What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-05 compared with 2025-11-10 · 125 added, 219 removed, 427 unchanged (45% of the section changed)

3 unchanged sentences

(Dollars in millions, except per share amounts)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current assets:

33 unchanged sentences

Additional paid-in capital 2,548.3 2,540.6

Accumulated other comprehensive (loss) income ( 14.4 ) 4.8

Accumulated other comprehensive income (loss)

( 10.5 ) ( 13.8 )

Retained deficit ( 851.1 ) ( 815.2 )

9 unchanged sentences

shares in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Revenues $ 810.9 $ 776.0

10 unchanged sentences

Net loss on disposals, consolidations and deconsolidations

15.6 14.7 19.0 21.5

Equity in earnings of unconsolidated affiliates ( 4.1 ) ( 5.6 )

Litigation settlements 2.5 2.2

Loss on debt extinguishment 1.3 — 1.3 5.1

Other income, net ( 1.7 ) —

715.8 709.5 2,144.4 2,028.2

Operating income 65.8 61.9

Interest expense, net ( 69.1 ) ( 62.2 )

Income before income taxes 30.8 10.9 74.3 72.9

Income tax expense

Income (loss) before income taxes

( 3.3 ) ( 0.3 )

Net income 25.3 6.4 69.9 59.1

Income tax (expense) benefit

Net income (loss)

( 2.1 ) ( 0.3 )

Net income attributable to non-controlling interests ( 33.8 ) ( 37.4 )

Net loss attributable to Surgery Partners, Inc.

Net income (loss) attributable to Surgery Partners, Inc.

$ ( 35.9 ) $ ( 37.7 )

10 unchanged sentences

(Unaudited, dollars in millions)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Net income (loss)

$ ( 2.1 ) $ ( 0.3 )

Net income $ 25.3 $ 6.4 $ 69.9 $ 59.1

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Derivative activity, net of tax of $ 0

( 1.1 ) ( 26.6 ) ( 19.2 ) ( 47.0 )

Comprehensive income (loss)

24.2 ( 20.2 ) 50.7 12.1

Comprehensive income attributable to non-controlling interests ( 33.8 ) ( 37.4 )

Comprehensive loss attributable to Surgery Partners, Inc.

Comprehensive income (loss) attributable to Surgery Partners, Inc.

$ ( 32.6 ) $ ( 54.3 )

8 unchanged sentences

Balance as of December 31, 2025 129,321 $ 1.3 $ 2,540.6 $ ( 13.8 ) $ ( 815.2 ) $ 1,418.4 $ 3,131.3

Net (loss) income — — — — ( 37.7 ) 32.6 ( 5.1 )

Net income (loss)

— — — — ( 35.9 ) 34.2 ( 1.7 )

Equity-based compensation 1,476 — 6.0 — — — 6.0

Other comprehensive loss — — — ( 16.6 ) — — ( 16.6 )

Other comprehensive income (loss)

— — — 3.3 — — 3.3

Acquisition and disposal of shares of non-controlling interests, net — — 1.7 — — 3.3 5.0

1 unchanged sentence

Balance as of March 31, 2026 130,797 $ 1.3 $ 2,548.3 $ ( 10.5 ) $ ( 851.1 ) $ 1,409.9 $ 3,097.9

Net (loss) income — — — — ( 2.5 ) 43.2 40.7

Equity-based compensation 17 — 6.8 — — — 6.8

Other comprehensive loss — — — ( 1.5 ) — — ( 1.5 )

Acquisition and disposal of shares of non-controlling interests, net — — 5.1 — — ( 6.0 ) ( 0.9 )

Distributions to non-controlling interests—non-redeemable holders — — — — — ( 44.6 ) ( 44.6 )

Balance as of June 30, 2025 128,210 $ 1.3 $ 2,537.8 $ ( 13.3 ) $ ( 777.5 ) $ 1,408.2 $ 3,156.5

Net (loss) income — — — — ( 22.7 ) 41.6 18.9

Equity-based compensation 807 — 6.2 — — — 6.2

Other comprehensive loss — — — ( 1.1 ) — — ( 1.1 )

Acquisition and disposal of shares of non-controlling interests, net — — ( 1.2 ) — — 3.7 2.5

Distributions to non-controlling interests—non-redeemable holders — — — — — ( 41.0 ) ( 41.0 )

Balance as of September 30, 2025 129,017 $ 1.3 $ 2,542.8 $ ( 14.4 ) $ ( 800.2 ) $ 1,412.5 $ 3,142.0

SURGERY PARTNERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited, dollars in millions, shares in thousands)

