ardt-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________

FORM 10-Q

_______________________________________________________

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2026

	or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

	Commission File Number: 001-42180

	Ardent Health, Inc.
	(Exact name of Registrant as specified in its charter)


Delaware		61-1764793
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
340 Seven Springs Way, Suite 100, Brentwood, Tennessee		37027
(Address of principal executive offices)		(Zip Code)
	(615) 296-3000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	ARDT	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging

growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the

Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒	Smaller reporting company	☐
Non-accelerated filer	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2026, the Registrant had 143,350,031 shares of common stock outstanding.

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ARDENT HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(Dollars in thousands, except per share amounts)


	March 31, 2026 (1)	December 31, 2025 (1)
Assets
Current assets:
Cash and cash equivalents	$609,692	$709,601
Accounts receivable	685,988	686,102
Inventories	119,838	118,593
Prepaid expenses	166,489	112,646
Other current assets	438,137	431,882
Total current assets	2,020,144	2,058,824
Property and equipment, net	922,806	935,769
Operating lease right of use assets	307,388	292,651
Operating lease right of use assets, related party	911,970	915,599
Goodwill	879,262	879,451
Other intangible assets	88,336	89,335
Deferred income taxes	6,646	6,888
Other assets	116,273	111,691
Total assets	$5,252,825	$5,290,208

Liabilities and Equity
Current liabilities:
Current installments of long-term debt	$37,635	$23,444
Accounts payable	419,723	457,936
Accrued salaries and benefits	230,670	296,260
Other accrued expenses and liabilities	263,456	268,904
Total current liabilities	951,484	1,046,544
Long-term debt, less current installments	1,072,765	1,075,782
Long-term operating lease liability	274,680	260,600
Long-term operating lease liability, related party	900,643	904,632
Self-insured liabilities	255,987	241,050
Other long-term liabilities	66,049	76,636
Total liabilities	3,521,608	3,605,244
Commitments and contingencies (see Note 9)
Redeemable noncontrolling interests	(3,763)	(1,250)
Equity:
Preferred stock, par value $0.01 per share; 50,000,000 shares authorized; no shares issued and outstanding	—	—
Common stock, par value $0.01 per share; 750,000,000 shares authorized; 143,133,825 and 142,864,171 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	1,431	1,429
Additional paid-in capital	796,385	788,472
Accumulated other comprehensive loss	(2,446)	(3,610)
Retained earnings	541,457	501,607
Equity attributable to Ardent Health, Inc.	1,336,827	1,287,898
Noncontrolling interests	398,153	398,316
Total equity	1,734,980	1,686,214
Total liabilities and equity	$5,252,825	$5,290,208

(1) As of March 31, 2026 and December 31, 2025, the unaudited condensed consolidated balance sheets included total liabilities of consolidated variable interest entities of

$341.8 million and $335.1 million, respectively. Refer to Note 2, Summary of Significant Accounting Policies, for further discussion.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ARDENT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In thousands)


	Three Months Ended March 31,
	2026	2025
Cash flows from operating activities:
Net income	$58,488	$58,965
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	42,986	36,201
Other non-operating (gains) losses	(1,886)	217
Amortization of deferred financing costs and debt discounts	811	1,237
Deferred income taxes	(429)	(1,940)
Equity-based compensation	8,929	9,263
Income from non-consolidated affiliates	(8,989)	(1,229)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
Accounts receivable	32	(30,717)
Inventories	(1,245)	(5,192)
Prepaid expenses and other current assets	(79,130)	36,049
Accounts payable and other accrued expenses and liabilities	(14,199)	(46,695)
Accrued salaries and benefits	(65,590)	(80,946)
Net cash used in operating activities	(60,222)	(24,787)
Cash flows from investing activities:
Purchases of property and equipment	(28,088)	(22,908)
Other	187	(214)
Net cash used in investing activities	(27,901)	(23,122)
Cash flows from financing activities:
Proceeds from insurance financing arrangements	17,033	10,959
Payments of principal on insurance financing arrangements	(2,848)	(3,104)
Payments of principal on long-term debt	(3,643)	(1,387)
Distributions to noncontrolling interests	(21,314)	(19,239)
Other	(1,014)	(1,061)
Net cash used in financing activities	(11,786)	(13,832)
Net decrease in cash and cash equivalents	(99,909)	(61,741)
Cash and cash equivalents at beginning of period	709,601	556,785
Cash and cash equivalents at end of period	$609,692	$495,044

Supplemental Cash Flow Information:
Non-cash purchases of property and equipment	$936	$6,662

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ARDENT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Unaudited

(Dollars in thousands)


		Equity Attributable to Ardent Health, Inc.					Non- controlling Interests	Total Equity
	Redeemable Noncontrolling Interests	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Income	Retained Earnings
	Redeemable Noncontrolling Interests	Shares	Amount	Additional Paid-in Capital	Accumulated Other Comprehensive Income	Retained Earnings
Balance at December 31, 2024	$1,158	142,747,818	$1,428	$754,415	$9,737	$365,796	$389,823	$1,521,199
Net income attributable to Ardent Health, Inc.	—	—	—	—	—	41,383	—	41,383
Net income attributable to noncontrolling interests	—	—	—	—	—	—	18,932	18,932
Net loss attributable to redeemable noncontrolling interests	(1,350)	—	—	—	—	—	—	—
Other comprehensive loss	—	—	—	—	(5,809)	—	—	(5,809)
Distributions to noncontrolling interests	—	—	—	—	—	—	(19,239)	(19,239)
Vesting of restricted stock unit awards	—	289,946	2	(1,063)	—	—	—	(1,061)
Equity-based compensation	—	—	—	9,263	—	—	—	9,263
Balance at March 31, 2025	$(192)	143,037,764	$1,430	$762,615	$3,928	$407,179	$389,516	$1,564,668


		Equity Attributable to Ardent Health, Inc.					Non- controlling Interests	Total Equity
	Redeemable Noncontrolling Interests	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings
	Redeemable Noncontrolling Interests	Shares	Amount	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings
Balance at December 31, 2025	$(1,250)	142,864,171	$1,429	$788,472	$(3,610)	$501,607	$398,316	$1,686,214
Net income attributable to Ardent Health, Inc.	—	—	—	—	—	39,850	—	39,850
Net income attributable to noncontrolling interests	—	—	—	—	—	—	21,151	21,151
Net loss attributable to redeemable noncontrolling interests	(2,513)	—	—	—	—	—	—	—
Other comprehensive income	—	—	—	—	1,164	—	—	1,164
Distributions to noncontrolling interests	—	—	—	—	—	—	(21,314)	(21,314)
Vesting of restricted stock unit awards	—	275,928	2	(1,016)	—	—	—	(1,014)
Forfeiture of restricted stock awards	—	(6,274)	—	—	—	—	—	—
Equity-based compensation	—	—	—	8,929	—	—	—	8,929
Balance at March 31, 2026	$(3,763)	143,133,825	$1,431	$796,385	$(2,446)	$541,457	$398,153	$1,734,980

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ARDENT HEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

(Unaudited)

1. Description of the Business and Basis of Presentation

Reporting Entity

Ardent Health, Inc. was initially formed in Delaware in 2015 as Ardent Health Partners, LLC. On July 17, 2024, Ardent

Health Partners, LLC converted from a Delaware limited liability company into a Delaware corporation in connection with its

initial public offering and changed its name to Ardent Health Partners, Inc. On June 3, 2025, Ardent Health Partners, Inc.

changed its name to Ardent Health, Inc. Ardent Health, Inc. is a holding company that has affiliates that operate acute care

hospitals and other healthcare facilities and employ physicians. The terms "Ardent," the "Company," "we," "our" and "us," as

used in these notes to the unaudited condensed consolidated financial statements, refer to Ardent Health, Inc. and its affiliates

and on or prior to July 16, 2024, Ardent Health Partners, LLC and its affiliates, unless stated otherwise or indicated by

context. The term "affiliates" includes direct and indirect subsidiaries of Ardent and partnerships and joint ventures in which

such subsidiaries are equity owners. At March 31, 2026, the Company operated 30 acute care hospitals in six states, including

one managed hospital, two rehabilitation hospitals and two surgical hospitals.

Basis of Presentation

The financial statements include the unaudited condensed consolidated balance sheets, income statements, comprehensive

income statements, statements of cash flows and statements of changes in equity of the Company and its affiliates, which are

controlled by the Company through the Company's direct or indirect ownership of a majority equity interest and rights

granted to the Company through certain variable interests. All intercompany balances and transactions have been eliminated

in consolidation. In the opinion of management, all adjustments, which consist of normal recurring adjustments, and

disclosures considered necessary for a fair presentation have been included.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q

and Rule 10-01 of Regulation S-X. Certain information and disclosures normally included in annual financial statements

presented in accordance with GAAP have been omitted in these interim financial statements pursuant to rules and regulations

of the Securities and Exchange Commission ("SEC"). Accordingly, these unaudited condensed consolidated financial

statements and related notes should be read in conjunction with the Company's audited consolidated financial statements and

notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual

Report").

General and Administrative Costs

The majority of the Company's expenses are "cost of revenue" items. Costs that could be classified as general and

administrative by the Company include its corporate office costs and centralized corporate services, such as human resources,

information technology, and finance, which were $48.6 million and $34.9 million for the three months ended March 31, 2026

and 2025, respectively.

2. Summary of Significant Accounting Policies

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU")

2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires the disclosure of certain

disaggregated expenses within the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning

after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027. Adoption of

ASU 2024-03 can either be applied prospectively to consolidated financial statements issued for reporting periods after the

effective date of this standard or retrospectively to any or all prior periods presented in the consolidated financial statements.

Early adoption is also permitted. The Company is currently evaluating the standard to determine its impact on the Company’s

disclosures.

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In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350):

Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which modernizes the current

internal-use software accounting guidance by removing all references to software project development stages. Under ASU

2025-06, an entity begins capitalizing software costs when (i) management has implicitly or explicitly authorized and

committed to funding a computer software project and (ii) it is probable the project will be completed and the software will

be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). This ASU is

effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting

periods, with early adoption permitted. The Company is currently evaluating the standard to determine its impact on the

Company's disclosures.

Variable Interest Entities

Variable interest entities ("VIEs") must be consolidated if an entity’s interest in the VIE is a controlling financial interest.

Under the variable interest model, a controlling financial interest is determined based on which entity, if any, has (i) the

power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the

obligation to absorb the losses, or the right to receive the benefits, from the VIE that could potentially be significant to the

VIE.

The Company performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company's

involvement with a VIE could cause the Company’s consolidation conclusion to change. The consolidation status of the VIEs

with which the Company is involved may change as a result of such reassessments. Changes in consolidation status are

applied prospectively.

