Accretive Health Reports Third Quarter 2012 Financial Results

  Accretive Health Reports Third Quarter 2012 Financial Results

  *New Quality and Total Cost of Care Agreement with Cancer Clinics of
    Excellence
  *PCARR, as of today, $907 million to $925 million
  *Non-GAAP adjusted net income of $6.2 million; GAAP net income of $2.8
    million
  *Non-GAAP adjusted EBITDA of $15.4 million

Business Wire

CHICAGO -- November 07, 2012

Accretive Health, Inc. (NYSE: AH), today reported financial results for the
quarter ended September 30, 2012.

Highlights for Third Quarter 2012

  *New Quality and Total Cost of Care Agreement with Cancer Clinics of
    Excellence.
  *PCARR, as of today, $907 million to $925 million.
  *Net services revenue of $223.1 million as compared to $218.9 million in
    the third quarter of 2011.
  *Net income of $2.8 million as compared to $7.3 million in the third
    quarter of 2011.
  *Diluted earnings per share of $0.03 as compared to $0.07 in the third
    quarter of 2011.
  *Non-GAAP adjusted EBITDA of $15.4 million as compared to $21.7 million in
    the third quarter of 2011.
  *Non-GAAP adjusted diluted earnings per share of $0.06 as compared to $0.11
    in the third quarter of 2011.

Mary Tolan, Accretive Health's Founder and Chief Executive Officer, said, “We
recently announced our strategic relationship with Cancer Centers of
Excellence to develop an innovative end-to-end oncology care management
offering focused on enabling their member physician practices to deliver
better outcomes for patients while containing costs. We are delighted to
partner with a leading healthcare organization in this innovative effort.”

“The expansion of our service offerings with the launch of our new Intra-Stay
Quality solution, and the signing of the inaugural client, creates a strategic
collaboration that will enable our client to improve the overall patient
experience and the quality of care while reducing inefficiencies and
redundancies in healthcare costs.”

“PCARR, our projected contracted annual revenue run rate, increased by 26
percent at the end of the third quarter of 2012 compared with the third
quarter of 2011, excluding PCARR associated with terminated client contracts
associated with our litigation settlement in Minnesota in July of this year.
Going forward our pipeline is strong and we are currently in conversations
with several large health systems. We believe this is a clear indication that
healthcare innovators recognize the value we can contribute toward helping
them fulfill their missions of bringing quality and affordable care to the
communities they serve.”

Factors Impacting the Quarter

The following matters collectively had a negative impact of $8.2 million on
the Company’s earnings in the third quarter of 2012 as compared to the third
quarter of 2011.

  *Lost operating margin and stranded personnel costs arising from the
    Minnesota litigation settlement and resulting contract terminations
    aggregated $7.2 million
  *Direct legal defense and crisis management costs resulting from litigation
    aggregated $1.0 million, net of estimated insurance recoveries.

Financial Review

Third Quarter 2012

Net services revenue for the third quarter of 2012 grew by 1.9% to $223.1
million, an increase of $4.2 million over the third quarter of 2011.

  *Net base fee revenue was $180.8 million for the third quarter of 2012, an
    increase of $3.5 million over the third quarter of 2011.
  *Incentive revenue was $27.4 million during the third quarter of 2012, a
    decrease of $2.4 million over the third quarter of 2011.
  *Other services revenue was $15.0 million for the third quarter of 2012, an
    increase of $3.1 million over the third quarter of 2011.

Operating margin for the third quarter of 2012 was $46.2 million compared with
$49.0 million for the third quarter of 2011.

Infused management and technology expense for the third quarter of 2012 was
$21.9 million, or 9.8% of net services revenue, compared with $21.3 million,
or 9.7% of net services revenue, for the third quarter of 2011. Selling,
general and administrative expenses were $17.8 million for the third quarter
of 2012, or 8.0% of net services revenue, compared with $15.5 million, or 7.1%
of net services revenue, for the third quarter of 2011.

Net income for the third quarter of 2012 was $2.8 million, compared with $7.3
million in the third quarter of 2011. After adjusting for non-cash employee
stock-based compensation expenses on an after-tax basis, non-GAAP adjusted net
income for the third quarter of 2012 was $6.2 million, compared with
$11.7million in the third quarter of 2011. Non-GAAP adjusted net income per
diluted common share was $0.06 for the third quarter of 2012, a decrease of
45% over the non-GAAP adjusted net income per diluted common share of $0.11 in
the third quarter of 2011.

