Surgery Partners, Inc.
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
SGRY$26.45+14.0%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001638833-26-000077
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001638833-26-000090
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 79 current paragraphs.
33 unchanged; 38 reworded; 7 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
On October 23, 2026, the Company entered into an Agreement and Plan of Merger with Spyglass Topco, LLC, Merger Subsidiary, and, solely for the limited purposes set forth therein, Bon Secours Mercy Health, Inc., which was further amended on November 8, 2026 by the Merger Agreement Amendment. Pursuant to the Amended Merger Agreement and subject to the conditions therein, Merger Subsidiary will merge with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Parent and subject to the conditions therein, Merger Subsidiary will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent. If the Merger is consummated, the Company’s common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934, as amended.
Current report
On the terms and subject to the conditions of the Amended Merger Agreement, at the Effective Time of the Merger, each issued and outstanding share of Company common stock as of immediately prior to the Effective Time (other than certain excluded shares, including the Rollover Shares) will be converted into the Per Share Consideration of $25.00 in cash, without interest. The Merger Agreement Amendment further provides in the event the requisite Company stockholder approval has been obtained but the Merger has not occurred by March 1, 2027, the Company’s stockholders (other than certain excluded shares, including shares held by rollover stockholders) will receive additional monthly Ticking Fee cash payments, which payments will be paid in equal monthly installments in arrears at a rate equal to 10% per annum on the $25.00 per share merger consideration. Based on the outside date of October 23, 2027, the maximum Ticking Fee that may be paid per share of the Company common stock is $1.61.
Current report
Concurrently with the execution and delivery of the Original Merger Agreement, the Company and Parent entered into a Voting and Support Agreement (the “Support Agreement”) with certain stockholders party thereto. Under the Support Agreement, the subject stockholders have agreed, among other things, to vote their shares of Company common stock in favor of the adoption of the Amended Merger Agreement. In addition, under the Support Agreement, immediately prior to the closing of the Merger, the rollover stockholders will contribute to Parent, directly or indirectly, all of their Rollover Shares in exchange for equity interests in Parent. The Rollover Shares will not be entitled to receive the Per Share Consideration or Ticking Fees and will, by virtue of the Merger, be converted into shares of common stock of the Surviving Corporation such that the Rollover Shares represent the same percentage of the Surviving Corporation immediately following the Effective Time as the rollover stockholders owned of the Company immediately prior to the Effective Time.
Current report
Completion of the Merger is subject to the satisfaction or waiver of certain customary closing conditions, including the adoption by the Company’s stockholders and receipt of required regulatory approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Amended Merger Agreement also contains customary termination provisions and provides for an approximately $149.1 million termination fee payable by the Company to Parent under certain circumstances. In certain circumstances, the Company may be required to reimburse Parent for certain reasonable and documented out-of-pocket expenses incurred in connection with the Merger, up to an aggregate cap of $8.25 million.
Current report
The Company has incurred and expects to incur additional transaction-related costs, including financial advisory, legal, accounting and other professional fees, in connection with the proposed Merger. The amount of future transaction-related costs cannot currently be reasonably estimated.
Current report
Loss on Debt Extinguishment. We incurred a loss on debt extinguishment of $3.7 million for the three months ended September 30, 2026 related to a voluntary prepayment of $285.0 million on our Term Loan (See Note 3. "Long-Term Debt" to our condensed consolidated financial statements).
Current report
Loss on Debt Extinguishment. We incurred a loss on debt extinguishment of $3.7 million for the nine months ended September 30, 2026 related to a voluntary prepayment of $285.0 million on our Term Loan (See Note 3. "Long-Term Debt" to our condensed consolidated financial statements).
Removed paragraphs (2)
Previous report
Considering these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. When you consider these forward-looking statements, you should keep in mind these risk factors and other cautionary statements in this report.
Previous report
These forward-looking statements speak only as of the date made. Other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.
