Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The tables below set forth the unaudited pro forma condensed combined financial data for Acadia Healthcare Company, Inc. giving effect to Acadia’s planned purchase of Priory Group No. 1 Limited and the related issuance of common stock and debt financing transactions described herein.

The unaudited pro forma condensed combined financial data is based on the assumption that Acadia will issue $955.0 million of term loans and $390.0 million of senior unsecured notes offered by this offering memorandum.

The unaudited pro forma condensed combined balance sheet as of September 30, 2015 reflects the effect of Acadia’s other completed acquisitions that occurred after September 30, 2015, Acadia’s planned purchase of Priory and the related financing transactions described above as if they occurred on September 30, 2015.

The unaudited pro forma condensed combined statements of operations present income (loss) from continuing operations and give effect to each transaction as if it occurred on January 1, 2014.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2014 combines the audited consolidated statement of operations of Acadia, the unaudited consolidated statement of operations of Partnerships in Care Investments 1 Limited (“Partnerships in Care”) for the six months ended June 30, 2014, the audited consolidated statement of operations of CRC for the year ended December 31, 2014, the unaudited consolidated statement of operations for Acadia’s other completed acquisitions for the periods prior to the respective acquisition dates and the audited consolidated statement of operations for Priory for the year ended December 31, 2014.

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2015 combines the unaudited consolidated statement of operations of Acadia, the unaudited consolidated statement of operations of CRC for the period prior to February 11, 2015, the unaudited consolidated statement of operations for Acadia’s other completed acquisitions for the periods prior to the respective acquisition dates and the unaudited consolidated statement of operations for Priory for the nine months ended September 30, 2015.

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2014 combines the unaudited consolidated statement of operations of Acadia, the unaudited consolidated statement of operations of Partnerships in Care for the six months ended June 30, 2014, the unaudited consolidated statement of operations of CRC for the nine months ended September 30, 2014, the unaudited consolidated statement of operations for Acadia’s other completed acquisitions for the periods prior to the respective acquisition dates and the unaudited consolidated statement of operations for Priory for the nine months ended September 30, 2014.

The unaudited pro forma condensed combined financial data has been prepared using the acquisition method of accounting for business combinations under U.S. GAAP. The adjustments necessary to fairly present the unaudited pro forma condensed combined financial data have been made based on available information and in the opinion of management are reasonable. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma condensed combined financial data. The pro forma adjustments related to the planned purchase of Priory are preliminary and revisions to the fair value of assets acquired and liabilities assumed may have a significant impact on the pro forma adjustments. A final valuation of assets acquired and liabilities assumed has not been completed and the completion of fair value determinations may result in changes in the values assigned to property and equipment and other assets acquired (including intangibles) and liabilities assumed.

The unaudited pro forma condensed combined financial data is for illustrative purposes only and does not purport to represent what our financial position or results of operations actually would have been had the

 

1

---

events noted above in fact occurred on the assumed dates. Accordingly, the unaudited pro forma condensed combined financial information should not be used to project our financial position or results of operations for any future date or future period.

The unaudited pro forma condensed combined financial data should be read in conjunction with the consolidated financial statements and notes thereto of Acadia, Partnerships in Care, CRC and Priory incorporated by reference herein.

 

2

---

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of September 30, 2015

(In thousands)

 

