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 the COVID-19 pandemic on our inpatients and outpatients

volumes or disruptions caused by other pandemics, epidemics or outbreaks

        of infectious diseases;


    •   the impact of vaccine and other pandemic-related mandates imposed by
        local, state and federal authorities on our business;

• the costs of providing care to our patients, including staff increases,

        equipment and supply expenses resulting from the COVID-19 pandemic;


    •   the impact of the retirement of Debra K. Osteen, our former chief

leader, and our ability to integrate Christopher H. Hunterour

new CEO;

• our significant indebtedness, our ability to meet our debts,

and our ability to incur significantly more debt;

• our ability to implement our business strategies, particularly in light of

the COVID-19 pandemic;

• the impact of payments received from the State and third-party payers

our revenues and results of operations;

• difficulties in successfully integrating the activities of acquired companies

        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 impact of competition for personnel on our labor costs and profitability;

  • the impact of increases to our labor costs;

• the impact of general economic and employment conditions on our activities

and future operating results;

• the occurrence of incidents with patients, which could result in negative media

        coverage, adversely affect the price of our securities and result in
        incremental regulatory burdens and governmental investigations;


  • our future cash flow and earnings;


• our covenants, which may restrict our operations and funding

Activities;

• the impact of the economic situation and employment on our activities and

        future results of operations;


    •   the impact of adverse weather conditions, including the effects of
        hurricanes and wildfires;


  • compliance with laws and government regulations;


• the impact of claims brought against us or our facilities, including claims

damages for bodily injury, medical malpractice, overpayments,

Breach of Contract, Violation of Securities Laws, Liability and Employee Liability

        claims;


    •   the impact of governmental investigations, regulatory actions and
        whistleblower lawsuits;

• any failure to comply with the terms of our Business Integrity Agreement

        with the OIG;


  • the impact of healthcare reform in the U.S.;


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• the risk of a cybersecurity incident and any resulting negative impact on

our operations or violation of laws and regulations regarding the information

        privacy;


  • the impact of our highly competitive industry on patient volumes;

• our dependence on key management personnel, key management personnel and

facilities management staff;

• our acquisition, joint venture and de novo wholly owned 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 business;

  • our potential inability to extend leases at expiration;

• the impact of controls aimed at reducing hospitalization services on our revenues;

• 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,

particularly in places where we have concentrated our operations;

• the impact of laws and regulations relating to the confidentiality and security of

patient health information and standards for electronic transactions;

• our ability to cultivate and maintain relationships with referral sources;

• the impact of a change in the composition of our earnings, adverse changes in our

the effective tax rate and adverse developments in tax laws generally;

• changes in interpretations, assumptions and expectations regarding the

tax laws, including provisions of the CARES Act and other

guidelines that may be issued by federal and state tax authorities;

• failure to maintain effective internal control over financial reporting;

• the impact of fluctuations in our operating results, from quarter to quarter

        earnings and other factors on the price of our securities;


    •   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; and

• the risks and uncertainties described from time to time in our documents

with the SECOND.


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.

Insight

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, 2022, we
operated 238 behavioral healthcare facilities with approximately 10,600 beds in
40 states and Puerto Rico. During the three months ended March 31, 2022, we
added 28 beds to existing facilities and opened one comprehensive treatment
center ("CTC"). For the year ending December 31, 2022, we expect to add
approximately 300 beds to existing facilities and 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 United States. 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

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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.

On January 19, 2021, we completed the U.K. Sale pursuant to a Share Purchase
Agreement in which we sold all of the securities of AHC-WW Jersey Limited, a
private limited liability company incorporated in Jersey and a subsidiary of the
Company, which constituted the entirety of our U.K. business operations. The
U.K. Sale resulted in approximately $1,525 million of gross proceeds before
deducting the settlement of existing foreign currency hedging liabilities of $85
million based on the current GBP to USD exchange rate, cash retained by the
buyer and transaction costs. We used the net proceeds of approximately $1,425
million (excluding cash retained by the buyer) along with cash from the balance
sheet to reduce debt by $1,640 million during the first quarter of 2021. As a
result of the U.K. Sale, we reported, for all periods presented, results of
operations and cash flows of the U.K. operations as discontinued operations in
the accompanying financial statements.

