Universal Health Services, Inc. Reports Financial Results For Three And Nine Months Ended September 30, 2012 And Revises 2012

 Universal Health Services, Inc. Reports Financial Results For Three And Nine
     Months Ended September 30, 2012 And Revises 2012 Full Year Guidance

PR Newswire

KING OF PRUSSIA, Pa., Oct. 30, 2012

KING OF PRUSSIA, Pa., Oct. 30, 2012 /PRNewswire/ --

Consolidated Results of Operations, As Reported – Three and nine-month periods
ended September 30, 2012 and 2011:
Universal Health Services, Inc. (NYSE: UHS) announced today that its reported
net income attributable to UHS was $71.8 million, or $.73 per diluted share,
during the third quarter of 2012 as compared to $85.1 million, or $.86 per
diluted share, during the comparable quarter of 2011. Net revenues increased
1% to $1.68 billion during the third quarter of 2012 as compared to $1.66
billion during the third quarter of 2011.

Reported net income attributable to UHS was $308.0 million, or $3.15 per
diluted share, during the first nine months of 2012 as compared to $302.9
million, or $3.06 per diluted share, during the comparable period of 2011.
Net revenues increased 2% to $5.20 billion during the first nine months of
2012 as compared to $5.10 billion during the comparable period of 2011.

Consolidated Results of Operations, As Adjusted – Three and nine-month periods
ended September 30, 2012 and 2011:
For the three-month period ended September 30, 2012, our adjusted net income
attributable to UHS, as calculated on the attached Schedule of Non-GAAP
Supplemental Consolidated Statements of Income Information ("Supplemental
Schedule"), was $88.6 million, or $.91 per diluted share. There were no such
adjustments required to our reported net income attributable to UHS for the
third quarter of 2011.

As reflected on the Supplemental Schedule, included in our reported results
during the third quarter of 2012, was an aggregate net unfavorable after-tax
impact of $16.8 million, or $.18 per diluted share, consisting of: (i) an
after-tax charge of $18.1 million ($29.2 million pre-tax), or $.19 per diluted
share, resulting from the write-off of deferred financing costs related to the
portion of our Term Loan B credit facility that was extinguished during the
third quarter of 2012, and; (ii) a favorable after-tax impact of approximately
$1.3 million, or $.01 per diluted share, related to the incentive income and
expenses recorded in connection with the implementation of electronic health
records ("EHR") applications at our acute care hospitals (as discussed below
in Accounting for HITECH Act incentive income and EHR expenses).

For the nine-month period ended September 30, 2012, our adjusted net income
attributable to UHS, as calculated on the attached Supplemental Schedule, was
$308.4 million, or $3.15 per diluted share. There were no such adjustments
required to our reported net income attributable to UHS for the first nine
months of 2011.

As reflected on the Supplemental Schedule, included in our reported results
during the first nine months of 2012 was a net aggregate favorable after-tax
impact of approximately $400,000 consisting of the following:

  oan unfavorable after-tax charge of approximately $3.6 million recorded in
    connection with the implementation of EHR applications as discussed below
    in Accounting for HITECH Act incentive income and EHR expenses;
  oa favorable after-tax impact of $18.8 million resulting from an aggregate
    cash payment of approximately $36 million received by us in connection an
    agreement entered into with the United States Department of Health and
    Human Services, the Secretary of Health and Human Services, and the
    Centers for Medicare and Medicaid Services (referred to collectively as
    "HHS"). After reductions for estimated related expenses and the portion
    attributable to third-party non-controlling ownership interests, this
    agreement, which was part of an industry-wide settlement with HHS related
    to litigation that was pending for several years contending that acute
    care hospitals in the U.S. were underpaid from the Medicare inpatient
    prospective payment system during a number of prior years, favorably
    impacted our pre-tax consolidated financial results by $30.2 million
    during the first quarter of 2012;
  oa favorable after-tax impact of $4.3 million recorded during the first
    quarter of 2012 representing the 2011 portion of the net Medicaid
    supplemental reimbursements earned pursuant to the Oklahoma Supplemental
    Hospital Offset Payment Program ("SHOPP");
  oan aggregate unfavorable after-tax impact of $5.1 million recorded during
    the first quarter of 2012 resulting from: (i) the revised Supplemental
    Security Income ratios utilized for calculating Medicare disproportionate
    share hospital reimbursements for federal fiscal years 2006 through 2009
    ($2.4 million unfavorable after-tax impact), and; (ii) the write-off of
    receivables related to revenues recorded during 2011 at two of our acute
    care hospitals located in Florida resulting from reductions in certain
    county reimbursements due to reductions in federal matching
    Inter-Governmental Transfer funds ($2.7 million unfavorable after-tax
    impact);
  oa net favorable after-tax impact of $3.4 million consisting primarily of
    the 2011 portion of net Medicaid supplemental revenues recorded during the
    second quarter of 2012, and;
  oan unfavorable after-tax charge of $18.1 million resulting from the
    above-mentioned write-off of deferred financing costs related to the
    portion of our Term Loan B credit facility that was extinguished during
    the third quarter of 2012.

