UHS 10-K & 10-Q changes, risk factors and insider trading

CaliforniaTexas: We own 57 inpatient acute care hospitals, 16 free-standing emergency departments, 2 acute outpatient centers,centers 9and 20 inpatient behavioral healthcare facilities and 314 behavioral healthcare outpatient facilities as listed in Item 2. Properties. On a combined basis, these facilities contributed 11%16% of our consolidated net revenues during botheach 2024of 2025 and 2023, respectively.2024. On a combined basis, after deducting an allocation for corporate overhead expense, these facilities generated 12%19% in both 20242025 and 2023,21% in 2024, of our income from operations after net income attributable to noncontrolling interest.

We derive a significant portion of our revenue from third-party payers, including the Medicare and Medicaid programs. Changes in these government programs in recent years have resulted in limitations on reimbursement and, in some cases, reduced levels of reimbursement for healthcare services. Payments from federal and state government programs are subject to statutory and regulatory changes, administrative rulings, interpretations and determinations, requirements for utilization review, and federal and state funding restrictions, all of which could materially increase or decrease program payments, as well as affect the cost of providing service to patients and the timing of payments to facilities. ChangesLegislation resultingadopted on July 4, 2025 (the One Big Beautiful Budget Act), attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditure. That legislation also places limits on provider fees used to increase federal Medicaid funding to states. The legislation prohibits states not previously having expanded Medicaid eligibility, which includes 9 states where we have facilities, to 138% of federal poverty level from increasing the outcomerate of current provider fees which fund certain state supplemental payments or increasing the base of the 2024fee electionsto maya includeclass increasedor relianceitems of services that the fee did not previously cover. That current provider fee threshold will remain at 6%. For states having expanded Medicaid eligibility under the legislation, the provider fee threshold will be reduced by 0.5% annually between federal fiscal years 2028 and 2032 with the resulting threshold ultimately becoming 3.5%. Under current law, and based on Medicareour Advantagecurrent programs,expectations, workwe requirementsestimate that, commencing with the 2028 state fiscal years, our aggregate annual net benefit will be reduced, on an annually increasing and relatively pro rata basis, by approximately $432 million to $480 million by 2032. The legislation also eliminates certain insurance exchange premium tax credits beyond 2025 and exchange enrollment is expected to be adversely impacted. On January 8, 2026, the U.S. House of Representatives passed H.R.1834 to extend for Medicaidthree waiveryears programthe eligibility,enhanced increasedpremium focustax credits (“EPTCs”) that expired on hospitalDecember outpatient31, site2025, neutralwhich paymentis policies,currently andundergoing similarreview initiatives that may reducein the availability of funding for federal healthcare programs or make eligibility for benefits more difficult. There have been proposals to substantially decrease federal funding for state Medicaid Programs.Senate. Any significant reduction in federal Medicaid funding to states would likely result in states reducing Medicaid payments to us which would have a material adverse effect on us. We are unable to predict the effect of recent and future policy changes on our operations. In addition, the uncertainty and fiscal pressures placed upon federal and state governments as a result of, among other things, deterioration in general economic conditions and the funding requirements from the federal healthcare reform legislation, may affect the availability of taxpayer funds for Medicare and Medicaid programs. All of these changes may be expected to reduce our revenue and likely increase the level of uncompensated care provided by our facilities which will have a material adverse effect on us. In addition, the vast majority of the net revenues generated at our behavioral health facilities located in the United Kingdom are derived from governmental payers. If the rates paid or the scope of services covered by governmental payers in the United States or United Kingdom are reduced, there could be a material adverse effect on our business, financial position and results of operations.

As discussed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Summary of Various State Medicaid Supplemental Payment Programs, we receive revenues from various state and county-based programs, including Medicaid in all states in which we operate. We receive annual Medicaid revenues of approximately $100 million, or greater, from each of Texas, California, Nevada, California,Washington, D.C., Illinois, Pennsylvania, Washington,Kentucky, D.C.,Tennessee, Kentucky,Virginia, Massachusetts, Michigan, Florida, Virginia, MassachusettsMississippi and Mississippi. We also receive Medicaid disproportionate share hospital payments from certain states including, most significantly, Texas.Washington. Most of these programs are approved on a year-to-year basis and there is no assurance that these revenues will continue at their current rates or at all. We are therefore particularly sensitive to potential reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those states.

We expect that government pressure on managed care organizations through static or reduced funding received by these payers from government sources such as through Medicare Advantage plans will in turn increase the pressure on us to not increase or reduce the rates charged by us to patients covered by those plans. We also expect continued third-party efforts to aggressively manage reimbursement levels and cost controls. Reductions in reimbursement amounts received from third-party payers could have a material adverse effect on our financial position and our results of operations.

In our acute care segment, during the past few years we experienced significant increases in hospital-based physician related expenses, especially in the areas of emergency room care and anesthesiology. We have implemented various initiatives to mitigate the increased expense, to the degree possible, which has moderated the rate of increase experienced during 2024the andpast 2023.several years. However, significant increases in these physician related expenses could have a material unfavorable impact on our future results of operations.

The nationwide shortage of nurses and other clinical staff and support personnel has been a significant operating issue facing us and other healthcare providers. In particular, like others in the healthcare industry, we experienced a shortage of nurses and other clinical staff and support personnel at our acute care and behavioral health care hospitals in many geographic areas which was exacerbated by the COVID‑19 pandemic. In some areas, the increased demand for care during the COVID-19 pandemic put a strain on our resources and staff, which required us to utilize higher‑cost temporary labor and pay premiums above standard compensation for essential workers. Personnel shortages may require us to further enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel or require us to hire expensive temporary personnel. To the extent we cannot maintain sufficient staffing levels at our hospitals, we may be required to limit the acute and behavioral health care services provided at certain of our hospitals which would have a corresponding adverse effect on our net revenues. In addition, in some markets such as California, there are requirements to maintain specified nurse-staffing levels which could adversely affect our net revenues to the extent we cannot meet those levels. If these states increase mandatory nurse-staffing ratios or additional states in which we operate adopt mandatory nurse-staffing ratios, such changes could significantly affect labor costs and have an adverse impact on revenues if we are required to limit admissions in order to meet the required ratios.

