EX-99.2 3 g07256exv99w2.htm EX-99.2 UNAUDITED PRO FORMA FINANCIAL INFORMATION Ex-99.2
 

Exhibit 99.2
Unaudited Pro Forma Financial Information
         
    Pro Forma LTM  
    3/31/07  
($ in millions)
        
Selected Operating Data (1):
        
Net Revenue
   $ 1,582.3  
Adjusted EBITDA
     261.0  
Cash paid for Capital Expenditures
     47.5  
Cash Interest Expense (2)
     88.9  
Cash Taxes (3)
     47.2  
 
(1)   Assumes the acquisition of Horizon Health and other acquisitions completed since April 1, 2006, occurred on April 1, 2006.
 
(2)   Includes $225 million incremental Term Loan borrowing, $50 million incremental revolver borrowing and $200 million in additional Senior Subordinated Debt.
 
(3)   Based on pro forma earnings before taxes, assuming tax rate of 38.3%.
RECONCILIATION OF INCOME FROM
CONTINUING OPERATIONS TO
ADJUSTED LTM EBITDA AND
PRO FORMA ADJUSTED LTM EBITDA
FOR THE TWELVE MONTHS ENDED MARCH 31, 2007
(UNAUDITED, in thousands)
                                 
            Horizon     Other        
    PSI     Health (b)     Acquisitions (b)     Pro Forma  
 
                                
Income from continuing operations
   $ 67,627     $ 10,628     $ 6,426     $ 84,681  
Provision for income taxes
     41,170       8,238       4,277       53,685  
Interest expense
     45,485       8,959       3,381       57,825  
Depreciation and amortization
     22,173       6,434       3,506       32,113  
Minority interest
     —       246       —       246  
Other expenses:
                                
Share based compensation
     9,954       1,859       —       11,813  
Horizon Health merger and transaction costs
     —       2,145       —       2,145  
Management fee paid to parent
     —       —       5,361       5,361  
 
                        
Total other expenses
     9,954       4,004       5,361       19,319  
 
                        
Adjusted EBITDA (a)
   $ 186,409     $ 38,509     $ 22,951     $ 247,869  
 
                                
Pro Forma Adjustments:
                                
Reduction of overhead expenses
     —       10,000       3,094       13,094  
 
                        
Pro Forma Adjusted EBITDA (a)
   $ 186,409     $ 48,509     $ 26,045     $ 260,963  
 
                        
 
(a)   Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined as income from continuing operations before interest expense (net of interest income), income taxes, depreciation, amortization, minority interest, stock compensation, and other items included in the caption above labeled “Other expenses”. These other expenses may occur in future periods, but the amounts recognized can vary significantly from period to period and do not directly relate to the ongoing operations of our health care facilities. PSI’s management relies on adjusted EBITDA as the primary measure to review and assess operating performance of its facilities and their management teams. PSI believes it is useful to investors to provide disclosures of its operating results on the same basis as that used by management. Management and investors also review adjusted EBITDA to evaluate PSI’s overall performance and to compare PSI’s current operating results with corresponding periods and with other companies in the health care industry. You should not consider adjusted EBITDA in isolation or as a substitute for net income, operating cash flows or other cash flow statement data determined in accordance with accounting principles generally accepted in the United States. Because adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States and is susceptible to varying calculations, it may not be comparable to similarly titled measures of other companies.
 
(b)   Assumes that PSI had completed the acquisitions of Horizon Health and Other Acquisitions on April 1, 2006. Other Acquisitions refers to various acquisitions PSI completed since April 1, 2006.