Vanguard Health Systems (VHS) 8-K/A Financial Statements and Exhibits

Exhibit 99.2

VANGUARD HEALTH SYSTEMS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     Effective August 1, 2010, certain subsidiaries of Vanguard Health Systems, Inc. (“Vanguard”) acquired the property, plant and equipment and certain other current assets and current liabilities of West Suburban Medical Center and Westlake Hospital and related outpatient and ancillary businesses (collectively the “Resurrection Facilities”) from affiliates of Resurrection Health Care Corporation.

     The following unaudited pro forma condensed combined financial information with respect to Vanguard is based on the historical consolidated financial statements of Vanguard and reflects the effects of Vanguard’s acquisition of the Resurrection Facilities. Set forth below are the following unaudited pro forma condensed combined financial statements:

• The unaudited pro forma condensed combined balance sheet as of June 30, 2010, assuming the acquisition of the Resurrection Facilities occurred on June 30, 2010;

• The unaudited pro forma condensed combined statement of operations for the year ended June 30, 2010, assuming the acquisition of the Resurrection Facilities occurred as of July 1, 2009.

     The unaudited pro forma condensed combined financial information is presented for informational purposes only, is based on certain assumptions that management believes are reasonable and does not purport to represent Vanguard’s financial condition or its results of operations had the acquisition of the Resurrection Facilities occurred on or as of the dates noted above or to project the results for any future date or period. The unaudited pro forma condensed combined financial information does not reflect operational changes that may be implemented by Vanguard and could be different than final amounts recorded upon completion of Vanguard’s assessment of the fair value of current assets acquired or current liabilities assumed. However, management does not believe that adjustments recorded as a result of the fair value assessments would have a material effect on the pro forma balance sheet or pro forma statement of operations presented herein. In the opinion of management, all adjustments have been made that are necessary to present fairly the unaudited pro forma condensed combined financial information.

     The unaudited pro forma condensed combined financial information should be read in conjunction with the consolidated financial statements and related notes of Vanguard and the information set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Vanguard’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010 (File No. 333-71934) and Vanguard’s Periodic Report on Form 10-Q for the three months ended September 30, 2010 (File No. 333-71934) and the audited combined financial statements of the Resurrection Facilities included as Exhibit 99.1 in this Current Report on Form 8-K/A.

VANGUARD HEALTH SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of June 30, 2010

	Historical						Pro Forma			Pro Forma
				Resurrection			Acquisition			Vanguard
	Vanguard			Facilities			Adjustments			Combined
	(dollars in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	257.6		$	3.0		$	(48.4	) (a)	$	212.2
Restricted cash		2.3			—			—			2.3
Patient accounts receivable, net of allowance for doubtful accounts		270.4			20.7			(9.4	) (b)		281.7
Inventories		49.6			2.3			0.3	(c)		52.2
Prepaid expenses and other current assets		141.1			3.7			1.8	(d)		146.6
Total current assets		721.0			29.7			(55.7	)		695.0
Property, plant and equipment, net of accumulated depreciation		1,203.8			27.2			7.3	(e)		1,238.3
Goodwill		649.1			—			—			649.1
Intangible assets		66.0			—			—			66.0
Other assets		89.7			3.5			(1.9	) (f)		91.3
Total assets	$	2,729.6		$	60.4		$	(50.3	)	$	2,739.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	194.8		$	5.6		$	(2.9	) (g)	$	197.5
Accrued health plan claims		149.8			—			—			149.8
Other accrued expenses and current liabilities		263.2			241.5			(234.1	) (h)		270.6
Current maturities of long-term debt		8.2			—			—			8.2
Total current liabilities		616.0			247.1			(237.0	)		626.1
Long-term debt, less current maturities		1,743.8			—			—			1,743.8
Other liabilities		115.2			69.4			(69.4	) (i)		115.2
Commitments and contingencies
Equity:
Vanguard Health Systems, Inc. stockholders’ equity:
Common stock		—			—			—			—
Additional paid-in capital		354.9			—			—			354.9
Accumulated other comprehensive loss		(2.5	)		—			—			(2.5	)
Retained deficit		(105.9	)		—			—			(105.9	)
Total Vanguard Health Systems, Inc. stockholders’ equity		246.5			—			—			246.5
Divisional net deficit		—			(256.1	)		256.1	(j)		—
Non-controlling interests		8.1			—			—			8.1
Total equity		254.6			(256.1	)		256.1			254.6
Total liabilities and equity	$	2,729.6		$	60.4		$	(50.3	)	$	2,739.7

See notes to unaudited pro forma condensed combined balance sheet.