Reworded paragraphs (38)
Previous wording
By their nature, forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ from the expectations expressed in the statements. Many of these factors are beyond our ability to control or predict. These factors include, without limitation, the risk that the potential sale transaction of our ownership interests in Mountain View Hospital and Idaho Falls Community Hospital to Intermountain Health may not be completed in a timely manner or at all, including the risk that required physician, regulatory and other approvals and consents are not obtained, are delayed, or are obtained subject to conditions that are not anticipated; the failure to satisfy other closing conditions to the transaction; the possibility that the anticipated benefits of the sale to us are not realized as expected, the potential adverse effect of the announcement or pendency of the transaction on the market price of, or trading in, our securities and on our business relationships, operating results, and business generally, including the ability to retain key personnel; risks related to diverting management's attention from our ongoing business operations; the amount of costs, fees, expenses, and charges related to the sale transaction; potential litigation relating to the transaction that could be instituted against us or our affiliates, officers, or directors, and the effects of any outcomes related thereto; reductions in payments from government health care programs and private insurance payors, such as health maintenance organizations, preferred provider organizations, and other managed care organizations and employers; our ability to contract with private insurance payors; changes in our payor mix or surgical case mix; failure to maintain or develop relationships with physicians on beneficial or favorable terms, or at all; the impact of payor controls designed to reduce the number of surgical procedures; our efforts to integrate operations of acquired businesses and surgical facilities, attract new physician partners, or acquire additional surgical facilities; supply chain issues, including shortages or quality control issues with surgery-related products, equipment and medical supplies; competition for physicians, nurses, strategic relationships, acquisitions and managed care contracts; our ability to attract and retain qualified health care professionals; our ability to enforce non-compete restrictions against our physicians; our ability to manage material liabilities whether known or unknown incurred as a result of acquiring surgical facilities; the impact of current and future legislation and other health care public policy changes, and the effect of that legislation and other regulatory actions on our business; our ability to comply with current health care laws and regulations; the outcome of legal and regulatory proceedings that have been or may be brought against us; the impact of cybersecurity attacks or intrusions…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors. Important factors that could cause actual outcomes or results to differ materially from the forward-looking statements include, but are not limited to, (a) the ability of the parties to consummate the proposed Merger in a timely manner or at all, and the satisfaction or waiver of conditions to the consummation of the Merger, including with respect to the approval of the Company’s stockholders and required regulatory approval; (b) the possibility that the Company may not receive the requisite stockholder approval for the proposed Merger; (c) the occurrence of any event, change or other circumstance or condition that could cause the parties to abandon the Merger or give rise to the termination of the Amended Merger Agreement; (d) the effect of the pendency of our Merger on the market price of, or trading in, our securities and on the Company’s business relationships, operating results and business generally, including the ability to retain key personnel; (e) significant transaction costs associated with the proposed Merger, as well as liabilities that are not known, probable or estimable at this time or other unexpected costs, charges, expenses, factors or events; (f) the possibility that the anticipated benefits from the previously announced sale of the Company's ownership interests in Mountain View Hospital, LLC, Idaho Falls Community Hospital, LLC and associated subsidiaries to Intermountain Health (the “Idaho Transaction”) are not realized as expected, the potential adverse effect on the Company's business relationships, operating results, and business generally, including the ability to retain key personnel; (g) potential litigation relating to the proposed merger or the Idaho Transaction that could be instituted against the Company or its affiliates, officers, or directors, and the effects of any outcomes related thereto; (h) reductions in payments from government health care programs and private insurance payors, such as health maintenance organizations, preferred provider organizations, and other managed care organizations and employers; (i) our ability to contract with private insurance payors; (j) changes in our payor mix or surgical case mix; (k) failure to maintain or develop relationships with physicians on beneficial or favorable terms, or at all; (l) the impact of payor controls designed to reduce the number of surgical procedures; (m) our efforts to integrate operations of acquired or developed businesses and surgical facilities, attract new physician partners, or acquire additional surgical facilities; (n) supply chain issues, including shortages or quality control issues with surgery-related products, equipment and medical supplies; (o) competition for physicians, nurses, strategic relationships, acquisitions and managed care contracts; (p) our ability to attra…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
As of June 30, 2026, we owned or operated, primarily in partnership with physicians, a portfolio of 178 surgical facilities comprised of 159 ASCs and 19 surgical hospitals across 30 states. We owned a majority interest in 87 of the surgical facilities and consolidated 120 of these facilities for financial reporting purposes.
