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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-35331

Acadia Healthcare Company, Inc.

(Exact name of registrant as specified in its charter)

Delaware |  | 45-2492228
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

6100 Tower Circle, Suite 1000

Franklin, Tennessee 37067

(Address, including zip code, of principal executive offices)

(615) 861-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Stock, $.01 par value |  | ACHC |  | NASDAQ Global Select Market

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ |  | Accelerated filer | ☐ Non-accelerated filer | ☐
Smaller reporting company | ☐ |  | Emerging growth company | ☐ |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

At April 27, 2023, there were 92,034,672 shares of the registrant’s common stock outstanding.

ACADIA HEALTHCARE COMPANY, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION |
Item 1. |  | Financial Statements | 1
|  | Condensed Consolidated Balance Sheets (Unaudited) | 1
|  | Condensed Consolidated Statements of Income (Unaudited) | 2
|  | Condensed Consolidated Statements of Equity (Unaudited) | 3
|  | Condensed Consolidated Statements of Cash Flows (Unaudited) | 4
|  | Notes to Condensed Consolidated Financial Statements (Unaudited) | 5
Item 2. |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18
Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk | 28
Item 4. |  | Controls and Procedures | 28
PART II – OTHER INFORMATION |
Item 1. |  | Legal Proceedings | 29
Item 1A. |  | Risk Factors | 29
Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds | 29
Item 6. |  | Exhibits | 30
SIGNATURES | 31

PART I – FINAN CIAL INFORMATION

Item 1. Financi al Statements

Acadia Healthcare Company, Inc.

Condensed Consolida ted Balance Sheets

(Unaudited)

|  | March 31, 2023 |  |  | December 31, 2022 |
|  | (In thousands, except share and per share amounts) |
ASSETS |  |  |  |  |  |
Current assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 63,829 |  |  | $ | 97,649 |
Accounts receivable, net |  |  | 346,407 |  |  |  | 322,439 |
Other current assets |  |  | 127,554 |  |  |  | 86,037 |
Total current assets |  |  | 537,790 |  |  |  | 506,125 |
Property and equipment, net |  |  | 1,998,037 |  |  |  | 1,952,045 |
Goodwill |  |  | 2,222,805 |  |  |  | 2,222,805 |
Intangible assets, net |  |  | 76,247 |  |  |  | 76,041 |
Deferred tax assets |  |  | 2,918 |  |  |  | 2,950 |
Operating lease right-of-use assets |  |  | 133,278 |  |  |  | 135,238 |
Other assets |  |  | 73,181 |  |  |  | 92,697 |
Total assets |  | $ | 5,044,256 |  |  | $ | 4,987,901 |
LIABILITIES AND EQUITY |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Current portion of long-term debt |  | $ | 21,250 |  |  | $ | 21,250 |
Accounts payable |  |  | 125,729 |  |  |  | 104,723 |
Accrued salaries and benefits |  |  | 94,912 |  |  |  | 125,298 |
Current portion of operating lease liabilities |  |  | 26,415 |  |  |  | 26,463 |
Other accrued liabilities |  |  | 109,823 |  |  |  | 110,592 |
Total current liabilities |  |  | 378,129 |  |  |  | 388,326 |
Long-term debt |  |  | 1,399,778 |  |  |  | 1,364,541 |
Deferred tax liabilities |  |  | 92,767 |  |  |  | 92,588 |
Operating lease liabilities |  |  | 114,592 |  |  |  | 116,429 |
Other liabilities |  |  | 128,933 |  |  |  | 125,033 |
Total liabilities |  |  | 2,114,199 |  |  |  | 2,086,917 |
Redeemable noncontrolling interests |  |  | 90,455 |  |  |  | 88,257 |
Equity: |  |  |  |  |  |
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued |  |  | — |  |  |  | — |
Common stock, $0.01 par value; 180,000,000 shares authorized; 90,953,107 and 89,913,659 issued and outstanding at March 31, 2023 and December 31, 2022, respectively |  |  | 910 |  |  |  | 899 |
Additional paid-in capital |  |  | 2,619,289 |  |  |  | 2,658,440 |
Retained earnings |  |  | 219,403 |  |  |  | 153,388 |
Total equity |  |  | 2,839,602 |  |  |  | 2,812,727 |
Total liabilities and equity |  | $ | 5,044,256 |  |  | $ | 4,987,901 |

See accompanying notes.

1

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | (In thousands, except per share amounts) |
Revenue |  | $ | 704,267 |  |  | $ | 616,653 |
Salaries, wages and benefits (including equity-based compensation expense of $7,629 and $7,925, respectively) |  |  | 391,177 |  |  |  | 335,762 |
Professional fees |  |  | 41,125 |  |  |  | 36,911 |
Supplies |  |  | 26,021 |  |  |  | 23,699 |
Rents and leases |  |  | 11,424 |  |  |  | 11,249 |
Other operating expenses |  |  | 90,838 |  |  |  | 81,425 |
Depreciation and amortization |  |  | 31,569 |  |  |  | 28,926 |
Interest expense, net |  |  | 19,999 |  |  |  | 15,787 |
Transaction-related expenses |  |  | 6,471 |  |  |  | 3,582 |
Total expenses |  |  | 618,624 |  |  |  | 537,341 |
Income before income taxes |  |  | 85,643 |  |  |  | 79,312 |
Provision for income taxes |  |  | 19,085 |  |  |  | 17,402 |
Net income |  |  | 66,558 |  |  |  | 61,910 |
Net income attributable to noncontrolling interests |  |  | (543 | ) |  |  | (1,073 | )
Net income attributable to Acadia Healthcare Company, Inc. |  | $ | 66,015 |  |  | $ | 60,837 |
Earnings per share attributable to Acadia Healthcare Company, Inc. stockholders: |  |  |  |  |  |
Basic |  | $ | 0.73 |  |  | $ | 0.68 |
Diluted |  | $ | 0.72 |  |  | $ | 0.67 |
Weighted-average shares outstanding: |  |  |  |  |  |
Basic |  |  | 90,101 |  |  |  | 89,258 |
Diluted |  |  | 91,391 |  |  |  | 91,012 |

See accompanying notes.

2

Acadia Healthcare Company, Inc.

Condensed Consolidate d Statements of Equity

(Unaudited)

(In thousands)

|  | Common Stock |  |  | Additional Paid-in |  |  | Retained Earnings (Accumulated |  |  |  |
|  | Shares |  |  | Amount |  |  | Capital |  |  | Deficit) |  |  | Total |
Balance at December 31, 2021 |  |  | 89,028 |  |  | $ | 890 |  |  | $ | 2,636,350 |  |  | $ | (119,751 | ) |  | $ | 2,517,489 |
Common stock issued under stock incentive plans |  |  | 633 |  |  |  | 7 |  |  |  | 3,742 |  |  |  | — |  |  |  | 3,749 |
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises |  |  | — |  |  |  | — |  |  |  | (15,490 | ) |  |  | — |  |  |  | (15,490 | )
Equity-based compensation expense |  |  | — |  |  |  | — |  |  |  | 7,925 |  |  |  | — |  |  |  | 7,925 |
Net income attributable to Acadia Healthcare Company, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 60,837 |  |  |  | 60,837 |
Balance at March 31, 2022 |  |  | 89,661 |  |  |  | 897 |  |  |  | 2,632,527 |  |  |  | (58,914 | ) |  |  | 2,574,510 |
Common stock issued under stock incentive plans |  |  | 113 |  |  |  | 1 |  |  |  | 3,147 |  |  |  | — |  |  |  | 3,148 |
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises |  |  | — |  |  |  | — |  |  |  | (1,275 | ) |  |  | — |  |  |  | (1,275 | )
Equity-based compensation expense |  |  | — |  |  |  | — |  |  |  | 6,580 |  |  |  | — |  |  |  | 6,580 |
Net income attributable to Acadia Healthcare Company, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 80,079 |  |  |  | 80,079 |
Balance at June 30, 2022 |  |  | 89,774 |  |  |  | 898 |  |  |  | 2,640,979 |  |  |  | 21,165 |  |  |  | 2,663,042 |
Common stock issued under stock incentive plans |  |  | 101 |  |  |  | 1 |  |  |  | 3,066 |  |  |  | — |  |  |  | 3,067 |
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises |  |  | — |  |  |  | — |  |  |  | (740 | ) |  |  | — |  |  |  | (740 | )
Equity-based compensation expense |  |  | — |  |  |  | — |  |  |  | 7,240 |  |  |  | — |  |  |  | 7,240 |
Net income attributable to Acadia Healthcare Company, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 71,099 |  |  |  | 71,099 |
Balance at September 30, 2022 |  |  | 89,875 |  |  |  | 899 |  |  |  | 2,650,545 |  |  |  | 92,264 |  |  |  | 2,743,708 |
Common stock issued under stock incentive plans |  |  | 39 |  |  |  | — |  |  |  | 1,649 |  |  |  | — |  |  |  | 1,649 |
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises |  |  | — |  |  |  | — |  |  |  | (287 | ) |  |  | — |  |  |  | (287 | )
Equity-based compensation expense |  |  | — |  |  |  | — |  |  |  | 7,890 |  |  |  | — |  |  |  | 7,890 |
Other |  |  | — |  |  |  | — |  |  |  | (1,357 | ) |  |  | — |  |  |  | (1,357 | )
Net income attributable to Acadia Healthcare Company, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 61,124 |  |  |  | 61,124 |
Balance at December 31, 2022 |  |  | 89,914 |  |  |  | 899 |  |  |  | 2,658,440 |  |  |  | 153,388 |  |  |  | 2,812,727 |
Common stock issued under stock incentive plans |  |  | 1,039 |  |  |  | 11 |  |  |  | 1,192 |  |  |  | — |  |  |  | 1,203 |
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises |  |  | — |  |  |  | — |  |  |  | (48,874 | ) |  |  | — |  |  |  | (48,874 | )
Equity-based compensation expense |  |  | — |  |  |  | — |  |  |  | 7,629 |  |  |  | — |  |  |  | 7,629 |
Other |  |  | — |  |  |  | — |  |  |  | 902 |  |  |  | — |  |  |  | 902 |
Net income attributable to Acadia Healthcare Company, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 66,015 |  |  |  | 66,015 |
Balance at March 31, 2023 |  |  | 90,953 |  |  | $ | 910 |  |  | $ | 2,619,289 |  |  | $ | 219,403 |  |  | $ | 2,839,602 |

See accompanying notes.

