOB Transactions and a lease arrangement with MPT for Hackensack Meridian Mountainside Medical Center.

• “Adjusted EBITDAR” is defined as Adjusted EBITDA further adjusted to add back rent expense payable to real estate investment trusts (“REITs”), which consists of rent expense pursuant to the Ventas Master Lease, lease agreements with Ventas for 18 medical office buildings and a lease arrangement with Medical Properties Trust, Inc.

(“MPT”) for Hackensack Meridian Mountainside Medical Center.

See “Supplemental Non-GAAP Valuation Measure.”

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Adjusted EBITDA is a non-GAAP performance measure used by our management and external users of our financial statements, such as investors, analysts, lenders, rating agencies and other interested parties, to evaluate companies in our industry.

Adjusted EBITDA is a performance measure that is not defined under GAAP and is presented in this Annual Report because our management considers it an important analytical indicator that is commonly used within the healthcare industry to evaluate financial performance and allocate resources.

Adjusted EBITDA is a performance measure that is not prepared in accordance with GAAP and is presented in this Annual Report because our management considers it an important analytical indicator that is commonly used within the healthcare industry to evaluate financial performance and allocate resources.

Further, our management believes that Adjusted EBITDA is a useful financial metric to assess our operating performance from period to period by excluding certain material non-cash items and unusual or non-recurring items that we do not expect to continue in the future and certain other adjustments we believe are not reflective of our ongoing operations and our performance.

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Loss on extinguishment and modification of debt 7,344 3,388 —

Other non-operating gains (a)

(4,910) (1,613) (18,694)

Other non-operating gains, related party (b)

Other non-operating losses (gains) (a)

1,130 (4,910) (1,613)

Cybersecurity Incident (recoveries) expenses, net (c)

Cybersecurity Incident (recoveries) expenses, net (b)

(22,655) (21,477) 8,495

Certain legal matters and related costs 900 2,000 —

Restructuring, exit and acquisition-related costs (d)

Restructuring, exit and acquisition-related costs (c)

13,276 12,751 13,553

Epic expenses (e)

Change in accounting estimate (d)

New Mexico professional liability accrual (e)

Epic expenses (f)

4,837 3,173 1,781

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$ 545,037 $ 498,473 $ 314,748

(a) Other non-operating gains include gains realized on certain non-recurring events or events that are non-operational in nature, including gains realized on certain asset divestitures during the year ended December 31, 2024 and gains of $1.6 million and $15.3 million during the years ended December 31, 2023 and 2022, respectively, related to FEMA funds and insurance recoveries received for damage caused by Hurricane Michael, which occurred on October 10, 2018 and caused substantial damage to Bay Medical Center Sacred Heart, a hospital previously owned by us.

(b) Other non-operating gains, related party represents the gain recognized from the MOB Transactions during the year ended December 31, 2022.

Refer to Note 5 to our consolidated financial statements for additional information.

(c) Cybersecurity Incident (recoveries) expenses, net represents insurance recovery proceeds associated with the Cybersecurity Incident, net of incremental information technology and litigation costs.

(d) Restructuring, exit and acquisition-related costs represent (i) enterprise restructuring costs, including severance costs related to work force reductions of $10.4 million, $12.4 million, and $13.9 million for the years ended December 31, 2024, 2023, and 2022, respectively, (ii) penalties and costs incurred for terminating pre-existing contracts at acquired facilities of $0.8 million, $0.7 million, and $0.9 million for the years ended December 31, 2024, 2023, and 2022, respectively, and (iii) third party professional fees and expenses, salaries and benefits, and other internal expenses incurred in connection with potential and completed acquisitions of $1.6 million, $0.5 million, and $0.9 million for the years ended December 31, 2024, 2023, and 2022, respectively.

(e) Epic expenses consist of various costs incurred in connection with the implementation of Epic, our health information technology system.

These costs included professional fees of $3.1 million, $1.8 million, and $1.8 million for the years ended December 31, 2024, 2023, and 2022, respectively, and salaries and benefits of $0.1 million for the year ended December 31, 2024, and other expenses related to one-time training and onboarding support costs of $0.1 million for the year ended December 31, 2022.

Epic expenses do not include the ongoing costs of the Epic system.

(a) Other non-operating losses (gains) include losses and gains realized on certain non-recurring events or events that are non-operational in nature.

(b) Cybersecurity Incident (recoveries) expenses, net represent insurance recovery proceeds associated with the Cybersecurity Incident, net of incremental information technology and litigation costs.