Current wording
As of September 30, 2026, we owned or operated, primarily in partnership with physicians, a portfolio of 173 surgical facilities comprised of 156 ASCs and 17 surgical hospitals across 30 states. We owned a majority interest in 83 of the surgical facilities and consolidated 115 of these facilities for financial reporting purposes.
Previous wording
Total revenues for the second quarter of 2026 increased 2.7% to $848.9 million from $826.2 million in the second quarter of 2025. The increase in revenues was attributable to same-facility revenue growth in 2026. Days adjusted same-facility revenues for the second quarter of 2026 increased 5.0% from the second quarter of 2025, with a 4.8% increase in revenue per case and a 0.3% increase in same-facility cases. Additionally, for the second quarter of 2026, net loss attributable to Surgery Partners, Inc. was $15.0 million compared to $2.5 million for the second quarter of 2025. For the second quarter of 2026, Adjusted EBITDA decreased 2.9% to $125.2 million compared to $129.0 million for the same period in 2025. A reconciliation of non-GAAP financial measures appears below under the heading "Certain Non-GAAP Measures."
Current wording
Total revenues for the third quarter of 2026 decreased (0.8)% to $815.3 million from $821.5 million in the third quarter of 2025. The decrease in revenues was attributable to the Idaho Transaction partially offset by same-facility revenue growth in 2026. Days adjusted same-facility revenues for the third quarter of 2026 increased 6.0% from the third quarter of 2025, with a 5.8% increase in revenue per case and a 0.2% increase in same-facility cases. Additionally, for the third quarter of 2026, net loss attributable to Surgery Partners, Inc. was $21.1 million compared to $22.7 million for the third quarter of 2025. For the third quarter of 2026, Adjusted EBITDA decreased 2.7% to
Previous wording
We had cash and cash equivalents of $216.7 million and $617.8 million of borrowing capacity under the Revolver as of June 30, 2026.
Current wording
We had cash and cash equivalents of $354.5 million and $692.8 million of borrowing capacity under the Revolver as of September 30, 2026.
Previous wording
Revenues. The following table sets forth patient service revenues (in millions):
Current wording
Revenues. The following table sets forth patient service revenues and other service revenues (in millions):
Previous wording
Patient service revenues increased 2.7% to $826.1 million for the three months ended June 30, 2026 compared to $804.2 million for the three months ended June 30, 2025. The increase was primarily driven by a 5.0% increase in days adjusted same-facility revenues. The increase in days adjusted same-facility revenues was attributable to a 0.3% increase in same-facility case volumes and a 4.8% increase in same-facility revenue per case.
Current wording
Patient service revenues decreased (0.1)% to $798.0 million for the three months ended September 30, 2026 compared to $798.5 million for the three months ended September 30, 2025. The decrease was primarily driven by the Idaho Transaction partially offset by a 6.0% increase in days adjusted same-facility revenues. The increase in days adjusted same-facility revenues was attributable to a 0.2% increase in same-facility case volumes and a 5.8% increase in same-facility revenue per case.
Previous wording
Cost of Revenues. Cost of revenues was $1.3 billion for the six months ended June 30, 2026 compared to $1.2 billion for the six months ended June 30, 2025. The increase was primarily driven by an increase in case volume and the performance of high acuity procedures completed during the six months ended June 30, 2026, increased hospital provider taxes related to certain state supplemental programs, and acquisitions completed in late 2025. As a percentage of revenues, cost of revenues was 78.9% and 77.7% for the six months ended June 30, 2026 and 2025, respectively.
