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What changed in Acadia Healthcare Company, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Acadia Healthcare Company, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+364 added−270 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-27)

Top changes in Acadia Healthcare Company, Inc.'s 2025 10-K

364 paragraphs added · 270 removed · 236 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

63 edited+44 added−10 removed106 unchanged
Biggest changeHowever, the possibility of billing or other errors can never be completely eliminated, and we cannot guarantee that the government or a qui tam plaintiff, upon audit or review, would not take the position that billing, the quality of patient care or other deficiencies or errors, should they occur, are violations of the False Claims Act or other criminal laws.
Biggest changeHowever, the possibility of billing or other errors can never be completely eliminated, and we cannot guarantee that the government or a qui tam plaintiff, upon audit or review, would not take the position that billing, the quality of patient care or other deficiencies or errors, should they occur, are violations of the False Claims Act or other criminal laws. 8 HIPAA and Other Privacy Regulations The administrative simplification provisions of the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), require the use of uniform electronic data transmission standards for healthcare claims and payment transactions submitted or received electronically.
New laws, regulations or policies or changes in existing laws, regulations or policies or their enforcement, future spills or accidents or the discovery of currently unknown conditions or non-compliances may give rise to investigation and remediation liabilities, compliance costs, fines and penalties, or liability and claims for alleged personal injury or property damage due to substances or materials used in our operations, any of which may have a material adverse effect on our business, financial condition or results of operations.
New laws, regulations or policies or changes in existing laws, regulations or policies or their enforcement, future spills or accidents or the discovery of currently unknown conditions or non-compliances may give rise to investigation and remediation liabilities, compliance costs, fines and penalties, or liability and claims for alleged personal injury or property damage due to 11 substances or materials used in our operations, any of which may have a material adverse effect on our business, financial condition or results of operations.
There are ownership and compensation arrangement exceptions for many customary financial arrangements between physicians and facilities, including the employment exception, personal services exception, 6 lease exception and certain recruitment exceptions. As part of CMS’s “regulatory sprint to coordinated care”, CMS finalized revisions to the exceptions and created new exceptions for value-based care that became effective on January 19, 2021.
There are ownership and compensation arrangement exceptions for many customary financial arrangements between physicians and facilities, including the employment exception, personal services exception, lease exception and certain recruitment exceptions. As part of CMS’s “regulatory sprint to coordinated care”, CMS finalized revisions to the exceptions and created new exceptions for value-based care that became effective on January 19, 2021.
The least intensive service is where the patient visits the facility for just a few hours a week to attend counseling/group sessions. Following primary treatment, our extended care programs typically offer residential care, which allows patients to develop healthy and appropriate living skills while remaining in a safe and nurturing setting.
The least intensive service is where the patient visits the facility for just a few hours per week to attend counseling/group sessions. Following primary treatment, our extended care programs typically offer residential care, which allows patients to develop healthy and appropriate living skills while remaining in a safe and nurturing setting.
Medication is used to normalize brain chemistry to block the euphoric effects of opioids allowing our professional staff to provide behavioral therapy. The length of treatment differs from patient to patient, but typically lasts longer than one year. Residential Treatment Centers Residential treatment centers treat patients with behavioral disorders in a non-hospital setting.
Medication is used to normalize brain chemistry to block the euphoric effects of opioids allowing our professional staff to provide behavioral therapy. The length of treatment differs from patient to patient, but typically lasts longer than one year. 5 Residential Treatment Centers Residential treatment centers treat patients with behavioral disorders in a non-hospital setting.
However, the Stark Law is a strict liability statute, meaning that no intent is required to violate the law, and even a technical violation may lead to significant penalties. These laws and regulations are extremely complex and, in many cases, we do not have the benefit of regulatory or judicial interpretation.
However, the Stark Law is a strict liability statute, meaning that no intent is required to violate the law, and even a technical violation may lead to significant penalties. 7 These laws and regulations are extremely complex and, in many cases, we do not have the benefit of regulatory or judicial interpretation.
CARF accredits behavioral healthcare organizations providing mental health and alcohol and drug use and addiction services, as well as opiate treatment programs, and many other types of healthcare programs. These accreditation programs are intended generally to improve the quality, safety, outcomes and value of healthcare services provided by accredited facilities.
CARF accredits behavioral healthcare organizations providing mental health and alcohol and drug use and addiction services, as well as opiate treatment programs, and 6 many other types of healthcare programs. These accreditation programs are intended generally to improve the quality, safety, outcomes and value of healthcare services provided by accredited facilities.
The initial and continued licensure of our facilities and certification to participate in government healthcare programs depends upon many factors including various state 5 licensure regulations relating to quality of care, environment of care, equipment, services, staff training, personnel and the existence of adequate policies, procedures and controls.
The initial and continued licensure of our facilities and certification to participate in government healthcare programs depends upon many factors including various state licensure regulations relating to quality of care, environment of care, equipment, services, staff training, personnel and the existence of adequate policies, procedures and controls.
For more information regarding risks of rising labor costs and its possible adverse impact on us, see 10 “Item 1A. Risk Factors — Human Capital Risks — Our facilities face competition for staffing, labor shortages and higher turnover rates that may increase our labor costs and reduce our profitability”.
For more information regarding risks of rising labor costs and its possible adverse impact on us, see “Item 1A. Risk Factors — Human Capital Risks — Our facilities face competition for staffing, labor shortages and higher turnover rates that may increase our labor costs and reduce our profitability”.
There may, however, be environmental conditions currently unknown to us 9 relating to our prior, existing or future sites or operations or those of predecessor companies whose liabilities we may have assumed or acquired which could have a material adverse effect on our business.
There may, however, be environmental conditions currently unknown to us relating to our prior, existing or future sites or operations or those of predecessor companies whose liabilities we may have assumed or acquired which could have a material adverse effect on our business.
We believe that our increased geographic diversity will mitigate the impact of any financial or budgetary pressure that may arise in a particular state or market where we operate. Strong financial position to execute our strategy.
We believe that our increased geographic diversity will mitigate the impact of any financial or budgetary pressure that may arise in a particular state or market where we operate. Financial position to execute our strategy.
Management believes our healthcare 7 facilities have implemented appropriate safeguards and procedures to complete claim forms and requests for payment in an accurate manner and to operate in compliance with applicable laws.
Management believes our healthcare facilities have implemented appropriate safeguards and procedures to complete claim forms and requests for payment in an accurate manner and to operate in compliance with applicable laws.
Sources of Revenue As of December 31, 2024, we received payments from the following sources for services rendered in our facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by CMS and other programs; and (iv) individual patients and clients.
Sources of Revenue As of December 31, 2025, we received payments from the following sources for services rendered in our facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by CMS and other programs; and (iv) individual patients and clients.
Following this assessment, an individualized treatment program is designed to provide a foundation for a lifelong recovery process. Many modalities are used in our treatment programs to support the individual, including the twelve-step philosophy, cognitive/behavioral therapies, supportive therapies and continuing care. Residential Recovery Facilities.
Following this assessment, an individualized treatment program is designed to provide a foundation for a lifelong recovery process. Many modalities are used in our treatment programs to support the individual, including the twelve-step philosophy, cognitive/behavioral therapies, supportive therapies and continuing care.
The reporting of these funds is subject to future audit for compliance with the terms and conditions. We recognized PHSSE Fund amounts to the extent it had qualifying COVID-19 expenses or lost revenues as permitted under the terms and conditions.
The reporting of these funds is subject to future audit for compliance with such terms and conditions. We recognized PHSSE Fund amounts to the extent we had qualifying COVID-19 expenses or lost revenues as permitted under such terms and conditions.
As we receive Medicaid payments from 45 states, the District of Columbia and Puerto Rico, management does not believe that we are significantly affected by changes in reimbursement policies in any one state or territory.
As we receive Medicaid payments from 46 states, the District of Columbia and Puerto Rico, management does not believe that we are significantly affected by changes in reimbursement policies in any one state or territory.
Management believes that we have been in material compliance with the HIPAA regulations and have developed our policies and procedures to ensure ongoing compliance, although we cannot guarantee that our facilities will not be subject to security incidents or breaches which could have a material adverse effect on our business, financial condition or results of operations.
Management believes that we have been in material compliance with HIPAA and Part 2 regulations and have developed our policies and procedures to ensure ongoing compliance, although we cannot guarantee that our facilities will not be subject to security incidents or breaches which could have a material adverse effect on our business, financial condition or results of operations.
The table below presents the percentage of our total revenue attributed to each category for the year ended December 31, 2024: Facility/Service Revenue for the Year Ended December 31, 2024 Acute inpatient psychiatric facilities 53 % Specialty treatment facilities 19 % Comprehensive treatment centers 17 % Residential treatment centers 11 % We receive payments from the following sources for services rendered in our facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by the Centers for Medicare and Medicaid Services (“CMS”) and other programs; and (iv) individual patients and clients.
The table below presents the percentage of our total revenue attributed to each category for the year ended December 31, 2025: Facility/Service Revenue for the Year Ended December 31, 2025 Acute inpatient psychiatric facilities 55 % Specialty treatment facilities 17 % Comprehensive treatment centers 17 % Residential treatment centers 11 % We receive payments from the following sources for services rendered in our facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by the Centers for Medicare and Medicaid Services (“CMS”) and other programs; and (iv) individual patients and clients.
It also includes Individuals in Medicaid Deserve Care that is Appropriate and Responsible in its Execution Act, which suspends the current prohibition on using federal Medicaid funds to pay for substance use disorder treatment at inpatient treatment facilities with more than 16 beds and limits beneficiaries to no more than 30 days of inpatient treatment per 12-month period.
It also includes ‘The Individuals in Medicaid Deserve Care that is Appropriate and Responsible in its Execution Act’, which suspends the prohibition on using federal Medicaid funds to pay for substance use disorder treatment at inpatient treatment facilities with more than 16 beds and limits beneficiaries to no more than 30 days of inpatient treatment per 12-month period.
A portion of our professional liability risks are insured through a wholly-owned insurance subsidiary providing coverage for up to $7.0 million per claim and $10.0 million for certain other claims through August 31, 2024 and $10.0 million per claim, $15.0 million per claim for certain other claims and $25.0 million for certain batched claims thereafter.
A portion of our professional liability risks are insured through a wholly-owned insurance subsidiary providing coverage for up to $10.0 million per claim, $15.0 million for certain other claims and $25.0 million for certain batched claims through August 31, 2025 and $15.0 million per claim, and $25.0 million for certain batched claims thereafter.
No facility accounted for more than 4% of revenue for the year ended December 31, 2024, and no state or U.S. territory accounted for more than 14% of revenue for the year ended December 31, 2024.
No facility accounted for more than 4% of revenue for the year ended December 31, 2025, and no state or U.S. territory accounted for more than 14% of revenue for the year ended December 31, 2025.
Management believes we continue to be in a strong position for investments in our facilities, expansion into new and existing markets and enhancement of our capabilities and infrastructure. We generate strong returns by profitably operating our business and by actively managing our working capital.
Management believes we continue to be well positioned for investments in our facilities, expansion into new and existing markets and enhancement of our capabilities and infrastructure. We generate strong returns by profitably operating our business and by actively managing our working capital.
These referral sources may instead refer patients to hospitals that are able to provide a full suite of medical services or to other behavioral healthcare centers. Human Capital At December 31, 2024, we had approximately 25,500 employees, of which 19,192 were employed full-time.
These referral sources may instead refer patients to hospitals that are able to provide a full suite of medical services or to other behavioral healthcare centers. Human Capital At December 31, 2025, we had approximately 25,000 employees, of which approximately 19,000 were employed full-time.
Our management team strives to use its years of experience operating behavioral healthcare facilities to generate strong cash flow and grow a profitable business. Legislative and favorable industry trends. According to a 2023 survey by the Substance Abuse and Mental Health Services Administration (“SAMHSA”) of the U.S.
Our management team strives to use its history of operating behavioral healthcare facilities to generate strong cash flow and grow a profitable business. Legislative and favorable industry trends. According to a 2024 survey by the Substance Abuse and Mental Health Services Administration (“SAMHSA”) of the U.S.
Typical lengths of stay for crisis stabilization and acute care range from three to five days and from five to twelve days, respectively. Specialty Treatment Facilities Our specialty treatment facilities include residential recovery facilities and eating disorder facilities. We provide a comprehensive continuum of care for adults with addictive disorders and co-occurring mental disorders.
Typical lengths of stay for crisis stabilization and acute care range from three to five days and from five to twelve days, respectively. Specialty Treatment Facilities Our specialty treatment facilities primarily consist of residential recovery facilities. We provide a comprehensive continuum of care for adults with addictive disorders and co-occurring mental disorders.
Culture and Values We are committed to maintaining a welcoming and inclusive environment that treats everyone with dignity and respect. Approximately 73% of our employees are women and approximately 50% are people of color.
Culture and Values We are committed to maintaining a welcoming and inclusive environment that treats everyone with dignity and respect. Approximately 74% of our employees are women and approximately 51% are people of color.
At December 31, 2024, we had one facility with a labor union, which represented approximately 131 of our employees. Organizing activities by labor unions and certain potential changes in federal labor laws and regulations could increase the likelihood of employee unionization in the future.
At December 31, 2025, we had one facility with a labor union, which represented approximately 130 of our full-time employees. Organizing activities by labor unions and certain potential changes in federal labor laws and regulations could increase the likelihood of employee unionization in the future.
Diversified revenue and payor bases . At December 31, 2024, we operated 262 behavioral healthcare facilities in 39 states and Puerto Rico. Our payor, patient and geographic diversity mitigates the potential risk associated with any single facility.
Diversified revenue and payor bases . At December 31, 2025, we operated 277 behavioral healthcare facilities in 40 states and Puerto Rico. Our payor, patient and geographic diversity mitigates the potential risk associated with any single facility.
We have obtained reinsurance coverage from a third-party to cover claims in excess of those limits. The reinsurance policy has a coverage limit of $78.0 million or $75.0 million in the aggregate for certain other claims through August 31, 2024 and $80.0 million or $75.0 million in the aggregate for certain other claims thereafter.
We have obtained reinsurance coverage from a third-party to cover claims in excess of those limits. The reinsurance policy has a coverage limit of $80.0 million or $75.0 million in the aggregate for certain other claims through August 31, 2025 and $75.0 million in the aggregate for claims thereafter, with exclusions for certain types of incidents.
Under the terms and conditions for receipt of the payment, we were allowed to use the funds to cover lost revenues and healthcare costs related to the novel coronavirus known as COVID-19 (“COVID-19”), and we were required to properly and fully document the use of these funds to the U.S. Department of Health and Human Services.
Under the terms and conditions for receipt of the payment, we were allowed to use the funds to cover lost revenues and healthcare costs related to the novel coronavirus known as COVID-19 (“COVID-19”), and we were required to properly and fully document the use of these funds to the HHS.
Further, 6.8 million adults had co-occurring serious mental illness and substance use disorder in 2023. Approximately 54.2 million people aged 12 or older in 2023 needed substance use treatment in the past year, but only 12.8 million of those received substance use treatment.
Further, 21.2 million adults had co-occurring serious mental illness and substance use disorder in 2024. Approximately 52.6 million people aged 12 or older in 2024 needed substance use treatment in the past year, but only 10.2 million of those received substance use treatment.
Of our facilities that are not CTCs, 91% of our beds are at owned properties and 9% are at leased properties. For the years ended December 31, 2024 and 2023, our operations generated revenue of $3,154.0 million and $2,928.7 million, respectively.
Of our facilities that are not CTCs, 91% of our beds are at owned properties and 9% 4 are at leased properties. For the years ended December 31, 2025 and 2024, our operations generated revenue of $3,312.8 million and $3,154.0 million, respectively.
Our common stock is listed for trading on The NASDAQ Global Select Market under the symbol “ACHC.” Our principal executive offices are located at 6100 Tower Circle, Suite 1000, Franklin, Tennessee 37067, and our telephone number is (615) 861-6000.
Our common stock is listed for trading on The NASDAQ Global Select Market under the symbol “ACHC.” Our principal executive offices are located at 4020 Aspen Grove Drive, Suite 900, Franklin, Tennessee 37067, and our telephone number is (615) 861-6000.
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 December 31, 2024, we operated 262 behavioral healthcare facilities with approximately 11,850 beds in 39 states and Puerto Rico.
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 December 31, 2025, we operated 277 behavioral healthcare facilities with over 12,500 beds in 40 states and Puerto Rico.
Department of Health and Human Services (the “HHS”), mental illness and substance use disorder prevalence continues to represent more than one in five U.S. adults. In 2023, 58.7 million adults in the U.S. aged 18 years or older suffered from a mental illness in the prior year and 14.6 million suffered from a serious mental illness.
Department of Health and Human Services (the “HHS”), mental illness or substance use disorder prevalence represents more than one in four U.S. adults. In 2024, 61.5 million adults in the U.S. aged 18 years or older suffered from a mental illness in the prior year and 14.6 million suffered from a serious mental illness.
Moreover, as the behavioral healthcare 2 business does not typically require the procurement and replacement of expensive medical equipment, our maintenance capital expenditure requirements are generally less than that of other facility-based healthcare providers. For the year ended December 31, 2024, our maintenance capital expenditures amounted to approximately 3% of our revenue.