(c) Restructuring, exit and acquisition-related costs represent (i) enterprise restructuring costs, including severance costs related to work force reductions of $10.3 million, $10.4 million, and $12.4 million for the years ended December 31, 2025, 2024, and 2023, respectively, (ii) penalties and costs incurred for terminating pre-existing contracts at acquired facilities of $1.2 million, $0.8 million, and $0.7 million for the years ended December 31, 2025, 2024, and 2023, respectively, and (iii) third party professional fees and expenses, salaries and benefits, and other internal expenses incurred in connection with potential and completed acquisitions of $1.8 million, $1.6 million, and $0.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(d) Change in accounting estimate reflects the reduction in total revenue of $42.6 million and its $0.7 million impact on noncontrolling interest earnings as a result of a change in our accounting estimate of the collectability of accounts receivable as described further in Note 2, Summary of Significant Accounting Policies, to our accompanying consolidated financial statements included elsewhere in this Annual Report.

(e) During the year ended December 31, 2025, we recorded net losses of $51.3 million related to the emergence of adverse prior period claim developments, particularly with respect to our New Mexico market, combined with increased social inflationary pressures.

These losses included $54.5 million of losses recorded during the third quarter of 2025 for adverse prior-period claim developments in New Mexico that were primarily attributable to recent claim settlements and ongoing litigation arising from the actions of a single provider who was employed between 2019 and 2022 as described further in Note 11, Self-Insured Liabilities, to our accompanying consolidated financial statements included elsewhere in this Annual Report.

(f) Epic expenses consist of various costs incurred in connection with the implementation of Epic, our health information technology system.

These costs included (i) professional fees of $2.1 million, $3.1 million, and $1.8 million for the years ended December 31, 2025, 2024, and 2023, respectively, (ii) salaries and benefits of $2.6 million and $0.1 million for the years ended December 31, 2025 and 2024, respectively, and (iii) other expenses related to one-time training and onboarding support costs of $0.1 million for the year ended December 31, 2025.

Epic expenses do not include ongoing operating costs of the Epic system.

Liquidity and Capital Resources

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In June 2024, we amended the ABL Credit Agreement to increase commitments available thereunder by $100.0 million and extended its maturity date to June 26, 2029.

See "Senior Secured Credit Facilities" for additional information.

At December 31, 2024, our net leverage ratio, as calculated under our ABL Credit Agreement and Term Loan B Credit Agreement, was 1.2x, and our lease-adjusted net leverage ratio was 2.9x.

See “Senior Secured Credit Facilities” below for additional information.

At December 31, 2025, our net leverage ratio was 0.8x and our lease-adjusted net leverage ratio was 2.5x.

Our lease-adjusted net leverage is calculated as net debt as of December 31, 2025, plus 8.0x trailing twelve month REIT rent expense as of the end of the fourth quarter of 2025, divided by the trailing twelve month Adjusted EBITDAR as of December 31, 2025.

During the years ended December 31, 2023 and 2022, we received and recognized $8.5 million and $49.9 million, respectively, of cash distributions from the Public Health and Social Services Emergency Fund (“Provider Relief Fund”), a provision of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and other state and local programs.

For additional information regarding distributions from the Provider Relief Fund and the CARES Act, refer to Note 2 to our consolidated financial statements for the year ended December 31, 2024.

During the year ended December 31, 2023, we received and recognized $8.5 million of cash distributions from the Public Health and Social Services Emergency Fund (“Provider Relief Fund”), a provision of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and other state and local programs.

For additional information regarding distributions from the Provider Relief Fund and the CARES Act, refer to Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements included within this Annual Report.

The following table summarizes certain elements of the statements of cash flows (in thousands):

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2025 2024 2023

Net cash provided by (used in) operating activities $ 315,026 $ 221,698 $ (38,359)

Net cash (used in) provided by investing activities (220,460) (137,983) 46,578

Net cash provided by (used in) financing activities 24,642 (102,262) (270,331)

Net cash provided by operating activities $ 470,510 $ 315,026 $ 221,698

Net cash used in investing activities (214,229) (220,460) (137,983)

Net cash (used in) provided by financing activities (103,465) 24,642 (102,262)

Operating Activities

Cash flows provided by operating activities for the year ended December 31, 2025 totaled $470.5 million compared to $315.0 million for the prior year.

The increase in operating cash flows during the year ended December 31, 2025 was primarily attributable to changes in net working capital, which primarily consisted of increases in accounts payable driven by the timing of standard payments and strategic cash management practices.

Cash flows provided by operating activities for the year ended December 31, 2024 totaled $315.0 million compared to $221.7 million for the prior year.

The increase in operating cash flows during the year ended December 31, 2024 was primarily attributable to an increase in net income of $170.7 million.

