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)) |
| 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 |
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 | |
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.
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 | ||||||
EXHIBIT INDEX
| Exhibit |
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.
- END -
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-
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.
- END -
Exhibit 99.3
SUMMARY HISTORICAL CONDENSED CONSOLIDATED FINANCIAL DATA AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The table below sets forth:
| • | our summary historical condensed consolidated financial data for the periods ended and at the dates indicated; and |
| • | the unaudited pro forma condensed combined financial data for Acadia giving effect to acquisitions completed by Acadia, including Acadia’s acquisition of CRC and Partnerships in Care, and the offering of new notes described in this offering memorandum. |
We have derived the historical condensed consolidated financial data for each of the three years in the period ended December 31, 2014 from our audited consolidated financial statements incorporated by reference in this offering memorandum from our Annual Report on Form 10-K for the year ended December 31, 2014. We have derived the summary condensed consolidated financial data as of and for the six months ended June 30, 2014 and June 30, 2015 from our unaudited interim condensed consolidated financial statements incorporated by reference in this offering memorandum from our Quarterly Report on Form 10-Q for the six months ended June 30, 2015. The unaudited financial statements were prepared on a basis consistent with our audited financial statements and include, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the financial information in those statements. The results for the six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year.
The summary unaudited pro forma condensed combined financial information below as of and for the year ended December 31, 2014 and as of and for the twelve months ended June 30, 2015 gives pro forma effect, in each case as if they occurred on January 1, 2014, to the offering of new notes described in this offering memorandum and acquisitions completed by Acadia, including Acadia’s acquisition of CRC and Partnerships in Care.
1
The summary historical condensed consolidated financial data below should be read in conjunction with pro forma financial statements we have filed with the SEC on behalf of Acadia and in connection with our acquisitions of CRC and Partnerships in Care and the consolidated financial statements and the notes thereto of Acadia, CRC and Partnerships in Care included in, or incorporated by reference into, this offering memorandum.
| Year Ended December 31, |
Pro Forma December 31, |
Six Months Ended June 30, |
Twelve Months June 30, |
Pro Forma June 30, |
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| 2012 |
2013 |
2014 |
2014 |
2015 |
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| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||
| Income Statement Data: |
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| Revenue before provision for doubtful accounts |
$ | 413,850 | $ | 735,109 | $ | 1,030,784 | $ | 1,824,492 | $ | 426,783 | $ | 835,956 | $ | 1,439,957 | $ | 1,889,470 | ||||||||||||||||
| Provision for doubtful accounts |
(6,389 | ) | (21,701 | ) | (26,183 | ) | (34,313 | ) | (11,562 | ) | (16,513 | ) | (31,134 | ) | (36,847 | ) | ||||||||||||||||
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| Revenue |
407,461 | 713,408 | 1,004,601 | 1,790,179 | 415,221 | 819,443 | 1,408,823 | 1,852,623 | ||||||||||||||||||||||||
| Salaries, wages and benefits(1) |
239,639 | 407,962 | 575,412 | 994,169 | 240,048 | 449,173 | 784,537 | 1,028,669 | ||||||||||||||||||||||||
| Professional fees |
19,019 | 37,171 | 52,482 | 110,406 | 21,273 | 52,456 | 83,665 | 118,765 | ||||||||||||||||||||||||
| Other operating expenses |
70,111 | 128,190 | 171,277 | 306,567 | 74,074 | 142,548 | 239,751 | 320,588 | ||||||||||||||||||||||||
| Depreciation and amortization |
7,982 | 17,090 | 32,667 | 62,542 | 11,371 | 28,030 | 49,326 | 64,600 | ||||||||||||||||||||||||
| Interest expense, net |
29,769 | 37,250 | 48,221 | 112,698 | 19,437 | 50,195 | 78,979 | 114,360 | ||||||||||||||||||||||||
| Debt extinguishment costs |
— | 9,350 | — | 11,622 | — | — | — | — | ||||||||||||||||||||||||
| (Gain) loss on foreign currency derivatives |
— | — | (15,262 | ) | — | (13,735 | ) | 908 | (619 | ) | — | |||||||||||||||||||||
| Transaction-related expenses |
8,112 | 7,150 | 13,650 | — | 4,595 | 25,573 | 34,628 | — | ||||||||||||||||||||||||
| Goodwill and asset impairments |
— | — | — | 1,089 | — | — | — | 1,089 | ||||||||||||||||||||||||
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| Income from continuing operations, before income taxes |
32,829 | 69,245 | 126,154 | 191,086 | 58,158 | 70,560 | 138,556 | 204,552 | ||||||||||||||||||||||||
| Income tax provisions |
12,325 | 25,975 | 42,922 | 61,148 | 22,680 | 22,125 | 42,367 | 65,457 | ||||||||||||||||||||||||
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| Income from continuing operations |
20,504 | 43,270 | 83,232 | 129,938 | 35,478 | 48,435 | 96,189 | 139,095 | ||||||||||||||||||||||||
| Income (loss) from discontinued operations, net of income taxes |
(101 | ) | (691 | ) | (192 | ) | (4,663 | ) | 31 | 3 | (220 | ) | (1,509 | ) | ||||||||||||||||||
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| Net income |
$ | 20,403 | $ | 42,579 | $ | 83,040 | $ | 125,275 | $ | 35,509 | $ | 48,438 | $ | 95,969 | $ | 137,586 | ||||||||||||||||
