AdaptHealth Corp.

Previous wording

The following discussion should be read in conjunction with AdaptHealth Corp.’s (“AdaptHealth” or the “Company”) consolidated financial statements and the accompanying notes included in this report. All amounts presented are in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), except as noted. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences include, but are not limited to, those discussed in Item 1A, “Risk Factors”, in our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026. Certain amounts that appear in this section may not sum due to rounding.

Current wording

The following discussion should be read in conjunction with AdaptHealth Corp.’s (“AdaptHealth” or the “Company”) consolidated financial statements and the accompanying notes included in this report. All amounts presented are in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), except as noted. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences include, but are not limited to, those discussed in Item 1A, “Risk Factors”, in our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026 and in our Quarterly Report on Form 10-Q for the three months ended March 31, 2026 filed with the SEC on May 5, 2026. Certain amounts that appear in this section may not sum due to rounding.

Previous wording

AdaptHealth is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment ("HME"), medical supplies, and related services. The Company operates under four reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, (iii) Diabetes Health, and (iv) Wellness at Home. A description of the products and services provided within each of the Company’s four reportable segments is provided below.

Current wording

AdaptHealth is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment ("HME"), medical supplies, and related services. The Company operates under three reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, and (iii) Wellness at Home. A description of the products and services provided within each of the Company’s three reportable segments is provided below.

Previous wording

The Company services beneficiaries of Medicare, Medicaid and commercial insurance payors. As of March 31, 2026, AdaptHealth serviced approximately 4.5 million patients annually in all 50 states through its network of approximately 670 locations in 48 states. The Company’s principal executive offices are located at 555 East North Lane, Suite 5075, Conshohocken, Pennsylvania 19428.

Current wording

The Company services beneficiaries of Medicare, Medicaid and commercial insurance payors. As of June 30, 2026, AdaptHealth serviced approximately 4.8 million patients annually in all 50 states through its network of approximately 670 locations in 48 states. The Company’s principal executive offices are located at 555 East North Lane, Suite 5075, Conshohocken, Pennsylvania 19428.

Previous wording

The Diabetes Health segment provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes.

Current wording

In June 2026, the Company's board of directors approved the divestiture of the Company's Diabetes Health business. In July 2026, the Company entered into an agreement to sell the Diabetes Health business for $235.0 million in cash, subject to customary purchase price adjustments. The transaction is expected to close in the first quarter of 2027, subject to regulatory review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The Diabetes Health business provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes. As a result of this transaction, the Diabetes Health business met the criteria to be reported as discontinued operations. Therefore, the Company has reported the results of the Diabetes Health business, including the results of operations, and related assets and liabilities, as discontinued operations for all periods presented herein. Accordingly, the Company no longer reports Diabetes Health as a reportable segment.

Previous wording

AdaptHealth’s business experiences some seasonality. Its patients are generally responsible for a greater percentage of the cost of their treatment or therapy during the early months of the year due to co-insurance, co-payments and deductibles, and therefore may defer treatment and services of certain therapies until meeting their annual deductibles. In addition, changes to employer insurance coverage often go into effect at the beginning of each calendar year which may impact eligibility requirements and delay or defer treatment. Also, net revenue generated by AdaptHealth's Diabetes Health segment is typically higher in the fourth quarter compared to the earlier part of the year due to the timing of when patients meet their annual deductibles and their associated reordering patterns. These factors may lead to lower net revenue and cash flow in the early part of the year versus the latter half of the year. Additionally, the increased incidence of respiratory infections during the winter season may result in initiation of additional respiratory services such as oxygen therapy for certain patient populations, which could impact the timing of revenue generated by AdaptHealth's Respiratory Health segment. AdaptHealth’s quarterly operating results may fluctuate significantly in the future depending on these and other factors.

Current wording

AdaptHealth’s business experiences some seasonality. Its patients are generally responsible for a greater percentage of the cost of their treatment or therapy during the early months of the year due to co-insurance, co-payments and deductibles, and therefore may defer treatment and services of certain therapies until meeting their annual deductibles. In addition, changes to employer insurance coverage often go into effect at the beginning of each calendar year which may impact eligibility requirements and delay or defer treatment. These factors may lead to lower net revenue and cash flow in the early part of the year versus the latter half of the year. Additionally, the increased incidence of respiratory infections during the winter season may result in initiation of additional respiratory services such as oxygen therapy for certain patient populations, which could impact the timing of revenue generated by AdaptHealth's Respiratory Health segment. AdaptHealth’s quarterly operating results may fluctuate significantly in the future depending on these and other factors.