The Company, through its wholly-owned subsidiaries, owns majority interests in certain limited liability companies

("LLCs"), with each LLC owning and operating one or more hospitals. The noncontrolling interest is typically owned by a

not-for-profit medical system, university, academic medical center or foundation or combination thereof (individually or

collectively referred to as "minority member"). The employees that work for the LLC and the related hospital(s) are

employees of the Company, and the Company manages the day-to-day operations of the LLC and the hospital(s) pursuant to

a management services agreement ("MSA").

The LLCs are VIEs due to their structure as LLCs and the control that resides with the Company through the MSA. The

Company consolidates each of these LLCs as it is considered the primary beneficiary due to the MSA providing the

Company the right to direct the day-to-day operating and capital activities of the LLC and the respective hospital(s) that most

significantly impact the LLC’s economic performance. Additionally, the Company would absorb a majority of the entity's

expected losses, receive a majority of the entity's expected residual returns, or both, as a result of its majority ownership,

contractual or other financial interests in the entity. The MSAs are subject to termination only by mutual agreement of the

Company and minority member, except in the case of gross negligence, fraud or bankruptcy of the Company, in which case

the minority member can force termination of the MSA.

All of the Company's VIEs meet the definition of a business, and the Company holds a majority of their issued voting equity

interests. Their assets are not required to be used only for the settlement of VIE obligations as the Company has the ability to

direct the use of the VIE assets through its joint venture and cash management agreements.

The governance rights of the minority members are restricted to those that protect their financial interests and do not preclude

consolidation of the LLCs. The rights of minority members generally are limited to such items as the right to approve the

issuance of new ownership interests, calls for additional cash contributions, the acquisition or divestiture of significant assets

and the incurrence of debt in excess of levels not expected to be incurred in the normal course of business.

As of March 31, 2026 and December 31, 2025, nine of the Company's hospitals were owned and operated through LLCs that

have been determined to be VIEs and were consolidated by the Company. Consolidated assets at March 31, 2026 and

December 31, 2025 included total assets of VIEs equal to $1.3 billion. The Company's VIEs do not have creditors that have

recourse to the Company. As the structure and nature of business are very similar for each of the LLCs, they are discussed

and presented herein on a combined basis.

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The total liabilities of VIEs included in the Company's unaudited condensed consolidated balance sheets are shown below (in

thousands):


	March 31, 2026	December 31, 2025
Current liabilities:
Current installments of long-term debt	$3,648	$3,635
Accounts payable	102,325	102,482
Accrued salaries and benefits	32,960	36,900
Other accrued expenses and liabilities	82,194	67,419
Total current liabilities	221,127	210,436
Long-term debt, less current installments	8,812	9,734
Long-term operating lease liability	98,273	101,153
Long-term operating lease liability, related party	9,283	9,313
Self-insured liabilities	677	677
Other long-term liabilities	3,604	3,826
Total liabilities	$341,776	$335,139

Income from operations before income taxes attributable to VIEs was $62.9 million and $62.6 million for the three months

ended March 31, 2026 and 2025, respectively.

Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments

that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. On

an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on

various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for

making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual

results may differ from these estimates.

Revenue Recognition

Overview

The Company's revenue generally relates to contracts with patients in which its performance obligations are to provide

healthcare services to the patients. Revenue is recorded during the period the Company's obligations to provide healthcare

services are satisfied. Revenue for performance obligations satisfied over time is recognized based on charges incurred in

relation to total expected charges. The Company's performance obligations for inpatient services are generally satisfied over

periods that average approximately five days. The Company's performance obligations for outpatient services are generally

satisfied over a period of less than one day. As the Company's performance obligations relate to contracts with a duration of

one year or less, the Company elected the optional exemption and, therefore, is not required to disclose the transaction price

for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize

revenue. Additionally, the Company is not required to adjust the consideration for the existence of a significant financing

component when the period between the transfer of the services and the payment for such services is one year or less.

Contractual Adjustments, Discounts and Cost Report Settlements

Contractual relationships with patients, in most cases, involve a third party payor (Medicare, Medicaid and managed care

health plans), and the transaction prices for services provided are dependent upon the terms provided by (Medicare and

Medicaid) or negotiated with (managed care health plans) the third party payors. The payment arrangements with third party

payors for the services provided to the related patients typically specify payments at amounts less than the Company's

standard charges.

The Company's revenue is based upon the estimated amounts the Company expects to be entitled to receive from patients and

third party payors. Estimates of contractual adjustments under managed care insurance plans are based upon the contractual

payment terms specified in the related contractual agreements and the historical collection experience of each payor. Revenue

related to uninsured patients and copayment and deductible amounts for patients who have healthcare coverage may have

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discounts applied (uninsured discounts and other discounts). The Company also records estimated implicit price concessions

(based primarily on historical collection experience) related to uninsured accounts to record self-pay revenue at the estimated

amounts expected to be collected.

Medicare and Medicaid regulations and various managed care contracts, under which the discounts from the Company's

standard charges must be calculated, are complex and are subject to interpretation and adjustment. The Company estimates

contractual adjustments on a payor-specific basis based on its interpretation of the applicable regulations or contract terms

and the historical collection experience of each payor. However, the necessity of the services authorized and provided, and

resulting reimbursements, are often subject to interpretation. These interpretations may result in payments that differ from the

Company's estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating continual

review and assessment of the estimates by management.

Due to the complexities involved in the classification and documentation of healthcare services under the laws and

regulations governing Medicare and Medicaid programs, the Company's estimates of revenue earned and related

reimbursement are often subject to interpretation that could result in payments that are different from its 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 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 $7.5 million

and $8.9 million for the three months ended March 31, 2026 and 2025, respectively.

At March 31, 2026 and December 31, 2025, the Company's settlements under reimbursement agreements with third party

payors were a net receivable of $0.7 million and a net payable of $7.8 million, respectively, of which a receivable of $23.2

million and $21.1 million, respectively, was included in other current assets and a payable of $22.5 million and $28.9 million,

respectively, was included in other accrued expenses and liabilities in the unaudited condensed 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. In the opinion of the Company's management, adequate provision has

been made for any adjustments that may result from such reviews.

Subsequent adjustments that are determined to be the result of an adverse change in the patient's or the payor's ability to pay

are recognized as bad debt expense. Bad debt expense for the three months ended March 31, 2026 and 2025 was not material

to the Company.

Currently, several states in which the Company operates utilize Medicaid supplemental payment programs for the purpose of

providing reimbursement to providers to offset a portion of the cost of providing care to Medicaid and indigent patients.

These programs, which are designed with input from and are subject to approval and periodic renewal by the Centers for

Medicare & Medicaid Services ("CMS"), are funded by a combination of state and federal resources, including, in certain

instances, fees or taxes levied on the providers. Under these supplemental programs, the Company recognizes revenue in the

period in which amounts are estimable and collection is reasonably assured such that a significant reversal of cumulative

revenue is not probable in the future. The Company recognizes supplemental program expenses in the period to which they

relate. Reimbursements under these programs are reflected in total revenue, and taxes or other program-related costs are

included in other operating expenses.

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Payor Mix

The Company's total revenue is presented in the following table (dollars in thousands):


	Three Months Ended March 31,
	2026		2025
	Amount	% of Total Revenue	Amount	% of Total Revenue
Medicare	$669,168	41.8%	$595,637	39.8%
Medicaid	158,861	9.9%	149,343	10.0%
Other managed care	684,564	42.7%	645,152	43.1%
Self-pay and other	71,483	4.5%	80,979	5.4%
Net patient service revenue	$1,584,076	98.9%	$1,471,111	98.3%
Other revenue	17,794	1.1%	26,123	1.7%
Total revenue	$1,601,870	100.0%	$1,497,234	100.0%

Charity Care

The Company provides care without charge to certain patients who qualify under the local charity care policy of the hospital

where the patient receives services. The Company estimates that its costs of care provided under its charity care programs

approximated $7.8 million and $8.2 million for the three months ended March 31, 2026 and 2025, respectively. The

Company does not report a charity care patient's charges in revenue as it is the Company's policy not to pursue collection of

amounts related to these patients, and therefore contracts with these patients do not exist.

The Company's management estimates its costs of care provided under its charity care programs utilizing a calculated ratio of

costs to gross charges multiplied by the Company's gross charity care charges provided. The Company's gross charity care

charges include only services provided to patients who are unable to pay and qualify under the Company's local charity care

policies. To the extent the Company receives reimbursement through the various governmental assistance programs in which

it participates to subsidize its care of indigent patients, the Company does not include these patients' charges in its cost of care

provided under its charity care program.

Market Risks

The Company's revenue is subject to potential regulatory and economic changes in certain states where the Company

generates significant revenue. The following is an analysis by state of revenue as a percentage of the Company's total revenue

for those states in which the Company generates significant revenue:


	Three Months Ended March 31,
	2026	2025
Oklahoma	22.8%		24.6%
New Mexico	17.9%		14.0%
Texas	35.1%		37.6%
New Jersey	10.9%		10.7%
Other	13.3%		13.1%
Total	100.0%		100.0%

Acquisitions

Acquisitions are accounted for using the acquisition method of accounting and the results of operations are included in the

unaudited condensed consolidated income statement from the respective dates of acquisition. The purchase price of these

transactions is allocated to the assets acquired and liabilities assumed based upon their respective fair values at the date of

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acquisition and can be subject to change up to 12 months subsequent to the acquisition date due to settling amounts related to

purchased working capital and final determination of fair value estimates.

The Company is required to allocate the purchase price of acquired businesses to assets acquired and liabilities assumed and,

if applicable, noncontrolling interests based on their fair values. The Company records the excess of the purchase price

allocation over those fair values as goodwill.

Investments in Equity Securities

The Company holds an option to acquire equity securities of a privately held company (the “Investment”), and the Investment

does not have a readily determinable fair value. The Company has elected to account for the Investment using the

measurement alternative. Under the measurement alternative, an investment is recorded at cost, less impairment, if any, and

adjusted for observable price changes in orderly transactions involving identical or similar equity securities of the same

issuer. The Investment is not measured at fair value on a recurring basis.

During the three months ended March 31, 2026, the Company recorded an upward adjustment to the carrying value of the

Investment based on observable price changes in the form of equity financings of the privately held company. The adjustment

increased the carrying value of the Investment by $10.9 million, and the corresponding gain was recorded in other operating

expenses in the condensed consolidated income statement.

As of March 31, 2026, the carrying value of the Investment was $18.8 million, which was recorded in other assets in the

condensed consolidated balance sheet. The Company noted no observable price changes or transactions, nor did it recognize

any impairment charges, related to the Investment between the date of initial investment and December 31, 2025.

Fair Value of Financial Instruments

Cash and cash equivalents, accounts receivable, inventories, prepaid expenses, other current assets, accounts payable, accrued

salaries and benefits, accrued interest and other accrued expenses and current liabilities (other than those pertaining to lease

liabilities) are reflected in the accompanying unaudited condensed consolidated financial statements at amounts that

approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s revolving

credit facility also approximates its carrying value as it bears interest at current market rates. Refer to Note 5, Interest Rate

Swap Agreements, for discussion of the fair value measurement of the Company’s derivative instruments.