3

Acadia Healthcare Company, Inc.

Condensed Consolidated S tatements of Cash Flows

(Unaudited)

|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | (In thousands) |
Operating activities: |  |  |  |  |  |
Net income |  | $ | 66,558 |  |  | $ | 61,910 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization |  |  | 31,569 |  |  |  | 28,926 |
Amortization of debt issuance costs |  |  | 824 |  |  |  | 808 |
Equity-based compensation expense |  |  | 7,629 |  |  |  | 7,925 |
Deferred income taxes |  |  | 212 |  |  |  | 3,269 |
Other |  |  | 1,089 |  |  |  | (478 | )
Change in operating assets and liabilities, net of effect of acquisitions: |  |  |  |  |  |
Accounts receivable, net |  |  | (23,968 | ) |  |  | (18,222 | )
Other current assets |  |  | (23,430 | ) |  |  | (16,638 | )
Other assets |  |  | (1,436 | ) |  |  | (202 | )
Accounts payable and other accrued liabilities |  |  | 13,633 |  |  |  | 10,501 |
Accrued salaries and benefits |  |  | (30,386 | ) |  |  | 246 |
Other liabilities |  |  | 2,114 |  |  |  | 6,298 |
Government relief funds |  |  | — |  |  |  | (7,556 | )
Net cash provided by operating activities |  |  | 44,408 |  |  |  | 76,787 |
Investing activities: |  |  |  |  |  |
Cash paid for capital expenditures |  |  | (66,525 | ) |  |  | (50,527 | )
Proceeds from sale of property and equipment |  |  | 409 |  |  |  | 1,294 |
Other |  |  | (794 | ) |  |  | (460 | )
Net cash used in investing activities |  |  | (66,910 | ) |  |  | (49,693 | )
Financing activities: |  |  |  |  |  |
Borrowings on revolving credit facility |  |  | 40,000 |  |  |  | — |
Principal payments on revolving credit facility |  |  | — |  |  |  | (10,000 | )
Principal payments on long-term debt |  |  | (5,313 | ) |  |  | (2,656 | )
Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises |  |  | (47,671 | ) |  |  | (11,741 | )
Contributions from noncontrolling partners in joint ventures |  |  | 1,655 |  |  |  | 4,290 |
Distributions to noncontrolling partners in joint ventures |  |  | — |  |  |  | (447 | )
Other |  |  | 11 |  |  |  | 14 |
Net cash used in financing activities |  |  | (11,318 | ) |  |  | (20,540 | )
Net (decrease) increase in cash and cash equivalents |  |  | (33,820 | ) |  |  | 6,554 |
Cash and cash equivalents at beginning of the period |  |  | 97,649 |  |  |  | 133,813 |
Cash and cash equivalents at end of the period |  | $ | 63,829 |  |  | $ | 140,367 |

See accompanying notes.

4

Acadia Healthcare Company, Inc.

Notes to Condensed Consolid ated Financial Statements

March 31, 2023

(Unaudited)

1.
Description of Business and Basis of Presentation

Description of Business

Acadia Healthcare Company, Inc. (the “Company”) develops and operates inpatient psychiatric facilities, residential treatment centers, group homes, substance abuse facilities and facilities providing outpatient behavioral healthcare services to serve the behavioral health and recovery needs of communities throughout the United States (“U.S.”) and Puerto Rico. At March 31, 2023, the Company operated 250 behavioral healthcare facilities with approximately 11,100 beds in 39 states and Puerto Rico.

Basis of Presentation

The business of the Company is conducted through limited liability companies, partnerships and C-corporations. The Company’s consolidated financial statements include the accounts of the Company and all subsidiaries controlled by the Company through its direct or indirect ownership of majority interests and exclusive rights granted to the Company as the controlling member of an entity. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of the Company’s financial position and results of operations have been included. The Company’s fiscal year ends on December 31 and interim results are not necessarily indicative of results for a full year or any other interim period. The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements as of that date. The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Certain reclassifications have been made to the prior year to conform to the current year presentation.

2.
Recently Issued Accounting Standards

In November 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-10, “Government Assistance (Topic 832)” (“ASU 2021-10”). ASU 2021-10 provides guidance to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. ASU 2021-10 applies to all business entities except for not-for-profit entities within the scope of Topic 958, Not-for-Profit Entities, and employee benefit plans within the scope of Topic 960, Plan Accounting—Defined Benefit Pension Plans, Topic 962, Plan Accounting—Defined Contribution Pension Plans, and Topic 965, Plan Accounting—Health and Welfare Benefit Plans that account for a transaction with a government by applying a grant or contribution accounting model by analogy to other accounting guidance (for example, a grant model within IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, or Subtopic 958-605, Not-For-Profit Entities—Revenue Recognition). ASU 2021-10 is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company adopted ASU 2021-10 for the year ended December 31, 2022. See Note 9 – The CARES Act for additional information on the Company’s accounting for government grants received.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting and applies only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2024. Entities may adopt ASU 2020-04 as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The Company adopted ASU 2020-04 for the quarter ended

5

March 31, 2023. See Note 11 – Long Term Debt for additional information on the Company’s accounting for the reference rate reform. There is no significant impact on the Company’s consolidated financial statements.

3.
Revenue

Revenue is primarily derived from services rendered to patients for inpatient psychiatric and substance abuse care, outpatient psychiatric care and residential treatment. The services provided by the Company have no fixed duration and can be terminated by the patient or the facility at any time, and therefore, each treatment is its own stand-alone contract.

Services ordered by a healthcare provider in an episode of care are not separately identifiable and therefore have been combined into a single performance obligation for each contract. The Company recognizes revenue as its performance obligations are completed. The performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits of the healthcare services provided. For inpatient services, the Company recognizes revenue equally over the patient stay on a daily basis. For outpatient services, the Company recognizes revenue equally over the number of treatments provided in a single episode of care. Typically, patients and third-party payors are billed within several days of the service being performed or the patient being discharged, and payments are due based on contract terms.

As the Company’s performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in Accounting Standards Codification (“ASC”) 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as its patients typically are under no obligation to remain admitted in the Company’s facilities.

The Company disaggregates revenue from contracts with customers by service type and by payor.

The Company’s facilities and services provided by the facilities can generally be classified into the following categories: acute inpatient psychiatric facilities; specialty treatment facilities; comprehensive treatment centers (“CTCs”); and residential treatment centers.

Acute inpatient psychiatric facilities. Acute inpatient psychiatric facilities provide a high level of care in order to stabilize patients that are either a threat to themselves or to others. The acute setting provides 24-hour observation, daily intervention and monitoring by psychiatrists.

Specialty treatment facilities. Specialty treatment facilities include residential recovery facilities and eating disorder facilities. The Company provides a comprehensive continuum of care for adults with addictive disorders and co-occurring mental disorders. Inpatient, including detoxification and rehabilitation, partial hospitalization and outpatient treatment programs give patients access to the least restrictive level of care.

Comprehensive treatment centers. CTCs specialize in providing medication-assisted treatment in an outpatient setting to
individuals addicted to opioids such as opioid analgesics (prescription pain medications).

Residential treatment centers. Residential treatment centers treat patients with behavioral disorders in a non-hospital setting, including outdoor programs. The facilities balance therapy activities with social, academic and other activities.

The table below presents total revenue attributed to each category (in thousands):

|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Acute inpatient psychiatric facilities |  | $ | 366,945 |  |  | $ | 310,748 |
Specialty treatment facilities |  |  | 147,303 |  |  |  | 133,602 |
Comprehensive treatment centers |  |  | 115,501 |  |  |  | 100,038 |
Residential treatment centers |  |  | 74,518 |  |  |  | 72,265 |
Revenue |  | $ | 704,267 |  |  | $ | 616,653 |

The Company receives payments from the following sources for services rendered in its 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 (iv) individual patients and clients.

6

The Company determines the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience. Most of the Company’s facilities have contracts containing variable consideration. However, it is unlikely a significant reversal of revenue will occur when the uncertainty is resolved, and therefore, the Company has included the variable consideration in the estimated transaction price. Subsequent changes resulting from a patient’s ability to pay are recorded as bad debt expense, which is included as a component of other operating expenses in the condensed consolidated statements of operations. Bad debt expense for the three months ended March 31, 2023 and 2022 was not significant.

The following table presents the Company’s revenue by payor type and as a percentage of revenue (in thousands):

|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | Amount |  |  | % |  |  | Amount |  |  | % |
Commercial |  | $ | 203,619 |  |  |  | 28.9 | % |  | $ | 195,169 |  |  |  | 31.6 | %
Medicare |  |  | 108,640 |  |  |  | 15.4 | % |  |  | 94,920 |  |  |  | 15.4 | %
Medicaid |  |  | 364,306 |  |  |  | 51.8 | % |  |  | 300,526 |  |  |  | 48.7 | %
Self-Pay |  |  | 20,698 |  |  |  | 2.9 | % |  |  | 19,747 |  |  |  | 3.2 | %
Other |  |  | 7,004 |  |  |  | 1.0 | % |  |  | 6,291 |  |  |  | 1.1 | %
Revenue |  | $ | 704,267 |  |  |  | 100.0 | % |  | $ | 616,653 |  |  |  | 100.0 | %

4. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 (in thousands, except per share amounts):

|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Numerator: |  |  |  |  |  |
Net income attributable to Acadia Healthcare Company, Inc. |  | $ | 66,015 |  |  | $ | 60,837 |
Denominator: |  |  |  |  |  |
Weighted average shares outstanding for basic earnings per share |  |  | 90,101 |  |  |  | 89,258 |
Effects of dilutive instruments |  |  | 1,290 |  |  |  | 1,754 |
Shares used in computing diluted earnings per common share |  |  | 91,391 |  |  |  | 91,012 |
Earnings per share attributable to Acadia Healthcare Company, Inc. stockholders: |  |  |  |  |  |
Basic |  | $ | 0.73 |  |  | $ | 0.68 |
Diluted |  | $ | 0.72 |  |  | $ | 0.67 |

Approximately 0.5 million and 0.7 million shares of common stock issuable upon exercise of outstanding stock option awards were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2023 and 2022, respectively, because their effect would have been anti-dilutive.