Previous wording

Net revenue from AdaptHealth's Sleep Health segment increased by $42.1 million, or 13.3%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to an increase in net revenue attributable to the capitated contract that was entered into in 2025. The increase was also attributable to increased net sales revenue primarily from higher patient census from sales of PAP resupply products, as well as increased net revenue from fixed monthly equipment reimbursements from higher sleep rental products. Net revenue from AdaptHealth's Respiratory Health segment increased by $12.7 million, or 7.6%, for the three months ended March 31, 2026 compared to the prior year period, mainly due to an increase in capitated revenue arrangements primarily related to the capitated contract that was entered into in 2025, as well as higher fixed monthly equipment reimbursements from higher patient census for oxygen equipment products. Net revenue from AdaptHealth's Diabetes Health segment increased by $3.3 million, or 2.4%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to higher net sales revenue as a result of growth in insulin pump and supplies patient census, offset by lower CGM patient census. Net revenue from AdaptHealth's Wellness at Home segment decreased by $16.2 million, or 10.3% for the three months ended March 31, 2026 compared to the prior year period, primarily due to decreased revenues from the disposition of certain incontinence and infusion businesses during 2025, partially offset by increased revenues from capitated revenue arrangements primarily related to the capitated contract that was entered into in 2025.

Current wording

Net revenue from AdaptHealth's Sleep Health segment increased by $51.8 million, or 15.5%, for the three months ended June 30, 2026 compared to the prior year period, primarily due to a capitated revenue contract that was entered into in the third quarter of 2025. The increase was also attributable to increased net sales revenue primarily from higher patient census from sales of PAP resupply products, as well as increased net revenue from fixed monthly equipment reimbursements from higher sleep rental products. Net revenue from AdaptHealth's Respiratory Health segment increased by $24.0 million, or 14.1%, for the three months ended June 30, 2026 compared to the prior year period, primarily due to a capitated revenue contract that was entered into in the third quarter of 2025, and to a lesser extent, higher fixed monthly equipment reimbursements from higher patient census for oxygen equipment products. Net revenue from AdaptHealth's Wellness at Home segment increased by $7.5 million, or 4.9% for the three months ended June 30, 2026 compared to the prior year period, primarily due to a capitated revenue contract that was entered into in the third quarter of 2025, and to a lesser extent, higher fixed monthly equipment reimbursements, partially offset by decreased net sales revenues from the disposition of certain incontinence and infusion businesses during 2025.

Previous wording

For the three months ended March 31, 2026, net sales revenue compr ised 57.6% of total net revenue, compared to 63.7% of total net revenue for the three months ended March 31, 2025. For the three months ended March 31, 2026 and March 31, 2025, net revenue from fixed monthly equipment reimbursements comprised 33.2% and 32.1%, respectively, of total net revenue. For the three months ended March 31, 2026, net revenue from capitated revenue arrangements comprised 9.2% of total net revenue, compared to 4.2% of total net revenue for the three months ended March 31, 2025.

Current wording

For the three months ended June 30, 2026, net sales revenue comprised 48.4% of total net revenue, compared to 55.5% of total net revenue for the three months ended June 30, 2025. For the three months ended June 30, 2026, net revenue from fixed monthly equipment reimbursements comprised 37.7% of total net revenue, compared to 39.8% of total net revenue for the three months ended June 30, 2025. For the three months ended June 30, 2026, net revenue from capitated revenue arrangements comprised 13.9% of total net revenue, compared to 4.7% of total net revenue for the three months ended June 30, 2025.

Previous wording

General and Administrative Expenses. General and administrative expenses for the three months ended March 31, 2026 and 2025 were $95.9 million and $86.9 million respectively, an increase of $9.1 million or 10.4%. This increase is primarily due to higher salaries, labor and benefits, software costs, insurance-related costs, and equity-based compensation, partially offset by lower consulting costs.

Current wording

General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2026 and 2025 were $96.1 million and $95.3 million respectively, an increase of $0.8 million or 0.9%. This increase is primarily due to higher software costs, restructuring expenses, insurance-related costs, salaries, labor and benefits, and equity-based compensation, partially offset by lower consulting costs, legal fees, and marketing fees.

Previous wording

Depreciation and amortization, excluding patient equipment depreciation. Depreciation and amortization, excluding patient equipment depreciation, for the three months ended March 31, 2026 and 2025 was $10.1 million and $10.4 million, respectively, a decrease of $0.3 million, primarily related to lower intangible amortization expense.

Current wording

Depreciation and amortization, excluding patient equipment depreciation. Depreciation and amortization, excluding patient equipment depreciation, for the three months ended June 30, 2026 and 2025 was $7.9 million and $7.1 million, respectively, an increase of $0.9 million, primarily related to higher depreciation attributable to delivery vehicles.

