Business Wire | Feb 25, 2021 04:41PM EST

Acadia Healthcare Reports Fourth Quarter 2020 Results

Feb. 25, 2021

FRANKLIN, Tenn.--(BUSINESS WIRE)--Feb. 25, 2021--Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the fourth quarter and year ended December 31, 2020.

On January 19, 2021, the Company closed on the sale of Acadia's business operations in the United Kingdom, operating under the name of The Priory Group, to Waterland Private Equity. The U.K. business and its results have been presented as discontinued operations for all periods in this release. Supplemental information for discontinued operations has been included on pages 11 and 12.

Fourth Quarter 2020 Results

The Company reported revenue from continuing operations of $541.3 million for the fourth quarter of 2020, compared with $501.2 million for the fourth quarter of 2019. Net loss attributable to Acadia stockholders for the fourth quarter of 2020 was $783.7 million, or $8.78 per diluted share, compared with a net loss of $11.3 million, or $0.13 per diluted share, for the fourth quarter of 2019. The results for the fourth quarter of 2020 include a loss from discontinued operations of $828.7 million, net of income taxes, primarily related to the loss on sale of the U.K. business of $867.3 million.

Including discontinued operations, combined revenue for the fourth quarter of 2020 was $843.3 million and combined adjusted EBITDA was $207.5 million. Adjusted income attributable to Acadia stockholders per diluted share was $1.13 for the fourth quarter of 2020, which includes discontinued operations. Adjustments to income include transaction-related expenses, debt extinguishment costs, loss on impairment, loss on sale and the income tax effect of adjustments to income. Financial results for continuing operations combined with discontinued operations are presented, along with a reconciliation of all non-GAAP financial results in this press release, beginning on page 9.

Results for the fourth quarter of 2020 include other income of $32.8 million related to the Provider Relief Fund ("PRF") established by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. The Company's recognition of this income was based on revised guidance in the Consolidated Appropriations Act, 2021 enacted in December 2020. The Company's lost revenues and additional expenses incurred in the year ended December 31, 2020 as a result of the COVID-19 pandemic exceeded the grant income recognized in 2020.

For the fourth quarter, Acadia's U.S. same facility revenue increased 7.6% compared with the fourth quarter of 2019, including a 3.6% increase in patient days and a 3.8% increase in revenue per patient day.

Debbie Osteen, Chief Executive Officer of Acadia Healthcare Company, remarked, "We are very pleased with our financial and operating results for the fourth quarter of 2020, capping off an extraordinary and challenging year for Acadia. As the global COVID-19 pandemic continues to affect communities across the nation, we are mindful of our critical role as a leading provider of behavioral healthcare services. The ongoing uncertainties and economic and societal concerns have resulted in continued strong demand for our services, especially for those already struggling with behavioral health and addiction issues. As always, our primary mission is to support our patients and the communities that we serve, and we commend Acadia's employees and clinicians for their dedication and heroic efforts to provide the highest quality care in a safe and accessible manner, especially during these challenging times. We are fortunate to have an experienced team across our operations and a proven operating model that supports our ability to execute our strategy in a dynamic environment.

"At the end of 2020, we reached an agreement to sell our U.K. operations to Waterland Private Equity, which closed in January. This transaction is a significant milestone for Acadia, and we believe the sale will maximize long-term value for our stockholders. We are excited about the opportunities in the U.S. to extend our market reach and enhance our service offerings. Our U.S. operations showed very favorable results with improvement across all key metrics for the fourth quarter of 2020, driven by solid volumes and strong cost management.

"During the fourth quarter of 2020, we added 34 beds to our existing U.S. operations, and, for the full year, we added 240 beds to existing facilities and 220 beds through the opening of two joint venture facilities, as well as the opening of six comprehensive treatment centers ("CTC") in the U.S. In December, we opened Ascension St. Thomas Behavioral Health Hospital, a new 76-bed facility, through our joint venture with Ascension St. Thomas in Nashville, Tennessee. Also, in December, we announced a joint venture partnership with Henry Ford Health System for a 192-bed inpatient facility, which will serve the Detroit metro area when it opens in late 2022. We continue to execute on part of our strategy by partnering with health systems and hospitals across the country.

