All right. Hey, everyone. I'm Joseph Overman. I'm on the Healthcare Managed Care and Facilities team here at UBS. Today we have Acadia Healthcare with us. We have Chris Hunter, Chief Executive Officer, and Todd Young, Chief Financial Officer. Just a good place to start off today would be the Form 8-K that you all filed after the close yesterday, which announced that the company has agreed to settle previously disclosed shareholder litigation for $179 million. Can you just walk us through some of the key considerations there, and why did you all agree to settle that case? Yeah. Thank you, Joseph, and thanks for having us. On the Form 8-K, I think the first thing that I would mention is just that the company has consistently denied any wrongdoing, and the announced settlement that we put out this morning will not include any admission of fault or liability. Pending the expected court outcomes, the settlement just brings us one step closer to finally putting this behind us. This has been going on for many years. This is a case that goes all the way back to the 2018 timeframe and centered on allegations that the company had made misleading statements about its business and financial performance between April of 2014 and the end of 2018. A $179 million settlement. We expect to finalize this at the end of November here. The payment is going to be funded through a combination of approximately $30 million in anticipated insurance proceeds, the remainder from cash on hand and existing line of credit. We also believe that we continue to be very well capitalized with a strong balance sheet. Our net leverage will increase modestly from 3.4 x to approximately 3.65 x, which we view as manageable just given our cash flow profile and just our ongoing efforts to unlock value across the business. We believe that it's in the best interest of the company and shareholders to move on here, and that's really the reason. We want to reinforce that settling does not mean we accept the allegations. Okay. Got it. Thanks for that color. At this point, we're now 10 months into the year into 2025. How has the year been so far for you all? How have the results compared and differed from your expectations coming into 2025? Yeah. I would start and maybe just turn it over to Todd. I think I'd start by saying through the third quarter, our results have come in modestly below expectations, and we've taken steps to reflect that in our guidance that we provided last week. I do want to cover what I think we have done in 2025 that really sets the company up for significant growth in 2026, and I think positions us to really unlock the free cash flow generating power of the business. We've brought on 1,700 beds over the course of the last few years, so calendar 2024 and then year to date 2025. 632 of those beds will drop into the same store calculation in the first quarter of next year. We've done work on optimizing our portfolio. We've had to close down a few underperforming facilities. We've been very outspoken on our commitment to capital deployment and taking our CapEx down by $300 million next year while still being able to generate significant beds. We have invested heavily in quality and safety initiatives that really have set the company up well, as we have seen an environment across the entire industry that is becoming more scrutinous and that we're seeing more surveys of facilities. We are the company that is expanding access to care and building all these beds. We are really proud of the progress that we've made on that front. Todd, what would you add just on the considerations? Yeah. I think that's fundamentally, as we look across the next three to five years, the earnings power of the company has been built with this additional beds being added on and our ability to execute. Now, unfortunately, we've had to close a few facilities that were underperforming, and that happens when you have nearly 280 facilities in the total portfolio. All of those things, I think, have been done with great rigor and insights. Now we're looking to really increase that free cash flow generating the business, reduce leverage, and give ourselves a better platform moving forward. Again, overall, the company has weathered some storms and is getting through that. I think that's what sets us up to really drive growth going forward is the ability to continue to drive volumes into our new facilities and work with our really high-quality JV partners to provide great care to patients. At the end of the day, that's what will create the value. The team's really focused on that and built these quality initiatives to really handle the additional regulatory scrutiny that's being put on the industry at the moment. Okay. What is the latest you all are seeing on the volume trends? I know you all have been dealing with some pressure, primarily, it sounds like, from managed care companies. Can you just talk about how these headwinds have developed and what the impact has been for Acadia? Yeah. I think overall, as we talked about last week on our call, we have seen more pressure with managed payers, with pre-authorizations, looking at things after three days versus letting an acute patient be in for seven to 10 days. We have seen greater focus on those elements. While we are very pleased with the 3.3% same store admission increase that we saw quarter-over-quarter, it was offset by less revenue per patient day. Again, just some strengths on average length of stay coming down. Now, generally, we