Previous wording

Cost of net revenue for the three months ended March 31, 2026 and 2025 was $708.3 million and $657.4 million, respectively, an increase of $50.9 million or 7.7%. Refer to the section below titled “Segment Results of Operations” for a discussion of the changes in cost of products and supplies, salaries, labor and benefits, and rent and other operating expenses. Patient equipment depreciation increased by $12.4 million, due to an increase in patient medical equipment acquired during the three months ended March 31, 2026 primarily to support capitated revenue arrangements.

Current wording

Cost of net revenue for the six months ended June 30, 2026 and 2025 was $1,220.3 million and $1,060.3 million, respectively, an increase of $160.1 million or 15.1%. Refer to the section below titled “Segment Results of Operations” for a discussion of the changes in cost of products and supplies, salaries, labor and benefits, rent and occupancy, and other operating expenses. Patient equipment depreciation increased by $39.0 million, primarily due to an increase in patient medical equipment acquired during 2026 to support capitated revenue arrangements.

Previous wording

Interest Expense, net. Interest expense, net for the three months ended March 31, 2026 and 2025 was $25.6 million and $28.4 million, respectively, a decrease of $2.8 million. Interest expense related to AdaptHealth's credit agreement decreased by $3.4 million in 2026 compared to 2025 as a result of lower average outstanding borrowings in 2026 compared to 2025, and to a lesser extent, lower interest rates. This decrease was partially offset by the impact from AdaptHealth's interest rate swap agreements, which reduced interest expense by $0.1 million and $0.9 million in 2026 and 2025, respectively.

Current wording

Interest expense, net. Interest expense, net for the six months ended June 30, 2026 and 2025 was $51.8 million and $55.9 million, respectively, a decrease of $4.1 million. Interest expense related to AdaptHealth's debt decreased by $5.1 million in 2026 compared to 2025 as a result of lower average outstanding borrowings in 2026 compared to 2025, and to a lesser extent, lower interest rates. This decrease was partially offset by the impact from AdaptHealth's interest rate swap agreements, which reduced interest expense by $0.1 million and $1.8 million in 2026 and 2025, respectively.

Previous wording

AdaptHealth defines EBITDA as net income (loss) attributable to AdaptHealth Corp., plus net income (loss) attributable to noncontrolling interests, interest expense, net, income tax expense (benefit), and depreciation and amortization, including patient equipment depreciation.

Current wording

AdaptHealth defines EBITDA as net income (loss) from continuing operations, plus interest expense, net, income tax expense (benefit), and depreciation and amortization, including patient equipment depreciation.

Previous wording

AdaptHealth defines Adjusted EBITDA as EBITDA (as defined above), plus equity-based compensation expense, litigation settlement expense, and other non-recurring items of expense or income.

Current wording

AdaptHealth defines Adjusted EBITDA as EBITDA (as defined above), plus equity-based compensation expense, litigation settlement expense, gain on sale of businesses, restructuring expenses, loss on extinguishment of debt, goodwill impairment, and other non-recurring items of expense or income.

Previous wording

The following unaudited table presents the reconciliation of net loss attributable to AdaptHealth Corp. to EBITDA and Adjusted EBITDA, and the reconciliation of net loss attributable to AdaptHealth Corp. as a percentage of net revenue to Adjusted EBITDA Margin, for the three months ended March 31, 2026 and 2025:

Current wording

The following unaudited table presents the reconciliation of net income (loss) from continuing operations to EBITDA and Adjusted EBITDA, and the reconciliation of net income (loss) from continuing operations as a percentage of net revenue to Adjusted EBITDA Margin, for the three months ended June 30, 2026 and 2025:

Previous wording

(c)The 2026 period consists of $1.6 million of consulting expenses associated with asset dispositions and $0.9 million of transaction costs associated with acquisitions, partially offset by $0.3 million of other net non-recurring income. The 2025 period consists of $2.3 million of consulting expenses associated with asset dispositions, $1.6 million of consulting expenses associated with systems implementation activities, and $1.2 million of other non-recurring expenses.

Current wording

(g)The 2026 period consists of $4.3 million of consulting expenses associated with asset dispositions, $2.2 million of transaction costs associated with acquisitions, and $1.3 million of other non-recurring expenses. The 2025 period consists of $9.2 million of consulting expenses associated with asset dispositions (of which $5.1 million relates to contingent success fees from the sales of businesses), $2.0 million of consulting expenses associated with systems implementation activities, $1.1 million of transaction costs associated with acquisitions, and $2.8 million of other non-recurring expenses.

Previous wording

Operating segments are defined as components of a public entity for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and evaluating financial performance. AdaptHealth’s CODM is its Chief Executive Officer. AdaptHealth operates under four reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, (iii) Diabetes Health, and (iv) Wellness at Home.

Current wording

Operating segments are defined as components of a public entity for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and evaluating financial performance. AdaptHealth’s CODM is its Chief Executive Officer. AdaptHealth operates under three reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, and (iii) Wellness at Home.