The carrying amounts and fair values of the Company’s senior secured term loan facility and its 5.75% Senior Notes due

2029 (the "5.75% Senior Notes") were as follows (in thousands):


	Carrying Amount		Fair Value
	March 31, 2026	December 31, 2025	March 31, 2026	December 31, 2025
Senior secured term loan facility	$768,743	$770,499	$768,743	$770,499
5.75% Senior Notes	$299,708	$299,686	$296,711	$295,191

The estimated fair values of the Company’s senior secured term loan facility and the 5.75% Senior Notes were based upon

quoted market prices at that date and are categorized as Level 2 within the fair value hierarchy.

Noncontrolling Interests

The financial statements include the financial position and results of operations of hospital and healthcare operations in which

the Company owned less than 100% of the equity interests, but maintained a controlling interest during the presented periods.

Earnings or losses attributable to the noncontrolling interests are presented separately in the consolidated income statements.

Holders of noncontrolling interests are considered to be equity holders in the consolidated company, pursuant to which

noncontrolling interests are classified as part of equity, unless the noncontrolling interests are redeemable. Certain redemptive

features associated with the noncontrolling interests for The University of Kansas Health System – St. Francis Campus ("St.

Francis") could require the Company to deliver cash if the redemptive features are exercised. These redemptive features could

be exercised upon, among other things, the Company’s exclusion or suspension from participation in any federal or state

government healthcare payor program. Therefore, the noncontrolling interests balance for St. Francis is classified outside the

permanent equity section of the Company’s unaudited condensed consolidated balance sheets.

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The redeemable noncontrolling interests related to St. Francis at March 31, 2026 and December 31, 2025 have not been

subsequently measured at fair value since the acquisition date in 2017. The noncontrolling interests are not currently

redeemable and it is not probable that the noncontrolling interests will become redeemable as the possibility of the Company

being excluded or suspended from participation in any federal or state government healthcare payor program is remote.

Earnings Per Share

Basic net income per share is computed by dividing net income available to common stockholders by the weighted-average

common shares outstanding during the period. Diluted net income per share takes into account the potential dilution that

could occur if securities or other contracts to issue shares, such as unvested restricted stock units, were exercised and

converted into shares. Diluted net income per share is computed by dividing net income available to common stockholders by

the weighted-average common shares outstanding during the period, increased by the number of additional shares that would

have been outstanding if the potential shares had been issued and were dilutive.

3. Related Party Transactions

Effective August 4, 2015, Ventas, Inc. ("Ventas"), through certain wholly-owned affiliates, acquired ownership of the

Company’s real estate in exchange for a $1.4 billion payment from Ventas and the Company’s agreement to lease the

acquired real estate back from Ventas (the “Ventas Master Lease”). The Ventas Master Lease is a 20-year master lease

agreement (with a renewal option for an additional 10 years) with certain subsidiaries of Ventas, pursuant to which the

Company currently leases 10 of the Company’s hospitals. The Ventas Master Lease includes an annual rent escalator equal to

the lesser of four times the Consumer Price Index or 2.5%. Variable lease payments are excluded from the Company’s

minimum rental payments used to determine the right-of-use assets and lease obligations and are recognized as expense when

incurred. The Ventas Master Lease includes a number of operating and financial restrictions on the Company. Management

believes the Company was in compliance with all financial covenants as of March 31, 2026.

The Company recorded rent expense related to the Ventas Master Lease and other lease agreements with Ventas for certain

medical office buildings of $38.7 million and $38.1 million for the three months ended March 31, 2026 and 2025,

respectively.

4. Long-Term Debt and Financing Matters

The Company's long-term debt consists of the following (in thousands):


	March 31, 2026	December 31, 2025
Senior secured term loan facility	$768,743	$770,499
5.75% Senior Notes	299,708	299,686
Senior secured revolving credit facility	—	—
Finance leases	22,928	24,536
Other debt	29,791	15,869
Deferred financing costs	(10,770)	(11,364)
Total debt	1,110,400	1,099,226
Less current maturities	(37,635)	(23,444)
Long-term debt, less current maturities	$1,072,765	$1,075,782

5. Interest Rate Swap Agreements

Market risks relating to the Company's operations result primarily from changes in interest rates. The Company's exposure to

interest rate risk results from the entry into financial debt instruments that arose from transactions entered into during the

normal course of business. As part of an overall risk management program, the Company evaluates and manages exposure to

changes in interest rates on an ongoing basis. The Company has no intention of entering into financial derivative contracts,

other than to hedge a specific financial risk. To mitigate the Company's exposure to fluctuations in interest rates, the

Company uses pay-fixed interest rate swaps, generally designated as cash flow hedges of interest payments on floating rate

borrowings. Pay-fixed swaps effectively convert floating-rate borrowings to fixed-rate borrowings. Unrealized gains or losses

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from the designated cash flow hedges and related tax effects are deferred in accumulated other comprehensive income

("AOCI") and recognized in earnings as the interest payments occur. Hedges and derivative financial instruments may

continue to be used in the future in order to manage interest rate exposure.

The Company has entered into interest rate swap agreements to manage its exposure to fluctuations in interest rates. The

valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow

analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives,

including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied

volatilities. The Company has determined the inputs used to value its derivatives fall within Level 2 of the fair value

hierarchy.

On October 8, 2021, the Company executed interest rate swap agreements (the "October 2021 Agreements") with Barclays

Bank PLC and Bank of America, N.A. as counterparties, with initial notional amounts totaling $529.0 million, effective

August 31, 2023 and expiring June 30, 2026. The notional amounts decline over time until expiration. Under the October

2021 Agreements, the Company was required to make monthly fixed rate payments at annual rates ranging from 1.53% to

1.55%, and the counterparties were required to make monthly floating rate payments to the Company based on one-month

LIBOR, each subject to a floor of 0.50%. Effective August 31, 2023, the Company amended the October 2021 Agreements to

adjust the fixed rates and replace the LIBOR floating interest rate options with Term SOFR floating rate options. Under the

amended October 2021 Agreements, the Company is required to make monthly fixed rate payments at annual rates ranging

from 1.47% to 1.48%, and the counterparties are required to make monthly floating rate payments to the Company based on

one-month Term SOFR, each subject to a floor of 0.39%. As of March 31, 2026, the notional amounts under the amended

October 2021 Agreements were $279.8 million.

On February 5, 2025, the Company executed new interest rate swap agreements (the "February 2025 Agreements") with

Truist Bank and Royal Bank of Canada, as counterparties, with an effective date of June 30, 2025 and expiring June 26, 2029.

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

when the amended October 2021 Agreements expire. Under the February 2025 Agreements, the Company is required to

make monthly fixed rate payments at annual rates ranging from 3.97% to 3.98% and the counterparties are required to make

monthly floating rate payments to the Company based on one-month Term SOFR, each subject to a floor of 0.50%. As of

March 31, 2026, the notional amounts under the February 2025 Agreements were $120.6 million.

The October 2021 Agreements and February 2025 Agreements are designated as cash flow hedges and recorded at fair value

on the Company’s unaudited condensed consolidated balance sheets with changes in fair value included in AOCI as a

component of equity and reclassified into interest expense in the same periods during which the hedge transactions affect

earnings.

The Company performs assessments of effectiveness for its cash flow hedges on a quarterly basis to confirm that the hedges

continue to meet the highly effective criteria required to continue applying cash flow hedge accounting. During the three

months ended March 31, 2026 and the year ended December 31, 2025, these hedges were highly effective. Accordingly, no

unrealized gain or loss related to these hedges was reflected in the accompanying unaudited condensed consolidated income

statements, and the change in fair value was included in AOCI as a component of equity. Realized gains and losses during the

periods have been reclassified from AOCI to interest expense.

The following table presents the effects of derivatives in cash flow hedging relationships on the Company's AOCI and

earnings (in thousands):


		Three Months Ended March 31,
	Classification	2026	2025
Unrealized income (loss) recognized	AOCI	$3,043	$(4,986)
Reclassification from AOCI into earnings	Interest expense, net	(1,468)	(2,875)
Net change in AOCI		$1,575	$(7,861)

In the 12 months following March 31, 2026, the Company estimates that an additional $0.5 million will be reclassified as a

reduction to interest expense.

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As of March 31, 2026 and December 31, 2025, the fair value of the Company’s interest rate swap agreements reflected a net

liability balance of $3.3 million and $4.9 million, respectively. The following table presents the fair value of the Company's

interest rate swap agreements as recorded in the unaudited condensed consolidated balance sheets (in thousands):


Classification	March 31, 2026	December 31, 2025
Assets:
Other current assets	$1,524	$2,891
Total interest rate swap assets	1,524	2,891
Liabilities:
Other accrued expenses and liabilities	1,014	1,750
Other long-term liabilities	3,818	6,024
Total interest rate swap liabilities	4,832	7,774
Fair value of interest rate swap agreements	$(3,308)	$(4,883)

6. Income Taxes

The Company's income tax provision was an expense of $16.1 million, which equates to an effective tax rate of 21.6%, and

$15.2 million, which equates to an effective tax rate of 20.5%, for the three months ended March 31, 2026 and 2025,

respectively.

At March 31, 2026 and December 31, 2025, the Company had no accrual for unrecognized tax benefits.

As of March 31, 2026, the Company had no ongoing or pending federal examinations for prior years. The Company has

outstanding federal income tax refund claims for the 2016 and 2018 tax years. At March 31, 2026, the refund claims totaled

$10.0 million and were included in other current assets on the Company's unaudited condensed consolidated balance sheet.

These refund claims are subject to ongoing Joint Committee on Taxation reviews, as well as a statute waiver through

December 31, 2026 that has been agreed to for the years 2016 through 2018. At March 31, 2026, interest income receivable

related to the refund claim totaled $2.2 million, which was included in other current assets. During the three months ended

March 31, 2026, the Company accrued $0.1 million of interest income related to the refund claim, which was included in the

Company's income tax expense. The Company's tax years from 2021 through 2025 remain open to examination by federal

and state taxing authorities.

7. Self-Insured Liabilities

The liabilities for professional, general, workers' compensation and occupational injury liability risks are based on actuarially

determined estimates. Liabilities for professional, general, workers' compensation and occupational injury liability risks

represent the estimated ultimate cost of all reported and unreported losses incurred through the respective balance sheet dates.

The Company provides an accrual for actuarially determined claims reported but not paid and estimates of claims incurred

but not reported.

Professional and General Liability

The total costs for professional and general liability losses are based on the Company's premiums and retention costs and

were $28.4 million and $17.0 million for the three months ended March 31, 2026 and 2025, respectively.

Workers' Compensation and Occupational Injury Liability

The total costs for workers' compensation liability insurance are based on the Company's premiums and retention costs and

were $2.3 million for each of the three months ended March 31, 2026 and 2025.

