Ardent Health, Inc.: Form 10-Q for the period ended Sep 30, 2025

RESULTS OF OPERATIONS

Management's discussion and analysis of our 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 September 30, 2025 (this "Quarterly Report") and our audited consolidated

financial statements for the year ended December 31, 2024 and related notes contained in our Annual Report on Form 10-K

for the year ended December 31, 2024 (the "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. 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, and our interim results are not

necessarily indicative of the results we expect for the full fiscal year or any other period.

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 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. 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. 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 the federal government shutdown or other uncertain political, financial, credit and capital conditions; (2) possible

reductions or other changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment

programs, Medicaid waiver programs or state directed payments, that could have an adverse effect on our revenues and

business; (3) reduction in the reimbursement rates paid by commercial payors, increased reimbursement denials or payment

delays by commercial payors, our inability to retain and negotiate favorable contracts with private third party payors, or an

increasing volume of uninsured or underinsured patients; (4) effects of changes in healthcare policy or legislation, including

the One Big Beautiful Bill Act (the "OBBBA") and any other reforms that have or may be undertaken by the current

presidential administration, and legal and regulatory restrictions on our hospitals that have physician owners; (5) the ability to

achieve operating and financial targets, develop and execute mitigation plans to offset to the extent possible impacts from the

OBBBA, the scheduled 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, as well as increasing

cost to contract with hospital-based physicians; (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) the effects related to the sequestration spending reductions pursuant to both the Budget Control Act of

2011 and the Pay-As-You-Go Act of 2010 and the potential for future deficit reduction legislation; (11) continued industry

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

(12) inability to successfully complete acquisitions or strategic JVs or inability to realize all of the anticipated benefits; (13)

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

facilities or other business operations; (14) exposure to certain risks and uncertainties by the JVs through which we conduct a

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

not receive necessary government clearances; (15) failure to obtain drugs and medical supplies at favorable prices or

sufficient volumes; (16) operational, legal and financial risks associated with outsourcing functions to third parties; (17) our

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

conditions and changes in those states; (18) 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; (19)

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

(20) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms; (21) 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; (22) the impact of governmental claims or governmental investigations, payor

audits and litigation brought against our hospitals, physician practices, outpatient facilities or other business operations; (23)

actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and

other requirements; (24) the impact of a deterioration of public health conditions associated with a future pandemic, epidemic

or outbreak of infectious disease; (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 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 of the risks and uncertainties that may affect 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

Ardent is 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. We deliver care through a system of 30

acute care hospitals and approximately 280 sites of care with 1,917 employed and affiliated providers as of September 30,

2025. Affiliated providers, which have increased 3.0% compared to September 30, 2024, 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 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.

Recent Developments

Term Loan B Facility Repricing and 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

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2.25% and from the base rate plus 1.75% to the base rate plus 1.25%, (ii) extended the maturity date to September 18, 2032

and (iii) increased the baskets for certain fixed dollar negative covenants and (iv) reestablished principal payments under the

amended Term Loan B Facility, which are due in consecutive equal quarterly installments of 0.25% of the refinanced

$777.5 million principal amount beginning on December 31, 2025 (subject to certain reductions from time to time as a result

of the application of prepayments), with the remaining balance due upon the new maturity date in September 2032. All other

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

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

the applicable interest rate by 50 basis points from Term SOFR plus 3.25% to Term SOFR plus 2.75% and from 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.

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 state and 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 program 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 imposed lower caps in Medicaid expansion states. The revised regulations apply to state directed payment programs

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 the Company include (i) the return to the EBITDA formula used to calculate the business interest expense limitation

under Internal Revenue Code ("IRC") Section 163(j) and (ii) the allowance of 100% bonus depreciation for qualifying

property placed in service after January 19, 2025. The provisions of the OBBBA will reduce the Company's current tax

liability, but are not expected to have a material impact on the Company's current year tax expense.

Because our facilities rely in part on reimbursement from federal health care programs, including Medicaid, for the

reimbursement of services rendered, these changes may have a negative impact on our financial performance. Ongoing

budgetary uncertainties and continued efforts to reduce the federal deficit may result in further payment reductions to both

Medicaid and Medicare programs. Related to these budgetary concerns, the OBBBA increases the federal deficit such that the

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

to 4% in early 2026 if Congress does not take action.

In addition to changes made to federal healthcare programs, the OBBBA contains policy changes that are expected to

decrease the number of individuals who obtain health insurance from Affordable Care Act ("ACA") marketplace exchanges.

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

eligibility. In addition to ending automatic renewals of ACA plans, the OBBBA eliminates federal enhanced subsidies of

ACA marketplace exchange-based plans, which is likely to result in significant cost increases for ACA plans.

U.S. federal tax law was also impacted by the OBBBA legislation. Tax-related 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. These provisions will reduce our current tax liability, but are not expected to have a material

impact on our current year tax expense.