Moreover, as the behavioral healthcare business does not typically require the procurement and replacement of expensive medical equipment, our maintenance capital expenditure requirements are generally less than that of other facility-based healthcare providers.
Of our facilities, excluding CTCs, approximately 56% are acute inpatient psychiatric facilities, approximately 35% are specialty treatment facilities and approximately 9% are residential treatment centers at December 31, 2024. We operate 163 CTCs, 21 of which are owned properties and 142 of which are leased properties.
Of our facilities, excluding CTCs, approximately 60% are acute inpatient psychiatric facilities, approximately 31% are specialty treatment facilities and approximately 9% are residential treatment centers at December 31, 2025. We operate 178 CTCs, 25 of which are owned properties and 153 of which are leased properties.
According to a 2023 study by the Centers for Disease Control and Prevention (“CDC”), youth mental health continues to reach all-time highs, and nearly all indicators of poor mental health and suicidal thoughts and behaviors worsened from 2013 to 2023. In 2023, 40% of high school students reported persistent feelings of sadness or hopelessness, compared to 30% in 2013.
According to a study by the Centers for Disease Control and Prevention (“CDC”) made available in 2024, youth mental health continues to reach all-time highs, and nearly all indicators of poor mental health and suicidal thoughts and behaviors worsened from 2013 to 2023.
Financing Transactions On March 17, 2021, we entered into a credit agreement (as amended, the “Credit Facility”), which provided for a $600.0 million senior secured revolving credit facility (the “Revolving Facility”) and a senior secured term loan facility in an initial principal amount of $425.0 million (as increased by the Incremental Term Loans (as defined below), the “Term Loan Facility”), each maturing on March 17, 2026.
Prior Credit Facility On March 17, 2021, we entered into a credit agreement (as amended, the “Prior Credit Facility”), which provided for a $600.0 million senior secured revolving credit facility (the “Prior Revolving Facility”) and a senior secured term loan facility in an initial principal amount of $425.0 million, which amount was later increased by $350.0 million (as increased, the “Prior Term Loan Facility”), each of which was scheduled to mature on March 17, 2026.
Our outpatient clinics serve patients that do not require inpatient treatment or are transitioning from a residential treatment program; have employment, family or school commitments; and have stabilized in their recovery practices and are seeking ongoing continuing care. Eating Disorder Facilities.
Our outpatient clinics serve patients that do not require inpatient treatment or are transitioning from an acute treatment program; have employment, family or school commitments; and have stabilized in their recovery practices and are seeking ongoing continuing care. Comprehensive Treatment Centers Our CTCs specialize in providing medication-assisted treatment in an outpatient setting.
We recognize grants once both of the following conditions are met: (i) we are able to comply with the relevant terms and conditions of the grant and (ii) the grant will be received. 8 We have participated in certain relief programs offered through the CARES Act, including receipt of funds relating to the Public Health and Social Services Emergency Fund (“PHSSE Fund”), also known as the Provider Relief Fund, and the American Rescue Plan (“ARP”) Rural Payments for Hospitals.
We have participated in certain relief programs offered through the CARES Act, including receipt of funds relating to the Public Health and Social Services Emergency Fund (“PHSSE Fund”), also known as the Provider Relief Fund, and the American Rescue Plan (“ARP”) Rural Payments for Hospitals.
For the year ended December 31, 2024, we received 56.5% of our revenue from Medicaid, 26.0% from commercial payors, 14.2% from Medicare and 3.3% from other payors.
For the year ended December 31, 2025, we received 57.7% of our revenue from Medicaid, 24.6% from commercial payors, 14.3% from Medicare and 3.4% from other payors.
Management believes the efficiencies can be realized by investing in growth in strong markets, addressing capital-constrained facilities that have underperformed and improving management systems. Fuel facility growth through accelerated joint venture partnerships and de novo builds and pursuing programmatic mergers and acquisitions. We are a leading provider of behavioral healthcare services in the U.S.
Fuel facility growth through accelerated joint venture partnerships and de novo builds and pursuing programmatic mergers and acquisitions. We are a leading provider of behavioral healthcare services in the U.S.
During the year ended December 31, 2022, we recorded $21.5 million of income from provider relief fund related to ARP funds received. During the year ended December 31, 2023, we recorded $6.4 million of income from provider relief fund related to ARP funds received and repaid the remaining balance of ARP funds to eliminate the liability.
During the year ended December 31, 2023, we recorded $6.4 million of income from provider relief fund related to ARP funds received and repaid the remaining balance of ARP funds to eliminate the liability. 10 Healthcare providers were required to sign an attestation confirming receipt of the PHSSE Fund amounts and agree to the terms and conditions of payment.
The 21 st Century Cures Act appropriated substantial resources for the treatment of behavioral healthcare and substance abuse disorders and contained measures intended to strengthen the MHPAEA.
The 21 st Century Cures Act appropriated substantial resources for the treatment of behavioral healthcare and substance abuse disorders and contained measures intended to strengthen the MHPAEA. One Big Beautiful Bill Act On July 4, 2025, Congress passed the One Big Beautiful Bill Act (the “OBBBA”), its budget reconciliation act for fiscal year 2025.
CARES Act and Other Regulatory Matters As part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the U.S. government announced it would offer $100 billion of relief to eligible healthcare providers.
This could result in an increase of uncompensated care for services rendered in our psychiatric hospital facilities, which are subject to EMTALA obligations. CARES Act and Other Regulatory Matters As part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the U.S. government announced it would offer $100 billion of relief to eligible healthcare providers.
Further, in 2023, 20% of high school students seriously considered attempting suicide and 9% of high school students attempted suicide one or more times. Management believes the market for behavioral healthcare services will continue to grow due to increased awareness of mental health and substance abuse conditions and treatment options.
Management believes the market for behavioral healthcare services will continue to grow due to increased awareness of mental health and substance abuse conditions and treatment options.
For the year ended December 31, 2024, we received 56.5% of our revenue from Medicaid, 26.0% from commercial payors, 14.2% from Medicare and 3.3% from other payors. 3 At December 31, 2024, we operated 262 behavioral healthcare facilities with approximately 11,850 beds in 39 states and Puerto Rico.
For the year ended December 31, 2025, we received 57.7% of our revenue from Medicaid, 24.6% from commercial payors, 14.3% from Medicare and 3.4% from other payors. At December 31, 2025, we operated 277 behavioral healthcare facilities with over 12,500 beds in 40 states and Puerto Rico.
The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information we file. Our website and the information contained therein or linked thereto are not intended to be incorporated into this Annual Report on Form 10-K.
The SEC maintains an internet site at http://www.sec.gov, which contains reports, proxy and information statements, and other information we file. Except as expressly incorporated by reference herein, information contained on or accessible through our website does not constitute a part of this Annual Report on Form 10-K.
Our executive management team has over 225 combined years of experience in the healthcare industry. The extensive national experience and operational expertise of our management team give us what management believes to be the premier leadership team in the behavioral healthcare industry.
Our executive management team brings decades of combined leadership in healthcare and clinical operations. The extensive national background and operational expertise of our management team provide what management believes to be a strong foundation in the behavioral healthcare industry.
The Emergency Medical Treatment & Labor Act The Emergency Medical Treatment & Labor Act (“EMTALA”) is intended to ensure public access to emergency services regardless of ability to pay.
The OCR has included a review of the proposed changes in its official regulatory update for May 2026. The Emergency Medical Treatment & Labor Act The Emergency Medical Treatment & Labor Act (“EMTALA”) is intended to ensure public access to emergency services regardless of ability to pay.
Violations of HIPAA can result in both criminal and civil fines and penalties. The HIPAA security regulations require healthcare providers to implement administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of PHI.
HIPAA and Part 2 require healthcare providers to implement security measures for protecting PHI and SUD Records. The HIPAA security regulations specifically require healthcare providers to implement administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of PHI.
We have a number of potential acquisitions, joint ventures and wholly-owned de novo facilities in various stages of development and consideration. During the year ended December 31, 2024, we added 464 beds through the opening of four wholly-owned facilities and one joint venture facility, and we opened nine CTCs.
We have a number of potential acquisitions, joint ventures and wholly-owned de novo facilities in various stages of development and consideration.
This strategy includes five growth pathways: expansions of existing facilities, joint venture partnerships, de novo facilities, acquisitions and expansion across our continuum of care. Our core strategic priorities include: Drive organic growth of existing facilities. We seek to increase revenue at our facilities by providing a broader range of services to new and existing patients and clients.
We are committed to providing the communities we serve high-quality, cost-effective behavioral healthcare services, while growing our business 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. Our core strategic priorities include: Drive organic growth of existing facilities.
In addition, management intends to increase bed counts in our existing facilities. We added 312 beds to existing facilities during the year ended December 31, 2024. Management believes we can improve efficiencies and increase operating margins by utilizing our management’s expertise and experience within existing programs and their expertise in improving performance at underperforming facilities.
Management believes we can improve efficiencies and increase operating margins by utilizing our management’s expertise and experience within existing programs and their expertise in improving performance at underperforming facilities. Management believes the efficiencies can be realized by investing in growth in strong markets, addressing capital-constrained facilities that have underperformed and improving management systems.
Management believes our focus on behavioral healthcare and history of completing acquisitions provides us with a strategic advantage in sourcing, evaluating and closing acquisitions. We leverage our management team’s expertise to identify and integrate acquisitions based on a disciplined acquisition strategy that focuses on quality of service, return on investment and strategic benefits.
We leverage our management team’s expertise to identify and integrate acquisitions based on a disciplined acquisition strategy that focuses on quality of service, return on investment and strategic benefits. Accelerate expansion across the care continuum, particularly for patients with opioid use and other substance use disorders.
Seasonality of Demand for Services Our residential recovery and other inpatient facilities typically experience lower patient volumes and revenue during the holidays, and our child and adolescent facilities typically experience lower patient volumes and revenue during the summer months, holidays and other periods when school is out of session. Available Information Our Internet website address is www.acadiahealthcare.com.
In furtherance of this commitment, we provide our employees with access to a variety of workplace safety training programs and continually evaluate our policies promoting patient safety and employee wellbeing. 12 Seasonality of Demand for Services Our residential recovery and other inpatient facilities typically experience lower patient volumes and revenue during the holidays, and our child and adolescent facilities typically experience lower patient volumes and revenue during the summer months, holidays and other periods when school is out of session.
These provisions are intended to encourage electronic commerce in the healthcare industry. HIPAA also established federal rules protecting the privacy and security of individually identifiable protected health information (“PHI”). The privacy and security regulations control the use and disclosure of PHI and the rights of patients to be informed about and control how such PHI is used and disclosed.
These provisions are intended to encourage electronic commerce in the healthcare industry. HIPAA also established federal rules protecting the privacy and security of individually identifiable protected health information (“PHI”). 42 C.F.R. Part 2 (“Part 2”) is similar to HIPAA but provides stricter, specific confidentiality for substance use disorder records (“SUD Records”).
Health and Safety We are committed to providing care to our patients in a safe, therapeutic environment. In furtherance of this commitment, we provide our employees with access to a variety of workplace safety training programs and continually evaluate our policies promoting patient safety and employee wellbeing.
Health and Safety We are committed to providing care to our patients in a safe, therapeutic environment.
The maturity date, the leverage-based pricing grid, mandatory prepayment events and other terms applicable to the Incremental Term Loans are substantially identical to those applicable to the initial $425.0 million term loans incurred under the Term Loan Facility. 1 During the year ended December 31, 2024, we borrowed $305.0 million on the Revolving Facility and repaid $15.0 million of the balance outstanding.
For the year ended December 31, 2024, we borrowed $305.0 million on the Prior Revolving Facility and repaid $15.0 million of the balance outstanding.
During the year ended December 31, 2024, we added 776 beds, consisting of 312 added to existing facilities and 464 added through the opening of four wholly-owned facilities and one joint venture facility, and we opened nine comprehensive treatment centers (“CTCs”). We are the leading publicly traded pure-play provider of behavioral healthcare services in the United States (the “U.S.”).
The five joint venture facilities opened during the year ended December 31, 2025, were through partnerships with Henry Ford Health, Geisinger Health, Ascension Seton, Fairview Health Services, and ECU Health. During the year ended December 31, 2025, we opened 15 CTCs. We are the leading publicly traded pure-play provider of behavioral healthcare services in the U.S.
Business Strategy Our 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 high-quality, cost-effective behavioral healthcare services, while growing our business and creating long-term value for our stockholders.
For the year ended December 31, 2025, our maintenance capital expenditures amounted to approximately 3% of our revenue. 3 Business Strategy Our strategy is to become the indispensable behavioral healthcare provider for the high-acuity and complex-needs patient population.
During the year ended December 31, 2023, we borrowed $40.0 million on the Revolving Facility and repaid $35.0 million of the balance outstanding. Competitive Strengths Management believes the following strengths differentiate us from other providers of behavioral healthcare services: Premier executive management team with track record of success .
We may redeem the 7.375% Senior Notes at our option, in whole or part, at the dates and amounts set forth in the indenture. 2 Competitive Strengths Management believes the following strengths differentiate us from other providers of behavioral healthcare services: Executive management team with track record of success .
Removed
Acquisitions On February 22, 2024, we acquired substantially all of the assets of Turning Point Centers (“Turning Point”), a 76-bed specialty provider of substance use disorder and primary mental health treatment services that supports the Salt Lake City, Utah, metropolitan market. Turning Point provides a full continuum of treatment services, including residential, partial hospitalization and intensive outpatient services.
Added
During the year ended December 31, 2025, we added 1,089 beds, consisting of 311 added to existing facilities and 778 added through the opening of one wholly-owned facility and five joint venture facilities, and we closed five facilities totaling 382 beds.
Removed
On November 7, 2022, we acquired four CTCs located in Georgia from Brand New Start Treatment Centers (“Brand New Start”).
Added
Financing Transactions Credit Facility On February 28, 2025 (the “Credit Facility Closing Date”), we entered into a new credit agreement (the “Credit Agreement”), which provides for a $1.0 billion senior secured revolving credit facility (including a $50.0 million sublimit for the issuance of letters of credit and a $50.0 million swingline subfacility) (the “Revolving Facility”) and a $650.0 million senior secured term loan facility (the “Term Loan Facility,” and together with the Revolving Facility, the “Credit Facility”), each maturing on February 28, 2030.
Removed
The Revolving Facility further provides for a $20.0 million subfacility for the issuance of letters of credit . See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for additional information about the Credit Facility.
Added
On the Credit Facility Closing Date, the full $650.0 million amount of the Term Loan Facility was funded, and $550.0 million was funded under the Revolving Facility, which amounts were used, among other things, to refinance the outstanding obligations under the Prior Credit Facility (as defined below).
Removed
On March 30, 2023, we entered into Amendment No. 1 to the Credit Facility (the “First Amendment”), which replaced the London Interbank Offered Rate (“LIBOR”) as the reference rate applicable to borrowings under the Credit Facility with the Secured Overnight Financing Rate as determined for a term of, at our option, one, three or six months, plus an adjustment of 0.10% (“Adjusted Term SOFR”).
Added
Borrowings under the Credit Agreement bear interest at a floating rate equal to, at our option, either (i) a Secured Overnight Financing Rate (“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 (as defined in the Credit Agreement).
Removed
On January 18, 2024, we entered into Amendment No. 2 to the Credit Facility (the “Second Amendment”), which provided for the incurrence of additional senior secured term loans in an aggregate principal amount of $350.0 million (the “Incremental Term Loans”). Such Incremental Term Loans are structured as an increase of the Term Loan Facility.
Added
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.
Removed
We also have a comprehensive post-acquisition strategic plan to facilitate the integration of acquired facilities that includes improving facility operations, retaining and recruiting psychiatrists and other healthcare professionals and expanding the breadth of services offered by the facilities. Accelerate expansion across the care continuum, particularly for patients with opioid use and other substance use disorders.
Added
The Term Loan Facility requires quarterly principal repayments of $4.1 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 $16.3 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.
Removed
Our eating disorder facilities provide treatment services for eating disorders, each of which may be effectively treated through a combination of medical, psychological and social treatment programs.
Added
We have the ability to increase the amount of the Credit Facility, which may take the form of increases to the Revolving Facility or the Term Loan Facility or the issuance of one or more incremental term loan facilities (collectively, the “Incremental Facilities”), upon obtaining additional commitments from new or existing lenders and the satisfaction of certain customary conditions precedent 1 for such Incremental Facilities.
Removed
Our behavioral therapies are delivered in an array of treatment models that may include individual and group therapy, intensive outpatient, outpatient, partial hospitalization/day treatment, road to recovery and other programs that can be either abstinent or medication-assisted based. 4 Comprehensive Treatment Centers Our CTCs specialize in providing medication-assisted treatment in an outpatient setting.
Added
Such Incremental Facilities may not exceed the sum of (i) the greater of $710.0 million and an amount equal to 100% of the LTM Consolidated EBITDA (as defined in the Credit Agreement) of the Company at the time of determination and (ii) additional amounts that would not cause our Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) to exceed 4.0 to 1.0.
