EX-99.2 4 g96587exv99w2.txt EX-99.2 UNAUDITED FINANCIAL INFORMATION Exhibit 99.2 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION The following tables set forth the unaudited pro forma condensed combined financial data for Psychiatric Solutions, Inc., giving effect to the acquisitions of Ardent Health Services, Inc. ("Ardent Behavioral"), Heartland Healthcare ("Heartland"), Brentwood Behavioral Health ("Brentwood") and other non-significant acquisitions during the fiscal year ended December 31, 2004 and the Financing Transactions (as defined below) as if they had occurred on the dates indicated and after giving effect to certain pro forma adjustments discussed herein. The unaudited pro forma condensed balance sheet as of March 31, 2005 has been derived from Psychiatric Solutions' and Ardent Behavioral's historical balance sheets, adjusted to give effect to these acquisitions and the Financing Transactions as if they occurred on March 31, 2005. The pro forma condensed combined income statement for the twelve months ended March 31, 2005 gives effect to the acquisitions of Ardent Behavioral, Heartland and other non-significant acquisitions during 2004 and the Financing Transactions, as if they occurred at the beginning of the period presented. The pro forma condensed combined income statement for the three months ended March 31, 2005 gives effect to the acquisition of Ardent Behavioral and the Financing Transactions, as if they occurred at the beginning of the period presented. The pro forma condensed combined income statement for the year ended December 31, 2004 gives effect to the acquisitions of Ardent Behavioral, Heartland, Brentwood and other non-significant acquisitions during 2004 and the Financing Transactions, as if they occurred at the beginning of the period presented. For the purposes of this Current Report on Form 8-K/A, Financing Transactions shall refer to our offering of senior subordinated notes, the amendment and restatement of our existing credit facility and our new senior secured term loan. The adjustments necessary to fairly present the unaudited pro forma condensed combined financial data have been made based on available information and 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 are preliminary and revisions to the preliminary purchase price allocations and financing of the transactions may have a significant impact on the pro forma adjustments. A final valuation of net assets acquired associated with the Ardent Behavioral acquisition cannot be made at this time. A final determination of these fair values will be conducted by Psychiatric Solutions' independent valuation specialists. The consideration of this valuation will most likely result in a change in the value assigned to the fixed and intangible assets acquired from Ardent Behavioral. The unaudited pro forma condensed combined financial data is for comparative purposes only and does not purport to represent what our financial position or results of operations would actually have been had the events noted above in fact occurred on the assumed dates or to project our financial position or results of operations for any future date or future period. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF MARCH 31, 2005
PRO FORMA OFFERING PSYCHIATRIC ARDENT ACQUISITION PRO FORMA PRO FORMA PRO FORMA SOLUTIONS BEHAVIORAL ADJUSTMENTS COMBINED ADJUSTMENTS PSI ----------- ---------- ----------- --------- ----------- ---------- (DOLLARS IN THOUSANDS) ASSETS Current assets: Cash and cash equivalents.... $ 14,500 $ 2,354 $(500,000)(1) $(483,146) $489,000(1) $ 5,854 Accounts receivable, net..... 80,996 41,614 7,494(2) 130,104 130,104 Other current assets......... 16,700 19,174 -- 35,874 35,874 -------- -------- --------- --------- -------- ---------- Total current assets....... 112,196 63,142 (492,506) (317,168) 489,000 171,832 Property and equipment, net.... 220,762 83,465 65,910(3) 370,137 370,137 Costs in excess of net assets acquired..................... 130,134 11,210 380,292(4) 521,636 11,000(1) 532,636 Other assets................... 21,377 84,656 (84,416)(5) 21,617 9,000(1) 30,617 -------- -------- --------- --------- -------- ---------- Total assets................... $484,469 $242,473 $(130,720) $ 596,222 $509,000 $1,105,222 ======== ======== ========= ========= ======== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable............. $ 12,355 $ 7,727 $ -- $ 20,082 $ -- $ 20,082 Accrued liabilities.......... 