Ardent Health, Inc. (ARDT)

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

RESULTS OF OPERATIONS

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

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

Report on Form 10-Q for the quarter ended June 30, 2026 (this "Quarterly Report") and our audited consolidated financial

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

discussion includes forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never

materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-

looking statements. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties

that could impact our business. In particular, we encourage you to review the risks and uncertainties described in the section

titled "Risk Factors" included in the Annual Report.

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

operations. Additionally, unless the context indicates otherwise, Ardent Health, Inc. and its affiliates are referred to in this

section as "we," "our," or "us."

Forward-Looking Statements

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

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

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

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

and other similar matters. Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks,"

"estimates," "could," "would," "will," "may," "can," "continue," "potential," "should" and the negative of these terms or other

comparable terminology often identify forward-looking statements. When reviewing the discussion below, you should keep

in mind the risks and uncertainties that could impact our business. These forward-looking statements are not guarantees of

future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the

results contemplated by the forward-looking statements, including the risk factors and other cautionary statements described

under the heading "Risk Factors" included in the Annual Report. These risks and uncertainties could cause actual results to

differ materially from those projected in forward-looking statements contained in this Quarterly Report or implied by past

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

future.

Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those

contemplated include, among others: (1) general economic and business conditions, both nationally and in the regions in

which we operate, including the impact of challenging macroeconomic conditions and inflationary pressures, current

geopolitical instability, and impacts from the imposition of, or changes in, tariffs, as well as the potential impact on us of

uncertain political, financial, credit and capital conditions; (2) possible reductions or other changes in Medicare, Medicaid

and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs or state directed

payments, that could have an adverse effect on our revenues and business; (3) reduction in the reimbursement rates paid by

commercial payors, increased reimbursement denials or payment delays by commercial payors, our inability to retain and

negotiate favorable contracts with private third party payors, or an increasing volume of uninsured or underinsured patients;

(4) effects of changes in healthcare policy or legislation, including the One Big Beautiful Bill Act (the "OBBBA") and any

other reforms that have or may be undertaken by the current presidential administration, and legal and regulatory restrictions

on our hospitals that have physician owners; (5) the ability to achieve operating and financial targets, develop and execute

mitigation plans to offset to the extent possible impacts from the OBBBA, the expiration of temporary enhanced subsidies for

individuals eligible to purchase insurance coverage through health insurance marketplaces and imposition of tariffs, attain

expected levels of patient volumes and revenues, and control the costs of providing services; (6) security threats, catastrophic

events and other disruptions affecting our, our service providers’ or our joint venture ("JV") partners’ information technology

and related systems, which have adversely affected, and could in the future adversely affect, our relationships with patients

and business partners and subject us to legal claims and liabilities, reputational harm and business disruption and adversely

affect our financial condition; (7) the highly competitive nature of the healthcare industry and continued industry trends

towards clinical transparency and value-based purchasing may impact our competitive position; (8) inability to recruit and

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

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

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

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

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

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

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

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

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

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

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

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

conditions and changes in those states; (17) negative impact of severe weather, climate change, and other factors beyond our

control, which could restrict patient access to care or cause one or more facilities to close temporarily or permanently; (18)

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

(19) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms; (20) our

failure to comply with complex laws and regulations applicable to the healthcare industry or to adjust our operations in

response to changing laws and regulations; (21) the impact of governmental claims or governmental investigations, payor

audits and litigation brought against our hospitals, physician practices, outpatient facilities or other business operations; (22)

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

other requirements; (23) the impact of a deterioration of public health conditions associated with a future pandemic, epidemic

or outbreak of infectious disease; (24) actual or perceived failures to comply with applicable data protection, privacy and

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

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

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

accreditation requirements; (27) the results of our efforts to use technology, including artificial intelligence ("AI") and

machine learning, to drive efficiencies, better outcomes and an enhanced patient experience; (28) our status as a controlled

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

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

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

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

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

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

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

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

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

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

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

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

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

Overview

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

across six states: Texas, Oklahoma, New Mexico, New Jersey, Idaho and Kansas. As of June 30, 2026, we deliver care

through a system of 30 acute care hospitals and more than 280 sites of care with over 2,000 employed and affiliated

providers. Affiliated providers are physicians and advanced practice providers with whom we contract for services through a

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

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

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

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

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

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

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

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

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Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes contained elsewhere in this Annual Report.