Beginning in 2025federal andfiscal continuingyear through 2027,2028, the Medicaid disproportionate share hospital (“DSH”) allotment to the states from federal funds will be reduced. Such reductions have been delayed several times, most recently under the American Relief Act 2025, which delayed the DSH reductions through March 31, 2025. During the reduction period, state Medicaid DSH allotments from federal funds will be reduced by $8 billion annually.billion. Reductions are imposed on states based on percentage of uninsured individuals, Medicaid utilization and uncompensated care. We receive Medicaid DSH payments in certain states including, most significantly, Texas. We are therefore particularly sensitive to potential reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those states. We can provide no assurance that reductions to revenues earned pursuant to these programs, particularly in the above-mentioned states, will not have a material adverse effect on our future results of operations.

Although it was expected that as a result of the Legislation there would be a reduction in uninsured patients, which would reduce our expense from uncollectible accounts receivable, the Legislation makes a number of other changes to Medicare and Medicaid which we believe may have an adverse impact on us. The Legislation revises reimbursement under the Medicare and Medicaid programs to emphasize the efficient delivery of high quality care and contains a number of incentives and penalties under these programs to achieve these goals. The Legislation implements a value-based purchasing program, which will reward the delivery of efficient care. Conversely, certain facilities will receive reduced reimbursement for failing to meet quality parameters; such hospitals will include those with excessive readmission or hospital-acquired condition rates. As a result of the 2024 and upcoming 2026 federal elections and the Braidwood Management v. Becerra litigation currently before the U.S. Supreme Court, it remains unclear what portions of that legislation may remain, or what any replacement or alternative programs may be created by future legislation.

The Legislation and its implementation have been, and remain, politically controversial. While attempts to repeal the entirety of the Legislation have not been successful to date, a key provision of the Legislation was repealed as part of the Tax Cuts and Jobs Act and on December 14, 2018, a Texas Federal District Court Judge declared the Legislation unconstitutional, reasoning that the individual mandate tax penalty was essential to and not severable from the remainder of the Legislation. The case was appealed to the U.S. Supreme Court which ultimately held in California v. Texas that the plaintiffs lacked standing to challenge the Legislation’s requirement to obtain minimum essential health insurance coverage, or the individual mandate. The Court dismissed the case without specifically ruling on the constitutionality of the Legislation. On September 7, 2022, the same Texas Federal District Court judge, in the case of Braidwood Management v. Becerra, ruled that the requirement that certain health plans cover services with an “A” or “B” recommendation from the U.S. Preventive Services Task Force without cost sharing violates the Appointments Clause of the U.S. Constitution and that the coverage of certain HIV prevention medication violates the Religious Freedom Restoration Act. The governmentmatter haswas ultimately appealed the decision tobefore the U.S. Supreme Court.Court, Wewhich arein unableits toJune predict2025 theKennedy outcomev. Braidwood Management decision, opined in favor of HIV preventive care coverage. The impact of this litigationdecision oron itsus potentialcannot impactbe at this time.predicted.

The Inflation Reduction Act of 2022 (“IRA”) was passed on August 16, 2022, which among other things, allows for CMS to negotiate prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D, beginning with 10 high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. The IRA also continued certain subsidies for individuals to obtain private health insurance under the Legislation through 2025. TheThese effectenhanced ofsubsidies the 2024 federal electionsexpired on IRADecember price31, negotiation provisions or on the likelihood of extended health insurance enrollment subsidies beyond 2025 is not yet known.2025. The Trump administration has already taken steps to undo certain Biden-era executive orders, including those intended to lower drug costs for beneficiaries, and to freeze funding for federal programs. While the administration’s initial freeze has since been rescinded, the administration is likely to make other attempts to reduce federal program expenditures and can generally be expected to oppose increases in ACA and Medicaid enrollment.

For example, as discussed elsewhere herein, Cumberland Hospital for Children and Adolescents (“Cumberland”), an indirect subsidiary of the Company, is a defendant in multi-plaintiff lawsuits filed in the Circuit Court for Richmond, Virginia (the “Cumberland Litigation”), relating to allegations of inappropriate sexual contact during medical examinations by Dr. Daniel Davidow, an independent contractor and the former medical director for Cumberland. The Company and UHS of Delaware, Inc., our administrative services subsidiary (“UHS Delaware”), were also named as co-defendants in the Cumberland Litigation. Plaintiffs have asserted claims of negligence, assault and battery (against Dr. Davidow), false imprisonment, violations of the Virginia Consumer Protection Act (“VCPA”), and vicarious liability for Dr. Davidow’s conduct against Cumberland, the Company, and UHS Delaware. The Company and UHS Delaware were dismissed from the action during the trial, which occurred in September, 2024. On September 27, 2024, a jury entered a verdict finding Dr. Davidow and Cumberland liable and awarded these three plaintiffs combined compensatory damages of $60 million for all liability theories, an additional combined $180 million in trebled damages for violation of the VCPA, and an additional combined $120 million in punitive damages. Cumberland ishas evaluatingfiled allpost-trial legalmotions options and intends to challengechallenging this verdict, including the amounts awarded in the verdict, in post-trial proceedings and on appeal.verdict. Based upon Virginia law, wethe expectCourt thathas recently reduced the punitive damage amount should be reduced to a combined maximum of $1.05 million as($350,000 per plaintiff). Cumberland has filed a matternotice of law.appeal on the remaining verdict. Plaintiffs have separately filed a notice of appeal seeking to challenge the dismissal of the Company and UHS Delaware during trial, and the Court’s order reducing the punitive damages award against Cumberland. These appeals were recently dismissed by the appellate court without prejudice as premature because the judgments in favor of the first three plaintiffs are neither final nor enforceable at this time. There are approximately 40 additional plaintiffs making similar allegations with claims pending in the Cumberland Litigation. The Company and UHS Delaware remain defendants with respect to the remaining plaintiffs. We expect that the trials for the remaining plaintiffs, as well as any additional plaintiffs, will be scheduled at various times over the next several yearsyears. andThe willnext continuetrial is tentatively planned to be triedcommence in smallAugust, groups.2026.