Debt Refinancing, Cash and Liquidity

As of December 31, 2020, the Company had $378.7 million in cash and cash equivalents, which excludes cash held by the U.K. operations. The Company voluntarily paid down $105 million of Term Loan B facility under its amended and restated credit agreement in January 2021 prior to completion of the U.K transaction. From the sale of the U.K. operations, the Company received $1,525 million of gross proceeds before deducting the settlement of foreign currency hedging liabilities of $85 million, cash retained by the buyer of approximately $75 million and transaction costs of $16 million. The Company initially used the sale proceeds of approximately $1,425 million (or $1,350 million, net of cash retained by the buyer) to repay all of its outstanding Term Loan A facility of $312 million and Term Loan B of $768 million and added $345 million of cash to the balance sheet.

On January 29, 2021, the Company sent conditional notices of full redemption for $650 million of 5.265% Senior Notes due 2023 and $390 million of 6.500% Senior Notes due 2024 to the holders of such notes. The redemption of this $1,040 million of additional debt, along with breakage costs of $6 million and estimated transaction costs of $9 million, is expected to be completed in early March and to be funded with cash from the balance sheet of $430 million and proceeds from a new senior secured credit facility of $625 million. The Company expects to enter a new term loan and revolver as part of a five-year senior secured credit facility.

Upon completion of these transactions, Acadia's debt structure is expected to include $1,025 million of a new term loan and revolving credit facility, $450 million of 5.500% Senior Notes due 2028, and $475 million of 5.000% Senior Notes due 2029, and the Company's net leverage ratio is expected to be below 3.0x.

"As intended, we used the proceeds from the U.K. transaction to pay down our outstanding debt," added Osteen. "We are pleased to refinance our other outstanding debt and improve our leverage profile. In addition, we continue to realize the cost savings from the steps we have taken in 2019 and 2020 related to our expense and cash management strategies. As a result, Acadia's balance sheet is very strong with ample liquidity and capital to invest in and grow our business."

Financial Guidance

Acadia today established financial guidance for 2021, as follows:

* Revenue in a range of $2.23 billion to $2.28 billion; * Adjusted EBITDA in a range of $490 million to $520 million; * Adjusted earnings per diluted share in a range of $2.20 to $2.45; * Interest expense of approximately $80 to $85 million of which $11 million of annualized interest expense is expected to be eliminated after the first quarter; * A tax rate of approximately 26.5%; * Depreciation and amortization expense in a range of $105 million to $110 million; * Stock compensation expense of approximately $28 million; * Operating cash flows in a range of $250 million to $285 million, which includes repayment in 2021 of $53 million of the $84 million of total Medicare Accelerated and Advanced Payment Program and employer payroll tax deferrals from the CARES Act; and * Total capital expenditures in a range of $285 million to $325 million, including approximately $45 million for maintenance capital expenditures.

Acadia also established financial guidance for the first quarter of 2021, as follows:

* Revenue in a range of $540 million to $550 million; * Adjusted EBITDA in a range of $110 million to $115 million; and * Adjusted earnings per diluted share in a range of $0.40 to $0.45.

The Company's guidance does not include discontinued operations or the impact of any future acquisitions, divestitures or transaction-related expenses.

Looking Ahead

Osteen added, "Looking ahead to 2021, we expect to add approximately 300 beds to existing facilities and 170 beds through the opening of one wholly owned facility and one joint venture facility. Additionally, due to the strong demand for treatment of patients with opioid use disorder, we expect to open 11 CTCs in 2021. Our strategic investments and strong pipeline of bed expansions, de novo facilities and joint ventures will provide additional growth opportunities for Acadia to reach more patients in new and existing markets.

"With our singular strategic focus on our U.S. operations and a strong financial position to support our growth initiatives, Acadia is well-positioned to meet the expected demand for mental health and addiction treatment. Across our operations, we will strive to deliver the highest quality of patient care, extend our market reach, and advance our market leadership as a behavioral healthcare facilities operator."

Conference Call

Acadia will hold a conference call to discuss its fourth quarter financial results at 10:00 a.m. Eastern Time on Friday, February 26, 2021. A live webcast of the conference call will be available at www.acadiahealthcare.com in the "Investors" section of the website. The webcast of the conference call will be available through March 12, 2021.

About Acadia

Acadia is a leading provider of behavioral healthcare services across the United States. Acadia operates a network of 227 behavioral healthcare facilities with approximately 9,900 beds in 40 states and Puerto Rico. With more than 20,000 employees serving approximately 70,000 patients daily, Acadia is the largest stand-alone behavioral health company in the U.S. Acadia provides behavioral healthcare services to its patients in a variety of settings, including inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.