The increase in cash flows during the year ended December 31, 2024 compared to the prior year was offset by changes in net working capital, which primarily consisted of increases in other receivables related to New Mexico’s supplemental payment program that was approved by CMS in the fourth quarter of 2024.

Cash flows provided by operating activities for the year ended December 31, 2023 totaled $221.7 million compared to cash flows used in operating activities of $38.4 million for the prior year.

The increase in cash flows was primarily attributable to repayment of $315.9 million of accelerated Medicare payments during the year ended December 31, 2022.

As of December 31, 2022, all accelerated Medicare payments had been repaid.

During the years ended December 31, 2023 and 2022, operating cash flows reflected cash distributions of $8.5 million and $49.9 million, respectively, from the Provider Relief Fund and other state and local programs.

Additionally, operating cash flow activity during the year ended December 31, 2022 included a payment of $29.7 million of employer Social Security payroll taxes incurred between March 27, 2020 and December 31, 2020, for which payment was deferred under the CARES Act.

The increase in cash flows during the year ended December 31, 2023 compared to the prior year was further impacted by changes in net working capital, particularly accounts receivable, due to temporary billing holds while systems were taken offline as a result of the Cybersecurity Incident.

The reduction in operating cash flows from billing delays was partially offset by increases in

accounts payable and other accrued expenses and liabilities, which were also impacted by reduced functionality during system downtime following the Cybersecurity Incident.

The increase in cash flows during the year ended December 31, 2024 compared to the prior year was offset by changes in net working capital, which primarily consisted of increases in other receivables related to New Mexico’s Medicaid supplemental payment program that was approved by CMS in the fourth quarter of 2024.

Investing Activities

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Capital expenditures for non-acquisitions were $211.9 million and $187.5 million for the years ended December 31, 2025 and 2024, respectively.

Cash flows used in investing activities for the year ended December 31, 2023 totaled $138.0 million compared to cash flows provided by investing activities of $46.6 million for the prior year.

Cash flows provided by investing activities for the year ended December 31, 2022 included net proceeds from related party divestitures of $202.1 million related to the MOB Transactions.

Cash flows used in investing activities for the year ended December 31, 2024 totaled $220.5 million compared to $138.0 million for the prior year.

Capital expenditures for non-acquisitions were $187.5 million and $137.4 million for the years ended December 31, 2024 and 2023, respectively.

Financing Activities

Cash flows used in financing activities for the year ended December 31, 2025 totaled $103.5 million compared to cash flows provided by financing activities of $24.6 million for the prior year.

Cash flows used in financing activities for the year ended December 31, 2025 included distributions paid to noncontrolling interests of $88.2 million, payments of principal on long-term debt of $8.0 million, payments of principal on insurance financing arrangements of $15.0 million, and payments of debt issuance cost of $2.6 million, which were partially offset by proceeds from insurance financing arrangements of $15.6 million.

Cash flows provided by financing activities for the year ended December 31, 2024 totaled $24.6 million compared to cash flows used in financing activities of $102.3 million for the prior year.

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Cash flows provided by financing activities for the year ended December 31, 2024 were partially offset by distributions paid to noncontrolling interests of $72.9 million.

Cash flows used in financing activities for the year ended December 31, 2023 totaled $102.3 million compared to $270.3 million for the prior year.

Cash flows used in financing activities for the year ended December 31, 2023 included distributions paid to noncontrolling interests of $63.9 million, redemption of equity attributable to non-controlling interest of $26.0 million, payments of principal on long-term debt of $13.6 million, and payments of principal on insurance financing arrangements of $22.9 million, which were partially offset by proceeds from insurance financing arrangements of $24.7 million.

Cash flows used in financing activities for the year ended December 31, 2022 included distributions paid to noncontrolling interests of $69.4 million, distributions paid to common unit holders of $174.8 million, and payments of principal on long-term debt of $17.3 million.

Capital Expenditures

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The Ventas Master Lease includes a number of significant operating and financial restrictions, including requirements that we maintain a minimum portfolio coverage ratio of 2.2x and a guarantor fixed charge coverage ratio of 1.2x and do not exceed a guarantor net leverage ratio of 6.75x.

In addition, the Relative Rights Agreement entered into by and among Ventas, the 5.75% Senior Notes trustee and the administrative agents under our Senior Secured Credit Facilities (as defined below) in connection with the series of debt transactions completed during the year ended 2021 to refinance our then-existing debt, among other things, (i) sets forth the relative rights of Ventas and the administrative agents with respect to the properties and collateral related to the Ventas Master Lease and securing our Senior Secured Credit Facilities, (ii) caps the amount of indebtedness incurred or guaranteed by our subsidiaries that are tenants under the Ventas Master Lease ("Tenants") (together with such Tenants’ guarantees of the notes and the Senior Secured

Credit Facilities and all other indebtedness incurred or guaranteed by such Tenants) at $375.0 million and (iii) imposes certain incurrence tests on the incurrence of additional indebtedness by such Tenants and by us.

