Financial Information for the Company and Its Subsidiaries

6 Months Ended

Jun. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Financial Information for the Company and Its Subsidiaries

20.	Financial Information for the Company and Its Subsidiaries

The Company conducts substantially all of its business through its subsidiaries. The 6.125% Senior Notes, 5.125% Senior Notes, 5.625% Senior Notes and 6.500% Senior Notes are jointly and severally guaranteed on an unsecured senior basis by all of the Company’s subsidiaries that guarantee the Company’s obligations under the Amended and Restated Senior Credit Facility. Presented below is condensed consolidating financial information for the Company and its subsidiaries at June 30, 2019 and December 31, 2018, and for the three and six months ended June 30, 2019 and 2018. The information segregates the parent company (Acadia Healthcare Company, Inc.), the combined wholly-owned subsidiary guarantors, the combined non-guarantor subsidiaries and eliminations.

Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

June 30, 2019

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	30,264	$	13,277	$	—		$	43,541
Accounts receivable, net		—		278,255		68,234		—			346,489
Other current assets		—		67,790		13,674		—			81,464
Total current assets		—		376,309		95,185		—			471,494
Property and equipment, net		—		1,296,263		1,867,813		—			3,164,076
Goodwill		—		1,991,905		443,120		—			2,435,025
Intangible assets, net		—		58,355		31,258		—			89,613
Deferred tax assets		2,038		—		3,404		(2,038	)		3,404
Derivative instrument assets		72,965		—		—		—			72,965
Investment in subsidiaries		5,374,016		—		—		(5,374,016	)		—
Operating lease right-of-use assets		—		95,880		395,671		—			491,551
Other assets		252,507		53,419		5,502		(249,138	)		62,290
Total assets	$	5,701,526	$	3,872,131	$	2,841,953	$	(5,625,192	)	$	6,790,418

Current liabilities:
Current portion of long-term debt	$	38,895	$	—	$	—	$	—		$	38,895
Accounts payable		—		81,388		34,263		—			115,651
Accrued salaries and benefits		—		80,563		29,882		—			110,445
Current portion of operating lease liabilities		—		16,862		10,716		—			27,578
Other accrued liabilities		33,417		21,875		82,827		—			138,119
Total current liabilities		72,312		200,688		157,688		—			430,688
Long-term debt		3,206,868		—		249,138		(249,138	)		3,206,868
Deferred tax liabilities		—		36,334		48,800		(2,038	)		83,096
Operating lease liabilities		—		84,286		406,617		—			490,903
Other liabilities		—		106,832		17,478		—			124,310
Total liabilities		3,279,180		428,140		879,721		(251,176	)		4,335,865
Redeemable noncontrolling interests		—		—		32,207		—			32,207
Total equity		2,422,346		3,443,991		1,930,025		(5,374,016	)		2,422,346
Total liabilities and equity	$	5,701,526	$	3,872,131	$	2,841,953	$	(5,625,192	)	$	6,790,418

Acadia Healthcare Company, Inc.

Condensed Consolidating Balance Sheets

December 31, 2018

(In thousands)

	Parent		Combined Subsidiary Guarantors		Combined Non- Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Current assets:
Cash and cash equivalents	$	—	$	32,471	$	18,039	$	—		$	50,510
Accounts receivable, net		—		248,218		69,869		—			318,087
Other current assets		—		60,160		21,660		—			81,820
Total current assets		—		340,849		109,568		—			450,417
Property and equipment, net		—		1,219,803		1,887,963		—			3,107,766
Goodwill		—		1,936,057		460,355		—			2,396,412
Intangible assets, net		—		56,611		32,379		—			88,990
Deferred tax assets – noncurrent		1,841		—		3,468		(1,841	)		3,468
Derivative instruments		60,524		—		—		—			60,524
Investment in subsidiaries		5,190,771		—		—		(5,190,771	)		—
Other assets		306,495		52,824		9,548		(303,940	)		64,927
Total assets	$	5,559,631	$	3,606,144	$	2,503,281	$	(5,496,552	)	$	6,172,504
Current liabilities:
Current portion of long-term debt	$	34,112	$	—	$	—	$	—		$	34,112
Accounts payable		—		79,463		38,277		—			117,740
Accrued salaries and benefits		—		84,150		29,149		—			113,299
Other accrued liabilities		32,837		42,062		76,327		—			151,226
Total current liabilities		66,949		205,675		143,753		—			416,377
Long-term debt		3,159,375		—		303,940		(303,940	)		3,159,375
Deferred tax liabilities – noncurrent		—		31,874		50,339		(1,841	)		80,372
Other liabilities		—		107,866		46,401		—			154,267
Total liabilities		3,226,324		345,415		544,433		(305,781	)		3,810,391
Redeemable noncontrolling interests		—		—		28,806		—			28,806
Total equity		2,333,307		3,260,729		1,930,042		(5,190,771	)		2,333,307
Total liabilities and equity	$	5,559,631	$	3,606,144	$	2,503,281	$	(5,496,552	)	$	6,172,504