Removed
HIPAA Administrative Simplification and Privacy and Security Requirements The administrative simplification provisions of the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), require the use of uniform electronic data transmission standards for healthcare claims and payment transactions submitted or received electronically.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks that we deem material are described under “Risk Factors” below and include, but are not limited to, the following: Legal Proceedings and Regulatory Risks • We are and in the future could become the subject of governmental investigations, regulatory actions, whistleblower lawsuits and other legal proceedings. • We are and in the future may become involved in legal proceedings based on negligence or breach of a contractual or statutory duty from service users or their family members or from employees or former employees. • If we fail to comply with extensive laws and government regulations, we could suffer penalties or be required to make significant changes to our operations. • We could face risks associated with, or arising out of changing laws and regulations, including those involving environmental, health and safety laws and regulations.
Biggest changeRisks that we deem material are described under “Risk Factors” below and include, but are not limited to, the following: Legal Proceedings and Regulatory Risks • We are and in the future could become the subject of governmental investigations, regulatory actions, whistleblower lawsuits and other legal proceedings. • We are and in the future may become involved in legal proceedings based on negligence or breach of a contractual or statutory duty from service users or their family members or from employees or former employees. • If we fail to comply with extensive laws and government regulations, we could suffer penalties or be required to make significant changes to our operations. • We could face risks associated with, or arising out of changing laws and regulations, including those involving environmental, health and safety laws and regulations. • Activist investors and their actions threatened or commenced against us could cause us to incur substantial costs, divert management’s attention and resources, cause uncertainty about the strategic direction of our business and adversely impact our business, financial condition, results of operations and stock price.
For example, as described in more detail in Note 11 — Commitments and Contingencies in the accompanying notes to our consolidated financial statements, on July 7, 2023, in connection with one of the lawsuits in our Desert Hills Litigation, a jury awarded the plaintiff compensatory damages of $80.0 million and punitive damages of $405.0 million.
For example, on July 7, 2023, in connection with one of the lawsuits in our Desert Hills Litigation (as described in more detail in Note 11 — Commitments and Contingencies in the accompanying notes to our consolidated financial statements), a jury awarded the plaintiff compensatory damages of $80.0 million and punitive damages of $405.0 million.
For example, it could: • increase our vulnerability to general adverse economic and industry conditions; • make it more difficult for us to satisfy our other financial obligations; • restrict us from making strategic acquisitions or cause us to make non-strategic divestitures; • require us to dedicate a substantial portion of our cash flow from operations to payments on our debt (including scheduled repayments on our outstanding term loan borrowings under the Credit Facility), thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; • expose us to interest rate fluctuations because the interest on the Credit Facility is imposed at variable rates; • make it more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such debt; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • place us at a competitive disadvantage compared to our competitors that have less debt; • limit our ability to borrow additional funds; and • limit our ability to pay dividends, redeem stock or make other distributions.
For example, it could: • increase our vulnerability to general adverse economic and industry conditions; • make it more difficult for us to satisfy our other financial obligations; • restrict us from making strategic acquisitions or cause us to make non-strategic divestitures; • require us to dedicate a substantial portion of our cash flow from operations to payments on our debt (including scheduled 20 repayments on our outstanding term loan borrowings under the Credit Facility), thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; • expose us to interest rate fluctuations because the interest on the Credit Facility is imposed at variable rates; • make it more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such debt; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • place us at a competitive disadvantage compared to our competitors that have less debt; • limit our ability to borrow additional funds; and • limit our ability to pay dividends, redeem stock or make other distributions.
Operational Risks • An incident involving one or more of our patients or the failure by one or more of our facilities to provide appropriate care could result in increased regulatory burdens, governmental investigations, litigation, negative publicity and adversely affect the trading price of our common stock. • Joint ventures may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities. • Our business growth and acquisition strategies expose us to a variety of operational and financial risks. • We care for a large number of vulnerable individuals with complex needs and any care quality deficiencies could adversely impact our brand, reputation and ability to market our services effectively. • Our business could be disrupted if our information systems fail or if our databases are destroyed or damaged. • A cybersecurity incident could have a material adverse impact on us, including substantial sanctions, fines, and damages and civil and criminal penalties under federal and state privacy laws, in addition to reputational harm and increased costs. • Although we have facilities in 39 states and Puerto Rico, we have substantial operations in Pennsylvania, California and Tennessee, which makes us especially sensitive to regulatory, economic, environmental and competitive conditions and changes in those states. • Our business and operations are subject to risks related to natural disasters and climate change. • If we fail to cultivate new or maintain established relationships with referral sources, our business, financial condition and results of operations could be adversely affected. • We operate in a highly competitive industry, and competition may lead to declines in patient volumes.
Operational Risks • An incident involving one or more of our patients or the failure by one or more of our facilities to provide appropriate care could result in increased regulatory burdens, governmental investigations, litigation, negative publicity and adversely affect the trading price of our common stock. • Joint ventures may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities. • Our business growth and acquisition strategies expose us to a variety of operational and financial risks. • We care for a large number of vulnerable individuals with complex needs and any care quality deficiencies could adversely impact our brand, reputation and ability to market our services effectively. • Our business could be disrupted if our information systems fail or if our databases are destroyed or damaged. • A cybersecurity incident could have a material adverse impact on us, including substantial sanctions, fines, and damages and civil and criminal penalties under federal and state privacy laws, in addition to reputational harm and increased costs. • Although we have facilities in 40 states and Puerto Rico, we have substantial operations in Pennsylvania, California and Tennessee, which makes us especially sensitive to regulatory, economic, environmental and competitive conditions and changes in those states. • Our business and operations are subject to risks related to natural disasters and climate change. • If we fail to cultivate new or maintain established relationships with referral sources, our business, financial condition and results of operations could be adversely affected. • We operate in a highly competitive industry, and competition may lead to declines in patient volumes.
Such restrictions affect, and in many respects limit or prohibit, among other things, our and our subsidiaries’ ability to: • incur or guarantee additional debt and issue certain preferred stock; • pay dividends on our common stock or redeem, repurchase or retire our equity interests or subordinated debt; • transfer or sell our assets; 18 • make certain payments or investments; • make capital expenditures; • create certain liens on assets; • create restrictions on the ability of our subsidiaries to pay dividends or make other payments to us; • engage in certain transactions with our affiliates; and • merge or consolidate with other companies.
Such restrictions affect, and in many respects limit or prohibit, among other things, our and our subsidiaries’ ability to: • incur or guarantee additional debt and issue certain preferred stock; • pay dividends on our common stock or redeem, repurchase or retire our equity interests or subordinated debt; • transfer or sell our assets; • make certain payments or investments; • make capital expenditures; • create certain liens on assets; • create restrictions on the ability of our subsidiaries to pay dividends or make other payments to us; • engage in certain transactions with our affiliates; and • merge or consolidate with other companies.
Factors such as increased acuity of our patients, health and safety incidents at our facilities, regulatory enforcement actions, negative press, civil liability or general customer dissatisfaction could lead to deterioration in the level of our quality ratings or the public perception of the quality of our services (including as a result of negative publicity about our industry generally), which in turn could lead to a loss of patient placements, referrals and self-pay patients or service users.
Factors such as increased acuity of our patients, health and safety incidents at our facilities, regulatory enforcement actions, negative press, civil liability or general patient dissatisfaction could lead to deterioration in the level of our quality ratings or the public perception of the quality of our services (including as a result of negative publicity about our industry generally), which in turn could lead to a loss of patient placements, referrals and self-pay patients or service users.
Significant changes in business office operations, payor mix, economic conditions or trends in federal and state governmental health coverage could affect our collection of accounts receivable, cash flow and results of operations. If we experience unexpected increases in the growth of uninsured and underinsured patients or in bad debt expenses, our results of operations will be harmed.
Significant changes in business office operations, payor mix, economic conditions or trends in federal and state governmental health coverage could affect our collection of accounts receivable, cash flow and results of operations. If we experience increases in the growth of uninsured and underinsured patients or in bad debt expenses, our results of operations will be harmed.
Further, Medicare and Medicaid regulations, as well as commercial payor contracts, also provide for withholding or suspending payments in certain circumstances, which could adversely affect our cash flow. 17 Our debt could adversely affect our financial health and prevent us from fulfilling our obligations under our financing arrangements.
Further, Medicare and Medicaid regulations, as well as commercial payor contracts, also provide for withholding or suspending payments in certain circumstances, which could adversely affect our cash flow. Our debt could adversely affect our financial health and prevent us from fulfilling our obligations under our financing arrangements.
We also have a number of recurring costs including insurance, utilities and rental costs, and may face increases to other recurring costs such as regulatory compliance costs. There can be no assurance that any of our recurring costs will not grow at a faster rate than our revenue.
We also have a number of recurring costs including insurance, utilities and rental costs, and may face increases to other recurring costs such as regulatory compliance costs. There can be no assurance that any of our recurring costs will not grow at a faster 22 rate than our revenue.
Additionally, the Health Care PRICE Transparency Act, and its corresponding regulations, require hospitals, including psychiatric hospitals, to publicly post their standard and shoppable price lists on their websites. Failure to comply with the hospital price transparency regulations may result in corrective action or civil monetary penalties.
Additionally, the Health Care PRICE Transparency Act, and its corresponding regulations, require hospitals, including psychiatric hospitals, to publicly post their standard and shoppable price lists on their websites. Failure to comply with the hospital 16 price transparency regulations may result in corrective action or civil monetary penalties.
A sizable portion of our revenue from certain residential recovery, eating disorder facilities, CTCs and youth programs is from self-payors. Accordingly, a sustained downturn in the U.S. economy could restrain the ability of our patients and the families of our students to pay for services.
A sizable portion of our revenue from certain residential recovery, eating disorder facilities, CTCs and youth programs is from self-payors. Accordingly, a sustained downturn in the U.S. economy could restrain the ability of our patients and the families of our patients to pay for services.
Continuing inflationary pressure, has in the past, and could in the future, impact our costs of labor and services and the margins we are able to realize on the operation of our facilities and services, all of which could have an adverse 20 impact on our business, financial position, results of operations and cash flows.
Continuing inflationary pressure, has in the past, and could in the future, impact our costs of labor and services and the margins we are able to realize on the operation of our facilities and services, all of which could have an adverse impact on our business, financial position, results of operations and cash flows.
Moreover, if one or more of the analysts who cover us downgrade our stock or if our operating results do not meet their expectations, our stock price could decline. We incur substantial costs as a result of being a public company.
Moreover, if one or more of the analysts who cover us downgrade our stock or if our operating results do not meet their expectations, our stock price could decline. 32 We incur substantial costs as a result of being a public company.
Any successful cybersecurity attack or other unauthorized attempt to access our systems or facilities could result in negative publicity which could damage our reputation or brand with our patients, referral sources, payors, or other third parties and could subject us to substantial sanctions, fines, and damages and civil and criminal penalties under federal and state privacy laws, in addition to litigation with those affected. 25 We may fail to deal with clinical waste in accordance with applicable regulations or otherwise be in breach of relevant medical, health and safety or environmental laws and regulations.
Any successful cybersecurity attack or other unauthorized attempt to access our systems or facilities could result in negative publicity which could damage our reputation or brand with our patients, referral sources, payors, or other third parties and could subject us to substantial sanctions, fines, and damages and civil and criminal penalties under federal and state privacy laws, in addition to litigation with those affected. 28 We may fail to deal with clinical waste in accordance with applicable regulations or otherwise be in breach of relevant medical, health and safety or environmental laws and regulations.
Adverse developments in these tax laws or regulations, or any 16 change in position regarding the application, administration or interpretation thereof, in any applicable jurisdiction, could have a material adverse effect on our business, financial condition or results of operations.
Adverse developments in these tax laws or regulations, or any change in position regarding the application, administration or interpretation thereof, in any applicable jurisdiction, could have a material adverse effect on our business, financial condition or results of operations.
These actions may reduce the amount of revenue we derive from commercial payors. Changes in these government programs in recent years have resulted in limitations on reimbursement and, in some cases, reduced levels of reimbursement for healthcare services.
These actions may reduce the amount of revenue we derive from commercial payors. 19 Changes in these government programs in recent years have resulted in limitations on reimbursement and, in some cases, reduced levels of reimbursement for healthcare services.
As 15 public attention is drawn to the issues of the privacy and security of medical information, states may revise or expand their laws concerning the use and disclosure of health information, or may adopt new laws addressing these subjects.
As public attention is drawn to the issues of the privacy and security of medical information, states may revise or expand their laws concerning the use and disclosure of health information, or may adopt new laws addressing these subjects.
Price transparency initiatives like the No 14 Surprises Act and the Health Care PRICE Transparency Act may impact our ability to obtain or maintain favorable contract terms, and may impact our competitive position and our relationships with patients and insurers.
Price transparency initiatives like the No Surprises Act and the Health Care PRICE Transparency Act may impact our ability to obtain or maintain favorable contract terms, and may impact our competitive position and our relationships with patients and insurers.
As a result, capital appreciation, if any, of our common stock will be a stockholder’s sole source of gain for the foreseeable future. 21 Operational Risks An incident involving one or more of our patients or the failure by one or more of our facilities to provide appropriate care could result in increased regulatory burdens, governmental investigations, litigation, negative publicity and adversely affect the trading price of our common stock.
As a result, capital appreciation, if any, of our common stock will be a stockholder’s sole source of gain for the foreseeable future. 24 Operational Risks An incident involving one or more of our patients or the failure by one or more of our facilities to provide appropriate care could result in increased regulatory burdens, governmental investigations, litigation, negative publicity and adversely affect the trading price of our common stock.
The incurrence of substantial legal fees, damage awards or other fines as well as the potential impact on our brand or reputation as a result of being involved in any legal proceedings could have a material impact on our business, results of operations and financial condition. 13 We carry a large self-insured retention and may be responsible for significant amounts not covered by insurance.
The incurrence of substantial legal fees, damage awards or other fines as well as the potential impact on our brand or reputation as a result of being involved in any legal proceedings could have a material impact on our business, results of operations and financial condition. 15 We carry a large self-insured retention and may be responsible for significant amounts not covered by insurance.
Although we have disaster plans in place and operate pursuant to infectious disease protocols, the potential impact of a pandemic, epidemic or outbreak of an infectious disease with respect to our markets or our facilities is difficult to predict and could adversely impact our business, financial condition or results of operations. 26 If we fail to cultivate new or maintain established relationships with referral sources, our business, financial condition and results of operations could be adversely affected.
Although we have disaster plans in place and operate pursuant to infectious disease protocols, the potential impact of a pandemic, epidemic or outbreak of an infectious disease with respect to our markets or our facilities is difficult to predict and could adversely impact our business, financial condition or results of operations. 29 If we fail to cultivate new or maintain established relationships with referral sources, our business, financial condition and results of operations could be adversely affected.
Such liabilities and related legal or other costs and/or resulting damage to a facility’s reputation could negatively impact our business, financial condition or results of operations. 23 Competing for acquisitions We face competition for acquisition candidates primarily from other for-profit healthcare companies, as well as from not-for-profit entities. Some of our competitors may have greater resources than we do.
Such liabilities and related legal or other costs and/or resulting damage to a facility’s reputation could negatively impact our business, financial condition or results of operations. 26 Competing for acquisitions We face competition for acquisition candidates primarily from other for-profit healthcare companies, as well as from not-for-profit entities. Some of our competitors may have greater resources than we do.
Any delays or stoppages in our projects, the unsatisfactory completion or construction of such projects or the failure of such projects to increase our occupancy levels could have a material adverse effect on our ADC, which would have a corresponding negative impact on our business, results of operations and financial condition. 22 Our business growth and acquisition strategies expose us to a variety of operational and financial risks.
Any delays or stoppages in our projects, the unsatisfactory completion or construction of such projects or the failure of such projects to increase our occupancy levels could have a material adverse effect on our ADC, which would have a corresponding negative impact on our business, results of operations and financial condition. 25 Our business growth and acquisition strategies expose us to a variety of operational and financial risks.
For the year ended December 31, 2024, we recorded non-cash impairment charges of $17.3 million related to the closure of certain facilities, which is recorded on our consolidated statement of operations. The non-cash impairment charges included indefinite-lived asset impairments of $3.5 million, property impairments of $12.4 million and operating lease right-of-use asset impairments of $1.4 million.
For the year ended December 31, 2024, we recorded non-cash impairment charges of $17.3 million related to the closure of certain facilities, which is recorded in loss on impairment in our consolidated statement of operations. The non-cash impairment charges included indefinite-lived asset impairments of $3.5 million, property impairments of $12.4 million and operating lease right-of-use asset impairments of $1.4 million.
Furthermore, the damage to our reputation or to the reputation of the relevant facility from any such incident could be exacerbated by any failure on our part to respond effectively to such incident. 24 The cost of construction materials and labor has significantly increased, and we continue to grow our business through expansion of existing facilities and development of de novo and joint venture facilities.
Furthermore, the damage to our reputation or to the reputation of the relevant facility from any such incident could be exacerbated by any failure on our part to respond effectively to such incident. 27 The cost of construction materials and labor has significantly increased, and we continue to grow our business through expansion of existing facilities and development of de novo and joint venture facilities.
