21^ST CENTURY ONCOLOGY HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ý No o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No ý

Note: The registrant is a voluntary filer and is not subject to the filing requirements.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

None of the voting or non-voting common equity of the registrant is held by a non-affiliate of the registrant. There is no publicly traded market for any class of common equity of the registrant.

As of August 23, 2016, there were 1,059 shares of the registrant's common stock, $0.01 par value per share, issued and outstanding, all of which are 100% owned by 21^st Century Oncology Investments, LLC.

Some of the information set forth in this Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. We may make other written and oral communications from time to time that contain such statements. Forward-looking statements, including statements as to industry trends, future expectations and other matters that do not relate strictly to historical facts are based on certain assumptions by management. These statements are often identified by the use of words such as "may," "will," "expect," "plans," "believe," "anticipate," "project," "intend," "could," "estimate," or "continue," "may increase," "may fluctuate," and similar expressions or variations, and are based on the beliefs and assumptions of our management based on information then currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks discussed herein under the heading "Risk Factors." We caution readers to carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are made and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of such statements.

References in this Annual Report on Form 10-K to "we," "us," "our" and the "Company" are references to 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.) and its subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates, unless the context requires otherwise or unless indicated otherwise. References in this Annual Report on Form 10-K to "Parent" and "21CH" are references to 21^st Century Oncology Holdings, Inc. and not to its subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates. References in this Annual Report on Form 10-K to "21C" are references to 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), 21CH's direct subsidiary. References in this Annual Report on Form 10-K to "our treatment centers" refer to owned, managed and hospital based treatment centers.

We are the leading global, physician-led provider of integrated cancer care ("ICC") services. Our physicians provide comprehensive, academic quality, cost-effective coordinated care for cancer patients in personal and convenient community settings (our "ICC model"). We believe we offer a powerful value proposition to patients, hospital systems, payers and risk-taking physician groups by delivering high quality care and first rate clinical outcomes at lower overall costs through outpatient settings, clinical excellence, physician coordination and scaled efficiency.

Our operating philosophy is to provide academic center level care to cancer patients in a community setting. We employ or affiliate with leading physicians and provide them with the advanced medical technology necessary to achieve optimal outcomes. In support of our physicians, we develop and invest in medical management software, training programs and business enterprise systems to allow for rapid diffusion of clinical initiatives resulting in continuous quality improvement. In addition, we maintain strong research relationships with academic centers of excellence and research groups, providing us with access to cutting edge treatments. As a result, we attract and retain talented physician leaders by providing opportunities to work in a stimulating clinical environment designed to deliver high quality patient care.

Our Company was founded in 1983 by a group of physicians that came together to deliver academic level quality radiation therapy at the community level. With significant investment in clinical programs, operating infrastructure and business systems, we expanded our delivery of sophisticated radiation therapy services domestically and then globally. Given the changing healthcare landscape, increased focus on lower cost, higher quality care and the potential for value-based reimbursement, we built a complete and integrated cancer care platform to better meet the needs of patients, physicians and payers. We proactively broadened our provision of care to include a full spectrum of cancer care services by employing and affiliating with physicians in the related specialties of medical oncology, breast, gynecological, general surgery and urology. This innovative approach to cancer care through our

ICC model enables us to collaborate across our physician base, integrate services and payments for related medical needs and disseminate best practices. We believe this results in better cancer care to patients, a stronger presence in each market we serve and the ability to capitalize on changes and developments in the payment and delivery landscape.

We have demonstrated an ability to grow our business through various environments, and we believe our business is poised for accelerated success given the current industry focus on delivering high quality care in a lower cost setting. The key components of our business model include:

In addition to our demonstrated success in varied environments, we have capitalized on the strength and breadth of our platform to develop new growth opportunities. In 2011, we acquired and partnered with the management team of Medical Developers, LLC ("MDLLC"), the largest company in Latin America dedicated to radiation therapy. This investment was very attractive due to the demand created by a significantly underserved patient population, increased detection, a growing middle-class and expanded insurance access. MDLLC provided us an opportunity for enhanced growth rates and diversified payment sources.

We have grown through a combination of organic, internally developed ("de novo"), acquisition and joint venture opportunities and innovative payer and hospital system relationships. We believe these major avenues for growth will become increasingly attractive as our scale, sophistication and clinical capabilities continue to distinguish us from our competition. We will continue to employ or affiliate with quality physicians, acquire freestanding radiation oncology centers and partner with leading health systems and payers as a result of the superior value proposition we provide each of these constituents:

For the year ended December 31, 2015, we generated total revenues of $1.1 billion. During this time period, 89.1% of our net revenue was derived in North America, and 10.9% in Latin America.

On February 10, 2014, we invested in Florida-based SFRO Holdings, LLC (together with its subsidiaries, "SFRO"), acquiring 65% of the equity interests in SFRO, increasing the number of our radiation therapy treatment centers by 21 and adding 88 additional ICC and radiation oncology physicians (the "SFRO Joint Venture"). On July 2, 2015, we purchased the remaining 35% of SFRO.

We were incorporated on October 9, 2007 under the name Radiation Therapy Services Holdings, Inc. and currently exist as a Delaware corporation. On December 5, 2013, we changed our name to 21^st Century Oncology Holdings, Inc. Our business was originally formed in 1983. On February 21, 2008, we consummated the merger of a wholly owned subsidiary of 21CH with and into 21C, with 21C as the surviving corporation and as wholly owned subsidiary of 21CH (the "Merger"). We were acquired in 2008 pursuant to the Merger by affiliates of Vestar Capital Partners ("Vestar"). Our principal executive office is located at 2270 Colonial Boulevard, Fort Myers, Florida 33907 and our telephone number is (239) 931-7254. The address of our main website is www.21co.com.

Cancer treatment is an important, large and growing market globally. We operate in the $290 billion global cancer care market, of which the domestic market comprises approximately $125 billion, as of 2010. Cancer is the second leading cause of death in the United States and globally. According to the most recent data available from the World Health Organization, global cancer prevalence includes approximately 33 million cases with approximately 14 million new cases and approximately 8 million cancer-related deaths per year. In addition to the scale of the current addressable market, cancer incidence in the United States is estimated to grow at an approximately 2% rate annually through 2030, with an outsized proportion of treatments occurring in outpatient settings which are expected to grow at approximately 31% compared to approximately 3% for inpatient services, from 2013 to 2023. As the population ages, the number of U.S. cancer diagnoses is expected to continue to increase, as approximately 86% of all cancers diagnosed were in persons 50 years of age and older. Additionally, since 2006, the percentage of cancer cases addressed by radiation has grown from approximately 55% to nearly two-thirds.

We believe we are well-positioned to benefit from other major trends currently affecting the healthcare services markets in which we compete, including:

Rising healthcare costs have continued to strain federal, state and local, as well as employer and patient budgets. In addition, domestic cancer costs are projected to grow from $125 billion in 2010 to $207 billion by 2020, and oncology is typically one of the top two largest cost categories for health plans. Efficient management of cancer care across the patient continuum through utilization of more efficient outpatient settings, which can cost less for commercial payers than other alternatives, and coordination across medical disciplines represents a significant opportunity to contain and reduce overall healthcare costs while improving quality and outcomes. In addition, newly developed health insurance exchanges may ultimately present a significant opportunity for us, as payers look to contract with high quality, low cost providers in local markets. We believe we are well positioned to benefit from this trend as the largest provider of lower cost, convenient and high clinical quality cancer care service in outpatient settings. This will also be of increased importance as patients have an increased responsibility for their healthcare costs.

Recent healthcare legislation, continued cost pressures on payers, and the increase in the number of patients with complex conditions will likely create significant opportunities for cost-effective, sophisticated providers that can offer coordinated, integrated care delivery. Private payers are increasingly moving toward narrow networks and directing patients to the most coordinated and cost-effective providers of care. Additionally, certain health reform initiatives promote the transition from traditional fee-for-service payment models to more "value-based" or "capitated" payment models where overall outcomes and census management are more important success factors than the number of procedures delivered. These trends require improved care coordination and communication throughout an episode of care to enable providers to analyze patient data and identify more effective treatment protocols that ultimately improve outcomes and reduce costs. We have an established history of offering high quality, cost effective integrated services and developing the related infrastructure to ensure coordinated care across specialists. We believe we are well positioned for the changing delivery landscape where payers are searching for partners to help manage medical costs without sacrificing care.

Many hospitals and health systems recognize the strategic, operational and financial challenges stemming from healthcare reform, the burgeoning efforts to contain healthcare costs, and growing consumer preference for treatment in more comfortable community care settings. In response, many health systems are developing strategies to reduce operating costs, align with physicians, create additional service lines, expand their geographic footprint and service locations and prepare for new value-based payment models. A growing number of health systems are entering into strategic partnerships with select provider organizations, such as ours, in order to achieve these goals.

Consolidation among healthcare providers, including facility operators and clinicians, is expected to continue due to increasing cost pressure and greater complexities as well as requirements imposed by new payment, reporting and delivery systems. Independent physicians are increasingly finding employment in hospitals or affiliating with larger group practices like ours. In addition, recent reimbursement cuts in our industry, coupled with the high cost of technology and the necessity of coordination of care, have contributed to a more rapid pace of consolidation relative to prior years.

The radiation therapy and related physician specialist landscape is highly fragmented. In 2013, there were approximately 2,340 locations providing radiation therapy in the United States, of which approximately 1,100 were freestanding, or non-hospital based, treatment centers. We believe the Company holds approximately 13% of the freestanding market. It is estimated that there are approximately 794,000 physicians in the United States today, of which 37% remain independent as compared to approximately 50% a decade ago. The Latin American radiation therapy market is similarly fragmented with most competition coming from hospitals and smaller local groups. In Argentina, we are the largest radiation therapy provider. In the majority of other Latin American markets that we serve, we are the number one or number two provider.

Beginning from a foundation of high-quality radiation therapy centers, we have developed a clinically integrated network of multiple medical disciplines in order to provide a comprehensive set of cancer care services for our patients. In many markets, we employ medical oncologists, breast surgeons, colorectal surgeons, urologists, gynecologic oncologists and other medical professionals whose surgical and medical skills complement our legacy radiation oncology services to complete the end-to-end care of the cancer patient. By leveraging our clinical data management systems, best practices clinical pathway models and clinical performance metrics developed and refined over many years on the radiation therapy side of the business, we have been able to achieve effective care coordination among these other disciplines and an overall level of medical practice comparable to that observed at the best academic cancer centers in the US.

Particularly unique to our model is our ability to provide a high level of comprehensive and coordinated cancer care in a community setting. Many of our competitors in our markets instead consist of single-specialty practices offering more fragmented care. Further differentiating us from our competitors is our capacity in each market to provide a complete selection of advanced radiotherapy services that may otherwise be locally unavailable. In addition, we provide support services including psychological and nutritional counseling as well as transportation assistance (consistent with regulatory guidelines).

We have started beta testing adaptive radiotherapy, a sophisticated technology that allows for near real-time adaptation of radiation dose delivery to anatomic changes that occur during a treatment course, and have created an internal development group to focus on refining and commercializing this future critical technology.

Broadly speaking, there are two categories of radiation therapy. External beam therapy involves directing a high-energy x-ray beam generated from a linear accelerator to a patient's tumor. Radiotherapy equipment varies as some devices are better for treating cancers near the surface of the skin and others are better for treating cancers deeper in the body. A course of external beam radiation therapy typically ranges from 10 to 40 treatments and depends on the total radiation dose necessary to achieve a specific therapeutic goal. Internal radiation therapy, also called brachytherapy, involves the placement of a radiation-emitting element within or adjacent to the patient's tumor. Brachytherapy usually requires an operating room procedure for either permanent insertion of the radiation source in the cancerous organ or insertion of thin plastic catheters in and around the diseased organ to allow for temporary placement of a radiation source after which both the source and the tubes are removed from the body. Internal radiation therapy delivers a higher dose of radiation in a shorter time than is possible with external beam treatments. Internal radiation therapy is typically used for cancers of the prostate, cervix, breast, lung and esophagus.

The following table sets forth the forms of radiation therapy treatments and advanced services that we currently offer:

Technologies		Description

External Beam Therapy
Conformal Radiation Therapy		A process of creating a radiation treatment field that matches precisely the size and shape of the intended target tumor or organ. This customization of the treatment to the diseased tissue allows for better sparing of surrounding healthy, unaffected organs than conventional treatment technologies.
Intensity Modulated Radiation Therapy		A process of adjusting the intensity of the radiation beam in addition to shaping the radiation dose to match the size and shape of the treated tumor, resulting in higher degree of precision than conformal therapy. The net clinical result of this technology is the safe delivery of higher, more effective radiation doses to tumors.
Stereotactic Radiosurgery		A process of delivering highly precise, highly accurate, high dose radiation to small tumors. In general, stereotactic radiosurgery delivers treatment with greater precision and accuracy than either intensity modulated radiation therapy or conformal therapy. Historically, stereotactic radiosurgery was used for brain tumors, but recent advancements in imaging and radiation delivery technologies have allowed for expanding applications of this technology to the treatment of extra cranial cancers.
Internal Radiation Therapy
High-Dose Rate Brachytherapy		Enables radiation oncologists to treat cancer by internally delivering high doses of radiation directly to the cancer using temporarily implanted radioactive elements.
Low-Dose Rate Brachytherapy		Enables radiation oncologists to treat cancer by internally delivering doses of radiation directly to the cancer over an extended period of time using permanently implanted radioactive elements (such as prostate seed implants).
Radiopharmaceutical Therapy		Enables radiation oncologists to treat cancer that has metastasized widely to the skeleton with an intravenously injected radioactive solution that is rapidly absorbed by the skeleton and delivers the radiation dose comprehensively to the entire skeleton.
Advanced Services Used with External Beam Therapies
Image Guided Radiation Therapy		Enables radiation oncologists to utilize x-ray imaging at the time of treatment to identify the exact position of the tumor within the patient's body and adjust the radiation beam to that position for better accuracy of treatment delivery.

Technologies		Description

Gamma Function		A proprietary capability that enables precise calculation of the actual amount of radiation dose delivered during a treatment. Gamma Function also enables the quantitative comparison between the actual radiation dose delivered and the planned radiation dose. This technology furthermore reports discrepancies in planned-to-actual dose to the physician and provides useful information to assist in the physician's clinical decision-making.
Respiratory Gating		Coordinates treatment beam activation with the respiratory motion of the patient, thereby permitting accurate delivery of radiation dosage to a tumor that moves with breathing, such as lung and liver cancers.
Operating Technologies Under Development
Adaptive Radiotherapy		A novel approach to radiation therapy that is currently under development at the Company and a small number of academic medical centers. Adaptive radiotherapy is a process that will automatically trigger a new treatment plan during the course of therapy in order to adapt to anatomic changes that occur to the tumor. For example, as a tumor shrinks during treatment, adaptive radiotherapy will respond by generating a new treatment plan customized to the smaller tumor and further spare radiation exposure of nearby healthy organs.

Our growth strategy leverages our competitive strengths to provide for long-term enhanced growth.

The U.S. market for cancer treatment is growing due to the increasing incidence of the disease and a stable reimbursement environment. The international market for cancer treatment is growing at a faster rate due to a lower level of treatment penetration relative to the United States, an increasing diagnosis rate, a growing middle class and expanded insurance access. In addition to this market growth, initiatives contributing to our revenue growth include: technology utilization, expansion of our ICC model, physician recruiting and increased patient flow from managed care plans. We continue to invest capital and resources behind these initiatives at our existing centers to drive long-term, sustainable growth.

Acquisitions and joint ventures are important parts of our expansion plans, and we have invested in the tools and infrastructure to capitalize on these opportunities. The landscape of radiation therapy and related physician specialists is highly fragmented. In 2013, there were approximately 2,340 locations providing radiation therapy in the United States, of which approximately 1,100 were freestanding, or non-hospital based, treatment centers. The Company holds approximately 13% of the freestanding market. In a broader trend, it is estimated that there are approximately 794,000 physicians in the United States today, of which 37% remain independent as compared to over 50% a decade ago. The Latin American radiation therapy market is similarly fragmented with most competition coming from hospitals and smaller local groups.

We are focused on expanding our relationships with health systems partners. We believe our investments in the ICC model, new systems and data have uniquely positioned us as a partner of choice to health systems. We believe our current footprint only represents a small portion of this market and, as we gain greater local market scale and penetration of the ICC model, we expect our health system partnership discussions to accelerate. The structure of relationships with heath systems includes: joint ventures, management agreements, professional services agreements and full outsourcing of oncology service lines.

Organic and acquisition growth opportunities for radiation therapy services outside of the United States are driven largely by higher volume growth from strong underlying demographic and healthcare industry trends, an underserved and fragmented market and increased access to and payment for technology in the treatment of cancer. We continue to pursue de novo centers, acquisitions, joint ventures and hospital partnerships to facilitate expansion in existing and new Latin American markets. In addition to our strategy in Latin America, we may selectively evaluate and pursue expansion in other international markets to further enhance our growth profile and diversify our revenue.

Capitalizing on our network, our long history and the breadth of our products and services, we have developed new value added services that we expect will generate additional sources of revenue outside the reimbursement system. Examples include management of the oncology service line in hospitals, participation in clinical trials and monetization of our historical data.

We have over 30 years of experience operating radiation treatment centers and over time have increasingly affiliated with physicians and other cancer care specialists. We have developed an integrated operating model, which is comprised of the following key elements:

Our treatment centers are designed to deliver high-quality radiation therapy in a patient-friendly environment. A treatment center typically has one or two linear accelerators, with additional rooms for simulators, computed tomography ("CT") scanners, physician offices, film processing and physics functions. In addition, treatment centers include a patient waiting room, dressing rooms, exam rooms and hospitality rooms, all of which are designed to minimize patient discomfort. As of December 31, 2015, in 22 of our treatment centers other cancer care specialists are co-located with our radiation therapy specialists.

Cancer patients referred to one of our radiation oncologists are provided with an initial consultation, which includes an evaluation of the patient's condition to determine if radiation therapy is appropriate. If radiation therapy is selected as a method of treatment, the medical staff engages in clinical treatment planning. Clinical treatment planning utilizes x-rays, CT imaging, ultrasound, PET imaging and, in many cases, advanced computerized 3-D conformal imaging programs, in order to locate the tumor, determine the best treatment modality and the treatment's optimal radiation dosage, and select the appropriate treatment regimen.

We have developed standardized operating procedures for our treatment centers in order to ensure that our professionals are able to operate uniformly and efficiently. Our manuals, policies and procedures are refined and modified as needed to increase productivity and efficiency and to provide for the safety of our employees and patients. We believe that our standard operating procedures facilitate the interaction of physicians, physicists, dosimetrists, radiation therapists and other employees and permit the interchange of employees among our treatment centers. In addition, standardized procedures facilitate the training of new employees. The quality of our operating and related quality assurance procedures has been recognized by the accrediting bodies in our field, namely the American College of Radiology ("ACR") and the American College of Radiation Oncology ("ACRO").

Coding involves the translation of data from a patient's medical chart to our billing system for submission to third-party payers. Our treatment centers provide radiation therapy services under a series of different professional and technical codes, which determine reimbursement. Our Chief Medical Officer, Chief Compliance Officer and certified professional coders work together to establish universal coding and billing rules and procedures. Our certified coders are in charge of executing these rules and procedures. To provide an external check on the integrity of the coding process, we conduct internal audits and periodically retain the services of an external consultant to review and assess our coding procedures and processes. Billing and collection functions are performed centrally. In certain of our ICC practices, billing is performed at the respective physician practice locations or by contracted third party billers. Collections associated with the ICC practices are centralized through our lockbox accounts. In an effort to improve collections, we have increased efforts to confirm patient eligibility with payers, verify insurance coverage, and facilitate payment plans.

We utilize centralized management information systems to closely monitor each treatment center's operations and financial performance. Our systems track patient data, physician productivity, coding, and billing. The systems allow us to perform budget analyses, historical financial comparisons, and treatment center benchmarking, enabling management to actively evaluate performance. We have also developed a proprietary image and text retrieval system, which facilitates the storage and review of patient medical charts and films. We periodically review our management information systems for possible refinements.

We have established maintenance and physics departments to standardize the acquisition, installation, calibration, use, maintenance and replacement of our linear accelerators, simulators and related equipment. Our engineers, in conjunction with manufacturers' representatives, perform preventive maintenance, repairs and installations. This enables our treatment centers to ensure quality, maximize equipment productivity and minimize downtime. Our physicists monitor and test the accuracy and integrity of each of our linear accelerators on a regular basis to ensure the safety and effectiveness of patient treatment. This testing also helps ensure that the linear accelerators are uniformly and properly calibrated. Independent machine verifications are done annually using the services provided by the M.D. Anderson Radiation Physics Center.

We strive to achieve total quality management throughout our organization. Our treatment centers have a standardized total quality management program consisting of programs that monitor the design

of the individual treatment plans, and that ensure the validation of radiation therapy equipment. Each of our new radiation oncologists is assigned to a senior radiation oncologist who reviews each patient's course of treatment. Furthermore, the data in our patient database is used to evaluate patient outcomes and to modify treatment patterns as necessary to improve patient care. We also utilize patient questionnaires to monitor patient satisfaction. Using the data from these questionnaires, as well as third-party data, we assign each of our physicians and centers a patient satisfaction score, which helps us identify opportunities for improvement and better understand best practices within our treatment centers.

We believe that a well-managed clinical research program enhances the reputation of our physicians and our ability to recruit new cancer specialists. Our treatment centers participate in national cooperative group trials and we have a full-time, in-house research staff. We maintain a proprietary database of information on over 168,000 patients. The data collected includes information on tumor characteristics which can be used to conduct research, measure quality outcomes and improve patient care. In 2015, our radiation oncologists published approximately 831 articles in peer reviewed journals and periodicals.

In an effort to enhance and improve our relationships with managed care and commercial payers, we have added management resources with experience in payer contracting. As a result, we have been able to improve contract terms and increase payment rates in many cases. In addition, we have developed an episode of care or bundled payment agreement with certain payers and are working to develop similar arrangements with other payers. We believe these innovative payment approaches will improve alignment and increase our business opportunities with these payers.

In 1989, we founded The Radiation Therapy School for Radiation Therapy Technology, which is accredited by the Joint Review Committee on Education in Radiologic Technology. The school trains individuals to become radiation therapists. Upon graduation, students become eligible to take the national registry examination administered by the American Registry of Radiologic Technologists. Since opening in 1989, the school has produced 163 graduates, 78 of whom are currently employed by us.

Recognizing a growing need for individuals trained in treatment planning, we founded a Training Program for Medical Dosimetry in 2005. As of December 31, 2015, a total of 34 students have completed or are in the process of completing the program in dosimetry.

In addition, we have an affiliated physics program with the University of Pennsylvania to provide internship training sites for their Masters and PhD programs in Medical Physics.

We focus on being compliant with regulations under the Health Insurance Portability and Accountability Act of 1996, as modified by Title XIII, subtitle D of the Health Information Technology for Economic and Clinical Health Act (collectively, "HIPAA"), regarding privacy, security and transmission of health information. We have implemented such regulations into our existing systems, standards and policies to ensure compliance.

We have a compliance program that is consistent with guidelines issued by the Office of Inspector General of the U.S. Department of Health and Human Services (the "OIG"). As part of this compliance program, we adopted a code of ethics and have a full-time compliance officer. Our program includes an anonymous hotline reporting system, compliance training programs, auditing and monitoring programs and a disciplinary system to enforce our code of ethics and other compliance policies. Auditing and monitoring activities include claims preparation and submission and also cover issues such as coding, billing, regulatory compliance and financial arrangements with physicians. These areas are also the focus of our specialized training programs.

As of December 31, 2015, we owned, operated and managed 181 treatment centers in our 6 domestic divisions and our international markets. Of the 181 total centers, 59 are operated in partnership with health systems and other clinics and community-based sites. In the United States, 48 of these centers are based either on a hospital campus or affiliated with a hospital system, and in Latin America, 11 of these centers are based either on a hospital campus or affiliated with a hospital system.

As of December 31, 2015, we operated 33 internally developed treatment centers in Alabama, Argentina, Arizona, California, El Salvador, Florida, Massachusetts, Michigan, Nevada, New Jersey, North Carolina and Rhode Island. In 2013, we opened a de novo treatment center in Troy, Michigan and in Argentina. In 2014, we opened a de novo facility in Riverhead, New York. In 2015, we opened one de novo center in North Carolina and one in California. Our newly developed treatment centers typically achieve positive cash flow within six to fifteen months after opening.

As of December 31, 2015, we operated 136 acquired treatment centers located in Alabama, Arizona, California, Florida, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Washington and West Virginia, including 33 acquired treatment centers in South America, Central America, Mexico and the Caribbean. Since January 1, 2013, we have acquired 65 treatment centers. Of the 65 acquired treatment centers, 37 were acquired in 2013, 24 were acquired in 2014, and 4 were acquired in 2015. As part of our ongoing acquisition strategy, we continually evaluate potential opportunities.

As of December 31, 2015, we operated 12 of our treatment centers pursuant to professional and other service arrangements. A professional corporation owned by certain of our equityholders provides the radiation oncologists for our professional/other treatment centers in Mohawk Valley—New York. In connection with certain of our professional/other treatment center services, we provide technical and administrative services. Professional services in our North Carolina professional/other center are provided by physicians employed by a professional corporation owned by certain of our officers, directors and equityholders. Professional services consist of services provided by radiation oncologists to patients. Technical services consist of the non-professional services provided by us in connection with radiation treatments administered to patients. Administrative services consist of services provided by us to the professional/other center. The contracts under which the professional/other treatment centers are provided service are generally three to seven years with terms for renewal.

Alabama, Arizona, Florida, Kentucky, Maryland, New Jersey, Rhode Island, South Carolina and West Virginia Treatment Centers

In Alabama, Arizona, Florida, Kentucky, Maryland, New Jersey, Rhode Island, South Carolina and West Virginia, we employ or contract with radiation oncologists and other healthcare professionals. Substantially all of our radiation oncologists in these states have employment agreements or other contractual arrangements with us. While we exercise legal control over radiation oncologists we employ, we do not exercise control over, or otherwise influence, their medical judgment or professional decisions. We are responsible for billing patients, hospitals and third-party payers for services rendered by our radiation oncologists.

California, Massachusetts, Michigan, Nevada, New York, North Carolina and Washington Treatment Centers

Many states, including California, Massachusetts, Michigan, Nevada, New York, North Carolina and Washington prohibit us from employing radiation oncologists. As a result, we operate our treatment centers in such states pursuant to administrative services agreements between professional corporations and our wholly owned subsidiaries. In the states of California, Massachusetts, Michigan, Nevada, New York, North Carolina and Washington, our treatment centers are operated as physician office practices. We typically provide technical services to these treatment centers in addition to our administrative services. For the years ended December 31, 2015, 2014 and 2013 approximately 14.1%, 14.9% and 18.6% of our net patient service revenue, respectively, was generated by professional corporations with which we have administrative services agreements. The professional corporations with which we have administrative services agreements in California, Massachusetts, Michigan, Nevada, New York, North Carolina and Washington are owned by certain of our directors, physicians and equityholders, who are licensed to practice medicine in the respective state.

Our administrative services agreements generally obligate us to provide certain treatment centers with equipment, staffing, accounting services, billing and collection services, management, technical and administrative personnel and assistance in managed care contracting. Our administrative services agreements provide for the professional corporations to pay us a monthly service fee, which represents the fair market value of our services.

As a result of our acquisition of OnCure Holdings, Inc. (together with its subsidiaries, "OnCure") in October 2013, in several markets we rely on physician practices to provide our services. Following our acquisition of OnCure, we assumed the Management Services Agreements ("MSAs") previously in place between OnCure and most of its managed practices. Under the MSAs, OnCure provides the necessary medical and office equipment, clinical and operating staff (other than physicians) and office space and leasehold improvements, as well as general management and billing/collection services, in exchange for a management fee based on a percentage of the practice's revenues or earnings before interest, taxes, depreciation and amortization ("EBITDA").

Our radiation oncologists are primarily referred to patients by: primary care physicians, medical oncologists, surgical oncologists, urologists, pulmonologists, neurosurgeons and other physicians within the medical community. Our radiation oncologists are expected to actively develop their referral base by establishing strong clinical relationships with referring physicians. Our radiation oncologists develop these relationships by describing the variety and advanced nature of the therapies offered at our treatment centers, by providing seminars on advanced treatment procedures and by involving the referring physicians in those advanced treatment procedures. Patient referrals to our radiation oncologists also are influenced by managed care organizations with which we actively pursue contractual agreements.

We have a physician liaison program whereby such personnel inform both potential and existing referring physicians about the variety and advanced nature of the radiation therapy services our affiliated radiation oncologists can offer to their patients. As of December 31, 2015 we have 23 physician liaisons.

As of December 31, 2015, we employed approximately 3,930 employees in the United States and we were affiliated with 185 radiation oncologists that were employed or under contract with us or our affiliated professional corporations. We do not employ any radiation oncologists in California, Massachusetts, Michigan, Nevada, New York, North Carolina or Washington due to the laws and regulations in effect in these states. None of our employees in our domestic United States markets are a party to a collective bargaining agreement. In addition to our radiation oncologists, we currently employ 164 urologists, 51 surgeons and surgical oncologists, 46 medical oncologists and eight gynecological and other oncologists, six pathologists, 10 pulmonologists, six otolaryngologists and two radiologists. There currently is a shortage of radiation oncologists and other medical support personnel, which makes recruiting and retaining these employees difficult. We provide competitive wages and benefits and offer our employees a professional work environment that we believe helps us recruit and retain the staff we need to operate and manage our treatment centers.

Approximately 965 employees are employed in our international markets of which approximately 448 are covered by a collective bargaining agreement with the Health Care Providers Union corresponding to the agreement N° 108/75. The agreement does not have a fixed term, although a payment increase is negotiated every year by the labor union.

Our results of operations have historically fluctuated on a quarterly basis and can be expected to continue to be seasonal. Many of the patients of our Florida treatment centers are part-time residents in Florida during the winter months. Hence, these treatment centers have historically experienced higher utilization rates during the winter months than during the remainder of the year. In addition, volume is typically lower in the summer months due to traditional vacation periods. As of December 31, 2015, 60 of our 145 U.S. radiation treatment centers are located in Florida.

We are subject to claims and legal actions in the ordinary course of business. To cover these claims, we maintain professional malpractice liability insurance and general liability insurance in amounts we believe are sufficient for our operations. We maintain professional malpractice liability insurance that provides primary coverage on a claims-made basis per incident and in annual aggregate amounts. Our malpractice insurance varies in coverage limits for individual physicians. We are also reinsured for excess claims-made coverage through Lloyd's of London. In addition, we currently maintain multiple layers of umbrella coverage through our commercial general liability insurance policies. To minimize our risk, we also maintain insurance for Directors and Officers liability; employment practices liability; fiduciary liability; natural disasters; breach of data; loss due to data center disruption and network privacy and liability insurance.

We are self-insured for employer provided health insurance as well as worker's compensation benefits up to certain individual and aggregate loss limits. The company carefully monitors claims and participates actively in claims estimates and adjustments. Estimated costs of self-insured claims, which include estimates for incurred but unreported claims, are accrued as liabilities on our balance sheet.

The cancer care market is highly fragmented and our business is highly competitive. Competition may result from other radiation oncology practices, sole practitioners, companies in other healthcare industry segments, large physician group practices or radiation oncology physician practice management companies, hospitals, academic institutions and other operators of other radiation treatment centers, some of which may have greater financial and other resources than us. We believe our radiation treatment centers are distinguishable from those of many of our competitors because we offer patients a full spectrum of advanced radiation therapy options that are not otherwise available in certain geographies or offered by other providers, and which are administered by highly trained personnel and leading radiation oncologists.

We have not registered our service marks or any of our logos with the U.S. Patent and Trademark Office. However, some of our service marks and logos may be subject to other common law intellectual property rights. We do not hold any patents. We own the rights to a copyright that protects the content of our Gamma Function software code.

To date, we have not relied heavily on patents or other intellectual property in operating our business. Nevertheless, some of the information technology purchased or used by us may be patented or subject to other intellectual property rights. As a result, we may be found to be, or actions may be brought against us alleging that we are, infringing on the trademark, patent or other intellectual property rights of others, which could give rise to substantial claims against us. In the future, we may wish to obtain or develop trademarks, patents or other intellectual property. However, other practices and public entities, including universities, may have filed applications for (or have been issued) trademarks, patents or other intellectual property rights that may be the same as or similar to those developed or otherwise obtained by us or that we may need in the development of our own intellectual property. The scope and validity of such trademark, patent and other intellectual property rights, the extent to which we may wish or need to acquire such rights and the cost or availability of such rights are presently unknown. In addition, we cannot provide assurance that others will not obtain access to our intellectual property or independently develop the same or similar intellectual property to that developed or otherwise obtained by us.

The healthcare industry is highly regulated and the federal and state laws that affect our business are extensive and subject to frequent changes. Federal law and regulations are based primarily upon the Medicare and Medicaid programs, each of which is financed, at least in part, with federal money. State jurisdiction is based upon the state's authority to license certain categories of healthcare professionals and providers, the state's interest in regulating the quality of healthcare in the state, regardless of the source of payment, and state healthcare programs. The significant federal and state regulatory laws that could affect our ability to conduct our business include without limitation those regarding:

A violation of these laws could result in significant civil and criminal penalties, the refund of monies paid by government and/or private payers, exclusion of the physician, the practice or us from participation in Medicare and Medicaid programs and/or the loss of a physician's license to practice medicine. We exercise care in our efforts to structure our arrangements and our practices to comply with applicable federal and state laws. We have a Compliance and Quality Committee and a Corporate Compliance Program in place to review our practices and procedures. Although we believe we are in material compliance with all applicable laws, these laws are complex and a review of our practices by a court, or law enforcement or regulatory authority could result in an adverse determination that could harm our business. Furthermore, the laws applicable to us are subject to change, interpretation and amendment, which could adversely affect our ability to conduct our business. No assurance can be given that we will be able to comply with any future laws or regulations.

We estimate that approximately 40%, 42% and 45% of our net patient service revenue for 2015, 2014 and 2013, respectively, consisted of reimbursements from Medicaid and Medicare government programs. In order to be certified to participate in the Medicare and Medicaid programs, each provider must meet applicable conditions of participation and regulations relating to, among other things, operating policies and procedures, maintenance of equipment, personnel, standards of medical care and compliance with applicable federal, state and local laws. Our treatment centers are certified to participate in the Medicare and Medicaid programs.

Unless otherwise specified, the federal healthcare laws described in this section apply in any case in which we are providing a service or item that is reimbursable under government healthcare programs, including Medicare or Medicaid. The principal federal laws that affect our business include those that prohibit the filing of false or improper claims with government healthcare programs, those that prohibit unlawful inducements for the referral or generation of business reimbursable under Medicare or Medicaid and those that prohibit the provision of certain services by an entity that has a financial relationship with the referring physician.

Under the federal False Claims Act, the government may fine us if we knowingly submit, or participate in submitting, any claims for payment that are false or fraudulent, or that contain false or misleading information, or if we knowingly conceal or knowingly and improperly avoid or decrease an obligation to pay or transmit money or property to the government. An "obligation" includes an established duty arising from an express or implied contractual arrangement, from statute or regulation, or from the retention of an overpayment. Knowingly making or using a false record or statement to receive payment from the federal government or to improperly retain payment is also a violation. The False Claims Act does not require proof of specific intent to defraud: a provider can be found liable for submitting false claims with actual knowledge or with reckless disregard or deliberate ignorance of such falseness.

A False Claims lawsuit may be brought by the government or by a private individual by means of a "qui tam" action. A whistleblower shares in the proceeds of the case, typically being awarded between

15 and 25 percent of the proceeds. Such lawsuits have increased significantly in recent years. In addition, the federal government has engaged a number of non governmental-audit organizations to assist it in tracking and recovering false claims for healthcare services.

If we were ever found to have violated the False Claims Act, we would likely be required to make significant payments to the government (including treble damages and per claim penalties in addition to the reimbursements previously collected) and could be excluded from participating in Medicare, Medicaid and other government healthcare programs. Many states have similar false claims statutes. Healthcare fraud is a priority of the U.S. Department of Justice (the "DOJ"), the Office of Inspector General (the "OIG") and the Federal Bureau of Investigation which continue to devote a significant amount of resources to investigating healthcare fraud. State Medicaid agencies also have similar fraud and abuse authority, and many states have enacted laws similar to the federal False Claims Act.

While the criminal statutes generally are reserved for instances evidencing fraudulent intent, the civil and administrative penalty statutes are applied to an increasingly broad range of circumstances. Examples of activities giving rise to false claims liability include, without limitation, billing for services not rendered, billing for services not rendered in compliance with complex Medicare and Medicaid regulations and guidance, misrepresenting services rendered (i.e., miscoding) and application for duplicate reimbursement. Additionally, the federal government has taken the position that claiming reimbursement for unnecessary or substandard services violates these statutes if the claimant should have known that the services were unnecessary or substandard. An entity may also be subjected to False Claims Act liability for violations of the federal anti-kickback statute or the Stark Law.

Criminal penalties also are available in the case of claims filed with private insurers if the federal government shows that the claims constitute mail fraud or wire fraud or violate a number of federal criminal healthcare fraud statutes. A civil action may also be pursued under state insurance fraud statutes, in the case of claims filed with private insurers.

We believe our billing and documentation practices comply with applicable laws and regulations in all material respects. We submit thousands of reimbursement claims to Medicare and Medicaid each year, however, and therefore can provide no assurance that our submissions are free from errors. Although we monitor our billing practices for compliance with applicable laws, such laws are very complex and the regulations and guidance interpreting such laws are subject to frequent changes and differing interpretations.

HIPAA imposes criminal penalties for fraud against any healthcare benefit program and for obtaining money or property from a healthcare benefit program through false pretenses. HIPAA also provides for broad prosecutorial subpoena authority and authorizes certain property forfeiture upon conviction of a federal healthcare offense. Significantly, the HIPAA provisions apply not only to federal programs, but also to private health benefit programs. HIPAA also broadened the authority of the OIG to exclude participants from federal healthcare programs. If the government were to seek any substantial penalties against us pursuant to these provisions, such an action could have a material adverse effect on us.

HIPAA broadened the scope of certain fraud and abuse laws by adding several civil statutes that apply to all healthcare services, whether or not they are reimbursed under a federal healthcare program. HIPAA established civil monetary penalties for certain conduct, including upcoding and billing for medically unnecessary goods or services.

If we fail to comply with HIPAA, we may be subject to civil monetary penalties up to $50,000 per violation, not to exceed $1.5 million per calendar year for non-compliance of an identical provision, and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. State attorneys general can bring a civil action to enjoin a HIPAA violation or to obtain statutory damages up to $25,000 per violation on behalf of residents of his or her state.

The U.S. Department of Health and Human Services ("DHHS") has discretion in setting the amount of a civil monetary penalty, and may waive it entirely for violations due to reasonable cause and not willful neglect if the payment would be excessive relative to the violation. The regulations also provide for an affirmative defense if a covered entity can show that the violation was not due to willful neglect and was corrected within the 30-day grace period or an additional period deemed appropriate by the DHHS. Reasonable cause means an act or omission in which a covered entity or business associate knew, or by reasonable diligence would have known, that the act or omission was a HIPAA violation, but one in which the covered entity or business associate did not act with willful neglect. Willful neglect is defined as conscious, intentional failure or reckless indifference to the obligation to comply. The factors to be considered in determining the amount of the penalty include the nature and circumstances of the violation, the degree of culpability, the history of other violations, and the extent of the resulting harm.

The HIPAA regulations related to privacy establish comprehensive federal standards relating to the use and disclosure of protected health information. The privacy regulations establish limits on the use and disclosure of protected health information, provide for patients' rights, including rights to access, request amendment of, and receive an accounting of certain disclosures of protected health information, and require certain safeguards for protected health information. In general, the privacy regulations do not supersede state laws that are more stringent or grant greater privacy rights to individuals. We believe our operations are in material compliance with the privacy regulations, but there can be no assurance that the federal government would agree.

Effective September 23, 2009, HIPAA requires that individuals be notified without unreasonable delay and within 60 days of their unsecured protected health information having been inappropriately accessed, acquired or disclosed, unless there is a low probability of compromise or other exception applies. If more than 500 individuals are affected by such a breach, notification is required to the media and federal government as well. The regulations prescribe the method and form of the required notices. Civil penalties up to $50,000 per violation with a maximum of $1.5 million per year may attach to failures to notify.

The Omnibus HIPAA Rule, published on January 25, 2013 and now effective, imposed significant additional obligations and liability on business associates. Business associates are now directly obligated to adhere to the HIPAA Security Rule and certain provisions of the HIPAA Privacy and Breach

Notification Rules, such that violations of these rules can be enforced by the government directly against the business associate.

The HIPAA security regulations establish detailed requirements for safeguarding protected health information that is electronically transmitted or electronically stored. Some of the security regulations are technical in nature, while others may be addressed through policies and procedures. We believe our operations are in material compliance with the security regulations, but there can be no assurance that the federal government would agree.

The HIPAA transaction standards regulations are intended to simplify the electronic claims process and other healthcare transactions by encouraging electronic transmission rather than paper submission. These regulations provide for uniform standards for data reporting, formatting and coding that we must use in certain transactions with health plans. We believe our operations comply with these standards, but there can be no assurance that the federal government would agree.

Although we believe that we are in material compliance with these HIPAA regulations with which compliance is currently required, we cannot guarantee that the federal government would agree. Furthermore, additional changes to the HIPAA regulations are expected to be forthcoming in the next few years, which will require additional efforts to ensure compliance.

Federal law commonly known as the "Anti-kickback Statute" prohibits the knowing and willful offer, solicitation, payment or receipt of anything of value (direct or indirect, overt or covert, in cash or in kind) which is intended to induce:

The Anti-kickback Statute has been broadly interpreted by a number of courts to prohibit remuneration which is offered or paid for otherwise legitimate purposes if the circumstances show that one purpose of the arrangement is to induce referrals. Even bona fide investment interests in a healthcare provider may be questioned under the Anti-kickback Statute if the government concludes that the opportunity to invest was offered as an inducement for referrals. The penalties for violations of this law include civil and criminal sanctions including fines and/or imprisonment and exclusion from federal healthcare programs.

Our compensation and other financial arrangements, including leases, with physicians implicate the Anti-kickback Statute. The federal government has published regulations that provide "safe-harbors" that protect certain arrangements under the Anti-kickback Statute so long as certain requirements are met. We believe that our employment and leasing arrangements comply with applicable safe harbors. Failure to meet the requirements of a safe harbor, however, does not necessarily mean a transaction violates the Anti-kickback Statute. There are several aspects of our relationships with physicians to which the Anti-kickback Statute may be relevant. We claim reimbursement from Medicare or Medicaid for services that are ordered, in some cases, by our radiation oncologists who have ownership interests in the Company. Although neither the existing nor potential investments in us by physicians qualify for protection under the safe harbor regulations, we do not believe that these activities fall within the type of activities the Anti-kickback Statute was intended to prohibit. We also claim reimbursement from Medicare and Medicaid for services referred from other healthcare providers with whom we have financial arrangements, including compensation for employment and professional services. While we

believe that these arrangements generally fall within applicable safe harbors or otherwise do not violate the law, there can be no assurance that the government will agree, in which event we could be harmed.

We believe our operations are in material compliance with applicable Medicare and Medicaid and fraud and abuse laws and seek to structure arrangements to comply with applicable safe harbors where reasonably possible. There is a risk however, that the federal government might investigate such arrangements and conclude they violate the Anti-kickback Statute. Violations of the Anti-kickback Statute also subjects an entity to liability under the False Claims Act, including via "qui tam" action. If our arrangements were found to be illegal, we, the physician groups and/or the individual physicians would be subject to civil and criminal penalties, including exclusion from the participation in government reimbursement programs, and our arrangements would not be legally enforceable, which could materially adversely affect us.

Additionally, the OIG issues advisory opinions that provide advice on whether proposed business arrangements violate the anti-kickback law. In Advisory Opinion 98-4, the OIG addressed physician practice management arrangements. In Advisory Opinion 98-4, the OIG found that administrative services fees based on a percentage of practice revenue may violate the Anti-kickback Statute under certain circumstances, and the OIG reiterated in Advisory Opinion 11-17 a concern with percentage fees based on gross collections. While we believe that the fees we charge for our services under the administrative services agreements are commensurate with the fair market value of the services and our arrangements are in material compliance with applicable law and regulations, we cannot guarantee that the OIG would agree. Any such adverse finding could have a material adverse impact on us.

We are also subject to federal and state statutes banning payments and assigning penalties for referrals by physicians to healthcare providers with whom the physicians (or close family members) have a financial relationship. The Stark Law prohibits a physician from referring a patient to a healthcare provider for certain designated health services reimbursable by Medicare if the physician (or close family members) has a financial relationship with that provider, including an investment interest, a loan, debt or compensation relationship. The designated health services covered by the law include radiology services, infusion therapy, radiation therapy and supplies, clinical laboratory, diagnostic imaging, outpatient prescription drugs and hospital services, among others. In addition to the conduct directly prohibited by the law, the statute also prohibits "circumvention schemes," that are designed to obtain referrals indirectly that cannot be made directly. The regulatory framework of the Stark Law is to first prohibit all referrals from physicians to entities for Medicare designated health services ("DHS") and then to accept certain types of arrangements from that broad general prohibition.

Violation of these laws and regulations may result in prohibition of payment for services rendered, a refund of any Medicare payments for services that resulted from an unlawful referral, $15,000 civil monetary penalties for specified infractions, $100,000 for a circumvention scheme, criminal penalties, exclusion from Medicare and Medicaid programs, and potential false claims liability, including via "qui tam" action, of not less than $10,781 and not more than $21,563, plus three times the amount of damages that the government sustains because of an improperly submitted claim as of August, 2016. The repayment provisions in the Stark Law are not dependent on the parties having an improper intent; rather, the Stark Law is a strict liability statute and any violation is subject to repayment of all "tainted" referrals.

Our compensation and other financial arrangements with physicians implicate the Stark Law. The Stark Law, however, contains exceptions applicable to our operations. We rely on exceptions covering employees, leases, and in-office ancillary services, as well as the "group practice" definition that allows for certain compensation and profit sharing methodologies. Additionally, the definition of "referral" under the Stark Law excludes referrals of radiation oncologists for radiation therapy if (1) the request

is part of a consultation initiated by another physician; and (2) the tests or services are furnished by or under the supervision of the radiation oncologist. We believe the services rendered by our radiation oncologists will comply with this exception to the definition of referral.

Some physicians who are not radiation oncologists are employed by or affiliated with us, companies owned by us or professional corporations owned by certain of our directors, executive officers and equityholders with which we have administrative services agreements. To the extent these professional corporations employ such physicians, and they are deemed to have made referrals for radiation therapy, their referrals will be permissible under the Stark Law if they meet the employment exception, which requires, among other things, that the compensation be consistent with the fair market value of the services provided and that it not take into account (directly or indirectly) the volume or value of any referrals by the referring physician. Another exception in the Stark Law applicable to our financial relationships with physicians who are not radiation oncologists is the in-office ancillary services exception and accompanying group practice definition which permits profit distributions to physicians within a qualifying group practice structure. The Stark Law imposes detailed requirements in order to qualify for the in-office ancillary services exception, all of which are highly technical and many of which have to date not been subject to extensive judicial review. In the event that the Stark Law were to be amended to modify or otherwise limit the in-office ancillary services exception, this could have a material adverse impact on our business.

On March 21, 2010, the House of Representatives passed the Patient Protection and Affordable Care Act, and the corresponding reconciliation bill. President Obama signed the larger comprehensive bill into law on March 23, 2010 and the reconciliation bill on March 30, 2010 (collectively, the "Health Care Reform Act"). The Health Care Reform Act requires referring physicians under Stark to inform patients that they may obtain certain imaging services (e.g., magnetic resonance imaging ("MRI"), CT and positron emission tomography ("PET")) or other designated health services as specified by the Secretary of the DHHS from a provider other than that physician, his or her group practice, or another physician in his or her group practice. To date, DHHS has not included radiation oncology as a service subject to this requirement.

We believe that our current operations comply in all material respects with the Stark Law, due to, among other things, various exceptions therein and implementing regulations that exempt either the referral or the financial relationship involved. Nevertheless, to the extent physicians affiliated with us make referrals to us and a financial relationship exists between the referring physicians and us, the government might take the position that the arrangement does not comply with the Stark Law. Any such finding could have a material adverse impact on us.

Many states in which we operate have laws that prohibit the payment of kickbacks in return for the referral of patients. Some of these laws apply only to services reimbursable under the state Medicaid program. However, a number of these laws apply to all healthcare services in the state, regardless of the source of payment for the service. Although we believe that these laws prohibit payments to referral sources only where a principal purpose for the payment is for the referral, the laws in most states regarding kickbacks have been subjected to limited judicial and regulatory interpretation and, therefore, no assurances can be given that our activities will be found to be in compliance. Noncompliance with such laws could have a material adverse effect upon us and subject us and the physicians involved to penalties and sanctions.

A number of states in which we operate, such as Florida, have enacted self- referral laws that are similar in purpose to the Stark Law. However, each state law is unique. The state laws and regulations vary significantly from state to state and, in many cases, have not been widely interpreted by courts or regulatory agencies. State statutes and regulations affecting the referral of patients to healthcare providers range from statutes and regulations that are substantially the same as the federal laws and safe harbor regulations to a simple requirement that physicians or other healthcare professionals disclose to patients any financial relationship the physicians or healthcare professionals have with a healthcare provider that is being recommended to the patients. Some states only prohibit referrals where the physician's financial relationship with a healthcare provider is based upon an investment interest. Other state laws apply only to a limited number of designated health services. For example, in Maryland (where we operate four facilities), state law prohibits physicians other than radiologists or radiation oncologists from being part of a group practice or otherwise benefitting from magnetic resonance imaging ("MRI"), X-ray CT, or radiation oncology services.

These statutes and regulations generally apply to services reimbursed by both governmental and private payers. Violations of these laws may result in prohibition of payment for services rendered, refund of any monies received pursuant to a prohibited referral, loss of licenses as well as fines and criminal penalties.

We believe that we are in compliance with the self-referral law of each state in which we have a financial relationship with a physician. However, we cannot guarantee that the government would agree, and adverse judicial or administrative interpretations of any of these laws could have a material adverse effect on our operating results and financial condition. In addition, expansion of our operations into new jurisdictions, or new interpretations of laws in existing jurisdictions, could require structural and organizational modifications of our relationships with physicians to comply with that jurisdiction's laws. Such structural and organizational modifications could have a material adverse effect on our operating results and financial condition.

Many states in which we operate prohibit the splitting or sharing of fees between physicians and referral sources and/or between physicians and non-physicians. These laws vary from state to state and are enforced by courts and regulatory agencies, each with broad discretion. Some states have interpreted management agreements between entities and physicians as unlawful fee-splitting. In most cases, it is not considered to be fee-splitting when the payment made by the physician is reasonable, fair market value reimbursement for services rendered on the physician's behalf.

In certain states, we receive fees from professional corporations owned by certain of our directors, executive officers and equityholders under administrative services agreements. In certain states, we operate integrated cancer care practices and share ancillary profits within the practice. We believe we structure these fee provisions to comply with applicable state laws relating to fee-splitting.

Despite the agreements' structure, it is possible regulatory authorities or other parties could claim we are engaged in fee-splitting. If such a claim were successfully asserted in any jurisdiction, our physicians could be subject to civil and criminal penalties, professional discipline and we could be required to restructure or terminate our contractual and other arrangements. Any restructuring of our contractual and other arrangements with physician practices could result in lower revenue from such practices, increased expenses in the operation of such practices and reduced input into the business decisions of such practices and could have a material adverse effect upon us. In addition, expansion of our operations to other states with fee-splitting prohibitions may require structural and organizational modification to the form of relationships that we currently have with physicians, affiliated practices and hospitals. Any modifications could result in less profitable relationships with physicians, affiliated

practices and hospitals, less influence over the business decisions of physicians and affiliated practices and failure to achieve our growth objectives.

We are not licensed to practice medicine. The practice of medicine is conducted solely by our licensed physicians. The manner in which licensed physicians can be organized to perform and bill for medical services is governed by the laws of the state in which medical services are provided and by the medical boards or other entities authorized by such states to oversee the practice of medicine. Most states prohibit any person or entity other than a licensed professional from holding him, her or itself out as a provider of diagnoses, treatment or care of patients. Many states extend this prohibition to bar companies not wholly owned by licensed physicians from employing physicians, a practice commonly referred to as the "Corporate Practice of Medicine," in order to maintain physician independence and clinical judgment.

Business corporations are generally not permitted under certain state laws to exercise control over the medical judgments or decisions of physicians, or to engage in certain practices such as fee-splitting with physicians. Particularly in states where we are not permitted to own a medical practice, we perform only non-medical and administrative and support services, do not represent to the public or clients that we offer professional medical services and do not exercise influence or control over the practice of medicine.

Corporate Practice of Medicine laws vary widely by state regarding the extent to which a licensed physician can affiliate with corporate entities for the delivery of medical services. We believe our operations and contractual arrangements as currently conducted are in material compliance with existing applicable laws. In the event of action by any regulatory authority limiting or prohibiting us or any affiliate from carrying on our business or from expanding our operations and our affiliates to certain jurisdictions, we may be required to implement structural and organizational modifications, which could adversely affect our ability to conduct our business.

In connection with the Corporate Practice of Medicine laws referred to above, certain of the physician practices with which we are affiliated are necessarily organized as separate legal entities. As such, the physician practice entities may be deemed to be persons separate both from us and from each other under the antitrust laws and, accordingly, subject to a wide range of laws that prohibit anticompetitive conduct among separate legal entities. These laws may limit our ability to enter into agreements with separate practices that compete with one another. In addition, where we also are seeking to acquire or affiliate with established and reputable practices in our target geographic markets, any market concentration could lead to antitrust claims.

We believe we are in material compliance with federal and state antitrust laws and intend to comply with any state and federal laws that may affect the development of our business. There can be no assurance, however, that a review of our business by courts or regulatory authorities would not adversely affect our operations and the operations of our affiliated physician practice entities.

As a provider of radiation therapy services in the states in which we operate, we must maintain current occupational and use licenses for our treatment centers as healthcare facilities and machine registrations for our linear accelerators and simulators. Additionally, we must maintain radioactive material licenses for each of our treatment centers which utilize radioactive sources. We believe that we possess or have applied for all requisite state and local licenses and are in material compliance with all state and local licensing requirements.

Many states have enacted certificate of need laws, including, but not limited to, Kentucky, Massachusetts, Michigan, North Carolina, Rhode Island, South Carolina and West Virginia, which require prior approval for a number of actions, including to purchase, construct, acquire, renovate or expand healthcare facilities and treatment centers, to make certain capital expenditures or to make changes in services or bed capacity. In deciding whether to approve certain requests, these states consider the need for additional or expanded healthcare facilities or services. The certificate of need program is intended to prevent unnecessary duplication of services and can be a competitive process whereby only one proposal among competing applicants who wish to provide a particular health service is chosen or a proposal by one applicant is challenged by another provider who may prevail in getting the state to deny the addition of the service.

Certain states are reconsidering their participation in certificate of need programs, and these decisions could significantly impact the approval process for future projects. In certain states these certificate of need statutes and regulations apply to our affiliated professional corporations and in others, these statues apply to hospitals where we have management agreements or joint venture relationships.

We believe that we have applied for all requisite state certificate of need approvals or notified state authorities as required by statute and are in material compliance with state requirements. There can be no assurance, however, that a review of our business or proposed new practices by regulatory authorities would not limit our growth or otherwise adversely affect the operations of us and our affiliated physician practice entities.

We are subject to various federal, state and local laws and regulations governing the use, discharge and disposal of hazardous materials, including medical waste products. We believe that all of our treatment centers comply with these laws and regulations in all material respects and we do not anticipate that any of these laws will have a material adverse effect on our operations.

Although our linear accelerators and certain other equipment do not use radioactive or other hazardous materials, our treatment centers do provide specialized treatment involving the implantation of radioactive material in the prostate and other organs. The radioactive sources generally are obtained from, and returned to, the suppliers, which have the ultimate responsibility for their proper disposal. We, however, remain subject to state and federal laws regulating the protection of employees who may be exposed to hazardous material and the proper handling, storage and disposal of that material.

We derived a significant portion of our net patient service revenue from payments made by government sponsored healthcare programs. We provide a full range of services, some of which are reimbursed as "professional" services, and some of which are reimbursed as "technical" services. Those services include the initial consultation, clinical treatment planning, simulation, medical radiation physics, dosimetry, treatment devices, special services and clinical treatment management procedures.

Coding and billing for radiation therapy is complex. We maintain a staff of certified coding professionals responsible for interpreting the services documented on the patients' charts to determine the appropriate coding of services for billing of third-party payers. We provide training for our coding staff and believe that our coding and billing expertise result in appropriate and timely reimbursement. Coding and billing for our ICC practices are performed on site by the practice administrator or other personnel. We do not provide coding and billing services to hospitals where we are providing only the

professional component of radiation treatment services. Given the complexity of the regulations and guidance governing coding and billing, we cannot guarantee that the government will not challenge any of our practices. Any such challenge could have a material adverse effect on us.

We voluntarily file periodic and current reports and other information with the Securities and Exchange Commission (the "SEC"). Such reports and other information can be inspected and copied at the Public Reference Room of the SEC located at Room 1580, 100 F Street, N.E., Washington D.C. 20549. Copies of such materials can be obtained from the Public Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such materials may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov).

Our corporate website is www.21co.com and we make available copies of our filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports on our website, free of charge, under the heading "SEC Filings", as soon as reasonably practicable after such material is filed or furnished to the SEC. The information contained on the website is not part of this Annual Report on Form 10-K and is not incorporated into this Annual Report on Form 10-K by reference.

You should carefully consider the risk factors set forth below as well as the other information contained in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes, in evaluating our company and our business. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. Any of the following risks could materially and adversely affect our business, financial condition or results of operations.

We depend on payments from government Medicare and, to a lesser extent, Medicaid programs for a significant amount of our revenue. Our business could be materially harmed by any changes that result in reimbursement reductions.

Our payer mix is concentrated with Medicare patients due to the high proportion of cancer patients over the age of 65. We estimate that approximately 40% of our U.S. net patient service revenue for the year ended December 31, 2015 consisted of payments from Medicare and Medicaid. Only a small percentage of that revenue resulted from Medicaid patients, equaling approximately 1.5% for the year ended December 31, 2015. In addition, Medicare Advantage represents approximately 14% of our 2015 U.S. net patient service revenue. These government programs generally reimburse us on a fee-for-service basis based on predetermined government reimbursement rate schedules. As a result of these reimbursement schedules, we are limited in the amount we can record as revenue for our services from these government programs. Following a public comment period, the Centers for Medicare and Medicaid Services ("CMS") can change these schedules annually and therefore the prices that the agency pays for these services. In addition, if our operating costs increase, we will not be able to recover these costs from government payers. As a result, our financial condition and results of operations may be adversely affected by changes in reimbursement for Medicare reimbursement. Various state Medicaid programs also have recently reduced Medicaid payments to providers based on state budget reductions. There can be no certainty as to whether Medicaid reimbursement will increase or decrease in the future and what affect, if any, this will have on our business.

A significant portion of our U.S. patient volume is derived from government programs, principally Medicare, which are highly regulated and subject to frequent and substantial changes. We anticipate the Health Care Reform Act will continue to significantly affect how the healthcare industry operates in relation to Medicare, Medicaid and the insurance industry. The Health Care Reform Act contains a number of provisions, including those governing fraud and abuse, enrollment in federal healthcare programs, and reimbursement changes, which impact existing government healthcare programs and will continue to result in the development of new programs, including Medicare payment for performance initiatives and improvements to the physician quality reporting system and feedback program.

The Health Care Reform Act provides for the creation of health insurance "Marketplaces" in each state where individuals can compare and enroll in Quality Health Plans ("QHPs"). Some QHPs will be partially subsidized by Federal funds. The presence of federal funds in QHPs in the form of subsidies and cost sharing may subject providers to heightened government attention and enforcement, which could significantly increase the cost of compliance and could materially impact our operations.

Furthermore, an open question remains whether the availability of these federal subsidies classifies a QHP as a federal healthcare program. If QHPs are classified as federal healthcare programs it could significantly increase the cost of compliance for providers.

We can give no assurance that the Health Care Reform Act will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative or administrative changes or judicial rulings relating to healthcare reform would affect our business.

If payments by managed care organizations and other commercial payers decrease, our revenue and profitability could be adversely affected.

We estimate that approximately 59% of our net patient service revenue for the year ended December 31, 2015 was derived from commercial payers such as managed care organizations and private health insurance programs as well as individuals. As of December 31, 2015, we had over 1,200 contracts with commercial payers. These commercial payers generally reimburse us for services rendered to insured patients based upon predetermined rates. Rates for health maintenance organization benefit plans are typically lower than those for preferred provider organization or other benefit plans that offer broader provider access. When Medicare rates change, these commercial rates automatically change as well. Additionally, most commercial payers tend to negotiate their rates as a percentage of Medicare reimbursement. Even when our commercial rates are fixed and not tied directly to changes in Medicare, there is often pressure to renegotiate our reimbursement to align with these modified levels. If managed care organizations and other private insurers reduce their rates or we experience a significant shift in our revenue mix toward certain additional managed care payers or Medicare or Medicaid reimbursements, then our revenue and profitability may decline and our operating margins will be reduced. Non-government payers, including managed care payers, continue to demand discounted fee structures, and the trend toward consolidation among non-government payers tends to increase their bargaining power over fee structures. Our future success will depend, in part, on our ability to retain and renew our managed care contracts as well as enter into new managed care contracts on terms favorable to us. Any inability to maintain suitable financial arrangements with commercial payers could have a material adverse impact on our business.

Increasingly, commercial payers are turning to third-party benefits managers to pre-certify radiation oncology services or develop payment-based treatment protocols. The failure to obtain such pre-certifications and adhere to such protocols can result in the payers' denial of payment in whole or in part. While we are working with such benefits managers to assure compliance with their policies or to obtain modification of what we believe to be inappropriate policies, there can be no assurance that they will not have a material adverse effect on our business.

During economic downturns, governmental entities often experience budget deficits as a result of increased costs and lower than expected tax collections. These budget deficits may force federal, state and local government entities to decrease spending for health and human service programs, including Medicare, Medicaid and similar programs, which represent significant payer sources for our treatment centers. Other risks we face from general economic weakness include potential declines in the population covered under managed care agreements, patient decisions to postpone or cancel elective procedures as well as routine diagnostic examinations, potential increases in the uninsured and underinsured populations and further difficulties in collecting patient co-payment and deductible receivables.

Due to the rising costs of managed care premiums and co-pay amounts, we may realize an increased exposure to bad debt due to patients' inability to pay for certain forms of cancer treatment.

As more patients become uninsured as a result of job losses or receive reduced coverage as a result of cost-control measures by employers to offset the increased costs of managed care premiums, patients are becoming increasingly responsible for the rising costs of treatment, which can increase our exposure to bad debt. This also relates to patient accounts for which the primary insurance carrier has

paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and co-payments) remain outstanding. The shifting responsibility to pay for care has, in some instances, resulted in patients electing not to receive certain forms of cancer treatment.

In response, we have improved our processes associated with verification of insurance eligibility and patient responsibility payment programs. In addition, we have improved our patient financial counseling efforts and developed tools to monitor our progress in this area. However, an increase in the proportion of accounts receivable being comprised of uninsured accounts and a deterioration in the collectability of these accounts will adversely affect our cash flows and results of operations.

We depend on recruiting and retaining qualified healthcare professionals for our success.

