Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2012

Consolidating Financial Statements

Schedule of Consolidating Balance Sheets

Universal Hospital Services, Inc.

Consolidating Balance Sheets

(in thousands)

(unaudited)

	September 30, 2012
	Parent Issuer UHS			Subsidiary Guarantor Surigical			Consolidating Adjustments			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	2,462		$	—		$	2,462
Accounts receivable, less allowance for doubtful accounts	65,072			10,055			—			75,127
Due from (to) affiliates	28,402			(28,402		)	—			—
Inventories	5,941			2,753			—			8,694
Deferred income taxes, net	9,838			277			—			10,115
Other current assets	4,808			166			—			4,974
Total current assets	114,061			(12,689		)	—			101,372
Property and equipment, net:
Medical equipment, net	226,183			14,025			—			240,208
Property and office equipment, net	28,326			1,302			—			29,628
Total property and equipment, net	254,509			15,327			—			269,836
Other long-term assets:
Goodwill	283,141			52,436			—			335,577
Investment in subsidiary	56,275			—			(56,275		)	—
Other intangibles, net	214,723			23,231			—			237,954
Other, primarily deferred financing costs, net	15,467			318			—			15,785
Total assets	$	938,176		$	78,623		$	(56,275	)	$	960,524
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	5,309		$	1,116		$	—		$	6,425
Book overdrafts	1,966			—			—			1,966
Accounts payable	32,176			2,494			—			34,670
Accrued compensation	14,251			2,176			—			16,427
Accrued interest	8,200			—			—			8,200
Dividend payable	780			—			—			780
Other accrued expenses	8,140			3,616			—			11,756
Total current liabilities	70,822			9,402			—			80,224
Long-term debt, less current portion	695,705			977			—			696,682
Pension and other long-term liabilities	11,534			1,686			—			13,220
Payable to Parent	21,622			—			—			21,622
Deferred income taxes, net	65,395			9,900			—			75,295
Commitments and contingencies
Equity
Common stock	—			—			—			—
Additional paid-in capital	214,294			60,019			(60,019		)	214,294
Accumulated deficit	(128,512		)	(3,744		)	—			(132,256		)
Accumulated loss in subsidiary	(3,744		)	—			3,744			—
Accumulated other comprehensive loss	(8,940		)	—			—			(8,940		)
Total Universal Hospital Services, Inc. equity	73,098			56,275			(56,275		)	73,098
Non controlling interest	—			383			—			383
Total equity	73,098			56,658			(56,275		)	73,481
Total liabilities and equity	$	938,176		$	78,623		$	(56,275	)	$	960,524

	December 31, 2011
	Parent Issuer UHS			Subsidiary Guarantor Surigical			Consolidating 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	3,089			(3,089		)	—			—
Inventories	4,681			1,342			—			6,023
Deferred income taxes, net	9,525			435			—			9,960
Other current assets	3,855			537			—			4,392
Total current assets	86,048			6,080			—			92,128
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			42,770			—			325,911
Investment in subsidiary	58,214			—			(58,214		)	—
Other intangibles, net	223,487			17,953			—			241,440
Other, primarily deferred financing costs, net	13,036			70			—			13,106
Total assets	$	919,276		$	75,870		$	(58,214	)	$	936,932
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	8,788			1,564			—			10,352
Total current liabilities	67,054			5,932			—			72,986
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, net	65,425			7,864			—			73,289
Commitments and contingencies
Equity
Common stock	—			—			—			—
Additional paid-in capital	214,294			60,019			(60,019		)	214,294
Accumulated deficit	(107,861		)	(1,805		)	—			(109,666		)
Accumulated loss in subsidiary	(1,805		)	—			1,805			—
Accumulated other comprehensive loss	(11,827		)	—			—			(11,827		)
Total Universal Hospital Services, Inc. equity	92,801			58,214			(58,214		)	92,801
Non controlling interest	—			386			—			386
Total equity	92,801			58,600			(58,214		)	93,187
Total liabilities and equity	$	919,276		$	75,870		$	(58,214	)	$	936,932

Schedule of Consolidating Statements of Operations

Universal Hospital Services, Inc.

