21ST CENTURY ONCOLOGY HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

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Note: The registrant is a voluntary filer and is not subject to the filing requirements.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

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

None of the voting or non-voting common equity of the registrant is held by a non-affiliate of the registrant. There is no publicly traded market for any class of common equity of the registrant.

As of August 23, 2016, there were 1,059 shares of the registrant's common stock, $0.01 par value per share, issued and outstanding, all of which are 100% owned by 21^st Century Oncology Investments, LLC.

This Amendment No. 1 on Form 10-K/A ("Form 10-K/A") to our Annual Report on Form 10-K for the year ended December 31, 2014, initially filed with the Securities and Exchange Commission (the "SEC") on March 27, 2015 (the "Original Form 10-K"), is being filed to reflect the restatement of (i) the Company's consolidated balance sheets at December 31, 2014 and 2013 and (ii) the Company's consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years ended December 31, 2014, 2013 and 2012, and the notes related thereto. For a more detailed description of these restatements see Note 2 to the accompanying consolidated financial statements in this Form 10-K/A.

This Form 10-K/A sets forth the Original Form 10-K in its entirety and reflects the restatement described above. No other information in the Original Form 10-K is amended or updated. Pursuant to the rules of the SEC, Item 15 of Part IV of the Original Form 10-K has been amended to contain the currently-dated certifications from our Chief Executive Officer and Chief Financial Officer, as required by Section 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications of our Chief Executive Officer and Chief Financial Officer are attached to this Form 10-K/A as Exhibits 31.1 and 32.1 and 31.2 and 32.2, respectively.

Some of the information set forth in this Annual Report on Form 10-K/A contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. We may make other written and oral communications from time to time that contain such statements. Forward-looking statements, including statements as to industry trends, future expectations and other matters that do not relate strictly to historical facts are based on certain assumptions by management. These statements are often identified by the use of words such as "may," "will," "expect," "plans," "believe," "anticipate," "project," "intend," "could," "estimate," or "continue," "may increase," "may fluctuate," and similar expressions or variations, and are based on the beliefs and assumptions of our management based on information then currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks discussed herein under the heading "Risk Factors." We caution readers to carefully consider such factors. Further, such forward- looking statements speak only as of the date on which such statements are made and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of such statements.

References in this Annual Report on Form 10-K/A to "we", "us", "our" and "the Company" are references to 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.) and its subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates, unless the context requires otherwise or unless indicated otherwise. References in this Annual Report on Form 10-K/A to "Parent" and "21CH" are references to 21^st Century Oncology Holdings, Inc. and not to its subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates. References in this Annual Report on Form 10-K/A to "21C" are references to 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), 21CH's direct subsidiary. References in this Annual Report on Form 10-K/A to "our treatment centers" refer to owned, managed and hospital based treatment centers.

We are the leading global, physician-led provider of integrated cancer care ("ICC") services. Our physicians provide comprehensive, academic quality, cost-effective coordinated care for cancer patients in personal and convenient community settings (our "ICC model"). We believe we offer a powerful value proposition to patients, hospital systems, payers and risk-taking physician groups by delivering high quality care and first rate clinical outcomes at lower overall costs through outpatient settings, clinical excellence, physician coordination and scaled efficiency.

Our operating philosophy is to provide academic center level care to cancer patients in a community setting. To act on this philosophy, we employ or affiliate with leading physicians and provide them with the advanced medical technology necessary to achieve optimal outcomes. In support of our physicians, we develop and invest in medical management software, training programs and business enterprise systems to allow for rapid diffusion of clinical initiatives resulting in continuous quality improvement. In addition, we maintain strong research relationships with academic centers of excellence and research groups, providing us with access to cutting edge treatments and allowing us to make them available to our patients years in advance of their commercial introduction. As a result, we attract and retain talented physician leaders by providing opportunities to work in a stimulating clinical environment designed to deliver high quality patient care.

Our Company was founded in 1983 by a group of physicians that came together to deliver academic level quality radiation therapy at the community level. With significant investment in clinical programs, operating infrastructure and business systems, we expanded our delivery of sophisticated radiation therapy services domestically and then globally. Given the changing healthcare landscape, increased focus on lower cost, higher quality care and the potential for value-based reimbursement, we built a complete and integrated cancer care platform to better meet the needs of patients, physicians and payers. We proactively broadened our provision of care to include a full spectrum of cancer care services by employing and affiliating with physicians in the related specialties of medical oncology,

breast, gynecological and general surgery, urology and primary care. This innovative approach to cancer care through our ICC model enables us to collaborate across our physician base, integrate services and payments for related medical needs and disseminate best practices. We believe this results in better cancer care to patients, a stronger presence in each market we serve and the ability to capitalize on changes and developments in the payment and delivery landscape.

We have demonstrated an ability to grow our business through various environments, and we believe our business is poised for accelerated success given the current industry focus on delivering high quality care in a lower cost setting. The key components of our business model include:

In addition to our demonstrated success in varied environments, we have capitalized on the strength and breadth of our platform to develop new growth opportunities. Examples of such initiatives include our entry into and growth in international markets and our development and monetization of unique value-added services.

We have grown through a combination of organic, internally developed ("de novo"), acquisition and joint venture opportunities and innovative payer and hospital system relationships. We believe these major avenues for growth will become increasingly attractive as our scale, sophistication and

clinical capabilities continue to distinguish us from our competition. We will continue to employ or affiliate with quality physicians, acquire freestanding radiation oncology centers and partner with leading health systems and payers as a result of the superior value proposition we provide each of these constituents:

For the year ended December 31, 2014, we generated total revenues of $1.0 billion. During this time period, 91.0% of our net revenue was derived in North America, and 9.0% in Latin America.

In October 2013, we closed on our acquisition of OnCure Holdings, Inc. (together with its subsidiaries, "OnCure"), which comprises 33 radiation therapy centers and 11 radiation oncology physician groups in Florida, California and Indiana (the "OnCure Acquisition"). In addition, on February 10, 2014, we made an investment in Florida-based SFRO Holdings, LLC (together with its subsidiaries, "SFRO"), acquiring 65% of the equity interests in SFRO, increasing the number of our radiation therapy treatment centers by 21 and adding 88 additional ICC and radiation oncology physicians (the "SFRO Joint Venture").

We were incorporated on October 9, 2007 under the name Radiation Therapy Services Holdings, Inc. and currently exist as a Delaware corporation. On December 5, 2013, we changed our name to 21^st Century Oncology Holdings, Inc (21C). Our business was originally formed in 1983. On February 21, 2008, we consummated the merger of a wholly owned subsidiary of 21CH with and into 21C, with 21C as the surviving corporation and as wholly owned subsidiary of 21CH (the "Merger"). We were acquired in 2008 pursuant to the Merger by affiliates of Vestar Capital Partners ("Vestar"). Our principal executive office is located at 2270 Colonial Boulevard, Fort Myers, Florida 33907 and our telephone number is (239) 931-7275. The address of our main website is www.21co.com.

Cancer treatment is an important, large and growing market globally. We operate in the $290 billion global cancer care market, of which the domestic market comprises approximately $125 billion, as of 2010. Cancer is the second leading cause of death in the United States and globally. According to the most recent data available from the World Health Organization, global cancer

prevalence includes approximately 29 million cases with approximately 13 million new cases and approximately 8 million cancer-related deaths per year. In addition to the scale of the current addressable market, cancer incidence in the United States is estimated to grow at an approximately 2% rate annually through 2030, with an outsized proportion of treatments occurring in outpatient settings which are expected to grow at approximately 31% compared to approximately 3% for inpatient services, from 2013 to 2023. As the population ages, the number of U.S. cancer diagnoses is expected to continue to increase, as approximately 77% of all cancers diagnosed from 2006 to 2010 were in persons 55 years of age and older. Additionally, since 2006, the percentage of cancer cases addressed by radiation has grown from approximately 55% to nearly two-thirds.

We believe we are well-positioned to benefit from other major trends currently affecting the healthcare services markets in which we compete, including:

Rising healthcare costs have continued to strain federal, state and local, as well as employer and patient budgets. In addition, domestic cancer costs are projected to grow from $125 billion in 2010 to $207 billion by 2020, and oncology is typically one of the top two largest cost categories for health plans. Efficient management of cancer care across the patient continuum through utilizing more efficient outpatient settings, which can cost less for commercial payers than other alternatives, and coordination across medical disciplines represents a significant opportunity to contain and reduce overall healthcare costs while improving quality and outcomes. In addition, newly developed health insurance exchanges may ultimately present a significant opportunity for us, as payers look to contract with high quality, low cost providers in local markets. We believe we are well positioned to benefit from this trend as the largest provider of lower cost, convenient and high clinical quality cancer care service in outpatient settings. This will also be of increased importance as patients have an increased responsibility for their healthcare costs.

Recent healthcare legislation, continued cost pressures on payers, and the increase in the number of patients with complex conditions will likely create significant opportunities for cost-effective, sophisticated providers that can offer coordinated, integrated care delivery. Private payers are increasingly moving toward narrow networks and directing patients to the most coordinated and cost-effective providers of care. Additionally, certain health reform initiatives promote the transition from traditional fee-for-service payment models to more "value-based" or "capitated" payment models where overall outcomes and census management are more important success factors than the number of procedures delivered. These trends require improved care coordination and communication throughout an episode of care to enable providers to analyze patient data and identify more effective treatment protocols that ultimately improve outcomes and reduce costs. We have an established history of offering high quality, cost effective integrated services and developing the related infrastructure to ensure coordinated care across specialists. We believe we are well positioned for the changing delivery landscape where payers are searching for partners to help manage medical costs without sacrificing care.

Many hospitals and health systems recognize the strategic, operational and financial challenges stemming from healthcare reform, the burgeoning efforts to contain healthcare costs, and growing consumer preference for treatment in more comfortable community care settings. In response, many health systems are developing strategies to reduce operating costs, align with physicians, create additional service lines, expand their geographic footprint and service locations and prepare for new

value-based payment models. A growing number of health systems are entering into strategic partnerships with select provider organizations, such as ours, in order to achieve these goals.

Consolidation among healthcare providers, including facility operators and clinicians, is expected to continue due to increasing cost pressure and greater complexities as well as requirements imposed by new payment, reporting and delivery systems. Independent physicians are increasingly finding employment in hospitals or affiliating with larger group practices like ours. In addition, recent reimbursement cuts in our industry, coupled with the high cost of technology and the necessity of coordination of care, have contributed to a more rapid pace of consolidation relative to prior years.

The radiation therapy and related physician specialist landscape is highly fragmented. In 2013, there were approximately 2,340 locations providing radiation therapy in the United States, of which approximately 1,100 were freestanding, or non-hospital based, treatment centers. The Company holds approximately 13% of the freestanding market. It is estimated that there are approximately 793,000 physicians in the United States today, of which 36% remain independent as compared to approximately 50% a decade ago. The Latin American radiation therapy market is similarly fragmented with most competition coming from hospitals and smaller local groups. In Argentina, we are the largest radiation therapy provider. In the majority of other Latin American markets that we serve, we are the number one or number two provider.

Beginning from a foundation of high-quality radiation therapy centers, we have subsequently developed a clinically integrated network of multiple medical disciplines in order to provide a comprehensive set of cancer care services for our patients. In many markets, we employ medical oncologists, breast surgeons, colorectal surgeons, urologists, gynecologic oncologists and other medical professionals whose surgical and medical skills complement our legacy radiation oncology services to complete the end-to-end care of the cancer patient. By leveraging our clinical data management systems, best practices clinical pathway models and clinical performance metrics developed and refined over many years on the radiation therapy side of the business, we have been able to achieve effective care coordination among these other disciplines and an overall level of medical practice comparable to that observed at the best academic cancer centers in the US.

What is particularly unique to our model is its ability to provide a high level of comprehensive and coordinated cancer care in the community setting. Many of our competitors in our markets instead consist of single-specialty practices offering more fragmented care. Further differentiating from our competitors is our capacity in each market to provide a complete selection of advanced radiotherapy services that may otherwise be locally unavailable. In addition, we provide support services including psychological and nutritional counseling as well as transportation assistance (consistent with regulatory guidelines).

We have started beta testing adaptive radiotherapy, a sophisticated technology that allows for near real-time adaptation of radiation dose delivery to anatomic changes that occur during a treatment course, and have created an internal development group to focus on refining and commercializing this future critical technology.

Broadly speaking, there are two categories of radiation therapy. External beam therapy involves directing a high-energy x-ray beam generated from a linear accelerator to a patient's tumor. Radiotherapy equipment varies as some devices are better for treating cancers near the surface of the skin and others are better for treating cancers deeper in the body. A course of external beam radiation therapy typically ranges from 10 to 40 treatments and depends on the total radiation dose necessary to achieve a specific therapeutic goal. Internal radiation therapy, also called brachytherapy, involves the

placement of a radiation-emitting element within or adjacent to the patient's tumor. Brachytherapy usually requires an operating room procedure for either permanent insertion of the radiation source in the cancerous organ or insertion of thin plastic catheters in and around the diseased organ to allow for temporary placement of a radiation source after which both the source and the tubes are removed from the body. Internal radiation therapy delivers a higher dose of radiation in a shorter time than is possible with external beam treatments. Internal radiation therapy is typically used for cancers of the prostate, cervix, breast, lung and esophagus.

The following table sets forth the forms of radiation therapy treatments and advanced services that we currently offer:

Technologies		Description

External Beam Therapy
Conformal Radiation Therapy		A process of creating a radiation treatment field that matches precisely the size and shape of the intended target tumor or organ. This customization of the treatment to the diseased tissue allows for better sparing of surrounding healthy, unaffected organs than conventional treatment technologies.
Intensity Modulated Radiation Therapy		A process of adjusting the intensity of the radiation beam in addition to shaping the radiation dose to match the size and shape of the treated tumor, resulting in higher degree of precision than conformal therapy. The net clinical result of this technology is the safe delivery of higher, more effective radiation doses to tumors.
Stereotactic Radiosurgery		A process of delivering highly precise, high-dose radiation to small tumors. Stereotactic radiosurgery utilizes additional treatment technologies to deliver treatment with greater precision and accuracy than either intensity modulated radiation therapy ("IMRT") or conformal therapy. Historically, stereotactic radiosurgery was used for brain tumors, but recent advancements in imaging and radiation delivery technologies have allowed for expanding applications of this technology to the treatment of extra-cranial cancers.
Internal Radiation Therapy
High-Dose Rate Brachytherapy		Enables radiation oncologists to treat cancer by internally delivering high doses of radiation directly to the cancer using temporarily implanted radioactive elements.
Low-Dose Rate Brachytherapy		Enables radiation oncologists to treat cancer by internally delivering doses of radiation directly to the cancer over an extended period of time using permanently implanted radioactive elements (such as prostate seed implants).
Advanced Services Used with External Beam Therapies
Image Guided Radiation Therapy		Enables radiation oncologists to utilize x-ray imaging at the time of treatment to identify the exact position of the tumor within the patient's body and adjust the radiation beam to that position for better accuracy of treatment delivery.

Technologies		Description

Gamma Function		A proprietary capability that enables precise calculation of the actual amount of radiation dose delivered during a treatment. Gamma Function also enables the quantitative comparison between the actual radiation dose delivered and the planned radiation dose. This technology furthermore reports discrepancies in planned-to-actual dose to the physician and provides useful information to assist in the physician's clinical decision-making.
Respiratory Gating		Coordinates treatment beam activation with the respiratory motion of the patient, thereby permitting accurate delivery of radiation dosage to a tumor that moves with breathing, such as lung and liver cancers.
Operating Technologies Under Development
Adaptive Radiotherapy		A novel approach to radiation therapy that is currently under development at the Company and a small number of academic medical centers. Adaptive radiotherapy is a process that will automatically trigger a new treatment plan during the course of therapy in order to adapt to anatomic changes that occur to the tumor. For example, as a tumor shrinks during treatment, adaptive radiotherapy will respond by generating a new treatment plan customized to the smaller tumor and further spare radiation exposure of nearby healthy organs.

Our growth strategy leverages our competitive strengths to provide for long-term enhanced growth.

The U.S. market for cancer treatment is growing due to the increasing incidence of the disease and a stable reimbursement environment. The international market for cancer treatment is growing at a faster rate due to a lower level of treatment penetration relative to the United States, an increasing diagnosis rate, a growing middle class and expanded insurance access. In addition to this market growth, initiatives contributing to our revenue growth include: technology utilization, expansion of our ICC model, physician recruiting and increased patient flow from managed care plans. We continue to invest capital and resources behind these initiatives at our existing centers to drive long-term, sustainable growth.

Acquisitions and joint ventures are important parts of our expansion plans, and we have invested in the tools and infrastructure to capitalize on these opportunities. The landscape of radiation therapy and related physician specialists is highly fragmented. In 2013, there were approximately 2,340 locations providing radiation therapy in the United States, of which approximately 1,100 were freestanding, or non-hospital based, treatment centers. The Company holds approximately 13% of the freestanding market. In a broader trend, it is estimated that there are approximately 793,000 physicians in the United States today, of which 36% remain independent as compared to over 50% a decade ago. The Latin American radiation therapy market is similarly fragmented with most competition coming from hospitals and smaller local groups.

We are focused on expanding our relationships with health systems partners. We believe our investments in the ICC model, new systems and data have uniquely positioned us as a partner of choice to health systems. We believe our current footprint only represents a small portion of this market and, as we gain greater local market scale and penetration of the ICC model, we expect our health system partnership discussions to accelerate. The structure of relationships with heath systems includes: joint ventures, management agreements, professional services agreements and full outsourcing of oncology service lines.

Organic and acquisition growth opportunities for radiation therapy services outside of the United States are driven largely by higher volume growth from strong underlying demographic and healthcare industry trends, an underserved and fragmented market and increased access to and payment for technology in the treatment of cancer. In 2011, we acquired MDLLC, the oldest and largest company in Latin America dedicated to radiation therapy, which has served as a platform for our growth in the region. We continue to pursue de novo centers, acquisitions, joint ventures and hospital partnerships to facilitate expansion in existing and new Latin American markets. In addition to our strategy in Latin America, we will selectively evaluate and pursue expansion in other international markets to further enhance our growth profile and diversify our revenue.

Capitalizing on our network, our long history and the breadth of our products and services, we have developed new value added services that we expect will generate additional sources of revenue outside the reimbursement system. Examples include management of the oncology service line in hospitals, participation in clinical trials and monetization of our historical data.

We have over 30 years of experience operating radiation treatment centers and over time have increasingly affiliated with physicians and other cancer care specialists. We have developed an integrated operating model, which is comprised of the following key elements:

Our treatment centers are designed to deliver high-quality radiation therapy in a patient-friendly environment. A treatment center typically has one or two linear accelerators, with additional rooms for simulators, CT scans, physician offices, film processing and physics functions. In addition, treatment centers include a patient waiting room, dressing rooms, exam rooms and hospitality rooms, all of which are designed to minimize patient discomfort. As of December 31, 2014, in 22 of our treatment centers other cancer care specialists are co-located with our radiation therapy specialists.

Cancer patients referred to one of our radiation oncologists are provided with an initial consultation, which includes an evaluation of the patient's condition to determine if radiation therapy is appropriate. If radiation therapy is selected as a method of treatment, the medical staff engages in clinical treatment planning. Clinical treatment planning utilizes x-rays, CT imaging, ultrasound, PET imaging and, in many cases, advanced computerized 3-D conformal imaging programs, in order to locate the tumor, determine the best treatment modality and the treatment's optimal radiation dosage, and select the appropriate treatment regimen.

We have developed standardized operating procedures for our treatment centers in order to ensure that our professionals are able to operate uniformly and efficiently. Our manuals, policies and procedures are refined and modified as needed to increase productivity and efficiency and to provide for the safety of our employees and patients. We believe that our standard operating procedures facilitate the interaction of physicians, physicists, dosimetrists, radiation therapists and other employees and permit the interchange of employees among our treatment centers. In addition, standardized procedures facilitate the training of new employees. The quality of our operating and related quality assurance procedures has been recognized by the accrediting bodies in our field, namely the American College of Radiology ("ACR") and the American College of Radiation Oncology.

Coding involves the translation of data from a patient's medical chart to our billing system for submission to third-party payers. Our treatment centers provide radiation therapy services under approximately 60 different professional and technical codes, which determine reimbursement. Our Chief Medical Officer, Chief Compliance Officer and certified professional coders work together to establish universal coding and billing rules and procedures. In each treatment center, our certified coders are in charge of executing these rules and procedures. To provide an external check on the integrity of the coding process, we conduct internal audits and periodically retain the services of an external consultant to review and assess our coding procedures and processes. Billing and collection functions are performed centrally. In an effort to improve collections, we have increased efforts to confirm patient eligibility with payers, verify insurance coverage, and facilitate payment plans.

We utilize centralized management information systems to closely monitor each treatment center's operations and financial performance. Our systems track patient data, physician productivity, coding, and billing. The systems allow us to perform budget analyses, historical financial comparisons, and treatment center benchmarking, enabling management to actively evaluate performance. We have also developed a proprietary image and text retrieval system, which facilitates the storage and review of patient medical charts and films. We periodically review our management information systems for possible refinements.

We have established maintenance and physics departments to standardize the acquisition, installation, calibration, use, maintenance and replacement of our linear accelerators, simulators and related equipment. Our engineers, in conjunction with manufacturers' representatives, perform preventive maintenance, repairs and installations. This enables our treatment centers to ensure quality, maximize equipment productivity and minimize downtime. Our physicists monitor and test the accuracy and integrity of each of our linear accelerators on a regular basis to ensure the safety and effectiveness of patient treatment. This testing also helps ensure that the linear accelerators are uniformly and properly calibrated. Independent machine verifications are done annually using the services provided by the M.D. Anderson Radiation Physics Center.

We strive to achieve total quality management throughout our organization. Our treatment centers have a standardized total quality management program consisting of programs that monitor the design of the individual treatment plans, and that ensure the validation of radiation therapy equipment. Each of our new radiation oncologists is assigned to a senior radiation oncologist who reviews each patient's

course of treatment. Furthermore, the data in our patient database is used to evaluate patient outcomes and to modify treatment patterns as necessary to improve patient care. We also utilize patient questionnaires to monitor patient satisfaction. Using the data from these questionnaires, as well as third-party data, we assign each of our physicians and centers a patient satisfaction score, which helps us identify opportunities for improvement and better understand best practices within our treatment centers.

We believe that a well-managed clinical research program enhances the reputation of our physicians and our ability to recruit new cancer specialists. Our treatment centers participate in national cooperative group trials and we have a full-time, in-house research staff. We maintain a proprietary database of information on over 158,000 patients. The data collected includes information on tumor characteristics which can be used to conduct research, measure quality outcomes and improve patient care. In 2014, our radiation oncologists published approximately 830 articles in peer reviewed journals and periodicals.

In an effort to enhance and improve our relationships with managed care and commercial payers, we have added management resources with experience in payer contracting. As a result, we have been able to improve contract terms and increase payment rates in many cases. In addition, we have developed an episode of care or bundled payment agreement with Humana and are working to develop similar arrangements with other payers. We believe these innovative payment approaches will improve alignment and increase our business opportunities with these payers.

In 1989, we founded The Radiation Therapy School for Radiation Therapy Technology, which is accredited by the Joint Review Committee on Education in Radiologic Technology. The school trains individuals to become radiation therapists. Upon graduation, students become eligible to take the national registry examination administered by the American Registry of Radiologic Technologists. Since opening in 1989, the school has produced 159 graduates, 75 of whom are currently employed by us.

Recognizing a growing need for individuals trained in treatment planning, we founded a Training Program for Medical Dosimetry in 2005. As of December 31, 2014, a total of 22 students have completed or are in the process of completing the program in dosimetry.

In addition, we have an affiliated physics program with the University of Pennsylvania to provide internship training sites for their Masters and PhD programs in Medical Physics.

We focus on being compliant with regulations under the Health Insurance Portability and Accountability Act of 1996, as modified by Title XIII, subtitle D of the Health Information Technology for Economic and Clinical Health Act (collectively, "HIPAA"), regarding privacy, security and transmission of health information. We have implemented such regulations into our existing systems, standards and policies to ensure compliance.

We have a compliance program that is consistent with guidelines issued by the Office of Inspector General of the U.S. Department of Health and Human Services (the "OIG"). As part of this compliance program, we adopted a code of ethics and have a full-time compliance officer. Our

program includes an anonymous hotline reporting system, compliance training programs, auditing and monitoring programs and a disciplinary system to enforce our code of ethics and other compliance policies. Auditing and monitoring activities include claims preparation and submission and also cover issues such as coding, billing, regulatory compliance and financial arrangements with physicians. These areas are also the focus of our specialized training programs.

As of December 31, 2014, we owned, operated and managed 180 treatment centers in our 6 domestic divisions and our international markets of which:

Of the 180 total centers, 50 are operated in partnership with health systems and other clinics and community-based sites. In the United States, 40 of these centers are either based on a hospital campus or affiliated with a hospital system, and in Latin America, 10 of these centers are either based on a hospital campus or affiliated with a hospital system.

As of December 31, 2014, we operated 34 internally developed treatment centers located in Alabama, Argentina, Arizona, California, El Salvador, Florida, Massachusetts, Michigan, Nevada, New Jersey, New York and Rhode Island. In 2013, we opened a de novo treatment center in Troy, Michigan and in Argentina. In 2014, we opened a de novo facility in Riverhead, New York. Our newly developed treatment centers typically achieve positive cash flow within six to fifteen months after opening.

As of December 31, 2014, we operated 135 acquired treatment centers located in Alabama, Arizona, California, Florida, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, South Carolina and West Virginia, including 33 acquired treatment centers in South America, Central America, Mexico and the Caribbean. Since January 1, 2012, we have acquired 64 treatment centers. Of the 64 acquired treatment centers, two were acquired in 2012, 37 were acquired in 2013, and 25 were acquired in 2014. As part of our ongoing acquisition strategy, we continually evaluate potential opportunities.

As of December 31, 2014, we operated 11 of our treatment centers pursuant to professional and other service arrangements. A professional corporation owned by certain of our equityholders provides the radiation oncologists for our professional/other treatment centers in Mohawk Valley—New York. In connection with certain of our professional/other treatment center services, we provide technical and administrative services. Professional services in our North Carolina professional/other center are provided by physicians employed by a professional corporation owned by certain of our officers, directors and equityholders. Professional services consist of services provided by radiation oncologists to patients. Technical services consist of the non-professional services provided by us in connection with radiation treatments administered to patients. Administrative services consist of services provided by us to the professional/other center. The contracts under which the professional/other treatment centers are provided service are generally three to seven years with terms for renewal.

Alabama, Arizona, Florida, Kentucky, Maryland, New Jersey, Rhode Island, South Carolina and West Virginia Treatment Centers

In Alabama, Arizona, Florida, Kentucky, Maryland, New Jersey, Rhode Island, South Carolina and West Virginia, we employ or contract with radiation oncologists and other healthcare professionals. Substantially all of our radiation oncologists in these states have employment agreements or other contractual arrangements with us. While we exercise legal control over radiation oncologists we employ, we do not exercise control over, or otherwise influence, their medical judgment or professional decisions. We are responsible for billing patients, hospitals and third-party payers for services rendered by our radiation oncologists.

California, Massachusetts, Michigan, Nevada, New York and North Carolina Treatment Centers

Many states, including California, Massachusetts, Michigan, Nevada, New York and North Carolina prohibit us from employing radiation oncologists. As a result, we operate our treatment centers in such states pursuant to administrative services agreements between professional corporations and our wholly owned subsidiaries. In the states of California, Massachusetts, Michigan, Nevada, New York and North Carolina, our treatment centers are operated as physician office practices. We typically provide technical services to these treatment centers in addition to our administrative services. For the years ended December 31, 2012, 2013 and 2014 approximately 19.4%, 18.6% and 14.9% of our net patient service revenue, respectively, was generated by professional corporations with which we have administrative services agreements. The professional corporations with which we have administrative services agreements in California, Massachusetts, Michigan, Nevada, New York and North Carolina are owned by certain of our directors, physicians and equityholders, who are licensed to practice medicine in the respective state.

Our administrative services agreements generally obligate us to provide certain treatment centers with equipment, staffing, accounting services, billing and collection services, management, technical and administrative personnel and assistance in managed care contracting. Our administrative services agreements provide for the professional corporations to pay us a monthly service fee, which represents the fair market value of our services.

As a result of the OnCure Acquisition, in several markets we rely on physician practices to provide our services. Following our acquisition of OnCure, we assumed the Management Services Agreements ("MSAs") previously in place between OnCure and most of its managed practices. Under the MSAs, OnCure provides the necessary medical and office equipment, clinical and operating staff (other than physicians) and office space and leasehold improvements, as well as general management and billing/collection services, in exchange for a management fee based on a percentage of the practice's revenues or earnings before interest, taxes, depreciation and amortization ("EBITDA").

Our radiation oncologists are primarily referred to patients by: primary care physicians, medical oncologists, surgical oncologists, urologists, pulmonologists, neurosurgeons and other physicians within the medical community. Our radiation oncologists are expected to actively develop their referral base by establishing strong clinical relationships with referring physicians. Our radiation oncologists develop these relationships by describing the variety and advanced nature of the therapies offered at our treatment centers, by providing seminars on advanced treatment procedures and by involving the referring physicians in those advanced treatment procedures. Patient referrals to our radiation oncologists also are influenced by managed care organizations with which we actively pursue contractual agreements.

We have a physician liaison program whereby such personnel inform both potential and existing referring physicians about the variety and advanced nature of the radiation therapy services our affiliated radiation oncologists can offer to their patients. As of December 31, 2014 we have 25 physician liaisons.

As of December 31, 2014, we employed approximately 4,630 employees, including approximately 856 employees in our international markets. As of December 31, 2014, we were affiliated with 175 radiation oncologists in the United States that were employed or under contract with us or our affiliated professional corporations. We do not employ any radiation oncologists in California, Massachusetts, Michigan, Nevada, New York or North Carolina due to the laws and regulations in effect in these states. None of our employees in our domestic markets are a party to a collective bargaining agreement. Approximately 420 employees in our international markets are covered by a collective bargaining agreement with the Health Care Providers Union corresponding to the agreement N° 108/75. The agreement does not have a fixed term, although payment increase is negotiated every year by the labor union. There currently is a nationwide shortage of radiation oncologists and other medical support personnel, which makes recruiting and retaining these employees difficult. We provide competitive wages and benefits and offer our employees a professional work environment that we believe helps us recruit and retain the staff we need to operate and manage our treatment centers. In addition to our radiation oncologists, we currently employ in the United States, 173 urologists, 50 surgeons and surgical oncologists, 43 medical oncologists and eight gynecological and other oncologists, five pathologists, 10 pulmonologists, and three dermatologists.

Our results of operations historically have fluctuated on a quarterly basis and can be expected to continue to fluctuate. Many of the patients of our Florida treatment centers are part-time residents in Florida during the winter months. Hence, these treatment centers have historically experienced higher utilization rates during the winter months than during the remainder of the year. In addition, volume is typically lower in the summer months due to traditional vacation periods. As of December 31, 2014, 62 of our 144 U.S. radiation treatment centers are located in Florida.

We are subject to claims and legal actions in the ordinary course of business. To cover these claims, we maintain professional malpractice liability insurance and general liability insurance in amounts we believe are sufficient for our operations. We maintain professional malpractice liability insurance that provides primary coverage on a claims-made basis per incident and in annual aggregate amounts. Our professional malpractice liability insurance coverage is provided by an insurance company owned by certain of our directors, executive officers and equityholders. The malpractice insurance provided by this insurance company varies in coverage limits for individual physicians. The insurance company is also reinsured for excess claims-made coverage through Lloyd's of London. In addition, we currently maintain multiple layers of umbrella coverage through our commercial general liability insurance policies. We also maintain insurance for Directors and Officers liability insurance; employment practices liability insurance; and fiduciary liability insurance.

The cancer care market is highly fragmented and our business is highly competitive. Competition may result from other radiation oncology practices, solo practitioners, companies in other healthcare industry segments, large physician group practices or radiation oncology physician practice management companies, hospitals and other operators of other radiation treatment centers, some of which may have

greater financial and other resources than us. We believe our radiation treatment centers are distinguishable from those of many of our competitors because we offer patients a full spectrum of advanced radiation therapy options that are not otherwise available in certain geographies or offered by other providers, and which are administered by highly trained personnel and leading radiation oncologists.

We have not registered our service marks or any of our logos with the U.S. Patent and Trademark Office. However, some of our service marks and logos may be subject to other common law intellectual property rights. We do not hold any patents. We own the rights to a copyright that protects the content of our Gamma Function software code.

To date, we have not relied heavily on patents or other intellectual property in operating our business. Nevertheless, some of the information technology purchased or used by us may be patented or subject to other intellectual property rights. As a result, we may be found to be, or actions may be brought against us alleging that we are, infringing on the trademark, patent or other intellectual property rights of others, which could give rise to substantial claims against us. In the future, we may wish to obtain or develop trademarks, patents or other intellectual property. However, other practices and public entities, including universities, may have filed applications for (or have been issued) trademarks, patents or other intellectual property rights that may be the same as or similar to those developed or otherwise obtained by us or that we may need in the development of our own intellectual property. The scope and validity of such trademark, patent and other intellectual property rights, the extent to which we may wish or need to acquire such rights and the cost or availability of such rights are presently unknown. In addition, we cannot provide assurance that others will not obtain access to our intellectual property or independently develop the same or similar intellectual property to that developed or otherwise obtained by us.

The healthcare industry is highly regulated and the federal and state laws that affect our business are extensive and subject to frequent changes. Federal law and regulations are based primarily upon the Medicare and Medicaid programs, each of which is financed, at least in part, with federal money. State jurisdiction is based upon the state's authority to license certain categories of healthcare professionals and providers, the state's interest in regulating the quality of healthcare in the state, regardless of the source of payment, and state healthcare programs. The significant federal and state regulatory laws that could affect our ability to conduct our business include without limitation those regarding:

A violation of these laws could result in significant civil and criminal penalties, the refund of monies paid by government and/or private payers, exclusion of the physician, the practice or us from participation in Medicare and Medicaid programs and/or the loss of a physician's license to practice medicine. We exercise care in our efforts to structure our arrangements and our practices to comply with applicable federal and state laws. We have an Audit and Compliance Committee and a Corporate Compliance Program in place to review our practices and procedures. Although we believe we are in material compliance with all applicable laws, these laws are complex and a review of our practices by a court, or law enforcement or regulatory authority could result in an adverse determination that could harm our business. Furthermore, the laws applicable to us are subject to change, interpretation and amendment, which could adversely affect our ability to conduct our business. No assurance can be given that we will be able to comply with any future laws or regulations.

We estimate that approximately 45%, 45% and 42% of our net patient service revenue for 2012, 2013 and 2014, respectively, consisted of reimbursements from Medicaid and Medicare government programs. In order to be certified to participate in the Medicare and Medicaid programs, each provider must meet applicable conditions of participation and regulations relating to, among other things, operating policies and procedures, maintenance of equipment, personnel, standards of medical care and compliance with applicable federal, state and local laws. Our treatment centers are certified to participate in the Medicare and Medicaid programs.

Unless otherwise specified, the federal healthcare laws described in this section apply in any case in which we are providing an item or service that is reimbursable under government healthcare programs, including Medicare or Medicaid. The principal federal laws that affect our business include those that prohibit the filing of false or improper claims with government healthcare programs, those that prohibit unlawful inducements for the referral or generation of business reimbursable under Medicare or Medicaid and those that prohibit the provision of certain services by an entity that has a financial relationship with the referring physician.

Under the federal False Claims Act, the government may fine us if we knowingly submit, or participate in submitting, any claims for payment that are false or fraudulent, or that contain false or misleading information, or if we knowingly conceal or knowingly and improperly avoid or decrease an obligation to pay or transmit money or property to the government. An "obligation" includes an established duty arising from an express or implied contractual arrangement, from statute or regulation, or from the retention of an overpayment. Knowingly making or using a false record or statement to receive payment from the federal government or to improperly retain payment is also a violation. The False Claims Act does not require proof of specific intent to defraud: a provider can be found liable for submitting false claims with actual knowledge or with reckless disregard or deliberate ignorance of such falseness.

A False Claims lawsuit may be brought by the government or by a private individual by means of a "qui tam" action. A whistleblower shares in the proceeds of the case, typically being awarded between 15 and 25 percent of the proceeds. Such lawsuits have increased significantly in recent years. In addition, the federal government has engaged a number of non governmental-audit organizations to assist it in tracking and recovering false claims for healthcare services.

If we were ever found to have violated the False Claims Act, we would likely be required to make significant payments to the government (including treble damages and per claim penalties in addition to the reimbursements previously collected) and could be excluded from participating in Medicare, Medicaid and other government healthcare programs. Many states have similar false claims statutes.

Healthcare fraud is a priority of the U.S. Department of Justice (the "DOJ"), the OIG and the Federal Bureau of Investigation which continue to devote a significant amount of resources to investigating healthcare fraud. State Medicaid agencies also have similar fraud and abuse authority, and many states have enacted laws similar to the federal False Claims Act.

While the criminal statutes generally are reserved for instances evidencing fraudulent intent, the civil and administrative penalty statutes are applied to an increasingly broad range of circumstances. Examples of activities giving rise to false claims liability include, without limitation, billing for services not rendered, billing for services not rendered in compliance with complex Medicare and Medicaid regulations and guidance, misrepresenting services rendered (i.e., miscoding) and application for duplicate reimbursement. Additionally, the federal government has taken the position that claiming reimbursement for unnecessary or substandard services violates these statutes if the claimant should have known that the services were unnecessary or substandard. An entity may also be subjected to False Claims Act liability for violations of the federal anti-kickback statute or the Stark Law.

Criminal penalties also are available in the case of claims filed with private insurers if the federal government shows that the claims constitute mail fraud or wire fraud or violate a number of federal criminal healthcare fraud statutes. A civil action may also be pursued under state insurance fraud statutes, in the case of claims filed with private insurers.

We believe our billing and documentation practices comply with applicable laws and regulations in all material respects. We submit thousands of reimbursement claims to Medicare and Medicaid each year, however, and therefore can provide no assurance that our submissions are free from errors. Although we monitor our billing practices for compliance with applicable laws, such laws are very complex and the regulations and guidance interpreting such laws are subject to frequent changes and differing interpretations.

HIPAA imposes criminal penalties for fraud against any healthcare benefit program and for obtaining money or property from a healthcare benefit program through false pretenses. HIPAA also provides for broad prosecutorial subpoena authority and authorizes certain property forfeiture upon conviction of a federal healthcare offense. Significantly, the HIPAA provisions apply not only to federal programs, but also to private health benefit programs. HIPAA also broadened the authority of the OIG to exclude participants from federal healthcare programs. If the government were to seek any substantial penalties against us pursuant to these provisions, such an action could have a material adverse effect on us.

HIPAA broadened the scope of certain fraud and abuse laws by adding several civil statutes that apply to all healthcare services, whether or not they are reimbursed under a federal healthcare program. HIPAA established civil monetary penalties for certain conduct, including upcoding and billing for medically unnecessary goods or services.

If we fail to comply with HIPAA, we may be subject to civil monetary penalties up to $50,000 per violation, not to exceed $1.5 million per calendar year for non-compliance of an identical provision, and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. State attorneys general can bring a civil action to enjoin a HIPAA violation or to obtain statutory damages up to $25,000 per violation on behalf of residents of his or her state.

The U.S. Department of Health and Human Services ("DHHS") has discretion in setting the amount of a civil monetary penalty, and may waive it entirely for violations due to reasonable cause and not willful neglect if the payment would be excessive relative to the violation. A civil monetary penalty is waived entirely for failures due to reasonable cause that are corrected during a 30-day grace period. The regulations also provide for an affirmative defense if a covered entity can show that the violation was not due to willful neglect and was corrected within the 30-day grace period or an additional period deemed appropriate by the DHHS. Reasonable cause means an act or omission in which a covered entity or business associate knew, or by reasonable diligence would have known, that the act or omission was a HIPAA violation, but one in which the covered entity or business associate did not act with willful neglect. Willful neglect is defined as conscious, intentional failure or reckless indifference to the obligation to comply. The factors to be considered in determining the amount of the penalty include the nature and circumstances of the violation, the degree of culpability, the history of other violations, and the extent of the resulting harm.

The HIPAA regulations related to privacy establish comprehensive federal standards relating to the use and disclosure of protected health information. The privacy regulations establish limits on the use and disclosure of protected health information, provide for patients' rights, including rights to access, request amendment of, and receive an accounting of certain disclosures of protected health information, and require certain safeguards for protected health information. In general, the privacy regulations do not supersede state laws that are more stringent or grant greater privacy rights to individuals. We believe our operations are in material compliance with the privacy regulations, but there can be no assurance that the federal government would agree.

Effective September 23, 2009, HIPAA requires that individuals be notified without unreasonable delay and within 60 days of their protected health information having been inappropriately accessed, acquired or disclosed. Depending on the number of individuals affected by such a breach, notification may be required to the media and federal government as well. The regulations prescribe the method and form of the required notices. Civil penalties up to $50,000 per violation with a maximum of $1.5 million per year may attach to failures to notify.

The Omnibus HIPAA Rule, published on January 25, 2013 and now effective, imposed significant additional obligations and liability on business associates. Business associates are now directly obligated to adhere to the HIPAA Security Rule and certain provisions of the HIPAA Privacy and Breach Notification Rules, such that violations of these rules can be enforced by the government directly against the business associate.

The HIPAA security regulations establish detailed requirements for safeguarding protected health information that is electronically transmitted or electronically stored. Some of the security regulations are technical in nature, while others may be addressed through policies and procedures. We believe our operations are in material compliance with the security regulations, but there can be no assurance that the federal government would agree.

The HIPAA transaction standards regulations are intended to simplify the electronic claims process and other healthcare transactions by encouraging electronic transmission rather than paper submission. These regulations provide for uniform standards for data reporting, formatting and coding that we must use in certain transactions with health plans. We believe our operations comply with these standards, but there can be no assurance that the federal government would agree.

Although we believe that we are in material compliance with these HIPAA regulations with which compliance is currently required, we cannot guarantee that the federal government would agree. Furthermore, additional changes to the HIPAA regulations are expected to be forthcoming in the next few years, which will require additional efforts to ensure compliance.

Federal law commonly known as the "Anti-kickback Statute" prohibits the knowing and willful offer, solicitation, payment or receipt of anything of value (direct or indirect, overt or covert, in cash or in kind) which is intended to induce:

The Anti-kickback Statute has been broadly interpreted by a number of courts to prohibit remuneration which is offered or paid for otherwise legitimate purposes if the circumstances show that one purpose of the arrangement is to induce referrals. Even bona fide investment interests in a healthcare provider may be questioned under the Anti-kickback Statute if the government concludes that the opportunity to invest was offered as an inducement for referrals. The penalties for violations of this law include civil and criminal sanctions including fines and/or imprisonment and exclusion from federal healthcare programs.

Our compensation and other financial arrangements, including leases, with physicians implicate the Anti-kickback Statute. The federal government has published regulations that provide "safe-harbors" that protect certain arrangements under the Anti-kickback Statute so long as certain requirements are met. We believe that our employment and leasing arrangements comply with applicable safe harbors. Failure to meet the requirements of a safe harbor, however, does not necessarily mean a transaction violates the Anti-kickback Statute. There are several aspects of our relationships with physicians to which the Anti-kickback Statute may be relevant. We claim reimbursement from Medicare or Medicaid for services that are ordered, in some cases, by our radiation oncologists who have ownership interests in the Company. Although neither the existing nor potential investments in us by physicians qualify for protection under the safe harbor regulations, we do not believe that these activities fall within the type of activities the Anti-kickback Statute was intended to prohibit. We also claim reimbursement from Medicare and Medicaid for services referred from other healthcare providers with whom we have financial arrangements, including compensation for employment and professional services. While we believe that these arrangements generally fall within applicable safe harbors or otherwise do not violate the law, there can be no assurance that the government will agree, in which event we could be harmed.

We believe our operations are in material compliance with applicable Medicare and Medicaid and fraud and abuse laws and seek to structure arrangements to comply with applicable safe harbors where reasonably possible. There is a risk however, that the federal government might investigate such arrangements and conclude they violate the Anti-kickback Statute. Violations of the Anti- kickback Statute also subjects an entity to liability under the False Claims Act, including via "qui tam" action. If our arrangements were found to be illegal, we, the physician groups and/or the individual physicians

would be subject to civil and criminal penalties, including exclusion from the participation in government reimbursement programs, and our arrangements would not be legally enforceable, which could materially adversely affect us.

Additionally, the OIG issues advisory opinions that provide advice on whether proposed business arrangements violate the anti-kickback law. In Advisory Opinion 98-4, the OIG addressed physician practice management arrangements. In Advisory Opinion 98-4, the OIG found that administrative services fees based on a percentage of practice revenue may violate the Anti-kickback Statute under certain circumstances, and the OIG reiterated in Advisory Opinion 11-17 a concern with percentage fees based on gross collections. While we believe that the fees we charge for our services under the administrative services agreements are commensurate with the fair market value of the services and our arrangements are in material compliance with applicable law and regulations, we cannot guarantee that the OIG would agree. Any such adverse finding could have a material adverse impact on us.

We are also subject to federal and state statutes banning payments and assigning penalties for referrals by physicians to healthcare providers with whom the physicians (or close family members) have a financial relationship. The Stark Law prohibits a physician from referring a patient to a healthcare provider for certain designated health services reimbursable by Medicare if the physician (or close family members) has a financial relationship with that provider, including an investment interest, a loan or debt relationship or a compensation relationship. The designated health services covered by the law include radiology services, infusion therapy, radiation therapy and supplies, clinical laboratory, diagnostic imaging, outpatient prescription drugs and hospital services, among others. In addition to the conduct directly prohibited by the law, the statute also prohibits "circumvention schemes," that are designed to obtain referrals indirectly that cannot be made directly. The regulatory framework of the Stark Law is to first prohibit all referrals from physicians to entities for Medicare designated health services ("DHS") and then to except certain types of arrangements from that broad general prohibition.

Violation of these laws and regulations may result in prohibition of payment for services rendered, a refund of any Medicare payments for services that resulted from an unlawful referral, $15,000 civil monetary penalties for specified infractions, $100,000 for a circumvention scheme, criminal penalties, exclusion from Medicare and Medicaid programs, and potential false claims liability, including via "qui tam" action, of not less than $5,500 and not more than $11,000, plus three times the amount of damages that the government sustains because of an improperly submitted claim. The repayment provisions in Stark Law are not dependent on the parties having an improper intent; rather, Stark Law is a strict liability statute and any violation is subject to repayment of all "tainted" referrals.

Our compensation and other financial arrangements with physicians implicate the Stark Law. The Stark Law, however, contains exceptions applicable to our operations. We rely on exceptions covering employees, leases, and in-office ancillary services, as well as the "group practice" definition that allows for certain compensation and profit sharing methodologies. Additionally, the definition of "referral" under the Stark Law excludes referrals of radiation oncologists for radiation therapy if (1) the request is part of a consultation initiated by another physician; and (2) the tests or services are furnished by or under the supervision of the radiation oncologist. We believe the services rendered by our radiation oncologists will comply with this exception to the definition of referral.

Some physicians who are not radiation oncologists are employed by or affiliated with us, companies owned by us or professional corporations owned by certain of our directors, executive officers and equityholders with which we have administrative services agreements. To the extent these professional corporations employ such physicians, and they are deemed to have made referrals for radiation therapy, their referrals will be permissible under the Stark Law if they meet the employment

exception, which requires, among other things, that the compensation be consistent with the fair market value of the services provided and that it not take into account (directly or indirectly) the volume or value of any referrals by the referring physician. Another Stark Law exception applicable to our financial relationships with physicians who are not radiation oncologists is the in-office ancillary services exception and accompanying group practice definition which permits profit distributions to physicians within a qualifying group practice structure. The Stark Law imposes detailed requirements in order to qualify for the in-office ancillary services exception, all of which are highly technical and many of which have to date not been subject to extensive judicial review. In the event that the Stark Law were to be amended to modify or otherwise limit the in-office ancillary services exception, this could have a material adverse impact on our business.

On March 21, 2010, the House of Representatives passed the Patient Protection and Affordable Care Act, and the corresponding reconciliation bill. President Obama signed the larger comprehensive bill into law on March 23, 2010 and the reconciliation bill on March 30, 2010 (collectively, the "Health Care Reform Act"). The Health Care Reform Act requires referring physicians under Stark Law to inform patients that they may obtain certain imaging services (e.g., magnetic resonance imaging ("MRI"), computed tomography ("CT") and positron emission tomography ("PET")) or other designated health services as specified by the Secretary of the DHHS from a provider other than that physician, his or her group practice, or another physician in his or her group practice. To date, DHHS has not included radiation oncology as a service subject to this requirement.

We believe that our current operations comply in all material respects with the Stark Law, due to, among other things, various exceptions therein and implementing regulations that exempt either the referral or the financial relationship involved. Nevertheless, to the extent physicians affiliated with us make referrals to us and a financial relationship exists between the referring physicians and us, the government might take the position that the arrangement does not comply with the Stark Law. Any such finding could have a material adverse impact on us.

Many states in which we operate have laws that prohibit the payment of kickbacks in return for the referral of patients. Some of these laws apply only to services reimbursable under the state Medicaid program. However, a number of these laws apply to all healthcare services in the state, regardless of the source of payment for the service. Although we believe that these laws prohibit payments to referral sources only where a principal purpose for the payment is for the referral, the laws in most states regarding kickbacks have been subjected to limited judicial and regulatory interpretation and, therefore, no assurances can be given that our activities will be found to be in compliance. Noncompliance with such laws could have a material adverse effect upon us and subject us and the physicians involved to penalties and sanctions.

A number of states in which we operate, such as Florida, have enacted self- referral laws that are similar in purpose to the Stark Law. However, each state law is unique. The state laws and regulations vary significantly from state to state and, in many cases, have not been widely interpreted by courts or regulatory agencies. State statutes and regulations affecting the referral of patients to healthcare providers range from statutes and regulations that are substantially the same as the federal laws and safe harbor regulations to a simple requirement that physicians or other healthcare professionals disclose to patients any financial relationship the physicians or healthcare professionals have with a healthcare provider that is being recommended to the patients. Some states only prohibit referrals where the physician's financial relationship with a healthcare provider is based upon an investment

interest. Other state laws apply only to a limited number of designated health services. For example, in Maryland (where we operate 6 facilities), state law prohibits physicians other than radiologists or radiation oncologists from being part of a group practice or otherwise benefitting from MRI, CT or radiation oncology services.

These statutes and regulations generally apply to services reimbursed by both governmental and private payers. Violations of these laws may result in prohibition of payment for services rendered, refund of any monies received pursuant to a prohibited referral, loss of licenses as well as fines and criminal penalties.

We believe that we are in compliance with the self-referral law of each state in which we have a financial relationship with a physician. However, we cannot guarantee that the government would agree, and adverse judicial or administrative interpretations of any of these laws could have a material adverse effect on our operating results and financial condition. In addition, expansion of our operations into new jurisdictions, or new interpretations of laws in existing jurisdictions, could require structural and organizational modifications of our relationships with physicians to comply with that jurisdiction's laws. Such structural and organizational modifications could have a material adverse effect on our operating results and financial condition.

Many states in which we operate prohibit the splitting or sharing of fees between physicians and referral sources and/or between physicians and non-physicians. These laws vary from state to state and are enforced by courts and regulatory agencies, each with broad discretion. Some states have interpreted management agreements between entities and physicians as unlawful fee-splitting. In most cases, it is not considered to be fee-splitting when the payment made by the physician is reasonable, fair market value reimbursement for services rendered on the physician's behalf.

In certain states, we receive fees from professional corporations owned by certain of our directors, executive officers and equityholders under administrative services agreements. We believe we structure these fee provisions to comply with applicable state laws relating to fee-splitting. However, there can be no certainty that, if challenged, either we or the professional corporations will be found to be in compliance with each state's fee- splitting laws, and, a successful challenge could have a material adverse effect upon us.

In certain states we operate integrated cancer care practices and share ancillary profits within the practice. We believe we have structured these financial arrangements to comply with state fee-splitting laws. However, there can be no certainty that, if challenged, we will be found to be in compliance with each state's fee-splitting provisions and a successful challenge could have a material adverse effect on us.

We believe our arrangements with physicians comply in all material respects with the fee-splitting laws of the states in which we operate. Nevertheless, it is possible regulatory authorities or other parties could claim we are engaged in fee-splitting. If such a claim were successfully asserted in any jurisdiction, our radiation oncologists and other physicians could be subject to civil and criminal penalties, professional discipline and we could be required to restructure or terminate our contractual and other arrangements. Any restructuring of our contractual and other arrangements with physician practices could result in lower revenue from such practices, increased expenses in the operation of such practices and reduced input into the business decisions of such practices. Termination of such contracts would result in loss of revenue. In addition, expansion of our operations to other states with fee-splitting prohibitions may require structural and organizational modification to the form of relationships that we currently have with physicians, affiliated practices and hospitals. Any modifications could result in less profitable relationships with physicians, affiliated practices and hospitals, less

influence over the business decisions of physicians and affiliated practices and failure to achieve our growth objectives.

We are not licensed to practice medicine. The practice of medicine is conducted solely by our licensed radiation oncologists and other licensed physicians. The manner in which licensed physicians can be organized to perform and bill for medical services is governed by the laws of the state in which medical services are provided and by the medical boards or other entities authorized by such states to oversee the practice of medicine. Most states prohibit any person or entity other than a licensed professional from holding him, her or itself out as a provider of diagnoses, treatment or care of patients. Many states extend this prohibition to bar companies not wholly owned by licensed physicians from employing physicians, a practice commonly referred to as the "Corporate Practice of Medicine," in order to maintain physician independence and clinical judgment.

Business corporations are generally not permitted under certain state laws to exercise control over the medical judgments or decisions of physicians, or engage in certain practices such as fee-splitting with physicians. Particularly in states where we are not permitted to own a medical practice, we perform only non-medical and administrative and support services, do not represent to the public or clients that we offer professional medical services and do not exercise influence or control over the practice of medicine.

Corporate Practice of Medicine laws vary widely by state regarding the extent to which a licensed physician can affiliate with corporate entities for the delivery of medical services. In Florida, it is not uncommon for business corporations to own medical practices. New York, by contrast, prohibits physicians from sharing revenue received in connection with the furnishing of medical care, other than with a partner, employee or associate in a professional corporation, subcontractor or physician consultant relationship. We have developed arrangements which we believe are in compliance with the Corporate Practice of Medicine laws in the states in which we operate.

We believe our operations and contractual arrangements as currently conducted are in material compliance with existing applicable laws. However, we cannot assure you that we will be successful if our existing organization and our contractual arrangements with the professional corporations are challenged as constituting the unlicensed practice of medicine. In addition, we might not be able to enforce certain of our arrangements, including non-competition agreements and transition and stock pledge agreements. While the precise penalties for violation of state laws relating to the corporate practice of medicine vary from state to state, violations could lead to fines, injunctive relief dissolving a corporate offender or criminal felony charges. There can be no assurance that review of our business and the professional corporations by courts or regulatory authorities will not result in a determination that could adversely affect their operations or that the healthcare regulatory environment will not change so as to restrict existing operations or their expansion. In the event of action by any regulatory authority limiting or prohibiting us or any affiliate from carrying on our business or from expanding our operations and our affiliates to certain jurisdictions, we may be required to implement structural and organizational modifications, which could adversely affect our ability to conduct our business.

In connection with the Corporate Practice of Medicine laws referred to above, certain of the physician practices with which we are affiliated are necessarily organized as separate legal entities. As such, the physician practice entities may be deemed to be persons separate both from us and from each other under the antitrust laws and, accordingly, subject to a wide range of laws that prohibit anticompetitive conduct among separate legal entities. These laws may limit our ability to enter into agreements with separate practices that compete with one another. In addition, where we also are

seeking to acquire or affiliate with established and reputable practices in our target geographic markets, any market concentration could lead to antitrust claims.

We believe we are in material compliance with federal and state antitrust laws and intend to comply with any state and federal laws that may affect the development of our business. There can be no assurance, however, that a review of our business by courts or regulatory authorities would not adversely affect our operations and the operations of our affiliated physician practice entities.

As a provider of radiation therapy services in the states in which we operate, we must maintain current occupational and use licenses for our treatment centers as healthcare facilities and machine registrations for our linear accelerators and simulators. Additionally, we must maintain radioactive material licenses for each of our treatment centers which utilize radioactive sources. We believe that we possess or have applied for all requisite state and local licenses and are in material compliance with all state and local licensing requirements.

Many states have enacted certificate of need laws, including, but not limited to, Kentucky, Massachusetts, Michigan, North Carolina, Rhode Island, South Carolina and West Virginia, which require prior approval for a number of actions, including for the purchase, construction, acquisition, renovation or expansion of healthcare facilities and treatment centers, to make certain capital expenditures or to make changes in services or bed capacity. In deciding whether to approve certain requests, these states consider the need for additional or expanded healthcare facilities or services. The certificate of need program is intended to prevent unnecessary duplication of services and can be a competitive process whereby only one proposal among competing applicants who wish to provide a particular health service is chosen or a proposal by one applicant is challenged by another provider who may prevail in getting the state to deny the addition of the service.

Certain states are reconsidering their participation in certificate of need programs, and these decisions could significantly impact the approval process for future projects. For example, on June 25, 2013, the governor of South Carolina vetoed the appropriation of funds for the state's certificate of need program. This veto was upheld by the South Carolina House of Representatives the next day. As a result of the veto, the South Carolina Department of Health and Environmental Control ("SCDEHC") suspended the operation of the certificate of need program for the fiscal year beginning July 1, 2013. The SCDEHC is not reviewing any new or existing applications while the certificate of need program is suspended. A petition is currently pending in front of the South Carolina Supreme Court seeking a declaratory ruling on the ability of providers to engage in activities covered by the state's certificate of need law without approval by the SCDEHC. The outcome of this ruling and other potential future efforts in other states could materially affect our ability to develop new projects in various states and/or alter the competitive landscape.

In certain states these certificate of need statutes and regulations apply to our related physician corporations and in others it applies to hospitals where we have management agreements or joint venture relationships.

We believe that we have applied for all requisite state certificate of need approvals or notified state authorities as required by statute and are in material compliance with state requirements. There can be no assurance, however, that a review of our business or proposed new practices by regulatory authorities would not limit our growth or otherwise adversely affect the operations of us and our affiliated physician practice entities.

We are subject to various federal, state and local laws and regulations governing the use, discharge and disposal of hazardous materials, including medical waste products. We believe that all of our treatment centers comply with these laws and regulations in all material respects and we do not anticipate that any of these laws will have a material adverse effect on our operations.

Although our linear accelerators and certain other equipment do not use radioactive or other hazardous materials, our treatment centers do provide specialized treatment involving the implantation of radioactive material in the prostate and other organs. The radioactive sources generally are obtained from, and returned to, the suppliers, which have the ultimate responsibility for their proper disposal. We, however, remain subject to state and federal laws regulating the protection of employees who may be exposed to hazardous material and the proper handling, storage and disposal of that material.

We derived approximately 45%, 45% and 42% of our net patient service revenue for the years ended December 31, 2012, 2013 and 2014, respectively, from payments made by government sponsored healthcare programs. We provide a full range of services, some of which are reimbursed as "professional" services, and some of which are reimbursed as "technical" services. Those services include the initial consultation, clinical treatment planning, simulation, medical radiation physics, dosimetry, treatment devices, special services and clinical treatment management procedures.

The initial consultation is charged as a professional fee for evaluation of the patient prior to the decision to treat the patient with radiation therapy. The clinical treatment planning also is reimbursed as a technical and professional component. Simulation of the patient prior to treatment involves both a technical and a professional component, as the treatment plan is verified with the use of a simulator accompanied by the physician's approval of the plan. The medical radiation physics, dosimetry, treatment devices and special services also include both professional and technical components. The basic dosimetry calculation is accomplished, treatment devices are specified and approved, and the physicist consults with the radiation oncologist, all as professional and technical components of the charge. Special blocks, wedges, shields, or casts are fabricated, all as a technical and professional component.

The delivery of the radiation treatment from the linear accelerator is a technical charge. The clinical treatment administrative services fee is the professional fee charged weekly for the physician's management of the patient's treatment. Global fees containing both professional and technical components also are charged for specialized treatment such as hyperthermia, clinical intracavitary hyperthermia, clinical brachytherapy, interstitial radioelement applications, and remote after-loading of radioactive sources.

Coding and billing for radiation therapy is complex. We maintain a staff of certified coding professionals responsible for interpreting the services documented on the patients' charts to determine the appropriate coding of services for billing of third-party payers. This staff provides coding and billing services for all of our treatment centers except for four treatment centers in New York. In addition, we do not provide coding and billing services to hospitals where we are providing only the professional component of radiation treatment services. We provide training for our coding staff and believe that our coding and billing expertise result in appropriate and timely reimbursement. Given the complexity of the regulations and guidance governing coding and billing, we cannot guarantee that the government will not challenge any of our practices. Any such challenge could have a material adverse effect on us.

Northwest Cancer Clinic Joint Venture and Rhode Island radiation facility acquisition

On January 2, 2015, our wholly owned subsidiary, 21^st Century Oncology of Washington, LLC, entered into a joint venture with Northwest Cancer Clinic, LLC ("NWCC"). 21^st Century Oncology of Washington, LLC owns 80% in the newly formed joint venture entity, and NWCC's current physician leader, Sheila Rege, M.D., will hold a 20% equity interest in the newly-formed entity. The strategic alliance with NWCC and our partnership with its highly regarded physicians in a joint effort to continue to provide superior quality cancer care to patients in the Tri-Cities area. This transaction both expands 21C's geographical reach into a new market, further broadening our ability to deliver best-in-class cancer care, and to align ourselves with key physicians who share our vision. Through the alliance in a radiation oncology facility located in Kennewick, WA, 21C will enter into a new market in the Northwestern U.S., one of the fastest growing regions in the country, with future expansion opportunities via satellite offices in the region. Our NWCC partnership will enable us to deliver the best integrated cancer care at academic quality while providing unparalleled value to our growing patient population worldwide.

On January 6, 2015, we acquired the assets of a radiation oncology practice located in Warwick, Rhode Island. This acquisition further expands our presence in Rhode Island.

We believe that both the Northwest Cancer Clinic Joint Venture and Rhode Island radiation facility acquisition provide us an opportunity to further leverage our infrastructure, contracting, technology and footprint to achieve significant operating synergies, broaden and deepen our ability to offer advanced cancer care to patients throughout the United States and offer expansion opportunities for our ICC model across the Company.

As a result of our recently completed transactions, we now operate 182 treatment centers, including 146 centers located in 17 U.S. states.

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and, in accordance therewith, file reports and other information with the Securities and Exchange Commission (the "SEC"). Such reports and other information can be inspected and copied at the Public Reference Room of the SEC located at Room 1580, 100 F Street, N.E., Washington D.C. 20549. Copies of such materials can be obtained from the Public Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such materials may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov).

Our corporate website is www.21co.com and we make available copies of our filings under the Exchange Act, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q , Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act on our website, free of charge, under the heading "SEC Filings", as soon as reasonably practicable after such material is filed or furnished to the SEC. The information contained on the website is not part of this Annual Report on Form 10-K/A and is not incorporated into this Annual Report on Form 10-K/A by reference.

You should carefully consider the risk factors set forth below as well as the other information contained in this Annual Report on Form 10-K/A, including our consolidated financial statements and the related notes, in evaluating our company and our business. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. In such a case, you may lose all or part of your original investment.

We depend on payments from government Medicare and, to a lesser extent, Medicaid programs for a significant amount of our revenue. Our business could be materially harmed by any changes that result in reimbursement reductions.

Our payer mix is concentrated with Medicare patients due to the high proportion of cancer patients over the age of 65. We estimate that approximately 45%, 45% and 42% of our U.S. net patient service revenue for the years ended December 31, 2012, 2013 and 2014, respectively, consisted of payments from Medicare and Medicaid. Only a small percentage of that revenue resulted from Medicaid patients, equaling approximately 2.7%, 2.7%, and 2.2% for the years ended December 31, 2012, 2013 and 2014, respectively. In addition, Medicare Advantage represents approximately 13% of our 2014 U.S. net patient service revenue. These government programs generally reimburse us on a fee-for-service basis based on predetermined government reimbursement rate schedules. As a result of these reimbursement schedules, we are limited in the amount we can record as revenue for our services from these government programs. Following a public comment period, the Centers for Medicare and Medicaid Services ("CMS") can change these schedules annually and therefore the prices that the agency pays for these services. In addition, if our operating costs increase, we will not be able to recover these costs from government payers. As a result, our financial condition and results of operations may be adversely affected by changes in reimbursement for Medicare reimbursement. Various state Medicaid programs also have recently reduced Medicaid payments to providers based on state budget reductions. Although Medicaid reimbursement encompasses only a small portion of our business, there can be no certainty as to whether Medicaid reimbursement will increase or decrease in the future and what affect, if any, this will have on our business.

In the final Medicare 2013 Physician Fee Schedule, CMS reduced payments for radiation oncology by 7%. Total gross reductions in the final rule were offset by a 2% increase due to certain other revised radiation oncology codes, which resulted in a total net reduction to radiation oncology of 7%.

In the final Medicare 2014 Physician Fee Schedule, CMS did finalize its proposal to revise the Medicare Economic Index ("MEI") [–2% impact], CMS also incorporated updated relative value units ("RVUs") for new and existing codes [+3% impact] resulting in a net impact of +1% for radiation oncology overall. Because the MEI policy only applies to freestanding settings, the impact to freestanding centers is approximately flat, while hospital-based radiation oncologists would receive an increase in payment under the final rule.

In the proposed Medicare 2015 Physician Fee Schedule, CMS proposed to reduce payments for radiation oncology by 4% overall. This reduction related primarily to a proposal to remove the radiation treatment vault as a direct cost input for radiation treatment delivery codes. Because the proposal only applied to freestanding settings, the cut to freestanding centers would likely have been closer to 5%, while hospital based radiation oncologists would have received an increase in payment under the proposal. In the final Medicare 2015 Physician Fee Schedule, CMS did not finalize its proposal to remove the radiation treatment vault as a direct cost input for radiation treatment delivery codes. As a result, the net impact of the Final Rule to radiation oncology and freestanding radiation

therapy centers is approximately neutral overall. In the Final rule, CMS also indicated it would review the family of radiation treatment delivery codes in the CY 2016 Physician Fee Schedule Proposed Rule.

Medicare reimbursement rates for all procedures under Medicare ultimately are determined by a formula which takes into account a conversion factor ("CF") which is updated on an annual basis based on the Sustainable Growth Rate ("SGR"). For the last several years, the SGR policy has threatened significant cuts to the CF, although Congress has consistently delayed those cuts. On April 1, 2014, the President signed H.R. 4302, the Protecting Access to Medicare Act of 2014 which extended the $35.8228 conversion factor through 2014 and also provided for a zero percent update through March 31, 2015. If future SGR reductions are not suspended, and if a permanent "doc fix" is not signed into law, the currently scheduled SGR reimbursement decrease (estimated at more than 20%) will take effect on April 1, 2015. Due to budget neutrality requirements from certain policies in the final Medicare 2015 Physician Fee Schedule, the 2015 conversion factor has been slightly adjusted to $35.7547, assuming no SGR cuts.

In addition, under the Budget Control Act of 2011, Medicare providers are cut under a sequestration process by 2% each year relative to baseline spending through 2021. This policy was subsequently extended through 2024. In the Protecting Access to Medicare Act, the sequestration policy was frontloaded for the year 2024 such that Medicare providers would be cut 4% in the first half of 2024 and 0% in the second half of 2024.

A significant portion of our U.S. patient volume is derived from government programs, principally Medicare, which are highly regulated and subject to frequent and substantial changes. We anticipate the Health Care Reform Act will continue to significantly affect how the healthcare industry operates in relation to Medicare, Medicaid and the insurance industry. The Health Care Reform Act contains a number of provisions, including those governing fraud and abuse, enrollment in federal healthcare programs, and reimbursement changes, which impact existing government healthcare programs and will continue to result in the development of new programs, including Medicare payment for performance initiatives and improvements to the physician quality reporting system and feedback program.

On June 28, 2012, the U.S. Supreme Court upheld the constitutionality of the Health Care Reform Act's "individual mandate" that will require individuals as of 2014 to either purchase health insurance or pay a penalty. The Supreme Court also held, however, that the federal government cannot force states to expand their Medicaid programs by threatening to cut their existing Medicaid funds. As a result of this decision, states are left with a choice about whether to expand their Medicaid programs to cover low-income, non-disabled adults without children. Numerous states opted not to expand their Medicaid program in 2014, which may materially impact our Medicaid revenue in these states.

The Health Care Reform Act provides for the creation of health insurance "Marketplaces" in each state where individuals can compare and enroll in Quality Health Plans ("QHPs"). Some QHPs will be partially subsidized by Federal funds. Individuals with an income less than 400% of the federal poverty level that purchase insurance on a Marketplace may be eligible for federal subsidies to cover a portion of their health insurance premium costs. In addition, they may be eligible for government cost sharing of co-insurance or co-pay obligations. The presence of Federal funds in QHPs in the form of subsidies and cost sharing may subject providers to heightened government attention and enforcement, which could significantly increase the cost of compliance and could materially impact our operations.

Furthermore, an open question remains whether the availability of these federal subsidies classifies a QHP as a federal healthcare program. In an October 30, 2013 letter, Kathleen Sebelius, the Secretary of the DHHS, indicated that DHHS does not consider QHPs to be federal healthcare programs. However, this statement by Secretary Sebelius has not been tested in court, and a judge may not agree. Additionally, a subsequent CMS FAQ on November 4, 2013, as well as a November 7, 2013 letter from U.S. Senator Charles Grassley to Secretary Sebelius and Attorney General Eric Holder, indicates that this issue is not settled. If QHPs are classified as federal healthcare programs it could further increase the cost of compliance significantly for providers. The Health Care Reform Act has experienced several setbacks that heighten the uncertainty about its implementation. On October 1, 2013, the DHHS launched the federally-run insurance Marketplaces through its www.healthcare.gov website. The website has experienced multiple problems throughout its launch, which has limited the ability of individuals to sign up for healthcare coverage and has exposed security concerns. In addition, during the Fall of 2013, millions of people with individual health insurance plans received cancellation letters from their insurance providers. These letters frequently expressed that plans were being cancelled because they failed to meet the new requirements of the Health Care Reform Act. In response, the White House announced that it would grant state insurance commissioners federal permission to allow consumers to keep existing health insurance policies through 2014. Several state insurance commissions have nonetheless continued to maintain that insurers cannot offer plans in 2014 unless they meet the requirements of the Health Care Reform Act. These implementation setbacks have called into question early predictions about the number of previously un-insured individuals who will obtain coverage through a Marketplace plan. In addition, certain members of Congress continue to introduce legislation that would repeal or significantly amend the Health Care Reform Act. Because of the continued uncertainty about the implementation of the Health Care Reform Act, we cannot predict the impact of the law or any future reforms on our business.