In addition, the Relative Rights Agreement entered into by and among Ventas, the 5.75% Senior Notes trustee and the administrative agents under our Senior Secured Credit Facilities (as defined below) in connection with the series of debt transactions completed during the year ended 2021 to refinance our then-existing debt, among other things, (i) sets forth the relative rights of Ventas and the administrative agents with respect to the properties and collateral related to the Ventas Master Lease and securing our Senior Secured Credit Facilities, (ii) caps the amount of indebtedness incurred or guaranteed by our subsidiaries that are tenants under the Ventas Master Lease (“Tenants”) (together with such Tenants’ guarantees of the notes and the Senior Secured Credit Facilities and all other indebtedness incurred or guaranteed by such Tenants) at $375.0 million and (iii) imposes certain incurrence tests on the incurrence of additional indebtedness by such Tenants and by us.

We recorded rent expense of $152.9 million, $149.2 million, and $145.9 million for the years ended December 31, 2025, 2024, and 2023, respectively, related to the Ventas Master Lease and other lease agreements with Ventas for certain medical office buildings.

Senior Secured Credit Facilities

Effective July 8, 2021, we entered into the ABL Credit Agreement, which was amended most recently on June 26, 2024.

The ABL Credit Agreement (as so amended) consists of a $325.0 million senior secured asset-based revolving credit facility with a five year maturity, comprised of (i) a $275.0 million non-UT Health East Texas borrowers tranche (the “non-UT Health East Texas ABL Facility”) and (ii) a $50.0 million UT Health East Texas borrowers tranche available to our AHS East Texas Health System, LLC subsidiary and certain of its subsidiaries (the “UT Health East Texas ABL Facility” and, together with the non-UT Health East Texas ABL Facility, the “ABL Facilities”), each subject to a borrowing base.

The ABL Facilities mature on June 26, 2029.

Effective August 24, 2021, we entered into the Term Loan B Facility.

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no modification was made to the Term Loan B Credit Agreement as a result of this prepayment.

Effective July 19, 2024, pursuant to the terms of the Term Loan B Credit Agreement and as a result of the IPO, the applicable margin was automatically reduced by 25 basis points to 3.25% over Term SOFR and 2.25% over base rate.

On September 18, 2024, we executed an amendment to reprice our Term Loan B Credit Agreement.

No modifications were made to the maturity of the loans as a result of the repricing and all other terms were substantially unchanged.

The repricing reduced the applicable interest rate by 50 basis points from Term SOFR plus 3.25% to Term SOFR plus 2.75% and from the base rate plus 2.25% to the base rate plus 1.75%, and it eliminated the credit spread adjustment.

No modifications were made to the maturity of the loans as a result of the repricing, and all other terms of the Term Loan B Credit Agreement were substantially unchanged.

On September 18, 2025, we executed an amendment to refinance the outstanding term loans under our Term Loan B Credit Agreement.

The amendment (i) reduced the applicable interest rate by 50 basis points from Term SOFR plus 2.75% to Term SOFR plus 2.25%

and from the base rate plus 1.75% to the base rate plus 1.25%, (ii) extended the maturity date to September 18, 2032, (iii) increased the baskets for certain fixed dollar negative covenants and (iv) reestablished principal payments under the amended Term Loan B Facility, which are due in consecutive equal quarterly installments of 0.25% of the refinanced $777.5 million principal amount beginning on December 31, 2025 (subject to certain reductions from time to time as a result of the application of prepayments), with the remaining balance due upon the new maturity date in September 2032.

Effective July 8, 2021, we entered into the ABL Credit Agreement, which was amended to extend the maturity and increase the revolving commitment on June 26, 2024.

The ABL Facilities mature on June 26, 2029.

On September 18, 2025, we further amended the ABL Credit Agreement to align its covenants to those in the amended Term Loan B Credit Agreement.

We refer to the Term Loan B Facility and the ABL Facilities collectively herein as the “Senior Secured Credit Facilities.”

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dollar loans, and (c) Term SOFR applicable for an interest period of one month (not to be less than 0.50% per annum), plus 1.00% per annum, in each case, plus an applicable margin, or (ii) Term SOFR (not to be less than 0.50% per annum) for the interest period selected, in each case, plus an applicable margin.

