10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 333-135172

CRC HEALTH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	73-1650429
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
20400 Stevens Creek Boulevard, Suite 600, Cupertino, California	95014
(Address of principal executive offices)	(Zip code)

(877) 272-8668

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The total number of shares of the registrant’s common stock, par value of $0.001 per share, outstanding as of August 14, 2013 was 1,000.

CRC HEALTH CORPORATION

INDEX

			Page No.
Part I.	Financial Information
	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012		2
		Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012		3
		Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2013 and 2012		4
		Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012		5
		Notes to Condensed Consolidated Financial Statements		6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
	Item 3.	Quantitative and Qualitative Disclosure About Market Risk		32
	Item 4.	Controls and Procedures		32
Part II.	Other Information
	Item 1.	Legal Proceedings		33
	Item 1A.	Risk Factors		34
	Item 6.	Exhibits		34
Signature				35
Exhibit Index				36

Forward-Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this Quarterly Report, includes or may include “forward-looking statements.” All statements included herein, other than statements of historical fact, may constitute forward-looking statements. In some cases you can identify forward-looking statements by terminology such as “may,” “should” or “could.” Generally, the words “anticipates,” “believes,” “expects,” “intends,” “estimates,” “projects,” “plans” and similar expressions identify forward-looking statements. Although CRC Health Corporation (“CRC”) believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among others, the following factors: our substantial indebtedness; unfavorable economic conditions that have and could continue to negatively impact our revenues; changes in reimbursement rates for services provided; the failure to comply with extensive laws and governmental regulations given the highly regulated industry in which we operate and the ever changing nature of these laws and regulations; the significant economic contribution that certain regions and programs have to our operating results; claims and legal actions by patients, students, employees and others; failure to cultivate new, or maintain existing relationships with patient referral sources; competition; shortage in qualified healthcare workers; our employees election of union representation; difficult, costly or unsuccessful integrations of acquisitions; accidents or other incidents at our programs; defaults by borrowers in our loan program; limited history of profitability; potential conflicts with our financial sponsors; natural disasters; adverse media; deficiencies in our internal controls; regulatory risks and other risks that are described herein, including but not limited to the items discussed in “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed on April 1, 2013, and that are otherwise described from time to time in CRC’s Securities and Exchange Commission filings after this Quarterly Report. CRC assumes no obligation and does not intend to update these forward-looking statements.

All references in this report to the “Company,” “we,” “our,” and “us” mean, unless the context indicates otherwise, CRC Health Corporation and its subsidiaries on a consolidated basis.

1

CRC HEALTH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

JUNE 30, 2013 AND DECEMBER 31, 2012

(In thousands, except share amounts)

	June 30, 2013			December 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	11,040		$	19,058
Restricted cash		280			364
Accounts receivable, net		39,331			36,737
Prepaid expenses		7,430			4,781
Other current assets		2,598			2,591
Income taxes receivable		3,094			1,109
Deferred income taxes		6,352			6,352
Current assets of discontinued operations		3,135			2,759
Total current assets		73,260			73,751
Property and equipment, net		131,406			130,381
Goodwill		519,093			518,953
Other intangible assets, net		281,079			294,085
Other assets, net		18,305			20,396
Total assets	$	1,023,143		$	1,037,566
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	7,507		$	6,801
Accrued payroll and related expenses		19,292			18,333
Accrued interest		9,334			9,412
Accrued expenses		12,575			8,721
Current portion of long-term debt		—			4,840
Deferred revenue		14,169			9,494
Other current liabilities		1,303			1,592
Current liabilities of discontinued operations		2,287			2,372
Total current liabilities		66,467			61,565
Long-term debt		567,174			584,535
Other long-term liabilities		8,642			8,740
Long-term liabilities of discontinued operations		5,838			6,275
Deferred income taxes		107,310			107,289
Total liabilities		755,431			768,404
Commitments and contingencies
Stockholders’ equity
Common stock, $0.001 par value - 1,000 shares authorized, issued and outstanding		—			—
Additional paid-in capital		465,665			464,932
Accumulated deficit		(197,913	)		(195,699	)
Accumulated other comprehensive loss		(40	)		(71	)
Total equity		267,712			269,162
Total liabilities and stockholders’ equity	$	1,023,143		$	1,037,566

See notes to condensed consolidated financial statements.

2

CRC HEALTH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012

(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues	$	118,575		$	114,977		$	229,159		$	223,199
Operating expenses:
Salaries and benefits		56,849			54,585			112,817			109,173
Facilities and other operating costs		37,384			33,252			70,972			65,470
Provision for doubtful accounts		1,851			1,465			4,026			3,808
Depreciation and amortization		5,332			5,027			10,187			9,921
Asset impairments		10,859			—			10,859			—
Total operating expenses		112,275			94,329			208,861			188,372
Operating income		6,300			20,648			20,298			34,827
Interest expense		(12,163	)		(12,552	)		(23,642	)		(24,338	)
Other income		241			251			503			494
Income (loss) from continuing operations before income taxes		(5,622	)		8,347			(2,841	)		10,983
Income tax expense (benefit)		(2,295	)		3,500			(1,112	)		4,684
Income (loss) from continuing operations, net of tax		(3,327	)		4,847			(1,729	)		6,299
Loss from discontinued operations, net of tax		(274	)		(453	)		(485	)		(1,246	)
Net income (loss)	$	(3,601	)	$	4,394		$	(2,214	)	$	5,053

See notes to condensed consolidated financial statements.

3

CRC HEALTH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012

(In thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Net income (loss)	$	(3,601	)	$	4,394	$	(2,214	)	$	5,053
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $5 and $21 for the three and six months ended June 30, 2013, respectively)		7			—		31			—
Total comprehensive income (loss)	$	(3,594	)	$	4,394	$	(2,183	)	$	5,053

See notes to condensed consolidated financial statements.

4

CRC HEALTH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012

	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	(2,214	)	$	5,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,187			10,008
Amortization of debt discount and capitalized financing costs		2,122			3,014
Asset impairments		10,859			—
Loss on disposal of property and equipment		190			418
Provision for doubtful accounts		4,008			3,954
Stock-based compensation		1,332			1,016
Deferred income taxes		21			(804	)
Changes in assets and liabilities:
Restricted cash		84			(226	)
Accounts receivable		(6,599	)		(1,878	)
Prepaid expenses		(2,642	)		1,118
Income taxes receivable and payable		(2,372	)		2,705
Other current assets		(7	)		(170	)
Accounts payable		841			(300	)
Accrued liabilities		4,924			2,873
Other current liabilities		4,342			6,345
Other long-term assets		821			(853	)
Other long-term liabilities		(529	)		315
Net cash provided by operating activities		25,368			32,588
Cash flows from investing activities:
Additions of property and equipment		(9,432	)		(7,341	)
Proceeds from sale of property and equipment		36			—
Acquisition of business, net of cash acquired		(140	)		—
Other investing activities		—			(29	)
Net cash used in investing activities		(9,536	)		(7,370	)
Cash flows from financing activities:
Borrowings of long-term debt		—			84,096
Repayment of long-term debt		(5,019	)		(88,099	)
Borrowings on revolving line of credit		—			18,000
Repayments on revolving line of credit		(17,995	)		(13,505	)
Capital distributed to Parent		(599	)		(9,524	)
Capitalized financing costs		(217	)		(2,772	)
Other financing activities		(20	)		—
Net cash used in financing activities		(23,850	)		(11,804	)
Net increase (decrease) in cash and cash equivalents		(8,018	)		13,414
Cash and cash equivalents — beginning of period		19,058			10,183
Cash and cash equivalents — end of period	$	11,040		$	23,597

See notes to condensed consolidated financial statements.

5

CRC HEALTH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2013

NOTE 1. OVERVIEW AND BASIS OF PRESENTATION

Overview

CRC Health Corporation (“the Company”) is a wholly owned subsidiary of CRC Health Group, Inc., referred to as “the Group” or “the Parent.” The Company is headquartered in Cupertino, California, and through its wholly owned subsidiaries provides treatment services related to substance abuse, troubled youth and other addiction diseases and behavioral disorders.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, without audit. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States of America for annual financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2012 has been derived from our audited financial statements.

In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of the Company, its results of operations, and its cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Principles of Consolidation — The Company’s condensed consolidated financial statements include the accounts of CRC Health Corporation and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates — Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Reclassifications: Discontinued Operations — The condensed consolidated statements of operations have been reclassified for all periods presented to reflect the presentation of closed or sold facilities as discontinued operations (see Note 8). Unless noted otherwise, discussions in the notes to the condensed consolidated financial statements pertain to continuing operations.

Corrections to Condensed Consolidated Balance Sheet as of December 31, 2012 —

Subsequent to the issuance of the Company’s 2012 consolidated financial statements, management determined that certain impairments of intangible assets (both those subject to amortization and those not subject to amortization) recorded primarily in discontinued operations in the periods from 2008 through December 31, 2012 were incorrectly computed and recorded due to errors in the allocation of such amounts to specific facilities and other mathematical mistakes. The actual aggregate intangible asset impairment recognized through December 31, 2012 exceeded the intangible asset impairment that should have been recognized by $1.2 million. As a result, certain amounts presented in the Company’s condensed consolidated balance sheet as of December 31, 2012 have been restated from the amounts previously reported to correct such errors as shown in the table below. We believe these corrections are not material to our previously issued consolidated financial statements.

Condensed Consolidated Balance Sheet as of December 31, 2012 (in thousands):

	As Previously Reported			Corrections		As Restated
Current assets of discontinued operations	$	2,623		$	136	$	2,759
Total current assets		73,615			136		73,751
Other intangible assets, net		292,846			1,239		294,085
Total assets		1,036,191			1,375		1,037,566
Accumulated deficit		(197,074	)		1,375		(195,699	)
Total equity		267,787			1,375		269,162
Total liabilities and stockholders’ equity		1,036,191			1,375		1,037,566

6

Corrections to Condensed Consolidated Statements of Operations, Comprehensive Income and Cash Flows for the periods ended June 30, 2012 —

The Company has restated the condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2012 and the condensed consolidated statement of cash flows for the six months ended June 30, 2012 to correct intangible asset amortization related to the intangible asset impairments discussed above; and to correct other immaterial out of period adjustments that were previously identified, recorded and disclosed in Note 1 of the financial statements included in the Company’s 2012 Annual Report on Form 10-K and the June 30, 2012 Form 10-Q, so such adjustments are recorded in the proper period. We believe these corrections are not material to our previously issued annual or interim consolidated financial statements.

The effects of the correction of the intangible asset amortization error and the out of period adjustments are as follows:

• Additional aggregate intangible asset amortization of $0.1 million and $0.2 million in the three and six months ended June 30, 2012, respectively, has been recorded;

• Management fees reimbursable to the Company’s principal shareholder of $0.7 million that were previously expensed in “supplies, facilities and other operating costs” in the quarter ended June 30, 2012 have been correctly recorded in 2011;

• Leasehold improvements aggregating $0.4 million previously expensed in “supplies, facilities and other operating costs” in the quarter ended June 30, 2012 have been correctly recorded in the years 2009 through 2011;

• Adjustments to decrease “supplies, facilities, and other operating costs” by $0.9 million and to increase “net loss attributable to noncontrolling interest” that were previously recorded in the quarter ended June 30, 2012 have been correctly recorded in 2011;

• Depreciation related to leasehold improvements costs aggregating $0.6 million previously expensed in “supplies, facilities and other operating costs” in the quarter ended December 31, 2012 have been correctly recorded in the years 2006 through 2012; and

• Adjustments have been recorded to reflect the income tax effects related to the above corrections.

The following tables summarize the effects of the discontinued operations reclassifications and the corrections on the Company’s condensed consolidated statements of operations for three and six months ended June 30, 2012 (in thousands):

	For the Three Months Ended June 30, 2012
	As Previously Reported			Discontinued Operations Reclassifications			Out of Period Corrections			Intangible  Assets Amortization Corrections			As Restated
Net client service revenues	$	115,567		$	(590	)	$	—		$	—		$	114,977
Operating expenses:
Salaries and benefits		53,971			(320	)		934						54,585
Facilities and other operating costs		34,728			(361	)		(1,115	)					33,252
Provision for doubtful accounts		1,505			(40	)		—			—			1,465
Depreciation and amortization		4,974			(52	)		25			80			5,027
Total operating expenses		95,178			(773	)		(156	)		80			94,329
Operating income		20,389			183			156			(80	)		20,648
Interest expense		(12,553	)		1			—			—			(12,552	)
Other income		251			—			—			—			251
Income from continuing operations before income taxes		8,087			184			156			(80	)		8,347
Income tax expense		3,390			78			65			(33	)		3,500
Income from continuing operations, net of tax		4,697			106			91			(47	)		4,847
Loss from discontinued operations, net of tax		(382	)		(106	)		35						(453	)
Net income		4,315			—			126			(47	)		4,394
Net loss attributable to noncontrolling interest		(934	)		—			934			—			—
Net income attributable to CRC Health Corporation	$	3,381		$	—		$	1,060		$	(47	)	$	4,394

	For the Six Months Ended June 30, 2012
	As Previously Reported			Discontinued Operations Reclassifications			Out of Period Corrections			Intangible  Assets Amortization Corrections			As Restated
Net client service revenues	$	224,471		$	(1,272	)	$	—		$	—		$	223,199
Operating expenses:
Salaries and benefits		108,915			(676	)		934			—			109,173
Facilities and other operating costs		67,250			(706	)		(1,074	)		—			65,470
Provision for doubtful accounts		3,873			(65	)		—			—			3,808
Depreciation and amortization		9,798			(87	)		50			160			9,921
Total operating expenses		189,836			(1,534	)		(90	)		160			188,372
Operating income		34,635			262			90			(160	)		34,827
Interest expense		(24,340	)		2			—			—			(24,338	)
Other income		494			—			—			—			494
Income from continuing operations before income taxes		10,789			264			90			(160	)		10,983
Income tax expense		4,602			112			38			(68	)		4,684
Income from continuing operations, net of tax		6,187			152			52			(92	)		6,299
Loss from discontinued operations, net of tax		(1,129	)		(152	)		35			—			(1,246	)
Net income		5,058			—			87			(92	)		5,053
Net loss attributable to noncontrolling interest		(934	)		—			934			—			—
Net income attributable to CRC Health Corporation	$	4,124		$	—		$	1,021		$	(92	)	$	5,053

The following tables summarize the effects of the corrections on the Company’s condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2012 (in thousands):

	For the Three Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections		Intangible Assets Amortization Corrections			As Restated
Net income	$	4,315		$	126	$	(47	)	$	4,394
Other comprehensive income:		—			—		—			—
Total comprehensive income		4,315			126		(47	)		4,394
Net loss attributable to noncontrolling interest		(934	)		934		—
Net income attributable to CRC Health Corporation	$	3,381		$	1,060	$	(47	)	$	4,394
	For the Six Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections		Intangible Assets Amortization Corrections			As Restated
Net income	$	5,058		$	87	$	(92	)	$	5,053
Other comprehensive income:		—			—		—			—
Total comprehensive income		5,058			87		(92	)		5,053
Net loss attributable to noncontrolling interest		(934	)		934		—			—
Net income attributable to CRC Health Corporation	$	4,124		$	1,021	$	(92	)	$	5,053

The following tables summarize the effects of the corrections on the Company’s condensed consolidated statement of cash flows for six months ended June 30, 2012 (in thousands):

	For the Six Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections			Intangible Assets Amortization Corrections			As Restated
Cash flows from operating activities:
Net income	$	5,058		$	87		$	(92	)	$	5,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,798			50			160			10,008
Amortization of debt discount and capitalized financing costs		3,014			—			—			3,014
Loss on disposal of property and equipment		843			(425	)		—			418
Provision for doubtful accounts		3,954			—			—			3,954
Stock-based compensation		1,016			—			—			1,016
Deferred income taxes		(797	)		61			(68	)		(804	)
Changes in assets and liabilities:
Restricted cash		(226	)		—			—			(226	)
Accounts receivable		(1,878	)		—			—			(1,878	)
Prepaid expenses		1,118			—			—			1,118
Income taxes receivable and payable		2,705			—			—			2,705
Other current assets		(170	)		—			—			(170	)
Accounts payable		(300	)		—			—			(300	)
Accrued liabilities		2,646			227			—			2,873
Other current liabilities		6,345			—			—			6,345
Other long-term assets		(853	)		—			—			(853	)
Other long-term liabilities		315			—			—			315
Net cash provided by operating activities	$	32,588		$	—		$	—		$	32,588

NOTE 2. INCOME TAXES

The Company calculates its income tax expense for interim periods by applying the full year’s estimated effective tax rate in its financial statements for interim periods (in thousands, except percentages). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income tax expense (benefit) from continuing operations	$	(2,295	)	$	3,500		$	(1,112	)	$	4,684
Effective tax rate		40.8	%		41.9	%		39.1	%		42.6	%

The Company’s effective tax rate of 40.8% and 39.1% for the three and six months ended June 30, 2013, respectively, differed from the effective tax rate for the three and six months ended June 30, 2012 of 41.9% and 42.6%, respectively, primarily due to the decreases to state tax expense and interest expense related to uncertain tax positions.

The Company’s effective tax rate of 40.8% and 39.1% for the three and six months ended June 30, 2013, respectively, differed from the U.S. federal statutory income tax rate of 35.0%, due primarily to state tax expense.

NOTE 3. LONG-TERM DEBT

Long-term debt as of June 30, 2013 and December 31, 2012 consists of the following (in thousands):

Term Loans and Revolving Line of Credit

	June 30, 2013		December 31, 2012
Term loans, net of discount of $2,250 in 2013 and $2,751 in 2012	$	381,555	$	385,875
Revolving line of credit		9,005		27,000
Senior subordinated notes, net of discount of $682 in 2013 and $814 in 2012		176,614		176,482
Other		—		18
Total debt		567,174		589,375
Less: current portion of long-term debt		—		(4,840	)
Total long-term debt	$	567,174	$	584,535

Term Loans

On March 7, 2012, the aggregate principal amount of $80.9 million of Term Loans (the “Term Loans B-1”) was refinanced with cash proceeds (net of related fees and expenses) of an aggregate principal amount of $87.6 million of new Term Loans that mature on November 16, 2015 (the “Term Loans B-3”). New creditors and existing Term Loans B-1 creditors represented $67.0 million and $20.6 million of the Term Loans B-3 principal amount, respectively. Of the $20.6 million related to existing creditors, $6.1 million was contributed as additional Term Loan B-3 principal. As a part of the refinancing, the Company repaid $66.4 million of the aggregate principal Term Loans B-1. This repayment was recognized as an extinguishment of debt and $0.2 million of the remaining unamortized issuance costs related to Term Loans B-1 were charged to interest expense during the three months ended March 31, 2012. The Company recognized the refinancing of the remaining aggregate principal amount of $14.5 million with existing Term Loans B-1 creditors as a modification of debt. Refinancing costs of $0.5 million associated with the

7

modified debt were charged to interest expense during the three months ended March 31, 2012. The remaining debt issuance costs of $2.2 million related to the refinancing were capitalized and are being amortized over the life of the Term Loans B-3 using the effective interest rate method. The Term Loans B-3 was issued with an original issue discount of 4.00% which is being amortized over the term of the Term Loans B-3 using the effective interest rate method.

As of June 30, 2013, $82.8 million, net of discount of $2.2 million, are outstanding on the Term Loans B-3. Interest on these Term Loans B-3 is payable quarterly at: (i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent (but not less than 1.50%), plus an applicable margin of 7.00%, subject to an increase to 8.00% during any period that the Company’s public corporate family rating from Moody’s is not at least B3 or the Company’s public corporate credit rating from Standard & Poor’s Ratings Services (“S&P”) is not at least B-, and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00% (but, in either case, not less than 2.50%), plus an applicable margin of 6.00%, subject to an increase to 7.00% during any period that the Company’s public corporate family rating from Moody’s is not at least B3 or the Company’s public corporate rating credit rating from S&P is not at least B-. As of June 30, 2013, the entire amount of the Term Loan B-3 consisted of LIBOR loans and the interest rate thereon was 8.5%.

The Term Loans B-3 are payable in quarterly principal installments of $0.1 million on December 31, 2014 and $0.7 million over the payment period between March 31, 2015 and September 30, 2015, with the remainder due on the maturity date of November 16, 2015.

Under the terms of this refinancing, the Company was required to pay and paid, a fee equal to 1.00% of the outstanding principal amount of such lender’s Term Loans B-3 as of March 31, 2013, which totaled $0.9 million. The Company is also required to pay (i) on March 31, 2014, a fee equal to 1.50% of the outstanding principal amount of such lender’s Term Loans B-3 as of such date and (ii) on the Maturity Date, a fee equal to 1.50% of the outstanding principal amount of such lender’s Term Loans B-3 as of such date. These fees are charged to interest expense over the term of the Term Loans B-3 using the effective interest rate method.

The Term Loans B-3 are subject to a 1.00% prepayment premium to the extent the Term Loans B-3 are refinanced, or the terms thereof are amended, in either case, for the purpose of reducing the applicable yield with respect thereto, in each case prior to the first anniversary of the refinancing.

As of June 30, 2013, $298.8 million of the remaining Term Loans (the “Term Loans B-2”) are outstanding. The Term Loans B-2 matures on November 16, 2015. Interest on these Term Loans B-2 is payable monthly at: (i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent, plus an applicable margin of 4.50% and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00%, plus an applicable margin of 3.50%. As of June 30, 2013, the entire amount of the Term Loans B-2 consisted of LIBOR loans and the interest rate thereon was 4.70%.

The Term Loans B-2 are payable in quarterly principal installments of $0.4 million on December 31, 2014 and $2.4 million over the payment period between March 31, 2015 and September 30, 2015, with the remainder due on the maturity date of November 16, 2015.

The Company is required to apply a certain portion of its excess cash to the principal amount of the Term Loans on an annual basis. Excess cash under the Company’s Credit Agreement is defined as net income attributable to the Company adjusted for certain cash and non-cash items and is required to be calculated after the end of each year. Required payments, if any are due in March of the subsequent year. The Company made payments related to its excess cash in March 2013 and 2012 of $4.8 million and $6.8 million, respectively. The excess cash payment paid in March 2013 was classified as a current liability as of December 31, 2012.

Revolving Line of Credit

As of June 30, 2013, the Company had aggregate revolving credit commitments of $63.0 million which mature on August 16, 2015. Interest is payable quarterly at (i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent, plus an applicable margin of 4.00%, 3.75%, 3.50% or 3.25%, based upon the Company’s leverage ratio being within certain defined ranges, and (ii) for base rate loans, a

8

rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00%, plus an applicable margin of 3.00%, 2.75%, 2.50% or 2.25%, based upon the Company’s leverage ratio being within certain defined ranges. Commitment fees are payable quarterly at a rate equal to 0.625% per annum. As of June 30, 2013, the amount outstanding under the Company’s Revolving Line of Credit was $9.0 million bearing an average interest rate of 4.24%. As of June 30, 2013, the Company’s letters of credit against the revolving commitments were $9.2 million.

