Consolidating Financial Statements (Tables)

3 Months Ended

Mar. 31, 2013

Consolidating Financial Statements

Schedule of Consolidating Balance Sheets

Consolidating Balance Sheets

(in thousands, except share and per share information)

(unaudited)

	March 31, 2013
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments			Consolidated
Assets
Current assets:
Accounts receivable, less allowance for doubtful accounts	$	67,317		$	6,660		$	—		$	73,977
Due from affiliates	26,450			—			(26,450		)	—
Inventories	5,994			3,461			—			9,455
Deferred income taxes, net	2,566			1,029			—			3,595
Other current assets	4,091			186			—			4,277
Total current assets	106,418			11,336			(26,450		)	91,304
Property and equipment, net:
Medical equipment, net	220,536			14,929			—			235,465
Property and office equipment, net	28,406			1,852			—			30,258
Total property and equipment, net	248,942			16,781			—			265,723
Other long-term assets:
Goodwill	283,141			52,436			—			335,577
Investment in subsidiary	54,130			—			(54,130		)	—
Other intangibles, net	209,275			21,553			—			230,828
Other, primarily deferred financing costs, net	16,146			346			—			16,492
Total assets	$	918,052		$	102,452		$	(80,580	)	$	939,924
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	4,964		$	995		$	—		$	5,959
Book overdrafts	5,086			1,088			—			6,174
Due to affiliates	—			26,450			(26,450		)	—
Accounts payable	27,525			2,942			—			30,467
Accrued compensation	17,530			2,781			—			20,311
Accrued interest	6,512			—			—			6,512
Dividend payable	88			—			—			88
Other accrued expenses	10,466			1,952			—			12,418
Total current liabilities	72,171			36,208			(26,450		)	81,929
Long-term debt, less current portion	700,331			1,187			—			701,518
Pension and other long-term liabilities	13,184			1,709			—			14,893
Payable to Parent	21,444			—			—			21,444
Deferred income taxes, net	60,749			8,892			—			69,641
Commitments and contingencies
Equity
Common stock	—			—			—			—
Additional paid-in capital	214,481			60,019			(60,019		)	214,481
Accumulated deficit	(149,333		)	(5,889		)	—			(155,222		)
Accumulated loss in subsidiary	(5,889		)	—			5,889			—
Accumulated other comprehensive loss	(9,086		)	—			—			(9,086		)
Total Universal Hospital Services, Inc. equity	50,173			54,130			(54,130		)	50,173
Non controlling interest	—			326			—			326
Total equity	50,173			54,456			(54,130		)	50,499
Total liabilities and equity	$	918,052		$	102,452		$	(80,580	)	$	939,924

Consolidating Balance Sheets

(in thousands, except share and per share information)

	December 31, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments			Consolidated
Assets
Current assets:
Accounts receivable, less allowance for doubtful accounts	$	60,805		$	7,673		$	—		$	68,478
Due from affiliates	25,138			—			(25,138		)	—
Inventories	5,771			3,097			—			8,868
Deferred income taxes, net	2,581			1,029			—			3,610
Other current assets	4,015			265			—			4,280
Total current assets	98,310			12,064			(25,138		)	85,236
Property and equipment, net:
Medical equipment, net	222,045			14,860			—			236,905
Property and office equipment, net	28,250			1,844			—			30,094
Total property and equipment, net	250,295			16,704			—			266,999
Other long-term assets:
Goodwill	283,141			52,436			—			335,577
Investment in subsidiary	54,906			—			(54,906		)	—
Other intangibles, net	211,999			22,392			—			234,391
Other, primarily deferred financing costs, net	14,876			334			—			15,210
Total assets	$	913,527		$	103,930		$	(80,044	)	$	937,413
Liabilities and Equity
Current liabilities:
Current portion of long-term debt	$	5,038		$	1,185		$	—		$	6,223
Book overdrafts	3,644			261			—			3,905
Due to affiliates	—			25,138			(25,138		)	—
Accounts payable	20,083			5,953			—			26,036
Accrued compensation	15,005			1,951			—			16,956
Accrued interest	13,845			—			—			13,845
Dividend payable	88			—			—			88
Other accrued expenses	9,782			1,859			—			11,641
Total current liabilities	67,485			36,347			(25,138		)	78,694
Long-term debt, less current portion	691,565			1,226			—			692,791
Pension and other long-term liabilities	12,679			1,698			—			14,377
Payable to Parent	21,640			—			—			21,640
Deferred income taxes, net	59,627			9,409			—			69,036
Commitments and contingencies
Equity
Common stock	—			—			—			—
Additional paid-in capital	214,481			60,019			(60,019		)	214,481
Accumulated deficit	(139,751		)	(5,113		)	—			(144,864		)
Accumulated loss in subsidiary	(5,113		)	—			5,113			—
Accumulated other comprehensive loss	(9,086		)	—			—			(9,086		)
Total Universal Hospital Services, Inc. equity	60,531			54,906			(54,906		)	60,531
Non controlling interest	—			344			—			344
Total equity	60,531			55,250			(54,906		)	60,875
Total liabilities and equity	$	913,527		$	103,930		$	(80,044	)	$	937,413