Unless otherwise indicated, all relevant financial and statistical information included herein relates to our consolidated operations. Additionally, unless the context indicates otherwise, Ardent Health, Inc. and its affiliates are referred to in this section as “we,” “our,” or “us.”

Forward-Looking Statements

This Annual Report, including the following discussion, may contain certain “forward-looking statements,” as that term is defined in the U.S. federal securities laws. These forward-looking statements include, but are not limited to, statements other than statements of historical facts, including, among others, statements relating to our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which we operate and other similar matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should” and the negative of these terms or other comparable terminology often identify forward-looking statements. When reviewing the discussion below, you should keep in mind the risks and uncertainties that could impact our business. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including the risk factors and other cautionary statements described under the heading “Risk Factors” included in this Annual Report. These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this Annual Report or implied by past results and trends. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated include, among others: (1) general economic and business conditions, both nationally and in the regions in which we operate, including the impact of challenging macroeconomic conditions and inflationary pressures, current geopolitical instability, and impacts from the imposition of, or changes in, tariffs, as well as the potential impact on us of the federal government shutdown or other uncertain political, financial, credit and capital conditions; (2) possible reductions or other changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs or state directed payments, that could have an adverse effect on our revenues and business; (3) reduction in the reimbursement rates paid by commercial payors, increased reimbursement denials or payment delays by commercial payors, our inability to retain and negotiate favorable contracts with private third party payors, or an increasing volume of uninsured or underinsured patients; (4) effects of changes in healthcare policy or legislation, including the One Big Beautiful Bill Act (the "OBBBA") and any other reforms that have or may be undertaken by the current presidential administration, and legal and regulatory restrictions on our hospitals that have physician owners; (5) the ability to achieve operating and financial targets, develop and execute mitigation plans to offset to the extent possible impacts from the OBBBA, the expiration of temporary enhanced subsidies for individuals eligible to purchase insurance coverage through health insurance marketplaces and imposition of tariffs, attain expected levels of patient volumes and revenues, and control the costs of providing services; (6) security threats, catastrophic events and other disruptions affecting our, our service providers’ or our joint venture ("JV") partners’ information technology and related systems, which have adversely affected, and could in the future adversely affect, our relationships with patients and business partners and subject us to legal claims and liabilities, reputational harm and business disruption and adversely affect our financial condition; (7) the highly competitive nature of the healthcare industry and continued industry trends towards clinical transparency and value-based purchasing may impact our competitive position; (8) inability to recruit and retain quality physicians, as well as increasing cost to contract with hospital-based physicians; (9) changes to physician utilization practices and treatment methodologies and other factors outside our control that impact demand for medical services and may reduce our revenues and ability to grow profitability; (10) continued industry trends toward value-based purchasing, third party payor consolidation and care coordination among healthcare providers; (11) inability to successfully complete acquisitions or strategic JVs or inability to realize all of the anticipated benefits; (12) liabilities because of professional liability and other claims brought against our hospitals, physician practices, outpatient facilities or other business operations; (13) exposure to certain risks and uncertainties by the JVs through which we conduct a significant portion of our operations, including anticipated synergies of past acquisitions and the risk that transactions may not receive necessary government clearances; (14) failure to obtain drugs and medical supplies at favorable prices or sufficient volumes; (15) operational, legal and financial risks associated with outsourcing functions to third parties; (16) our facilities are heavily concentrated in Texas and Oklahoma, which makes us sensitive to regulatory, economic and competitive conditions and changes in those states; (17) negative impact of severe weather, climate change, and other factors beyond our control, which could restrict patient access to care or cause one or more facilities to close temporarily or permanently; (18) risks related to the Master Lease with Ventas (“Ventas Master Lease”) and its restrictions and limitations on our business; (19) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms; (20) our failure to comply with complex laws and regulations applicable to the healthcare industry or to adjust our operations in response to changing laws and regulations; (21) the impact of governmental claims or governmental investigations, payor audits and litigation brought against our hospitals, physician practices, outpatient facilities or other business operations; (22) actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements; (23) the impact of a deterioration of public health conditions associated with a future pandemic, epidemic or outbreak of infectious disease; (24) inability to or delay in building, acquiring, selling, renovating or expanding our healthcare facilities; (25) failure to comply with federal and state laws relating to Medicare and Medicaid enrollment, permit, licensing and accreditation requirements; (26) the results of our efforts to use technology, including artificial intelligence (“AI”) and machine learning, to drive efficiencies, better outcomes and an enhanced