		Acadia(1)				Completed Acquisitions Pro Forma Adjustments(2)				Acadia Pro Forma				Priory(3a)				Pro Forma Adjustments				Notes		Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents		$	50,762			$	(35,967	)		$	14,795			$	24,690			$	—					$	39,485
Accounts receivable, net			214,883				3,773				218,656				65,355				—						284,011
Deferred tax assets			37,291				—				37,291				23,169				—						60,460
Other current assets			75,335				442				75,777				16,056				—						91,833
Total current assets			378,271				(31,752	)			346,519				129,270				—						475,789
Property and equipment, net			1,624,166				32,474				1,656,640				1,653,851				—						3,310,491
Goodwill			1,981,140				150,621				2,131,761				283,068				480,726			(5)			2,895,555
Intangible assets, net			58,976				—				58,976				47,926				(10,426	)		(5)			96,476
Deferred tax assets—noncurrent			33,278				311				33,589				9,327				—						42,916
Other assets			69,408				51				69,459				—				50,000			(6)			119,459
Total assets		$	4,145,239			$	151,705			$	4,296,944			$	2,123,442			$	520,300					$	6,940,686
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt		$	41,996			$	—			$	41,996			$	11,105			$	(1,555	)		(7)		$	51,546
Accounts payable			78,384				609				78,993				85,705				—						164,698
Accrued salaries and benefits			87,110				1,841				88,951				27,198				—						116,149
Other accrued liabilities			56,962				353				57,315				41,443				—						98,758
Total current liabilities			264,452				2,803				267,255				165,451				(1,555	)					431,151
Long-term debt			2,092,317				148,899				2,241,216				1,365,784				(56,871	)		(7)			3,550,129
Deferred tax liabilities—noncurrent			22,210				—				22,210				221,373				(2,085	)		(5)			241,498
Other liabilities			87,008				3				87,011				36,098				—						123,109
Total liabilities			2,465,987				151,705				2,617,692				1,788,706				(60,511	)					4,345,887
Redeemable noncontrolling interests			8,700				—				8,700				—				—						8,700
Equity:
Common stock			707				—				707				17,343				(17,343	)		(4)			862
																			40			(5)
																			115			(6)
Additional paid-in capital			1,574,708				—				1,574,708				396,062				(396,062	)		(4)			2,505,600
																			246,007			(5)
																			684,885			(6)
Accumulated other comprehensive loss			(84,293	)			—				(84,293	)			—				—						(84,293	)
Retained earnings (accumulated deficit)			179,430				—				179,430				(78,669	)			78,669			(4)			163,930
																			(15,500	)		(6)
Total equity			1,670,552				—				1,670,552				334,736				580,811						2,586,099
Total liabilities and equity		$	4,145,239			$	151,705			$	4,296,944			$	2,123,442			$	520,300					$	6,940,686

See accompanying notes to unaudited pro forma financial information.

 

3

---

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2014

(In thousands, except per share amounts)

 

		Acadia(1)				Completed Acquisitions(2)				Partnerships in Care(8)				CRC(9)				Pro Forma Adjustments				Notes		Acadia Pro Forma				Priory(3b)				Pro Forma Adjustments				Notes		Pro Forma Combined
Revenue before provision for doubtful accounts		$	1,030,784			$	260,003			$	142,312			$	460,040			$	—					$	1,893,139			$	857,968			$	—					$	2,751,107
Provision for doubtful accounts			(26,183	)			(1,730	)			3				—				(7,872	)		(10)			(35,782	)			—				—						(35,782	)
Revenue			1,004,601				258,273				142,315				460,040				(7,872	)					1,857,357				857,968				—						2,715,325
Salaries, wages and benefits			575,412				143,637				84,641				227,692				—						1,031,382				496,456				—						1,527,838
Professional fees			52,482				12,802				6,737				40,551				—						112,572				25,024				—						137,596
Supplies			48,422				9,948				4,868				20,858				—						84,096				34,507				—						118,603
Rents and leases			12,201				7,292				909				17,538				—						37,940				27,924				—						65,864
Other operating expenses			110,654				24,173				11,644				51,517				(1,122	)		(14)			196,866				64,594				—						261,460
Depreciation and amortization			32,667				8,002				11,731				21,290				(11,611	)		(11a)			62,079				82,696				(9,483	)		(11b)			135,292
Interest expense, net			48,221				1,634				43,084				72,718				(46,023	)		(12a)			119,634				153,647				(74,770	)		(12b)			198,511
Provision for doubtful accounts			—				—				—				7,872				(7,872	)		(10)			—				—				—						—
Debt extinguishment costs			—				—				—				11,622				—						11,622				26,335				—						37,957
Gain on foreign currency derivatives			(15,262	)			—				—				—				15,262			(13)			—				—				—						—
Goodwill and asset impairments			—				—				—				1,089				—						1,089				—				—						1,089
Transaction-related expenses			13,650				—				—				7,686				(21,336	)		(14)			—				4,605				(4,605	)		(14)			—
Total expenses			878,447				207,488				163,614				480,433				(72,702	)					1,657,280				915,788				(88,858	)					2,484,210
Income (loss) from continuing operations before income taxes			126,154				50,785				(21,299	)			(20,393	)			64,830						200,077				(57,820	)			88,858						231,115
Provision (benefit) for income taxes			42,922				14,310				30				6,576				187			(15)			64,025				(36,628	)			30,382			(15)			57,779
Income (loss) from continuing operations			83,232				36,475				(21,329	)			(26,969	)			64,643						136,052				(21,192	)			58,476						173,336
Income (loss) from discontinued operations, net of income taxes			(192	)			—				—				(4,471	)			—						(4,663	)			—				—						(4,663	)
Net income			83,040				36,475				(21,329	)			(31,440	)			64,643						131,389				(21,192	)			58,476						168,673
Net loss attributable to noncontrolling interests			—				—				—				—				—						—				—				—						—
Net income attributable to Acadia Healthcare Company, Inc.		$	83,040			$	36,475			$	(21,329	)		$	(31,440	)		$	64,643					$	131,389			$	(21,192	)		$	58,476					$	168,673
Earnings per share—income (loss) from continuing operations:
Basic		$	1.51																					$	1.94													$	2.02
Diluted		$	1.50																					$	1.93													$	2.01
Weighted average shares:
Basic			55,063																15,214			(16a-c)			70,277								15,534			(16d)			85,811
Diluted			55,327																15,214			(16a-c)			70,541								15,534			(16d)			86,075

See accompanying notes to unaudited pro forma financial information.