We are uncertain as to the ultimate financial exposure related to the Pavilion and Cumberland mattersmatter (which relate to occurrences in the 2020 policy year) and we can make no assurances regarding timing or substance of their outcome, or the amount of damages that may be ultimately held recoverable after post-judgment proceedings and appeals. As of December 31, 2024,2025, without reduction for any potential amounts related to the Pavilion and Cumberland matters,matter, the Company and its subsidiaries have aggregate insurance coverage of approximately $221$143 million remaining under commercial policies for matters applicable to the 2020 policy year (in excess of the applicable self-insured retention amounts of $10 million per single occurrence/$25 million for multi-plaintiff matters for professional liability claims and $3 million per occurrence for general liability claims). In the event the resolution of the Pavilion and/or Cumberland mattersmatter exhausts all or a significant portion of theour/our subsidiaries' remaining commercial insurance coverage availablerelated to the Company2020 andpolicy its subsidiaries related to other matters that occurred in 2020,year, or the Pavilion and Cumberland mattersmatter causecauses the posting of large bonds or other collateral during the appeal processes, our future results of operations and capital resources would be materially adversely impacted.

We are unable to predict the outcome of these litigation matters or to reasonably estimate the amount or range of any such loss; however, these lawsuits and the related publicity and news articles that have been published concerning these matters could have a material adverse effect on our business, financial condition, results of operations and/or cash flows which in turn could cause a decline in our stock price. In an effort to resolve one or more of these matters, we may choose to negotiate a settlement. Amounts we pay to settle any of these matters may be material.

Changes to U.S. and other countries’ trade policies and other factors beyond our control may adversely impact our business and operating results.

Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from where our import products or materials (either directly or through our suppliers) could have an impact on our competitive position, business operations and financial results. InBeginning in February 2025, the U.S. government has imposed or has threatened to impose new tariffs, including on imported products from the European Union, Mexico, Canada and China. The impact of these tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any retaliatory responses to such actions that the target countries may take and any mitigating actions that may become available. If significant tariffs or other restrictions are imposed on our imported pharmaceutical ingredients, medical devices, medical equipment and their ingredients and components, there could be significant strain on our supply chains, causing major disruptions in procurement processes and contract negotiations with suppliers due to increased costs, pricing volatility, longer procurement lead times and supply shortages stemming from increased production costs and import restrictions. As a result, we have to attempt to shift increased costs onto insurers and patients (in the form of higher service charges), reduce procurement volumes and delay equipment upgrades to mitigate financial strain. While we continue to evaluate the potential impact of the new tariffs on our business, given the uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional tariffs or trade barriers by the U.S., the European Union, Mexico, Canada, China or other countries, we can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful.

As cyber criminals continue to become more sophisticated through evolution of their tactics, techniques and procedures, we have taken, and will continue to take, additional preventive measures to strengthen the cyber defenses of our networks and data. Although we continue to regularly review and enhance our IT systems and cybersecurity controls, we and our third-party provider have experienced, and may experience in the future, cybersecurity incidents. See “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 (as filed on February 27, 2024) for information regarding the 2024 cyber incident at UnitedHealth Group Incorporated and the cyber incident we experienced in 2020. While to date no incident had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future. If any of our or our third-party service providers’ systems are damaged, fail to function properly or otherwise become unavailable, we may incur substantial costs to repair or replace them, and may experience loss or corruption of critical data such as protected health information or other data subject to privacy laws and proprietary business information and interruptions or disruptions and delays in our ability to perform critical functions, which could materially and adversely affect our businesses and results of operations and could result in significant penalties or fines, litigation, loss of customers, significant damage to our reputation and business, and other losses. In the event of a material breach or cyber-attack, the associated expenses and losses may exceed our current insurance coverage for such events. In addition, some adverse consequences are not insurable, such as reputational harm and third-party business interruption. In addition, our future results of operations, as well as our reputation, could be adversely impacted by theft, destruction, loss, or misappropriation of public health information, other confidential data or proprietary business information. Further, consumer confidence in the integrity, availability and confidentiality of information systems and information, including patient personal information and critical operations data, in the healthcare industry generally could be impacted to the extent there are successful cyberattacks at other healthcare services companies, which could have a material adverse effect on our business, financial position or results of operations.

In addition, as of December 31, 2024,2025, we had approximately $3.9$4.0 billion of goodwill recorded on our consolidated balance sheets.sheet. Should the revenues and financial results of our acute care and/or behavioral health care facilities be materially, unfavorably impacted due to, among other things, a worsening of the economic and employment conditions in the United States that could negatively impact our patient volumes and reimbursement rates, a continued rise in the unemployment rate and increases in the number of uninsured patients treated at our facilities, we may incur future charges to recognize impairment in the carrying value of our goodwill and other intangible assets, which could have a material adverse effect on our financial results.

ContinuingAs Inflationaryinflationary Pressures continue topressures increase our operating costs andcosts, we may not be ableunable to pass on increasesthe inincreased costs commensurateassociated with theseproviding increaseshealthcare inservices costs.to our patients.

At December 31, 2024,2025, 24.421.3 million shares of Class B Common Stock were reserved for issuance upon conversion of shares of Class A, C and D Common Stock outstanding, for issuance upon exercise of options to purchase Class B Common Stock and for issuance of stock under other incentive plans. Class A, C and D Common Stock are convertible on a share for share basis into Class B Common Stock. To the extent that these shares wereare converted into or exercised for shares of Class B Common Stock, the number of shares of Class B Common Stock available for trading in the public market place would increase substantially and the current holders of Class B Common Stock would own a smaller percentage of that class.

