Acadia Healthcare Company, Inc.

Previous wording

political conditions that are out of our control;

Current wording

political conditions that are out of our control, including any effects that the ongoing U.S. government shutdown may have on financial markets and macroeconomic conditions;

Previous wording

the impact of claims brought against us or our facilities including claims for damages for personal injuries, medical malpractice, overpayments, breach of contract, securities law violations, tort and employee related claims;

Current wording

the impact of class action and other claims brought against us or our facilities including claims for damages for personal injuries, medical malpractice, overpayments, breach of contract, securities law violations, tort and employee related claims;

Previous wording

Our business strategy is to become the indispensable behavioral healthcare provider for the high-acuity and complex needs patient population. We are committed to providing the communities we serve with high-quality, cost-effective behavioral healthcare services, while growing our business, increasing profitability and creating long-term value for our stockholders. This strategy includes five growth pathways: expansions of existing facilities, joint venture partnerships, de novo facilities, acquisitions and expansion across our continuum of care. At June 30, 2025, we operated 274 behavioral healthcare facilities with approximately 12,100 beds in 39 states and Puerto Rico. During the six months ended June 30, 2025, we added 479 beds, consisting of 191 beds added to existing facilities and 288 beds added through the opening of one wholly-owned facility and one joint venture facility, and we opened eleven CTCs.

Current wording

Our business strategy is to become the indispensable behavioral healthcare provider for the high-acuity and complex needs patient population. We are committed to providing the communities we serve with high-quality, cost-effective behavioral healthcare services, while growing our business, increasing profitability and creating long-term value for our stockholders. This strategy includes five growth pathways: expansions of existing facilities, joint venture partnerships, de novo facilities, acquisitions and expansion across our continuum of care. At September 30, 2025, we operated 278 behavioral healthcare facilities with approximately 12,500 beds in 40 states and Puerto Rico. During the nine months ended September 30, 2025, we added 908 beds, consisting of 274 beds added to existing facilities and 634 beds added through the opening of one wholly-owned facility and four joint venture facilities, and we opened 14 CTCs.

Previous wording

We believe that we are well positioned to help meet the growing demand for behavioral healthcare services and recorded revenue growth of 4.8% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Similar with many other healthcare providers and other industries across the country, we continue to navigate a tight labor market. While we experienced higher wage inflation compared to historical averages in recent years, we continue to see stability in our labor costs and our proactive focus helps us manage through this environment. We remain focused on ensuring that we have the level of staff to meet the demand in our markets across 39 states and Puerto Rico.

Current wording

We believe that we are well positioned to help meet the growing demand for behavioral healthcare services and recorded revenue growth of 4.7% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Consistent with many other healthcare providers and other industries across the country, we continue to navigate a tight labor market. While we experienced higher wage inflation compared to historical averages in recent years, we continue to see stability in our labor costs, and our proactive focus helps us manage through this environment. We remain focused on ensuring that we have the level of staff to meet the demand in our markets across 40 states and Puerto Rico.

Previous wording

The following table sets forth percent changes in same facility operating data for the three and six months ended June 30, 2025 compared to the same periods in 2024:

Current wording

The following table sets forth percent changes in same facility operating data for the three and nine months ended September 30, 2025 compared to the same periods in 2024:

Previous wording

Same facility results reflect adjustments that are intended to provide the specific presentation described above and that may be irregular in timing from period to period related to newly opened or acquired facilities or facilities that we no longer operate, and may omit certain results that investors may view as important. Same facility results may therefore not be indicative of the overall performance of our business and should be not be considered as an alternative for net income or any other performance measures derived in accordance with GAAP.

Current wording

Same facility results reflect adjustments that are intended to provide the specific presentation described above and that may be irregular in timing from period to period related to newly opened or acquired facilities or facilities that we no longer operate, and may omit certain results that investors may view as important. Same facility results may therefore not be indicative of the overall performance of our business, and should not be considered as an alternative for net income or any other performance measures derived in accordance with GAAP.

Previous wording

Revenue. Revenue increased $75.6 million, or 4.8%, to $1,639.7 million for the six months ended June 30, 2025 from $1,564.1 million for the six months ended June 30, 2024. The six months ended June 30, 2025, included $65.6 million of revenue for one state government program based on timing of program approval. Same facility revenue increased $88.8 million, or 5.8%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, resulting from same facility growth in revenue per day of 3.8%, same facility growth in patient days of 2.0%, and same facility growth in admissions of 1.7%. Consistent with same facility revenue growth in 2024, the growth in same facility patient days for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 resulted from the addition of beds to our existing facilities and ongoing demand for our services.