General Risk Factors • Fluctuations in our operating results, quarter to quarter earnings and other factors, including factors outside our control, may result in significant decreases in the price of our common stock. • Future sales of common stock by our existing stockholders may cause our stock price to fall. • If securities or industry analysts do not publish research or reports about our business, if they were to change their recommendations regarding our stock adversely or if our operating results do not meet their expectations, our stock price and trading volume could decline. • We incur substantial costs as a result of being a public company. 12 Risk Factors Any of the following risks could materially and adversely affect our business, financial condition or results of operations.
Fluctuations in our operating results, quarter to quarter earnings and other factors, including factors outside of our control, may result in significant decreases in the price of our common stock. • Future sales of common stock by us or our existing stockholders may cause our stock price to fall. • If securities or industry analysts do not publish research or reports about our business, if they were to change their recommendations regarding our stock adversely or if our operating results do not meet their expectations, our stock price and trading volume could decline. • We incur substantial costs as a result of being a public company. 14 Risk Factors Any of the following risks could materially and adversely affect our business, financial condition or results of operations.
In addition, liabilities of any one or more of our subsidiaries could be imposed on us or our other subsidiaries. 27 Human Capital Risks Our facilities face competition for staffing, labor shortages and higher turnover rates that may increase our labor costs and reduce our profitability.
In addition, liabilities of any one or more of our subsidiaries could be imposed on us or our other subsidiaries. 30 Human Capital Risks Our facilities face competition for staffing, labor shortages and higher turnover rates that may increase our labor costs and reduce our profitability.
Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience. At December 31, 2024, our estimated implicit price concessions represented approximately 17% of our accounts receivable balance as of such date.
Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience. At December 31, 2025, our estimated implicit price concessions represented approximately 17% of our accounts receivable balance as of such date.
A sustained economic downturn or other economic conditions could also adversely affect the counterparties to our agreements, including the lenders under the Credit Facility, causing them to fail to meet their obligations to us. Increased inflationary pressure and rising interest rates may adversely impact our business, financial condition and results of operations.
A sustained economic downturn or other economic conditions could also adversely affect the counterparties to our agreements, including the lenders under the Credit Facility, causing them to fail to meet their obligations to us. Increased inflationary pressure may adversely impact our business, financial condition and results of operations.
Property owners and local authorities have attempted, and may in the future attempt, to use or enact zoning ordinances to eliminate our ability to operate a given treatment facility or program. Local governmental authorities in some cases also have attempted to use litigation and the threat of prosecution to force the closure of certain comprehensive treatment facilities.
Property owners and local authorities have attempted, and may in the future attempt, to use or enact zoning ordinances to eliminate our ability to operate a given treatment facility or program. Local governmental authorities in some cases also have attempted to use litigation and the threat of prosecution to force the closure of certain CTCs.
Although the indentures governing the Senior Notes and the Credit Facility contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of debt that could be incurred in compliance with these restrictions could be substantial.
Although the indentures governing the Senior Notes (as defined below) and the Credit Facility contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of debt that could be incurred in compliance with these restrictions could be substantial.
General Risk Factors Provisions of our charter documents or Delaware law could delay or prevent an acquisition of us, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for stockholders to change management.
Provisions of our charter documents or Delaware law could delay or prevent an acquisition of us, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for stockholders to change management.
Violations of the privacy and security regulations could subject our operations to substantial civil monetary penalties and substantial other costs and penalties associated with a breach of data security, including criminal penalties. We may also be subject to substantial reputational harm if we experience a substantial security breach involving PHI.
Violations of the privacy and security regulations, including HIPAA or the Part 2 regulations, could subject our operations to substantial civil monetary penalties and substantial other costs and penalties associated with a breach of data security, including criminal penalties. We may also be subject to substantial reputational harm if we experience a substantial security breach involving PHI.
Insurance companies and managed care organizations are entering into sole-source contracts with healthcare providers, which could limit our ability to obtain patients since we do not offer the range of services required for these contracts.
The trend by insurance companies and managed care organizations to enter into sole-source contracts may limit our ability to obtain patients. Insurance companies and managed care organizations are entering into sole-source contracts with healthcare providers, which could limit our ability to obtain patients since we do not offer the range of services required for these contracts.
An increase in uninsured or underinsured patients or the deterioration in the collectability of patient accounts receivables could harm our results of operations. Collection of receivables from third-party payors and patients is critical to our operating performance.
An increase in uninsured or underinsured patients, from healthcare policy changes or otherwise, or the deterioration in the collectability of patient accounts receivables could harm our results of operations. Collection of receivables from third-party payors and patients is critical to our operating performance.
Although we have facilities in 39 states and Puerto Rico, we have substantial operations in Pennsylvania, California and Tennessee, which makes us especially sensitive to regulatory, economic, environmental and competitive conditions and changes in those states. Revenue from Pennsylvania, California and Tennessee represented approximately 13%, 8% and 7% of our total revenue for the year ended December 31, 2024, respectively.
Although we have facilities in 40 states and Puerto Rico, we have substantial operations in Pennsylvania, California and Tennessee, which makes us especially sensitive to regulatory, economic, environmental and competitive conditions and changes in those states. Revenue from Pennsylvania, Tennessee, and California represented approximately 13%, 10% and 8% of our total revenue for the year ended December 31, 2025, respectively.
Some of our employees are represented by labor unions and any work stoppage could adversely affect our business. Increased labor union activity could adversely affect our labor costs. At December 31, 2024, a labor union represented approximately 131 of our employees at one of our facilities. We cannot assure you that employee relations will remain stable.
Some of our employees are represented by labor unions and any work stoppage could adversely affect our business. Increased labor union activity could adversely affect our labor costs. At December 31, 2025, a labor union represented approximately 130 of our full-time employees at one of our facilities. We cannot assure you that employee relations will remain stable.
Our operating costs are subject to increases in the wages and salaries of our staff. The most significant operating expense for our facilities is wage costs, which represent the staff costs incurred in providing our services and running our facilities, and which are primarily driven by the number of employees and pay rates.
The most significant operating expense for our facilities is wage costs, which represent the staff costs incurred in providing our services and running our facilities, and which are primarily driven by the number of employees and pay rates.
The market price of our common stock could decline as a result of sales by us or our existing stockholders, particularly our largest stockholders, our directors and executive officers, in the market, or the perception that these sales could occur.
Future sales of common stock by us or our existing stockholders may cause our stock price to fall. The market price of our common stock could decline as a result of sales by us or our existing stockholders, particularly our largest stockholders, our directors and executive officers, in the market, or the perception that these sales could occur.
To the extent that a greater portion of our employee base unionizes and the terms of any collective bargaining agreements are significantly different from our current compensation arrangements, it is possible that our labor costs could increase materially and our business, financial condition or results of operations could be adversely affected. 28 We depend on key management personnel, and the departure of one or more of our key executives or a significant portion of our local facility management personnel could harm our business.
To the extent that a greater portion of our employee base unionizes and the terms of any collective bargaining agreements are significantly different from our current compensation arrangements, it is possible that our labor costs could increase materially and our business, financial condition or results of operations could be adversely affected. 31 We depend on key management personnel, and the failure to attract and retain one or more of our key executives , including our Chief Executive Officer, or a significant portion of our local facility management personnel could harm our business.
At December 31, 2024, we had approximately $2.0 billion of total debt (net of debt issuance costs, discounts and premiums of $8.9 million), which included approximately $1.0 billion of debt under the Credit Facility, $450.0 million of debt under the 5.500% Senior Notes (as defined below) and $475.0 million of debt under the 5.000% Senior Notes (as defined below).
At December 31, 2025, we had approximately $2.5 billion of total debt (net of debt issuance costs, discounts and premiums of $16.8 million), which included approximately $1.0 billion of debt under the Credit Facility, $450.0 million of debt under the 5.500% Senior Notes (as defined below), $475.0 million of debt under the 5.000% Senior Notes (as defined below), and $550.0 million of debt under the 7.375% Senior Notes.
Our ability to generate sufficient cash to service our debt depends on many factors beyond our control. • We are subject to a number of restrictive covenants, which may restrict our business and financing activities. • Despite our current debt level, we may incur significant additional amounts of debt, which could further exacerbate the risks associated with our debt. • If we default on our obligations to pay our debt, we may not be able to make payments on our financing arrangements. 11 • We are subject to volatility in the global capital and credit markets as well as significant developments in macroeconomic and political conditions that are out of our control. • Increased inflationary pressure and rising interest rates may adversely impact our business, financial condition and results of operations. • The industry trend on value-based purchasing may negatively impact our revenue. • The trend by insurance companies and managed care organizations to enter into sole-source contracts may limit our ability to obtain patients. • An increase in uninsured or underinsured patients or the deterioration in the collectability of patient accounts receivables could harm our results of operations.
Our ability to generate sufficient cash to service our debt depends on many factors beyond our control. • We are subject to a number of restrictive covenants, which may restrict our business and financing activities. • Despite our current debt level, we may incur significant additional amounts of debt, which could further exacerbate the risks associated with our debt. • If we default on our obligations to pay our debt, we may not be able to make payments on our financing arrangements. • We are subject to volatility in the global capital and credit markets as well as significant developments in macroeconomic and political conditions that are out of our control, including any effects that a U.S. government shutdown, tariffs or trade disputes may have on financial markets and macroeconomic conditions. 13 • Increased inflationary pressure may adversely impact our business, financial condition and results of operations. • The industry trend on value-based purchasing may negatively impact our revenue. • The trend by insurance companies and managed care organizations to enter into sole-source contracts may limit our ability to obtain patients. • An increase in uninsured or underinsured patients, from healthcare policy changes or otherwise, or the deterioration in the collectability of patient accounts receivables could harm our results of operations.
These factors include certain of the risks discussed herein, outcomes of political elections, demographic changes, operating results of other healthcare companies, changes in our financial estimates or recommendations of securities analysts, speculation in the press or investment community, the possible effects of war, terrorist and other hostilities, adverse weather conditions, climate change, the impact of a pandemic, epidemic, or outbreak of an infectious disease, managed care contract negotiations and terminations, changes in general conditions in the economy or the financial markets or other developments affecting the healthcare industry. 29 Future sales of common stock by our existing stockholders may cause our stock price to fall.
These factors include certain of the risks discussed herein, outcomes of political elections, demographic changes, operating results of other healthcare companies, changes in our financial estimates or recommendations of securities analysts, speculation in the press or investment community, the possible effects of war, terrorist and other hostilities, adverse weather conditions, climate change, the impact of a pandemic, epidemic, or outbreak of an infectious disease, managed care contract negotiations and terminations, changes in general conditions in the economy or the financial markets or other developments affecting the healthcare industry.
Inflation has also resulted in higher interest rates, which in turn will result in higher costs of debt borrowing and could limit our growth strategy. The industry trend on value-based purchasing may negatively impact our revenue. There is a trend in the healthcare industry toward value-based purchasing of healthcare services, rather than per diem charges.
In addition, sustained periods of elevated inflation may result in higher interest rates, which in turn would result in higher costs of debt borrowing and could limit our growth strategy. The industry trend on value-based purchasing may negatively impact our revenue. There is a trend in the healthcare industry toward value-based purchasing of healthcare services, rather than per diem charges.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation. Item 1B. Unresolv ed Staff Comments. None.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.
As a result of these provisions in our charter documents and Delaware law, the price investors may be willing to pay in the future for shares of our common stock may be limited.
As a result of these provisions in our charter documents and Delaware law, the price investors may be willing to pay in the future for shares of our common stock may be limited. Item 1B. Unresolv ed Staff Comments. None.
Our business has in the past been, and may continue to be, affected by a number of factors that are beyond our control, such as general macroeconomic conditions, conditions in the financial services markets, geopolitical conditions and other general political and economic developments, and can continue to be affected by such factors in the future.
Our business has in the past been, and may continue to be, affected by a number of factors that are beyond our control, such as general macroeconomic conditions, conditions in the financial services markets, geopolitical conditions and other general political and economic developments (including a U.S. government shutdown or the imposition of tariffs or trade disputes), and can continue to be affected by such factors in the future.
Further, because we generally recruit our personnel from the local area where the relevant facility is located, the availability in certain areas of suitably qualified personnel can be limited, particularly care home management, qualified teaching personnel and nurses. In addition, certain of our facilities are required to maintain specified staffing levels.
Further, because we generally recruit our personnel from the local area where the relevant facility is located, the availability in certain areas of suitably qualified personnel can be limited, particularly care home management, qualified teaching personnel and nurses.
We have experienced, and may continue to experience, increased inflationary pressure on our business, including increased personnel and supply chain costs. Current and future inflationary effects may be driven by, among other things, supply chain disruptions and governmental stimulus or fiscal policies, and geopolitical instability, including the ongoing conflicts between Ukraine and Russia and in Israel and Gaza.
We have experienced, and may continue to experience, increased inflationary pressure on our business, including increased personnel, construction and supply chain costs. Current and future inflationary effects may be driven by, among other things, supply chain disruptions and governmental stimulus or fiscal policies, and geopolitical instability.
We are subject to taxation in, and to the tax laws and regulations of, the U.S., Puerto Rico and various state jurisdictions as a result of our operations and our corporate and financing structure.
In addition, our effective tax rate could change materially as a result of changes in tax laws. 18 We are subject to taxation in, and to the tax laws and regulations of, the U.S., Puerto Rico and various state jurisdictions as a result of our operations and our corporate and financing structure.
Any adverse development in the tax laws of such jurisdictions or any disagreement with our tax positions could have a material adverse effect on our business, financial condition or results of operations. In addition, our effective tax rate could change materially as a result of changes in tax laws.
Any adverse development in the tax laws of such jurisdictions or any disagreement with our tax positions could have a material adverse effect on our business, financial condition or results of operations.
These broad market fluctuations may adversely affect the trading price of our common stock and, as a result, there may be significant volatility in the market price of our common stock.
The stock markets experience volatility, in some cases unrelated to operating performance. These broad market fluctuations may adversely affect the trading price of our common stock and, as a result, there may be significant volatility in the market price of our common stock.
The restrictions may prevent us from taking actions that management believes would be in the best interests of our business, and may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Credit Facility”. 21 The restrictions may prevent us from taking actions that management believes would be in the best interests of our business, and may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted.
The expertise and efforts of our senior executives and the chief executive officer, chief financial officer, medical directors, physicians and other key members of our facility management personnel are important to the success of our business. It may take time for new officers to be integrated into our business.
The expertise and efforts of our senior executives, including our Chief Executive Officer and Chief Financial Officer, medical directors, physicians and other key members of our facility management personnel are important to the success of our business.
For example, the federal government and some states impose laws governing the use and disclosure of health information pertaining to mental health and/or substance abuse treatment that are more stringent than the rules that apply to healthcare information generally.
For example, the federal government and some states impose laws governing the use and disclosure of health information pertaining to 17 mental health and/or substance abuse treatment that are more stringent than the rules that apply to healthcare information generally. Part 2 regulations mandate strict confidentiality for SUD Records, permitting disclosure only as expressly authorized under the regulations.
For the year ended December 31, 2023, we recorded non-cash impairment charges of $9.8 million related to the closure of certain facilities, which is recorded on our consolidated statement of operations. The non-cash impairment charges included indefinite-lived asset impairments of $5.4 million, property impairments of $2.0 million and operating lease right-of-use asset impairments of $2.4 million.
For the year ended December 31, 2025, we recorded non-cash impairment charges of $1,007.9 million, which is recorded in loss on impairment in our consolidated statement of operations. The non-cash impairment charges included goodwill impairment of $996.2 million, indefinite-lived asset impairments of $0.3 million, property impairments of $10.4 million and operating lease right-of-use asset impairments of $1.0 million.
The Credit Facility also requires us to meet certain financial ratios, including a fixed charge coverage ratio and a consolidated leverage ratio. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Credit Facility”.
The Credit Facility also requires us to meet certain financial ratios, including a fixed charge coverage ratio and a consolidated leverage ratio. See “Item 7.
We are unable at this time to predict how this trend will affect our results of operations, but it could negatively impact our revenue if we are unable to meet quality standards established by both governmental and private payers. The trend by insurance companies and managed care organizations to enter into sole-source contracts may limit our ability to obtain patients.
We are unable at this time to predict how this 23 trend will affect our results of operations, but it could negatively impact our revenue if we are unable to meet quality standards established by both governmental and private payers.
As a result, we are limited in the amount we can record as revenue for our services from these government programs, and if we have a cost increase, we typically will not be able to recover this increase.
Government payors in the U.S., such as Medicaid, generally reimburse us on a fee-for-service basis based on predetermined reimbursement rate schedules. As a result, we are limited in the amount we can record as revenue for our services from these government programs, and if we have a cost increase, we typically will not be able to recover this increase.
Certain changes in the mix of our earnings between jurisdictions and assumptions used in the calculation of income taxes, among other factors, could have a material adverse effect on our overall effective tax rate. Financial Risks Our revenue and results of operations are significantly affected by payments received from the government and third-party payors.
Certain changes in the mix of our earnings between jurisdictions and assumptions used in the calculation of income taxes, among other factors, could have a material adverse effect on our overall effective tax rate.
Fluctuations in our operating results, quarter to quarter earnings and other factors, including factors outside our control, may result in significant decreases in the price of our common stock. The stock markets experience volatility, in some cases unrelated to operating performance.
General Risk Factors Our stock price has been, and may continue to be, volatile. Fluctuations in our operating results, quarter to quarter earnings and other factors, including factors outside of our control, may result in significant decreases in the price of our common stock.