5.
Acquisitions

The Company’s strategy is to acquire and develop behavioral healthcare facilities and improve operating results within its facilities and its other behavioral healthcare operations.

On November 7, 2022, the Company acquired four CTCs located in Georgia from Brand New Start Treatment Centers.

7

Transaction-related expenses

Transaction-related expenses represent costs primarily related to legal, accounting, termination, restructuring, management transition, acquisition and other similar costs. Transaction-related expenses comprised the following costs for the three months ended March 31, 2023 and 2022 (in thousands):

| Three Months Ended March 31, |
| 2023 |  |  | 2022 |
Management transition costs | $ | 4,800 |  |  | $ | 1,035 |
Legal, accounting and other acquisition-related costs |  | 1,640 |  |  |  | 589 |
Termination and restructuring costs |  | 31 |  |  |  | 1,958 |
| $ | 6,471 |  |  | $ | 3,582 |

6.
Other Current Assets

Other current assets consisted of the following (in thousands):

|  | March 31, 2023 |  |  | December 31, 2022 |
Income taxes receivable |  | $ | 45,245 |  |  | $ | 5,767 |
Prepaid expenses |  |  | 25,805 |  |  |  | 27,052 |
Other receivables |  |  | 17,787 |  |  |  | 15,371 |
Workers’ compensation deposits – current portion |  |  | 12,000 |  |  |  | 12,000 |
Insurance receivable – current portion |  |  | 10,989 |  |  |  | 10,158 |
Assets held for sale |  |  | 8,347 |  |  |  | 8,347 |
Inventory |  |  | 5,283 |  |  |  | 5,087 |
Other |  |  | 2,098 |  |  |  | 2,255 |
Other current assets |  | $ | 127,554 |  |  | $ | 86,037 |

7.
Property and Equipment

Property and equipment consisted of the following (in thousands):

|  | March 31, 2023 |  |  | December 31, 2022 |
Land |  | $ | 173,822 |  |  | $ | 169,137 |
Building and improvements |  |  | 1,894,356 |  |  |  | 1,797,809 |
Equipment |  |  | 307,181 |  |  |  | 292,200 |
Construction in progress |  |  | 310,167 |  |  |  | 349,473 |
|  |  | 2,685,526 |  |  |  | 2,608,619 |
Less: accumulated depreciation |  |  | (687,489 | ) |  |  | (656,574 | )
Property and equipment, net |  | $ | 1,998,037 |  |  | $ | 1,952,045 |

8

8.
Other Intangible Assets

Other identifiable intangible assets and related accumulated amortization consisted of the following (in thousands):

|  | Gross Carrying Amount |  |  | Accumulated Amortization |
|  | March 31, 2023 |  |  | December 31, 2022 |  |  | March 31, 2023 |  |  | December 31, 2022 |
Intangible assets subject to amortization: |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreements |  | $ | 1,131 |  |  | $ | 1,131 |  |  | $ | (1,131 | ) |  | $ | (1,131 | )
Intangible assets not subject to amortization: |  |  |  |  |  |  |  |  |  |  |  |
Licenses and accreditations |  |  | 11,550 |  |  |  | 11,512 |  |  |  | — |  |  |  | — |
Trade names |  |  | 45,935 |  |  |  | 45,935 |  |  |  | — |  |  |  | — |
Certificates of need |  |  | 18,762 |  |  |  | 18,594 |  |  |  | — |  |  |  | — |
|  |  | 76,247 |  |  |  | 76,041 |  |  |  | — |  |  |  | — |
Total |  | $ | 77,378 |  |  | $ | 77,172 |  |  | $ | (1,131 | ) |  | $ | (1,131 | )

All of the Company’s definite-lived intangible assets are fully amortized. The Company’s licenses and accreditations, trade names and certificates of need have indefinite lives and are, therefore, not subject to amortization.

9.
The CARES Act

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. On April 24, 2020, then President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act (the “PPP Act”). Among other things, the PPP Act allocated $75 billion to eligible healthcare providers to help offset losses and expenses related to the novel coronavirus known as COVID-19 (“COVID-19”). The $75 billion allocated under the PPP Act was in addition to the $100 billion allocated to healthcare providers for the same purposes in the CARES Act and has been disbursed to providers under terms and conditions similar to the CARES Act funds. The Company accounts for government grants by analogizing to the grant model in accordance with International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance, and as such, has recognized income from grants in line with the recognition of expenses or the loss of revenues for which the grants are intended to compensate. The Company recognizes grants once both of the following conditions are met: (i) the Company is able to comply with the relevant terms and conditions of the grant and (ii) the grant will be received.

During 2020, the Company participated in certain relief programs offered through the CARES Act, including receipt of approximately $34.9 million relating to the Public Health and Social Services Emergency Fund (the “PHSSE Fund”), also known as the Provider Relief Fund. During the fourth quarter of 2020, the Company recorded approximately $32.8 million of income from provider relief fund related to PHSSE Fund funds received in 2020.

9

In 2021, the Company received $24.2 million of additional funds from the PHSSE Fund. During the fourth quarter of 2021, the Company recorded $17.9 million of income from provider relief fund related to the PHSSE Fund funds received. During the year ended December 31, 2022, the Company received $7.7 million of additional funds from the PHSSE Fund and $14.2 million from the American Rescue Plan (“ARP”) Rural Payments for Hospitals. During the year ended December 31, 2022, the Company recorded $21.5 million of income from provider relief fund related to PHSSE Fund and ARP funds received. The remaining unrecognized funds of $9.0 million are included in other accrued liabilities on the consolidated balance sheets at March 31, 2023 and December 31, 2022. The Company continues to evaluate its compliance with the terms and conditions to, and the financial impact of, the additional funds
received, including potential repayment of the remaining balance.

Healthcare providers were required to sign an attestation confirming receipt of the PHSSE Fund funds and agree to the terms and conditions of payment. Under the terms and conditions for receipt of the payment, the Company was allowed to use the funds to cover lost revenues and healthcare costs related to COVID-19, and the Company was required to properly and fully document the use of these funds to the U.S. Department of Health and Human Services. The reporting of the funds is subject to future audit for compliance with the terms and conditions. The Company recognized PHSSE Fund funds to the extent it had qualifying COVID-19 expenses or lost revenues as permitted under the terms and conditions.

During 2020, the Company applied for and received approximately $45.2 million of payments from the CMS Accelerated and Advance Payment Program. Of the $45.2 million of advance payments received in 2020, the Company repaid approximately $25.1 million of advance payments during 2021 and made additional repayments of approximately $20.1 million during the year ended December 31, 2022.

In addition, the Company received a 2% increase in facilities’ Medicare reimbursement rate as a result of the temporary suspension of Medicare sequestration from May 1, 2020 to March 31, 2022, which was reduced to 1% on April 1, 2022 and was eliminated effective July 1, 2022.

The CARES Act also provides for certain federal income and other tax changes. The Company received a cash benefit of approximately $39.3 million for 2020 relating to the delay of payment of the employer portion of Social Security payroll taxes. The Company repaid half of the $39.3 million of payroll tax deferrals during the third quarter of 2021 and repaid the remaining portion in the third quarter of 2022 to eliminate the liability.

These regulatory changes are
temporary, with most slated to expire at the end of the COVID-19 public health emergency, expected in May 2023.

The Company is continuing to evaluate the terms and conditions and financial impact of funds received under the CARES Act and other government relief programs.

10.
Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

|  | March 31, 2023 |  |  | December 31, 2022 |
Accrued expenses |  | $ | 20,976 |  |  | $ | 26,699 |
Cost report payable |  |  | 18,818 |  |  |  | 13,738 |
Accrued interest |  |  | 17,411 |  |  |  | 17,596 |
Insurance liability – current portion |  |  | 12,128 |  |  |  | 12,128 |
Government relief funds |  |  | 8,975 |  |  |  | 8,975 |
Accrued property taxes |  |  | 8,404 |  |  |  | 9,009 |
Contract liabilities |  |  | 5,097 |  |  |  | 6,653 |
Finance lease liabilities |  |  | 990 |  |  |  | 990 |
Income taxes payable |  |  | 45 |  |  |  | 1,338 |
Other |  |  | 16,979 |  |  |  | 13,466 |
Other accrued liabilities |  | $ | 109,823 |  |  | $ | 110,592 |

10

11.
Long-Term Debt

Long-term debt consisted of the following (in thousands):

|  | March 31, 2023 |  |  | December 31, 2022 |
Credit Facility: |  |  |  |  |  |
Term Loan A |  | $ | 393,125 |  |  | $ | 398,438 |
Revolving Line of Credit |  |  | 115,000 |  |  |  | 75,000 |
5.500% Senior Notes due 2028 |  |  | 450,000 |  |  |  | 450,000 |
5.000% Senior Notes due 2029 |  |  | 475,000 |  |  |  | 475,000 |
Less: unamortized debt issuance costs, discount and premium |  |  | (12,097 | ) |  |  | (12,647 | )
|  |  | 1,421,028 |  |  |  | 1,385,791 |
Less: current portion |  |  | (21,250 | ) |  |  | (21,250 | )
Long-term debt |  | $ | 1,399,778 |  |  | $ | 1,364,541 |

Credit Facility

The Company entered into a credit agreement establishing a new senior credit facility (the “Credit Facility”) on March 17, 2021. The Credit Facility provides for a $600.0 million senior secured revolving credit facility (the “Revolving Facility”) and a $425.0 million senior secured term loan facility (the “Term Loan Facility” and, together with the Revolving Facility, the “Senior Facilities”), with each maturing on March 17, 2026. The Revolving Facility further provides for (i) up to $20.0 million, which may be utilized for the issuance of letters of credit and (ii) the availability of a swingline facility under which the Company may borrow up to $20.0 million.

