Form 8-K Acadia Healthcare Compan For: Sep 14

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): September 14, 2015

 

 

Acadia Healthcare Company, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware		001-35331		45-2492228
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

6100 Tower Circle, Suite 1000 Franklin, Tennessee		37067
(Address of Principal Executive Offices)		(Zip Code)

(615) 861-6000

(Registrant’s Telephone Number, including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 7.01.

Regulation FD Disclosure.

On September 14, 2015, Acadia Healthcare Company, Inc. (the “Company”) issued a press release announcing it is proposing to issue $250 million aggregate principal amount of its 5.625% senior notes due 2023 (the “Senior Notes”) to be offered and sold only to qualified institutional buyers in an unregistered offering pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”), and to certain non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Act. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and incorporated by reference herein.

In addition, on September 14, 2015, the Company issued a press release announcing that it has commenced a cash tender offer (the “Tender Offer”) for any and all of its outstanding 12.875% Senior Notes due 2018, upon the terms and conditions set forth in the Offer to Purchase, dated September 14, 2015 and the related Letter of Transmittal and the Notice of Guaranteed Delivery. A copy of the press release is attached as Exhibit 99.2 hereto and is incorporated herein by reference.

A confidential offering memorandum is being furnished to prospective buyers in connection with the Company’s private offering of Senior Notes. A copy of the section of the confidential offering memorandum entitled “Summary—Summary Historical Condensed Consolidated Financial Data and Unaudited Pro Forma Condensed Combined Financial Data” is attached to this Current Report on Form 8-K as Exhibit 99.3 and incorporated by reference herein.

 

Item 8.01

Other Events.

The following pro forma financial information included in the confidential offering memorandum for the offering of Senior Notes is attached to this Current Report on Form 8-K as Exhibit 99.4 and incorporated by reference herein:

 

•

Unaudited Pro Forma Condensed Combined Statement of Operations for the fiscal year ended December 31, 2014

 

•

Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2015

 

•

Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2014

 

•

Notes to Unaudited Pro Forma Condensed Combined Financial Information

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit Number		Description
99.1		Press release, dated September 14, 2015 (Senior Note Offering)
99.2		Press release, dated September 14, 2015 (Tender Offer)
99.3		The section of the confidential offering memorandum entitled “Summary—Summary Historical Condensed Consolidated Financial Data and Unaudited Pro Forma Condensed Combined Financial Data.”
99.4		Unaudited Pro Forma Condensed Combined Financial Information

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Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K and the exhibits hereto contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that address future events, occurrences or results. In some cases, forward-looking statements can be identified 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 used in connection with any discussion of the proposed senior unsecured note offering identify forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from these forward-looking statements.

The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. Although the Company believes that such expectations, assumptions, estimates and projections are reasonable, forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, many of which are outside of the Company’s control and could cause the Company’s actual results, performance or achievements to differ materially and adversely from any results, performance or achievements expressed or implied by such forward-looking statements.

Given these risks and uncertainties, undue reliance should not be placed on these forward-looking statements. These forward-looking statements are made only as of the date of this Current Report on Form 8-K. The Company does not undertake, and expressly disclaims, any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

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SIGNATURES

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 hereunto duly authorized.

 

				ACADIA HEALTHCARE COMPANY, INC.
Date: September 14, 2015				By:		/s/ Christopher L. Howard
						Christopher L. Howard
						Executive Vice President, Secretary and General Counsel

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press release, dated September 14, 2015 (Senior Note Offering)
99.2		Press release, dated September 14, 2015 (Tender Offer)
99.3		The section of the confidential offering memorandum entitled “Summary—Summary Historical Condensed Consolidated Financial Data and Unaudited Pro Forma Condensed Combined Financial Data.”
99.4		Unaudited Pro Forma Condensed Combined Financial Information

Exhibit 99.1

 

Contact:

Brent Turner

President

(615) 861-6000

Acadia Healthcare Announces Proposed $250 Million Senior Unsecured Debt Offering

FRANKLIN, Tenn. - September 14, 2015 - Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced that it is proposing to issue $250 million of its 5.625% senior notes due 2023 (the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Notes will be additional notes and form part of the same series as Acadia’s existing 5.625% senior notes due 2023.

