Acadia Healthcare (ACHC) 8-K Other Events

Exhibit 99.1

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. (“Acadia”) giving effect to Acadia’s planned purchase of Priory Group No. 1 Ltd. (“Priory”) and the related issuance of common stock and debt financing transactions described herein.

With respect to the issuance of common stock, the unaudited pro forma condensed combined financial data is based on the assumption that Acadia will issue 5,363,000 shares of common stock to stockholders of Priory pursuant to the Sale and Purchase Deed between Acadia and Priory dated December 31, 2015 and sell 10,000,000 shares of Acadia common stock in the offering described herein, at an assumed offering price of $63.00 per share (which was a recent price of Acadia’s common stock on the NASDAQ Global Select Market), resulting in the issuance of a total of 15,363,000 shares.

With respect to Acadia’s planned debt financing, 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 in lieu of the Bridge Notes.

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

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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 events noted above in fact occurred on the assumed dates. Accordingly, the unaudited pro forma condensed combined financial 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 included or incorporated by reference herein.

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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			521,585		(5)		2,936,414
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		$	561,159			$	6,981,545
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			148,999			2,241,216			1,365,784			(30,334	)	(7)		3,576,666
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			(33,974	)			4,372,424
Redeemable noncontrolling interests		8,700			—			8,700			—			—				8,700
Equity:
Common stock		707			—			707			17,343			(17,343	)	(4)		861
														54		(5)
														100		(6)
Additional paid-in capital		1,574,708			—			1,574,708			396,062			(396,062	)	(4)		2,519,923
														337,815		(5)
														607,400		(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			595,133				2,600,421
Total liabilities and equity	$	4,145,239		$	151,705		$	4,296,944		$	2,123,442		$	561,159			$	6,981,545

See accompanying notes to unaudited pro forma financial information.

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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			(73,841	)	(12b)		199,440
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			(87,929	)			2,485,139
Income (loss) from continuing operations before income taxes		126,154			50,785			(21,299	)		(20,393	)		64,830				200,077			(57,820	)		87,929				230,186
Provision (benefit) for income taxes		42,922			14,310			30			6,576			187		(15)		64,025			(36,628	)		30,150		(15)		57,547
Income (loss) from continuing operations		83,232			36,475			(21,329	)		(26,969	)		64,643				136,052			(21,192	)		57,779				172,639
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	)		57,779				167,976
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	)	$	57,779			$	167,976
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						15,363		(16d)		85,640
Diluted		55,327												15,214		(16a-c)		70,541						15,363		(16d)		85,904

See accompanying notes to unaudited pro forma financial information.

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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			(33,307	)	(12b)		150,794
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			(42,598	)			1,942,357
Income (loss) from continuing operations before income taxes		112,235			23,331			(7,984	)		32,607				160,189			(20,744	)		42,598				182,043
Provision (benefit) for income taxes		34,794			6,777			(3,034	)		9,520		(15)		48,057			(297	)		(2,249	)	(15)		45,511
Income (loss) from continuing operations		77,441			16,554			(4,950	)		23,087				112,132			(20,447	)		44,847				136,532
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	)		44,847				136,538
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	)	$	44,847			$	137,002
Earnings per share—income (loss) from continuing operations:
Basic	$	1.16												$	1.53									$	1.54
Diluted	$	1.15												$	1.52									$	1.53
Weighted average shares:
Basic		67,194									6,072		(16a-c)		73,266						15,363		(16d)		88,629
Diluted		67,539									6,072		(16a-c)		73,611						15,363		(16d)		88,974

See accompanying notes to unaudited pro forma financial information.

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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			(58,917	)	(12b)		149,258
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			(71,354	)			1,829,745
Income (loss) from continuing operations before income taxes		91,314			39,129			(21,299	)		(5,690	)		51,816				155,270			(27,695	)		71,354				198,929
Provision (benefit) for income taxes		30,383			11,076			30			254			7,943		(15)		49,686			(23,944	)		23,990		(15)		49,732
Income (loss) from continuing operations		60,931			28,053			(21,329	)		(5,944	)		43,873				105,584			(3,751	)		47,364				149,197
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	)		47,364				142,575
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	)	$	47,364			$	142,575
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						15,363		(16d)		86,486
Diluted		53,922												17,453		(16a-c)		71,375						15,363		(16d)		86,738

See accompanying notes to unaudited pro forma financial information.