Forward-Looking Information

This press release contains forward-looking statements. Generally, words such as "may," "will," "should," "could," "anticipate," "expect," "intend," "estimate," "plan," "continue," and "believe" or the negative of or other variation on these and other similar expressions identify forward-looking statements. These forward-looking statements are made only as of the date of this press release. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are based on current expectations and involve risks and uncertainties and our future results could differ significantly from those expressed or implied by our forward-looking statements. Factors that may cause actual results to differ materially include, without limitation, (i) the impact of the COVID-19 pandemic, including, without limitation, disruption to the U.S. economy and financial markets; reduced admissions and patient volumes; increased costs relating to labor, supply chain and other expenditures; and difficulty in collecting patient accounts receivable due to increases in the unemployment rate and the number of underinsured and uninsured patients; (ii) the risk that Acadia does not complete its debt refinancing transactions on terms and conditions acceptable to Acadia; (iii) potential difficulties in successfully integrating the operations of acquired facilities or realizing the expected benefits and synergies of our acquisitions, joint ventures and de novo transactions; (iv) Acadia's ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (v) potential reductions in payments received by Acadia from government and third-party payors; (vi) the occurrence of patient incidents, governmental investigations, litigation and adverse regulatory actions, which could adversely affect the price of our common stock and result in substantial payments and incremental regulatory burdens; (vii) the risk that Acadia may not generate sufficient cash from operations to service its debt and meet its working capital and capital expenditure requirements; and (viii) potential operating difficulties, labor costs, client preferences, changes in competition and general economic or industry conditions that may prevent Acadia from realizing the expected benefits of its business strategies. These factors and others are more fully described in Acadia's periodic reports and other filings with the SEC.

Acadia Healthcare Company, Inc.Condensed Consolidated Statements of Operations(Unaudited) Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

(In thousands, except per share amounts)

Revenue $ 541,276 $ 501,225 $ 2,089,929 $ 2,008,381

Salaries, wages andbenefits (includingequity-basedcompensationexpense of $6,246,$2,985, $22,504 and 301,658 273,406 1,154,522 1,107,357 $17,307,respectively)Professional fees 29,480 30,062 120,489 118,451

Supplies 22,213 21,768 87,241 85,534

Rents and leases 9,387 8,777 37,362 35,486

Other operating 59,732 65,851 262,272 259,536 expensesOther income (32,819 ) - (32,819 ) -

Depreciation and 24,958 22,667 95,256 87,923 amortizationInterest expense, 39,707 44,641 158,105 187,325 netDebt extinguishment 3,962 - 7,233 - costsLoss on impairment 4,751 27,217 4,751 27,217

Transaction-related 2,162 9,035 11,720 21,157 expensesTotal expenses 465,191 503,424 1,906,132 1,929,986

Income (loss) fromcontinuing 76,085 (2,199 ) 183,797 78,395 operations beforeincome taxesProvision for 29,929 9,993 40,606 25,085 income taxesIncome (loss) from 46,156 (12,192 ) 143,191 53,310 continuingoperations(Loss) income fromdiscontinued (828,697 ) 1,879 (812,390 ) 56,812 operations, net oftaxesNet (loss) income (782,541 ) (10,313 ) (669,199 ) 110,122

Net incomeattributable to (1,131 ) (941 ) (2,933 ) (1,199 )noncontrollinginterestsNet (loss) incomeattributable to $ (783,672 ) $ (11,254 ) $ (672,132 ) $ 108,923 Acadia HealthcareCompany, Inc. Basic earnings(loss) per shareattributable toAcadia HealthcareCompany, Inc.stockholders:Income (loss) fromcontinuingoperationsattributable toAcadia Healthcare $ 0.51 $ (0.15 ) $ 1.60 $ 0.59 Company, Inc.(Loss) income from $ (9.42 ) $ 0.02 $ (9.25 ) $ 0.65 discontinuedoperationsNet (loss) incomeattributable to $ (8.91 ) $ (0.13 ) $ (7.65 ) $ 1.24 Acadia HealthcareCompany, Inc. Diluted earnings(loss) per shareattributable toAcadia HealthcareCompany, Inc.stockholders:Income (loss) fromcontinuingoperationsattributable toAcadia Healthcare $ 0.50 $ (0.15 ) $ 1.58 $ 0.59 Company, Inc.(Loss) income from $ (9.28 ) $ 0.02 $ (9.17 ) $ 0.65 discontinuedoperationsNet (loss) incomeattributable to $ (8.78 ) $ (0.13 ) $ (7.59 ) $ 1.24 Acadia HealthcareCompany, Inc. Weighted-averageshares outstanding:Basic 87,952 87,674 87,875 87,612

Diluted 89,233 87,674 88,595 87,816

Acadia Healthcare Company, Inc.Condensed Consolidated Balance Sheets(Unaudited) December 31,

