Financial Analysis

NOTE 8 CONTINGENCIES We operate in a highly regulated and litigious industry. As a result, various lawsuits, claims and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. We are also subject to claims and suits arising in the ordinary course of business, including claims for personal injuries or wrongful restriction of, or interference with, physicians staff privileges. In certain of these actions, the claimants may seek punitive damages against us, which may not be covered by insurance. We are also subject to claims by various taxing authorities for additional taxes and related interest and penalties. The resolution of any such lawsuits, claims or legal and regulatory proceedings could have a material, adverse effect on our results of operations, financial position or liquidity. Health care companies are subject to numerous investigations by various governmental agencies. Under the federal False Claims Act (FCA), private parties have the right to bring qui tam , or whistleblower, suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions. Certain of our individual facilities have received, and from time to time other facilities may receive, government inquiries from, and may be subject to investigation by, federal and state agencies. Depending on whether the underlying conduct in t …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 7 DEBT A summary of our debt at June 30, 2026 and December 31, 2025, including related interest rates at June 30, 2026, follows (dollars in millions): June 30, 2026 December 31, 2025 Short-term borrowings: Commercial paper (average life of 38 days, weighted average rate of 4.3 %) $ 3,890 $ 2,207 Long-term debt: Other debt (effective interest rate of 4.9 %) 1,069 1,021 Senior unsecured credit facility (effective interest rate of 4.8 %) 1,010 Senior unsecured notes payable through 2095 (effective interest rate of 5.1 %) 44,200 43,700 Debt issuance costs and discounts ( 451 ) ( 436 ) Total long-term debt (average life of 11.7 years, rates averaging 5.1 %) 45,828 44,285 Total debt 49,718 46,492 Less amounts due within one year 6,264 4,889 $ 43,454 $ 41,603 During April 2026, we issued $ 3.000 billion aggregate principal amount of senior notes comprised of (i) $ 1.000 billion aggregate principal amount of 4.700 % senior notes due 2031, (ii) $ 750 million aggregate principal amount of 5.000 % senior notes due 2033 and (iii) $ 1.250 billion aggregate principal amount of 5.300 % senior notes due 2036 . We used the net proceeds to repay borrowings under the commercial paper program and for general corporate purposes. During May 2026, we redeemed all $ 1.500 billion aggregate principal amount of 5.250 % senior notes due 2026 and all $ 1.000 billion aggregate principal amount of 5.375 % senior notes due 2026. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 6 ASSETS AND LIABILITIES MEASURED AT FAIR VALUE Accounting Standards Codification 820, Fair Value Measurements and Disclosures (ASC 820), emphasizes fair value is a market-based measurement, and fair value measurements should be determined based on the assumptions market participants would use in pricing assets or liabilities. ASC 820 utilizes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs classified within Levels 1 and 2 of the hierarchy) and the reporting entitys own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entitys own assumptions, as there is little, if any, related market activity. The investments of our insurance subsidiaries are general …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

NOTE 3 INCOME TAXES Our provisions for income taxes for the quarters ended June 30, 2026 and 2025 were $ 564 million and $ 524 million, respectively, and the effective tax rates were 22.6 % and 21.7 % ( 24.9 % and 24.1 % excluding net income attributable to noncontrolling interests as it relates to consolidated partnerships), respectively. Our provisions for income taxes for the six months ended June 30, 2026 and 2025 were $ 994 million and $ 1.026 billion, respectively, and the effective tax rates were 20.8 % and 21.6 % ( 23.0 % and 23.9 % excluding net income attributable to noncontrolling interests as it relates to consolidated partnerships), respectively. Our provisions for income taxes included tax benefits related to settlements of employee equity awards of $ 107 million and $ 33 million for the six months ended June 30, 2026 and 2025, respectively. Our gross unrecognized tax benefits were $ 553 million, excluding accrued interest and penalties of $ 98 million, as of June 30, 2026 ($ 519 million and $ 78 million, respectively, as of December 31, 2025 ). Unrecognized tax benefits of $ 304 million ($ 274 million as of December 31, 2025) would affect the effective rate, if recognized. At June 30, 2026 , the Internal Revenue Service (IRS) was examining the 2019 income tax return of an affiliate of the Company. We are subject to examination by the IRS for tax years after 2023, as well as by state and foreign taxing authorities. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 10 SEGMENT AND GEOGRAPHIC INFORMATION We operate in one line of business, which is operating hospitals and related health care entities. We operate in three geographically organized groups: the National, Atlantic and American Groups. At June 30, 2026 , the National Group included 53 hospitals located in Alaska, California, Idaho, Kentucky, Nevada, New Hampshire, North Carolina, Tennessee, Utah and Virginia; the Atlantic Group included 64 hospitals located in Florida, Georgia, Northern Kansas, Missouri and South Carolina; and the American Group included 66 hospitals located in Colorado, Central Kansas, Louisiana and Texas. The seven hospitals we operate in England are included in the Corporate and other group. NOTE 10 SEGMENT AND GEOGRAPHIC INFORMATION (continued) Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, losses and gains on sales of facilities, losses on retirement of debt, income taxes and net income attributable to noncontrolling interests. We use adjusted segment EBITDA as an analytical indicator for purposes of allocating resources to geographic areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the health care industry and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items exclud …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 9 SHARE REPURCHASE TRANSACTIONS AND OTHER COMPREHENSIVE LOSS During each of January 2026 and January 2025 , our Board of Directors authorized share repurchase programs, both of which were for up to $ 10 billion of our outstanding common stock. During the six months ended June 30, 2026, we repurchased 7.909 million shares of our common stock at an average price of $ 447.53 per share through market purchases pursuant to the January 2025 authorization (which was fully utilized during the first quarter of 2026) and the January 2026 authorization. At June 30, 2026 , we had $ 7.210 billion of repurchase authorization available under the January 2026 authorization. The components of accumulated other comprehensive loss are as follows (dollars in millions): Unrealized Losses on Available-for-Sale Securities Foreign Currency Translation Adjustments Defined Benefit Plans Total Balances at December 31, 2025 $ ( 11 ) $ ( 299 ) $ 5 $ ( 305 ) Unrealized losses on available-for-sale securities ( 2 ) ( 2 ) Foreign currency translation adjustments, net of $ 3 income tax benefits ( 27 ) ( 27 ) Balances at June 30, 2026 $ ( 13 ) $ ( 326 ) $ 5 $ ( 334 ) …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing