Ardent Health, Inc.ARDT
Ardent Health, Inc. Income Taxes Disclosure
Income Taxes
Significant components of the Company’s net deferred tax assets (liabilities) are as follows (in thousands):
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Patient accounts receivable, net | $ | 8,702 | $ | 19,430 | |||||||
| Accrued liabilities | 976 | 5,253 | |||||||||
| Deferred compensation | 20,196 | 17,751 | |||||||||
| Self-insurance reserves | 35,137 | 31,252 | |||||||||
| Financing costs | 10,521 | 16,082 | |||||||||
| Lease liability | 283,704 | 278,369 | |||||||||
| Other | 4,699 | 4,697 | |||||||||
| Federal tax credits | 163 | 89 | |||||||||
| Federal net operating loss carryforward | 3,150 | 2,369 | |||||||||
| State net operating loss carryforward | 8,380 | 8,560 | |||||||||
Change in value of derivatives | 1,274 | — | |||||||||
| Total deferred tax assets | 376,902 | 383,852 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Prepaid expenses | (6,856) | (7,971) | |||||||||
| Right of use assets | (283,704) | (278,369) | |||||||||
| Depreciation and amortization | (73,371) | (61,423) | |||||||||
| Partnership basis differences | (33,061) | (13,897) | |||||||||
| Change in value of derivatives | — | (3,440) | |||||||||
| Total deferred tax liabilities | (396,992) | (365,100) | |||||||||
| Valuation allowance for deferred tax assets | (6,468) | (6,431) | |||||||||
| Net deferred tax (liabilities) assets | $ | (26,558) | $ | 12,321 | |||||||
At December 31, 2025 and 2024, the Company had federal net operating loss carryforwards for income tax purposes totaling $15.0 million and $11.3 million, respectively. Federal net operating losses totaling $5.1 million expire between 2034 and 2037. Federal net operating losses totaling $9.9 million generated in years beginning after December 31, 2017 may be carried forward indefinitely. Certain amounts of the federal net operating losses are subject to limitations on use. The Company expects $5.0 million of the carryforwards to expire unused and has recorded a valuation allowance for those amounts. At December 31, 2025 and 2024, the Company had no capital loss carryforwards. At December 31, 2025 and 2024, the Company had state net operating loss carryforwards of $204.4 million and $210.1 million, respectively. State net operating losses of $111.5 million expire between 2037 and 2045, and state net operating losses of $92.9 million may be carried forward indefinitely.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the positive and negative evidence from all sources, including net operating loss carryback opportunities, historical operating results, prudent and feasible tax planning strategies and projections of future taxable income. Based on the analysis of positive and negative evidence, the Company recorded a valuation allowance of $6.5 million and $6.4 million at December 31, 2025 and 2024, respectively, for the uncertainty regarding the ability to utilize certain deferred tax assets.
With respect to the change in valuation allowances, the Company recognized no federal tax expense or benefits during the years ended December 31, 2025 and 2024, and the Company recognized state tax expense of $0.1 million during each of the years ended December 31, 2025 and 2024.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into federal law. The Company evaluated the income tax effects of OBBBA in accordance with ASC 740 and recorded the impact in the period of enactment. The provisions of OBBBA expected to have the most significance to the Company relate to amendments to the limitation of the deductibility of business interest under Internal Revenue Code §163(j) and modifications to bonus depreciation rules.
The OBBBA modifies §163(j) by changing the formula to calculate adjusted taxable income (“ATI”) to add back tax depreciation and amortization expense. As a result of this change, the Company expects an increase in the amount of deductible business interest expense beginning in 2025.
The OBBBA modifies the bonus depreciation rules by reinstating 100% bonus depreciation for qualified property placed in service after January 19, 2025 and making changes to eligible asset classes. As a result of this change, the Company expects an increase in the amount of tax depreciation expense beginning in 2025.
The Company's effective tax rate is not impacted by the OBBBA changes. The Company's inventory of deferred tax assets and liabilities has been adjusted to reflect the impact of the OBBBA on future tax years.
The Company has considered the impact of the OBBBA on the realizability of deferred tax assets and determined that no valuation allowance was required as of December 31, 2025. The OBBBA did not have a material impact on the Company's unrecognized tax benefits.
