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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): July 29, 2016



Acadia Healthcare Company, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware

001-35331

46-2492228

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)


6100 Tower Circle, Suite 1000
(Address of Principal Executive Offices)

(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:

⃞ 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 2.02          Results of Operations and Financial Condition.

On July 29, 2016, Acadia Healthcare Company, Inc. (“Acadia”) issued a press release announcing, among other things, Acadia’s operating and financial results for the second quarter and six months ended June 30, 2016. The press release is furnished herewith as Exhibit 99 hereto and is incorporated herein by reference.

Item 9.01          Financial Statements and Exhibits.

(d)                      Exhibits.

99                       Press Release of Acadia Healthcare Company, Inc., dated July 29, 2016.

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: July 29, 2016 By:

/s/ Christopher L. Howard

Christopher L. Howard

Executive Vice President and

General Counsel

EXHIBIT INDEX

Exhibit

 

No.

Description

 
99

Press Release of Acadia Healthcare Company, Inc., dated July 29, 2016

Exhibit 99

Acadia Healthcare Reports Second Quarter GAAP EPS of $0.65 and Adjusted EPS of $0.73, up 28.1%

Revenue Increase of 66.8% to $756.5 Million Includes 8.1% Growth in Same Facility Revenue

Adjusts Financial Guidance for 2016

FRANKLIN, Tenn.--(BUSINESS WIRE)--July 29, 2016--Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the second quarter and six months ended June 30, 2016. Revenue for the quarter increased 66.8% to $756.5 million from $453.7 million for the second quarter of 2015. Income from continuing operations attributable to Acadia stockholders was $56.4 million, or $0.65 per diluted share, compared with $33.8 million, or $0.49 per diluted share, for the second quarter of 2015. Adjusted income from continuing operations attributable to Acadia stockholders grew 60.0% to $63.2 million for the second quarter of 2016 from $39.5 million for the second quarter of 2015, and adjusted EPS increased 28.1% to $0.73 from $0.57. Weighted average diluted shares outstanding increased 26.4% for the second quarter of 2016 from the second quarter of 2015, primarily due to the issuance of common stock in May 2015, the net proceeds of which were primarily used to fund acquisitions, and in January and February 2016 related to the acquisition of Priory Group. A reconciliation of all non-GAAP financial results in this release appears on pages 8 and 9.

For the first six months of 2016, revenue was $1.4 billion, an increase of 67.6% from $819.4 million for the first six months of 2015. Income from continuing operations attributable to Acadia stockholders was $82.1 million, or $0.97 per diluted share, compared with $48.4 million, or $0.74 per diluted share, for the first six months of 2015. Adjusted income from continuing operations attributable to Acadia stockholders was $109.0 million for the first half of 2016, an increase of 63.7% from $66.6 million for the same period of 2015, and adjusted EPS increased 26.7% to $1.28 from $1.01. Weighted average diluted shares outstanding increased 29.3% for the first six months of 2016 from the first six months of 2015.

“Acadia continued its strong earnings momentum in the second quarter, with 28.1% growth in adjusted EPS on a 26.4% increase in shares outstanding,” commented Joey Jacobs, Chairman and Chief Executive Officer of Acadia. “This growth reflected a substantial increase in our beds during the last 12 months, primarily due to the completion of the Priory Group acquisition in the first quarter of 2016, which brought Acadia approximately 7,100 beds in 324 inpatient facilities. In total, we added approximately 8,800 beds and 369 inpatient behavioral healthcare facilities during this 12-month period. Approximately 680 of these beds were additions to existing facilities and 260 were added through three de novo acute inpatient facilities.

“During the second quarter, we added 125 new beds to existing facilities in the U.S. and U.K. and 60 beds through opening one de novo facility. We also completed three acquisitions with approximately 240 aggregate beds. The acquisitions included Trust Point Hospital, a 100-bed acute inpatient psychiatric facility in Murfreesboro, Tennessee, and two addiction treatment residential facilities: the 108-bed Pocono Mountain Recovery Center in Henryville, Pennsylvania, and 30-bed Serenity Knolls in Forrest Knolls, California. In addition, we added two comprehensive treatment centers during the quarter, one acquisition and one de novo. We continue to believe that the growth in our beds positions Acadia well to produce further significant profitable growth in 2016 and beyond.”

