UNIVERSAL HEALTH SERVICES INC

Previous wording

As of June 30, 2025, we owned and/or operated 367 inpatient facilities and 61 outpatient and other facilities, including the following, located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico:

Current wording

As of September 30, 2025, we owned and/or operated 374 inpatient facilities and 156 outpatient and other facilities located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico. We have changed the method of our outpatient behavioral health care facility counts during the third quarter of 2025 and substantially all of the increase from prior periods relates to that change in convention.

Previous wording

Net revenues from our acute care hospitals, outpatient facilities and commercial health insurer accounted for 56% of our consolidated net revenues during each of the three-month periods ended June 30, 2025 and 2024, and 57% and 56% of our consolidated net revenues during the six-month periods ended June 30, 2025 and 2024, respectively. Net revenues from our behavioral health care facilities and commercial health insurer accounted for 44% of our consolidated net revenues during each of the three-month periods ended June 30, 2025 and 2024, and 43% and 44% of our consolidated net revenues during the six-month periods ended June 30, 2025 and 2024, respectively.

Current wording

Net revenues from our acute care hospitals, outpatient facilities and commercial health insurer accounted for 59% and 57% of our consolidated net revenues during the three-month periods ended September 30, 2025 and 2024, respectively, and 57% of our consolidated net revenues during each of the nine-month periods ended September 30, 2025 and 2024.

Previous wording

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $247 million and $213 million during the three-month periods ended June 30, 2025 and 2024, respectively, and $474 million and $421 million during the six-month periods ended June 30, 2025 and 2024, respectively. Total assets at our U.K. behavioral health care facilities were approximately $1.512 billion as of June 30, 2025 and $1.358 billion as of December 31, 2024.

Current wording

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $264 million and $230 million during the three-month periods ended September 30, 2025 and 2024, respectively, and $738 million and $651 million during the nine-month periods ended September 30, 2025 and 2024, respectively. Total assets at our U.K. behavioral health care facilities were approximately $1.532 billion as of September 30, 2025 and $1.358 billion as of December 31, 2024.

Previous wording

You should carefully review the information contained in this Quarterly Report and should particularly consider any risk factors that we set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, this Quarterly Report and in other reports or documents that we file from time to time with the Securities and Exchange Commission (the “SEC”). In this Quarterly Report, we state our beliefs of future events and of our future financial performance. This Quarterly Report contains “forward-looking statements” that reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning our possible future results of operations, business and growth strategies, financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions, and statements of our goals and objectives, and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “appears,” “projects” and similar expressions, as well as statements in future tense, identify forward-looking statements. In evaluating those statements, you should specifically consider various factors, including the risks related to healthcare industry trends and those set forth herein in Item 1A. Risk Factorsand Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Forward Looking Statements and Risk Factorsin our Annual Report on Form 10-K for the year ended December 31, 2024 and in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Forward Looking Statements and Risk Factors, as included herein. Those factors may cause our actual results to differ materially from any of our forward-looking statements.

Current wording

You should carefully review the information contained in this Quarterly Report and should particularly consider any risk factors that we set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, this Quarterly Report and in other reports or documents that we file from time to time with the Securities and Exchange Commission (the “SEC”). In this Quarterly Report, we state our beliefs of future events and of our future financial performance. This Quarterly Report contains “forward-looking statements” that reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning our possible future results of operations, business and growth strategies, financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions, and statements of our goals and objectives, and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “appears,” “projects” and similar expressions, as well as statements in future tense, identify forward-looking statements. In evaluating those statements, you should specifically consider various factors, including the risks related to healthcare industry trends and those set forth in Part 1, Item 1A. Risk Factorsand Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Forward Looking Statements and Risk Factorsin our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, Item 1A. Risk Factors and Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Forward Looking Statements and Risk Factors, as included herein. Those factors may cause our actual results to differ materially from any of our forward-looking statements.