The Company intends to use its proceeds from the offering to fund a cash tender offer for any and all of its outstanding 12.875% senior notes due 2018, repay outstanding indebtedness under its senior secured revolving line of credit, and use any remaining proceeds for general corporate purposes, including to fund acquisition activity.

The Notes are to be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States only to non-U.S. persons pursuant to Regulation S.

This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Forward-Looking Statements

This news release contains forward-looking statements. Generally words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” and “believe” or the negative of or other variation on these and other similar expressions identify forward-looking statements. These forward-looking statements are made only as of the date of this news release. The Company does not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are based on current expectations and involve risks and uncertainties.

About Acadia

Acadia is a provider of inpatient behavioral health services. Acadia operates a network of 232 behavioral health facilities with more than 9,400 beds in 37 states, the United Kingdom and Puerto Rico. Acadia provides psychiatric and chemical dependency services to its patients in a variety of settings, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.

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Exhibit 99.2

 

Contact:

Brent Turner

President

(615) 861-6000

Acadia Healthcare Commences Tender Offer

for Any and All of Its 12.875% Senior Notes Due 2018

FRANKLIN, Tenn. - September 14, 2015 - Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced that it has commenced a cash tender offer (the “Tender Offer”) for any and all of its outstanding 12.875% Senior Notes due 2018 (the “Notes”).

The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, September 18, 2015, unless extended or earlier terminated (such time, as may be extended, the “Expiration Time”). Holders who validly tender (and do not validly withdraw) their Notes prior to the Expiration Time will be eligible to receive $1,078 for each $1,000 principal amount of such tendered Notes. In addition to the purchase price, holders of Notes that are validly tendered and accepted for purchase will also receive accrued and unpaid interest to, but not including, the settlement date for the Tender Offer, which we currently expect to be September 21, 2015.

Tendered Notes may be withdrawn at any time at or prior to (i) the Expiration Time or (ii) if the Tender Offer is extended, the 10th business day after the commencement of the Tender Offer. Tendered Notes may also be withdrawn after the 60th business day after commencement of the Tender Offer if for any reason the Tender Offer has not been consummated within 60 business days after commencement of the Tender Offer. Completion of the Tender Offer is subject to certain market and other conditions, including the consummation of the concurrently announced financing transaction.

The Company intends to deliver a notice of redemption to redeem any Notes outstanding following the consummation of the Tender Offer that are not purchased pursuant to the Tender Offer.

The complete terms and conditions of the Tender Offer are described in the Offer to Purchase dated as of September 14, 2015, the related Letter of Transmittal and the Notice of Guaranteed Delivery, copies of which may be obtained from Ipreo LLC, the information agent and tender agent for the Tender Offer, at https://www.debtdomain.com/p/acadia/index.html, or by telephone at (212) 849-3880 (collect) or at (888) 593-9546 (toll-free).

The Company has retained Jefferies LLC and BofA Merrill Lynch to serve as the dealer managers for the Tender Offer. Questions regarding the Tender Offer may be directed to Jefferies LLC at Attn: Justin Polselli, (888) 708-5831 (toll-free), (212) 363-8273 (New York) and to BofA Merrill Lynch at Attn: Edward Stansky, (888) 292-0070 (toll-free), (980) 387-9534 (collect).

None of the Company, the trustee, the dealer managers or the information agent and tender agent make any recommendations as to whether holders should tender their Notes pursuant to the Tender Offer, and no one has been authorized by any of them to make such recommendations. Holders must make their own decisions as to whether to tender their Notes, and, if so, the principal amount of Notes to tender.

-MORE-

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ACHC Commences Tender Offer for Any and All

of Its 12.875% Senior Notes Due 2018

Page 2

September 14, 2015

 

This press release shall not constitute an offer to purchase or a solicitation of an offer to purchase or sell the Notes or any other securities, nor shall there be any purchase of the Notes in any state or jurisdiction in which such offer, solicitation or purchase would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The Tender Offer is being made solely pursuant to the Offer to Purchase dated as of September 14, 2015, the related Letter of Transmittal and the Notice of Guaranteed Delivery, which set forth the complete terms of the Tender Offer.