2020 2019

(In thousands)

ASSETSCurrent assets:Cash and cash equivalents $ 378,697 $ 99,535

Accounts receivable, net 273,551 288,863

Other current assets 61,332 64,967

Current assets held for sale 1,809,815 88,846

Total current assets 2,523,395 542,211

Property and equipment, net 1,622,896 1,499,587

Goodwill 2,105,264 2,085,104

Intangible assets, net 68,535 68,826

Deferred tax assets 3,209 3,339

Operating lease right-of-use assets 96,937 97,795

Other assets 79,126 55,106

Noncurrent assets held for sale - 2,527,174

Total assets $ 6,499,362 $ 6,879,142

LIABILITIES AND EQUITYCurrent liabilities:Current portion of long-term debt $ 153,478 $ 43,679

Accounts payable 87,815 90,257

Accrued salaries and benefits 124,912 93,595

Current portion of operating lease liabilities 18,916 18,119

Other accrued liabilities 178,453 69,234

Derivative instrument liabilities 84,584 -

Current liabilities held for sale 660,027 148,692

Total current liabilities 1,308,185 463,576

Long-term debt 2,968,948 3,105,420

Deferred tax liabilities 50,017 22,820

Operating lease liabilities 84,029 85,643

Noncurrent derivative instrument liabilities - 68,915

Other liabilities 133,412 107,152

Noncurrent liabilities held for sale - 487,084

Total liabilities 4,544,591 4,340,610

Redeemable noncontrolling interests 55,315 33,151

Equity:Common stock 880 877

Additional paid-in capital 2,580,327 2,557,642

Accumulated other comprehensive loss (371,365 ) (414,884 )

(Accumulated deficit) retained earnings (310,386 ) 361,746

Total equity 1,899,456 2,505,381

Total liabilities and equity $ 6,499,362 $ 6,879,142

Acadia Healthcare Company, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited) Year Ended December 31,

2020 2019

(In thousands)

Operating activities:Net (loss) income $ (669,199 ) $ 110,122

Adjustments to reconcile net income (loss) to netcash provided by operating activities:Depreciation and amortization 95,256 87,923

Amortization of debt issuance costs 12,636 11,987

Equity-based compensation expense 22,504 17,307

Deferred income taxes 53,108 1,089

Loss (income) from discontinued operations, net of 812,390 (56,812 )taxesDebt extinguishment costs 7,233 -

Loss on impairment 4,751 27,217

Other 1,041 3,916

Change in operating assets and liabilities, net ofeffect of acquisitions:Accounts receivable, net 15,340 (18,714 )

Other current assets 9,675 (501 )

Other assets 1,519 (2,372 )

Accounts payable and other accrued liabilities 77,993 (20,135 )

Accrued salaries and benefits 9,632 5,540

Other liabilities 48,965 16,862

Net cash provided by continuing operating 502,844 183,429 activitiesNet cash provided by discontinued operating 155,963 149,475 activitiesNet cash provided by operating activities 658,807 332,904

Investing activities:Cash paid for acquisitions, net of cash acquired - (44,900 )

Cash paid for capital expenditures (216,615 ) (225,061 )

Cash paid for real estate acquisitions (8,349 ) (7,618 )

Proceeds from sale of property and equipment 92 11,765

Settlement of foreign currency derivatives - 105,008

Other (13,365 ) 12,975

Net cash used in continuing investing activities (238,237 ) (147,831 )

Net cash used in discontinued investing activities (43,602 ) (53,310 )

Net cash used in investing activities (281,839 ) (201,141 )

Financing activities:Borrowings on long-term debt 925,000 -

Borrowings on revolving credit facility 100,000 76,573

Principal payments on revolving credit facility (100,000 ) (76,573 )

Principal payments on long-term debt (41,291 ) (52,984 )

Repayment of long-term debt (909,785 ) -

Payment of debt issuance costs (18,295 ) -

Common stock withheld for minimum statutory taxes, 184 (1,648 )netDistributions to noncontrolling interests (916 ) (154 )

Other (3,146 ) (4,369 )

Net cash used in continuing financing activities (48,249 ) (59,155 )

Net cash used in discontinued financing activities (3,250 ) (2,472 )

Net cash used in financing activities (51,499 ) (61,627 )

Effect of exchange rate changes on cash 4,087 3,546

Net increase in cash and cash equivalents,including cash classified withincurrent assets held for sale 329,556 73,682