In addition, King v. Burwell is scheduled to be argued before the Supreme Court this year. Petitioners in this case argue that the Health Care Reform Act only subsidizes coverage through an exchange established by a state. Depending on the outcome of the case, subsidies for healthcare coverage in the states that use federal exchanges could be at risk.

We can give no assurance that the Health Care Reform Act will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform would affect our business.

If payments by managed care organizations and other commercial payers decrease, our revenue and profitability could be adversely affected.

We estimate that approximately 54%, 54% and 57% of our net patient service revenue for the years ended December 31, 2012, 2013 and 2014, respectively, was derived from commercial payers such as managed care organizations and private health insurance programs as well as individuals. As of December 31, 2014, we have over 1,000 contracts with commercial payers. These commercial payers generally reimburse us for services rendered to insured patients based upon predetermined rates. Rates for health maintenance organization benefit plans are typically lower than those for preferred provider organization or other benefit plans that offer broader provider access. When Medicare rates change, these commercial rates automatically change as well. Additionally, most commercial payers tend to negotiate their rates as a percentage of Medicare reimbursement. Even when our commercial rates are fixed and not tied directly to changes in Medicare, there is often pressure to renegotiate our reimbursement to align with these modified levels. If managed care organizations and other private insurers reduce their rates or we experience a significant shift in our revenue mix toward certain additional managed care payers or Medicare or Medicaid reimbursements, then our revenue and profitability may decline and our operating margins will be reduced. Non-government payers, including managed care payers, continue to demand discounted fee structures, and the trend toward consolidation among non-government payers tends to increase their bargaining power over fee

structures. Our future success will depend, in part, on our ability to retain and renew our managed care contracts as well as enter into new managed care contracts on terms favorable to us. Any inability to maintain suitable financial arrangements with commercial payers could have a material adverse impact on our business.

Increasingly, commercial payers are turning to third-party benefits managers to pre-certify radiation oncology services or develop payment-based treatment protocols. The failure to obtain such pre-certifications and adhere to such protocols can result in the payers' denial of payment in whole or in part. While we are working with such benefits managers to assure compliance with their policies or to obtain modification of what we believe to be inappropriate policies, there can be no assurance that they will not have a material adverse effect on our business.

The U.S. economy has weakened significantly following the 2008 financial crisis. Depressed consumer spending and higher unemployment rates continue to pressure many industries and geographic locations. During economic downturns, governmental entities often experience budget deficits as a result of increased costs and lower than expected tax collections. These budget deficits may force federal, state and local government entities to decrease spending for health and human service programs, including Medicare, Medicaid and similar programs, which represent significant payer sources for our treatment centers. Other risks we face from general economic weakness include potential declines in the population covered under managed care agreements, patient decisions to postpone or cancel elective procedures as well as routine diagnostic examinations, potential increases in the uninsured and underinsured populations and further difficulties in our collecting patient co-payment and deductible receivables.

Due to the rising costs of managed care premiums and co-pay amounts, coupled with the current economic environment, we may realize an increased exposure to bad debt due to patients' inability to pay for certain forms of cancer treatment.

As more patients become uninsured as a result of job losses or receive reduced coverage as a result of cost-control measures by employers to offset the increased costs of managed care premiums, patients are becoming increasingly responsible for the rising costs of treatment, which is increasing our exposure to bad debt. This also relates to patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and co-payments) remain outstanding. The shifting responsibility to pay for care has, in some instances, resulted in patients electing not to receive certain forms of cancer treatment.

In response to this environment, we have improved our processes associated with verification of insurance eligibility and patient responsibility payment programs. In addition, we have improved our patient financial counseling efforts and developed tools to monitor our progress in this area. However, a continuation of the trends that have resulted in an increasing proportion of accounts receivable being comprised of uninsured accounts and a deterioration in the collectability of these accounts will adversely affect our cash flows and results of operations.

We depend on recruiting and retaining qualified healthcare professionals for our success.

Our success is dependent upon our continuing ability to recruit, train and retain or affiliate with radiation oncologists, ICC physicians, physicists, dosimetrists and radiation therapists. While there is currently a national shortage of certain of these healthcare professionals, we have not experienced significant problems attracting and retaining key personnel and professionals in the recent past. We face competition for such personnel from other healthcare providers, research and academic institutions, government entities and other organizations. In the event we are unable to recruit and

retain these professionals, such shortages could have a material adverse effect on our ability to grow. Additionally, many of our senior radiation oncologists, due to their reputations and experience, are very important in the recruitment and education of radiation oncologists. The loss of any such senior radiation oncologists could negatively impact us.

Most of our radiation oncologists and other ICC physicians in the United States are employed under employment agreements which, among other things, provide that they will not compete with us (or the professional corporations contracting with us) for a period of time after their employment terminates. Such covenants not to compete are enforced to varying degrees from state to state. In most states, a covenant not to compete will be enforced only to the extent that it is necessary to protect the legitimate business interest of the party seeking enforcement, that it does not unreasonably restrain the party against whom enforcement is sought and that it is not contrary to the public interest. This determination is made based upon all the facts and circumstances of the specific case at the time enforcement is sought. It is unclear whether our interests under our administrative services agreements will be viewed by courts as the type of protected business interest that would permit us or the professional corporations to enforce a non-competition covenant against the radiation oncologists. Since our success depends in substantial part on our ability to preserve the business of our radiation oncologists and other ICC physicians, a determination that these provisions are unenforceable could have a material adverse effect on us.

As a result of the OnCure Acquisition, in several markets we rely on physician practices to provide our services. Following our acquisition of OnCure, we assumed the MSAs previously in place between OnCure and most of its managed practices, which excluded certain of the MSAs that were rejected in the OnCure bankruptcy proceeding, with all but five of the affected centers becoming either a direct Company provider or placed under a new MSA with a practice that was previously affiliated with us. Under the MSAs, OnCure provides the necessary medical and office equipment, clinical and operating staff (other than physicians) and office space and leasehold improvements, as well as general management and billing/collection services, in exchange for a management fee based on a percentage of the practice's revenues or EBITDA. The MSAs generally run for a term of ten years or longer with either party having the right to renew. Upon the termination or expiration of an MSA, OnCure retains the ownership of the office space and medical and office equipment, as well as the right to operate the center with a different medical provider. While there are certain reciprocal non-compete obligations, such obligations are generally relinquished upon the termination of the MSA.

We depend on our senior management and we may be materially harmed if we lose any member of our senior management.

We are dependent upon the services of our senior management, especially Daniel E. Dosoretz, M.D., our Chief Executive Officer, and a director on the Company's Board of Directors. We have entered into executive employment and non-competition agreements with certain members of our senior management. Because many members of our senior management team have been with us for over 10 years and have contributed greatly to our growth, their services would be very difficult, time consuming and costly to replace. We carry key-man life insurance on Dr. Daniel Dosoretz. The loss of key management personnel or our inability to attract and retain qualified management personnel could have a material adverse effect on us. A decision by any of these individuals to leave our employ, to compete with us or to reduce their involvement in our business, could have a material adverse effect on our business.

The cancer treatment market is highly competitive in each market in which we operate. Our treatment centers face competition from hospitals, other medical practitioners and other operators of radiation treatment centers. There is a growing trend by hospitals to employ medical oncologists and

other ICC physicians. We compete against hospitals and other providers to employ these individuals, which generally results in such physicians referring their patients to the hospitals' radiation facilities, rather than other free-standing facilities. There is also a growing trend of physicians in specialties other than radiation oncology, such as urology, entering the radiation treatment business. If these trends continue it could harm our referrals and our business. Certain of our competitors have longer operating histories and greater financial and other resources than us. In addition, in states that do not require a certificate of need for the purchase, construction or expansion of healthcare facilities or services, competition in the form of new services, facilities and capital spending is more prevalent. If our competitors are better able to attract patients, recruit physicians, expand services or obtain favorable managed care contracts at their facilities than our centers, we may experience an overall decline in patient volume. In the event that we are not able to compete successfully, our business may be adversely affected and competition may make it more difficult for us to affiliate with or employ additional radiation oncologists on terms that are favorable to us.

We could be the subject of governmental investigations, claims and litigation.

Healthcare companies are subject to numerous types of investigations by various governmental agencies. Further, under the False Claims Act, private parties have the right to bring "qui tam," or "whistleblower," suits against companies that knowingly submit false claims for payments to, or improperly retain overpayments from, the government. The False Claims Act imposes penalties of not less than $5,500 and not more than $11,000, plus three times the amount of damages which the government sustains because of the submission of a false claim. In addition, if we are found to have violated the False Claims Act, we could be excluded from participation in Medicare, Medicaid and other federal healthcare programs. Some states have adopted similar state whistleblower and false claims provisions. We have received inquiries from federal and state agencies related to potential False Claims Act liability. Depending on whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution could have a material adverse effect on our financial position, results of operations and liquidity.

Governmental agencies and their agents, such as the Medicare Administrative Contractors, as well as the OIG, CMS and state Medicaid programs, conduct audits of our healthcare operations. Private payers may conduct similar post-payment audits, and we also perform internal audits and monitoring. Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material adverse effect on our financial position, results of operations and liquidity.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established the Recovery Audit Contractor ("RAC") three-year demonstration program to conduct post-payment reviews to detect and correct improper payments in the fee-for-service Medicare program. The Tax Relief and Health Care Act of 2006 made the RAC program permanent and expanded the program nationwide as of 2010. Since the nationwide expansion of the RAC program, CMS has recouped more than $5 billion in overpayments from fee-for-service Medicare providers. In addition, the Health Care Reform Act mandated the expansion of the RAC program to Medicaid. In 2011 CMS issued a Final Rule on Medicaid RAC program, requiring every state Medicaid agency to implement its Medicaid RAC program by 2012. State Medicaid agencies have also increased their review activities. Should we be found out of compliance with any of these laws, regulations or programs, depending on the nature of the findings, our business, our financial position and our results of operations could be materially adversely affected.

services as part of a civil False Claims Act investigation, as well as our agreements with such physicians. The laboratory services under review relate to the utilization of fluorescence in situ hybridization ("FISH") laboratory tests ordered by certain of our employed physicians and performed by us. We were served with another subpoena from the OIG on January 22, 2015, requesting additional documents related to this matter for the period from January 1, 2005 up through the production of documents responsive to the February 2014 subpoena. We have recorded a liability for this matter of approximately $4.7 million and $5.1 million that is included in accrued expenses in our consolidated balance sheet as of December 31, 2013 and 2014, respectively. The recorded estimate is based on a probability weighted analysis of the low-end of the range of the liability that considers the facts currently known by us, our review of qualitative and quantitative factors, and our assessment of potential outcomes under different scenarios used to assess our exposure which may be used to determine a potential settlement should we decide not to litigate. Our recording of a liability related to this matter is not an admission of guilt. Depending on how this matter progresses, our exposure may be less than or more than the liability recorded and we will continue to reassess and adjust the liability until this matter is settled. Our estimate of the high-end of the range of exposure is $10.3 million.

We received two Civil Investigative Demands ("CIDs"), one on October 22, 2014 addressed to 21C and one on October 31, 2014 addressed to SFRO, from the DOJ pursuant to the False Claims Act. The CIDs requested information concerning allegations that we knowingly billed for services that were not medically necessary and focused on Gamma services (which are dosimetry calculations performed during the course of radiation therapy). The CIDs cover the period from January 1, 2009 to the present. Among other information requests, the CIDs request certain documents and information related to the administration of radiation therapy; selection of various radiation therapies and Gamma services. Our total billings to federal health care programs including Medicare, Medicare Advantage and Medicaid for Gamma services from January 1, 2009 to December 31, 2014 are approximately $68.4 million. The dispute involved the training protocols of certain staff in the utilization of Gamma and was limited to early implementation and start-up activities at new facility locations across the country. We have not recorded any liability for this matter as of December 31, 2014.

Based on reviews performed to date, we do not believe that we or our physicians knowingly submitted false claims in violation of applicable statutory or regulatory requirements. We are cooperating fully with the subpoena requests and the DOJ's investigation.

We may be subject to actions for false claims, which could harm our business, if we do not comply with government coding and billing rules.

If we fail to comply with federal and state documentation, coding and billing rules, we could be subject to criminal and/or civil penalties, loss of licenses and exclusion from the Medicare and Medicaid programs, which could harm us. We estimate that approximately 45%, 45%, and 42% of our U.S. net patient service revenue for the years ended December 31 2012, 2013 and 2014, respectively, consisted of payments from Medicare and Medicaid programs. In addition, Medicare Advantage represents approximately 13% of our 2014 U.S. net patient service revenue. In billing for our services to third-party payers, we must follow complex documentation, coding and billing rules. These rules are based on federal and state laws, rules and regulations, various government pronouncements, and on industry practice. Failure to follow these rules could result in potential civil liability under the False Claims Act, under which extensive financial penalties can be imposed. It could further result in criminal liability under various federal and state criminal statutes. We submit thousands of claims for Medicare and other payments and there can be no assurance that there have not been errors. While we carefully and regularly review our documentation, coding and billing practices as part of our compliance program, the rules are frequently vague and confusing and we cannot assure that governmental investigators, private insurers or private whistleblowers will not challenge our practices. Such a challenge could result in a material adverse effect on our business.

If we fail to comply with the federal anti-kickback statute, we could be subject to criminal and civil penalties, loss of licenses and exclusion from the Medicare and Medicaid programs, which could materially harm us.

A provision of the Social Security Act, commonly referred to as the federal anti-kickback statute, prohibits the offer, payment, solicitation or receipt of any form of remuneration in return for referring, ordering, leasing, purchasing or arranging for or recommending the ordering, purchasing or leasing of items or services payable by Medicare, Medicaid or any other federally funded healthcare program. The federal anti-kickback statute is very broad in scope, as remuneration includes the transfer of anything of value, in cash or in kind. Financial relationships covered by this statute can include any relationship where remuneration is provided for referrals including payments not commensurate with fair market value, whether in the form of space, equipment leases, professional or technical services or anything else of value. As it is an "intent-based" statute, as detailed in federal court precedent, one or both parties must intend the remuneration to be in exchange for or to induce referrals. Violations of the federal anti-kickback statute may result in substantial civil or criminal penalties, including criminal fines of up to $25,000, imprisonment of up to five years, civil penalties under the Civil Monetary Penalties Law of up to $50,000 for each violation, plus three times the remuneration involved, civil penalties under the federal False Claims Act of up to $11,000 for each claim submitted, plus three times the amounts paid for such claims and exclusion from participation in the Medicare and Medicaid programs. These penalties and the participation exclusion, if applied to us or one or more of our subsidiaries or affiliates, could result in significant reductions in our revenues and could have a material adverse effect on our business.

In addition, most of the states in which we operate, including Florida, have also adopted laws, similar to the federal anti-kickback statute, that prohibit payments to physicians in exchange for referrals, some of which apply regardless of whether the source of payment is a government payer or a private payer. These statutes typically impose criminal and civil penalties as well as loss of licenses.

Under a provision of the federal Civil Monetary Penalties Law, civil monetary penalties (and exclusion) may be imposed on any person who offers or transfers remuneration to any patient who is a Medicare or Medicaid beneficiary, when the person knows or should know that the remuneration is likely to induce the patient to receive medical services from a particular provider. This broad provision applies to many kinds of inducements or benefits provided to patients, including complimentary items, services or transportation that are of more than a nominal value. We have reviewed our practices of providing services to our patients, and have structured those services in a manner that we believe complies with the law and its interpretation by government authorities. We cannot provide assurances, however, that government authorities will not take a contrary view and impose civil monetary penalties and exclude us for past or present practices.

If we fail to comply with physician self-referral laws as they are currently interpreted or may be interpreted in the future, or if other legislative restrictions are issued, we could incur a significant loss of reimbursement revenue.

We are subject to the federal Stark Law, as well as similar state statutes and regulations, which bans payments for DHS rendered as a result of referrals by physicians to DHS entities with which the physicians (or immediate family members) have a financial relationship. DHS includes, but is not limited to, radiation therapy, radiology and laboratory services. A "financial relationship" includes investment and compensation arrangements, both direct and indirect. The regulatory framework of the Stark Law is to first prohibit all referrals from physicians to entities for Medicare DHS and then to except certain types of arrangements from that broad general prohibition.

State self-referral laws and regulations vary significantly based on the state and, in many cases, have not been interpreted by courts or regulatory agencies. These state laws and regulations can encompass not only services reimbursed by Medicaid or government payers but also private payers.

Violation of these federal and state laws and regulations may result in prohibition of payment for services rendered, loss of licenses, $15,000 civil monetary penalties for specified infractions, $100,000 for a circumvention scheme, criminal penalties, exclusion from Medicare and Medicaid programs, and potential false claims liability, including via "qui tam" action, of not less than $5,500 and not more than $11,000 per claim, plus three times the amount of damages that the government sustains because of an improperly submitted claim. The repayment provisions in the Stark Law are not dependent on the parties having an improper intent; rather, the Stark Law is a strict liability statute and any violation is subject to repayment of all "tainted" referrals.

Our compensation and other financial arrangements with physicians are governed by the federal Stark Law. We rely on certain exceptions to the Stark Law, including those covering employees and in-office ancillary services, and the exclusion of certain requests by radiation oncologists for radiation therapy services from the definition of "referral." Under our ICC model, we have relationships with non-radiation oncology physicians such as medical oncologists, surgeons and urologists that are members of a group practice with our radiation oncologists and we rely on the Stark Law group practice definition and rules with respect to such relationships.

The Health Care Reform Act also imposes new disclosure requirements, including one such requirement on referring physicians under the federal Stark Law to inform patients that they may obtain certain imaging services (e.g., MRI, CT and PET) or other designated health services as specified by the Secretary of Health and Human Services in the future from a provider other than that physician, his or her group practice, or another physician in his or her group practice. To date, CMS has not applied these disclosure requirements to radiation therapy referrals but could do so in the future.

While we believe that our financial relationships with physicians and referral practices are in compliance with applicable laws and regulations, we cannot guarantee that government authorities might take a different position. If we were found to be in violation of the Stark Law, we could be subject to significant civil and criminal penalties, including fines as specified above, exclusion from participation in government and private payer programs and requirements to refund amounts previously received from government and private payers.

In addition, expansion of our operations to new jurisdictions, or new interpretations of laws in our existing jurisdictions, could require structural and organizational modifications of our relationships with physicians to comply with that jurisdiction's laws. Such structural and organizational modifications could result in lower profitability and failure to achieve our growth objectives.

Certain states have proposed statutory or regulatory enactments that would prohibit the use of the Stark Law "in-office ancillary services" exception for ICC physicians to obtain any financial benefit from radiation oncology and other DHS services even if they are part of a group practice. To date, only the state of Maryland has enacted such prohibition. If any of these state or similar federal proposed enactments are promulgated, this could have a material adverse impact on our ICC model and our business.

If a federal or state agency asserts a different position or enacts new laws or regulations regarding illegal payments under the Medicare, Medicaid or other governmental programs, we may be subject to civil and criminal penalties, experience a significant reduction in our revenue or be excluded from participation in the Medicare, Medicaid or other governmental programs.

Any change in interpretations or enforcement of existing or new laws and regulations could subject our current business practices to allegations of impropriety or illegality, or could require us to make changes in our treatment centers, equipment, personnel, services, pricing or capital expenditure programs, which could increase our operating expenses and have a material adverse effect on our operations or reduce the demand for or profitability of our services.

Additionally, new federal or state laws may be enacted that would cause our relationships with our radiation oncologists or other physicians to become illegal or result in the imposition of penalties against us or our treatment centers. If any of our business arrangements with our radiation oncologists or other physicians in a position to make referrals of radiation therapy services were deemed to violate the federal anti-kickback statute or similar laws, or if new federal or state laws were enacted rendering these arrangements illegal, our business would be adversely affected.

We may encounter numerous business risks in identifying, acquiring and developing additional treatment centers, and may have difficulty operating and integrating those treatment centers.

Over the past three years ended December 31, 2014, we have acquired 57 treatment centers, acquired 6 professional/other centers, developed 4 treatment centers, developed 1 professional/other center and transitioned 1 acquired professional/other centers to freestanding treatment centers, all of which includes our acquisitions of OnCure which we completed on October 25, 2013 and SFRO on February 10, 2014. As part of our growth strategy, we expect to continue to add additional treatment centers in our existing and new local and international markets. When we acquire or develop additional treatment centers, we may:

Larger acquisitions could increase our potential exposure to business risks. Furthermore, integrating a new treatment center could be expensive and time consuming, and could disrupt our ongoing business and distract our management and other key personnel. In addition, we may incur significant transaction fees and expenses, including for potential transactions that are not consummated.

We may continue to explore acquisition opportunities outside of the United States when favorable opportunities are available to us. In addition to the risks set forth herein, foreign acquisitions involve unique risks including the particular economic, political and regulatory risks associated with the specific country, currency risks, the relative uncertainty regarding laws and regulations and the potential difficulty of integrating operations across different cultures and languages.

We currently plan to continue to develop new treatment centers in existing and new local markets, including international markets. We may not be able to structure economically beneficial arrangements in new markets as a result of healthcare laws applicable to such market or otherwise. If these plans change for any reason or the anticipated schedules for opening and costs of development are revised by us, we may be negatively impacted. There can be no assurance that these planned treatment centers will be completed or that, if developed, will achieve sufficient patient volume to generate positive

operating margins. If we are unable to timely and efficiently integrate a newly-developed treatment center, our business could suffer.

In the case of OnCure, the business operates through a structure dependent on management services agreements. If we are unable to manage these management services agreements and the associated relationships, the business may suffer and the expected results of the acquisition may not be realized.

We cannot assure you that we will achieve the revenue and benefits identified in this Annual Report from completed acquisitions, including with respect to OnCure, or that we will achieve synergies and cost savings or benefits in connection with future acquisitions. In addition, many of the businesses that we have acquired and will acquire have unaudited financial statements that have been prepared by the management of such companies and have not been independently reviewed and audited. We cannot assure you that the financial statements of companies we have acquired or will acquire would not be materially different if such statements were audited. Finally, we cannot assure you that we will continue to acquire businesses at valuations consistent with our prior acquisitions or that we will complete acquisitions at all.

Any failure to comply with regulations relating to privacy and security of patient information could subject us to significant penalties.

There are numerous federal and state laws and regulations addressing patient information privacy and security concerns, including state laws related to identity theft. In particular, the federal regulations issued under HIPAA contain provisions that:

Furthermore, the Omnibus HIPAA Rule, published on January 25, 2013 and now effective, makes business associates directly obligated to adhere to the HIPAA Security Rule and certain provisions of the HIPAA Privacy and Breach Notification Rules, such that violations of these rules can be enforced by the government directly against the business associate.

Compliance with these regulations requires us to spend money and substantial time and resources. We believe that we are in material compliance with the HIPAA regulations with which we are currently required to comply. If we fail to comply with the HIPAA regulations, we could suffer civil penalties up to $50,000 per violation, not to exceed $1.5 million per calendar year for non-compliance of identical provisions, and criminal penalties with fines up to $250,000 per violation and possible imprisonment. Our facilities could be subject to a periodic audit by the federal government, and enforcement of HIPAA violations may occur by either federal agencies or state attorneys general. In 2011, the government launched a HIPAA audit initiative to assess covered entities' controls and processes implemented to comply with the HIPAA Privacy, Security, and Breach notification Rules, and the Office of Civil Rights is expected to implement a permanent HIPAA audit program beginning in 2014, which will expand compliance audits to business associates.

State law limitations and prohibitions on the corporate practice of medicine may materially harm our business and limit how we can operate.

State governmental authorities regulate the medical industry and medical practices extensively. Many states have corporate practice of medicine laws which prohibit us from:

In addition, many states impose limits on the tasks a physician may delegate to other staff members. We have administrative services agreements in states that prohibit the corporate practice of medicine such as California, Massachusetts, Michigan, Nevada, New York and North Carolina. Corporate practice of medicine laws and their interpretation vary from state to state, and regulatory authorities enforce them with broad discretion. We have structured our agreements and services in those states in a manner that we believe complied with the law and its interpretation by government authorities. If, however, we are deemed to be in violation of these laws, we could be required to restructure or terminate our agreements which could materially harm our business and limit how we operate. In the event the corporate practice of medicine laws of other states would adversely limit our ability to operate, it could prevent us from expanding into the particular state and impact our growth strategy.

In certain states we depend on administrative services agreements with professional corporations, including related party professional corporations, and if we are unable to continue to enter into them or they are terminated, we could be materially harmed.

Certain states, including California, Massachusetts, Michigan, Nevada, New York and North Carolina, have laws prohibiting business corporations from employing physicians. Our treatment centers in California, Massachusetts, Michigan, Nevada, New York and North Carolina operate through administrative services agreements with professional corporations that employ the radiation oncologists who provide professional services at the treatment centers in those states. In 2012, 2013 and 2014, $132.8 million, $131.9 million and $139.5 million, respectively, of our net patient service revenue was derived from administrative services agreements, as opposed to $551.0 million, $575.7 million and $799.0 million, respectively, from all of our other centers. The professional corporations in these states are currently owned by certain of our directors, executive officers and equityholders, who are licensed to practice medicine in those states. As we enter into new states that will require an administrative services agreement, there can be no assurance that a related party professional corporation, or any professional corporation, will be willing or able to enter into an administrative services agreement. Furthermore, if we enter into an administrative services agreement with an unrelated party there could be an increased risk of differences arising or future termination. We cannot assure you that a professional corporation will not seek to terminate an agreement with us on any basis, including on the basis of state laws prohibiting the corporate practice of medicine, nor can we assure you that

governmental authorities in those states will not seek termination of these arrangements on the same basis. While we have not been subject to such proceedings in the past, we could be materially harmed if any state governmental authorities or the professional corporations with which we have an administrative services agreement were to succeed in such a termination.

As compared to our approach, the OnCure model involves MSA arrangements (as more fully described elsewhere in this Annual Report) with medical practices whose shareholders and partners are not otherwise affiliated with OnCure. Such medical practices serve as the provider of clinical services with all revenues being billed to patients and/or third party payers in the name or tax identification number or provider number of the practice. As compared to our general model, OnCure has less involvement in the clinical aspects of the center, focusing instead on the provision of space and equipment, as well as day-to-day management. While in connection with the integration of OnCure, it is our plan to introduce our proprietary technology and systems, as well as our ICC model, to these managed practices, there is no assurance that the shareholders and partners in the practices will adopt these systems and model. Moreover, while the terms of the MSAs generally run for ten years or longer, the non-compete obligations of the managed practices and their shareholders and partners generally cease upon the expiration or termination of the MSAs. Finally, whereas our financial arrangements with our affiliated physicians and practices generally involve an employment or compensation arrangement, the financial model under the OnCure MSAs involves a sharing of revenues or EBITDA. In short, the practices that are affiliated with OnCure under the MSA model generally have greater autonomy in their operations than the model we generally deploy.

Our business could be materially harmed by future interpretation or implementation of state laws regarding prohibitions on fee-splitting.

Many states prohibit the splitting or sharing of fees between physicians and non-physicians, as well as between treating physicians and referral sources. These laws vary from state to state and are enforced by courts and regulatory agencies, each with broad discretion. Some states have interpreted certain types of fee arrangements in practice management agreements between entities and physicians as unlawful fee-splitting. We believe our arrangements with physicians comply in all material respects with the fee-splitting laws of the states in which we operate. Nevertheless, if government regulatory authorities were to disagree, we and our radiation oncologists could be subject to civil and criminal penalties, and we could be required to restructure or terminate our contractual and other arrangements, which would result in a loss of revenue and could result in less input by us into the business decisions of such practices. In addition, expansion of our operations to other states with certain types of fee-splitting prohibitions may require structural and organizational modification to the form of relationships that we currently have with physicians, professional corporations and hospitals, which could have a material adverse effect on our business, financial condition and results of operation.

If we fail to comply with the laws and regulations applicable to our treatment center operations, we could suffer penalties or be required to make significant changes to our operations.

Our treatment center operations are subject to many laws and regulations at the federal, state and local government levels. These laws and regulations require that our treatment centers meet various licensing, certification and other requirements, including those relating to:

While we have structured our operations in a manner that we believe complies in all material respects with all applicable laws and regulations, we cannot assure you that government regulators will agree, given the breadth and complexity of such laws. If a government agency were to find that we are not in compliance with these laws, we could suffer civil or criminal penalties, including becoming the subject of cease and desist orders, rejection of the payment of our claims, the loss of our licenses to operate and our ability to participate in government or private healthcare programs, any of which could have a material adverse effect on our business, financial condition and results of operation.

Our failure to comply with laws related to hazardous materials could materially harm us.

Our treatment centers provide specialized treatment involving the use of radioactive material in the treatment of the lungs, prostate, breasts, cervix and other organs. The materials are obtained from, and, if not permanently placed in a patient or consumed, returned to, a third-party provider of supplies to hospitals and other radiation therapy practices, which has the ultimate responsibility for its proper disposal. We, however, remain subject to state and federal laws regulating the protection of employees who may be exposed to hazardous material and regulating the proper handling, storage and disposal of that material. Although we believe we are in compliance in all material respects with all applicable laws, a violation of such laws, or the future enactment of more stringent laws or regulations, could subject us to liability, or require us to incur costs that could have a material adverse effect on us.

The treatment of cancer patients is subject to potential significant technological and therapeutic changes. Future technological developments could render our equipment obsolete. We may incur significant costs in replacing or modifying equipment in which we have already made a substantial investment prior to the end of its anticipated useful life. In addition, there may be significant advances in other cancer treatment methods, such as chemotherapy, surgery, biological therapy or in cancer prevention techniques, which could reduce demand or even eliminate the need for the radiation therapy services we provide.

Changes in medical treatment guidelines or recommendations may adversely affect our business.

There are numerous options that a cancer patient can undergo for treatment. There are also a number of regulatory bodies, research panels and formal guidelines that can influence or even dictate patients, payers and physicians in the course of action that a patient determines to take for his or her particular form of cancer. For instance, in May 2012, the U.S. Preventative Task Force finalized its recommendation against prostate-specific antigen ("PSA") screening and the National Cancer Institute suggested changes in treatment patterns for prostate cancer away from definitive treatment and towards "watchful waiting" or "active surveillance." Both of these bodies' proclamations negatively impacted the volume of prostate cancer treatments nationally. On a same practice basis, in 2012, our prostate cancer treatment volumes declined by over 9.6% over 2011. Although our prostate volumes have stabilized, there can be no assurance that further recommendations or changes in treatment guidelines for prostate cancer or other cancer types will not result in a decrease in diagnosis and treatment of cancer which could have a materially adverse effect on our business.

Efforts to regulate the construction, acquisition or expansion of healthcare treatment centers could prevent us from developing or acquiring additional treatment centers or other facilities or renovating our existing treatment centers.

Many states have enacted certificate of need laws which require prior approval for the construction, acquisition or expansion of healthcare treatment centers. In giving approval, these states

consider the need for additional or expanded healthcare treatment centers or services. In the states of Kentucky, Massachusetts, Michigan, North Carolina, Rhode Island, South Carolina and West Virginia in which we currently operate, certificates of need must be obtained for capital expenditures exceeding a prescribed amount, changes in capacity or services offered and various other matters. Other states in which we now or may in the future operate may also require certificates of need under certain circumstances not currently applicable to us. We may not be able to obtain the certificates of need or other required approvals for ongoing, additional or expanded treatment centers or services in the future. In addition, at the time we acquire a treatment center, we may agree to replace equipment or expand the acquired treatment center. If we are unable to obtain required approvals, we may not be able to acquire additional treatment centers or other facilities or expand acquired treatment centers, expand the healthcare services we provide at these treatment centers or replace equipment.

Certain states are reconsidering their participation in certificate of need programs, and these decisions could significantly impact the approval process for future projects. For example, on June 25, 2013, the governor of South Carolina vetoed the appropriation of funds for the state's certificate of need program. This veto was upheld by the South Carolina House of Representatives the next day. As a result of the veto, the SCDEHC suspended the operation of the certificate of need program for the fiscal year beginning July 1, 2013. The SCDEHC is not reviewing any new or existing applications while the certificate of need program is suspended. A petition is currently pending in front of the South Carolina Supreme Court seeking a declaratory ruling on the ability of providers to engage in activities covered by the state's certificate of need law without approval by the SCDEHC. The outcome of this ruling and other potential future efforts in other states could materially affect our ability to develop new projects in various states.

We are exposed to local business risks in different countries, which could have a material adverse effect on our financial condition or results of operations.

We have significant operations in foreign countries. Currently, we operate through 27 legal entities in Argentina, Costa Rica, The Dominican Republic, El Salvador, Guatemala and Mexico, in addition to our operations in the United States. Our offshore operations are subject to risks inherent in doing business in foreign countries, including, but not necessarily limited to:

We may not be successful in developing and implementing policies and strategies to address the foregoing factors in a timely and effective manner at each location where we do business. Consequently, the occurrence of one or more of the foregoing factors could have a material adverse effect on our international operations or upon our financial condition and results of operations.

Further, our international operations require us to comply with a number of U.S. and international regulations. For example, we must comply with U.S. economic sanctions and export control laws in connection with exports of products and services, and we must comply with the Foreign Corrupt Practices Act ("FCPA"), which prohibits U.S. companies or their agents and employees from providing anything of value to a foreign official or agent thereof for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage. Any failure by us to ensure that our employees and agents comply with the FCPA, economic sanctions and export controls, and applicable laws and regulations in foreign jurisdictions could result in substantial penalties or restrictions on our ability to conduct business in certain foreign jurisdictions, and our results of operations and financial condition could be materially and adversely affected.

Local governments may take actions that are adverse to our interests and our business. For example, in 2012 Argentina's government nationalized the country's largest oil and gas company via taking a 51% stake. While no such proposal has been made or threatened with respect to any businesses in the Argentine healthcare sector, we have significant operations in Argentina and any such development could have a material adverse effect on our international operations or upon our financial condition and results of operations.

The Argentine government has implemented certain measures that control and restrict the ability of companies and individuals to exchange Argentine pesos for foreign currencies. Those measures include, among other things, the requirement to obtain the prior approval from the Argentine Tax Authority of the foreign currency transaction (for example and without limitation, for the payment of non-Argentine goods and services, payment of principal and interest on non-Argentine debt and also payment of dividends to parties outside of the country), which approval process could delay, and eventually restrict, the ability to exchange Argentine pesos for other currencies, such as U.S. dollars. Those approvals are administered by the Argentine Central Bank through the Mercado Unico Libre de Cambios, which is the only market where exchange transactions may be lawfully made.

During January 2014 the Argentinean Peso exchange rate against the U.S. Dollar increased by approximately 23%, from 6.52 Argentinean Pesos per U.S. Dollar as of December 31, 2013 to approximately 8.0 Argentinean Pesos per U.S. Dollar. Since January 2014, the depreciation of the Argentine Peso has been low with, the Argentinean Peso exchange rate ended the year on December 31, 2014 at 8.55 Argentine Pesos per U.S. Dollar.

Our international subsidiaries accounted for $79.3 million, $82.3 million and $91.2 million or 11.4%, 11.3% and 9.0%, of our revenues for the years ended December 31, 2012, 2013 and 2014, respectively.

Fluctuations in currency exchange rates may significantly impact our results of operations and may significantly affect the comparability of our results between financial periods.

Some of our operations are conducted by subsidiaries in foreign countries. The results of the operations and the financial position of these subsidiaries are reported in the relevant foreign currencies and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements. The main currency to which we are exposed, besides the U.S. dollar,

is the Argentine peso. The exchange rate between the Argentine peso and the U.S. dollar in recent years has fluctuated significantly and may continue to do so in the future. A depreciation of this currency against the U.S. dollar will decrease the U.S. dollar equivalent of the amounts derived from these operations reported in our consolidated financial statements and an appreciation of this currency will result in a corresponding increase in such amounts. In addition, currency fluctuations may affect the comparability of our results of operations between financial periods.

We incur currency exchange risk whenever we enter into a transaction using a currency other than the local currency of the transacting entity. Given the volatility of exchange rates, there can be no assurance that we will be able to effectively manage our currency exchange risks or that any volatility in currency exchange rates will not have a material adverse effect on our financial condition or results of operations.

Exchange controls implemented by the Argentine Government on the acquisition of U.S. dollars and other foreign currencies could have a material impact in our operations, business, financial condition and results of operations.

The Argentine government has implemented certain measures that control and restrict the ability of companies and individuals to exchange Argentine Pesos for foreign currencies. Those measures include, among other things, the requirement to obtain the prior approval from the Argentine Tax Authority and Central Bank of the foreign currency transaction (for example and without limitation, for the payment of non-Argentine goods and services, payment of principal and interest on non-Argentine debt and also payment of dividends to parties outside of the country), which approval process could delay, and eventually restrict, the ability to exchange Argentine pesos for other currencies, such as U.S. dollars. Those approvals are administered by the Argentine Central Bank through the Mercado Unico y Libre de Cambios, which is the only market where exchange transactions may be lawfully made. Further, restrictions also currently apply to the acquisition of any foreign currency for holding as cash within Argentina. There can be no assurance that the Central Bank of Argentina or other government agencies will not increase such controls or restrictions or make modifications to these regulations or establish more severe restrictions on currency exchange, making payments to foreign creditors or providers, dividend payments to foreign shareholders or require its prior authorization for such purposes. As a result, these exchange controls and restrictions could materially affect the business, financial condition and results of operations of our Argentine subsidiaries and could significantly impact our ability to comply with our foreign currency obligations, each of which could have a material adverse effect on our financial condition and results of operation.

Latin America, including Argentina, has experienced adverse economic conditions.

Latin American countries have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and economic instability. Currently, as a consequence of adverse economic conditions in global markets and diminishing commodity prices, many of the economies of Latin American countries have slowed their rates of growth, and some have entered mild recessions. The duration and severity of this slowdown is hard to predict and could adversely affect our business, financial condition, and results of operations. Additionally, certain countries have experienced or are currently experiencing severe economic crises, including Argentina, which may still have future effects.

During 2001 and 2002, Argentina went through a period of severe political, economic and social crisis. Among other consequences, the crisis resulted in the Argentine government defaulting on its foreign debt obligations, introducing emergency measures and numerous changes in economic policies that affected utilities and many other sectors of the economy, and suffering a significant real devaluation of the peso, which in turn caused numerous Argentine private sector debtors with foreign currency exposure to default on their outstanding debt.

In the first half of 2005, Argentina restructured part of the sovereign debt it defaulted; however, a number of creditors refused to approve the restructuring and litigation brought by these holdout creditors ensued. This litigation initiated by these holdout creditors has persisted to this day. On June 16, 2014, the U.S. Supreme Court rejected an Argentine appeal and decided to leave in place a lower court ruling in favor on the holdout creditors, which held that the Argentine government is prohibited from making payments on its restructured debt unless it also pays the holdout creditors, who have previously refused to accept its debt restructuring offers, the amount owed to them.

In July 2014, Argentina and the holdout creditors failed to reach an agreement on the restructuring of this debt. As a result, the Argentine government was prohibited from making certain bond payments. The full consequences of this on Argentina's political and economic landscape, and on the Company, are still unclear. We cannot provide any assurance that inflation, fluctuations in the value of the peso, the implementation of additional foreign currency restrictions and/or other future economic, social and political developments in Argentina resulting from this current Argentine sovereign debt crisis or the difficult economic conditions that currently exist in Argentina, over which we have no control, will not adversely affect our business, financial condition or results of operations, including our ability to pay our debts at maturity.

Our information systems are critical to our business and a failure of those systems could materially harm us.

We depend on our ability to store, retrieve, process and manage a significant amount of information, and to provide our treatment centers with efficient and effective accounting and scheduling systems. Our information systems require maintenance and upgrading to meet our needs, which could significantly increase our administrative expenses. We are currently upgrading multiple systems and migrating to other systems within our organization.

Furthermore, any system failure that causes an interruption in service or availability of our systems could adversely affect operations or delay the collection of revenues. Even though we have implemented network security measures, our servers are vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering. The occurrence of any of these events could result in interruptions, delays, the loss or corruption of data, or cessations in the availability of systems, all of which could have a material adverse effect on our financial position and results of operations and harm our business reputation.

The performance of our information technology and systems is critical to our business operations. Our information systems are essential to a number of critical areas of our operations, including:

Any failure of our information technology and systems could disrupt these operations, which could lead to a material adverse effect on our financial position and results of operations.

If we fail to effectively and timely implement electronic health record systems, our operations could be adversely affected.

As required by the American Recovery and Reinvestment Act of 2009, the DHHS has developed and is implementing an incentive payment program for eligible healthcare professionals that adopt and meaningfully use certified electronic health record ("EHR") technology. If our future treatment centers are unable to meet the requirements for participation in the incentive payment program, we will not be eligible to receive incentive payments that could offset some of the costs of implementing EHR systems. Further, beginning in 2015, eligible healthcare professionals that fail to demonstrate meaningful use of certified EHR technology will be subject to reduced payments from Medicare. While we have qualified at our existing facilities, failure to implement EHR systems effectively and in a timely manner at our recently acquired facilities or any future facilities would impact our eligibility to participate in these incentive programs and could have a material adverse effect on our financial position and results of operations.

Our financial results may suffer if we have to write-off goodwill or other intangible assets.

A significant portion of our total assets consist of goodwill and other intangible assets. Goodwill and other intangible assets, net of accumulated amortization, accounted for approximately 48.4% and 58.8% of the total assets on our balance sheet as of December 31, 2014 and 2013, respectively. We may not realize the value of our goodwill or other intangible assets. We expect to engage in additional transactions that will result in our recognition of additional goodwill or other intangible assets. We evaluate on a regular basis whether events and circumstances have occurred that indicate that all or a portion of the carrying amount of goodwill or other intangible assets may no longer be recoverable, and is therefore impaired. Under current accounting rules, any determination that impairment has occurred would require us to write-off the impaired portion of our goodwill or the unamortized portion of our intangible assets, resulting in a charge to our earnings. We have written off significant amounts of goodwill and intangible assets in the past, and any future write-off could have a material adverse effect on our financial condition and results of operations. For the year ended December 31, 2012, we wrote-off approximately $81.0 million in goodwill and leasehold improvements as a result of our interim impairment testing of our goodwill and indefinite-lived intangible assets. For the year ended December 31, 2013, there was no impairment of goodwill or intangible. For the year ended December 31, 2014, we wrote-off approximately $229.5 million in goodwill, and other investments as a result of our interim impairment testing of our goodwill.

We have addressed previous material weaknesses with respect to our internal controls and have identified additional material weaknesses in our internal controls, which could, if not sufficiently remediated, result in material misstatements in our consolidated financial statements.

In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2012, we identified a material weakness in internal controls relating to the valuation of goodwill. We have taken steps since then to remediate the internal control weakness, such that at December 31, 2013, our controls over the valuation of goodwill operated effectively. During 2013, we continued to review the underlying assumptions and inputs to the valuation specialists, as well as reviewed the underlying schedules related to the output of the calculation of the impairment values. As we further optimize and refine our goodwill valuation processes, we will review the related controls and may take additional steps to ensure that they remain effective and are integrated appropriately. While we have implemented the procedures described above and will continue to take further steps in the near future to strengthen further our internal controls, there can be no assurance that we will not identify control deficiencies in the future or that such deficiencies will not have a material impact on our operating results or consolidated financial statements.

In March 2014, we identified two material weaknesses in our internal communications regarding the identification of and accounting for the loss contingency, along with the related disclosure regarding certain subpoenas we received in February 2014, from the OIG. We have taken steps since then to remediate the internal control weaknesses, such that at September 30, 2014, our controls over the identification and accounting for loss contingencies operated effectively. We implemented a system of internal controls over financial reporting with respect to the accounting for loss contingencies, including the establishment of a disclosure committee and the assessment of future probable loss contingency accounting and methods. While we have implemented the procedures described above and will continue to take further steps in the near future to strengthen further our internal controls, there can be no assurance that we will not identify control deficiencies in the future or that such deficiencies will not have a material impact on our operating results or consolidated financial statements.

Effective February 10, 2014, we completed the acquisition of SFRO. The facilities acquired as part of the SFRO Acquisition utilize different information technology systems from our other facilities. We are currently integrating our internal control processes at SFRO. Although the SFRO acquisition has been excluded from our assessment of and conclusion on the effectiveness of our internal control over financial reporting, we have concluded there are material weakness related to the integration of SFRO into our control environment as of December 31, 2014. Specifically, we did not maintain appropriate segregation of duties over cash, adequate access controls with regard to financial applications, or adequate controls over the processing of expenditures. We are in the process of developing and implementing a remediation plan to address the material weaknesses related to the SFRO integration.

If our remedial measures are insufficient to address the material weakness or if additional material weaknesses or significant deficiencies in our internal control are discovered or occur in the future, we may be unable to accurately report our financial results, or report them within the required timeframes, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results in the future, which could cause investors and others to lose confidence in our financial statements, limit our ability to raise capital and could adversely affect our reputation, results of operations and consolidated financial condition.

A significant number of our treatment centers are concentrated in certain states, particularly Florida, which makes us sensitive to regulatory, economic and other conditions in those states.

Our Florida treatment centers accounted for approximately 39%, 39% and 45% of our freestanding radiation revenues during the years ended December 31 2012, 2013 and 2014, respectively. Our treatment centers are also concentrated in the states of California and North Carolina, which accounted for approximately 13.0% and 5.9%, respectively, of our freestanding radiation revenues for the year ended December 31, 2014. This concentration makes us particularly sensitive to regulatory requirements in those locations, including those related to false and improper claims, anti-kickback laws, self-referral laws, fee- splitting, corporate practice of medicine, antitrust, licensing and certificates of need, as well as economic and other conditions which could impact us. If our treatment centers in these states are adversely affected by changes in regulatory, economic or other conditions, our revenue and profitability may decline.

Our operations in Florida and other areas could be disrupted or damaged by hurricanes and other natural disasters.

Florida is susceptible to hurricanes, and as of December 31, 2014, we have 62 radiation treatment centers located in Florida. Our Florida centers accounted for approximately 39%, 39% and 45% of our freestanding radiation revenues during the years ended December 31 2012, 2013 and 2014, respectively. Our California centers are located in areas that are known to experience earthquakes from time to time, some of which have been severe. Our Florida treatment centers, our California treatment centers and any of our other treatment centers located in other areas that may be affected by a hurricane,

earthquake or other natural disaster could be subject to significant disruptions and/or damage in the future which could have an adverse effect on our business and financial results. We carry property damage and business interruption insurance on our facilities, but there can be no assurance that it would be adequate to cover all such losses.

We have potential conflicts of interest relating to our related party transactions which could harm our business.

We have potential conflicts of interest relating to existing agreements we have with certain of our directors, executive officers and equityholders. In 2012, 2013 and 2014, we paid an aggregate of $21.6 million, $22.9 million and $28.8 million, respectively, under certain of our related party agreements, including leases, and malpractice insurance premiums and we received $62.5 million, $72.1 million and $75.8 million, respectively, pursuant to our other services agreements with related parties. Potential conflicts of interest can exist if a related party has to make a decision that has different implications for us and the related party. If a dispute arises in connection with any of these agreements, if not resolved satisfactorily to us, our business could be harmed. These agreements include:

In California, Maryland, Massachusetts, Michigan, Nevada, New York and North Carolina, we have administrative services agreements with professional corporations that are owned by certain of our directors, executive officers and equityholders who own interests in these professional corporations. While we have stock transfer agreements corresponding to our administrative services agreements in place in all states except New York that provide us with the ability to designate qualified successor physician owners of the shares held by the physician owners of these professional corporations upon the occurrence of certain events, there can be no assurance that we will be able to enforce them under the laws of the respective states or that they will not be challenged by regulatory agencies. Such stock transfer agreements do not exist with the practices located in California, Florida and Indiana that are affiliated with OnCure. Potential conflicts of interest may arise in connection with the administrative services agreements that may have materially different implications for us and the professional corporations and there can be no assurance that it will not harm us. For example, we bill for such services either on a fixed basis, percentage of net collections basis, or on a per treatment basis, depending on the particular state requirements and certain of these arrangements are subject to renegotiation on an annual basis. We may be unable to renegotiate acceptable fees, in which event many of the administrative services agreements provide for binding arbitration. If we are unsuccessful in renegotiations or arbitration this could negatively impact our operating margins or result in the termination of our administrative services agreements.

Additionally, we lease 36 of our treatment centers from ownership groups that consist of certain of our directors, executive officers and equityholders. Before we enter into these leases, we compare rates and terms with our standard documentation as well as rely on third-party fair market value reports for relevant markets. We may be unable to renegotiate these leases when they come up for renewal on terms acceptable to us, if at all.

In October 2003, we replaced our existing third-party medical malpractice insurance coverage with coverage we obtained from an insurance entity which is owned by certain of our directors, executive officers and equityholders. After soliciting various third-party proposals for malpractice insurance

coverage on an annual basis, we renewed this coverage in 2012, 2013 and 2014, with the approval of the Audit and Compliance Committee of the Company's Board of Directors. We may be unable to renegotiate this coverage at acceptable rates and comparable coverage may not be available from third-party insurance companies. If we are unsuccessful in renewing our malpractice insurance coverage, we may not be able to continue to operate without being exposed to substantial risks of claims being made against us for damage awards we are unable to pay.

Related party transactions between us and any related party are subject to approval by the Audit and Compliance Committee on behalf of the Company's Board of Directors or by the Company's Board of Directors, and disputes are handled by the Company's Board of Directors. There can be no assurance that the above or any future conflicts of interest will be resolved in our favor. If not resolved in our favor, such conflicts could harm our business. For a further description of our related party transactions, see "Item 13. Certain Relationships and Related Transactions, and Director Independence."

In recent years, accreditation of facilities and the establishment of a national error reporting database have been under consideration.

The Chairman of the ACR called for the required accreditation of all facilities which bill Medicare for advanced medical imaging and radiation oncology services, including those in hospitals at a congressional hearing on medical radiation. Federal legislation was also introduced in March 2013, which requires certain personnel furnishing medical imaging examinations or radiation therapy to obtain state licensure and certification from certain approved certification organizations, and directs the DHHS to establish a program for designating and publishing a list of such certification organizations.

Of our 144 U.S. treatment centers, 98 have received or are in process of receiving ACR accreditation. In addition to a deep physics infrastructure and internal maintenance department, we have recently begun to utilize Gamma Function as a broad application radiation safety monitoring tool to minimize potential errors in our radiation therapy treatments. While we continue to improve upon safety measures aimed at minimizing errors in radiation therapy treatment in accordance with our internal protocols as well as the mandates of organizations like ACR, we cannot assure you that any further critical press and government scrutiny will not adversely affect our business and results of operations.

Our financial results could be adversely affected by claims brought against our facilities, the increasing costs of professional liability insurance and by successful malpractice claims.

We could be subject to litigation relating to our business practices, including claims and legal actions by patients and others in the ordinary course of business alleging malpractice, product liability or other legal theories. We are also exposed to the risk of professional liability and other claims against us and our radiation oncologists and other physicians and professionals arising out of patient medical treatment at our treatment centers. Our risk exposure as it relates to our non-radiation oncology physicians could be greater than with our radiation oncologists to the extent such non-radiation oncology physicians are engaged in diagnostic activities. For a discussion of current pending material litigation against us, see "Item 3. Legal Proceedings." Malpractice claims, if successful, could result in substantial damage awards which might exceed the limits of any applicable insurance coverage. Insurance against losses of this type can be expensive and insurance premiums may increase in the near future. Insurance rates vary from state to state, by physician specialty and other factors. The rising costs of insurance premiums, as well as successful malpractice claims against us or one of our physicians, could have a material adverse effect on our financial position and results of operations.

It is also possible that our excess liability and other insurance coverage will not continue to be available at acceptable costs or on favorable terms. In addition, our insurance does not cover all potential liabilities arising from governmental fines and penalties, indemnification agreements and

certain other uninsurable losses. For example, from time to time we agree to indemnify third parties, such as hospitals and clinical laboratories, for various claims that may not be covered by insurance. As a result, we may become responsible for substantial damage awards that are uninsured.

If payment for claims exceed actuarially determined estimates or are not covered by insurance, or if reinsurers, if any, fail to meet their obligations, our results of operations and financial position could be adversely affected.

We have $967.1 million of total debt outstanding as of December 31, 2014. Our high level of debt could have adverse effects on our business and financial condition. Specifically, our high level of debt could have important consequences, including the following:

Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control, including the availability of financing in the international banking and capital markets. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs. If we are unable to meet our debt obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants which could further restrict our business operations.

Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage.

We will have the right to incur substantial additional indebtedness in the future. The terms of our $90 million term loan facility (the "Term Facility") and our $100 million revolving credit facility (the "Revolving Credit Facility" and together with the Term Facility, the "Credit Facilities") and the indentures governing our notes restrict, but do not in all circumstances, prohibit us from doing so. Under the instruments governing our debt, we are permitted to incur substantial additional debt. Any additional debt may be governed by indentures or other instruments containing covenants that could place restrictions on the operation of our business and the execution of our business strategy in addition to the restrictions on our business already contained in the agreements governing our existing debt. Because any decision to issue debt securities or enter into new debt facilities will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future debt financings and whether we may be required to accept unfavorable terms for any such financings.

The indentures governing our notes and our Credit Facilities impose significant operating and financial restrictions on our Company and our subsidiaries, which may prevent us from capitalizing on business opportunities.

The indentures governing our notes and our Credit Facilities impose significant operating and financial restrictions on us. These restrictions limit our ability, among other things, to:

As a result of these covenants and restrictions, we will be limited in how we conduct our business and we may be unable to raise additional debt or other financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

We are indirectly owned and controlled by Vestar and its interests may conflict with yours as a noteholder.

Vestar indirectly controls approximately 80% of the Class A voting equity units of 21^st Century Oncology Investments, LLC ("21CI"), which controls us, and which in turn controls our subsidiaries. As a result, they effectively have control over major decisions regardless of whether noteholders believe that any such decisions are in their own best interests. The interests of Vestar as an equity holder may conflict with the interests of a noteholder. Vestar may have an incentive to increase the value of their investment or cause us to distribute funds at the expense of our financial condition and affect our ability to make payments on the notes. In addition, Vestar may have an interest in pursuing acquisitions, divestitures, financings or other transactions that it believes could enhance its equity investments even though such transactions might involve risks to you as a noteholder.

On September 26, 2014, in connection with an equity investment in the Company made by Canada Pension Plan Investment Board ("CPPIB" or the "Majority Preferred Holders"), we entered into a Second Amended and Restated Securityholders Agreement (the "Amended Securityholders Agreement"). The Amended Securityholders Agreement amends and restates the existing securityholders agreement such that, among other things, the Company's Board of Directors is comprised of (i) two managers nominated by CPPIB, (ii) three managers nominated by funds affiliated with Vestar and (iii) Dr. Daniel E. Dosoretz and one manager he nominated after consultation with Vestar and CPPIB, subject to certain ongoing security ownership provisions.

The holders of a majority of the outstanding preferred stock will have customary consent rights and will be entitled to vote together with the holders of the Company's common stock on an as-converted basis under certain circumstances.

Our executive and administrative offices are located in Fort Myers, Florida. These offices contain approximately 79,000 square feet of space. These offices will be adequate for our current primary needs, but we also believe that we will require significant additional space to meet our future needs and such future expansion is in the preliminary stages.

Our radiation treatment centers typically range in size from 5,000 to 12,000 square feet. As of December 31, 2014 we provided radiation therapy services in 180 treatment centers in 16 states and in Latin America, Central America, Mexico, and the Caribbean. We own the real estate on which two of our treatment centers are located. We lease land and space at 167 treatment center locations, of which in 36 of these locations, certain of our directors, executive officers and equityholders have an ownership interest. These leases expire at various dates between 2015 and 2044 and are typically structured with renewal options. Also, 11 of our treatment center locations are operated pursuant to professional and other service arrangements. We consider all of our offices and treatment centers to be well-suited to our present requirements. However, as we expand to additional treatment centers, or where additional capacity is necessary in a treatment center, additional space will be obtained where feasible. The following list summarizes the number of radiation treatment centers operated in each state, country, or region:

State/County/Region		State/County/Region

Alabama	2	North Carolina	13
Arizona	5	Rhode Island	3
California	22	South Carolina	1
Florida	62	West Virginia	3
Indiana	4	Argentina	26
Kentucky	4	Costa Rica	2
Maryland	4	Dominican Republic	3
Massachusetts	2	El Salvador	1
Michigan	6	Guatemala	2
Nevada	4	Mexico	2
New Jersey	4
New York	5	Total	180

We operate in a highly regulated and litigious industry. As a result, we are involved in disputes, litigation, and regulatory matters incidental to our operations, including governmental investigations, personal injury lawsuits, employment claims, and other matters arising out of the normal conduct of business.

Healthcare companies are subject to numerous types of investigations by various governmental agencies. Further, under the False Claims Act, private parties have the right to bring "qui tam," or "whistleblower," suits against companies that knew or should have known they were submitting false claims for payments to, or improperly retain overpayments from, the government. The False Claims Act imposes penalties of not less than $5,500 and not more than $11,000, plus three times the amount of damages which the government sustains because of the submission of a false claim. If the Company is found to have violated the False Claims Act, it could also be excluded from participation in Medicare, Medicaid and other federal healthcare programs. Some states have adopted similar state whistleblower and false claims provisions. Certain of our facilities have received, and other facilities may receive, inquiries from federal and state agencies related to potential False Claims Act liability. Depending on whether the underlying conduct in these or future inquiries or investigations could be considered

systemic, their resolution could have a material adverse effect on our consolidated financial position, results of operations and liquidity.

Governmental agencies and their agents, such as the Medicare Administrative Contractors, as well as the OIG, CMS and state Medicaid programs, conduct audits of our healthcare operations. Private payers may conduct similar post-payment audits, and we also perform internal audits and monitoring. Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material adverse effect on our consolidated financial position, results of operations and liquidity.

On February 18, 2014, we were served with subpoenas from the OIG acting with the assistance of the U.S. Attorney's Office for the Middle District of Florida who together have requested the production of medical records of patients treated by certain of our physicians for the period from January 2007 to present regarding the ordering, billing and medical necessity of certain laboratory services as part of a civil False Claims Act investigation, as well as our agreements with such physicians. The laboratory services under review relate to the utilization of FISH laboratory tests ordered by certain of our employed physicians and performed by us. We were served with another subpoena from the OIG on January 22, 2015, requesting additional documents related to this matter for the period from January 1, 2005 up through the production of documents responsive to the February 2014 subpoena. We have recorded a liability for this matter of approximately $4.7 million and $5.1 million that is included in accrued expenses in our consolidated balance sheet as of December 31, 2013 and 2014, respectively. The recorded estimate is based on a probability weighted analysis of the low-end of the range of the liability that considers the facts currently known by us, our review of qualitative and quantitative factors, and our assessment of potential outcomes under different scenarios used to assess our exposure which may be used to determine a potential settlement should we decide not to litigate. Our recording of a liability related to this matter is not an admission of guilt. Depending on how this matter progresses, our exposure may be less than or more than the liability recorded and we will continue to reassess and adjust the liability until this matter is settled. Our estimate of the high-end of the range of exposure is $10.3 million.

We received two Civil Investigative Demands ("CIDs"), one on October 22, 2014 addressed to 21C and one on October 31, 2014 addressed to SFRO, from the DOJ pursuant to the False Claims Act. The CIDs requested information concerning allegations that we knowingly billed for services that were not medically necessary and focused on Gamma services (which are dosimetry calculations performed during the course of radiation therapy). The CIDs cover the period from January 1, 2009 to the present. Among other information requests, the CIDs request certain documents and information related to the administration of radiation therapy; selection of various radiation therapies and Gamma services. Our total billings to federal health care programs including Medicare, Medicare Advantage and Medicaid for Gamma services from January 1, 2009 to December 31, 2014 are approximately $68.4 million. The dispute involved the training protocols of certain staff in the utilization of Gamma and was limited to early implementation and start-up activities at new facility locations across the country. We have not recorded a liability for this matter as of December 31, 2014.

In addition to the matters described below, we are involved in various legal actions and claims that arise in the ordinary course of our business. We do not believe that an adverse decision in any of these matters would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

We are a direct wholly owned subsidiary of 21CI. Accordingly, there is no public trading market for our common stock.

We have not paid cash dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future.

Our senior secured credit facilities and the indentures governing our notes generally prohibit the payment of dividends by us on shares of our common stock, with certain limited exceptions.

The following table lists the number of securities of 21CI available for issuance as of December 31, 2014 under the 21CI equity-based incentive plan, as amended. For a description of the plan, please see note 20 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K/A.

Plan Category			Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding Securities Reflected in Column(a))

Equity compensation plans approved by security holders			Non-voting preferred equity units: 2,924
			Voting Class A equity units: 51,854
			Non-voting MEP equity units: 274,634
	N/A	N/A	Non-voting Class M equity units: 33,500
			Non-voting Class O equity units: 27,194
Equity compensation plans not approved by security holders	N/A	N/A	N/A
TOTAL			Non-voting preferred equity units: 2,924
			Voting Class A equity units: 51,854
			Non-voting MEP equity units: 274,634
	—	—	Non-voting Class M equity units: 33,500
			Non-voting Class O equity units: 27,194

On September 26, 2014, we issued to CPPIB, in a private placement, an aggregate of 385,000 newly issued shares of our Series A Convertible Redeemable Preferred Stock, par value $0.001 per share (the "Series A Preferred Stock"), for a purchase price of $325.0 million.

The issuance of the securities described above were deemed to be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), under either (1) Section 4(a)(2) of the

Securities Act as transactions by an issuer not involving any public offering or (2) Regulation S under the Securities Act as transactions outside the United States to non-U.S. persons. CPPIB is not a "U.S. person" within the meaning of Regulation S under the Securities Act or acting for the account or benefit of U.S. persons.

As further described in Note 14 to our consolidated financial statements, the Series A Preferred Stock is mandatorily convertible into common stock, par value $0.01 per share, of the Company upon the occurrence of a qualifying initial public offering of the Company or a qualifying merger, in each case at the conversion prices set forth in the Certificate of Designations of Series A Convertible Preferred Stock (the "Certificate of Designations"). The Series A Preferred Stock also becomes convertible on the tenth anniversary of issuance at the option of either the Company or CPPIB. Absent a qualifying initial public offering or qualifying merger, the conversion price shall be determined upon appraisal.

The selected consolidated financial data presented below should be read in conjunction with "Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Item 8, Consolidated Financial Statements and Supplementary Data," included elsewhere in this Form 10-K/A. We have restated certain consolidated financial data presented in this Form 10-K/A as of, and for, the years ended, December 31, 2014, 2013 and 2012. The restatement reflects adjustments related to revenue recognition, medical malpractice, EHR incentive income, restatement tax impacts and other items identified by management, as further described in Note 2, "Restatement of Previously Issued Consolidated Financial Statements," included in "Part II—Item 8—Consolidated Financial Statements and Supplemental Data."

As discussed in the Explanatory Note to this Form 10-K/A, we are restating our audited consolidated financial statements for the fiscal years ended December 31, 2014, 2013 and 2012, and the information below with respect to such fiscal years to reflect the adjustments made as part of such

restatement. In addition, we have determined that errors existed in the Company's previously issued financial statements for the fiscal years ended December 31, 2011 and 2010.

(in thousands):	Year ended December 31, 2010			Year ended December 31, 2011			Year ended December 31, 2012			Year ended December 31, 2013			Year ended December 31, 2014

	(Restated)			(Restated)			(Restated)			(Restated)			(Restated)
Consolidated Statements of Operations and Comprehensive Loss Data:			(2)			(2)			(1)			(1)			(1)
Net patient service revenue	$	535,913		$	635,640		$	683,781		$	707,616		$	938,488
Management fees		—			—			—			11,139			67,012
Other revenue		7,782			7,298			9,299			10,168			12,682



Total revenues		543,695			642,938			693,080			728,923			1,018,182
Salaries and benefits		282,302			326,782			372,656			409,352			545,025
Medical supplies		43,027			51,838			61,589			64,640			97,367
Facility rent expenses		27,885			33,375			39,802			45,565			63,111
Other operating expenses		27,103			33,992			38,988			45,629			61,784
General and administrative expenses		65,698			82,020			83,314			107,395			135,819
Depreciation and amortization		46,346			54,024			64,814			65,096			86,583
Provision for doubtful accounts		8,831			16,117			16,916			12,146			19,253
Interest expense, net		58,505			60,656			77,494			86,747			113,279
Electronic health records incentive income		—			—			—			—			(93	)
Fair value adjustment of earn-out liability		—			—			1,219			130			1,627
Loss on sale of assets of a radiation treatment center		1,903			—			—			—			—
Gain on the sale of an interest in a joint venture		—			—			—			(1,460	)		—
Loss on the sale/disposal of property and equipment		733			235			748			336			119
Loss on sale leaseback transaction		—			—			—			313			135
Loss on investments		—			250			—			—			—
Gain on fair value adjustment of previously held equity interest		—			(234	)		—			—			—
Loss on foreign currency transactions		—			84			241			1,138			678
Loss (gain) on foreign currency derivative contracts		—			672			1,165			467			(4	)
Early extinguishment of debt		10,947			—			4,473			—			8,558
Impairment loss		97,916			360,639			81,021			—			229,526
Equity initial public offering expenses		—			—			—			—			4,905
Fair value adjustment of embedded derivative		—			—			—			—			837



Total expenses		671,196			1,020,450			844,440			837,494			1,368,509
Loss before income taxes and equity interest loss in joint ventures		(127,501	)		(377,512	)		(151,360	)		(108,571	)		(350,327	)
Income tax (benefit) expense		(12,810	)		(26,635	)		3,477			(23,068	)		2,319



Loss before equity in net loss of joint ventures		(114,691	)		(350,877	)		(154,837	)		(85,503	)		(352,646	)
Equity in net earnings/(loss) of joint ventures		1,001			(1,036	)		(817	)		(454	)		(50	)



Net loss		(113,690	)		(351,913	)		(155,654	)		(85,957	)		(352,696	)
Net income attributable to noncontrolling interests		(1,698	)		(3,475	)		(3,053	)		(1,838	)		(4,595	)



Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(115,388	)	$	(355,388	)	$	(158,707	)	$	(87,795	)	$	(357,291	)



Balance Sheet Data (at end of period):
Cash and cash equivalents		13,977			9,850			15,076			17,128			99,082
Working capital(3)		19,473			14,477			17,909			(189	)		55,816
Total assets		1,238,976			999,781			926,782			1,130,353			1,153,444
Finance obligations		8,568			14,266			17,192			20,650			24,043
Total debt		598,831			679,033			762,368			991,666			967,121
Total equity (deficit)		506,315			172,848			9,364			(95,601	)		(437,601	)
Other Financial Data:
Ratio of earnings to fixed charges(4)		—			—			—			—			—
Deficiency to cover fixed charges(5)		129,193			379,318			153,586			109,934			370,791

The effects of the restatement of the Company's Selected Financial Data are as follows:

	Year Ended December 31,

	2014									2013
(in thousands):	As Reported(1)			Adjustments			As Restated			As Reported(1)			Adjustments			As Restated
Revenues:
Net patient service revenue	$	946,897		$	(8,409	)	$	938,488		$	715,999		$	(8,383	)	$	707,616
Management fees		67,012			—			67,012			11,139			—			11,139
Other revenue		12,513			169			12,682			9,378			790			10,168



Total revenues		1,026,422			(8,240	)		1,018,182			736,516			(7,593	)		728,923
Salaries and benefits		545,025			—			545,025			409,352			—			409,352
Medical supplies		97,367			—			97,367			64,640			—			64,640
Facility rent expenses		63,048			63			63,111			45,565			—			45,565
Other operating expenses		61,735			49			61,784			45,629			—			45,629
General and administrative expenses		135,257			562			135,819			106,887			508			107,395
Depreciation and amortization		86,701			(118	)		86,583			65,195			(99	)		65,096
Provision for doubtful accounts		18,713			540			19,253			12,146			—			12,146
Interest expense, net		113,279			—			113,279			86,747			—			86,747
Electronic health records incentive income		(2,783	)		2,690			(93	)		(1,698	)		1,698			—
Impairment loss		229,526			—			229,526			—			—			—
Early extinguishment of debt		8,558			—			8,558			—			—			—
Equity initial public offering expenses		4,905			—			4,905			—			—			—
Loss on sale leaseback transaction		135			—			135			313			—			313
Fair value adjustment of earn-out liability		1,627			—			1,627			130			—			130
Fair value adjustment of embedded derivative		837			—			837			—			—			—
Gain on the sale of an interest in a joint venture		—			—			—			(1,460	)		—			(1,460	)
Loss on the sale/disposal of property and equipment		—			119			119			—			336			336
Loss on foreign currency transactions		557			121			678			1,283			(145	)		1,138
Loss (gain) on foreign currency derivative contracts		(4	)		—			(4	)		467			—			467



Total expenses		1,364,483			4,026			1,368,509			835,196			2,298			837,494



Loss before income taxes and equity interest loss in joint ventures		(338,061	)		(12,266	)		(350,327	)		(98,680	)		(9,891	)		(108,571	)
Income tax expense (benefit)		5,159			(2,840	)		2,319			(20,432	)		(2,636	)		(23,068	)



Loss before equity in net loss of joint ventures		(343,220	)		(9,426	)		(352,646	)		(78,248	)		(7,255	)		(85,503	)
Equity in net loss of joint ventures		—			(50	)		(50	)		—			(454	)		(454	)



Net loss		(343,220	)		(9,476	)		(352,696	)		(78,248	)		(7,709	)		(85,957	)
Net income attributable to noncontrolling interests		(6,030	)		1,435			(4,595	)		(1,966	)		128			(1,838	)



Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(349,250	)	$	(8,041	)	$	(357,291	)	$	(80,214	)	$	(7,581	)	$	(87,795	)

	Year Ended December 31,

	2012									2011
(in thousands):	As Reported(1)			Adjustments			As Restated			As Reported(1)			Adjustments			As Restated
Revenues:
Net patient service revenue	$	686,216		$	(2,435	)	$	683,781		$	638,690		$	(3,050	)	$	635,640
Other revenue		7,735			1,564			9,299			6,027			1,271			7,298



Total revenues		693,951			(871	)		693,080			644,717			(1,779	)		642,938
Salaries and benefits		372,656			—			372,656			326,782			—			326,782
Medical supplies		61,589			—			61,589			51,838			—			51,838
Facility rent expenses		39,802			—			39,802			33,375			—			33,375
Other operating expenses		38,988			—			38,988			33,992			—			33,992
General and administrative expenses		82,236			1,078			83,314			81,688			332			82,020
Depreciation and amortization		64,893			(79	)		64,814			54,084			(60	)		54,024
Provision for doubtful accounts		16,916			—			16,916			16,117			—			16,117
Interest expense, net		77,494			—			77,494			60,656			—			60,656
Electronic health records incentive income		(2,256	)		2,256			—			—			—			—
Impairment loss		81,021			—			81,021			360,639			—			360,639
Early extinguishment of debt		4,473			—			4,473			—			—			—
Equity initial public offering expenses		—			—			—			—			—			—
Loss on sale leaseback transaction		—			—			—			—			—			—
Fair value adjustment of earn-out liability		1,219			—			1,219			—			—			—
Fair value adjustment of embedded derivative		—			—			—			—			—			—
Gain on fair value adjustment of previously held equity interest		—			—			—			(234	)		—			(234	)
Loss on the sale/disposal of property and equipment		—			748			748			—			235			235
Loss on foreign currency transactions		339			(98	)		241			106			(22	)		84
Loss on investments		—			—			—			250			—			250
Loss (gain) on foreign currency derivative contracts		1,165			—			1,165			672			—			672



Total expenses		840,535			3,905			844,440			1,019,965			485			1,020,450



Loss before income taxes and equity interest loss in joint ventures		(146,584	)		(4,776	)		(151,360	)		(375,248	)		(2,264	)		(377,512	)
Income tax expense (benefit)		4,545			(1,068	)		3,477			(25,365	)		(1,270	)		(26,635	)



Loss before equity in net loss of joint ventures		(151,129	)		(3,708	)		(154,837	)		(349,883	)		(994	)		(350,877	)
Equity in net loss of joint ventures		—			(817	)		(817	)		—			(1,036	)		(1,036	)



Net loss		(151,129	)		(4,525	)		(155,654	)		(349,883	)		(2,030	)		(351,913	)
Net income attributable to noncontrolling interests		(3,079	)		26			(3,053	)		(3,558	)		83			(3,475	)



Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(154,208	)	$	(4,499	)	$	(158,707	)	$	(353,441	)	$	(1,947	)	$	(355,388	)

	Year Ended December 31,

	2010
(in thousands):	As Reported(1)			Adjustments			As Restated
Revenues:
Net patient service revenue	$	535,913		$	—		$	535,913
Other revenue		8,050			(268	)		7,782



Total revenues		543,963			(268	)		543,695
Salaries and benefits		282,302			—			282,302
Medical supplies		43,027			—			43,027
Facility rent expenses		27,885			—			27,885
Other operating expenses		27,103			—			27,103
General and administrative expenses		65,798			(100	)		65,698
Depreciation and amortization		46,346			—			46,346
Provision for doubtful accounts		8,831			—			8,831
Interest expense, net		58,505			—			58,505
Loss on sale of assets of a radiation treatment center		1,903			—			1,903
Loss on the sale/disposal of property and equipment		—			733			733
Early extinguishment of debt		10,947			—			10,947
Impairment loss		97,916			—			97,916



Total expenses		670,563			633			671,196



Loss before income taxes and equity interest loss in joint ventures		(126,600	)		(901	)		(127,501	)
Income tax expense (benefit)		(12,810	)		—			(12,810	)



Loss before equity in net loss of joint ventures		(113,790	)		(901	)		(114,691	)
Equity in net income of joint ventures		—			1,001			1,001



Net loss		(113,790	)		100			(113,690	)
Net income attributable to noncontrolling interests		(1,698	)		—			(1,698	)



Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(115,488	)	$	100		$	(115,388	)

The table below summarizes the effects of the cumulative Restatement adjustments on previously reported net loss for the years ended December 31, 2014, 2013, and 2012, with the adjustments categorized by the nature of the error (in thousands):

	2014			2013			2012

Net loss, as reported	$	(343,220	)	$	(78,248	)	$	(151,129	)
Revenue recognition:
MDL revenue		(8,190	)		(8,597	)		(2,221	)
Other revenues		(219	)		214			(214	)

Total revenue recognition		(8,409	)		(8,383	)		(2,435	)
Medical malpractice		(148	)		(255	)		(913	)
EHR incentive income		(2,690	)		(1,698	)		(2,256	)
Other adjustments		(781	)		174			143

Net, pre-tax, impact of adjustments		(12,028	)		(10,162	)		(5,461	)
Restatement tax impacts		2,552			2,453			936

Net, after-tax, impact of adjustments		(9,476	)		(7,709	)		(4,525	)

Net loss, as restated	$	(352,696	)	$	(85,957	)	$	(155,654	)

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

The following discussion and analysis should be read in conjunction with the "Selected Financial Data" and the consolidated financial statements and related notes included elsewhere in this Form 10-K/A. This section of this Form 10-K/A contains forward-looking statements that involve substantial risks and uncertainties, such as statements about our plans, objectives, expectations and intentions. We use words such as "expect," "anticipate," "plan," "believe," "seek," "estimate," "intend," "future" and similar expressions to identify forward-looking statements. In particular, statements that we make in this section relating to the sufficiency of anticipated sources of capital to meet our cash requirements are forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including as a result of some of the factors described below and in the section titled "Risk Factors." You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-K/A.