Our success is dependent upon our continuing ability to recruit, train and retain or affiliate with radiation oncologists, ICC physicians, physicists, dosimetrists and radiation therapists. While there is currently a national shortage of certain of these healthcare professionals, we have not experienced significant problems attracting and retaining key personnel and professionals in the recent past. We face competition for such personnel from other healthcare providers, research and academic institutions, government entities and other organizations. In the event we are unable to recruit and retain these professionals, the national shortage of healthcare professionals could have a material adverse effect on our ability to grow. Additionally, many of our senior radiation oncologists, due to their reputations and experience, are very important in the recruitment and education of radiation oncologists. The loss of any such senior radiation oncologists could negatively impact us.

Most of our radiation oncologists and other ICC physicians in the United States are employed under employment agreements which, among other things, provide that they will not compete with us (or the professional corporations contracting with us) for a period of time after their employment terminates. Such covenants not to compete are enforced to varying degrees from state to state. Since our success depends in substantial part on our ability to preserve the business of our radiation oncologists and other ICC physicians, a determination that these provisions are unenforceable could have a material adverse effect on us.

We depend on our senior management and we may be materially harmed if we lose any member of our senior management.

We are dependent upon the services of our senior management, especially Daniel E. Dosoretz, M.D., our Chief Executive Officer, and a director on the Company's Board of Directors (the "Board" or "Board of Directors"). We have entered into executive employment and non-competition agreements with certain members of our senior management. Because many members of our senior management team have been with us for over 10 years and have contributed greatly to our growth, their services would be very difficult, time consuming and costly to replace. We carry key-man life insurance on Dr. Daniel Dosoretz. The loss of key management personnel or our inability to attract and retain qualified management personnel could have a material adverse effect on us. A decision by any of these individuals to leave our employ, to compete with us or to reduce their involvement in our business, could have a material adverse effect on our business.

The cancer treatment market is highly competitive in each market in which we operate. Our treatment centers face competition from hospitals, other medical practitioners and other operators of radiation treatment centers. There is a growing trend by hospitals to employ medical oncologists and other ICC physicians. We compete against hospitals and other providers to employ these individuals,

which generally results in such physicians referring their patients to the hospitals' radiation facilities, rather than other free-standing facilities. There is also a growing trend of physicians in specialties other than radiation oncology, such as urology, entering the radiation treatment business. If these trends continue it could harm our referrals and our business. Certain of our competitors have longer operating histories and greater financial and other resources than us. In addition, in states that do not require a certificate of need for the purchase, construction or expansion of healthcare facilities or services, competition in the form of new services, facilities and capital spending is more prevalent. If our competitors are better able to attract patients, recruit physicians, expand services or obtain favorable managed care contracts at their facilities than our centers, we may experience an overall decline in patient volume. In the event that we are not able to compete successfully, our business may be adversely affected and competition may make it more difficult for us to affiliate with or employ additional radiation oncologists on terms that are favorable to us.

We could be the subject of governmental investigations, claims and litigation.

Healthcare companies are subject to numerous types of investigations by various governmental agencies. Further, under the False Claims Act, private parties have the right to bring "qui tam," or "whistleblower," suits against companies that knowingly submit false claims for payments to, or improperly retain overpayments from, the government. Penalties can include substantial fines. Some states have adopted similar state whistleblower and false claims provisions. In February 2014, for example, the Company was served with subpoenas from the OIG and the U.S. Attorney's Office as part of a civil False Claims Act investigation regarding the ordering, billing and medical necessity of certain laboratory services as well as the Company's agreements with certain physicians. The laboratory services related to the utilization of fluorescence in situ hybridization ("FISH") laboratory tests ordered by certain physicians employed by the Company. In December 2015, our subsidiary, 21st Century Oncology, LLC ("21C LLC"), entered into a settlement agreement with the federal government, among others, to resolve the matter. Pursuant to the settlement agreement, 21C LLC agreed to pay $19.75 million to the federal government and approximately $0.5 million in attorneys' fees and costs related to the qui tam action. In connection with the settlement agreement, 21C LLC entered into a five-year Corporate Integrity Agreement (the "CIA"), with the OIG. Violations of the CIA could subject us to substantial monetary penalties or result in exclusion from participation in federal healthcare programs. Further, during the first quarter of 2016, we discovered that certain of our employees may have falsely certified meaningful use attestations for program years 2012, 2013 and 2014. As a result, we agreed to reimburse approximately $6.6 million to Medicare. See "Item 3. Legal Proceedings" for additional information. Similar governmental investigations, claims, litigation or settlement in the future could have a material adverse effect on our financial position, results of operations and cash flow.

In addition, governmental agencies and their agents, such as the Medicare Administrative Contractors, as well as the OIG, CMS and state Medicaid programs, conduct audits of our healthcare operations. Private payers may conduct similar post-payment audits, and we also perform internal audits and monitoring. Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material adverse effect on our financial position, results of operations and cash flow.

Furthermore, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established the Recovery Audit Contractor ("RAC") three-year demonstration program to conduct post-payment reviews to detect and correct improper payments in the fee-for-service Medicare program. The Tax Relief and Health Care Act of 2006 made the RAC program permanent and expanded the program nationwide as of 2010 and mandated the expansion of the RAC program to Medicaid. State Medicaid agencies have also increased their review activities. Should we be found out of compliance with any of these laws, regulations or programs, or enter into any settlement agreements

as a result of such government investigation, our business, our financial position and our results of operations could be materially adversely affected.

We may be subject to actions for false claims, which could harm our business, if we do not comply with government coding and billing rules.

If we fail to comply with federal and state documentation, coding and billing rules, we could be subject to criminal and/or civil penalties, loss of licenses and exclusion from the Medicare and Medicaid programs, which could harm us. We estimate that approximately 40% of our U.S. net patient service revenue for the year ended December 31, 2015 consisted of payments from Medicare and Medicaid programs. In addition, Medicare Advantage represents approximately 14% of our 2015 U.S. net patient service revenue. In billing for our services to third-party payers, we must follow complex documentation, coding and billing rules. These rules are based on federal and state laws, rules and regulations, various government pronouncements, and on industry practice. Failure to follow these rules could result in potential civil liability under the False Claims Act, under which extensive financial penalties can be imposed. It could further result in criminal liability under various federal and state criminal statutes. We submit thousands of claims for Medicare and other payments and there can be no assurance that there have not been errors. While we carefully and regularly review our documentation, coding and billing practices as part of our compliance program, the rules are frequently vague and confusing and we cannot assure that governmental investigators, private insurers or private whistleblowers will not challenge our practices. Such a challenge could result in a material adverse effect on our business. For example, in 2014, we received two Civil Investigative Demands ("CIDs") from the DOJ pursuant to the False Claims Act. The CIDs requested information concerning allegations that we knowingly billed for services that were not medically necessary related to a radiation dose calculation system called Gamma. As a result, in March 2016, we entered into a settlement with the federal government in which we agreed to pay a settlement amount of $34.7 million. See "Item 3. Legal Proceedings" for additional information.

If we fail to comply with the federal anti-kickback statute, we could be subject to criminal and civil penalties, loss of licenses and exclusion from the Medicare and Medicaid programs, which could materially harm us.

A provision of the Social Security Act, commonly referred to as the federal anti-kickback statute, prohibits the offer, payment, solicitation or receipt of any form of remuneration in return for referring, ordering, leasing, purchasing or arranging for or recommending the ordering, purchasing or leasing of items or services payable by Medicare, Medicaid or any other federally funded healthcare program. The federal anti-kickback statute is very broad in scope, as remuneration includes the transfer of anything of value, in cash or in kind. Financial relationships covered by this statute can include any relationship where remuneration is provided for referrals including payments not commensurate with fair market value, whether in the form of space, equipment leases, professional or technical services or anything else of value. Violations of the federal anti-kickback statute may result in substantial civil or criminal penalties, including exclusion from participation in the Medicare and Medicaid programs. Such penalties, if applied to us or one or more of our subsidiaries or affiliates, could result in significant reductions in our revenues and could have a material adverse effect on our business.

Furthermore, under a provision of the federal Civil Monetary Penalties Law, civil monetary penalties (and exclusion) may be imposed on any person who offers or transfers remuneration to any patient who is a Medicare or Medicaid beneficiary, when the person knows or should know that the remuneration is likely to induce the patient to receive medical services from a particular provider. In addition, most of the states in which we operate, including Florida, have also adopted laws, similar to the federal anti-kickback statute, that prohibit payments to physicians in exchange for referrals, some of which apply regardless of whether the source of payment is a government payer or a private payer. These statutes typically impose criminal and civil penalties as well as loss of licenses.

We have reviewed our practices of providing services to our patients, and have structured those services in a manner that we believe complies with the law and its interpretation by government authorities. We cannot provide assurances, however, that government authorities will not take a contrary view and impose civil monetary penalties and exclude us for past or present practices.

If we fail to comply with physician self-referral laws as they are currently interpreted or may be interpreted in the future, or if other legislative restrictions are issued, we could incur a significant loss of reimbursement revenue.

We are subject to the federal Stark Law, as well as similar state statutes and regulations, which bans payments for designated health services ("DHS") rendered as a result of referrals by physicians to DHS entities with which the physicians (or immediate family members) have a financial relationship. The regulatory framework of the Stark Law is to first prohibit all referrals from physicians to entities for Medicare DHS and then to accept certain types of arrangements from that broad general prohibition.

Violation of these federal and state laws and regulations may result in prohibition of payment for services rendered, loss of licenses, civil and criminal penalties, exclusion from Medicare and Medicaid programs, and potential false claims liability, including via "qui tam" action. The Stark Law is a strict liability statute and any violation is subject to repayment of all "tainted" referrals.

Our compensation and other financial arrangements with physicians are governed by the federal Stark Law. We rely on certain exceptions to the Stark Law, including those covering employees and in-office ancillary services, and the exclusion of certain requests by radiation oncologists for radiation therapy services from the definition of "referral." Under our ICC model, we have relationships with non-radiation oncology physicians such as medical oncologists, surgeons and urologists that are members of a group practice with our radiation oncologists and we rely on the Stark group practice definition and rules with respect to such relationships.

The Health Care Reform Act also imposes new disclosure requirements, including one such requirement on referring physicians under the Stark Law to inform patients that they may obtain certain imaging services (e.g., MRI, CT and PET) or other designated health services as specified by the Secretary of Health and Human Services in the future from a provider other than that physician, his or her group practice, or another physician in his or her group practice. To date, CMS has not applied these disclosure requirements to radiation therapy referrals but could do so in the future.

While we strive to ensure that our financial relationships with physicians and referral practices are in compliance with applicable laws and regulations, we cannot guarantee that violations will not occur. For example, we recently discovered an instance of non-compliance with the Stark Law at one of our clinics because the radiologists providing oversight for the imaging services we performed were not part of our group practice but were part of a separate corporate entity. We have since disclosed the incident to the appropriate regulatory authority. Incidents such as this could subject us to significant civil and criminal penalties, exclusion from participation in government and private payer programs and requirements to refund amounts previously received from government and private payers.

In addition, expansion of our operations to new jurisdictions, or new interpretations of laws in our existing jurisdictions, could require structural and organizational modifications of our relationships with physicians to comply with that jurisdiction's laws. Such structural and organizational modifications could result in lower profitability and failure to achieve our growth objectives.

Certain states have proposed statutory or regulatory enactments that would prohibit the use of the Stark Law "in-office ancillary services" exception for ICC physicians to obtain any financial benefit from radiation oncology and other DHS services even if they are part of a group practice. To date, only the state of Maryland has enacted such prohibition. If any of these state or similar federal proposed

enactments are promulgated, this could have a material adverse impact on our ICC model and our business.

If a federal or state agency asserts a different position or enacts new laws or regulations regarding illegal payments under the Medicare, Medicaid or other governmental programs, we may be subject to civil and criminal penalties, experience a significant reduction in our revenue or be excluded from participation in the Medicare, Medicaid or other governmental programs.

Any change in interpretations or enforcement of existing or new laws and regulations could subject our current business practices to allegations of impropriety or illegality, or could require us to make changes in our treatment centers, equipment, personnel, services, pricing or capital expenditure programs, which could increase our operating expenses and have a material adverse effect on our operations or reduce the demand for or profitability of our services.

Additionally, new federal or state laws may be enacted that would cause our relationships with our radiation oncologists or other physicians to become illegal or result in the imposition of penalties against us or our treatment centers. If any of our business arrangements with our radiation oncologists or other physicians in a position to make referrals of radiation therapy services were deemed to violate the federal anti-kickback statute or similar laws, or if new federal or state laws were enacted rendering these arrangements illegal, our business would be adversely affected.

We may encounter numerous business risks in identifying, acquiring and developing additional treatment centers, and may have difficulty operating and integrating those treatment centers.

Over the past three years ended December 31, 2015, we have acquired 58 treatment centers, acquired 6 professional/other centers, developed 4 treatment centers, developed 2 professional/other center and transitioned 1 acquired professional/other centers to freestanding treatment centers. As part of our growth strategy, we expect to continue to add additional treatment centers in our existing and new local and international markets. When we acquire or develop additional treatment centers, we may:

Larger acquisitions could increase our potential exposure to business risks. Furthermore, integrating a new treatment center could be expensive and time consuming, and could disrupt our ongoing business and distract our management and other key personnel. In addition, we may incur significant transaction fees and expenses, including for potential transactions that are not consummated.

We may continue to explore acquisition opportunities outside of the United States when favorable opportunities are available to us. In addition to the risks set forth herein, foreign acquisitions involve unique risks including the particular economic, political and regulatory risks associated with the specific country, currency risks, the relative uncertainty regarding laws and regulations and the potential difficulty of integrating operations across different cultures and languages.

We plan to continue to develop new treatment centers in existing and new local markets, including international markets. We may not be able to structure economically beneficial arrangements in new markets as a result of healthcare laws applicable to such markets or otherwise. If these plans change for any reason or the anticipated schedules for opening and costs of development are revised by us, we may be negatively impacted. There can be no assurance that these planned treatment centers will be completed or that, if developed, will achieve sufficient patient volume to generate positive operating margins. If we are unable to timely and efficiently integrate a newly-developed treatment center, our business could suffer.

We cannot assure you that we will achieve the anticipated benefits from completed acquisitions or that we will achieve synergies and cost savings or benefits in connection with future acquisitions. In addition, many of the businesses that we have acquired and will acquire have financial statements that have been prepared by the management of such companies and have not been independently reviewed and audited. We cannot assure you that the financial statements of companies we have acquired or will acquire would not be materially different if such statements were audited. Finally, we cannot assure you that we will continue to acquire businesses at valuations consistent with our prior acquisitions or that we will complete acquisitions at all.

Any failure to comply with regulations relating to privacy and security of patient information could subject us to significant penalties.

There are numerous federal and state laws and regulations addressing patient information privacy and security concerns, including state laws related to identity theft. In particular, the federal regulations issued under HIPAA contain provisions that:

Furthermore, the Omnibus HIPAA Rule makes business associates directly obligated to adhere to the HIPAA Security Rule and certain provisions of the HIPAA Privacy and Breach Notification Rules, such that violations of these rules can be enforced by the government directly against the business associate.

Compliance with these regulations requires substantial time and resources. If we fail to comply with the HIPAA regulations, we could be subject to civil and criminal penalties and, for our employees, possible imprisonment. Furthermore, our facilities could be subject to a periodic audit by the federal government, and enforcement of HIPAA violations may occur by either federal agencies or state attorneys general. See the following risk factor for additional risks related to protecting patient information and security concerns.

A cybersecurity attack or security breach could cause a loss of confidential data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection laws, common law or other theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business.

As part of normal operations, the Company collects, processes and retains sensitive and confidential information. The Company is subject to various federal, state and international laws and regulations regarding the use and disclosure of sensitive or confidential information, including HIPAA. Despite the security measures the Company has in place to help ensure compliance with applicable laws and regulations, its facilities and systems, and those of its third party providers, are vulnerable to cyber-attacks, security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and human errors.

On November 13, 2015, the Federal Bureau of Investigation advised us that certain patient information (such as names, social security numbers, physicians' names, diagnoses and treatment information, and insurance information) was illegally obtained by an unauthorized third party who may have gained access to our business intelligence database. Upon learning of the intrusion, we immediately hired a leading forensics firm to support our investigation, assess our systems and bolster security.

Following the data breach, the Company received notice that class action complaints had been filed against the Company and certain of its affiliates. The complaints allege, among other things, that the Company failed to take the necessary security precautions to protect patient information and prevent the data breach. In addition, the Company received a request for information regarding the data breach from the Office for Civil Rights as well as additional inquiries from State Attorneys General. While the Company has contingency plans and insurance coverage for certain potential liabilities relating to the intrusion, the coverage may not be sufficient to cover all claims and liabilities. The Company cannot predict the ultimate resolution of these matters or estimate the amounts of, or ranges of, potential loss, if any, with respect to these proceedings. An adverse outcome in any of these matters could materially impact our business and financial position.

Further, in spite of our enhanced security measures, there can be no assurance that we will not be subject to additional cyber-attacks or security breaches in the future. Such attacks or breaches could result in loss of protected health information or other data subject to privacy laws or disrupt our information technology systems or business. We continue to prioritize cybersecurity and the development of practices and controls to protect our systems. As cyber-threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. If we are subject to cyber-attacks or security breaches in the future, this could have an adverse impact on our business, financial condition or results of operations.

State law limitations and prohibitions on the corporate practice of medicine may materially harm our business and limit how we can operate.

State governmental authorities regulate the medical industry and medical practices extensively. Many states have corporate practice of medicine laws which prohibit us from:

In addition, many states impose limits on the tasks a physician may delegate to other staff members. We have administrative services agreements in states that prohibit the corporate practice of medicine. The laws governing the corporate practice of medicine vary from state to state, and regulatory authorities have broad discretion in the enforcement of such laws. We have structured our agreements and services in such states in a manner that we believe complies with the law and its interpretation by government authorities. If, however, we are deemed to be in violation of these laws, we could be required to restructure or terminate our agreements which could materially harm our business and limit how we operate. In the event the corporate practice of medicine laws of other states would adversely limit our ability to operate, it could prevent us from expanding into the particular state and impact our growth strategy.

In certain states we depend on administrative services agreements with professional corporations, including related party professional corporations, and if we are unable to continue to enter into them or they are terminated, we could be materially harmed.

Certain states have laws prohibiting business corporations from employing physicians. Our treatment centers in those states operate through administrative services agreements with professional corporations that employ the radiation oncologists who provide professional services at the treatment centers in those states. In 2015, $141.2 million of our net patient service revenue was derived from administrative services agreements, as opposed to $858.9 million from all of our other centers. The professional corporations in these states are currently owned by certain of our directors, executive officers and equityholders, who are licensed to practice medicine in those states. As we enter into new states that will require an administrative services agreement, there can be no assurance that a related party professional corporation, or any professional corporation, will be willing or able to enter into an administrative services agreement. Furthermore, if we enter into an administrative services agreement with an unrelated party there could be an increased risk of differences arising or future termination. We cannot assure you that a professional corporation will not seek to terminate an agreement with us on any basis, including on the basis of state laws prohibiting the corporate practice of medicine, nor can we assure you that governmental authorities in those states will not seek termination of these arrangements on the same basis. While we have not been subject to such proceedings in the past, we could be materially harmed if any state governmental authorities or the professional corporations with which we have an administrative services agreement were to succeed in such a termination.

Our business could be materially harmed by future interpretation or implementation of state laws regarding prohibitions on fee-splitting.

Many states prohibit the splitting or sharing of fees between physicians and non-physicians, as well as between treating physicians and referral sources. These laws vary from state to state and are enforced by courts and regulatory agencies, each with broad discretion. Some states have interpreted certain types of fee arrangements in practice management agreements between entities and physicians as unlawful fee-splitting. We believe our arrangements with physicians comply in all material respects with the fee-splitting laws of the states in which we operate. Nevertheless, if government regulatory authorities were to disagree, we and our radiation oncologists could be subject to civil and criminal penalties, and we could be required to restructure or terminate our contractual and other

arrangements, which would result in a loss of revenue and could result in less input by us into the business decisions of such practices. In addition, expansion of our operations to other states with certain types of fee-splitting prohibitions may require structural and organizational modification to the form of relationships that we currently have with physicians, professional corporations and hospitals, which could have a material adverse effect on our business, financial condition and results of operation.

If we fail to comply with the laws and regulations applicable to our treatment center operations, we could suffer penalties or be required to make significant changes to our operations.

Our treatment center operations are subject to many laws and regulations at the federal, state and local government levels. These laws and regulations require that our treatment centers meet various licensing, certification and other requirements, including those relating to:

While we have structured our operations in a manner that we believe complies in all material respects with all applicable laws and regulations, we cannot assure you that government regulators will agree, given the breadth and complexity of such laws. If a government agency were to find that we are not in compliance with these laws, we could suffer civil or criminal penalties, including becoming the subject of cease and desist orders, rejection of the payment of our claims, the loss of our licenses to operate and our ability to participate in government or private healthcare programs, any of which could have a material adverse effect on our business, financial condition and results of operation.

Our failure to comply with laws related to hazardous materials could materially harm us.

Our treatment centers provide specialized treatment involving the use of radioactive material in the treatment of the lungs, prostate, breasts, cervix and other organs. The materials are obtained from, and, if not permanently placed in a patient or consumed, returned to a third-party provider of supplies to hospitals and other radiation therapy practices, which has the ultimate responsibility for its proper disposal. We, however, remain subject to state and federal laws regulating the protection of employees who may be exposed to hazardous material and regulating the proper handling, storage and disposal of that material. Although we believe we are in compliance in all material respects with all applicable laws, a violation of such laws, or the future enactment of more stringent laws or regulations, could subject us to liability, or require us to incur costs that could have a material adverse effect on us.

The treatment of cancer patients is subject to potential significant technological and therapeutic changes. Future technological developments could render our equipment obsolete. We may incur significant costs in replacing or modifying equipment in which we have already made a substantial investment prior to the end of its anticipated useful life. In addition, there may be significant advances in other cancer treatment methods, such as chemotherapy, surgery, biological therapy or in cancer prevention techniques, which could reduce demand or even eliminate the need for the radiation therapy services we provide.

Changes in medical treatment guidelines or recommendations and technological innovations may adversely affect our business.

There are numerous options that a cancer patient can undergo for treatment. There are also a number of regulatory bodies, research panels and formal guidelines that can influence or even dictate patients, payers and physicians in the course of action that a patient determines to take for his or her particular form of cancer. For example, in May 2012, the U.S. Preventative Task Force finalized its recommendation against prostate-specific antigen screening and the National Cancer Institute suggested changes in treatment patterns for prostate cancer away from definitive treatment and towards "watchful waiting" or "active surveillance." Both of these bodies' proclamations negatively impacted the volume of prostate cancer treatments nationally.

Technological innovations have improved our ability to deliver higher and more accurate radiation doses to some of the pathologies we see in our patients, making the treatment courses shorter. More specifically, the number of fractions needed to deliver the desired biological effect is shorter. As an example, patients with brain metastasis until recently received treatment aimed at the whole brain, a treatment relatively effective but with known toxic effects. We are currently treating some of those patients with much fewer fractions that are no longer targeting the whole brain, but just the lesions in the brain themselves. Another example is the relatively new medical understanding that we can treat some breast cancer with a lower number of fractions and achieve similar results. These new treatment methods for breast cancer result in fewer fractions and at the same time make those treatments more friendly and practical for a relatively large contingent of patients who in the past chose alternative treatments or chose to directly forgo the treatment because of personal logistics. As a result, such technological innovations have negatively impacted our operating income. Other innovations have had, and future innovations could have, a similar effect.

Efforts to regulate the construction, acquisition or expansion of healthcare treatment centers could prevent us from developing or acquiring additional treatment centers or other facilities or renovating our existing treatment centers.

Many states have enacted certificate of need laws which require prior approval for the construction, acquisition or expansion of healthcare treatment centers. In giving approval, these states consider the need for additional or expanded healthcare treatment centers or services. In certain states in which we operate, certificates of need must be obtained for capital expenditures exceeding a prescribed amount, changes in capacity or services offered and various other matters. Other states in which we now or may in the future operate may also require certificates of need under certain circumstances not currently applicable to us. We may not be able to obtain the certificates of need or other required approvals for ongoing, additional or expanded treatment centers or services in the future. In addition, at the time we acquire a treatment center, we may agree to replace equipment or expand the acquired treatment center. If we are unable to obtain required approvals, we may not be able to acquire additional treatment centers or other facilities, expand acquired treatment centers, expand the healthcare services we provide at these treatment centers, or replace equipment.

We are exposed to local business risks in different countries, which could have a material adverse effect on our financial condition or results of operations.

We have significant operations in foreign countries. Currently, we operate through 28 legal entities in Argentina, Colombia, Costa Rica, The Dominican Republic, El Salvador, Guatemala and Mexico, in addition to our operations in the United States. Our offshore operations are subject to risks inherent in doing business in foreign countries, including, but not necessarily limited to:

We may not be successful in developing and implementing policies and strategies to address the foregoing factors in a timely and effective manner at each location where we do business. Consequently, the occurrence of one or more of the foregoing factors could have a material adverse effect on our international operations or upon our financial condition and results of operations.

Further, our international operations require us to comply with a number of U.S. and international regulations. For example, we must comply with U.S. economic sanctions and export control laws in connection with exports of products and services, and we must comply with the Foreign Corrupt Practices Act ("FCPA"). The FCPA prohibits U.S. companies or their agents and employees from providing anything of value to a foreign official or agent thereof for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage. Any failure by us to ensure that our employees and agents comply with the FCPA, economic sanctions and export controls, and applicable laws and regulations in foreign jurisdictions could result in substantial penalties or restrictions on our ability to conduct business in certain foreign jurisdictions, and our results of operations and financial condition could be materially and adversely affected.

Local governments may take actions that may be adverse to our interests and our business. We have significant operations in Argentina and any such development could have a material adverse effect on our international operations or upon our financial condition and results of operations. Our international subsidiaries accounted for $117.9 million, or 10.9%, of our revenues for the year ended December 31, 2015.

Fluctuations in currency exchange rates may significantly impact our results of operations and may significantly affect the comparability of our results between financial periods.

Some of our operations are conducted by subsidiaries in foreign countries. The results of the operations and the financial position of these subsidiaries are reported in the relevant foreign currencies and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements. The main currency to which we are exposed, besides the U.S. dollar, is the Argentine peso. The exchange rate between the Argentine peso and the U.S. dollar in recent years has fluctuated significantly and may continue to do so in the future. A depreciation of this currency against the U.S. dollar will decrease the U.S. dollar equivalent of the amounts derived from

these operations reported in our consolidated financial statements and an appreciation of this currency will result in a corresponding increase in such amounts. In addition, currency fluctuations may affect the comparability of our results of operations between financial periods.

We incur currency exchange risk whenever we enter into a transaction using a currency other than the local currency of the transacting entity. Given the volatility of exchange rates, there can be no assurance that we will be able to effectively manage our currency exchange risks or that any volatility in currency exchange rates will not have a material adverse effect on our financial condition or results of operations.

Our operations in Argentina expose us to the changing economic, legal, and political environment in that country, including changing regulations governing the repatriation of cash generated from our operations in Argentina.

The current economic, legal, and political environment in Argentina and recent devaluations of the Argentinian peso have created increased instability for foreign operations in Argentina. The Argentinian government is currently attempting to address the current high rate of inflation and the continuing currency devaluation pressure. Fiscal and monetary expansion in Argentina has led to devaluations of the Argentinian peso. There can be no assurances that our Argentinian operations will not expose us to the loss of liquidity, foreign exchange losses or other potential financial consequences.

Our information systems are critical to our business and a failure of those systems could materially harm us.

We depend on our ability to store, retrieve, process and manage a significant amount of information, and to provide our treatment centers with efficient and effective accounting and scheduling systems. Our information systems require maintenance and upgrading to meet our needs, which could significantly increase our administrative expenses. We are currently upgrading multiple systems and migrating to other systems within our organization.

Furthermore, any system failure that causes an interruption in service or availability of our systems could adversely affect operations or delay the collection of revenues. Even though we have implemented network security measures, our servers are vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering. The occurrence of any of these events could result in interruptions, delays, the loss or corruption of data, or cessations in the availability of systems, all of which could have a material adverse effect on our financial position and results of operations and harm our business reputation.

The performance of our information technology and systems is critical to our business operations. Our information systems are essential to a number of critical areas of our operations, including:

Any failure of our information technology and systems could disrupt these operations, which could lead to a material adverse effect on our financial position and results of operations.

If we fail to effectively and timely implement electronic health record systems, our operations could be adversely affected.

As required by the American Recovery and Reinvestment Act of 2009, the DHHS has developed and is implementing an incentive payment program for eligible healthcare professionals that adopt and meaningfully use certified electronic health record ("EHR") technology. If our future treatment centers are unable to meet the requirements for participation in the incentive payment program, we will not be eligible to receive incentive payments that could offset some of the costs of implementing EHR systems. Further, eligible healthcare professionals that fail to demonstrate meaningful use of certified EHR technology will be subject to reduced payments from Medicare.

Our financial results may suffer if we have to write-off goodwill or other intangible assets.

A significant portion of our total assets consist of goodwill and other intangible assets. Goodwill and other intangible assets, net of accumulated amortization, accounted for approximately 50.4% of the total assets on our balance sheet as of December 31, 2015. We may not realize the value of our goodwill or other intangible assets. We expect to engage in additional transactions that will result in our recognition of additional goodwill or other intangible assets. We evaluate on a regular basis whether events and circumstances have occurred that indicate that all or a portion of the carrying amount of goodwill or other intangible assets may no longer be recoverable, and is therefore impaired. Under current accounting rules, any determination that impairment has occurred would require us to write-off the impaired portion of our goodwill or the unamortized portion of our intangible assets, resulting in a charge to our earnings. We have written off significant amounts of goodwill and intangible assets in the past. For example, during the year ended December 31, 2014, we wrote-off approximately $228.3 million in goodwill as a result of our interim impairment testing of our goodwill. Any future write-off could have a material adverse effect on our financial condition and results of operations.

We have addressed previous material weaknesses with respect to our internal controls and have identified additional material weaknesses in our internal controls, which could, if not sufficiently remediated, result in material misstatements in our consolidated financial statements.

We have experienced material weaknesses with respect to our internal controls in the past. As disclosed in Item 9A, management identified material weaknesses in our internal control over financial reporting related to the following areas:

integrate and maintain (i) appropriate segregation of duties over cash, (ii) adequate access controls with regard to financial applications, and (iii) adequate controls over the processing of expenditures, including payroll expense. Each of these items is specific to the integration of SFRO.

The above material weaknesses required a restatement of certain of our prior financial statements. While we have taken, and will continue to take, steps to remediate our internal control weaknesses, there can be no assurance that such steps will be effective or that we will not identify control deficiencies in the future.

If our remedial measures are insufficient to address the material weakness or if additional material weaknesses or significant deficiencies in our internal control are discovered or occur in the future, we may be unable to accurately report our financial results, or report them within the required timeframes, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results again in the future, which could cause investors and others to lose confidence in our financial statements, limit our ability to raise capital and could adversely affect our reputation, results of operations and consolidated financial condition.

A significant number of our treatment centers are concentrated in certain states, particularly Florida, which makes us sensitive to regulatory, economic and other conditions in those states.

A significant number of our treatment centers are concentrated in Florida, California and North Carolina. This concentration makes us particularly sensitive to regulatory requirements in those locations, including those related to false and improper claims, anti-kickback laws, self-referral laws, fee-splitting, corporate practice of medicine, antitrust, licensing and certificates of need, as well as economic and other conditions which could impact us. If our treatment centers in these states are adversely affected by changes in regulatory, economic or other conditions, our revenue and profitability may decline.

Our operations in Florida and other areas could be disrupted or damaged by hurricanes and other natural disasters.

Our treatment centers in Florida and California, among others, are subject to natural disasters, such as hurricanes and earthquakes, which could significantly disrupt our operations, causing an adverse effect on our business and financial results. While we carry property damage and business interruption insurance on our facilities, there can be no assurance that it would be adequate to cover all such losses.

We have potential conflicts of interest relating to our related party transactions which could harm our business.

We have potential conflicts of interest relating to existing agreements we have with certain of our directors, executive officers and equityholders. In 2015, for example we paid an aggregate of $16.8 million under certain of our related party agreements, including leases, and malpractice insurance premiums and we received $66.9 million pursuant to our other services agreements with related parties. Potential conflicts of interest can exist if a related party has to make a decision that has different implications for us and the related party. If a dispute arises in connection with any of these agreements, if not resolved satisfactorily to us, our business could be harmed. These agreements include:

Related party transactions between us and any related party are subject to approval by our Audit Committee or our Board of Directors, and disputes are handled by the Board of Directors. There can be no assurance that the above or any future conflicts of interest will be resolved in our favor. If not resolved in our favor, such conflicts could harm our business. For a further description of our related party transactions, see "Item 13. Certain Relationships and Related Transactions, and Director Independence."

In recent years, accreditation of facilities and the establishment of a national error reporting database have been under consideration.

The Chairman of the ACR called for the required accreditation of all facilities which bill Medicare for advanced medical imaging and radiation oncology services, including those in hospitals at a congressional hearing on medical radiation. Federal legislation was also introduced in March 2013, which requires certain personnel furnishing medical imaging examinations or radiation therapy to obtain state licensure and certification from certain approved certification organizations, and directs the DHHS to establish a program for designating and publishing a list of such certification organizations.

Of our 145 U.S. treatment centers, 114 have received or are in process of receiving ACR or ACRO accreditation. In addition to a deep physics infrastructure and internal maintenance department, we have recently begun to utilize Gamma Function as a broad application radiation safety monitoring tool to minimize potential errors in our radiation therapy treatments. While we continue to improve upon safety measures aimed at minimizing errors in radiation therapy treatment in accordance with our internal protocols as well as the mandates of organizations like ACR and ACRO, we cannot assure you that any further critical press and government scrutiny will not lead to increased regulation. Additionally we cannot assure you that the cost of complying with any new regulations will not be substantive, that the negative publicity concerning these errors will not adversely affect our business, or that these types of errors will not occur with our services.

Our financial results could be adversely affected by claims brought against our facilities, the increasing costs of professional liability insurance and by successful malpractice claims.

We could be subject to litigation relating to our business practices, including claims and legal actions by patients and others in the ordinary course of business alleging malpractice, product liability or other legal theories. We are also exposed to the risk of professional liability and other claims against us and our radiation oncologists and other physicians and professionals arising out of patient medical treatment at our treatment centers. Our risk exposure as it relates to our non-radiation oncology physicians could be greater than with our radiation oncologists to the extent such non-radiation

oncology physicians are engaged in diagnostic activities. For a discussion of current pending material litigation against us, see "Item 3. Legal Proceedings." Malpractice claims, if successful, could result in substantial damage awards which might exceed the limits of any applicable insurance coverage. Insurance against losses of this type can be expensive and insurance premiums may increase in the near future. Insurance rates vary from state to state, by physician specialty and other factors. The rising costs of insurance premiums, as well as successful malpractice claims against us or one of our physicians, could have a material adverse effect on our financial position and results of operations.

It is also possible that our excess liability and other insurance coverage will not continue to be available at acceptable costs or on favorable terms. In addition, our insurance does not cover all potential liabilities arising from governmental fines and penalties, indemnification agreements and certain other uninsurable losses. For example, from time to time we agree to indemnify third parties, such as hospitals and clinical laboratories, for various claims that may not be covered by insurance. As a result, we may become responsible for substantial damage awards that are uninsured.

If payment for claims exceed actuarially determined estimates or are not covered by insurance, or if reinsurers, if any, fail to meet their obligations, our results of operations and financial position could be adversely affected.

We have $1.1 billion of total debt outstanding as of December 31, 2015. Our high level of debt could have adverse effects on our business and financial condition. Specifically, our high level of debt could have important consequences, including the following:

Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control, including the availability of financing in the international banking and capital markets. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs. If we are unable to meet our debt obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants which could further restrict our business operations.

Subject to certain qualifications, the credit agreement governing our term loan and the indenture governing our notes, each as currently in effect, require us to receive, subject to certain important qualifications set forth therein, (1) no later than September 10, 2016, net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments in an aggregate amount of at least $25.0 million (the "First Capital Event"), (2) no later than November 30, 2016, additional net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments and/or sales of assets (which sale transactions must be deleveraging transactions on a pro forma basis) in an aggregate amount of at least $25.0 million (or a lesser amount such that when combined with the proceeds from the First Capital Event, the total amount is not less than $50.0 million) (the "Second Capital Event") and (3) no later than March 31, 2017, additional net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments and/or sales of assets (which sale transactions must be deleveraging transactions on a pro forma basis) in an aggregate amount of at least the lesser of (A) $75.0 million (or a lesser amount such that when combined with the proceeds from the First Capital Event and the Second Capital Event, the total amount is not less than $125.0 million), and (B) an amount such that, after giving effect to such issuance or sale of capital stock or other equity investments and/or sales of assets, 21C's cash and cash equivalents plus unused revolving loan commitments equals at least $120.0 million and 21C's consolidated leverage ratio is not greater than 6.4 to 1.00 (the "Third Capital Event" and together with the First Capital Event and the Second Capital Event, the "Capital Events" and each, a "Capital Event"). We are also required to comply with a minimum liquidity covenant of an amount not less than $40.0 million after the completion of the First Capital Event, to be tested monthly prior to the completion of the Third Capital Event and quarterly thereafter. Our failure to satisfy such requirements could result in an event of default under our credit agreement or indenture, which could result in the debt thereunder being accelerated. As we do not have firm commitments to obtain the required equity or dispose of assets in place, and we may not be able to maintain the required levels of liquidity, there is substantial doubt about the Company's ability to continue as a going concern.

In the event we are unable to meet the foregoing requirements, we will need to identify alternative options, such as a debt refinancing, a sale of the Company or other strategic transaction, or a transformative transaction, such as a possible restructuring or reorganization of the Company's operations. In addition, the perception that we may not be able to continue as a going concern may negatively and materially impact our existing and future business relationships, and others may choose not to deal with us at all due to concerns about our ability to meet our contractual obligations.

Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage.

We have the right to incur substantial additional indebtedness in the future. The terms of our $610 million term loan facility (the "2015 Term Facility") and our $125 million revolving credit facility (the "2015 Revolving Credit Facility" and together with the 2015 Term Facility, the "2015 Credit Facilities") and the indentures governing our notes restrict, but do not in all circumstances, prohibit us from doing so. Under the instruments governing our debt, we are permitted to incur additional indebtedness under certain circumstances. Any additional debt may be governed by indentures or other instruments containing covenants that could place restrictions on the operation of our business and the execution of our business strategy in addition to the restrictions on our business already contained in the agreements governing our existing debt. Because any decision to issue debt securities or enter into new debt facilities will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future debt financings and whether we may be required to accept unfavorable terms for any such financings.

Our 2015 Credit Facilities and the indentures governing our notes impose significant operating and financial restrictions on our Company and our subsidiaries, which may prevent us from capitalizing on business opportunities.

Our 2015 Credit Facilities and the indentures governing our notes impose significant operating and financial restrictions on us. These restrictions limit our ability, among other things, to:

As a result of these covenants and restrictions, we will be limited in how we conduct our business and we may be unable to raise additional debt or other financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

The interests of our equity securityholders may conflict with your interests.

Vestar indirectly controls approximately 80% of the Class A voting equity units of 21st Century Oncology Investments, LLC ("21CI"), which in turn controls us, and Canada Pension Plan Investment Board ("CPPIB" or the "Majority Preferred Holders") controls 100% of our Series A Convertible Redeemable Preferred Stock ("Series A Preferred Stock") of 21CI. In addition, pursuant to our Second Amended and Restated Securityholders Agreement (the "Amended Securityholders Agreement"), Vestar and CPPIB are able to appoint a majority of our Board of Directors. As a result, Vestar and CPPIB effectively have control over major decisions regardless of whether creditors believe that any such decisions are in their best interests. The interests of Vestar and CPPIB may conflict with the interests of creditors or with each other. Vestar and CPPIB may have an incentive to increase the value of their investments or cause us to distribute funds at the expense of our financial condition and affect our ability to service our debt. In addition, Vestar and CPPIB may have an interest in pursuing acquisitions, divestitures, financings or other transactions that they believe could enhance their equity investments even though such transactions might involve risks to you as a noteholder.

Our executive and administrative offices are located in Fort Myers, Florida. These offices contain approximately 79,000 square feet of space. We are currently developing approximately 46,000 square feet of additional administrative space that we believe will be available during the third quarter of 2016. These offices will be adequate for our current primary needs.

Our radiation treatment centers typically range in size from 5,000 to 12,000 square feet. As of December 31, 2015, we provided radiation therapy services in 181 treatment centers in 17 states and in Latin America, Central America, Mexico, and the Caribbean. We own the real estate on which two of

our treatment centers are located. We lease land and space at 167 treatment center locations, of which in 21 of these locations, certain of our directors, executive officers and equityholders have an ownership interest. These leases expire at various dates between 2016 and 2051 and are typically structured with renewal options. Also, 12 of our treatment center locations are operated pursuant to professional and other service arrangements. We consider all of our offices and treatment centers to be well-suited to our present requirements. However, as we expand to additional treatment centers, or where additional capacity is necessary in a treatment center, additional space will be obtained where feasible. The following list summarizes the number of radiation treatment centers operated in each state or country:

We operate in a highly regulated and litigious industry. As a result, we are involved in disputes, litigation, and regulatory matters incidental to our operations, including governmental investigations, personal injury lawsuits, employment claims, and other matters arising out of the normal conduct of business. Other than as set forth below, we do not believe that an adverse decision in any of these matters would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

On February 18, 2014, we were served with subpoenas from the OIG acting with the assistance of the U.S. Attorney's Office for the Middle District of Florida, who together requested the production of medical records of patients treated by certain of our physicians for the period from January 2007 up through the date of production of documents responsive to the February 18, 2014 subpoena, regarding the ordering, billing and medical necessity of certain laboratory services as part of a civil False Claims Act investigation, as well as our agreements with such physicians. The laboratory services under review related to the utilization of FISH laboratory tests ordered by certain physicians employed by us during the relevant time period and performed by us. We were served with another subpoena from the OIG on January 22, 2015, requesting additional documents related to the matter.

On December 16, 2015, 21C LLC, one of our subsidiaries, entered into a settlement agreement (the "Settlement Agreement") with the federal government, among others. Pursuant to the Settlement Agreement, 21C LLC agreed to pay $19.75 million to the federal government and approximately $0.5 million in attorneys' fees and costs related to a qui tam action relating to the FISH laboratory tests. Subject to certain conditions, the federal government agreed to release us from any civil or administrative monetary claim the federal government has with respect to the conduct covered by the Settlement Agreement under the False Claims Act and certain other statutes and legal theories. The Settlement Agreement did not constitute an admission of liability by us.

In connection with the Settlement Agreement, on December 16, 2015, 21C LLC entered into a five-year Corporate Integrity Agreement ("CIA") with the OIG. Violations of the CIA could subject us to substantial monetary penalties or result in exclusion from participation in federal healthcare programs. On March 2, 2016, 21C LLC entered into an amendment to the CIA to include conducting training and audits related to Gamma billing (discussed further below). The compliance measures and reporting and auditing requirements contained in the CIA include:

We received two CIDs from the DOJ, one on October 22, 2014 addressed to 21C and one on October 31, 2014 addressed to SFRO, each pursuant to the False Claims Act. The CIDs requested information concerning allegations that we knowingly billed for services that were not medically necessary and focused on clinical training in new facility locations for a radiation dose calculation system used by radiation oncologists called Gamma. The CIDs covered a period going back to January 1, 2009.

On March 9, 2016, 21C entered into a settlement (the "GAMMA Settlement") with the federal government to resolve the matter, pursuant to which 21C agreed to pay a settlement amount of $34.7 million. 21C fully cooperated with the federal government and entered into the GAMMA Settlement with no admission of wrongdoing. There was no indication that patient harm was a component of the dispute, and the Company is not aware of harm to any patient related to this dispute.

On November 13, 2015, we were advised by the Federal Bureau of Investigation (the "FBI") that patient information was illegally obtained by an unauthorized third party who may have gained access to a company database. The Company immediately hired a leading forensic firm to support its investigation, assess its system and bolster its security. Based on its investigation, the Company determined that the intruder may have accessed the database on October 3, 2015. The Company notified approximately 2.2 million current and former patients that certain information may have been copied and transferred.

Following the data breach, the Company received notice that class action complaints had been filed against the Company and certain of its affiliates in Florida and California. The complaints allege, among other things, that the Company failed to take the necessary security precautions to protect patient information and prevent the data breach. We expect certain, if not all, of the claims to be consolidated to the extent permitted by the courts. Because of the early stages of these matters and the uncertainties of litigation, we cannot predict the ultimate resolution of these matters or estimate the amounts of, or ranges of, potential loss, if any, with respect to these proceedings.

In addition, the Company has received a request for information regarding the data breach and the Company's response from the Office for Civil Rights as well as additional inquiries from State Attorneys General. The Company has responded to each of those inquiries and provided the information requested. The Company could face fines or penalties as a result of these inquiries. However, due to the early stages of these matters, we cannot predict the ultimate resolution or estimate the amounts of, or ranges of, potential loss, if any.

The Company has insurance coverage and contingency plans for certain potential liabilities relating to the data breach. Nevertheless, the coverage may be insufficient to satisfy all claims and liabilities related thereto and the Company will be responsible for deductibles and any other expenses that may be incurred in excess of insurance coverage.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

We are a direct wholly owned subsidiary of 21CI. Accordingly, there is no public trading market for our common stock.

We have not declared or paid cash dividends on our common stock in fiscal years 2015 or 2014, and we do not anticipate paying any cash dividends in the foreseeable future.

Our 2015 Credit Facilities and the indentures governing our notes generally prohibit the payment of dividends by us on shares of our common stock, with certain limited exceptions.

The following table lists the number of securities of 21CI available for issuance as of December 31, 2015 under the 21CI equity-based incentive plan, as amended. For a description of the plan, please see note 20 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options (a)	Weighted-Average Exercise Price of Outstanding Options (b)	Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding Securities Reflected in Column(a))

Equity compensation plans approved by security holders			Non-voting preferred equity units: 2,924
			Voting Class A equity units: 51,854
	N/A	N/A	Non-voting Class E equity units: 62,237
Equity compensation plans not approved by security holders	N/A	N/A	N/A
TOTAL			Non-voting preferred equity units: 2,924
	—	—	Voting Class A equity units: 51,854
			Non-voting Class E equity units: 62,237

None, other than as set forth in our Current Report on Form 8-K filed with the SEC on July 8, 2015.

The following selected historical consolidated financial data as of December 31, 2015 and 2014 and for the three years ended December 31, 2015 were derived from our audited consolidated financial statements, included elsewhere in this Annual Report on Form 10-K. The selected historical consolidated financial data as of December 31, 2013 and as of and for the years ended December 31, 2012 and 2011 were derived from our audited consolidated financial statements, which are not included in this Annual Report on Form 10-K. Our historical results included below and elsewhere in this Annual Report on Form 10-K are not necessarily indicative of our future performance. You should read the following data in conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," our audited consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K, and other financial information included in this Annual Report on Form 10-K.

(in thousands):	Year ended December 31, 2015			Year ended December 31, 2014			Year ended December 31, 2013			Year ended December 31, 2012			Year ended December 31, 2011

Consolidated Statements of Operations and Comprehensive Loss Data:
Net patient service revenue	$	1,000,126		$	938,488		$	707,616		$	683,781		$	635,640
Management fees		59,719			67,012			11,139			—			—
Other revenue		19,382			12,682			10,168			9,299			7,298



Total revenues		1,079,227			1,018,182			728,923			693,080			642,938
Salaries and benefits		579,492			545,025			409,352			372,656			326,782
Medical supplies		98,654			97,367			64,640			61,589			51,838
Facility rent expenses		68,664			63,111			45,565			39,802			33,375
Other operating expenses		64,750			61,784			45,629			38,988			33,992
General and administrative expenses		174,791			135,819			107,395			83,314			82,020
Depreciation and amortization		89,040			86,583			65,096			64,814			54,024
Provision for doubtful accounts		14,526			19,253			12,146			16,916			16,117
Interest expense, net		98,075			113,279			86,747			77,494			60,656
(Gain) loss on the sale/disposal of property and equipment		(751	)		119			336			748			235
Electronic health records incentive income		(39	)		(93	)		—			—			—
Gain on BP settlement		(7,495	)		—			—			—			—
Gain on insurance recoveries		(1,655	)		—			—			—			—
Impairment loss		—			229,526			—			81,021			360,639
Early extinguishment of debt		37,390			8,558			—			4,473			—
Equity initial public offering expenses		—			4,905			—			—			—
Loss on sale-leaseback transactions		—			135			313			—			—
Fair value adjustment of earn-out liabilities		(1,811	)		1,627			130			1,219			—
Fair value adjustment of embedded derivatives and other financial instruments		(17,919	)		837			—			—			—
Gain on the sale of an interest in a joint venture		—			—			(1,460	)		—			—
Loss on foreign currency transactions		904			678			1,138			241			84
(Gain) loss on foreign currency derivative contracts		—			(4	)		467			1,165			672
Loss on investments		—			—			—			—			250
Gain on fair value adjustment of previously held equity interest		—			—			—			—			(234	)



Total expenses		1,196,616			1,368,509			837,494			844,440			1,020,450
Loss before income taxes and equity interest in net loss of joint ventures		(117,389	)		(350,327	)		(108,571	)		(151,360	)		(377,512	)
Income tax expense (benefit)		9,654			2,319			(23,068	)		3,477			(26,635	)



Net loss before equity interest in net loss of joint ventures		(127,043	)		(352,646	)		(85,503	)		(154,837	)		(350,877	)
Equity interest in net income (loss) of joint ventures, net of tax		201			(50	)		(454	)		(817	)		(1,036	)



Net loss		(126,842	)		(352,696	)		(85,957	)		(155,654	)		(351,913	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(8,007	)		(4,595	)		(1,838	)		(3,053	)		(3,475	)



Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(134,849	)	$	(357,291	)	$	(87,795	)	$	(158,707	)	$	(355,388	)



Balance Sheet Data (at end of period):
Cash and cash equivalents		65,211			99,082			17,128			15,076			9,850
Working capital (deficit)(1)		(1,015,573	)		55,816			(189	)		17,909			14,477
Total assets		1,128,244			1,153,444			1,130,353			926,782			999,781
Finance obligations		13,601			24,043			20,650			17,192			14,266
Total debt		1,097,493			967,121			991,666			762,368			679,033
Total equity (deficit)		(674,630	)		(437,601	)		(95,601	)		9,364			172,848
Other Financial Data:
Ratio of earnings to fixed charges(2)		—			—			—			—			—
Deficiency to cover fixed charges(3)		197,516			370,791			109,934			153,586			379,318

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the "Selected Financial Data" and the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This section of this Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties, such as statements about our plans, objectives, expectations and intentions. We use words such as "expect," "anticipate," "plan," "believe," "seek," "estimate," "intend," "future" and similar expressions to identify forward-looking statements. In particular, statements that we make in this section relating to the sufficiency of anticipated sources of capital to meet our cash requirements are forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including as a result of some of the factors described below and in the section titled "Risk Factors." You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K.

We are the leading global, physician-led provider of ICC services. Our physicians provide comprehensive, academic quality, cost-effective coordinated care for cancer patients in personal and convenient community settings. We believe we offer a powerful value proposition to patients, hospital systems, payers and risk-taking physician groups by delivering high quality care and good clinical outcomes at lower overall costs through outpatient settings, clinical excellence, physician coordination and scaled efficiency.

We operate the largest integrated network of cancer treatment centers and affiliated physicians in the world which, as of December 31, 2015, deployed approximately 947 community-based physicians in the fields of radiation oncology, medical oncology, breast, gynecological and general surgery, urology and primary care. Our physicians provide medical services at approximately 375 locations, including our 181 radiation therapy centers. Of the 181 treatment centers, 33 treatment centers were internally developed and 136 were acquired (including three which were transitioned from professional and other arrangements to freestanding). 59 radiation therapy centers operate in partnership with health systems and other clinics and community-based sites. Our 145 cancer treatment centers in the United States are operated predominantly under the 21^st Century Oncology brand and are strategically clustered in 32 local markets in 17 states: Alabama, Arizona, California, Florida, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, South Carolina, Rhode Island, Washington and West Virginia. Our 36 international treatment centers in Latin America are operated under the 21^st Century Oncology brand or a local brand and, in many cases, are operated with local minority partners, including hospitals. We hold market leading positions in the majority of our local markets and continue to expand our affiliation with physician specialties in closely related areas including gynecological, breast and surgical oncology, medical oncology and urology in a number of our local markets to strengthen our clinical working relationships and to evolve from a freestanding radiation oncology centric model to an ICC model.

We use a number of metrics to assist management in evaluating financial condition and operating performance, and the most important follow:

Our revenue growth is primarily driven by expanding our number of centers, optimizing the utilization of advanced technologies at our existing centers, and benefiting from demographic and population trends in most of our local markets and by providing value added services to other healthcare and provider organizations. New centers are added or acquired based on capacity, demographics and competitive considerations.

The average revenue per treatment is sensitive to the mix of services used in treating a patient's tumor. The reimbursement rates set by Medicare and commercial payers tend to be higher for more advanced treatment technologies, reflecting their higher complexity. A key part of our business strategy is to make advanced technologies available once supporting economics exist. For example, we have been utilizing image guided radiation therapy ("IGRT") and Gamma Function, a proprietary capability to enable measurement of the actual amount of radiation delivered during a treatment and to provide immediate feedback for adaption of future treatments, where appropriate, now that reimbursement codes are in place for these services.

We receive payments for our services rendered to patients from the government Medicare and Medicaid programs, commercial insurers, managed care organizations and our patients directly. Generally, our revenue is determined by a number of factors, including the payer mix, the number and nature of procedures performed and the rate of payment for the procedures. The following table sets forth the percentage of our U.S. domestic net patient service revenue we earned based upon the patients' primary insurance by category of payer in our last three fiscal years.

Medicare is a major funding source for the services we provide and government reimbursement developments can have a material effect on operating performance. These developments include the reimbursement amount for each Current Procedural Terminology ("CPT") service that we provide and the specific CPT services covered by Medicare. The Centers for Medicare and Medicaid Services ("CMS"), the government agency responsible for administering the Medicare program, administers an annual process for considering changes in reimbursement rates and covered services. We have played, and will continue to play, a role in that process both directly and through the radiation oncology professional societies.

Since cancer disproportionately affects elderly people, a significant portion of our U.S. net patient service revenue is derived from the Medicare program, as well as related co-payments. Medicare reimbursement rates are determined by CMS and are lower than our normal charges. Medicaid reimbursement rates are typically lower than Medicare rates.

On December 28, 2015, the President signed S. 2425, the Patient Access and Medicare Protection Act. Among other things, this legislation will freeze the code definitions and relative value units for radiation treatment delivery and imaging codes in 2017 and 2018 according to code definition and relative value units in existence for these codes in 2016. The legislation also requires the Secretary of Health and Human Services to report to Congress no later than 18 months after the enactment of S. 2425 on the development of an episodic alternative payment model for payment under the Medicare program under title XVIII of the Social Security Act for radiation therapy services furnished in the freestanding setting.

The CY 2017 Physician Fee Schedule Proposed Rule confirmed the provisions of S. 2425 by proposing to freeze radiation treatment delivery codes for 2017. It is expected that the CY 2017 Physician Fee Schedule Final Rule and the CY 2018 rule will continue to reaffirm these freeze provisions.

The Medicare Access and CHIP Reauthorization Act of 2015 ("MACRA") will have a significant impact on how all physicians will be paid beginning in 2019. Starting in 2019, physicians will be paid either through a new "Merit-Based Incentive Payment System" ("MIPS") program or as part of an "Advanced Alternative Payment Model" ("AAPM"). Physicians paid through the MIPS will be subject to bonuses or penalties of between plus or minus 4% in 2019 to plus or minus 9% in 2022 and beyond based on quality performance. Physicians in an AAPM are exempt from the MIPS program and eligible for 5% incentive payments from 2019 through 2024.

If a radiation therapy AAPM is not approved for freestanding radiation therapy centers as an option in 2019, it is expected that legislation will be sought to extend the payment freeze.

Commercial sources include private health insurance as well as related payments for co-insurance and co-payments. We enter into contracts with private health insurance and other health benefit groups by granting discounts to such organizations in return for the patient volume they provide.

Most of our commercial revenue is from managed care delivery systems and is attributable to contracts where a set fee is negotiated relative to services provided by our treatment centers. We do not have any contracts that individually represent over 10% of our total U.S. net patient service revenue. For the year ended December 31, 2015 approximately 3.3% of our U.S. net patient service revenue is attributable to contracts where we bear utilization risk. Although the terms and conditions of our managed care contracts vary considerably, they are typically for a one-year term and provide for automatic renewals.

Self-pay consists of payments for treatments by patients not otherwise covered by third-party payers, such as government or commercial sources. Because the incidence of cancer is much higher in those over the age of 65, most of our patients have access to Medicare or other insurance and therefore the self-pay portion of our business is minor. However, we are seeing a general increase in the patient responsibility portion of our claims and revenue.

We grant a discount on gross charges to self-pay patients not covered under other third party payer arrangements. The discount amounts are excluded from patient service revenue. To the extent

that we realize additional losses resulting from nonpayment of the discounted charges, such additional losses are included in the provision for doubtful accounts.

The principal costs of operating a treatment center are the salaries and benefits of the physician and technical staff ("compensation expense") as well as equipment and facility costs. Compensation expense is generally variable in nature and limited by the number of patients individuals can appropriately treat each day. Equipment and facility costs are generally fixed in nature. Consequently, profitability of a treatment center is sensitive to treatment volumes and will fluctuate based upon utilization of the equipment and facility.

Other material factors that we believe will impact our future financial performance include:

The following summary results of operations data are qualified in their entirety by reference to, and should be read in conjunction with, our audited consolidated financial statements and the accompanying notes, included in this Annual Report on Form 10-K, and other financial information included in this Annual Report on Form 10-K.

The following table presents summary operating results for the years ended December 31, 2015, 2014 and 2013 (dollars in thousands). This information has been derived from the consolidated

statements of operations and comprehensive loss included elsewhere in this Annual Report on Form 10-K.

	Years ended December 31,

	2015					2014					2013
Revenues:
Net patient service revenue	$	1,000,126		92.7	%	$	938,488		92.2	%	$	707,616		97.1	%
Management fees		59,719		5.5			67,012		6.6			11,139		1.5
Other revenue		19,382		1.8			12,682		1.2			10,168		1.4

Total revenues		1,079,227		100.0			1,018,182		100.0			728,923		100.0
Expenses:
Salaries and benefits		579,492		53.7			545,025		53.5			409,352		56.2
Medical supplies		98,654		9.1			97,367		9.6			64,640		8.9
Facility rent expenses		68,664		6.4			63,111		6.2			45,565		6.3
Other operating expenses		64,750		6.0			61,784		6.1			45,629		6.3
General and administrative expenses		174,791		16.2			135,819		13.3			107,395		14.7
Depreciation and amortization		89,040		8.3			86,583		8.5			65,096		8.9
Provision for doubtful accounts		14,526		1.3			19,253		1.9			12,146		1.7
Interest expense, net		98,075		9.1			113,279		11.1			86,747		11.9
(Gain) loss on the sale/disposal of property and equipment		(751	)	(0.1	)		119		—			336		—
Electronic health records incentive income		(39	)	—			(93	)	—			—		—
Gain on BP settlement		(7,495	)	(0.7	)		—		—			—		—
Gain on insurance recoveries		(1,655	)	(0.2	)		—		—			—		—
Impairment loss		—		—			229,526		22.5			—		—
Early extinguishment of debt		37,390		3.5			8,558		0.8			—		—
Equity initial public offering expenses		—		—			4,905		0.5			—		—
Loss on sale-leaseback transactions		—		—			135		—			313		—
Fair value adjustment of earn-out liabilities		(1,811	)	(0.2	)		1,627		0.2			130		—
Fair value adjustment of embedded derivatives and other financial instruments		(17,919	)	(1.7	)		837		0.1			—		—
Gain on the sale of an interest in a joint venture		—		—			—		—			(1,460	)	(0.2	)
Loss on foreign currency transactions		904		0.1			678		0.1			1,138		0.2
(Gain) loss on foreign currency derivative contracts		—		—			(4	)	—			467		0.1

Total expenses		1,196,616		110.8			1,368,509		134.4			837,494		115.0

Loss before income taxes and equity interest in net loss of joint ventures		(117,389	)	(10.8	)		(350,327	)	(34.4	)		(108,571	)	(15.0	)
Income tax expense (benefit)		9,654		0.9			2,319		0.2			(23,068	)	(3.2	)

Net loss before equity interest in net loss of joint ventures		(127,043	)	(11.7	)		(352,646	)	(34.6	)		(85,503	)	(11.8	)
Equity interest in net income (loss) of joint ventures, net of tax		201		—			(50	)	—			(454	)	(0.1	)

Net loss		(126,842	)	(11.7	)		(352,696	)	(34.6	)		(85,957	)	(11.9	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(8,007	)	(0.7	)		(4,595	)	(0.5	)		(1,838	)	(0.3	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(134,849	)	(12.4	)%	$	(357,291	)	(35.1	)%	$	(87,795	)	(12.1	)%

Total revenues. Total revenues increased by $61.0 million, or 6.0%, from $1,018.2 million in 2014 to $1,079.2 million in 2015. Total revenue was positively impacted by $67.1 million due to our expansion into new practices and treatments centers in new and existing local markets during 2014 and 2015 through the acquisition of several urology, medical oncology and surgery practices in Florida and New Jersey and the acquisition and development of physician radiation practices in Argentina, California, Colombia, The Dominican Republic, Guatemala, Florida, Kentucky, New York, North Carolina, Rhode Island and Washington. The following table summarizes the acquisition and development of physician radiation practices for the comparable periods:

Date		Location	Market	Type

January 2014	1	Guatemala	International	Acquisition
February 2014	17	Miami/Dade/Palm Beach/Broward Counties—Florida	Miami/Dade/Palm Beach/Broward Counties—Florida	Acquisition—SFRO Freestanding
February 2014	4	Miami/Dade/Palm Beach/Broward Counties—Florida	Miami/Dade/Palm Beach/Broward Counties—Florida	Acquisition—SFRO professional / other
February 2014	1	Riverhead, New York	Westchester/Bronx/Long Island—New York	De Novo
March 2014	1	Argentina	International	Acquisition
October 2014	1	Miami, Florida	Miami/Dade County—Florida	Acquisition
October 2014	1	The Dominican Republic	International	De Novo
January 2015	1	Kennewick, Washington	Washington	Acquisition
January 2015	1	Warwick, Rhode Island	Rhode Island	Acquisition
January 2015	1	West Palm Beach, Florida	Palm Beach County—Florida	Acquisition
January 2015	1	Weaverville, North Carolina	Western North Carolina	De Novo
April 2015	1	Corbin, Kentucky	Corbin—Kentucky	Hospital Based
August 2015	1	Medellin, Colombia	International	Acquisition
November 2015	1	Lompoc, California	California	De Novo
December 2015	1	Kendall, Florida	Miami/Dade County—Florida	Acquisition

Revenue in our existing local markets and practices decreased by approximately $0.9 million due to same store freestanding revenue declines primarily as a result of the bundling of the simulation code with the IMRT Planning code beginning July 1, 2015. Revenue was also impacted by reductions in CMS funds for the 2015 PQRI program of approximately $1.7 million and EHR incentive payment adjustments of approximately $3.5 million

Salaries and benefits. Salaries and benefits increased by $34.5 million, or 6.3%, from $545.0 million in 2014 to $579.5 million in 2015. Salaries and benefits as a percentage of total revenues increased from 53.5% in 2014 to 53.7% in 2015. Additional staffing of personnel and physicians due to our development and expansion of urology, medical oncology and surgery practices in Florida and New Jersey and the acquisition and development of radiation treatment centers in new and existing local

markets during 2014 and 2015 contributed $33.7 million to our salaries and benefits. For existing practices and centers within our local markets, salaries and benefits increased $0.8 million due to increases in severance payments for terminated employees as a result of a reduction in workforce and severance payments to certain executives.