Current wording

Revenue. Revenue increased $35.9 million, or 4.4%, to $851.6 million for the three months ended September 30, 2025 from $815.6 million for the three months ended September 30, 2024. Same facility revenue increased $29.5 million, or 3.7%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, resulting from same facility growth in revenue per day of 2.3%, same facility growth in patient days of 1.3% and same facility growth in admissions of 3.3%. Consistent with same facility revenue growth in 2024, the growth in same facility patient days for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 resulted from the addition of beds to our existing facilities and ongoing demand for our services.

Previous wording

Salaries, wages and benefits. Salaries, wages and benefits (“SWB”) expense was $452.4 million for the three months ended June 30, 2025 compared to $419.8 million for the three months ended June 30, 2024, an increase of $32.6 million. SWB expense included $10.5 million and $8.9 million of equity-based compensation expense for the three months ended June 30, 2025 and 2024, respectively. Excluding equity-based compensation expense, SWB expense was $441.9 million, or 50.8% of revenue, for the three months ended June 30, 2025, compared to $410.9 million, or 51.6% of revenue, for the three months ended June 30, 2024. Same facility SWB expense was $392.8 million for the three months ended June 30, 2025, or 46.1% of revenue, compared to $372.2 million for the three months ended June 30, 2024, or 47.9% of revenue.

Current wording

Salaries, wages and benefits. Salaries, wages and benefits (“SWB”) expense was $462.2 million for the three months ended September 30, 2025 compared to $428.1 million for the three months ended September 30, 2024, an increase of $34.1 million. SWB expense included $6.0 million and $9.5 million of equity-based compensation expense for the three months ended September 30, 2025 and 2024, respectively. Excluding equity-based compensation expense, SWB expense was $456.2 million, or 53.6% of revenue, for the three months ended September 30, 2025, compared to $418.6 million, or 51.3% of revenue, for the three months ended September 30, 2024. Same facility SWB expense was $404.0 million for the three months ended September 30, 2025, or 48.8% of revenue, compared to $380.0 million for the three months ended September 30, 2024, or 47.6% of revenue.

Previous wording

Professional fees. Professional fees were $50.0 million for the three months ended June 30, 2025, or 5.7% of revenue, compared to $48.1 million for the three months ended June 30, 2024, or 6.0% of revenue. Same facility professional fees were $42.1 million for the three months ended June 30, 2025, or 4.9% of revenue, compared to $41.4 million for the three months ended June 30, 2024, or 5.3% of revenue.

Current wording

Professional fees. Professional fees were $51.5 million for the three months ended September 30, 2025, or 6.0% of revenue, compared to $48.5 million for the three months ended September 30, 2024, or 5.9% of revenue. Same facility professional fees were $43.1 million for the three months ended September 30, 2025, or 5.2% of revenue, compared to $42.2 million for the three months ended September 30, 2024, or 5.3% of revenue.

Previous wording

Supplies. Supplies expense was $28.5 million for the three months ended June 30, 2025, or 3.3% of revenue, compared to $27.9 million for the three months ended June 30, 2024, or 3.5% of revenue. Same facility supplies expense was $27.6 million for the three months ended June 30, 2025, or 3.2% of revenue, compared to $27.1 million for the three months ended June 30, 2024, or 3.5% of revenue.

Current wording

Supplies. Supplies expense was $30.4 million for the three months ended September 30, 2025, or 3.6% of revenue, compared to $29.6 million for the three months ended September 30, 2024, or 3.6% of revenue. Same facility supplies expense was $29.2 million for the three months ended September 30, 2025, or 3.5% of revenue, compared to $28.8 million for the three months ended September 30, 2024, or 3.6% of revenue.

Previous wording

Rents and leases. Rents and leases were $12.6 million for the three months ended June 30, 2025, or 1.5% of revenue, compared to $11.9 million for the three months ended June 30, 2024, or 1.5% of revenue. Same facility rents and leases were $11.2 million for the three months ended June 30, 2025, or 1.3% of revenue, compared to $10.5 million for the three months ended June 30, 2024, or 1.4% of revenue.

Current wording

Rents and leases. Rents and leases were $11.7 million for the three months ended September 30, 2025, or 1.4% of revenue, compared to $12.4 million for the three months ended September 30, 2024, or 1.5% of revenue. Same facility rents and leases were $10.5 million for the three months ended September 30, 2025, or 1.3% of revenue, compared to $11.1 million for the three months ended September 30, 2024, or 1.4% of revenue.