Previous wording

(a) See Note 5, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three months ended March 31, 2026 and 2025 for a reconciliation of consolidated Adjusted EBITDA to consolidated loss before income taxes.

Current wording

(a) See Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and six months ended June 30, 2026 and 2025 for a reconciliation of consolidated Adjusted EBITDA to consolidated (loss) income from continuing operations before income taxes.

Previous wording

(1) Represents the significant segment expense categories disclosed in Note 5, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three months ended March 31, 2026 and 2025.

Current wording

(1) Represents the significant segment expense categories disclosed in Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and six months ended June 30, 2026 and 2025.

Previous wording

Adjusted EBITDA from the Sleep Health segment decreased slightly by $0.9 million or 1.5%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to higher net revenue (as discussed above), offset by increased costs and expenses. The increase in the cost of products and supplies was primarily due to an increase in sales revenue and general inflationary cost increases. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue agreement entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses, facilities costs and marketing and advertising costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.

Current wording

Adjusted EBITDA from the Sleep Health segment decreased by $3.4 million or 4.6%, for the three months ended June 30, 2026 compared to the prior year period, primarily due to increased costs and expenses, partially offset by higher net revenue (as discussed above). The increase in the cost of products and supplies was primarily due to an increase in sales revenue and general inflationary cost increases. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue agreement entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses, facilities costs and marketing and advertising costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.

Previous wording

Adjusted EBITDA from the Wellness at Home segment decreased by $8.1 million or 65.3%, for the three months ended March 31, 2026 compared to the prior year period, due to lower net revenue (as discussed above), partially offset by lower costs and expenses. The decrease in the cost of products and supplies was primarily due to the disposition of certain incontinence and infusion businesses during 2025, partially offset by an increase in costs from a capitated revenue agreement entered into in the third quarter of 2025. The increase in labor cost was primarily due to increased headcount to support a capitated revenue agreement entered into in the third quarter of 2025, partially offset by a reduction in labor cost due to the disposition of certain incontinence and infusion businesses during 2025.

Current wording

Adjusted EBITDA from the Wellness at Home segment decreased by $8.8 million or 50.4%, for the three months ended June 30, 2026 compared to the prior year period, due to higher costs and expenses, partially offset by higher net revenue (as discussed above). The increase in the cost of products and supplies was primarily due to an increase in costs from a capitated revenue contract entered into in the third quarter of 2025, partially offset by the disposition of certain incontinence and infusion businesses during 2025. The increase in labor cost was primarily due to increased headcount to support a capitated revenue agreement entered into in the third quarter of 2025, and to a lesser extent, increased merits and benefits costs, partially offset by a reduction in labor cost due to the disposition of certain incontinence and infusion businesses during 2025. The increase in other operating expenses was primarily due to higher distribution-related expenses, facilities costs and marketing and advertising costs.

Previous wording

Adjusted EBITDA from the Diabetes Health segment decreased by $2.2 million or 35.2%, for the three months ended March 31, 2026 compared to the prior year period, due to increased costs and expenses, partially offset by higher net revenue (as discussed above). The increase in the cost of products and supplies was primarily due to growth in patient census for insulin pumps and supplies, and general inflationary cost increases, partially offset by lower CGM patient census. The increase in labor cost was primarily due to merit and inflationary increases, and increased benefits costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.

Current wording

Adjusted EBITDA from the Sleep Health segment decreased by $6.0 million or 4.5%, for thesix months ended June 30, 2026 compared to the prior year period, primarily due to increased costs and expenses, partially offset by higher net revenue (as discussed above). The increase in the cost of products and supplies was primarily due to an increase in sales revenue, higher fixed monthly equipment reimbursements, and general inflationary cost increases. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue contract entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses, facilities costs and marketing and advertising costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.

Previous wording

Adjusted EBITDA from the Respiratory Health segment increased by $4.6 million or 10.0%, for the three months ended March 31, 2026 compared to the prior year period, due to higher net revenue (as discussed above), partially offset by increased costs and expenses. The increase in cost of products and supplies was primarily due to higher patient census for oxygen equipment products and general inflationary cost increases. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue agreement entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses, facilities costs and marketing and advertising costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.

Current wording

Adjusted EBITDA from the Respiratory Health segment increased by $11.8 million or 13.5%, for thesix months ended June 30, 2026 compared to the prior year period, due to higher net revenue (as discussed above), partially offset by increased costs and expenses. The increase in cost of products and supplies was primarily due to higher patient census for oxygen equipment products and general inflationary cost increases. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue contract entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses, facilities costs and marketing and advertising costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.