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| Other Financial Data: |
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| Pro forma EBITDA(2) |
366,326 | 383,512 | ||||||||||||||||||||||||||||||
| Pro forma adjusted EBITDA(3) |
423,882 | 433,847 | ||||||||||||||||||||||||||||||
| Cash interest expense(4) |
101,241 | 102,485 | ||||||||||||||||||||||||||||||
| Ratio of pro forma net debt to pro forma adjusted EBITDA(3)(5) |
4.73 | x | ||||||||||||||||||||||||||||||
| Ratio of pro forma adjusted EBITDA to pro forma cash interest expense(3)(4) |
4.23 | x | ||||||||||||||||||||||||||||||
2
| As of June 30, 2015 |
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| Actual |
As Adjusted(6) |
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| (Unaudited) | ||||||||
| (In thousands) | ||||||||
| Unaudited As Adjusted Condensed Combined Balance Sheet Data |
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| Cash and cash equivalents |
$ | 34,572 | $ | 55,592 | ||||
| Total assets |
3,926,385 | 3,927,803 | ||||||
| Total debt |
1,953,207 | 2,106,674 | ||||||
| Total stockholders’ equity |
$ | 1,666,304 | 1,656,950 | |||||
| (1) | Salaries, wages and benefits include equity-based compensation expense of $2.3 million, $5.2 million, $10.1 million, $4.2 million and $9.2 million for the years ended December 31, 2012, 2013 and 2014, and the six months ended June 30, 2014 and 2015, respectively. |
| (2) | Pro forma EBITDA and pro forma adjusted EBITDA are reconciled to pro forma net income in the table below. Pro forma EBITDA and pro forma adjusted EBITDA are financial measures not recognized under GAAP. When presenting non-GAAP financial measures, we are required to reconcile the non-GAAP financial measures with the most directly comparable GAAP financial measure or measures. We define pro forma EBITDA as pro forma net income adjusted for loss (income) from discontinued operations, net interest expense, income tax provision and depreciation and amortization. We define pro forma adjusted EBITDA as pro forma EBITDA adjusted for equity-based compensation expense, debt extinguishment costs, transaction-related expenses and other non-recurring costs. See the table and related footnotes below for additional information. |
| (3) | We present pro forma adjusted EBITDA because it is a measure management uses to assess financial performance. We believe that companies in our industry use measures of pro forma EBITDA as common performance measurements. We also believe that securities analysts, investors and other interested parties frequently use measures of pro forma EBITDA as financial performance measures and as indicators of ability to service debt obligations. While providing useful information, measures of pro forma EBITDA, including pro forma adjusted EBITDA, should not be considered in isolation or as a substitute for consolidated statement of operations and cash flows data prepared in accordance with GAAP and should not be construed as an indication of a company’s operating performance or as a measure of liquidity. Pro forma adjusted EBITDA may have material limitations as a performance measure because it excludes items that are necessary elements of our costs and operations. In addition, “EBITDA,” “Adjusted EBITDA” or similar measures presented by other companies may not be comparable to our presentation, because each company may define these terms differently. See “Non-GAAP Financial Measures.” |
| (4) | Cash interest expense is defined as pro forma interest expense excluding amortization of financing fees and original issue discount. |
| (5) | Net debt is defined as total debt less cash and cash equivalents. |
| (6) | Adjusted to give effect to this offering, after deducting estimated initial purchasers’ discounts and commissions and estimated offering expenses payable by us and the use of proceeds to repay certain debt, assuming that the transactions closed on June 30, 2015. See “Unaudited Pro Forma Condensed Combined Financial Information.” |
3
| Twelve Months June 30, 2015 |
Pro Forma Ended |
Pro Forma Year Ended December 31, 2014 |
Pro Forma June 30, 2015 |
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| 2014 |
2015 |
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| (Unaudited) | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Reconciliation of Income from continuing operations to Adjusted EBITDA |
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| Income from continuing operations |
$ | 96,189 | $ | 61,004 | $ | 70,161 | $ | 129,938 | $ | 139,095 | ||||||||||
| Interest expense, net |
78,979 | 56,092 | 57,754 | 112,698 | 114,360 | |||||||||||||||
| Income tax provision |
42,367 | 28,708 | 33,017 | 61,148 | 65,457 | |||||||||||||||
| Depreciation and amortization |
49,326 | 30,712 | 32,770 | 62,542 | 64,600 | |||||||||||||||
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| EBITDA |
$ | 266,861 | $ | 176,516 | $ | 193,702 | $ | 366,326 | $ | 383,512 | ||||||||||
| Adjustments: |
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| Equity based compensation(a) |
15,137 | 5,721 | 15,399 | 24,304 | 33,982 | |||||||||||||||
| Transaction related expenses(b) |
34,628 | — | — | — | — | |||||||||||||||
| Debt extinguishment costs(c) |
— | 11,622 | — | 11,622 | — | |||||||||||||||
| Gain on foreign currency derivative(d) |
(619 | ) | — | — | — | — | ||||||||||||||
| Management fees(e) |
— | 1,220 | 226 | 2,270 | 1,276 | |||||||||||||||
| Goodwill and asset impairment(f) |
— | — | — | 1,089 | 1,089 | |||||||||||||||
| (Gain) loss on asset disposals(g) |
— | 295 | 22 | 1,546 | 1,273 | |||||||||||||||
| Legal settlement costs(h) |