Previous wording

as discussed below in Sources of Revenue, we receive revenues from various state and county-based programs, including Medicaid in all the states in which we operate. We receive annual Medicaid revenues of approximately $100 million, or greater, from each of California, Texas, Nevada, Illinois, Pennsylvania, Washington, D.C., Kentucky, Tennessee, Massachusetts, Virginia, Mississippi and Florida. Most of these programs are approved on a year-to-year basis and there is no assurance that these revenues will continue at their current rates or at all. We are therefore particularly sensitive to potential reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those states;

Current wording

as discussed below in Sources of Revenue, we receive revenues from various state and county-based programs, including Medicaid in all the states in which we operate. We receive annual Medicaid revenues of approximately $100 million, or greater, from each of Texas, California, Nevada, Washington, D.C., Illinois, Pennsylvania, Kentucky, Tennessee, Virginia, Massachusetts, Michigan, Florida, Mississippi and Washington. Most of these programs are approved on a year-to-year basis and there is no assurance that these revenues will continue at their current rates or at all. We are therefore particularly sensitive to potential reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those states;

Previous wording

legislation adopted on July 4, 2025 (the One Big Beautiful Bill Act), attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditure. That legislation also places limits on provider fees used to increase federal Medicaid funding to states. The legislation prohibits states not previously having expanded Medicaid eligibility to 138% of federal poverty level from increasing the rate of current provider fees which fund certain state supplemental payments or increasing the base of the fee to a class or items of services that the fee did not previously cover. That current provider fee threshold will remain at 6%. For states having expanded Medicaid eligibility under the legislation, the provider fee threshold will be reduced by 0.5% annually between federal fiscal years 2028 and 2032 with the resulting threshold ultimately becoming 3.5%. The legislation also eliminates certain insurance exchange premium tax credits beyond 2025 and exchange enrollment is expected to be adversely impacted. All of these factors, which could have a material unfavorable impact on our results of operations, may be expected to reduce our revenue and likely increase the level of uncompensated care provided by our facilities;

Current wording

legislation adopted on July 4, 2025 (the One Big Beautiful Bill Act), attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditure. That legislation also places limits on provider fees used to increase federal Medicaid funding to states. The legislation prohibits states not previously having expanded Medicaid eligibility to 138% of federal poverty level from increasing the rate of current provider fees which fund certain state supplemental payments or increasing the base of the fee to a class or items of services that the fee did not previously cover. That current provider fee threshold will remain at 6%. For states having expanded Medicaid eligibility under the legislation, the provider fee threshold will be reduced by 0.5% annually between federal fiscal years 2028 and 2032 with the resulting threshold ultimately becoming 3.5%. The legislation also eliminates certain insurance exchange premium tax credits beyond 2025 and exchange enrollment is expected to be adversely impacted. Extension of the tax credits is currently the subject of United States Congressional debate as part of the federal budget negotiation, and we cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026. All of these factors, which could have a material unfavorable impact on our results of operations, may be expected to reduce our revenue and likely increase the level of uncompensated care provided by our facilities;

Previous wording

in our acute care segment, we have experienced a significant increase in hospital based physician related expenses, especially in the areas of emergency room care and anesthesiology. We have implemented various initiatives to mitigate the increased expense, to the degree possible, which has moderated the rate of increase. However, significant increases in these physician related expenses could have a material unfavorable impact on our future results of operations;

Current wording

in our acute care segment, we have experienced a significant increase in hospital based physician related expenses, especially in the areas of emergency room care, anesthesiology and radiology. We have implemented various initiatives to mitigate the increased expense, to the degree possible, which has moderated the rate of increase. However, significant increases in these physician related expenses could have a material unfavorable impact on our future results of operations;

Previous wording

the Full-Year Continuing Appropriations and Extensions Act, 2025 extended appropriations to federal agencies for continuing projects and activities through September 30, 2025. We cannot predict whether or not there will be future legislation averting a federal government shutdown, however, our operating cash flows and results of operations could be materially unfavorably impacted by a federal government shutdown;

Current wording

the Full-Year Continuing Appropriations and Extensions Act, 2025 extended appropriations to federal agencies for continuing projects and activities through September 30, 2025. In the past several years political disputes concerning authorization of a federal budget have led to shutdown of substantial portions of the federal government and other federal budget authorization delays have occurred. Currently, the United States Congress has failed to approve a federal budget for federal fiscal year 2026 and a federal shutdown began on October 1, 2025. Federal budget delays and federal government shutdowns are unpredictable and may occur in the future. We cannot predict whether or not there will be future legislation halting a federal government shutdown, however, our operating cash flows and results of operations could be materially unfavorably impacted by the federal government shutdown;