Less: cash classified within current assets held (75,051 ) (24,657 )for saleNet increase in cash and cash equivalents 254,505 49,025

Cash and cash equivalents at beginning of the 124,192 50,510 periodCash and cash equivalents at end of the period $ 378,697 $ 99,535

Effect of acquisitions:Assets acquired, excluding cash $ 20,200 $ 48,594

Liabilities assumed (53 ) (3,694 )

Redeemable noncontrolling interest resulting from (20,147 ) - an acquisitionCash paid for acquisitions, net of cash acquired $ - $ 44,900

Acadia Healthcare Company, Inc.Operating Statistics(Unaudited, Revenue in thousands) Three Months Ended December 31, Year Ended December 31,

2020 2019 % 2020 2019 % Change Change

U.S. SameFacilityResults(a)Revenue $ 538,023 $ 500,241 7.6 % $ 2,076,332 $ 1,997,825 3.9 %

Patient 669,126 645,882 3.6 % 2,649,430 2,584,470 2.5 %DaysAdmissions 42,352 42,065 0.7 % 170,704 171,812 -0.6 %

Average 15.8 15.4 2.9 % 15.5 15.0 3.2 %Length ofStay (b)Revenueper $ 804 $ 775 3.8 % $ 784 $ 773 1.4 %PatientDayAdjusted 34.0 % 24.5 % 950 27.9 % 25.4 % 250EBITDA bps bpsmargin (c) U.S.FacilityResultsRevenue $ 541,276 $ 501,225 8.0 % $ 2,089,929 $ 2,008,381 4.1 %

Patient 671,840 652,415 3.0 % 2,667,762 2,613,164 2.1 %DaysAdmissions 42,639 42,222 1.0 % 172,277 172,320 0.0 %

Average 15.8 15.5 2.0 % 15.5 15.2 2.1 %Length ofStay (b)Revenueper $ 806 $ 768 4.9 % $ 783 $ 769 1.9 %PatientDayAdjusted 33.5 % 24.3 % 920 27.5 % 25.1 % 240EBITDA bps bpsmargin (c)(a) Same facility results for the periods presented include facilities we have operated for more than one year and exclude certain closed services.(b) Average length of stay is defined as patient days divided by admissions.(c) For the three months and year ended December 31, 2020, includes other income of $32.8 million.(a) Same facility results for the periods presented include facilities we haveoperated for more than one year and exclude certain closed services.(b) Average length of stay is defined as patient days divided by admissions.(c) For the three months and year ended December 31, 2020, includes otherincome of $32.8 million. Acadia Healthcare Company, Inc.

Reconciliation of Net (Loss) Income Attributable to Acadia Healthcare Company,Inc. to Adjusted EBITDA

(Unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

(in thousands)

Net (loss) incomeattributable to $ (783,672 ) $ (11,254 ) $ (672,132 ) $ 108,923 Acadia HealthcareCompany, Inc.Net incomeattributable to 1,131 941 2,933 1,199 noncontrollinginterestsLoss (income) fromdiscontinued 828,697 (1,879 ) 812,390 (56,812 )operations, net oftaxesProvision for income 29,929 9,993 40,606 25,085 taxesInterest expense, 39,707 44,641 158,105 187,325 netDepreciation and 24,958 22,667 95,256 87,923 amortizationContinuing 140,750 65,109 437,158 353,643 operations EBITDA Adjustments:Equity-based 6,246 2,985 22,504 17,307 compensation expense(a)Transaction-related 2,162 9,035 11,720 21,157 expenses (b)Debt extinguishment 3,962 - 7,233 - costs (c)Loss on impairment 4,751 27,217 4,751 27,217 (d)Continuing $ 157,871 $ 104,346 $ 483,366 $ 419,324 operations adjustedEBITDA Continuing 29.2 % 20.8 % 23.1 % 20.9 %operations adjustedEBITDA margin Discontinued $ 49,596 $ 40,010 $ 160,776 $ 166,559 operations adjustedEBITDA Discontinued 16.4 % 14.3 % 14.4 % 15.2 %operations adjustedEBITDA margin Combined adjusted $ 207,467 $ 144,356 $ 644,142 $ 585,883 EBITDA Combined adjusted 24.6 % 18.5 % 20.1 % 18.9 %EBITDA margin See footnotes onpage 13.Acadia Healthcare Company, Inc.Reconciliation of Adjusted Income Attributable to Acadia Healthcare Company, Inc. toNet (Loss) Income Attributable to Acadia Healthcare Company, Inc.(Unaudited)Three Months Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(in thousands, except per share amounts)