Common Stock Additional

Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Deficit Non-Controlling Interests—

Non-Redeemable Total

Shares Amount

Balance as of December 31, 2024 127,109 $ 1.3 $ 2,520.9 $ 4.8 $ ( 737.3 ) $ 1,406.7 $ 3,196.4

Net (loss) income — — — — ( 12.4 ) 29.3 16.9

Equity-based compensation 508 — 4.9 — — — 4.9

Other comprehensive loss — — — ( 5.5 ) — — ( 5.5 )

Acquisition and disposal of shares of non-controlling interests, net — — ( 6.9 ) — — 23.7 16.8

Distributions to non-controlling interests—non-redeemable holders — — — — — ( 29.7 ) ( 29.7 )

Balance as of March 31, 2024 127,102 $ 1.3 $ 2,495.6 $ 52.0 $ ( 581.6 ) $ 1,070.6 $ 3,037.9

Net income — — — — ( 15.5 ) 35.5 20.0

Equity-based compensation 22 — 15.1 — — — 15.1

Other comprehensive loss

Net income (loss)

— — — — ( 37.7 ) 32.6 ( 5.1 )

Acquisition and disposal of shares of non-controlling interests, net — — 0.4 — — 147.4 147.8

Distributions to non-controlling interests—non-redeemable holders — — — — — ( 29.6 ) ( 29.6 )

Balance as of June 30, 2024 127,124 $ 1.3 $ 2,511.1 $ 37.1 $ ( 597.1 ) $ 1,223.9 $ 3,176.3

Net (loss) income — — — — ( 31.7 ) 34.7 3.0

Equity-based compensation 1,084 — 7.6 — — — 7.6

Other comprehensive loss — — — ( 26.6 ) — — ( 26.6 )

Other comprehensive income (loss)

— — — ( 16.6 ) — — ( 16.6 )

Acquisition and disposal of shares of non-controlling interests, net — — ( 2.6 ) — — 25.6 23.0

Distributions to non-controlling interests—non-redeemable holders — — — — — ( 49.3 ) ( 49.3 )

Balance as of September 30, 2024 127,128 $ 1.3 $ 2,513.5 $ 10.5 $ ( 628.8 ) $ 1,215.4 $ 3,111.9

Balance as of March 31, 2025 128,193 $ 1.3 $ 2,525.9 $ ( 11.8 ) $ ( 775.0 ) $ 1,415.6 $ 3,156.0

See notes to unaudited condensed consolidated financial statements.

SURGERY PARTNERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS [Open]

(Unaudited, dollars in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income $ 69.9 $ 59.1

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss)

$ ( 2.1 ) $ ( 0.3 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 38.5 36.3

3 unchanged sentences

Net loss on disposals, consolidations and deconsolidations 4.3 6.4

Loss on debt extinguishment 1.3 5.1

Deferred income taxes ( 1.3 ) ( 0.3 )

3 unchanged sentences

Other operating assets and liabilities ( 53.2 ) ( 61.7 )

Net cash provided by operating activities 170.9 188.7

Net cash provided by (used in) operating activities

Cash flows from investing activities:

5 unchanged sentences

Other investing activities 5.9 ( 10.7 )

Net cash used in investing activities ( 120.5 ) ( 376.8 )

Net cash provided by (used in) investing activities

( 13.4 ) ( 76.4 )

Cash flows from financing activities:

5 unchanged sentences

Other financing activities 0.4 ( 3.5 )

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

( 55.9 ) 30.2

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

( 57.6 ) ( 40.2 )

3 unchanged sentences

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Organization and Summary of Accounting Policies

5 unchanged sentences

and its subsidiaries are referred to herein as "Surgery Partners," "we," "us," "our" or the "Company."

As of September 30, 2025, the Company owned or operated a portfolio of 165 surgical facilities, comprised of 146 ASCs and 19 surgical hospitals in 30 states.

As of March 31, 2026, the Company owned or operated a portfolio of 180 surgical facilities, comprised of 161 ASCs and 19 surgical hospitals in 30 states.

The Company owns these facilities in partnership with physicians and, in some cases, health care systems in the markets and communities it serves.

14 unchanged sentences

Actual results could differ from those estimates.

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications were specific to the Company’s payor mix disclosures and had no effect on the reported results of operations.

The Company's revenues generally relate to contracts with patients in which the performance obligations are to provide health care services.

3 unchanged sentences

The Company continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a summary of revenues by service type as a percentage of total revenues:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Patient service revenues 97.7 % 97.8 %

1 unchanged sentence

Total revenues 100.0 % 100.0 %

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Patient service revenues.