Previous wording

the outcome of known and unknown litigation, government investigations, inquiries, false claims act allegations, and liabilities and other claims asserted against us and other matters, and the effects of adverse publicity relating to such matters, including, but not limited to, the jury verdict returned against Cumberland Hospital for Children and Adolescents ("Cumberland"), an indirect subsidiary of ours, as disclosed in Note 6 to the Condensed Consolidated Financial Statements - Commitments and Contingencies. We can make no assurances regarding the ultimate financial exposure, timing, substance or outcome of the Cumberland matter (which related to occurrences in the 2020 policy year), or the amount of damages that may be ultimately held recoverable after post-judgment proceedings and appeals. As of June 30, 2025, without reduction for potential amounts related to the Cumberland matter, the Company and its subsidiaries have aggregate insurance coverage of approximately $147 million remaining under commercial policies for matters applicable to the 2020 policy year (in excess of the applicable self-insured retention amounts of $10 million per single occurrence/$25 million for multi-plaintiff matters for professional liability claims and $3 million per occurrence for general liability claims). In the event the resolution of the Cumberland matter exhausts all or a significant portion of the remaining commercial insurance coverage available to the Company and its subsidiaries related to other matters that occurred in 2020, or the Cumberland matter causes the posting of a large bond or other collateral during the appeal processes, our future results of operations and capital resources would be materially adversely impacted;

Current wording

the outcome of known and unknown litigation, government investigations, inquiries, false claims act allegations, and liabilities and other claims asserted against us and other matters, and the effects of adverse publicity relating to such matters, as disclosed in Note 6 to the Condensed Consolidated Financial Statements - Commitments and Contingencies, including, but not limited to, the jury verdict returned against Cumberland Hospital for Children and Adolescents located in New Kent, Virginia, an indirect subsidiary of ours, and the verdict in the Pinnacle litigation in Washoe County, Nevada, against certain subsidiaries of ours;

Previous wording

Legislation adopted on July 4, 2025 attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditures and the legislation also places limits on provider taxes used to increase federal Medicaid funding to states. In addition, insurance exchange subsidies are scheduled to expire later this year which could unfavorably impact insurance exchange enrollment. As these provisions become effective over the next several years, they may be expected to reduce our revenues and likely increase the level of uncompensated care provided by our facilities. Please see Sources of Revenue below for additional disclosure related to Medicaid supplemental payment programs in various states in which we operate.

Current wording

Legislation adopted on July 4, 2025 attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditures and the legislation also places limits on provider taxes used to increase federal Medicaid funding to states. In addition, insurance exchange subsidies are scheduled to expire later this year which could unfavorably impact insurance exchange enrollment. Extension of these subsidies is currently the subject of Congressional debate as part of the federal budget negotiation, and we cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026. As these provisions become effective over the next several years, they may be expected to reduce our revenues and likely increase the level of uncompensated care provided by our facilities. Please see Sources of Revenue below for additional disclosure related to Medicaid supplemental payment programs in various states in which we operate.

Previous wording

Net revenues increased by 9.6%, or $376 million, to $4.284 billion during the three-month period ended June 30, 2025, as compared to $3.908 billion during the second quarter of 2024. The net increase was primarily attributable to: (i) a $317 million, or 8.4%, increase in net revenues generated from our acute care hospital services and behavioral health services operated during both periods (which we refer to as “Same Facility”), and; (ii) an other combined net increase of $59 million, consisting primarily of $43 million of combined net revenues generated during the second quarter of 2025 at two newly constructed acute care hospitals located in Las Vegas, Nevada (West Henderson Hospital which opened during the fourth quarter of 2024), and Washington, D.C. (Cedar Hill Regional Medical Center which opened during the second quarter of 2025).

Current wording

Net revenues increased by 13.4%, or $532 million, to $4.495 billion during the three-month period ended September 30, 2025, as compared to $3.963 billion during the third quarter of 2024. The net increase was primarily attributable to: (i) a $431 million, or 11.3%, increase in net revenues generated from our acute care hospital services and behavioral health services operated during both periods (which we refer to as “Same Facility”), and; (ii) an other combined net increase of $101 million, consisting primarily of $58 million of combined net revenues generated during the third quarter of 2025 at two newly constructed acute care hospitals located in Las Vegas, Nevada (West Henderson Hospital which opened during the fourth quarter of 2024), and Washington, D.C. (Cedar Hill Regional Medical Center which opened during the second quarter of 2025). Included in the $431 million of increased net revenues, on a Same Facility basis, during the third quarter of 2025, as compared to the comparable quarter of 2024, was $90 million recorded during the third quarter of 2025 in connection with a recently approved Medicaid state directed payment program in Washington, D.C. covering the period of October 1, 2024 through September 30, 2025.