have been adding a lot of acute beds. An acute patient is typically in a facility for seven to 10 days. Thus, over time, our average length of stay as a company is going to drop because of just the percentage of acute beds relative to other beds. It is something that we're working with the payers, especially on the managed Medicaid side. We think those conversations are going well. We have seen their public earnings calls talking about their behavioral health spend, and we think they're being a little reactionary in certain areas. We'll work with our data. I mean, I think one of the things we talked about, right, is the increase in putting electronic medical records in the facilities, getting better quality data and outcomes that we can take to the payers. When we do that, we get good responses from them, and we're continuing to do that at every level. Okay. The recent guidance updated with the third quarter earnings call implies a deterioration in the fourth quarter versus the third quarter. We've gotten a lot of questions from investors asking, "Is this pressure that we should extrapolate into the future, into future quarters in 2026, potentially?" Just sort of in your view, what's the right way to view these headwinds that you've called out for 2024? Sorry, for fourth quarter 2025. Yeah. Joseph, let me take that one. We've been clear that the fourth quarter, particularly when we provided our guidance last week, reflects a number of different headwinds from volume softness, some of the rate pressures that we've seen, certainly elevated bad debt and denials. We called out an incremental $5 million PLGL expense. Those collectively drove the step down in our guidance. That said, we do not believe that the fourth quarter should be viewed as a new baseline for 2026. I think there are several factors that I would point out. I think the first is from a startup losses standpoint. We expect startup losses to decline modestly in 2026 as we shift to more of a focused growth strategy. Q4 represented the peak for startup losses in 2025, and we anticipate having a step down next year and then certainly into 2027 as well. The next thing I would call out is that we have taken decisive action on underperforming facilities, which should not only improve our margin mix but also reduce some drag on EBITDA next year as well. 1/3 would be the ramping contributions that we're seeing from the recent bed additions. I just called out the 632 beds that are entering the same store calc in Q1. That should really help us from a volume growth standpoint and also operating leverage. I would say that we also have just been actively engaging with payers across the country, just trying to have discussions directly about the caliber of investments that we've been making and how we can continue to be partners there. I think just stepping back, we're still finalizing 2026 and our budget there, and we're going to be providing formal guidance on our Q4 call in February. We do remain very confident in our long-term strategy, and we just believe that the actions that we're taking here are going to continue to position us very well for 2026 and the future. Okay. The provider sector more broadly has talked about some of this increased just scrutiny from payers over the past couple of years, although it does seem like Acadia might have been dealing with more than what some of the other providers have been seeing. Do you view this as something specific to behavioral health? Is it specific to the payers you contract with, the geographies that you operate in? How do you view what's causing Acadia to maybe see trends that are different from some other providers? Yeah. Why don't I start and then see if Todd wants to add anything on this front. I would say we are in a part of healthcare and behavioral health that has seen historic underinvestment relative to the rest of healthcare. We know that the HITECH Act that provided meaningful use dollars and certainly led to electronic medical records in other parts of healthcare, including the med-surg providers, left the behavioral health companies out. We have been a company that has been very intentional about investing in quality infrastructure that we believe is going to directly help payers manage costs and certainly improve outcomes. That's something that we want to be a partner to the payers. We know that they're under significant cost pressures, particularly in Medicaid. We really believe that given the acuity of the patients that we're serving and the exploding costs that we have seen documented in other parts of the system, if these patients don't get strong care, that we really can be a high-quality evidence-based partner for these payers. That is something that we want to leverage the investments that we've made and continue to talk about ways to be more of a partner. Todd, what would you add? Yeah. I think that just there is pressure in federal and state programs depending on states taking different approaches. I'm sure folks have heard about those that are having cuts on reimbursement as we've had these negotiations. All of those things are things that we're using our data and our quality of our outcomes to help offset. The demand for the services is often you're seeing that with the payers' budgets being impacted and them calling out behavioral health as an area. That, again, is an opportunity for us going forward as we've got more ability to help those patients in need. That's what we have to do is keep