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Three Months Ended June 30, 2019

(In thousands)

	Parent			Combined Subsidiary Guarantors		Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue	$	—		$	480,250	$	309,112		$	—		$	789,362
Salaries, wages and benefits		4,182			254,656		171,381			—			430,219
Professional fees		—			26,340		32,089			—			58,429
Supplies		—			20,078		10,836			—			30,914
Rents and leases		—			8,716		11,703			—			20,419
Other operating expenses		—			61,519		33,158			—			94,677
Depreciation and amortization		—			20,017		21,060			—			41,077
Interest expense, net		20,138			23,486		4,986			—			48,610
Transaction-related expenses		—			4,578		634			—			5,212
Total expenses		24,320			419,390		285,847			—			729,557
(Loss) income before income taxes		(24,320	)		60,860		23,265			—			59,805
Equity in earnings of subsidiaries		65,884			—		—			(65,884	)		—
(Benefit from) provision for income taxes		(6,637	)		25,298		(7,057	)		—			11,604
Net income (loss)		48,201			35,562		30,322			(65,884	)		48,201
Net income attributable to noncontrolling interests		—			—		(61	)		—			(61	)
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	48,201		$	35,562	$	30,261		$	(65,884	)	$	48,140
Other comprehensive income:
Foreign currency translation loss		—			—		(50,618	)		—			(50,618	)
Gain on derivative instruments		17,587			—		—			—			17,587
Other comprehensive income (loss)		17,587			—		(50,618	)		—			(33,031	)
Comprehensive income (loss) attributable to Acadia Healthcare Company, Inc.	$	65,788		$	35,562	$	(20,357	)	$	(65,884	)	$	15,109

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Three Months Ended June 30, 2018

(In thousands)

	Parent			Combined Subsidiary Guarantors		Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue	$	—		$	453,782	$	311,956		$	—		$	765,738
Salaries, wages and benefits		7,129			239,999		169,613			—			416,741
Professional fees		—			24,677		28,784			—			53,461
Supplies		—			19,292		10,841			—			30,133
Rents and leases		—			8,311		11,925			—			20,236
Other operating expenses		—			55,258		32,024			—			87,282
Depreciation and amortization		—			18,611		21,317			—			39,928
Interest expense, net		15,465			23,602		6,745			—			45,812
Transaction-related expenses		—			2,671		216			—			2,887
Total expenses		22,594			392,421		281,465			—			696,480
(Loss) income before income taxes		(22,594	)		61,361		30,491			—			69,258
Equity in earnings of subsidiaries		75,752			—		—			(75,752	)		—
(Benefit from) provision for income taxes		(5,732	)		11,442		4,658			—			10,368
Net income (loss)		58,890			49,919		25,833			(75,752	)		58,890
Net loss attributable to noncontrolling interests		—			—		(54	)		—			(54	)
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	58,890		$	49,919	$	25,779		$	(75,752	)	$	58,836
Other comprehensive (loss) income:
Foreign currency translation loss		—			—		(143,599	)		—			(143,599	)
Gain on derivative instruments		29,107			—		—			—			29,107
Other comprehensive income (loss)		29,107			—		(143,599	)		—			(114,492	)
Comprehensive income (loss) attributable to Acadia Healthcare Company, Inc.	$	87,997		$	49,919	$	(117,820	)	$	(75,752	)	$	(55,656	)

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Six Months Ended June 30, 2019

(In thousands)

