10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2016

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: 001-35331

ACADIA HEALTHCARE COMPANY, INC.

(Exact name of registrant as specified in its charter)

Delaware	45-2492228
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6100 Tower Circle, Suite 1000

Franklin, Tennessee 37067

(Address, including zip code, of registrant’s principal executive offices)

(615) 861-6000

(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  ☒    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  ☒    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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting company	☐

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

As of November 2, 2016, there were 87,500,681 shares of the registrant’s common stock outstanding.

ACADIA HEALTHCARE COMPANY, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2016 and December 31, 2015	1
	Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2016 and 2015	2
	Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the Three and Nine Months Ended September 30, 2016 and 2015	3
	Condensed Consolidated Statement of Equity (Unaudited) for the Nine Months Ended September 30, 2016	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2016 and 2015	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 6.	Exhibits	46
SIGNATURES

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Acadia Healthcare Company, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30, 2016			December 31, 2015
	(In thousands, except share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	27,751		$	11,215
Accounts receivable, net of allowance for doubtful accounts of $37,725 and $29,332, respectively		277,568			216,626
Other current assets		87,628			66,895
Total current assets		392,947			294,736
Property and equipment, net		2,786,646			1,709,053
Goodwill		2,702,009			2,128,215
Intangible assets, net		84,385			59,575
Deferred tax assets – noncurrent		3,791			49,114
Derivative instruments		49,903			—
Assets held for sale		392,483			—
Other assets		40,814			38,515
Total assets	$	6,452,978		$	4,279,208
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	77,598		$	45,360
Accounts payable		92,819			91,341
Accrued salaries and benefits		105,308			80,696
Other accrued liabilities		104,513			72,806
Total current liabilities		380,238			290,203
Long-term debt		3,583,879			2,195,384
Deferred tax liabilities – noncurrent		81,443			23,936
Other liabilities		147,150			78,602
Total liabilities		4,192,710			2,588,125
Redeemable noncontrolling interests		18,147			8,055
Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued		—			—
Common stock, $0.01 par value; 180,000,000 and 90,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; 86,654,021 and 70,745,746 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively		866			707
Additional paid-in capital		2,488,803			1,572,972
Accumulated other comprehensive loss		(425,869	)		(104,647	)
Retained earnings		178,321			213,996
Total equity		2,242,121			1,683,028
Total liabilities and equity	$	6,452,978		$	4,279,208

See accompanying notes.

1

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
	(In thousands, except per share amounts)
Revenue before provision for doubtful accounts	$	744,802		$	488,746		$	2,139,039		$	1,324,702
Provision for doubtful accounts		(10,137	)		(9,016	)		(31,013	)		(25,529	)
Revenue		734,665			479,730			2,108,026			1,299,173
Salaries, wages and benefits (including equity-based compensation expense of $7,145, $5,327, $20,989 and $14,576, respectively)		408,242			258,410			1,157,557			707,583
Professional fees		47,687			30,759			137,970			83,215
Supplies		30,555			21,634			88,449			58,430
Rents and leases		19,740			8,542			55,013			22,639
Other operating expenses		79,748			57,244			230,950			148,899
Depreciation and amortization		36,418			16,890			101,145			44,920
Interest expense, net		48,843			27,737			135,315			77,932
Debt extinguishment costs		3,411			9,979			3,411			9,979
Loss on divestiture		174,739			—			174,739			—
(Gain) loss on foreign currency derivatives		(15	)		1,018			(523	)		1,926
Transaction-related expenses		1,111			5,842			33,483			31,415
Total expenses		850,479			438,055			2,117,509			1,186,938
(Loss) income from continuing operations before income taxes		(115,814	)		41,675			(9,483	)		112,235
Provision for income taxes		2,396			12,669			27,767			34,794
(Loss) income from continuing operations		(118,210	)		29,006			(37,250	)		77,441
Income from discontinued operations, net of income taxes		—			80			—			83
Net (loss) income		(118,210	)		29,086			(37,250	)		77,524
Net loss attributable to noncontrolling interests		402			464			1,575			464
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(117,808	)	$	29,550		$	(35,675	)	$	77,988
Basic earnings attributable to Acadia Healthcare Company, Inc. stockholders:
(Loss) income from continuing operations	$	(1.36	)	$	0.42		$	(0.42	)	$	1.16
Income from discontinued operations		—			—			—			—
Net (loss) income	$	(1.36	)	$	0.42		$	(0.42	)	$	1.16
Diluted earnings attributable to Acadia Healthcare Company, Inc. stockholders:
(Loss) income from continuing operations	$	(1.36	)	$	0.42		$	(0.42	)	$	1.15
Income from discontinued operations		—			—			—			—
Net (loss) income	$	(1.36	)	$	0.42		$	(0.42	)	$	1.15
Weighted-average shares outstanding:
Basic		86,618			70,664			85,376			67,194
Diluted		86,618			71,110			85,376			67,539

See accompanying notes.

2

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
	(In thousands)
Net (loss) income	$	(118,210	)	$	29,086		$	(37,250	)	$	77,524
Other comprehensive (loss) income:
Foreign currency translation loss		(89,645	)		(32,707	)		(351,528	)		(15,923	)
Gain on derivative instruments, net of tax of $3,613, $0, $20,153 and $0, respectively		6,387			—			30,306			—
Other comprehensive loss		(83,258	)		(32,707	)		(321,222	)		(15,923	)
Comprehensive (loss) income		(201,468	)		(3,621	)		(358,472	)		61,601
Comprehensive loss attributable to noncontrolling interests		402			464			1,575			464
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$	(201,066	)	$	(3,157	)	$	(356,897	)	$	62,065

See accompanying notes.

3

Acadia Healthcare Company, Inc.

Condensed Consolidated Statement of Equity

(Unaudited)

	Common Stock				Additional Paid-in Capital			Other Comprehensive Loss			Retained Earnings			Total
	Shares		Amount
Balance at December 31, 2015		70,746	$	707	$	1,572,972		$	(104,647	)	$	213,996		$	1,683,028
Common stock issued under stock incentive plans		374		4		1,349			—			—			1,353
Common stock withheld for minimum statutory taxes		—		—		(9,270	)		—			—			(9,270	)
Equity-based compensation expense		—		—		20,989			—			—			20,989
Issuance of common stock, net		15,534		155		901,824			—			—			901,979
Other comprehensive loss		—		—		—			(321,222	)		—			(321,222	)
Other		—		—		939			—			—			939
Net loss		—		—		—			—			(35,675	)		(35,675	)
Balance at September 30, 2016		86,654	$	866	$	2,488,803		$	(425,869	)	$	178,321		$	2,242,121

See accompanying notes.

4

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2016			2015
	(In thousands)
Operating activities:
Net (loss) income	$	(37,250	)	$	77,524
Adjustments to reconcile net (loss) income to net cash provided by continuing operating activities:
Depreciation and amortization		101,145			44,920
Amortization of debt issuance costs		7,714			5,017
Equity-based compensation expense		20,989			14,576
Deferred income tax expense		25,857			28,925
Income from discontinued operations, net of taxes		—			(83	)
Debt extinguishment costs		3,411			9,979
Loss on divestiture		174,739			—
(Gain) loss on foreign currency derivatives		(523	)		1,926
Other		731			1,122
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		(12,579	)		(28,905	)
Other current assets		(12,973	)		(12,201	)
Other assets		(1,134	)		(4,879	)
Accounts payable and other accrued liabilities		2,067			(8,316	)
Accrued salaries and benefits		(10,759	)		8,888
Other liabilities		3,746			5,071
Net cash provided by continuing operating activities		265,181			143,564
Net cash used in discontinued operating activities		(5,524	)		(1,479	)
Net cash provided by operating activities		259,657			142,085
Investing activities:
Cash paid for acquisitions, net of cash acquired		(683,285	)		(391,216	)
Cash paid for capital expenditures		(249,961	)		(200,841	)
Cash paid for real estate acquisitions		(37,947	)		(21,976	)
Settlement of foreign currency derivatives		523			(1,926	)
Other		(1,135	)		(887	)
Net cash used in investing activities		(971,805	)		(616,846	)
Financing activities:
Borrowings on long-term debt		1,480,000			1,150,000
Borrowings on revolving credit facility		179,000			310,000
Principal payments on revolving credit facility		(166,000	)		(310,000	)
Principal payments on long-term debt		(46,069	)		(23,813	)
Repayment of assumed debt		(1,348,389	)		(904,467	)
Repayment of senior notes		—			(88,331	)
Payment of debt issuance costs		(35,748	)		(25,584	)
Payment of premium on senior notes		—			(6,890	)
Issuance of common stock, net		685,097			331,360
Common stock withheld for minimum statutory taxes, net		(7,917	)		(7,582	)
Excess tax benefit from equity awards		—			8,020
Other		(1,821	)		(374	)
Net cash provided by financing activities		738,153			432,339
Effect of exchange rate changes on cash		(9,469	)		(856	)
Net increase (decrease) in cash and cash equivalents		16,536			(43,278	)
Cash and cash equivalents at beginning of the period		11,215			94,040
Cash and cash equivalents at end of the period	$	27,751		$	50,762

(continued on next page)

5

	Nine Months Ended September 30,
	2016			2015
	(In thousands)
Effect of acquisitions:
Assets acquired, excluding cash	$	2,505,407		$	1,793,139
Liabilities assumed		(1,605,240	)		(1,012,549	)
Issuance of common stock in connection with acquisition		(216,882	)		(380,210	)
Deposits paid for acquisitions		—			(9,164	)
Cash paid for acquisitions, net of cash acquired	$	683,285		$	391,216

See accompanying notes.

6

Acadia Healthcare Company, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2015

(Unaudited)

1. Description of Business and Basis of Presentation

Description of Business

Acadia Healthcare Company, Inc. (the “Company”) develops and operates inpatient psychiatric facilities, residential treatment centers, group homes, substance abuse facilities and facilities providing outpatient behavioral healthcare services to serve the behavioral health and recovery needs of communities throughout the United States (U.S.), the United Kingdom (U.K.) and Puerto Rico. At September 30, 2016, the Company operated 589 behavioral healthcare facilities with approximately 17,900 beds in 39 states, the U.K. and Puerto Rico.

Basis of Presentation

The business of the Company is conducted through limited liability companies, C-corporations and, for the U.K. facilities, their foreign counterparts. The Company’s consolidated financial statements include the accounts of the Company and all subsidiaries controlled by the Company through its’ direct or indirect ownership of majority interests and exclusive rights granted to the Company as the controlling member of an entity. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of our financial position and results of operations have been included. The Company’s fiscal year ends on December 31 and interim results are not necessarily indicative of results for a full year or any other interim period. The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited financial statements as of that date. The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2016. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Certain reclassifications have been made to prior years to conform to the current year presentation.

2. Earnings Per Share

Basic and diluted earnings per share are calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 260, “Earnings Per Share,” based on the weighted-average number of shares outstanding in each period and dilutive stock options, unvested shares and warrants, to the extent such securities have a dilutive effect on earnings per share.

7

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share amounts):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Numerator:
Basic and diluted earnings per share attributable to Acadia Healthcare Company, Inc.:
(Loss) income from continuing operations	$	(117,808	)	$	29,470	$	(35,675	)	$	77,905
Income from discontinued operations		—			80		—			83
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(117,808	)	$	29,550	$	(35,675	)	$	77,988
Denominator:
Weighted average shares outstanding for basic earnings per share		86,618			70,664		85,376			67,194
Effect of dilutive instruments		—			446		—			345
Shares used in computing diluted earnings per common share		86,618			71,110		85,376			67,539
Basic earnings per share:
(Loss) income from continuing operations	$	(1.36	)	$	0.42	$	(0.42	)	$	1.16
Income from discontinued operations		—			—		—			—
Net (loss) income	$	(1.36	)	$	0.42	$	(0.42	)	$	1.16
Diluted earnings per share:
(Loss) income from continuing operations	$	(1.36	)	$	0.42	$	(0.42	)	$	1.15
Income from discontinued operations		—			—		—			—
Net (loss) income	$	(1.36	)	$	0.42	$	(0.42	)	$	1.15

For the three and nine months ended September 30, 2016, approximately 0.2 million and 0.3 million, respectively, of the outstanding restricted stock and shares of common stock issuable upon exercise of outstanding stock option awards have been excluded from the calculation of diluted earnings per share because the net loss for the three and nine months ended September 30, 2016 causes such securities to be anti-dilutive. Approximately 0.3 million and 0.9 million shares of common stock issuable upon exercise of outstanding stock option awards were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2015, respectively, because their effect would have been anti-dilutive.

3. Acquisitions

2016 U.S. Acquisitions

On June 1, 2016, the Company completed the acquisition of Pocono Mountain Recovery Center (“Pocono Mountain”), an inpatient psychiatric facility with 108 beds located in Henryville, Pennsylvania, for total consideration of approximately $25.2 million. The Company may make a cash payment of up to $5.0 million under an earn-out agreement, contingent upon achievement by Pocono Mountain of certain operating performance targets for the one-year period ending May 31, 2017.

On May 1, 2016, the Company completed the acquisition of TrustPoint Hospital (“TrustPoint”), an inpatient psychiatric facility with 100 beds located in Murfreesboro, Tennessee, for cash consideration of approximately $62.7 million.

On April 1, 2016, the Company completed the acquisition of Serenity Knolls (“Serenity Knolls”), an inpatient psychiatric facility with 30 beds located in Forrest Knolls, California, for cash consideration of approximately $9.7 million.

Priory

On February 16, 2016, the Company completed the acquisition of Priory Group No. 1 Limited (“Priory”) for a total purchase price of approximately $2.2 billion, including total cash consideration of approximately $1.9 billion and the issuance of 4,033,561 shares of its common stock. Priory is the leading independent provider of behavioral healthcare services in the U.K. At February 16, 2016, Priory operated 324 facilities with approximately 7,100 beds.

8

Planned U.K. Divestiture

The Competition and Markets Authority (the “CMA”) in the U.K. has been reviewing the Company’s acquisition of Priory. On July 14, 2016, the CMA announced that the Company’s acquisition of Priory will be referred for a phase 2 investigation unless the Company offered acceptable undertakings to address the CMA’s competition concerns relating to the provision of behavioral healthcare services in certain markets. On July 28, 2016, the CMA announced that the Company had offered undertakings to address the CMA’s concerns and that, in lieu of a phase 2 investigation, the CMA would consider the Company’s undertakings.

On October 18, 2016, the Company signed a definitive agreement with BC Partners (“BC Partners”) for the sale of 21 existing U.K. behavioral health facilities and one de novo behavioral health facility with an aggregate of approximately 1,000 beds (collectively, the “U.K. Disposal Group”). The Company’s management believes that the planned divestiture addresses the CMA’s competition concerns. The Company expects the sale to be approved by the CMA on or before November 18, 2016 and expects to complete the sale shortly thereafter. If the sale is approved by the CMA and completed, the Company will receive £320 million cash for the sale. If the sale is not approved by the CMA, the Company expects that the CMA will proceed with a phase 2 investigation.

In conjunction with the planned divestiture, the Company recorded $389.7 million as assets held for sale on the condensed consolidated balance sheet at September 30, 2016 and a loss on divestiture of $174.7 million in the condensed consolidated statements of operations for the three and nine months ended September 30, 2016. The loss on divestiture consisted of an allocation of goodwill to the U.K. Disposal Group of $106.9 million, estimated transaction-related expenses of $25.6 million and loss on the sale of properties of $42.2 million. The Company is required to measure assets held for sale at the lower of its carrying value or fair value less cost to sell. The allocation of goodwill was based on the fair value of the U.K. Disposal Group relative to the total fair value of the Company’s U.K. Facilities segment.

The condensed consolidated statements of operations for the three and nine months ended September 30, 2016 include revenue of $45.6 million and $125.1 million, respectively, and income from continuing operations before income taxes of $3.2 million and $12.2 million, respectively, related to the U.K. Disposal Group excluding the loss on divestiture. The condensed consolidated statements of operations for the three and nine months ended September 30, 2015 include revenue of $16.6 million and $42.1 million, respectively, and income from continuing operations before income taxes of $4.6 million and $12.4 million, respectively, related to the U.K. Disposal Group.

2015 U.S. Acquisitions

On December 1, 2015, the Company completed the acquisition of certain facilities from MMO Behavioral Health Systems (“MMO”), including two acute inpatient behavioral health facilities with a total of 80 beds located in Jennings and Covington, Louisiana, for cash consideration of approximately $20.2 million.

On November 1, 2015, the Company completed the acquisitions of (i) Discovery House-Group Inc. (“Discovery House”) for cash consideration of approximately $118.3 million and (ii) Duffy’s Napa Valley Rehab (“Duffy’s”) for cash consideration of approximately $29.6 million. Discovery House operates 19 comprehensive treatment centers located in four states. Duffy’s is a substance abuse facility with 61 beds located in Calistoga, California.

On August 31, 2015, the Company completed the acquisition of a controlling interest in Southcoast Behavioral (“Southcoast”), an inpatient psychiatric facility located in Fairhaven, Massachusetts. The Company owns 75% of the equity interests in the facility. The value of the 25% noncontrolling interest approximates $9.2 million.

On July 1, 2015, the Company completed the acquisition of the assets of Belmont Behavioral Health (“Belmont”), an inpatient psychiatric facility with 147 beds located in Philadelphia, Pennsylvania for cash consideration of approximately $39.0 million which consists of $35.0 million base purchase price and a working capital settlement of $4.0 million.

On March 1, 2015, the Company acquired the stock of Quality Addiction Management, Inc. (“QAM”) for cash consideration of approximately $54.8 million. QAM operates seven comprehensive treatment centers located in Wisconsin.

On February 11, 2015, the Company completed its acquisition of CRC Health Group, Inc. (“CRC”) for total consideration of approximately $1.3 billion. As consideration for the acquisition, the Company issued 5,975,326 shares of its common stock to certain holders of CRC common stock and repaid CRC’s outstanding indebtedness of $904.5 million. CRC is a leading provider of treatment services related to substance abuse and other addiction and behavioral disorders. At the acquisition date, CRC operated 35 inpatient facilities with over 2,400 beds and 81 comprehensive treatment centers located in 30 states.

9

2015 U.K. Acquisitions

On November 1, 2015, the Company completed the acquisition of Cleveland House (“Cleveland House”), an inpatient psychiatric facility with 32 beds located in England, for cash consideration of approximately $10.3 million.

On October 1, 2015, the Company completed the acquisition of Meadow View (“Meadow View”), an inpatient psychiatric facility with 28 beds located in England, for cash consideration of approximately $6.8 million.

On September 1, 2015, the Company completed the acquisitions of (i) three facilities from The Danshell Group (“Danshell”) for approximately $59.8 million, (ii) two facilities from Health and Social Care Partnerships (“H&SCP”) for approximately $26.2 million and (iii) Manor Hall (“Manor Hall”) for approximately $14.0 million. The inpatient psychiatric facilities acquired from Danshell have an aggregate of 73 beds and are located in England. The inpatient psychiatric facilities acquired from H&SCP have an aggregate of 50 beds and are located in England. Manor Hall has 26 beds and is located in England.

On July 1, 2015, the Company completed the acquisition of The Manor Clinic (“Manor Clinic”), a substance abuse facility with 15 beds located in England, for cash consideration of approximately $5.9 million.

On June 1, 2015, the Company completed the acquisitions of (i) one facility from Choice Lifestyles (“Choice”) for cash consideration of approximately $25.9 million and (ii) 15 facilities from Care UK Limited (“Care UK”) for approximately $88.2 million. The inpatient psychiatric facility acquired from Choice has 42 beds and is located in England. The inpatient psychiatric facilities acquired from Care UK have an aggregate of 299 beds and are located in England.

On April 1, 2015, the Company completed the acquisitions of (i) two facilities from Choice for cash consideration of approximately $37.5 million, (ii) Pastoral Care Group (“Pastoral”) for approximately $34.2 million and (iii) Mildmay Oaks f/k/a Vista Independent Hospital (“Mildmay Oaks”) for cash consideration of approximately $14.9 million. The two inpatient psychiatric facilities acquired from Choice have an aggregate of 48 beds and are located in England. Pastoral operates two inpatient psychiatric facilities with an aggregate of 65 beds located in Wales. Mildmay Oaks is an inpatient psychiatric facility with 67 beds located in England.

Summary of Acquisitions

The Company selectively seeks opportunities to expand and diversify its base of operations by acquiring additional facilities. Approximately $374.4 million of the goodwill associated with domestic acquisitions completed in 2016 and 2015 is deductible for federal income tax purposes. The fair values assigned to certain assets and liabilities assumed by the Company have been estimated on a preliminary basis and are subject to change as new facts and circumstances emerge that were present at the date of acquisition. Specifically, the Company is further assessing the valuation of certain real property and intangible assets and certain tax matters as well as certain receivables and assumed liabilities of Pocono Mountain, TrustPoint, Serenity Knolls, Priory, MMO, Discovery House, Duffy’s, Cleveland House and Meadow View.

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The preliminary fair values of assets acquired and liabilities assumed, at the corresponding acquisition dates, during the nine months ended September 30, 2016 in connection with the 2016 acquisitions were as follows (in thousands):

	Priory		Other		Total
Cash	$	10,253	$	2,488	$	12,741
Accounts receivable		57,832		4,289		62,121
Prepaid expenses and other current assets		7,921		143		8,064
Property and equipment(1)		1,603,306		35,400		1,638,706
Goodwill(1)		669,965		95,206		765,171
Intangible assets		23,200		338		23,538
Other assets		7,760		47		7,807
Total assets acquired		2,380,237		137,911		2,518,148
Accounts payable		24,203		805		25,008
Accrued salaries and benefits		39,588		797		40,385
Other accrued expenses		48,066		390		48,456
Deferred tax liabilities – noncurrent		67,598		—		67,598
Long-term debt		1,348,389		—		1,348,389
Other liabilities		45,162		30,242		75,404
Total liabilities assumed		1,573,006		32,234		1,605,240
Net assets acquired	$	807,231	$	105,677	$	912,908

⁽¹⁾  Priory fair values of property and equipment and goodwill do not reflect adjustments for the planned divestiture of the U.K. Disposal Group as the divestiture was not anticipated at the acquisition date.

The preliminary fair values of assets acquired and liabilities assumed, at the corresponding acquisition dates, during the year ended December 31, 2015 in connection with the 2015 acquisitions were as follows (in thousands):

	CRC		Other		Total
Cash	$	19,599	$	5,334	$	24,933
Accounts receivable		47,035		21,264		68,299
Prepaid expenses and other current assets		26,945		2,555		29,500
Property and equipment		136,163		273,143		409,306
Goodwill		1,043,601		320,464		1,364,065
Intangible assets		37,000		204		37,204
Deferred tax assets-noncurrent		74,383		—		74,383
Other assets		6,478		51		6,529
Total assets acquired		1,391,204		623,015		2,014,219
Accounts payable		4,741		4,961		9,702
Accrued salaries and benefits		14,827		3,200		18,027
Other accrued expenses		38,873		5,047		43,920
Deferred tax liabilities – noncurrent		—		13,541		13,541
Debt		904,467		—		904,467
Other liabilities		34,720		10		34,730
Total liabilities assumed		997,628		26,759		1,024,387
Redeemable noncontrolling interests		—		9,132		9,132
Net assets acquired	$	393,576	$	587,124	$	980,700

Other

The qualitative factors comprising the goodwill acquired in the CRC, QAM, Choice, Pastoral, Mildmay Oaks, Care UK, The Manor Clinic, Belmont, Southcoast, Danshell, H&SCP, Manor Hall, Meadow View, Cleveland House, Duffy’s, Discovery House, MMO, Priory, Serenity Knolls, TrustPoint and Pocono Mountain acquisitions (collectively the “2015 and 2016 Acquisitions”) include efficiencies derived through synergies expected by the elimination of certain redundant corporate functions and expenses, the ability to leverage call center referrals to a broader provider base, coordination of services provided across the combined network of facilities, achievement of operating efficiencies by benchmarking performance, and applying best practices throughout the combined companies.

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Transaction-related expenses comprised the following costs for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Legal, accounting and other costs	$	1,111	$	5,261	$	17,212	$	14,315
Advisory and financing commitment fees		—		—		14,850		10,337
Severance and contract termination costs		—		581		1,421		6,763
	$	1,111	$	5,842	$	33,483	$	31,415

Pro Forma Information

The condensed consolidated statements of operations for the three and nine months ended September 30, 2016 include revenue of $412.9 million and $1.1 billion, respectively, and loss from continuing operations before income taxes of $114.3 million and $68.5 million, respectively, related to the 2015 and 2016 Acquisitions. The condensed consolidated statements of operations for the three and nine months ended September 30, 2015 include revenue of $165.8 million and $375.6 million, respectively, and income from continuing operations before income taxes of $38.7 million and $156.6 million, respectively, related to acquisitions completed in 2015.

The following table provides certain pro forma financial information for the Company as if the 2015 and 2016 Acquisitions occurred as of January 1, 2015 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Revenue	$	734,665		$	737,263	$	2,232,285		$	2,185,600
(Loss) income from continuing operations, before income taxes	$	(115,814	)	$	39,130	$	(27,529	)	$	110,559

4. Other Intangible Assets

Other identifiable intangible assets and related accumulated amortization consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	Gross Carrying Amount				Accumulated Amortization
	September 30, 2016		December 31, 2015		September 30, 2016			December 31, 2015
Intangible assets subject to amortization:
Contract intangible assets	$	2,100	$	2,100	$	(2,065	)	$	(1,750	)
Non-compete agreements		1,247		1,247		(1,247	)		(1,247	)
		3,347		3,347		(3,312	)		(2,997	)
Intangible assets not subject to amortization:
Licenses and accreditations		12,382		11,479		—			—
Trade names		58,551		37,800		—			—
Certificates of need		13,417		9,946		—			—
		84,350		59,225		—			—
Total	$	87,697	$	62,572	$	(3,312	)	$	(2,997	)

Amortization expense related to definite-lived intangible assets was $0.1 million for both the three months ended September 30, 2016 and 2015, respectively, and $0.3 million and $0.4 million for the nine months ended September 30, 2016 and 2015, respectively.

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Estimated amortization expense for the years ending December 31, 2016, 2017, 2018, 2019 and 2020 is $0.4 million, $0, $0, $0 and $0, respectively. The Company’s licenses and accreditations, trade names and certificate of need intangible assets have indefinite lives and are, therefore, not subject to amortization.

5. Property and Equipment

Property and equipment consists of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016			December 31, 2015
Land	$	430,179		$	214,138
Building and improvements		2,081,246			1,277,800
Equipment		320,234			141,543
Construction in progress		146,070			195,042
		2,977,729			1,828,523
Less accumulated depreciation		(191,083	)		(119,470	)
Property and equipment, net	$	2,786,646		$	1,709,053

6. Long-Term Debt

Long-term debt consisted of the following (in thousands):

	September 30, 2016			December 31, 2015
Amended and Restated Senior Credit Facility:
Senior Secured Term A Loans	$	600,594		$	500,750
Senior Secured Term B Loans		1,439,088			495,000
Senior Secured Revolving Line of Credit		171,000			158,000
6.125% Senior Notes due 2021		150,000			150,000
5.125% Senior Notes due 2022		300,000			300,000
5.625% Senior Notes due 2023		650,000			650,000
6.500% Senior Notes due 2024		390,000			—
9.0% and 9.5% Revenue Bonds		22,410			22,410
Less: unamortized debt issuance costs, discount and premium		(61,615	)		(35,416	)
		3,661,477			2,240,744
Less: current portion		(77,598	)		(45,360	)
Long-term debt	$	3,583,879		$	2,195,384

Amended and Restated Senior Credit Facility

The Company entered into a senior secured credit facility (the “Senior Secured Credit Facility”) on April 1, 2011. On December 31, 2012, the Company entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended and restated the Senior Secured Credit Facility (the “Amended and Restated Senior Credit Facility”). The Company has amended the Amended and Restated Credit Agreement from time to time as described in the Company’s prior filings with the Securities and Exchange Commission.

On February 6, 2015, the Company entered into a Seventh Amendment (the “Seventh Amendment”) to the Amended and Restated Credit Agreement. The Seventh Amendment added Citibank, N.A. as an “L/C Issuer” under the Amended and Restated Credit Agreement in order to permit the rollover of CRC’s existing letters of credit into the Amended and Restated Credit Agreement and increased both the Company’s Letter of Credit Sublimit and Swing Line Sublimit to $20.0 million.

On February 11, 2015, the Company entered into a First Incremental Facility Amendment (the “First Incremental Amendment”) to the Amended and Restated Credit Agreement. The First Incremental Amendment activated a new $500.0 million incremental Term Loan B facility (the “Existing TLB Facility”) that was added to the Amended and Restated Senior Credit Facility, subject to limited conditionality provisions. Borrowings under the Existing TLB Facility were used to fund a portion of the purchase price for the acquisition of CRC.

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On April 22, 2015, the Company entered into an Eighth Amendment (the “Eighth Amendment”) to the Amended and Restated Credit Agreement. The Eighth Amendment changed the definition of “Change of Control” in part to remove a provision whose purpose was, when calculating whether a majority of incumbent directors have approved new directors, that any incumbent director that became a director as a result of a threatened or actual proxy contest was not counted in such calculation.

On January 25, 2016, the Company entered into the Ninth Amendment (the “Ninth Amendment”) to the Amended and Restated Credit Agreement. The Ninth Amendment modifies certain definitions and provides increased flexibility to the Company in terms of its financial covenants. The Company’s baskets for permitted investments were also increased to provide increased flexibility for it to invest in non-wholly owned subsidiaries, joint ventures and foreign subsidiaries. The Company may now invest in non-wholly owned subsidiaries and joint ventures up to 10.0% of the Company and its subsidiaries’ total assets in any four consecutive fiscal quarter period, and up to 12.5% of the Company and its subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. The Company may also invest in foreign subsidiaries that are not loan parties up to 10% of the Company and its subsidiaries’ total assets in any consecutive four fiscal quarter period, and up to 15% of the Company and its subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. The foregoing permitted investments are subject to an aggregate cap of 25% of the Company and its subsidiaries’ total assets in any fiscal year.

On February 16, 2016, the Company entered into a Second Incremental Facility Amendment (the “Second Incremental Amendment”) to the Amended and Restated Credit Agreement. The Second Incremental Amendment activated a new $955.0 million incremental Term Loan B facility (the “New TLB Facility”) and added $135.0 million to the Term Loan A facility (the “TLA Facility”) to the Amended and Restated Senior Credit Facility, subject to limited conditionality provisions. Borrowings under the New TLB Facility were used to fund a portion of the purchase price for the acquisition of Priory and the fees and expenses for such acquisition and the related financing transactions. Borrowings under the TLA Facility were used to pay down the majority of our $300.0 million revolving credit facility.

On May 26, 2016, the Company entered into a Tranche B-1 Repricing Amendment (the “Tranche B-1 Repricing Amendment”) to the Amended and Restated Credit Agreement. The Tranche B-1 Repricing Amendment reduces the Applicable Rate with respect to the Existing TLB Facility from 3.5% to 3.0% in the case of Eurodollar Rate loans and 2.5% to 2.0% in the case of Base Rate Loans.

On September 21, 2016, the Company entered into a Tranche B-2 Repricing Amendment (the “Tranche B-2 Repricing Amendment”) to the Amended and Restated Credit Agreement. The Tranche B-2 Repricing Amendment reduces the Applicable Rate with respect to the New TLB Facility from 3.75% to 3.0% in the case of Eurodollar Rate loans and 2.75% to 2.0% in the case of Base Rate Loans. In connection with the Tranche B-2 Repricing Amendment, the Company recorded a debt extinguishment charge of $3.4 million, including the discount and write-off of deferred financing costs, which was recorded in debt extinguishment costs in the condensed consolidated statements of income.

The Company had $120.6 million of availability under the revolving line of credit as of September 30, 2016. Borrowings under the revolving line of credit are subject to customary conditions precedent to borrowing. The Amended and Restated Credit Agreement requires quarterly term loan principal repayments of our TLA Facility of $12.6 million for September 30, 2016 to December 31, 2016, $16.8 million for March 31, 2017 to December 31, 2017, and $20.9 million for March 31, 2018 to December 31, 2018, with the remaining principal balance of the TLA Facility due on the maturity date of February 13, 2019. The Company is required to repay the Existing TLB Facility in equal quarterly installments of $1.3 million on the last business day of each March, June, September and December, with the outstanding principal balance of the Existing TLB Facility due on February 11, 2022. The Company is required to repay the New TLB Facility in equal quarterly installments of approximately $2.4 million on the last business day of each March, June, September and December, with the outstanding principal balance of the TLB Facility due on February 16, 2023.

Borrowings under the Amended and Restated Senior Credit Facility are guaranteed by each of the Company’s wholly-owned domestic subsidiaries (other than certain excluded subsidiaries) and are secured by a lien on substantially all of the assets of the Company and such subsidiaries. Borrowings with respect to the TLA Facility and the Company’s revolving credit facility (collectively, “Pro Rata Facilities”) under the Amended and Restated Credit Agreement bear interest at a rate tied to Acadia’s Consolidated Leverage Ratio (defined as consolidated funded debt net of up to $40.0 million of unrestricted and unencumbered cash to consolidated EBITDA, in each case as defined in the Amended and Restated Credit Agreement). The Applicable Rate (as defined in the Amended and Restated Credit Agreement) for the Pro Rata Facilities was 3.25% for Eurodollar Rate Loans (as defined in the Amended and Restated Credit Agreement) and 2.25% for Base Rate Loans (as defined in the Amended and Restated Credit Agreement) at September 30, 2016. Eurodollar Rate Loans with respect to the Pro Rata Facilities bear interest at the Applicable Rate plus the Eurodollar Rate (as defined in the Amended and Restated Credit Agreement) (based upon the LIBOR Rate (as defined in the Amended and Restated Credit Agreement) prior to commencement of the interest rate period). Base Rate Loans with respect to the Pro Rata Facilities bear interest at the Applicable Rate plus the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate and (iii) the Eurodollar Rate plus 1.0%. As of September 30, 2016, the Pro Rata Facilities bore interest at a rate of LIBOR plus 3.25%. In addition, the Company is required to pay a commitment fee on undrawn amounts under the revolving line of credit.

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The Amended and Restated Credit Agreement requires the Company and its subsidiaries to comply with customary affirmative, negative and financial covenants, including a fixed charge coverage ratio, consolidated leverage ratio and senior secured leverage ratio. The Company may be required to pay all of its indebtedness immediately if it defaults on any of the numerous financial or other restrictive covenants contained in any of its material debt agreements. As of September 30, 2016, the Company was in compliance with such covenants.

Senior Notes

6.125% Senior Notes due 2021

On March 12, 2013, the Company issued $150.0 million of 6.125% Senior Notes due 2021 (the “6.125% Senior Notes”). The 6.125% Senior Notes mature on March 15, 2021 and bear interest at a rate of 6.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year.

5.125% Senior Notes due 2022

On July 1, 2014, the Company issued $300.0 million of 5.125% Senior Notes due 2022 (the “5.125% Senior Notes”). The 5.125% Senior Notes mature on July 1, 2022 and bear interest at a rate of 5.125% per annum, payable semi-annually in arrears on January 1 and July 1 of each year.

5.625% Senior Notes due 2023

On February 11, 2015, the Company issued $375.0 million of 5.625% Senior Notes due 2023 (the “5.625% Senior Notes”). The 5.625% Senior Notes mature on February 15, 2023 and bear interest at a rate of 5.625% per annum, payable semi-annually in arrears on February 15 and August 15 of each year.

On September 21, 2015, the Company issued $275.0 million of additional 5.625% Senior Notes. The additional notes form a single class of debt securities with the existing 5.625% Senior Notes. Giving effect to this issuance, the Company has outstanding an aggregate of $650.0 million of 5.625% Senior Notes.

6.500% Senior Notes due 2024

On February 16, 2016, the Company issued $390.0 million of 6.500% Senior Notes due 2024 (the “6.500% Senior Notes”). The 6.500% Senior Notes mature on March 1, 2024 and bear interest at a rate of 6.500% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2016.

The indentures governing the 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes and 6.500% Senior Notes (together, the “Senior Notes”) contain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) engage in certain transactions with affiliates; (v) create restrictions on dividends or other payments by the restricted subsidiaries; (vi) merge, consolidate or sell substantially all of the Company’s assets; and (vii) create liens on assets.

The Senior Notes issued by the Company are guaranteed by each of the Company’s subsidiaries that guarantee the Company’s obligations under the Amended and Restated Senior Credit Facility. The guarantees are full and unconditional and joint and several.

The Company may redeem the Senior Notes at its option, in whole or part, at the dates and amounts set forth in the indentures.