Consolidating Statement of Operations

(in thousands)

(unaudited)

	For the three months ended September 30, 2012
	Parent Issuer UHS			Subsidiary Guarantor Surigical Services			Consolidating Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	60,618		$	13,516		$	—		$	74,134
Technical and professional services	20,066			—			—			20,066
Medical equipment sales and remarketing	7,619			—			—			7,619
Total revenues	88,303			13,516			—			101,819
Cost of Sales
Cost of medical equipment outsourcing	21,288			7,448			—			28,736
Cost of technical and professional services	14,455			—			—			14,455
Cost of medical equipment sales and remarketing	6,014			—			—			6,014
Medical equipment depreciation	16,932			1,172			—			18,104
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	58,689			8,620			—			67,309
Gross margin	29,614			4,896			—			34,510
Selling, general and administrative	24,624			5,261			—			29,885
Acquisition and integration expenses	34			24			—			58
Operating income (loss)	4,956			(389		)	—			4,567
Equity in earnings of subsidiary	(163		)	—			163			—
Loss on extinguishment of debt	12,339			—			—			12,339
Interest expense	13,140			390			—			13,530
Loss before income taxes and non controlling interest	(20,686		)	(779		)	163			(21,302		)
Provision (benefit) for income taxes	706			(616		)	—			90
Consolidated net loss before non controlling interest	(21,392		)	(163		)	163			(21,392		)
Net income attributable to non controlling interest	202			202			(202		)	202
Net loss attributable to Universal Hospital Services, Inc.	$	(21,594	)	$	(365	)	$	365		$	(21,594	)

	For the three months ended September 30, 2011
	Parent			Subsidiary
	Issuer			Guarantor		Consolidating
	UHS			Surigical Services		Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	60,595		$	8,407	$	—		$	69,002
Technical and professional services	13,852			—		—			13,852
Medical equipment sales and remarketing	6,490			—		—			6,490
Total revenues	80,937			8,407		—			89,344
Cost of Sales
Cost of medical equipment outsourcing	19,452			4,362		—			23,814
Cost of technical and professional services	10,540			—		—			10,540
Cost of medical equipment sales and remarketing	5,215			—		—			5,215
Medical equipment depreciation	16,333			673		—			17,006
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	51,540			5,035		—			56,575
Gross margin	29,397			3,372		—			32,769
Selling, general and administrative	20,814			1,942		—			22,756
Acquisition and integration expenses	18			604		—			622
Operating income	8,565			826		—			9,391
Equity in earnings of subsidiary	573			—		(573		)	—
Interest expense	15,060			62		—			15,122
Income (loss) before income taxes and non controlling interest	(5,922		)	764		(573		)	(5,731		)
Provision (benefit) for income taxes	(336		)	191		—			(145		)
Consolidated net income (loss) before non controlling interest	(5,586		)	573		(573		)	(5,586		)
Net income attributable to non controlling interest	159			159		(159		)	159
Net income (loss) attributable to Universal Hospital Services, Inc.	$	(5,745	)	$	414	$	(414	)	$	(5,745	)

`	For the nine months ended September 30, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical Services			Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	188,954		$	37,645		$	—		$	226,599
Technical and professional services	62,545			—			—			62,545
Medical equipment sales and remarketing	23,250			—			—			23,250
Total revenues	274,749			37,645			—			312,394
Cost of Sales
Cost of medical equipment outsourcing	56,518			20,755			—			77,273
Cost of technical and professional services	47,109			—			—			47,109
Cost of medical equipment sales and remarketing	18,112			—			—			18,112
Medical equipment depreciation	48,847			3,482			—			52,329
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	170,586			24,237			—			194,823
Gross margin	104,163			13,408			—			117,571
Selling, general and administrative	72,138			14,113			—			86,251
Acquisition and integration expenses	264			88			—			352
Operating income (loss)	31,761			(793		)	—			30,968
Equity in earnings of subsidiary	(1,372		)	—			1,372			—
Loss on extinguishment of debt	12,339			—			—			12,339
Interest expense	42,442			1,092			—			43,534
Loss before income taxes and non controlling interest	(24,392		)	(1,885		)	1,372			(24,905		)
Provision (benefit) for income taxes	(2,370		)	(513		)				(2,883		)
Consolidated net loss before non controlling interest	(22,022		)	(1,372		)	1,372			(22,022		)
Net income attributable to non controlling interest	568			568			(568		)	568
Net loss attributable to Universal Hospital Services, Inc.	$	(22,590	)	$	(1,940	)	$	1,940		$	(22,590	)