Human Capital Risks • Our facilities face competition for staffing, labor shortages and higher turnover rates that may increase our labor costs and reduce our profitability. • Our performance depends on our ability to recruit and retain quality psychiatrists and other physicians, and nurses, counselors and other medical support personnel.
Human Capital Risks • Our facilities face competition for staffing, labor shortages and higher turnover rates that may increase our labor costs and reduce our profitability. • Our performance depends on our ability to recruit and retain quality psychiatrists and other physicians, and nurses, counselors and other medical support personnel. • We depend on key management personnel, and the failure to attract and retain one or more of our key executives, including our Chief Executive Officer, or a significant portion of our local facility management personnel could harm our business.
Our evaluation of goodwill and the need for any further impairment in subsequent periods is sensitive to revisions to our current projections. See “Item 7.
Our evaluation of goodwill and the need for any further impairment in subsequent periods is sensitive to revisions to our current projections. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Property and Equipment and Other Long-Lived Assets” and “Item 7.
As a result, any increase in our operating costs could have a material adverse effect on our business, results of operations and financial condition. We are subject to volatility in the global capital and credit markets as well as significant developments in macroeconomic and political conditions that are out of our control.
We are subject to volatility in the global capital and credit markets as well as significant developments in macroeconomic and political conditions that are out of our control, including any effects that a U.S. government shutdown, tariffs or trade disputes may have on financial markets and macroeconomic conditions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Property and Equipment and other Long-Lived Assets” and “Item 7. 19 Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Goodwill and Indefinite-Lived Intangible Assets” for additional information.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Goodwill and Indefinite-Lived Intangible Assets” for additional information. Our operating costs are subject to increases in the wages and salaries of our staff.
In January 2024, we entered into the Second Amendment, which provides for the incurrence of $350.0 million of Incremental Term Loans. We may incur substantial additional debt, including additional notes and other debt, in the future.
On February 28, 2025, we entered into the Credit Agreement which provides for a $1.0 billion Revolving Facility and a $650.0 million Term Loan Facility, each maturing on February 28, 2030. We may incur substantial additional debt, including additional notes and other debt, in the future.
A significant portion of our revenue is derived from government healthcare programs. For the year ended December 31, 2024, we derived approximately 71% of our revenue from the Medicare and Medicaid programs. Government payors in the U.S., such as Medicaid, generally reimburse us on a fee-for-service basis based on predetermined reimbursement rate schedules.
Financial Risks Our revenue and results of operations are significantly affected by payments received from the government and third-party payors. A significant portion of our revenue is derived from government healthcare programs. For the year ended December 31, 2025, we derived approximately 72% of our revenue from the Medicare and Medicaid programs.
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Upon operational commencement of a de novo or joint venture facility, we typically expect that it will take 10 to 12 months, on average, to reach break-even results.
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General Risk Factors • Our stock price has been, and may continue to be, volatile.
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In addition, our commercial insurance coverage for the period commencing in September 2025 contains less favorable terms than previous years, including coverage exclusions for incidents involving sexual molestation or abuse, higher premiums and potentially lower aggregate limitations.
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Activist investors and their actions threatened or commenced against us could cause us to incur substantial costs, divert management’s attention and resources, cause uncertainty about the strategic direction of our business and adversely impact our business, financial condition, results of operations and stock price.
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Activist investors have sought and may from time to time seek to effect changes and assert influence on our board of directors and management, including by threatening or commencing a proxy contest or “vote no” campaign, engaging in proxy solicitations or advancing stockholder proposals.
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These actions could have a material adverse effect on us for the following reasons: • Activist investors may attempt to effect changes in how we are governed and our strategic direction, or to acquire control over the Company.
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In particular, activist investors may suggest changes to our strategy, operations, board of directors and management that conflict with our strategic direction and could cause uncertainty amongst employees, patients and our investors about the strategic direction of our business. • Responding to these actions is costly and time-consuming, and could disrupt our operations and divert the attention of our board of directors, management and employees away from their regular duties and the pursuit of business strategies.
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In addition, we may choose to initiate, or may become subject to, litigation as a result of a proxy contest or matters arising from a proxy contest or other activist investor actions, which may serve as a distraction to our board of directors, management and employees and could require us to incur significant additional costs. • Any perceived uncertainties as to our future direction as a result of potential changes to management or the composition of the board of directors may lead to the perception of a change in the direction of the business, instability or lack of continuity, which may be exploited by our competitors, may cause concern to our current or potential patients and employees, may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel and business partners. • Such actions could cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
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A recent example of legislative changes impacting government program funding is the OBBBA, passed by Congress on July 4, 2025, which contains provisions that may impact our financial performance. The OBBBA includes provisions that have varying effective dates, and we cannot predict how future legislation, rulemaking, or judicial action will impact its implementation.
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The OBBBA reduces federal Medicaid expenditures and tightens beneficiary eligibility requirements, including imposing work requirements for adults in Medicaid expansion states and requiring states to conduct eligibility redeterminations at least every six months by December 31, 2026.
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These changes increase the likelihood of patients losing coverage mid-year, which may disrupt treatment continuity, complicate coverage verification, and result in higher levels of uncompensated care and uncollected patient balances.
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Pursuant to the OBBBA, the HHS has also revised regulations governing state directed payment programs to cap total payment rates for certain services at Medicare payment rates and implemented policy changes that have decreased enrollment in ACA marketplace plans, including ending automatic renewals by requiring pre-enrollment verification requirements.
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In addition to the federal healthcare program changes under the OBBBA, the enhanced premium tax credits, originally enacted under the American Rescue Plan Act of 2021, expired on December 31, 2025. Consequently, marketplace premiums have increased substantially, and enrollment for the 2026 plan year declined significantly.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis strategy includes: • conducting an independent cybersecurity maturity assessment to evaluate the health of our overall cyber programs and developing a solid roadmap to continuously improve our defensive posture; • performing regular risk assessments, where we identify potential vulnerabilities and evaluate the likelihood of various cyber threats; • implementing security controls including email and browser protection, audit log monitoring, malware defenses, controlled use of administrative privileges, encryption protocols, and multi-factor authentication; and • implementing progressively challenging employee training and awareness programs, including simulated phishing campaigns, to reduce the risk of human error in the recognition and reporting of potential threats.
Biggest changeThis program is informed by recognized industry standards and regulatory requirements and includes, among other things: 33 • conducting independent cybersecurity maturity and risk assessments to evaluate the effectiveness of our cybersecurity program and to inform a multi-year roadmap for continuous improvement; • performing regular cybersecurity risk assessments to identify potential threats and vulnerabilities and to evaluate their potential impact and likelihood; • implementing layered technical and administrative security controls, including email and web security, audit logging and monitoring, malware protection, encryption, network segmentation, controlled use of administrative privileges, and multi-factor authentication; and • maintaining an enterprise-wide cybersecurity awareness and training program, including simulated phishing exercises, designed to reduce the risk of human error and improve the timely recognition and reporting of potential security incidents.
Item 1C. Cybers ecurity. As part of our Enterprise Risk Management (“ERM”) process, we identify risks and assign responsibility for managing each risk to the appropriate level of management. Cybersecurity is a risk identified in our ERM process. Management has implemented a comprehensive cybersecurity risk management strategy in line with industry standards and regulatory requirements.
Item 1C. Cybers ecurity. Cybersecurity risk is addressed as part of our Enterprise Risk Management ( “ERM”) program. Through this process, we identify key enterprise risks, including cybersecurity, and assign responsibility for managing those risks to appropriate levels of management. Cybersecurity is integrated into our overall risk assessment, governance, and oversight structure.
The Audit and Risk Committee of the board of directors has responsibility of oversight for our enterprise risk assessment and risk management systems. Our Chief Information Officer (“CIO”), Senior Director of Information Security and other delegated 30 positions are responsible for assessing and managing our material risks from cybersecurity risks.
Our Chief Information Security Officer (“CISO”), in coordination with the Chief Information Officer (“CIO”) and other members of management, is responsible for the day-to-day management of our cybersecurity program and for assessing and managing material cybersecurity risks. The CISO has significant experience leading enterprise cybersecurity programs within regulated environments.
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We continuously monitor our networks and systems and integrate threat intelligence feeds to evaluate evolving cyber threats.
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Management has implemented a comprehensive cybersecurity risk management program designed to identify, assess, manage, and mitigate cybersecurity risks to our information systems, data, and operations.
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We conduct regular testing and simulation exercises, including engaging third-party service providers to perform penetration testing, to identify and address weaknesses in our defenses and engage third-party service providers to perform cybersecurity risk assessments, which are based on the National Institute of Standards and Technology framework.
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We continuously monitor our information systems and networks and leverage internal and external threat intelligence sources to identify and evaluate evolving cybersecurity threats. We also conduct periodic testing and simulation activities, including vulnerability assessments and penetration testing performed by third-party service providers, to identify and remediate weaknesses in our security controls.
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Cyber risks are considered and addressed for those third-party relationships deemed critical to our operations, as well as those with access to or custody of confidential data or customer non-public information, including PHI, and those services or products accessed in a cloud environment or involving generative artificial intelligence or other machine learning technologies.
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Our cybersecurity risk assessments and testing activities are informed by the National Institute of Standards and Technology (“NIST”) cybersecurity framework. Cybersecurity risks associated with third-party relationships are evaluated as part of our risk management processes, particularly for vendors deemed critical to our operations or those with access to sensitive or confidential information, including PHI.
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Our CIO has 15 years of experience in cybersecurity and a degree in management information systems. We also have a Cybersecurity Infrastructure Committee that meets monthly. We have implemented an incident response strategy as an element of our overall risk management approach.
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These assessments also consider risks associated with cloud-based services and emerging technologies, including generative artificial intelligence and other machine learning technologies. The Audit and Risk Committee of our Board of Directors provides oversight of our ERM program, including cybersecurity risk.
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Our incident response plan entails clearly-defined roles and responsibilities, established communication protocols and measures to mitigate the impact of any cybersecurity incidents. We have experienced adverse IT events in the past, but to date, we have seen no material impact on our business or operations from these attacks or events .
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We have established a cross-functional cybersecurity governance structure, including regular management-level forums, to support coordination across information technology, legal, compliance, risk management, and business operations. As part of our overall risk management approach, we maintain an incident response program designed to detect, respond to, and recover from cybersecurity incidents.
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We prioritize the detection, response, and recovery from potential breaches and carry cybersecurity insurance which includes cyber breach response services. The scope and coverage of our cybersecurity insurance is reviewed on an annual basis.
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This program includes defined roles and responsibilities, escalation and communication protocols, and procedures to mitigate the potential impact of a cybersecurity incident. We also maintain cybersecurity insurance coverage, including access to incident response services, and review the scope and adequacy of this coverage on an annual basis.
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Risks and potential threats are identified and measured through these monitoring, testing, and response processes procedures and significant risks, and threats are reported by the CIO to the Audit and Risk Committee . 31
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While we have experienced cybersecurity incidents and other adverse information technology events in the past, none have had a material impact on our business, financial condition, or results of operations . We continue to evolve our cybersecurity program to address emerging threats and risks, recognizing that cybersecurity risks cannot be entirely eliminated.
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Material cybersecurity risks and significant developments are reported by management to the Audit and Risk Committee as part of our ongoing risk oversight processes. 34

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table lists, by state or country, the number of behavioral healthcare facilities directly or indirectly owned and operated by us at December 31, 2024: State Facilities Operated Beds Alaska 1 — Arizona 5 633 Arkansas 6 785 California 23 584 Colorado 1 144 Delaware 4 130 Florida 11 541 Georgia 9 413 Illinois 3 353 Indiana 10 337 Iowa 2 — Kansas 1 — Kentucky 1 — Louisiana 6 470 Maine 6 — Maryland 3 — Massachusetts 16 263 Michigan 5 442 Mississippi 3 499 Missouri 4 483 Nevada 4 134 New Hampshire 2 — New Jersey 1 — North Carolina 13 376 Ohio 6 290 Oklahoma 4 108 Oregon 7 — Pennsylvania 31 1,895 Rhode Island 2 — South Carolina 4 63 South Dakota 1 126 Tennessee 14 1,097 Texas 5 619 Utah 6 140 Vermont 1 — Virginia 9 601 Washington 8 — West Virginia 7 — Wisconsin 16 155 Puerto Rico 1 172 262 11,853 See “Item 1.
Biggest changeThe following table lists, by state or country, the number of behavioral healthcare facilities directly or indirectly owned and operated by us at December 31, 2025: State Inpatient Facilities CTCs Total Facilities Operated Beds (1) Alaska — 1 1 — Arizona 4 1 5 633 Arkansas 6 — 6 873 California 7 14 21 512 Colorado 1 — 1 144 Delaware 1 3 4 140 Florida 7 5 12 637 Georgia 4 5 9 413 Illinois 2 — 2 161 Indiana 2 7 9 253 Iowa — 2 2 — Kansas — 1 1 — Kentucky — 1 1 — Louisiana 5 1 6 470 Maine — 6 6 — Maryland — 3 3 — Massachusetts 2 15 17 263 Michigan 4 2 6 634 Mississippi 2 1 3 502 Missouri 4 — 4 483 Minnesota 1 — 1 144 Nevada 1 3 4 134 New Hampshire — 2 2 — New Jersey — 1 1 — North Carolina 3 14 17 492 Ohio 3 3 6 290 Oklahoma 1 3 4 108 Oregon — 7 7 — Pennsylvania 16 19 35 2,146 Rhode Island — 2 2 — South Carolina 1 3 4 63 South Dakota 1 — 1 126 Tennessee 8 6 14 1,101 Texas 5 — 5 745 Utah 2 4 6 140 Vermont — 1 1 — Virginia 3 10 13 625 Washington — 9 9 — West Virginia — 7 7 — Wisconsin 2 16 18 156 Puerto Rico 1 — 1 172 99 178 277 12,560 (1) CTC facilities do not have operated beds.
Business — Operations” for a summary description of the facilities that we own and lease. In addition, we currently lease approximately 61,000 square feet of office space at 6100 Tower Circle, Franklin, Tennessee, for our corporate headquarters. Our headquarters and facilities are generally well maintained and in good operating condition. 32
See “Item 1. Business — Operations” for a summary description of the facilities that we own and lease. In addition, we currently lease approximately 63,000 square feet of office space at 4020 Aspen Grove Dr., Franklin, Tennessee, for our corporate headquarters. Our headquarters and facilities are generally well maintained and in good operating condition. 35

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. Information with respect to this item may be found in Note 11 — Commitments and Contingencies in the accompanying notes to our consolidated financial statements beginning on Page F-1 of this Annual Report on Form 10-K, which information is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not applicable. 33 PAR T II
Biggest changeItem 3. Legal Proceedings. Information with respect to this item may be found in Note 11 — Commitments and Contingencies in the accompanying notes to our consolidated financial statements beginning on Page F-1 of this Annual Report on Form 10-K, which information is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not applicable. 36 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities During the three months ended December 31, 2024, we withheld shares of our common stock to satisfy employee minimum statutory tax withholding obligations payable upon the vesting of restricted stock units, as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 – October 31 4,470 $ 51.73 — — November 1 – November 30 1,015 $ 42.29 — — December 1 – December 31 809 $ 39.09 — — Total 6,294 Purchases of Equity Securities by the Issuer and Affiliated Purchasers On February 25, 2025, our board of directors authorized a share repurchase program (the “share repurchase program”) pursuant to which we may, from time to time, acquire up to $300.0 million of outstanding shares of our common stock, exclusive of any fees, commissions, or other expenses related to such repurchases.
Biggest changeOn February 25, 2025, our board of directors authorized a share repurchase program (the “Share Repurchase Program”) pursuant to which we may, from time to time, acquire up to $300.0 million of outstanding shares of our common stock, exclusive of any fees, commissions, or other expenses related to such repurchases.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matter s and Issuer Purchases of Equity Securities. Our common stock is listed for trading on The NASDAQ Global Select Market under the symbol “ACHC.” Stockholders As of February 27, 2025, there were approximately 612 holders of record of our common stock. Recent Sales of Unregistered Securities None.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matter s and Issuer Purchases of Equity Securities. Our common stock is listed for trading on The NASDAQ Global Select Market under the symbol “ACHC.” Stockholders As of February 25, 2026, there were approximately 603 holders of record of our common stock. Recent Sales of Unregistered Securities None.
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness, and therefore we do not anticipate paying any cash dividends in the foreseeable future.
Dividends We have never declared or paid dividends on our common stock. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness, and therefore we do not anticipate paying any cash dividends in the foreseeable future.
The share repurchase program has no termination date and may be modified, suspended or discontinued by our board of directors at any time. The authorization does not obligate us to repurchase any shares. Dividends We have never declared or paid dividends on our common stock.
The Share Repurchase Program has no termination date and may be modified, suspended or discontinued by our board of directors at any time. The authorization does not obligate us to repurchase any shares.