55,579 19,462 -- 75,041 -- 75,041 Current portion of long-term debt....................... 478 -- -- 478 3,250(1) 3,728 -------- -------- --------- --------- -------- ---------- Total current liabilities.............. 68,412 27,189 -- 95,601 3,250 98,851 Long-term debt, less current portion...................... 153,483 -- -- 153,483 507,250(1) 660,733 Other liabilities.............. 13,991 17,155 7,409(6) 38,555 -- 38,555 -------- -------- --------- --------- -------- ---------- Total liabilities.............. 235,886 44,344 7,409 287,639 510,500 798,139 Stockholders' equity: Common stock................. 205 -- 14(7) 219 -- 219 Additional paid-in capital... 228,784 -- 59,986(7) 288,770 -- 288,770 Accumulated earnings......... 19,594 198,129 (198,129)(2) 19,594 (1,500)(8) 18,094 -------- -------- --------- --------- -------- ---------- Total stockholders' equity................... 248,583 198,129 (138,129) 308,583 (1,500) 307,083 -------- -------- --------- --------- -------- ---------- Total liabilities and stockholders' equity......... $484,469 $242,473 $(130,720) $ 596,222 $509,000 $1,105,222 ======== ======== ========= ========= ======== ==========
See Notes to Unaudited Pro Forma Condensed Combined Balance Sheet. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET (DOLLARS IN THOUSANDS) (1) Represents the sources and uses of funds from the Financing Transactions: Senior Subordinated Notes................................... $150,000 Senior secured term debt.................................... 325,000 Additional borrowings on amended and restated revolving credit facility........................................... 35,500 -------- Increase in debt............................................ 510,500 Excess cash on balance sheet at March 31, 2005.............. 9,500 Estimate of capitalized finance costs....................... (9,000) Estimate of purchase transaction costs...................... (11,000) -------- Cash paid to Ardent Behavioral and Ardent Health Services LLC....................................................... 500,000 Less excess cash on balance sheet at March 31, 2005......... (9,500) Non-recurring bridge loan commitment fee.................... (1,500) -------- Net increase to cash and cash equivalents................... $489,000 ========
(2) Represents the elimination of Medicare liabilities not assumed in the acquisition of $7,494 included in accounts receivable and Ardent Behavioral's accumulated earnings of $198,129. (3) Represents the adjustment to the value of the property and equipment of Ardent Behavioral to reflect their appraised value. (4) Represents adjustment to cost in excess of net assets acquired as follows: Cash paid to Ardent Behavioral and Ardent Health Services LLC....................................................... $ 500,000 Value of equity consideration issued to Ardent Health Services LLC.............................................. 60,000 Less: net assets acquired(a)................................ (168,498) --------- Cost in excess of net assets acquired....................... 391,502 Ardent Behavioral's historical cost in excess of net assets acquired.................................................. (11,210) --------- Pro forma adjustment to cost in excess of net assets acquired.................................................. $ 380,292 =========
--------------- (a) Net assets of Ardent Behavioral..................... $ 198,129 Cost in excess of net assets acquired of Ardent Behavioral........................................ (11,210) Pro forma acquisition adjustments to: Accounts receivable, net....................... 7,494 Property and equipment, net.................... 65,910 Other assets................................... (84,416) Other liabilities.............................. (7,409) --------- Net assets acquired................................ $ 168,498 =========
(5) Represents elimination of Ardent's Behavioral intercompany receivables of $78,129 and reclassification of deferred tax assets to deferred tax liabilities of $6,287. (6) Represents an adjustment to long-term deferred tax liabilities related to the step-up in basis of the property and equipment of Ardent Behavioral and the reclassification of deferred tax assets of Ardent Behavioral and an adjustment to long-term deferred tax assets related to net operating losses acquired. Step up basis on property and equipment of Ardent facilities................................................ $ 26,364 Net operating losses obtained in acquisition of Ardent Behavioral................................................ (12,668) Reclassification of deferred tax assets of Ardent Behavioral................................................ (6,287) --------- $ 7,409 =========