In addition to the impact of acquisitions, the Company’s revenue growth for the second quarter of 2016 reflected an increase in same facility revenue of 8.1% compared with the second quarter of 2015. Contributing to this increase, patient days expanded 7.7% for the quarter and revenue per patient day increased 0.4%. This increase was primarily due to new beds added to facilities in the same facility base, complemented by continuing initiatives at our facilities to grow their revenue. The operating leverage created by this revenue growth drove a 70 basis point improvement in consolidated same facility EBITDA margin to 28.1% versus 27.4% for the second quarter last year. Acadia’s consolidated adjusted EBITDA rose 62.8% to $172.2 million for the second quarter from $105.8 million for the same quarter last year, with consolidated adjusted EBITDA margin of 22.8% and 23.3%, respectively.

Acadia completed the second quarter of 2016 with $30.7 million in cash and cash equivalents. Net cash provided by continuing operations increased 74.6% for the second quarter to $126.5 million compared with the second quarter of 2015. At the end of the second quarter, the Company had significant availability under its $300 million revolving credit facility and its leverage ratio at June 30, 2016 was approximately 5.3.

Yesterday, the Competition and Markets Authority (“CMA”) in the U.K. announced that it is considering Acadia’s undertakings to address the CMA’s concerns about competition in the provision of behavioral healthcare services in certain markets related to Acadia’s acquisition of Priory Group. As a result, and in lieu of a phase 2 investigation, Acadia intends to sell 19 of its U.K. healthcare facilities with approximately 750 beds. These facilities produced aggregate annual revenues of approximately $132 million and adjusted EBITDA of $39 million, before any overhead allocation and assuming an exchange rate of $1.30 per British Pound Sterling.

Acadia today updated its guidance for 2016 adjusted earnings per diluted share to $2.63 to $2.65, primarily as a result of the recent decline in the U.S. Dollar/British Pound Sterling exchange rate, as well as the delay in realizing cost synergies from the Priory Group transaction until the undertakings are approved and accepted by the CMA. Acadia’s guidance assumes an exchange rate of $1.30 per British Pound Sterling for the second half of 2016 and a tax rate of 23%. The Company’s guidance does not include any cost synergies in 2016 from the Priory Group transaction, the impact of any future acquisitions or transaction-related expenses.

Acadia will hold a conference call to discuss its second quarter financial results at 11:00 a.m. Eastern Time on Friday, July 29, 2016. A live webcast of the conference call will be available at www.acadiahealthcare.com in the “Investors” section of the website. The webcast of the conference call will be available through August 12, 2016.

Risk Factors

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. We do 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 and our future results could differ significantly from those expressed or implied by our forward-looking statements. Factors that may cause actual results to differ materially include, without limitation, (i) the CMA’s acceptance of our undertakings to address its concerns relating to the Priory transaction, (ii) our ability to divest Priory facilities and fulfill our undertakings to the CMA on acceptable terms and within expected timeframes; (iii) potential difficulties operating our business in light of political and economic instability in the U.K. and globally following the referendum in the U.K. on June 23, 2016, in which voters approved an exit from the European Union, or Brexit; (iv) the impact of fluctuations in foreign exchange rates, including the recent devaluation of the GBP relative to the USD following the Brexit vote; (v) Acadia’s ability to complete acquisitions and successfully integrate the operations of acquired facilities, including Priory facilities; (vi) Acadia’s ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (vii) potential reductions in payments received by Acadia from government and third-party payors; (viii) the occurrence of patient incidents, which could adversely affect the price of our common stock and result in incremental regulatory burdens and governmental investigations; (ix) the risk that Acadia may not generate sufficient cash from operations to service its debt and meet its working capital and capital expenditure requirements; and (x) potential operating difficulties, client preferences, changes in competition and general economic or industry conditions that may prevent Acadia from realizing the expected benefits of its business strategy. These factors and others are more fully described in Acadia’s periodic reports and other filings with the SEC.