9.0% and 9.5% Revenue Bonds

On November 11, 2012, in connection with the acquisition of Park Royal, the Company assumed debt of $23.0 million. The fair market value of the debt assumed was $25.6 million and resulted in a debt premium balance being recorded as of the acquisition date. The debt consisted of $7.5 million and $15.5 million of Lee County (Florida) Industrial Development Authority Healthcare Facilities Revenue Bonds, Series 2010 with stated interest rates of 9.0% and 9.5% (“9.0% and 9.5% Revenue Bonds”), respectively. The 9.0% bonds in the amount of $7.5 million have a maturity date of December 1, 2030 and require yearly principal payments beginning in 2013. The 9.5% bonds in the amount of $15.5 million have a maturity date of December 1, 2040 and require yearly principal payments beginning in 2031. The principal payments establish a bond sinking fund to be held with the trustee and shall be sufficient to redeem the principal amounts of the 9.0% and 9.5% Revenue Bonds on their respective maturity dates. As of September 30, 2016 and December 31, 2015, $2.3 million was recorded within other assets on the condensed consolidated balance sheets related to the debt service reserve fund requirements. The yearly principal payments, which establish a bond sinking fund, will increase the debt service reserve fund requirements. The bond premium amount of $2.6 million is amortized as a reduction of interest expense over the life of the revenue bonds using the effective interest method.

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7. Equity Offerings

Common Stock

On March 3, 2016, the Company held a Special Meeting of Stockholders, where the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 90,000,000 to 180,000,000 (the “Amendment”). On March 3, 2016, the Company filed the Amendment with the Secretary of State of the State of Delaware.

Equity Offerings

On February 11, 2015, the Company completed its acquisition of CRC for total consideration of approximately $1.3 billion. As consideration for the acquisition, the Company issued 5,975,326 shares of its common stock to certain holders of CRC common stock and repaid CRC’s outstanding indebtedness.

On May 11, 2015, the Company completed the offering of 5,175,000 shares of common stock (including shares sold pursuant to the exercise of the over-allotment option that the Company granted to the underwriters as part of the offering) at a price of $66.50 per share. The net proceeds to the Company from the sale of the shares, after deducting the underwriting discount of $12.0 million and additional offering-related costs of $0.8 million, were $331.3 million. The Company used the net offering proceeds to repay outstanding indebtedness and fund acquisitions.

On January 12, 2016, the Company completed the offering of 11,500,000 shares of common stock (including shares sold pursuant to the exercise of the over-allotment option that the Company granted to the underwriters as part of the offering) at a price of $61.00 per share. The net proceeds to the Company from the sale of the shares, after deducting the underwriting discount of $15.8 million and additional offering-related costs of $0.7 million, were $685.0 million. The Company used the net offering proceeds to fund a portion of the purchase price for the acquisition of Priory.

On February 16, 2016, the Company completed its acquisition of Priory, which included the issuance of 4,033,561 shares of common stock to the former stockholders of Priory.

8. Equity-Based Compensation

Equity Incentive Plans

The Company issues stock-based awards, including stock options, restricted stock and restricted stock units, to certain officers, employees and non-employee directors under the Acadia Healthcare Company, Inc. Incentive Compensation Plan (the “Equity Incentive Plan”). As of September 30, 2016, a maximum of 8,200,000 shares of the Company’s common stock were authorized for issuance as stock options, restricted stock and restricted stock units or other share-based compensation under the Equity Incentive Plan, of which 4,662,863 shares were available for future grant. Stock options may be granted for terms of up to ten years. The Company recognizes expense on all share-based awards on a straight-line basis over the requisite service period of the entire award. Grants to employees generally vest in annual increments of 25% each year, commencing one year after the date of grant. The exercise prices of stock options are equal to the most recent closing price of the Company’s common stock on the date of grant.

The Company recognized $7.1 million and $5.3 million in equity-based compensation expense for the three months ended September 30, 2016 and 2015, respectively, and $21.0 million and $14.6 million for the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016, there was $59.4 million of unrecognized compensation expense related to unvested options, restricted stock and restricted stock units, which is expected to be recognized over the remaining weighted average vesting period of 1.4 years. As of September 30, 2016, there were no warrants outstanding. The Company recognized a deferred income tax benefit of $2.9 million and $2.2 million for the three months ended September 30, 2016 and 2015, respectively, related to equity-based compensation expense. The Company recognized a deferred income tax benefit of $8.3 million and $6.0 million for the nine months ended September 30, 2016 and 2015, respectively, related to equity-based compensation expense. The actual tax benefit realized from stock options exercised during the three and nine months ended September 30, 2015 was $1.7 million and $8.0 million, respectively.

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Stock option activity during 2015 and 2016 was as follows (aggregate intrinsic value in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2015		737,422		$	32.19		8.09	$	14,512
Options granted		204,700			63.07		9.21		1,724
Options exercised		(214,079	)		42.75		N/A		9,890
Options cancelled		(33,300	)		46.53		N/A		N/A
Options outstanding at December 31, 2015		694,743			42.87		7.70		20,717
Options granted		456,850			59.26		9.48		—
Options exercised		(55,808	)		32.40		N/A		1,541
Options cancelled		(79,200	)		56.61		N/A		N/A
Options outstanding at September 30, 2016		1,016,585		$	50.07		8.04	$	9,744
Options exercisable at December 31, 2015		106,330		$	36.41		5.83	$	4,968
Options exercisable at September 30, 2016		290,884		$	41.80		6.31	$	7,114

Restricted stock activity during 2015 and 2016 was as follows:

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2015		722,028		$	39.77
Granted		503,052			62.67
Cancelled		(44,900	)		49.55
Vested		(235,618	)		34.93
Unvested at December 31, 2015		944,562		$	52.74
Granted		299,047			58.99
Cancelled		(87,803	)		57.14
Vested		(308,094	)		46.88
Unvested at September 30, 2016		847,712		$	56.64

Restricted stock unit activity during 2015 and 2016 was as follows:

	Number of Units			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2015		125,113		$	38.73
Granted		217,994			61.77
Cancelled		—			—
Vested		(125,023	)		32.38
Unvested at December 31, 2015		218,084		$	56.97
Granted		230,750			56.95
Cancelled		—			—
Vested		(175,235	)		52.71
Unvested at September 30, 2016		273,599		$	59.68

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The grant-date fair value of the Company’s stock options is estimated using the Black-Scholes option pricing model. The following table summarizes the grant-date fair value of options and the assumptions used to develop the fair value estimates for options granted during the nine months ended September 30, 2016 and year ended December 31, 2015:

	September 30, 2016			December 31, 2015
Weighted average grant-date fair value of options	$	19.35		$	21.78
Risk-free interest rate		1.3	%		1.5	%
Expected volatility		33	%		35	%
Expected life (in years)		5.5			5.5

The Company’s estimate of expected volatility for stock options is based upon the volatility of guideline companies given the lack of sufficient historical trading experience of the Company’s common stock. The risk-free interest rate is the approximate yield on United States Treasury Strips having a life equal to the expected option life on the date of grant. The expected life is an estimate of the number of years an option will be held before it is exercised.

9. Income Taxes

The provision for income taxes for continuing operations for the three months ended September 30, 2016 and 2015 reflects effective tax rates of (2.1)% and 30.4%, respectively. The provision for income taxes for continuing operations for the nine months ended September 30, 2016 and 2015 reflects effective tax rates of (292.8)% and 31.0%, respectively. The change in the tax rate for the three and nine months ended September 30, 2016 is primarily attributable to the loss on divestiture related to our planned divestiture in the U.K.

10. Derivative Instruments

The Company entered into foreign currency forward contracts during the three and nine months ended September 30, 2016 and 2015 in connection with (i) acquisitions in the U.K. and (ii) transfers of cash between the U.S. and U.K. under the Company’s cash management and foreign currency risk management programs. Foreign currency forward contracts limit the economic risk of changes in the exchange rate between US Dollars (“USD”) and British Pounds (“GBP”) associated with cash transfers. These foreign currency forward contracts did not meet the hedge accounting criteria under Accounting Standards Codification 815, Derivatives and Hedging. As such, changes in fair value resulted in gains of $15 thousand and $0.5 million for the three and nine months ended September 30, 2016, respectively, and losses of $1.0 million and $1.9 million for the three and nine months ended September 30, 2015, respectively, which have been recorded in the consolidated statements of income.

In May 2016, the Company entered into multiple cross currency swap agreements with an aggregate notional amount of $650.0 million to manage foreign currency risk by effectively converting a portion of its fixed-rate USD-denominated senior notes, including the semi-annual interest payments thereunder, to fixed-rate GBP-denominated debt of £449.3 million. The senior notes effectively converted include $150.0 million aggregate principal amount of 6.125% Senior Notes, $300.0 million aggregate principal amount of 5.125% Senior Notes and $200.0 million aggregate principal amount of 5.625% Senior Notes. During the term of the swap agreements, the Company will receive semi-annual interest payments in USD from the counterparties at fixed interest rates, and the Company will make semi-annual interest payments in GBP to the counterparties at fixed interest rates. The interest payments under the cross-currency swap agreements result in £24.7 million of annual cash flows, from the Company’s U.K. business being converted to $35.8 million (at a 1.45 exchange rate). The interest rates applicable to the GBP interest payments are substantially the same as the interest rates in place for the existing USD-denominated debt. At maturity, the Company will repay the principal amounts listed above in GBP and receive the principal amount in USD.

The Company has designated the cross currency swap agreements as qualifying hedging instruments and is accounting for these as net investment hedges. The fair value of the cross currency swap agreements of $49.9 million is recorded as an asset within derivative instruments on the condensed consolidated balance sheets. The gains and losses resulting from fair value adjustments to the cross currency swap agreements are recorded in accumulated other comprehensive income as the swaps are effective in hedging the designated risk. Cash flows related to the cross currency swaps are included in operating activities in the condensed consolidated statements of cash flows.

11. Fair Value Measurements

The carrying amounts reported for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value because of the short-term maturity of these instruments.

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The carrying amounts and fair values of the Company’s Amended and Restated Senior Credit Facility, 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes, 6.500% Senior Notes, 9.0% and 9.5% Revenue Bonds, derivative instruments and contingent consideration liabilities as of September 30, 2016 and December 31, 2015 were as follows (in thousands):

	Carrying Amount				Fair Value
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Amended and Restated Senior Credit Facility	$	2,174,174	$	1,135,861	$	2,174,174	$	1,135,861
6.125% Senior Notes due 2021	$	147,448	$	147,082	$	152,240	$	149,288
5.125% Senior Notes due 2022	$	295,266	$	294,749	$	292,313	$	275,590
5.625% Senior Notes due 2023	$	640,257	$	639,431	$	649,861	$	604,262
6.500% Senior Notes due 2024	$	381,032	$	—	$	399,131	$	—
9.0% and 9.5% Revenue Bonds	$	23,300	$	23,621	$	23,300	$	23,621
Derivative instruments	$	49,903	$	—	$	49,903	$	—
Contingent consideration liabilities	$	667	$	667	$	667	$	667

The Company’s Amended and Restated Senior Credit Facility, 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes, 6.500% Senior Notes and 9.0% and 9.5% Revenue Bonds were categorized as Level 2 in the GAAP fair value hierarchy. Fair values were based on trading activity among the Company’s lenders and the average bid and ask price as determined using published rates.

The fair values of the derivative instruments were categorized as Level 2 in the GAAP fair value hierarchy and were based on observable market inputs including applicable exchange rates and interest rates.

The fair value of the contingent consideration liabilities were categorized as Level 3 in the GAAP fair value hierarchy. The contingent consideration liabilities were valued using a probability-weighted discounted cash flow method. This analysis reflected the contractual terms of the purchase agreements and utilized assumptions with regard to future earnings, probabilities of achieving such future earnings and a discount rate.

12. Commitments and Contingencies

Professional and General Liability

Effective September 1, 2016, a portion of the Company’s professional liability risks is insured through a 100% owned insurance subsidiary. Subject to a $2.0 million per occurrence self-insured retention, the Company’s 100% owned insurance subsidiary insures the Company for professional liability losses up to $50.0 million in the aggregate. The insurance subsidiary has obtained reinsurance with unrelated commercial insurers for professional liability risks generally above a retention level of $2.0 million and up to $50.0 million in the aggregate.

Legal Proceedings

The Company is, from time to time, subject to various claims and legal actions that arise in the ordinary course of the Company’s business, including claims for damages for personal injuries, medical malpractice, breach of contract, tort and employment related claims. In these actions, plaintiffs request a variety of damages, including, in some instances, punitive and other types of damages that may not be covered by insurance. In the opinion of management, the Company is not currently a party to any proceeding that would individually or in the aggregate have a material adverse effect on the Company’s business, financial condition or results of operations.

13. Noncontrolling Interests

On May 2, 2016, the Company opened Crestwyn Behavioral Health, a de novo inpatient psychiatric facility located in Memphis, Tennessee. The Company owns 60% of the equity interests in the facility, and two noncontrolling partners each own 20%. The value of the 40% noncontrolling interests approximates $6.0 million and is based on the fair value of contributions. The Company consolidates the operations of the facility based on its 60% equity ownership and its control of the entity. The noncontrolling interests are reflected as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets based on a put right that could require the Company to purchase the noncontrolling interests upon the occurrence of a change in control.

On August 31, 2015, the Company completed the acquisition of a controlling interest in Southcoast, an inpatient psychiatric facility located in Fairhaven, Massachusetts. The Company owns 75% of the equity interests in the facility. The value of the 25%

19

noncontrolling interest approximates $9.2 million. The Company considered an income approach and other valuation methodologies to value the noncontrolling interests. The Company consolidates the operations of the facility based on its 75% equity ownership and its control of the entity. The noncontrolling interests are reflected as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets based on a put right that could require the Company to purchase the noncontrolling interests upon the occurrence of a change in control.

14. Other Current Assets

Other current assets consisted of the following (in thousands):

	September 30, 2016		December 31, 2015
Prepaid expenses	$	32,568	$	21,817
Other receivables		24,850		17,518
Income taxes receivable		9,790		6,540
Workers’ compensation deposits – current portion		7,500		7,500
Insurance receivable – current portion		5,290		5,290
Inventory		4,758		4,681
Other		2,872		3,549
Other current assets	$	87,628	$	66,895

15. Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

	September 30, 2016		December 31, 2015
Accrued expenses	$	42,804	$	17,921
Unearned income		24,516		446
Accrued interest		13,523		26,132
Insurance liability – current portion		10,490		10,490
Accrued property taxes		4,474		2,951
Income taxes payable		121		7,367
Other current liabilities		8,585		7,499
Other accrued liabilities	$	104,513	$	72,806

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16. Segment Information

The Company operates in one line of business, which is operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As management reviews the operating results of its facilities in the U.S. (the “U.S. Facilities”) and its facilities in the U.K. (the “U.K. Facilities”) separately to assess performance and make decisions, the Company’s operating segments include its U.S. Facilities and U.K. Facilities. At September 30, 2016, the U.S. Facilities included 211 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities included 378 behavioral healthcare facilities with approximately 9,400 beds in the U.K. The following tables set forth the financial information by operating segment, including a reconciliation of Segment EBITDA to income from continuing operations before income taxes (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue:
U.S. Facilities	$	431,521		$	379,857		$	1,269,994		$	1,037,250
U.K. Facilities		303,146			97,875			836,004			256,117
Corporate and Other		(2	)		1,998			2,028			5,806
	$	734,665		$	479,730		$	2,108,026		$	1,299,173
Segment EBITDA(1):
U.S. Facilities	$	108,810		$	101,636		$	334,230		$	280,342
U.K. Facilities		67,795			23,015			185,664			62,197
Corporate and Other		(20,767	)		(16,183	)		(60,818	)		(49,556	)
	$	155,838		$	108,468		$	459,076		$	292,983
	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Segment EBITDA(1)	$	155,838		$	108,468		$	459,076		$	292,983
Plus (less):
Equity-based compensation expense		(7,145	)		(5,327	)		(20,989	)		(14,576	)
Debt extinguishment costs		(3,411	)		(9,979	)		(3,411	)		(9,979	)
Loss on divestiture		(174,739	)		—			(174,739	)		—
Gain (loss) on foreign currency derivatives		15			(1,018	)		523			(1,926	)
Transaction-related expenses		(1,111	)		(5,842	)		(33,483	)		(31,415	)
Interest expense, net		(48,843	)		(27,737	)		(135,315	)		(77,932	)
Depreciation and amortization		(36,418	)		(16,890	)		(101,145	)		(44,920	)
(Loss) income from continuing operations before income taxes	$	(115,814	)	$	41,675		$	(9,483	)	$	112,235
	U.S. Facilities			U.K. Facilities			Corporate and Other			Consolidated
Goodwill:
Balance at January 1, 2016	$	1,941,873		$	186,342		$	—		$	2,128,215
Increase from 2016 acquisitions		95,206			669,965			—			765,171
Foreign currency translation		—			(92,389	)		—			(92,389	)
Assets held for sale		—			(106,852	)		—			(106,852	)
Other		7,825			39			—			7,864
Balance at September 30, 2016	$	2,044,904		$	657,105		$	—		$	2,702,009

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	September 30, 2016		December 31, 2015
Assets (2):
U.S. Facilities	$	3,379,195	$	3,061,519
U.K. Facilities		2,907,903		1,045,922
Corporate and Other		165,880		171,767
	$	6,452,978	$	4,279,208

⁽¹⁾  Segment EBITDA is defined as income from continuing operations before provision for income taxes, equity-based compensation expense, gain/loss on foreign currency derivatives, transaction-related expenses, interest expense and depreciation and amortization. The Company uses Segment EBITDA as an analytical indicator to measure the performance of the Company’s segments and to develop strategic objectives and operating plans for those segments. Segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from Segment EBITDA are significant components in understanding and assessing financial performance. Because Segment EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, Segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

⁽²⁾  Assets include property and equipment for the U.S. Facilities of $1.0 billion, U.K. Facilities of $1.7 billion and corporate and other of $33.1 million at September 30, 2016. Assets include property and equipment for the U.S. Facilities of $832.2 million, U.K. Facilities of $824.4 million and corporate and other of $52.4 million at December 31, 2015.

17. Recently Issued Accounting Standards

In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Additionally, ASU 2016-09 would permit both public and nonpublic organizations to adopt the new standard early. Management is evaluating the impact of ASU 2016-09 on the Company’s consolidated financial statements.

In March 2016, FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02’s core principle is to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Additionally, ASU 2016-02 would permit both public and nonpublic organizations to adopt the new standard early. Management is evaluating the impact of ASU 2016-02 on the Company’s consolidated financial statements.

In May 2014, the FASB and the International Accounting Standards Board issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09’s core principal is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Additionally, ASU 2014-09 would permit both public and nonpublic organizations to adopt the new revenue standard early, but not before the original public organization effective date (that is, annual periods beginning after December 15, 2016). Management is evaluating the impact of ASU 2014-09 on the Company’s consolidated financial statements.

18. Subsequent Events

On October 18, 2016, the Company signed a definitive agreement with BC Partners for the sale of 21 existing U.K. behavioral health facilities and one de novo behavioral health facility with an aggregate of approximately 1,000 beds. Management believes the planned divestiture addresses the CMA’s competition concerns. The Company expects the sale to be approved by the CMA on or before November 18, 2016 and expects to complete the sale shortly thereafter. If the sale is approved by the CMA and completed, the Company will receive £320 million cash for the sale. If the sale is not approved by the CMA, the Company expects that the CMA will proceed with a phase 2 investigation.

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19. Financial Information for the Company and Its Subsidiaries

The Company conducts substantially all of its business through its subsidiaries. The 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes and 6.500% Senior Notes are jointly and severally guaranteed on an unsecured senior basis by all of the Company’s subsidiaries that guarantee the Company’s obligations under the Amended and Restated Senior Credit Facility. Presented below is condensed consolidating financial information for the Company and its subsidiaries as of September 30, 2016 and December 31, 2015, and for the three and nine months ended September 30, 2016 and 2015. The information segregates the parent company (Acadia Healthcare Company, Inc.), the combined wholly-owned subsidiary guarantors, the combined non-guarantor subsidiaries and eliminations.

Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

September 30, 2016

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	5,160	$	22,591	$	—		$	27,751
Accounts receivable, net		—		211,981		65,587		—			277,568
Other current assets		—		65,136		22,492		—			87,628
Total current assets		—		282,277		110,670		—			392,947
Property and equipment, net		—		934,633		1,852,013		—			2,786,646
Goodwill		—		1,938,368		763,641		—			2,702,009
Intangible assets, net		—		56,653		27,732		—			84,385
Deferred tax assets – noncurrent		3,587		—		4,691		(4,487	)		3,791
Derivative instruments		49,903		—		—		—			49,903
Investment in subsidiaries		4,985,674		—		—		(4,985,674	)		—
Assets held for sale		—		—		392,483		—			392,483
Other assets		854,658		36,030		2,326		(852,200	)		40,814
Total assets	$	5,893,822	$	3,247,961	$	3,153,556	$	(5,842,361	)	$	6,452,978
Current liabilities:
Current portion of long-term debt	$	77,363	$	—	$	235	$	—		$	77,598
Accounts payable		—		58,984		33,835		—			92,819
Accrued salaries and benefits		—		70,085		35,223		—			105,308
Other accrued liabilities		13,524		34,912		56,077		—			104,513
Total current liabilities		90,887		163,981		125,370		—			380,238
Long-term debt		3,560,814		—		875,265		(852,200	)		3,583,879
Deferred tax liabilities – noncurrent		—		8,684		77,246		(4,487	)		81,443
Other liabilities		—		104,586		42,564		—			147,150
Total liabilities		3,651,701		277,251		1,120,445		(856,687	)		4,192,710
Redeemable noncontrolling interests		—		—		18,147		—			18,147
Total equity		2,242,121		2,970,710		2,014,964		(4,985,674	)		2,242,121
Total liabilities and equity	$	5,893,822	$	3,247,961	$	3,153,556	$	(5,842,361	)	$	6,452,978

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Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

December 31, 2015

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	1,987	$	9,228	$	—		$	11,215
Accounts receivable, net		—		187,546		29,080		—			216,626
Other current assets		—		57,968		8,927		—			66,895
Total current assets		—		247,501		47,235		—			294,736
Property and equipment, net		—		805,439		903,614		—			1,709,053
Goodwill		—		1,835,339		292,876		—			2,128,215
Intangible assets, net		—		57,024		2,551		—			59,575
Deferred tax assets – noncurrent		3,946		40,587		4,581		—			49,114
Investment in subsidiaries		3,495,067		—		—		(3,495,067	)		—
Other assets		427,270		32,947		2,322		(424,024	)		38,515
Total assets	$	3,926,283	$	3,018,837	$	1,253,179	$	(3,919,091	)	$	4,279,208
Current liabilities:
Current portion of long-term debt	$	45,125	$	—	$	235	$	—		$	45,360
Accounts payable		—		75,015		16,326		—			91,341
Accrued salaries and benefits		—		66,249		14,447		—			80,696
Other accrued liabilities		26,132		10,886		35,788		—			72,806
Total current liabilities		71,257		152,150		66,796		—			290,203
Long-term debt		2,171,998		—		447,410		(424,024	)		2,195,384
Deferred tax liabilities – noncurrent		—		—		23,936		—			23,936
Other liabilities		—		75,159		3,443		—			78,602
Total liabilities		2,243,255		227,309		541,585		(424,024	)		2,588,125
Redeemable noncontrolling interests		—		—		8,055		—			8,055
Total equity		1,683,028		2,791,528		703,539		(3,495,067	)		1,683,028
Total liabilities and equity	$	3,926,283	$	3,018,837	$	1,253,179	$	(3,919,091	)	$	4,279,208

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Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Three Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	420,061		$	324,741		$	—	$	744,802
Provision for doubtful accounts		—			(9,383	)		(754	)		—		(10,137	)
Revenue		—			410,678			323,987			—		734,665
Salaries, wages and benefits		7,145			224,692			176,405			—		408,242
Professional fees		—			21,140			26,547			—		47,687
Supplies		—			19,467			11,088			—		30,555
Rents and leases		—			8,759			10,981			—		19,740
Other operating expenses		—			51,536			28,212			—		79,748
Depreciation and amortization		—			15,105			21,313			—		36,418
Interest expense, net		13,388			19,258			16,197			—		48,843
Debt extinguishment costs		3,411			—			—			—		3,411
Loss on divestiture		—			—			174,739			—		174,739
Gain on foreign currency derivatives		(15	)		—			—			—		(15	)
Transaction-related expenses		—			—			1,111			—		1,111
Total expenses		23,929			359,957			466,593			—		850,479
(Loss) income from continuing operations before income taxes		(23,929	)		50,721			(142,606	)		—		(115,814	)
Equity in earnings of subsidiaries		(99,875	)		—			—			99,875		—
(Benefit from) provision for income taxes		(5,594	)		38,654			(30,664	)		—		2,396
(Loss) income from continuing operations		(118,210	)		12,067			(111,942	)		99,875		(118,210	)
Income from discontinued operations, net of income taxes		—			—			—			—		—
Net (loss) income		(118,210	)		12,067			(111,942	)		99,875		(118,210	)
Net loss attributable to noncontrolling interests		—			—			402			—		402
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(118,210	)	$	12,067		$	(111,540	)	$	99,875	$	(117,808	)
Other comprehensive loss:
Foreign currency translation loss		—			—			(89,645	)		—		(89,645	)
Gain on derivative instruments		6,387			—			—			—		6,387
Other comprehensive income (loss)		6,387			—			(89,645	)		—		(83,258	)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$	(111,823	)	$	12,067		$	(201,185	)	$	99,875	$	(201,066	)

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Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Three Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	377,582		$	111,164		$	—		$	488,746
Provision for doubtful accounts		—			(8,531	)		(485	)		—			(9,016	)
Revenue		—			369,051			110,679			—			479,730
Salaries, wages and benefits		5,327			191,032			62,051			—			258,410
Professional fees		—			21,551			9,208			—			30,759
Supplies		—			17,349			4,285			—			21,634
Rents and leases		—			7,624			918			—			8,542
Other operating expenses		—			47,113			10,131			—			57,244
Depreciation and amortization		—			10,578			6,312			—			16,890
Interest expense, net		15,934			6,036			5,767			—			27,737
Debt extinguishment costs		9,979			—			—			—			9,979
Loss on foreign currency derivatives		1,018			—			—			—			1,018
Transaction-related expenses		—			2,831			3,011			—			5,842
Total expenses		32,258			304,114			101,683			—			438,055
(Loss) income from continuing operations before income taxes		(32,258	)		64,937			8,996			—			41,675
Equity in earnings of subsidiaries		50,840			—			—			(50,840	)		—
(Benefit from) provision for income taxes		(10,504	)		21,383			1,790			—			12,669
Income (loss) from continuing operations		29,086			43,554			7,206			(50,840	)		29,006
Income from discontinued operations, net of income taxes		—			80			—			—			80
Net income (loss)		29,086			43,634			7,206			(50,840	)		29,086
Net loss attributable to noncontrolling interests		—			—			464			—			464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	29,086		$	43,634		$	7,670		$	(50,840	)	$	29,550
Other comprehensive income:
Foreign currency translation gain		—			—			(32,707	)		—			(32,707	)
Other comprehensive income		—			—			(32,707	)		—			(32,707	)
Comprehensive income (loss)	$	29,086		$	43,634		$	(25,037	)	$	(50,840	)	$	(3,157	)

26

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Nine Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	1,245,227		$	893,812		$	—		$	2,139,039
Provision for doubtful accounts		—			(28,318	)		(2,695	)		—			(31,013	)
Revenue		—			1,216,909			891,117			—			2,108,026
Salaries, wages and benefits		20,989			648,669			487,899			—			1,157,557
Professional fees		—			66,967			71,003			—			137,970
Supplies		—			57,456			30,993			—			88,449
Rents and leases		—			25,857			29,156			—			55,013
Other operating expenses		—			151,485			79,465			—			230,950
Depreciation and amortization		—			42,072			59,073			—			101,145
Interest expense, net		37,452			57,394			40,469			—			135,315
Debt extinguishment costs		3,411			—			—			—			3,411
Loss on divestiture		—			—			174,739			—			174,739
Gain on foreign currency derivatives		(523	)		—			—			—			(523	)
Transaction-related expenses		—			25,624			7,859			—			33,483
Total expenses		61,329			1,075,524			980,656			—			2,117,509
(Loss) income from continuing operations before income taxes		(61,329	)		141,385			(89,539	)		—			(9,483	)
Equity in earnings of subsidiaries		8,937			—			—			(8,937	)		—
(Benefit from) provision for income taxes		(15,142	)		62,247			(19,338	)		—			27,767
(Loss) income from continuing operations		(37,250	)		79,138			(70,201	)		(8,937	)		(37,250	)
Income from discontinued operations, net of income taxes		—			—			—			—			—
Net (loss) income		(37,250	)		79,138			(70,201	)		(8,937	)		(37,250	)
Net loss attributable to noncontrolling interests		—			—			1,575			—			1,575
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(37,250	)	$	79,138		$	(68,626	)	$	(8,937	)	$	(35,675	)
Other comprehensive loss:
Foreign currency translation loss		—			—			(351,528	)		—			(351,528	)
Gain on derivative instruments		30,306			—			—			—			30,306
Other comprehensive income (loss)		30,306			—			(351,528	)		—			(321,222	)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$	(6,944	)	$	79,138		$	(420,154	)	$	(8,937	)	$	(356,897	)

27

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Nine Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	1,029,198		$	295,504		$	—		$	1,324,702
Provision for doubtful accounts		—			(23,516	)		(2,013	)		—			(25,529	)
Revenue		—			1,005,682			293,491			—			1,299,173
Salaries, wages and benefits		14,576			530,221			162,786			—			707,583
Professional fees		—			60,615			22,600			—			83,215
Supplies		—			47,287			11,143			—			58,430
Rents and leases		—			20,143			2,496			—			22,639
Other operating expenses		—			122,505			26,394			—			148,899
Depreciation and amortization		—			29,840			15,080			—			44,920
Interest expense, net		46,988			17,639			13,305			—			77,932
Debt extinguishment costs		9,979			—			—			—			9,979
Loss on foreign currency derivatives		1,926			—			—			—			1,926
Transaction-related expenses		—			24,193			7,222			—			31,415
Total expenses		73,469			852,443			261,026			—			1,186,938
(Loss) income from continuing operations before income taxes		(73,469	)		153,239			32,465			—			112,235
Equity in earnings of subsidiaries		127,108			—			—			(127,108	)		—
(Benefit from) provision for income taxes		(23,885	)		50,634			8,045			—			34,794
Income (loss) from continuing operations		77,524			102,605			24,420			(127,108	)		77,441
Income from discontinued operations, net of income taxes		—			83			—			—			83
Net income (loss)		77,524			102,688			24,420			(127,108	)		77,524
Net loss attributable to noncontrolling interests		—			—			464			—			464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	77,524		$	102,688		$	24,884		$	(127,108	)	$	77,988
Other comprehensive income:
Foreign currency translation gain		—			—			(15,923	)		—			(15,923	)
Other comprehensive income		—			—			(15,923	)		—			(15,923	)
Comprehensive income (loss)	$	77,524		$	102,688		$	8,961		$	(127,108	)	$	62,065

28

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net (loss) income	$	(37,250	)	$	79,138		$	(70,201	)	$	(8,937	)	$	(37,250	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(8,937	)		—			—			8,937			—
Depreciation and amortization		—			42,072			59,073			—			101,145
Amortization of debt issuance costs		8,035			—			(321	)		—			7,714
Equity-based compensation expense		20,989			—			—			—			20,989
Deferred income tax (benefit) expense		—			26,381			(524	)		—			25,857
Loss from discontinued operations, net of taxes		—			—			—			—			—
Debt extinguishment costs		3,411			—			—			—			3,411
Loss on divestiture		—			—			174,739			—			174,739
Gain on foreign currency derivatives		(523	)		—			—			—			(523	)
Other		—			826			(95	)		—			731
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(26,055	)		13,476			—			(12,579	)
Other current assets		—			(4,901	)		(8,072	)		—			(12,973	)
Other assets		(2,780	)		(818	)		(316	)		2,780			(1,134	)
Accounts payable and other accrued liabilities		—			31,633			(29,566	)		—			2,067
Accrued salaries and benefits		—			3,527			(14,286	)		—			(10,759	)
Other liabilities		—			5,975			(2,229	)		—			3,746
Net cash (used in) provided by continuing operating activities		(17,055	)		157,778			121,678			2,780			265,181
Net cash used in discontinued operating activities		—			(5,524	)		—			—			(5,524	)
Net cash (used in) provided by operating activities		(17,055	)		152,254			121,678			2,780			259,657
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(103,189	)		(580,096	)		—			(683,285	)
Cash paid for capital expenditures		—			(142,626	)		(107,335	)		—			(249,961	)
Cash paid for real estate acquisitions		—			(26,146	)		(11,801	)		—			(37,947	)
Settlement of foreign currency derivatives		—			523			—			—			523
Other		—			(1,135	)		—			—			(1,135	)
Net cash used in investing activities		—			(272,573	)		(699,232	)		—			(971,805	)
Financing activities:
Borrowings on long-term debt		1,480,000			—			—			—			1,480,000
Borrowings on revolving credit facility		179,000			—			—			—			179,000
Principal payments on revolving credit facility		(166,000	)		—			—			—			(166,000	)
Principal payments on long-term debt		(46,069	)		—			(2,780	)		2,780			(46,069	)
Repayment of assumed debt		(1,348,389	)		—			—			—			(1,348,389	)
Payment of debt issuance costs		(35,748	)		—			—			—			(35,748	)
Issuance of common stock		685,097			—			—			—			685,097
Common stock withheld for minimum statutory taxes, net		(7,917	)		—			—			—			(7,917	)
Excess tax benefit from equity awards		—			—			—			—			—
Other		—			(1,821	)		—			—			(1,821	)
Cash (used in) provided by intercompany activity		(722,919	)		125,313			603,166			(5,560	)		—
Net cash provided by (used in) financing activities		17,055			123,492			600,386			(2,780	)		738,153
Effect of exchange rate changes on cash		—			—			(9,469	)		—			(9,469	)
Net increase in cash and cash equivalents		—			3,173			13,363			—			16,536
Cash and cash equivalents at beginning of the period		—			1,987			9,228			—			11,215
Cash and cash equivalents at end of the period	$	—		$	5,160		$	22,591		$	—		$	27,751

29

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net income (loss)	$	77,524		$	102,688		$	24,420		$	(127,108	)	$	77,524
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(127,108	)		—			—			127,108			—
Depreciation and amortization		—			29,840			15,080			—			44,920
Amortization of debt issuance costs		5,347			—			(330	)		—			5,017
Equity-based compensation expense		14,576			—			—			—			14,576
Deferred income tax (benefit) expense		(58	)		27,035			1,948			—			28,925
Loss from discontinued operations, net of taxes		—			(83	)		—			—			(83	)
Debt extinguishment costs		9,979			—			—			—			9,979
Loss (gain) on foreign currency derivatives		1,926			—			—			—			1,926
Other		—			1,088			34			—			1,122
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(16,535	)		(12,370	)		—			(28,905	)
Other current assets		—			(14,287	)		2,086			—			(12,201	)
Other assets		(300	)		(4,881	)		2			300			(4,879	)
Accounts payable and other accrued liabilities		—			(10,510	)		2,194			—			(8,316	)
Accrued salaries and benefits		—			7,953			935			—			8,888
Other liabilities		—			5,821			(750	)		—			5,071
Net cash (used in) provided by continuing operating activities		(18,114	)		128,129			33,249			300			143,564
Net cash provided by discontinued operating activities		—			(1,479	)		—			—			(1,479	)
Net cash (used in) provided by operating activities		(18,114	)		126,650			33,249			300			142,085
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(88,308	)		(302,908	)		—			(391,216	)
Cash paid for capital expenditures		—			(116,466	)		(84,375	)		—			(200,841	)
Cash paid for real estate acquisitions		—			(21,976	)		—			—			(21,976	)
Settlement of foreign currency derivatives		—			(1,926	)		—			—			(1,926	)
Other		—			(887	)		—			—			(887	)
Net cash used in investing activities		—			(229,563	)		(387,283	)		—			(616,846	)
Financing activities:
Borrowings on long-term debt		1,150,000			—			—			—			1,150,000
Borrowings on revolving credit facility		310,000			—			—			—			310,000
Principal payments on revolving credit facility		(310,000	)		—			—			—			(310,000	)
Principal payments on long-term debt		(23,813	)		—			(300	)		300			(23,813	)
Repayment of assumed CRC debt		(904,467	)		—			—			—			(904,467	)
Repayments of senior notes		(88,331	)		—			—			—			(88,331	)
Payment of debt issuance costs		(25,584	)		—			—			—			(25,584	)
Payment of premium on senior notes		(6,890	)		—			—			—			(6,890	)
Issuance of Common Stock		—			331,360			—			—			331,360
Common stock withheld for minimum statutory taxes, net		(7,582	)		—			—			—			(7,582	)
Excess tax benefit from equity awards		8,020			—			—			—			8,020
Other		—			(374	)		—			—			(374	)
Cash provided by (used in) intercompany activity		(83,239	)		(257,037	)		340,876			(600	)		—
Net cash provided by (used in) financing activities		18,114			73,949			340,576			(300	)		432,339
Effect of exchange rate changes on cash		—			(856	)		—			—			(856	)
Net (decrease) increase in cash and cash equivalents		—			(29,820	)		(13,458	)		—			(43,278	)
Cash and cash equivalents at beginning of the period		—			76,685			17,355			—			94,040
Cash and cash equivalents at end of the period	$	—		$	46,865		$	3,897		$	—		$	50,762

30

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

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that address future results or occurrences. In some cases you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “would,” “should,” “could” or the negative thereof. Generally, the words “anticipate,” “believe,” “continue,” “expect,” “intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, which could cause our actual results, performance or achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to:

• the impact of an extended review of our acquisition of Priory by the CMA, including a potential phase 2 investigation, and the resulting delay in our ability to integrate Priory’s business;

• our ability to divest certain of our U.K. behavioral healthcare facilities and take other actions required by the CMA on acceptable terms and within expected timeframes, and the CMA’s approval of our planned divestiture of certain of our U.K. behavioral healthcare facilities;

• potential difficulties operating our business in light of political and economic instability in the U.K. and globally following the referendum in the U.K. on June 23, 2016, in which voters approved an exit from the European Union, or Brexit;

• the impact of fluctuations in foreign exchange rates, including the recent devaluation of the GBP relative to the USD following the Brexit vote;

• our significant indebtedness, our ability to meet our debt obligations, and our ability to incur substantially more debt;

• difficulties in successfully integrating the operations of acquired facilities, including those acquired in the Priory and CRC acquisitions, or realizing the potential benefits and synergies of our acquisitions;

• our ability to implement our business strategies in the U.K. and adapt to the regulatory and business environment in the U.K.;

• the impact of payments received from the government and third-party payors on our revenues and results of operations including the significant dependence of the Priory and Partnerships in Care facilities on payments received from the NHS;

• the occurrence of patient incidents, which could result in negative media coverage, adversely affect the price of our securities and result in incremental regulatory burdens and governmental investigations;

• our future cash flow and earnings;

• our restrictive covenants, which may restrict our business and financing activities;

• our ability to make payments on our financing arrangements;

• the impact of the economic and employment conditions in the U.S. and the U.K. on our business and future results of operations;

• compliance with laws and government regulations;

• the impact of claims brought against us or our facilities;

• the impact of governmental investigations, regulatory actions and whistleblower lawsuits;

• the impact of healthcare reform in the U.S. and abroad;

• the impact of our highly competitive industry on patient volumes;

• our ability to recruit and retain quality psychiatrists and other physicians;

• the impact of competition for staffing on our labor costs and profitability;

• our dependence on key management personnel, key executives and local facility management personnel;

• our acquisition and de novo strategies, which expose us to a variety of operational and financial risks, as well as legal and regulatory risks (e.g., exposure to the new regulatory regimes such as the U.K. for Priory and Partnerships in Care and various investigations relating to CRC);

• the impact of state efforts to regulate the construction or expansion of healthcare facilities (including those from Priory, CRC and Partnerships in Care) on our ability to operate and expand our operations;

• our potential inability to extend leases at expiration;

31

• the impact of controls designed to reduce inpatient services on our revenues;

• the impact of different interpretations of accounting principles on our results of operations or financial condition;

• the impact of environmental, health and safety laws and regulations, especially in states where we have concentrated operations;

• the impact of an increase in uninsured and underinsured patients or the deterioration in the collectability of the accounts of such patients on our results of operations;

• the risk of a cyber-security incident and any resulting violation of laws and regulations regarding information privacy or other negative impact;

• the impact of laws and regulations relating to privacy and security of patient health information and standards for electronic transactions;

• the impact of a change in the mix of our earnings, and changes in tax rates and laws generally;

• failure to maintain effective internal control over financial reporting;

• the impact of fluctuations in our operating results, quarter to quarter earnings and other factors on the price of our securities;

• the impact of the trend for insurance companies and managed care organizations to enter into sole source contracts on our ability to obtain patients; and

• those risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments.