Current wording
Cost of Revenues. Cost of revenues was $630.3 million for the three months ended September 30, 2026 compared to $626.2 million for the three months ended September 30, 2025. The increase was primarily driven by an increase in performance of high acuity procedures partially offset by the Idaho Transaction. As a percentage of revenues, cost of revenues was 77.3% and 76.2% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
General and Administrative Expenses. General and administrative expenses were $36.3 million and $36.1 million for the three months ended June 30, 2026 and 2025, respectively. As a percentage of revenues, general and administrative expenses were 4.3% and 4.4% for the three months ended June 30, 2026 and 2025, respectively.
Current wording
General and Administrative Expenses. General and administrative expenses were $40.6 million and $22.4 million for the three months ended September 30, 2026 and 2025, respectively. The increase was driven by lower cash and equity incentive-based compensation for the three months ended September 30, 2025 due to year-to-date performance. As a percentage of revenues, general and administrative expenses were 5.0% and 2.7% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Depreciation and Amortization. Depreciation and amortization expenses were $39.3 million and $40.3 million for the three months ended June 30, 2026 and 2025, respectively. As a percentage of revenues, depreciation and amortization expenses were 4.6% and 4.9% for the three months ended June 30, 2026 and 2025, respectively.
Current wording
Depreciation and Amortization. Depreciation and amortization expenses were $39.6 million and $39.5 million for the three months ended September 30, 2026 and 2025, respectively. As a percentage of revenues, depreciation and amortization expenses were 4.9% and 4.8% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Transaction and Integration Costs. The Company incurred $34.0 million of transaction and integration costs for the six months ended June 30, 2026 compared to $42.8 million for the six months ended June 30, 2025. The costs for both periods primarily related to ongoing development initiatives and the integration of acquisitions. The decrease was primarily driven by reduced transaction and integration costs related to acquisitions and divested facilities and a decrease in severance, IT implementation, and revenue cycle standardization costs.
Current wording
Transaction and Integration Costs. The Company incurred $22.6 million of transaction and integration costs for the three months ended September 30, 2026 compared to $12.6 million for the three months ended September 30, 2025. The costs for both periods primarily related to ongoing development initiatives and the integration of acquisitions. The increase was primarily driven by increased integration related costs related to acquisitions and other costs associated with implementation, standardization and integration efforts.
Previous wording
Net (Gain) Loss on Disposals, Consolidations and Deconsolidations. The net (gain) loss on disposals, consolidations and deconsolidations for the three months ended June 30, 2026 and 2025 includes activity discussed in Note 2. "Acquisitions, Disposals and Deconsolidations" of the accompanying notes to the condensed consolidated financial statements. The remaining net loss in both periods was primarily attributable to sales and disposals of other assets.
Current wording
Net (Gain) Loss on Disposals, Consolidations and Deconsolidations. The net (gain) loss on disposals, consolidations and deconsolidations for the three months ended September 30, 2026 and 2025 includes activity discussed in Note 2. "Acquisitions, Disposals and Deconsolidations" of the accompanying notes to the condensed consolidated financial statements.
Previous wording
Interest Expense, Net. Interest expense, net was $138.9 million for the six months ended June 30, 2026 compared to $130.1 million for the six months ended June 30, 2025. As a percentage of revenues, interest expense, net was 8.4% and 8.1% for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily driven by increased borrowings on the Revolver.
Current wording
Interest Expense, Net. Interest expense, net was $67.9 million for the three months ended September 30, 2026 compared to $74.9 million for the three months ended September 30, 2025. As a percentage of revenues, interest expense, net was 8.3% and 9.1% for the three months ended September 30, 2026 and 2025, respectively. The $7.0 million decrease in interest expense is primarily driven by reduced borrowings on the Revolver during the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Previous wording
Income Tax (Expense) Benefit. Income tax expense was $1.4 million for the six months ended June 30, 2026 compared to an income tax benefit of $1.1 million for the six months ended June 30, 2025. The effective tax rate was 4.8% and (2.5)% for the six months ended June 30, 2026 and 2025, respectively. See Note 7. "Income Taxes" for additional information related to the Company's effective tax rates for the six months ended June 30, 2026 and 2025, including why these rates differed from the U.S. federal statutory rate of 21%.
