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What changed in TENET HEALTHCARE CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TENET HEALTHCARE CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+505 added−543 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-18)

Top changes in TENET HEALTHCARE CORP's 2025 10-K

505 paragraphs added · 543 removed · 412 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

77 edited+25 added−24 removed111 unchanged
Biggest changeSuch factors include, but are not limited to, the following: • Our ability to enter into or renew managed care provider arrangements on acceptable terms; changes in service mix, revenue mix and surgical volumes, including potential declines in the population covered under managed care agreements; and the impact of alternative payment models and value-based purchasing initiatives; • The impacts on our business from the enactment, amendment or expiration of statutes and regulations affecting the healthcare industry, and potential reductions to Medicare and Medicaid payment rates, changes in reimbursement practices or funding levels, or modification of Medicaid supplemental payment programs; • Our success in recruiting and retaining physicians, nurses and other healthcare professionals; • The effect of competition generally, and clinical and price transparency regulations, on our business; • The timing, outcome and impact of: government investigations and litigation; changes in federal tax laws, regulations and policies (including those related to tariffs and trade restrictions); and future tax audits, disputes and litigation associated with our tax positions; • The potential emergence and effects of a future pandemic, epidemic or outbreak of an infectious disease on our operations, financial condition and liquidity; • Security threats, catastrophic events and other disruptions that affect our information technology and related information systems and confidential business data; • Our ability to achieve operating and financial targets, attain expected levels of patient volumes, and identify and execute on measures designed to save or control costs or streamline operations; • Operational and other risks associated with acquisitions, divestitures and joint venture arrangements, including the integration of newly acquired businesses and the risk that transactions may not receive necessary government clearances; • The impact of our indebtedness; the availability and terms of capital, if needed, to refinance existing debt, fund our operations and expand our business; and our ability to comply with our debt covenants and effectively manage our capital structure and leverage ratio; • The effect that inflation, consumer behavior and other economic factors have on our volumes and our ability to collect outstanding receivables on a timely basis, among other things; and increases in the number of uninsured accounts, as well as deductibles, co‑insurance amounts and co‑pays for insured accounts; and • Other factors and risks referenced in this report and our other public filings.
Biggest changeSuch factors include, but are not limited to, the following: • Our ability to enter into or renew managed care provider arrangements on acceptable terms; changes in service mix, revenue mix and surgical volumes, including potential declines in the population covered under managed care agreements; and the impact of alternative payment models and value-based purchasing initiatives; • The impacts on our business from the enactment, amendment or expiration of statutes and regulations affecting the healthcare industry; potential reductions to health insurance coverage and enrollment levels and Medicare and Medicaid payment rates; changes in reimbursement practices or funding levels; or modification of Medicaid supplemental payment programs; • Our success in recruiting and retaining physicians, nurses and other healthcare professionals; • The effect of competition generally, and clinical and price transparency regulations, on our business; • The timing, outcome and impact of: government investigations and litigation; changes in federal tax laws, regulations and policies (including those related to tariffs and trade restrictions); and future tax audits, disputes and litigation associated with our tax positions; • The potential emergence and effects of a future pandemic, epidemic or outbreak of an infectious disease on our operations, financial condition and liquidity; • Security threats, catastrophic events and other disruptions that affect our information technology and related information systems and confidential business data; • The results of our efforts to use technology, including artificial intelligence and machine learning, to drive efficiencies, better outcomes and an enhanced patient experience, and our ability to manage the risks associated with our current and potential future use of new and emerging technologies; • Our ability to achieve operating and financial targets, develop and execute mitigation plans to offset, to the extent possible, impacts from the OBBBA and the expiration of EPTCs, attain expected levels of patient volumes and revenues, and identify and execute on measures designed to save or control costs or streamline operations; • Operational and other risks associated with acquisitions, divestitures and joint venture arrangements, including the integration of newly acquired businesses and the risk that transactions may not receive necessary government clearances; • The impact of our indebtedness; the availability and terms of capital, if needed, to refinance existing debt, fund our operations and expand our business; and our ability to comply with our debt covenants and effectively manage our capital structure and leverage ratio; • The effect that inflation, consumer behavior and other economic factors have on our volumes and our ability to collect outstanding receivables on a timely basis, among other things; and increases in the number of uninsured accounts, as well as deductibles, co‑insurance amounts and co‑pays for insured accounts; • Potential delays, reductions or disruptions in payments from a prolonged government shutdown; • Changes in accounting practices; and • Other factors and risks referenced in this report and our other public filings.
INSURANCE We maintain captive insurance companies to self‑insure for the majority of our professional and general liability claims, and we purchase insurance from third parties to cover catastrophic claims. Commercial insurance we purchase is subject to per‑claim and policy period aggregate limits.
INSURANCE We maintain captive insurance companies to self‑insure for the majority of our professional and general liability claims, and we purchase insurance from third parties to cover catastrophic claims. Commercial insurance is subject to per‑claim and policy period aggregate limits.
We also continue to engage in contracting strategies that create shared value with payers and patients. The market for our revenue cycle management services is also competitive. To be successful, we must respond more quickly and effectively than our competitors to new or changing opportunities, technologies, standards, regulations and client requirements.
Moreover, we continue to engage in contracting strategies that create shared value with payers and patients. The market for our revenue cycle management services is also competitive. To be successful, we must respond more quickly and effectively than our competitors to new or changing opportunities, technologies, standards, regulations and client requirements.
Our commercial insurance does not cover all claims against us and may not offset the financial impact of a material loss event. The rise in the number and severity of hurricanes, wildfires, tornadoes and other events has led to higher insurance premiums and reductions in coverage for property owners.
Our commercial insurance does not cover all claims against us and may not offset the financial impact of a material loss event. The rise in the number and severity of hurricanes, wildfires, tornadoes and other events has led to higher insurance premiums and reductions in coverage for property owners and tenants.
We continue to work within our communities to increase access to healthcare programs and careers, including at our Baptist School of Health Professions in San Antonio and through our nationwide nursing extern and immersion program, which provides students with relevant hands-on training prior to graduation.
We also continue to work within our communities to increase access to healthcare programs and careers, including at our Baptist School of Health Professions in San Antonio and through our nationwide nursing extern and immersion program, which provides students with relevant hands-on training prior to graduation.
All statements, other than statements of historical or present facts, that address activities, events, outcomes, business strategies and other matters that we plan, expect, intend, assume, believe, budget, predict, forecast, project, target, estimate or anticipate (and other similar expressions) will, should or may occur in the future are forward‑looking statements, including (but not limited to) disclosures regarding (1) our future earnings, financial position, and operational and strategic initiatives, (2) developments in the healthcare industry, and (3) the anticipated impacts of economic and public health conditions on our business.
All statements, other than statements of historical or present facts, that address activities, events, outcomes, business strategies and other matters that we plan, expect, intend, assume, believe, budget, predict, forecast, project, target, estimate or anticipate (and other similar expressions) will, should or may occur in the future are forward‑looking statements, including (but not limited to) disclosures regarding (1) our future earnings, financial position, and operational and strategic initiatives, (2) developments in the healthcare industry, and (3) the anticipated impacts of economic and public health conditions and government actions on our business.
We specifically disclaim any obligation to update any information contained in a forward‑looking statement or any forward‑looking statement in its entirety, except as required by law. All forward‑looking statements attributable to us are expressly qualified in their entirety by this cautionary information.
We specifically disclaim any obligation to revise or update any information contained in a forward‑looking statement or any forward‑looking statement in its entirety, except as required by law. All forward‑looking statements attributable to us are expressly qualified in their entirety by this cautionary information.
To that end, we offer: • a competitive range of compensation and benefit programs (which vary by location and other factors) designed to reward performance and promote well‑being, including an employee stock purchase plan, a 401(k) plan, health care and insurance benefits, health savings and flexible spending accounts, and paid time off; • opportunities for continuing education and advancement through a broad range of clinical training and leadership development experiences, including in‑person and online courses and mentoring opportunities; • a supportive, inclusive and patient‑centered culture aligned with our values and based on respect for others; • company‑sponsored efforts encouraging and recognizing volunteerism and community service; and • a code of conduct that promotes integrity, accountability and transparency, among other high ethical standards.
To that end, we offer: • a competitive range of compensation and benefit programs (which vary by location and other factors) designed to reward performance and promote well‑being, including an employee stock purchase plan, a 401(k) plan, health care and insurance benefits, health savings and flexible spending accounts, and paid time off; • opportunities for continuing education and advancement through a broad range of clinical training and leadership development experiences, including in‑person and online courses and mentoring opportunities; 5 Table of Contents • a supportive, inclusive and patient‑centered culture aligned with our values and based on respect for others; • company‑sponsored efforts encouraging and recognizing volunteerism and community service; and • a code of conduct that promotes integrity, accountability and transparency, among other high ethical standards.
Table of Contents The following table lists, by state, the hospitals wholly owned, operated as part of a joint venture, or leased and operated by our wholly owned subsidiaries at December 31, 2024 : Hospital Location Licensed Beds Status Arizona Abrazo Arizona Heart Hospital (1) Phoenix 59 Owned Abrazo Arrowhead Campus Glendale 229 Owned Abrazo Central Campus Phoenix 206 Owned Abrazo Scottsdale Campus Phoenix 120 Owned Abrazo West Campus Goodyear 216 Owned Holy Cross Hospital (2) Nogales 25 Owned St.
Table of Contents The following table lists, by state, the hospitals wholly owned, operated as part of a joint venture, or leased and operated by our wholly owned subsidiaries at December 31, 2025 : Hospital Location Licensed Beds Status Arizona Abrazo Arizona Heart Hospital (1) Phoenix 59 Owned Abrazo Arrowhead Campus Glendale 229 Owned Abrazo Central Campus Phoenix 206 Owned Abrazo Scottsdale Campus Phoenix 120 Owned Abrazo West Campus Goodyear 216 Owned Holy Cross Hospital (2) Nogales 25 Owned St.
Certain of the accounts receivable Conifer or its billing, servicing and collections subsidiary, PSS Patient Solution Services, LLC, manages for its clients are subject to these state regulations.
Certain of the accounts receivable Conifer or its billing and servicing subsidiary, PSS Patient Solution Services, LLC, manages for its clients are subject to these state regulations.
At December 31, 2024, the majority of the surgical hospitals and ASCs in our Ambulatory Care segment were owned by joint ventures with physicians and/or health systems. In addition, we have contracts with physicians and non‑physician referral sources providing for a variety of financial arrangements, including employment agreements, leases and professional service contracts, such as medical director agreements.
At December 31, 2025, the majority of the surgical hospitals and ASCs in our Ambulatory Care segment were owned by joint ventures with physicians and/or health systems. In addition, we have contracts with physicians and non‑physician referral sources providing for a variety of financial arrangements, including employment agreements, leases and professional service contracts, such as medical director agreements.
For these reasons, we remain focused on opportunities to expand our Ambulatory Care segment through acquisitions, organic growth in physician relationships and service lines, construction of new outpatient centers and strategic partnerships. Detailed information about our Ambulatory Care acquisition and development activity in the year ended December 31, 2024 can be found in MD&A.
For these reasons, we remain focused on opportunities to expand our Ambulatory Care segment through acquisitions, organic growth in physician relationships and service lines, construction of new outpatient centers and strategic partnerships. Detailed information about our Ambulatory Care acquisition and development activity in the year ended December 31, 2025 can be found in MD&A.
ANTIFRAUD AND ABUSE LAWS A number of federal statutes, and the regulations implementing them, govern our participation in the Medicare and Medicaid payment programs, including: • the anti‑kickback and antifraud and abuse amendments codified under Section 1128B(b) of the Social Security Act (the “Anti‑kickback Statute”), which prohibit the knowing and willful remuneration of anything of value intended to induce or reward patient referrals or the generation of business involving any item or service payable by federal healthcare programs, subject to certain government-established “safe harbor” exceptions; • the False Claims Act (“FCA”), which prohibits the submission of claims for payment to government programs that are known to be, or should be known to be, fraudulent; • the Stark law, which generally restricts physician referrals of Medicare or Medicaid patients to entities the physician or an immediate family member has a financial relationship with, regardless of any intent to violate the law, unless one of several exceptions applies; and 9 Table of Contents • the Civil Monetary Penalties Law, which authorizes the Secretary of the U.S.
ANTIFRAUD AND ABUSE LAWS Numerous federal statutes, and the regulations implementing them, govern our participation in the Medicare and Medicaid payment programs, including: • the anti‑kickback and antifraud and abuse amendments codified under Section 1128B(b) of the Social Security Act (the “Anti‑kickback Statute”), which prohibit the knowing and willful remuneration of anything of value intended to induce or reward patient referrals or the generation of business involving any item or service payable by federal healthcare programs, subject to certain government-established “safe harbor” exceptions; • the False Claims Act (“FCA”), which prohibits the submission of claims for payment to government programs that are known to be, or should be known to be, fraudulent; • the Stark law, which generally restricts physician referrals of Medicare or Medicaid patients to entities the physician or an immediate family member has a financial relationship with, regardless of any intent to violate the law, unless one of several exceptions applies; and • the Civil Monetary Penalties Law, which authorizes the Secretary of the U.S.
Our ability to employ physicians is closely regulated, with a number of states prohibiting the corporate practice of medicine or otherwise regulating what types of entities may employ physicians, and we structure our arrangements with healthcare providers to comply with these state laws. In 2024, we continued to experience challenges in recruiting and retaining physicians.
Our ability to employ physicians is closely regulated, with a number of states prohibiting the corporate practice of medicine or otherwise regulating what types of entities may employ physicians, and we structure our arrangements with healthcare providers to comply with these state laws. In 2025, we continued to experience challenges in recruiting and retaining physicians.
There is limited availability of experienced medical support personnel nationwide, which drives up the wages and benefits required to recruit and retain employees. In particular, like others in the healthcare industry, we continue to experience shortages of advanced practice providers and critical‑care nurses in certain disciplines and geographic areas.
There is limited availability of experienced medical support personnel nationwide, which drives up the wages and benefits required to recruit and retain employees. In particular, like others in the healthcare industry, we continue to experience shortages of advanced practice clinicians and critical‑care nurses in certain disciplines and geographic areas.
Any of the aforementioned consequences could have a material adverse effect on our business, financial condition, results of operations or cash flows. 8 Table of Contents POTENTIAL CHANGES IN HEALTHCARE POLICY The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”), extended health coverage to millions of uninsured legal U.S. residents through a combination of private sector health insurance reforms and public program expansion.
Any of the aforementioned consequences could have a material adverse effect on our business, financial condition, results of operations or cash flows. 8 Table of Contents RECENT AND POTENTIAL FUTURE CHANGES TO HEALTHCARE POLICY The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”), extended health coverage to millions of uninsured legal U.S. residents through a combination of private sector health insurance reforms and public program expansion.
Luke’s Baptist Hospital San Antonio 287 Owned Valley Baptist Medical Center Harlingen 586 Owned Valley Baptist Medical Center – Brownsville Brownsville 240 Owned Westover Hills Baptist Hospital Westover Hills 92 Owned Total Licensed Beds 12,435 (1) Specialty hospital. (2) Designated by the Centers for Medicare & Medicaid Services (“CMS”) as a critical access hospital.
Luke’s Baptist Hospital San Antonio 287 Owned Valley Baptist Medical Center Harlingen 586 Owned Valley Baptist Medical Center – Brownsville Brownsville 240 Owned Westover Hills Baptist Hospital San Antonio 92 Owned Total Licensed Beds 12,494 (1) Specialty hospital. (2) Designated by the Centers for Medicare & Medicaid Services (“CMS”) as a critical access hospital.
(5) Owned by a limited liability company formed as part of a joint venture with John Muir Health, a not‑for‑profit health system in the San Francisco Bay area; a Tenet subsidiary owned a 51% interest in the entity at December 31, 2024, and John Muir Health owned a 49% interest.
(5) Owned by a limited liability company formed as part of a joint venture with John Muir Health, a not‑for‑profit health system in the San Francisco Bay area; a Tenet subsidiary owned a 51% interest in the entity at December 31, 2025, and John Muir Health owned a 49% interest.
These legal and regulatory standards relate to, among other topics: ownership and operation of facilities and physician practices; licensure, certification and enrollment in government programs; the necessity and adequacy of medical care; quality of medical equipment and services; relationships with and qualifications of physicians and employees; operating conduct, policies and procedures; screening, stabilization and transfer of individuals who have emergency medical conditions; rate-setting, billing and coding for services; the preparation and filing of cost reports; the handling of overpayments; contractual arrangements; relationships with referral sources and referral recipients; privacy and security; maintenance of adequate records; construction, acquisition, expansion and closure of healthcare facilities or services; environmental protection; compliance with fire prevention and building codes; debt collection; and communications with patients and consumers.
These legal and regulatory standards relate to, among other topics: ownership and operation of facilities and physician practices; licensure, certification and enrollment in government programs; the necessity, quality and adequacy of medical care; quality of medical equipment and services; relationships with and qualifications of physicians and employees; operating conduct, policies and procedures; screening, stabilization and transfer of individuals who have emergency medical conditions; rate-setting, billing and coding for services; the preparation and filing of cost reports; the handling of overpayments; contractual arrangements; relationships with referral sources and referral recipients; privacy and security; maintenance of adequate records; effective and efficient utilization of government program resources; construction, acquisition, expansion and closure of healthcare facilities or services; environmental protection; compliance with fire prevention and building codes; debt collection; and communications with patients and consumers.
The information found on our website is not incorporated by reference into nor part of this or any other report or document we file with or furnish to the SEC. FORWARD-LOOKING STATEMENTS This report includes “forward‑looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act, each as amended.
The information found on our website is not incorporated by reference into nor part of this or any other report or document we file with or furnish to the SEC. 14 Table of Contents FORWARD-LOOKING STATEMENTS This report includes “forward‑looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act, each as amended.
Application to Our Operations —We regularly enter into financial arrangements with physicians and other providers in a manner we believe complies with the Anti‑kickback Statute, the Stark law, and other applicable antifraud and abuse laws.
Application to Our Operations —We regularly enter into financial arrangements with physicians and other clinicians in a manner we believe complies with the Anti‑kickback Statute, the Stark law, and other applicable antifraud and abuse laws.
In general, we believe that quality of care improvements may have the effects of: (1) reducing costs; (2) increasing payments from Medicare and certain managed care payers for our services; and (3) increasing physician and patient satisfaction, which may improve our volumes. Other competing health systems may implement similar strategies.
In general, we believe that quality of care improvements may have the effects of: (1) reducing costs; 7 Table of Contents (2) increasing payments from Medicare and certain managed care payers for our services; and (3) increasing physician and patient satisfaction, which may improve our volumes. Other competing health systems may implement similar strategies.
We also offer value‑based care services, including clinical integration, financial risk management and population health management, all of which aim to assist clients in improving the cost and quality of their healthcare delivery, as well as their patient outcomes. 3 Table of Contents At December 31, 2024, we provided one or more of the business process services described above to approximately 620 Tenet and non‑Tenet hospitals and other clients nationwide.
We also offer value‑based care services, including clinical integration, financial risk management and population health management, all of which aim to assist clients in improving the cost and quality of their healthcare delivery, as well as their patient outcomes. 3 Table of Contents At December 31, 2025, we provided one or more of the business process services described above to approximately 600 Tenet and non‑Tenet hospitals and other clients nationwide.