Overview

Our business strategy is to acquire and develop behavioral healthcare facilities and improve our operating results within our facilities and our other behavioral healthcare operations. We strive to improve the operating results of our facilities by providing high-quality services, expanding referral networks and marketing initiatives while meeting the increased demand for behavioral healthcare services through expansion of our current locations as well as developing new services within existing locations. At September 30, 2016, we operated 589 behavioral healthcare facilities with over 17,900 beds in 39 states, the U.K. and Puerto Rico. During the nine months ended September 30, 2016, we acquired 328 facilities and added approximately 688 new beds, including 548 beds to existing facilities and 140 beds added through the opening of two de novo facilities. For the year ending December 31, 2016, we expect to add approximately 800 total beds exclusive of acquisitions.

We are the leading publicly traded pure-play provider of behavioral healthcare services, with operations in the U.S. and the U.K. Management believes that the Company’s recent acquisitions position the Company as a leading platform in a highly fragmented industry under the direction of an experienced management team that has significant industry expertise. Management expects to take advantage of several strategies that are more accessible as a result of our increased size and geographic scale, including continuing a national marketing strategy to attract new patients and referral sources, increasing our volume of out-of-state referrals, providing a broader range of services to new and existing patients and clients and selectively pursuing opportunities to expand our facility and bed count.

Acquisitions

On February 16, 2016, we completed the acquisition of Priory for a total purchase price of approximately $2.2 billion, including total cash consideration of approximately $1.9 billion and the issuance of 4,033,561 shares of our common stock. Priory is the leading independent provider of behavioral healthcare services in the U.K. At February 16, 2016, Priory operated 324 facilities with approximately 7,100 beds.

On April 1, 2016, we completed the acquisition of Serenity Knolls, an inpatient psychiatric facility with 30 beds located in Forest Knolls, California, for cash consideration of approximately $9.7 million.

On May 1, 2016, we completed the acquisition of TrustPoint, a behavioral health facility with a total of 100 beds located in Murfreesboro, Tennessee, for cash consideration of approximately $62.7 million.

32

On June 1, 2016, we completed the acquisition of certain facilities from Pocono Mountain, an inpatient psychiatric facility with 108 beds located in Henryville, Pennsylvania, for total consideration of approximately $25.2 million. We may make cash payments of up to $5.0 million under an earn-out agreement, contingent upon achievement by Pocono Mountain of certain operating and performance targets for the one-year period ending May 31, 2017.

Planned U.K. Divestiture

The CMA in the U.K. has been reviewing our acquisition of Priory. On July 14, 2016, the CMA announced that our acquisition of Priory would be referred for a phase 2 investigation unless we offered acceptable undertakings to address the CMA’s competition concerns relating to the provision of behavioral healthcare services in certain markets. On July 28, 2016, the CMA announced that we had offered undertakings to address the CMA’s concerns and that, in lieu of a phase 2 investigation, the CMA will consider our undertakings.

On October 18, 2016, we signed a definitive agreement with BC Partners for the sale of 21 existing U.K. behavioral health facilities and one de novo behavioral health facility with an aggregate of approximately 1,000 beds. We believe the planned divestiture addresses the CMA’s competition concerns. We expect the sale to be approved by the CMA on or before November 18, 2016 and we expect to complete the sale shortly thereafter. If the sale is approved by the CMA and completed, we will receive £320 million cash for the sale. If the sale is not approved by the CMA, we expect that the CMA will proceed with a phase 2 investigation.

Revenue

Our revenue is primarily derived from services rendered to patients for inpatient psychiatric and substance abuse care, outpatient psychiatric care and adolescent residential treatment. We receive payments from the following sources for services rendered in our facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by CMS; (iv) the NHS (including Local Authorities) in the U.K.; and (v) individual patients and clients. Revenue is recorded in the period in which services are provided at established billing rates less contractual adjustments based on amounts reimbursable by Medicare or Medicaid under provisions of cost or prospective reimbursement formulas or amounts due from other third-party payors at contractually determined rates.

The following table presents revenue by payor type and as a percentage of revenue before provision for doubtful accounts for the three and nine months ended September 30, 2016 and 2015 (dollars in thousands):

	Three Months Ended September 30,												Nine Months Ended September 30,
	2016						2015						2016						2015
	Amount			%			Amount			%			Amount			%			Amount			%
Commercial	$	136,014			18.3	%	$	114,663			23.5	%	$	398,011			18.6	%	$	306,196			23.0	%
Medicare		70,563			9.5	%		57,263			11.7	%		198,183			9.3	%		158,395			12.0	%
Medicaid		182,432			24.5	%		160,337			32.8	%		542,594			25.4	%		440,865			33.3	%
NHS		278,524			37.4	%		97,040			19.9	%		771,496			36.1	%		252,675			19.1	%
Self-Pay		68,608			9.2	%		47,597			9.7	%		200,451			9.4	%		127,884			9.7	%
Other		8,661			1.1	%		11,846			2.4	%		28,304			1.2	%		38,687			2.9	%
Revenue before provision for doubtful accounts		744,802			100.0	%		488,746			100.0	%		2,139,039			100.0	%		1,324,702			100.0	%
Provision for doubtful accounts		(10,137	)					(9,016	)					(31,013	)					(25,529	)
Revenue	$	734,665					$	479,730					$	2,108,026					$	1,299,173

33

The following tables present a summary of our aging of accounts receivable as of September 30, 2016 and December 31, 2015:

	Current			30-90			90-150			>150			Total
September 30, 2016
Commercial		17.3	%		6.8	%		3.2	%		4.3	%		31.6	%
Medicare		11.3	%		1.6	%		0.6	%		1.1	%		14.6	%
Medicaid		20.2	%		5.7	%		2.9	%		4.6	%		33.4	%
NHS		7.2	%		3.4	%		0.2	%		0.2	%		11.0	%
Self-Pay		2.2	%		1.5	%		1.5	%		3.2	%		8.4	%
Other		0.5	%		0.1	%		0.1	%		0.3	%		1.0	%
Total		58.7	%		19.1	%		8.5	%		13.7	%		100.0	%
	Current			30-90			90-150			>150			Total
December 31, 2015
Commercial		16.6	%		9.1	%		3.2	%		3.0	%		31.9	%
Medicare		12.6	%		2.3	%		1.2	%		0.4	%		16.5	%
Medicaid		23.4	%		6.7	%		2.8	%		4.2	%		37.1	%
NHS		1.6	%		3.1	%		0.5	%		—	%		5.2	%
Self-Pay		1.7	%		1.8	%		2.0	%		3.0	%		8.5	%
Other		0.5	%		0.1	%		0.1	%		0.1	%		0.8	%
Total		56.4	%		23.1	%		9.8	%		10.7	%		100.0	%

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Results of Operations

The following table illustrates our consolidated results of operations from continuing operations for the respective periods shown (dollars in thousands):

	Three Months Ended September 30,												Nine Months Ended September 30,
	2016						2015						2016						2015
	Amount			%			Amount			%			Amount			%			Amount			%
Revenue before provision for doubtful accounts	$	744,802					$	488,746					$	2,139,039					$	1,324,702
Provision for doubtful accounts		(10,137	)					(9,016	)					(31,013	)					(25,529	)
Revenue		734,665			100.0	%		479,730			100.0	%		2,108,026			100.0	%		1,299,173			100.0	%
Salaries, wages and benefits		408,242			55.6	%		258,410			53.9	%		1,157,557			54.9	%		707,583			54.5	%
Professional fees		47,687			6.5	%		30,759			6.4	%		137,970			6.5	%		83,215			6.4	%
Supplies		30,555			4.2	%		21,634			4.5	%		88,449			4.2	%		58,430			4.5	%
Rents and leases		19,740			2.7	%		8,542			1.8	%		55,013			2.6	%		22,639			1.7	%
Other operating expenses		79,748			10.9	%		57,244			11.9	%		230,950			11.0	%		148,899			11.5	%
Depreciation and amortization		36,418			5.0	%		16,890			3.5	%		101,145			4.8	%		44,920			3.5	%
Interest expense		48,843			6.6	%		27,737			5.8	%		135,315			6.4	%		77,932			6.0	%
Debt extinguishment costs		3,411			0.5	%		9,979			2.1	%		3,411			0.2	%		9,979			0.8	%
Loss on divestiture		174,739			23.8	%		—			—	%		174,739			8.3	%		—			—	%
(Gain) loss on foreign currency derivatives		(15	)		(0.1	)%		1,018			0.2	%		(523	)		(0.1	)%		1,926			0.1	%
Transaction-related expenses		1,111			0.1	%		5,842			1.2	%		33,483			1.6	%		31,415			2.4	%
Total expenses		850,479			115.8	%		438,055			91.3	%		2,117,509			100.4	%		1,186,938			91.4	%
(Loss) income from continuing operations before income taxes		(115,814	)		(15.8	)%		41,675			8.7	%		(9,483	)		(0.4	)%		112,235			8.6	%
Provision for income taxes		2,396			0.3	%		12,669			2.6	%		27,767			1.3	%		34,794			2.7	%
(Loss) income from continuing operations	$	(118,210	)		(16.1	)%	$	29,006			6.1	%	$	(37,250	)		(1.7	)%	$	77,441			5.9	%

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Three months ended September 30, 2016 compared to the three months ended September 30, 2015

Revenue before provision for doubtful accounts. Revenue before provision for doubtful accounts increased $256.1 million, or 52.4%, to $744.8 million for the three months ended September 30, 2016 from $488.7 million for the three months ended September 30, 2015. The increase related primarily to revenue generated during the three months ended September 30, 2016 from the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. The decrease in the GBP to USD exchange rate had an unfavorable impact on revenue before provision for doubtful accounts of $15.0 million for the three months ended September 30, 2016. Same-facility revenue before provision for doubtful accounts increased by $29.6 million, or 6.5%, for the three months ended September 30, 2016 compared to the three months ended September 30, 2015, resulting from same-facility growth in patient days of 6.3%. Consistent with the same-facility patient day growth in 2015, the growth in same-facility patient days for the three months ended September 30, 2016 compared to the three months ended September 30, 2015 resulted from the addition of beds to our existing facilities and ongoing demand for our services.

Provision for doubtful accounts. The provision for doubtful accounts was $10.1 million for the three months ended September 30, 2016, or 1.4% of revenue before provision for doubtful accounts, compared to $9.0 million for the three months ended September 30, 2015, or 1.8% of revenue before provision for doubtful accounts.

Salaries, wages and benefits. Salaries, wages and benefits (“SWB”) expense was $408.2 million for the three months ended September 30, 2016 compared to $258.4 million for the three months ended September 30, 2015, an increase of $149.8 million. SWB expense included $7.1 million and $5.3 million of equity-based compensation expense for the three months ended September 30, 2016 and 2015, respectively. Excluding equity-based compensation expense, SWB expense was $401.1 million, or 54.6% of revenue, for the three months ended September 30, 2016, compared to $253.1 million, or 52.8% of revenue, for the three months ended September 30, 2015. The $148.0 million increase in SWB expense, excluding equity-based compensation expense, was primarily attributable to SWB expense incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility SWB expense was $244.2 million for the three months ended September 30, 2016, or 50.9% of revenue, compared to $224.0 million for the three months ended September 30, 2015, or 49.6% of revenue.

Professional fees. Professional fees were $47.7 million for the three months ended September 30, 2016, or 6.5% of revenue, compared to $30.8 million for the three months ended September 30, 2015, or 6.4% of revenue. The $16.9 million increase was primarily attributable to professional fees incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility professional fees were $23.7 million for the three months ended September 30, 2016, or 5.0% of revenue, compared to $25.1 million, for the three months ended September 30, 2015, or 5.6% of revenue.

Supplies. Supplies expense was $30.6 million for the three months ended September 30, 2016, or 4.2% of revenue, compared to $21.6 million for the three months ended September 30, 2015, or 4.5% of revenue. The $8.9 million increase was primarily attributable to supplies expense incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility supplies expense was $21.1 million for the three months ended September 30, 2016, or 4.4% of revenue, compared to $19.8 million for the three months ended September 30, 2015, or 4.4% of revenue.

Rents and leases. Rents and leases were $19.7 million for the three months ended September 30, 2016, or 2.7% of revenue, compared to $8.5 million for the three months ended September 30, 2015, or 1.8% of revenue. The $11.2 million increase was primarily attributable to rents and leases incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility rents and leases were $8.6 million for the three months ended September 30, 2016, or 1.8% of revenue, compared to $7.6 million for the three months ended September 30, 2015, or 1.7% of revenue.

Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, travel and repairs and maintenance expenses. Other operating expenses were $79.7 million for the three months ended September 30, 2016, or 10.9% of revenue, compared to $57.2 million for the three months ended September 30, 2015, or 11.9% of revenue. The $22.5 million increase was primarily attributable to other operating expenses incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility other operating expenses were $52.9 million for the three months ended September 30, 2016, or 11.0% of revenue, compared to $51.4 million for the three months ended September 30, 2015, or 11.3% of revenue.

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Depreciation and amortization. Depreciation and amortization expense was $36.4 million for the three months ended September 30, 2016, or 5.0% of revenue, compared to $16.9 million for the three months ended September 30, 2015, or 3.5% of revenue. The increase in depreciation and amortization was attributable to depreciation associated with capital expenditures during 2015 and 2016 and real estate acquired as part of the 2015 and 2016 Acquisitions, particularly the acquisition of Priory.

Interest expense. Interest expense was $48.8 million for the three months ended September 30, 2016 compared to $27.7 million for the three months ended September 30, 2015. The increase in interest expense was primarily a result of borrowings under the Amended and Restated Senior Credit Facility, the issuance of the 5.625% Senior Notes on September 21, 2015 and the issuance of the 6.500% Senior Notes on February 16, 2016.

Debt extinguishment costs. Debt extinguishment costs for the three months ended September 30, 2016 represent $3.4 million of charges recorded in connection with the Tranche B-2 Repricing Amendment. The debt extinguishment costs for the three months ended September 30, 2015 represent $6.9 million of cash charges and $3.1 million of noncash charges recorded in connection with the purchase of approximately $88.3 million aggregate principal amount of outstanding 12.875% Senior Notes.

Loss on divestiture. As part of our planned divestiture in the U.K., we recorded $174.7 million of loss on divestiture for the three months ended September 30, 2016, which included an allocation of goodwill to the U.K. Disposal Group of approximately $106.9 million, estimated transaction-related expenses of approximately $25.6 million and a loss on the sale of property of $42.2 million.

(Gain) loss on foreign currency derivatives. We entered into foreign currency forward contracts during the three months ended September 30, 2016 and 2015 in connection with (i) acquisitions in the U.K. and (ii) transfers of cash between the U.S. and the U.K. under our cash management and foreign currency risk management programs. Exchange rate changes between the contract date and the settlement date resulted in a gain on foreign currency derivatives of $15 thousand for the three months ended September 30, 2016, compared to a loss on foreign currency derivatives of $1.0 million for the three months ended September 30, 2015.

Transaction-related expenses. Transaction-related expenses were $1.1 million for the three months ended September 30, 2016 compared to $5.8 million for the three months ended September 30, 2015. Transaction-related expenses represent costs incurred in the respective periods, primarily related to the 2015 and 2016 Acquisitions, as summarized below (in thousands):

	Three Months Ended September 30,
	2016		2015
Legal, accounting and other costs	$	1,111	$	5,261
Severance and contract termination costs		—		581
	$	1,111	$	5,842

Provision for income taxes. For the three months ended September 30, 2016, the provision for income taxes was $2.4 million, reflecting an effective tax rate of (2.1)%, compared to $12.7 million, reflecting an effective tax rate of 30.4%, for the three months ended September 30, 2015. The change in the tax rate for the three months ended September 30, 2016 is primarily attributable to the loss on divestiture related to our planned divestiture in the U.K.

Nine months ended September 30, 2016 compared to the nine months ended September 30, 2015

Revenue before provision for doubtful accounts. Revenue before provision for doubtful accounts increased $814.3 million, or 61.5%, to $2.1 billion for the nine months ended September 30, 2016 from $1.3 billion for the nine months ended September 30, 2015. The increase related primarily to revenue generated during the nine months ended September 30, 2016 from the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. The decrease in the GBP to USD exchange rate had an unfavorable impact on revenue before provision for doubtful accounts of $24.4 million for the nine months ended September 30, 2016. Same-facility revenue before provision for doubtful accounts increased $99.0 million, or 7.8%, for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2015, resulting from same-facility growth in patient days of 7.4% and an increase in same-facility revenue per day of 0.3%. Consistent with the same-facility patient day growth in 2015, the growth in same-facility patient days for the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 resulted from the addition of beds to our existing facilities and ongoing demand for our services.

Provision for doubtful accounts. The provision for doubtful accounts was $31.0 million for the nine months ended September 30, 2016, or 1.4% of revenue before provision for doubtful accounts, compared to $25.5 million for the nine months ended September 30, 2015, or 1.9% of revenue before provision for doubtful accounts.

Salaries, wages and benefits. SWB expense was $1.2 billion for the nine months ended September 30, 2016 compared to $707.6 million for the nine months ended September 30, 2015, an increase of $450.0 million. SWB expense included $21.0 million and $14.6 million of equity-based compensation expense for the nine months ended September 30, 2016 and 2015, respectively. Excluding

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equity-based compensation expense, SWB expense was $1.1 billion, or 53.9% of revenue, for the nine months ended September 30, 2016, compared to $693.0 million, or 53.3% of revenue, for the nine months ended September 30, 2015. The $443.6 million increase in SWB expense, excluding equity-based compensation expense, was primarily attributable to SWB expense incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility SWB expense was $679.3 million for the nine months ended September 30, 2016, or 50.3% of revenue, compared to $626.7 million for the nine months ended September 30, 2015, or 50.0% of revenue.

Professional fees. Professional fees were $138.0 million for the nine months ended September 30, 2016, or 6.5% of revenue, compared to $83.2 million for the nine months ended September 30, 2015, or 6.4% of revenue. The $54.8 million increase was primarily attributable to professional fees incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility professional fees were $68.8 million for the nine months ended September 30, 2016, or 5.1% of revenue, compared to $70.4 million, for the nine months ended September 30, 2015, or 5.6% of revenue.

Supplies. Supplies expense was $88.4 million for the nine months ended September 30, 2016, or 4.2% of revenue, compared to $58.4 million for the nine months ended September 30, 2015, or 4.5% of revenue. The $30.0 million increase was primarily attributable to supplies expense incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility supplies expense was $60.3 million for the nine months ended September 30, 2016, or 4.5% of revenue, compared to $55.9 million for the nine months ended September 30, 2015, or 4.5% of revenue.

Rents and leases. Rents and leases were $55.0 million for the nine months ended September 30, 2016, or 2.6% of revenue, compared to $22.6 million for the nine months ended September 30, 2015, or 1.7% of revenue. The $32.4 million increase was primarily attributable to rents and leases incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility rents and leases were $23.0 million for the nine months ended September 30, 2016, or 1.7% of revenue, compared to $20.9 million for the nine months ended September 30, 2015, or 1.7% of revenue.

Other operating expenses. Other operating expenses consisted primarily of purchased services, utilities, insurance, travel and repairs and maintenance expenses. Other operating expenses were $231.0 million for the nine months ended September 30, 2016, or 11.0% of revenue, compared to $148.9 million for the nine months ended September 30, 2015, or 11.5% of revenue. The $82.1 million increase was primarily attributable to other operating expenses incurred by the facilities acquired in our 2015 and 2016 Acquisitions, particularly the acquisition of Priory. Same-facility other operating expenses were $148.2 million for the nine months ended September 30, 2016, or 11.0% of revenue, compared to $139.3 million for the nine months ended September 30, 2015, or 11.1% of revenue.

Depreciation and amortization. Depreciation and amortization expense was $101.1 million for the nine months ended September 30, 2016, or 4.8% of revenue, compared to $44.9 million for the nine months ended September 30, 2015, or 3.5% of revenue. The increase in depreciation and amortization was attributable to depreciation associated with capital expenditures during 2015 and 2016 and real estate acquired as part of the 2015 and 2016 Acquisitions, particularly the acquisition of Priory.

Interest expense. Interest expense was $135.3 million for the nine months ended September 30, 2016 compared to $77.9 million for the nine months ended September 30, 2015. The increase in interest expense was primarily a result of borrowings under the Amended and Restated Senior Credit Facility, the issuance of the 5.625% Senior Notes on February 11, 2015 and September 21, 2015 and the issuance of the 6.500% Senior Notes on February 16, 2016.

Debt extinguishment costs. Debt extinguishment costs for the nine months ended September 30, 2016 represent $3.4 million of charges recorded in connection with the Tranche B-2 Repricing Amendment. The debt extinguishment costs for the nine months ended September 30, 2015 represent $6.9 million of cash charges and $3.1 million of noncash charges recorded in connection with the purchase of approximately $88.3 million aggregate principal amount of outstanding 12.875% Senior Notes.

Loss on divestiture. As part of our planned divestiture in the U.K., we recorded $174.7 million of loss on divestiture for the nine months ended September 30, 2016, which included an allocation of goodwill to the U.K. Disposal Group of approximately $106.9 million, estimated transaction-related expenses of approximately $25.6 million and a loss on the sale of properties of $42.2 million.

(Gain) loss on foreign currency derivatives. We entered into foreign currency forward contracts during the nine months ended September 30, 2016 and 2015 in connection with (i) acquisitions in the U.K. and (ii) transfers of cash between the U.S. and the U.K. under our cash management and foreign currency risk management programs. Exchange rate changes between the contract date and the settlement date resulted in a gain on foreign currency derivatives of $0.5 million for the nine months ended September 30, 2016, compared to a loss on foreign currency derivatives of $1.9 million for the nine months ended September 30, 2015.

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Transaction-related expenses. Transaction-related expenses were $33.5 million for the nine months ended September 30, 2016 compared to $31.4 million for the nine months ended September 30, 2015. Transaction-related expenses represent costs incurred in the respective periods, primarily related to the 2015 and 2016 Acquisitions, as summarized below (in thousands):

	Nine Months Ended September 30,
	2016		2015
Legal, accounting and other costs	$	17,212	$	14,315
Advisory and financing commitment fees		14,850		10,337
Severance and contract termination costs		1,421		6,763
	$	33,483	$	31,415

Provision for income taxes. For the nine months ended September 30, 2016, the provision for income taxes was $27.8 million, reflecting an effective tax rate of (292.8)%, compared to $34.8 million, reflecting an effective tax rate of 31.0%, for the nine months ended September 30, 2015. The change in the tax rate for the nine months ended September 30, 2016 is primarily attributable to the loss on divestiture related to our planned divestiture in the U.K.

Liquidity and Capital Resources

Cash provided by continuing operating activities for the nine months ended September 30, 2016 was $265.2 million compared to $143.6 million for the nine months ended September 30, 2015. The increase in cash provided by continuing operating activities was primarily attributable to cash provided by continuing operating activities from the 2015 and 2016 Acquisitions and the growth in same-facility operations. Days sales outstanding was 35 as of September 30, 2016 compared to 40 as of December 31, 2015, which was primarily due to the acquisition of Priory and its shorter timing of cash collections. As of September 30, 2016 and December 31, 2015, we had working capital of $12.7 million and $4.5 million, respectively.

Cash used in investing activities for the nine months ended September 30, 2016 was $971.8 million compared to $616.8 million for the nine months ended September 30, 2015. Cash used in investing activities for the nine months ended September 30, 2016 primarily consisted of $683.3 million of cash paid for acquisitions. Cash paid for capital expenditures for the nine months ended September 30, 2016 was $250.0 million, consisting of $57.1 million of routine capital expenditures and $192.9 million of expansion capital expenditures. We define expansion capital expenditures as those that increase the capacity of our facilities or otherwise enhance revenue. Routine or maintenance capital expenditures were 2.5% of revenue for the nine months ended September 30, 2016. Cash paid for real estate acquisitions was $37.9 million for the nine months ended September 30, 2016. Cash used in investing activities for the nine months ended September 30, 2015 primarily consisted of $391.2 million of cash paid for acquisitions, $200.8 million of cash paid for capital expenditures.

Cash provided by financing activities for the nine months ended September 30, 2016 was $738.2 million compared to $432.3 million for the nine months ended September 30, 2015. Cash provided by financing activities for the nine months ended September 30, 2016 primarily consisted of long-term debt borrowings of $1.5 billion, borrowings on our revolving credit facility of $179.0 million and an issuance of common stock of $685.1 million, partially offset by repayment of assumed Priory debt of $1.3 billion, payment on revolving credit facility of $166.0 million, payment of debt issuance costs of $35.8 million, common stock withheld for minimum statutory taxes of $7.9 million and principal payments on long-term debt of $46.1 million. Cash provided by financing activities for the nine months ended September 30, 2015 primarily consisted of borrowings on long-term debt of $1.2 billion, borrowings on our revolving credit facility of $310.0 million, issuance of common stock of $331.4 million and an excess tax benefit from equity awards of $8.0 million, partially offset by repayment of assumed CRC debt of $904.5 million, repayment of senior notes of $88.3 million, principal payments on our revolving credit facility of $310.0 million, payment of debt issuance costs of $25.6 million, principal payments on long-term debt of $23.8 million, payment of premium for purchase of senior notes of $6.9 million and common stock withheld for minimum statutory taxes of $7.6 million.

We had total available cash and cash equivalents of $27.8 million and $11.2 million as of September 30, 2016 and December 31, 2015, respectively, of which approximately $22.6 million and $9.2 million was held by our foreign subsidiaries, respectively. Our strategic plan does not require the repatriation of foreign cash in order to fund our operations in the U.S., except for cash transfers under our cross currency swap agreements and other intercompany debt agreements. It is our current intention to permanently reinvest our foreign cash and cash equivalents outside of the U.S. If we were to repatriate foreign cash to the U.S., we would be required to accrue and pay U.S. taxes in accordance with applicable U.S. tax rules and regulations as a result of the repatriation.

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Amended and Restated Senior Credit Facility

We entered into the Senior Secured Credit Facility on April 1, 2011. On December 31, 2012, we entered into the Amended and Restated Credit Agreement which amended and restated the Senior Secured Credit Facility. We have amended the Amended and Restated Credit Agreement from time to time as described in our prior filings with the Securities and Exchange Commission.

On February 6, 2015, we entered into the Seventh Amendment to our Amended and Restated Credit Agreement. The Seventh Amendment added Citibank, N.A. as an “L/C Issuer” under the Amended and Restated Credit Agreement in order to permit the rollover of CRC’s existing letters of credit into the Amended and Restated Credit Agreement and increased both the Company’s Letter of Credit Sublimit and Swing Line Sublimit to $20.0 million.

On February 11, 2015, we entered into the First Incremental Amendment to our Amended and Restated Credit Agreement. The First Incremental Amendment activated a new $500.0 million incremental Existing TLB Facility that was added to the Amended and Restated Senior Secured Credit Facility, subject to limited conditionality provisions. Borrowings under the Existing TLB Facility were used to fund a portion of the purchase price for our acquisition of CRC.

On April 22, 2015, we entered into an Eighth Amendment to our Amended and Restated Credit Agreement. The Eighth Amendment changed the definition of “Change of Control” in part to remove a provision whose purpose was, when calculating whether a majority of incumbent directors have approved new directors, that any incumbent director that became a director as a result of a threatened or actual proxy contest was not counted in such calculation.

On January 25, 2016, we entered into the Ninth Amendment to our Amended and Restated Credit Agreement. The Ninth Amendment modifies certain definitions and provides increased flexibility to us in terms of our financial covenants. Our baskets for permitted investments were also increased to provide increased flexibility for us to invest in non-wholly owned subsidiaries, joint ventures and foreign subsidiaries. We may now invest in non-wholly owned subsidiaries and joint ventures up to 10.0% of our and our subsidiaries’ total assets in any consecutive four fiscal quarter period, and up to 12.5% of our and our subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. We may also invest in foreign subsidiaries that are not loan parties up to 10% of our and our subsidiaries’ total assets in any consecutive four fiscal quarter period, and up to 15% of our and our subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. The foregoing permitted investments are subject to an aggregate cap of 25% of our and our subsidiaries’ total assets in any fiscal year.

On February 16, 2016, we entered into the Second Incremental Facility Amendment to our Amended and Restated Credit Agreement. The Second Incremental Amendment activated a new $955.0 million incremental Term Loan B facility and added $135.0 million to the Term Loan A facility to our Amended and Restated Senior Secured Credit Facility, subject to limited conditionality provisions. Borrowings under the New TLB Facility were used to fund a portion of the purchase price for the acquisition of Priory and the fees and expenses for such acquisition and the related financing transactions. Borrowings under the TLA Facility were used to pay down the majority of our $300.0 million revolving credit facility.

On May 26, 2016, we entered into a Tranche B-1 Repricing Amendment to the Amended and Restated Credit Agreement. The Tranche B-1 Repricing Amendment reduces the Applicable Rate with respect to the Existing TLB Facility from 3.5% to 3.0% in the case of Eurodollar Rate loans and 2.5% to 2.0% in the case of Base Rate Loans.

On September 21, 2016, we entered into a Tranche B-2 Repricing Amendment to the Amended and Restated Credit Agreement. The Tranche B-2 Repricing Amendment reduces the Applicable Rate with respect to the New TLB Facility from 3.75% to 3.00% in the case of Eurodollar Rate loans and 2.75% to 2.00% in the case of Base Rate Loans. In connection with the Tranche B-2 Repricing Amendment, we recorded a debt extinguishment charge of $3.4 million, including the discount and write-off of deferred financing costs, which was recorded in debt extinguishment costs in the consolidated statements of income.

We had $120.6 million of availability under the revolving line of credit as of September 30, 2016. Borrowings under the revolving line of credit are subject to customary conditions precedent to borrowing. The Amended and Restated Credit Agreement requires quarterly term loan principal repayments of our TLA Facility of $12.6 million for September 30, 2016 to December 31, 2016, $16.8 million for March 31, 2017 to December 31, 2017, and $20.9 million for March 31, 2018 to December 31, 2018, with the remaining principal balance of the TLA Facility due on the maturity date of February 13, 2019. We are required to repay the Existing TLB Facility in equal quarterly installments of $1.3 million on the last business day of each March, June, September and December, with the outstanding principal balance of the Existing TLB Facility due on February 11, 2022. We are required to repay the New TLB Facility in equal quarterly installments of approximately $2.4 million on the last business day of each March, June, September and December, with the outstanding principal balance of the New TLB Facility due on February 16, 2023.

Borrowings under the Amended and Restated Credit Agreement are guaranteed by each of our wholly-owned domestic subsidiaries (other than certain excluded subsidiaries) and are secured by a lien on substantially all of our and such subsidiaries’

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assets. Borrowings with respect to the TLA Facility and our revolving credit facility (collectively, “Pro Rata Facilities”) under the Amended and Restated Credit Agreement bear interest at a rate tied to Acadia’s Consolidated Leverage Ratio (defined as consolidated funded debt net of up to $40.0 million of unrestricted and unencumbered cash to consolidated EBITDA, in each case as defined in the Amended and Restated Credit Agreement). The Applicable Rate (as defined in the Amended and Restated Credit Agreement) for the Pro Rata Facilities was 3.25% for Eurodollar Rate Loans (as defined in the Amended and Restated Credit Agreement) and 2.0% for Base Rate Loans (as defined in the Amended and Restated Credit Agreement) at September 30, 2016. Eurodollar Rate Loans with respect to the Pro Rata Facilities bear interest at the Applicable Rate plus the Eurodollar Rate (as defined in the Amended and Restated Credit Agreement) (based upon the LIBOR Rate (as defined in the Amended and Restated Credit Agreement) prior to commencement of the interest rate period). Base Rate Loans with respect to the Pro Rata Facilities bear interest at the Applicable Rate plus the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate and (iii) the Eurodollar Rate plus 1.0%. As of September 30, 2016, the Pro Rata Facilities bore interest at a rate of LIBOR plus 3.25%. In addition, we are required to pay a commitment fee on undrawn amounts under our revolving credit facility.