Previous wording

Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses. Other operating expenses were $134.4 million for the three months ended June 30, 2025, or 15.5% of revenue, compared to $109.7 million for the three months ended June 30, 2024, or 13.8% of revenue. Same facility other operating expenses were $121.5 million for the three months ended June 30, 2025, or 14.3% of revenue, compared to $102.2 million for the three months ended June 30, 2024, or 13.1% of revenue.

Current wording

Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses. Other operating expenses were $128.8 million for the three months ended September 30, 2025, or 15.1% of revenue, compared to $112.1 million for the three months ended September 30, 2024, or 13.8% of revenue. Same facility other operating expenses were $116.2 million for the three months ended September 30, 2025, or 14.0% of revenue, compared to $105.2 million for the three months ended September 30, 2024, or 13.2% of revenue.

Previous wording

Depreciation and amortization. Depreciation and amortization expense was $49.0 million for the three months ended June 30, 2025, or 5.6% of revenue, compared to $36.1 million for the three months ended June 30, 2024, or 4.5% of revenue.

Current wording

Depreciation and amortization. Depreciation and amortization expense was $47.5 million for the three months ended September 30, 2025, or 5.6% of revenue, compared to $37.6 million for the three months ended September 30, 2024, or 4.6% of revenue.

Previous wording

Interest expense. Interest expense was $35.1 million for the three months ended June 30, 2025 compared to $29.2 million for the three months ended June 30, 2024. The increase in interest expense was primarily the result of interest on the 7.375% Senior Notes issued during the first quarter of 2025.

Current wording

Interest expense. Interest expense was $36.6 million for the three months ended September 30, 2025 compared to $29.9 million for the three months ended September 30, 2024. The increase in interest expense was primarily the result of interest on the 7.375% Senior Notes issued during the first quarter of 2025.

Previous wording

Transaction, legal and other costs. Transaction, legal and other costs were $64.4 million for the three months ended June 30, 2025, compared to $6.1 million for the three months ended June 30, 2024. Transaction, legal and other costs represent legal, accounting, government investigation, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective period, as summarized below (in thousands).

Current wording

Transaction, legal and other costs. Transaction, legal and other costs were $42.9 million for the three months ended September 30, 2025, compared to $8.2 million for the three months ended September 30, 2024. Transaction, legal and other costs represent legal, accounting, government investigation, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective period, as summarized below (in thousands).

Previous wording

Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 9 — Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements. Termination and restructuring costs include costs, net of gains, incurred related to workforce reductions, contract amendments, and the closure and disposition of certain facilities, including related lease terminations. Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($0.4 million and $1.4 million for the three months ended June 30, 2025 and 2024, respectively); legal and settlement costs incurred related to certain litigation not included in government investigations ($0.4 million for both the three months ended June 30, 2025 and 2024, respectively); and direct costs associated with acquisitions ($0.2 million for the three months ended June 30, 2024). Management transition costs include certain costs associated with the transition of the leadership team, including the design and implementation of the revised organizational structure. Management transition costs incurred with the transition of our Chief Executive Officer beginning in the first quarter of 2022 concluded in the fourth quarter of 2024.

Current wording

Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 9 — Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements. Termination and restructuring costs include costs, net of gains, incurred related to workforce reductions, contract amendments, and the closure and disposition of certain facilities, including related lease terminations. Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($0.5 million and $1.9 million for the three months ended September 30, 2025 and 2024, respectively); legal and settlement costs incurred related to certain litigation not included in government investigations ($0.4 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively); and direct costs associated with acquisitions ($0.1 million and $1.0 million for the three months ended September 30, 2025 and 2024, respectively). Management transition costs include certain costs associated with the transition of the leadership team, including the design and implementation of the revised organizational structure. Management transition costs incurred with the transition of our Chief Executive Officer beginning in the first quarter of 2022 concluded in the fourth quarter of 2024.

Previous wording

Provision for income taxes. For the six months ended June 30, 2025, the provision for income taxes was $16.5 million, reflecting an effective tax rate of 26.0%, compared to $45.7 million, reflecting an effective tax rate of 22.3%, for the six months ended June 30, 2024. The increase in the effective tax rate for the six months ended June 30, 2025 was primarily attributable to our lower pre-tax results for the six months ended June 30, 2025, which yields higher volatility in the items impacting the effective tax rate when compared to prior periods and decreased deductions related to equity-based compensation in the current year. In addition, the six months ended June 30, 2024 included a tax benefit related to a legal entity restructuring.

Current wording

Provision for income taxes. For the three months ended September 30, 2025, the provision for income taxes was $1.7 million, reflecting an effective tax rate of 4.2%, compared to $27.2 million, reflecting an effective tax rate of 27.6%, for the three months ended September 30, 2024. The decrease in the effective tax rate for the three months ended September 30, 2025 was primarily attributable to the Company’s lower pre-tax results for the three months ended September 30, 2025, which yields higher volatility in the items impacting the effective tax rate when compared to prior periods and the release of uncertain tax positions in the current year.