As discussed below and in "Item 8. Financial Statements and Supplementary Data and Notes to the Consolidated Financial Statements—Note 2—Restatement of the Consolidated Financial Statements," we have restated our previously issued audited consolidated financial statements for the fiscal years ended December 31, 2014, 2013 and 2012 and our unaudited condensed quarterly periods for the fiscal years 2014 and 2013. Accordingly, the Management's Discussion and Analysis of Financial Condition and Results of Operations set forth below has been revised for the effects of the restatement.

The following discussion and analysis addresses the results of our operations which are based upon the consolidated financial statements included herein, which have been prepared in accordance with U.S. GAAP. This discussion should be read in conjunction with "Forward-Looking Statements" and our consolidated financial statements and notes thereto appearing elsewhere in this Form 10-K/A. This discussion and analysis also addresses our liquidity, financial condition and other matters.

As described further below and herein, this Form 10-K/A reflects the restatement of our consolidated financial statements as of and for each of the years ended December 31, 2014, 2013 and 2012. The restatement of the Original Form 10-K reflected in this Amendment corrects errors principally related to:

MDL Argentina, the largest component of MDLLC, represented approximately 75% of the total revenue of MDLLC in fiscal year ended December 31, 2014. MDL Argentina recognized revenue prior to obtaining substantive evidence that the related services had been rendered. As these revenue recognition practices are not in accordance with US GAAP, MDL Argentina restated revenue by deferring revenue recognition on all of its revenue until the services had been rendered which generally occurs upon invoicing (negotiations, as applicable, with the insurance company are also complete at invoicing). Accordingly, Management has determined that, net patient revenue should be recognized at invoicing to the insurer. As a result of the adjustments to the amounts of revenue recognized during each period and certain other account receivable reconciliation issues identified, the receivables recognized during each period were also appropriately adjusted.

The Company determined that its medical malpractice liabilities had errors which occurred due to not including an actuarial estimate of estimated future case development that was required in addition to the case reserves established for open reported claims and certain physicians that were incorrectly excluded from the medical malpractice liabilities estimate, for which the Company is at risk. The

Company also corrected the improper classification of the medical malpractice liability between short term liabilities and long term liabilities on the consolidated balance sheets.

The Company became aware that the core measures required for attestation to CMS were not supported with the underlying medical records for the Company's employed physicians. As a result, EHR incentive income was improperly recognized as a result of which payments previously received will be refunded to CMS. The Company corrected incentive income to properly reflect the amounts earned during the respective periods including recognizing the refund payable.

The Company has also made other adjustments to correct other errors in various financial statement line items for the following reasons:

This Management's Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatement adjustments. See Note 2 to our consolidated financial statements, which accompany the financial statements in Item 8 of this Form 10-K/A, for further detail regarding the restatement adjustments. In addition, for further information regarding the matters leading to the restatement and related findings refer to our disclosure controls and procedures and internal control over financial reporting, within Part II, Item 9A, "Controls and Procedures" of this Amendment.

and 2013 (unaudited). The classification corrections alone did not affect its net income on its historical, as reported, consolidated financial statements. Below is a summary of the classification corrections:

The Company's historical, as reported, consolidated cash flow statements have been adjusted to conform to these classification corrections.

Management reviewed and concluded that errors existed in the Company's previously issued financial statements with respect to the fiscal years ended December 31, 2014, 2013, and 2012, and our unaudited condensed quarterly periods for the fiscal years 2014 and 2013. In addition, other errors have been identified in the Company's previously issued consolidated financial statements for the fiscal years ended December 31, 2011, and 2010, for which the Company is including restated financial information for the fiscal years ended December 31, 2011, and 2010 in the "Selected Financial Data" table of this Form 10-K/A. Adjustments prior to January 1, 2012 have been recognized as a cumulative adjustment to beginning retained earnings in the consolidated statements of changes in shareholders' equity included in the consolidated financial statements contained herein.

As part of the process of completing our Restatement, we have adopted and implemented the appropriate GAAP accounting treatment for our business. We evaluated the facts and circumstances that resulted in accounting errors and related control deficiencies, and we have initiated remediation efforts to address the material weaknesses in our control environment that were identified by management during the Restatement. See "Remediation of Material Weakness in Internal Control Over Financial Reporting" in Item—9A—Controls and Procedures.

Additional information, including the adjustments required to correct the errors in the consolidated financial statements as a result of completing the Restatement, is described in Note 2, Restatement of Previously Issued Consolidated Financial Statements, in "Part II—Item 8—Financial Statements and Supplementary Data." Accordingly, this MD&A reflects the effects of the Restatement.

As set forth in more detail below, the restatement of the Company's consolidated financial statements included in this Form 10-K/A decreased total revenues by $8.2 million, $7.6 million and $0.9 million in 2014, 2013 and 2012, respectively. The net loss increased by $9.5 million, $7.7 million and $4.5 million in 2014, 2013 and 2012, respectively. The opening retained deficit and total shareholders' deficit at January 1, 2012 was increased by $3.8 million and $4.5 million, respectively.

We are the leading global, physician-led provider of ICC services. Our physicians provide comprehensive, academic quality, cost-effective coordinated care for cancer patients in personal and convenient community settings. We believe we offer a powerful value proposition to patients, hospital systems, payers and risk-taking physician groups by delivering high quality care and good clinical

outcomes at lower overall costs through outpatient settings, clinical excellence, physician coordination and scaled efficiency.

We operate the largest integrated network of cancer treatment centers and affiliated physicians in the world which, as of December 31, 2014, was comprised of approximately 794 community-based physicians in the fields of radiation oncology, medical oncology, breast, gynecological and general surgery, and urology. Our physicians provide medical services at approximately 391 locations, including our 180 radiation therapy centers. Of the 180 treatment centers, 34 treatment centers were internally developed and 135 were acquired (including three which were transitioned from professional and other arrangements to freestanding). 50 radiation therapy centers operate in partnership with health systems and other clinics and community-based sites. Our 144 cancer treatment centers in the United States are operated predominantly under the 21^st Century Oncology brand and are strategically clustered in 31 local markets in 16 states: Alabama, Arizona, California, Florida, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, South Carolina, Rhode Island, and West Virginia. Our 36 international treatment centers in Latin America are operated under the 21^st Century Oncology brand or a local brand and, in many cases, are operated with local minority partners, including hospitals. We hold market leading positions in the majority of our local markets and continue to expand our affiliation with physician specialties in closely related areas including gynecological, breast and surgical oncology, medical oncology and urology in a number of our local markets to strengthen our clinical working relationships and to evolve from a freestanding radiation oncology centric model to an ICC model.

We use a number of metrics to assist management in evaluating financial condition and operating performance, and the most important follow:

Our revenue growth is primarily driven by expanding the number of our centers, optimizing the utilization of advanced technologies at our existing centers and benefiting from demographic and population trends in most of our local markets and by providing value added services to other healthcare and provider organizations. New centers are added or acquired based on capacity, demographics and competitive considerations.

The average revenue per treatment is sensitive to the mix of services used in treating a patient's tumor. The reimbursement rates set by Medicare and commercial payers tend to be higher for more advanced treatment technologies, reflecting their higher complexity. A key part of our business strategy is to make advanced technologies available once supporting economics exist. For example, we have

been utilizing image guided radiation therapy ("IGRT") and Gamma Function, a proprietary capability to enable measurement of the actual amount of radiation delivered during a treatment and to provide immediate feedback for adaption of future treatments, where appropriate, now that reimbursement codes are in place for these services.

The principal costs of operating a treatment center are (1) the salary and benefits of the physician and technical staff, and (2) equipment and facility costs. The capacity of each physician and technical position is limited to a number of delivered treatments, while equipment and facility costs for a treatment center are generally fixed. These capacity factors cause profitability to be very sensitive to treatment volume. Profitability will tend to increase as resources from fixed costs including equipment and facility costs are utilized.

We receive payments for our services rendered to patients from the government Medicare and Medicaid programs, commercial insurers, managed care organizations and our patients directly. Generally, our revenue is determined by a number of factors, including the payer mix, the number and nature of procedures performed and the rate of payment for the procedures. The following table sets forth the percentage of our U.S. domestic net patient service revenue we earned based upon the patients' primary insurance by category of payer in our last three fiscal years.

Medicare is a major funding source for the services we provide and government reimbursement developments can have a material effect on operating performance. These developments include the reimbursement amount for each Current Procedural Terminology ("CPT") service that we provide and the specific CPT services covered by Medicare. CMS, the government agency responsible for administering the Medicare program, administers an annual process for considering changes in reimbursement rates and covered services. We have played, and will continue to play, a role in that process both directly and through the radiation oncology professional societies.

Since cancer disproportionately affects elderly people, a significant portion of our U.S. net patient service revenue is derived from the Medicare program, as well as related co-payments. Medicare reimbursement rates are determined by CMS and are lower than our normal charges. Medicaid reimbursement rates are typically lower than Medicare rates; Medicaid payments represent approximately 2.2% of our U.S. net patient service revenue for the year ended December 31, 2014.

In the final Medicare 2014 Physician Fee Schedule, CMS did finalize its proposal to revise the MEI [–2% impact], CMS also incorporated updated RVUs for new and existing codes [+3% impact] resulting in a net impact of +1% for radiation oncology overall. Because the MEI policy only applies to freestanding settings, the impact to freestanding centers is approximately flat, while hospital-based radiation oncologists would receive an increase in payment under the final rule.

Medicare reimbursement rates for all procedures under Medicare ultimately are determined by a formula which takes into account a CF which is updated on an annual basis based on the SGR. For the last several years, the SGR policy has threatened significant cuts to the CF, although Congress has consistently delayed those cuts. On April 1, 2014, the President signed H.R. 4302, the Protecting Access to Medicare Act of 2014 which extended the $35.8228 conversion factor through 2014 and also provided for a zero percent update through March 31, 2015. If future SGR reductions are not suspended, and if a permanent "doc fix" is not signed into law, the currently scheduled SGR reimbursement decrease (estimated at more than 20%) will take effect on April 1, 2015. Due to budget neutrality requirements from certain policies in the final Medicare 2015 Physician Fee Schedule, the 2015 conversion factor has been slightly adjusted to $35.7547, assuming no SGR cuts.

Commercial sources include private health insurance as well as related payments for co-insurance and co-payments. We enter into contracts with private health insurance and other health benefit groups by granting discounts to such organizations in return for the patient volume they provide.

Most of our commercial revenue is from managed care business and is attributable to contracts where a set fee is negotiated relative to services provided by our treatment centers. We do not have any contracts that individually represent over 10% of our total U.S. net patient service revenue. We receive our managed care contracted revenue under two primary arrangements. Approximately 97% of our managed care business is attributable to contracts where a fee schedule is negotiated for services provided at our treatment centers. For the year ended December 31, 2014 approximately 3% of our U.S. net patient service revenue is attributable to contracts where we bear utilization risk. Although the terms and conditions of our managed care contracts vary considerably, they are typically for a one-year term and provide for automatic renewals. If payments by managed care organizations and other private third-party payers decrease, then our total revenues and net income would decrease.

Self-pay consists of payments for treatments by patients not otherwise covered by third-party payers, such as government or commercial sources. Because the incidence of cancer is much higher in those over the age of 65, most of our patients have access to Medicare or other insurance and therefore the self-pay portion of our business is less than it would be in other circumstances. However, we are seeing a general increase in the patient responsibility portion of our claims and revenue.

We grant a discount on gross charges to self-pay patients not covered under other third party payer arrangements. The discount amounts are excluded from patient service revenue. To the extent that we realize additional losses resulting from nonpayment of the discounted charges, such additional losses are included in the provision for doubtful accounts.

Other material factors that we believe will also impact our future financial performance include:

The following summary results of operations data are qualified in their entirety by reference to, and should be read in conjunction with, our audited consolidated financial statements and the accompanying notes, included in this Annual Report on Form 10-K/A, and other financial information included in this Annual Report on Form 10-K/A.

For the year ended December 31, 2014, our total revenues grew by approximately 39.7%, over the prior year, while our total revenues for the year ended December 31, 2013 grew by approximately 5.2% over the prior year. For the years ended December 31, 2014, 2013, and 2012, we had total revenues of $1,018.2 million, $728.9 million and $693.1 million, respectively.

For the years ended December 31, 2014, 2013, and 2012, net patient service revenue comprised 92.2%, 97.1% and 98.7%, respectively, of our total revenues. In states where we employ radiation oncologists, we derive our net patient service revenue through fees earned from the provision of the professional and technical component fees of radiation therapy services. In states where we do not employ radiation oncologists, we derive our administrative services fees principally from administrative services agreements with professional corporations.

In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, "Consolidation" ("ASC 810"), we consolidate the operating results of certain of the professional corporations for which we provide administrative services into our own operating results. In 2014, 2013 and 2012, 14.9%, 18.6% and 19.4%, respectively, of our net patient service revenue was generated by professional corporations with which we have administrative services agreements.

In our net patient service revenue for the years ended December 31, 2014, 2013, and 2012, revenue from the professional-only component of radiation therapy and revenue from our ICC physician practices, comprised approximately 31.2%, 30.1%, and 28.7%, respectively, of our total revenues.

Management fees are recorded at the amount earned by us under the management services agreements. Services rendered by the respective physician groups are billed by us, as the exclusive billing agent of the physician groups, to patients, third-party payors, and others. For the years ended December 31, 2014 and 2013, management fees comprised 6.6% and 1.5%, respectively of our total revenues. These management fees are as a result of the OnCure transaction, which closed on October 25, 2013.

For the years ended December 31, 2014, 2013, and 2012, other revenue comprised approximately 1.2%, 1.4% and 1.3%, respectively, of our total revenues. Other revenue is primarily derived from management services provided to hospital radiation therapy departments, technical services provided to hospital radiation therapy departments, billing services provided to non-affiliated physicians, gain and losses from sale/disposal of medical equipment, equity interest in net earnings/losses of unconsolidated joint ventures and income for equipment leased by joint venture entities.

The following table summarizes key operating statistics of our results of operations for the periods presented:

	Years Ended December 31,									Years Ended December 31,

United States	2012			2013			% Change			2013			2014			% Change
Number of treatment days		255			255			0.0	%		255			255			0.0	%
Total RVUs—freestanding centers		11,483,600			11,615,189			1.1	%		11,615,189			15,919,121			37.1	%
RVUs per day—freestanding centers		45,034			45,550			1.1	%		45,550			62,428			37.1	%
Percentage change in RVUs per day—freestanding centers—same store basis		(6.3	)%		(3.5	)%					(3.5	)%		(0.4	)%
Total treatments—freestanding centers		493,330			546,951			10.9	%		546,951			796,067			45.5	%
Treatments per day—freestanding centers		1,935			2,145			10.9	%		2,145			3,122			45.5	%
Percentage change in revenue per treatment freestanding centers—same store basis		(3.9	)%		(6.2	)%					(6.2	)%		2.5	%
Percentage change in treatments per day freestanding centers—same store basis		2.0	%		4.3	%					4.3	%		2.6	%
Percentage change in freestanding revenues same store basis		(2.1	)%		(2.2	)%					(2.2	)%		5.1	%

Total radiation oncology cases completed*		19,885			21,928			10.3	%		21,928			31,440			43.4	%



Revenue per radiation oncology case	$	19,921		$	19,058					$	19,058		$	18,749
Treatment centers—freestanding (global)		121			155			28.1	%		155			169			9.0	%
Treatment centers—hospital / other groups (global)		5			8			60.0	%		8			11			37.5	%

Total treatment centers		126			163			29.4	%		163			180			10.4	%



Days sales outstanding at quarter end		34			38						38			37
United States
Net patient service revenue (global)—professional services only (in thousands)	$	199,097		$	219,721					$	219,721		$	318,047
Net patient service revenue (global)—excluding physician practice expense (in thousands)	$	683,781		$	722,786					$	722,786		$	1,027,411

The following table summarizes key operating statistics of our results of operations for our international operations for the periods presented:

Comparison of the Years Ended December 31, 2013 and 2014. MDLLC's total revenues increased $8.9 million, or 10.8%, from $82.3 million to $91.2 million for the year ended December 31, 2014 as compared to the year ended December 31, 2013. Total revenue was positively impacted by $2.2 million of revenue from the acquisition of a center in Guatemala City, Guatemala in January 2014, growth in cases and an improvement in treatment mix, and less depreciation in the Argentine Peso as compared to the same period in 2013. Case growth increased by 1,666 or 10.4% during the period. The trend toward more clinically-advanced treatments, which require more time to complete, continued during the period with an increase in the number of higher-revenue IMRT/IGRT treatments and 3D treatments versus 2D treatments as compared to the same period in 2013.

Facility gross profit increased $5.9 million, or 14.4% from $41.0 million to $46.9 million for the year ended December 31, 2014 as compared to the year ended December 31, 2013. Facility-level gross profit as a percentage of total revenues increased to 51.4% from 49.8%. Increases in facility rent, and incremental depreciation expense relating to our continued growth and investment in Latin America, expenses incurred related to construction of two new centers, one which opened in October 2014 in the Dominican Republic and one which is anticipated to open in the first half of 2015 in Mexico, as well as local inflation was offset by flat physician compensation and modest growth in salaries and benefits and medical supplies.

Comparison of the Years Ended December 31, 2012 and 2013. MDLLC's total revenues increased $3.0 million, or 3.8%, from $79.3 million to $82.3 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. Total revenue was positively impacted by $0.6 million of revenue from the start-up of a new Center in Argentina in August 2012, growth in treatments and an improvement in treatment mix from our November, 2011 acquisition in Argentina, growth in treatments and overall service mix improvements at our Argentina, El Salvador, and our centers in the Dominican Republic, and improved capitated pricing in Argentina, offset by the impact of a greater depreciation in the Argentine Peso versus the same period in 2012. Case growth increased by 861 or 5.7% during the period. The trend toward more clinically-advanced treatments which require more time to complete continued during the period with an increase in the number of higher-revenue IMRT/IGRT treatments and 3D treatments vs. 2D treatments as compared to the same period in 2012.

Facility gross profit decreased $0.7 million, or 1.6% from $41.7 million to $41.0 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. Facility-level gross profit as a percentage of total revenues decreased to 49.8% from 52.5%. Margins were impacted by growth in IMRT and 3-D cases, and improved pricing for capitated cases in Argentina, offset by higher depreciation and amortization relating to our continued growth and investment in Latin America, local inflation in Argentina, and higher facility rent expense.

The following table presents summaries of results of operations for the years ended December 31, 2014, 2013 and 2012 (dollars in thousands). This information has been derived from the consolidated

statements of operations and comprehensive loss included elsewhere in this Annual Report on Form 10-K/A.

	Years ended December 31,

	2014					2013					2012
	(Restated)					(Restated)					(Restated)
Revenues:
Net patient service revenue	$	938,488		92.2	%	$	707,616		97.1	%	$	683,781		98.7	%
Management fees		67,012		6.6			11,139		1.5			—		—
Other revenue		12,682		1.2			10,168		1.4			9,299		1.3

Total revenues		1,018,182		100.0			728,923		100.0			693,080		100.0
Expenses:
Salaries and benefits		545,025		53.5			409,352		56.2			372,656		53.8
Medical supplies		97,367		9.6			64,640		8.9			61,589		8.9
Facility rent expenses		63,111		6.2			45,565		6.3			39,802		5.7
Other operating expenses		61,784		6.1			45,629		6.3			38,988		5.6
General and administrative expenses		135,819		13.3			107,395		14.7			83,314		12.0
Depreciation and amortization		86,583		8.5			65,096		8.9			64,814		9.4
Provision for doubtful accounts		19,253		1.9			12,146		1.7			16,916		2.4
Interest expense, net		113,279		11.1			86,747		11.9			77,494		11.2
Electronic health records incentive income		(93	)	—			—		—			—		—
Impairment loss		229,526		22.5			—		—			81,021		11.7
Early extinguishment of debt		8,558		0.8			—		—			4,473		0.6
Equity initial public offering expenses		4,905		0.5			—		—			—		—
Loss on sale leaseback transaction		135		—			313		—			—		—
Fair value adjustment of earn-out liability		1,627		0.2			130		—			1,219		0.2
Fair value adjustment of embedded derivative		837		0.1			—		—			—		—
Gain on the sale of an interest in a joint venture		—		—			(1,460	)	(0.2	)		—		—
Loss on the sale/disposal of property and equipment		119		—			336		—			748		0.1
Loss on foreign currency transactions		678		0.1			1,138		0.2			241		—
Loss (gain) on foreign currency derivative contracts		(4	)	—			467		0.1			1,165		0.2



Total expenses		1,368,509		134.4			837,494		115.0			844,440		121.8



Loss before income taxes and equity interest loss in joint ventures		(350,327	)	(34.4	)		(108,571	)	(15.0	)		(151,360	)	(21.8	)
Income tax expense (benefit)		2,319		0.2			(23,068	)	(3.2	)		3,477		0.5



Loss before equity in net loss of joint ventures		(352,646	)	(34.6	)		(85,503	)	(11.8	)		(154,837	)	(22.3	)
Equity in net loss of joint ventures		(50	)	—			(454	)	(0.1	)		(817	)	(0.1	)



Net loss		(352,696	)	(34.6	)		(85,957	)	(11.9	)		(155,654	)	(22.4	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(4,595	)	(0.5	)		(1,838	)	(0.3	)		(3,053	)	(0.4	)



Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(357,291	)	(35.1	)%	$	(87,795	)	(12.2	)%	$	(158,707	)	(22.8	)%

Total revenues. Total revenues increased by $289.3 million, or 39.7%, from $728.9 million in 2013 to $1,018.2 million in 2014. Total revenue was positively impacted by $272.4 million due to our expansion into new practices and treatments centers in existing local markets and new local markets during 2013 and 2014 through the acquisition of several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island and the acquisition of physician radiation practices in Argentina, California, Guatemala, Florida, Indiana, North Carolina, Mexico and the opening of three de novo centers as follows:

Date		Location	Market	Type

May 2013	3	Cape Coral / Ft. Myers / Bonita Springs—Florida	Lee County—Florida	Acquisition
May 2013	2	Naples—Florida	Collier County—Florida	Acquisition
June 2013	1	Casa Grande—Arizona	Central Arizona	Joint Venture Acquisition
July 2013	1	Latin America	International (Mexico)	Acquisition
September 2013	1	Latin America	International (Argentina)	De Novo (Hospital Campus)
October 2013	30	California / Indiana / Florida	California / Indiana / Florida	Acquisition—OnCure Freestanding
October 2013	3	Indiana	Indiana	Acquisition—OnCure professional / other
October 2013	1	Roanoke Rapids, North Carolina	Eastern North Carolina	Acquisition
January 2014	1	Guatemala	International (Guatemala)	Acquisition
February 2014	17	Miami/Dade/Palm Beach/Broward counties—Florida	Miami/Dade/Palm Beach/Broward counties—Florida	Acquisition—SFRO Freestanding
February 2014	4	Miami/Dade/Palm Beach/Broward counties—Florida	Miami/Dade/Palm Beach/Broward counties—Florida	Acquisition—SFRO professional / other
February 2014	1	Westchester/Bronx/Long Island—New York	Westchester/Bronx/Long Island—New York	De Novo
March 2014	1	Latin America	International (Argentina)	Acquisition
October 2014	1	Miami—Florida	Miami/Dade County	Acquisition
October 2014	1	Dominican Republic	International (Dominican Republic)	De Novo

Revenue from CMS for the 2014 Physician Quality Reporting System ("PQRS") program increased approximately $0.1 million and revenues in our existing local markets and practices increased by approximately $16.8 million.

Salaries and benefits. Salaries and benefits increased by $135.6 million, or 33.1%, from $409.4 million in 2013 to $545.0 million in 2014. Salaries and benefits as a percentage of total revenues decreased from 56.2% in 2013 to 53.5% in 2014. Additional staffing of personnel and physicians due to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014 contributed $130.0 million to our salaries and benefits. In December 2013, we implemented a new equity-incentive plan, which decreased stock compensation by approximately $0.5 million in 2014. For existing practices and centers within our local markets, salaries and benefits increased $6.1 million due to increased salaries related to our physician liaison program and the expansion of our senior management team and increases in severance payments for terminated employees due to a reduction in workforce and incurred severance payments to certain executives offset by decreases in our compensation arrangements with certain radiation oncologists.

Medical supplies. Medical supplies increased by $32.8 million, or 50.6%, from $64.6 million in 2013 to $97.4 million in 2014. Medical supplies as a percentage of total revenues increased from 8.9%

in 2013 to 9.6% in 2014. Medical supplies consist of patient positioning devices, radioactive seed supplies, supplies used for other brachytherapy services, pharmaceuticals used in the delivery of radiation therapy treatments and chemotherapy-related drugs and other medical supplies. Approximately $27.4 million of the increase was related to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. In our remaining practices and centers in existing local markets, medical supplies increased by approximately $5.4 million. These pharmaceuticals and chemotherapy medical supplies are principally reimbursable by third-party payers.

Facility rent expenses. Facility rent expenses increased by $17.5 million, or 38.5%, from $45.6 million in 2013 to $63.1 million in 2014. Facility rent expenses as a percentage of total revenues decreased from 6.3% in 2013 to 6.2% in 2014. Facility rent expenses consist of rent expense associated with our treatment center locations. Approximately $17.7 million of the increase was related to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. Facility rent expense in our remaining practices and centers in existing local markets decreased by approximately $0.2 million.

Other operating expenses. Other operating expenses increased by $16.2 million or 35.4%, from $45.6 million in 2013 to $61.8 million in 2014. Other operating expense as a percentage of total revenues decreased from 6.3% in 2013 to 6.1% in 2014. Other operating expenses consist of repairs and maintenance of equipment, equipment rental and contract labor. Approximately $15.3 million of the increase was related to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. Approximately $0.9 million increase relates to equipment rental expense relating to medical equipment refinancing.

General and administrative expenses. General and administrative expenses increased by $28.4 million or 26.5%, from $107.4 million in 2013 to $135.8 million in 2014. General and administrative expenses principally consist of professional service fees, consulting, office supplies and expenses, insurance, marketing and travel costs. General and administrative expenses as a percentage of total revenues decreased from 14.7% in 2013 to 13.3% in 2014. The net increase of $28.4 million in general and administrative expenses was due to an increase of approximately $19.1 million relating to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. In addition, there were increases of approximately $11.9 million related to expenses associated with note-holder negotiations and management of liquidity, approximately $0.3 million related to expenses for consulting services for the CMS 2014 fee schedule, approximately $1.6 million in our remaining practices and treatments centers in our existing local markets offset by decreases in approximately $3.8 million in diligence costs relating to acquisitions and potential acquisitions of physician practices, approximately $0.3 million in litigation settlements with certain physicians and legal and consulting costs associated with the Medicare diagnostic matter and approximately $0.4 million in our rebranding initiatives.

Depreciation and amortization. Depreciation and amortization increased by $21.5 million or 33.0%, from $65.1 million in 2013 to $86.6 million in 2014. Depreciation and amortization expense as a percentage of total revenues decreased from 8.9% in 2013 to 8.5% in 2014. The change in depreciation and amortization was due to an increase of approximately $23.5 million relating to our development

and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. An increase in capital expenditures related to our investment in advanced radiation treatment technologies and software maintenance in certain local markets increased our depreciation and amortization by approximately $1.4 million offset by a decrease of approximately $3.4 million in amortization of certain non-compete agreements.

Provision for doubtful accounts. The provision for doubtful accounts increased by $7.2 million, or 58.5%, from $12.1 million in 2013 to $19.3 million in 2014. The provision for doubtful accounts as a percentage of total revenues increased from 1.7% in 2013 to 1.9% in 2014. As a result of our recent acquisitions, we continue to make progress in improving the overall collection process, including centralization of the prior authorization process, with standardization process supporting peer to peer justification of medical necessity, improvements in payment posting timeliness, electronic submission of documentation to Medicare carriers, Medicaid eligibility retro scrubbing of self pay patients, automated insurance rebilling, focused escalation process for claims in Medical Review with insurers, collector productivity and quality tracking and monitoring, and improved processes at the treatment centers to collect co-pay amounts at the time of service.

Interest expense, net. Interest expense increased by $26.6 million, or 30.6%, from $86.7 million in 2013 to $113.3 million in 2014. The increase is primarily attributable to additional debt obligations predominately relating to our senior credit facility. As of December 31, 2014, we had approximately $90.0 million outstanding in our Term Facility and $-0- million outstanding in our Revolver Credit Facility. The increase is also attributable to recent acquisitions. Pursuant to the SFRO acquisition, we entered into the SFRO Credit Agreement (as defined below) which provides for a $60 million Term B Loan, $7.9 million Term A Loan, and assumed capital lease obligations. The OnCure transaction included the issuance of $82.5 million in senior secured notes which accrue interest at a rate of 11.75% per annum and additional capital lease financing. On September 26, 2014, a portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under our revolving credit facility, repay all obligations under the South Florida Radiation Oncology Term A, Term A-1, and Term B loans, repay certain other debt and capital leases, as well as provide capital for near-term strategic initiatives and general corporate purposes.

Electronic health records incentive income. The American Recovery and Reinvestment Act of 2009 provides for incentive payments for Medicare eligible professionals who are meaningful users of certified EHR technology. We account for EHR incentive payments utilizing the gain contingency model. Pursuant to the gain contingency model, we recognize EHR incentive payments when the specified meaningful use criteria have been satisfied, as all contingencies in estimating the amount of the incentive payments to be received are resolved. For the year ended December 31, 2014 and 2013, we recognized approximately $0.1 million and $0.0 million, respectively of EHR revenues.

Impairment loss. As we began to experience some liquidity issues after terminating our previously planned initial public offering, we began to have discussions with an ad hoc group of holders of our outstanding notes. On July 29, 2014, we entered into a Recapitalization Support Agreement (the "Recapitalization Support Agreement"). The Recapitalization Support Agreement set forth the terms through which we expected to either (a) obtain additional liquidity through an equity contribution or subordinated debt incurred in a minimum amount of $150 million on or before October 1, 2014 or (b) consummate a Recapitalization consistent with the material terms and conditions described in the term sheet attached to the Recapitalization Support Agreement.

On September 26, 2014, we entered into the Subscription Agreement with CPPIB (the "Subscription Agreement"), pursuant to which we issued to CPPIB an aggregate of 385,000 shares of our Series A Preferred Stock for a purchase price of approximately $325.0 million. The receipt of these

funds satisfied the requirement under the Recapitalization Support Agreement that we obtain additional liquidity through an equity contribution or subordinated debt incurred in a minimum amount of $150 million on or before October 1, 2014.

We performed an interim impairment test for goodwill and indefinite-lived intangible assets. We completed the first step of the impairment test as of June 30, 2014 and determined that the carrying amount of one of the reporting units exceeded its estimated implied fair value, thereby requiring performance of the second step of the impairment test to calculate the amount of the impairment. In accordance with Intangibles—Goodwill and Other ("ASC 350"), we recorded a preliminary estimated non-cash impairment loss of approximately $182.0 million in the condensed consolidated statements of operations and comprehensive loss during the quarter ended June 30, 2014. We completed the second step of the impairment test and recorded an impairment loss of approximately $46.3 million during the quarter ended September 30, 2014.

In addition to the goodwill impairment losses noted above, we recorded an impairment loss of approximately $1.2 million during the third quarter of 2014 related to the write-off of our 33.6% investment interest in a development stage proton therapy center located in New York ("NY Proton"). As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, we are required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party.

Early extinguishment of debt. We incurred approximately $8.6 million from the early extinguishment of debt as a result of the prepayment of the Term A Loan, Term B Loan, MDLLC Credit Agreement, Note Purchase Agreement (each as defined below), and certain capital leases, which included the write-offs of $2.1 million in deferred financing costs, $2.7 million in original issue discount costs, and $3.8 million in pre-payment penalties, including $0.3 million paid to Theriac Management Investments, LLC ("Theriac") (a related party real estate entity owned by certain of the Company's directors and officers) pursuant to the Note Purchase Agreement.

Equity initial public offering expenses. In May, 2014, we determined due to market conditions to postpone the initial public offering of our equity securities. As a result of the postponement and entering into the Recapitalization Support Agreement with Consenting Subordinated Noteholders, we wrote-off approximately $4.9 million in expenses associated with the initial public offering.

Loss on sale leaseback transaction. In March 2014, the Company entered into a sale leaseback transaction with a financial institution. The sale leaseback transaction related to medical equipment. Proceeds from the sale were approximately $5.7 million. The Company recorded a loss on the sale leaseback transaction of approximately $0.1 million.

Fair value adjustment of earn-out liability. On October 25, 2013, we completed the acquisition of OnCure. The transaction was funded through a combination of cash on hand, borrowings from our senior secured credit facility and the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million included in other long-term liabilities in the consolidated balance sheets, is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions (the "earn out payment"). The Company recorded an estimated earn out payment at the time of the closing of the transaction. The earn out payment is contingent upon certain acquired centers attaining earnings before interest, taxes, depreciation and amortization targets, is due on December 31, 2015, and is payable through the issuance of the 11.75% senior secured notes. At December 31, 2013, we estimated the fair

value of the contingent earn out liability and increased the liability due to the holders to approximately $7.6 million. We recorded the $0.1 million to expense in the fair value adjustment of earn-out liability caption in the consolidated statements of operations and comprehensive loss. At December 31, 2014, we estimated the fair value of the contingent earn out liability and increased the liability due to the seller by approximately $0.8 million, which is recorded to expense in the fair value adjustment of earn-out liabilities caption in the consolidated statements of operations and comprehensive loss.

Pursuant to the SFRO acquisition, we recorded an estimated contingent earn out liability totaling approximately $11.1 million. At December 31, 2014, we estimated the fair value of the contingent earn out liability and increased the liability due to the holders to approximately $11.9 million. We recorded the $0.8 million to expense in the fair value adjustment caption in the consolidated statements of operations and comprehensive loss.

Fair value adjustment of embedded derivative and other financial instruments. Pursuant to the terms of the Subscription Agreement, immediately following the occurrence of a qualifying initial public offering or a qualifying merger, we will execute and deliver to CPPIB a Warrant Agreement (the "Warrant Agreement") and issue to CPPIB warrants to purchase shares of our common stock having a then-current value of $30 million, at a purchase price of $0.01 per share. The warrants expire on the tenth anniversary of the date of issuance. We evaluated the contingent events that could trigger the conversion of the Series A Preferred Stock to common stock and issuance of warrants and determined that the contingent conversion features qualify as an embedded derivative, requiring bifurcation and classification as a liability, measured at fair value. The Company determined the fair value of the embedded derivative to be, and recorded approximately $15.0 million as of September 30, 2014. As of December 31, 2014 we estimated the fair value of the embedded derivative to be approximately $15.8 million. The $0.8 million change in fair value of the embedded derivative is recorded to expense in the fair value adjustment of embedded derivative caption in the consolidated statements of operations and comprehensive loss.

Gain on the sale of an interest in a joint venture. In June 2013, we sold our 45% interest in an unconsolidated joint venture which operated a radiation treatment center in Providence, Rhode Island in partnership with a hospital to provide stereotactic radio-surgery through the use of a cyberknife for approximately $1.5 million, and recorded a respective gain on the sale. There were no similar sales during 2014.

Loss (gain) on foreign currency derivative contracts. We are exposed to a significant amount of foreign exchange risk, primarily between the U.S. dollar and the Argentine Peso. This exposure relates to the provision of radiation oncology services to patients at our Latin American operations and purchases of goods and services in foreign currencies. We maintained a foreign currency derivative contract which expired on March 31, 2014. The expiration of the foreign currency derivative contract and the mark to market valuation of the remaining contracts resulted in a gain of $4,000 in 2014 and a loss of approximately $0.5 million in 2013.

Income taxes. Our effective tax rate was (0.7)% in fiscal 2014 and 21.2% in fiscal 2013. The change in the effective rate in 2014 compared to the same period of the year prior is primarily due to the favorable effect of the OnCure purchase price adjustments on the valuation allowance booked against our net deferred tax assets in 2013 and by the release of previously recorded reserves related to US federal, state and international tax issues and the recording of a noncash impairment charge relating to goodwill in the U.S. domestic reporting segment of $229.5 million during 2014. As a result, on an absolute dollar basis, the expense for income taxes changed by $25.4 million from the income tax benefit of $23.1 million in 2013 to an income tax expense of $2.3 million in 2014.

tax laws or interpretations thereof. We monitor the assumptions used in estimating the annual effective tax rate and make adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating our annual effective tax rates, future income tax expense (benefit) could be materially affected.

In addition, we are periodically under audit by federal, state, or local authorities in the areas of income taxes and other taxes. These audits include questioning the timing and amount of deductions and compliance with federal, state, and local tax laws. We regularly assess the likelihood of adverse outcomes from these audits to determine the adequacy of our provision for income taxes. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of such accruals, the effective tax rate could be materially affected.

Net loss. Net loss increased by $266.7 million, from $86.0 million in net loss in 2013 to $352.7 million net loss in 2014. Net loss represents 11.9% of total revenues in 2013 and 34.6% of total revenues in 2014.

Total revenues. Total revenues increased by $35.8 million, or 5.2%, from $693.1 million in 2012 to $728.9 million in 2013. Total revenue was positively impacted by $59.4 million due to our expansion into new practices and treatments centers in existing local markets and new local markets during 2012 and 2013 through the acquisition of several urology, medical oncology and surgery practices in Arizona, California, Florida, Nevada, New Jersey, New York, North Carolina, Rhode Island and the acquisition of physician radiation practices in Arizona, California, Florida, Indiana, North Carolina, Mexico and the opening of two de novo centers and two hospital professional services arrangements transitioned to freestanding as follows:

Date		Location	Market	Type

February 2012	1	Asheville, North Carolina	Western North Carolina	Acquisition
March 2012	2	Broward County—Florida	Broward County—Florida	Transition from professional / other to freestanding
March 2012	1	Lakewood Ranch—Florida	Sarasota/Manatee Counties—Florida	Acquisition
August 2012	1	Latin America	International (Argentina)	De Novo
May 2013	3	Cape Coral / Ft. Myers / Bonita Springs—Florida	Lee County—Florida	Acquisition
May 2013	2	Naples—Florida	Collier County—Florida	Acquisition
June 2013	1	Casa Grande—Arizona	Central Arizona	Joint Venture Acquisition
July 2013	1	Latin America	International (Mexico)	Acquisition
September 2013	1	Latin America	International (Argentina)	De Novo (Hospital Campus)
October 2013	30	California / Indiana / Florida	California / Indiana / Florida	Acquisition—OnCure Freestanding
October 2013	3	Indiana	Indiana	Acquisition—OnCure professional / other
October 2013	1	Roanoke Rapids, North Carolina	Eastern North Carolina	Acquisition

Revenue from CMS for the 2013 PQRS program decreased approximately $0.6 million and revenues in our existing local markets and practices decreased by approximately $23.0 million. The decrease in revenue in our existing local markets is predominately due to the reductions in RVUs for many of our treatment codes effective with the 2013 Physician Fee Schedule, one less treatment day and treatment declines for prostate cancer as a result of the slowing rate of men diagnosed and referred to treatment regimens, as a result of the Preventative Services Task Force report issued in May 2012 recommending against routine PSA screenings for healthy men, as well as suggested changes in treatment pattern for low risk prostate cancer away from definitive treatment. The decrease was partially offset by increased managed care pricing and organic growth.

Salaries and benefits. Salaries and benefits increased by $36.7 million, or 9.8%, from $372.7 million in 2012 to $409.4 million in 2013. Salaries and benefits as a percentage of total revenues increased from 53.8% in 2012 to 56.2% in 2013. Additional staffing of personnel and physicians due to our development and expansion of several urology, medical oncology and surgery practices in Arizona, California, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island as well as the acquisitions of treatment centers in existing and new local markets during the latter part of 2012 and 2013 contributed $30.8 million to our salaries and benefits. In June 2012, we implemented a new equity-incentive plan, which provided stock compensation of $3.3 million in 2012 as compared to $0.6 million in 2013. For existing practices and centers within our local markets, salaries and benefits increased $8.6 million due increased salaries related to our physician liaison program and the expansion of our senior management team offset by decreases in our compensation arrangements with certain radiation oncologists.

Medical supplies. Medical supplies increased by $3.0 million, or 5.0%, from $61.6 million in 2012 to $64.6 million in 2013. Medical supplies as a percentage of total revenues remained constant at 8.9% in 2012 and 2013. Medical supplies consist of patient positioning devices, radioactive seed supplies, supplies used for other brachytherapy services, pharmaceuticals used in the delivery of radiation therapy treatments and chemotherapy-related drugs and other medical supplies. Approximately $4.5 million of the increase was related to our development and expansion of several urology, medical oncology and surgery practices in Arizona, California, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island as well as the acquisitions of treatment centers in existing and new local markets during the latter part of 2012 and 2013. In our remaining practices and centers in existing local markets, medical supplies decreased by approximately $1.5 million as certain chemotherapy drugs are administered through hospital settings under physician practice arrangements. These pharmaceuticals and chemotherapy medical supplies are principally reimbursable by third-party payers.

Facility rent expenses. Facility rent expenses increased by $5.8 million, or 14.5%, from $39.8 million in 2012 to $45.6 million in 2013. Facility rent expenses as a percentage of total revenues increased from 5.7% in 2012 to 6.3% in 2013. Facility rent expenses consist of rent expense associated with our treatment center locations. Approximately $6.0 million of the increase was related to our development and expansion of several urology, medical oncology and surgery practices in Arizona, California, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island as well as the acquisitions of treatment centers in existing and new local markets during the latter part of 2012 and 2013. In March 2012, we paid approximately $0.4 million to terminate a lease for our Beverly Hills, California office we closed in March 2011. Facility rent expense in our remaining practices and centers in existing local markets increased by approximately $0.1 million.

Other operating expenses. Other operating expenses increased by $6.6 million or 17.0%, from $39.0 million in 2012 to $45.6 million in 2013. Other operating expense as a percentage of total revenues increased from 5.6% in 2012 to 6.3% in 2013. Other operating expenses consist of repairs and maintenance of equipment, equipment rental and contract labor. Approximately $4.7 million of the increase was related to our development and expansion of several urology, medical oncology and surgery practices in Arizona, California, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island as well as the acquisitions of treatment centers in existing and new local markets during the latter part of 2012 and 2013. Approximately $1.8 million relates to equipment rental expense relating to the equipment refinancing closed in September 2012. In our remaining practices and centers in existing local markets other operating expenses increased approximately $0.1 million.

General and administrative expenses. General and administrative expenses increased by $24.1 million or 28.9%, from $83.3 million in 2012 to $107.4 million in 2013. General and administrative expenses principally consist of professional service fees, consulting, office supplies and

expenses, insurance, marketing and travel costs. General and administrative expenses as a percentage of total revenues increased from 12.0% in 2012 to 14.7% in 2013. The net increase of $24.1 million in general and administrative expenses was due in part to an increase of approximately $7.9 million relating to our development and expansion of several urology, medical oncology and surgery practices in Arizona, California, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island as well as the acquisitions of treatment centers in existing and new local markets during the latter part of 2012 and 2013. In addition, there was an increase of approximately $2.0 million related to expenses for consulting services for the CMS 2013/2014 fee schedule, $11.5 million in diligence costs relating to acquisitions and potential acquisitions of physician practices, $4.7 million relating to an estimated loss contingency reserve, $0.3 million in our rebranding initiatives to 21st Century Oncology trade name, offset by a decrease of approximately $1.0 million in litigation settlements with certain physicians and a decrease of approximately $1.3 million in our remaining practices and treatments centers in our existing local markets.

Depreciation and amortization. Depreciation and amortization increased by $0.3 million or 0.4%, from $64.8 million in 2012 to $65.1 million in 2013. Depreciation and amortization expense as a percentage of total revenues decreased from 9.4% in 2012 to 8.9% in 2013. The change in depreciation and amortization was due to an increase of approximately $5.6 million relating to our development and expansion of several urology, medical oncology and surgery practices in Arizona, California, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island as well as the acquisitions of treatment centers in existing and new local markets during the latter part of 2012 and 2013. A decrease of approximately $3.7 million in amortization of our trade name and a decrease of approximately $1.4 million predominately due to the refinancing of certain medical equipment leases with a financial institution in September 2012 classified as prepaid rent. In our remaining practices and centers in existing local markets depreciation and amortization decreased approximately $0.2 million.

Provision for doubtful accounts. The provision for doubtful accounts decreased by $4.8 million, or 28.2%, from $16.9 million in 2012 to $12.1 million in 2013. The provision for doubtful accounts as a percentage of total revenues decreased from 2.4% in 2012 to 1.7% in 2013. We continued to reduce our provision for doubtful accounts as we made progress in improving the overall collection process, including centralization of the prior authorization process, with a standardization process supporting peer to peer justification of medical necessity, improvements in payment posting timeliness, electronic submission of documentation to Medicare carriers, Medicaid eligibility retro scrubbing of self-pay patients, automated insurance rebilling, focused escalation processes for claims in medical review with insurers, collector productivity and quality tracking and monitoring, and improved processes at the treatment centers to collect co-pay amounts at the time of service. These actions have resulted in improved collections and lower bad debt expense as a percentage of total revenues.

Interest expense, net. Interest expense, increased by $9.3 million, or 11.9%, from $77.5 million in 2012 to $86.7 million in 2013. The increase is primarily attributable to an increase of approximately $11.8 million of interest as a result of the secured notes issued in May 2012 of approximately $350.0 million, the refinancing of our senior secured credit facility in August 2013, the issuance of $75.0 million in senior secured notes in the OnCure transaction and additional capital lease financing. An increase in the amortization of deferred financing costs and original issue discount of approximately $0.6 million as a result of our refinancing of our senior credit facility in August 2013 and an increase of approximately $0.1 million of interest expense in our international markets, offset by a decrease in our interest rate swap expense of approximately $2.8 million and the write- off of loan costs of approximately $0.5 million in May 2012.

Loss on sale leaseback transaction. In December 2013, the Company entered into a sale leaseback transaction with two financial institutions. The sale leaseback transaction related to medical equipment. Proceeds from the sale were approximately $18.4 million. The Company recorded a loss on the sale leaseback transaction of approximately $0.3 million.

Early extinguishment of debt. In May 2012, we incurred approximately $4.5 million from the early extinguishment of debt as a result of the prepayment of the $265.4 million senior secured credit facility—Term Loan B and prepayment of $63.0 million senior secured credit facility—revolving credit portion, which included the write-offs of $3.7 million in deferred financing costs and $0.8 million in original issue discount costs.

Fair value adjustment of earn-out liability. On March 1, 2011, we purchased the remaining 67% interest in MDLLC and its subsidiaries, resulting in an ownership interest of approximately 91% in the underlying radiation oncology practices located in South America, Central America, Mexico and the Caribbean. We also purchased an additional 61% interest in Clinica de Radioterapia La Asuncion S.A., resulting in an ownership interest of 80%. The Company recorded an estimated contingent earn out payment totaling $2.3 million at the time of the closing of these acquisitions. The earn out payment is contingent upon certain acquired centers attaining earnings before interest, taxes, depreciation and amortization targets, is due 18 months subsequent to the transaction closing, and is payable through Company financing and issuance of equity units. At December 31, 2012, we estimated the fair value of the contingent earn out liability and increased the liability due to the seller to approximately $3.4 million. We recorded the $1.2 million to expense in the fair value adjustment caption in the consolidated statements of operations and comprehensive loss.

On November 4, 2011, we purchased an 80% interest in an operating entity, which operates 1 radiation treatment center in Argentina; an 80% interest in another operating entity, which operates 3 radiation treatment centers in Argentina; and a 96% interest in an operating entity, which operates 1 radiation treatment center in Argentina. In November 2012, we exercised our purchase option to purchase the remaining interest for approximately $1.4 million and recorded the adjustment of $0.2 million to the purchase option as an expense in the fair value adjustment of the noncontrolling interests—redeemable in the consolidated statements of operations and comprehensive loss.

On October 25, 2013, we completed the acquisition of OnCure. The transaction was funded through a combination of cash on hand, borrowings from our senior secured credit facility and the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions. The $7.5 million subject to escrow arrangements was recorded as an earn out payment contingent upon certain acquired centers attaining earnings before interest, taxes, depreciation and amortization targets, and is due and payable on December 31, 2015. At December 31, 2013, we estimated the fair value of the contingent earn out liability and increased the liability due to the holders to approximately $7.6 million. We recorded the $0.1 million to expense in the fair value adjustment caption in the consolidated statements of operations and comprehensive loss.

Impairment loss. During the third quarter of 2012, we completed an interim impairment test for goodwill and indefinite-lived intangible assets as a result of our review of growth expectations and the release of the final rule issued on the physician fee schedule for 2013 by CMS on November 1, 2012, which included certain rate reductions on Medicare payments to freestanding radiation oncology providers as well as the changes in treatment patterns and volumes in prostate cancer as a result of the slowing rate of men diagnosed and referred to treatment regimens, as a result of the Preventative Services Task Force report issued in May 2012 recommending against routine PSA screenings for healthy men, as well as suggested changes in treatment pattern for low risk prostate cancer away from definitive treatment. In performing this test, we assessed the implied fair value of our goodwill and

intangible assets. As a result, we recorded an impairment loss of approximately $66.6 million during the third quarter of 2012 primarily relating to goodwill impairment in certain of our reporting units, including Mid East United States (Northwest Florida, North Carolina, Southeast Alabama, South Carolina), Central South East United States (Delmarva Peninsula, Central Maryland, Central Kentucky, South New Jersey), California, South West United States (central Arizona and Las Vegas, Nevada), and Southwest Florida of approximately $66.5 million. In addition, during the third quarter of 2012, an impairment loss of approximately $0.1 million was recognized related to the impairment of certain leasehold improvements of a planned radiation treatment facility office relocation in Monroe, Michigan in the Northeast U.S. region.

During the fourth quarter of 2012, we completed our annual impairment test for goodwill and indefinite-lived intangible assets. In performing this test, we assessed the implied fair value of our goodwill and intangible assets. As a result, we recorded an impairment loss of approximately $14.4 million during the fourth quarter of 2012 primarily relating to goodwill impairment in certain of our reporting units, including Central South East United States (Delmarva Peninsula, Central Maryland, Central Kentucky, South New Jersey), and Southwest Florida of approximately $14.1 million. In addition, during the fourth quarter of 2012, an impairment loss of approximately $0.1 million was recognized related to the impairment of certain leasehold improvements in the Delmarva Peninsula local market and approximately $0.2 million related to a consolidated joint venture in the Central Maryland local market.

Loss on foreign currency derivative contracts. We are exposed to a significant amount of foreign exchange risk, primarily between the U.S. dollar and the Argentine Peso. This exposure relates to the provision of radiation oncology services to patients at our Latin American operations and purchases of goods and services in foreign currencies. We maintain foreign currency derivative contracts which mature on a quarterly basis. In 2013 and 2012, the expiration of the December 31, 2013 foreign currency derivative contract and the mark to market valuation of the remaining contracts resulted in a loss of approximately $0.5 million and $1.2 million, respectively.

Income taxes. Our effective tax rate was 21.2% for 2013 and (2.3)% in 2012. The change in the effective rate in 2013 compared to the same period of the year prior is primarily due to the favorable effect of the OnCure purchase price adjustments on the valuation allowance booked against our net deferred tax assets. The fiscal year 2012 tax rate was also impacted by the income tax benefit associated with the termination of the interest rate swap in the first quarter and by the recording of a noncash impairment charge relating to goodwill in the U.S. domestic reporting segment of $80.7 million. As a result, on an absolute dollar basis, the expense for income taxes changed by $26.6 million from the income tax expense of $3.5 million in 2012 to an income tax benefit of $23.1 million in 2013.

Our future effective tax rates could be affected by changes in the relative mix of taxable income and taxable loss jurisdictions, changes in the valuation of deferred tax assets or liabilities, or changes in tax laws or interpretations thereof. We monitor the assumptions used in estimating the annual effective tax rate and make adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating our annual effective tax rates, future income tax expense (benefit) could be materially affected.

Net loss. Net loss decreased by $69.7 million, from $155.7 million in net loss in 2012 to $86.0 million net loss in 2013. Net loss represents 22.4% of total revenues in 2012 and 11.9% of total revenues in 2013.

We are highly leveraged. As of December 31, 2014, we had $967.1 million of long-term debt outstanding. We have experienced and continue to experience losses from operations. We reported a net loss of approximately $352.7 million, $86.0 million, and $155.7 million for the years ended December 31, 2014, 2013, and 2012, respectively.

Our high level of debt could have adverse effects on our business and financial condition. Specifically, our high level of debt could have important consequences, including the following:

Our ability to make scheduled payments and to refinance our indebtedness depends on, and is subject to, our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control, including the availability of financing in the international banking and capital markets.

We are involved in disputes, litigation, and regulatory matters incidental to our operations, including governmental investigations and other matters arising out of the normal conduct of business. The resolution of these matters could have a material adverse effect on our business and financial position.

On September 26, 2014, we issued to CPPIB, in a private placement, an aggregate of 385,000 newly issued shares of its Series A Convertible Redeemable Preferred Stock for a purchase price of $325.0 million.

This equity investment provides us with incremental liquidity, reduces our debt, and provides capital to continue to grow our business. As further described in our consolidated financial statements, a portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under our revolving credit facility, repay all obligations under the South Florida Radiation Oncology Term A, Term A-1, and Term B loans, repay certain other debt and capital leases, as well as provide capital for near-term strategic initiatives and general corporate purposes.

Our principal capital requirements are for working capital, acquisitions, medical equipment replacement and expansion and de novo treatment center development. Working capital and medical equipment are funded through cash from operations, supplemented, as needed, by lease lines of credit. Borrowings under these lease lines of credit are recorded on our balance sheets. The construction of de novo treatment centers is funded directly by third parties and then leased to us. We finance our

operations, capital expenditures and acquisitions through a combination of borrowings and cash generated from operations.

We have several initiatives designed to increase profitability including: (i) fully integrating our recent acquisitions to improve operational performance; (ii) improving commercial payer contracting to increase reimbursement; (iii) continued development and expansion of our integrated cancer care model; and (iv) realignment of our physician compensation arrangements to reflect the current reimbursement environment. Although we are significantly leveraged, we expect that the current cash balance, liquidity from our revolver, and cash generated from operations will be sufficient to meet working capital, capital expenditure, debt service, and other cash needs through December 31, 2015.

Net cash provided by operating activities for the years ended December 31, 2012 was $16.6 million. Net cash used in operating activities for the years ended December 31, 2013 and 2014 was $11.0 million and $14.8 million, respectively.

Net cash used in operating activities increased by $3.8 million from $11.0 million in 2013 to $14.8 million in 2014 predominately due to management of our vendor payables and increased cash flow related to our OnCure and SFRO transactions. In June 2014, we recorded a preliminary impairment loss of approximately $182.0 million as a result of us experiencing some liquidity issues after terminating our previously planned initial public offering. We finalized our goodwill impairment for step two of the process as of September 30, 2014 and recorded an additional $46.3 million in goodwill impairment and $1.2 million in impairment related to our write-off of our 33.6% investment interest in NY Proton. As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, we are required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party.

Cash at December 31, 2014 held by our foreign subsidiaries was $4.5 million. We consider these cash flows to be permanently invested in our foreign subsidiaries and therefore do not anticipate repatriating any excess cash flows to the U.S. We believe that the magnitude of our growth opportunities outside of the U.S. will cause us to continuously reinvest foreign earnings. We do not require access to the earnings and cash flow of our international subsidiaries to fund our U.S. operations.

Net cash used in operating activities decreased by $27.6 million from $16.6 million in cash provided by operating activities in 2012 to $11.0 million in cash used in operating activities in 2013 predominately due to a decrease in cash flow due to the reductions in RVUs for many of our treatment codes effective with the 2013 physician fee schedule and increased interest costs. On May 10, 2012, we issued $350.0 million in aggregate principal amount of 8⁷/8% Senior Secured Second Lien Notes due 2017. We used the proceeds to repay our existing senior secured revolving credit facility and the Term Loan B portion of our senior secured credit facilities, which were prepaid in their entirety, cancelled and replaced with the new Revolving Credit Facility, and to pay related fees and expenses. We continue to see improvements in our cash collections from our accounts receivable with our days sales outstanding improving from 34 days to 31 days.

Cash at December 31, 2013 held by our foreign subsidiaries was $3.6 million. We consider these cash flows to be permanently invested in our foreign subsidiaries and therefore do not anticipate repatriating any excess cash flows to the U.S. We anticipate we can adequately fund our domestic operations from cash flows generated solely from our U.S. business. We believe that the magnitude of

our growth opportunities outside of the U.S. will cause us to continuously reinvest foreign earnings. We do not require access to the earnings and cash flow of our international subsidiaries to fund our U.S. operations.

Net cash used in investing activities for 2012, 2013, and 2014 was $57.8 million, $118.5 million, and $113.8 million, respectively.

Net cash used in investing activities decreased by $4.7 million from $118.5 million in 2013 to $113.8 million in 2014. In 2014, net cash used in investing activities was impacted by approximately $50.2 million in the acquisition of medical practices. On February 10, 2014, we purchased a 65% equity interest in SFRO for approximately $65.5 million, subject to working capital and other customary adjustments. The transaction was primarily funded with the proceeds of a new $60 million term loan facility, $2.0 million seller financing note, and $7.9 million of term loans to refinance existing SFRO debt. In addition, we reflected approximately $11.7 million as restricted cash relating to the SFRO existing debt and an indemnity escrow for the determination of the final purchase price as well as recording $11.1 million as a contingent earn out payment. On April 21, 2014, we purchased the assets of a radiation oncology practice located in Boca Raton, Florida for approximately $0.4 million plus the assumption of approximately $2.7 million of debt. During 2014, we purchased approximately $56.6 million in property and equipment. We have one of the most technically-advanced radiation equipment platforms in the industry. A significant portion of this spend is for growth related projects. This includes the upgrade of technology and equipment at the legacy OnCure centers to expand capacity as well as add SRS capacity, and MDLLC's growth.

Net cash used in investing activities increased by $60.7 million from $57.8 million in 2012 to $118.5 million in 2013. In 2013, net cash used in investing activities was impacted by approximately $0.8 million in cash paid for the assets of several physician practices in Arizona, New Jersey and North Carolina, and approximately $17.7 million in cash paid for the assets of five radiation oncology practices and a urology group located in Lee and Collier Counties in Southwest Florida in May 2013. In June 2013, we contributed our Casa Grande, Arizona radiation physician practice and approximately $5.0 million to purchase a 55.0% interest in a joint venture. In June 2013, we entered into a "stalking horse" investment agreement to acquire OnCure upon effectiveness of its plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code for approximately $125.0 million, (excluding capital leases, working capital and other adjustments). The purchase price included $42.5 million in cash and up to $82.5 million in assumed debt ($7.5 million of assumed debt will be released assuming certain OnCure centers achieve a minimum level of EBITDA). We funded an initial deposit of approximately $5.0 million into an escrow account subject to the working capital adjustments.

In 2013, net cash used in investing activities was impacted by approximately $0.5 million in contribution of capital to an unconsolidated joint venture. In June 2013, we sold our 45% interest in an unconsolidated joint venture which operated a radiation treatment center in Providence, Rhode Island for approximately $1.5 million. In July 2013, we purchased the remaining 38.0% interest in a joint venture radiation facility, located in Woonsocket, Rhode Island from a hospital partner for approximately $1.5 million. In July 2013 we purchased a company, which operates a radiation treatment center in Tijuana, Mexico for approximately $1.6 million. In October 2013, we purchased a radiation therapy treatment center in Roanoke Rapids, North Carolina for approximately $2.2 million. During

2013, we entered into foreign exchange option contracts expiring on June 2014 to convert a significant portion of our forecasted foreign currency denominated net income into U.S. dollars to limit the adverse impact of a weakening Argentine Peso against the U.S. dollar. The cost of the option contracts, were approximately $0.2 million.

Historically, our capital expenditures have been primarily for equipment, leasehold improvements and information technology equipment. Total capital expenditures, inclusive of amounts financed through capital lease arrangements, outstanding accounts payable relating to the acceptance and delivery of medical equipment and exclusive of the purchase of radiation treatment centers, were $37.9 million, $43.7 million and $77.3 million in 2012, 2013 and 2014, respectively. Historically, we have funded our capital expenditures with cash flows from operations, borrowings under our senior secured credit facilities and borrowings under lease lines of credit.

Net cash provided by financing activities for 2012, 2013 and 2014 was $46.4 million, $131.6 million and $210.6 million, respectively.

On January 2, 2014, we sold a 20% share of our Southern New England Regional Cancer Care joint venture each to Care New England Health System ("CNE") and Roger Williams Medical Center. Also during the quarter, CNE acquired a 20% interest in our Roger Williams Medical Center joint venture. We received payments of approximately $1.3 million from the issuance of noncontrolling interests in these joint ventures.

On February 10, 2014, 21C East Florida and South Florida Radiation Oncology Coconut Creek, LLC ("Coconut Creek"), a subsidiary of SFRO, as borrowers, the several lenders and other financial institutions or entities from time to time parties thereto and Cortland Capital Market Services LLC as administrative agent and collateral agent entered into a new credit agreement (the "SFRO Credit Agreement"). The SFRO Credit Agreement provides for a $60 million Term B Loan in favor of 21C East Florida ("Term B Loan") and $7.9 million Term A Loan in favor of Coconut Creek issued for purposes of refinancing existing SFRO debt ("Term A Loan" and together with the Term B Loan, the "SFRO Term Loans"). The SFRO Term Loans each have a maturity date of January 15, 2017. We incurred approximately $1.0 million in deferred financing costs relating to the SFRO debt.

On October 25, 2013, we completed the acquisition of OnCure. The transaction included the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions. Interest is payable on the secured notes on each January 15 and July 15, commencing July 15, 2014.

On August 28, 2013, we entered into an Amendment Agreement (the "Amendment Agreement") to the credit agreement among us, 21C, the institutions from time to time party thereto as lenders, the administrative agent named therein and the other agents and arrangers named therein, dated as of May 10, 2012 (the "Original Credit Agreement" and, as amended and restated by the Amendment Agreement, the "Credit Agreement"). Pursuant to the terms of the Amendment Agreement the amendments to the Original Credit Agreement became effective on August 29, 2013.

The Credit Agreement provides for credit facilities consisting of (i) a $90 million Term Facility and (ii) a Revolving Credit Facility provided for up to $100 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit). The Term Facility and the Revolving Credit Facility each have a maturity date of October 15, 2016.

As a result of the Amendment Agreement, the proceeds of $87.75 million (net of original issue discount of $2.25 million) from the term loan facility was used to pay down approximately $62.5 million in revolver loans and accrued interest and fees of approximately $0.4 million. We incurred

approximately $1.4 million in transaction fees and expenses, including legal, accounting and other fees and expenses in connection with the Amendment Agreement.

On September 26, 2014, we issued to CPPIB, in a private placement, an aggregate of 385,000 newly issued shares of our Series A Convertible Redeemable Preferred Stock for a purchase price of $325.0 million.

This equity investment provides us with incremental liquidity, reduces our debt, and provides capital to continue to grow our business. As further described in Note 11 to our consolidated financial statements, a portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under our revolving credit facility, repay all obligations under the South Florida Radiation Oncology Term A, Term A-1, and Term B loans, repay certain other debt and capital leases, as well as provide capital for near-term strategic initiatives and general corporate purposes.

For the year ended December 31, 2014, we paid approximately $4.9 million in costs associated with the initial public offering costs.

We had partnership distributions from non-controlling interests of approximately $3.9 million, $2.2 million, and $3.6 in 2012, 2013, and 2014, respectively.

On May 10, 2012, we completed an offering of $350.0 million in aggregate principal amount of 8⁷/8% Senior Secured Second Lien Notes due 2017, with an original issue discount of $1.7 million. The proceeds of $348.3 million was used to prepay and cancel $265.4 million in senior secured credit facility—Term Loan B, prepayment of $63.0 million in senior secured credit facility—revolving credit portion and payment of accrued interest and fees of approximately $0.8 million. In addition, we paid approximately $14.4 million of loan costs relating to transaction fees and expenses incurred in connection with the issuance of the 8⁷/8% Senior Secured Second Lien Notes and a new revolving credit facility. The remaining net proceeds were used for general corporate purposes.

On April 20, 2010, we consummated a debt offering in an aggregate principal amount of $310.0 million of 9⁷/8% senior subordinated notes due 2017, and repaid our existing $175.0 million in aggregate principal amount 13.5% senior subordinated notes due 2015, including accrued and unpaid interest of approximately $6.4 million and the call premium of approximately $5.3 million. The remaining proceeds from the Offering were used to pay down $74.8 million of the Term Loan B and $10.0 million of our revolving credit facility. A portion of the proceeds was placed in a restricted account pending application to finance certain acquisitions, including the acquisitions of a radiation treatment center and physician practices in South Carolina, which were consummated on May 3, 2010. We incurred approximately $11.9 million in transaction fees and expenses, including legal, accounting and other fees and expenses in connection with the Offering, including the initial purchasers' discount of $1.9 million.

On March 1, 2011, we issued $50 million of 9⁷/8% Senior Subordinated Notes due 2017 pursuant to a Commitment Letter from DDJ Capital Management, LLC. The proceeds of $48.5 million were used (i) to fund the Company's acquisition of all of the outstanding membership units of MDLLC and substantially all of the interests of MDLLC's affiliated companies (the "MDLLC Acquisition") and (ii) to fund transaction costs associated with the MDLLC Acquisition. We incurred approximately $1.6 million in transaction fees and expenses, including legal, accounting and other fees and expenses in connection with the new notes, and an initial purchasers' discount of $0.6 million.

On May 10, 2012, we issued $350.0 million in aggregate principal amount of 8⁷/8% Senior Secured Second Lien Notes due 2017 (the "Secured Notes").