Previous wording

Net revenue from the Wellness at Home segment decreased by $16.2 million, or 10.3%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to decreased revenues from the disposition of certain incontinence and infusion businesses during 2025, which combined reduced net revenue by $35.8 million, partially offset by an increase in net revenue from capitated revenue arrangements as a result of an agreement entered into in the third quarter of 2025.

Current wording

Net revenue from the Wellness at Home segment decreased by $12.0 million, or 3.8%, for the six months ended June 30, 2026 compared to the prior year period, primarily due to decreased net sales revenues from the disposition of certain incontinence and infusion businesses during 2025, which combined reduced net revenue by $61.9 million, partially offset by an increase in net revenues from a capitated revenue contract that was entered into in the third quarter of 2025, and to a lesser extent, higher fixed monthly equipment reimbursements.

Previous wording

As of March 31, 2026, AdaptHealth had $48.0 million of cash.

Current wording

As of June 30, 2026, AdaptHealth had $43.3 million of cash.

Previous wording

On April 10, 2026, AdaptHealth refinanced its debt borrowings under the 2024 Credit Agreement and entered into a new credit agreement (the "2026 Credit Agreement"). The 2026 Credit Agreement consists of a $325.0 million term loan (the "2026 Term Loan"), a $325.0 million delayed draw term loan (the "2026 Delayed Draw Term Loan"), and $450.0 million in commitments for revolving credit loans with a $75.0 million letter of credit sublimit and a $45.0 million swing line sublimit (the "2026 Revolver", and together with the 2026 Term Loan and the 2026 Delayed Draw Term Loan, the "2026 Credit Facility"). At closing, the Company borrowed $100.0 million under the 2026 Revolver. Borrowings under the 2026 Term Loan and the 2026 Revolver at closing were used in part to repay existing amounts outstanding under the 2024 Credit Agreement, and to pay related fees and expenses. The 2026 Credit Facility has a maturity in April 2031. However, the maturity of the 2026 Credit Facility is subject to a springing maturity date that is 91 days prior to the stated maturity dates of the Company's 6.125% Senior Notes, 4.625% Senior Notes and 5.125% Senior Notes (each as defined below), in each case if more than $150.0 million aggregate principal amount of such senior unsecured notes remains outstanding on such springing maturity date. The borrowings under the 2026 Term Loan requires quarterly principal repayments of $2.0 million beginning September 30, 2026 through June 30, 2028, increasing to $4.1 million beginning September 30, 2028 through March 31, 2031, and the unpaid principal balance is due at maturity in April 2031. Borrowings under the 2026 Revolver may be used for working capital and other general corporate purposes, including for capital expenditures and acquisitions permitted under the 2026 Credit Agreement. As of the date of this filing, there were $100.0 million in borrowings under the 2026 Revolver. Borrowings under the 2026 Delayed Draw Term Loan may be used for refinancing the Company's outstanding 6.125% Senior Notes and/or funding acquisitions permitted under the 2026 Credit Agreement. At the option of the Company, amounts borrowed under the 2026 Credit Facility bear interest at variable rates based upon either the Base Rate (as defined in the 2026 Credit Agreement), payable quarterly, or Term SOFR (as defined in the 2026 Credit Agreement), payable monthly or every three months depending on the interest period selected. Interest periods for Term SOFR loans are available for one, three, or six months at the option of the Company. Base Rate loans accrue interest at a per annum rate equal to the sum of (a) the Base Rate determined on each day (subject to a zero percent floor), plus (b) an applicable margin ranging from 0.125% to 1.0% per annum based on the Company's Consolidated Total Leverage Ratio (as defined in the 2026 Credit Agreement). Term SOFR loans accrue interest at a per annum rate equal to the sum of (a) Term SOFR for the applicable interest perio…

Excerpt shortened here; the source contains the full paragraph.

