Consolidating Financial Statements (Tables)

6 Months Ended

Jun. 30, 2012

Consolidating Financial Statements

Schedule of Consolidating Balance Sheets

Universal Hospital Services, Inc.

Consolidating Balance Sheets

(in thousands)

(unaudited)

	At June 30, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical			Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	332		$	—		$	332
Accounts receivable, less allowance for doubtful accounts	71,851			8,684			—			80,535
Due from (to) affiliates	24,190			(24,190		)	—			—
Inventories	5,644			2,675			—			8,319
Deferred income taxes	10,735			277			—			11,012
Other current assets	5,037			757			—			5,794
Total current assets	117,457			(11,465		)	—			105,992
Property and equipment, net:
Medical equipment, net	235,542			13,345			—			248,887
Property and office equipment, net	29,319			1,274			—			30,593
Total property and equipment, net	264,861			14,619			—			279,480
Other long-term assets:
Goodwill	283,141			52,275			—			335,416
Investment in subsidiary	56,640			—			(56,640		)	—
Other intangibles, net	217,447			21,704			—			239,151
Other, primarily deferred financing costs, net	11,773			84			—			11,857
Total assets	$	951,319		$	77,217		$	(56,640	)	$	971,896
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	5,566		$	1,135		$	—		$	6,701
Book overdrafts	2,887			—			—			2,887
Accounts payable	29,187			2,573			—			31,760
Accrued compensation	9,548			1,224			—			10,772
Accrued interest	4,074			—			—			4,074
Dividend payable	780			—			—			780
Other accrued expenses	9,651			1,939			—			11,590
Total current liabilities	61,693			6,871			—			68,564
Long-term debt, less current portion	695,399			1,264			—			696,663
Pension and other long-term liabilities	11,980			1,675			—			13,655
Payable to Parent	20,547			—			—			20,547
Deferred income taxes	65,969			10,388			—			76,357
Commitments and contingencies
Total equity
Common stock	—			—			—			—
Additional paid-in capital	214,294			60,019			(60,019		)	214,294
Accumulated deficit	(106,244		)	(3,379		)	—			(109,623		)
Accumulated loss in subsidiary	(3,379		)	—			3,379			—
Accumulated other comprehensive loss	(8,940		)	—			—			(8,940		)
Total Universal Hospital Services, Inc. equity	95,731			56,640			(56,640		)	95,731
Non controlling interest	—			379			—			379
Total equity	95,731			57,019			(56,640		)	96,110
Total liabilities and equity	$	951,319		$	77,217		$	(56,640	)	$	971,896

	At December 31, 2011
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical			Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	1,161		$	—		$	1,161
Accounts receivable, less allowance for doubtful accounts	64,898			5,694			—			70,592
Due from (to) affiliates	4,130			(4,130		)	—			—
Inventories	4,681			1,342			—			6,023
Deferred income taxes	11,893			435			—			12,328
Other current assets	3,855			537			—			4,392
Total current assets	89,457			5,039			—			94,496
Property and equipment, net:
Medical equipment, net	227,234			8,653			—			235,887
Property and office equipment, net	28,116			344			—			28,460
Total property and equipment, net	255,350			8,997			—			264,347
Other long-term assets:
Goodwill	283,141			43,811			—			326,952
Investment in subsidiary	58,301			—			(58,301		)	—
Other intangibles, net	223,487			17,953			—			241,440
Other, primarily deferred financing costs, net	13,036			70			—			13,106
Total assets	$	922,772		$	75,870		$	(58,301	)	$	940,341
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	4,253		$	1,374		$	—		$	5,627
Interest rate swap	4,755			—			—			4,755
Book overdrafts	3,614			—			—			3,614
Accounts payable	29,852			1,507			—			31,359
Accrued compensation	10,084			1,487			—			11,571
Accrued interest	4,937			—			—			4,937
Dividend payable	771			—			—			771
Other accrued expenses	8,577			1,477			—			10,054
Total current liabilities	66,843			5,845			—			72,688
Long-term debt, less current portion	663,649			1,821			—			665,470
Pension and other long-term liabilities	11,328			1,653			—			12,981
Payable to Parent	19,019			—			—			19,019
Deferred income taxes	67,793			7,864			—			75,657
Commitments and contingencies
Total equity
Common stock	—			—			—			—
Additional paid-in capital	214,294			60,019			(60,019		)	214,294
Accumulated deficit	(106,609		)	(1,718		)	—			(108,327		)
Accumulated loss in subsidiary	(1,718		)	—			1,718			—
Accumulated other comprehensive loss	(11,827		)	—			—			(11,827		)
Total Universal Hospital Services, Inc. equity	94,140			58,301			(58,301		)	94,140
Non controlling interest	—			386			—			386
Total equity	94,140			58,687			(58,301		)	94,526
Total liabilities and equity	$	922,772		$	75,870		$	(58,301	)	$	940,341

Schedule of Consolidating Statements of Operations

Universal Hospital Services, Inc.