The applicable margins are as follows:

• under the Term Loan B Credit Agreement, the applicable margin was equal to 2.50% for base rate borrowings and 3.50% for Term SOFR borrowings;

• effective July 19, 2024, pursuant to the terms of the Term Loan B Credit Agreement and as a result of the IPO, the applicable margin was automatically reduced to 2.25% for base rate borrowings and 3.25% for Term SOFR borrowings;

• effective September 18, 2024, we completed a repricing of our Term Loan B Credit Agreement, upon which the applicable margin was reduced to 1.75% for base rate borrowings and 2.75% for Term SOFR borrowings.

Quarterly installment payments under the Term Loan B Facility are no longer required as a result of our $100.0 million payment of principal on June 26, 2024, and the remaining principal balance is due upon maturity.

The current applicable margin under the Term Loan B Credit Agreement is equal to 1.25% for base rate borrowings and 2.25% for Term SOFR borrowings.

As amended and refinanced on September 18, 2025, the Term Loan B Facility requires quarterly installment payments of 0.25% of the refinanced balance of $777.5 million, with the remaining principal balance due upon maturity.

The ABL Facilities do not require installment payments.

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The terms of the 5.75% Senior Notes, which mature on July 15, 2029, are governed by an indenture, dated as of July 8, 2021 (the "2029 Notes Indenture"), among the Issuer, us and certain of the Issuer's wholly-owned domestic subsidiaries, as guarantors, and U.S.

Bank Trust Company, National Association, as trustee.

Bank, National Association, as trustee.

The 2029 Notes Indenture provides that the 5.75% Senior Notes are general senior unsecured obligations of the Issuer, which are unconditionally guaranteed on a senior unsecured basis by us and certain subsidiaries of the Issuer.

The 5.75% Senior Notes bear interest at a rate of 5.75% per annum, payable semi-annually, in cash in arrears, on January 15 and July 15 of each year, commencing on January 15, 2022.

The Issuer had the right to redeem the 5.75% Senior Notes, in whole or in part, at any time prior to July 15, 2024, at a redemption price equal to 100% of the principal amount of the 5.75% Senior Notes, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as set forth in the 2029 Notes Indenture and the 5.75% Senior Notes.

The Issuer may still redeem the 5.75% Senior Notes on and after July 15, 2024, in whole or in part, at any time and from time to time, at the redemption prices set forth below, plus accrued and unpaid interest, if any, to the redemption date, subject to compliance with certain conditions:

The 5.75% Senior Notes bear interest at a rate of 5.75% per annum, which is payable semi-annually, in cash in arrears, on January 15 and July 15 of each year.

The Issuer may redeem the 5.75% Senior Notes, in whole or in part, at any time and from time to time, at the redemption prices set forth below, plus accrued and unpaid interest, if any, to the redemption date, subject to compliance with certain conditions:

Date (if redeemed during the 12 month period beginning on July 15 of the years indicated below)

2025 101.438%

2026 and thereafter 100.000%

At any time prior to July 15, 2024, the Issuer had the right to redeem on one or more occasions up to 40% of the original aggregate principal amount of the 5.75% Senior Notes with the net proceeds of one or more equity offerings, as described in the 2029 Notes Indenture, at a redemption price equal to 105.750% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the aggregate original principal amount of the 5.75% Senior Notes issued under the 2029 Notes Indenture remained outstanding after each such redemption and the redemption occurred within 180 days after the closing of such equity offering.

If the Issuer experiences certain change of control events, the Issuer must offer to repurchase all of the 5.75% Senior Notes (unless otherwise redeemed) at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.

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Adjusted EBITDAR excludes:

(1) certain material noncash items and unusual or non-recurring items that we do not expect to continue in the future;

(1) certain material non-cash items and unusual or non-recurring items that we do not expect to continue in the future;

(2) certain other adjustments that do not impact our enterprise value;

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We operate 30 acute care hospitals, 12 of which we lease from two REITs, Ventas and MPT, pursuant to long-term lease agreements.

Additionally, during 2022, we completed the MOB Transactions.

Our management views the long-term lease agreements with Ventas and MPT, as well as the MOB Transactions, as more like financing arrangements than true operating leases, with the rent payable to such REITs being similar to interest expense.

Additionally, we lease 18 medical office buildings from Ventas pursuant to lease agreements with initial terms of 12 years and eight options to renew for additional five-year terms.

Our management views the long-term lease agreements with Ventas and MPT, as more like financing arrangements than true operating leases, with the rent payable to such REITs being similar to interest expense.