About Acadia

Acadia is a provider of inpatient behavioral healthcare services. Acadia operates a network of 591 behavioral healthcare facilities with approximately 17,800 beds in 39 states, the United Kingdom and Puerto Rico. Acadia provides behavioral health and addiction services to its patients in a variety of settings, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.

             
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
 
Three Months Ended June 30, Six Months Ended June 30,
  2016     2015     2016     2015  
(In thousands, except per share amounts)
 
Revenue before provision for doubtful accounts $ 767,054 $ 461,798 $ 1,394,237 $ 835,956
Provision for doubtful accounts   (10,506 )   (8,138 )   (20,876 )   (16,513 )
Revenue 756,548 453,660 1,373,361 819,443
 

Salaries, wages and benefits (including equity-based compensation expense of $6,888, $5,355, $13,844 and $9,249, respectively)

408,287 243,302 749,315 449,173
Professional fees 50,292 30,029 90,283 52,456
Supplies 31,209 20,542 57,894 36,796
Rents and leases 20,467 8,211 35,273 14,097
Other operating expenses 80,955 51,128 151,202 91,655
Depreciation and amortization 36,752 14,926 64,727 28,030
Interest expense, net 48,758 28,049 86,472 50,195
(Gain) loss on foreign currency derivatives (98 ) 961 (508 ) 908
Transaction-related expenses   6,074     7,157     32,372     25,573  
Total expenses   682,696     404,305     1,267,030     748,883  
Income from continuing operations before income taxes 73,852 49,355 106,331 70,560
Provision for income taxes   18,261     15,512     25,371     22,125  
Income from continuing operations 55,591 33,843 80,960 48,435

Income from discontinued operations, net of income taxes

  -     1     -     3  
Net income 55,591 33,844 80,960 48,438

Net loss attributable to noncontrolling interests

  854     -     1,173     -  

Net income attributable to Acadia Healthcare Company, Inc.

$ 56,445   $ 33,844   $ 82,133   $ 48,438  
 

Basic earnings attributable to Acadia Healthcare Company, Inc. stockholders:

Income from continuing operations $ 0.65 $ 0.50 $ 0.97 $ 0.74
Income from discontinued operations   -     -     -     -  
Net income $ 0.65   $ 0.50   $ 0.97   $ 0.74  
 

Diluted earnings attributable to Acadia Healthcare Company, Inc. stockholders:

Income from continuing operations $ 0.65 $ 0.49 $ 0.97 $ 0.74
Income from discontinued operations   -     -     -     -  
Net income $ 0.65   $ 0.49   $ 0.97   $ 0.74  
 
Weighted-average shares outstanding:
Basic 86,553 68,296 84,748 65,429
Diluted 86,876 68,735 85,052 65,782
       
Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 
 

 

June 30,

2016

December 31,

2015

(In thousands)
 
ASSETS
Current assets:
Cash and cash equivalents $ 30,716 $ 11,215
Accounts receivable, net of allowance for doubtful accounts of

$36,246 and $29,332, respectively

285,132 216,626
Other current assets   76,519     66,895  
Total current assets 392,367 294,736
Property and equipment, net 3,274,540 1,709,053
Goodwill 2,832,201 2,128,215
Intangible assets, net 84,996 59,575
Deferred tax assets - noncurrent 17,929 49,114
Derivative instruments 40,459 -
Other assets   42,007     38,515  
Total assets $ 6,684,499   $ 4,279,208  
 
 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt $ 73,410 $ 45,360
Accounts payable 108,211 91,341
Accrued salaries and benefits 113,392 80,696
Other accrued liabilities   124,788     72,806  
Total current liabilities 419,801 290,203
Long-term debt 3,578,383 2,195,384
Deferred tax liabilities - noncurrent 85,526 23,936
Other liabilities   151,628     78,602  
Total liabilities 4,235,338 2,588,125
Redeemable noncontrolling interests 12,881 8,055
Equity:
Common stock 865 707
Additional paid-in capital 2,481,897 1,572,972
Accumulated other comprehensive loss (342,611 ) (104,647 )
Retained earnings   296,129     213,996  
Total equity   2,436,280     1,683,028  
Total liabilities and equity $ 6,684,499   $ 4,279,208  
 