In JulyOctober 2024,2025, our Board of Directors authorized a $1.0$1.5 billion increase to our stock repurchase program. During 2024,2025, in conjunction with this program, we have repurchased approximately 3.04.7 million shares at an aggregate cost of approximately $599$899 million. As of December 31, 2024,2025, we had an aggregate available repurchase authorization of approximately $824$1.425 million.billion.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to promote an understanding of our operating results and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the Consolidated Financial Statements, as included in this Annual Report on Form 10-K. The MD&A contains forward-looking statements that involve risks, uncertainties, and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those presented under Item 1A. Risk Factors, and below in Forward-Looking Statements and Risk Factors and as included elsewhere in this Annual Report on Form 10-K. This section generally discusses our results of operations for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. For discussion of our resultresults of operations and changes in our financial condition for the year ended December 31, 20232024 as compared to the year ended December 31, 2022,2023, please refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023,2024, as filed with the Securities and Exchange Commission on February 27,26, 2024.2025.

As of February 26,25, 2025,2026, we owned and/or operated 359375 inpatient facilities and 60168 outpatient and other facilities, including the following,facilities located in 3940 states, Washington, D.C., the United Kingdom and Puerto Rico:Rico. We have changed the method of our outpatient behavioral health care facility counts during the third quarter of 2025 and substantially all of the increase from prior periods is related to that change in convention.

3 inpatient behavioral health care facilities.facilities;

Net revenues from our acute care hospitals, outpatient facilities and commercial health insurer accounted for 56%approximately 57% of our consolidated net revenues during 2024each of 2025 and 57% during 2023.2024. Net revenues from our behavioral health care facilities and commercial health insurer accounted for 44%approximately 43% of our consolidated net revenues during 2024each of 2025 and 43% during 2023.2024.

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $1.001 billion in 2025 and $880 million in 2024 and $761 million in 2023.2024. Total assets at our U.K. behavioral health care facilities were approximately $1.531 billion as of December 31, 2025 and $1.358 billion as of December 31, 2024 and $1.327 billion as of December 31, 2023.2024.

anthere increasingare number ofadditional legislative initiatives have been passed into lawchanges that mayare likely to result in major changes in the health care delivery system on a national or state level.level, including changes in the structure and administration of, and funding for, federal and state agencies and programs. For example, Congress has reduced to $0 the penalty for failing to maintain health coverage that was part of the original Patient Protection and Affordable Care Act, as amended by the Health and Education Reconciliation Act (collectively, the "Legislation“ACA") as part of the Tax Cuts and Jobs Act. To date, theThe Biden administration hashad issued executive orders implementing a special enrollment period permitting individuals to enroll in health plans outside of the annual open enrollment period and reexamining policies that may undermine the LegislationACA or the Medicaid program. The Inflation Reduction Act of 2022 (“IRA”) was passed on August 16, 2022, which among other things, allows for the Centers for Medicare and Medicaid Services ("CMS") to negotiate prices for certain single-source drugs reimbursed under Medicare Part B and Part D. The American Rescue Plan Act’s expansion of subsidies to purchase coverage through aan LegislationACA exchange, which the IRA continued through 2025, has increased exchange enrollment. However,These the Trump administration has already taken steps to undo certain Biden-era executive orders, including those intended to lower drug costs for beneficiaries, and to freeze funding for federal programs. While the administration’s initial freeze has since been rescinded, the administration is likely to make other attempts to reduce federal program expenditures and can generally be expected to oppose increases in ACA and Medicaid enrollment. If theenhanced subsidies areexpired noton extendedDecember beyond31, 2025, exchange enrollment may be adversely impacted2025;

there have been numerous political and legal efforts to expand, repeal, replace or modify the Legislation,ACA since its enactment, some of which have been successful, in part, in modifying the Legislation,ACA, as well as court challenges to the constitutionality of the Legislation.legislation. The U.S. Supreme Court held in California v. Texas that the plaintiffs lacked standing to challenge the Legislation’slegislation’s requirement to obtain minimum essential health insurance coverage, or the individual mandate. The Court dismissed the case without specifically ruling on the constitutionality of the Legislation.ACA. AsThe a result, the Legislation continued to remain law, in its entirety. On September 7, 2022, the Legislationlegislation faced its most recent challenge when athe TexasSupreme Federal District Court judge,Court, in the caseJune of2025 Kennedy v. Braidwood Management v.decision, Becerra,opined ruledin that a requirement that certain health plans cover services without cost sharing violates the Appointments Clausefavor of the U.S. Constitution and that the coverage of certainACA HIV preventionpreventive medicationcare violates the Religious Freedom Restoration Act.coverage. The decision was appealed to the U.S. Court of Appeals for the Fifth Circuit, which on June 21, 2024, affirmed the District Court’s ruling regarding preventive services recommended by United States Preventive Services Task Force being unconstitutional. However, the Fifth Circuit overturned the nationwide injunction imposed by the District Court, preserving access to the majority of preventive services in dispute for now. The U.S. Government appealed and on January 10, 2025, the U.S. Supreme Court agreed to hear the matter. The outcome and impacts of this litigationdecision cannot be predicted. Any future efforts to challenge, replace or replace the LegislationACA or expand or substantially amend its provision is unknown. See below in Sources of Revenues and Health Care Reform for additional disclosure;

as part of the Consolidated Appropriations Act of 2021 (the "CAA"), Congress passed legislation aimed at preventing or limiting patient balance billing in certain circumstances. The CAA addresses surprise medical bills stemming from emergency services, out-of-network ancillary providers at in-network facilities, and air ambulance carriers. The CAA prohibits surprise billing when out-of-network emergency services or out-of-network services at an in-network facility are provided, unless informed consent is received. In these circumstances providers are prohibited from billing the patient for any amounts that exceed in-network cost-sharing requirements. HHS, the Department of Labor and the Department of the Treasury have issued rules to implement the legislation. The rules have limited the ability of our hospital-based physicians to receive payments for services at usually higher out-of-network rates in certain circumstances, and, as a result, have caused us to increase subsidies to these physicians or to replace their services at a higher cost level;