Acute Care Services – Three and nine-month periods ended September 30, 2012
and 2011:
During the third quarter of 2012, at our acute care hospitals owned during
both periods ("same facility basis"), adjusted admissions (adjusted for
outpatient activity) decreased 1.7% and adjusted patient days decreased 1.0%,
as compared to the third quarter of 2011. Net revenues at these facilities
decreased 0.4% during the third quarter of 2012 as compared to the comparable
quarter of the prior year. At these facilities, net revenue per adjusted
admission increased 1.3% while net revenue per adjusted patient day increased
0.6% during the third quarter of 2012 as compared to the comparable quarter of
the prior year. On a same facility basis, the operating margin at our acute
care hospitals decreased to 13.4% during the third quarter of 2012 as compared
to 14.8% during the third quarter of 2011. We define operating margin as net
revenues less salaries, wages and benefits, other operating expenses and
supplies expense (excluding the impact of the items mentioned above and
excluding the EHR impact, as indicated on the Supplemental Schedule).

During the first nine months of 2012, at our acute care hospitals on a same
facility basis, adjusted admissions decreased 0.3% and adjusted patient days
increased 0.3%, as compared to the comparable nine-month period of 2011. Net
revenues at these facilities decreased 0.5% during the first nine months of
2012 as compared to the comparable period of 2011. At these facilities, net
revenue per adjusted admission decreased 0.2% while net revenue per adjusted
patient day decreased 0.7% during the first nine months of 2012, as compared
to the comparable period of 2011. On a same facility basis, the operating
margin at our acute care hospitals decreased to 16.2% during the first nine
months of 2012, as compared to 17.8% during the comparable nine-month period
of 2011.

We provide care to patients who meet certain financial or economic criteria
without charge or at amounts substantially less than our established rates.
Because we do not pursue collection of amounts determined to qualify as
charity care, they are not reported in net revenues or in accounts receivable,
net. Our acute care hospitals provided charity care and uninsured discounts,
based on charges at established rates, amounting to $259 million and $246
million during the three-month periods ended September 30, 2012 and 2011,
respectively, and $840 million and $708 million during the nine-month periods
ended September 30, 2012 and 2011, respectively.

Behavioral Health Care Services – Three and nine-month periods ended September
30, 2012 and 2011:
During the third quarter of 2012, at our behavioral health care facilities on
a same facility basis, adjusted admissions increased 2.6% while adjusted
patient days increased 0.7%, as compared to the third quarter of 2011. Net
revenues at these facilities increased 3.4% during the third quarter of 2012,
as compared to the comparable quarter in 2011. At these facilities, net
revenue per adjusted admission increased 0.7% while net revenue per adjusted
patient day increased 2.6% during the third quarter of 2012 over the
comparable quarter in 2011. The operating margin at our behavioral health care
facilities owned during both periods increased to 27.8% during the third
quarter of 2012, as compared to 26.5% during the third quarter of 2011.

During the first nine months of 2012, at our behavioral health care facilities
on a same facility basis, adjusted admissions increased 5.0% while adjusted
patient days increased 1.2%, as compared to the comparable period of 2011. Net
revenues at these facilities increased 4.2% during the first nine months of
2012, as compared to the comparable period of 2011. At these facilities, net
revenue per adjusted admission decreased 0.7% while net revenue per adjusted
patient day increased 2.9% during the first nine months of 2012 over the
comparable period of 2011. The operating margin at our behavioral health care
facilities owned during both periods increased to 27.8% during the first nine
months of 2012, as compared to 26.7% during the comparable period of 2011.