Medical supplies. Medical supplies increased by $1.3 million, or 1.3%, from $97.4 million in 2014 to $98.7 million in 2015. Medical supplies as a percentage of total revenues decreased from 9.6% in 2014 to 9.1% in 2015. Medical supplies consist of patient positioning devices, radioactive seed supplies, supplies used for other brachytherapy services, pharmaceuticals used in the delivery of radiation therapy treatments and chemotherapy-related drugs and other medical supplies. Approximately $16.6 million of the increase was related to our development and expansion of urology, medical oncology and surgery practices in Florida and New Jersey and the acquisition and development of radiation treatment centers in new and existing local markets during 2014 and 2015. In our remaining practices and centers in existing local markets, medical supplies decreased by approximately $15.3 million as certain chemotherapy drugs were increasingly administered through hospital settings under physician practice arrangements. These pharmaceuticals and chemotherapy medical supplies are principally reimbursable by third-party payers.

Facility rent expenses. Facility rent expenses increased by $5.6 million, or 8.8%, from $63.1 million in 2014 to $68.7 million in 2015. Facility rent expenses as a percentage of total revenues increased from 6.2% in 2014 to 6.4% in 2015. Facility rent expenses consist of rent expense associated with our treatment center locations. Approximately $4.9 million of the increase was related to our development and expansion of urology, medical oncology and surgery practices in Florida and New Jersey and the acquisition and development of radiation treatment centers in new and existing local markets during 2014 and 2015. Facility rent expense in our remaining practices and centers in existing local markets increased by approximately $0.7 million.

Other operating expenses. Other operating expenses increased by $3.0 million or 4.8%, from $61.8 million in 2014 to $64.8 million in 2015. Other operating expense as a percentage of total revenues decreased from 6.1% in 2014 to 6.0% in 2015. Other operating expenses consist of repairs and maintenance of equipment, equipment rental and contract labor. Approximately $1.4 million of the increase was related to our development and expansion of urology, medical oncology and surgery practices in Florida and New Jersey and the acquisition and development of radiation treatment centers in new and existing local markets during 2014 and 2015. Approximately $0.3 million of the increase relates to equipment rental expense relating to medical equipment refinancing, and an increase of approximately $1.3 million in our remaining practices and centers in existing local markets.

General and administrative expenses. General and administrative expenses increased by $39.0 million or 28.7%, from $135.8 million in 2014 to $174.8 million in 2015. General and administrative expenses principally consist of professional service fees, consulting, office supplies and expenses, insurance, marketing and travel costs. General and administrative expenses as a percentage of total revenues increased from 13.3% in 2014 to 16.2% in 2015. The net increase of $39.0 million in general and administrative expenses was due to an increase of approximately $4.5 million relating to our development and expansion of urology, medical oncology and surgery practices in Florida and New Jersey and the acquisition and development of radiation treatment centers in new and existing local markets during 2014 and 2015. In addition, there was an increase of approximately $52.8 million in legal, consulting costs and liabilities associated with the Medicare investigative matters (including FISH and Gamma) and litigation settlements with certain physicians and an increase of approximately $2.0 million in our remaining practices and treatments centers in our existing local markets. The increases in general and administrative expenses were offset by decreases of $11.9 million relating to expenses associated with note-holder negotiations and management of liquidity, $0.1 million related to expenses for consulting services for the CMS 2015 fee schedule, $7.7 million in diligence costs relating

to acquisitions and potential acquisitions of physician practices, and $0.6 million relating to our rebranding initiatives.

Depreciation and amortization. Depreciation and amortization increased by $2.4 million or 2.8%, from $86.6 million in 2014 to $89.0 million in 2015. Depreciation and amortization expense as a percentage of total revenues decreased from 8.5% in 2014 to 8.3% in 2015. The change in depreciation and amortization was due to an increase of approximately $4.1 million relating to our development and expansion of urology, medical oncology and surgery practices in Florida and New Jersey and the acquisition and development of radiation treatment centers in new and existing local markets during 2014 and 2015. In our remaining practices and treatments centers in our existing local markets our depreciation and amortization decreased by approximately $0.8 million in addition to a decrease of approximately $0.9 million in amortization of certain non-compete agreements.

Provision for doubtful accounts. The provision for doubtful accounts decreased by $4.8 million, or 24.6%, from $19.3 million in 2014 to $14.5 million in 2015. The provision for doubtful accounts as a percentage of total revenues decreased from 1.9% in 2014 to 1.3% in 2015. We continue to make progress in improving the overall collection process, including centralization of the prior authorization process, with standardized processes supporting peer to peer justification of medical necessity; improvements in payment posting timeliness; electronic submission of documentation to Medicare carriers and Medicaid eligibility of self-pay patients. We have automated insurance rebilling and focused escalation processes for claims in Medical Review with insurers. The provision for doubtful accounts has improved due to collector productivity and quality tracking and monitoring, and improved processes at the treatment centers to collect co-pay amounts at the time of service.

Interest expense, net. Interest expense decreased by $15.2 million, or 13.4%, from $113.3 million in 2014 to $98.1 million in 2015. As a result of our refinancing in April 2015, approximately $11.6 million of the decrease related to a lower average interest rate and $1.2 million of the decrease was due to a change in our average gross debt. We replaced certain debt instruments with interest rates predominately ranging from 8⁷/8% - 11³/4% with a new Term Loan at a rate of 6.5% and a new senior notes at a rate of 11.0%. As a result, our weighted average cost of debt decreased from 9.9% to 8.7%. Our average gross debt increased from $984.0 million in 2014 to $1,039 million in 2015. Approximately $2.4 million of the decrease in interest related to a decrease in amortization of debt discount and deferred financing costs as a result of our refinancing in April 2015. As of December 31, 2015, we had approximately $607.0 million outstanding under our Term Facility, $60.0 million outstanding under our 2015 Revolving Credit Facility and $360.0 million of outstanding Senior Notes.

Gain on BP settlement. During the year ended December 31, 2015, we received approximately $7.5 million from the Deepwater Horizon Settlement Program for damages suffered as a result of the Deepwater Horizon Oil Spill that occurred in 2010.

Gain on insurance recoveries. During the year ended December 31, 2015, we received approximately $1.7 million of insurance recoveries from damages suffered as a fire in one of our North Carolina radiation treatment centers that occurred during 2011.

Impairment loss. As of June 30, 2014, we performed an interim impairment test for goodwill and indefinite-lived intangible assets as a result of experiencing liquidity concerns. We completed the first step of the impairment test as of June 30, 2014 and determined that the carrying amount of one of the reporting units exceeded its estimated implied fair value, thereby requiring performance of the second step of the impairment test to calculate the amount of the impairment. In accordance with ASC 350, we recorded a preliminary estimated non-cash impairment loss of approximately $182.0 million in the condensed consolidated statements of operations and comprehensive loss during the quarter ended June 30, 2014. We completed the second step of the impairment test and recorded an impairment loss of approximately $46.3 million during the quarter ended September 30, 2014.

In addition to the goodwill impairment losses noted above, we recorded an impairment loss of approximately $1.2 million during the third quarter of 2014 related to the write-off of our 33.6% investment interest in a development stage proton therapy center located in New York. As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014 (the "Subscription Agreement"), we were required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party. On July 15, 2015, we transitioned our ownership interest in NY Proton to a third party.

Early extinguishment of debt. During the year ended December 31, 2015, we incurred an expense of approximately $37.4 million from the early extinguishment of debt as a result of the $1.0 billion in debt refinancing in April 2015. We paid approximately $24.9 million in premium payments for the early retirement of our $350.0 million senior secured second lien notes and our $380.1 million senior subordinated notes, along with the tender offer premium payments on our $75.0 million senior secured notes. As a result of the debt refinancing, we wrote-off approximately $3.1 million in original issue discount and $9.4 million in deferred financing costs.

During the year ended December 31, 2014, we incurred an expense of approximately $8.6 million from the early extinguishment of debt as a result of the prepayment of the Term A Loan, Term B Loan, MDLLC Credit Agreement, Note Purchase Agreement (each as defined below), and certain capital leases, which included the write-offs of $2.1 million in deferred financing costs, $2.7 million in original issue discount costs, and $3.8 million in pre-payment penalties, including $0.3 million paid to Theriac Management Investments, LLC ("Theriac") (a related party real estate entity owned by certain of the Company's directors and officers) pursuant to the Note Purchase Agreement.

Equity initial public offering expenses. In May 2014, we decided, due to market conditions, to postpone an initial public offering of our equity securities. As a result of the postponement and entering into the Recapitalization Support Agreement with Consenting Subordinated Noteholders, we wrote-off approximately $4.9 million in expenses associated with the initial public offering.

Loss on sale-leaseback transaction. In March 2014, the Company entered into a sale-leaseback transaction with a financial institution. The sale-leaseback transaction related to medical equipment. Proceeds from the sale were approximately $5.7 million. The Company recorded a loss on the sale-leaseback transaction of approximately $0.1 million.

Fair value adjustment of earn-out liabilities. We funded a portion of the purchase price related to the OnCure, SFRO and Kennewick, Washington acquisitions with contingent consideration. The contingent consideration is generally dependent on the acquiree achieving certain EBITDA thresholds. We estimated and recorded an earn-out liability for each of the acquisitions as of their respective acquisition dates. We estimate the fair value of the earn-out liabilities at each reporting date. Changes to the estimated earn-out liabilities are recorded to expense in the fair value adjustment of earn-out liabilities caption in the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2015 and 2014, we recorded $(1.8) million and $1.6 million, respectively, related to changes in the fair value of earn-out liabilities. On July 2, 2015 we purchased the remaining 35% of SFRO for $44.1 million, which resulted in the cancellation of the SFRO earn-out.

Fair value adjustment of embedded derivatives and other financial instruments. Pursuant to the terms of the Subscription Agreement, immediately following the occurrence of our qualifying initial public offering or a qualifying merger, we will execute and deliver to CPPIB the Warrant Agreement and issue to CPPIB warrants to purchase shares of our common stock having a then-current value of $30 million,

at a purchase price of $0.01 per share. The warrants expire on the tenth anniversary of the date of issuance. We evaluated the contingent events that could trigger the conversion of the Series A Preferred Stock to common stock and issuance of warrants and determined that the contingent conversion features qualify as an embedded derivative, requiring bifurcation and classification as a liability, measured at fair value. For the years ended December 31, 2015 and 2014 we recorded $(16.8) million and $0.8 million, respectively, related to changes in the fair value of the CPPIB related embedded derivatives.

On July 2, 2015, we purchased the noncontrolling interest of SFRO. We structured a portion of the purchase with seller financing notes that contain clauses requiring payment acceleration of principal amounts as well as premium payments if the sellers achieve specific operational milestones. We determined that the contingent conversion features of the SFRO PIK Notes qualify as embedded derivatives, requiring bifurcation and classification as debt, measured at fair value. We estimate the fair value of embedded derivatives at each reporting date and record the change in fair value of the embedded derivatives to expense in the fair value adjustment of embedded derivatives caption in the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2015 and 2014 we recorded $(1.1) million and $0 million, respectively, related to changes in the fair value of the SFRO PIK Notes embedded derivatives.

Loss (gain) on foreign currency derivative contracts. We are exposed to a significant amount of foreign exchange risk, primarily between the U.S. dollar and the Argentine Peso. This exposure relates to the provision of radiation oncology services to patients at our Latin American operations and purchases of goods and services in foreign currencies. We maintained a foreign currency derivative contract which expired on March 31, 2014. The expiration of the foreign currency derivative contract resulted in a gain of $4,000 in 2014.

Income taxes. Our effective tax rate was (8.2)% in fiscal 2015 and (0.7)% in fiscal 2014. The change in the effective rate in 2015 compared to the same period of the year prior is primarily due to the release of previously recorded reserves related to US federal, state and international tax issues and the recording of a noncash impairment charge relating to goodwill in the U.S. domestic reporting segment of $229.5 million during 2014. As a result, on an absolute dollar basis, the expense for income taxes changed by $7.4 million from the income tax expense of $2.3 million in 2014 to income tax expense of $9.7 million in 2015.

Our future effective tax rates could be affected by changes in the relative mix of taxable income and taxable loss jurisdictions, changes in the valuation of deferred tax assets or liabilities, or changes in tax laws or interpretations thereof. We monitor the assumptions used in estimating the annual effective tax rate and make adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating our annual effective tax rates, future income tax expense (benefit) could be materially affected.

In addition, we are periodically under audit by federal, state, or local authorities in the areas of income taxes and other taxes. These audits include questioning the timing and amount of deductions and compliance with federal, state, and local tax laws. We regularly assess the likelihood of adverse outcomes from these audits to determine the adequacy of our provision for income taxes. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of such accruals, the effective tax rate could be materially affected.

Net loss. Net loss decreased by $225.9 million, from $352.7 million in net loss in 2014 to $126.8 million net loss in 2015. Net loss represents 34.6% of total revenues in 2014 and 11.7% of total revenues in 2015.

Total revenues. Total revenues increased by $289.3 million, or 39.7%, from $728.9 million in 2013 to $1,018.2 million in 2014. Total revenue was positively impacted by $272.4 million due to our expansion into new practices and treatments centers in existing local markets and new local markets during 2013 and 2014 through the acquisition and development of several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina, and Rhode Island and the acquisition and development of physician radiation practices in Argentina, Arizona, California, The Dominican Republic, Florida, Guatemala, Indiana, New York, North Carolina and Mexico. The following table summarizes the acquisition and development of physician radiation practices for the comparable periods:

Date		Location	Market	Type

May 2013	3	Cape Coral / Ft. Myers / Bonita Springs, Florida	Lee County—Florida	Acquisition
May 2013	2	Naples, Florida	Collier County—Florida	Acquisition
June 2013	1	Casa Grande, Arizona	Central Arizona	Joint Venture Acquisition
July 2013	1	Mexico	International	Acquisition
September 2013	1	Argentina	International	De Novo (Hospital Campus)
October 2013	30	California / Indiana / Florida	California / Indiana / Florida	Acquisition—OnCure freestanding
October 2013	3	Indiana	Indiana	Acquisition—OnCure professional / other
October 2013	1	Roanoke Rapids, North Carolina	Eastern North Carolina	Acquisition
January 2014	1	Guatemala	International	Acquisition
February 2014	17	Miami/Dade/Palm Beach/Broward Counties—Florida	Miami/Dade/Palm Beach/Broward Counties—Florida	Acquisition—SFRO Freestanding
February 2014	4	Miami/Dade/Palm Beach/Broward Counties—Florida	Miami/Dade/Palm Beach/Broward Counties—Florida	Acquisition—SFRO professional / other
February 2014	1	Riverhead, New York	Westchester/Bronx/Long Island—New York	De Novo
March 2014	1	Argentina	International	Acquisition
October 2014	1	Miami, Florida	Miami/Dade County—Florida	Acquisition
October 2014	1	The Dominican Republic	International	De Novo

Revenue from CMS for the 2014 Physician Quality Reporting System ("PQRS") program increased approximately $0.1 million and revenues in our existing local markets and practices increased by approximately $16.8 million.

Salaries and benefits. Salaries and benefits increased by $135.6 million, or 33.1%, from $409.4 million in 2013 to $545.0 million in 2014. Salaries and benefits as a percentage of total revenues decreased from 56.2% in 2013 to 53.5% in 2014. Additional staffing of personnel and physicians due to our development and expansion in several urology, medical oncology and surgery practices in Arizona,

Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014 contributed $130.0 million to our salaries and benefits. In December 2013, we implemented a new equity-incentive plan, which decreased stock compensation by approximately $0.5 million in 2014. For existing practices and centers within our local markets, salaries and benefits increased $6.1 million due to increased salaries related to our physician liaison program and the expansion of our senior management team and increases in severance payments for terminated employees due to a reduction in workforce and incurred severance payments to certain executives offset by decreases in our compensation arrangements with certain radiation oncologists.

Medical supplies. Medical supplies increased by $32.8 million, or 50.6%, from $64.6 million in 2013 to $97.4 million in 2014. Medical supplies as a percentage of total revenues increased from 8.9% in 2013 to 9.6% in 2014. Medical supplies consist of patient positioning devices, radioactive seed supplies, supplies used for other brachytherapy services, pharmaceuticals used in the delivery of radiation therapy treatments and chemotherapy-related drugs and other medical supplies. Approximately $27.4 million of the increase was related to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. In our remaining practices and centers in existing local markets, medical supplies increased by approximately $5.4 million. These pharmaceuticals and chemotherapy medical supplies are principally reimbursable by third-party payers.

Facility rent expenses. Facility rent expenses increased by $17.5 million, or 38.5%, from $45.6 million in 2013 to $63.1 million in 2014. Facility rent expenses as a percentage of total revenues decreased from 6.3% in 2013 to 6.2% in 2014. Facility rent expenses consist of rent expense associated with our treatment center locations. Approximately $17.7 million of the increase was related to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. Facility rent expense in our remaining practices and centers in existing local markets decreased by approximately $0.2 million.

Other operating expenses. Other operating expenses increased by $16.2 million or 35.4%, from $45.6 million in 2013 to $61.8 million in 2014. Other operating expense as a percentage of total revenues decreased from 6.3% in 2013 to 6.1% in 2014. Other operating expenses consist of repairs and maintenance of equipment, equipment rental and contract labor. Approximately $15.3 million of the increase was related to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. Approximately $0.9 million increase relates to equipment rental expense relating to medical equipment refinancing.

General and administrative expenses. General and administrative expenses increased by $28.4 million or 26.5%, from $107.4 million in 2013 to $135.8 million in 2014. General and administrative expenses principally consist of professional service fees, consulting, office supplies and expenses, insurance, marketing and travel costs. General and administrative expenses as a percentage of total revenues decreased from 14.7% in 2013 to 13.3% in 2014. The net increase of $28.4 million in general and administrative expenses was due to an increase of approximately $19.1 million relating to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. In addition, there were increases of approximately $11.9 million related to expenses associated with

note-holder negotiations and management of liquidity, approximately $0.3 million related to expenses for consulting services for the CMS 2014 fee schedule, approximately $1.6 million in our remaining practices and treatments centers in our existing local markets offset by decreases in approximately $3.8 million in diligence costs relating to acquisitions and potential acquisitions of physician practices, approximately $0.3 million in litigation settlements with certain physicians and legal and consulting costs associated with the Medicare diagnostic matter and approximately $0.4 million in our rebranding initiatives.

Depreciation and amortization. Depreciation and amortization increased by $21.5 million or 33.0%, from $65.1 million in 2013 to $86.6 million in 2014. Depreciation and amortization expense as a percentage of total revenues decreased from 8.9% in 2013 to 8.5% in 2014. The change in depreciation and amortization was due to an increase of approximately $23.5 million relating to our development and expansion in several urology, medical oncology and surgery practices in Arizona, Florida, Nevada, New Jersey, New York, North Carolina and Rhode Island and the acquisitions of treatment centers in new and existing local markets during the latter part of 2013 and 2014. An increase in capital expenditures related to our investment in advanced radiation treatment technologies and software maintenance in certain local markets increased our depreciation and amortization by approximately $1.4 million offset by a decrease of approximately $3.4 million in amortization of certain non-compete agreements.

Provision for doubtful accounts. The provision for doubtful accounts increased by $7.2 million, or 58.5%, from $12.1 million in 2013 to $19.3 million in 2014. The provision for doubtful accounts as a percentage of total revenues increased from 1.7% in 2013 to 1.9% in 2014. As a result of our recent acquisitions, we continue to make progress in improving the overall collection process, including centralization of the prior authorization process, with standardized processes supporting peer to peer justification of medical necessity; improvements in payment posting timeliness; electronic submission of documentation to Medicare carriers and Medicaid eligibility of self-pay patients. We have automated insurance rebilling and focused escalation process for claims in Medical Review with insurers. Provision for doubtful accounts has improved due to collector productivity and quality tracking and monitoring, and improved processes at the treatment centers to collect co-pay amounts at the time of service.

Interest expense, net. Interest expense increased by $26.6 million, or 30.6%, from $86.7 million in 2013 to $113.3 million in 2014. The increase is primarily attributable to additional debt obligations predominately relating to our senior credit facility. As of December 31, 2014, we had approximately $90.0 million outstanding in our Term Facility and $-0- million outstanding in our 2015 Revolving Credit Facility. The increase is also attributable to recent acquisitions. Pursuant to the SFRO acquisition, we entered into the SFRO Credit Agreement (as defined below) which provides for a $60 million Term B Loan, $7.9 million Term A Loan, and assumed capital lease obligations. The OnCure transaction included the issuance of $82.5 million in senior secured notes which accrue interest at a rate of 11.75% per annum and additional capital lease financing. On September 26, 2014, a portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under our revolving credit facility, repay all obligations under the South Florida Radiation Oncology Term A, Term A-1, and Term B loans, repay certain other debt and capital leases, as well as provide capital for near-term strategic initiatives and general corporate purposes.

Electronic health records incentive income. The American Recovery and Reinvestment Act of 2009 provides for incentive payments for Medicare eligible professionals who are meaningful users of certified EHR technology. We account for EHR incentive payments utilizing the gain contingency model. Pursuant to the gain contingency model, we recognize EHR incentive payments when the specified meaningful use criteria have been satisfied, as all contingencies in estimating the amount of the incentive payments to be received are resolved. For the year ended December 31, 2014 and 2013, we recognized approximately $0.1 million and $0.0 million, respectively of EHR revenues.

Gain on the sale of an interest in a joint venture. In June 2013, we sold our 45% interest in an unconsolidated joint venture which operated a radiation treatment center in Providence, Rhode Island in partnership with a hospital to provide stereotactic radio-surgery through the use of a cyberknife for approximately $1.5 million, and recorded a respective gain on the sale.

In December 2013, the Company entered into a sale-leaseback transaction with two financial institutions. The sale-leaseback transaction related to medical equipment. Proceeds from the sale were approximately $18.4 million. The Company recorded a loss on the sale-leaseback transaction of approximately $0.3 million.

In addition to the goodwill impairment losses noted above, we recorded an impairment loss of approximately $1.2 million during the third quarter of 2014 related to the write-off of our 33.6% investment interest in a development stage proton therapy center located in New York. As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, we were required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party. On July 15, 2015, we transitioned our ownership interest in NY Proton to a third party.

Early extinguishment of debt. During 2014 we incurred approximately $8.6 million from the early extinguishment of debt as a result of the prepayment of the Term A Loan, Term B Loan, MDLLC Credit Agreement, Note Purchase Agreement (each as defined below), and certain capital leases, which included the write-offs of $2.1 million in deferred financing costs, $2.7 million in original issue discount costs, and $3.8 million in pre-payment penalties, including $0.3 million paid to Theriac Management Investments, LLC ("Theriac") (a related party real estate entity owned by certain of the Company's directors and officers) pursuant to the Note Purchase Agreement.

Equity initial public offering expenses. In May 2014, we decided, due to market conditions, to postpone the initial public offering of our equity securities. As a result of the postponement and entering into the Recapitalization Support Agreement with Consenting Subordinated Noteholders, we wrote-off approximately $4.9 million in expenses associated with the initial public offering.

acquisition dates. We estimate the fair value of the earn-out liabilities at each reporting date. Changes to the estimated earn-out liabilities are recorded to expense in the fair value adjustment of noncontrolling interest and earn-out liability caption in the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2014 and 2013, we recorded $1.6 million and $0.1 million, respectively related to changes in the fair value of earn-out liabilities.

Loss on foreign currency derivative contracts. We are exposed to a significant amount of foreign exchange risk, primarily between the U.S. dollar and the Argentine Peso. This exposure relates to the provision of radiation oncology services to patients at our Latin American operations and purchases of goods and services in foreign currencies. We maintained a foreign currency derivative contract which expired on March 31, 2014. The expiration of the foreign currency derivative contract and the mark to market valuation of the remaining contracts resulted in a gain of $4,000 in 2014 and a loss of approximately $0.5 million in 2013.

Income taxes. Our effective tax rate was (0.7)% in fiscal 2014 and 21.2% in fiscal 2013. The change in the effective rate in 2014 compared to the same period of the year prior is primarily due to the favorable effect of the OnCure purchase price adjustments on the valuation allowance booked against our net deferred tax assets in 2013 and by the release of previously recorded reserves related to US federal, state and international tax issues and the recording of a noncash impairment charge relating to goodwill in the U.S. domestic reporting segment of $229.5 million during 2014. As a result, on an absolute dollar basis, the expense for income taxes changed by $25.4 million from the income tax benefit of $23.1 million in 2013 to an income tax expense of $2.3 million in 2014.

Net loss. Net loss increased by $266.7 million, from $86.0 million in net loss in 2013 to $352.7 million net loss in 2014. Net loss represents 11.9% of total revenues in 2013 and 34.6% of total revenues in 2014.

Our principal capital requirements are for working capital, acquisitions, expansion and de novo treatment center development. Working capital is funded through cash from operations, supplemented, as needed, by our revolving credit facility. The construction of de novo treatment centers has historically been funded directly by third parties and then leased to us. We finance our operations, capital expenditures and acquisitions through a combination of borrowings and cash generated from operations.

We are currently highly leveraged. As of December 31, 2015, we had $1.1 billion of long-term debt outstanding. We have experienced and continue to experience losses from operations. We reported a net loss of approximately $126.8 million, $352.7 million, and $86.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. At December 31, 2015, we had $65.2 million of

unrestricted cash and $61.5 million of availability under our revolver after factoring in capacity absorbed by outstanding letters of credit. As of June 30, 2016, we were fully drawn under our revolver.

Our high level of debt could have adverse effects on our business and financial condition. Specifically, our high level of debt could have important consequences, including the following:

Further, subject to certain qualifications, the 2015 Credit Agreement and the Senior Notes Indenture, each as currently in effect, require us to receive, subject to certain important qualifications set forth therein, (1) no later than September 10, 2016, net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments in an aggregate amount of at least $25.0 million (the "First Capital Event"), (2) no later than November 30, 2016, additional net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments and/or sales of assets (which sale transactions must be deleveraging transaction on a pro forma basis) in an aggregate amount of at least $25.0 million (or a lesser amount such that when combined with the proceeds from the First Capital Event, the total amount is not less than $50.0 million) (the "Second Capital Event") and (3) no later than March 31, 2017, additional net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments and/or sales of assets (which sale transactions must be deleveraging transactions on a pro forma basis) in an aggregate amount of at least the lesser of (A) $75.0 million (or a lesser amount such that when combined with the proceeds from the First Capital Event and the Second Capital Event, the total amount is not less than $125.0 million), and (B) an amount such that, after giving effect to such issuance or sale of capital stock or other equity investments and/or sales of assets, 21C's cash and cash equivalents plus unused revolving loan commitments equals at least $120.0 million and 21C's consolidated leverage ratio is not greater than 6.4 to 1.00 (the "Third Capital Event" and together with the First Capital Event and the Second Capital Event, the "Capital Events" and each, a "Capital Event"). We are also required to comply with a minimum liquidity covenant in an amount not less than $40.0 million after the completion of the First Capital Event, to be tested monthly prior to the completion of the Third Capital Event and quarterly thereafter. Our failure to satisfy such requirements could result in an event of default under the 2015 Credit Agreement or Senior Notes Indenture, which could result in the debt thereunder being accelerated. While the Company is pursuing a variety of initiatives to satisfy the requirements of the 2015 Credit Agreement and Senior Notes Indenture, we do not have firm commitments to obtain the required equity or dispose of assets in place, and we may not be able to maintain the required levels of liquidity. Consequently there is substantial doubt about the Company's ability to continue as a going concern.

negatively and materially impact our existing and future business relationships, and others may choose not to deal with us at all due to concerns about our ability to meet our contractual obligations.

Within the last year, we have remitted significant amounts of cash to CMS as a result of the FISH and GAMMA settlements, the Meaningful Use attestation issue and other compliance related matters. In addition, significant cash costs have been associated with these same matters, including legal, compliance and accounting fees. Moreover, industry trends have affected us negatively. These trends include reimbursement reductions by CMS and shifts in treatment protocols that have reduced treatment volumes.

Looking forward these industry trends appear to be more stable. CMS has confirmed a rate freeze until 2018 and the impact of the change in treatment protocol appears to have been absorbed in the business. In addition to the improved stability in revenue, we have undertaken and continue to implement significant cost saving initiatives. We expect operating cash flow improvement to commence in the fourth quarter of 2016 and continue to improve in the first half of 2017 due to the seasonality of the business.

In efforts to enhance our liquidity position above the required capital events, we are also pursuing financing transactions permitted under our credit agreement and indenture.

As such we feel confident in our ability to meet our financial obligations over the next twelve months.

Net cash provided by operating activities for the year ended December 31, 2015 was $8.4 million. Net cash used in operating activities for the years ended December 31, 2014 and 2013 was $14.8 million and $11.0 million, respectively.

Net cash provided by operating activities increased by $23.2 million from $14.8 million used in operating activities in 2014 to $8.4 million provided by operating activities in 2015 predominately due to increased cash flow related to our OnCure and SFRO transactions, along with continued expense management of consulting and other general and administrative expenses.

Net cash used in operating activities increased by $3.8 million from $11.0 million in 2013 to $14.8 million in 2014 predominately due to management of our vendor payables and increased cash flow related to our OnCure and SFRO transactions. In June 2014, we recorded a preliminary impairment loss of approximately $182.0 million as a result of us experiencing some liquidity issues after terminating our previously planned initial public offering. We finalized our goodwill impairment for step two of the process as of September 30, 2014 and recorded an additional $46.3 million in goodwill impairment and $1.2 million in impairment related to our write-off of our 33.6% investment interest in NY Proton. As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, we are required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party.

Net cash used in investing activities for 2015, 2014, and 2013 was $68.1 million, $113.8 million, and $118.5 million, respectively.

Net cash used in investing activities decreased by $45.7 million, from $113.8 million in 2014 to $68.1 million in 2015. In 2015, net cash used in investing activities was impacted by approximately $34.2 million associated with the acquisition of medical practices. On January 2, 2015, we purchased an 80% equity interest in a legal entity that operates a radiation oncology facility in Kennewick, Washington for approximately $17.6 million in cash and a $1.3 million contingent earn-out payment. On January 6, 2015, we purchased the assets of a radiation oncology practice located in Warrick, Rhode Island for approximately $8.0 million in cash. On December 14, 2015, we acquired the assets of a radiation oncology practice we already manage located in Miami, Florida for approximately $6.6 million. The transaction was funded with $1.1 million in cash and a $5.5 million seller financing note. During 2015, we paid approximately $6.7 million associated with settlement of reserve funds pursuant to the OnCure, SFRO and Roanoke transactions. In addition, we purchased approximately $40.9 million in property and equipment for the year ended December 31, 2015.

Net cash used in investing activities decreased by $4.7 million from $118.5 million in 2013 to $113.8 million in 2014. In 2014, net cash used in investing activities was impacted by approximately $50.2 million in the acquisition of medical practices. On February 10, 2014, we purchased a 65% equity interest in SFRO for approximately $65.5 million, subject to working capital and other customary adjustments. The transaction was primarily funded with the proceeds of a new $60 million term loan facility, $2.0 million seller financing note, and $7.9 million of term loans to refinance existing SFRO debt. In addition, we reflected approximately $11.7 million as restricted cash relating to the SFRO existing debt and an indemnity escrow for the determination of the final purchase price as well as recording $11.1 million as a contingent earn out payment. On April 21, 2014, we purchased the assets of a radiation oncology practice located in Boca Raton, Florida for approximately $0.4 million. During 2014, we purchased approximately $56.6 million in property and equipment. We have one of the most technically-advanced radiation equipment platforms in the industry. A significant portion of this spend is for growth related projects. This includes the upgrade of technology and equipment at the legacy OnCure centers to expand capacity as well as add SRS capacity, and MDLLC's growth.

In 2013, net cash used in investing activities was impacted by approximately $0.8 million in cash paid for the assets of several physician practices in Arizona, New Jersey and North Carolina, and approximately $17.7 million in cash paid for the assets of five radiation oncology practices and a urology group located in Lee and Collier Counties in Southwest Florida in May 2013. In June 2013, we contributed our Casa Grande, Arizona radiation physician practice and approximately $5.0 million to purchase a 55.0% interest in a joint venture. In June 2013, we entered into a "stalking horse" investment agreement to acquire OnCure upon effectiveness of its plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code for approximately $125.0 million, (excluding capital leases, working capital and other adjustments). The purchase price included $42.5 million in cash and entering into up to $82.5 million of debt with OnCure's prior bondholders ($7.5 million of assumed debt will be released assuming certain OnCure centers achieve a minimum level of EBITDA). We funded an initial deposit of approximately $5.0 million into an escrow account subject to the working capital adjustments.

On October 25, 2013, we completed the acquisition of OnCure. The transaction was funded through a combination of cash on hand, borrowings from our senior secured credit facility and the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions.

In 2013, net cash used in investing activities was impacted by approximately $0.5 million in contribution of capital to an unconsolidated joint venture. In June 2013, we sold our 45% interest in an unconsolidated joint venture which operated a radiation treatment center in Providence, Rhode Island for approximately $1.5 million. In July 2013, we purchased the remaining 38.0% interest in a joint venture radiation facility, located in Woonsocket, Rhode Island from a hospital partner for approximately $1.5 million. In July 2013 we purchased a company, which operates a radiation treatment center in Tijuana, Mexico for approximately $1.6 million. In October 2013, we purchased a radiation therapy treatment center in Roanoke Rapids, North Carolina for approximately $2.2 million. During 2013, we entered into foreign exchange option contracts expiring on June 2014 to convert a significant portion of our forecasted foreign currency denominated net income into U.S. dollars to limit the adverse impact of a weakening Argentine Peso against the U.S. dollar. The cost of the option contracts, were approximately $0.2 million.

Historically, our capital expenditures have been primarily for equipment, leasehold improvements and information technology equipment. Total capital expenditures, inclusive of amounts financed through capital lease arrangements, outstanding accounts payable relating to the acceptance and delivery of medical equipment and exclusive of the purchase of radiation treatment centers, were $46.2 million, $77.3 million and $43.7 million in 2015, 2014 and 2013, respectively. Historically, we have funded our capital expenditures with cash flows from operations, borrowings under our senior secured credit facilities and borrowings under lease lines of credit.

Net cash provided by financing activities for 2015, 2014 and 2013 was $25.9 million, $210.6 million and $131.6 million, respectively.

On January 6, 2015, one of our joint ventures acquired the assets of a radiation oncology practice located in Warwick, Rhode Island for approximately $8.0 million. Two of our hospital partners in the joint venture contributed approximately $3.2 million in 2015 for the purchase transaction. On January 6, 2015, we purchased an additional 9% interest in a joint venture radiation oncology practice for approximately $1.2 million in cash. On July 2, 2015, we purchased the remaining 35% of SFRO for $44.1 million, comprised of $15.0 million in cash, $14.6 million SFRO PIK Notes, and $14.5 million in 21CI preferred stock.

On February 1, 2015, the Company formed a joint venture comprising the operations of three radiation therapy centers located in New Jersey and sold a 30% interest of the joint venture to the Lourdes Health systems for approximately $0.7 million.

In 2015, we paid approximately $26.5 million in loan costs associated with the refinancing of our long term debt in April 2015 with the issuance on new subordinated notes due in 2023 and a new senior credit facility. With the refinancing, we paid approximately $24.9 million related to breakage, premium call payments and tender offer payments on our $380.1 million senior subordinated notes, $350.0 million senior secured second lien notes and our $75.0 million senior secured notes.

During 2015, we paid approximately $8.5 million predominately related to the earn-out liabilities associated with the OnCure notes and two previous acquisitions in North Carolina.

On January 2, 2014, we sold a 20% share of our Southern New England Regional Cancer Care joint venture each to Care New England Health System ("CNE") and Roger Williams Medical Center. Also during the quarter, CNE acquired a 20% interest in our Roger Williams Medical Center joint venture. We received payments of approximately $1.3 million from the issuance of noncontrolling interests in these joint ventures.

On February 10, 2014, 21C East Florida and South Florida Radiation Oncology Coconut Creek, LLC ("Coconut Creek"), a subsidiary of SFRO, as borrowers, the several lenders and other

financial institutions or entities from time to time parties thereto and Cortland Capital Market Services LLC as administrative agent and collateral agent entered into a new credit agreement (the "SFRO Credit Agreement"). The SFRO Credit Agreement provides for a $60 million Term B Loan in favor of 21C East Florida ("Term B Loan") and $7.9 million Term A Loan in favor of Coconut Creek issued for purposes of refinancing existing SFRO debt ("Term A Loan" and together with the Term B Loan, the "SFRO Term Loans"). The SFRO Term Loans each have a maturity date of January 15, 2017. We incurred approximately $1.0 million in deferred financing costs relating to the SFRO debt.

On September 26, 2014, we issued to CPPIB, in a private placement, an aggregate of 385,000 newly issued shares of our Series A Preferred Stock for a purchase price of $325.0 million. A portion of the net proceeds from the issuance of our Series A Preferred Stock was used to repay all outstanding borrowings under our revolving credit facility, repay all obligations under the South Florida Radiation Oncology Term A, Term A-1, and Term B loans, repay certain other debt and capital leases, as well as provide capital for near-term strategic initiatives and general corporate purposes.

For the year ended December 31, 2014, we paid approximately $4.9 million in costs associated with the initial public offering costs.

On October 25, 2013, we completed the acquisition of OnCure. The transaction included the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions. Interest is payable on the secured notes on each January 15 and July 15, commencing July 15, 2014.

We had partnership distributions from non-controlling interests of approximately $2.2 million, $3.6 million, and $5.2 million in 2013, 2014, and 2015, respectively.

On April 30, 2015, 21C entered into the Credit Agreement (the "2015 Credit Agreement") among 21C, as borrower, us, Morgan Stanley Senior Funding, Inc., as administrative agent (in such capacity, the "2015 Administrative Agent"), collateral agent, issuing bank and swingline lender, the other agents party thereto and the lenders party thereto.

The credit facilities provided under the 2015 Credit Agreement consist of a revolving credit facility providing for up to $125 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit) (the "2015 Revolving Credit Facility") and an initial term loan facility providing for $610 million of term loan commitments (the "2015 Term Facility," and together with the 2015 Revolving Credit Facility, the "2015 Credit Facilities"). 21C may (i) increase the aggregate amount of revolving loans by an amount not to exceed $25 million in the aggregate and (ii) subject to a consolidated secured leverage ratio test, increase the aggregate amount of the term loans or the revolving loans by an unlimited amount or issue pari passu or junior secured loans or notes or unsecured loans or notes in an unlimited amount. The 2015 Revolving Credit Facility matures April 30, 2020 and the 2015 Term Facility matures April 30, 2022. As of December 31, 2015, 21C had approximately $60 million outstanding under the 2015 Revolving Credit Facility and approximately $601.5 million outstanding under the 2015 Term Facility.

Borrowings pursuant to the 2015 Credit Agreement are secured on a first priority basis by a perfected security interest in substantially all of our assets.

Loans under the 2015 Revolving Credit Facility are subject to the following interest rates:

(a) for loans which are Eurodollar loans, including LIBOR loans for any interest period, at a rate per annum equal to a percentage equal to (i) the rate per annum as administered by ICE Benchmark Administration, determined on the basis of the rate for deposits in dollars for a period equal to such

interest period commencing on the first day of such interest period as of 11:00 A.M., London time, two business days prior to the beginning of such interest period divided by (ii) 1.0 minus the then stated maximum rate of all reserve requirements applicable to any member bank of the Federal Reserve System in respect of euro currency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D), plus (iii) an applicable margin of 5.5% based upon a total leverage pricing grid; and

(b) for loans which are base rate loans, (i) the greatest of (A) the 2015 Administrative Agent's prime lending rate on such day, which was 3.50% as of December 31, 2015, (B) the federal funds effective rate at such time plus ¹/2 of 1%, and (C) the Eurodollar Rate for a Eurodollar Loan with a one-month interest period commencing on such day plus 1.00%, plus (ii) an applicable margin of 4.5% based upon a total leverage pricing grid.

21C will pay certain recurring fees with respect to the 2015 Revolving Credit Facility, including (i) fees on the unused commitments of the lenders under the 2015 Revolving Credit Facility, (ii) letter of credit fees on the aggregate face amounts of outstanding letters of credit and (iii) administration fees.

(a) for loans which are Eurodollar loans, including London Interbank Offered Rate ("LIBOR") for any interest period, at a rate per annum equal to a percentage equal to (i) the rate per annum as administered by ICE Benchmark Administration, determined on the basis of the rate for deposits in dollars for a period equal to such interest period commencing on the first day of such interest period as of 11:00 A.M., London time, two business days prior to the beginning of such interest period divided by (ii) 1.0 minus the then stated maximum rate of all reserve requirements applicable to any member bank of the Federal Reserve System in respect of euro currency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D), provided that such percentage shall be deemed to be not less than 1.00%, plus (iii) an applicable margin of 5.50%; and

(b) for loans which are base rate loans, (i) the greatest of (A) the 2015 Administrative Agent's prime lending rate on such day, (B) the federal funds effective rate at such time plus ¹/2 of 1%, and (C) the Eurodollar Rate for a Eurodollar Loan with a one-month interest period commencing on such day plus 1.00%, provided that such percentage shall be deemed to be not less than 2.00%, plus (ii) an applicable margin of 4.50%.

The 2015 Credit Agreement contains customary representations and warranties, subject to limitations and exceptions, and customary covenants restricting the ability (subject to various exceptions) of 21C and certain of its subsidiaries to: incur additional indebtedness (including guarantee obligations); incur liens; engage in mergers or other fundamental changes; sell certain property or assets; pay dividends of other distributions; consummate acquisitions; make investments, loans and advances; prepay certain indebtedness, including the Senior Notes (as defined below); change the nature of their business; engage in certain transactions with affiliates; and incur restrictions on the ability of 21C's subsidiaries to make distributions, advances and asset transfers. In addition, under the 2015 Credit Facilities, we are required to comply with a first lien leverage ratio of 7.50 to 1.00 until March 30, 2018, stepping down to 6.25 to 1.00 thereafter. The first lien leverage ratio is as follows as of December 31, 2015:

indebtedness; bankruptcy and insolvency events; inability to pay debts; monetary judgment defaults; actual or asserted invalidity or impairment of any definitive loan documentation and a change of control. The obligations of 21C under the 2015 Credit Facilities are guaranteed by the Company and each direct and indirect, domestic subsidiary of 21C, subject to customary exceptions.

On April 15, 2014, we obtained a waiver of borrowing conditions due to a default of not providing audited financial statements for the year ended December 31, 2013 within 90 days after year end. We paid the administrative agent for the account of the Revolving Lenders a fee equal to 0.125% of such Lender's aggregate commitments. The Senior Revolving Credit Facility provides for a 30 day cure period for the filing of the audited annual consolidated financial statements. The default was cured with the provision of the audited consolidated financial statements to the administrative agent on April 30, 2014.

On June 10, 2016, we entered into an amendment and waiver ("Amendment No. 1") to the 2015 Credit Agreement, which waived through July 31, 2016 any default or event of default under the 2015 Credit Agreement for failure to timely provide the audited annual financial statements and related reports and certificates for the year ended December 31, 2015 and quarterly financial statements and related reports and certificates for the quarter ended March 31, 2016 (the "Specified Deliverables").

Additionally, Amendment No. 1 waived any cross-default that may have arisen under the 2015 Credit Agreement prior to or on July 31, 2016 as a result of a default or event of default under the indenture governing the Senior Notes, which occurred as a result of the Company's failure to timely deliver to the trustee under the indenture governing the Senior Notes its annual report on Form 10-K for the year ended December 31, 2015 (the "Delayed 10-K") and its quarterly report on Form 10-Q for the quarter ended March 31, 2016 (the "Delayed 10-Q").

Amendment No. 1 also amends the interest rates applicable to the loans under the 2015 Credit Agreement. Loans under the term loan credit facility, as amended, are subject to the following interest rates: (a) for loans which are Eurodollar loans, 6.00% per annum; and (b) for loans which are ABR loans, 5.00% per annum. Loans under the 2015 Revolving Credit Facility, with respect to the Eurodollar loans or the ABR loans, as applicable, are determined on the basis of a pricing grid tied to 21C's consolidated leverage ratio. Amendment No. 1 further provides that the interest rate applicable to the loans under the Credit Agreement increases in each case by 0.125% per annum as of July 1, 2016 in the event that 21C did not deliver the Specified Deliverables to the Administrative Agent by June 30, 2016.

On August 15, 2016, we entered into an amendment and waiver ("Amendment No. 2") to the 2015 Credit Agreement.

Notwithstanding any qualification provided for in the above described Capital Events, Amendment No. 2 requires that 21C receive, on or prior to March 31, 2017, at least $50.0 million of net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments.

Amendment No. 2 provides for a new minimum liquidity covenant pursuant to which 21C must maintain at least $40.0 million of liquidity after the completion of the First Capital Event, which will be tested monthly prior to the completion of the Third Capital Event and quarterly thereafter.

Amendment No. 2 also amends certain existing covenants (and definitions related thereto) in the 2015 Credit Agreement and provides for additional restrictions regarding the ability of 21C and certain of its subsidiaries to incur additional debt, make restricted payments and make investments. These covenants are subject to a number of important limitations and exceptions.

On April 30, 2015, 21C completed an offering of $360.0 million aggregate principal amount of 11.00% senior notes due 2023 at an issue price of 100.00% (the "Senior Notes"). The Senior Notes are senior unsecured obligations of 21C and are guaranteed on an unsecured senior basis by us and each of 21C's existing and future direct and indirect domestic subsidiaries that is a guarantor (the "Guarantors") under the 2015 Credit Facilities.

The Senior Notes were issued in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), to qualified institutional buyers in accordance with Rule 144A and to persons outside of the United States pursuant to Regulation S under the Securities Act.

21C used the net proceeds from the offering, together with cash on hand and borrowings under the 2015 Credit Facilities, to repay our $90.0 million Term Facility, to redeem our 9⁷/8% Senior Subordinated Notes due 2017 and our 8⁷/8% Senior Secured Second Lien Notes due 2017, to repurchase a portion of the 11³/4% Senior Secured Notes due 2017 issued by OnCure, to pay related

fees and expenses and for general corporate purposes. We incurred approximately $26.5 million in transaction fees and expenses, including legal, accounting, and other fees associated with the offering.

We incurred a loss of approximately $37.4 million from the early extinguishment of debt as a result of the notes offering in April 2015. We paid approximately $24.9 million in premium payments for the early retirement of our $350.0 million senior secured second lien notes and $380.1 million senior subordinated notes, along with the tender offer premium payments on the $75.0 million senior secured notes. As a result of the notes offering, we wrote-off approximately $3.1 million in original issue discount and $9.4 million in deferred financing costs.

The Senior Notes were issued pursuant to an indenture, dated April 30, 2015 (the "Senior Notes Indenture") among 21C, the Guarantors and Wilmington Trust, National Association, as trustee (the "Trustee"), governing the Senior Notes. As of December 31, 2015, 21C had $360.0 million aggregate principal amount of Senior Notes outstanding.

Interest is payable on the Senior Notes on each May 1 and November 1, commencing November 1, 2015. 21C may redeem some or all of the Senior Notes at any time prior to May 1, 2018 at a price equal to 100% of the principal amount of the Senior Notes redeemed plus accrued and unpaid interest to the redemption date, if any, and an applicable make-whole premium. On or after May 1, 2018, 21C may redeem some or all of the Senior Notes at redemption prices set forth in the Senior Notes Indenture. In addition, at any time prior to May 1, 2018, 21C may redeem up to 35% of the aggregate principal amount of the Senior Notes, at a specified redemption price with the net cash proceeds of certain equity offerings.

The Senior Notes Indenture contains covenants that, among other things, restrict the ability of 21C and certain of its subsidiaries to: incur additional debt or issue preferred shares; pay dividends on or make distributions in respect of their equity interest or make other restricted payments; sell certain assets; create liens on certain assets to secure debt; consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; enter into certain transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important limitations and exceptions. In addition, in certain circumstances, if 21C sells assets or experiences certain changes of control, it must offer to purchase the Senior Notes.

On July 25, 2016, we entered into the second supplemental indenture to the Senior Notes Indenture (the "Second Supplemental Indenture"), providing for a limited waiver through July 31, 2016 of certain defaults or events of default under the Senior Notes Indenture for failure to timely furnish to the trustee and holders of the Senior Notes or file with the SEC the Delayed 10-K or Delayed 10-Q. As consideration for the foregoing, 21C paid to all holders of the Senior Notes an amount representing additional interest on the Senior Notes equal to $2.30 per $1,000 principal amount of the Senior Notes. 21C also paid certain fees and expenses of the advisors to certain holders of the Senior Notes incurred in connection with the Second Supplemental Indenture.

On August 16, 2016, 21C received the requisite consents from the holders of a majority of the aggregate principal amount of the Senior Notes outstanding to enter into a third supplemental indenture (the "Third Supplemental Indenture") to the Senior Notes Indenture.

(1) through September 10, 2016, in respect of certain defaults or events of default under the Senior Notes Indenture resulting from failure to timely furnish to the Trustee and holders of the Senior Notes or file with the SEC the Delayed 10-K; and

(2) through September 30, 2016, in respect of certain defaults or events of default under the Senior Notes Indenture resulting from failure to timely furnish to the Trustee and holders of the Senior Notes or file with the SEC the Quarterly SEC Reports.

The Third Supplemental Indenture requires 21C to complete each Capital Event as described above and in the same time frame described above.

The Third Supplemental Indenture provides for a new minimum liquidity covenant pursuant to which 21C must maintain at least $40.0 million of liquidity after the completion of the First Capital Event, which will be tested monthly prior to the completion of the Third Capital Event and quarterly thereafter.

The Third Supplemental Indenture also amends certain existing covenants (and definitions related thereto) in the Senior Notes Indenture and provides for additional restrictions regarding the ability of 21C and certain of its subsidiaries to incur additional debt and pay dividends on or make distributions in respect of their equity interests or make other restricted payments. These covenants are subject to a number of important limitations and exceptions.

Pursuant to the Third Supplemental Indenture, in addition to any cash interest provided for in the Senior Notes Indenture, during the period starting on August 1, 2016 through August 31, 2016, holders of the Senior Notes will be entitled to PIK interest at a rate of 0.75% per annum, which rate will increase by an additional 0.75% per annum on the first day of each subsequent month, commencing on September 1, 2016. PIK interest will be paid monthly on the first day of each month, starting on September 1, 2016. PIK interest will stop accruing on the date of completion of the Third Capital Event, and the last PIK interest payment will be made on the first day of the month following such date.

The Third Supplemental Indenture also provides that the holders of a majority of the aggregate principal amount of the Senior Notes outstanding shall have the right to designate one non-voting board observer to attend meetings of the Board of Directors of each of the Company and 21C until the date of completion of the Third Capital Event.

Our billing system in the U.S., excluding recently acquired businesses, utilizes a fee schedule for billing patients, third-party payers and government sponsored programs such that fees billed to each responsible party are automatically adjusted to the allowable payment amount at time of billing.

For all fees billed from the SFRO billing system, contractual adjustments are recorded upon the receipt of payment. As a result, an estimate of contractual allowances is made on a monthly basis to reflect the estimated realizable value of net patient service revenue. The development of the estimate of contractual allowances is based on historical cash collections related to gross charges developed by facility and payer in order to calculate average collection percentages by facility and payer. The development of the collection percentages are applied to gross accounts receivable in determining an estimate of contractual allowances at the end of a reporting period. We are currently integrating the SFRO practice management system to our processes and billing system.

Insurance information is requested from all patients either at the time the first appointment is scheduled or at the time of service. A copy of the insurance card is scanned into our system at the time of service so that it is readily available to staff during the collection process. Patient demographic information is collected for both our clinical and billing systems. It is our policy to collect co-payments from the patient at the time of service.

Charges are posted to the billing system by coders in our central billing office and our medical offices. After charges are posted, edits are performed, any necessary corrections are made, billing forms are generated and sent electronically to our clearinghouse whenever electronic submission is possible. Any billing forms not able to be processed through the clearinghouse are printed and mailed from our print mail service. Statements are automatically generated from our billing system and mailed to either the payer or patient on a regular basis for any amounts still outstanding from the respective responsible

party. Daily, weekly and monthly accounts receivable analysis reports are utilized by staff and management to prioritize accounts for collection purposes, as well as to identify trends and issues. Our write-off process requires manual review and our process for collecting accounts receivable is dependent on the type of payer as set forth below.

In our international operations, generally, our commercial and billing department obtains an authorization by the payer for the type of radiation therapy services to be provided and the agreed upon amount for the completion of the course of treatment. Upon completion of the course of treatment, the billing department invoices the payer for the authorized amount. If the course of treatment is not completed due to cancellations, death of patient etc., the commercial department contacts the payer to negotiate a revised fee.

Our central billing office staff expedites the payment process from insurance companies and other payers via electronic inquiries, phone calls and automated letters to ensure timely payment. Our billing system generates standard aging reports by date of billing in increments of 30 day intervals. The collection team utilizes these reports to assess and determine the payers requiring additional focus and collection efforts. Our accounts receivable exposure on Medicare, Medicaid and commercial payer balances is largely limited to denials and other unusual adjustments and consequently our bad debt expense on balances relating to these types of payers over the years has been insignificant.

In the event of denial of payment, we follow the payers' standard appeals process, both to secure payment and to lobby the payers, as appropriate, to modify their medical policies to expand coverage for the newer and more advanced treatment services that we provide which, in many cases, is the payers' reason for denial of payment. If all reasonable collection efforts with these payers have been exhausted by our central billing office staff, the account receivable is written-off.

We administer self-pay account balances through our central billing office and our policy is to first attempt to collect these balances. If initial attempts are unsuccessful, we often send outstanding self-pay patient claims to collection agencies at designated points in the collection process. In some cases, monthly payment arrangements are made with patients for the account balance remaining after insurance payments have been applied. These accounts are reviewed monthly to ensure payments continue to be made in a timely manner. Once it has been determined by our staff that the patient is not responding to our collection attempts, a final notice is mailed. This generally occurs more than 120 days after the date of the original bill. If there is no response to our final notice, after 30 days the account is assigned to a collection agency and, as appropriate, recorded as a bad debt and written off.

The following table summarizes our change in treatment centers in which we operate for the year ended December 31, 2015:

On December 14, 2015, we acquired the assets of a radiation oncology practice we already manage located in Miami, Florida for approximately $6.6 million.

On November 16, 2015 we commenced operations at a de novo radiation therapy center located in Lompoc, California.

On August 1, 2015, we purchased a controlling interest in an entity that operates a cancer treatment center located in Medellin, Colombia for approximately $0.8 million.

On July 2, 2015, we purchased the remaining 35% of SFRO for approximately $44.1 million, comprised of $15.0 million in cash, $14.6 million SFRO PIK Notes, and $14.5 million in 21CI preferred stock.

On April 1, 2015, we entered into an amended outpatient radiation therapy management services agreement with a medical group to expand our management services to a radiation oncology treatment site located in Corbin, Kentucky.

On February 1, 2015, we formed a joint venture comprising the operations of three radiation therapy centers located in New Jersey and sold a 30% interest of the joint venture to the Lourdes Health Systems for approximately $0.7 million.

On January 16, 2015, we commenced operations at a de novo radiation therapy center located in Weaverville, North Carolina.

On January 12, 2015, we entered into an arrangement to lease the space and equipment and assume responsibility for the operations of the radiation therapy center located in the Good Samaritan Medical Center in West Palm Beach, Florida.

On January 6, 2015, we acquired the assets of a radiation oncology practice located in Warwick, Rhode Island for approximately $8.0 million. The acquisition further expands our presence in Rhode Island.

On January 6, 2015, we purchased an additional 9.0% interest in a joint venture radiation facility, located in Providence, Rhode Island for approximately $1.2 million.

On January 6, 2015, we acquired the additional assets of a radiation oncology practice we already manage located in Hollywood, Florida for approximately $0.5 million.

On January 2, 2015, we purchased an 80% interest in a legal entity that operates a radiation oncology facility in Kennewick, Washington for approximately $18.9 million. The acquisition expands our presence into the state of Washington. The purchase agreement contains a provision for earn out payments, contingent upon achieving certain EBITDA targets measured over three years from the acquisition date. The earn out payments cannot exceed approximately $3.4 million.

The operations of the foregoing acquisitions have been included in the accompanying consolidated statements of operations and comprehensive loss from the respective dates of each acquisition. When we acquire a treatment center, the purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values.

During the fourth quarter of 2015, we consolidated one treatment center located in Manatee County related to the acquisition of OnCure. In addition we closed one treatment center in New York as a result of expiration of the underlying real estate lease.

During the third quarter of 2015, we consolidated two treatment centers, one located in Broward County and one located in St. Lucie County, both related to the acquisition of SFRO.

During the first quarter of 2015, we consolidated one radiation treatment center located in Tandil, Argentina into a nearby radiation treatment center. In addition, we sold the assets of our Riverhead, New York radiation treatment center on March 31, 2015.

On January 1, 2016, we contributed our Greenville, North Carolina treatment center operations into a newly formed joint venture. Simultaneously, a local hospital system contributed their Greenville, North Carolina treatment center operations into the joint venture and purchased additional ownership interests from us for approximately $6.2 million. As a result, we own 50% of the joint venture.

As of December 31, 2015, we have three additional de novo radiation treatment centers located in The Dominican Republic and South Carolina. The internal development of radiation treatment centers is subject to a number of risks including but not limited to risks related to negotiating and finalizing agreements, construction delays, unexpected costs, obtaining required regulatory permits, licenses and approvals and the availability of qualified healthcare and administrative professionals and personnel. As such, we cannot assure you that we will be able to successfully develop radiation treatment centers in accordance with our current plans and any failure or material delay in successfully completing planned internally developed treatment centers could harm our business and impair our future growth.

We had been selected by a consortium of leading New York academic medical centers (including Memorial Sloan-Kettering Cancer Center, Beth Israel Medical Center/Continuum Health System, NYU Langone Medical Center, Mt. Sinai Medical Center and Montefiore Medical Center) to serve as the developer and manager of a proton beam therapy center to be constructed in Manhattan. The project is in the final stages of certificate of need approval. As a result of NY Proton's continued operating losses since its inception in 2010 and our liquidity issues experienced during the quarter ended June 30, 2014, we provided notice to the consortium that we may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, we were required to use commercially reasonable efforts to transfer and sell our ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party. We had accounted for our interest in the center as an equity method investment. On July 15, 2015, we transitioned our ownership interest in NY Proton to a third party.

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We continuously evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

We believe the following critical accounting policies are important to the portrayal of our financial condition and results of operations and require our management's subjective or complex judgment because of the sensitivity of the methods, assumptions and estimates used in the preparation of our consolidated financial statements.

We evaluate certain radiation oncology practices in order to determine if they are variable interest entities ("VIEs"). This evaluation resulted in us determining that certain of our radiation oncology

practices were potential VIEs. For each of these practices, we have evaluated (1) the sufficiency of the fair value of the entity's equity investments at risk to absorb losses, (2) that, as a group, the holders of the equity investments at risk have (a) the direct or indirect ability through voting rights to make decisions about the entity's significant activities, (b) the obligation to absorb the expected losses of the entity and that their obligations are not protected directly or indirectly, and (c) the right to receive the expected residual return of the entity, and (3) substantially all of the entity's activities do not involve or are not conducted on behalf of an investor that has disproportionately fewer voting rights in terms of its obligation to absorb the expected losses or its right to receive expected residual returns of the entity, or both. The Accounting Standards Codification ("ASC"), 810, Consolidation ("ASC 810"), requires a company to consolidate VIEs if the company is the primary beneficiary of the activities of those entities. Certain of our radiation oncology practices are VIEs and we have a variable interest in each of these practices through our administrative services agreements. Other of our radiation oncology practices (primarily consisting of partnerships) are VIEs and we have variable interest in each of these practices because the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without the additional subordinated financial support provided by its members.

The Company recognizes revenue in accordance with FASB ASC Topic 605, Revenue Recognition ("ASC 605"). Accordingly, the Company recognizes revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. MDL Argentina recognizes revenue at invoicing when it cannot conclude that criteria (ii) or (iii) have been met at an earlier point.

Specifically, the Company has determined that MDL Argentina needs to defer revenue recognition on all of its revenue until those contingencies (evidence that services have been rendered and that the fee is fixed or determinable) have been removed which generally occurs when the invoicing process is complete (negotiations, as applicable, with the insurance company are also complete at invoicing). Accordingly, the Company has determined that, net patient revenue should be recognized at invoicing to the insurer.

Generally with respect to net patient service revenue the above criteria is met when services are provided and revenue is reported at the estimated net realizable amount from patients, third-party payers and others for services rendered. The differences between our established billing rates and governmental fee schedules or third-party payer negotiated rates are accounted for as contractual adjustments, which are deducted from gross charges to arrive at net patient service revenue. We must estimate contractual adjustments to prepare our consolidated financial statements. The Medicare and Medicaid regulations and third-party payer contracts under which these contractual adjustments must be calculated are complex and subject to interpretation and adjustment. We estimate the contractual adjustments on a payer class basis given our interpretation of the applicable regulations or contract terms. These interpretations sometimes result in payments that differ from our estimates. Additionally, updated regulations and contract renegotiations occur frequently necessitating regular review and assessment of the estimation process by management. Adjustments to previous reimbursement estimates are accounted for as contractual adjustments and reported in the periods that such adjustments become known. Amounts estimated by management can change by a material amount, due to reviews of billings and contract renegotiations.

Changes in estimates related to the allowance for contractual discounts affect revenues reported in our consolidated statements of operations and comprehensive loss. If our overall estimated allowance for contractual discounts on our revenues for the year ended December 31, 2015 were changed by 1%, our after-tax loss from continuing operations would change by approximately $0.1 million. This is only one example of reasonably possible sensitivity scenarios. A significant increase in our estimate of

contractual discounts for all payers would lower our earnings. This would adversely affect our results of operations, financial condition, liquidity and future access to capital.

Accounts receivable in the accompanying consolidated balance sheets are reported net of estimated allowances for doubtful accounts and contractual adjustments, as further described above. Accounts receivable are uncollateralized and primarily consist of amounts due from third-party payers and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for doubtful accounts to reduce the carrying value of such receivables to their estimated net realizable value.

The allowance for doubtful accounts is based upon our assessment of historical and expected net collections, business and economic conditions, trends in federal and state governmental healthcare coverage, and other collection indicators. The primary tool used in our assessment is an annual, detailed review of historical collections and write-offs of accounts receivable. The results of the detailed review of historical collections and write-off experience, adjusted for changes in trends and conditions, are used to evaluate the allowance amount for the current period. Accounts receivable are written off after collection efforts have been followed in accordance with our policies.

If the actual bad debt allowance percentage applied to our accounts receivable aging would change by 1% from our estimated bad debt allowance percentage for the year ended December 31, 2015, our after-tax loss from continuing operations would change by approximately $1.1 million and our net accounts receivable would change by approximately $1.8 million at December 31, 2015. The resulting change in this analytical tool is considered to be a reasonably likely change that would affect our overall assessment of this critical accounting estimate.

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by us in business combinations. Goodwill and indefinite life intangible assets are not amortized. We test goodwill for impairment annually, at the beginning of its fourth quarter or more frequently if evidence of possible impairment arises. We perform a two-step impairment test on goodwill. In the first step, we compare the fair value of the reporting unit, defined as an operating segment or one level below an operating segment, being tested to its carrying value. The reporting units may change over time as the our operating segments change, or the component businesses therein change, due to economic conditions, acquisitions, restructuring or otherwise. At the time of these events, we reevaluate our reporting units using the reporting unit determination guidelines. As necessary, goodwill is reassigned between the affected reporting units using a relative fair-value approach.