10 unchanged sentences

The Company estimates its contractual adjustments and implicit price concessions based on contractual agreements, its discount policies and historical experience of cash collections and historical write-offs.

The estimated contractual adjustments are recognized at the time of services being performed, with ASCs typically based on contractual agreements and surgical hospitals typically based on historical experience of cash collections and write-offs.

Changes in estimated contractual adjustments are recorded in the period of change, with final adjustments, if any, typically at the time of payment.

The estimated contractual adjustments and implicit price concessions are recognized at the time of services being performed, with ASCs generally based on contractual agreements and surgical hospitals generally based on historical experience of cash collections and write-offs.

Changes in estimated contractual adjustments and implicit price concessions are recorded in the period of change, with final adjustments, if any, typically at the time of payment.

Several states utilize supplemental Medicaid reimbursement programs for the purpose of providing reimbursement to providers to increase base rates to the levels that Medicare would have paid for the same service or for payments that offset a portion of the cost of providing care to Medicaid and indigent patients.

8 unchanged sentences

The following table sets forth patient service revenues by type of payor and as a percentage of total patient service revenues for the Company's consolidated surgical facilities (dollars in millions):

Three Months Ended September 30,

Three Months Ended March 31,

Amount % Amount %

9 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30,

Amount % Amount %

Patient service revenues:

Private insurance $ 1,226.7 52.0 % $ 1,152.2 52.2 %

Government 1,011.7 42.8 % 932.0 42.2 %

Self-pay 68.0 2.9 % 60.2 2.7 %

54.7 2.3 % 62.2 2.9 %

Total patient service revenues 2,361.1 100.0 % 2,206.6 100.0 %

Other service revenues 62.6 43.3

Total revenues $ 2,423.7 $ 2,249.9

(1) Other is comprised of automobile liability, letters of protection and other payor types.

2 unchanged sentences

Changes in estimated contractual adjustments are recorded in the period of change, with final adjustments, if any, typically at the time of payment.

Changes in estimated contractual adjustments and implicit price concessions are recorded in the period of change, with final adjustments, if any, typically at the time of payment.

While changes in estimated reimbursement from third-party payors remain a possibility, the Company expects that any such changes would be minimal and, therefore, would not have a material effect on its financial condition or results of operations.

22 unchanged sentences

In certain cases, we may not reduce the valuation allowance by the amount of the deferred tax liabilities depending on the nature and timing of future taxable income attributable to deferred tax liabilities.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In assessing tax contingencies, we apply the provisions of ASC 740, “Income Taxes”.

We apply the recognition threshold and measurement of a tax position taken or expected to be taken in a tax return and follow the guidance on various matters such as derecognition, interest, penalties and disclosure.

We apply the recognition threshold and measurement of a tax position taken or expected to be taken in a tax return.

We classify interest and penalties as a component of income tax expense.

3 unchanged sentences

Additions to goodwill include amounts resulting from new business combinations and incremental ownership purchases in the Company's subsidiaries.

A summary of the Company's acquisitions, disposals and deconsolidations for the nine months ended September 30, 2025 is included in Note 2.

A summary of the Company's acquisitions, disposals and deconsolidations for the three months ended March 31, 2026 is included in Note 2.

"Acquisitions, Disposals and Deconsolidations."

A summary of activity related to goodwill for the nine months ended September 30, 2025 is as follows (in millions):

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of activity related to goodwill for the three months ended March 31, 2026 is as follows (in millions):

Balance as of December 31, 2025 $ 5,194.6

Acquisitions, including post acquisition adjustments 10.6

Disposals ( 45.5 )

Balance as of September 30, 2025 $ 5,091.6

A detailed evaluation of potential impairment indicators was performed as of September 30, 2025, which specifically considered recent changes in interest rates, inflation risk and market volatility.

On the basis of available evidence as of September 30, 2025, no indicators of impairment were identified.

Balance as of March 31, 2026 $ 5,205.2

A detailed evaluation of potential impairment indicators was performed as of March 31, 2026, which specifically considered recent changes in interest rates, inflation risk and market volatility.

On the basis of available evidence as of March 31, 2026, no indicators of impairment were identified.

Future estimates of fair value could be adversely affected if the actual outcome of one or more of the Company's assumptions changes materially in the future, including a material decline in the Company’s stock price and the fair value of its long-term debt, lower than expected surgical case volumes, higher market interest rates or increased operating costs.

8 unchanged sentences

Each partnership and limited liability company through which the Company owns and operates its surgical facilities is governed by a partnership or operating agreement, respectively.