 

4

---

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2015

(In thousands, except per share amounts)

 

		Acadia(1)				Completed Acquisitions(2)				CRC(9)				Pro Forma Adjustments				Notes		Acadia Pro Forma				Priory(3c)				Pro Forma Adjustments				Notes		Pro Forma Combined
Revenue before provision for doubtful accounts		$	1,324,702			$	124,023			$	53,014			$	—					$	1,501,739			$	650,465			$	—					$	2,152,204
Provision for doubtful accounts			(25,529	)			(1,069	)			—				(1,206	)		(10)			(27,804	)			—				—						(27,804	)
Revenue			1,299,173				122,954				53,014				(1,206	)					1,473,935				650,465				—						2,124,400
Salaries, wages and benefits			707,583				70,105				31,288				—						808,976				374,873				—						1,183,849
Professional fees			83,215				6,003				5,136				—						94,354				21,748				—						116,102
Supplies			58,430				4,837				2,583				—						65,850				25,732				—						91,582
Rents and leases			22,639				2,654				2,023				—						27,316				33,017				—						60,333
Other operating expenses			148,899				11,469				5,708				—						166,076				62,324				—						228,400
Depreciation and amortization			44,920				3,564				2,459				(688	)		(11a)			50,255				58,050				(6,987	)		(11b)			101,318
Interest expense, net			77,932				991				8,883				3,134			(12a)			90,940				93,161				(34,004	)		(12b)			150,097
Provision for doubtful accounts			—				—				1,206				(1,206	)		(10)			—				—				—						—
Debt extinguishment costs			9,979				—				—				—						9,979				—				—						9,979
Gain on foreign currency derivatives			1,926				—				—				(1,926	)		(13)			—				—				—						—
Goodwill and asset impairments			—				—				—				—						—				—				—						—
Transaction-related expenses			31,415				—				1,712				(33,127	)		(14)			—				2,304				(2,304	)		(14)			—
Total expenses			1,186,938				99,623				60,998				(33,813	)					1,313,746				671,209				(43,295	)					1,941,660
Income (loss) from continuing operations before income taxes			112,235				23,331				(7,984	)			32,607						160,189				(20,744	)			43,295						182,740
Provision (benefit) for income taxes			34,794				6,777				(3,034	)			9,520			(15)			48,057				(297	)			(2,075	)		(15)			45,685
Income (loss) from continuing operations			77,441				16,554				(4,950	)			23,087						112,132				(20,447	)			45,370						137,055
Income (loss) from discontinued operations, net of income taxes			83				—				(77	)			—						6				—				—						6
Net income			77,524				16,554				(5,027	)			23,087						112,138				(20,447	)			45,370						137,061
Net loss attributable to noncontrolling interests			464				—				—				—						464				—				—						464
Net income attributable to Acadia Healthcare Company, Inc.		$	77,988			$	16,554			$	(5,027	)		$	23,087					$	112,602			$	(20,447	)		$	45,370					$	137,525
Earnings per share—income (loss) from continuing operations:
Basic		$	1.16																	$	1.53													$	1.54
Diluted		$	1.15																	$	1.52													$	1.54
Weighted average shares:
Basic			67,194												6,072			(16a-c)			73,266								15,534			(16d)			88,800
Diluted			67,539												6,072			(16a-c)			73,611								15,534			(16d)			89,145

See accompanying notes to unaudited pro forma financial information.