We determine the fair value of reporting units using a combination of the income approach and the market approach. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows. Under the market approach, we estimate fair value based on what investors have paid for similar interests in comparable companies through the development of ratios of market prices to various earnings indications of comparable companies taking

into consideration adjustments for growth prospects, debt levels and overall size. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference.

The process of evaluating the potential impairment of goodwill is subjective and requires significant estimates and assumptions at many points during the analysis. Our estimated future cash flows are based on assumptions that are consistent with our annual planning process and include estimates for revenue and operating margins and future economic and market conditions. Actual future results may differ from those estimates. Changes in assumptions or circumstances could result in an additional impairment in the period in which the change occurs and in future years.

Our intangible assets not subject to amortization consist of trade names and certificates of need. We test these assets for impairment annually, at the beginning of its fourth quarter or more frequently if evidence of possible impairment arises. We apply a fair value-based impairment test to the net book value of the assets using a combination of income and market approaches.

We test our long-lived and intangible assets subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable. If the undiscounted future cash flows from the asset tested are less than the carrying value, a loss equal to the difference between the carrying value and the fair market value of the asset is recorded. Fair value is determined using discounted cash flow methods.

Our analysis requires judgment with respect to many factors, including future cash flows, success at executing its business strategy, and future revenue and expense growth rates. It is possible that our estimates of undiscounted cash flows may change in the future resulting in the need to reassess the carrying value of its long-lived and intangible assets subject to amortization for impairment.

Intangible assets subject to amortization consist of management fee agreements, noncompete agreements, hospital contracts and trade names. Management fee agreements are amortized over the term of each respective agreement, including renewal options which range from 4.7 to 15.2 years using the straight-line method. Noncompete agreements and hospital contracts are amortized over the life of the agreement (which typically ranges from 1.0 to 18.5 years) using the straight-line method.

All share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense in the statement of operations and comprehensive loss over the requisite service period.

For purposes of determining the compensation expense associated with the 2015 equity-based incentive plan grants, we engaged a third party valuation company to value the business enterprise using a variety of widely accepted valuation techniques, which considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity. The third party valuation company then used the probability-weighted expected return method ("PWERM") to determine the fair value of these units at the time of grant. Under the PWERM, the value of the units is estimated based upon an analysis of future values for the enterprise assuming various future outcomes (exits) as well as the rights of each unit class. In developing assumptions for the various exit scenarios, management considered the Company's ability to

achieve a certain growth and profitability milestone in order to maximize shareholder value at the time of potential exit. Management considers an initial public offering of the Company's stock to be one of the exit scenarios for the current shareholders, as well as a sale or merger/acquisition transaction. For the scenarios the enterprise value at exit was estimated based on a multiple of the Company's EBITDA for the fiscal year preceding the exit date. The enterprise value for the scenario where the Company stays private (and under the majority ownership of Vestar, our equity sponsor) was estimated based on a discounted cash flow analysis as well as guideline company market approach. The guideline companies were publicly-traded companies that were deemed comparable to the Company. The discount rate analysis also leveraged market data of the same guideline companies. For each PWERM scenario, management estimated probability factors based on the outlook of the Company and the industry as well as prospects and timing for a potential exit based on information known or knowable as of the grant date. The probability-weighted unit values calculated at each potential exit date was present-valued to the grant date to estimate the per-unit value. The discount rate utilized in the present value calculation was the cost of equity calculated using the Capital Asset Pricing Model and based on the market data of the guideline companies as well as historical data published by Morningstar, Inc. For each PWERM scenario, the per unit values were adjusted for lack of marketability discount to determine unit value on a minority, non-marketable basis.

For 2015, the estimated fair value of the units, less an assumed forfeiture rate of 8.2%, is recognized in expense in the Company's consolidated financial statements on a straight-line basis over the requisite service periods of the awards for Class MEP Units. For Class MEP Units, the requisite service period is approximately 18 months. The Class D Units and E Units compensation will be recognized upon the sale of the Company or an initial public offering. Under the terms of the incentive unit grant agreements governing the grants of the Class D Units and Class E Units, in the event of an initial public offering of the Company's common stock, holders have certain rights to receive shares of restricted common stock of the Company in exchange for their Class D Units and Class E Units. The assumed forfeiture rate is based on an average historical forfeiture rate.

On October 7, 2015, 21CI entered into the Seventh Amended and Restated Limited Liability Company Agreement (the "Amended LLC Agreement"). The Amended LLC Agreement, among other things, authorizes two new classes of incentive units of 21CI, Class D and Class E Units. Each recipient of such Class D and/or Class E Units forfeits any and all incentive equity units previously granted to him/her. Under the Amended LLC Agreement, 21CI now has ten classes of equity outstanding: SFRO Preferred Units, Preferred Units and Class A, D, E, G, M, MEP, N and O Units.

We make estimates in recording our provision for income taxes, including determination of deferred tax assets and deferred tax liabilities and any valuation allowances that might be required against the deferred tax assets. ASC 740, "Income Taxes" ("ASC 740"), requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. For the year ended December 31, 2013, we determined that the valuation allowance should be $96.9 million, consisting of $86.9 million against federal deferred tax assets and $10.0 million against state deferred tax assets. This represented an increase of $14.3 million in valuation allowance. For the year ended December 31, 2014, we determined that the valuation allowance should be $181.7 million, consisting of $161.2 million against federal deferred tax assets and $20.5 million against state deferred tax assets. This represents an increase of $84.8 million in valuation allowance. For the year ended December 31, 2015, we determined that the valuation allowance should be $227.1 million, consisting of $201.9 million against federal deferred tax assets and $25.2 million against state deferred tax assets. This represents an increase of $45.4 million in valuation allowance.

ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

We are subject to taxation in the United States, approximately 24 state jurisdictions, the Netherlands, and throughout Latin America, namely, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala and Mexico. However, the principal jurisdictions for which we are subject to tax are the United States, Florida and Argentina.

In addition, we are routinely under audit by federal, state or local authorities in the areas of income taxes and other taxes. These audits include questioning the timing and amount of deductions and compliance with federal, state, and local tax laws. We regularly assess the likelihood of adverse outcomes from these audits to determine the adequacy of our provision for income taxes. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of such accruals, the effective tax rate could be materially affected.

During 2014, we reached a favorable settlement with the US Internal Revenue Service related to the interest and penalty issues in tax years 2007 and 2008 and various US state and local and foreign jurisdictions related to tax years 2005 through 2012. As a result, we released $3.2 million of previously recorded reserves. During 2015, the statues expired on the remaining foreign issues and we released $0.1 million of previously recorded reserves. No income tax audits were initiated during 2015.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard allows for either a full retrospective or a modified retrospective transition method. In August 2015, the FASB issued ASU 2015-14 that defers the effective date of ASU 2014-09 for all affected entities. As a result, ASU 2014-09 is effective for us beginning January 1, 2018. We intend to adopt the new guidance on January 1, 2018 and are currently evaluating the potential impact of this guidance.

In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 810, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12). The new guidance requires that a performance targets that affect vesting and that could be achieved after the requisite service period be treated as a performance conditions and compensation costs related to the performance conditions be recognized in the period in which it becomes probable that the performance condition will be achieved.

The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. We prospectively adopted this guidance on January 1, 2015.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40). The new guidance addresses management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We are currently assessing the impact of this guidance on our consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (ASU 2015-02). The new guidance intends to reduce the number of consolidation models as well as place more emphasis on risk of loss when determining a controlling financial interest. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. We will adopt this guidance on January 1, 2016 and it is not expected to have a material impact on our consolidated financial statements.

In April 2015, FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The new guidance requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. We will adopt the new guidance on January 1, 2016. As of December 31, 2015, we have recorded approximately $19.8 million of debt issuance costs in other assets that would be reclassified to long-term debt in accordance with the new guidance.

In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The new guidance establishes guidelines for evaluating whether a cloud computing arrangement involves the sale of a software license and the appropriate accounting. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. We will adopt the new guidance on January 1, 2016 and it is not expected to have a material impact on our consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The new guidance requires inventories to be valued at the lower of cost or net realizable value. This guidance does not apply to entities using the last in, first out valuation method. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We intend to adopt January 1, 2017 and are currently evaluating the potential impact of this guidance.

In August 2015, FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The new guidance allows debt issuance costs related to line-of-credit arrangements to be recognized as an asset and amortized ratably over the line-of-credit term. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. We will adopt the new guidance on January 1, 2016. As of December 31, 2015, we have recorded approximately $4.6 million of debt issuance costs in other assets that would be reclassified to long-term debt in accordance with the new guidance.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 requires that an acquirer recognize

adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. We adopted the new guidance on December 31, 2015 and it did not have a material impact on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. Currently deferred taxes for each tax jurisdiction are presented as a net current asset or liability and net noncurrent asset or liability on the balance sheet. To simplify the presentation, the new guidance requires that all deferred tax assets and liabilities for each jurisdiction, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The new guidance becomes effective for public business entities in fiscal years beginning after December 15, 2016. Early adoption is permitted. We adopted this new standard in the fourth quarter of 2015 and have applied the new guidance prospectively. Accordingly, the prior balance sheets were not retrospectively adjusted.

In January 2016, the FASB issued ASU 2016-1 Financial Instruments-Overall (Topic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities for the purpose of improving certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Among other things, this guidance requires entities to measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value with changes in fair value recognized in net income and to perform a qualitative assessment to identify impairment for equity investments without readily determinable fair values. Entities are required to apply this guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption and, for the guidance related to equity securities without readily determinable fair values, entities are required to apply a prospective approach to equity investments that exist as of the date of adoption. This guidance will be effective for us on January 1, 2018. We are currently assessing the impact of this guidance on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02") which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on the consolidated balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018 with early adoption permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating the impact of adopting the new leases standard on our consolidated financial statements. We are party to approximately 400 real estate leases and expects adoption of ASU 2016-02 to have a material impact to our consolidated balance sheets.

In March 2016, the FASB issued ASU No. 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Option in Debt Instruments ("ASU 2016-06") that intends to resolve diversity in practice as it relates to assessing the accounting for contingent put and call options contained in debt instruments. ASU 2016-06 will be effective for annual periods beginning after December 15, 2016 with early adoption permitted. This standard requires a modified retrospective approach upon adoption. We intend to adopt this new standard on January 1, 2017 and are currently evaluating the potential impact of this guidance.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") that modifies several aspects of the accounting for share-based transactions, including the income tax consequences,

classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 will be effective for annual periods beginning after December 15, 2016 with early adoption permitted. This standard requires different adoption methodologies for each aspect adopted. We intend to adopt this new standard on January 1, 2017 and are currently evaluating the potential impact of this guidance.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") for the purpose of replacing the current incurred loss impairment methodology with a methodology that reflects expected credit losses. ASU 2016-13 will be effective for annual periods beginning after December 15, 2019 with early adoption permitted in annual periods beginning after December 15, 2018. This standard requires a modified retrospective transition approach upon adoption. We intend to adopt this new standard on January 1, 2020 and are currently evaluating the potential impact of this guidance.

Legislative and regulatory action has resulted in continuing changes in reimbursement under the Medicare and Medicaid programs that will continue to limit payments we receive under these programs.

Within the statutory framework of the Medicare and Medicaid programs, there are substantial areas subject to legislative and regulatory changes, administrative rulings, interpretations, and discretion which may further affect payments made under those programs. In addition the federal and state governments may, in the future, reduce the funds available under those programs or require more stringent utilization and quality reviews of our treatment centers or require other changes in our operations. There may also be a continued increase in managed care programs and future restructuring of the financing and delivery of healthcare in the United States. These events could have an adverse effect on our future financial results.

While inflation was not a material factor in revenue or operating expenses during the periods presented, the healthcare industry is labor-intensive. Wages and other expenses increase during periods of inflation and labor shortages, such as the nationwide shortage of dosimetrists and radiation therapists. In addition, suppliers pass along rising costs to us in the form of higher prices. We have implemented cost control measures to curb increases in operating costs and expenses. However, we cannot predict our ability to cover, or offset, future cost increases.

The following table sets forth our contractual obligations as of December 31, 2015.

(a): Maturities of the Company's borrowings and interest payments pursuant to such borrowings are based on contractual terms and scheduled maturities. The maturities of the Company's borrowings and interest payments in the table above are as of December 31, 2015 and do not assume any acceleration of the Company's long-term debt.
(1): As of December 31, 2015, there was $60.0 million in aggregate principal amount outstanding under our senior secured revolving credit facility (excluding issued but undrawn letters of credit). Interest expense and fees on our senior secured revolving credit facility is based on an assumed interest rate of the one-month LIBOR rate as of December 31, 2015 plus 550 basis points plus unused commitment fees on our $125.0 million senior secured revolving credit facility.
(2): As of December 31, 2015, there was $607.0 million in aggregate principal amount outstanding under our senior term credit facility. Interest expense is based on an interest rate of 6.5%.
(3): Senior subordinated notes of $360.0 million, due May 1, 2023. Interest expense is based on an interest rate of 11.0%.
(4): Senior secured notes of $0.4 million, due January 15, 2017. Interest expense is based on an interest rate of 11³/4%.
(5): Other notes and capital leases includes leases relating to medical equipment.
(6): Operating lease obligations includes land and buildings, and equipment.
(7): Finance obligations includes real estate under the failed sale-leaseback accounting. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Finance Obligation."

As of December 31, 2015, our off-balance sheet obligation consisted of $3.5 million in letters of credit. We do not currently have any off-balance sheet arrangements with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

We are exposed to various market risks as a part of our operations, and we anticipate that this exposure will increase as a result of our planned growth. In an effort to mitigate losses associated with these risks, we may at times enter into derivative financial instruments. These derivative financial instruments may take the form of forward sales contracts, option contracts, and interest rate swaps. We have not and do not intend to engage in the practice of trading derivative securities for profit. Because our borrowings under our senior secured credit facilities bear interest at variable rates, we are sensitive to changes in prevailing interest rates.

Outstanding balances under our senior secured credit facility bear interest based on either LIBOR plus an initial spread, or an alternate base rate plus an initial spread, at our option, which require a minimum floor of 100 basis points on LIBOR. Accordingly, an adverse change in interest rates would cause an increase in the amount of interest paid if LIBOR rates were above 1.0%. As of December 31, 2015, we have interest rate exposure on $607.0 million of our senior secured credit facility. A 100 basis point change in interest rates on our senior secured credit facility would result in an increase of approximately $3.7 million in the amount of annualized interest paid and annualized interest expense recognized in our condensed consolidated financial statements.

Information with respect to this Item is contained in our consolidated financial statements beginning with the Index on Page F-1 of this report, which is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On August 25, 2015, the Company notified Deloitte & Touche LLP ("Deloitte") that Deloitte was dismissed as the Company's independent registered public accounting firm. Deloitte's dismissal became effective on August 25, 2015. The decision to change accounting firms was approved by the Audit Committee and by the Board of Directors of the Company.

During fiscal years ended December 31, 2014 and 2013 and during the period from January 1, 2015 through August 25, 2015, the Company did not have any disagreement with Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to Deloitte's satisfaction, would have caused Deloitte to make reference to the subject matter of disagreement in their reports on the Company's consolidated financial statements.

On August 25, 2015, the Company approved the engagement of Ernst & Young LLP ("EY") as the Company's new independent registered public accounting firm. The engagement of EY had previously been approved by the Audit Committee on August 24, 2015 and by the Board of Directors on August 25, 2015.

This Item 9A includes information concerning the controls and controls evaluation referred to in the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 of the Exchange Act included in this Annual Report as Exhibits 31.1 and 31.2.

As previously announced on March 24, 2016 our Board of Directors determined that it would be necessary for us to restate our audited consolidated financial statements as of and for the years ended December 31, 2012, 2013 and 2014 and the unaudited condensed consolidated financial statements as of and for each of the interim periods within the years ended December 31, 2012, 2013 and 2014 and for the interim periods ended March 31, June 30 and September 30, 2015. The Board of Directors made this determination following consultation with and upon the recommendation of the Audit Committee of the Board of Directors, management and the Company's current independent registered public accounting firm, Ernst & Young LLP, as they relate to the unaudited condensed consolidated financial statements as of and for the periods ended March 31, June 30 and September 30, 2015 and with the Company's predecessor independent registered public accounting firm, Deloitte, as they relate to the audited consolidated financial statements or unaudited condensed consolidated financial statements for all other periods identified above. Refer to Notes 2 and 24 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Notwithstanding the existence of the material weaknesses described below, we believe that the consolidated financial statements in this Annual Report fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods, presented, in conformity with GAAP.

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

In connection with the preparation of this report, the Company's management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2015. Based on the restatement of previously issued financial statements noted above, the identification of material weaknesses in internal control over financial reporting described below, which we view as an integral part of our disclosure controls, the inability to file the Annual Report on Form 10-K within the statutory time period, and the evaluation that we have performed, we have concluded that, as of December 31, 2015, the Company's disclosure controls and procedures were ineffective.

Management, under the supervision of our Chief Executive Officer and Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d(f) under the Exchange Act). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP, and includes those policies and procedures that: (i) pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Management evaluated the effectiveness of the Company's internal control over financial reporting as of December 31, 2015 based upon the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). This framework highlights that the control environment sets the tone of the organization, influences the control consciousness of its people, and is the foundation for all other components of internal control over financial reporting.

Based upon evaluation, management identified material weaknesses in our internal control over financial reporting. More specifically, the material weaknesses occurred at the control-activity level, as we did not:

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. The Company's internal controls were not subject to attestation by our independent registered public accounting firm pursuant to an exemption for issuers that are not "large accelerated filers" nor "accelerated filers" as set forth in Section 989G(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Remediation of Material Weakness in Internal Control Over Financial Reporting

Management is committed to the planning and implementation of remediation efforts to address the material weaknesses as well as other identified areas of risk. These remediation efforts, summarized below, which are either implemented or in process, are intended to both address the identified material weaknesses and to enhance our overall financial control environment.

Management believes that progress has been made against remaining remediation efforts and successful completion is an important priority. Remaining remediation activities include:

Management believes the measures described above, when fully implemented and operational, will remediate the control deficiencies we have identified and strengthen our internal control over financial

reporting. We are committed to improving our internal control processes and intend to continue to review and improve our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may decide to implement other initiatives to address control deficiencies or determine to modify, or in appropriate circumstances, not complete, certain of the remediation measures described above.

Other than as described above, there have been no changes in our internal control over financial reporting that occurred during the fourth quarter of 2015 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company's management team, including the CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. As noted herein, management has identified material weaknesses in our internal control over financial reporting.

Except as noted in the preceding paragraphs, there has been no change in our internal control over financial reporting that occurred during the period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

21^st Century Oncology Holdings, Inc.'s Executive Officers, Directors and Key Employees

Name		Position

Daniel E. Dosoretz, M.D.	63	Chief Executive Officer and Director
LeAnne M. Stewart	51	Chief Financial Officer
Constantine A. Mantz, M.D.	47	Chief Medical Officer
Alejandro Dosoretz	57	President and Chief Executive Officer of Medical Developers Cooperatief U.A. B.V. and Vidt Centro Medico
Gary Delanois	63	Senior Vice President, United States Operations
Joseph Biscardi	47	Senior Vice President, Assistant Treasurer, Controller and Chief Accounting Officer
Robert L. Rosner	56	Chairman of the Board of Directors
James L. Elrod, Jr.	61	Director
Erin L. Russell	42	Director
Christian Hensley	42	Director
Howard M. Sheridan, M.D.	71	Director
Robert W. Miller	74	Director
William R. Spalding	57	Director

Daniel E. Dosoretz, M.D., F.A.C.R., F.A.C.R.O. is one of our founders and has served as a director since 1988 and as our Chief Executive Officer since April 1997. Dr. Dosoretz is also employed as a physician by our wholly owned subsidiary, 21st Century Oncology, LLC. Prior to founding the Company, Dr. Dosoretz served as attending physician at the Massachusetts General Hospital. He also was an Instructor and Assistant Professor of Radiation Medicine at Harvard Medical School and Research Fellow of the American Cancer Society. Upon moving to Fort Myers, Florida, he was appointed to the Clinical Faculty as a Voluntary Associate Professor at the University of Miami School of Medicine. He also has been a visiting Professor at Duke University Medical School and is a Distinguished Alumni Visiting Professor in Radiation Oncology at Massachusetts General Hospital, Harvard Medical School. Dr. Dosoretz is board certified in Therapeutic Radiology by the American Board of Radiology. He is a Fellow of the American College of Radiation Oncology and of the American College of Radiology and is a member of the International Stereotactic Radiosurgery Society, the American Society for Therapeutic Radiology and Oncology and the American Society of Clinical Oncology. Dr. Dosoretz graduated from the University of Buenos Aires School of Medicine with the Gold medal for being top of his class, and served his residency in Radiation Oncology at the Department of Radiation Medicine at the Massachusetts General Hospital, Harvard Medical School, where he was selected Chief Resident of the department. Dr. Dosoretz's role as founder and Chief Executive Officer of the Company, history with the Company and significant operating experience in the healthcare industry and extensive board experience led to the conclusion that Dr. Dosoretz should serve as a director of the Company.

LeAnne M. Stewart joined the Company as the Chief Financial Officer in September, 2015. She previously served as Chief Financial Officer of CRC Health Group, Inc. ("CRC"), a private equity sponsored behavioral health organization, from July 2011 to February 2015. In February 2015, CRC was sold to a strategic buyer. Previously, Ms. Stewart was Senior Vice President and Chief Financial Officer of Granite Construction Incorporated from 2008 to 2010. From 1999 through 2007, Ms. Stewart held various roles at Nash Finch Company, including Senior Vice President and Chief Financial Officer from 2004 to 2007 and Vice President and Corporate Controller from 2000 to 2004. She was a Trustee for

the College of St. Benedict from 2005 until 2014 and continues to serve as an ad hoc committee member. Ms. Stewart began her career at Ernst & Young in 1987, the same year that she became a Certified Public Accountant. Ms. Stewart became a Certified Management Accountant in 1992. She received a B.A. in Accounting from the College of St. Benedict in 1987 and an M.B.A. in Business Administration from the Wharton School at the University of Pennsylvania in 1997.

Constantine A. Mantz, M.D. joined us in 2000 and has served in his current capacity as Chief Medical Officer since February 2011 and formerly as Senior Vice President of Clinical Operations from March 2009 to February 2011. Dr. Mantz is also employed as a physician by our wholly owned subsidiary, 21st Century Oncology, Inc. Dr. Mantz received a Bachelor of Science Degree in Biology from Loyola University of Chicago. He earned his medical degree from the University of Chicago's Pritzker School of Medicine and did a surgical internship at the Hennepin County Medical Center in Minneapolis, Minnesota. Dr. Mantz completed his radiation oncology residency at the University of Chicago Hospitals, is Board Certified in Radiation Oncology by the American Board of Radiology and is a member of ACR, the American Medical Association, the American Society for Radiation Oncology and the Association of Freestanding Radiation Oncology Centers. During the course of his career, Dr. Mantz has been involved in numerous radiation therapy research projects, published professional journal articles and given lectures and presented abstracts and poster sessions at national meetings concerning cancer treatment. Dr. Mantz has special clinical interests in the study and treatment of prostate cancer and breast cancer. Dr. Mantz also has published and lectured on healthcare payment and delivery reform in oncology.

Alejandro Dosoretz joined us in March 2011 in conjunction with our purchase of MDLLC where he serves in his current capacity as President and Chief Executive Officer of Medical Developers Cooperatief U.A. B.V. and Vidt Centro Medico. Prior to 2011, Mr. Dosoretz served as President and Chief Executive Officer of Vidt Centro Medico, where he held that position since 2003. He previously served as President of Provincia ART from 2001 to 2003. From 1983 to 2001, Mr. Dosoretz acted as an advisor to various healthcare companies in Argentina. Mr. Dosoretz has served on Argentina's Congress' Health Advisory Committee, as a general advisor to Argentina's National Institute for Retirees and Pensioners, and has represented Argentina's Ministry of Foreign Affairs. He holds a Public Accounting degree from the University of Buenos Aires, School of Economics.

Gary Delanois Gary Delanois has served as our Senior Vice President, United States Operations since August 2014 after leading the growth of our integrated cancer care operations network of employed and affiliated physicians for five years. He began his career in business as a Certified Public Accountant with Ernst & Young before leaving to become Chief Operating Officer for a diversified and multi-divisional private company. Mr. Delanois is a member of the American Institute of CPAs and the Florida Institute of Public Accountants.

Joseph Biscardi joined us in June 1997 and serves as our Senior Vice President, Assistant Treasurer, Controller and Chief Accounting Officer. Prior to joining the Company, Mr. Biscardi worked for PricewaterhouseCoopers, LLP from 1993 to June 1997. Mr. Biscardi holds a B.B.A. in accounting from Hofstra University. He is a Certified Public Accountant in New York and a member of the American Institute of Certified Public Accountants, a member of the Healthcare Financial Management Association and a member of the Financial Executives International.

Robert L. Rosner has been a member of our Board of Directors since February 2012 and the Chairman of our Board of Directors since October 2014. Mr. Rosner was a founding partner of Vestar in 1988 and currently serves as Co-President of the firm. Prior to founding Vestar, Mr. Rosner was with the Management Buyout Group at The First Boston Corporation. Mr. Rosner is currently a director of Institutional Shareholder Services, Inc., Triton Container International Limited, Tervita Corporation, and was previously a director of Seves S.p.a. until October 2014, Group OGF until October 2013, AZ Electronic Materials S.A. until November 2010, and Sunrise Medical, Inc. until December 2012. He

serves as a member of the Graduate Executive Board of The Wharton School and is a Trustee of The Lawrenceville School. Mr. Rosner received a B.A. in Economics from Trinity College and an MBA with Distinction from The Wharton School at the University of Pennsylvania. Mr. Rosner's collective board experience, financial experience, history in governance matters and diverse personal background led to the conclusion that Mr. Rosner should serve as a director of the Company.

James L. Elrod, Jr. has been a member of our Board of Directors since February 2008 and served as Chairman of our Board of Directors from February 2008 to October 2014. Mr. Elrod is a Managing Director of Vestar. Prior to joining Vestar in 1998, Mr. Elrod was Executive Vice President, Finance and Operations for Physicians Health Service, a public managed care company. Prior to that, he was a Managing Director and Partner of Dillon, Read & Co. Inc. Mr. Elrod is currently a director of National Mentor Holdings, Inc. and was a director of Joerns Healthcare, LLC until August 2010 and Essent Healthcare, Inc. until December 2011. Mr. Elrod received his A.B. from Colgate University and his MBA from Harvard Business School. Mr. Elrod's experience in the healthcare industry and collective board experience, financial experience, and diverse personal background led to the conclusion that Mr. Elrod should serve as a director of the Company.

Erin L. Russell has been a member of our Board of Directors since February 2008. Ms. Russell is a Principal of Vestar, and is primarily focused on healthcare investments. Ms. Russell joined Vestar in 2000. Previously, she was a member of the mergers and acquisitions group at PaineWebber, Inc. Ms. Russell is a director of DeVilbiss Healthcare, LLC and was previously a director of DynaVox Inc. until January 2015. In addition, she serves on the National Advisory Board of the Jefferson Scholars Foundation at the University of Virginia. Ms. Russell received a B.S. from the McIntire School of Commerce at the University of Virginia and her MBA from Harvard Business School. Ms. Russell's experience in the healthcare industry, board experience and diverse personal background led to the conclusion that Ms. Russell should serve as a director of the Company.

Christian Hensley has been a member of our Board of Directors since September 2014. Prior to joining CPPIB's Relationship Investments group in 2012, Mr. Hensley spent 11 years in the private equity and growth capital industry at Charterhouse Group and Planier Capital. As a principal investor, Mr. Hensley previously served on five company boards in the Healthcare Services, Business Services, Communications and Education sectors. Mr. Hensley began his career in the Investment Banking division of Salomon Brothers in New York City. He holds an MBA from Harvard Business School and a BA from the University of Pennsylvania. Mr. Hensley's experience in the healthcare industry, board experience and diverse personal background led to the conclusion that Mr. Hensley should serve as a director of the Company.

Howard M. Sheridan, M.D. is one of our founders and has served as a director since 1988. Dr. Sheridan planned and developed our first radiation treatment center. Prior to joining us, Dr. Sheridan served as President of the medical staff at Southwest Florida Regional Medical Center as well as chairman of the Department of Radiology. Dr. Sheridan currently serves as Chairman of Edison Bancshares, Inc. He previously served on the Advisory Board of Southeast Bank, N.A., and also served as a founding Director and member of the Executive Compensation and Loan Committee of Heritage National Bank from 1989 until September 1996, when Heritage was acquired by SouthTrust Corporation. Dr. Sheridan has practiced interventional radiology and diagnostic radiology in Fort Myers, Florida from 1975 until accepting the chairmanship in April 2004. Dr. Sheridan is a member of the American Medical Association, the Florida Medical Association and the American College of Radiology. Dr. Sheridan is the Vice President of 21st Century C.A.R.E., a non-profit dedicated to cancer patient assistance, research and education. Dr. Sheridan serves as Chairman of the Tulane Medical School's Board of Governors. He graduated from Tulane Medical School and completed his residency at the University of Colorado Medical Center. Dr. Sheridan is board certified by the American Board of Radiology and the American Board of Nuclear Medicine. Dr. Sheridan's board experience, years of experience in the healthcare industry, particularly in radiation oncology and with

the Company, as well as his familiarity with all aspects of its business since its founding led to the conclusion that Dr. Sheridan should serve as a director of the Company.

Robert W. Miller has been a member of our Board since December, 2015. Prior to that time, Mr. Miller was a partner in the law firm of King & Spalding from 1985 until his retirement in 1997. In addition, Mr. Miller has served on the board of directors of SunCrest Healthcare, Inc., an operator of home health agencies, since 2013. Mr. Miller previously served as a director of QuadraMed Corporation, from 2003 to 2010, where he was a member of the Audit Committee and the Chairman of the Compensation Committee, and as a director of Sonic Innovations, Inc., from 2006 to 2010, where he was a member of the Audit Committee and chairman of the Nominating and Governance Committee. Mr. Miller served on the Nonprofit Board of Directors of Grady Memorial Hospital in Atlanta, Georgia, where he served as Chairperson of its Audit Committee, from 2008 to 2014. In addition, he has served as an Adjunct Professor of Law at Emory University School of Law and Editor-in-Chief of the Journal of Health and Life Sciences Law. Mr. Miller has a B.A. from the University of Georgia and an LL.B. from Yale Law School. Mr. Miller's experience in the healthcare industry, board experience and diverse personal background led to the conclusion that Mr. Miller should serve as a director of the Company.

William R. Spalding has been a member of our Board since May 2016. Prior to that time, Mr. Spalding, served as the Chief Executive Officer of PharMEDium Healthcare Holdings, Inc., from January 2014 to November 2015, when it was acquired by AmerisourceBergen Corporation, a publicly-listed company. Mr. Spalding also served as PharMEDium's Executive Vice President—Strategy, Finance and Legal, from April 2013 to January 2014, and as an independent board member of PharMEDium from August 2010 to February 2013. Prior to that, Mr. Spalding was a Senior Partner in the law firm of King and Spalding, LLP, where he led the Private Equity & Investment Funds Practice and was a member of the firm's management committee. Mr. Spalding also co-founded The CrawfordSpalding Group, a professional advisory and management services firm, and previously served as Executive Vice President—Strategy and Managed Care of CVS Caremark Corporation and Executive Vice President—Strategic Initiatives of Caremark Rx, Inc. Mr. Spalding is the Non-Executive Chairman of the Board of MedVantx Corporation and has served as a board member of SecureWorks Corp. and the Carter Presidential Center Board of Counselors. Mr. Spalding holds an A.B., with honors, from Dartmouth College and a J.D., summa cum laude, from Washington & Lee University School of Law. Mr. Spalding's experience in the healthcare industry, board experience and diverse personal background led to the conclusion that Mr. Spalding should serve as a director of the Company.

Pursuant to our Amended Securityholders Agreement, our Board of Directors is to be comprised of (i) two managers nominated by the Majority Preferred Holders, (ii) three managers nominated by funds affiliated with Vestar, (iii) Dr. Daniel E. Dosoretz and (iv) one manager nominated by Dr. Dosoretz after consultation with Vestar and the Majority Preferred Holders, subject to certain ongoing security ownership provisions. In addition, the size of our Board of Directors was increased to include one independent director to be nominated by the Majority Preferred Holders at their election. In the event of an event of default under the Certificate of Designations, the parties to the Amended Securityholders Agreement have agreed to vote in favor of a changed board composition at the election of the Majority Preferred Holders. Our board of directors currently consists of Mr. Elrod, Jr., Dr. Dosoretz, Mr. Rosner, Ms. Russell, Mr. Hensley, Dr. Sheridan, Mr. Miller and Mr. Spalding. Each director serves for annual terms and until his or her successor is elected and qualified. See "Item 13. Certain Relationships and Related Transactions, and Director Independence."

The Amended Securityholders Agreement provides for the establishment of an Executive Committee of the Board of Directors (the "Executive Committee"), which will carry out all activities of our Board of Directors to the extent permitted by applicable Delaware law. Our Board of Directors has the authority to appoint committees to perform certain management and administration functions. Our Board of Directors has also provided for an Audit Committee, a Compliance and Quality Committee, a Capital Allocation Committee and a Compensation Committee. Each committee is comprised of at least three members, one of which is designated by the Majority Preferred Holders, one of which is designated by a fund affiliated with Vestar and one of which is designated by Dr. Dosoretz, subject to certain ongoing security ownership provisions.

Messrs. Rosner, Hensley and Dr. Dosoretz serve on the Executive Committee, with Mr. Rosner serving as the Chair. The Executive Committee has and may exercise all the powers and authority of our Board of Directors in the management of the business and affairs of the Company, including to take and authorize actions that would otherwise be in the jurisdiction of our Board of Directors, except to the extent (i) such delegation of authority would not be permitted under applicable Delaware law and (ii) the power and authority is reserved to another existing committee under its existing charter. The Executive Committee did not meet during 2015 as all actions taken in the jurisdiction of the Board of Directors were taken by the approval of the full Board of Directors. The Executive Committee operates under a written charter, which was effective as of September 26, 2014.

Messrs. Elrod, Hensley, Spalding and Ms. Russell serve on the Audit Committee, with Mr. Elrod serving as the Chair. The Audit Committee is responsible for reviewing and monitoring our accounting controls, related party transactions and internal audit functions and recommending to the Board of Directors the engagement of our outside auditors. The Audit Committee met sixteen times during 2015. The Audit Committee operates under a written charter, which was amended and restated effective as of February 10, 2015. Our Board of Directors has determined that each of its members is financially literate. However, as we are privately held and controlled by affiliates of Vestar, our Board of Directors has determined that it is not necessary to designate one or more of its Audit Committee members as an "audit committee financial expert" at this time.

Messrs. Miller, Elrod and Hensley serve on the Compliance and Quality Committee, with Mr. Miller serving as the Chair. The Compliance and Quality Committee is responsible for overseeing, monitoring and evaluating the Company's compliance and quality assurance systems and initiatives. The committee also reviews and monitors the systems in place to maintain and identify deviations from the Company's compliance standards, including matters related to compliance with federal health care program requirements and other compliance obligations. The Compliance and Quality Committee did not meet during 2015 as the Committee was formed in December 2015. The Compliance and Quality Committee operates under a written charter, which was effective as of December 14, 2015.

Ms. Russell, Messrs. Hensley, Spalding and Dr. Dosoretz serve on the Capital Allocation Committee, with Ms. Russell serving as the Chair. The Capital Allocation Committee reviews and either approves, on behalf of the Board of Directors, or recommends to the Company's Board of Directors for approval, all material expenditures related to equipment, acquisitions and de novo

development, among others. The Capital Allocation Committee met sixteen times during 2015. The Capital Allocation Committee operates under a written charter, which was amended and restated effective as of September 26, 2014.

Messrs. Rosner and Hensley, and Dr. Sheridan serve on the Compensation Committee, with Mr. Rosner serving as the Chair. The Compensation Committee reviews and either approves, on behalf of our Board of Directors, or recommends to our Board of Directors for approval, the annual salaries and other compensation of our executive officers and individual unit incentive awards. The Compensation Committee also provides assistance and recommendations with respect to our compensation policies and practices and assists with the administration of our compensation plans. The Compensation Committee met five times during 2015. The Compensation Committee operates under a written charter, which was amended and restated effective as of September 26, 2014.

Our Board of Directors expects its members, as well as its officers and employees, to act ethically at all times and to acknowledge in writing their adherence to the policies comprising its code of conduct and as applicable, in Our Code of Ethics for Senior Financial Officers and Chief Executive Officer (our "Code of Ethics"). Our Code of Ethics is posted on our website located at www.21co.com under the heading "Code of Conduct for Principal Executive Officers and Senior Financial Officers." We intend to disclose any amendments to our Code of Ethics and any waiver from a provision of such code, as required by the SEC, on our website within five business days following such amendment or waiver. Copies of our Code of Ethics are available upon request, without charge, by writing or telephoning us at 21^st Century Oncology Holdings, Inc., 2270 Colonial Boulevard, Fort Myers, Florida 33907, Attn: Corporate Secretary, (239) 931-7254.

The Company does not have a class of securities registered under the Exchange Act and therefore its directors, executive officers, and persons holding more than ten percent of the Company's equity securities are not required to comply with Section 16 of the Exchange Act.

References in this Item 11 to "we," "us," "our" and "the Company" are references to 21^st Century Oncology Holdings, Inc. and its subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates, unless the context requires otherwise or unless indicated otherwise.

The following discussion and analysis of compensation arrangements of our named executive officers should be read together with the compensation tables and related disclosures with respect to our current plans, considerations, expectations and determinations regarding compensation.

The primary objectives of our executive compensation policies are to attract and retain talented executives to effectively manage and lead our Company and create value for our equityholders. Through our executive compensation policies, we seek to align the level of our executive compensation with the achievement of our corporate objectives, thereby aligning the interests of our management with those of our equityholders.

The compensation of our named executive officers generally consists of base salary, annual cash incentive payments, long-term equity incentives and other benefits and perquisites. In addition, our named executive officers are eligible to receive severance or other benefits upon termination of their employment with us. In setting an individual executive officer's initial compensation package and the relative allocation among different types of compensation, we consider the nature of the position being filled, the scope of associated responsibilities, the individual's qualifications, as well as Vestar's and CPPIB's experience with other companies in their investment portfolios and general market knowledge regarding executive compensation.

The discussion below explains our compensation decisions with respect to fiscal year 2015, our last fiscal year. Throughout this Annual Report, the following officers are referred to as our named executive officers: (i) Daniel E. Dosoretz, M.D., our Chief Executive Officer since April 1997, (ii) LeAnne M. Stewart, our Chief Financial Officer since September 2015, and (iii) Constantine A. Mantz, M.D., our Chief Medical Officer since February 2011.

The compensation policies for our named executive officers have been designed based upon our view that the ownership by management of equity interests in our business is the most effective mechanism for providing incentives for management to maximize gains for equityholders, that annual cash incentive compensation should be linked to metrics that create value for our equityholders and that other elements of executive compensation should be set at levels that are necessary, within reasonable parameters, to successfully attract, retain and motivate optimally talented and experienced executives.

Our Compensation Committee evaluates and determines the levels and forms of individual compensation for our named executive officers. Under the term of its charter, our Compensation Committee reviews and either approves, on behalf of the Company's Board of Directors, or recommends to the Company's Board of Directors for approval, the annual salaries and other compensation for our executive officers and individual unit incentive awards. The Compensation Committee develops and determines all components of executive officer compensation, as well as provides assistance and recommendations to the Company's Board of Directors with respect to our incentive-compensation plans, equity-based plans, compensation policies and practices and assists with the administration of our compensation and benefit plans.

Our Compensation Committee determines or recommends to the Board of Directors for determination the compensation of each of our named executive officers and solicits input from our Chief Executive Officer in determining the compensation (particularly base salary and annual cash incentive payments) of our named executive officers. The Compensation Committee does not retain compensation consultants to review our policies and procedures with respect to executive officer compensation.

In the review and establishment of our compensation program, we consider the anticipated accounting and tax implications to us and our named executive officers. While we consider the applicable accounting and tax treatment of alternative forms of equity compensation, these factors alone are not dispositive, and we also consider the cash and non-cash impact of the programs and whether a program is consistent with our overall compensation philosophy and objectives.

Messrs. Rosner, Sheridan and Lawrence serve on the Compensation Committee. No executive officer of the Company served as a director of any corporation for which any of these individuals served as an executive officer, and there were no other compensation committee interlocks with the companies with which these individuals or the Company's other directors are affiliated.

We regularly assess our compensation policies and practices in response to current public and regulatory concern about the link between incentive compensation and excessive risk taking by corporations. We have concluded that our compensation program does not motivate imprudent risk taking and any risks involved in compensation are not reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, we believe that the following risk oversight and compensation design features guard against excessive risk-taking:

We generally deliver executive compensation through a combination of annual base salary, annual cash incentive payments, long-term equity incentives and other benefits and perquisites. We believe that this mix of elements is useful in achieving our primary compensation objectives. The payment of executive compensation is determined by the Compensation Committee, and we do not target any particular form of compensation to encompass a majority of annual compensation provided to our executive officers.

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our named executive officers for services rendered to us during the prior two fiscal years.

We have entered into a Second Amended and Restated Executive Employment Agreement, dated as of May 6, 2014 and amended on September 25, 2014 (with such amendment effective July 24, 2014), with Daniel E. Dosoretz, M.D., pursuant to which Dr. Dosoretz serves as our Chief Executive Officer. The employment term is a five-year term with automatic two-year extensions thereafter, unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement.

Dr. Dosoretz is currently entitled to receive an annual base salary of $1,200,000 and entitled to such increases in his annual base salary as may be determined by the Company's Board of Directors or Compensation Committee from time to time. In the event of a Change of Control of the Company (as defined in his employment agreement), a material deleveraging of the Company or a material refinancing or recapitalization of the Company, Dr. Dosoretz's annual base salary will be increased to $1,200,000. Dr. Dosoretz is also eligible to earn an annual performance-based incentive bonus of up to 100% of his annual base salary, in any event not less than $300,000, based upon the attainment of one or more pre-established performance goals established by the Board of Directors or the Compensation Committee.

Dr. Dosoretz is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. Dr. Dosoretz is entitled to use the Company's corporate jet in the conduct of business on behalf of the Company and up to 300 hours of

usage per year for personal use. We have also agreed to indemnify Dr. Dosoretz in connection with his capacity as our director and officer.

If Dr. Dosoretz resigns or otherwise voluntarily terminates his employment and the termination is not for "good reason" (as defined in his employment agreement) during the term of the agreement, he will be entitled to receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date. Dr. Dosoretz shall also receive any nonforfeitable benefits already earned and payable to him under the terms of any deferred compensation, incentive or other benefit plan maintained by the Company, payable in accordance with the terms of the applicable plan (all amounts in this section are referred to as "Accrued Compensation").

If Dr. Dosoretz's employment is terminated by us without "cause" (as defined in his employment agreement) or by Dr. Dosoretz for "good reason" (as defined in his employment agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of Accrued Compensation, the Company is obligated to make monthly payments to Dr. Dosoretz for a period of 24 months after his termination date. Each monthly payment shall be equal to ¹/₁₂^th of the sum of (i) Dr. Dosoretz's annual base salary, as in effect at the termination date, plus (ii) the amount equal to the sum of his bonuses for the three prior years divided by three. Dr. Dosoretz shall also be permitted to continue participation at the Company's expense in all benefit and insurance plans, coverage and programs for one year in which he was participating prior to the termination date.

If Dr. Dosoretz's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. If Dr. Dosoretz dies during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the Board of Director's good faith estimated annual cash performance incentive bonus for the fiscal year in which the death occurs (on a pro rata basis for the number of whole or partial months in the fiscal year in which the death occurs through the date of death) based on the performance of the Company at the time of his death. In addition, the death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan maintained by the Company shall be paid to the beneficiary designated by Dr. Dosoretz in accordance with the terms of the applicable plan.

Should Dr. Dosoretz be terminated as Chief Executive Officer for any reason, notwithstanding any other provision in the employment agreement, Dr. Dosoretz may elect to remain employed by the Company as a senior physician providing radiation oncology services at the Company's and its subsidiaries' radiation therapy centers and that, under such circumstances, Dr. Dosoretz and the Company, or one of its affiliates, shall enter into a new employment agreement pursuant to which Dr. Dosoretz will receive an annual base salary of $1,000,000 and be eligible to participate in such other performance, bonus and benefit plans afforded other senior physicians of the Company and receive comparable fringe benefits to such other senior physicians.

Dr. Dosoretz is also subject to a covenant not to disclose our confidential information during and at any time after his employment term. At all times during his employment term and ending three years after his termination date, Dr. Dosoretz covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Dr. Dosoretz breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary

injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

We entered into an executive employment agreement, dated effective as of September 14, 2015, with LeAnne M. Stewart, pursuant to which Ms. Stewart serves as Chief Financial Officer. The employment term is a three-year term beginning September 14, 2015, with up to two automatic one-year extensions thereafter, unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement.

Ms. Stewart is entitled to receive an annual base salary of at least $475,000 and has the opportunity to earn an annual cash performance-based incentive bonus equal to 85% of her annual base salary, based on objectives to be defined by the Compensation Committee, beginning in 2016. Ms. Stewart was guaranteed a bonus of 40% of her base salary for 2015. The bonus amount will be earned upon completion of the performance period and payable on or before March 15 of the year following the performance period. Ms. Stewart is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. We have also agreed to indemnify Ms. Stewart in connection with her capacity as an officer.

Ms. Stewart may terminate her employment at any time for any reason. If Ms. Stewart resigns or otherwise voluntarily terminates her employment and the termination is not for "good reason" during the term of her employment (as defined in her employment agreement), she will be entitled to receive (i) her base salary and unreimbursed expenses accrued and unpaid through the date of termination, (ii) her earned and unpaid annual cash performance incentive bonus, if any, for the fiscal year prior to the termination date, (iii) any nonforfeitable benefits already earned and payable to her under the terms of any deferred compensation, pension, incentive or other benefit and perquisite plan maintained by the Company, payable in accordance with the terms of the applicable plan (collectively, the "Accrued Compensation"). If Ms. Stewart's employment is terminated by the Company for "cause" (as defined in her employment agreement), the amount she shall be entitled to receive will be limited to the Accrued Compensation, exclusive of the payment in clause (ii) above.

If Ms. Stewart's employment is terminated by us without "cause" or by Ms. Stewart for "good reason" (as each such term is defined in her employment agreement), or we undergo a change in control (as defined in her employment agreement), subject to her execution of a release of claims against us and her continued compliance with the restrictive covenants, and in addition to the payment of the Accrued Compensation, we are obligated to make monthly payments to Ms. Stewart for a period of 12 months after her termination date. Each monthly payment shall be equal to one-twelfth of the sum of (i) Ms. Stewart's annual base salary, as in effect at the termination date, plus (ii) the target annual performance incentive bonus, if terminated before the end of year two. After year two, the annual performance incentive bonus will be calculated based on an average of the years prior to termination date. In addition, if Ms. Stewart should elect continued Consolidated Omnibus Budget Reconciliation Act ("COBRA") coverage, we shall pay, during the period Ms. Stewart actually continues such coverage and up to a maximum of 12 months, the same percentage of monthly premium costs for COBRA continuation coverage as it pays of the monthly premium costs for medical coverage for active senior executives generally.

If Ms. Stewart's employment terminates due to a "disability" (as defined in her employment agreement), she will be entitled to receive the Accrued Compensation, and subject to her execution of a release of claims against us and her continued compliance with the restrictive covenants, we are obligated to make monthly payments to Ms. Stewart for 12 months following her termination date, with each such payment equal to 1/12 of Ms. Stewart's annual base salary, as in effect at the termination

date. If Ms. Stewart's employment terminates due to her death, her estate will be entitled to receive the Accrued Compensation, and we are obligated to make monthly payments to Ms. Stewart's estate for 12 months following her date of death, with each such payment equal to 1/12 of Ms. Stewart's annual base salary, as in effect on the date of death.

Ms. Stewart is also subject to a covenant not to disclose our confidential information during and at any time after her employment term. During her employment term and ending 12 months after her termination date, Ms. Stewart covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Ms. Stewart breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

We have entered into a physician employment agreement with Constantine A. Mantz, dated effective as of July 1, 2003 and as amended, pursuant to which Dr. Mantz serves as our Chief Medical Officer and provides medical services as a radiation oncologist. The employment term commenced on July 1, 2003 and is a five-year term with automatic one-year extensions thereafter, unless either party provides the other 90 days' prior written notice of its intention not to renew the employment agreement. Dr. Mantz is currently entitled to receive an annual base salary of $1,620,000 and the Company shall be obligated to pay all medical malpractice insurance premiums during employment and any "tail" coverage premiums after termination or expiration of this agreement if Dr. Mantz's employment is terminated without cause, or due to death or disability. Further, during Dr. Mantz's employment, the Company will provide basic hospital and major medical insurance coverage to him to the extent obtainable with coverage amounts as the Company shall in its sole discretion determine and subject to the limitations and restrictions of the Company's group health plan.

In addition, Dr. Mantz is entitled to receive an annual production incentive bonus of up to $1,000,000 based on a pro rata share of 19.0% of the collections of professional fees (as defined) over and above physician salaries, benefits, coverage and other defined reductions with respect to the Company's radiation oncology centers and certain other ancillary services provided in the Lee County, Florida local market.

If an event of termination occurs for any reason, Dr. Mantz shall be entitled to (i) receive his Accrued Compensation determined as of the effective date of termination and not theretofore paid and (ii) receive or continue to receive benefits due or payable under any pension or profit sharing plan and any disability, medical and life insurance plans maintained by the Company.

Dr. Mantz is also subject to a covenant not to disclose our confidential information during and at any time after his employment term. At all times during his employment term and ending two years after his termination date, Dr. Mantz has agreed (i) not to practice radiation oncology at any center in Lee, Collier or Charlotte County, Florida or at those hospitals in Lee, Collier or Charlotte County, Florida where physicians employed by the Company or an affiliate of the Company are, at the time of such termination, practicing radiation oncology, and (ii) not to solicit or hire any of our employees.

The following table provides information regarding outstanding equity awards held by our named executive officers as of the end of fiscal year 2015.

On October 7, 2015, 21CI, our sole stockholder, entered into the Seventh Amended and Restated Limited Liability Company Agreement (the "Amended LLC Agreement"). The Amended LLC Agreement amends and restates the Sixth Amended and Restated Limited Liability Company Agreement of 21CI, dated as of July 2, 2015 (the "Prior LLC Agreement"), in its entirety to, among other things, authorize two new classes of incentive units of 21CI, Class D and Class E Units, and amend the waterfall distribution provisions. Each named executive officer that received such Class D and/or Class E Units forfeited any and all incentive equity units previously granted to him or her. Under the Amended LLC Agreement, 21CI now has ten classes of equity outstanding: SFRO Preferred Units, Preferred Units, Class A Units, Class D Units, Class E Units, Class G Units, Class M Units, Class MEP Units, Class N Units and Class O Units. The other material terms of the Prior LLC Agreement remain unchanged. The Amended LLC Agreement contains customary indemnification provisions relating to unitholders and managers and officers of 21CI.

21CI entered into incentive unit grant agreements ("Incentive Agreements") with each of Dr. Daniel E. Dosoretz, the Company's Chief Executive Officer (on November 30, 2015), Ms. LeAnne M. Stewart, the Company's Chief Financial Officer (on October 7, 2015), and Dr. Constantine A. Mantz, the Company's Chief Medical Officer (on October 7, 2015). Pursuant to the

Incentive Agreements, 21CI granted to Dr. Dosoretz 10 Class D Units and 164,473 Class E Units, to Ms. Stewart 123,355 Class E Units, and to Dr. Mantz 82,237 Class E Units (collectively, the "Incentive Units"). In addition, 21CI has entered into similar Incentive Agreements with other members of the Company's senior management.

The Incentive Units were fully vested upon grant. With regard to Dr. Dosoretz, if he is terminated for "cause," resigns for a reason other than "good reason" or "disability," or engages in a prohibited activity, all of his respective Incentive Units shall be forfeited immediately without consideration. With regard to Ms. Stewart and Dr. Mantz, if either executive officer is terminated for any or no reason, or engages in a prohibited activity, all of his or her respective Incentive Units shall be forfeited immediately without consideration.

Under the Amended LLC Agreement, to which each of Dr. Dosoretz, Ms. Stewart and Dr. Mantz is a party, upon a Company Sale (as defined in the Amended LLC Agreement), all holders of a particular class or series of securities would receive the same form and amount of assets per share, provided that to the extent cash is included in such assets, such cash shall first be distributed to the Preferred Unitholders, if they so elect by vote of holders of a majority of the Preferred Units. Upon a Public Offering (as defined in the Amended LLC Agreement), Dr. Dosoretz, Ms. Stewart and Dr. Mantz would be entitled to receive IPO Consideration (also as defined in the Amended LLC Agreement). One-third of such IPO Consideration would be awarded in the form of cash or Company common stock, as determined by the Board of Managers, in its sole discretion, and two-thirds of such IPO Consideration would be awarded in the form of a restricted stock award or a restricted stock unit award for Company common stock under an equity compensation plan then in effect. Any Incentive Units not allocated any Company common stock shall be forfeited and cancelled without further consideration, provided that, as holders of Class E Units, Dr. Dosoretz, Ms. Stewart and Dr. Mantz shall be issued options to acquire shares pursuant to an equity compensation plan then in effect, if they are not allocated any Company common stock. The Board of Managers will determine the number of shares, the exercise price and other terms and conditions thereto, in its sole discretion.

On October 7, 2015, the Company adopted the Class D and Class E Bonus Plans (each, a "Bonus Plan," and collectively, the "Bonus Plans") to provide certain employees and other service providers of 21CI and its affiliates (including the Company) with an opportunity to receive additional compensation based on the Equity Value (as defined in the Bonus Plans and described in general terms below) of 21CI in connection with a Company Sale or Public Offering (as defined in the Bonus Plans). Upon the first to occur between a Company Sale and a Public Offering, the following bonus pools will be established:

A participant in a Bonus Plan will participate in the applicable bonus pool based on his or her award percentage. With regard to the Class D Bonus Plan, Dr. Dosoretz is the only participant. With regard to the Class E Bonus Plan, Dr. Dosoretz, Ms. Stewart and Dr. Mantz have received award percentages under the Bonus Plan equal to 16.44730%, 12.33550% and 8.22370%, respectively.

Unless otherwise set forth in an award agreement, the right to receive payment under the Bonus Plans is subject to a participant's continued employment with 21CI or its affiliates through the date of payment.

For purposes of the Bonus Plans, the term "Equity Value" generally refers to: (i) if the applicable liquidity event is a Company Sale, the aggregate fair market value of the cash and non-cash proceeds received by 21CI and its equity holders in connection with the Company Sale or (ii) if the applicable liquidity event is a Public Offering, the aggregate fair market value of 100% of the common stock of the Company on the effective date of such Public Offering.

The right to receive payment under the Bonus Plans generally is subject to a participant's continued employment with the Company or its affiliates through the date of payment. However, in the case of Dr. Dosoretz, in the event of his termination of employment by the Company without "cause", by him for "good reason" or as a result of his "disability" (each, as defined in his employment agreement), in any case, on or following the occurrence of the applicable liquidity event, any unvested portion of his awards will become fully vested as of the date of such termination, and payment in respect thereof (if applicable) will be made to him within thirty (30) days following the date of such termination.

In addition to the right to receive payment of the bonus amounts under the Bonus Plans, each named executive officer will be entitled to a tax "gross up" payment payable in cash and intended to compensate each such executive for the loss of tax benefits resulting from the treatment of awards under the plan being subject to taxation as ordinary income as opposed to long-term capital gains income.

The following tables provide information concerning certain individuals who served as directors on the Company's Board of Directors as of the end of fiscal year 2015 and who are not named executive officers. We did not provide any remuneration to the members of the Company's Board of Directors

other than to the directors listed below. See "Item 11. Executive Compensation" and "Item 13. Certain Relationships and Related Transactions, and Director Independence."

We have entered into an Executive Employment Agreement, dated effective as of February 21, 2008, with Howard M. Sheridan, M.D., pursuant to which Dr. Sheridan provides corporate executive services and support in such areas as strategic planning, mergers and acquisitions, and physician, payer and hospital relationships. The employment term is a three-year term with automatic two-year extensions thereafter unless either party provides the other 120 days prior written notice of its intention not to renew the employment agreement.

Dr. Sheridan is currently entitled to receive an annual base salary of $300,000, which effective September 26, 2014 was reduced to $100,000 and is entitled to such increases in his annual base salary as may be determined by the Company's Board of Directors or Compensation Committee from time to time. With respect to the 2011 fiscal year and each full fiscal year during the employment term, Dr. Sheridan is eligible to receive a performance incentive bonus at the discretion of the Company's Board of Directors, or it's Compensation Committee.

Dr. Sheridan is also entitled to use the Company's corporate jet in connection with the conduct of business on behalf of the Company and he is entitled to 25 hours of usage per year for personal use. We have also agreed to indemnify Dr. Sheridan in connection with his capacity as a director.

If Dr. Sheridan resigns or otherwise voluntarily terminates his employment and the termination is not for good reason during the term of the agreement, he will be entitled to receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date. Dr. Sheridan shall also receive any Accrued Compensation.

If Dr. Sheridan's employment is terminated by us without "cause" (as defined in his employment agreement) or by Dr. Sheridan for "good reason" (as defined in his employment agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of Accrued Compensation, the Company is obligated to make monthly payments to Dr. Sheridan for a period of 12 months after his termination date. Each monthly payment shall be equal to ¹/₁₂^th of the sum of (i) Dr. Sheridan's annual base salary, as in effect at the termination date, plus (ii) his bonus for the year immediately prior to the year during which termination occurs.

If Dr. Sheridan's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. If Dr. Sheridan dies during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the board of director's good faith estimated annual cash incentive payment for the fiscal year in which the death occurs (on a pro rata basis for the number of whole or partial months in the fiscal year in which the death occurs through the date of death) based on the performance of the Company at the time of his death. Dr. Sheridan's employment agreement also contains customary confidentiality and non-solicitation terms.

We entered into an independent contractor agreement with Mr. Miller effective December 15, 2015 to serve as an independent board member for an annual compensation of $100,000 and to serve as the Chair of the Compliance and Quality Committee for an annual compensation of $25,000. Mr. Miller shall also be reimbursed for the reasonable expenses incurred in accordance with our policies on reimbursement of expenses. The initial term of the agreement is for a period of one year commencing on the effective date and continuing in full force and effect, unless earlier terminated pursuant to the terms of the agreement. Thereafter, the agreement shall automatically renew upon the same terms and conditions for additional one year terms, unless either party provides the other written notice of its intent not to renew. Either party may terminate this Agreement at any time without cause by giving the other party written notice of its intent to terminate.

Mr. Miller shall participate in our directors and officers liability insurance program at the same level offered to other members of the board of directors. We will provide representation for, indemnification and hold harmless for Mr. Miller against all actions, all losses, damages, costs and expenses including but not limited to attorney's fees, directly or indirectly as a result of Mr. Miller's services under the agreement.

On December 21, 2015, Mr. Miller entered into an incentive unit grant agreement with 21CI. Pursuant to the Incentive Agreement, Mr. Miller will receive 20,000 Class E Units of 21CI, which vest equally over five years. Upon Mr. Miller's termination from service for any reason, 21CI has the right to repurchase all or a portion of any vested Class E Units. In addition, on December 21, 2015, Mr. Miller and the Company entered into a bonus agreement which provides that upon a sale of the Company, Mr. Miller will receive a cash bonus equal to 0.12% of the equity value of the Company upon such sale, not to exceed $252,600.

We entered into an independent contractor agreement with Mr. Spalding effective May 12, 2016 to serve as an independent board member for an annual compensation of $100,000 and to serve as a member of the Audit Committee and Capital Allocation Committee. Mr. Spalding shall also be reimbursed for the reasonable expenses incurred in accordance with our policies on reimbursement of

expenses. The initial term of the agreement is for a period of one year commencing on the effective date and continuing in full force and effect, unless earlier terminated pursuant to the terms of the agreement. Thereafter, the agreement shall automatically renew upon the same terms and conditions for additional one year terms, unless either party provides the other written notice of its intent not to renew. Either party may terminate this Agreement at any time without cause by giving the other party written notice of its intent to terminate.

Mr. Spalding shall participate in our directors and officers liability insurance program at the same level offered to other members of the Board of Directors. We will provide representation for, indemnification and hold harmless for Mr. Spalding against all actions, all losses, damages, costs and expenses including but not limited to attorney's fees, directly or indirectly as a result of Mr. Spalding's services under the agreement.

On May 12, 2016, Mr. Spalding entered into an incentive unit grant agreement with 21CI. Pursuant to the Incentive Agreement, Mr. Spalding will receive 20,000 Class E Units of 21CI, which vest equally over five years. Upon Mr. Spalding's termination from service for any reason, 21CI has the right to repurchase all or a portion of any vested Class E Units. In addition, on May 12, 2016, Mr. Spalding and the Company entered into a bonus agreement which provides that upon a sale of the Company, Mr. Spalding will receive a cash bonus equal to 0.12% of the equity value of the Company upon such sale, not to exceed $252,600.

The following table provides information regarding outstanding equity awards held by the members of our Board of Directors as of the end of fiscal year 2015 and who are not named executive officers.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

21CH is a wholly owned subsidiary of 21CI, whose members include funds affiliated with Vestar and certain members of management. The respective percentages of beneficial ownership of Class A voting equity units of 21CI, Class D non-voting equity units of 21CI, Class E non-voting equity units of 21CI and non-voting preferred equity units of 21CI owned is based on 10,308,594 shares of Class A voting equity units of 21CI, 10 shares of Class D non-voting equity units of 21CI, 908,421 shares of Class E non-voting equity units of 21CI and 543,258 shares of non-voting preferred equity units of 21CI outstanding as of July 31, 2016. CPPIB owns 385,000 shares of Series A Preferred Stock as of July 31, 2016. This information has been furnished by the persons named in the table below. Fractional units have been rounded to the nearest integer. Unless otherwise indicated, the address of each of the directors and executive officers is c/o 21^st Century Oncology, Inc., 2270 Colonial Boulevard, Fort Myers, Florida 33907.

	Class A Units					Class D Units(2)					Class E Units(2)					Preferred Units

Name of Beneficial Owner(1)	Number		Percent			Number		Percent			Number		Percent			Number		Percent
Principal Shareholder:
Funds affiliated with Vestar(3)		8,286,564		80.4	%		—		—			—		—			437,134		80.5	%
Directors and Named Executive Officers
Daniel E. Dosoretz, M.D.(4)		718,374		7.0	%		10		100.0	%		164,473		18.1	%		37,896		7.0	%
LeAnne M. Stewart		—		—			—		—			123,355		13.6	%		—		—
Constantine A. Mantz, M.D.		7,968		*			—		—			82,237		9.1	%		420		*
James L. Elrod, Jr.(5)		—		—			—		—			—		—			—		—
Robert L. Rosner(6)		—		—			—		—			—		—			—		—
Erin L. Russell(7)		—		—			—		—			—		—			—		—
Christian Hensley		—		—			—		—			—		—			—		—
Howard M. Sheridan, M.D.		179,277		1.7			—		—			—		—			9,457		1.7	%
Robert W. Miller		—		—			—		—			20,000		2.2	%		—		—
William R. Spalding		—		—			—		—			20,000		2.2	%		—		—
All directors and officers		—		—			—		—			—		—			—		—
as a group (15 persons)		1,601,830		15.5	%		—		—			656,776		72.3	%		84,502		15.6	%

*

Represents less than 1%.