(7) Represents the adjustment to common stock and additional paid in capital related to the issuance of 1,413,649 shares of our common stock, $.01 par value, at a price of $42.4434. The share price was calculated based upon a volume-weighted average (rounded to four decimal places) of the daily sale price for the shares of our common stock for 20 consecutive trading days ending two days prior to March 31, 2005. This calculation assumes the fair value of the shares to be issued in the acquisition are valued at $60.0 million. The actual valuation of the shares issued will be based upon the market value of our common stock for a reasonable period of time before and after the number of shares to be issued in the transaction becomes fixed. (8) Represents non-recurring loan commitment fee on bridge loan related to the Financing Transactions. UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT FOR THE TWELVE MONTHS ENDED MARCH 31, 2005
OFFERING PSYCHIATRIC PRO FORMA PRO FORMA PRO FORMA PRO FORMA SOLUTIONS ACQUISITIONS(1) COMBINED ADJUSTMENTS PSI ----------- --------------- --------- ----------- --------- (DOLLARS IN THOUSANDS) Revenue........................ $522,490 $317,242 $839,732 $ -- $839,732 Expenses: Salaries, wages and employee benefits.................. 286,338 179,181 465,519 -- 465,519 Professional fees............ 55,823 37,990 93,813 -- 93,813 Rentals and leases........... 9,592 3,604 13,196 -- 13,196 Other operating expenses..... 90,803 41,718 132,521 -- 132,521 Provision for doubtful accounts.................. 11,515 8,466 19,981 -- 19,981 Depreciation and amortization.............. 10,663 4,928 15,591 -- 15,591 Interest expense............. 18,031 532 18,563 33,868(1)(i) 52,431 Other expenses............... 6,990 -- 6,990 -- 6,990 -------- -------- -------- -------- -------- Total expenses............ 489,755 276,419 766,174 33,868 800,042 -------- -------- -------- -------- -------- Income from continuing operations before income taxes........................ 32,735 40,823 73,558 (33,868) 39,690 Provision for (benefit from) income taxes................. 12,494 15,513 28,007 (12,925)(1)(h) 15,082 -------- -------- -------- -------- -------- Income from continuing operations................... $ 20,241 $ 25,310 $ 45,551 $(20,943) $ 24,608 ======== ======== ======== ======== ========
See Notes to Unaudited Pro Forma Consolidated Combined Income Statements. UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT FOR THE THREE MONTHS ENDED MARCH 31, 2005
OFFERING PSYCHIATRIC ARDENT PRO FORMA PRO FORMA PRO FORMA PRO FORMA SOLUTIONS BEHAVIORAL ADJUSTMENTS COMBINED ADJUSTMENTS PSI ----------- ---------- ----------- --------- ----------- --------- (DOLLARS IN THOUSANDS) Revenue...................... $138,730 $79,908 $ -- $218,638 $ -- $218,638 Expenses Salaries, wages and employee benefits........ 76,367 44,447 140 (1)(a) 120,954 -- 120,954 Professional fees.......... 14,256 7,717 356 (1)(b) 22,329 -- 22,329 Rentals and leases......... 2,340 775 31 (1)(c) 3,146 -- 3,146 Other operating expenses... 24,229 9,806 82 (1)(d) 34,117 -- 34,117 Provision for doubtful accounts................. 2,668 2,553 -- 5,221 -- 5,221 Depreciation and amortization............. 2,902 1,199 (88)(1)(e) 4,013 -- 4,013 Interest expense (income)................. 3,523 (932) 932 (1)(f) 3,523 8,677 (1)(i) 12,200 Other expenses............. 6,990 3,192 (3,192)(1)(g) 6,990 -- 6,990 -------- ------- ------- -------- ------- -------- Total expenses........... 133,275 68,757 (1,739) 200,293 8,677 208,970 -------- ------- ------- -------- ------- -------- Income from continuing operations before income taxes...................... 5,455 11,151 1,739 18,345 (8,677) 9,668 Provision for (benefit from) income taxes............... 2,127 4,194 833 (1)(h) 7,154 (3,383)(1)(h) 3,771 -------- ------- ------- -------- ------- -------- Income from continuing operations................. $ 3,328 $ 6,957 $ 906 $ 11,191 $(5,294) $ 5,897 ======== ======= ======= ======== ======= ======== Basic pro forma earnings per share.................. $ 0.27 ======== Diluted pro forma earnings per share.................. $ 0.26 ======== Shares used in computing per share amounts(j): Basic...................... 21,845 Diluted.................... 22,536
