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 December 31, 2025, the Company operated 16 facilities through non-wholly owned subsidiaries. The Company owns between approximately 65% and 88% 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 December 31, 2025 and 2024 include total assets of variable interest entities of $1,344.8 million and $930.9 million, respectively, which cannot be used to settle the obligations of other entities. Consolidated liabilities at December 31, 2025 and 2024 include total liabilities of variable interest entities of $49.6 million and $36.8 million, respectively.

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


	December 31,
	2025		2024
Cash and cash equivalents	$	134,789	$	97,901
Accounts receivable, net		54,810		39,050
Other current assets		25,106		5,388
Total current assets		214,705		142,339
Property and equipment, net		1,011,578		718,084
Goodwill		61,267		42,384
Intangible assets, net		45,318		18,394
Operating lease right-of-use assets		11,934		9,724
Total assets	$	1,344,802	$	930,925

Accounts payable	$	11,798	$	9,756
Accrued salaries and benefits		17,562		12,608
Current portion of operating lease liabilities		696		613
Other accrued liabilities		10,541		4,054
Total current liabilities		40,597		27,031
Operating lease liabilities		9,044		9,740
Total liabilities	$	49,641	$	36,771