On March 30, 2023, the Company entered into the First Amendment to the Credit Facility (the “First Amendment”). The First Amendment replaced LIBOR with the Secured Overnight Financing Rate as determined for a term of, at the Company’s option, one, three or six months, plus an adjustment of 0.10% (“Adjusted Term SOFR”). Borrowings under the Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate of Bank of America or (iii) Adjusted Term SOFR for a one month interest period or (b) Adjusted Term SOFR, in each case plus an applicable margin that varies according to the total leverage ratio of the Company from 0.375% to 1.250% in the case of base rate loans and from 1.375% to 2.250% in the case of Adjusted Term SOFR loans. In addition, an unused fee that varies according to the total leverage ratio of the Company 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. There is no significant impact on the Company’s consolidated financial statements as a result of the First Amendment.

During the three months ended March 31, 2023, the Company borrowed $40.0 million on the Revolving Facility. The Company had $481.6 million of availability under the Revolving Facility and had standby letters of credit outstanding of $3.4 million related to security for the payment of claims required by its workers’ compensation insurance program at March 31, 2023.

The Credit Facility requires quarterly term loan principal repayments for the Term Loan Facility of approximately $5.3 million for June 30, 2023 to March 31, 2024, approximately $8.0 million for June 30, 2024 to March 31, 2025, and approximately $10.6 million for June 30, 2025 to December 31, 2025, with the remaining principal balance of the Term Loan Facility due on the maturity date of March 17, 2026.

The Company has the ability to increase the amount of the Senior Facilities, 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. 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) of the Company and (ii) additional amounts that would not cause the Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Facility) to exceed 3.5 to 1.0.

Subject to certain exceptions, substantially all of the Company’s existing and subsequently acquired or organized direct or indirect wholly-owned U.S. subsidiaries are required to guarantee the repayment of the Company’s obligations under the Credit Facility. The Company and such guarantor subsidiaries have
granted a security interest on substantially all personal property assets as collateral for the obligations under the Credit Facility

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The Credit Facility contains customary representations and affirmative and negative covenants, including limitations on the Company’s and its 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. In addition, the Credit Facility contains financial covenants requiring the Company 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 5.0 to 1.0 and an interest coverage ratio of at least 3.0 to 1.0. The Credit Facility also includes events of default customary for facilities of this type and upon the occurrence of any such event of default, among other things, all outstanding loans under the Senior Facilities may be accelerated, the lenders’ commitments may be terminated, and/or the lenders may exercise collateral remedies. At March 31, 2023, the Company was in compliance with all financial covenants.

Senior Notes

5.500% Senior Notes due 2028

On June 24, 2020, the Company issued $450.0 million of the 5.500% Senior Notes due 2028 (the “5.500% 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.

5.000% Senior Notes due 2029

On October 14, 2020, the Company issued $475.0 million of 5.000% Senior Notes due 2029 (the “5.000% Senior Notes”). 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 indentures governing the 5.500% Senior Notes and the 5.000% Senior Notes (together, the “Senior Notes”) contain covenants that, among other things, limit the Company’s ability and the ability of its 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 the Company's assets; and (vii) create liens on assets.

The Senior Notes issued by the Company are guaranteed by each of the Company’s subsidiaries that guarantee the Company’s obligations under the Credit Facility. The guarantees are full and unconditional and joint and several.

The Company may redeem the Senior Notes at its option, in whole or part, at the dates and amounts set forth in the indentures.

12.
Noncontrolling Interests

Noncontrolling interests in the consolidated financial statements represents the portion of equity held by noncontrolling partners in the Company’s non-wholly owned subsidiaries. At March 31, 2023, the Company operated eight facilities through non-wholly owned subsidiaries. The Company owns between approximately 65% and 86% of the equity interests of these entities, and noncontrolling partners own the remaining equity interests. The initial value of the noncontrolling interests is based on the fair value of contributions. The Company consolidates the operations of each facility based on its status as primary beneficiary, as further discussed in Note 13 – Variable Interest Entities. The noncontrolling interests are reflected as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets based on put rights that could require the Company to purchase the noncontrolling interests upon the occurrence of a change in control.

The components of redeemable noncontrolling interests are as follows (in thousands):

Balance at December 31, 2022 |  | $ | 88,257 |
Contributions from noncontrolling partners in joint ventures |  |  | 1,655 |
Net income attributable to noncontrolling interests |  |  | 543 |
Balance at March 31, 2023 |  | $ | 90,455 |

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13.
Variable Interest Entities

For legal entities where the Company has a financial relationship, the Company evaluates whether it has a variable interest and determines if the entity is considered a variable interest entity (“VIE”). If the Company concludes an entity is a VIE and the Company is the primary beneficiary, the entity is consolidated. The primary beneficiary analysis is a qualitative analysis based on power and benefits. A reporting entity has a controlling financial interest in a VIE and must consolidate the VIE if it has both power and benefits. It must have the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE.

At March 31, 2023, the Company operated eight facilities through non-wholly owned subsidiaries. The Company owns between approximately 65% and 86% of the equity interests of these entities, and noncontrolling partners own the remaining equity interests. The Company manages each of these facilities, is responsible for the day-to-day operations and, therefore, has the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These activities include, but are not limited to, behavioral healthcare services, human resource and employment-related decisions, marketing and finance. The terms of the agreements governing each of the Company’s VIEs prohibit the Company from using the assets of each VIE to satisfy the obligations of other entities. Consolidated assets at March 31, 2023 and December 31, 2022 include total assets of variable interest entities of $461.5 million and $434.2 million, respectively, which cannot be used to settle the obligations of other entities. Consolidated liabilities at March 31, 2023 and December 31, 2022 include total liabilities of variable interest entities of $25.3 million and $24.4 million, respectively.

The consolidated VIEs assets and liabilities in the Company’s condensed consolidated balance sheets are shown below (in thousands):

|  | March 31, 2023 |  |  | December 31, 2022 |
Cash and cash equivalents |  | $ | 38,648 |  |  | $ | 32,478 |
Accounts receivable, net |  |  | 26,576 |  |  |  | 23,789 |
Other current assets |  |  | 2,526 |  |  |  | 2,561 |
Total current assets |  |  | 67,750 |  |  |  | 58,828 |
Property and equipment, net |  |  | 331,819 |  |  |  | 313,358 |
Goodwill |  |  | 39,564 |  |  |  | 39,564 |
Intangible assets, net |  |  | 16,139 |  |  |  | 16,139 |
Operating lease right-of-use assets |  |  | 6,201 |  |  |  | 6,284 |
Total assets |  | $ | 461,473 |  |  | $ | 434,173 |
Accounts payable |  | $ | 5,442 |  |  | $ | 4,650 |
Accrued salaries and benefits |  |  | 4,535 |  |  |  | 6,866 |
Current portion of operating lease liabilities |  |  | 243 |  |  |  | 233 |
Other accrued liabilities |  |  | 8,676 |  |  |  | 6,179 |
Total current liabilities |  |  | 18,896 |  |  |  | 17,928 |
Operating lease liabilities |  |  | 6,371 |  |  |  | 6,433 |
Total liabilities |  | $ | 25,267 |  |  | $ | 24,361 |

14.
Equity-Based Compensation

Equity Incentive Plans

The Company issues stock-based awards, including stock options, restricted stock and restricted stock units, to certain officers, employees and non-employee directors under the Acadia Healthcare Company, Inc. Incentive Compensation Plan (the “Equity Incentive Plan”). At March 31, 2023, a maximum of 12,700,000 shares of the Company’s common stock were authorized for issuance as stock options, restricted stock and restricted stock units or other share-based compensation under the Equity Incentive Plan, of which 2,885,024 were available for future grant. Stock options may be granted for terms of up to ten years. The Company recognizes expense on all share-based awards on a straight-line basis over the requisite service period of the entire award. Grants to employees generally vest in annual increments of 25% each year, commencing one year after the date of grant. The exercise prices of stock

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options are equal to the most recent closing price of the Company’s common stock on the most recent trading date prior to the date of grant.

The Company recognized $7.6 million and $7.9 million in equity-based compensation expense for the three months ended March 31, 2023 and 2022, respectively. Stock compensation expense for the three months ended March 31, 2023 and 2022 is impacted by forfeiture adjustments and restricted stock unit adjustments based on actual performance compared to vesting targets. At March 31, 2023, there was $78.1 million of unrecognized compensation expense related to unvested options, restricted stock and restricted stock units, which is expected to be recognized over the remaining weighted average vesting period of 1.5 years.

The Company recognized a deferred income tax benefit of $2.1 million and $2.0 million for the three months ended March 31, 2023 and 2022, respectively, related to equity-based compensation expense.

Stock Options

Stock option activity during 2022 and 2023 was as follows:

|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value (in thousands) |
Options outstanding at January 1, 2022 |  |  | 1,106,069 |  |  | $ | 42.07 |  |  |  |  |  |  |
Options granted |  |  | 334,260 |  |  |  | 55.73 |  |  |  |  |  |  |
Options exercised |  |  | (285,577 | ) |  |  | 40.66 |  |  |  |  |  |  |
Options cancelled |  |  | (175,475 | ) |  |  | 46.98 |  |  |  |  |  |  |
Options outstanding at December 31, 2022 |  |  | 979,277 |  |  |  | 46.27 |  |  |  |  |  |  |
Options granted |  |  | 226,940 |  |  |  | 80.40 |  |  |  |  |  |  |
Options exercised |  |  | (32,491 | ) |  |  | 37.01 |  |  |  |  |  |  |
Options cancelled |  |  | (19,945 | ) |  |  | 50.32 |  |  |  |  |  |  |
Options outstanding at March 31, 2023 |  |  | 1,153,781 |  |  | $ | 53.17 |  |  |  | 7.71 |  |  | $ | 24,007 |
Options exercisable at March 31, 2023 |  |  | 507,616 |  |  | $ | 42.08 |  |  |  | 6.27 |  |  | $ | 15,315 |

Fair values are estimated using the Black-Scholes option pricing model. The following table summarizes the grant-date fair value of options and the assumptions used to develop the fair value estimates for options granted during the three months ended March 31, 2023 and year ended December 31, 2022:

|  | March 31, 2023 |  |  | December 31, 2022 |
Weighted average grant-date fair value of options |  | $ | 31.80 |  |  | $ | 20.72 |
Risk-free interest rate |  |  | 4.2 | % |  |  | 2.0 | %
Expected volatility |  |  | 37 | % |  |  | 39 | %
Expected life (in years) |  |  | 5.0 |  |  |  | 5.0 |

The Company’s estimate of expected volatility for stock options is based upon the volatility of its stock price over the expected life of the award. The risk-free interest rate is the approximate yield on U.S. Treasury Strips having a life equal to the expected option life on the date of grant. The expected life is an estimate of the number of years an option will be held before it is exercised.