(1)

A "beneficial owner" of a security is determined in accordance with Rule 13d-3 under the Exchange Act and generally means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares:

•: voting power which includes the power to vote, or to direct the voting of, such security; and/or
•: investment power which includes the power to dispose, or to direct the disposition of, such security.

In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of equity units subject to options held by that person that are currently exercisable or exercisable within 60 days of July 31, 2016 are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.

(2)

Class D and E units are non-voting equity units of 21CI issued under 21CI's limited liability company agreement.

(3)

Includes 4,260,078 shares of Class A voting equity units of 21CI and 224,728 shares of non-voting preferred equity units of 21CI held by Vestar Capital Partners V, L.P., 1,171,620 shares of Class A voting equity units of 21CI and 61,806 shares of non-voting preferred equity units of 21CI held by Vestar Capital Partners V-A, L.P., 70,756 shares of Class A voting equity units of 21CI and 3,733 shares of non-voting preferred equity units of

21CI held by Vestar Executives V, L.P. and 234,398 shares of Class A voting equity units of 21CI and 12,365 shares of non-voting preferred equity units of 21CI held by Vestar Holdings V, L.P. Vestar Associates V, L.P. is the general partner of Vestar Capital Partners V, L.P., Vestar Capital Partners V-A, L.P., Vestar Executives V, L.P. and Vestar Holdings V, L.P. and Vestar Managers V Ltd. is the general partner of Vestar Associates V, L.P. As such, Vestar Managers V Ltd. has sole voting and dispositive power over the shares held by Vestar and its affiliated funds. Vestar's co-investors, which Vestar controls, own 2,549,712 shares of Class A voting equity units of 21CI, or approximately 25% of Class A voting equity units of 21CI, and 134,503 shares of non-voting preferred equity units of 21CI, or approximately 25% of the preferred equity units of 21CI. As such, Vestar and its affiliates control, and may be deemed to beneficially own 8,286,564 shares of Class A voting equity units of 21CI, or approximately 80% of the Class A voting equity units of 21CI, and 437,134 shares of the non-voting preferred equity units of 21CI, or approximately 80% of the preferred equity units of 21CI, through its ability to directly or indirectly control its co-investors. Each of Vestar and its affiliated funds disclaims beneficial ownership of such securities, except to the extent of its pecuniary interest therein. The address for each of Vestar and its affiliated funds is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.

(4): These shares are held in trusts for which Dr. Dosoretz and his descendants are beneficiaries. Dr. Dosoretz is the trustee of the trusts and as such, has sole voting and investment power with respect to the shares in the trusts.
(5): Mr. Elrod is a managing director of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of 21CI and the non-voting preferred equity units of 21CI held by Vestar, its affiliated funds and its co-investors. Mr. Elrod disclaims beneficial ownership of such securities, except to the extent of his pecuniary interest therein. The address for Mr. Elrod is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.
(6): Mr. Rosner is a managing director of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of 21CI and the non-voting preferred equity units of 21CI held by Vestar, its affiliated funds and its co-investors. Mr. Rosner disclaims beneficial ownership of such securities, except to the extent of his pecuniary interest therein. The address for Mr. Rosner is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.
(7): Ms. Russell is a principal of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of 21CI and the non-voting preferred equity units of 21CI held by Vestar, its affiliated funds and its co-investors. Ms. Russell disclaims beneficial ownership of such securities, except to the extent of her pecuniary interest therein. The address for Ms. Russell is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.

For information relating to Securities Authorized for Issuance Under Equity Compensation Plans, see "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities."

Item 13. Certain Relationships and Related Transactions, and Director Independence

Our Board of Directors has adopted a written policy or procedure for the review, approval and ratification of related party transactions, and the Audit Committee charter requires the Audit Committee to review all relationships and transactions in which 21C and its employees, directors and officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Based on all the relevant facts and circumstances, our Audit Committee will decide whether the related party transaction is appropriate and will approve only those transactions that are in the best interests of the Company.

Set forth below are certain transactions and relationships between us and our directors, executive officers and equityholders that have occurred during the last three years.

In California, Delaware, Maryland, Massachusetts, Michigan, Nevada, New York, North Carolina and Washington, we have administrative services agreements with professional corporations owned by certain of our directors, executive officers and equityholders, who are licensed to practice medicine in such states. Drs. Dosoretz, Rubenstein and Michael J. Katin, M.D., a former director on the Company's Board of Directors as well as a director on the boards of directors of several of our subsidiaries and a holder of equity in 21CI, own interests in these professional corporations ranging from 0% to 100%.

We have entered into these administrative services agreements in order to comply with the laws of such states which prohibit us from employing physicians. Our administrative services agreements generally obligate us to provide treatment center facilities, staff and equipment, accounting services, billing and collection services, management and administrative personnel, assistance in managed care contracting and assistance in marketing services. Terms of the agreements are typically 20-25 years and renew automatically for successive five-year periods, with certain agreements having 30 year terms and automatically renewing for successive one-year periods. The administrative services agreements also contain restrictive covenants that preclude the professional corporations from providing substantially similar healthcare services, hiring another management services organization and soliciting our employees, customers and clients for the duration of the agreement and some period after termination, usually three years. Monthly fees for such services may be computed on a fixed basis, percentage of net collections basis, or on a per treatment basis, depending on the particular state requirements. The administrative services fees paid to us by such professional corporations under the administrative services agreements were approximately $64.0 million, $73.2 million and $66.0 million, for the years ended December 31, 2015, 2014 and 2013, respectively.

In addition, we have stock transfer agreements with the professional corporations owned by Drs. Dosoretz, Rubenstein and Katin, which correspond to the administrative services agreements. The stock transfer agreements provide that (i) the term of the agreements corresponds to the respective administrative services agreement and any renewals thereof, (ii) the shareholders grant us a security interest in the shares held by them in the professional corporation, and (iii) the shareholders are prohibited from making any transfer of the shares held by them in the professional corporation, including through intestate transfer, except to qualified shareholders with our approval. Upon certain shareholder events of transfer (as defined in the stock transfer agreements), including a transfer of shares by any shareholder without our approval or the loss of a shareholder's license to practice radiation therapy in his or her applicable state, for a period of 30 days after giving notice to us of such event, the other shareholders have an opportunity to buy their pro-rata portion of the shares being transferred. If at the end of the 30-day period, any of the transferring shareholder's shares have not been acquired, then, for a period of 30 days, the professional corporation has the option to purchase all or a portion of the shares. If at the end of that 30- day period any of the transferring shareholder's shares have not been acquired, we must designate a transferee to purchase the remaining shares. The purchase price for the shares shall be the fair market value as determined by our auditors. Upon other events relating to the professional corporation, including uncured defaults, we shall designate a transferee to purchase all of the shares of the professional corporation.

We lease certain of our treatment centers and other properties from partnerships which are majority-owned by Drs. Dosoretz, Sheridan, Katin and Mantz and Dr. Fernandez, our Senior Vice President, Director of Regional Operations. As of December 31, 2015, Drs. Dosoretz, Sheridan, Katin, Fernandez and Mantz had ownership interests in these entities ranging from 0% to 100%. These leases have expiration dates through December 31, 2028, and provide for annual lease payments and executory costs, ranging from approximately $58,000 to $0.7 million. The aggregate lease payments we

made to these entities were approximately $12.4 million, $20.0 million and $18.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. The rents were determined on the basis of the debt service incurred by the entities and a return on the equity component of the project's funding. In 2004, an independent consultant determined that the rents were at fair market value. Since that time, we have continued to utilize an independent consultant to assist the Audit Committee in determining fair market rental for any renewal or new rental arrangements with any affiliated party.

We also maintain a construction company which provides remodeling and real property improvements at certain of our facilities. This construction company builds and constructs leased facilities on the lands owned by Drs. Dosoretz, Rubenstein, Sheridan and Katin. Payments received by us for building and construction fees were approximately $0.6 million, $1.3 million and $4.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. Amounts due to us for the construction services were approximately $0.1 million and $0.2 million at December 31, 2015 and 2014, respectively. During the year ended December 31, 2015, we purchased a construction project from these related parties for approximately $0.7 million. We subsequently completed the construction project and are utilizing the project in our operations. The purchase price was equal to the accumulated construction costs incurred by the related parties.

On September 26, 2014, 21CI, the Company, CPPIB and the other parties thereto entered into the Amended Securityholders Agreement. The Amended Securityholders Agreement provides, among other things:

Each of 21CI, 21CH and 21C are party to a Management Agreement, amended and restated as of September 26, 2014 (the "Management Agreement"), with Vestar relating to certain advisory and consulting services Vestar provides to 21C, 21CI and 21CH. The Management Agreement provides for Vestar to receive an annual management fee equal to the greater of (i) $850,000 or (ii) an amount equal to 1.0% of 21C's consolidated EBITDA, which fee is payable quarterly, in advance. 21CI, 21CH and 21C must indemnify Vestar and its affiliates against all losses, claims, damages and liabilities arising out of the performance by Vestar of its services pursuant to the Management Agreement, other than those that have resulted primarily from the gross negligence or willful misconduct of Vestar and/or its affiliates.

The Management Agreement will terminate upon the earlier of (i) such time when Vestar and its affiliates hold, directly or indirectly, less than 20% of the voting power of 21C's outstanding voting stock, (ii) a Public Offering (as defined in the Amended Securityholders Agreement) or (iii) a sale of 21CI, 21CH or 21C in accordance with the Amended Securityholders Agreement.

We paid approximately $0.9 million, $1.1 million and $1.6 million in management fees to Vestar for the years ended December 31, 2013, 2014 and 2015, respectively.

In connection with the closing of the Merger, 21CI entered into various management stock contribution and unit subscription agreements ("Management Stock Contribution and Unit Subscription Agreements") with our management employees, including Drs. Dosoretz, Sheridan, Rubenstein, Katin and Mantz (each, an "Executive"), pursuant to which they exchanged certain shares of 21C's common stock held by them immediately prior to the effective time of the Merger or invested cash in 21C, in each case, in exchange for non-voting preferred equity units and Class A voting equity units of 21CI. Under the Management Stock Contribution and Unit Subscription Agreements, if an Executive's employment is terminated by death or disability, by 21CI and its subsidiaries without "cause" or by the Executive for "good reason" (each as defined in the respective Management Stock Contribution and Unit Subscription Agreement), or by 21CI or its subsidiaries for "cause" or by the Executive for any other reason except retirement, or the Executive violates the non-compete or confidentiality provisions, 21CI has the right and option to purchase, for a period of 90 days following the termination, any and all units held by the Executive or the Executive's permitted transferees, at the fair market value determined in accordance with the applicable Management Stock Contribution and Unit Subscription

Agreement, subject to certain exceptions and limitations. Under Dr. Dosoretz's Management Stock Contribution and Unit Subscription Agreement, he also has certain put option rights to require 21CI to repurchase his non-voting preferred equity units and Class A voting equity units if, prior to a sale of 21CI, 21CH or 21C in accordance with the Securityholders Agreement or a Public Offering (as defined in the Securityholders Agreement), his employment is terminated without cause or he terminates his employment for good reason and at such time 21CI has met certain performance targets.

On October 7, 2015, 21CI entered into the Seventh Amended LLC Agreement (the "Amended LLC Agreement"). The Amended LLC Agreement governs the affairs of 21CI and the conduct of its business, and sets forth certain terms of the equity units held by members of 21CI, including, among other things, the right of members to receive distributions, the voting rights of holders of equity units and the composition of the board of managers, subject to the terms of the Amended Securityholders Agreement. The Amended LLC Agreement implements the terms of the Subscription Agreement and the Amended Securityholders Agreement including, without limitation, the board and committee composition terms set forth therein. The Amended LLC Agreement contains customary indemnification provisions relating to holders of units and managers and officers of 21CI.

Under the Amended LLC Agreement, 21CI has ten classes of equity outstanding: SFRO Preferred Units, Preferred Units, Class A Units, of which Vestar and its affiliates control 80% of the outstanding units and are the only class of voting securities, Class D Units, Class E Units, Class G Units, Class M Units, Class MEP Units, Class N Units and Class O Units.

The Amended LLC Agreement also provides that upon a public offering of 21CI, the board of managers of 21CI may authorize a recapitalization of 21CI whereby certain unitholders will receive, in exchange for their existing 21CI units and subject to certain limitations, common stock, or the right to receive common stock or cash, in exchange for, or otherwise in satisfaction of, the units then held by such unitholders.

We have entered employment agreements with certain of our executive officers and directors, which contain compensation, severance, non-compete and confidentiality provisions. In addition, we have employed, and continue to employ, directly or indirectly, immediate family members of certain of our directors, executive officers and equityholders, including Dr. Dosoretz's brothers, Alejandro Dosoretz, and Victor Dosoretz, Dr. Dosoretz's daughter, Amy Fox, M.D., Dr. Dosoretz's son, Arie Dosoretz, M.D., and Dr. Rubenstein's brother, Paul Rubenstein. Alejandro Dosoretz received compensation under an executive employment agreement of approximately $2.7 million, $1.1 million and $1.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. Victor Dosoretz received compensation of approximately $330,000, $330,000 and $260,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Amy Fox, M.D. received compensation under a physician employment agreement of approximately $172,000, $241,000 and $244,000 for the years ended December 31, 2015, 2014 and 2013, respectively. On February 3, 2015, we entered into a physician employment contract with Arie Dosoretz, M.D. for his employment services as a radiation oncologist. Terms of Dr. Arie Dosoretz's includes a base salary of $350,000 plus a production bonus. The terms of Dr. Arie Dosoretz's physician employment contract are standard and customary for radiation oncologists we employ and were reviewed and approved by the Audit Committee. Arie Dosoretz, M.D. received compensation under a physician employment agreement of approximately $130,000 for the year ended December 31, 2015. Paul Rubenstein received compensation as our Director of Physician Contracting of approximately $202,000, $167,000 and $160,000 for the years ended December 31, 2015, 2014 and 2013, respectively.

We have entered into indemnification agreements with certain of our directors and executive officers. The indemnification agreements provide, among other things, that 21C will, to the extent permitted by applicable law, indemnify and hold harmless each indemnitee if, by reason of his or her status as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of 21C or of any other enterprise which such person is or was serving at the request of 21C, such indemnitee was, is or is threatened to be made, a party to in any threatened, pending or completed proceeding, whether brought in the right of 21C or otherwise and whether of a civil, criminal, administrative or investigative nature, against all expenses (including attorneys' and other professionals' fees), judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such proceeding. The indemnitee shall not be indemnified unless he or she acted in good faith and in a manner he or she reasonably believed to be in the best interests of 21C, or for willful misconduct. In addition, the indemnification agreements provide for the advancement of expenses incurred by the indemnitee in connection with any such proceeding to the fullest extent permitted by applicable law. The indemnification agreements terminate upon the later of five years after the date that the indemnitee ceased to serve as a director and/or executive officer or the date of the final termination of any proceedings subject to the indemnification agreements. 21C has agreed not to bring any legal action against the indemnitee or his or her spouse or heirs after two years following the date the indemnitee ceases to be a director and/or executive officer of 21C. The indemnification agreements do not exclude any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including any rights arising under the Articles of Incorporation or Bylaws of 21C, or the Florida Business Corporation Act.

In connection with the Merger, we agreed that we would not alter or impair any existing indemnification provisions then in existence in favor of then current or former directors or officers as provided in the Articles of Incorporation or Bylaws of 21C or as evidenced by indemnification agreements with us.

We are a participating provider in an oncology network, of which Dr. Dosoretz has an ownership interest. We provide oncology services to members of the network. Payments received by us for services rendered in 2015, 2014 and 2013 were approximately $2.0 million, $1.3 million and $1.5 million, respectively.

During the year ended December 31, 2015, one of our subsidiaries, CarePoint Health Solutions, LLC entered into a management agreement with a multi-disciplinary physician practice owned by related parties to provide management and monitoring services related to the physician practice's ACO arrangement. Amounts due to us under this arrangement total approximately $15,000 as of December 31, 2015.

We are party to a contract with Batan Insurance Company SPC, LTD, an entity which is owned by, among others, Drs. Dosoretz, Rubenstein, Sheridan and Katin to provide us with malpractice insurance coverage. We paid premium payments to Batan Insurance Company SPC, LTD of approximately $4.3 million, $8.9 million and $4.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. In November 2015, we renewed our medical malpractice insurance coverage with a third party insurance carrier.

The Company's securities are not listed on any national securities exchange or in an automated inter-dealer quotation system of a national securities association which has requirements that a majority of its board of directors be independent, and it is not otherwise subject to any director independence

requirements. In addition, the Company has not adopted its own standards of director independence. However, for purposes of this disclosure, the Company has reviewed the independence of its directors under the corporate governance standards adopted by the New York Stock Exchange. The Company has determined that two of its directors, Mr. Miller and Mr. Spalding, are independent under such standards. Note that under Section 303A.00 of the New York Stock Exchange Listed Company Manual, we would be considered a "controlled company" because more than 50% of our voting power is held by another company. Accordingly, even if we were a listed company on the New York Stock Exchange, we would not be required to maintain a majority of independent directors on our Board of Directors.

The following table presents fees for professional audit and other services rendered by our independent registered public accounting firms, Ernst & Young LLP for the year ended December 31, 2015 and Deloitte & Touche LLP for the year ended December 31, 2014.

Fees for audit services included fees associated with the annual audit, reviews of the Company's quarterly reports, services in connection with debt and equity offerings, and SEC regulatory filings. Audit-related fees principally included acquisition related work and agreed-upon procedures. Tax fees included tax compliance, tax advice, and tax planning. All other fees include fees not included in the other categories.

The Audit Committee approves in advance all audit and non-audit services to be performed by the Company's independent registered public accounting firms. The Audit Committee considers whether the provision of any proposed non-audit services is consistent with the SEC's rules on auditor independence and has pre-approved certain specified audit and non-audit services to be provided by Ernst & Young LLP and Deloitte & Touche LLP for up to twelve months from the date of the pre-approval. If there are any additional services to be provided, a request for pre-approval must be submitted to the Audit Committee for its consideration.

The Exhibits are incorporated by reference to the Exhibit Index included as part of this Annual Report on Form 10-K.

We have audited the accompanying consolidated balance sheet of 21^st Century Oncology Holdings, Inc. (the "Company") as of December 31, 2015, and the related consolidated statements of operations and comprehensive loss, changes in equity (deficit), and cash flows for the year ended December 31, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of 21^st Century Oncology Holdings, Inc. at December 31, 2015, and the consolidated results of its operations and its cash flows for the year ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has not complied with certain covenants of loan agreements with banks and noteholders as it pertains to the timely reporting of annual and quarterly financial information, the resolution of which is contingent upon the generation of specific net cash proceeds to be received within certain time periods. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters also are described in Note 3. The 2015 consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

As discussed in Note 4 to the consolidated financial statements, the Company changed its method for classifying deferred tax assets and liabilities effective December 31, 2015.

To the Board of Directors and Shareholder of
21^st Century Oncology Holdings, Inc.

We have audited the accompanying consolidated balance sheet of 21^st Century Oncology Holdings, Inc. and subsidiaries (the "Company") as of December 31, 2014, and the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the years ended December 31, 2014 and 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of 21^st Century Oncology Holdings, Inc. and subsidiaries at December 31, 2014, and the results of their operations and their cash flows for the years ended December 31, 2014 and 2013, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, the accompanying consolidated financial statements as of December 31, 2014, and for the years ended December 31, 2014 and 2013 have been restated to correct misstatements.

Certified Public Accountants
Miami, Florida
March 27, 2015 (August 23, 2016, as to the effects of the restatement discussed in Note 2)

21^ST CENTURY ONCOLOGY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	December 31, 2015			December 31, 2014

ASSETS
Current assets:
Cash and cash equivalents ($10,175 and $7,202 related to VIEs)	$	65,211		$	99,082
Restricted cash		195			7,283
Marketable securities		1,078			—
Accounts receivable, net ($16,945 and $13,799 related to VIEs)		122,355			121,799
Prepaid expenses ($487 and $651 related to VIEs)		7,822			8,728
Inventories ($409 and $370 related to VIEs)		3,918			3,162
Income taxes receivable		4,966			4,432
Deferred income taxes ($0 and $6 related to VIEs)		—			1,771
Other ($319 and $403 related to VIEs)		15,732			8,291

Total current assets		221,277			254,548
Equity investments in joint ventures		1,214			1,646
Property and equipment, net ($20,866 and $19,051 related to VIEs)		238,585			269,570
Real estate subject to finance obligation		12,631			22,552
Goodwill ($52,454 and $54,377 related to VIEs)		498,680			476,559
Intangible assets, net ($5,987 and $12,421 related to VIEs)		70,115			81,385
Embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock		17,883			—
Other assets ($6,291 and $6,335 related to VIEs)		65,971			47,184
Deferred income taxes ($6 and $0 related to VIEs)		1,888			—

Total assets	$	1,128,244		$	1,153,444



LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable ($2,691 and $1,270 related to VIEs)	$	59,888		$	62,507
Accrued expenses ($4,637 and $3,534 related to VIEs)		111,653			88,604
Income taxes payable ($0 and $0 related to VIEs)		2,501			1,326
Current portion of long-term debt ($64 and $14 related to VIEs)		1,048,260			26,350
Current portion of finance obligation		283			433
Other current liabilities		14,265			19,512

Total current liabilities		1,236,850			198,732
Long-term debt, less current portion ($155 and $11 related to VIEs)		49,233			940,771
Finance obligation, less current portion		13,318			23,610
Embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock		19,911			15,843
Other long-term liabilities ($2,974 and $2,474 related to VIEs)		70,928			71,985
Deferred income taxes		3,887			4,834

Total liabilities		1,394,127			1,255,775
Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 authorized, 385,000 issued and outstanding at December 31, 2015 and 2014, respectively		389,514			319,997
Noncontrolling interests—redeemable		19,233			15,273
Commitments and contingencies
Equity:
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,059 and 1,028 issued and outstanding at December 31, 2015 and December 31, 2014, respectively		—			—
Additional paid-in capital		579,920			634,930
Retained deficit		(1,226,298	)		(1,091,449	)
Accumulated other comprehensive loss, net of tax		(54,574	)		(36,920	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(700,952	)		(493,439	)
Noncontrolling interests—nonredeemable		26,322			55,838

Total deficit		(674,630	)		(437,601	)

Total liabilities and deficit	$	1,128,244		$	1,153,444

The accompanying notes are an integral part of the consolidated financial statements.

21^ST CENTURY ONCOLOGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Year Ended December 31,

(in thousands):	2015			2014			2013
Revenues:
Net patient service revenue	$	1,000,126		$	938,488		$	707,616
Management fees		59,719			67,012			11,139
Other revenue		19,382			12,682			10,168

Total revenues		1,079,227			1,018,182			728,923
Expenses:
Salaries and benefits		579,492			545,025			409,352
Medical supplies		98,654			97,367			64,640
Facility rent expenses		68,664			63,111			45,565
Other operating expenses		64,750			61,784			45,629
General and administrative expenses		174,791			135,819			107,395
Depreciation and amortization		89,040			86,583			65,096
Provision for doubtful accounts		14,526			19,253			12,146
Interest expense, net		98,075			113,279			86,747
(Gain) loss on the sale/disposal of property and equipment		(751	)		119			336
Electronic health records incentive income		(39	)		(93	)		—
Gain on BP settlement		(7,495	)		—			—
Gain on insurance recoveries		(1,655	)		—			—
Impairment loss		—			229,526			—
Early extinguishment of debt		37,390			8,558			—
Equity initial public offering expenses		—			4,905			—
Loss on sale-leaseback transactions		—			135			313
Fair value adjustment of earn-out liabilities		(1,811	)		1,627			130
Fair value adjustment of embedded derivatives and other financial instruments		(17,919	)		837			—
Gain on the sale of an interest in a joint venture		—			—			(1,460	)
Loss on foreign currency transactions		904			678			1,138
(Gain) loss on foreign currency derivative contracts		—			(4	)		467

Total expenses		1,196,616			1,368,509			837,494

Loss before income taxes and equity interest in net income (loss) of joint ventures		(117,389	)		(350,327	)		(108,571	)
Income tax expense (benefit)		9,654			2,319			(23,068	)

Net loss before equity interest in net income (loss) of joint ventures		(127,043	)		(352,646	)		(85,503	)
Equity interest in net income (loss) of joint ventures, net of tax		201			(50	)		(454	)

Net loss		(126,842	)		(352,696	)		(85,957	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(8,007	)		(4,595	)		(1,838	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(134,849	)		(357,291	)		(87,795	)
Other comprehensive loss, net of tax:
Net periodic benefit cost of pension plan		(366	)		(91	)		—
Unrealized loss on foreign currency translation		(19,683	)		(12,098	)		(15,813	)

Other comprehensive loss		(20,049	)		(12,189	)		(15,813	)

Comprehensive loss		(146,891	)		(364,885	)		(101,770	)

Comprehensive income attributable to noncontrolling interests-redeemable and non-redeemable		(5,612	)		(3,224	)		(303	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(152,503	)	$	(368,109	)	$	(102,073	)

The accompanying notes are an integral part of the consolidated financial statements.

	Year Ended December 31,

(in thousands):	2015			2014			2013
Cash flows from operating activities
Net loss	$	(126,842	)	$	(352,696	)	$	(85,957	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		89,040			86,583			65,096
Deferred rent expense		676			774			973
Deferred income taxes		(278	)		(783	)		(28,117	)
Stock-based compensation		8			106			597
Provision for doubtful accounts		14,526			19,253			12,146
(Gain) loss on the sale/disposal of property and equipment		(751	)		119			336
Gain on insurance recoveries		(291	)		—			—
Loss on sale-leaseback transactions		—			135			313
Gain on the sale of marketable securities		(3	)		—			—
Impairment loss		—			229,526			—
Early extinguishment of debt		37,390			8,558			—
Equity initial public offering expenses		—			4,905			—
Gain on the sale of an interest in a joint venture		—			—			(1,460	)
Loss on foreign currency transactions		450			348			143
Gain on foreign currency derivative contracts		—			(4	)		467
Fair value adjustment of earn-out liabilities		(1,811	)		1,627			130
Fair value adjustment of embedded derivatives and other financial instruments		(17,919	)		837			—
Amortization of debt discount		1,706			2,483			1,191
Amortization of loan costs		4,708			6,277			5,595
Paid in kind interest on notes payable		757			—			—
Equity interest in net (income) loss of joint ventures, net of tax		(201	)		50			454
Distribution received from unconsolidated joint ventures		106			221			21
Pension plan contributions		(1,756	)		(1,587	)		—
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(31,636	)		(35,108	)		(32,539	)
Income taxes payable		972			(3,453	)		(2,247	)
Inventories		(1,680	)		8			(195	)
Prepaid expenses and other assets		5,331			3,677			4,191
Accounts payable		500			514			29,373
Accrued deferred compensation		1,444			1,522			1,344
Accrued expenses / other liabilities		33,998			11,321			17,124

Net cash provided by (used in) operating activities		8,444			(14,787	)		(11,021	)
Cash flows from investing activities
Purchase of property and equipment		(40,936	)		(56,659	)		(40,651	)
Acquisition of medical practices		(34,205	)		(50,245	)		(68,661	)
Changes in restricted cash associated with medical practice acquisitions		7,088			(3,181	)		(3,768	)
Proceeds from the sale of equity interest in a joint venture		—			—			1,460
Proceeds from the sale of property and equipment		1,680			96			78
Proceeds from insurance recoveries		291			—			—
Purchase of marketable securities		(5,687	)		—			—
Sale of marketable securities		4,612			—			—
Repayments from (loans to) employees		186			(1,226	)		(859	)
Contribution of capital to joint venture entities		—			(620	)		(992	)
Distribution received from joint venture entities		496			—			—
Purchase of noncontrolling interest—non-redeemable		—			—			(1,509	)
Proceeds from foreign currency derivative contracts		—			26			(171	)
Company owned life insurance policies		(1,302	)		(1,265	)		(1,234	)
Change in other assets and other liabilities		(340	)		(765	)		(2,212	)

Net cash used in investing activities		(68,117	)		(113,839	)		(118,519	)

Cash flows from financing activities
Proceeds from issuance of debt (net of original issue discount of $6.1 million, $3.4 million and $2.3 million, respectively)		1,047,871			169,845			306,063
Principal repayments of debt		(944,437	)		(268,377	)		(171,432	)
Repayments of finance obligation		(219	)		(278	)		(182	)
Proceeds from issuance of Series A convertible redeemable preferred stock		—			325,000			—
Payments of issue costs related to the issuance of preferred stock		—			(6,137	)		—

The accompanying notes are an integral part of the consolidated financial statements.

	Year Ended December 31,

(in thousands):	2015			2014			2013
Proceeds from issuance of noncontrolling interest		743			1,250			—
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		3,230			259			765
Purchase of noncontrolling interest—non-redeemable		(16,233	)		—			—
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(5,174	)		(3,599	)		(2,211	)
Payments for contingent considerations		(8,537	)		—			—
Payments of costs for equity securities offering		—			(4,905	)		—
Payment of call premium on long-term debt		(24,877	)		—			—
Payments of loan costs		(26,481	)		(2,436	)		(1,359	)

Net cash provided by financing activities		25,886			210,622			131,644

Effect of exchange rate changes on cash and cash equivalents		(84	)		(42	)		(52	)
Net (decrease) increase in cash and cash equivalents		(33,871	)		81,954			2,052
Cash and cash equivalents, beginning of period		99,082			17,128			15,076

Cash and cash equivalents, end of period	$	65,211		$	99,082		$	17,128



Supplemental disclosure of cash flow information
Interest paid	$	99,253		$	101,149		$	78,750

Income taxes paid	$	11,467		$	7,585		$	9,364

Supplemental disclosure of non-cash investing and financing activities
Finance obligation related to real estate projects	$	1,898		$	7,790		$	7,580

Derecognition of finance obligation related to real estate projects	$	12,215		$	4,119		$	3,940

Capital lease obligations related to the purchase of equipment	$	2,408		$	17,625		$	3,054

Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable	$	2,865		$	3,049		$	—

Noncash vendor credits	$	1,500		$	—		$	—

Issuance of notes payable relating to the acquisition of medical practices	$	5,522		$	2,000		$	2,097

Liability relating to the escrow debt and purchase price of medical practices	$	—		$	2,970		$	—

Capital lease obligations related to the acquisition of medical practices	$	3,166		$	47,796		$	10,903

Change in earn-out liabilities	$	13,572		$	11,052		$	7,950

Amounts payable to sellers in the purchase of a medical practice	$	150		$	249		$	—

Incurred offering costs	$	—		$	—		$	1,323

Noncash dividend declared to noncontrolling interest	$	97		$	194		$	77

Noncash issuance of noncontrolling interest	$	56		$	—		$	—

Issuance of notes payable relating to the purchase of SFRO noncontrolling interest	$	14,560		$	—		$	—

Issuance of equity units relating to the purchase of SFRO noncontrolling interest	$	14,500		$	—		$	—

Noncash dividend declared from unconsolidated joint venture	$	—		$	—		$	150

Accrued dividends on Series A convertible preferred stock, accrued at effective rate	$	55,074		$	12,683		$	—

Accretion of redemption value on Series A convertible preferred stock	$	17,447		$	3,457		$	—

Change in additional paid-in capital from sale/purchase of interest in subsidiaries	$	2,315		$	—		$	—

Noncash deconsolidation of noncontrolling interest	$	—		$	—		$	9

Noncash contribution of capital by noncontrolling interest holders	$	—		$	37		$	4,235

Termination of prepaid services by noncontrolling interest holder	$	—		$	—		$	2,551

Issuance of notes payable relating to the earn-out liability in the acquisition of Medical Developers	$	—		$	—		$	2,679

Issuance of equity LLC units relating to the earn-out liability in the acquisition of Medical Developers	$	—		$	—		$	705

Issuance of senior secured notes related to the acquisition of medical practices	$	—		$	—		$	75,000

Reserve claim liability related to the acquisition of medical practices	$	—		$	—		$	3,682

Step up basis in joint venture interest	$	688		$	—		$	83

The accompanying notes are an integral part of the consolidated financial statements.

21^ST CENTURY ONCOLOGY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

	Common Stock										Accumulated Other Comprehensive Loss

	Common Stock				Additional Paid-In Capital			Retained Deficit						Noncontrolling interests— Nonredeemable			Total Equity
(in thousands except share amounts):	Shares		Amount		Additional Paid-In Capital			Retained Deficit						Noncontrolling interests— Nonredeemable			Total Equity
Balance, January 1, 2013		1,025	$	—	$	651,907		$	(646,363	)	$	(11,823	)	$	15,643		$	9,364
Net (loss) income		—		—		—			(87,795	)		—			1,964			(85,831	)
Foreign currency translation loss		—		—		—			—			(14,279	)		(1,505	)		(15,784	)
Issuance of equity LLC units relating to earn-out liability		3		—		705			—			—			—			705
Deconsolidation of a noncontrolling interest		—		—		(9	)		—			—			9			—
Purchase price fair value of noncontrolling interest—nonredeemable		—		—		(2,404	)		—			—			2,194			(210	)
Termination of prepaid services by noncontrolling interest holder		—		—		—			—			—			(2,551	)		(2,551	)
Step up in basis of joint venture interests		—		—		83			—			—			—			83
Stock-based compensation		—		—		597			—			—			—			597
Distributions		—		—		—			—			—			(1,974	)		(1,974	)

Balance, December 31, 2013		1,028	$	—	$	650,879		$	(734,158	)	$	(26,102	)	$	13,780		$	(95,601	)

Net (loss) income		—		—		—			(357,291	)		—			3,300			(353,991	)
Net periodic benefit cost of pension plan		—		—		—			—			(91	)		—			(91	)
Foreign currency translation loss		—		—		—			—			(10,727	)		(1,371	)		(12,098	)
Accretion of Series A convertible redeemable preferred stock		—		—		(3,457	)		—			—			—			(3,457	)
Accrued Series A convertible redeemable preferred stock dividends		—		—		(12,683	)		—			—			—			(12,683	)
Purchase price fair value of noncontrolling interest—nonredeemable		—		—		—			—			—			40,541			40,541
Proceeds from issuance of noncontrolling interest—nonredeemable		—		—		85			—			—			1,165			1,250
Proceeds from noncontrolling interest holders—nonredeemable		—		—		—			—			—			296			296
Stock-based compensation		—		—		106			—			—			—			106
Distributions		—		—		—			—			—			(1,873	)		(1,873	)

Balance, December 31, 2014		1,028	$	—	$	634,930		$	(1,091,449	)	$	(36,920	)	$	55,838		$	(437,601	)

Net (loss) income		—		—		—			(134,849	)		—			5,793			(129,056	)
Net periodic benefit cost of pension plan		—		—		—			—			(366	)		—			(366	)
Foreign currency translation loss		—		—		—			—			(17,288	)		(2,356	)		(19,644	)
Accretion of Series A convertible redeemable preferred stock		—		—		(17,447	)		—			—			—			(17,447	)
Accrued Series A convertible redeemable preferred stock dividends		—		—		(55,074	)		—			—			—			(55,074	)
Purchase price fair value of noncontrolling interest—nonredeemable		31		—		14,500			—			—			(44,060	)		(29,560	)
Purchase and sale of noncontrolling interests		—		—		2,315			—			—			10,541			12,856
Proceeds from noncontrolling interest holders		—		—		—			—			—			3,170			3,170
Step up in basis of joint venture interests		—		—		688			—			—			—			688
Stock-based compensation		—		—		8			—			—			—			8
Distributions		—		—		—			—			—			(2,604	)		(2,604	)

Balance, December 31, 2015		1,059	$	—	$	579,920		$	(1,226,298	)	$	(54,574	)	$	26,322		$	(674,630	)

The accompanying notes are an integral part of the consolidated financial statements.

21^ST CENTURY ONCOLOGY HOLDINGS, INC.

Notes to Consolidated Financial Statements

December 31, 2015

On December 9, 2013, Radiation Therapy Services, Inc., a wholly owned subsidiary of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.) ("Parent"), changed its name to 21^st Century Oncology, Inc. ("21C").

Parent, through its wholly-owned subsidiaries (collectively, the "Company"), is a leading global, physician-led provider of integrated cancer care ("ICC") services. The Company's physicians provide comprehensive, academic quality, cost-effective coordinated care for cancer patients in personal and convenient community settings (its "ICC model"). The Company provides its physicians with the advanced medical technology necessary to achieve optimal outcomes. The Company's provision of care includes a full spectrum of cancer care services by employing and affiliating with physicians in their related specialties. This innovative approach to cancer care through its ICC model enables the Company to collaborate across its physician base, integrate services and payments for related medical needs and disseminate best practices.

The Company operates the largest integrated network of cancer treatment centers and affiliated physicians in the world which, as of December 31, 2015, deployed approximately 947 community-based physicians in the fields of radiation oncology, medical oncology, breast, gynecological and general surgery, urology and primary care. The Company's physicians provide medical services at approximately 375 locations, including our 181 radiation therapy centers, of which 59 operate in partnership with health systems. The Company's cancer treatment centers in the United States are operated predominantly under the 21^st Century Oncology brand and are strategically clustered in 17 states: Alabama, Arizona, California, Florida, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Washington and West Virginia, as well as countries in Latin America, Central America and the Caribbean. The Company's 36 international treatment centers, located in Argentina, Colombia, Costa Rica, the Dominican Republic, Guatemala, El Salvador and Mexico operate under the 21^st Century Oncology brand or a local brand and, in many cases, are operated with local minority partners, including hospitals.

The Company is also engaged in providing capital equipment and business management services to oncology physician groups ("Groups") that treat patients at cancer centers ("Centers"). The Company owns the Centers' assets and provides services to the Groups through exclusive, long-term management services agreements. The Company provides the Groups with oncology business management expertise and new technologies including radiation oncology equipment and related treatment software. Business services that the Company provides to the Groups include non-physician clinical and administrative staff, operations management, purchasing, managed care contract negotiation assistance, reimbursement, billing and collecting, information technology, human resource and payroll, compliance, accounting, and treasury. Under the terms of the management service agreements, the Company is reimbursed for certain operating expenses of each Center and earns a monthly management fee from each Group. The management fees are primarily based on a predetermined percentage of each Group's earnings before interest, income taxes, depreciation, and amortization ("EBITDA") associated with the provision of radiation therapy. The Company manages the radiation oncology business operations of six Groups in California and one Group in Indiana. The Company's management fees range from 50% to 60% of EBITDA, with one Group in California whose fee ranges from 20% to 30% of collections.

Within these financial statements, the Company has included the restated consolidated financial statements for the years ended December 31, 2014 and 2013 as well as the restated unaudited condensed consolidated financial statements for the interim periods in 2015 (see Note 24), which is referred to as the Restatement. The Restatement corrects accounting errors which are discussed in detail within this footnote.

The following is a discussion of the significant adjustments identified during the Restatement.

The Company recognizes revenue in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition ("ASC 605"). Accordingly, the Company recognizes revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. MDL Argentina recognizes revenue at invoicing when it cannot conclude that criteria (ii) or (iii) have been met at an earlier point.

During the fiscal years ended December 31, 2014, 2013, and 2012 MDL Argentina recognized revenue prior to obtaining substantive evidence that the related services had been rendered. As these revenue recognition practices are not in accordance with US GAAP, the Company has restated revenue by deferring revenue recognition on all of its revenue until the services had been rendered which generally occurs upon invoicing (negotiations, as applicable, with the insurance company are also complete at invoicing). Accordingly, Management has determined that, net patient revenue should be recognized at invoicing to the insurer. As a result of the adjustments to the amounts of revenue recognized during each period and certain other account receivable reconciliation issues identified, the receivables recognized during each period were also appropriately adjusted.

The Company has determined that its medical malpractice liabilities and associated recoveries were not appropriately accounted for during the fiscal years ended December 31, 2014, 2013 and prior years in accordance with ASC 954-605, Health Care Entities and ASC 720, Other Expenses. Errors occurred in establishing the Company's medical malpractice liability. The Company's method of calculating the medical malpractice liability was a misapplication of generally accepted accounting principles ("GAAP"), which resulted in adjustments in the restated consolidated financial statements. Specifically, adjustments to medical malpractice liabilities and associated recoveries were required for the following: (1) an actuarial estimate of future case development was required in addition to the case reserves established on a claim by claim basis for open reported claims; (2) the removal of policy limits was required for the actuarial calculation of the liability; (3) certain physicians were excluded from the valuation, for which the Company has a medical malpractice liability risk; and (4) the correction of the classification of the medical malpractice liability between short and long term.

The Company became aware that the core measures required for attestation to the Centers for Medicare and Medicaid Services ("CMS") were not supported with the underlying medical records for the Company's employed physicians. As a result, EHR incentive income was improperly recognized and the matter will be fully disclosed and repayments will be made to CMS. The Company corrected incentive income to properly reflect the amounts earned for the fiscal years ended December 31, 2014, 2013 and prior years.

The Company has recorded tax adjustments to reflect the impacts of the Restatement and to correct errors related to its tax provision including accruals for uncertain tax positions.

The Company also recorded a value added tax liability associated with intercompany charges between affiliates in Latin America.

In addition to the above adjustments the Company has also corrected the presentation of tax matters related to leasing transactions and due diligence related matters.

The Company has also corrected errors for certain accruals and other items, each of which had a corresponding effect to various financial statement line items for the years ended December 31, 2014, 2013 and prior years. See below for a list of correcting adjustments recorded by the Company:

In addition to the restatement of its consolidated financial statements, the Company has also restated the following Notes for the effects of the errors above:

In connection with the Restatement, the Company has reclassified certain amounts in its historical, as reported, consolidated balance sheets, statements of operations and comprehensive loss, cash flows, and changes in equity (deficit) as of and for the years ended December 31, 2014 and 2013, and the quarters ended September 30, June 30 and March 31, 2015 (unaudited), to correct classification errors and conform to its as restated consolidated financial statements. The classification errors alone did not affect its net loss on its historical, as reported, consolidated financial statements. Below is a summary of the classification corrections:

The Company's historical, as reported, consolidated statements of cash flows have been adjusted to conform to these classification errors.

The adjustments required to correct errors in the consolidated financial statements as a result of completing the Restatement are described below.

The table below summarizes the effects of the Restatement adjustments on the Consolidated Balance Sheet as of December 31, 2014 (in thousands):

	As of December 31, 2014

				Adjustments by Category
	Previously Reported			MDL Revenue			Medical Malpractice			Meaningful Use (EHR)			Restatement Tax Impact			Other			Total Adjustments			As Restated
ASSETS
Current assets:
Cash and cash equivalents	$	99,167		$	—		$	—		$	—		$	—		$	(85	)	$	(85	)	$	99,082
Restricted cash		7,051			—			—			—			—			232			232			7,283
Accounts receivable, net		137,807			(19,694	)		—			(1,375	)		—			5,061			(16,008	)		121,799
Prepaid expenses		8,728			—			—			—			—			—			—			8,728
Inventories		4,526			—			—			—			—			(1,364	)		(1,364	)		3,162
Income taxes receivable		—			—			—			—			4,432						4,432			4,432
Deferred income taxes		227			—			—			—			1,544			—			1,544			1,771
Other		7,457			—			68			—			—			766			834			8,291

Total current assets		264,963			(19,694	)		68			(1,375	)		5,976			4,610			(10,415	)		254,548
Equity investments in joint ventures		1,646			—			—			—			—			—			—			1,646
Property and equipment, net		270,757			—			—			—			—			(1,187	)		(1,187	)		269,570
Real estate subject to finance obligation		22,552			—			—			—			—			—			—			22,552
Goodwill		469,596			2,667			3,519			528			—			249			6,963			476,559
Intangible assets, net		81,680			—			—			—			—			(295	)		(295	)		81,385
Other assets		35,530			—			10,483			—			371			800			11,654			47,184

Total assets	$	1,146,724		$	(17,027	)	$	14,070		$	(847	)	$	6,347		$	4,177		$	6,720		$	1,153,444



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	57,635		$	—		$	—		$	—		$	—		$	4,872		$	4,872		$	62,507
Accrued expenses		82,609			—			(2,386	)		5,797			410			2,174			5,995			88,604
Income taxes payable		2,114			—			—			—			(788	)		—			(788	)		1,326
Current portion of long-term debt		26,350			—			—			—			—			—			—			26,350
Current portion of finance obligation		433			—			—			—			—			—			—			433
Other current liabilities		19,687			—			(175	)		—			—			—			(175	)		19,512

Total current liabilities		188,828			—			(2,561	)		5,797			(378	)		7,046			9,904			198,732
Long-term debt, less current portion		940,771			—			—			—			—			—			—			940,771
Finance obligation, less current portion		23,610			—			—			—			—			—			—			23,610
Embedded derivative features of Series A convertible redeemable preferred stock		15,843			—			—			—			—			—			—			15,843
Other long-term liabilities		51,079			—			20,058			—			785			63			20,906			71,985
Deferred income taxes		4,480			—			—			—			489			(135	)		354			4,834

Total liabilities		1,224,611			—			17,497			5,797			896			6,974			31,164			1,255,775
Series A convertible redeemable preferred stock, $0.001 par value, $1,000 stated value, 3,500,000 authorized, 385,000 issued and outstanding at December 31, 2014		328,926			—			—			—			—			(8,929	)		(8,929	)		319,997
Noncontrolling interests—redeemable		49,797			—			—			—			—			(34,524	)		(34,524	)		15,273
Commitments and contingencies
Equity:
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,028 issued and outstanding at December 31, 2014		—			—			—			—			—			—			—			—
Additional paid-in capital		626,001			—			—			—			—			8,929			8,929			634,930
Retained deficit		(1,067,487	)		(22,251	)		(3,427	)		(6,644	)		7,211			1,149			(23,962	)		(1,091,449	)
Accumulated other comprehensive loss, net of tax		(38,690	)		6,212			—			—			(1,760	)		(2,682	)		1,770			(36,920	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(480,176	)		(16,039	)		(3,427	)		(6,644	)		5,451			7,396			(13,263	)		(493,439	)
Noncontrolling interests—nonredeemable		23,566			(988	)		—			—			—			33,260			32,272			55,838

Total deficit		(456,610	)		(17,027	)		(3,427	)		(6,644	)		5,451			40,656			19,009			(437,601	)

Total liabilities and equity	$	1,146,724		$	(17,027	)	$	14,070		$	(847	)	$	6,347		$	4,177		$	6,720		$	1,153,444

The table below summarizes the effects of the Restatement adjustments on the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2014 and 2013 (in thousands):

	Year Ended December 31, 2014

(in thousands):	Previously Reported			MDL Revenue			Medical Malpractice			EHR/ Meaningful Use			Restatement Tax Impact			Other			Total Adjustments			As Restated
Revenues:
Net patient service revenue	$	946,897		$	(8,190	)	$	—		$	—		$	—		$	(219	)	$	(8,409	)	$	938,488
Management fees		67,012			—			—			—			—			—			—			67,012
Other revenue		12,513			—			—			—			—			169			169			12,682

Total revenues		1,026,422			(8,190	)		—			—			—			(50	)		(8,240	)		1,018,182
Expenses:
Salaries and benefits		545,025			—			—			—			—			—			—			545,025
Medical supplies		97,367			—			—			—			—			—			—			97,367
Facility rent expenses		63,048			—			—			—			—			63			63			63,111
Other operating expenses		61,735			—			—			—			—			49			49			61,784
General and administrative expenses		135,257			—			148			—			226			188			562			135,819
Depreciation and amortization		86,701			—			—			—			—			(118	)		(118	)		86,583
Provision for doubtful accounts		18,713			—			—			—			—			540			540			19,253
Interest expense, net		113,279			—			—			—			—			—			—			113,279
Electronic health records incentive income		(2,783	)		—			—			2,690			—			—			2,690			(93	)
Impairment loss		229,526			—			—			—			—			—			—			229,526
Early extinguishment of debt		8,558			—			—			—			—			—			—			8,558
Equity initial public offering expenses		4,905			—			—			—			—			—			—			4,905
Loss on sale leaseback transaction		135			—			—			—			—			—			—			135
Fair value adjustment of earn-out liability		1,627			—			—			—			—			—			—			1,627
Fair value adjustment of embedded derivative		837			—			—			—			—			—			—			837
Loss on the sale/disposal of property and equipment		—			—			—			—			—			119			119			119
Loss on foreign currency transactions		557			—			—			—			—			121			121			678
(Gain) loss on foreign currency derivative contracts		(4	)		—			—			—			—			—			—			(4	)

Total expenses		1,364,483			—			148			2,690			226			962			4,026			1,368,509

Loss before income taxes and equity in net loss of joint ventures		(338,061	)		(8,190	)		(148	)		(2,690	)		(226	)		(1,012	)		(12,266	)		(350,327	)
Income tax expense (benefit)		5,159			—			—			—			(2,778	)		(62	)		(2,840	)		2,319

Loss before equity in net loss of joint ventures		(343,220	)		(8,190	)		(148	)		(2,690	)		2,552			(950	)		(9,426	)		(352,646	)
Equity in net loss of joint ventures, net of tax		—			—			—			—			—			(50	)		(50	)		(50	)

Net loss		(343,220	)		(8,190	)		(148	)		(2,690	)		2,552			(1,000	)		(9,476	)		(352,696	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(6,030	)		171			—			—			—			1,264			1,435			(4,595	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(349,250	)		(8,019	)		(148	)		(2,690	)		2,552			264			(8,041	)		(357,291	)
Other comprehensive loss, net of tax:
Net periodic benefit cost of pension plan		(91	)		—			—			—			—			—			—			(91	)
Unrealized loss on foreign currency translation		(13,514	)		2,708			—			—			(737	)		(555	)		1,416			(12,098	)

Other comprehensive loss		(13,605	)		2,708			—			—			(737	)		(555	)		1,416			(12,189	)

Comprehensive loss:		(356,825	)		(5,482	)		(148	)		(2,690	)		1,815			(1,555	)		(8,060	)		(364,885	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(4,722	)		234			—			—			—			1,264			1,498			(3,224	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(361,547	)	$	(5,248	)	$	(148	)	$	(2,690	)	$	1,815		$	(291	)	$	(6,562	)	$	(368,109	)

	Year Ended December 31, 2013

(in thousands):	Previously Reported			MDL Revenue			Medical Malpractice			EHR/ Meaningful Use			Restatement Tax Impact			Other			Total Adjustments			As Restated
Revenues:
Net patient service revenue	$	715,999		$	(8,597	)	$	—		$	—		$	—		$	214		$	(8,383	)	$	707,616
Management fees		11,139			—			—			—			—			—			—			11,139
Other revenue		9,378			—			—			—			—			790			790			10,168

Total revenues		736,516			(8,597	)		—			—			—			1,004			(7,593	)		728,923
Expenses:
Salaries and benefits		409,352			—			—			—			—			—			—			409,352
Medical supplies		64,640			—			—			—			—			—			—			64,640
Facility rent expenses		45,565			—			—			—			—			—			—			45,565
Other operating expenses		45,629			—			—			—			—			—			—			45,629
General and administrative expenses		106,887			—			255			—			189			64			508			107,395
Depreciation and amortization		65,195			—			—			—			—			(99	)		(99	)		65,096
Provision for doubtful accounts		12,146			—			—			—			—			—			—			12,146
Interest expense, net		86,747			—			—			—			—			—			—			86,747
Electronic health records incentive income		(1,698	)		—			—			1,698			—			—			1,698			—
Loss on sale leaseback transaction		313			—			—			—			—			—			—			313
Fair value adjustment of earn-out liability		130			—			—			—			—			—			—			130
Loss on the sale/disposal of property and equipment		—			—			—			—			—			336			336			336
Gain on the sale of an interest in a joint venture		(1,460	)		—			—			—			—			—			—			(1,460	)
Loss on foreign currency transactions		1,283			—			—			—			—			(145	)		(145	)		1,138
(Gain) loss on foreign currency derivative contracts		467			—			—			—			—			—			—			467

Total expenses		835,196			—			255			1,698			189			156			2,298			837,494

Loss before income taxes and equity in net loss of joint ventures		(98,680	)		(8,597	)		(255	)		(1,698	)		(189	)		848			(9,891	)		(108,571	)
Income tax expense (benefit)		(20,432	)		—			—			—			(2,642	)		6			(2,636	)		(23,068	)

Loss before equity in net loss of joint ventures		(78,248	)		(8,597	)		(255	)		(1,698	)		2,453			842			(7,255	)		(85,503	)
Equity in net loss of joint ventures, net of tax		—			—			—			—			—			(454	)		(454	)		(454	)

Net loss		(78,248	)		(8,597	)		(255	)		(1,698	)		2,453			388			(7,709	)		(85,957	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(1,966	)		128			—			—			—			—			128			(1,838	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(80,214	)		(8,469	)		(255	)		(1,698	)		2,453			388			(7,581	)		(87,795	)
Other comprehensive loss, net of tax:
Unrealized loss on foreign currency translation		(16,242	)		2,141			—			—			(507	)		(1,205	)		429			(15,813	)

Other comprehensive loss		(16,242	)		2,141			—			—			(507	)		(1,205	)		429			(15,813	)

Comprehensive loss:		(94,490	)		(6,456	)		(255	)		(1,698	)		1,946			(817	)		(7,280	)		(101,770	)

Comprehensive income attributable to noncontrolling interests—redeemable and non-redeemable		(653	)		350			—			—			—			—			350			(303	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(95,143	)	$	(6,106	)	$	(255	)	$	(1,698	)	$	1,946		$	(817	)	$	(6,930	)	$	(102,073	)

The Restatement adjustments had an impact on the cash and cash equivalents balances as of December 31, 2014 and 2013 primarily related to the correction of certain cash classified as cash and cash equivalents to restricted cash. The Restatement adjustments affecting the consolidated statement of cash flows for the years ending December 31, 2014 and 2013, are predominantly included in the Company's net loss from operations, offset by non-cash adjustments to net loss and changes in operating assets and liabilities. The significant non-cash adjustments include decreases to depreciation and amortization offset by adjustments to deferred tax assets. Changes in operating assets and liabilities are largely attributable to decreases in accounts receivable and increases to liabilities associated with revenue recognition adjustments. There were no significant adjustments related to cash provided by financing activities.

The table below summarizes the effects of the Restatement adjustments on the Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013 (in thousands):

(in thousands):	2014 As Reported			Adjustments			2014 As Restated

Cash flows from operating activities
Net loss	$	(343,220	)	$	(9,476	)	$	(352,696	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		72,914			(130	)		72,784
Amortization		13,787			12			13,799
Deferred rent expense		711			63			774
Deferred income taxes		(329	)		(454	)		(783	)
Stock-based compensation		106			—			106
Provision for doubtful accounts		18,713			540			19,253
Loss on the sale/disposal of property and equipment		119			—			119
Loss on sale-leaseback transaction		135			—			135
Impairment loss		229,526			—			229,526
Early extinguishment of debt		8,558			—			8,558
Equity initial public offering expenses		4,905			—			4,905
Loss on foreign currency transactions		348			—			348
(Gain) loss on foreign currency derivative contracts		(4	)		—			(4	)
Fair value adjustment of earn-out liability		1,627			—			1,627
Fair value adjustment of embedded derivative		837			—			837
Amortization of debt discount		2,483			—			2,483
Amortization of loan costs		6,277			—			6,277
Equity interest in net loss of joint ventures, net of tax		50			—			50
Distribution received from unconsolidated joint ventures		221			—			221
Pension plan contributions		(1,587	)		—			(1,587	)
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(42,218	)		7,110			(35,108	)
Income taxes payable		(500	)		(2,953	)		(3,453	)
Inventories		(88	)		96			8
Prepaid expenses and other assets		3,339			338			3,677
Accounts payable and other current liabilities		346			168			514
Accrued deferred compensation		1,522			—			1,522
Accrued expenses / other current liabilities		6,054			5,267			11,321

Net cash (used in) provided by operating activities		(15,368	)		581			(14,787	)
Cash flows from investing activities
Purchase of property and equipment		(56,563	)		(96	)		(56,659	)
Acquisition of medical practices		(50,245	)		—			(50,245	)
Restricted cash associated with medical practice acquisitions		(3,283	)		102			(3,181	)
Proceeds from the sale of property and equipment		96			—			96
Loans to employees		(888	)		(338	)		(1,226	)
Contribution of capital to joint venture entities		(620	)		—			(620	)
Proceeds (payment) of foreign currency derivative contracts		26			—			26
Premiums on life insurance policies		(1,265	)		—			(1,265	)
Change in other assets and other liabilities		(765	)		—			(765	)

Net cash used in investing activities		(113,507	)		(332	)		(113,839	)

(in thousands):	2014 As Reported			Adjustments			2014 As Restated

Cash flows from financing activities
Proceeds from issuance of debt (net of original issue discount of $3.4 million)		169,845			—			169,845
Principal repayments of debt		(268,377	)		—			(268,377	)
Repayments of finance obligation		(278	)		—			(278	)
Proceeds from issuance of Series A convertible redeemable preferred stock		325,000			—			325,000
Payments of issue costs related to the issuance of preferred stock		(6,137	)		—			(6,137	)
Proceeds from issuance of noncontrolling interest		1,250			—			1,250
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		259			—			259
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(3,599	)		—			(3,599	)
Payments of costs for equity securities offering		(4,905	)		—			(4,905	)
Payments of loan costs		(2,436	)		—			(2,436	)

Net cash provided by financing activities		210,622			—			210,622

Effect of exchange rate changes on cash and cash equivalents		(42	)					(42	)
Net increase in cash and cash equivalents		81,705			249			81,954
Cash and cash equivalents, beginning of period		17,462			(334	)		17,128

Cash and cash equivalents, end of period	$	99,167		$	(85	)	$	99,082



Supplemental disclosure of cash flow information
Interest paid	$	101,149		$	—		$	101,149

Income taxes paid	$	7,585		$	—		$	7,585

Supplemental disclosure of non-cash transactions
Finance obligation related to real estate projects	$	7,790		$	—		$	7,790

Derecognition of finance obligation related to real estate projects	$	4,119		$	—		$	4,119

Capital lease obligations related to the purchase of equipment	$	17,625		$	—		$	17,625

Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable	$	3,049		$	—		$	3,049

Issuance of notes payable relating to the acquisition of medical practices	$	2,000		$	—		$	2,000

Liability relating to the escrow debt and purchase price of medical practices	$	2,970		$	—		$	2,970

Capital lease obligations related to the acquisition of medical practices	$	47,796		$	—		$	47,796

Earn-out accrual related to the acquisition of medical practices	$	11,052		$	—		$	11,052

Amounts payable to sellers in the purchase of a medical practice	$	249		$	—		$	249

Noncash dividend declared to noncontrolling interest	$	194		$	—		$	194

Accrued dividends on Series A convertible preferred stock	$	23,078		$	(10,395	)	$	12,683

Accretion of redemption value on Series A convertible preferred stock	$	1,991		$	1,466		$	3,457

Noncash contribution of capital by noncontrolling interest holders	$	37		$	—		$	37

(in thousands):	2013 As Reported			Adjustments			2013 As Restated

Cash flows from operating activities
Net loss	$	(78,248	)	$	(7,709	)	$	(85,957	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		55,430			(219	)		55,211
Amortization		9,765			120			9,885
Deferred rent expense		973			—			973
Deferred income taxes		(27,908	)		(209	)		(28,117	)
Stock-based compensation		597			—			597
Provision for doubtful accounts		12,146			—			12,146
Loss on the sale/disposal of property and equipment		336			—			336
Loss on sale leaseback transaction		313			—			313
Gain on the sale of an interest in a joint venture		(1,460	)		—			(1,460	)
Loss on foreign currency transactions		143			—			143
(Gain) loss on foreign currency derivative contracts		467			—			467
Fair value adjustment of earn-out liability		—			130			130
Amortization of debt discount		1,191			—			1,191
Amortization of loan costs		5,595			—			5,595
Equity interest in net loss of joint ventures, net of tax		454			—			454
Distribution received from unconsolidated joint ventures		21			—			21
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(42,570	)		10,031			(32,539	)
Income taxes payable		20			(2,267	)		(2,247	)
Inventories		(102	)		(93	)		(195	)
Prepaid expenses and other assets		3,544			647			4,191
Accounts payable and other current liabilities		29,373			—			29,373
Accrued deferred compensation		1,344			—			1,344
Accrued expenses / other current liabilities		16,999			125			17,124

Net cash (used in) provided by operating activities		(11,577	)		556			(11,021	)
Cash flows from investing activities
Purchase of property and equipment		(40,744	)		93			(40,651	)
Acquisition of medical practices		(68,659	)		(2	)		(68,661	)
Restricted cash associated with medical practice acquisitions		(3,768	)		—			(3,768	)
Proceeds from the sale of equity interest in a joint venture		1,460			—			1,460
Proceeds from the sale of property and equipment		78			—			78
Loans to employees		(212	)		(647	)		(859	)
Contribution of capital to joint venture entities		(992	)		—			(992	)
Purchase of noncontrolling interest—non-redeemable		(1,509	)		—			(1,509	)
Proceeds (payment) of foreign currency derivative contracts		(171	)		—			(171	)
Premiums on life insurance policies		(1,234	)		—			(1,234	)
Change in other assets and other liabilities		(2,212	)		—			(2,212	)

Net cash used in investing activities		(117,963	)		(556	)		(118,519	)

(in thousands):	2013 As Reported			Adjustments			2013 As Restated

Cash flows from financing activities					—
Proceeds from issuance of debt (net of original issue discount of $2.3 million)		306,063			—			306,063
Principal repayments of debt		(171,432	)		—			(171,432	)
Repayments of finance obligation		(182	)		—			(182	)
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		765			—			765
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(2,211	)		—			(2,211	)
Payments of loan costs		(1,359	)		—			(1,359	)

Net cash provided by financing activities		131,644			—			131,644

Effect of exchange rate changes on cash and cash equivalents		(52	)					(52	)
Net increase in cash and cash equivalents		2,052			—			2,052
Cash and cash equivalents, beginning of period		15,410			(334	)		15,076

Cash and cash equivalents, end of period	$	17,462		$	(334	)	$	17,128



Supplemental disclosure of cash flow information
Interest paid	$	78,750		$	—		$	78,750

Income taxes paid	$	9,364		$	—		$	9,364

Supplemental disclosure of non-cash transactions
Finance obligation related to real estate projects	$	7,580		$	—		$	7,580

Derecognition of finance obligation related to real estate projects	$	3,940		$	—		$	3,940

Capital lease obligations related to the purchase of equipment	$	3,054		$	—		$	3,054

Issuance of notes payable relating to the acquisition of medical practices	$	2,097		$	—		$	2,097

Capital lease obligations related to the acquisition of medical practices	$	10,903		$	—		$	10,903

Earn-out accrual related to the acquisition of medical practices	$	7,950		$	—		$	7,950

Costs incurred for professional fees relating to issuance of equity securities	$	1,323		$	—		$	1,323

Noncash dividend declared to noncontrolling interest	$	77		$	—		$	77

Noncash deconsolidation of noncontrolling interest	$	9		$	—		$	9

Noncash contribution of capital by noncontrolling interest holders	$	4,235		$	—		$	4,235

Termination of prepaid services by noncontrolling interest holder	$	2,551		$	—		$	2,551

Issuance of notes payable relating to the earn-out liability in the acquisition of Medical Developers	$	2,679		$	—		$	2,679

Issuance of equity LLC units relating to the earn-out liability in the acquisition of Medical Developers	$	705		$	—		$	705

Issuance of senior secured notes related to the acquisition of medical practices	$	75,000		$	—		$	75,000

Reserve claim liability related to the acquisition of medical practices	$	3,682		$	—		$	3,682

Noncash dividend declared from unconsolidated joint venture	$	150		$	—		$	150

Step up basis in joint venture interest	$	83		$	—		$	83

The Company is highly leveraged. As of December 31, 2015, the Company had approximately $1.1 billion of long-term debt outstanding. The Company has experienced and continues to experience losses from its operations. The Company reported a net loss of approximately $126.8 million, $352.7 million and $86.0 million for the years ended December 31, 2015, 2014, and 2013, respectively.