	Parent			Combined Subsidiary Guarantors		Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue	$	—		$	940,068	$	609,911		$	—		$	1,549,979
Salaries, wages and benefits		10,283			509,598		339,917			—			859,798
Professional fees		—			51,708		63,728			—			115,436
Supplies		—			39,462		21,409			—			60,871
Rents and leases		—			17,119		23,607			—			40,726
Other operating expenses		—			120,909		67,633			—			188,542
Depreciation and amortization		—			39,622		42,035			—			81,657
Interest expense, net		39,716			46,504		10,520			—			96,740
Transaction-related expenses		—			7,796		1,737			—			9,533
Total expenses		49,999			832,718		570,586			—			1,453,303
(Loss) income before income taxes		(49,999	)		107,350		39,325			—			96,676
Equity in earnings of subsidiaries		114,041			—		—			(114,041	)		—
(Benefit from) provision for income taxes		(13,670	)		42,363		(9,729	)		—			18,964
Net income (loss)		77,712			64,987		49,054			(114,041	)		77,712
Net gain attributable to noncontrolling interests		—			—		(101	)		—			(101	)
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	77,712		$	64,987	$	48,953		$	(114,041	)	$	77,611
Other comprehensive (loss) income:
Foreign currency translation loss		—			—		(6,137	)		—			(6,137	)
Gain on derivative instruments		8,897			—		—			—			8,897
Other comprehensive income (loss)		8,897			—		(6,137	)		—			2,760
Comprehensive income (loss) attributable to Acadia Healthcare Company, Inc.	$	86,609		$	64,987	$	42,816		$	(114,041	)	$	80,371

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Comprehensive Income (Loss)

Six Months Ended June 30, 2018

(In thousands)

	Parent			Combined Subsidiary Guarantors		Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Revenue	$	—		$	889,407	$	618,572		$	—			1,507,979
Salaries, wages and benefits		14,048			479,051		335,170			—			828,269
Professional fees		—			48,948		58,531			—			107,479
Supplies		—			38,004		21,493			—			59,497
Rents and leases		—			16,550		23,974			—			40,524
Other operating expenses		—			111,428		64,085			—			175,513
Depreciation and amortization		—			36,783		42,918			—			79,701
Interest expense, net		30,082			47,186		13,787			—			91,055
Debt extinguishment costs		940			—		—			—			940
Transaction-related expenses		—			6,680		975			—			7,655
Total expenses		45,070			784,630		560,933			—			1,390,633
(Loss) income before income taxes		(45,070	)		104,777		57,639			—			117,346
Equity in earnings of subsidiaries		143,350			—		—			(143,350	)		—
(Benefit from) provision for income taxes		(11,484	)		11,319		7,747			—			7,582
Net income (loss)		109,764			93,458		49,892			(143,350	)		109,764
Net income attributable to noncontrolling interests		—			—		(109	)		—			(109	)
Net income (loss) attributable to Acadia Healthcare Company, Inc.	$	109,764		$	93,458	$	49,783		$	(143,350	)	$	109,655
Other comprehensive (loss) income:
Foreign currency translation loss		—			—		(50,819	)		—			(50,819	)
Gain on derivative instruments		9,054			—		—			—			9,054
Other comprehensive income (loss)		9,054			—		(50,819	)		—			(41,765	)
Comprehensive income (loss) attributable to Acadia Healthcare Company, Inc.	$	118,818		$	93,458	$	(1,036	)	$	(143,350	)	$	67,890