The Company’s Term Loans and Revolving Line of Credit are guaranteed by the Company’s Parent and substantially all of the Company’s current and future wholly-owned domestic subsidiaries, and secured by their existing and future property and assets, and secured by a pledge of the Company’s capital stock and the capital stock of the Company’s domestic wholly-owned subsidiaries and up to 65% of the capital stock of first-tier foreign subsidiaries. The Company’s Credit Agreement requires the Company to comply on a quarterly basis with certain financial and other covenants, including a maximum total leverage ratio test and an interest coverage ratio test. As of June 30, 2013, the Company was in compliance with all the covenants.

Senior Subordinated Notes

As of June 30, 2013, the outstanding aggregate principal amount related to the Company’s 10.75% Senior Subordinated Notes (the “Notes”) due February 1, 2016, was $176.6 million, net of discount of $0.7 million. Interest is payable semiannually. The Company may redeem some or all of the Notes at the redemption prices (expressed as percentages of principal amount of Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if redeemed during the twelve-month period beginning on February 1 of each of the years indicated below:

Year	Percentage
2013		101.792	%
2014 and thereafter		100.000	%

If there is a change of control as specified in the indenture, the Company must offer to repurchase the Notes at 101% of their face amount, plus accrued and unpaid interest. The Notes are subordinated to all of the Company’s existing and future senior indebtedness, rank equally with all of the Company’s existing and future senior subordinated indebtedness and rank senior to all of the Company’s existing and future subordinated indebtedness. The Notes are guaranteed on an unsecured senior subordinated basis by each of the Company’s wholly owned subsidiaries that guarantee the Company’s Term Loans and Revolving Line of Credit. The Company’s Notes agreement requires it to comply on a quarterly basis with certain covenants. As of June 30, 2013, the Company was in compliance with all the covenants.

As of June 30, 2013, currently scheduled principal payments of total debt, excluding the effects of the discounts on the term loans and the senior subordinated notes, are as follows (in thousands):

2013 (remaining 6 months)	$	—
2014		538
2015		392,271
2016		177,296
Total	$	570,105

Interest expense — The following table presents the components of interest expense (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Contractual interest on total debt	$	11,013		$	11,304		$	21,933		$	21,544
Amortization of debt discount and capitalized financing costs		1,332			1,354			2,122			3,014
Interest capitalized to property and equipment, net		(182	)		(106	)		(413	)		(220	)
Total interest expense	$	12,163		$	12,552		$	23,642		$	24,338

NOTE 4. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management

9

of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. However, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.

Cash Flow Hedges of Interest Rate Risk

The Company’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. In 2012 the Company entered into an interest rate swap to hedge the variable cash flows associated with existing variable-rate debt. As of June 30, 2013, the Company had one interest rate derivative designated as a cash flow hedge of interest rate risk, with a $200.0 million notional amount, paying fixed interest at 0.287% and maturing on June 30, 2014.

The effective portion of changes in the fair value of a derivative that qualifies and is designated as a cash flow hedge is recorded in accumulated other comprehensive loss and is subsequently reclassified into interest expense as interest payments are made on the Company’s variable-rate debt. The ineffective portion of the change in fair value of this type of derivative is recognized directly in earnings. During the next twelve months, the Company estimates that an additional $0.1 million will be reclassified as an increase to interest expense. As of June 30, 2013, the $0.1 million fair value of this derivative was recorded as “other current liabilities” in the Condensed Consolidated Balance Sheet.

The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statement of Operations (in thousands):

Derivatives Designated as Cash Flow Hedges For the Six Months Ended June 30,	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)					Location of Gain or (Loss) Reclassified From Accumulated OCI into Income (Effective portion)		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)					Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	2013			2012				2013			2012				2013			2012
Interest Rate Derivatives
Pay-Fixed Swaps	$	(34	)	$	0		Interest expense	$	(42	)	$	0		Other Income	$	(43	)	$	0

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. As of June 30, 2013, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0.1 million. If the Company had breached any of these provisions as of June 30, 2013, it could have been required to settle its obligations under the agreements at their termination value of $0.1 million.

NOTE 5. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Derivative financial instruments

Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate forward curves.

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The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2013, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2013, aggregated by the level in the fair value hierarchy within which those measurements fall as of June 30, 2013 and December 31, 2012 (in thousands):

	Quoted Prices in Active  Markets (Level 1)				Significant Other Observable  Inputs (Level 2)				Significant Unobservable  Inputs (Level 3)				Total Fair Value
	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Assets
Derivative Financial Instruments	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Liabilities
Derivative Financial Instruments	$	0	$	0	$	66	$	117	$	0	$	0	$	66	$	117

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company’s goodwill and other indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset may be less than the carrying amount of the asset. In addition, the Company’s property and equipment and finite-lived intangibles are assessed for recoverability of the carrying value whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The following table presents the non-financial assets that were measured and recorded at fair value based on Level 3 inputs on a non-recurring basis during the three and six months ended June 30, 2013 (in thousands):

	Three and Six Months Ended June 30, 2013
	Impairment Charge		Fair Value
Property and equipment	$	568	$	—
Other intangible assets		10,291		—
Total	$	10,859	$	—

Fair Value of Financial Instruments

Financial instruments not measured at fair value on a recurring basis include cash, restricted cash, accounts receivable (net), loan program notes receivable (net), accounts payable, term loans (net), and senior subordinated notes (net). With the exception of financial instruments noted in the following table, the fair value of the Company’s financial instruments approximate carrying value due to their short maturities.

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The estimated fair value of financial instruments with long-term maturities is as follows:

	June 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value  (1)
Assets
Loan program notes receivable, net	$	10,675	$	9,282	$	11,473	$	9,606
Liabilities
Term loans, net	$	381,555	$	404,120	$	385,875	$	402,757
Senior subordinated notes, net		176,614		187,956		176,482		181,248
Total liabilities	$	558,169	$	592,076	$	562,357	$	584,005

⁽¹⁾  The fair values as of December 31, 2012 have been corrected from amounts previously reported.

The estimated fair value for loan program notes is primarily based on securitization market conditions for similar loans. The Company’s term loans are measured at fair value based on present value methods using credit spreads derived from market data to discount the projected interest and principal payments. The Company’s senior subordinated notes are measured at fair value based on bond-yield data from market trading activity as well as U.S Treasury rates with similar maturities as the senior subordinated notes to discount the projected interest and principal payments. As of June 30, 2013 and December 31, 2012, the estimated fair value of loan program notes receivable, term loans and senior subordinated notes was determined based on Level 3 inputs.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Legal Matters — In a complaint initially filed on July 6, 2011, and amended on August 25, 2011, in Multnomah County Circuit Court in Oregon, 17 former students of one of our previously closed therapeutic boarding school facilities allege claims for intentional and negligent infliction of emotional distress, battery, breach of contract and negligence arising out of their treatment in certain programs of our school. We and our subsidiaries, Aspen Education Group, Inc. (“Aspen”) and Mount Bachelor Educational Center, Inc. (“MBA”), are among the defendants in the pending litigation. The plaintiffs seek a total of $26.0 million in relief. A second and third suit were filed in November 2011 and January 2013, respectively, in Multnomah County Circuit Court in Oregon by 14 former and 13 former students, respectively, also alleging abuse. The plaintiffs seek a total of $23 million in relief in the second suit and a total of $19.5 million in relief in the third suit. We and the other defendants intend to defend vigorously the pending lawsuits. In consultation with counsel and based on our preliminary investigation into the facts alleged, we believe these cases are without merit. However, at this time, we are unable to predict the outcome of the lawsuit, the possible loss or range of loss, if any, after consideration of the extent of insurance coverage associated with the resolution of the lawsuit or any potential effect it may have on us or our operations. On May 10, 2012, Nautilus Insurance Corporation filed a complaint against CRC Health Group Inc. and certain related entities seeking declaratory relief in the federal district court in Portland, Oregon. The Complaint seeks a judicial determination as to whether the Nautilus general and healthcare professional liability insurance policies provide coverage for these suits against MBA and asks the court to enter judgment that the policies are null and void, or alternatively that the policies do not cover these specific lawsuits, and to declare that Nautilus has no duty to defend or indemnify MBA, Aspen or CRC. This litigation with Nautilus Insurance Corporation has been stayed pending resolution of the underlying suits against MBA. In consultation with counsel and based on our preliminary review of the matters alleged, we believe this suit is without merit and we are vigorously defending the matter.

In a complaint filed in August 2011, a suit against our New Life Lodge facility was brought by Kathy Mauk as administrator of the estate of Lindsey Poteet a/k/a Lindsey Richardson, deceased and on behalf of the wrongful death beneficiary of Lindsey Poteet a/k/a Lindsey Richardson, Arwen Richardson, vs. CRC Health Tennessee, Inc. dba New Life Lodge and CRC Health Group, Inc. dba New Life Lodge. The suit alleges negligence and medical malpractice resulting in wrongful death and seeks a total $32.0 million in compensatory and punitive damages. A second suit was brought in December 2012 against our New Life Lodge facility by Charity Comage as administrator of the estate of and on behalf of Savon Kinney, deceased vs CRC Health Tennessee, Inc. dba New Life Lodge and CRC Health Group, Inc. dba New Life Lodge, American Behavioral Consultants, LLC and Holly Liter, APN. The second suit alleges negligence and medical malpractice resulting in the wrongful death and seeking a total $14.5 million in compensatory and punitive damages. American Behavioral Consultants, LLC served as an independent contractor for New Life Lodge and Ms. Holly Liter was an employee of American Behavioral Consultants, LLC. A third suit has been filed against our New Life Lodge by Penny Bryant, mother of Patrick Bryant, deceased, vs. CRC

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Health Tennessee, Inc. and Jonathan Butler, M.D. This suit was originally filed in 2011 and then dismissed without prejudice in October 2012 and was re-filed in June 2013. This suit alleges negligence resulting in the wrongful death of Patrick Bryant and seeks a total of $13.0 million in compensatory and punitive damages. We intend to defend vigorously these lawsuits. In consultation with counsel and based on our preliminary investigation into the facts alleged, we believe these cases are without merit. Although the Company believes the amounts reserved are adequate based on currently available information, the estimation process involves a considerable amount of judgment by management and the ultimate amounts could vary materially.

Our New Life Lodge facility is currently responding to a civil investigative demand (“CID”) from the Office of the Attorney General of the State of Tennessee inquiring about possible false claims for payment related to services provided to TennCare recipients for the period 2007 to 2011. The United States Department of Justice is participating in this investigation and also has requested information from New Life Lodge. We are cooperating fully with the investigation. Such CIDs are often associated with previously filed qui tam actions, or lawsuits filed under seal under the False Claims Act (“FCA”). Qui tam actions are brought by private plaintiffs suing on behalf of the federal government for alleged FCA violations. The Company firmly believes that any false claims action is without merit. If litigation results, we intend to vigorously defend our position; however, we cannot predict the outcome or timing of such litigation. Although the Company believes that the amounts reserved are adequate based on currently available information, the estimation process involves a considerable amount of judgment by management and the ultimate amounts could vary materially.

We are involved in other litigation and regulatory investigations arising in the ordinary course of business. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on our future financial position or results from operations and cash flows, except as discussed above. As of June 30, 2013 and December 31, 2012, accruals for legal matters totaled $4.4 million and $1.6 million, respectively, and were included in “accrued expenses” in the Condensed Consolidated Balance Sheets.

NOTE 7. RESTRUCTURING

As of June 30, 2013, the Company’s restructuring reserve of $7.5 million consists primarily of future rental payments, net of estimated sublease income. These charges are expected to continue through 2020 and are summarized in the following table (in thousands):

	Recovery (1)			Youth			Total
Total restructuring reserve at December 31, 2012	$	1,412		$	7,882		$	9,294
Expenses		66			323			389
Cash payments		(140	)		(711	)		(851	)
Reclassification to accrued expenses		(1,338	)		—			(1,338	)
Total restructuring reserve at June 30, 2013	$	—		$	7,494		$	7,494

⁽¹⁾  The restructuring reserve balance and associated activity represents a purchase accounting liability that was accrued in connection with a 2009 acquisition. This amount was inappropriately included in the restructuring reserve disclosure as of December 31, 2009 and thereafter. As of June 30, 2013 and December 31, 2012, the purchase accounting liability is included in “accrued expenses” in the Condensed Consolidated Balance Sheet and the restructuring reserve table above has been appropriately adjusted.

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NOTE 8. DISCONTINUED OPERATIONS

The results of operations for those facilities classified as discontinued operations are summarized below (in thousands). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues	$	36		$	617		$	70		$	1,329
Operating expenses		542			1,379			925			3,365
Interest expense		—			—			—			(1	)
Loss before income taxes		(506	)		(762	)		(855	)		(2,037	)
Loss on disposal of discontinued operations		17			—			17			—
Income tax benefit		(249	)		(309	)		(387	)		(791	)
Loss from discontinued operations	$	(274	)	$	(453	)	$	(485	)	$	(1,246	)

NOTE 9. SEGMENT INFORMATION

Reportable segments are based upon the Company’s organizational structure, the manner in which the operations are managed and on the level at which the Company’s chief operating decision-maker allocates resources. The Company’s chief operating decision-maker is its Chief Executive Officer.

A summary of the Company’s reportable segments are as follows:

Recovery — The recovery segment specializes in the treatment of chemical dependency and other behavioral health disorders. Services offered in this segment include: inpatient/residential care, partial/day treatment, intensive outpatient groups, therapeutic living/half-way house environments, aftercare centers and detoxification. As of June 30, 2013, the recovery segment operates 30 inpatient, 16 outpatient facilities, and 58 comprehensive treatment centers (“CTCs”) in 21 states.

Youth — The youth segment provides a wide variety of adolescent therapeutic programs through settings and solutions that match individual needs with the appropriate learning and therapeutic environment. Services offered in this segment include boarding schools and experiential outdoor education programs. As of June 30, 2013, the youth segment operates 15 adolescent and young adult programs in 6 states.

Weight management — The weight management segment provides adult and adolescent treatment services for obesity and eating disorders, each a related behavioral disorder. Services offered in this segment include treatment plans through a combination of medical, psychological and social treatment programs. As of June 30, 2013, the weight management segment operates 17 facilities in 8 states, and one in the United Kingdom.

Corporate — In addition to the three reportable segments described above, the Company has activities classified as corporate which represent general and administrative expenses (management, financial, legal, human resources and information systems), and stock-based compensation expense that are not allocated to the segments.

Major Customers — No single customer represented 10% or more of the Company’s total net revenue in any period presented.

Geographic Information — The Company’s business operations are primarily in the United States.

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Selected financial information for the Company’s reportable segments is presented in the table below (in thousands). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues:
Recovery	$	94,269		$	88,513		$	184,944		$	175,609
Youth		17,556			19,823			32,494			36,125
Weight management		6,741			6,623			11,701			11,423
Corporate		9			18			20			42
Total net client service revenues	$	118,575		$	114,977		$	229,159		$	223,199
Operating income (loss):
Recovery	$	28,817		$	28,083		$	54,708		$	53,077
Youth		(8,958	)		1,534			(11,586	)		38
Weight management		(1,894	)		(454	)		(1,956	)		(1,023	)
Corporate		(11,665	)		(8,515	)		(20,868	)		(17,265	)
Operating income		6,300			20,648			20,298			34,827
Interest expense		(12,163	)		(12,552	)		(23,642	)		(24,338	)
Other income		241			251			503			494
Income (loss) from continuing operations before income taxes	$	(5,622	)	$	8,347		$	(2,841	)	$	10,983

NOTE 10. ASSET IMPAIRMENTS AND SUBSEQUENT EVENTS

In early July 2013, the Company began the process of closing five of its Youth Division facilities and one of its Weight Management Division facilities. As a result of these actions, the Company recorded non-cash impairment charges related to property and equipment and other intangible assets in the amount of $0.6 million and $6.6 million, respectively, in the three months ended June 30, 2013. These charges are included in “asset impairments” in the Condensed Consolidated Statements of Operations. The Company expects the closure process for each of these facilities to be completed by September 30, 2013. Also, the Company anticipates recording employee severance charges of approximately $0.5 million and lease termination charges in the range of $9.0 to $10.0 million, respectively, in the three months ending September 30, 2013 related to these facility closures.

On August 1, 2013, the Company sold the Oakley School, a Youth Division facility. In connection with this sale, the Company recorded a $3.7 million charge related to other intangible assets in the three months ended June 30, 2013. This non-cash impairment charge is included in “asset impairments” in the Condensed Consolidated Statements of Operations.

These seven facilities and their associated results of operations (including asset impairments) will be reclassified to discontinued operations in the three and nine months ended September 30, 2013.

NOTE 11. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

As of June 30, 2013, the Company had $176.6 million aggregate principal amount of the Notes outstanding. The Notes are fully and unconditionally guaranteed, jointly and severally on an unsecured senior subordinated basis, by the Company’s 100% owned subsidiaries.

The following supplemental tables present condensed consolidating balance sheets for the Company and its subsidiary guarantors as of June 30, 2013 and December 31, 2012; the condensed consolidating statements of operations for the three and six months ended June 30, 2013 and 2012; the condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2013 (total comprehensive income was the same as net income for the respective three and six months ended June 30, 2012); and the condensed consolidating statements of cash flows for the six months ended June 30, 2013 and 2012. These supplemental tables reflect the effects of the corrections to our Condensed Consolidated Financial Statements in Note 1.

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Condensed Consolidating Balance Sheet as of June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation		Subsidiary Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	11,040	$	—		$	11,040
Restricted cash		280		—		—			280
Accounts receivable, net		—		39,331		—			39,331
Prepaid expenses		3,951		3,479		—			7,430
Other current assets		1,176		1,422		—			2,598
Income taxes receivable		3,094		—		—			3,094
Deferred income taxes		6,352		—		—			6,352
Current assets of discontinued operations		—		3,135		—			3,135
Total current assets		14,853		58,407		—			73,260
Property and equipment, net		8,194		123,212		—			131,406
Goodwill		—		519,093		—			519,093
Other intangible assets, net		—		281,079		—			281,079
Other assets, net		17,766		539		—			18,305
Investment in subsidiaries		935,682		—		(935,682	)		—
Total assets	$	976,495	$	982,330	$	(935,682	)	$	1,023,143
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$	6,276	$	1,231	$	—		$	7,507
Accrued liabilities		25,229		15,972		—			41,201
Other current liabilities		967		14,505		—			15,472
Current liabilities of discontinued operations		—		2,287		—			2,287
Total current liabilities		32,472		33,995		—			66,467
Long-term debt		567,174		—		—			567,174
Other long-term liabilities		1,827		6,815		—			8,642
Long-term liabilities of discontinued operations		—		5,838		—			5,838
Deferred income taxes		107,310		—		—			107,310
Total liabilities		708,783		46,648		—			755,431
Total stockholder’s equity		267,712		935,682		(935,682	)		267,712
Total liabilities and stockholder’s equity	$	976,495	$	982,330	$	(935,682	)	$	1,023,143

16

Condensed Consolidating Balance Sheet as of December 31, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation		Subsidiary Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	19,058	$	—		$	19,058
Restricted cash		364		—		—			364
Accounts receivable, net		—		36,737		—			36,737
Prepaid expenses		1,830		2,951		—			4,781
Other current assets		1,184		1,407		—			2,591
Income taxes receivable		1,109		—		—			1,109
Deferred income taxes		6,352		—		—			6,352
Current assets of discontinued operations		—		2,759		—			2,759
Total current assets		10,839		62,912		—			73,751
Property and equipment, net		8,578		121,803		—			130,381
Goodwill		—		518,953		—			518,953
Other intangible assets, net		—		294,085		—			294,085
Other assets, net		19,905		491		—			20,396
Investment in subsidiaries		957,075		—		(957,075	)		—
Total assets	$	996,397	$	998,244	$	(957,075	)	$	1,037,566
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$	5,887	$	914	$	—		$	6,801
Accrued liabilities		21,843		14,623		—			36,466
Current portion of long-term debt		4,822		18		—			4,840
Other current liabilities		1,143		9,943		—			11,086
Current liabilities of discontinued operations		—		2,372		—			2,372
Total current liabilities		33,695		27,870		—			61,565
Long-term debt		584,535		—		—			584,535
Other long-term liabilities		1,716		7,024		—			8,740
Long-term liabilities of discontinued operations		—		6,275		—			6,275
Deferred income taxes		107,289		—		—			107,289
Total liabilities		727,235		41,169		—			768,404
Total stockholder’s equity		269,162		957,075		(957,075	)		269,162
Total liabilities and stockholder’s equity	$	996,397	$	998,244	$	(957,075	)	$	1,037,566

17

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	9		$	118,566		$	—		$	118,575
Management fee revenues		21,326			—			(21,326	)		—
Total net revenues		21,335			118,566			(21,326	)		118,575
Operating expenses:
Salaries and benefits		7,587			49,262			—			56,849
Facilities and other operating costs		2,980			34,404			—			37,384
Provision for doubtful accounts		—			1,851			—			1,851
Depreciation and amortization		1,107			4,225			—			5,332
Asset impairments		—			10,859			—			10,859
Management fee expense		—			21,326			(21,326	)		—
Total operating expenses		11,674			121,927			(21,326	)		112,275
Operating income		9,661			(3,361	)		—			6,300
Interest expense		(12,163	)		—			—			(12,163	)
Other income		236			5			—			241
Income (loss) from continuing operations before income taxes		(2,266	)		(3,356	)		—			(5,622	)
Income tax expense		(925	)		(1,370	)		—			(2,295	)
Equity in income of subsidiaries, net of tax		(2,260	)		—			2,260			—
Loss from continuing operations		(3,601	)		(1,986	)		2,260			(3,327	)
Loss from discontinued operations, net of tax		—			(274	)		—			(274	)
Net loss	$	(3,601	)	$	(2,260	)	$	2,260		$	(3,601	)

18

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	18		$	114,959		$	—		$	114,977
Management fee revenues		20,813			—			(20,813	)		—
Total net revenues		20,831			114,959			(20,813	)		114,977
Operating expenses:
Salaries and benefits		6,722			47,863			—			54,585
Facilities and other operating costs		720			32,532			—			33,252
Provision for doubtful accounts		—			1,465			—			1,465
Depreciation and amortization		1,091			3,936			—			5,027
Management fee expense		—			20,813			(20,813	)		—
Total operating expenses		8,533			106,609			(20,813	)		94,329
Operating income		12,298			8,350			—			20,648
Interest expense		(12,552	)		—			—			(12,552	)
Other income		248			3			—			251
Income (loss) from continuing operations before income taxes		(6	)		8,353			—			8,347
Income tax expense		(3	)		3,503			—			3,500
Equity in income of subsidiaries, net of tax		4,397			—			(4,397	)		—
Income from continuing operations		4,394			4,850			(4,397	)		4,847
Loss from discontinued operations, net of tax		—			(453	)		—			(453	)
Net income	$	4,394		$	4,397		$	(4,397	)	$	4,394