Current wording

On April 10, 2026, AdaptHealth refinanced its debt borrowings under its then existing credit agreement and entered into a new credit agreement (the "2026 Credit Agreement"). The 2026 Credit Agreement consists of a $325.0 million term loan (the "2026 Term Loan"), a $325.0 million delayed draw term loan (the "2026 Delayed Draw Term Loan"), and $450.0 million in commitments for revolving credit loans with a $75.0 million letter of credit sublimit and a $45.0 million swing line sublimit (the "2026 Revolver", and together with the 2026 Term Loan and the 2026 Delayed Draw Term Loan, the "2026 Credit Facility"). At closing, the Company borrowed $100.0 million under the 2026 Revolver. Borrowings under the 2026 Term Loan and the 2026 Revolver at closing were used in part to repay existing amounts outstanding under its prior credit agreement, and to pay related fees and expenses. The 2026 Credit Facility has a maturity in April 2031. However, the maturity of the 2026 Credit Facility is subject to a springing maturity date that is 91 days prior to the stated maturity dates of the Company's 4.625% Senior Notes and 5.125% Senior Notes (each as defined below), in each case if more than $150.0 million aggregate principal amount of such senior unsecured notes remains outstanding on such springing maturity date. The borrowings under the 2026 Term Loan requires quarterly principal repayments of $2.0 million beginning September 30, 2026 through June 30, 2028, increasing to $4.1 million beginning September 30, 2028 through March 31, 2031, and the unpaid principal balance is due at maturity in April 2031. Borrowings under the 2026 Revolver may be used for working capital and other general corporate purposes, including for capital expenditures and acquisitions permitted under the 2026 Credit Agreement. As of the date of this filing, there were $150.0 million in outstanding borrowings under the 2026 Revolver. At the option of the Company, amounts borrowed under the 2026 Credit Facility bear interest at variable rates based upon either the Base Rate (as defined in the 2026 Credit Agreement), payable quarterly, or Term SOFR (as defined in the 2026 Credit Agreement), payable monthly or every three months depending on the interest period selected. Interest periods for Term SOFR loans are available for one, three, or six months at the option of the Company. Base Rate loans accrue interest at a per annum rate equal to the sum of (a) the Base Rate determined on each day (subject to a zero percent floor), plus (b) an applicable margin ranging from 0.125% to 1.0% per annum based on the Company's Consolidated Total Leverage Ratio (as defined in the 2026 Credit Agreement). Term SOFR loans accrue interest at a per annum rate equal to the sum of (a) Term SOFR for the applicable interest period (subject to a zero percent floor), plus (b) an applicable margin ranging from 1.125% to 2.0% per annum based on the Company's Consolidated Total Leverage Ratio. The 2026 Revolver carries a co…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Under the 2024 Credit Agreement, AdaptHealth was subject to a number of restrictive covenants that, among other things, imposed operating and financial restrictions on AdaptHealth. Financial covenants included a Consolidated Total Leverage Ratio and a Consolidated Interest Coverage Ratio, both as defined in the 2024 Credit Agreement. The 2024 Credit Agreement also contained certain customary events of default, including, among other things, failure to make payments when due thereunder, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, and non-compliance with healthcare laws. AdaptHealth was in compliance with the applicable covenants in the 2024 Credit Agreement as of March 31, 2026.

Current wording

Under the 2026 Credit Agreement, AdaptHealth is subject to a number of restrictive covenants that, among other things, impose operating and financial restrictions on AdaptHealth. Financial covenants include a Consolidated Total Leverage Ratio and a Consolidated Interest Coverage Ratio, both as defined in the 2026 Credit Agreement. The 2026 Credit Agreement also contains certain customary events of default, including, among other things, failure to make payments when due thereunder, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, and non-compliance with healthcare laws. AdaptHealth was in compliance with the applicable covenants in the 2026 Credit Agreement as of June 30, 2026.

Previous wording

At March 31, 2026, AdaptHealth LLC had $1,425.0 million aggregate principal amount of unsecured senior notes outstanding. In August 2021, AdaptHealth issued $600.0 million aggregate principal amount of 5.125% senior unsecured notes (the “5.125% Senior Notes”). The 5.125% Senior Notes will mature on March 1, 2030. Interest on the 5.125% Senior Notes is payable on March 1st and September 1st of each year. The 5.125% Senior Notes are redeemable at AdaptHealth’s option, in whole or in part, and the redemption price for the 5.125% Senior Notes if redeemed during the 12 months beginning (i) March 1, 2026 is 101.281% and (ii) March 1, 2027 and thereafter is 100.000%, in each case together with accrued and unpaid interest. In addition, AdaptHealth may be required to make an offer to purchase the 5.125% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control.

Current wording

At June 30, 2026, AdaptHealth LLC had $1,425.0 million aggregate principal amount of unsecured senior notes outstanding. In August 2021, AdaptHealth issued $600.0 million aggregate principal amount of 5.125% senior unsecured notes (the “5.125% Senior Notes”). The 5.125% Senior Notes will mature on March 1, 2030. Interest on the 5.125% Senior Notes is payable on March 1st and September 1st of each year. The 5.125% Senior Notes are redeemable at AdaptHealth’s option, in whole or in part, and the redemption price for the 5.125% Senior Notes if redeemed during the 12 months beginning (i) March 1, 2026 is 101.281% and (ii) March 1, 2027 and thereafter is 100.000%, in each case together with accrued and unpaid interest. In addition, AdaptHealth may be required to make an offer to purchase the 5.125% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 5.125% Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 5.125% Senior Notes and the indenture on the terms and conditions set forth therein.