Schedule of Consolidating Statements of Operations

Consolidating Statements of Operations

(in thousands)

(unaudited)

	Three Months Ended March 31, 2013
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	68,685		$	13,310		$	—		$	81,995
Technical and professional services	21,249			—			—			21,249
Medical equipment sales and remarketing	7,114			—			—			7,114
Total revenues	97,048			13,310			—			110,358
Cost of Revenue
Cost of medical equipment outsourcing	26,505			7,369			—			33,874
Cost of technical and professional services	17,031			—			—			17,031
Cost of medical equipment sales and remarketing	5,694			—			—			5,694
Medical equipment depreciation	16,487			1,410			—			17,897
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	65,717			8,779			—			74,496
Gross margin	31,331			4,531			—			35,862
Selling, general and administrative	24,890			4,635			—			29,525
Restructuring, acquisition and integration expenses	(237		)	290			—			53
Operating income (loss)	6,678			(394		)	—			6,284
Equity in loss of subsidiary	595			—			(595		)	—
Loss on extinguishment of debt	1,853			—			—			1,853
Interest expense	13,374			503			—			13,877
Loss before income taxes and non controlling interest	(9,144		)	(897		)	595			(9,446		)
Provision (benefit) for income taxes	1,033			(302		)	—			731
Consolidated net loss	(10,177		)	(595		)	595			(10,177		)
Net income attributable to non controlling interest	—			181			—			181
Net loss attributable to Universal Hospital Services, Inc.	$	(10,177	)	$	(776	)	$	595		$	(10,358	)

Consolidating Statements of Operations

(in thousands)

(unaudited)

	Three Months Ended March 31, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments			Consolidated
Revenue
Medical equipment outsourcing	$	65,543		$	11,841		$	—		$	77,384
Technical and professional services	20,129			—			—			20,129
Medical equipment sales and remarketing	6,368			—			—			6,368
Total revenues	92,040			11,841			—			103,881
Cost of Revenue
Cost of medical equipment outsourcing	22,775			6,548			—			29,323
Cost of technical and professional services	15,768			—			—			15,768
Cost of medical equipment sales and remarketing	4,753			—			—			4,753
Medical equipment depreciation	15,763			1,143			—			16,906
Total costs of medical equipment outsourcing, technical and professional services and medical equipment sales and remarketing	59,059			7,691			—			66,750
Gross margin	32,981			4,150			—			37,131
Selling, general and administrative	24,044			3,615			—			27,659
Restructuring, acquisition and integration expenses	104			—			—			104
Operating income	8,833			535			—			9,368
Equity in earnings of subsidiary	(91		)	—			91			—
Interest expense	15,151			348			—			15,499
(Loss) income before income taxes and non controlling interest	(6,227		)	187			(91		)	(6,131		)
(Benefit) provision for income taxes	(3,265		)	96			—			(3,169		)
Consolidated net loss	(2,962		)	91			(91		)	(2,962		)
Net income attributable to non controlling interest	182			182			(182		)	182
Net loss attributable to Universal Hospital Services, Inc.	$	(3,144	)	$	(91	)	$	91		$	(3,144	)

Schedule of Consolidating Statements of Comprehensive Income (Loss)

Consolidating Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

	Three Months Ended March 31, 2013
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments		Consolidated
Consolidated net loss	$	(10,177	)	$	(595	)	$	595	$	(10,177	)
Total other comprehensive income	—			—			—		—
Comprehensive loss	(10,177		)	(595		)	595		(10,177		)
Comprehensive income attributable to non controlling interest	—			181			—		181
Comprehensive loss attributable to Universal Hospital Services, Inc.	$	(10,177	)	$	(776	)	$	595	$	(10,358	)

Consolidating Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

	Three Months Ended March 31, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments			Consolidated
Consolidated net loss	$	(2,962	)	$	91		$	(91	)	$	(2,962	)
Other comprehensive income:
Gain on cash flow hedge, net of tax	1,720			—			—			1,720
Total other comprehensive income	1,720			—			—			1,720
Comprehensive (loss) income	(1,242		)	91			(91		)	(1,242		)
Comprehensive income attributable to non controlling interest	182			182			(182		)	182
Comprehensive loss attributable to Universal Hospital Services, Inc.	$	(1,424	)	$	(91	)	$	91		$	(1,424	)

