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 September 30, 2024, the Company operated ten facilities through non-wholly owned subsidiaries. The Company owns between approximately 65% and 87% 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 September 30, 2024 and December 31, 2023 include total assets of variable interest entities of $816.5 million and $597.8 million, respectively, which cannot be used to settle the obligations of other entities. Consolidated liabilities at September 30, 2024 and December 31, 2023 include total liabilities of variable interest entities of $33.0 million and $27.0 million, respectively.

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


	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	82,473	$	55,149
Accounts receivable, net		41,536		34,910
Other current assets		7,545		2,193
Total current assets		131,554		92,252
Property and equipment, net		614,281		438,965
Goodwill		42,384		42,384
Intangible assets, net		18,342		18,295
Operating lease right-of-use assets		9,895		5,948
Total assets	$	816,456	$	597,844

Accounts payable	$	9,700	$	8,235
Accrued salaries and benefits		8,615		9,909
Current portion of operating lease liabilities		593		273
Other accrued liabilities		4,151		2,385
Total current liabilities		23,059		20,802
Operating lease liabilities		9,900		6,160
Total liabilities	$	32,959	$	26,962