Previous wording

Revenue. Revenue increased $73.2 million, or 9.2%, to $869.2 million for the three months ended June 30, 2025 from $796.0 million for the three months ended June 30, 2024. The three months ended June 30, 2025, included $65.6 million of revenue for one state government program based on timing of program approval. Same facility revenue increased $73.5 million, or 9.5%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, resulting from same facility growth in revenue per day of 7.5%, same facility growth in patient days of 1.8% and same facility growth in admissions of 1.4%. Consistent with same facility revenue growth in 2024, the growth in same facility patient days for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 resulted from the addition of beds to our existing facilities and ongoing demand for our services.

Current wording

Revenue. Revenue increased $111.6 million, or 4.7%, to $2,491.3 million for the nine months ended September 30, 2025 from $2,379.7 million for the nine months ended September 30, 2024. The nine months ended September 30, 2025, included $65.6 million of revenue for one state government program based on timing of program approval. Same facility revenue increased $118.3 million, or 5.1%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, resulting from same facility growth in revenue per day of 3.3%, same facility growth in patient days of 1.8%, and same facility growth in admissions of 2.3%. Consistent with same facility revenue growth in 2024, the growth in same facility patient days for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 resulted from the addition of beds to our existing facilities and ongoing demand for our services.

Previous wording

Salaries, wages and benefits. SWB expense was $897.7 million for the six months ended June 30, 2025 compared to $837.3 million for the six months ended June 30, 2024, an increase of $60.4 million. SWB expense included $19.2 million and $17.5 million of equity-based compensation expense for the six months ended June 30, 2025 and 2024. Excluding equity-based compensation expense, SWB expense was $878.5 million, or 53.6% of revenue, for the six months ended June 30, 2025, compared to $819.8 million, or 52.4% of revenue, for the six months ended June 30, 2024. Same facility SWB expense was $782.8 million for the six months ended June 30, 2025, or 48.6% of revenue, compared to $738.5 million for the six months ended June 30, 2024, or 48.5% of revenue.

Current wording

Salaries, wages and benefits. SWB expense was $1,359.9 million for the nine months ended September 30, 2025 compared to $1,265.4 million for the nine months ended September 30, 2024, an increase of $94.4 million. SWB expense included $25.3 million and $27.0 million of equity-based compensation expense for the nine months ended September 30, 2025 and 2024. Excluding equity-based compensation expense, SWB expense was $1,334.6 million, or 53.6% of revenue, for the nine months ended September 30, 2025, compared to $1,238.4 million, or 52.0% of revenue, for the nine months ended September 30, 2024. Same facility SWB expense was $1,186.8 million for the nine months ended September 30, 2025, or 48.7% of revenue, compared to $1,118.9 million for the nine months ended September 30, 2024, or 48.2% of revenue.

Previous wording

Professional fees. Professional fees were $95.7 million for the six months ended June 30, 2025, or 5.8% of revenue, compared to $93.7 million for the six months ended June 30, 2024, or 6.0% of revenue. Same facility professional fees were $81.2 million for the six months ended June 30, 2025, or 5.0% of revenue, compared to $79.8 million for the six months ended June 30, 2024, or 5.2% of revenue.

Current wording

Professional fees. Professional fees were $147.1 million for the nine months ended September 30, 2025, or 5.9% of revenue, compared to $142.2 million for the nine months ended September 30, 2024, or 6.0% of revenue. Same facility professional fees were $124.4 million for the nine months ended September 30, 2025, or 5.1% of revenue, compared to $122.0 million for the nine months ended September 30, 2024, or 5.3% of revenue.

Previous wording

Supplies. Supplies expense was $56.9 million for the six months ended June 30, 2025, or 3.5% of revenue, compared to $54.5 million for the six months ended June 30, 2024, or 3.5% of revenue. Same facility supplies expense was $55.0 million for the six months ended June 30, 2025, or 3.4% of revenue, compared to $52.7 million for the six months ended June 30, 2024, or 3.5% of revenue.

Current wording

Supplies. Supplies expense was $87.3 million for the nine months ended September 30, 2025, or 3.5% of revenue, compared to $84.2 million for the nine months ended September 30, 2024, or 3.5% of revenue. Same facility supplies expense was $84.2 million for the nine months ended September 30, 2025, or 3.5% of revenue, compared to $81.4 million for the nine months ended September 30, 2024, or 3.5% of revenue.