Previous wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $91 million, or 24%, to $473 million during the three-month period ended June 30, 2025 as compared to $382 million during the second quarter of 2024. The net increase was due to:

Current wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $155 million, or 46%, to $497 million during the three-month period ended September 30, 2025 as compared to $342 million during the third quarter of 2024. The net increase was due to:

Previous wording

an increase of $15 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Current wording

an increase of $99 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Previous wording

an increase of $37 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services;

Current wording

an increase of $28 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services;

Previous wording

an increase of $10 million from an increase in the market value of certain equity securities, and;

Current wording

an increase of $10 million from an increase in the market value of certain equity securities;

Previous wording

an increase of $26 million from a decrease in interest expense, as discussed below in Other Operating Results-Interest Expense;

Current wording

an increase of $6 million from a decrease in interest expense, as discussed below in Other Operating Results-Interest Expense, and;

Previous wording

Net income attributable to UHS increased by $64 million, or 22%, to $353 million during the three-month period ended June 30, 2025, as compared to $289 million during the second quarter of 2024. This increase was attributable to:

Current wording

Net income attributable to UHS increased by $114 million, or 44%, to $373 million during the three-month period ended September 30, 2025, as compared to $259 million during the third quarter of 2024. This increase was primarily attributable to:

Previous wording

a decrease of $23 million resulting from an increase in the provision for income taxes resulting primarily from: (i) the increase in the provision for income taxes resulting from the $87 million increase in pre-tax income, and; (ii) a $2 million increase in the provision for income taxes due to a decrease in the net benefit recorded in connection with "ASU 2016-09", Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting, net of the impact of executive compensation limitations pursuant to IRC section 162(m) ($0.8 million net benefit recorded during the second quarter of 2025 as compared to $2.5 million during the second quarter of 2024).

Current wording

a decrease of $42 million resulting from an increase in the provision for income taxes resulting primarily from: (i) the increase in the provision for income taxes resulting from the $155 million increase in income before income taxes, and; (ii) a $3 million increase in the provision for income taxes due to a decrease in the net benefit recorded in connection with "ASU 2016-09", Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting, net of the impact of executive compensation limitations pursuant to IRC section 162(m) ($0.6 million net benefit recorded during the third quarter of 2025 as compared to $3.9 million during the third quarter of 2024).

Previous wording

Financial results for the six-month periods ended June 30, 2025 and 2024:

Current wording

Financial results for the nine-month periods ended September 30, 2025 and 2024:

Previous wording

The following table summarizes our results of operations and is used in the discussion below for the six-month periods ended June 30, 2025 and 2024 (dollar amounts in thousands):

Current wording

The following table summarizes our results of operations and is used in the discussion below for the nine-month periods ended September 30, 2025 and 2024 (dollar amounts in thousands):

Previous wording

Net revenues increased by 8.2%, or $632 million, to $8.384 billion during the six-month period ended June 30, 2025, as compared to $7.751 billion during the first six months of 2024. The net increase was primarily attributable to: (i) a $542 million, or 7.2%, increase in net revenues generated from our acute care hospital services and behavioral health services, on a Same Facility basis, and; (ii) an other combined net increase of $90 million consisting primarily of $70 million of combined net revenues generated during the first six months of 2025 at two newly constructed and recently opened acute care hospitals, as mentioned above.

Current wording

Net revenues increased by 9.9%, or $1.165 billion, to $12.879 billion during the nine-month period ended September 30, 2025, as compared to $11.714 billion during the first nine months of 2024. The net increase was primarily attributable to: (i) a $974 million, or 8.6%, increase in net revenues generated from our acute care hospital services and behavioral health services, on a Same Facility basis, and; (ii) an other combined net increase of $191 million consisting primarily of $128 million of combined net revenues generated during the first nine months of 2025 at two newly constructed and recently opened acute care hospitals, as mentioned above.