In certain circumstances, the applicable partnership or operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physician limited partners’ or physician minority members’ ownership, as applicable, if certain adverse regulatory events occur, such as it becoming illegal for the physician(s) to own an interest in a surgical facility, refer patients to a surgical facility or receive cash distributions from a surgical facility.

Management believes the likelihood of an event occurring that would trigger such purchases was remote as of September 30, 2025.

In certain circumstances, the applicable partnership or operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physician limited partners’ or physician minority members’, as applicable, ownership if certain adverse regulatory events occur, such as it becoming illegal for the physician(s) to own an interest in a surgical facility, refer patients to a surgical facility or receive cash distributions from a surgical facility.

Management believes the likelihood of an event occurring that would trigger such purchases was remote as of March 31, 2026.

The non-controlling interests — redeemable are reported outside of stockholders' equity in the condensed consolidated balance sheets.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of activity related to redeemable non-controlling interests is as follows (in millions):

Nine Months Ended September 30,

Three Months Ended March 31,

Balance at beginning of period $ 395.5 $ 438.8

10 unchanged sentences

Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, depending on the nature of the item being valued.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of the carrying amounts and estimated fair values of the Company's long-term debt follows (in millions):

Carrying Amount Fair Value

September 30,

2026 December 31,

2024 September 30,

2025 March 31,

2026 December 31,

7 unchanged sentences

Additionally, the Company would absorb the majority of the expected losses from any of these entities should such expected losses occur.

As of September 30, 2025, the Company's consolidated VIEs consisted of nine surgical facilities and 28 physician practices.

The total assets (excluding goodwill and intangible assets, net) of the consolidated VIEs included in the accompanying condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, were $ 85.3 million and $ 87.0 million, respectively, and the total liabilities of the consolidated VIEs were $ 41.5 million and $ 55.0 million, respectively.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures , which establishes new requirements for the categorization and disaggregation of information in the rate reconciliation as well as for disaggregation of income taxes paid.

The ASU is effective for annual periods beginning after December 15, 2024.

The amendments in this ASU may be applied prospectively or retrospectively to all periods presented and early adoption is permitted.

The Company is planning to adopt during the year ended December 31, 2025.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2026, the Company's consolidated VIEs consisted of nine surgical facilities and 27 physician practices.

The total assets (excluding goodwill and intangible assets, net) of the consolidated VIEs included in the accompanying condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, were $ 77.1 million and $ 75.1 million, respectively, and the total liabilities of the consolidated VIEs were $ 40.4 million and $ 40.4 million, respectively.

Acquisitions, Disposals and Deconsolidations

During the nine months ended September 30, 2025:

• The Company acquired a controlling interest in four surgical facilities and five physician practices for aggregate cash consideration of $ 52.6 million, net of cash acquired, and non-cash consideration of $ 2.3 million, which consisted of a non-controlling interest in one of the Company's existing surgical facilities.

During the three months ended March 31, 2026:

• The Company acquired a controlling interest in one surgical facility for aggregate cash consideration of $ 4.2 million, net of cash acquired.

In connection with this acquisition, the Company preliminarily recognized non-controlling interests of $ 4.1 million and goodwill of $ 8.3 million.

During the three months ended March 31, 2025:

• The Company acquired a controlling interest in four surgical facilities and one physician practice for aggregate cash consideration of $ 44.0 million, net of cash acquired.

In connection with these acquisitions, the Company preliminarily recognized non-controlling interests of $ 28.0 million and goodwill of $ 70.2 million.

• The Company acquired a non-controlling interest in three surgical facilities for aggregate cash consideration of $ 13.4 million.

These non-controlling interests were accounted for as equity method investments and recorded as a component of investments in and advances to affiliates in the condensed consolidated balance sheets.

During the nine months ended September 30, 2024:

• The Company acquired a controlling interest in six surgical facilities and several physician practices for aggregate cash consideration of $ 291.2 million, net of cash acquired, and non-cash consideration of $ 1.1 million, which consisted of a non-controlling interest in one of the Company's existing surgical facilities.

In connection with these acquisitions, the Company preliminarily recognized non-controlling interests of $ 293.2 million, goodwill of $ 506.7 million and investments and advances to affiliates of $ 44.6 million related to an acquired surgical facility accounted for as an equity method investment.

• The Company acquired non-controlling interests in one surgical facility and for aggregate cash consideration of $ 3.8 million.

The non-controlling interests were accounted for as equity method investments and recorded as a component of investments in and advances to affiliates in the condensed consolidated balance sheets.