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Urgent Care Acquisitions

On January 1, 2025, we completed the acquisitions of certain assets and operations of 18 urgent care clinics in New Mexico

and Oklahoma for a combined purchase price of $27.5 million. The consideration transferred on December 31, 2024

consisted solely of cash. Upon closing of the acquisitions, approximately $4.1 million was placed into escrow to cover

potential working capital adjustments and to secure certain indemnification obligations pursuant to the terms of the purchase

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

purchase price for assets and operations acquired was recorded as goodwill with an immaterial portion allocated to

identifiable assets acquired and liabilities assumed. The fair values of assets and liabilities recorded as of September 30, 2025

related to these acquisitions are provisional and will be finalized at the close of the measurement period.

Initial Public Offering and Corporate Conversion

On July 19, 2024, we completed an initial public offering ("IPO") of 12,000,000 shares of our common stock, at a public

offering price of $16.00 per share for aggregate gross proceeds of $192.0 million and net proceeds of approximately

$181.4 million after deducting underwriting discounts and commissions of approximately $10.6 million. The IPO provided

the underwriters with an option to purchase up to an additional 1,800,000 shares of our common stock, which was fully

exercised by the underwriters, and, on July 30, 2024, we issued 1,800,000 additional shares of common stock at $16.00 per

share for additional net proceeds of approximately $27.2 million, after deducting underwriting discounts and commissions of

approximately $1.6 million. Our common stock is listed on the New York Stock Exchange under the symbol "ARDT".

On July 17, 2024, in connection with the IPO and immediately prior to the effectiveness of our Registration Statement on

Form S-1, we converted from a Delaware limited liability company into a Delaware corporation by means of a statutory

conversion (the "Corporate Conversion") and changed our name to Ardent Health Partners, Inc. As a result of the Corporate

Conversion, the outstanding limited liability company membership units and vested profits interest units were converted into

120,937,099 shares of common stock and outstanding unvested profits interest units were converted into 2,848,027 shares of

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

("Ventas"), contributed all of its outstanding common stock in AHP Health Partners, Inc. ("AHP Health Partners"), our direct

subsidiary, to Ardent Health Partners, Inc. in exchange for 5,178,202 shares of common stock of Ardent Health Partners, Inc.

(the "ALH Contribution"). The Corporate Conversion and the ALH Contribution have been retrospectively applied to prior

periods herein for the purposes of calculating basic and diluted net income per share. Our certificate of incorporation

authorizes 750,000,000 shares of common stock and 50,000,000 shares of preferred stock, each with a $0.01 par value per

share.

ABL Credit Agreement Amendment and Term Loan B Facility Prepayment

On June 26, 2024, we executed an amendment to our ABL Credit Agreement to increase the revolving commitment by

$100.0 million to $325.0 million and extend the maturity date to June 26, 2029. Concurrent with the execution of this

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

$100.0 million prepayment was applied in direct order of maturities of future payments, and no modification was made to the

Term Loan B Facility as a result of this prepayment.

Key Factors Impacting Our Results of Operations

Staffing and Labor Trends

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

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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.

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 September 30, 2025.

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 nine months ended September 30, 2025, we generated 35.8% of our total

revenue in the Texas market.

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

the nine months ended September 30, 2025, we generated 23.6% 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 nine months ended September 30, 2025, we generated 17.1% 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 nine months ended September 30, 2025, we generated 10.2% of our total revenue in the New

Jersey market.

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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, including the imposition of, or changes in, tariffs,

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.

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.

During the three months ended September 30, 2025, a change in accounting estimate resulting from a modification to the

technique used to estimate the collectability of accounts receivable and new information provided by recently completed

hindsight evaluations of historical collection trends resulted in a decrease in revenue of $42.6 million. During the three

months ended September 30, 2025, we implemented a new revenue accounting system that provided management with

additional information to more precisely estimate the collectability of accounts receivable, particularly with respect to more

timely consideration of payor denial and payment trends. The detailed information provided by the new system during the

three months ended September 30, 2025, along with our recently completed analysis of historical collection trends, indicated

our current collection estimate differed from historical collection estimates thereby resulting in a change in accounting

estimate in accordance with ASC 250-10, Accounting Changes and Error Corrections, to be accounted for during the three

months ended September 30, 2025 (the period of change) and applied prospectively.

Total revenue for the three months ended September 30, 2025 increased $126.9 million, or 8.8%, compared to the same prior

year period. The increase in total revenue for the three months ended September 30, 2025 consisted of an increase in net

patient service revenue per adjusted admission of 5.8% and an increase in adjusted admissions of 2.9%, which reflected

growth in admissions and total surgeries of 5.8% and 1.4%, respectively, partially offset by a decrease in emergency room

visits of 0.1%. When total revenue is adjusted to exclude the impact of the $42.6 million reduction to revenue as a result of a

change in accounting estimate, net patient service revenue per adjusted admission was $17,730 for the three months ended

September 30, 2025, an increase of 8.7% compared to the same prior year period. The increase in net patient service revenue

per adjusted admission was primarily attributable to increases in supplemental program revenue and reimbursement rates

compared to the same prior year period.