Non-GAAP adjusted EBITDA for the third quarter of 2012 was $15.4million,
compared with $21.7 million for the third quarter of 2011, a decrease of $6.3
million.

Operating cash flow for the three months and nine months ended September 30,
2012 amounted to $15.6million and $21.8 million, respectively, compared with
operating cash flow of $31.1 million and $2.7 million, respectively for the
same period of 2011. For the nine months ended September 30, 2012, free cash
flow, defined as operating cash flow less capital expenditures and the
acquisition of software, totaled $2.8 million, compared with use of cash of
$6.4 million for the same period last year.

The Company repurchased $13.2 million of shares of its common stock during the
three months ended September 30, 2012 as part of the $50 million share
repurchase program announced on September 4, 2012. At September 30, 2012,
Accretive Health's balance sheet remained strong with a total cash balance of
$196.4 million.

Fiscal Year 2012 Guidance

The Company maintains the prior guidance range for non-GAAP adjusted EBITDA in
the range of $50 million to $55 million, and currently estimates adjusted
EBITDA to be at the midpoint of this range. The Company expects net services
revenue to be at the low end of the range of $948 million to $980 million. The
Company estimates PCARR as of December 31, 2012 to be in the range of $930
million to $960 million.

Reflected in the $50 million to $55 million non-GAAP adjusted EBITDA guidance
for 2012 are costs related to the Minnesota litigation settlement amounting to
$14.6 million and $8.2 million in the second and third quarters of 2012,
respectively. Also reflected in the guidance is an anticipated $7 million to
$10million impact on non-GAAP adjusted EBITDA for the fourth quarter of 2012
due to:

  *Lost operating margin, and stranded personnel costs associated with
    terminated contracts related to the Minnesota litigation settlement;
  *Direct legal defense and crisis management costs resulting from the
    Minnesota litigation settlement; and
  *One-time $4.0 million to $6.0 million of seasonal incentive revenues that
    are anticipated to be recorded in the first quarter of 2013 instead of the
    fourth quarter of 2012 due to elimination of seasonal effects in the
    incentive revenue measurement provisions of the new Ascension Health
    master professional services agreement announced in August of this year.

Finally, the Company estimates non-GAAP adjusted diluted earnings per share
for the year ending December 31, 2012, to be at the midpoint of the range of
$0.23 to $0.27.

Mary Tolan, Accretive Health's Founder and Chief Executive Officer, added,
“With the Minnesota settlement behind us, we have focused our attention on
growing our customer base and delivering on the superior execution we are best
known for. We are regaining momentum across our businesses and positioning the
company for solid growth in 2013.”

Conference Call

Accretive Health's management will host a conference call today at 7:30 a.m.
CDT (8:30 a.m. EDT) to discuss its third quarter 2012 results and business
outlook. To participate, please dial 800-215-2410 (617-597-5410 for
international calls) using conference code No. 22641868, or visit the Investor
Relations section of Accretive Health's web site at www.accretivehealth.com to
access the live webcast. A replay will be available for one week following the
conference call at 888-286-8010 (617-801-6888 for international calls) using
conference code No. 84883235. A replay of the conference call will also be
available online at www.accretivehealth.com.

About Accretive Health

Accretive Health partners with healthcare providers to help them more
effectively manage their revenue cycles, strengthen their financial stability,
and improve the quality of care they provide while reducing overall healthcare
costs.Our people, processes and sophisticated integrated technology
complement our clients' existing resources to enhance results for patients,
physicians and staff. For more information, please visit
www.accretivehealth.com.

Safe Harbor

This document contains forward-looking statements, including statements
regarding Accretive Health’s expectations for future financial and operational
performance, expected growth, new services, profitability or business outlook,
our new master professional services agreement with Ascension Health and the
effects of the ongoing investigations of our operating practices being
conducted by various parties, all of which involve risks and uncertainties.
Our actual results and outcomes could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including
our ability to retain existing customers and attract new ones, our ability to
enter into new supplement agreements with hospitals affiliated with Ascension
Health, the effects of the ongoing investigations of our operating practices
being conducted by various parties, our responses to these investigations and
the impact of the Company’s settlement agreement with the Minnesota Attorney
General, securities-related class action and derivative lawsuits filed against
us and certain of our officers and directors, follow-on investigations and
inquiries by government authorities, other litigation matters, and those set
forth in our Quarterly Report on Form 10-Q for the quarter ended June 30,
2012, filed with the SEC on August 9, 2012, under the heading "Risk Factors".
The words “strive,” “objective,” "anticipates," "believes," "estimates,"
"expects," "intends," "may," "plans," "projects," "would," “will,” and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. We have based
these forward-looking statements on our current expectations and projections
about future events. Although we believe that the expectations underlying any
of our forward-looking statements are reasonable, these expectations may prove
to be incorrect and all of these statements are subject to risks and
uncertainties. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions, projections, or expectations
prove incorrect, actual results, performance, financial condition, or events
may vary materially and adversely from those anticipated, estimated, or
expected.

