Q4 2016 Real-Time Call Brief

Highlights

We did successfully complete the divestiture of the 22 facilities that was required obtain regulatory approval from the the CMA.

As a result of this divesture on November 30, we were only then able to begin our work to fully integrate priority into Acadia and to capture approximately $20 million in anticipated cost synergy.

The Priory acquisition was a primary driver of the 42% growth in our fourth quarter revenues.

Even with this divestiture Priory bought nearly 6,200 beds to Acadia in a year in which we expanded our total beds by more 7,100 or 72% from the end of 2015.

This increase included in the 967 beds we added to existing facilities and to the de novo facilities in 2016 compared with 670 beds added in 2015.

The new beds that we added to existing facilities in our same facility base contributed to a 6.3% increase in same facility revenue for the fourth quarter, which drove a 30 basis points increase in same facility EBITDA margin.

We plan to add over 800 new beds during 2017.

We are very well positioned to fund our new bed development and acquisition activity with $57 million in cash at year-end and full availability under our $500 million revolving credit facility.

We further expect substantial ongoing cash flow from continuing operations, which totaled over $370 million for 2016.

We currently expect to deploy the net proceeds from the Priory divestiture of approximately $370 million into new acquisitions by summer end.

Despite the headwinds encountered in 2016, we entered 2017 in a compelling position as the leader in nearly $50 billion market.

Acadia's revenue for the fourth quarter of 2016 increased 41.9% to $702.9 million from $495.3 million for the fourth quarter of 2015.

Adjusted income from continuing operations attributable to Acadia increased 21.4% to $51.3 million for the fourth quarter of of 2016 and was $0.59 per diluted share for both of fourth quarter of 2016 and 2015 on a 22.1% increase in weighted average diluted shares outstanding.

Adjusted diluted EPS for the latest quarter excludes debt extinguishment cost of $842,000, a loss on divestiture of $4.1 million and transaction-related expenses are $14.8 million.

For the fourth quarter 2015, adjusted diluted EPS excludes debt extinguishment cost of $839,000 in transaction related expenses of $5.2 million.

On a constant currency basis, Acadia's revenue for the fourth quarter of 2016 increased 54.2%, compared with the fourth quarter of 2015.

Adjusted income from continuing operations attributable to Acadia stockholders increased 42.3%, while also increasing 16.9% on a per diluted share basis.

Acadia's tax rate on adjusted income from continuing operations, before income taxes was 18% for the fourth quarter of 2016, compared with 28.5% for the fourth quarter of the prior year.

Acadia's same facility revenue increased 6.3% from the fourth quarter of 2015, with 6.1% increase in patient days and a 0.1% increase in revenue per patient day.

Same facility EBITDA margin was 26.3%, up from 26.0% for the fourth quarter of 2015.

Comparable quarter consolidated adjusted EBITDA grew 33.7% to $149.5 million, which was 21.3% of consolidated revenue.

Acadia's operating cash flow from continuing operations increased 8.1% for the fourth quarter to $106.6 million and for the full year increased 53.5% to $371.7 million.

Our 2017 financial guidance includes the following: Revenue in a range of $2.85 billion to $2.9 million Adjusted EBITDA in a range of $625 million to $640 million.

$40 million and adjusted diluted EPS in a range of $2.40 to $2.50.

In addition, our guidance for adjusted diluted EPS for the first quarter of 2017 is in a range of $0.45 to $0.47.

As compared to the fourth quarter of 2016 the first quarter reflects two additional months without the facilities divested in the UK higher payroll taxes in the US and two fewer calendar days in the quarter.

This guidance assumes an exchange rate of $1.25 per British pound sterling and a tax rate of approximately 25%.