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patient experience; (27) our status as a controlled company; (28) conflicts of interest between our controlling stockholder and other holders of our common stock; and (29) other risk factors described in our filings with the SEC.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report. You should not rely upon forward-looking statements as predictions of future events.

The forward-looking statements in this Annual Report are based on management’s current beliefs, expectations, and projections about future events and trends affecting our business, results of operations, financial condition, and prospects. These statements are subject to risks, uncertainties, and other factors described in the “Risk Factors” section and elsewhere in this Annual Report. We operate in a competitive and rapidly changing environment where new risks and uncertainties can emerge, making it impossible to predict all potential impacts on our forward-looking statements. Consequently, actual results may differ materially from those described. The forward-looking statements pertain only to the date they are made, and we do not undertake any obligation to update them to reflect new information or events unless required by law. You are advised not to place undue reliance on these statements and to consult any additional disclosures we may provide through our other filings with the SEC, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Overview

Ardent is a leading provider of healthcare services in the United States, operating in eight growing mid-sized urban markets across six states: Texas, Oklahoma, New Mexico, New Jersey, Idaho and Kansas. We deliver care through a system of 30 acute care hospitals and more than 280 sites of care with over 2,000 employed and affiliated providers as of December 31, 2025, an increase of 9.4% in total providers compared to December 31, 2024. Affiliated providers are physicians and advanced practice providers with whom we contract for services through a professional services agreement or other independent contractor agreement. We hold a leading position in a majority of our markets, and we believe we are one of the leading healthcare systems based on market share and our integrated network of hospitals, ambulatory facilities, and physician practices. We operate either independently or in partnership with premier academic medical centers, large not-for-profit hospital systems, community physicians, and a community foundation through our well-established and differentiated JV model. Collectively, we operate as a unified organization with a consumer-centric approach to caring for our patients and our communities. Our strategic JV partners offer us significant advantages, including expanded access points, clinical talent availability, local brand recognition, and scale that enable us to accelerate market penetration. We believe that we help our partners enhance their network and regional presence through our operational acumen. We strive to strengthen clinical services, drive operating improvements, and centrally manage operations to optimize hospital performance and enhance patient care. In each of these partnerships, we are the majority owner and serve as the day-to-day operator.

Recent Developments

Term Loan B Facility Refinancing and Repricing

On September 18, 2025, we executed an amendment to our term loan credit agreement (the “Term Loan B Credit Agreement”) to refinance the outstanding term loans under our senior secured term loan facility (the “Term Loan B Facility”). The amendment (i) reduced the applicable interest rate by 50 basis points from Term SOFR plus 2.75% to Term SOFR plus 2.25% and from the base rate plus 1.75% to the base rate plus 1.25%, (ii) extended the maturity date to September 18, 2032 and (iii) increased the baskets for certain fixed dollar negative covenants and (iv) reestablished principal payments under the amended Term Loan B Facility, which are due in consecutive equal quarterly installments of 0.25% of the refinanced $777.5 million principal amount beginning on December 31, 2025 (subject to certain reductions from time to time as a result of the application of prepaym

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