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
       
Six Months Ended June 30,
  2016     2015  
(In thousands)
 
Operating activities:
Net income $ 80,960 $ 48,438
Adjustments to reconcile net income to net cash provided by continuing operating activities:
Depreciation and amortization 64,727 28,030
Amortization of debt issuance costs 4,956 3,218
Equity-based compensation expense 13,844 9,249
Deferred income tax expense 16,821 24,682
Income from discontinued operations, net of taxes - (3 )
(Gain) loss on foreign currency derivatives (508 ) 908
Other 704 692
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (18,982 ) (10,442 )
Other current assets (7,256 ) (13,048 )
Other assets 1,582 (1,218 )
Accounts payable and other accrued liabilities 29,101 (4,313 )
Accrued salaries and benefits (3,846 ) (225 )
Other liabilities   3,728     4,619  
Net cash provided by continuing operating activities 185,831 90,587
Net cash (used in) provided by discontinued operating activities   (2,973 )   554  
Net cash provided by operating activities 182,858 91,141
 
Investing activities:
Cash paid for acquisitions, net of cash acquired (683,285 ) (286,734 )
Cash paid for capital expenditures (177,718 ) (122,035 )
Cash paid for real estate acquisitions (28,439 ) (3,428 )
Settlement of foreign currency derivatives 508 (908 )
Other   (1,084 )   (481 )
Net cash used in investing activities (890,018 ) (413,586 )
 
Financing activities:
Borrowings on long-term debt 1,480,000 875,000
Borrowings on revolving credit facility 158,000 180,000
Principal payments on revolving credit facility (166,000 ) (180,000 )
Principal payments on long-term debt (29,869 ) (15,875 )
Repayment of assumed debt (1,348,389 ) (904,467 )
Payment of debt issuance costs (35,511 ) (22,775 )
Issuance of common stock, net 685,097 331,530
Common stock withheld for minimum statutory taxes, net (7,365 ) (7,826 )
Excess tax benefit from equity awards - 6,327
Other   (823 )   (150 )
Net cash provided by financing activities   735,140     261,764  
   
Effect of exchange rate changes on cash   (8,479 )   1,213  
 
Net increase (decrease) in cash and cash equivalents 19,501 (59,468 )
Cash and cash equivalents at beginning of the period   11,215     94,040  
Cash and cash equivalents at end of the period $ 30,716   $ 34,572  

 

 

Effect of acquisitions:
Assets acquired, excluding cash $ 2,504,223 $ 1,636,164
Liabilities assumed (1,604,056 ) (1,009,944 )
Issuance of common stock in connection with acquisition (216,882 ) (380,210 )
Deposits paid for acquisitions   -     40,724  
Cash paid for acquisitions, net of cash acquired $ 683,285   $ 286,734  
                   
Acadia Healthcare Company, Inc.
Operating Statistics
(Unaudited, Revenue in thousands)
   
Three Months Ended June 30, Six Months Ended June 30,  
  2016     2015   % Change     2016     2015   % Change  
Same Facility Results (a,c)
Revenue $ 478,360 $ 442,346 8.1 % $ 869,772 $ 800,939 8.6 %
Patient Days 692,049 642,508 7.7 % 1,265,750 1,170,756 8.1 %
Admissions 33,332 30,457 9.4 % 61,947 56,150 10.3 %
Average Length of Stay (b) 20.8 21.1 -1.6 % 20.4 20.9 -2.0 %
Revenue per Patient Day $ 691 $ 688 0.4 % $ 687 $ 684 0.4 %
EBITDA margin 28.1 % 27.4 % 70 bps 27.7 % 26.9 % 80 bps
 