Current wording
Income Tax (Expense) Benefit. Income tax expense was $3.6 million and $5.5 million for the three months ended September 30, 2026 and September 30, 2025, respectively. The effective tax rate was 20.3% and 17.9% for the three months ended September 30, 2026 and 2025, respectively. See Note 7. “Income Taxes” for additional information related to the Company’s effective tax rates for the three months ended September 30, 2026 and September 30, 2025, including why these rates differed from the U.S. federal statutory rate of 21%.
Previous wording
Net Income Attributable to Non-Controlling Interests. As a percentage of revenues, net income attributable to non-controlling interests was 5.3% and 5.7% for the three months ended June 30, 2026 and 2025, respectively.
Current wording
Net Income Attributable to Non-Controlling Interests. As a percentage of revenues, net income attributable to non-controlling interests was 4.3% and 5.8% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Comparison of Operating Results for the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025
Current wording
Comparison of Operating Results for the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025
Previous wording
Revenues. The following table sets forth patient service revenues (in millions):
Current wording
Revenues. The following table sets forth patient service revenues and other service revenues (in millions):
Previous wording
Patient service revenues increased 3.6% to $1,618.2 million for the six months ended June 30, 2026 compared to $1,562.6 million for the six months ended June 30, 2025. The increase was primarily driven by a 4.9% increase in days adjusted same-facility revenues and the net impact from acquisitions and divestitures completed during the six months ended June 30, 2026. The increase in days adjusted same-facility revenues was attributable to a 0.8% increase in same-facility case volumes and a 4.0% increase in same-facility revenue per case.
Current wording
Patient service revenues increased 2.3% to $2,416.2 million for the nine months ended September 30, 2026 compared to $2,361.1 million for the nine months ended September 30, 2025. The increase was primarily driven by a 4.6% increase in days adjusted same-facility revenues and the net impact from acquisitions and divestitures completed during the nine months ended September 30, 2026. The increase in days adjusted same-facility revenues was attributable to a 0.3% increase in same-facility case volumes and a 4.2% increase in same-facility revenue per case.
Previous wording
Cost of Revenues. Cost of revenues was $658.7 million for the three months ended June 30, 2026 compared to $630.6 million for the three months ended June 30, 2025. The increase was primarily driven by an increase in case volume and the performance of high acuity procedures completed during the three months ended June 30, 2026, and increased hospital provider taxes related to certain state supplemental programs. As a percentage of revenues, cost of revenues was 77.6% and 76.3% for the three months ended June 30, 2026 and 2025, respectively.
Current wording
Cost of Revenues. Cost of revenues was $1,939.7 million for the nine months ended September 30, 2026 compared to $1,870.9 million for the nine months ended September 30, 2025. The increase was primarily driven by an increase in performance of high acuity procedures and increased hospital provider taxes related to certain state supplemental programs. As a percentage of revenues, cost of revenues was 78.4% and 77.2% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
General and Administrative Expenses. General and administrative expenses were $75.6 million and $72.1 million for the six months ended June 30, 2026 and 2025, respectively. As a percentage of revenues, general and administrative expenses were 4.6% and 4.5% for the six months ended June 30, 2026 and 2025, respectively.
Current wording
General and Administrative Expenses. General and administrative expenses were $116.2 million and $94.5 million for the nine months ended September 30, 2026 and 2025, respectively. The increase was driven by lower cash and equity incentive-based compensation for the nine months ended September 30, 2025 due to year-to-date performance. As a percentage of revenues, general and administrative expenses were 4.7% and 3.9% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Depreciation and Amortization. Depreciation and amortization expenses were $77.8 million and $76.6 million for the six months ended June 30, 2026 and 2025, respectively. As a percentage of revenues, depreciation and amortization expenses were 4.7% and 4.8% for the six months ended June 30, 2026 and 2025, respectively.