Total revenue for the nine months ended September 30, 2025 increased $359.5 million, or 8.2%, compared to the same prior

year period. The increase in total revenue for the nine months ended September 30, 2025 consisted of an increase in net

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patient service revenue per adjusted admission of 5.7% and an increase in adjusted admissions of 2.4%, which reflected

growth in admissions, emergency room visits, and total surgeries of 6.7%, 0.8%, and 0.2%, respectively. When total revenue

is adjusted to exclude the impact of the $42.6 million reduction to revenue as a result of a change in accounting estimate, net

patient service revenue per adjusted admission was $17,908 for the nine months ended September 30, 2025, an increase of

6.7% compared to the same prior year period. The increase in net patient service revenue per adjusted admission was

primarily attributable to increases in supplemental program revenue and reimbursement rates compared to the same prior year

period.

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 September 30, 2025

and 2024, total revenue related to these entities was $468.0 million and $429.9 million, respectively, which represented

29.7% and 29.7%, respectively, of our total revenue for such periods. During the nine months ended September 30, 2025 and

2024, total revenue related to these entities was $1,356.6 million and $1,281.0 million, respectively, which represented 28.7%

and 29.4%, respectively, of our total revenue for such periods.

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

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Operating Results Summary for the Three Months Ended September 30, 2025

The following table sets forth, for the periods indicated, the consolidated results of our operations expressed in dollars and as

a percentage of total revenue.

(Unaudited, dollars in thousands)

Operating Results Summary for the Nine Months Ended September 30, 2025

The following table sets forth, for the periods indicated, the consolidated results of our operations expressed in dollars and as

a percentage of total revenue.

(Unaudited, dollars in thousands)

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

(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 under Ardent Health, Inc.

On April 30, 2024, we closed UT Health East Texas Specialty Hospital, a long-term acute care hospital with 36 licensed patient beds (the "LTAC Hospital") in

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

(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 September 30, 2025

Total revenue for the three months ended September 30, 2025 increased $126.9 million, or 8.8%, compared to the same prior

year period. The increase in total revenue for the three months ended September 30, 2025 consisted of an increase in net

patient service revenue per adjusted admission of 5.8% and an increase in adjusted admissions of 2.9%, which reflected

growth in admissions and total surgeries of 5.8% and 1.4%, respectively, partially offset by a decrease in emergency room

visits of 0.1%. When total revenue is adjusted to exclude the impact of the $42.6 million reduction to revenue as a result of a

32

change in accounting estimate, net patient service revenue per adjusted admission was $17,730 for the three months ended

September 30, 2025, an increase of 8.7% compared to the same prior year period. The increase in net patient service revenue

per adjusted admission was primarily attributable to increases in supplemental program revenue and reimbursement rates

compared to the same prior year period.

Total operating expenses increased $186.2 million, and 4.0% as a percentage of total revenue, for the three months ended

September 30, 2025 compared to the same prior year period. When total revenue is adjusted to exclude the impact of the

$42.6 million reduction to revenue recorded during the three months ended September 30, 2025 as a result of a change in

accounting estimate, total operating expenses represented 97.5% of total revenue for the three months ended September 30,

2025 compared to 96.1% for the same prior year period. The increase in total operating expenses as a percentage of total

revenue was also driven by an increase in professional liability reserves of $47.2 million associated with adverse claim

developments in our New Mexico market as described further in Note 9, Commitments and Contingencies, to our

accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report. The increase in total

operating expenses as a percentage of total revenue was partially offset by a decrease in salaries and benefits as a percentage

of total revenue due to improvements in staffing efficiency and productivity combined with increases to supplemental

program revenue compared to the same prior year period.

Comparison of the Three Months Ended September 30, 2025 and 2024

Total revenue — Total revenue for the three months ended September 30, 2025 increased $126.9 million, or 8.8%, compared

to the same prior year period. The increase in total revenue for the three months ended September 30, 2025 consisted of an

increase in net patient service revenue per adjusted admission of 5.8% and an increase in adjusted admissions of 2.9%, which

reflected growth in admissions and total surgeries of 5.8% and 1.4%, respectively, partially offset by a decrease in emergency

room visits of 0.1%. When total revenue is adjusted to exclude the impact of the $42.6 million reduction to revenue as a

result of a change in accounting estimate, net patient service revenue per adjusted admission was $17,730 for the three

months ended September 30, 2025, an increase of 8.7% compared to the same prior year period. The increase in net patient

service revenue per adjusted admission was primarily attributable to increases in supplemental program revenue and

reimbursement rates compared to the same prior year period.