Previous wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $176 million, or 25%, to $894 million during the six-month period ended June 30, 2025 as compared to $718 million during the first six months of 2024. The net increase was due to:

Current wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $331 million, or 31%, to $1.391 billion during the nine-month period ended September 30, 2025 as compared to $1.060 billion during the first nine months of 2024. The net increase was due to:

Previous wording

an increase of $70 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Current wording

an increase of $169 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Previous wording

an increase of $54 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services;

Current wording

an increase of $82 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services;

Previous wording

an increase of $14 million from a decrease in interest expense, as discussed below in Other Operating Results-Interest Expense;

Current wording

an increase of $33 million from a decrease in interest expense, as discussed below in Other Operating Results-Interest Expense;

Previous wording

an increase of $14 million from an increase in the market value of certain equity securities, and;

Current wording

an increase of $20 million from an increase in the market value of certain equity securities, and;

Previous wording

$16 million of other combined net increases.

Current wording

$27 million of other combined net increases.

Previous wording

Net income attributable to UHS increased by $119 million, or 22%, to $670 million during the six-month period ended June 30, 2025, as compared to $551 million during the first six months of 2024. This increase was attributable to:

Current wording

Net income attributable to UHS increased by $233 million, or 29%, to $1.043 billion during the nine-month period ended September 30, 2025, as compared to $810 million during the first nine months of 2024. This increase was primarily attributable to:

Previous wording

There were no adjustments recorded to our reserves for self-insured professional and general liability claims during the first six months of 2025. As a result of unfavorable trends experienced, included in our results of operations were increases to our reserves for self-insured professional and general liability claims amounting to approximately $7 million and $14 million during the three and six-month periods ended June 30, 2024, respectively. Approximately $5 million and $10 million of the increase is included in our same facility basis acute care hospital services' results during the three and six-month periods ended June 30, 2024, respectively, and approximately $2 million and $4 million is included in our same facility basis behavioral health services' results during the three and six-month periods ended June 30, 2024, respectively.

Current wording

As a result of unfavorable trends experienced, included in our results of operations were increases to our reserves for self-insured professional and general liability claims amounting to $35 million during each of the three and nine-month periods ended September 30, 2025, and $30 million and $44 million during the three and nine-month periods ended September 30, 2024, respectively. Approximately $22 million of the increase is included in our same facility basis acute care hospital services' results during each of the three and nine-month periods ended September 30, 2025, respectively, and approximately $13 million is included in our same facility basis behavioral health services' results during each of the three and nine-month periods ended September 30, 2025, respectively. Approximately $23 million and $33 million of the increase is included in our same facility basis acute care hospital services' results during the three and nine-month periods ended September 30, 2024, respectively, and approximately $7 million and $11 million is included in our same facility basis behavioral health services' results during the three and nine-month periods ended September 30, 2024, respectively.

Previous wording

The following table sets forth certain operating statistics for our acute care hospital services for the three and six-month periods ended June 30, 2025 and 2024.

Current wording

The following table sets forth certain operating statistics for our acute care hospital services for the three and nine-month periods ended September 30, 2025 and 2024.

Previous wording

The following table summarizes the results of operations for our acute care facilities on a Same Facility basis and is used in the discussion below for the three and six-month periods ended June 30, 2025 and 2024 (dollar amounts in thousands):

Current wording

The following table summarizes the results of operations for our acute care facilities on a Same Facility basis and is used in the discussion below for the three and nine-month periods ended September 30, 2025 and 2024 (dollar amounts in thousands):

Previous wording

During the three-month period ended June 30, 2025, net revenue per adjusted admission increased by 3.8% while net revenue per adjusted patient day increased 4.7%, as compared to the comparable quarter of 2024. During the three-month period ended June 30, 2025, as compared to the comparable prior year quarter, inpatient admissions to our acute care hospitals increased by 2.2% while adjusted admissions (adjusted for outpatient activity) increased by 2.0%. Patient days at these facilities increased by 1.3% and adjusted patient days increased by 1.1% during the three-month period ended June 30, 2025, as compared to the comparable prior year quarter. The average length of inpatient stay at these facilities was 4.7 days and 4.8 days during the three-month periods ended June 30, 2025 and 2024, respectively. The occupancy rate, based on the average available beds at these facilities, was 66% during each of the three-month periods ended June 30, 2025 and 2024, respectively.