The members of our board of directors and all of our contractors having functional roles similar to our employees are also required to abide by our Code of Conduct . The standards therein reflect our basic values and form the foundation of a comprehensive process that includes compliance with all corporate policies, procedures and practices.
The members of our board of directors and all of our contractors having functional 13 Table of Contents roles similar to our employees are also required to abide by our Code of Conduct . The standards therein reflect our basic values and form the foundation of a comprehensive process that includes compliance with all corporate policies, procedures and practices.
The potential consequences for failing to comply with applicable laws, rules and regulations include (1) required refunds of previously received government program payments, (2) the assessment of civil monetary penalties, including treble damages, (3) fines, which could be significant, (4) exclusion from participation in federal healthcare programs and (5) criminal sanctions, including sanctions against current or former employees.
The potential consequences for failing to comply with applicable laws, rules and regulations include (1) required refunds of previously received government program payments, (2) the assessment of civil monetary penalties, including treble damages, (3) fines, which could be significant, (4) the imposition of operational restrictions, (5) exclusion from participation in federal healthcare programs and (6) criminal sanctions, including sanctions against current or former employees.
They involve known and unknown risks, uncertainties and other factors, many of which we are unable to predict 14 Table of Contents or control, that may cause our actual results, performance or achievements to be materially different from those expressed or implied by forward‑looking statements.
They involve known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control, that may cause our actual results, performance or achievements to be materially different from those expressed or implied by forward‑looking statements.
Of the eight states in which we operate hospitals, four have taken action in accordance with the Affordable Care Act to expand their Medicaid programs; however, over half of our licensed beds at December 31, 2024 were located in four states, namely Florida, South Carolina, Tennessee and Texas, that have not expanded Medicaid under the law.
Of the eight states in which we operate acute care and specialty hospitals, four have taken action in accordance with the Affordable Care Act to expand their Medicaid programs; however, over half of our licensed beds at December 31, 2025 were located in four states, namely Florida, South Carolina, Tennessee and Texas, that have not expanded Medicaid under the law.
Mary’s Medical Center West Palm Beach 420 Owned West Boca Medical Center Boca Raton 195 Owned Massachusetts MetroWest Medical Center – Framingham Union Campus Framingham 136 Owned MetroWest Medical Center – Leonard Morse Campus (1) Natick 103 Owned Saint Vincent Hospital Worcester 290 Owned Michigan Children’s Hospital of Michigan Detroit 228 Owned Detroit Receiving Hospital Detroit 273 Owned Harper University Hospital Detroit 470 Owned Huron Valley-Sinai Hospital Commerce Township 158 Owned Hutzel Women’s Hospital Detroit 114 Owned Rehabilitation Institute of Michigan (1) Detroit 69 Owned Sinai-Grace Hospital Detroit 404 Owned South Carolina Piedmont Medical Center Rock Hill 294 Owned Piedmont Medical Center Fort Mill Fort Mill 100 Owned Tennessee Saint Francis Hospital Memphis 479 Owned Saint Francis Hospital – Bartlett Bartlett 196 Owned 2 Table of Contents Hospital Location Licensed Beds Status Texas Baptist Medical Center San Antonio 607 Owned The Hospitals of Providence East Campus El Paso 218 Owned The Hospitals of Providence Memorial Campus El Paso 480 Owned The Hospitals of Providence Rehabilitation Hospital East (1) El Paso 36 JV/Owned The Hospitals of Providence Sierra Campus El Paso 306 Owned The Hospitals of Providence Transmountain Campus El Paso 108 Owned Mission Trail Baptist Hospital San Antonio 114 Owned Nacogdoches Medical Center Nacogdoches 161 Owned North Central Baptist Hospital San Antonio 443 Owned Northeast Baptist Hospital San Antonio 351 Owned Resolute Baptist Hospital New Braunfels 128 Owned St.
Mary’s Medical Center West Palm Beach 413 Owned West Boca Medical Center Boca Raton 195 Owned Massachusetts MetroWest Medical Center – Framingham Union Campus Framingham 136 Owned MetroWest Medical Center – Leonard Morse Campus (1) Natick 103 Owned Saint Vincent Hospital Worcester 290 Owned Michigan Children’s Hospital of Michigan Detroit 264 Owned Detroit Receiving Hospital Detroit 273 Owned Harper University Hospital Detroit 434 Owned Huron Valley-Sinai Hospital Commerce Township 158 Owned Hutzel Women’s Hospital Detroit 114 Owned Rehabilitation Institute of Michigan (1) Detroit 69 Owned Sinai-Grace Hospital Detroit 404 Owned South Carolina Piedmont Medical Center Rock Hill 294 Owned Piedmont Medical Center Fort Mill Fort Mill 100 Owned Tennessee Saint Francis Hospital Memphis 479 Owned Saint Francis Hospital – Bartlett Bartlett 196 Owned 2 Table of Contents Hospital Location Licensed Beds Status Texas Baptist Medical Center San Antonio 607 Owned The Hospitals of Providence East Campus El Paso 218 Owned The Hospitals of Providence Memorial Campus El Paso 486 Owned The Hospitals of Providence Rehabilitation Hospital East (1) El Paso 36 JV/Owned The Hospitals of Providence Sierra Campus El Paso 306 Owned The Hospitals of Providence Transmountain Campus El Paso 114 Owned Mission Trail Baptist Hospital San Antonio 114 Owned Nacogdoches Medical Center Nacogdoches 161 Owned North Central Baptist Hospital San Antonio 443 Owned Northeast Baptist Hospital San Antonio 351 Owned Resolute Baptist Hospital New Braunfels 128 Owned St.
None of the employees in our Ambulatory Care segment belong to a 6 Table of Contents union. Unionized employees – primarily registered nurses and service, technical and maintenance workers – are located at 27 of our hospitals, the majority of which are in California, Florida and Michigan.
None of the employees in our Ambulatory Care segment belong to a union. Unionized employees – primarily registered nurses and service, technical and maintenance workers – are located at 27 of our hospitals, the majority of which are in California, Florida and Michigan.
Information regarding the utilization of licensed beds and other operating statistics at December 31, 2024 and 2023 can be found in MD&A.
Information regarding the utilization of licensed beds and other operating statistics at December 31, 2025 and 2024 can be found in MD&A.
Office of Inspector General, which is an independent and objective oversight unit of HHS, conducts audits, evaluations and investigations relating to HHS programs and operations and, when appropriate, imposes civil monetary penalties, assessments and administrative sanctions.
Office of 10 Table of Contents Inspector General, which is an independent and objective oversight unit of HHS, conducts audits, evaluations and investigations relating to HHS programs and operations and, when appropriate, imposes civil monetary penalties, assessments and administrative sanctions.
Retaliation against anyone in connection with reporting 13 Table of Contents ethical concerns is considered a serious violation of our Code of Conduct , and, if it occurs, it will result in discipline, up to and including termination of employment.
Retaliation against anyone in connection with reporting ethical concerns is considered a serious violation of our Code of Conduct , and, if it occurs, it will result in discipline, up to and including termination of employment.
Through these efforts, we have streamlined onboarding and training time of some of our new nurses, and we have reduced certain of our expenses related to new-hire training. Union Activity and Labor Relations —At December 31, 2024, approximately 21% of the employees in our Hospital Operations segment were represented by labor unions.
Through these efforts, we have streamlined onboarding and training time of some of our new nurses, and we have reduced certain of our expenses related to new-hire training. Union Activity and Labor Relations —At December 31, 2025, approximately 20% of the employees in our Hospital Operations segment were represented by labor unions.
If the rates paid by governmental payers are reduced, if the scope of services covered by governmental payers is limited, if eligibility or enrollment is further restricted, if there are changes to align payment rates for certain procedures across various care settings, or if we or one or more of our hospitals are excluded from participation in the Medicare or Medicaid program or any other government healthcare program, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.
If the rates paid by governmental payers are materially reduced, if the scope of services covered by governmental payers is significantly limited, if eligibility or enrollment is further restricted, if there are changes to align payment rates for certain procedures across various care settings in a site neutral manner, or if we or one or more of our hospitals are excluded from participation in the Medicare or Medicaid program or any other government healthcare program, there may be a material adverse effect on our business, financial condition, results of operations or cash flows.
Moreover, the occurrence of cybersecurity incidents and the continued and elevated risk of attacks (including ransomware), system and data breaches, and other disruptions to information technology systems in the current environment has caused increases in our cyber insurance premiums and lower coverage limits. For further information regarding our insurance coverage, see Note 16 to our Consolidated Financial Statements.
Moreover, the occurrence of cybersecurity incidents and the continued and elevated risk of attacks (including ransomware), system and data breaches, and other disruptions to information technology systems in the current environment have caused increases in our cyber insurance premiums and reductions in coverage. For further information regarding our insurance coverage, see Note 16 to our Consolidated Financial Statements.
We have also made greater investments in education and training for newly licensed medical support personnel.
In response, we have made greater investments in education and training for newly licensed medical support personnel.
Our Hospital Operations segment also included 135 outpatient centers at December 31, 2024, primarily freestanding UCCs (nearly all of which are jointly owned with and managed by NextCare in Arizona), provider‑based and freestanding imaging centers, off-campus hospital EDs and micro‑hospitals. Approximately 72% of the outpatient centers in our Hospital Operations segment at December 31, 2024 were in Arizona and Texas.
Our Hospital Operations segment also included 132 outpatient centers at December 31, 2025, primarily freestanding UCCs (nearly all of which are jointly owned with and managed by NextCare in Arizona), provider‑based and freestanding imaging centers, off-campus hospital EDs and micro‑hospitals. Approximately 74% of the outpatient centers in our Hospital Operations segment at December 31, 2025 were in Arizona and Texas.
These state regulations may be more stringent than the FDCPA. In addition, state regulations may be specific to medical billing and collections or the same or similar to state regulations applicable to third‑party collectors.
These state regulations may be more stringent than the FDCPA. In addition, state regulations may be specific to medical billing and collections or the same or 12 Table of Contents similar to state regulations applicable to third‑party collectors.
At December 31, 2024, our Hospital Operations segment was comprised of: (1) 49 acute care and specialty hospitals, a network of employed physicians, and 135 outpatient facilities, including urgent care centers (each, a “UCC”), imaging centers, off-campus hospital emergency departments (“EDs”) and micro‑hospitals; and (2) the revenue cycle management and value‑based care services we provide to hospitals, health systems, physician practices, employers and other clients through our Conifer Health Solutions, LLC joint venture (“Conifer JV”).
At December 31, 2025, our Hospital Operations segment was comprised of: (1) 50 acute care and specialty hospitals, a network of employed physicians, and 132 outpatient facilities, including urgent care centers (each, a “UCC”), imaging centers, off-campus hospital emergency departments (“EDs”) and micro‑hospitals; and (2) the revenue cycle management and value‑based care services we provide to hospitals, health systems, physician practices, employers and other clients through Conifer Health Solutions, LLC.
The term “Conifer,” as used in Part I of this report and unless otherwise stated or indicated by the context, refers to our Conifer JV and its direct or indirect wholly owned subsidiaries.
The term “Conifer,” as used in Part I of this report and unless otherwise stated or indicated by the context, refers to that entity and its direct and indirect wholly owned subsidiaries.
Kennedy Memorial Hospital Indio 145 Owned San Ramon Regional Medical Center (5) San Ramon 123 JV/Owned Florida Delray Medical Center Delray Beach 536 Owned Good Samaritan Medical Center West Palm Beach 333 Owned Palm Beach Gardens Medical Center Palm Beach Gardens 199 Owned St.
Kennedy Memorial Hospital Indio 145 Owned San Ramon Regional Medical Center (5) San Ramon 123 JV/Owned Florida Delray Medical Center Delray Beach 536 Owned Florida Coast Medical Center Port Saint Lucie 54 Owned Good Samaritan Medical Center West Palm Beach 333 Owned Palm Beach Gardens Medical Center Palm Beach Gardens 199 Owned St.
One such law, the Foreign Corrupt 12 Table of Contents Practices Act (“FCPA”), regulates U.S. companies in their dealings with foreign officials, prohibiting bribes and similar practices, and requires that they maintain records that fairly and accurately reflect transactions and appropriate internal accounting controls. FCPA enforcement actions continue to be a high priority for the SEC and the U.S.
One such law, the Foreign Corrupt Practices Act (“FCPA”), regulates U.S. companies in their dealings with foreign officials, prohibiting bribes and similar practices, and requires that they maintain records that fairly and accurately reflect transactions and appropriate internal accounting controls. FCPA enforcement actions continue to be a high priority for the U.S. Securities and Exchange Commission (“SEC”) and the U.S.
In addition to the hospitals and outpatient facilities discussed above, our Hospital Operations segment includes physician practices and other associated healthcare businesses, as well as our Conifer JV’s revenue cycle management and value‑based care service offerings. At December 31, 2024, we owned 76.2% of the Conifer JV, and CommonSpirit Health held a 23.8% ownership position.
In addition to the hospitals and outpatient facilities discussed above, our Hospital Operations segment includes physician practices and other associated healthcare businesses, as well as the revenue cycle management and value‑based care services we offer through Conifer Health Solutions. At December 31, 2025, we owned 76.2% of Conifer Health Solutions, and CommonSpirit Health held a 23.8% ownership position.
At this time, we do not believe that the costs of complying with environmental laws, including regulations relating to climate change issues, will have a material adverse effect on our future capital expenditures, results of operations or cash flows. There were no material capital expenditures for environmental matters in the year ended December 31, 2024.
At this time, we do not believe that the costs of complying with environmental laws will have a material adverse effect on our future capital expenditures, results of operations or cash flows. There were no material capital expenditures for environmental matters in the year ended December 31, 2025.
In addition to enforcement by HHS, state attorneys general are authorized to bring civil actions seeking either injunction or damages in response to violations of HIPAA privacy and security regulations that threaten the privacy of state residents.
Violations of the HIPAA privacy and security regulations may result in criminal penalties and in substantial civil penalties per violation. In addition to enforcement by HHS, state attorneys general are authorized to bring civil actions seeking either injunction or damages in response to violations of HIPAA privacy and security regulations that threaten the privacy of state residents.
In addition, we have significantly increased our focus on operating our outpatient centers with improved accessibility and more convenient service for patients, increased predictability and efficiency for physicians, and (for most services) lower costs for payers and patients than would be incurred with a hospital visit.
In addition, we continue to focus on expanding our ambulatory care business and operating our outpatient centers with improved accessibility and more convenient service for patients, increased predictability and efficiency for physicians, and (for most services) lower costs for payers and patients than would be incurred with a hospital visit.
(In 2023, South Carolina enacted a law that sunsets its hospital certificate of need program effective January 1, 2027.) Certificate of need programs apply to ASCs in 10 states where we have such facilities. Failure to obtain necessary state approval can result in the inability to expand facilities, add services, acquire a facility or change ownership.
(In 2023, South Carolina enacted a law that sunsets its hospital certificate of need program effective January 1, 2027.) Certificate of need programs apply to ASCs in over 40% of the states where we have such facilities, as well as to our surgical hospital in Tennessee. 11 Table of Contents Failure to obtain necessary state approval can result in the inability to expand facilities, add services, acquire a facility or change ownership.
Our operations also generate medical waste that must be 11 Table of Contents discarded in compliance with statutes and regulations that vary from state to state. In addition, our operating expenses could be adversely affected if legal and regulatory developments related to climate change or other initiatives result in increased energy or other costs.
Our operations also generate medical waste that must be discarded in compliance with statutes and regulations that vary from state to state. In addition, our operating expenses could be adversely affected if legal and regulatory developments related to environmental matters result in increased energy or other costs.
The expansion of health insurance coverage under the Affordable Care Act resulted in an increase in the number of patients using our facilities with either private or public program coverage and a decrease in uninsured and charity care admissions, along with reductions in Medicare and Medicaid reimbursement to healthcare providers, including us.
The expansion of health insurance coverage under the Affordable Care Act resulted in an increase in the number of patients using our facilities with either private or public program coverage and a decrease in uninsured and charity care admissions.
Over the past several years, various laws and regulations lengthened the enrollment period, expanded income eligibility, and reduced premium caps for subsidies for individuals purchasing Affordable Care Act coverage through state and federal marketplaces – all of which led to increased enrollment numbers, particularly in states that have not expanded Medicaid.
Over the past several years, various laws and regulations lengthened the enrollment period, expanded income eligibility, and provided enhanced premium tax credits (“EPTCs”) to eligible individuals purchasing Affordable Care Act coverage through state and federal health insurance marketplaces – all of which led to higher enrollment numbers, particularly in states that have not expanded Medicaid.
Some federal and state changes, initiatives and requirements could, among other things, negatively impact our patient volumes, case mix and revenue mix, increase our operating costs, adversely affect the reimbursement we receive for our services, impact our competitive position or require us to expend resources to modify certain aspects of our operations.
Future federal and state healthcare funding policy changes, along with other initiatives and requirements, may, among other things, adversely affect our patient volumes, case mix and revenue mix, increase our operating costs, materially reduce the reimbursement we receive for our services, diminish our competitive position or require us to expend resources to modify certain aspects of our operations.
Moreover, we could be affected by climate change and other environmental issues to the extent such issues adversely affect the general economy or result in severe weather or natural disasters affecting the communities in which our facilities are located.
Moreover, we could be affected by natural disasters, weather‑related events and other environmental issues to the extent such issues adversely affect the general economy or the communities where our facilities are located.
We believe the use of these practices will promote the most effective and efficient utilization of resources and result in more appropriate lengths of stay, as well as reductions in readmissions for hospitalized patients.
Moreover, we participate in various value‑based programs to improve quality and cost of care. We believe the use of these practices will promote the most effective and efficient utilization of resources and result in more appropriate lengths of stay, as well as reductions in readmissions for hospitalized patients.
When considering forward‑looking statements, you should keep in mind the risk factors and other cautionary statements in this report. Should one or more of the risks and uncertainties described in this report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward‑looking statement.
Should one or more of the risks and uncertainties described in this report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any 15 Table of Contents forward‑looking statement.
HUMAN CAPITAL RESOURCES PHYSICIANS Our operations depend in large part on the number, quality, specialties, and admitting and scheduling practices of the licensed physicians who are members of the medical staffs of our hospitals and other facilities, as well as physicians who affiliate with us and use our facilities as an extension of their practices.
We believe that all of our properties are suitable for their respective uses and are, in general, adequate for our present needs. 4 Table of Contents HUMAN CAPITAL RESOURCES PHYSICIANS Our operations depend in large part on the number, quality, specialties, and admitting and scheduling practices of the licensed physicians who are members of the medical staffs of our hospitals and other facilities, as well as physicians who affiliate with us and use our facilities as an extension of their practices.
Moreover, from time to time, we are required to limit admissions if we do not have the necessary number of nurses available to meet the required ratios, which has a corresponding adverse effect on our revenues.
In California, our acute care hospitals are required to maintain minimum nurse‑to‑patient staffing ratios, which impacts our labor costs. Moreover, from time to time, we are required to limit admissions if we do not have the necessary number of nurses available to meet the required ratios, which has a corresponding adverse effect on our revenues.
Although we have no contractual relationship with most of the physicians who practice at our hospitals and outpatient centers, at December 31, 2024, we owned over 650 physician practices, and our subsidiaries employed (where permitted by state law) or were otherwise affiliated with nearly 1,135 physicians.