Salaries and benefits — Salaries and benefits as a percentage of total revenue were 42.9% for the three months ended

September 30, 2025 compared to 43.8% for the same prior year period. When total revenue is adjusted to exclude the impact

of the $42.6 million reduction to revenue recorded during the three months ended September 30, 2025 as a result of a change

in accounting estimate, salaries and benefits represented 41.8% of total revenue for the three months ended September 30,

2025. The decrease in salaries and benefits as a percentage of total revenue was primarily attributable to improvements in

staffing efficiency and productivity combined with increases to supplemental program revenue compared to the same prior

year period.

Professional fees — Professional fees as a percentage of total revenue were 19.3% for the three months ended September 30,

2025 compared to 18.9% for the same prior year period. When total revenue is adjusted to exclude the impact of the $42.6

million reduction to revenue recorded during the three months ended September 30, 2025 as a result of a change in

accounting estimate, professional fees represented 18.8% of total revenue for the three months ended September 30, 2025.

Supplies — Supplies as a percentage of total revenue were 17.5% for the three months ended September 30, 2025 compared

to 17.4% for the same prior year period. When total revenue is adjusted to exclude the impact of the $42.6 million reduction

to revenue recorded during the three months ended September 30, 2025 as a result of a change in accounting estimate,

supplies represented 17.0% of total revenue for the three months ended September 30, 2025.

Rents and leases — Rents and leases were $26.4 million for the each of the three months ended September 30, 2025 and

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

Lease, under which we lease 10 of our facilities, and other lease agreements with Ventas for certain medical office buildings.

Rents and leases, related party, were $38.1 million and $37.2 million for the three months ended September 30, 2025 and

2024, respectively.

Other operating expenses — Other operating expenses as a percentage of total revenue were 12.6% for the three months

ended September 30, 2025 compared to 8.2% for the same prior year period. When total revenue is adjusted to exclude the

impact of the $42.6 million reduction to revenue recorded during the three months ended September 30, 2025 as a result of a

change in accounting estimate, other operating expenses represented 12.3% of total revenue for the three months ended

September 30, 2025. Other operating expenses are comprised primarily of repairs and maintenance, utilities, insurance

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(including professional liability insurance) and provider assessments. The increase in other operating expenses as a

percentage of total revenue was primarily attributable to an accrual of $47.2 million recorded during the three months ended

September 30, 2025 associated with adverse claim developments in our New Mexico market as described further in Note 9,

Commitments and Contingencies, to our accompanying condensed consolidated financial statements included elsewhere in

this Quarterly Report.

Interest expense — Interest expense was $13.9 million and $14.6 million for the three months ended September 30, 2025 and

2024, respectively.

Loss on extinguishment and modification of debt — During the three months ended September 30, 2025, we incurred a loss

on debt extinguishment of $0.5 million related to the write-off of existing deferred financing costs and original issue

discounts and transaction costs of $6.8 million related to the modification of debt associated with the refinancing of our Term

Loan B Credit Agreement on September 18, 2025. During the three months ended September 30, 2024, we incurred a loss on

debt extinguishment of $0.3 million related to the write-off of existing deferred financing costs and original issue discounts

and transaction costs of $1.2 million related to the modification of debt associated with the repricing of our Term Loan B

Credit Agreement.

Other non-operating gains — Other non-operating gains were $2.6 million and $2.8 million for the three months ended

September 30, 2025 and 2024, respectively.

Income tax expense — We recorded an income tax benefit of $3.4 million, which equates to an effective tax rate of 154.8%,

for the three months ended September 30, 2025 compared to income tax expense of $11.1 million, which equates to an

effective tax rate of 19.4%, for the same prior year period. The increase in the effective tax rate was due to an increase in

noncontrolling interest earnings as a percentage of pre-tax income (loss).

Net income attributable to noncontrolling interests — During the three months ended September 30, 2025 and 2024, net

income attributable to noncontrolling interests was $24.7 million and $19.7 million, respectively, which consisted of net

income attributable to minority partners’ interests in hospitals and ambulatory services that are owned and operated though

limited liability companies ("LLCs") and consolidated by us. Income from operations before income taxes related to these

LLCs was $75.7 million and $68.6 million for the three months ended September 30, 2025 and 2024, respectively.

Overview of the Nine Months Ended September 30, 2025

Total revenue for the nine months ended September 30, 2025 increased $359.5 million, or 8.2%, compared to the same prior

year period. The increase in total revenue for the nine months ended September 30, 2025 consisted of an increase in net

patient service revenue per adjusted admission of 5.7% and an increase in adjusted admissions of 2.4%, which reflected

growth in admissions, emergency room visits, and total surgeries of 6.7%, 0.8%, and 0.2%, respectively. When total revenue

is adjusted to exclude the impact of the $42.6 million reduction to revenue as a result of a change in accounting estimate, net

patient service revenue per adjusted admission was $17,908 for the nine months ended September 30, 2025, an increase of

6.7% compared to the same prior year period. The increase in net patient service revenue per adjusted admission was

primarily attributable to increases in supplemental program revenue and reimbursement rates compared to the same prior year

period.