Current wording
Depreciation and Amortization. Depreciation and amortization expenses were $117.4 million and $116.1 million for the nine months ended September 30, 2026 and 2025, respectively. As a percentage of revenues, depreciation and amortization expenses were 4.7% and 4.8% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Transaction and Integration Costs. The Company incurred $18.4 million of transaction and integration costs for the three months ended June 30, 2026 compared to $18.1 million for the three months ended June 30, 2025. The costs for both periods primarily related to ongoing development initiatives and the integration of acquisitions.
Current wording
Transaction and Integration Costs. The Company incurred $56.6 million of transaction and integration costs for the nine months ended September 30, 2026 compared to $55.4 million for the nine months ended September 30, 2025.
Previous wording
Net (Gain) Loss on Disposals, Consolidations and Deconsolidations. The net (gain) loss on disposals, consolidations and deconsolidations for the six months ended June 30, 2026 and 2025 includes activity discussed in Note 2. "Acquisitions, Disposals and Deconsolidations" of the accompanying notes to the condensed consolidated financial statements. The remaining net loss in both periods was primarily attributable to sales and disposals of other assets.
Current wording
Net (Gain) Loss on Disposals, Consolidations and Deconsolidations. The net (gain) loss on disposals, consolidations and deconsolidations for the nine months ended September 30, 2026 and 2025 includes activity discussed in Note 2. "Acquisitions, Disposals and Deconsolidations" of the accompanying notes to the condensed consolidated financial statements.
Previous wording
Interest Expense, Net. Interest expense, net was $69.8 million for the three months ended June 30, 2026 compared to $67.9 million for the three months ended June 30, 2025. As a percentage of revenues, interest expense, net was 8.2% for the three months ended June 30, 2026 and 2025.
Current wording
Interest Expense, Net. Interest expense, net was $206.8 million for the nine months ended September 30, 2026 compared to $205.0 million for the nine months ended September 30, 2025. As a percentage of revenues, interest expense, net was 8.4% and 8.5% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Income Tax (Expense) Benefit. Income tax expense was $2.6 million for the three months ended June 30, 2026 compared to an income tax benefit of $1.1 million for the three months ended June 30, 2025. The effective tax rate was 8.0% and (2.5)% for the three months ended June 30, 2026 and 2025, respectively. The Company’s effective tax rate for both periods differed from the U.S. federal statutory rate of 21% primarily due to earnings attributable to non-controlling interests, an increase in the Company’s valuation allowance attributable to interest expense limitations and permanent differences resulting from share-based payment awards.
Current wording
Income Tax (Expense) Benefit. Income tax expense was $5.0 million and $4.4 million for the nine months ended September 30, 2026 and September 30, 2025, respectively. The effective tax rate was 10.7% and 5.9% for the nine months ended September 30, 2026 and 2025, respectively. See Note 7. "Income Taxes" for additional information related to the Company's effective tax rates for the nine months ended September 30, 2026 and 2025, including why these rates differed from the U.S. federal statutory rate of 21%.
Previous wording
Net Income Attributable to Non-Controlling Interests. As a percentage of revenues, net income attributable to non-controlling interests was 4.7% and 5.3% for the six months ended June 30, 2026 and 2025, respectively.
Current wording
Net Income Attributable to Non-Controlling Interests. As a percentage of revenues, net income attributable to non-controlling interests was 4.6% and 5.5% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Cash and cash equivalents were $216.7 million at June 30, 2026 compared to $239.9 million at December 31, 2025.
Current wording
Cash and cash equivalents were $354.5 million at September 30, 2026 compared to $239.9 million at December 31, 2025.