Disposals and Deconsolidations

During the nine months ended September 30, 2025:

• The Company sold a portion of its interests in one surgical facility for net cash proceeds of $ 0.5 million.

As a result of the transaction, the Company no longer controlled the previously controlled surgical facility but retained a non-controlling interest, resulting in the deconsolidation of the previously consolidated entity.

This transaction resulted in a pre-tax net loss on deconsolidation of $ 2.7 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2025.

The net loss was determined based on the difference between the net cash proceeds plus the fair value of the Company’s retained interests in the entity and the carrying values of both the tangible and intangible assets and liabilities of the entity immediately prior to the transaction.

• The Company sold its controlling interests in two surgical facilities for aggregate net cash proceeds of $ 42.4 million.

In connection with the transactions, the Company recognized a pre-tax net gain of $ 6.0 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2025.

During the nine months ended September 30, 2024:

During the three months ended March 31, 2026:

• The Company disposed of its non-controlling interests in one surgical facility, which was previously accounted for as an equity method investment, for cash proceeds of $ 0.9 million.

In connection with this transaction, the Company recognized a pre-tax loss of $ 3.7 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2024.

In connection with this transaction, the Company recognized a pre-tax loss of $ 4.0 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations.

During the three months ended March 31, 2025:

• The Company sold a portion of its interests in one surgical facility for net cash proceeds of $ 0.5 million.

This transaction resulted in a pretax net gain on deconsolidation of $ 2.7 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2024.

This transaction resulted in a pretax net loss on deconsolidation of $ 3.0 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations.

The net gain was determined based on the difference between the net cash proceeds plus the fair value of the Company’s retained interests in the entity and the carrying values of both the tangible and intangible assets of the entity immediately prior to the transaction.

• The Company sold its interests in one surgical facility for a nominal amount of cash proceeds.

In connection with the sale, the Company recognized a pre-tax loss of $ 3.4 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2024.

• The Company recognized a pre-tax loss of $ 10.0 million related to an equity investment previously held at cost, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2024.

• The Company sold or otherwise disposed of its controlling interests in two surgical facilities for aggregate net cash proceeds of $ 4.3 million.

In connection with the transactions, the Company recognized a pre-tax net gain of $ 0.5 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations.

SURGERY PARTNERS, INC.

2 unchanged sentences

A summary of long-term debt follows (in millions):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Senior secured term loan (1)

2 unchanged sentences

7.250 % senior unsecured notes due 2032

1,225.0 1,225.0

Notes payable and other secured loans 195.4 199.3

4 unchanged sentences

Total long-term debt $ 3,613.5 $ 3,602.9

(1) Includes unamortized fair value discount of $ 1.3 million and $ 1.4 million as of September 30, 2025 and December 31, 2024, respectively.

Second Amendment to Credit Agreement

On August 13, 2025 (the “Amendment Effective Date”), SP Holdco I, Inc., a Delaware corporation (“Holdings”), Surgery Center Holdings, Inc., a Delaware corporation (the “Borrower”), each a wholly-owned subsidiary of the Company, and certain wholly-owned subsidiaries of the Borrower party thereto (the “Subsidiary Guarantors”), entered into a second amendment to credit agreement (the “Second Amendment”), with Jefferies Finance LLC, as fronting bank, the administrative agent and the collateral agent, and the other financial institutions party thereto, which amends that certain credit agreement, dated as of December 19, 2023, and amended on June 20, 2024, by and among Holdings, the Borrower, Jefferies Finance LLC, as administrative agent and collateral agent, and the other financial institutions party thereto from time to time (the “Credit Agreement”).

The Second Amendment provides for a new tranche of term loans under the Credit Agreement in an aggregate principal amount of $ 1,383 million (the “2025 Refinancing Term Loans”), which 2025 Refinancing Term Loans replace or refinance in full all of the existing term loans outstanding under the Credit Agreement (as in effect immediately prior to the Second Amendment), and (ii) refinance in full all of the existing revolving credit commitments and outstanding revolving loans under the Credit Agreement (as in effect immediately prior to the Second Amendment), all as further set forth in the Second Amendment.

The 2025 Refinancing Term Loans mature on December 19, 2030 and the refinanced revolving credit commitments and refinanced revolving loans mature on December 19, 2028.

The 2025 Refinancing Loans shall bear interest at a rate per annum equal to (x) the forward-looking term rate based on Secured Overnight Financing Rate (“Term SOFR”) plus 2.50 % per annum or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5 % per annum and (iii) Term SOFR plus 1.00 % per annum (which shall not be less than 1.00 %)) plus 1.50 % per annum.