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2019

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net income (loss)	$	77,712		$	64,987		$	49,054		$	(114,041	)	$	77,712
Adjustments to reconcile net income (loss) to net cash (used in) provided by continuing operating activities:
Equity in earnings of subsidiaries		(114,041	)		—			—			114,041			—
Depreciation and amortization		—			39,622			42,035			—			81,657
Amortization of debt issuance costs		5,887			—			—			—			5,887
Equity-based compensation expense		10,283			—			—			—			10,283
Deferred income taxes		(198	)		(73	)		66			—			(205	)
Other		2,126			321			(52	)		—			2,395
Change in operating assets and liabilities:
Accounts receivable, net		—			(24,767	)		(2,902	)		—			(27,669	)
Other current assets		—			(11,029	)		438			—			(10,591	)
Other assets		3,097			(714	)		1,375			(3,097	)		661
Accounts payable and other accrued liabilities		—			942			(12,002	)		—			(11,060	)
Accrued salaries and benefits		—			(4,628	)		1,396			—			(3,232	)
Other liabilities		—			5,558			(2,710	)		—			2,848
Net cash (used in) provided by operating activities		(15,134	)		70,219			76,698			(3,097	)		128,686
Investing activities:
Cash paid for acquisitions, net of cash acquired		—			(44,900	)		—			—			(44,900	)
Cash paid for capital expenditures		—			(93,952	)		(45,176	)		—			(139,128	)
Cash paid for real estate acquisitions		—			(4,448	)		—			—			(4,448	)
Other		—			6,402			4,092			—			10,494
Net cash used in investing activities		—			(136,898	)		(41,084	)		—			(177,982	)
Financing activities:
Borrowings on revolving credit facility		76,573			—			—			—			76,573
Principal payments on revolving credit facility		(11,573	)		—			—			—			(11,573	)
Principal payments on long-term debt		(16,492	)		—			(3,097	)		3,097			(16,492	)
Common stock withheld for minimum statutory taxes, net		(1,615	)		—			—			—			(1,615	)
Other		(2,375	)		(889	)		(1,081	)		—			(4,345	)
Cash (used in) provided by intercompany activity		(29,384	)		65,361			(35,977	)		—			—
Net provided by (used in) in financing activities		15,134			64,472			(40,155	)		3,097			42,548
Effect of exchange rate changes on cash		—			—			(221	)		—			(221	)
Net decrease in cash and cash equivalents		—			(2,207	)		(4,762	)		—			(6,969	)
Cash and cash equivalents at beginning of the period		—			32,471			18,039			—			50,510
Cash and cash equivalents at end of the period	$	—		$	30,264		$	13,277		$	—		$	43,541

Acadia Healthcare Company, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2018

(In thousands)

	Parent			Combined Subsidiary Guarantors			Combined Non- Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Operating activities:
Net income (loss)	$	109,764		$	93,458		$	49,892		$	(143,350	)	$	109,764
Adjustments to reconcile net income (loss) to net cash provided by (used in) continuing operating activities:
Equity in earnings of subsidiaries		(143,350	)		—			—			143,350			—
Depreciation and amortization		—			36,783			42,918			—			79,701
Amortization of debt issuance costs		5,326			—			(202	)		—			5,124
Equity-based compensation expense		14,048			—			—			—			14,048
Deferred income taxes		1,438			(5,843	)		427			—			(3,978	)
Debt extinguishment costs		940			—			—			—			940
Other		240			1,149			(349	)		—			1,040
Change in operating assets and liabilities:
Accounts receivable, net		—			(23,064	)		(3,040	)		—			(26,104	)
Other current assets		—			12,197			(2,244	)		—			9,953
Other assets		4,514			2,689			72			(4,514	)		2,761
Accounts payable and other accrued liabilities		—			27,859			(6,793	)		—			21,066
Accrued salaries and benefits		—			4,487			(123	)		—			4,364
Other liabilities		—			3,002			(3,795	)		—			(793	)
Net cash provided by (used in) continuing operating activities		(7,080	)		152,717			76,763			(4,514	)		217,886
Net cash used in discontinued operating activities		—			(572	)		—			—			(572	)
Net cash provided by (used in) operating activities		(7,080	)		152,145			76,763			(4,514	)		217,314
Investing activities:
Cash paid for capital expenditures		—			(97,186	)		(64,369	)		—			(161,555	)
Cash paid for real estate acquisitions		—			(8,857	)		—			—			(8,857	)
Other		—			(5,759	)		2,422			—			(3,337	)
Net cash used in investing activities		—			(111,802	)		(61,947	)		—			(173,749	)
Financing activities:
Principal payments on long-term debt		(23,246	)		(169	)		(4,345	)		4,514			(23,246	)
Common stock withheld for minimum statutory taxes, net		(2,134	)		—			—			—			(2,134	)
Other		(1,742	)		(1,924	)		(1,506	)		—			(5,172	)
Cash provided by (used in) intercompany activity		34,202			(25,131	)		(9,071	)		—			—
Net (used in) provided by in financing activities		7,080			(27,224	)		(14,922	)		4,514			(30,552	)
Effect of exchange rate changes on cash		—			—			(840	)		—			(840	)
Net increase (decrease) in cash and cash equivalents		—			13,119			(946	)		—			12,173
Cash and cash equivalents at beginning of the period		—			46,860			20,430			—			67,290
Cash and cash equivalents at end of the period	$	—		$	59,979		$	19,484		$	—		$	79,463