The Company's high level of debt could have material adverse effects on its business and financial condition. Specifically, the Company's high level of debt could have important consequences, including the following:

At December 31, 2015, the Company had $65.2 million of unrestricted cash and $61.5 million of availability under its revolving credit facility (the "2015 Revolving Credit Facility") after factoring in capacity absorbed by outstanding letters of credit. As of June 30, 2016, the Company was fully drawn under its 2015 Revolving Credit Facility.

Further, subject to certain qualifications, the credit agreement governing our term loan facility (the "2015 Term Facility" and together with the 2015 Revolving Credit Facility, the "2015 Credit Facilities") and the indenture governing our notes (the "Senior Notes Indenture"), each as currently in effect, require us to receive, subject to certain important qualifications set forth therein, (1) no later than September 10, 2016, net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments in an aggregate amount of at least $25.0 million (the "First Capital Event"), (2) no later than November 30, 2016, additional net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments and/or sales of assets (which sale transactions must be deleveraging transaction on a pro forma basis) in an aggregate amount of at least $25.0 million (or a lesser amount such that when combined with the proceeds from the First Capital Event, the total amount is not less than $50.0 million) (the "Second Capital Event") and (3) no later than March 31, 2017, additional net cash proceeds from the issuance or sale of 21C's capital stock or from other equity investments and/or sales of assets (which sale transactions must be deleveraging transactions on a pro forma basis) in an aggregate amount of at least the lesser of (A) $75.0 million (or a lesser amount such that when combined with the proceeds from the First Capital Event and the Second Capital Event, the total amount is not less than $125.0 million), and (B) an amount such that, after giving effect to such issuance or sale of capital stock or other equity investments and/or sales of assets, 21C's cash and cash equivalents plus unused revolving loan commitments equals at least $120.0 million and 21C's

consolidated leverage ratio is not greater than 6.4 to 1.00 (the "Third Capital Event" and together with the First Capital Event and the Second Capital Event, the "Capital Events" and each, a "Capital Event"). We are also required to comply with a minimum liquidity covenant in an amount not less than $40.0 million after the completion of the First Capital Event, to be tested monthly prior to the completion of the Third Capital Event and quarterly thereafter. Our failure to satisfy such requirements could result in an event of default under our 2015 Credit Facilities or Senior Notes Indenture, which could result in the debt thereunder being accelerated. While the Company is pursuing a variety of initiatives to satisfy the requirements of the 2015 Credit Facilities and Senior Notes Indenture, we do not have commitments to obtain the required equity or dispose of assets in place, and we may not be able to maintain the required levels of liquidity. Consequently there is substantial doubt about the Company's ability to continue as a going concern.

The accompanying consolidated financial statements include the accounts of the Company and all subsidiaries and entities controlled by the Company through the Company's direct or indirect ownership of a majority interest and/or exclusive rights granted to the Company as the general partner of such entities. The Company has determined that none of its existing management services agreements with its Groups meet the requirements for consolidation of the Groups under U.S. generally accepted accounting principles. Specifically, the Company does not have an equity ownership interest in any of the Groups. Furthermore, the Company's service agreements specifically do not give the Company "control" of the Groups as the Company does not have exclusive authority over decision making and the Company does not have a financial interest in the Groups. All intercompany accounts and transactions have been eliminated.

The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company has evaluated certain radiation oncology practices in order to determine if they are variable interest entities ("VIEs"). This evaluation resulted in the Company determining that certain of

its radiation oncology practices were potential VIEs. For each of these practices, the Company has evaluated (1) the sufficiency of the fair value of the entity's equity investments at risk to absorb losses, (2) that, as a group, the holders of the equity investments at risk have (a) the direct or indirect ability through voting rights to make decisions about the entity's significant activities, (b) the obligation to absorb the expected losses of the entity and that their obligations are not protected directly or indirectly, and (c) the right to receive the expected residual return of the entity, and (3) substantially all of the entity's activities do not involve or are not conducted on behalf of an investor that has disproportionately fewer voting rights in terms of its obligation to absorb the expected losses or its right to receive expected residual returns of the entity, or both. ASC 810, Consolidation ("ASC 810"), requires a company to consolidate VIEs if the company is the primary beneficiary of the activities of those entities. Certain of the Company's radiation oncology practices are VIEs and the Company has a variable interest in each of these practices through its administrative services agreements. Other of the Company's radiation oncology practices (primarily consisting of partnerships) are VIEs and the Company has a variable interest in each of these practices because the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without the additional subordinated financial support provided by its members.

In accordance with ASC 810, the Company consolidates certain radiation oncology practices where the Company provides administrative services pursuant to long-term management agreements. The noncontrolling interests in these entities represent the interests of the physician owners of the oncology practices in the equity and results of operations of these consolidated entities. The Company, through its variable interests in these practices, has the power to direct the activities of these practices that most significantly impact the entity's economic performance and the Company would absorb a majority of the expected losses of these practices should they occur. Based on these determinations, the Company has consolidated these radiation oncology practices in its consolidated financial statements for all periods presented.

The Company could be obligated, under the terms of the operating agreements governing certain of its joint ventures, upon the occurrence of various fundamental regulatory changes and or upon the occurrence of certain events outside of the Company's control to purchase some or all of the noncontrolling interests related to the Company's consolidated subsidiaries. These repurchase requirements would be triggered by, among other things, regulatory changes prohibiting the existing ownership structure. While the Company is not aware of events that would make the occurrence of such a change probable, regulatory changes are outside the control of the Company. Accordingly, the noncontrolling interests subject to these repurchase provisions have been classified outside of equity on the Company's consolidated balance sheets.

As of December 31, 2015 and 2014, the combined total assets included in the Company's consolidated balance sheets relating to the VIEs were approximately $113.9 million and $114.6 million, respectively.

As of December 31, 2015 and 2014, the Company was the primary beneficiary of, and therefore consolidated, 28 and 27 VIEs, which operate 49 and 45 centers, respectively. Any significant amounts of assets and liabilities related to the consolidated VIEs are identified parenthetically on the accompanying consolidated balance sheets. The assets are owned by, and the liabilities are obligations of the VIEs, not the Company. Only the VIE's assets can be used to settle the liabilities of the VIE.

The assets are used pursuant to operating agreements established by each VIE. The VIEs are not guarantors of the Company's debts. In the states of California, Massachusetts, Michigan, Nevada, New York, North Carolina and Washington, the Company's treatment centers are operated as physician office practices. The Company typically provides technical services to these treatment centers in addition to administrative services. For the years ended December 31, 2015, 2014, and 2013 approximately 14.1%, 14.9% and 18.6% of the Company's net patient service revenue, respectively, was generated by professional corporations with which it has administrative services agreements.

As of December 31, 2015 and 2014, the Company also held equity interests in four and six VIEs, respectively, for which the Company is not the primary beneficiary. Those VIEs consist of partnerships that primarily provide radiation oncology services. The Company is not the primary beneficiary of these VIEs as it does not retain the power and rights in the operations of the entities. The Company's investments in the unconsolidated VIEs are approximately $1.2 million and $1.6 million at December 31, 2015 and 2014, respectively, with ownership interests ranging between 33.3% and 50.1% general partner or equivalent interest. Accordingly, substantially all of these equity investment balances are attributed to the Company's noncontrolling interests in the unconsolidated partnerships. The Company's maximum risk of loss related to the investments in these VIEs is limited to the equity interest.

The Company recognizes revenue in accordance with ASC 605. Accordingly, the Company recognizes revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. MDL Argentina recognizes revenue at invoicing when it cannot conclude that criteria (ii) or (iii) have been met at an earlier point.

Generally with respect to net patient service revenue the above criteria is met when services are provided and revenue is reported at the estimated net realizable amount from patients, third-party payers and others for services rendered. The differences between the Company's established billing rates and governmental fee schedules or third-party payer negotiated rates are accounted for as contractual adjustments, which are deducted from gross charges to arrive at net patient service revenue. The Company must estimate contractual adjustments to prepare its consolidated financial statements. The Medicare and Medicaid regulations and third-party payer contracts under which these contractual adjustments must be calculated are complex and subject to interpretation and adjustment. The Company estimates the contractual adjustments on a payer class basis given its interpretation of the applicable regulations or contract terms. These interpretations sometimes result in payments that differ from the Company's estimates. Additionally, updated regulations and contract renegotiations occur frequently necessitating regular review and assessment of the estimation process by management.

Adjustments to previous reimbursement estimates are accounted for as contractual adjustments and reported in the periods that such adjustments become known. Amounts estimated by management can change by a material amount, due to reviews of billings and contract renegotiations.

For the years ended December 31, 2015, 2014 and 2013, net patient service revenue comprised 92.7%, 92.2% and 97.1%, respectively, of the Company's total revenues. In states where the Company employs radiation oncologists, the Company derives its net patient service revenue through fees earned from the provision of the professional and technical component fees of radiation therapy services. In states where the Company does not employ radiation oncologists, the Company derives administrative services fees principally from administrative services agreements with professional corporations. In accordance with ASC 810, the Company consolidates the operating results of certain of the professional corporations for which the Company provides administrative services into its own operating results.

The Company derives a significant portion of its revenues from Medicare and Medicaid. For the years ended December 31, 2015, 2014 and 2013, approximately 40%, 42% and 45%, respectively, of net patient service revenue related to services rendered under the Medicare and Medicaid programs. In the ordinary course of business, the Company is potentially subject to a review by regulatory agencies concerning the accuracy of billings and sufficiency of supporting documentation of procedures performed. Laws and regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation.

On an annual basis the Company performs a hindsight analysis in reviewing estimates to its contractual adjustments and bad debt allowance. The Company's review of the estimates is based on a full year look-back of actual adjustments taken in the calculation of the contractual and bad debt allowance. Adjustments to revenue related to changes in prior period estimates decreased net patient service revenue for the years ended December 31, 2015 and 2014 by approximately 0.6% and 0.7%, respectively and increased net patient service revenue approximately 0.3% for the year ended December 31, 2013.

In the ordinary course of business, the Company provides services to patients who are financially unable to pay for their care. Accounts written off as charity and indigent care are not recognized in net patient service revenue. The Company's policy is to write-off a patient's account balance upon determining that the patient qualifies under certain charity care and/or indigent care policies. The Company's policy includes the completion of an application for eligibility for charity care. The determination for charity care eligibility is based on income relative to federal poverty guidelines, family size, and assets available to the patient. A sliding scale discount is then applied to the balance due with discounts up to 100%. The Company estimates the costs of charity care services it provides by developing a ratio of foregone charity care charges compared to total charges and applying that ratio to the costs of providing services. Costs of providing services includes select direct and indirect costs such as salaries and benefits, medical supplies, facility rent expenses, other operating expenses, general and administrative expenses, depreciation and amortization, provision for doubtful accounts, and interest expense. The Company's estimated cost to provide charity care services is approximately $15.4 million, $21.1 million and $28.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. Funds received to offset or subsidize charity services provided were approximately $0.1 million, $0.6 million and $1.9 million for the years ended December 31, 2015, 2014 and 2013, respectively.

For the year ended December 31, 2015, approximately 3.3% of the Company's U.S. Domestic net patient service revenue represented revenue pursuant to contracts where the Company bears utilization risk, such as capitation and case rate arrangements.

Management fees are recorded at the amount earned by the Company under the management services agreements. Services rendered by the respective Groups are billed by the Company, as the exclusive billing agent of the Groups, to patients, third-party payers, and others. The Company's management fees are dependent on the EBITDA (or in one case, revenue) of each treatment center. As such, revenues generated by the Groups significantly impact the amount of management fees recognized by the Company. Amounts distributed to the Groups for their services under the terms of the management services agreements totaled $21.4 million, $21.5 million and $3.8 million, for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015 and 2014 amounts payable to the Groups for their services of $2.4 million and $2.7 million, respectively were included in accounts payable. These management fees are as a result of the OnCure acquisition, which closed on October 25, 2013.

Other revenue is primarily comprised of management and technical service fees provided to hospital radiation therapy departments, professional service fees, sublease rental income and billing services provided to non-affiliated physicians.

The cost of revenues for the years ended December 31, 2015, 2014, and 2013 are approximately $791.9 million, $744.3 million and $532.2 million, respectively. The cost of revenues includes costs related to expenses incurred for the delivery of patient care. These costs include salaries and benefits of physicians, physicists, dosimetrists, radiation technicians, etc., medical supplies, facility rent expenses, other operating expenses, depreciation and amortization.

Advertising costs are charged to general and administrative expenses as incurred and amounted to approximately $2.8 million, $3.8 million and $3.9 million, for the years ended December 31, 2015, 2014 and 2013, respectively.

Cash and cash equivalents include highly liquid investments with original maturities of three months or less when purchased. Cash at December 31, 2015 and 2014 held by the Company's foreign operating subsidiaries was $6.0 million and $4.5 million, respectively. The Company considers these cash amounts to be permanently invested in the Company's foreign operating subsidiaries and therefore does not anticipate repatriating any excess cash flows to the U.S. The Company anticipates it can adequately fund its domestic operations from cash flows generated solely from the U.S. business. Of

the $6.0 million of cash held by the Company's foreign operating subsidiaries at December 31, 2015, $1.4 million is held in U.S. dollars, $0.1 million of which is held at financial institutions in the United States, with the remaining held in foreign currencies in foreign banks. The Company believes that the magnitude of its growth opportunities outside of the U.S. will cause the Company to continuously reinvest foreign earnings.

Restricted cash totals approximately $0.2 million and $7.3 million as of December 31, 2015 and 2014, respectively. Restricted cash consists of claim reserve accounts established to address any pre-acquisition claims presented to the Company as they relate to the Company's recent acquisitions, including OnCure Holdings, Inc. (together with its subsidiaries, "OnCure") and SFRO Holdings, LLC (together with its subsidiaries, "SFRO"). Any balance of the claim reserve accounts will be released to sellers, once claims have been settled.

The Company determines the appropriate classification of securities at the time of purchase and reassesses the appropriateness of the classification at each reporting date. The Company's marketable securities are classified as available-for-sale ("AFS"). Investments in marketable securities consist of debt and equity securities. Debt and equity securities designated as AFS are carried at fair value using quoted market prices where available with unrealized gains or losses included in accumulated other comprehensive loss. The Company uses the specific identification method to determine realized gains and losses related to its investment portfolio.

Accounts receivable in the accompanying consolidated balance sheets are reported net of estimated allowances for doubtful accounts and contractual adjustments, as further described previously. Accounts receivable are uncollateralized and primarily consist of amounts due from third-party payers and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for doubtful accounts to reduce the carrying value of such receivables to their estimated net realizable value.

The allowance for doubtful accounts is based upon management's assessment of historical and expected net collections, business and economic conditions, trends in federal and state governmental healthcare coverage, and other collection indicators. The primary tool used in management's assessment is an annual, detailed review of historical collections and write-offs of accounts receivable. The results of the detailed review of historical collections and write-off experience, adjusted for changes in trends and conditions, are used to evaluate the allowance amount for the current period. Accounts receivable are written off after collection efforts have been followed in accordance with the Company's policies.

Adjustments to bad debt expense related to changes in prior period estimates decreased bad debt expense by approximately $2.4 million for the year ended December 31, 2015, increased bad debt expense by approximately $2.3 million for the year ended December 31, 2014 and increased bad debt expense by approximately $1.6 million for the year ended December 31, 2013.

Approximately $26.4 million and $29.8 million of accounts receivable were due from the Medicare and Medicaid programs at December 31, 2015 and 2014, respectively. The credit risk for any other concentrations of receivables is limited due to the large number of insurance companies and other payers that provide payments for services. Management does not believe that there are other significant concentrations of accounts receivable from any particular payer that would subject the Company to any significant credit risk in the collection of its accounts receivable.

Inventories are valued at the lower of cost or market and determined using the first in, first out method.

The Company currently maintains equity interests in 12 treatment center facilities with ownership interests ranging from 50.0% to 90.0%. The Company has determined it controls a majority of the voting interest in these facilities and, therefore consolidates these treatment centers. The noncontrolling interests represent the equity interests of outside investors in the equity and results of operations of these consolidated entities.

In addition, in accordance with ASC 810, Consolidation, the Company consolidates certain radiation oncology practices where the Company provides administrative services pursuant to long-term management agreements. The noncontrolling interests in these entities represent the interests of the physician owners of the oncology practices in the equity and results of operations of these consolidated entities.

Noncontrolling interests represent the income or loss attributable to non-Company ownership interests of consolidated entities.

On January 1, 2009, the Company adopted changes issued by the FASB to the accounting for noncontrolling interests in consolidated financial statements. These changes require, among other items, that a noncontrolling interest be included within equity separate from the parent's equity; consolidated net income be reported at amounts inclusive of both the parent's and noncontrolling interest's shares; and, separately, the amounts of consolidated net income attributable to the parent and noncontrolling interest all be reported on the consolidated statements of operations and comprehensive loss.

Noncontrolling interests—redeemable represent equity securities with redemption features that are not solely within the Company's control and are classified outside of permanent equity. Those securities are initially recorded at their estimated fair value on the date of issuance. Securities that are currently redeemable or redeemable after the passage of time are adjusted to their redemption value as changes occur. In the unlikely event that a redeemable equity security will require redemption, any subsequent adjustments to the initially recorded amount will be recognized in the period that a redemption becomes probable.

Contingent redemption events vary by entity and generally include either the holder's discretion or circumstances jeopardizing: the joint ventures' ability to provide services, the joint ventures' participation in Medicare, Medicaid, or other third party reimbursement programs, the tax-exempt status of minority shareholders, and violation of federal statutes, regulations, ordinances, or guidelines. Amounts required to redeem noncontrolling interests are generally based on either fair value or a multiple of trailing financial performance. These amounts are not limited.

While the Company is not aware of events that would make the occurrence of such a change probable, regulatory changes are outside the control of the Company. Accordingly, the noncontrolling interests subject to these repurchase provisions have been classified outside of equity on the Company's consolidated balance sheets.

Property and equipment are recorded at historical cost less accumulated depreciation and are depreciated over their estimated useful lives utilizing the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the life of the lease. Amortization of leased assets is included in depreciation and amortization in the accompanying consolidated statements of operations and comprehensive loss. Expenditures for repairs and maintenance are charged to operating expense as incurred, while equipment replacement and betterments are capitalized.

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by the Company in business combinations. Goodwill and indefinite life intangible assets are not amortized. The Company tests goodwill for impairment annually, at the beginning of its fourth quarter or more frequently if evidence of possible impairment arises. The Company performs a two-step impairment test on goodwill. In the first step, the Company compares the fair value of the reporting unit, defined as an operating segment or one level below an operating segment, being tested to its carrying value. The reporting units may change over time as the Company's operating segments change, or the component businesses therein change, due to economic conditions, acquisitions, restructuring or otherwise. At the time of these events, the Company reevaluates its reporting units using the reporting unit determination guidelines. As necessary, goodwill is reassigned between the affected reporting units using a relative fair-value approach.

The Company determines the fair value of its reporting units using a combination of the income approach and the market approach. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. Under the market approach, the Company estimates fair value based on what investors have paid for similar interests in comparable companies through the development of ratios of market prices to various earnings indications of comparable companies taking into consideration adjustments for growth prospects, debt levels and overall size. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then the Company records an impairment loss equal to the difference.

The process of evaluating the potential impairment of goodwill is subjective and requires significant estimates and assumptions at many points during the analysis. The Company's estimated future cash flows are based on assumptions that are consistent with its annual planning process and include estimates for revenue and operating margins and future economic and market conditions. Actual future results may differ from those estimates. Changes in assumptions or circumstances could result in an additional impairment in the period in which the change occurs and in future years.

The Company's intangible assets not subject to amortization consist of trade names and certificates of need. The Company tests these assets for impairment annually, at the beginning of its fourth quarter or more frequently if evidence of possible impairment arises. The Company applies a fair value-based

impairment test to the net book value of the assets using a combination of income and market approaches.

The Company tests its long-lived assets and intangible assets subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable. If the undiscounted future cash flows from the asset tested are less than the carrying value, a loss equal to the difference between the carrying value and the fair market value of the asset is recorded. Fair value is determined using discounted cash flow methods.

The Company's analysis requires judgment with respect to many factors, including future cash flows, success at executing its business strategy, and future revenue and expense growth rates. It is possible that the Company's estimates of undiscounted cash flows may change in the future resulting in the need to reassess the carrying value of its long-lived assets and intangible assets subject to amortization for impairment.

The Company recognizes all derivatives in the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship based on its effectiveness in hedging against the exposure. Derivatives that do not meet hedge accounting requirements must be adjusted to fair value through operating results. If the derivative meets hedge accounting requirements, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of assets, liabilities, or firm commitments through operating results or recognized in other comprehensive loss until the hedged item is recognized in operating results. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings.

Foreign currency risk is the risk that fluctuations in foreign exchange rates could impact the Company's results from operations. The Company is exposed to a significant amount of foreign exchange risk, primarily between the U.S. dollar and the Argentine Peso. This exposure relates to the provision of radiation oncology services to patients at the Company's Latin American operations and purchases of goods and services in foreign currencies. As of December 31, 2013, the Company had entered into foreign exchange option contracts to convert a significant portion of the Company's forecasted foreign currency denominated net income into U.S. dollars to limit the adverse impact of a potential weakening Argentine Peso against the U.S. dollar. Under the Company's foreign currency

management program, the Company monitors foreign exchange rates and periodically may enter into forward contracts and other derivative instruments. The Company does not use derivative financial instruments for speculative purposes.

Gains or losses resulting from the fair valuing of these instruments are reported in (gain) loss on forward currency derivative contracts on the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2014 and 2013, the Company incurred a gain of approximately $4,000, and a loss of approximately $0.5 million, respectively, relating to the foreign currency derivative program. The fair value of the foreign currency derivative was recorded in other current assets in the accompanying consolidated balance sheets.

The Company's Series A Preferred Stock contains provisions for contingent events that could trigger the conversion of the Series A Preferred Stock to common stock and require the issuance of warrants to the Canada Pension Plan Investment Board ("CPPIB"). The Company determined that the contingent conversion features qualify as an embedded derivative, requiring bifurcation and classification as a liability, measured at fair value. The Company evaluates the fair value of the embedded derivative and adjusts changes in fair value through the fair value adjustment of embedded derivatives caption in the consolidated statements of operations and comprehensive loss.

The Company's SFRO PIK Notes (as defined in Note 9) provide for accelerated principal payments along with premium payments to the sellers upon achievement of certain operational milestones. The accelerated payment and premium features qualify as an embedded derivative, requiring bifurcation and classification as a liability, measured at fair value. The Company evaluates the fair value of the embedded derivative and adjusts changes in fair value through the fair value adjustment of embedded derivatives caption in the consolidated statements of operations and comprehensive loss.

The Company is subject to claims and legal actions in the ordinary course of business, including claims relating to patient treatment, employment practices, and personal injuries. To cover these types of claims, the Company maintains professional and general liability insurance in excess of self-insured retentions through commercial insurance carriers in amounts that the Company believes to be sufficient for its operations, although, potentially, some claims may exceed the scope of coverage in effect. The Company expenses an estimate of the costs it expects to incur under the self-insured retention exposure for general and professional liability claims. Depending on specialty, the Company generally maintains zero-deductible insurance for certain of its physicians up to $1 million on individual malpractice claims, up to $3 million on aggregate claims or up to $0.25 million on individual malpractice claims, up to $0.75 million on aggregate claims on a claims-made basis. The Company had historically purchased medical malpractice insurance from an insurance company partially owned by a related party and was insured by a related party during 2015. As of December 31, 2015, the Company is insured through an unrelated third party insurance provider. The Company's reserves for professional and general liability

claims are based upon independent actuarial calculations, which consider historical claims data, demographic considerations, severity factors, industry trends, and other actuarial assumptions.

Actuarial calculations include a large number of variables that may significantly impact the estimate of ultimate losses that are recorded during a reporting period. Professional judgment is used by the actuary in determining the loss estimate, by selecting factors that are considered appropriate by the actuary for the Company's specific circumstances. Changes in assumptions used by the Company's actuary with respect to demographics, industry trends, and judgmental selection of factors may impact the Company's recorded reserve levels.

The Company recognizes the unfunded status of its defined benefit pension plan as a liability in its consolidated balance sheets in other long-term liabilities. Each year's actuarial gains or losses are a component of other comprehensive loss, which is then included in accumulated other comprehensive loss. Pension benefit expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. The Company makes significant assumptions (including discount rate, expected rate of return on plan assets, and future increases in compensation) in computing the pension benefit expense and obligations.

Comprehensive loss consists of net loss and other comprehensive loss. Other comprehensive loss refers to revenue, expenses, gains and losses that under accounting principles generally accepted in the United States are recorded as an element of equity but are excluded from net loss. The Company's other comprehensive loss is composed the Company's foreign currency translation of its operations in South America, Central America and the Caribbean and net periodic benefit costs of the SFRO Cash Balance Plan as described in Note 20. The impact of the unrealized net losses decreased total equity on a consolidated basis by approximately $20.0 million, $12.2 million and $15.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Accumulated Other Comprehensive Loss. The components of accumulated other comprehensive loss were as follows (in thousands):

The Company provides for federal, foreign and state income taxes currently payable, as well as for those deferred due to timing differences between reported income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

ASC 740, Income Taxes (ASC 740), clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740, provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

21^st Century Oncology Investments, LLC ("21CI"), the shareholder of 21^st Century Oncology Holdings, Inc., adopted equity-based incentive plans in February 2008 and June 2012, and issued units of limited liability company interests designated Class B Units, Class C Units, Management Equity Plan ("MEP") Class Units and Executive Management Equity Plan ("EMEP") Class Units pursuant to such plans. The Class B Units and Class C Units were modified and replaced under the June 2012 equity

plan with the issuance of the Class MEP Units and Class EMEP Units. The units are available for issuance to the Company's employees and members of the Board of Directors for incentive purposes. For purposes of determining the compensation expense associated with these grants, management valued the business enterprise using a variety of widely accepted valuation techniques, which considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity at grant date. The Company then used the option pricing method to determine the fair value of these units at the time of grant using valuation assumptions consisting of the expected term in which the units will be realized; a risk-free interest rate equal to the U.S. federal treasury bond rate consistent with the term assumption; expected dividend yield, for which there is none; and expected volatility based on the historical data of equity instruments of comparable companies. The Company also uses the probability-weighted expected return method ("PWERM") to determine the fair value of certain units at the time of grant. Under the PWERM, the value of the units is estimated based upon an analysis of future values for the enterprise assuming various future outcomes (exits) as well as the rights of each unit class. In developing assumptions for the various exit scenarios, management considered the Company's ability to achieve certain growth and profitability milestones in order to maximize shareholder value at the time of potential exit. Generally, for Class MEP units awarded, 66.6% vest upon issuance, while the remaining 33.4% vest on the 18 month anniversary of the issuance date. There are no performance conditions for the MEP units to vest. For newly hired individuals after January 1, 2012, vesting occurs at 33.3% in years one and two, and 33.4% in year three of the individual's hire date. Vesting of the Class EMEP units is dependent upon achievement of an implied equity value target. The right to receive proceeds from vested units is dependent upon the occurrence of a qualified sale or liquidation event. The estimated fair value of the units, less an assumed forfeiture rate, is recognized in expense on a straight-line basis over the requisite service periods of the awards for the Class MEP Units and the accelerated attribution method approach is utilized for the Class EMEP Units.

On December 9, 2013, 21CI established new classes of incentive equity units in the form of Class M Units, Class N Units and Class O Units for issuance to employees, officers, directors and other service providers, eliminated 21CI's Class L Units and Class EMEP Units, and modified the distribution entitlements for holders of each existing class of equity units of 21CI.

On October 7, 2015, 21CI authorized two new classes of incentive units of 21CI, Class D and Class E Units, and amended the waterfall distribution provisions. Each recipient of such Class D and/or Class E Units forfeits any and all incentive equity units previously granted to him/her.

21CI in connection with a Company Sale or Public Offering (as defined in the Bonus Plans). Upon the first to occur between a Company Sale and a Public Offering, the following bonus pools will be established:

A participant in a Bonus Plan will participate in the applicable bonus pool based on his or her award percentage.

For purposes of the Bonus Plans, the term "Equity Value" generally refers to: (i) the aggregate fair market value of the cash and non-cash proceeds received by 21CI and its equity holders in connection with the Company Sale, if the applicable liquidity event is a Company Sale, (ii) the aggregate fair market value of 100% of the common stock of the Company on the effective date of such Public Offering, if the applicable liquidity event is a Public Offering.

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Certain assets and liabilities are subject to fair value adjustments only in certain circumstances and measured at fair value on a non-recurring basis.

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

The Company operates in one line of business, operating physician group practices, and its operations are structured into two geographically organized groups: the U.S. Domestic, including 145 radiation treatment centers, and International, including 36 radiation treatment centers. The Company assesses performance of and makes decisions on how to allocate resources to its operating segments based on multiple factors including current and projected facility gross profit and market opportunities. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Transactions between reporting segments are properly eliminated.

In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard allows for either a full retrospective or a modified retrospective transition method. In August 2015, the FASB issued ASU 2015-14 that defers the effective date of ASU 2014-09 for all affected entities. As a result, ASU 2014-09 is effective for the Company beginning January 1, 2018. The Company intends to adopt the new guidance on January 1, 2018 and is currently evaluating the potential impact of this guidance.

performance targets that affect vesting and that could be achieved after the requisite service period be treated as a performance condition and compensation costs related to the performance condition be recognized in the period in which it becomes probable that the performance condition will be achieved. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. The Company prospectively adopted this guidance on January 1, 2015.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40). The new guidance addresses management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (ASU 2015-02). The new guidance intends to reduce the number of consolidation models as well as place more emphasis on risk of loss when determining a controlling financial interest. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. The Company will adopt this guidance on January 1, 2016 and it is not expected to have a material impact on the Company's consolidated financial statements.

In April 2015, FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The new guidance requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. The Company will adopt the new guidance on January 1, 2016. As of December 31, 2015, the Company has recorded approximately $19.8 million of debt issuance costs in other assets that would be reclassified to long-term debt in accordance with the new guidance.

In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The new guidance establishes guidelines for evaluating whether a cloud computing arrangement involves the sale of a software license and the appropriate accounting. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. The Company will adopt the new guidance on January 1, 2016 and it is not expected to have a material impact on the Company's consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The new guidance requires inventories to be valued at the lower of cost or net realizable value. This guidance does not apply to entities using the last in, first out valuation method. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company intends to adopt the new guidance on January 1, 2017 and is currently evaluating the potential impact of this guidance.

In August 2015, FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The new guidance allows debt issuance costs related to line-of-credit arrangements to be recognized as an asset and amortized ratably over the line-of-credit term. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. The Company will adopt the new guidance on January 1, 2016. As of December 31, 2015, the Company has recorded approximately $4.6 million of debt issuance costs in other assets that would be reclassified to long-term debt in accordance with the new guidance.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2015. The Company intends to adopt the new guidance on December 31, 2015.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. Currently deferred taxes for each tax jurisdiction are presented as a net current asset or liability and net noncurrent asset or liability on the balance sheet. To simplify the presentation, the new guidance requires that all deferred tax assets and liabilities for each jurisdiction, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The new guidance becomes effective for public business entities in fiscal years beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard in the fourth quarter of 2015 and has applied the new guidance prospectively. Accordingly the prior balance sheets were not retrospectively adjusted.

In January 2016, the FASB issued ASU 2016-01 Financial Instruments-Overall (Topic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities for the purpose of improving certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Among other things, this guidance requires entities to measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value with changes in fair value recognized in net income and to perform a qualitative assessment to identify impairment for equity investments without readily determinable fair values. Entities are required to apply this guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption and, for the guidance related to equity securities without readily determinable fair values, entities are required to apply a prospective approach to equity investments that exist as of the date of adoption. This guidance will be effective for the Company on January 1, 2018. The Company is currently assessing the impact of this guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02") which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on the consolidated balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018 with early

adoption permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on the consolidated financial statements. The Company is party to approximately 400 real estate leases and expects adoption of ASU 2016-02 to have a material impact to its consolidated balance sheets.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Option in Debt Instruments ("ASU 2016-06") that intends to resolve diversity in practice as it relates to assessing the accounting for contingent put and call options contained in debt instruments. ASU 2016-06 will be effective for annual periods beginning after December 15, 2016 with early adoption permitted. This standard requires a modified retrospective approach upon adoption. The Company intends to adopt this new standard on January 1, 2017 and is currently evaluating the potential impact of this guidance.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") that modifies several aspects of the accounting for share-based transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 will be effective for annual periods beginning after December 15, 2016 with early adoption permitted. This standard requires different adoption methodologies for each aspect adopted. The Company intends to adopt this new standard on January 1, 2017 and is currently evaluating the potential impact of this guidance.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") for the purpose of replacing the current incurred loss impairment methodology with a methodology that reflects expected credit losses. ASU 2016-13 will be effective for annual periods beginning after December 15, 2019 with early adoption permitted in annual periods beginning after December 15, 2018. This standard requires a modified retrospective transition approach upon adoption. The Company intends to adopt this new standard on January 1, 2020 and is currently evaluating the potential impact of this guidance.

The Company classifies all of its investments in marketable securities as available-for-sale. As of December 31, 2015, the Company's marketable securities were invested in foreign government debt instruments. The estimated fair value of investments in marketable securities totaled approximately $1.1 million as of December 31, 2015.

For the years ended December 31, 2015, 2014 and 2013, the Company recorded $76.1 million, $72.8 million and $55.3 million, respectively of depreciation expense, which includes amortization expense relating to capital lease equipment.

The Company leases certain equipment under agreements which are classified as capital leases. These leases have bargain purchase options at the end of the original lease terms. Capital lease assets included in property and equipment are as follows:

The Company completed its annual impairment testing for goodwill and indefinite-lived intangible assets on October 1, 2015. It was determined that the implied fair value of goodwill was greater than the carrying amount, and as a result the Company did not record a noncash impairment charge.

As the Company began to experience liquidity issues after terminating its previously planned initial public offering, it began to have discussions with an ad hoc group of holders of its outstanding debt. On July 29, 2014, the Company entered into a Recapitalization Support Agreement (the "Recapitalization Support Agreement"). The Recapitalization Support Agreement set forth the terms through which the Company expected to either (a) obtain additional liquidity through an equity contribution or subordinated debt incurred in a minimum amount of $150 million on or before October 1, 2014 or (b) consummate a recapitalization consistent with the material terms and conditions described in the term sheet attached to the Recapitalization Support Agreement.

As a result of the liquidity issues described above, the Company performed an interim impairment test for goodwill and indefinite-lived intangible assets. The Company completed the first step of the impairment test as of June 30, 2014 of its two reporting units, Fee for Service and Risk Based, that comprise the U.S. Domestic operating segment and determined that the carrying amount of its Fee for Service reporting unit exceeded its estimated implied fair value, thereby requiring performance of the second step of the impairment test to calculate the amount of the impairment. In accordance with ASC 350, the Company recorded a non-cash impairment loss of approximately $228.3 million related to its Fee for Service reporting unit in the impairment loss caption in the accompanying consolidated statements of operations and comprehensive loss during the year ended December 31, 2014.

The Company completed its annual impairment testing for goodwill and indefinite-lived intangible assets on October 1, 2013. It was determined that the implied fair value of goodwill was greater than the carrying amount, and as a result the Company did not record a noncash impairment charge.

In October 2013, in conjunction with the acquisition of OnCure, the Company changed its internal reporting structure and as a result, aggregated its eight U.S. Domestic reporting units into two U.S. Domestic reporting units. As of December 31, 2013, the Company identified three reporting units: international and two reporting units that comprise the U.S. Domestic operating segment.

	Year Ended December 31,

(in thousands):	2015			2014			2013
Balance, beginning of period: U.S. Domestic Segment
Goodwill	$	1,120,275		$	989,949		$	891,314
Accumulated impairment loss		(700,799	)		(472,520	)		(472,520	)

Net goodwill, beginning of period		419,476			517,429			418,794

Goodwill acquired during the period		30,468			130,735			98,648
Impairment		—			(228,279	)		—
Adjustments to purchase price allocations		(129	)		(409	)		(13	)

Balance, end of period
Goodwill		1,150,614			1,120,275			989,949
Accumulated impairment loss		(700,799	)		(700,799	)		(472,520	)

Net goodwill, end of period: U.S. Domestic Segment	$	449,815		$	419,476		$	517,429



Balance, beginning of period: International Segment
Goodwill	$	57,083		$	62,446		$	70,672

Net goodwill, beginning of period		57,083			62,446			70,672

Goodwill acquired during the period		233			1,680			1,086
Adjustments to purchase price allocations		88			294			—
Foreign currency translation		(8,539	)		(7,337	)		(9,312	)

Balance, end of period
Goodwill		48,865			57,083			62,446

Net goodwill, end of period: International Segment	$	48,865		$	57,083		$	62,446

Amortization expense relating to intangible assets was approximately $12.9 million, $13.8 million and $9.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. The weighted-average amortization period is approximately 7.8 years.

On January 2, 2015, the Company purchased an 80% interest in a legal entity that operates a radiation oncology facility in Kennewick, Washington, for approximately $18.9 million, comprised of approximately $17.6 million in cash and a contingent earn-out payment valued at $1.3 million. The allocation of the purchase price is to tangible assets of approximately $3.0 million, intangible assets of $2.2 million ($1.2 million in non-compete, amortized over 5 years, and $1.0 million in trade name), assumed capital leases of $0.3 million, noncontrolling interest-redeemable of $3.8 million, and goodwill of $17.8 million, which is deductible for tax purposes. The acquisition expands the Company's presence into the state of Washington.

The earn-out is contingent upon achieving certain EBITDA targets measured over three years from the acquisition date and the potential payments range from $0 to approximately $3.4 million. The earn-out was valued using a multiple scenario probability weighted income approach that discounted future earn-out payments under the following scenarios: base case, a no earn-out case, minimum earn-out case and maximum earn-out case. Each scenario forecasted the future EBITDA of the acquired entity and calculated the anticipated earn-out paid for each year. The earn-out payments were discounted to the present value and probability weightings were applied to each scenario to determine the estimated fair value.

On February 10, 2014, the Company purchased a 65% equity interest in SFRO for approximately $65.5 million, subject to working capital and other customary adjustments. The transaction was primarily funded with the proceeds of the Term Loan A and B Facilities as described in Note 13.

The Company accounted for the acquisition of SFRO under ASC 805, Business Combinations. SFRO's results of operations are included in the consolidated financial statements for periods ending after February 10, 2014, the acquisition date.

The acquisition consideration and allocation of the SFRO purchase price was as follows (in thousands):

The Company valued the trade name using the relief from royalty method, a derivation of the income approach that estimates the benefit of owning the trade name rather than paying royalties for the right to use a comparable asset. The Company considered a number of factors to value the trade name, including SFRO's performance projections, royalty rates, discount rates, strength of competition, and income tax rates.

The Company valued the non-compete agreement using the discounted cash flow method, a derivation of the income approach that evaluates the difference in the sum of SFRO's present value of cash flows from two scenarios: (1) with the non-compete in place and (2) without the non-compete in

place. The Company considered various factors in determining the non-compete value including SFRO's performance projections, probability of competition, income tax rates, and discount rates.

The weighted-average amortization period for the acquired amortizable intangible assets at the time of the acquisition was approximately 4.8 years.

Estimated future amortization expense for SFRO's acquired amortizable intangible assets as of the acquisition date is as follows (in thousands):

The Company valued the noncontrolling interest-nonredeemable considering a number of factors such as SFRO's performance projections, cost of capital, and consideration ascribed to applicable discounts for lack of control and marketability.

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill of approximately $129.8 million, representing primarily the value of expanding and strengthening the Company's network on the east coast of Florida. The goodwill is not deductible for tax purposes and is included in the Company's U.S. domestic segment.

During the year ended December 31, 2014, the Company recorded approximately $135.6 million of net patient service revenue and reported a net loss of approximately $1.9 million in connection with the SFRO acquisition.

On July 2, 2015, the Company purchased the remaining 35% of SFRO for approximately $44.1 million, comprised of $15.0 million in cash, $14.6 million payment-in-kind ("PIK") ("SFRO PIK Notes"), and $14.5 million in 21CI preferred stock, which was immediately converted to common stock. The SFRO PIK Notes accrue interest at 10% per annum, which will be accrued quarterly and added to the outstanding principal amount. The SFRO PIK Notes mature on June 30, 2019 and provide for accelerated principal payments along with premium payments to the sellers upon achievement of certain operational milestones.

In June 2013, the Company entered into a "stalking horse" investment agreement to acquire OnCure upon effectiveness of its plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company funded an initial deposit of approximately $5.0 million into an escrow account subject to the working capital adjustments. During the year ended December 31, 2014, the Company received approximately $3.3 million of the escrow account pursuant to a negotiated working capital settlement.

On October 25, 2013, the Company completed the acquisition of OnCure. The transaction was funded through a combination of cash on hand, borrowings from the Company's senior secured credit

facility and the issuance of approximately $82.5 million of Senior Secured Notes, as described in Note 13.

As of the acquisition date, OnCure provided services to a network of 11 physician groups that treat cancer patients at its 33 radiation oncology treatment centers, making it one of the largest strategically located networks of radiation oncology service providers. OnCure's treatment centers are located in California, Florida and Indiana, where it provides the physician groups with the use of the facilities and with certain clinical services of treatment center staff, and administers the non-medical business functions of the treatment centers, such as technical staff recruiting, marketing, managed care contracting, receivables management and compliance, purchasing, information systems, accounting, human resource management and physician succession planning.

The acquisition consideration and allocation of the OnCure purchase price was as follows (in thousands):



*Acquisition Consideration Allocation*
Cash and cash equivalents	$	307
Accounts receivable		10,087
Inventories		200
Deferred income taxes—asset		4,875
Other current assets		1,742
Equity investments in joint ventures		1,625
Property and equipment		22,397
Goodwill		75,228
Intangible assets—management services agreements		57,739
Other noncurrent assets		265
Accounts payable		(4,856	)
Accrued expenses		(3,540	)
Long-term debt		(2,090	)
Other long-term liabilities		(5,828	)
Deferred income taxes—liability		(32,052	)
Noncontrolling interest—nonredeemable		(1,299	)

Acquisition consideration allocation	$	124,800

The Company valued the management services agreements based on the income approach utilizing the excess earnings method. The Company considered a number of factors to value the management services agreements, including OnCure's performance projections, discount rates, strength of competition, and income tax rates. The management services agreements will be amortized on a straight-line basis over the terms of the respective agreements.

The weighted-average amortization period for the acquired amortizable intangible assets at the time of the acquisition was approximately 11.6 years. Total amortization expense recognized for these acquired amortizable intangible assets totaled approximately $0.9 million for the year ended December 31, 2013.

Estimated future amortization expense for OnCure's acquired management services agreements as of December 31, 2013 is as follows (in thousands):

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill of approximately $75.2 million, representing primarily the value of estimated cost savings and synergies expected from the transaction. The goodwill is not deductible for tax purposes and is included in the Company's U.S. domestic segment. During the year ended December 31, 2014, the Company finalized its valuation of assets acquired. The final valuation, combined with the receipt of escrow funds resulted in a decrease in accounts receivable of approximately $2.4 million, an increase in property and equipment of $0.3 million, a decrease in goodwill of $0.4 million, an increase in current liabilities of $0.3 million, and an increase in deferred tax liabilities of $0.4 million.

During the year ended December 31, 2013, the Company recorded approximately $14.6 million of net patient service revenue and reported a net loss of approximately $0.3 million in connection with the OnCure acquisition.

The following unaudited pro forma financial information is presented as if the purchase of OnCure and SFRO had occurred at the beginning of the comparable prior annual reporting periods presented below. The pro forma financial information is not necessarily indicative of what the Company's results of operations actually would have been had the Company completed the acquisition at the dates indicated. In addition, the unaudited pro forma financial information does not purport to project the future operating results of the combined company:

On May 25, 2013, the Company acquired the assets of 5 radiation oncology practices and a urology group located in Lee/Collier counties in Southwest Florida for approximately $19.8 million, comprised of approximately $17.7 million in cash and a seller financing note of approximately $2.1 million. The acquisition of the 5 radiation treatment centers and the urology group further expands the Company's presence in the Southwest Florida market and builds on its integrated cancer care model. The allocation of the purchase price is to tangible assets of approximately $10.4 million, intangible assets including non-compete agreements of $1.9 million amortized over five years, current liabilities of $0.2 million, assumed capital lease obligations of approximately $8.7 million and goodwill of $16.4 million, all of which is deductible for tax purposes.

On August 1, 2015, the Company purchased a controlling 50.7% interest in a radiation oncology facility in Medellin, Colombia for approximately $0.8 million in cash. The allocation of the purchase price is to tangible assets of approximately $2.5 million, intangible assets of $0.7 million, goodwill of $0.2 million, total liabilities of approximately $1.0 million and noncontrolling interest of $1.6 million. The Company valued the noncontrolling interest considering a number of factors such as performance projections, cost of capital, and consideration ascribed to applicable discounts for lack of control and marketability.

On March 26, 2014, the Company purchased a 75% interest in a legal entity that operates a radiation oncology facility in Villa Maria, Argentina for approximately $0.5 million in cash. The allocation of the purchase price is to tangible assets of approximately $0.5 million, intangible assets of $0.2 million, goodwill of $0.5 million, noncontrolling interest-non redeemable of approximately $0.2 million and total liabilities of approximately $0.5 million. The Company valued the noncontrolling interest considering a number of factors such as performance projections, cost of capital, and consideration ascribed to applicable discounts for lack of control and marketability.

On January 15, 2014, the Company purchased 69% interest in a legal entity that operates a radiation oncology facility in Guatemala City, Guatemala for approximately $0.9 million in cash. This facility is strategically located in Guatemala City's medical corridor. The allocation of the purchase price is to tangible assets of approximately $2.8 million, intangible assets of $0.6 million ($0.2 million in hospital contracts, $0.3 million in trade name and $0.1 million in non-compete), goodwill of $1.3 million, assumption of $3.1 million in debt, noncontrolling interest-non redeemable of $0.5 million and deferred tax liabilities of $0.2 million. The Company valued the noncontrolling interest considering a number of factors such as performance projections, cost of capital, and consideration ascribed to applicable discounts for lack of control and marketability.

In July 2013, the Company purchased a legal entity, which operates a radiation treatment center in Tijuana, Mexico for approximately $1.6 million in cash. The acquisition of this operating treatment center expands the Company's international presence.

On December 14, 2015, the Company acquired the assets of a radiation oncology practice it already manages located in Miami, Florida for approximately $6.6 million comprised of approximately $1.1 million in cash and a $5.5 million seller financing note. The preliminary allocation of the purchase price is to tangible assets of approximately $3.5 million, non-compete agreement of $0.1 million, goodwill of $5.5 million and assumed capital lease obligation of $2.5 million. Given the date of the acquisition, the Company has not completed it valuation of acquired assets and assumed liabilities.

On April 1, 2015, the Company entered into an amended outpatient radiation therapy management services agreement with a medical group to expand its management services to a radiation oncology treatment site located in Corbin, Kentucky.

On January 12, 2015, the Company entered into an arrangement to lease the space and equipment and assume responsibility for the operations of the radiation therapy center located in the Good Samaritan Medical Center in West Palm Beach, Florida. The initial term of the lease arrangement is approximately one year with a five year renewal option.

On January 6, 2015, the Company acquired the assets of a radiation oncology practice located in Warwick, Rhode Island for approximately $8.0 million in cash. The allocation of the purchase price is to tangible assets of approximately $0.6 million, intangible assets of $0.9 million ($0.2 million in non-compete, amortized over 5 years, and $0.7 million in an indefinite-lived certificate of need), and goodwill of $6.5 million, which is deductible for tax purposes. The acquisition further expands the Company's presence in Rhode Island.

During 2015, the Company acquired the assets of a radiation oncology practice and an ICC physician practice located in Florida for approximately $0.7 million. The allocation of the purchase price is to tangible assets of approximately $0.2 million, current liabilities of $0.2 million and goodwill of $0.7 million.

During October 2014, the Company entered into a license agreement with the Public Health Trust of Miami-Dade County, Florida to license space and equipment and assume responsibility for the operation of a radiation therapy center located in Miami, Florida, as part of the Company's value added services offering. The license agreement runs for an initial term of five years, with two separate five year renewal options. The Company recorded approximately $1.4 million of tangible assets relating to the use of medical equipment pursuant to the license agreement.

On May 5, 2014, the Company purchased the remaining 50% interest it did not already own in an unconsolidated joint venture which operates a freestanding radiation treatment center in Lauderdale Lakes, Florida for approximately $0.5 million. The allocation of the purchase price is to tangible assets of approximately $0.3 million, accounts receivable of $0.4 million, goodwill of $0.2 million and previously held equity interest of $0.4 million.

On April 21, 2014, the Company acquired the assets of a radiation oncology practice located in Boca Raton, Florida for approximately $0.4 million in cash. The acquisition of the radiation oncology practice further expands the Company's presence in the Broward County market. The allocation of the purchase price is to tangible assets of approximately $3.0 million and non-compete of $0.1 million, and the assumption of $2.7 million in debt.

On January 13, 2014, the Company purchased the membership interest in Quantum Care, LLC for approximately $1.9 million. The purchase of Quantum Care, LLC allows the Company to provide a comprehensive suite of cancer management solutions to insurers, providers, employers and other entities that are financially responsible for the health of defined populations. The allocation of the purchase price is to tangible assets of approximately $1.4 million, intangible assets of $0.1 million, goodwill of $0.6 million and current liabilities of $0.2 million.

During 2014, the Company acquired the assets of several physician practices in Florida for approximately $0.4 million. The physician practices provide synergistic clinical services and an ICC service to its patients in the respective markets in which the Company provides radiation therapy treatment services. The purchase price was allocated, in total, to tangible assets.

On October 30, 2013, the Company acquired the assets of a radiation oncology practice located in Roanoke Rapids, North Carolina for approximately $2.2 million. The acquisition of the radiation oncology practice further expands the Company's presence in the Eastern North Carolina market. The allocation of the purchase price is to tangible assets of approximately $0.3 million, a certificate of need of $0.3 million, and goodwill of $1.6 million.

In July 2013, the Company purchased the remaining 38.0% interest in a joint venture radiation facility, located in Woonsocket, Rhode Island, from a hospital partner, for approximately $1.5 million.

In June 2013, the Company sold its 45% interest in an unconsolidated entity which operated a radiation treatment center in Providence, Rhode Island for approximately $1.5 million.

In June 2013, the Company contributed its Casa Grande, Arizona radiation physician practice, ICC practice and approximately $5.2 million to purchase a 55.0% interest in a joint venture which included an additional radiation physician practice and an expansion of an integrated cancer care model that includes medical oncology, urology and dermatology. The allocation of the purchase price was to tangible assets of approximately $2.2 million, intangible assets including a tradename of $1.8 million, non-compete agreements of $0.4 million amortized over 7 years, goodwill of $5.1 million and noncontrolling interest-redeemable of $4.2 million. For purposes of valuing the noncontrolling interest-redeemable, the Company considered a number of factors such as the joint venture's performance projections, cost of capital, and consideration ascribed to applicable discounts for lack of control and marketability.

The purchase prices of these transactions were allocated to the assets acquired and liabilities assumed based upon their respective fair values. The purchase price allocations for certain recent transactions are subject to revision as the Company obtains additional information. The operations of the foregoing acquisitions have been included in the accompanying consolidated statements of operations and comprehensive loss from the respective dates of acquisition. The following table summarizes the allocations of the aggregate purchase price of the acquisitions, including assumed liabilities.

	Years Ended December 31,

(in thousands):	2015			2014			2013
Fair value of net assets acquired, excluding cash:
Accounts receivable, net	$	488		$	11,267		$	12,497
Inventories		—			45			394
Other current assets		300			2,054			1,896
Deferred tax assets		412			7			4,907
Other noncurrent assets		9			934			1,892
Property and equipment		8,467			28,796			35,615
Intangible assets		3,864			12,468			62,706
Goodwill		30,660			132,300			99,721
Current liabilities		(707	)		(27,729	)		(8,320	)
Long-term debt		(2,731	)		(47,365	)		(10,903	)
Deferred tax liabilities		(437	)		(702	)		(31,656	)
Other noncurrent liabilities		—			(4,367	)		(5,828	)
Previously held equity investment		—			(400	)		—
Noncontrolling interest		(5,366	)		(40,541	)		(5,534	)

	$	34,959		$	66,767		$	157,387

The Company incurred approximately $3.7 million, $10.0 million and $12.6 million of diligence costs relating to acquisitions of physician practices for the years ended December 31, 2015, 2014 and 2013, respectively. These costs are expensed as incurred.

The American Recovery and Reinvestment Act (Recovery Act) of 2009 provides for incentive payments for Medicare eligible professionals who are meaningful users of certified Electronic Health Record ("EHR") technology. The Company accounts for EHR incentive payments utilizing the gain contingency model. Pursuant to the gain contingency model, the Company recognizes EHR incentive payments when the specified meaningful use criteria have been satisfied, as all contingencies in estimating the amount of the incentive payments to be received are resolved.

During the year ended December 31, 2015, management determined that certain electronic healthcare incentive payments were inaccurately submitted to Medicare. The Company recorded an adjustment to correct the electronic health records incentive payments and associated accounts receivable balance for each of the respective years 2012 - 2014 resulting in a cumulative amount due to Medicare of approximately $6.6 million recorded in accrued expenses in the consolidated balance sheets.

As a result of not properly attesting to meaningful use for the 2015 annual period, the Company has accrued approximately $3.5 million in estimated payment adjustments based on 1% of Medicare revenue in 2015. The payment adjustment increases to 2% in 2016 and 1% each subsequent year to a maximum of 5%. In April 2016, the Company refunded Medicare approximately $5.7 million of EHR incentive payments received and the payment adjustment on 2015 Medicare revenue. In July 2016, the Company refunded Medicare an additional $3.1 million of EHR incentive payments received.

During the year ended December 31, 2015, the Company received approximately $7.5 million from the Deepwater Horizon Settlement Program for damages suffered as a result of the Deepwater Horizon Oil Spill that occurred in 2010 which is recorded in the gain on BP settlement caption of the consolidated statements of operations and comprehensive loss.

The Company experienced significant fire related damage to one of its North Carolina treatment centers during 2011, requiring the Company to temporarily close the center. During the year ended December 31, 2015, the Company received approximately $1.7 million of insurance recoveries related to this matter which is recorded in the gain on insurance recoveries caption of the consolidated statements of operations and comprehensive loss.

In addition to the goodwill impairment losses noted in Note 8, the Company recorded an impairment loss of approximately $1.2 million during the third quarter of 2014 relative to the Company's write-off of its 33.6% investment interest in a development stage proton therapy center located in New York ("NY Proton"). As a result of NY Proton's continued operating losses since its inception in 2010 and the Company's liquidity issues experienced during the quarter ended June 30, 2014, the Company provided notice to the consortium that it may not be able to provide the full commitment of approximately $10.0 million to this project. Pursuant to the Subscription Agreement entered into with CPPIB on September 26, 2014, as described in Note 15, the Company was required to use commercially reasonable efforts to transfer and sell its ownership interest to the consortium or to a third party and transfer the general manager role and any future management services fees to the consortium or a third party. On July 15, 2015, the Company transitioned its ownership interest in NY Proton to a third party. The impairment charge is included in the impairment loss caption of the consolidated statements of operations and comprehensive loss.

The Company incurred a loss of approximately $37.4 million from the early extinguishment of debt as a result of the notes offering in April 2015. The Company paid approximately $24.9 million in premium payments for the early retirement of its $350.0 million senior secured second lien notes and $380.1 million senior subordinated notes, along with the tender offer premium payments on the $75.0 million senior secured notes. As a result of the notes offering, the Company wrote-off approximately $3.1 million in original issue discount and $9.4 million in deferred financing costs.

During the third quarter of 2014, the Company incurred a loss of approximately $8.6 million from the early extinguishment of debt as a result of the prepayment of the Term Loan A and B Facilities, MDLLC Credit and Guaranty Agreement, Purchase Money Note Purchase Agreement (each as defined in Note 13), and certain capital leases, which included the write-off of $2.0 million in deferred financing costs, $2.7 million in original issue discount costs, and $3.8 million in prepayment penalties, including $0.3 million paid to Theriac Management Investments, LLC ("Theriac") (a related party real estate entity owned by certain of the Company's directors and officers) pursuant to the Purchase Money Note Purchase Agreement. The early extinguishment of debt charges are included in the early extinguishment of debt caption of the consolidated statements of operations and comprehensive loss.

In March 2014, the Company entered into a sale-leaseback transaction of medical equipment with a financial institution. Proceeds from the sale were approximately $5.7 million. The Company recorded a loss on the sale-leaseback transaction of approximately $0.1 million.

In December 2013, the Company entered into a sale-leaseback transaction for medical equipment with two financial institutions. Proceeds from the sale were approximately $18.4 million. The Company recorded a loss on the sale-leaseback transaction of approximately $0.3 million. These losses are included in the loss on sale-leaseback transaction caption of the consolidated statements of operations and comprehensive loss.

As discussed in Note 9, the Company structured the Kennewick, Washington, SFRO and OnCure acquisitions with contingent consideration. These contingent earn-out arrangements are dependent on each acquiree achieving certain earnings before interest, taxes, depreciation and amortization targets. The Company records the earn-out liabilities at fair value as of the acquisition date and assesses fair value at each reporting date. Changes in the fair value of earn-out liabilities are recorded in the fair value adjustment of earn-out liabilities caption in the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2015, 2014, and 2013, the Company recorded a gain of $1.8 million, expenses of $1.6 million and $0.1 million, respectively, related to changes in the fair value of earn-out liabilities.

In June 2013, the Company sold its 45% interest in an unconsolidated joint venture for approximately $1.5 million. The joint venture operated a radiation treatment center in Providence,

Rhode Island in partnership with a hospital to provide stereotactic radio-surgery through the use of a cyberknife. A respective gain on the sale of $1.5 million is included in the gain on the sale of an interest in a joint venture caption of the consolidated statements of operations and comprehensive loss.

A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate on income before income taxes is as follows:

	Years Ended December 31,

(in thousands):	2015			2014			2013
Federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		0.1			(0.1	)		3.7
Effects of rates different than statutory		0.1			—			(0.5	)
Nondeductible charge for stock-based compensation		—			—			(0.2	)
Nondeductible charge for lobbying and political donations		(1.5	)		(0.1	)		(0.6	)
Goodwill impairment		—			(14.2	)		—
Income from noncontrolling interests		—			0.3			0.2
Valuation allowance increase		(34.8	)		(21.2	)		(14.9	)
Federal and state adjustments		(2.2	)		(0.2	)		(1.0	)
Embedded derivative		5.0			—			—
Uncertain tax positions		(0.2	)		0.5			(0.2	)
Management fee		1.8			—			—
Penalties		(11.2	)		—			—
Other permanent items		(0.3	)		(0.7	)		(0.3	)

Total effective income tax rate		(8.2	)%		(0.7	)%		21.2	%

The Company provides for income taxes using the liability method in accordance with ASC 740, Income Taxes. Deferred income taxes arise from the temporary differences in the recognition of income and expenses for tax purposes. Deferred tax assets and liabilities are comprised of the following at December 31, 2015 and 2014:

(in thousands):	December 31, 2015			December 31, 2014

Deferred income tax assets:
Provision for doubtful accounts	$	13,984		$	11,205
State net operating loss carryforwards		20,625			16,507
Federal net operating loss carryforwards		158,718			118,658
Deferred rent liability		6,543			5,979
Intangible assets—U.S. Domestic		11,495			23,660
Management fee receivable allowance		14,022			11,613
Merger costs and debt financing costs		687			1,305
Contingencies		9,402			—
Partnership interests		—			1,086
Other		14,962			15,595

Gross deferred income tax assets		250,438			205,608
Valuation allowance		(227,052	)		(181,700	)

Net deferred income tax assets		23,386			23,908

Deferred income tax liabilities:
Property and equipment		(20,233	)		(22,320	)
Intangible assets—Foreign		(2,788	)		(3,544	)
Prepaid expense		(769	)		(873	)
Partnership interests		(949	)		—
Other		(646	)		(234	)

Total deferred tax liabilities		(25,385	)		(26,971	)

Net deferred income tax liabilities	$	(1,999	)	$	(3,063	)

ASC 740, Income Taxes, requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. For the year ended December 31, 2013, the Company determined that the valuation allowance should be $96.9 million, consisting of $86.9 million against federal deferred tax assets and $10.0 million against state deferred tax assets. This represented an increase of $14.3 million in valuation allowance. For the year ended December 31, 2014, the Company determined that the valuation allowance should be $181.7 million, consisting of $161.2 million against federal deferred tax assets and $20.5 million against state deferred tax assets. This represented an increase of $84.8 million in valuation allowance. For the year ended December 31, 2015, the Company determined that the valuation allowance should be $227.1 million,

consisting of $201.9 million against federal deferred tax assets and $25.2 million against state deferred tax assets. This represents an increase of $45.4 million in valuation allowance.

The Company has federal net operating loss carryforwards that begin to expire in 2028 available to offset future taxable income of approximately $446.8 million and $336.2 million at December 31, 2015 and 2014, respectively.

The Company has state net operating loss carryforwards, primarily in Florida and Kentucky, that begin to expire in years 2016 through 2036 available to offset future taxable income of approximately $562.3 million, and $447.1 million as of December 31, 2015 and 2014, respectively. Utilization of net operating loss carryforwards in any one year may be limited.

ASC 740, Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a threshold for the recognition and measurement of a tax position taken or expected to be taken on a tax return. Under ASC 740, Income Taxes, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740, Income Taxes, provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Since its adoption for uncertainty in income taxes pursuant to ASC 740, Income Taxes, the Company has recognized interest and penalties accrued related to unrecognized tax exposures in income tax expense. During the year ended December 31, 2015, the Company recognized an expense of approximately $0.2 million in interest and penalties related to unrecognized tax exposures in income tax expense. During the year ended December 31, 2014, the Company recognized a benefit of approximately $1.6 million in interest and penalties related to unrecognized tax exposures in income tax expense. During the year ended December 31, 2013, the Company accrued approximately $0.2 million in interest and penalties related to unrecognized tax exposures in income tax expense. The Company made payments of accrued interest and penalty during the year ended December 31, 2014 of approximately $0.9 million. The Company did not make any payments of interest and penalties accrued during the years ended December 31, 2013 or 2015.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is a follows (in thousands):

The total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate was $0.5 million and $0.4 million at December 31, 2015 and 2014, respectively.

The Company is subject to taxation in the United States, approximately 24 state jurisdictions, the Netherlands, and throughout Latin America, namely, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala and Mexico. However, the principal jurisdictions for which the Company is subject to tax are the United States, Florida and Argentina.

The Company's future effective tax rates could be affected by changes in the relative mix of taxable income and taxable loss jurisdictions, changes in the valuation of deferred tax assets or liabilities, or changes in tax laws or interpretations thereof. The Company monitors the assumptions used in estimating the annual effective tax rate and makes adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating the Company's annual effective tax rates, future income tax expense (benefit) could be materially affected.

The Company has not provided U.S. federal and state deferred taxes on the cumulative earnings of non-U.S. affiliates and associated companies that have been reinvested indefinitely. The aggregate undistributed earnings of the Company's foreign subsidiaries for which no deferred tax liability has been recorded is approximately $1.3 million. It is not practicable to determine the U.S. income tax liability that would be payable if such earnings were not reinvested indefinitely.