Forward-Looking Statements

This news release contains forward-looking statements. Generally words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” and “believe” or the negative of or other variation on these and other similar expressions identify forward-looking statements. These forward-looking statements are made only as of the date of this news release. The Company does not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are based on current expectations and involve risks and uncertainties.

About Acadia

Acadia is a provider of inpatient behavioral health services. Acadia operates a network of 232 behavioral health facilities with more than 9,400 beds in 37 states, the United Kingdom and Puerto Rico. Acadia provides psychiatric and chemical dependency services to its patients in a variety of settings, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.

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Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The tables below set forth the unaudited pro forma condensed combined financial data for Acadia Healthcare Company, Inc. (“Acadia”) giving effect to certain acquisitions and related financing transactions as further described below and give effect to each transaction as if it occurred on January 1, 2014. The unaudited pro forma condensed combined financial data is based on the assumption that Acadia will issue $250,000,000 of senior unsecured notes in this offering.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2014 combines the audited consolidated statement of operations of Acadia for the year ended December 31, 2014, the unaudited consolidated statement of operations of Partnerships in Care for the six months ended June 30, 2014, the audited consolidated statement of operations of CRC for the year ended December 31, 2014 and the unaudited consolidated statement of operations for other completed acquisitions for the period from January 1, 2014 to the earlier of the acquisition date or December 31, 2014.

The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2015 combines the unaudited consolidated statement of operations of Acadia for that period, the unaudited consolidated statement of operations of CRC for the period prior to February 11, 2015, the CRC acquisition date, and the unaudited consolidated statement of operations for other completed acquisitions for the periods prior to the respective acquisition dates.

The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2014 combines the unaudited consolidated statement of operations of Acadia for that period, the unaudited consolidated statement of operations for Partnerships in Care for the six months ended June 30, 2014, the unaudited statement of operations of CRC for the six months ended June 30, 2014 and the unaudited consolidated statement of operations for other completed acquisitions for the period from January 1, 2014 to the earlier of the acquisition date or June 30, 2014.

The unaudited pro forma condensed combined financial data has been prepared using the acquisition method of accounting for business combinations under GAAP. The adjustments necessary to fairly present the unaudited pro forma condensed combined financial data have been made based on available information and in the opinion of management are reasonable. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma condensed combined financial data.

The unaudited pro forma condensed combined financial data is for illustrative purposes only and does not purport to represent what our financial position or results of operations actually would have been had the events noted above in fact occurred on the assumed dates or to project our financial position or results of operations for any future date or future period.

The unaudited pro forma condensed combined financial data should be read in conjunction with the consolidated financial statements and notes thereto of Acadia, Partnerships in Care and CRC.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2014

(In thousands, except per share amounts)

 

		Acadia(1)				Partnerships in Care(5)				CRC(2)				Completed Acquisitions(3)				Pro Forma Adjustments				Notes				Pro Forma Combined
Revenue before provision for doubtful accounts		$	1,030,784			$	142,312			$	460,040			$	191,356											$	1,824,492
Provision for doubtful accounts			(26,183	)			3				—				(261	)			(7,872	)			(7	)			(34,313	)
Revenue			1,004,601				142,315				460,040				191,095				(7,872	)							1,790,179
Salaries, wages and benefits			575,412				84,641				227,692				106,424												994,169
Professional fees			52,482				6,737				40,551				10,636												110,406
Supplies			48,422				4,868				20,858				6,868												81,016
Rents and leases			12,201				909				17,538				5,985												36,633
Other operating expenses			110,654				11,644				51,517				16,225				(1,122	)			(11	)			188,918
Depreciation and amortization			32,667				11,731				21,290				7,601				(10,747	)			(8	)			62,542
Interest expense, net			48,221				43,084				72,718				1,435				(52,760	)			(9	)			112,698
Provision for doubtful accounts			—				—				7,872				—				(7,872	)			(7	)			—
Debt extinguishment costs			—				—				11,622				—												11,622
Gain on foreign currency derivatives			(15,262	)			—				—				—				15,262				(10	)			—
Goodwill and asset impairments			—				—				1,089				—												1,089
Transaction-related expenses			13,650				—				7,686				—				(21,336	)			(11	)			—
Total expenses			878,447				163,614				480,433				155,174				(78,575	)							1,599,093
Income (loss) from continuing operations before income taxes			126,154				(21,299	)			(20,393	)			35,921				70,703								191,086
Provision (benefit) for income taxes			42,922				30				6,576				8,981				2,639				(12	)			61,148
Income (loss) from continuing operations		$	83,232			$	(21,329	)		$	(26,969	)		$	26,940			$	68,064							$	129,938
Earnings per share—income (loss) from continuing operations:
Basic		$	1.51																							$	1.85
Diluted		$	1.50																							$	1.84
Weighted average shares:
Basic			55,063																15,214				(13	)			70,277
Diluted			55,327																15,214				(13	)			70,541