Accounting for HITECH Act incentive income and EHR expenses:
The health information technology provisions of the American Recovery and
Reinvestment Act (referred to as the "HITECH Act") established criteria
related to the "meaningful use" of electronic health records ("EHR") for acute
care hospitals and established requirements for the Medicare and Medicaid EHR
payment incentive programs. 

During 2011, we began implementing EHR applications at certain of our acute
care hospitals and will continue to do so, on a hospital-by-hospital basis,
until completion which is scheduled to occur by the end of June, 2013. As of
September 30, 2012, EHR applications have been implemented at eleven of our
acute care hospitals, the majority of which occurred during the second and
third quarters of 2012. Our acute care hospitals will be eligible for
Medicare and Medicaid EHR incentive payments upon implementation of the EHR
application, assuming they meet the "meaningful use" criteria. Eight
hospitals met the "meaningful use" criteria during the first nine months of
2012 and one additional hospital may qualify by the end of 2012.

As reflected on the Supplemental Schedule, our consolidated results of
operations for the three-month period ended September 30, 2012 includes the
favorable after-tax impact of approximately $1.3 million, or $.01 per diluted
share, recorded in connection with the implementation of EHR applications.
This favorable impact, which on a pre-tax basis amounted to $2.2 million, net
of $1.1 million attributable to third-party, non-controlling ownership
interests, consists of $10.6 million of EHR incentive income offset by $2.8
million of salaries, wages, benefits and other operating expenses and $4.5
million of depreciation and amortization expense. The EHR incentive income
recorded during the third quarter of 2012 consists of state Medicaid EHR
incentive payments attributable to seven acute care hospitals that met the
"meaningful use" criteria during the quarter.

As reflected on the Supplemental Schedule, our consolidated results of
operations for the nine-month period ended September 30, 2012 includes an
after-tax charge of approximately $3.6 million, or $.04 per diluted share,
recorded in connection with the implementation of EHR applications. This
charge, which on a pre-tax basis amounted to $5.9 million, net of $800,000
attributable to third-party, non-controlling ownership interests, consists of
$12.5 million of EHR incentive income offset by $11.1 million of salaries,
wages, benefits and other operating expenses and $8.1 million of depreciation
and amortization expense.

Revised 2012 Full Year Guidance:
The operating trends and financial results experienced by our behavioral
health facilities met our expectations during the first nine months of 2012.
However, against the backdrop of a continued sluggish economic recovery, the
operating trends and financial results experienced by our acute care hospitals
were below our expectations for the third quarter of 2012 and those trends are
expected to continue during the fourth quarter of this year. Based upon our
consolidated financial results experienced during the first nine months of
2012, and most notably the results experienced by our acute care hospitals
during the third quarter of 2012, our revised estimated range of adjusted net
income attributable to UHS, for the year ended December 31, 2012 is $4.00 to
$4.10 per diluted share. This revised guidance, which excludes the favorable
EHR impact mentioned above and the impact of the other items reflected on the
Supplemental Schedule for the nine months ended September 30, 2012, represents
a decrease of approximately 6% from the previously provided range of $4.25 to
$4.35 per diluted share. 

This guidance range also excludes the impact of future items, if applicable,
that are nonrecurring or non-operational in nature including items such as,
but not limited to, gains on sales of assets and businesses, reserves for
settlements, legal judgments and lawsuits and other material amounts that may
be reflected in our financial statements that relate to prior periods. It is
also subject to certain conditions including those as set forth below in
General Information, Forward-Looking Statements and Risk Factors and Non-GAAP
Financial Measures.

The operating pressures that we continue to experience in many of our acute
care markets has increased the volatility of the financial results of our
acute care hospitals making estimation of future results more challenging.
However, we continue to actively and aggressively respond to these challenges
through strategic initiatives and operational enhancements such as physician
recruitment and integration and implementation of expense controls and other
operating efficiencies.

Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. Eastern
Time on October 31, 2012. The dial-in number is 1-877-648-7971.

