Acadia Healthcare (ACHC) 8-K Acadia Healthcare Announces Proposed $300 Million Senior Unsecured Debt Offering

Exhibit 99.2

SUMMARY HISTORICAL CONDENSED CONSOLIDATED FINANCIAL DATA AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

The table below sets forth:

• our summary historical condensed consolidated financial data for the periods ended and at the dates indicated; and

• the unaudited pro forma condensed combined financial data for Acadia giving effect to (i) Acadia’s planned acquisition of CRC and related Financing Transactions, including the offering of the notes described in this offering memorandum, (ii) Acadia’s acquisition of Partnerships in Care on July 1, 2014, the sale of $300 million of 5.125% Senior Notes due 2022 on July 1, 2014 to finance such acquisition and the registered offering of 8,881,794 shares of our common stock that was completed on June 17, 2014 to finance such acquisition, and (iii) certain other acquisitions. With respect to the acquisition of CRC, the unaudited pro forma condensed combined financial data is based on Acadia’s issuance of up to an aggregate of 6.3 million shares of its common stock.

We have derived the historical condensed consolidated financial data for each of the three years in the period ended December 31, 2013 from our audited consolidated financial statements incorporated by reference in this offering memorandum from our Annual Report on Form 10-K for the year ended December 31, 2013. We have derived the summary condensed consolidated financial data as of and for the nine months ended September 30, 2013 and 2014 from our unaudited interim condensed consolidated financial statements incorporated by reference in this offering memorandum from our Quarterly Report on Form 10-Q for the nine months ended September 30, 2014. We have derived the income statement data for the twelve months ended September 30, 2014 by taking the income statement data for the fiscal year ended December 31, 2013, subtracting the income statement data for the nine months ended September 30, 2013, and adding the income statement data for the nine months ended September 30, 2014. The unaudited financial statements were prepared on a basis consistent with our audited financial statements and include, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the financial information in those statements. The results for the nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the entire fiscal year.

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The summary historical condensed consolidated financial data below should be read in conjunction with “Unaudited Pro Forma Condensed Combined Financial Information” in this offering memorandum and the consolidated financial statements and the notes thereto of Acadia, CRC and Partnerships in Care included in, or incorporated by reference into, this offering memorandum.

	Year Ended December 31,									Nine Months Ended September 30,						Twelve Months Ended September 30, 2014			Pro Forma Year Ended December 31, 2013			Pro Forma Twelve Months Ended September 30, 2014
	2011			2012			2013			2013			2014
										(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	(In thousands)
Income Statement Data:
Revenue before provision for doubtful accounts	$	219,704		$	413,850		$	735,109		$	539,230		$	729,784		$	925,663		$	1,488,640		$	1,609,938
Provision for doubtful accounts		(3,206	)		(6,389	)		(21,701	)		(15,821	)		(20,084	)		(25,964	)		(30,682	)		(33,428	)
Revenue		216,498			407,461			713,408			523,409			709,700			899,699			1,457,958			1,576,510
Salaries, wages and benefits(1)		152,609			239,639			407,962			298,904			408,680			517,738			792,910			867,142
Professional fees		8,896			19,019			37,171			27,294			36,151			46,028			98,118			98,069
Other operating expenses		37,096			70,111			128,190			94,818			122,782			156,154			264,957			285,063
Depreciation and amortization		4,278			7,982			17,090			12,248			21,696			26,538			49,322			54,905
Interest expense, net		9,191			29,769			37,250			27,672			33,505			43,083			106,673			107,370
Sponsor management fees		1,347			—			—			—			—			—			—			—
Debt extinguishment costs		—			—			9,350			9,350			—			—			9,350			11,622
Gain on foreign currency derivatives		—			—			—			—			(15,262	)		(15,262	)		—			(15,262	)
Goodwill and assets impairments		—			—			—			—			—			—			19,341			20,430
Transaction-related expenses		41,547			8,112			7,150			3,813			10,834			14,171			5,539			11,893
(Loss) income from continuing operations, before income taxes		(38,466	)		32,829			69,245			49,310			91,314			111,249			111,748			135,278
Income tax (benefit) provision		(5,272	)		12,325			25,975			18,439			30,383			37,919			45,182			52,300
(Loss) income from continuing operations		(33,194	)		20,504			43,270			30,871			60,931			73,330			66,566			82,978
Loss from discontinued operations, net of income taxes		(1,698	)		(101	)		(691	)		(572	)		(20	)		(139	)		(44,751	)		(21,762	)
Net (loss) income	$	(34,892	)	$	20,403		$	42,579		$	30,299		$	60,911		$	73,191		$	21,815		$	61,216
Other Financial Data:
EBITDA(2)																$	180,870		$	267,743		$	297,553
Adjusted EBITDA(3)																$	188,259		$	357,097		$	370,374
Cash interest expense(4)																$	40,283		$	100,204		$	100,633
Ratio of pro forma net debt to pro forma adjusted EBITDA(3) (5)																							5.2x
Ratio of pro forma adjusted EBITDA to pro forma cash interest expense(3) (4)																							3.7x

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	As September 30, 2014
	Actual		As Adjusted(6)
	(Unaudited)
	(In thousands)
Unaudited As Adjusted Condensed Combined Balance Sheet Data
Cash and cash equivalents	$	42,179	$	47,179
Total assets		2,140,468		3,432,532
Total debt		1,029,322		1,962,880
Total stockholders’ equity	$	886,576	$	1,234,568

(1) Salaries, wages and benefits include equity-based compensation expense of $17.3 million, $2.3 million, $5.2 million, $3.7 million and $7.0 million for the years ended December 31, 2011, 2012 and 2013 and the nine months ended September 30, 2013 and 2014, respectively.