See accompanying notes to unaudited pro forma financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2015

(In thousands, except per share amounts)

 

		Acadia(1)				CRC(2)				Completed Acquisitions(4)				Pro Forma Adjustments				Notes				Pro Forma Combined
Revenue before provision for doubtful accounts		$	835,956			$	53,014			$	66,135											$	955,105
Provision for doubtful accounts			(16,513	)			—				(10	)			(1,206	)			(7	)			(17,729	)
Revenue			819,443				53,014				66,125				(1,206	)							937,376
Salaries, wages and benefits			449,173				31,288				39,831												520,292
Professional fees			52,456				5,136				3,687												61,279
Supplies			36,796				2,583				2,364												41,743
Rents and leases			14,097				2,023				1,600												17,720
Other operating expenses			91,655				5,708				5,277												102,640
Depreciation and amortization			28,030				2,459				2,852				(571	)			(8	)			32,770
Interest expense, net			50,195				8,883				862				(2,186	)			(9	)			57,754
Provision for doubtful accounts			—				1,206				—				(1,206	)			(7	)			—
Gain on foreign currency derivatives			908				—				—				(908	)			(10	)			—
Transaction-related expenses			25,573				1,712				—				(27,285	)			(11	)			—
Total expenses		$	748,883				60,998				56,473				(32,156	)							834,198
Income (loss) from continuing operations before income taxes			70,560				(7,984	)			9,652				30,950								103,178
Provision (benefit) for income taxes			22,125				(3,034	)			2,069				11,857				(12	)			33,017
Income (loss) from continuing operations		$	48,435			$	(4,950	)		$	7,583			$	19,093							$	70,161
Earnings per share—income (loss) from continuing operations:
Basic		$	0.74																			$	0.98
Diluted		$	0.74																			$	0.97
Weighted average shares:
Basic			65,429												6,529				(13	)			71,958
Diluted			65,782												6,529				(13	)			72,311

See accompanying notes to unaudited pro forma financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2014

(In thousands, except per share amounts)

 

		Acadia(1)				Partnerships in Care(5)				CRC(2)				Completed Acquisitions (3)				Pro Forma Adjustments				Notes				Pro Forma Combined
Revenue before provision for doubtful accounts		$	426,783			$	142,312			$	219,175			$	101,857											$	890,127
Provision for doubtful accounts			(11,562	)			3				—				(204	)			(3,432	)			(7	)			(15,195	)
Revenue			415,221				142,315				219,175				101,653				(3,432	)							874,932
Salaries, wages and benefits			240,048				84,641				104,362				56,741												485,792
Professional fees			21,273				6,737				19,355				5,555												52,920
Supplies			20,660				4,868				9,812				3,607												38,947
Rents and leases			5,658				909				8,377				3,413												18,357
Other operating expenses			47,756				11,644				23,721				8,779				(1,122	)			(11	)			90,778
Depreciation and amortization			11,371				11,731				10,316				4,003				(6,709	)			(8	)			30,712
Interest expense, net			19,437				43,084				36,476				810				(43,715	)			(9	)			56,092
Provision for doubtful accounts			—				—				3,432				—				(3,432	)			(7	)			—
Debt extinguishment costs			—				—				11,622				—												11,622
Gain on foreign currency derivatives			(13,735	)			—				—				—				13,735				(10	)			—
Goodwill and asset impairments			—				—				—				—												—
Transaction-related expenses			4,595				—				2,588				—				(7,183	)			(11	)			—
Total expenses			357,063				163,614				230,061				82,908				(48,426	)							785,220
Income (loss) from continuing operations before income taxes			58,158				(21,299	)			(10,886	)			18,745				44,994								89,712
Provision (benefit) for income taxes			22,680				30				3,511				4,756				(2,269	)			(12	)			28,708
Income (loss) from continuing operations		$	35,478			$	(21,329	)		$	(14,397	)		$	13,989			$	47,263							$	61,004
Earnings per share—income (loss) from continuing operations:
Basic		$	0.70																							$	0.86
Diluted		$	0.69																							$	0.86
Weighted average shares:
Basic			50,872																19,691				(13	)			70,563
Diluted			51,174																19,691				(13	)			70,865