The Company is routinely under audit by federal, state or local authorities in the areas of income taxes and other taxes. These audits may include questioning the timing and amount of deductions and compliance with federal, state, and local tax laws. The Company regularly assesses the likelihood of adverse outcomes from these audits to determine the adequacy of the Company's provision for income taxes. To the extent the Company prevails in matters for which accruals have been established or is required to pay amounts in excess of such accruals, the effective tax rate could be materially affected. In accordance with the statute of limitations for federal tax returns, the Company's federal tax returns for the years 2011 through 2014 are subject to examination. During 2014, the Company reached a favorable settlement with the US Internal Revenue Service related to the interest and penalty issues in tax years 2007 and 2008 and various U.S. state and local and foreign jurisdictions related to tax years 2005 through 2012. As a result, the Company released $3.2 million of previously recorded reserves.

During 2015, the statutes expired on the remaining foreign issues and the Company released $0.1 million of previously recorded reserves. No income tax audits were initiated during 2015.

	December 31, 2015			December 31, 2014

$125.0 million Senior Secured Credit Facility—(2015 Revolving Credit Facility)	$	60,000		$	—
$610.0 million Senior Secured Credit Facility—(2015 Term Facility) (net of unamortized debt discount of $5,498 at December 31, 2015)		601,452			—
$360.0 million Senior Notes		360,000			—
$90.0 million Term Facility (net of unamortized debt discount of $1,296 at December 31, 2014)		—			88,704
$380.1 million Senior Subordinated Notes due 2017 (net of unamortized debt discount of $1,643 at December 31, 2014)		—			378,407
$350.0 million Senior Secured Second Lien Notes due 2017 (net of unamortized debt discount of $725 at December 31, 2014)		—			349,275
$75.0 million Senior Secured Notes due 2017		443			75,000
Capital leases payable with various monthly payments plus interest at rates ranging from 1.0% to 19.1%, due at various maturity dates through March 2022		49,854			66,552
SFRO PIK Notes (net of unamortized debt discount of $384 and embedded derivative of $2,876 at December 31, 2015)		12,497			—
Various other notes payable and seller financing promissory notes with various monthly payments plus interest at rates ranging from 8.0% to 19.5%, due at various maturity dates through April 2021		13,247			9,183

		1,097,493			967,121
Less current portion		(1,048,260	)		(26,350	)

	$	49,233		$	940,771

In 2015 all of our senior credit facility and senior notes have been classified as current liabilities due to the non-compliance of certain covenants of these loan agreements as it pertains to the timely reporting of annual and quarterly financial information, the resolution of which is contingent upon the generation of specific net cash proceeds to be received within certain time periods.

Original maturities under the obligations described above assuming no acceleration as of December 31, 2015 are as follows (in thousands):

On April 30, 2015, 21C entered into a Credit Agreement (the "2015 Credit Agreement") among 21C, as borrower, the Company, Morgan Stanley Senior Funding, Inc., as administrative agent (in such capacity, the "2015 Administrative Agent"), collateral agent, issuing bank and swingline lender, the other agents party thereto and the lenders party thereto.

The credit facilities provided under the 2015 Credit Agreement consist of a revolving credit facility providing for up to $125 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit) (the "2015 Revolving Credit Facility") and an initial term loan facility providing for $610 million of term loan commitments (the "2015 Term Facility" and together with the 2015 Revolving Credit Facility, the "2015 Credit Facilities"). 21C may (i) increase the aggregate amount of revolving loans by an amount not to exceed $25 million in the aggregate and (ii) subject to a consolidated secured leverage ratio test, increase the aggregate amount of the term loans or the revolving loans by an unlimited amount or issue pari passu or junior secured loans or notes or unsecured loans or notes in an unlimited amount. The 2015 Revolving Credit Facility matures April 30, 2020 and the 2015 Term Facility matures April 30, 2022.

Borrowings pursuant to the 2015 Credit Agreement are secured on a first priority basis by a perfected security interest in substantially all of the Company's assets.

Loans under the 2015 Revolving Credit Facility are subject to the following interest rates:

The 2015 Credit Agreement contains customary representations and warranties, subject to limitations and exceptions, and customary covenants restricting the ability (subject to various exceptions) of 21C and certain of its subsidiaries to: incur additional indebtedness (including guarantee obligations); incur liens; engage in mergers or other fundamental changes; sell certain property or assets; pay dividends of other distributions; consummate acquisitions; make investments, loans and advances; prepay certain indebtedness, including the Senior Notes; change the nature of the business; engage in certain transactions with affiliates; and incur restrictions on the ability of 21C's subsidiaries to make distributions, advances and asset transfers. In addition, under the 2015 Credit Facilities, 21C is

required to comply with a first lien leverage ratio of 7.50 to 1.00 until March 30, 2018, stepping down to 6.25 to 1.00 thereafter. The first lien leverage ratio is as follows as of December 31, 2015:

The 2015 Credit Facilities contain customary events of default, including with respect to nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty when made; failure to perform or observe covenants; cross default to other material indebtedness; bankruptcy and insolvency events; inability to pay debts; monetary judgment defaults; actual or asserted invalidity or impairment of any definitive loan documentation and a change of control. The obligations of 21C under the 2015 Credit Facilities are guaranteed by the Company and each direct and indirect, domestic subsidiary of 21C, subject to customary exceptions.

On April 15, 2014, the Company obtained a waiver of borrowing conditions due to a default of not providing audited financial statements for the year ended December 31, 2013 within 90 days after year end. The Company paid the administrative agent for the account of the Revolving Lenders a fee equal to 0.125% of such Lender's aggregate commitments. The Senior Revolving Credit Facility provides for a 30 day cure period for the filing of the audited annual consolidated financial statements. The default was cured with the provision of the audited consolidated financial statements to the administrative agent on April 30, 2014.

On June 10, 2016, the Company entered into an amendment and waiver ("Amendment No. 1") to the 2015 Credit Agreement, which waived through July 31, 2016 any default or event of default under the 2015 Credit Agreement for failure to timely provide the audited annual financial statements and related reports and certificates for the year ended December 31, 2015 and quarterly financial statements and related reports and certificates for the quarter ended March 31, 2016 (the "Specified Deliverables").

On August 15, 2016, the Company entered into an amendment and waiver ("Amendment No. 2") to the 2015 Credit Agreement.

On April 30, 2015, 21C completed an offering of $360.0 million aggregate principal amount of 11.00% senior notes due 2023 at an issue price of 100.00% (the "Senior Notes"). The Senior Notes are senior unsecured obligations of 21C and are guaranteed on an unsecured senior basis by the Company and each of 21C's existing and future direct and indirect domestic subsidiaries that is a guarantor (the "Guarantors") under the 2015 Credit Facilities.

21C used the net proceeds from the offering, together with cash on hand and borrowings under the 2015 Credit Facilities, to repay its $90.0 million Term Facility, to redeem its 9⁷/8% Senior Subordinated Notes due 2017 and its 8⁷/8% Senior Secured Second Lien Notes due 2017, to repurchase a portion of the 11³/4% Senior Secured Notes due 2017 issued by OnCure, to pay related fees and expenses and for general corporate purposes. The Company incurred approximately $26.5 million in transaction fees and expenses, including legal, accounting, and other fees associated with the offering. These fees and expenses were recorded as deferred financing costs and included in other long-term assets on the consolidated balance sheets.

The Senior Notes were issued pursuant to an indenture, dated April 30, 2015 (the "Senior Notes Indenture"), among 21C, the Guarantors and Wilmington Trust, National Association, as trustee, governing the Notes.

On July 25, 2016, the Company entered into the second supplemental indenture to the Senior Notes Indenture (the "Second Supplemental Indenture"), providing for a limited waiver through July 31, 2016 of certain defaults or events of default under the Senior Notes Indenture for failure to timely furnish to the trustee and holders of the Senior Notes or file with the SEC the Delayed 10-K or Delayed 10-Q. As consideration for the foregoing, 21C paid to all holders of the Senior Notes an amount representing additional interest on the Senior Notes equal to $2.30 per $1,000 principal amount of the Senior Notes. 21C also paid certain fees and expenses of the advisors to certain holders of the Senior Notes incurred in connection with the Second Supplemental Indenture.

The Third Supplemental Indenture requires 21C to complete each Capital Event as described above and in the same time frame described above.

of the Senior Notes will be entitled to PIK interest at a rate of 0.75% per annum, which rate will increase by an additional 0.75% per annum on the first day of each subsequent month, commencing on September 1, 2016. PIK interest will be paid monthly on the first day of each month, starting on September 1, 2016. PIK interest will stop accruing on the date of completion of the Third Capital Event, and the last PIK interest payment will be made on the first day of the month following such date.

On May 10, 2012, 21C entered into a credit agreement that provided for a $90 million term loan facility (the "Term Facility") due October 2016.

On April 15, 2014, the Company obtained a waiver of borrowing conditions due to a default of not providing audited financial statements for the year ended December 31, 2013 within 90 days after year end. The Company paid the administrative agent for the account of the Term Facility lenders a fee equal to 0.125% of such lender's aggregate commitments, recorded in the interest expense, net caption in the consolidated statements of operations and comprehensive loss. The Term Facility provided for a 30 day cure period for the filing of the audited annual financial statements. The default was cured with the provision of the audited financial statements to the administrative agent on April 30, 2014.

On April 20, 2010, the Company issued $310.0 million in aggregate principal amount of 9⁷/8% senior subordinated notes due 2017 ("Senior Subordinated Notes due 2017") and repaid the existing $175.0 million in aggregate principal amount 13.5% senior subordinated notes due 2015, including accrued and unpaid interest and a call premium of approximately $5.3 million. The remaining proceeds were used to pay down $74.8 million of the Term Loan B and $10.0 million of the Revolver. A portion of the proceeds was placed in a restricted account pending application to finance certain acquisitions, including the acquisitions of a radiation treatment center and physician practices in South Carolina consummated on May 3, 2010. The Company incurred approximately $11.9 million in transaction fees and expenses, including legal, accounting and other fees and expenses associated with the offering, and the initial purchasers' discount of $1.9 million.

In March 2011, 21C, a wholly owned subsidiary of Parent, issued to DDJ Capital Management, LLC, $50 million in aggregate principal amount of 9⁷/8% Senior Subordinated Notes due 2017. The proceeds of $48.5 million were used (i) to fund the Company's acquisition of all of the outstanding membership units of MDLLC and substantially all of the interests of MDLLC's affiliated companies (the "MDLLC Acquisition"), not then controlled by the Company and (ii) to fund transaction costs associated with the MDLLC Acquisition. An additional $16.25 million in Senior Subordinated Notes due 2017 were issued to the seller in the transaction. In August 2013, the Company issued an additional $3.8 million of Senior Subordinated Notes due 2017 to the seller as a component of the MDLLC earn-out amount.

Interest was payable on the Senior Subordinated Notes due 2017 on each April 15 and October 15.

On May 10, 2012, the Company issued $350.0 million in aggregate principal amount of 8⁷/8% Senior Secured Second Lien Notes due 2017 (the "Senior Secured Second Lien Notes").

The Senior Secured Second Lien Notes were issued pursuant to an indenture, dated May 10, 2012 (the "Secured Notes Indenture"), among 21C, the guarantors signatory thereto and Wilmington Trust, National Association. The Senior Secured Second Lien Notes were senior secured second lien obligations of 21C and were guaranteed on a senior secured second lien basis by 21C, and each of 21C's domestic subsidiaries to the extent such guarantor is a guarantor of 21C's obligations under 21Cs' previous revolving credit facility.

Interest was payable on the Senior Secured Second Lien Notes on each May 15 and November 15, commencing November 15, 2012.

21C used the proceeds to repay its existing senior secured revolving credit facility of approximately $63.0 million and the Term Loan B portion of approximately $265.4 million, of its senior secured credit facilities, which were prepaid in their entirety, cancelled and replaced with a new revolving credit facility, and to pay related fees and expenses. Any remaining net proceeds were used for general corporate purposes. 21C incurred approximately $14.4 million in transaction fees and expenses, including legal, accounting and other fees and expenses associated with the offering, and the initial

purchasers' discount of $1.7 million. These fees and expenses were recorded as deferred financing costs and included in other long-term assets on the consolidated balance sheets.

On October 25, 2013, the Company completed the acquisition of OnCure. The transaction included the issuance of $82.5 million in senior secured notes of OnCure, which accrue interest at a rate of 11.75% per annum and mature January 15, 2017, of which $7.5 million is subject to escrow arrangements and will be released to holders upon satisfaction of certain conditions. Interest is payable on the secured notes on each January 15 and July 15, commencing July 15, 2014.

On April 28, 2015, the Company announced that its indirectly wholly owned subsidiary, OnCure, had received, pursuant to its previously announced cash tender offer and related consent solicitation for any and all of its outstanding 11³/4% Senior Secured Notes due 2017 (the "OnCure Notes"), the requisite consents to adopt proposed amendments to the Amended and Restated Indenture, dated as of October 25, 2013 (as otherwise amended, supplemented or modified, the "OnCure Indenture"), by and among OnCure, the guarantors signatory thereto (the "OnCure Guarantors") and Wilmington Trust, National Association, as trustee (in such capacity, the "Trustee") and as collateral agent, under which the OnCure Notes were issued.

As of 5:00 p.m. New York City time, on April 24, 2015 (the "Consent Expiration"), holders of 99.40% of the OnCure Notes (not including any OnCure Notes subject to escrow arrangements) had tendered their OnCure Notes in the tender offer and consented to the proposed amendments to the OnCure Indenture.

In conjunction with receiving the requisite consents, OnCure, the OnCure Guarantors and the Trustee entered into the third supplemental indenture to the OnCure Indenture, dated as of April 28, 2015 (the "Third Supplemental Indenture").

The Third Supplemental Indenture gives effect to the proposed amendments to the OnCure Indenture, which eliminate substantially all the restrictive covenants, certain events of default and certain related provisions contained in the OnCure Indenture. The amendments to the OnCure Indenture became operative upon OnCure's purchase of the OnCure Notes tendered at or prior to the Consent Expiration pursuant to the tender offer.

On July 2, 2015, the Company issued $14.6 million of SFRO PIK Notes to purchase SFRO's noncontrolling interests. The SFRO PIK Notes accrue interest at 10% per annum, which will be accrued quarterly and added to the outstanding principal amount. The SFRO PIK Notes mature on June 30, 2019 and provide for accelerated principal payments along with premium payments to the sellers upon achievement of certain operational milestones.

On May 19, 2014, the Company entered into a Purchase Money Note Purchase Agreement (the "Note Purchase Agreement") with Theriac (a related party real estate entity owned by certain of the

Company's directors and officers). Pursuant to the Note Purchase Agreement, Theriac loaned to the Company, the principal amount of $7.4 million. The Company, and certain of its domestic subsidiaries of the Company, guaranteed the obligations under the note. The note was to mature on June 15, 2015 and is subject to an interest rate payable in cash of 10.75% per annum or by adding the amount of such interest to the aggregate principal amount of outstanding notes at the interest rate of 12.0% per annum. The proceeds from the issuance of the note were used to pay for purchases or improvements of property and equipment or to refinance debt incurred to finance such purchases or improvements.

A portion of the net proceeds from the issuance of the Company's Series A Preferred Stock was used to repay all outstanding borrowings under the Note Purchase Agreement on September 26, 2014.

On July 28, 2014, MDLLC, a Florida limited liability company and indirect wholly owned subsidiary of the Company, certain of its subsidiaries and affiliates, including the Company, entered into a credit and guaranty agreement (the "MDLLC Credit Agreement").

The MDLLC Credit Agreement provided for Tranche A term loans in the aggregate principal amount of $8.5 million and Tranche B term loans in the aggregate principal amount of $9.0 million (collectively, the "MDLLC Term Loans"), for an aggregate principal amount of MDLLC Term Loans of $17.5 million.

The MDLLC Term Loans were subject to interest rates, for any interest period, at a rate equal to 14.0% per annum.

A portion of the net proceeds from the issuance of the Company's Series A Preferred Stock was used to repay all outstanding borrowings under the MDLLC Credit Agreement on September 26, 2014.

On February 10, 2014, 21C East Florida and South Florida Radiation Oncology Coconut Creek, LLC ("Coconut Creek"), a subsidiary of SFRO, as borrowers, entered into a new credit agreement (the "SFRO Credit Agreement"). The SFRO Credit Agreement provides for a $60 million Term B Loan in favor of 21C East Florida ("Term B Loan") and $7.9 million Term A Loan in favor of Coconut Creek issued for purposes of refinancing existing SFRO debt ("Term A Loan" and together with the Term B Loan, the "SFRO Term Loans"). The SFRO Term Loans each have a maturity date of January 15, 2017. The Company incurred approximately $1.0 million in deferred financing costs relating to the SFRO debt.

On July 22, 2014, 21C East Florida and Coconut Creek entered into an amendment (the "SFRO Amendment") to the SFRO Credit Agreement. The SFRO Amendment provided for an incremental $10.35 million term loan (the "Term A-1 Loan") in favor of Coconut Creek issued for purposes of (i) refinancing approximately $5.64 million in existing capitalized lease obligations owing to First Financial Corporate Leasing, including a prepayment premium, (ii) repaying the approximately $2.55 million intercompany loan made by 21C to pay the capitalized lease obligations owing to First Financial Corporate Leasing and (iii) pay fees, costs and expenses of the transactions related to the SFRO Amendment.

The SFRO Term Loans were subject to variable interest rates. In addition, the Term B Loan contained a provision allowing 21C East Florida to elect payment in kind interest payments.

A portion of the net proceeds from the Series A Preferred Stock was used to repay all outstanding borrowings under the Company's South Florida Radiation Oncology Term A, Term A-1, and Term B loans on September 26, 2014.

The consolidated balance sheets as of December 31, 2015 and 2014, include $24.4 million and $12.0 million, respectively, in other long-term assets related to unamortized deferred financing costs. The Company recorded approximately $4.7 million, $6.3 million and $5.6 million to interest expense, net in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2015, 2014 and 2013, respectively, related to the amortization of deferred financing costs.

The Company leases certain of its treatment centers (each, a "facility" and, collectively, the "facilities") and other properties from partnerships which are majority-owned by related parties (each, a "related party lessor" and, collectively, the related party lessors"). The related party lessors construct the facilities in accordance with the Company's plans and specifications and subsequently lease these facilities to the Company. Due to the related party relationship, the Company is considered the owner of these facilities during the construction period pursuant to the provisions of ASC 840-40, Sale-Leaseback Transactions. In accordance with ASC 840-40, the Company records a construction-in-progress asset for these facilities with a corresponding finance obligation during the construction period. Certain related parties guarantee the debt of the related party lessors, which is considered to be "continuing involvement" pursuant to ASC 840-40. Accordingly, these leases do not qualify as a normal sale-leaseback at the time that construction is completed and these facilities are leased to the Company. As a result, the costs to construct the facilities and the related finance obligation remain on the Company's consolidated balance sheets after construction is completed. The construction costs are included in real estate subject to finance obligation in the accompanying consolidated balance sheets. The finance obligation is amortized over the lease term during the construction period based on the payments designated in the lease agreements with a portion of the payment representing a free ground lease recorded in rent expense. The assets classified as real estate subject to finance obligation are amortized on a straight-line basis over their useful lives.

In certain transactions, the related party lessor will purchase a facility during the Company's acquisition of a business and lease the facility to the Company. These transactions also are within the scope of ASC 840-40. Certain related parties guarantee the debt of the related party lessor, which is considered to be continuing involvement pursuant to ASC 840-40. Accordingly, these leases do not qualify as normal sale-leaseback. As a result, the cost of the facility, including land and the related finance obligation are recorded on the Company's consolidated balance sheets. The cost of the facility, including land, is included in real estate subject to finance obligation in the accompanying consolidated balance sheets. The finance obligation is amortized over the lease term based on the payments designated in the lease agreements and the real estate subject to finance obligation is amortized on a straight-line basis over the useful life.

The net book values of real estate subject to finance obligation are summarized as follows:

Depreciation expense relating to real estate subject to finance obligation is classified in depreciation and amortization in the accompanying consolidated statements of operations and comprehensive loss.

Future payments of the finance obligation as of December 31, 2015, are as follows:

Interest expense relating to the finance obligation was approximately $0.8 million, $1.1 million, and $1.1 million for the years ended December 31, 2015, 2014, and 2013, respectively.

On September 26, 2014, the Company entered into a Subscription Agreement (the "Subscription Agreement") with CPPIB. Pursuant to the Subscription Agreement, the Company issued to CPPIB an aggregate of 385,000 newly issued shares of its Series A Preferred Stock ("Preferred Stock"), par value $0.001 per share, stated value $1,000 per share, for a purchase price of $325.0 million.

As set forth in the Certificate of Designations of Series A Preferred Stock (the "Certificate of Designations"), holders of Preferred Stock are entitled to receive, as and if declared by the Board of Directors of the Company, dividends at an applicable rate per annum, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year. During the first three years after issuance, any dividends when and if declared, shall be paid by the Company in the form of additional shares of Preferred Stock. During the first twelve months after issuance, the applicable dividend rate on the Preferred Stock shall be 9.875%, thereafter increasing on a periodic basis up to 26%, as set forth in the Certificate of Designations. Such dividends accrue daily, whether or not declared by the Board of Directors of the Company. After the third anniversary of issuance and only if the Company's outstanding 9⁷/8% senior subordinated notes due 2017 are repaid in full, or upon certain other events of default, dividends shall be paid in cash upon the election of a majority of the holders of Preferred Stock (the "Majority Preferred Holders").

The Preferred Stock is mandatorily convertible into common stock, par value $0.01 per share (the "Common Stock") of the Company upon the occurrence of a qualifying initial public offering of the Company or a qualifying merger. In the case of a qualifying initial public offer, the conversion price is the initial public offering price of the qualifying initial public offer. In the case of a qualifying merger, the conversion price is the price per share of Common Stock pursuant to the qualifying merger. The Preferred Stock also becomes convertible on the tenth anniversary of issuance at the option of either the Company or CPPIB. Absent a qualifying initial public offering or qualifying merger, the conversion price shall be determined upon appraisal. If upon conversion, the Preferred Stock converted to Common Stock represents greater than 29% of the Company's outstanding Common Stock ("Excess Common Stock"), CPPIB has the option to convert amounts in excess of 29% to newly issued preferred stock (the "Excess Preferred Stock"). There is no fixed or maximum number of shares that may be required to be issued to satisfy conversion of the Preferred Stock, or the warrants issuable to CPPIB, other than pursuant to the 29% limitation. Holders of the Excess Preferred Stock are entitled to receive dividends, payable in additional shares of Excess Preferred Stock at 12% per annum. The Excess Preferred Stock becomes mandatorily convertible upon the 15th anniversary of issuance and may be redeemed by the Company at any time at 100% of its stated value. If CPPIB does not elect to receive Excess Preferred Stock, the Company is required to issue a new Class B common stock that will be exchanged for the Excess Common Stock. As long as CPPIB holds the Class B common stock, CPPIB is not entitled to voting rights with respect to the election or removal of directors.

Holders of Preferred Stock also have, among other rights, the right to require the Company to repurchase their shares upon the occurrence of certain events of default and certain change of control transactions, at the prices set forth in the Certificate of Designations. In addition, the Certificate of Designations also provides for certain consent rights of the Majority Preferred Holders in connection with specified corporate events of 21CI or its subsidiaries, including, among other things, with respect to certain equity issuances and certain acquisitions, financing transactions and asset sale transactions. Upon certain events of default and the obtaining of applicable anti-trust regulatory approvals, holders of Preferred Stock are also entitled to vote together with holders of Common Stock, on an as-converted basis. In addition, the Preferred Stock is senior in preference to the Company's Common Stock with respect to dividend rights, rights upon liquidation, winding up or dissolution.

Pursuant to the terms of the Subscription Agreement, immediately following the occurrence of a qualifying initial public offering of the Company, a qualifying merger, or on September 26, 2024 at the option of CPPIB or the Company, the Company will execute and deliver to CPPIB a Warrant Agreement (the "Warrant Agreement") and issue to CPPIB warrants to purchase shares of Common Stock having a then-current value of $30 million, at a purchase price of $0.01 per share. The warrants expire on the tenth anniversary of the date of issuance.

The Company evaluated the contingent events that could trigger the conversion of the Preferred Stock to Common Stock and issuance of warrants and determined that the contingently exercisable warrants are a freestanding financial instrument, and that the contingent conversion features qualify as an embedded derivative, requiring bifurcation and classification as a liability, measured at fair value.

The Company estimated the fair value of the embedded derivative using significant unobservable inputs (Level 3). The primary valuation technique used was comparing the difference between the present value of discounted cash flows, assuming no triggering events occur and the present value of discounted cash flows assuming a triggering event does occur. The assumptions incorporated management's estimates of timing and probability of each triggering event, with those cash flows discounted using rates commensurate with the risks of those cash flows. The Company determined the fair value of the embedded derivative to be approximately $15.0 million as of September 30, 2014.

The Company is accreting the components of the difference between issuance date fair value and redemption value over the period to which each component of that discount relates, generally using the effective interest method, which is reflective of the economics of the instrument.

On January 1, 2015, the Company adjusted the carrying value of the Preferred Stock and adjusted the liability for embedded derivatives and other financial instrument features of Series A convertible redeemable preferred stock by approximately $3.0 million on the accompanying consolidated balance sheets to recognize the warrant rights as a freestanding financial instrument. For the three months ended March 31, 2015, the Company recorded an expense of approximately $0.4 million to reflect the change in the fair value of the embedded derivatives and other financial instrument features of Series A convertible redeemable preferred stock liability. The value of the embedded derivative features and the warrant rights of the Preferred Stock are presented as a noncurrent asset and noncurrent liability, respectively, in the consolidated balance sheets under the caption embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock as of December 31, 2015.

If the Preferred Stock were redeemable as of the balance sheet date, it would be redeemable at its stated value of $385.0 million plus accrued dividends. Accrued dividends as of December 31, 2015 and 2014 were $53.6 million and $10.1 million, respectively.

Additionally, if settled under a repurchase event (which occurs upon a change of control or a default event, as defined in the related agreements), redemption occurs at a premium over the stated value of either 109% or 105% of the stated value, depending on the timing of the repurchase event.

The following table presents changes in total equity for the respective periods (in thousands):

	21st Century Oncology Holdings, Inc. Shareholder's Equity			Noncontrolling interests— nonredeemable			Total Equity			Noncontrolling interests— redeemable

Balance, January 1, 2013	$	(6,279	)	$	15,643		$	9,364		$	11,368
Net (loss) income		(87,795	)		1,964			(85,831	)		(126	)
Other comprehensive loss from foreign currency translation		(14,279	)		(1,505	)		(15,784	)		(29	)
Proceeds from noncontrolling interest holders		—			—			—			765
Deconsolidation of noncontrolling interest		(9	)		9			—			—
Noncash contribution of capital by noncontrolling interest holders		—			—			—			4,235
Issuance of equity LLC units relating to earn-out liability		705			—			705			—
Purchase price fair value of noncontrolling interest—nonredeemable		(2,404	)		2,194			(210	)		—
Termination of prepaid services by noncontrolling interest holder		—			(2,551	)		(2,551	)		—
Step up in basis of joint venture interest		83			—			83			—
Stock-based compensation		597			—			597			—
Distributions		—			(1,974	)		(1,974	)		(314	)

Balance, December 31, 2013	$	(109,381	)	$	13,780		$	(95,601	)	$	15,899
Net (loss) income		(357,291	)		3,300			(353,991	)		1,294
Net periodic benefit cost of pension plan		(91	)		—			(91	)		—
Other comprehensive loss from foreign currency translation		(10,727	)		(1,371	)		(12,098	)		—
Accretion of Series A Preferred Stock to redemption value		(3,457	)		—			(3,457	)		—
Accrued Series A Preferred Stock dividends		(12,683	)		—			(12,683	)		—
Purchase price fair value of noncontrolling interest—nonredeemable		—			40,541			40,541			—
Proceeds from issuance of noncontrolling interest—nonredeemable		85			1,165			1,250			—
Proceeds from noncontrolling interest holders—nonredeemable		—			296			296			—
Stock-based compensation		106			—			106			—
Distributions		—			(1,873	)		(1,873	)		(1,920	)

Balance, December 31, 2014	$	(493,439	)	$	55,838		$	(437,601	)	$	15,273
Net (loss) income		(134,849	)		5,793			(129,056	)		2,214
Net periodic benefit cost of pension plan		(366	)		—			(366	)		—
Other comprehensive loss from foreign currency translation		(17,288	)		(2,356	)		(19,644	)		(39	)
Accretion of Series A Preferred Stock to redemption value		(17,447	)		—			(17,447	)		—
Accrued Series A Preferred Stock dividends		(55,074	)		—			(55,074	)		—
Purchase price fair value of noncontrolling interest		14,500			(44,060	)		(29,560	)		—
Purchase and sale of noncontrolling interests		2,315			10,541			12,856			3,766
Proceeds from noncontrolling interest holders		—			3,170			3,170			686
Step up in basis of joint venture interest		688			—			688			—
Stock-based compensation		8			—			8			—
Distributions		—			(2,604	)		(2,604	)		(2,667	)

Balance, December 31, 2015	$	(700,952	)	$	26,322		$	(674,630	)	$	19,233

The following tables provide information about long-term debt not carried at fair value in accordance with ASC 820. The fair values of the Term Loan Facility due April 30, 2022, the Senior Notes due May 1, 2023 and the 11³/4% Senior Secured Notes due 2017 were based on prices quoted from third-party financial institutions (Level 2). At December 31, 2015, the fair values are as follows:

The fair values of the Term Facility, the Senior Subordinated Notes, Senior Secured Second Lien Notes, and Senior Secured Notes were based on prices quoted from third-party financial institutions (Level 2). At December 31, 2014, the fair values are as follows:

The carrying values of the Company's other long-term debt instruments approximate fair value due to the length of time to maturity and/or the existence of interest rates that approximate prevailing market rates.

As of December 31, 2015 and 2014, the Company held certain items that are required to be measured at fair value on a recurring basis, including the embedded derivative features of its Series A Preferred Stock and SFRO PIK Notes. The primary valuation technique used was comparing the difference between the present value of discounted cash flows, assuming no triggering events occur and the present value of discounted cash flows assuming a triggering event does occur. The assumptions incorporated management's estimates of timing and probability of each triggering event, with those cash flows discounted using rates commensurate with the risks of those cash flows. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship between the directional change of each input is not usually linear.

Earn-out liabilities are generally contingent upon the acquiree achieving certain EBITDA targets. The Company values earn-out liabilities by estimating the timing and amount of potential payments. The estimated payments are discounted to present value and probability weightings are assigned, if applicable.

Cash and cash equivalents are reflected in the consolidated financial statements at carrying value, which approximates fair value due to the short maturity. The carrying value of corporate-owned life insurance is recorded at cash surrender value and, accordingly, approximates fair value.

Marketable securities are reported at fair value using Level 1 techniques and are disclosed in Note 4.

Investments held pursuant to the SFRO Cash Balance Plan, as defined in Note 20, are reported at fair value using Level 1 techniques and are disclosed in Note 20.

Stock compensation and other compensation arrangements are valued using Level 3 techniques and are disclosed in Note 21.

There have been no transfers between levels of valuation hierarchies for the years ended December 31, 2015 and 2014.

The following items are measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820, as of December 31, 2015 and 2014:

The following tables present changes in Level 3 liabilities measured at fair value on a recurring basis:

The Company currently maintains equity interests in four unconsolidated joint ventures, including a 45% interest in a urology surgical facility in Maryland, a 50.0% interest in a radiation oncology facility in Florida, a 33% interest in a radiation facility and a 50% interest in another radiation facility located in South America.

The Company utilizes the equity method to account for its investments in the unconsolidated joint ventures. At December 31, 2015 and 2014, the Company's investments in the unconsolidated joint ventures were approximately $1.2 million and $1.6 million, respectively. The Company's equity in the earnings (losses) of the equity investments in joint ventures was approximately $0.2 million, ($0.1 million) and ($0.5 million) for the years ended December 31, 2015, 2014 and 2013, respectively, which is recorded in other revenue in the accompanying consolidated statements of operations and comprehensive loss.

The condensed financial position and results of operations of the unconsolidated joint venture entities are as follows:

A summary of the changes in the equity investments in joint ventures is as follows:

(in thousands):

Balance at January 1, 2013	$	575
Capital contributions in joint venture		992
Distributions		(171	)
Foreign currency transaction loss		(12	)
Purchase of investment		1,625
Equity interest in net loss of joint ventures		(454	)

Balance at December 31, 2013	$	2,555
Capital contributions in joint venture		620
Distributions		(221	)
Foreign currency transaction loss		(11	)
Impairment loss		(1,247	)
Equity interest in net loss of joint ventures		(50	)

Balance at December 31, 2014	$	1,646
Capital contributions in joint venture		—
Distributions		(602	)
Foreign currency transaction loss		(31	)
Impairment loss		—
Equity interest in net loss of joint ventures		201

Balance at December 31, 2015	$	1,214

As of December 31, 2015, the Company maintains approximately $3.5 million in outstanding letters of credit

The Company is obligated under various operating leases for office space, medical equipment, and an aircraft lease. Total lease expense incurred under these leases was approximately $84.9 million, $79.5 million and $54.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Future fixed minimum annual lease commitments are as follows at December 31, 2015:

The Company leases land and space at its treatment centers under operating lease arrangements expiring in various years through 2051. The majority of the Company's leases provide for either fixed rent escalation clauses, ranging from 1.0% to 6.0%, or escalation clauses tied to the Consumer Price Index. The rent expense for leases containing fixed rent escalation clauses or rent holidays is recognized by the Company on a straight-line basis over the lease term. Leasehold improvements made by a lessee are recorded as leasehold improvements. Leasehold improvements are amortized over the shorter of their estimated useful lives (generally 39 years or less) or the related lease term plus anticipated renewals when there is an economic penalty associated with nonrenewal. An economic penalty is deemed to occur when the Company forgoes an economic benefit, or suffers an economic detriment by not renewing the lease. Penalties include, but are not limited to, impairment of existing leasehold improvements, profitability, location, uniqueness of the property within its particular market, relocation costs, and risks associated with potential competitors utilizing the vacated location. Lease incentives received are recorded as accrued rent and amortized as reductions to lease expense over the lease term.

Financial instruments, which subject the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company maintains its cash in bank accounts with highly rated financial institutions. These accounts may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company grants credit, without collateral, to its patients, most of whom are local residents. Concentrations of credit risk with respect to accounts receivable relate principally to third-party payers, including managed care contracts, whose ability to pay for services rendered is dependent on their financial condition.

The Company operates in a highly regulated and litigious industry. As a result, the Company is involved in disputes, litigation, and regulatory matters incidental to its operations, including governmental investigations, personal injury lawsuits, employment claims, and other matters arising out of the normal conduct of business. Other than as set forth below, the Company does not believe that an adverse decision in any of these matters would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

On February 18, 2014, the Company was served with subpoenas from the Office of Inspector General of the U.S. Department of Health and Human Services (the "OIG") acting with the assistance of the U.S. Attorney's Office for the Middle District of Florida, who together requested the production of medical records of patients treated by certain of the Company's physicians for the period from January 2007 up through the date of production of documents responsive to the February 18, 2014 subpoena, regarding the ordering, billing and medical necessity of certain laboratory services as part of a civil False Claims Act investigation, as well as the Company's agreements with such physicians. The laboratory services under review related to the utilization of fluorescence in situ hybridization ("FISH") laboratory tests ordered by certain physicians employed by the Company during the relevant time period and performed by the Company. The Company was served with another subpoena from the OIG on January 22, 2015, requesting additional documents related to the matter.

On December 16, 2015, 21st Century Oncology, LLC ("21C LLC"), a subsidiary of the Company, entered into a settlement agreement (the "Settlement Agreement") with the federal government, among others. Pursuant to the Settlement Agreement, 21C LLC agreed to pay $19.75 million to the federal government and approximately $0.5 million in attorneys' fees and costs related to a qui tam action relating to the FISH laboratory tests. Subject to certain conditions, the federal government agreed to release the Company from any civil or administrative monetary claim the federal government has with respect to the conduct covered by the Settlement Agreement under the False Claims Act and certain other statutes and legal theories. The Settlement Agreement did not constitute an admission of liability by the Company.

In connection with the Settlement Agreement, on December 16, 2015, 21C LLC entered into a five-year Corporate Integrity Agreement ("CIA") with the Office of Inspector General ("OIG") and agreed to maintain its compliance program in accordance with that CIA. Violations of the CIA could subject the Company to substantial monetary penalties or result in exclusion from participation in federal healthcare programs. On March 2, 2016, 21C LLC entered into an amendment to the CIA to include conducting training and audits related to GAMMA billing (discussed further below). The compliance measures and reporting and auditing requirements contained in the CIA include:

The Company received two Civil Investigative Demands ("CIDs"), one on October 22, 2014 addressed to 21C and one on October 31, 2014 addressed to SFRO, from the U.S. Department of Justice ("DOJ") pursuant to the False Claims Act. The CIDs requested information concerning allegations that the Company knowingly billed for services that were not medically necessary and focused on clinical training in new facility locations for a radiation dose calculation system used by radiation oncologists called GAMMA. The CIDs covered a period going back to January 1, 2009.

On November 13, 2015, the Company advised by the Federal Bureau of Investigation (the "FBI") that patient information was illegally obtained by an unauthorized third party who may have gained access to a company database. The Company immediately hired a leading forensic firm to support its investigation, assess its system and bolster its security. Based on its investigation, the Company

determined that the intruder may have accessed the database on October 3, 2015. The Company notified approximately 2.2 million current and former patients that certain information may have been copied and transferred.

Following the data breach, the Company received notice that class action complaints had been filed against the Company and certain of its affiliates in Florida and California. The complaints allege, among other things, that the Company failed to take the necessary security precautions to protect patient information and prevent the data breach. The Company expects certain, if not all, of the claims to be consolidated to the extent permitted by the courts. Because of the early stages of these matters and the uncertainties of litigation, the Company cannot predict the ultimate resolution of these matters or estimate the amounts of, or ranges of, potential loss, if any, with respect to these proceedings.

The Company has a self-insurance program for workers' compensation benefits for employees. Self-insurance reserves are based on past claims experience and projected losses for incurred claims and include an estimate of costs for claims incurred but not reported at the balance sheet date. The Company obtains an independent actuarial valuation of the estimated costs of workers' compensation claims reported but not settled, and claims incurred but not reported and may adjust the reserves based on the results of the valuations. The Company maintains insurance for individual claims exceeding specified amounts. As of December 31, 2015 and 2014, the Company recorded $1.0 million and $0.5 million, respectively, of workers' compensation liabilities and recorded $0.3 million and $0.0 million, respectively, of estimated recoveries.

The Company has a self-insurance program for employer provided health insurance. Self-insurance reserves are based on past claims experience and projected losses for incurred claims and include an estimate of costs for claims incurred but not reported at the balance sheet date. The Company maintains insurance for individual claims exceeding specified amounts. As of December 31, 2015 and 2014, the Company recorded $2.1 million and $1.4 million, respectively, of employer provided health insurance liabilities in the accrued expenses caption of the consolidated balance sheets.

The Company maintains professional liability insurance on a claims-made basis. Estimated losses resulting from professional liability claims consist of estimates for known claims, as well as estimates for

incurred but not reported claims. The estimates are based on specific claim facts, historical claim reporting and payment patterns, physician specialty and actuarially determined projections. The actuarially determined projections are based on the Company's actual claim data. The Company also records a receivable for expected recoveries of professional liability claims.

The Company's estimates for professional liability claims and recoveries are as follows:

The Company has acquired and plans to continue acquiring businesses with prior operating histories. Acquired companies may have unknown or contingent liabilities, including liabilities for failure to comply with health care laws and regulations, such as billing and reimbursement, fraud and abuse and similar anti-referral laws. Although the Company institutes policies designed to conform practices to its standards following completion of acquisitions, there can be no assurance that the Company will not become liable for past activities that may later be asserted to be improper by private plaintiffs or government agencies. Although the Company generally seeks to obtain indemnification from prospective sellers covering such matters, there can be no assurance that any such matter will be covered by indemnification, or if covered, that such indemnification will be adequate to cover potential losses and fines.

As of December 31, 2015, the Company has agreed to purchase medical equipment and software upgrades for approximately $41.6 million. The Company has made payments on these commitments totaling $0.3 million as of the December 31, 2015. The Company is obligated to purchase certain of this medical equipment during 2016 totaling $10.7 million.

The Company is party to employment agreements with several of its employees that provide for annual base salaries, targeted bonus levels, severance pay under certain conditions, and certain other benefits.

The Company provides for indemnification of directors, officers and other persons in accordance with limited liability agreements, certificates of incorporation, bylaws, articles of association or similar organizational documents, as the case may be. The Company maintains directors' and officers' insurance which should enable the Company to recover a portion of any indemnity payments made.

In addition to the above, from time to time the Company may provide standard representations and warranties to counterparties in contracts in connection with business dispositions and acquisitions and also provides indemnities that protect the counterparties to these contracts in the event they suffer damages as a result of a breach of such representations and warranties or in certain other circumstances relating to such sales or acquisitions.

While the Company's future obligations under certain agreements may contain limitations on liability for indemnification, other agreements do not contain such limitations and under such agreements it is not possible to predict the maximum potential amount of future payments due to the conditional nature of the Company's obligations and the unique facts and circumstances involved in each particular agreement. Historically, no payments have been made under any of these indemnities.

The Company has a defined contribution retirement plan under Section 401(a) of the Internal Revenue Code (the Retirement Plan). The Retirement Plan allows all full-time employees after one year of service to defer a portion of their compensation on a pretax basis through contributions to the Retirement Plan. The Company provides for a discretionary match based on a percentage of the employee's annual contribution. At December 31, 2015 and 2014, the Company accrued approximately $0.0 million and $3.6 million, which represents a 0.0% and 2.0% employer match, respectively related to the Company's approved discretionary match.

The Company has a company owned life insurance ("COLI") compensation plan whereby certain key employees, physicians and executives may defer a portion of their compensation. Participants earn a return on their deferred compensation based on their allocation of their account balance among mutual funds. Participants are able to elect the payment of benefits on a specified date or upon retirement. Distributions are made in the form of lump sum or in installments elected by the participant. Investments in company owned life insurance policies were made with the intention of utilizing them as a long-term funding source for the deferred compensation plan. The policies are

recorded at their net cash surrender values. As of December 31, 2015 and 2014, investments and obligations of the COLI plan are as follows:

In connection with the Company's acquisition of SFRO on February 10, 2014, the Company assumed SFRO's qualified, multi-employer, non-contributory, cash balance defined benefit pension plan (the "SFRO Cash Balance Plan"). The SFRO Cash Balance Plan covers certain employees who meet age, employee classification, and length-of-service requirements. The SFRO Cash Balance Plan provides benefits based on years of service and average earnings of the participant. Participants in the SFRO Cash Balance Plan are fully vested after three years of service. The Company's funding policy is to contribute amounts to the SFRO Cash Balance Plan sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended.

The following table sets forth the changes in projected benefit obligation and fair value of plan assets for the SFRO Cash Balance Plan:

As of December 31, 2015 and 2014, the funded status of the SFRO Cash Balance Plan is recorded in other long-term liabilities in the consolidated balance sheets.

The components of net periodic benefit cost for the SFRO Cash Balance Plan are as follows:

The following table sets forth the amounts in accumulated other comprehensive loss on the Company's consolidated balance sheets that have not been recognized as components of net periodic benefit cost:

The following tables set forth the fair value of total plan assets by major asset category as of the dates indicated:

All plan assets were valued using the Level 1 methodology, as further described in Note 17.

The Company invests plan assets based on a total return on investment approach, pursuant to which the plan assets include a blend of equity and fixed income investments toward a goal of maximizing the long-term rate of return without assuming an unreasonable level of investment risk. The Company determines the level of risk based on an analysis of plan liabilities, the extent to which the value of the plan assets satisfies the plan liabilities and the Company's financial condition. The Company's investment policy includes target allocations ranging from 40% to 80% for equity investments, 20% to 60% for fixed income investments and 0% to 10% for cash equivalents. Actual

asset allocations may vary from the targeted allocations for various reasons, including market conditions and the timing of transactions. The equity portion of the plan assets represents growth and value stocks of small, medium and large companies. We measure and monitor the investment risk of the plan assets both on a quarterly basis and annually when we assess plan liabilities.

In developing the expected long-term rate of return on assets, management evaluated input from an external consulting firm, including their projection of asset class return expectations and long-term inflation assumptions. The Company also considered historical returns on the plans' assets. Discount rates are based on yields available on high-quality corporate bonds that would generate cash flows necessary to pay the benefits when due.

The weighted average assumptions used to determine net periodic pension benefit cost are as follows:

The following table sets forth the benefit payments that the Company expects to pay from the Cash Balance Plan (in thousands):

The Company paid approximately $1.8 million to the SFRO Cash Balance Plan during the year ended December 31, 2015 and expects to contribute approximately $1.8 million to the SFRO Cash Balance Plan in 2016.

Effective as of June 11, 2012, 21CI entered into the Third Amended and Restated Limited Liability Company Agreement (the "Amended LLC Agreement"). The Amended LLC Agreement provided for the cancellation of 21CI's existing Class B and Class C incentive equity units and established new classes of equity units (such new units, the "2012 Plan") in 21CI in the form of Class MEP Units, Class EMEP Units, Class L Units and Class G Units for issuance to employees, officers, directors and other service providers, establishes new distribution entitlements related thereto, and modifies the distribution entitlements for holders of Preferred Units and Class A Units of 21CI. In addition to the Preferred Units and Class A Units of 21CI, the Amended LLC Agreement authorized

for issuance under the 2012 Plan 1,100,200 units of limited liability company interests consisting of 1,000,000 Class MEP Units, 100,000 Class EMEP Units, 100 Class L Units, and 100 Class G Units. As of December 31, 2015, there were 673,727 Class MEP Units available for future issuance under the 2012 Plan. The Amended LLC Agreement also provides that any forfeited or repurchased Class EMEP Units may be reallocated by Dr. Daniel Dosoretz, in his sole discretion, for so long as he is Chief Executive Officer of the Company.

Generally, for Class MEP Units awarded, 66.6% vest upon issuance, while the remaining 33.4% vest 18 months after the issuance date. For individuals hired after January 1, 2012, vesting occurs on a straight-line basis over a three year period from the individual's hire date. In the event of a sale or public offering of the Company prior to termination of employment, all unvested Class MEP units would vest upon consummation of the transaction. The Class MEP Units are eligible to receive distributions only upon a return of all capital invested in 21CI, plus the amounts to which the Class EMEP Units are entitled to receive under the Amended LLC Agreements which effectively creates a market condition that is reflected in the value of the Class MEP Units. Because vesting of Class MEP Units is dependent on service, performance, and market conditions, the Company recognizes compensation expense using the tranche-by-tranche method.

The Class MEP Units were issued prior to the FASB's issuance of ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which the Company early adopted in 2015. ASU 2014-02 amended ASC 718 to resolve diversity in practice in how performance targets that can be achieved after an employee completes the requisite service period. ASU 2014-12 clarified that a performance target (such as a sale or public offering) that affects vesting and could be achieved after an employee's requisite service period should be accounted for as a performance condition. ASU 2014-12 allowed companies to choose to apply its provisions either prospectively to new awards issued after adoption or retrospectively to awards issued and outstanding as of the adoption date. The Company has elected to adopt the amended provisions of ASC 718 for the year ended December 31, 2015 prospectively. Therefore, the Company did not change its method of accounting for the Class MEP Units.

Vesting of the Class EMEP Units is dependent upon achievement of an implied equity value target. The right to receive proceeds from vested units is dependent upon the occurrence of a qualified sale or liquidation event. Specifically, the percentage of Class EMEP Units that vests is based on the implied value of the Company's equity, to be measured quarterly beginning December 31, 2012. An allocated portion of the awards will be eligible for vesting if the "implied equity value" exceeds a predetermined threshold, with the remaining incremental portion eligible if the implied value exceeds several higher thresholds for at least two consecutive quarters. The implied equity value per the Amended LLC Agreement is a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization) as defined in the Amended LLC Agreement. As with the Class MEP Units, the values of the Class EMEP Units are subject to a market condition in the form of the return on investment target for the Company's equity sponsor's interest.

In May 2014, 10 Class G Units were granted to an employee. The Class G Units vest entirely upon the sale of the Company or an initial public offering. As of December 31, 2015, there was approximately $1.5 million of total unrecognized compensation expense related to the Class G Units.

On December 9, 2013, 21CI entered into a Fourth Amended and Restated Limited Liability Company Agreement (the "Fourth Amended LLC Agreement") which replaced the Third Amended LLC Agreement in its entirety. The Fourth Amended LLC Agreement established new classes of incentive equity units in 21CI in the form of Class M Units, Class N Units and Class O Units for issuance to employees, officers, directors and other service providers, eliminated 21CI's Class L Units and Class EMEP Units, and modified the distribution entitlements for holders of each existing class of equity units of 21CI. There was no direct correlation between the number of Class M and Class O Units granted and the number of Class EMEP and Class L Units replaced. Since the Class L Units vested at issuance and were recorded as compensation expense at the grant date fair value, the incremental fair value of the new Class M and Class O Units over the fair value of the replaced Class EMEP and Class L Units was then recorded as additional compensation expense. The Company determined that the replaced Class EMEP Units were not probable of vesting and the new Class M and O Units were also not probable of vesting. As such, any incremental value of the Class M and O Units above the value of the Class EMEP Units would have been recognized only when vesting of the replacement awards became probable of occurring.

In December 2013, 100,000 Class M and 100,000 Class O Units were granted and allocated between two employees. 100% of the units fully vested upon grant per the incentive unit grant agreements. However, in the event of a sale of the Company or an initial public offering, holders of the Class M and Class O Units have certain rights to receive shares of restricted common stock of the Company in exchange for their units. Therefore, compensation will be recognized upon the sale of the Company or an initial public offering. As of December 31, 2015, there was approximately $245,000 of total unrecognized compensation expense related to the Class M and Class O Units.

In December 2013, 10 Class N Units were granted to an employee. Upon an initial public offering, 50% of the Class N Units vest with the remaining 50% vesting over the five years subsequent to the offering. Upon a Company sale, 100% of the Class N Units vest. As of December 31, 2015, there was approximately $6,000 of total unrecognized compensation expense related to the Class N Units.

In 2014, 21CI entered into the Fifth Amended and Restated Limited Liability Company Agreement to issue up to 3,500,000 shares of Series A Convertible Preferred Stock. For additional

discussion on the Series A Convertible Preferred Stock, refer to Note 15, Convertible Redeemable Preferred Stock.

On July 2, 2015, 21CI entered into the Sixth Amended and Restated Limited Liability Company Agreement (the "Sixth Amended LLC Agreement") in connection with the issuance of SFRO Preferred Units. For additional discussion on the SFRO Preferred Units, refer to Note 9, Acquisitions and Other Arrangements.

On October 7, 2015, 21CI entered into the Seventh Amended and Restated Limited Liability Company Agreement (the "Seventh Amended LLC Agreement"). The Seventh Amended LLC Agreement amends and restates the Sixth Amended LLC Agreement in its entirety to, among other things, authorize two new classes of incentive units of 21CI, Class D and Class E Units, and amend the waterfall distribution provisions. 10 Class D Units were granted to one employee and 1,000,000 total Class E Units were granted and allocated among 20 employees. Each recipient of such Class D and/or Class E Units forfeits any and all incentive equity units previously granted to him/her, which specifically modified the terms of the Class MEP, Class M, and Class O Units held by those recipients. There was no direct correlation between the number of Class D and Class E Units granted and the number of Class MEP, Class M, and Class O Units replaced. The Company determined that the replaced Class MEP Units were probable of vesting and the replaced Class M and O Units were not probable of vesting. For the Class MEP Units, the expense required to be recognized for the new Class D and Class E Units will approximate the entire fair value of the replaced Class MEP Units. As such, the Company will not incur any additional compensation expense for this portion of the modification. For the Class M and Class O Units, the incremental fair value of the new Class D and Class E Units over the fair value of the replaced Class M and Class O Units will be recorded as additional compensation expense.

Under the Seventh Amended LLC Agreement, 21CI now has ten classes of equity outstanding as of December 31, 2015: SFRO Preferred Units, Preferred Units, and Class A, D, E, G, M, MEP, N and O Units. None of the 21CI units receive any contractual right to any special dividends, nor are they convertible or exercisable into any other security. The Seventh Amended LLC Agreement does not provide for any sinking fund requirements or grant any unusual voting rights. In the event of a liquidation or a winding up of 21CI, 21CI's assets will be distributed to the various classes of equity in the order and priority set forth in the Seventh Amended LLC Agreement, subject to quarterly tax distributions. The other material terms of the Sixth LLC Agreement remain unchanged.

For purposes of determining the compensation expense associated with the equity-based incentive plan grants, management valued the business enterprise using a variety of widely accepted valuation techniques, which considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity. The Company then used the Hybrid Method ("HM") to determine the fair value of the equity units at the time of grant. The HM, as defined in the AICPA Accounting & Valuation Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation, is a combination of the probability-weighted expected return method ("PWERM") and the option pricing method ("OPM"), each applied based on specific facts and circumstances of the exit scenario and reliability of assumptions used to

estimate fair value. Under the hybrid method, multiple exit/liquidity scenarios are weighted based on the probability of the scenarios occurrence, similar to the PWERM, while also utilizing the OPM to estimate the allocation of value in one or more of the scenarios.

Under the PWERM, the value of the units is estimated based upon an analysis of future values for the enterprise assuming various future outcomes (exits) as well as the rights of each unit class. In developing assumptions for the various exit scenarios, management considered the Company's ability to achieve certain growth and profitability milestones in order to maximize shareholder value at the time of potential exit. Management considers an initial public offering ("IPO") of the Company's stock to be one of the exit scenarios for the current shareholders, although sale or merger/acquisition are possible future exit options as well. For the scenarios, the enterprise value at exit was estimated based on a multiple of the Company's EBITDA for the fiscal year preceding the exit date.

In the OPM framework, one of the variables or assumptions is the underlying equity or enterprise value of the Company. The enterprise value for the "Qualified Merger in FY 2024" scenario (i.e., the scenario in which the Company continues to operate as a private enterprise beyond FY 2019 with no clear exit strategy) was estimated based on a discounted cash flow analysis as well as guideline company market approach. The guideline companies were publicly-traded companies that were deemed comparable to the Company. The calculation of the discount rate (i.e., the weighted average cost of capital) utilized in the discounted cash flow analysis also leveraged market data of the same guideline companies. The OPM assumptions utilized by the Company were an expected term of 9.0 years, expected volatility of 45.7%, no expected dividends, and a risk-free rate of 1.95%, as well as various strike prices, or breakpoints calculated based on the waterfall distribution upon a liquidity event as stipulated in the shareholder agreement.

For each scenario, management estimated probability factors based on the outlook of the Company and the industry as well as prospects for potential exit at the exit date based on information known or knowable as of the grant date. The probability-weighted unit values calculated at each potential exit date were present-valued to the grant date to estimate the per-unit value. The discount rate utilized in the present value calculation was the cost of equity calculated using the Capital Asset Pricing Model and based on the market data of the guideline companies as well as historical data published by Morningstar, Inc. For each scenario, the per unit values were adjusted for lack of marketability discount to conclude on unit value on a minority, non-marketable basis.

The estimated fair value of the units, less an assumed forfeiture rate of 8.2% and 3.9%, for 2015 and 2014, respectively, is recognized in expense in the Company's consolidated financial statements over the requisite service period. The assumed forfeiture rate is based on an average historical forfeiture rate.

The summary of equity unit option activity under the 2012, 2013 and 2015 Plans is presented below:

			Weighted- Average Grant Date Fair Value				Weighted- Average Grant Date Fair Value				Weighted- Average Grant Date Fair Value				Weighted- Average Grant Date Fair Value				Weighted- Average Grant Date Fair Value

Nonvested balance at end of period
December 31, 2012	349,356		$	3.32	90,743		$	38.94	—		$	—	—		$	—	—		$	—
Units granted	40,909			0.26	—			—	100,000			58.37	100,000			0.47	—			—
Units forfeited	(45,546	)		3.32	(14,815	)		38.94	—			—	—			—	—			—
Units vested	(271,095	)		3.15	—			—	—			—	—			—	—			—
Units cancelled	—			—	(75,928	)		38.94	—			—	—			—	—			—

Nonvested balance at end of period
December 31, 2013	73,624		$	2.24	—		$	—	100,000		$	58.37	100,000		$	0.47	—		$	—
Units granted	—			—	—			—	—			—	—			—	—			—
Units forfeited	(19,375	)		3.32	—			—	(33,500	)		58.37	(27,194	)		0.47	—			—
Units vested	(33,638	)		2.65	—			—	—			—	—			—	—			—
Units cancelled	—			—	—			—	—			—	—			—	—			—

Nonvested balance at end of period
December 31, 2014	20,611		$	0.55	—		$	—	66,500		$	58.37	72,806		$	0.47	—		$	—
Units granted	—			—	—			—	—			—	—			—	1,020,000			0.75
Units forfeited	—			—	—			—	(579	)		58.37	(741	)		0.47	(82,237	)		0.75
Units vested	(14,557	)		0.70	—			—	—			—	—			—	—			—
Units cancelled	—			—	—			—	(61,575	)		58.37	(69,472	)		0.47	—			—

Nonvested balance at end of period
December 31, 2015	6,054		$	0.18	—		$	—	4,346		$	58.37	2,593		$	0.47	937,763		$	0.75

Class D, Class N, and Class G Units have been excluded from the above table as only 10 units were granted under each class.

As of December 31, 2015, there was approximately $245,000 of total unrecognized compensation expense related to the Class M Units, and Class O Units and approximately $626,000 and $645,000 of total unrecognized compensation expense related to the Class D Units and Class E Units, respectively. The Class D, E, G, M, N and O Unit compensation will be recognized upon the sale of the Company or an initial public offering. Under the terms of the incentive unit grant agreements governing the grants of the unit classes, in the event of an initial public offering of the Company's common stock, holders have certain rights to receive shares of restricted common stock of the Company in exchange for their incentive units.

The Company recorded $8,000, $0.1 million and $0.6 million of stock-based compensation expense related to all plans for the years ended December 31, 2015, 2014 and 2013, respectively, which is included in salaries and benefits in the consolidated statements of operations and comprehensive loss.

As of December 31, 2015, 320,219 Class MEP Units were vested out of the 326,273 total Class MEP Units outstanding. The remaining classes of units did not have any vested units as of this date. Further, no units of any class were exercisable as of this date as the relevant qualifying event for each class had not yet occurred (i.e., a sale of the Company or an initial public offering).

The following table summarizes the percentage of units that will be forfeited for each unit class upon the occurrence of certain events:

A participant in a Bonus Plan will participate in the applicable bonus pool based on his or her award percentage.

As of December 31, 2015, there was approximately $1.4 million in unrecognized compensation expense related to the Bonus Plans. The Bonus Plans compensation expense will be recognized upon the sale of the Company or a Public Offering.

The Company leases certain of its treatment centers and other properties from partnerships, which are majority owned by related parties. The leases are classified in the accompanying consolidated financial statements as either operating leases or as finance obligations pursuant to ASC 840, Leases. These related party leases have expiration dates through December 31, 2028, and they provide for annual payments and executory costs, ranging from approximately $58,000 to $0.7 million. The aggregate payments the Company made to the entities owned by these related parties were approximately $12.4 million, $20.0 million and $18.7 million, for the years ended December 31, 2015, 2014 and 2013, respectively.

The Company is a participating provider in an oncology network, which is partially owned by a related party. The Company provides oncology services to members of the network. Annual payments received by the Company for the services were approximately $2.4 million, $1.3 million and $1.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. Amounts due to the Company under this arrangement total approximately $0.2 million and $0.3 million as of December 31, 2015 and 2014, respectively.

During the year ended December 31, 2015, the Company entered into a management agreement with a multi-disciplinary physician practice owned by related parties to provide management and monitoring services related to the physician practice's Accountable Care Organization arrangement.

Amounts due to the Company under this arrangement total approximately $15,000 as of December 31, 2015.

The Company has a wholly owned subsidiary construction company that provides remodeling and real property improvements at certain of its facilities. In addition, the construction company is frequently engaged to build and construct facilities for leasing entities that are owned by related parties. Payments received by the Company for building and construction fees were approximately $0.6 million, $1.3 million and $4.6 million, for the years ended December 31, 2015, 2014 and 2013, respectively. Amounts due to the Company for the construction services were approximately $0.1 million and $0.2 million at December 31, 2015 and 2014, respectively. During the year ended December 31, 2015, the Company purchased a construction project from these related parties for approximately $0.7 million. The Company subsequently completed the construction project and is utilizing the project in its operations. The purchase price was equal to the accumulated construction costs incurred by the related parties.

The Company has purchased medical malpractice insurance from an insurance company owned by a related party. The period of coverage runs annually from November to October. The premium payments made by the Company were approximately $4.4 million, $8.9 million and $4.1 million, for the years ended December 31, 2015, 2014 and 2013, respectively. In November 2015, the Company renewed its medical malpractice insurance coverage with a third party insurance carrier.

In California, Delaware, Maryland, Massachusetts, Michigan, Nevada, New York, North Carolina and Washington, the Company maintains administrative services agreements with professional corporations owned by related parties, who are licensed to practice medicine in such states. The Company entered into these agreements in order to comply with the laws of such states, which prohibit the Company from employing physicians. The agreements generally obligate the Company to provide treatment center facilities, staff, equipment, accounting services, billing and collection services, management and administrative personnel, assistance in managed care contracting, and assistance in marketing services. Fees paid to the Company by such professional corporations under the agreements were approximately $64.0 million, $73.2 million and $66.0 million, for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts have been eliminated in consolidation.

On February 22, 2008, the Company entered into a management agreement with Vestar Capital Partners V, L.P. (Vestar) relating to certain advisory and consulting services for an annual fee equal to the greater of (i) $850,000 or (ii) an amount equal to 1.0% of the Company's consolidated earnings before interest, taxes, depreciation, and amortization for each fiscal year determined as set forth in the Senior Credit Facility. As part of the management agreement, the Company agreed to indemnify Vestar and its affiliates from and against all losses, claims, damages, and liabilities arising out of the performance by Vestar of its services pursuant to the management agreement. The management agreement will terminate upon such time that Vestar and its partners and their respective affiliates hold, directly, or indirectly in the aggregate, less than 20% of the voting power of the outstanding voting stock of the Company. During the years ended December 31, 2015, 2014 and 2013, the Company paid approximately $1.6 million, $1.1 million and $0.9 million, respectively, of management fees and expenses under such agreement. Amounts due to Vestar for these services were approximately $0.8 million and $0.7 million at December 31, 2015 and 2014, respectively and are recorded in accrued expenses in the consolidated balance sheets.

	Year Ended December 31,

	2015		2014		2013
Total revenues:
U.S. Domestic	$	961,286	$	926,960	$	646,599
International		117,941		91,222		82,324

Total	$	1,079,227	$	1,018,182	$	728,923



Facility gross profit:
U.S. Domestic	$	243,684	$	248,868	$	159,714
International		64,672		46,900		41,014

Total	$	308,356	$	295,768	$	200,728



Depreciation and amortization:
U.S. Domestic	$	83,189	$	81,444	$	60,563
International		5,851		5,139		4,533

Total	$	89,040	$	86,583	$	65,096



Capital expenditures:*
U.S. Domestic	$	43,177	$	61,243	$	38,626
International		3,032		16,090		5,079

Total	$	46,209	$	77,333	$	43,705

Total revenues attributable to the Company's operations in Argentina were $90.3 million, $68.7 million and $64.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. Property and equipment attributable to the Company's operations in Argentina was $8.6 million and $12.5 million as of December 31, 2015 and 2014, respectively.