COVID-19[feminine]

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. and U.K. economies and financial
markets. 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 two years, all of our facilities have
closely followed infectious disease protocols, as well as recommendations by the
CDC and local health officials.

We have taken many steps to help minimize the impact of the virus on our patients and employees. For example, we:

• set up an internal COVID-19 working group;

• instituted social distancing practices and protective measures

our facilities, which included restricting or suspending visitor access,

screening of patients and staff entering our facilities based on criteria

        established by the CDC and local health officials, and testing and
        isolating patients when warranted;

• implemented plans to vaccinate all eligible employees at our facilities

        that participate in CMS reimbursement programs;


  • secured contracts with additional distributors for supplies;


  • expanded telehealth capabilities;


  • implemented emergency planning in directly impacted markets; and


    •   limited all non-essential business travel and suspended in-person
        trainings and conferences.


We have developed additional supply chain management processes, which includes
extensive tracking and delivery of key personal protective equipment ("PPE") and
supplies and sharing resources across all facilities. We could experience supply
chain disruptions and significant price increases in equipment, pharmaceuticals
and medical supplies, particularly PPE. Pandemic-related staffing difficulties
and equipment, pharmaceutical and medical supplies shortages may impact our
ability to treat patients at our facilities. Such shortages could lead to us
paying higher prices for supplies, equipment and labor and an increase in
overtime hours paid to our employees.

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 assignment to PHSSE funds repay, 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;


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    •   the temporary suspension of Medicare sequestration from May 1, 2020, to
        March 31, 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 is 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. We received approximately $19.7
million of the initial funds distributed from the PHSSE Fund in April 2020. We
received an additional $12.8 million from the PHSSE Fund in August 2020. In
April 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 funds received in 2021. We continue to
evaluate our compliance with the terms and conditions to, and the financial
impact of, these additional funds received.

Using existing authority and certain expanded authority under the CARES Act, the
U.S. Department of Health & Human Services ("HHS") expanded CMS' Accelerated and
Advance Payment Program to a broader group of Medicare Part A and Part B
providers for the duration of the COVID-19 pandemic. Under the program, certain
of our facilities were eligible to request up to 100% of their Medicare payment
amount for a three-month period. Under the original terms of the program, the
repayment of these accelerated/advanced payments would have begun 120 days after
the date of the issuance of the payment and the amounts advanced to our
facilities would have been recouped from new Medicare claims as a 100% offset.
Our facilities would have had 210 days from the date the accelerated or advance
payment was made to repay the amounts that they owe.

On October 1, 2020, Congress amended the terms of the Accelerated and Advance
Payment Program to extend the term of the loan and adjust the repayment process.
Under the new terms of the program, all providers will have 29 months from the
date of their first program payment to repay the full amount of the accelerated
or advance payments they have received. The revised terms extend the period
before repayment begins from 210 days to one year from the date that payment
under the program was received. Once the repayment period begins, the offset is
limited to 25% of new claims during the first 11 months of repayment and 50% of
new claims during the final 6 months. The revised program terms also lower the
interest rate on outstanding amounts due at the end of the repayment period from
10% to 4%. We applied for and received approximately $45 million in April 2020
from this program. Of the $45 million of advance payments received in 2020, we
repaid approximately $25 million of advance payments during 2021 and made
additional payments of approximately $8 million during the three months ended
March 31, 2022. We will continue to repay the remaining balance throughout the
rest of 2022.

Under the CARES Act, we also received a 2% increase in our facilities’ Medicare reimbursement rate following the temporary suspension of Medicare sequestration from May 1, 2020 for March 31, 2022.

The CARES Act also provides for certain federal income and other tax changes. We
received a cash benefit of approximately $39 million for 2020 relating to the
delay of payment of the employer portion of Social Security payroll taxes. We
repaid half of the $39 million of payroll tax deferrals during the third quarter
of 2021 and expect to repay the remaining portion in the second half of 2022.