(2) Actual and pro forma EBITDA and adjusted EBITDA are reconciled to pro forma net income (loss) in the tables below. Actual and pro forma EBITDA and adjusted EBITDA are financial measures not recognized under GAAP. When presenting non-GAAP financial measures, we are required to reconcile the non-GAAP financial measures with the most directly comparable GAAP financial measure or measures. We define EBITDA as net income (loss) adjusted for loss (income) from discontinued operations, net interest expense, income tax provision (benefit) and depreciation and amortization. We define adjusted EBITDA as EBITDA adjusted for equity-based compensation expense, transaction costs, anticipated cost savings synergies, the effects of foreign currency derivatives, debt extinguishment costs, and certain other items. See the tables and related footnotes below for additional information.

(3) We present actual and pro forma adjusted EBITDA because each is a measure management uses to assess financial performance. We believe that companies in our industry use measures of EBITDA as common performance measurements. We also believe that securities analysts, investors and other interested parties frequently use measures of EBITDA as financial performance measures and as indicators of ability to service debt obligations. While providing useful information, measures of EBITDA, including pro forma adjusted EBITDA, should not be considered in isolation or as a substitute for consolidated statement of operations and cash flows data prepared in accordance with GAAP and should not be construed as an indication of a company’s operating performance or as a measure of liquidity. Actual and pro forma adjusted EBITDA may have material limitations as a performance measure because it excludes items that are necessary elements of our costs and operations. In addition, “EBITDA,” “Adjusted EBITDA” or similar measures presented by other companies may not be comparable to our presentation, because each company may define these terms differently. See “Non-GAAP Financial Measures.”

(4) Cash interest expense is defined as pro forma interest expense excluding amortization of financing fees and original issue discount.

(5) Net debt is defined as total debt less cash and cash equivalents.

(6) Adjusted to give effect to the Transactions (including the issuance and sale of notes offered hereby), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by us, assuming that the Transactions closed on September 30, 2014.

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	Twelve Months Ended September 30, 2014									Pro Forma Year Ended December 31, 2013		Pro Forma Twelve Months Ended September 30, 2014
				Pro Forma Nine Months Ended September 30,
				2013			2014
	(Unaudited) (In thousands)
Reconciliation of Net Income to Adjusted EBITDA:
Income from continuing operations	$	73,330		$	69,856		$	86,268		$	66,566	$	82,978
Interest expense, net		43,083			79,810			80,507			106,673		107,370
Income tax provision		37,919			32,554			39,672			45,182		52,300
Depreciation and amortization		26,538			36,410			41,993			49,322		54,905
EBITDA	$	180,870		$	218,630		$	248,440		$	267,743	$	297,553
Adjustments:
Equity-based compensation expense(a)		8,480			3,114			8,919			5,284		11,089
Transaction costs(b)		14,171			7,575			14,546			12,705		19,676
Debt extinguishment costs(c)		—			9,350			11,622			9,350		11,622
Gain on foreign currency derivatives(d)		(15,262	)		—			(15,262	)		—		(15,262	)
Management fees(e)		—			1,800			1,770			2,161		2,131
Goodwill and asset impairment(f)		—			—			1,089			19,341		20,430
Gain (loss) on asset disposals(g)		—			(3	)		594			2,875		3,472
Legal settlement costs(h)		—			10,620			146			10,879		405
Restructuring savings(i)		—			6,785			1,069			8,701		2,984
Habit acquisition synergies(j)		—			2,294			510			3,058		1,274
Cost savings synergies(k)		—			11,250			11,250			15,000		15,000
Adjusted EBITDA	$	188,259		$	271,415		$	284,693		$	357,097	$	370,374

(a) Represents the equity-based compensation expense of Acadia of $3,744, $6,975, $5,249 and $8,480 and CRC of ($630), $1,944, $35 and $2,609 for the nine months ended September 30, 2013 and 2014, the year ended December 31, 2013 and the twelve months ended September 30, 2014.

(b) Represents transaction-related expenses, as follows:

• For Acadia, transaction-related expenses primarily related to acquisitions of $14,171, $3,813, $10,168, $5,539 and $11,894 on an actual basis for the twelve months ended September 30, 2014, on a pro forma basis for the nine months ended September 30, 2013 and 2014, the year ended December 31, 2013 and the twelve months ended September 30, 2014.