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8. Employee Benefit Plans

Defined Contribution Plan

The Company maintains defined contribution retirement plans that cover its eligible employees. The Company incurred total

costs related to the retirement plans of $15.5 million and $14.6 million for the three months ended March 31, 2026 and 2025,

respectively.

Employee Health Plan

The Company maintains a self-insured medical and dental plan for substantially all of its employees. The Company's reserve

for employee health costs includes amounts for reported claims, which are accrued upon occurrence, as well as a provision

for incurred but not reported claims, which are estimated based on an average lag time and experience. Accruals are based on

the estimated ultimate cost of settlement, including claim settlement expenses.

The total costs of employee health coverage were $42.2 million and $44.5 million for the three months ended March 31, 2026

and 2025, respectively.

9. Commitments and Contingencies

Litigation and Regulatory Matters

From time to time, claims and suits arise in the ordinary course of the Company's business. The Company has been, is

currently, and may in the future be subject to claims, lawsuits, qui tam actions, civil investigative demands, subpoenas,

investigations, audits and other inquiries related to its operations. In certain of these actions, plaintiffs request punitive or

other damages against the Company that may not be covered by insurance. These claims, lawsuits, and proceedings are in

various stages of adjudication or investigation and involve a wide variety of claims and potential outcomes. Depending on

whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution

could have a material adverse effect on the Company's results of operations, financial position or liquidity.

The Company records accruals for such contingencies to the extent that the Company concludes it is probable that a liability

has been incurred and the amount of the loss can be reasonably estimated. Apart from ongoing litigation associated with

unresolved professional liability claims as described above, management does not believe that the Company is party to any

proceeding that, either individually or in the aggregate, could have a material adverse effect on its business, financial

condition, results of operations or liquidity. However, in light of the inherent uncertainties involved, it is possible that the

settlement of these unresolved claims could have a material adverse impact on the Company’s future results of operations,

financial position, or liquidity.

Securities Litigation

On January 7, 2026, a purported stockholder filed a putative securities class action against the Company and certain current

officers in the lawsuit styled Postiwala v. Ardent Health, Inc., et al., Case No. 3:26-cv-00022, which is pending in the United

States District Court for the Middle District of Tennessee, Nashville Division. The complaint is brought on behalf of a

putative class consisting of all persons (other than defendants) who purchased Company securities between July 18, 2024 and

November 12, 2025, and alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934

(the “Exchange Act”) and Rule 10b-5 promulgated thereunder based on allegedly false and misleading statements and

omissions. Specifically, the complaint alleges that the Company incorrectly accounted for and reported on certain accounts

receivable and certain insurance reserves during 2024 and 2025 which caused its stock price to be inflated. The complaint

seeks unspecified monetary damages, recovery of fees and costs, and other relief that the court may find appropriate.

The Company intends to vigorously defend the claims made; however, currently no assessment can be made as to the likely

outcome. At this time, the Company is not able to reasonably estimate the amount or range of the ultimate liability, if any, in

connection with this case.

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Derivative Action

On February 26, 2026, a stockholder derivative action styled Thompson v. Sotir, et al., Case No 3:26-cv-00219 was filed in

the United States District Court for Middle District of Tennessee, Nashville Division, against certain current officers and

directors. The Company is named as a nominal defendant only. The factual basis of the complaint is largely the same as in the

Postiwala case mentioned above but includes some additional allegations. The complaint alleges breaches of fiduciary duties,

gross mismanagement, waste of corporate assets, unjust enrichment, and violation of Section 14(a) of the Securities

Exchange Act of 1934. The complaint seeks unspecified monetary damages, restitution, the adoption of certain governance

reforms, recovery of fees and costs, and other relief that the court may find appropriate.

The Company intends to vigorously defend the claims made; however, currently no assessment can be made as to the likely

outcome. At this time, the Company is not able to reasonably estimate the amount or range of the ultimate liability, if any, in

connection with this case.

Cybersecurity Incident Litigation

In November 2023, the Company determined that a ransomware cybersecurity incident had impacted and disrupted a number

of the Company's operational and information technology systems (the "Cybersecurity Incident"). During this time, the

Company's hospitals remained operational and continued to deliver patient care utilizing established downtime procedures.

The Company immediately suspended user access to impacted information technology applications, executed cybersecurity

protection protocols, and took steps to restrict further unauthorized activity. Additionally, because of the time taken to contain

and remediate the Cybersecurity Incident, online electronic billing systems were not functioning at their full capacities and

certain billing, reimbursement and payment functions were delayed, which had an adverse impact on the Company's results

of operations and cash flows for 2023 and the first quarter of 2024.

As a result of the Cybersecurity Incident, three putative class actions were filed against the Company in the U.S. District

Court for the Middle District of Tennessee: Burke v. AHS Medical Holdings LLC, No. 3:23-cv-01308; Redd v. AHS Medical

Holdings, LLC, No. 3:23-cv-01342; and Epperson v. AHS Management Company, Inc., No. 3:24-cv-00396. These cases

were consolidated by the District Court on April 24, 2024, under the caption Hodge v. AHS Management Company, Inc., No.

3:23-cv-01308 (M.D. Tenn.). The complaint for the consolidated class action, filed on behalf of approximately 38,000

individuals who alleged their personal information and protected health information were affected by the Cybersecurity

Incident, generally asserted state common law claims of negligence, breach of implied contract, unjust enrichment, breach of

fiduciary duty, and invasion of privacy with respect to how the Company managed sensitive data. On October 4, 2024, the

Company executed a settlement agreement to resolve the consolidated class action litigation. 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 the Company 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 the Company to implement the agreed

upon settlement of the consolidated case. Pursuant to the settlement, the Company made settlement payments, the total of

which did not have a material impact on the Company's results of operations, financial position or liquidity. Upon entry of the

Final Order, the clerk was ordered to close the case.

During the three months ended March 31, 2025, the Company received $21.5 million of business insurance recovery

proceeds related to the Cybersecurity Incident, all of which was included in other non-operating gains on the Company's

condensed consolidated income statement. No business insurance recovery proceeds related to the Cybersecurity Incident

were received during the three months ended March 31, 2026.

Acquisitions

The Company has acquired, and plans to continue to acquire, businesses with prior operating histories. Acquired companies

may have unknown or contingent liabilities, including liabilities for failure to comply with healthcare laws and regulations,

such as billing and reimbursement, fraud and abuse and anti-kickback laws. The Company has from time to time identified

certain past practices of acquired companies that do not conform to its standards. Although the Company institutes policies

designed to conform such practices to its standards following completion of acquisitions, there can be no assurance that the

Company will not become liable for the past activities of these acquired facilities that may later be asserted to be improper by

private plaintiffs or government agencies. Although the Company generally seeks to obtain indemnification from prospective

sellers covering such matters, there can be no assurance that any such matter will be covered by indemnification or, if

covered, that such indemnification will be adequate to cover potential losses and fines.

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10. Segments

The Company has one reportable segment, which is healthcare services. The healthcare services segment generates revenues

by delivering care to its customers, or patients, through its integrated network of hospitals, ambulatory facilities, and

physician practices. The Company's Chief Operating Decision Maker ("CODM") is its President and Chief Executive Officer,

who regularly reviews financial operating results on a consolidated basis for purposes of allocating resources and evaluating

financial performance. The Company's CODM manages the operations on a consolidated basis to make decisions about

overall Company resource allocation and to assess overall Company performance.

The CODM's assessment of segment performance and allocation of segment resources is based on consolidated net income

attributable to Ardent Health, Inc. The CODM uses this consolidated profitability measure to monitor budget versus actual

results, compare Company profitability period-over-period and make capital investment decisions.

The following table presents the composition of consolidated net income attributable to Ardent Health, Inc. for the healthcare

services segment, including significant expenses that are regularly provided to and reviewed by the CODM (in thousands):


		Three Months Ended March 31,
		2026	2025
Total revenue		$1,601,870	$1,497,234
Less:
Employee salaries and benefits		646,895	632,843
Contract labor		14,536	24,809
Supplies		268,553	258,855
Medical professional fees		122,525	103,871
Contract services		194,545	176,986
Other segment items (1)		314,966	258,487
Net income attributable to Ardent Health, Inc.		$39,850	$41,383

(1)	Other segment items included in net income attributable to Ardent Health, Inc. for each of the periods presented primarily consists of rent expense, interest expense, depreciation and amortization, income tax expense, other operating expenses, other non-operating gains and net income attributable to noncontrolling interests.

The measure of segment assets is reported on the unaudited condensed consolidated balance sheets as total assets. The

accounting policies for the segment are consistent with the consolidated accounting policies provided in Note 2.

As of March 31, 2026 and December 31, 2025, all of the Company's long-lived assets were located in the United States, and

for the three months ended March 31, 2026 and 2025, all revenue was earned in the United States.

11. Earnings Per Share

Basic net income per share is computed by dividing net income attributable to common stockholders by the weighted-average

number of common shares outstanding. Diluted net income per share is computed by dividing net income attributable to

common stockholders by the weighted-average number of common shares outstanding plus the dilutive effect of outstanding

securities, and such dilutive effect is computed using the treasury stock method.

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The following table sets forth the computation of basic and diluted net income per share (in thousands, except share and per

share amounts):


	Three Months Ended March 31,
	2026	2025
Basic:
Net income attributable to common stockholders	$39,850	$41,383
Weighted-average number of common shares	141,266,013	140,062,284
Net income per common share	$0.28	$0.30

Diluted:
Net income attributable to common stockholders	$39,850	$41,383
Weighted-average number of common shares	141,775,040	140,704,075
Net income per common share	$0.28	$0.29

The following table sets forth the components of the denominator for the computation of basic and diluted net income per

share for net income attributable to Ardent Health, Inc. stockholders:


		Three Months Ended March 31,
		2026	2025
Weighted-average number of common shares - basic		141,266,013	140,062,284
Effect of dilutive securities(1)		509,027	641,791
Weighted-average number of common shares - diluted		141,775,040	140,704,075

(1)	The effect of dilutive securities does not reflect weighted-average potential common shares from restricted stock and restricted stock units of 3,982,055 and 432,792 for the three months ended March 31, 2026 and 2025, respectively, because their effect was antidilutive as calculated under the treasury stock method.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Management's discussion and analysis of financial condition and results of operations should be read in conjunction with our

interim unaudited condensed consolidated financial statements and related notes contained elsewhere in this Quarterly

Report on Form 10-Q for the quarter ended March 31, 2026 (this "Quarterly Report") and our audited consolidated financial

statements for the year ended December 31, 2025 and related notes contained in our Annual Report. The following

discussion includes 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 in the Annual Report.