In addition to the financial and other relief that has been provided by the
federal government through the CARES Act and other legislation passed by
Congress, CMS and many state governments have also issued waivers and temporary
suspensions of healthcare facility licensure, certification, and reimbursement
requirements in order to provide hospitals, physicians, and other healthcare
providers with increased flexibility to meet the challenges presented by the
COVID-19 pandemic. For example, CMS and many state governments have temporarily
eased regulatory requirements and burdens for delivering and being reimbursed
for healthcare services provided remotely through telemedicine. CMS has also
temporarily waived many provisions of the Stark law, including many of the
provisions affecting our relationships with physicians. Many states have also
suspended the enforcement of certain regulatory requirements to ensure that
healthcare providers have sufficient capacity to treat COVID-19 patients. These
regulatory changes are temporary, with most slated to expire at the end of the
declared COVID-19 public health emergency.

We continue to evaluate the terms and conditions and financial impact of funds received under the CARES Act and other government assistance programs.

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Results of Operations

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

                                                              Three Months Ended
                                                                   March 31,
                                                        2022                       2021
                                                Amount          %          Amount          %
Revenue                                        $ 616,653        100.0 %   $ 551,199        100.0 %
Salaries, wages and benefits                     335,762         54.4 %     304,333         55.2 %
Professional fees                                 36,911          6.0 %      31,617          5.7 %
Supplies                                          23,699          3.8 %      21,322          3.9 %
Rents and leases                                  11,249          1.8 %       9,412          1.7 %
Other operating expenses                          81,425         13.2 %      72,010         13.1 %
Depreciation and amortization                     28,926          4.7 %      24,894          4.5 %
Interest expense                                  15,787          2.6 %      29,027          5.3 %
Debt extinguishment costs                              -          0.0 %      24,650          4.5 %
Transaction-related expenses                       3,582          0.6 %       4,610          0.8 %
Total expenses                                   537,341         87.1 %     521,875         94.7 %
Income from continuing operations before
   income taxes                                   79,312         12.9 %      29,324          5.3 %
Provision for income taxes                        17,402          2.8 %       6,204          1.1 %
Income from continuing operations                 61,910         10.0 %      23,120          4.2 %
Loss from discontinued operations, net
   of taxes                                            -          0.0 %     (12,641 )       -2.3 %
Net income                                        61,910         10.0 %      10,479          1.9 %
Net income attributable to noncontrolling
   interests                                      (1,073 )       -0.2 %        (762 )       -0.1 %
Net income attributable to Acadia Healthcare
   Company, Inc.                               $  60,837          9.9 %   $   9,717          1.8 %


To March 31, 2022we operated 238 behavioral healthcare facilities with approximately 10,600 beds in 40 states and Porto Rico. For all periods presented, the results of operations and cash flows of UK the operations are presented as discontinued operations in the accompanying financial statements.

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. However,
we believe the diversity of our markets and service lines 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.

The following table shows the percentage changes in operating data for the same facilities for the three months ended March 31, 2022 compared to the same period in 2021:


U.S. Same Facility Results (a)
Revenue growth                        8.6%
Patient days growth                   2.2%
Admissions growth                    -2.6%
Average length of stay change (b)     4.9%
Revenue per patient day growth        6.2%
Adjusted EBITDA margin change (c)   150 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, debt
               extinguishment costs, transaction-related expenses, interest
               expense and


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              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 completed March 31, 2022 compared to the three months ended March 31, 2021