Total operating expenses increased $361.3 million, and 0.4% as a percentage of total revenue, for the nine months ended

September 30, 2025 compared to the same prior year period. When total revenue is adjusted to exclude the impact of the

$42.6 million reduction to revenue recorded during the nine months ended September 30, 2025 as a result of a change in

accounting estimate, total operating expenses represented 95.0% of total revenue for the nine months ended September 30,

2025 compared to 95.5% for the same prior year period. The increase in total operating expenses as a percentage of total

revenue was primarily driven by an increase in professional liability reserves of $47.2 million associated with adverse claim

developments in our New Mexico market as described further in Note 9, Commitments and Contingencies, to our

accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report. The decrease in total

operating expenses as a percentage of total revenue after adjusting for the change in accounting estimate was primarily driven

by an increase in supplemental program revenue compared to the same prior year period.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Total revenue — Total revenue for the nine months ended September 30, 2025 increased $359.5 million, or 8.2%, compared

to the same prior year period. The increase in total revenue for the nine months ended September 30, 2025 consisted of an

increase in net patient service revenue per adjusted admission of 5.7% and an increase in adjusted admissions of 2.4%, which

34

reflected growth in admissions, emergency room visits, and total surgeries of 6.7%, 0.8%, and 0.2%, respectively. When total

revenue is adjusted to exclude the impact of the $42.6 million reduction to revenue as a result of a change in accounting

estimate, net patient service revenue per adjusted admission was $17,908 for the nine months ended September 30, 2025, an

increase of 6.7% compared to the same prior year period. The increase in net patient service revenue per adjusted admission

was primarily attributable to increases in supplemental program revenue and reimbursement rates compared to the same prior

year period.

Salaries and benefits — Salaries and benefits as a percentage of total revenue were 42.5% for the nine months ended

September 30, 2025 compared to 43.1% for the same prior year period. When total revenue is adjusted to exclude the impact

of the $42.6 million reduction to revenue recorded during the nine months ended September 30, 2025 as a result of a change

in accounting estimate, salaries and benefits represented 42.1% of total revenue for the nine months ended September 30,

2025. The decrease in salaries and benefits as a percentage of total revenue was primarily attributable to an increase in

supplemental program revenue compared to the same prior year period.

Professional fees — Professional fees as a percentage of total revenue were 18.7% for the nine months ended September 30,

2025 compared to 18.6% for the same prior year period. When total revenue is adjusted to exclude the impact of the $42.6

million reduction to revenue recorded during the nine months ended September 30, 2025 as a result of a change in accounting

estimate, professional fees represented 18.5% of total revenue for the nine months ended September 30, 2025.

Supplies — Supplies as a percentage of total revenue were 17.1% for the nine months ended September 30, 2025 compared to

17.6% for the same prior year period. When total revenue is adjusted to exclude the impact of the $42.6 million reduction to

revenue recorded during the nine months ended September 30, 2025 as a result of a change in accounting estimate, supplies

represented 16.9% of total revenue for the nine months ended September 30, 2025. The decrease in supplies as a percentage

of total revenue was primarily attributable to an increase in supplemental program revenue compared to the same prior year

period.

Rents and leases — Rents and leases were $82.0 million and $76.3 million for the nine months ended September 30, 2025

and 2024, 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

$114.0 million and $111.4 million for the nine months ended September 30, 2025 and 2024, respectively.

Other operating expenses — Other operating expenses as a percentage of total revenue were 10.5% for the nine months ended

September 30, 2025 compared to 8.2% for the same prior year period. When total revenue is adjusted to exclude the impact

of the $42.6 million reduction to revenue recorded during the nine months ended September 30, 2025 as a result of a change

in accounting estimate, other operating expenses represented 10.4% of total revenue for the nine months ended September 30,

2025. The increase in other operating expenses as a percentage of total revenue was primarily attributable to an accrual of

$47.2 million recorded during the nine months ended September 30, 2025 associated with adverse claim developments in our

New Mexico market as described further in Note 9, Commitments and Contingencies, to our accompanying condensed

consolidated financial statements included elsewhere in this Quarterly Report.

Interest expense — Interest expense was $42.8 million and $52.1 million for the nine months ended September 30, 2025 and

2024, respectively. On June 26, 2024, we executed an amendment to our ABL Credit Agreement and prepaid $100.0 million

of the outstanding principal on our Term Loan B Facility. The decrease in interest expense was attributable to the reduction in

average outstanding principal of our Term Loan B Facility during the nine months ended September 30, 2025 compared to

the same prior year period.