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

operations. 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 Quarterly Report, including the following discussion, may contain certain "forward-looking statements," as that term is

defined in the U.S. federal securities laws. These forward-looking statements include, but are not limited to, statements other

than statements of historical facts, including, among others, statements relating to our future financial performance, our

business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which we operate

and other similar matters. 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 the Annual Report. These risks and uncertainties could cause actual results to

differ materially from those projected in forward-looking statements contained in this Quarterly 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) 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

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; (8) inability to recruit and

retain quality physicians and increased labor costs resulting from increased competition for staffing or a continued or

increased shortage of experienced nurses, as well as the loss of key personnel, including key members of our management

team; (9) changes to physician utilization practices and treatment methodologies and other factors outside our control that

impact demand for medical services and may reduce our revenues and ability to grow profitability; (10) continued industry

trends toward value-based purchasing, third party payor consolidation and care coordination among healthcare providers;

(11) inability to successfully complete acquisitions or strategic JVs or inability to realize all of the anticipated benefits; (12)

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liabilities because of professional liability and other claims brought against our hospitals, physician practices, outpatient

facilities or other business operations; (13) exposure to certain risks and uncertainties by the JVs through which we conduct a

significant portion of our operations, including anticipated synergies of past acquisitions and the risk that transactions may

not receive necessary government clearances; (14) failure to obtain drugs and medical supplies at favorable prices or

sufficient volumes; (15) operational, legal and financial risks associated with outsourcing functions to third parties; (16) our

facilities are heavily concentrated in Texas and Oklahoma, which makes us sensitive to regulatory, economic and competitive

conditions and changes in those states; (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; (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; (21) the impact of governmental claims or governmental investigations, payor

audits and litigation brought against our hospitals, physician practices, outpatient facilities or other business operations; (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) actual or perceived failures to comply with applicable data protection, privacy and

security laws, regulations, standards and other requirements could adversely affect our business, results of operations and

financial condition; (25) inability to or delay in building, acquiring, selling, renovating or expanding our healthcare facilities;

(26) failure to comply with federal and state laws relating to Medicare and Medicaid enrollment, permit, licensing and

accreditation requirements; (27) 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; (28) our status as a controlled

company; (29) conflicts of interest between our controlling stockholder and other holders of our common stock; and (30)

other risk factors described in our filings with the SEC, including the Annual Report.

We caution you that the foregoing list may not contain all the forward-looking statements made in this Quarterly Report. You

should not rely upon forward-looking statements as predictions of future events.

The forward-looking statements in this Quarterly Report are based on management's current beliefs, expectations, and

projections about future events and trends affecting our business, results of operations, financial condition, and prospects.

These statements are subject to risks, uncertainties, and other factors described in the "Risk Factors" section of the Annual

Report. We operate in a competitive and rapidly changing environment where new risks and uncertainties can emerge,

making it impossible to predict all potential impacts on our forward-looking statements. Consequently, actual results may

differ materially from those described. The forward-looking statements pertain only to the date they are made, and we do not

undertake any obligation to update them to reflect new information or events unless required by law. You are advised not to

place undue reliance on these statements and to consult any additional disclosures we may provide through our other filings

with the SEC, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Overview

We are a leading provider of healthcare services in the United States, operating in eight growing mid-sized urban markets

across six states: Texas, Oklahoma, New Mexico, New Jersey, Idaho and Kansas. As of March 31, 2026, 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. Affiliated providers are physicians and advanced practice providers with whom we contract for services through a

professional services agreement or other independent contractor agreement. We hold a leading position in a majority of our

markets, and we believe we are one of the leading healthcare systems based on market share and our integrated network of

hospitals, ambulatory facilities, and physician practices. We operate either independently or in partnership with premier

academic medical centers, large not-for-profit hospital systems, community physicians, and a community foundation through

our well-established and differentiated JV model. Collectively, we operate as a unified organization with a consumer-centric

approach to caring for our patients and our communities. Our strategic JV partners offer us significant advantages, including

expanded access points, clinical talent availability, local brand recognition, and scale that enable us to accelerate market

penetration. We believe that we help our partners enhance their network and regional presence through our operational

acumen. We strive to strengthen clinical services, drive operating improvements, and centrally manage operations to optimize

hospital performance and enhance patient care. In each of these partnerships, we are the majority owner and serve as the day-

to-day operator.

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Recent Developments

Term Loan B Facility Refinancing

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.

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 are not expected to have a material impact on our

effective tax rate.

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. For example, legislation that increases the federal deficit in the future could result in

automatic sequestration under the Pay-As-You-Go Act of 2010, which could result in cuts to Medicare reimbursement of up

to 4% if Congress does not take action to waive the sequestration.

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 federal enhanced subsidies of ACA marketplace

exchange-based plans expired at the end of 2025 and were not extended by the OBBBA, 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.

In September 2025, the Centers for Medicare & Medicaid Services ("CMS") began implementing the Rural Health

Transformation Program ("RHTP"), a federal initiative established by the OBBBA to support the stabilization and

modernization of healthcare delivery in rural communities nationwide. CMS indicated that funding allocations will be made

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available to all 50 states, with states responsible for determining the structure and timing of distributions to eligible healthcare

participants. The RHTP authorizes total federal funding of $50 billion to be distributed over five federal fiscal years, with $10

billion available annually from federal fiscal years 2026 through 2030. Funding may be awarded by states through

subawards, subcontracts, or other arrangements, including payments for qualifying healthcare items and services, subject to

program requirements, funding policies, and other limitations. All authorized funds must be expended by October 1, 2032.

The RHTP is intended, in part, to mitigate the impact of certain Medicaid funding reductions enacted as part of the OBBBA.

However, the total funding available under the program is expected to be significantly less than the aggregate Medicaid

spending reductions included in the legislation, and there can be no assurance regarding the amount or timing of any RHTP

funding that may ultimately be available to providers. We are eligible to participate in the RHTP in all of the states in which

we operate, and we will continue to monitor state‑level program development and funding opportunities as implementation

progresses. During the three months ended March 31, 2026, no RHTP funds were obligated to or received by us.

Key Factors Impacting Our Results of Operations

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. We compete with other healthcare providers in

recruiting and retaining qualified management and support personnel responsible for the daily operations of each of our

hospitals and other facilities, including nurses and other non-physician healthcare professionals. At times, the availability of

nurses and other medical support personnel has been a significant operating issue for healthcare providers, including at

certain of our facilities. The impact of labor shortages across the healthcare industry may result in other healthcare facilities,

such as nursing homes, limiting admissions, which may constrain our ability to discharge patients to such facilities and

further exacerbate the demand on our resources, supplies and staffing.

We contract with various third parties who provide hospital-based physicians. Third party providers of hospital-based

physicians, including those with whom we contract, have experienced significant disruption in the form of regulatory

changes, including those stemming from enactment of the No Surprises Act, challenging labor market conditions resulting

from a shortage of physicians and inflationary wage-related pressures, as well as increased competition through consolidation

of physician groups. In some instances, providers of outsourced medical specialists have become insolvent and unable to

fulfill their contracts with us for providing hospital-based physicians. The success of our hospitals depends in part on the

adequacy of staffing, including through contracts with third parties. If we are unable to adequately contract with providers, or

the providers with whom we contract become unable to fulfill their contracts, our admissions may decrease, and our operating

performance, capacity and growth prospects may be adversely affected. Further, our efforts to mitigate the potential impact

on our business from third party providers who are unable to fulfill their contracts to provide hospital-based physicians,

including through acquisitions of outsourced medical specialist businesses, employment of physicians and re-negotiation or

assumption of existing contracts, may be unsuccessful. These developments with respect to providers of outsourced medical

specialists, and our inability to effectively respond to and mitigate the potential impact of such developments, may disrupt our

ability to provide healthcare services, which may adversely impact our business, financial condition and results of operations.

We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we

operate. 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.

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Seasonality

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

typically experience such seasonal volume and revenue peaks because more people generally become ill during the winter

months, which in turn results in significant increases in the number of patients we treat during those months. In addition,

revenue in the fourth quarter is also impacted by increased utilization of services due to annual deductibles, which are not

usually met until later in the year, and patient utilization of their healthcare benefits before they expire at year-end.

Inflation

The healthcare industry is labor intensive. Wages and other expenses increase during periods of inflation and when labor

shortages occur in the marketplace. In addition, our suppliers pass along rising costs to us in the form of higher prices. We

have implemented cost control measures in an attempt to curb increases in operating costs and expenses. We have generally

offset increases in operating costs by increasing reimbursement for services, expanding services and reducing costs in other

areas. However, we cannot predict our ability to cover or offset future cost increases, particularly any increases in our cost of

providing health insurance benefits to our employees.

Geographic Data

The information below provides an overview of our operations in certain markets as of March 31, 2026.

Texas. We operated 13 acute care hospital facilities (including one managed hospital that is owned by The University of

Texas Health Science Center at Tyler, an affiliate of The University of Texas System) with 1,436 licensed beds that serve the

areas of Tyler, Amarillo and Killeen, Texas. For the three months ended March 31, 2026, we generated 35.1% of our total

revenue in the Texas market.

Oklahoma. We operated eight acute care hospital facilities with 1,173 licensed beds that serve the area of Tulsa, Oklahoma.

For the three months ended March 31, 2026, we generated 22.8% of our total revenue in the Oklahoma market.

New Mexico. We operated five acute care hospital facilities with 619 licensed beds that serve the areas of Albuquerque and

Roswell, New Mexico. For the three months ended March 31, 2026, we generated 17.9% of our total revenue in the New

Mexico market.

New Jersey. We operated two acute care hospital facilities with 476 licensed beds that serve the areas of Montclair and

Westwood, New Jersey. For the three months ended March 31, 2026, we generated 10.9% of our total revenue in the New

Jersey market.

Other Industry Trends

The demand for healthcare services continues to be impacted by the following trends:

•A growing focus on healthcare spending by consumers, employers and insurers, who are actively seeking lower-cost

care solutions;

•A shift in patient volumes from inpatient to outpatient settings due to technological advancements and demand for

care that is more convenient, affordable and accessible;

•The growing aged population, which requires greater chronic disease management and higher-acuity treatment; and

•Ongoing consolidation of providers and insurers across the healthcare industry.

Additionally, the healthcare industry, particularly acute care hospitals, continues to be subject to ongoing regulatory

uncertainty. Changes in federal or state healthcare laws, regulations, funding policies or reimbursement practices, especially

those involving reductions to government payment rates or limitations on what providers may charge, could significantly

impact future revenue and operations. 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. 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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Results of Operations

Revenue and Volume Trends

Our revenue depends upon inpatient occupancy levels, ancillary services and therapy programs ordered by physicians and

provided to patients, the volume of outpatient procedures and the charges and negotiated payment rates for such services.

Total revenue is comprised of net patient service revenue and other revenue. We recognize patient service revenue in the

period in which we provide services. Patient service revenue includes amounts we estimate to be reimbursable by Medicare,

Medicaid and other payors under provisions of cost or prospective reimbursement formulas in effect. The amounts we receive

from these payors are generally less than the established billing rates, and we report patient service revenue net of these

differences (contractual adjustments) at the time we render the services. We also report patient service revenue net of the

effects of other arrangements where we are reimbursed for services at less than established rates, including certain self-pay

adjustments provided to uninsured patients. 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.