the impact of severe weather conditions, including the effects of hurricaneshurricanes, flash floods, wildfires and climate change;

uninsured and self-pay patients treated at our acute care facilities unfavorably impact our ability to satisfactorily and timely collect our self-pay patient accounts;

we have exposure to fluctuations in foreign currency exchange rates, primarily the pound sterling. We have international subsidiaries that operate in the United Kingdom. We routinely hedge our exposures to foreign currencies with certain financial institutions in an effort to minimize the impact of certain currency exchange rate fluctuations, but these hedges may be inadequate to protect us from currency exchange rate fluctuations. To the extent that these hedges are inadequate, our reported financial results or the way we conduct our business could be adversely affected. Furthermore, if a financial counterparty to our hedges experiences financial difficulties or is otherwise unable to honor the terms of the foreign currency hedge, we may experience material financial losseslosses, and;

RevenuePatient Recognitionservices provided in the U.S.: We report net patient service revenue at the estimated net realizable amounts from patients and third-party payers and others for services rendered. We have agreements with third-party payers that provide for payments to us at amounts different from our established rates. Payment arrangements include rates per discharge, reimbursed costs, discounted charges and per diem payments. Estimates of contractual allowances under managed care plans, which represent explicit price concessions, are based upon the payment terms specified in the related contractual agreements. We closely monitor our historical collection rates, as well as changes in applicable laws, rules and regulations and contract terms, to assure that provisions are made using the most accurate information available. However, due to the complexities involved in these estimations, actual payments from payers may be different from the amounts we estimate and record.

Long-Lived Assets: We review our long-lived assets for impairment whenever events or circumstances indicate that the carrying value of these assets may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of our asset based on our estimate of its undiscounted future cash flow. If the analysis indicates that the carrying value is not recoverable from future cash flows, the asset is written down to its estimated fair value and an impairment loss is recognized. Fair values are determined based on estimated future cash flows using appropriate discount rates. Please see additional disclosure below in Provision for Asset Impairments, for disclosure regarding a provision for asset impairment recorded during 2022.

Income before income taxes increased by $558$474 million, or 59%,32%, to $1.97 billion during 2025 as compared to $1.50 billion during 2024 as compared to $940 million during 2023.2024. The increase was attributable to:

an increase of $277$105 million at our behavioral health care facilities, as discussed below in Behavioral Health Services, andServices;

The following is an update to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Other than the following update,updates, there have been no material changes to the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. You should carefully consider the risk factors contained in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our other filings made with the Securities and Exchange Commission.

On March 9, 2026, we announced that we entered into a definitive agreement to acquire Talkspace, Inc. ("Talkspace") for $5.25 per share, or approximately $835 million in the aggregate. The transaction was approved by Talkspace's stockholders during the second quarter of 2026. The transaction is expected to close during the third quarter of 2026 and is subject to satisfaction of regulatory approvals and other customary closing conditions. Talkspace is a virtual behavioral healthcare company, with a network of approximately 6,000 licensed professionals that serve all 50 states, Washington, D.C., and Puerto Rico. We intend to finance the acquisition of Talkspace with additional borrowings pursuant to our Credit Agreement, as amended in April, 2026, as discussed in Note 4 to Condensed Consolidated Financial Statements – Treasury - Credit Facilities and Outstanding Debt Securities. The transaction is expected to close during the third quarter of 2026 and is subject to approval by Talkspace’s stockholders, satisfaction of regulatory approvals and other customary closing conditions.

The acquisition is subject to numerous risks and uncertainties including the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement or the failure to satisfy the closing conditions; the possibility that the consummation of the proposed acquisition is delayed or does not occur, including the failure of Talkspace’s stockholders to approve the proposed mergeroccur; uncertainty as to whether the parties will be able to complete the merger on the terms set forth in the merger agreement; uncertainty regarding the timing of the receipt of required regulatory approvals for the merger and the possibility that the parties may be required to accept conditions that could reduce or eliminate the anticipated benefits of the merger as a condition to obtaining the outcome of any legal proceedings that may be instituted against the parties or others following announcement of the transactions contemplated by the merger agreement; challenges, disruptions and costs of closing, integrating the business and achieving anticipated synergies, or that such synergies will take longer to realize than expected; failure to retain key employees of Talkspace during the period prior to closing or thereafter; failure to retain a significant portion of Talkspace’s providers or relationships with payors, risks that the merger and other transactions contemplated by the merger agreement disrupt current plans and operations that may harm the parties’ businesses or divert management’s attention from the parties’ ongoing business operations; and the amount of any costs, fees, expenses, impairments and charges related to the merger including costs and use of capital related to financing the merger.

As of MarchJune 31,30, 2026, we owned and/or operated 375376 inpatient facilities and 168 outpatient and other facilities located in 40 states, Washington, D.C., the United Kingdom and Puerto Rico.

Net revenues from our acute care hospitals, outpatient facilities and commercial health insurer accounted for 58%56% of our consolidated net revenues during each of the three-month periods ended MarchJune 31,30, 2026 and 2025, and 57% of our consolidated net revenues during each of the six-month periods ended June 30, 2026 and 2025. Net revenues from our behavioral health care facilities and commercial health insurer accounted for 42%44% of our consolidated net revenues during each of the three-month periods ended MarchJune 31,30, 2026 and 2025, and 43% of our consolidated net revenues during each of the six-month periods ended June 30, 2026 and 2025.

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $261$269 million and $227$247 million during the three-month periods ended MarchJune 31,30, 2026 and 2025, respectively, and $530 million and $474 million during the six-month periods ended June 30, 2026 and 2025, respectively. Total assets at our U.K. behavioral health care facilities were approximately $1.522$1.530 billion as of MarchJune 31,30, 2026 and $1.531 billion as of December 31, 2025.