Loss on extinguishment and modification of debt — During the nine months ended September 30, 2025, we incurred a loss on

debt extinguishment $0.5 million related to the write-off of existing deferred financing costs and original issue discounts and

transaction costs of $6.8 million related to the modification of debt associated with the refinancing of our Term Loan B

Credit Agreement on September 18, 2025. During the nine months ended September 30, 2024, we completed a repricing of

our Term Loan B Credit Agreement, executed an amendment to our ABL Credit Agreement and prepaid $100.0 million of

the outstanding principal on our Term Loan B Facility. In connection with these prior period transactions, we incurred a loss

on debt extinguishment of $1.8 million related to the write-off of existing deferred financing costs and original issue

discounts and transaction costs of $1.2 million related to the modification of debt during the nine months ended September

30, 2024.

Other non-operating gains — Other non-operating gains were $23.3 million and $3.1 million for the nine months ended

September 30, 2025 and 2024, respectively. During the nine months ended September 30, 2025, other non-operating gains

35

included a gain on business interruption insurance proceeds of $21.5 million related to a cybersecurity incident that impacted

our operations and information technology systems in November 2023 (the "Cybersecurity Incident").

Income tax expense — We recorded income tax expense of $38.1 million, which equates to an effective tax rate of 19.6%, for

the nine months ended September 30, 2025 compared to income tax expense of $37.0 million, which equates to an effective

tax rate of 18.9%, for the same prior year period. The effective tax rate was impacted by permanent differences resulting from

the disallowance of certain equity-based compensation incurred during the nine months ended September 30, 2025 compared

to the same prior year period. With the IPO in July 2024, equity-based compensation expense became a material component

of tax expense and the activity for the nine months ended September 30, 2024 effectively includes three months of such

activity whereas the results for the nine months ended September 30, 2025 includes nine months of equity-based

compensation expense.

Net income attributable to noncontrolling interests — During the nine months ended September 30, 2025 and 2024, net

income attributable to noncontrolling interests was $65.0 million and $62.7 million, respectively, and consisted primarily of

$65.0 million and $59.8 million, respectively, of net income attributable to minority partners’ interests in hospitals and

ambulatory services that are owned and operated though LLCs and consolidated by us. Income from operations before

income taxes related to these LLCs was $206.3 million and $207.0 million for the nine months ended September 30, 2025

and 2024, respectively. For the nine months ended September 30, 2024, the remaining portion of net income attributable to

noncontrolling interests consisted of net income attributable to ALH Holdings, LLC’s (a subsidiary of Ventas, a related party)

minority interest in AHP Health Partners, our direct subsidiary, prior to the ALH Contribution in July 2024.

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 loss on extinguishment and modification of debt; other non-operating losses (gains);

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

and acquisition-related costs; change in accounting estimate; New Mexico professional liability accrual; expenses

incurred in connection with the implementation of our integrated health information technology system provided by

Epic Systems; equity-based compensation expense; and (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 associated with the MOB Transactions (as defined below) 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.

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

accordance with GAAP:

(in thousands)

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

nature.

(b) Cybersecurity Incident recoveries, net represent insurance recovery proceeds associated with the Cybersecurity Incident, net of

incremental information technology and litigation costs.

(c) Restructuring, exit and acquisition-related costs represent (i) enterprise restructuring costs, including severance costs related to work

force reductions of $2.7 million and $3.2 million for the three months ended September 30, 2025 and 2024, respectively, and $6.0 million

and $10.1 million for the nine months ended September 30, 2025 and 2024, respectively, (ii) penalties and costs incurred for terminating

pre-existing contracts at acquired facilities of $0.2 million for the three months ended September 30, 2024, and $0.4 million and $0.6

million for the nine months ended September 30, 2025 and 2024, respectively, and (iii) third-party professional fees and expenses,

salaries and benefits, and other internal expenses incurred in connection with potential and completed acquisitions of $0.3 million and

$0.4 million for the three months ended September 30, 2025 and 2024, respectively, and $1.5 million and $1.0 million for the nine

months ended September 30, 2025 and 2024, respectively.

(d) Change in accounting estimate reflects the reduction in total revenue of $42.6 million and its $0.7 million impact on noncontrolling

interest earnings as a result of a change in its accounting estimate of the collectability of accounts receivable as further described in

Note 2, Summary of Significant Accounting Policies, to our accompanying condensed consolidated financial statements included

elsewhere in this Quarterly Report.

(e) During the three and nine months ended September 30, 2025, we recorded an increase in our professional liability reserves of $47.2

million. This adjustment included an increase of $54.5 million for adverse prior-period claim developments in New Mexico primarily

attributable to recent claim settlements and ongoing litigation arising from the actions of a single provider who was employed between

2019 and 2022 and as described further in Note 9, Commitments and Contingencies, to our accompanying condensed consolidated

financial statements included elsewhere in this Quarterly Report.