19

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	20		$	229,139		$	—		$	229,159
Management fee revenues		42,046			—			(42,046	)		—
Total net revenues		42,066			229,139			(42,046	)		229,159
Operating expenses:
Salaries and benefits		15,105			97,712			—			112,817
Facilities and other operating costs		3,568			67,404			—			70,972
Provision for doubtful accounts		—			4,026			—			4,026
Depreciation and amortization		2,215			7,972			—			10,187
Asset impairments		—			10,859			—			10,859
Management fee expense		—			42,046			(42,046	)		—
Total operating expenses		20,888			230,019			(42,046	)		208,861
Operating income		21,178			(880	)		—			20,298
Interest expense		(23,642	)		—			—			(23,642	)
Other income		498			5			—			503
Income (loss) from continuing operations before income taxes		(1,966	)		(875	)		—			(2,841	)
Income tax expense		(769	)		(343	)		—			(1,112	)
Equity in income of subsidiaries, net of tax		(1,017	)		—			1,017			—
Loss from continuing operations		(2,214	)		(532	)		1,017			(1,729	)
Loss from discontinued operations, net of tax		—			(485	)		—			(485	)
Net loss	$	(2,214	)	$	(1,017	)	$	1,017		$	(2,214	)

20

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	39		$	223,160		$	—		$	223,199
Management fee revenues		42,287			—			(42,287	)		—
Total net revenues		42,326			223,160			(42,287	)		223,199
Operating expenses:
Salaries and benefits		13,765			95,408			—			109,173
Facilities and other operating costs		1,366			64,104			—			65,470
Provision for doubtful accounts		—			3,808			—			3,808
Depreciation and amortization		2,175			7,746			—			9,921
Management fee expense		—			42,287			(42,287	)		—
Total operating expenses		17,306			213,353			(42,287	)		188,372
Operating income		25,020			9,807			—			34,827
Interest expense		(24,338	)		—			—			(24,338	)
Other income		487			7			—			494
Income from continuing operations before income taxes		1,169			9,814			—			10,983
Income tax expense		498			4,186			—			4,684
Equity in income of subsidiaries, net of tax		4,382			—			(4,382	)		—
Income from continuing operations		5,053			5,628			(4,382	)		6,299
Loss from discontinued operations, net of tax		—			(1,246	)		—			(1,246	)
Net income	$	5,053		$	4,382		$	(4,382	)	$	5,053

21

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Net loss	$	(3,601	)	$	(2,260	)	$	2,260	$	(3,601	)
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $5)		7			—			—		7
Total comprehensive loss	$	(3,594	)	$	(2,260	)	$	2,260	$	(3,594	)

22

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Net loss	$	(2,214	)	$	(1,017	)	$	1,017	$	(2,214	)
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $21)		31			—			—		31
Total comprehensive loss	$	(2,183	)	$	(1,017	)	$	1,017	$	(2,183	)

23

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	5,210		$	20,158		$	—	$	25,368
Cash flows from investing activities:
Additions of property and equipment		(2,450	)		(6,982	)		—		(9,432	)
Proceeds from the sale of property and equipment		—			36			—		36
Acquisition of business, net of cash acquired		(140	)		—			—		(140	)
Net cash used in investing activities		(2,590	)		(6,946	)		—		(9,536	)
Cash flows from financing activities:
Intercompany transfers		21,033			(21,033	)		—		—
Repayment of long-term debt		(4,822	)		(197	)		—		(5,019	)
Repayments on revolving line of credit		(17,995	)		—			—		(17,995	)
Capital contributed to Parent		(599	)		—			—		(599	)
Capitalized financing costs		(217	)		—			—		(217	)
Other financing activities		(20	)		—			—		(20	)
Net cash used in financing activities		(2,620	)		(21,230	)		—		(23,850	)
Net decrease in cash and cash equivalents		—			(8,018	)		—		(8,018	)
Cash and cash equivalents — beginning of period		—			19,058			—		19,058
Cash and cash equivalents — end of period	$	—		$	11,040		$	—	$	11,040

24

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	12,498		$	20,090		$	—	$	32,588
Cash flows from investing activities:
Additions of property and equipment		(1,917	)		(5,424	)		—		(7,341	)
Other investing activities		(68	)		39			—		(29	)
Net cash used in investing activities		(1,985	)		(5,385	)		—		(7,370	)
Cash flows from financing activities:
Intercompany transfers		830			(830	)		—		—
Borrowings under long-term debt		84,096			—			—		84,096
Repayment of long-term debt		(87,638	)		(461	)		—		(88,099	)
Borrowings on revolving line of credit		18,000			—			—		18,000
Repayments on revolving line of credit		(13,505	)		—			—		(13,505	)
Capital contributed to Parent		(9,524	)		—			—		(9,524	)
Capitalized financing costs		(2,772	)		—			—		(2,772	)
Net cash used in financing activities		(10,513	)		(1,291	)		—		(11,804	)
Net increase in cash and cash equivalents		—			13,414			—		13,414
Cash and cash equivalents — beginning of period		—			10,183			—		10,183
Cash and cash equivalents — end of period	$	—		$	23,597		$	—	$	23,597

25

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this Quarterly Report. Unless the context otherwise requires, in this management’s discussion and analysis of financial condition and results of operations, the terms “our company,” “we,” “us,” “the Company” and “our” refer to CRC Health Corporation and its consolidated subsidiaries.

OVERVIEW

We are a leading provider of treatment services related to substance abuse, troubled youth, and other addiction diseases and behavioral disorders. We deliver our services through our three divisions: recovery, youth and weight management. Our recovery division provides substance abuse and behavioral disorder treatment services through our residential treatment facilities and outpatient treatment clinics. Our youth division provides therapeutic educational programs to underachieving young people through residential schools and outdoor programs. Our weight management division provides treatment services through adolescent and adult weight management programs as well as eating disorder facilities.

As of June 30, 2013 our recovery division, operated 30 inpatient, 16 outpatient facilities, and 58 comprehensive treatment centers (“CTCs”) in 21 states. Our youth division operated 15 adolescent and young adult programs in 6 states. Our weight management division operated 17 facilities in 8 states, and one in the United Kingdom.

We had 2,011 and 1,938 available beds in our residential and extended care facilities as of June 30, 2013 and December 31, 2012, respectively.

The three and six month periods ended June 30, 2012 reflect the effects of the corrections in Note 1—Overview and Basis of Presentation of Notes to Condensed Consolidated Financial Statements.

EXECUTIVE SUMMARY

During the three months ended June 30, 2013 we generated $118.6 million in net client service revenues, an increase of $3.6 million as compared to the three months ended June 30, 2012, this increase was primarily due to increases of $5.8 million and $0.1 million in our recovery and weight management divisions, respectively, offset by a decrease of $2.3 million in our youth division. During the three months ended June 30, 2013, operating income decreased by $14.3 million, or 69.5%, as compared to the three months ended June 30, 2012, primarily due to a decrease of $10.5 million in our youth division, a decrease of $1.4 million in our weight management division, and a decrease of $3.2 million in corporate, offset by an increase of $0.7 million in our recovery division.

During the six months ended June 30, 2013 we generated $229.2 million in net client service revenues, an increase of $6.0 million as compared to the six months ended June 30, 2012, this increase was primarily due to increases of $9.3 million and $0.3 million in our recovery and weight management divisions, respectively, offset by a decrease of $3.6 million in our youth division. During the six months ended June 30, 2013, operating income decreased by $14.5 million, or 41.7%, as compared to the six months ended June 30, 2012, primarily due to a decrease of $11.6 million in our youth division, a decrease of $3.6 million in corporate, and a decrease of $0.9 million in our weight management division, offset by an increase of $1.6 million in our recovery division.

The following table presents the sources of consolidated net client service revenues as a percentage of revenue:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Private		53	%		57	%		53	%		56	%
Commercial		25	%		23	%		25	%		23	%
Government		22	%		20	%		22	%		21	%
Total		100	%		100	%		100	%		100	%

26

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

General

The accompanying discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles of the United States. The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, net revenue and expenses. We have based our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our senior management has reviewed our critical accounting policies and their application in the preparation of our financial statements and related disclosures and discussed the development, selection and disclosure of significant estimates. To the extent that actual results differ from those estimates, our future results of operations may be affected. We believe that there have not been any significant changes during the six months ended June 30, 2013 to the items that we have previously reported in our critical accounting policies in management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2012 in our Annual Report on Form 10-K.

RESULTS OF OPERATIONS

The following table presents our results of operations (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues:
Recovery	$	94,269		$	88,513		$	184,944		$	175,609
Youth		17,556			19,823			32,494			36,125
Weight management		6,741			6,623			11,701			11,423
Corporate		9			18			20			42
Total net client service revenues		118,575			114,977			229,159			223,199
Operating expenses:
Recovery		65,452			60,430			130,236			122,532
Youth		26,514			18,289			44,080			36,087
Weight management		8,635			7,077			13,657			12,446
Corporate		11,674			8,533			20,888			17,307
Total operating expenses		112,275			94,329			208,861			188,372
Operating income (loss):
Recovery		28,817			28,083			54,708			53,077
Youth		(8,958	)		1,534			(11,586	)		38
Weight management		(1,894	)		(454	)		(1,956	)		(1,023	)
Corporate		(11,665	)		(8,515	)		(20,868	)		(17,265	)
Operating income		6,300			20,648			20,298			34,827
Interest expense		(12,163	)		(12,552	)		(23,642	)		(24,338	)
Other income		241			251			503			494
Income (loss) from continuing operations before income taxes		(5,622	)		8,347			(2,841	)		10,983
Income tax expense (benefit)		(2,295	)		3,500			(1,112	)		4,684
Income (loss) from continuing operations, net of tax		(3,327	)		4,847			(1,729	)		6,299
Loss from discontinued operations, net of tax		(274	)		(453	)		(485	)		(1,246	)
Net income (loss)	$	(3,601	)	$	4,394		$	(2,214	)	$	5,053

27

The following table compares total facility statistics:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Recovery
Residential and outpatient facilities
Net client service revenues (in thousands)	$	58,732	$	55,109	$	114,946	$	109,874
Patient days		150,049		141,065		292,981		280,903
Net client service revenues per patient day	$	391.42	$	390.66	$	392.33	$	391.15
CTCs
Net client service revenues (in thousands)	$	35,537	$	33,404	$	69,999	$	65,735
Patient days		2,722,713		2,563,856		5,349,897		5,069,827
Net client service revenues per patient day	$	13.05	$	13.03	$	13.08	$	12.97
Youth
Residential facilities
Net client service revenues (in thousands)	$	9,923	$	12,207	$	19,408	$	23,117
Patient days		31,847		41,295		62,604		79,869
Net client service revenues per patient day	$	311.58	$	295.60	$	310.01	$	289.44
Outdoor programs
Net client service revenues (in thousands)	$	7,633	$	7,616	$	13,086	$	13,008
Patient days		16,351		15,441		27,887		26,689
Net client service revenues per patient day	$	466.82	$	493.23	$	469.25	$	487.39
Weight Management
Net client service revenues (in thousands)	$	6,741	$	6,623	$	11,701	$	11,423
Patient days		17,833		20,316		29,920		32,283
Net client service revenues per patient day	$	378.01	$	326.00	$	391.08	$	353.84

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2012

Recovery

Net client service revenues increased $5.8 million, or 6.5%, primarily due to a $3.6 million increase in our residential facilities and a $2.1 million increase in our CTC facilities. The increase in revenues at our residential facilities was driven in part by the re-opening of New Life Lodge in April 2012, and certain bed expansions at two residential facilities in Pennsylvania. The increase in revenues at our CTC facilities was primarily due to increased patient days at our facilities driven by marketing programs and clinically appropriate retention efforts.

Operating expenses increased $5.0 million, or 8.3%, primarily due to a $3.2 million increase related to our residential facilities, a $1.3 million increase related to our CTC facilities and a $0.5 million increase in direct administrative cost related to the recovery division. The increased operating expenses at our residential facilities were primarily due to increases in salaries, wages and benefits, outside services and other operating costs associated with increased patient days. The increased operating expenses at our CTC facilities was primarily due to increased marketing activities and employee salaries, wages and benefits associated with increased patient days.

Youth

Net client service revenues decreased by $2.3 million, or 11.4%, primarily due to a decrease in patient days at our residential facilities.

Operating expenses increased $8.2 million, or 45.0%, due to $8.0 million of asset impairments recorded in the second quarter of fiscal 2013.

Weight Management

Net client service revenues increased by $0.1 million, or 1.8%, primarily due to increases in patient days in our adult residential weight loss facility offset by a decrease in patient days in our adolescent weight loss programs.

28

Operating expenses increased $1.6 million, or 22.0%, primarily due to $2.9 million of asset impairments recorded in the second quarter of fiscal 2013 offset by a decrease in salaries, wages and benefits.

Corporate

Operating expenses increased $3.1 million, or 36.8%, primarily due to a $2.5 million increase in legal expenses in the second quarter of fiscal 2013 and a $0.7 million increase in salaries, wages and benefits.

Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2012

Recovery

Net client service revenues increased $9.3 million, or 5.3%, primarily due to a $5.1 million increase in our residential facilities and a $4.3 million increase in our CTC facilities. The increase in revenues at our residential facilities was driven in part by the re-opening of New Life Lodge in April 2012, and certain bed expansions at two residential facilities in Pennsylvania. The increase in revenues at our CTC facilities was primarily due to increased patient days at our facilities driven by marketing programs and clinically appropriate retention efforts.

Operating expenses increased $7.7 million, or 6.3%, primarily due to a $4.8 million increase related to our residential facilities, a $2.5 million increase related to our CTC facilities and a $0.4 million increase in direct administrative cost in the recovery division. The increased operating expenses at our residential facilities were primarily due to increases in salaries, wages and benefits, outside services and other operating costs associated with increased patient days. The increased operating expenses at our CTC facilities was primarily due to increased marketing activities and employee salaries, wages and benefits associated with increased patient days.

Youth

Net client service revenues decreased by $3.6 million, or 10.1%, primarily due to a decrease in patient days at our residential facilities.

Operating expenses increased $8.0 million, or 22.1%, due to $8.0 million of asset impairments recorded in the second quarter of fiscal 2013.

Weight Management

Net client service revenues increased by $0.3 million, or 2.4%, primarily due to increases in patient days in our adult residential weight loss facility offset by a decrease in patient days in our adolescent weight loss programs.

Operating expenses increased $1.2 million, or 9.7%, primarily due to $2.9 million of asset impairments recorded in the second quarter of fiscal 2013 offset by a decrease in salaries, wages and benefits.

Corporate

Operating expenses increased $3.6 million, or 20.7%, primarily due to a $2.5 million increase in legal expenses in the second quarter of fiscal 2013 and a $1.1 million increase in salaries, wages and benefits.

Interest expense

The following table presents the components of interest expense (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Contractual interest on total debt	$	11,013		$	11,304		$	21,933		$	21,544
Amortization of debt discount and capitalized financing costs		1,332			1,354			2,122			3,014
Interest capitalized to property and equipment, net		(182	)		(106	)		(413	)		(220	)
Total interest expense	$	12,163		$	12,552		$	23,642		$	24,338

Contractual interest on total debt decreased by $0.3 million during the three months ended June 30, 2013 as compared to the same period in the prior year, primarily due to a lower Term Loan balance and interest rate during the three months ended June 30, 2013 when compared to the three months ended June 30, 2012.

Contractual interest on total debt increased by $0.4 million for the six months ended June 30, 2013, as compared to the same period in the prior year, primarily due to the fact that a portion of the Company’s term loans were refinanced in March 2012 at a higher principal balance. This refinancing event also resulted in the acceleration of approximately $0.7 million of debt discount and capitalized financing costs amortization which was recorded during the six months ended June 30, 2012.

29

Income tax expense

We calculate our income tax expense for interim periods by applying the full year’s estimated effective tax rate to our financial statements for interim periods.

For the three months ended June 30, 2013 and 2012, our tax benefit and expense on continuing operations was $2.3 million and $3.5 million, respectively, representing an effective tax rate of 40.8% and 41.9%. The change in the effective tax rate is primarily due to the decreases to state tax expense and interest expense related to uncertain tax positions.

For the six months ended June 30, 2013 and 2012, our tax benefit and expense on continuing operations was $1.1 million and $4.7 million, respectively, representing an effective tax rate of 39.1% and 42.6%. The change in the effective tax rate is due primarily to the decreases to state tax expense and interest expense related to uncertain tax positions.

Loss from discontinued operations, net of tax

During the three and six months ended June 30, 2013, loss from discontinued operations, net of tax, decreased by $0.2 million and $0.8 million, respectively, as compared to the same period in the prior year. The decrease is due to discontinuing two entities in 2012 and none in 2013.

Sources and Uses of Cash

Our principal sources of liquidity for operating activities are payments from self-pay patients, commercial payors and government programs for treatment services, and our revolving line of credit. We receive cash from our self-payors in advance, upon completion of treatment, or over time as accounts receivable are collected. Cash from commercial payors and government programs is typically received upon the collection of accounts receivable, which are generated upon delivery of treatment services.

	Six Months Ended June 30,
	2013			2012
	(In thousands)
Net cash provided by operating activities	$	25,368		$	32,588
Net cash used in investing activities		(9,536	)		(7,370	)
Net cash used in financing activities		(23,850	)		(11,804	)
Net increase (decrease) in cash	$	(8,018	)	$	13,414

Cash provided by operating activities was $25.4 million for the six months ended June 30, 2013, as compared to $32.6 million during the same period in 2012. The decrease of $7.2 million is primarily due to an increase in accounts receivable related to increased revenues and an increase in prepaid expenses related to the timing of business insurance renewals.

Cash used in investing activities was $9.5 million for the six months ended June 30, 2013, as compared to $7.4 million during the same period of 2012. The increase of $2.1 million is primarily due to an increase in capital expenditures.

Cash used in financing activities was $23.9 million for the six months ended June 30, 2013, as compared to $11.8 million during the same period in 2012. The increase of $12.1 million is due to an increase in net repayments on long-term debt and Revolving Line of Credit , partially offset by a decrease in capitalized financing costs and cash distributed to parent. The decrease in capital distributed to parent was related to a year over year decrease in principal payments made by our parent company on its debt.

Financing and Liquidity

A significant portion of our cash generated from operations goes to service our debt and maintain our facilities. We anticipate that cash generated by current operations, funds available under the revolving portion of our senior secured credit facility and existing cash and cash equivalents will be sufficient to meet working capital requirements, service our debt and finance capital expenditures over the next 12 months.

30

Credit Agreements — Refer to Note 3 to Unaudited Condensed Consolidated Financial Statements for further discussion about our long-term borrowing arrangements.

Under the terms of our borrowing arrangements, we are required to comply with various covenants, including the maintenance of certain financial ratios, the calculations of which are based on Adjusted EBITDA, as defined in our credit agreements. As of June 30, 2013, we were in compliance with all such covenants. A breach of these could result in a default under our credit facilities and in our being unable to borrow additional amounts under our revolving credit facility. If an event of default occurs, the lenders could elect to declare all amounts borrowed under our credit facilities to be immediately due and payable and the lenders under our term loans and revolving credit facility could proceed against the collateral securing the indebtedness.

The computation of Adjusted EBITDA is provided below to provide an understanding of the impact that Adjusted EBITDA has on our ability to comply with certain covenants in our borrowing arrangements that are tied to these measures and to borrow under the credit facility. Adjusted EBITDA should not be considered as an alternative to net income (loss) or cash flows from operating activities (which are determined in accordance with GAAP) and is not being presented as an indicator of operating performance or a measure of liquidity. Other companies may define Adjusted EBITDA differently and, as a result, such measures may not be comparable to our Adjusted EBITDA.

The following table reconciles our net income (loss) to our Adjusted EBITDA for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Net Income (Loss) Attributable to CRC Health Corporation:	$	(3,601	)	$	4,394	$	(2,214	)	$	5,053
Depreciation and amortization (1)		5,332			5,079		10,187			10,008
Income tax expense (benefit) (1)		(2,545	)		3,191		(1,499	)		3,892
Interest expense		12,163			12,552		23,642			24,338
EBITDA		11,349			25,216		30,116			43,291
Adjustments to EBITDA:
Discontinued operations		381			559		603			1,187
Asset impairments (1)		10,859			—		10,859			—
Non-impairment restructuring activities (1)		218			212		384			930
Stock-based compensation expense		774			531		1,332			1,016
Foreign exchange translation		(1	)		1		33			(28	)
Loss on disposal of property and equipment (1)		98			337		190			418
Management fees		600			559		1,200			1,134
Non-recurring legal costs		2,916			496		3,474			812
Debt costs		106			69		167			177
Other non-cash charges and non-recurring costs		—			242		—			237
Total adjustments to EBITDA		15,951			3,006		18,242			5,883
Adjusted EBITDA	$	27,300		$	28,222	$	48,358		$	49,174

⁽¹⁾  Includes amounts related to both continuing operations and discontinued operations.

Off-Balance Sheet Obligations

As of June 30, 2013, our off-balance sheet obligations consisted of $9.2 million in letters of credit and $0.2 million in loan purchase commitments related to our Loan Program.

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Obligations and Commitments

There were no material changes in our contractual obligations during the six months ended June 30, 2013 compared to the contractual obligations table included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

For quantitative and qualitative disclosures about market risk affecting us, see “Quantitative and Qualitative Disclosure about Market Risk” in Item 7A of Part II of our Annual Report on Form 10-K for the year ended December 31, 2012. As of June 30, 2013, our exposure to market risk has not changed materially since December 31, 2012.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures. Based on that evaluation, the CEO and CFO have concluded that as of June 30, 2013, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed was accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting that occurred during the first half of 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In a complaint initially filed on July 6, 2011, and amended on August 25, 2011, in Multnomah County Circuit Court in Oregon, 17 former students of one of our previously closed therapeutic boarding school facilities allege claims for intentional and negligent infliction of emotional distress, battery, breach of contract and negligence arising out of their treatment in certain programs of our school. We and our subsidiaries, Aspen Education Group, Inc. (“Aspen”) and Mount Bachelor Educational Center, Inc. (“MBA”), are among the defendants in the pending litigation. The plaintiffs seek a total of $26.0 million in relief. A second and third suit were filed in November 2011 and January 2013, respectively, in Multnomah County Circuit Court in Oregon by 14 former and 13 former students, respectively, also alleging abuse. The plaintiffs seek a total of $23 million in relief in the second suit and a total of $19.5 million in relief in the third suit. We and the other defendants intend to defend vigorously the pending lawsuits. In consultation with counsel and based on our preliminary investigation into the facts alleged, we believe these cases are without merit. However, at this time, we are unable to predict the outcome of the lawsuit, the possible loss or range of loss, if any, after consideration of the extent of insurance coverage associated with the resolution of the lawsuit or any potential effect it may have on us or our operations. On May 10, 2012, Nautilus Insurance Corporation filed a complaint against CRC Health Group Inc. and certain related entities seeking declaratory relief in the federal district court in Portland, Oregon. The Complaint seeks a judicial determination as to whether the Nautilus general and healthcare professional liability insurance policies provide coverage for these suits against MBA and asks the court to enter judgment that the policies are null and void, or alternatively that the policies do not cover these specific lawsuits, and to declare that Nautilus has no duty to defend or indemnify MBA, Aspen or CRC. This litigation with Nautilus Insurance Corporation has been stayed pending resolution of the underlying suits against MBA. In consultation with counsel and based on our preliminary review of the matters alleged, we believe this suit is without merit and we are vigorously defending the matter.