The 2025 Refinancing Term Loans amortize in equal quarterly installments of 0.25 % of the aggregate original principal amount of the 2025 Refinancing Term Loans (such amortization payments will commence on or around the last business day of the fiscal quarter ending September 30, 2025).

Voluntary prepayments of the 2025 Refinancing Term Loans are permitted, in whole or in part, with prior notice, without premium or penalty (except a 1.00 % call premium in the case of certain repricing events occurring prior to the sixth month anniversary of the Second Amendment Effective Date).

In connection with the Second Amendment, the Company recorded debt issuance costs and discount of $ 1.6 million, and a debt extinguishment loss of $ 1.3 million which is included in loss on debt extinguishment in the accompanying condensed consolidated statement of operations for the three and nine months ended September 30, 2025.

The loss on debt extinguishment includes the partial write-off of unamortized debt issuance costs and discounts.

(1) Includes unamortized fair value discount of $ 1.2 million as of both March 31, 2026 and December 31, 2025.

Revolving Credit Facility

As of September 30, 2025, the Company's availability on its $ 703.8 million senior secured revolving credit facility (the "Revolver") was $ 405.9 million (including letters of credit of $ 10.9 million).

The increase in outstanding borrowings on the Revolver compared to December 31, 2024 was primarily due to timing of acquisitions and changes in working capital.

As of March 31, 2026, the Company's availability on its $ 703.8 million senior secured revolving credit facility (the "Revolver") was $ 666.1 million (including letters of credit of $ 9.7 million).

The increase in outstanding borrowings on the Revolver compared to December 31, 2025 was primarily due to changes in working capital needs.

The Company's operating leases are primarily for real estate, including medical office buildings, and corporate and other administrative offices.

The Company's finance leases are primarily for medical equipment and information technology and telecommunications assets.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company's finance leases include certain land, buildings and improvements, medical equipment and information technology and telecommunications assets.

The following table presents the components of the Company's right-of-use assets and liabilities related to leases and their classification in the condensed consolidated balance sheets (in millions):

Classification in Condensed Consolidated Balance Sheets September 30, 2025 December 31, 2024

Classification in Condensed Consolidated Balance Sheets March 31, 2026 December 31, 2025

Operating lease assets Right-of-use operating lease assets $ 281.5 $ 289.2

10 unchanged sentences

Total lease liabilities $ 1,239.8 $ 1,258.1

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the components of the Company's lease expense and their classification in the condensed consolidated statements of operations (in millions):

Nine Months Ended September 30,

Three Months Ended March 31,

Operating lease costs $ 16.7 $ 16.5

6 unchanged sentences

The following table presents supplemental cash flow information (in millions):

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities:

5 unchanged sentences

Finance leases 1.5 60.0

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Derivatives and Hedging Activities

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements.

To accomplish this objective, the Company primarily uses interest rate swaps and interest rate caps as part of its interest rate risk management strategy.

To accomplish this objective, the Company primarily uses interest rate caps as part of its interest rate risk management strategy.

During 2026 and 2025, such derivatives have been used to hedge the variable cash flows associated with existing variable-rate debt.

The key terms of interest rate swaps and interest rate caps outstanding are presented below:

September 30, 2025 December 31, 2024

The key terms of interest rate caps outstanding are presented below:

March 31, 2026 December 31, 2025

Description Effective Date Notional Amount (in millions) Status Notional Amount (in millions) Status Maturity Date

Pay-fixed swap May 7, 2021 $ — Matured $ 435.0 Active March 31, 2025

Pay-fixed swap May 7, 2021 — Matured 330.0 Active March 31, 2025

Pay-fixed swap May 7, 2021 — Matured 435.0 Active March 31, 2025

Interest rate cap September 30, 2021 — Matured 143.6 Active March 31, 2025

Interest rate cap September 30, 2021 — Matured 8.2 Active March 31, 2025

Deferred premium cap March 31, 2025 $ 392.0 Active $ 393.0 Active December 31, 2028

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$ 1,372.0 $ 1,375.5

The Company had three interest rate swaps designated in cash flow hedging relationships, which matured on March 31, 2025.

Prior to maturity, the interest rate swaps had a total notional amount of $ 1.2 billion and were pay-fixed, received 1-Month SOFR (subject to a minimum of 0.75 %).

The Company had two interest rate caps designated in cash flow hedging relationships, which matured on March 31, 2025.

Prior to maturity, the interest caps had a total notional amount of $ 151.8 million.

Effective March 31, 2025, the Company had five deferred premium interest rate cap agreements.

The deferred premium interest rate caps are designated in cash flow hedging relationships with a total notional amount of $ 1.4 billion.