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Issuer Purchases of Equity Securities The following table provides information with respect to our repurchases of shares of our common stock during the three months ended December 31, 2025: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1 – October 31 3,034 $ 23.18 — $ 250.0 November 1 – November 30 671 19.68 — 250.0 December 1 – December 31 5,119 15.06 — 250.0 Total 8,824 (1) There were no shares repurchased during the three months ended December 31, 2025 under the Share Repurchase Program, and there were 8,824 shares withheld in connection with tax payments due upon vesting of employee restricted stock awards and the use of shares of our common stock to pay the exercise price of employee stock options.
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During the year ended December 31, 2025, we repurchased 1,706,625 shares of our common stock under the Share Repurchase Program that were each cancelled at the time of repurchase for a total of $50.4 million (inclusive of $0.4 million in expenses related thereto).
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As of December 31, 2025, there was $250.0 million remaining under the Share Repurchase Program. 37 Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock with (a) the performance of a broad equity market indicator and (b) the performance of a published industry index or peer group.
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In 2022, we selected the S&P 500 as our broad equity market index as we believe it is more commonly used by investors relative to our prior index.
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We also selected the S&P Health Care Services Select Industry Index as our peer group because we believe it is more representative of healthcare companies that we view as our peers for comparison, benchmarking and other purposes. We have included the performance of the equity market index and peer group index below.
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The graph assumes the investment on December 31, 2020, of $100 and that all dividends were reinvested at the time they were paid. The table following the graph presents the corresponding data for December 31, 2020, and each subsequent fiscal year end.
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Year Ended December 31, 2020 2021 2022 2023 2024 2025 Acadia Healthcare Company, Inc. $ 100.00 $ 120.76 $ 163.75 $ 154.66 $ 78.85 $ 28.22 S&P 500 Index $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 S&P Health Care Services Select Industry Index $ 100.00 $ 110.00 $ 88.35 $ 92.92 $ 94.85 $ 113.00 This stock performance information is being “furnished” and shall not be deemed to be “soliciting material” or subject to Regulation 14A under the Exchange Act, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date of this report and irrespective of any general incorporation by reference language in any such filing, except to the extent we specifically incorporate the information by reference.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+42 added−16 removed59 unchanged
Biggest changeThese risks, uncertainties and other factors include, but are not limited to, the following: • the impact of internal or governmental investigations, regulatory actions, whistleblower lawsuits and other legal proceedings; • the impact of competition for staffing, labor shortages and higher turnover rates on our labor costs and profitability; • the impact of inflationary pressure and interest rate volatility; • compliance with laws and government regulations; • our indebtedness, our ability to meet our debt obligations, and our ability to incur substantially more debt; • the impact of payments received from the government and third-party payors on our revenue and results of operations; • the impact of volatility in the global capital and credit markets, as well as significant developments in macroeconomic and political conditions that are out of our control; • the impact of general economic and employment conditions on our business and future results of operations, including increased construction and other costs due to inflation, the imposition of tariffs or trade disputes; • difficulties in successfully integrating the operations of acquired facilities or realizing the potential benefits and synergies of our acquisitions and joint ventures; • our ability to recruit and retain quality psychiatrists and other physicians, nurses, counselors and other medical support personnel; • the occurrence of patient incidents, which could result in negative media coverage, adversely affect the price of our securities and result in incremental regulatory burdens and governmental investigations; • 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; • the outcome of pending litigation; • the impact of carrying a large self-insured retention, the possibilities of being responsible for significant amounts not covered by insurance, premium increases and insurance not being available on acceptable terms because of our claims experience; • the impact of the enactment, amendment or expiration of statutes and regulations affecting the healthcare industry, and potential reductions to Medicare and Medicaid payment rates, changes in reimbursement practices or funding levels, or modification of Medicaid supplemental payment programs; • our acquisition, joint venture and wholly-owned de novo strategies, which expose us to a variety of operational and financial risks, as well as legal and regulatory risks; • the impact of state efforts to regulate the construction or expansion of healthcare facilities on our ability to operate and expand our operations; 35 • our ability to implement our business strategies; • the impact of disruptions on our inpatient and outpatient volumes caused by pandemics, epidemics or outbreaks of infectious diseases; • our dependence on key management personnel, key executives and local facility management personnel; • our restrictive covenants, which may restrict our business and financing activities; • the impact of adverse weather conditions and climate change, including the effects of hurricanes, wildfires and other natural disasters, and any resulting outmigration; • the risk of a cybersecurity incident and any resulting adverse impact on our operations or violation of laws and regulations regarding information privacy; • the impact of our business if our information systems fail or our databases are destroyed or damaged; • our ability to access capital on acceptable terms; • our future cash flow and earnings; • the impact of our highly competitive industry on patient volumes; • our ability to cultivate and maintain relationships with referral sources; • the impact of the trend for insurance companies and managed care organizations to enter into sole source contracts on our ability to obtain patients; • the impact of value-based purchasing programs on our revenue; • our potential inability to extend leases at expiration; • the impact of controls designed to reduce inpatient services on our revenue; • the impact of different interpretations of accounting principles on our results of operations or financial condition; • the impact of environmental, health and safety laws and regulations, especially in locations where we have concentrated operations; • the impact of laws and regulations relating to privacy and security of patient health information and standards for electronic transactions; • the impact of a change in the mix of our earnings, adverse changes in our effective tax rate and adverse developments in tax laws generally; • changes in interpretations, assumptions and expectations regarding tax legislation and policy, including provisions that may be issued by federal and state taxing authorities; • failure to maintain effective internal control over financial reporting; • the impact of fluctuations in our operating results, quarter to quarter earnings and other factors on the price of our securities; and • those risks and uncertainties described from time to time in our filings with the SEC.
Biggest changeThese risks, uncertainties and other factors include, but are not limited to, the following: • the impact of internal or governmental investigations, regulatory actions, whistleblower lawsuits and other legal proceedings; • our dependence on key management personnel, key executive and local facility management personnel, the failure to attract and retain such personnel, including our Chief Executive Officer, and the impact of any disruptions from the recent transition of various executives; • the impact of competition for staffing, labor shortages and higher turnover rates on our labor costs and profitability; • the impact of inflationary pressure and interest rate volatility; • compliance with laws and government regulations; • our indebtedness, our ability to meet our debt obligations, and our ability to incur substantially more debt; • the impact of payments received from the government and third-party payors on our revenue and results of operations; • the impact of volatility in the global capital and credit markets, as well as significant developments in macroeconomic and political conditions that are out of our control, including any effects that a U.S. government shutdown, tariffs or trade disputes may have on financial markets and macroeconomic conditions; • the impact of general economic and employment conditions on our business and future results of operations, including increased construction and other costs due to inflation, the imposition of tariffs or trade disputes; • the impact from changes in expectations resulting from actuarial and other reviews of our liability reserves and other aspects of our business; • difficulties in successfully integrating the operations of acquired facilities or realizing the potential benefits and synergies of our acquisitions and joint ventures; • our ability to recruit and retain quality psychiatrists and other physicians, nurses, counselors and other medical support personnel; • the occurrence of patient incidents, which could result in negative media coverage, adversely affect the price of our securities and result in incremental regulatory burdens and governmental investigations; • 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; • the outcome of pending litigation; • the impact of carrying a large self-insured retention, the possibilities of being responsible for significant amounts not covered by insurance, premium increases and insurance not being available on acceptable terms because of our claims experience; 39 • the impact of the enactment, amendment or expiration of statutes and regulations affecting the healthcare industry, and potential reductions to Medicare and Medicaid payment rates, changes in reimbursement practices or funding levels, or modification of Medicaid supplemental payment programs; • the impact of the restructuring, consolidation, and elimination of federal agencies that regulate the healthcare industry, which could result in changes to federal agency reviews and enforcement activities, priorities, and guidance, and has the potential to cause delays in obtaining necessary or desired reviews and approvals for our facilities; • our acquisition, joint venture and wholly-owned de novo strategies, which expose us to a variety of operational and financial risks, as well as legal and regulatory risks; • the impact of state efforts to regulate the construction or expansion of healthcare facilities on our ability to operate and expand our operations; • our ability to implement our business strategies; • the potential impact of activist stockholder actions or tactics; • the impact of disruptions on our inpatient and outpatient volumes caused by pandemics, epidemics or outbreaks of infectious diseases; • our restrictive covenants, which may restrict our business and financing activities; • the impact of adverse weather conditions and climate change, including the effects of hurricanes, wildfires and other natural disasters, and any resulting outmigration; • the risk of a cybersecurity incident and any resulting adverse impact on our operations or violation of laws and regulations regarding information privacy; • the impact of our business if our information systems fail or our databases are destroyed or damaged; • our ability to access capital on acceptable terms; • our future cash flow and earnings; • the impact of our highly competitive industry on patient volumes; • our ability to cultivate and maintain relationships with referral sources; • the impact of the trend for insurance companies and managed care organizations to enter into sole source contracts on our ability to obtain patients; • the impact of value-based purchasing programs on our revenue; • our potential inability to extend leases at expiration; • the impact of controls designed to reduce inpatient services on our revenue; • the impact of different interpretations of accounting principles on our results of operations or financial condition; • the impact of environmental, health and safety laws and regulations, especially in locations where we have concentrated operations; • the impact of laws and regulations relating to privacy and security of patient health information and standards for electronic transactions; • the impact of a change in the mix of our earnings, adverse changes in our effective tax rate and adverse developments in tax laws generally; • changes in interpretations, assumptions and expectations regarding tax legislation and policy, including provisions that may be issued by federal and state taxing authorities; • failure to maintain effective internal control over financial reporting; • the impact of fluctuations in our operating results, quarter to quarter earnings and other factors on the price of our securities; • the impact of various executive orders affecting the broader healthcare industry; and • those risks and uncertainties described from time to time in our filings with the SEC. 40 Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements.
Loss on impairment. During the year ended December 31, 2024, we recorded non-cash impairment charges totaling $17.3 million related to the closure of certain facilities. The non-cash impairment charges included indefinite-lived intangible asset impairments of $3.5 million, property impairments of $12.4 million and operating lease right-of-use asset impairments of $1.4 million.
Loss on impairment. During the year ended December 31, 2024, we recorded non-cash impairment charges totaling $17.3 million related to the closure of certain facilities. The 2024 non-cash impairment charges included indefinite-lived intangible asset impairments of $3.5 million, property impairments of $12.4 million and operating lease right-of-use asset impairments of $1.4 million.
During the year ended December 31, 2023, we recorded non-cash impairment charges totaling $9.8 million related to the closure of certain facilities. The non-cash impairment charges included indefinite-lived intangible asset impairments of $5.4 million, property impairments of $2.0 million and operating lease right-of-use asset impairments of $2.4 million. Gain on sale of property.
During the year ended December 31, 2023, we recorded non-cash impairment charges totaling $9.8 million related to the closure of certain facilities. The 2023 non-cash impairment charges included indefinite-lived intangible asset impairments of $5.4 million, property impairments of $2.0 million and operating lease right-of-use asset impairments of $2.4 million. Gain on sale of property.
For the year ended December 31, 2024, the provision for income taxes was $77.4 million, reflecting an effective tax rate of 22.6%, compared to the benefit from taxes of $(9.7) million, reflecting an effective tax rate of 38.2%, for the year ended December 31, 2023.
Provision for (benefit from) income taxes. For the year ended December 31, 2024, the provision for income taxes was $77.4 million, reflecting an effective tax rate of 22.6%, compared to the benefit from taxes of $(9.7) million, reflecting an effective tax rate of 38.2%, for the year ended December 31, 2023.
The 5.500% Senior Notes mature on July 1, 2028 and bear interest at a rate of 5.500% per annum, payable semi-annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2021. 5.000% Senior Notes due 2029 On October 14, 2020, we issued $475.0 million of 5.000% Senior Notes due 2029 (the “5.000% Senior Notes”).
The 5.500% Senior Notes mature on July 1, 2028 and bear interest at a rate of 5.500% per annum, payable semi-annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2021. 48 5.000% Senior Notes due 2029 On October 14, 2020, we issued $475.0 million of 5.000% Senior Notes due 2029 (the “5.000% Senior Notes”).
The Senior Notes issued by us are guaranteed by each of our subsidiaries that guaranteed our obligations under the Credit Facility. The guarantees are full and unconditional and joint and several. We may redeem the Senior Notes at our option, in whole or part, at the dates and amounts set forth in the indentures.
The Senior Notes issued by us are guaranteed by each of our subsidiaries that guarantee our obligations under the Credit Facility. The guarantees are full and unconditional and joint and several. We may redeem the Senior Notes at our option, in whole or part, at the dates and amounts set forth in the indentures.
Such costs directly related to our facilities include, amongst others, labor at the facility level, insurance, including property, professional, legal and general liability insurance, hospital supplies, including medication, utilities and food service, and general maintenance costs for the facility.
Such costs directly related to our facilities include, amongst others, labor at 42 the facility level, insurance, including property, professional, legal and general liability insurance, hospital supplies, including medication, utilities and food service, and general maintenance costs for the facility.
Cash provided by financing activities for the year ended December 31, 2024 primarily consisted of borrowings on long-term debt of $350.0 million, borrowings on revolving credit facility of $305.0 million and contributions from noncontrolling partners in joint ventures of $5.2 million, offset by principal payments on long-term debt of $56.3 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 withholdings, net of proceeds from stock option exercises of $1.3 million.
Cash provided by financing activities for the year ended December 31, 2024 primarily consisted of borrowings on long term debt of $350.0 million, borrowings on revolving credit facility of $305.0 million and 46 contributions from noncontrolling partners in joint ventures of $5.2 million, offset by principal payments on long-term debt of $56.3 million, principal payments on revolving credit facility of $15.0 million, distributions to noncontrolling partners in joint ventures of $2.9 million, payment of debt issuance costs of $1.5 million and repurchase of shares for payroll tax withholdings, net of proceeds from stock option exercises, of $1.3 million.
Same facility professional fees were $166.0 million for 38 the year ended December 31, 2024, or 5.4% of revenue, compared to $156.2 million, for the year ended December 31, 2023, or 5.4% of revenue. Supplies.
Same facility professional fees were $166.0 million for the year ended December 31, 2024, or 5.4% of revenue, compared to $156.2 million, for the year ended December 31, 2023, or 5.4% of revenue. Supplies.
Investors should refer to the agreements governing the Credit Facility 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.
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.
The indentures governing the 5.500% Senior Notes and the 5.000% Senior Notes (together, the “Senior Notes”) contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: (i) pay dividends, redeem stock or 43 make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) engage in certain transactions with affiliates; (v) create restrictions on dividends or other payments by the restricted subsidiaries; (vi) merge, consolidate or sell substantially all of our assets; and (vii) create liens on assets.
The indentures governing the 5.500% Senior Notes, the 5.000% Senior Notes and the 7.375% Senior Notes (together, the “Senior Notes”) contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) engage in certain transactions with affiliates; (v) create restrictions on dividends or other payments by the restricted subsidiaries; (vi) merge, consolidate or sell substantially all of our assets; and (vii) create liens on assets.
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. Year Ended December 31, 2024 compared to the Year Ended December 31, 2023 Revenue.
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. Year Ended December 31, 2025 compared to the Year Ended December 31, 2024 Revenue.
Same facility rents and leases were $42.7 million for the year ended December 31, 2024, or 1.4% of revenue, compared to $42.0 million for the year ended December 31, 2023, or 1.5% of revenue. Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, travel and repairs and maintenance expenses.
Same facility rents and leases were $42.7 million for the year ended December 31, 2024, or 1.4% of revenue, compared to $42.0 million for the year ended December 31, 2023, or 1.5% of revenue. Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses.
These amounts are reviewed as circumstances warrant and adjusted as events occur that affect our potential liability for additional taxes, such as lapsing of applicable statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues, release of administrative guidance, or rendering of a court decision affecting a particular tax issue.
These amounts are reviewed as circumstances warrant and adjusted as events occur that affect the Company’s potential liability for additional taxes, such as lapsing of applicable statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues, release of administrative guidance, or rendering of a court decision affecting a particular tax issue.
A portion of our professional liability risks are insured through a wholly-owned insurance subsidiary providing coverage for up to $7.0 million per claim and $10.0 million for certain other claims through August 31, 2024 and $10.0 million per claim, $15.0 million per claim for certain other claims and $25.0 million for certain batched claims thereafter.
A portion of our professional liability risks are insured through a wholly-owned insurance subsidiary providing coverage for up to $10.0 million per claim, $15.0 million for certain other claims and $25.0 million for certain batched claims through August 31, 2025 and $15.0 million per claim and $25.0 million for certain batched claims thereafter.
The Credit Facility 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 Facility may be accelerated, the lenders’ commitments terminated, and/or the lenders may exercise collateral remedies.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations with our audited consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.
Routine or maintenance capital expenditures, including information technology capital expenditures, were approximately 3% of revenue for the year ended December 31, 2024.
Routine or maintenance capital expenditures, including information technology capital expenditures, were approximately 3% of revenue for the year ended December 31, 2025.
Transaction, legal and other costs represent legal, accounting, government investigation, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective periods, as summarized below (in thousands): Year Ended December 31, 2024 2023 Government investigations $ 30,620 $ 18,796 Legal, accounting and other acquisition-related costs 11,172 12,705 Management transition costs 3,599 23,283 Termination and restructuring costs 1,362 7,242 Total $ 46,753 $ 62,026 Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 11 — Commitments and Contingencies.