In a complaint filed in August 2011, a suit against our New Life Lodge facility was brought by Kathy Mauk as administrator of the estate of Lindsey Poteet a/k/a Lindsey Richardson, deceased and on behalf of the wrongful death beneficiary of Lindsey Poteet a/k/a Lindsey Richardson, Arwen Richardson, vs. CRC Health Tennessee, Inc. dba New Life Lodge and CRC Health Group, Inc. dba New Life Lodge. The suit alleges negligence and medical malpractice resulting in wrongful death and seeks a total $32.0 million in compensatory and punitive damages. A second suit was brought in December 2012 against our New Life Lodge facility by Charity Comage as administrator of the estate of and on behalf of Savon Kinney, deceased vs CRC Health Tennessee, Inc. dba New Life Lodge and CRC Health Group, Inc. dba New Life Lodge, American Behavioral Consultants, LLC and Holly Liter, APN. The second suit alleges negligence and medical malpractice resulting in the wrongful death and seeking a total $14.5 million in compensatory and punitive damages. American Behavioral Consultants, LLC served as an independent contractor for New Life Lodge and Ms. Holly Liter was an employee of American Behavioral Consultants, LLC. A third suit has been filed against our New Life Lodge by Penny Bryant, mother of Patrick Bryant, deceased, vs. CRC Health Tennessee, Inc. and Jonathan Butler, M.D. This suit was originally filed in 2011 and then dismissed without prejudice in October 2012 and was re-filed in June 2013. This suit alleges negligence resulting in the wrongful death of Patrick Bryant and seeks a total of $13.0 million in compensatory and punitive damages. We intend to defend vigorously these lawsuits. In consultation with counsel and based on our preliminary investigation into the facts alleged, we believe these cases are without merit. Although the Company believes the amounts reserved are adequate based on currently available information, the estimation process involves a considerable amount of judgment by management and the ultimate amounts could vary materially.

Our New Life Lodge facility is currently responding to a civil investigative demand (“CID”) from the Office of the Attorney General of the State of Tennessee inquiring about possible false claims for payment related to services provided to TennCare recipients for the period 2007 to 2011. The United States Department of Justice is participating in this investigation and also has requested information from New Life Lodge. We are cooperating fully with the investigation. Such CIDs are often associated with previously filed qui tam actions, or lawsuits filed under seal under the False Claims Act (“FCA”). Qui tam actions are brought by private plaintiffs suing on behalf of the federal government for alleged FCA violations. The Company firmly believes that any false claims action is without merit. If litigation results, we intend to vigorously defend our position; however, we cannot predict the outcome or timing of such litigation. Although the Company believes that the amounts reserved are adequate based on currently available information, the estimation process involves a considerable amount of judgment by management and the ultimate amounts could vary materially.

33

We are involved in other litigation and regulatory investigations arising in the ordinary course of business. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on our future financial position or results from operations and cash flows, except as discussed above.

Item 1A. Risk Factors

As of June 30, 2013, there have been no material changes to the factors disclosed in Item 1A Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2012.

Item 6. Exhibits

The Exhibit Index beginning on page 36 of this report sets forth a list of exhibits.

34

SIGNATURE

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 thereunto duly authorized.

Date: August 14, 2013

CRC HEALTH CORPORATION (Registrant)
By	/s/ LEANNE M. STEWART
	LeAnne M. Stewart, Chief Financial Officer (Principal Financial Officer and duly authorized signatory)

35

CRC HEALTH CORPORATION

EXHIBIT INDEX

31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer ‡
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer ‡
32.1	Section 1350 Certification of Principal Executive Officer †
32.2	Section 1350 Certification of Principal Financial Officer †
101.INS	XBRL Instance Document ‡
101.SCH	XBRL Taxonomy Extension Schema ‡
101.CAL	XBRL Taxonomy Extension Calculation Linkbase ‡
101.DEF	XBRL Taxonomy Extension Definition Linkbase ‡
101.LAB	XBRL Taxonomy Extension Label Linkbase ‡
101.PRE	XBRL Taxonomy Extension Presentation Linkbase ‡

‡ Filed herewith.

† Furnished herewith.

36

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Andrew Eckert, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CRC Health Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013	/s/    ANDREW ECKERT
	Andrew Eckert Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, LeAnne M. Stewart, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CRC Health Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013	/s/ LEANNE M. STEWART
	LeAnne M. Stewart Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrew Eckert, Chief Executive Officer of CRC Health Corporation (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

• the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2013, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2013

/s/    ANDREW ECKERT

Andrew Eckert

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to CRC Health Corporation and will be retained by CRC Health Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, LeAnne M. Stewart, Chief Financial Officer of CRC Health Corporation (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

• the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2013, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2013

/s/    LEANNE M. STEWART

LeAnne M. Stewart

Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to CRC Health Corporation and will be retained by CRC Health Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Asset Impairments and Subsequent Events

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Asset Impairments and Subsequent Events

NOTE 10. ASSET IMPAIRMENTS AND SUBSEQUENT EVENTS

In early July 2013, the Company began the process of closing five of its Youth Division facilities and one of its Weight Management Division facilities. As a result of these actions, the Company recorded non-cash impairment charges related to property and equipment and other intangible assets in the amount of $0.6 million and $6.6 million, respectively, in the three months ended June 30, 2013. These charges are included in “asset impairments” in the Condensed Consolidated Statements of Operations. The Company expects the closure process for each of these facilities to be completed by September 30, 2013. Also, the Company anticipates recording employee severance charges of approximately $0.5 million and lease termination charges in the range of $9.0 to $10.0 million, respectively, in the three months ending September 30, 2013 related to these facility closures.

On August 1, 2013, the Company sold the Oakley School, a Youth Division facility. In connection with this sale, the Company recorded a $3.7 million charge related to other intangible assets in the three months ended June 30, 2013. This non-cash impairment charge is included in “asset impairments” in the Condensed Consolidated Statements of Operations.

These seven facilities and their associated results of operations (including asset impairments) will be reclassified to discontinued operations in the three and nine months ended September 30, 2013.

XML

Segment Information - Selected Financial Information for Company's Reportable Segments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Total net revenue	$ 118,575	$ 114,977	$ 229,159	$ 223,199
Operating income	6,300	20,648	20,298	34,827
Interest expense	(12,163)	(12,552)	(23,642)	(24,338)
Other income	241	251	503	494
Income (loss) from continuing operations before income taxes	(5,622)	8,347	(2,841)	10,983
Operating Segments [Member] | Recovery [Member]
Segment Reporting Information [Line Items]
Total net revenue	94,269	88,513	184,944	175,609
Operating income	28,817	28,083	54,708	53,077
Operating Segments [Member] | Youth [Member]
Segment Reporting Information [Line Items]
Total net revenue	17,556	19,823	32,494	36,125
Operating income	(8,958)	1,534	(11,586)	38
Operating Segments [Member] | Weight Management [Member]
Segment Reporting Information [Line Items]
Total net revenue	6,741	6,623	11,701	11,423
Operating income	(1,894)	(454)	(1,956)	(1,023)
Operating Segments [Member] | Corporate [Member]
Segment Reporting Information [Line Items]
Total net revenue	9	18	20	42
Operating income	$ (11,665)	$ (8,515)	$ (20,868)	$ (17,265)

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Net client service revenues	$ 118,575	$ 114,977	$ 229,159	$ 223,199
Operating expenses:
Salaries and benefits	56,849	54,585	112,817	109,173
Facilities and other operating costs	37,384	33,252	70,972	65,470
Provision for doubtful accounts	1,851	1,465	4,026	3,808
Depreciation and amortization	5,332	5,027	10,187	9,921
Asset impairments	10,859		10,859
Total operating expenses	112,275	94,329	208,861	188,372
Operating income	6,300	20,648	20,298	34,827
Interest expense	(12,163)	(12,552)	(23,642)	(24,338)
Other income	241	251	503	494
Income (loss) from continuing operations before income taxes	(5,622)	8,347	(2,841)	10,983
Income tax expense (benefit)	(2,295)	3,500	(1,112)	4,684
Income (loss) from continuing operations, net of tax	(3,327)	4,847	(1,729)	6,299
Loss from discontinued operations, net of tax	(274)	(453)	(485)	(1,246)
Net income (loss)	$ (3,601)	$ 4,394	$ (2,214)	$ 5,053

XML

Long-Term Debt

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

NOTE 3. LONG-TERM DEBT

Long-term debt as of June 30, 2013 and December 31, 2012 consists of the following (in thousands):

Term Loans and Revolving Line of Credit

	June 30, 2013		December 31, 2012
Term loans, net of discount of $2,250 in 2013 and $2,751 in 2012	$	381,555	$	385,875
Revolving line of credit		9,005		27,000
Senior subordinated notes, net of discount of $682 in 2013 and $814 in 2012		176,614		176,482
Other		—		18
Total debt		567,174		589,375
Less: current portion of long-term debt		—		(4,840	)
Total long-term debt	$	567,174	$	584,535

Term Loans

On March 7, 2012, the aggregate principal amount of $80.9 million of Term Loans (the “Term Loans B-1”) was refinanced with cash proceeds (net of related fees and expenses) of an aggregate principal amount of $87.6 million of new Term Loans that mature on November 16, 2015 (the “Term Loans B-3”). New creditors and existing Term Loans B-1 creditors represented $67.0 million and $20.6 million of the Term Loans B-3 principal amount, respectively. Of the $20.6 million related to existing creditors, $6.1 million was contributed as additional Term Loan B-3 principal. As a part of the refinancing, the Company repaid $66.4 million of the aggregate principal Term Loans B-1. This repayment was recognized as an extinguishment of debt and $0.2 million of the remaining unamortized issuance costs related to Term Loans B-1 were charged to interest expense during the three months ended March 31, 2012. The Company recognized the refinancing of the remaining aggregate principal amount of $14.5 million with existing Term Loans B-1 creditors as a modification of debt. Refinancing costs of $0.5 million associated with the modified debt were charged to interest expense during the three months ended March 31, 2012. The remaining debt issuance costs of $2.2 million related to the refinancing were capitalized and are being amortized over the life of the Term Loans B-3 using the effective interest rate method. The Term Loans B-3 was issued with an original issue discount of 4.00% which is being amortized over the term of the Term Loans B-3 using the effective interest rate method.

As of June 30, 2013, $82.8 million, net of discount of $2.2 million, are outstanding on the Term Loans B-3. Interest on these Term Loans B-3 is payable quarterly at: (i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent (but not less than 1.50%), plus an applicable margin of 7.00%, subject to an increase to 8.00% during any period that the Company’s public corporate family rating from Moody’s is not at least B3 or the Company’s public corporate credit rating from Standard & Poor’s Ratings Services (“S&P”) is not at least B-, and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00% (but, in either case, not less than 2.50%), plus an applicable margin of 6.00%, subject to an increase to 7.00% during any period that the Company’s public corporate family rating from Moody’s is not at least B3 or the Company’s public corporate rating credit rating from S&P is not at least B-. As of June 30, 2013, the entire amount of the Term Loan B-3 consisted of LIBOR loans and the interest rate thereon was 8.5%.

The Term Loans B-3 are payable in quarterly principal installments of $0.1 million on December 31, 2014 and $0.7 million over the payment period between March 31, 2015 and September 30, 2015, with the remainder due on the maturity date of November 16, 2015.

Under the terms of this refinancing, the Company was required to pay and paid, a fee equal to 1.00% of the outstanding principal amount of such lender’s Term Loans B-3 as of March 31, 2013, which totaled $0.9 million. The Company is also required to pay (i) on March 31, 2014, a fee equal to 1.50% of the outstanding principal amount of such lender’s Term Loans B-3 as of such date and (ii) on the Maturity Date, a fee equal to 1.50% of the outstanding principal amount of such lender’s Term Loans B-3 as of such date. These fees are charged to interest expense over the term of the Term Loans B-3 using the effective interest rate method.

The Term Loans B-3 are subject to a 1.00% prepayment premium to the extent the Term Loans B-3 are refinanced, or the terms thereof are amended, in either case, for the purpose of reducing the applicable yield with respect thereto, in each case prior to the first anniversary of the refinancing.

As of June 30, 2013, $298.8 million of the remaining Term Loans (the “Term Loans B-2”) are outstanding. The Term Loans B-2 matures on November 16, 2015. Interest on these Term Loans B-2 is payable monthly at: (i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent, plus an applicable margin of 4.50% and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00%, plus an applicable margin of 3.50%. As of June 30, 2013, the entire amount of the Term Loans B-2 consisted of LIBOR loans and the interest rate thereon was 4.70%.

The Term Loans B-2 are payable in quarterly principal installments of $0.4 million on December 31, 2014 and $2.4 million over the payment period between March 31, 2015 and September 30, 2015, with the remainder due on the maturity date of November 16, 2015.

The Company is required to apply a certain portion of its excess cash to the principal amount of the Term Loans on an annual basis. Excess cash under the Company’s Credit Agreement is defined as net income attributable to the Company adjusted for certain cash and non-cash items and is required to be calculated after the end of each year. Required payments, if any are due in March of the subsequent year. The Company made payments related to its excess cash in March 2013 and 2012 of $4.8 million and $6.8 million, respectively. The excess cash payment paid in March 2013 was classified as a current liability as of December 31, 2012.

Revolving Line of Credit

As of June 30, 2013, the Company had aggregate revolving credit commitments of $63.0 million which mature on August 16, 2015. Interest is payable quarterly at (i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent, plus an applicable margin of 4.00%, 3.75%, 3.50% or 3.25%, based upon the Company’s leverage ratio being within certain defined ranges, and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00%, plus an applicable margin of 3.00%, 2.75%, 2.50% or 2.25%, based upon the Company’s leverage ratio being within certain defined ranges. Commitment fees are payable quarterly at a rate equal to 0.625% per annum. As of June 30, 2013, the amount outstanding under the Company’s Revolving Line of Credit was $9.0 million bearing an average interest rate of 4.24%. As of June 30, 2013, the Company’s letters of credit against the revolving commitments were $9.2 million.

The Company’s Term Loans and Revolving Line of Credit are guaranteed by the Company’s Parent and substantially all of the Company’s current and future wholly-owned domestic subsidiaries, and secured by their existing and future property and assets, and secured by a pledge of the Company’s capital stock and the capital stock of the Company’s domestic wholly-owned subsidiaries and up to 65% of the capital stock of first-tier foreign subsidiaries. The Company’s Credit Agreement requires the Company to comply on a quarterly basis with certain financial and other covenants, including a maximum total leverage ratio test and an interest coverage ratio test. As of June 30, 2013, the Company was in compliance with all the covenants.

Senior Subordinated Notes

As of June 30, 2013, the outstanding aggregate principal amount related to the Company’s 10.75% Senior Subordinated Notes (the “Notes”) due February 1, 2016, was $176.6 million, net of discount of $0.7 million. Interest is payable semiannually. The Company may redeem some or all of the Notes at the redemption prices (expressed as percentages of principal amount of Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if redeemed during the twelve-month period beginning on February 1 of each of the years indicated below:

Year	Percentage
2013		101.792	%
2014 and thereafter		100.000	%

If there is a change of control as specified in the indenture, the Company must offer to repurchase the Notes at 101% of their face amount, plus accrued and unpaid interest. The Notes are subordinated to all of the Company’s existing and future senior indebtedness, rank equally with all of the Company’s existing and future senior subordinated indebtedness and rank senior to all of the Company’s existing and future subordinated indebtedness. The Notes are guaranteed on an unsecured senior subordinated basis by each of the Company’s wholly owned subsidiaries that guarantee the Company’s Term Loans and Revolving Line of Credit. The Company’s Notes agreement requires it to comply on a quarterly basis with certain covenants. As of June 30, 2013, the Company was in compliance with all the covenants.

As of June 30, 2013, currently scheduled principal payments of total debt, excluding the effects of the discounts on the term loans and the senior subordinated notes, are as follows (in thousands):

2013 (remaining 6 months)	$	—
2014		538
2015		392,271
2016		177,296
Total	$	570,105

Interest expense — The following table presents the components of interest expense (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Contractual interest on total debt	$	11,013		$	11,304		$	21,933		$	21,544
Amortization of debt discount and capitalized financing costs		1,332			1,354			2,122			3,014
Interest capitalized to property and equipment, net		(182	)		(106	)		(413	)		(220	)
Total interest expense	$	12,163		$	12,552		$	23,642		$	24,338

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2013, aggregated by the level in the fair value hierarchy within which those measurements fall as of June 30, 2013 and December 31, 2012 (in thousands):

	Quoted Prices in Active  Markets (Level 1)				Significant Other Observable  Inputs (Level 2)				Significant Unobservable  Inputs (Level 3)				Total Fair Value
	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Assets
Derivative Financial Instruments	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Liabilities
Derivative Financial Instruments	$	0	$	0	$	66	$	117	$	0	$	0	$	66	$	117

Non-Financial Assets Measured and Recorded at Fair Value Based on Level 3 Inputs on Non-Recurring Basis

The following table presents the non-financial assets that were measured and recorded at fair value based on Level 3 inputs on a non-recurring basis during the three and six months ended June 30, 2013 (in thousands):

	Three and Six Months Ended June 30, 2013
	Impairment Charge		Fair Value
Property and equipment	$	568	$	—
Other intangible assets		10,291		—
Total	$	10,859	$	—

Schedule of Estimated Fair Value of Financial Instruments with Long-Term Maturities

The estimated fair value of financial instruments with long-term maturities is as follows:

	June 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value  (1)
Assets
Loan program notes receivable, net	$	10,675	$	9,282	$	11,473	$	9,606
Liabilities
Term loans, net	$	381,555	$	404,120	$	385,875	$	402,757
Senior subordinated notes, net		176,614		187,956		176,482		181,248
Total liabilities	$	558,169	$	592,076	$	562,357	$	584,005

⁽¹⁾  The fair values as of December 31, 2012 have been corrected from amounts previously reported.

XML

Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 11,040	$ 19,058	$ 23,597	$ 10,183
Restricted cash	280	364
Accounts receivable, net	39,331	36,737
Prepaid expenses	7,430	4,781
Other current assets	2,598	2,591
Income taxes receivable	3,094	1,109
Deferred income taxes	6,352	6,352
Current assets of discontinued operations	3,135	2,759
Total current assets	73,260	73,751
Property and equipment, net	131,406	130,381
Goodwill	519,093	518,953
Other intangible assets, net	281,079	294,085
Other assets, net	18,305	20,396
Total assets	1,023,143	1,037,566
Current liabilities:
Accounts payable	7,507	6,801
Accrued liabilities	41,201	36,466
Current portion of long-term debt		4,840
Other current liabilities	15,472	11,086
Current liabilities of discontinued operations	2,287	2,372
Total current liabilities	66,467	61,565
Long-term debt	567,174	584,535
Other long-term liabilities	8,642	8,740
Long-term liabilities of discontinued operations	5,838	6,275
Deferred income taxes	107,310	107,289
Total liabilities	755,431	768,404
Total stockholder's equity	267,712	269,162
Total liabilities and stockholder's equity	1,023,143	1,037,566
CRC Health Corporation [Member]
Current assets:
Restricted cash	280	364
Prepaid expenses	3,951	1,830
Other current assets	1,176	1,184
Income taxes receivable	3,094	1,109
Deferred income taxes	6,352	6,352
Total current assets	14,853	10,839
Property and equipment, net	8,194	8,578
Other assets, net	17,766	19,905
Investment in subsidiaries	935,682	957,075
Total assets	976,495	996,397
Current liabilities:
Accounts payable	6,276	5,887
Accrued liabilities	25,229	21,843
Current portion of long-term debt		4,822
Other current liabilities	967	1,143
Total current liabilities	32,472	33,695
Long-term debt	567,174	584,535
Other long-term liabilities	1,827	1,716
Deferred income taxes	107,310	107,289
Total liabilities	708,783	727,235
Total stockholder's equity	267,712	269,162
Total liabilities and stockholder's equity	976,495	996,397
Subsidiary Guarantors [Member]
Current assets:
Cash and cash equivalents	11,040	19,058	23,597	10,183
Accounts receivable, net	39,331	36,737
Prepaid expenses	3,479	2,951
Other current assets	1,422	1,407
Current assets of discontinued operations	3,135	2,759
Total current assets	58,407	62,912
Property and equipment, net	123,212	121,803
Goodwill	519,093	518,953
Other intangible assets, net	281,079	294,085
Other assets, net	539	491
Total assets	982,330	998,244
Current liabilities:
Accounts payable	1,231	914
Accrued liabilities	15,972	14,623
Current portion of long-term debt		18
Other current liabilities	14,505	9,943
Current liabilities of discontinued operations	2,287	2,372
Total current liabilities	33,995	27,870
Other long-term liabilities	6,815	7,024
Long-term liabilities of discontinued operations	5,838	6,275
Total liabilities	46,648	41,169
Total stockholder's equity	935,682	957,075
Total liabilities and stockholder's equity	982,330	998,244
Eliminations [Member]
Current assets:
Investment in subsidiaries	(935,682)	(957,075)
Total assets	(935,682)	(957,075)
Current liabilities:
Total stockholder's equity	(935,682)	(957,075)
Total liabilities and stockholder's equity	$ (935,682)	$ (957,075)

XML

Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2013

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

NOTE 11. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

As of June 30, 2013, the Company had $176.6 million aggregate principal amount of the Notes outstanding. The Notes are fully and unconditionally guaranteed, jointly and severally on an unsecured senior subordinated basis, by the Company’s 100% owned subsidiaries.

The following supplemental tables present condensed consolidating balance sheets for the Company and its subsidiary guarantors as of June 30, 2013 and December 31, 2012; the condensed consolidating statements of operations for the three and six months ended June 30, 2013 and 2012; the condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2013 (total comprehensive income was the same as net income for the respective three and six months ended June 30, 2012); and the condensed consolidating statements of cash flows for the six months ended June 30, 2013 and 2012. These supplemental tables reflect the effects of the corrections to our Condensed Consolidated Financial Statements in Note 1.