— | 138 | — | 146 | 8 | |||||||||||||||
| Restructuring savings(i) |
— | 1,069 | — | 1,069 | — | |||||||||||||||
| Habit acquisition synergies(j) |
— | 510 | — | 510 | — | |||||||||||||||
| Cost synergy savings(k) |
— | 7,500 | 5,207 | 15,000 | 12,707 | |||||||||||||||
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| Adjusted EBITDA |
$ | 316,007 | $ | 204,591 | $ | 214,556 | $ | 423,882 | $ | 433,847 | ||||||||||
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| (a) | Represents the equity based compensation expense of Acadia of $15,137, $4,170, $9,249, and $10,058 and CRC of $18,845, $1,551, $6,150 and $14,246 for the twelve months ended June 30, 2015, the six months ended June 30, 2014 and 2015 and the year ended December 31, 2014. |
| (b) | Represents transaction related expenses for Acadia of $34,628 for the twelve months ended June 30, 2015. |
| (c) | Represents debt extinguishment costs related to CRC March 28, 2014 refinancing. |
| (d) | Represents the change in fair value of foreign currency derivatives purchased by Acadia related to its acquisition of Partnerships in Care on July 1, 2014 and United Kingdom acquisitions that occurred on April 1 and June 1, 2015. |
| (e) | Represents management fees paid by CRC to its private equity investor that were eliminated in connection with the acquisition of CRC. |
| (f) | Represents non-cash impairment of goodwill and other long-lived assets recorded by CRC. |
| (g) | Represents non-cash gains and losses incurred by CRC on disposal of assets of $295 ($308 of losses and $13 of gains), $22 of losses, $1,546 ($1,560 of losses and $13 of gains) and $1,273 of losses for the six months ended June 30, 2014 and 2015, the year ended December 31, 2014 and the twelve months ended June 30, 2015, respectively. |
| (h) | Represents legal settlement costs and legal fees incurred by CRC primarily related to the investigation by the Office of the Attorney General of the State of Tennessee at its New Life Lodge facility. Costs and expected settlement amounts were accrued in 2013 and the settlement was finalized and paid in April 2014. |
| (i) | Represents the costs savings associated with CRC’s restructuring of its corporate office in the first quarter of 2014 and the restructuring of its youth services in 2014 as if the restructuring occurred on January 1, 2014. These costs savings synergies related primarily to headcount reductions in youth programs as well as to the reduction of other corporate overhead expenses. |
| (j) | Represents the cost savings synergies associated with CRC’s acquisition of Habit Holdings, Inc., or Habit, of $510, which is reflected as an adjustment for the period prior to the March 1, 2014 acquisition date and pro-rated for the year ended December 31, 2014 and six months ended June 30, 2014. |
4
| (k) | Represents the pro forma effect of cost savings synergies associated with our acquisition of CRC of approximately $15,000 on a pro forma basis for the year ended December 31, 2014 and pro-rated for the six months ended June 30, 2014. For the six months ended June 30, 2015, the amount represents the amount of cost savings on a pro forma basis for the six months ended June 30, 2015 less actual savings realized subsequent to the CRC acquisition date and reflected in our historical financials for the six months ended June 30, 2015. These cost savings synergies relate primarily to headcount reductions as well as to the reduction in certain professional and outside service fees across various departments and other general and administrative expenses. The actual relative proportion of synergies achieved through workforce reductions and on-headcount savings could differ materially from these estimates. Actual cost savings, the costs required to realize the cost savings and the source of the costs savings could differ materially from these estimates, and we cannot assure you that we will achieve the full amount of costs savings on the schedule anticipated or at all. See “Risk Factors—If we are unable to successfully integrate CRC into our business, our business, financial condition and results of operations may be negatively impacted.” |
We may not be able to achieve all of the expected benefits from the synergies and cost savings described in the table above. This information is inherently uncertain and is not intended to represent what our financial position or results of operations might be for any future period. See “Risk Factors—Our acquisition strategy exposes us to a variety of operation and financial risks—Benefits may not materialize.”
5
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.
1
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 |
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.
2
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.
3
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 |
$ | 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 |
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.
4
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 |
U.S. GAAP Adjustments |
Notes |
Partnerships 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. |
5
| 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 2015 |
Six Months Ended 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
| (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 | ) | ||||||
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| Interest expense adjustment |
$ | (52,760 | ) | $ | (2,186 | ) | $ | (43,715 | ) | |||
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|
|
|
|
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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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