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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Ardent Health, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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We are subject to market risk from exposure to changes in interest rates based on our financing, investing and cash
management activities. We do not, however, hold or issue financial instruments or derivatives for trading or speculative
purposes. At June 30, 2026, the following components of our Senior Secured Credit Facilities bore interest at variable rates at
specified margins above either the agent bank’s alternate base rate or Term SOFR: (i) a $777.5 million, seven-year term loan;
and (ii) a $325.0 million, five-year asset-based revolving credit facility. As of June 30, 2026, we had outstanding variable rate
debt of $761.1 million.
At June 30, 2026, we had interest rate swap agreements with notional amounts totaling $400.4 million, expiring June 26,
2029. Please refer to Note 5, Interest Rate Swap Agreements, to our accompanying condensed consolidated financial
statements included elsewhere in this Quarterly Report for more information on the interest rate swap agreements. Under the
February 2025 Agreements, expiring June 26, 2029, we are required to make monthly fixed rate payments at annual rates
ranging from 3.97% to 3.98% and the counterparties are required to make monthly floating rate payments to us based on one-
month Term SOFR, each subject to a floor of 0.50%.
Although changes in the alternate base rate or Term SOFR would affect the cost of funds borrowed in the future, we believe
the effect, if any, of reasonably possible near-term changes in interest rates on our variable rate debt on our consolidated
financial position, results of operations or cash flows would not be material. Based on the outstanding borrowings and impact
of the interest rate swaps in place at June 30, 2026, a one percent change in the interest rate would result in a $3.8 million
increase or decrease in our annual interest expense.
We currently believe we have adequate liquidity to fund operations during the near term through the generation of operating
cash flows, cash on hand and access to our ABL Facilities. Our ability to borrow funds under our ABL Facilities is subject to,
among other things, the financial viability of the participating financial institutions. While we do not anticipate any of our
current lenders defaulting on their obligations, we are unable to provide assurance that any particular lender will not default at
a future date.