Condensed Consolidating Balance Sheet as of June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation		Subsidiary Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	11,040	$	—		$	11,040
Restricted cash		280		—		—			280
Accounts receivable, net		—		39,331		—			39,331
Prepaid expenses		3,951		3,479		—			7,430
Other current assets		1,176		1,422		—			2,598
Income taxes receivable		3,094		—		—			3,094
Deferred income taxes		6,352		—		—			6,352
Current assets of discontinued operations		—		3,135		—			3,135
Total current assets		14,853		58,407		—			73,260
Property and equipment, net		8,194		123,212		—			131,406
Goodwill		—		519,093		—			519,093
Other intangible assets, net		—		281,079		—			281,079
Other assets, net		17,766		539		—			18,305
Investment in subsidiaries		935,682		—		(935,682	)		—
Total assets	$	976,495	$	982,330	$	(935,682	)	$	1,023,143
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$	6,276	$	1,231	$	—		$	7,507
Accrued liabilities		25,229		15,972		—			41,201
Other current liabilities		967		14,505		—			15,472
Current liabilities of discontinued operations		—		2,287		—			2,287
Total current liabilities		32,472		33,995		—			66,467
Long-term debt		567,174		—		—			567,174
Other long-term liabilities		1,827		6,815		—			8,642
Long-term liabilities of discontinued operations		—		5,838		—			5,838
Deferred income taxes		107,310		—		—			107,310
Total liabilities		708,783		46,648		—			755,431
Total stockholder’s equity		267,712		935,682		(935,682	)		267,712
Total liabilities and stockholder’s equity	$	976,495	$	982,330	$	(935,682	)	$	1,023,143

Condensed Consolidating Balance Sheet as of December 31, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation		Subsidiary Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	19,058	$	—		$	19,058
Restricted cash		364		—		—			364
Accounts receivable, net		—		36,737		—			36,737
Prepaid expenses		1,830		2,951		—			4,781
Other current assets		1,184		1,407		—			2,591
Income taxes receivable		1,109		—		—			1,109
Deferred income taxes		6,352		—		—			6,352
Current assets of discontinued operations		—		2,759		—			2,759
Total current assets		10,839		62,912		—			73,751
Property and equipment, net		8,578		121,803		—			130,381
Goodwill		—		518,953		—			518,953
Other intangible assets, net		—		294,085		—			294,085
Other assets, net		19,905		491		—			20,396
Investment in subsidiaries		957,075		—		(957,075	)		—
Total assets	$	996,397	$	998,244	$	(957,075	)	$	1,037,566
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$	5,887	$	914	$	—		$	6,801
Accrued liabilities		21,843		14,623		—			36,466
Current portion of long-term debt		4,822		18		—			4,840
Other current liabilities		1,143		9,943		—			11,086
Current liabilities of discontinued operations		—		2,372		—			2,372
Total current liabilities		33,695		27,870		—			61,565
Long-term debt		584,535		—		—			584,535
Other long-term liabilities		1,716		7,024		—			8,740
Long-term liabilities of discontinued operations		—		6,275		—			6,275
Deferred income taxes		107,289		—		—			107,289
Total liabilities		727,235		41,169		—			768,404
Total stockholder’s equity		269,162		957,075		(957,075	)		269,162
Total liabilities and stockholder’s equity	$	996,397	$	998,244	$	(957,075	)	$	1,037,566

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	9		$	118,566		$	—		$	118,575
Management fee revenues		21,326			—			(21,326	)		—
Total net revenues		21,335			118,566			(21,326	)		118,575
Operating expenses:
Salaries and benefits		7,587			49,262			—			56,849
Facilities and other operating costs		2,980			34,404			—			37,384
Provision for doubtful accounts		—			1,851			—			1,851
Depreciation and amortization		1,107			4,225			—			5,332
Asset impairments		—			10,859			—			10,859
Management fee expense		—			21,326			(21,326	)		—
Total operating expenses		11,674			121,927			(21,326	)		112,275
Operating income		9,661			(3,361	)		—			6,300
Interest expense		(12,163	)		—			—			(12,163	)
Other income		236			5			—			241
Income (loss) from continuing operations before income taxes		(2,266	)		(3,356	)		—			(5,622	)
Income tax expense		(925	)		(1,370	)		—			(2,295	)
Equity in income of subsidiaries, net of tax		(2,260	)		—			2,260			—
Loss from continuing operations		(3,601	)		(1,986	)		2,260			(3,327	)
Loss from discontinued operations, net of tax		—			(274	)		—			(274	)
Net loss	$	(3,601	)	$	(2,260	)	$	2,260		$	(3,601	)

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	18		$	114,959		$	—		$	114,977
Management fee revenues		20,813			—			(20,813	)		—
Total net revenues		20,831			114,959			(20,813	)		114,977
Operating expenses:
Salaries and benefits		6,722			47,863			—			54,585
Facilities and other operating costs		720			32,532			—			33,252
Provision for doubtful accounts		—			1,465			—			1,465
Depreciation and amortization		1,091			3,936			—			5,027
Management fee expense		—			20,813			(20,813	)		—
Total operating expenses		8,533			106,609			(20,813	)		94,329
Operating income		12,298			8,350			—			20,648
Interest expense		(12,552	)		—			—			(12,552	)
Other income		248			3			—			251
Income (loss) from continuing operations before income taxes		(6	)		8,353			—			8,347
Income tax expense		(3	)		3,503			—			3,500
Equity in income of subsidiaries, net of tax		4,397			—			(4,397	)		—
Income from continuing operations		4,394			4,850			(4,397	)		4,847
Loss from discontinued operations, net of tax		—			(453	)		—			(453	)
Net income	$	4,394		$	4,397		$	(4,397	)	$	4,394

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	20		$	229,139		$	—		$	229,159
Management fee revenues		42,046			—			(42,046	)		—
Total net revenues		42,066			229,139			(42,046	)		229,159
Operating expenses:
Salaries and benefits		15,105			97,712			—			112,817
Facilities and other operating costs		3,568			67,404			—			70,972
Provision for doubtful accounts		—			4,026			—			4,026
Depreciation and amortization		2,215			7,972			—			10,187
Asset impairments		—			10,859			—			10,859
Management fee expense		—			42,046			(42,046	)		—
Total operating expenses		20,888			230,019			(42,046	)		208,861
Operating income		21,178			(880	)		—			20,298
Interest expense		(23,642	)		—			—			(23,642	)
Other income		498			5			—			503
Income (loss) from continuing operations before income taxes		(1,966	)		(875	)		—			(2,841	)
Income tax expense		(769	)		(343	)		—			(1,112	)
Equity in income of subsidiaries, net of tax		(1,017	)		—			1,017			—
Loss from continuing operations		(2,214	)		(532	)		1,017			(1,729	)
Loss from discontinued operations, net of tax		—			(485	)		—			(485	)
Net loss	$	(2,214	)	$	(1,017	)	$	1,017		$	(2,214	)

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	39		$	223,160		$	—		$	223,199
Management fee revenues		42,287			—			(42,287	)		—
Total net revenues		42,326			223,160			(42,287	)		223,199
Operating expenses:
Salaries and benefits		13,765			95,408			—			109,173
Facilities and other operating costs		1,366			64,104			—			65,470
Provision for doubtful accounts		—			3,808			—			3,808
Depreciation and amortization		2,175			7,746			—			9,921
Management fee expense		—			42,287			(42,287	)		—
Total operating expenses		17,306			213,353			(42,287	)		188,372
Operating income		25,020			9,807			—			34,827
Interest expense		(24,338	)		—			—			(24,338	)
Other income		487			7			—			494
Income from continuing operations before income taxes		1,169			9,814			—			10,983
Income tax expense		498			4,186			—			4,684
Equity in income of subsidiaries, net of tax		4,382			—			(4,382	)		—
Income from continuing operations		5,053			5,628			(4,382	)		6,299
Loss from discontinued operations, net of tax		—			(1,246	)		—			(1,246	)
Net income	$	5,053		$	4,382		$	(4,382	)	$	5,053

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Net loss	$	(3,601	)	$	(2,260	)	$	2,260	$	(3,601	)
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $5)		7			—			—		7
Total comprehensive loss	$	(3,594	)	$	(2,260	)	$	2,260	$	(3,594	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Net loss	$	(2,214	)	$	(1,017	)	$	1,017	$	(2,214	)
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $21)		31			—			—		31
Total comprehensive loss	$	(2,183	)	$	(1,017	)	$	1,017	$	(2,183	)

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	5,210		$	20,158		$	—	$	25,368
Cash flows from investing activities:
Additions of property and equipment		(2,450	)		(6,982	)		—		(9,432	)
Proceeds from the sale of property and equipment		—			36			—		36
Acquisition of business, net of cash acquired		(140	)		—			—		(140	)
Net cash used in investing activities		(2,590	)		(6,946	)		—		(9,536	)
Cash flows from financing activities:
Intercompany transfers		21,033			(21,033	)		—		—
Repayment of long-term debt		(4,822	)		(197	)		—		(5,019	)
Repayments on revolving line of credit		(17,995	)		—			—		(17,995	)
Capital contributed to Parent		(599	)		—			—		(599	)
Capitalized financing costs		(217	)		—			—		(217	)
Other financing activities		(20	)		—			—		(20	)
Net cash used in financing activities		(2,620	)		(21,230	)		—		(23,850	)
Net decrease in cash and cash equivalents		—			(8,018	)		—		(8,018	)
Cash and cash equivalents — beginning of period		—			19,058			—		19,058
Cash and cash equivalents — end of period	$	—		$	11,040		$	—	$	11,040

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	12,498		$	20,090		$	—	$	32,588
Cash flows from investing activities:
Additions of property and equipment		(1,917	)		(5,424	)		—		(7,341	)
Other investing activities		(68	)		39			—		(29	)
Net cash used in investing activities		(1,985	)		(5,385	)		—		(7,370	)
Cash flows from financing activities:
Intercompany transfers		830			(830	)		—		—
Borrowings under long-term debt		84,096			—			—		84,096
Repayment of long-term debt		(87,638	)		(461	)		—		(88,099	)
Borrowings on revolving line of credit		18,000			—			—		18,000
Repayments on revolving line of credit		(13,505	)		—			—		(13,505	)
Capital contributed to Parent		(9,524	)		—			—		(9,524	)
Capitalized financing costs		(2,772	)		—			—		(2,772	)
Net cash used in financing activities		(10,513	)		(1,291	)		—		(11,804	)
Net increase in cash and cash equivalents		—			13,414			—		13,414
Cash and cash equivalents — beginning of period		—			10,183			—		10,183
Cash and cash equivalents — end of period	$	—		$	23,597		$	—	$	23,597

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended		6 Months Ended		1 Months Ended	6 Months Ended	1 Months Ended	6 Months Ended
	Jun. 30, 2013 Plaintiff	Dec. 31, 2012	Jun. 30, 2013 Negligence and Medical Malpractice [Member]	Jun. 30, 2013 First Lawsuit [Member]	Nov. 30, 2011 Second Lawsuit [Member] Plaintiff	Jun. 30, 2013 Second Lawsuit [Member] Negligence and Medical Malpractice [Member]	Jan. 31, 2013 Third Lawsuit [Member] Plaintiff	Jun. 30, 2013 Third Lawsuit [Member] Medical Malpractice [Member]
Contingencies And Commitments [Line Items]
Complaint initially filed date	July 6, 2011
Amendment date	August 25, 2011
Number of former students	17				14		13
Compensation mental and physical abuse			$ 32.0	$ 26.0	$ 23.0	$ 14.5	$ 19.5	$ 13.0
Accruals for legal matters	$ 4.4	$ 1.6

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Condensed Consolidating Financial Information - Condensed Consolidating Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net revenues:
Net client service revenues	$ 118,575	$ 114,977	$ 229,159	$ 223,199
Total net revenues	118,575	114,977	229,159	223,199
Operating expenses:
Salaries and benefits	56,849	54,585	112,817	109,173
Facilities and other operating costs	37,384	33,252	70,972	65,470
Provision for doubtful accounts	1,851	1,465	4,026	3,808
Depreciation and amortization	5,332	5,027	10,187	9,921
Asset impairments	10,859		10,859
Total operating expenses	112,275	94,329	208,861	188,372
Operating income	6,300	20,648	20,298	34,827
Interest expense	(12,163)	(12,552)	(23,642)	(24,338)
Other income	241	251	503	494
Income (loss) from continuing operations before income taxes	(5,622)	8,347	(2,841)	10,983
Income tax expense	(2,295)	3,500	(1,112)	4,684
Income (loss) from continuing operations, net of tax	(3,327)	4,847	(1,729)	6,299
Loss from discontinued operations, net of tax	(274)	(453)	(485)	(1,246)
Net income (loss)	(3,601)	4,394	(2,214)	5,053
CRC Health Corporation [Member]
Net revenues:
Net client service revenues	9	18	20	39
Management fee revenues	21,326	20,813	42,046	42,287
Total net revenues	21,335	20,831	42,066	42,326
Operating expenses:
Salaries and benefits	7,587	6,722	15,105	13,765
Facilities and other operating costs	2,980	720	3,568	1,366
Depreciation and amortization	1,107	1,091	2,215	2,175
Total operating expenses	11,674	8,533	20,888	17,306
Operating income	9,661	12,298	21,178	25,020
Interest expense	(12,163)	(12,552)	(23,642)	(24,338)
Other income	236	248	498	487
Income (loss) from continuing operations before income taxes	(2,266)	(6)	(1,966)	1,169
Income tax expense	(925)	(3)	(769)	498
Equity in income of subsidiaries, net of tax	(2,260)	4,397	(1,017)	4,382
Income (loss) from continuing operations, net of tax	(3,601)	4,394	(2,214)	5,053
Net income (loss)	(3,601)	4,394	(2,214)	5,053
Subsidiary Guarantors [Member]
Net revenues:
Net client service revenues	118,566	114,959	229,139	223,160
Total net revenues	118,566	114,959	229,139	223,160
Operating expenses:
Salaries and benefits	49,262	47,863	97,712	95,408
Facilities and other operating costs	34,404	32,532	67,404	64,104
Provision for doubtful accounts	1,851	1,465	4,026	3,808
Depreciation and amortization	4,225	3,936	7,972	7,746
Asset impairments	10,859		10,859
Management fee expense	21,326	20,813	42,046	42,287
Total operating expenses	121,927	106,609	230,019	213,353
Operating income	(3,361)	8,350	(880)	9,807
Other income	5	3	5	7
Income (loss) from continuing operations before income taxes	(3,356)	8,353	(875)	9,814
Income tax expense	(1,370)	3,503	(343)	4,186
Income (loss) from continuing operations, net of tax	(1,986)	4,850	(532)	5,628
Loss from discontinued operations, net of tax	(274)	(453)	(485)	(1,246)
Net income (loss)	(2,260)	4,397	(1,017)	4,382
Eliminations [Member]
Net revenues:
Management fee revenues	(21,326)	(20,813)	(42,046)	(42,287)
Total net revenues	(21,326)	(20,813)	(42,046)	(42,287)
Operating expenses:
Management fee expense	(21,326)	(20,813)	(42,046)	(42,287)
Total operating expenses	(21,326)	(20,813)	(42,046)	(42,287)
Equity in income of subsidiaries, net of tax	2,260	(4,397)	1,017	(4,382)
Income (loss) from continuing operations, net of tax	2,260	(4,397)	1,017	(4,382)
Net income (loss)	$ 2,260	$ (4,397)	$ 1,017	$ (4,382)

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Long-Term Debt - Term Loans - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 07, 2012	Mar. 31, 2013	Mar. 31, 2012	Jun. 30, 2013
Term Loans [Member]
Debt Instrument [Line Items]
Repaid of aggregate principal Term Loans		$ 4,800,000	$ 6,800,000
Term Loans B-1 [Member]
Debt Instrument [Line Items]
Aggregate principal amount	80,900,000
Repaid of aggregate principal Term Loans	66,400,000
Remaining unamortized issuance costs			200,000
Refinancing costs			500,000
Term Loans B-3 [Member]
Debt Instrument [Line Items]
Cash proceeds	87,600,000
Debt instrument, maturity date		Nov. 16, 2015
Total aggregate principal amount from new creditors	67,000,000
Total aggregate principal amount from existing Term Loans B-1 creditors	20,600,000
Contributed as additional Term Loan	6,100,000
Remaining debt issuance costs			2,200,000
Discount amortized, percentage			4.00%
Amendment of debt	14,500,000
Aggregate principal amount				82,800,000
Debt discount				2,200,000
Debt instrument, credit rating				(i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent (but not less than 1.50%), plus an applicable margin of 7.00%, subject to an increase to 8.00% during any period that the Company's public corporate family rating from Moody's is not at least B3 or the Company's public corporate credit rating from Standard & Poor's Ratings Services ("S&P") is not at least B-, and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00% (but, in either case, not less than 2.50%), plus an applicable margin of 6.00%, subject to an increase to 7.00% during any period that the Company's public corporate family rating from Moody's is not at least B3 or the Company's public corporate rating credit rating from S&P is not at least B-.
LIBOR loans and the interest rate				8.50%
Term loan payable terms				The Term Loans B-3 are payable in quarterly principal installments of $0.1 million on December 31, 2014 and $0.7 million over the payment period between March 31, 2015 and September 30, 2015, with the remainder due on the maturity date of November 16, 2015.
Refinancing terms				Under the terms of this refinancing, the Company was required to pay and paid, a fee equal to 1.00% of the outstanding principal amount of such lender’s Term Loans B-3 as of March 31, 2013, which totaled $0.9 million. The Company is also required to pay (i) on March 31, 2014, a fee equal to 1.50% of the outstanding principal amount of such lender’s Term Loans B-3 as of such date and (ii) on the Maturity Date, a fee equal to 1.50% of the outstanding principal amount of such lender’s Term Loans B-3 as of such date. These fees are charged to interest expense over the term of the Term Loans B-3 using the effective interest rate method.
Refinancing fee				900,000
Rate of prepayment premium				1.00%
Term Loans B-3 [Member] | December 31, 2014 [Member]
Debt Instrument [Line Items]
Periodic payment of term loans				100,000
Term Loans B-3 [Member] | Between March 31, 2015 and September 30, 2015 [Member]
Debt Instrument [Line Items]
Periodic payment of term loans				700,000
Term Loans B-2 [Member]
Debt Instrument [Line Items]
Aggregate principal amount				298,800,000
Debt instrument, maturity date				Nov. 16, 2015
LIBOR loans and the interest rate				4.70%
Term loan payable terms				The Term Loans B-2 are payable in quarterly principal installments of $0.4 million on December 31, 2014 and $2.4 million over the payment period between March 31, 2015 and September 30, 2015, with the remainder due on the maturity date of November 16, 2015.
Line of Credit interest rate term				(i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent, plus an applicable margin of 4.50% and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00%, plus an applicable margin of 3.50%.
Term Loans B-2 [Member] | December 31, 2014 [Member]
Debt Instrument [Line Items]
Periodic payment of term loans				400,000
Term Loans B-2 [Member] | Between March 31, 2015 and September 30, 2015 [Member]
Debt Instrument [Line Items]
Periodic payment of term loans				$ 2,400,000

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Selected Financial Information for Company's Reportable Segments

Selected financial information for the Company’s reportable segments is presented in the table below (in thousands). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues:
Recovery	$	94,269		$	88,513		$	184,944		$	175,609
Youth		17,556			19,823			32,494			36,125
Weight management		6,741			6,623			11,701			11,423
Corporate		9			18			20			42
Total net client service revenues	$	118,575		$	114,977		$	229,159		$	223,199
Operating income (loss):
Recovery	$	28,817		$	28,083		$	54,708		$	53,077
Youth		(8,958	)		1,534			(11,586	)		38
Weight management		(1,894	)		(454	)		(1,956	)		(1,023	)
Corporate		(11,665	)		(8,515	)		(20,868	)		(17,265	)
Operating income		6,300			20,648			20,298			34,827
Interest expense		(12,163	)		(12,552	)		(23,642	)		(24,338	)
Other income		241			251			503			494
Income (loss) from continuing operations before income taxes	$	(5,622	)	$	8,347		$	(2,841	)	$	10,983

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2013

Discontinued Operations And Disposal Groups [Abstract]

Summary of Results of Discontinued Operations

The results of operations for those facilities classified as discontinued operations are summarized below (in thousands). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues	$	36		$	617		$	70		$	1,329
Operating expenses		542			1,379			925			3,365
Interest expense		—			—			—			(1	)
Loss before income taxes		(506	)		(762	)		(855	)		(2,037	)
Loss on disposal of discontinued operations		17			—			17			—
Income tax benefit		(249	)		(309	)		(387	)		(791	)
Loss from discontinued operations	$	(274	)	$	(453	)	$	(485	)	$	(1,246	)

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Fair Value Measurements - Non-Financial Assets Measured and Recorded at Fair Value Based on Level 3 Inputs on Non-Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment Charge	$ 10,859	$ 10,859
Fair Value
Property and equipment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment Charge		568
Fair Value
Other intangible assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment Charge		10,291
Fair Value

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Income Taxes - Income Tax Expense for Interim Periods (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Tax Disclosure [Abstract]
Income tax expense (benefit) from continuing operations	$ (2,295)	$ 3,500	$ (1,112)	$ 4,684
Effective tax rate	40.80%	41.90%	39.10%	42.60%

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Long-Term Debt - Percentages of Long-Term Debt Maturities (Detail)	6 Months Ended
	Jun. 30, 2013
Debt Disclosure [Abstract]
2013	101.792%
2014 and thereafter	100.00%

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Restructuring - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Restructuring And Related Activities [Abstract]
Restructuring reserve	$ 7,494	$ 9,294