Revenue. Revenue increased $65.5 million, or 11.9%, to $616.7 million for the
three months ended March 31, 2022 from $551.2 million for the three months ended
March 31, 2021. Same facility revenue increased $46.8 million, or 8.6%, for the
three months ended March 31, 2022 compared to the three months ended March 31,
2021, resulting from same facility growth in patient days of 2.2% and an
increase in same facility revenue per day of 6.2%. Consistent with same facility
growth in 2021, the growth in same facility patient days for the
three months ended March 31, 2022 compared to the three months ended March 31,
2021 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
$335.8 million for the three months ended March 31, 2022 compared to
$304.3 million for the three months ended March 31, 2021, an increase of
$31.5 million. SWB expense included $7.9 million and $7.0 million of
equity-based compensation expense for the three months ended March 31, 2022 and
2021, respectively. Excluding equity-based compensation expense, SWB expense was
$327.9 million, or 53.2% of revenue, for the three months ended March 31, 2022,
compared to $297.3 million, or 53.9% of revenue, for the three months ended
March 31, 2021. The increase in SWB expense relates to incremental staff to
support volume growth as well as wage inflation. Same facility SWB expense was
$290.8 million for the three months ended March 31, 2022, or 49.1% of revenue,
compared to $274.2 million for the three months ended March 31, 2021, or 50.3%
of revenue.

Professional fees. Professional fees were $36.9 million for the
three months ended March 31, 2022, or 6.0% of revenue, compared to $31.6 million
for the three months ended March 31, 2021, or 5.7% of revenue. Same facility
professional fees were $31.4 million for the three months ended March 31, 2022,
or 5.3% of revenue, compared to $28.3 million, for the three months ended
March 31, 2021, or 5.2% of revenue.

Supplies. Supplies expense was $23.7 million for the three months ended
March 31, 2022, or 3.8% of revenue, compared to $21.3 million for the
three months ended March 31, 2021, or 3.9% of revenue. Same facility supplies
expense was $22.4 million for the three months ended March 31, 2022, or 3.8% of
revenue, compared to $21.2 million for the three months ended March 31, 2021, or
3.9% of revenue.

Rents and leases. Rents and leases were $11.2 million for the three months ended
March 31, 2022, or 1.8% of revenue, compared to $9.4 million for the
three months ended March 31, 2021, or 1.7% of revenue. Same facility rents and
leases were $9.1 million for the three months ended March 31, 2022, or 1.5% of
revenue, compared to $8.5 million for the three months ended March 31, 2021, or
1.6% 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 $81.4 million for the three months ended
March 31, 2022, or 13.2% of revenue, compared to $72.0 million for the
three months ended March 31, 2021, or 13.1% of revenue. Same facility other
operating expenses were $74.1 million for the three months ended March 31, 2022,
or 12.5% of revenue, compared to $69.6 million for the three months ended
March 31, 2021, or 12.8% of revenue.

Depreciation and amortization. Depreciation and amortization expense was
$28.9 million for the three months ended March 31, 2022, or 4.7% of revenue,
compared to $24.9 million for the three months ended March 31, 2021, or 4.5% of
revenue.

Interest expense. Interest expense was $15.8 million for the three months ended
March 31, 2022 compared to $29.0 million for the three months ended March 31,
2021. The decrease in interest expense was primarily due to debt repayments in
connection with the U.K. Sale in January 2021.

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Transaction-related expenses. Transaction-related expenses were $3.6 million for
the three months ended March 31, 2022, compared to $4.6 million for the three
months ended March 31, 2021. 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,
                                                         2022          2021

Legal, accounting and other costs related to the acquisition $589 $1,787
Termination and restructuring costs

                        1,958        

2,823

Management transition costs                                1,035            -
                                                      $    3,582      $ 4,610



Provision for income taxes. For the three months ended March 31, 2022, the
provision for income taxes was $17.4 million, reflecting an effective tax rate
of 21.9%, compared to $6.2 million, reflecting an effective tax rate of 21.2%,
for the three months ended March 31, 2021.

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.