Although we have no contractual relationship with most of the physicians who practice at our hospitals and outpatient centers, we own hundreds of physician practices, and our subsidiaries employ (where permitted by state law) or otherwise affiliate with over a thousand physicians.
In addition, we continually collaborate with physicians to implement the most current evidence‑based medicine techniques to improve the way we provide care, while using labor management tools and supply‑chain initiatives to reduce variable costs. Moreover, we participate in various value‑based programs to improve quality and cost of care.
To that end, we have made significant investments in equipment, technology, education and operational strategies designed to improve clinical quality at our facilities. In addition, we continually collaborate with physicians to implement the most current evidence‑based medicine techniques to improve the way we provide care, while using labor management tools and supply‑chain initiatives to reduce variable costs.
Our Ambulatory Care segment, through our USPI Holding Company, Inc. subsidiary (“USPI”), held ownership interests in 518 ambulatory surgery centers (each, an “ASC”) and 25 surgical hospitals at December 31, 2024.
Our Ambulatory Care segment is comprised of the operations of USPI Holding Company, Inc. (together with its subsidiaries, “USPI”), which held ownership interests in 533 ambulatory surgery centers (each, an “ASC”) and 26 surgical hospitals at December 31, 2025.
All non-permitted uses or disclosures of unsecured PHI are presumed to be breaches unless it can be established that there is a low probability the information has been compromised.
All non-permitted uses or disclosures of unsecured PHI are presumed to be breaches unless it can be established that there is a low probability the information has been compromised. Various state laws and regulations may also require us to notify the applicable state agency and affected individuals in the event of a data breach involving personally identifiable information (“PII”).
Although relatively uncommon, extended strikes have had, and could in the future have, an adverse effect on our patient volumes, net operating revenues and labor costs at individual hospitals or in local markets. Staffing Ratio Requirements —Our acute care hospitals in California are required to maintain minimum nurse‑to‑patient staffing ratios, which impacts our labor costs.
Although relatively uncommon, extended strikes have had, and could in the future have, an adverse effect on our patient volumes, net operating revenues and labor costs at individual hospitals or in local markets. 6 Table of Contents Nurse Staffing —We routinely assess nurse staffing levels and recruiting efforts based on patient care needs, operational requirements and market conditions.
At December 31, 2024, our subsidiaries operated 49 acute care and specialty hospitals serving primarily urban and suburban communities in eight states. Our subsidiaries had sole ownership of 45 of these hospitals, two were owned by entities that are majority owned by a Tenet subsidiary, and two were owned by third parties and leased by our wholly owned subsidiaries.
We had sole ownership of 46 of these hospitals, two were owned by entities that are majority owned by a Tenet subsidiary, and two were owned by third parties and leased by our wholly owned subsidiaries.
We seek to recruit and retain qualified employees across all demographics; to conduct fair and open competition; and to select and advance employees based on their knowledge, skills, abilities and performance.
We seek to recruit and retain qualified employees across all demographics; to conduct fair and open competition; and to select and advance employees based on their knowledge, skills, abilities and performance. In many cases, we utilize objective benchmarking and other tools in our efforts in such areas as organizational effectiveness, engagement, voluntary turnover and staffing efficiencies.
We cannot predict the outcome of current or future legal actions against Conifer or the effect that judgments, penalties or settlements in such matters may have. The federal Fair Debt Collection Practices Act (“FDCPA”) regulates persons who regularly collect or attempt to collect, directly or indirectly, consumer debts owed or asserted to be owed to another person.
The federal Fair Debt Collection Practices Act (“FDCPA”) regulates persons who regularly collect or attempt to collect, directly or indirectly, consumer debts owed or asserted to be owed to another person.
In many cases, we utilize objective benchmarking and other tools in our efforts in such areas as organizational effectiveness, engagement, voluntary turnover and staffing efficiencies. 5 Table of Contents Compensation and Benefits —In general, we seek to attract, develop and retain a qualified, diverse, resilient and engaged workforce and to cultivate a performance‑oriented culture that embraces data‑driven decision‑making.
Compensation and Benefits —In general, we seek to attract, develop and retain a qualified, diverse, resilient and engaged workforce and to cultivate a performance‑oriented culture that embraces data‑driven decision‑making.
In some of our communities, employers across various industries have increased their minimum wage, which has created more competition and, in some cases, higher labor costs for this sector of employees. Furthermore, state-mandated minimum wage increases in California became effective for healthcare workers in October 2024, with further annual increases anticipated through 2028.
We also depend on the general labor pool of available workers in the areas where we operate. In some of our communities, employers across various industries have increased their minimum wage, which has created more competition and, in some cases, higher labor costs for this sector of employees.
These leases typically have initial terms ranging from five to 10 years, and most of the leases contain options to extend the lease periods. In addition, our subsidiaries own some medical office buildings located on, or nearby, our hospital campuses. We typically lease our office space under operating lease agreements. Our corporate headquarters are in Dallas, Texas.
We lease the majority of our outpatient facilities in both our Hospital Operations segment and our Ambulatory Care segment, and our physician practices also lease space in medical office buildings. These leases typically have initial terms ranging from five to 10 years, and most of the leases contain options to extend the lease periods.
Commercial insurance may not continue to be available at a reasonable cost for us to maintain at adequate levels in the future. In addition, our insurance against cybersecurity risks and cyber-attacks may not provide the coverage we anticipate or offset the financial impact of a material loss event.
Commercial insurance may not continue to be available at a reasonable cost for us to maintain at adequate levels in the future.
We structure our joint ventures and adopt staffing, scheduling, and clinical systems and protocols with the goals of increasing physician productivity and satisfaction. REAL PROPERTY The locations of our acute care and specialty hospitals and the number of licensed beds at each at December 31, 2024 are set forth in the table beginning on page 2 .
REAL PROPERTY The locations of our acute care and specialty hospitals and the number of licensed beds at each at December 31, 2025 are presented in the table beginning on page 2 . The locations of USPI’s surgical hospitals and ASCs are reflected on the map above.
We had employees in all 50 U.S. states and the District of Columbia, as well as approximately 4,000 GBC employees providing support across our entire network, at December 31, 2024. Approximately 32% of our employees are nurses. Board Oversight —Our board of directors and its committees oversee human capital matters through regular reports from management and advisors.
Approximately 31% of our employees are nurses. Board Oversight —Our board of directors and its committees oversee human capital matters through regular reports from management and advisors.
Tenet and CommonSpirit Health facilities represented approximately 43% of these clients, and the remainder were unaffiliated health systems, hospitals, physician practices, self‑insured organizations, health plans and other entities. AMBULATORY CARE SEGMENT At December 31, 2024, USPI held indirect ownership interests in 518 ASCs and 25 surgical hospitals in 37 states.
Tenet and CommonSpirit Health facilities represented approximately 44% of these clients, and the remainder were unaffiliated health systems, hospitals, physician practices, self‑insured organizations, health plans and other entities. AMBULATORY CARE SEGMENT We acquire and develop the facilities in our Ambulatory Care segment primarily through the formation of joint ventures with physicians and/or health system partners.
We cannot predict whether or how the new Congress may extend or modify provisions of or relating to the Affordable Care Act or other laws affecting the healthcare industry generally, nor can we predict how the new administration will influence, promulgate or implement rules, regulations or executive orders that affect the healthcare industry directly or indirectly.
At this time, we cannot estimate the OBBBA’s impact, nor can we predict the timing of that impact, on our future business, financial condition or results of operations, however, we may experience decreased payments (including supplemental payments) from Medicare, Medicaid and other government programs, as well as delays in the timing of payments to our facilities. 9 Table of Contents We also cannot predict whether or how Congress may further extend or modify provisions of or relating to the Affordable Care Act, the OBBBA or other laws affecting the healthcare industry generally, nor can we predict how government agencies or the current administration might further influence, promulgate or implement rules, regulations or executive orders that affect the healthcare industry directly or indirectly.
We cannot predict the impact of these laws on our ability to complete transactions in the related states. LAWS AND REGULATIONS AFFECTING REVENUE CYCLE MANAGEMENT SERVICES Conifer is subject to civil and criminal statutes and regulations governing consumer finance, medical billing, coding, collections and other operations.
LAWS AND REGULATIONS AFFECTING REVENUE CYCLE MANAGEMENT SERVICES Conifer is subject to civil and criminal statutes and regulations governing consumer finance, medical billing, coding, collections and other operations. In connection with these laws and regulations, Conifer has been and may continue to be party to various lawsuits, claims, and federal and state regulatory investigations from time to time.
Organizing activities by labor unions could increase our level of union representation in future periods, which could impact our labor costs. When we are negotiating collective bargaining agreements with unions (whether such agreements are renewals or first contracts), work stoppages and strikes may be threatened or occur.
We bargain in good faith over mandatory subjects of bargaining and evaluate proposals in light of operational considerations and applicable legal requirements. When we are negotiating collective bargaining agreements with unions (whether such agreements are renewals or first contracts), work stoppages and strikes may be threatened or occur.
Human Resources Practices —We have established – and continue to enhance and refine – a comprehensive set of practices for recruiting, managing and optimizing the human resources of our organization.
The HR Committee also provides, among other things, its perspectives regarding performance management, succession planning, leadership development, equality of opportunity, recruiting, retention and employee training. Human Resources Practices —We have established – and periodically enhance and refine – a comprehensive set of practices for recruiting, managing and optimizing the human resources of our organization.
Certain of these provisions are set to expire at the end of 2025; if they are not extended, it could result in significant increases in premiums, potentially leading to decreased enrollment and a corresponding rise in the number of uninsured Americans or a shift of individuals from commercial coverage to government program coverage beginning in 2026.
Such increases have led to decreases in enrollment and insurance coverage, and are expected to cause a corresponding rise in the uninsured or a shift of individuals from commercial coverage to government program coverage or other more limited coverage alternatives beginning in 2026.
At December 31, 2024, we employed approximately 98,000 people (of which approximately 24% were part‑time and on-call employees) in our two reporting segments, as follows: Hospital Operations 73,000 Ambulatory Care 25,000 Total 98,000 At December 31, 2024, our overall employee headcount was approximately 8% lower than at December 31, 2023, primarily due to the divestiture of 14 hospitals and related operations during 2024, partially offset by an increase in our Ambulatory Care employees as a result of acquisition and development activity.
At December 31, 2025, we employed nearly 100,000 people (of which approximately 23% were part‑time and on-call employees) in our two reporting segments, as follows: Hospital Operations 75,000 Ambulatory Care 24,000 Total 99,000 We had employees in all 50 U.S. states and the District of Columbia, as well as approximately 5,600 GBC employees providing support across our entire network, at December 31, 2025.
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OPERATIONS HOSPITAL OPERATIONS AND SERVICES SEGMENT In 2024, we continued to pursue advantageous opportunities to grow our portfolio of hospitals and other healthcare facilities. In July, we opened the newly constructed, 92‑bed Westover Hills Baptist Hospital in San Antonio, and, in September, we acquired a majority ownership interest in a 36‑bed rehabilitation hospital in El Paso.
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OPERATIONS In 2025, we continued to strengthen our organization and expand the care we provide while remaining committed to quality, safety and operational excellence. We enhanced access to higher-acuity services in our communities, advanced ambulatory surgery care, invested in state-of-the-art technology and facilities, and welcomed new team members and physician partners.
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In addition, we continued construction in 2024 on a new medical campus located in Port St. Lucie, which will include the 54‑bed Florida Coast Surgical Hospital, as well as medical office space. We expect to complete construction of the Port St. Lucie medical campus in late 2025.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur participation in joint ventures is also subject to the risks that: • We could experience an impasse on certain decisions because we do not have sole decision‑making authority, which could require us to expend additional resources on resolving such impasses or potential disputes. • We may not be able to maintain good relationships with our joint venture partners (including health systems), which could limit our future growth potential and could have an adverse effect on our business strategies. • Our joint venture partners could have investment or operational goals that are not consistent with our corporate‑wide objectives (including the timing, terms and strategies for investments or future growth opportunities) or their relevant contractual obligations. • Our joint venture partners might become bankrupt, fail to fund their share of required capital contributions or fail to fulfill their other obligations as joint venture partners, which may require us to infuse our own capital into any such venture on behalf of the related joint venture partner or partners despite other competing uses for such capital. • The requirements in some of our existing joint ventures that one of our wholly owned subsidiaries provide a working capital line of credit to the joint venture could necessitate the allocation of substantial financial resources to the joint venture, potentially impacting our ability to fund our other short‑term obligations. • Provisions in some of our existing joint venture arrangements requiring mandatory capital expenditures for the benefit of the applicable joint venture could limit our ability to expend funds on other corporate opportunities. • Our joint venture partners may have competing interests in our markets that could create conflict of interest issues, which could impact the sustainability of our relationships. • Any sale or other disposition of our interest in a joint venture or underlying assets of the joint venture may require consents from our joint venture partners, which we may not be able to obtain. 25 Table of Contents • Certain corporate‑wide or strategic transactions may also trigger other contractual rights held by a joint venture partner (including termination or liquidation rights) depending on how the transaction is structured, which could impact our ability to complete such transactions. • Put/call arrangements and other joint venture exit rights could require us to utilize our cash flow or incur additional indebtedness to satisfy the payment obligations in respect of such arrangements. • Our joint venture arrangements that involve financial and ownership relationships with physicians and others who either refer or influence the referral of patients to our hospitals or other healthcare facilities are subject to greater regulatory scrutiny from government enforcement agencies.
Biggest changeOur participation in joint ventures is also subject to the risks that: • We could experience an impasse on certain decisions because we do not have sole decision‑making authority, which could require us to expend additional resources on resolving such impasses or potential disputes. • We may not be able to maintain good relationships with our joint venture partners (including health systems), which could limit our future growth potential and could have an adverse effect on our business strategies. • Our joint venture partners could have investment or operational goals that are not consistent with our corporate‑wide objectives (including the timing, terms and strategies for investments or future growth opportunities) or their relevant contractual obligations. 25 Table of Contents • Our joint venture partners might become bankrupt, fail to fund their share of required capital contributions or fail to fulfill their other obligations as joint venture partners, which may require us to infuse our own capital into any such venture on behalf of the related joint venture partner or partners despite other competing uses for such capital. • Provisions in some of our existing joint venture arrangements requiring mandatory capital expenditures for the benefit of the applicable joint venture could limit our ability to expend funds on other corporate opportunities. • Our joint venture partners may have competing interests in our markets that could create conflict of interest issues, which could impact the sustainability of our relationships. • Any sale or other disposition of our interest in a joint venture or underlying assets of the joint venture may require consents from our joint venture partners, which we may not be able to obtain. • Certain corporate‑wide or strategic transactions may also trigger other contractual rights held by a joint venture partner (including termination or liquidation rights) depending on how the transaction is structured, which could impact our ability to complete such transactions. • Put/call arrangements and other joint venture rights could require us to utilize our cash flow or incur additional indebtedness to satisfy the payment obligations in respect of such arrangements. • Our joint venture arrangements that involve financial and ownership relationships with physicians and others who either refer or influence the referral of patients to our hospitals or other healthcare facilities are subject to greater regulatory scrutiny from government enforcement agencies.
Some competing healthcare facilities are owned by tax‑supported government agencies, and many others are owned by not‑for‑profit organizations that may have financial advantages not available to our facilities, including (1) support through endowments, charitable contributions and tax revenues, (2) access to tax‑exempt financing, (3) exemptions from sales, property and income taxes, (4) discounted prescription drug pricing.
Some competing healthcare facilities are owned by tax‑supported government agencies, and many others are owned by not‑for‑profit organizations that may have financial advantages not available to our facilities, including (1) support through endowments, charitable contributions and tax revenues, (2) access to tax‑exempt financing, (3) exemptions from sales, property and income taxes and (4) discounted prescription drug pricing.
Our indebtedness could have important consequences, including the following: • Our indebtedness may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt. • We may be more vulnerable in the event of a deterioration in our business, in the healthcare industry or in the economy generally, or if federal or state governments substantially limit or reduce reimbursement under the Medicare or Medicaid programs. • Our debt service obligations reduce the amount of funds available for our operations, capital expenditures and corporate development activities, and may make it more difficult for us to satisfy our financial obligations. • Our operations are capital intensive and require significant investment to maintain buildings, equipment, software and other assets.
Our indebtedness could have important consequences, including the following: • Our indebtedness may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt. • We may be more vulnerable in the event of a deterioration in our business, in the healthcare industry or in the economy generally, or if federal or state governments substantially limit or reduce reimbursement under the Medicare or Medicaid programs. • Our debt service obligations reduce the amount of funds available for our operations, capital expenditures and corporate development activities, and may make it more difficult for us to satisfy our other financial obligations. • Our operations are capital intensive and require significant investment to maintain buildings, equipment, software and other assets.
Participation in certain bundled payment models is voluntary; however, other bundled payment models are mandatory for providers in randomly selected geographic areas. Under the mandatory models, hospitals are eligible to receive incentive payments or will be subject to payment reductions within certain corridors based on their performance against quality and spending criteria.
Participation in certain bundled payment models is voluntary; however, other bundled payment models are mandatory for providers in selected geographic areas. Under the mandatory models, hospitals are eligible to receive incentive payments or will be subject to payment reductions within certain corridors based on their performance against quality and spending criteria.
We cannot predict the outcome of current or future legal actions against us or the effect that judgments or settlements in such matters may have on us or on our insurance costs. Additionally, professional and general liability insurance we purchase is subject to per-claim and policy period aggregate limits.
We cannot predict the outcome of current or future legal actions against us or the effect that judgments or settlements in such matters may have on us or on our insurance costs. Additionally, professional and general liability insurance is subject to per-claim and policy period aggregate limits.
In addition, our ability to meet our debt service obligations is primarily dependent upon the operating results of our subsidiaries and their ability to pay dividends or make other payments or advances to us. We hold most of our assets at, and conduct substantially all of our operations through, direct and indirect subsidiaries.
In addition, our ability to meet our debt service obligations is primarily dependent upon the operating results of our subsidiaries and their ability to pay dividends or make other payments or advances to us. We hold most of our assets and conduct substantially all of our operations through direct and indirect subsidiaries.
These restrictions are subject to a number of important exceptions and qualifications. In addition, under certain circumstances, the terms of our Credit Agreement require us to maintain a financial ratio relating to our ability to satisfy certain fixed expenses, including interest payments.
These restrictions are subject to important exceptions and qualifications. In addition, under certain circumstances, the terms of our Credit Agreement require us to maintain a financial ratio relating to our ability to satisfy certain fixed expenses, including interest payments.
We continue to be required to expend significant additional resources to modify and strengthen our security measures, investigate and respond to cybersecurity incidents, remediate any vulnerabilities in our information systems and infrastructure, and invest in new technology designed to mitigate security risks.
We continue to be required to expend significant additional resources to modify and strengthen our security measures, investigate, detect and respond to cybersecurity incidents, remediate any vulnerabilities in our information systems and infrastructure, and invest in new technology designed to mitigate security risks.
An attack, breach or other system disruption affecting any of these third parties could similarly harm our business, impact payment of claims, and potentially harm our patients and clients.
An attack, breach or other system disruption affecting any of these third parties could similarly harm our business or reputation, impact payment of claims, and potentially harm our patients and clients.
We must prioritize changes and improvements to be made, and we may not be successful identifying gaps or developing alternative methods to secure our systems and data.
We must prioritize changes and improvements to be made, and we may not be successful in identifying gaps or developing alternative methods to secure our systems and data.
