Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2026

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting PoliciesRecent Accounting Pronouncements Not Yet Adopted

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

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

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

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

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

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

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

disclosures.

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

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

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

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

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

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

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

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

Company's disclosures.

Variable Interest Entities

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

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

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

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

VIE.

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

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

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

applied prospectively.

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

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

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

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

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

a management services agreement ("MSA").

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

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

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

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

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

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

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

the minority member can force termination of the MSA.

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

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

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

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

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

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

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

As of September 30, 2026 and December 31, 2025, nine of the Company's hospitals were owned and operated through LLCs

that have been determined to be VIEs and were consolidated by the Company. Consolidated assets at September 30, 2026 and

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

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

and presented herein on a combined basis.

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

thousands):

	September 30, 2026	December 31, 2025
Current liabilities:
Current installments of long-term debt	$3,551	$3,635
Accounts payable	81,548	102,482
Accrued salaries and benefits	27,302	36,900
Other accrued expenses and liabilities	43,939	67,419
Liabilities held for sale	55,262	—
Total current liabilities	211,602	210,436
Long-term debt, less current installments	6,988	9,734
Long-term operating lease liability	78,594	101,153
Long-term operating lease liability, related party	2,301	9,313
Self-insured liabilities	680	677
Other long-term liabilities	1,552	3,826
Total liabilities	$301,717	$335,139

Income from operations before income taxes attributable to VIEs was $61.3 million and $75.7 million for the three months

ended September 30, 2026 and 2025, respectively, and $181.9 million and $206.3 million for the nine months ended

September 30, 2026 and 2025, respectively.

Accounting Estimates

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

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

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

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

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

results may differ from these estimates.

Revenue Recognition

Overview

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

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

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

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

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

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

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

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

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

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

Change in Accounting Estimate

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

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

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

months ended September 30, 2025, the Company implemented a new revenue accounting system that provided management

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

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

the three months ended September 30, 2025, along with the Company's recently completed analysis of historical collection

trends, indicated the current collection estimate differed from historical collection estimates thereby resulting in a change in

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

the three months ended September 30, 2025 (the period of change).

Contractual Adjustments, Discounts and Cost Report Settlements

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

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

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

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

standard charges.

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

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

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

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

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

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

amounts expected to be collected.

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

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

documentation of healthcare services, as well as the medical necessity of the services authorized and provided, are also often

subject to interpretation. The Company estimates contractual adjustments on a payor-specific basis based on its interpretation

of the applicable regulations or contract terms and the historical collection experience of each payor, and these 

interpretations may result in payments that differ from the Company's estimates. Because updated regulations and contract

renegotiations occur frequently, management continually reviews and assesses these estimates.

Final determination of amounts earned under Medicare, Medicaid and other third party payor programs often occurs in

subsequent years because of audits by the programs, rights of appeal, and the application of technical provisions. Estimated

reimbursement amounts, which are recorded within net patient service revenue in the period in which the related services are

rendered, are adjusted in subsequent periods as determined (in relation to certain government programs, primarily Medicare,

this is generally referred to as the "cost report" filing and settlement process). Differences between original estimates and

subsequent revisions, including final settlements, are recorded as adjustments to net patient service revenue in the period in

which such revisions become known. These adjustments resulted in an increase to net patient service revenue of $15.6

million and $4.5 million for the three months ended September 30, 2026 and 2025, respectively, and an increase to net patient

service revenue of $18.0 million and $13.7 million for the nine months ended September 30, 2026 and 2025, respectively.

At September 30, 2026 and December 31, 2025, the Company's settlements under reimbursement agreements with third party

payors were a net receivable of $13.3 million and a net payable of $7.8 million, respectively, reflecting a receivable of $29.8

million and $21.1 million, respectively, included in other current assets and a payable of $16.5 million and $28.9 million,

respectively, included in other accrued expenses and liabilities in the unaudited condensed consolidated balance sheets.

Amounts earned under prospective payment and other reimbursement activities remain subject to review by appropriate

governmental authorities or their agents. In the opinion of the Company's management, adequate provision has been made for

any adjustments that may result from such reviews.

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

are recognized as bad debt expense. Bad debt expense for the three and nine months ended September 30, 2026 and 2025 was

not material to the Company.

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

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

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

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

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

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

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

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

included in other operating expenses.

Payor Mix

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
	Amount	% of Total	Amount	% of Total	Amount	% of Total Revenue	Amount	% of Total Revenue
Medicare	$641,667	39.5%	$599,491	38.0%	$1,962,379	40.5%	$1,838,885	38.9%
Medicaid	152,185	9.4%	154,120	9.8%	470,686	9.7%	463,196	9.9%
Other managed care	715,870	44.1%	701,279	44.5%	2,088,882	43.1%	2,070,484	43.9%
Self-pay and other	87,129	5.3%	86,307	5.4%	254,740	5.2%	259,390	5.5%
Net patient service revenue	$1,596,851	98.3%	$1,541,197	97.7%	$4,776,687	98.5%	$4,631,955	98.2%
Other revenue	28,005	1.7%	35,549	2.3%	72,284	1.5%	87,305	1.8%
Total revenue	$1,624,856	100.0%	$1,576,746	100.0%	$4,848,971	100.0%	$4,719,260	100.0%

Charity Care

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

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

approximated $7.4 million and $6.4 million for the three months ended September 30, 2026 and 2025, respectively, and

$22.7 million and $50.2 million for the nine months ended September 30, 2026 and 2025, respectively. The Company does

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

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

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

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

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

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

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

provided under its charity care program.