Previous wording
The primary source of our operating cash flows is the collection of accounts receivable from private insurance companies, federal and state agencies (under the Medicare and Medicaid programs) and individuals. Our cash flows provided by operating activities was $71.0 million for the six months ended June 30, 2026 compared to $87.3 million for the six months ended June 30, 2025. The $16.3 million decrease was primarily driven by an increase in cash interest payments and timing of changes in working capital.
Current wording
The primary source of our operating cash flows is the collection of accounts receivable from private insurance companies, federal and state agencies (under the Medicare and Medicaid programs) and individuals. Our cash flows provided by operating activities was $174.5 million for the nine months ended September 30, 2026 compared to $170.9 million for the nine months ended September 30, 2025. The $3.6 million increase was primarily driven by timing of changes in working capital.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2026 was $33.2 million compared to $74.3 million for the six months ended June 30, 2025. The $41.1 million decrease was primarily driven by an aggregate net decrease of $47.7 million in payments for acquisitions and purchases of equity investments (net of cash acquired), a $8.3 million decrease in purchases of property and equipment, and a $26.8 million decrease in other investing activities, partially offset by a $42.6 million decrease in proceeds from divestitures.
Current wording
Net cash provided by investing activities for the nine months ended September 30, 2026 was $434.8 million compared to net cash used in investing activities of $120.5 million for the nine months ended September 30, 2025. The $555.3 million increase in cash provided by investing activities was primarily driven by a $455.4 million increase in proceeds from divestitures (including the Idaho Transaction), a $42.4 million reduction in payments for acquisitions, and a $39.6 million increase in other investing activity primarily related to receivables from unconsolidated affiliates.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2026 was $61.0 million compared to $32.4 million for the six months ended June 30, 2025. The increase of $28.6 million was primarily driven by increased paydowns of long-term debt and reduced borrowings on long-term debt.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2026 was $494.7 million compared to $116.5 million for the nine months ended September 30, 2025. The increase of $378.2 million was primarily driven by a $398.2 million increase in paydowns of long-term debt partially offset by a $14.6 million reduction in borrowings on long-term debt.
Previous wording
Net working capital was approximately $547.5 million at June 30, 2026 compared to $535.2 million at December 31, 2025.
Current wording
Net working capital was approximately $581.4 million at September 30, 2026 compared to $535.2 million at December 31, 2025.
Previous wording
There have been no material changes outside of the ordinary course of business to our upcoming cash obligations during the six months ended June 30, 2026 from those disclosed under “Material Cash Requirements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K.
Current wording
During 2026, the Company made a voluntary prepayment of $285.0 million on its Term Loan without premium or penalty. As a result of the prepayment, the Term Loan is no longer subject to quarterly payments prior to maturity. See Note 3. "Long-Term Debt" for additional disclosure related to the prepayment. There have been no other material changes outside of the ordinary course of business to our upcoming cash obligations during the nine months ended September 30, 2026 from those disclosed under “Material Cash Requirements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K.
Previous wording
(1)For the three months ended June 30, 2026, this amount includes due diligence, transaction and integration costs related to acquisitions (both completed and in the pipeline) and divested facilities (collectively “M&A costs”) of $12.5 million and other costs, including severance, IT implementation, revenue cycle standardization of $5.9 million. For the three months ended June 30, 2025, this amount includes M&A costs of $14.1 million and other costs, including severance, IT implementation, revenue cycle standardization of $4.0 million.
Current wording
(1)For the three months ended September 30, 2026, this amount includes due diligence, transaction and integration costs related to acquisitions (both completed and in the pipeline - collectively “M&A costs”) of $14.1 million and other costs, including severance, IT implementation and revenue cycle standardization of $8.5 million. For the three months ended September 30, 2025, this amount includes M&A costs of $8.6 million and other costs, including severance, IT implementation and revenue cycle standardization of $4.0 million.