Total revenue for the three months ended March 31, 2026 increased $104.6 million, or 7.0%, compared to the same prior year

period. The increase in total revenue for the three months ended March 31, 2026 was driven by an increase in adjusted

admissions of 2.0% and an increase in net patient service revenue per adjusted admission of 5.5%. The increase in adjusted

admissions reflected growth in total surgeries of 1.2%, offset by a decline in admissions and emergency room visits of 1.1%

and 3.2%, respectively. Growth in adjusted admissions also was attributable to an increase in outpatient services relative to

inpatient services. The increase in net patient service revenue per adjusted admission was primarily attributable to an increase

in revenue from Medicaid supplemental payment programs compared to the same prior year period. During the three months

ended March 31, 2026 and 2025, we recorded revenue of $187.8 million and $108.9 million, respectively, related to Medicaid

supplemental payment programs. The increase in revenue from Medicaid supplemental payment programs during the three

months ended March 31, 2026 was primarily attributable to the delayed renewal of New Mexico's Healthcare Delivery and

Access Act during the prior year.

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 three months ended March 31, 2026 and

2025, total revenue related to these entities was $470.2 million and $428.6 million, respectively, which represented 29.4%

and 28.6%, respectively, of our total revenue for such periods.

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


	Three Months Ended March 31,
	2026	2025
Medicare	41.8%	39.8%
Medicaid	9.9%	10.0%
Other managed care	42.7%	43.1%
Self-pay and other	4.5%	5.4%
Net patient service revenue	98.9%	98.3%
Other revenue	1.1%	1.7%
Total revenue	100.0%	100.0%

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The following table provides information on certain drivers of our total revenue:


	Three Months Ended March 31,
	2026	% Change	2025
Operating Statistics
Total revenue (in thousands)	$1,601,870	7.0%	$1,497,234
Hospitals operated (at period end) (1)	30	0.0%	30
Licensed beds (at period end) (2)	4,281	0.0%	4,281
Utilization of licensed beds (3)	51%	2.0%	50%
Admissions (4)	40,932	(1.1)%	41,389
Adjusted admissions (5)	86,244	2.0%	84,536
Inpatient surgeries (6)	9,256	0.1%	9,250
Outpatient surgeries (7)	22,086	1.7%	21,712
Total surgeries	31,342	1.2%	30,962
Emergency room visits (8)	156,168	(3.2)%	161,249
Patient days (9)	197,129	0.5%	196,214
Total encounters (10)	1,564,114	7.8%	1,450,629
Average length of stay (11)	4.82	1.7%	4.74
Net patient service revenue per adjusted admission (12)	$18,367	5.5%	$17,402

(1)"Hospitals operated (at period end)." This metric represents the total number of hospitals operated by us at the end of the applicable period, irrespective of

whether the hospital real estate is (i) owned by us, (ii) leased by us or (iii) held through a controlling interest in a JV. 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 The University of Texas Health

Science Center at Tyler ("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 by us.

(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.

(3)"Utilization of licensed beds." This metric represents a measure of the actual utilization of our inpatient facilities, computed by (i) dividing patient days by the

number of days in each period, and (ii) further dividing that number by average licensed beds, which is calculated by dividing total licensed beds (at period end)

by the number of days in the period, multiplied by the number of days in the period the licensed beds were in existence.

(4)"Admissions." This metric represents the number of patients admitted for inpatient treatment during the applicable period.

(5)"Adjusted admissions." This metric is used by management as a general measure of combined inpatient and outpatient volume. Adjusted admissions provides

management with a key performance indicator that considers both inpatient and outpatient volumes by applying an inpatient volume measure (admissions) to a

ratio of gross inpatient and outpatient revenue to gross inpatient revenue. Gross inpatient and outpatient revenue reflect gross inpatient and outpatient charges

prior to estimated contractual adjustments, uninsured discounts, implicit price concessions, and other discounts. The calculation of adjusted admissions is

summarized as follows:

Adjusted Admissions = Admissions x (Gross Inpatient Revenue + Gross Outpatient Revenue)

Gross Inpatient Revenue

(6)"Inpatient surgeries." This metric represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain management, c-

sections, and certain diagnostic procedures are excluded from inpatient surgeries.

(7)"Outpatient surgeries." This metric represents the number of surgeries performed on patients who have not been admitted to our hospitals. Pain management, c-

sections, and certain diagnostic procedures are excluded from outpatient surgeries.

(8)"Emergency room visits." This metric represents the total number of patients provided with emergency room treatment during the applicable period.

(9)"Patient days." This metric represents the total number of days of care provided to patients admitted to our hospitals during the applicable period.

(10)"Total encounters." This metric represents the total number of events where healthcare services are rendered resulting in a billable event during the applicable

period. This includes both hospital and ambulatory patient interactions.

(11)"Average length of stay." This metric represents the average number of days admitted patients stay in our hospitals.

(12)"Net patient service revenue per adjusted admission." This metric represents net patient service revenue divided by adjusted admissions for the applicable

period. Net patient service revenue reflects gross inpatient and outpatient charges less estimated contractual adjustments, uninsured discounts, implicit price

concessions, and other discounts.

Overview of the Three Months Ended March 31, 2026

Total revenue for the three months ended March 31, 2026 increased $104.6 million, or 7.0%, compared to the same prior year

period. The increase in total revenue for the three months ended March 31, 2026 was driven by an increase in adjusted

admissions of 2.0% and an increase in net patient service revenue per adjusted admission of 5.5%. The increase in adjusted

admissions reflected growth in total surgeries of 1.2%, offset by a decline in admissions and emergency room visits of 1.1%

and 3.2%, respectively. Growth in adjusted admissions also was attributable to an increase in outpatient services relative to

inpatient services. The increase in net patient service revenue per adjusted admission was primarily attributable to an increase

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in revenue from Medicaid supplemental payment programs of $78.9 million compared to the same prior year period. The

increase in revenue from Medicaid supplemental payment programs during the three months ended March 31, 2026 was

primarily attributable to the delayed renewal of New Mexico's Healthcare Delivery and Access Act during the prior year.

Total operating expenses increased $104.2 million, and increased 0.3% as a percentage of total revenue, for the three months

ended March 31, 2026 compared to the same prior year period. The increase in total operating expenses as a percentage of

total revenue was primarily driven by increases in other operating expenses and professional fees and a decrease in other non-

operating gains. The increase in other operating expenses as a percentage of total revenue was primarily driven by increased

provider assessments related to Medicaid supplemental payment programs during the three months ended March 31, 2026 as

compared to the same prior year period. The increase in professional fees as a percentage of total revenue was primarily

driven by higher costs for hospital based providers due to higher patient volumes and rising physician related expenses during

the three months ended March 31, 2026 as compared to the same prior year period. The decrease in other non-operating gains

as a percentage of total revenue was primarily due to the recognition of $21.5 million in insurance recovery proceeds during

the three months ended March 31, 2025 related to a cybersecurity incident that impacted our operations and information

technology systems in November 2023 (the "Cybersecurity Incident"). The increase in total operating expenses as a

percentage of total revenue was partially offset by decreases in salaries and benefits and supplies as percentages of total

revenue due to a combination of decreased contract labor, ongoing productivity and supply chain initiatives, and increased

revenue from Medicaid supplemental payment programs.

Comparison of the Three Months Ended March 31, 2026 and 2025

Total revenue — Total revenue for the three months ended March 31, 2026 increased $104.6 million, or 7.0%, compared to

the same prior year period. The increase in total revenue for the three months ended March 31, 2026 was driven by an

increase in adjusted admissions of 2.0% and an increase in net patient service revenue per adjusted admission of 5.5%. The

increase in adjusted admissions reflected growth in total surgeries of 1.2%, offset by a decline in admissions and emergency

room visits of 1.1% and 3.2%, respectively. Growth in adjusted admissions also was attributable to an increase in outpatient

services relative to inpatient services. The increase in net patient service revenue per adjusted admission was primarily

attributable to an increase in revenue from Medicaid supplemental payment programs of $78.9 million compared to the same

prior year period. The increase in revenue from Medicaid supplemental payment programs during the three months ended

March 31, 2026 was primarily attributable to the delayed renewal of New Mexico's Healthcare Delivery and Access Act

during the prior year.

Salaries and benefits — Salaries and benefits as a percentage of total revenue were 41.3% for the three months ended March

31, 2026 compared to 43.9% for the same prior year period. The decrease in salaries and benefits as a percentage of total

revenue was attributable to a decrease in contract labor expense of $10.3 million driven by continued recruiting and retention

initiatives. Total contract labor expenses, as a percentage of total salaries and benefits, were 2.2% and 3.8% for the three

months ended March 31, 2026 and 2025, respectively. The decrease in salaries and benefits as a percentage of total revenue

was also attributable to the ongoing execution of strategic productivity initiatives and an increase in revenue from Medicaid

supplemental payment programs compared to the same prior year period.

Professional fees — Professional fees as a percentage of total revenue were 19.8% for the three months ended March 31,

2026 compared to 18.8% for the same prior year period. The increase in professional fees as a percentage of total revenue

was primarily attributable to higher costs for hospital based providers during the three months ended March 31, 2026

compared to the same prior year period.

Supplies — Supplies as a percentage of total revenue were 16.8% for the three months ended March 31, 2026 compared to

17.3% for the same prior year period. The decrease in supplies as a percentage of total revenue was primarily attributable to

an increase in revenue from Medicaid supplemental payment programs compared to the same prior year period and ongoing

supply chain initiatives.

Rents and leases — Rents and leases were $27.1 million and $27.8 million for the three months ended March 31, 2026 and

2025, respectively.

Rents and leases, related party — Rents and leases, related party, consisted of lease expense related to the Ventas Master

Lease and other lease agreements with Ventas for certain medical office buildings. Rents and leases, related party, were $38.7

million and $38.1 million for the three months ended March 31, 2026 and 2025, respectively.

Other operating expenses — Other operating expenses as a percentage of total revenue were 10.2% for the three months

ended March 31, 2026 compared to 8.7% for the same prior year period. Other operating expenses are comprised primarily of

repairs and maintenance, utility, insurance (including professional liability insurance) and provider assessments. The increase

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in other operating expenses as a percentage of total revenue was primarily due to increases in provider assessments related to

Medicaid supplemental payment programs and professional and general liability losses compared to the same prior year

period, partially offset by a pre-tax gain of $10.9 million associated with an increase in the carrying value of an investment

option we hold in a privately held company recognized during the three months ended March 31, 2026.

Interest expense — Interest expense was $12.2 million and $14.2 million for the three months ended March 31, 2026 and

2025, respectively.

Other non-operating gains — Other non-operating gains were $5.9 million and $21.3 million for the three months ended

March 31, 2026 and 2025, respectively. During the three months ended March 31, 2025, other non-operating gains included a

gain on business interruption insurance proceeds of $21.5 million related to the Cybersecurity Incident.