converting it and demonstrating to payers that we are a net improvement to their overall network of costs. I think we know the comorbidities that come with behavioral health diagnosis, that it is 4x or 5x more costly to treat those patients if their mental health area is not treated. That is the facts and the data that we keep having as our teams interact and negotiate and talk with the payers frequently. Okay. Acadia's added 1,700 new bed additions in 2024 and through the first three quarters of 2025. Can you walk us through just the typical ramp-up for new bed additions? How should investors be thinking about the embedded earnings potential from these new bed additions as we head into 2026? Yeah. It's really exciting. We're excited to be able to treat and help more patients across the U.S. We start with our JV partners. Those facilities that we've brought on and three new JV facilities next year that drives most of that 400-600 bed increase are with partners like Tufts, like Orlando Health. Those are the opportunities to take a new facility and ramp faster than one that doesn't have a partner. If we start with the slowest ramp, it's probably a brand new facility in a new area where we don't have a JV partner, just given you have to get all the staffing, you don't have the local relationships at the same level. The fastest ones that ramp are bed additions. We'll have a facility that's 100 beds. We'll expand it to 130 beds. That usually goes much quicker just given the nature of that sort of expansion. Overall, we've shown at previous conference last year cohorts going back to 2020 and how fast they ramp. Generally speaking, we're looking to ramp these as quick as possible. That is the big embedded opportunity as we take the average EBITDA from the new facilities and get it up to a corporate average. There's a lot of embedded earnings growth available that we'll demonstrate over the next couple of years. Okay. Acadia has closed down a handful of underperforming facilities recently. You've talked about it on the earnings calls. Can you just walk us through the process for how you make those decisions? Is this something that is part of an ongoing process that would be expected to continue going forward? Is this more of you've worked your way through most of your reviews and it's smaller going forward? How do you view the closing of facilities? Yeah. Joseph, I'll take that one. I'd start by saying that we do have 278 facilities across four different lines of business. It's always a difficult decision to close a facility. We're taking a very disciplined and deliberate approach to the way that we think about optimization. We go through a number of criteria. I mean, it starts with, does the facility continue to have the potential into the foreseeable future to contribute meaningfully to patient outcomes and to clinical outcomes and operational efficiency? Is there a path to alignment with our long-term strategy? Is there a path to delivering sustainable EBITDA or earnings growth? In 2025, we did announce the closure of five facilities that after going through a facility-by-facility process and review, we decided to take action there. We've also ring-fenced a small group of facilities that are on a watch list, but we're continuing to watch closely. Other than that, we do not see any other actions that we'll need to take. I mean, again, we have 278 facilities. We're always in the process of reviewing our portfolio and holding our operators accountable. We're really looking forward to moving into 2026 and having taken these actions think will help us catapult our business forward. Okay. Acadia has also announced a pause of several new facility developments in the past couple of quarters. Were any of these JV facilities, or are they all company-owned de novos? Are these more of temporary short-term pauses as you wait for the environment to change? If there is a rebound in demand or a rebound in dynamics, could you restart these projects quickly, or is it more of indefinitely on pause and revisit in the future? Yeah. Todd just referenced the significant importance of joint ventures to our strategy and to our growth. We're very proud of that. I mean, again, just in calendar 2025, being able to open really important facilities with Henry Ford in Detroit, Geisinger in Pennsylvania, Ascension in Austin, Texas, and then looking ahead to next year with Tufts in Boston, Orlando Health in Florida, here in Florida, we are looking to continue to execute on these JV commitments that we've made. Many of these decisions have really been more focused on de novos, where we've decided to scale back from a given market. There certainly, to answer your question, could be circumstances that we would restart and review these projects in the future. We also have a very high bar for the deployment of capital. We look at every single opportunity to deploy capital individually. We have a committee that goes through that. This would be no exception there. We have made these decisions, and we are moving forward. Acadia operates across multiple different segments. You have your acute, your residential specialty, and the comprehensive treatment center segment. It sounds like the closures have been spread across various types of facilities. Has your view on the long-term attractiveness of any of these specific segments changed over the past couple of years? I would say it has not changed. We continue to view all of our core service lines, acute, specialty, RTC, CTC, all