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Other Stock-Based Awards

Restricted stock activity during 2022 and 2023 was as follows:

|  | Number of Shares |  |  | Weighted Average Grant-Date Fair Value |
Unvested at January 1, 2022 |  |  | 926,627 |  |  | $ | 37.84 |
Granted |  |  | 650,396 |  |  |  | 64.65 |
Cancelled |  |  | (145,205 | ) |  |  | 49.03 |
Vested |  |  | (386,616 | ) |  |  | 32.64 |
Unvested at December 31, 2022 |  |  | 1,045,202 |  |  | $ | 54.89 |
Granted |  |  | 275,280 |  |  |  | 79.25 |
Cancelled |  |  | (29,456 | ) |  |  | 59.21 |
Vested |  |  | (218,330 | ) |  |  | 41.11 |
Unvested at March 31, 2023 |  |  | 1,072,696 |  |  | $ | 63.83 |

Restricted stock unit activity during 2022 and 2023 was as follows:

|  | Number of Units |  |  | Weighted Average Grant-Date Fair Value |
Unvested at January 1, 2022 |  |  | 1,504,420 |  |  | $ | 23.20 |
Granted |  |  | 105,311 |  |  |  | 73.96 |
Performance adjustment |  |  | 182,543 |  |  |  | 33.05 |
Cancelled |  |  | — |  |  |  | — |
Vested |  |  | (518,474 | ) |  |  | 43.16 |
Unvested at December 31, 2022 |  |  | 1,273,800 |  |  | $ | 20.69 |
Granted |  |  | — |  |  |  | — |
Performance adjustment |  |  | 355,010 |  |  |  | 11.21 |
Cancelled |  |  | — |  |  |  | — |
Vested |  |  | (1,408,195 | ) |  |  | 10.60 |
Unvested at March 31, 2023 |  |  | 220,615 |  |  | $ | 68.11 |

Restricted stock awards are time-based vesting awards that vest over a period of three or four years and are subject to continuing service of the employee or non-employee director over the ratable vesting periods. The fair values of the restricted stock awards were determined based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date.

Restricted stock units are granted to employees and are subject to Company performance compared to pre-established targets. In addition to Company performance, these performance-based restricted stock units are subject to the continuing service of the employee during the three-year period covered by the awards. The performance condition for the restricted stock units is based on the Company’s achievement of annually established targets for diluted earnings per share. The number of shares issuable at the end of the applicable vesting period of restricted stock units ranges from 0% to 200% of the targeted units based on the Company’s actual performance compared to the targets.

The fair values of restricted stock units were determined based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date for units subject to performance conditions.

15.
Income Taxes

The provision for income taxes for the three months ended March 31, 2023 and 2022 reflects effective tax rates of 22.3% and 21.9%, respectively.

As the Company continues to monitor the implications of potential tax legislation in each of its jurisdictions, the Company may adjust estimates and record additional amounts for tax assets and liabilities. Any adjustments to the Company’s tax assets and liabilities could materially impact the provision for income taxes and its effective tax rate in the periods in which they are made.

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16.
Fair Value Measurements

The carrying amounts reported for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value because of the short-term maturity of these instruments.

The carrying amounts and fair values of the Credit Facility, 5.500% Senior Notes and 5.000% Senior Notes at March 31, 2023 and December 31, 2022 were as follows (in thousands):

|  | Carrying Amount |  |  | Fair Value |
|  | March 31, 2023 |  |  | December 31, 2022 |  |  | March 31, 2023 |  |  | December 31, 2022 |
Credit Facility |  | $ | 506,336 |  |  | $ | 471,489 |  |  | $ | 506,336 |  |  | $ | 471,489 |
5.500% Senior Notes due 2028 |  | $ | 444,902 |  |  | $ | 444,694 |  |  | $ | 418,208 |  |  | $ | 422,459 |
5.000% Senior Notes due 2029 |  | $ | 469,790 |  |  | $ | 469,609 |  |  | $ | 453,347 |  |  | $ | 433,214 |

The Credit Facility, 5.500% Senior Notes and 5.000% Senior Notes were categorized as Level 2 in the GAAP fair value hierarchy. Fair values were based on trading activity among the Company’s lenders and the average bid and ask price as determined using published rates.

17.
Commitments and Contingencies

Professional and General Liability

A portion of the Company’s professional liability risks are insured through a wholly-owned insurance subsidiary providing coverage for up to $10.0 million per claim through August 31, 2022 and $5.0 million and $10.0 million for certain other claims thereafter. The Company has obtained reinsurance coverage from a third party to cover claims in excess of those retention limits. The reinsurance policy has a coverage limit of $75.0 million or $70.0 million for certain other claims in the aggregate. The Company’s reinsurance receivables are recognized consistent with the related liabilities and include known claims and any incurred but not reported claims that are covered by current insurance policies in place.

Legal Proceedings

The Company is, from time to time, subject to various claims, lawsuits, governmental investigations and regulatory actions, including claims for damages for personal injuries, medical malpractice, overpayments, breach of contract, securities law violations, tort and employment related claims. In these actions, plaintiffs request a variety of damages, including, in some instances, punitive and other types of damages that may not be covered by insurance. In addition, healthcare companies are subject to numerous investigations by various governmental agencies. Certain of the Company’s individual facilities have received, and from time to time, other facilities may receive, subpoenas, civil investigative demands, audit requests and other inquiries from, and may be subject to investigation by, federal and state agencies. These investigations can result in repayment obligations, and violations of the False Claims Act can result in substantial monetary penalties and fines, the imposition of a corporate integrity agreement and exclusion from participation in governmental health programs. In addition, the federal False Claims Act permits private parties to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions.

On April 1, 2019, a consolidated complaint was filed against the Company and certain former and current officers in the lawsuit styled St. Clair County Employees’ Retirement System v. Acadia Healthcare Company, Inc., et al., Case No. 3:19-cv-00988, which is pending in the United States District Court for the Middle District of Tennessee. The complaint purports to be brought on behalf of a class consisting of all persons (other than defendants) who purchased securities of the Company between April 30, 2014 and November 15, 2018, and alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. On September 30, 2022, the court entered an order certifying a class consisting of all persons who purchased or otherwise acquired the common stock of the Company between April 30, 2014 and November 15, 2018. At this time, the Company is not able to quantify any potential liability in connection with this litigation because the case is in its early stages.

On February 21, 2019, a purported stockholder filed a related derivative action on behalf of the Company against certain former and current officers and directors in the lawsuit styled Davydov v. Joey A. Jacobs, et al., Case No. 3:19-cv-00167, which is pending in the United States District Court for the Middle District of Tennessee. The complaint alleges claims for violations of Section 10(b) and 14(a) of the Exchange Act, breach of fiduciary duty, waste of corporate assets, and unjust enrichment. On May 23, 2019, a purported stockholder filed a second related derivative action on behalf of the Company against certain former and current officers and directors in the lawsuit styled Beard v. Jacobs, et al., Case No. 3:19-cv-0441, which is pending the United States District Court for the Middle District of Tennessee. The complaint alleges claims for violations of Sections 10(b), 14(a), and 21D of the Exchange Act, breach of

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fiduciary duty, waste of corporate assets, unjust enrichment, and insider selling. On June 11, 2019, the Davydov and Beard actions were consolidated. On February 22, 2021, the court entered an order staying the case. On October 23, 2020, a purported stockholder filed a third related derivative action on behalf of the Company against former and current officers and directors in the lawsuit styled Pfenning v. Jacobs, et al., Case No. 2020-0915-JRS, which is pending in the Court of Chancery of the State of Delaware. The complaint alleges claims for breach of fiduciary duty. On February 17, 2021, the court entered an order staying the case. On February 24, 2021, a purported stockholder filed a fourth derivative action on behalf of the Company against former and current officers and directors in the lawsuit styled Solak v. Jacobs, et al., Case No. 2021-0163, which is pending in the Court of Chancery of the State of Delaware. The complaint alleges claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and insider selling. At this time, the Company is not able to quantify any potential liability in connection with this litigation because the cases are in their early stages.

In the fall of 2017, the Office of Inspector General (“OIG”) issued subpoenas to three of the Company’s facilities requesting certain documents from January 2013 to the date of the subpoenas. The U.S. Attorney’s Office for the Middle District of Florida issued a civil investigative demand to one of the Company’s facilities in December 2017 requesting certain documents from November 2012 to the date of the demand. In April 2019, the OIG issued subpoenas relating to six additional facilities requesting certain documents and information from January 2013 to the date of the subpoenas. The government’s investigation of each of these facilities is focused on claims not eligible for payment because of alleged violations of certain regulatory requirements relating to, among other things, medical necessity, admission eligibility, discharge decisions, length of stay and patient care issues. The Company is cooperating with the government’s investigation but is not able to quantify any potential liability in connection with these investigations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that address future results or occurrences. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “would,” “should,” “could” or the negative thereof. Generally, the words “anticipate,” “believe,” “continue,” “expect,” “intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, which could cause our actual results, performance or achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to:

•
the impact of competition for staffing, labor shortages and higher turnover rates on our labor costs and profitability;
•
the impact of increases in inflation and rising interest rates;
•
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, including increased construction and other costs due to inflation, on our business and future results of operations;
•
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 impact of governmental investigations, regulatory actions and whistleblower lawsuits;
•
any failure to comply with the terms of our corporate integrity agreement with the OIG;
•
the impact of healthcare reform in the U.S.;
•
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 impact of disruptions on our inpatient and outpatient volumes caused by pandemics, epidemics or outbreaks of
infectious diseases, such as the COVID-19 pandemic;
•
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;

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•
the risk of a cyber-security incident and any resulting adverse impact on our operations or violation of laws and regulations regarding information privacy;
•
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 recent tax legislation, including provisions of the CARES Act and additional guidance 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.