Consolidating Statement of Operations

(in thousands)

(unaudited)

	For the three months ended June 30, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical Services			Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	76,172		$	12,288		$	—		$	88,460
Technical and professional services	22,350			—			—			22,350
Medical equipment sales and remarketing	9,264			—			—			9,264
Total revenues	107,786			12,288			—			120,074
Cost of Sales
Cost of medical equipment outsourcing	25,835			6,756			—			32,591
Cost of technical and professional services	16,885			—			—			16,885
Cost of medical equipment sales and remarketing	7,345			—			—			7,345
Medical equipment depreciation	16,152			1,169			—			17,321
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	66,217			7,925			—			74,142
Gross margin	41,569			4,363			—			45,932
Selling, general and administrative	23,472			5,237			—			28,709
Acquisition and integration expenses	126			64			—			190
Operating income (loss)	17,971			(938		)	—			17,033
Equity in earnings of subsidiary	(1,299		)	—			1,299			—
Interest expense	14,150			354			—			14,504
Income (loss) before income taxes and non controlling interest	2,522			(1,292		)	1,299			2,529
Provision (benefit) for income taxes	190			7			—			197
Consolidated net income (loss) before non controlling interest	2,332			(1,299		)	1,299			2,332
Net income attributable to non controlling interest	184			184			(184		)	184
Net income (loss) attributable to Universal Hospital Services, Inc.	$	2,148		$	(1,483	)	$	1,483		$	2,148

	For the three months ended June 30, 2011
	Parent			Subsidiary
	Issuer			Guarantor		Consolidating
	UHS			Surigical Services		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			—		—			8,227
Cost of medical equipment sales and remarketing	4,600			—		—			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
Income (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 income (loss) before non controlling interest	(1,275		)	329		(329		)	(1,275		)
Net income attributable to non controlling interest	138			138		(138		)	138
Net income (loss) attributable to Universal Hospital Services, Inc.	$	(1,413	)	$	191	$	(191	)	$	(1,413	)

	For the six months ended June 30, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical Services			Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	144,368		$	24,129		$	—		$	168,497
Technical and professional services	42,479			—			—			42,479
Medical equipment sales and remarketing	15,631			—			—			15,631
Total revenues	202,478			24,129			—			226,607
Cost of Sales
Cost of medical equipment outsourcing	51,263			13,306			—			64,569
Cost of technical and professional services	32,654			—			—			32,654
Cost of medical equipment sales and remarketing	12,099			—			—			12,099
Medical equipment depreciation	31,915			2,310			—			34,225
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	127,931			15,616			—			143,547
Gross margin	74,547			8,513			—			83,060
Selling, general and administrative	47,514			8,853			—			56,367
Acquisition and integration expenses	230			64			—			294
Operating income (loss)	26,803			(404		)	—			26,399
Equity in earnings of subsidiary	(1,295		)	—			1,295			—
Interest expense	29,302			701			—			30,003
Loss before income taxes and non controlling interest	(3,794		)	(1,105		)	1,295			(3,604		)
Provision (benefit) for income taxes	(2,864		)	190			—			(2,674		)
Consolidated net loss before non controlling interest	(930		)	(1,295		)	1,295			(930		)
Net income attributable to non controlling interest	366			366			(366		)	366
Net loss attributable to Universal Hospital Services, Inc.	$	(1,296	)	$	(1,661	)	$	1,661		$	(1,296	)

	For the six months ended June 30, 2011
	Parent			Subsidiary
	Issuer			Guarantor		Consolidating
	UHS			Surigical Services		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
Income (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 income (loss) before non controlling interest	(7,417		)	329		(329		)	(7,417		)
Net income attributable to non controlling interest	138			138		(138		)	138
Net income (loss) attributable to Universal Hospital Services, Inc.	$	(7,555	)	$	191	$	(191	)	$	(7,555	)

Schedule of Consolidating Statements of Comprehensive Income (Loss)

Universal Hospital Services, Inc.