Previous wording

Rents and leases. Rents and leases were $24.3 million for the six months ended June 30, 2025, or 1.5% of revenue, compared to $23.8 million for the six months ended June 30, 2024, or 1.5% of revenue. Same facility rents and leases were $21.3 million for the six months ended June 30, 2025, or 1.3% of revenue, compared to $21.0 million for the six months ended June 30, 2024, or 1.4% of revenue.

Current wording

Rents and leases. Rents and leases were $36.0 million for the nine months ended September 30, 2025, or 1.4% of revenue, compared to $36.1 million for the nine months ended September 30, 2024, or 1.5% of revenue. Same facility rents and leases were $31.8 million for the nine months ended September 30, 2025, or 1.3% of revenue, compared to $32.1 million for the nine months ended September 30, 2024, or 1.4% of revenue.

Previous wording

Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses. Other operating expenses were $248.4 million for the six months ended June 30, 2025, or 15.1% of revenue, compared to $210.8 million for the six months ended June 30, 2024, or 13.5% of revenue. Same facility other operating expenses were $222.9 million for the six months ended June 30, 2025, or 13.8% of revenue, compared to $195.2 million for the six months ended June 30, 2024, or 12.8% of revenue.

Current wording

Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses. Other operating expenses were $377.2 million for the nine months ended September 30, 2025, or 15.1% of revenue, compared to $322.9 million for the nine months ended September 30, 2024, or 13.6% of revenue. Same facility other operating expenses were $339.2 million for the nine months ended September 30, 2025, or 13.9% of revenue, compared to $300.5 million for the nine months ended September 30, 2024, or 12.9% of revenue.

Previous wording

Depreciation and amortization. Depreciation and amortization expense was $96.0 million for the six months ended June 30, 2025, or 5.9% of revenue, compared to $72.4 million for the six months ended June 30, 2024, or 4.6% of revenue.

Current wording

Depreciation and amortization. Depreciation and amortization expense was $143.5 million for the nine months ended September 30, 2025, or 5.8% of revenue, compared to $110.1 million for the nine months ended September 30, 2024, or 4.6% of revenue.

Previous wording

Interest expense. Interest expense was $64.3 million for the six months ended June 30, 2025 compared to $56.4 million for the six months ended June 30, 2024. The increase in interest expense was primarily the result of interest on the 7.375% Senior Notes issued during the first quarter of 2025.

Current wording

Interest expense. Interest expense was $100.9 million for the nine months ended September 30, 2025 compared to $86.3 million for the nine months ended September 30, 2024. The increase in interest expense was primarily the result of interest on the 7.375% Senior Notes issued during the first quarter of 2025.

Previous wording

Debt extinguishment costs. Debt extinguishment costs were $1.3 million for the six months ended June 30, 2025 related to the refinancing of the Prior Credit Facility.

Current wording

Debt extinguishment costs. Debt extinguishment costs were $1.3 million for the nine months ended September 30, 2025 related to the refinancing of the Prior Credit Facility.

Previous wording

Legal settlements expense. Legal settlements expense was $3.5 million for the six months ended June 30, 2025 related to costs associated with the Desert Hills Litigation.

Current wording

Legal settlements expense. Legal settlements expense was $3.5 million for the nine months ended September 30, 2025 related to costs associated with the Desert Hills Litigation.

Previous wording

Loss on impairment. During the six months ended June 30, 2025 and 2024, we recorded a non-cash property impairment charge of $1.5 million related to certain closed facilities. During the six months ended June 30, 2024, we recorded a non-cash property impairment charge of $1.0 million related to certain closed facilities.

Current wording

Loss on impairment. During the nine months ended September 30, 2025, we recorded non-cash property impairment charges of $1.5 million related to certain closed facilities. During the nine months ended September 30, 2024, we recorded non-cash property impairment charges of $11.5 million related to certain closed facilities. The non-cash impairment charges included indefinite-lived intangible asset impairment of $0.3 million, property impairment of $9.8 million and operating lease right-of-use asset impairment of $1.4 million.

Previous wording

Gain on sale of property. During the six months ended June 30, 2025, we recorded an $8.7 million gain on a facility property sale.

Current wording

Gain on sale of property. During the nine months ended September 30, 2025, we recorded an $8.7 million gain on facility property sales.

Previous wording

Transaction, legal and other costs. Transaction, legal and other costs were $95.5 million for the six months ended June 30, 2025, compared to $8.9 million for the six months ended June 30, 2024. Transaction, legal and other costs represent legal, accounting, government investigation, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective period, as summarized below (in thousands).