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Overview and Basis of Presentation - Summary of Discontinued Operations Reclassifications and Corrections On Company's Condensed Consolidated Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Schedule Of Condensed Statements Of Operations [Line Items]
Net client service revenues	$ 118,575	$ 114,977	$ 229,159	$ 223,199
Operating expenses:
Salaries and benefits	56,849	54,585	112,817	109,173
Facilities and other operating costs	37,384	33,252	70,972	65,470
Provision for doubtful accounts	1,851	1,465	4,026	3,808
Depreciation and amortization	5,332	5,027	10,187	9,921
Total operating expenses	112,275	94,329	208,861	188,372
Operating income	6,300	20,648	20,298	34,827
Interest expense		(12,552)		(24,338)
Other income	241	251	503	494
Income (loss) from continuing operations before income taxes	(5,622)	8,347	(2,841)	10,983
Income tax expense	(2,295)	3,500	(1,112)	4,684
Income (loss) from continuing operations, net of tax	(3,327)	4,847	(1,729)	6,299
Loss from discontinued operations, net of tax	(274)	(453)	(485)	(1,246)
Net income (loss)	(3,601)	4,394	(2,214)	5,053
Net income attributable to CRC Health Corporation		4,394		5,053
As Previously Reported [Member]
Schedule Of Condensed Statements Of Operations [Line Items]
Net client service revenues		115,567		224,471
Operating expenses:
Salaries and benefits		53,971		108,915
Facilities and other operating costs		34,728		67,250
Provision for doubtful accounts		1,505		3,873
Depreciation and amortization		4,974		9,798
Total operating expenses		95,178		189,836
Operating income		20,389		34,635
Interest expense		(12,553)		(24,340)
Other income		251		494
Income (loss) from continuing operations before income taxes		8,087		10,789
Income tax expense		3,390		4,602
Income (loss) from continuing operations, net of tax		4,697		6,187
Loss from discontinued operations, net of tax		(382)		(1,129)
Net income (loss)		4,315		5,058
Net loss attributable to noncontrolling interest		(934)		(934)
Net income attributable to CRC Health Corporation		3,381		4,124
Discontinued Operations Reclassifications [Member]
Schedule Of Condensed Statements Of Operations [Line Items]
Net client service revenues		(590)		(1,272)
Operating expenses:
Salaries and benefits		(320)		(676)
Facilities and other operating costs		(361)		(706)
Provision for doubtful accounts		(40)		(65)
Depreciation and amortization		(52)		(87)
Total operating expenses		(773)		(1,534)
Operating income		183		262
Interest expense		1		2
Income (loss) from continuing operations before income taxes		184		264
Income tax expense		78		112
Income (loss) from continuing operations, net of tax		106		152
Loss from discontinued operations, net of tax		(106)		(152)
Out of Period Corrections [Member]
Operating expenses:
Salaries and benefits		934		934
Facilities and other operating costs		(1,115)		(1,074)
Depreciation and amortization		25		50
Total operating expenses		(156)		(90)
Operating income		156		90
Income (loss) from continuing operations before income taxes		156		90
Income tax expense		65		38
Income (loss) from continuing operations, net of tax		91		52
Loss from discontinued operations, net of tax		35		35
Net income (loss)		126		87
Net loss attributable to noncontrolling interest		934		934
Net income attributable to CRC Health Corporation		1,060		1,021
Intangible Assets Amortization Corrections [Member]
Operating expenses:
Depreciation and amortization		80		160
Total operating expenses		80		160
Operating income		(80)		(160)
Income (loss) from continuing operations before income taxes		(80)		(160)
Income tax expense		(33)		(68)
Income (loss) from continuing operations, net of tax		(47)		(92)
Net income (loss)		(47)		(92)
Net income attributable to CRC Health Corporation		$ (47)		$ (92)

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Derivatives and Hedging Activities - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Derivatives And Hedging Activities [Line Items]
Increase in interest expense	$ 0.1
Fair value of derivative	0.1
Fair value and termination value of derivatives in a net liability position	0.1
Cash Flow Hedges [Member] | Interest Rate Derivatives [Member]
Derivatives And Hedging Activities [Line Items]
Number of instruments	1
Notional amount	$ 200.0
Derivative fixed interest rate	0.287%
Interest rate derivative maturity date	Jun. 30, 2014

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2013

Restructuring And Related Activities [Abstract]

Summary of Restructuring Activity

These charges are expected to continue through 2020 and are summarized in the following table (in thousands):

	Recovery (1)			Youth			Total
Total restructuring reserve at December 31, 2012	$	1,412		$	7,882		$	9,294
Expenses		66			323			389
Cash payments		(140	)		(711	)		(851	)
Reclassification to accrued expenses		(1,338	)		—			(1,338	)
Total restructuring reserve at June 30, 2013	$	—		$	7,494		$	7,494

⁽¹⁾  The restructuring reserve balance and associated activity represents a purchase accounting liability that was accrued in connection with a 2009 acquisition. This amount was inappropriately included in the restructuring reserve disclosure as of December 31, 2009 and thereafter. As of June 30, 2013 and December 31, 2012, the purchase accounting liability is included in “accrued expenses” in the Condensed Consolidated Balance Sheet and the restructuring reserve table above has been appropriately adjusted.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Statement Of Income And Comprehensive Income [Abstract]
Net change in unrealized loss on cash flow hedges, tax	$ 5	$ 21

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Overview and Basis of Presentation

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Overview and Basis of Presentation

NOTE 1. OVERVIEW AND BASIS OF PRESENTATION

Overview

CRC Health Corporation (“the Company”) is a wholly owned subsidiary of CRC Health Group, Inc., referred to as “the Group” or “the Parent.” The Company is headquartered in Cupertino, California, and through its wholly owned subsidiaries provides treatment services related to substance abuse, troubled youth and other addiction diseases and behavioral disorders.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, without audit. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States of America for annual financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2012 has been derived from our audited financial statements.

In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of the Company, its results of operations, and its cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Principles of Consolidation — The Company’s condensed consolidated financial statements include the accounts of CRC Health Corporation and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates — Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Reclassifications: Discontinued Operations — The condensed consolidated statements of operations have been reclassified for all periods presented to reflect the presentation of closed or sold facilities as discontinued operations (see Note 8). Unless noted otherwise, discussions in the notes to the condensed consolidated financial statements pertain to continuing operations.

Corrections to Condensed Consolidated Balance Sheet as of December 31, 2012 —

Subsequent to the issuance of the Company’s 2012 consolidated financial statements, management determined that certain impairments of intangible assets (both those subject to amortization and those not subject to amortization) recorded primarily in discontinued operations in the periods from 2008 through December 31, 2012 were incorrectly computed and recorded due to errors in the allocation of such amounts to specific facilities and other mathematical mistakes. The actual aggregate intangible asset impairment recognized through December 31, 2012 exceeded the intangible asset impairment that should have been recognized by $1.2 million. As a result, certain amounts presented in the Company’s condensed consolidated balance sheet as of December 31, 2012 have been restated from the amounts previously reported to correct such errors as shown in the table below. We believe these corrections are not material to our previously issued consolidated financial statements.

Condensed Consolidated Balance Sheet as of December 31, 2012 (in thousands):

	As Previously Reported			Corrections		As Restated
Current assets of discontinued operations	$	2,623		$	136	$	2,759
Total current assets		73,615			136		73,751
Other intangible assets, net		292,846			1,239		294,085
Total assets		1,036,191			1,375		1,037,566
Accumulated deficit		(197,074	)		1,375		(195,699	)
Total equity		267,787			1,375		269,162
Total liabilities and stockholders’ equity		1,036,191			1,375		1,037,566

Corrections to Condensed Consolidated Statements of Operations, Comprehensive Income and Cash Flows for the periods ended June 30, 2012 —

The Company has restated the condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2012 and the condensed consolidated statement of cash flows for the six months ended June 30, 2012 to correct intangible asset amortization related to the intangible asset impairments discussed above; and to correct other immaterial out of period adjustments that were previously identified, recorded and disclosed in Note 1 of the financial statements included in the Company’s 2012 Annual Report on Form 10-K and the June 30, 2012 Form 10-Q, so such adjustments are recorded in the proper period. We believe these corrections are not material to our previously issued annual or interim consolidated financial statements.

The effects of the correction of the intangible asset amortization error and the out of period adjustments are as follows:

• Additional aggregate intangible asset amortization of $0.1 million and $0.2 million in the three and six months ended June 30, 2012, respectively, has been recorded;

• Management fees reimbursable to the Company’s principal shareholder of $0.7 million that were previously expensed in “supplies, facilities and other operating costs” in the quarter ended June 30, 2012 have been correctly recorded in 2011;

• Leasehold improvements aggregating $0.4 million previously expensed in “supplies, facilities and other operating costs” in the quarter ended June 30, 2012 have been correctly recorded in the years 2009 through 2011;

• Adjustments to decrease “supplies, facilities, and other operating costs” by $0.9 million and to increase “net loss attributable to noncontrolling interest” that were previously recorded in the quarter ended June 30, 2012 have been correctly recorded in 2011;

• Depreciation related to leasehold improvements costs aggregating $0.6 million previously expensed in “supplies, facilities and other operating costs” in the quarter ended December 31, 2012 have been correctly recorded in the years 2006 through 2012; and

• Adjustments have been recorded to reflect the income tax effects related to the above corrections.

The following tables summarize the effects of the discontinued operations reclassifications and the corrections on the Company’s condensed consolidated statements of operations for three and six months ended June 30, 2012 (in thousands):

	For the Three Months Ended June 30, 2012
	As Previously Reported			Discontinued Operations Reclassifications			Out of Period Corrections			Intangible  Assets Amortization Corrections			As Restated
Net client service revenues	$	115,567		$	(590	)	$	—		$	—		$	114,977
Operating expenses:
Salaries and benefits		53,971			(320	)		934						54,585
Facilities and other operating costs		34,728			(361	)		(1,115	)					33,252
Provision for doubtful accounts		1,505			(40	)		—			—			1,465
Depreciation and amortization		4,974			(52	)		25			80			5,027
Total operating expenses		95,178			(773	)		(156	)		80			94,329
Operating income		20,389			183			156			(80	)		20,648
Interest expense		(12,553	)		1			—			—			(12,552	)
Other income		251			—			—			—			251
Income from continuing operations before income taxes		8,087			184			156			(80	)		8,347
Income tax expense		3,390			78			65			(33	)		3,500
Income from continuing operations, net of tax		4,697			106			91			(47	)		4,847
Loss from discontinued operations, net of tax		(382	)		(106	)		35						(453	)
Net income		4,315			—			126			(47	)		4,394
Net loss attributable to noncontrolling interest		(934	)		—			934			—			—
Net income attributable to CRC Health Corporation	$	3,381		$	—		$	1,060		$	(47	)	$	4,394

	For the Six Months Ended June 30, 2012
	As Previously Reported			Discontinued Operations Reclassifications			Out of Period Corrections			Intangible  Assets Amortization Corrections			As Restated
Net client service revenues	$	224,471		$	(1,272	)	$	—		$	—		$	223,199
Operating expenses:
Salaries and benefits		108,915			(676	)		934			—			109,173
Facilities and other operating costs		67,250			(706	)		(1,074	)		—			65,470
Provision for doubtful accounts		3,873			(65	)		—			—			3,808
Depreciation and amortization		9,798			(87	)		50			160			9,921
Total operating expenses		189,836			(1,534	)		(90	)		160			188,372
Operating income		34,635			262			90			(160	)		34,827
Interest expense		(24,340	)		2			—			—			(24,338	)
Other income		494			—			—			—			494
Income from continuing operations before income taxes		10,789			264			90			(160	)		10,983
Income tax expense		4,602			112			38			(68	)		4,684
Income from continuing operations, net of tax		6,187			152			52			(92	)		6,299
Loss from discontinued operations, net of tax		(1,129	)		(152	)		35			—			(1,246	)
Net income		5,058			—			87			(92	)		5,053
Net loss attributable to noncontrolling interest		(934	)		—			934			—			—
Net income attributable to CRC Health Corporation	$	4,124		$	—		$	1,021		$	(92	)	$	5,053

The following tables summarize the effects of the corrections on the Company’s condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2012 (in thousands):

	For the Three Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections		Intangible Assets Amortization Corrections			As Restated
Net income	$	4,315		$	126	$	(47	)	$	4,394
Other comprehensive income:		—			—		—			—
Total comprehensive income		4,315			126		(47	)		4,394
Net loss attributable to noncontrolling interest		(934	)		934		—
Net income attributable to CRC Health Corporation	$	3,381		$	1,060	$	(47	)	$	4,394
	For the Six Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections		Intangible Assets Amortization Corrections			As Restated
Net income	$	5,058		$	87	$	(92	)	$	5,053
Other comprehensive income:		—			—		—			—
Total comprehensive income		5,058			87		(92	)		5,053
Net loss attributable to noncontrolling interest		(934	)		934		—			—
Net income attributable to CRC Health Corporation	$	4,124		$	1,021	$	(92	)	$	5,053

The following tables summarize the effects of the corrections on the Company’s condensed consolidated statement of cash flows for six months ended June 30, 2012 (in thousands):

	For the Six Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections			Intangible Assets Amortization Corrections			As Restated
Cash flows from operating activities:
Net income	$	5,058		$	87		$	(92	)	$	5,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,798			50			160			10,008
Amortization of debt discount and capitalized financing costs		3,014			—			—			3,014
Loss on disposal of property and equipment		843			(425	)		—			418
Provision for doubtful accounts		3,954			—			—			3,954
Stock-based compensation		1,016			—			—			1,016
Deferred income taxes		(797	)		61			(68	)		(804	)
Changes in assets and liabilities:
Restricted cash		(226	)		—			—			(226	)
Accounts receivable		(1,878	)		—			—			(1,878	)
Prepaid expenses		1,118			—			—			1,118
Income taxes receivable and payable		2,705			—			—			2,705
Other current assets		(170	)		—			—			(170	)
Accounts payable		(300	)		—			—			(300	)
Accrued liabilities		2,646			227			—			2,873
Other current liabilities		6,345			—			—			6,345
Other long-term assets		(853	)		—			—			(853	)
Other long-term liabilities		315			—			—			315
Net cash provided by operating activities	$	32,588		$	—		$	—		$	32,588

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Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

NOTE 4. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. However, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.

Cash Flow Hedges of Interest Rate Risk

The Company’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. In 2012 the Company entered into an interest rate swap to hedge the variable cash flows associated with existing variable-rate debt. As of June 30, 2013, the Company had one interest rate derivative designated as a cash flow hedge of interest rate risk, with a $200.0 million notional amount, paying fixed interest at 0.287% and maturing on June 30, 2014.

The effective portion of changes in the fair value of a derivative that qualifies and is designated as a cash flow hedge is recorded in accumulated other comprehensive loss and is subsequently reclassified into interest expense as interest payments are made on the Company’s variable-rate debt. The ineffective portion of the change in fair value of this type of derivative is recognized directly in earnings. During the next twelve months, the Company estimates that an additional $0.1 million will be reclassified as an increase to interest expense. As of June 30, 2013, the $0.1 million fair value of this derivative was recorded as “other current liabilities” in the Condensed Consolidated Balance Sheet.

The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statement of Operations (in thousands):

Derivatives Designated as Cash Flow Hedges For the Six Months Ended June 30,	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)					Location of Gain or (Loss) Reclassified From Accumulated OCI into Income (Effective portion)		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)					Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	2013			2012				2013			2012				2013			2012
Interest Rate Derivatives
Pay-Fixed Swaps	$	(34	)	$	0		Interest expense	$	(42	)	$	0		Other Income	$	(43	)	$	0

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. As of June 30, 2013, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0.1 million. If the Company had breached any of these provisions as of June 30, 2013, it could have been required to settle its obligations under the agreements at their termination value of $0.1 million.

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Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 2. INCOME TAXES

The Company calculates its income tax expense for interim periods by applying the full year’s estimated effective tax rate in its financial statements for interim periods (in thousands, except percentages). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income tax expense (benefit) from continuing operations	$	(2,295	)	$	3,500		$	(1,112	)	$	4,684
Effective tax rate		40.8	%		41.9	%		39.1	%		42.6	%

The Company’s effective tax rate of 40.8% and 39.1% for the three and six months ended June 30, 2013, respectively, differed from the effective tax rate for the three and six months ended June 30, 2012 of 41.9% and 42.6%, respectively, primarily due to the decreases to state tax expense and interest expense related to uncertain tax positions.

The Company’s effective tax rate of 40.8% and 39.1% for the three and six months ended June 30, 2013, respectively, differed from the U.S. federal statutory income tax rate of 35.0%, due primarily to state tax expense.

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Long-Term Debt - Scheduled Principal Payments of Total Debt (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Debt Disclosure [Abstract]
2013 (remaining 6 months)
2014	538
2015	392,271
2016	177,296
Total	$ 570,105

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Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2013

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet as of June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation		Subsidiary Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	11,040	$	—		$	11,040
Restricted cash		280		—		—			280
Accounts receivable, net		—		39,331		—			39,331
Prepaid expenses		3,951		3,479		—			7,430
Other current assets		1,176		1,422		—			2,598
Income taxes receivable		3,094		—		—			3,094
Deferred income taxes		6,352		—		—			6,352
Current assets of discontinued operations		—		3,135		—			3,135
Total current assets		14,853		58,407		—			73,260
Property and equipment, net		8,194		123,212		—			131,406
Goodwill		—		519,093		—			519,093
Other intangible assets, net		—		281,079		—			281,079
Other assets, net		17,766		539		—			18,305
Investment in subsidiaries		935,682		—		(935,682	)		—
Total assets	$	976,495	$	982,330	$	(935,682	)	$	1,023,143
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$	6,276	$	1,231	$	—		$	7,507
Accrued liabilities		25,229		15,972		—			41,201
Other current liabilities		967		14,505		—			15,472
Current liabilities of discontinued operations		—		2,287		—			2,287
Total current liabilities		32,472		33,995		—			66,467
Long-term debt		567,174		—		—			567,174
Other long-term liabilities		1,827		6,815		—			8,642
Long-term liabilities of discontinued operations		—		5,838		—			5,838
Deferred income taxes		107,310		—		—			107,310
Total liabilities		708,783		46,648		—			755,431
Total stockholder’s equity		267,712		935,682		(935,682	)		267,712
Total liabilities and stockholder’s equity	$	976,495	$	982,330	$	(935,682	)	$	1,023,143

Condensed Consolidating Balance Sheet as of December 31, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation		Subsidiary Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	19,058	$	—		$	19,058
Restricted cash		364		—		—			364
Accounts receivable, net		—		36,737		—			36,737
Prepaid expenses		1,830		2,951		—			4,781
Other current assets		1,184		1,407		—			2,591
Income taxes receivable		1,109		—		—			1,109
Deferred income taxes		6,352		—		—			6,352
Current assets of discontinued operations		—		2,759		—			2,759
Total current assets		10,839		62,912		—			73,751
Property and equipment, net		8,578		121,803		—			130,381
Goodwill		—		518,953		—			518,953
Other intangible assets, net		—		294,085		—			294,085
Other assets, net		19,905		491		—			20,396
Investment in subsidiaries		957,075		—		(957,075	)		—
Total assets	$	996,397	$	998,244	$	(957,075	)	$	1,037,566
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$	5,887	$	914	$	—		$	6,801
Accrued liabilities		21,843		14,623		—			36,466
Current portion of long-term debt		4,822		18		—			4,840
Other current liabilities		1,143		9,943		—			11,086
Current liabilities of discontinued operations		—		2,372		—			2,372
Total current liabilities		33,695		27,870		—			61,565
Long-term debt		584,535		—		—			584,535
Other long-term liabilities		1,716		7,024		—			8,740
Long-term liabilities of discontinued operations		—		6,275		—			6,275
Deferred income taxes		107,289		—		—			107,289
Total liabilities		727,235		41,169		—			768,404
Total stockholder’s equity		269,162		957,075		(957,075	)		269,162
Total liabilities and stockholder’s equity	$	996,397	$	998,244	$	(957,075	)	$	1,037,566

Condensed Consolidating Statements of Operations

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	9		$	118,566		$	—		$	118,575
Management fee revenues		21,326			—			(21,326	)		—
Total net revenues		21,335			118,566			(21,326	)		118,575
Operating expenses:
Salaries and benefits		7,587			49,262			—			56,849
Facilities and other operating costs		2,980			34,404			—			37,384
Provision for doubtful accounts		—			1,851			—			1,851
Depreciation and amortization		1,107			4,225			—			5,332
Asset impairments		—			10,859			—			10,859
Management fee expense		—			21,326			(21,326	)		—
Total operating expenses		11,674			121,927			(21,326	)		112,275
Operating income		9,661			(3,361	)		—			6,300
Interest expense		(12,163	)		—			—			(12,163	)
Other income		236			5			—			241
Income (loss) from continuing operations before income taxes		(2,266	)		(3,356	)		—			(5,622	)
Income tax expense		(925	)		(1,370	)		—			(2,295	)
Equity in income of subsidiaries, net of tax		(2,260	)		—			2,260			—
Loss from continuing operations		(3,601	)		(1,986	)		2,260			(3,327	)
Loss from discontinued operations, net of tax		—			(274	)		—			(274	)
Net loss	$	(3,601	)	$	(2,260	)	$	2,260		$	(3,601	)

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	18		$	114,959		$	—		$	114,977
Management fee revenues		20,813			—			(20,813	)		—
Total net revenues		20,831			114,959			(20,813	)		114,977
Operating expenses:
Salaries and benefits		6,722			47,863			—			54,585
Facilities and other operating costs		720			32,532			—			33,252
Provision for doubtful accounts		—			1,465			—			1,465
Depreciation and amortization		1,091			3,936			—			5,027
Management fee expense		—			20,813			(20,813	)		—
Total operating expenses		8,533			106,609			(20,813	)		94,329
Operating income		12,298			8,350			—			20,648
Interest expense		(12,552	)		—			—			(12,552	)
Other income		248			3			—			251
Income (loss) from continuing operations before income taxes		(6	)		8,353			—			8,347
Income tax expense		(3	)		3,503			—			3,500
Equity in income of subsidiaries, net of tax		4,397			—			(4,397	)		—
Income from continuing operations		4,394			4,850			(4,397	)		4,847
Loss from discontinued operations, net of tax		—			(453	)		—			(453	)
Net income	$	4,394		$	4,397		$	(4,397	)	$	4,394

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	20		$	229,139		$	—		$	229,159
Management fee revenues		42,046			—			(42,046	)		—
Total net revenues		42,066			229,139			(42,046	)		229,159
Operating expenses:
Salaries and benefits		15,105			97,712			—			112,817
Facilities and other operating costs		3,568			67,404			—			70,972
Provision for doubtful accounts		—			4,026			—			4,026
Depreciation and amortization		2,215			7,972			—			10,187
Asset impairments		—			10,859			—			10,859
Management fee expense		—			42,046			(42,046	)		—
Total operating expenses		20,888			230,019			(42,046	)		208,861
Operating income		21,178			(880	)		—			20,298
Interest expense		(23,642	)		—			—			(23,642	)
Other income		498			5			—			503
Income (loss) from continuing operations before income taxes		(1,966	)		(875	)		—			(2,841	)
Income tax expense		(769	)		(343	)		—			(1,112	)
Equity in income of subsidiaries, net of tax		(1,017	)		—			1,017			—
Loss from continuing operations		(2,214	)		(532	)		1,017			(1,729	)
Loss from discontinued operations, net of tax		—			(485	)		—			(485	)
Net loss	$	(2,214	)	$	(1,017	)	$	1,017		$	(2,214	)

