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 June 30, 2016 and December 31, 2015, and for the three and six months ended June 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

June 30, 2016

(In thousands)


	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	10,048	$	20,668	$	—		$	30,716
Accounts receivable, net		—		209,194		75,938		—			285,132
Other current assets		—		59,452		20,862		(3,795	)		76,519

Total current assets		—		278,694		117,468		(3,795	)		392,367
Property and equipment, net		—		907,277		2,367,263		—			3,274,540
Goodwill		—		1,939,361		892,840		—			2,832,201
Intangible assets, net		—		56,574		28,422		—			84,996
Deferred tax assets – noncurrent		3,579		9,671		4,679		—			17,929
Derivative instruments		40,459		—		—		—			40,459
Investment in subsidiaries		5,210,634		—		—		(5,210,634	)		—
Other assets		845,914		33,523		5,764		(843,194	)		42,007

Total assets	$	6,100,586	$	3,225,100	$	3,416,436	$	(6,057,623	)	$	6,684,499

Current liabilities:
Current portion of long-term debt	$	73,175	$	—	$	235	$	—		$	73,410
Accounts payable		—		68,294		39,917		—			108,211
Accrued salaries and benefits		—		75,872		37,520		—			113,392
Other accrued liabilities		35,919		—		92,664		(3,795	)		124,788

Total current liabilities		109,094		144,166		170,336		(3,795	)		419,801
Long-term debt		3,555,212		—		866,365		(843,194	)		3,578,383
Deferred tax liabilities – noncurrent		—		—		85,526		—			85,526
Other liabilities		—		108,574		43,054		—			151,628

Total liabilities		3,664,306		252,740		1,165,281		(846,989	)		4,235,338

Redeemable noncontrolling interests		—		—		12,881		—			12,881

Total equity		2,436,280		2,972,360		2,238,274		(5,210,634	)		2,436,280

Total liabilities and equity	$	6,100,586	$	3,225,100	$	3,416,436	$	(6,057,623	)	$	6,684,499

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 Comprehensive Income

Three Months Ended June 30, 2016

(In thousands)


	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	422,232		$	344,822		$	—		$	767,054
Provision for doubtful accounts		—			(9,593	)		(913	)		—			(10,506	)

Revenue		—			412,639			343,909			—			756,548
Salaries, wages and benefits		6,888			212,944			188,455			—			408,287
Professional fees		—			23,150			27,142			—			50,292
Supplies		—			19,527			11,682			—			31,209
Rents and leases		—			8,521			11,946			—			20,467
Other operating expenses		—			51,100			29,855			—			80,955
Depreciation and amortization		—			14,216			22,536			—			36,752
Interest expense, net		10,631			22,043			16,084			—			48,758
Gain on foreign currency derivatives		(98	)		—			—			—			(98	)
Transaction-related expenses		—			4,189			1,885			—			6,074

Total expenses		17,421			355,690			309,585			—			682,696
(Loss) income from continuing operations before income taxes		(17,421	)		56,949			34,324			—			73,852
Equity in earnings of subsidiaries		67,943			—			—			(67,943	)		—
(Benefit from) provision for income taxes		(5,069	)		16,186			7,144			—			18,261

Income (loss) from continuing operations		55,591			40,763			27,180			(67,943	)		55,591
Income from discontinued operations, net of income taxes		—			—			—			—			—

Net income (loss)		55,591			40,763			27,180			(67,943	)		55,591
Net loss attributable to noncontrolling interests		—			—			854			—			854

Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	55,591		$	40,763		$	28,034		$	(67,943	)	$	56,445

Other comprehensive loss:
Foreign currency translation loss		—			—			(213,468	)		—			(213,468	)
Gain on derivative instruments		23,919			—			—			—			23,919

Other comprehensive loss		23,919			—			(213,468	)		—			(189,549	)

Comprehensive income (loss) attributable to Acadia Healthcare Company, Inc.	$	79,510		$	40,763		$	(185,434	)	$	(67,943	)	$	(133,104	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income