Previous wording

In January 2021, AdaptHealth issued $500.0 million aggregate principal amount of 4.625% senior unsecured notes (the “4.625% Senior Notes”). The 4.625% Senior Notes will mature on August 1, 2029. Interest on the 4.625% Senior Notes is payable on February 1st and August 1st of each year. The 4.625% Senior Notes are redeemable at AdaptHealth’s option, in whole or in part, and the redemption price for the 4.625% Senior Notes is 100.000%, in each case together with accrued and unpaid interest. In addition, AdaptHealth may be required to make an offer to purchase the 4.625% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control.

Current wording

In January 2021, AdaptHealth issued $500.0 million aggregate principal amount of 4.625% senior unsecured notes (the “4.625% Senior Notes”). The 4.625% Senior Notes will mature on August 1, 2029. Interest on the 4.625% Senior Notes is payable on February 1st and August 1st of each year. The 4.625% Senior Notes are redeemable at AdaptHealth’s option, in whole or in part, and the redemption price for the 4.625% Senior Notes is 100.000%, in each case together with accrued and unpaid interest. In addition, AdaptHealth may be required to make an offer to purchase the 4.625% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 4.625% Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 4.625% Senior Notes and the indenture on the terms and conditions set forth therein.

Previous wording

In July 2020, AdaptHealth issued $350.0 million aggregate principal amount of 6.125% senior unsecured notes (the “6.125% Senior Notes”). In November 2025 and January 2026, AdaptHealth repurchased $15.0 million and $10.0 million aggregate principal amount of the 6.125% Senior Notes at an average price of 100.253% and 100.800% of such principal amounts, respectively, through open market transactions. The outstanding balance under the 6.125% Senior Notes will mature on August 1, 2028. Interest on the 6.125% Senior Notes is payable on February 1st and August 1st of each year. The 6.125% Senior Notes are redeemable at AdaptHealth’s option, in whole or in part, and the redemption price for the 6.125% Senior Notes if redeemed during the 12 months beginning (i) August 1, 2025 is 101.021% and (ii) August 1, 2026 and thereafter is 100.000%, in each case together with accrued and unpaid interest. In addition, AdaptHealth may be required to make an offer to purchase the 6.125% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control.

Current wording

In July 2020, the Company issued $350.0 million aggregate principal amount of 6.125% senior unsecured notes (the "6.125% Senior Notes"). In November 2025 and January 2026, the Company repurchased $15.0 million and $10.0 million aggregate principal amount of the 6.125% Senior Notes at an average price of 100.253% and 100.800% of such principal amounts, respectively, through open market transactions. As of June 30, 2026, the outstanding balance under the 6.125% Senior Notes was scheduled to mature on August 1, 2028. Interest on the 6.125% Senior Notes was payable on February 1st and August 1st of each year. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 6.125% Senior Notes, pursuant to which each of the guarantors unconditionally guaranteed all of the Company’s obligations under the 6.125% Senior Notes and the indenture on the terms and conditions set forth therein. On July 6, 2026, the Company issued a notice of redemption for all of its outstanding 6.125% Senior Notes in an aggregate principal amount of $325.0 million at a redemption price equal to 100.000% of the aggregate principal amount of the 6.125% Senior Notes, plus accrued and unpaid interest to the redemption date (the "Redemption Price"). The redemption date was August 1, 2026. On July 27, 2026, the Company borrowed $325.0 million under the 2026 Delayed Draw Term Loan. The Company used the proceeds from the 2026 Delayed Draw Term Loan plus cash on hand to redeem the notes and pay the Redemption Price on August 3, 2026.

Previous wording

A $16.5 million income tax receivable is included in prepaid and other current assets in the accompanying consolidated balance sheets as of March 31, 2026. The majority of the Company’s income tax receivable relates to federal corporate income tax refunds, which are expected to be received later in 2026.

Current wording

A $17.4 million income tax receivable is included in prepaid and other current assets in the accompanying consolidated balance sheets as of June 30, 2026. The majority of the Company’s income tax receivable relates to federal corporate income tax refunds, which are expected to be received later in 2026.

Previous wording

AdaptHealth had negative working capital of $55.8 million as of March 31, 2026 and working capital of $16.5 million as of December 31, 2025. A significant portion of AdaptHealth’s current assets consists of accounts receivable from third-party payors that are responsible for payment for the products and services that AdaptHealth provides.

Current wording

As of June 30, 2026 and December 31, 2025, AdaptHealth had negative working capital for continuing operations of $79.3 million and $19.3 million, respectively. A significant portion of AdaptHealth’s current assets consists of accounts receivable from third-party payors that are responsible for payment for the products and services that AdaptHealth provides.