See accompanying notes to unaudited pro forma financial information.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(In thousands, except per share amounts)

 

(1)	The amounts in this column represent, for Acadia, actual results for the periods presented.

(2)	The amounts in this column represent, for CRC, actual results for the periods presented prior to the acquisition date of February 11, 2015 based on financial information prepared and obtained from CRC management.

(3)

The amounts in this column represent pro forma adjustments for Acadia’s and CRC’s completed acquisitions of (a) Habit, (b) McCallum Place, (c) Quality Addiction Management, Inc. (“QAM”), (d) three facilities from Choice Lifestyles (“Choice”), (e) Pastoral Care Group (“Pastoral”), (f) Mildmay Oaks, (g) 15 facilities from Care UK Limited (“Care UK”), (h) Belmont, (i) H&SCP and (j) Danshell (none of which were individually material) up to the respective acquisition dates based on financial information prepared and obtained from the respective companies.

(4)	The amounts in this column represent pro forma adjustments for Acadia’s completed acquisitions of (a) QAM, (b) Choice, (c) Pastoral, (d) Mildmay Oaks, (e) Care UK, (f) Belmont, (g) H&SCP and (h) Danshell (none of which were individually material) up to the respective acquisition dates.

(5)

The historical financial statements of Partnerships in Care are prepared in accordance with U.K. GAAP and are adjusted to: (i) reconcile the financial statements to U.S. GAAP and (ii) translate the financial statements to U.S. dollars based on the historical exchange rates below. The Partnerships in Care financial statements have been reclassified to conform to Acadia’s financial statement presentation.

 

				GBP/USD
Six months ended June 30, 2014		Average Rate		$	1.6687

The amounts below represent results for the six months ended June 30, 2014.

 

		Partnerships in Care (in £, in U.K. GAAP)				U.S. GAAP Adjustments				Notes				Partnerships in Care (in £, in U.S. GAAP)				Partnerships in Care (in $, in U.S. GAAP)
Revenue before provision for doubtful accounts		£	85,283			£								£	85,283			$	142,312
Provision for doubtful accounts			2												2				3
Revenue			85,285												85,285				142,315
Salaries, wages and benefits			51,601				(878	)			(6	)			50,723				84,641
Professional fees			4,037												4,037				6,737
Supplies			2,917												2,917				4,868
Rents and leases			545												545				909
Other operating expenses			6,978												6,978				11,644
Depreciation and amortization			5,991				1,039				(6	)			7,030				11,731
Interest expense, net			31,979				(6,160	)			(6	)			25,819				43,084
Transaction-related expenses			—												—				—
Total expenses			104,048				(5,999	)							98,049				163,614
(Loss) income from continuing operations before income taxes			(18,763	)			5,999								(12,764	)			(21,299	)
(Benefit) provision for income taxes			(1,063	)			1,081				(6	)			18				30
Loss from continuing operations		£	(17,700	)		£	4,918							£	(12,782	)		$	(21,329	)

 

(6)

Reflects adjustments to reconcile U.K. GAAP to U.S. GAAP including (i) a property and equipment impairment charge and related depreciation expense adjustment, which would not have been recorded under U.S. GAAP; (ii) amortization of an interest rate swap, which would not have been recorded under U.S.

 

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GAAP; (iii) a share-based payment charge, which would not have been recorded under U.S. GAAP; and (iv) the tax impact of the previous adjustments.

(7)	Reflects reclassification of CRC provision for doubtful accounts to conform to Acadia historical presentation.