Third parties to whom we outsource certain of our functions, with whom we share data for interoperability purposes or from whom we obtain or to whom we provide products and related services, including those that are part of our revenue cycle processes or supply chain, or other third parties with whom our systems interface (such as clients and their vendors, among others), in some instances, store our sensitive and confidential data; these third parties are also subject to the risks outlined above and may not have or use controls effective to protect such information.
Third parties to whom we outsource certain of our functions, with whom we share data for interoperability purposes or from whom we obtain or to whom we provide products and related services, including those that are part of our revenue cycle processes or supply chain, or other third parties with whom our systems interface (such as clients and their vendors, among others), in some instances, store our sensitive and confidential data; these third parties are also subject to the risks outlined 20 Table of Contents above and may not have or use controls effective to protect such information.
Our networks and technology systems have also experienced disruption due to planned events, such as system implementations, upgrades, and other maintenance and improvements, and they are subject to disruption in the future for similar events, as well as catastrophic events, including a major earthquake, fire, hurricane, telecommunications failure, terrorist attack or the like.
Our networks and technology systems have also experienced disruption due to planned events, such as system implementations and upgrades, as well as other maintenance and improvements, and they are subject to disruption in the future for similar events, as well as catastrophic events, including a major earthquake, fire, hurricane, telecommunications failure, other technology systems interruption or outage, terrorist attack or the like.
Any ransomware attack, breach, system interruption or unavailability of our information systems or of third-party systems with access to our data could result in: the unauthorized disclosure, misuse, loss or corruption of such data; interruptions and delays in our normal business operations (including the collection of revenues); patient or client harm; potential liability under privacy, security, consumer protection or other applicable laws; regulatory penalties; ransomware payments; and negative publicity and damage to our reputation.
Any ransomware attack, breach, system interruption or unavailability of our information systems or of third-party systems with access to our data could result in: the unauthorized disclosure, misuse, loss or corruption of such data; interruptions and delays in our normal business operations (including the collection of revenues); patient or client harm; potential liability under privacy, security, consumer protection or other applicable laws; regulatory penalties; legal damages and other payments; and negative publicity and harm to our reputation.
USPI and our hospital-based joint ventures depend on existing relationships with key health system partners. If we are unable to maintain synergistic relationships with these systems, or enter into new relationships, we may be unable to implement our business strategies successfully.
USPI and our hospital-related joint ventures depend on existing relationships with key health system partners. If we are unable to maintain synergistic relationships with these systems, or enter into new relationships, we may be unable to implement our business strategies successfully.
The information technology and infrastructure we use, the third‑party systems we interact with and the suppliers we use, have been, and continue to be, subject to cyber-attacks, computer viruses or breaches due to malfeasance or employee error.
The information technology and infrastructure we use, the third‑party systems we interact with and the suppliers we use have been and continue to be subject to cyber-attacks, malware, computer viruses and breaches, including due to malfeasance or employee error.
Risks Related to Acquisitions, Divestitures and Joint Ventures When we acquire new assets or businesses, we become subject to various risks and uncertainties that could adversely affect our results of operations and financial condition. We have completed a number of acquisitions in recent years, and we expect to pursue additional transactions in the future.
Risks Related to Acquisitions, Divestitures and Joint Ventures When we acquire new assets or businesses, we become subject to various risks and uncertainties that could adversely affect our results of operations and financial condition. We have completed numerous acquisitions in recent years, and we expect to pursue additional transactions in the future.
The potential consequences for failing to comply with applicable laws, rules and regulations include (1) required refunds of previously received government program payments, (2) the assessment of civil monetary penalties, including treble damages, (3) fines, which could be significant, (4) exclusion from participation in federal healthcare programs and (5) criminal sanctions, including sanctions against current or former employees.
The potential consequences for failing to comply with applicable laws, rules and regulations include (1) required refunds of previously received government program payments, (2) the assessment of civil monetary penalties, including treble damages, (3) fines, which could be significant, (4) the imposition of operational restrictions, (5) exclusion from participation in federal healthcare programs and (6) criminal sanctions, including sanctions against current or former employees.
Furthermore, even a public announcement that we are being investigated for possible violations of law could have a material adverse effect on the value of our common stock and our business reputation could suffer. As noted, the healthcare industry continues to attract legislative interest and public attention.
Furthermore, even a public announcement that we are being investigated for possible violations of law could have a material adverse effect on the trading price of our common stock and our business reputation could suffer. As noted, the healthcare industry continues to attract legislative interest and public attention.
Furthermore, if Conifer becomes subject to fines or other penalties, it could harm Conifer’s reputation, thereby making it more difficult to retain existing clients or attract new clients. 22 Table of Contents We could be subject to substantial uninsured liabilities or increased insurance costs as a result of significant legal actions.
Furthermore, if Conifer becomes subject to fines or other penalties, it could harm Conifer’s reputation, thereby making it more difficult to retain existing clients or attract new clients. We could be subject to substantial uninsured liabilities or increased insurance costs as a result of significant legal actions.
From time to time, we pursue opportunities to refine our portfolio of hospitals and other healthcare facilities when we believe such refinements will help us improve profitability, allocate capital more effectively in areas where we have a stronger presence, deploy proceeds toward higher-return investments across our business, enhance cash flow generation or reduce our debt, among other things.
From time to time, we capitalize on opportunities to refine our portfolio of hospitals and other healthcare facilities or operations when we believe such refinements will help us improve profitability, allocate capital more effectively in areas where we have a stronger presence, deploy proceeds toward higher-return investments across our business, enhance cash flow generation or reduce our debt, among other things.
Medicare requires providers to report certain quality measures in order to receive full reimbursement increases that were previously awarded automatically for inpatient and outpatient procedures; each year, CMS updates these measures through refinement or removal of existing measures and the addition of new measures.
Medicare requires 21 Table of Contents providers to report certain quality measures in order to receive full reimbursement increases that were previously awarded automatically for inpatient and outpatient procedures; each year, CMS updates these measures through refinement or removal of existing measures and the addition of new measures.
In addition, the competitive positions of hospitals and outpatient facilities depend in part on the number, quality, specialties, and admitting and scheduling practices of the licensed physicians who are members of the medical staffs of those facilities, as well as physicians who affiliate with and use 18 Table of Contents outpatient centers as an extension of their practices.
In addition, the competitive positions of hospitals and outpatient facilities depend in part on the number, quality, specialties, and admitting and scheduling practices of the licensed physicians who are members of the medical staffs of those facilities, as well as physicians who affiliate with and use outpatient centers as an extension of their practices.
In addition, our divestiture activities have required, and may in the future require, us to retain significant pre‑closing liabilities, recognize impairment charges (as discussed above) or agree to contractual restrictions that limit our ability to reenter a particular market, which may be material.
In addition, our divestiture activities have required, and may in the future require, us to retain significant pre‑closing liabilities, recognize impairment charges (as discussed above) or agree to contractual restrictions that limit our ability to reenter a particular market.
In addition, managed care payers continue to seek to control healthcare costs by encouraging patients to use certain facilities in exchange for discounts from the facilities’ established charges, and through increased utilization reviews and greater enrollment in HMOs and PPOs. Any negotiated discount programs we agree to generally limit our ability to increase reimbursement rates to offset increasing costs.
In addition, managed care payers continue to seek to control healthcare costs by encouraging patients to use certain facilities in exchange for discounts from the facilities’ established charges, and through increased utilization reviews and greater enrollment in HMOs and PPOs. Any agreed-upon negotiated discount programs generally limit our ability to increase reimbursement rates to offset increasing costs.
In addition, inflationary pressures, which we are unable to predict or control, may continue to impact our salaries, wages, benefits and other costs. Increased labor union activity is another factor that can adversely affect our labor costs. At December 31, 2024, approximately 21% of the employees in our Hospital Operations segment were represented by labor unions.
In addition, inflationary pressures, which we are unable to predict or control, may continue to impact our salaries, wages, benefits and other costs. Increased labor union activity is another factor that can adversely affect our labor costs. At December 31, 2025, approximately 20% of the employees in our Hospital Operations segment were represented by labor unions.
There can be no assurance that we will be able to maintain a level of 26 Table of Contents cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
There can be no assurance that we will be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
It is difficult to predict what impact, if any, these demonstration programs will have on our inpatient volumes, net revenues or cash flows. 21 Table of Contents Over the years, private payers have also sought to move toward value‑based purchasing and alternative payment models for healthcare services.
It is difficult to predict what impact, if any, these demonstration programs will have on our inpatient volumes, net revenues or cash flows. Over the years, private payers have also sought to move toward value‑based purchasing and alternative payment models for healthcare services.
Regulations related to such laws are subject to changing interpretations that may be inconsistent among different jurisdictions. In addition, a regulatory determination made by, or a settlement or consent decree entered into with, one regulatory agency may not be binding upon, or preclude, investigations or regulatory actions by other agencies.
Regulations related to such laws are subject to changing interpretations that may be inconsistent among different jurisdictions. In addition, a regulatory determination made by, or a 22 Table of Contents settlement or consent decree entered into with, one regulatory agency may not be binding upon, or preclude, investigations or regulatory actions by other agencies.
Furthermore, material payment delays and disputes between us and significant managed care payers could have a material adverse effect on our financial condition, results of operations or cash flows. At December 31, 2024, 68% of our Hospital Operations segment’s net accounts receivable was due from managed care payers.
Furthermore, material payment delays and disputes between us and significant managed care payers could have a material adverse effect on our financial condition, results of operations or cash flows. At December 31, 2025, 67% of our Hospital Operations segment’s net accounts receivable was due from managed care payers.
For the year ended December 31, 2024, approximately 15% and 10% of our net patient service revenues for the hospitals and related outpatient facilities in our Hospital Operations segment were from the Medicare program and various state Medicaid programs, respectively, in each case excluding Medicare and Medicaid managed care programs.
For the year ended December 31, 2025, approximately 15% and 11% of our net patient service revenues for the hospitals and related outpatient facilities in our Hospital Operations segment were from the Medicare program and various state Medicaid programs, respectively, in each case excluding Medicare and Medicaid managed care programs.
If the rates paid by governmental payers are reduced, if the scope of services covered by governmental payers is limited, if eligibility or enrollment is further restricted, if there are changes to align payment rates for certain procedures across various care settings, or if we or one or more of our hospitals are excluded from participation in the Medicare or Medicaid program or any other government healthcare program, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.
If the rates paid by governmental payers are materially reduced, if the scope of services covered by governmental payers is significantly limited, if eligibility or enrollment is further restricted, if there are changes to align payment rates for certain procedures across various care settings in a site neutral manner, or if we or one or more of our hospitals are excluded from participation in the Medicare or Medicaid program or any other government healthcare program, there may be a material adverse effect on our business, financial condition, results of operations or cash flows.
We utilize electronic health records (“EHRs”) and other information technology in connection with all of our operations, including our billing and other financial systems, supply chain and labor management tools.
We utilize electronic health records (“EHRs”) and other information technology in connection with all of our operations, including our billing and other financial systems, as well as our supply chain, scheduling and labor management tools.
Our Credit Agreement is collateralized by eligible inventory and patient accounts receivable, including receivables for Medicaid supplemental payments, of substantially all of our wholly owned acute care and specialty hospitals, and our LC Facility is guaranteed and secured by a first priority pledge of the capital stock and other ownership interests of certain of our hospital subsidiaries on an equal‑ranking basis with our existing senior secured notes.
Our Credit Agreement is collateralized by eligible inventory and patient accounts receivable, including receivables for Medicaid supplemental payments, of substantially all of our wholly owned acute care and specialty hospitals, and obligations under our LC Facility are guaranteed and secured by a first‑priority pledge of the capital stock and other ownership interests of certain of our wholly owned domestic hospital subsidiaries on an equal‑ranking basis with our senior secured first lien notes.
We have been required, and we may in the future be required, to temporarily reduce overall operating capacity or suspend certain services at individual facilities due to staffing constraints and other infectious disease-related factors.
We 19 Table of Contents have been required, and we may in the future be required, to temporarily reduce overall operating capacity or suspend certain services at individual facilities due to staffing constraints and other infectious disease-related factors.
Attacks on, or breaches or other disruptions to, our information technology assets or those of third parties that we rely upon could impact the integrity, security or availability of data we process, transmit or store and could impact our operations, as well as PHI and PII, and result in potential harm to our patients and clients.
Attacks on, or breaches or other disruptions to, our information technology assets or those of third parties that we rely upon could impact the integrity, security or availability of data (including PHI and PII) we process, transmit or store and could impact our operations, resulting in potential harm to our patients and clients.
In general, any material reductions in the contracted or out-of-network rates we receive for our services or any significant difficulties in collecting receivables from managed care payers could have a material adverse effect on our financial condition, results of operations or cash flows. Changes in healthcare laws, regulations and policies could have an adverse effect on our business.
In general, any material reductions in the contracted or out-of-network rates we receive for our services or any significant difficulties in collecting receivables from managed care payers could have a material adverse effect on our financial condition, results of operations or cash flows. 16 Table of Contents Recent and potential future changes to healthcare laws, regulations and policies could have an adverse effect on our business.
In addition, the occurrence of cybersecurity incidents and the continued and elevated risk of attacks (including ransomware), system and data breaches, and other disruptions to information technology systems in the current environment has caused increases in our cyber insurance premiums and lower coverage limits.
In addition, the occurrence of cybersecurity incidents and the continued and elevated risk of attacks (including ransomware), system and data breaches, and other disruptions to information technology systems in the current environment have caused increases in our cyber insurance premiums and reductions in coverage.
As a result of factors that have negatively affected our industry generally and our business specifically, we have been, and in the future expect to be, required to record various charges in our results of operations. During the year ended December 31, 2024, we recorded $7 million of impairment charges and $56 million of restructuring charges.
As a result of factors that have negatively affected our industry generally and our business specifically, we have been, and in the future expect to be, required to record various charges in our results of operations. During the year ended December 31, 2025, we recorded $61 million of impairment charges and $44 million of restructuring charges.
At December 31, 2024, we had approximately $13.173 billion of total long‑term debt, as well as $106 million in standby letters of credit outstanding in the aggregate under our senior secured revolving credit facility (as amended, “Credit Agreement”) and our letter of credit facility agreement (as amended, “LC Facility”).
At December 31, 2025, we had approximately $13.171 billion of total long‑term debt, as well as $104 million in standby letters of credit outstanding in the aggregate under our senior secured revolving credit facility (“Credit Agreement”) and our letter of credit facility agreement (as amended, “LC Facility”).
Conversely, if we are unable to successfully maintain, enhance or operate our information systems, including through the implementation of AI technologies or applications in our operations, we may be, among other things, unable to efficiently adapt to evolving laws and requirements, unable to remain competitive with others who successfully implement and advance this technology, and our patients’ safety may be adversely impacted, any of which could have a material adverse impact on our overall business, financial condition, results of operations or cash flows.
Conversely, if we are unable to successfully maintain, enhance or operate our information systems, including through the implementation of AI‑enabled technologies or applications in our operations, we may be, among other things, unable to efficiently adapt to evolving laws and requirements or remain competitive with others who successfully implement and advance current and emerging technologies, which could have a material adverse impact on our overall business, financial condition, results of operations or cash flows.
We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations, or that these actions would be permitted under the terms of our existing or future debt agreements, including our Credit Agreement, our LC Facility and the indentures governing our outstanding notes.
There can be no assurance that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations, or that these actions would be permitted under the terms of our existing or future debt agreements, including our Credit Agreement, our LC Facility and the indentures governing our outstanding notes.
We compete with system‑affiliated hospitals and healthcare companies, as well as health insurers and private equity companies, in recruiting physicians, acquiring physician practices and, where permitted by law, employing physicians. In 2024, 17 Table of Contents we continued to experience challenges in recruiting and retaining physicians.
We compete with system‑affiliated hospitals and healthcare companies, as well as health insurers and private equity companies, in recruiting physicians, acquiring physician practices and, where permitted by law, employing physicians. In 2025, we continued to experience challenges in recruiting and retaining physicians.
Moreover, differences in economic or business interests or goals among joint venture participants could result in delayed decisions, failures to agree on major issues and even litigation, including claims for breach and attempts to terminate underlying contracts.
Moreover, differences in economic or business interests or goals among joint venture participants could result in delayed decisions, failures to agree on major issues, which could lead to a dissolution of such arrangement, and even litigation, including claims for breach and attempts to terminate underlying contracts.
If our healthcare competitors are better able to attract patients, recruit physicians, expand services or obtain favorable managed care contracts at their facilities than we are, we may experience an overall decline in patient volumes, which could have an adverse impact on our net operating revenues. The market for our revenue cycle management services is also competitive.
If our healthcare competitors are better able to attract patients, recruit physicians, expand services or obtain favorable managed care contracts at their facilities than we are, we may experience an overall decline in patient volumes, which could have an adverse impact on our net operating revenues.
We may encounter challenges in executing cost‑reduction initiatives and not achieve the intended cost savings. In addition, we may face wrongful termination, discrimination or other legal claims from employees affected by any workforce reductions, and we may incur substantial costs defending against such claims, regardless of their merits. The threat of such claims may also significantly increase our severance costs.
We may encounter challenges in executing 23 Table of Contents cost‑reduction initiatives and not achieve the intended cost savings. In addition, we may face wrongful termination, discrimination or other legal claims from employees affected by any workforce reductions, and we may incur substantial costs defending against such claims, regardless of their merits.
There are risks associated with our current and potential future use of artificial intelligence. Recent advancements in technology and applications in healthcare, including Generative AI, are enabling our operations to accelerate the adoption of artificial intelligence (“AI”) enabled tools in areas such as clinical care coordination, medical documentation, revenue cycle management and administrative services.
There are risks associated with our current and potential future use of AI. Recent advancements in technology and applications in healthcare have allowed us to accelerate the adoption of AI and Generative AI-enabled tools in areas such as clinical care coordination, medical documentation, revenue cycle management and administrative services.
We cannot predict whether or how the new Congress may extend or modify provisions of or relating to the Affordable Care Act or other laws affecting the healthcare industry generally, nor can we predict how the new administration will influence, promulgate or implement rules, regulations or executive orders that affect the healthcare industry directly or indirectly.
We also cannot predict whether or how Congress may further extend or modify provisions of or relating to the Affordable Care Act, the OBBBA or other laws affecting the healthcare industry generally, nor can we predict how government agencies or the current administration might further influence, promulgate or implement rules, regulations or executive orders that affect the healthcare industry directly or indirectly.
New variants or future surges of COVID-19 or the emergence or outbreak of another infectious disease could adversely impact our patient volumes, service mix, revenue mix, operating expenses and net operating revenues in some markets or broadly across our enterprise, depending on how widespread the illness becomes.
The emergence or outbreak of an infectious disease could adversely impact our patient volumes, service mix, revenue mix, operating expenses and net operating revenues in some markets or broadly across our enterprise, depending on how widespread the illness becomes.
Also, we are increasingly experiencing payment denials from and other administrative challenges with managed care payers, both prospectively and retroactively. We currently have thousands of managed care contracts with various HMOs and PPOs; however, our top 10 managed care payers generated 71% of our managed care net patient service revenues for the year ended December 31, 2024.
Also, in recent years, we have increasingly experienced payment denials from and other administrative challenges with managed care payers, both prospectively and retroactively. We currently have thousands of managed care contracts with various HMOs and PPOs; however, our top 10 managed care payers generated 69% of our managed care net patient service revenues for the year ended December 31, 2025.