as strategically important and tying into our long-term growth framework. That said, we have taken a more focused approach to portfolio management over the past year than we have in the past. That is clearly reflected in the five facility closures that I just talked about. Four of those were specialty facilities, and one was acute. In that specialty segment, I would say the closures were driven by shifting market dynamics primarily, particularly in areas like eating disorders, where we just overall did not see the ongoing and continued demand, but really a recognition that certain programs just did not meet our hurdles with respect to outcomes that we are able to generate and long-term strategic fit. On the acute side, the single closure that we had in 2025 was tied more to persistent underperformance and just a lack of a clear path to improvement there. Overall, on the CTC front, we disclosed last week really strong growth quarter-over-quarter in that business. We've added 14 new CTCs year to date. We continue to see meaningful opportunity for creative growth there, both on the organic and the inorganic side. Overall, I would just say that we've made targeted adjustments, but our broader strategy remains unchanged. We're very focused on growth in markets and service lines with strong fundamentals. We just continue to remain confident overall in the attractiveness of each of these segments. Moving on to the expense environment. The labor environment has been cooling off a little bit in 2025 after a few very tough years post-pandemic. In the 3 Q earnings call, you all mentioned some incremental headwinds from employee healthcare costs. Just looking broadly, are total salaries and benefits still trending as you've been expecting them to? What type of wage inflation are you expecting as we head into 2026? Yeah. I think fair question on the labor front. I would say overall that we're seeing very encouraging signs of stabilization in the labor market, particularly relative to what we were seeing as a contrast at the end of 2022. Base wage inflation has ticked down slightly in Q3. We've now had six consecutive quarters of improved employee retention, which for us reflects the success of some of the really significant employee engagement and workforce development initiatives that our HR team has put in place with a lot of success. From a cost perspective, same facility salaries, wages, and benefits for SWB per patient day did increase in Q3, but that was primarily driven by lower patient day volumes, which reduced the denominator and created a little bit of upward pressure on per-day metrics. We also saw some modest headwinds from internal medical expense, as you called out, particularly employee healthcare costs, but these were also manageable. As we look ahead to calendar 2026, we expect the labor market to remain generally stable. We're going to provide more guidance on that when we come back in February timeframe. In the meantime, the investments that we've continued to make on the technology front, in centralized recruitment, in our quality infrastructure, all of those have continued to support staffing efficiency and overall retention at better levels than we've seen in the last few years. We really believe that's going to position us to convert these rising referral volumes that we've seen into admissions even more effectively. Professional and general liability expense was a headwind for you all in the third quarter. Coming into 2025, that was already an area that was expected to be a source of some pressure. Can you give any additional detail on that line item? Was the step-up in 3 Q more of a one-time true-up to catch up? Or is it closer to a run rate for future accrual of that line item? Yeah. We're still waiting on our actual report for the year on this. Based off what we've seen across the industry, this is an industry-wide issue. It's not an Acadia-specific one. Also, our own internal case experience, we made the decision that we needed to add an additional expectation of a higher expense for that here in Q4. That does reflect an expectation that we've probably been a little under-accrued throughout the first three quarters of the year, much like you saw in Q4 of last year when we had an incremental $14 million. This doesn't necessarily reflect a full run rate, but we also don't know what the final answer will be. We've given prudence in our guidance here on our expectations. We'll learn more, and then we'll reflect it in 2026. Certainly, one of the things is we went and renewed this insurance with our carriers. The investments we've made in quality, the investments we've made in patient safety, all of that is really being recognized by those carriers and helping us get better rates than we would have otherwise had. Now, again, that's always a tough situation when it's better than you'd otherwise had, but it's still worse than where you were. Again, we do know that these investments we're making and the results we're able to demonstrate are being recognized, even though we are in this tough environment when it comes to these risks and insurance costs related to them. Okay. You all have talked about $22 million of EBITDA upside from pending supplemental payment programs that could be included in 4Q results if these programs are ultimately approved by the end of the year. Do you have any updates on the status of these programs? Is this $22 million number just the amount that you'd expect to recognize in 