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

system. These costs included (i) professional fees of $0.2 million and $0.5 million for the three months ended September 30, 2025 and

2024, respectively, and $1.5 million for each of the nine months ended September 30, 2025 and 2024, (ii) salaries and benefits of

$1.3 million for each of the three and nine months ended September 30, 2025, and (iii) other expenses related to one-time training and

onboarding support costs of $0.1 million for each of the three and nine months ended September 30, 2025. Epic expenses do not include

ongoing operating costs of the Epic system.

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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 facilities and 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 September 30, 2025, we had total cash and cash equivalents of $609.4 million and available liquidity of $903.8 million.

Our available liquidity was comprised of $609.4 million of total cash and cash equivalents plus $294.4 million in available

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

June 2024, we amended the ABL Credit Agreement to increase commitments available thereunder by $100.0 million and

extended its maturity date to June 26, 2029. See "Senior Secured Credit Facilities" for additional information. At September

30, 2025, our net leverage ratio was 1.0x, and our lease-adjusted net leverage ratio was 2.5x. Our lease-adjusted net leverage

ratio is calculated as net debt as of September 30, 2025, plus 8.0x trailing twelve month REIT rent expense as of the end of

the third quarter of 2025, divided by the trailing twelve month Adjusted EBITDAR as of September 30, 2025.

Cash Flows

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

Operating Activities

Cash flows provided by operating activities for the nine months ended September 30, 2025 totaled $247.1 million compared

to $195.5 million for the same prior year period. Operating cash flows for the nine months ended September 30, 2025 were

impacted by increases in non-cash adjustments to net income, including increases in equity-based compensation of $21.3

million and deferred income taxes of $13.2 million, compared to the same prior year period. Operating cash flows during the

nine months ended September 30, 2025 were also impacted by an improvement in net working capital of $18.4 million driven

by the timing of cash payments for accounts payable and accrued expenses, partially offset by differences in the timing of

cash collections of accounts receivable.

Investing Activities

Cash flows used in investing activities for the nine months ended September 30, 2025 totaled $128.0 million compared to

$115.0 million for the same prior year period. Capital expenditures for non-acquisitions were $127.9 million and $106.2

million for the nine months ended September 30, 2025 and 2024, respectively.

Financing Activities

Cash flows used in financing activities for the nine months ended September 30, 2025 totaled $66.4 million compared to cash

flows provided by financing activities of $45.1 million for the same prior year period. Cash flows used in financing activities

for the nine months ended September 30, 2025 included distributions paid to noncontrolling interests of $62.4 million,

payments of principal on long-term debt of $4.5 million, payments of principal on insurance financing arrangements of $10.8

39

million, and payment of debt issuance costs of $2.6 million, which were partially offset by proceeds from insurance financing

arrangements of $15.6 million.

Cash flows provided by financing activities for the nine months ended September 30, 2024 totaled $45.1 million and included

IPO proceeds, net of underwriting discounts and commissions, of $208.7 million, proceeds from insurance financing

arrangements of $10.8 million, and proceeds from long-term debt of $3.6 million. Cash flows provided by financing activities

were partially offset by payments of principal on long-term debt of $106.3 million, which included a prepayment of $100.0

million on the $877.5 million outstanding borrowings under our Term Loan B Facility, principal on insurance financing

arrangements of $7.4 million, IPO costs of $8.6 million, and debt issuance costs of $2.5 million associated with the amended

ABL Credit Agreement, which increased commitments available under the ABL Facilities by $100.0 million. Additionally,

cash flows provided by financing activities for the nine months ended September 30, 2024 were partially offset by

distributions paid to noncontrolling interests of $53.1 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 $127.9 million and $106.2 million for the nine months ended September 30,

2025 and 2024, 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

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 September 30, 2025, 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 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 $38.1 million and $37.2 million for the three months ended September 30, 2025 and 2024,

respectively, and $114.0 million and $111.4 million for the nine months ended September 30, 2025 and 2024, respectively,

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

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

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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 its Term Loan B Credit

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

SOFR plus 2.25% and from the base rate plus 1.75% to the base rate plus 1.25%, (ii) extended the maturity date to September

18, 2032, (iii) increased the baskets for certain fixed dollar negative covenants and (iv) reestablished principal payments

under the amended Term Loan B Facility, which are due in consecutive equal quarterly installments of 0.25% of the

refinanced $777.5 million principal amount beginning on December 31, 2025 (subject to certain reductions from time to time

as a result of the application of prepayments), with the remaining balance due upon the new maturity date in September 2032.

Effective July 8, 2021, we entered into the ABL Credit Agreement, which was amended to extend the maturity and increase

the revolving commitment on June 26, 2024. The ABL 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 0.5% to

1.0% for base rate borrowings and 1.5% to 2.0% for Term SOFR borrowings. The applicable margin for the UT Health East

Texas ABL Facility loan ranges from 1.5% to 2.0% for base rate borrowings and 2.5% to 3.0% for Term SOFR borrowings.