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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

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(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	)

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(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. The cash consideration of $535,611 and amount required to repay Priory debt at the closing date are based on an assumed exchange rate of 1.48 U.S. dollars to one British Pound Sterling. A $0.01 change in the exchange rate would change the cash consideration by $12,750. 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 estimated equity consideration is based on the issuance of 5,363,000 shares of Acadia common stock with a par value of $0.01 at an assumed value of $63.00 per share (which was a recent price of Acadia’s common stock on the NASDAQ Global Select Market), which results in estimated additional common stock of $54 and additional paid-in capital of $337,815. Final equity consideration will be determined at the closing of the purchase.

Cash consideration	$	518,000
Assumption of Priory debt		1,369,000
Estimated equity consideration		337,869
Estimated total consideration		2,224,869
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		804,653
Less: historical goodwill		(283,068	)
Goodwill adjustment	$	521,585

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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
New unsecured senior notes		390,000
Net proceeds from offering of Acadia common stock(a)		607,500
Equity issuance to Priory stockholders(b)		337,869
Total sources	$	2,290,369
Uses:
Equity issuance to Priory stockholders(b)		(337,869	)
Cash portion of purchase consideration(c)		(518,000	)
Repayment of Priory debt assumed(d)		(1,369,000	)
Debt financing costs		(50,000	)
Acquisition costs(e)		(15,500	)
Total uses	$	(2,290,369	)

(a) The equity offering proceeds are based on 10,000,000 common shares at an assumed offering price of $63.00 per share (which was a recent price of Acadia’s common stock on the NASDAQ Global Select Market) less underwriting discounts and other equity issuance costs of $22,500, which results in estimated additional common stock of $100 and additional paid-in capital of $607,400. If the option to purchase additional shares in the equity offering is exercised by the underwriters for the equity offering, such proceeds may be used to cash settle a portion of the equity consideration deliverable to Priory stockholders as described in note (b) below.

(b) The value of the equity to Priory stockholders is based on 5,363,000 common shares per the purchase agreement at an assumed value of $63.00 per share (which was a recent price of Acadia’s common stock on the NASDAQ Global Select Market). The aggregate amount of equity consideration to Priory stockholdes is subject to adjustment under certain circumstances set forth in the purchase agreement for the acquisition, including being subject to increase upon any change in Acadia’s stock price prior to, and including, pricing of the equity offering from an agreed upon price in the purchase agreement, or subject to decrease if we cash settle all or a portion of the equity consideration.

(c) The cash consideration of $518,000 is based on an assumed exchange rate of 1.48 U.S. dollars to one British Pound Sterling.

(d) The repayment of Priory debt assumed is based on an assumed exchange rate of 1.48 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.

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(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 Priory debt assumed		(11,105	)		(1,365,784	)		(1,376,889	)
New unsecured senior notes		—			390,000			390,000
Adjustments	$	(1,555	)	$	(30,334	)	$	(31,889	)

(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.

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(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	)

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(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	)

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(b) Priory

	Year Ended December 31, 2014			Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
Interest related to new unsecured senior notes(i)	$	27,300		$	20,475		$	20,475
Interest related to Incremental Term Loan B(ii)		45,363			34,022			34,022
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	$	(73,841	)	$	(33,307	)	$	(58,917	)

(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.

(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 8,881,794 for the year ended December 31, 2014 and nine months ended September 30, 2014 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 the year ended December 31, 2014 and nine months ended September 30, 2015 and 2014 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 an estimated 15,363,000 shares of common stock to be issued by Acadia. To the extent the price per share of Acadia common stock is lower than the assumed price per share of $63.00, we may need to issue additional shares of common stock to finance the Priory acquisition. A 300,000 increase in the outstanding shares would reduce earnings per share by $0.01 on a fully diluted basis.

15