VANGUARD HEALTH SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended June 30, 2010

	Historical						Pro Forma			Pro Forma
				Resurrection			Acquisition			Vanguard
	Vanguard			Facilities			Adjustments			Combined
	(dollars in millions)
Patient service revenues	$	2,537.2		$	284.0		$	—		$	2,821.2
Premium revenues		839.7			—			—			839.7
Revenues		3,376.9			284.0			—			3,660.9
Costs and expenses:
Salaries and benefits (includes stock compensation)		1,296.2			126.5			—			1,422.7
Health plan claims expense		665.8			—			—			665.8
Supplies		456.1			42.5			2.3	(a)		500.9
Provision for doubtful accounts		152.5			28.0			—			180.5
Other operating expenses		483.9			66.1			4.7	(b)		554.7
Depreciation and amortization		139.6			12.3			(9.1	) (c)		142.8
Interest, net		115.5			4.3			(4.3	) (d)		115.5
Management fees		—			30.2			—			30.2
Impairment loss		43.1			84.6	(e)		—			127.7
Debt extinguishment costs		73.5			—			—			73.5
Other		9.1			0.2			—			9.3
Loss from continuing operations before income taxes		(58.4	)		(110.7	)		6.4			(162.7	)
Income tax benefit		13.8			—			48.4	(f)		62.2
Loss from continuing operations		(44.6	)		(110.7	)		54.8			(100.5	)
Loss from discontinued operations, net of taxes		(1.7	)		—			—			(1.7	)
Net loss		(46.3	)		(110.7	)		54.8			(102.2	)
Net income attributable to non-controlling interests		(2.9	)		—			—			(2.9	)
Net loss attributable to Vanguard Health Systems, Inc. stockholders	$	(49.2	)	$	(110.7	)	$	54.8		$	(105.1	)

See notes to unaudited pro forma condensed combined statement of operations.

VANGUARD HEALTH SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
As of June 30, 2010

(a)	To eliminate historical cash of the Resurrection Facilities not included in the acquisition of $3.0 million and to reflect $45.3 million of cash paid at closing.
(b)	To adjust the historical net accounts receivable of the Resurrection Facilities to eliminate those accounts not included in the acquisition and to record the acquired accounts receivable at Vanguard’s estimates of fair value.
(c)	To adjust the historical inventories of the Resurrection Facilities to Vanguard’s estimates of fair value.
(d)	To adjust the working capital settlement to reflect the actual net working capital acquired compared to the amount included in the cash payment made at closing.
(e)	To adjust the historical net property, plant and equipment of the Resurrection Facilities to Vanguard’s estimates of fair value utilizing appraisal information obtained from an independent third party appraiser.
(f)	To adjust the historical equity method investments of the Resurrection Facilities to Vanguard’s estimates of fair value and to eliminate the historical other long-term assets of the Resurrection Facilities not included in the acquisition.
(g)	To eliminate accounts payable of the Resurrection Facilities not acquired by Vanguard.

(h)	To eliminate the historical other accrued expenses and current liabilities of the Resurrection Facilities not included in the acquisition.
(i)	To eliminate the historical other liabilities of the Resurrection Facilities not included in the acquisition.
(j)	To eliminate the historical equity of the Resurrection Facilities.

VANGUARD HEALTH SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
For the year ended June 30, 2010

(a)	To reflect estimated additional sales taxes for supplies that Vanguard would have been required to pay and the elimination of certain pharmacy discounts that Vanguard would not recognize as a for profit healthcare provider.
(b)	To reflect estimated additional property taxes that Vanguard would have been required to pay as a for profit healthcare provider.
(c)	To eliminate the historical depreciation of the Resurrection Facilities of $12.3 million and to record Vanguard’s estimate of annual post-acquisition depreciation of $3.2 million related to these facilities. The post-acquisition estimate was determined using the acquisition date estimated fair values of property, plant and equipment and remaining useful lives by asset class developed using appraisal information.
(d)	To eliminate the historical net interest expense of the Resurrection Facilities related to debt not assumed by Vanguard as part of the acquisition.
(e)	To reflect a fixed asset impairment charge, as determined by the Resurrection Facilities, based upon the sales price of the Resurrection Facilities to Vanguard.
(f)	To reflect the estimated income tax benefit related to the pre-tax operating loss of the Resurrection facilities adjusted to include the impact of the pro forma acquisition adjustments previously described.