U.S. Same Facility Results (a)
Revenue $ 393,592 $ 362,868 8.5 % $ 711,578 $ 652,166 9.1 %
Patient Days 555,992 517,423 7.5 % 1,013,683 941,836 7.6 %
Admissions 33,007 30,121 9.6 % 61,363 55,565 10.4 %
Average Length of Stay (b) 16.8 17.2 -1.9 % 16.5 17.0 -2.5 %
Revenue per Patient Day $ 708 $ 701 0.9 % $ 702 $ 692 1.4 %
EBITDA margin 28.8 % 28.2 % 60 bps 28.2 % 27.4 % 80 bps
 
U.K. Same Facility Results (c)
Revenue $ 84,768 $ 79,478 6.7 % $ 158,194 $ 148,773 6.3 %
Patient Days 136,057 125,085 8.8 % 252,067 228,920 10.1 %
Admissions 325 336 -3.3 % 584 585 -0.2 %
Average Length of Stay (b) 418.6 372.3 12.5 % 431.6 391.3 10.3 %
Revenue per Patient Day $ 623 $ 635 -1.9 % $ 628 $ 650 -3.4 %
EBITDA margin 25.1 % 24.0 % 110 bps 25.2 % 24.8 % 40 bps
 
 
 
U.S. Facility Results
Revenue $ 430,209 $ 366,886 17.3 % $ 838,473 $ 657,393 27.5 %
Patient Days 590,919 517,423 14.2 % 1,152,242 941,836 22.3 %
Admissions 36,215 30,121 20.2 % 70,680 55,565 27.2 %
Average Length of Stay (b) 16.3 17.2 -5.0 % 16.3 17.0 -3.8 %
Revenue per Patient Day $ 728 $ 709 2.7 % $ 728 $ 698 4.3 %
EBITDA margin 27.6 % 27.9 % -30 bps 26.9 % 27.2 % -30 bps
 
U.K. Facility Results (c)
Revenue $ 325,883 $ 79,478 310.0 % $ 532,858 $ 148,773 258.2 %
Patient Days 756,687 125,085 504.9 % 1,210,702 228,920 428.9 %
Admissions 2,808 336 735.7 % 4,399 585 652.0 %
Average Length of Stay (b) 269.5 372.3 -27.6 % 275.2 391.3 -29.7 %
Revenue per Patient Day $ 431 $ 635 -32.2 % $ 440 $ 650 -32.3 %
EBITDA margin 22.4 % 24.0 % -160 bps 22.1 % 24.8 % -270 bps
 
Total Facility Results (c)
Revenue $ 756,092 $ 446,364 69.4 % $ 1,371,331 $ 806,166 70.1 %
Patient Days 1,347,606 642,508 109.7 % 2,362,944 1,170,756 101.8 %
Admissions 39,023 30,457 28.1 % 75,079 56,150 33.7 %
Average Length of Stay (b) 34.5 21.1 63.7 % 31.5 20.9 50.9 %
Revenue per Patient Day $ 561 $ 695 -19.2 % $ 580 $ 689 -15.7 %
EBITDA margin 25.3 % 27.2 % -190 bps 25.0 % 26.7 % -170 bps
 
(a) Same-facility results for the three and six months ended June 30, 2015 exclude six outpatient programs that have been closed.
(b) Average length of stay is defined as patient days divided by admissions.
(c) Revenue and revenue per patient day for the three and six months ended June 30, 2015 are adjusted to reflect the foreign currency exchange rate for the comparable period of 2016 in order to eliminate the effect of changes in the exchange rate. The exchange rate used in the adjusted revenue and revenue per patient day amounts for both the three and six months ended June 30, 2015 is 1.43.
             
Acadia Healthcare Company, Inc.
Reconciliation of Net Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA
(Unaudited)
 
Three Months Ended June 30, Six Months Ended June 30,
  2016     2015     2016     2015  
(in thousands)
 
Net income attributable to Acadia Healthcare Company, Inc. $ 56,445 $ 33,844 $ 82,133 $ 48,438
Income from discontinued operations, net of income taxes - (1 ) - (3 )
Net loss attributable to noncontrolling interests (854 ) - (1,173 ) -
Provision for income taxes 18,261 15,512 25,371 22,125
Interest expense, net 48,758 28,049 86,472 50,195
Depreciation and amortization   36,752     14,926     64,727     28,030  
EBITDA 159,362 92,330 257,530 148,785
 
Adjustments:
Equity-based compensation expense (a) 6,888 5,355 13,844 9,249
(Gain) loss on foreign currency derivatives (b) (98 ) 961 (508 ) 908
Transaction-related expenses (c)   6,074     7,157     32,372     25,573  
Adjusted EBITDA $ 172,226   $ 105,803   $ 303,238   $ 184,515  
 
See footnotes on page 10.
             