 

5

---

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2014

(In thousands, except per share amounts)

 

		Acadia(1)				Completed Acquisitions(2)				Partnerships in Care(8)				CRC(9)				Pro Forma Adjustments				Notes		Acadia Pro Forma				Priory(3d)				Pro Forma Adjustments				Notes		Pro Forma Combined
Revenue before provision for doubtful accounts		$	729,784			$	200,233			$	142,312			$	340,255			$	—					$	1,412,584			$	643,223			$	—					$	2,055,807
Provision for doubtful accounts			(20,084	)			(1,334	)			3				—				(5,718	)		(10)			(27,133	)			—				—						(27,133	)
Revenue			709,700				198,899				142,315				340,255				(5,718	)					1,385,451				643,223				—						2,028,674
Salaries, wages and benefits			408,680				110,472				84,641				157,792				—						761,585				374,624				—						1,136,209
Professional fees			36,151				9,832				6,737				30,297				—						83,017				18,257				—						101,274
Supplies			34,722				7,582				4,868				15,221				—						62,393				25,670				—						88,063
Rents and leases			8,872				5,771				909				12,925				—						28,477				18,541				—						47,018
Other operating expenses			79,188				18,640				11,644				38,218				(1,122	)		(14)			146,568				46,986				—						193,554
Depreciation and amortization			21,696				6,172				11,731				15,352				(8,925	)		(11a)			46,026				63,403				(7,771	)		(11b)			101,658
Interest expense, net			33,505				1,301				43,084				54,455				(42,941	)		(12a)			89,404				118,771				(59,614	)		(12b)			148,561
Provision for doubtful accounts			—				—				—				5,718				(5,718	)		(10)			—				—				—						—
Debt extinguishment costs			—				—				—				11,622				—						11,622				—				—						11,622
Gain on foreign currency derivatives			(15,262	)			—				—				—				15,262			(13)			—				—				—						—
Goodwill and asset impairments			—				—				—				1,089				—						1,089				—				—						1,089
Transaction-related expenses			10,834				—				—				3,256				(14,090	)		(14)			—				4,666				(4,666	)		(14)			—
Total expenses			618,386				159,770				163,614				345,945				(57,534	)					1,230,181				670,918				(72,051	)					1,829,048
Income (loss) from continuing operations before income taxes			91,314				39,129				(21,299	)			(5,690	)			51,816						155,270				(27,695	)			72,051						199,626
Provision (benefit) for income taxes			30,383				11,076				30				254				7,943			(15)			49,686				(23,944	)			24,165			(15)			49,907
Income (loss) from continuing operations			60,931				28,053				(21,329	)			(5,944	)			43,873						105,584				(3,751	)			47,886						149,719
Income (loss) from discontinued operations, net of income taxes			(20	)			—				—				(6,602	)			—						(6,622	)			—				—						(6,622	)
Net income			60,911				28,053				(21,329	)			(12,546	)			43,873						98,962				(3,751	)			47,886						143,097
Net loss attributable to noncontrolling interests			—				—				—				—				—						—				—				—						—
Net income attributable to Acadia Healthcare Company, Inc.		$	60,911			$	28,053			$	(21,329	)		$	(12,546	)		$	43,873					$	98,962			$	(3,751	)		$	47,886					$	143,097
Earnings per share—income (loss) from continuing operations:
Basic		$	1.14																					$	1.48													$	1.73
Diluted		$	1.13																					$	1.48													$	1.72
Weighted average shares:
Basic			53,670																17,453			(16a-c)			71,123								15,534			(16d)			86,657
Diluted			53,922																17,453			(16a-c)			71,375								15,534			(16d)			86,909

See accompanying notes to unaudited pro forma financial information.

 

6

---

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(In thousands, except per share amounts)

 

(1)	The amounts in this column represent, for Acadia, actual results for the periods presented.

 

(2)

The amounts in this column represent pro forma adjustments for Acadia’s completed acquisitions of (a) McCallum Place on September 3, 2014, (b) Quality Addiction Management, Inc. on March 1, 2015, (c) two facilities from Choice Lifestyles on April 1, 2015, (d) Pastoral Care Group on April 1, 2015, (e) Mildmay Oaks on April 1, 2015, (f) one facility from Choice Lifestyles on June 1, 2015, (g) fifteen facilities from Care UK Limited on June 1, 2015, (h) The Manor Clinic on July 1, 2015, (i) Belmont on July 1, 2015, (j) three facilities from the Danshell Group on September 1, 2015, (k) two facilities from Health and Social Care Partnerships on September 1, 2015, (l) Manor Hall on September 1, 2015, (m) Meadow View on October 1, 2015, (n) one facility from Health and Social Care Partnerships on November 1, 2015, (o) Duffy’s Napa Valley Rehab on November 1, 2015, (p) Discovery House-Group, Inc. on November 1, 2015 and (q) MMO Behavioral Health Systems on December 1, 2015. None of these acquisitions was individually material. Each acquisition is reflected in the adjustments up to its acquisition date. The unaudited pro forma condensed consolidated balance sheet only is adjusted for acquisitions described in (m) through (q), as the other acquisitions were completed prior to September 30, 2015 and are already reflected in the historical balance sheet of Acadia.