The Secured Notes were issued pursuant to an indenture, dated May 10, 2012 (the "Secured Notes Indenture"), the Company, the guarantors signatory thereto and Wilmington Trust, National Association. The Secured Notes are senior secured second lien obligations of the Company and are guaranteed on a senior secured second lien basis by the Company, and each of our domestic subsidiaries to the extent such guarantor is a guarantor of the Company's obligations under the Revolving Credit Facility.

The Secured Notes Indenture contains covenants that, among other things, restrict the ability for us, and certain of our subsidiaries to incur, assume or guarantee additional indebtedness; pay dividends or redeem or repurchase capital stock; make other restricted payments; incur liens; redeem debt that is junior in right of payment to the Secured Notes; sell or otherwise dispose of assets, including capital stock of subsidiaries; enter into mergers or consolidations; and enter into transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications. In addition, in certain circumstances, if the Company sells assets or experiences certain changes of control, it must offer to purchase the Secured Notes.

We used the proceeds to repay our existing senior secured revolving credit facility and the Term Loan B portion of our senior secured credit facilities, which were prepaid in their entirety, cancelled and replaced with the new Revolving Credit Facility described below, and to pay related fees and expenses. Any remaining net proceeds were used for general corporate purposes.

On October 25, 2013, we completed the acquisition of OnCure. The transaction included the issuance of $82.5 million in senior secured notes of OnCure (the "OnCure Notes"), which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions. The OnCure Notes were issued pursuant to an Amended and Restated Indenture (the "OnCure Indenture") of OnCure, with OnCure, as issuer, the subsidiaries of OnCure named therein, as guarantors, the Company, 21C and the subsidiaries of the Company and 21C named therein, as guarantors and Wilmington Trust, National Association, as trustee and collateral agent. The OnCure Notes are senior secured obligations of OnCure and certain of its subsidiaries that guarantee the OnCure Notes and senior unsecured obligations of the Company and its subsidiaries that guarantee the OnCure Notes.

The OnCure Indenture contains covenants that, among other things, restrict the ability of OnCure, certain of its subsidiaries, the Company, 21C and certain of its subsidiaries to: incur, assume or guarantee additional indebtedness; pay dividends or redeem or repurchase capital stock; make other restricted payments; incur liens; redeem debt that is junior in right of payment to the OnCure Notes; sell or otherwise dispose of assets, including capital stock of subsidiaries; enter into mergers or consolidations; and enter into transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications. In addition, in certain circumstances, if OnCure or the Company sell assets or experience certain changes of control, they must offer to purchase the OnCure Notes.

On May 10, 2012, we also entered into the Original Credit Agreement among 21C, as borrower, the Company, Wells Fargo Bank, National Association, as administrative agent, collateral agent, issuing

bank and as swingline lender, the other agents party thereto and the lenders party thereto. On August 28, 2013, we entered into the Amendment Agreement to the Original Credit Agreement. Pursuant to the terms of the Amendment Agreement the amendments to the Original Credit Agreement became effective on August 29, 2013.

Loans under the Revolving Credit Facility and the Term Facility are subject to the following interest rates:

We will pay certain recurring fees with respect to the Credit Facilities, including (i) fees on the unused commitments of the lenders under the Revolving Credit Facility, (ii) letter of credit fees on the aggregate face amounts of outstanding letters of credit and (iii) administration fees.

The Credit Agreement contains customary representations and warranties, subject to limitations and exceptions, and customary covenants restricting the ability (subject to various exceptions) of 21C and certain of its subsidiaries to: incur additional indebtedness (including guarantee obligations); incur liens; engage in mergers or other fundamental changes; sell certain property or assets; pay dividends of other distributions; consummate acquisitions; make investments, loans and advances; prepay certain indebtedness, change the nature of their business; engage in certain transactions with affiliates; and incur restrictions on the ability of 21C's subsidiaries to make distributions, advances and asset transfers. In addition, as of the last business day of each month, 21C will be required to maintain a certain minimum amount of unrestricted cash and cash equivalents plus availability under the Revolving Credit Facility of not less than $15.0 million.

The Credit Agreement contains customary events of default, including with respect to nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty when made; failure to perform or observe covenants; cross default to other material indebtedness; bankruptcy and insolvency events; inability to pay debts; monetary judgment defaults; actual or asserted invalidity or impairment of any definitive loan documentation and a change of control.

The obligations of 21C under the Credit Facilities are guaranteed by the Company and certain direct and indirect wholly-owned domestic subsidiaries of 21C.

The Credit Facilities and certain interest rate protection and other hedging arrangements provided by lenders under the Credit Facilities or its affiliates are secured on a first priority basis by security interests in substantially all of 21C's and each guarantor's tangible and intangible assets (subject to certain exceptions).

The Revolving Credit Facility requires that we comply with certain financial covenants, including:

The Revolving Credit Facility also requires that we comply with various other covenants, including, but not limited to, restrictions on new indebtedness, asset sales, capital expenditures, acquisitions and dividends, with which we were in compliance as of December 31, 2014.

On April 15, 2014, we obtained a waiver of borrowing conditions due to a default of not providing audited financial statements for the year ended December 31, 2013 within 90 days after year end. We paid the administrative agent for the account of the Revolving Lenders a fee equal to 0.125% of such Lender's aggregate commitments. The Senior Revolving Credit Facility provides for a 30 day cure period for the filing of the audited annual consolidated financial statements. The default was cured with the provision of the audited consolidated financial statements to the administrative agent on April 30, 2014.

On May 19, 2014, we entered into a Purchase Money Note Purchase Agreement (the "Note Purchase Agreement") with Theriac (a related party entity owned by certain of the Company's directors and officers). Pursuant to the Note Purchase Agreement, Theriac loaned to us, pursuant to an unsecured purchase money note, the principal amount of $7.4 million. The Company and certain of its domestic subsidiaries of the Company guaranteed the obligations under the note. The note will mature on June 15, 2015 and is subject to an interest rate payable in cash of 10.75% per annum or by adding the amount of such interest to the aggregate principal amount of outstanding notes at the interest rate of 12.0% per annum. The proceeds from the issuance of the note were used to pay for purchases or improvements of property and equipment or to refinance debt incurred to finance such purchases or improvements. A portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under the Note Purchase Agreement on September 26, 2014.

On July 28, 2014, MDLLC and certain of its subsidiaries and affiliates, including the Company entered into a credit and guaranty agreement (the "MDLLC Credit Agreement").

The MDLLC Credit Agreement provided for Tranche A term loans in the aggregate principal amount of $8.5 million and Tranche B term loans in the aggregate principal amount of $9.0 million (collectively, the "MDLLC Term Loans"), for an aggregate principal amount of MDLLC Term Loans of $17.5 million, in favor of MDLLC.

The MDLLC Term Loans are subject to interest rates, for any interest period, at a rate equal to 14.0% per annum.

A portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under the MDLLC Credit Agreement on September 26, 2014.

On February 10, 2014, 21C East Florida and Coconut Creek, as borrowers, entered into the SFRO Credit Agreement. The SFRO Credit Agreement provides for a $60 million Term B Loan in favor of 21C East Florida and $7.9 million Term A Loan in favor of Coconut Creek issued for purposes of refinancing existing SFRO debt. The SFRO Term Loans each have a maturity date of January 15, 2017.

On July 22, 2014, 21C East Florida and Coconut Creek entered into a first amendment (the "SFRO Amendment") to the SFRO Credit Agreement. The SFRO Amendment provided for an incremental $10.35 million term loan (the "Term A-1 Loan") in favor of Coconut Creek issued for purposes of (i) refinancing approximately $5.64 million in existing capitalized lease obligations owing to First Financial Corporate Leasing, including a prepayment premium, (ii) repaying the approximately $2.55 million intercompany loan made by 21C to pay the capitalized lease obligations owing to First Financial Corporate Leasing and (iii) pay fees, costs and expenses of the transactions related to the SFRO Amendment.

The SFRO Term Loans were subject to variable interest rates. In addition, the Term B Loan contained a provision allowing 21C East Florida to elect payment in kind interest payments.

A portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under the Company's South Florida Radiation Oncology Term A, Term A-1, and Term B loans on September 26, 2014.

We believe available borrowings under our credit facilities, together with our cash flows from operations, will be sufficient to fund our currently anticipated operating requirements. To the extent available borrowings and cash flows from operations are insufficient to fund future requirements, we may be required to seek additional financing through additional increases in our senior secured credit facilities, negotiate additional credit facilities with other lenders or institutions or seek additional capital through private placements or public offerings of equity or debt securities. No assurances can be given that we will be able to extend or increase our senior secured credit facilities, secure additional bank borrowings or lease line of credit or complete additional debt or equity financings on terms favorable to us or at all. Our ability to meet our funding needs could be adversely affected if we experience a decline in our results of operations, or if we violate the covenants and other restrictions to which we are subject under our senior secured credit facilities.

Our billing system in the U.S., excluding recently acquired businesses, utilizes a fee schedule for billing patients, third-party payers and government sponsored programs, including Medicare and Medicaid. Fees billed to government sponsored programs, including Medicare and Medicaid, and fees billed to contracted payers and self-pay patients (not covered under other third party payer arrangements) are automatically adjusted to the allowable payment amount at time of billing. For all our practices that are less than one year from date of acquisition, our billing system includes fee schedules on approximately 99% of all payers and developed a blended rate allowable amount on the remaining payers. As a result of this change fees billed to all payers are automatically adjusted to the allowable payment at time of billing.

Insurance information is requested from all patients either at the time the first appointment is scheduled or at the time of service. A copy of the insurance card is scanned into our system at the time of service so that it is readily available to staff during the collection process. Patient demographic information is collected for both our clinical and billing systems.

It is our policy to collect co-payments from the patient at the time of service. Insurance benefit information is obtained and the patient is informed of their deductible and co-payment responsibility prior to the commencement of treatment.

Charges are posted to the billing system by coders in our offices or in our central billing office. After charges are posted, edits are performed, any necessary corrections are made and billing forms are generated, then sent electronically to our clearinghouse whenever electronic submission is possible. Any bills not able to be processed through the clearinghouse are printed and mailed from our print mail service. Statements are automatically generated from our billing system and mailed to the patient on a regular basis for any amounts still outstanding from the patient. Daily, weekly and monthly accounts receivable analysis reports are utilized by staff and management to prioritize accounts for collection purposes, as well as to identify trends and issues. Strategies to respond proactively to these issues are developed at weekly and monthly team meetings. Our write-off process requires manual review and our process for collecting accounts receivable is dependent on the type of payer as set forth below.

Our central billing office staff expedites the payment process from insurance companies and other payers via electronic inquiries, phone calls and automated letters to ensure timely payment. Our billing system generates standard aging reports by date of billing in increments of 30 day intervals. The collection team utilizes these reports to assess and determine the payers requiring additional focus and collection efforts. Our accounts receivable exposure on Medicare, Medicaid and commercial payer balances are largely limited to denials and other unusual adjustments. Our exposure to bad debt on balances relating to these types of payers over the years has been insignificant.

In the event of denial of payment, we follow the payer's standard appeals process, both to secure payment and to lobby the payers, as appropriate, to modify their medical policies to expand coverage for the newer and more advanced treatment services that we provide which, in many cases, is the payer's reason for denial of payment. If all reasonable collection efforts with these payers have been exhausted by our central billing office staff, the account receivable is written-off.

We administer self-pay account balances through our central billing office and our policy is to first attempt to collect these balances although after initial attempts we often send outstanding self-pay patient claims to collection agencies at designated points in the collection process. In some cases monthly payment arrangements are made with patients for the account balance remaining after insurance payments have been applied. These accounts are reviewed monthly to ensure payments continue to be made in a timely manner. Once it has been determined by our staff that the patient is not responding to our collection attempts, a final notice is mailed. This generally occurs more than 120 days after the date of the original bill. If there is no response to our final notice, after 30 days the account is assigned to a collection agency and, as appropriate, recorded as a bad debt and written off. We also have payment arrangements with patients for the self-pay portion due in which monthly payments are made by the patient on a predetermined schedule. Balances under $50 are written off but not sent to the collection agency. All accounts are specifically identified for write-offs and accounts are written off prior to being submitted to the collection agency.

The following table summarizes our change in treatment centers in which we operate for the year ended December 31, 2014:

On January 2, 2014, we sold a 20% share of our Southern New England Regional Cancer Care joint venture each to CNE and Roger Williams Medical Center. Also during the quarter CNE acquired a 20% interest in our Roger Williams Medical Center joint venture. The incorporation of CNE reflects the addition of another important long-term partnership with a leading health system.

On January 13, 2014, CarePoint purchased the membership interest in Quantum Care, LLC for approximately $1.9 million. CarePoint offers a comprehensive suite of cancer management solutions to insurers, providers, employers and other entities that are financially responsible for the health of defined populations. With proven capabilities to manage medical, radiation and surgical oncology care across the entire continuum of settings, CarePoint represents a unique offering in the health services marketplace. Advanced technology and third-party administrator services, cost management solutions and a focused oncology-specific clinical model enable CarePoint to improve quality and reduce total oncology cost of care for its clients. CarePoint tailors its solutions to the needs of each customer and provides assistance through full-risk transfer, "a la carte" administrative services only packages or hybrid models.

On January 15, 2014, we purchased a 69% interest in a legal entity that operates a radiation oncology facility in Guatemala City, Guatemala for approximately $0.9 million plus the assumption of approximately $3.1 million in debt. The facility is strategically located in Guatemala City's medical corridor and, when combined with our existing center, we believe will significantly enhance our level of services.

In January 2014, we entered a strategic partnership with ProHealth Care Associates, LLP and opened a new de novo state-of-the-art radiation therapy center in Riverhead, New York. ProHealth is the largest physician group practice in the metropolitan New York area with over 500 physicians in over 150 offices treating over 750,000 covered lives.

On February 10, 2014, we purchased a 65% equity interest in SFRO for approximately $65.5 million, subject to working capital and other customary adjustments. The transaction was primarily funded with the proceeds of a new $60 million term loan facility that accrues interest at the Eurodollar Rate plus a margin of 10.50% per annum and matures on January 15, 2017 and $7.9 million of term loans to refinance existing SFRO debt.

SFRO operates 21 radiation treatment centers throughout south Florida. SFRO increases the number of treatment centers by approximately 10% and is expected to add approximately 591 average treatments per day.

On March 26, 2014 we purchased a 75% interest in a legal entity that operates a radiation oncology facility in Villa Maria, Argentina for approximately $0.5 million. The purchase of this radiation oncology facility further expands our presence in the Latin America market.

On April 21, 2014, we acquired the assets of a radiation oncology practice located in Boca Raton, Florida for approximately $0.4 million plus the assumption of approximately $2.7 million in debt. The acquisition of the radiation oncology practice further expands our presence in the Broward County market.

On May 5, 2014, we purchased the remaining 50% interest we did not already own in an unconsolidated joint venture which operates a freestanding radiation treatment center in Lauderdale Lakes, Florida for approximately $0.5 million.

During 2014, we acquired the assets of several physician practices in Florida for approximately $0.4 million. The physician practices provide synergistic clinical services and an ICC service to its patients in the respective markets in which we provide radiation therapy treatment services.

The operations of the foregoing acquisitions have been included in the accompanying consolidated statements of operations and comprehensive loss from the respective dates of each acquisition. When we acquire a treatment center, the purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values.

On January 2, 2015, we purchased an 80% interest in a legal entity that that operates a radiation oncology facility in Kennewick, Washington for approximately $17.6 million. The acquisition expands our presence into the state of Washington. The purchase agreement contains a provision for earn out payments, contingent upon achieving certain EBITDA targets measured over three years from the acquisition date. The earn out payments cannot exceed approximately $3.4 million.

On January 6, 2015, we acquired the assets of a radiation oncology practice located in Warwick, Rhode Island for approximately $8.0 million. The acquisition further expands our presence in Rhode Island.

On January 6, 2015, we acquired the additional assets of a radiation oncology practice we already manage located in Hollywood, Florida for approximately $0.5 million.

During the first quarter of 2014, we closed two radiation treatment facilities, one located in Lee County—Florida and another facility located in Charlotte County—Florida, as a result of the purchase on the OnCure transaction.

During the second quarter of 2014, we closed six radiation treatment facilities, three located in Broward and Palm Beach Counties, two located in Sarasota/Manatee Counties, and one in Southern California, all as a result of the purchase of the OnCure and SFRO transactions.

During the third quarter of 2014, we closed two radiation treatment facilities, one located in Central Maryland and one located in the Palm Springs, California market.

During October 2014, the Company entered into a license agreement with the Public Health Trust of Miami-Dade County, Florida to license space and equipment and assume responsibility for the operation of a radiation therapy center located in Miami, Florida, as part of the Company's value added services offering. The license agreement runs for an initial term of five years, with two separate five year renewal options.

During the fourth quarter of 2014, we closed one radiation treatment facility located in New York.

As of December 31, 2014, we have four additional de novo radiation treatment centers located in Bolivia, California, North Carolina, and South Carolina. The internal development of radiation treatment centers is subject to a number of risks including but not limited to risks related to

negotiating and finalizing agreements, construction delays, unexpected costs, obtaining required regulatory permits, licenses and approvals and the availability of qualified healthcare and administrative professionals and personnel. As such, we cannot assure you that we will be able to successfully develop radiation treatment centers in accordance with our current plans and any failure or material delay in successfully completing planned internally developed treatment centers could harm our business and impair our future growth.

We had been selected by a consortium of leading New York academic medical centers (including Memorial Sloan-Kettering Cancer Center, Beth Israel Medical Center/Continuum Health System, NYU Langone Medical Center, Mt. Sinai Medical Center and Montefiore Medical Center) to serve as the developer and manager of a proton beam therapy center to be constructed in Manhattan. The project is in the final stages of certificate of need approval. As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, we were required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party. We had accounted for our interest in the center as an equity method investment.

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We continuously evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

We believe the following critical accounting policies are important to the portrayal of our financial condition and results of operations and require our management's subjective or complex judgment because of the sensitivity of the methods, assumptions and estimates used in the preparation of our consolidated financial statements.

For further information on our critical and other significant accounting policies, see Note 2, Restatement of Consolidated Financial Statements, and Note 4, Summary of Significant Accounting Policies, to the consolidated financial statements included in this Annual Report on Form 10-K/A.

We evaluate certain of our radiation oncology practices in order to determine if they are variable interest entities ("VIE"). This evaluation resulted in determining that certain of our radiation oncology practices were potential VIEs. For each of these practices, we have evaluated (1) the sufficiency of the fair value of the entities' equity investments at risk to absorb losses, (2) that, as a group, the holders of the equity investments at risk have (a) the direct or indirect ability through voting rights to make decisions about the entities' significant activities, (b) the obligation to absorb the expected losses of the entity and their obligations are not protected directly or indirectly, and (c) the right to receive the expected residual return of the entity, and (3) substantially all of the entities' activities do not involve or are not conducted on behalf of an investor that has disproportionately fewer voting rights in terms

of its obligation to absorb the expected losses or its right to receive expected residual returns of the entity, or both. ASC 810 requires a company to consolidate VIEs if the company is the primary beneficiary of the activities of those entities. Certain of our radiation oncology practices are VIEs and we have a variable interest in each of these practices through our administrative services agreements. Pursuant to ASC 810, through our variable interests in these practices, we have the power to direct the activities of these practices that most significantly impact the entity's economic performance and we would absorb a majority of the expected losses of these practices should they occur. Based on these determinations, we have included these radiation oncology practices in our consolidated financial statements for all periods presented. All significant intercompany accounts and transactions have been eliminated.

The Company recognizes revenue in accordance with FASB ASC Topic 605, Revenue Recognition ("ASC 605"). Accordingly, the Company recognizes revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. MDL Argentina recognizes revenue at invoicing when it cannot conclude that criteria (ii) or (iii) have been met at an earlier point.

Generally with respect to net patient service revenue the above criteria is met when services are provided and revenue is reported at the estimated net realizable amount from patients, third-party payers and others for services rendered. The differences between our established billing rates and governmental fee schedules or third-party payer negotiated rates are accounted for as contractual adjustments, which are deducted from gross charges to arrive at net patient service revenue. We must estimate contractual adjustments to prepare the consolidated financial statements. The Medicare and Medicaid regulations and third-party payer contracts under which these contractual adjustments must be calculated are complex and subject to interpretation and adjustment. We estimate the contractual adjustments on a payer class basis given its interpretation of the applicable regulations or contract terms. These interpretations sometimes result in payments that differ from our estimates. Additionally, updated regulations and contract renegotiations occur frequently necessitating regular review and assessment of the estimation process by management. Adjustments to previous reimbursement estimates are accounted for as contractual adjustments and reported in the periods that such adjustments become known.

Changes in estimates related to the allowance for contractual discounts affect revenues reported in our consolidated statements of operations and comprehensive loss. If our overall estimated allowance for contractual discounts on our revenues for the year ended December 31, 2014 were changed by 1%, our after-tax loss from continuing operations would change by approximately $0.1 million. This is only one example of reasonably possible sensitivity scenarios. A significant increase in our estimate of contractual discounts for all payers would lower our earnings. This would adversely affect our results of operations, financial condition, liquidity and future access to capital.

During the years ended 2012, 2013, and 2014, approximately 45%, 45%, and 42% , respectively, of net patient service revenue related to services rendered under the Medicare and Medicaid programs. In the ordinary course of business, we are potentially subject to a review by regulatory agencies concerning the accuracy of billings and sufficiency of supporting documentation of procedures performed. Laws and regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation. As a result, there is at least a reasonable possibility that estimates will change by a material amount in the near term.

Accounts receivable are reported net of estimated allowances for doubtful accounts and contractual adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from third-party payers and patients. To provide for accounts receivable that could become uncollectible in the future, we establish an allowance for doubtful accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations (other than Medicare) of receivables is limited due to the large number of insurance companies and other payers that provide payments for our services. We do not believe that there are any other significant concentrations of receivables from any particular payer that would subject us to any significant credit risk in the collection of our accounts receivable.

The amount of the allowance for doubtful accounts is based upon our assessment of historical and expected net collections, business and economic conditions, trends in federal and state governmental healthcare coverage and other collection indicators. The primary tool used in our assessment is an annual, detailed review of historical collections and write-offs of accounts receivable as they relate to aged accounts receivable balances. The results of our detailed review of historical collections and write-offs, adjusted for changes in trends and conditions, are used to evaluate the allowance amount for the current period. If the actual bad debt allowance percentage applied to the applicable aging categories would change by 1% from our estimated bad debt allowance percentage for the year ended December 31, 2014, our after-tax loss from continuing operations would change by approximately $1.1 million and our net accounts receivable would change by approximately $1.8 million at December 31, 2014. The resulting change in this analytical tool is considered to be a reasonably likely change that would affect our overall assessment of this critical accounting estimate. Accounts receivable are written-off after collection efforts have been followed in accordance with our policies.

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by us in business combinations. Goodwill and indefinite life intangible assets are not amortized but are reviewed annually for impairment, or more frequently if impairment indicators arise. As we began to experience some liquidity issues after terminating our previously planned initial public offering, we began to have discussions with an ad hoc group of holders of our outstanding notes. On July 29, 2014, we entered into a Recapitalization Support Agreement. The Recapitalization Support Agreement set forth the terms through which we expected to either (a) obtain additional liquidity through an equity contribution or subordinated debt incurred in a minimum amount of $150 million on or before October 1, 2014 or (b) consummate a Recapitalization consistent with the material terms and conditions described in the term sheet attached to the Recapitalization Support Agreement.

We performed an interim impairment test for goodwill and indefinite-lived intangible assets. We completed the first step of the impairment test as of June 30, 2014 and determined that the carrying amount of one of the reporting units exceeded its estimated implied fair value, thereby requiring performance of the second step of the impairment test to calculate the amount of the impairment. In accordance with ASC 350, we recorded a preliminary estimated non-cash impairment loss of approximately $182 million in the condensed consolidated statements of operations and comprehensive loss during the quarter ended June 30, 2014. We completed the second step of the impairment test and recorded an impairment loss of approximately $46.3 million during the quarter ended September 30, 2014.

In addition to the goodwill impairment losses noted above, we recorded an impairment loss of approximately $1.2 million during the third quarter of 2014 related to the write-off of our 33.6% investment interest in NY Proton. As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, we are required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party.

During the third quarter of 2012 we recognized goodwill impairment of approximately $66.6 million as a result of the final rule issued on the Physician Fee Schedule for 2013 by CMS on November 1, 2012, which included certain rate reductions on Medicare payments to freestanding radiation oncology providers as well as the changes in treatment patterns and volumes in prostate cancer as a result of the slowing rate of men diagnosed and referred to treatment regimens, as a result of the Preventative Services Task Force report issued in May 2012 recommending against routine PSA screenings for healthy men, as well as suggested changes in treatment pattern for low risk prostate cancer away from definitive treatment. During the fourth quarter of 2012 we incurred an impairment loss of approximately $14.4 million. Approximately $14.1 million relating to goodwill impairment in certain of our reporting units and approximately $0.1 million related to the impairment of certain leasehold improvements in the Delmarva Peninsula local market and approximately $0.2 million related to a consolidated joint venture in the Central Maryland local market. There was no goodwill impairment recorded for the year ended December 31, 2013.

The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The estimated fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit (including the unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the estimated fair value of the reporting unit was the purchase price paid. Based on (i) assessment of current and expected future economic conditions, (ii) trends, strategies and forecasted cash flows at each reporting unit and (iii) assumptions similar to those that market participants would make in valuing the reporting units.

The estimated fair value measurements were developed using significant unobservable inputs (Level 3). For goodwill, the primary valuation technique used was an income methodology based on estimates of forecasted cash flows for each reporting unit, with those cash flows discounted to present value using rates commensurate with the risks of those cash flows. In addition, a market- based valuation method involving analysis of market multiples of revenues and EBITDA for (i) a group of comparable public companies and (ii) recent transactions, if any, involving comparable companies. Assumptions used are similar to those that would be used by market participants performing valuations of regional divisions. Assumptions were based on analysis of current and expected future economic conditions and the strategic plan for each reporting unit.

Intangible assets consist of trade names, certificates of need, non-compete agreements, licenses and hospital contractual relationships. Trade names and certificates of need have an indefinite life and are tested annually for impairment. Non-compete agreements, licenses and hospital contractual relationships are amortized over the life of the agreement (which typically ranges from 2 to 20 years) using the straight-line method. No intangible asset impairment loss was recognized for the years ended December 31, 2012, 2013, and 2014.

In accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", we review our long-lived assets for impairment whenever events or changes in circumstances indicate

that the carrying amount of these assets may not be fully recoverable. Assessment of possible impairment of a particular asset is based on our ability to recover the carrying value of such asset based on our estimate of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of such asset, an impairment charge would be recognized for the amount by which the asset's carrying value exceeds its estimated fair value.

All share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense in the statement of operations and comprehensive loss over the requisite service period.

For purposes of determining the compensation expense associated with the 2012 and 2013 equity-based incentive plan grants, we engaged a third party valuation company to value the business enterprise using a variety of widely accepted valuation techniques, which considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity. The third party valuation company then used the probability-weighted expected return method ("PWERM") to determine the fair value of these units at the time of grant. Under the PWERM, the value of the units is estimated based upon an analysis of future values for the enterprise assuming various future outcomes (exits) as well as the rights of each unit class. In developing assumptions for the various exit scenarios, management considered the Company's ability to achieve certain growth and profitability milestone in order to maximize shareholder value at the time of potential exit. Management considers an initial public offering of the Company's stock to be one of the exit scenarios for the current shareholders, as well as a sale or merger/acquisition transaction. For the scenarios the enterprise value at exit was estimated based on a multiple of the Company's EBITDA for the fiscal year preceding the exit date. The enterprise value for the scenario where the Company stays private (and under the majority ownership of Vestar, our equity sponsor) was estimated based on a discounted cash flow analysis as well as guideline company market approach. The guideline companies were publicly-traded companies that were deemed comparable to the Company. The discount rate analysis also leveraged market data of the same guideline companies. For each PWERM scenario, management estimated probability factors based on the outlook of the Company and the industry as well as prospects and timing for a potential exit based on information known or knowable as of the grant date. The probability-weighted unit values calculated at each potential exit date was present-valued to the grant date to estimate the per-unit value. The discount rate utilized in the present value calculation was the cost of equity calculated using the Capital Asset Pricing Model and based on the market data of the guideline companies as well as historical data published by Morningstar, Inc. For each PWERM scenario, the per unit values were adjusted for lack of marketability discount to determine unit value on a minority, non-marketable basis.

For 2012, 2013, and 2014, the estimated fair value of the units, less an assumed forfeiture rate of 3.9%, is recognized in expense in the Company's consolidated financial statements on a straight-line basis over the requisite service periods of the awards for Class MEP Units. For Class MEP Units, the requisite service period is approximately 18 months, and for Class EMEP Units, the requisite service period is 36 months only if probable of being met. The Class M Units and O Units compensation will be recognized upon the sale of the Company or an initial public offering. Under the terms of the incentive unit grant agreements governing the grants of the Class M Units and Class O Units, in the event of an initial public offering of the Company's common stock, holders have certain rights to receive shares of restricted common stock of the Company in exchange for their Class M Units and Class O Units. The assumed forfeiture rate is based on an average historical forfeiture rate. All outstanding Class EMEP Units and Class L units were canceled without payment to the holder thereof in connection with 21CI's entry into the Fourth Amended LLC Agreement.

On December 9, 2013, 21CI entered into Fourth Amended LLC Agreement which replaced the Third Amended LLC Agreement in its entirety. The Fourth Amended LLC Agreement established new classes of incentive equity units in 21CI in the form of Class M Units, Class N Units and Class O Units for issuance to employees, officers, directors and other service providers, eliminated 21CI's Class L Units and Class EMEP Units, and modified the distribution entitlements for holders of each existing class of equity units of 21CI.

We make estimates in recording our provision for income taxes, including determination of deferred tax assets and deferred tax liabilities and any valuation allowances that might be required against the deferred tax assets. ASC 740, "Income Taxes" ("ASC 740"), requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. For the year ended December 31, 2012, we determined that the valuation allowance was approximately $82.6 million, consisting of $70.7 million against federal deferred tax assets and $11.9 million against state deferred tax assets. This represented an increase of $37.9 million over the prior year. For the year ended December 31, 2013, we determined that the valuation allowance should be $96.9 million, consisting of $86.9 million against federal deferred tax assets and $10.0 million against state deferred tax assets. This represented an increase of $14.3 million in valuation allowance. For the year ended December 31, 2014, we determined that the valuation allowance should be $181.7 million, consisting of $161.2 million against federal deferred tax assets and $20.5 million against state deferred tax assets. This represents an increase of $84.8 million in valuation allowance.

ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

We are subject to taxation in the United States, approximately 24 state jurisdictions, the Netherlands, and throughout Latin America, namely, Argentina, Bolivia, Brazil, Costa Rica, Dominican Republic, El Salvador, Guatemala and Mexico. However, the principal jurisdictions for which we are subject to tax are the United States, Florida and Argentina.

In addition, we are routinely under audit by federal, state, or local authorities in the areas of income taxes and other taxes. These audits include questioning the timing and amount of deductions and compliance with federal, state, and local tax laws. We regularly assess the likelihood of adverse outcomes from these audits to determine the adequacy of our provision for income taxes. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of such accruals, the effective tax rate could be materially affected.

During 2012, we closed a US Federal income tax examination for tax years 2007 through 2008. All issues proposed were agreed to with the exception of interest and penalties for which an accrual of $2.2 million was recorded. During the third quarter of 2013, we closed the US federal income tax audit related to calendar year 2009 with no material adjustments. We closed the New York state audit for tax years 2006 through 2008 with a favorable result during the first quarter of 2013. During 2014, we reached a favorable settlement with the US Internal Revenue Service related to the interest and penalty issues in tax years 2007 and 2008 and various US state and local and foreign jurisdictions related to tax years 2005 through 2012. As a result, we released $3.2 million of previously recorded reserves.

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-11, Income Taxes (Topic 740):Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11), which amends ASC 740 to clarify balance sheet presentation requirements of unrecognized tax benefits. ASU 2013-11 was effective for us on January 1, 2014. We adopted ASC 740 and reclassified approximately $1.2 million of unrecognized tax benefits from income taxes payable to other long term liabilities.

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 changes the requirements for reporting discontinued operations in FASB Accounting Standards Codification Subtopic 205-20, such that a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. ASU 2014-08 requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position, as well as additional disclosures about discontinued operations. Additionally, ASU 2014-08 requires disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements and expands the disclosures about an entity's significant continuing involvement with a discontinued operation. The accounting update is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. We are currently evaluating the potential impact of this guidance.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 that defers the effective date of ASU 2014-09 for all affected entities. As a result, ASU 2014-09 is effective for us beginning January 1, 2018. We intend to adopt the new guidance on January 1, 2018 and are currently evaluating the potential impact of this guidance.

In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40)." The new guidance addresses management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable

at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the potential impact of this guidance.

In November 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or Equity (ASU 2014-06). The new guidance eliminates use of diversity in practice when evaluating whether the nature of the host contract within a hybrid financial instrument issued in the form of a share is more akin to debt or to equity. Pursuant to ASU 2014-06, entities should determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial instrument, weighing each term and feature on the basis of relevant facts and circumstances. That is, an entity should determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the potential impact of this guidance.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (ASU 2015-02). The new guidance intends to reduce the number of consolidation models as well as place more emphasis on risk of loss when determining a controlling financial interest. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the potential impact of this guidance.

Legislative and regulatory action has resulted in continuing changes in reimbursement under the Medicare and Medicaid programs that will continue to limit payments we receive under these programs.

Within the statutory framework of the Medicare and Medicaid programs, there are substantial areas subject to legislative and regulatory changes, administrative rulings, interpretations, and discretion which may further affect payments made under those programs, and the federal and state governments may, in the future, reduce the funds available under those programs or require more stringent utilization and quality reviews of our treatment centers or require other changes in our operations. Additionally, there may be a continued rise in managed care programs and future restructuring of the financing and delivery of healthcare in the United States. These events could have an adverse effect on our future financial results.

While inflation was not a material factor in revenue or operating expenses during the periods presented, the healthcare industry is labor- intensive. Wages and other expenses increase during periods of inflation and labor shortages, such as the nationwide shortage of dosimetrists and radiation therapists. In addition, suppliers pass along rising costs to us in the form of higher prices. We have implemented cost control measures to curb increases in operating costs and expenses. We have to date offset increases in operating costs by increasing reimbursement or expanding services. However, we cannot predict our ability to cover, or offset, future cost increases.

The following table sets forth our contractual obligations as of December 31, 2014.

(1): As of December 31, 2014, there was $-0.0- million in aggregate principal amount outstanding under our senior secured revolving credit facility and $90.0 million in aggregate principal amount outstanding under our senior term credit facility (excluding issued but undrawn letters of credit). Interest expense and fees on our senior secured revolving credit facility is based on an assumed interest rate of the one-month LIBOR rate as of December 31, 2014 plus 575 basis points plus unused commitment fees on our $100.0 million senior secured revolving credit facility and 7.5% on our $90.0 million senior secured term credit facility.
(2): Senior subordinated notes of $380.1 million (excluding original issue discount of $2.4 million), due April 15, 2017. Interest expense is based on an interest rate of 9⁷/8%.
(3): Senior secured second lien notes of $350.0 million (excluding original issue discount of $1.1 million), due January 15, 2017. Interest expense is based on an interest rate of 8⁷/8%.
(4): Senior secured notes of $75.0 million, due January 15, 2017. Interest expense is based on an interest rate of 11³/4%.
(5): Other notes and capital leases includes leases relating to medical equipment.
(6): Operating lease obligations includes land and buildings, and equipment.
(7): Finance obligations includes real estate under the failed sale-leaseback accounting. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Finance Obligation."

We do not currently have any off-balance sheet arrangements with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

We are exposed to various market risks as a part of our operations, and we anticipate that this exposure will increase as a result of our planned growth. In an effort to mitigate losses associated with these risks, we may at times enter into derivative financial instruments. These derivative financial instruments may take the form of forward sales contracts, option contracts, and interest rate swaps. We have not and do not intend to engage in the practice of trading derivative securities for profit. Because our borrowings under our senior secured credit facilities will bear interest at variable rates, we are sensitive to changes in prevailing interest rates.

Outstanding balances under our senior secured credit facility bear interest based on either LIBOR plus an initial spread, or an alternate base rate plus an initial spread, at our option. Accordingly, an adverse change in interest rates would cause an increase in the amount of interest paid. As of December 31, 2014, we have interest rate exposure on $90.0 million of our senior secured credit facility. A 100 basis point change in interest rates on our senior secured credit facility would result in an increase of $0.9 million in the amount of annualized interest paid and annualized interest expense recognized in our consolidated financial statements.

Information with respect to this Item is contained in our consolidated financial statements beginning with the Index on Page F-1 of this report, which is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

This Item 9A includes information concerning the controls and controls evaluation referred to in the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 of the Exchange Act included in this Annual Report as Exhibits 31.1 and 31.2.

As previously announced on March 24, 2016 our Board of Directors determined that it would be necessary for us to restate our consolidated financial statements. The Board of Directors made this determination following consultation with and upon the recommendation of the Audit Committee of the Board of Directors, management and Deloitte & Touche LLP. Refer to "Part II—Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 2, Restatement of Previously Issued Consolidated Financial Statements, included in "Part II—Item 8—Consolidated Financial Statements and Supplementary Data" for a more detailed description of the financial statement restatement.

Notwithstanding the existence of the material weaknesses described below, we believe that the consolidated financial statements in this Annual Report fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods, presented, in conformity with GAAP.

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

In connection with the preparation of the Original Form 10-K in March 2015, the Company's management, under the supervision time and with the participation of the Chief Executive Officer and the current Principal Financial Officer (who is currently our SVP, Assistant Treasurer, Controller and Chief Accounting Officer) conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2014.

Based upon that evaluation, our President and Chief Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective (excluding the internal controls of SFRO).

Subsequent to the evaluation made in connection with the filing of the Original Form 10-K in March 2015 and in connection with the preparation and filing of the above-described restatement and this Form 10-K/A, our management, with the participation of our President and Chief Executive Officer and our current Chief Financial Officer (who was not employed by the Company at the time of the filing of the Original Form 10-K), re-evaluated the effectiveness of the design and operation of our disclosure controls and procedures. As described below, management has identified material weaknesses in our internal control over financial reporting, which is an integral component of our disclosure controls and procedures. As a result of those material weaknesses, our President and Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of December 31, 2014.

Management, under the supervision of our Chief Executive Officer and Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d(f) under the Exchange Act). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP, and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a

reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the preparation and filing of the Original Form 10-K in March 2015, the Company's management evaluated the effectiveness of the Company's internal control over financial reporting as of December 31, 2014 based upon the framework in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This framework highlights that the control environment sets the tone of the organization, influences the control consciousness of its people, and is the foundation for all other components of internal control over financial reporting. Management's evaluation did not include an assessment of the effectiveness of internal control over financial reporting for SFRO, which the Company acquired effective February 10, 2014. SFRO represented approximately $191.0 million of the Company's consolidated total assets as of December 31, 2014 and approximately $135.6 million of the Company's consolidated total revenues during the year ended December 31, 2014. Based on its evaluation, the Company's management concluded at that time that, as of December 31, 2014, the Company's internal control over financial reporting, excluding the internal controls of SFRO, was effective based on the COSO criteria.

In connection with the preparation and filing of the above-described restatement and this Form 10-K/A, the Company's management, including our President and Chief Executive Officer and our current Chief Financial Officer (who was not employed by the Company at the time of the filing of the Original Form 10-K), has re-evaluated the effectiveness of our internal control over financial reporting as of December 31, 2014 (excluding SFRO).

As a result of the errors that were identified, we determined that there was a material weakness in the control environment. In addition, the material weakness in the control environment contributed to material weaknesses at the control-activity level, as we did not:

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's internal controls were not subject to attestation by our independent registered public accounting firm pursuant to an exemption for issuers that are not "large accelerated filers" nor "accelerated filers" set forth in Section 989G(a) set forth in the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted into federal law in July 2010.

Remediation of Material Weakness in Internal Control Over Financial Reporting

Management is committed to the planning and implementation of remediation efforts to address the material weaknesses as well as other identified areas of risk. These remediation efforts, summarized below, which are either implemented or in process of being implemented, are intended to both address the identified material weaknesses and to enhance our overall financial control environment.

As part of this commitment, we are implementing an internal audit program that will take into account the nature of our business and the geographies in which we conduct it. We are also updating our code of conduct, and all our employees will be required to annually acknowledge their commitment to adhering to its provisions. We have improved our Compliance Hotline to provide an anonymous and confidential process for reporting any suspected violations of federal or state law and regulations, Company policies and procedures, or our Code of Conduct.

We are in the process of developing a plan for remediation of the ineffective internal control over financial reporting described above. In addition, we have designed and plan to implement, and in some cases have already implemented, the specific remediation initiatives described below:

More specifically to date we have implemented the following remediation activities:

Management believes that meaningful progress has been made against remaining remediation efforts and successful completion is an important priority. Remaining remediation activities include:

Management believes the measures, when fully implemented and operational, will remediate the control deficiencies we have identified and strengthen our internal control over financial reporting. We are committed to improving our internal control processes and intend to continue to review and improve our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may decide to implement other initiatives to address control deficiencies or determine to modify, or in appropriate circumstances, not complete, certain of the remediation measures described above.

As previously disclosed in Item 9A of the 2013 Form 10-K, management had then concluded that there was a material weakness in internal controls over financial reporting related to our internal communications regarding the identification of and accounting for the loss contingency, along with the related disclosure regarding certain subpoenas we received in February 2014, from the OIG. We implemented certain changes to our internal control over financial reporting to address the material weaknesses in our internal control over financial reporting. Specifically, during fiscal year 2014, management implemented a system of internal controls over financial reporting with respect to the accounting for loss contingencies, including the establishment of a disclosure committee and the assessment of future probable loss contingency accounting and methods. Management's report on internal control over financial reporting is included above. Management has concluded that, as of December 31, 2014, the above identified material weakness had been fully remediated.

Effective February 10, 2014, we completed the acquisition of SFRO. The facilities acquired as part of the SFRO Acquisition utilize different information technology systems from our other facilities. We are currently integrating our internal control processes at SFRO. Although the SFRO acquisition has been excluded from our assessment of and conclusion on the effectiveness of our internal control over financial reporting, we have concluded there are material weaknesses related to the integration of SFRO into our control environment as of December 31, 2014. Specifically, we did not maintain appropriate segregation of duties over cash, adequate access controls with regard to financial applications, or adequate controls over the processing of expenditures.

We are in the process of developing and implementing a remediation plan to address the material weaknesses related to the SFRO integration. The remediation actions that are expected to be taken include the following:

Other than as described above, there has been no change in our internal control over financial reporting that occurred during the year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The Company's management team, including the CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. As noted herein, management has identified material weaknesses in our internal control over financial reporting.

21^st Century Oncology Holdings, Inc.'s Executive Officers, Directors and Key Employees

Name		Position

Daniel E. Dosoretz, M.D.	62	Chief Executive Officer and Director
Alejandro Dosoretz	56	President and Chief Executive Officer of Medical Developers Cooperatief U.A. B.V. and Vidt Centro Medico
Constantine A. Mantz, M.D.	46	Chief Medical Officer
LeAnne M. Stewart	51	Chief Financial Officer
Gary Delanois	62	Senior Vice President, United States Operations
Joseph Biscardi	46	Senior Vice President, Assistant Treasurer, Controller and Chief Accounting Officer
James L. Elrod, Jr.	60	Chairman of the Board of Directors
Robert L. Rosner	55	Director
Erin L. Russell	41	Director
Scott Lawrence	41	Director
Christian Hensley	41	Director
Howard M. Sheridan, M.D.	70	Director
Robert W. Miller	74	Director
William R. Spalding	57	Director

Daniel E. Dosoretz, M.D., F.A.C.R., F.A.C.R.O. is one of our founders and has served as a director since 1988 and as our Chief Executive Officer since April 1997. Dr. Dosoretz is also employed as a physician by our wholly owned subsidiary, 21st Century Oncology, LLC. Prior to founding the Company, Dr. Dosoretz served as attending physician at the Massachusetts General Hospital. He also was an Instructor and Assistant Professor of Radiation Medicine at Harvard Medical School and Research Fellow of the American Cancer Society. Upon moving to Fort Myers, Florida, he was appointed to the Clinical Faculty as a Voluntary Associate Professor at the University of Miami School of Medicine. He also has been a visiting Professor at Duke University Medical School and is a Distinguished Alumni Visiting Professor in Radiation Oncology at Massachusetts General Hospital, Harvard Medical School. Dr. Dosoretz is board certified in Therapeutic Radiology by the American Board of Radiology. He is a Fellow of the American College of Radiation Oncology and of the American College of Radiology and is a member of the International Stereotactic Radiosurgery Society, the American Society for Therapeutic Radiology and Oncology and the American Society of Clinical Oncology. Dr. Dosoretz graduated from the University of Buenos Aires School of Medicine with the Gold medal for being top of his class, and served his residency in Radiation Oncology at the Department of Radiation Medicine at the Massachusetts General Hospital, Harvard Medical School, where he was selected Chief Resident of the department. Dr. Dosoretz's role as founder and Chief Executive Officer of the Company, history with the Company and significant operating experience in the healthcare industry and extensive board experience led to the conclusion that Dr. Dosoretz should serve as a director of the Company.

Alejandro Dosoretz joined us in March 2011 in conjunction with our purchase of MDLLC where he serves in his current capacity as President and Chief Executive Officer of Medical Developers Cooperatief U.A. B.V. and Vidt Centro Medico. Prior to 2011, Mr. Dosoretz served as President and Chief Executive Officer of Vidt Centro Medico, where he held that position since 2003. He previously served as President of Provincia ART from 2001-2003. From 1983-2001, Mr. Dosoretz acted as an advisor to various healthcare companies in Argentina. Mr. Dosoretz has served on Argentina's

Congress' Health Advisory Committee, as a general advisor to Argentina's National Institute for Retirees and Pensioners, and has represented Argentina's Ministry of Foreign Affairs. He holds a Public Accounting degree from the University of Buenos Aires, School of Economics.

Constantine A. Mantz, M.D. joined us in 2000 and has served in his current capacity since February 2011 and formerly as Senior Vice President of Clinical Operations from March 2009 to February 2011. Dr. Mantz is also employed as a physician by our wholly owned subsidiary, 21st Century Oncology, Inc. Dr. Mantz received a Bachelor of Science Degree in Biology from Loyola University of Chicago. He earned his medical degree from the University of Chicago's Pritzker School of Medicine and did a surgical internship at the Hennepin County Medical Center in Minneapolis, Minnesota. Dr. Mantz completed his radiation oncology residency at the University of Chicago Hospitals, is Board Certified in Radiation Oncology by the American Board of Radiology and is a member of ACR, the American Medical Association, the American Society for Radiation Oncology and the Association of Freestanding Radiation Oncology Centers. During the course of his career, Dr. Mantz has been involved in numerous radiation therapy research projects, published professional journal articles and given lectures and presented abstracts and poster sessions at national meetings concerning cancer treatment. Dr. Mantz has special clinical interests in the study and treatment of prostate cancer and breast cancer. Dr. Mantz also has published and lectured on healthcare payment and delivery reform in oncology.

LeAnne M. Stewart joined the Company as the Chief Financial Officer in September, 2015. She previously served as Chief Financial Officer of CRC Health Group, Inc. ("CRC"), a private equity sponsored behavioral health organization, from July 2011 to February 2015. In February 2015, CRC was sold to a strategic buyer. Previously, Ms. Stewart was Senior Vice President and Chief Financial Officer of Granite Construction Incorporated from 2008 to 2010. From 1999 through 2007, Ms. Stewart held various roles at Nash Finch Company, including Senior Vice President and Chief Financial Officer from 2004 to 2007 and Vice President and Corporate Controller from 2000 to 2004. She was a Trustee for the College of St. Benedict from 2005 until 2014 and continues to serve as an ad hoc committee member. Ms. Stewart began her career at Ernst & Young in 1987, the same year that she became a Certified Public Accountant. Ms. Stewart became a Certified Management Accountant in 1992. She received a B.A. in Accounting from the College of St. Benedict in 1987 and an M.B.A. in Business Administration from the Wharton School at the University of Pennsylvania in 1997.

Gary Delanois moved into his current role as Senior Vice President, United States Operations in August 2014 after leading the growth of our integrated cancer care operations network of employed and affiliated physicians. Prior to joining the Company, Mr. Delanois was the Administrator for a large urology group practice that was one of the first multispecialty groups to join the Radiation Therapy Services, Inc. network. Mr. Delanois has more than 24 years of experience in the healthcare field, including assisting large, integrated healthcare delivery systems establish primary and specialty care physician networks. He began his career in business as a certified public accountant with Ernst & Young in Indianapolis, and later progressed to a Senior Manager position with Coopers & Lybrand in Southwest Florida before leaving to become Chief Operating Officer with a diversified and multi-divisional private company. Mr. Delanois is a certified public accountant and a member of the American Institute of CPAs and the Florida Institute of Public Accountants.

Joseph Biscardi joined us in June 1997 and serves as our Senior Vice President, Assistant Treasurer, Controller and Chief Accounting Officer. Prior to joining the Company, Mr. Biscardi worked for PricewaterhouseCoopers, LLP from 1993 to June 1997. Mr. Biscardi holds a B.B.A. in accounting from Hofstra University. He is a Certified Public Accountant in New York and a member of the American Institute of Certified Public Accountants, a member of the Healthcare Financial Management Association and a member of the Financial Executives International.

James L. Elrod, Jr. has been a member of our Board of Directors since February 2008 and served as Chairman of our Board of Directors from February 2008 to October 2014. Mr. Elrod is a Managing

Director of Vestar. Prior to joining Vestar in 1998, Mr. Elrod was Executive Vice President, Finance and Operations for Physicians Health Service, a public managed care company. Prior to that, he was a Managing Director and Partner of Dillon, Read & Co. Inc. Mr. Elrod is currently a director of National Mentor Holdings, Inc. and was a director of Joerns Healthcare, LLC until August 2010 and Essent Healthcare, Inc. until December 2011. Mr. Elrod received his A.B. from Colgate University and his MBA from Harvard Business School. Mr. Elrod's experience in the healthcare industry and collective board experience, financial experience, and diverse personal background led to the conclusion that Mr. Elrod should serve as a director of the Company.

Robert L. Rosner has been a member of our Board of Directors since February 2012 and the Chairman of our Board of Directors since October 2014. Mr. Rosner was a founding partner of Vestar in 1988 and currently serves as Co-President of the firm. Prior to founding Vestar, Mr. Rosner was with the Management Buyout Group at The First Boston Corporation. Mr. Rosner is currently a director of Institutional Shareholder Services, Inc., Triton Container International Limited, Tervita Corporation, and was previously a director of Seves S.p.a. until October 2014, Group OGF until October 2013, AZ Electronic Materials S.A. until November 2010, and Sunrise Medical, Inc. until December 2012. He serves as a member of the Graduate Executive Board of The Wharton School and is a Trustee of The Lawrenceville School. Mr. Rosner received a B.A. in Economics from Trinity College and an MBA with Distinction from The Wharton School at the University of Pennsylvania. Mr. Rosner's collective board experience, financial experience, history in governance matters and diverse personal background led to the conclusion that Mr. Rosner should serve as a director of the Company.

Erin L. Russell has been a member of our Board of Directors since February 2008. Ms. Russell is a Principal of Vestar, and is primarily focused on healthcare investments. Ms. Russell joined Vestar in 2000. Previously, she was a member of the mergers and acquisitions group at PaineWebber, Inc. Ms. Russell is a director of DeVilbiss Healthcare, LLC and was previously a director of DynaVox Inc. until January 2015. In addition, she serves on the National Advisory Board of the Jefferson Scholars Foundation at the University of Virginia. Ms. Russell received a B.S. from the McIntire School of Commerce at the University of Virginia and her MBA from Harvard Business School. Ms. Russell's experience in the healthcare industry, board experience and diverse personal background led to the conclusion that Ms. Russell should serve as a director of the Company.

Scott Lawrence has been a member of our Board of Directors since September 2014. Mr. Lawrence leads the team responsible for making significant minority investments in public companies seeking a constructive, longer-term relationship with CPPIB. He has more than 15 years of experience in the financial services sector. Mr. Lawrence joined the CPPIB's Private Investments group in 2005 as a Senior Principal to start the Infrastructure Investments group. Prior to that, he was an investment professional at Onex Corporation and held positions in both finance and operations at GE Capital Real Estate and GE Plastics. Mr. Lawrence holds an MBA from Harvard Business School and a Bachelor of Commerce (Honours) from Queen's University in Canada. He also serves on the board of TORC Oil & Gas Ltd., and has served on numerous other boards in a variety of industries. Mr. Lawrence's experience in the healthcare industry, board experience and diverse personal background led to the conclusion that Mr. Lawrence should serve as a director of the Company.

Christian Hensley has been a member of our Board of Directors since September 2014. Prior to joining CPPIB's Relationship Investments group in 2012, Mr. Hensley spent 11 years in the private equity and growth capital industry at Charterhouse Group and Planier Capital. As a principal investor, Mr. Hensley previously served on five company boards in the Healthcare Services, Business Services, Communications and Education sectors. Mr. Hensley began his career in the Investment Banking division of Salomon Brothers in New York City. He holds an MBA from Harvard Business School and a BA from the University of Pennsylvania. Mr. Hensley's experience in the healthcare industry, board experience and diverse personal background led to the conclusion that Mr. Hensley should serve as a director of the Company.

Howard M. Sheridan, M.D. is one of our founders and has served as a director since 1988. Dr. Sheridan planned and developed our first radiation treatment center. Prior to joining us, Dr. Sheridan served as President of the medical staff at Southwest Florida Regional Medical Center as well as chairman of the Department of Radiology. Dr. Sheridan currently serves as Chairman of Edison Bancshares, Inc. He previously served on the Advisory Board of Southeast Bank, N.A., and also served as a founding Director and member of the Executive Compensation and Loan Committee of Heritage National Bank from 1989 until September 1996, when Heritage was acquired by SouthTrust Corporation. Dr. Sheridan has practiced interventional radiology and diagnostic radiology in Fort Myers, Florida from 1975 until accepting the chairmanship in April 2004. Dr. Sheridan is a member of the American Medical Association, the Florida Medical Association and the American College of Radiology. Dr. Sheridan is the Vice President of 21st Century C.A.R.E., a non-profit dedicated to cancer patient assistance, research and education. Dr. Sheridan serves as Chairman of the Tulane Medical School's Board of Governors. He graduated from Tulane Medical School and completed his residency at the University of Colorado Medical Center. Dr. Sheridan is board certified by the American Board of Radiology and the American Board of Nuclear Medicine. Dr. Sheridan's board experience, years of experience in the healthcare industry, particularly in radiation oncology and with the Company, as well as his familiarity with all aspects of its business since its founding led to the conclusion that Dr. Sheridan should serve as a director of the Company.

Robert W. Miller joined the Board in December 2015 and previously served as a director of QuadraMed Corporation, from 2003 to 2010, where he was a member of the Audit Committee and the Chairman of the Compensation Committee, and as a director of Sonic Innovation, from 2006 to 2010, where he was a member of the Audit Committee and chairman of the Nominating and Governance Committee. Mr. Miller served on the Nonprofit Board of Directors of Grady Memorial Hospital in Atlanta, Georgia, where he served as Chairperson of its Audit Committee, from 2008 to 2014. In addition, he has served as an Adjunct Professor of Law at Emory University School of Law and Editor-in-Chief of the Journal of Health and Life Sciences Law. Mr. Miller has a B.A. from the University of Georgia and an LL.B. from Yale Law School.

William R. Spalding joined the Board in May 2016 and has served in a number of roles for PharMEDium Healthcare Holdings, Inc., including the Chief Executive Officer from January 2014 until November 2015. Prior to that, Mr. Spalding also served as Executive Vice President of CVS Caremark Corporation and Caremark Rx, Inc. Mr. Spalding was also a Senior Partner at King and Spalding, LLP, where he led the Private Equity & Investment Funds Practice and was a member of the firm's management committee. In addition, Mr. Spalding has served as a board member for MedVantx Corporation, PharMEDium Healthcare Holdings, Inc., SecureWorks Corp., and Carter Presidential Center Board of Counselors. Mr. Spalding has an A.B. from Dartmouth College and a J.D. from Washington & Lee University School of Law.

Effective as of September 26, 2014, we entered into the Amended Securityholders Agreement. The Amended Securityholders Agreement amends and restates the existing securityholders agreement such that, among other things, the Board of Directors is comprised of (i) two managers nominated by the Majority Preferred Holders, (ii) three managers nominated by funds affiliated with Vestar and (iii) Dr. Daniel E. Dosoretz and one manager he nominated after consultation with Vestar and the Majority Preferred Holders, subject to certain ongoing security ownership provisions. In addition, the size of our Board of Directors may be increased to include one independent director nominated by the Majority Preferred Holders at their election. Following an event of default under the Certificate of Designations, the parties to the Amended Securityholders Agreement agree to vote in favor of a changed board composition at the election of the Majority Preferred Holders.

Each director serves for annual terms and until his or her successor is elected and qualified. The Company's Board of Directors presently consists of seven members.

We are controlled by 21CI. 21CI does not have a formal policy regarding the procedures by which equityholders may recommend nominees to its Board of Managers. However, any recommendations received from equityholders pursuant to our submission procedures are generally evaluated in the same manner that potential nominees suggested by board members are evaluated. 21CI is party to the Amended Securityholders Agreement, pursuant to which the parties thereto must cause the Board of Managers of 21CI to consist of (i) two managers nominated by the Majority Preferred Holders, (ii) three managers nominated by Vestar and (iii) Dr. Daniel E. Dosoretz and one manager he nominated after consultation with Vestar and the Majority Preferred Holders. See "Item 13. Certain Relationships and Related Transactions, and Director Independence."

The Amended Securityholders Agreement provides for the establishment of an Executive Committee of the Board of Directors (the "Executive Committee"), which will carry out all activities of our Board of Directors to the extent permitted by applicable Delaware law. Our Board of Directors has the authority to appoint committees to perform certain management and administration functions. Our Board of Directors has also provided for an Audit Committee, a Compliance and Quality Committee, a Capital Allocation Committee and a Compensation Committee. Each committee is comprised of at least three members, one of which is designated by the Majority Preferred Holders, one of which is designated by a fund affiliated with Vestar and one of which is designated by Dr. Dosoretz, subject to certain ongoing security ownership provisions.

Messrs. Rosner, Hensley and Dr. Dosoretz serve on the Executive Committee, with Mr. Rosner serving as the Chair. The Executive Committee has and may exercise all the powers and authority of our Board of Directors in the management of the business and affairs of the Company, including to take and authorize actions that would otherwise be in the jurisdiction of our Board of Directors, except to the extent (i) such delegation of authority would not be permitted under applicable Delaware law and (ii) the power and authority is reserved to another existing committee under its existing charter. The Executive Committee did not meet during 2015 as all actions taken in the jurisdiction of the Board of Directors were taken by the approval of the full Board of Directors. The Executive Committee operates under a written charter, which was effective as of September 26, 2014.

Messrs. Elrod and Hensley and Ms. Russell serve on the Audit Committee, with Mr. Elrod serving as the Chair. The Audit Committee is responsible for reviewing and monitoring our accounting controls, related party transactions and internal audit functions and recommending to the Board of Directors the engagement of our outside auditors. The Audit Committee met sixteen times during 2015. The Audit Committee operates under a written charter, which was amended and restated effective as of February 10, 2015. Our Board of Directors has determined that each of its members is financially literate. However, as we are privately held and controlled by affiliates of Vestar, our Board of Directors has determined that it is not necessary to designate one or more of its Audit Committee members as an "audit committee financial expert" at this time.

Messrs Miller, Elrod, and Hensley serve on the Compliance and Quality Committee. The Compliance and Quality Committee is responsible for overseeing, monitoring and evaluating the

Company's compliance and quality assurance systems and initiatives. The committee also reviews and monitors the systems in place to maintain and identify deviations from the Company's compliance standards, including matters related to compliance with federal health care program requirements and other compliance obligations. The Compliance and Quality Committee did not meet during 2015. The Compliance and Quality Committee operates under a written charter, which was effective as of December 14, 2015.

Ms. Russell, Mr. Hensley and Dr. Dosoretz serve on the Capital Allocation Committee, with Ms. Russell serving as the Chair. The Capital Allocation Committee reviews and either approves, on behalf of the Board of Directors, or recommends to the Company's Board of Directors for approval, all material expenditures related to equipment, acquisitions and de novo development, among others. The Capital Allocation Committee met sixteen times during 2015. The Capital Allocation Committee operates under a written charter, which was amended and restated effective as of September 26, 2014.

Messrs. Rosner, Sheridan and Lawrence serve on the Compensation Committee, with Mr. Rosner serving as the Chair. The Compensation Committee reviews and either approves, on behalf of our Board of Directors, or recommends to our Board of Directors for approval, the annual salaries and other compensation of our executive officers and individual unit incentive awards. The Compensation Committee also provides assistance and recommendations with respect to our compensation policies and practices and assists with the administration of our compensation plans. The Compensation Committee met five times during 2015. The Compensation Committee operates under a written charter, which was amended and restated effective as of September 26, 2014.

Our Board of Directors expects its members, as well as its officers and employees, to act ethically at all times and to acknowledge in writing their adherence to the policies comprising its code of conduct and as applicable, in Our Code of Ethics for Senior Financial Officers and Chief Executive Officer (our "Code of Ethics"). Our Code of Ethics is posted on our website located at www.21co.com under the heading "Code of Conduct for Principal Executive Officers and Senior Financial Officers." We intend to disclose any amendments to our Code of Ethics and any waiver from a provision of such code, as required by the SEC, on our website within five business days following such amendment or waiver. Copies of our Code of Ethics are available upon request, without charge, by writing or telephoning us at 21^st Century Oncology Holdings, Inc., 2270 Colonial Boulevard, Fort Myers, Florida 33907, Attn: Corporate Secretary, (239) 931-7275.

References in this Item 11 to "we", "us", "our" and "the Company" are references to 21^st Century Oncology Holdings, Inc. and its subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates, unless the context requires otherwise or unless indicated otherwise.

The following discussion and analysis of compensation arrangements of our named executive officers should be read together with the compensation tables and related disclosures with respect to our current plans, considerations, expectations and determinations regarding compensation.

The primary objectives of our executive compensation policies are to attract and retain talented executives to effectively manage and lead our Company and create value for our equityholders. Through our executive compensation policies, we seek to align the level of our executive compensation with the achievement of our corporate objectives, thereby aligning the interests of our management with those of our equityholders.

The compensation of our named executive officers generally consists of base salary, annual cash incentive payments, long-term equity incentives and other benefits and perquisites. In addition, our named executive officers are eligible to receive severance or other benefits upon termination of their employment with us. In setting an individual executive officer's initial compensation package and the relative allocation among different types of compensation, we consider the nature of the position being filled, the scope of associated responsibilities, the individual's qualifications, as well as Vestar's experience with other companies in its investment portfolio and general market knowledge regarding executive compensation.

The discussion below explains our compensation decisions with respect to fiscal year 2014, our last fiscal year. Throughout this Annual Report, the following officers are referred to as our named executive officers: (i) Daniel E. Dosoretz, M.D., our Chief Executive Officer since April 1997, (ii) Constantine A. Mantz, M.D., our Chief Medical Officer since February 2011, (iii) Norton L. Travis, who had been our Executive Vice President and General Counsel since joining us in February 2008 until he resigned effective December 31, 2014 and (iv) Bryan J. Carey who had been our Vice Chairman and Chief Financial Officer since January 2012 and President since February 2014 until he resigned effective August 25, 2014.

The compensation policies for our named executive officers have been designed based upon our view that the ownership by management of equity interests in our business is the most effective mechanism for providing incentives for management to maximize gains for equityholders, that annual cash incentive compensation should be linked to metrics that create value for our equityholders and that other elements of executive compensation should be set at levels that are necessary, within reasonable parameters, to successfully attract, retain and motivate optimally talented and experienced executives.

Our Compensation Committee evaluates and determines the levels and forms of individual compensation for our named executive officers. Under the term of its charter, our Compensation Committee reviews and either approves, on behalf of the Company's Board of Directors, or recommends to the Company's Board of Directors for approval the annual salaries and other compensation for our executive officers and individual unit incentive awards. The Compensation Committee develops and determines all components of executive officer compensation, as well as provides assistance and recommendations to the Company's Board of Directors with respect to our incentive-compensation plans, equity-based plans, compensation policies and practices and assists with the administration of our compensation and benefit plans. Messrs. Rosner, Sheridan and Lawrence serve on the Compensation Committee, which met once during 2013 and two times during 2014.

Our Compensation Committee determines or recommends to the Board of Directors for determination the compensation of each of our named executive officers and solicits input from our Chief Executive Officer in determining the compensation (particularly base salary and annual cash

incentive payments) of our named executive officers. The Compensation Committee does not retain compensation consultants to review our policies and procedures with respect to executive officer compensation

In the review and establishment of our compensation program, we consider the anticipated accounting and tax implications to us and our named executive officers. While we consider the applicable accounting and tax treatment of alternative forms of equity compensation, these factors alone are not dispositive, and we also consider the cash and non-cash impact of the programs and whether a program is consistent with our overall compensation philosophy and objectives.

Messrs. Rosner, Sheridan and Lawrence serve on the Compensation Committee. No executive officer of the Company served as a director of any corporation for which any of these individuals served as an executive officer, and there were no other compensation committee interlocks with the companies with which these individuals or the Company's other directors are affiliated.

Dr. Sheridan has certain related party relationships with us requiring disclosure under the rules and regulations of the SEC. These related party relationships include, among other things, ownership interests held by Dr. Sheridan in real estate partnerships, which own treatment centers and properties leased by the Company, a medical services provider, to which we provide billing and collections services and an insurance company which provides us with malpractice insurance coverage. See "Item 13. Certain Relationships and Related Transactions, and Director Independence." Dr. Sheridan is one of our founders and previously served as Chairman of our Board of Directors until February 2008.

We regularly assess our compensation policies and practices in response to current public and regulatory concern about the link between incentive compensation and excessive risk taking by corporations. We have concluded that our compensation program does not motivate imprudent risk taking and any risks involved in compensation are not reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, we believe that the following risk oversight and compensation design features guard against excessive risk-taking:

We generally deliver executive compensation through a combination of annual base salary, annual cash incentive payments, long-term equity incentives and other benefits and perquisites. We believe that this mix of elements is useful in achieving our primary compensation objectives. The payment of executive compensation is determined by the Compensation Committee, and we do not target any particular form of compensation to encompass a majority of annual compensation provided to our executive officers.

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our named executive officers for services rendered to us during the prior two fiscal years.

		Salary		Bonus(1)		Stock Awards(2)		Non-Equity Incentive Plan Compensation		Other Annual Compensation			Total

Daniel E. Dosoretz M.D.,	2014	$	1,047,690	$	37,086	$	—	$	850,000	$	179,363	(3)	$	2,114,139
Chief Executive Officer and	2013		1,200,000		35,284		5,534,725		400,000		857,039	(3)		8,027,048
Director
Constantine A. Mantz, M.D.,	2014		1,730,770		283,206		—		—		180			2,014,156
Chief Medical Officer	2013		1,245,386		260,377		510,772		—		149			2,016,684
Norton L. Travis	2014		900,000		—		—		—		113,308	(4)		1,013,308
Executive Vice President	2013		900,000		—		2,284,712		—		441,958	(4)		3,626,670
and General Counsel
Bryan J. Carey	2014		527,261		—		—		—		303,323	(4)		830,584
Chief Financial Officer	2013		600,000		300,000		3,055,052		—		603,562	(4)		4,558,614

(1): The amounts set forth in this column represent discretionary bonuses approved by the Company's Board of Directors except for Dr. Dosoretz's 2014 and 2013 bonuses, which were based on production and ancillary bonus arrangements set forth in his physician employment agreement.
(2): No stock awards were granted in 2014. 2013 stock awards granted on December 9, 2013 with the initial grants under the 21CI 2013 equity-based incentive plan.
(3): These amounts consist of: (i) compensation associated with the personal use of the Company's corporate aircraft in 2014 and 2013 in the amounts of $178,571 and $205,105, respectively, (ii) life insurance premiums paid by the Company in 2014 and 2013 of $792 and $684, respectively, and (iii) employer 401(k) match of $1,250 in 2013. Includes a one-time incentive payment for the closing of OnCure and other corporate development activities in 2013 of $650,000.
(4): These amounts consist of life insurance premiums paid by the Company in 2014 and 2013, and employer 401(k) match paid in 2013. Includes one-time incentive payments for the closing of OnCure as well as other corporate development activities in 2013 which total $440,000 and $550,000 for Mr. Travis and Mr. Carey, respectively. Mr. Carey also received payment of $48,428 and $52,032 as a gross-up payment for the vesting of his preferred units in 2014 and 2013, respectively. Mr. Travis received $112,516 in accrued vacation and other benefits in 2014. In addition Mr. Carey received separation payments of $248,259 and compensation associated with the personal use of the Company's corporate aircraft of $6,413 in 2014.

We have entered into a Second Amended and Restated Executive Employment Agreement, dated as of May 6, 2014 and amended on September 25, 2014, with Daniel E. Dosoretz, M.D., pursuant to which Dr. Dosoretz serves as our Chief Executive Officer. The employment term is a five-year term with automatic two-year extensions thereafter unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement.

Dr. Dosoretz is currently entitled to receive an annual base salary of $300,000 and entitled to such increases in his annual base salary as may be determined by the Company's Board of Directors or Compensation Committee from time to time. In the event of a Change of Control of the Company (as defined in the employment agreement), a material deleveraging of the Company or a material

refinancing or recapitalization of the Company, Dr. Dosoretz's annual base salary will be increased to $1,200,000. Dr. Dosoretz is also eligible to earn an annual performance-based incentive bonus of not less than $300,000 based upon the attainment of one or more pre-established performance goals established by the Board of Directors or the Compensation Committee.

Dr. Dosoretz is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. Dr. Dosoretz is entitled to use the Company's corporate jet in the conduct of business on behalf of the Company and up to 300 hours of usage per year for personal use. We have also agreed to indemnify Dr. Dosoretz in connection with his capacity as our director and officer.

If Dr. Dosoretz resigns or otherwise voluntarily terminates his employment and the termination is not for good reason during the term of the agreement, he will be entitled to receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date. Dr. Dosoretz shall also receive any nonforfeitable benefits already earned and payable to him under the terms of any deferred compensation, incentive or other benefit plan maintained by the Company, payable in accordance with the terms of the applicable plan (all amounts in this section are referred to as "Accrued Compensation").