Income tax expense — We recorded income tax expense of $16.1 million, which equates to an effective tax rate of 21.6%, for

the three months ended March 31, 2026 compared to income tax expense of $15.2 million, which equates to an effective tax

rate of 20.5%, for the same prior year period.

Net income attributable to noncontrolling interests — During the three months ended March 31, 2026 and 2025, net income

attributable to noncontrolling interests was $18.6 million and $17.6 million, respectively, which consists 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. Income from operations before income taxes related to these limited liability

companies was $62.9 million and $62.6 million for the three months ended March 31, 2026 and 2025, respectively.

Supplemental Non-GAAP Information

We have included certain financial measures that have not been prepared in a manner that complies with U.S. generally

accepted accounting principles ("GAAP"), including Adjusted EBITDA and Adjusted EBITDAR. We define these terms as

follows:

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 other non-operating losses; Cybersecurity Incident recoveries, net of incremental information

technology and litigation costs; certain legal matters and related costs; other expenses, including development,

restructuring and enterprise system conversion costs; equity-based compensation expense; and (income) loss 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 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."

Supplemental Non-GAAP Performance Measure

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 prepared in accordance with GAAP and is presented in this Quarterly

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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Because not all companies use identical calculations, our presentation of the non-GAAP measure may not be comparable to

other similarly titled measures of other companies.

While we believe this is a useful supplemental performance measure for investors and other users of our financial

information, you should not consider the non-GAAP measure in isolation or as a substitute for net income or any other items

calculated in accordance with GAAP. Adjusted EBITDA has inherent material limitations as a performance measure, because

it adds back certain expenses to net income, resulting in those expenses not being taken into account in the performance

measure. We have borrowed money, so interest expense is a necessary element of our costs. Because we have material capital

and intangible assets, depreciation and amortization expense are necessary elements of our costs. Likewise, the payment of

taxes is a necessary element of our operations. Because Adjusted EBITDA excludes these and other items, it has material

limitations as a measure of our performance.

The following table presents a reconciliation of Adjusted EBITDA, a performance measure, to net income, determined in

accordance with GAAP:


	Three Months Ended March 31,
(in thousands)	2026	2025
Net income	$58,488	$58,965
Adjusted EBITDA Addbacks:
Income tax expense	16,103	15,233
Interest expense	12,211	14,176
Depreciation and amortization	42,986	36,201
Noncontrolling interest earnings	(18,638)	(17,582)
Other non-operating losses (a)	—	217
Cybersecurity Incident recoveries, net (b)	—	(19,705)
Certain legal matters and related costs	2,002	—
Other expenses, including development, restructuring and enterprise system conversion costs (c)	7,788	1,407
Equity-based compensation	8,929	9,263
(Income) loss from disposed operations	(5,883)	26
Adjusted EBITDA	$123,986	$98,201

(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)Other expenses, including development, restructuring and enterprise system conversion costs include (i) salaries and benefits of $4.3

million for the three months ended March 31, 2026, (ii) professional fees of $3.3 million and $1.2 million for the three months ended

March 31, 2026 and 2025, respectively, and (iii) other expenses of $0.2 million for each of the three months ended March 31, 2026 and

2025.

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Liquidity and Capital Resources

Liquidity

Our primary sources of liquidity are available cash and cash equivalents, cash flows from our operations and available

borrowings under our ABL Facilities (as defined below). Our primary cash requirements are our operating expenses, the

service of our debt, capital expenditures on our existing properties, acquisitions of hospitals and other healthcare facilities,

and distributions to noncontrolling interests. We believe the combination of cash flow from operations and available cash and

borrowings will be adequate to meet our short-term liquidity needs. Our ability to make scheduled payments of principal, pay

interest on, or refinance, our indebtedness, pay distributions or fund planned capital expenditures will depend on our ability to

generate cash in the future. This ability is, to a certain extent, subject to general economic, financial, competitive, legislative,

regulatory and other factors that are beyond our control.

At March 31, 2026, we had total cash and cash equivalents of $609.7 million and available liquidity of $878.9 million. Our

available liquidity was comprised of $609.7 million of total cash and cash equivalents plus $269.2 million in available

capacity under the ABL Credit Agreement, which is reduced by outstanding borrowings and outstanding letters of credit. At

March 31, 2026, our net leverage ratio was 1.0x, and our lease-adjusted net leverage ratio was 2.6x. Our lease-adjusted net

leverage is calculated as net debt as of March 31, 2026, plus 8.0x trailing twelve month REIT rent expense as of the end of

the first quarter of 2026, divided by the trailing twelve month Adjusted EBITDAR as of March 31, 2026.

Cash Flows

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


	Three Months Ended March 31,
	2026	2025
Net cash used in operating activities	$(60,222)	$(24,787)
Net cash used in investing activities	(27,901)	(23,122)
Net cash used in financing activities	(11,786)	(13,832)

Operating Activities

Cash flows used in operating activities for the three months ended March 31, 2026 totaled $60.2 million compared to $24.8

million for the same prior year period. The decrease in operating cash flows during the three months ended March 31, 2026

was primarily attributable to negative changes in net working capital of $32.6 million. The changes in net working capital

primarily consisted of an increase in prepaid expenses and other current assets driven primarily by the timing of annual

insurance premium renewals and Medicaid supplemental payment program assessments and funding, partially offset by

changes in accounts receivable and accounts payable and accrued expenses due to the timing of cash collections and

payments compared to the same prior year period.

Investing Activities

Cash flows used in investing activities for the three months ended March 31, 2026 totaled $27.9 million compared to $23.1

million for the same prior year period. Capital expenditures for non-acquisitions were $28.1 million and $22.9 million for the

three months ended March 31, 2026 and 2025, respectively.

Financing Activities

Cash flows used in financing activities for the three months ended March 31, 2026 totaled $11.8 million compared to $13.8

million for the same prior year period. Cash flows used in financing activities for the three months ended March 31, 2026

included distributions paid to noncontrolling interests of $21.3 million, payments of principal on long-term debt of $3.6

million, and payments of principal on insurance financing arrangements of $2.8 million, which were partially offset by

proceeds from insurance financing arrangements of $17.0 million.

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Cash flows used in financing activities for the three months ended March 31, 2025 included distributions paid to

noncontrolling interests of $19.2 million, payments of principal on long-term debt of $1.4 million, and payments of principal

on insurance financing arrangements of $3.1 million, which were partially offset by proceeds from insurance financing

arrangements of $11.0 million.

Capital Expenditures

We make significant, targeted investments to maintain and modernize our facilities, introduce new technologies, and expand

our service offerings. We expect to finance future capital expenditures with internally generated and borrowed funds. Capital

expenditures for property and equipment were $28.1 million and $22.9 million for the three months ended March 31, 2026

and 2025, respectively.

Ventas Master Lease

Effective August 4, 2015, we sold the real property for ten of our hospitals to Ventas, which is a related party as, prior to our

initial public offering ("IPO"), it was a common unit holder of Ardent Health Partners, LLC and owned shares of common

stock of AHP Health Partners and had a representative serving on our board of managers. Concurrent with this transaction,

we entered into a 20-year master lease agreement that expires in August 2035 (with a renewal option for an additional ten

years) to lease back the real estate. We lease ten of our hospitals pursuant to the Ventas Master Lease. As of March 31, 2026,

following the consummation of the IPO and the underwriters’ exercise of their option to purchase additional shares, Ventas

beneficially owned approximately 6.5% of our outstanding common stock.

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 December 31, 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 $38.7 million and $38.1 million for the three months ended March 31, 2026 and 2025,

respectively, related to the Ventas Master Lease and other lease agreements with Ventas for certain medical office buildings.

Senior Secured Credit Facilities

Effective August 24, 2021, we entered into the Term Loan B Facility. The credit agreement governing the Term Loan B

Facility provided funding up to a principal amount of $900.0 million with a seven-year maturity. Principal under the Term

Loan B Facility was due in quarterly installments of 0.25% of the initial $900.0 million principal amount as of the execution

of the credit agreement (subject to certain reductions from time to time as a result of the application of prepayments), with the

remaining balance due upon maturity of the Term Loan B Facility. Effective June 8, 2023, we amended the Term Loan B

Credit Agreement to replace LIBOR with the Term SOFR and Daily Simple SOFR (each as defined in the amended Term

Loan B Credit Agreement) as the reference interest rate. On June 26, 2024, we prepaid $100.0 million of the $877.5 million

outstanding borrowings under the Term Loan B Facility using cash on hand, which prepaid all remaining required quarterly

principal payments; 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 the base rate. 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 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

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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 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. 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.”

Subject to certain exceptions, the ABL Facilities are secured by first priority liens over substantially all of our and each

guarantor’s accounts and other receivables, chattel paper, deposit accounts and securities accounts, general intangibles,

instruments, investment property, commercial tort claims and letters of credit relating to the foregoing, along with books,

records and documents, and proceeds thereof (the “ABL Priority Collateral”), and a second priority lien over substantially all

of our and each guarantor’s other assets (including all of the capital stock of the domestic guarantors and first priority

mortgage liens on any fee-owned real property valued in excess of $5,000,000) (the “Term Priority Collateral”). The

obligations of the UT Health East Texas ABL Facility are not secured by the assets of the subsidiaries that are also Tenants

and certain other subsidiaries related to the Tenants. The obligations under the Term Loan B Facility and the ABL Facilities

in excess of the maximum aggregate dollar cap amount permitted to be guaranteed by the Tenants are not secured by the

assets of the Tenants.

The Term Loan B Facility is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the

ABL Priority Collateral. Certain excluded assets are not included in the Term Priority Collateral or the ABL Priority

Collateral. The obligations under the Term Loan B Facility and the ABL Facilities in excess of the maximum aggregate dollar

cap amount permitted to be guaranteed by the Tenants are not secured by the assets of the Tenants.

Borrowings under the Term Loan B Facility bear interest at a rate per annum equal to, at our option, either (i) a base rate

determined by reference to the highest of (a) the federal funds effective rate plus 0.50%, (b) the rate last quoted by Bank of

America as the “Prime Rate” in the United States for U.S. 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 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.

At the election of the borrowers under the applicable ABL Facility loan, the interest rate per annum applicable to loans under

the ABL Facilities is based on a fluctuating rate of interest determined by reference to either (i) the base rate plus an

applicable margin or (ii) Term SOFR (not to be lower than 0.00% per annum) for the interest period selected, plus an

applicable margin. The applicable margin is determined based on the percentage of the average daily availability of the

applicable ABL Facility. For the non-UT Health East Texas ABL Facility loan, the applicable margin ranges from 0.50% to

1.00% for base rate borrowings and 1.50% to 2.00% for Term SOFR borrowings. The applicable margin for the UT Health

East Texas ABL Facility loan ranges from 1.50% to 2.00% for base rate borrowings and 2.50% to 3.00% for Term SOFR

borrowings.