Three Months Ended June 30, 2015

(In thousands)


	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	363,851		$	97,947		$	—		$	461,798
Provision for doubtful accounts		—			(7,566	)		(572	)		—			(8,138	)

Revenue		—			356,285			97,375			—			453,660
Salaries, wages and benefits		5,355			183,490			54,457			—			243,302
Professional fees		—			22,579			7,450			—			30,029
Supplies		—			16,929			3,613			—			20,542
Rents and leases		—			7,402			809			—			8,211
Other operating expenses		—			43,145			7,983			—			51,128
Depreciation and amortization		—			10,551			4,375			—			14,926
Interest expense, net		18,106			5,882			4,061			—			28,049
Loss on foreign currency derivatives		961			—			—			—			961
Transaction-related expenses		—			2,946			4,211			—			7,157

Total expenses		24,422			292,924			86,959			—			404,305
(Loss) income from continuing operations before income taxes		(24,422	)		63,361			10,416			—			49,355
Equity in earnings of subsidiaries		50,281			—			—			(50,281	)		—
(Benefit from) provision for income taxes		(7,985	)		20,734			2,763			—			15,512

Income (loss) from continuing operations		33,844			42,627			7,653			(50,281	)		33,843
Income from discontinued operations, net of income taxes		—			1			—			—			1

Net income (loss)	$	33,844		$	42,628		$	7,653		$	(50,281	)	$	33,844

Other comprehensive income:
Foreign currency translation gain		—			—			46,173			—			46,173

Other comprehensive income		—			—			46,173			—			46,173

Comprehensive income (loss)	$	33,844		$	42,628		$	53,826		$	(50,281	)	$	80,017

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income

Six Months Ended June 30, 2016

(In thousands)


	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	825,166		$	569,071		$	—		$	1,394,237
Provision for doubtful accounts		—			(18,935	)		(1,941	)		—			(20,876	)

Revenue		—			806,231			567,130			—			1,373,361
Salaries, wages and benefits		13,844			423,977			311,494			—			749,315
Professional fees		—			45,827			44,456			—			90,283
Supplies		—			37,989			19,905			—			57,894
Rents and leases		—			17,098			18,175			—			35,273
Other operating expenses		—			99,949			51,253			—			151,202
Depreciation and amortization		—			26,967			37,760			—			64,727
Interest expense, net		24,064			38,136			24,272			—			86,472
Gain on foreign currency derivatives		(508	)		—			—			—			(508	)
Transaction-related expenses		—			25,624			6,748			—			32,372

Total expenses		37,400			715,567			514,063			—			1,267,030
(Loss) income from continuing operations before income taxes		(37,400	)		90,664			53,067			—			106,331
Equity in earnings of subsidiaries		108,812			—			—			(108,812	)		—
(Benefit from) provision for income taxes		(9,548	)		23,593			11,326			—			25,371

Income (loss) from continuing operations		80,960			67,071			41,741			(108,812	)		80,960
Income from discontinued operations, net of income taxes		—			—			—			—			—

Net income (loss)		80,960			67,071			41,741			(108,812	)		80,960
Net loss attributable to noncontrolling interests		—			—			1,173			—			1,173

Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	80,960		$	67,071		$	42,914		$	(108,812	)	$	82,133

Other comprehensive loss:
Foreign currency translation loss		—			—			(261,883	)		—			(261,883	)
Gain on derivative instruments		23,919			—			—			—			23,919

Other comprehensive loss		23,919			—			(261,883	)		—			(237,964	)

Comprehensive income (loss) attributable to Acadia Healthcare Company, Inc.	$	104,879		$	67,071		$	(218,969	)	$	(108,812	)	$	(155,831	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income

Six Months Ended June 30, 2015

(In thousands)


	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue before provision for doubtful accounts	$	—		$	651,616		$	184,340		$	—		$	835,956
Provision for doubtful accounts		—			(14,985	)		(1,528	)		—			(16,513	)