Subsidiaries that are not wholly owned may also be subject to restrictions on their ability to distribute cash to us in their financing or other agreements and, as a result, we may not be able to access their cash flows to service their respective debt obligations.
Subsidiaries that are not wholly owned may also be subject to restrictions on their ability to distribute cash to us in their financing or other agreements and, as a result, we may not be able to access their cash flows to service their respective debt obligations. We periodically issue new notes to refinance our outstanding notes prior to their maturity.
Because we operate an expansive, nationwide healthcare delivery network, changes to our information systems often take months or years to implement, are costly and, in some circumstances, are not compatible with other applications and devices in use.
We are subject to operational cybersecurity risks that could materially impact our business. Because we operate an expansive, nationwide healthcare delivery network, changes to our information systems often take months or years to implement, are costly and, in some circumstances, are not compatible with other applications and devices in use.
When used responsibility, we believe AI has the potential to enhance our business processes and support efficient delivery of high-quality care. However, AI may not always operate as intended, and datasets may be insufficient or contain illegal, biased, harmful or offensive information, which could lead to inaccurate diagnoses and treatments.
When used responsibly, we believe AI has the potential to enhance our business processes and support efficient delivery of high-quality care. However, AI may not always operate as intended, and datasets may be insufficient or contain biased or harmful information.
Because we cannot predict what actions the federal government or the states may take under existing or future legislation and/or regulatory changes to address budget gaps, deficits, Medicaid expansion, Medicaid eligibility redeterminations, provider fee programs, state‑directed payment programs or Medicaid Section 1115 waivers, we are unable to assess the effect that any such legislation or regulatory action might have on our business; however, the overall adverse impact on our future financial position, results of operations or cash flows could be material.
Federal government denials or delayed approvals of state waiver applications or extension requests could also materially impact Medicaid funding levels, most significantly in those states that have expanded Medicaid. 17 Table of Contents Because we cannot predict what actions the federal government or the states may take under existing or future legislation and/or regulatory changes to address budget gaps, deficits, Medicaid expansion, Medicaid eligibility redeterminations, provider fee programs, state‑directed payment programs or Medicaid Section 1115 waivers, we are unable to assess the effect that any such legislation or regulatory action might have on our business; however, the overall adverse impact on our future financial position, results of operations or cash flows could be material.
In general, the future course and impacts of COVID-19 or the potential emergence and effects of a future pandemic, epidemic or outbreak of an infectious disease on our operational and financial performance is uncertain and will depend on many factors outside of our control, including, among others: the duration, severity and trajectory of the illness, including the possible spread of potentially more contagious and/or virulent forms of the infection; future economic conditions, as well as the impact of government actions and administrative regulations on the hospital industry and broader economy, including through stimulus efforts; the development, availability and widespread use of effective medical treatments and vaccines; the imposition of public safety measures; the volume of canceled or rescheduled procedures at our facilities; and the volume of affected patients across our care network. 19 Table of Contents Our business could be significantly and negatively impacted by security threats, catastrophic events and other disruptions affecting our information technology and related information systems and confidential business data.
In general, the potential emergence and effects of a future pandemic, epidemic or outbreak of an infectious disease on our operational and financial performance is uncertain and will depend on many factors outside of our control, including, among others: the duration, severity and trajectory of the illness, including the possible spread of potentially more contagious and/or virulent forms of the infection; future economic conditions, as well as the impact of government actions and administrative regulations on the hospital industry and broader economy, including through stimulus efforts; the development, availability and widespread use of effective medical treatments and vaccines; the imposition of public safety measures; the volume of canceled or rescheduled procedures at our facilities; and the volume of affected patients across our care network.
Our indebtedness could limit our ability to obtain additional financing, if needed, to fund future capital expenditures, as well as working capital, acquisitions or other needs. • Our indebtedness may result in the market value of our stock being more volatile, potentially resulting in larger investment gains or losses for our shareholders, than the market value of the common stock of other companies that have a relatively smaller amount of indebtedness. • A significant portion of our outstanding debt is subject to early call price or make‑whole premiums; as a result, it may be costly to pursue debt repayment as a deleveraging strategy depending on when we decide to retire the debt.
Our indebtedness could limit our ability to obtain additional financing, if needed, to fund future capital expenditures, as well as working capital, acquisitions or other needs. • Our indebtedness may result in the market value of our stock being more volatile, potentially resulting in larger investment gains or losses for our shareholders, than the market value of the common stock of other companies that have a relatively smaller amount of indebtedness. • A significant portion of our outstanding debt is subject to early call price or make‑whole premiums; as a result, it may be costly to pursue debt repayment as a deleveraging strategy depending on when we decide to retire the debt. 26 Table of Contents Furthermore, our Credit Agreement, our LC Facility and the indentures governing our outstanding notes contain, and any future debt obligations may contain, covenants that, among other things, restrict our ability to pay dividends, incur additional debt and sell assets.
Moreover, not all standard cybersecurity tools and solutions we use are employed at all locations, as expansion of tool and solution use is based on numerous factors. There is no guarantee that we will employ the right tools and solutions at each location or that the expansion of certain tools and solutions will be successful.
Moreover, not all standard cybersecurity tools and solutions we use are employed at all locations, as our decisions as to where to implement tools and solutions are based on numerous factors. There is no guarantee that we will employ the right tools and solutions at each location or that the tools and solutions that are implemented will be successful.
Additional risks and uncertainties not presently known, or currently deemed immaterial, may also constrain our business and operations. 15 Table of Contents Risks Related to Our Overall Operations If we are unable to enter into, maintain and renew managed care contractual arrangements on competitive terms, if we experience material reductions in the contracted rates we receive from managed care payers or if we have difficulty collecting from managed care payers, our results of operations could be adversely affected.
Risks Related to Our Overall Operations If we are unable to enter into, maintain and renew managed care contractual arrangements on competitive terms, if we experience material reductions in the contracted rates we receive from managed care payers or if we have difficulty collecting from managed care payers, our results of operations could be adversely affected.
Our information technology systems are critical to the day‑to‑day operation of our business. We rely on our information technology to process, transmit and store clinical, financial and operational data that includes PHI, PII, and proprietary and confidential business data.
We rely on our information technology to process, transmit and store clinical, financial and operational data that includes PHI, PII, and proprietary and other confidential business data.
For the reasons stated above, our failure to successfully recruit qualified employees, manage attrition, avoid labor disruptions, control costs and plan for future labor needs could have a material adverse effect on our ability to treat patients and our overall business, financial condition, results of operations or cash flows.
Extended strikes have had, and could in the future have, an adverse effect on our patient volumes, net operating revenues and labor costs at individual hospitals or in local markets. 18 Table of Contents For the reasons stated above, our failure to successfully recruit qualified employees, manage attrition, avoid labor disruptions, control costs and plan for future labor needs could have a material adverse effect on our ability to treat patients and our overall business, financial condition, results of operations or cash flows.
Moreover, Generative AI systems, which require the collection and processing of sensitive patient data, present potential security and privacy risks.
Moreover, Generative AI systems that require the collection and processing of sensitive patient data could present potential security and privacy risks, as well as risks related to output quality.
For the year ended December 31, 2024, approximately 70%, or $9.809 billion, of our net patient service revenues for the hospitals and related outpatient facilities in our Hospital Operations segment was attributable to managed care payers, including Medicare and Medicaid managed care programs.
For the year ended December 31, 2025, approximately 70%, or $9.696 billion, of our net patient service revenues for the hospitals and related outpatient facilities in our Hospital Operations segment was attributable to managed care payers, including Medicare and Medicaid managed care programs. The ongoing trend toward consolidation among non‑government payers tends to increase their bargaining power over contract terms.
USPI and our hospital‑based joint ventures depend in part on the efforts, reputations and success of health system partners and the strength of our relationships with those systems. Our joint ventures could be adversely affected by any damage to those health systems’ reputations or to our relationships with them.
USPI and our hospital‑related joint ventures depend in part on the efforts, reputations and success of health system partners and the strength of our relationships with those systems.
The risk of cyber-attack (including ransomware attack), breach or other disruption to healthcare systems, including ours, remains elevated in the current environment.
As such, the risk of cyber-attack (including ransomware attack), breach or other disruption to healthcare systems, including ours, remains elevated in the current environment, and the frequency and sophistication of efforts to access or disrupt our systems could continue to increase.
If our joint venture partners do not fulfill their obligations, the affected joint venture may not be able to operate according to its business or strategic plans. In that case, our results of operations could be adversely affected, or we may be required to increase our level of financial commitment to the joint venture.
In that case, our results of operations could be adversely affected, or we may be required to increase our level of financial commitment to the joint venture.
Our divestitures also include the assignment of contracts, such as leases, to the buyers; in many cases, we continue to be exposed to liabilities under such arrangements if the buyers do not timely pay the obligations. 24 Table of Contents Furthermore, our divestiture and other corporate development activities may present financial and operational risks, including (1) the diversion of management attention from existing core businesses, (2) adverse effects (including a deterioration in the related asset or business) from the announcement of the planned or potential transaction, and (3) the challenges associated with separating personnel and financial and other systems.
Furthermore, our divestiture and other corporate development activities may present financial and operational risks, including (1) the diversion of management attention from existing core businesses, (2) adverse effects (including a deterioration in the related asset or business) from the announcement of the planned or potential transaction, and (3) the challenges associated with separating personnel and financial and other systems.
Moreover, outsourcing and offshoring expose us to additional risks, such as reduced control over operational quality and timing, foreign political and economic instability, compliance and regulatory challenges, and natural disasters not typically experienced in the United States, such as volcanic activity and tsunamis. 23 Table of Contents Adverse financial trends affecting our actual or anticipated results may require us to record impairment and restructuring charges that may negatively impact our results of operations.
Moreover, outsourcing and offshoring expose us to additional risks, such as reduced control over operational quality and timing, foreign political and economic instability, compliance and regulatory challenges, and natural disasters not typically experienced in the United States, such as volcanic activity and tsunamis.
Generally, we compete for these contracts on the basis of price, market reputation, geographic location, quality and range of services, caliber of the medical staff and convenience. Our contracts with managed care payers require us to comply with a number of terms related to the provision of and billing for services.
Generally, we compete for these contracts on the basis of price, market reputation, geographic location, quality and range of services, caliber of the medical staff and convenience.
Some federal and state changes, initiatives and requirements could, among other things, negatively impact our patient volumes, case mix and revenue mix, increase our operating costs, adversely affect the reimbursement we receive for our services, impact our competitive position or require us to expend resources to modify 16 Table of Contents certain aspects of our operations, any of which could have an adverse effect on our financial condition, results of operations or cash flows.
Future federal and state healthcare funding policy changes, along with other initiatives and requirements, may, among other things, adversely affect our patient volumes, case mix and revenue mix, increase our operating costs, materially reduce the reimbursement we receive for our services, diminish our competitive position or require us to expend resources to modify certain aspects of our operations.
These joint ventures may not be profitable or may not achieve the profitability that justifies the investments made. Furthermore, the nature of a joint venture requires us to consult with and share certain decision‑making powers with unaffiliated third parties, some of which may be not‑for‑profit health systems.
Furthermore, the nature of a joint venture requires us to consult with and share certain decision‑making powers with unaffiliated third parties, some of which may be not‑for‑profit health systems. If our joint venture partners do not fulfill their obligations, the affected joint venture may not be able to operate according to its business or strategic plans.
Our Credit Agreement provides for revolving loans in an aggregate principal amount of up to $1.500 billion (subject to a borrowing base calculation), with a $200 million subfacility for standby letters of credit. Our LC Facility provides for the issuance of standby and documentary letters of credit in an aggregate principal amount of up to $200 million.
We may decide to incur additional secured or unsecured debt in the future to finance our operations and any judgments or settlements or for other business purposes. Our Credit Agreement provides for revolving loans in an aggregate principal amount of up to $1.900 billion (subject to a borrowing base calculation), with a $200 million subfacility for standby letters of credit.
In addition, damage to our business reputation could negatively impact the willingness of health systems to enter into relationships with us or USPI. If we are unable to maintain existing arrangements on favorable terms or enter into relationships with additional health system partners, we may be unable to implement our business strategies for our joint ventures successfully.
If we are unable to maintain existing arrangements on favorable terms or enter into relationships with additional health system partners, we may be unable to implement our business strategies for our joint ventures successfully. Our joint venture arrangements are subject to operational risks that could have a material adverse effect on our business, results of operations and financial condition.
We cannot provide any assurances that we will be successful in divesting assets we wish to sell or that divestitures or other strategic transactions will achieve their business goals or the benefits we expect.
We cannot provide any assurances that we will be successful in divesting assets we wish to sell or that divestitures or other strategic transactions will achieve their business goals or the benefits we expect. 24 Table of Contents We have in the past, and may in the future, fail to obtain applicable regulatory approvals, including state approvals or FTC clearances, with respect to potential divestitures of assets or businesses.
During 2024, our interest expense was $826 million and represented 14% of our $5.956 billion of operating income.
During 2025, our interest expense was $821 million and represented 23% of our $3.508 billion of operating income.
In addition, a breach of any of these covenants could cause an event of default, which, if not cured or waived, could require us to repay the indebtedness immediately.
In addition, a breach of any of these covenants could cause an event of default, which, if not cured or waived, could require us to repay the indebtedness immediately. Under these conditions, we are not certain whether we would have, or be able to obtain, sufficient funds to make accelerated payments. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In such a case, we could experience decreased patient volumes, reduced revenues and an increase in uncompensated care, which would adversely affect our results of operations and cash flows.
As such, we may experience decreased patient volumes, reduced revenues and an increase in uncompensated care, which would adversely affect our results of operations and cash flows. Moreover, once the OBBBA is implemented, the Congressional Budget Office anticipates that millions of individuals could lose health insurance between now and 2034.
Violations of existing regulations or failure to comply with new or changed regulations could harm our business and financial results. Our hospitals, outpatient centers and related healthcare businesses are subject to an extensive and complex framework of government regulation at the federal, state and local levels.
As described in Item 1, Business – Healthcare Regulation and Licensing, in Part I of this report, our hospitals, outpatient centers and related healthcare businesses are subject to an extensive and complex framework of government regulation at the federal, state and local levels.
We also depend on the general labor pool of available workers in the areas where we operate. In some of our communities, employers across various industries have increased their minimum wage, which has created more competition and, in some cases, higher labor costs for this sector of employees.
In some of our communities, employers across various industries have increased their minimum wage, which has created more competition and, in some cases, higher labor costs for this sector of employees. Furthermore, state-mandated minimum wage increases in California became effective for healthcare workers in October 2024, with further annual increases anticipated through 2028.
Over the past several years, various laws and regulations lengthened the enrollment period, expanded income eligibility, and reduced premium caps for subsidies for individuals purchasing Affordable Care Act coverage through state and federal marketplaces.
Over the past several years, various laws and regulations lengthened the enrollment period, expanded income eligibility, and provided EPTCs to eligible individuals purchasing Affordable Care Act coverage through state and federal health insurance marketplaces. Certain of these provisions expired at the end of 2025, resulting in significant increases in health insurance premiums.
We have the ability to incur additional indebtedness in the future, subject to the restrictions contained in our Credit Agreement, our LC Facility and the indentures governing our outstanding notes. We may decide to incur additional secured or unsecured debt in the future to finance our operations and any judgments or settlements or for other business purposes.
Despite current indebtedness levels, we have the ability and may decide to incur substantially more debt or otherwise increase our leverage. This could further intensify the risks described above. We have the ability to incur additional indebtedness in the future, subject to the restrictions contained in our Credit Agreement, our LC Facility and the indentures governing our outstanding notes.
The preventive actions we take to reduce the risk of such incidents and protect our information technology and data may not be sufficient. As cybersecurity threats continue to evolve, we may not be able to anticipate certain attack methods in order to implement effective protective measures.
As cybersecurity threats continue to evolve, we may not be able to anticipate certain attack methods, including those involving the integration of new or emerging technologies, such as artificial intelligence (“AI”) and Generative AI, in order to implement effective protective measures.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 2. PROPERTIES The disclosure required under this Item is included in Item 1, Business, of Part I of this report.
Biggest changeOur CISO joined the company in August 2022 with over 20 years of risk management, national security and cybersecurity experience garnered at both public and private companies, as well as governmental agencies. 29 Table of Contents ITEM 2. PROPERTIES The disclosure required under this Item is included in Item 1, Business, of Part I of this report.
We leverage a multi-layered strategy that is designed to assess, identify, manage and mitigate risks to our systems and data from cybersecurity threats. Proactively, we have implemented numerous threat‑management tools and processes. In addition, we have disaster recovery and business continuity plans that are tested and updated periodically.
We leverage a multi-layered strategy that is designed to identify, assess, manage and mitigate risks to our systems and data from cybersecurity threats. Proactively, we have implemented numerous threat‑management tools and processes. In addition, we have disaster recovery and business continuity plans that are tested and updated periodically.
We also conduct table-top exercises, which serve to simulate cybersecurity incidents to practice response and identify gaps, on a regular basis. Our internal audit team performs random sampling audits of security practices at our facilities, and we routinely perform security risk assessments.
We also conduct 28 Table of Contents table‑top exercises, which serve to simulate cybersecurity incidents to practice response and identify gaps, on a regular basis. Our internal audit team performs random sampling audits of security practices at our facilities, and we routinely perform security risk assessments.
We also require all employees to participate in cybersecurity awareness training annually, and we circulate cybersecurity awareness alerts, safety tips and newsletters to employees across the enterprise regularly. In addition, we routinely run phishing campaigns and perform other tests to increase awareness of cybersecurity threats.
We also require all employees to participate in cybersecurity awareness training annually, and we circulate cybersecurity awareness alerts, safety tips and newsletters to employees across the enterprise regularly. In addition, we routinely run phishing campaigns and perform other tests to increase awareness and reduce the risk of cybersecurity threats.
We strive to stay abreast of cybersecurity threats through integrated threat intelligence feeds, industry and federal threat notices, and participation in healthcare industry intelligence sharing. Our program leverages best practices and is guided by industry frameworks, including the National Institute of Standards and Technology Cyber Security Framework.
We strive to stay abreast of cybersecurity threats through threat intelligence subscriptions and other feeds, industry and federal threat notices, and participation in healthcare industry intelligence sharing. Our program leverages best practices and is guided by industry frameworks, including the National Institute of Standards and Technology Cyber Security Framework.
We manage this risk through an information technology review and approval process that considers the anticipated use and implementation of proposed technologies, and includes cybersecurity team assessments of third-party products and systems proposed to connect to our information systems 28 Table of Contents environment or access our data.
We manage this risk through an information technology review and approval process that considers the anticipated use and implementation of proposed technologies, and includes cybersecurity team assessments of third-party products and systems proposed to connect to our information systems environment or access our data.
In addition to regular updates to the audit committee, we have protocols by which certain cybersecurity incidents are escalated within the company and, where appropriate, reported in a timely manner to the board and the audit committee. Management Oversight —Our CISO, who reports directly to our CIO, oversees and manages our cybersecurity strategy and related programs.
In addition to regular updates to the audit committee, we have protocols by which certain cybersecurity incidents or threats are escalated within the company and reported in a timely manner to the audit committee and the board, as appropriate. Management Oversight —Our CISO, who reports directly to our CIO, oversees and manages our cybersecurity strategy and related programs.