• For Partnerships in Care, transaction-related expenses represent non-recurring legal and other professional fees and redundancy related costs of $0, $1,362, $1,122, $1,645, and $1,405 on an actual basis for the twelve months ended September 30, 2014, on a pro forma basis for the nine months ended September 30, 2013 and 2014, the year ended December 31, 2013 and the twelve months ended September 30, 2014.

• For CRC, transaction-related expenses primarily related to its acquisition of Habit Holdings, Inc., or Habit, on February 28, 2014, its refinancing activity completed on March 28, 2014 and its pending sale to Acadia of $0, $2,400 ($1,611 incurred by CRC and $789 incurred by Habit), $3,256 incurred by CRC, $5,521 ($4,369 incurred by CRC and $1,152 incurred by Habit) and $6,377 ($6,014 incurred by CRC and $363 incurred by Habit) on an actual basis for the twelve months ended September 30, 2014, on a pro forma basis for the nine months ended September 30, 2013 and 2014, the year ended December 31, 2013 and the twelve months ended September 30, 2014.

(c) Represents debt extinguishment costs incurred by Acadia of $9,350 in connection with the redemption of $52,500 of our 12.875% Senior Notes in March 2013 and by CRC of $11,622 in connection with its debt refinancing in March 2014.

(d) Represents the change in fair value of foreign currency derivatives purchased by Acadia related to its acquisition of Partnerships in Care on July 1, 2014.

(e) Represents management fees paid by CRC to its private equity investor that will be eliminated in connection with the merger.

(f) Represents non-cash impairment of goodwill and other long-lived assets recorded by CRC.

(g) Represents non-cash gains and losses incurred by CRC on disposals of assets of $0, ($3) ($368 of gains and $365 of losses), $594 ($13 of gains and $607 of losses), $2,875 ($468 of gains and $3,343 of losses) and $3,472 ($114 of gains

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and $3,586 of losses) on an actual basis for the twelve months ended September 30, 2014, on a pro forma basis for the nine months ended September 30, 2013 and 2014, the year ended December 31, 2013 and the twelve months ended September 30, 2014.

(h) Represents legal settlement costs and legal fees incurred by CRC primarily related to the investigation by the Office of the Attorney General of the state of Tennessee at its New Life Lodge facility. Costs and expected settlement amounts were accrued in 2013 and the settlement was finalized and paid in April 2014.

(i) Represents the cost savings associated with CRC’s restructuring of its corporate office in the first quarter of 2014 and the restructuring of its youth services in 2013 and 2014 as if the restructuring occurred on January 1, 2013. These cost savings synergies related primarily to headcount reductions in youth programs as well as to the reduction of other corporate overhead expenses. While actions relating to these cost savings have been implemented, actual cost savings and the costs required to realize them could differ materially from these estimates. See “Risk Factors—Risks Relating to the Acquisition of CRC—We have made certain assumptions relating to the Acquisition in our forecasts that may prove to be materially inaccurate, and we may be unable to achieve the related cost savings or synergies” and “Risk Factors—Risks Relating to the Acquisition of CRC—If we are unable to successfully integrate CRC into our business following the Acquisition, our business, financial condition and results of operations may be negatively impacted.”

(j) Represents the cost savings synergies associated with CRC’s acquisition of Habit of $3,058, which is reflected as an adjustment for the period prior to the March 1, 2014 acquisition date and pro-rated for the twelve months ended September 30, 2014. These cost savings synergies related primarily to headcount reductions as well as to the reduction of other corporate overhead expenses. While actions relating to these cost savings have been implemented, actual cost savings and the costs required to realize them could differ materially from these estimates. See “Risk Factors—Risks Relating to the Acquisition of CRC—We have made certain assumptions relating to the Acquisition in our forecasts that may prove to be materially inaccurate, and we may be unable to achieve the related cost savings or synergies” and “Risk Factors—Risks Relating to the Acquisition of CRC—If we are unable to successfully integrate CRC into our business following the Acquisition, our business, financial condition and results of operations may be negatively impacted.”

(k) Represents the pro forma effect of cost savings synergies associated with Acadia’s merger with CRC of approximately $15,000. We anticipate that we will incur approximately $2,000 in costs to achieve these cost savings (exclusive of transaction-related costs), including costs for severance. We expect to incur a majority of these costs during the year ending December 31, 2015, and we expect to realize these cost savings synergies over the 24 month period following completion of the Acquisition. These cost savings synergies relate primarily to headcount reductions as well as to the reduction in certain professional and outside services fees across various departments and other general and administrative expenses. The actual relative proportion of synergies achieved through workforce reductions and non-headcount savings could differ materially from these estimates. Actual cost savings, the costs required to realize the cost savings and the source of the cost savings could differ materially from these estimates, and we cannot assure you that we will achieve the full amount of cost savings on the schedule anticipated or at all. See “Risk Factors—Risks Relating to the Acquisition of CRC—We have made certain assumptions relating to the Acquisition in our forecasts that may prove to be materially inaccurate, and we may be unable to achieve the related cost savings or synergies” and “Risk Factors—Risks Relating to the Acquisition of CRC—If we are unable to successfully integrate CRC into our business following the Acquisition, our business, financial condition and results of operations may be negatively impacted.”

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