The following table presents revenue by payor type and as a percentage of
revenue for the three months ended March 31, 2022 and 2021 (dollars in
thousands):

                           Three Months Ended
                                March 31,
                     2022                      2021
              Amount          %         Amount          %
Commercial   $ 194,693        31.6 %   $ 162,702        29.5 %
Medicare        94,582        15.3 %      86,185        15.6 %
Medicaid       299,914        48.6 %     274,620        49.8 %
Self-Pay        19,785         3.2 %      22,443         4.1 %
Other            7,679         1.3 %       5,249         1.0 %
Revenue      $ 616,653       100.0 %   $ 551,199       100.0 %


The following tables provide a summary of the age of our accounts receivable as of
March 31, 2022 and December 31, 2021:

March 31, 2022
              Current      30-90       90-150       >150       Total
Commercial        21.8 %      5.5 %        2.8 %      8.4 %      38.5 %
Medicare          10.7 %      1.5 %        0.4 %      1.5 %      14.1 %
Medicaid          30.4 %      2.6 %        1.9 %      5.3 %      40.2 %
Self-Pay           1.3 %      1.6 %        1.3 %      2.6 %       6.8 %
Other              0.2 %      0.1 %        0.0 %      0.1 %       0.4 %
Total             64.4 %     11.3 %        6.4 %     17.9 %     100.0 %




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December 31, 2021
              Current      30-90       90-150       >150       Total
Commercial        20.1 %      6.2 %        2.6 %      8.2 %      37.1 %
Medicare          11.3 %      1.7 %        0.5 %      2.0 %      15.5 %
Medicaid          28.6 %      3.5 %        2.0 %      5.6 %      39.7 %
Self-Pay           1.3 %      1.4 %        1.4 %      3.0 %       7.1 %
Other              0.1 %      0.1 %        0.2 %      0.2 %       0.6 %
Total             61.4 %     12.9 %        6.7 %     19.0 %     100.0 %


Cash and capital resources

Cash provided by continuing operating activities for the three months ended
March 31, 2022 was $76.8 million compared to $75.8 million for the three months
ended March 31, 2021. Operating cash flows for the three months ended March 31,
2022 included net government relief funds paid of approximately $7.6 million for
repayment of Medicare advance payments. Operating cash flows were impacted by an
increase in earnings, a reduction in cash paid for interest and an increase in
tax payments during the three months ended March 31, 2022. Days sales
outstanding were 44 days at March 31, 2022 compared to 42 days at
December 31, 2021.

Cash used in investing activities for the three months ended March 31, 2022 was
$49.7 million compared to cash provided by investing activities of
$1,367.6 million for the three months ended March 31, 2021. 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 sales 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. We define expansion capital
expenditures as those that increase the capacity of our facilities or otherwise
enhance revenue. Routine or maintenance capital expenditures were approximately
2% of revenue for the three months ended March 31, 2022. Cash provided by
investing activities for the three months ended March 31, 2021 primarily
consisted of $1,511.0 million of proceeds from the U.K. Sale and $0.1 million of
proceeds from the sale of property and equipment, offset by $84.8 million for
settlement of foreign currency derivatives, $58.7 million of cash paid for
capital expenditures and $0.1 million of other. Cash paid for capital
expenditures for the three months ended March 31, 2021 consisted of $7.7 million
of routine capital expenditures and $51.0 million of expansion capital
expenditures.

Cash used in financing activities for the three months ended March 31, 2022 was
$20.5 million compared to $1,647.5 million for the three months ended March 31,
2021. Cash used in financing activities for the three months ended March 31,
2022 consisted of repurchase of shares for payroll tax withholding, net of
proceeds from stock option exercises of $11.7 million, principal payments on
revolving credit facility of $10.0 million, principal payments on long-term debt
of $2.7 million and distributions to noncontrolling partners in joint ventures
of $0.4 million, offset by $4.3 million of contributions from noncontrolling
partners in joint ventures. Cash used in financing activities for the three
months ended March 31, 2021 primarily consisted of repayment of long-term debt
of $2,224.6 million, payment of debt issuance costs of $9.9 million, principal
payments on revolving credit facility of $270.0 million, other of $6.8 million
and $0.4 million of distributions to noncontrolling partners in joint ventures,
offset by borrowings on long-term debt of $425.0 million, borrowings on
revolving credit facility of $430.0 million, repurchase of shares for payroll
tax withholding, net of proceeds from stock option exercises of $8.2 million and
$1.0 million of contributions from noncontrolling partners in joint ventures.