All forward-looking statements included in this report are expressly qualified
in their entirety by the foregoing cautionary statements. We wish to caution
readers not to place undue reliance on any forward-looking statement that
speaks only as of the date made and to recognize that forward-looking
statements are predictions of future results, which may not occur as
anticipated. Actual results could differ materially from those anticipated in
the forward-looking statements and from historical results, due to the
uncertainties and factors described above, as well as others that we may
consider immaterial or do not anticipate at this time. Although we believe
that the expectations reflected in our forward-looking statements are
reasonable, we do not know whether our expectations will prove correct. Our
expectations reflected in our forward-looking statements can be affected by
inaccurate assumptions we might make or by known or unknown uncertainties and
factors, including those described above. The risks and uncertainties
described above are not exclusive, and further information concerning us and
our business, including factors that potentially could materially affect our
financial results or condition or relationships with customers and potential
customers, may emerge from time to time. We assume no, and we specifically
disclaim any, obligation to update, amend, or clarify forward-looking
statements to reflect actual results or changes in factors or assumptions
affecting such forward-looking statements. We advise you, however, to consult
any further disclosures we make on related subjects in our periodic reports
that we file with or furnish to the U.S. Securities and Exchange Commission.

Accretive Health, Inc.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
                                                
                   Three Months Ended              Nine Months Ended
                   September 30,                   September 30,
                   2012           2011            2012           2011
                   
                   (In thousands, except share and per share amounts)
Net services       $   223,134     $   218,893     $   713,563     $   566,194
revenue (1)
Costs of           176,971        169,898        577,378        435,969
services
Operating margin   46,163          48,995          136,185         130,225
Other operating
expenses:
Infused
management and     21,919          21,285          72,986          62,027
technology
Selling, general
and                17,835         15,482         55,754         42,340
administrative
Total operating    39,754          36,767          128,740         104,367
expenses
Income from        6,409           12,228          7,445           25,858
operations
Interest income    (1          )   5              —              20
(loss), net
Net income
before provision   6,408           12,233          7,445           25,878
for income taxes
Provision for      3,653          4,963          3,775          9,895
income taxes
Net income         $   2,755      $   7,270      $   3,670      $   15,983
Net income per
common share
Basic              $   0.03        $   0.07        $   0.04        $   0.17
Diluted            0.03            0.07            0.04            0.16
Weighted average
shares used in
calculating net
income per
common share
Basic              99,397,054      97,793,262      99,225,678      96,525,150
Diluted            100,845,362     101,868,888     101,729,349     100,912,803
                                                                   
Comprehensive      $   2,920      $   6,857      3,730          15,464
income
                                                                   
Other operating
and Non-GAAP       As of September 30,
financial data
                   2012            2011
Projected
contracted
annual revenue
run-rate
Net base fees
for managed        $718 to $721    $675 to $678
service
contracts
Incentive
payments for       $108 to $120    $126 to $140
managed service
contracts
Other services     $63 to $65      $53 to $56
Total Projected
contracted         $889 to $906    $854 to $874
annual revenue
run-rate
                                                                   

(1) The components of net services revenue were:

                                                    
                           Three Months Ended          Nine Months Ended
                           September 30,               September 30,
                           2012         2011          2012         2011
                           (In thousands, except share and per share amounts)
Net base fees for
managed service            $ 180,760     $ 177,274     $ 590,180     $ 468,118
contracts
Incentive payments for
managed service            27,372        29,738        78,837        72,969
contracts
Other services             15,002       11,881       44,546       25,107
Net services revenue       $ 223,134    $ 218,893    $ 713,563    $ 566,194
                                                                       