As a result, our capital structure is different than many of our competitors, especially those whose real estate portfolio is predominately owned and not leased.

Excluding the rent payable to such REITs allows investors to compare our enterprise value to those of other healthcare companies without regard to differences in capital structures, leasing arrangements and geographic markets, which can vary significantly among companies.

Our management also uses Adjusted EBITDAR as one measure in determining the value of prospective acquisitions or divestitures.

Our management also uses Adjusted EBITDAR as one measure in determining the value of prospective acquisitions or

divestitures.

Finally, financial covenants in certain of our lease agreements, including the Ventas Master Lease, use Adjusted EBITDAR as a measure of compliance.

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Adjusted EBITDAR has inherent material limitations as a valuation measure, because it adds back certain expenses to net income, resulting in those expenses not being taken into account in the valuation measure.

The payment of taxes and rent is a necessary element of our valuation.

Because Adjusted EBITDAR excludes these and other items, it has material limitations as a measure of our valuation.

The payment rent is a necessary element of our valuation.

Because Adjusted EBITDAR excludes this and other items, it has material limitations as a measure of our valuation.

The following table presents a reconciliation of Adjusted EBITDAR, a valuation measure, to net income, determined in accordance with GAAP:

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Loss on extinguishment and modification of debt — 7,344

Other non-operating gains (a)

(4,702) (4,910)

Other non-operating losses (a)

Cybersecurity Incident recoveries, net (b)

(16,501) (21,477)

Certain legal matters and related costs 900 900

Restructuring, exit and acquisition-related costs (c)

Epic expenses (d)

Change in accounting estimate (d)

New Mexico professional liability accrual (e)

Epic expenses (f)

Equity-based compensation 9,110 39,293

(Income) loss from disposed operations (1,980) 9

Rent expense payable to REITs (e)

Loss from disposed operations 185 207

Rent expense payable to REITs (g)

41,786 164,308

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$ 175,731 $ 709,345

(a) Other non-operating gains include gains realized on certain non-recurring events or events that are non-operational in nature, including gains realized on certain asset divestitures.

(b) Cybersecurity Incident recoveries, net represents insurance recovery proceeds associated with the Cybersecurity Incident, net of incremental information technology and litigation costs.

(c) Restructuring, exit and acquisition-related costs represent (i) enterprise restructuring costs, including severance costs related to work force reductions of $0.3 million and $10.4 million for the three and twelve months ended December 31, 2024, respectively, (ii) penalties and costs incurred for terminating pre-existing contracts at acquired facilities of $0.2 million and $0.8 million for the three and twelve months ended December 31, 2024, respectively, and (iii) third party professional fees and expenses, salaries and benefits, and other internal expenses incurred in connection with potential and completed acquisitions of $0.6 million and $1.6 million for the three and twelve months ended December 31, 2024, respectively.

(d) Epic expenses consist of various costs incurred in connection with the implementation of Epic, our health information technology system.

These costs included professional fees of $1.6 million and $3.1 million for the three and twelve months ended December 31, 2024, respectively, and salaries and benefits of $0.1 million for the three and twelve months ended December 31, 2024.

Epic expenses do not include the ongoing costs of the Epic system.

(e) Rent expense payable to REITs consists of rent expense of $37.8 million and $149.2 million related to the Ventas Master Lease and lease agreements associated with the MOB Transactions with Ventas for the three and twelve months ended December 31, 2024, respectively, and rent expense of $2.8 million and $11.2 million related to a lease arrangement with MPT for the lease of Hackensack Meridian Mountainside Medical Center for the three and twelve months ended December 31, 2024, respectively.

(a) Other non-operating losses include losses realized on certain non-recurring events or events that are non-operational in nature.

(b) Cybersecurity Incident recoveries, net represent insurance recovery proceeds associated with the Cybersecurity Incident, net of incremental information technology and litigation costs.

(c) Restructuring, exit and acquisition-related costs represent (i) enterprise restructuring costs, including severance costs related to work force reductions of $4.3 million and $10.3 million for the three months ended and year ended December 31, 2025, respectively, (ii) penalties and costs incurred for terminating pre-existing contracts at acquired facilities of $0.8 million and $1.2 million for the three months ended and year ended December 31, 2025, respectively, and (iii) third party professional fees and expenses, salaries and benefits, and other internal expenses incurred in connection with potential and completed acquisitions of $0.2 million and $1.8 million for the three months ended and year ended December 31, 2025, respectively.

(f) Epic expenses consist of various costs incurred in connection with the implementation of Epic, our health information technology system.