Current wording

Transaction, legal and other costs. Transaction, legal and other costs were $138.4 million for the nine months ended September 30, 2025, compared to $17.2 million for the nine months ended September 30, 2024. Transaction, legal and other costs represent legal, accounting, government investigation, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective period, as summarized below (in thousands).

Previous wording

Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 9 — Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements. Termination and restructuring costs include costs, net of gains, incurred related to workforce reductions, contract amendments, and the closure and disposition of certain facilities, including related lease terminations. Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($1.3 million and $2.0 million for the six months ended June 30, 2025 and 2024, respectively); legal and settlement costs incurred related to certain litigation not included in government investigations ($(2.6) million and $4.4 million for the six months ended June 30, 2025 and 2024, respectively); and direct costs associated with acquisitions ($0.4 million for the three months ended June 30, 2024). Management transition costs include certain costs associated with the transition of the leadership team, including the design and implementation of the revised organizational structure. Management transition costs incurred with the transition of our Chief Executive Officer beginning in the first quarter of 2022 concluded in the fourth quarter of 2024.

Current wording

Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 9 — Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements. Termination and restructuring costs include costs, net of gains, incurred related to workforce reductions, contract amendments, and the closure and disposition of certain facilities, including related lease terminations. Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($1.9 million and $3.9 million for the nine months ended September 30, 2025 and 2024, respectively); legal and settlement costs incurred related to certain litigation not included in government investigations ($(2.3) million and $4.5 million for the nine months ended September 30, 2025 and 2024, respectively); and direct costs associated with acquisitions ($0.1 million and $1.4 million for the nine months ended September 30, 2025 and 2024, respectively). Management transition costs include certain costs associated with the transition of the leadership team, including the design and implementation of the revised organizational structure. Management transition costs incurred with the transition of our Chief Executive Officer beginning in the first quarter of 2022 concluded in the fourth quarter of 2024.

Previous wording

The following table presents revenue by payor type and as a percentage of revenue for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Current wording

The following table presents revenue by payor type and as a percentage of revenue for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Previous wording

Cash provided by operating activities for the six months ended June 30, 2025 was $145.0 million compared to cash used in operating activities of $150.1 million for the six months ended June 30, 2024. Days sales outstanding were 43 days for both June 30, 2025 and December 31, 2024.

Current wording

Cash provided by operating activities for the nine months ended September 30, 2025 was $218.2 million compared to $13.0 million for the nine months ended September 30, 2024. Days sales outstanding were 47 days for September 30, 2025 compared to 43 days at December 31, 2024.

Previous wording

Cash used in investing activities for the six months ended June 30, 2025 was $334.0 million compared to $340.1 million for the six months ended June 30, 2024. Cash used in investing activities for the six months ended June 30, 2025 primarily consisted of $342.4 million of cash paid for capital expenditures, $8.2 million of cash paid for acquisitions and $0.1 million of other, offset by $16.6 million of proceeds from sale of property and equipment. Cash paid for capital expenditures for the six months ended June 30, 2025 was $342.4 million, consisting of routine or maintenance capital expenditures of $51.2 million and expansion capital expenditures of $291.2 million. We define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue. Routine or maintenance capital expenditures, including information technology capital expenditures, were approximately 3% of revenue for the six months ended June 30, 2025. Cash used in investing activities for the six months ended June 30, 2024 primarily consisted of $296.7 million of cash paid for capital expenditures, $50.7 million of cash paid for acquisitions and $2.9 million of other, offset by $10.2 million of proceeds from sales of property and equipment. Cash paid for capital expenditures for the six months ended June 30, 2024 was $296.7 million, consisting of routine or maintenance capital expenditures of $44.1 million and expansion capital expenditures of $252.6 million.