Accretive Health, Inc.
Condensed Consolidated Balance Sheets

                                    September 30,          December 31,
                                     2012                    2011
                                     (Unaudited)
                                     (In thousands, except share and per share
                                     amounts)
ASSETS
Current assets:
Cash and cash equivalents            $    196,375            $   196,725
Accounts receivable, net of
allowance for doubtful accounts of
$4,745 and $3,191 at September 30,   136,695                 94,105
2012 and December 31, 2011,
respectively
Prepaid taxes                        4,976                   6,026
Prepaid assets                       8,833                   4,004
Due from related party               1,303                   1,294
Other current assets                 4,594                  3,432         
Total current assets                 352,776                 305,586
Deferred income taxes                23,866                  17,878
Furniture and equipment, net         35,654                  25,073
Restricted cash                      5,000                   5,000
Goodwill                             1,468                   1,468
Other, net                           10,226                 9,187         
Total assets                         $    428,990           $   364,192   
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable                     $    43,395             $   15,210
Accrued service costs                72,821                  48,889
Accrued compensation and benefits    3,090                   15,763
Deferred income taxes                7,224                   3,738
Other accrued expenses               12,720                  6,979
Accrued income taxes                 197                     153
Deferred revenue                     18,285                 24,137        
Total current liabilities            157,732                 114,869
Non-current liabilities:
Deferred revenue                     7,737                   7,055
Other non-current liabilities        5,492                  4,179         
Total non-current liabilities        13,229                 11,234        
Total liabilities                    $    170,961           $   126,103   
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value,
5,000,000 shares authorized, no
shares issued and outstanding at     —                       —
September 30, 2012 and December
31, 2011
Common stock, $0.01 par value,
500,000,000 shares authorized,
99,811,598 shares issued and
98,653,873 shares outstanding at     998                     987
September 30, 2012; 98,701,161
shares issued and 98,686,357
shares outstanding at December 31,
2011
Additional paid-in capital           256,707                 227,188
Retained earnings                    15,000                  11,330
Cumulative translation adjustment    (977            )       (1,037        )
Treasury stock (1,157,725 shares
and 14,804 shares of common stock
held in treasury at September 30,    (13,699         )       (379          )
2012 and December 31, 2011,
respectively.
Total stockholders' equity           258,029                238,089       
Total liabilities and                $    428,990           $   364,192   
stockholders’ equity
                                                                           


Accretive Health, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)

                                                    Nine Months Ended
                                                     September 30,
                                                     2012         2011
                                                     (In thousands)
Operating activities:
Net income                                           $ 3,670       $ 15,983
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization                        8,397         6,276
Employee stock based compensation                    19,736        18,681
Deferred income taxes                                (2,545    )   —
Excess tax benefits from equity-based awards         (3,300    )   (16,874   )
Changes in operating assets and liabilities:
Accounts receivable                                  (42,587   )   (52,838   )
Prepaid taxes                                        4,374         13,367
Prepaid and other assets                             (7,291    )   (1,234    )
Accounts payable                                     28,179        (3,198    )
Accrued service costs                                23,932        25,755
Accrued compensation and benefits                    (12,676   )   (3,335    )
Other accrued expenses                               5,713         2,677
Accrued income taxes                                 38            —
Other liabilities                                    1,304         114
Deferred revenue                                     (5,170    )   (2,707    )
Net cash provided by operating activities            21,774       2,667     
Investing activities:
Purchases of furniture and equipment                 (11,169   )   (5,248    )
Acquisition of software                              (7,764    )   (3,769    )
Collection of note receivable                        318          1,650     
Net cash used in investing activities                (18,615   )   (7,367    )
Financing activities:
Proceeds from issuance of common stock from stock    6,494         15,039
option exercises
Collection of non-executive employees' notes         —             41
receivable
Excess tax benefit from equity-based awards          3,300         16,874
Purchase of treasury stock                           (13,160   )   —
Other financing activities                           (160      )   (379      )
Net cash provided by (used in) financing             (3,526    )   31,575    
activities
Effect of exchange rate changes on cash              17           (354      )
Net increase (decrease) in cash and cash             (350      )   26,521
equivalents
Cash and cash equivalents at beginning of period     196,725      155,573   
Cash and cash equivalents at end of period           $ 196,375    $ 182,094 
                                                                             

Explanation of Operational Metrics

We define Projected Contracted Annual Revenue Run-Rate (PCARR) as the expected
total net services revenue for the subsequent twelve months for all healthcare
providers for which we are providing services that are under contract. We
believe that our Projected Contracted Annual Revenue Run-Rate is a useful
measure of our overall business volume at a particular point in time and of
changes in the volume of business over time because it eliminates the time
impact associated with the signing of new contracts during a quarterly or
annual period.