If Dr. Dosoretz's employment is terminated by us without "cause" (as defined in his employment agreement) or by Dr. Dosoretz for "good reason" (as defined in his employment agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of Accrued Compensation, the Company is obligated to make monthly payments to Dr. Dosoretz for a period of 24 months after his termination date. Each monthly payment shall be equal to ¹/12^th of the sum of (i) Dr. Dosoretz's annual base salary, as in effect at the termination date, plus (ii) the amount equal to the sum of his bonuses for the three prior years divided by three. Dr. Dosoretz shall also be permitted to continue participation at the Company's expense in all benefit and insurance plans, coverage and programs for one year in which he was participating prior to the termination date.

If Dr. Dosoretz's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other disability benefits payable pursuant to any long- term disability plan or other disability program or insurance policies maintained or provided by the Company. If Dr. Dosoretz dies during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the Board of Director's good faith estimated annual cash incentive payment for the fiscal year in which the death occurs (on a pro rata basis for the number of whole or partial months in the fiscal year in which the death occurs through the date of death) based on the performance of the Company at the time of his death. In addition, the death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan maintained by the Company shall be paid to the beneficiary designated by Dr. Dosoretz in accordance with the terms of the applicable plan.

Should Dr. Dosoretz be terminated as Chief Executive Officer for any reason, notwithstanding any other provision in the employment agreement, Dr. Dosoretz may elect to remain employed by the Company as a senior physician providing radiation oncology services at the Company's and its subsidiaries' integrated cancer care centers and that, under such circumstances, Dr. Dosoretz and the Company, or one of its affiliates, shall enter into a new employment agreement pursuant to which Dr. Dosoretz will receive an annual base salary of $1,000,000 and be eligible to participate in such other performance, bonus and benefit plans afforded other senior physicians of the Company and receive comparable fringe benefits to such other senior physicians.

Dr. Dosoretz is also subject to a covenant not to disclose our confidential information during his employment term, and at all times during his employment term and ending three years after his termination date, Dr. Dosoretz covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Dr. Dosoretz breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

We have entered into a physician employment agreement with Constantine A. Mantz, dated effective as of July 1, 2003 and as amended, pursuant to which Dr. Mantz serves as our Chief Medical Officer and provides medical services as a radiation oncologist. The employment term commenced on July 1, 2003 and is a five-year term with automatic one-year extensions thereafter unless either party provides the other 90 days' prior written notice of its intention not to renew the employment agreement. Dr. Mantz is currently entitled to receive an annual base salary of $1,620,000 and the Company shall be obligated to pay all medical malpractice insurance premiums during employment and any "tail" coverage premiums after termination or expiration of this agreement if Dr. Mantz's employment is terminated without cause, or due to death or disability. Further, during Dr. Mantz's employment, the Company will provide basic hospital and major medical insurance coverage to him to the extent obtainable with coverage amounts as the Company shall in its sole discretion determine and subject to the limitations and restrictions of the Company's group health plan.

In addition, Dr. Mantz is entitled to receive an annual production incentive bonus of up to $1,000,000 based on a pro rata share of 19.0% of the collections of professional fees (as defined) over and above physician salaries, benefits, coverage and other defined reductions with respect to the Company's radiation oncology centers and certain other ancillary services provided in the Lee County, Florida local market.

If an event of termination occurs for any reason, Dr. Mantz shall be entitled to (i) receive his Accrued Compensation determined as of the effective date of termination and not theretofore paid and (ii) receive or continue to receive benefits due or payable under any pension or profit sharing plan and any disability, medical and life insurance plans maintained by the Company.

Dr. Mantz is also subject to a covenant not to disclose our confidential information during his employment term and at all times during his employment term and ending two years after his termination date, Dr. Mantz has agreed (i) not to practice radiation oncology at any center in Lee, Collier or Charlotte County, Florida or at those hospitals in Lee, Collier or Charlotte County, Florida where physicians employed by the Company or an affiliate of the Company are, at the time of such termination, practicing radiation oncology, and (ii) not to solicit or hire any of our employees.

We entered into an executive employment agreement, dated effective as of February 21, 2008, with Norton L. Travis, pursuant to which Mr. Travis served as our Executive Vice President and General Counsel. The employment term was a five-year term with automatic two-year extensions thereafter unless either party provided the other 120 days' prior written notice of its intention not to renew the employment agreement. On February 3, 2011, the employment agreement was amended to provide for a termination date of February 3, 2016 with automatic extensions thereafter unless either party

provided the other 120 days prior written notice not to renew the agreement. Pursuant to an amendment dated as of June 11, 2012, Mr. Travis had the option to extend the initial term of his employment by an additional two years at any time prior to the second anniversary of the date of execution the amendment.

Mr. Travis was entitled to receive an annual base salary of $900,000 and entitled to such increases in his annual base salary as may be determined by the Company's Board of Directors or compensation committee from time to time. With respect to each full fiscal year during the employment term, Mr. Travis was also eligible to earn an annual cash incentive payment of not less than $300,000, (as the Company's Board of Directors may, but not be obligated to adjust from time to time, the "Travis Target Bonus"), the actual amount of the bonus to be determined by the Company's Board of Directors pursuant to a bonus plan based on factors including, without limitation, the Company's PF Adjusted EBITDA and net debt targets. Mr. Travis was also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. We also agreed to indemnify Mr. Travis in connection with his capacity as an officer.

As part of our overall plan for the cost-cutting and consolidation of corporate services and overhead, we determined not to renew the office lease for our Great Neck, New York based legal department when the lease expired at the end of 2014, and instead to relocate the legal department to its corporate headquarters in Ft. Myers, Florida. The Company's Executive Vice President and General Counsel, Norton L. Travis, whose employment agreement provided that he would be based in New York and not be required to relocate, advised us that, for personal and family reasons, he would not relocate to Ft. Myers. As a result, the Company and Mr. Travis mutually agreed that effective as of December 31, 2014, Mr. Travis would resign as the Company's Executive Vice President and General Counsel, and assume a new role as a consultant to the Company to assist in the transition of the Company's legal services. Because Mr. Travis resigned, he was entitled to receive his Accrued Compensation.

Mr. Travis is also subject to a covenant not to disclose our confidential information during his employment term, and ending two years after his termination date, Mr. Travis covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Mr. Travis breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

We entered into an executive employment agreement, dated effective as of January 1, 2012, with Bryan J. Carey, pursuant to which Mr. Carey served as President, Vice Chairman and Chief Financial Officer. The employment term was a five-year term beginning January 1, 2012 with automatic two-year extensions thereafter unless either party provided the other 120 days' prior written notice of its intention not to renew the employment agreement.

Mr. Carey was entitled to receive an annual base salary of at least $600,000 and had the opportunity to earn an initial annual cash performance incentive bonus equal to 85% of his annual base salary based on criteria as reasonably agreed to between Mr. Carey and the Chief Executive Officer of the Company, with reasonable approval from the Compensation Committee. For each of 2012 and 2013, the minimum amount of the performance bonus payable to Mr. Carey was $200,000

and $300,000, respectively. Mr. Carey also had the opportunity to earn an additional bonus upon achievement of related operating performance targets. Mr. Carey was also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. We also agreed to indemnify Mr. Carey in connection with his capacity as an officer.

On August 25, 2014, Bryan J. Carey resigned as the President, Chief Financial Officer and Vice Chairman of the Company, as a member of the Company's Board of Directors, and from the offices and directorships he held with the Company's subsidiaries. His resignation was not due to any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Mr. Carey had the right to terminate his employment at any time for any reason. Because Mr. Carey resigned, he was entitled to receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date. Mr. Carey also received any nonforfeitable benefits already earned and payable to him under the terms of any deferred compensation, incentive or other benefit plan maintained by the Company, payable in accordance with the terms of the applicable plan.

Mr. Carey is also subject to a covenant not to disclose our confidential information during his employment term, and ending 24 months after his termination date, Mr. Carey covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Mr. Carey breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

We entered into an executive employment agreement, dated effective as of September 14, 2015, with LeAnne M. Stewart, pursuant to which Ms. Stewart serves as Chief Financial Officer. The employment term is a three-year term beginning September 14, 2015, with up to two automatic one-year extensions thereafter, unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement.

Ms. Stewart is entitled to receive an annual base salary of at least $475,000 and has the opportunity to earn an annual cash performance-based incentive bonus equal to 85% of her annual base salary, based on objectives to be defined by the Compensation Committee, beginning in 2016. Ms. Stewart was guaranteed a bonus of 40% of her base salary for 2015. The bonus amount will be earned upon completion of the performance period and payable on or before March 15 of the year following the performance period. Ms. Stewart is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. We have also agreed to indemnify Ms. Stewart in connection with her capacity as an officer.

Ms. Stewart may terminate her employment at any time for any reason. If Ms. Stewart resigns or otherwise voluntarily terminates her employment and the termination is not for "good reason" during the term of her employment (as defined in her employment agreement), she will be entitled to receive (i) her base salary and unreimbursed expenses accrued and unpaid through the date of termination, (ii) her earned and unpaid annual cash performance incentive bonus, if any, for the fiscal year prior to the termination date, (iii) any nonforfeitable benefits already earned and payable to her under the terms of any deferred compensation, pension, incentive or other benefit and perquisite plan maintained by the Company, payable in accordance with the terms of the applicable plan (collectively, the "Accrued

Compensation"). If Ms. Stewart's employment is terminated by the Company for "cause" (as defined in her employment agreement), the amount she shall be entitled to receive will be limited to the Accrued Compensation, exclusive of the payment in clause (ii) above.

If Ms. Stewart's employment is terminated by us without "cause" or by Ms. Stewart for "good reason" (as each such term is defined in her employment agreement), or we undergo a change in control (as defined in her employment agreement), subject to her execution of a release of claims against us and her continued compliance with the restrictive covenants, and in addition to the payment of the Accrued Compensation, we are obligated to make monthly payments to Ms. Stewart for a period of 12 months after her termination date. Each monthly payment shall be equal to one-twelfth of the sum of (i) Ms. Stewart's annual base salary, as in effect at the termination date, plus (ii) the target annual performance incentive bonus, if terminated before the end of year two. After year two, the annual performance incentive bonus will be calculated based on an average of the years prior to termination date. In addition, if Ms. Stewart should elect continued Consolidated Omnibus Budget Reconciliation Act ("COBRA") coverage, we shall pay, during the period Ms. Stewart actually continues such coverage and up to a maximum of 12 months, the same percentage of monthly premium costs for COBRA continuation coverage as it pays of the monthly premium costs for medical coverage for active senior executives generally.

If Ms. Stewart's employment terminates due to a "disability" (as defined in her employment agreement), she will be entitled to receive the Accrued Compensation, and subject to her execution of a release of claims against us and her continued compliance with the restrictive covenants, we are obligated to make monthly payments to Ms. Stewart for 12 months following her termination date, with each such payment equal to 1/12 of Ms. Stewart's annual base salary, as in effect at the termination date. If Ms. Stewart's employment terminates due to her death, her estate will be entitled to receive the Accrued Compensation, and we are obligated to make monthly payments to Ms. Stewart's estate for 12 months following her date of death, with each such payment equal to 1/12 of Ms. Stewart's annual base salary, as in effect on the date of death.

Ms. Stewart is also subject to a covenant not to disclose our confidential information during and at any time after her employment term. During her employment term and ending 12 months after her termination date, Ms. Stewart covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Ms. Stewart breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

The following table provides information regarding outstanding equity awards held by our named executive officers as of the end of fiscal year 2014.

The Company has adopted the Executive Bonus Plan to provide certain senior level employees of the Company with an opportunity to receive additional compensation based on the "Equity Value" (as defined in the plan and described in general terms below) of 21CI, the ultimate parent holding company of the Company, in connection with a Company sale or an initial public offering. Upon the occurrence of the first Company sale or initial public offering to occur following the effective date of the plan, which is December 9, 2013, a bonus pool will be established equal in value to five percent (5%) of the Equity Value of 21CI, subject to a maximum bonus pool of $12,650,000. Each participant in the plan will participate in the bonus pool based on the participant's award percentage. Dr. Dosoretz and Dr. Mantz, received an award percentage under the plan equal to 33.6% and 2.7%, respectively.

The right to receive payment under the plan generally is subject to a participant's continued employment with the Company or its affiliates through the date of payment. However, in the case of Dr. Dosoretz, in the event of his termination of employment by the Company without "cause", by him for "good reason" or as a result of his death or "disability" (each, as defined in his employment agreement), in any case, on or following the occurrence of the applicable liquidity event, any unvested portion of his award will become fully vested as of the date of such termination, and payment in respect thereof (if applicable) will be made to him within thirty (30) days following the date of such termination.

In addition to the right to receive payment of the bonus amounts under the plan, Dr. Dosoretz will be entitled to a tax "gross up" payment payable in cash and intended to compensate each such executive for the loss of tax benefits resulting from the treatment of awards under the plan being subject to taxation as ordinary income as opposed to long-term capital gains income.

The following tables provide information concerning certain of our employees who are not named executive officers but who serve as a director on the Company's Board of Directors. We do not provide any remuneration to the members of the Company's Board of Directors other than to the directors listed below and the compensatory arrangements with certain of our directors designated as a named executive officer other than for director services. See "Item 11. Executive Compensation" and "Item 13. Certain Relationships and Related Transactions, and Director Independence." Shares and stock options are not included in this table because none were issued during fiscal years 2014 or 2013 and none were outstanding at either fiscal year-end.

We have entered into an Executive Employment Agreement, dated effective as of February 21, 2008, with Howard M. Sheridan, M.D., pursuant to which Dr. Sheridan provides corporate executive services and support in such areas as strategic planning, mergers and acquisitions, and physician, payer and hospital relationships. The employment term is a three-year term with automatic two-year extensions thereafter unless either party provides the other 120 days prior written notice of its intention not to renew the employment agreement.

Dr. Sheridan is currently entitled to receive an annual base salary of $300,000, which effective September 26, 2014 was reduced to $100,000 and is entitled to such increases in his annual base salary as may be determined by the Company's Board of Directors or compensation committee from time to time. With respect to the 2011 fiscal year and each full fiscal year during the employment term, Dr. Sheridan is eligible to receive a performance incentive bonus at the discretion of the Company's Board of Directors, or it's Compensation Committee.

Dr. Sheridan is also entitled to use the Company's corporate jet in connection with the conduct of business on behalf of the Company and he is entitled to 25 hours of usage per year for personal use. We have also agreed to indemnify Dr. Sheridan in connection with his capacity as a director.

If Dr. Sheridan resigns or otherwise voluntarily terminates his employment and the termination is not for good reason during the term of the agreement, he will be entitled to receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date. Dr. Sheridan shall also receive any Accrued Compensation.

If Dr. Sheridan's employment is terminated by us without "cause" (as defined in his employment agreement) or by Dr. Sheridan for "good reason" (as defined in his employment agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of Accrued Compensation, the Company is obligated to make monthly payments to Dr. Sheridan for a period of 12 months after his termination date. Each monthly payment shall be equal to ¹/12^th of the sum of (i) Dr. Sheridan's annual base salary, as in effect at the termination date, plus (ii) his bonus for the year immediately prior to the year during which termination occurs.

If Dr. Sheridan's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other disability benefits payable pursuant to any long- term disability plan or other disability program or insurance policies maintained or provided by the Company. If Dr. Sheridan dies during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the board of director's good faith estimated annual cash incentive payment for the fiscal year in which the death occurs (on a pro rata basis for the number of whole or partial months in the fiscal year in which the death occurs through the date of death) based on the performance of the Company at the time of his death. Dr. Sheridan's employment agreement also contains customary confidentiality and non-solicitation terms.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

21CH is a wholly owned subsidiary of 21CI, whose members include funds affiliated with Vestar and certain members of management. The respective percentages of beneficial ownership of Class A voting equity units of 21CI, Class MEP non-voting equity units of 21CI, Class O non-voting equity units of 21CI, Class M non-voting equity units of 21CI and non-voting preferred equity units of 21CI owned is based on 10,308,594 shares of Class A voting equity units of 21CI, 725,366 shares of Class MEP non-voting equity units of 21CI, 72,806 shares of Class O non-voting equity units of 21CI, 66,500 shares of Class M non-voting equity units of 21CI and 543,258 shares of non-voting preferred equity units of 21CI outstanding as of March 1, 2015. CPPIB owns 385,000 shares of Series A convertible redeemable preferred stock as of March 1, 2015. This information has been furnished by the persons named in the table below or in filings made with the SEC. Fractional units have been rounded to the nearest integer. Unless otherwise indicated, the address of each of the directors and executive officers is c/o 21^st Century Oncology, Inc., 2270 Colonial Boulevard, Fort Myers, Florida 33907.

	Class A Units					Class MEP Units(3)					Class O Units(3)					Class M Units(3)					Preferred Units

Name of Beneficial Owner(1)	Class A Units					Class MEP Units(3)					Class O Units(3)					Class M Units(3)					Preferred Units
Name of Beneficial Owner(1)	Number(1)		Percent			Number(1)		Percent			Number(1)		Percent			Number(1)		Percent			Number(1)		Percent
Principal shareholder:
Funds affiliated with Vestar(2)		8,286,564		80.4	%		—		—			—		—			—		—			437,134		80.5	%
Directors and Executive Officers:
Daniel E. Dosoretz, M.D.(4)		718,374		7.0	%		70,000		9.7	%		32,000		44.0	%		28,500		42.9	%		37,896		7.0	%
Constantine A. Mantz, M.D.		7,968		*			45,455		6.3	%		5,185		7.1	%		4,056		6.1	%		420		*
James L. Elrod, Jr.(5)		—		—			—		—			—		—			—		—			—		—
Robert L. Rosner(6)		—		—			—		—			—		—			—		—			—		—
Erin L. Russell(7)		—		—			—		—			—		—			—		—			—		—
James H. Rubenstein, M.D.(8)		355,837		3.5	%		1,818		*			—		—			—		—			18,722		3.5	%
Howard M. Sheridan, M.D.		179,277		1.7	%		—		—			—		—			—		—			9,457		1.7	%
Scott Lawrence		—		—			—		—			—		—			—		—			—		—
Christian Hensley		—		—			—		—			—		—			—		—			—		—
All directors and executive officers as a group (16 persons)		1,612,188		15.6	%		362,728		50.0	%		57,620		79.1	%		56,576		85.1	%		85,048		15.7	%

*

Represents less than 1%.

(1)

A "beneficial owner" of a security is determined in accordance with Rule 13d-3 under the Exchange Act and generally means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares:

•: voting power which includes the power to vote, or to direct the voting of, such security; and/or
•: investment power which includes the power to dispose, or to direct the disposition of, such security.

In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of equity units subject to options held by that person that are currently exercisable or exercisable within 60 days of March 1, 2015 are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.

(2)

Includes 4,260,078 shares of Class A voting equity units of 21CI and 224,728 shares of non-voting preferred equity units of 21CI held by Vestar Capital Partners V, L.P., 1,171,620 shares of Class A voting equity units of 21CI and 61,806 shares of non-voting preferred equity units of 21CI held by Vestar Capital Partners V-A, L.P., 70,756 shares of Class A voting equity units of 21CI and 3,733 shares of non-voting preferred equity units of 21CI held by Vestar Executives V, L.P. and 234,398 shares of Class A voting equity units of 21CI and 12,365 shares of non-voting preferred equity units of 21CI held by Vestar Holdings V, L.P. Vestar Associates V, L.P. is the general partner of Vestar Capital Partners V, L.P., Vestar Capital Partners V-A, L.P., Vestar Executives V, L.P. and Vestar Holdings V, L.P. and Vestar Managers V Ltd. is the general partner of Vestar Associates V, L.P. As such, Vestar Managers V Ltd. has sole voting and dispositive power over the shares held by Vestar and its affiliated funds. Vestar's co-investors, which Vestar controls, own 2,549,712 shares of Class A voting equity units of 21CI, or approximately 25% of Class A voting equity units of 21CI, and 134,503 shares of non-voting preferred equity units of 21CI, or approximately 25% of the preferred equity units of 21CI. As such, Vestar and its affiliates control, and may be deemed to beneficially own 8,286,564 shares of Class A voting equity units of 21CI, or approximately 80% of the Class A voting equity units of 21CI, and 437,134 shares of the non-voting preferred equity units of 21CI, or approximately 80% of the preferred equity units of 21CI, through its ability to directly or indirectly control its co-investors. Each of Vestar and its affiliated funds disclaims beneficial ownership of such securities, except to the extent of its pecuniary interest therein. The address for each of Vestar and its affiliated funds is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.

(3): Class MEP units, Class O units and Class M units are non-voting equity units of 21CI issued under 21CI's limited liability company agreement. With respect to the Class MEP units, certain employees are eligible to receive incentive unit awards from an equity pool representing up to 12% of the common equity value of 21CI following return of preferred capital.
(4): These shares are held in trusts for which Dr. Dosoretz and his descendants are beneficiaries. Dr. Dosoretz is the trustee of the trusts and as such, has sole voting and investment power with respect to the shares in the trusts.
(5): Mr. Elrod is a managing director of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of 21CI and the non-voting preferred equity units of 21CI held by Vestar, its affiliated funds and its co-investors. Mr. Elrod disclaims beneficial ownership of such securities, except to the extent of his pecuniary interest therein. The address for Mr. Elrod is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.
(6): Mr. Rosner is a managing director of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of 21CI and the non-voting preferred equity units of 21CI held by Vestar, its affiliated funds and its co-investors. Mr. Rosner disclaims beneficial ownership of such securities, except to the extent of his pecuniary interest therein. The address for Mr. Rosner is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.
(7): Ms. Russell is a principal of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of 21CI and the non-voting preferred equity units of 21CI held by Vestar, its affiliated funds and its co-investors. Ms. Russell disclaims beneficial ownership of such securities, except to the extent of her pecuniary interest therein. The address for Ms. Russell is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.
(8): These shares are held in trusts for which Dr. Rubenstein and his descendants are beneficiaries. Dr. Rubenstein is the trustee of the trusts and as such, has sole voting and investment power with respect to the shares in the trusts.

For information relating to Securities Authorized for Issuance Under Equity Compensation Plans, see "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities," incorporated by reference herein.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Our Board of Directors has adopted a written policy or procedure for the review, approval and ratification of related party transactions, and the Audit and Compliance Committee charter requires the Audit and Compliance Committee to review all relationships and transactions in which 21C and its employees, directors and officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Based on all the relevant facts and circumstances, our Audit and Compliance Committee will decide whether the related-party transaction is appropriate and will approve only those transactions that are in the best interests of the Company.

Set forth below are certain transactions and relationships between us and our directors, executive officers and equityholders that have occurred during the last three years.

In California, Delaware, Maryland, Massachusetts, Michigan, Nevada, New York and North Carolina, we have administrative services agreements with professional corporations owned by certain of our directors, executive officers and equityholders, who are licensed to practice medicine in such states. Drs. Dosoretz, Rubenstein and Michael J. Katin, M.D., a former director on the Company's Board of Directors as well as a director on the boards of directors of several of our subsidiaries and a holder of equity in 21CI, own interests in these professional corporations ranging from 0% to 100%.

We have entered into these administrative services agreements in order to comply with the laws of such states which prohibit us from employing physicians. Our administrative services agreements generally obligate us to provide treatment center facilities, staff and equipment, accounting services, billing and collection services, management and administrative personnel, assistance in managed care contracting and assistance in marketing services. Terms of the agreements are typically 20-25 years and renew automatically for successive five-year periods, with certain agreements having 30 year terms and automatically renewing for successive one-year periods. The administrative services agreements also contain restrictive covenants that preclude the professional corporations from providing substantially similar healthcare services, hiring another management services organization and soliciting our employees, customers and clients for the duration of the agreement and some period after termination,

usually three years. Monthly fees for such services may be computed on a fixed basis, percentage of net collections basis, or on a per treatment basis, depending on the particular state requirements. The administrative services fees paid to us by such professional corporations under the administrative services agreements were approximately $58.8 million, $66.0 million and $73.2 million, for the years ended December 31, 2012, 2013 and 2014, respectively.

In addition, we have stock transfer agreements with the professional corporations owned by Drs. Dosoretz, Rubenstein and Katin, which correspond to the administrative services agreements. The stock transfer agreements provide that (i) the term of the agreements corresponds to the respective administrative services agreement and any renewals thereof, (ii) the shareholders grant us a security interest in the shares held by them in the professional corporation, and (iii) the shareholders are prohibited from making any transfer of the shares held by them in the professional corporation, including through intestate transfer, except to qualified shareholders with our approval. Upon certain shareholder events of transfer (as defined in the stock transfer agreements), including a transfer of shares by any shareholder without our approval or the loss of a shareholder's license to practice radiation therapy in his or her applicable state, for a period of 30 days after giving notice to us of such event, the other shareholders have an opportunity to buy their pro-rata portion of the shares being transferred. If at the end of the 30-day period, any of the transferring shareholder's shares have not been acquired, then, for a period of 30 days, the professional corporation has the option to purchase all or a portion of the shares. If at the end of that 30- day period any of the transferring shareholder's shares have not been acquired, we must designate a transferee to purchase the remaining shares. The purchase price for the shares shall be the fair market value as determined by our auditors. Upon other events relating to the professional corporation, including uncured defaults, we shall designate a transferee to purchase all of the shares of the professional corporation.

We lease certain of our treatment centers and other properties from partnerships which are majority-owned by Drs. Dosoretz, Rubenstein, Sheridan, Katin and Mantz and Dr. Fernandez, our Senior Vice President, Director of Regional Operations. As of December 31, 2014, Drs. Dosoretz, Rubenstein, Sheridan, Katin, Fernandez and Mantz had ownership interests in these entities ranging from 0% to 100%. These leases have expiration dates through December 31, 2028, and provide for annual lease payments and executory costs, ranging from approximately $58,000 to $1.8 million. The aggregate lease payments we made to these entities were approximately $17.7 million, $18.7 million and $20.0 million for the years ended December 31, 2012, 2013 and 2014, respectively. The rents were determined on the basis of the debt service incurred by the entities and a return on the equity component of the project's funding. In June 2004, we engaged an independent consultant to complete a fair market rent analysis for the real estate leases with the real estate entities owned by our directors, executive officers and other management employees. The consultant determined that, with one exception, the rents were at fair market value. We negotiated a rent reduction for the one exception to bring it to fair market value as determined by the consultant. Since 2004, an independent consultant is utilized to assist the Audit and Compliance Committee in determining fair market rental for any renewal or new rental arrangements with any affiliated party.

We also maintain a construction company which provides remodeling and real property improvements at certain of our facilities. This construction company builds and constructs leased facilities on the lands owned by Drs. Dosoretz, Rubenstein, Sheridan and Katin. Payments received by us for building and construction fees were approximately $1.7 million, $4.6 million and $1.3 million for the years ended December 31, 2012, 2013 and 2014, respectively. Amounts due to us for the construction services were approximately $0.6 million and $0.2 million at December 31, 2013 and 2014, respectively.

Each of our directors and executive officers who is a holder of equity units of 21CI, including Drs. Dosoretz, Sheridan, Rubenstein, Katin and Mantz is a party to an Amended and Restated Securityholders Agreement (the "Securityholders Agreement") with 21CI governing the rights and obligations of holders of units of 21CI. The Securityholders Agreement provides, among other things:

Effective as of September 26, 2014, 21CI, the Company, CPPIB and the other parties thereto entered into the Amended Securityholders Agreement. The Amended Securityholders Agreement amends and restates 21CI's Securityholders Agreement in its entirety such that, among other things, 21CI's Board of Managers, the Company's Board of Directors and 21C's Board of Directors (collectively, the "Seller Boards") are comprised of (i) two managers nominated by the Majority Preferred Holders, (ii) three managers nominated by funds affiliated with Vestar and (iii) Dr. Daniel E. Dosoretz and one manager he nominated after consultation with Vestar and the Majority Preferred Holders, subject to certain ongoing security ownership provisions. In addition, the size of the Seller Boards may be increased to include one independent director/manager nominated by the Majority Preferred Holders at their election. Following an event of default under the Certificate of Designations, the parties to the Amended Securityholders Agreement agree to vote in favor of a changed board composition at the election of the Majority Preferred Holders. The Amended Securityholders Agreement provides for similar consent rights of the Majority Preferred Holders to those contained in the Certificate of Designations. In addition, in the event that 21CI or the Company proposes to incur indebtedness to a third party or the Company proposes to issue shares of its capital stock or other equity securities, the holders of the Series A Preferred Stock will have the right to provide a portion of such indebtedness or purchase a portion of such capital stock or other equity securities. The Amended Securityholders Agreement also provides for the establishment of an executive committee of each of the Seller Boards (the "Executive Committees"), which will carry out all activities of each of the Seller Boards to the extent permitted by applicable Delaware law. Each of the Executive Committees are comprised of three members, one of which is designated by the Majority Preferred Holders, one of

which is designated by a fund affiliated with Vestar and one of which is designated by Dr. Dosoretz, subject to certain ongoing security ownership provisions.

Each of 21CI, 21CH and 21C are party to a Management Agreement, amended and restated as of September 26, 2014 (the "Management Agreement"), with Vestar relating to certain advisory and consulting services Vestar provides to 21C, 21CI and 21CH. The Management Agreement provides for Vestar to receive an annual management fee equal to the greater of (i) $850,000 or (ii) an amount equal to 1.0% of 21C's consolidated EBITDA, which fee will be payable quarterly, in advance. 21CI, 21CH and 21C must indemnify Vestar and its affiliates against all losses, claims, damages and liabilities arising out of the performance by Vestar of its services pursuant to the Management Agreement, other than those that have resulted primarily from the gross negligence or willful misconduct of Vestar and/or its affiliates.

The Management Agreement will terminate upon the earlier of (i) such time when Vestar and its affiliates hold, directly or indirectly, less than 20% of the voting power of 21C's outstanding voting stock, (ii) a Public Offering (as defined in the Amended Securityholders Agreement) or (iii) a sale of 21CI, 21CH or 21C in accordance with the Amended Securityholders Agreement.

We incurred approximately $1.2 million, $1.3 million and $1.3 million in management fees to Vestar for the years ended December 31, 2012, 2013 and 2014, respectively.

In connection with the closing of the Merger, 21CI entered into various management stock contribution and unit subscription agreements ("Management Stock Contribution and Unit Subscription Agreements") with our management employees, including Drs. Dosoretz, Sheridan, Rubenstein, Katin and Mantz (each, an "Executive"), pursuant to which they exchanged certain shares of 21C's common stock held by them immediately prior to the effective time of the Merger or invested cash in 21C, in each case, in exchange for non-voting preferred equity units and Class A voting equity units of 21CI. Under the Management Stock Contribution and Unit Subscription Agreements, if an Executive's employment is terminated by death or disability, by 21CI and its subsidiaries without "cause" or by the Executive for "good reason" (each as defined in the respective Management Stock Contribution and Unit Subscription Agreement), or by 21CI or its subsidiaries for "cause" or by the Executive for any other reason except retirement, or the Executive violates the non-compete or confidentiality provisions, 21CI has the right and option to purchase, for a period of 90 days following the termination, any and all units held by the Executive or the Executive's permitted transferees, at the fair market value determined in accordance with the applicable Management Stock Contribution and Unit Subscription Agreement, subject to certain exceptions and limitations. Under Dr. Dosoretz's Management Stock Contribution and Unit Subscription Agreement, he also has certain put option rights to require 21CI to repurchase his non-voting preferred equity units and Class A voting equity units if, prior to a sale of 21CI, 21CH or 21C in accordance with the Securityholders Agreement or a Public Offering (as defined in the Securityholders Agreement), his employment is terminated without cause or he terminates his employment for good reason and at such time 21CI has met certain performance targets.

On December 9, 2013, 21CI entered into the Fourth Amended LLC Agreement. The Fourth Amended LLC Agreement governs the affairs of 21CI and the conduct of its business, and sets forth certain terms of the equity units held by members of 21CI, including, among other things, the right of members to receive distributions, the voting rights of holders of equity units and the composition of the board of managers, subject to the terms of the Amended and Restated Securityholders Agreement. Under the Fourth Amended LLC Agreement, Vestar's prior written consent is required for 21CI to

engage in certain types of transactions, including mergers, acquisitions, asset sales and incur indebtedness and make capital expenditures, subject to exceptions and limitations. The Fourth Amended LLC Agreement contains customary indemnification provisions relating to holders of units and managers and officers of 21CI.

The Fourth Amended LLC Agreement, which replaced the Third Amended LLC Agreement in its entirety, eliminated 21CI's Class L Units and Class EMEP Units and established new classes of equity incentive units in the form of Class M Units, Class N Units and Class O Units. Under the Fourth Amended LLC Agreement, 21CI now has seven classes of equity units outstanding: Preferred Units, Class A Units, Class G Units, Class M Units, Class MEP Units, Class N Units and Class O Units. Class A Units, of which Vestar and its affiliates control 80% of the outstanding units, are the only class of voting securities. 21CI may make distributions to its members in the sole discretion of its board of managers. Distributions to unitholders under the Fourth Amended LLC Agreement are made pursuant to a distribution waterfall that provides for distributions first to holders of Preferred Units, up to a specified amount, with other holders receiving subsequent distributions based on specified priorities and limitations.

The Fourth Amended LLC Agreement also provides that upon a public offering of 21CI (which provisions this offering will not trigger), the board of managers of 21CI may authorize a recapitalization of 21CI whereby unitholders will receive, in exchange for their existing 21CI units and subject to certain limitations, (i) cash, based on the amount that they would have been entitled to receive had an amount equal to the equity value of such units been distributed to unitholders of 21CI after taking into account all other distributions thereunder and/or (at the discretion of the board of managers) and (ii) common stock of the public company, or the right to receive common stock of the public company, based on the amount that they would have been entitled to receive had an amount equal to the equity value of such units been distributed to unitholders of 21CI after taking into account all other distributions thereunder.

Effective as of September 26, 2014, 21CI entered into the Fifth Amended and Restated Limited Liability Company Agreement (the "Fifth Amended LLC Agreement"). The Fifth Amended LLC Agreement amends and restates 21CI's Fourth Amended LLC Agreement in its entirety to, among other things, implement the terms of the Subscription Agreement and the Amended Securityholders Agreement including, without limitation, the board and committee composition terms set forth therein.

On December 9, 2013, 21CI entered into incentive unit grant agreements ("Incentive Agreements") with Dr. Dosoretz. Pursuant to the Incentive Agreements, 21CI granted to Dr. Dosoretz 28,500 Class M Units and 32,000 Class O Units (collectively, the "Incentive Units").

The Incentive Units were fully vested upon grant. If Dr. Dosoretz is terminated for cause, resigns without good reason or engages in a prohibited activity, all of his respective Incentive Units shall be immediately forfeited without consideration.

Under the Incentive Agreements, in the event of a public offering of common stock of 21CH, Dr. Dosoretz will be entitled to receive 21CH common stock, with the number of shares based on the dollar amount that they would have been entitled to receive had an amount equal to the equity value of such shares been distributed to unitholders of 21CI after taking into account all other distributions thereunder. Two-thirds of such common stock would be awarded in the form of a restricted stock award or a restricted stock unit award under an equity compensation plan and such award shall vest 50% on the first anniversary of the date of such initial public offering and 50% on the second anniversary of the date of the initial public offering. Any Incentive Units not allocated as common stock shall be forfeited and cancelled and Dr. Dosoretz shall be issued restricted shares, performance shares and/or options to acquire shares pursuant to an equity compensation plan then in effect. The

Board of Directors will determine number of shares, the exercise price and other terms and conditions thereto, in its sole discretion.

In the event of (i) a public offering of 21CI, in which Dr. Dosoretz is entitled to receive shares of 21CH pursuant to the terms of the Fourth Amended LLC Agreement and receive shares in the form of restricted stock awards or restricted stock unit awards, or (ii) the issuance of restricted shares of 21CH common stock, such restricted common stock shall vest 50% on the first anniversary of the date of such initial public offering and 50% on the second anniversary of the date of the initial public offering.

We have entered employment agreements with certain of our executive officers and directors, which contain compensation, severance, non-compete and confidentiality provisions. In addition, we have employed, and continue to employ, directly or indirectly, immediate family members of certain of our directors, executive officers and equityholders, including Dr. Dosoretz's brother, Alejandro Dosoretz, Dr. Dosoretz's daughter, Amy Fox, M.D., Dr. Dosoretz's son, Arie Dosoretz, M.D., and Dr. Rubenstein's brother, Paul Rubenstein. Alejandro Dosoretz received compensation under an executive employment agreement of approximately $1.3 million, $1.0 million and $1.1 million for the years ended December 31, 2012, 2013 and 2014. Amy Fox, M.D. received compensation under a physician employment agreement of approximately $201,000, $244,000 and $241,000 for the years ended December 31, 2012, 2013 and 2014, respectively. On February 3, 2015, we entered into a physician employment contract with Arie Dosoretz, M.D. for his employment services as a radiation oncologist. Terms of Dr. Arie Dosoretz's includes a base salary of $350,000 plus a production bonus. The terms of Dr. Arie Dosoretz's physician employment contract are standard and customary for radiation oncologists we employ and were reviewed and approved by the Audit and Compliance Committee. Paul Rubenstein received compensation as our Director of Physician Contracting of approximately $160,000, $160,000 and $167,000 for the years ended December 31, 2012, 2013 and 2014, respectively.

In connection with the SFRO Joint Venture we entered into a letter agreement with Kishore Dass, M.D., Ben Han, M.D. and Rajiv Patel (together, the "Sellers"), whereby during the three year period following consummation of an initial public offering of 21CH, the Sellers may elect to exchange their common units in SFRO for common stock in 21CH at an applicable exchange rate provided for therein based on the equity value of SFRO as compared to the volume weighted average price of such 21CH common stock. In addition, in the event that we acquire a business in the state of Florida during the three year period following the SFRO Joint Venture date, and such business was not already known to us and was first identified to us by the Sellers, then the Sellers are entitled to contribute up to 20% of the equity financing for the acquisition of such business in exchange for an equity interest in such acquired business. This right is conditioned upon such Seller's then continuing employment with us.

We have entered into indemnification agreements with certain of our directors and executive officers. The indemnification agreements provide, among other things, that 21C will, to the extent permitted by applicable law, indemnify and hold harmless each indemnitee if, by reason of his or her status as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of 21C or of any other enterprise which such person is or was serving at the request of 21C, such indemnitee was, is or is threatened to be made, a party to in any threatened, pending or completed proceeding, whether brought in the right of 21C or otherwise and whether of a civil, criminal, administrative or investigative nature, against all expenses (including attorneys' and other professionals' fees), judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such proceeding. The indemnitee shall not be

indemnified unless he or she acted in good faith and in a manner he or she reasonably believed to be in the best interests of 21C, or for willful misconduct. In addition, the indemnification agreements provide for the advancement of expenses incurred by the indemnitee in connection with any such proceeding to the fullest extent permitted by applicable law. The indemnification agreements terminate upon the later of five years after the date that the indemnitee ceased to serve as a director and/or executive officer or the date of the final termination of any proceedings subject to the indemnification agreements. 21C has agreed not to bring any legal action against the indemnitee or his or her spouse or heirs after two years following the date the indemnitee ceases to be a director and/or executive officer of 21C. The indemnification agreements do not exclude any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including any rights arising under the Articles of Incorporation or Bylaws of 21C, or the Florida Business Corporation Act.

In connection with the Merger, we agreed that we would not alter or impair any existing indemnification provisions then in existence in favor of then current or former directors or officers as provided in the Articles of Incorporation or Bylaws of 21C or as evidenced by indemnification agreements with us.

We are a participating provider in an oncology network, of which Dr. Dosoretz has an ownership interest. We provide oncology services to members of the network. Payments received by us for services rendered in 2012, 2013 and 2014 were approximately $1.3 million, $1.5 million and $1.3 million, respectively.

We are party to a contract with Batan Insurance Company SPC, LTD, an entity which is owned by Drs. Dosoretz, Rubenstein, Sheridan and Katin to provide us with malpractice insurance coverage. We paid premium payments to Batan Insurance Company SPC, LTD of approximately $3.9 million, $4.1 million and $8.9 million for the years ended December 31, 2012, 2013 and 2014, respectively.

The Company's securities are not listed on any national securities exchange or in an automated inter-dealer quotation system of a national securities association which has requirements that a majority of its board of directors be independent, and it is not otherwise subject to any director independence requirements. In addition, the Company has not adopted its own standards of director independence. For purposes of this disclosure, the Company has reviewed the independence of its directors under the corporate governance standards adopted by the New York Stock Exchange. The Company has determined that its directors are not independent under such standards. Note that under Section 303A.00 of the New York Stock Exchange Listed Company Manual, we would be considered a "controlled company" because more than 50% of our voting power is held by another company. Accordingly, even if we were a listed company on the New York Stock Exchange, we would not be required to maintain a majority of independent directors on our Board of Directors.

The following table presents fees for professional audit and other services rendered by our independent registered public accounting firm, Deloitte & Touche LLP for the years ended December 31, 2014 and 2013.

Fees for audit services included fees associated with the annual audit, reviews of the Company's quarterly reports, services in connection with debt and equity offerings, and SEC regulatory filings. Audit-related fees principally included acquisition related work, agreed-upon procedures and internal control analysis. Tax fees included tax compliance, tax advice, and tax planning. All other fees include fees not included in the other categories.

The Audit and Compliance Committee has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence and has concluded that the non-audit services provided by Deloitte & Touche LLP are compatible with maintaining Deloitte & Touche LLP's independence.

The Audit and Compliance Committee approves in advance all audit and non-audit services to be performed by the Company's independent registered public accounting firms. The Audit and Compliance Committee considers whether the provision of any proposed non-audit services is consistent with the SEC's rules on auditor independence and has pre-approved certain specified audit and non-audit services to be provided by Deloitte & Touche LLP for up to twelve (12) months from the date of the pre-approval. If there are any additional services to be provided, a request for pre-approval must be submitted to the Audit and Compliance Committee for its consideration.

21^ST CENTURY ONCOLOGY HOLDINGS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

To the Board of Directors and Shareholder of
21^st Century Oncology Holdings, Inc.

We have audited the accompanying consolidated balance sheets of 21^st Century Oncology Holdings, Inc. and subsidiaries (the "Company") as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for each of the three years in the period ended December 31, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of 21^st Century Oncology Holdings, Inc. and subsidiaries at December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, the accompanying consolidated financial statements have been restated to correct misstatements.

March 27, 2015 (August 23, 2016, as to the effects of the restatement discussed in Note 2)

	December 31, 2014			December 31, 2013

	Restated			Restated
ASSETS
Current assets:
Cash and cash equivalents ($7,202 and $4,414 related to VIEs)	$	99,082		$	17,128
Restricted cash		7,283			4,102
Accounts receivable, net ($13,799 and $14,527 related to VIEs)		121,799			105,167
Prepaid expenses ($651 and $628 related to VIEs)		8,728			7,577
Inventories ($370 and $609 related to VIEs)		3,162			2,674
Income taxes receivable ($0 and $0 related to VIEs)		4,432			2,425
Deferred income taxes ($6 and $6 related to VIEs)		1,771			3,932
Other ($403 and $47 related to VIEs)		8,291			11,731

Total current assets		254,548			154,736
Equity investments in joint ventures		1,646			2,555
Property and equipment, net ($19,051 and $17,786 related to VIEs)		269,570			239,237
Real estate subject to finance obligation		22,552			19,239
Goodwill ($54,377 and $23,970 related to VIEs)		476,559			579,875
Intangible assets, net ($12,421 and $3,319 related to VIEs)		81,385			84,742
Other assets ($6,335 and $6,035 related to VIEs)		47,184			49,969

Total assets	$	1,153,444		$	1,130,353



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable ($1,270 and $1,469 related to VIEs)	$	62,507		$	61,213
Accrued expenses ($3,534 and $4,692 related to VIEs)		88,604			64,148
Income taxes payable ($0 and $90 related to VIEs)		1,326			1,721
Current portion of long-term debt ($14 and $13 related to VIEs)		26,350			17,536
Current portion of finance obligation		433			317
Other current liabilities		19,512			9,990

Total current liabilities		198,732			154,925
Long-term debt, less current portion ($11 and $25 related to VIEs)		940,771			974,130
Finance obligation, less current portion		23,610			20,333
Embedded derivative features of Series A convertible redeemable preferred stock		15,843			—
Other long-term liabilities ($2,474 and $1,918 related to VIEs)		71,985			53,348
Deferred income taxes		4,834			7,319

Total liabilities		1,255,775			1,210,055
Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 and -0- authorized, 385,000 and -0- issued and outstanding at December 31, 2014 and 2013, respectively		319,997			—
Noncontrolling interests—redeemable		15,273			15,899
Commitments and contingencies
Equity:
Common stock, $0.01 par value, 1,000,000 and 1,028 shares authorized, 1,028 issued and outstanding at December 31, 2014 and 2013, respectively		—			—
Additional paid-in capital		634,930			650,879
Retained deficit		(1,091,449	)		(734,158	)
Accumulated other comprehensive loss, net of tax		(36,920	)		(26,102	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(493,439	)		(109,381	)
Noncontrolling interests—nonredeemable		55,838			13,780

Total deficit		(437,601	)		(95,601	)

Total liabilities and equity	$	1,153,444		$	1,130,353

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

	Year Ended December 31,

(in thousands):	2014			2013			2012
	Restated			Restated			Restated
Revenues:
Net patient service revenue	$	938,488		$	707,616		$	683,781
Management fees		67,012			11,139			—
Other revenue		12,682			10,168			9,299

Total revenues		1,018,182			728,923			693,080
Expenses:
Salaries and benefits		545,025			409,352			372,656
Medical supplies		97,367			64,640			61,589
Facility rent expenses		63,111			45,565			39,802
Other operating expenses		61,784			45,629			38,988
General and administrative expenses		135,819			107,395			83,314
Depreciation and amortization		86,583			65,096			64,814
Provision for doubtful accounts		19,253			12,146			16,916
Interest expense, net		113,279			86,747			77,494
Electronic health records incentive income		(93	)		—			—
Impairment loss		229,526			—			81,021
Early extinguishment of debt		8,558			—			4,473
Equity initial public offering expenses		4,905			—			—
Loss on sale leaseback transaction		135			313			—
Fair value adjustment of earn-out liability		1,627			130			1,219
Fair value adjustment of embedded derivative		837			—			—
Gain on the sale of an interest in a joint venture		—			(1,460	)		—
Loss on the sale/disposal of property and equipment		119			336			748
Loss on foreign currency transactions		678			1,138			241
(Gain) loss on foreign currency derivative contracts		(4	)		467			1,165

Total expenses		1,368,509			837,494			844,440

Loss before income taxes and equity in net loss of joint ventures		(350,327	)		(108,571	)		(151,360	)
Income tax expense (benefit)		2,319			(23,068	)		3,477

Loss before equity in net loss of joint ventures		(352,646	)		(85,503	)		(154,837	)
Equity in net loss of joint ventures		(50	)		(454	)		(817	)

Net loss		(352,696	)		(85,957	)		(155,654	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(4,595	)		(1,838	)		(3,053	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(357,291	)		(87,795	)		(158,707	)
Other comprehensive loss:
Net periodic benefit cost of pension plan		(91	)		—			—
Unrealized loss on derivative interest rate swap agreements, net of tax		—			—			(333	)
Unrealized loss on foreign currency translation		(12,098	)		(15,813	)		(8,011	)

Other comprehensive loss		(12,189	)		(15,813	)		(8,344	)

Comprehensive loss:		(364,885	)		(101,770	)		(163,998	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable:		(3,224	)		(303	)		(2,216	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(368,109	)	$	(102,073	)	$	(166,214	)

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

	Year Ended December 31,

(in thousands):	2014			2013			2012
	Restated			Restated			Restated
Cash flows from operating activities
Net loss	$	(352,696	)	$	(85,957	)	$	(155,654	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		72,784			55,211			52,878
Amortization		13,799			9,885			11,936
Deferred rent expense		774			973			1,234
Deferred income taxes		(783	)		(28,117	)		(3,029	)
Stock-based compensation		106			597			3,257
Provision for doubtful accounts		19,253			12,146			16,916
Loss on the sale/disposal of property and equipment		119			336			748
Loss on sale leaseback transaction		135			313			—
Impairment loss		229,526			—			81,021
Early extinguishment of debt		8,558			—			4,473
Equity initial public offering expenses		4,905			—			—
Gain on the sale of an interest in a joint venture		—			(1,460	)		—
Amortization of termination of interest rate swap		—			—			958
Write-off of loan costs		—			—			525
Termination of derivative interest rate swap agreements		—			—			(972	)
Loss on fair value adjustment of noncontrolling interests—redeemable		—			—			175
Loss on foreign currency transactions		348			143			33
(Gain) loss on foreign currency derivative contracts		(4	)		467			1,165
Fair value adjustment of earn-out liability		1,627			130			1,219
Fair value adjustment of embedded derivative		837			—			—
Amortization of debt discount		2,483			1,191			798
Amortization of loan costs		6,277			5,595			5,434
Equity interest in net loss of joint ventures		50			454			817
Distribution received from unconsolidated joint ventures		221			21			9
Pension plan contributions		(1,587	)		—			—
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(35,108	)		(32,539	)		(16,930	)
Income taxes payable		(3,453	)		(2,247	)		(2,072	)
Inventories		8			(195	)		602
Prepaid expenses		3,677			4,191			3,815
Accounts payable and other current liabilities		514			29,373			(2	)
Accrued deferred compensation		1,522			1,344			1,339
Accrued expenses / other current liabilities		11,321			17,124			5,952

Net cash (used in) provided by operating activities		(14,787	)		(11,021	)		16,645
Cash flows from investing activities
Purchase of property and equipment		(56,659	)		(40,651	)		(30,639	)
Acquisition of medical practices		(50,245	)		(68,661	)		(25,861	)
Restricted cash associated with medical practice acquisitions		(3,181	)		(3,768	)		(7	)
Proceeds from the sale of equity interest in a joint venture		—			1,460			—
Proceeds from the sale of property and equipment		96			78			2,987
Loans to employees		(1,226	)		(859	)		(621	)
Contribution of capital to joint venture entities		(620	)		(992	)		(714	)
Purchase of noncontrolling interest—non-redeemable		—			(1,509	)		(1,364	)
Proceeds (payment) of foreign currency derivative contracts		26			(171	)		(670	)
Premiums on life insurance policies		(1,265	)		(1,234	)		(1,313	)
Change in other assets and other liabilities		(765	)		(2,212	)		370

Net cash used in investing activities		(113,839	)		(118,519	)		(57,832	)

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

	Year Ended December 31,

(in thousands):	2014			2013			2012
	Restated			Restated			Restated
Cash flows from financing activities
Proceeds from issuance of debt (net of original issue discount of $3.4 million and $2.3 million, respectively)		169,845			306,063			448,163
Principal repayments of debt		(268,377	)		(171,432	)		(383,344	)
Repayments of finance obligation		(278	)		(182	)		(109	)
Proceeds from issuance of Series A convertible redeemable preferred stock		325,000			—			—
Payments of issue costs related to the issuance of preferred stock		(6,137	)		—			—
Proceeds from issuance of noncontrolling interest		1,250			—			—
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		259			765			—
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(3,599	)		(2,211	)		(3,920	)
Payments of costs for equity securities offering		(4,905	)		—			—
Payments of notes receivable from shareholder		—			—			72
Payments of loan costs		(2,436	)		(1,359	)		(14,437	)

Net cash provided by financing activities		210,622			131,644			46,425

Effect of exchange rate changes on cash and cash equivalents		(42	)		(52	)		(12	)
Net increase in cash and cash equivalents		81,954			2,052			5,226
Cash and cash equivalents, beginning of period		17,128			15,076			9,850

Cash and cash equivalents, end of period	$	99,082		$	17,128		$	15,076



Supplemental disclosure of cash flow information
Interest paid	$	101,149		$	78,750		$	63,632

Income taxes paid	$	7,585		$	9,364		$	9,120

Supplemental disclosure of non-cash transactions
Finance obligation related to real estate projects	$	7,790		$	7,580		$	3,035

Derecognition of finance obligation related to real estate projects	$	4,119		$	3,940		$	—

Capital lease obligations related to the purchase of equipment	$	17,625		$	3,054		$	7,281

Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable	$	3,049		$	—		$	—

Issuance of notes payable relating to the acquisition of medical practices	$	2,000		$	2,097		$	—

Liability relating to the escrow debt and purchase price of medical practices	$	2,970		$	—		$	—

Capital lease obligations related to the acquisition of medical practices	$	47,796		$	10,903		$	5,746

Earn-out accrual related to the acquisition of medical practices	$	11,052		$	7,950		$	400

Amounts payable to sellers in the purchase of a medical practice	$	249		$	—		$	—

Costs incurred for professional fees relating to issuance of equity securities	$	—		$	1,323		$	—

Noncash dividend declared to noncontrolling interest	$	194		$	77		$	167

Accrued dividends on Series A convertible preferred stock	$	12,683		$	—		$	—

Accretion of redemption value on Series A convertible preferred stock	$	3,457		$	—		$	—

Noncash deconsolidation of noncontrolling interest	$	—		$	9		$	—

Noncash contribution of capital by noncontrolling interest holders	$	37		$	4,235		$	—

Termination of prepaid services by noncontrolling interest holder	$	—		$	2,551		$	—

Issuance of notes payable relating to the earn-out liability in the acquisition of Medical Developers	$	—		$	2,679		$	—

Issuance of equity LLC units relating to the earn-out liability in the acquisition of Medical Developers	$	—		$	705		$	—

Issuance of senior secured notes related to the acquisition of medical practices	$	—		$	75,000		$	—

Reserve claim liability related to the acquisition of medical practices	$	—		$	3,682		$	—

Noncash dividend declared from unconsolidated joint venture	$	—		$	150		$	—

Step up basis in joint venture interest	$	—		$	83		$	—

Property and equipment related to the North Broward Hospital District license agreement	$	—		$	—		$	4,260

Noncash redemption of Parent equity units	$	—		$	—		$	53

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

	Common Stock										Note Receivable from Shareholder			Accumulated Other Comprehensive Loss

	Common Stock				Additional Paid-In Capital			Retained Deficit									Noncontrolling interests— Nonredeemable			Total Equity
(in thousands except share amounts):	Shares		Amount		Additional Paid-In Capital			Retained Deficit									Noncontrolling interests— Nonredeemable			Total Equity
Balance, December 31, 2011		1,025	$	—	$	648,703		$	(483,815	)	$	(125	)	$	(4,890	)	$	17,421		$	177,294
Cumulative effect of adjustment on opening balance		—		—		—			(3,841	)		—			(385	)		(224	)		(4,450	)

Balance at January 2, 2012, as restated		1,025		—		648,703			(487,656	)		(125	)		(5,275	)		17,197			172,844
Net (loss) income, Restated		—		—		—			(158,707	)		—			—			2,445			(156,262	)
Unrealized gain on interest rate swap agreement, net of tax		—		—		—			—			—			(333	)		—			(333	)
Foreign currency translation loss, Restated		—		—		—			—			—			(7,173	)		(653	)		(7,826	)
Amortization of other comprehensive income for termination of interest rate swap agreement, net of tax		—		—		—			—			—			958			—			958
Consolidation of a noncontrolling interest, Restated		—		—		—			—			—			—			146			146
Redemption of Parent equity units		—		—		(53	)		—			53			—			—			—
Stock-based compensation		—		—		3,257			—			—			—			—			3,257
Payment of note receivable from shareholder		—		—		—			—			72			—			—			72
Distributions		—		—		—			—			—			—			(3,492	)		(3,492	)

Balance, December 31, 2012, Restated		1,025	$	—	$	651,907		$	(646,363	)	$	—		$	(11,823	)	$	15,643		$	9,364

Net (loss) income, Restated		—		—		—			(87,795	)		—			—			1,964			(85,831	)
Foreign currency translation loss, Restated		—		—		—			—			—			(14,279	)		(1,505	)		(15,784	)
Issuance of equity LLC units relating to earn-out liability		3		—		705			—			—			—			—			705
Deconsolidation of a noncontrolling interest		—		—		(9	)		—			—			—			9			—
Purchase price fair value of noncontrolling interest—nonredeemable		—		—		(2,404	)		—			—			—			2,194			(210	)
Termination of prepaid services by noncontrolling interest holder		—		—		—			—			—			—			(2,551	)		(2,551	)
Step up in basis of joint venture interests		—		—		83			—			—			—			—			83
Stock-based compensation		—		—		597			—			—			—			—			597
Distributions		—		—		—			—			—			—			(1,974	)		(1,974	)

Balance, December 31, 2013, Restated		1,028	$	—	$	650,879		$	(734,158	)	$	—		$	(26,102	)	$	13,780		$	(95,601	)

Net (loss) income , Restated		—		—		—			(357,291	)		—			—			3,300			(353,991	)
Net periodic benefit cost of pension plan		—		—		—			—			—			(91	)		—			(91	)
Foreign currency translation loss, Restated		—		—		—			—			—			(10,727	)		(1,371	)		(12,098	)
Accretion of Series A convertible redeemable preferred stock		—		—		(3,457	)		—			—			—			—			(3,457	)
Accrued Series A convertible redeemable preferred stock dividends		—		—		(12,683	)		—			—			—			—			(12,683	)
Reclassification of SFRO NCI—nonredeemable, Restated		—		—		—			—			—			—			32,725			32,725
Purchase price fair value of noncontrolling interest—nonredeemable		—		—		—			—			—			—			7,816			7,816
Proceeds from issuance of noncontrolling interest—nonredeemable		—		—		85			—			—			—			1,165			1,250
Proceeds from noncontrolling interest holders—nonredeemable		—		—		—			—			—			—			296			296
Stock-based compensation		—		—		106			—			—			—			—			106
Distributions		—		—		—			—			—			—			(1,873	)		(1,873	)

Balance, December 31, 2014, Restated		1,028	$	—	$	634,930		$	(1,091,449	)	$	—		$	(36,920	)	$	55,838		$	(437,601	)

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

On December 9, 2013, Radiation Therapy Services, Inc., a wholly owned subsidiary of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.) ("Parent"), changed its name to 21^st Century Oncology, Inc. ("21C").

Parent, through its wholly-owned subsidiaries (collectively, the "Company"), is a leading global, physician-led provider of integrated cancer care ("ICC") services. The Company's physicians provide comprehensive, academic quality, cost-effective coordinated care for cancer patients in personal and convenient community settings (its "ICC model"). The Company provides its physicians with the advanced medical technology necessary to achieve optimal outcomes. The Company's provision of care includes a full spectrum of cancer care services by employing and affiliating with physicians in their related specialties. This innovative approach to cancer care through its ICC model enables the Company to collaborate across its physician base, integrate services and payments for related medical needs and disseminate best practices.

The Company operates the largest integrated network of cancer treatment centers and affiliated physicians in the world which, as of December 31, 2014, was comprised of approximately 794 community-based physicians in the fields of radiation oncology, medical oncology, breast, gynecological and general surgery, urology and primary care. The Company's physicians provide medical services at approximately 391 locations, including our 180 radiation therapy centers, of which 50 operate in partnership with health systems. The Company's cancer treatment centers in the United States are operated predominantly under the 21^st Century Oncology brand and are strategically clustered in 16 states: Alabama, Arizona, California, Florida, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Rhode Island, South Carolina and West Virginia, as well as countries in Latin America, Central America and the Caribbean. The Company's 36 international treatment centers, located in Argentina, Mexico, Costa Rica, Dominican Republic, Guatemala, and El Salvador operate under the 21^st Century Oncology brand or a local brand and, in many cases, are operated with local minority partners, including hospitals.

The Company is also engaged in providing capital equipment and business management services to oncology physician groups ("Groups") that treat patients at cancer centers ("Centers"). The Company owns the Centers' assets and provides services to the Groups through exclusive, long-term management services agreements. The Company provides the Groups with oncology business management expertise and new technologies including radiation oncology equipment and related treatment software. Business services that the Company provides to the Groups include non-physician clinical and administrative staff, operations management, purchasing, managed care contract negotiation assistance, reimbursement, billing and collecting, information technology, human resource and payroll, compliance, accounting, and treasury. Under the terms of the management service agreements, the Company is reimbursed for certain operating expenses of each Center and earns a monthly management fee from each Group. The management fees are primarily based on a predetermined percentage of each Group's earnings before interest, income taxes, depreciation, and amortization ("EBITDA") associated with the provision of radiation therapy. The Company manages the radiation oncology business operations of one Group in Florida, six Groups in California, and one Group in Indiana. The Company's management fees range from 40% to 60% of EBITDA, with one Group in California whose fee ranges from 20% to 30% of collections.

Within these financial statements, the Company has included the restated consolidated financial statements for the years ended December 31, 2014, 2013, and 2012 as well as the restated unaudited condensed consolidated financial statements for the interim periods in 2014, 2013, and 2012 (see Note 23), which is referred to as the Restatement. The Restatement corrects accounting errors which are discussed in detail within this footnote.

The following is a discussion of the significant adjustments identified during the Restatement.

During the fiscal years ended December 31, 2014, 2013, and 2012 MDL Argentina recognized revenue prior to obtaining substantive evidence that the related services had been rendered. As these revenue recognition practices are not in accordance with US GAAP, the Company has restated revenue by deferring revenue recognition on all of its revenue until the services had been rendered which generally occurs upon invoicing (negotiations, as applicable, with the insurance company are also complete at invoicing). Accordingly, Management has determined that, net patient revenue should be recognized at invoicing to the insurer. As a result of the adjustments to the amounts of revenue recognized during each period and certain other account receivable reconciliation issues identified, the receivables recognized during each period were also appropriately adjusted.

The Company has determined that its medical malpractice liabilities and associated recoveries were not appropriately accounted for during the fiscal years ended December 31, 2014, 2013, and 2012 under ASC 954-605, Health Care Entities, Revenue Recognition and ASC 720, Other Expenses. Errors occurred in establishing the Company's medical malpractice liability. Our method of calculating the medical practice liability resulted in the misapplication of GAAP, which caused us to make adjustments in the restated consolidated financial statements. Specifically, adjustments to medical malpractice liabilities and associated recoveries were required for the following: (1) an actuarial estimate of estimated future case development was required in addition to the case reserves we established on a claim by claim basis for open reported claims; (2) the removal of policy limits was required for the actuarial calculation of the liability; (3) certain physicians were excluded from the valuation, for which the Company has a medical malpractice liability risk; and (4) the improper classification of the medical malpractice liability between short and long term.

The Company became aware that the core measures required for attestation to CMS were not supported with the underlying medical records for the Company's employed physicians. As a result, EHR incentive income was improperly recognized and the matter will be fully disclosed and repayments will be made to CMS. The Company corrected incentive income to properly reflect the amounts earned for the fiscal years ended December 31, 2012, 2013, and 2014, respectively.

The Company has recorded tax adjustments to reflect the impacts of the Restatement and to correct errors related to its tax provision including accruals for uncertain tax positions.

The Company also recorded a value added tax liability associated with intercompany charges between affiliates in Latin America.

In addition to the above adjustments the Company has also corrected the presentation of tax matters related to leasing transactions and due diligence related matters.

The Company has also corrected errors for certain accruals and other items, each of which had a corresponding effect to various financial statement line items for the years ended December 31, 2014, 2013, and 2012. See below for a list of correcting adjustments recorded by the Company:

In addition to the restatement of its consolidated financial statements, the Company has also restated the following Notes for the effects of the errors above:

Footnote 23 in the Original Form 10-K, Supplemental Consolidating Financial Information, has not been included in this Form 10-K/A as the disclosures made in the footnote are not required to be included in our SEC filings as the securities associated with the debt are not publicly registered with the SEC.

In connection with the Restatement, the Company has corrected classification errors of certain amounts in its historical, as reported, consolidated balance sheets, statement of operations and comprehensive loss, cash flows, and statement of changes in equity as of and for the years ended December 31, 2014, 2013, and 2012 and the quarters ended March 31, June 30 and September 30, 2014 and 2013 (unaudited). The classification corrections alone did not affect its net income on its historical, as reported, consolidated financial statements. Below is a summary of the classification corrections:

The Company's historical, as reported, consolidated cash flow statements have been adjusted to conform to these classification corrections.

The adjustments required to correct errors in the consolidated financial statements as a result of completing the Restatement are described below. The cumulative adjustments required to correct the

errors in the financial statements prior to the year ended December 31, 2012, are reflected in the restated statements of changes in equity (deficit) as of December 31, 2012. The cumulative effect of those adjustments increased previously reported accumulated deficit by $3.8 million as of January 1, 2012.