	For the nine months ended September 30, 2011
	Parent			Subsidiary
	Issuer			Guarantor		Consolidating
	UHS			Surigical Services		Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	188,698		$	16,461	$	—		$	205,159
Technical and professional services	36,083			—		—			36,083
Medical equipment sales and remarketing	17,972			—		—			17,972
Total revenues	242,753			16,461		—			259,214
Cost of Sales
Cost of medical equipment outsourcing	64,221			8,564		—			72,785
Cost of technical and professional services	26,650			—		—			26,650
Cost of medical equipment sales and remarketing	14,115			—		—			14,115
Medical equipment depreciation	50,309			1,369		—			51,678
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	155,295			9,933		—			165,228
Gross margin	87,458			6,528		—			93,986
Selling, general and administrative	68,211			4,036		—			72,247
Acquisition and integration expenses	1,623			998		—			2,621
Operating income	17,624			1,494		—			19,118
Equity in earnings of subsidiary	900			—		(900		)	—
Interest expense	39,423			149		—			39,572
Income (loss) before income taxes and non controlling interest	(20,899		)	1,345		(900		)	(20,454		)
Provision (benefit) for income taxes	(6,855		)	445		—			(6,410		)
Consolidated net income (loss) before non controlling interest	(14,044		)	900		(900		)	(14,044		)
Net income attributable to non controlling interest	297			297		(297		)	297
Net income (loss) attributable to Universal Hospital Services, Inc.	$	(14,341	)	$	603	$	(603	)	$	(14,341	)

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 September 30, 2012												For the nine months ended September 30, 2012
	Parent Issuer UHS			Subsidiary Guarantor Surigical Services			Consolidating Adjustments			Consolidated			Parent Issuer UHS			Subsidiary Guarantor Surigical Services			Consolidating Adjustments			Consolidated
Consolidated net loss	$	(21,392	)	$	(163	)	$	163		$	(21,392	)	$	(22,022	)	$	(1,372	)	$	1,372		$	(22,022	)
Other comprehensive income:
Gain on cash flow hedge, net of tax	—			—			—			—			2,887			—			—			2,887
Total other comprehensive income	—			—			—			—			2,887			—			—			2,887
Comprehensive loss	(21,392		)	(163		)	163			(21,392		)	(19,135		)	(1,372		)	1,372			(19,135		)
Comprehensive income attributable to non controlling interest	202			202			(202		)	202			568			568			(568		)	568
Comprehensive loss attributable to Universal Hospital Services, Inc.	$	(21,594	)	$	(365	)	$	365		$	(21,594	)	$	(19,703	)	$	(1,940	)	$	1,940		$	(19,703	)

	For the three months ended September 30, 2011											For the nine months ended September 30, 2011
	Parent Issuer UHS			Subsidiary Guarantor Surigical Services		Consolidating Adjustments			Consolidated			Parent Issuer UHS			Subsidiary Guarantor Surigical Services		Consolidating Adjustments			Consolidated
Consolidated net income (loss)	$	(5,586	)	$	573	$	(573	)	$	(5,586	)	$	(14,044	)	$	900	$	(900	)	$	(14,044	)
Other comprehensive income:
Gain on cash flow hedge, net of tax	1,970			—		—			1,970			5,254			—		—			5,254
Total other comprehensive income	1,970			—		—			1,970			5,254			—		—			5,254
Comprehensive income (loss)	(3,616		)	573		(573		)	(3,616		)	(8,790		)	900		(900		)	(8,790		)
Comprehensive income attributable to non controlling interest	159			159		(159		)	159			297			297		(297		)	297
Comprehensive income (loss) attributable to Universal Hospital Services, Inc.	$	(3,775	)	$	414	$	(414	)	$	(3,775	)	$	(9,087	)	$	603	$	(603	)	$	(9,087	)

Schedule of Consolidating Statements of Cash Flows

Consolidating Statements of Cash Flows

(in thousands)

(unaudited)