Net (loss) income attributable to Acadia Healthcare Company, Inc.$

(783,672

)

$

(11,254

)

$

(672,132

)

$

108,923

Loss (income) from discontinued operations, net of taxes828,697

(1,879

)

812,390

(56,812

)

Adjustments to income:Transaction-related expenses (b)2,162

9,035

11,720

21,157

Debt extinguishment costs (c)3,962

-

7,233

-

Loss on impairment (d)4,751

27,217

4,751

27,217

Provision for income taxes29,929

9,993

40,606

25,085

Adjusted income from continuing operations before income taxesattributable to Acadia Healthcare Company, Inc.85,829

33,112

204,568

125,570

Adjusted income from discontinued operations before income taxes31,483

21,841

86,258

90,669

Adjusted income before income taxes attributable toAcadia Healthcare Company, Inc.117,312

54,953

290,826

216,239

Income tax effect of adjustments to income (e)16,124

9,925

44,496

37,110

Adjusted income attributable to Acadia Healthcare Company, Inc.$

101,188

$

45,028

$

246,330

$

179,129

Weighted-average shares outstanding - diluted (f)89,233

87,963

88,595

87,816

Adjusted income attributable to Acadia Healthcare Company, Inc.per diluted share$

1.13

$

0.51

$

2.78

$

2.04

See footnotes on page 13. Acadia Healthcare Company, Inc.Reconciliation of Adjusted Income Attributable to Acadia Healthcare Company,Inc. toNet (Loss) Income Attributable to Acadia Healthcare Company, Inc.(Unaudited) Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

(in thousands, except per share amounts)

Net (loss) incomeattributable to $ (783,672 ) $ (11,254 ) $ (672,132 ) $ 108,923 Acadia HealthcareCompany, Inc.Loss (income) fromdiscontinued 828,697 (1,879 ) 812,390 (56,812 )operations, net oftaxes Adjustments toincome:Transaction-related 2,162 9,035 11,720 21,157 expenses (b)Debt extinguishment 3,962 - 7,233 - costs (c)Loss on impairment 4,751 27,217 4,751 27,217 (d)Provision for income 29,929 9,993 40,606 25,085 taxesAdjusted income fromcontinuing operations beforeincome taxesattributable to 85,829 33,112 204,568 125,570 Acadia HealthcareCompany, Inc.Adjusted income fromdiscontinued 31,483 21,841 86,258 90,669 operations beforeincome taxesAdjusted incomebefore income taxes attributable toAcadia Healthcare 117,312 54,953 290,826 216,239 Company, Inc.Income tax effect of 16,124 9,925 44,496 37,110 adjustments toincome (e)Adjusted incomeattributable to $ 101,188 $ 45,028 $ 246,330 $ 179,129 Acadia HealthcareCompany, Inc. Weighted-average 89,233 87,963 88,595 87,816 shares outstanding -diluted (f) Adjusted incomeattributable to Acadia HealthcareCompany, Inc.per diluted share $ 1.13 $ 0.51 $ 2.78 $ 2.04

See footnotes onpage 13. Acadia Healthcare Company, Inc.Discontinued Operations Supplemental Financial Information(Unaudited) Statements of Discontinued Operations

Three Months Ended December Year Ended December 31, 31,

2020 2019 2020 2019

(in thousands)

Revenue $ 301,996 $ 279,007 $ 1,119,768 $ 1,099,081

Salaries, wages and 166,620 155,375 632,134 609,823 benefitsProfessional fees 35,027 33,333 127,291 122,532

Supplies 10,011 9,632 38,285 37,527

Rents and leases 12,890 12,592 47,748 46,743

Other operating 27,852 28,065 113,534 115,897 expensesDepreciation and 19,196 19,100 74,935 76,121 amortizationInterest expense, (1,083 ) (931 ) (417 ) (231 )netLoss on sale 867,324 - 867,324 -

Loss on impairment - 27,169 20,239 27,169

Transaction-related 984 2,721 8,719 5,907 expensesTotal expenses 1,138,821 287,056 1,929,792 1,041,488

(Loss) income fromdiscontinued (836,825 ) (8,049 ) (810,024 ) 57,593 operations beforeincome taxes(Benefit from) (8,128 ) (9,928 ) 2,366 781 provision forincome taxes(Loss) income from (828,697 ) 1,879 (812,390 ) 56,812 discontinuedoperations Reconciliation of Net (Loss) Income from Discontinued Operations toDiscontinued Operations Adjusted EBITDA