These financial instruments are designed to limit the Company's interest rate exposure on its term loan concurrent with the positions that matured on March 31, 2025.

Prior to maturity, the pay-fixed, receive floating interest rate swaps did not meet the requirements to be considered derivatives in their entirety as a result of the financing component.

Accordingly, the swaps were considered hybrid instruments, consisting of a financing element treated as a debt instrument and an embedded at-market derivative that was designated as a cash flow hedge.

Within the Company’s condensed consolidated balance sheets, the financing elements treated as debt instruments were carried at amortized cost and the embedded at-market derivatives were recorded at fair value.

The fair value was determined using pricing models that rely on market observable inputs such as yield curve data, which are classified as Level 2 inputs within the fair value hierarchy.

The cash flows related to the portion treated as debt are classified as financing activities in the condensed consolidated statements of cash flows while the portions that were treated as an at-market derivative are classified as operating activities.

Within the Company’s condensed consolidated balance sheets, the interest rate caps are recorded at fair value.

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The interest rate caps are classified using Level 2 inputs within the fair value hierarchy.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income ("OCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings, as documented at hedge inception in accordance with the Company’s accounting policy election.

Amounts reported in accumulated OCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

Over the next 12 months, the Company estimates that an additional $ 5.5 million will be reclassified as an increase to interest expense.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

the hedged transaction affects earnings, as documented at hedge inception in accordance with the Company’s accounting policy election.

Amounts reported in accumulated OCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

Over the next 12 months, the Company estimates that an additional $ 5.4 million will be reclassified as an increase to interest expense.

The following table presents the fair values of our derivatives and their location on the condensed consolidated balance sheets (in millions):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Assets Liabilities Assets Liabilities

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$ — $ 10.5 $ — $ 13.8

Interest rate swaps (1)

Interest rate caps (2)

Interest rate swaps (3) (4)

Total $ — $ 10.5 $ — $ 13.8

(1) Amounts were included in other current assets on the condensed consolidated balance sheets as of December 31, 2024.

(2) Amounts were included in other long-term liabilities on the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

(3) Amounts were included in other current liabilities on the condensed consolidated balance sheets as of December 31, 2024.

(4) Amounts related to the financing component of the pay-fixed interest rate swaps.

(1) Amounts were included in other long-term liabilities on the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025.

The following table presents the pre-tax effect of the interest rate swaps and caps on the Company's accumulated OCI and condensed consolidated statements of operations (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Location 2026 2025

Derivatives not designated as hedging instruments

Gain (loss) recognized in income

Other income, net $ — $ —

Derivatives in cash flow hedging relationships

Loss recognized in OCI (effective portion)

Gain (loss) recognized in OCI (effective portion)

$ 1.9 $ ( 5.6 )

Loss (gain) reclassified from accumulated OCI into income (effective portion) Interest expense, net 1.6 ( 14.8 ) ( 8.1 ) ( 44.3 )

Gain (loss) reclassified from accumulated OCI into income (effective portion)

Interest expense, net 1.4 ( 11.0 )

Earnings Per Share

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shares in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net loss attributable to Surgery Partners, Inc.

Three Months Ended March 31,

Net income (loss) attributable to Surgery Partners, Inc.

$ ( 35.9 ) $ ( 37.7 )

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2025, the Company calculated its effective tax rate under a discrete-period approach based solely on its income from operations for the nine months ended September 30, 2025.

The Company's effective tax rate was 5.9 % for the nine months ended September 30, 2025.

For the nine months ended September 30, 2025, the effective tax rate differed from the U.S.

federal statutory rate of 21% primarily due to earnings attributable to non-controlling interests, an increase in the Company’s valuation allowance attributable to interest expense limitations, and a permanent difference between the book and tax gain on the divestiture of partnership interests.

For the nine months ended September 30, 2024, the Company estimated its effective tax rate under the annual effective tax rate approach.

The Company’s effective tax rate was 18.9 % for the nine months ended September 30, 2024.

For the nine months ended September 30, 2024, the effective tax rate differed from the U.S.

federal statutory rate of 21% primarily due to earnings attributable to non-controlling interests, an increase in the Company’s valuation allowance attributable to interest expense limitations, state tax expense, and a discrete tax expense of $ 0.6 million related to the vesting of restricted stock awards.

Based upon the application of interim accounting guidance, the tax rate as a percentage of net income after income attributable to non-controlling interests will vary based upon the relative net income from period to period.

As of September 30, 2025 and December 31, 2024, the Company was in a cumulative three-year pre-tax loss position, which was considered significant negative evidence that could not be overcome by objective and verifiable positive evidence.