4Q? Is this close to an annualized run rate? Is it close to a single quarter of benefit? How should we think about how much of this is catch-up versus forward-looking earnings? Sure. No, and these are kind of four states generally that make up this possible $22 million yet this year. It looks like the government's going to reopen based off the last, I guess, 24 hours or 36 hours. That's a positive as we need CMS to work with the states and approve these programs. It could come yet this year. It could come right in early 2026. If it comes in early 2026, then it'll be almost all retroactive. We will get this benefit from having these programs in place for our base business in 2026 as well. We would expect from a run rate basis once these are going to have at least $22 million of annual EBITDA improvements from the programs. Where it hits yet 2025, early 2026, it's a net positive for our economics and our cash flow going into 2026. The current administration has made some major cuts to the Substance Abuse and Mental Health Services Administration, including laying off about half of the workforce and terminating some grants to state health departments that were intended for addiction and overdose prevention funding. Are you seeing any impact from these administrative changes or any other administrative changes that are impacting your business? I think from a public health standpoint, we continue to track all of this. We are absolutely tracking some of the cuts to SAMHSA, for example. These programs overall, we believe, do provide a really critical role in the community for a number of different programs, including the distribution of Narcan, which is incredibly important in our CTC business, peer recovery programs that we see in many of our lines of business, and early intervention services. Reductions in funding there could ultimately have real impact on our service lines. As it directly impacts Acadia, we are currently seeing very limited exposure directly to our business. We do not have direct funding sources that are tied to SAMHSA as an example. Our core business is not reliant on those grant programs. We continue to monitor the situation very closely. We continue to advocate on behalf of the industry for high-caliber behavioral healthcare. Have there been any updates on opioid settlement dollars? I know when we spoke with you in the past, it sounded like many states were still sort of early figuring out the RFP process. How far along has that gotten? Have there been any RFP wins or anything that's worth calling out for Acadia? Yeah. There really have not been many major developments that we would call out, which is a little bit surprising. We do believe that when there are RFPs that we have been particularly innovative and particularly given the strong quality outcomes that we have with the CARF measures that are extremely high relative to the competition that is out there, that we're going to continue to be very well positioned. We were very innovative with the mobile vans that we've been able to roll out in a number of rural communities as an example. When these states do begin putting these RFP frameworks in place, we feel like we're going to be extremely well positioned to capitalize on them. The dollars that are flowing to the states and then ultimately to the counties that then put the RFPs in place, we just are not seeing that many come about right now. As they do come about, we are tracking them. We will certainly be applying. We have been able to win our fair share to date. We see that as something that will really help us serve even more patients that have opioid use disorder and to really leverage the strength and breadth of our CTC business. On a similar topic, the Rural Health Transformation fund, another large pool of funding potentially that's out there. Have you all been involved in looking at those applications? It looks like all 50 states have submitted them to CMS. It's still very early. We're still trying to figure out where that money will go. You mentioned mobile clinics that helps rural communities. Do you have any sort of insight into what that would look like? Yeah. No, it's a great question. I mean, that's something that we've been tracking very closely. That is something that in a number of our participating states, we think that there could be opportunity. We've obviously made the decision to move forward in putting electronic health records into all of our acute facilities some time ago and are well along our way in making that happen. This could be an accelerant certainly for us, for the broader industry. For that, we really applaud this fund that's been put in place. They're going to do everything possible to capitalize on those opportunities. Okay. Great. Do you all have any closing remarks, any sort of key takeaways that you want investors to have about Acadia going forward? Yeah. I'd start, I mean, I'd say I'm only two weeks into the new role, but very excited by the passion the team has, their focus on patients and taking care of those patients really well. Then this underlying earnings growth we will have from filling up the beds with the capital we've already put in the ground. It is a great opportunity to drive future cash flows and really show off the pre-cash flow generation of the business. So impressed with the team, impressed with the quality of the outcomes we're delivering, and excited for what's ahead. Okay. Great. Thanks for the time Chris and Todd. Yep. Thank you, Joseph.