Providence Service Corporation Releases Second Quart...(on Consolidated Sta...),Health

Consolidated Statements of Cash Flows

(in thousands)

(UNAUDITED)

Six months ended

June 30,

2008 2007

Operating activities

Net income $7,142 $6,895

Adjustments to reconcile net income

to net cash provided by operating

activities:

Depreciation 2,313 614

Amortization 4,173 1,423

Amortization of deferred financing

costs 1,201 91

Deferred income taxes (484) (91)

Stock based compensation 1,163 1,017

Excess tax benefit upon exercise of

stock options (185) -

Other 22 100

Changes in operating assets and

liabilities, net of effects

of acquisitions:

Billed and unbilled accounts

receivable, net (1,289) (2,623)

Management fee receivable (792) (1,474)

Other receivable (1,346) (2,212)

Restricted cash 457 -

Reinsurance liability reserve 2,094 278

Prepaid expenses and other (5,300) (1,622)

Accounts payable and accrued

expenses 3,667 (1,033)

Accrued transpo
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