Previous wording
For the six months ended June 30, 2026, this amount includes M&A costs of $24.3 million and other costs, including severance, IT implementation, revenue cycle standardization of $9.7 million. For the six months ended June 30, 2025, this amount includes M&A costs of $30.9 million and other costs, including severance, IT implementation, revenue cycle standardization of $11.9 million.
Current wording
For the nine months ended September 30, 2026, this amount includes M&A costs of $38.5 million and other costs, including severance, IT implementation and revenue cycle standardization of $18.1 million. For the nine months ended September 30, 2025, this amount includes M&A costs of $39.5 million and other costs, including severance, IT implementation and revenue cycle standardization of $15.9 million.
Previous wording
(2)This amount includes other litigation costs of $2.7 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively.
Current wording
(2)This amount includes a litigation settlement loss of $0.4 million and $5.1 million for the three months ended September 30, 2026 and 2025, respectively. This amount also includes other litigation costs of $5.5 million and $0.3 million for the three months ended September 30, 2026 and 2025, respectively
Previous wording
This amount includes a litigation settlement loss of $2.5 million and $2.2 million for the six months ended June 30, 2026 and 2025, respectively. This amount also includes other litigation costs of $4.4 million and $1.0 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
This amount includes a litigation settlement loss of $2.9 million and $7.3 million for the nine months ended September 30, 2026 and 2025, respectively. This amount also includes other litigation costs of $9.9 million and $1.3 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
We use Credit Agreement EBITDA as a measure of liquidity and to determine our compliance under certain covenants pursuant to our Credit Agreement, as amended. Credit Agreement EBITDA is determined on a trailing twelve-month basis. We have included it because we believe that it provides investors with additional information about our ability to incur and service debt and make capital expenditures. Credit Agreement EBITDA is not a measurement of liquidity under GAAP and should not be considered in isolation or as a substitute for any other measure calculated in accordance with GAAP. The items excluded from Credit Agreement EBITDA are significant components in understanding and evaluating our liquidity. Our calculation of Credit Agreement EBITDA may not be comparable to similarly titled measures reported by other companies.
Current wording
We use Credit Agreement EBITDA as a measure of liquidity and to determine our compliance under certain covenants pursuant to the credit agreement governing our senior secured credit facilities, as amended. Credit Agreement EBITDA is determined on a trailing twelve-month basis. We have included it because we believe that it provides investors with additional information about our ability to incur and service debt and make capital expenditures. Credit Agreement EBITDA is not a measurement of liquidity under GAAP and should not be considered in isolation or as a substitute for any other measure calculated in accordance with GAAP. The items excluded from Credit Agreement EBITDA are significant components in understanding and evaluating our liquidity. Our calculation of Credit Agreement EBITDA may not be comparable to similarly titled measures reported by other companies.
Previous wording
When we use the term "Credit Agreement EBITDA," we are referring to Adjusted EBITDA, as defined above, further adjusted for acquisitions and synergies. These adjustments do not relate to our historical financial performance and instead relate to estimates compiled by management and calculated in conformance with the definition of "Consolidated EBITDA" used in the credit agreements governing our credit facilities.
Current wording
When we use the term "Credit Agreement EBITDA," we are referring to Adjusted EBITDA, as defined above, further adjusted for acquisitions and synergies. These adjustments do not relate to our historical financial performance and instead relate to estimates compiled by management and calculated in conformance with the definition of "Consolidated EBITDA" used in the credit agreement.
Previous wording
(1)Represents impact of acquisitions as if each acquisition had occurred on July 1, 2025. Further this includes revenue and cost synergies from other business initiatives and de novo facilities and an adjustment for the effects of adopting the new lease accounting standard, as defined in the credit agreement governing the Credit Agreement, as amended.
Current wording
(1)Represents impact of acquisitions as if each acquisition had occurred on October 1, 2025. Further this includes revenue and cost synergies from other business initiatives and de novo facilities, as defined in the credit agreement.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
$132.7 million compared to $136.4 million for the same period in 2025. A reconciliation of non-GAAP financial measures appears below under the heading "Certain Non-GAAP Measures."