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations			Consolidated
Net revenues:
Net client service revenues	$	39		$	223,160		$	—		$	223,199
Management fee revenues		42,287			—			(42,287	)		—
Total net revenues		42,326			223,160			(42,287	)		223,199
Operating expenses:
Salaries and benefits		13,765			95,408			—			109,173
Facilities and other operating costs		1,366			64,104			—			65,470
Provision for doubtful accounts		—			3,808			—			3,808
Depreciation and amortization		2,175			7,746			—			9,921
Management fee expense		—			42,287			(42,287	)		—
Total operating expenses		17,306			213,353			(42,287	)		188,372
Operating income		25,020			9,807			—			34,827
Interest expense		(24,338	)		—			—			(24,338	)
Other income		487			7			—			494
Income from continuing operations before income taxes		1,169			9,814			—			10,983
Income tax expense		498			4,186			—			4,684
Equity in income of subsidiaries, net of tax		4,382			—			(4,382	)		—
Income from continuing operations		5,053			5,628			(4,382	)		6,299
Loss from discontinued operations, net of tax		—			(1,246	)		—			(1,246	)
Net income	$	5,053		$	4,382		$	(4,382	)	$	5,053

Condensed Consolidating Statement of Comprehensive Income (Loss)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Net loss	$	(3,601	)	$	(2,260	)	$	2,260	$	(3,601	)
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $5)		7			—			—		7
Total comprehensive loss	$	(3,594	)	$	(2,260	)	$	2,260	$	(3,594	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Net loss	$	(2,214	)	$	(1,017	)	$	1,017	$	(2,214	)
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $21)		31			—			—		31
Total comprehensive loss	$	(2,183	)	$	(1,017	)	$	1,017	$	(2,183	)

Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2013

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	5,210		$	20,158		$	—	$	25,368
Cash flows from investing activities:
Additions of property and equipment		(2,450	)		(6,982	)		—		(9,432	)
Proceeds from the sale of property and equipment		—			36			—		36
Acquisition of business, net of cash acquired		(140	)		—			—		(140	)
Net cash used in investing activities		(2,590	)		(6,946	)		—		(9,536	)
Cash flows from financing activities:
Intercompany transfers		21,033			(21,033	)		—		—
Repayment of long-term debt		(4,822	)		(197	)		—		(5,019	)
Repayments on revolving line of credit		(17,995	)		—			—		(17,995	)
Capital contributed to Parent		(599	)		—			—		(599	)
Capitalized financing costs		(217	)		—			—		(217	)
Other financing activities		(20	)		—			—		(20	)
Net cash used in financing activities		(2,620	)		(21,230	)		—		(23,850	)
Net decrease in cash and cash equivalents		—			(8,018	)		—		(8,018	)
Cash and cash equivalents — beginning of period		—			19,058			—		19,058
Cash and cash equivalents — end of period	$	—		$	11,040		$	—	$	11,040

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2012

(In thousands)

(Unaudited)

	CRC Health Corporation			Subsidiary Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	12,498		$	20,090		$	—	$	32,588
Cash flows from investing activities:
Additions of property and equipment		(1,917	)		(5,424	)		—		(7,341	)
Other investing activities		(68	)		39			—		(29	)
Net cash used in investing activities		(1,985	)		(5,385	)		—		(7,370	)
Cash flows from financing activities:
Intercompany transfers		830			(830	)		—		—
Borrowings under long-term debt		84,096			—			—		84,096
Repayment of long-term debt		(87,638	)		(461	)		—		(88,099	)
Borrowings on revolving line of credit		18,000			—			—		18,000
Repayments on revolving line of credit		(13,505	)		—			—		(13,505	)
Capital contributed to Parent		(9,524	)		—			—		(9,524	)
Capitalized financing costs		(2,772	)		—			—		(2,772	)
Net cash used in financing activities		(10,513	)		(1,291	)		—		(11,804	)
Net increase in cash and cash equivalents		—			13,414			—		13,414
Cash and cash equivalents — beginning of period		—			10,183			—		10,183
Cash and cash equivalents — end of period	$	—		$	23,597		$	—	$	23,597

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Overview and Basis of Presentation - Summary of Corrections in Condensed Consolidated Statements of Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Accumulated Comprehensive Income Loss [Line Items]
Net income	$ (3,601)	$ 4,394	$ (2,214)	$ 5,053
Other comprehensive income:
Total comprehensive income	(3,594)	4,394	(2,183)	5,053
Net income attributable to CRC Health Corporation		4,394		5,053
As Previously Reported [Member]
Accumulated Comprehensive Income Loss [Line Items]
Net income		4,315		5,058
Other comprehensive income:
Total comprehensive income		4,315		5,058
Net loss attributable to noncontrolling interest		(934)		(934)
Net income attributable to CRC Health Corporation		3,381		4,124
Out of Period Corrections [Member]
Accumulated Comprehensive Income Loss [Line Items]
Net income		126		87
Other comprehensive income:
Total comprehensive income		126		87
Net loss attributable to noncontrolling interest		934		934
Net income attributable to CRC Health Corporation		1,060		1,021
Intangible Assets Amortization Corrections [Member]
Accumulated Comprehensive Income Loss [Line Items]
Net income		(47)		(92)
Other comprehensive income:
Total comprehensive income		(47)		(92)
Net income attributable to CRC Health Corporation		$ (47)		$ (92)

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Long-Term Debt - Schedule of Long-Term Debt (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Term Loans [Member]
Debt Instrument [Line Items]
Term loans, discount	$ 2,250	$ 2,751
Senior Subordinated Notes [Member]
Debt Instrument [Line Items]
Senior subordinated notes, discount	$ 682	$ 814

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Condensed Consolidating Financial Information - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Disclosure [Abstract]
Aggregate principal amount	$ 176,614	$ 176,482
Ownership percentage	100.00%

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Restructuring - Summary of Restructuring Activity (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 9,294
Expenses	389
Cash payments	(851)
Reclassification to accrued expenses	(1,338)
Restructuring reserve	7,494
Recovery [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	1,412	[1]
Expenses	66	[1]
Cash payments	(140)	[1]
Reclassification to accrued expenses	(1,338)	[1]
Youth [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	7,882
Expenses	323
Cash payments	(711)
Restructuring reserve	$ 7,494

[1] The restructuring reserve balance and associated activity represents a purchase accounting liability that was accrued in connection with a 2009 acquisition. This amount was inappropriately included in the restructuring reserve disclosure as of December 31, 2009 and thereafter. As of June 30, 2013 and December 31, 2012, the purchase accounting liability is included in "accrued expenses" in the Condensed Consolidated Balance Sheet and the restructuring reserve table above has been appropriately adjusted.

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Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Assets
Derivative Financial Instruments	$ 0	$ 0
Liabilities
Derivative Financial Instruments	66	117
Quoted Prices in Active Markets (Level 1) [Member]
Assets
Derivative Financial Instruments	0	0
Liabilities
Derivative Financial Instruments	0	0
Significant Other Observable Inputs (Level 2) [Member]
Assets
Derivative Financial Instruments	0	0
Liabilities
Derivative Financial Instruments	66	117
Significant Unobservable Inputs (Level 3) [Member]
Assets
Derivative Financial Instruments	0	0
Liabilities
Derivative Financial Instruments	$ 0	$ 0

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	1,000	1,000
Common stock, shares issued	1,000	1,000
Common stock, shares outstanding	1,000	1,000

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Restructuring

6 Months Ended

Jun. 30, 2013

Restructuring And Related Activities [Abstract]

Restructuring

NOTE 7. RESTRUCTURING

As of June 30, 2013, the Company’s restructuring reserve of $7.5 million consists primarily of future rental payments, net of estimated sublease income. These charges are expected to continue through 2020 and are summarized in the following table (in thousands):

	Recovery (1)			Youth			Total
Total restructuring reserve at December 31, 2012	$	1,412		$	7,882		$	9,294
Expenses		66			323			389
Cash payments		(140	)		(711	)		(851	)
Reclassification to accrued expenses		(1,338	)		—			(1,338	)
Total restructuring reserve at June 30, 2013	$	—		$	7,494		$	7,494

⁽¹⁾  The restructuring reserve balance and associated activity represents a purchase accounting liability that was accrued in connection with a 2009 acquisition. This amount was inappropriately included in the restructuring reserve disclosure as of December 31, 2009 and thereafter. As of June 30, 2013 and December 31, 2012, the purchase accounting liability is included in “accrued expenses” in the Condensed Consolidated Balance Sheet and the restructuring reserve table above has been appropriately adjusted.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)	$ (3,601)	$ 4,394	$ (2,214)	$ 5,053
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $5 and $21 for the three and six months ended June 30, 2013, respectively)	7		31
Total comprehensive income (loss)	$ (3,594)	$ 4,394	$ (2,183)	$ 5,053

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Condensed Consolidating Financial Information - Condensed Consolidating Statement of Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Comprehensive Income [Line Items]
Net loss	$ (3,601)	$ 4,394	$ (2,214)	$ 5,053
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $5 and $21 for the three and six months ended June 30, 2013, respectively)	7		31
Total comprehensive loss	(3,594)	4,394	(2,183)	5,053
CRC Health Corporation [Member]
Comprehensive Income [Line Items]
Net loss	(3,601)		(2,214)
Other comprehensive income:
Net change in unrealized loss on cash flow hedges (net of tax of $5 and $21 for the three and six months ended June 30, 2013, respectively)	7		31
Total comprehensive loss	(3,594)		(2,183)
Subsidiary Guarantors [Member]
Comprehensive Income [Line Items]
Net loss	(2,260)		(1,017)
Other comprehensive income:
Total comprehensive loss	(2,260)		(1,017)
Eliminations [Member]
Comprehensive Income [Line Items]
Net loss	2,260		1,017
Other comprehensive income:
Total comprehensive loss	$ 2,260		$ 1,017

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 11,040	$ 19,058
Restricted cash	280	364
Accounts receivable, net	39,331	36,737
Prepaid expenses	7,430	4,781
Other current assets	2,598	2,591
Income taxes receivable	3,094	1,109
Deferred income taxes	6,352	6,352
Current assets of discontinued operations	3,135	2,759
Total current assets	73,260	73,751
Property and equipment, net	131,406	130,381
Goodwill	519,093	518,953
Other intangible assets, net	281,079	294,085
Other assets, net	18,305	20,396
Total assets	1,023,143	1,037,566
Current liabilities:
Accounts payable	7,507	6,801
Accrued payroll and related expenses	19,292	18,333
Accrued interest	9,334	9,412
Accrued expenses	12,575	8,721
Current portion of long-term debt		4,840
Deferred revenue	14,169	9,494
Other current liabilities	1,303	1,592
Current liabilities of discontinued operations	2,287	2,372
Total current liabilities	66,467	61,565
Long-term debt	567,174	584,535
Other long-term liabilities	8,642	8,740
Long-term liabilities of discontinued operations	5,838	6,275
Deferred income taxes	107,310	107,289
Total liabilities	755,431	768,404
Commitments and contingencies
Stockholders' equity
Common stock, $0.001 par value - 1,000 shares authorized, issued and outstanding
Additional paid-in capital	465,665	464,932
Accumulated deficit	(197,913)	(195,699)
Accumulated other comprehensive loss	(40)	(71)
Total equity	267,712	269,162
Total liabilities and stockholders' equity	$ 1,023,143	$ 1,037,566

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Discontinued Operations - Summary of Results of Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Discontinued Operations And Disposal Groups [Abstract]
Net client service revenues	$ 36	$ 617	$ 70	$ 1,329
Operating expenses	542	1,379	925	3,365
Interest expense				(1)
Loss before income taxes	(506)	(762)	(855)	(2,037)
Loss on disposal of discontinued operations	17		17
Income tax benefit	(249)	(309)	(387)	(791)
Loss from discontinued operations	$ (274)	$ (453)	$ (485)	$ (1,246)

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Overview and Basis of Presentation - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended		3 Months Ended	6 Months Ended		6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Jun. 30, 2012 Corrections [Member]	Jun. 30, 2012 Corrections [Member]	Jun. 30, 2013 Corrections [Member]	Jun. 30, 2013 Leasehold improvements [Member] Corrections [Member]
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Intangible asset impairment		$ 1.2
Aggregate intangible asset amortization				0.1	0.2
Management fees reimbursable			0.7
Leasehold improvements						0.4
Decrease in supplies, facilities, and other operating costs	0.9
Depreciation related to leasehold improvements costs							$ 0.6

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Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Derivative Financial Instruments on Condensed Consolidate Statement of Operations

The table below presents the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statement of Operations (in thousands):

Derivatives Designated as Cash Flow Hedges For the Six Months Ended June 30,	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)					Location of Gain or (Loss) Reclassified From Accumulated OCI into Income (Effective portion)		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)					Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	2013			2012				2013			2012				2013			2012
Interest Rate Derivatives
Pay-Fixed Swaps	$	(34	)	$	0		Interest expense	$	(42	)	$	0		Other Income	$	(43	)	$	0

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Derivatives and Hedging Activities - Schedule of Derivative Financial Instruments on Condensed Consolidate Statement of Operations (Detail) (Cash Flow Hedges [Member], Interest Rate Derivatives [Member], Pay-Fixed Swaps [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)	$ (34)	$ 0
Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(42)	0
Other Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	$ (43)	$ 0

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Asset Impairments and Subsequent Events - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended	3 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2013 Oakley School Facility [Member]	Sep. 30, 2013 Subsequent Event [Member]	Sep. 30, 2013 Subsequent Event [Member] Minimum [Member]	Sep. 30, 2013 Subsequent Event [Member] Maximum [Member]	Jun. 30, 2013 Youth [Member] Facility	Jun. 30, 2013 Weight Management [Member] Facility
Subsequent Event [Line Items]
Number of division facilities ceased							5	1
Non-cash impairment charges related to property and equipment	$ 600,000
Non-cash impairment charges related to other intangible assets	6,600,000
Employee severance charges				500,000
Lease termination charges					9,000,000	10,000,000
Charge related to other intangible assets	$ 10,859,000	$ 10,859,000	$ 3,700,000

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Long-Term Debt - Revolving Line of Credit - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Line of credit	$ 9,005,000	$ 27,000,000
Percentage of capital stock of first-tier foreign subsidiaries	65.00%
Revolving line of credit, covenant description	The Company's Credit Agreement requires the Company to comply on a quarterly basis with certain financial and other covenants, including a maximum total leverage ratio test and an interest coverage ratio test.
Revolving line of credit, covenant compliance	As of June 30, 2013, the Company was in compliance with all the covenants.
Outstanding amount	176,614,000	176,482,000
Senior Subordinated Notes [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Feb. 01, 2016
Debt instrument interest rate stated percentage	10.75%
Outstanding amount	176,600,000
Senior subordinated notes, discount	700,000
Repurchase notes percentage of their face amount	101.00%
Senior subordinated notes, covenant description	The Company's Notes agreement requires it to comply on a quarterly basis with certain covenants.
Senior subordinated notes,covenant compliance	As of June 30, 2013, the Company was in compliance with all the covenants.
Revolving Line of Credit [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date	Aug. 16, 2015
Debt Instrument description of variable rate basis	(i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent, plus an applicable margin of 4.00%, 3.75%, 3.50% or 3.25%, based upon the Company's leverage ratio being within certain defined ranges, and (ii) for base rate loans, a rate per annum equal to the greater of (x) the prime rate of the administrative agent and (y) the federal funds rate plus one-half of 1.00%, plus an applicable margin of 3.00%, 2.75%, 2.50% or 2.25%, based upon the Company's leverage ratio being within certain defined ranges.
Commitment fees rate	0.625%
Line of credit	9,000,000
Revolving credit interest rate	4.24%
Revolving Line of Credit [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Line of credit	9,200,000
Revolving Line of Credit [Member] | Line of Credit Facility Commitment Amount [Member]
Debt Instrument [Line Items]
Revolving credit commitments	$ 63,000,000

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Income Taxes - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Tax Disclosure [Abstract]
Effective tax rate	40.80%	41.90%	39.10%	42.60%
Effective income tax rate reconciliation, foreign income tax rate differential			35.00%

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Long-Term Debt - Schedule of Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Disclosure [Abstract]
Term loans, net of discount of $2,250 in 2013 and $2,751 in 2012	$ 381,555	$ 385,875
Revolving line of credit	9,005	27,000
Senior subordinated notes, net of discount of $682 in 2013 and $814 in 2012	176,614	176,482
Other		18
Total debt	567,174	589,375
Less: current portion of long-term debt		(4,840)
Total long-term debt	$ 567,174	$ 584,535

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 6. COMMITMENTS AND CONTINGENCIES

Legal Matters — In a complaint initially filed on July 6, 2011, and amended on August 25, 2011, in Multnomah County Circuit Court in Oregon, 17 former students of one of our previously closed therapeutic boarding school facilities allege claims for intentional and negligent infliction of emotional distress, battery, breach of contract and negligence arising out of their treatment in certain programs of our school. We and our subsidiaries, Aspen Education Group, Inc. (“Aspen”) and Mount Bachelor Educational Center, Inc. (“MBA”), are among the defendants in the pending litigation. The plaintiffs seek a total of $26.0 million in relief. A second and third suit were filed in November 2011 and January 2013, respectively, in Multnomah County Circuit Court in Oregon by 14 former and 13 former students, respectively, also alleging abuse. The plaintiffs seek a total of $23 million in relief in the second suit and a total of $19.5 million in relief in the third suit. We and the other defendants intend to defend vigorously the pending lawsuits. In consultation with counsel and based on our preliminary investigation into the facts alleged, we believe these cases are without merit. However, at this time, we are unable to predict the outcome of the lawsuit, the possible loss or range of loss, if any, after consideration of the extent of insurance coverage associated with the resolution of the lawsuit or any potential effect it may have on us or our operations. On May 10, 2012, Nautilus Insurance Corporation filed a complaint against CRC Health Group Inc. and certain related entities seeking declaratory relief in the federal district court in Portland, Oregon. The Complaint seeks a judicial determination as to whether the Nautilus general and healthcare professional liability insurance policies provide coverage for these suits against MBA and asks the court to enter judgment that the policies are null and void, or alternatively that the policies do not cover these specific lawsuits, and to declare that Nautilus has no duty to defend or indemnify MBA, Aspen or CRC. This litigation with Nautilus Insurance Corporation has been stayed pending resolution of the underlying suits against MBA. In consultation with counsel and based on our preliminary review of the matters alleged, we believe this suit is without merit and we are vigorously defending the matter.

In a complaint filed in August 2011, a suit against our New Life Lodge facility was brought by Kathy Mauk as administrator of the estate of Lindsey Poteet a/k/a Lindsey Richardson, deceased and on behalf of the wrongful death beneficiary of Lindsey Poteet a/k/a Lindsey Richardson, Arwen Richardson, vs. CRC Health Tennessee, Inc. dba New Life Lodge and CRC Health Group, Inc. dba New Life Lodge. The suit alleges negligence and medical malpractice resulting in wrongful death and seeks a total $32.0 million in compensatory and punitive damages. A second suit was brought in December 2012 against our New Life Lodge facility by Charity Comage as administrator of the estate of and on behalf of Savon Kinney, deceased vs CRC Health Tennessee, Inc. dba New Life Lodge and CRC Health Group, Inc. dba New Life Lodge, American Behavioral Consultants, LLC and Holly Liter, APN. The second suit alleges negligence and medical malpractice resulting in the wrongful death and seeking a total $14.5 million in compensatory and punitive damages. American Behavioral Consultants, LLC served as an independent contractor for New Life Lodge and Ms. Holly Liter was an employee of American Behavioral Consultants, LLC. A third suit has been filed against our New Life Lodge by Penny Bryant, mother of Patrick Bryant, deceased, vs. CRC Health Tennessee, Inc. and Jonathan Butler, M.D. This suit was originally filed in 2011 and then dismissed without prejudice in October 2012 and was re-filed in June 2013. This suit alleges negligence resulting in the wrongful death of Patrick Bryant and seeks a total of $13.0 million in compensatory and punitive damages. We intend to defend vigorously these lawsuits. In consultation with counsel and based on our preliminary investigation into the facts alleged, we believe these cases are without merit. Although the Company believes the amounts reserved are adequate based on currently available information, the estimation process involves a considerable amount of judgment by management and the ultimate amounts could vary materially.

Our New Life Lodge facility is currently responding to a civil investigative demand (“CID”) from the Office of the Attorney General of the State of Tennessee inquiring about possible false claims for payment related to services provided to TennCare recipients for the period 2007 to 2011. The United States Department of Justice is participating in this investigation and also has requested information from New Life Lodge. We are cooperating fully with the investigation. Such CIDs are often associated with previously filed qui tam actions, or lawsuits filed under seal under the False Claims Act (“FCA”). Qui tam actions are brought by private plaintiffs suing on behalf of the federal government for alleged FCA violations. The Company firmly believes that any false claims action is without merit. If litigation results, we intend to vigorously defend our position; however, we cannot predict the outcome or timing of such litigation. Although the Company believes that the amounts reserved are adequate based on currently available information, the estimation process involves a considerable amount of judgment by management and the ultimate amounts could vary materially.

We are involved in other litigation and regulatory investigations arising in the ordinary course of business. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on our future financial position or results from operations and cash flows, except as discussed above. As of June 30, 2013 and December 31, 2012, accruals for legal matters totaled $4.4 million and $1.6 million, respectively, and were included in “accrued expenses” in the Condensed Consolidated Balance Sheets.

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Overview and Basis of Presentation - Correction to Condensed Consolidated Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Condensed Balance Sheet Statements, Captions [Line Items]
Current assets of discontinued operations	$ 3,135	$ 2,759
Total current assets	73,260	73,751
Other intangible assets, net	281,079	294,085
Total assets	1,023,143	1,037,566
Accumulated deficit	(197,913)	(195,699)
Total equity	267,712	269,162
Total liabilities and stockholders' equity	1,023,143	1,037,566
As Previously Reported [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Current assets of discontinued operations		2,623
Total current assets		73,615
Other intangible assets, net		292,846
Total assets		1,036,191
Accumulated deficit		(197,074)
Total equity		267,787
Total liabilities and stockholders' equity		1,036,191
Corrections [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Current assets of discontinued operations		136
Total current assets		136
Other intangible assets, net		1,239
Total assets		1,375
Accumulated deficit		1,375
Total equity		1,375
Total liabilities and stockholders' equity		$ 1,375

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Long-Term Debt - Components of Interest Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Debt Instrument [Line Items]
Amortization of debt discount and capitalized financing costs			$ 2,122	$ 3,014
Total interest expense	12,163	12,552	23,642	24,338
Interest Expense [Member]
Debt Instrument [Line Items]
Contractual interest on total debt	11,013	11,304	21,933	21,544
Amortization of debt discount and capitalized financing costs	1,332	1,354	2,122	3,014
Interest capitalized to property and equipment, net	$ (182)	$ (106)	$ (413)	$ (220)

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Segment Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Information

NOTE 9. SEGMENT INFORMATION

Reportable segments are based upon the Company’s organizational structure, the manner in which the operations are managed and on the level at which the Company’s chief operating decision-maker allocates resources. The Company’s chief operating decision-maker is its Chief Executive Officer.