The table below summarizes the effects of the Restatement adjustments on the Consolidated Balance Sheet as of December 31, 2014 and 2013 (in thousands):

	As of December 31, 2014

				Adjustments by Category
	Previously Reported			MDL Revenue			Medical Malpractice			Meaningful Use (EHR)			Restatement Tax Impact			Other			Total Adjustments			As Restated
ASSETS
Current assets:
Cash and cash equivalents	$	99,167		$	—		$	—		$	—		$	—		$	(85	)	$	(85	)	$	99,082
Restricted cash		7,051			—			—			—			—			232			232			7,283
Accounts receivable, net		137,807			(19,694	)		—			(1,375	)		—			5,061			(16,008	)		121,799
Prepaid expenses		8,728			—			—			—			—			—			—			8,728
Inventories		4,526			—			—			—			—			(1,364	)		(1,364	)		3,162
Income taxes receivable		—			—			—			—			—			4,432			4,432			4,432
Deferred income taxes		227			—			—			—			1,544			—			1,544			1,771
Other		7,457			—			68			—			—			766			834			8,291

Total current assets		264,963			(19,694	)		68			(1,375	)		5,976			4,610			(10,415	)		254,548
Equity investments in joint ventures		1,646			—			—			—			—			—			—			1,646
Property and equipment, net		270,757			—			—			—			—			(1,187	)		(1,187	)		269,570
Real estate subject to finance obligation		22,552			—			—			—			—			—			—			22,552
Goodwill		469,596			2,667			3,519			528			—			249			6,963			476,559
Intangible assets, net		81,680			—			—			—			—			(295	)		(295	)		81,385
Other assets		35,530			—			10,483			—			371			800			11,654			47,184

Total assets	$	1,146,724		$	(17,027	)	$	14,070		$	(847	)	$	6,347		$	4,177		$	6,720		$	1,153,444



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	57,635		$	—		$	—		$	—		$	—		$	4,872		$	4,872		$	62,507
Accrued expenses		82,609			—			(2,386	)		5,797			410			2,174			5,995			88,604
Income taxes payable		2,114			—			—			—			(788	)		—			(788	)		1,326
Current portion of long-term debt		26,350			—			—			—			—			—			—			26,350
Current portion of finance obligation		433			—			—			—			—			—			—			433
Other current liabilities		19,687			—			(175	)		—			—			—			(175	)		19,512

Total current liabilities		188,828			—			(2,561	)		5,797			(378	)		7,046			9,904			198,732
Long-term debt, less current portion		940,771			—			—			—			—			—			—			940,771
Finance obligation, less current portion		23,610			—			—			—			—			—			—			23,610
Embedded derivative features of Series A convertible redeemable preferred stock		15,843			—			—			—			—			—			—			15,843
Other long-term liabilities		51,079			—			20,058			—			785			63			20,906			71,985
Deferred income taxes		4,480			—			—			—			489			(135	)		354			4,834

Total liabilities		1,224,611			—			17,497			5,797			896			6,974			31,164			1,255,775
Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 authorized, 385,000 issued and outstanding at December 31, 2014		328,926			—			—			—			—			(8,929	)		(8,929	)		319,997
Noncontrolling interests—redeemable		49,797			—			—			—			—			(34,524	)		(34,524	)		15,273
Commitments and contingencies
Equity:
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,028 issued and outstanding at December 31, 2014		—			—			—			—			—			—			—			—
Additional paid-in capital		626,001			—			—			—			—			8,929			8,929			634,930
Retained deficit		(1,067,487	)		(22,251	)		(3,427	)		(6,644	)		7,211			1,149			(23,962	)		(1,091,449	)
Accumulated other comprehensive loss, net of tax		(38,690	)		6,212			—			—			(1,760	)		(2,682	)		1,770			(36,920	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(480,176	)		(16,039	)		(3,427	)		(6,644	)		5,451			7,396			(13,263	)		(493,439	)
Noncontrolling interests—nonredeemable		23,566			(988	)		—			—			—			33,260			32,272			55,838

Total deficit		(456,610	)		(17,027	)		(3,427	)		(6,644	)		5,451			40,656			19,009			(437,601	)

Total liabilities and equity	$	1,146,724		$	(17,027	)	$	14,070		$	(847	)	$	6,347		$	4,177		$	6,720		$	1,153,444

	As of Decmember 31, 2013

				Adjustments by Category
	Previously Reported			MDL Revenue			Medical Malpractice			Meaningful Use (EHR)			Restatement Tax Impact			Other			Total Adjustments			As Restated
ASSETS
Current assets:
Cash and cash equivalents	$	17,462		$	—		$	—		$	—		$	—		$	(334	)	$	(334	)	$	17,128
Restricted cash		3,768			—			—			—			—			334			334			4,102
Accounts receivable, net		117,044			(15,032	)		—			(1,708	)		—			4,863			(11,877	)		105,167
Prepaid expenses		7,577			—			—			—			—			—			—			7,577
Inventories		4,393			—			—			—			—			(1,719	)		(1,719	)		2,674
Income taxes receivable		—			—			—			—			2,425			—			2,425			2,425
Deferred income taxes		375			—			—			—			3,557			—			3,557			3,932
Other		12,534			—			(2,054	)		—			—			1,251			(803	)		11,731

Total current assets		163,153			(15,032	)		(2,054	)		(1,708	)		5,982			4,395			(8,417	)		154,736
Equity investments in joint ventures		2,555			—			—			—			—			—			—			2,555
Property and equipment, net		240,371			—			—			—			—			(1,134	)		(1,134	)		239,237
Real estate subject to finance obligation		19,239			—			—			—			—			—			—			19,239
Goodwill		578,013			3,485			—			—			—			(1,623	)		1,862			579,875
Intangible assets, net		85,025			—			—			—			—			(283	)		(283	)		84,742
Other assets		39,835			—			9,054			—			245			835			10,134			49,969

Total assets	$	1,128,191		$	(11,547	)	$	7,000		$	(1,708	)	$	6,227		$	2,190		$	2,162		$	1,130,353



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	57,613		$	—		$	—		$	—		$	—		$	3,600			3,600		$	61,213
Accrued expenses		64,021			—			(2,371	)		2,246			252			—			127			64,148
Income taxes payable		2,372			—			—			—			(651	)		—			(651	)		1,721
Current portion of long-term debt		17,536			—			—			—			—			—			—			17,536
Current portion of finance obligation		317			—			—			—			—			—			—			317
Other current liabilities		12,237			—			(2,247	)		—			—			—			(2,247	)		9,990

Total current liabilities		154,096			—			(4,618	)		2,246			(399	)		3,600			829			154,925
Long-term debt, less current portion		974,130			—			—			—			—			—			—			974,130
Finance obligation, less current portion		20,333			—			—			—			—			—			—			20,333
Other long-term liabilities		38,453			—			14,895			—			—			—			14,895			53,348
Deferred income taxes		4,498			—			—			—			2,885			(64	)		2,821			7,319

Total liabilities		1,191,510			—			10,277			2,246			2,486			3,536			18,545			1,210,055
Noncontrolling interests—redeemable		15,899			—			—			—			—			—			—			15,899
Commitments and contingencies
Equity:
Common stock, $0.01 par value, 1,028 shares authorized, issued, and outstanding at December 31, 2013		—			—			—			—			—			—			—			—
Additional paid-in capital		650,879			—			—			—			—			—			—			650,879
Retained deficit		(718,237	)		(14,234	)		(3,277	)		(3,954	)		4,659			885			(15,921	)		(734,158	)
Accumulated other comprehensive loss, net of tax		(26,393	)		3,440			—			—			(918	)		(2,231	)		291			(26,102	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(93,751	)		(10,794	)		(3,277	)		(3,954	)		3,741			(1,346	)		(15,630	)		(109,381	)
Noncontrolling interests—nonredeemable		14,533			(753	)		—			—			—			—			(753	)		13,780

Total deficit		(79,218	)		(11,547	)		(3,277	)		(3,954	)		3,741			(1,346	)		(16,383	)		(95,601	)

Total liabilities and equity	$	1,128,191		$	(11,547	)	$	7,000		$	(1,708	)	$	6,227		$	2,190		$	2,162		$	1,130,353

The table below summarizes the effects of the Restatement adjustments on the Consolidated Statement of Operations and Comprehensive Loss for the years ended December 31, 2014, 2013, 2012 (in thousands):

	Year Ended December 31, 2014

(in thousands):	Previously Reported			MDL Revenue			Medical Malpractice			EHR/ Meaningful Use			Restatement Tax Impact			Other			Total Adjustments			As Restated
Revenues:
Net patient service revenue	$	946,897		$	(8,190	)	$	—		$	—		$	—		$	(219	)	$	(8,409	)	$	938,488
Management fees		67,012			—			—			—			—			—			—			67,012
Other revenue		12,513			—			—			—			—			169			169			12,682

Total revenues		1,026,422			(8,190	)		—			—			—			(50	)		(8,240	)		1,018,182
Expenses:
Salaries and benefits		545,025			—			—			—			—			—			—			545,025
Medical supplies		97,367			—			—			—			—			—			—			97,367
Facility rent expenses		63,048			—			—			—			—			63			63			63,111
Other operating expenses		61,735			—			—			—			—			49			49			61,784
General and administrative expenses		135,257			—			148			—			226			188			562			135,819
Depreciation and amortization		86,701			—			—			—			—			(118	)		(118	)		86,583
Provision for doubtful accounts		18,713			—			—			—			—			540			540			19,253
Interest expense, net		113,279			—			—			—			—			—			—			113,279
Electronic health records incentive income		(2,783	)		—			—			2,690			—			—			2,690			(93	)
Impairment loss		229,526			—			—			—			—			—			—			229,526
Early extinguishment of debt		8,558			—			—			—			—			—			—			8,558
Equity initial public offering expenses		4,905			—			—			—			—			—			—			4,905
Loss on sale leaseback transaction		135			—			—			—			—			—			—			135
Fair value adjustment of earn-out liability		1,627			—			—			—			—			—			—			1,627
Fair value adjustment of embedded derivative		837			—			—			—			—			—			—			837
Loss on the sale/disposal of property and equipment		—			—			—			—			—			119			119			119
Loss on foreign currency transactions		557			—			—			—			—			121			121			678
(Gain) loss on foreign currency derivative contracts		(4	)		—			—			—			—			—			—			(4	)

Total expenses		1,364,483			—			148			2,690			226			962			4,026			1,368,509

Loss before income taxes and equity in net loss of joint ventures		(338,061	)		(8,190	)		(148	)		(2,690	)		(226	)		(1,012	)		(12,266	)		(350,327	)
Income tax expense (benefit)		5,159			—			—			—			(2,778	)		(62	)		(2,840	)		2,319

Loss before equity in net loss of joint ventures		(343,220	)		(8,190	)		(148	)		(2,690	)		2,552			(950	)		(9,426	)		(352,646	)
Equity in net loss of joint ventures, net of tax		—			—			—			—			—			(50	)		(50	)		(50	)

Net loss		(343,220	)		(8,190	)		(148	)		(2,690	)		2,552			(1,000	)		(9,476	)		(352,696	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(6,030	)		171			—			—			—			1,264			1,435			(4,595	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(349,250	)		(8,019	)		(148	)		(2,690	)		2,552			264			(8,041	)		(357,291	)
Other comprehensive loss, net of tax:
Net periodic benefit cost of pension plan		(91	)		—			—			—			—			—			—			(91	)
Unrealized loss on foreign currency translation		(13,514	)		2,708			—			—			(737	)		(555	)		1,416			(12,098	)

Other comprehensive loss		(13,605	)		2,708			—			—			(737	)		(555	)		1,416			(12,189	)

Comprehensive loss:		(356,825	)		(5,482	)		(148	)		(2,690	)		1,815			(1,555	)		(8,060	)		(364,885	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(4,722	)		234			—			—			—			1,264			1,498			(3,224	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(361,547	)	$	(5,248	)	$	(148	)	$	(2,690	)	$	1,815		$	(291	)	$	(6,562	)	$	(368,109	)

	Year Ended December 31, 2013

(in thousands):	Previously Reported			MDL Revenue			Medical Malpractice			EHR/ Meaningful Use			Restatement Tax Impact			Other			Total Adjustments			As Restated
Revenues:
Net patient service revenue	$	715,999		$	(8,597	)	$	—		$	—		$	—		$	214		$	(8,383	)	$	707,616
Management fees		11,139			—			—			—			—			—			—			11,139
Other revenue		9,378			—			—			—			—			790			790			10,168

Total revenues		736,516			(8,597	)		—			—			—			1,004			(7,593	)		728,923
Expenses:
Salaries and benefits		409,352			—			—			—			—			—			—			409,352
Medical supplies		64,640			—			—			—			—			—			—			64,640
Facility rent expenses		45,565			—			—			—			—			—			—			45,565
Other operating expenses		45,629			—			—			—			—			—			—			45,629
General and administrative expenses		106,887			—			255			—			189			64			508			107,395
Depreciation and amortization		65,195			—			—			—			—			(99	)		(99	)		65,096
Provision for doubtful accounts		12,146			—			—			—			—			—			—			12,146
Interest expense, net		86,747			—			—			—			—			—			—			86,747
Electronic health records incentive income		(1,698	)		—			—			1,698			—			—			1,698			—
Loss on sale leaseback transaction		313			—			—			—			—			—			—			313
Fair value adjustment of earn-out liability		130			—			—			—			—			—			—			130
Loss on the sale/disposal of property and equipment		—			—			—			—			—			336			336			336
Gain on the sale of an interest in a joint venture		(1,460	)		—			—			—			—			—			—			(1,460	)
Loss on foreign currency transactions		1,283			—			—			—			—			(145	)		(145	)		1,138
(Gain) loss on foreign currency derivative contracts		467			—			—			—			—			—			—			467

Total expenses		835,196			—			255			1,698			189			156			2,298			837,494

Loss before income taxes and equity in net loss of joint ventures		(98,680	)		(8,597	)		(255	)		(1,698	)		(189	)		848			(9,891	)		(108,571	)
Income tax expense (benefit)		(20,432	)		—			—			—			(2,642	)		6			(2,636	)		(23,068	)

Loss before equity in net loss of joint ventures		(78,248	)		(8,597	)		(255	)		(1,698	)		2,453			842			(7,255	)		(85,503	)
Equity in net loss of joint ventures, net of tax		—			—			—			—			—			(454	)		(454	)		(454	)

Net loss		(78,248	)		(8,597	)		(255	)		(1,698	)		2,453			388			(7,709	)		(85,957	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(1,966	)		128			—			—			—			—			128			(1,838	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(80,214	)		(8,469	)		(255	)		(1,698	)		2,453			388			(7,581	)		(87,795	)
Other comprehensive loss, net of tax:
Unrealized loss on foreign currency translation		(16,242	)		2,141			—			—			(507	)		(1,205	)		429			(15,813	)

Other comprehensive loss		(16,242	)		2,141			—			—			(507	)		(1,205	)		429			(15,813	)

Comprehensive loss:		(94,490	)		(6,456	)		(255	)		(1,698	)		1,946			(817	)		(7,280	)		(101,770	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(653	)		350			—			—			—			—			350			(303	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(95,143	)	$	(6,106	)	$	(255	)	$	(1,698	)	$	1,946		$	(817	)	$	(6,930	)	$	(102,073	)

	Year Ended December 31, 2012

(in thousands):	Previously Reported			MDL Revenue			Medical Malpractice			EHR/ Meaningful Use			Restatement Tax Impact			Other			Total Adjustments			As Restated
Revenues:
Net patient service revenue	$	686,216		$	(2,221	)	$	—		$	—		$	—		$	(214	)	$	(2,435	)	$	683,781
Other revenue		7,735			—			—			—			—			1,564			1,564			9,299

Total revenues		693,951			(2,221	)		—			—			—			1,350			(871	)		693,080
Expenses:
Salaries and benefits		372,656			—			—			—			—			—			—			372,656
Medical supplies		61,589			—			—			—			—			—			—			61,589
Facility rent expenses		39,802			—			—			—			—			—			—			39,802
Other operating expenses		38,988			—			—			—			—			—			—			38,988
General and administrative expenses		82,236			—			913			—			135			30			1,078			83,314
Depreciation and amortization		64,893			—			—			—			—			(79	)		(79	)		64,814
Provision for doubtful accounts		16,916			—			—			—			—			—			—			16,916
Interest expense, net		77,494			—			—			—			—			—			—			77,494
Electronic health records incentive income		(2,256	)		—			—			2,256			—			—			2,256			—
Impairment loss		81,021			—			—			—			—			—			—			81,021
Early extinguishment of debt		4,473			—			—			—			—			—			—			4,473
Fair value adjustment of earn-out liability		1,219			—			—			—			—			—			—			1,219
Loss on the sale/disposal of property and equipment		—			—			—			—			—			748			748			748
Loss on foreign currency transactions		339			—			—			—			—			(98	)		(98	)		241
(Gain) loss on foreign currency derivative contracts		1,165			—			—			—			—			—			—			1,165

Total expenses		840,535			—			913			2,256			135			601			3,905			844,440

Loss before income taxes and equity in net loss of joint ventures		(146,584	)		(2,221	)		(913	)		(2,256	)		(135	)		749			(4,776	)		(151,360	)
Income tax expense (benefit)		4,545			—			—			—			(1,071	)		3			(1,068	)		3,477

Loss before equity in net loss of joint ventures		(151,129	)		(2,221	)		(913	)		(2,256	)		936			746			(3,708	)		(154,837	)
Equity in net loss of joint ventures		—			—			—			—			—			(817	)		(817	)		(817	)

Net loss		(151,129	)		(2,221	)		(913	)		(2,256	)		936			(71	)		(4,525	)		(155,654	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(3,079	)		26			—			—			—			—			26			(3,053	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(154,208	)		(2,195	)		(913	)		(2,256	)		936			(71	)		(4,499	)		(158,707	)
Other comprehensive loss:
Unrealized loss on derivative interest rate swap agreements, net of tax		(333	)		—			—			—			—			—			—			(333	)
Unrealized loss on foreign currency translation		(7,882	)		789			—			—			(263	)		(655	)		(129	)		(8,011	)

Other comprehensive loss		(8,215	)		789			—			—			(263	)		(655	)		(129	)		(8,344	)

Comprehensive loss:		(159,344	)		(1,432	)		(913	)		(2,256	)		673			(726	)		(4,654	)		(163,998	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(2,396	)		180			—			—			—			—			180			(2,216	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(161,740	)	$	(1,252	)	$	(913	)	$	(2,256	)	$	673		$	(726	)	$	(4,474	)	$	(166,214	)

The Restatement adjustments had an impact on the cash and cash equivalents balance as of December 31, 2014, 2013, and 2012 primarily related to the correction of certain cash classified as cash and cash equivalents to restricted cash. The Restatement adjustments affecting the consolidated statement of cash flows for the year ending December 31, 2014, are predominantly included in the Company's net loss from operations, offset by non-cash adjustments to net loss and changes in operating assets and liabilities. The significant non-cash adjustments include decreases to depreciation and amortization offset by adjustments to deferred tax assets. Changes in operating assets and liabilities are largely attributable to decreases in accounts receivable and increases to liabilities associated with revenue recognition adjustments. There were no significant adjustments related to cash provided by financing activities.

The table below summarizes the effects of the Restatement adjustments on the Consolidated Statement of Cash Flows for the year ended December 31, 2014, 2013, 2012 (in thousands):

(in thousands):	2014 As Reported(1)			Adjustments			2014 As Restated

Cash flows from operating activities
Net loss	$	(343,220	)	$	(9,476	)	$	(352,696	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		72,914			(130	)		72,784
Amortization		13,787			12			13,799
Deferred rent expense		711			63			774
Deferred income taxes		(329	)		(454	)		(783	)
Stock-based compensation		106			—			106
Provision for doubtful accounts		18,713			540			19,253
Loss on the sale/disposal of property and equipment		119			—			119
Loss on sale leaseback transaction		135			—			135
Impairment loss		229,526			—			229,526
Early extinguishment of debt		8,558			—			8,558
Equity initial public offering expenses		4,905			—			4,905
Loss on foreign currency transactions		348			—			348
(Gain) loss on foreign currency derivative contracts		(4	)		—			(4	)
Fair value adjustment of earn-out liability		1,627			—			1,627
Fair value adjustment of embedded derivative		837			—			837
Amortization of debt discount		2,483			—			2,483
Amortization of loan costs		6,277			—			6,277
Equity interest in net loss of joint ventures		50			—			50
Distribution received from unconsolidated joint ventures		221			—			221
Pension plan contributions		(1,587	)		—			(1,587	)
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(42,218	)		7,110			(35,108	)
Income taxes payable		(500	)		(2,953	)		(3,453	)
Inventories		(88	)		96			8
Prepaid expenses and other assets		3,339			338			3,677
Accounts payable and other current liabilities		346			168			514
Accrued deferred compensation		1,522			—			1,522
Accrued expenses / other current liabilities		6,054			5,267			11,321

Net cash (used in) provided by operating activities		(15,368	)		581			(14,787	)
Cash flows from investing activities
Purchase of property and equipment		(56,563	)		(96	)		(56,659	)
Acquisition of medical practices		(50,245	)		—			(50,245	)
Restricted cash associated with medical practice acquisitions		(3,283	)		102			(3,181	)
Proceeds from the sale of property and equipment		96			—			96
Loans to employees		(888	)		(338	)		(1,226	)
Contribution of capital to joint venture entities		(620	)		—			(620	)
Proceeds (payment) of foreign currency derivative contracts		26			—			26
Premiums on life insurance policies		(1,265	)		—			(1,265	)
Change in other assets and other liabilities		(765	)		—			(765	)

Net cash used in investing activities		(113,507	)		(332	)		(113,839	)

(in thousands):	2014 As Reported(1)			Adjustments			2014 As Restated

Cash flows from financing activities
Proceeds from issuance of debt (net of original issue discount of $3.4 million)		169,845			—			169,845
Principal repayments of debt		(268,377	)		—			(268,377	)
Repayments of finance obligation		(278	)		—			(278	)
Proceeds from issuance of Series A convertible redeemable preferred stock		325,000			—			325,000
Payments of issue costs related to the issuance of preferred stock		(6,137	)		—			(6,137	)
Proceeds from issuance of noncontrolling interest		1,250			—			1,250
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		259			—			259
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(3,599	)		—			(3,599	)
Payments of costs for equity securities offering		(4,905	)		—			(4,905	)
Payments of loan costs		(2,436	)		—			(2,436	)

Net cash provided by financing activities		210,622			—			210,622

Effect of exchange rate changes on cash and cash equivalents		(42	)					(42	)
Net increase in cash and cash equivalents		81,705			249			81,954
Cash and cash equivalents, beginning of period		17,462			(334	)		17,128

Cash and cash equivalents, end of period	$	99,167		$	(85	)	$	99,082



Supplemental disclosure of cash flow information
Interest paid	$	101,149		$	—		$	101,149

Income taxes paid	$	7,585		$	—		$	7,585

Supplemental disclosure of non-cash transactions
Finance obligation related to real estate projects	$	7,790		$	—		$	7,790

Derecognition of finance obligation related to real estate projects	$	4,119		$	—		$	4,119

Capital lease obligations related to the purchase of equipment	$	17,625		$	—		$	17,625

Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable	$	3,049		$	—		$	3,049

Issuance of notes payable relating to the acquisition of medical practices	$	2,000		$	—		$	2,000

Liability relating to the escrow debt and purchase price of medical practices	$	2,970		$	—		$	2,970

Capital lease obligations related to the acquisition of medical practices	$	47,796		$	—		$	47,796

Earn-out accrual related to the acquisition of medical practices	$	11,052		$	—		$	11,052

Amounts payable to sellers in the purchase of a medical practice	$	249		$	—		$	249

Noncash dividend declared to noncontrolling interest	$	194		$	—		$	194

Accrued dividends on Series A convertible preferred stock	$	23,078		$	(10,395	)	$	12,683

Accretion of redemption value on Series A convertible preferred stock	$	1,991		$	1,466		$	3,457

Noncash contribution of capital by noncontrolling interest holders	$	37		$	—		$	37

(in thousands):	2013 As Reported(1)			Adjustments			2013 As Restated

Cash flows from operating activities
Net loss	$	(78,248	)	$	(7,709	)	$	(85,957	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		55,430			(219	)		55,211
Amortization		9,765			120			9,885
Deferred rent expense		973			—			973
Deferred income taxes		(27,908	)		(209	)		(28,117	)
Stock-based compensation		597			—			597
Provision for doubtful accounts		12,146			—			12,146
Loss on the sale/disposal of property and equipment		336			—			336
Loss on sale leaseback transaction		313			—			313
Gain on the sale of an interest in a joint venture		(1,460	)		—			(1,460	)
Loss on foreign currency transactions		143			—			143
(Gain) loss on foreign currency derivative contracts		467			—			467
Fair value adjustment of earn-out liability		—			130			130
Amortization of debt discount		1,191			—			1,191
Amortization of loan costs		5,595			—			5,595
Equity interest in net loss of joint ventures		454			—			454
Distribution received from unconsolidated joint ventures		21			—			21
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(42,570	)		10,031			(32,539	)
Income taxes payable		20			(2,267	)		(2,247	)
Inventories		(102	)		(93	)		(195	)
Prepaid expenses and other assets		3,544			647			4,191
Accounts payable and other current liabilities		29,373			—			29,373
Accrued deferred compensation		1,344			—			1,344
Accrued expenses / other current liabilities		16,999			125			17,124

Net cash (used in) provided by operating activities		(11,577	)		556			(11,021	)
Cash flows from investing activities
Purchase of property and equipment		(40,744	)		93			(40,651	)
Acquisition of medical practices		(68,659	)		(2	)		(68,661	)
Restricted cash associated with medical practice acquisitions		(3,768	)		—			(3,768	)
Proceeds from the sale of equity interest in a joint venture		1,460			—			1,460
Proceeds from the sale of property and equipment		78			—			78
Loans to employees		(212	)		(647	)		(859	)
Contribution of capital to joint venture entities		(992	)		—			(992	)
Purchase of noncontrolling interest—non-redeemable		(1,509	)		—			(1,509	)
Proceeds (payment) of foreign currency derivative contracts		(171	)		—			(171	)
Premiums on life insurance policies		(1,234	)		—			(1,234	)
Change in other assets and other liabilities		(2,212	)		—			(2,212	)

Net cash used in investing activities		(117,963	)		(556	)		(118,519	)

(in thousands):	2013 As Reported(1)			Adjustments			2013 As Restated

Cash flows from financing activities					—
Proceeds from issuance of debt (net of original issue discount of $2.3 million)		306,063			—			306,063
Principal repayments of debt		(171,432	)		—			(171,432	)
Repayments of finance obligation		(182	)		—			(182	)
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		765			—			765
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(2,211	)		—			(2,211	)
Payments of loan costs		(1,359	)		—			(1,359	)

Net cash provided by financing activities		131,644			—			131,644

Effect of exchange rate changes on cash and cash equivalents		(52	)					(52	)
Net increase in cash and cash equivalents		2,052			—			2,052
Cash and cash equivalents, beginning of period		15,410			(334	)		15,076

Cash and cash equivalents, end of period	$	17,462		$	(334	)	$	17,128



Supplemental disclosure of cash flow information
Interest paid	$	78,750		$	—		$	78,750

Income taxes paid	$	9,364		$	—		$	9,364

Supplemental disclosure of non-cash transactions
Finance obligation related to real estate projects	$	7,580		$	—		$	7,580

Derecognition of finance obligation related to real estate projects	$	3,940		$	—		$	3,940

Capital lease obligations related to the purchase of equipment	$	3,054		$	—		$	3,054

Issuance of notes payable relating to the acquisition of medical practices	$	2,097		$	—		$	2,097

Capital lease obligations related to the acquisition of medical practices	$	10,903		$	—		$	10,903

Earn-out accrual related to the acquisition of medical practices	$	7,950		$	—		$	7,950

Costs incurred for professional fees relating to issuance of equity securities	$	1,323		$	—		$	1,323

Noncash dividend declared to noncontrolling interest	$	77		$	—		$	77

Noncash deconsolidation of noncontrolling interest	$	9		$	—		$	9

Noncash contribution of capital by noncontrolling interest holders	$	4,235		$	—		$	4,235

Termination of prepaid services by noncontrolling interest holder	$	2,551		$	—		$	2,551

Issuance of notes payable relating to the earn-out liability in the acquisition of Medical Developers	$	2,679		$	—		$	2,679

Issuance of equity LLC units relating to the earn-out liability in the acquisition of Medical Developers	$	705		$	—		$	705

Issuance of senior secured notes related to the acquisition of medical practices	$	75,000		$	—		$	75,000

Reserve claim liability related to the acquisition of medical practices	$	3,682		$	—		$	3,682

Noncash dividend declared from unconsolidated joint venture	$	150		$	—		$	150

Step up basis in joint venture interest	$	83		$	—		$	83

(in thousands):	2012 As Reported(1)			Adjustments			2012 As Restated

Cash flows from operating activities
Net loss	$	(151,129	)	$	(4,525	)	$	(155,654	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		53,052			(174	)		52,878
Amortization		11,841			95			11,936
Deferred rent expense		1,234			—			1,234
Deferred income taxes		(2,023	)		(1,006	)		(3,029	)
Stock-based compensation		3,257			—			3,257
Provision for doubtful accounts		16,916			—			16,916
Loss on the sale/disposal of property and equipment		748			—			748
Impairment loss		81,021			—			81,021
Early extinguishment of debt		4,473			—			4,473
Amortization of termination of interest rate swap		958			—			958
Write-off of loan costs		525			—			525
Termination of derivative interest rate swap agreements		(972	)		—			(972	)
Loss on fair value adjustment of noncontrolling interests—redeemable		175			—			175
Loss on foreign currency transactions		33			—			33
(Gain) loss on foreign currency derivative contracts		1,165			—			1,165
Fair value adjustment of earn-out liability		—			1,219			1,219
Amortization of debt discount		798			—			798
Amortization of loan costs		5,434			—			5,434
Equity interest in net loss of joint ventures		817			—			817
Distribution received from unconsolidated joint ventures		9			—			9
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(21,578	)		4,648			(16,930	)
Income taxes payable		(2,121	)		49			(2,072	)
Inventories		639			(37	)		602
Prepaid expenses		3,262			553			3,815
Accounts payable and other current liabilities		(1	)		(1	)		(2	)
Accrued deferred compensation		1,339			—			1,339
Accrued expenses / other current liabilities		6,258			(306	)		5,952

Net cash (used in) provided by operating activities		16,130			515			16,645
Cash flows from investing activities
Purchase of property and equipment		(30,676	)		37			(30,639	)
Acquisition of medical practices		(25,862	)		1			(25,861	)
Restricted cash associated with medical practice acquisitions		—			(7	)		(7	)
Proceeds from the sale of property and equipment		2,987			—			2,987
Loans to employees		(68	)		(553	)		(621	)
Contribution of capital to joint venture entities		(714	)		—			(714	)
Purchase of noncontrolling interest—non-redeemable		(1,364	)		—			(1,364	)
Proceeds (payment) of foreign currency derivative contracts		(670	)		—			(670	)
Premiums on life insurance policies		(1,313	)		—			(1,313	)
Change in other assets and other liabilities		370			—			370

Net cash used in investing activities		(57,310	)		(522	)		(57,832	)

(in thousands):	2012 As Reported(1)			Adjustments			2012 As Restated

Cash flows from financing activities
Proceeds from issuance of debt (net of original issue discount of $3.4 million and $2.3 million, respectively)		448,163			—			448,163
Principal repayments of debt		(383,344	)		—			(383,344	)
Repayments of finance obligation		(109	)		—			(109	)
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(3,920	)		—			(3,920	)
Payments of notes receivable from shareholder		72			—			72
Payments of loan costs		(14,437	)		—			(14,437	)

Net cash provided by financing activities		46,425			—			46,425

Effect of exchange rate changes on cash and cash equivalents		(12	)					(12	)
Net increase in cash and cash equivalents		5,233			(7	)		5,226
Cash and cash equivalents, beginning of period		10,177			(327	)		9,850

Cash and cash equivalents, end of period	$	15,410		$	(334	)	$	15,076



Supplemental disclosure of cash flow information
Interest paid	$	63,632		$	—		$	63,632

Income taxes paid	$	9,120		$	—		$	9,120

Supplemental disclosure of non-cash transactions
Finance obligation related to real estate projects	$	3,035		$	—		$	3,035

Capital lease obligations related to the purchase of equipment	$	7,281		$	—		$	7,281

Capital lease obligations related to the acquisition of medical practices	$	5,746		$	—		$	5,746

Earn-out accrual related to the acquisition of medical practices	$	400		$	—		$	400

Noncash dividend declared to noncontrolling interest	$	167		$	—		$	167

Property and equipment related to the North Broward Hospital District license agreement	$	4,260		$	—		$	4,260

Noncash redemption of Parent equity units	$	53		$	—		$	53

The table below summarizes the effects of the cumulative Restatement adjustments recorded to all periods prior to December 31, 2012 on previously reported retained deficit balance (in thousands):

The Company is highly leveraged. As of December 31, 2014, the Company had approximately $967.1 million of long-term debt outstanding. The Company has experienced and continues to experience losses from its operations. The Company reported a net loss of approximately $352.7 million, $86.0 million and $155.7 million for the years ended December 31, 2014, 2013, and 2012, respectively.

The Company's high level of debt could have material adverse effects on its business and financial condition. Specifically, the Company's high level of debt could have important consequences, including the following:

The Company's ability to make scheduled payments and to refinance its indebtedness depends on, and is subject to, its financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond the Company's control, including the availability of financing in the international banking and capital markets.

As discussed in Note 18, the Company is involved in disputes, litigation, and regulatory matters incidental to its operations, including governmental investigations and other matters arising out of the normal conduct of business. The resolution of these matters could have a material adverse effect on the Company's business and financial position.

On September 26, 2014, the Company issued to Canada Pension Plan Investment Board ("CPPIB"), in a private placement, an aggregate of 385,000 newly issued shares of its Series A Convertible Redeemable Preferred Stock, par value $0.001 per share (the "Series A Preferred Stock"), for a purchase price of $325.0 million.

This equity investment provided the Company with incremental liquidity, reduced its debt, and provided capital to continue to grow its business. As further described in Note 12, a portion of the net proceeds from the issuance of the Company's Series A Preferred Stock was used to repay all outstanding borrowings under the Company's revolving credit facility, repay all obligations under the South Florida Radiation Oncology Term A, Term A-1, and Term B loans, repay certain other debt and capital leases, as well as provide capital for near-term strategic initiatives and general corporate purposes.

The Company has several initiatives designed to increase profitability including: (i) fully integrating the Company's recent acquisitions to improve operational performance; (ii) improving commercial payer contracting to increase reimbursement; (iii) continued development and expansion of the

Company's ICC model; and (iv) realignment of physician compensation arrangements to reflect the current reimbursement environment. Although the Company is significantly leveraged, it expects that the current cash balance, liquidity from its revolver, and cash generated from operations will be sufficient to meet working capital, capital expenditure, debt service, and other cash needs through December 31, 2015.

The accompanying consolidated financial statements include the accounts of the Company and all subsidiaries and entities controlled by the Company through the Company's direct or indirect ownership of a majority interest and/or exclusive rights granted to the Company as the general partner of such entities. The Company has determined that none of its existing management services agreements with its Groups meet the requirements for consolidation of the Groups under U.S. generally accepted accounting principles. Specifically, the Company does not have an equity ownership interest in any of the Groups. Furthermore, the Company's service agreements specifically do not give the Company "control" of the Groups as the Company does not have exclusive authority over decision making and the Company does not have a financial interest in the Groups. All intercompany accounts and transactions have been eliminated.

The Company has evaluated certain radiation oncology practices in order to determine if they are variable interest entities ("VIEs"). This evaluation resulted in the Company determining that certain of its radiation oncology practices were potential VIEs. For each of these practices, the Company has evaluated (1) the sufficiency of the fair value of the entity's equity investments at risk to absorb losses, (2) that, as a group, the holders of the equity investments at risk have (a) the direct or indirect ability through voting rights to make decisions about the entity's significant activities, (b) the obligation to absorb the expected losses of the entity and that their obligations are not protected directly or indirectly, and (c) the right to receive the expected residual return of the entity, and (3) substantially all of the entity's activities do not involve or are not conducted on behalf of an investor that has disproportionately fewer voting rights in terms of its obligation to absorb the expected losses or its right to receive expected residual returns of the entity, or both. The Accounting Standards Codification (ASC), 810, Consolidation (ASC 810), requires a company to consolidate VIEs if the company is the primary beneficiary of the activities of those entities. Certain of the Company's radiation oncology practices are VIEs and the Company has a variable interest in each of these practices through its administrative services agreements. Other of the Company's radiation oncology practices (primarily consisting of partnerships) are VIEs and the Company has a variable interest in each of these practices because the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without the additional subordinated financial support provided by its members.

In accordance with ASC 810, the Company consolidates certain radiation oncology practices where the Company provides administrative services pursuant to long-term management agreements. The noncontrolling interests in these entities represent the interests of the physician owners of the oncology practices in the equity and results of operations of these consolidated entities. The Company, through its variable interests in these practices, has the power to direct the activities of these practices that most significantly impact the entity's economic performance and the Company would absorb a majority of

the expected losses of these practices should they occur. Based on these determinations, the Company has consolidated these radiation oncology practices in its consolidated financial statements for all periods presented.

The Company could be obligated, under the terms of the operating agreements governing certain of its joint ventures, upon the occurrence of various fundamental regulatory changes and or upon the occurrence of certain events outside of the Company's control to purchase some or all of the noncontrolling interests related to the Company's consolidated subsidiaries. These repurchase requirements would be triggered by, among other things, regulatory changes prohibiting the existing ownership structure. While the Company is not aware of events that would make the occurrence of such a change probable, regulatory changes are outside the control of the Company. Accordingly, the noncontrolling interests subject to these repurchase provisions have been classified outside of equity on the Company's consolidated balance sheets.

As of December 31, 2014 and 2013, the combined total assets included in the Company's consolidated balance sheets relating to the VIEs were approximately $114.6 million and $71.3 million, respectively.

As of December 31, 2014 and 2013, the Company was the primary beneficiary of, and therefore consolidated, 27 and 23 VIEs, which operate 45 and 46 centers, respectively. Any significant amounts of assets and liabilities related to the consolidated VIEs are identified parenthetically on the accompanying consolidated balance sheets. The assets are owned by, and the liabilities are obligations of the VIEs, not the Company. Only the VIE's assets can be used to settle the liabilities of the VIE. The assets are used pursuant to operating agreements established by each VIE. The VIEs are not guarantors of the Company's debts. In the states of California, Massachusetts, Michigan, Nevada, New York and North Carolina, the Company's treatment centers are operated as physician office practices. The Company typically provides technical services to these treatment centers in addition to administrative services. For the years ended December 31, 2014, 2013, and 2012, approximately 14.9%, 18.6% and 19.4% of the Company's net patient service revenue, respectively, was generated by professional corporations with which it has administrative services agreements.

As of December 31, 2014 and 2013, the Company also held equity interests in six VIEs for which the Company is not the primary beneficiary. Those VIEs consist of partnerships that primarily provide radiation oncology services. The Company is not the primary beneficiary of these VIEs as it does not retain the power and rights in the operations of the entities. The Company's investments in the unconsolidated VIEs are approximately $1.6 million and $2.6 million at December 31, 2014 and 2013, respectively, with ownership interests ranging between 33.3% and 50.1% general partner or equivalent interest. Accordingly, substantially all of these equity investment balances are attributed to the Company's noncontrolling interests in the unconsolidated partnerships. The Company's maximum risk of loss related to the investments in these VIEs is limited to the equity interest.

The Company has agreements with third-party payers that provide for payments to the Company at amounts different from its established rates. Net patient service revenue is reported at the estimated net realizable amounts due from patients, third-party payers and others for services rendered. Net patient service revenue is recognized as services are provided.

Medicare and other governmental programs reimburse physicians based on fee schedules, which are determined by the related government agency. The Company also has agreements with managed care organizations to provide physician services based on negotiated fee schedules. Accordingly, the revenues reported in the Company's consolidated financial statements are recorded at the amount that is expected to be received.

The Company derives a significant portion of its revenues from Medicare, Medicaid, and other payers that receive discounts from its standard charges. The Company must estimate the total amount of these discounts to prepare its consolidated financial statements. The Medicare and Medicaid regulations and various managed care contracts under which these discounts must be calculated are complex and subject to interpretation and adjustment. The Company estimates the allowance for contractual discounts on a payer class basis given its interpretation of the applicable regulations or contract terms. These interpretations sometimes result in payments that differ from the Company's estimates. Additionally, updated regulations and contract renegotiations occur frequently necessitating regular review and assessment of the estimation process by management.

On an annual basis the Company performs a hindsight analysis in reviewing estimates to its contractual adjustments and bad debt allowance. The Company's review of the estimates is based on a full year look-back of actual adjustments taken in the calculation of the contractual allowance and bad debt allowance. Adjustments to revenue related to changes in prior period estimates decreased net patient service revenue for the year ended December 31, 2014 approximately 0.7% and increased net patient service revenue for the years ended December 31, 2013 and 2012 approximately 0.3% and 0.5%, respectively of the net patient service revenue for each of the respective periods.

For the years ended December 31, 2014, 2013, and 2012, approximately 42%, 45%, and 45%, respectively, of net patient service revenue related to services rendered under the Medicare and Medicaid programs. In the ordinary course of business, the Company is potentially subject to a review by regulatory agencies concerning the accuracy of billings and sufficiency of supporting documentation of procedures performed. Laws and regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation. As a result, there is a possibility that such estimates will change by a significant amount in the near term.

In the ordinary course of business, the Company provides services to patients who are financially unable to pay for their care. Accounts written off as charity and indigent care are not recognized in net patient service revenue. The Company's policy is to write off a patient's account balance upon determining that the patient qualifies under certain charity care and/or indigent care policies. The Company's policy includes the completion of an application for eligibility for charity care. The determination for charity care eligibility is based on income relative to federal poverty guidelines, family size, and assets available to the patient. A sliding scale discount is then applied to the balance due with discounts up to 100%. The Company estimates the costs of charity care services it provides by developing a ratio of foregone charity care charges compared to total charges and applying that ratio to the costs of providing services. Costs of providing services includes select direct and indirect costs such as salaries and benefits, medical supplies, facility rent expenses, other operating expenses, general and administrative expenses, depreciation and amortization, provision for doubtful accounts, and interest expense. The Company's estimated cost to provide charity care services is approximately $21.1 million, $28.3 million, and $16.6 million for the years ended December 31, 2014, 2013, and 2012, respectively. Funds received to offset or subsidize charity services provided were approximately $0.6 million, $1.9 million, and $0.4 million for the years ended December 31, 2014, 2013, and 2012, respectively.

The Company recognizes revenue in accordance with FASB ASC Topic 605, Revenue Recognition ("ASC 605"). Accordingly, the Company recognizes revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. MDL Argentina recognizes revenue at invoicing when it cannot conclude that criteria (ii) or (iii) have been met at an earlier point.

Specifically, the Company has determined that MDL Argentina needs to defer revenue recognition on all of its revenue until those contingencies (evidence that services have been rendered and that the fee is fixed or determinable) have been removed which generally occurs when the invoicing process is complete (negotiations, as applicable, with the insurance company are also complete at invoicing). Accordingly, the Company recognizes net patient revenue at invoicing to the insurer.

The Company's physician groups receive payments for their services and treatments rendered to patients covered by Medicare, Medicaid, third-party payors and self-pay. Revenue consists primarily of net patient service revenue that is recorded based upon established billing rates less allowances for contractual adjustments. Third-party payors include private health insurance, as well as related payments for co-insurance and co-payments. Estimates of contractual allowances for patients with healthcare coverage are based upon the payment terms specified in the related contractual agreements. Revenue related to uninsured patients and co-payment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). The Company also records a provision for bad debts based primarily on historical collection experience related to these uninsured accounts to record the net self-pay accounts receivable at the estimated amounts it expects to collect. The affiliated physician groups assign their accounts receivable to the Company. Accounts receivable and the related cash flows upon collection of these accounts receivable are reported net of estimated allowances for doubtful accounts and contractual adjustments.

Management fees are recorded at the amount earned by the Company under the management services agreements. Services rendered by the respective Groups are billed by the Company, as the exclusive billing agent of the Groups, to patients, third-party payors, and others. The Company's management fees are dependent on the EBITDA (or in one case, revenue) of each treatment center. As such, revenues generated by the Groups significantly impact the amount of management fees recognized by the Company. If differences between the Groups' revenues and the expected reimbursement are identified based on actual final settlements, there would be an impact to the Company's management fees. Amounts distributed to the Groups for their services under the terms of the management services agreements totaled $21.5 million and $3.8 million, for the years ended December 31, 2014 and 2013, respectively. As of December 31, 2014 and 2013 amounts payable to the Groups for their services of $2.7 million and $2.6 million, respectively was included in accounts payable.

The cost of revenues for the years ended December 31, 2014, 2013, and 2012 are approximately $744.3 million, $532.2 million, and $483.7 million, respectively. The cost of revenues includes costs related to expenses incurred for the delivery of patient care. These costs include salaries and benefits of

physicians, physicists, dosimetrists, radiation technicians, etc., medical supplies, facility rent expenses, other operating expenses, depreciation and amortization.

Accounts receivable in the accompanying consolidated balance sheets are reported net of estimated allowances for doubtful accounts and contractual adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from third-party payers and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for doubtful accounts to reduce the carrying value of such receivables to their estimated net realizable value. Approximately $29.8 million and $24.2 million of accounts receivable were due from the Medicare and Medicaid programs at December 31, 2014 and 2013, respectively. The credit risk for any other concentrations of receivables is limited due to the large number of insurance companies and other payers that provide payments for services. Management does not believe that there are other significant concentrations of accounts receivable from any particular payer that would subject the Company to any significant credit risk in the collection of its accounts receivable.

The allowance for doubtful accounts is based upon management's assessment of historical and expected net collections, business and economic conditions, trends in federal and state governmental health-care coverage, and other collection indicators. The primary tool used in management's assessment is an annual, detailed review of historical collections and write-offs of accounts receivable. The results of the detailed review of historical collections and write-off experience, adjusted for changes in trends and conditions, are used to evaluate the allowance amount for the current period. Accounts receivable are written off after collection efforts have been followed in accordance with the Company's policies.

Adjustments to bad debt expense related to changes in prior period estimates increased bad debt expense by approximately $2.3 million and $1.6 million for the years ended December 31, 2014 and 2013, respectively, and decreased bad debt expense by approximately $0.1 million, for the year ended December 31, 2012.

The Company's policy is to evaluate indefinite-lived intangible assets and goodwill for possible impairment at least annually on October 1, or whenever events or changes in circumstances indicate

that the carrying amount of such assets may not be recoverable. An intangible asset with an indefinite life (a major trade name) is evaluated for possible impairment by comparing the fair value of the asset with its carrying value. Fair value is estimated as the discounted value of future revenues arising from a trade name using a royalty rate that an independent party would pay for use of that trade name. An impairment charge is recorded if the trade name's carrying value exceeds its estimated fair value. Goodwill is evaluated for possible impairment by comparing the fair value of a reporting unit with its carrying value, including goodwill assigned to that reporting unit. Fair value of a reporting unit is estimated using a combination of income-based and market-based valuation methodologies. Under the income approach, forecasted cash flows of a reporting unit are discounted to a present value using a discount rate commensurate with the risks of those cash flows. Under the market approach, the fair value of a reporting unit is estimated based on the revenues and earnings multiples of a group of comparable public companies and from recent transactions involving comparable companies. An impairment charge is recorded if the carrying value of the goodwill exceeds its implied fair value.

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by the Company in business combinations. Goodwill and indefinite life intangible assets are not amortized, but are reviewed annually for impairment, or more frequently if impairment indicators arise. Goodwill impairment was recognized for the years ended December 31, 2014 and 2012 of approximately $228.3 million, and $80.6 million, respectively. No goodwill impairment loss was recognized for the year ended December 31, 2013.

Intangible assets consist of management fee agreements, trade names (indefinite life and amortizable), noncompete agreements, hospital contracts and licenses. Management fee agreements are amortized over the term of each respective agreement, including renewal options which range from 4.7 to 15.2 years using the straight-line method. Indefinite life trade names are tested at least annually for impairment. Noncompete agreements, hospital contracts and licenses are amortized over the life of the agreement (which typically ranges from 1.0 to 18.5 years) using the straight-line method. No intangible asset impairment loss was recognized for the years ended December 31, 2014, 2013, and 2012.

The Company recognizes all derivatives in the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship based on its effectiveness in hedging against the exposure. Derivatives that do not meet hedge accounting requirements must be adjusted to fair value through operating results. If the derivative meets hedge accounting requirements, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of assets, liabilities, or firm commitments through operating results or recognized in other comprehensive loss until the hedged item is recognized in operating results. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings.

The Company enters into interest rate swap agreements to reduce the impact of changes in interest rates on its floating rate senior secured credit facility. The interest rate swap agreements are contracts to exchange floating rate interest payments for fixed interest payments over the life of the agreements without the exchange of the underlying notional amounts. The notional amounts of interest rate swap agreements are used to measure interest to be paid or received and do not represent the

amount of exposure to credit loss. The differential paid or received on interest rate swap agreements is recognized in interest expense in the consolidated statements of operations and comprehensive loss. The related accrued payable is included in other long term liabilities.

On May 27, 2008, the Company entered into an interest rate swap agreement for its $407.0 million of floating rate senior debt governed by the Credit Agreement dated February 21, 2008 (senior secured credit facility). The Company designated this derivative financial instrument as a cash flow hedge (i.e., the interest rate swap agreement hedges the exposure to variability in expected future cash flows that is attributable to interest rate risk). The initial notional amount of the swap agreement was $290.6 million with amounts scaling down during various quarters throughout the term of the interest rate swap agreement to $116.0 million. The effect of this agreement is to fix the interest rate exposure to 3.67% plus a margin on $116.0 million of the Company's senior secured credit facility. The interest rate swap agreement was scheduled to expire on March 30, 2012. In December 2011, the Company terminated the interest rate swap agreement and paid approximately $1.9 million representing the fair value of the interest rate hedge at time of termination. No ineffectiveness was recorded as a result of the termination of the interest rate swap agreement. The amount of accumulated other comprehensive loss related to the terminated interest rate swap agreement of approximately $84,000, net of tax was amortized through interest expense through the original term of the interest rate swap agreement on March 30, 2012. At December 31, 2013 and 2012 no amount of the floating rate senior debt was subject to an interest rate swap.

In July 2011, the Company entered into two interest rate swap agreements whereby the Company fixed the interest rate on the notional amounts totaling approximately $116.0 million of the Company's senior secured term credit facility, effective as of March 30, 2012. The rate and maturity of the interest rate swap agreements were 0.923% plus a margin, which was 475 basis points, and was scheduled to expire on December 31, 2013. In May 2012, the Company terminated the interest rate swap agreements and paid approximately $1.0 million representing the fair value of the interest rate hedges at time of termination. No ineffectiveness was recorded as a result of the termination of the interest rate swap agreement. The amount of accumulated other comprehensive loss related to the terminated interest rate swap agreements of approximately $1.0 million, net of tax, is reflected as interest expense in the consolidated statements of operations and comprehensive loss.

The swaps are derivatives and are accounted for under ASC 815, "Derivatives and Hedging" ("ASC 815"). The fair value of the swap agreements, representing the estimated amount that the Company would pay to a third party assuming the Company's obligations under the interest rate swap agreements terminated at December 31, 2012 and 2011, was approximately $-0- million and $0.7 million, respectively, which is included in other long term liabilities in the accompanying consolidated balance sheets. The estimated fair value of the Company's interest rate swap was determined using the income approach that considers various inputs and assumptions, including LIBOR swap rates, cash flow activity, yield curves and other relevant economic measures, all of which are observable market inputs that are classified under Level 2 of the fair value hierarchy. The fair value also incorporates valuation adjustments for credit risk. No ineffectiveness was recorded for the year ended December 31, 2013 and 2012.

Since the Company has the ability to elect different interest rates on the debt at each reset date, and the senior secured credit facility contains certain prepayment provisions, the hedging relationships do not qualify for use of the shortcut method under ASC 815. Therefore, the effectiveness of the hedge relationship is assessed on a quarterly basis during the life of the hedge through regression analysis.

The entire change in fair market value is recorded in equity, net of tax, as other comprehensive income (loss).

Foreign currency risk is the risk that fluctuations in foreign exchange rates could impact the Company's results from operations. The Company is exposed to a significant amount of foreign exchange risk, primarily between the U.S. dollar and the Argentine Peso. This exposure relates to the provision of radiation oncology services to patients at the Company's Latin American operations and purchases of goods and services in foreign currencies. The Company enters into foreign exchange option contracts to convert a significant portion of the Company's forecasted foreign currency denominated net income into U.S. dollars to limit the adverse impact of a potential weakening Argentine Peso against the U.S. dollar. On April 26, 2013 the Company entered into a foreign exchange option contract which matured on March 31, 2014 to replace the contract maturing on December 31, 2013. Because the Company's Argentine forecasted foreign currency denominated net income is expected to increase commensurate with inflationary expectations, any adverse impact on net income from a weakening Argentine Peso against the U.S. dollar is limited to the cost of the option contracts, which was approximately $0.2 million in aggregate at inception of the contracts. Under the Company's foreign currency management program, the Company expects to monitor foreign exchange rates and periodically enter into forward contracts and other derivative instruments. The Company does not use derivative financial instruments for speculative purposes.

These programs reduce, but do not entirely eliminate, the impact of currency exchange movements. The Company's current practice is to use currency derivatives without hedge accounting designation. The maturity of these instruments generally occurs within twelve months. Gains or losses resulting from the fair valuing of these instruments are reported in (gain) loss on forward currency derivative contracts on the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2014, 2013, and 2012, the Company incurred a gain of approximately $4,000, and losses of approximately $0.5 million, and $1.2 million, respectively, relating to foreign currency derivative program. The fair value of the foreign currency derivative is recorded in other current assets in the accompanying consolidated balance sheet. At December 31, 2014 and 2013, the fair value of the foreign currency derivative was approximately $0 and $22,000, respectively.

The following represents the current foreign currency derivative agreements as of December 31, 2013 (in thousands):

Those approvals are administered by the Argentine Central Bank through the Mercado Unico Libre de Cambios, which is the only market where exchange transactions may be lawfully made.

During January 2014, the Argentinean peso exchange rate against the U.S. Dollar increased by approximately 23% from 6.52 Argentinean Pesos per U.S. Dollar as of December 31, 2013 to approximately 8.0 Argentinean Pesos per U.S. Dollar. As of December 31, 2014, the Argentinean Peso exchange rate was 8.55 Argentine Pesos per U.S. Dollar. A depreciation of this currency against the U.S. dollar will decrease the U.S. dollar equivalent of the amounts derived from these operations reported in the consolidated financial statements. In addition, currency fluctuations may affect the comparability of the results of operations between fiscal periods.

The Company's Series A Preferred Stock contains provisions for contingent events that could trigger the conversion of the Series A Preferred Stock to common stock and require the issuance of warrants to CPPIB. The Company determined that the contingent conversion features qualify as an embedded derivative, requiring bifurcation and classification as a liability, measured at fair value. The Company evaluates the fair value of those embedded derivatives and adjusts changes in fair value through the fair value adjustment of embedded derivative caption in the consolidated statements of operations and comprehensive loss.

The Company is subject to claims and legal actions in the ordinary course of business, including claims relating to patient treatment, employment practices, and personal injuries. To cover these types of claims, the Company maintains general liability and professional liability insurance in excess of self-insured retentions through commercial insurance carriers in amounts that the Company believes to be sufficient for its operations, although, potentially, some claims may exceed the scope of coverage in effect. The Company expenses an estimate of the costs it expects to incur under the self-insured retention exposure for general and professional liability claims. The Company maintains insurance for the majority of its physicians up to $1 million on individual malpractice claims and up to $3 million on aggregate claims on a claims-made basis. The Company purchases medical malpractice insurance from an insurance company partially owned by a related party. The Company's reserves for professional and general liability claims are based upon independent actuarial calculations, which consider historical claims data, demographic considerations, severity factors, industry trends, and other actuarial assumptions.

Actuarial calculations include a large number of variables that may significantly impact the estimate of ultimate losses that are recorded during a reporting period. Professional judgment is used by the actuary in determining the loss estimate, by selecting factors that are considered appropriate by the actuary for the Company's specific circumstances. Changes in assumptions used by the Company's actuary with respect to demographics, industry trends, and judgmental selection of factors may impact the Company's recorded reserve levels.

The amount accrued for professional and general liability claims as of the consolidated balance sheet dates reflects the current estimates of all outstanding losses, including incurred but not reported losses, based upon actuarial calculations. The loss estimates included in the actuarial calculations may change in the future based upon updated facts and circumstances. As of December 31, 2014 and 2013 the amount accrued for incurred but not reported professional liability claims was $15.9 million and $10.8 million, respectively. In accordance with Accounting Standards Update ("ASU") 2010-24, amounts accrued for reported claims as of December 31, 2014 total approximately $12.8 million. Of the approximate $12.8 million, approximately $3.8 million is recorded as other current liabilities and approximately $9.0 million is reported as other long-term liabilities. In addition the Company has recorded estimated insurance recoveries for both reported, and incurred but not reported claims totaling approximately $19.1 million as of December 31, 2014. Of the approximate $19.1 million of estimated insurance recoveries, approximately $4.0 million is recorded as other current assets and approximately $15.1 million is reported as other long-term assets. Amounts accrued for reported claims as of December 31, 2013 total approximately $10.6 million. Of the approximate $10.6 million, approximately $3.0 million is recorded as other current liabilities and approximately $7.6 million is reported as other long-term liabilities. In addition the Company has recorded estimated insurance recoveries for both reported, and incurred but not reported claims totaling approximately $15.6 million as of December 31, 2013. Of the approximate $15.6 million of estimated insurance recoveries, approximately $3.2 million is recorded as other current assets and approximately $12.4 million is reported as other long-term assets.

The Company recognizes the underfunded status of its defined benefit pension plan as an asset or a liability in its consolidated balance sheets. Each year's actuarial gains or losses are a component of other comprehensive loss, which is then included in accumulated other comprehensive loss. Pension benefit expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. The Company makes significant assumptions (including discount rate, expected rate of return on plan assets, and future increases in compensation) in computing the pension benefit expense and obligations.

The Company currently maintains equity interests in nine treatment center facilities with ownership interests ranging from 50.0% to 90.0%. Since the Company controls 50% or more of the voting interest in these facilities, the Company consolidates these treatment centers. The noncontrolling interests represent the equity interests of outside investors in the equity and results of operations of these consolidated entities.

In addition, in accordance with ASC 810, Consolidation, the Company consolidates certain radiation oncology practices where the Company provides administrative services pursuant to long-term management agreements. The noncontrolling interests in these entities represent the interests of the physician owners of the oncology practices in the equity and results of operations of these consolidated entities.

On January 1, 2009, the Company adopted changes issued by the Financial Accounting Standards Board ("FASB") to the accounting for noncontrolling interests in consolidated financial statements. These changes require, among other items, that a noncontrolling interest be included within equity

separate from the parent's equity; consolidated net income be reported at amounts inclusive of both the parent's and noncontrolling interest's shares; and, separately, the amounts of consolidated net income attributable to the parent and noncontrolling interest all be reported on the consolidated statements of operations and comprehensive loss.

The Company could be obligated, under the terms of the operating agreements governing certain of its joint ventures, upon the occurrence of various fundamental regulatory changes and/or upon the occurrence of certain events outside of the Company's control to purchase some or all of the noncontrolling interests related to the Company's consolidated subsidiaries. These repurchase requirements would be triggered by, among other things, regulatory changes making the existing ownership structure illegal. While the Company is not aware of events that would make the occurrence of such a change probable, regulatory changes are outside the control of the Company. Accordingly, the noncontrolling interests subject to these repurchase provisions have been classified outside of equity on the Company's consolidated balance sheets.

The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents include highly liquid investments with original maturities of three months or less when purchased. Cash at December 31, 2014 and 2013 held by the Company's foreign operating subsidiaries was $4.5 million and $3.6 million, respectively. The Company considers these cash amounts to be permanently invested in the Company's foreign operating subsidiaries and therefore does not anticipate repatriating any excess cash flows to the U.S. The Company anticipates it can adequately fund its domestic operations from cash flows generated solely from the U.S. business. Of the $4.5 million of cash held by the Company's foreign operating subsidiaries at December 31, 2014, $0.9 million is held in U.S. Dollars, $0.1 million of which is held at banks in the United States, with the remaining held in foreign currencies in foreign banks. The Company believes that the magnitude of its growth opportunities outside of the U.S. will cause the Company to continuously reinvest foreign earnings. The Company does not require access to the earnings and cash flow of its international subsidiaries to fund its U.S. operations.

Restricted cash totals approximately $7.3 million and $4.1 million as of December 31, 2014 and 2013, respectively. Restricted cash consists of claim reserve accounts established to address any pre-acquisition claims presented to the Company as they relate to the Company's recent acquisitions, including OnCure Holdings, Inc. (together with its subsidiaries, "OnCure") and SFRO Holdings, LLC (together with its subsidiaries, "SFRO"). Any balance of the claim reserve accounts will be released to sellers, once claims have been settled.

Inventories are valued at the lower of cost or market. The cost of medical drugs is determined using the first-in, first-out method.

Property and equipment are recorded at historical cost less accumulated depreciation and are depreciated over their estimated useful lives utilizing the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the life of the lease. Amortization of leased assets is included in depreciation and amortization in the accompanying consolidated statements of operations and comprehensive loss. Expenditures for repairs and maintenance are charged to operating expense as incurred, while equipment replacement and betterments are capitalized.

The weighted-average useful life of medical and medical testing equipment is 8.4 and 8.6 years in 2014 and 2013, respectively.

The Company evaluates its long-lived assets for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not be recoverable from estimated future cash flows, in accordance with ASC 360, Property, Plant, and Equipment. Fair value estimates are derived from independent appraisals, established market values of comparable assets, or internal calculations of estimated future net cash flows. The Company's estimates of future cash flows are based on assumptions and projections it believes to be reasonable and supportable for a market.

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740):Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11), which amends ASC 740 to clarify balance sheet presentation requirements of unrecognized tax benefits. ASU 2013-11 is effective for the Company on January 1, 2014. The Company adopted ASC 740 and reclassified approximately $1.2 million of unrecognized tax benefits from income taxes payable to other long term liabilities.

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 changes the requirements for reporting discontinued operations in FASB Accounting Standards Codification Subtopic 205-20, such that a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. ASU 2014-08 requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position, as well as additional disclosures about discontinued operations. Additionally, ASU 2014-08 requires disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements and expands the disclosures about an entity's significant continuing involvement with a discontinued operation. The accounting update is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. The Company is currently evaluating the potential impact of this guidance.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 that defers the effective date of ASU 2014-09 for all affected entities. As a result, ASU 2014-09 is effective for the Company beginning January 1, 2018. The Company intends to adopt the new guidance on January 1, 2018 and is currently evaluating the potential impact of this guidance.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40). The new guidance addresses management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its consolidated financial statements.

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or Equity (ASU 2014-06). The new guidance eliminates use of diversity in practice when evaluating whether the nature of the host contract within a hybrid financial instrument issued in the form of a share is more akin to debt or to equity. Pursuant to ASU 2014-06, entities should determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial instrument, weighing each term and feature on the basis of relevant facts and circumstances. That is, an entity should determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The standard will be effective for the first interim period within annual reporting periods beginning

after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (ASU 2015-02). The new guidance intends to reduce the number of consolidation models as well as place more emphasis on risk of loss when determining a controlling financial interest. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance.

Advertising costs are charged to general and administrative expenses as incurred and amounted to approximately $3.8 million, $3.9 million and $3.4 million, for the years ended December 31, 2014, 2013, and 2012, respectively.

Comprehensive loss consists of net loss and other comprehensive loss. Other comprehensive loss refers to revenue, expenses, gains, and losses that under accounting principles generally accepted in the United States are recorded as an element of equity but are excluded from net loss. The Company's other comprehensive loss is composed of unrealized gains and losses on interest rate swap agreements accounted for as cash flow hedges, the Company's foreign currency translation of its operations in South America, Central America and the Caribbean, and unrealized gains and losses on the fair value of pension plan assets. The impact of the unrealized net loss decreased total equity on a consolidated basis by approximately $12.2 million, $15.8 million and $8.3 million for the years ended December 31, 2014, 2013, and 2012, respectively.

Accumulated Other Comprehensive Loss. The components of accumulated other comprehensive loss were as follows (in thousands):

	21st Century Oncology Holdings, Inc. Shareholder												Noncontrolling Interests

							Derivative Losses on Interest Rate Swap Agreements						Noncontrolling Interests
(in thousands):	Foreign Currency Translation Adjustments			Net periodic benefit cost of pension plan			Derivative Losses on Interest Rate Swap Agreements			Total			Foreign Currency Translation Adjustments			Other Comprehensive Loss
	(Restated)									(Restated)			(Restated)			(Restated)
Year ended December 31, 2011	$	(4,650	)	$	—		$	(625	)	$	(5,275	)	$	(537	)	$
Other comprehensive loss		(7,173	)		—			(333	)		(7,506	)		(838	)		(8,344	)
Amortization of other comprehensive income for termination of interest rate swap agreement, net of tax		—			—			958			958			—			—

Balance, December 31, 2012	$	(11,823	)	$	—		$	—		$	(11,823	)	$	(1,375	)	$	(8,344	)

Other comprehensive loss		(14,279	)		—			—			(14,279	)		(1,534	)		(15,813	)

Balance, December 31, 2013	$	(26,102	)	$	—		$	—		$	(26,102	)	$	(2,909	)	$	(15,813	)

Other comprehensive loss		(10,727	)		(91	)		—			(10,818	)		(1,371	)		(12,189	)

Balance, December 31, 2014	$	(36,829	)	$	(91	)	$	—		$	(36,920	)	$	(4,280	)	$	(12,189	)

The Company provides for federal, foreign and state income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

ASC 740, Income Taxes (ASC 740), clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740, provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

21^st Century Oncology Investments, LLC ("21CI"), the shareholder of 21^st Century Oncology Holdings, Inc. adopted equity-based incentive plans in February 2008 and June 2012, and issued units of limited liability company interests designated Class B Units, Class C Units, Class MEP and Class EMEP Units pursuant to such plans. The Class B Units and Class C Units were modified and replaced under the June 2012 equity plan with the issuance of the Class MEP Units and Class EMEP Units. The units are limited liability company interests and are available for issuance to the Company's employees and members of the Board of Directors for incentive purposes. For purposes of determining the compensation expense associated with these grants, management valued the business enterprise using a variety of widely accepted valuation techniques, which considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity at grant date. The Company then used the option pricing method to determine the fair value of these units at the time of grant using valuation assumptions consisting of the expected term in which the units will be realized; a risk-free interest rate equal to the U.S. federal treasury bond rate consistent with the term assumption; expected dividend yield, for which there is none; and expected volatility based on the historical data of equity instruments of comparable companies. The Company also uses the probability-weighted expected return method ("PWERM") to determine the fair value of certain units at the time of grant. Under the PWERM, the value of the units is estimated based upon an analysis of future values for the enterprise assuming various future outcomes (exits) as well as the rights of each unit class. In developing assumptions for the various exit scenarios, management considered the Company's ability to achieve certain growth and profitability milestone in order to maximize shareholder value at the time of potential exit. Generally, for Class MEP units awarded, 66.6% vest upon issuance, while the remaining 33.4% vest on the 18 month anniversary of the issuance date. There are no performance conditions for the MEP units to vest. For newly hired individuals after January 1, 2012, vesting occurs at 33.3% in years one and two, and 33.4% in year three of the individual's hire date. Vesting of the Class EMEP units is dependent upon achievement of an implied equity value target. The right to receive proceeds from vested units is

dependent upon the occurrence of a qualified sale or liquidation event. The estimated fair value of the units, less an assumed forfeiture rate, are recognized in expense on a straight-line basis over the requisite service periods of the awards for the Class MEP Units and the accelerated attribution method approach is utilized for the Class EMEP Units.

On December 9, 2013, the Company adopted the Executive Bonus Plan to provide certain senior level employees of the Company with an opportunity to receive additional compensation based on the Equity Value, as defined in the plan and described in general terms as noted below, of 21CI. Upon the occurrence of the first company sale or initial public offering to occur following the effective date of the plan, a bonus pool was established equal in value of 5% of the Equity Value of 21CI, subject to a maximum bonus pool of $12.7 million. Each participant in the plan will participate in the bonus pool based on the participant's award percentage.

If the applicable liquidity event is a company sale, payment of the awards under the plan will be made within 30 days following consummation of the company sale in the same form as the proceeds received by 21CI. If the applicable liquidity event is an initial public offering, one-third of the award will be paid within 45 days following the effective date of the initial public offering, and the remaining two-thirds of the award will be payable in two equal annual installments on each of the first and second anniversaries of the effective date of the initial public offering. Payment of the award may be made in cash or stock or a combination thereof.

For purposes of the plan, the term "Equity Value" generally refers to: (i) if the applicable liquidity event is a company sale, the aggregate fair market value of the cash and non-cash proceeds received by 21CI and its equity holders in connection with the sale of equity interests in the Company; or (ii) if the applicable liquidity event is an initial public offering, the aggregate fair market value of 100% of the common stock of the Company on the effective date of its initial public offering.

On December 9, 2013, 21CI entered into a Fourth Amended and Restated Limited Liability Company Agreement (the "Fourth Amended LLC Agreement") which replaced the Third Amended LLC Agreement in its entirety. The Fourth Amended LLC Agreement established new classes of incentive equity units (such new units, together with Class MEP Units, as modified under the Fourth Amended LLC Agreement, the "2013 Plan") in 21CI in the form of Class M Units, Class N Units and Class O Units for issuance to employees, officers, directors and other service providers, eliminated 21CI's Class L Units and Class EMEP Units, and modified the distribution entitlements for holders of each existing class of equity units of 21CI.

The carrying values of the Company's financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of these instruments.

The carrying values of the Company's long-term debt approximates fair value due either to the length to maturity or the existence of interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.

The Company operates in one line of business, which is operating physician group practices. As of March 1, 2011, the Company's operations are structured into two geographically organized groups: the Domestic U.S. includes 144 treatment centers and International includes 36 treatment centers. The Company assesses performance of and makes decisions on how to allocate resources to its operating segments based on multiple factors including current and projected facility gross profit and market opportunities.

During 2012 the Company impaired certain leasehold improvements and other fixed assets of approximately $0.3 million for planned closings of certain offices in Maryland and Michigan.

The Company leases certain equipment under agreements, which are classified as capital leases. These leases have bargain purchase options at the end of the original lease terms. Capital leased assets included in property and equipment are as follows:

Amortization expense relating to capital leased equipment was approximately $11.6 million, $4.7 million, and $3.8 million for the years ended December 31, 2014, 2013, and 2012, respectively, and is included in depreciation expense in the consolidated statements of operations and comprehensive loss.

As the Company began to experience some liquidity issues after terminating its previously planned initial public offering, it began to have discussions with an ad hoc group of holders of our outstanding notes. On July 29, 2014, the Company entered into a Recapitalization Support Agreement (the "Recapitalization Support Agreement"). The Recapitalization Support Agreement set forth the terms through which the Company expected to either (a) obtain additional liquidity through an equity contribution or subordinated debt incurred in a minimum amount of $150 million on or before October 1, 2014 or (b) consummate a recapitalization consistent with the material terms and conditions described in the term sheet attached to the Recapitalization Support Agreement.

The Company performed an interim impairment test for goodwill and indefinite-lived intangible assets. The Company completed the first step of the impairment test as of June 30, 2014 of its two reporting units that comprise the U.S. domestic operating segment and determined that the carrying amount its Fee for Service reporting unit exceeded its estimated implied fair value, thereby requiring performance of the second step of the impairment test to calculate the amount of the impairment. In accordance with ASC 350, the Company recorded a non-cash impairment loss of approximately $228.3 million in its Fee for Service reporting unit in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2014. The estimated fair value measurements were developed using significant unobservable inputs (Level 3). For goodwill, the primary valuation technique used was an income methodology based on management's estimates of forecasted cash flows for each reporting unit, with those cash flows discounted to present value using rates commensurate with the risks of those cash flows. In addition, management used a market-based valuation method involving analysis of market multiples of revenues and EBITDA for (i) a group of comparable public companies and (ii) recent transactions, if any, involving comparable companies. For trade name intangible assets, management used the income-based relief-from-royalty valuation method in which fair value is the discounted value of forecasted royalty revenues arising from a trade name using a royalty rate that an independent party would pay for use of that trade name. Assumptions used by management were similar to those that management believes would be used by market participants performing valuations of these regions. Management's assumptions were based on analysis of current and expected future economic conditions and the strategic plan for each reporting unit.

The Company completed its annual impairment testing for goodwill and indefinite-lived intangible assets on October 1, 2013. The Company's October 1, 2013 goodwill impairment test was completed for each of its nine reporting units based on (i) assessment of current and expected future economic conditions, (ii) trends, strategies and forecasted cash flows at each reporting unit and (iii) assumptions similar to those that market participants would make in valuing the Company's reporting units. In performing this test, the Company assessed the implied fair value of its goodwill. It was determined that the implied fair value of goodwill was greater than the carrying amount, and as a result the Company did not record a noncash impairment charge. In October 2013, in conjunction with the acquisition of OnCure, the Company changed its internal reporting structure and as a result, aggregated its eight US Domestic reporting units into two US Domestic reporting units. As of December 31, 2013, the Company has identified three reporting units: International; and two reporting units that comprise the U.S. Domestic operating segment.

On July 6, 2012, the Centers for Medicare and Medicaid Services ("CMS"), the government agency responsible for administering the Medicare program released its 2013 preliminary physician fee schedule. The preliminary physician fee schedule would have resulted in a 15% rate reduction on Medicare payments to freestanding radiation oncology providers. CMS provided a 60 day comment period and the final rule was released on November 1, 2012. The final rule by CMS provided for a 7% rate reduction on Medicare payments to freestanding radiation oncology providers effective January 1, 2013. The Company completed an interim impairment test for goodwill and indefinite-lived intangible assets based on the Company's estimate of the proposed CMS cuts at September 30, 2012. In performing this test, the Company assessed the implied fair value of its goodwill. It was determined that the implied fair value of goodwill was less than the carrying amount, and as a result the Company recorded an impairment charge for the quarter ended September 30, 2012. The implied fair value of goodwill was determined in the same manner as the amount of goodwill that would be recognized in a hypothetical business combination. The estimated fair value of the reporting unit was allocated to all of the assets and liabilities of the reporting unit (including the unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the estimated fair value of the reporting unit was the purchase price paid. Based on (i) assessment of current and expected future economic conditions, (ii) trends, strategies and forecasted cash flows at each reporting unit and (iii) assumptions similar to those that market participants would make in valuing the Company's reporting units, the Company's management determined that the carrying value of goodwill in certain U.S. Domestic markets, including Mid East United States (Northwest Florida, North Carolina, Southeast Alabama, South Carolina), Central South East United States (Delmarva Peninsula, Central Maryland, Central Kentucky, South New Jersey), California, South West United States (central Arizona and Las Vegas, Nevada), and Southwest Florida regions exceeded their fair value. Accordingly, the Company recorded noncash impairment charges in the U.S. Domestic reporting segment totaling $66.5 million in the consolidated statements of operations and comprehensive loss during the quarter ended September 30, 2012.

Impairment charges relating to goodwill by reporting unit during the third quarter of 2012 are summarized as follows:

During the fourth quarter of 2012, the Company completed its annual impairment test for goodwill and indefinite-lived intangible assets. In performing this test, the Company assessed the implied fair value of our goodwill and intangible assets. As a result, the Company recorded an impairment loss of approximately $14.4 million during the fourth quarter of 2012 primarily relating to goodwill impairment in the Central South East United States (Delmarva Peninsula, Central Maryland, Central Kentucky, South New Jersey), and Southwest Florida reporting units of approximately $14.1 million.

Impairment charges relating to goodwill by reporting unit during the fourth quarter of 2012 are summarized as follows:

	Year Ended December 31,

(in thousands):	2014			2013			2012
	(Restated)			(Restated)			(Restated)
*U.S. Domestic Segment*
Balance, beginning of period
Goodwill	$	989,949		$	891,314		$	876,245
Accumulated impairment loss		(472,520	)		(472,520	)		(391,929	)

Net goodwill, beginning of period		517,429			418,794			484,316

Goodwill acquired during the period		130,735			98,648			15,072
Impairment		(228,279	)		—			(80,591	)
Adjustments to purchase price allocations		(409	)		(13	)		(3	)
Foreign currency translation		—			—			—

Balance, end of period
Goodwill		1,120,275			989,949			891,314
Accumulated impairment loss		(700,799	)		(472,520	)		(472,520	)

Net goodwill, end of period	$	419,476		$	517,429		$	418,794



*International Segment*
Balance, beginning of period
Goodwill	$	62,446		$	70,672		$	75,589
Accumulated impairment loss		—			—			—

Net goodwill, beginning of period		62,446			70,672			75,589

Goodwill acquired during the period		1,680			1,086			—
Impairment		—			—			—
Adjustments to purchase price allocations		294			—			—
Foreign currency translation		(7,337	)		(9,312	)		(4,917	)

Balance, end of period
Goodwill		57,083			62,446			70,672
Accumulated impairment loss		—			—			—

Net goodwill, end of period	$	57,083		$	62,446		$	70,672

Amortization expense relating to intangible assets was approximately $13.8 million, $9.9 million, and $11.9 million for the years ended December 31, 2014, 2013, and 2012, respectively. The weighted-average amortization period is approximately 8.7 years.