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 Quarterly Report on Form 10-Q. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments.

Overview

Our business strategy is to acquire and develop behavioral healthcare facilities and improve our operating results within our facilities and our other behavioral healthcare operations. We strive to improve the operating results of our facilities by providing high-quality services, expanding referral networks and marketing initiatives while meeting the increased demand for behavioral healthcare services through expansion of our current locations as well as developing new services within existing locations. At March 31, 2023, we operated 250 behavioral healthcare facilities with approximately 11,100 beds in 39 states and Puerto Rico. During the three months ended March 31, 2023, we added 106 beds to existing facilities. For the year ending December 31, 2023, we expect to add approximately 300 beds through additions to existing facilities, and we expect to open two wholly-owned facilities, two joint venture facilities and at least six CTCs.

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 expects to take advantage of several strategies that are more accessible as a result of our increased size and geographic scale, including continuing a national marketing strategy to attract new patients and referral sources, increasing our volume of out-of-state referrals, providing a broader range of services to new and existing patients and clients and selectively pursuing opportunities to expand our facility and bed count in the U.S. through acquisitions, wholly-owned de novo facilities, joint ventures and bed additions in existing facilities.

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COVID-19

During March 2020, the global pandemic of COVID-19 began to affect our facilities, employees, patients, communities, business operations and financial performance, as well as the broader U.S. economy and financial market. At many of our facilities, employees and/or patients have tested positive for COVID-19. We are committed to protecting the health of our communities and have been responding to the evolving COVID-19 situation while taking steps to provide quality care and protect the health and safety of our patients and employees. Over the last three years, all of our facilities have closely followed infectious disease protocols, as well as recommendations by the Centers for Disease Control and Prevention and local health officials.

CARES Act and Other Regulatory Developments

On March 27, 2020, the CARES Act was signed into law. The CARES Act is intended to provide over $2 trillion in stimulus benefits for the U.S. economy. Among other things, the CARES Act includes additional support for small businesses, expands unemployment benefits, makes forgivable loans available to small businesses, provides for certain federal income tax changes, and provides $500 billion for loans, loan guarantees, and other investments for or in U.S. businesses.

In addition, the CARES Act contains a number of provisions that are intended to assist healthcare providers as they combat the effects of the COVID-19 pandemic. Those provisions include, among others:

•
an appropriation to the PHSSE Fund, also known as the Provider Relief Fund, to reimburse, through grants or other mechanisms, eligible healthcare providers and other approved entities for COVID-19-related expenses or lost revenue;
•
the expansion of CMS’ Accelerated and Advance Payment Program;
•
the temporary suspension of Medicare sequestration from May 1, 2020 to March 31, 2022, which was reduced to 1% on
April 1, 2022 and was eliminated effective July 1, 2022; and
•
waivers or temporary suspension of certain regulatory requirements.

The U.S. government initially announced it would offer $100 billion of relief to eligible healthcare providers through the PHSSE Fund. On April 24, 2020, then President Trump signed into law the PPP Act. Among other things, the PPP Act allocated $75 billion to eligible healthcare providers to help offset COVID-19 related losses and expenses. The $75 billion allocated under the PPP Act was in addition to the $100 billion allocated to healthcare providers for the same purposes in the CARES Act and has been disbursed to providers under terms and conditions similar to the CARES Act funds. In 2020, we received approximately $34.9 million of the funds distributed from the PHSSE Fund. During the fourth quarter of 2020, we recorded approximately $32.8 million of income from provider relief fund related to PHSSE Fund funds received in 2020.

In 2021, we received $24.2 million of additional funds from the PHSSE Fund. During the fourth quarter of 2021, we recorded $17.9 million of income from provider relief fund related to the PHSSE Fund funds received. During the year ended December 31, 2022, we received $7.7 million of additional funds from the PHSSE Fund and $14.2 million from the ARP Rural Payments for Hospitals. During the year ended December 31, 2022, we recorded $21.5 million of income from provider relief fund related to PHSSE Fund and ARP funds received. The remaining ARP funds of $9.0 million are included in other accrued liabilities on the consolidated balance sheet as of March 31, 2023. We continue to evaluate our compliance with the terms and conditions to, and the financial impact of, these additional funds received, including potential repayment of the remaining balance.

Healthcare providers were required to sign an attestation confirming receipt of the PHSSE Fund funds and agree to the terms and conditions of payment. 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 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. The reporting of the funds is subject to future audit for compliance with the terms and conditions. We recognized PHSSE Fund funds to the extent we had qualifying COVID-19 expenses or lost revenues as permitted under the terms and conditions.

During 2020, we applied for and received approximately $45.2 million of payments from the CMS Accelerated and Advance Payment Program. Of the $45.2 million of advance payments received in 2020, we repaid approximately $25.1 million of advance payments during 2021 and made additional repayments of approximately $20.1 million during the year ended December 31, 2022 to eliminate the liability.

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Under the CARES Act, we received a 2% increase in our facilities’ Medicare reimbursement rate as a result of the temporary suspension of Medicare sequestration from May 1, 2020 to March 31, 2022, which was reduced to 1% on April 1, 2022 and was eliminated effective July 1, 2022.

The CARES Act also provides for certain federal income and other tax changes. We received a cash benefit of approximately $39.3 million for 2020 relating to the delay of payment of the employer portion of Social Security payroll taxes. We repaid half of the $39.3 million of payroll tax deferrals during the third quarter of 2021 and repaid the remaining portion in the third quarter of 2022 to eliminate the liability.

These regulatory changes are
temporary, with most slated to expire at the end of the COVID-19 public health emergency, expected in May 2023.

We are continuing to evaluate the terms and conditions and financial impact of funds received under the CARES Act and other government relief programs.

Results of Operations

The following table illustrates our consolidated results of operations for the respective periods shown (dollars in thousands):

|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | Amount |  |  | % |  |  | Amount |  |  | % |
Revenue |  | $ | 704,267 |  |  |  | 100.0 | % |  | $ | 616,653 |  |  |  | 100.0 | %
Salaries, wages and benefits |  |  | 391,177 |  |  |  | 55.6 | % |  |  | 335,762 |  |  |  | 54.4 | %
Professional fees |  |  | 41,125 |  |  |  | 5.8 | % |  |  | 36,911 |  |  |  | 6.0 | %
Supplies |  |  | 26,021 |  |  |  | 3.7 | % |  |  | 23,699 |  |  |  | 3.8 | %
Rents and leases |  |  | 11,424 |  |  |  | 1.6 | % |  |  | 11,249 |  |  |  | 1.8 | %
Other operating expenses |  |  | 90,838 |  |  |  | 12.9 | % |  |  | 81,425 |  |  |  | 13.2 | %
Depreciation and amortization |  |  | 31,569 |  |  |  | 4.5 | % |  |  | 28,926 |  |  |  | 4.7 | %
Interest expense |  |  | 19,999 |  |  |  | 2.8 | % |  |  | 15,787 |  |  |  | 2.6 | %
Transaction-related expenses |  |  | 6,471 |  |  |  | 0.9 | % |  |  | 3,582 |  |  |  | 0.6 | %
Total expenses |  |  | 618,624 |  |  |  | 87.8 | % |  |  | 537,341 |  |  |  | 87.1 | %
Income before income taxes |  |  | 85,643 |  |  |  | 12.2 | % |  |  | 79,312 |  |  |  | 12.9 | %
Provision for income taxes |  |  | 19,085 |  |  |  | 2.7 | % |  |  | 17,402 |  |  |  | 2.8 | %
Net income |  |  | 66,558 |  |  |  | 9.5 | % |  |  | 61,910 |  |  |  | 10.1 | %
Net income attributable to noncontrolling interests |  |  | (543 | ) |  |  | -0.1 | % |  |  | (1,073 | ) |  |  | -0.2 | %
Net income attributable to Acadia Healthcare Company, Inc. |  | $ | 66,015 |  |  |  | 9.4 | % |  | $ | 60,837 |  |  |  | 9.9 | %

We are encouraged by the favorable trends in our business and believe we are well positioned to capitalize on the expected growth in demand for behavioral health services. As with many other healthcare providers and other industries across the country, we are currently dealing with a tight labor market. While we experienced higher wage inflation in the three months ended March 31, 2023 compared to long-term historical averages, we have seen stability in our labor costs and our proactive focus helps us manage through this environment. We remain focused on ensuring that we have the level of staff to meet the demand in our markets across our 39 states and Puerto Rico.

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The following table sets forth percent changes in same facility operating data for the three months ended March 31, 2023 compared to the same period in 2022:

|  | Three Months Ended
U.S. Same Facility Results (a) |  |
Revenue growth |  | 13.3%
Patient days growth |  | 6.5%
Admissions growth |  | 8.6%
Average length of stay change (b) |  | -1.9%
Revenue per patient day growth |  | 6.4%
Adjusted EBITDA margin change (c) |  | 90 bps

(a)
Results for the periods presented include facilities we have operated more than one year and exclude certain closed services.
(b)
Average length of stay is defined as patient days divided by admissions.
(c)
Adjusted EBITDA is defined as income before provision for income taxes, equity-based compensation expense, transaction-related expenses, interest expense and depreciation and amortization. Management uses Adjusted EBITDA as an analytical indicator to measure performance and to develop strategic objectives and operating plans. Adjusted EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Adjusted EBITDA should not be considered as a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

Three months ended March 31, 2023 compared to the three months ended March 31, 2022

Revenue. Revenue increased $87.6 million, or 14.2%, to $704.3 million for the three months ended March 31, 2023 from $616.7 million for the three months ended March 31, 2022. Same facility revenue increased $81.7 million, or 13.3%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, resulting from an increase in same facility revenue per day of 6.4%, same facility growth in admissions of 8.6% and same facility growth in patient days of 6.5%. Consistent with same facility revenue growth in 2022, the growth in same facility patient days for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 resulted from the addition of beds to our existing facilities and ongoing demand for our services.