Current wording

Cash used in investing activities for the nine months ended September 30, 2025 was $463.8 million compared to $533.1 million for the nine months ended September 30, 2024. Cash used in investing activities for the nine months ended September 30, 2025 primarily consisted of $478.6 million of cash paid for capital expenditures, $8.2 million of cash paid for acquisitions and $0.1 million of other, offset by $23.2 million of proceeds from sale of property and equipment. Cash paid for capital expenditures for the nine months ended September 30, 2025 was $478.6 million, consisting of routine or maintenance capital expenditures of $76.1 million and expansion capital expenditures of $402.5 million. We define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue. Routine or maintenance capital expenditures, including information technology capital expenditures, were approximately 3% of revenue for the nine months ended September 30, 2025. Cash used in investing activities for the nine months ended September 30, 2024 primarily consisted of $486.9 million of cash paid for capital expenditures, $53.6 million of cash paid for acquisitions and $2.9 million of other, offset by $10.2 million of proceeds from sales of property and equipment. Cash paid for capital expenditures for the nine months ended September 30, 2024 was $486.9 million, consisting of routine or maintenance capital expenditures of $71.3 million and expansion capital expenditures of $415.6 million.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2025 was $244.2 million compared to $467.3 million for the six months ended June 30, 2024. Cash provided by financing activities for the six months ended June 30, 2025 consisted of borrowings on long-term debt of $1,200.0 million and borrowings on revolving credit facility of $830.0 million, offset by principal payments on revolving credit facility of $1,035.0 million, repayment of long-term debt of $670.9 million, repurchase of common stock of $50.0 million, payment of debt issuance costs of $18.6 million, principal payments on long-term debt of $4.1 million, withholding of shares for payroll tax, net of proceeds from stock option exercises, of $3.7 million, distributions to noncontrolling partners in joint ventures of $2.0 million, cash paid for contingent consideration of $1.5 million and $0.1 million of other. Cash provided by financing activities for the six months ended June 30, 2024 consisted of borrowings on long-term debt of $350.0 million, borrowings on revolving credit facility of $160.0 million and contributions from noncontrolling partners in joint ventures of $3.0 million, offset by principal payments on long-term debt of $25.6 million, principal payments on revolving credit facility of $15.0 million, repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises, of $1.7 million, payment of debt issuance costs of $1.5 million, distributions to noncontrolling partners in joint ventures of $1.5 million and $0.4 million of other.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2025 was $288.0 million compared to $502.2 million for the nine months ended September 30, 2024. Cash provided by financing activities for the nine months ended September 30, 2025 consisted of borrowings on long-term debt of $1,200.0 million, borrowings on revolving credit facility of $875.0 million and contributions from noncontrolling partners in joint ventures of $5.0 million, offset by principal payments on revolving credit facility of $1,035.0 million, repayment of long-term debt of $670.9 million, repurchase of common stock of $50.0 million, payment of debt issuance costs of $18.6 million, principal payments on long-term debt of $8.1 million, repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises, of $4.0 million, distributions to noncontrolling partners in joint ventures of $3.9 million, cash paid for contingent consideration of $1.5 million and $0.1 million of other. Cash provided by financing activities for the nine months ended September 30, 2024 consisted of borrowings on long-term debt of $350.0 million, borrowings on revolving credit facility of $210.0 million and contributions from noncontrolling partners in joint ventures of $3.5 million, offset by principal payments on long-term debt of $41.0 million, principal payments on revolving credit facility of $15.0 million, distributions to noncontrolling partners in joint ventures of $3.0 million, payment of debt issuance costs of $1.5 million and repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises, of $0.8 million.

Previous wording

We had total available cash and cash equivalents of $131.4 million and $76.3 million at June 30, 2025 and December 31, 2024, respectively, of which approximately $8.8 million and $7.7 million was held by our foreign subsidiaries, respectively. Our strategic plan does not require the repatriation of foreign cash in order to fund our operations in the U.S.

Current wording

We had total available cash and cash equivalents of $118.7 million and $76.3 million at September 30, 2025 and December 31, 2024, respectively, of which approximately $10.7 million and $7.7 million was held by our foreign subsidiaries, respectively. Our strategic plan does not require the repatriation of foreign cash in order to fund our operations in the U.S.

Previous wording

As described in more detail in Note 9 – Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements, on October 30, 2023, we entered into settlement agreements in connection with the Cases. The settlement agreements for the Cases were approved by the District Court in December 2023 and fully resolve each of the Cases with no admission of liability or wrongdoing by us or Desert Hills. On January 19, 2024, pursuant to the terms of the settlement agreements, we paid an aggregate amount of $400.0 million in exchange for the release and discharge of all claims arising from, relating to, concerning or with respect to all harm, injuries or damages asserted in the Cases or that may be asserted in the future by the plaintiffs in the Cases.

Current wording

As described in more detail in Note 9 – Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements, on October 30, 2023, we entered into settlement agreements in connection with the Cases. The settlement agreements for the Cases were approved by the District Court in December 2023 and fully resolved each of the Cases with no admission of liability or wrongdoing by us or Desert Hills. On January 19, 2024, pursuant to the terms of the settlement agreements, we paid an aggregate amount of $400.0 million in exchange for the release and discharge of all claims arising from, relating to, concerning or with respect to all harm, injuries or damages asserted in the Cases or that may be asserted in the future by the plaintiffs in the Cases.