Loss (income) fromdiscontinued $ (828,697 ) $ 1,879 $ (812,390 ) $ 56,812 operations, net oftaxesProvision for (8,128 ) (9,928 ) 2,366 781 income taxesInterest expense, (1,083 ) (931 ) (417 ) (231 )netDepreciation and 19,196 19,100 74,935 76,121 amortizationDiscontinued (818,712 ) 10,120 (735,506 ) 133,483 operations EBITDA Adjustments:Transaction-related 984 2,721 8,719 5,907 expenses (b)Loss on impairment - 27,169 20,239 27,169 (d)Loss on sale (g) 867,324 - 867,324 -

Discontinued $ 49,596 $ 40,010 $ 160,776 $ 166,559 operations adjustedEBITDA Discontinued 16.4 % 14.3 % 14.4 % 15.2 %operations adjustedEBITDA margin Reconciliation of Net (Loss) Income from Discontinued Operations to AdjustedIncome from Discontinued Operations

Loss (income) fromdiscontinued $ (828,697 ) $ 1,879 $ (812,390 ) $ 56,812 operations, net oftaxes Adjustments toincome:Transaction-related 984 2,721 8,719 5,907 expenses (b)Loss on impairment - 27,169 20,239 27,169 (d)Loss on sale (g) 867,324 - 867,324 -

(Benefit from) (8,128 ) (9,928 ) 2,366 781 provision forincome taxesAdjusted incomefrom discontinued $ 31,483 $ 21,841 $ 86,258 $ 90,669 operations beforeincome taxes Acadia Healthcare Company, Inc.Discontinued Operations Operating Statistics(Unaudited, Revenue in thousands)

Three Months Ended December 31, Year Ended December 31,

2020 2019 % 2020 2019 % Change Change

U.K. SameFacilityResults(a,c)Revenue $ 279,301 $ 260,772 7.1 % $ 1,027,157 $ 1,006,333 2.1 %

Patient 507,055 497,279 2.0 % 1,982,396 2,000,755 -0.9 %DaysAdmissions 2,176 2,265 -3.9 % 8,696 9,346 -7.0 %

Average 233.0 219.5 6.1 % 228.0 214.1 6.5 %Length ofStay (b)Revenueper $ 551 $ 524 5.0 % $ 518 $ 503 3.0 %PatientDayAdjusted 18.2 % 16.1 % 210 16.3 % 16.7 % -40EBITDA bps bpsmargin U.K.FacilityResults(c)Revenue $ 301,996 $ 286,134 5.5 % $ 1,119,768 $ 1,104,599 1.4 %

Patient 638,444 664,709 -4.0 % 2,578,284 2,673,715 -3.6 %DaysAdmissions 2,378 2,626 -9.4 % 9,872 10,786 -8.5 %