Salaries, wages and benefits. Salaries, wages and benefits (“SWB”) expense was $391.2 million for the three months ended March 31, 2023 compared to $335.8 million for the three months ended March 31, 2022, an increase of $55.4 million. SWB expense included $7.6 million and $7.9 million of equity-based compensation expense for the three months ended March 31, 2023 and 2022, respectively. Excluding equity-based compensation expense, SWB expense was $383.6 million, or 54.5% of revenue, for the three months ended March 31, 2023, compared to $327.9 million, or 53.2% of revenue, for the three months ended March 31, 2022. The increase in SWB expense relates to incremental staff to support volume growth as well as wage inflation. Same facility SWB expense was $345.9 million for the three months ended March 31, 2023, or 49.8% of revenue, compared to $303.3 million for the three months ended March 31, 2022, or 49.4% of revenue.

Professional fees. Professional fees were $41.1 million for the three months ended March 31, 2023, or 5.8% of revenue, compared to $36.9 million for the three months ended March 31, 2022, or 6.0% of revenue. Same facility professional fees were $36.2 million for the three months ended March 31, 2023, or 5.2% of revenue, compared to $33.9 million for the three months ended March 31, 2022, or 5.5% of revenue.

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Supplies. Supplies expense was $26.0 million for the three months ended March 31, 2023, or 3.7% of revenue, compared to $23.7 million for the three months ended March 31, 2022, or 3.8% of revenue. Same facility supplies expense was $25.6 million for the three months ended March 31, 2023, or 3.7% of revenue, compared to $23.5 million for the three months ended March 31, 2022, or 3.8% of revenue.

Rents and leases. Rents and leases were $11.4 million for the three months ended March 31, 2023, or 1.6% of revenue, compared to $11.2 million for the three months ended March 31, 2022, or 1.8% of revenue. Same facility rents and leases were $10.6 million for the three months ended March 31, 2023, or 1.5% of revenue, compared to $10.5 million for the three months ended March 31, 2022, or 1.7% of revenue.

Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, travel and repairs and maintenance expenses. Other operating expenses were $90.8 million for the three months ended March 31, 2023, or 12.9% of revenue, compared to $81.4 million for the three months ended March 31, 2022, or 13.2% of revenue. Same facility other operating expenses were $84.6 million for the three months ended March 31, 2023, or 12.2% of revenue, compared to $78.7 million for the three months ended March 31, 2022, or 12.8% of revenue.

Depreciation and amortization. Depreciation and amortization expense was $31.6 million for the three months ended March 31, 2023, or 4.5% of revenue, compared to $28.9 million for the three months ended March 31, 2022, or 4.7% of revenue.

Interest expense. Interest expense was $20.0 million for the three months ended March 31, 2023 compared to $15.8 million for the three months ended March 31, 2022. The increase in interest expense was primarily a result of higher interest rates applicable to our variable rate debt.

Transaction-related expenses. Transaction-related expenses were $6.5 million for the three months ended March 31, 2023, compared to $3.6 million for the three months ended March 31, 2022. Transaction-related expenses represent legal, accounting, termination, restructuring, management transition, acquisition and other similar costs incurred in the respective period, as summarized below (in thousands).

| Three Months Ended March 31, |
| 2023 |  |  | 2022 |
Management transition costs | $ | 4,800 |  |  | $ | 1,035 |
Legal, accounting and other acquisition-related costs |  | 1,640 |  |  |  | 589 |
Termination and restructuring costs |  | 31 |  |  |  | 1,958 |
| $ | 6,471 |  |  | $ | 3,582 |

Provision for income taxes. For the three months ended March 31, 2023, the provision for income taxes was $19.1 million, reflecting an effective tax rate of 22.3%, compared to $17.4 million, reflecting an effective tax rate of 21.9%, for the three months ended March 31, 2022.

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.

Revenue

Our revenue is primarily derived from services rendered to patients for inpatient psychiatric and substance abuse care, outpatient psychiatric care and adolescent residential treatment. 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 CMS; and (iv) individual patients and clients. We determine the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience.

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The following table presents revenue by payor type and as a percentage of revenue for the three months ended March 31, 2023 and 2022 (dollars in thousands):

|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | Amount |  |  | % |  |  | Amount |  |  | % |
Commercial |  | $ | 203,619 |  |  |  | 28.9 | % |  | $ | 195,169 |  |  |  | 31.6 | %
Medicare |  |  | 108,640 |  |  |  | 15.4 | % |  |  | 94,920 |  |  |  | 15.4 | %
Medicaid |  |  | 364,306 |  |  |  | 51.8 | % |  |  | 300,526 |  |  |  | 48.7 | %
Self-Pay |  |  | 20,698 |  |  |  | 2.9 | % |  |  | 19,747 |  |  |  | 3.2 | %
Other |  |  | 7,004 |  |  |  | 1.0 | % |  |  | 6,291 |  |  |  | 1.1 | %
Revenue |  | $ | 704,267 |  |  |  | 100.0 | % |  | $ | 616,653 |  |  |  | 100.0 | %

The following tables present a summary of our aging of accounts receivable at March 31, 2023 and December 31, 2022:

March 31, 2023

|  | Current |  |  | 30-90 |  |  | 90-150 |  |  | >150 |  |  | Total |
Commercial |  |  | 18.8 | % |  |  | 5.0 | % |  |  | 2.3 | % |  |  | 8.1 | % |  |  | 34.2 | %
Medicare |  |  | 11.0 | % |  |  | 1.8 | % |  |  | 0.6 | % |  |  | 1.5 | % |  |  | 14.9 | %
Medicaid |  |  | 33.1 | % |  |  | 4.3 | % |  |  | 1.9 | % |  |  | 5.1 | % |  |  | 44.4 | %
Self-Pay |  |  | 1.4 | % |  |  | 1.5 | % |  |  | 1.1 | % |  |  | 2.2 | % |  |  | 6.2 | %
Other |  |  | 0.1 | % |  |  | 0.1 | % |  |  | 0.0 | % |  |  | 0.1 | % |  |  | 0.3 | %
Total |  |  | 64.4 | % |  |  | 12.7 | % |  |  | 5.9 | % |  |  | 17.0 | % |  |  | 100.0 | %

December 31, 2022

|  | Current |  |  | 30-90 |  |  | 90-150 |  |  | >150 |  |  | Total |
Commercial |  |  | 18.0 | % |  |  | 5.3 | % |  |  | 2.8 | % |  |  | 8.4 | % |  |  | 34.5 | %
Medicare |  |  | 11.5 | % |  |  | 1.7 | % |  |  | 0.7 | % |  |  | 1.4 | % |  |  | 15.3 | %
Medicaid |  |  | 31.7 | % |  |  | 4.5 | % |  |  | 2.6 | % |  |  | 4.7 | % |  |  | 43.5 | %
Self-Pay |  |  | 1.2 | % |  |  | 1.4 | % |  |  | 1.2 | % |  |  | 2.6 | % |  |  | 6.4 | %
Other |  |  | 0.2 | % |  |  | 0.0 | % |  |  | 0.0 | % |  |  | 0.1 | % |  |  | 0.3 | %
Total |  |  | 62.6 | % |  |  | 12.9 | % |  |  | 7.3 | % |  |  | 17.2 | % |  |  | 100.0 | %

Liquidity and Capital Resources

Cash provided by operating activities for the three months ended March 31, 2023 was $44.4 million compared to $76.8 million for the three months ended March 31, 2022. Days sales outstanding were 44 days at both March 31, 2023 and December 31, 2022, respectively.

Cash used in investing activities for the three months ended March 31, 2023 was $66.9 million compared to $49.7 million for the three months ended March 31, 2022. Cash used in investing activities for the three months ended March 31, 2023 primarily consisted of $66.5 million of cash paid for capital expenditures and $0.8 million of other, offset by $0.4 million of proceeds from sales of property and equipment. Cash paid for capital expenditures for the three months ended March 31, 2023 was $66.5 million, consisting of routine or maintenance capital expenditures of $18.0 million and expansion capital expenditures of $48.5 million. We define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue. Routine or maintenance capital expenditures, including information technology capital expenditures, were approximately 3% of revenue for the three months ended March 31, 2023. Cash used in investing activities for the three months ended March 31, 2022 primarily consisted of $50.5 million of cash paid for capital expenditures and $0.5 million of other, offset by $1.3 million of proceeds from the sale of property and equipment. Cash paid for capital expenditures for the three months ended March 31, 2022 consisted of $12.0 million of routine capital expenditures and $38.5 million of expansion capital expenditures.

Cash used in financing activities for the three months ended March 31, 2023 was $11.3 million compared to $20.5 million for the three months ended March 31, 2022. Cash used in financing activities for the three months ended March 31, 2023 consisted of repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises of $47.7 million and principal payments on long-term debt of $5.3 million, offset by borrowings on revolving credit facility of $40.0 million and contributions from noncontrolling partners in joint ventures of $1.7 million. Cash used in financing activities for the three months ended March 31, 2022 primarily consisted of repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises of $11.7 million,

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principal payments on revolving credit facility of $10.0 million, principal payments on long-term debt of $2.7 million and distributions of to noncontrolling partners in joint ventures of $0.4 million, offset by $4.3 million of contributions from noncontrolling partners in joint ventures.

We had total available cash and cash equivalents of $63.8 million and $97.6 million at March 31, 2023 and December 31, 2022, respectively, of which approximately $5.5 million and $3.7 million was held by our foreign subsidiaries, respectively. Our strategic plan does not require the repatriation of foreign cash in order to fund our operations in the U.S.

We believe existing cash on hand, cash flows from operations, the availability under our revolving line of credit and cash from additional financing will be sufficient to meet our expected liquidity needs during the next 12 months.

Credit Facility

We entered into a credit agreement establishing a new Credit Facility on March 17, 2021. The Credit Facility provides for a $600.0 million Revolving Facility and a $425.0 million Term Loan Facility, with each maturing on March 17, 2026. The Revolving Facility further provides for (i) up to $20.0 million which may be utilized for the issuance of letters of credit and (ii) the availability of a swingline facility under which we may borrow up to $20.0 million.