PCARR is calculated by accumulating our estimates of the next twelve months’
base fees, cost saving sharing credits and incentive payments for each
contract in place at the reporting date. Our base fee estimate is based on the
contractual agreement with each customer relating to the services that we will
provide and the costs that the customer was incurring for completing such
activities prior to entering into its agreement with us. Our estimates for
cost sharing credits and incentive payments are based on the Company’s prior
experiences regarding the level of cost reductions and increases in net
revenue yield and its management’s experience regarding potential reductions
in total medical cost for a defined patient population, which are likely to be
earned during each year a contract is in place given the level of infused
management as well as the degree to which we have implemented our technology.
We update these estimates regularly to incorporate changes in activities under
management for a specific contract, and changes in our overall experience with
our portfolio of contracts. There were no significant changes in our overall
assumptions used in the calculation of PCARR as of September30, 2012 as
compared to prior periods.

Substantially all of our contracts have “evergreen” provisions that extend the
term of our services automatically unless the customer provides notification
of non-renewal. Therefore, unless a notice of non-renewal has been received,
our PCARR calculation assumes that each contract in place at the reporting
date will continue for at least the next twelve months. In the event that we
receive a non-renewal notice from a customer, we reduce the PCARR calculation
by the amount associated with that specific contract for any periods after the
contract’s then current end date. At September30, 2012, PCARR includes
approximately $53 million related to periods subject to assumed contract
extensions.

PCARR is not a projection of expected revenues for specific future periods
because any such projection would also need to include the additional revenue
resulting from any future contracts signed with new customers subsequent to
the reporting date. Further, actual future revenues from existing customers
may differ from the projected amounts used for purposes of calculating PCARR
because the scope of services provided to existing customers may change and
the incentive fees we earn may be more or less than we estimate depending on
our ability to achieve projected increases in our customers’ net revenue yield
and projected reductions in total medical cost of the customers’ patient
population.

We define the contracting phase of our sales process as the final stage when
we have reached general agreement with the potential customer on scope,
business terms and conditions under which our services will be provided and
the written contract is in the process of being negotiated and finalized for
execution.

Explanation and Use of Non-GAAP Financial Measures

To provide investors with greater insight and a better understanding of how
our management and board of directors analyze our financial performance and
make operational decisions, we supplement our consolidated financial
statements that are presented on a GAAP basis in this press release with the
following non-GAAP financial measures: adjusted EBITDA, adjusted net income,
and adjusted net income per diluted common share.

These non-GAAP financial measures should not be considered in isolation; they
are in addition to, and are not a substitution, for financial performance
measures under GAAP. These non-GAAP financial measures may be different from
non-GAAP measures used by other companies. Further, we may utilize other
measures to illustrate performance in the future. Non-GAAP measures have
limitations since they do not reflect all of the amounts associated with the
Company's results of operations as determined in accordance with GAAP.

We define non-GAAP adjusted EBITDA as net income (loss)before net interest
income (expense), income tax expense (benefit), depreciation and amortization
expense and share based compensation expense. We define non-GAAP adjusted net
income as net income (loss)before share based compensation expense, net of
the estimated tax impact of such expense. We define non-GAAP adjusted net
income per diluted common share as non-GAAP adjusted net income applicable to
common shareholders divided by the weighted average fully diluted common
shares outstanding during the period as computed in accordance with GAAP.

We use non-GAAP adjusted EBITDA:

  *as a measure of operating performance, because it does not include the
    impact of items that we do not consider indicative of our core operating
    performance;
  *for planning purposes, including the preparation of our annual operating
    budget;
  *to allocate resources to enhance the financial performance of our
    business;
  *to evaluate the effectiveness of our business strategies; and
  *in communications with our board of directors and investors concerning our
    financial performance.

We believe that non-GAAP adjusted EBITDA, non-GAAP adjusted net income, and
non-GAAP adjusted net income per diluted common share are useful to investors
in evaluating our operating performance for the following reasons:

  *these and similar non-GAAP measures are widely used by investors to
    measure a company's operating performance without regard to items that can
    vary substantially from company to company depending upon financing and
    accounting methods, book values of assets, capital structures and the
    methods by which assets were acquired;
  *securities analysts often use these and similar non-GAAP measures as
    supplemental measures to evaluate the overall operating performance of
    companies; and
  *by comparing our non-GAAP adjusted EBITDA in different historical periods,
    our investors can evaluate our operating results without the additional
    variations of interest income (expense), income tax expense (benefit),
    depreciation and amortization expense and share-based compensation
    expense.

