Vanguard Health Systems Reports First Quarter Fiscal 2013 Results

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VANGUARD HEALTH SYSTEMS, INC.
Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except share and per share amounts)
					Quarter ended September 30,
					2011									2012
Patient service revenues					$	1,351.5				94.1	%			$	1,463.9				99.5	%
Less: Provision for doubtful accounts						(126.2	)			(8.8	)				(169.6	)			(11.5	)
Patient service revenues, net						1,225.3				85.3					1,294.3				88.0
Premium revenues						211.0				14.7					176.4				12.0
Total revenues						1,436.3				100.0					1,470.7				100.0
Costs and expenses:
Salaries and benefits (includes stock compensation)						665.0				46.3					680.2				46.3
Health plan claims expense						164.7				11.5					134.3				9.1
Supplies						213.6				14.9					226.1				15.4
Purchased services						127.0				8.8					147.2				10.0
Non-income taxes						34.5				2.4					34.9				2.4
Rents and leases						18.0				1.3					19.0				1.3
Other operating expenses						98.6				6.9					109.3				7.4
Medicare and Medicaid EHR incentives						(3.1	)			(0.2	)				(11.3	)			(0.8	)
Depreciation and amortization						62.6				4.4					65.6				4.5
Interest, net						45.8				3.2					50.8				3.5
Debt extinguishment costs						38.9				2.7					—				—
Acquisition related expenses						12.2				0.8					—				—
Other						(2.4	)			(0.2	)				(5.1	)			(0.3	)
Total costs and expenses						1,475.4				102.7					1,451.0				98.7
Income (loss) from continuing operations before income taxes						(39.1	)			(2.7	)				19.7				1.3
Income tax benefit (expense)						15.2				1.1					(4.9	)			(0.3	)
Income (loss) from continuing operations						(23.9	)			(1.7	)				14.8				1.0
Income (loss) from discontinued operations, net of taxes						(0.1	)			—					0.1				—
Net income (loss)						(24.0	)			(1.7	)				14.9				1.0
Net loss (income) attributable to non-controlling interests						2.3				0.2					(1.0	)			(0.1	)
Net income (loss) attributable to Vanguard Health Systems, Inc. stockholders					$	(21.7	)			(1.5	)%			$	13.9				0.9	%
Earnings (loss) per share attributable to Vanguard Health Systems, Inc. stockholders
Basic earnings (loss) per share					$	(0.29	)							$	0.18
Diluted earnings (loss) per share					$	(0.29	)							$	0.17
Weighted average shares outstanding (in thousands):
Basic						74,854									75,697
Diluted						74,854									78,813

VANGUARD HEALTH SYSTEMS, INC.
Supplemental Financial Information (Unaudited)
Reconciliation of Adjusted EBITDA to Net Income (Loss)
Attributable to Vanguard Health Systems, Inc. Stockholders
(In millions)
					Quarter ended
					September 30,
					2011					2012
Net income (loss) attributable to Vanguard Health Systems, Inc. stockholders					$	(21.7	)			$	13.9
Interest, net						45.8					50.8
Income tax expense (benefit)						(15.2	)				4.9
Depreciation and amortization						62.6					65.6
Non-controlling interests						(2.3	)				1.0
Gain on disposal of assets						(1.2	)				(0.9	)
Equity method income						(0.1	)				(0.6	)
Stock compensation						0.7					2.2
Realized losses on investments						—					0.2
Acquisition related expenses						12.2					—
Debt extinguishment costs						38.9					—
Impairment and restructuring charges						(0.1	)				—
Pension credits						(1.0	)				(3.8	)
Discontinued operations, net of taxes						0.1					(0.1	)
Adjusted EBITDA (1)					$	118.7				$	133.2

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