However, we continue to face a heightened risk of cybersecurity threats targeting healthcare providers, including ransomware attacks, which may materially impact our business, financial condition or results of operations. Additional information on cybersecurity‑related risks is included in Item 1A, Risk Factors, of Part I of this report.
However, like other healthcare providers, we continue to be a target of cybersecurity threats, including ransomware, which could materially impact our business, financial condition or results of operations. Additional information on cybersecurity‑related risks is included in Item 1A, Risk Factors, of Part I of this report.
He reports information about such risks to the CIO and other members of senior management, who, in turn, report them to our board and audit committee, as appropriate. Our CISO joined the company in August 2022 with over 20 years of risk management, national security and cybersecurity experience garnered at both public and private companies, as well as governmental agencies.
He reports information about such risks to the CIO and other members of senior management, who, in turn, report them to our board and audit committee, as appropriate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 29 Table of Contents PART II.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 30 Table of Contents PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 30 Table of Contents At December 31, 2019 2020 2021 2022 2023 2024 Tenet Healthcare Corporation $ 100.00 $ 105.00 $ 214.80 $ 128.29 $ 198.71 $ 331.92 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P Health Care $ 100.00 $ 113.45 $ 143.09 $ 140.29 $ 143.18 $ 146.87 Peer Group $ 100.00 $ 109.05 $ 164.16 $ 150.73 $ 174.12 $ 203.85 Repurchases of Common Stock —In July 2024, our board of directors authorized the repurchase of up to $1.500 billion of our common stock through a share repurchase program that has no expiration date.
Biggest changeThe performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 31 Table of Contents At December 31, 2020 2021 2022 2023 2024 2025 Tenet Healthcare Corporation $ 100.00 $ 204.58 $ 122.19 $ 189.26 $ 316.13 $ 497.67 S&P 500 $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 S&P Health Care $ 100.00 $ 126.13 $ 123.67 $ 126.21 $ 129.46 $ 148.36 Peer Group $ 100.00 $ 150.53 $ 138.22 $ 159.67 $ 186.93 $ 285.03 Repurchases of Common Stock —The table below presents share repurchase transactions completed during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) Maximum Dollar Value of Shares That May Yet be Purchased Under the Program (In Thousands) (In Thousands) (In Millions) October 1 through October 31, 2025 469 $ 210.92 469 $ 1,589 November 1 through November 30, 2025 474 $ 208.86 474 $ 1,490 December 1 through December 31, 2025 — $ — — $ 1,490 943 943 (1) In July 2024, our board of directors authorized the repurchase of up to $1.500 billion of our common stock through a share repurchase program that has no expiration date.
(CYH), HCA Healthcare, Inc. (HCA), Tenet Healthcare Corporation (THC) and Universal Health Services, Inc. (UHS)), which we refer to as our “Peer Group” herein. Performance data assumes that $100.00 was invested on December 31, 2019 in our common stock and each of the indices.
(CYH), HCA Healthcare, Inc. (HCA), Tenet Healthcare Corporation (THC) and Universal Health Services, Inc. (UHS)), which we refer to as our “Peer Group” herein. Performance data assumes that $100.00 was invested on December 31, 2020 in our common stock and each of the indices.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock —Our common stock is listed on the New York Stock Exchange under the symbol “THC.” As of February 7, 2025, there were 3,053 holders of record of our common stock. Our transfer agent and registrar is Computershare.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock —Our common stock is listed on the New York Stock Exchange under the symbol “THC.” As of February 6, 2026, there were 2,760 holders of record of our common stock. Our transfer agent and registrar is Computershare.
Repurchases under the program may be made in open‑market or privately negotiated transactions, at management’s discretion subject to market conditions and other factors, and in a manner consistent with applicable securities laws and regulations.
These repurchases were made, and any future repurchases will be made, in open-market or privately negotiated transactions, at management’s discretion subject to market conditions and other factors, and in a manner consistent with applicable securities laws and regulations.
The share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be suspended for periods or discontinued at any time.
In July 2025, the board authorized a $1.500 billion increase to the program. The share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be suspended for periods or discontinued at any time.
We had no share repurchase transactions during the three months ended December 31, 2024 (not including shares tendered to satisfy the exercise price in connection with cashless exercises of employee stock options or shares tendered to satisfy tax withholding obligations in connection with employee or director equity awards).
The table does not include shares tendered to satisfy the exercise price in connection with cashless exercises of employee stock options or shares tendered to satisfy tax withholding obligations in connection with employee or director equity awards. ITEM 6. RESERVED 32 Table of Contents
Removed
The maximum dollar value of shares that may yet be purchased under the program is $1.376 billion. ITEM 6. RESERVED 31 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 69 Item 8. Financial Statements and Supplementary Data 70 Consolidated Financial Statements 74 Notes to Consolidated Financial Statements 79
Biggest changeItem 6. Reserved 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68 Item 8. Financial Statements and Supplementary Data 69 Consolidated Financial Statements 73 Notes to Consolidated Financial Statements 78

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our uninsured and charity patients: Years Ended December 31, 2024 2023 2022 Estimated costs for: Uninsured patients $ 535 $ 499 $ 537 Charity care patients 82 110 83 Total $ 617 $ 609 $ 620 48 Table of Contents RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2024 COMPARED TO THE YEAR ENDED DECEMBER 31, 2023 The following table presents our consolidated net operating revenues, operating expenses and operating income, both in dollar amounts and as percentages of net operating revenues, on a continuing operations basis: Years Ended December 31, Increase (Decrease) 2024 2023 Net operating revenues: Hospital Operations $ 16,131 $ 16,683 $ (552) Ambulatory Care 4,534 3,865 669 Net operating revenues 20,665 20,548 117 Grant income 10 16 (6) Equity in earnings of unconsolidated affiliates 260 228 32 Operating expenses: Salaries, wages and benefits 8,801 9,146 (345) Supplies 3,647 3,590 57 Other operating expenses, net 4,492 4,515 (23) Depreciation and amortization 818 870 (52) Impairment and restructuring charges, and acquisition-related costs 102 137 (35) Litigation and investigation costs 35 47 (12) Net gains on sales, consolidation and deconsolidation of facilities (2,916) (23) (2,893) Operating income $ 5,956 $ 2,510 $ 3,446 Net operating revenues 100.0 % 100.0 % — % Grant income — % 0.1 % (0.1) % Equity in earnings of unconsolidated affiliates 1.3 % 1.1 % 0.2 % Operating expenses: Salaries, wages and benefits 42.6 % 44.5 % (1.9) % Supplies 17.6 % 17.5 % 0.1 % Other operating expenses, net 21.7 % 22.0 % (0.3) % Depreciation and amortization 4.0 % 4.2 % (0.2) % Impairment and restructuring charges, and acquisition-related costs 0.5 % 0.7 % (0.2) % Litigation and investigation costs 0.2 % 0.2 % — % Net gains on sales, consolidation and deconsolidation of facilities (14.1) % (0.1) % (14.0) % Operating income 28.8 % 12.2 % 16.6 % 49 Table of Contents The following table presents our net operating revenues, operating expenses and operating income, both in dollar amounts and as percentages of net operating revenues, by segment on a continuing operations basis: Year Ended December 31, 2024 Year Ended December 31, 2023 Hospital Operations Ambulatory Care Hospital Operations Ambulatory Care Net operating revenues $ 16,131 $ 4,534 $ 16,683 $ 3,865 Grant income 10 — 15 1 Equity in earnings of unconsolidated affiliates 10 250 10 218 Operating expenses: Salaries, wages and benefits 7,664 1,137 8,182 964 Supplies 2,460 1,187 2,545 1,045 Other operating expenses, net 3,842 650 3,984 531 Depreciation and amortization 684 134 750 120 Impairment and restructuring charges, and acquisition-related costs 51 51 78 59 Litigation and investigation costs 30 5 34 13 Net gains on sales, consolidation and deconsolidation of facilities (2,803) (113) — (23) Operating income $ 4,223 $ 1,733 $ 1,135 $ 1,375 Net operating revenues 100.0 % 100.0 % 100.0 % 100.0 % Grant income 0.1 % — % 0.1 % — % Equity in earnings of unconsolidated affiliates 0.1 % 5.5 % 0.1 % 5.6 % Operating expenses: Salaries, wages and benefits 47.5 % 25.1 % 49.0 % 25.0 % Supplies 15.3 % 26.2 % 15.3 % 27.0 % Other operating expenses, net 23.9 % 14.3 % 23.9 % 13.7 % Depreciation and amortization 4.2 % 3.0 % 4.5 % 3.1 % Impairment and restructuring charges, and acquisition-related costs 0.3 % 1.1 % 0.5 % 1.5 % Litigation and investigation costs 0.2 % 0.1 % 0.2 % 0.3 % Net gains on sales, consolidation and deconsolidation of facilities (17.4) % (2.5) % — % (0.6) % Operating income 26.2 % 38.2 % 6.8 % 35.6 % Consolidated net operating revenues increased by $117 million, or 0.6%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Biggest changeThe following table presents our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our uninsured and charity patients: Years Ended December 31, 2025 2024 2023 Estimated costs for: Uninsured patients $ 439 $ 535 $ 499 Charity care patients 134 82 110 Total $ 573 $ 617 $ 609 48 Table of Contents RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2025 COMPARED TO THE YEAR ENDED DECEMBER 31, 2024 The following table presents our consolidated net operating revenues, operating expenses and operating income, both in dollar amounts and as percentages of net operating revenues, on a continuing operations basis: Years Ended December 31, Increase (Decrease) 2025 2024 Net operating revenues: Hospital Operations $ 16,138 $ 16,141 $ (3) Ambulatory Care 5,172 4,534 638 Net operating revenues 21,310 20,675 635 Equity in earnings of unconsolidated affiliates 264 260 4 Operating expenses: Salaries, wages and benefits 8,705 8,801 (96) Supplies 3,780 3,647 133 Other operating expenses, net 4,523 4,492 31 Depreciation and amortization 863 818 45 Impairment and restructuring charges, and acquisition-related costs 130 102 28 Litigation and investigation costs 64 35 29 Net losses (gains) on sales, consolidation and deconsolidation of facilities 1 (2,916) 2,917 Operating income $ 3,508 $ 5,956 $ (2,448) Net operating revenues 100.0 % 100.0 % — % Equity in earnings of unconsolidated affiliates 1.2 % 1.3 % (0.1) % Operating expenses: Salaries, wages and benefits 40.8 % 42.6 % (1.8) % Supplies 17.7 % 17.6 % 0.1 % Other operating expenses, net 21.2 % 21.7 % (0.5) % Depreciation and amortization 4.1 % 4.0 % 0.1 % Impairment and restructuring charges, and acquisition-related costs 0.6 % 0.5 % 0.1 % Litigation and investigation costs 0.3 % 0.2 % 0.1 % Net losses (gains) on sales, consolidation and deconsolidation of facilities — % (14.1) % 14.1 % Operating income 16.5 % 28.8 % (12.3) % 49 Table of Contents The following table presents our net operating revenues, operating expenses and operating income, both in dollar amounts and as percentages of net operating revenues, by segment on a continuing operations basis: Year Ended December 31, 2025 Year Ended December 31, 2024 (1) Hospital Operations Ambulatory Care Hospital Operations Ambulatory Care Net operating revenues $ 16,138 $ 5,172 $ 16,141 $ 4,534 Equity in earnings of unconsolidated affiliates 6 258 10 250 Operating expenses: Salaries, wages and benefits 7,440 1,265 7,664 1,137 Supplies 2,405 1,375 2,460 1,187 Other operating expenses, net 3,759 764 3,842 650 Depreciation and amortization 711 152 684 134 Impairment and restructuring charges, and acquisition-related costs 48 82 51 51 Litigation and investigation costs 63 1 30 5 Net losses (gains) on sales, consolidation and deconsolidation of facilities (12) 13 (2,803) (113) Operating income $ 1,730 $ 1,778 $ 4,223 $ 1,733 Net operating revenues 100.0 % 100.0 % 100.0 % 100.0 % Equity in earnings of unconsolidated affiliates — % 5.0 % 0.1 % 5.5 % Operating expenses: Salaries, wages and benefits 46.1 % 24.5 % 47.5 % 25.1 % Supplies 14.9 % 26.6 % 15.2 % 26.2 % Other operating expenses, net 23.3 % 14.8 % 23.8 % 14.3 % Depreciation and amortization 4.4 % 2.8 % 4.3 % 3.0 % Impairment and restructuring charges, and acquisition-related costs 0.3 % 1.6 % 0.3 % 1.1 % Litigation and investigation costs 0.4 % — % 0.2 % 0.1 % Net losses (gains) on sales, consolidation and deconsolidation of facilities (0.1) % 0.3 % (17.4) % (2.5) % Operating income 10.7 % 34.4 % 26.2 % 38.2 % (1) Grant income is no longer significant enough to be presented separately and is now included in net operating revenues for the respective segment.
As an alternative means of funding provider payments, many of the states where we operate have adopted supplemental payment programs authorized under the Social Security Act. Continuing pressure on state budgets and other factors, including legislative and regulatory changes, could result in future reductions to Medicaid payments, payment delays or changes to Medicaid supplemental payment programs.
As an alternative means of funding provider payments, many of the states where we operate have adopted supplemental payment programs authorized under the Social Security Act. Continuing pressure on state budgets and other factors, including legislative and regulatory changes, could result in future reductions to Medicaid payments, payment delays, or changes and reductions to Medicaid supplemental payment programs.
Recent Regulatory and Legislative Updates Recent regulatory and legislative updates to the Medicare and Medicaid payment systems, as well as other government programs impacting our business, are provided below.
Regulatory and Legislative Updates Recent regulatory and legislative updates to the Medicare and Medicaid payment systems, as well as other government programs impacting our business, are provided below.
These initiatives are focused on standardizing and improving patient access processes, including pre‑registration, registration, verification of eligibility and benefits, liability identification and collections at point‑of‑service, and financial counseling. These initiatives are intended to reduce denials, improve service levels to patients and increase the quality of accounts that end up in accounts receivable.
These initiatives are focused on standardizing and improving pre‑service patient access processes, including pre‑registration, registration, verification of eligibility and benefits, liability identification and collections at point‑of‑service, and financial counseling. These initiatives are intended to reduce denials, improve service levels to patients and increase the quality of accounts that end up in accounts receivable.
For filed cost reports, we adjust the accrual for estimated cost report settlements based on those cost reports and subsequent activity, and we consider the necessity of recording a valuation allowance based on historical settlement results.
For filed cost reports, we adjust the accrual for estimated cost report settlements based on those cost reports and subsequent activity, and we consider the necessity of recording a valuation allowance based on historical settlement results.
The accrual for estimated cost report settlements for periods for which a cost report is yet to be filed is recorded based on estimates of what we expect to report on the filed cost reports, and a corresponding valuation allowance is recorded, if necessary, based on the method previously described.
The accrual for estimated cost report settlements for periods for which a cost report is yet to be filed is recorded based on estimates of what we expect to report on the filed cost reports, and a corresponding valuation allowance is recorded, if necessary, based on the method previously described.
These revenues are also subject to review and possible audit by the payers, which can take several years before they are completely resolved. The payers are billed for patient services on an individual patient basis.
These revenues are also subject to review and possible audit by the payers, which can take several years before they are completely resolved. The payers are billed for patient services on an individual patient basis.
An individual patient’s bill is subject to adjustment on a patient‑by‑patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis.
An individual patient’s bill is subject to adjustment on a patient‑by‑patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis.
At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. We believe it is reasonably likely for there to be an approximately 3% increase or decrease in the estimated contractual allowances related to managed care plans.
At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. We believe it is reasonably likely for there to be an approximately 3% increase or decrease in the estimated contractual allowances related to managed care plans.
Some of the factors that can contribute to changes in the contractual allowance estimates include: (1) changes in reimbursement levels for procedures, supplies and drugs when threshold levels are triggered; (2) changes in reimbursement levels when stop‑loss or outlier limits are reached; (3) changes in the admission status of a patient due to physician orders subsequent to initial diagnosis or testing; (4) final coding of in‑house and discharged‑not‑final‑billed patients that change reimbursement levels; (5) secondary benefits determined after primary insurance payments; and (6) reclassification of patients among insurance plans with different coverage and payment levels.
Some of the factors that can contribute to changes in the contractual allowance estimates include: (1) changes in reimbursement levels for procedures, supplies and drugs when threshold levels are triggered; (2) changes in reimbursement levels when stop‑loss or outlier limits are reached; (3) changes in the admission status of a patient due to physician orders subsequent to initial diagnosis or testing; (4) final coding of in‑house and discharged‑not‑final‑billed patients that change reimbursement levels; (5) secondary benefits determined after primary insurance payments; and (6) reclassification of patients among insurance plans with different coverage and payment levels.
Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms, as well as payment history. We believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised.
Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms, as well as payment history. We believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised.
In addition, we do not have significant exposure to floating interest rates given that all of our current long-term indebtedness has fixed rates of interest except for borrowings, if any, under our Credit Agreement. RECENTLY ISSUED ACCOUNTING STANDARDS See Note 24 to the accompanying Consolidated Financial Statements for a discussion of recently issued and recently adopted accounting standards.
In addition, we do not have significant exposure to floating interest rates given that all of our current long-term indebtedness has fixed rates of interest except for borrowings, if any, under our 2025 Credit Agreement. RECENTLY ISSUED ACCOUNTING STANDARDS See Note 24 to the accompanying Consolidated Financial Statements for a discussion of recently issued and recently adopted accounting standards.
Medicare is a federally funded health insurance program primarily for individuals 65 years of age and older, as well as some younger people with certain disabilities and conditions, and is provided without regard to income or assets. Medicaid is co‑administered by the states and is jointly funded by the federal and state governments.
Medicare is a federally funded health insurance program primarily for individuals 65 years of age and older, as well as some younger people with certain disabilities and conditions, and is provided without regard to income or assets. Medicaid is co‑administered by the states and is jointly funded by the federal government and state governments.
Direct Graduate and Indirect Medical Education Payments —The Medicare program provides additional reimbursement to approved teaching hospitals for the increased expenses incurred by such institutions. This additional reimbursement, which is subject to certain limits, including intern and resident full-time equivalent (“FTE”) limits, is made in the form of Direct Graduate Medical Education (“DGME”) and Indirect Medical Education (“IME”) payments.
Direct Graduate and Indirect Medical Education Payments —The Medicare program provides additional reimbursement to approved teaching hospitals for the increased expenses incurred by such institutions. This additional reimbursement, which is subject to certain limits, including intern and resident full-time equivalent limits, is made in the form of Direct Graduate Medical Education (“DGME”) and Indirect Medical Education (“IME”) payments.
Our sources of earnings from each facility consist of: • management and administrative services revenues from the facilities USPI operates through management services contracts, usually computed as a percentage of each facility’s net revenues; and • our share of each facility’s net income (loss), which is computed by multiplying the facility’s net income (loss) times the percentage of each facility’s equity interests owned by USPI.
Our sources of earnings consist of: • management and administrative services revenues from the facilities USPI operates through management services contracts, usually computed as a percentage of each facility’s net revenues; and • our share of each facility’s net income (loss), which is computed by multiplying the facility’s net income (loss) times the percentage of each facility’s equity interests owned by USPI.