The interest rates and the unused line fee on unused commitments related to the Pro Rata Facilities are based upon the following pricing tiers:

Pricing Tier	Consolidated Leverage Ratio	Eurodollar Rate Loans			Base Rate Loans			Commitment Fee
1	< 3.50:1.0		2.25	%		1.25	%		0.30	%
2	>3.50:1.0 but < 4.00:1.0		2.50	%		1.50	%		0.35	%
3	>4.00:1.0 but < 4.50:1.0		2.75	%		1.75	%		0.40	%
4	>4.50:1.0 but < 5.25:1.0		3.00	%		2.00	%		0.45	%
5	>5.25:1.0		3.25	%		2.25	%		0.50	%

Eurodollar Rate Loans with respect to the Existing TLB Facility bear interest at the Existing TLB Applicable Rate (as defined below) plus the Eurodollar Rate (subject to a floor of 0.75% and based upon the LIBOR Rate prior to commencement of the interest rate period). Base Rate Loans bear interest at the Existing TLB Applicable Rate plus the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate and (iii) the Eurodollar Rate plus 1.0%. As used herein, the term “Existing TLB Applicable Rate” means, with respect to Eurodollar Rate Loans, 3.0%, and with respect to Base Rate Loans, 2.0%. The New TLB Facility bears interest as follows: Eurodollar Rate Loans bear interest at the Applicable Rate (as defined in the Amended and Restated Credit Agreement) plus the Eurodollar Rate (subject to a floor of 0.75% and based upon the LIBOR Rate prior to commencement of the interest rate period) and Base Rate Loans bear interest at the Applicable Rate plus the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate and (iii) the Eurodollar Rate plus 1.0%. As used herein, the term “Applicable Rate” means, with respect to Eurodollar Rate Loans, 3.0%, and with respect to Base Rate Loans, 2.0%.

The lenders who provided the Existing TLB Facility and New TLB Facility are not entitled to benefit from the Company’s maintenance of its financial covenants under the Amended and Restated Credit Agreement. Accordingly, if we fail to maintain its financial covenants, such failure shall not constitute an event of default under the Amended and Restated Credit Agreement with respect to the Existing TLB Facility or the New TLB Facility until and unless the Amended and Restated Senior Credit Facility is accelerated or the commitment of the lenders to make further loans is terminated.

The Amended and Restated Credit Agreement requires us and our subsidiaries to comply with customary affirmative, negative and financial covenants, including a fixed charge coverage ratio, consolidated leverage ratio and consolidated senior secured leverage ratio. We may be required to pay all of our indebtedness immediately if we default on any of the numerous financial or other restrictive covenants contained in any of its material debt agreements. We may be required to pay all of our indebtedness immediately if we default on any of the numerous financial or other restrictive covenants contained in any of our material debt agreements. Set forth below is a brief description of such covenants, all of which are subject to customary exceptions, materiality thresholds and qualifications:

a) the affirmative covenants include the following: (i) delivery of financial statements and other customary financial information; (ii) notices of events of default and other material events; (iii) maintenance of existence, ability to conduct business, properties, insurance and books and records; (iv) payment of taxes; (v) lender inspection rights; (vi) compliance with laws; (vii) use of proceeds; (viii) further assurances; and (ix) additional collateral and guarantor requirements.

b) the negative covenants include limitations on the following: (i) liens; (ii) debt (including guaranties); (iii) investments; (iv) fundamental changes (including mergers, consolidations and liquidations); (v) dispositions; (vi) sale leasebacks; (vii) affiliate transactions; (viii) burdensome agreements; (ix) restricted payments; (x) use of proceeds; (xi) ownership of subsidiaries; (xii) changes to line of business; (xiii) changes to organizational documents, legal name, state of formation, form of entity and fiscal year; (xiv) prepayment or redemption of certain senior unsecured debt; and (xv) amendments to

41

certain material agreements. The Company is generally not permitted to issue dividends or distributions other than with respect to the following: (w) certain tax distributions; (x) the repurchase of equity held by employees, officers or directors upon the occurrence of death, disability or termination subject to cap of $500,000 in any fiscal year and compliance with certain other conditions; (y) in the form of capital stock; and (z) scheduled payments of deferred purchase price, working capital adjustments and similar payments pursuant to the merger agreement or any permitted acquisition.

c) The financial covenants include maintenance of the following:

• the fixed charge coverage ratio may not be less than 1.25:1.00 as of the end of any fiscal quarter;

• the total leverage ratio may not be greater than the following levels as of the end of each fiscal quarter listed below:

	March 31		June 30		September 30		December 31
2016		6.75x		6.75x		6.75x		6.25x
2017		6.00x		6.00x		6.00x		5.50x
2018		5.50x		5.50x		5.50x		5.00x

• the secured leverage ratio may not be greater than the following levels as of the end of each fiscal quarter listed below:

September 30, 2016	3.75x
December 31, 2016 and each fiscal quarter thereafter	3.50x

As of September 30, 2016, the Company was in compliance with all of the above covenants.

Senior Notes

6.125% Senior Notes Due 2021

On March 12, 2013, we issued $150.0 million of 6.125% Senior Notes due 2021. The 6.125% Senior Notes mature on March 15, 2021 and bear interest at a rate of 6.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year.

5.125% Senior Notes due 2022

On July 1, 2014, we issued $300.0 million of 5.125% Senior Notes due 2022. The 5.125% Senior Notes mature on July 1, 2022 and bear interest at a rate of 5.125% per annum, payable semi-annually in arrears on January 1 and July 1 of each year.

5.625% Senior Notes due 2023

On February 11, 2015, we issued $375.0 million of 5.625% Senior Notes due 2023. The 5.625% Senior Notes mature on February 15, 2023 and bear interest at a rate of 5.625% per annum, payable semi-annually in arrears on February 15 and August 15 of each year.

On September 21, 2015, we issued $275.0 million of additional 5.625% Senior Notes. The additional notes form a single class of debt securities with the existing 5.625% Senior Notes. Giving effect to this issuance, we have outstanding an aggregate of $650.0 million of 5.625% Senior Notes.

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6.500% Senior Notes due 2024

On February 16, 2016, we issued $390.0 million of 6.500% Senior Notes due 2024. The 6.500% Senior Notes mature on March 1, 2024 and bear interest at a rate of 6.500% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2016.

The indentures governing the Senior Notes contain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) engage in certain transactions with affiliates; (v) create restrictions on dividends or other payments by the restricted subsidiaries; (vi) merge, consolidate or sell substantially all of the Company’s assets; and (vii) create liens on assets.

The Senior Notes issued by the Company are guaranteed by each of the Company’s subsidiaries that guarantee the Company’s obligations under the Amended and Restated Senior Credit Facility. The guarantees are full and unconditional and joint and several.

The Company may redeem the Senior Notes at its option, in whole or part, at the dates and amounts set forth in the indentures.

9.0% and 9.5% Revenue Bonds

On November 11, 2012, in connection with the acquisition of Park Royal, we assumed debt of $23.0 million. The fair market value of the debt assumed was $25.6 million and resulted in a debt premium balance being recorded as of the acquisition date. The debt consisted of $7.5 million and $15.5 million of Lee County (Florida) Industrial Development Authority Healthcare Facilities Revenue Bonds, Series 2010 with stated interest rates of 9.0% and 9.5%, respectively. The 9.0% bonds in the amount of $7.5 million have a maturity date of December 1, 2030 and require yearly principal payments beginning in 2013. The 9.5% bonds in the amount of $15.5 million have a maturity date of December 1, 2040 and require yearly principal payments beginning in 2031. The principal payments establish a bond-sinking fund to be held with the trustee and shall be sufficient to redeem the principal amounts of the 9.0% and 9.5% Revenue Bonds on their respective maturity dates. As of September 30, 2016 and December 31, 2015, $2.3 million was recorded within other assets on the condensed consolidated balance sheets related to the debt service reserve fund requirements. The yearly principal payments, which establish a bond sinking fund, will increase the debt service reserve fund requirements. The bond premium amount of $2.6 million is amortized as a reduction of interest expense over the life of the 9.0% and 9.5% Revenue Bonds using the effective interest method.

Contractual Obligations

The following table presents a summary of contractual obligations as of September 30, 2016 (dollars in thousands):

	Payments Due by Period
	Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years		Total
Long-term debt (a)	$	244,186	$	884,649	$	466,252	$	3,116,145	$	4,711,232
Operating leases		67,788		115,351		99,942		801,249		1,084,330
Purchase and other obligations (b)		4,133		31,463		1,972		28,323		65,891
Total obligations and commitments	$	316,107	$	1,031,463	$	568,166	$	3,945,717	$	5,861,453

(a) Amounts include required principal and interest payments. The projected interest payments reflect an interest rates in place on our variable-rate debt as of September 30, 2016.

(b) Amounts relate to purchase obligations, including capital lease payments.

Off-Balance Sheet Arrangements

As of September 30, 2016, we had standby letters of credit outstanding of $8.4 million related to security for the payment of claims as required by our workers’ compensation insurance program.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our interest expense is sensitive to changes in market interest rates. With respect to our interest-bearing liabilities, our long-term debt outstanding at September 30, 2016 was composed of $1.5 billion of fixed-rate debt and $2.2 billion of variable-rate debt with interest based on LIBOR plus an applicable margin. A hypothetical 10% increase in interest rates would decrease our net income and cash flows by $5.2 million on an annual basis based upon our borrowing level at September 30, 2016.

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Foreign Currency Risk

The functional currency for our U.K. facilities is GBP. Our revenue and earnings are sensitive to changes in GBP to USD exchange rate from the translation of our earnings into USD at exchange rates that may fluctuate. Based upon the level of our U.K. operations relative to the Company as a whole, a hypothetical 10% change in this exchange rate would cause a change in our net income of $12.5 million for the nine months ended September 30, 2016. In May 2016, we entered into multiple cross currency swap agreements with an aggregate notional amount of $650.0 million to manage foreign currency exchange risk by effectively converting a portion of our fixed-rate USD denominated senior notes, including the semi-annual interest payments thereunder, to fixed-rate, GBP-denominated debt of £449.3 million. The cross currency swap agreements limit the impact of changes in the exchange rate on our cash flows and leverage. Following the Brexit vote, the GBP dropped to its lowest level against the USD in more than 30 years. If the exchange rate remains low, our results of operations will be negatively impacted in future periods.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, our management conducted an evaluation, with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended September 30, 2016 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are, from time to time, subject to various claims and legal actions that arise in the ordinary course of our business, including claims for damages for personal injuries, medical malpractice, breach of contract, tort and employment related claims. In these actions, plaintiffs request a variety of damages, including, in some instances, punitive and other types of damages that may not be covered by insurance. In the opinion of management, we are not currently a party to any proceeding that would have a material adverse effect on our business, financial condition or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this report, an investor should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and in Part II, “Item 1A. Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. The Company has updated and supplemented certain risk factors previously disclosed in its periodic reports filed with the Securities and Exchange Commission as set forth below. The risks described herein and those in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, are not the only risks facing the Company. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect the Company’s business, financial condition, operating results or cash flows.

An extended review of our acquisition of Priory by the Competition and Markets Authority (the “CMA”) in the U.K., including a potential phase 2 investigation, would delay our integration of Priory’s business. If we are unable to complete the planned divestiture of certain of our U.K. behavioral healthcare facilities and take other actions required by the CMA on acceptable terms and within expected timeframes, our business, financial condition and results of operations may be adversely affected.

We cannot determine when the CMA will complete its review of our acquisition of Priory and, until such review is complete, we will not be allowed to integrate Priory’s business. On October 18, 2016, we signed a definitive agreement with BC Partners for the sale of 21 existing U.K. behavioral health facilities and one de novo behavioral health facility with an aggregate of approximately 1,000 beds. We currently expect the CMA to approve such sale on or before November 18, 2016, however, the CMA may not approve the planned divestiture. Our business, financial condition and results of operations may suffer, and our expectations for the acquisition of Priory may not be met, if we are unable to integrate Priory’s business for an extended period as a result of the CMA’s ongoing review, including a potential phase 2 investigation, or if we are unable to complete the planned divestiture of certain of our U.K. behavioral healthcare facilities and take other actions required by the CMA on acceptable terms and within expected timeframes.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended September 30, 2016, the Company withheld shares of Company common stock to satisfy employee minimum statutory tax withholding obligations payable upon the vesting of restricted stock, as follows:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 – July 31		14,166	$	55.22		—		—
August 1 – August 31		2,778		54.66		—		—
September 1 – September 30		—		—		—		—
Total		16,944

Item 6. Exhibits

Exhibit No.	Exhibit Description
3.1	Amended and Restated Certificate of Incorporation, as filed on October 28, 2011 with the Secretary of State of the State of Delaware, as amended by the Certificate of Amendment filed on March 3, 2016. (1)
3.2	Amended and Restated Bylaws of Acadia Healthcare Company, Inc. (2)
10.1	Tranche B-2 Repricing Amendment, dated September 21, 2016, to the Amended and Restated Credit Agreement. (3)
31.1*	Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification of Chief Executive Officer and Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.CAL**	XBRL Taxonomy Calculation Linkbase Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**	XBRL Taxonomy Labels Linkbase Document.
101.PRE**	XBRL Taxonomy Presentation Linkbase Document.

(1) Incorporated by reference to exhibits filed with the Company’s Current Report on Form 8-K filed March 3, 2016 (File No. 001-35331).

(2) Incorporated by reference to exhibits filed with the Company’s Current Report on Form 8-K filed November 1, 2011 (File No. 001-35331).

(3) Incorporated by reference to exhibits filed with the Company’s Current Report on Form 8-K filed September 21, 2016 (File No. 001-35331).

* Filed herewith.

** The XBRL related information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

46

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Acadia Healthcare Company, Inc.
By:	/s/ David M. Duckworth
	David M. Duckworth
	Chief Financial Officer

Dated: November 2, 2016

47

EXHIBIT INDEX

Exhibit No.	Exhibit Description
3.1	Amended and Restated Certificate of Incorporation, as filed on October 28, 2011 with the Secretary of State of the State of Delaware, as amended by the Certificate of Amendment filed on March 3, 2016. (1)
3.2	Amended and Restated Bylaws of Acadia Healthcare Company, Inc. (2)
10.1	Tranche B-2 Repricing Amendment, dated September 21, 2016, to the Amended and Restated Credit Agreement. (3)
31.1*	Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification of Chief Executive Officer and Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.CAL**	XBRL Taxonomy Calculation Linkbase Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**	XBRL Taxonomy Labels Linkbase Document.
101.PRE**	XBRL Taxonomy Presentation Linkbase Document.

(1) Incorporated by reference to exhibits filed with the Company’s Current Report on Form 8-K filed March 3, 2016 (File No. 001-35331).

(2) Incorporated by reference to exhibits filed with the Company’s Current Report on Form 8-K filed November 1, 2011 (File No. 001-35331).

(3) Incorporated by reference to exhibits filed with the Company’s Current Report on Form 8-K filed September 21, 2016 (File No. 001-35331).

* Filed herewith.

** The XBRL related information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

48

EX-31.1

Exhibit 31.1

CERTIFICATION OF CEO PURSUANT TO

RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joey A. Jacobs, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Acadia Healthcare Company, Inc.;

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 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 U.S. 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 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: November 2, 2016

/s/ Joey A. Jacobs

Joey A. Jacobs

Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CFO PURSUANT TO

RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David M. Duckworth, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Acadia Healthcare Company, Inc.;

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 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 U.S. 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 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: November 2, 2016

/s/ David M. Duckworth

David M. Duckworth

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATIONS OF CEO AND CFO PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Acadia Healthcare Company, Inc. (the “Company”) for the quarterly period ended September 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joey A. Jacobs, Chief Executive Officer of the Company, and I, David M. Duckworth, Chief Financial Officer of the Company, each certify, for the purpose of complying with 18 U.S.C. Section 1350 and Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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

Date: November 2, 2016

/s/ Joey A. Jacobs

Joey A. Jacobs

Chairman of the Board and Chief Executive Officer

/s/ David M. Duckworth

David M. Duckworth

Chief Financial Officer

XML

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	Sep. 30, 2016	Nov. 02, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	ACHC
Entity Registrant Name	Acadia Healthcare Company, Inc.
Entity Central Index Key	0001520697
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		87,500,681

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 27,751	$ 11,215
Accounts receivable, net of allowance for doubtful accounts of $37,725 and $29,332, respectively	277,568	216,626
Other current assets	87,628	66,895
Total current assets	392,947	294,736
Property and equipment, net	2,786,646	1,709,053
Goodwill	2,702,009	2,128,215
Intangible assets, net	84,385	59,575
Deferred tax assets - noncurrent	3,791	49,114
Derivative instruments	49,903
Assets held for sale	392,483
Other assets	40,814	38,515
Total assets	6,452,978	4,279,208
Current liabilities:
Current portion of long-term debt	77,598	45,360
Accounts payable	92,819	91,341
Accrued salaries and benefits	105,308	80,696
Other accrued liabilities	104,513	72,806
Total current liabilities	380,238	290,203
Long-term debt	3,583,879	2,195,384
Deferred tax liabilities - noncurrent	81,443	23,936
Other liabilities	147,150	78,602
Total liabilities	4,192,710	2,588,125
Redeemable noncontrolling interests	18,147	8,055
Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued
Common stock, $0.01 par value; 180,000,000 and 90,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; 86,654,021 and 70,745,746 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	866	707
Additional paid-in capital	2,488,803	1,572,972
Accumulated other comprehensive loss	(425,869)	(104,647)
Retained earnings	178,321	213,996
Total equity	2,242,121	1,683,028
Total liabilities and equity	$ 6,452,978	$ 4,279,208

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Receivable, allowance for doubtful accounts	$ 37,725	$ 29,332
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	180,000,000	90,000,000
Common stock, shares issued	86,654,021	70,745,746
Common stock, shares outstanding	86,654,021	70,745,746

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenue before provision for doubtful accounts	$ 744,802	$ 488,746	$ 2,139,039	$ 1,324,702
Provision for doubtful accounts	(10,137)	(9,016)	(31,013)	(25,529)
Revenue	734,665	479,730	2,108,026	1,299,173
Salaries, wages and benefits (including equity-based compensation expense of $7,145, $5,327, $20,989 and $14,576, respectively)	408,242	258,410	1,157,557	707,583
Professional fees	47,687	30,759	137,970	83,215
Supplies	30,555	21,634	88,449	58,430
Rents and leases	19,740	8,542	55,013	22,639
Other operating expenses	79,748	57,244	230,950	148,899
Depreciation and amortization	36,418	16,890	101,145	44,920
Interest expense, net	48,843	27,737	135,315	77,932
Debt extinguishment costs	3,411	9,979	3,411	9,979
Loss on divestiture	174,739		174,739
(Gain) loss on foreign currency derivatives	(15)	1,018	(523)	1,926
Transaction-related expenses	1,111	5,842	33,483	31,415
Total expenses	850,479	438,055	2,117,509	1,186,938
(Loss) income from continuing operations before income taxes	(115,814)	41,675	(9,483)	112,235
Provision for income taxes	2,396	12,669	27,767	34,794
(Loss) income from continuing operations	(118,210)	29,006	(37,250)	77,441
Income from discontinued operations, net of income taxes		80		83
Net (loss) income	(118,210)	29,086	(37,250)	77,524
Net loss attributable to noncontrolling interests	402	464	1,575	464
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$ (117,808)	$ 29,550	$ (35,675)	$ 77,988
Basic earnings attributable to Acadia Healthcare Company, Inc. stockholders:
(Loss) income from continuing operations	$ (1.36)	$ 0.42	$ (0.42)	$ 1.16
Income from discontinued operations	0	0	0	0
Net (loss) income	(1.36)	0.42	(0.42)	1.16
Diluted earnings attributable to Acadia Healthcare Company, Inc. stockholders:
(Loss) income from continuing operations	(1.36)	0.42	(0.42)	1.15
Income from discontinued operations	0	0	0	0
Net (loss) income	$ (1.36)	$ 0.42	$ (0.42)	$ 1.15
Weighted-average shares outstanding:
Basic	86,618	70,664	85,376	67,194
Diluted	86,618	71,110	85,376	67,539

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Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Equity-based compensation expense	$ 7,145	$ 5,327	$ 20,989	$ 14,576

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Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (118,210)	$ 29,086	$ (37,250)	$ 77,524
Other comprehensive (loss) income:
Foreign currency translation loss	(89,645)	(32,707)	(351,528)	(15,923)
Gain on derivative instruments, net of tax of $3,613, $0, $20,153 and $0, respectively	6,387		30,306
Other comprehensive loss	(83,258)	(32,707)	(321,222)	(15,923)
Comprehensive (loss) income	(201,468)	(3,621)	(358,472)	61,601
Comprehensive loss attributable to noncontrolling interests	402	464	1,575	464
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$ (201,066)	$ (3,157)	$ (356,897)	$ 62,065

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Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Gain on derivative instruments, tax	$ 3,613	$ 0	$ 20,153	$ 0

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Condensed Consolidated Statement of Equity (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Other Comprehensive Loss [Member]	Retained Earnings [Member]
Balance at Dec. 31, 2015	$ 1,683,028	$ 707	$ 1,572,972	$ (104,647)	$ 213,996
Balance, shares at Dec. 31, 2015	70,745,746	70,746,000
Common stock issued under stock incentive plans	$ 1,353	$ 4	1,349
Common stock issued under stock incentive plans, shares	55,808	374,000
Common stock withheld for minimum statutory taxes	$ (9,270)		(9,270)
Equity-based compensation expense	20,989		20,989
Issuance of common stock, net	901,979	$ 155	901,824
Issuance of common stock, net, shares		15,534,000
Other comprehensive loss	(321,222)			(321,222)
Other	939		939
Net loss	(35,675)				(35,675)
Balance at Sep. 30, 2016	$ 2,242,121	$ 866	$ 2,488,803	$ (425,869)	$ 178,321
Balance, shares at Sep. 30, 2016	86,654,021	86,654,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net (loss) income	$ (37,250)	$ 77,524
Adjustments to reconcile net (loss) income to net cash provided by continuing operating activities:
Depreciation and amortization	101,145	44,920
Amortization of debt issuance costs	7,714	5,017
Equity-based compensation expense	20,989	14,576
Deferred income tax expense	25,857	28,925
Income from discontinued operations, net of taxes		(83)
Debt extinguishment costs	3,411	9,979
Loss on divestiture	174,739
(Gain) loss on foreign currency derivatives	(523)	1,926
Other	731	1,122
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net	(12,579)	(28,905)
Other current assets	(12,973)	(12,201)
Other assets	(1,134)	(4,879)
Accounts payable and other accrued liabilities	2,067	(8,316)
Accrued salaries and benefits	(10,759)	8,888
Other liabilities	3,746	5,071
Net cash provided by continuing operating activities	265,181	143,564
Net cash used in discontinued operating activities	(5,524)	(1,479)
Net cash provided by operating activities	259,657	142,085
Investing activities:
Cash paid for acquisitions, net of cash acquired	(683,285)	(391,216)
Cash paid for capital expenditures	(249,961)	(200,841)
Cash paid for real estate acquisitions	(37,947)	(21,976)
Settlement of foreign currency derivatives	523	(1,926)
Other	(1,135)	(887)
Net cash used in investing activities	(971,805)	(616,846)
Financing activities:
Borrowings on long-term debt	1,480,000	1,150,000
Borrowings on revolving credit facility	179,000	310,000
Principal payments on revolving credit facility	(166,000)	(310,000)
Principal payments on long-term debt	(46,069)	(23,813)
Repayment of assumed debt	(1,348,389)	(904,467)
Repayment of senior notes		(88,331)
Payment of debt issuance costs	(35,748)	(25,584)
Payment of premium on senior notes		(6,890)
Issuance of common stock, net	685,097	331,360
Common stock withheld for minimum statutory taxes, net	(7,917)	(7,582)
Excess tax benefit from equity awards		8,020
Other	(1,821)	(374)
Net cash provided by financing activities	738,153	432,339
Effect of exchange rate changes on cash	(9,469)	(856)
Net increase (decrease) in cash and cash equivalents	16,536	(43,278)
Cash and cash equivalents at beginning of the period	11,215	94,040
Cash and cash equivalents at end of the period	27,751	50,762
Effect of acquisitions:
Assets acquired, excluding cash	2,505,407	1,793,139
Liabilities assumed	(1,605,240)	(1,012,549)
Issuance of common stock in connection with acquisition	(216,882)	(380,210)
Deposits paid for acquisitions		(9,164)
Cash paid for acquisitions, net of cash acquired	$ 683,285	$ 391,216

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Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

1. Description of Business and Basis of Presentation

Description of Business

Acadia Healthcare Company, Inc. (the “Company”) develops and operates inpatient psychiatric facilities, residential treatment centers, group homes, substance abuse facilities and facilities providing outpatient behavioral healthcare services to serve the behavioral health and recovery needs of communities throughout the United States (U.S.), the United Kingdom (U.K.) and Puerto Rico. At September 30, 2016, the Company operated 589 behavioral healthcare facilities with approximately 17,900 beds in 39 states, the U.K. and Puerto Rico.

Basis of Presentation

The business of the Company is conducted through limited liability companies, C-corporations and, for the U.K. facilities, their foreign counterparts. The Company’s consolidated financial statements include the accounts of the Company and all subsidiaries controlled by the Company through its’ direct or indirect ownership of majority interests and exclusive rights granted to the Company as the controlling member of an entity. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of our financial position and results of operations have been included. The Company’s fiscal year ends on December 31 and interim results are not necessarily indicative of results for a full year or any other interim period. The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited financial statements as of that date. The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2016. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Certain reclassifications have been made to prior years to conform to the current year presentation.

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Earnings Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

2. Earnings Per Share

Basic and diluted earnings per share are calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 260, “Earnings Per Share,” based on the weighted-average number of shares outstanding in each period and dilutive stock options, unvested shares and warrants, to the extent such securities have a dilutive effect on earnings per share.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share amounts):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Numerator:
Basic and diluted earnings per share attributable to Acadia Healthcare Company, Inc.:
(Loss) income from continuing operations	$	(117,808	)	$	29,470	$	(35,675	)	$	77,905
Income from discontinued operations		—			80		—			83
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(117,808	)	$	29,550	$	(35,675	)	$	77,988
Denominator:
Weighted average shares outstanding for basic earnings per share		86,618			70,664		85,376			67,194
Effect of dilutive instruments		—			446		—			345
Shares used in computing diluted earnings per common share		86,618			71,110		85,376			67,539
Basic earnings per share:
(Loss) income from continuing operations	$	(1.36	)	$	0.42	$	(0.42	)	$	1.16
Income from discontinued operations		—			—		—			—
Net (loss) income	$	(1.36	)	$	0.42	$	(0.42	)	$	1.16
Diluted earnings per share:
(Loss) income from continuing operations	$	(1.36	)	$	0.42	$	(0.42	)	$	1.15
Income from discontinued operations		—			—		—			—
Net (loss) income	$	(1.36	)	$	0.42	$	(0.42	)	$	1.15

For the three and nine months ended September 30, 2016, approximately 0.2 million and 0.3 million, respectively, of the outstanding restricted stock and shares of common stock issuable upon exercise of outstanding stock option awards have been excluded from the calculation of diluted earnings per share because the net loss for the three and nine months ended September 30, 2016 causes such securities to be anti-dilutive. Approximately 0.3 million and 0.9 million shares of common stock issuable upon exercise of outstanding stock option awards were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2015, respectively, because their effect would have been anti-dilutive.

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Acquisitions

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Acquisitions

3. Acquisitions

2016 U.S. Acquisitions

On June 1, 2016, the Company completed the acquisition of Pocono Mountain Recovery Center (“Pocono Mountain”), an inpatient psychiatric facility with 108 beds located in Henryville, Pennsylvania, for total consideration of approximately $25.2 million. The Company may make a cash payment of up to $5.0 million under an earn-out agreement, contingent upon achievement by Pocono Mountain of certain operating performance targets for the one-year period ending May 31, 2017.

On May 1, 2016, the Company completed the acquisition of TrustPoint Hospital (“TrustPoint”), an inpatient psychiatric facility with 100 beds located in Murfreesboro, Tennessee, for cash consideration of approximately $62.7 million.

On April 1, 2016, the Company completed the acquisition of Serenity Knolls (“Serenity Knolls”), an inpatient psychiatric facility with 30 beds located in Forrest Knolls, California, for cash consideration of approximately $9.7 million.

Priory

On February 16, 2016, the Company completed the acquisition of Priory Group No. 1 Limited (“Priory”) for a total purchase price of approximately $2.2 billion, including total cash consideration of approximately $1.9 billion and the issuance of 4,033,561 shares of its common stock. Priory is the leading independent provider of behavioral healthcare services in the U.K. At February 16, 2016, Priory operated 324 facilities with approximately 7,100 beds.

Planned U.K. Divestiture

The Competition and Markets Authority (the “CMA”) in the U.K. has been reviewing the Company’s acquisition of Priory. On July 14, 2016, the CMA announced that the Company’s acquisition of Priory will be referred for a phase 2 investigation unless the Company offered acceptable undertakings to address the CMA’s competition concerns relating to the provision of behavioral healthcare services in certain markets. On July 28, 2016, the CMA announced that the Company had offered undertakings to address the CMA’s concerns and that, in lieu of a phase 2 investigation, the CMA would consider the Company’s undertakings.

On October 18, 2016, the Company signed a definitive agreement with BC Partners (“BC Partners”) for the sale of 21 existing U.K. behavioral health facilities and one de novo behavioral health facility with an aggregate of approximately 1,000 beds (collectively, the “U.K. Disposal Group”). The Company’s management believes that the planned divestiture addresses the CMA’s competition concerns. The Company expects the sale to be approved by the CMA on or before November 18, 2016 and expects to complete the sale shortly thereafter. If the sale is approved by the CMA and completed, the Company will receive £320 million cash for the sale. If the sale is not approved by the CMA, the Company expects that the CMA will proceed with a phase 2 investigation.

In conjunction with the planned divestiture, the Company recorded $389.7 million as assets held for sale on the condensed consolidated balance sheet at September 30, 2016 and a loss on divestiture of $174.7 million in the condensed consolidated statements of operations for the three and nine months ended September 30, 2016. The loss on divestiture consisted of an allocation of goodwill to the U.K. Disposal Group of $106.9 million, estimated transaction-related expenses of $25.6 million and loss on the sale of properties of $42.2 million. The Company is required to measure assets held for sale at the lower of its carrying value or fair value less cost to sell. The allocation of goodwill was based on the fair value of the U.K. Disposal Group relative to the total fair value of the Company’s U.K. Facilities segment.

The condensed consolidated statements of operations for the three and nine months ended September 30, 2016 include revenue of $45.6 million and $125.1 million, respectively, and income from continuing operations before income taxes of $3.2 million and $12.2 million, respectively, related to the U.K. Disposal Group excluding the loss on divestiture. The condensed consolidated statements of operations for the three and nine months ended September 30, 2015 include revenue of $16.6 million and $42.1 million, respectively, and income from continuing operations before income taxes of $4.6 million and $12.4 million, respectively, related to the U.K. Disposal Group.

2015 U.S. Acquisitions

On December 1, 2015, the Company completed the acquisition of certain facilities from MMO Behavioral Health Systems (“MMO”), including two acute inpatient behavioral health facilities with a total of 80 beds located in Jennings and Covington, Louisiana, for cash consideration of approximately $20.2 million.

On November 1, 2015, the Company completed the acquisitions of (i) Discovery House-Group Inc. (“Discovery House”) for cash consideration of approximately $118.3 million and (ii) Duffy’s Napa Valley Rehab (“Duffy’s”) for cash consideration of approximately $29.6 million. Discovery House operates 19 comprehensive treatment centers located in four states. Duffy’s is a substance abuse facility with 61 beds located in Calistoga, California.

On August 31, 2015, the Company completed the acquisition of a controlling interest in Southcoast Behavioral (“Southcoast”), an inpatient psychiatric facility located in Fairhaven, Massachusetts. The Company owns 75% of the equity interests in the facility. The value of the 25% noncontrolling interest approximates $9.2 million.

On July 1, 2015, the Company completed the acquisition of the assets of Belmont Behavioral Health (“Belmont”), an inpatient psychiatric facility with 147 beds located in Philadelphia, Pennsylvania for cash consideration of approximately $39.0 million which consists of $35.0 million base purchase price and a working capital settlement of $4.0 million.

On March 1, 2015, the Company acquired the stock of Quality Addiction Management, Inc. (“QAM”) for cash consideration of approximately $54.8 million. QAM operates seven comprehensive treatment centers located in Wisconsin.

On February 11, 2015, the Company completed its acquisition of CRC Health Group, Inc. (“CRC”) for total consideration of approximately $1.3 billion. As consideration for the acquisition, the Company issued 5,975,326 shares of its common stock to certain holders of CRC common stock and repaid CRC’s outstanding indebtedness of $904.5 million. CRC is a leading provider of treatment services related to substance abuse and other addiction and behavioral disorders. At the acquisition date, CRC operated 35 inpatient facilities with over 2,400 beds and 81 comprehensive treatment centers located in 30 states.

2015 U.K. Acquisitions

On November 1, 2015, the Company completed the acquisition of Cleveland House (“Cleveland House”), an inpatient psychiatric facility with 32 beds located in England, for cash consideration of approximately $10.3 million.

On October 1, 2015, the Company completed the acquisition of Meadow View (“Meadow View”), an inpatient psychiatric facility with 28 beds located in England, for cash consideration of approximately $6.8 million.

On September 1, 2015, the Company completed the acquisitions of (i) three facilities from The Danshell Group (“Danshell”) for approximately $59.8 million, (ii) two facilities from Health and Social Care Partnerships (“H&SCP”) for approximately $26.2 million and (iii) Manor Hall (“Manor Hall”) for approximately $14.0 million. The inpatient psychiatric facilities acquired from Danshell have an aggregate of 73 beds and are located in England. The inpatient psychiatric facilities acquired from H&SCP have an aggregate of 50 beds and are located in England. Manor Hall has 26 beds and is located in England.

On July 1, 2015, the Company completed the acquisition of The Manor Clinic (“Manor Clinic”), a substance abuse facility with 15 beds located in England, for cash consideration of approximately $5.9 million.

On June 1, 2015, the Company completed the acquisitions of (i) one facility from Choice Lifestyles (“Choice”) for cash consideration of approximately $25.9 million and (ii) 15 facilities from Care UK Limited (“Care UK”) for approximately $88.2 million. The inpatient psychiatric facility acquired from Choice has 42 beds and is located in England. The inpatient psychiatric facilities acquired from Care UK have an aggregate of 299 beds and are located in England.

On April 1, 2015, the Company completed the acquisitions of (i) two facilities from Choice for cash consideration of approximately $37.5 million, (ii) Pastoral Care Group (“Pastoral”) for approximately $34.2 million and (iii) Mildmay Oaks f/k/a Vista Independent Hospital (“Mildmay Oaks”) for cash consideration of approximately $14.9 million. The two inpatient psychiatric facilities acquired from Choice have an aggregate of 48 beds and are located in England. Pastoral operates two inpatient psychiatric facilities with an aggregate of 65 beds located in Wales. Mildmay Oaks is an inpatient psychiatric facility with 67 beds located in England.

Summary of Acquisitions

The Company selectively seeks opportunities to expand and diversify its base of operations by acquiring additional facilities. Approximately $374.4 million of the goodwill associated with domestic acquisitions completed in 2016 and 2015 is deductible for federal income tax purposes. The fair values assigned to certain assets and liabilities assumed by the Company have been estimated on a preliminary basis and are subject to change as new facts and circumstances emerge that were present at the date of acquisition. Specifically, the Company is further assessing the valuation of certain real property and intangible assets and certain tax matters as well as certain receivables and assumed liabilities of Pocono Mountain, TrustPoint, Serenity Knolls, Priory, MMO, Discovery House, Duffy’s, Cleveland House and Meadow View.

The preliminary fair values of assets acquired and liabilities assumed, at the corresponding acquisition dates, during the nine months ended September 30, 2016 in connection with the 2016 acquisitions were as follows (in thousands):

	Priory		Other		Total
Cash	$	10,253	$	2,488	$	12,741
Accounts receivable		57,832		4,289		62,121
Prepaid expenses and other current assets		7,921		143		8,064
Property and equipment(1)		1,603,306		35,400		1,638,706
Goodwill(1)		669,965		95,206		765,171
Intangible assets		23,200		338		23,538
Other assets		7,760		47		7,807
Total assets acquired		2,380,237		137,911		2,518,148
Accounts payable		24,203		805		25,008
Accrued salaries and benefits		39,588		797		40,385
Other accrued expenses		48,066		390		48,456
Deferred tax liabilities – noncurrent		67,598		—		67,598
Long-term debt		1,348,389		—		1,348,389
Other liabilities		45,162		30,242		75,404
Total liabilities assumed		1,573,006		32,234		1,605,240
Net assets acquired	$	807,231	$	105,677	$	912,908

⁽¹⁾  Priory fair values of property and equipment and goodwill do not reflect adjustments for the planned divestiture of the U.K. Disposal Group as the divestiture was not anticipated at the acquisition date.