These costs included (i) professional fees of $0.6 million and $2.1 million for the three months ended and year ended December 31, 2025, respectively, (ii) salaries and benefits of $1.3 million and $2.6 million for the three months ended and year ended December 31, 2025, respectively, and (iii) other

expenses related to one-time training and onboarding support costs of $0.1 million for the year ended December 31, 2025.

Epic expenses do not include ongoing operating costs of the Epic system.

(g) Rent expense payable to REITs for the three months ended and year ended December 31, 2025 consists of rent expense of $38.9 million and $152.9 million, respectively, related to the Ventas Master Lease and other lease agreements with Ventas for medical office buildings and rent expense of $2.9 million and $11.4 million, respectively, related to a lease arrangement with MPT for the lease of Hackensack Meridian Mountainside Medical Center.

Critical Accounting Policies and Estimates

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• Income taxes

See Note 2, "Summary of Significant Accounting Policies," to our consolidated financial statements for information about these critical accounting policies, as well as a description of our other significant accounting policies.

See Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements included within this Annual Report for information about these critical accounting policies, as well as a description of our other significant accounting policies.

Revenue Recognition

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Medicare and Medicaid regulations and various managed care contracts under which estimates of contractual adjustments must be calculated are complex and are subject to interpretation and adjustment.

We estimate contractual adjustments on a payor-specific basis based on our interpretation of the applicable regulations or contract terms and the historical collections of each payor.

We estimate contractual adjustments on a payor-specific basis based on our interpretation of the applicable regulations or contract terms and the historical collection experience of each payor.

However, ultimate reimbursements may result in payments that differ from our estimates.

Additionally, updated regulations and contract renegotiations occur frequently, requiring that we regularly review and assess our estimates.

Additionally, updates to regulations and contract renegotiations occur frequently, requiring that we regularly review and assess our estimates.

Changes in estimates related to contractual adjustments affect the amounts we report as patient service revenue and are recorded in the period the changes occur.

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Because we do not pursue collection of amounts qualified under our charity and self-pay discount policy, the discounted portion of such charges are not reported in total revenue.

Due to the complexities involved in the classification and documentation of healthcare services authorized and provided, the estimation of revenue earned and the related reimbursement are often subject to interpretations that could result in payments that are different from our estimates.

Settlements under reimbursement agreements with third party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined.

Final determination of amounts earned under the Medicare, Medicaid and other third party payor programs often occurs in subsequent years because of audits by the programs, rights of appeal, and the application of technical provisions.

Settlements are considered in the recognition of net patient service revenue on an estimated basis in the period the related services are rendered, and such amounts are subsequently adjusted in future periods as adjustments become known or as years are no longer subject to such audits and reviews.

These settlements resulted in changes to net patient service revenue of an increase of $5.8 million, $6.7 million, and $15.8 million for the years ended December 31, 2024, 2023, and 2022, respectively.

At December 31, 2024 and 2023, our settlements under reimbursement agreements with third party payors were a net receivable and a net payable of $1.9 million and $10.3 million, respectively, of which a receivable of $42.6 million and $34.4 million, respectively, was included in other current assets and a payable of $40.7 million and $44.7 million, respectively, was included in other accrued expenses and liabilities in the consolidated balance sheets.

Due to the complexities involved in the classification and documentation of healthcare services under the laws and regulations governing Medicare and Medicaid programs, our estimates of revenue earned and related reimbursement are often subject to interpretation that could result in payments that are different from our estimates.

Final determination of amounts earned under Medicare, Medicaid and other third party payor programs often occurs in subsequent years because of audits by the programs, rights of appeal, and the application of technical provisions.

Estimated reimbursement amounts, which are recorded within net patient service revenue in the period in which the related services are rendered, are adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to as the “cost report” filing and settlement process).

Differences between original estimates and subsequent revisions, including final settlements, are recorded as adjustments to net patient service revenue in the period in which such revisions become known.

These adjustments resulted in an increase to net patient service revenue of $8.3 million, $5.8 million, and $6.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.

At December 31, 2025 and 2024, our settlements under reimbursement agreements with third party payors were a net payable of $7.8 million and a net receivable of $2.6 million, respectively, of which a receivable of $21.1 million and $29.9 million, respectively, was included in other current assets and a payable of $28.9 million and $27.3 million, respectively, was included in other accrued expenses and liabilities in the consolidated balance sheets.

Final determination of amounts earned under prospective payment and other reimbursement activities is subject to review by appropriate governmental authorities or their agents.

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We routinely review accounts receivable balances by monitoring historical cash collections as a percentage of trailing net operating revenue, as well as by analyzing current period revenue and admissions by payor, aged accounts receivable by payor, days revenue outstanding, and the composition of self-pay receivables.