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

legislation adopted on July 4, 2025 (the One Big Beautiful Bill Act),Act, which became law on July 4, 2025, attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditure. ThatThe legislationlaw also places limits on provider fees used to increase federal Medicaid funding to states. The legislationlaw prohibits states not previously having expanded Medicaid eligibility to 138% of federal poverty level from increasing the rate of current provider fees which fund certain state supplemental payments or increasing the base of the fee to a class or items of services that the fee did not previously cover. That current provider fee threshold will remain at 6%. For states having expanded Medicaid eligibility under the legislation,law, the provider fee threshold will be reduced by 0.5% annually between federal fiscal years 2028 and 2032 with the resulting threshold ultimately becoming 3.5%. Under current law, and based on our current expectations, we estimate that, commencing with the 2028 state fiscal years, our aggregate annual net benefit will be reduced, on an annually increasing and relatively pro rata basis, by approximately $432 million to $480$500 million by 2032. The legislationlaw also eliminateseliminated certain insurance exchange premium tax credits beyond 2025 and exchange enrollment ishas expectedalready to bebeen adversely impacted. On January 8, 2026, the U.S. House of Representatives passed H.R.1834 to extend for three years the enhanced premium tax credits ("EPTCs") that expired on December 31, 2025. As of early May 2026,However, no legislationlaw extending the EPTCs has been enacted, and there can be no assurance regarding the timing or outcome of future legislative action. We cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026. All of these factors, whichfactors could have a material unfavorable impact on our results of operations,operations and may be expected to reduce our revenue and likely increase the level of uncompensated care provided by our facilities;

there arehave been additional legislativechanges changesin the law that have resulted in and that are likely to result in major changes in the health care delivery system on a national or state level, including changes in the structure and administration of, and funding for, federal and state agencies and programs. For example, Congress has reduced to $0 the penalty for failing to maintain health coverage that was part of the original Patient Protection and Affordable Care Act, as amended by the Health and Education Reconciliation Act (collectively, the “ACA") as part of the Tax Cuts and Jobs Act. The Biden administration had issued executive orders implementing a special enrollment period permitting individuals to enroll in health plans outside of the annual open enrollment period and reexamining policies that may undermine the ACA or the Medicaid program. The Inflation Reduction Act of 2022 (“IRA”) was passed on August 16, 2022, which among other things, allows forenables the Centers for Medicare and Medicaid Services ("CMS") to negotiate prices for certain single-source drugs reimbursed under Medicare Part B and Part D. The American Rescue Plan Act’s expansion of subsidies to purchase coverage through an ACA exchange, which the IRA continued through 2025, has increased exchange enrollment.enrollment, Thesebut along with the EPTCs, these enhanced subsidies expired on December 31, 2025;

there have been numerous political and legal efforts to expand, repeal, replace or modify the ACA since its enactment, some of which have been successful, in part, in modifying the ACA, as well as court challenges to the constitutionality of the legislation.law. The U.S. Supreme Court held in California v. Texas that the plaintiffs lacked standing to challenge the legislation’slaw’s requirement to obtain minimum essential health insurance coverage, or the individual mandate. The Court dismissed the case without specifically ruling on the constitutionality of the ACA. TheACA legislationprovisions facedcontinue itsto mostbe recentsubject challengeto whencourt thechallenges Supremesuch Court, inas the June 2025 Kennedy v. Braidwood Management Supreme Court decision, which opined in favor of ACA HIV preventive care coverage.coverage and upheld the ACA's requirement that most private insurers and Medicaid expansion programs cover preventive services recommended by the United States Preventive Services Task Force, absent cost sharing. The impactsimpact of this decision cannot be predicted. Anyany future efforts to challenge, replace or replace the ACA or expand or substantially amend its provisionprovisions is unknown. See below in Sources of Revenues and Health Care Reform for additional disclosure;

the healthcare industry is labor intensive and salaries, wages and benefits are subject to inflationary pressures, as are supplies expense and other operating expenses. In the past, staffing shortages have, at times, required us to hire expensive temporary personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel. At certain facilities, particularly within our behavioral health care segment, there have been occasions when we were unable to fill all vacant positions and, consequently, we were required to limit patient volumes. Additionally, effective June 1, 2026, California is in the process of implementingimplemented staffing standards specific to acute psychiatric hospitals and requirements to determine appropriate staffing based on patient acuity and care needs, which are expected to take effect on June 1, 2026.needs. This canhas further increaseincreased our costs and may limit our revenue if we are required to limit the number of patients at our California facilities;

significant tariffs or other restrictions, if imposed on our imported pharmaceutical ingredients, medical devices, medical equipment and their ingredients and components, or otherwise on our suppliers, could escalate costs of medications, medical devices and medical equipment and disrupt our supply chains. While we continue to evaluate the potential impact of the new tariffs on our business, given the uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional tariffs or trade barriers by the U.S. and the impacted foreign countries, we can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful. Therefore, changes in laws or policies governing the terms of foreign trade, and in particular, increased trade restrictions, tariffs or taxes on imports from where our products or materials are made (either directly or through our suppliers) could have an impact on our competitive position, business operations and financial results;

as of early MayAugust 2026, Congress has enacted appropriations legislation funding most federal agencies for fiscal year 2026, following a lapse in appropriations affecting certain Department of Homeland Security operations that began on February 14, 2026 and was resolved on April 30, 2026. In the past several years political disputes concerning authorization of a federal budget have led to shutdown of substantial portions of the federal government and other federal budget authorization delays have occurred. Federal budget delays and federal government shutdowns are unpredictable and may occur in the future. We cannot predict whether or not there will be future appropriations legislation avoiding a federal government shutdown, however, our operating cash flows and results of operations could be materially unfavorably impacted by thea federal government shutdown;

