Description of the Business and Basis of Presentation

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of the Business and Basis of Presentation

Description of the Business and Basis of Presentation

Reporting Entity

Ardent Health Partners, Inc. was initially formed in Delaware in 2015 as Ardent Health Partners, LLC. On July 17, 2024,

Ardent Health Partners, LLC converted from a Delaware limited liability company into a Delaware corporation in connection

with its initial public offering and changed its name to Ardent Health Partners, Inc. Ardent Health Partners, Inc. is a holding

company that has affiliates that operate acute care hospitals and other healthcare facilities and employ physicians. The terms

“Ardent,” the “Company,” “we,” “our” and “us,” as used in these notes to the unaudited condensed consolidated financial

statements, refer to Ardent Health Partners, LLC and its affiliates and, subsequent to July 16, 2024, Ardent Health Partners,

Inc. and its affiliates, unless stated otherwise or indicated by context. The term “affiliates” includes direct and indirect

subsidiaries of Ardent and partnerships and joint ventures in which such subsidiaries are equity owners. At September 30,

2024, the Company operated 30 acute care hospitals in six states, including two rehabilitation hospitals and two surgical

hospitals.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of

the information and notes required by GAAP for complete financial statements. In the opinion of management, all

adjustments, which consist of normal recurring adjustments, and disclosures considered necessary for a fair presentation have

been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and

assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results

could differ from these estimates under different assumptions or conditions.

The financial statements include the unaudited condensed consolidated balance sheets, income statements, comprehensive

income statements, statements of cash flows and statements of changes in equity of the Company and its affiliates, which are

controlled by the Company through the Company’s direct or indirect ownership of a majority equity interest and rights

granted to the Company through certain variable interests.  All intercompany balances and transactions have been eliminated

in consolidation.

Certain information and disclosures normally included in annual financial statements presented in accordance with GAAP

have been omitted pursuant to rules and regulations of the Securities and Exchange Commission ("SEC").  Accordingly,

these unaudited condensed consolidated financial statements and related notes should be read in conjunction with the

Company's audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023

included in the Company's final prospectus, dated July 17, 2024, filed with the SEC pursuant to Rule 424(b) under the

Securities Act of 1933, as amended, on July 18, 2024 in connection with the Company's initial public offering.

Initial Public Offering and Corporate Conversion

On July 19, 2024, the Company completed an initial public offering of 12,000,000 shares of its common stock at a public

offering price of $16.00 per share (the "IPO") for aggregate gross proceeds of $192.0 million and net proceeds of

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

Company provided the underwriters with an option to purchase up to an additional 1,800,000 shares of common stock of the

Company, which was fully exercised by the underwriters, and, on July 30, 2024, the Company issued 1,800,000 additional

shares of common stock at $16.00 per share for additional net proceeds of approximately $27.2 million, after deducting

underwriting discounts and commissions of approximately $1.6 million. The Company’s common stock is listed on the New

York Stock Exchange under the symbol “ARDT”.

On July 17, 2024, in connection with the IPO and immediately prior to the effectiveness of the Company's registration

statement on Form S-1, the Company converted from a Delaware limited liability company into a Delaware corporation by

means of a statutory conversion (the “Corporate Conversion”) and changed its name to Ardent Health Partners, Inc. As a

result of the Corporate Conversion, the outstanding limited liability company membership units and vested profits interest

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

into 2,848,027 shares of restricted common stock. Immediately following the Corporate Conversion, ALH Holdings, LLC, a

subsidiary of Ventas, Inc. ("Ventas"), a common unit holder that beneficially owned a percentage of the Company’s

outstanding membership interests and maintained a seat on the Company’s board of managers, making Ventas a related party,

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

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

Inc. (the "ALH Contribution"). As a result of the ALH Contribution, AHP Health Partners is a wholly-owned subsidiary of

Ardent Health Partners, Inc. The Corporate Conversion and the ALH Contribution have been retrospectively applied to prior

periods herein for the purposes of calculating basic and diluted net income per share. The Company’s certificate of

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

par value per share.

Cybersecurity Incident

In November 2023, the Company determined that a ransomware cybersecurity incident had impacted and disrupted a number

of the Company’s operational and information technology systems (the “Cybersecurity Incident”). During this time, the

Company’s hospitals remained operational and continued to deliver patient care utilizing established downtime procedures.

The Company immediately suspended user access to impacted information technology applications, executed cybersecurity

protection protocols, and took steps to restrict further unauthorized activity. Additionally, because of the time taken to contain

and remediate the Cybersecurity Incident, online electronic billing systems were not functioning at their full capacities and

certain billing, reimbursement and payment functions were delayed, which had an adverse impact on the Company’s results

of operations and cash flows for 2023 and the first quarter of 2024.

While the Company’s hospitals continued to deliver patient care at varying levels during the disruption and remediation

periods and the Company’s business is no longer materially disrupted, the Company has incurred, and will continue to incur,

certain expenses related to the Cybersecurity Incident, including expenses related to the settlement of the consolidated class

action lawsuit related to the Cybersecurity Incident. The Company continues to work with its various insurance carriers to

obtain reimbursement for its costs and liabilities incurred due to the Cybersecurity Incident.

Pure Health Equity Investment

On May 1, 2023, an affiliate of Pure Health Holding PJSC (“Pure Health”) purchased a minority interest in the Company

from the unit holders at the time. In connection with Pure Health’s investment, unit holders were eligible to exercise tag-

along rights to sell a proportionate share of their individual equity ownership interest in Ardent Health Partners, LLC and

AHP Health Partners, the Company's direct subsidiary. Ventas exercised its tag-along right to sell its proportionate share of

ownership interest in both Ardent Health Partners, LLC and AHP Health Partners. To fulfill Ventas’ right to sell its

proportionate share of noncontrolling ownership interest in AHP Health Partners, the Company exercised its right to

repurchase those shares from Ventas for $26.0 million concurrent with Pure Health’s purchase of a minority interest in the

Company. The carrying value of the noncontrolling interest was adjusted proportionate to the shares repurchased to reflect

the change in ownership of AHP Health Partners, with the difference between the fair value of the consideration paid and the

amount by which the noncontrolling interest was adjusted recognized in equity attributable to Ardent Health Partners, LLC.

As of September 30, 2024, Pure Health and Ventas beneficially owned approximately 21.2% and 6.5%, respectively, of the

Company’s outstanding common stock.

General and Administrative Costs

The majority of the Company’s expenses are “cost of revenue” items. Costs that could be classified as general and

administrative by the Company would include its corporate office costs, which were $33.7 million and $29.0 million for the

three months ended September 30, 2024 and 2023, respectively, and $95.7 million and $82.2 million for the nine months

ended September 30, 2024 and 2023, respectively.