Previous wording

Borrowings under the Credit Agreement bear interest at a floating rate equal to, at our option, either (i) a SOFR-based rate plus a margin ranging from 1.375% to 2.250% or (ii) a base rate plus a margin ranging from 0.375% to 1.250%, in each case, depending on our Consolidated Total Net Leverage Ratio. In addition, an unused fee that varies according to our Consolidated Total Net Leverage Ratio ranging from 0.200% to 0.350% is payable quarterly in arrears based on the average daily undrawn portion of the commitments in respect of the Revolving Facility. The Term Loan Facility requires quarterly principal repayments of $4.0 million from September 30, 2025 to March 31, 2026, $8.1 million from June 30, 2026 to March 31, 2028, $12.2 million from June 30, 2028 to March 31, 2029 and $16.2 million from June 30, 2029 to December 31, 2029, with the remaining outstanding principal balance of the Term Loan Facility due on the maturity date of February 28, 2030.

Current wording

Borrowings under the Credit Agreement bear interest at a floating rate equal to, at our option, either (i) a SOFR-based rate plus a margin ranging from 1.375% to 2.250% or (ii) a base rate plus a margin ranging from 0.375% to 1.250%, in each case, depending on our Consolidated Total Net Leverage Ratio. In addition, an unused fee that varies according to our Consolidated Total Net Leverage Ratio ranging from 0.200% to 0.350% is payable quarterly in arrears based on the average daily undrawn portion of the commitments in respect of the Revolving Facility. The Term Loan Facility requires quarterly principal repayments of $4.0 million through March 31, 2026, $8.1 million from June 30, 2026 to March 31, 2028, $12.2 million from June 30, 2028 to March 31, 2029 and $16.2 million from June 30, 2029 to December 31, 2029, with the remaining outstanding principal balance of the Term Loan Facility due on the maturity date of February 28, 2030.

Previous wording

The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including limitations on the ability of us and our subsidiaries to: (i) incur debt; (ii) permit additional liens; (iii) make investments and acquisitions; (iv) merge or consolidate with others; (v) dispose of assets; (vi) pay dividends and distributions; (vii) pay junior indebtedness; and (viii) enter into affiliate transactions, in each case, subject to customary exceptions. In addition, the Credit Agreement contains financial covenants requiring us to maintain, on a consolidated basis as of the last day of each quarterly period, a Consolidated Total Net Leverage Ratio of not more than 5.0 to 1.0 (which may be increased in connection with a material acquisition to 5.5 to 1.0 for a four quarter period up to three times during the term of the Credit Agreement) and a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0. The Credit Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, among other things, all outstanding loans under the Credit Agreement may be accelerated, lenders commitments terminated, and/or lenders may exercise collateral remedies. At June 30, 2025, our Consolidated Total Net Leverage Ratio was 3.2x, and we were in compliance with all financial covenants. Consolidated Total Net Leverage Ratio is being reported as calculated under the Credit Agreement and not pursuant to GAAP. Investors should refer to the agreements governing the Credit Agreement attached as exhibits to our periodic reports for further information related to the calculation thereof, and should not consider Consolidated Total Net Leverage Ratio as an alternative for any measures derived in accordance with GAAP. For risks related to our indebtedness and compliance with these covenants, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including limitations on the ability of us and our subsidiaries to: (i) incur debt; (ii) permit additional liens; (iii) make investments and acquisitions; (iv) merge or consolidate with others; (v) dispose of assets; (vi) pay dividends and distributions; (vii) pay junior indebtedness; and (viii) enter into affiliate transactions, in each case, subject to customary exceptions. In addition, the Credit Agreement contains financial covenants requiring us to maintain, on a consolidated basis as of the last day of each quarterly period, a Consolidated Total Net Leverage Ratio of not more than 5.0 to 1.0 (which may be increased in connection with a material acquisition to 5.5 to 1.0 for a four quarter period up to three times during the term of the Credit Agreement) and a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0. The Credit Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, among other things, all outstanding loans under the Credit Agreement may be accelerated, lenders commitments terminated, and/or lenders may exercise collateral remedies. At September 30, 2025, our Consolidated Total Net Leverage Ratio was 3.4x, and we were in compliance with all financial covenants. Consolidated Total Net Leverage Ratio is being reported as calculated under the Credit Agreement and not pursuant to GAAP. Investors should refer to the agreements governing the Credit Agreement attached as exhibits to our periodic reports for further information related to the calculation thereof and should not consider Consolidated Total Net Leverage Ratio as an alternative for any measures derived in accordance with GAAP. For risks related to our indebtedness and compliance with these covenants, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

During the six months ended June 30, 2025, we borrowed $715.0 million on the Revolving Facility and repaid $550.0 million of the balance outstanding.

Current wording

During the nine months ended September 30, 2025, we borrowed $760.0 million on the Revolving Facility and repaid $550.0 million of the balance outstanding.