Revenue		—			636,631			182,812			—			819,443
Salaries, wages and benefits		9,249			339,189			100,735			—			449,173
Professional fees		—			39,064			13,392			—			52,456
Supplies		—			29,938			6,858			—			36,796
Rents and leases		—			12,519			1,578			—			14,097
Other operating expenses		—			75,392			16,263			—			91,655
Depreciation and amortization		—			19,262			8,768			—			28,030
Interest expense, net		31,054			11,603			7,538			—			50,195
Loss on foreign currency derivatives		908			—			—			—			908
Transaction-related expenses		—			21,362			4,211			—			25,573

Total expenses		41,211			548,329			159,343			—			748,883
(Loss) income from continuing operations before income taxes		(41,211	)		88,302			23,469			—			70,560
Equity in earnings of subsidiaries		76,268			—			—			(76,268	)		—
(Benefit from) provision for income taxes		(13,381	)		29,251			6,255			—			22,125

Income (loss) from continuing operations		48,438			59,051			17,214			(76,268	)		48,435
Income from discontinued operations, net of income taxes		—			3			—			—			3

Net income (loss)	$	48,438		$	59,054		$	17,214		$	(76,268	)	$	48,438

Other comprehensive income:
Foreign currency translation gain		—			—			16,784			—			16,784

Other comprehensive income		—			—			16,784			—			16,784

Comprehensive income (loss)	$	48,438		$	59,054		$	33,998		$	(76,268	)	$	65,222

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2016

(In thousands)


	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net income (loss)	$	80,960		$	67,071		$	41,741		$	(108,812	)	$	80,960
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(108,812	)		—			—			108,812			—
Depreciation and amortization		—			26,967			37,760			—			64,727
Amortization of debt issuance costs		5,171			—			(215	)		—			4,956
Equity-based compensation expense		13,844			—			—			—			13,844
Deferred income tax (benefit) expense		—			18,420			(1,599	)		—			16,821
Loss from discontinued operations, net of taxes		—			—			—			—			—
Loss (gain) on foreign currency derivatives		(508	)		—			—			—			(508	)
Other		—			720			(16	)		—			704
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(24,072	)		5,090			—			(18,982	)
Other current assets		—			(1,459	)		(5,797	)		—			(7,256	)
Other assets		(775	)		1,327			255			755			1,582
Accounts payable and other accrued liabilities		—			21,943			7,158			—			29,101
Accrued salaries and benefits		—			9,230			(13,076	)		—			(3,846	)
Other liabilities		—			7,208			(3,480	)		—			3,728

Net cash (used in) provided by continuing operating activities		(10,120	)		127,355			67,821			775			185,831
Net cash used in discontinued operating activities		—			(2,973	)		—			—			(2,973	)

Net cash (used in) provided by operating activities		(10,120	)		124,382			67,821			775			182,858
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(103,189	)		(580,096	)		—			(683,285	)
Cash paid for capital expenditures		—			(99,157	)		(78,561	)		—			(177,718	)
Cash paid for real estate acquisitions		—			(16,638	)		(11,801	)		—			(28,439	)
Settlement of foreign currency derivatives		—			508			—			—			508
Other		—			(1,084	)		—			—			(1,084	)

Net cash used in investing activities		—			(219,560	)		(670,458	)		—			(890,018	)
Financing activities:
Borrowings on long-term debt		1,480,000			—			—			—			1,480,000
Borrowings on revolving credit facility		158,000			—			—			—			158,000
Principal payments on revolving credit facility		(166,000	)		—			—			—			(166,000	)
Principal payments on long-term debt		(29,869	)		—			(775	)		775			(29,869	)
Repayment of assumed debt		(1,348,389	)		—			—			—			(1,348,389	)
Payment of debt issuance costs		(35,511	)		—			—			—			(35,511	)
Issuance of Common Stock		685,097			—			—			—			685,097
Common stock withheld for minimum statutory taxes, net		(7,365	)		—			—			—			(7,365	)
Excess tax benefit from equity awards		—			—			—			—			—
Other		—			(823	)		—			—			(823	)
Cash (used in) provided by intercompany activity		(725,843	)		104,062			623,331			(1,550	)		—