Market Risks

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

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

for those states in which the Company generates significant revenue:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2026	2025	2026	2025
Oklahoma	23.6%	23.8%	23.1%		23.6%
New Mexico	16.8%	17.0%	17.5%		17.1%
Texas	35.9%	35.3%	35.5%		35.8%
New Jersey	10.2%	10.3%	10.3%		10.2%
Other	13.5%	13.6%	13.6%		13.3%
Total	100.0%	100.0%	100.0%		100.0%

Acquisitions

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

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

transactions is allocated to the assets acquired, liabilities assumed, and, if applicable, noncontrolling interests based upon

their respective fair values as of the acquisition date. Provisional amounts may be adjusted during the measurement period as

additional information is obtained about facts and circumstances that existed as of the acquisition date. The measurement

period ends when the Company receives the information necessary to finalize the accounting, but may not exceed one year

from the acquisition date. The Company records the excess of the purchase price allocation over those fair values as

goodwill.

Divestitures

On September 28, 2026, the Company entered into a definitive agreement to sell its 70.5% equity interest in The University

of Kansas Health System – St. Francis Campus ("St. Francis") to the University of Kansas Hospital Authority for

$58.4 million. The sale is expected to close in the fourth quarter of 2026, subject to customary closing conditions. The results

of operations for St. Francis until the effective date of the sale are classified as part of continuing operations as the disposal

group did not meet the criteria for reporting as a discontinued operation.

The assets and liabilities of St. Francis were classified as held for sale within current assets and current liabilities on the

condensed consolidated balance sheet at September 30, 2026. Prior period amounts were not reclassified. The following table

presents the major classes of assets and liabilities of the held for sale disposal group (in thousands):

	September 30, 2026
Accounts receivable	$34,132
Other current assets	19,871
Property and equipment, net	29,729
Operating lease right of use assets	10,194
Operating lease right of use assets, related party	8,604
Goodwill	17,406
Other classes of assets that are not major	13,713
Total assets held for sale	$133,649
Accounts payable	18,021
Accrued salaries and benefits	8,062
Other accrued expenses and liabilities	10,203
Long-term operating lease liability	9,968
Long-term operating lease liability, related party	6,920
Other classes of liabilities that are not major	2,088
Total liabilities held for sale	$55,262

Investments in Equity Securities

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

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

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

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

issuer. The Investment is measured at fair value on a non-recurring basis as of the date observable price changes occur. Its

fair value is categorized as Level 2 within the fair value hierarchy because the valuation methods use inputs that are primarily

observable, such as the transaction price, and any unobservable inputs are not considered significant. Recording upward or

downward adjustments to the carrying value of the Investment as a result of observable price changes requires quantitative

assessments of the fair value using various valuation methodologies and involves the use of estimates.

During the first quarter of 2026, the Company recorded an upward adjustment of $10.9 million to the carrying value of the

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

third quarter of 2026, the Company acquired equity in the privately held company by partially exercising approximately 44%

of the option and concurrently sold the acquired equity for net proceeds of $9.6 million. The Company has not recognized

any impairments or downward adjustments related to the Investment.

The following is a summary of unrealized and realized gains on the Investment recognized during the three and nine months

ended September 30, 2026 and 2025 (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2026	2025	2026	2025
Net gain recognized during the period on equity securities	$4,363	$—	$15,263	$—
Less: Net gain recognized during the period on equity securities sold during the period	$1,336	$—	$6,106	$—
Unrealized gains recognized during the period on equity securities still held at the reporting date	$3,027	$—	$9,157	$—

Unrealized and realized gains and losses on the Investment are recorded within other operating expenses on the condensed

consolidated income statements, and the carrying value of the Investment is recorded within other assets on the condensed

consolidated balance sheets. As of September 30, 2026, the carrying value of the remaining Investment was $13.6 million,

inclusive of $9.2 million of cumulative upward adjustments. As of December 31, 2025, the carrying value of the Investment

was $7.9 million. 

Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

	Carrying Amount		Fair Value
	September 30, 2026	December 31, 2025	September 30, 2026	December 31, 2025
Senior secured term loan facility	$765,230	$770,499	$766,187	$770,499
5.75% Senior Notes	$299,753	$299,686	$291,885	$295,191

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

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

Noncontrolling Interests

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

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

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

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

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

features associated with the noncontrolling interests for St. Francis could require the Company to deliver cash if the

redemptive features are exercised. These redemptive features could be exercised upon, among other things, the Company's

exclusion or suspension from participation in any federal or state government healthcare payor program. Therefore, the

noncontrolling interests balance for St. Francis is classified outside the permanent equity section of the Company's unaudited

condensed consolidated balance sheets.

The redeemable noncontrolling interests related to St. Francis have not been subsequently measured at fair value since the

acquisition date in 2017. The noncontrolling interests are not currently redeemable and it is not probable that the

noncontrolling interests will become redeemable as the possibility of the Company being excluded or suspended from

participation in any federal or state government healthcare payor program is remote.

Earnings Per Share

Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the

weighted-average common shares outstanding during the period. Diluted net income (loss) per share takes into account the

potential dilution that could occur if securities or other contracts to issue shares, such as unvested restricted stock units, were

exercised and converted into shares. Diluted net income (loss) per share is computed by dividing net income (loss) available

to common stockholders by the weighted-average common shares outstanding during the period, increased by the number of

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