We had total available cash and cash equivalents of $140.4 million and
$133.8 million at March 31, 2022 and December 31, 2021, respectively, of which
approximately $22.1 million and $20.1 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.

New credit facility

We entered into a New Credit Facility on March 17, 2021. The New 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 unless extended in accordance with
the terms of the New Credit Facility. The Revolving Facility further provides
for (i) up to $20.0 million to 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.

As part of the closing of the new credit facility on March 17, 2021we (i) refinanced and terminated our prior credit facility and (ii) funded the repayment of all of our outstanding 5.625% senior bonds.

In the three months ended March 31, 2022 have been paid $10.0 million the outstanding balance on the revolving facility. We have had $436.8 million availability under the revolving credit facility and had outstanding standby letters of credit $3.2 million safety-related for the payment of claims required by our workers’ compensation insurance program at March 31, 2022.

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The New Credit Facility requires quarterly term loan principal repayments for
our Term Loan Facility of $5.3 million for June 30, 2022 to March 31, 2024, $8.0
million for June 30, 2024 to March 31, 2025, $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 one or more 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 New Credit
Facility) and its Restricted Subsidiaries (as defined in the New Credit
Facility) (as determined for the four fiscal quarter period most recently ended
for which financial statements are available), and (ii) additional amounts so
long as, after giving effect thereto, the Consolidated Senior Secured Net
Leverage Ratio (as defined in the New Credit Facility) does not 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 its obligations under
the New Credit Facility. Borrowings under the Senior Facilities bear interest at
a floating rate, which will initially be, at our option, either (i) adjusted
LIBOR plus 1.50% or (ii) an alternative base rate plus 0.50% (in each case,
subject to adjustment based on our consolidated total net leverage ratio). An
unused fee initially set at 0.20% per annum (subject to adjustment based on the
our consolidated total net leverage ratio) is payable quarterly in arrears based
on the actual daily undrawn portion of the commitments in respect of the
Revolving Facility.

Unused interest rates and line charges on unused senior facility commitments are based on the following pricing tiers:

                                           Eurodollar Rate
                     Consolidated Total         Loans
                            Net             and Letter of         Base Rate and          Commitment
Pricing Tier           Leverage Ratio        Credit Fees         Swing Line Loans           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 New 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 New 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 New Credit
Facility also includes events of default customary for facilities of this type
and upon the occurrence of such events of default, among other things, all
outstanding loans under the Senior Facilities may be accelerated and/or the
lenders' commitments terminated. At March 31, 2022, we were in compliance with
such covenants.

Prior Credit Facility

We entered into the senior secured credit facility on April 1, 2011. On
December 31, 2012, we entered into the Prior Credit Facility which amended and restated the Senior Secured Credit Facility. We have amended the Prior Credit Facility from time to time as described in our prior filings with the SECOND.

On January 5, 2021, we made a voluntary payment of $105.0 million on the Tranche
B-4 Facility. On January 19, 2021, we used a portion of the net proceeds from
the U.K. Sale to repay the outstanding balances of $311.7 million of our TLA
Facility and $767.9 million of our Tranche B-4 Facility of the Prior Credit
Facility. During the three months ended March 31, 2021, in connection with the
termination of the Prior Credit Facility, we recorded a debt extinguishment
charge of $10.9 million, including the write-off of discount and deferred
financing costs, which was recorded in debt extinguishment costs in the
condensed consolidated statement of operations.

Senior Notes

5.500% senior bonds due 2028

On June 24, 2020we issued $450.0 million 5.500% Senior Notes due 2028. The 5.500% Senior Notes mature on 1st of July,

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2028 and bears interest at the rate of 5.500% per annum, payable semi-annually in arrears on January 1st and 1st of July of each year, from January 1, 2021.

5.000% senior bonds 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. We used the net proceeds of the 5.000% Senior
Notes to prepay approximately $453.3 million of the outstanding borrowings on
our existing Tranche B-3 Facility and used the remaining net proceeds for
general corporate purposes and to pay related fees and expenses in connection
with the offering. In connection with the 5.000% Senior Notes, we recorded a
debt extinguishment charge of $2.9 million, including the write-off of discount
and deferred financing costs of the Tranche B-3 Facility, which was recorded in
debt extinguishment costs in the consolidated statement of operations for the
year ended December 31, 2020.