See Notes to Unaudited Pro Forma Condensed Combined Income Statements. UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2004
OFFERING PSYCHIATRIC PRO FORMA PRO FORMA PRO FORMA PRO FORMA SOLUTIONS ACQUISITIONS(1) COMBINED ADJUSTMENTS PSI ----------- --------------- --------- ----------- --------- (DOLLARS IN THOUSANDS) Revenue......................... $487,190 $339,906 $827,096 $ -- $827,096 Expenses: Salaries, wages and employee benefits................... 265,678 190,472 456,150 456,150 Professional fees............. 53,258 41,744 95,002 -- 95,002 Rentals and leases............ 9,019 4,347 13,366 -- 13,366 Other operating expenses...... 85,670 45,505 131,175 -- 131,175 Provision for doubtful accounts................... 10,874 9,340 20,214 -- 20,214 Depreciation and amortization............... 9,868 5,477 15,345 -- 15,345 Interest expense.............. 18,964 1,148 20,112 34,217 (1)(i) 54,329 Other expenses................ 6,407 -- 6,407 -- 6,407 -------- -------- -------- -------- -------- Total expenses............. 459,738 298,033 757,771 34,217 791,988 -------- -------- -------- -------- -------- Income from continuing operations before income taxes......................... 27,452 41,873 69,325 (34,217) 35,108 Provision for (benefit from) income taxes.................. 10,432 15,912 26,344 (13,003)(1)(h) 13,341 -------- -------- -------- -------- -------- Income from continuing operations.................... $ 17,020 $ 25,961 $ 42,981 $(21,214) $ 21,767 ======== ======== ======== ======== ======== Basic pro forma earnings per share.................. $ 1.37 ======== Diluted pro forma earnings per share.................. $ 1.29 ======== Shares used in computing per share amounts(j): Basic...................... 15,933 Diluted.................... 16,936
See Notes to Unaudited Pro Forma Condensed Combined Income Statements. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS (DOLLARS IN THOUSANDS) (1) The following pro forma condensed combined income statement for the twelve months ended March 31, 2005 presents the incremental pro forma operations of Ardent Behavioral, Heartland and three non-significant acquisitions applying the purchase method of accounting as if the acquisitions, which were completed on July 1, 2005, June 1, 2004 and various dates during the second quarter of 2004, respectively, had all occurred on April 1, 2004.
NON- ACQUISITION ARDENT SIGNIFICANT ACQUISITIONS PRO FORMA PRO FORMA BEHAVIORAL HEARTLAND ACQUISITIONS COMBINED ADJUSTMENTS ACQUISITIONS ---------- --------- ------------ ------------ ----------- ------------ Revenue.............................. $301,056 $9,135 $7,051 $317,242 $ -- $317,242 Expenses: Salaries, wages and employee benefits......................... 171,079 4,012 4,205 179,296 (115)(a) 179,181 Professional fees.................. 32,391 2,881 618 35,890 2,100 (b) 37,990 Rentals and leases................. 3,458 323 214 3,995 (391)(c) 3,604 Other operating expenses........... 38,845 1,351 1,194 41,390 328 (d) 41,718 Provision for doubtful accounts.... 7,718 690 58 8,466 -- 8,466 Depreciation and amortization...... 4,244 42 94 4,380 548 (e) 4,928 Interest expense................... 173 57 49 279 253 (f) 532 Other expenses..................... 15,416 311 235 15,962 (15,962)(g) -- -------- ------ ------ -------- -------- -------- Total expenses................... 273,324 9,667 6,667 289,658 (13,239) 276,419 -------- ------ ------ -------- -------- -------- Income from continuing operations before income taxes................ 27,732 (532) 384 27,584 13,239 40,823 Provision for income taxes........... 10,396 -- -- 10,396 5,117 (h) 15,513 -------- ------ ------ -------- -------- -------- Income from continuing operations.... $ 17,336 $ (532) $ 384 $ 17,188 $ 8,122 $ 25,310 ======== ====== ====== ======== ======== ========
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS -- (CONTINUED) The following pro forma condensed combined income statement for the year ended December 31, 2004 presents the incremental pro forma operations of Ardent Behavioral, Heartland, Brentwood and three non-significant acquisitions applying the purchase method of accounting as if the acquisitions, which were completed on July 1, 2005, June 1, 2004, March 1, 2004, and various dates during the second quarter of 2004, respectively, had all occurred on January 1, 2004.