Current wording

During the three-month period ended September 30, 2025, net revenue per adjusted admission increased by 9.8% while net revenue per adjusted patient day increased 11.5%, as compared to the comparable quarter of 2024. During the three-month period ended September 30, 2025, as compared to the comparable prior year quarter, inpatient admissions to our acute care hospitals increased by 1.5% while adjusted admissions (adjusted for outpatient activity) increased by 2.0%. Patient days at these facilities decreased by 0.1% and adjusted patient days increased by 0.4% during the three-month period ended September 30, 2025, as compared to the comparable prior year quarter. The average length of inpatient stay at these facilities was 4.8 days during each of the three-month periods ended September 30, 2025 and 2024, respectively. The occupancy rate, based on the average available beds at these facilities, was 65% and 66% during the three-month periods ended September 30, 2025 and 2024, respectively.

Previous wording

On a Same Facility basis, during the three-month period ended June 30, 2025, as compared to the comparable quarter of 2024, salaries, wages and benefits expense increased by $47 million, or 5.5%. Contributing to the increase in salaries, wages and benefits was an increase in our patient volumes during the second quarter of 2025 as compared to the comparable quarter of 2024. As a percentage of net revenues, salaries, wages and benefits expense decreased to 39.9% during the second quarter of 2025 as compared to 40.8% during the second quarter of 2024.

Current wording

On a Same Facility basis, during the three-month period ended September 30, 2025, as compared to the comparable quarter of 2024, salaries, wages and benefits expense increased by $41 million, or 4.6%. Contributing to the increase in salaries, wages and benefits was an increase in our patient volumes during the third quarter of 2025 as compared to the comparable quarter of 2024. As a percentage of net revenues, salaries, wages and benefits expense decreased to 38.6% during the third quarter of 2025 as compared to 41.7% during the third quarter of 2024.

Previous wording

Other operating expenses increased by $67 million, or 11.5%, during the second quarter of 2025, as compared to the comparable quarter of 2025. Operating expenses incurred by our commercial health insurer, consisting primarily of medical costs, increased by $52 million, or 43.5% (due to a corresponding increase in membership), during the second quarter of 2025, as compared to the comparable quarter of 2024. Excluding the operating costs of our commercial insurer from each period, other operating expenses increased by $14 million, or 3.1%. As a percentage of net revenues, other operating expenses increased to 28.5% during the second quarter of 2025, as compared to 27.6% during the comparable quarter of 2024.

Current wording

Other operating expenses increased by $95 million, or 15.8%, during the third quarter of 2025, as compared to the comparable quarter of 2025. Operating expenses incurred by our commercial health insurer, consisting primarily of medical costs, increased by $45 million, or 35.8% (due to a corresponding increase in membership), during the third quarter of 2025, as compared to the comparable quarter of 2024. Excluding the operating costs of our commercial insurer from each period, other operating expenses increased by $49 million, or 10.4%. Contributing to the increased operating expenses during the third quarter of 2025, as compared to the comparable quarter of 2024, was a $21 million, or 13.3%, aggregate increase in physician expenses incurred at certain hospitals. As a percentage of net revenues, other operating expenses increased to 28.6% during the third quarter of 2025, as compared to 27.8% during the comparable quarter of 2024.

Previous wording

Supplies expense increased by $20 million, or 6.1%, during the second quarter of 2025, as compared to the second quarter of 2024, due, in part, to an increase in patient volumes. As a percentage of net revenues, supplies expense decreased to 15.5% during the three-month period ended June 30, 2025, as compared to 15.8% during the second quarter of 2024.

Current wording

Supplies expense increased by $12 million, or 3.5%, during the third quarter of 2025, as compared to the third quarter of 2024, due, in part, to an increase in patient volumes. As a percentage of net revenues, supplies expense decreased to 14.2% during the three-month period ended September 30, 2025, as compared to 15.4% during the third quarter of 2024.

Previous wording

During the six-month period ended June 30, 2025, net revenue per adjusted admission increased by 3.2% while net revenue per adjusted patient day increased 4.7%, as compared to the comparable period of 2024. During the six-month period ended June 30, 2025, as compared to the comparable prior year period, inpatient admissions to our acute care hospitals increased by 2.1% while adjusted admissions increased by 2.2%. Patient days at these facilities increased by 0.5% and adjusted patient days increased by 0.7% during the six-month period ended June 30, 2025, as compared to the comparable prior year period. The average length of inpatient stay at these facilities was 4.8 days and 4.9 days during the six-month periods ended June 30, 2025 and 2024, respectively. The occupancy rate, based on the average available beds at these facilities, was 68% during each of the six-month periods ended June 30, 2025 and 2024, respectively.