For the three months ended March 31, 2026, the Company calculated its effective tax rate under a discrete-period approach based solely on its income from operations for the three months ended March 31, 2026.

The Company's effective tax rate was 36.4 % for the three months ended March 31, 2026.

For the three months ended March 31, 2026, the effective tax rate differed from the U.S.

federal statutory rate of 21% primarily due to earnings attributable to non-controlling interests, an increase in the Company’s valuation allowance attributable to interest expense limitations and a permanent difference between the book and tax deductions related to the Company’s stock compensation expense.

For the three months ended March 31, 2025, the Company estimated its effective tax rate under a discrete-period approach based solely on its income from operations for the three months ended March 31, 2025.

The Company’s effective tax rate was 0 % for the three months ended March 31, 2025.

For the three months ended March 31, 2025, the effective tax rate differed from the U.S.

As of March 31, 2026 and December 31, 2025, the Company was in a cumulative three-year pre-tax loss position, which was considered significant negative evidence that could not be overcome by objective and verifiable positive evidence.

Based on the weight of available evidence, the Company concluded that it was more likely than not that a portion of its net deferred tax assets will not be realized.

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A summary of other current liabilities was as follows (in millions):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Right-of-use operating lease liabilities $ 42.2 $ 42.7

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Interest payable 41.9 19.5

Interest rate swaps — 3.5

Accrued expenses and other 98.0 129.1

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The Company is not aware of any such proceedings that are reasonably possible to have a material adverse effect on the Company's business, financial position, results of operations or liquidity.

Total professional, general and workers' compensation claim liabilities as of September 30, 2025 and December 31, 2024 were $ 23.0 million and $ 19.2 million, respectively.

Expected insurance recoveries of $ 9.6 million as of both September 30, 2025 and December 31, 2024 are included as a component of other current assets and other long-term assets in the condensed consolidated balance sheets.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Total professional, general and workers' compensation claim liabilities as of March 31, 2026 and December 31, 2025 were $ 26.9 million and $ 23.9 million, respectively.

Expected insurance recoveries of $ 8.6 million as of both March 31, 2026 and December 31, 2025 are included as a component of other current assets and other long-term assets in the condensed consolidated balance sheets.

Segment Reporting

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The Surgical Facilities reportable segment includes the operation of ASCs, surgical hospitals, anesthesia services, and multi-specialty physician practices, which earns revenues primarily from contracts with patients in which the performance obligations are to provide health care services.

The "All other" line item primarily consists of amounts attributable to the Company's corporate general and administrative functions.

The "All other" line item primarily consists of amounts attributable to the Company's corporate general and administrative

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company defines its segments on the basis of the way in which its internally reported financial information is regularly reviewed by the CODM to assess performance and allocate resources.

During the three and nine months ended September 30, 2025, the operating segment previously defined as "Ancillary services" was included with Surgical Facilities based on changes in the operational management of our multi-specialty physician practices.

Accordingly, the Company has recast segment disclosures previously reported to conform to current year presentation.

The Company’s CODM uses Adjusted EBITDA to assess performance and allocate resources.

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The following segment information, including significant segment expenses, is presented in millions:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Surgical Facilities Revenues $ 810.9 $ 776.0

Salaries and benefits

242.8 228.4 716.6 666.8

208.9 201.4 639.7 589.9

Professional and medical fees

104.0 91.0 301.4 266.0

Lease expense 23.0 20.8

Other segment items (1)

88.4 77.2 255.0 242.8

665.6 621.9 1,977.9 1,833.0

Adjusted Surgical Facilities EBITDA $ 134.8 $ 132.0

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Interest expense, net 69.1 62.2

Income before income taxes $ 30.8 $ 10.9 $ 74.3 $ 72.9

(1) Other segment items includes equity in earnings of unconsolidated affiliates, net income attributable to non-controlling interests and other expenses, net.

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended September 30, Nine Months Ended September 30,

Income (loss) before income taxes

$ ( 3.3 ) $ ( 0.3 )

(1) Other segment items includes equity in earnings of unconsolidated affiliates, net income attributable to non-controlling interests and other expenses, net.

Three Months Ended March 31,

Depreciation and amortization:

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Total depreciation and amortization expense $ 38.5 $ 36.3

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Surgical Facilities

2 unchanged sentences

Total assets $ 8,042.1 $ 8,119.7

Nine Months Ended September 30,

SURGERY PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Cash purchases of property and equipment:

4 unchanged sentences

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-Q

Item 1. Financial Statements