Subject to certain exceptions (including with regard to the ABL Priority Collateral), thresholds and reinvestment rights, the

Term Loan B Facility is subject to mandatory prepayments with respect to:

•net cash proceeds of issuances of debt by AHP Health Partners or any of its restricted subsidiaries that are not

permitted by the Term Loan B Facility;

•subject to certain thresholds, reinvestment permissions and carve-outs, 100% (with step-downs to 50% and 0%,

based upon achievement of specified senior secured net leverage ratio levels) of net cash proceeds of certain asset

sales;

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•subject to certain thresholds, reinvestment permissions and carve-outs, 100% (with step-downs to 50% and 0%,

based upon achievement of specified senior secured net leverage ratio levels) of net cash proceeds of certain

insurance and condemnation events;

•50% (with step-downs to 25% and 0%, based upon achievement of specified senior secured net leverage ratio levels)

of annual excess cash flow, net of certain voluntary prepayments of secured indebtedness, of AHP Health Partners

and its subsidiaries commencing with the fiscal year ending December 31, 2022; and

•net cash proceeds received in connection with any exercise of the purchase option of the loans by Ventas under the

Relative Rights Agreement.

5.75% Senior Notes due 2029

AHP Health Partners (the "Issuer") issued the 5.75% Senior Notes in an exempt offering pursuant to Rule 144A and

Regulation S under the Securities Act that was completed on July 8, 2021. 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, 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, 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)	Percentage
2025	101.438%
2026 and thereafter	100.000%

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. If the Issuer sells certain assets and does not reinvest the net proceeds or repay senior debt in

compliance with the 2029 Notes Indenture, it must offer to repurchase the 5.75% Senior Notes at 100% of the principal

amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.

Contractual Obligations and Contingencies

The following table provides a summary of our commitments and contractual obligations for debt, minimum lease payment

obligations under non-cancelable leases and other obligations as of March 31, 2026 (in thousands):


	Payments Due by Period
	Total	Less than 1 Year	1-3 Years	3-5 Years	After 5 Years

Long-term debt obligations, with interest	$1,492,029	$80,977	$160,850	$421,569	$828,633
Deferred financing obligations, with interest	20,779	5,757	10,480	4,542	—
Operating leases	2,843,062	147,296	382,153	351,534	1,962,079
Estimated self-insurance liabilities	208,210	15,325	62,141	95,193	35,551
Total	$4,564,080	$249,355	$615,624	$872,838	$2,826,263

Outstanding letters of credit are required principally by certain insurers and states to collateralize our workers' compensation

programs and self-insured retentions associated with our professional and general liability insurance programs. As of March

31, 2026, we maintained outstanding letters of credit of approximately $33.0 million, which included interest of $2.9 million.

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Supplemental Non-GAAP Valuation Measure

Adjusted EBITDAR is a commonly used non-GAAP valuation measure used by our management, research analysts,

investors and other interested parties to evaluate and compare the enterprise value of different companies in our industry.

Adjusted EBITDAR excludes: (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; and (3) rent expense payable to

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

term lease agreements. 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. Finally, financial covenants in certain of our lease agreements, including the Ventas Master Lease, use Adjusted

EBITDAR as a measure of compliance. Adjusted EBITDAR does not reflect our cash requirements for leasing commitments.

As such, our presentation of Adjusted EBITDAR should not be construed as a performance or liquidity measure.

Because not all companies use identical calculations, our presentation of the non-GAAP measure may not be comparable to

other similarly titled measures of other companies.

While we believe this is a useful supplemental valuation measure for investors and other users of our financial information,

you should not consider the non-GAAP measure in isolation or as a substitute for net income or any other items calculated in

accordance with GAAP. 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 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:


	Three Months Ended March 31,
(in thousands)	2026
Net income	$58,488
Adjusted EBITDAR Addbacks:
Income tax expense	16,103
Interest expense	12,211
Depreciation and amortization	42,986
Noncontrolling interest earnings	(18,638)
Certain legal matters and related costs	2,002
Other expenses, including development, restructuring and enterprise system conversion costs (a)	7,788
Equity-based compensation	8,929
Income from disposed operations	(5,883)
Rent expense payable to REITs (b)	41,556
Adjusted EBITDAR	$165,542

(a)Other expenses, including development, restructuring and enterprise system conversion costs include (i) salaries and benefits of $4.3

million, (ii) professional fees of $3.3 million, and (iii) other expenses of $0.2 million.

(b)Rent expense payable to REITs consists of rent expense of $38.7 million related to the Ventas Master Lease and other lease agreements

with Ventas for medical office buildings and rent expense of $2.9 million related to a lease arrangement with MPT for the lease of

Hackensack Meridian Mountainside Medical Center.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to market risk from exposure to changes in interest rates based on our financing, investing and cash

management activities. We do not, however, hold or issue financial instruments or derivatives for trading or speculative

purposes. At March 31, 2026, the following components of our Senior Secured Credit Facilities bore interest at variable rates

at specified margins above either the agent bank’s alternate base rate or Term SOFR: (i) a $777.5 million, seven-year term

loan; and (ii) a $325.0 million, five-year asset-based revolving credit facility. As of March 31, 2026, we had outstanding

variable rate debt of $763.8 million.

At March 31, 2026, we had interest rate swap agreements with notional amounts totaling $279.8 million and $120.6 million,

expiring June 30, 2026 and June 26, 2029, respectively. Please refer to Note 5, Interest Rate Swap Agreements, to our

accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report for more information

on the interest rate swap agreements. Under the amended October 2021 Agreements, expiring June 30, 2026, we are required

to make monthly fixed rate payments at annual rates ranging from 1.47% to 1.48% and the counterparties are obligated to

make monthly floating rate payments to us based on one-month Term SOFR, each subject to a floor of 0.39%. Under the

February 2025 Agreements, expiring June 26, 2029, we are required to make monthly fixed rate payments at annual rates

ranging from 3.97% to 3.98% and the counterparties are required to make monthly floating rate payments to us based on one-

month Term SOFR, each subject to a floor of 0.50%.

Although changes in the alternate base rate or Term SOFR would affect the cost of funds borrowed in the future, we believe

the effect, if any, of reasonably possible near-term changes in interest rates on our variable rate debt on our consolidated

financial position, results of operations or cash flows would not be material. Based on the outstanding borrowings and impact

of the interest rate swaps in place at March 31, 2026, a one percent change in the interest rate would result in a $3.8 million

increase or decrease in our annual interest expense.

We currently believe we have adequate liquidity to fund operations during the near term through the generation of operating

cash flows, cash on hand and access to our ABL Facilities. Our ability to borrow funds under our ABL Facilities is subject to,

among other things, the financial viability of the participating financial institutions. While we do not anticipate any of our

current lenders defaulting on their obligations, we are unable to provide assurance that any particular lender will not default at

a future date.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of

the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures. Based on

this evaluation of our disclosure controls and procedures as of March 31, 2026, our principal executive officer and principal

financial officer concluded that our disclosure controls and procedures as of such date were effective at the reasonable

assurance level. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the

Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that

are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the

Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and

forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide

only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the

cost-benefit relationship of possible controls and procedures.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2026, there have been no changes in our internal control over financial reporting,

as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Because we provide healthcare services in a highly regulated industry, we have been, are, and expect to continue to be, party

to various lawsuits and regulatory investigations from time to time. Refer to the "Litigation and Regulatory Matters" section

of Note 9, Commitments and Contingencies, in the notes to the condensed consolidated financial statements contained

elsewhere in this Quarterly Report, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors that we believe are material to our business, results of operations and

financial condition from the risk factors previously disclosed in the section entitled “Risk Factors” included in the Annual

Report, which are incorporated by reference herein.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In November 2025, our Board of Directors authorized a stock repurchase program pursuant to which we may repurchase an

aggregate of up to $50.0 million of our common stock through open market purchases, privately negotiated transactions,

block trades or other transactions in accordance with applicable securities laws, subject to market conditions and other

factors. The program has no expiration date. At March 31, 2026, there was approximately $46.8 million of stock repurchase

authorization remaining under the stock repurchase program. We did not repurchase any shares under the stock repurchase

program during the three months ended March 31, 2026.

During the three months ended March 31, 2026, we made the following purchases of our equity securities that are registered

pursuant to Section 12(b) of the Securities Exchange Act of 1934 (dollars in millions, except per share amounts):


Period		Total Number of Shares Purchased(1)	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value That May Yet Be Purchased Under Publicly Announced Plans or Programs
January 1, 2026 - January 31, 2026		13,767	$8.73	—	$46.8
February 1, 2026 - February 28, 2026		4,676	8.96	—	$46.8
March 1, 2026 - March 31, 2026		101,078	8.71	—	$46.8
Total		119,521	$8.72	—

(1)	Includes 119,521 shares withheld by us to satisfy the payment of tax obligations related to the vesting of restricted stock unit awards.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the

Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as

each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS


Exhibit Number		Description

2.1		Plan of Conversion (incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2024)
3.1		Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2025)
3.2		Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report Form 8-K filed on May 23, 2025)
31.1*		Certification of Principal Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)
31.2*		Certification of Principal Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a)
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

** This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such

certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act,

except to the extent specifically incorporated by reference into such filing.


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PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Income Statements for the three months ended March 31, 2026 and 2025 (Unaudited)	1
	Condensed Consolidated Comprehensive Income Statements for the three months ended March 31, 2026 and 2025 (Unaudited)	2
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (Unaudited)	4
	Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2026 and 2025 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36


PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39


Date: May 6, 2026	By:	/s/ Alfred Lumsdaine
		Alfred Lumsdaine
		Executive Vice President, Chief Financial Officer
		(Principal Financial Officer)


	Three Months Ended March 31,
(Unaudited, dollars in thousands)	2026		2025
	Amount	%	Amount	%
Total revenue	$1,601,870	100.0%	$1,497,234	100.0%
Expenses:
Salaries and benefits	661,431	41.3%	657,652	43.9%
Professional fees	317,070	19.8%	280,857	18.8%
Supplies	268,553	16.8%	258,855	17.3%
Rents and leases	27,081	1.7%	27,761	1.9%
Rents and leases, related party	38,686	2.4%	38,050	2.5%
Other operating expenses	165,151	10.2%	130,767	8.7%
Interest expense	12,211	0.8%	14,176	0.9%
Depreciation and amortization	42,986	2.7%	36,201	2.4%
Other non-operating gains	(5,890)	(0.4%)	(21,283)	(1.4%)
Total operating expenses	1,527,279	95.3%	1,423,036	95.0%
Income before income taxes	74,591	4.7%	74,198	5.0%
Income tax expense	16,103	1.0%	15,233	1.1%
Net income	58,488	3.7%	58,965	3.9%
Net income attributable to noncontrolling interests	18,638	1.2%	17,582	1.1%
Net income attributable to Ardent Health, Inc.	$39,850	2.5%	$41,383	2.8%