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EX-99.2 - EXHIBIT 99.2 - VANGUARD HEALTH SYSTEMS INC | c11955exv99w2.htm |
EX-99.1 - EXHIBIT 99.1 - VANGUARD HEALTH SYSTEMS INC | c11955exv99w1.htm |
EX-99.3 - EXHIBIT 99.3 - VANGUARD HEALTH SYSTEMS INC | c11955exv99w3.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2011 (February 7, 2011)
VANGUARD HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE | 333-71934 | 62-1698183 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
20 Burton Hills Boulevard, Suite 100, Nashville, Tennessee |
37215 |
|
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (615) 665-6000
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 Financial Information
Item 2.02 Results of Operations and Financial Condition.
On February 7, 2011, Vanguard Health Systems, Inc. (the
Company) issued a press release announcing its
operating results for its second fiscal quarter ended
December 31, 2010. For information regarding the
operating results, the Company hereby incorporates by
reference herein the information set forth in its Press
Release dated February 7, 2011, a copy of which is
attached hereto as Exhibit 99.1 (the Earnings
Release).
The Earnings Release contains a non-GAAP financial
measure, Adjusted EBITDA. For purposes of Regulation G,
a non-GAAP financial measure is a numerical measure of a
registrants historical or future financial performance,
financial position or cash flows that excludes amounts,
or is subject to adjustments that have the effect of
excluding amounts, that are included in the most
directly comparable measure calculated and presented in
accordance with GAAP in the statement of operations,
balance sheet or statement of cash flows of the
registrant; or includes amounts, or is subject to
adjustments that have the effect of including amounts,
that are excluded from the most directly comparable
measure so calculated and presented. In this regard,
GAAP refers to generally accepted accounting principles
in the United States. Pursuant to the requirements of
Regulation G, the Company has provided a reconciliation
in the Earnings Release of Adjusted EBITDA to the most
directly comparable GAAP financial measure to Adjusted
EBITDA, net income (loss) attributable to Vanguard
Health Systems, Inc. stockholders.
The Company defines Adjusted EBITDA as income (loss)
before interest expense (net of interest income), income
taxes, depreciation and amortization, non-controlling
interests, gain or loss on the disposal of assets,
equity method income, stock compensation, monitoring
fees and expenses, realized and unrealized gains or
losses on investments, debt extinguishment costs,
acquisition related expenses, impairment losses, pension
expense and discontinued operations, net of taxes.
Monitoring fees and expenses represent fees and
reimbursed expenses paid to affiliates of The Blackstone
Group and Metalmark Subadvisor LLC for advisory and
oversight services. Adjusted EBITDA should not be
considered as a substitute for net income (loss)
attributable to Vanguard Health Systems, Inc.
stockholders, operating cash flows or other cash flow
statement data determined in accordance with accounting
principles generally accepted in the United States.
Adjusted EBITDA, as presented by the Company, may not be
comparable to similarly titled measures of other
companies due to varying methods of calculation.
Further, as additional supplementary financial
disclosures covered by Regulation G, the Company is
hereby providing (1) an EBITDA-related, non-GAAP
financial measure, the Adjusted EBITDA Margin, for
certain completed accounting periods and (2) a
calculation of certain of the financial covenants under
its senior secured credit agreement, for the twelve
months ended December 31, 2010, as well as presenting
the reconciliations required by Regulation G
(collectively, the Supplementary Financial
Information). The Supplementary Financial Information
is attached hereto as Exhibits 99.2 and 99.3 and are
incorporated by reference herein.
Management believes that Adjusted EBITDA and the
Supplementary Financial Information provide useful
information about the Companys financial performance to
investors, lenders, financial analysts and rating
agencies since these groups have historically used
EBITDA-related measures in the healthcare industry,
along with other measures, to estimate the value of a
company, to make informed investment decisions, to
evaluate a companys operating performance compared to
that of other companies in the healthcare industry and
to evaluate a companys leverage capacity and its
ability to meet its debt service. Adjusted EBITDA
eliminates the uneven effect of non-cash depreciation of
tangible assets and amortization of intangible assets,
much of which results from acquisitions accounted for
under the purchase method of accounting. Adjusted EBITDA
also eliminates the effects of changes in interest
rates, which management believes relate to general
trends in global capital markets, but are not
necessarily indicative of a companys operating
performance. Adjusted EBITDA is also used by the
Companys management to measure individual performance
for incentive compensation purposes and as an analytical
indicator for purposes of allocating resources to its
operating businesses and assessing their performance,
both internally and relative to the Companys peers, as
well as being the primary measure used by senior
management to evaluate the operating performance of the
Companys healthcare facilities and their regional and
local management teams.
A limitation of Adjusted EBITDA, however, is that it
does not reflect the periodic cost of certain
capitalized assets that the Company uses to generate its
revenues. The Company evaluates these costs through
other financial measures such as capital expenditures.
Adjusted EBITDA also excludes net interest expense,
which is a significant expense because of the Companys
substantial indebtedness. Despite these limitations,
management believes that Adjusted EBITDA, as an
operating performance measure, and not as a liquidity
measure, provides investors and analysts with a useful
measure of operating results unaffected by differences
in capital structures, capital investment cycles and
ages of related assets among otherwise comparable
companies. Finally, management believes it is useful to
investors to provide them with disclosure of the
Companys operating results using the same key financial
metric as that used by management.
The disclosures in Item 2.02 of this Report and the
Exhibits attached hereto shall be deemed furnished and
not be deemed filed for the purposes of Section 18 of
the Securities Exchange Act of 1934 (the Exchange Act)
or otherwise subject to the liabilities of that section.
The information in Item 2.02 of this Report and the
Exhibits attached hereto may only be incorporated by
reference in another filing under the Exchange Act or
under the Securities Act of 1933, as amended, if such
subsequent filing specifically references and
incorporates the information in Item 2.02 of this Report
or the Exhibits attached hereto.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. | The exhibits filed as part of this Report are listed in the Exhibit Index which is located at the end of this Report. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DATE: February 7, 2011 | VANGUARD HEALTH SYSTEMS, INC. (Registrant) |
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BY: | /s/ Ronald P. Soltman | |||
Ronald P. Soltman | ||||
Executive Vice President, General Counsel & Secretary |
VANGUARD HEALTH SYSTEMS, INC.
EXHIBIT INDEX
EXHIBIT INDEX
Exhibit No. | Description | |||
99.1 | Press Release of Vanguard Health Systems, Inc. dated February 7, 2011
announcing fiscal quarter and year to date December 31, 2010 operating results |
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99.2 | Adjusted EBITDA Margin |
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99.3 | Calculation of Certain Financial Covenants under Senior Secured Credit Agreement |