On March 30, 2023, we entered into the First Amendment. The First Amendment replaced LIBOR with Adjusted Term SOFR. Borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate of Bank of America or (iii) Adjusted Term SOFR for a one month interest period or (b) Adjusted Term SOFR, in each case plus an applicable margin that varies according to our total leverage ratio from 0.375% to 1.250% in the case of base rate loans and from 1.375% to 2.250% in the case of Adjusted Term SOFR loans. In addition, an unused fee that varies according to our total leverage ratio 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.

During the three months ended March 31, 2023, we borrowed $40.0 million on the Revolving Facility. We had $481.6 million of availability under the Revolving Facility and had standby letters of credit outstanding of $3.4 million related to security for the payment of claims required by our workers’ compensation insurance program at March 31, 2023.

The Credit Facility requires quarterly term loan principal repayments for our Term Loan Facility of $5.3 million for June 30, 2023 to March 31, 2024, $8.0 million for June 30, 2024 to March 31, 2025 and $10.6 million for June 30, 2025 to December 31, 2025, with the remaining principal balance of the Term Loan Facility due on the maturity date of March 17, 2026.

We have the ability to increase the amount of the Senior Facilities, which may take the form of increases to the Revolving Facility or the Term Loan Facility or the issuance of Incremental Facilities, upon obtaining additional commitments from new or existing lenders and the satisfaction of customary conditions precedent for such Incremental Facilities. Such Incremental Facilities may not exceed the sum of (i) the greater of $480.0 million and an amount equal to 100% of our Consolidated EBITDA (as defined in the Credit Facility), and (ii) additional amounts that would not cause the Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Facility) to exceed 3.5 to 1.0.

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 obligations under the Credit Facility. We and such guarantor subsidiaries have granted a security interest on substantially all personal property assets as
collateral for the obligations under the Credit Facility.

The interest rates and the unused line fee on unused commitments related to the Senior Facilities are based upon the following pricing tiers:

Pricing Tier |  | Consolidated Total Net Leverage Ratio |  | Term SOFR Loans, SOFR Daily Floating Rate Loans and Letter of Credit Fees |  |  | Base Rate Loans |  |  | Commitment Fee |
1 |  | ≥ 4.50:1.0 |  |  | 2.250 | % |  |  | 1.250 | % |  |  | 0.350 | %
2 |  | <4.50:1.0 but ≥ 3.75:1.0 |  |  | 2.000 | % |  |  | 1.000 | % |  |  | 0.300 | %
3 |  | <3.75:1.0 but ≥ 3.00:1.0 |  |  | 1.750 | % |  |  | 0.750 | % |  |  | 0.250 | %
4 |  | <3.00:1.0 but ≥ 2.25:1.0 |  |  | 1.500 | % |  |  | 0.500 | % |  |  | 0.200 | %
5 |  | <2.25:1.0 |  |  | 1.375 | % |  |  | 0.375 | % |  |  | 0.200 | %

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

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transactions, in each case, subject to customary exceptions. 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 5.0 to 1.0 and an interest coverage ratio of at least 3.0 to 1.0. The Credit Facility also includes events of default customary for facilities of this type and upon the occurrence of any such event of default, among other things, all outstanding loans under the Senior Facilities may be accelerated, the lenders’ commitments may be terminated, and/or the lenders may exercise collateral remedies. At March 31, 2023, we were in compliance with all financial covenants.

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Senior Notes

5.500% Senior Notes due 2028

On June 24, 2020, we issued $450.0 million of 5.500% 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.

5.000% Senior Notes due 2029

On October 14, 2020, we issued $475.0 million of 5.000% Senior Notes. 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 indentures governing 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.

We may redeem the Senior Notes at our option, in whole or part, at the dates and amounts set forth in the indentures.

Supplemental Guarantor Financial Information

We conduct substantially 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 condensed consolidated financial statements, except transactions between combining entities have been eliminated. Financial information for our combined non-guarantor entities has been excluded pursuant to SEC Regulation S-X Rule 13-01. Presented below is condensed financial information for our combined wholly-owned subsidiary guarantors at March 31, 2023 and December 31, 2022, and for the three months ended March 31, 2023.

Summarized balance sheet information (in thousands):

|  | March 31, 2023 |  |  | December 31, 2022 |
Current assets |  | $ | 429,651 |  |  | $ | 396,553 |
Property and equipment, net |  |  | 1,546,023 |  |  |  | 1,517,893 |
Goodwill |  |  | 2,105,227 |  |  |  | 2,105,227 |
Total noncurrent assets |  |  | 3,932,645 |  |  |  | 3,921,336 |
Current liabilities |  |  | 343,513 |  |  |  | 345,606 |
Long-term debt |  |  | 1,399,778 |  |  |  | 1,364,541 |
Total noncurrent liabilities |  |  | 1,666,111 |  |  |  | 1,629,750 |
Redeemable noncontrolling interests |  |  | — |  |  |  | — |
Total equity |  |  | 2,352,672 |  |  |  | 2,342,533 |

Summarized operating results information (in thousands):

|  | Three Months Ended March 31, 2022 |
Revenue |  | $ | 619,583 |
Income before income taxes |  |  | 77,654 |
Net income |  |  | 60,612 |
Net income attributable to Acadia Healthcare Company, Inc. |  |  | 60,612 |

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Contractual Obligations

The following table presents a summary of contractual obligations at March 31, 2023 (in thousands):

|  | Payments Due by Period |
|  | Less Than 1 Year |  |  | 1-3 Years |  |  | 3-5 Years |  |  | More Than 5 Years |  |  | Total |
Long-term debt (a) |  | $ | 101,806 |  |  | $ | 637,392 |  |  | $ | 97,000 |  |  | $ | 984,625 |  |  | $ | 1,820,823 |
Operating lease liabilities (b) |  |  | 33,381 |  |  |  | 55,227 |  |  |  | 31,239 |  |  |  | 64,038 |  |  |  | 183,885 |
Finance lease liabilities |  |  | 990 |  |  |  | 2,120 |  |  |  | 2,178 |  |  |  | 21,550 |  |  |  | 26,838 |
Total obligations and commitments |  | $ | 136,177 |  |  | $ | 694,739 |  |  | $ | 130,417 |  |  | $ | 1,070,213 |  |  | $ | 2,031,546 |

(a)
Amounts include required principal and interest payments. The projected interest payments reflect the interest rates in place on our variable-rate debt at March 31, 2023.
(b)
Amounts exclude variable components of lease payments.

Critical Accounting Policies

Our goodwill and other indefinite-lived intangible assets, which consist of licenses and accreditations, trade names, certificates of need and intangible assets that are not amortized, are evaluated for impairment annually during the fourth quarter or more frequently if events indicate the carrying value of a reporting unit may not be recoverable.

As of our impairment test on October 1, 2022, we have one reporting unit, behavioral health services. The fair value of our behavioral health services reporting unit substantially exceeded its carrying value, and therefore no impairment was recorded.

There have been no material changes in our critical accounting policies at March 31, 2023 from those described in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 3. Quantitative and Qualitat ive Disclosures About Market Risk

Interest Rate Risk

Our interest expense is sensitive to changes in market interest rates. Our long-term debt outstanding at March 31, 2023 was composed of $914.7 million of fixed-rate debt and $485.1 million of variable-rate debt with interest based on Adjusted Term SOFR plus an applicable margin. Based on our borrowing level at March 31, 2023, a hypothetical 1% increase in interest rates would decrease our pretax income on an annual basis by approximately $4.9 million.

Item 4. Control s and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, our management conducted an evaluation, with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended March 31, 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II – OTH ER INFORMATION

Item 1. Legal Proceedings

Information with respect to this item may be found in Note 17 – Commitments and Contingencies in the accompanying notes to our consolidated financial statements of this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.

Item 1A. Ri sk Factors

In addition to the other information set forth in this report, an investor should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are not the only risks facing the Company. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect the Company’s business, financial condition, operating results or cash flows.

Item 2. Unregistered Sales of Equi ty Securities and Use of Proceeds

During the three months ended March 31, 2023, the Company withheld shares of Company common stock to satisfy employee minimum statutory tax withholding obligations payable upon the vesting of restricted stock, 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 |
January 1 - January 31 |  |  | — |  |  | $ | — |  |  |  | — |  |  |  | — |
February 1 - February 28 |  |  | 585,699 |  |  |  | 80.85 |  |  |  | — |  |  |  | — |
March 1 - March 31 |  |  | 33,869 |  |  |  | 71.29 |  |  |  | — |  |  |  | — |
Total |  |  | 619,568 |  |  |  |  |  |  |  |  |  |

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Item 6. Exhibits

Exhibit No. |  | Exhibit Description
3.1 |  | Amended and Restated Certificate of Incorporation, as amended. (1)
3.2 |  | Amended and Restated Bylaws of the Company, as amended. (1)
10.1* |  | First Amendment, dated March 30, 2023, to the Company’s Credit Agreement, dated as of March 17, 2021.
22 |  | List of Subsidiary Guarantors and Issuers of Guaranteed Securities. (2)
31.1* |  | Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* |  | Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32* |  | Certification of Chief Executive Officer and Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS** |  | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.
101.SCH** |  | Inline XBRL Taxonomy Extension Schema Document.
101.CAL** |  | Inline XBRL Taxonomy Calculation Linkbase Document.
101.DEF** |  | Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB** |  | Inline XBRL Taxonomy Label Linkbase Document.
101.PRE** |  | Inline XBRL Taxonomy Presentation Linkbase Document.
104 |  | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, has been formatted in Inline XBRL.

(1)
Incorporated by reference to exhibits filed with the Company’s Current Report on Form 8-K filed May 25, 2017 (File No. 001-35331).
(2)
Incorporated by reference to exhibits filed with the Company’s Annual Report on Form 10-K for year ended December 31, 2022 (File No. 001-35331).

* Filed herewith.

** The XBRL related information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

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SIGNA TURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| Acadia Healthcare Company, Inc.
| By: |  | /s/ David M. Duckworth
|  |  | David M. Duckworth
|  |  | Chief Financial Officer

Dated: April 27, 2023

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