as part of the Consolidated Appropriations Act of 2021 (the "CAA"), Congressincluded passed legislationprovisions aimed at preventing or limiting patient balance billing in certain circumstances. The CAA addresses surprise medical bills stemming from emergency services, out-of-network ancillary providers at in-network facilities, and air ambulance carriers. The CAA prohibits surprise billing when out-of-network emergency services or out-of-network services at an in-network facility are provided, unless informed consent is received. In these circumstances providers are prohibited from billing the patient for any amounts that exceed in-network cost-sharing requirements. HHS, the Department of Labor and the Department of the Treasury have issued rules to implement the legislation.CAA. The rules have limited the ability of our hospital-based physicians to receive payments for services at usually higher out-of-network rates in certain circumstances, and, as a result, have caused us to increase subsidies to these physicians or to replace their services at a higher cost;

the impact of athe increasing shift of care from inpatient settings to lower cost outpatient settings and controls designed to reduce inpatient services or payments for inpatient services which payers believe could have been performed on an outpatient or outside facility basis;

our ability to achieve operating and financial targets, develop and execute plans to offset to the extent possible impacts from the recent regulatory changes, including the enactment of the One Big Beautiful Bill Act andAct, the expiration of EPTCs, other legal and regulatory changes, and tariffs, attain expected levels of patient volumes and revenues, and control the costs of providing services;

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

there is a heightened risk of future cybersecurity threats, including ransomware attacks targeting healthcare providers. If successful, future cyberattacks could have a material adverse effect on our business. Any costs that we incur as a result of a data security incident or breach, including costs to update our security protocols to mitigate such an incident or breach could be significant. Any breach or failure in our operational security systems, or any third-party security systems that we rely on, can result in loss of data or an unauthorized disclosure of or access to sensitive or confidential member or protected personal or health information and could result in violations of applicable privacy and other laws, significant penalties or fines, litigation, loss of customers, significant damage to our reputation and business, and other liability or losses. We may also be subject to litigation related to our uses and disclosures of health information. We may also incur additional costs related to cybersecurity risk management and remediation. There can be no assurance that we or our service providers, if applicable, will not suffer losses relating to cyber-attacks or other information security breaches in the future or that our insurance coverage will be adequate to cover all the costs resulting from such events;

our ability to implement technology and other programs to drive efficiencies,efficiencies and improve patient outcomes and experiences, and the risks associated with the use of technologies by us or our services providers;

on March 9, 2026, we announced that we entered into a definitive agreement to acquire Talkspace, Inc. ("Talkspace") for $5.25 per share, or approximately $835 million in the aggregate. The transaction was approved by Talkspace's stockholders during the second quarter of 2026. The transaction is expected to close during the third quarter of 2026 and is subject to approval by Talkspace’s stockholders, satisfaction of regulatory approvals and other customary closing conditions. The acquisition is subject to numerous risks and uncertainties including uncertainty as to whether the parties will be able to complete the merger on the terms set forth in the merger agreement; uncertainty regarding the timing of the receipt of required regulatory approvals for the merger and the possibility that the parties may be required to accept conditions that could reduce or eliminate the anticipated benefits of the merger as a condition to obtaining the outcome of any legal proceedings that may be instituted against the parties or others following announcement of the transactions contemplated by the merger agreement; challenges, disruptions and costs of closing, integrating the business and achieving anticipated synergies, or that such synergies will take longer to realize than expected; failure to retain key employees of Talkspace during the period prior to closing or thereafter; failure to retain a significant portion of Talkspace’s providers or relationships with payors, risks that the merger and other transactions contemplated by the merger agreement disrupt current plans and operations that may harm the parties’ businesses or divert management’s attention from the parties’ ongoing business operations; and the amount of any costs, fees, expenses, impairments and charges related to the merger including costs and use of capital related to financing the merger;

Legislation adopted on July 4, 2025 attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditures and the legislation also places limits on provider taxes used to increase federal Medicaid funding to states. In addition, insurance exchange subsidies expired on December 31, 2025 which couldhas unfavorably impactimpacted insurance exchange enrollment.enrollment and has increased the level of uncompensated care that we provide. As these provisions become effective over the next several years, they may be expected to reduce our revenues and likely further increase the level of uncompensated care provided by our facilities. Please see Sources of Revenue below for additional disclosure related to Medicaid supplemental payment programs in various states in which we operate.

Significant tariffs or other restrictions, if imposed on our imported pharmaceutical ingredients, medical devices, medical equipment and their ingredients and components, could escalate costs of medications, medical devices and medical equipment and disrupt our supply chains. While we continue to evaluate the potential impact of the new tariffs on our business, given the uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional tariffs or trade barriers by the U.S. and the impacted foreign countries, we can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful. Therefore, changes in laws or policies governing the terms of foreign trade, and in particular, increased trade restrictions, tariffs or taxes on imports from where our products or materials are made (either directly or through our suppliers) could have an impact on our competitive position, business operations and financial results.

Financial results for the three-month periods ended MarchJune 31,30, 2026 and 2025:

The following table summarizes our results of operations and is used in the discussion below for the three-month periods ended MarchJune 31,30, 2026 and 2025 (dollar amounts in thousands):

Net revenues increased by 9.6%,8.3%, or $395$354 million, to $4.495$4.638 billion during the three-month period ended MarchJune 31,30, 2026, as compared to $4.100$4.284 billion during the firstsecond quarter of 2025. The net increase was primarily attributable to: (i) a $313$322 million, or 7.9%,7.8%, increase in net revenues generated from our acute care hospital services and behavioral health services operated during both periods (which we refer to as “Same Facility”), and; (ii) an other combined net increase of $82$32 million, consisting of primarily of a $48$47 million increase in provider tax assessments (which had no impact on income before income taxes since the amounts offset between net revenues and other operating expenses) and other combined net increase of $34 million consisting primarily of the net revenues generated during the first quarter of 2026 at a newly constructed acute care hospital located in Washington, D.C. (Cedar Hill Regional Medical Center which opened during the second quarter of 2025).

Income before income taxes (before income attributable to noncontrolling interests) increased by $49$6 million, or 12%,1%, to $469$479 million during the three-month period ended MarchJune 31,30, 2026 as compared to $420$473 million during the firstsecond quarter of 2025. The net increase was due to:

ana increasedecrease of $25$1 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

aan $2$8 million other combined net decrease.