The preliminary fair values of assets acquired and liabilities assumed, at the corresponding acquisition dates, during the year ended December 31, 2015 in connection with the 2015 acquisitions were as follows (in thousands):

	CRC		Other		Total
Cash	$	19,599	$	5,334	$	24,933
Accounts receivable		47,035		21,264		68,299
Prepaid expenses and other current assets		26,945		2,555		29,500
Property and equipment		136,163		273,143		409,306
Goodwill		1,043,601		320,464		1,364,065
Intangible assets		37,000		204		37,204
Deferred tax assets-noncurrent		74,383		—		74,383
Other assets		6,478		51		6,529
Total assets acquired		1,391,204		623,015		2,014,219
Accounts payable		4,741		4,961		9,702
Accrued salaries and benefits		14,827		3,200		18,027
Other accrued expenses		38,873		5,047		43,920
Deferred tax liabilities – noncurrent		—		13,541		13,541
Debt		904,467		—		904,467
Other liabilities		34,720		10		34,730
Total liabilities assumed		997,628		26,759		1,024,387
Redeemable noncontrolling interests		—		9,132		9,132
Net assets acquired	$	393,576	$	587,124	$	980,700

Other

The qualitative factors comprising the goodwill acquired in the CRC, QAM, Choice, Pastoral, Mildmay Oaks, Care UK, The Manor Clinic, Belmont, Southcoast, Danshell, H&SCP, Manor Hall, Meadow View, Cleveland House, Duffy’s, Discovery House, MMO, Priory, Serenity Knolls, TrustPoint and Pocono Mountain acquisitions (collectively the “2015 and 2016 Acquisitions”) include efficiencies derived through synergies expected by the elimination of certain redundant corporate functions and expenses, the ability to leverage call center referrals to a broader provider base, coordination of services provided across the combined network of facilities, achievement of operating efficiencies by benchmarking performance, and applying best practices throughout the combined companies.

Transaction-related expenses comprised the following costs for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Legal, accounting and other costs	$	1,111	$	5,261	$	17,212	$	14,315
Advisory and financing commitment fees		—		—		14,850		10,337
Severance and contract termination costs		—		581		1,421		6,763
	$	1,111	$	5,842	$	33,483	$	31,415

Pro Forma Information

The condensed consolidated statements of operations for the three and nine months ended September 30, 2016 include revenue of $412.9 million and $1.1 billion, respectively, and loss from continuing operations before income taxes of $114.3 million and $68.5 million, respectively, related to the 2015 and 2016 Acquisitions. The condensed consolidated statements of operations for the three and nine months ended September 30, 2015 include revenue of $165.8 million and $375.6 million, respectively, and income from continuing operations before income taxes of $38.7 million and $156.6 million, respectively, related to acquisitions completed in 2015.

The following table provides certain pro forma financial information for the Company as if the 2015 and 2016 Acquisitions occurred as of January 1, 2015 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Revenue	$	734,665		$	737,263	$	2,232,285		$	2,185,600
(Loss) income from continuing operations, before income taxes	$	(115,814	)	$	39,130	$	(27,529	)	$	110,559

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Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Other Intangible Assets

4. Other Intangible Assets

Other identifiable intangible assets and related accumulated amortization consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	Gross Carrying Amount				Accumulated Amortization
	September 30, 2016		December 31, 2015		September 30, 2016			December 31, 2015
Intangible assets subject to amortization:
Contract intangible assets	$	2,100	$	2,100	$	(2,065	)	$	(1,750	)
Non-compete agreements		1,247		1,247		(1,247	)		(1,247	)
		3,347		3,347		(3,312	)		(2,997	)
Intangible assets not subject to amortization:
Licenses and accreditations		12,382		11,479		—			—
Trade names		58,551		37,800		—			—
Certificates of need		13,417		9,946		—			—
		84,350		59,225		—			—
Total	$	87,697	$	62,572	$	(3,312	)	$	(2,997	)

Amortization expense related to definite-lived intangible assets was $0.1 million for both the three months ended September 30, 2016 and 2015, respectively, and $0.3 million and $0.4 million for the nine months ended September 30, 2016 and 2015, respectively. Estimated amortization expense for the years ending December 31, 2016, 2017, 2018, 2019 and 2020 is $0.4 million, $0, $0, $0 and $0, respectively. The Company’s licenses and accreditations, trade names and certificate of need intangible assets have indefinite lives and are, therefore, not subject to amortization.

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Property and Equipment

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment

5. Property and Equipment

Property and equipment consists of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016			December 31, 2015
Land	$	430,179		$	214,138
Building and improvements		2,081,246			1,277,800
Equipment		320,234			141,543
Construction in progress		146,070			195,042
		2,977,729			1,828,523
Less accumulated depreciation		(191,083	)		(119,470	)
Property and equipment, net	$	2,786,646		$	1,709,053

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Long-Term Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Long-Term Debt

6. Long-Term Debt

Long-term debt consisted of the following (in thousands):

	September 30, 2016			December 31, 2015
Amended and Restated Senior Credit Facility:
Senior Secured Term A Loans	$	600,594		$	500,750
Senior Secured Term B Loans		1,439,088			495,000
Senior Secured Revolving Line of Credit		171,000			158,000
6.125% Senior Notes due 2021		150,000			150,000
5.125% Senior Notes due 2022		300,000			300,000
5.625% Senior Notes due 2023		650,000			650,000
6.500% Senior Notes due 2024		390,000			—
9.0% and 9.5% Revenue Bonds		22,410			22,410
Less: unamortized debt issuance costs, discount and premium		(61,615	)		(35,416	)
		3,661,477			2,240,744
Less: current portion		(77,598	)		(45,360	)
Long-term debt	$	3,583,879		$	2,195,384

Amended and Restated Senior Credit Facility

The Company entered into a senior secured credit facility (the “Senior Secured Credit Facility”) on April 1, 2011. On December 31, 2012, the Company entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) which amended and restated the Senior Secured Credit Facility (the “Amended and Restated Senior Credit Facility”). The Company has amended the Amended and Restated Credit Agreement from time to time as described in the Company’s prior filings with the Securities and Exchange Commission.

On February 6, 2015, the Company entered into a Seventh Amendment (the “Seventh Amendment”) to the Amended and Restated Credit Agreement. The Seventh Amendment added Citibank, N.A. as an “L/C Issuer” under the Amended and Restated Credit Agreement in order to permit the rollover of CRC’s existing letters of credit into the Amended and Restated Credit Agreement and increased both the Company’s Letter of Credit Sublimit and Swing Line Sublimit to $20.0 million.

On February 11, 2015, the Company entered into a First Incremental Facility Amendment (the “First Incremental Amendment”) to the Amended and Restated Credit Agreement. The First Incremental Amendment activated a new $500.0 million incremental Term Loan B facility (the “Existing TLB Facility”) that was added to the Amended and Restated Senior Credit Facility, subject to limited conditionality provisions. Borrowings under the Existing TLB Facility were used to fund a portion of the purchase price for the acquisition of CRC.

On April 22, 2015, the Company entered into an Eighth Amendment (the “Eighth Amendment”) to the Amended and Restated Credit Agreement. The Eighth Amendment changed the definition of “Change of Control” in part to remove a provision whose purpose was, when calculating whether a majority of incumbent directors have approved new directors, that any incumbent director that became a director as a result of a threatened or actual proxy contest was not counted in such calculation.

On January 25, 2016, the Company entered into the Ninth Amendment (the “Ninth Amendment”) to the Amended and Restated Credit Agreement. The Ninth Amendment modifies certain definitions and provides increased flexibility to the Company in terms of its financial covenants. The Company’s baskets for permitted investments were also increased to provide increased flexibility for it to invest in non-wholly owned subsidiaries, joint ventures and foreign subsidiaries. The Company may now invest in non-wholly owned subsidiaries and joint ventures up to 10.0% of the Company and its subsidiaries’ total assets in any four consecutive fiscal quarter period, and up to 12.5% of the Company and its subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. The Company may also invest in foreign subsidiaries that are not loan parties up to 10% of the Company and its subsidiaries’ total assets in any consecutive four fiscal quarter period, and up to 15% of the Company and its subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. The foregoing permitted investments are subject to an aggregate cap of 25% of the Company and its subsidiaries’ total assets in any fiscal year.

On February 16, 2016, the Company entered into a Second Incremental Facility Amendment (the “Second Incremental Amendment”) to the Amended and Restated Credit Agreement. The Second Incremental Amendment activated a new $955.0 million incremental Term Loan B facility (the “New TLB Facility”) and added $135.0 million to the Term Loan A facility (the “TLA Facility”) to the Amended and Restated Senior Credit Facility, subject to limited conditionality provisions. Borrowings under the New TLB Facility were used to fund a portion of the purchase price for the acquisition of Priory and the fees and expenses for such acquisition and the related financing transactions. Borrowings under the TLA Facility were used to pay down the majority of our $300.0 million revolving credit facility.

On May 26, 2016, the Company entered into a Tranche B-1 Repricing Amendment (the “Tranche B-1 Repricing Amendment”) to the Amended and Restated Credit Agreement. The Tranche B-1 Repricing Amendment reduces the Applicable Rate with respect to the Existing TLB Facility from 3.5% to 3.0% in the case of Eurodollar Rate loans and 2.5% to 2.0% in the case of Base Rate Loans.

On September 21, 2016, the Company entered into a Tranche B-2 Repricing Amendment (the “Tranche B-2 Repricing Amendment”) to the Amended and Restated Credit Agreement. The Tranche B-2 Repricing Amendment reduces the Applicable Rate with respect to the New TLB Facility from 3.75% to 3.0% in the case of Eurodollar Rate loans and 2.75% to 2.0% in the case of Base Rate Loans. In connection with the Tranche B-2 Repricing Amendment, the Company recorded a debt extinguishment charge of $3.4 million, including the discount and write-off of deferred financing costs, which was recorded in debt extinguishment costs in the condensed consolidated statements of income.

The Company had $120.6 million of availability under the revolving line of credit as of September 30, 2016. Borrowings under the revolving line of credit are subject to customary conditions precedent to borrowing. The Amended and Restated Credit Agreement requires quarterly term loan principal repayments of our TLA Facility of $12.6 million for September 30, 2016 to December 31, 2016, $16.8 million for March 31, 2017 to December 31, 2017, and $20.9 million for March 31, 2018 to December 31, 2018, with the remaining principal balance of the TLA Facility due on the maturity date of February 13, 2019. The Company is required to repay the Existing TLB Facility in equal quarterly installments of $1.3 million on the last business day of each March, June, September and December, with the outstanding principal balance of the Existing TLB Facility due on February 11, 2022. The Company is required to repay the New TLB Facility in equal quarterly installments of approximately $2.4 million on the last business day of each March, June, September and December, with the outstanding principal balance of the TLB Facility due on February 16, 2023.

Borrowings under the Amended and Restated Senior Credit Facility are guaranteed by each of the Company’s wholly-owned domestic subsidiaries (other than certain excluded subsidiaries) and are secured by a lien on substantially all of the assets of the Company and such subsidiaries. Borrowings with respect to the TLA Facility and the Company’s revolving credit facility (collectively, “Pro Rata Facilities”) under the Amended and Restated Credit Agreement bear interest at a rate tied to Acadia’s Consolidated Leverage Ratio (defined as consolidated funded debt net of up to $40.0 million of unrestricted and unencumbered cash to consolidated EBITDA, in each case as defined in the Amended and Restated Credit Agreement). The Applicable Rate (as defined in the Amended and Restated Credit Agreement) for the Pro Rata Facilities was 3.25% for Eurodollar Rate Loans (as defined in the Amended and Restated Credit Agreement) and 2.25% for Base Rate Loans (as defined in the Amended and Restated Credit Agreement) at September 30, 2016. Eurodollar Rate Loans with respect to the Pro Rata Facilities bear interest at the Applicable Rate plus the Eurodollar Rate (as defined in the Amended and Restated Credit Agreement) (based upon the LIBOR Rate (as defined in the Amended and Restated Credit Agreement) prior to commencement of the interest rate period). Base Rate Loans with respect to the Pro Rata Facilities bear interest at the Applicable Rate plus the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate and (iii) the Eurodollar Rate plus 1.0%. As of September 30, 2016, the Pro Rata Facilities bore interest at a rate of LIBOR plus 3.25%. In addition, the Company is required to pay a commitment fee on undrawn amounts under the revolving line of credit.

The Amended and Restated Credit Agreement requires the Company and its subsidiaries to comply with customary affirmative, negative and financial covenants, including a fixed charge coverage ratio, consolidated leverage ratio and senior secured leverage ratio. The Company may be required to pay all of its indebtedness immediately if it defaults on any of the numerous financial or other restrictive covenants contained in any of its material debt agreements. As of September 30, 2016, the Company was in compliance with such covenants.

Senior Notes

6.125% Senior Notes due 2021

On March 12, 2013, the Company issued $150.0 million of 6.125% Senior Notes due 2021 (the “6.125% Senior Notes”). The 6.125% Senior Notes mature on March 15, 2021 and bear interest at a rate of 6.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year.

5.125% Senior Notes due 2022

On July 1, 2014, the Company issued $300.0 million of 5.125% Senior Notes due 2022 (the “5.125% Senior Notes”). The 5.125% Senior Notes mature on July 1, 2022 and bear interest at a rate of 5.125% per annum, payable semi-annually in arrears on January 1 and July 1 of each year.

5.625% Senior Notes due 2023

On February 11, 2015, the Company issued $375.0 million of 5.625% Senior Notes due 2023 (the “5.625% Senior Notes”). The 5.625% Senior Notes mature on February 15, 2023 and bear interest at a rate of 5.625% per annum, payable semi-annually in arrears on February 15 and August 15 of each year.

On September 21, 2015, the Company issued $275.0 million of additional 5.625% Senior Notes. The additional notes form a single class of debt securities with the existing 5.625% Senior Notes. Giving effect to this issuance, the Company has outstanding an aggregate of $650.0 million of 5.625% Senior Notes.

6.500% Senior Notes due 2024

On February 16, 2016, the Company issued $390.0 million of 6.500% Senior Notes due 2024 (the “6.500% Senior Notes”). The 6.500% Senior Notes mature on March 1, 2024 and bear interest at a rate of 6.500% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2016.

The indentures governing the 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes and 6.500% Senior Notes (together, the “Senior Notes”) contain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) engage in certain transactions with affiliates; (v) create restrictions on dividends or other payments by the restricted subsidiaries; (vi) merge, consolidate or sell substantially all of the Company’s assets; and (vii) create liens on assets.

The Senior Notes issued by the Company are guaranteed by each of the Company’s subsidiaries that guarantee the Company’s obligations under the Amended and Restated Senior Credit Facility. The guarantees are full and unconditional and joint and several.

The Company may redeem the Senior Notes at its option, in whole or part, at the dates and amounts set forth in the indentures.

9.0% and 9.5% Revenue Bonds

On November 11, 2012, in connection with the acquisition of Park Royal, the Company assumed debt of $23.0 million. The fair market value of the debt assumed was $25.6 million and resulted in a debt premium balance being recorded as of the acquisition date. The debt consisted of $7.5 million and $15.5 million of Lee County (Florida) Industrial Development Authority Healthcare Facilities Revenue Bonds, Series 2010 with stated interest rates of 9.0% and 9.5% (“9.0% and 9.5% Revenue Bonds”), respectively. The 9.0% bonds in the amount of $7.5 million have a maturity date of December 1, 2030 and require yearly principal payments beginning in 2013. The 9.5% bonds in the amount of $15.5 million have a maturity date of December 1, 2040 and require yearly principal payments beginning in 2031. The principal payments establish a bond sinking fund to be held with the trustee and shall be sufficient to redeem the principal amounts of the 9.0% and 9.5% Revenue Bonds on their respective maturity dates. As of September 30, 2016 and December 31, 2015, $2.3 million was recorded within other assets on the condensed consolidated balance sheets related to the debt service reserve fund requirements. The yearly principal payments, which establish a bond sinking fund, will increase the debt service reserve fund requirements. The bond premium amount of $2.6 million is amortized as a reduction of interest expense over the life of the revenue bonds using the effective interest method.

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Equity Offerings

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Equity Offerings

7. Equity Offerings

Common Stock

On March 3, 2016, the Company held a Special Meeting of Stockholders, where the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 90,000,000 to 180,000,000 (the “Amendment”). On March 3, 2016, the Company filed the Amendment with the Secretary of State of the State of Delaware.

Equity Offerings

On February 11, 2015, the Company completed its acquisition of CRC for total consideration of approximately $1.3 billion. As consideration for the acquisition, the Company issued 5,975,326 shares of its common stock to certain holders of CRC common stock and repaid CRC’s outstanding indebtedness.

On May 11, 2015, the Company completed the offering of 5,175,000 shares of common stock (including shares sold pursuant to the exercise of the over-allotment option that the Company granted to the underwriters as part of the offering) at a price of $66.50 per share. The net proceeds to the Company from the sale of the shares, after deducting the underwriting discount of $12.0 million and additional offering-related costs of $0.8 million, were $331.3 million. The Company used the net offering proceeds to repay outstanding indebtedness and fund acquisitions.

On January 12, 2016, the Company completed the offering of 11,500,000 shares of common stock (including shares sold pursuant to the exercise of the over-allotment option that the Company granted to the underwriters as part of the offering) at a price of $61.00 per share. The net proceeds to the Company from the sale of the shares, after deducting the underwriting discount of $15.8 million and additional offering-related costs of $0.7 million, were $685.0 million. The Company used the net offering proceeds to fund a portion of the purchase price for the acquisition of Priory.

On February 16, 2016, the Company completed its acquisition of Priory, which included the issuance of 4,033,561 shares of common stock to the former stockholders of Priory.

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Equity-Based Compensation

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

8. Equity-Based Compensation

Equity Incentive Plans

The Company issues stock-based awards, including stock options, restricted stock and restricted stock units, to certain officers, employees and non-employee directors under the Acadia Healthcare Company, Inc. Incentive Compensation Plan (the “Equity Incentive Plan”). As of September 30, 2016, a maximum of 8,200,000 shares of the Company’s common stock were authorized for issuance as stock options, restricted stock and restricted stock units or other share-based compensation under the Equity Incentive Plan, of which 4,662,863 shares were available for future grant. Stock options may be granted for terms of up to ten years. The Company recognizes expense on all share-based awards on a straight-line basis over the requisite service period of the entire award. Grants to employees generally vest in annual increments of 25% each year, commencing one year after the date of grant. The exercise prices of stock options are equal to the most recent closing price of the Company’s common stock on the date of grant.

The Company recognized $7.1 million and $5.3 million in equity-based compensation expense for the three months ended September 30, 2016 and 2015, respectively, and $21.0 million and $14.6 million for the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016, there was $59.4 million of unrecognized compensation expense related to unvested options, restricted stock and restricted stock units, which is expected to be recognized over the remaining weighted average vesting period of 1.4 years. As of September 30, 2016, there were no warrants outstanding. The Company recognized a deferred income tax benefit of $2.9 million and $2.2 million for the three months ended September 30, 2016 and 2015, respectively, related to equity-based compensation expense. The Company recognized a deferred income tax benefit of $8.3 million and $6.0 million for the nine months ended September 30, 2016 and 2015, respectively, related to equity-based compensation expense. The actual tax benefit realized from stock options exercised during the three and nine months ended September 30, 2015 was $1.7 million and $8.0 million, respectively.

Stock option activity during 2015 and 2016 was as follows (aggregate intrinsic value in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2015		737,422		$	32.19		8.09	$	14,512
Options granted		204,700			63.07		9.21		1,724
Options exercised		(214,079	)		42.75		N/A		9,890
Options cancelled		(33,300	)		46.53		N/A		N/A
Options outstanding at December 31, 2015		694,743			42.87		7.70		20,717
Options granted		456,850			59.26		9.48		—
Options exercised		(55,808	)		32.40		N/A		1,541
Options cancelled		(79,200	)		56.61		N/A		N/A
Options outstanding at September 30, 2016		1,016,585		$	50.07		8.04	$	9,744
Options exercisable at December 31, 2015		106,330		$	36.41		5.83	$	4,968
Options exercisable at September 30, 2016		290,884		$	41.80		6.31	$	7,114

Restricted stock activity during 2015 and 2016 was as follows:

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2015		722,028		$	39.77
Granted		503,052			62.67
Cancelled		(44,900	)		49.55
Vested		(235,618	)		34.93
Unvested at December 31, 2015		944,562		$	52.74
Granted		299,047			58.99
Cancelled		(87,803	)		57.14
Vested		(308,094	)		46.88
Unvested at September 30, 2016		847,712		$	56.64

Restricted stock unit activity during 2015 and 2016 was as follows:

	Number of Units			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2015		125,113		$	38.73
Granted		217,994			61.77
Cancelled		—			—
Vested		(125,023	)		32.38
Unvested at December 31, 2015		218,084		$	56.97
Granted		230,750			56.95
Cancelled		—			—
Vested		(175,235	)		52.71
Unvested at September 30, 2016		273,599		$	59.68

The grant-date fair value of the Company’s stock options is estimated using the Black-Scholes option pricing model. The following table summarizes the grant-date fair value of options and the assumptions used to develop the fair value estimates for options granted during the nine months ended September 30, 2016 and year ended December 31, 2015:

	September 30, 2016			December 31, 2015
Weighted average grant-date fair value of options	$	19.35		$	21.78
Risk-free interest rate		1.3	%		1.5	%
Expected volatility		33	%		35	%
Expected life (in years)		5.5			5.5

The Company’s estimate of expected volatility for stock options is based upon the volatility of guideline companies given the lack of sufficient historical trading experience of the Company’s common stock. The risk-free interest rate is the approximate yield on United States Treasury Strips having a life equal to the expected option life on the date of grant. The expected life is an estimate of the number of years an option will be held before it is exercised.

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

The provision for income taxes for continuing operations for the three months ended September 30, 2016 and 2015 reflects effective tax rates of (2.1)% and 30.4%, respectively. The provision for income taxes for continuing operations for the nine months ended September 30, 2016 and 2015 reflects effective tax rates of (292.8)% and 31.0%, respectively. The change in the tax rate for the three and nine months ended September 30, 2016 is primarily attributable to the loss on divestiture related to our planned divestiture in the U.K.

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Derivative Instruments

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

10. Derivative Instruments

The Company entered into foreign currency forward contracts during the three and nine months ended September 30, 2016 and 2015 in connection with (i) acquisitions in the U.K. and (ii) transfers of cash between the U.S. and U.K. under the Company’s cash management and foreign currency risk management programs. Foreign currency forward contracts limit the economic risk of changes in the exchange rate between US Dollars (“USD”) and British Pounds (“GBP”) associated with cash transfers. These foreign currency forward contracts did not meet the hedge accounting criteria under Accounting Standards Codification 815, Derivatives and Hedging. As such, changes in fair value resulted in gains of $15 thousand and $0.5 million for the three and nine months ended September 30, 2016, respectively, and losses of $1.0 million and $1.9 million for the three and nine months ended September 30, 2015, respectively, which have been recorded in the consolidated statements of income.

In May 2016, the Company entered into multiple cross currency swap agreements with an aggregate notional amount of $650.0 million to manage foreign currency risk by effectively converting a portion of its fixed-rate USD-denominated senior notes, including the semi-annual interest payments thereunder, to fixed-rate GBP-denominated debt of £449.3 million. The senior notes effectively converted include $150.0 million aggregate principal amount of 6.125% Senior Notes, $300.0 million aggregate principal amount of 5.125% Senior Notes and $200.0 million aggregate principal amount of 5.625% Senior Notes. During the term of the swap agreements, the Company will receive semi-annual interest payments in USD from the counterparties at fixed interest rates, and the Company will make semi-annual interest payments in GBP to the counterparties at fixed interest rates. The interest payments under the cross-currency swap agreements result in £24.7 million of annual cash flows, from the Company’s U.K. business being converted to $35.8 million (at a 1.45 exchange rate). The interest rates applicable to the GBP interest payments are substantially the same as the interest rates in place for the existing USD-denominated debt. At maturity, the Company will repay the principal amounts listed above in GBP and receive the principal amount in USD.

The Company has designated the cross currency swap agreements as qualifying hedging instruments and is accounting for these as net investment hedges. The fair value of the cross currency swap agreements of $49.9 million is recorded as an asset within derivative instruments on the condensed consolidated balance sheets. The gains and losses resulting from fair value adjustments to the cross currency swap agreements are recorded in accumulated other comprehensive income as the swaps are effective in hedging the designated risk. Cash flows related to the cross currency swaps are included in operating activities in the condensed consolidated statements of cash flows.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

11. Fair Value Measurements

The carrying amounts reported for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value because of the short-term maturity of these instruments.

The carrying amounts and fair values of the Company’s Amended and Restated Senior Credit Facility, 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes, 6.500% Senior Notes, 9.0% and 9.5% Revenue Bonds, derivative instruments and contingent consideration liabilities as of September 30, 2016 and December 31, 2015 were as follows (in thousands):

	Carrying Amount				Fair Value
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Amended and Restated Senior Credit Facility	$	2,174,174	$	1,135,861	$	2,174,174	$	1,135,861
6.125% Senior Notes due 2021	$	147,448	$	147,082	$	152,240	$	149,288
5.125% Senior Notes due 2022	$	295,266	$	294,749	$	292,313	$	275,590
5.625% Senior Notes due 2023	$	640,257	$	639,431	$	649,861	$	604,262
6.500% Senior Notes due 2024	$	381,032	$	—	$	399,131	$	—
9.0% and 9.5% Revenue Bonds	$	23,300	$	23,621	$	23,300	$	23,621
Derivative instruments	$	49,903	$	—	$	49,903	$	—
Contingent consideration liabilities	$	667	$	667	$	667	$	667

The Company’s Amended and Restated Senior Credit Facility, 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes, 6.500% Senior Notes and 9.0% and 9.5% Revenue Bonds were categorized as Level 2 in the GAAP fair value hierarchy. Fair values were based on trading activity among the Company’s lenders and the average bid and ask price as determined using published rates.

The fair values of the derivative instruments were categorized as Level 2 in the GAAP fair value hierarchy and were based on observable market inputs including applicable exchange rates and interest rates.

The fair value of the contingent consideration liabilities were categorized as Level 3 in the GAAP fair value hierarchy. The contingent consideration liabilities were valued using a probability-weighted discounted cash flow method. This analysis reflected the contractual terms of the purchase agreements and utilized assumptions with regard to future earnings, probabilities of achieving such future earnings and a discount rate.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

Professional and General Liability

Effective September 1, 2016, a portion of the Company’s professional liability risks is insured through a 100% owned insurance subsidiary. Subject to a $2.0 million per occurrence self-insured retention, the Company’s 100% owned insurance subsidiary insures the Company for professional liability losses up to $50.0 million in the aggregate. The insurance subsidiary has obtained reinsurance with unrelated commercial insurers for professional liability risks generally above a retention level of $2.0 million and up to $50.0 million in the aggregate.

Legal Proceedings

The Company is, from time to time, subject to various claims and legal actions that arise in the ordinary course of the Company’s business, including claims for damages for personal injuries, medical malpractice, breach of contract, tort and employment related claims. In these actions, plaintiffs request a variety of damages, including, in some instances, punitive and other types of damages that may not be covered by insurance. In the opinion of management, the Company is not currently a party to any proceeding that would individually or in the aggregate have a material adverse effect on the Company’s business, financial condition or results of operations.

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Noncontrolling Interests

9 Months Ended

Sep. 30, 2016

Noncontrolling Interest [Abstract]

Noncontrolling Interests

13. Noncontrolling Interests

On May 2, 2016, the Company opened Crestwyn Behavioral Health, a de novo inpatient psychiatric facility located in Memphis, Tennessee. The Company owns 60% of the equity interests in the facility, and two noncontrolling partners each own 20%. The value of the 40% noncontrolling interests approximates $6.0 million and is based on the fair value of contributions. The Company consolidates the operations of the facility based on its 60% equity ownership and its control of the entity. The noncontrolling interests are reflected as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets based on a put right that could require the Company to purchase the noncontrolling interests upon the occurrence of a change in control.

On August 31, 2015, the Company completed the acquisition of a controlling interest in Southcoast, an inpatient psychiatric facility located in Fairhaven, Massachusetts. The Company owns 75% of the equity interests in the facility. The value of the 25% noncontrolling interest approximates $9.2 million. The Company considered an income approach and other valuation methodologies to value the noncontrolling interests. The Company consolidates the operations of the facility based on its 75% equity ownership and its control of the entity. The noncontrolling interests are reflected as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets based on a put right that could require the Company to purchase the noncontrolling interests upon the occurrence of a change in control.

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Other Current Assets

9 Months Ended

Sep. 30, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Current Assets

14. Other Current Assets

Other current assets consisted of the following (in thousands):

	September 30, 2016		December 31, 2015
Prepaid expenses	$	32,568	$	21,817
Other receivables		24,850		17,518
Income taxes receivable		9,790		6,540
Workers’ compensation deposits – current portion		7,500		7,500
Insurance receivable – current portion		5,290		5,290
Inventory		4,758		4,681
Other		2,872		3,549
Other current assets	$	87,628	$	66,895

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Other Accrued Liabilities

9 Months Ended

Sep. 30, 2016

Other Liabilities Disclosure [Abstract]

Other Accrued Liabilities

15. Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

	September 30, 2016		December 31, 2015
Accrued expenses	$	42,804	$	17,921
Unearned income		24,516		446
Accrued interest		13,523		26,132
Insurance liability – current portion		10,490		10,490
Accrued property taxes		4,474		2,951
Income taxes payable		121		7,367
Other current liabilities		8,585		7,499
Other accrued liabilities	$	104,513	$	72,806

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Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

16. Segment Information

The Company operates in one line of business, which is operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As management reviews the operating results of its facilities in the U.S. (the “U.S. Facilities”) and its facilities in the U.K. (the “U.K. Facilities”) separately to assess performance and make decisions, the Company’s operating segments include its U.S. Facilities and U.K. Facilities. At September 30, 2016, the U.S. Facilities included 211 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities included 378 behavioral healthcare facilities with approximately 9,400 beds in the U.K. The following tables set forth the financial information by operating segment, including a reconciliation of Segment EBITDA to income from continuing operations before income taxes (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue:
U.S. Facilities	$	431,521		$	379,857		$	1,269,994		$	1,037,250
U.K. Facilities		303,146			97,875			836,004			256,117
Corporate and Other		(2	)		1,998			2,028			5,806
	$	734,665		$	479,730		$	2,108,026		$	1,299,173
Segment EBITDA(1):
U.S. Facilities	$	108,810		$	101,636		$	334,230		$	280,342
U.K. Facilities		67,795			23,015			185,664			62,197
Corporate and Other		(20,767	)		(16,183	)		(60,818	)		(49,556	)
	$	155,838		$	108,468		$	459,076		$	292,983
	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Segment EBITDA(1)	$	155,838		$	108,468		$	459,076		$	292,983
Plus (less):
Equity-based compensation expense		(7,145	)		(5,327	)		(20,989	)		(14,576	)
Debt extinguishment costs		(3,411	)		(9,979	)		(3,411	)		(9,979	)
Loss on divestiture		(174,739	)		—			(174,739	)		—
Gain (loss) on foreign currency derivatives		15			(1,018	)		523			(1,926	)
Transaction-related expenses		(1,111	)		(5,842	)		(33,483	)		(31,415	)
Interest expense, net		(48,843	)		(27,737	)		(135,315	)		(77,932	)
Depreciation and amortization		(36,418	)		(16,890	)		(101,145	)		(44,920	)
(Loss) income from continuing operations before income taxes	$	(115,814	)	$	41,675		$	(9,483	)	$	112,235
	U.S. Facilities			U.K. Facilities			Corporate and Other			Consolidated
Goodwill:
Balance at January 1, 2016	$	1,941,873		$	186,342		$	—		$	2,128,215
Increase from 2016 acquisitions		95,206			669,965			—			765,171
Foreign currency translation		—			(92,389	)		—			(92,389	)
Assets held for sale		—			(106,852	)		—			(106,852	)
Other		7,825			39			—			7,864
Balance at September 30, 2016	$	2,044,904		$	657,105		$	—		$	2,702,009

	September 30, 2016		December 31, 2015
Assets (2):
U.S. Facilities	$	3,379,195	$	3,061,519
U.K. Facilities		2,907,903		1,045,922
Corporate and Other		165,880		171,767
	$	6,452,978	$	4,279,208

⁽¹⁾  Segment EBITDA is defined as income from continuing operations before provision for income taxes, equity-based compensation expense, gain/loss on foreign currency derivatives, transaction-related expenses, interest expense and depreciation and amortization. The Company uses Segment EBITDA as an analytical indicator to measure the performance of the Company’s segments and to develop strategic objectives and operating plans for those segments. Segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from Segment EBITDA are significant components in understanding and assessing financial performance. Because Segment EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, Segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

⁽²⁾  Assets include property and equipment for the U.S. Facilities of $1.0 billion, U.K. Facilities of $1.7 billion and corporate and other of $33.1 million at September 30, 2016. Assets include property and equipment for the U.S. Facilities of $832.2 million, U.K. Facilities of $824.4 million and corporate and other of $52.4 million at December 31, 2015.

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Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2016

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Standards

17. Recently Issued Accounting Standards

In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Additionally, ASU 2016-09 would permit both public and nonpublic organizations to adopt the new standard early. Management is evaluating the impact of ASU 2016-09 on the Company’s consolidated financial statements.

In March 2016, FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02’s core principle is to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Additionally, ASU 2016-02 would permit both public and nonpublic organizations to adopt the new standard early. Management is evaluating the impact of ASU 2016-02 on the Company’s consolidated financial statements.

In May 2014, the FASB and the International Accounting Standards Board issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09’s core principal is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Additionally, ASU 2014-09 would permit both public and nonpublic organizations to adopt the new revenue standard early, but not before the original public organization effective date (that is, annual periods beginning after December 15, 2016). Management is evaluating the impact of ASU 2014-09 on the Company’s consolidated financial statements.

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Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

18. Subsequent Events

On October 18, 2016, the Company signed a definitive agreement with BC Partners for the sale of 21 existing U.K. behavioral health facilities and one de novo behavioral health facility with an aggregate of approximately 1,000 beds. Management believes the planned divestiture addresses the CMA’s competition concerns. The Company expects the sale to be approved by the CMA on or before November 18, 2016 and expects to complete the sale shortly thereafter. If the sale is approved by the CMA and completed, the Company will receive £320 million cash for the sale. If the sale is not approved by the CMA, the Company expects that the CMA will proceed with a phase 2 investigation.

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Financial Information for the Company and Its Subsidiaries

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Financial Information for the Company and Its Subsidiaries

19. Financial Information for the Company and Its Subsidiaries

The Company conducts substantially all of its business through its subsidiaries. The 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes and 6.500% Senior Notes are jointly and severally guaranteed on an unsecured senior basis by all of the Company’s subsidiaries that guarantee the Company’s obligations under the Amended and Restated Senior Credit Facility. Presented below is condensed consolidating financial information for the Company and its subsidiaries as of September 30, 2016 and December 31, 2015, and for the three and nine months ended September 30, 2016 and 2015. The information segregates the parent company (Acadia Healthcare Company, Inc.), the combined wholly-owned subsidiary guarantors, the combined non-guarantor subsidiaries and eliminations.

Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

September 30, 2016

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	5,160	$	22,591	$	—		$	27,751
Accounts receivable, net		—		211,981		65,587		—			277,568
Other current assets		—		65,136		22,492		—			87,628
Total current assets		—		282,277		110,670		—			392,947
Property and equipment, net		—		934,633		1,852,013		—			2,786,646
Goodwill		—		1,938,368		763,641		—			2,702,009
Intangible assets, net		—		56,653		27,732		—			84,385
Deferred tax assets – noncurrent		3,587		—		4,691		(4,487	)		3,791
Derivative instruments		49,903		—		—		—			49,903
Investment in subsidiaries		4,985,674		—		—		(4,985,674	)		—
Assets held for sale		—		—		392,483		—			392,483
Other assets		854,658		36,030		2,326		(852,200	)		40,814
Total assets	$	5,893,822	$	3,247,961	$	3,153,556	$	(5,842,361	)	$	6,452,978
Current liabilities:
Current portion of long-term debt	$	77,363	$	—	$	235	$	—		$	77,598
Accounts payable		—		58,984		33,835		—			92,819
Accrued salaries and benefits		—		70,085		35,223		—			105,308
Other accrued liabilities		13,524		34,912		56,077		—			104,513
Total current liabilities		90,887		163,981		125,370		—			380,238
Long-term debt		3,560,814		—		875,265		(852,200	)		3,583,879
Deferred tax liabilities – noncurrent		—		8,684		77,246		(4,487	)		81,443
Other liabilities		—		104,586		42,564		—			147,150
Total liabilities		3,651,701		277,251		1,120,445		(856,687	)		4,192,710
Redeemable noncontrolling interests		—		—		18,147		—			18,147
Total equity		2,242,121		2,970,710		2,014,964		(4,985,674	)		2,242,121
Total liabilities and equity	$	5,893,822	$	3,247,961	$	3,153,556	$	(5,842,361	)	$	6,452,978

Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

December 31, 2015

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	1,987	$	9,228	$	—		$	11,215
Accounts receivable, net		—		187,546		29,080		—			216,626
Other current assets		—		57,968		8,927		—			66,895
Total current assets		—		247,501		47,235		—			294,736
Property and equipment, net		—		805,439		903,614		—			1,709,053
Goodwill		—		1,835,339		292,876		—			2,128,215
Intangible assets, net		—		57,024		2,551		—			59,575
Deferred tax assets – noncurrent		3,946		40,587		4,581		—			49,114
Investment in subsidiaries		3,495,067		—		—		(3,495,067	)		—
Other assets		427,270		32,947		2,322		(424,024	)		38,515
Total assets	$	3,926,283	$	3,018,837	$	1,253,179	$	(3,919,091	)	$	4,279,208
Current liabilities:
Current portion of long-term debt	$	45,125	$	—	$	235	$	—		$	45,360
Accounts payable		—		75,015		16,326		—			91,341
Accrued salaries and benefits		—		66,249		14,447		—			80,696
Other accrued liabilities		26,132		10,886		35,788		—			72,806
Total current liabilities		71,257		152,150		66,796		—			290,203
Long-term debt		2,171,998		—		447,410		(424,024	)		2,195,384
Deferred tax liabilities – noncurrent		—		—		23,936		—			23,936
Other liabilities		—		75,159		3,443		—			78,602
Total liabilities		2,243,255		227,309		541,585		(424,024	)		2,588,125
Redeemable noncontrolling interests		—		—		8,055		—			8,055
Total equity		1,683,028		2,791,528		703,539		(3,495,067	)		1,683,028
Total liabilities and equity	$	3,926,283	$	3,018,837	$	1,253,179	$	(3,919,091	)	$	4,279,208

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Three Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	420,061		$	324,741		$	—	$	744,802
Provision for doubtful accounts		—			(9,383	)		(754	)		—		(10,137	)
Revenue		—			410,678			323,987			—		734,665
Salaries, wages and benefits		7,145			224,692			176,405			—		408,242
Professional fees		—			21,140			26,547			—		47,687
Supplies		—			19,467			11,088			—		30,555
Rents and leases		—			8,759			10,981			—		19,740
Other operating expenses		—			51,536			28,212			—		79,748
Depreciation and amortization		—			15,105			21,313			—		36,418
Interest expense, net		13,388			19,258			16,197			—		48,843
Debt extinguishment costs		3,411			—			—			—		3,411
Loss on divestiture		—			—			174,739			—		174,739
Gain on foreign currency derivatives		(15	)		—			—			—		(15	)
Transaction-related expenses		—			—			1,111			—		1,111
Total expenses		23,929			359,957			466,593			—		850,479
(Loss) income from continuing operations before income taxes		(23,929	)		50,721			(142,606	)		—		(115,814	)
Equity in earnings of subsidiaries		(99,875	)		—			—			99,875		—
(Benefit from) provision for income taxes		(5,594	)		38,654			(30,664	)		—		2,396
(Loss) income from continuing operations		(118,210	)		12,067			(111,942	)		99,875		(118,210	)
Income from discontinued operations, net of income taxes		—			—			—			—		—
Net (loss) income		(118,210	)		12,067			(111,942	)		99,875		(118,210	)
Net loss attributable to noncontrolling interests		—			—			402			—		402
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(118,210	)	$	12,067		$	(111,540	)	$	99,875	$	(117,808	)
Other comprehensive loss:
Foreign currency translation loss		—			—			(89,645	)		—		(89,645	)
Gain on derivative instruments		6,387			—			—			—		6,387
Other comprehensive income (loss)		6,387			—			(89,645	)		—		(83,258	)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$	(111,823	)	$	12,067		$	(201,185	)	$	99,875	$	(201,066	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Three Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	377,582		$	111,164		$	—		$	488,746
Provision for doubtful accounts		—			(8,531	)		(485	)		—			(9,016	)
Revenue		—			369,051			110,679			—			479,730
Salaries, wages and benefits		5,327			191,032			62,051			—			258,410
Professional fees		—			21,551			9,208			—			30,759
Supplies		—			17,349			4,285			—			21,634
Rents and leases		—			7,624			918			—			8,542
Other operating expenses		—			47,113			10,131			—			57,244
Depreciation and amortization		—			10,578			6,312			—			16,890
Interest expense, net		15,934			6,036			5,767			—			27,737
Debt extinguishment costs		9,979			—			—			—			9,979
Loss on foreign currency derivatives		1,018			—			—			—			1,018
Transaction-related expenses		—			2,831			3,011			—			5,842
Total expenses		32,258			304,114			101,683			—			438,055
(Loss) income from continuing operations before income taxes		(32,258	)		64,937			8,996			—			41,675
Equity in earnings of subsidiaries		50,840			—			—			(50,840	)		—
(Benefit from) provision for income taxes		(10,504	)		21,383			1,790			—			12,669
Income (loss) from continuing operations		29,086			43,554			7,206			(50,840	)		29,006
Income from discontinued operations, net of income taxes		—			80			—			—			80
Net income (loss)		29,086			43,634			7,206			(50,840	)		29,086
Net loss attributable to noncontrolling interests		—			—			464			—			464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	29,086		$	43,634		$	7,670		$	(50,840	)	$	29,550
Other comprehensive income:
Foreign currency translation gain		—			—			(32,707	)		—			(32,707	)
Other comprehensive income		—			—			(32,707	)		—			(32,707	)
Comprehensive income (loss)	$	29,086		$	43,634		$	(25,037	)	$	(50,840	)	$	(3,157	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Nine Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	1,245,227		$	893,812		$	—		$	2,139,039
Provision for doubtful accounts		—			(28,318	)		(2,695	)		—			(31,013	)
Revenue		—			1,216,909			891,117			—			2,108,026
Salaries, wages and benefits		20,989			648,669			487,899			—			1,157,557
Professional fees		—			66,967			71,003			—			137,970
Supplies		—			57,456			30,993			—			88,449
Rents and leases		—			25,857			29,156			—			55,013
Other operating expenses		—			151,485			79,465			—			230,950
Depreciation and amortization		—			42,072			59,073			—			101,145
Interest expense, net		37,452			57,394			40,469			—			135,315
Debt extinguishment costs		3,411			—			—			—			3,411
Loss on divestiture		—			—			174,739			—			174,739
Gain on foreign currency derivatives		(523	)		—			—			—			(523	)
Transaction-related expenses		—			25,624			7,859			—			33,483
Total expenses		61,329			1,075,524			980,656			—			2,117,509
(Loss) income from continuing operations before income taxes		(61,329	)		141,385			(89,539	)		—			(9,483	)
Equity in earnings of subsidiaries		8,937			—			—			(8,937	)		—
(Benefit from) provision for income taxes		(15,142	)		62,247			(19,338	)		—			27,767
(Loss) income from continuing operations		(37,250	)		79,138			(70,201	)		(8,937	)		(37,250	)
Income from discontinued operations, net of income taxes		—			—			—			—			—
Net (loss) income		(37,250	)		79,138			(70,201	)		(8,937	)		(37,250	)
Net loss attributable to noncontrolling interests		—			—			1,575			—			1,575
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(37,250	)	$	79,138		$	(68,626	)	$	(8,937	)	$	(35,675	)
Other comprehensive loss:
Foreign currency translation loss		—			—			(351,528	)		—			(351,528	)
Gain on derivative instruments		30,306			—			—			—			30,306
Other comprehensive income (loss)		30,306			—			(351,528	)		—			(321,222	)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$	(6,944	)	$	79,138		$	(420,154	)	$	(8,937	)	$	(356,897	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Nine Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	1,029,198		$	295,504		$	—		$	1,324,702
Provision for doubtful accounts		—			(23,516	)		(2,013	)		—			(25,529	)
Revenue		—			1,005,682			293,491			—			1,299,173
Salaries, wages and benefits		14,576			530,221			162,786			—			707,583
Professional fees		—			60,615			22,600			—			83,215
Supplies		—			47,287			11,143			—			58,430
Rents and leases		—			20,143			2,496			—			22,639
Other operating expenses		—			122,505			26,394			—			148,899
Depreciation and amortization		—			29,840			15,080			—			44,920
Interest expense, net		46,988			17,639			13,305			—			77,932
Debt extinguishment costs		9,979			—			—			—			9,979
Loss on foreign currency derivatives		1,926			—			—			—			1,926
Transaction-related expenses		—			24,193			7,222			—			31,415
Total expenses		73,469			852,443			261,026			—			1,186,938
(Loss) income from continuing operations before income taxes		(73,469	)		153,239			32,465			—			112,235
Equity in earnings of subsidiaries		127,108			—			—			(127,108	)		—
(Benefit from) provision for income taxes		(23,885	)		50,634			8,045			—			34,794
Income (loss) from continuing operations		77,524			102,605			24,420			(127,108	)		77,441
Income from discontinued operations, net of income taxes		—			83			—			—			83
Net income (loss)		77,524			102,688			24,420			(127,108	)		77,524
Net loss attributable to noncontrolling interests		—			—			464			—			464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	77,524		$	102,688		$	24,884		$	(127,108	)	$	77,988
Other comprehensive income:
Foreign currency translation gain		—			—			(15,923	)		—			(15,923	)
Other comprehensive income		—			—			(15,923	)		—			(15,923	)
Comprehensive income (loss)	$	77,524		$	102,688		$	8,961		$	(127,108	)	$	62,065

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net (loss) income	$	(37,250	)	$	79,138		$	(70,201	)	$	(8,937	)	$	(37,250	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(8,937	)		—			—			8,937			—
Depreciation and amortization		—			42,072			59,073			—			101,145
Amortization of debt issuance costs		8,035			—			(321	)		—			7,714
Equity-based compensation expense		20,989			—			—			—			20,989
Deferred income tax (benefit) expense		—			26,381			(524	)		—			25,857
Loss from discontinued operations, net of taxes		—			—			—			—			—
Debt extinguishment costs		3,411			—			—			—			3,411
Loss on divestiture		—			—			174,739			—			174,739
Gain on foreign currency derivatives		(523	)		—			—			—			(523	)
Other		—			826			(95	)		—			731
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(26,055	)		13,476			—			(12,579	)
Other current assets		—			(4,901	)		(8,072	)		—			(12,973	)
Other assets		(2,780	)		(818	)		(316	)		2,780			(1,134	)
Accounts payable and other accrued liabilities		—			31,633			(29,566	)		—			2,067
Accrued salaries and benefits		—			3,527			(14,286	)		—			(10,759	)
Other liabilities		—			5,975			(2,229	)		—			3,746
Net cash (used in) provided by continuing operating activities		(17,055	)		157,778			121,678			2,780			265,181
Net cash used in discontinued operating activities		—			(5,524	)		—			—			(5,524	)
Net cash (used in) provided by operating activities		(17,055	)		152,254			121,678			2,780			259,657
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(103,189	)		(580,096	)		—			(683,285	)
Cash paid for capital expenditures		—			(142,626	)		(107,335	)		—			(249,961	)
Cash paid for real estate acquisitions		—			(26,146	)		(11,801	)		—			(37,947	)
Settlement of foreign currency derivatives		—			523			—			—			523
Other		—			(1,135	)		—			—			(1,135	)
Net cash used in investing activities		—			(272,573	)		(699,232	)		—			(971,805	)
Financing activities:
Borrowings on long-term debt		1,480,000			—			—			—			1,480,000
Borrowings on revolving credit facility		179,000			—			—			—			179,000
Principal payments on revolving credit facility		(166,000	)		—			—			—			(166,000	)
Principal payments on long-term debt		(46,069	)		—			(2,780	)		2,780			(46,069	)
Repayment of assumed debt		(1,348,389	)		—			—			—			(1,348,389	)
Payment of debt issuance costs		(35,748	)		—			—			—			(35,748	)
Issuance of common stock		685,097			—			—			—			685,097
Common stock withheld for minimum statutory taxes, net		(7,917	)		—			—			—			(7,917	)
Excess tax benefit from equity awards		—			—			—			—			—
Other		—			(1,821	)		—			—			(1,821	)
Cash (used in) provided by intercompany activity		(722,919	)		125,313			603,166			(5,560	)		—
Net cash provided by (used in) financing activities		17,055			123,492			600,386			(2,780	)		738,153
Effect of exchange rate changes on cash		—			—			(9,469	)		—			(9,469	)
Net increase in cash and cash equivalents		—			3,173			13,363			—			16,536
Cash and cash equivalents at beginning of the period		—			1,987			9,228			—			11,215
Cash and cash equivalents at end of the period	$	—		$	5,160		$	22,591		$	—		$	27,751

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net income (loss)	$	77,524		$	102,688		$	24,420		$	(127,108	)	$	77,524
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(127,108	)		—			—			127,108			—
Depreciation and amortization		—			29,840			15,080			—			44,920
Amortization of debt issuance costs		5,347			—			(330	)		—			5,017
Equity-based compensation expense		14,576			—			—			—			14,576
Deferred income tax (benefit) expense		(58	)		27,035			1,948			—			28,925
Loss from discontinued operations, net of taxes		—			(83	)		—			—			(83	)
Debt extinguishment costs		9,979			—			—			—			9,979
Loss (gain) on foreign currency derivatives		1,926			—			—			—			1,926
Other		—			1,088			34			—			1,122
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(16,535	)		(12,370	)		—			(28,905	)
Other current assets		—			(14,287	)		2,086			—			(12,201	)
Other assets		(300	)		(4,881	)		2			300			(4,879	)
Accounts payable and other accrued liabilities		—			(10,510	)		2,194			—			(8,316	)
Accrued salaries and benefits		—			7,953			935			—			8,888
Other liabilities		—			5,821			(750	)		—			5,071
Net cash (used in) provided by continuing operating activities		(18,114	)		128,129			33,249			300			143,564
Net cash provided by discontinued operating activities		—			(1,479	)		—			—			(1,479	)
Net cash (used in) provided by operating activities		(18,114	)		126,650			33,249			300			142,085
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(88,308	)		(302,908	)		—			(391,216	)
Cash paid for capital expenditures		—			(116,466	)		(84,375	)		—			(200,841	)
Cash paid for real estate acquisitions		—			(21,976	)		—			—			(21,976	)
Settlement of foreign currency derivatives		—			(1,926	)		—			—			(1,926	)
Other		—			(887	)		—			—			(887	)
Net cash used in investing activities		—			(229,563	)		(387,283	)		—			(616,846	)
Financing activities:
Borrowings on long-term debt		1,150,000			—			—			—			1,150,000
Borrowings on revolving credit facility		310,000			—			—			—			310,000
Principal payments on revolving credit facility		(310,000	)		—			—			—			(310,000	)
Principal payments on long-term debt		(23,813	)		—			(300	)		300			(23,813	)
Repayment of assumed CRC debt		(904,467	)		—			—			—			(904,467	)
Repayments of senior notes		(88,331	)		—			—			—			(88,331	)
Payment of debt issuance costs		(25,584	)		—			—			—			(25,584	)
Payment of premium on senior notes		(6,890	)		—			—			—			(6,890	)
Issuance of Common Stock		—			331,360			—			—			331,360
Common stock withheld for minimum statutory taxes, net		(7,582	)		—			—			—			(7,582	)
Excess tax benefit from equity awards		8,020			—			—			—			8,020
Other		—			(374	)		—			—			(374	)
Cash provided by (used in) intercompany activity		(83,239	)		(257,037	)		340,876			(600	)		—
Net cash provided by (used in) financing activities		18,114			73,949			340,576			(300	)		432,339
Effect of exchange rate changes on cash		—			(856	)		—			—			(856	)
Net (decrease) increase in cash and cash equivalents		—			(29,820	)		(13,458	)		—			(43,278	)
Cash and cash equivalents at beginning of the period		—			76,685			17,355			—			94,040
Cash and cash equivalents at end of the period	$	—		$	46,865		$	3,897		$	—		$	50,762

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share amounts):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Numerator:
Basic and diluted earnings per share attributable to Acadia Healthcare Company, Inc.:
(Loss) income from continuing operations	$	(117,808	)	$	29,470	$	(35,675	)	$	77,905
Income from discontinued operations		—			80		—			83
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(117,808	)	$	29,550	$	(35,675	)	$	77,988
Denominator:
Weighted average shares outstanding for basic earnings per share		86,618			70,664		85,376			67,194
Effect of dilutive instruments		—			446		—			345
Shares used in computing diluted earnings per common share		86,618			71,110		85,376			67,539
Basic earnings per share:
(Loss) income from continuing operations	$	(1.36	)	$	0.42	$	(0.42	)	$	1.16
Income from discontinued operations		—			—		—			—
Net (loss) income	$	(1.36	)	$	0.42	$	(0.42	)	$	1.16
Diluted earnings per share:
(Loss) income from continuing operations	$	(1.36	)	$	0.42	$	(0.42	)	$	1.15
Income from discontinued operations		—			—		—			—
Net (loss) income	$	(1.36	)	$	0.42	$	(0.42	)	$	1.15

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2016

Transaction Related Expenses as Incurred

Transaction-related expenses comprised the following costs for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Legal, accounting and other costs	$	1,111	$	5,261	$	17,212	$	14,315
Advisory and financing commitment fees		—		—		14,850		10,337
Severance and contract termination costs		—		581		1,421		6,763
	$	1,111	$	5,842	$	33,483	$	31,415

Pro Forma Financial Information for Acquisitions Occurred

The following table provides certain pro forma financial information for the Company as if the 2015 and 2016 Acquisitions occurred as of January 1, 2015 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Revenue	$	734,665		$	737,263	$	2,232,285		$	2,185,600
(Loss) income from continuing operations, before income taxes	$	(115,814	)	$	39,130	$	(27,529	)	$	110,559

CRC Health Group Inc And Other Acquisitions [Member]

Preliminary Fair Values of Assets Acquired and Liabilities Assumed at Corresponding Acquisition Date

The preliminary fair values of assets acquired and liabilities assumed, at the corresponding acquisition dates, during the year ended December 31, 2015 in connection with the 2015 acquisitions were as follows (in thousands):

	CRC		Other		Total
Cash	$	19,599	$	5,334	$	24,933
Accounts receivable		47,035		21,264		68,299
Prepaid expenses and other current assets		26,945		2,555		29,500
Property and equipment		136,163		273,143		409,306
Goodwill		1,043,601		320,464		1,364,065
Intangible assets		37,000		204		37,204
Deferred tax assets-noncurrent		74,383		—		74,383
Other assets		6,478		51		6,529
Total assets acquired		1,391,204		623,015		2,014,219
Accounts payable		4,741		4,961		9,702
Accrued salaries and benefits		14,827		3,200		18,027
Other accrued expenses		38,873		5,047		43,920
Deferred tax liabilities – noncurrent		—		13,541		13,541
Debt		904,467		—		904,467
Other liabilities		34,720		10		34,730
Total liabilities assumed		997,628		26,759		1,024,387
Redeemable noncontrolling interests		—		9,132		9,132
Net assets acquired	$	393,576	$	587,124	$	980,700

Priory [Member]

Preliminary Fair Values of Assets Acquired and Liabilities Assumed at Corresponding Acquisition Date

The preliminary fair values of assets acquired and liabilities assumed, at the corresponding acquisition dates, during the nine months ended September 30, 2016 in connection with the 2016 acquisitions were as follows (in thousands):

	Priory		Other		Total
Cash	$	10,253	$	2,488	$	12,741
Accounts receivable		57,832		4,289		62,121
Prepaid expenses and other current assets		7,921		143		8,064
Property and equipment(1)		1,603,306		35,400		1,638,706
Goodwill(1)		669,965		95,206		765,171
Intangible assets		23,200		338		23,538
Other assets		7,760		47		7,807
Total assets acquired		2,380,237		137,911		2,518,148
Accounts payable		24,203		805		25,008
Accrued salaries and benefits		39,588		797		40,385
Other accrued expenses		48,066		390		48,456
Deferred tax liabilities – noncurrent		67,598		—		67,598
Long-term debt		1,348,389		—		1,348,389
Other liabilities		45,162		30,242		75,404
Total liabilities assumed		1,573,006		32,234		1,605,240
Net assets acquired	$	807,231	$	105,677	$	912,908

⁽¹⁾  Priory fair values of property and equipment and goodwill do not reflect adjustments for the planned divestiture of the U.K. Disposal Group as the divestiture was not anticipated at the acquisition date.

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Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Other Identifiable Intangible Assets and Related Accumulated Amortization

Other identifiable intangible assets and related accumulated amortization consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	Gross Carrying Amount				Accumulated Amortization
	September 30, 2016		December 31, 2015		September 30, 2016			December 31, 2015
Intangible assets subject to amortization:
Contract intangible assets	$	2,100	$	2,100	$	(2,065	)	$	(1,750	)
Non-compete agreements		1,247		1,247		(1,247	)		(1,247	)
		3,347		3,347		(3,312	)		(2,997	)
Intangible assets not subject to amortization:
Licenses and accreditations		12,382		11,479		—			—
Trade names		58,551		37,800		—			—
Certificates of need		13,417		9,946		—			—
		84,350		59,225		—			—
Total	$	87,697	$	62,572	$	(3,312	)	$	(2,997	)

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consists of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016			December 31, 2015
Land	$	430,179		$	214,138
Building and improvements		2,081,246			1,277,800
Equipment		320,234			141,543
Construction in progress		146,070			195,042
		2,977,729			1,828,523
Less accumulated depreciation		(191,083	)		(119,470	)
Property and equipment, net	$	2,786,646		$	1,709,053

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Components of Long-Term Debt

Long-term debt consisted of the following (in thousands):

	September 30, 2016			December 31, 2015
Amended and Restated Senior Credit Facility:
Senior Secured Term A Loans	$	600,594		$	500,750
Senior Secured Term B Loans		1,439,088			495,000
Senior Secured Revolving Line of Credit		171,000			158,000
6.125% Senior Notes due 2021		150,000			150,000
5.125% Senior Notes due 2022		300,000			300,000
5.625% Senior Notes due 2023		650,000			650,000
6.500% Senior Notes due 2024		390,000			—
9.0% and 9.5% Revenue Bonds		22,410			22,410
Less: unamortized debt issuance costs, discount and premium		(61,615	)		(35,416	)
		3,661,477			2,240,744
Less: current portion		(77,598	)		(45,360	)
Long-term debt	$	3,583,879		$	2,195,384

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Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Activity

Stock option activity during 2015 and 2016 was as follows (aggregate intrinsic value in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2015		737,422		$	32.19		8.09	$	14,512
Options granted		204,700			63.07		9.21		1,724
Options exercised		(214,079	)		42.75		N/A		9,890
Options cancelled		(33,300	)		46.53		N/A		N/A
Options outstanding at December 31, 2015		694,743			42.87		7.70		20,717
Options granted		456,850			59.26		9.48		—
Options exercised		(55,808	)		32.40		N/A		1,541
Options cancelled		(79,200	)		56.61		N/A		N/A
Options outstanding at September 30, 2016		1,016,585		$	50.07		8.04	$	9,744
Options exercisable at December 31, 2015		106,330		$	36.41		5.83	$	4,968
Options exercisable at September 30, 2016		290,884		$	41.80		6.31	$	7,114

Restricted Stock Activity

Restricted stock activity during 2015 and 2016 was as follows:

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2015		722,028		$	39.77
Granted		503,052			62.67
Cancelled		(44,900	)		49.55
Vested		(235,618	)		34.93
Unvested at December 31, 2015		944,562		$	52.74
Granted		299,047			58.99
Cancelled		(87,803	)		57.14
Vested		(308,094	)		46.88
Unvested at September 30, 2016		847,712		$	56.64

Restricted Stock Unit Activity

Restricted stock unit activity during 2015 and 2016 was as follows:

	Number of Units			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2015		125,113		$	38.73
Granted		217,994			61.77
Cancelled		—			—
Vested		(125,023	)		32.38
Unvested at December 31, 2015		218,084		$	56.97
Granted		230,750			56.95
Cancelled		—			—
Vested		(175,235	)		52.71
Unvested at September 30, 2016		273,599		$	59.68

Schedule of Stock Options Valuation Assumptions

The grant-date fair value of the Company’s stock options is estimated using the Black-Scholes option pricing model. The following table summarizes the grant-date fair value of options and the assumptions used to develop the fair value estimates for options granted during the nine months ended September 30, 2016 and year ended December 31, 2015:

	September 30, 2016			December 31, 2015
Weighted average grant-date fair value of options	$	19.35		$	21.78
Risk-free interest rate		1.3	%		1.5	%
Expected volatility		33	%		35	%
Expected life (in years)		5.5			5.5

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Carrying Amounts and Fair Values of Company's Amended and Restated Senior Credit Facilities, Derivative Instruments and Contingent Consideration Liabilities

The carrying amounts and fair values of the Company’s Amended and Restated Senior Credit Facility, 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes, 6.500% Senior Notes, 9.0% and 9.5% Revenue Bonds, derivative instruments and contingent consideration liabilities as of September 30, 2016 and December 31, 2015 were as follows (in thousands):

	Carrying Amount				Fair Value
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Amended and Restated Senior Credit Facility	$	2,174,174	$	1,135,861	$	2,174,174	$	1,135,861
6.125% Senior Notes due 2021	$	147,448	$	147,082	$	152,240	$	149,288
5.125% Senior Notes due 2022	$	295,266	$	294,749	$	292,313	$	275,590
5.625% Senior Notes due 2023	$	640,257	$	639,431	$	649,861	$	604,262
6.500% Senior Notes due 2024	$	381,032	$	—	$	399,131	$	—
9.0% and 9.5% Revenue Bonds	$	23,300	$	23,621	$	23,300	$	23,621
Derivative instruments	$	49,903	$	—	$	49,903	$	—
Contingent consideration liabilities	$	667	$	667	$	667	$	667

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Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Current Assets

Other current assets consisted of the following (in thousands):

	September 30, 2016		December 31, 2015
Prepaid expenses	$	32,568	$	21,817
Other receivables		24,850		17,518
Income taxes receivable		9,790		6,540
Workers’ compensation deposits – current portion		7,500		7,500
Insurance receivable – current portion		5,290		5,290
Inventory		4,758		4,681
Other		2,872		3,549
Other current assets	$	87,628	$	66,895

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Other Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Other Liabilities Disclosure [Abstract]

Summary of Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

	September 30, 2016		December 31, 2015
Accrued expenses	$	42,804	$	17,921
Unearned income		24,516		446
Accrued interest		13,523		26,132
Insurance liability – current portion		10,490		10,490
Accrued property taxes		4,474		2,951
Income taxes payable		121		7,367
Other current liabilities		8,585		7,499
Other accrued liabilities	$	104,513	$	72,806

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

Summary of Reconciliation of Segment EBITDA to Income from Continuing Operations

The following tables set forth the financial information by operating segment, including a reconciliation of Segment EBITDA to income from continuing operations before income taxes (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue:
U.S. Facilities	$	431,521		$	379,857		$	1,269,994		$	1,037,250
U.K. Facilities		303,146			97,875			836,004			256,117
Corporate and Other		(2	)		1,998			2,028			5,806
	$	734,665		$	479,730		$	2,108,026		$	1,299,173
Segment EBITDA(1):
U.S. Facilities	$	108,810		$	101,636		$	334,230		$	280,342
U.K. Facilities		67,795			23,015			185,664			62,197
Corporate and Other		(20,767	)		(16,183	)		(60,818	)		(49,556	)
	$	155,838		$	108,468		$	459,076		$	292,983
	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Segment EBITDA(1)	$	155,838		$	108,468		$	459,076		$	292,983
Plus (less):
Equity-based compensation expense		(7,145	)		(5,327	)		(20,989	)		(14,576	)
Debt extinguishment costs		(3,411	)		(9,979	)		(3,411	)		(9,979	)
Loss on divestiture		(174,739	)		—			(174,739	)		—
Gain (loss) on foreign currency derivatives		15			(1,018	)		523			(1,926	)
Transaction-related expenses		(1,111	)		(5,842	)		(33,483	)		(31,415	)
Interest expense, net		(48,843	)		(27,737	)		(135,315	)		(77,932	)
Depreciation and amortization		(36,418	)		(16,890	)		(101,145	)		(44,920	)
(Loss) income from continuing operations before income taxes	$	(115,814	)	$	41,675		$	(9,483	)	$	112,235

Summary of Assets by Operating Segment

	September 30, 2016		December 31, 2015
Assets (2):
U.S. Facilities	$	3,379,195	$	3,061,519
U.K. Facilities		2,907,903		1,045,922
Corporate and Other		165,880		171,767
	$	6,452,978	$	4,279,208

⁽²⁾  Assets include property and equipment for the U.S. Facilities of $1.0 billion, U.K. Facilities of $1.7 billion and corporate and other of $33.1 million at September 30, 2016. Assets include property and equipment for the U.S. Facilities of $832.2 million, U.K. Facilities of $824.4 million and corporate and other of $52.4 million at December 31, 2015.

Goodwill [Member]

Summary of Assets by Operating Segment

	U.S. Facilities			U.K. Facilities				Corporate and Other			Consolidated
Goodwill:
Balance at January 1, 2016		$	1,941,873		$	186,342			$	—		$	2,128,215
Increase from 2016 acquisitions			95,206			669,965				—			765,171
Foreign currency translation			—			(92,389	)			—			(92,389	)
Assets held for sale			—			(106,852	)			—			(106,852	)
Other			7,825			39				—			7,864
Balance at September 30, 2016		$	2,044,904		$	657,105			$	—		$	2,702,009

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Financial Information for the Company and Its Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Condensed Consolidating Balance Sheets

Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

September 30, 2016

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	5,160	$	22,591	$	—		$	27,751
Accounts receivable, net		—		211,981		65,587		—			277,568
Other current assets		—		65,136		22,492		—			87,628
Total current assets		—		282,277		110,670		—			392,947
Property and equipment, net		—		934,633		1,852,013		—			2,786,646
Goodwill		—		1,938,368		763,641		—			2,702,009
Intangible assets, net		—		56,653		27,732		—			84,385
Deferred tax assets – noncurrent		3,587		—		4,691		(4,487	)		3,791
Derivative instruments		49,903		—		—		—			49,903
Investment in subsidiaries		4,985,674		—		—		(4,985,674	)		—
Assets held for sale		—		—		392,483		—			392,483
Other assets		854,658		36,030		2,326		(852,200	)		40,814
Total assets	$	5,893,822	$	3,247,961	$	3,153,556	$	(5,842,361	)	$	6,452,978
Current liabilities:
Current portion of long-term debt	$	77,363	$	—	$	235	$	—		$	77,598
Accounts payable		—		58,984		33,835		—			92,819
Accrued salaries and benefits		—		70,085		35,223		—			105,308
Other accrued liabilities		13,524		34,912		56,077		—			104,513
Total current liabilities		90,887		163,981		125,370		—			380,238
Long-term debt		3,560,814		—		875,265		(852,200	)		3,583,879
Deferred tax liabilities – noncurrent		—		8,684		77,246		(4,487	)		81,443
Other liabilities		—		104,586		42,564		—			147,150
Total liabilities		3,651,701		277,251		1,120,445		(856,687	)		4,192,710
Redeemable noncontrolling interests		—		—		18,147		—			18,147
Total equity		2,242,121		2,970,710		2,014,964		(4,985,674	)		2,242,121
Total liabilities and equity	$	5,893,822	$	3,247,961	$	3,153,556	$	(5,842,361	)	$	6,452,978

Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

December 31, 2015

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	1,987	$	9,228	$	—		$	11,215
Accounts receivable, net		—		187,546		29,080		—			216,626
Other current assets		—		57,968		8,927		—			66,895
Total current assets		—		247,501		47,235		—			294,736
Property and equipment, net		—		805,439		903,614		—			1,709,053
Goodwill		—		1,835,339		292,876		—			2,128,215
Intangible assets, net		—		57,024		2,551		—			59,575
Deferred tax assets – noncurrent		3,946		40,587		4,581		—			49,114
Investment in subsidiaries		3,495,067		—		—		(3,495,067	)		—
Other assets		427,270		32,947		2,322		(424,024	)		38,515
Total assets	$	3,926,283	$	3,018,837	$	1,253,179	$	(3,919,091	)	$	4,279,208
Current liabilities:
Current portion of long-term debt	$	45,125	$	—	$	235	$	—		$	45,360
Accounts payable		—		75,015		16,326		—			91,341
Accrued salaries and benefits		—		66,249		14,447		—			80,696
Other accrued liabilities		26,132		10,886		35,788		—			72,806
Total current liabilities		71,257		152,150		66,796		—			290,203
Long-term debt		2,171,998		—		447,410		(424,024	)		2,195,384
Deferred tax liabilities – noncurrent		—		—		23,936		—			23,936
Other liabilities		—		75,159		3,443		—			78,602
Total liabilities		2,243,255		227,309		541,585		(424,024	)		2,588,125
Redeemable noncontrolling interests		—		—		8,055		—			8,055
Total equity		1,683,028		2,791,528		703,539		(3,495,067	)		1,683,028
Total liabilities and equity	$	3,926,283	$	3,018,837	$	1,253,179	$	(3,919,091	)	$	4,279,208

Summary of Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Three Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	420,061		$	324,741		$	—	$	744,802
Provision for doubtful accounts		—			(9,383	)		(754	)		—		(10,137	)
Revenue		—			410,678			323,987			—		734,665
Salaries, wages and benefits		7,145			224,692			176,405			—		408,242
Professional fees		—			21,140			26,547			—		47,687
Supplies		—			19,467			11,088			—		30,555
Rents and leases		—			8,759			10,981			—		19,740
Other operating expenses		—			51,536			28,212			—		79,748
Depreciation and amortization		—			15,105			21,313			—		36,418
Interest expense, net		13,388			19,258			16,197			—		48,843
Debt extinguishment costs		3,411			—			—			—		3,411
Loss on divestiture		—			—			174,739			—		174,739
Gain on foreign currency derivatives		(15	)		—			—			—		(15	)
Transaction-related expenses		—			—			1,111			—		1,111
Total expenses		23,929			359,957			466,593			—		850,479
(Loss) income from continuing operations before income taxes		(23,929	)		50,721			(142,606	)		—		(115,814	)
Equity in earnings of subsidiaries		(99,875	)		—			—			99,875		—
(Benefit from) provision for income taxes		(5,594	)		38,654			(30,664	)		—		2,396
(Loss) income from continuing operations		(118,210	)		12,067			(111,942	)		99,875		(118,210	)
Income from discontinued operations, net of income taxes		—			—			—			—		—
Net (loss) income		(118,210	)		12,067			(111,942	)		99,875		(118,210	)
Net loss attributable to noncontrolling interests		—			—			402			—		402
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(118,210	)	$	12,067		$	(111,540	)	$	99,875	$	(117,808	)
Other comprehensive loss:
Foreign currency translation loss		—			—			(89,645	)		—		(89,645	)
Gain on derivative instruments		6,387			—			—			—		6,387
Other comprehensive income (loss)		6,387			—			(89,645	)		—		(83,258	)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$	(111,823	)	$	12,067		$	(201,185	)	$	99,875	$	(201,066	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Three Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	377,582		$	111,164		$	—		$	488,746
Provision for doubtful accounts		—			(8,531	)		(485	)		—			(9,016	)
Revenue		—			369,051			110,679			—			479,730
Salaries, wages and benefits		5,327			191,032			62,051			—			258,410
Professional fees		—			21,551			9,208			—			30,759
Supplies		—			17,349			4,285			—			21,634
Rents and leases		—			7,624			918			—			8,542
Other operating expenses		—			47,113			10,131			—			57,244
Depreciation and amortization		—			10,578			6,312			—			16,890
Interest expense, net		15,934			6,036			5,767			—			27,737
Debt extinguishment costs		9,979			—			—			—			9,979
Loss on foreign currency derivatives		1,018			—			—			—			1,018
Transaction-related expenses		—			2,831			3,011			—			5,842
Total expenses		32,258			304,114			101,683			—			438,055
(Loss) income from continuing operations before income taxes		(32,258	)		64,937			8,996			—			41,675
Equity in earnings of subsidiaries		50,840			—			—			(50,840	)		—
(Benefit from) provision for income taxes		(10,504	)		21,383			1,790			—			12,669
Income (loss) from continuing operations		29,086			43,554			7,206			(50,840	)		29,006
Income from discontinued operations, net of income taxes		—			80			—			—			80
Net income (loss)		29,086			43,634			7,206			(50,840	)		29,086
Net loss attributable to noncontrolling interests		—			—			464			—			464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	29,086		$	43,634		$	7,670		$	(50,840	)	$	29,550
Other comprehensive income:
Foreign currency translation gain		—			—			(32,707	)		—			(32,707	)
Other comprehensive income		—			—			(32,707	)		—			(32,707	)
Comprehensive income (loss)	$	29,086		$	43,634		$	(25,037	)	$	(50,840	)	$	(3,157	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income