Consolidating Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

	For the three months ended June 30, 2012									For the six months ended June 30, 2012
	Parent		Subsidiary							Parent			Subsidiary
	Issuer		Guarantor			Consolidating				Issuer			Guarantor			Consolidating
	UHS		Surigical Services			Adjustments		Consolidated		UHS			Surigical Services			Adjustments		Consolidated
Consolidated net income (loss)	$	2,332	$	(1,299	)	$	1,299	$	2,332	$	(930	)	$	(1,295	)	$	1,295	$	(930	)
Other comprehensive income:
Gain on cash flow hedge, net of tax	1,167		—			—		1,167		2,887			—			—		2,887
Total other comprehensive income	1,167		—			—		1,167		2,887			—			—		2,887
Comprehensive income (loss)	3,499		(1,299		)	1,299		3,499		1,957			(1,295		)	1,295		1,957
Comprehensive income attributable to non controlling interest	184		—			—		184		366			—			—		366
Comprehensive income (loss) attributable to Universal Hospital Services, Inc.	$	3,315	$	(1,299	)	$	1,299	$	3,315	$	1,591		$	(1,295	)	$	1,295	$	1,591

	For the three months ended June 30, 2011											For the six months ended June 30, 2011
	Parent			Subsidiary								Parent			Subsidiary
	Issuer			Guarantor		Consolidating						Issuer			Guarantor		Consolidating
	UHS			Surigical Services		Adjustments			Consolidated			UHS			Surigical Services		Adjustments			Consolidated
Consolidated net income (loss)	$	(1,275	)	$	329	$	(329	)	$	(1,275	)	$	(7,417	)	$	329	$	(329	)	$	(7,417	)
Other comprehensive income:
Gain on cash flow hedge, net of tax	1,583			—		—			1,583			3,284			—		—			3,284
Total other comprehensive income	1,583			—		—			1,583			3,284			—		—			3,284
Comprehensive income (loss)	308			329		(329		)	308			(4,133		)	329		(329		)	(4,133		)
Comprehensive income attributable to non controlling interest	138			—		—			138			138			—		—			138
Comprehensive income (loss) attributable to Universal Hospital Services, Inc.	$	170		$	329	$	(329	)	$	170		$	(4,271	)	$	329	$	(329	)	$	(4,271	)

Schedule of Consolidating Statements of Cash Flows

Universal Hospital Services, Inc.

Consolidating Statements of Cash Flows

(in thousands)

(unaudited)

	For the six months ended June 30, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical Services			Adjustments		Consolidated
Cash flows from operating activities:
Consolidated net income (loss)	$	365		$	(1,295	)	$	—	$	(930	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	37,140			2,533			—		39,673
Amortization of intangibles, deferred financing costs and bond premium	7,764			1,548			—		9,312
Provision for doubtful accounts	323			69			—		392
Provision for inventory obsolescence	182			—			—		182
Non-cash stock-based compensation expense	2,150			—			—		2,150
Non-cash gain on trade-in of recalled equipment	(14,122		)	—			—		(14,122		)
Loss (gain) on sales and disposals of equipment	(700		)	5			—		(695		)
Deferred income taxes	(666		)	(784		)	—		(1,450		)
Changes in operating assets and liabilities:
Accounts receivable	(7,276		)	(2,096		)	—		(9,372		)
Due from (to) affiliates	(20,060		)	20,060			—		—
Inventories	(1,145		)	(533		)	—		(1,678		)
Other operating assets	(1,745		)	(256		)	—		(2,001		)
Accounts payable	471			(1,079		)	—		(608		)
Other operating liabilities	(1,781		)	(1,398		)	—		(3,179		)
Net cash provided by operating activities	900			16,774			—		17,674
Cash flows from investing activities:
Medical equipment purchases	(30,007		)	(2,075		)	—		(32,082		)
Property and office equipment purchases	(3,450		)	(187		)	—		(3,637		)
Proceeds from disposition of property and equipment	3,935			—			—		3,935
Acquisitions, net of cash acquired	(436		)	(11,009		)	—		(11,445		)
Net cash used in investing activities	(29,958		)	(13,271		)	—		(43,229		)
Cash flows from financing activities:
Proceeds under senior secured credit facility	72,000			—			—		72,000
Payments under senior secured credit facility	(39,000		)	—			—		(39,000		)
Payments of principal under capital lease obligations	(2,602		)	(796		)	—		(3,398		)
Payoff of acquired debt	—			(3,163		)	—		(3,163		)
Distributions to non controlling interests	—			(373		)	—		(373		)
Proceeds from exercise of parent company stock options	150			—			—		150
Dividend and equity distribution payments	(763		)	—			—		(763		)
Change in book overdrafts	(727		)	—			—		(727		)
Net cash provided by (used in) financing activities	29,058			(4,332		)	—		24,726
Net change in cash and cash equivalents	—			(829		)	—		(829		)
Cash and cash equivalents at the beginning of period	—			1,161			—		1,161
Cash and cash equivalents at the end of period	$	—		$	332		$	—	$	332

	For the six months ended June 30, 2011
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical Services			Adjustments			Consolidated
Cash flows from operating activities:
Consolidated net income (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