 

3)

The historical financial statements of Priory were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board in pounds sterling and have been adjusted to: (i) translate the financial statements to U.S. dollars based on the historical exchange rates below and (ii) to conform to Acadia’s financial statement presentation. No material differences between U.S. GAAP and IFRS have been identified with respect to Priory.

 

						GBP/USD
September 30, 2015			Spot Rate			$	1.5164
Year ended December 31, 2014			Average Rate			$	1.6476
Nine months ended September 30, 2015			Average Rate			$	1.5322
Nine months ended September 30, 2014			Average Rate			$	1.6693

 

7

---

(a)

The amount below represent the balances at September 30, 2015.

 

		Priory (in £ thousands, in IFRS)				Priory (in $ thousands, in U.S. GAAP)
Current assets:
Cash and cash equivalents		£	16,282			$	24,690
Accounts receivable, net			43,099				65,355
Deferred tax assets			15,279				23,169
Other current assets			10,588				16,056
Total current assets			85,248				129,270
Property and equipment, net			1,090,643				1,653,851
Goodwill			186,671				283,068
Intangible assets, net			31,605				47,926
Deferred tax assets—noncurrent			6,151				9,327
Total assets		£	1,400,318			$	2,123,442
Current liabilities:
Current portion of long-term debt		£	7,323			$	11,105
Accounts payable			56,519				85,705
Accrued salaries and benefits			17,936				27,198
Other accrued liabilities			27,330				41,443
Total current liabilities			109,108				165,451
Long-term debt			900,675				1,365,784
Deferred tax liabilities—noncurrent			145,986				221,373
Other liabilities			23,805				36,098
Total liabilities			1,179,574				1,788,706
Equity:
Common stock			11,437				17,343
Additional paid-in capital			261,186				396,062
Accumulated deficit			(51,879	)			(78,669	)
Total equity			220,744				334,736
Total liabilities and equity		£	1,400,318			$	2,123,442

 

8

---

(b)

The amounts below represent results for the year ended December 31, 2014.

 

		Priory (in £ thousands, in IFRS)				Priory (in $ thousands, in U.S. GAAP)
Revenue before provision for doubtful accounts		£	520,738			$	857,968
Provision for doubtful accounts			—				—
Revenue			520,738				857,968
Salaries, wages and benefits			301,321				496,456
Professional fees			15,188				25,024
Supplies			20,944				34,507
Rents and leases			16,948				27,924
Other operating expenses			39,205				64,594
Depreciation and amortization			50,192				82,696
Interest expense, net			93,255				153,647
Debt extinguishment			15,984				26,335
Transaction-related expenses			2,795				4,605
Total expenses			555,832				915,788
(Loss) income from continuing operations before income taxes			(35,094	)			(57,820	)
Benefit for income taxes			22,231				36,628
Loss from continuing operations		£	(12,863	)		$	(21,192	)

 

(c)

The amounts below represent results for the nine months ended September 30, 2015.

 

		Priory (in £ thousands, in IFRS)				Priory (in $ thousands, in U.S. GAAP)
Revenue before provision for doubtful accounts		£	424,530			$	650,465
Provision for doubtful accounts			—				—
Revenue			424,530				650,465
Salaries, wages and benefits			244,663				374,873
Professional fees			14,194				21,748
Supplies			16,794				25,732
Rents and leases			21,549				33,017
Other operating expenses			40,676				62,324
Depreciation and amortization			37,887				58,050
Interest expense, net			60,802				93,161
Transaction-related expenses			1,504				2,304
Total expenses			438,069				671,209
(Loss) income from continuing operations before income taxes			(13,539	)			(20,744	)
Benefit for income taxes			194				297
Loss from continuing operations		£	(13,345	)		$	(20,447	)

 

9

---

(d)

The amounts below represent results for the nine months ended September 30, 2014.

 

		Priory (in £ thousands, in IFRS)				Priory (in $ thousands, in U.S. GAAP)
Revenue before provision for doubtful accounts		£	385,325			$	643,223
Provision for doubtful accounts			—				—
Revenue			385,325				643,223
Salaries, wages and benefits			224,420				374,624
Professional fees			10,937				18,257
Supplies			15,378				25,670
Rents and leases			11,107				18,541
Other operating expenses			28,147				46,986
Depreciation and amortization			37,982				63,403
Interest expense, net			71,150				118,771
Transaction-related expenses			2,795				4,666
Total expenses			401,916				670,918
(Loss) income from continuing operations before income taxes			(16,591	)			(27,695	)
Benefit for income taxes			14,344				23,944
Loss from continuing operations		£	(2,247	)		$	(3,751	)

 

(4)	Reflects elimination of equity accounts of Priory.