Net cash provided by (used in) financing activities		10,120			103,239			622,556			(775	)		735,140

Effect of exchange rate changes on cash		—			—			(8,479	)		—			(8,479	)

Net increase in cash and cash equivalents		—			8,061			11,440			—			19,501
Cash and cash equivalents at beginning of the period		—			1,987			9,228			—			11,215

Cash and cash equivalents at end of the period	$	—		$	10,048		$	20,668		$	—		$	30,716

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2015

(In thousands)


	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net income (loss)	$	48,438		$	59,054		$	17,214		$	(76,268	)	$	48,438
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(76,268	)		—			—			76,268			—
Depreciation and amortization		—			19,262			8,768			—			28,030
Amortization of debt issuance costs		—			3,438			(220	)		—			3,218
Equity-based compensation expense		9,249			—			—			—			9,249
Deferred income tax (benefit) expense		(798	)		22,964			2,516			—			24,682
Loss from discontinued operations, net of taxes		—			(3	)		—			—			(3	)
Loss (gain) on foreign currency derivatives		908			—			—			—			908
Other		—			662			30			—			692
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		—			(11,409	)		967			—			(10,442	)
Other current assets		—			(12,026	)		(1,022	)		—			(13,048	)
Other assets		(300	)		(1,220	)		2			300			(1,218	)
Accounts payable and other accrued liabilities		—			5,991			(10,304	)		—			(4,313	)
Accrued salaries and benefits		—			791			(1,016	)		—			(225	)
Other liabilities		—			5,442			(823	)		—			4,619

Net cash (used in) provided by continuing operating activities		(18,771	)		92,946			16,112			300			90,587
Net cash provided by discontinued operating activities		—			554			—			—			554

Net cash (used in) provided by operating activities		(18,771	)		93,500			16,112			300			91,141
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(89,041	)		(197,693	)		—			(286,734	)
Cash paid for capital expenditures		—			(62,101	)		(59,934	)		—			(122,035	)
Cash paid for real estate acquisitions		—			(3,428	)		—			—			(3,428	)
Settlement of foreign currency derivatives		—			(908	)		—			—			(908	)
Other		—			(481	)		—			—			(481	)

Net cash used in investing activities		—			(155,959	)		(257,627	)		—			(413,586	)
Financing activities:
Borrowings on long-term debt		875,000			—			—			—			875,000
Borrowings on revolving credit facility		180,000			—			—			—			180,000
Principal payments on revolving credit facility		(180,000	)		—			—			—			(180,000	)
Repayment of assumed CRC debt		(904,467	)		—			—			—			(904,467	)
Principal payments on long-term debt		(15,875	)		—			(300	)		300			(15,875	)
Payment of debt issuance costs		—			(22,775	)		—			—			(22,775	)
Issuance of Common Stock		—			331,530			—			—			331,530
Common stock withheld for minimum statutory taxes, net		—			(7,826	)		—			—			(7,826	)
Excess tax benefit from equity awards		—			6,327			—			—			6,327
Other		—			(150	)		—			—			(150	)
Cash provided by (used in) intercompany activity		64,113			(305,366	)		241,853			(600	)		—

Net cash provided by (used in) financing activities		18,771			1,740			241,553			(300	)		261,764

Effect of exchange rate changes on cash		—			1,213			—			—			1,213

Net (decrease) increase in cash and cash equivalents		—			(59,506	)		38			—			(59,468	)
Cash and cash equivalents at beginning of the period		—			76,685			17,355			—			94,040

Cash and cash equivalents at end of the period	$	—		$	17,179		$	17,393		$	—		$	34,572