Transaction, legal and other costs represent legal, accounting, 45 government investigation, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective periods, as summarized below (in thousands): Year Ended December 31, 2024 2023 Government investigations $ 30,620 $ 18,796 Legal, accounting and other acquisition-related costs 11,172 12,705 Management transition costs 3,599 23,283 Termination and restructuring costs 1,362 7,242 Total $ 46,753 $ 62,026 Government investigations include legal fees and settlement costs related to certain litigation, including the matters referenced in Note 11 — Commitments and Contingencies in the accompanying notes to our consolidated financial statements.
A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.
A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.
Same facility revenue increased by $220.7 million, or 7.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, resulting from same facility growth in patient days of 3.2%, an increase in same facility revenue per patient day of 4.3% and an increase in same facility admissions of 1.3%.
Same facility revenue increased by $220.8 million, or 7.7%, to $3,100.0 million for the year ended December 31, 2024 compared to $2,879.2 million for the year ended December 31, 2023, resulting from same facility growth in patient days of 3.2%, an increase in same facility revenue per day of 4.3% and an increase in same facility admissions of 1.3%.
Salaries, wages and benefits (“SWB”) expense was $1,691.0 million for the year ended December 31, 2024 compared to $1,572.3 million for the year ended December 31, 2023, an increase of $118.7 million. SWB expense included $37.1 million and $32.3 million of equity-based compensation expense for the years ended December 31, 2024 and 2023, respectively.
SWB expense was $1,691.0 million for the year ended December 31, 2024 compared to $1,572.3 million for the year ended December 31, 2023, an increase of $118.7 million. SWB expense included $37.1 million and $32.3 million of equity-based compensation expense for the years ended December 31, 2024 and 2023, respectively.
Consistent with the same facility patient day growth in 2022, the growth in same facility patient days for the year ended December 31, 2023 compared to the year ended December 31, 2022 resulted from the addition of beds to our existing facilities and ongoing demand for our services. Salaries, wages and benefits.
Consistent with the same facility patient day growth in 2024, the growth in same facility patient days for the year ended December 31, 2025 compared to the year ended December 31, 2024 resulted from the addition of beds to our existing facilities and ongoing demand for our services. Salaries, wages and benefits.
Depreciation expense was $149.6 million, $132.3 million and $117.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. The carrying values of long-lived assets are reviewed for possible impairment whenever events, circumstances or operating results indicate that the carrying amount of an asset may not be recoverable.
Depreciation expense was $189.2 million, $149.6 million and $132.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. The carrying values of long-lived assets are reviewed for possible impairment whenever events, circumstances or operating results indicate that the carrying amount of an asset may not be recoverable.
Based on our borrowing level at December 31, 2024, a hypothetical 1% increase in interest rates would decrease our pretax income on an annual basis by approximately $9.6 million. Critical Accounting Policies Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S.
Based on our borrowing level at December 31, 2025, a hypothetical 1% increase in interest rates would decrease our pretax income on an annual basis by approximately $10.4 million. Critical Accounting Policies Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S.
We accrue for tax contingencies when it is more likely than not that a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated.
The Company accrues for tax contingencies when it is more likely than not that a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated.
Cash used in investing activities for the year ended December 31, 2024 primarily consisted of payments of $690.4 million of cash paid for capital expenditures, $53.6 million of cash paid for acquisitions and $3.0 million of cash paid for other, offset by proceeds from the sale of property and equipment of $10.4 million.
Cash used in investing activities for the year ended December 31, 2024 primarily consisted of $690.4 million of cash paid for capital expenditures, $53.6 million of cash paid for acquisitions and $2.9 million of cash paid for other, offset by proceeds from the sale of property and equipment of $10.4 million.
During the year ended December 31, 2024, we recorded non-cash indefinite-lived intangible asset impairment charges of $3.5 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations.
During the years ended December 31, 2025 and 2024, we recorded non-cash indefinite-lived intangible asset impairment charges of $0.3 million and $3.5 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations.
Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($2.9 million and $3.0 million for the years ended December 31, 2023 and 2022, respectively); legal and settlement costs incurred related to certain litigation not included in government investigations ($8.8 million and $2.6 million for the years ended December 31, 2023 and 2022, respectively); and direct costs associated with acquisitions ($1.0 million and $0.2 million for the years ended December 31, 2023 and 2022, respectively).
Legal, accounting and other acquisition-related costs include costs incurred for the development of new facilities ($2.1 million and $5.0 million for the years ended December 31, 2025 and 2024, respectively); legal and settlement costs incurred related to certain litigation not included in government investigations ($6.3 million and $4.8 million for the years ended December 31, 2025 and 2024, respectively); and direct costs associated with acquisitions ($0.1 million and $1.4 million for the years ended December 31, 2025 and 2024, respectively).
We recorded unfavorable adjustments of $10.1 million and $5.3 million to our estimated liability for self-insured professional and general liability claims during the years ended December 31, 2024 and 2023, respectively, relating to the settlement or expected settlement of certain prior year claims.
We recorded unfavorable adjustments of $52.7 million and $10.1 million to our estimated liability for self-insured professional and general liability claims during the years ended December 31, 2025 and 2024, respectively, relating to the settlement or expected settlement of certain prior year claims.
Although management believes that the positions taken on previously 47 filed tax returns are reasonable, we nevertheless have established tax and interest reserves in recognition that various taxing authorities may challenge the positions taken by us resulting in additional liabilities for taxes and interest.
Although management believes that the positions taken on previously filed tax returns are reasonable, the Company nevertheless has established tax and interest reserves in recognition that various taxing authorities may challenge the positions taken by the Company resulting in additional liabilities for taxes and interest.
We have obtained reinsurance coverage from a third-party to cover claims in excess of those limits. The reinsurance policy has a coverage limit of $78.0 million or $75.0 million in the aggregate for certain other claims through August 31, 2024 and $80.0 million or $75.0 million in the aggregate for certain other claims thereafter.
We have obtained reinsurance coverage from a third-party to cover claims in excess of those limits. The reinsurance policy has a coverage limit of $80.0 million or $75.0 million in the aggregate for certain other claims through August 31, 2025 and $75.0 million in the aggregate for claims thereafter, with exclusions for certain types of incidents.
We review our deferred tax assets for recoverability and establish a valuation allowance based on historical taxable income, projected future taxable income, applicable tax strategies, and the expected timing of the reversals of existing temporary differences.
The Company reviews its deferred tax assets for recoverability and establish a valuation allowance based on historical taxable income, projected future taxable income, applicable tax strategies, and the expected timing of the reversals of existing temporary differences.
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These forward-looking statements are made only as of the date of this Annual Report on Form 10-K.
These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These forward-looking statements are made only as of the date of this Annual Report on Form 10-K.
We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. We have accruals for taxes and associated interest that may become payable in future years as a result of audits by tax authorities.
The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company has accruals for taxes and associated interest that may become payable in future years as a result of audits by tax authorities.
As of our annual impairment test on October 1, 2024, we had one reporting unit, behavioral healthcare services. The fair value of our behavioral healthcare services reporting unit substantially exceeded its carrying value, and therefore no impairment was recorded.
As of our annual impairment test on October 1, 2025, the fair value of our behavioral healthcare services reporting unit exceeded its carrying value, and therefore no impairment was recorded.
Cash paid for capital expenditures for the year ended December 31, 2024 was $690.4 million, consisting of routine or maintenance capital expenditures of $104.0 million and expansion capital expenditures of $586.4 million. We define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue.
Cash paid for capital expenditures for the year ended December 31, 2025 was $571.8 million, consisting of routine or maintenance capital expenditures of $104.4 million and expansion capital expenditures of $467.4 million. We define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue.
Acquisitions On February 22, 2024, we acquired substantially all of the assets of Turning Point, a 76-bed specialty provider of substance use disorder and primary mental health treatment services that supports the Salt Lake City, Utah, metropolitan market. Turning Point provides a full continuum of treatment services, including residential, partial hospitalization and intensive outpatient services.
Acquisitions On February 22, 2024, we acquired substantially all of the assets of Turning Point, a 76-bed specialty provider of substance use disorder and primary mental health treatment services that supports the Salt Lake City, Utah, metropolitan market.
At December 31, 2024, our Consolidated Total Net Leverage Ratio was 2.7x, and we were in compliance with all financial covenants. Total Consolidated Net Leverage Ratio is being reported as calculated under the Credit Facility and not pursuant to GAAP.
At December 31, 2025, our Consolidated Total Net Leverage Ratio was 4.0x, 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.
After giving effect to the First Amendment, borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (i) Adjusted Term SOFR 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 (as defined in the Credit Facility).
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 (as defined in the Credit Agreement).
The workers’ compensation liability was $30.7 million at December 31, 2024, of which $12.0 million was included in accrued salaries and benefits and $18.7 million was included in other long-term liabilities, and such liability was $26.8 million at December 31, 2023, of which $12.0 million was included in accrued salaries and benefits and $14.8 million was included in other long-term liabilities.
The workers’ compensation liability was $34.3 million at December 31, 2025, of which $18.5 million was included in accrued salaries and benefits and $15.8 million was included in other long-term liabilities, and such liability was $30.7 million at December 31, 2024, of which $12.0 million was included in accrued salaries and benefits and $18.7 million was included in other long-term liabilities.
The professional and general liability reserve was $109.4 million at December 31, 2023, of which $12.5 million was included in other accrued liabilities and $96.9 million was included in other long-term liabilities. We estimate receivables for the portion of professional and general liability reserves that are recoverable under our insurance policies.
The professional and general liability reserve was $87.5 million at December 31, 2024, of 51 which $12.5 million was included in other accrued liabilities and $75.0 million was included in other long-term liabilities. We estimate receivables for the portion of professional and general liability reserves that are recoverable under our insurance policies.
Such Incremental Facilities may not exceed the sum of (i) the greater of $480.0 million and an amount equal to 100% of the Consolidated EBITDA (as defined in the Credit Facility) at the time of determination (the “Incremental Fixed Basket”), and (ii) the additional amounts that would not cause our Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Facility) to exceed 3.5 to 1.0 (the “Incremental Ratio Basket”).
Such Incremental 47 Facilities may not exceed the sum of (i) the greater of $710.0 million and an amount equal to 100% of our LTM Consolidated EBITDA (as defined in the Credit Agreement) at the time of determination and (ii) additional amounts that would not cause our Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) to exceed 4.0 to 1.0.
Market Risk Our interest expense is sensitive to changes in market interest rates. Our long-term debt outstanding at December 31, 2024 was composed of $917.6 million of fixed-rate debt and $962.5 million of variable-rate debt with interest based on Adjusted Term SOFR plus an applicable margin.
Market Risk Our interest expense is sensitive to changes in market interest rates. Our long-term debt outstanding at December 31, 2025 was composed of $1,462.2 million of fixed-rate debt and $1,037.8 million of variable-rate debt with interest based on Adjusted Term SOFR plus an applicable margin.
The Credit Facility contains customary representations and affirmative and negative covenants, including limitations on our ability and our subsidiaries’ ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay junior indebtedness and enter into affiliate transactions, in each case, subject to customary exceptions.
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.
Same facility rents and leases were $42.5 million for the year ended December 31, 2023, or 1.5% of revenue, compared to $42.1 million for the year ended December 31, 2022, or 1.6% of revenue. Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, travel and repairs and maintenance expenses.
Same facility rents and leases were $41.7 million for the year ended December 31, 2025, or 1.3% of revenue, compared to $42.4 million for the year ended December 31, 2024, or 1.4% of revenue. Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, provider taxes, travel and repairs and maintenance expenses.
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 have concluded.
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 from Debra K. Osteen to Christopher H. Hunter beginning in the first quarter of 2022 concluded in the fourth quarter of 2024.
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. 37 The following table sets forth percent changes in same facility operating data for the years ended December 31, 2024 and 2023 compared to the previous years: Year Ended December 31, 2024 2023 Same Facility Results (a) Revenue growth 7.7% 12.0% Patient days growth 3.2% 5.1% Admissions growth 1.3% 4.9% Average length of stay change (b) 1.9% 0.2% Revenue per patient day growth 4.3% 6.5% (a) Results for the periods presented include facilities we have operated more than one year and exclude certain closed services.
The following table sets forth percent changes in same facility operating data for the years ended December 31, 2025 and 2024 compared to the previous years: Year Ended December 31, 2025 2024 Same Facility Results (a) Revenue growth 4.9% 7.7% Patient days growth 2.1% 3.2% Admissions growth 2.3% 1.3% Average length of stay change (b) -0.2% 1.9% Revenue per patient day growth 2.8% 4.3% (a) Results for the periods presented include facilities we have operated more than one year and exclude certain closed services.
We are the leading publicly traded pure-play provider of behavioral healthcare services in the U.S. Management believes that we are positioned as a leading platform in a highly fragmented industry under the direction of an experienced management team that has significant industry expertise.
Management believes that we are positioned as a leading platform in a highly fragmented industry under the direction of an experienced management team that has significant industry expertise.
The net adjustments to estimated cost report settlements resulted in an increase to revenue of $0.2 million, $1.8 million and $0.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. 45 The following table presents revenue by payor type and as a percentage of revenue for the years ended December 31, 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 2023 2022 Amount % Amount % Amount % Commercial $ 820,828 26.0 % $ 820,701 28.0 % $ 788,895 30.2 % Medicare 447,078 14.2 % 441,761 15.1 % 394,227 15.1 % Medicaid 1,781,615 56.5 % 1,578,518 53.9 % 1,319,600 50.6 % Self-Pay 60,101 1.9 % 67,583 2.3 % 76,050 2.9 % Other 44,341 1.4 % 20,175 0.7 % 31,627 1.2 % Revenue $ 3,153,963 100.0 % $ 2,928,738 100.0 % $ 2,610,399 100.0 % The following tables present a summary of our aging of accounts receivable at December 31, 2024 and 2023: December 31, 2024 Current 30-90 90-150 >150 Total Commercial 17.0 % 4.7 % 2.5 % 8.2 % 32.4 % Medicare 9.0 % 1.6 % 0.6 % 1.2 % 12.4 % Medicaid 33.9 % 5.6 % 2.9 % 5.2 % 47.6 % Self-Pay 1.5 % 1.7 % 1.5 % 2.9 % 7.6 % Total 61.4 % 13.6 % 7.5 % 17.5 % 100.0 % December 31, 2023 Current 30-90 90-150 >150 Total Commercial 17.3 % 5.4 % 3.1 % 9.5 % 35.3 % Medicare 9.3 % 1.4 % 0.5 % 1.1 % 12.3 % Medicaid 33.4 % 5.4 % 2.5 % 4.7 % 46.0 % Self-Pay 1.4 % 1.3 % 1.2 % 2.5 % 6.4 % Total 61.4 % 13.5 % 7.3 % 17.8 % 100.0 % Insurance We are subject to medical malpractice and other lawsuits due to the nature of the services we provide.
The following table presents revenue by payor type and as a percentage of revenue for the years ended December 31, 2025, 2024 and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Amount % Amount % Amount % Commercial $ 813,788 24.6 % $ 820,828 26.0 % $ 820,701 28.0 % Medicare 473,455 14.3 % 447,078 14.2 % 441,761 15.1 % Medicaid 1,912,168 57.7 % 1,781,615 56.5 % 1,578,518 53.9 % Self-Pay 64,822 2.0 % 60,101 1.9 % 67,583 2.3 % Other 48,536 1.4 % 44,341 1.4 % 20,175 0.7 % Revenue $ 3,312,769 100.0 % $ 3,153,963 100.0 % $ 2,928,738 100.0 % The following tables present a summary of our aging of accounts receivable at December 31, 2025 and 2024: December 31, 2025 Current 30-90 90-150 >150 Total Commercial 14.7 % 4.8 % 3.1 % 8.2 % 30.8 % Medicare 8.6 % 1.9 % 1.0 % 1.5 % 13.0 % Medicaid 31.1 % 6.9 % 4.3 % 6.9 % 49.2 % Self-Pay 1.3 % 1.5 % 1.5 % 2.7 % 7.0 % Total 55.7 % 15.1 % 9.9 % 19.3 % 100.0 % December 31, 2024 Current 30-90 90-150 >150 Total Commercial 17.0 % 4.7 % 2.5 % 8.2 % 32.4 % Medicare 9.0 % 1.6 % 0.6 % 1.2 % 12.4 % Medicaid 33.9 % 5.6 % 2.9 % 5.2 % 47.6 % Self-Pay 1.5 % 1.7 % 1.5 % 2.9 % 7.6 % Total 61.4 % 13.6 % 7.5 % 17.5 % 100.0 % Insurance We are subject to medical malpractice and other lawsuits due to the nature of the services we provide.
However, there can be no assurance that any such adjustments and final settlements will not have a material effect on our financial condition or results of operations. Our cost report payables were $0.8 million and $9.3 million as of December 31, 2024 and 2023, respectively, and were included in other current liabilities on the consolidated balance sheet.
However, there can be no assurance that any such adjustments and final settlements will not have a 50 material effect on our financial condition or results of operations. We had cost report receivables of $8.4 million as of December 31, 2025 which are included in other current assets on the consolidated balance sheet.