Many factors and assumptions can impact the estimates, including the following risks: • future financial results, which can be impacted by: volumes of insured patients and declines in commercial managed care patients; terms of managed care payer arrangements; healthcare policy changes; our ability to collect amounts due from uninsured and managed care payers; loss of volumes as a result of competition; physician recruitment and retention; and our ability to manage costs, such as labor costs, which can be adversely impacted by labor shortages, inflationary pressure on wages, minimum wage increases and labor union activity; • changes in payments from governmental healthcare programs and in government regulations, such as reductions to Medicare and Medicaid payment rates resulting from government legislation or rule‑making or from budgetary challenges of states where we operate; 67 Table of Contents • how the facilities are operated in the future; • the impact of future technological advancements on our business; • the nature of the ultimate disposition of the assets; and • macro-economic conditions, such as inflation and gross domestic product (GDP) growth.
Many factors and assumptions can impact the estimates, including the following risks: • future financial results, which can be impacted by: volumes of insured patients and declines in commercial managed care patients; terms of managed care payer arrangements; healthcare policy changes; our ability to collect amounts due from uninsured and managed care payers; loss of volumes as a result of competition; physician recruitment and retention; and our ability to manage costs, such as labor costs, which can be adversely impacted by labor shortages, inflationary pressure on wages, minimum wage increases and labor union activity; • changes in payments from governmental healthcare programs and in government regulations, such as reductions to Medicare and Medicaid payment rates resulting from government legislation or rule‑making or from budgetary challenges of states where we operate; • how the facilities are operated in the future; • the impact of future technological advancements on our business; • the nature of the ultimate disposition of the assets; and • macro-economic conditions, such as inflation and gross domestic product (GDP) growth.
Other than with respect to the repayment of long-term debt, we expect to use net cash generated from operating activities or cash on hand to satisfy the below obligations. We also have the ability to use borrowings under our Credit Agreement.
Other than with respect to the repayment of long-term debt, we expect to use net cash generated from operating activities or cash on hand to satisfy the below obligations. We also have the ability to use borrowings under our 2025 Credit Agreement.
As such, our operating cash flow is impacted by levels of cash collections, as well as levels of implicit price concessions, due to shifts in payer mix and other factors. Our Credit Agreement provides additional liquidity to manage fluctuations in operating cash caused by these factors.
As such, our operating cash flow is impacted by levels of cash collections, as well as levels of implicit price concessions, due to shifts in payer mix and other factors. Our 2025 Credit Agreement provides additional liquidity to manage fluctuations in operating cash caused by these factors.
We present certain metrics as a percentage of net operating revenues because a significant portion of our operating expenses are variable, and we present certain metrics on a per adjusted admission and per adjusted patient day basis to show trends other than volume.
We also present certain metrics as a percentage of net operating revenues because a significant portion of our operating expenses are variable, and we present certain metrics on a per adjusted admission and per adjusted patient day basis to show trends other than volume.
These fluctuations can result in material intra-quarter net operating and investing uses of cash that have caused, and in the future may cause, us to use our Credit Agreement as a source of liquidity.
These fluctuations can result in material intra-quarter net operating and investing uses of cash that have caused, and in the future may cause, us to use our 2025 Credit Agreement as a source of liquidity.
We believe that existing cash and cash equivalents on hand, borrowing availability under our Credit Agreement and anticipated future cash provided by our operating activities are adequate to meet our current cash needs.
We believe that existing cash and cash equivalents on hand, borrowing availability under our 2025 Credit Agreement and anticipated future cash provided by our operating activities are adequate to meet our current cash needs.
We do not believe there were any adjustments to estimates of patient bills that were material to our revenues during the years ended December 31, 2024, 2023 or 2022. In addition, on a corporate‑wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans.
We do not believe there were any adjustments to estimates of patient bills that were material to our revenues during the years ended December 31, 2025, 2024 or 2023. In addition, on a corporate‑wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans.
Any impairment would be recognized as a charge to income from operations and a reduction in the carrying value of goodwill. At December 31, 2024, our business included two reportable segments – Hospital Operations and Ambulatory Care. Our reportable segments are reporting units used to perform our goodwill impairment analysis, and goodwill is accordingly assigned to these reporting segments.
Any impairment would be recognized as a charge to income from operations and a reduction in the carrying value of goodwill. At December 31, 2025, our business included two reportable segments – Hospital Operations and Ambulatory Care. Our reportable segments are reporting units used to perform our goodwill impairment analysis, and goodwill is accordingly assigned to these reporting segments.
We performed a separate qualitative analysis for our reporting units and, in each case, determined it was more likely than not that the fair value of each reporting unit exceeded its respective carrying value. We therefore concluded that the segments’ goodwill was not impaired at either December 31, 2024 or 2023.
We performed a separate qualitative analysis for our reporting units and, in each case, determined it was more likely than not that the fair value of each reporting unit exceeded its respective carrying value. We therefore concluded that the segments’ goodwill was not impaired at either December 31, 2025 or 2024.
A general description of the types of payments we receive for services provided to patients enrolled in the Original Medicare Plan is provided below. Recent regulatory and legislative updates to the terms of these payment systems and their estimated effect on our revenues can be found under “Recent Regulatory and Legislative Updates” below.
A general description of the types of payments we receive for services provided to patients enrolled in the Original Medicare Plan is provided below. Recent regulatory and legislative updates to the terms of these payment systems and their estimated effect on our revenues can be found under “Regulatory and Legislative Updates” below.
USPI controls 382 of the facilities our Ambulatory Care segment operates, and we account for these investments as consolidated subsidiaries. Our net earnings from a facility are the same whether it is consolidated or unconsolidated, but the classification of those earnings differs. For consolidated subsidiaries, our financial statements reflect 100% of the revenues and expenses of the subsidiaries.
USPI controls 409 of the facilities our Ambulatory Care segment operates, and we account for these investments as consolidated subsidiaries. Our net earnings from a facility are the same whether it is consolidated or unconsolidated, but the classification of those earnings differs. For consolidated subsidiaries, our financial statements reflect 100% of the revenues and expenses of the subsidiaries.
We do not believe there were any adjustments to estimates of patient bills that were material to our revenues during the year ended December 31, 2024. In addition, on a corporate‑wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans.
We do not believe there were any adjustments to estimates of patient bills that were material to our revenues during the year ended December 31, 2025. In addition, on a corporate‑wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans.
Receivables from patients who are potentially eligible for Medicaid are classified as Medicaid pending, under the EES, net of appropriate implicit price concessions. Based on recent trends, approximately 97% of all accounts in the EES are ultimately approved for benefits under a government program, such as Medicaid.
Receivables from patients who are potentially eligible for Medicaid are classified as Medicaid pending, under the EES, net of appropriate implicit price concessions. Based on recent trends, approximately 98% of all accounts in the EES are ultimately approved for benefits under a government program, such as Medicaid.
We were in compliance with all covenants and conditions in our Credit Agreement at December 31, 2024. Letter of Credit Facility— Our LC Facility provides for the issuance, from time to time, of standby and documentary letters of credit in an aggregate principal amount of up to $200 million.
We were in compliance with all covenants and conditions in our 2025 Credit Agreement at December 31, 2025. Letter of Credit Facility— Our LC Facility provides for the issuance, from time to time, of standby and documentary letters of credit in an aggregate principal amount of up to $200 million.
The main factors that we consider include: • Cumulative profits/losses in recent years, adjusted for certain nonrecurring items; 68 Table of Contents • Income/losses expected in future years; • Unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels; • The availability, or lack thereof, of taxable income in prior carryback periods that would limit realization of tax benefits; and • The carryforward period associated with the deferred tax assets and liabilities.
The main factors that we consider include: • Cumulative profits/losses in recent years, adjusted for certain nonrecurring items; • Income/losses expected in future years; • Unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels; • The availability, or lack thereof, of taxable income in prior carryback periods that would limit realization of tax benefits; and • The carryforward period associated with the deferred tax assets and liabilities.
Driving Growth in Our Hospital Operations Segment —We remain committed to better positioning our hospitals and competing more effectively in the ever‑evolving healthcare environment by focusing on driving performance through operational effectiveness, investing in our physician enterprise, particularly our specialist network, enhancing patient and physician satisfaction, growing our higher‑demand and higher‑acuity clinical service lines (including outpatient lines), expanding patient and physician access, and optimizing our portfolio of assets.
Driving Growth in Our Hospital Operations Segment —We remain committed to better positioning our hospitals and competing more effectively in the ever‑evolving healthcare environment by focusing on driving performance through operational effectiveness, investing in our physician enterprise, particularly our specialist network, enhancing patient and physician satisfaction, growing our higher‑demand clinical service lines, expanding patient and physician access, and optimizing our portfolio of assets.
All disputed issues with respect to these audits have been resolved and all related tax assessments (including interest) have been paid. Our tax returns for years ended after December 31, 2007 and USPI’s tax returns for years ended after December 31, 2020 remain subject to audit by the IRS.
All disputed issues with respect to these audits have been resolved and all related tax assessments (including interest) have been paid. Our tax returns for years ended after December 31, 2007 and USPI’s tax returns for years ended after December 31, 2021 remain subject to audit by the IRS.
These factors include, among others: changes in federal and state statutes, regulations and executive orders that effect the healthcare industry directly or indirectly, particularly those impacting government healthcare funding; changes in general economic conditions, including inflation, whether due to geopolitical conflicts, trade tensions, export control rules, tariffs or other factors; the number of uninsured and underinsured individuals in local communities treated at our hospitals; cybersecurity incidents, including those targeting our vendors, and other unanticipated information technology outages; disease hotspots and seasonal cycles of illness; climate and weather conditions; physician recruitment, satisfaction, retention and attrition; advances in technology and treatments that reduce length of stay or permit procedures to be performed in an outpatient rather than an inpatient setting; local healthcare competitors; utilization pressure by managed care organizations, as well as managed care contract negotiations or terminations; performance data on quality measures and patient satisfaction, as well as pricing for services; any unfavorable publicity about us, or our joint venture partners, that impacts our relationships with physicians and patients; and changing consumer behavior, including with respect to the timing of elective procedures.
These factors include, among others: changes in federal and state statutes, regulations and executive orders that effect the healthcare industry directly or indirectly, particularly those impacting government healthcare funding; changes in general economic conditions, including inflation, whether due to geopolitical dynamics, trade tensions, export control rules, tariffs or other factors; the number of uninsured and underinsured individuals in local communities treated at our facilities; cybersecurity incidents, including those targeting our vendors, and other unanticipated information technology outages; disease hotspots and seasonal cycles of illness; weather‑related conditions and natural disasters; physician recruitment, satisfaction, retention and attrition; advances in technology and treatments that reduce length of stay or permit procedures to be performed in an outpatient rather than inpatient setting; local healthcare competitors; utilization pressure by managed care organizations, as well as managed care contract negotiations or terminations; performance data on quality measures and patient satisfaction, as well as pricing for services; any unfavorable publicity about us, or our joint venture partners, that impacts our relationships with physicians and patients; and changing consumer behavior, including with respect to the timing of elective procedures.
These methods use our specific historical claims data related to paid losses and loss adjustment expenses, historical and current case reserves, reported and closed claim counts, and a variety of hospital census information. 66 Table of Contents These analyses are considered in our determination of our estimate of the professional liability claims, including the incurred but not reported and loss development reserve estimates.
These methods use our specific historical claims data related to paid losses and loss adjustment expenses, historical and current case reserves, reported and closed claim counts, and a variety of hospital census information. These analyses are considered in our determination of our estimate of the professional liability claims, including the incurred but not reported and loss development reserve estimates.
This analysis, which identified the NPC work required to be completed in future years to bring our hospitals in 61 Table of Contents compliance with the building requirements by the 2030 deadline, was submitted to the State for review at the end of 2023. Since that time, we have sold six California hospitals.
This analysis, which identified the NPC work required to be completed in future years to bring our hospitals in compliance with the building requirements by the 2030 deadline, was submitted to the State for review at the end of 2023. Since that time, we have sold six California hospitals.
HMOs typically provide reduced benefits or reimbursement (or none at all) to their members who use non‑contracted healthcare providers for non‑emergency care. PPOs generally offer limited benefits to members who use non‑contracted healthcare providers. PPO members who use contracted healthcare providers receive a preferred benefit, typically in the form of lower co‑pays, co‑insurance or deductibles.
HMOs typically provide reduced benefits or reimbursement (or none at all) to their members who use non‑contracted healthcare providers for non‑emergency care. 46 Table of Contents PPOs generally offer limited benefits to members who use non‑contracted healthcare providers. PPO members who use contracted healthcare providers receive a preferred benefit, typically in the form of lower co‑pays, co‑insurance or deductibles.
While we believe we have adequately provided for our income tax receivables or liabilities and our deferred tax assets or liabilities, adverse determinations by taxing authorities or changes in tax laws and regulations could have a material adverse effect on our consolidated financial position, results of operations or cash flows.
While we believe we have adequately provided for our income tax receivables or liabilities and our deferred tax assets or liabilities, adverse determinations by taxing authorities or changes in tax laws and regulations could have a material adverse effect on our consolidated financial position, results of operations or cash flows. 67 Table of Contents
If these projections are not met, or negative trends occur that impact our future outlook, future impairments of long-lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material. Litigation and Investigation Costs Litigation and investigation costs for the years ended December 31, 2024 and 2023 were $35 million and $47 million, respectively.
If these projections are not met, or negative trends occur that impact our future outlook, future impairments of long-lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material. Litigation and Investigation Costs Litigation and investigation costs for the years ended December 31, 2025 and 2024 were $64 million and $35 million, respectively.
Based on our accounts receivable from uninsured patients and co-pays, co-insurance amounts and deductibles owed to us by patients with insurance at December 31, 2024, a 10% increase or decrease in our self‑pay collection rate, equivalent to a fluctuation of approximately 3 percentage points in the collection rate, which we believe could be a reasonably likely change, would result in a favorable or unfavorable adjustment to patient accounts receivable of approximately $10 million.
Based on our accounts receivable from uninsured patients and co‑pays, co‑insurance amounts and deductibles owed to us by patients with insurance at December 31, 2025, a 10% increase or decrease in our self‑pay collection rate, equivalent to a fluctuation of approximately two percentage points in the collection rate, which we believe could be a reasonably likely change, would result in a favorable or unfavorable adjustment to patient accounts receivable of approximately $14 million.
At December 31, 2024, we were in compliance with all covenants and conditions in the LC Facility, and we had $106 million of standby letters of credit outstanding thereunder. Senior Unsecured Notes and Senior Secured Notes —A detailed discussion of our debt transactions during the year ended December 31, 2024 is provided under the Cash Requirements subsection above.
At December 31, 2025, we were in compliance with all covenants and conditions in the LC Facility, and we had $104 million of standby letters of credit outstanding thereunder. Senior Unsecured Notes and Senior Secured Notes —A detailed discussion of our debt transactions during the year ended December 31, 2025 is provided under the Cash Requirements subsection above.
Self‑pay accounts receivable, which include amounts due from uninsured patients, as well as co‑pays, co‑insurance amounts and deductibles owed to us by patients with insurance, pose significant collectability problems. At December 31, 2024 and 2023, 5% and 4%, respectively, of our Hospital Operations segment’s accounts receivable was self‑pay.
Self‑pay accounts receivable, which include amounts due from uninsured patients, as well as co‑pays, co‑insurance amounts and deductibles owed to us by patients with insurance, pose significant collectability problems. At December 31, 2025 and 2024, 7% and 5%, respectively, of our Hospital Operations segment’s accounts receivable was self‑pay.
The balance in the valuation allowance as of December 31, 2023 was $248 million. Deferred tax assets relating to interest expense limitations under Internal Revenue Code Section 163(j) have a full valuation allowance because the interest expense carryovers are not expected to be utilized in the foreseeable future.
The balance in the valuation allowance as of December 31, 2024 was $158 million. Deferred tax assets relating to interest expense limitations under Internal Revenue Code Section 163(j) have a full valuation allowance because the interest expense carryovers are not expected to be utilized in the foreseeable future.
Payment and Policy Changes to the Medicare Outpatient Prospective Payment and Ambulatory Surgery Center Payment Systems— In November 2024, CMS released the final policy changes and payment rates for the Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System for CY 2025 (“Final OPPS/ASC Rule”).
Payment and Policy Changes to the Medicare Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems —In November 2025, CMS released the final policy changes and payment rates for the Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System for CY 2026 (“Final OPPS/ASC Rule”).
Revenues are recognized as performance obligations are satisfied. 64 Table of Contents We determine performance obligations based on the nature of the services we provide. We recognize revenues for performance obligations satisfied over time based on actual charges incurred in relation to total expected charges.
Revenues are recognized as performance obligations are satisfied. We determine performance obligations based on the nature of the services we provide. We recognize revenues for performance obligations satisfied over time based on actual charges incurred in relation to total expected charges.
As of December 31, 2024, 29 of our hospitals were affiliated with academic institutions and were eligible to receive such payments.
As of December 31, 2025, 29 of our hospitals were affiliated with academic institutions and were eligible to receive such payments.
In determining payment rates for each service, CMS considers the amount of clinician work required to provide a service, expenses related to maintaining a practice and professional liability insurance costs.
In determining payment rates for each service, CMS considers the amount of clinician work required to provide a service, expenses related to maintaining a practice 43 Table of Contents and professional liability insurance costs.
Based on our accounts receivable from uninsured patients and co‑pays, co‑insurance amounts and deductibles owed to us by patients with insurance at December 31, 2024, a 10% decrease or increase in our self‑pay collection rate, equivalent to a fluctuation of approximately 3 percentage points in the collection rate, which we believe could be a reasonably likely change, would result in an unfavorable or favorable adjustment to patient accounts receivable of approximately $10 million.
Based on our accounts receivable from uninsured patients and co-pays, co-insurance amounts and deductibles owed to us by patients with insurance at December 31, 2025, a 10% increase or decrease in our self‑pay collection rate, equivalent to a fluctuation of approximately two percentage points in the collection rate, which we believe could be a reasonably likely change, would result in a favorable or unfavorable adjustment to patient accounts receivable of approximately $14 million.
Factors considered in these analyses included recent and estimated future operating trends derived from macro‑economic conditions, industry conditions and other factors specific to each reporting segment. ACCOUNTING FOR INCOME TAXES We account for income taxes using the asset and liability method.
Factors considered in 66 Table of Contents these analyses included recent and estimated future operating trends derived from macro‑economic conditions, industry conditions and other factors specific to each reporting segment. ACCOUNTING FOR INCOME TAXES We account for income taxes using the asset and liability method.
If the rates paid by governmental payers are reduced, if the scope of services covered by governmental payers is limited, if eligibility or enrollment is further restricted, if there are changes to align payment rates for certain procedures across various care settings, or if we or one or more of our hospitals are excluded from participation in the Medicare or Medicaid program or any other government healthcare program, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.
If the rates paid by governmental payers are materially reduced, if the scope of services covered by governmental payers is significantly limited, if eligibility or enrollment is further restricted, if there are changes to align payment rates for certain procedures across various care settings in a site neutral manner, or if we or one or more of our hospitals are excluded from participation in the Medicare or Medicaid program or any other government healthcare program, there may be a material adverse effect on our business, financial condition, results of operations or cash flows.
As of December 31, 2024, 40 of our hospitals qualified for Medicare DSH payments. 41 Table of Contents The statutes and regulations that govern Medicare DSH payments have been the subject of various administrative appeals and lawsuits, and our hospitals have been participating in such appeals, including challenges to the inclusion of the Medicare Advantage (Part C) days used in the DSH calculation as set forth in the Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2005 Rates.