Previous wording

Cash Flow. The following table presents selected data from AdaptHealth’s consolidated statements of cash flows for the three months ended March 31, 2026 and 2025:

Current wording

Cash Flow. The following table presents selected data from AdaptHealth’s consolidated statements of cash flows, which includes the cash flows from continuing operations and discontinued operations, for the six months ended June 30, 2026 and 2025:

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2026 and 2025 was $93.7 million and $95.5 million, respectively, decrease of $1.8 million. The decrease was the result of an $8.8 million increase in net loss, a net increase of $13.2 million in non-cash charges, primarily from depreciation and amortization, equity-based compensation, and the reduction in the carrying amount of operating and finance lease right-of-use assets, partially offset by a decrease in deferred income taxes, and a net $6.2 million decrease resulting from the change in operating assets and liabilities, primarily from the change in accounts receivable, inventory and accounts payable and accrued expenses.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2026 and 2025 was $239.0 million and $257.5 million, respectively, decrease of $18.5 million. The decrease was the result of an $157.3 million increase in net loss, a net increase of $187.0 million in non-cash charges, primarily from goodwill impairment, depreciation and amortization, the reduction in the carrying amount of operating and finance lease right-of-use assets, and equity-based compensation, partially offset by a decrease in deferred income taxes, and a net $48.2 million decrease resulting from the change in operating assets and liabilities, primarily from the change in accounts receivable, inventory and accounts payable and accrued expenses.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 and 2025 was $204.5 million and $95.6 million, respectively. The use of funds in 2026 primarily consisted of $121.2 million for equipment and other fixed asset purchases, $84.7 million for business acquisitions, partially offset by $1.4 million of proceeds from the sale of assets. The use of funds for the 2025 period related to equipment and other fixed asset purchases.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 and 2025 was $407.2 million and $86.0 million, respectively. The use of funds in 2026 primarily consisted of $287.5 million for equipment and other fixed asset purchases, $127.4 million for business acquisitions, partially offset by $6.3 million received related to a contingent payment from the disposition of a business that occurred in 2025, and $1.4 million of proceeds from the sale of assets. The net use of funds for the 2025 period consisted of $184.3 million for equipment and other fixed asset purchases and $18.6 million for business acquisitions, partially offset by$115.7 million of proceeds from the sale of businesses

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2026 and 2025 was $52.6 million and $56.0 million, respectively. Net cash provided by financing activities for the 2026 period primarily consisted of borrowings on the 2024 Revolver of $100.0 million and proceeds of $0.5 million in connection with the employee stock purchase plan, partially offset by payments of $26.8 million in connection with the Company's liability relating to the TRA, repayments of $17.2 million on long-term debt and finance lease liabilities, payments of $2.4 million for tax withholdings associated with equity-based compensation, and a payment of $1.5 million for a distribution to the noncontrolling interest. Net cash used in financing activities for the 2025 period consisted of repayments of $28.2 million on long-term debt and finance lease liabilities, payments of $25.0 million in connection with the Company's liability relating to the TRA, a payment of $2.0 million for a distribution to the noncontrolling interest, and payments of $1.3 million for tax withholdings associated with equity-based compensation, offset by proceeds of $0.6 million in connection with the employee stock purchase plan.

Current wording

For the six months ended June 30, 2026 and 2025, net cash provided by financing activities was $105.3 million and net cash used in financing activities was $212.7 million, respectively. The net cash provided by financing activities for the 2026 period primarily consisted of borrowings on long-term debt and lines of credit of $575.0 million and proceeds of $1.0 million in connection with the employee stock purchase plan, partially offset by repayments of $433.1 million on long-term debt, lines of credit and finance lease liabilities, payments of $26.8 million in connection with the Company's liability relating to the TRA, payments of $5.0 million for debt financing costs, payments of $3.1 million for tax withholdings associated with equity-based compensation and stock option exercises, and payments of $2.3 million for distributions to the noncontrolling interest. Net cash used in financing activities for the 2025 period primarily consisted of repayments of $183.3 million on long-term debt and finance lease liabilities, payments of $25.0 million in connection with the Company's liability relating to the TRA, a payment of $2.6 million for a distribution to the noncontrolling interest, and payments of $2.1 million for tax withholdings associated with equity-based compensation, offset by proceeds of $0.6 million in connection with the employee stock purchase plan.

Previous wording

The following table reconciles net cash provided by operating activities to free cash flow for the three months ended March 31, 2026 and 2025:

Current wording

The following table reconciles net cash provided by operating activities to free cash flow, which includes the cash flows from continuing operations and discontinued operations, for the three and six months ended June 30, 2026 and 2025:

Previous wording

Free cash flow was negative $27.5 million and negative $0.1 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in free cash flow was primarily due to an increase in purchases of patient medical equipment during the three months ended March 31, 2026 primarily to support capitated revenue arrangements.

Current wording

Free cash flow was negative $20.9 million for the three months ended June 30, 2026 compared to $73.3 million for the three months ended June 30, 2025. The decrease in free cash flow was due to an increase in purchases of patient medical equipment during the three months ended June 30, 2026 primarily to support capitated revenue arrangements.