Consolidating Financial Statements

6 Months Ended

Jun. 30, 2011

Consolidating Financial Statements

Consolidating Financial Statements

16. Consolidating Financial Statements

        In accordance with the provisions of the Second Lien Senior Indenture, as wholly owned subsidiaries of UHS, Emergent Group and PRI Medical have jointly and severally guaranteed all the Company's Obligations (as defined in the Second Lien Senior Indenture) under the Second Lien Senior Indenture on a full and unconditional basis. Consolidating financial information of UHS and the guarantors is presented on the following pages.

Consolidating Balance Sheets
(in thousands, except share and per share information)
(unaudited)

			At June 30, 2011
			Parent Issuer UHS			Subsidiary Guarantor Emergent Group		Consolidating Adjustments			Consolidated
Assets
Current assets:
	Cash and cash equivalents		$	35,914		$	1,833	$	—		$	37,747
	Accounts receivable, less allowance for doubtful accounts			61,258			4,130		—			65,388
	Due from (to) affiliates			(1,150	)		1,150		—			—
	Inventories			4,770			1,261		—			6,031
	Deferred income taxes			11,656			286		—			11,942
	Other current assets			3,838			1,359		—			5,197
		Total current assets		116,286			10,019		—			126,305
Property and equipment, net:
	Medical equipment, net			224,646			7,162		—			231,808
	Property and office equipment, net			21,882			191		—			22,073
		Total property and equipment, net		246,528			7,353		—			253,881
Other long-term assets:
	Goodwill			283,141			40,848		—			323,989
	Investment in subsidiary			60,210			—		(60,210	)		—
	Other intangibles, net			230,052			21,472		—			251,524
	Other, primarily deferred financing costs, net			14,014			77		—			14,091
		Total assets	$	950,231		$	79,769	$	(60,210	)	$	969,790
Liabilities and Total Equity
Current liabilities:
	Current portion of long-term debt		$	3,767		$	1,795	$	—		$	5,562
	Interest rate swap			11,019			—		—			11,019
	Book overdrafts			4,739			—		—			4,739
	Accounts payable			21,777			1,798		—			23,575
	Accrued compensation			13,335			1,185		—			14,520
	Accrued interest			4,827			—		—			4,827
	Dividend payable			33,501			—		—			33,501
	Other accrued expenses			12,603			752		—			13,355
		Total current liabilities		105,568			5,530		—			111,098
Long-term debt, less current portion				647,706			2,428		—			650,134
Pension and other long-term liabilities				6,756			1,466		—			8,222
Payable to Parent				16,937			—		—			16,937
Deferred income taxes				65,296			9,765		—			75,061
Commitments and contingencies (Note 10)
Total equity
	Common stock			—			—		—			—
	Additional paid-in capital			214,294			60,019		(60,019	)		214,294
	Accumulated income (deficit)			(95,022	)		191		—			(94,831	)
	Accumulated earnings in subsidiary			191			—		(191	)		—
	Accumulated other comprehensive loss			(11,495	)		—		—			(11,495	)
		Total Universal Hospital Services, Inc. equity		107,968			60,210		(60,210	)		107,968
		Non controlling interest		—			370		—			370
		Total equity		107,968			60,580		(60,210	)		108,338
		Total liabilities and equity	$	950,231		$	79,769	$	(60,210	)	$	969,790

Consolidating Statements of Operations
(in thousands)
(unaudited)

		For the three months ended June 30, 2011
		Parent Issuer UHS			Subsidiary Guarantor Emergent Group		Consolidating Adjustments			Consolidated
Revenue
Medical equipment outsourcing		$	65,792		$	8,055	$	—		$	73,847
Technical and professional services			11,361			—		—			11,361
Medical equipment sales and remarketing			5,876			—		—			5,876
	Total revenues		83,029			8,055		—			91,084
Cost of Sales
Cost of medical equipment outsourcing			24,264			4,202		—			28,466
Cost of technical and professional services			8,227			0		—			8,227
Cost of medical equipment sales and remarketing			4,600			0		—			4,600
Medical equipment depreciation			16,808			697		—			17,505
	Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing		53,899			4,899		—			58,798
Gross margin			29,130			3,156		—			32,286
Selling, general and administrative			25,018			2,093		—			27,111
Acquisition and integration expenses			831			394		—			1,225
	Operating income		3,281			669		—			3,950
Equity in earnings of subsidiary			329			—		(329	)		—
Interest expense			12,659			86		—			12,745
	Loss before income taxes and non controlling interest		(9,049	)		583		(329	)		(8,795	)
Provision (benefit) for income taxes			(7,774	)		254		—			(7,520	)
	Consolidated net loss		(1,275	)		329		(329	)		(1,275	)
	Net income attributable to non controlling interest		138			138		(138	)		138
	Net loss attributable to Universal Hospital Services, Inc.	$	(1,413	)	$	191	$	(191	)	$	(1,413	)