 

(5)

Represents adjustments based on preliminary estimates of fair value and the adjustment to goodwill derived from the difference in the estimated total consideration to be transferred by Acadia and the estimated fair value of assets acquired and liabilities assumed by Acadia. Approximately $506,750 of the cash consideration and the amount required to repay Priory debt at the closing date are based on an assumed exchange rate of 1.45 U.S. dollars to one British Pound Sterling. A $0.01 change in the exchange rate would change the cash consideration by $14,100. To the extent that the exchange rate at closing of the Priory acquisition reflects a weaker dollar and is not fixed by the Company through use of forward foreign currency contracts, we expect to utilize our existing revolving line of credit to fund such incremental purchase price. The equity consideration is based on the issuance of 4,033,561 shares of Acadia common stock with a par value of $0.01 at a value of $61.00 per share, which results in estimated additional common stock of $40 and additional paid-in capital of $246,007.

 

Cash consideration		$	595,963
Assumption of Priory debt			1,342,000
Estimated equity consideration			246,047
Estimated total consideration			2,184,010
Cash			24,690
Accounts receivable			65,355
Deferred tax assets			23,169
Other current assets			16,056
Property and equipment			1,653,851
Intangible assets			37,500
Deferred tax assets—noncurrent			9,327
Accounts payable			(85,705	)
Accrued salaries and benefits			(27,198	)
Other accrued liabilities			(41,443	)
Deferred tax liability- long term			(219,288	)
Other long-term liabilities			(36,098	)
Fair value of assets acquired and liabilities assumed		$	1,420,216
Estimated goodwill			763,794
Less: historical goodwill			(283,068	)
Goodwill adjustment		$	480,726

 

10

---

The acquired assets and liabilities will be recorded at their relative fair values as of the closing date of the purchase. Estimated goodwill is based upon a determination of the fair value of assets acquired and liabilities assumed that is preliminary and subject to revision as the value of total consideration is finalized and additional information related to the fair value of property and equipment and other assets (including intangible assets) acquired and liabilities assumed becomes available. The actual determination of the fair value of assets acquired and liabilities assumed may differ from that assumed in these unaudited pro forma condensed combined financial statements and such differences may be material. Qualitative factors comprising goodwill include efficiencies derived through synergies expected by coordination of services provided across the combined network of facilities, achievement of operating efficiencies by benchmarking performance and applying best practices throughout the combined company.

 

(6)	The sources and uses of cash in connection with the purchase of Priory are expected to be as follows:

 

Sources relating to purchase of Priory:
New Term Loan B		$	955,000
% Senior Notes due 2024 offered hereby			390,000
Net proceeds from offering of Acadia common stock(a)			685,000
Equity issuance to Priory stockholders(b)			246,047
Total sources		$	2,276,047
Uses:
Equity issuance to Priory stockholders(b)			(246,047	)
Cash portion of purchase consideration(c)			(595,963	)
Repayment of Priory debt assumed(d)			(1,342,000	)
Debt financing costs			(50,000	)
Repayment of a portion of Acadia’s revolving credit facility			(26,537	)
Acquisition costs(e)			(15,500	)
Total uses		$	(2,276,047	)

 

(a)

Reflects proceeds from Acadia’s public equity offering completed on January 12, 2016, net of underwriting discounts and offering expenses, which results in estimated additional common stock of $115 and additional paid-in capital of $684,885.

(b)

The value of the equity to Priory stockholders is based on 4,033,561 common shares per the purchase agreement at a value of $61.00 per share.

(c)

Approximately $506,750 of the cash consideration is based on an assumed exchange rate of 1.45 U.S. dollars to one British Pound Sterling.

(d)

The repayment of Priory debt assumed is based on an assumed exchange rate of 1.45 U.S. dollars to one British Pound Sterling.

(e)

The effect of estimated acquisition costs are not included in the pro forma condensed combined statement of operations for the year ended December 31, 2014 and nine months ended September 30, 2015 and 2014 as these costs are nonrecurring and directly related to the transaction.

 

11

---

(7)	Represents the following adjustments to long-term debt:

 

		Current Portion				Long-term Portion				Total Debt
Incremental term B loans		$	9,550			$	945,450			$	955,000
Repayment of a portion of Acadia’s revolving credit facility			—				(26,537	)			(26,537	)
Repayment of Priory debt assumed			(11,105	)			(1,365,784	)			(1,376,889	)
New unsecured senior notes			—				390,000				390,000
Adjustments		$	(1,555	)		$	(56,871	)		$	(58,426	)

 

(8)

The historical financial statements of Partnerships in Care are prepared in accordance with U.K. GAAP and are adjusted to: (i) reconcile the financial statements to U.S. GAAP, (ii) translate the financial statements to U.S. dollars based on the historical exchange rates below and (iii) to conform to Acadia’s financial statement presentation.