In addition, the Credit Facility contains financial covenants requiring us on a consolidated basis to maintain, as of the last day of any consecutive four fiscal quarter period, a Consolidated Total Net Leverage Ratio of not more than 4.5 to 1.0 (which may be increased to 5.0 to 1.0 for a period of up to four consecutive fiscal quarters following the consummation of certain material acquisitions) and a Consolidated Interest Coverage Ratio (as defined in the Credit Facility) of at least 3.0 to 1.0.
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 (as defined in the Credit Agreement) of at least 3.0 to 1.0.
The remaining outstanding principal balance of the Term Loan Facility is due on the maturity date of March 17, 2026. 42 We have the ability to increase the amount of the Credit Facility, which may take the form of increases to the Revolving Facility or the Term Loan Facility or the issuance of one or more incremental term loan facilities (collectively, the “Incremental Facilities”), upon obtaining additional commitments from new or existing lenders and the satisfaction of customary conditions precedent for such Incremental Facilities.
We have the ability to increase the amount of the Credit Facility, which may take the form of increases to the Revolving Facility or the Term Loan Facility or the issuance of one or more Incremental Facilities, upon obtaining additional commitments from new or existing lenders and the satisfaction of certain customary conditions precedent for such Incremental Facilities.
Credit Facility On March 17, 2021, we entered into the Credit Facility, which provided for a $600.0 million Revolving Facility and a Term Loan Facility in an initial principal amount of $425.0 million, each maturing on March 17, 2026. The Revolving Facility further provides for a $20.0 million subfacility for the issuance of letters of credit.
Prior Credit Facility On March 17, 2021, we entered into the Prior Credit Facility, which provided for a $600.0 million Prior Revolving Facility and Prior Term Loan Facility, each of which was scheduled to mature on March 17, 2026. The Prior Revolving Facility further provided for a $20.0 million subfacility for the issuance of letters of credit.
Cash used in investing activities for the year ended December 31, 2023 primarily consisted of payments of $424.1 million of cash paid for capital expenditures, $0.3 million of cash paid for acquisitions and $2.2 million of cash paid for other, offset by proceeds from the sale of property and equipment of $29.4 million.
Cash used in investing activities for the year ended December 31, 2025 primarily consisted of $571.8 million of cash paid for capital expenditures, and $8.2 million of cash paid for acquisitions, offset by proceeds from the sale of property and equipment of $23.8 million.
The 5.000% Senior Notes mature on April 15, 2029 and bear interest at a rate of 5.000% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021.
The 5.000% Senior Notes mature on April 15, 2029 and bear interest at a rate of 5.000% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021. 7.375% Senior Notes due 2033 On March 10, 2025, we issued $550.0 million of 7.375% Senior Notes due 2033 (the “7.375% Senior Notes”).
Results of Operations The following table illustrates our consolidated results of operations for the respective periods shown (dollars in thousands): Year Ended December 31, 2024 2023 2022 Amount % Amount % Amount % Revenue $ 3,153,963 100.0 % $ 2,928,738 100.0 % $ 2,610,399 100.0 % Salaries, wages and benefits 1,691,024 53.6 % 1,572,330 53.7 % 1,393,434 53.4 % Professional fees 189,706 6.0 % 176,013 6.0 % 158,013 6.1 % Supplies 112,713 3.6 % 105,992 3.6 % 100,200 3.8 % Rents and leases 47,861 1.5 % 46,552 1.6 % 45,462 1.7 % Other operating expenses 440,788 14.0 % 388,906 13.3 % 349,277 13.4 % Income from provider relief fund — 0.0 % (6,419 ) (0.2 )% (21,451 ) (0.8 )% Depreciation and amortization 149,595 4.7 % 132,349 4.5 % 117,769 4.5 % Interest expense, net 116,368 3.7 % 82,125 2.8 % 69,760 2.7 % Legal settlements expense — 0.0 % 394,181 13.5 % — 0.0 % Loss on impairment 17,276 0.5 % 9,790 0.3 % — 0.0 % Gain on sale of property — 0.0 % (9,747 ) (0.3 )% — 0.0 % Transaction, legal and other costs 46,753 1.5 % 62,026 2.1 % 23,792 0.9 % Total expenses 2,812,084 89.1 % 2,954,098 100.9 % 2,236,256 85.7 % Income (loss) before income taxes 341,879 10.9 % (25,360 ) (0.9 )% 374,143 14.3 % Provision for (benefit from) income taxes 77,395 2.5 % (9,699 ) (0.3 )% 94,110 3.6 % Net income (loss) 264,484 8.4 % (15,661 ) (0.6 )% 280,033 10.7 % Net income attributable to noncontrolling interests (8,872 ) (0.3 )% (6,006 ) (0.2 )% (6,894 ) (0.3 )% Net income (loss) attributable to Acadia Healthcare Company, Inc. $ 255,612 8.1 % $ (21,667 ) (0.8 )% $ 273,139 10.4 % We believe that we are well positioned to help meet the growing demand for behavioral healthcare services and recorded revenue growth of 7.7% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Turning Point provides a full continuum of treatment services, including residential, partial hospitalization and intensive outpatient services. 41 Results of Operations The following table illustrates our consolidated results of operations for the respective periods shown (dollars in thousands): Year Ended December 31, 2025 2024 2023 Amount % Amount % Amount % Revenue $ 3,312,769 100.0 % $ 3,153,963 100.0 % $ 2,928,738 100.0 % Salaries, wages and benefits 1,820,703 55.0 % 1,691,024 53.6 % 1,572,330 53.7 % Professional fees 195,475 5.9 % 189,706 6.0 % 176,013 6.0 % Supplies 118,047 3.6 % 112,713 3.6 % 105,992 3.6 % Rents and leases 48,022 1.4 % 47,861 1.5 % 46,552 1.6 % Other operating expenses 553,308 16.7 % 440,788 14.0 % 388,906 13.3 % Income from provider relief fund — 0.0 % — 0.0 % (6,419 ) (0.2 )% Depreciation and amortization 189,249 5.7 % 149,595 4.7 % 132,349 4.5 % Interest expense, net 138,864 4.2 % 116,368 3.7 % 82,125 2.8 % Debt extinguishment costs 1,269 0.0 % — 0.0 % — 0.0 % Legal settlements expense 150,966 4.6 % — 0.0 % 394,181 13.5 % Loss on impairment 1,007,892 30.4 % 17,276 0.5 % 9,790 0.3 % Gain on sale of property (8,715 ) (0.3 )% — 0.0 % (9,747 ) (0.3 )% Transaction, legal and other costs 163,630 4.9 % 46,753 1.5 % 62,026 2.1 % Total expenses 4,378,710 132.1 % 2,812,084 89.1 % 2,954,098 100.9 % (Loss) income before income taxes (1,065,941 ) (32.1 )% 341,879 10.9 % (25,360 ) (0.9 )% Provision for (benefit from) income taxes 25,982 0.8 % 77,395 2.5 % (9,699 ) (0.3 )% Net (loss) income (1,091,923 ) (33.0 )% 264,484 8.4 % (15,661 ) (0.6 )% Net income attributable to noncontrolling interests (10,849 ) (0.3 )% (8,872 ) (0.3 )% (6,006 ) (0.2 )% Net (loss) income attributable to Acadia Healthcare Company, Inc. $ (1,102,772 ) (33.3 )% $ 255,612 8.1 % $ (21,667 ) (0.8 )% We believe that we are well positioned to help meet the growing demand for behavioral healthcare services and recorded revenue growth of 5.0% for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The projected interest payments reflect interest rates in place on our variable-rate debt at December 31, 2024. (b) Amounts exclude variable components of lease payments. 44 Off-Balance Sheet Arrangements At December 31, 2024, we had standby letters of credit outstanding of $3.5 million related to security for the payment of claims as required by our workers’ compensation insurance program.
The projected interest payments reflect interest rates in place on our variable-rate debt at December 31, 2025. (b) Amounts exclude variable components of lease payments. Off-Balance Sheet Arrangements At December 31, 2025, we had standby letters of credit outstanding of $1.2 million related to security for multiple development projects.
Supplemental Guarantor Financial Information We conduct all of our business through our subsidiaries. The Senior Notes are jointly and severally guaranteed on an unsecured senior basis by all of our subsidiaries that guarantee our obligations under the Credit Facility.
Supplemental Guarantor Financial Information We conduct all of our business through our subsidiaries. The Senior Notes are jointly and severally guaranteed on an unsecured senior basis by all of our subsidiaries that guarantee our obligations under the Credit Facility. The summarized financial information presented below is consistent with our consolidated financial statements, except transactions between combining entities have been eliminated.
Days sales outstanding at December 31, 2024 was 43 compared to 45 at December 31, 2023. Cash used in investing activities for the year ended December 31, 2024 was $736.5 million compared to $397.2 million for the year ended December 31, 2023.
Cash used in investing activities for the year ended December 31, 2025 was $556.2 million compared to $736.5 million for the year ended December 31, 2024.
During the year ended December 31, 2023, we borrowed $40.0 million on the Revolving Facility and repaid $35.0 million of the balance outstanding.
For the year ended December 31, 2024, we borrowed $305.0 million on the Prior Revolving Facility and repaid $15.0 million of the balance outstanding.
Same facility revenue increased by $309.3 million, or 12.0%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, resulting from same facility growth in patient days of 5.1%, an increase in same facility revenue per day of 6.5% and an increase in the average length of stay of 4.9%.
Same facility revenue increased by $151.5 million, or 4.9%, to $3,231.4 million for the year ended December 31, 2025 compared to $3,079.9 million for the year ended December 31, 2024, resulting from same facility growth in patient days of 2.1%, an increase in same facility revenue per patient day of 2.8% and an increase in same facility admissions of 2.3%.
Same facility SWB expense was $1,396.1 million for the year ended December 31, 2023, or 48.2% of revenue, compared to $1,253.3 million for the year ended December 31, 2022, or 48.4% of revenue. Professional fees.
Same facility SWB expense was $1,587.3 million for the year ended December 31, 2025, or 49.1% of revenue, compared to $1,499.1 million for the year ended December 31, 2024, or 48.7% of revenue. Professional fees.
The professional and general liability reserve was $87.5 million at December 31, 2024, of which $12.5 million was included in other accrued liabilities and $75.0 million was included in other long-term liabilities.
The professional and general liability reserve was $181.8 million at December 31, 2025, of which $31.4 million was included in other accrued liabilities and $150.4 million was included in other long-term liabilities.
During the year ended December 31, 2023, we recorded non-cash indefinite-lived intangible asset impairment charges of $5.4 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations. Income Taxes We use the asset and liability method of accounting for income taxes.
During the year ended December 31, 2024, we recorded non-cash property impairment charges of $12.4 million and non-cash operating lease right-of-use asset impairment charges of $1.4 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations.
Subject to certain exceptions, substantially all of our existing and subsequently acquired or organized direct or indirect wholly-owned U.S. subsidiaries are required to guarantee the repayment of our obligations under the Credit Facility. We and such guarantor subsidiaries have granted a security interest in substantially all personal property assets as collateral for the obligations under the Credit Facility.
Subject to certain exceptions, substantially all of our existing and subsequently acquired or organized direct and indirect wholly-owned U.S. subsidiaries are required to guarantee the repayment of our obligations under the Credit Agreement.
As we continue to monitor the implications of potential tax legislation in each of our jurisdictions, we may adjust our estimates and record additional amounts for tax assets and liabilities. Any adjustments to our tax assets and liabilities could materially impact our provision for income taxes and our effective tax rate in the periods in which they are made.
As we continue to monitor the implications of potential tax legislation in each of our jurisdictions, we may adjust our estimates and record additional amounts for tax assets and liabilities.
Supplies expense was $106.0 million for the year ended December 31, 2023, or 3.6% of revenue, compared to $100.2 million for the year ended December 31, 2022, or 3.8% of revenue.
Supplies expense was $118.0 million for the year ended December 31, 2025, or 3.6% of revenue, compared to $112.7 million for the year ended December 31, 2024, or 3.6% of revenue.
Same facility supplies expense was $104.0 million for the year ended December 31, 2023, or 3.6 of revenue, compared to $99.0 million for the year ended December 31, 2022, or 3.8% of revenue. Rents and leases.
Same facility supplies expense was $113.4 million for the year ended December 31, 2025, or 3.5% of revenue, compared to $109.2 million for the year ended December 31, 2024, or 3.5% of revenue. Rents and leases.
The non-cash impairment charges included indefinite-lived intangible asset impairments of $5.4 million, property impairments of $2.0 million and operating lease right-of-use asset impairments of $2.4 million. Gain on sale of property. During the year ended December 31, 2023, we recorded a $9.7 million gain on facility property sale. 40 Transaction, legal and other costs.
Loss on impairment. During the year ended December 31, 2025, we recorded non-cash impairment charges totaling $1,007.9 million. The 2025 non-cash impairment charges included goodwill impairment of $996.2 million, indefinite-lived intangible asset impairments of $0.3 million, property impairments of $10.4 million and operating lease right-of-use asset impairments of $1.0 million.
Professional fees were $176.0 million for the year ended December 31, 2023, or 6.0% of revenue, compared to $158.0 million for the year ended December 31, 2022, or 6.1% of revenue.
Professional fees were $195.5 million for the year ended December 31, 2025, or 5.9% of revenue, compared to $189.7 million for the year ended December 31, 2024, or 6.0% of revenue.
During the year ended December 31, 2023, we recorded non-cash property impairment charges of $2.0 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations. We performed an impairment review of long-lived assets in the fourth quarter of 2024, 2023 and 2022 and recorded no impairment.
During the year ended December 31, 2025, we recorded non-cash property impairment charges of $10.4 million and non-cash operating lease right-of-use asset impairment charges of $1.0 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations.
Termination and restructuring costs include costs, net of gains, incurred related to the closure and disposition of certain facilities or contract amendments. 39 Provision for (benefit from) income taxes.
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.
Rents and leases were $46.6 million for the year ended December 31, 2023, or 1.6% of revenue, compared to $45.5 million for the year ended December 31, 2022, or 1.7% of revenue.
Rents and leases were $48.0 million for the year ended December 31, 2025, or 1.4% of revenue, compared to $47.9 million for the year ended December 31, 2024, or 1.5% of revenue.
Liquidity and Capital Resources Cash provided by operating activities for the year ended December 31, 2024 was $129.7 million compared to $462.3 million for the year ended December 31, 2023. The decline in cash provided by operating activities was primarily due to the Desert Hills Litigation payments made during the year ended December 31, 2024.
Liquidity and Capital Resources Cash provided by operating activities for the year ended December 31, 2025 was $131.9 million compared to $129.7 million for the year ended December 31, 2024.
Same facility professional fees were $156.0 million for the year ended December 31, 2023, or 5.4% of revenue, compared to $145.2 million, for the year ended December 31, 2022, or 5.6% of revenue. Supplies.
Same facility professional fees were $163.7 million for the year ended December 31, 2025, or 5.1% of revenue, compared to $163.3 million, for the year ended December 31, 2024, or 5.3% of revenue. Supplies.
Other operating expenses were $388.9 million for the year ended December 31, 2023, or 13.3% of revenue, compared to $349.3 million for the year ended December 31, 2022, or 13.4% of revenue.
Same facility other operating expenses were $500.9 million for the year ended December 31, 2025, or 15.5% of revenue, compared to $410.6 million for the year ended December 31, 2024, or 13.3% of revenue.
Such receivable was $9.3 million at December 31, 2024, of which $0.5 million was included in other current assets and $8.8 million was included in other assets, and such receivable was $62.3 million at December 31, 2023, of which $33.6 million was included in other current assets and $28.7 million was included in other assets. 46 Our statutory workers’ compensation program is fully insured with a $0.5 million deductible per accident.
Such receivable was $28.8 million at December 31, 2025, of which $7.2 million was included in other current assets and $21.6 million was included in other assets, and such receivable was $9.3 million at December 31, 2024, of which $0.5 million was included in other current assets and $8.8 million was included in other assets.
Senior Notes 5.500% Senior Notes due 2028 On June 24, 2020, we issued $450.0 million of 5.500% Senior Notes due 2028 (the “5.500% Senior Notes”).
In connection therewith, we recorded a loss on extinguishment of $1.3 million, which is included in debt extinguishment costs in the consolidated statements of operations. Senior Notes 5.500% Senior Notes due 2028 On June 24, 2020, we issued $450.0 million of 5.500% Senior Notes due 2028 (the “5.500% Senior Notes”).
For the year ended December 31, 2023, the benefit from income taxes was $(9.7) million, reflecting an effective tax rate of 38.2%, compared to the provision for income taxes of $94.1 million, reflecting an effective tax rate of 25.2%, for the year ended December 31, 2022.
Provision for income taxes . For the year ended December 31, 2025, the provision for income taxes was $26.0 million, reflecting an effective tax rate of (2.4)%, compared to the provision for taxes of $77.4 million, reflecting an effective tax rate of 22.6%, for the year ended December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed1 unchanged
Biggest changeFinancial Statemen ts and Supplementary Data Information with respect to this Item is contained in our consolidated financial statements beginning on Page F-1 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure None.
Biggest changeFinancial Statemen ts and Supplementary Data Information with respect to this Item is contained in our consolidated financial statements beginning on Page F-1 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure None. 53

Other ACHC 10-K year-over-year comparisons