As of December 31, 2025, 39 of our hospitals qualified for Medicare DSH payments. 42 Table of Contents The statutes and regulations that govern Medicare DSH payments have been the subject of various administrative appeals and lawsuits, and our hospitals have been participating in such appeals, including challenges to the inclusion of the Medicare Advantage (Part C) days used in the DSH calculation as set forth in the Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2005 Rates.
The 2024 error rate for Hospital IPPS payments is approximately 3.90%. CMS has identified the FFS program as a program at risk for significant erroneous payments, and one of the agency’s stated key goals is to pay claims properly the first time.
The 2025 error rate for Hospital IPPS payments is approximately 3.2%. CMS has identified the FFS program as a program at risk for significant erroneous payments, and one of the agency’s stated key goals is to pay claims properly the first time.
Total Medicaid and Medicaid managed care net patient service revenues recognized by the hospitals and related outpatient facilities in our Hospital Operations segment for the years ended December 31, 2024, 2023 and 2022 were $2.845 billion, $2.776 billion and $2.692 billion, respectively.
Total Medicaid and Medicaid managed care net patient service revenues recognized by the hospitals and related outpatient facilities in our Hospital Operations segment for the years ended December 31, 2025, 2024 and 2023 were $2.822 billion, $2.845 billion and $2.776 billion, respectively.
The amount of our managed care net patient service revenues, including Medicare and Medicaid managed care programs, from our hospitals and related outpatient facilities during the years ended December 31, 2024, 2023 and 2022 was $9.809 billion, $10.248 billion and $9.607 billion, respectively.
The amount of our managed care net patient service revenues, including Medicare and Medicaid managed care programs, from our hospitals and related outpatient facilities during the years ended December 31, 2025, 2024 and 2023 was $9.696 billion, $9.809 billion and $10.248 billion, respectively.
At both December 31, 2024 and 2023, 68% of our Hospital Operations segment’s net accounts receivable were due from managed care payers. Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per‑diem rates, discounted FFS rates and/or other similar contractual arrangements.
At December 31, 2025 and 2024, 67% and 68%, respectively, of our Hospital Operations segment’s net accounts receivable were due from managed care payers. Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per‑diem rates, discounted FFS rates and/or other similar contractual arrangements.
DEBT INSTRUMENTS, GUARANTEES AND RELATED COVENANTS Credit Agreement— At December 31, 2024, our Credit Agreement provided for revolving loans in an aggregate principal amount of up to $1.500 billion with a $200 million subfacility for standby letters of credit.
DEBT INSTRUMENTS, GUARANTEES AND RELATED COVENANTS Credit Agreement— At December 31, 2025, our 2025 Credit Agreement provided for revolving loans in an aggregate principal amount of up to $1.900 billion with a $200 million subfacility for standby letters of credit.
Cost reports must generally be filed within five months after the end of the annual cost report reporting period. After the cost report is filed, the accrual and corresponding valuation allowance may need to be adjusted. Medicare Claims Reviews HHS estimates that the overall 2024 Medicare FFS improper payment rate for the program is approximately 7.66%.
Cost reports must generally be filed within five months after the end of the annual cost report reporting period. After the cost report is filed, the accrual and corresponding valuation allowance may need to be adjusted. Medicare Claims Reviews HHS estimates that the overall 2025 Medicare FFS improper payment rate for the program is approximately 6.6%.
Our Hospital Operations segment is comprised of our acute care and specialty hospitals, a network of employed physicians and ancillary outpatient facilities. At December 31, 2024, our subsidiaries operated 49 hospitals serving primarily urban and suburban communities in eight states.
Our Hospital Operations segment is comprised of our acute care and specialty hospitals, a network of employed physicians and ancillary outpatient facilities. At December 31, 2025, our subsidiaries operated 50 hospitals serving primarily urban and suburban communities in eight states.
At December 31, 2024, we had $106 million of standby letters of credit outstanding under the LC Facility. The timing of reimbursement payments is uncertain, as we cannot foresee when, or if, a standby letter of credit will be drawn upon.
At December 31, 2025, we had $104 million of standby letters of credit outstanding under the LC Facility. The timing of reimbursement payments is uncertain, as we cannot foresee when, or if, a standby letter of credit will be drawn upon.
Under our Compact and other uninsured 65 Table of Contents discount programs, the discount offered to certain uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self‑pay accounts are recorded.
Under our Compact and other uninsured discount programs, the discount offered to certain uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self‑pay accounts are recorded.
Although a substantial portion of our patient volumes and, as a result, our revenues has historically been derived from government healthcare programs, reductions to our reimbursement under the Medicare and Medicaid programs as a result of the Affordable Care Act have been partially offset by increased revenues from providing care to previously uninsured individuals.
Although a substantial portion of our patient volumes and, as a result, our revenues have historically been derived 40 Table of Contents from government healthcare programs, reductions to our reimbursement under the Medicare and Medicaid programs due to the Affordable Care Act have been partially offset by increased revenues from providing care to previously uninsured individuals.
We are also continuing to pursue new opportunities to enhance efficiency, including further integration of enterprise‑wide centralized support functions, outsourcing additional functions unrelated to direct patient care, supply chain management, and reducing clinical and vendor contract variation.
We are also continuing to pursue new opportunities to enhance efficiency, including further integration of enterprise‑wide centralized support functions, outsourcing additional functions unrelated to direct patient care, and reducing clinical contract variation.
Our top 10 managed care payers generated 71% of our managed care net patient service revenues for the year ended December 31, 2024. During the same period, national payers generated 48% of our managed care net patient service revenues; the remainder came from regional or local payers.
Our top 10 managed care payers generated 69% of our managed care net patient service revenues for the year ended December 31, 2025. During the same period, national payers generated 48% of our managed care net patient service revenues; the remainder came from regional or local payers.
When used responsibility, we believe AI has the potential to enhance our business processes and support efficient delivery of high‑quality care. Improving Profitability— We continue to focus on growing patient volumes and effective cost management as a means to improve profitability.
When used responsibly, we believe AI has the potential to enhance our business processes and support efficient delivery of high‑quality care. 35 Table of Contents Improving Profitability— We continue to focus on growing patient volumes and effective cost management as a means to improve profitability.
Our total net patient service revenues from operation of the hospitals and related outpatient facilities in our Hospital Operations 40 Table of Contents segment for services provided to patients enrolled in the Original Medicare Plan were $2.132 billion, $2.383 billion and $2.369 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
Our total net patient service revenues from operation of the hospitals and related outpatient facilities in our Hospital Operations 41 Table of Contents segment for services provided to patients enrolled in the Original Medicare Plan were $2.119 billion, $2.132 billion and $2.383 billion for the years ended December 31, 2025, 2024 and 2023, respectively.
MANAGEMENT OVERVIEW OPERATING ENVIRONMENT AND TRENDS Industry Trends and Healthcare Policy Changes —We believe that several key trends are continuing to shape the demand for healthcare services: (1) consumers, employers and insurers are actively seeking lower‑cost solutions and better value with respect to healthcare spending; (2) patient volumes are shifting from inpatient to outpatient settings due to technological advances and demand for care that is more convenient, affordable and accessible; (3) the growing aging population requires greater chronic disease management and higher‑acuity treatment; and (4) consolidation continues across the entire healthcare sector.
OPERATING ENVIRONMENT AND TRENDS Industry Trends and Healthcare Policy Changes —We believe that several key trends are continuing to shape the demand for healthcare services: (1) consumers, employers and insurers are actively seeking lower‑cost solutions and better value with respect to healthcare spending; (2) patient volumes are shifting from inpatient to outpatient settings due to technological advances and demand for care that is more convenient, affordable and accessible; (3) the growing aging population requires greater chronic disease management and higher‑acuity treatment; and (4) consolidation continues across the entire healthcare sector. 34 Table of Contents The healthcare industry remains subject to significant legislative and regulatory uncertainty.
Due to budget neutrality requirements, CMS also implemented a reduction to future non‑drug item and service payments through an adjustment to the OPPS conversion factor by minus 0.5% starting in CY 2026 until the full amount is offset (which CMS estimates will take 16 years).
Due to budget neutrality requirements, CMS also implemented a reduction to future non‑drug item and service payments through an adjustment to the OPPS conversion factor by minus 0.5% starting in CY 2026 until the full amount is offset.
As such, we have enhanced our focus on treating our patients as traditional customers by: (1) establishing networks of physicians and facilities that provide convenient access to services across the care continuum; (2) expanding service lines with growing community demand, including a focus on aging and chronic disease patients; (3) offering greater affordability and predictability, including simplified registration and discharge procedures, particularly in our outpatient centers; (4) improving our culture of service; and (5) creating health and benefit programs, patient education and health literacy materials that are customized to the needs of the communities we serve.
As such, we have enhanced our focus on treating our patients as traditional customers by: (1) establishing networks of physicians and facilities that provide convenient access to services across the care continuum; (2) expanding service lines aligned with growing community demand, including a focus on aging and chronic disease patients; (3) offering greater affordability and predictability, including simplified registration and discharge procedures, particularly in our outpatient centers; (4) improving our culture of service; and (5) offering health programs and educational materials tailored to meet the needs of the communities we serve.
We also typically experience ongoing managed care payment delays and disputes; however, we continue to work with these payers to obtain adequate and timely reimbursement for our services. Our estimated Hospital Operations segment collection rate from managed care payers was approximately 96% and 97% at December 31, 2024 and 2023, respectively.
We also typically experience ongoing managed care payment delays, payer policy changes and disputes; however, we continue to work with these payers to obtain adequate and timely reimbursement for our services. Our estimated Hospital Operations segment collection rate from managed care payers was approximately 95% and 96% at December 31, 2025 and 2024, respectively.
In June 2023, CMS issued a Final Action on the Treatment of Medicare Part C Days in the Calculation of a Hospital’s Medicare Disproportionate Patient Percentage, which finalized CMS’ August 2020 proposed rule to include Medicare Advantage days in the Medicare fraction for all discharges prior to October 1, 2013.
In June 2023, CMS issued a Final Action on the Treatment of Medicare Part C Days in the Calculation of a Hospital’s Medicare Disproportionate Patient Percentage (the “2023 Final Action”), which finalized CMS’ August 2020 proposed rule to include Medicare Advantage days in the Medicare fraction for all discharges prior to October 1, 2013. On September 30, 2025, the U.S.
Changes in federal or state healthcare laws, 33 Table of Contents regulations, funding policies or reimbursement practices, especially those involving reductions to government payment rates or access to insurance coverage, could have a significant impact on our future revenues and expenses.
Changes in federal and state healthcare laws, regulations, funding policies or reimbursement practices – especially those involving reductions to government payment rates or access to insurance coverage – could have a material impact on our future revenues and expenses.
During the year ended December 31, 2023, the valuation allowance increased by $71 million, including an increase of $73 million due to limitations on the tax deductibility of interest expense, and a decrease of $2 million due to changes in the expected realizability of deferred tax assets.
During the year ended December 31, 2025, the valuation allowance increased by $2 million, including an increase of $11 million due to limitations on the tax deductibility of interest expense, and a decrease of $9 million due to changes in the expected realizability of deferred tax assets.
These sources of liquidity, in combination with any potential future debt incurrence, are adequate to finance planned capital expenditures, payments on the current portion of our long-term debt, payments to current and former joint venture partners, including those related to our share purchase agreement with Baylor, and other presently known operating needs.
These sources of liquidity, in combination with any potential future debt incurrence, are adequate to finance planned capital expenditures, payments on the current portion of our long-term debt, payments to current and former joint venture partners, and other presently known operating needs.
Based on reserves at December 31, 2024, a 3% increase or decrease in the estimated contractual allowance would impact the estimated reserves by approximately $29 million.
Based on reserves at December 31, 2025, a 3% increase or decrease in the estimated contractual allowance would impact the estimated reserves by approximately $42 million.
The table below shows the case reserves and incurred but not reported and loss development reserves: December 31, 2024 2023 Case reserves $ 319 $ 270 Incurred but not reported and loss development reserves 819 776 Total reserves $ 1,138 $ 1,046 Several actuarial methods, including the incurred, paid loss development and Bornhuetter‑Ferguson methods, are applied to our historical loss data to produce estimates of ultimate expected losses and the resulting incurred but not reported and loss development reserves.
The table below shows the case reserves and incurred but not reported and loss development reserves: December 31, 2025 2024 Case reserves $ 281 $ 319 Incurred but not reported and loss development reserves 946 819 Total reserves $ 1,227 $ 1,138 Several actuarial methods, including the incurred, paid loss development and Bornhuetter‑Ferguson methods, are applied to our historical loss data to produce estimates of ultimate expected losses and the resulting incurred but not reported and loss development reserves.
For many of the facilities our Ambulatory Care segment holds an ownership interest in (161 of 543 facilities at December 31, 2024), this influence does not represent control of the facility, so we account for our investment in each of these facilities under the equity method for an unconsolidated affiliate.
For many of the facilities in which our Ambulatory Care segment holds an ownership interest (150 of 559 facilities at December 31, 2025), this influence does not represent control of the facility, so we account for our investment in each of these facilities under the equity method for an unconsolidated affiliate.
For the years ended December 31, 2024 and 2023, information presented on a same-hospital basis includes the results of our same 47 hospitals and those outpatient centers we operated throughout 2024 and 2023, and excludes the results of: (1) our Westover Hills Baptist Hospital, the new acute care hospital we opened in Texas in July 2024; (2) three hospitals located in South Carolina and certain related operations (the “SC Hospitals”) we sold in January 2024; (3) four hospitals and certain related operations located in Orange County and Los Angeles County, California (the “OCLA CA Hospitals”) we sold in March 2024; (4) two hospitals and certain related operations located in San Luis Obispo County, California (the “Central CA Hospitals”), which we also sold in March 2024; (5) the five hospitals and certain related operations located in Alabama we divested in September 2024 (the “AL Hospitals”); (6) a rehabilitation hospital in El Paso, Texas, in which we acquired a majority ownership interest in September 2024; (7) 56 UCCs we acquired ownership interests in through the formation of a joint venture with NextCare, Inc. in December 2023; and (8) businesses classified as discontinued operations for accounting purposes during those periods, along with other ancillary facilities acquired or divested during the reporting periods that have a limited financial or operational impact.
For the years ended December 31, 2025 and 2024, information presented on a same-hospital basis includes the results of our same 47 hospitals and those outpatient centers we operated throughout both years, and excludes the results of: (1) three hospitals located in South Carolina and certain related operations (the “SC Hospitals”) we sold in January 2024; (2) four hospitals and certain related operations located in Orange County and Los Angeles County, California (the “OCLA CA Hospitals”) we sold in March 2024; (3) two hospitals and certain related operations located in San Luis Obispo County, California (the “Central CA Hospitals”), which we also sold in March 2024; (4) Westover Hills Baptist Hospital, the acute care hospital we opened in Texas in July 2024; (5) a rehabilitation hospital in El Paso, Texas, in which we acquired a majority ownership interest in September 2024; (6) five hospitals and certain related operations located in Alabama we divested in September 2024 (the “AL Hospitals” and, together with the SC Hospitals, OCLA CA Hospitals and Central CA Hospitals, the “Divested Hospitals”); (7) Florida Coast Medical Center, the acute care hospital we opened in Florida in September 2025; and (8) businesses classified as discontinued operations for accounting purposes during those periods, along with other ancillary facilities acquired or divested during the reporting periods that have a limited financial or operational impact.
During the year ended December 31, 2024, Medicaid and Medicaid managed care revenues comprised 50.6% and 49.4%, respectively, of our Medicaid‑related net patient service revenues recognized by the hospitals and related outpatient facilities in our Hospital Operations segment. All Medicaid and Medicaid managed care patient service revenues are presented net of provider taxes or assessments paid by our hospitals.
During the year ended December 31, 2025, Medicaid and Medicaid managed care revenues comprised 54% and 46%, respectively, of our Medicaid‑related net patient service revenues recognized by the hospitals and related outpatient facilities in our Hospital Operations segment. All Medicaid and Medicaid managed care patient service revenues are presented net of provider taxes or assessments paid by our hospitals.
We consider our critical accounting estimates to be those that (1) involve significant judgments and uncertainties, (2) require estimates that are more difficult for management to determine, and (3) may produce materially different outcomes under different conditions or when using different assumptions.
Actual results may vary from those estimates. 62 Table of Contents We consider our critical accounting estimates to be those that (1) involve significant judgments and uncertainties, (2) require estimates that are more difficult for management to determine, and (3) may produce materially different outcomes under different conditions or when using different assumptions.
SOURCES AND USES OF CASH Our liquidity for the year ended December 31, 2024 was primarily derived from net cash provided by operating activities, cash on hand and proceeds received from the sales of the Divested Hospitals. Our primary source of operating cash is the collection of accounts receivable.
SOURCES AND USES OF CASH Our liquidity for the year ended December 31, 2025 was primarily derived from net cash provided by operating activities and cash on hand. Our primary source of operating cash is the collection of accounts receivable.
A 500‑basis point increase in our severity trend would increase the estimated reserves by $190 million, and a 500‑basis point decrease in our severity trend would decrease the estimated reserves by $144 million.
A 500‑basis point increase in our severity trend would increase the estimated reserves by $256 million, and a 500‑basis point decrease in our severity trend would decrease the estimated reserves by $186 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeMaturity Date, Years Ending December 31, 2025 2026 2027 2028 2029 Thereafter Total Fair Value (Dollars in Millions) Fixed-rate long-term debt $ 92 $ 69 $ 3,096 $ 3,135 $ 1,418 $ 5,457 $ 13,267 $ 12,882 Average effective interest rates 7.8 % 8.4 % 5.8 % 5.9 % 4.3 % 6.0 % 5.8 % We have no affiliation with partnerships, trusts or other entities (sometimes referred to as “special‑purpose” or “variable‑interest” entities) whose purpose is to facilitate off‑balance sheet financial transactions or similar arrangements by us.
Biggest changeMaturity Date, Years Ending December 31, 2026 2027 2028 2029 2030 Thereafter Total Fair Value (Dollars in Millions) Fixed-rate long-term debt $ 79 $ 1,628 $ 2,402 $ 1,438 $ 3,465 $ 4,253 $ 13,265 $ 13,285 Average effective interest rates 7.2 % 5.3 % 5.8 % 4.4 % 5.4 % 6.3 % 5.5 % We have no affiliation with partnerships, trusts or other entities (sometimes referred to as “special‑purpose” or “variable‑interest” entities) whose purpose is to facilitate off‑balance sheet financial transactions or similar arrangements by us.
As a result, we have no exposure to the financing, liquidity, market or credit risks associated with such entities. We do not hold or issue derivative instruments for trading purposes and are not a party to any instruments with leverage or prepayment features. 69 Table of Contents
As a result, we have no exposure to the financing, liquidity, market or credit risks associated with such entities. We do not hold or issue derivative instruments for trading purposes and are not a party to any instruments with leverage or prepayment features. 68 Table of Contents
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following table presents information about certain of our market‑sensitive financial instruments at December 31, 2024. The fair values were determined based on quoted market prices for the same or similar instruments.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following table presents information about certain of our market‑sensitive financial instruments at December 31, 2025. The fair values were determined based on quoted market prices for the same or similar instruments.

Other THC 10-K year-over-year comparisons