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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;

• 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:

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 September 30, 2025 (in thousands):

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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

September 30, 2025, we maintained outstanding letters of credit of approximately $33.3 million, which included interest of

$2.7 million.

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, during 2022, we completed the sale of 18 medical office buildings to Ventas in

exchange for $204.0 million and concurrently entered into agreements to lease the real estate back from Ventas over a 12-

year initial term with eight options to renew for additional five-year terms (the "MOB Transactions"). Our management views

the long-term lease agreements with Ventas and MPT, as well as the MOB Transactions, as more like financing arrangements

than true operating leases, with the rent payable to such REITs being similar to interest expense. 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 of taxes and rent is a necessary element of our valuation. Because Adjusted EBITDAR excludes these and other

items, it has material limitations as a measure of our valuation.

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

accordance with GAAP:

(in thousands)

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

(b) Cybersecurity Incident recoveries, net represent insurance recovery proceeds associated with the Cybersecurity Incident, net of

incremental information technology and litigation costs.

(c) Restructuring, exit and acquisition-related costs represent (i) enterprise restructuring costs, including severance costs related to work

force reductions of $2.7 million and $6.0 million for the three and nine months ended September 30, 2025, respectively, (ii) penalties and

costs incurred for terminating pre-existing contracts at acquired facilities of $0.4 million for the nine months ended September 30, 2025,

and (iii) third-party professional fees and expenses, salaries and benefits, and other internal expenses incurred in connection with

potential and completed acquisitions of $0.3 million and $1.5 million for the three and nine months ended September 30, 2025,

respectively.

(d) Change in accounting estimate reflects the reduction in total revenue of $42.6 million and its $0.7 million impact on noncontrolling

interest earnings as a result of a change in its accounting estimate of the collectability of accounts receivable as further described in

Note 2, Summary of Significant Accounting Policies, to our accompanying condensed consolidated financial statements included

elsewhere in this Quarterly Report.

(e) During the three and nine months ended September 30, 2025, we recorded an increase in our professional liability reserves of $47.2

million. This adjustment included an increase of $54.5 million for adverse prior-period claim developments in New Mexico primarily

attributable to recent claim settlements and ongoing litigation arising from the actions of a single provider who was employed between

2019 and 2022 and as described further in Note 9, Commitments and Contingencies, to our accompanying condensed consolidated

financial statements included elsewhere in this Quarterly Report.

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

system. These costs included (i) professional fees of $0.2 million and $1.5 million for the three and nine months ended September 30,

2025, respectively, (ii) salaries and benefits of $1.3 million for each of the three and nine months ended September 30, 2025, and (iii)

other expenses related to one-time training and onboarding support costs of $0.1 million for each of the three and nine months ended

September 30, 2025. Epic expenses do not include ongoing operating costs of the Epic system.

(g) Rent expense payable to REITs for the three and nine months ended September 30, 2025 consists of rent expense of $38.1 million and

$114.0 million, respectively, related to the Ventas Master Lease and other lease agreements with Ventas for medical office buildings and

rent expense of $2.9 million and $8.5 million, respectively, related to a lease arrangement with MPT for the lease of Hackensack

Meridian Mountainside Medical Center.

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect

reported amounts and related disclosures. We regularly evaluate the accounting policies and estimates we use. In general, we

base the estimates on historical experience and on assumptions that we believe to be reasonable, given the particular

circumstances in which we operate. Actual results may vary from those estimates. We consider our critical accounting

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estimates to be those that (i) involve significant judgments and uncertainties, (ii) require estimates that are more difficult for

management to determine, and (iii) may produce materially different outcomes under different conditions or when using

different assumptions.

Our critical accounting estimates include revenue recognition, risk management and self-insured liabilities, and income taxes.

During the three months ended September 30, 2025, we modified the technique used to estimate the collectability of our

accounts receivable, which impacted revenue recognized during the period. Refer to Note 2, Summary of Significant

Accounting Policies, for further discussion. There have been no other changes to our critical accounting estimates or their

application since the date of the Annual Report. Refer to the Annual Report for a complete and comprehensive discussion of

these estimates.

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 September 30, 2025, 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 September 30, 2025, we had

outstanding variable rate debt of $765.7 million.

At September 30, 2025, we had interest rate swap agreements with notional amounts totaling $398.4 million and $2.0 million,

expiring June 30, 2026 and June 26, 2029, respectively. Please refer to Note 5 to the Notes to Condensed Consolidated

Financial Statements included within this Quarterly Report for more information on the interest rate swap agreements. Under

the 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%. On February 5, 2025, we executed new interest rate swap

agreements 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. We are required to make monthly fixed

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 September 30, 2025, 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.

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 September 30, 2025, 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.

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Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2025, 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.

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.