On February 6, 2012, the Company acquired the assets of a radiation oncology practice and a medical oncology group located in Asheville, North Carolina for approximately $0.9 million. The acquisition of the radiation oncology practice and the medical oncology group, further expands the Company's presence in the Western North Carolina market and builds on the Company's integrated cancer care model. The allocation of the purchase price is to tangible assets of $0.8 million, and goodwill of $0.1 million, all of which is deductible for tax purposes.

In September 2011, the Company entered into a professional services agreement with the North Broward Hospital District in Broward County, Florida to provide professional services at the two radiation oncology departments at Broward General Medical Center and North Broward Medical Center. In March 2012, the Company amended the license agreement to license the space and equipment and assume responsibility for the operation of those radiation therapy departments, as part of the Company's value added services offering. The license agreement runs for an initial term of ten years, with three separate five year renewal options. The Company recorded approximately $4.3 million of tangible assets relating to the use of medical equipment pursuant to the license agreement.

On March 30, 2012, the Company acquired the assets of a radiation oncology practice for $20.3 million and two urology groups located in Sarasota/Manatee counties in Southwest Florida for approximately $1.6 million, for a total purchase price of approximately $21.9 million paid, in cash. The allocation of the purchase price is to tangible assets of $7.8 million, intangible assets including non-compete agreements of $6.1 million amortized over 5 years, goodwill of $13.7 million, which is all deductible for tax purposes, and assumed capital lease obligations of approximately $5.7 million.

During the year ended December 31, 2012, the Company recorded $15.8 million of net patient service revenue and reported net income of $1.3 million in connection with the Sarasota/Manatee acquisition.

Total amortization expense recognized for the acquired amortizable intangible assets totaled approximately $0.9 million for the year ended December 31, 2012.

On December 28, 2012, the Company purchased the remaining 50% interest it did not already own in an unconsolidated joint venture which operates a freestanding radiation treatment center in West Palm Beach, Florida for approximately $1.1 million. The allocation of the purchase price is to tangible assets of $0.3 million, intangible assets including non-compete agreements of $0.2 million amortized over 2 years, goodwill of $0.8 million and current liabilities of approximately $0.2 million.

During 2012, the Company acquired the assets of several physician practices in Arizona, California and Florida for approximately $1.7 million. The physician practices provide synergistic clinical services and an integrated cancer care service to its patients in the respective markets in which the Company provides radiation therapy treatment services. The allocation of the purchase price to tangible assets is $1.7 million.

On May 25, 2013, the Company acquired the assets of 5 radiation oncology practices and a urology group located in Lee/Collier counties in Southwest Florida for approximately $19.8 million, comprised of $17.7 million in cash and seller financing note of approximately $2.1 million. The acquisition of the 5 radiation treatment centers and the urology group further expands the Company's presence into the Southwest Florida market and builds on its integrated cancer care model. The allocation of the purchase price is to tangible assets of $10.4 million, intangible assets including non-compete agreements of $1.9 million amortized over five years, current liabilities of $0.2 million, assumed capital lease obligations of $8.7 million and goodwill of $16.4 million, all of which is deductible for tax purposes. Pro

forma results and other expanded disclosures prescribed by ASC 805, Business Combinations, have not been presented as this acquisition is not deemed material.

In June 2013, the Company sold its 45% interest in an unconsolidated joint venture which operated a radiation treatment center in Providence, Rhode Island in partnership with a hospital to provide stereotactic radio-surgery through the use of a cyberknife for approximately $1.5 million.

In June 2013, the Company contributed its Casa Grande, Arizona radiation physician practice, ICC practice and approximately $5.2 million to purchase a 55.0% interest in a joint venture which included an additional radiation physician practice and an expansion of an integrated cancer care model that includes medical oncology, urology and dermatology. The provisional allocation of the purchase price, subject to working capital adjustments and finalization of intangible asset values, is to tangible assets of $2.20 million, intangible assets including a trade name of approximately $1.8 million, non-compete agreements of $0.4 million amortized over 7 years, goodwill of $5.1 million and noncontrolling interest-redeemable of approximately $4.2 million. For purposes of valuing the noncontrolling interest-redeemable, the Company considered a number of factors such as the joint venture's performance projections, cost of capital, and consideration ascribed to applicable discounts for lack of control and marketability. During the year ended December 31, 2014, the Company finalized its valuation of assets acquired, primarily working capital. The final valuation resulted in an increase to goodwill of $0.1 million and an increase in current liabilities of $0.1 million.

In July 2013, the Company purchased a legal entity, which operates a radiation treatment center in Tijuana Mexico for approximately $1.6 million. The acquisition of this operating treatment center expands the Company's presence in the international markets.

In July 2013, the Company purchased the remaining 38.0% interest in a joint venture radiation facility, located in Woonsocket, Rhode Island from a hospital partner for approximately $1.5 million.

In June 2013, the Company entered into a "stalking horse" investment agreement to acquire OnCure upon effectiveness of its plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code for approximately $125.0 million, (excluding capital leases, working capital and other adjustments). The purchase price included $42.5 million in cash and up to $82.5 million in assumed debt ($7.5 million of assumed debt will be released assuming certain OnCure centers achieve a minimum level of EBITDA). The Company funded an initial deposit of approximately $5.0 million into an escrow account subject to the working capital adjustments. During the year ended December 31, 2014, the Company received approximately $3.3 million of the escrow account pursuant to a negotiated working capital settlement.

On October 25, 2013, the Company completed the acquisition of OnCure. The transaction was funded through a combination of cash on hand, borrowings from the Company's senior secured credit facility and the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million included in other long-term liabilities in the consolidated balance sheets, is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions.

OnCure operates radiation oncology treatment centers for cancer patients. It contracts with radiation oncology physician groups and their radiation oncologists through long-term management services agreements to offer cancer patients a comprehensive range of radiation oncology treatment options, including most traditional and next generation services. OnCure provides services to a network of 11 physician groups that treat cancer patients at its 33 radiation oncology treatment centers, making it one of the largest strategically located networks of radiation oncology service providers. OnCure has

treatment centers located in California, Florida and Indiana, where it provides the physician groups with the use of the facilities and with certain clinical services of treatment center staff, and administers the non-medical business functions of the treatment centers, such as technical staff recruiting, marketing, managed care contracting, receivables management and compliance, purchasing, information systems, accounting, human resource management and physician succession planning.

The following table summarizes the allocation of the aggregate purchase price of OnCure, including assumed liabilities (in thousands):

Acquisition Consideration Allocation

Cash and cash equivalents	$	307
Accounts receivable		10,087
Inventories		200
Deferred income taxes—asset		4,875
Other current assets		1,742
Accounts payable		(4,856	)
Accrued expenses		(3,540	)
Other current liabilities		—
Equity investments in joint ventures		1,625
Property and equipment		22,397
Intangible assets—management services agreements		57,739
Other noncurrent assets		265
Long—term debt		(2,090	)
Other long—term liabilities		(5,828	)
Deferred income taxes—liability		(32,052	)
Noncontrolling interest—nonredeemable		(1,299	)
Goodwill		75,228

Acquisition consideration	$	124,800

The Company valued the management services agreements based on the income approach utilizing the excess earnings method. The Company considered a number of factors to value the management services agreements, including OnCure's performance projections, discount rates, strength of competition, and income tax rates. The management services agreements will be amortized on a straight- line basis over the terms of the respective agreements.

The weighted-average amortization period for the acquired amortizable intangible assets at the time of the acquisition was approximately 11.6 years. Total amortization expense recognized for these acquired amortizable intangible assets totaled approximately $0.9 million for the year ended December 31, 2013.

Estimated future amortization expense for OnCure's acquired amortizable intangible assets as of December 31, 2013 is as follows (in thousands):

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill of $75.2 million, representing primarily the value of estimated cost savings and synergies expected from the transaction. The goodwill is not deductible for tax purposes and is included in the Company's U.S. domestic segment. During the year ended December 31, 2014, the Company finalized its valuation of assets acquired. The final valuation, combined with the receipt of escrow funds resulted in a decrease in accounts receivable of approximately $2.4 million, increase in property and equipment of $0.3 million, decrease in goodwill of $0.4 million, an increase in current liabilities of $0.3 million, and an increase in deferred tax liabilities of $0.4 million.

During the year ended December 31, 2013, the Company recorded $14.6 million of net patient service revenue and reported a net loss of $0.3 million in connection with the OnCure acquisition.

On October 30, 2013, the Company acquired the assets of a radiation oncology practice located in Roanoke Rapids, North Carolina for approximately $2.2 million. The acquisition of the radiation oncology practice further expands the Company's presence in the Eastern North Carolina market. The allocation of the purchase price is to tangible assets of $0.3 million, a certificate of need of approximately $0.3 million, and goodwill of $1.6 million.

During 2013, the Company acquired the assets of several physician practices in Arizona, Florida, North Carolina, New Jersey, and Rhode Island for approximately $0.8 million. The physician practices provide synergistic clinical services and ICC service to its patients in the respective markets in which the Company provides radiation therapy treatment services. The allocation of the purchase price is to tangible assets of $0.8 million.

On January 15, 2014 the Company purchased 69% interest in a legal entity that operates a radiation oncology facility in Guatemala City, Guatemala for approximately $0.9 million. This facility is strategically located in Guatemala City's medical corridor. The allocation of the purchase price is to tangible assets of $2.8 million, intangible assets of approximately $0.6 million ($0.2 million in hospital contracts, $0.3 million in trade name and $0.1 million in non-compete), assumption of $3.1 million in debt, goodwill of $1.3 million, noncontrolling interest-non redeemable of approximately $0.5 million and deferred tax liabilities of approximately $0.2 million.

On February 10, 2014, the Company purchased a 65% equity interest in SFRO for approximately $65.5 million, subject to working capital and other customary adjustments. The transaction was primarily funded with the proceeds of a new $60 million term loan facility that accrues interest at the Eurodollar Rate plus a margin of 10.50% per annum and matures on January 15, 2017 and $7.9 million of term loans to refinance existing SFRO debt.

The Company accounted for the acquisition of SFRO under ASC 805, Business Combinations. SFRO's results of operations are included in the consolidated financial statements for periods ending after February 10, 2014, the acquisition date. Given the date of the acquisition, the Company has not completed the valuation of assets acquired and liabilities assumed which is in process.

The following table summarizes the allocation of the aggregate purchase price of SFRO, including assumed liabilities (in thousands):

The Company preliminarily valued the noncontrolling interest-redeemable considering a number of factors such as SFRO's performance projections, cost of capital, and consideration ascribed to applicable discounts for lack of control and marketability.

The Company valued the trade name using the relief from royalty method, a derivation of the income approach that estimates the benefit of owning the trade name rather than paying royalties for the right to use a comparable asset. The Company considered a number of factors to value the trade name, including SFRO's performance projections, royalty rates, discount rates, strength of competition, and income tax rates.

The Company valued the non-compete agreement using the discounted cash flow method, a derivation of the income approach that evaluates the difference in the sum of SFRO's present value of cash flows of two scenarios: (1) with the non-compete in place and (2) without the non-compete in place. The Company considered various factors in determining the non-compete value including SFRO's performance projections, probability of competition, income tax rates, and discount rates.

The weighted-average amortization period for the acquired amortizable intangible assets at the time of the acquisition was approximately 4.8 years. Total amortization expense recognized for these acquired amortizable intangible assets totaled approximately $2.4 million for the year ended December 31, 2014.

Estimated future amortization expense for SFRO's acquired amortizable intangible assets as of the acquisition date is as follows (in thousands):

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill of $129.8 million, representing primarily the value of estimated cost savings and synergies expected from the transaction. The goodwill is not deductible for tax purposes and is included in the Company's U.S. domestic segment.

During the year ended December 31, 2014, the Company recorded $135.6 million of net patient service revenue and reported net loss of $1.9 million in connection with the SFRO acquisition.

The following unaudited pro forma financial information is presented as if the purchase of OnCure and SFRO had occurred at the beginning of the comparable prior annual reporting periods presented below. The pro forma financial information is not necessarily indicative of what the Company's results of operations actually would have been had the Company completed the acquisition at the dates

indicated. In addition, the unaudited pro forma financial information does not purport to project the future operating results of the combined company:

On March 26, 2014 the Company purchased a 75% interest in a legal entity that operates a radiation oncology facility in Villa Maria, Argentina for approximately $0.5 million. The allocation of the purchase price is to tangible assets of $0.5 million, intangible assets of $0.2 million, goodwill of $0.5 million, noncontrolling interest-non redeemable of approximately $0.2 million and total liabilities of approximately $0.5 million.

On April 21, 2014, the Company acquired the assets of a radiation oncology practice located in Boca Raton, Florida for approximately $0.4 million. The acquisition of the radiation oncology practice further expands the Company's presence in the Broward County market. The allocation of the purchase price is to tangible assets of $3.0 million, non-compete of $0.1 million and the assumption of approximately $2.7 million in debt.

On May 5, 2014, the Company purchased the remaining 50% interest it did not already own in an unconsolidated joint venture which operates a freestanding radiation treatment center in Lauderdale Lakes, Florida for approximately $0.5 million. The allocation of the purchase price is to tangible assets of $0.3 million, accounts receivable of $0.4 million, goodwill of $0.2 million and previously held equity interest of approximately $0.4 million.

During October, 2014, the Company entered into a license agreement with the Public Health Trust of Miami-Dade County, Florida to license space and equipment and assume responsibility for the operation of a radiation therapy center located in Miami, Florida, as part of the Company's value added services offering. The license agreement runs for an initial term of five years, with two separate five year renewal options. The Company recorded approximately $1.4 million of tangible assets relating to the use of medical equipment pursuant to the license agreement.

During 2014, the Company acquired the assets of several physician practices in Florida for approximately $0.4 million. The physician practices provide synergistic clinical services and an ICC service to its patients in the respective markets in which the Company provides radiation therapy treatment services. The allocation of the purchase price to tangible assets is $0.4 million.

The operations of the foregoing acquisition have been included in the accompanying consolidated statements of operations and comprehensive loss from the respective date of the acquisition.

The purchase prices of these transactions were allocated to the assets acquired and liabilities assumed based upon their respective fair values. The purchase price allocations for certain recent transactions are subject to revision as the Company obtains additional information. The operations of the foregoing acquisitions have been included in the accompanying consolidated statements of operations and comprehensive loss from the respective dates of acquisition. The following table

summarizes the allocations of the aggregate purchase price of the acquisitions, including assumed liabilities.

	Years Ended December 31,

(in thousands):	2014			2013			2012
Fair value of net assets acquired, excluding cash:
Accounts receivable, net	$	11,267		$	12,497		$	—
Inventories		45			394			228
Other current assets		2,054			1,896			367
Deferred tax assets		7			4,907			—
Other noncurrent assets		934			1,892			35
Property and equipment		28,796			35,615			10,322
Intangible assets		12,468			62,706			6,275
Goodwill		132,300			99,721			15,069
Current liabilities		(27,729	)		(8,320	)		(654	)
Long-term debt		(47,365	)		(10,903	)		(5,746	)
Deferred tax liabilities		(702	)		(31,656	)		—
Other noncurrent liabilities		(4,367	)		(5,828	)		(34	)
Previously held equity investment		(400	)		—			—
Noncontrolling interest		(40,541	)		(5,534	)		—

	$	66,767		$	157,387		$	25,862

The Company incurred approximately $10.0 million, $12.6 million, and $2.6 million of diligence costs relating to acquisitions of physician practices for the years ended December 31, 2014, 2013, and 2012.

On January 2, 2015, the Company purchased an 80% interest in a legal entity that that operates a radiation oncology facility in Kennewick, Washington for approximately $17.6 million. The acquisition expands the Company's presence into the state of Washington. The purchase agreement contains a provision for earn out payments, contingent upon achieving certain EBITDA targets measured over three years from the acquisition date. The earn out payments cannot exceed approximately $3.4 million.

On January 6, 2015, the Company acquired the assets of a radiation oncology practice located in Warwick, Rhode Island for approximately $8.0 million. The acquisition further expands the Company's presence in Rhode Island.

On January 6, 2015, the Company acquired the additional assets of a radiation oncology practice it already manages located in Hollywood, Florida for approximately $0.5 million.

Given the dates of the acquisition, the preliminary purchase price allocations of the 2015 acquisitions noted above have not been completed as of March 27, 2015.

In addition to the goodwill impairment losses noted in Note 7, the Company recorded an impairment loss during the third quarter of 2012 of approximately $0.1 million related to the impairment of certain leasehold improvements of a planned radiation treatment facility office closing in

Monroe, Michigan in the Northeast U.S. region. During the fourth quarter of 2012, an impairment loss of approximately $0.1 million was recognized related to the impairment of certain leasehold improvements in the Delmarva Peninsula local market and approximately $0.2 million related to a consolidated joint venture in the Central Maryland local market. The Company recorded an impairment loss of approximately $1.2 million during the third quarter of 2014 related to the Company's write-off of its 33.6% investment interest in a development stage proton therapy center located in New York ("NY Proton"). As a result of NY Proton's continued operating losses since its inception in 2010 and the Company's liquidity issues experienced during the quarter ended June 30, 2014, the Company provided notice to the consortium that it may not be able to provide the full commitment of approximately $10.0 million to this project.

In March 2014, the Company entered into a sale leaseback transaction of medical equipment with a financial institution. Proceeds from the sale were approximately $5.7 million. The Company recorded a loss on the sale leaseback transaction of approximately $0.1 million. In December 2013, the Company entered into a sale leaseback transaction of medical equipment with two financial institutions. Proceeds from the sale were approximately $18.4 million. The Company recorded a loss on the sale leaseback transaction of approximately $0.3 million.

On March 1, 2011, the Company purchased a controlling interest in Medical Developers, LLC ("MDLLC") as well as controlling interests in the subsidiaries of MDLLC and a controlling interest in Clinica de Radioterapia La Asuncion S.A. The Company recorded an estimated contingent earn out payment totaling $2.3 million at the time of the closing of these acquisitions. The earn out payment is contingent upon certain acquired centers attaining earnings before interest, taxes, depreciation and amortization targets. At December 31, 2012, the Company estimated the fair value of the contingent earn out liability and increased the liability due to the seller to approximately $3.4 million. The Company recorded approximately $1.2 million as expense in the fair value adjustment of earn-out liability caption in the consolidated statements of operations and comprehensive loss.

On November 4, 2011, the Company purchased controlling interests in operating entities, which operate radiation treatment centers in Argentina. In November 2012, the Company exercised its purchase option to purchase the remaining interests for approximately $1.4 million and recorded the adjustment of approximately $0.2 million to the purchase option as an expense in the fair value adjustment of earn-out liability in the consolidated statements of operations and comprehensive loss.

On October 25, 2013, the Company completed the acquisition of OnCure. The Company recorded an estimated contingent earn out liability totaling approximately $7.5 million, subject to escrow arrangements and will be released to holders upon attaining certain earnings before interest, taxes, depreciation and amortization targets, and is due and payable on December 31, 2015. At December 31,

2013, the Company estimated the fair value of the contingent earn out liability and increased the liability due to the holders to approximately $7.6 million. The Company recorded the $0.1 million to expense in the fair value adjustment of earn-out liability caption in the consolidated statements of operations and comprehensive loss. At December 31, 2014, we estimated the fair value of the contingent earn out liability and increased the liability due to the seller by approximately $0.8 million, which is recorded to expense in the fair value adjustment of earn-out liability caption in the consolidated statements of operations and comprehensive loss.

Pursuant to the SFRO acquisition, the Company recorded and estimated contingent earn out liability totaling approximately $11.1 million. At December 31, 2014, the Company estimated the fair value of the contingent earn out liability and increased the liability due to the holders to approximately $11.9 million. The Company recorded the $0.8 million to expense in the fair value adjustment of earn-out liability caption in the consolidated statements of operations and comprehensive loss.

On May 10, 2012, the Company issued $350.0 million in aggregate principal amount of 8⁷/8% senior secured second lien notes due 2017. The Company incurred approximately $4.5 million from the early extinguishment of debt as a result of the prepayment of the $265.4 million in senior secured credit facility—Term Loan B and prepayment of $63.0 million in senior secured credit facility—Revolving credit portion, which included the write-offs of $3.7 million in deferred financing costs and $0.8 million in original issue discount costs.

During the 3^rd quarter of 2014, the Company incurred approximately $8.6 million from the early extinguishment of debt as a result of the prepayment of the Term A Loan and Term B Loan, MDLLC Credit Agreement, Note Purchase Agreement (each as defined below), and certain capital leases, which included the write-offs of $2.0 million in deferred financing costs, $2.7 million in original issue discount costs, and $3.8 million in pre-payment penalties, including $0.3 million paid to Theriac Management Investments, LLC ("Theriac") (a related party real estate entity owned by certain of the Company's directors and officers) pursuant to the Note Purchase Agreement.

A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate on income before income taxes are as follows:

	Years Ended December 31,

(in thousands):	2014			2013			2012
	Restated			Restated			Restated
Federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		(0.1	)		3.7			—
Effects of rates different than statutory		—			(0.5	)		(0.2	)
Nondeductible charge for stock based compensation		—			(0.2	)		(0.8	)
Nondeductible charge for lobbying and political donations		(0.1	)		(0.6	)		(0.5	)
Goodwill impairment		(14.2	)		—			(13.2	)
Income from noncontrolling interests		0.3			0.2			0.3
Valuation allowance increase		(21.2	)		(14.9	)		(21.3	)
Federal and state true-ups		(0.2	)		(1.0	)		(1.0	)
Uncertain tax positions		0.5			(0.2	)		(0.5	)
Penalties		—			—			(0.1	)
Other permanent items		(0.7	)		(0.3	)		—

Total income tax provision		(0.7	)%		21.2	%		(2.3	)%

The Company provides for income taxes using the liability method in accordance with ASC 740, Income Taxes. Deferred income taxes arise from the temporary differences in the recognition of income

and expenses for tax purposes. Deferred tax assets and liabilities are comprised of the following at December 31, 2014 and 2013:

(in thousands):	December 31, 2014			December 31, 2013

	(Restated)			(Restated)
Deferred income tax assets:
Provision for doubtful accounts	$	11,205		$	9,034
State net operating loss carryforwards		16,507			12,445
Federal net operating loss carryforwards		118,658			86,180
Deferred rent liability		5,979			5,979
Intangible assets—U.S. Domestic		23,660			—
Management fee receivable allowance		11,613			11,708
Merger costs and debt financing costs		1,305			1,256
Partnership interests		1,086			—
Other		15,595			13,930

Gross deferred income tax assets		205,608			140,532
Valuation allowance		(181,700	)		(96,890	)

Net deferred income tax assets		23,908			43,642

Deferred income tax liabilities:
Property and equipment		(22,320	)		(33,441	)
Intangible assets—Foreign		(3,544	)		(4,094	)
Prepaid expense		(873	)		(506	)
Partnership interests		—			(675	)
Intangible assets—U.S. Domestic		—			(8,155	)
Other		(234	)		(158	)

Total deferred tax liabilities		(26,971	)		(47,029	)

Net deferred income tax liabilities	$	(3,063	)	$	(3,387	)

ASC 740, Income Taxes, requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. For the year ended December 31, 2012, the Company determined that the valuation allowance was approximately $82.6 million, consisting of $70.7 million against federal deferred tax assets and $11.9 million against state deferred tax assets. This represented an increase of $37.9 million. For the year ended December 31, 2013, the Company determined that the valuation allowance should be $96.9 million, consisting of $86.9 million against federal deferred tax assets and $10.0 million against state deferred tax assets. This represented an increase of $14.3 million in valuation allowance. For the year ended December 31, 2014, the Company determined that the valuation allowance should be $181.7 million, consisting of $161.2 million against federal deferred tax assets and $20.5 million against state deferred tax assets. This represents an increase of $84.8 million in valuation allowance.

The Company has federal net operating loss carryforwards that begin to expire in 2028 available to offset future taxable income of approximately $336.2 million and $238.3 million at December 31, 2014 and 2013, respectively.

The Company has state net operating loss carryforwards, primarily in Florida and Kentucky, that begin to expire in years 2015 through 2035, available to offset taxable income of approximately $447.1 million and $334.8 million at December 31, 2014 and 2013, respectively. Utilization of net operating loss carryforwards in any one year may be limited.

ASC 740, Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a threshold for the recognition and measurement of a tax position taken or expected to be taken on a tax return. Under ASC 740, Income Taxes, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740, Income Taxes, provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Since its adoption for uncertainty in income taxes pursuant to ASC 740, Income Taxes, the Company has recognized interest and penalties accrued related to unrecognized tax exposures in income tax expense. During the year ended December 31, 2014, the Company recognized a benefit of approximately $1.6 million in interest and penalties related to unrecognized tax exposures in income tax expense. During the year ended December 31, 2013, the Company accrued approximately $0.2 million in interest and penalties related to unrecognized tax exposures in income tax expense. During the year ended December 31, 2012, the Company accrued approximately $1.3 million in interest and penalties related to unrecognized tax exposures in income tax expense. The Company made payments of accrued interest and penalty during the year ended December 31, 2014 of approximately $0.9 million. The Company did not make any payments of interest and penalties accrued during the years ended December 31, 2013 and 2012.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands):

The total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate was $0.4 million and $0.6 million at December 31, 2014 and 2013, respectively. The Company believes that it is reasonably possible that the portion of unrecognized tax benefits related to pre-acquisition foreign tax positions will reverse within the next 12 months due to the expiration of statutes of limitations.

The Company is subject to taxation in the United States, approximately 24 state jurisdictions, the Netherlands, and throughout Latin America, namely, Argentina, Bolivia, Brazil, Costa Rica, Dominican Republic, El Salvador, Guatemala and Mexico. However, the principal jurisdictions for which the Company is subject to tax are the United States, Florida and Argentina.

The Company's future effective tax rates could be affected by changes in the relative mix of taxable income and taxable loss jurisdictions, changes in the valuation of deferred tax assets or liabilities, or changes in tax laws or interpretations thereof. The Company monitors the assumptions used in estimating the annual effective tax rate and makes adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating the Company's annual effective tax rates, future income tax expense (benefit) could be materially affected.

The Company has not provided U.S. federal and state deferred taxes on the cumulative earnings of non-U.S. affiliates and associated companies that have been reinvested indefinitely. The aggregate undistributed positive accumulated earnings of the Company's foreign subsidiaries for which no deferred tax liability has been recorded is approximately $19.8 million. It is not practicable to determine the U.S. income tax liability that would be payable if such earnings were not reinvested indefinitely.

The Company is routinely under audit by federal, state, or local authorities in the areas of income taxes and other taxes. These audits may include questioning the timing and amount of deductions and compliance with federal, state, and local tax laws. The Company regularly assesses the likelihood of adverse outcomes from these audits to determine the adequacy of the Company's provision for income taxes. To the extent the Company prevails in matters for which accruals have been established or is required to pay amounts in excess of such accruals, the effective tax rate could be materially affected. In accordance with the statute of limitations for federal tax returns, the Company's federal tax returns for the years 2011 through 2013 are subject to examination. During 2012, the Company closed a US Federal income tax examination for tax years 2007 through 2008. All issues proposed were agreed to, with the exception of interest and penalties for which an accrual of $2.2 million was recorded. During the third quarter of 2013, the Company closed the US federal income tax audit related to calendar year 2009 with no material adjustments. The Company closed the New York state audit for tax years 2006 through 2008 with a favorable result during the first quarter of 2013. During 2014, the Company reached a favorable settlement with the US Internal Revenue Service related to the interest and penalty issues in tax years 2007 and 2008 and various U.S. state and local and foreign jurisdictions related to tax years 2005 through 2012. As a result, the Company released $3.2 million of previously recorded reserves.

	December 31, 2014			December 31, 2013

$90.0 million senior secured credit facility—(Term Facility) (net of unamortized debt discount of $1,296 and $2,010 at December 31, 2014 and 2013) with interest rates at LIBOR (with a minimum rate of 1.0%) or prime (with a minimum rate of 2.0%) plus applicable margin (6.5% for LIBOR Loans and 5.50% for Base Rate Loans), secured on a first priority basis by a perfected security interest in substantially all of the Company's assets. Interest rates are at LIBOR plus applicable margin due at various maturity dates through October 15, 2016	$	88,704		$	87,989
$100.0 million senior secured credit facility—(Revolver Credit Facility) with interest rates at LIBOR or prime plus applicable margin, secured on a first priority basis by a perfected security interest in substantially all of the Company's assets. Interest rates are at LIBOR plus applicable margin due at various maturity dates through October 15, 2016		—			50,000
$380.1 million Senior Subordinated Notes (net of unamortized debt discount of $1,643 and $2,383 at December 31, 2014 and 2013) due April 15, 2017; semi-annual cash interest payments due on April 15 and October 15, fixed interest rate of 9⁷/8%		378,407			377,667
$350.0 million Senior Secured Second Lien Notes (net of unamortized debt discount of $725 and $1,074 at December 31, 2014 and 2013) due January 15, 2017; semi-annual cash interest payments due on May 15 and November 15, fixed interest rate of 8⁷/8%		349,275			348,926
$75.0 million Senior Secured Notes due January 15, 2017; semi-annual cash interest payments due on January 15 and July 15, fixed interest rate of 11³/4%		75,000			75,000
Capital leases payable with various monthly payments plus interest at rates ranging from 1.0% to 19.1%, due at various maturity dates through March 2022		66,552			45,455
Various other notes payable and seller financing promissory notes with various monthly payments plus interest at rates ranging from 15.6% to 19.5%, due at various maturity dates through April 2021		9,183			6,629

		967,121			991,666
Less current portion		(26,350	)		(17,536	)

	$	940,771		$	974,130

Maturities under the obligations described above are as follows at December 31, 2014 (in thousands):

At December 31, 2014 and 2013 and 2012, the prime interest rate was 3.25%. The effective interest rate of instruments approximates the stated rate.

On April 20, 2010, the Company issued $310.0 million in aggregate principal amount of 9⁷/8% senior subordinated notes due 2017 and repaid the existing $175.0 million in aggregate principal amount 13.5% senior subordinated notes due 2015, including accrued and unpaid interest and a call premium of approximately $5.3 million. The remaining proceeds were used to pay down $74.8 million of the Term Loan B and $10.0 million of the Revolver. A portion of the proceeds was placed in a restricted account pending application to finance certain acquisitions, including the acquisitions of a radiation treatment center and physician practices in South Carolina consummated on May 3, 2010. The Company incurred approximately $11.9 million in transaction fees and expenses, including legal, accounting and other fees and expenses associated with the offering, and the initial purchasers' discount of $1.9 million.

In March 2011, 21C, a wholly owned subsidiary of Parent, issued to DDJ Capital Management, LLC, $50 million in aggregate principal amount of 9⁷/8% Senior Subordinated Notes due 2017. The proceeds of $48.5 million were used (i) to fund the Company's acquisition of all of the outstanding membership units of MDLLC and substantially all of the interests of MDLLC's affiliated companies (the "MDLLC Acquisition"), not then controlled by the Company and (ii) to fund transaction costs associated with the MDLLC Acquisition. An additional $16.25 million in senior subordinated notes were issued to the seller in the transaction. In August 2013, we issued an additional $3.8 million of Senior Subordinated notes to the seller as a component of the MDLLC earn-out amount.

On May 10, 2012, the Company issued $350.0 million in aggregate principal amount of 8⁷/8% Senior Secured Second Lien Notes due 2017 (the "Secured Notes").

The Secured Notes were issued pursuant to an indenture, dated May 10, 2012 (the "Secured Notes Indenture"), among 21C, the guarantors signatory thereto and Wilmington Trust, National Association. The Secured Notes are senior secured second lien obligations of 21C and are guaranteed on a senior

secured second lien basis by 21C, and each of 21C's domestic subsidiaries to the extent such guarantor is a guarantor of 21C's obligations under the Revolving Credit Facility (as defined below).

Interest is payable on the Secured Notes on each May 15 and November 15, commencing November 15, 2012. 21C may redeem some or all of the Secured Notes at any time prior to May 15, 2014 at a price equal to 100% of the principal amount of the Secured Notes redeemed plus accrued and unpaid interest, if any, and an applicable make-whole premium. On or after May 15, 2014, 21C may redeem some or all of the Secured Notes at redemption prices set forth in the Secured Notes Indenture. In addition, at any time prior to May 15, 2014, 21C may redeem up to 35% of the aggregate principal amount of the Secured Notes, at a specified redemption price with the net cash proceeds of certain equity offerings.

The Indenture contains covenants that, among other things, restrict the ability of the Company, 21C and certain of its subsidiaries to: incur, assume or guarantee additional indebtedness; pay dividends or redeem or repurchase capital stock; make other restricted payments; incur liens; redeem debt that is junior in right of payment to the Notes; sell or otherwise dispose of assets, including capital stock of subsidiaries; enter into mergers or consolidations; and enter into transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications. In addition, in certain circumstances, if 21C sells assets or experiences certain changes of control, it must offer to purchase the Notes.

21C used the proceeds to repay its existing senior secured revolving credit facility of approximately $63.0 million and the Term Loan B portion of approximately $265.4 million, of its senior secured credit facilities, which were prepaid in their entirety, cancelled and replaced with the new Revolving Credit Facility described below, and to pay related fees and expenses. Any remaining net proceeds were used for general corporate purposes. 21C incurred approximately $14.4 million in transaction fees and expenses, including legal, accounting and other fees and expenses associated with the offering, and the initial purchasers' discount of $1.7 million.

On October 25, 2013, the Company completed the acquisition of OnCure. The transaction included the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions. Interest is payable on the secured notes on each January 15 and July 15, commencing July 15, 2014.

On May 10, 2012, 21C entered into the Credit Agreement (the "Original Credit Agreement") among 21C, as borrower, the Company, Wells Fargo Bank, National Association, as administrative agent, collateral agent, issuing bank and as swingline lender, the other agents party thereto and the lenders party thereto. On August 28, 2013, 21C entered into an Amendment Agreement (the "Amendment Agreement") to the Original Credit Agreement (as amended and restated by the Amendment Agreement, the "Credit Agreement"). Pursuant to the terms of the Amendment Agreement the amendments to the Original Credit Agreement became effective on August 29, 2013.

The Credit Agreement provides for credit facilities consisting of (i) a $90 million term loan facility (the "Term Facility") and (ii) a revolving credit facility provided for up to $100 million of revolving

extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit) (the "Revolving Credit Facility" and together with the Term Facility, the "Credit Facilities"). The Term Facility and the Revolving Credit Facility each have a maturity date of October 15, 2016.

Loans under the Revolving Credit Facility and the Term Facility are subject to the following interest rates:

21C will pay certain recurring fees with respect to the Credit Facilities, including (i) fees on the unused commitments of the lenders under the Revolving Credit Facility, (ii) letter of credit fees on the aggregate face amounts of outstanding letters of credit and (iii) administration fees.

The obligations of 21C under the Credit Facilities are guaranteed by the Company and certain direct and indirect wholly-owned domestic subsidiaries of 21C.

The Revolving Credit Facility requires that the Company comply with certain financial covenants, including:

The Revolving Credit Facility also requires that the Company comply with various other covenants, including, but not limited to, restrictions on new indebtedness, asset sales, capital expenditures, acquisitions and dividends, with which the Company was in compliance as of December 31, 2014.

On April 15, 2014, the Company obtained a waiver of borrowing conditions due to a default of not providing audited financial statements for the year ended December 31, 2013 within 90 days after year end. The Company paid the administrative agent for the account of the Revolving Lenders a fee equal to 0.125% of such Lender's aggregate commitments, recorded in the interest expense, net caption in the consolidated statements of operations and comprehensive loss. The Senior Revolving Credit Facility provides for a 30 day cure period for the filing of the audited annual financial statements. The default was cured with the provision of the audited financial statements to the administrative agent on April 30, 2014.

On May 19, 2014, the Company entered into a Purchase Money Note Purchase Agreement (the "Note Purchase Agreement") with Theriac (a related party real estate entity owned by certain of the Company's directors and officers). Pursuant to the Note Purchase Agreement, Theriac loaned to the Company, pursuant to an unsecured purchase money note, the principal amount of $7.4 million. The Company, and certain of its domestic subsidiaries of the Company, guaranteed the obligations under the note. The note will mature on June 15, 2015 and is subject to an interest rate payable in cash of 10.75% per annum or by adding the amount of such interest to the aggregate principal amount of outstanding notes at the interest rate of 12.0% per annum. The proceeds from the issuance of the note were used to pay for purchases or improvements of property and equipment or to refinance debt incurred to finance such purchases or improvements.

A portion of the net proceeds from the issuance of the Company's Series A Preferred Stock was used to repay all outstanding borrowings under the Note Purchase Agreement on September 26, 2014.

On July 28, 2014, MDLLC, a Florida limited liability company and indirect wholly owned subsidiary of the Company, certain of its subsidiaries and affiliates, including the Company, entered into a credit and guaranty agreement (the "MDLLC Credit Agreement").

The MDLLC Term Loans were subject to interest rates, for any interest period, at a rate equal to 14.0% per annum.

A portion of the net proceeds from the issuance of the Company's Series A Preferred Stock was used to repay all outstanding borrowings under the MDLLC Credit Agreement on September 26, 2014.

On February 10, 2014, 21C East Florida and South Florida Radiation Oncology Coconut Creek, LLC ("Coconut Creek"), a subsidiary of SFRO, as borrowers, entered into a new credit agreement (the "SFRO Credit Agreement"). The SFRO Credit Agreement provides for a $60 million Term B Loan in favor of 21C East Florida ("Term B Loan") and $7.9 million Term A Loan in favor of Coconut Creek issued for purposes of refinancing existing SFRO debt ("Term A Loan" and together with the Term B Loan, the "SFRO Term Loans"). The SFRO Term Loans each have a maturity date of January 15, 2017. The Company incurred approximately $1.0 million in deferred financing costs relating to the SFRO debt.

The SFRO Term Loans were subject to variable interest rates. In addition, the Term B Loan contained a provision allowing 21C East Florida to elect payment in kind interest payments.

A portion of the net proceeds from the Series A Preferred Stock was used to repay all outstanding borrowings under the Company's South Florida Radiation Oncology Term A, Term A-1, and Term B loans on September 26, 2014.

For the year ended December 31, 2014, the Company incurred deferred financing costs of approximately $2.4 million related to the issuance of Term B and Term A-1 loans Facilities for the SFRO transaction in February, 2014 and the MDLLC Credit and Guaranty Agreement in July, 2014. For the year ended December 31, 2013, the Company incurred deferred financing costs of approximately $1.4 million related to the Company's $190.0 million senior secured term and revolving credit facility entered into in August 2013. For the year ended December 31, 2012, the Company incurred deferred financing costs of approximately $14.4 million of which $8.2 million related to the

issuance of the $350.0 million in aggregate principal amount of 8⁷/8% senior secured second lien notes due 2017 in May 2012, and $6.2 million related to the Company's $140.0 million senior secured revolving credit facility entered into in May 2012. For the year ended December 31, 2011, the Company incurred deferred financing costs of approximately $4.8 million of which $1.6 million related to the issuance of the $50.0 million in aggregate principal amount of 9⁷/8% senior subordinated notes due 2017 in March 2011, $2.9 million related to the amendment to the Company's senior secured credit facility and the $50.0 million incremental amendment in September 2011, and $0.3 million related to the registration of the issuance of the $16.25 million in aggregate principal amount of 9⁷/8% senior subordinated notes due 2017 in March 2011 related to the MDLLC transaction. The consolidated balance sheets as of December 31, 2014 and 2013, include $12.0 million and $17.8 million, respectively, in other long-term assets related to unamortized deferred financing costs. The Company recorded approximately $6.3 million, $5.6 million, and $5.4 million, to interest expense for the years ended December 31, 2014, 2013, and 2012, respectively, related to the amortization of deferred financing costs.

The Company leases certain of its treatment centers (each, a "facility" and, collectively, the "facilities") and other properties from partnerships which are majority-owned by related parties (each, a "related-party lessor" and, collectively, the related party lessors"). The related-party lessors construct the facilities in accordance with the Company's plans and specifications and subsequently leases these facilities to the Company. Due to the related-party relationship, the Company is considered the owner of these facilities during the construction period pursuant to the provisions of ASC 840-40, Sale-Leaseback Transactions. In accordance with ASC 840-40, the Company records a construction-in-progress asset for these facilities with a corresponding finance obligation during the construction period. Certain related parties guarantee the debt of the related-party lessors, which is considered to be "continuing involvement" pursuant to ASC 840-40. Accordingly, these leases do not qualify as a normal sale-leaseback at the time that construction is completed and these facilities were leased to the Company. As a result, the costs to construct the facilities and the related finance obligation remain on the Company's consolidated balance sheets after construction was completed. The construction costs are included in real estate subject to finance obligation in the accompanying consolidated balance sheets. The finance obligation is amortized over the lease during the construction period term based on the payments designated in the lease agreements with a portion of the payment representing a free ground lease recorded in rent expense. The assets classified as real estate subject to finance obligation are amortized on a straight-line basis over their useful lives.

In certain transactions, the related-party lessor will purchase a facility during the Company's acquisition of a business and lease the facility to the Company. These transactions also are within the scope of ASC 840-40. Certain related parties guarantee the debt of the related-party lessor, which is considered to be continuing involvement pursuant to ASC 840-40. Accordingly, these leases do not qualify as normal sale-leaseback. As a result, the cost of the facility, including land and the related finance obligation are recorded on the Company's consolidated balance sheets. The cost of the facility, including land, is included in real estate subject to finance obligation in the accompanying consolidated balance sheets. The finance obligation is amortized over the lease term based on the payments designated in the lease agreements and the Real Estate Subject to Finance Obligation are amortized on a straight-line basis over their useful lives.

The net book values of real estate subject to finance obligation are summarized as follows:

Depreciation expense relating to real estate subject to finance obligation is classified in depreciation and amortization in the accompanying consolidated statements of operations and comprehensive loss.

Future payments of the finance obligation as of December 31, 2014, are as follows:

Interest expense relating to the finance obligation was approximately $1.1 million, $1.1 million, and $0.8 million for the years ended December 31, 2014, 2013, and 2012, respectively.

On September 26, 2014, the Company entered into a Subscription Agreement (the "Subscription Agreement") with CPPIB. Pursuant to the Subscription Agreement, the Company issued to CPPIB an aggregate of 385,000 newly issued shares of its Series A Preferred Stock, par value $0.001 per share, stated value $1,000 per share, for a purchase price of $325.0 million.

As set forth in the Certificate of Designations of Series A Convertible Preferred Stock (the "Certificate of Designations"), holders of Series A Preferred Stock are entitled to receive, as and if declared by the Board of Directors of the Company, dividends at an applicable rate per annum, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year. During the first three years after issuance, any dividends when and if declared, shall be paid by the Company in the form of additional shares of Series A Preferred Stock. During the first twelve months after issuance,

the applicable dividend rate on the Series A Preferred Stock shall be 9.875%, thereafter increasing on a periodic basis, as set forth in the Certificate of Designations. Such dividends accrue daily, whether or not declared by the Board of Directors of the Company. After the third anniversary of issuance and only if the Company's outstanding 9⁷/8% senior subordinated notes due 2017 are repaid in full, or upon certain other events of default, dividends shall be paid in cash upon the election of a majority of the holders of Series A Preferred Stock (the "Majority Preferred Holders").

The Series A Preferred Stock is mandatorily convertible into common stock, par value $0.01 per share (the "Common Stock") of the Company upon the occurrence of a qualifying initial public offering of the Company or a qualifying merger. In the case of a qualifying initial public offer, the conversion price is the initial public offering price of the qualifying initial public offer. In the case of a qualifying merger, the conversion price is the price per share of Common Stock pursuant to the qualifying merger. The Series A Preferred Stock also becomes convertible on the tenth anniversary of issuance at the option of either the Company or CPPIB. Absent a qualifying initial public offering or qualifying merger, the conversion price shall be determined upon appraisal. If upon conversion, the Series A Preferred Stock converted to Common Stock represents greater than 29% of the Company's outstanding Common Stock ("Excess Common Stock"), CPPIB has the option to convert amounts in excess of 29% to newly issued preferred stock (the "Excess Preferred Stock"). Holders of the Excess Preferred Stock are entitled to receive dividends, payable in additional shares of Excess Preferred Stock at 12% per annum. The Excess Preferred Stock becomes mandatorily convertible upon the 15^th anniversary of issuance and may be redeemed by the Company at any time at 100% of its stated value. If CPPIB does not elect to receive Excess Preferred Stock, the Company is required to issue a new Class B common stock that will be exchanged for the Excess Common Stock. The Class B Common Stock shall have rights that are identical in all respects to the rights of the Common Stock, except that shares of Class B Common Stock shall have no voting rights with respect to any vote relating to the election or removal of directors.

Holders of Series A Preferred Stock also have, among other rights, the right to require the Company to repurchase their shares upon the occurrence of certain events of default and certain change of control transactions, at the prices set forth in the Certificate of Designations. In addition, the Certificate of Designations also provides for certain consent rights of the Majority Preferred Holders in connection with specified corporate events of 21CI or its subsidiaries, including, among other things, with respect to certain equity issuances and certain acquisitions, financing transactions and asset sale transactions. Upon certain events of default and the obtaining of applicable anti-trust regulatory approvals, holders of Series A Preferred Stock are also entitled to vote together with holders of Common Stock, on an as-converted basis. In addition, the Series A Preferred Stock is senior in preference to the Company's Common Stock with respect to dividend rights, rights upon liquidation, winding up or dissolution.

Pursuant to the terms of the Subscription Agreement, immediately following the occurrence of a qualifying initial public offering of the Company, a qualifying merger, or any date following September 26, 2024 at the option of either CPPIB or the Company, the Company will execute and deliver to CPPIB a Warrant Agreement (the "Warrant Agreement") and issue to CPPIB warrants to purchase shares of Common Stock having a then-current value of $30 million, at a purchase price of $0.01 per share. The warrants expire on the tenth anniversary of the date of issuance. The Company evaluated the contingent events that could trigger the conversion of the Series A Preferred Stock to Common Stock and issuance of warrants and determined that the contingent conversion features qualify as an embedded derivative, requiring bifurcation and classification as a liability, measured at fair

value. The estimated fair value measurement was developed using significant unobservable inputs (Level 3). The primary valuation technique used was comparing the difference between the present value of discounted cash flows, assuming no triggering events occur and the present value of discounted cash flows assuming a triggering event does occur. The assumptions incorporated management's estimates of timing and probability of each triggering event, with those cash flows discounted using rates commensurate with the risks of those cash flows. The Company determined the fair value of the embedded derivative to be, and recorded approximately $15.0 million as of September 30, 2014.

The Company is accreting changes to the Series A Preferred Stock redemption value through the tenth anniversary of issuance utilizing the interest method. If the Series A Preferred Stock were redeemable as of the balance sheet date, the Series A Preferred Stock would be redeemable at its stated value plus accrued dividends.

The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries in which it has a controlling financial interest. Noncontrolling interests-nonredeemable principally represent minority shareholders' proportionate share of the equity of certain consolidated majority owned entities of the Company. The Company has certain arrangements whereby the noncontrolling interest may be redeemed upon the occurrence of certain events outside of the Company's control. These noncontrolling interests have been classified outside of permanent equity on the Company's consolidated balance sheets. The noncontrolling interests are not redeemable at December 31, 2014 and 2013, and the contingent events upon which the noncontrolling interest may be redeemed are not probable of occurrence at December 31, 2014. Accordingly, the noncontrolling interests are measured at their carrying value at December 31, 2014 and 2013.

(15) Reconciliation of total equity and noncontrolling interests (Continued)

The following table presents changes in total equity for the respective periods (in thousands):

	21st Century Oncology Holdings, Inc. Shareholder's Equity			Noncontrolling interests— nonredeemable			Total Equity			Noncontrolling interests— redeemable

Balance, January 1, 2012 (Restated)	$	155,647		$	17,197		$	172,844		$	12,728
Net (loss) income (Restated)		(158,707	)		2,445			(156,262	)		609
Other comprehensive loss from unrealized loss on interest rate swap agreement		(333	)		—			(333	)		—
Other comprehensive loss from foreign currency translation (Restated)		(7,173	)		(653	)		(7,826	)		(185	)
Amortization of other comprehensive income for termination of interest rate swap agreement, net of tax		958			—			958			—
Purchase price fair value of noncontrolling interest—redeemable		—			—			—			(1,189	)
Consolidation of noncontrolling interest		—			146			146			—
Stock-based compensation		3,257			—			3,257			—
Payment of note receivable from shareholder		72						72			—
Distributions		—			(3,492	)		(3,492	)		(595	)

Balance, December 31, 2012 (Restated)	$	(6,279	)	$	15,643		$	9,364		$	11,368
Net (loss) income (Restated)		(87,795	)		1,964			(85,831	)		(126	)
Other comprehensive loss from foreign currency translation (Restated)		(14,279	)		(1,505	)		(15,784	)		(29	)
Proceeds from noncontrolling interest holders		—			—			—			765
Deconsolidation of noncontrolling interest		(9	)		9			—			—
Noncash contribution of capital by noncontrolling interest holders		—			—			—			4,235
Issuance of equity LLC units relating to earn-out liability		705			—			705			—
Purchase price fair value of noncontrolling interest—nonredeemable		(2,404	)		2,194			(210	)		—
Termination of prepaid services by noncontrolling interest holder		—			(2,551	)		(2,551	)		—
Step up in basis of joint venture interest		83			—			83			—
Stock based compensation		597			—			597			—
Distributions		—			(1,974	)		(1,974	)		(314	)

Balance, December 31, 2013 (Restated)	$	(109,381	)	$	13,780		$	(95,601	)	$	15,899
Net (loss) income (Restated)		(357,291	)		3,300			(353,991	)		1,294
Net periodic benefit cost of pension plan		(91	)		—			(91	)		—
Other comprehensive loss from foreign currency translation (Restated)		(10,727	)		(1,371	)		(12,098	)		—
Accretion of Series A convertible redeemable preferred stock to redemption value		(3,457	)		—			(3,457	)		—
Accrued Series A convertible redeemable preferred stock dividends		(12,683	)		—			(12,683	)		—
Reclassification of SFRO NCI—nonredeemable, Restated		—			32,725			32,725			—
Purchase price fair value of noncontrolling interest—nonredeemable		—			7,816			7,816			—
Proceeds from issuance of noncontrolling interest—nonredeemable		85			1,165			1,250			—
Proceeds from noncontrolling interest holders—nonredeemable		—			296			296			—
Stock-based compensation		106			—			106			—
Distributions		—			(1,873	)		(1,873	)		(1,920	)

Balance, December 31, 2014 (Restated)	$	(493,439	)	$	55,838		$	(437,601	)	$	15,273

(15) Reconciliation of total equity and noncontrolling interests (Continued)

Redeemable equity securities with redemption features that are not solely within the Company's control are classified outside of permanent equity. Those securities are initially recorded at their estimated fair value on the date of issuance. Securities that are currently redeemable or redeemable after the passage of time are adjusted to their redemption value as changes occur. In the unlikely event that a redeemable equity security will require redemption, any subsequent adjustments to the initially recorded amount will be recognized in the period that a redemption becomes probable. Contingent redemption events vary by joint venture and generally include either the holder's discretion or circumstances jeopardizing: the joint ventures' ability to provide services, the joint ventures' participation in Medicare, Medicaid, or other third party reimbursement programs, the tax-exempt status of minority shareholders, and violation of federal statutes, regulations, ordinances, or guidelines. Amounts required to redeem noncontrolling interests are based on either fair value or a multiple of trailing financial performance. These amounts are not limited.

ASC 820 requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

In accordance with ASC 820, the fair value of the Term Loan portion of the Term Facility, the 9⁷/8% Senior Subordinated Notes due 2017, 8⁷/8% Senior Secured Second Lien Notes due 2017, and the 11³/4% Senior Secured Notes due 2017 was based on prices quoted from third-party financial institutions (Level 2). At December 31, 2014, the fair values are as follows (in thousands):

As of December 31, 2013, the Company held certain items that are required to be measured at fair value on a recurring basis including foreign currency derivative contracts. Cash and cash equivalents are reflected in the consolidated financial statements at their carrying value, which approximate their fair value due to their short maturity. The carrying values of the Company's long-term debt other than the Term Loan portion of the senior secured credit facility, Senior Subordinated Notes, Senior Secured Second Lien Notes and Senior Secured Notes approximates fair value due to the length of time to maturity and/or the existence of interest rates that approximate prevailing market rates. There have been no transfers between levels of valuation hierarchies for the years ended December 31, 2014 and 2013.

The following items are measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820, as of December 31, 2014 and 2013:

The estimated fair value of the Company's embedded derivative feature of Series A convertible redeemable preferred stock was developed using significant unobservable inputs (Level 3) primarily consisting of management's assessment of the probability, timing, and weighting of multiple triggering event scenarios. The primary valuation technique used was comparing the difference between the present value of discounted cash flows, assuming no triggering events occur and the present value of discounted cash flows assuming a triggering event does occur. The assumptions incorporated management's estimates of timing and probability of each triggering event, with those cash flows discounted using rates commensurate with the risks of those cash flows. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship between the directional change of each input in not usually linear.

The estimated fair value of the Company's foreign currency derivative agreements considered various inputs and assumptions, including the applicable spot rate, forward rates, maturity, implied volatility and other relevant economic measures, all of which are observable market inputs that are classified under Level 2 of the fair value hierarchy. The valuation technique used is an income approach with the best market estimate of what will be realized on a discounted cash flow basis.

The Company currently maintains equity interests in six unconsolidated joint ventures, including a 45% interest in a urology surgical facility in Maryland, a 33.6% interest in the development and management of a proton beam therapy center to be constructed in Manhattan, New York, a 50.0% interest in a radiation oncology facility in Florida, a 50.1% interest in a joint venture which owns the real estate of an administrative building in California, and two joint ventures in South America.

The Company utilizes the equity method to account for its investments in the unconsolidated joint ventures. At December 31, 2014 and 2013, the Company's investments in the unconsolidated joint ventures were approximately $1.6 million and $2.6 million, respectively. The Company's equity in the earnings (losses) of the equity investments in joint ventures was approximately ($0.1 million), ($0.5 million), and ($0.8 million) for the years ended December 31, 2014, 2013, and 2012, respectively.

The condensed financial position and results of operations of the unconsolidated joint venture entities are as follows:

A summary of the changes in the equity investment in the unconsolidated joint ventures is as follows:

(in thousands):

Balance at January 1, 2012	$	692
Capital contributions in joint venture		714
Distributions		(9	)
Foreign currency transaction loss		(5	)
Equity interest in net loss of joint ventures		(817	)

Balance at December 31, 2012	$	575
Capital contributions in joint venture		992
Distributions		(171	)
Foreign currency transaction loss		(12	)
Purchase of investment		1,625
Equity interest in net loss of joint ventures		(454	)

Balance at December 31, 2013	$	2,555
Capital contributions in joint venture		620
Distributions		(221	)
Foreign currency transaction loss		(11	)
Impairment loss		(1,247	)
Equity interest in net loss of joint ventures		(50	)

Balance at December 31, 2014	$	1,646

As of December 31, 2014, the Company maintains approximately $5.0 million in outstanding letters of credit as follows:

The Company is obligated under various operating leases for office space, medical equipment, and an aircraft lease. Total lease expense incurred under these leases was approximately $79.5 million, $54.5 million, and $45.1 million for the years ended December 31, 2014, 2013, and 2012, respectively.

Future fixed minimum annual lease commitments are as follows at December 31, 2014:

The Company leases land and space at its treatment centers under operating lease arrangements expiring in various years through 2044. The majority of the Company's leases provide for either fixed rent escalation clauses, ranging from 1.0% to 6.0%, or escalation clauses tied to the Consumer Price Index. The rent expense for leases containing fixed rent escalation clauses or rent holidays is recognized by the Company on a straight-line basis over the lease term. Leasehold improvements made by a lessee are recorded as leasehold improvements. Leasehold improvements are amortized over the shorter of their estimated useful lives (generally 39 years or less) or the related lease term plus anticipated renewals when there is an economic penalty associated with nonrenewal. An economic penalty is deemed to occur when the Company forgoes an economic benefit, or suffers an economic detriment by not renewing the lease. Penalties include, but are not limited to, impairment of existing leasehold improvements, profitability, location, uniqueness of the property within its particular market, relocation costs, and risks associated with potential competitors utilizing the vacated location. Lease incentives received are recorded as accrued rent and amortized as reductions to lease expense over the lease term.

Financial instruments, which subject the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company maintains its cash in bank accounts with highly rated financial institutions. These accounts may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company grants credit, without collateral, to its patients, most of whom are local residents. Concentrations of credit risk with respect to accounts receivable relate principally to third- party payers, including managed care contracts, whose ability to pay for services rendered is dependent on their financial condition.

The Company operates in a highly regulated and litigious industry. As a result, the Company is involved in disputes, litigation, and regulatory matters incidental to its operations, including governmental investigations, personal injury lawsuits, employment claims, and other matters arising out of the normal conduct of business.

imposes penalties of not less than $5,500 and not more than $11,000, plus three times the amount of damages which the government sustains because of the submission of a false claim. If the Company is found to have violated the False Claims Act, it could also be excluded from participation in Medicare, Medicaid and other federal healthcare programs. Some states have adopted similar state whistleblower and false claims provisions. Certain of the Company's facilities have received, and other facilities may receive, inquiries from federal and state agencies related to potential False Claims Act liability. Depending on whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution could have a material adverse effect on the Company's consolidated financial position, results of operations and liquidity.

Governmental agencies and their agents, such as the Medicare Administrative Contractors, as well as the Office of Inspector General of the U.S. Department of Health and Human Services (the "OIG"), CMS and state Medicaid programs, conduct audits of our healthcare operations. Private payers may conduct similar post-payment audits, and the Company also performs internal audits and monitoring. Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material adverse effect on the Company's consolidated financial position, results of operations and liquidity.

On February 18, 2014, the Company was served with subpoenas from the OIG acting with the assistance of the U.S. Attorney's Office for the Middle District of Florida who together have requested the production of medical records of patients treated by certain of its physicians for the period from January 2007 to present regarding the ordering, billing and medical necessity of certain laboratory services as part of a civil False Claims Act investigation, as well as the Company's agreements with such physicians. The laboratory services under review relate to the utilization of fluorescence in situ hybridization ("FISH") laboratory tests ordered by certain of the Company's employed physicians and performed by the Company. The Company was served with another subpoena from the OIG on January 22, 2015, requesting additional documents related to this matter for the period from January 1, 2005 up through the production of documents responsive to the February 2014 subpoena. The Company has recorded a liability for this matter of approximately $4.7 million and $5.1 million and that is included in accrued expenses in its consolidated balance sheet as of December 31, 2013 and 2014, respectively. The recorded estimate is based on a probability weighted analysis of the low-end of the range of the liability that considers the facts currently known by the Company, the review of qualitative and quantitative factors, and an assessment of potential outcomes under different scenarios used to assess the Company's exposure which may be used to determine a potential settlement should the Company decide not to litigate. In December 2015, the Company's subsidiary, 21st Century Oncology, LLC ("21C LLC"), entered into a settlement agreement with the federal government, among others, to resolve the matter. Pursuant to the settlement agreement, 21C LLC agreed to pay $19.75 million to the federal government and approximately $0.5 million in attorneys' fees and costs related to the qui tam action. Further, during the first quarter of 2016, the Company discovered that certain of its employees may have falsely certified meaningful use attestations for program years 2012, 2013 and 2014. As a result, the Company agreed to reimburse approximately $3.7 million to Medicare.

The Company received two Civil Investigative Demands ("CIDs"), one on October 22, 2014 addressed to 21C and one on October 31, 2014 addressed to SFRO, from the DOJ pursuant to the False Claims Act. The CIDs requested information concerning allegations that the Company knowingly billed for services that were not medically necessary and focused on Gamma services (which are dosimetry calculations performed during the course of radiation therapy). The CIDs cover the period from January 1, 2009 to the present. Among other information requests, the CIDs request certain

documents and information related to the administration of radiation therapy; selection of various radiation therapies and Gamma services. The Company's total billings to federal health care programs including Medicare, Medicare Advantage and Medicaid for Gamma services from January 1, 2009 to December 31, 2014 are approximately $68.4 million. The dispute involved the training protocols of certain staff in the utilization of Gamma and was limited to early implementation and start-up activities at new facility locations across the country. The Company has not recorded any liability for this matter as of December 31, 2014.

Based on reviews performed to date, the Company does not believe that it or its physicians knowingly submitted false claims in violation of applicable Medicare statutory or regulatory requirements. The Company is cooperating fully with the subpoena requests and the DOJ's investigation.

In addition to the matters described below, the Company is involved in various legal actions and claims arising in the ordinary course of its business. It is the opinion of management, based on advice of legal counsel, that such litigation and claims will be resolved without material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

The Company has acquired and plans to continue acquiring businesses with prior operating histories. Acquired companies may have unknown or contingent liabilities, including liabilities for failure to comply with health care laws and regulations, such as billing and reimbursement, fraud and abuse and similar anti-referral laws. Although the Company institutes policies designed to conform practices to its standards following completion of acquisitions, there can be no assurance that the Company will not become liable for past activities that may later be asserted to be improper by private plaintiffs or government agencies. Although the Company generally seeks to obtain indemnification from prospective sellers covering such matters, there can be no assurance that any such matter will be covered by indemnification, or if covered, that such indemnification will be adequate to cover potential losses and fines.

The Company is party to employment agreements with several of its employees that provide for annual base salaries, targeted bonus levels, severance pay under certain conditions, and certain other benefits.

The Company has a defined contribution retirement plan under Section 401(a) of the Internal Revenue Code (the Retirement Plan). The Retirement Plan allows all full-time employees after one year of service to defer a portion of their compensation on a pretax basis through contributions to the Retirement Plan. The Company provides for a discretionary match based on a percentage of the employee's annual contribution. At December 31, 2014 and 2013, the Company accrued approximately $3.6 million and $1.1 million, which represents a 2.0% and 0.5% employer match, respectively related to the Company's approved discretionary match.

The Company has a non-qualified deferred compensation plan whereby certain key employees, physicians and executives may defer a portion of their compensation. Participants earn a return on their deferred compensation based on their allocation of their account balance among mutual funds. Participants are able to elect the payment of benefits on a specified date or upon retirement. Distributions are made in the form of lump sum or in installments elected by the participant. As of December 31, 2014 and 2013, liabilities of the Company to the plan participants total approximately $4.8 million and $3.1 million, respectively. Of those amounts, approximately $0.2 million and $0.5 million, respectively are recorded in other current liabilities and approximately $4.6 million and $2.6 million, respectively are recorded in other long-term liabilities. Investments in company-owned life insurance policies were made with the intention of utilizing them as a long-term funding source for the deferred compensation plan. The policies are recorded at their net cash surrender values. As of December 31, 2014 and 2013, the net cash surrender values of the COLI total approximately $4.3 million and $3.0 million respectively. Of those amounts approximately $0.2 million and $0.5 million, respectively are recorded in other current assets and approximately $4.1 million and $2.5 million, respectively are recorded to other noncurrent assets.

In connection with the Company's acquisition of SFRO on February 10, 2014, the Company assumed SFRO's qualified, multi-employer, non-contributory, cash balance defined benefit pension plan (the "Cash Balance Plan"). The Cash Balance Plan covers certain employees who meet age, employee classification, and length-of-service requirements. The Cash Balance Plan provides benefits based on years of service and average earnings of the participant. Participants in the Cash Balance Plan are fully vested after three years of service. The Company's funding policy is to contribute amounts to the Cash Balance Plan sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended.

The following table sets forth the changes in projected benefit obligation and fair value of plan assets for the Cash Balance Plan:

As of December 31, 2014, the funded status of the Cash Balance Plan is recorded in other long-term liabilities in the Consolidated Balance Sheets.

The components of net periodic benefit cost for the Cash Balance Plan is as follows:

The following table sets forth the amounts in accumulated other comprehensive loss on the Company's consolidated balance sheets that have not been recognized as components of net periodic pension benefit costs:

The following table sets forth the fair value of total plan assets by major asset category as of the date indicated: All plan assets were valued using the Level 1 methodology, as further described in Note 16.

			Fair Value Measurements at Reporting Date Using

(in thousands):	December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents		85		85		—		—
Bond funds(a)		826		826		—		—
Fixed income funds(a)		938		938		—		—
Equity securities:
Domestic large cap		12		12		—		—
Domestic mid cap		95		95		—		—
Domestic small cap		53		53		—		—
Foreign large cap		44		44		—		—
Mutual funds:
Specialty		239		239		—		—
Domestic large cap		2,483		2,483		—		—
Foreign large cap		140		140		—		—
Foreign mid cap		50		50		—		—
Foreign real estate		167		167		—		—

Total	$	5,132	$	5,132	$	—	$	—

The Company invests plan assets based on a total return on investment approach, pursuant to which the plan assets include a blend of equity and fixed income investments toward a goal of maximizing the long-term rate of return without assuming an unreasonable level of investment risk. The Company determines the level of risk based on an analysis of plan liabilities, the extent to which the value of the plan assets satisfies the plan liabilities and the Company's financial condition. The Company's investment policy includes target allocations ranging from 40% to 80% for equity investments, 20% to 60% for fixed income investments and 0% to 10% for cash equivalents. Actual asset allocations may vary from the targeted allocations for various reasons, including market conditions and the timing of transactions. The equity portion of the plan assets represents growth and value stocks of small, medium and large companies. We measure and monitor the investment risk of the plan assets both on a quarterly basis and annually when we assess plan liabilities.

In developing the expected long-term rate of return on assets, management evaluated input from an external consulting firm, including their projection of asset class return expectations and long-term inflation assumptions. The Company also considered historical returns on the plans' assets. Discount rates are based on yields available on high-quality corporate bonds that would generate cash flows necessary to pay the benefits when due.

The weighted average assumptions used to determine net periodic pension benefit cost are as follows:

The following table sets forth the benefit payments that the Company expects to pay from the Cash Balance Plan (in thousands):

The Company expects to contribute approximately $1.7 million to the Cash Balance Plan in 2015.

Effective as of June 11, 2012, 21CI entered into the Third Amended and Restated Limited Liability Company Agreement (the "Amended LLC Agreement"). The Amended LLC Agreement provided for the cancellation of 21CI's existing Class B and Class C incentive equity units as well as established new classes of equity units (such new units, the "2012 Plan") in 21CI in the form of Class MEP Units, Class EMEP Units, Class L Units and Class G Units for issuance to employees, officers, directors and other service providers, establishes new distribution entitlements related thereto, and

modifies the distribution entitlements for holders of Preferred units and Class A Units of 21CI. In addition to the Preferred Units and Class A Units of 21CI, the Amended LLC Agreement authorized for issuance under the 2012 Plan 1,100,200 units of limited liability company interests consisting of 1,000,000 Class MEP Units, 100,000 Class EMEP Units, 100 Class L Units, and 100 Class G Units. As of December 31, 2014, there were 274,634 Class MEP Units available for future issuance under the 2012 Plan. The Amended LLC Agreement also provides that any forfeited or repurchased Class EMEP Units may be reallocated by Dr. Daniel Dosoretz, in his sole discretion, for so long as he is Chief Executive Officer of the Company. The Amended LLC Agreement provided for the cancellation of 21CI's existing Class B and Class C incentive equity units.

Generally, for Class MEP units awarded, 66.6% vest upon issuance, while the remaining 33.4% vest on the 18 month anniversary of the issuance date. There are no performance conditions for the MEP units to vest. For newly hired individuals after January 1, 2012, vesting occurs at 33.3% in years one and two, and 33.4% in year three of the individual's hire date. In the event of a sale or public offering of the Company prior to termination of employment, all unvested Class MEP units would vest upon consummation of the transaction. The MEP units are eligible to receive distributions only upon a return of all capital invested in 21CI, plus the amounts to which the Class EMEP Units, are entitled to receive under the Amended LLC Agreements; which effectively creates a market condition that is reflected in the value of the Class MEP units.

Vesting of the Class EMEP units is dependent upon achievement of an implied equity value target. The right to receive proceeds from vested units is dependent upon the occurrence of a qualified sale or liquidation event. Specifically, the percentage of EMEP units that vest is based on the implied value of the Company's equity, to be measured quarterly beginning December 31, 2012. An allocated portion of the awards will be eligible for vesting if the "implied equity value" exceeds a predetermined threshold, with the remaining incremental portion eligible if the implied value exceeds several higher thresholds for at least two consecutive quarters. The implied equity value per the Amended LLC Agreement is a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization) as defined in the Amended LLC Agreement. As with the MEP units, the values of the EMEP units are subject to a market condition in the form of the return on investment target for Vestar's interest. The Class EMEP Units were eliminated under the Fourth Amended and Restated Limited Liability Company Agreement (the "Fourth Amended LLC Agreement") in December 2013.

Dr. Dosoretz, CEO of the Company, received Class L Unit awards in addition to Class MEP and Class EMEP Units. The Class L Units rank lower than the Class MEP and EMEP Units in the waterfall distribution, and will not receive distributions until and unless the performance conditions that result in vesting of the EMEP units occurs. The terms of the Class L unit award to Dr. Dosoretz do not have any service or performance conditions. The Class L units vest upon issuance, and the fair value of the units awarded was recognized upon issuance. The Company recorded approximately $1.0 million of stock-based compensation for the issuance of the Class L Units to the CEO in 2012. The Class L Units were eliminated under the Fourth Amended LLC Agreement in December 2013.

For purposes of determining the compensation expense associated with the 2012 equity-based incentive plan grants, management valued the business enterprise using a variety of widely accepted valuation techniques, which considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity. The Company then used the PWERM to determine the fair value of these units at the time of grant. Under the PWERM, the value of the units is estimated based upon an analysis of future values for the enterprise assuming various future outcomes (exits) as well as the rights of each unit class. In developing assumptions for the various exit scenarios, management considered the Company's ability to achieve certain growth and profitability milestone in order to maximize shareholder value at the time of potential exit. Management considers an initial public offering ("IPO") of the Company's stock to be one of the exit scenarios for the current shareholders, although sale or merger/acquisition are possible future exit options as well. For the scenarios the enterprise value at exit was estimated based on a multiple of the Company's EBITDA for the fiscal year preceding the exit date. The enterprise value for the Staying Private Scenario was estimated based on a discounted cash flow analysis as well as guideline company market approach. The guideline companies were publicly-traded companies that were deemed comparable to the Company. The discount rate analysis also leveraged market data of the same guideline companies.