Consolidating Statements of Operations
(in thousands)
(unaudited)

		For the six months ended June 30, 2011
		Parent Issuer UHS			Subsidiary Guarantor Emergent Group		Consolidating Adjustments			Consolidated
Revenue
Medical equipment outsourcing		$	132,031		$	8,055	$	—		$	140,086
Technical and professional services			22,231			—		—			22,231
Medical equipment sales and remarketing			11,482			—		—			11,482
	Total revenues		165,744			8,055		—			173,799
Cost of Sales
Cost of medical equipment outsourcing			48,698			4,202		—			52,900
Cost of technical and professional services			16,110			—		—			16,110
Cost of medical equipment sales and remarketing			8,900			—		—			8,900
Medical equipment depreciation			33,976			697		—			34,673
	Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing		107,684			4,899		—			112,583
Gross margin			58,060			3,156		—			61,216
Selling, general and administrative			47,398			2,093		—			49,491
Acquisition and integration expenses			1,605			394		—			1,999
	Operating income		9,057			669		—			9,726
Equity in earnings of subsidiary			329			—		(329	)		—
Interest expense			24,364			86		—			24,450
	Loss before income taxes and non controlling interest		(14,978	)		583		(329	)		(14,724	)
Provision (benefit) for income taxes			(7,561	)		254		—			(7,307	)
	Consolidated net loss		(7,417	)		329		(329	)		(7,417	)
	Net income attributable to non controlling interest		138			138		(138	)		138
	Net loss attributable to Universal Hospital Services, Inc.	$	(7,555	)	$	191	$	(191	)	$	(7,555	)

Consolidating Statements of Cash Flows
(in thousands)
(unaudited)

				For the six months ended June 30, 2011
				Parent Issuer UHS			Subsidiary Guarantor Emergent Group			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
	Consolidated net loss			$	(7,746	)	$	329		$	—		$	(7,417	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Depreciation			38,677			737			—			39,414
		Amortization of intangibles, deferred financing costs and bond premium			7,999			677			—			8,676
		Provision for doubtful accounts			405			(5	)		—			400
		Provision for inventory obsolescence			76			—			—			76
		Non-cash stock-based compensation expense			2,196			—			—			2,196
		Non-cash gain on trade-in of recalled equipment			(3,292	)		—			—			(3,292	)
		Loss (gain) on sales and disposals of equipment			(807	)		6			—			(801	)
		Deferred income taxes			(7,352	)		243			—			(7,109	)
	Changes in operating assets and liabilities:
		Accounts receivable			(1,702	)		392			—			(1,310	)
		Due from (to) affiliates			1,150			(1,150	)		—			—
		Inventories			(85	)		(40	)		—			(125	)
		Other operating assets			(299	)		47			—			(252	)
		Accounts payable			(1,738	)		(373	)		—			(2,111	)
		Other operating liabilities			2,446			299			—			2,745
			Net cash provided by operating activities		29,928			1,162			—			31,090
Cash flows from investing activities:
	Medical equipment purchases				(47,997	)		(119	)		—			(48,116	)
	Property and office equipment purchases				(3,227	)		(8	)		—			(3,235	)
	Proceeds from disposition of property and equipment				1,492			4			—			1,496
	Acquisitions, net of cash acquired				(66,519	)		—			1,480			(65,039	)
			Net cash used in investing activities		(116,251	)		(123	)		1,480			(114,894	)
Cash flows from financing activities:
	Proceeds under senior secured credit facility				132,250			—			—			132,250
	Payments under senior secured credit facility				(185,150	)		—			—			(185,150	)
	Payments of principal under capital lease obligations				(2,175	)		(539	)		—			(2,714	)
	Payment of deferred financing costs				(3,500	)		—			—			(3,500	)
	Proceeds from issuance of bonds				178,938			—			—			178,938
	Accrued interest received from bondholders				661			—			—			661
	Cash paid to non controlling interests				—			(147	)		—			(147	)
	Proceeds from exercise of parent company stock options				40			—			—			40
	Change in book overdrafts				1,173			—			—			1,173
			Net cash provided by (used in) financing activities		122,237			(686	)		—			121,551
		Net change in cash and cash equivalents			35,914			353			1,480			37,747
Cash and cash equivalents at the beginning of period					—			1,480			(1,480	)		—
Cash and cash equivalents at the end of period				$	35,914		$	1,833		$	—		$	37,747