Acadia Healthcare Company, Inc.
Reconciliation of Adjusted Income from Continuing Operations Attributable to Acadia Healthcare Company, Inc. to
Net Income Attributable to Acadia Healthcare Company, Inc.
(Unaudited)
 
Three Months Ended June 30, Six Months Ended June 30,
  2016     2015     2016     2015  
(in thousands, except per share amounts)
 
Net income attributable to Acadia Healthcare Company, Inc. $ 56,445 $ 33,844 $ 82,133 $ 48,438
Income from discontinued operations, net of income taxes - (1 ) - (3 )
Provision for income taxes   18,261     15,512     25,371     22,125  

Income from continuing operations attributable to Acadia Healthcare Company, Inc. before income taxes

74,706 49,355 107,504 70,560
 
Adjustments to income from continuing operations:
(Gain) loss on foreign currency derivatives (b) (98 ) 961 (508 ) 908
Transaction-related expenses (c) 6,074 7,157 32,372 25,573

Income tax provision reflecting tax effect of adjustments to income from continuing operations (d)

  (17,530 )   (18,006 )   (30,382 )   (30,470 )

Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc.

$ 63,152 $ 39,467 $ 108,986 $ 66,571
 
Weighted-average shares outstanding - diluted 86,876 68,735 85,052 65,782
 

Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc. per diluted share

$ 0.73   $ 0.57   $ 1.28   $ 1.01  
 
See footnotes on page 10.
 
Acadia Healthcare Company, Inc.
Footnotes
   
We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA and Adjusted income from continuing operations, which are “non-GAAP financial measures” as defined under the rules and regulations promulgated by the SEC. We define EBITDA as net income adjusted for income from discontinued operations, net loss attributable to noncontrolling interests, net interest expense, income tax provision and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for equity-based compensation expense, (gain) loss on foreign currency derivatives and transaction-related expenses.
 
EBITDA, Adjusted EBITDA and Adjusted income from continuing operations are supplemental measures of our performance and are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). EBITDA, Adjusted EBITDA and Adjusted income from continuing operations are not measures of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as measures of our liquidity. Our measurements of EBITDA, Adjusted EBITDA and Adjusted income from continuing operations may not be comparable to similarly titled measures of other companies. We have included information concerning EBITDA, Adjusted EBITDA and Adjusted income from continuing operations in this press release because we believe that such information is used by certain investors as measures of a company’s historical performance. We believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of issuers of equity securities, many of which present EBITDA, Adjusted EBITDA and Adjusted income from continuing operations when reporting their results. Our presentation of EBITDA, Adjusted EBITDA and Adjusted income from continuing operations should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.
 
The Company is not able to provide a reconciliation of projected adjusted earnings per diluted share, where provided, to expected results due to the unknown effect, timing and potential significance of transaction-related expenses and the tax effect of such expenses.
 
(a) Represents the equity-based compensation expense of Acadia.
 
(b) Represents the change in fair value of foreign currency derivatives purchased by Acadia related to (i) acquisitions in the U.K. and (ii) transfers of cash between the U.S. and U.K. under the Company’s cash management and foreign currency risk management programs.
 
(c) Represents transaction-related expenses incurred by Acadia related to acquisitions.
 
(d) Represents the income tax provision adjusted to reflect the tax effect of the adjustments to income from continuing operations based on tax rates of 21.7% and 31.3% for the three months ended June 30, 2016 and 2015, respectively, and 21.8% and 31.4% for the six months ended June 30, 2016 and 2015, respectively.

CONTACT:
Acadia Healthcare Company, Inc.
Brent Turner, 615-861-6000
President