For each PWERM scenario, management estimated probability factors based on the outlook of the Company and the industry as well as prospects for potential exit at the exit date based on information known or knowable as of the grant date. The probability-weighted unit values calculated at each potential exit date was present-valued to the grant date to estimate the per-unit value. The discount rate utilized in the present value calculation was the cost of equity calculated using the Capital Asset Pricing Model and based on the market data of the guideline companies as well as historical data published by Morningstar, Inc. For each PWERM scenario, the per unit values were adjusted for lack of marketability discount to conclude on unit value on a minority, non-marketable basis.

The estimated fair value of the units, less an assumed forfeiture rate of 3.9%, is recognized in expense in the Company's consolidated financial statements over the requisite service period and in accordance with the vesting conditions of the awards for Class MEP Units. For Class MEP Units, the requisite service period is approximately 18 months, and for Class EMEP Units, the requisite service period is 36 months only if met or probable of being met. There was no stock-based compensation cost recorded in the period ended December 31, 2013 and 2012 for the Class EMEP Units. The assumed forfeiture rate is based on an average historical forfeiture rate.

2012 and 2013 Plans			Weighted- Average Grant Date Fair Value				Weighted- Average Grant Date Fair Value				Weighted- Average Grant Date Fair Value				Weighted- Average Grant Date Fair Value

Nonvested balance at end of period
December 31, 2011	—		$	—	90,743		$	38.94	—		$	—	—		$	—
Units granted	915,458			3.32	—			—	—			—	—			—
Units forfeited	—			—	—			—	—			—	—			—
Units vested	(566,102	)		3.32	—			—	—			—	—			—
Units cancelled	—			—	—			—	—			—	—			—

Nonvested balance at end of period
December 31, 2012	349,356		$	3.32	90,743		$	38.94	—		$	—	—		$	—
Units granted	40,909			0.26	—			—	100,000			58.37	100,000			0.47
Units forfeited	(45,546	)		3.32	(14,815	)		38.94	—			—	—			—
Units vested	(271,095	)		3.15	—			—	—			—	—			—
Units cancelled	—			—	(75,928	)		38.94	—			—	—			—

Nonvested balance at end of period
December 31, 2013	73,624		$	2.24	—		$	—	100,000		$	58.37	100,000		$	0.47
Units granted	—			—	—			—	—			—	—			—
Units forfeited	(19,375	)		3.32	—			—	(33,500	)		58.37	(27,194	)		0.47
Units vested	(33,638	)		2.65	—			—	—			—	—			—

Nonvested balance at end of period
December 31, 2014	20,611		$	0.55	—		$	—	66,500		$	58.37	72,806		$	0.47

As of December 31, 2014, there was approximately $0.1 million of total unrecognized compensation expense related to the MEP Units. These costs are expected to be recognized over a weighted-average period of 1.29 years for MEP Units. As of December 31, 2014, there was approximately $2.7 million, and $33,000 of total unrecognized compensation expense related to the M Units, and O Units, respectively. The Class M Units and O Units compensation will be recognized upon the sale of the Company or an initial public offering. Under the terms of the incentive unit grant agreements governing the grants of the Class M Units and Class O Units, in the event of an initial public offering of the Company's common stock, holders have certain rights to receive shares of restricted common stock of the Company in exchange for their Class M Units and Class O Units.

As of December 31, 2014, there was approximately $7.1 million total unrecognized compensation expense related to the Executive Bonus Plan. The Executive Bonus Plan compensation will be recognized upon the sale of the Company or an initial public offering.

On December 9, 2013, 21CI entered into a Fourth Amended and Restated Limited Liability Company Agreement (the "Fourth Amended LLC Agreement") which replaced the Third Amended LLC Agreement in its entirety. The Fourth Amended LLC Agreement established new classes of incentive equity units in 21CI in the form of Class M Units, Class N Units and Class O Units for issuance to employees, officers, directors and other service providers, eliminated 21CI's Class L Units and Class EMEP Units, and modified the distribution entitlements for holders of each existing class of equity units of 21CI.

The Company recorded $0.1 million, $0.6 million, and $3.3 million of stock-based compensation expense related to all plans for the years ended December 31, 2014, 2013, and 2012, respectively, which is included in salaries and benefits in the consolidated statements of operations and comprehensive loss.

In December, 2013, 10 class N units were granted to an employee. 50% of the Class N Units vest upon the sale of the Company or an initial public offering. The remaining 50% is amortized over five years subsequent to an initial public offering. As of December 31, 2014, there was approximately $6,000 of total unrecognized compensation expense related to the Class N Units.

In May, 2014, 10 class G units were granted to an employee. 100% of the Class G Units vest upon the sale of the Company or an initial public offering. As of December 31, 2014, there was approximately $1.5 million of total unrecognized compensation expense related to the Class G Units.

The Company leases certain of its treatment centers and other properties from partnerships, which are majority owned by related parties. The leases are classified in the accompanying consolidated financial statements as either operating leases or as finance obligations pursuant to ASC 840, Leases. These related-party leases have expiration dates through December 31, 2028, and they provide for annual payments and executory costs, ranging from approximately $58,000 to $1.8 million. The aggregate payments the Company made to the entities owned by these related parties were approximately $20.0 million, $18.7 million, and $17.7 million, for the years ended December 31, 2014, 2013, and 2012, respectively.

In October 1999, the Company entered into a sublease arrangement with a partnership, which is owned by related parties to lease space to the partnership for an MRI center in Mount Kisco, New York. Sublease rentals paid by the partnership to the landlord were approximately $755,000 for the year ended December 31, 2012. In December 2012, the related parties sold their interest in the partnership.

The Company is a participating provider in an oncology network, which is partially owned by a related party. The Company provides oncology services to members of the network. Annual payments received by the Company for the services were approximately $1.3 million, $1.5 million, and $1.3 million for the years ended December 31, 2014, 2013, and 2012, respectively. Amounts due to the Company for these services were approximately $0.3 million and $0.2 million at December 31, 2014 and 2013, respectively.

The Company has a wholly owned subsidiary construction company that provides remodeling and real property improvements at certain of its facilities. In addition, the construction company is frequently engaged to build and construct facilities for lease that are owned by related parties. Payments received by the Company for building and construction fees were approximately $1.3 million, $4.6 million, and $1.7 million, for the years ended December 31, 2014, 2013, and 2012, respectively. Amounts due to the Company for the construction services were approximately $0.2 million and $0.6 million at December 31, 2014 and 2013, respectively.

The Company purchases medical malpractice insurance from an insurance company owned by a related party. The period of coverage runs from November to October. The premium payments made by the Company were approximately $8.9 million, $4.1 million, and $3.9 million, for the years ended December 31, 2014, 2013, and 2012, respectively.

In California, Delaware, Maryland, Massachusetts, Michigan, Nevada, New York, and North Carolina, the Company maintains administrative services agreements with professional corporations owned by related parties, who are licensed to practice medicine in such states. The Company entered into these administrative services agreements in order to comply with the laws of such states, which prohibit the Company from employing physicians. The administrative services agreements generally obligate the Company to provide treatment center facilities, staff, equipment, accounting services, billing and collection services, management and administrative personnel, assistance in managed care contracting, and assistance in marketing services. Fees paid to the Company by such professional corporations under the administrative services agreements were approximately $73.2 million, $66.0 million, and $58.8 million, for the years ended December 31, 2014, 2013, and 2012, respectively. These amounts have been eliminated in consolidation.

On February 22, 2008, the Company entered into a management agreement with Vestar Capital Partners V, L.P. (Vestar) relating to certain advisory and consulting services for an annual fee equal to the greater of (i) $850,000 or (ii) an amount equal to 1.0% of the Company's consolidated earnings

before interest, taxes, depreciation, and amortization for each fiscal year determined as set forth in the Senior Credit Facility. As part of the management agreement, the Company agreed to indemnify Vestar and its affiliates from and against all losses, claims, damages, and liabilities arising out of the performance by Vestar of its services pursuant to the management agreement. The management agreement will terminate upon such time that Vestar and its partners and their respective affiliates hold, directly, or indirectly in the aggregate, less than 20% of the voting power of the outstanding voting stock of the Company. During the years ended December 31, 2014, 2013, and 2012, the Company incurred approximately $1.3 million, $1.3 million, and $1.2 million, respectively, of management fees and expenses under such agreement.

The Company operates in one line of business, which is operating physician group practices. The Company's operations are organized into two geographically organized groups: the U.S. Domestic operating segment and the International operating segment, which are also the reporting segments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Transactions between reporting segments are properly eliminated. The Company assesses performance of and makes decisions on how to allocate resources to its operating segments based on multiple factors including current and projected facility gross profit and market opportunities. Facility gross profit is defined as total revenues less cost of revenues.

	Year Ended December 31,

	2014		2013		2012
	Restated		Restated		Restated
Total revenues:
U.S. Domestic	$	926,960	$	646,599	$	613,756
International		91,222		82,324		79,324

Total	$	1,018,182	$	728,923	$	693,080



Facility gross profit:
U.S. Domestic	$	248,868	$	159,714	$	167,654
International		46,900		41,014		41,682

Total	$	295,768	$	200,728	$	209,336



Depreciation and amortization:
U.S. Domestic	$	81,444	$	60,563	$	61,055
International		5,139		4,533		3,759

Total	$	86,583	$	65,096	$	64,814



Capital expenditures:*
U.S. Domestic	$	61,243	$	38,626	$	32,660
International		16,090		5,079		5,260

Total	$	77,333	$	43,705	$	37,920

Total revenues attributable to the Company's operations in Argentina were $68.7 million, $64.0 million and $60.2 million for the years ended December 31, 2014, 2013, and 2012, respectively. Property and equipment attributable to the Company's operations in Argentina was $12.5 million and $7.6 million as of December 31, 2014 and 2013, respectively.

The reconciliation of the Company's reportable segment profit and loss is as follows (in thousands):

	Years ended December 31,

	2014			2013			2012
	Restated			Restated			Restated
Facility gross profit	$	295,768		$	200,728		$	209,336
Less:
General and administrative expenses		135,819			107,395			83,314
General and administrative salaries		114,064			89,655			78,813
General and administrative depreciation and amortization		17,299			12,432			15,292
Provision for doubtful accounts		19,253			12,146			16,916
Interest expense, net		113,279			86,747			77,494
Impairment loss		229,526			—			81,021
Early extinguishment of debt		8,558			—			4,473
Equity IPO expenses		4,905			—			—
Fair value adjustment of earn-out liability		1,627			130			1,219
Fair value adjustment of embedded derivative		837			—			—
Loss on sale leaseback transaction		135			313			—
Gain on the sale of an interest in a joint venture		—			(1,460	)		—
Loss on the sale/disposal of property and equipment		119			336			748
Foreign currency transaction loss		678			1,138			241
(Gain) loss on foreign currency derivative contracts		(4	)		467			1,165

Loss before income taxes and equity in net loss of joint ventures	$	(350,327	)	$	(108,571	)	$	(151,360	)

The quarterly interim financial information shown below has been prepared by the Company's management and is unaudited. It should be read in conjunction with the audited consolidated financial statements appearing herein. The following tables present the Consolidated Balance Sheet data for each quarter end in 2014 (in thousands), including adjustments consistent with Note 2:

	September 30, 2014

	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	160,721		$	(230	)	$	160,491
Restricted cash		7,239			230			7,469
Accounts receivable, net		139,316			(10,699	)		128,617
Prepaid expenses		8,516			—			8,516
Inventories		4,596			(1,484	)		3,112
Income taxes receivable		—			3,944			3,944
Deferred income taxes		108			3,557			3,665
Other		8,337			298			8,635

Total current assets		328,833			(4,384	)		324,449
Equity investments in joint ventures		1,596			—			1,596
Property and equipment, net		274,655			(1,325	)		273,330
Real estate subject to finance obligation		17,743			—			17,743
Goodwill		442,293			6,984			449,277
Intangible assets, net		83,727			(322	)		83,405
Other assets		35,468			12,674			48,142

Total assets	$	1,184,315		$	13,627		$	1,197,942



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	86,133		$	5,200		$	91,333
Accrued expenses		97,459			4,581			102,040
Income taxes payable		730			(241	)		489
Current portion of long-term debt		25,950			—			25,950
Current portion of finance obligation		361			—			361
Other current liabilities		12,018			(855	)		11,163

Total current liabilities		222,651			8,685			231,336
Long-term debt, less current portion		942,963			—			942,963
Finance obligation, less current portion		18,468			—			18,468
Embedded derivative features of Series A convertible redeemable preferred stock		15,006			—			15,006
Other long-term liabilities		45,505			21,687			67,192
Deferred income taxes		4,609			2,527			7,136

Total liabilities		1,249,202			32,899			1,282,101
Series A convertible redeemable preferred stock		304,271			—			304,271
Noncontrolling interests—redeemable		45,987			(30,302	)		15,685
Commitments and contingencies
Equity:
Common stock		—			—			—
Additional paid-in capital		649,993			—			649,993
Retained deficit		(1,043,319	)		(19,788	)		(1,063,107	)
Accumulated other comprehensive loss, net of tax		(37,901	)		1,490			(36,411	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(431,227	)		(18,298	)		(449,525	)
Noncontrolling interests—nonredeemable		16,082			29,328			45,410

Total deficit		(415,145	)		11,030			(404,115	)

Total liabilities and equity	$	1,184,315		$	13,627		$	1,197,942

	June 30, 2014									March 31, 2014

	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	25,682		$	(232	)	$	25,450		$	12,286		$	(312	)	$	11,974
Restricted cash		14,760			232			14,992			14,080			312			14,392
Accounts receivable, net		144,325			(9,684	)		134,641			143,469			(9,486	)		133,983
Prepaid expenses		7,319			—			7,319			8,995			—			8,995
Inventories		4,841			(1,517	)		3,324			4,973			(1,620	)		3,353
Income taxes receivable		—			3,739			3,739			—			3,003			3,003
Deferred income taxes		46			3,557			3,603			184			3,557			3,741
Other		7,617			407			8,024			13,282			(509	)		12,773

Total current assets		204,590			(3,498	)		201,092			197,269			(5,055	)		192,214
Equity investments in joint ventures		2,925			—			2,925			2,769			—			2,769
Property and equipment, net		275,297			(1,243	)		274,054			275,170			(1,179	)		273,991
Real estate subject to finance obligation		16,476			—			16,476			15,175			—			15,175
Goodwill		486,536			7,172			493,708			675,348			7,319			682,667
Intangible assets, net		87,451			(312	)		87,139			91,141			(298	)		90,843
Other assets		38,192			12,221			50,413			39,732			12,208			51,940

Total assets	$	1,111,467		$	14,340		$	1,125,807		$	1,296,604		$	12,995		$	1,309,599



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	83,153		$	5,742		$	88,895		$	72,083		$	3,800		$	75,883
Accrued expenses		84,130			4,567			88,697			90,925			3,401			94,326
Income taxes payable		180			85			265			2,183			(154	)		2,029
Current portion of long-term debt		38,180			—			38,180			31,172			—			31,172
Current portion of finance obligation		278			—			278			255			—			255
Other current liabilities		18,880			(732	)		18,148			19,364			(1,663	)		17,701

Total current liabilities		224,801			9,662			234,463			215,982			5,384			221,366
Long-term debt, less current portion		1,097,473			—			1,097,473			1,087,479			—			1,087,479
Finance obligation, less current portion		17,246			—			17,246			15,915			—			15,915
Embedded derivative features of Series A convertible redeemable preferred stock		—			—			—			—			—			—
Other long-term liabilities		45,549			21,054			66,603			44,503			20,812			65,315
Deferred income taxes		4,790			2,506			7,296			4,611			2,840			7,451

Total liabilities		1,389,859			33,222			1,423,081			1,368,490			29,036			1,397,526
Noncontrolling interests—redeemable		46,652			(30,652	)		16,000			44,952			(28,979	)		15,973
Commitments and contingencies
Equity:
Common stock		—			—			—			—			—			—
Additional paid-in capital		651,034			—			651,034			650,999			—			650,999
Retained deficit		(955,942	)		(19,282	)		(975,224	)		(748,419	)		(16,568	)		(764,987	)
Accumulated other comprehensive loss, net of tax		(36,128	)		1,301			(34,827	)		(35,430	)		1,311			(34,119	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(341,036	)		(17,981	)		(359,017	)		(132,850	)		(15,257	)		(148,107	)
Noncontrolling interests—nonredeemable		15,992			29,751			45,743			16,012			28,195			44,207

Total deficit		(325,044	)		11,770			(313,274	)		(116,838	)		12,938			(103,900	)

Total liabilities and equity	$	1,111,467		$	14,340		$	1,125,807		$	1,296,604		$	12,995		$	1,309,599

The following tables present Consolidated Statements of Operations and Comprehensive Loss for each quarter in 2014 (in thousands), including adjustments consistent with Note 2:

	Three Months Ended September 30, 2014

(in thousands):	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Net patient service revenue	$	238,403		$	(1,822	)	$	236,581
Management fees		16,762			—			16,762
Other revenue		2,453			223			2,676

Total revenues		257,618			(1,599	)		256,019
Expenses:
Salaries and benefits		134,599			—			134,599
Medical supplies		24,771			—			24,771
Facility rent expenses		14,867			—			14,867
Other operating expenses		15,558			—			15,558
General and administrative expenses		37,811			108			37,919
Depreciation and amortization		22,388			(30	)		22,358
Provision for doubtful accounts		5,621			—			5,621
Interest expense, net		30,233			—			30,233
Impairment loss		47,526			—			47,526
Early extinguishment of debt		8,558			—			8,558
Equity initial public offering expenses		742			(742	)		—
Fair value adjustment of earn-out liabilities		209			—			209
Loss on the sale/disposal of property and equipment		—			197			197
Loss on foreign currency transactions		210			14			224

Total expenses		343,093			(453	)		342,640

Loss before income taxes and equity interest loss in joint ventures		(85,475	)		(1,146	)		(86,621	)
Income tax expense (benefit)		1,173			(645	)		528

Loss before equity in net loss of joint ventures		(86,648	)		(501	)		(87,149	)
Equity in net loss of joint ventures		—			(26	)		(26	)

Net loss		(86,648	)		(527	)		(87,175	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(729	)		21			(708	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(87,377	)		(506	)		(87,883	)
Other comprehensive loss:
Unrealized loss on foreign currency translation		(1,990	)		137			(1,853	)

Other comprehensive loss		(1,990	)		137			(1,853	)

Comprehensive loss:		(88,638	)		(390	)		(89,028	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(512	)		73			(439	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(89,150	)	$	(317	)	$	(89,467	)

	Three Months Ended June 30, 2014									Three Months Ended March 31, 2014

(in thousands):	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Net patient service revenue	$	245,950		$	(2,801	)	$	243,149		$	213,908		$	(1,112	)	$	212,796
Management fees		16,856			—			16,856			16,597			—			16,597
Other revenue		3,092			141			3,233			2,892			53			2,945

Total revenues		265,898			(2,660	)		263,238			233,397			(1,059	)		232,338
Expenses:
Salaries and benefits		135,803			—			135,803			125,909			—			125,909
Medical supplies		24,502			—			24,502			21,734			—			21,734
Facility rent expenses		17,167			—			17,167			15,495			—			15,495
Other operating expenses		16,096			—			16,096			14,381			—			14,381
General and administrative expenses		34,060			100			34,160			30,114			76			30,190
Depreciation and amortization		22,162			(28	)		22,134			20,722			(28	)		20,694
Provision for doubtful accounts		3,428			—			3,428			4,296			—			4,296
Interest expense, net		29,899			—			29,899			27,527			—			27,527
Impairment loss		182,000			—			182,000			—			—			—
Equity initial public offering expenses		4,163			742			4,905			—			—			—
Loss on sale leaseback transaction		—			—			—			135			—			135
Fair value adjustment of earn-out liabilities		204			—			204			199			—			199
Loss on the sale/disposal of property and equipment		—			44			44			—			15			15
Loss on foreign currency transactions		79			(17	)		62			28			(20	)		8
(Gain) loss on foreign currency derivative contracts		—			—			—			(4	)		—			(4	)

Total expenses		469,563			841			470,404			260,536			43			260,579

Loss before income taxes and equity interest loss in joint ventures		(203,665	)		(3,501	)		(207,166	)		(27,139	)		(1,102	)		(28,241	)
Income tax expense (benefit)		934			(839	)		95			2,106			(488	)		1,618

Loss before equity in net loss of joint ventures		(204,599	)		(2,662	)		(207,261	)		(29,245	)		(614	)		(29,859	)
Equity in net loss of joint ventures		—			(97	)		(97	)		—			(38	)		(38	)

Net loss		(204,599	)		(2,759	)		(207,358	)		(29,245	)		(652	)		(29,897	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(2,925	)		45			(2,880	)		(936	)		4			(932	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(207,524	)		(2,714	)		(210,238	)		(30,181	)		(648	)		(30,829	)
Other comprehensive loss:
Unrealized loss on foreign currency translation		(750	)		(81	)		(831	)		(9,856	)		994			(8,862	)

Other comprehensive loss		(750	)		(81	)		(831	)		(9,856	)		994			(8,862	)

Comprehensive loss:		(205,349	)		(2,840	)		(208,189	)		(39,101	)		342			(38,759	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(2,873	)		116			(2,757	)		(117	)		30			(87	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(208,222	)	$	(2,724	)	$	(210,946	)	$	(39,218	)	$	372		$	(38,846	)

The following tables present the Consolidated Balance Sheet data for each quarter end in 2013 (in thousands), including adjustments consistent with Note 2:

	September 30, 2013

	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	32,469		$	(347	)	$	32,122
Restricted cash		5,002			347			5,349
Accounts receivable, net		97,337			(11,273	)		86,064
Prepaid expenses		7,898			—			7,898
Inventories		4,647			(1,627	)		3,020
Income taxes receivable		—			1,299			1,299
Deferred income taxes		981			1,060			2,041
Other		8,445			1,868			10,313

Total current assets		156,779			(8,673	)		148,106
Equity investments in joint ventures		684			—			684
Property and equipment, net		217,575			(1,206	)		216,369
Real estate subject to finance obligation		20,704			—			20,704
Goodwill		503,908			2,237			506,145
Intangible assets, net		30,816			(273	)		30,543
Other assets		38,097			9,442			47,539

Total assets	$	968,563		$	1,527		$	970,090



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	38,030		$	2,600		$	40,630
Accrued expenses		63,974			356			64,330
Income taxes payable		2,769			(1,584	)		1,185
Current portion of long-term debt		12,333			—			12,333
Current portion of finance obligation		298			—			298
Other current liabilities		5,014			421			5,435

Total current liabilities		122,418			1,793			124,211
Long-term debt, less current portion		837,810			—			837,810
Finance obligation, less current portion		22,089			—			22,089
Other long-term liabilities		25,007			14,141			39,148
Deferred income taxes		5,055			209			5,264

Total liabilities		1,012,379			16,143			1,028,522
Noncontrolling interests—redeemable		15,933			—			15,933
Commitments and contingencies
Equity:
Common stock		—			—			—
Additional paid-in capital		650,680			—			650,680
Retained deficit		(703,312	)		(13,071	)		(716,383	)
Accumulated other comprehensive loss, net of tax		(20,432	)		(624	)		(21,056	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(73,064	)		(13,695	)		(86,759	)
Noncontrolling interests—nonredeemable		13,315			(921	)		12,394

Total deficit		(59,749	)		(14,616	)		(74,365	)

Total liabilities and equity	$	968,563		$	1,527		$	970,090

	June 30, 2013									March 31, 2013

	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	11,759		$	(426	)	$	11,333		$	10,727		$	(334	)	$	10,393
Restricted cash		5,001			426			5,427			—			334			334
Accounts receivable, net		90,869			(9,853	)		81,016			97,852			(9,262	)		88,590
Prepaid expenses		7,383			—			7,383			7,549			—			7,549
Inventories		4,365			(1,537	)		2,828			4,055			(1,499	)		2,556
Income taxes receivable		—			1,003			1,003			—			484			484
Deferred income taxes		810			1,063			1,873			703			1,060			1,763
Other		5,834			847			6,681			8,550			(639	)		7,911

Total current assets		126,021			(8,477	)		117,544			129,436			(9,856	)		119,580
Equity investments in joint ventures		781			—			781			666			—			666
Property and equipment, net		224,714			(1,373	)		223,341			217,760			(1,158	)		216,602
Real estate subject to finance obligation		20,465			—			20,465			19,350			—			19,350
Goodwill		504,302			2,715			507,017			484,996			3,190			488,186
Intangible assets, net		33,797			(245	)		33,552			32,432			(203	)		32,229
Other assets		40,695			9,413			50,108			41,709			9,382			51,091

Total assets	$	950,775		$	2,033		$	952,808		$	926,349		$	1,355		$	927,704



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	35,261		$	1,500		$	36,761		$	33,064		$	1,700		$	34,764
Accrued expenses		50,883			252			51,135			62,123			48			62,171
Income taxes payable		2,327			(1,146	)		1,181			2,923			(1,308	)		1,615
Current portion of long-term debt		12,907			—			12,907			10,502			—			10,502
Current portion of finance obligation		283			—			283			279			—			279
Other current liabilities		8,625			(628	)		7,997			10,293			(2,006	)		8,287

Total current liabilities		110,286			(22	)		110,264			119,184			(1,566	)		117,618
Long-term debt, less current portion		799,028			—			799,028			749,792			—			749,792
Finance obligation, less current portion		21,839			—			21,839			20,429			—			20,429
Other long-term liabilities		23,950			13,784			37,734			22,646			13,676			36,322
Deferred income taxes		5,593			424			6,017			5,987			443			6,430

Total liabilities		960,696			14,186			974,882			918,038			12,553			930,591
Noncontrolling interests—redeemable		16,350			—			16,350			11,379			—			11,379
Commitments and contingencies
Equity:
Common stock		—			—			—			—			—			—
Additional paid-in capital		652,252			—			652,252			652,098			—			652,098
Retained deficit		(677,903	)		(10,641	)		(688,544	)		(657,764	)		(9,946	)		(667,710	)
Accumulated other comprehensive loss, net of tax		(16,526	)		(743	)		(17,269	)		(13,478	)		(645	)		(14,123	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(42,177	)		(11,384	)		(53,561	)		(19,144	)		(10,591	)		(29,735	)
Noncontrolling interests—nonredeemable		15,906			(769	)		15,137			16,076			(607	)		15,469

Total deficit		(26,271	)		(12,153	)		(38,424	)		(3,068	)		(11,198	)		(14,266	)

Total liabilities and equity	$	950,775		$	2,033		$	952,808		$	926,349		$	1,355		$	927,704

The following tables present Consolidated Statements of Operations and Comprehensive Loss for each quarter in 2013 (in thousands), including adjustments consistent with Note 2:

	Three Months Ended September 30, 2013

(in thousands):	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Net patient service revenue	$	178,655		$	(3,547	)	$	175,108
Other revenue		2,385			229			2,614

Total revenues		181,040			(3,318	)		177,722
Expenses:
Salaries and benefits		98,032			—			98,032
Medical supplies		15,917			—			15,917
Facility rent expenses		11,427			—			11,427
Other operating expenses		11,882			—			11,882
General and administrative expenses		24,936			270			25,206
Depreciation and amortization		16,059			(27	)		16,032
Provision for doubtful accounts		3,767			—			3,767
Interest expense, net		21,952			—			21,952
Loss on the sale/disposal of property and equipment		—			136			136
Loss on foreign currency transactions		364			(49	)		315
Loss on foreign currency derivative contracts		67			—			67

Total expenses		204,403			330			204,733

Loss before income taxes and equity interest loss in joint ventures		(23,363	)		(3,648	)		(27,011	)
Income tax expense (benefit)		1,699			(1,261	)		438

Loss before equity in net loss of joint ventures		(25,062	)		(2,387	)		(27,449	)
Equity in net loss of joint ventures		—			(93	)		(93	)

Net loss		(25,062	)		(2,480	)		(27,542	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(347	)		51			(296	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(25,409	)		(2,429	)		(27,838	)
Other comprehensive loss:
Unrealized loss on foreign currency translation		(4,228	)		18			(4,210	)

Other comprehensive loss		(4,228	)		18			(4,210	)

Comprehensive loss:		(29,290	)		(2,462	)		(31,752	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(25	)		152			127

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(29,315	)	$	(2,310	)	$	(31,625	)

	Three Months Ended June 30, 2013									Three Months Ended March 31, 2013

(in thousands):	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Net patient service revenue	$	175,847		$	(1,175	)	$	174,672		$	171,973		$	(2,061	)	$	169,912
Other revenue		2,262			218			2,480			2,004			190			2,194

Total revenues		178,109			(957	)		177,152			173,977			(1,871	)		172,106
Expenses:
Salaries and benefits		99,687			—			99,687			96,253			—			96,253
Medical supplies		14,407			—			14,407			15,842			—			15,842
Facility rent expenses		10,675			—			10,675			10,183			—			10,183
Other operating expenses		10,997			—			10,997			10,276			—			10,276
General and administrative expenses		23,161			187			23,348			20,735			183			20,918
Depreciation and amortization		15,320			(23	)		15,297			15,171			(21	)		15,150
Provision for doubtful accounts		2,015			—			2,015			3,075			—			3,075
Interest expense, net		20,473			—			20,473			19,944			—			19,944
Gain on the sale of an interest in a joint venture		(1,460	)		—			(1,460	)		—			—			—
Loss on the sale/disposal of property and equipment		—			10			10			—			66			66
Loss on foreign currency transactions		758			(54	)		704			44			(35	)		9
Loss on foreign currency derivative contracts		190			—			190			52			—			52

Total expenses		196,223			120			196,343			191,575			193			191,768

Loss before income taxes and equity interest loss in joint ventures		(18,114	)		(1,077	)		(19,191	)		(17,598	)		(2,064	)		(19,662	)
Income tax expense (benefit)		1,371			(598	)		773			1,779			(529	)		1,250

Loss before equity in net loss of joint ventures		(19,485	)		(479	)		(19,964	)		(19,377	)		(1,535	)		(20,912	)
Equity in net loss of joint ventures		—			(208	)		(208	)		—			(124	)		(124	)

Net loss		(19,485	)		(687	)		(20,172	)		(19,377	)		(1,659	)		(21,036	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(654	)		(8	)		(662	)		(364	)		51			(313	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(20,139	)		(695	)		(20,834	)		(19,741	)		(1,608	)		(21,349	)
Other comprehensive loss:
Unrealized loss on foreign currency translation		(3,408	)		(268	)		(3,676	)		(2,181	)		(439	)		(2,620	)

Other comprehensive loss		(3,408	)		(268	)		(3,676	)		(2,181	)		(439	)		(2,620	)

Comprehensive loss:		(22,893	)		(955	)		(23,848	)		(21,558	)		(2,098	)		(23,656	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(294	)		162			(132	)		(197	)		205			8

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(23,187	)	$	(793	)	$	(23,980	)	$	(21,755	)	$	(1,893	)	$	(23,648	)

On January 1, 2016, the Company contributed its Greenville, North Carolina treatment center operations into a newly formed joint venture ("Newco"). Simultaneously, a local hospital system contributed its Greenville, North Carolina treatment center operations into Newco and purchased

additional ownership interests from the Company for approximately $6.2 million. As a result of the transaction, the Company owns 50% of Newco. In addition, The Company determined it does not control Newco as of January 1, 2016 and deconsolidated the operations of its Greenville, North Carolina treatment center as of the transaction date.

On November 13, 2015, the Company was advised by the FBI that patient information was illegally obtained by an unauthorized third party who may have gained access to a Company database.

On March 9, 2016, 21C entered into a settlement (the "Gamma Settlement") with the federal government to resolve the Gamma investigation. 21C has agreed to pay a settlement amount of $34.7 million as part of the Gamma settlement. 21C fully cooperated with the federal government and has entered into the Gamma Settlement with no admission of wrongdoing. There was no indication that patient harm was a component of the dispute and the Company is not aware of harm to any patient related to this dispute. In connection with the Gamma Settlement, we entered into a letter agreement with the OIG to expand the Corporate Integrity Agreement ("CIA"). Pursuant to the letter agreement, we agreed to develop and implement a training plan regarding the Gamma function and to engage an independent review organization to conduct an annual review of certain claims.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on August 23, 2016.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the date indicated.

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

No annual report to security holders covering the registrant's last fiscal year and no proxy material have been sent to security holders with respect to any annual or other meeting of security holders.

Exhibit Number			Description

	2.1		Membership Interest Purchase Agreement, dated January 1, 2009, among Radiation Therapy Services International, Inc., Medical Developers, LLC, Lisdey, S.A., Alejandro Dosoretz and Bernardo Dosoretz, for the purchase of membership interests in Medical Developers, LLC, incorporated herein by reference to Exhibit 2.1 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.*
	2.2		Investment Agreement, dated as of June 22, 2013, among Radiation Therapy Services, Inc. and OnCure Holdings, Inc., incorporated herein by reference to Exhibit 2.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on June 26, 2013.*
	2.3		Securities Purchase Agreement, dated as of February 10, 2014, by and among 21C East Florida, LLC, Kishore Dass, M.D., Ben Han, M.D., Rajiv Patel, SFRO Holdings, LLC and, solely for purposes of Sections 1.3, 1.4 and 5.2(c) thereof, 21^st Century Oncology, Inc., incorporated herein by reference to Exhibit 2.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on February 11, 2014.*
	3.1		Amended and Restated Articles of Incorporation of 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), incorporated herein by reference to Exhibit 3.1 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	3.2		Articles of Amendment to the Articles of Incorporation of 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), incorporated herein by reference to Exhibit 3.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.
	3.3		Bylaws of 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), incorporated herein by reference to Exhibit 3.2 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	3.4		Certificate of Incorporation of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.3 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	3.5		Certificate of Amendment of the Certificate of Incorporation of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.4 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K, filed on March 11, 2011.
	3.6		Certificate of Amendment of the Certificate of Incorporation of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.
	3.7		Certificate of Amendment of the Certificate of Incorporation of 21^st Century Oncology Holdings, Inc., incorporated herein by reference to Exhibit 3.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	3.8		Bylaws of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.4 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	4.1		Indenture, dated April 20, 2010, by and among Radiation Therapy Services, Inc., the guarantors named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.2 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.

Exhibit Number			Description

	4.2		Form of 9⁷/8% Senior Subordinated Notes due 2017, incorporated herein by reference to Exhibit 4.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on March 7, 2011.
	4.3		First Supplemental Indenture, dated as of June 24, 2010, by and among Phoenix Management Company, LLC, Carolina Regional Cancer Center, LLC, Atlantic Urology Clinics, LLC, Radiation Therapy Services, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.3 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	4.4		Second Supplemental Indenture, dated as of September 29, 2010, by and among Derm-Rad Investment Company, LLC, 21^st Century Oncology of Pennsylvania, Inc., Gettysburg Radiation, LLC, Carolina Radiation and Cancer Treatment Center, Inc., 21^st Century Oncology of Kentucky, LLC, New England Radiation Therapy Management Services, Inc. and Radiation Therapy School for Radiation Therapy Technology, Inc., Radiation Therapy Services, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.4 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	4.5		Third Supplemental Indenture, dated as of March 1, 2011, by and among Radiation Therapy Services, Inc. each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on March 7, 2011.
	4.6		Fourth Supplemental Indenture, dated as of March 30, 2011, by and among Aurora Technology Development, LLC, Radiation Therapy Services, Inc. each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.7 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on April 1, 2011.
	4.7		Fifth Supplemental Indenture, dated as of September 30, 2011 by and among Radiation Therapy Services, Inc., 21^st Century Oncology Services, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.8 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 8, 2011.
	4.8		Sixth Supplemental Indenture, dated as of January 25, 2012, by and among Radiation Therapy Services, Inc., Goldsboro Radiation Therapy Services, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association., incorporated herein by reference to Exhibit 4.9 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 22, 2012.
	4.9		Seventh Supplemental Indenture, dated as of May 10, 2012, by and among Radiation Therapy Services, Inc., AHLC, LLC, Asheville CC, LLC, Sampson Simulator, LLC and Sampson Accelerator, LLC, each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.3 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on May 15, 2012.
	4.10		Eighth Supplemental Indenture, dated as of August 22, 2013, by and among Radiation Therapy Services, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.3 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on November 14, 2013.
	4.11		Ninth Supplemental Indenture, dated as of October 30, 2013, by and among Radiation Therapy Services, Inc., OnCure Holdings, Inc., its subsidiaries named therein, Southern New England Regional Cancer Center, LLC, Palms West Radiation Therapy, L.L.C., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.4 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on November 14, 2013.

Exhibit Number			Description

	4.12		Tenth Supplemental Indenture, dated as of March 9, 2015, by and among 21^st Century Oncology of Washington, LLC, 21^st Century Oncology, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.12 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	4.13		Indenture, dated as of May 10, 2012, by and among Radiation Therapy Services, Inc., the guarantors named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on May 14, 2012.
	4.14		Form of 8⁷/8% Senior Secured Second Lien Notes due 2017 (included in Exhibit 4.13).
	4.15		First Supplemental Indenture, dated as of October 30, 2013 by and among Radiation Therapy Services, Inc., OnCure Holdings, Inc., its subsidiaries named therein, Southern New England Regional Cancer Center, LLC, Palms West Radiation Therapy, L.L.C., each other then existing guarantor named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.2 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on November 14, 2013.
	4.16		Second Supplemental Indenture, dated as of March 9, 2015, by and among 21^st Century Oncology of Washington, LLC, 21^st Century Oncology, Inc., each other then existing guarantor named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.16 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	4.17		Amended and Restated Indenture, dated as of October 25, 2013, by and among OnCure Holdings, Inc. and its subsidiaries named therein, Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc. and its subsidiaries named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on October 30, 2013.
	4.18		Form of 11³/4% Senior Secured Notes due 2017 (included in Exhibit 4.17).
	4.19		First Supplemental Indenture, dated as of November 19, 2013, by and among Southern New England Regional Cancer Center, LLC, Palms West Radiation Therapy, L.L.C., OnCure Holdings, Inc., each other then existing guarantor named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.19 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	4.20		Second Supplemental Indenture, dated as of March 9, 2015, by and among 21^st Century Oncology of Washington, LLC, OnCure Holdings, Inc., each other then existing guarantor named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.20 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	4.21		Certificate of Designations, dated September 26, 2014, of Series A Convertible Preferred Stock of 21^st Century Oncology Holdings, Inc., incorporated herein by reference to Exhibit 3.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	4.22		Amendment to Certificate of Designations, Powers, Preferences and Rights of Series A Convertible Preferred Stock of 21^st Century Oncology Holdings, Inc., dated November 11, 2014, incorporated herein by reference to Exhibit 3.3 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015.

Exhibit Number			Description

	10.1		Credit Agreement, dated as of May 10, 2012, among Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the lenders party thereto from time to time, Wells Fargo Bank, National Association, as administrative agent and collateral agent and the other parties thereto, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on May 14, 2012.
	10.2		Intercreditor Agreement, dated as of May 10, 2012, among Wells Fargo Bank, National Association Wilmington Trust, National Association and each collateral agent from time to time party thereto, incorporated herein by reference to Exhibit 10.126 to Amendment No. 1 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on June 15, 2012.
	10.3		Amendment Agreement, dated as of August 28, 2013, among Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the subsidiaries identified therein, the lenders signatory thereto and Wells Fargo Bank, National Association as administrative agent and collateral agent, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on August 30, 2013.
	10.4		Supplement No. 1 dated as of October 30, 2013 to the Guaranty and Collateral Agreement, dated as of May 10, 2012, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on November 14, 2013.
	10.5		Supplement No. 2 dated as of October 30, 2013 to the Guaranty and Collateral Agreement, dated as of May 10, 2012, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on November 14, 2013.
	10.6		Credit Agreement, dated as of February 10, 2014, by and among 21C East Florida, LLC, South Florida Radiation Oncology Coconut Creek, LLC, the several lenders and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on February 11, 2014.
	10.7		Guarantee, dated as of February 10, 2014, made by 21^st Century Oncology Holdings, Inc., 21^st Century Oncology, Inc. and the other parties thereto, in favor of Cortland Capital Market Services LLC as administrative agent, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on February 11, 2014.
	10.8		Letter Agreement, dated February 10, 2014, by and among SFRO Holdings, LLC, 21^st Century Oncology Holdings, Inc., Kishore Dass, M.D., Ben Han, M.D. and Rajiv Patel, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on February 11, 2014.
	10.9		First Amendment to Credit Agreement, dated as of July 22, 2014, by and among 21C East Florida, LLC, South Florida Radiation Oncology Coconut Creek, LLC, the several lenders and other financial institutions or entities from time to time parties thereto and Cortland Capital Market Services LLC, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on August 28, 2014.
	10.10		Credit and Guaranty Agreement, dated July 28, 2014, by and among Medical Developers, LLC, certain of its subsidiaries and affiliates, including 21^st Century Oncology Holdings, Inc., the various lenders parties thereto and Cortland Capital Market Services LLC, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on August 28, 2014.

Exhibit Number			Description

	10.11		Executive Employment Agreement, dated effective as of February 21, 2008, between Radiation Therapy Services, Inc. and James H. Rubenstein, M.D. (incorporated herein by reference to Exhibit 10.77 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), as amended by that certain Amendment to Executive Employment Agreement, dated September 24, 2014, by among 21^st Century Oncology Holdings, Inc. f/k/a Radiation Therapy Services Holdings, Inc., 21^st Century Oncology, Inc. f/k/a Radiation Therapy Services, Inc. and James H. Rubenstein, M.D. (incorporated herein by reference to Exhibit 10.9 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015).+
	10.12		Executive Employment Agreement, dated effective as of February 21, 2008, as amended by that certain Amendment to Executive Employment Agreement, dated December 15, 2008 (incorporated herein by reference to Exhibit 10.78 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), Second Amendment to Executive Employment Agreement, dated February 2, 2011, between Radiation Therapy Services, Inc. and Norton Travis (incorporated herein by reference to Exhibit 10.78 to 21^st Century Oncology, Inc.'s Annual Report on Form 10-K filed on March 11, 2011) and Third Amendment to Executive Employment Agreement, dated as of June 11, 2012, by and among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc. and Norton Travis (incorporated herein by reference to Exhibit 10.7 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on June 15, 2012).+
	10.13		Executive Employment Agreement, dated effective as of February 21, 2008, between Radiation Therapy Services, Inc. and Howard Sheridan (incorporated herein by reference to Exhibit 10.79 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), as amended by that certain Amendment to Executive Employment Agreement, dated September 25, 2014, by and among 21^st Century Oncology Holdings, Inc. f/k/a Radiation Therapy Services Holdings, Inc., 21^st Century Oncology, Inc. f/k/a Radiation Therapy Services, Inc. and Howard Sheridan, M.D. (incorporated herein by reference to Exhibit 10.7 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015).+
	10.14		Physician Employment Agreement, dated effective as of July 1, 2003, as amended by that certain Amendment to Physician Employment Agreement, dated January 26, 2006, Second Amendment to Physician Employment Agreement, dated October 1, 2006, Third Amendment to Physician Employment Agreement, dated January 1, 2007, between 21^st Century Oncology, LLC f/k/a 21^st Century Oncology, Inc. and Constantine A. Mantz, M.D. (incorporated herein by reference to Exhibit 10.80 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), Fourth Amendment to Physician Employment Agreement, dated November 11, 2009, Fifth Amendment to Physician Employment Agreement, dated effective July 1, 2011, Sixth Amendment to Physician Employment Agreement, effective October 1, 2013, between 21^st Century Oncology, LLC f/k/a 21^st Century Oncology, Inc. and Constantine Mantz, M.D. (incorporated herein by reference to Exhibit 10.31 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014) and Eighth Amendment to Physician Employment Agreement, dated July 2014, by and between 21^st Century Oncology, LLC f/k/a 21^st Century Oncology, Inc. and Constantine Mantz, M.D. (incorporated herein by reference to Exhibit 10.12 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015).+

Exhibit Number			Description

	10.15		Physician Employment Agreement, dated February 21, 2008, as amended by that certain Amendment to Physician Employment Agreement, dated February 1, 2010, between James H. Rubenstein, M.D. and 21^st Century Oncology, Inc. (incorporated herein by reference to Exhibit 10.82 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010) and Second Amendment to Physician Employment Agreement, dated September 24, 2014, by and between 21^st Century Oncology, LLC f/k/a 21^st Century Oncology, Inc. and James H. Rubenstein, M.D. (incorporated herein by reference to Exhibit 10.10 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015).+
	10.16		Executive Employment Agreement, dated as of January 1, 2012, by and among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc. and Bryan J. Carey, incorporated herein by reference to Exhibit 10.5 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on June 15, 2012.+
	10.17		Second Amended and Restated Executive Employment Agreement, dated as of May 6, 2014, by and among 21^st Century Oncology Holdings, Inc. and Daniel E. Dosoretz., incorporated herein by reference to Exhibit 10.86 to Amendment No. 1 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-1 filed on May 7, 2014.+
	10.18		Amendment to Second Amended and Restated Executive Employment Agreement, dated September 25, 2014, by and among 21^st Century Oncology Holdings, Inc. and Daniel E. Dosoretz, M.D., incorporated by reference to Exhibit 10.5 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.+
	10.19		Form of Management Stock Contribution and Unit Subscription Agreement (Preferred Units and Class A Units), incorporated herein by reference to Exhibit 10.9 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+
	10.20		Management Stock Contribution and Unit Subscription Agreement (Preferred Units and Class A Units), dated February 21, 2008, by and between Radiation Therapy Investments, LLC and Daniel E. Dosoretz, incorporated herein by reference to Exhibit 10.10 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+
	10.21		Form of Incentive Unit Grant Agreement (Class M/O Units) for Chief Executive Officer, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.+
	10.22		Form of Incentive Unit Grant Agreement (Class M/O Units) for executive officers, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.+
	10.23		Master Lease, dated March 31, 2010, as amended by that certain First Amendment to Master Lease, dated April 15, 2010, among Theriac Rollup, LLC, and its wholly-owned subsidiaries as Landlord and Arizona Radiation Therapy Management Services, Inc., 21^st Century Oncology, LLC, 21^st Century Oncology Management Services, Inc., 21^st Century Oncology of El Segundo, LLC, 21^st Century Oncology of Kentucky, LLC, Nevada Radiation Therapy Management Services, Inc., West Virginia Radiation Therapy Services, Inc., 21^st Century Oncology of New Jersey, Inc., Central Massachusetts Comprehensive Cancer Center, LLC, Jacksonville Radiation Therapy Services, Inc., 21^st Century Oncology of Jacksonville, Inc., California Radiation Therapy Management Services, Inc. and Palms West Radiation Therapy, LLC, collectively as Tenant for certain facilities located in Arizona, California, Florida, Kentucky, Massachusetts, New Jersey, Nevada and West Virginia, as guaranteed by Radiation Therapy Services, Inc., incorporated herein by reference to Exhibit 10.14 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.24		Master Lease Agreement, dated December 21, 2010, between Theriac Rollup 2, LLC and West Virginia Radiation Therapy Services, Inc. for premises in Princeton, West Virginia, incorporated herein by reference to Exhibit 10.21 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 11, 2011.

Exhibit Number			Description

	10.25		Master Lease, dated March 31, 2010, among Theriac Rollup, LLC, and its wholly owned subsidiaries as Landlord and Arizona Radiation Therapy Management Services, Inc., 21^st Century Oncology, LLC, 21^st Century Oncology Management Services, Inc., 21^st Century Oncology of El Segundo, LLC, 21^st Century Oncology of Kentucky, LLC, Nevada Radiation Therapy Management Services, Inc., West Virginia Radiation Therapy Services, Inc., 21^st Century Oncology of New Jersey, Inc., Central Massachusetts Comprehensive Cancer Center, LLC, Jacksonville Radiation Therapy Services, Inc., 21^st Century Oncology of Jacksonville, Inc., California Radiation Therapy Management Services, Inc. and Palms West Radiation Therapy, LLC, collectively as Tenant for certain facilities located in Arizona, California, Florida, Kentucky, Massachusetts, New Jersey, Nevada and West Virginia, as guaranteed by Radiation Therapy Services, Inc., incorporated herein by reference to Exhibit 10.23 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.26		Amended and Restated Master Lease, dated October 31, 2012, by and among Spirit SPE Portfolio 2012- 3, LLC, Specialists in Urology Surgery Center, LLC, Specialists in Urology, P.A. and 21^st Century Oncology, LLC, as a joining lessee under that certain Joinder and Assumption of Obligations Under Amended and Restated Master Lease Agreement, dated May 24, 2013, by and between Specialists in Urology, P.A. and 21^st Century Oncology, LLC for certain facilities located in Naples, Bonita Springs, Fort Myers and Cape Coral, Florida (incorporated herein by reference to Exhibit 10.59 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014) and as amended in the Second Amended and Restated Master Lease, dated November 10, 2014, by and among Spirit Master Funding VII, LLC, Specialists in Urology Surgery Center, LLC and 21st Century Oncology, LLC, incorporated herein by reference to Exhibit 10.26 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	10.27		Administrative Services Agreement, dated January 1, 1997, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2008, Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between New York Radiation Therapy Management Services, Incorporated and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), Addendum to Administrative Services Agreement, dated January 1, 2011, between New York Radiation Therapy Management Services, LLC f/k/a New York Radiation Therapy Management Services, Inc. and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology, Inc.'s Annual Report on Form 10-K filed on March 11, 2011), Addendum to Administrative Services Agreement, dated January 1, 2012, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 22, 2012), Addendum to Administrative Services Agreement, dated January 1, 2013, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 28, 2013), Addendum to Administrative Services Agreement, dated January 1, 2014, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.11 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014) and Addendum to Administrative Services Agreement, dated January 1, 2015, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A, incorporated herein by reference to Exhibit 10.27 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.

Exhibit Number			Description

	10.28		Administrative Services Agreement, dated January 1, 2002, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2002, Addendum to Administrative Services Agreement, dated January 1, 2004, Addendum to Administrative Services Agreement, dated January 1, 2005, Addendum to Administrative Services Agreement, dated January 1, 2006, Addendum to Administrative Services Agreement, dated January 1, 2008, Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between North Carolina Radiation Therapy Management Services, LLC f/k/a North Carolina Radiation Therapy Management Services, Inc. and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), Addendum to Administrative Services Agreement, dated January 1, 2011, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology, Inc.'s Annual Report on Form 10-K filed on March 11, 2011), Addendum to Administrative Services Agreement, dated January 1, 2012, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 22, 2012), Addendum to Administrative Services Agreement, dated January 1, 2013, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 28, 2013), Addendum to Administrative Services Agreement, dated January 1, 2014, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.12 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014), Addendum to Administrative Services Agreement, dated July 1, 2014, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.4 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on August 28, 2014) and Addendum to Administrative Services Agreement, dated January 1, 2015, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A, incorporated herein by reference to Exhibit 10.28 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	10.29		Administrative Services Agreement, dated January 9, 1998, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 1999, Addendum to Administrative Services Agreement, dated January 1, 2000, Addendum to Administrative Services Agreement, dated January 1, 2001, Addendum to Administrative Services Agreement, dated January 1, 2002, Addendum to Administrative Services Agreement, dated January 1, 2003, Addendum to Administrative Services Agreement, dated January 1, 2004, Addendum to Administrative Services Agreement, dated January 1, 2005, Addendum to Administrative Services Agreement, dated January 1, 2006, and First Amendment to Administrative Services Agreement, dated August 1, 2006, between Nevada Radiation Therapy Management Services, Inc. and Michael J. Katin, M.D., Prof. Corp., incorporated herein by reference to Exhibit 10.51 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.

Exhibit Number			Description

	10.30		Administrative Services Agreement, dated October 31, 1998, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2007, Addendum to Administrative Services Agreement, dated January 1, 2008, Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between Maryland Radiation Therapy Management Services LLC f/k/a Maryland Radiation Therapy Management Services, Inc. and Katin Radiation Therapy, P.A. (incorporated herein by reference to Exhibit 10.52 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010) and Addendum to Administrative Services Agreement, dated January 1, 2011, between Maryland Radiation Therapy Management Services, LLC and Katin Radiation Therapy, P.A. (incorporated herein by reference to Exhibit 10.52 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 11, 2011).
	10.31		Administrative Services Agreement, dated August 1, 2003, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2004, and Addendum to Administrative Services Agreement, dated January 1, 2005, between California Radiation Therapy Management Services, Inc. and 21^st Century Oncology of California, a Medical Corporation, incorporated herein by reference to Exhibit 10.55 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.32		Management Services Agreement, dated May 1, 2006, between 21^st Century Oncology of California, a Medical Corporation and California Radiation Therapy Management Services, Inc., as successor by assignment pursuant to that certain Assignment and Assumption Agreement, dated May 1, 2006, between California Radiation Therapy Management Services, Inc. and LHA, Inc., as amended by that certain Addendum to Management Services Agreement, dated August 1, 2006, Second Amendment to Management Services Agreement, dated November 1, 2006, and Third Addendum to Management Services Agreement, dated August 1, 2007, for premises in Palm Desert, Santa Monica and Beverly Hills, California, incorporated herein by reference to Exhibit 10.56 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.33		Management Services Agreement, dated June 1, 2005, as amended by that certain Addendum, dated January 1, 2006, between New England Radiation Therapy Management Services, Inc. and Massachusetts Oncology Services, P.C. (incorporated herein by reference to Exhibit 10.59 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010) and Addendum, dated January 1, 2007, between New England Radiation Therapy Management Services, Inc. and Massachusetts Oncology Services, P.C. (incorporated herein by reference to Exhibit 10.19 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014).
	10.34		Professional Services Agreement, dated January 1, 2009, between Radiosurgery Center of Rhode Island, LLC and Massachusetts Oncology Services, P.C. (incorporated herein by reference to Exhibit 10.60 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), as amended by that certain Agreement, dated June 10, 2013, by and among New England Radiation Therapy Management Services, Inc., Rhode Island Hospital, Radiosurgery Center of Rhode Island, LLC and Financial Services of Southwest Florida, LLC (incorporated herein by reference to Exhibit 10.20 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014).
	10.35		Transition Agreement and Stock Pledge, dated May 14, 2013, by and between 21^st Century Oncology of New Jersey, Inc., CancerCare of Southern New Jersey, P.C. f/k/a 21^st Century Healthcare Associates, P.C. and Michael J. Katin, M.D., incorporated herein by reference to Exhibit 10.37 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.36		Form of Indemnification Agreement (Directors and/or Officers), incorporated herein by reference to Exhibit 10.103 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+

Exhibit Number			Description

	10.37		Form of Directors and Officers Indemnification Agreement, incorporated herein by reference to Exhibit 10.6 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015.+
	10.38		Asset Purchase Agreement, dated May 16, 2013, by and between 21^st Century Oncology, LLC, Specialists in Urology, P.A., William Fighelsthaler, M.D., Earl J. Gurevitch, M.D., Steven W. Luke, M.D., Michael F. D'Angelo, M.D., Jonathan Jay, M.D., Rolando Rivera, M.D., David S. Harris, M.D., Carolyn Langford, D.O. and David Wilkinson, M.D., incorporated herein by reference to Exhibit 10.57 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.39		Facility and Management Services Agreement, dated October 18, 2013, by and between U.S. Cancer Care, Inc. and 21^st Century Oncology, LLC for certain facilities located in Florida, incorporated herein by reference to Exhibit 10.60 to 21st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.40		Facility and Management Services Agreement, dated October 18, 2013, by and between U.S. Cancer Care, Inc. and 21^st Century Oncology of California, a Medical Corporation for certain facilities located in California (incorporated herein by reference to Exhibit 10.61 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014), as amended by that certain Addendum to Facility and Management Services Agreement, dated January 1, 2015, between U.S. Cancer Care, Inc. and 21^st Century Oncology of California, a Medical Corporation, incorporated herein by reference to Exhibit 10.40 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	10.41		Facilities and Management Services Agreement, dated July 15, 2013, by and between 21^st Century Oncology of New Jersey, Inc. and CancerCare of Southern New Jersey, P.C., incorporated herein by reference to Exhibit 10.62 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.42		Management Services Agreement, dated February 16, 2006, as amended by that certain Amendment Number 1 to Management Services Agreement, dated December 1, 2011, Amendment Number 2 to Management Services Agreement, dated March 6, 2012 and Amendment Number 3 to Management Services Agreement, dated October 1, 2013, by and between U.S. Cancer Care, Inc. and Coastal Radiation Oncology Medical Group, Inc., incorporated herein by reference to Exhibit 10.63 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.43		Radiation Therapy Services Agreement, effective as of November 1, 2013, between South County Radiation Therapy, LLC and Massachusetts Oncology Services, P.C., incorporated herein by reference to Exhibit 10.64 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.44		Radiation Therapy Services Agreement, effective as of November 1, 2013, between Roger Williams Radiation Therapy, LLC and Massachusetts Oncology Services, P.C., incorporated herein by reference to Exhibit 10.65 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.45		Radiation Therapy Services Agreement, effective as of November 1, 2013, between Southern New England Regional Cancer Center, LLC and Massachusetts Oncology Services, P.C., incorporated herein by reference to Exhibit 10.66 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.46		Fourth Amended and Restated Limited Liability Company Agreement of Radiation Therapy Investments, LLC, dated as of December 9, 2013, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.

Exhibit Number			Description

	10.47		Fifth Amended and Restated Limited Liability Company Agreement of 21^st Century Oncology Investments, dated effective September 26, 2014, incorporated herein by reference to Exhibit 10.4 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	10.48		Recapitalization Support Agreement, dated July 29, 2014, by and among 21^st Century Oncology Holdings, Inc., 21^st Century Oncology, Inc., the other subsidiaries party thereto, Vestar Capital Partners and the other noteholders party thereto, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on August 28, 2014.
	10.49		Subscription Agreement, dated September 26, 2014, by and among 21^st Century Oncology Investments, LLC, 21^st Century Oncology Holdings, Inc., 21^st Century Oncology, Inc. and Canada Pension Plan Investment Board, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	10.50		Warrant Agreement, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	10.51		Second Amended and Restated Security-holders Agreement, dated as of September 26, 2014, by and among 21^st Century Oncology Investments, LLC, 21^st Century Oncology Holdings, Inc. and the other parties thereto, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	10.52		Amended and Restated Management Agreement, dated September 26, 2014, by and among 21^st Century Oncology, Inc., 21^st Century Oncology Holdings, Inc., 21^st Century Oncology Investments, LLC and Vestar Capital Partners, incorporated herein by reference to Exhibit 10.5 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015.
	12.1		Statement Re: Computation of Ratio of Earnings to Fixed Charges.¥
	14.1		Code of Ethics, incorporated herein by reference to Exhibit 14.1 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 11, 2011.
	21.1		List of Subsidiaries, incorporated herein by reference to Exhibit 21.1 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.¥
	31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.¥
	32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.¥
	32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.¥
	99.1		Supplemental Consolidating Financial Information¥


(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Delaware (State or Other Jurisdiction of Incorporation or Organization)		26-1747745 (I.R.S. Employer Identification No.)
2270 Colonial Boulevard Fort Myers, Florida (Address Of Principal Executive Offices)		33907 (Zip Code)


Large accelerated filer o		Accelerated filer o		Non-Accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting Company o

		Requirement at December 31, 2014			Level at December 31, 2014

Minimum permitted unrestricted cash and cash equivalents plus availability under the Revolving Credit Facility		>$	15.0 million		$	186.4 million

Contractual Cash Obligations	Total		Less Than 1 Year		2 - 3 Years		4 - 5 Years		After 5 Years

	(in thousands)
Senior secured credit agreement(1)	$	118,322		13,872		104,450		—		—
Senior subordinated notes(2)		466,056		37,530		428,526		—		—
Senior secured second lien notes(3)		413,420		31,063		382,357		—		—
Senior secured notes(4)		92,993		8,813		84,180		—		—
Other notes and capital leases(5)		89,156		32,855		43,329		8,760		4,212
Operating lease obligations(6)		543,437		59,413		111,856		97,677		274,491
Finance obligations(7)		29,304		2,194		4,777		4,566		17,767

Total contractual cash obligations	$	1,752,688	$	185,740	$	1,159,475	$	111,003	$	296,470


PART I
Item 1. Business			1
Item 1A. Risk Factors			26
Item 1B. Unresolved Staff Comments			49
Item 2. Properties			50
Item 3. Legal Proceedings			50
Item 4. Mine Safety Disclosures			51
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			52
Item 6. Selected Financial Data (Restated)			53
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Restated)			58
Item 7A. Quantitative and Qualitative Disclosures about Market Risk			99
Item 8. Financial Statements and Supplementary Data (Restated)			99
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			99
Item 9A. Controls and Procedures (Restated)			99
Item 9B. Other Information			105
PART III
Item 10. Directors, Executive Officers and Corporate Governance			106
Item 11. Executive Compensation			111
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			123
Item 13. Certain Relationships and Related Transactions, and Director Independence			124
Item 14. Principal Accountant Fees and Services			131
PART IV
Item 15. Exhibits and Financial Statement Schedules			132
Index to Consolidated Financial Statements			F-1
SIGNATURES
EXHIBIT INDEX

	Year Ended December 31,

U.S. Domestic	2012			2013			2014
Payer
Medicare		42.6	%		41.9	%		39.8	%
Commercial		53.6			54.3			57.1
Medicaid		2.7			2.7			2.2
Self pay		1.1			1.1			0.9

Total U.S. domestic net patient service revenue		100.0	%		100.0	%		100.0	%

	(Restated)							(Restated)

	Years Ended December 31,							Years Ended December 31,
International	2012		2013		% Change			2013		2014		% Change
Total number of new cases		15,229		16,090		5.7	%		16,090		17,756		10.4	%



Revenue per radiation oncology case	$	5,209	$	5,111				$	5,111	$	5,138



Treatment centers at beginning of period	163
Internally developed / reopened	2
Transitioned to freestanding	1
Internally (consolidated / closed / sold)	(10	)
Acquired	21
Hospital-based / other groups	5
Hospital-based (ended / transitioned)	(2	)



Treatment centers at period end	180

	Stock Awards

	Equity Incentive Plan Awards
	Number of Unearned Shares, Units or Other Rights That Have Not Vested(#)				Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested($)(b)
Daniel E. Dosoretz, M.D.		28,500		Class M Units(a)	$	310,650
		32,000		Class O Units(a)		15,040
		33.6	%	Executive Bonus Plan(a)		3,277,719
Constantine A. Mantz, M.D.		4,056		Class M Units(a)		44,210
		5,185		Class O Units(a)		2,437
		2.4	%	Executive Bonus Plan(a)		230,849



Howard M. Sheridan, M.D.	2014	—	—	—	173,549	(1)	173,549
	2013	—	—	—	312,383	(1)	312,383

Type of Fees	2014		2013

Audit fees	$	3,680,000	$	1,380,000
Audit-related fees		505,000		1,194,000
Tax fees		507,000		300,000
All other		—		—

Total	$	4,692,000	$	2,874,000


21^st Century Oncology Holdings, Inc.
*Audited Consolidated Financial Statements*
Report of Independent Registered Public Accounting Firm—Deloitte & Touche LLP			F-2
Consolidated Financial Statements:
Consolidated Balance Sheets (as Restated) at December 31, 2014 and 2013			F-3
Consolidated Statements of Operations and Comprehensive Loss (as Restated) for the Years Ended December 31, 2014, 2013 and 2012			F-4
Consolidated Statements of Cash Flows (as Restated) for the Years Ended December 31, 2014, 2013 and 2012			F-5
Consolidated Statements of Changes in Equity (as Restated) for the Years Ended December 31, 2014, 2013 and 2012			F-7
Notes to Consolidated Financial Statements			F-8

	December 31, 2011

Accumulated deficit, as reported	$	(483,815	)
Revenue recognition:
MDL revenue		(3,563	)
Other revenue		564

Total revenue recognition		(2,999	)
Medical malpractice		(2,112	)
Restatement tax impact		1,270

Cumulative adjustments to accumulated deficit		(3,841	)

Accumulated deficit, as restated	$	(487,656	)

Foreign Currency Derivative Agreements (in thousands):		Notional Amount			Maturity Date		Premium Amount			Fair Value

Foreign currency derivative Argentine Peso to U.S. dollar		$	1,250		March 31, 2014		$	171		$	22

(in thousands):	December 31, 2014		December 31, 2013

	(Restated)		(Restated)
Medical drugs		3,162		2,674

	$	3,162	$	2,674


Buildings and leasehold improvements		10 - 50 years
Office, computer, and telephone equipment		3 - 10 years
Medical and medical testing equipment		5 - 10 years
Automobiles and vans		5 years

(in thousands):	December 31, 2014			December 31, 2013

	Restated			Restated
Land	$	1,795		$	1,795
Buildings and leasehold improvements		85,653			70,709
Office, computer, and telephone equipment		114,669			87,332
Medical and medical testing equipment		300,511			253,347
Automobiles and vans		1,435			1,474

		504,063			414,657
Less: accumulated depreciation		(241,697	)		(180,830	)
		262,366			233,827
Construction-in-progress		13,373			9,120
Foreign currency translation		(6,169	)		(3,710	)

	$	269,570		$	239,237

(in thousands):	December 31, 2014			December 31, 2013

Medical and medical testing equipment	$	79,575		$	55,345
Leasehold improvements		85			85
Office, computer, and telephone equipment		1,708			72
Automobiles and vans		67
Less: accumulated depreciation		(20,391	)		(9,846	)

	$	61,044		$	45,656

	December 31, 2014

(in thousands):	Gross		Impairment Loss		Accumulated Amortization			Foreign Currency Translation			Net
*Intangible assets subject to amortization*
Management service agreements	$	57,739	$	—	$	(6,490	)	$	—		$	51,249
Noncompete agreements		76,450		—		(61,525	)		(70	)		14,855
Hospital contracts		20,837		—		(4,209	)		(7,351	)		9,277
Trade names		6,738		—		(5,280	)		—			1,458
*Intangible assets not subject to amortization (indefinite-lived)*
Trade names		4,842		—		—			(709	)		4,133
Certificates of need		413		—		—			—			413

Balance, end of period	$	167,019	$	—	$	(77,504	)	$	(8,130	)	$	81,385


2015	$	12,612
2016	$	10,876
2017	$	8,926
2018	$	7,971
2019	$	5,763
Thereafter	$	30,691

Acquisition Consideration

Cash	$	42,250
11.75% senior secured notes due January 2017		75,000
Fair value of contingent earn-out, represented by 11.75% senior secured notes due January 2017 issued into escrow		7,550

Total acquisition consideration	$	124,800


2014	$	5,563
2015	$	5,563
2016	$	5,464
2017	$	5,464
2018	$	5,195
Thereafter	$	29,564

Preliminary Estimated Acquisition Consideration

Cash	$	432
Term B Loan (net of original issue discount)		57,300
Seller financing note		2,000
Working capital settlement		(5,333	)
Fair value of contingent earn-out		11,052

Total preliminary estimated acquisition consideration	$	65,451

Preliminary Estimated Acquisition Consideration Allocation (Restated)

Accounts receivable	$	12,836
Other current assets		2,089
Current liabilities		(26,175	)
Property and equipment		20,750
Intangible assets—(non-compete and trade name)		11,500
Other noncurrent assets		910
Long-term debt		(42,021	)
Other long—term liabilities		(4,317	)
Noncontrolling interest—redeemable		(39,925	)
Goodwill		129,804

Preliminary estimated acquisition consideration	$	65,451


Trade name (3 year life)	$	2,100
Non-compete agreement (5 year life)		9,400

	$	11,500


2014	$	2,365
2015	$	2,580
2016	$	2,580
2017	$	1,938
2018	$	1,880
Thereafter	$	157

Description:	Beginning Balance			Tax Expense			Other Comprehensive Income			Ending Balance

Fiscal Year 2012, Restated	$	(44.7	)	$	(36.9	)	$	(1.0	)	$	(82.6	)
Fiscal Year 2013, Restated		(82.6	)		(14.3	)		—			(96.9	)
Fiscal Year 2014, Restated		(96.9	)		(84.8	)		—			(181.7	)

	December 31, 2014			December 31, 2013			December 31, 2012

Gross unrecognized tax benefits at January 1	$	1,046		$	854		$	1,737
Gross increases—tax positions in prior period		—			—			40
Gross increases—tax positions in current period		222			196			268
Lapse of statute of limitiations and settlements		(623	)		(4	)		(1,191	)

Gross unrecognized tax benefits at December 31, 2012 (Restated)	$	645		$	1,046		$	854

	December 31, 2014		December 31, 2013

	Restated		Restated
Accrued payroll and payroll related deductions and taxes	$	23,630	$	23,396
Accrued compensation arrangements		30,867		15,316
Accrued interest		16,229		13,426
Accrued other		17,878		12,010

Total accrued expenses	$	88,604	$	64,148

Year to date (in thousands): (Restated)

As of December 31, 2013	$	—
Issuance of Series A preferred stock, net of discount and issuance costs		318,863
Embedded derivative		(15,006	)
Accretion of Series A preferred stock to redemption value		3,457
Accrued Series A preferred stock dividends		12,683

As of December 31, 2014	$	319,997

	Fair Value		Carrying Value

$90.0 million senior secured credit facility—(Term Facility)	$	88,763	$	88,704
$380.1 million Senior Subordinated Notes due April 15, 2017	$	349,646	$	378,407
$350.0 million Senior Secured Second Lien Notes due January 15, 2017	$	353,500	$	349,275
$75.0 million Senior Secured Notes due January 15, 2017	$	79,125	$	75,000

	Fair Value		Carrying Value

$90.0 million senior secured credit facility—(Term Facility)	$	88,650	$	87,989
$380.1 million Senior Subordinated Notes due April 15, 2017	$	328,743	$	377,667
$350.0 million Senior Secured Second Lien Notes due January 15, 2017	$	355,250	$	348,926
$75.0 million Senior Secured Notes due January 15, 2017	$	78,750	$	75,000

(in thousands):

Letter of credit to lessor of a treatment center in Florida to serve as a security for the performance of the assignees' obligations under the real estate lease	$	150
Letter of credit for Company's workers' compensation insurance program		1,285
Letter of credit for Company's property insurance programs		500
Letter of credit to a financial institution to provide an uncommitted line of credit to certain operating entities of Medical Developers LLC		2,480
Letter of credit to a lessor under a master lease relating to ourtreatment facilities		625

Outstanding letters of credit as of December 31, 2014	$	5,040

(in thousands):	Commitments		Less: Sublease Rentals			Net Rental Commitments

2015	$	61,946	$	(2,533	)	$	59,413
2016		60,068		(1,937	)		58,131
2017		55,327		(1,602	)		53,725
2018		51,361		(1,245	)		50,116
2019		48,699		(1,138	)		47,561
Thereafter		285,140		(10,649	)		274,491

	$	562,541	$	(19,104	)	$	543,437