Current wording

During the nine-month period ended September 30, 2025, net revenue per adjusted admission increased by 5.4% while net revenue per adjusted patient day increased 7.0%, as compared to the comparable period of 2024. During the nine-month period ended September 30, 2025, as compared to the comparable prior year period, inpatient admissions to our acute care hospitals increased by 1.9% while adjusted admissions increased by 2.1%. Patient days at these facilities increased by 0.3% and adjusted patient days increased by 0.6% during the nine-month period ended September 30, 2025, as compared to the comparable prior year period. The average length of inpatient stay at these facilities was 4.8 days and 4.9 days during the nine-month periods ended September 30, 2025 and 2024, respectively. The occupancy rate, based on the average available beds at these facilities, was 67% during each of the nine-month periods ended September 30, 2025 and 2024.

Previous wording

On a Same Facility basis, during the six-month period ended June 30, 2025, as compared to the comparable period of 2024, salaries, wages and benefits expense increased by $80 million, or 4.7%. As a percentage of net revenues, salaries, wages and benefits expense decreased to 39.9% during the first six months of 2025 as compared to 40.8% during the first six months of 2024.

Current wording

On a Same Facility basis, during the nine-month period ended September 30, 2025, as compared to the comparable period of 2024, salaries, wages and benefits expense increased by $122 million, or 4.7%. Contributing to the increase in salaries, wages and benefits was an increase in our patient volumes during the first nine months of 2025 as compared to the comparable period of 2024. As a percentage of net revenues, salaries, wages and benefits expense decreased to 39.4% during the first nine months of 2025 as compared to 41.1% during the first nine months of 2024.

Previous wording

Other operating expenses increased by $119 million, or 10.3%, during the first six months of 2025, as compared to the comparable period of 2025. Operating expenses incurred by our commercial health insurer, consisting primarily of medical costs, increased by $93 million, or 38.1% (due to a corresponding increase in membership), during the first six months of 2025, as compared to the comparable period of 2024. Excluding the operating costs of our commercial insurer from each period, other operating expenses increased by $26 million, or 2.9%. As a percentage of net revenues, other operating expenses increased to 28.3% during the first six months of 2025, as compared to 27.5% during the comparable period of 2024.

Current wording

Other operating expenses increased by $214 million, or 12.2%, during the first nine months of 2025 as compared to the comparable period of 2025. Operating expenses incurred by our commercial health insurer, consisting primarily of medical costs, increased by $138 million, or 37.3% (due to a corresponding increase in membership), during the first nine months of 2025 as compared to the comparable period of 2024. Excluding the operating costs of our commercial insurer from each period, other operating expenses increased by $76 million, or 5.4%. As a percentage of net revenues, other operating expenses increased to 28.4% during the first nine months of 2025 as compared to 27.6% during the comparable period of 2024.

Previous wording

The following table summarizes the results of operations for all our acute care operations during the three and six-month periods ended June 30, 2025 and 2024. These amounts include: (i) our acute care results on a Same Facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including the results of recently acquired and/or opened facilities and businesses. Dollar amounts below are reflected in thousands.

Current wording

The following table summarizes the results of operations for all our acute care operations during the three and nine-month periods ended September 30, 2025 and 2024. These amounts include: (i) our acute care results on a Same Facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including the results of recently acquired and/or opened facilities and businesses. Dollar amounts below are reflected in thousands.

Previous wording

During the three-month period ended June 30, 2025, as compared to the comparable prior year quarter, net revenues from our acute care hospital services increased by $222 million, or 10.2%, due to: (i) the $167 million, or 7.9% increase in Same Facility revenues, as discussed above, and; (ii) an other combined net increase of $55 million consisting primarily of $43 million of combined net revenues generated during the second quarter of 2025 at two newly constructed and recently opened acute care hospitals, as mentioned above.

Current wording

During the three-month period ended September 30, 2025, as compared to the comparable prior year quarter, net revenues from our acute care hospital services increased by $376 million, or 16.7%, due to: (i) the $277 million, or 12.8% increase in Same Facility revenues, as discussed above, and; (ii) an other combined net increase of $99 million consisting primarily of $58 million of combined net revenues generated during the third quarter of 2025 at two newly constructed and recently opened acute care hospitals, as mentioned above, and a $40 million increase in provider tax assessments (which had no impact on income before income taxes since the amounts offset between net revenues and other operating expenses).