Nine Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	1,245,227		$	893,812		$	—		$	2,139,039
Provision for doubtful accounts		—			(28,318	)		(2,695	)		—			(31,013	)
Revenue		—			1,216,909			891,117			—			2,108,026
Salaries, wages and benefits		20,989			648,669			487,899			—			1,157,557
Professional fees		—			66,967			71,003			—			137,970
Supplies		—			57,456			30,993			—			88,449
Rents and leases		—			25,857			29,156			—			55,013
Other operating expenses		—			151,485			79,465			—			230,950
Depreciation and amortization		—			42,072			59,073			—			101,145
Interest expense, net		37,452			57,394			40,469			—			135,315
Debt extinguishment costs		3,411			—			—			—			3,411
Loss on divestiture		—			—			174,739			—			174,739
Gain on foreign currency derivatives		(523	)		—			—			—			(523	)
Transaction-related expenses		—			25,624			7,859			—			33,483
Total expenses		61,329			1,075,524			980,656			—			2,117,509
(Loss) income from continuing operations before income taxes		(61,329	)		141,385			(89,539	)		—			(9,483	)
Equity in earnings of subsidiaries		8,937			—			—			(8,937	)		—
(Benefit from) provision for income taxes		(15,142	)		62,247			(19,338	)		—			27,767
(Loss) income from continuing operations		(37,250	)		79,138			(70,201	)		(8,937	)		(37,250	)
Income from discontinued operations, net of income taxes		—			—			—			—			—
Net (loss) income		(37,250	)		79,138			(70,201	)		(8,937	)		(37,250	)
Net loss attributable to noncontrolling interests		—			—			1,575			—			1,575
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$	(37,250	)	$	79,138		$	(68,626	)	$	(8,937	)	$	(35,675	)
Other comprehensive loss:
Foreign currency translation loss		—			—			(351,528	)		—			(351,528	)
Gain on derivative instruments		30,306			—			—			—			30,306
Other comprehensive income (loss)		30,306			—			(351,528	)		—			(321,222	)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$	(6,944	)	$	79,138		$	(420,154	)	$	(8,937	)	$	(356,897	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Nine Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	1,029,198		$	295,504		$	—		$	1,324,702
Provision for doubtful accounts		—			(23,516	)		(2,013	)		—			(25,529	)
Revenue		—			1,005,682			293,491			—			1,299,173
Salaries, wages and benefits		14,576			530,221			162,786			—			707,583
Professional fees		—			60,615			22,600			—			83,215
Supplies		—			47,287			11,143			—			58,430
Rents and leases		—			20,143			2,496			—			22,639
Other operating expenses		—			122,505			26,394			—			148,899
Depreciation and amortization		—			29,840			15,080			—			44,920
Interest expense, net		46,988			17,639			13,305			—			77,932
Debt extinguishment costs		9,979			—			—			—			9,979
Loss on foreign currency derivatives		1,926			—			—			—			1,926
Transaction-related expenses		—			24,193			7,222			—			31,415
Total expenses		73,469			852,443			261,026			—			1,186,938
(Loss) income from continuing operations before income taxes		(73,469	)		153,239			32,465			—			112,235
Equity in earnings of subsidiaries		127,108			—			—			(127,108	)		—
(Benefit from) provision for income taxes		(23,885	)		50,634			8,045			—			34,794
Income (loss) from continuing operations		77,524			102,605			24,420			(127,108	)		77,441
Income from discontinued operations, net of income taxes		—			83			—			—			83
Net income (loss)		77,524			102,688			24,420			(127,108	)		77,524
Net loss attributable to noncontrolling interests		—			—			464			—			464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	77,524		$	102,688		$	24,884		$	(127,108	)	$	77,988
Other comprehensive income:
Foreign currency translation gain		—			—			(15,923	)		—			(15,923	)
Other comprehensive income		—			—			(15,923	)		—			(15,923	)
Comprehensive income (loss)	$	77,524		$	102,688		$	8,961		$	(127,108	)	$	62,065

Summary of Condensed Consolidating Statement of Cash Flows

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2016

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net (loss) income	$	(37,250	)	$	79,138		$	(70,201	)	$	(8,937	)	$	(37,250	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(8,937	)		—			—			8,937			—
Depreciation and amortization		—			42,072			59,073			—			101,145
Amortization of debt issuance costs		8,035			—			(321	)		—			7,714
Equity-based compensation expense		20,989			—			—			—			20,989
Deferred income tax (benefit) expense		—			26,381			(524	)		—			25,857
Loss from discontinued operations, net of taxes		—			—			—			—			—
Debt extinguishment costs		3,411			—			—			—			3,411
Loss on divestiture		—			—			174,739			—			174,739
Gain on foreign currency derivatives		(523	)		—			—			—			(523	)
Other		—			826			(95	)		—			731
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(26,055	)		13,476			—			(12,579	)
Other current assets		—			(4,901	)		(8,072	)		—			(12,973	)
Other assets		(2,780	)		(818	)		(316	)		2,780			(1,134	)
Accounts payable and other accrued liabilities		—			31,633			(29,566	)		—			2,067
Accrued salaries and benefits		—			3,527			(14,286	)		—			(10,759	)
Other liabilities		—			5,975			(2,229	)		—			3,746
Net cash (used in) provided by continuing operating activities		(17,055	)		157,778			121,678			2,780			265,181
Net cash used in discontinued operating activities		—			(5,524	)		—			—			(5,524	)
Net cash (used in) provided by operating activities		(17,055	)		152,254			121,678			2,780			259,657
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(103,189	)		(580,096	)		—			(683,285	)
Cash paid for capital expenditures		—			(142,626	)		(107,335	)		—			(249,961	)
Cash paid for real estate acquisitions		—			(26,146	)		(11,801	)		—			(37,947	)
Settlement of foreign currency derivatives		—			523			—			—			523
Other		—			(1,135	)		—			—			(1,135	)
Net cash used in investing activities		—			(272,573	)		(699,232	)		—			(971,805	)
Financing activities:
Borrowings on long-term debt		1,480,000			—			—			—			1,480,000
Borrowings on revolving credit facility		179,000			—			—			—			179,000
Principal payments on revolving credit facility		(166,000	)		—			—			—			(166,000	)
Principal payments on long-term debt		(46,069	)		—			(2,780	)		2,780			(46,069	)
Repayment of assumed debt		(1,348,389	)		—			—			—			(1,348,389	)
Payment of debt issuance costs		(35,748	)		—			—			—			(35,748	)
Issuance of common stock		685,097			—			—			—			685,097
Common stock withheld for minimum statutory taxes, net		(7,917	)		—			—			—			(7,917	)
Excess tax benefit from equity awards		—			—			—			—			—
Other		—			(1,821	)		—			—			(1,821	)
Cash (used in) provided by intercompany activity		(722,919	)		125,313			603,166			(5,560	)		—
Net cash provided by (used in) financing activities		17,055			123,492			600,386			(2,780	)		738,153
Effect of exchange rate changes on cash		—			—			(9,469	)		—			(9,469	)
Net increase in cash and cash equivalents		—			3,173			13,363			—			16,536
Cash and cash equivalents at beginning of the period		—			1,987			9,228			—			11,215
Cash and cash equivalents at end of the period	$	—		$	5,160		$	22,591		$	—		$	27,751

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2015

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net income (loss)	$	77,524		$	102,688		$	24,420		$	(127,108	)	$	77,524
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(127,108	)		—			—			127,108			—
Depreciation and amortization		—			29,840			15,080			—			44,920
Amortization of debt issuance costs		5,347			—			(330	)		—			5,017
Equity-based compensation expense		14,576			—			—			—			14,576
Deferred income tax (benefit) expense		(58	)		27,035			1,948			—			28,925
Loss from discontinued operations, net of taxes		—			(83	)		—			—			(83	)
Debt extinguishment costs		9,979			—			—			—			9,979
Loss (gain) on foreign currency derivatives		1,926			—			—			—			1,926
Other		—			1,088			34			—			1,122
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(16,535	)		(12,370	)		—			(28,905	)
Other current assets		—			(14,287	)		2,086			—			(12,201	)
Other assets		(300	)		(4,881	)		2			300			(4,879	)
Accounts payable and other accrued liabilities		—			(10,510	)		2,194			—			(8,316	)
Accrued salaries and benefits		—			7,953			935			—			8,888
Other liabilities		—			5,821			(750	)		—			5,071
Net cash (used in) provided by continuing operating activities		(18,114	)		128,129			33,249			300			143,564
Net cash provided by discontinued operating activities		—			(1,479	)		—			—			(1,479	)
Net cash (used in) provided by operating activities		(18,114	)		126,650			33,249			300			142,085
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(88,308	)		(302,908	)		—			(391,216	)
Cash paid for capital expenditures		—			(116,466	)		(84,375	)		—			(200,841	)
Cash paid for real estate acquisitions		—			(21,976	)		—			—			(21,976	)
Settlement of foreign currency derivatives		—			(1,926	)		—			—			(1,926	)
Other		—			(887	)		—			—			(887	)
Net cash used in investing activities		—			(229,563	)		(387,283	)		—			(616,846	)
Financing activities:
Borrowings on long-term debt		1,150,000			—			—			—			1,150,000
Borrowings on revolving credit facility		310,000			—			—			—			310,000
Principal payments on revolving credit facility		(310,000	)		—			—			—			(310,000	)
Principal payments on long-term debt		(23,813	)		—			(300	)		300			(23,813	)
Repayment of assumed CRC debt		(904,467	)		—			—			—			(904,467	)
Repayments of senior notes		(88,331	)		—			—			—			(88,331	)
Payment of debt issuance costs		(25,584	)		—			—			—			(25,584	)
Payment of premium on senior notes		(6,890	)		—			—			—			(6,890	)
Issuance of Common Stock		—			331,360			—			—			331,360
Common stock withheld for minimum statutory taxes, net		(7,582	)		—			—			—			(7,582	)
Excess tax benefit from equity awards		8,020			—			—			—			8,020
Other		—			(374	)		—			—			(374	)
Cash provided by (used in) intercompany activity		(83,239	)		(257,037	)		340,876			(600	)		—
Net cash provided by (used in) financing activities		18,114			73,949			340,576			(300	)		432,339
Effect of exchange rate changes on cash		—			(856	)		—			—			(856	)
Net (decrease) increase in cash and cash equivalents		—			(29,820	)		(13,458	)		—			(43,278	)
Cash and cash equivalents at beginning of the period		—			76,685			17,355			—			94,040
Cash and cash equivalents at end of the period	$	—		$	46,865		$	3,897		$	—		$	50,762

XML

Description of Business and Basis of Presentation - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2016 State Beds Facilities
Accounting Policies [Abstract]
Number of facilities | Facilities	589
Number of beds | Beds	17,900
Number of operating states | State	39

XML

Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Basic and diluted earnings per share attributable to Acadia Healthcare Company, Inc.:
(Loss) income from continuing operations	$ (117,808)	$ 29,470	$ (35,675)	$ 77,905
Income from discontinued operations		80		83
Net (loss) income attributable to Acadia Healthcare Company, Inc.	$ (117,808)	$ 29,550	$ (35,675)	$ 77,988
Denominator:
Weighted average shares outstanding for basic earnings per share	86,618	70,664	85,376	67,194
Effect of dilutive instruments		446		345
Shares used in computing diluted earnings per common share	86,618	71,110	85,376	67,539
Basic earnings per share:
(Loss) income from continuing operations	$ (1.36)	$ 0.42	$ (0.42)	$ 1.16
Income from discontinued operations	0	0	0	0
Net (loss) income	(1.36)	0.42	(0.42)	1.16
Diluted earnings per share:
(Loss) income from continuing operations	(1.36)	0.42	(0.42)	1.15
Income from discontinued operations	0	0	0	0
Net (loss) income	$ (1.36)	$ 0.42	$ (0.42)	$ 1.15

XML

Earnings Per Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items]
Excluded common stock for computation of diluted earnings per share		0.3		0.9
Restricted Stock [Member]
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items]
Excluded common stock for computation of diluted earnings per share	0.2
Stock Options [Member]
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items]
Excluded common stock for computation of diluted earnings per share			0.3

XML

Acquisitions - 2016 US Acquisitions - Additional Information (Detail)	Jun. 01, 2016 USD ($) Beds	May 01, 2016 USD ($) Beds	Apr. 01, 2016 USD ($) Beds
Pocono Mountain Recovery Center [Member]
Business Acquisition [Line Items]
Number of beds | Beds	108
Business acquisition total consideration	$ 25,200,000
Cash payments for earn-out agreement	$ 5,000,000
Serenity Knolls Inc [Member]
Business Acquisition [Line Items]
Number of beds | Beds			30
Business acquisition cash paid			$ 9,700,000
Tennessee [Member] | TrustPoint Hospital [Member]
Business Acquisition [Line Items]
Number of beds | Beds		100
Business acquisition cash paid		$ 62,700,000

XML

Acquisitions - Priory Acquisition - Additional Information (Detail) - Priory [Member] $ in Billions	Feb. 16, 2016 USD ($) Bed Facility shares
Business Acquisition [Line Items]
Total consideration related to acquisition	$ 2.2
Business acquisition cash paid	$ 1.9
Shares issued for acquisition | shares	4,033,561
Number of facilities acquired | Facility	324
Number of beds | Bed	7,100

XML

Acquisitions - Planned UK Divestiture - Additional Information (Detail) $ in Thousands, € in Millions		3 Months Ended		9 Months Ended
	Oct. 18, 2016 EUR (€) Bed Facility	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)
Business Acquisition [Line Items]
Assets held for sale		$ 392,483		$ 392,483
Loss on divestiture		(174,739)		(174,739)
Revenue		734,665	$ 479,730	2,108,026	$ 1,299,173
Income from continuing operations before income taxes		(115,814)	41,675	(9,483)	112,235
Allocation of Goodwill [Member]
Business Acquisition [Line Items]
Loss on divestiture				106,900
Estimated Transaction Related Expense [Member]
Business Acquisition [Line Items]
Loss on divestiture				25,600
Loss on Sale of Properties [Member]
Business Acquisition [Line Items]
Loss on divestiture				42,200
U.K. Disposal Group [Member]
Business Acquisition [Line Items]
Revenue		45,600	16,600	125,100	42,100
Income from continuing operations before income taxes		$ 3,200	$ 4,600	$ 12,200	$ 12,400
Subsequent Event [Member]
Business Acquisition [Line Items]
Number of beds to be sold | Bed	1,000
Cash received from sale of business | €	€ 320
Subsequent Event [Member] | U.K. Behavioral Health Facilities [Member]
Business Acquisition [Line Items]
Number of facilities to be sold | Facility	21
Subsequent Event [Member] | De novo Behavioral Health Facility [Member]
Business Acquisition [Line Items]
Number of facilities to be sold | Facility	1

XML

Acquisitions - 2015 US Acquisitions - Additional Information (Detail) $ in Millions	Dec. 01, 2015 USD ($) Beds Facility	Nov. 01, 2015 USD ($) State Beds Center	Jul. 01, 2015 USD ($) Beds	Mar. 01, 2015 USD ($) Center	Feb. 11, 2015 USD ($) State Beds Center Facilities shares	Sep. 30, 2016 State	Aug. 31, 2015 USD ($)
Business Acquisition [Line Items]
Number of operating states | State						39
MMO Behavioral Health Systems [Member]
Business Acquisition [Line Items]
Number of beds | Beds	80
Business acquisition cash paid	$ 20.2
Number of facilities acquired | Facility	2
Discovery House-Group Inc [Member]
Business Acquisition [Line Items]
Business acquisition cash paid		$ 118.3
Number of facilities acquired | Center		19
Number of operating states | State		4
Duffys Napa Valley Rehab [Member]
Business Acquisition [Line Items]
Number of beds | Beds		61
Business acquisition cash paid		$ 29.6
Quality Addiction Management [Member]
Business Acquisition [Line Items]
Business acquisition cash paid				$ 54.8
Number of facilities acquired | Center				7
CRC Health Group, Inc [Member]
Business Acquisition [Line Items]
Number of facilities acquired | Center					81
Number of operating states | State					30
Total consideration related to acquisition					$ 1,300.0
Shares issued for acquisition | shares					5,975,326
Outstanding indebtedness of CRC repaid					$ 904.5
Number of inpatient facilities | Facilities					35
CRC Health Group, Inc [Member] | Minimum [Member]
Business Acquisition [Line Items]
Number of beds | Beds					2,400
Massachusetts [Member] | Southcoast Behavioral [Member]
Business Acquisition [Line Items]
Approximate value of noncontrolling interest							$ 9.2
Equity ownership interests percentage in the facility							75.00%
Percentage of noncontrolling interests in the facility							25.00%
Pennsylvania [Member] | Belmont Behavioral Health [Member]
Business Acquisition [Line Items]
Number of beds | Beds			147
Business acquisition cash paid			$ 39.0
Total consideration related to acquisition			35.0
Working capital settlement			$ 4.0

XML

Acquisitions - 2015 UK Acquisitions - Additional Information (Detail) - United Kingdom [Member] $ in Millions	Nov. 01, 2015 USD ($) Beds	Oct. 01, 2015 USD ($) Beds	Sep. 01, 2015 USD ($) Beds Facility	Jul. 01, 2015 USD ($) Beds	Jun. 01, 2015 USD ($) Beds Facility	Apr. 01, 2015 USD ($) Beds Facility
Care UK Limited [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $					$ 88.2
Number of beds | Beds					299
Number of facilities acquired | Facility					15
Choice Lifestyles [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $					$ 25.9	$ 37.5
Number of beds | Beds					42	48
Number of facilities acquired | Facility					1	2
Pastoral Care Group [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $						$ 34.2
Number of beds | Beds						65
Number of facilities acquired | Facility						2
Mildmay Oaks [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $						$ 14.9
Number of beds | Beds						67
Cleveland House [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $	$ 10.3
Number of beds | Beds	32
Meadow View [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $		$ 6.8
Number of beds | Beds		28
Health and Social Care Partnerships [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $			$ 26.2
Number of beds | Beds			50
Number of facilities acquired | Facility			2
The Danshell Group [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $			$ 59.8
Number of beds | Beds			73
Number of facilities acquired | Facility			3
Manor Hall [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $			$ 14.0
Number of beds | Beds			26
The Manor Clinic [Member]
Business Acquisition [Line Items]
Business acquisition cash paid | $				$ 5.9
Number of beds | Beds				15

XML

Acquisitions - Summary of Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Business Acquisition [Line Items]
Goodwill associated with domestic acquisitions	$ 2,702,009	$ 2,128,215
Domestic Acquisitions in 2015 and 2014 [Member]
Business Acquisition [Line Items]
Goodwill associated with domestic acquisitions	$ 374,400		$ 374,400

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Acquisitions - Priory Acquisition (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill	$ 2,702,009	$ 2,128,215
2016 Acquisitions [Member]
Business Acquisition [Line Items]
Cash	12,741
Accounts receivable	62,121
Prepaid expenses and other current assets	8,064
Property and equipment	1,638,706
Goodwill	765,171
Intangible assets	23,538
Other assets	7,807
Total assets acquired	2,518,148
Accounts payable	25,008
Accrued salaries and benefits	40,385
Other accrued expenses	48,456
Deferred tax liabilities - noncurrent	67,598
Long-term debt	1,348,389
Other liabilities	75,404
Total liabilities assumed	1,605,240
Net assets acquired	912,908
Priory [Member] | 2016 Acquisitions [Member]
Business Acquisition [Line Items]
Cash	10,253
Accounts receivable	57,832
Prepaid expenses and other current assets	7,921
Property and equipment	1,603,306
Goodwill	669,965
Intangible assets	23,200
Other assets	7,760
Total assets acquired	2,380,237
Accounts payable	24,203
Accrued salaries and benefits	39,588
Other accrued expenses	48,066
Deferred tax liabilities - noncurrent	67,598
Long-term debt	1,348,389
Other liabilities	45,162
Total liabilities assumed	1,573,006
Net assets acquired	807,231
Other [Member] | 2016 Acquisitions [Member]
Business Acquisition [Line Items]
Cash	2,488
Accounts receivable	4,289
Prepaid expenses and other current assets	143
Property and equipment	35,400
Goodwill	95,206
Intangible assets	338
Other assets	47
Total assets acquired	137,911
Accounts payable	805
Accrued salaries and benefits	797
Other accrued expenses	390
Other liabilities	30,242
Total liabilities assumed	32,234
Net assets acquired	$ 105,677

XML

Acquisitions - Summary of Acquisitions (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill	$ 2,702,009	$ 2,128,215
2015 Acquisitions [Member]
Business Acquisition [Line Items]
Cash		24,933
Accounts receivable		68,299
Prepaid expenses and other current assets		29,500
Property and equipment		409,306
Goodwill		1,364,065
Intangible assets		37,204
Deferred tax assets-noncurrent		74,383
Other assets		6,529
Total assets acquired		2,014,219
Accounts payable		9,702
Accrued salaries and benefits		18,027
Other accrued expenses		43,920
Deferred tax liabilities - noncurrent		13,541
Debt		904,467
Other liabilities		34,730
Total liabilities assumed		1,024,387
Redeemable noncontrolling interests		9,132
Net assets acquired		980,700
Other [Member] | 2015 Acquisitions [Member]
Business Acquisition [Line Items]
Cash		5,334
Accounts receivable		21,264
Prepaid expenses and other current assets		2,555
Property and equipment		273,143
Goodwill		320,464
Intangible assets		204
Other assets		51
Total assets acquired		623,015
Accounts payable		4,961
Accrued salaries and benefits		3,200
Other accrued expenses		5,047
Deferred tax liabilities - noncurrent		13,541
Other liabilities		10
Total liabilities assumed		26,759
Redeemable noncontrolling interests		9,132
Net assets acquired		587,124
CRC Health Group, Inc [Member] | 2015 Acquisitions [Member]
Business Acquisition [Line Items]
Cash		19,599
Accounts receivable		47,035
Prepaid expenses and other current assets		26,945
Property and equipment		136,163
Goodwill		1,043,601
Intangible assets		37,000
Deferred tax assets-noncurrent		74,383
Other assets		6,478
Total assets acquired		1,391,204
Accounts payable		4,741
Accrued salaries and benefits		14,827
Other accrued expenses		38,873
Debt		904,467
Other liabilities		34,720
Total liabilities assumed		997,628
Net assets acquired		$ 393,576

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Acquisitions - Other (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Combinations [Abstract]
Legal, accounting and other costs	$ 1,111	$ 5,261	$ 17,212	$ 14,315
Advisory and financing commitment fees			14,850	10,337
Severance and contract termination costs		581	1,421	6,763
Transaction-related expenses	$ 1,111	$ 5,842	$ 33,483	$ 31,415

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Acquisitions - Pro Forma Information - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Acquisition [Line Items]
Revenue	$ 734,665	$ 479,730	$ 2,108,026	$ 1,299,173
(Loss) income from continuing operations before income taxes	(115,814)	41,675	(9,483)	112,235
Acquisitions 2015 and 2016 [Member]
Business Acquisition [Line Items]
Revenue	412,900		1,100,000
(Loss) income from continuing operations before income taxes	$ (114,300)		$ (68,500)
Acquisitions 2015 [Member]
Business Acquisition [Line Items]
Revenue		165,800		375,600
(Loss) income from continuing operations before income taxes		$ 38,700		$ 156,600

XML

Acquisitions - Pro Forma Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Combinations [Abstract]
Revenue	$ 734,665	$ 737,263	$ 2,232,285	$ 2,185,600
(Loss) income from continuing operations, before income taxes	$ (115,814)	$ 39,130	$ (27,529)	$ 110,559

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Other Intangible Assets - Other Identifiable Intangible Assets and Related Accumulated Amortization (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule Of Finite and Indefinite Lived Other Intangible Assets [Line Items]
Intangible assets subject to amortization, Gross Carrying Amount	$ 3,347	$ 3,347
Intangible assets not subject to amortization, Gross Carrying Amount	84,350	59,225
Total	87,697	62,572
Intangible assets subject to amortization, Accumulated Amortization	(3,312)	(2,997)
Contract Intangible Assets [Member]
Schedule Of Finite and Indefinite Lived Other Intangible Assets [Line Items]
Intangible assets subject to amortization, Gross Carrying Amount	2,100	2,100
Intangible assets subject to amortization, Accumulated Amortization	(2,065)	(1,750)
Non-Compete Agreements [Member]
Schedule Of Finite and Indefinite Lived Other Intangible Assets [Line Items]
Intangible assets subject to amortization, Gross Carrying Amount	1,247	1,247
Intangible assets subject to amortization, Accumulated Amortization	(1,247)	(1,247)
Licenses and Accreditations [Member]
Schedule Of Finite and Indefinite Lived Other Intangible Assets [Line Items]
Intangible assets not subject to amortization, Gross Carrying Amount	12,382	11,479
Trade Names [Member]
Schedule Of Finite and Indefinite Lived Other Intangible Assets [Line Items]
Intangible assets not subject to amortization, Gross Carrying Amount	58,551	37,800
Certificates of Need [Member]
Schedule Of Finite and Indefinite Lived Other Intangible Assets [Line Items]
Intangible assets not subject to amortization, Gross Carrying Amount	$ 13,417	$ 9,946

XML

Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 0.1	$ 0.1	$ 0.3	$ 0.4
Estimated amortization expense, remainder of 2016	0.4		0.4
Estimated amortization expense, 2017	0.0		0.0
Estimated amortization expense, 2018	0.0		0.0
Estimated amortization expense, 2019	0.0		0.0
Estimated amortization expense, 2020	$ 0.0		$ 0.0

XML

Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,977,729	$ 1,828,523
Less accumulated depreciation	(191,083)	(119,470)
Property and equipment, net	2,786,646	1,709,053
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	430,179	214,138
Building and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,081,246	1,277,800
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	320,234	141,543
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 146,070	$ 195,042

XML

Long-Term Debt - Components of Long-Term Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 21, 2015
Debt Instrument [Line Items]
Less: unamortized debt issuance costs, discount and premium	$ (61,615)	$ (35,416)
Long-term debt	3,661,477	2,240,744
Long-term debt	3,661,477	2,240,744
Less: current portion	(77,598)	(45,360)
Long-term debt	3,583,879	2,195,384
6.125% Senior Notes Due 2021 [Member]
Debt Instrument [Line Items]
Senior Notes	150,000	150,000
5.125% Senior Notes Due 2022 [Member]
Debt Instrument [Line Items]
Senior Notes	300,000	300,000
5.625% Senior Notes Due 2023 [Member]
Debt Instrument [Line Items]
Senior Notes	650,000	650,000	$ 650,000
6.500% Senior Notes Due 2024 [Member]
Debt Instrument [Line Items]
Senior Notes	390,000
Amended and Restated Senior Credit Facility [Member] | Senior Secured Term A Loans [Member]
Debt Instrument [Line Items]
Senior Secured	600,594	500,750
Amended and Restated Senior Credit Facility [Member] | Senior Secured Term B Loans [Member]
Debt Instrument [Line Items]
Senior Secured	1,439,088	495,000
Amended and Restated Senior Credit Facility [Member] | Senior Secured Revolving Line of Credit [Member]
Debt Instrument [Line Items]
Senior Secured	171,000	158,000
9.0% and 9.5% Revenue Bonds [Member]
Debt Instrument [Line Items]
9.0% and 9.5% Revenue Bonds	$ 22,410	$ 22,410

XML

Long-Term Debt - Components of Long-Term Debt (Parenthetical) (Detail)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Feb. 16, 2016	Sep. 21, 2015	Feb. 11, 2015	Jul. 01, 2014	Mar. 12, 2013
6.125% Senior Notes Due 2021 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	6.125%	6.125%					6.125%
Senior notes maturity year	2021	2021
5.125% Senior Notes Due 2022 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	5.125%	5.125%				5.125%
Senior notes maturity year	2022	2022
5.625% Senior Notes Due 2023 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	5.625%	5.625%		5.625%	5.625%
Senior notes maturity year	2023	2023
6.500% Senior Notes Due 2024 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	6.50%		6.50%
Senior notes maturity year	2024
9.0% Revenue Bonds [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	9.00%	9.00%
9.5% Revenue Bonds [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	9.50%	9.50%

XML

Long-Term Debt (Amended and Restated Senior Credit Facility) - Additional Information (Detail) - USD ($)									3 Months Ended					9 Months Ended
	Sep. 21, 2016	Sep. 20, 2016	May 26, 2016	May 25, 2016	Feb. 16, 2016	Dec. 15, 2015	Dec. 31, 2012	Apr. 01, 2011	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Feb. 11, 2015	Feb. 06, 2015	Dec. 15, 2014
Debt Instrument [Line Items]
Debt extinguishment costs										$ (3,411,000)			$ (9,979,000)	$ (3,411,000)	$ (9,979,000)
Amended and Restated Senior Credit Facility [Member]
Debt Instrument [Line Items]
Date entered into an agreement							Dec. 31, 2012	Apr. 01, 2011
Additional term loans					$ 135,000,000
Amount available under revolving line of credit										120,600,000				$ 120,600,000
Debt instrument maturity date						Feb. 13, 2019								Feb. 11, 2022
Term loan repayments												$ 1,300,000
Consolidated funded debt, unrestricted and unencumbered cash to consolidated EBITDA																		$ 40,000,000
Amended and Restated Senior Credit Facility [Member] | Tranche B-2 Repricing Amendment [Member]
Debt Instrument [Line Items]
Debt extinguishment costs														$ 3,400,000
Amended and Restated Senior Credit Facility [Member] | Seventh Amendment [Member]
Debt Instrument [Line Items]
Date entered into an agreement														Feb. 06, 2015
Amended and Restated Senior Credit Facility [Member] | Ninth Amendment [Member]
Debt Instrument [Line Items]
Date entered into an agreement														Jan. 25, 2016
Restrictive covenants on investments, Description														The Ninth Amendment modifies certain definitions and provides increased flexibility to the Company in terms of its financial covenants. The Company’s baskets for permitted investments were also increased to provide increased flexibility for it to invest in non-wholly owned subsidiaries, joint ventures and foreign subsidiaries. The Company may now invest in non-wholly owned subsidiaries and joint ventures up to 10.0% of the Company and its subsidiaries’ total assets in any four consecutive fiscal quarter period, and up to 12.5% of the Company and its subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. The Company may also invest in foreign subsidiaries that are not loan parties up to 10% of the Company and its subsidiaries’ total assets in any consecutive four fiscal quarter period, and up to 15% of the Company and its subsidiaries’ total assets during the term of the Amended and Restated Credit Agreement. The foregoing permitted investments are subject to an aggregate cap of 25% of the Company and its subsidiaries’ total assets in any fiscal year.
Amended and Restated Senior Credit Facility [Member] | Second Incremental Amendment [Member]
Debt Instrument [Line Items]
Date entered into an agreement														Feb. 16, 2016
New incremental Term Loan B facility					955,000,000
Amended and Restated Senior Credit Facility [Member] | Senior Secured Revolving Line of Credit [Member]
Debt Instrument [Line Items]
Line of credit					$ 300,000,000
Amended and Restated Senior Credit Facility [Member] | TLB Facility Due on February 16, 2023 [Member]
Debt Instrument [Line Items]
Term loan repayments												$ 2,400,000
Amended and Restated Senior Credit Facility [Member] | Letter of Credit [Member] | Seventh Amendment [Member]
Debt Instrument [Line Items]
Line of credit																	$ 20,000,000
Amended and Restated Senior Credit Facility [Member] | Swing Line Sublimit [Member] | Seventh Amendment [Member]
Debt Instrument [Line Items]
Line of credit																	$ 20,000,000
Amended and Restated Senior Credit Facility [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Interest on borrowings														3.25%
Basis spread on variable rate														1.00%
Amended and Restated Senior Credit Facility [Member] | Eurodollar [Member] | Tranche B-1 Repricing Amendment [Member]
Debt Instrument [Line Items]
Interest on borrowings			3.00%	3.50%
Amended and Restated Senior Credit Facility [Member] | Eurodollar [Member] | Tranche B-2 Repricing Amendment [Member]
Debt Instrument [Line Items]
Interest on borrowings	3.00%	3.75%
Amended and Restated Senior Credit Facility [Member] | Base Rate Loans [Member]
Debt Instrument [Line Items]
Interest on borrowings														2.25%
Basis spread on variable rate														0.50%
Amended and Restated Senior Credit Facility [Member] | Base Rate Loans [Member] | Tranche B-1 Repricing Amendment [Member]
Debt Instrument [Line Items]
Interest on borrowings			2.00%	2.50%
Amended and Restated Senior Credit Facility [Member] | Base Rate Loans [Member] | Tranche B-2 Repricing Amendment [Member]
Debt Instrument [Line Items]
Interest on borrowings	2.00%	2.75%
Amended and Restated Senior Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Interest on borrowings														3.25%
Amended and Restated Senior Credit Facility [Member] | Senior Debt Obligations [Member] | First Incremental Amendment [Member]
Debt Instrument [Line Items]
Date entered into an agreement														Feb. 11, 2015
Line of credit																$ 500,000,000
Amended and Restated Senior Credit Facility [Member] | September 30, 2016 to December 31, 2016 [Member]
Debt Instrument [Line Items]
Term loan principal repayments						$ 12,600,000
Term loan repayments											$ 1,300,000
Amended and Restated Senior Credit Facility [Member] | September 30, 2016 to December 31, 2016 [Member] | TLB Facility Due on February 16, 2023 [Member]
Debt Instrument [Line Items]
Term loan repayments											$ 2,400,000
Amended and Restated Senior Credit Facility [Member] | September 30, 2015 to December 31, 2015 [Member]
Debt Instrument [Line Items]
Term loan repayments										1,300,000
Amended and Restated Senior Credit Facility [Member] | September 30, 2015 to December 31, 2015 [Member] | TLB Facility Due on February 16, 2023 [Member]
Debt Instrument [Line Items]
Term loan repayments										$ 2,400,000
Amended and Restated Senior Credit Facility [Member] | March 31, 2017 to December 31, 2017 [Member]
Debt Instrument [Line Items]
Term loan principal repayments						16,800,000
Amended and Restated Senior Credit Facility [Member] | March 31, 2017 to December 31, 2017 [Member] | Scenario, Forecast [Member]
Debt Instrument [Line Items]
Term loan repayments									$ 1,300,000
Amended and Restated Senior Credit Facility [Member] | March 31, 2017 to December 31, 2017 [Member] | Scenario, Forecast [Member] | TLB Facility Due on February 16, 2023 [Member]
Debt Instrument [Line Items]
Term loan repayments									$ 2,400,000
Amended and Restated Senior Credit Facility [Member] | March 31, 2018 to December 31, 2018 [Member]
Debt Instrument [Line Items]
Term loan principal repayments						$ 20,900,000

XML

Long-Term Debt (6.125% Senior Notes due 2021) - Additional Information (Detail) - 6.125% Senior Notes Due 2021 [Member] - USD ($)		9 Months Ended
	Mar. 12, 2013	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Issued Senior Notes	$ 150,000,000
Debt instrument interest rate	6.125%	6.125%	6.125%
Debt instrument maturity date	Mar. 15, 2021
Interest on the notes		Payable semi-annually in arrears on March 15 and September 15 of each year.

XML

Long-Term Debt (5.125% Senior Notes due 2022) - Additional Information (Detail) - 5.125% Senior Notes Due 2022 [Member] - USD ($)		9 Months Ended
	Jul. 01, 2014	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Issued Senior Notes	$ 300,000,000
Debt instrument interest rate	5.125%	5.125%	5.125%
Debt instrument maturity date	Jul. 01, 2022
Interest on the notes		Payable semi-annually in arrears on January 1 and July 1 of each year.

XML

Long-Term Debt (5.625% Senior Notes due 2023) - Additional Information (Detail) - 5.625% Senior Notes Due 2023 [Member] - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 21, 2015	Feb. 11, 2015
Debt Instrument [Line Items]
Issued Senior Notes			$ 275,000,000	$ 375,000,000
Debt instrument interest rate	5.625%	5.625%	5.625%	5.625%
Debt instrument maturity date	Feb. 15, 2023
Senior Notes	$ 650,000,000	$ 650,000,000	$ 650,000,000

XML

Long-Term Debt (6.500% Senior Notes due 2024) - Additional Information (Detail) - 6.500% Senior Notes Due 2024 [Member] - USD ($)		9 Months Ended
	Feb. 16, 2016	Sep. 30, 2016
Debt Instrument [Line Items]
Issued Senior Notes	$ 390,000,000
Debt instrument interest rate	6.50%	6.50%
Debt instrument maturity date	Mar. 01, 2024
Interest on the notes		Payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2016.