Average 268.5 253.1 6.1 % 261.2 247.9 5.4 %Length ofStay (b)Revenueper $ 473 $ 430 9.9 % $ 434 $ 413 5.1 %PatientDayAdjusted 16.4 % 14.4 % 200 14.4 % 15.2 % -80EBITDA bps bpsmargin(a) Same facility results for the periods presented include facilities we have operated for more than one year and exclude the elderly care division.(b) Average length of stay is defined as patient days divided by admissions.(c) Revenue and revenue per patient day for the three months and year ended December 31, 2019 is adjusted to reflect the foreign currency exchange rate for the comparable periods of 2020 in order to eliminate the effect of changes in the exchange rate. The exchange rate used in the adjusted revenue and revenue per patient day amounts for the three months and year ended December 31, 2019 is 1.32 and 1.28, respectively.(a) Same facility results for the periods presented include facilities we haveoperated for more than one year and exclude the elderly care division.(b) Average length of stay is defined as patient days divided by admissions.(c) Revenue and revenue per patient day for the three months and year endedDecember 31, 2019 is adjusted to reflect the foreign currency exchange rate forthe comparable periods of 2020 in order to eliminate the effect of changes inthe exchange rate. The exchange rate used in the adjusted revenue and revenueper patient day amounts for the three months and year ended December 31, 2019is 1.32 and 1.28, respectively. Acadia Healthcare Company, Inc.Footnotes We have included certain financial measures in this press release, includingContinuing Operations EBITDA, Continuing Operations Adjusted EBITDA, ContinuingOperations Adjusted EBITDA margin, Continuing Operations Adjusted income beforeincome taxes, Discontinued Operations EBITDA, Discontinued Operations AdjustedEBITDA, Discontinued Operations Adjusted EBITDA margin, Adjusted income fromdiscontinued operations before income taxes and Adjusted income, which are"non-GAAP financial measures" as defined under the rules and regulationspromulgated by the SEC. We define Continuing Operations EBITDA as net (loss) income adjusted for netincome attributable to noncontrolling interests, loss (income) fromdiscontinued operations, net of taxes, provision for income taxes, net interestexpense and depreciation and amortization. We define Continuing OperationsAdjusted EBITDA as Continuing Operations EBITDA adjusted for equity-basedcompensation expense, transaction-related expenses, debt extinguishment costsand loss on impairment. We define Continuing Operations Adjusted EBITDA marginas Continuing Operations Adjusted EBITDA divided by revenue. We defineContinuing Operations Adjusted income before income taxes as net (loss) incomeadjusted for net income attributable to noncontrolling interests, loss (income)from discontinued operations, net of taxes, transaction-related expenses, debtextinguishment costs, loss on impairment and provision for income taxes. We define Discontinued Operations EBITDA as loss (income) from discontinuedoperations, net of taxes, provision for income taxes, net interest expense anddepreciation and amortization. We define Discontinued Operations AdjustedEBITDA as Discontinued Operations EBITDA adjusted for transaction-relatedexpenses, loss on impairment and loss on sale. We define DiscontinuedOperations Adjusted EBITDA margin as Discontinued Operations Adjusted EBITDAdivided by revenue from discontinued operations. We define Adjusted income fromdiscontinued operations before income taxes as loss (income) from discontinuedoperations, net of taxes, adjusted for transaction-related expenses, loss onimpairment, loss on sale and (benefit from) provision for income taxes. We define Combined Adjusted EBITDA as the sum of Continuing Operations AdjustedEBITDA and Discontinued Operations Adjusted EBITDA. We define Adjusted incomeattributable to Acadia Healthcare Company, Inc. as the sum of Adjusted incomefrom continuing operations before income taxes attributable to AcadiaHealthcare Company, Inc., Adjusted income from discontinued operations beforeincome taxes and income tax effect of adjustments to income. The non-GAAP financial measures presented herein are supplemental measures ofour performance and are not required by, or presented in accordance with,generally accepted accounting principles in the United States ("GAAP"). Thenon-GAAP financial measures presented herein are not measures of our financialperformance under GAAP and should not be considered as alternatives to netincome or any other performance measures derived in accordance with GAAP or asan alternative to cash flow from operating activities as measures of ourliquidity. Our measurements of these non-GAAP financial measures may not becomparable to similarly titled measures of other companies. We have includedinformation concerning the non-GAAP financial measures in this press releasebecause we believe that such information is used by certain investors asmeasures of a company's historical performance. We believe these measures arefrequently used by securities analysts, investors and other interested partiesin the evaluation of issuers of equity securities, many of which presentsimilar non-GAAP financial measures when reporting their results. BecauseAdjusted EBITDA is not a measurement determined in accordance with GAAP and isthus susceptible to varying calculations, Adjusted EBITDA, as presented, maynot be comparable to other similarly titled measures of other companies. Ourpresentation of these non-GAAP financial measures should not be construed as aninference that our future results will be unaffected by unusual or nonrecurringitems. (a) Represents the equity-based compensation expense of Acadia. (b) Represents transaction-related expenses incurred by Acadia primarilyrelated to termination, restructuring, strategic review, management transitionand other similar costs. (c) Represents debt extinguishment costs recorded in connection with theredemption of the 6.125% Senior Notes and 5.125% Senior Notes in June 2020,issuance of the 5.000% Senior Notes in October 2020 and the Fourth RepricingFacilities Amendment to the Amended and Restated Credit Facility in November2020. (d) Represents non-cash long-lived asset impairment charges related to certainfacility closures. (e) Represents the income tax effect of adjustments to income based on taxrates of 13.7% and 18.1% for the three months ended December 31, 2020 and 2019,respectively, and 15.3% and 17.2% for the year ended December 31, 2020 and2019, respectively. (f) For the three months ended December 31, 2019, approximately 0.3 million ofthe outstanding restricted stock and shares of common stock issuable uponexercise of outstanding stock option awards have been included in thecalculation of weighted-average shares outstanding-diluted. These shares areexcluded from the calculation of diluted earnings per share in the condensedconsolidated statement of operations because the net loss for the three monthsended December 31, 2019 causes such securities to be anti-dilutive. (g) Represents the loss on sale, including a non-cash goodwill impairmentcharge of $356.2 million, recorded in connection with the U.K. sale. View source version on businesswire.com: https://www.businesswire.com/news/home/20210225006226/en/

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