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8-K - FORM 8-K - VANGUARD HEALTH SYSTEMS INCd292347d8k.htm
EX-99.1 - EX-99.1 - VANGUARD HEALTH SYSTEMS INCd292347dex991.htm
EX-99.2 - EX-99.2 - VANGUARD HEALTH SYSTEMS INCd292347dex992.htm

EXHIBIT 99.3

VANGUARD HEALTH SYSTEMS, INC.

Calculation of Certain Financial Covenants under Senior Secured Credit Agreement

December 31, 2011

 

($ presented in millions)

   Trailing
twelve
     
     months ended
December 31,
2011
     

Interest Coverage Ratio:

    

Adjusted EBITDA(1)

   $ 515.4    

Add: Pro Forma adjustments for fiscal 2012 acquisition

     22.7    

Add: Equity method cash distributions received

     2.3    

Less: Non-controlling interest distributions paid

     (3.5  

Add: Franchise tax expense

     0.2    

Add: Gross interest income recognized

     2.4    

Add: Capitalized interest recorded

     4.7    
  

 

 

   

Consolidated EBITDA, as defined in senior secured credit agreement

   $ 544.2     A

Net interest

   $ 190.3    

Add: Capitalized interest recorded

     4.7    

Less: Non-cash accretion of senior discount and senior unsecured notes

     (26.9  

Less: Non-cash amortization of financing costs

     (7.0  

Less: Interest related to specified construction projects

     (8.1  
  

 

 

   

Consolidated cash interest expense, as defined in senior secured credit agreement

   $ 153.0     B

Interest coverage ratio (A/B)

     3.56     x
  

 

 

   

Minimum interest coverage ratio required as of December 31, 2011

     2.10     x
  

 

 

   

 

     As of
December 31,
2011
     

Leverage Ratio:

    

Term debt and senior notes outstanding

   $ 2,329.5    

Less: Cash and cash equivalents

     (178.7  

Less: Restricted cash

     (8.8  

Less: Debt incurred to fund specified construction projects

     (113.4  
  

 

 

   

Consolidated debt, as defined in senior secured credit agreement

   $ 2,028.6     C

Consolidated EBITDA, as defined in senior secured credit agreement

   $ 544.2     A

Leverage ratio (C/A)

     3.73     x
  

 

 

   

Maximum leverage ratio allowed as of December 31, 2011

     5.95     x
  

 

 

   


VANGUARD HEALTH SYSTEMS, INC.

Calculation of Certain Financial Covenants under Senior Secured Credit Agreement

December 31, 2011

(continued)

 

 

(1) Adjusted EBITDA is defined as income before interest expense (net of interest income), income taxes, depreciation and amortization, non-controlling interests, gain or loss on disposal of assets, equity method income, stock compensation, monitoring fees and expenses, realized gains or losses on investments, debt extinguishment costs, acquisition related expenses, impairment and restructuring charges, pension expense (credits) and discontinued operations, net of taxes. Adjusted EBITDA is not intended 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. Due to varying methods of calculation, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. The following table provides a reconciliation of Adjusted EBITDA to net loss attributable to Vanguard Health Systems, Inc. stockholders during the trailing twelve months ended December 31, 2011 (in millions).

 

September 30, September 30, September 30, September 30,
              Add:      Less:     

Trailing

twelve

 
        Six months
ended
December 31,
2011
     Year
ended
June 30,
2011
     Six months
ended
December 31,
2010
     months
ended
December 31,
2011
 

Net loss attributable to Vanguard Health Systems, Inc. stockholders

     $ (7.1    $ (10.9    $ (3.8    $ (14.2

Interest, net

       89.0        171.2        69.9        190.3  

Income tax expense (benefit)

       (4.6      9.3        7.3        (2.6

Depreciation and amortization

       128.4        193.8        75.8        246.4  

Non-controlling interests

       (1.5      3.6        1.8        0.3  

Loss (gain) on disposal of assets

       (0.8      (0.2      0.1        (1.1

Equity method income

       (0.7      (0.9      (0.5      (1.1

Stock compensation

       4.6        4.8        2.9        6.5  

Monitoring fees and expenses

       —           31.3        2.5        28.8  

Realized gains on investments

       —           (1.3      —           (1.3

Debt extinguishment costs

       38.9        —           —           38.9  

Acquisition related expenses

       12.6        12.5        5.0        20.1  

Impairment and restructuring charges

       (0.1      6.0        0.9        5.0  

Pension credits

       (2.6      (2.1      —           (4.7

Discontinued operations, net of taxes

       0.4        5.9        2.2        4.1  
    

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

     $ 256.5      $ 423.0      $ 164.1      $ 515.4