The reconciliation of the Company's reportable segment profit and loss is as follows (in thousands):

	Years ended December 31,

(in thousands):	2015			2014			2013
Facility gross profit	$	308,356		$	295,768		$	200,728
Less:
General and administrative expenses		174,791			135,819			107,395
General and administrative salaries		113,918			114,064			89,655
General and administrative depreciation and amortization		15,772			17,299			12,432
Provision for doubtful accounts		14,526			19,253			12,146
Interest expense, net		98,075			113,279			86,747
(Gain) loss on the sale/disposal of property and equipment		(751	)		119			336
Gain on BP settlement		(7,495	)		—			—
Gain on insurance recoveries		(1,655	)		—			—
Impairment loss		—			229,526			—
Early extinguishment of debt		37,390			8,558			—
Equity IPO expenses		—			4,905			—
Fair value adjustment of noncontrolling interest and earn-out liabilities		(1,811	)		1,627			130
Fair value adjustment of embedded derivative		(17,919	)		837			—
Loss on sale-leaseback transaction		—			135			313
Gain on the sale of an interest in a joint venture		—			—			(1,460	)
Foreign currency transaction loss		904			678			1,138
Gain on foreign currency derivative contracts		—			(4	)		467

Loss before income taxes and equity interest in net income (loss) of joint ventures	$	(117,389	)	$	(350,327	)	$	(108,571	)

The quarterly financial information shown below has been prepared by the Company's management and is unaudited. It should be read in conjunction with the audited consolidated financial statements appearing herein.

The quarters ended September 30, 2014, and June 30, 2014, include non-cash goodwill impairment expense of $46.3 million and $182.0 million, respectively.

In connection with the preparation of the consolidated financial statements for the fiscal year ended December 31, 2015, the Company identified errors in its previously issued financial statements for the interim periods ended March 31, 2015, June 30, 2015 and September 30, 2015. In accordance with accounting guidance presented in ASC 250-10 and SEC Staff Accounting Bulletin No. 99, Materiality ("SAB 99"), management assessed the materiality of these errors and concluded that they were material to the Company's financial statements for these periods. The Company restated its financial statements for each respective period to correct these errors. The following is a description of the corrections:

The Company generally recognizes revenue in accordance with FASB ASC Topic 605, Revenue Recognition ("ASC 605"). Accordingly, the Company recognizes revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. MDL Argentina recognizes revenue at invoicing when it cannot conclude that criteria (ii) or (iii) have been met at an earlier point.

Specifically, the Company has determined that MDL Argentina needs to defer revenue recognition on all of its revenue until there is evidence that services have been rendered and that the fee is fixed or determinable, which generally occurs when the invoicing process is complete (negotiations, as applicable, with the insurance company are also complete at invoicing). Accordingly, the Company has determined that net patient revenue should be recognized at invoicing to the insurer.

Accordingly, Management has determined that revenue related to treatments should be recognized on a full deferral method at invoicing to the insurer.

The Company has determined that its medical malpractice liabilities and recoveries were not appropriately accounted for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015 in accordance with ASC 954, Health Care Entities, and ASC 720, Other Expenses. Errors occurred in establishing the Company's medical malpractice liability. The Company's method of calculating the medical malpractice liability resulted in the misapplication of GAAP, which caused it to make adjustments in the restated consolidated financial statements. Specifically, (1) an actuarial estimate of estimated future case development was required in addition to the case reserves we established on a claim by claim basis for open reported claims; (2) the removal of policy limits was required for the actuarial calculation of the liability; (3) certain physicians were excluded from the valuation, for which the Company has a medical malpractice liability risk; and (4) the correction of the classification of the medical malpractice liability between short and long term.

As part of the Restatement process, the Company recorded a value added tax liability associated with intercompany charges for headquarter services in MDL for transfer pricing.

The Company has recorded tax adjustments to reflect the impacts of the Restatement and to correct errors related to its tax provision including accruals for uncertain tax positions.

In addition to the above adjustments, the Company has also corrected the presentation of tax matters related to leasing transactions and due diligence related matters.

The Company has also corrected errors for certain accruals and other items, each of which had a corresponding effect to various financial statement line items for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015. See below for a list of correcting adjustments recorded by the Company:

The above corrections have adjusted various accounts within the consolidated balance sheets and statement of operations and comprehensive loss.

The tables below summarize the effects of the Restatement adjustments on the condensed consolidated balance sheets as of September 30, 2015, June 30, 2015 and March 31, 2015 (in thousands):

	September 30, 2015

	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	47,793		$	(68	)	$	47,725
Restricted cash		80			194			274
Marketable securities		622			—			622
Accounts receivable, net		149,224			(12,433	)		136,791
Prepaid expenses		9,381			372			9,753
Inventories		5,162			(1,437	)		3,725
Income taxes receivable		—			4,738			4,738
Deferred income taxes		191			1,544			1,735
Other		8,056			3,121			11,177

Total current assets		220,509			(3,969	)		216,540
Equity investments in joint ventures		1,236			—			1,236
Property and equipment, net		249,392			(2,115	)		247,277
Real estate subject to finance obligation		11,625			—			11,625
Goodwill		492,084			6,435			498,519
Intangible assets, net		74,434			(322	)		74,112
Other assets		49,282			12,298			61,580

Total assets	$	1,098,562		$	12,327		$	1,110,889



LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable	$	59,397		$	5,249		$	64,646
Accrued expenses		140,061			9,920			149,981
Income taxes payable		1,814			(136	)		1,678
Current portion of long-term debt		30,858			—			30,858
Current portion of finance obligation		481			—			481
Other current liabilities		6,484			1,465			7,949

Total current liabilities		239,095			16,498			255,593
Long-term debt, less current portion		1,009,196			—			1,009,196
Finance obligation, less current portion		12,057			—			12,057
Embedded derivative features of Series A convertible redeemable preferred stock		27,339			—			27,339
Other long-term liabilities		39,861			22,741			62,602
Deferred income taxes		3,716			792			4,508

Total liabilities		1,331,264			40,031			1,371,295
Series A convertible redeemable preferred stock		370,478			—			370,478
Noncontrolling interests—redeemable		19,934			—			19,934
Commitments and contingencies
Equity:
Common stock		—			—			—
Additional paid-in capital		599,733			(1,467	)		598,266
Retained deficit		(1,204,171	)		(27,762	)		(1,231,933	)
Accumulated other comprehensive loss, net of tax		(45,008	)		2,686			(42,322	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(649,446	)		(26,543	)		(675,989	)
Noncontrolling interests—nonredeemable		26,332			(1,161	)		25,171

Total deficit		(623,114	)		(27,704	)		(650,818	)

Total liabilities and deficit	$	1,098,562		$	12,327		$	1,110,889

	June 30, 2015									March 31, 2015

	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	62,082		$	(124	)	$	61,958		$	78,184		$	(211	)	$	77,973
Restricted cash		3,050			193			3,243			7,865			233			8,098
Accounts receivable, net		163,117			(17,730	)		145,387			153,619			(15,143	)		138,476
Prepaid expenses		11,792			928			12,720			9,115			1,479			10,594
Inventories		4,414			(1,413	)		3,001			4,355			(1,413	)		2,942
Income taxes receivable		—			4,537			4,537			—			3,996			3,996
Deferred income taxes		146			1,544			1,690			193			1,544			1,737
Other		8,506			2,510			11,016			7,821			1,256			9,077

Total current assets		253,107			(9,555	)		243,552			261,152			(8,259	)		252,893
Equity investments in joint ventures		1,251			—			1,251			1,615			—			1,615
Property and equipment, net		260,065			(1,912	)		258,153			268,630			(1,332	)		267,298
Real estate subject to finance obligation		11,556			—			11,556			10,849			—			10,849
Goodwill		492,724			6,610			499,334			492,868			6,750			499,618
Intangible assets, net		77,830			(313	)		77,517			81,253			(308	)		80,945
Other assets		50,498			12,832			63,330			35,040			12,329			47,369

Total assets	$	1,147,031		$	7,662		$	1,154,693		$	1,151,407		$	9,180		$	1,160,587



LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable	$	60,161		$	5,831		$	65,992		$	65,207		$	4,773		$	69,980
Accrued expenses		101,108			9,130			110,238			102,308			7,744			110,052
Income taxes payable		3,621			(2,118	)		1,503			3,792			(2,035	)		1,757
Current portion of long-term debt		30,890			—			30,890			25,088			—			25,088
Current portion of finance obligation		277			—			277			257			—			257
Other current liabilities		8,739			1,562			10,301			20,787			1,220			22,007

Total current liabilities		204,796			14,405			219,201			217,439			11,702			229,141
Long-term debt, less current portion		999,679			—			999,679			935,664			—			935,664
Finance obligation, less current portion		12,197			—			12,197			11,490			—			11,490
Embedded derivative features of Series A convertible redeemable preferred stock		22,402			3,580			25,982			17,185			3,355			20,540
Other long-term liabilities		44,694			32,118			76,812			53,340			22,195			75,535
Deferred income taxes		3,598			704			4,302			4,002			608			4,610

Total liabilities		1,287,366			50,807			1,338,173			1,239,120			37,860			1,276,980
Series A convertible redeemable preferred stock		378,471			(26,277	)		352,194			353,388			(18,757	)		334,631
Noncontrolling interests—redeemable		68,794			(49,000	)		19,794			55,078			(35,464	)		19,614
Commitments and contingencies
Equity:
Common stock		—			—			—			—			—			—
Additional paid-in capital		576,083			23,272			599,355			601,162			15,753			616,915
Retained deficit		(1,147,267	)		(26,888	)		(1,174,155	)		(1,082,729	)		(25,387	)		(1,108,116	)
Accumulated other comprehensive loss, net of tax		(42,735	)		2,365			(40,370	)		(40,882	)		2,076			(38,806	)

Total 21st Century Oncology Holdings, Inc. shareholder's deficit		(613,919	)		(1,251	)		(615,170	)		(522,449	)		(7,558	)		(530,007	)
Noncontrolling interests—nonredeemable		26,319			33,383			59,702			26,270			33,099			59,369

Total deficit		(587,600	)		32,132			(555,468	)		(496,179	)		25,541			(470,638	)

Total liabilities and deficit	$	1,147,031		$	7,662		$	1,154,693		$	1,151,407		$	9,180		$	1,160,587

The tables below summarize the effects of the Restatement adjustments on the condensed consolidated statements of operations and comprehensive loss for the three month periods ended September 30, 2015, June 30, 2015 and March 31, 2015 (in thousands):

	September 30, 2015

	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Net patient service revenue	$	239,606		$	4,162		$	243,768
Management fees		14,180			—			14,180
Other revenue		4,199			110			4,309

Total revenues		257,985			4,272			262,257
Expenses:
Salaries and benefits		142,640			—			142,640
Medical supplies		22,498			—			22,498
Facility rent expenses		16,821			162			16,983
Other operating expenses		16,049			(97	)		15,952
General and administrative expenses		68,236			70			68,306
Depreciation and amortization		22,479			(40	)		22,439
Provision for doubtful accounts		5,651			(34	)		5,617
Interest expense, net		23,724			47			23,771
(Gain) loss on the sale/disposal of property and equipment		—			100			100
Gain on BP settlement		(5,796	)		—			(5,796	)
Gain on insurance recoveries		—			—			—
Fair value adjustment of earn-out liabilities		(3,723	)		3,735			12
Fair value adjustment of embedded derivatives and other financial instruments		2,363			(576	)		1,787
Loss on foreign currency transactions		337			(4	)		333

Total expenses		311,279			3,363			314,642

Loss before income taxes and equity interest in net income (loss) of joint ventures		(53,294	)		909			(52,385	)
Income tax expense (benefit)		1,152			1,699			2,851

Net loss before equity interest in net income (loss) of joint ventures		(54,446	)		(790	)		(55,236	)
Equity interest in net income (loss) of joint ventures, net of tax		—			(10	)		(10	)

Net loss		(54,446	)		(800	)		(55,246	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(2,458	)		(72	)		(2,530	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(56,904	)		(872	)		(57,776	)
Other comprehensive loss:
Unrealized loss on foreign currency translation		(2,688	)		273			(2,415	)

Other comprehensive loss		(2,688	)		273			(2,415	)

Comprehensive loss		(57,134	)		(527	)		(57,661	)

Comprehensive income attributable to noncontrolling interests-redeemable and non-redeemable		(2,043	)		(24	)		(2,067	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(59,177	)	$	(551	)	$	(59,728	)

	June 30, 2015									March 31, 2015

	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Net patient service revenue	$	263,380		$	(5,526	)	$	257,854		$	256,757		$	(2,502	)	$	254,255
Management fees		15,211			—			15,211			15,870			—			15,870
Other revenue		6,618			(1,470	)		5,148			5,856			(348	)		5,508

Total revenues		285,209			(6,996	)		278,213			278,483			(2,850	)		275,633
Expenses:
Salaries and benefits		147,397			—			147,397			146,959			—			146,959
Medical supplies		24,774			—			24,774			26,291			—			26,291
Facility rent expenses		16,922			95			17,017			16,875			(54	)		16,821
Other operating expenses		16,073			22			16,095			14,924			24			14,948
General and administrative expenses		43,776			285			44,061			28,910			64			28,974
Depreciation and amortization		22,242			(38	)		22,204			22,569			(437	)		22,132
Provision for doubtful accounts		3,753			—			3,753			4,468			(155	)		4,313
Interest expense, net		24,326			52			24,378			25,687			—			25,687
(Gain) loss on the sale/disposal of property and equipment		—			81			81			—			(384	)		(384	)
Gain on insurance recoveries		—			(1,364	)		(1,364	)		—			—			—
Early extinguishment of debt		37,390			—			37,390			—			—			—
Fair value adjustment of earn-out liabilities		2,745			(3,735	)		(990	)		460			—			460
Fair value adjustment of embedded derivatives and other financial instruments		5,217			225			5,442			1,342			351			1,693
Loss on foreign currency transactions		(31	)		(3	)		(34	)		242			(4	)		238

Total expenses		344,584			(4,380	)		340,204			288,727			(595	)		288,132

Loss before income taxes and equity interest in net income (loss) of joint ventures		(59,375	)		(2,616	)		(61,991	)		(10,244	)		(2,255	)		(12,499	)
Income tax expense (benefit)		3,088			(674	)		2,414			2,690			(757	)		1,933

Net loss before equity interest in net income (loss) of joint ventures		(62,463	)		(1,942	)		(64,405	)		(12,934	)		(1,498	)		(14,432	)
Equity interest in net income (loss) of joint ventures, net of tax		—			188			188			—			24			24

Net loss		(62,463	)		(1,754	)		(64,217	)		(12,934	)		(1,474	)		(14,408	)
Net income attributable to noncontrolling interests—redeemable and non-redeemable		(2,075	)		254			(1,821	)		(2,308	)		49			(2,259	)

Net loss attributable to 21st Century Oncology Holdings, Inc. shareholder		(64,538	)		(1,500	)		(66,038	)		(15,242	)		(1,425	)		(16,667	)
Other comprehensive loss:
Unrealized loss on foreign currency translation		(2,062	)		256			(1,806	)		(2,435	)		242			(2,193	)

Other comprehensive loss		(2,062	)		256			(1,806	)		(2,435	)		242			(2,193	)

Comprehensive loss		(64,525	)		(1,498	)		(66,023	)		(15,369	)		(1,232	)		(16,601	)

Comprehensive income attributable to noncontrolling interests-redeemable and non-redeemable		(1,866	)		286			(1,580	)		(2,065	)		113			(1,952	)

Comprehensive loss attributable to 21st Century Oncology Holdings, Inc. shareholder	$	(66,391	)	$	(1,212	)	$	(67,603	)	$	(17,434	)	$	(1,119	)	$	(18,553	)

The tables below summarize the effects of the Restatement adjustments on the condensed consolidated statements of cash flows for the respective year to date periods ended September 30, 2015, June 30, 2015 and March 31, 2015 (in thousands):

	September 30, 2015

	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from operating activities
Net loss	$	(129,843	)	$	(4,027	)	$	(133,870	)
Adjustments to reconcile net loss to net cash provided by (used in) provided by operating activities:
Depreciation and amortization		67,290			(515	)		66,775
Deferred rent expense		153			203			356
Deferred income taxes		(773	)		(139	)		(912	)
Stock-based compensation		6			—			6
Provision for doubtful accounts		13,872			(189	)		13,683
(Gain) loss on the sale/disposal of property and equipment		(143	)		(60	)		(203	)
Gain on the sale of marketable securities		(2	)		—			(2	)
Early extinguishment of debt		37,390			—			37,390
Loss on foreign currency transactions		298			—			298
Fair value adjustment of noncontrolling interest and earn-out liabilities		(518	)		—			(518	)
Fair value adjustment of embedded derivatives and other financial instruments		8,922			—			8,922
Amortization of debt discount		1,228			—			1,228
Amortization of loan costs		3,675			—			3,675
Paid in kind interest on notes payable		370			—			370
Equity interest in net (earnings) loss of joint ventures		(202	)		—			(202	)
Distribution received from unconsolidated joint ventures		106			—			106
Pension plan contributions		—			(1,756	)		(1,756	)
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(33,058	)		(1,219	)		(34,277	)
Income taxes payable		(109	)		544			435
Inventories		(624	)		—			(624	)
Prepaid expenses		2,192			—			2,192
Accounts payable		3,921			579			4,500
Accrued deferred compensation		1,057			—			1,057
Accrued expenses / other liabilities		58,134			6,558			64,692

Net cash provided by operating activities		33,342			(21	)		33,321
Cash flows from investing activities
Purchase of property and equipment		(33,595	)		—			(33,595	)
Acquisition of medical practices		(33,064	)		—			(33,064	)
Restricted cash associated with medical practice acquisitions		6,970			39			7,009
Proceeds from the sale of property and equipment		1,143			—			1,143
Purchase of marketable securities		(4,633	)		—			(4,633	)
Sale of marketable securities		4,013			—			4,013
Repayments from (loans to) employees		353			—			353
Distribution received from joint venture entities		496			—			496
Company owned life insurance policies		(1,015	)		—			(1,015	)
Change in other assets and other liabilities		45			—			45

Net cash used in investing activities		(59,287	)		39			(59,248	)

	September 30, 2015

	As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from financing activities
Proceeds from issuance of debt		972,851			—			972,851
Principal repayments of debt		(921,871	)		—			(921,871	)
Repayments of finance obligation		(168	)		—			(168	)
Proceeds from issuance of noncontrolling interest		743			—			743
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		3,230			—			3,230
Purchase of noncontrolling interest—non-redeemable		(16,233	)		—			(16,233	)
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(4,072	)		—			(4,072	)
Payments for contingent considerations		(8,537	)		—			(8,537	)
Payment of call premium on long-term debt		(24,877	)		—			(24,877	)
Payments of loan costs		(26,481	)		—			(26,481	)

Net cash (used in) provided by financing activities		(25,415	)		—			(25,415	)

Effect of exchange rate changes on cash and cash equivalents		(14	)		(1	)		(15	)
Net (decrease) increase in cash and cash equivalents		(51,374	)		17			(51,357	)
Cash and cash equivalents, beginning of period		99,167			(85	)		99,082

Cash and cash equivalents, end of period	$	47,793		$	(68	)	$	47,725



Supplemental disclosure of non-cash investing and financing activities
Finance obligation related to real estate projects	$	844		$	—		$	844

Derecognition of finance obligation related to real estate projects	$	12,215		$	—		$	12,215

Capital lease obligations related to the purchase of equipment	$	2,408		$	—		$	2,408

Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable	$	665		$	—		$	665

Change in earn-out liabilities	$	13,572		$	—		$	13,572

Assumed debt obligations related to the acquisition of medical practices	$	290		$	—		$	290

Amounts payable to sellers in the purchase of a medical practice	$	150		$	—		$	150

Amounts payable for related deferred financing costs	$	35		$	(35	)	$	—

Noncash dividend declared to noncontrolling interest	$	56		$	—		$	56

Issuance of notes payable relating to the purchase of SFRO noncontrolling interest	$	14,560		$	—		$	14,560

Issuance of equity units relating to the purchase of SFRO noncontrolling interest	$	14,500		$	—		$	14,500

Accrued dividends on Series A convertible preferred stock, accrued at effective rate	$	29,828		$	5,907		$	35,735

Accretion of redemption value on Series A convertible preferred stock	$	14,728		$	2,916		$	17,644

Change in additional paid-in capital from sale/purchase of interest in subsidiaries	$	3,780		$	(1,465	)	$	2,315

	June 30, 2015									March 31, 2015

	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from operating activities
Net loss	$	(75,397	)	$	(3,227	)	$	(78,624	)	$	(12,934	)	$	(1,474	)	$	(14,408	)
Adjustments to reconcile net loss to net cash provided by (used in) provided by operating activities:
Depreciation		38,331			(475	)		37,856			19,324			(432	)		18,892
Amortization		6,480			—			6,480			3,245			(5	)		3,240
Deferred rent expense		338			41			379			219			(54	)		165
Deferred income taxes		(781	)		(28	)		(809	)		(437	)		—			(437	)
Stock-based compensation		5			—			5			1			—			1
Provision for doubtful accounts		8,221			(155	)		8,066			4,468			(155	)		4,313
(Gain) loss on the sale/disposal of property and equipment		(243	)		(60	)		(303	)		(324	)		(60	)		(384	)
Early extinguishment of debt		37,390			—			37,390			—			—			—
Loss on foreign currency transactions		38			—			38			145			(4	)		141
Fair value adjustment of noncontrolling interest and earn-out liabilities		3,205			(3,735	)		(530	)		460			—			460
Fair value adjustment of embedded derivatives and other financial instruments		6,559			576			7,135			1,342			351			1,693
Amortization of debt discount		746			—			746			446			—			446
Amortization of loan costs		2,630			—			2,630			1,455			—			1,455
Equity interest in net (earnings) loss of joint ventures		(212	)		—			(212	)		(24	)		—			(24	)
Distribution received from unconsolidated joint ventures		106			—			106			53			—			53
Changes in operating assets and liabilities:
Accounts receivable and other current assets		(37,921	)		3,284			(34,637	)		(22,421	)		(24	)		(22,445	)
Income taxes payable		1,649			(1,303	)		346			1,720			(672	)		1,048
Inventories		124			—			124			183			—			183
Prepaid expenses		(1,003	)		—			(1,003	)		550			73			623
Accounts payable		2,395			1,161			3,556			4,057			49			4,106
Accrued deferred compensation		686			—			686			393			—			393
Accrued expenses / other liabilities		19,690			3,843			23,533			20,818			2,287			23,105

Net cash provided by operating activities		13,036			(78	)		12,958			22,739			(120	)		22,619
Cash flows from investing activities
Purchase of property and equipment		(25,753	)		—			(25,753	)		(12,265	)		66			(12,199	)
Acquisition of medical practices		(25,611	)		(3,647	)		(29,258	)		(25,965	)		—			(25,965	)
Restricted cash associated with medical practice acquisitions		4,001			39			4,040			(814	)		(1	)		(815	)
Proceeds from the sale of property and equipment		1,122			—			1,122			1,103			—			1,103
Repayments from (loans to) employees		160			—			160			(45	)		(72	)		(117	)
Purchase of noncontrolling interest—non-redeemable		(1,233	)		1,233			—			(1,233	)		1,233			—
Company owned life insurance policies		(670	)		—			(670	)		(321	)		—			(321	)
Change in other assets and other liabilities		(156	)		—			(156	)		(62	)		—			(62	)

Net cash used in investing activities		(48,140	)		(2,375	)		(50,515	)		(39,602	)		1,226			(38,376	)

	June 30, 2015									March 31, 2015

	As Reported			Adjustments			As Restated			As Reported			Adjustments			As Restated
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from financing activities
Proceeds from issuance of debt		970,618			—			970,618			2,863			—			2,863
Principal repayments of debt		(911,717	)		—			(911,717	)		(9,902	)		1			(9,901	)
Repayments of finance obligation		(136	)		—			(136	)		(84	)		—			(84	)
Proceeds from issuance of noncontrolling interest		743			—			743			743			—			743
Proceeds from noncontrolling interest holders—redeemable and non-redeemable		3,230			—			3,230			3,230			—			3,230
Purchase of noncontrolling interest—non-redeemable		—			(1,233	)		(1,233	)		—			(1,233	)		(1,233	)
Cash distributions to noncontrolling interest holders—redeemable and non-redeemable		(2,022	)		—			(2,022	)		(964	)		—			(964	)
Payments for contingent considerations		(12,184	)		3,647			(8,537	)		—			—			—
Payment of call premium on long-term debt		(24,877	)		—			(24,877	)		—			—			—
Payments of loan costs		(25,626	)		—			(25,626	)		—			—			—

Net cash (used in) provided by financing activities		(1,971	)		2,414			443			(4,114	)		(1,232	)		(5,346	)

Effect of exchange rate changes on cash and cash equivalents		(10	)		—			(10	)		(6	)		—			(6	)
Net (decrease) increase in cash and cash equivalents		(37,085	)		(39	)		(37,124	)		(20,983	)		(126	)		(21,109	)
Cash and cash equivalents, beginning of period		99,167			(85	)		99,082			99,167			(85	)		99,082

Cash and cash equivalents, end of period	$	62,082		$	(124	)	$	61,958		$	78,184		$	(211	)	$	77,973



Supplemental disclosure of non-cash investing and financing activities
Finance obligation related to real estate projects	$	782		$	—		$	782		$	3		$	—		$	3

Derecognition of finance obligation related to real estate projects	$	12,215		$	—		$	12,215		$	12,215		$	—		$	12,215

Capital lease obligations related to the purchase of equipment	$	582		$	—		$	582		$	—		$	—		$	—

Medical equipment and service contract component related to the acquisition of medical equipment through accounts payable	$	1,265		$	—		$	1,265		$	4,586		$	—		$	4,586

Change in earn-out liabilities	$	1,258		$	—		$	1,258		$	1,258		$	—		$	1,258

Assumed debt obligations related to the acquisition of medical practices	$	290		$	—		$	290		$	290		$	—		$	290

Amounts payable for related deferred financing costs	$	855		$	—		$	855		$	—		$	—		$	—

Noncash dividend declared to noncontrolling interest	$	10		$	—		$	10		$	—		$	—		$	—

Noncash issuance of noncontrolling interest	$	496		$	(496	)	$	—		$	—		$	—		$	—

Accrued dividends on Series A convertible preferred stock, accrued at effective rate	$	45,534		$	(8,888	)	$	36,646		$	22,483		$	(9,798	)	$	12,685

Accretion of redemption value on Series A convertible preferred stock	$	4,011		$	(2,592	)	$	1,419		$	1,979		$	2,974		$	4,953

Change in additional paid-in capital from sale/purchase of interest in subsidiaries	$	378		$	—		$	378		$	378		$	—		$	378

On January 1, 2016, the Company contributed its Greenville, North Carolina treatment center operations into a newly formed joint venture ("Newco"). Simultaneously, a local hospital system contributed its Greenville, North Carolina treatment center operations into Newco and purchased additional ownership interests from the Company for approximately $6.2 million. As a result of the transaction, the Company owns 50% of Newco. In addition, the Company determined it does not control Newco as of January 1, 2016 and deconsolidated the operations of its Greenville, North Carolina treatment center as of the transaction date. The Company recorded a preliminary gain on disposal of its Greenville location of $12.6 million.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on August 23, 2016.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the date indicated.

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

No annual report to security holders covering the registrant's last fiscal year and no proxy material have been sent to security holders with respect to any annual or other meeting of security holders.

Exhibit Number			Description

	2.1		Securities Purchase Agreement, dated as of February 10, 2014, by and among 21C East Florida, LLC, Kishore Dass, M.D., Ben Han, M.D., Rajiv Patel, SFRO Holdings, LLC and, solely for purposes of Sections 1.3, 1.4 and 5.2(c) thereof, 21^st Century Oncology, Inc., incorporated herein by reference to Exhibit 2.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on February 11, 2014.*
	2.2		Securities Contribution and Purchase Agreement, dated as of July 2, 2015, by and among 21C East Florida, LLC, 21st Century Oncology Investments, LLC, Kishore Dass, M.D., Ben Han, M.D., Rajiv Patel and SFRO Holdings, LLC, incorporated by reference to Exhibit 2.1 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on July 8, 2015.*
	3.1		Amended and Restated Articles of Incorporation of 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), incorporated herein by reference to Exhibit 3.1 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	3.2		Articles of Amendment to the Articles of Incorporation of 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), incorporated herein by reference to Exhibit 3.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.
	3.3		Bylaws of 21^st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), incorporated herein by reference to Exhibit 3.2 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	3.4		Certificate of Incorporation of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.3 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	3.5		Certificate of Amendment of the Certificate of Incorporation of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.4 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K, filed on March 11, 2011.
	3.6		Certificate of Amendment of the Certificate of Incorporation of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.
	3.7		Certificate of Amendment of the Certificate of Incorporation of 21^st Century Oncology Holdings, Inc., incorporated herein by reference to Exhibit 3.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	3.8		Bylaws of 21^st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), incorporated herein by reference to Exhibit 3.4 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	4.1		Amended and Restated Indenture, dated as of October 25, 2013, by and among OnCure Holdings, Inc. and its subsidiaries named therein, Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc. and its subsidiaries named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on October 30, 2013.
	4.2		Form of 11³/4% Senior Secured Notes due 2017 (included in Exhibit 4.1).

Exhibit Number			Description

	4.3		First Supplemental Indenture, dated as of November 19, 2013, by and among Southern New England Regional Cancer Center, LLC, Palms West Radiation Therapy, L.L.C., OnCure Holdings, Inc., each other then existing guarantor named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.19 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	4.4		Second Supplemental Indenture, dated as of March 9, 2015, by and among 21^st Century Oncology of Washington, LLC, OnCure Holdings, Inc., each other then existing guarantor named therein and Wilmington Trust, National Association, incorporated herein by reference to Exhibit 4.20 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	4.5		Third Supplemental Indenture dated as of April 28, 2015, among OnCure Holdings, Inc. and Wilmington Trust, National Association, as trustee and collateral agent, incorporated by reference to Exhibit 4.3 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on May 4, 2015.
	4.6		Certificate of Designations, dated September 26, 2014, of Series A Convertible Preferred Stock of 21^st Century Oncology Holdings, Inc., incorporated herein by reference to Exhibit 3.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	4.7		Amendment to Certificate of Designations, Powers, Preferences and Rights of Series A Convertible Preferred Stock of 21^st Century Oncology Holdings, Inc., dated November 11, 2014, incorporated herein by reference to Exhibit 3.3 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015.
	4.8		Indenture, dated as of April 30, 2015, among 21st Century Oncology, Inc., the guarantors named therein and Wilmington Trust, National Association, incorporated by reference to Exhibit 4.1 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on May 4, 2015.
	4.9		Form of 11.00% Senior Notes due 2023 (included in Exhibit 4.8 hereto), incorporated by reference to Exhibit 4.2 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on May 4, 2015.
	4.10		First Supplemental Indenture dated as of September 16, 2015, among, 21st Century Oncology Holdings, Inc. 21st Century Oncology, Inc., the guarantors party thereto, and Wilmington Trust, National Association, as trustee, incorporated herein by reference to Exhibit 4.2 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 12, 2016.
	4.11		Form of Subordinated Unsecured PIK Notes due 2019 issued by 21st Century Oncology Holdings, Inc., incorporated by reference to Exhibit 4.1 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on July 8, 2015.
	10.1		Credit Agreement, dated as of April 30, 2015, among 21st Century Oncology Holdings, Inc., 21st Century Oncology, Inc., the lenders party thereto from time to time, and Morgan Stanley Senior Funding, Inc., as administrative agent, incorporated by reference to Exhibit 10.1 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on May 4, 2015.
	10.2		Guarantee and Security Agreement, dated as of April 30, 2015, among 21st Century Oncology Holdings, Inc., 21st Century Oncology, Inc., the subsidiaries of 21st Century Oncology, Inc., parties thereto from time to time and Morgan Stanley Senior Funding, Inc., as administrative agent, incorporated by reference to Exhibit 10.2 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on May 4, 2015.

Exhibit Number			Description

	10.3		Executive Employment Agreement, dated effective as of February 21, 2008, between Radiation Therapy Services, Inc. and Howard Sheridan (incorporated herein by reference to Exhibit 10.79 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), as amended by that certain Amendment to Executive Employment Agreement, dated September 25, 2014, by and among 21^st Century Oncology Holdings, Inc. f/k/a Radiation Therapy Services Holdings, Inc., 21^st Century Oncology, Inc. f/k/a Radiation Therapy Services, Inc. and Howard Sheridan, M.D. (incorporated herein by reference to Exhibit 10.7 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015).+
	10.4		Physician Employment Agreement, dated effective as of July 1, 2003, as amended by that certain Amendment to Physician Employment Agreement, dated January 26, 2006, Second Amendment to Physician Employment Agreement, dated October 1, 2006, Third Amendment to Physician Employment Agreement, dated January 1, 2007, between 21^st Century Oncology, LLC f/k/a 21^st Century Oncology, Inc. and Constantine A. Mantz, M.D. (incorporated herein by reference to Exhibit 10.80 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), Fourth Amendment to Physician Employment Agreement, dated November 11, 2009, Fifth Amendment to Physician Employment Agreement, dated effective July 1, 2011, Sixth Amendment to Physician Employment Agreement, effective October 1, 2013, between 21^st Century Oncology, LLC f/k/a 21^st Century Oncology, Inc. and Constantine Mantz, M.D. (incorporated herein by reference to Exhibit 10.31 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014) and Eighth Amendment to Physician Employment Agreement, dated July 2014, by and between 21^st Century Oncology, LLC f/k/a 21^st Century Oncology, Inc. and Constantine Mantz, M.D. (incorporated herein by reference to Exhibit 10.12 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015).+
	10.5		Second Amended and Restated Executive Employment Agreement, dated as of May 6, 2014, by and among 21^st Century Oncology Holdings, Inc. and Daniel E. Dosoretz., incorporated herein by reference to Exhibit 10.86 to Amendment No. 1 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-1 filed on May 7, 2014.+
	10.6		Amendment to Second Amended and Restated Executive Employment Agreement, dated September 25, 2014, by and among 21^st Century Oncology Holdings, Inc. and Daniel E. Dosoretz, M.D., incorporated by reference to Exhibit 10.5 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.+
	10.7		Executive Employment Agreement dated September 4, 2015, by and between 21st Century Oncology Holdings, Inc., 21st Century Oncology, Inc. and LeAnne M. Stewart, incorporated by reference to Exhibit 10.1 to 21st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 4, 2015.
	10.8		Form of Management Stock Contribution and Unit Subscription Agreement (Preferred Units and Class A Units), incorporated herein by reference to Exhibit 10.9 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+
	10.9		Management Stock Contribution and Unit Subscription Agreement (Preferred Units and Class A Units), dated February 21, 2008, by and between Radiation Therapy Investments, LLC and Daniel E. Dosoretz, incorporated herein by reference to Exhibit 10.10 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+
	10.10		Form of Incentive Unit Grant Agreement (Class M/O Units) for Chief Executive Officer, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.+

Exhibit Number			Description

	10.11		Form of Incentive Unit Grant Agreement (Class M/O Units) for executive officers, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 11, 2013.+
	10.12		Form of Incentive Unit Grant Agreement—Class D Units, by and between 21st Century Oncology Investments, LLC and Dr. Daniel E. Dosoretz, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on October 8, 2015.
	10.13		Form of Incentive Unit Grant Agreement—Class E Units, by and between 21st Century Oncology Investments, LLC and an Executive Officer, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on October 8, 2015.
	10.14		Form of 21st Century Oncology Holdings, Inc. Class D Bonus Plan, incorporated herein by reference to Exhibit 10.4 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on October 8, 2015.
	10.15		Form of 21st Century Oncology Holdings, Inc. Class E Bonus Plan, incorporated herein by reference to Exhibit 10.5 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on October 8, 2015.
	10.16		Master Lease #3, dated December 12, 2011, among Theriac Rollup II, LLC and 21^st Century Oncology of Alabama, LLC, West Virginia Radiation Therapy Services, Inc. and 21^st Century Oncology, LLC for certain facilities located in Andalusia, Alabama, Princeton, West Virginia and Bonita Springs, Florida, incorporated by reference to Exhibit 10.122 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 22, 2012.
	10.17		Amended and Restated Master Lease, dated March 31, 2015, between Theriac Rollup, LLC and Arizona Radiation Therapy Management Services, Inc. for certain facilities located in Arizona.¥
	10.18		Amended and Restated Master Lease, dated March 31, 2015, between Theriac Rollup, LLC and 21^st Century Oncology of New Jersey, Inc. for a certain facility located in Hammonton, New Jersey.¥
	10.19		Amended and Restated Master Lease, dated March 31, 2015, between Theriac Rollup, LLC and Central Massachusetts Comprehensive Cancer Center, LLC for a certain facility located in Southbridge, Massachusetts.¥
	10.20		Amended and Restated Master Lease, dated March 31, 2015, between Theriac Rollup, LLC and Palms West Radiation Therapy, LLC for a certain facility located in Loxahatchee, Florida.¥
	10.21		Amended and Restated Master Lease, dated October 31, 2012, by and among Spirit SPE Portfolio 2012- 3, LLC, Specialists in Urology Surgery Center, LLC, Specialists in Urology, P.A. and 21^st Century Oncology, LLC, as a joining lessee under that certain Joinder and Assumption of Obligations Under Amended and Restated Master Lease Agreement, dated May 24, 2013, by and between Specialists in Urology, P.A. and 21^st Century Oncology, LLC for certain facilities located in Naples, Bonita Springs, Fort Myers and Cape Coral, Florida (incorporated herein by reference to Exhibit 10.59 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014) and as amended in the Second Amended and Restated Master Lease, dated November 10, 2014, by and among Spirit Master Funding VII, LLC, Specialists in Urology Surgery Center, LLC and 21st Century Oncology, LLC, incorporated herein by reference to Exhibit 10.26 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.

Exhibit Number			Description

	10.22		Master Lease Agreement, dated August 6, 2015, between the landlords named therein, the tenants named therein and Vidt Centro Médico S.A. and 21st Century Oncology, Inc. incorporated herein by reference to Exhibit 10.4 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 12, 2016.
	10.23		Third Amended and Restated Master Lease Agreement, dated December 14, 2015, between Store Master Funding VI, LLC and South Florida Radiation Oncology, LLC for certain facilities located in Jupiter, Fort Pierce, Vero Beach, Wellington, Boynton Beach, Palm Beach Gardens and Miami, Florida.¥
	10.24		Second Amended and Restated Master Lease, dated April 20, 2015, among HCP-RTS, LLC and 21^st Century Oncology, LLC, 21^st Century Oncology Management Services, Inc., 21^st Century Oncology of Kentucky, LLC, 21^st Century Oncology of El Segundo, LLC, Nevada Radiation Therapy Management Services, Inc., West Virginia Radiation Therapy Services, Inc., Jacksonville Radiation Therapy Services, Inc., California Radiation Therapy Management Services, Inc. and 21^st Century Oncology of Jacksonville, Inc. for certain facilities located in California, Florida, Kentucky, Nevada and West Virginia.¥
	10.25		Master Lease #2, dated August 29, 2011, between Theriac Rollup 2, LLC and 21^st Century Oncology—CHW, LLC for a certain facility located in Redding, California.¥
	10.26		Lease, dated October 4, 1996, as amended by that certain First Amendment to Lease, dated December 31, 2009, between 445 Partners LLC and North Carolina Radiation Enterprises, LLC for a certain facility located in Asheville, North Carolina incorporated herein by reference to Exhibit 10.28 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.27		Lease #4, dated December 20, 2012, as amended by that certain First Amendment to Lease #4, dated March 31, 2015, between Theriac-Macomb, LLC and Michigan Radiation Therapy Management Services, Inc. for a certain facility located in Macomb Township, Michigan.¥
	10.28		Lease #9, dated August 1, 2014, as amended by that certain Amendment to Lease #9, dated February 4, 2015, between Theriac Enterprises of Weaverville, LLC and North Carolina Radiation Therapy Management Services, Inc. for a certain facility located in Weaverville, North Carolina.¥
	10.29		Lease Agreement, dated October 1, 2002, between Plantation Radiation Associates and 21^st Century Oncology, LLC, f/k/a 21^st Century Oncology, Inc. for a certain facility located in Plantation, Florida, incorporated herein by reference to Exhibit 10.38 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.30		Lease #8, dated January 5, 2015, between Theriac Warwick, LLC and Southern New England Regional Cancer Center, LLC for a certain facility located in Warwick, Rhode Island.¥
	10.31		Lease Agreement, dated January 21, 2003, between Yonkers Radiation Enterprises, LLC and New York Radiation Therapy Management Services, Incorporated for a certain facility located in Yonkers, New York, incorporated herein by reference to Exhibit 10.39 to 21^st Century Oncology Holdings, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.32		Lease #6, dated December 20, 2013, between JRE—Casa Grande, LLC and Cancer Treatment Services Arizona, LLC for a certain facility in Casa Grande, Arizona.¥
	10.33		Lease, dated September 2015, between JRE—CBO 3, LLC and 21^st Century Oncology, LLC for a certain facility located in Fort Myers, Florida.¥

Exhibit Number			Description

	10.34		Lease #5, dated February 11, 2013, between Theriac Enterprises of Troy, LLC and Michigan Radiation Therapy Management Services, Inc. for a certain facility located in Troy, Michigan.¥
	10.35		Master Lease #3, dated May 3, 2010, between Theriac Enterprises of Pembroke Pines, LLC and 21^st Century Oncology, LLC for a certain facility located in Pembroke Pines, Florida.¥
	10.36		Administrative Services Agreement, dated January 1, 1997, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2008, Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between New York Radiation Therapy Management Services, Incorporated and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), Addendum to Administrative Services Agreement, dated January 1, 2011, between New York Radiation Therapy Management Services, LLC f/k/a New York Radiation Therapy Management Services, Inc. and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology, Inc.'s Annual Report on Form 10-K filed on March 11, 2011), Addendum to Administrative Services Agreement, dated January 1, 2012, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 22, 2012), Addendum to Administrative Services Agreement, dated January 1, 2013, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.49 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 28, 2013), Addendum to Administrative Services Agreement, dated January 1, 2014, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to Exhibit 10.11 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014) and Addendum to Administrative Services Agreement, dated January 1, 2015, between New York Radiation Therapy Management Services, LLC and Yonkers Radiation Medical Practice, P.A, incorporated herein by reference to Exhibit 10.27 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.

Exhibit Number			Description

	10.37		Administrative Services Agreement, dated January 1, 2002, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2002, Addendum to Administrative Services Agreement, dated January 1, 2004, Addendum to Administrative Services Agreement, dated January 1, 2005, Addendum to Administrative Services Agreement, dated January 1, 2006, Addendum to Administrative Services Agreement, dated January 1, 2008, Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between North Carolina Radiation Therapy Management Services, LLC f/k/a North Carolina Radiation Therapy Management Services, Inc. and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), Addendum to Administrative Services Agreement, dated January 1, 2011, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology, Inc.'s Annual Report on Form 10-K filed on March 11, 2011), Addendum to Administrative Services Agreement, dated January 1, 2012, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 22, 2012), Addendum to Administrative Services Agreement, dated January 1, 2013, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 28, 2013), Addendum to Administrative Services Agreement, dated January 1, 2014, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.12 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014), Addendum to Administrative Services Agreement, dated July 1, 2014, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.4 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on August 28, 2014) and Addendum to Administrative Services Agreement, dated January 1, 2015, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North Carolina, P.A, incorporated herein by reference to Exhibit 10.28 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	10.38		Administrative Services Agreement, dated January 9, 1998, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 1999, Addendum to Administrative Services Agreement, dated January 1, 2000, Addendum to Administrative Services Agreement, dated January 1, 2001, Addendum to Administrative Services Agreement, dated January 1, 2002, Addendum to Administrative Services Agreement, dated January 1, 2003, Addendum to Administrative Services Agreement, dated January 1, 2004, Addendum to Administrative Services Agreement, dated January 1, 2005, Addendum to Administrative Services Agreement, dated January 1, 2006, and First Amendment to Administrative Services Agreement, dated August 1, 2006, between Nevada Radiation Therapy Management Services, Inc. and Michael J. Katin, M.D., Prof. Corp., incorporated herein by reference to Exhibit 10.51 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.

Exhibit Number			Description

	10.39		Administrative Services Agreement, dated October 31, 1998, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2007, Addendum to Administrative Services Agreement, dated January 1, 2008, Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between Maryland Radiation Therapy Management Services LLC f/k/a Maryland Radiation Therapy Management Services, Inc. and Katin Radiation Therapy, P.A. (incorporated herein by reference to Exhibit 10.52 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010) and Addendum to Administrative Services Agreement, dated January 1, 2011, between Maryland Radiation Therapy Management Services, LLC and Katin Radiation Therapy, P.A. (incorporated herein by reference to Exhibit 10.52 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 11, 2011).
	10.40		Administrative Services Agreement, dated August 1, 2003, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2004, and Addendum to Administrative Services Agreement, dated January 1, 2005, between California Radiation Therapy Management Services, Inc. and 21^st Century Oncology of California, a Medical Corporation, incorporated herein by reference to Exhibit 10.55 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.41		Management Services Agreement, dated May 1, 2006, between 21^st Century Oncology of California, a Medical Corporation and California Radiation Therapy Management Services, Inc., as successor by assignment pursuant to that certain Assignment and Assumption Agreement, dated May 1, 2006, between California Radiation Therapy Management Services, Inc. and LHA, Inc., as amended by that certain Addendum to Management Services Agreement, dated August 1, 2006, Second Amendment to Management Services Agreement, dated November 1, 2006, and Third Addendum to Management Services Agreement, dated August 1, 2007, for premises in Palm Desert, Santa Monica and Beverly Hills, California, incorporated herein by reference to Exhibit 10.56 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.
	10.42		Management Services Agreement, dated June 1, 2005, as amended by that certain Addendum, dated January 1, 2006, between New England Radiation Therapy Management Services, Inc. and Massachusetts Oncology Services, P.C. (incorporated herein by reference to Exhibit 10.59 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010) and Addendum, dated January 1, 2007, between New England Radiation Therapy Management Services, Inc. and Massachusetts Oncology Services, P.C. (incorporated herein by reference to Exhibit 10.19 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014).
	10.43		Form of Indemnification Agreement (Directors and/or Officers), incorporated herein by reference to Exhibit 10.103 to 21^st Century Oncology, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+
	10.44		Form of Directors and Officers Indemnification Agreement, incorporated herein by reference to Exhibit 10.6 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015.+
	10.45		Facility and Management Services Agreement, dated October 18, 2013, by and between U.S. Cancer Care, Inc. and 21^st Century Oncology, LLC for certain facilities located in Florida, incorporated herein by reference to Exhibit 10.60 to 21st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.

Exhibit Number			Description

	10.46		Facility and Management Services Agreement, dated October 18, 2013, by and between U.S. Cancer Care, Inc. and 21^st Century Oncology of California, a Medical Corporation for certain facilities located in California (incorporated herein by reference to Exhibit 10.61 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014), as amended by that certain Addendum to Facility and Management Services Agreement, dated January 1, 2015, between U.S. Cancer Care, Inc. and 21^st Century Oncology of California, a Medical Corporation incorporated herein by reference to Exhibit 10.40 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 27, 2015.
	10.47		Facilities and Management Services Agreement, dated July 15, 2013, by and between 21^st Century Oncology of New Jersey, Inc. and CancerCare of Southern New Jersey, P.C., incorporated herein by reference to Exhibit 10.62 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.48		Management Services Agreement, dated February 16, 2006, as amended by that certain Amendment Number 1 to Management Services Agreement, dated December 1, 2011, Amendment Number 2 to Management Services Agreement, dated March 6, 2012 and Amendment Number 3 to Management Services Agreement, dated October 1, 2013, by and between U.S. Cancer Care, Inc. and Coastal Radiation Oncology Medical Group, Inc., incorporated herein by reference to Exhibit 10.63 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on May 1, 2014.
	10.49		Facility and Management Services Agreement, dated January 2, 2015, between Northwest Cancer Care Management Company, LLC and Northwest Cancer Care Associates, P.C.¥
	10.50		Seventh Amended and Restated Limited Liability Company Agreement of 21st Century Oncology Investments, LLC, dated as of October 7, 2015, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on October 8, 2015.
	10.51		Subscription Agreement, dated September 26, 2014, by and among 21^st Century Oncology Investments, LLC, 21^st Century Oncology Holdings, Inc., 21^st Century Oncology, Inc. and Canada Pension Plan Investment Board, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	10.52		Warrant Agreement, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	10.53		Second Amended and Restated Securityholders Agreement, dated as of September 26, 2014, by and among 21^st Century Oncology Investments, LLC, 21^st Century Oncology Holdings, Inc. and the other parties thereto, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on September 26, 2014.
	10.54		Amended and Restated Management Agreement, dated September 26, 2014, by and among 21^st Century Oncology, Inc., 21^st Century Oncology Holdings, Inc., 21^st Century Oncology Investments, LLC and Vestar Capital Partners, incorporated herein by reference to Exhibit 10.5 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 5, 2015.
	10.55		Assumption Agreement dated as of September 15, 2015, by and among South Florida Medicine, LLC, Associates in Radiation Oncology Services, LLC, Boynton Beach Radiation Oncology, L.L.C, Treasure Coast Medicine, LLC, SFRO Holdings, LLC, and South Florida Radiation Oncology, LLC, incorporated herein by reference to Exhibit 10.3 to 21^st Century Oncology Holdings, Inc.'s Quarterly Report on Form 10-Q filed on February 12, 2016.

Exhibit Number			Description

	10.56		Settlement Agreement, dated December 16, 2015, entered into by, among others, 21st Century Oncology, LLC, the United States of America and Ms. Barnes, incorporated herein by reference to Exhibit 10.1 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 22, 2015.
	10.57		Corporate Integrity Agreement, dated December 16, 2015, entered into by 21st Century Oncology, LLC and the Office of Inspector General of the Department of Health and Human Services, incorporated herein by reference to Exhibit 10.2 to 21^st Century Oncology Holdings, Inc.'s Current Report on Form 8-K filed on December 22, 2015.
	12.1		Statement Re: Computation of Ratio of Earnings to Fixed Charges.¥
	14.1		Code of Ethics, incorporated herein by reference to Exhibit 14.1 to 21^st Century Oncology Holdings, Inc.'s Annual Report on Form 10-K filed on March 11, 2011.
	21.1		List of Subsidiaries.¥
	31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.¥
	31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.¥
	32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.¥
	32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.¥
	99.1		Supplemental Consolidating Financial Information.¥
	101		The following financial information from 21^st Century Oncology Holdings, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets at December 31, 2015 and December 31, 2014, (ii) the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2015, 2014 and 2013, (iii) the Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, (iv) the Consolidated Statements of Changes in Equity for the years ended December 31, 2015, 2014 and 2013 and (v) Notes to Consolidated Financial Statements.¥


Delaware (State or Other Jurisdiction of Incorporation or Organization)		26-1747745 (I.R.S. Employer Identification No.)
2270 Colonial Boulevard Fort Myers, Florida (Address Of Principal Executive Offices)		33907 (Zip Code)


Large accelerated filer o		Accelerated filer o		Non-Accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting Company o

		Requirement at December 31, 2015		Level at December 31, 2015

Maximum permitted first lien leverage ratio		<7.50 to 1.00		6.41 to 1.00

Contractual Cash Obligations	Total		Less Than 1 Year		2 - 3 Years		4 - 5 Years		After 5 Years

	(in thousands)
Senior secured credit agreement revolver portion(1)(a)	$	76,698		3,853		7,707		65,138		—
Senior secured credit agreement term portion(2)(a)		849,171		45,403		89,617		88,031		626,120
Senior notes(3)(a)		650,400		39,600		79,200		79,200		452,400
Senior secured notes(4)(a)		497		52		445		—		—
Other notes and capital leases(5)		93,127		31,309		30,637		30,671		510
Operating lease obligations(6)		563,232		61,304		113,642		98,791		289,495
Finance obligations(7)		17,442		1,488		2,813		2,874		10,267

Total contractual cash obligations	$	2,250,567	$	183,009	$	324,061	$	364,705	$	1,378,792

		Page

*Audited Consolidated Financial Statements*
Report of Independent Registered Public Accounting Firm—Ernst & Young LLP		F-2
Report of Independent Registered Public Accounting Firm—Deloitte & Touche LLP		F-3
Consolidated Financial Statements:
Consolidated Balance Sheets at December 31, 2015 and 2014		F-4
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2015, 2014 and 2013		F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013		F-6
Consolidated Statements of Changes in Equity (Deficit) for the Years Ended December 31, 2015, 2014 and 2013		F-8
Notes to Consolidated Financial Statements		F-9


ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015


PART I
Item 1.	Business	1
Item 1A.	Risk Factors	25
Item 1B.	Unresolved Staff Comments	44
Item 2.	Properties	44
Item 3.	Legal Proceedings	45
Item 4.	Mine Safety Disclosures	47
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	48
Item 6.	Selected Financial Data	49
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	52
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	89
Item 8.	Financial Statements and Supplementary Data	89
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	89
Item 9A.	Controls and Procedures	90
Item 9B.	Other Information	94
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	95
Item 11.	Executive Compensation	100
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	113
Item 13.	Certain Relationships and Related Transactions, and Director Independence	114
Item 14.	Principal Accountant Fees and Services	120
PART IV
Item 15.	Exhibits and Financial Statement Schedules	121
	Index to Consolidated Financial Statements	F-1
SIGNATURES
EXHIBIT INDEX

State		Country

Alabama	2	Argentina	25
Arizona	5	Colombia	1
California	23	Costa Rica	2
Florida	60	Dominican Republic	3
Indiana	4	El Salvador	1
Kentucky	5	Guatemala	2
Maryland	4	Mexico	2

Massachusetts	2	Total International	36



Michigan	6
Nevada	4
New Jersey	4
New York	3
North Carolina	14
Rhode Island	4
South Carolina	1
Washington	1
West Virginia	3

Total U.S. Domestic	145



Radiation therapy centers at beginning of period	180
Internally developed / reopened	2
Internally (consolidated / closed / sold)	(6	)
Acquired	4
Hospital-based / other groups	1

Radiation therapy centers at period end	181

		Salary		Bonus(1)		Stock Awards(2)		Non-Equity Incentive Plan Compensation		Other Annual Compensation			Total

Daniel E. Dosoretz, M.D.,	2015	$	1,246,153	$	25,246	$	2,166,736	$	660,000	$	87,896	(3)	$	4,186,031
Chief Executive Officer and	2014		1,047,690		37,086		—		850,000		179,363	(3)		2,114,139
Director
LeAnne M. Stewart,	2015		137,019		—		96,141		190,000		8			423,168
Chief Financial Officer	2014		—		—		—		—		—			—
Constantine A. Mantz, M.D.,	2015		1,682,308		327,874		64,094		—		310			2,074,586
Chief Medical Officer	2014		1,730,770		283,206		—		—		180			2,014,156

	Stock Awards

	Equity Incentive Plan Awards
	Number of Earned Shares, Units or Other Rights That Have Vested (#)	Market or Payout Value of Earned Shares, Units or Other Rights That Have Vested ($)
Daniel E. Dosoretz, M.D.,	10 Class D Units(a)	$	143,368	(b)
Chief Executive Officer and Director	164,473 Class E Units(a)		29,605	(b)
LeAnne M. Stewart,	123,355 Class E Units(a)		22,204	(b)
Chief Financial Officer
Constantine A. Mantz, M.D.,	82,237 Class E Units(a)		14,803	(b)
Chief Medical Officer

		Fees Earned or Paid in Cash ($)(2)		Stock Awards ($)		Non-Equity Incentive Plan Compensation ($)		All Other Annual Compensation ($)			Total ($)

Howard M. Sheridan, M.D.	2015	$	—	$	—	$	—	$	110,303	(1)	$	110,303
Director	2014		—		—		—		173,549	(1)		173,549
Robert W. Miller	2015		5,208		15,000		—		—			20,208
Director	2014		—		—		—		—			—

	Stock Awards

	Equity Incentive Plan Awards
	Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Howard M. Sheridan, M.D.	— —		—
Director
Robert W. Miller	20,000 Class E Units(a)		3,600	(b)
Director

Type of Fees	2015		2014

Audit fees	$	4,639,761	$	3,680,000
Audit-related fees		—		505,000
Tax fees		14,818		507,000
All other fees		—		—

Total	$	4,654,579	$	4,692,000


Buildings and leasehold improvements		10 - 50 years
Office, computer, and telephone equipment		3 - 10 years
Medical and medical testing equipment		5 - 10 years
Automobiles and vans		5 years

	21st Century Oncology Holdings, Inc. Shareholder									Noncontrolling Interests

(in thousands):	Foreign Currency Translation Adjustments			Net Periodic Benefit Cost of Pension Plan			Total			Foreign Currency Translation Adjustments			Other Comprehensive Loss
Balance, December 31, 2012	$	(11,823	)	$	—		$	(11,823	)	$	(1,375	)	$
Other comprehensive loss		(14,279	)		—			(14,279	)		(1,534	)		(15,813	)

Balance, December 31, 2013	$	(26,102	)	$	—		$	(26,102	)	$	(2,909	)	$	(15,813	)

Other comprehensive loss		(10,727	)		(91	)		(10,818	)		(1,371	)		(12,189	)

Balance, December 31, 2014	$	(36,829	)	$	(91	)	$	(36,920	)	$	(4,280	)	$	(12,189	)

Other comprehensive loss		(17,288	)		(366	)		(17,654	)		(2,395	)		(20,049	)

Balance, December 31, 2015	$	(54,117	)	$	(457	)	$	(54,574	)	$	(6,675	)	$	(20,049	)


Level 1	—	Quoted prices for identical assets and liabilities in active markets.
Level 2	—	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3	—	Unobservable inputs for the asset or liability.

(in thousands):	December 31, 2015			December 31, 2014

Land	$	1,686		$	1,795
Buildings and leasehold improvements		94,022			85,653
Office, computer, and telephone equipment		137,698			114,669
Medical and medical testing equipment		322,253			300,511
Automobiles and vans		1,107			1,435

		556,766			504,063
Less: accumulated depreciation		(315,384	)		(241,697	)

		241,382			262,366
Construction-in-progress		8,823			13,373
Foreign currency translation		(11,620	)		(6,169	)

	$	238,585		$	269,570

(in thousands):	December 31, 2015			December 31, 2014

Medical and medical testing equipment	$	85,705		$	79,575
Leasehold improvements		85			85
Office, computer, and telephone equipment		973			1,708
Automobiles and vans		67			67
Less: accumulated depreciation		(31,803	)		(20,391	)

	$	55,027		$	61,044

	December 31, 2015

(in thousands):	Gross		Impairment Loss		Accumulated Amortization			Foreign Currency Translation			Net
*Intangible assets subject to amortization*
Management service agreements	$	57,739	$	—	$	(12,053	)	$	—		$	45,686
Noncompete agreements		77,862		—		(67,432	)		(80	)		10,350
Hospital contracts		21,246		—		(4,898	)		(9,159	)		7,189
Trade names		6,738		—		(5,980	)		—			758
*Indefinite-lived intangible assets*
Trade names		5,858		—		—			(871	)		4,987
Certificates of need		1,145		—		—			—			1,145

Balance, end of period	$	170,588	$	—	$	(90,363	)	$	(10,110	)	$	70,115


2016	$	11,177
2017		9,237
2018		8,285
2019		5,987
2020		5,007
Thereafter		24,290



*Acquisition Consideration*
Cash	$	432
Term B Loan (net of original issue discount)		57,300
Seller financing note		2,000
Working capital settlement		(5,333	)
Fair value of contingent earn-out		11,052

Total acquisition consideration	$	65,451



*Acquisition Consideration Allocation*
Accounts receivable	$	12,836
Other current assets		2,089
Property and equipment		20,750
Goodwill		129,804
Intangible assets—tradename (3 year life)		2,100
Intangible assets—non-compete (5 year life)		9,400
Other noncurrent assets		910
Current liabilities		(26,175	)
Long-term debt		(42,021	)
Other long-term liabilities		(4,317	)
Noncontrolling interest—nonredeemable		(39,925	)

Acquisition consideration allocation	$	65,451



*Acquisition Consideration*
Cash	$	42,250
11.75% senior secured notes due January 2017		82,550

Total acquisition consideration	$	124,800


2014	$	5,563
2015		5,563
2016		5,464
2017		5,464
2018		5,195
Thereafter		29,564

Description:	Beginning Balance			Tax Expense			Other Comprehensive Income		Ending Balance

Fiscal Year 2013	$	(82.6	)	$	(14.3	)	$	—	$	(96.9	)
Fiscal Year 2014		(96.9	)		(84.8	)		—		(181.7	)
Fiscal Year 2015		(181.7	)		(45.4	)		—		(227.1	)

	December 31, 2015			December 31, 2014			December 31, 2013

Gross unrecognized tax benefits at January 1	$	645		$	1,046		$	854
Gross increases—tax positions in current period		63			222			196
Lapse of statute of limitations and settlements		(34	)		(623	)		(4	)

Gross unrecognized tax benefits at December 31	$	674		$	645		$	1,046

(in thousands):	December 31, 2015		December 31, 2014

Accrued payroll and payroll related deductions and taxes	$	19,051	$	23,630
Accrued compensation arrangements		30,010		30,867
Accrued interest		7,359		16,229
Accrued Medicare investigative matters		34,694		5,143
Accrued other		20,539		12,735

Total accrued expenses	$	111,653	$	88,604


2016	$	32,908
2017		27,219
2018		13,410
2019		32,194
2020		70,068
Thereafter		936,956

		1,112,755
Less unamortized debt discount		(5,882	)
Less unaccreted paid in kind		(6,504	)
Less embedded derivative		(2,876	)

	$	1,097,493

		Requirement at December 31, 2015			Level at December 31, 2015

Maximum permitted first lien leverage ratio			< 7.50 to 1.00			6.41 to 1.00

(in thousands):	Fair Value		Carrying Value

$610.0 million senior secured credit facility—(Term Loan Facility) due April 30, 2022	$	509,838	$	601,452
$360.0 million Senior Notes due May 1, 2023	$	262,800	$	360,000
$75.0 million Senior Secured Notes due January 15, 2017	$	443	$	443

(in thousands):	Fair Value		Carrying Value

$90.0 million senior secured credit facility—(Term Facility) due October 15, 2016	$	88,763	$	88,704
$380.1 million Senior Subordinated Notes due April 15, 2017	$	349,646	$	378,407
$350.0 million Senior Secured Second Lien Notes due January 15, 2017	$	353,500	$	349,275
$75.0 million Senior Secured Notes due January 15, 2017	$	79,125	$	75,000

			Fair Value Measurements at Reporting Date Using

(in thousands):	December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock	$	17,883	$	—	$	—	$	17,883



Other current liabilities
Embedded derivative features of SFRO PIK Notes	$	2,230	$	—	$	—	$	2,230



Earn-out liabilities	$	193	$	—	$	—	$	193



Liabilities
Embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock	$	19,911	$	—	$	—	$	19,911

(in thousands):	Fair value December 31, 2014		Instruments Issued (Paid)			Change in Fair Value			Fair value December 31, 2015

Assets
Embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock	$	—	$	(72	)	$	17,955		$	17,883



Other current liabilities
Embedded derivative features of SFRO PIK Notes	$	—	$	3,330		$	(1,100	)	$	2,230



Earn-out liabilities	$	9,736	$	(7,764	)	$	(1,779	)	$	193



Liabilities
Embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock	$	15,843	$	3,004		$	1,064		$	19,911



Other long-term liabilities
Earn-out liabilities	$	11,853	$	(11,821	)	$	(32	)	$	—

(in thousands):	Fair value December 31, 2013		Instruments Issued (Paid)		Change in Fair Value		Fair value December 31, 2014

Other current liabilities
Earn-out liabilities	$	1,230	$	8,506	$	—	$	9,736



Liabilities
Embedded derivative and other financial instrument features of Series A convertible redeemable preferred stock	$	—	$	15,006	$	837	$	15,843



Other long-term liabilities
Earn-out liabilities	$	7,680	$	2,546	$	1,627	$	11,853