We understand that, although measures similar to non-GAAP adjusted EBITDA and
non-GAAP adjusted net income are frequently used by investors and securities
analysts in their evaluation of companies, these measures have limitations as
an analytical tool, and you should not consider them in isolation or as a
substitute for analysis of our results of operations as reported under GAAP.
Some of the limitations of these specific non-GAAP financial measures are:

  *non-GAAP adjusted EBITDA does not reflect our cash expenditures or future
    requirements for capital expenditures or other contractual commitments;
  *non-GAAP adjusted EBITDA does not reflect changes in, or cash requirements
    for, our working capital needs;
  *non-GAAP adjusted EBITDA and non-GAAP adjusted net income do not reflect
    share-based compensation expense;
  *non-GAAP adjusted EBITDA does not reflect cash requirements for income
    taxes; and
  *non-GAAP adjusted EBITDA does not reflect net interest income (expense).

Non-GAAP Adjusted EBITDA

The following table presents a reconciliation of non-GAAP adjusted EBITDA to
net income, the most comparable GAAP measure (unaudited; in thousands):

                                                    
                             Three Months Ended        Nine Months Ended
                             September 30,             September 30,
                             2012        2011         2012        2011
Net income                   $ 2,755      $ 7,270      $ 3,670      $ 15,983
Net interest income (loss)   1            (5       )   —            (20      )
(a)
Provision for income taxes   3,653        4,963        3,775        9,895
Depreciation and             3,319       2,162       8,397       6,276    
amortization expense
EBITDA                       $ 9,728      $ 14,390     $ 15,842     $ 32,134
Stock compensation expense   5,714       7,343       19,736      18,681   
Non-GAAP Adjusted EBITDA     $ 15,442    $ 21,733    $ 35,578    $ 50,815 
                                                                             

(a) Net interest income represents earnings from our cash and cash
equivalents. No debt or other interest-bearing obligations were outstanding
during any of the periods presented.

Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Net Income per Diluted
Common Share

The following table presents a reconciliation of non-GAAP adjusted net income
to net income, the most comparable GAAP measure, details how we calculate
non-GAAP adjusted net income per diluted common share, and reconciles non-GAAP
adjusted net income per diluted common share to fully diluted earnings per
common share, the most comparable GAAP measure (unaudited; in thousands,
except share and per share amounts):

                                                
                   Three Months Ended              Nine Months Ended
                   September 30,                   September 30,
                   2012           2011            2012           2011
Non-GAAP
Adjusted Net
Income
GAAP net income    $   2,755       $   7,270       $   3,670       $   15,983
per common share
Add: Stock
compensation       5,714           7,343           19,736          18,681
expense
Less: Tax impact
of stock           2,286          2,937          7,894          7,472
compensation
expense (a)
Adjusted net       $   6,183      $   11,676     $   15,512     $   27,192
income
                                                                   
Weighted average
common shares,     100,845,362     101,868,888     101,729,349     100,912,803
diluted
                                                                
Non-GAAP
adjusted net
income per         $   0.06       $   0.11       $   0.15       $   0.27
diluted common
share
                                                                       

                                                          
                                       Three Months Ended    Nine Months Ended
                                       September 30,         September 30,
                                       2012      2011       2012      2011
Non-GAAP Adjusted Net Income per
Diluted Share
GAAP fully diluted earnings per        $ 0.03     $ 0.07     $ 0.04     $ 0.16
common share
Add: Stock compensation expense        0.06       0.07       0.19       0.19
Less: Tax impact of stock              0.03      0.03      0.08      0.08
compensation expense (a)
Non GAAP adjusted net income per       $ 0.06    $ 0.11    $ 0.15    $ 0.27
diluted share
                                                                          

(a) Tax impact calculated using a tax rate of 40% which excludes the impact of
state taxes on gross receipts and other adjustments.

Contact:

Accretive Health, Inc.
For investors:
Atif Rahim, 312-324-5476
SVP, Investor Relations and Business Development
investorrelations@accretivehealth.com
For media:
Christina Dokos, 312-324-5415
SVP, Chief Marketing Officer
cdokos@accretivehealth.com
 
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