In May 2022, we outsourced our revenue cycle management functions to Ensemble.

In the twelve months following the transition of revenue cycle management services to Ensemble, cash collections improved by approximately $50 million.

Significant changes in payor mix, business office operations, economic conditions, trends in federal, state and private employer healthcare coverage and other collection indicators could have a significant impact on our results of operations and cash flows.

We rely on the results of detailed reviews of historical collections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectability of our accounts receivable.

We consider historical collection experience of each payor and the results of detailed reviews of historical collections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectability of our accounts receivable.

We perform the hindsight analysis utilizing twelve-month rolling accounts receivable collection data.

We believe our estimation processes at each of our hospital facilities provide reasonable estimates of our revenue and valuation of our accounts receivable.

During the third quarter of 2025, we implemented a new revenue accounting system that provided us with additional information to more precisely estimate the collectability of accounts receivable, particularly with respect to more timely consideration of payor denial and payment trends.

The detailed information provided by the new system during the year ended December 31, 2025, along with our recently completed analysis of historical collection trends, indicated the current collection estimate differed from historical collection estimates thereby resulting in a change in accounting estimate in accordance with ASC 250-10, A ccounting Changes and Error Corrections , to be accounted for during the year ended December 31, 2025 (the period of change).

We believe our estimation processes provide reasonable estimates of our revenue and valuation of our accounts receivable.

Risk Management and Self-Insured Liabilities

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The total costs for professional and general liability losses are based on our premiums and retention costs and were $131.3 million, $63.0 million, and $55.5 million during the years ended December 31, 2025, 2024, and 2023, respectively.

We experienced an increase in professional and general liability losses during the year ended December 31, 2025, primarily related to the emergence of adverse prior period claim developments, particularly with respect to our New Mexico market, combined with increased social inflationary pressures as described further in Note 11, Self-Insured Liabilities, to our consolidated financial statements included within this Annual Report.

At December 31, 2025 and 2024, our workers’ compensation liability accrual for asserted and unasserted claims was $25.7 million and $31.8 million, respectively, of which $16.4 million and $21.1 million, respectively, were included in self-insured liabilities and $9.3 million and $10.7 million, respectively, were included in other accrued expenses and liabilities in the consolidated balance sheets.

1 unchanged sentence

At December 31, 2025 and 2024, such receivables were $12.9 million and $12.3 million, respectively, of which $8.2 million and $8.2 million, respectively, were included in other assets and $4.7 million and $4.1 million, respectively, were included in other current assets.

The total costs for workers’ compensation liability losses are based on our premiums and retention costs and were $8.0 million, $6.6 million, and $7.5 million during the years ended December 31, 2024, 2023, and 2022, respectively.

The total amounts for workers’ compensation liability losses are based on our premiums and retention costs and were a benefit of $0.2 million, an expense of $8.0 million, and an expense of $6.6 million during the years ended December 31, 2025, 2024, and 2023, respectively.

Our estimates are subject to the effects of trends in loss severity and frequency, and we routinely review and adjust estimates as experience develops or new information becomes known.

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Changes to the estimated reserve amounts are included in current operating results.

While management monitors current claims closely and considers outcomes when estimating its reserve, the complexity of the claims

and wide range of potential outcomes often hamper timely adjustments to the assumptions used in the estimates.

While management monitors current claims closely and considers outcomes when estimating its reserve, the complexity of the claims and wide range of potential outcomes often hamper timely adjustments to the assumptions used in the estimates.

Due to the considerable variability that is inherent in such estimates, there can be no assurance that the ultimate liability will not exceed our recorded estimates, which could have an adverse effect on our results of operations, financial condition, liquidity and capital resources.

We account for income taxes associated with the activities of Ardent Health Partners, Inc., which is subject to federal and state income tax as a corporation.

We account for income taxes associated with the activities of Ardent Health, Inc., which is subject to federal and state income tax as a corporation.

We account for income taxes using the asset and liability method.

We recognize deferred tax assets and liabilities representing the future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities.

The primary differences relate to the allowance for doubtful accounts, accrued liabilities, depreciation methods and periods, and deferred cost amortization methods.

The primary differences relate to the allowance on patient receivable accounts, accrued liabilities, depreciation methods and periods, and deferred cost amortization methods.

We measure deferred tax assets and liabilities using enacted tax rates that we expect to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled.

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The final outcome of audits by federal and state taxing authorities may have a significant effect on our financial position and results of operations.

Refer to Note 8 to our consolidated financial statements included within this Annual Report for further discussion on income taxes.

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 7. Management’s Discussion and Analysis