 

						GBP/USD
Six months ended June 30, 2014			Average Rate			$	1.6687

The amounts below represent results for the six months ended June 30, 2014.

 

		Partnerships in Care (in £, in U.K. GAAP)				U.S. GAAP Adjustments				Partnerships in Care (in £, in U.S. GAAP)				Partnerships in Care (in $, in U.S. GAAP)
Revenue before provision for doubtful accounts		£	85,283			£				£	85,283			$	142,312
Provision for doubtful accounts			2								2				3
Revenue			85,285								85,285				142,315
Salaries, wages and benefits			51,601				(878	)			50,723				84,641
Professional fees			4,037								4,037				6,737
Supplies			2,917								2,917				4,868
Rents and leases			545								545				909
Other operating expenses			6,978								6,978				11,644
Depreciation and amortization			5,991				1,039				7,030				11,731
Interest expense, net			31,979				(6,160	)			25,819				43,084
Transaction-related expenses			—								—				—
Total expenses			104,048				(5,999	)			98,049				163,614
(Loss) income from continuing operations before income taxes			(18,763	)			5,999				(12,764	)			(21,299	)
(Benefit) provision for income taxes			(1,063	)			1,081				18				30
Loss from continuing operations		£	(17,700	)		£	4,918			£	(12,782	)		$	(21,329	)

 

(9)	The amount in this column represent, for CRC, actual results for the periods presented prior to the acquisition date of February 11, 2015.

 

(10)	Reflects reclassification of CRC provision for doubtful accounts to conform to Acadia historical presentation.

 

12

---

(11)	Represents the adjustments to depreciation and amortization expense as a result of recording the property and equipment and intangible assets at preliminary estimates of fair value as of the date of the acquisitions, as follows:

 

(a):

Partnerships in Care and CRC:

 

		Amount				Useful Lives (in years)				Monthly Depreciation				Year Ended December 31, 2014				Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
Partnerships in Care:
Land		$	73,689				N/A			$	—			$	—			$	—			$	—
Building and improvements			446,921				30-50				1,046				6,275				—				6,275
Equipment			19,330				3-10				354				2,127				—				2,127
			539,940								1,400				8,402				—				8,402
Indefinite-lived intangible assets			575				N/A				—				—				—				—
Partnerships in Care depreciation and amortization expense															8,402				—				8,402
CRC:
Land			24,597				N/A			$	—			$	—			$	—			$	—
Building and improvements			88,312				10-40				584				7,008				954				5,256
Equipment			21,201				3-10				500				6,000				817				4,500
Construction in progress			3,133				N/A				—				—				—				—
			137,243								1,084				13,008				1,771				9,756
Indefinite-lived intangible assets			37,000				N/A				—				—				—				—
											—				—				—				—
CRC depreciation and amortization expense															13,008				1,771				9,756
Total depreciation and amortization expense															21,410				1,771				18,158
Less: historical depreciation and amortization expense of Partnerships in Care															(11,731	)			—				(11,731	)
Less: historical depreciation and amortization expense of CRC															(21,290	)			(2,459	)			(15,352	)
Depreciation and amortization expense adjustment														$	(11,611	)		$	(688	)		$	(8,925	)

 

13

---

(b):

Priory:

 

		Amount				Useful Lives (in years)				Monthly Depreciation				Year Ended December 31, 2014				Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
Land		$	255,745				N/A			$	—			$	—			$	—			$	—
Building and improvements			1,202,113				30-50				2,531				32,653				22,774				24,812
Equipment			183,354				3-10				3,143				40,560				28,289				30,820
Construction in progress			12,639				N/A				—				—				—				—
			1,653,851								5,674				73,213				51,063				55,632
Indefinite-lived intangible assets			37,500				N/A				—				—				—				—
Depreciation and amortization expense															73,213				51,063				55,632
Less: historical depreciation and amortization expense															(82,696	)			(58,050	)			(63,403	)
Depreciation and amortization expense adjustment														$	(9,483	)		$	(6,987	)		$	(7,771	)

 

(12)	Represents an adjustment to interest expense to give effect to the following transactions:

 

(a)

Partnerships in Care, CRC and other completed acquisitions

 