Net income attributable to UHS increased by $32$5 million, or 10%,2%, to $349$358 million during the three-month period ended MarchJune 31,30, 2026, as compared to $317$353 million during the firstsecond quarter of 2025. This increase was primarily attributable to:

a $5$3 million decreaseincrease due to ana increasedecrease in income attributable to noncontrolling interests, and;

a decrease of $12$4 million resulting from an increase in the provision for income taxes resulting primarily from the increase in the provision for income taxes resulting from the $44$9 million increase in income before income taxes ($49$6 million increase in income before income taxes net ofand a $5$3 million increasedecrease in income attributable to noncontrolling interests).

The following table sets forth certain operating statistics for our acute care hospital services for the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025.

The following table summarizes the results of operations for our acute care facilities on a Same Facility basis and is used in the discussion below for the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025 (dollar amounts in thousands):

During the three-month period ended MarchJune 31,30, 2026, as compared to the comparable prior year quarter, net revenues from our acute care hospital services, on a Same Facility basis, increased by $188$189 million or 8.2%.

Income before income taxes (and before income attributable to noncontrolling interests) increased by $36$17 million, or 14%,7%, amounting to $303$246 million, or 12.3%9.8% of net revenues during the firstsecond quarter of 2026, as compared to $267$229 million, or 11.7%9.9% of net revenues during the firstsecond quarter of 2025.

During the three-month period ended MarchJune 31,30, 2026, net revenue per adjusted admission increased by 6.3%3.0% while net revenue per adjusted patient day increased 5.5%,2.8%, as compared to the comparable quarter of 2025. During the three-month period ended MarchJune 31,30, 2026, as compared to the comparable prior year quarter, inpatient admissions to our acute care hospitals decreasedincreased by 1.5% while adjusted admissions (adjusted for outpatient activity) wereincreased unchanged.by 2.9%. Patient days at these facilities decreasedincreased by 0.7%1.7% and adjusted patient days increased by 0.8%3.1% during the three-month period ended MarchJune 31,30, 2026, as compared to the comparable prior year quarter. The average length of inpatient stay at these facilities was 4.94.7 days during each of the three-month periods ended MarchJune 31,30, 2026 and 2025, respectively. The occupancy rate, based on the average available beds at these facilities, was 69%64% and 70%65% during the three-month periods ended MarchJune 31,30, 2026 and 2025, respectively.

On a Same Facility basis, during the three-month period ended MarchJune 31,30, 2026, as compared to the comparable quarter of 2025, salaries, wages and benefits expense increased by $39$53 million, or 4.3%.5.7% due, in part, to the increased patient volumes. As a percentage of net revenues, salaries, wages and benefits expense decreased to 38.6%39.5% during the firstsecond quarter of 2026 as compared to 40.0%40.5% during the firstsecond quarter of 2025.

Other operating expenses increased by $90$107 million, or 14.0%,15.9%, during the firstsecond quarter of 2026, as compared to the comparable quarter of 2025. Operating expenses incurred by our commercial health insurer, consisting primarily of medical costs, increased by $45$53 million, or 27.6%30.6% (due to an increase in membership), during the firstsecond quarter of 2026, as compared to the comparable quarter of 2025. Excluding the operating costs of our commercial insurer from each period, other operating expenses increased by $45$54 million, or 9.3%.10.8%. Contributing to the increased operating expenses during the firstsecond quarter of 2026, as compared to the comparable quarter of 2025, was a $20$22 million, or 12.3%,12.4%, aggregate increase in physician expenses incurred at certain hospitals. Also contributing to the increased operating expenses during the second quarter of 2026, as compared to the comparable quarter of 2025, was $17 million of expense recorded in connection with an increase to our reserves for self-insured professional and general liability claims, as discussed above in Adjustments to self-insured professional and general liability reserves. As a percentage of net revenues, other operating expenses increased to 29.5%31.1% during the firstsecond quarter of 2026, as compared to 28.0%29.0% during the comparable quarter of 2025.

Supplies expense increased by $17$1 million, or 4.8%,0.3%, during the firstsecond quarter of 2026, as compared to the firstcomparable quarter of 2025. As a percentage of net revenues, supplies expense decreased to 14.8%14.4% during the three-month period ended MarchJune 31,30, 2026, as compared to 15.3%15.6% during the firstsecond quarter of 2025.

The following table summarizes the results of operations for all our acute care operations during the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025. These amounts include: (i) our acute care results on a Same Facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including the results of recently acquired and/or opened facilities and businesses. Dollar amounts below are reflected in thousands.

During the three-month period ended MarchJune 31,30, 2026, as compared to the comparable prior year quarter, net revenues from our acute care hospital services increased by $252$206 million, or 10.7%,8.6%, due to: (i) the $188$189 million, or 8.2% increase in Same Facility revenues, as discussed above, and; (ii) an other combined net increase of $64$17 million consisting of increased provider tax assessments and the net revenues generated during the first quarter of 2026 at a newly constructed acute care hospital located in Washington, D.C. (Cedar Hill Regional Medical Center which opened during the second quarter of 2025).assessments.

Income before income taxes increasedremained byrelatively $25unchanged at $228 million, or 10%, to $288 million, or 11.0%8.7% of net revenues during the firstsecond quarter of 2026, as compared to $263$228 million, or 11.1%9.5% of net revenues during the comparable quarter of 2025. The increase resulted primarily from: (i) the $36$17 million, or 14%,7%, increase in income before income taxes from our acute care hospital services, on a Same Facility basis, as discussed above, partiallywas offset by; (ii) an $11 million increase in the aggregate pre-tax losses incurred during the firstsecond quarter of 2026, as compared to the first quarter of 2025,2026 at the recently completed and opened CedarAlan HillB. RegionalMiller Medical Center located in Washington, D.C., as well as the new acute care hospital being constructed in Palm Beach Gardens, FL (Alan B. Miller Medical Center) that is scheduled to be completed and opened during the second quarter of 2026.FL.