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.

The Senior Notes issued by us are guaranteed by each of our subsidiaries that
guaranteed our obligations under the New Credit Facility. The guarantees are
full and unconditional and joint and several.

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

5.625% senior bonds due 2023

On February 11, 2015, we issued $375.0 million of 5.625% Senior Notes due 2023.
On September 21, 2015, we issued $275.0 million of additional 5.625% Senior
Notes. The additional notes formed a single class of debt securities with the
5.625% Senior Notes issued in February 2015. Giving effect to this issuance, we
had outstanding an aggregate of $650.0 million of 5.625% Senior Notes. The
5.625% Senior Notes were to mature on February 15, 2023 and bear interest at a
rate of 5.625% per annum, payable semi-annually in arrears on February 15 and
August 15 of each year. On March 17, 2021, we redeemed the 5.625% Senior Notes.

6.500% senior bonds due 2024

On February 16, 2016, we issued $390.0 million of 6.500% Senior Notes due 2024.
The 6.500% Senior Notes were to mature on March 1, 2024 and bear interest at a
rate of 6.500% per annum, payable semi-annually in arrears on March 1 and
September 1 of each year, beginning on September 1, 2016. On March 1, 2021, we
redeemed the 6.500% Senior Notes.

Redemption of the 5.625% Senior Notes and 6.500% Senior Notes

On January 29, 2021we have issued conditional notices of full repayment providing for the full repayment of $650 million 5.625% Senior Notes and $390 million senior notes at 6.500% to the holders of these notes.

On March 1, 2021, we satisfied and discharged the indentures governing the
6.500% Senior Notes. In connection with the redemption of the 6.500% Senior
Notes, we recorded debt extinguishment costs of $10.5 million, including $6.3
million cash paid for breakage costs and the write-off of deferred financing
costs of $4.2 million in the condensed consolidated statement of operations.

On March 17, 2021, we have satisfied and discharged the indentures governing the 5.625% Senior Bonds. As part of the 5.625% senior bond redemption, we recorded a debt extinguishment charge of $3.3 millionincluding the write-off of deferred financing costs and premiums in the condensed consolidated statement of income.

Contractual Obligations

The following table presents a summary of contractual obligations at March 31,
2022 (in thousands):

                                                               Payments Due by Period
                                      Less Than                                     More Than
                                        1 Year       1-3 Years      3-5 Years        5 Years          Total
Long-term debt (a)                    $   81,609     $  172,465     $  605,687     $ 1,009,375     $ 1,869,136
Operating lease liabilities (b)           31,539         52,837         35,775          66,748         186,899
Finance lease liabilities                    990          2,021          

2,178 22,638 27,827 Total obligations and commitments $114,138 $227,323 $643,640 $1,098,761 $2,083,862




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(a) Amounts include required principal and interest payments. The projected

interest payments reflect prevailing interest rates on our variable rates

debt to March 31, 2022.

(b) The amounts exclude the variable components of rents.

Critical accounting policies

Our goodwill and other indefinite-lived intangible assets, which consist of
licenses and accreditations, trade names and certificates of need 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.

Subsequent to the U.K. Sale, as of our impairment test on October 1, 2021, we
had 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, 2022 from those described in our Annual Report on Form 10-K for the
year ended December 31, 2021.
Item 3. Quantitative and Qualitative 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, 2022 was composed of $913.2 million of
fixed-rate debt and $571.9 million of variable-rate debt with interest based on
LIBOR plus an applicable margin. A hypothetical 10% increase in interest rates
(which would equate to a 0.20% higher rate on our variable rate debt) would
decrease our net income and cash flows by $0.8 million on an annual basis based
upon our borrowing level at March 31, 2022.
Item 4. Controls and Procedures


Assessment 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, 2022 that have materially affected or
are reasonably likely to materially affect our internal control over financial
reporting.

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