Significant components of the provision for income taxes are as follows (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Current: | |||||||||||||||||
Federal | $ | 6,097 | $ | 30,560 | $ | 11,190 | |||||||||||
State | 6,532 | 9,511 | 6,693 | ||||||||||||||
Total current | 12,629 | 40,071 | 17,883 | ||||||||||||||
Deferred: | |||||||||||||||||
Federal | 36,735 | 21,965 | 5,814 | ||||||||||||||
State | 6,859 | 1,316 | (1,060) | ||||||||||||||
Total deferred | 43,594 | 23,281 | 4,754 | ||||||||||||||
| Total provision | $ | 56,223 | $ | 63,352 | $ | 22,637 | |||||||||||
The Company’s consolidated effective tax rate from continuing operations differed from the amounts computed using the federal statutory rate as set forth below (dollar amounts in thousands):
Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||||
| Tax at federal statutory rate | $ | 60,135 | 21.0 | % | $ | 76,243 | 21.0 | % | $ | 31,839 | 21.0 | % | ||||||||||||||||||||||||||
State taxes, net of federal benefits (a) | 12,191 | 4.3 | 9,758 | 2.7 | 4,217 | 2.8 | ||||||||||||||||||||||||||||||||
| Non-taxable or non-deductible items | ||||||||||||||||||||||||||||||||||||||
| Permanent differences | 899 | 0.3 | 1,621 | 0.4 | 1,707 | 1.1 | ||||||||||||||||||||||||||||||||
| Executive and equity-based compensation limitations | 4,676 | 1.6 | 3,545 | 1.0 | 190 | 0.1 | ||||||||||||||||||||||||||||||||
| Noncontrolling interests | (19,761) | (6.9) | (18,099) | (5.0) | (15,171) | (10.0) | ||||||||||||||||||||||||||||||||
| Change in valuation allowance | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Change in unrecognized tax benefit | — | — | (9,210) | (2.5) | 664 | 0.5 | ||||||||||||||||||||||||||||||||
| Tax credits | (382) | (0.1) | (464) | (0.1) | (1,001) | (0.7) | ||||||||||||||||||||||||||||||||
| Other, net | (1,535) | (0.5) | (42) | — | 192 | 0.1 | ||||||||||||||||||||||||||||||||
| $ | 56,223 | 19.7 | % | $ | 63,352 | 17.5 | % | $ | 22,637 | 14.9 | % | |||||||||||||||||||||||||||
| (a) | State taxes in Oklahoma and Texas for 2025, Texas and New Mexico for 2024 and Texas for 2023 made up the majority (greater than 50%) of the tax effect in this category. | |||||||||||||||||||||||||||||||||||||
The Company paid the following income taxes (net of refunds) during the periods presented, which are disaggregated by federal and significant state jurisdictions (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Federal | $ | 23,999 | $ | 32,600 | $ | 14,000 | |||||||||||
| State | |||||||||||||||||
| Texas | 5,481 | 4,605 | 4,900 | ||||||||||||||
| New Mexico | 3,030 | 2,130 | — | ||||||||||||||
| New Jersey | 2,080 | — | — | ||||||||||||||
| Other | 1,920 | 2,268 | 533 | ||||||||||||||
| Total | $ | 36,510 | $ | 41,603 | $ | 19,433 | |||||||||||
The Company follows the provisions of ASC 740, Income Taxes, regarding unrecognized tax benefits. At December 31, 2025, the Company had no liability for unrecognized tax benefits and no accrued interest expense. During the year ended December 31, 2024, the Company released its liability for unrecognized tax benefits, as well as the accrued interest expense related to the unrecognized tax benefits, due to the expiration of its statute of limitations.
As of December 31, 2025, the Company has no ongoing or pending federal examinations for prior years and has an ongoing examination by the State of Idaho for the 2023 tax year. Based on available information as of the reporting date, management does not expect the resolution of this examination to have a material impact on the Company's consolidated financial statements. The Company has outstanding federal income tax refund claims for the 2016 and 2018 tax years. Since the total amount of the refund claims is equal to $10.0 million, which was classified within other current assets on the Company's consolidated balance sheet at December 31, 2025 and 2024, the refund claims are subject to ongoing Joint Committee on Taxation reviews. As of December 31, 2025 and 2024, the Company has accrued $2.1 million and $0.8 million of interest income related to the refund claim respectively, which has been included as part of the Company's income tax expense. The Company's tax years from 2022 through 2025 remain open to examination by federal and state taxing authorities.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.