(8)	Represents the adjustments to depreciation and amortization expense as a result of recording the property and equipment and intangible assets at preliminary estimates of fair value as of the date of the acquisitions, as follows:

 

		Amount				Useful Lives (in years)				Monthly Depreciation				Year Ended December 31, 2014				Six Months Ended June 30, 2015				Six Months Ended June 30, 2014
Partnerships in Care:
Land		$	72,086				N/A			$	—			$	—			$	—			$	—
Building and improvements			437,195				30-50				1,046				6,275				—				6,275
Equipment			18,909				3-10				354				2,127				—				2,127
			528,190								1,400				8,402				—				8,402
Indefinite-lived intangible assets			651				N/A				—				—				—				—
			651								—				—				—				—
Partnerships in Care depreciation and amortization expense															8,402				—				8,402
CRC:
Land		$	24,597				N/A			$	—			$	—			$	—			$	—
Building and improvements			88,312				10-40				575				6,900				939				3,450
Equipment			24,110				3-10				581				6,972				949				3,486
Construction in progress			3,133				N/A				—				—				—				—
			140,152								1,156				13,872				1,888				6,936
Indefinite-lived intangible assets			37,000				N/A				—				—				—				—
			37,000								—				—				—				—
CRC depreciation and amortization expense															13,872				1,888				6,936
Total depreciation and amortization expense															22,274				1,888				15,338
Less: historical depreciation and amortization expense of Partnerships in Care															(11,731	)			—				(11,731	)
Less: historical depreciation and amortization expense of CRC															(21,290	)			(2,459	)			(10,316	)
Depreciation and amortization expense adjustment														$	(10,747	)		$	(571	)		$	(6,709	)

 

6

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(9)	Represents an adjustment to interest expense to give effect to the following transactions:

 

		Year Ended December 31, 2014				Six Months Ended June 30, 2015				Six Months Ended June 30, 2014
Interest related to 5.125% Senior Notes due 2022		$	7,688			$	—			$	7,688
Interest related to 5.625% Senior Notes due 2023 issued February 2015			21,094				2,871				10,547
Interest related to new 5.625% Senior Notes			14,063				7,032				7,032
Interest related to paydown of 12.875% Senior Notes			(12,553	)			(6,277	)			(6,277	)
Interest related to Term Loan A			8,225				—				4,113
Interest related to Term Loan B			21,250				2,892				10,625
Interest related to change in the applicable interest rate on term A loans based on Acadia’s consolidated leverage ratio			1,141				285				571
Interest related to revolving line of credit paydown, net of borrowing			(105	)			33				239
Interest related to amortization of deferred financing costs			3,674				723				2,117
Less: historical interest expense of Partnerships in Care			(43,084	)			—				(43,084	)
Less: historical interest expense of CRC			(72,718	)			(8,883	)			(36,476	)
Less: historical interest expense of other completed acquisitions			(1,435	)			(862	)			(810	)
Interest expense adjustment		$	(52,760	)		$	(2,186	)		$	(43,715	)

An increase or decrease of 0.125% in the interest rate of 5.625% for the new unsecured senior notes would result in a change of $0.3 million, $0.2 million and $0.2 million for the year ended December 31, 2014 and the six months ended June 30, 2015 and 2014, respectively.

 

(10)

Represents adjustments to eliminate the gain on foreign currency derivatives, which are related to the acquisition of Partnerships in Care on July 1, 2014, the acquisitions of two facilities from Choice Lifestyles, Pastoral and Mildmay Oaks on April 1, 2015 and the acquisitions of Care UK and one facility from Choice Lifestyles on June 1, 2015.

(11)	Represents adjustments to eliminate transaction-related expenses incurred by Acadia, Partnerships in Care, Habit and CRC related to the acquisitions.

(12)	Reflects adjustments to income taxes to reflect the impact of the above pro forma adjustments applying combined U.S. federal and state statutory tax rates and U.K. statutory rates.

(13)

Represents adjustments to weighted average shares used to compute basic and diluted earnings per share to reflect the effect of 8,881,794 shares of common stock issued by Acadia in June 2014, 5,975,326 shares of common stock issued by Acadia on February 11, 2015 related to the acquisition of CRC and 5,175,000 shares of common stock issued on May 11, 2015.

 

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