XML

Long-Term Debt (9.0% and 9.5% Revenue Bonds) - Additional Information (Detail) - USD ($) $ in Thousands	Nov. 11, 2012	Sep. 30, 2016	Dec. 31, 2015
9.0% and 9.5% Revenue Bonds [Member]
Debt Instrument [Line Items]
9.0% and 9.5% Revenue Bonds		$ 22,410	$ 22,410
9.0% and 9.5% Revenue Bonds [Member] | Park Royal [Member]
Debt Instrument [Line Items]
9.0% and 9.5% Revenue Bonds	$ 23,000
Debt service reserve fund within other assets		$ 2,300	$ 2,300
Debt instrument premium	2,600
9.0% and 9.5% Revenue Bonds [Member] | Fair Value Measurement [Member] | Park Royal [Member]
Debt Instrument [Line Items]
9.0% and 9.5% Revenue Bonds	25,600
9.0% Revenue Bonds [Member]
Debt Instrument [Line Items]
Debt instrument interest rate		9.00%	9.00%
9.0% Revenue Bonds [Member] | Park Royal [Member]
Debt Instrument [Line Items]
9.0% and 9.5% Revenue Bonds	$ 7,500
Debt instrument interest rate	9.00%
Debt instrument maturity date	Dec. 01, 2030
9.5% Revenue Bonds [Member]
Debt Instrument [Line Items]
Debt instrument interest rate		9.50%	9.50%
9.5% Revenue Bonds [Member] | Park Royal [Member]
Debt Instrument [Line Items]
9.0% and 9.5% Revenue Bonds	$ 15,500
Debt instrument interest rate	9.50%
Debt instrument maturity date	Dec. 01, 2040

XML

Equity Offerings - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands					9 Months Ended
	Feb. 16, 2016	Jan. 12, 2016	May 11, 2015	Feb. 11, 2015	Sep. 30, 2016	Sep. 30, 2015	Mar. 03, 2016	Dec. 31, 2015
Equity [Line Items]
Common stock, shares authorized					180,000,000		180,000,000	90,000,000
Common stock offered		11,500,000	5,175,000		86,654,021			70,745,746
Common stock offer price		$ 61.00	$ 66.50		$ 0.01			$ 0.01
Underwriting discount amount		$ 15,800	$ 12,000
Additional offering-related costs		700	800
Net proceeds from sale of shares		$ 685,000	$ 331,300		$ 216,882	$ 380,210
CRC Health Group, Inc [Member]
Equity [Line Items]
Total consideration related to acquisition				$ 1,300,000
Shares issued for acquisition				5,975,326
Priory [Member]
Equity [Line Items]
Total consideration related to acquisition	$ 2,200,000
Shares issued for acquisition	4,033,561

XML

Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized common stock	8,200,000		8,200,000
Equity incentive plan available for future grant	4,662,863		4,662,863
Annual increments in employee grants			25.00%
Stock options, contractual term			10 years
Equity-based compensation expense	$ 7,145	$ 5,327	$ 20,989	$ 14,576
Unrecognized compensation expense related to unvested options			$ 59,400
Vesting period			1 year 4 months 24 days
Warrants outstanding	0		0
Deferred income tax benefit			$ 25,857	28,925
Tax realized from stock options exercised			1,700	8,000
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred income tax benefit	$ 2,900	$ 2,200	$ 8,300	$ 6,000

XML

Equity-Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options outstanding, Beginning balance	694,743	737,422
Options granted	456,850	204,700
Options exercised	(55,808)	(214,079)
Options cancelled	(79,200)	(33,300)
Options outstanding, Ending balance	1,016,585	694,743	737,422
Options outstanding, Weighted Average Exercise Price, Beginning balance	$ 42.87	$ 32.19
Options exercisable, Ending balance	290,884	106,330
Options granted, Weighted Average Exercise Price	$ 59.26	$ 63.07
Options exercised, Weighted Average Exercise Price	32.40	42.75
Options cancelled, Weighted Average Exercise Price	56.61	46.53
Options outstanding, Weighted Average Exercise Price, Ending balance	$ 50.07	$ 42.87	$ 32.19
Options outstanding, Aggregate Intrinsic Value, Beginning balance	$ 20,717	$ 14,512
Options exercisable, Weighted Average Exercise Price, Ending balance	$ 41.80	$ 36.41
Options granted, Aggregate Intrinsic Value		$ 1,724
Options granted, Weighted Average Remaining Contractual Term	9 years 5 months 23 days	9 years 2 months 16 days
Options exercised, Aggregate Intrinsic Value	$ 1,541	$ 9,890
Options outstanding, Weighted Average Remaining Contractual Term	8 years 15 days	7 years 8 months 12 days	8 years 1 month 2 days
Options cancelled, Aggregate Intrinsic Value	$ 0	$ 0
Options exercisable, Weighted Average Remaining Contractual Term, Ending balance	6 years 3 months 22 days	5 years 9 months 29 days
Options outstanding, Aggregate Intrinsic Value, Ending balance	$ 9,744	$ 20,717	$ 14,512
Options exercisable, Aggregate Intrinsic Value, Ending balance	$ 7,114	$ 4,968

XML

Equity-Based Compensation - Restricted Stock Activity (Detail) - Restricted Stock Award [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested, Number of Shares/Units, Beginning balance	944,562	722,028
Granted, Number of Shares	299,047	503,052
Cancelled, Number of Shares	(87,803)	(44,900)
Vested, Number of Shares	(308,094)	(235,618)
Unvested, Number of Shares/Units, Ending balance	847,712	944,562
Unvested, Weighted Average Grant-Date Fair Value, Beginning balance	$ 52.74	$ 39.77
Granted, Weighted Average Grant-Date Fair Value	58.99	62.67
Cancelled, Weighted Average Grant-Date Fair Value	57.14	49.55
Vested, Weighted Average Grant-Date Fair Value	46.88	34.93
Unvested, Weighted Average Grant-Date Fair Value, Ending balance	$ 56.64	$ 52.74

XML

Equity-Based Compensation - Restricted Stock Unit Activity (Detail) - Restricted Stock Units [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested, Number of Shares/Units, Beginning balance	218,084	125,113
Granted, Number of Units	230,750	217,994
Cancelled, Number of Units	0	0
Vested, Number of Units	(175,235)	(125,023)
Unvested, Number of Shares/Units, Ending balance	273,599	218,084
Unvested, Weighted Average Grant-Date Fair Value, Beginning balance	$ 56.97	$ 38.73
Granted, Weighted Average Grant-Date Fair Value	56.95	61.77
Cancelled, Weighted Average Grant-Date Fair Value	0	0
Vested, Weighted Average Grant-Date Fair Value	52.71	32.38
Unvested, Weighted Average Grant-Date Fair Value, Ending balance	$ 59.68	$ 56.97

XML

Equity-Based Compensation - Schedule of Stock Options Valuation Assumptions (Detail) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Weighted average grant-date fair value of options	$ 19.35	$ 21.78
Risk-free interest rate	1.30%	1.50%
Expected volatility	33.00%	35.00%
Expected life (in years)	5 years 6 months	5 years 6 months

XML

Income Taxes - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Effective tax rates	(2.10%)	30.40%	(292.80%)	31.00%

XML

Derivative Instruments - Additional Information (Detail)	1 Months Ended		3 Months Ended		9 Months Ended
	May 31, 2016 USD ($)	May 31, 2016 GBP (£)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	May 31, 2016 GBP (£)	Dec. 31, 2015	Jul. 01, 2014 USD ($)	Mar. 12, 2013 USD ($)
Derivative [Line Items]
Gains (losses) associated with changes in fair value of the foreign currency forward contracts			$ 15,000	$ (1,000,000)	$ 500,000	$ (1,900,000)
Cross currency swap assets			$ 49,900,000		$ 49,900,000
6.125% Senior Notes Due 2021 [Member]
Derivative [Line Items]
Principal amount										$ 150,000,000
Debt instrument interest rate			6.125%		6.125%			6.125%		6.125%
5.125% Senior Notes Due 2022 [Member]
Derivative [Line Items]
Principal amount									$ 300,000,000
Debt instrument interest rate			5.125%		5.125%			5.125%	5.125%
5.625 % Senior Notes Due 2021 [Member]
Derivative [Line Items]
Debt instrument interest rate			5.625%		5.625%
Cross Currency Swap Assets [Member]
Derivative [Line Items]
Notional amount	$ 650,000,000						£ 449,300,000
Cross currency swap agreement cash flow due to interest payment	$ 35,800,000	£ 24,700,000
Derivative exchange rate	1.45						1.45
Cross Currency Swap Assets [Member] | 6.125% Senior Notes Due 2021 [Member]
Derivative [Line Items]
Principal amount	$ 150,000,000
Debt instrument interest rate	6.125%						6.125%
Cross Currency Swap Assets [Member] | 5.125% Senior Notes Due 2022 [Member]
Derivative [Line Items]
Principal amount	$ 300,000,000
Debt instrument interest rate	5.125%						5.125%
Cross Currency Swap Assets [Member] | 5.625 % Senior Notes Due 2021 [Member]
Derivative [Line Items]
Principal amount	$ 200,000,000
Debt instrument interest rate	5.625%						5.625%

XML

Fair Value Measurements - Carrying Amounts and Fair Values of Company's Amended and Restated Senior Credit Facilities, Derivative Instruments and Contingent Consideration Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative instruments	$ 49,903
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative instruments	49,903
Contingent consideration liabilities	667	$ 667
Fair Value [Member] | Amended and Restated Senior Credit Facility [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amended and Restated Senior Credit Facility	2,174,174	1,135,861
Fair Value [Member] | 6.125% Senior Notes Due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	152,240	149,288
Fair Value [Member] | 5.125% Senior Notes Due 2022 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	292,313	275,590
Fair Value [Member] | 5.625% Senior Notes Due 2023 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	649,861	604,262
Fair Value [Member] | 6.500% Senior Notes Due 2024 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	399,131
Fair Value [Member] | 9.0% and 9.5% Revenue Bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
9.0% and 9.5% Revenue Bonds	23,300	23,621
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative instruments	49,903
Contingent consideration liabilities	667	667
Carrying Amount [Member] | Amended and Restated Senior Credit Facility [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amended and Restated Senior Credit Facility	2,174,174	1,135,861
Carrying Amount [Member] | 6.125% Senior Notes Due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	147,448	147,082
Carrying Amount [Member] | 5.125% Senior Notes Due 2022 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	295,266	294,749
Carrying Amount [Member] | 5.625% Senior Notes Due 2023 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	640,257	639,431
Carrying Amount [Member] | 6.500% Senior Notes Due 2024 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes	381,032
Carrying Amount [Member] | 9.0% and 9.5% Revenue Bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
9.0% and 9.5% Revenue Bonds	$ 23,300	$ 23,621

XML

Fair Value Measurements - Additional Information (Detail)	Sep. 30, 2016	Feb. 16, 2016	Dec. 31, 2015	Jul. 01, 2014	Mar. 12, 2013
6.125% Senior Notes Due 2021 [Member]
Disclosures Regarding Financial Instruments [Line Items]
Debt instrument interest rate	6.125%		6.125%		6.125%
5.125% Senior Notes Due 2022 [Member]
Disclosures Regarding Financial Instruments [Line Items]
Debt instrument interest rate	5.125%		5.125%	5.125%
5.625 % Senior Notes Due 2021 [Member]
Disclosures Regarding Financial Instruments [Line Items]
Debt instrument interest rate	5.625%
6.500% Senior Notes Due 2024 [Member]
Disclosures Regarding Financial Instruments [Line Items]
Debt instrument interest rate	6.50%	6.50%
9.0% Revenue Bonds [Member]
Disclosures Regarding Financial Instruments [Line Items]
Debt instrument interest rate	9.00%		9.00%
9.5% Revenue Bonds [Member]
Disclosures Regarding Financial Instruments [Line Items]
Debt instrument interest rate	9.50%		9.50%

XML

Commitments and Contingencies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2016 USD ($)
Loss Contingencies [Line Items]
Equity ownership interest percentage	100.00%
Maximum professional liability insurance per incident	$ 2,000,000
Maximum professional liability aggregate policy limit	50,000,000
Minimum [Member]
Loss Contingencies [Line Items]
Maximum professional liability aggregate retention level	2,000,000
Maximum [Member]
Loss Contingencies [Line Items]
Maximum professional liability aggregate retention level	$ 50,000,000

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Noncontrolling Interests - Additional Information (Detail) $ in Millions	Sep. 30, 2016	May 02, 2016 USD ($) Partner	Aug. 31, 2015 USD ($)
Noncontrolling Interest [Line Items]
Equity ownership interests percentage in the facility	100.00%
Tennessee [Member] | Crestwyn [Member]
Noncontrolling Interest [Line Items]
Number of noncontrolling partners | Partner		2
Percentage of noncontrolling interests in the facility		40.00%
Equity ownership interests percentage in the facility		60.00%
Approximate value of noncontrolling interest		$ 6.0
Tennessee [Member] | Crestwyn [Member] | Partner One [Member]
Noncontrolling Interest [Line Items]
Percentage of noncontrolling interests in the facility		20.00%
Tennessee [Member] | Crestwyn [Member] | Partner Two [Member]
Noncontrolling Interest [Line Items]
Percentage of noncontrolling interests in the facility		20.00%
Massachusetts [Member] | Southcoast Behavioral [Member]
Noncontrolling Interest [Line Items]
Percentage of noncontrolling interests in the facility			25.00%
Approximate value of noncontrolling interest			$ 9.2
Equity ownership interests percentage in the facility			75.00%

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Other Current Assets - Other Current Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 32,568	$ 21,817
Other receivables	24,850	17,518
Income taxes receivable	9,790	6,540
Workers' compensation deposits - current portion	7,500	7,500
Insurance receivable - current portion	5,290	5,290
Inventory	4,758	4,681
Other	2,872	3,549
Other current assets	$ 87,628	$ 66,895

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Other Accrued Liabilities - Summary of Other Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounts Payable and Accrued Liabilities, Current [Abstract]
Accrued expenses	$ 42,804	$ 17,921
Unearned income	24,516	446
Accrued interest	13,523	26,132
Insurance liability - current portion	10,490	10,490
Accrued property taxes	4,474	2,951
Income taxes payable	121	7,367
Other current liabilities	8,585	7,499
Other accrued liabilities	$ 104,513	$ 72,806

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Segment Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2016 State Beds Facilities
Segment Reporting Information [Line Items]
Number of facilities | Facilities	589
Number of beds | Beds	17,900
Number of operating states | State	39
U.S. Facilities [Member]
Segment Reporting Information [Line Items]
Number of facilities | Facilities	211
Number of beds | Beds	8,500
Number of operating states | State	39
U.K. Facilities [Member]
Segment Reporting Information [Line Items]
Number of facilities | Facilities	378
Number of beds | Beds	9,400

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Segment Information - Summary of Financial Information by Operating Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Revenue	$ 734,665	$ 479,730	$ 2,108,026	$ 1,299,173
Segment EBITDA	155,838	108,468	459,076	292,983
Equity-based compensation expense	(7,145)	(5,327)	(20,989)	(14,576)
Debt extinguishment costs	(3,411)	(9,979)	(3,411)	(9,979)
Loss on divestiture	(174,739)		(174,739)
Gain (loss) on foreign currency derivatives	15	(1,018)	523	(1,926)
Transaction-related expenses	(1,111)	(5,842)	(33,483)	(31,415)
Interest expense, net	(48,843)	(27,737)	(135,315)	(77,932)
Depreciation and amortization	(36,418)	(16,890)	(101,145)	(44,920)
(Loss) income from continuing operations before income taxes	(115,814)	41,675	(9,483)	112,235
U.S. Facilities [Member]
Segment Reporting Information [Line Items]
Revenue	431,521	379,857	1,269,994	1,037,250
Segment EBITDA	108,810	101,636	334,230	280,342
U.K. Facilities [Member]
Segment Reporting Information [Line Items]
Revenue	303,146	97,875	836,004	256,117
Segment EBITDA	67,795	23,015	185,664	62,197
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Revenue	(2)	1,998	2,028	5,806
Segment EBITDA	$ (20,767)	$ (16,183)	$ (60,818)	$ (49,556)

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Segment Information - Summary of Financial Information by Operating Segment, Goodwill (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Goodwill:
Beginning balance	$ 2,128,215
Increase from 2016 acquisitions	765,171
Foreign currency translation	(92,389)
Assets held for sale	(106,852)
Other	7,864
Ending balance	2,702,009
U.S. Facilities [Member]
Goodwill:
Beginning balance	1,941,873
Increase from 2016 acquisitions	95,206
Other	7,825
Ending balance	2,044,904
U.K. Facilities [Member]
Goodwill:
Beginning balance	186,342
Increase from 2016 acquisitions	669,965
Foreign currency translation	(92,389)
Assets held for sale	(106,852)
Other	39
Ending balance	$ 657,105

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Segment Information - Summary of Financial Information by Operating Segment, Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets:
Assets	$ 6,452,978	$ 4,279,208
U.S. Facilities [Member]
Assets:
Assets	3,379,195	3,061,519
U.K. Facilities [Member]
Assets:
Assets	2,907,903	1,045,922
Corporate and Other [Member]
Assets:
Assets	$ 165,880	$ 171,767

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Segment Information - Summary of Financial Information by Operating Segment, Assets (Parenthetical) (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment, net	$ 2,786,646	$ 1,709,053
U.S. Facilities [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment, net	1,000,000	832,200
U.K. Facilities [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment, net	1,700,000	824,400
Corporate and Other [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment, net	$ 33,100	$ 52,400

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Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] € in Millions	Oct. 18, 2016 EUR (€) Bed Facility
Subsequent Event [Line Items]
Number of beds to be sold | Bed	1,000
Cash received from sale of business | €	€ 320
U.K. Behavioral Health Facilities [Member]
Subsequent Event [Line Items]
Number of facilities to be sold	21
De novo Behavioral Health Facility [Member]
Subsequent Event [Line Items]
Number of facilities to be sold	1

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Financial Information for the Company and Its Subsidiaries - Additional Information (Detail)	Sep. 30, 2016	Feb. 16, 2016	Dec. 31, 2015	Sep. 21, 2015	Feb. 11, 2015	Jul. 01, 2014	Mar. 12, 2013
6.125% Senior Notes Due 2021 [Member]
Line of Credit Facility [Line Items]
Debt instrument interest rate	6.125%		6.125%				6.125%
5.125% Senior Notes Due 2022 [Member]
Line of Credit Facility [Line Items]
Debt instrument interest rate	5.125%		5.125%			5.125%
5.625% Senior Notes Due 2023 [Member]
Line of Credit Facility [Line Items]
Debt instrument interest rate	5.625%		5.625%	5.625%	5.625%
6.500% Senior Notes Due 2024 [Member]
Line of Credit Facility [Line Items]
Debt instrument interest rate	6.50%	6.50%

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Financial Information for the Company and Its Subsidiaries - Summary of Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 27,751	$ 11,215	$ 50,762	$ 94,040
Accounts receivable, net	277,568	216,626
Other current assets	87,628	66,895
Total current assets	392,947	294,736
Property and equipment, net	2,786,646	1,709,053
Goodwill	2,702,009	2,128,215
Intangible assets, net	84,385	59,575
Deferred tax assets - noncurrent	3,791	49,114
Derivative instruments	49,903
Assets held for sale	392,483
Other assets	40,814	38,515
Total assets	6,452,978	4,279,208
Current liabilities:
Current portion of long-term debt	77,598	45,360
Accounts payable	92,819	91,341
Accrued salaries and benefits	105,308	80,696
Other accrued liabilities	104,513	72,806
Total current liabilities	380,238	290,203
Long-term debt	3,583,879	2,195,384
Deferred tax liabilities - noncurrent	81,443	23,936
Other liabilities	147,150	78,602
Total liabilities	4,192,710	2,588,125
Redeemable noncontrolling interests	18,147	8,055
Total equity	2,242,121	1,683,028
Total liabilities and equity	6,452,978	4,279,208
Consolidating Adjustments [Member]
Current assets:
Deferred tax assets - noncurrent	(4,487)
Investment in subsidiaries	(4,985,674)	(3,495,067)
Other assets	(852,200)	(424,024)
Total assets	(5,842,361)	(3,919,091)
Current liabilities:
Long-term debt	(852,200)	(424,024)
Deferred tax liabilities - noncurrent	(4,487)
Total liabilities	(856,687)	(424,024)
Total equity	(4,985,674)	(3,495,067)
Total liabilities and equity	(5,842,361)	(3,919,091)
Parent [Member]
Current assets:
Deferred tax assets - noncurrent	3,587	3,946
Derivative instruments	49,903
Investment in subsidiaries	4,985,674	3,495,067
Other assets	854,658	427,270
Total assets	5,893,822	3,926,283
Current liabilities:
Current portion of long-term debt	77,363	45,125
Other accrued liabilities	13,524	26,132
Total current liabilities	90,887	71,257
Long-term debt	3,560,814	2,171,998
Total liabilities	3,651,701	2,243,255
Total equity	2,242,121	1,683,028
Total liabilities and equity	5,893,822	3,926,283
Combined Subsidiary Guarantors [Member]
Current assets:
Cash and cash equivalents	5,160	1,987	46,865	76,685
Accounts receivable, net	211,981	187,546
Other current assets	65,136	57,968
Total current assets	282,277	247,501
Property and equipment, net	934,633	805,439
Goodwill	1,938,368	1,835,339
Intangible assets, net	56,653	57,024
Deferred tax assets - noncurrent		40,587
Other assets	36,030	32,947
Total assets	3,247,961	3,018,837
Current liabilities:
Accounts payable	58,984	75,015
Accrued salaries and benefits	70,085	66,249
Other accrued liabilities	34,912	10,886
Total current liabilities	163,981	152,150
Deferred tax liabilities - noncurrent	8,684
Other liabilities	104,586	75,159
Total liabilities	277,251	227,309
Total equity	2,970,710	2,791,528
Total liabilities and equity	3,247,961	3,018,837
Combined Non-Guarantors [Member]
Current assets:
Cash and cash equivalents	22,591	9,228	$ 3,897	$ 17,355
Accounts receivable, net	65,587	29,080
Other current assets	22,492	8,927
Total current assets	110,670	47,235
Property and equipment, net	1,852,013	903,614
Goodwill	763,641	292,876
Intangible assets, net	27,732	2,551
Deferred tax assets - noncurrent	4,691	4,581
Assets held for sale	392,483
Other assets	2,326	2,322
Total assets	3,153,556	1,253,179
Current liabilities:
Current portion of long-term debt	235	235
Accounts payable	33,835	16,326
Accrued salaries and benefits	35,223	14,447
Other accrued liabilities	56,077	35,788
Total current liabilities	125,370	66,796
Long-term debt	875,265	447,410
Deferred tax liabilities - noncurrent	77,246	23,936
Other liabilities	42,564	3,443
Total liabilities	1,120,445	541,585
Redeemable noncontrolling interests	18,147	8,055
Total equity	2,014,964	703,539
Total liabilities and equity	$ 3,153,556	$ 1,253,179

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Financial Information for the Company and Its Subsidiaries - Summary of Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Financial Statements, Captions [Line Items]
Revenue before provision for doubtful accounts	$ 744,802	$ 488,746	$ 2,139,039	$ 1,324,702
Provision for doubtful accounts	(10,137)	(9,016)	(31,013)	(25,529)
Revenue	734,665	479,730	2,108,026	1,299,173
Salaries, wages and benefits	408,242	258,410	1,157,557	707,583
Professional fees	47,687	30,759	137,970	83,215
Supplies	30,555	21,634	88,449	58,430
Rents and leases	19,740	8,542	55,013	22,639
Other operating expenses	79,748	57,244	230,950	148,899
Depreciation and amortization	36,418	16,890	101,145	44,920
Interest expense, net	48,843	27,737	135,315	77,932
Debt extinguishment costs	3,411	9,979	3,411	9,979
Loss on divestiture	174,739		174,739
Loss (gain) on foreign currency derivatives	(15)	1,018	(523)	1,926
Transaction-related expenses	1,111	5,842	33,483	31,415
Total expenses	850,479	438,055	2,117,509	1,186,938
(Loss) income from continuing operations before income taxes	(115,814)	41,675	(9,483)	112,235
(Benefit from) provision for income taxes	2,396	12,669	27,767	34,794
(Loss) income from continuing operations	(118,210)	29,006	(37,250)	77,441
Income from discontinued operations, net of income taxes		80		83
Net income (loss)	(118,210)	29,086	(37,250)	77,524
Net loss attributable to noncontrolling interests	402	464	1,575	464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	(117,808)	29,550	(35,675)	77,988
Other comprehensive income:
Foreign currency translation (loss) gain	(89,645)	(32,707)	(351,528)	(15,923)
Gain on derivative instruments	6,387		30,306
Other comprehensive income	(83,258)	(32,707)	(321,222)	(15,923)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	(201,066)	(3,157)	(356,897)	62,065
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Equity in earnings of subsidiaries	99,875	(50,840)	(8,937)	(127,108)
(Loss) income from continuing operations	99,875	(50,840)	(8,937)	(127,108)
Net income (loss)	99,875	(50,840)	(8,937)	(127,108)
Net income (loss) attributable to Acadia Healthcare Company, Inc.	99,875	(50,840)	(8,937)	(127,108)
Other comprehensive income:
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	99,875	(50,840)	(8,937)	(127,108)
Parent [Member]
Condensed Financial Statements, Captions [Line Items]
Salaries, wages and benefits	7,145	5,327	20,989	14,576
Interest expense, net	13,388	15,934	37,452	46,988
Debt extinguishment costs	3,411	9,979	3,411	9,979
Loss (gain) on foreign currency derivatives	(15)	1,018	(523)	1,926
Total expenses	23,929	32,258	61,329	73,469
(Loss) income from continuing operations before income taxes	(23,929)	(32,258)	(61,329)	(73,469)
Equity in earnings of subsidiaries	(99,875)	50,840	8,937	127,108
(Benefit from) provision for income taxes	(5,594)	(10,504)	(15,142)	(23,885)
(Loss) income from continuing operations	(118,210)	29,086	(37,250)	77,524
Net income (loss)	(118,210)	29,086	(37,250)	77,524
Net income (loss) attributable to Acadia Healthcare Company, Inc.	(118,210)	29,086	(37,250)	77,524
Other comprehensive income:
Gain on derivative instruments	6,387		30,306
Other comprehensive income	6,387		30,306
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	(111,823)	29,086	(6,944)	77,524
Combined Subsidiary Guarantors [Member]
Condensed Financial Statements, Captions [Line Items]
Revenue before provision for doubtful accounts	420,161	377,582	1,245,227	1,029,198
Provision for doubtful accounts	(9,383)	(8,531)	(28,318)	(23,516)
Revenue	410,678	369,051	1,216,909	1,005,682
Salaries, wages and benefits	224,692	191,032	648,669	530,221
Professional fees	21,140	21,551	66,967	60,615
Supplies	19,467	17,349	57,456	47,287
Rents and leases	8,759	7,624	25,857	20,143
Other operating expenses	51,536	47,113	151,485	122,505
Depreciation and amortization	15,105	10,578	42,072	29,840
Interest expense, net	19,258	6,036	57,394	17,639
Transaction-related expenses		2,831	25,624	24,193
Total expenses	359,957	304,114	1,075,524	852,443
(Loss) income from continuing operations before income taxes	50,721	64,937	141,385	153,239
(Benefit from) provision for income taxes	38,654	21,383	62,247	50,634
(Loss) income from continuing operations	12,067	43,554	79,138	102,605
Income from discontinued operations, net of income taxes		80		83
Net income (loss)	12,067	43,634	79,138	102,688
Net income (loss) attributable to Acadia Healthcare Company, Inc.	12,067	43,634	79,138	102,688
Other comprehensive income:
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	12,067	43,634	79,138	102,688
Combined Non-Guarantors [Member]
Condensed Financial Statements, Captions [Line Items]
Revenue before provision for doubtful accounts	324,741	111,164	893,812	295,504
Provision for doubtful accounts	(754)	(485)	(2,695)	(2,013)
Revenue	323,987	110,679	891,117	293,491
Salaries, wages and benefits	176,405	62,051	487,899	162,786
Professional fees	26,547	9,208	71,003	22,600
Supplies	11,088	4,285	30,993	11,143
Rents and leases	10,981	918	29,156	2,496
Other operating expenses	28,212	10,131	79,465	26,394
Depreciation and amortization	21,313	6,312	59,073	15,080
Interest expense, net	16,197	5,767	40,469	13,305
Loss on divestiture	174,739		174,739
Transaction-related expenses	1,111	3,011	7,859	7,222
Total expenses	466,593	101,683	980,656	261,026
(Loss) income from continuing operations before income taxes	(142,606)	8,996	(89,539)	32,465
(Benefit from) provision for income taxes	(30,664)	1,790	(19,338)	8,045
(Loss) income from continuing operations	(111,942)	7,206	(70,201)	24,420
Net income (loss)	(111,942)	7,206	(70,201)	24,420
Net loss attributable to noncontrolling interests	402	464	1,575	464
Net income (loss) attributable to Acadia Healthcare Company, Inc.	(111,540)	7,670	(68,626)	24,884
Other comprehensive income:
Foreign currency translation (loss) gain	(89,645)	(32,707)	(351,528)	(15,923)
Other comprehensive income	(89,645)	(32,707)	(351,528)	(15,923)
Comprehensive (loss) income attributable to Acadia Healthcare Company, Inc.	$ (201,185)	$ (25,037)	$ (420,154)	$ 8,961

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Financial Information for the Company and Its Subsidiaries - Summary of Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net income (loss)	$ (118,210)	$ 29,086	$ (37,250)	$ 77,524
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Depreciation and amortization	36,418	16,890	101,145	44,920
Amortization of debt issuance costs			7,714	5,017
Equity-based compensation expense	7,145	5,327	20,989	14,576
Deferred income tax (benefit) expense			25,857	28,925
Loss from discontinued operations, net of taxes		(80)		(83)
Debt extinguishment costs	3,411	9,979	3,411	9,979
Loss on divestiture	174,739		174,739
Loss (gain) on foreign currency derivatives	(15)	1,018	(523)	1,926
Other			731	1,122
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net			(12,579)	(28,905)
Other current assets			(12,973)	(12,201)
Other assets			(1,134)	(4,879)
Accounts payable and other accrued liabilities			2,067	(8,316)
Accrued salaries and benefits			(10,759)	8,888
Other liabilities			3,746	5,071
Net cash (used in) provided by continuing operating activities			265,181	143,564
Net cash (used in) provided by discontinued operating activities			(5,524)	(1,479)
Net cash (used in) provided by operating activities			259,657	142,085
Investing activities:
Cash paid for acquisitions, net of cash acquired			(683,285)	(391,216)
Cash paid for capital expenditures			(249,961)	(200,841)
Cash paid for real estate acquisitions			(37,947)	(21,976)
Settlement of foreign currency derivatives			523	(1,926)
Other			(1,135)	(887)
Net cash used in investing activities			(971,805)	(616,846)
Financing activities:
Borrowings on long-term debt			1,480,000	1,150,000
Borrowings on revolving credit facility			179,000	310,000
Principal payments on revolving credit facility			(166,000)	(310,000)
Principal payments on long-term debt			(46,069)	(23,813)
Repayment of assumed CRC debt			(1,348,389)	(904,467)
Repayments of senior notes				(88,331)
Payment of debt issuance costs			(35,748)	(25,584)
Payment of premium on senior notes				(6,890)
Issuance of Common Stock			685,097	331,360
Common stock withheld for minimum statutory taxes, net			(7,917)	(7,582)
Excess tax benefit from equity awards				8,020
Other			(1,821)	(374)
Net cash provided by financing activities			738,153	432,339
Effect of exchange rate changes on cash			(9,469)	(856)
Net (decrease) increase in cash and cash equivalents			16,536	(43,278)
Cash and cash equivalents at beginning of the period			11,215	94,040
Cash and cash equivalents at end of the period	27,751	50,762	27,751	50,762
Consolidating Adjustments [Member]
Operating activities:
Net income (loss)	99,875	(50,840)	(8,937)	(127,108)
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries	(99,875)	50,840	8,937	127,108
Change in operating assets and liabilities, net of effect of acquisitions:
Other assets			2,780	300
Net cash (used in) provided by continuing operating activities			2,780	300
Net cash (used in) provided by operating activities			2,780	300
Financing activities:
Principal payments on long-term debt			2,780	300
Cash (used in) provided by intercompany activity			(5,560)	(600)
Net cash provided by financing activities			(2,780)	(300)
Parent [Member]
Operating activities:
Net income (loss)	(118,210)	29,086	(37,250)	77,524
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries	99,875	(50,840)	(8,937)	(127,108)
Amortization of debt issuance costs			8,035	5,347
Equity-based compensation expense			20,989	14,576
Deferred income tax (benefit) expense				(58)
Debt extinguishment costs	3,411	9,979	3,411	9,979
Loss (gain) on foreign currency derivatives	(15)	1,018	(523)	1,926
Change in operating assets and liabilities, net of effect of acquisitions:
Other assets			(2,780)	(300)
Net cash (used in) provided by continuing operating activities			(17,055)	(18,114)
Net cash (used in) provided by operating activities			(17,055)	(18,114)
Financing activities:
Borrowings on long-term debt			1,480,000	1,150,000
Borrowings on revolving credit facility			179,000	310,000
Principal payments on revolving credit facility			(166,000)	(310,000)
Principal payments on long-term debt			(46,069)	(23,813)
Repayment of assumed CRC debt			(1,348,389)	(904,467)
Repayments of senior notes				(88,331)
Payment of debt issuance costs			(35,748)	(25,584)
Payment of premium on senior notes				(6,890)
Issuance of Common Stock			685,097
Common stock withheld for minimum statutory taxes, net			(7,917)	(7,582)
Excess tax benefit from equity awards				8,020
Cash (used in) provided by intercompany activity			(722,919)	(83,239)
Net cash provided by financing activities			17,055	18,114
Combined Subsidiary Guarantors [Member]
Operating activities:
Net income (loss)	12,067	43,634	79,138	102,688
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Depreciation and amortization	15,105	10,578	42,072	29,840
Deferred income tax (benefit) expense			26,381	27,035
Loss from discontinued operations, net of taxes		(80)		(83)
Other			826	1,088
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net			(26,055)	(16,535)
Other current assets			(4,901)	(14,287)
Other assets			(818)	(4,881)
Accounts payable and other accrued liabilities			31,633	(10,510)
Accrued salaries and benefits			3,527	7,953
Other liabilities			5,975	5,821
Net cash (used in) provided by continuing operating activities			157,778	128,129
Net cash (used in) provided by discontinued operating activities			(5,524)	(1,479)
Net cash (used in) provided by operating activities			152,254	126,650
Investing activities:
Cash paid for acquisitions, net of cash acquired			(103,189)	(88,308)
Cash paid for capital expenditures			(142,626)	(116,466)
Cash paid for real estate acquisitions			(26,146)	(21,976)
Settlement of foreign currency derivatives			523	(1,926)
Other			(1,135)	(887)
Net cash used in investing activities			(272,573)	(229,563)
Financing activities:
Issuance of Common Stock				331,360
Other			(1,821)	(374)
Cash (used in) provided by intercompany activity			125,313	(257,037)
Net cash provided by financing activities			123,492	73,949
Effect of exchange rate changes on cash				(856)
Net (decrease) increase in cash and cash equivalents			3,173	(29,820)
Cash and cash equivalents at beginning of the period			1,987	76,685
Cash and cash equivalents at end of the period	5,160	46,865	5,160	46,865
Combined Non-Guarantors [Member]
Operating activities:
Net income (loss)	(111,942)	7,206	(70,201)	24,420
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Depreciation and amortization	21,313	6,312	59,073	15,080
Amortization of debt issuance costs			(321)	(330)
Deferred income tax (benefit) expense			(524)	1,948
Loss on divestiture	174,739		174,739
Other			(95)	34
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net			13,476	(12,370)
Other current assets			(8,072)	2,086
Other assets			(316)	2
Accounts payable and other accrued liabilities			(29,566)	2,194
Accrued salaries and benefits			(14,286)	935
Other liabilities			(2,229)	(750)
Net cash (used in) provided by continuing operating activities			121,678	33,249
Net cash (used in) provided by operating activities			121,678	33,249
Investing activities:
Cash paid for acquisitions, net of cash acquired			(580,096)	(302,908)
Cash paid for capital expenditures			(107,335)	(84,375)
Cash paid for real estate acquisitions			(11,801)
Net cash used in investing activities			(699,232)	(387,283)
Financing activities:
Principal payments on long-term debt			(2,780)	(300)
Cash (used in) provided by intercompany activity			603,166	340,876
Net cash provided by financing activities			603,386	340,576
Effect of exchange rate changes on cash			(9,469)
Net (decrease) increase in cash and cash equivalents			13,363	(13,458)
Cash and cash equivalents at beginning of the period			9,228	17,355
Cash and cash equivalents at end of the period	$ 22,591	$ 3,897	$ 22,591	$ 3,897