Schedule of Consolidating Statements of Cash Flows

Consolidating Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended March 31, 2013
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments			Consolidated
Cash flows from operating activities:
Consolidated net loss	$	(10,177	)	$	(595	)	$	595		(10,177		)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	18,874			1,576			—			20,450
Amortization of intangibles, deferred financing costs and bond premium	3,455			839			—			4,294
Non-cash write off of deferred financing cost	1,853			—			—			1,853
Equity in loss of subsidiary	595			—			(595		)	—
Provision for doubtful accounts	729			6			—			735
Provision for inventory obsolescence	89			26			—			115
Non-cash stock-based compensation expense - net	(211		)	15			—			(196		)
Gain on sales and disposals of equipment	(692		)	(18		)	—			(710		)
Deferred income taxes	1,137			(517		)	—			620
Changes in operating assets and liabilities:
Accounts receivable	(7,241		)	1,007			—			(6,234		)
Due from (to) affiliates	(1,297		)	1,297			—			—
Inventories	(312		)	(390		)	—			(702		)
Other operating assets	(13		)	67			—			54
Accounts payable	16			(400		)	—			(384		)
Other operating liabilities	(3,619		)	934			—			(2,685		)
Net cash provided by operating activities	3,186			3,847			—			7,033
Cash flows from investing activities:
Medical equipment purchases	(8,569		)	(2,435		)	—			(11,004		)
Property and office equipment purchases	(2,146		)	(176		)	—			(2,322		)
Proceeds from disposition of property and equipment	1,410			20			—			1,430
Holdback payment related to acquisition	—			(1,655		)	—			(1,655		)
Net cash used in investing activities	(9,305		)	(4,246		)	—			(13,551		)
Cash flows from financing activities:
Proceeds under senior secured credit facility	35,300			—			—			35,300
Payments under senior secured credit facility	(29,800		)	—			—			(29,800		)
Payments of principal under capital lease obligations	(1,075		)	(229		)	—			(1,304		)
Payments of floating rate notes	(230,000		)	—			—			(230,000		)
Proceeds from issuance of bonds	234,025			—			—			234,025
Accrued interest received from bondholders	8,620			—			—			8,620
Accrued interest paid to bondholders	(8,620		)	—			—			(8,620		)
Distributions to non controlling interests	—			(199		)	—			(199		)
Payment of deferred financing costs	(3,773		)	—			—			(3,773		)
Change in book overdrafts	1,442			827			—			2,269
Net cash provided by financing activities	6,119			399			—			6,518
Net change in cash and cash equivalents	—			—			—			—
Cash and cash equivalents at the beginning of period	—			—			—			—
Cash and cash equivalents at the end of period	$	—		$	—		$	—		$	—

Consolidating Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended March 31, 2012
	Parent			Subsidiary
	Issuer			Guarantor			Consolidating
	UHS			Surgical Services			Adjustments		Consolidated
Cash flows from operating activities:
Consolidated net loss	$	(3,053	)	$	91		$	—	$	(2,962	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	18,346			1,228			—		19,574
Amortization of intangibles, deferred financing costs and bond premium	3,974			775			—		4,749
Provision for doubtful accounts	168			—			—		168
Provision for inventory obsolescence	55			—			—		55
Non-cash stock-based compensation expense	1,075			—			—		1,075
Non-cash gain on trade-in of recalled equipment	(1,356		)	—			—		(1,356		)
Gain on sales and disposals of equipment	(436		)	—			—		(436		)
Deferred income taxes	(1,900		)	(379		)	—		(2,279		)
Changes in operating assets and liabilities:
Accounts receivable	(3,169		)	(3,076		)	—		(6,245		)
Due from (to) affiliates	(17,679		)	17,679			—		—
Inventories	(857		)	(387		)	—		(1,244		)
Other operating assets	(1,049		)	(584		)	—		(1,633		)
Accounts payable	(1,081		)	(611		)	—		(1,692		)
Other operating liabilities	16,202			54			—		16,256
Net cash provided by operating activities	9,240			14,790			—		24,030
Cash flows from investing activities:
Medical equipment purchases	(11,795		)	(765		)	—		(12,560		)
Property and office equipment purchases	(1,502		)	(137		)	—		(1,639		)
Proceeds from disposition of property and equipment	958			—			—		958
Acquisitions, net of cash acquired	(436		)	(11,009		)	—		(11,445		)
Net cash used in investing activities	(12,775		)	(11,911		)	—		(24,686		)
Cash flows from financing activities:
Proceeds under senior secured credit facility	31,600			—			—		31,600
Payments under senior secured credit facility	(23,100		)	—			—		(23,100		)
Payments of principal under capital lease obligations	(1,303		)	(510		)	—		(1,813		)
Payoff of acquired debt	—			(3,163		)	—		(3,163		)
Distributions to non controlling interests	—			(182		)	—		(182		)
Contributions from new members to limited liability companies	—			17			—		17
Proceeds from exercise of parent company stock options	150			—			—		150
Dividend and equity distribution payments	(763		)	—			—		(763		)
Change in book overdrafts	(3,049		)	—			—		(3,049		)
Net cash provided by (used in) financing activities	3,535			(3,838		)	—		(303		)
Net change in cash and cash equivalents	—			(959		)	—		(959		)
Cash and cash equivalents at the beginning of period	—			1,161			—		1,161
Cash and cash equivalents at the end of period	$	—		$	202		$	—	$	202