Adjusted EBITDAR is a commonly used non-GAAP valuation measure used by our management, research analysts,
investors and other interested parties to evaluate and compare the enterprise value of different companies in our
industry. Adjusted EBITDAR excludes: (1) certain material noncash items and unusual or non-recurring items that we do
not expect to continue in the future; (2) certain other adjustments that do not impact our enterprise value; and (3) rent
expense payable to our REITs. We operate 30 acute care hospitals, 12 of which we lease from two REITs, Ventas and
MPT, pursuant to long-term lease agreements. Additionally, we lease 18 medical office buildings from Ventas pursuant
to lease agreements with initial terms of 12 years and eight options to renew for additional five-year terms. Our
management views the long-term lease agreements with Ventas and MPT, as more like financing arrangements than
true operating leases, with the rent payable to such REITs being similar to interest expense. As a result, our capital
structure is different than many of our competitors, especially those whose real estate portfolio is predominately
owned and not leased. Excluding the rent payable to such REITs allows investors to compare our enterprise value to
those of other healthcare companies without regard to differences in capital structures, leasing arrangements and
geographic markets, which can vary significantly among companies. Our management also uses Adjusted EBITDAR as
one measure in determining the value of prospective acquisitions or divestitures. Finally, financial covenants in certain
of our lease agreements, including the Ventas Master Lease, use Adjusted EBITDAR as a measure of compliance.
Adjusted EBITDAR does not reflect our cash requirements for leasing commitments. As such, our presentation of
Adjusted EBITDAR should not be construed as a performance or liquidity measure.
Because not all companies use identical calculations, our presentation of Adjusted EBITDAR may not be comparable to
other similarly titled measures of other companies. While we believe this is a useful supplemental valuation measure
for investors and other users of our financial information, you should not consider Adjusted EBITDAR in isolation or as a
substitute for net income or any other items calculated in accordance with GAAP. Adjusted EBITDAR has inherent
material limitations as a valuation measure, because it adds back certain expenses to net income, resulting in those
expenses not being taken into account in the valuation measure. The payment of rent is a necessary element of our
valuation. Because Adjusted EBITDAR excludes this and other items, it has material limitations as a measure of our
valuation.
Forward-Looking Statements
This press release may contain "forward-looking statements," as that term is defined in the U.S. federal securities laws.
These forward-looking statements include, but are not limited to, statements other than statements of historical facts,
including, among others, statements relating to our future financial performance, our business prospects and strategy,
anticipated financial position, liquidity and capital needs, the industry in which we operate and other similar matters.
Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "could," "would,"
"will," "may," "can," "continue," "potential," "should" and the negative of these terms or other comparable terminology
often identify forward-looking statements. When reviewing this press release, you should keep in mind the substantive risk
and uncertainties that could impact our business. These forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results
contemplated by the forward-looking statements. These risks and uncertainties could cause actual results to differ
materially from those projected in forward-looking statements contained in this press release or implied by past results and
trends. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those
contemplated include, among others: (1) general economic and business conditions, both nationally and in the regions in
which we operate, including the impact of challenging macroeconomic conditions and inflationary pressures, current
geopolitical instability, and impacts from the imposition of, or changes in, tariffs, as well as the potential impact on us of
uncertain political, financial, credit and capital conditions; (2) possible reductions or other changes in Medicare, Medicaid
and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs or state
directed payments, that could have an adverse effect on our revenues and business; (3) reduction in the reimbursement
rates paid by commercial payors, increased reimbursement denials or payment delays by commercial payors, our inability
to retain and negotiate favorable contracts with private third party payors, or an increasing volume of uninsured or
underinsured patients; (4) effects of changes in healthcare policy or legislation, including the One Big Beautiful Bill Act (the
"OBBBA") and any other reforms that have or may be undertaken by the current presidential administration, and legal and
regulatory restrictions on our hospitals that have physician owners; (5) the ability to achieve operating and financial targets,
develop and execute mitigation plans to offset to the extent possible impacts from the OBBBA, the expiration of temporary
enhanced subsidies for individuals eligible to purchase insurance coverage through health insurance marketplaces and
imposition of tariffs, attain expected levels of patient volumes and revenues, and control the costs of providing services; (6)
security threats, catastrophic events and other disruptions affecting our, our service providers’ or our joint venture ("JV")
partners’ information technology and related systems, which have adversely affected, and could in the future adversely
affect, our relationships with patients and business partners and subject us to legal claims and liabilities, reputational harm
and business disruption and adversely affect our financial condition; (7) the highly competitive nature of the healthcare
industry and continued industry trends towards clinical transparency and value-based purchasing may impact our