	For the nine months ended September 30, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical			Adjustments		Consolidated
Cash flows from operating activities:
Consolidated net loss	$	(20,650	)	$	(1,372	)	$	—	$	(22,022	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	56,600			3,835			—		60,435
Amortization of intangibles, deferred financing costs and bond premium	11,411			2,389			—		13,800
Non-cash write off of deferred financing cost and bond premium of repurchased notes	2,541			—			—		2,541
Tender premium for purchase of notes	9,798			—			—		9,798
Provision for doubtful accounts	366			218			—		584
Provision for inventory obsolescence	219			17			—		236
Non-cash stock-based compensation expense	3,225			—			—		3,225
Non-cash gain on trade-in of recalled equipment	(15,872		)	—			—		(15,872		)
Loss (gain) on sales and disposals of equipment	(1,252		)	15			—		(1,237		)
Deferred income taxes	(2,210		)	(1,347		)	—		(3,557		)
Changes in operating assets and liabilities:
Accounts receivable	(541		)	(3,089		)	—		(3,630		)
Due from (to) affiliates	(25,313		)	25,313			—		—
Inventories	(1,479		)	(431		)	—		(1,910		)
Other operating assets	(404		)	154			—		(250		)
Accounts payable	3,927			(749		)	—		3,178
Other operating liabilities	6,747			(453		)	—		6,294
Net cash provided by operating activities	27,113			24,500			—		51,613
Cash flows from investing activities:
Medical equipment purchases	(38,744		)	(3,157		)	—		(41,901		)
Property and office equipment purchases	(4,559		)	(224		)	—		(4,783		)
Proceeds from disposition of property and equipment	5,675			—			—		5,675
Acquisitions, net of cash acquired	(436		)	(13,982		)	—		(14,418		)
Net cash used in investing activities	(38,064		)	(17,363		)	—		(55,427		)
Cash flows from financing activities:
Proceeds under senior secured credit facility	113,000			—			—		113,000
Payments under senior secured credit facility	(96,200		)	—			—		(96,200		)
Payments of principal under capital lease obligations	(3,807		)	(1,102		)	—		(4,909		)
Purchase of refinanced bonds	(405,000		)	—			—		(405,000		)
Payments on acquired debt	—			(4,163		)	—		(4,163		)
Proceeds from issuance of bonds	425,000			—			—		425,000
Distributions to non controlling interests	—			(571		)	—		(571		)
Proceeds from exercise of parent company stock options	150			—			—		150
Dividend and equity distribution payments	(763		)	—			—		(763		)
Tender premium for purchase of notes	(9,798		)	—			—		(9,798		)
Payment of deferred financing costs	(9,983		)	—			—		(9,983		)
Change in book overdrafts	(1,648		)	—			—		(1,648		)
Net cash provided by (used in) financing activities	10,951			(5,836		)	—		5,115
Net change in cash and cash equivalents	—			1,301			—		1,301
Cash and cash equivalents at the beginning of period	—			1,161			—		1,161
Cash and cash equivalents at the end of period	$	—		$	2,462		$	—	$	2,462

	For the nine months ended September 30, 2011
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surigical			Adjustments			Consolidated
Cash flows from operating activities:
Consolidated net income (loss)	$	(14,944	)	$	900		$	—		$	(14,044	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	56,903			1,448			—			58,351
Amortization of intangibles, deferred financing costs and bond premium	11,985			1,354			—			13,339
Provision for doubtful accounts	598			(5		)	—			593
Provision for inventory obsolescence	99			—			—			99
Non-cash stock-based compensation expense	3,294			—			—			3,294
Non-cash gain on trade-in of recalled equipment	(8,360		)	—			—			(8,360		)
Loss (gain) on sales and disposals of equipment	(1,303		)	6			—			(1,297		)
Deferred income taxes	(7,151		)	434			—			(6,717		)
Changes in operating assets and liabilities:
Accounts receivable	(4,443		)	115			—			(4,328		)
Due from (to) affiliates	2,162			(2,162		)	—			—
Inventories	(346		)	79			—			(267		)
Other operating assets	(806		)	47			—			(759		)
Accounts payable	995			(182		)	—			813
Other operating liabilities	14,610			740			—			15,350
Net cash provided by operating activities	53,293			2,774			—			56,067
Cash flows from investing activities:
Medical equipment purchases	(59,537		)	(1,026		)	—			(60,563		)
Property and office equipment purchases	(5,834		)	(27		)	—			(5,861		)
Proceeds from disposition of property and equipment	2,594			5			—			2,599
Acquisitions, net of cash acquired	(66,519		)	—			1,480			(65,039		)
Net cash used in investing activities	(129,296		)	(1,048		)	1,480			(128,864		)
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	(3,223		)	(1,063		)	—			(4,286		)
Payment of deferred financing costs	(4,340		)	—			—			(4,340		)
Proceeds from issuance of bonds	178,938			—			—			178,938
Accrued interest received from bondholders	661			—			—			661
Cash paid to non controlling interests	—			(291		)	—			(291		)
Contributions from new members to limited liability companies	—			7			—			7
Proceeds from exercise of parent company stock options	41			—			—			41
Dividend and equity distribution payments	(32,729		)	—			—			(32,729		)
Change in book overdrafts	755			—			—			755
Net cash provided by (used in) financing activities	87,203			(1,347		)	—			85,856
Net change in cash and cash equivalents	11,200			379			1,480			13,059
Cash and cash equivalents at the beginning of period	—			1,480			(1,480		)	—
Cash and cash equivalents at the end of period	$	11,200		$	1,859		$	—		$	13,059