NON- ACQUISITION ARDENT SIGNIFICANT ACQUISITIONS PRO FORMA PRO FORMA BEHAVIORAL HEARTLAND BRENTWOOD ACQUISITIONS COMBINED ADJUSTMENTS ACQUISITIONS ---------- --------- --------- ------------ ------------ ----------- ------------ Revenue......................... $294,282 $22,482 $5,612 $17,530 $339,906 $ -- $339,906 Expenses: Salaries, wages and employee benefits.................... 167,926 9,689 2,977 10,012 190,604 (132)(a) 190,472 Professional fees............. 32,744 4,841 653 1,389 39,627 2,117 (b) 41,744 Rentals and leases............ 3,564 788 37 559 4,948 (601)(c) 4,347 Other operating expenses...... 38,298 3,177 772 2,930 45,177 328 (d) 45,505 Provision for doubtful accounts.................... 7,245 1,500 370 225 9,340 -- 9,340 Depreciation and amortization................ 3,664 104 30 272 4,070 1,407 (e) 5,477 Interest expense.............. 2,854 127 2 136 3,119 (1,971)(f) 1,148 Other expenses................ 16,483 377 319 472 17,651 (17,651)(g) -- -------- ------- ------ ------- -------- -------- -------- Total expenses.............. 272,778 20,603 5,160 15,995 314,536 (16,503) 298,033 -------- ------- ------ ------- -------- -------- -------- Income from continuing operations before income taxes......................... 21,504 1,879 452 1,535 25,370 16,503 41,873 Provision for income taxes...... 8,159 -- -- -- 8,159 7,753 (h) 15,912 -------- ------- ------ ------- -------- -------- -------- Income from continuing operations.................... $ 13,345 $ 1,879 $ 452 $ 1,535 $ 17,211 $ 8,750 $ 25,961 ======== ======= ====== ======= ======== ======== ========
(a) Reflects adjustments to salaries, wages and employee benefits to include corporate level employees necessary to manage the facilities acquired from Ardent Behavioral and the reclassification of contract labor from salaries, wages and employee benefits to professional fees for Ardent Behavioral to conform to our presentation.
THREE TWELVE MONTHS ENDED MONTHS ------------------------ ENDED DECEMBER 31, MARCH 31, MARCH 31, 2004 2005 2005 ------------ --------- --------- Salaries, wages and employee benefits of corporate level employees to manage facilities acquired from Ardent Behavioral................................. $ 1,835 $ 1,835 $ 459 Reclassification of contract labor to professional fees to conform to our presentation............... (1,967) (1,950) (319) ------- ------- ------- $ (132) $ (115) $ 140 ======= ======= =======
(b) Reflects adjustment to professional fees to include additional costs at the corporate level for the acquisition of Ardent Behavioral and the reclassification of contract labor from salaries, wages and employee benefits to professional fees for Ardent Behavioral to conform to our presentation. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS -- (CONTINUED)
THREE TWELVE MONTHS ENDED MONTHS ------------------------ ENDED DECEMBER 31, MARCH 31, MARCH 31, 2004 2005 2005 ------------ --------- --------- Professional fees at corporate level to support facilities acquired from Ardent Behavioral........ $ 150 $ 150 $ 37 Reclassification from salaries, wages and employee benefits to conform to our presentation........... 1,967 1,950 319 ------- ------- ------- $ 2,117 $ 2,100 $ 356 ======= ======= =======
(c) Reflects adjustments to rentals and leases for real estate purchased subsequent to the acquisition of formerly leased facilities and adjustments to rentals and leases for additional office space at the corporate level necessary to accommodate employees hired as the result of the Ardent Behavioral acquisition.