		Year Ended December 31, 2014				Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
Interest related to 5.125% Senior Notes due 2022		$	7,688			$	—			$	7,688
Interest related to 5.625% Senior Notes due 2023			36,563				13,828				26,778
Interest related to Term Loan A			8,225				—				6,169
Interest related to Term Loan B			21,250				2,892				15,938
Interest related to change in the applicable interest rate on term A loans based on Acadia’s consolidated leverage ratio			1,141				285				856
Interest related to paydown of 12.875% Senior Notes			(12,553	)			(8,892	)			(8,892	)
Interest related to revolving line of credit paydown, net of borrowing			5,425				4,219				4,459
Interest related to amortization of deferred financing costs			3,674				676				2,903
Less: historical interest expense of Partnerships in Care			(43,084	)			—				(43,084	)
Less: historical interest expense of CRC			(72,718	)			(8,883	)			(54,455	)
Less: historical interest expense of other completed acquisitions			(1,634	)			(991	)			(1,301	)
Interest expense adjustment		$	(46,023	)		$	3,134			$	(42,941	)

 

14

---

(b)

Priory

 

		Year Ended December 31, 2014				Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
Interest related to     % Senior Notes due 2024 offered hereby(i)		$	27,300			$	20,475			$	20,475
Interest related to Incremental Term Loan B(ii)			45,363				34,022				34,022
Interest related to paydown of a portion of Acadia’s revolving credit(iii)			(929	)			(697	)			(697	)
Interest related to amortization of deferred financing costs			7,143				5,357				5,357
Less: historical interest expense			(153,647	)			(93,161	)			(118,771	)
Interest expense adjustment		$	(74,770	)		$	(34,004	)		$	(59,614	)

 

(i)

An increase or decrease of 0.125% in the assumed interest rate of 7.0% would result in a change of $0.5 million, $0.4 million and $0.4 million for the year ended December 31, 2014 and nine months ended September 30, 2015 and 2014, respectively.

(ii)

An increase or decrease of 0.125% in the assumed interest rate of 4.75% would result in a change of $1.2 million, $0.9 million and $0.9 million for the year ended December 31, 2014 and nine months ended September 30, 2015 and 2014, respectively.

(iii)

An increase or decrease of 0.125% in the assumed interest rate of 3.5% would result in a change of less than $0.1 million for the year ended December 31, 2014 and nine months ended September 30, 2015 and 2014.

 

(13)

Represents the change in fair value of foreign currency derivatives purchased by Acadia related to its investments in to the U.K. to fund the acquisition of Partnerships in Care on July 1, 2014 and subsequent transactions occurring in 2015. This expense is omitted in the pro forma statement of operations as it is non-recurring and directly related to such transactions.

 

(14)	Reflects the removal of acquisition-related expenses included in the historical statements of operations.

 

(15)	Reflects adjustments to income taxes to reflect the impact of the above pro forma adjustments applying combined U.S. federal and state statutory tax rates and U.K. statutory rates.

 

(16)	Represents adjustments to weighted average shares used to compute basic and diluted earnings per share for the following.

 

(a)

To reflect the effect of 8,881,794 shares of common stock issued by Acadia in June 2014, which resulted in an increase in the weighted average shares outstanding of 4,063,725 and 6,302,424 for the year ended December 31, 2014 and nine months ended September 30, 2014, respectively, on a pro forma basis. The proceeds of Acadia’s offering of such common stock were used to partially fund Acadia’s acquisition of Partnerships in Care on July 1, 2014.

 

(b)

To reflect the effect of 5,975,326 shares of common stock issued by Acadia in February 2015, which resulted in an increase in the weighted average shares outstanding of 5,975,326 for each of the year ended December 31, 2014 and the nine months ended September 30, 2014, and 897,393 for the nine months ended September 30, 2015, on a pro forma basis. The proceeds of Acadia’s offering of such common stock were used to partially fund Acadia’s acquisition of CRC on February 11, 2015.

 

(c)

To reflect the effect of 5,175,000 shares of common stock issued by Acadia in May 2015, which resulted in an increase in the weighted average shares outstanding of 5,175,000 for the year ended December 31, 2014 on a pro forma basis. The proceeds of Acadia’s offering of such common stock were used to repay outstanding indebtedness and fund acquisitions.

 

(d)

To reflect the effect of 11,500,000 shares of common stock issued by Acadia in January 2016 and the issuance of 4,033,561 shares of common stock to be issued to Advent in connection with the acquisition of Priory, which resulted in an increase of weighted average shares outstanding of 15,533,561 for the year ended December 31, 2014 and nine months ended September 30, 2015 and 2014.

 

15