A summary of the Company’s reportable segments are as follows:

Recovery — The recovery segment specializes in the treatment of chemical dependency and other behavioral health disorders. Services offered in this segment include: inpatient/residential care, partial/day treatment, intensive outpatient groups, therapeutic living/half-way house environments, aftercare centers and detoxification. As of June 30, 2013, the recovery segment operates 30 inpatient, 16 outpatient facilities, and 58 comprehensive treatment centers (“CTCs”) in 21 states.

Youth — The youth segment provides a wide variety of adolescent therapeutic programs through settings and solutions that match individual needs with the appropriate learning and therapeutic environment. Services offered in this segment include boarding schools and experiential outdoor education programs. As of June 30, 2013, the youth segment operates 15 adolescent and young adult programs in 6 states.

Weight management — The weight management segment provides adult and adolescent treatment services for obesity and eating disorders, each a related behavioral disorder. Services offered in this segment include treatment plans through a combination of medical, psychological and social treatment programs. As of June 30, 2013, the weight management segment operates 17 facilities in 8 states, and one in the United Kingdom.

Corporate — In addition to the three reportable segments described above, the Company has activities classified as corporate which represent general and administrative expenses (management, financial, legal, human resources and information systems), and stock-based compensation expense that are not allocated to the segments.

Major Customers — No single customer represented 10% or more of the Company’s total net revenue in any period presented.

Geographic Information — The Company’s business operations are primarily in the United States.

Selected financial information for the Company’s reportable segments is presented in the table below (in thousands). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues:
Recovery	$	94,269		$	88,513		$	184,944		$	175,609
Youth		17,556			19,823			32,494			36,125
Weight management		6,741			6,623			11,701			11,423
Corporate		9			18			20			42
Total net client service revenues	$	118,575		$	114,977		$	229,159		$	223,199
Operating income (loss):
Recovery	$	28,817		$	28,083		$	54,708		$	53,077
Youth		(8,958	)		1,534			(11,586	)		38
Weight management		(1,894	)		(454	)		(1,956	)		(1,023	)
Corporate		(11,665	)		(8,515	)		(20,868	)		(17,265	)
Operating income		6,300			20,648			20,298			34,827
Interest expense		(12,163	)		(12,552	)		(23,642	)		(24,338	)
Other income		241			251			503			494
Income (loss) from continuing operations before income taxes	$	(5,622	)	$	8,347		$	(2,841	)	$	10,983

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 5. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Derivative financial instruments

Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate forward curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2013, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2013, aggregated by the level in the fair value hierarchy within which those measurements fall as of June 30, 2013 and December 31, 2012 (in thousands):

	Quoted Prices in Active  Markets (Level 1)				Significant Other Observable  Inputs (Level 2)				Significant Unobservable  Inputs (Level 3)				Total Fair Value
	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Assets
Derivative Financial Instruments	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Liabilities
Derivative Financial Instruments	$	0	$	0	$	66	$	117	$	0	$	0	$	66	$	117

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company’s goodwill and other indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset may be less than the carrying amount of the asset. In addition, the Company’s property and equipment and finite-lived intangibles are assessed for recoverability of the carrying value whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The following table presents the non-financial assets that were measured and recorded at fair value based on Level 3 inputs on a non-recurring basis during the three and six months ended June 30, 2013 (in thousands):

	Three and Six Months Ended June 30, 2013
	Impairment Charge		Fair Value
Property and equipment	$	568	$	—
Other intangible assets		10,291		—
Total	$	10,859	$	—

Fair Value of Financial Instruments

Financial instruments not measured at fair value on a recurring basis include cash, restricted cash, accounts receivable (net), loan program notes receivable (net), accounts payable, term loans (net), and senior subordinated notes (net). With the exception of financial instruments noted in the following table, the fair value of the Company’s financial instruments approximate carrying value due to their short maturities.

The estimated fair value of financial instruments with long-term maturities is as follows:

	June 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value  (1)
Assets
Loan program notes receivable, net	$	10,675	$	9,282	$	11,473	$	9,606
Liabilities
Term loans, net	$	381,555	$	404,120	$	385,875	$	402,757
Senior subordinated notes, net		176,614		187,956		176,482		181,248
Total liabilities	$	558,169	$	592,076	$	562,357	$	584,005

⁽¹⁾  The fair values as of December 31, 2012 have been corrected from amounts previously reported.

The estimated fair value for loan program notes is primarily based on securitization market conditions for similar loans. The Company’s term loans are measured at fair value based on present value methods using credit spreads derived from market data to discount the projected interest and principal payments. The Company’s senior subordinated notes are measured at fair value based on bond-yield data from market trading activity as well as U.S Treasury rates with similar maturities as the senior subordinated notes to discount the projected interest and principal payments. As of June 30, 2013 and December 31, 2012, the estimated fair value of loan program notes receivable, term loans and senior subordinated notes was determined based on Level 3 inputs.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income (loss)	$ (2,214)	$ 5,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,187	10,008
Amortization of debt discount and capitalized financing costs	2,122	3,014
Asset impairments	10,859
Loss on disposal of property and equipment	190	418
Provision for doubtful accounts	4,008	3,954
Stock-based compensation	1,332	1,016
Deferred income taxes	21	(804)
Changes in assets and liabilities:
Restricted cash	84	(226)
Accounts receivable	(6,599)	(1,878)
Prepaid expenses	(2,642)	1,118
Income taxes receivable and payable	(2,372)	2,705
Other current assets	(7)	(170)
Accounts payable	841	(300)
Accrued liabilities	4,924	2,873
Other current liabilities	4,342	6,345
Other long-term assets	821	(853)
Other long-term liabilities	(529)	315
Net cash provided by operating activities	25,368	32,588
Cash flows from investing activities:
Additions of property and equipment	(9,432)	(7,341)
Proceeds from sale of property and equipment	36
Acquisition of business, net of cash acquired	(140)
Other investing activities		(29)
Net cash used in investing activities	(9,536)	(7,370)
Cash flows from financing activities:
Borrowings of long-term debt		84,096
Repayment of long-term debt	(5,019)	(88,099)
Borrowings on revolving line of credit		18,000
Repayments on revolving line of credit	(17,995)	(13,505)
Capital distributed to Parent	(599)	(9,524)
Capitalized financing costs	(217)	(2,772)
Other financing activities	(20)
Net cash used in financing activities	(23,850)	(11,804)
Net increase (decrease) in cash and cash equivalents	(8,018)	13,414
Cash and cash equivalents - beginning of period	19,058	10,183
Cash and cash equivalents - end of period	$ 11,040	$ 23,597

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Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013
Segment Reporting Information [Line Items]
Number of customers that represent 10% or more of total net revenue in any period presented	0
Operating Segments [Member] | Recovery [Member]
Segment Reporting Information [Line Items]
Number of states in which entity operates	21
Operating Segments [Member] | Recovery [Member] | Inpatient facilities [Member]
Segment Reporting Information [Line Items]
Number of patient facilities	30
Operating Segments [Member] | Recovery [Member] | Outpatient facilities [Member]
Segment Reporting Information [Line Items]
Number of patient facilities	16
Operating Segments [Member] | Recovery [Member] | Comprehensive treatment centers [Member]
Segment Reporting Information [Line Items]
Number of patient facilities	58
Operating Segments [Member] | Youth [Member]
Segment Reporting Information [Line Items]
Number of states in which entity operates	6
Operating Segments [Member] | Youth [Member] | Adolescent and young adult programs [Member]
Segment Reporting Information [Line Items]
Number of patient facilities	15
Operating Segments [Member] | Weight Management [Member]
Segment Reporting Information [Line Items]
Number of patient facilities	17
Number of states in which entity operates	8
Operating Segments [Member] | Weight Management [Member] | United Kingdom [Member]
Segment Reporting Information [Line Items]
Number of patient facilities	1
Operating Segments [Member] | Corporate [Member]
Segment Reporting Information [Line Items]
Number of reportable segments	3

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Fair Value Measurements - Schedule of Estimated Fair Value of Financial Instruments with Long-Term Maturities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Liabilities
Term loans, net	$ 381,555	$ 385,875
Senior subordinated notes, net	176,614	176,482
Total liabilities	755,431	768,404
Carrying Amount [Member]
Assets
Loan program notes receivable, net	10,675	11,473
Liabilities
Term loans, net	381,555	385,875
Senior subordinated notes, net	176,614	176,482
Total liabilities	558,169	562,357
Fair Value [Member]
Assets
Loan program notes receivable, net	9,282	9,606	[1]
Liabilities
Term loans, net	404,120	402,757	[1]
Senior subordinated notes, net	187,956	181,248	[1]
Total liabilities	$ 592,076	$ 584,005	[1]

[1] The fair values as of December 31, 2012 have been corrected from amounts previously reported.

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Overview and Basis of Presentation - Summary of Corrections in Condensed Consolidated Statement of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income (loss)	$ (2,214)	$ 5,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,187	10,008
Amortization of debt discount and capitalized financing costs	2,122	3,014
Loss on disposal of property and equipment	190	418
Provision for doubtful accounts	4,008	3,954
Stock-based compensation	1,332	1,016
Deferred income taxes	21	(804)
Changes in assets and liabilities:
Restricted cash	84	(226)
Accounts receivable	(6,599)	(1,878)
Prepaid expenses	(2,642)	1,118
Income taxes receivable and payable	(2,372)	2,705
Other current assets	(7)	(170)
Accounts payable	841	(300)
Accrued liabilities	4,924	2,873
Other current liabilities	4,342	6,345
Other long-term assets	821	(853)
Other long-term liabilities	(529)	315
Net cash provided by operating activities	25,368	32,588
As Previously Reported [Member]
Cash flows from operating activities:
Net income (loss)		5,058
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,798
Amortization of debt discount and capitalized financing costs		3,014
Loss on disposal of property and equipment		843
Provision for doubtful accounts		3,954
Stock-based compensation		1,016
Deferred income taxes		(797)
Changes in assets and liabilities:
Restricted cash		(226)
Accounts receivable		(1,878)
Prepaid expenses		1,118
Income taxes receivable and payable		2,705
Other current assets		(170)
Accounts payable		(300)
Accrued liabilities		2,646
Other current liabilities		6,345
Other long-term assets		(853)
Other long-term liabilities		315
Net cash provided by operating activities		32,588
Out of Period Corrections [Member]
Cash flows from operating activities:
Net income (loss)		87
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		50
Loss on disposal of property and equipment		(425)
Deferred income taxes		61
Changes in assets and liabilities:
Accrued liabilities		227
Intangible Assets Amortization Corrections [Member]
Cash flows from operating activities:
Net income (loss)		(92)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		160
Deferred income taxes		(68)
Corrections [Member]
Cash flows from operating activities:
Net income (loss)		5,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,008
Amortization of debt discount and capitalized financing costs		3,014
Loss on disposal of property and equipment		418
Provision for doubtful accounts		3,954
Stock-based compensation		1,016
Deferred income taxes		(804)
Changes in assets and liabilities:
Restricted cash		(226)
Accounts receivable		(1,878)
Prepaid expenses		1,118
Income taxes receivable and payable		2,705
Other current assets		(170)
Accounts payable		(300)
Accrued liabilities		2,873
Other current liabilities		6,345
Other long-term assets		(853)
Other long-term liabilities		315
Net cash provided by operating activities		$ 32,588

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Condensed Consolidating Financial Information - Condensed Consolidating Statement of Comprehensive Income (Loss) (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Comprehensive Income [Line Items]
Net change in unrealized loss on cash flow hedges, tax	$ 5	$ 21
CRC Health Corporation [Member]
Comprehensive Income [Line Items]
Net change in unrealized loss on cash flow hedges, tax	$ 5	$ 21

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Overview and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, without audit. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States of America for annual financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2012 has been derived from our audited financial statements.

In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of the Company, its results of operations, and its cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Principles of Consolidation

Principles of Consolidation — The Company’s condensed consolidated financial statements include the accounts of CRC Health Corporation and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates — Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Reclassifications: Discontinued Operations

Reclassifications: Discontinued Operations — The condensed consolidated statements of operations have been reclassified for all periods presented to reflect the presentation of closed or sold facilities as discontinued operations (see Note 8). Unless noted otherwise, discussions in the notes to the condensed consolidated financial statements pertain to continuing operations.

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Discontinued Operations

6 Months Ended

Jun. 30, 2013

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

NOTE 8. DISCONTINUED OPERATIONS

The results of operations for those facilities classified as discontinued operations are summarized below (in thousands). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net client service revenues	$	36		$	617		$	70		$	1,329
Operating expenses		542			1,379			925			3,365
Interest expense		—			—			—			(1	)
Loss before income taxes		(506	)		(762	)		(855	)		(2,037	)
Loss on disposal of discontinued operations		17			—			17			—
Income tax benefit		(249	)		(309	)		(387	)		(791	)
Loss from discontinued operations	$	(274	)	$	(453	)	$	(485	)	$	(1,246	)

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Long-term debt as of June 30, 2013 and December 31, 2012 consists of the following (in thousands):

Term Loans and Revolving Line of Credit

	June 30, 2013		December 31, 2012
Term loans, net of discount of $2,250 in 2013 and $2,751 in 2012	$	381,555	$	385,875
Revolving line of credit		9,005		27,000
Senior subordinated notes, net of discount of $682 in 2013 and $814 in 2012		176,614		176,482
Other		—		18
Total debt		567,174		589,375
Less: current portion of long-term debt		—		(4,840	)
Total long-term debt	$	567,174	$	584,535

Percentages of Long-Term Debt Maturities

The Company may redeem some or all of the Notes at the redemption prices (expressed as percentages of principal amount of Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if redeemed during the twelve-month period beginning on February 1 of each of the years indicated below:

Year	Percentage
2013		101.792	%
2014 and thereafter		100.000	%

Scheduled Principal Payments of Total Debt

As of June 30, 2013, currently scheduled principal payments of total debt, excluding the effects of the discounts on the term loans and the senior subordinated notes, are as follows (in thousands):

2013 (remaining 6 months)	$	—
2014		538
2015		392,271
2016		177,296
Total	$	570,105

Components of Interest Expense

Interest expense — The following table presents the components of interest expense (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Contractual interest on total debt	$	11,013		$	11,304		$	21,933		$	21,544
Amortization of debt discount and capitalized financing costs		1,332			1,354			2,122			3,014
Interest capitalized to property and equipment, net		(182	)		(106	)		(413	)		(220	)
Total interest expense	$	12,163		$	12,552		$	23,642		$	24,338

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Overview and Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Corrections to Condensed Consolidated Statements of Balance Sheet, Statements of Operations, Comprehensive Income and CashFlow

Condensed Consolidated Balance Sheet as of December 31, 2012 (in thousands):

	As Previously Reported			Corrections		As Restated
Current assets of discontinued operations	$	2,623		$	136	$	2,759
Total current assets		73,615			136		73,751
Other intangible assets, net		292,846			1,239		294,085
Total assets		1,036,191			1,375		1,037,566
Accumulated deficit		(197,074	)		1,375		(195,699	)
Total equity		267,787			1,375		269,162
Total liabilities and stockholders’ equity		1,036,191			1,375		1,037,566

The following tables summarize the effects of the discontinued operations reclassifications and the corrections on the Company’s condensed consolidated statements of operations for three and six months ended June 30, 2012 (in thousands):

	For the Three Months Ended June 30, 2012
	As Previously Reported			Discontinued Operations Reclassifications			Out of Period Corrections			Intangible  Assets Amortization Corrections			As Restated
Net client service revenues	$	115,567		$	(590	)	$	—		$	—		$	114,977
Operating expenses:
Salaries and benefits		53,971			(320	)		934						54,585
Facilities and other operating costs		34,728			(361	)		(1,115	)					33,252
Provision for doubtful accounts		1,505			(40	)		—			—			1,465
Depreciation and amortization		4,974			(52	)		25			80			5,027
Total operating expenses		95,178			(773	)		(156	)		80			94,329
Operating income		20,389			183			156			(80	)		20,648
Interest expense		(12,553	)		1			—			—			(12,552	)
Other income		251			—			—			—			251
Income from continuing operations before income taxes		8,087			184			156			(80	)		8,347
Income tax expense		3,390			78			65			(33	)		3,500
Income from continuing operations, net of tax		4,697			106			91			(47	)		4,847
Loss from discontinued operations, net of tax		(382	)		(106	)		35						(453	)
Net income		4,315			—			126			(47	)		4,394
Net loss attributable to noncontrolling interest		(934	)		—			934			—			—
Net income attributable to CRC Health Corporation	$	3,381		$	—		$	1,060		$	(47	)	$	4,394

	For the Six Months Ended June 30, 2012
	As Previously Reported			Discontinued Operations Reclassifications			Out of Period Corrections			Intangible  Assets Amortization Corrections			As Restated
Net client service revenues	$	224,471		$	(1,272	)	$	—		$	—		$	223,199
Operating expenses:
Salaries and benefits		108,915			(676	)		934			—			109,173
Facilities and other operating costs		67,250			(706	)		(1,074	)		—			65,470
Provision for doubtful accounts		3,873			(65	)		—			—			3,808
Depreciation and amortization		9,798			(87	)		50			160			9,921
Total operating expenses		189,836			(1,534	)		(90	)		160			188,372
Operating income		34,635			262			90			(160	)		34,827
Interest expense		(24,340	)		2			—			—			(24,338	)
Other income		494			—			—			—			494
Income from continuing operations before income taxes		10,789			264			90			(160	)		10,983
Income tax expense		4,602			112			38			(68	)		4,684
Income from continuing operations, net of tax		6,187			152			52			(92	)		6,299
Loss from discontinued operations, net of tax		(1,129	)		(152	)		35			—			(1,246	)
Net income		5,058			—			87			(92	)		5,053
Net loss attributable to noncontrolling interest		(934	)		—			934			—			—
Net income attributable to CRC Health Corporation	$	4,124		$	—		$	1,021		$	(92	)	$	5,053

The following tables summarize the effects of the corrections on the Company’s condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2012 (in thousands):

	For the Three Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections		Intangible Assets Amortization Corrections			As Restated
Net income	$	4,315		$	126	$	(47	)	$	4,394
Other comprehensive income:		—			—		—			—
Total comprehensive income		4,315			126		(47	)		4,394
Net loss attributable to noncontrolling interest		(934	)		934		—
Net income attributable to CRC Health Corporation	$	3,381		$	1,060	$	(47	)	$	4,394
	For the Six Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections		Intangible Assets Amortization Corrections			As Restated
Net income	$	5,058		$	87	$	(92	)	$	5,053
Other comprehensive income:		—			—		—			—
Total comprehensive income		5,058			87		(92	)		5,053
Net loss attributable to noncontrolling interest		(934	)		934		—			—
Net income attributable to CRC Health Corporation	$	4,124		$	1,021	$	(92	)	$	5,053

The following tables summarize the effects of the corrections on the Company’s condensed consolidated statement of cash flows for six months ended June 30, 2012 (in thousands):

	For the Six Months Ended June 30, 2012
	As Previously Reported			Out of Period Corrections			Intangible Assets Amortization Corrections			As Restated
Cash flows from operating activities:
Net income	$	5,058		$	87		$	(92	)	$	5,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,798			50			160			10,008
Amortization of debt discount and capitalized financing costs		3,014			—			—			3,014
Loss on disposal of property and equipment		843			(425	)		—			418
Provision for doubtful accounts		3,954			—			—			3,954
Stock-based compensation		1,016			—			—			1,016
Deferred income taxes		(797	)		61			(68	)		(804	)
Changes in assets and liabilities:
Restricted cash		(226	)		—			—			(226	)
Accounts receivable		(1,878	)		—			—			(1,878	)
Prepaid expenses		1,118			—			—			1,118
Income taxes receivable and payable		2,705			—			—			2,705
Other current assets		(170	)		—			—			(170	)
Accounts payable		(300	)		—			—			(300	)
Accrued liabilities		2,646			227			—			2,873
Other current liabilities		6,345			—			—			6,345
Other long-term assets		(853	)		—			—			(853	)
Other long-term liabilities		315			—			—			315
Net cash provided by operating activities	$	32,588		$	—		$	—		$	32,588

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 14, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	CRC Health CORP
Entity Central Index Key	0001360474
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,000

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Expense for Interim Periods

The Company calculates its income tax expense for interim periods by applying the full year’s estimated effective tax rate in its financial statements for interim periods (in thousands, except percentages). The three and six months ended June 30, 2012 reflect the effects of the corrections in Note 1.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Income tax expense (benefit) from continuing operations	$	(2,295	)	$	3,500		$	(1,112	)	$	4,684
Effective tax rate		40.8	%		41.9	%		39.1	%		42.6	%

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Condensed Consolidating Financial Information - Condensed Consolidating Statements of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net cash provided by operating activities	$ 25,368	$ 32,588
Cash flows from investing activities:
Additions of property and equipment	(9,432)	(7,341)
Proceeds from the sale of property and equipment	36
Other investing activities		(29)
Acquisition of business, net of cash acquired	(140)
Net cash used in investing activities	(9,536)	(7,370)
Cash flows from financing activities:
Borrowings under long-term debt		84,096
Repayment of long-term debt	(5,019)	(88,099)
Borrowings on revolving line of credit		18,000
Repayments on revolving line of credit	(17,995)	(13,505)
Capital contributed to Parent	(599)	(9,524)
Capitalized financing costs	(217)	(2,772)
Other financing activities	(20)
Net cash used in financing activities	(23,850)	(11,804)
Net increase (decrease) in cash and cash equivalents	(8,018)	13,414
Cash and cash equivalents - beginning of period	19,058	10,183
Cash and cash equivalents - end of period	11,040	23,597
CRC Health Corporation [Member]
Cash flows from operating activities:
Net cash provided by operating activities	5,210	12,498
Cash flows from investing activities:
Additions of property and equipment	(2,450)	(1,917)
Other investing activities		(68)
Acquisition of business, net of cash acquired	(140)
Net cash used in investing activities	(2,590)	(1,985)
Cash flows from financing activities:
Intercompany transfers	21,033	830
Borrowings under long-term debt		84,096
Repayment of long-term debt	(4,822)	(87,638)
Borrowings on revolving line of credit		18,000
Repayments on revolving line of credit	(17,995)	(13,505)
Capital contributed to Parent	(599)	(9,524)
Capitalized financing costs	(217)	(2,772)
Other financing activities	(20)
Net cash used in financing activities	(2,620)	(10,513)
Subsidiary Guarantors [Member]
Cash flows from operating activities:
Net cash provided by operating activities	20,158	20,090
Cash flows from investing activities:
Additions of property and equipment	(6,982)	(5,424)
Proceeds from the sale of property and equipment	36
Other investing activities		39
Net cash used in investing activities	(6,946)	(5,385)
Cash flows from financing activities:
Intercompany transfers	(21,033)	(830)
Repayment of long-term debt	(197)	(461)
Net cash used in financing activities	(21,230)	(1,291)
Net increase (decrease) in cash and cash equivalents	(8,018)	13,414
Cash and cash equivalents - beginning of period	19,058	10,183
Cash and cash equivalents - end of period	$ 11,040	$ 23,597