THREE TWELVE MONTHS ENDED MONTHS ------------------------ ENDED DECEMBER 31, MARCH 31, MARCH 31, 2004 2005 2005 ------------ --------- --------- Lease expense on properties purchased related to acquisition of facilities......................... $(725) $(515) $ -- Lease expense on additional corporate office space required for additional corporate level employees to manage facilities acquired from Ardent Behavioral........................................ 124 124 31 ----- ----- ----- $(601) $(391) $ 31 ===== ===== =====
(d) Reflects adjustments to other operating expenses at the corporate level, primarily for travel and related expenses, to be incurred by employees hired as the result of the Ardent Behavioral acquisition. (e) Reflects adjustments to depreciation expense for purchase accounting step-ups of property and equipment acquired and for real estate purchased subsequent to the acquisition of formerly leased facilities. Buildings are depreciated over 35 years and equipment over 5 years.
THREE TWELVE MONTHS ENDED MONTHS ------------------------ ENDED DECEMBER 31, MARCH 31, MARCH 31, 2004 2005 2005 ------------ --------- --------- Additional (reduction in) depreciation on acquired facilities for purchase accounting basis step-up........................................... $ 932 $213 $(88) Depreciation on properties purchased related to acquisition of facilities......................... 475 335 -- ------ ---- ---- $1,407 $548 $(88) ====== ==== ====
(f) Reflects adjustments to include interest expense from the beginning of the period to the acquisition date and adjustments to eliminate interest expense (income) for Ardent Behavioral. A 1/8% change in our interest rate assumptions would increase or decrease our interest expense $638,000 for the NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS -- (CONTINUED) twelve months ended March 31, 2005 and the year ended December 31, 2004 and $160,000 for the three months ended March 31, 2005.
THREE TWELVE MONTHS ENDED MONTHS ------------------------ ENDED DECEMBER 31, MARCH 31, MARCH 31, 2004 2005 2005 ------------ --------- --------- Interest expense.................................... $ 883 $ 426 $ -- Less Ardent Behavioral Historical interest expense (income).......................................... (2,854) (173) 932 ------- ----- ---- $(1,971) $ 253 $932 ======= ===== ====
(g) Reflects adjustments to eliminate management fees and other related party amounts paid or payable to the sellers prior to acquisition. Incremental expenses we expect to incur on an on-going basis for additional personnel, office space, etc. to manage these facilities are reflected as acquisition pro-forma adjustments in the appropriate income statement line item. (h) Reflects adjustment to bring combined pro forma provision for income taxes to 38%, 39% and 38% of income from continuing operations before income taxes for the twelve months ended March 31, 2005, the three months ended March 31, 2005 and the year ended December 31, 2004, respectively.
THREE TWELVE MONTHS ENDED MONTHS ------------------------ ENDED DECEMBER 31, MARCH 31, MARCH 31, 2004 2005 2005 ------------ --------- --------- Pro forma acquisition income from continuing operations before income taxes.................... $ 41,873 $ 40,823 $18,345 Effective income tax rate........................... 38% 38% 39% -------- -------- ------- Provision for income taxes.......................... 15,912 15,513 7,154 Provision prior to pro-forma adjustment............. 8,159 10,396 6,321 -------- -------- ------- Pro forma acquisition adjustment to provision for income taxes...................................... $ 7,753 $ 5,117 $ 833 ======== ======== ======= Pro forma PSI income from continuing operations before income taxes............................... $ 35,108 39,690 $ 9,668 Effective income tax rates.......................... 38% 38% 39% -------- -------- ------- Pro forma provision for income taxes................ $ 13,341 15,082 3,771 Pro forma combined provision for income taxes....... 26,344 28,007 7,154 -------- -------- ------- Offering pro forma adjustment....................... $(13,003) $(12,925) $(3,383) ======== ======== =======
(i) Reflects adjustment to give effect to interest on the $150,000 senior subordinated notes at 8% and interest on the $325,000 senior secured term facility and $35,500 of additional borrowings under the amended and restated revolving credit facility at the LIBOR rate plus applicable margin. The adjustment also includes amortization on capitalized finance costs and expense anticipated on interest rate swap arrangements. A 1/8% increase (decrease) in our interest rate assumptions would increase (decrease) our interest expense $638,000 for both the twelve months ended March 31, 2005 and the year ended December 31, 2004 and $160,000 for the three months ended March 31, 2005. (j) Reflects adjustment to give effect to 1,362,760 shares issued in the acquisition of Ardent Behavioral.