A live broadcast of the conference call will be available on our website at
www.uhsinc.com. A replay of the call will follow shortly after conclusion of
the live call and will be available for one full year.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP
Financial Measures:
Universal Health Services, Inc. ("UHS") is one of the nation's largest
hospital companies, operating acute care and behavioral health hospitals and
ambulatory centers nationwide and in Puerto Rico and the U.S. Virgin Islands.
It acts as the advisor to Universal Health Realty Income Trust, a real estate
investment trust (NYSE:UHT). For additional information on the Company, visit
our web site: http://www.uhsinc.com.

This press release contains forward-looking statements based on current
management expectations. Numerous factors, including those disclosed herein,
those related to healthcare industry trends and those detailed in our filings
with the Securities and Exchange Commission (as set forth in Item 1A-Risk
Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form
10-K for the year ended December 31, 2011 and in Item 2-Forward-Looking
Statements and Risk Factors in our Form 10-Q for the quarterly period ended
June 30, 2012), may cause the results to differ materially from those
anticipated in the forward-looking statements. Many of the factors that will
determine our future results are beyond our capability to control or predict.
These statements are subject to risks and uncertainties and therefore actual
results may differ materially. Readers should not place undue reliance on
such forward-looking statements which reflect management's view only as of the
date hereof. We undertake no obligation to revise or update any
forward-looking statements, or to make any other forward-looking statements,
whether as a result of new information, future events or otherwise.

During the first quarter of 2012, we adopted the Financial Accounting
Standards Board's Accounting Standards Update No.2011-07, "Health Care
Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue,
Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain
Health Care Entities," which required health care entities to change the
presentation in their statement of operations by reclassifying the provision
for bad debts associated with patient service revenue from an operating
expense to a deduction from patient service revenue (net of contractual
allowances and discounts). As a result, the provision for doubtful accounts
for our acute care and behavioral health care facilities is reflected as a
deduction for net revenues in the accompanying consolidated statements of
income for the three and nine-month periods ended September 30, 2012 and 2011.
The adoption of this standard had no impact on our financial position or
results of operations.

As mentioned above, our acute care hospitals may qualify for EHR incentive
payments upon implementation of an EHR application assuming they meet the
"meaningful use" criteria. However, there can be no assurance that we (our
acute care hospitals) will ultimately qualify for these incentive payments
and, should we qualify, we are unable to quantify the amount of incentive
payments we may receive since the amounts are dependent upon various factors
including the implementation timing at each hospital. Should we qualify for
incentive payments, there may be timing differences in the recognition of the
incentive income and expenses recorded in connection with the implementation
of the EHR application which may cause material period-to-period changes in
our future results of operations. Hospitals that do not qualify as a
meaningful user of EHR by 2015 are subject to a reduced market basket update
to the inpatient prospective payment system standardized amount in 2015 and
each subsequent fiscal year. Although we believe that our acute care hospitals
will be in compliance with the EHR standards by 2015, there can be no
assurance that all of our facilities will be in compliance and therefore not
subject to the penalty provision of the HITECH Act.

We believe that operating income, operating margin, adjusted net income
attributable to UHS, adjusted net income attributable to UHS per diluted share
and earnings before interest, taxes, depreciation and amortization ("EBITDA"),
which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting
Principles in the United States of America), are helpful to our investors as
measures of our operating performance. In addition, we believe that, when
applicable, comparing and discussing our financial results based on these
measures, as calculated, is helpful to our investors since it neutralizes the
effect in each year of items that are nonrecurring or non-operational in
nature including items such as, but not limited to, costs related to
extinguishment of debt, gains on sales of assets and businesses, reserves for
settlements, legal judgments and lawsuits and other amounts that may be
reflected in the current or prior year financial statements that relate to
prior periods. To obtain a complete understanding of our financial
performance these measures should be examined in connection with net income,
determined in accordance with GAAP, as presented in the condensed consolidated
financial statements and notes thereto in this report or in our other filings
with the Securities and Exchange Commission including our Report on Form 10-K
for the year ended December 31, 2011 and Report on Form 10-Q for the quarterly
period ended June 30, 2012. Since the items included or excluded from these
measures are significant components in understanding and assessing financial
performance under GAAP, these measures should not be considered to be
alternatives to net income as a measure of our operating performance or
profitability. Since these measures, as presented, are not determined in
accordance with GAAP and are thus susceptible to varying calculations, they
may not be comparable to other similarly titled measures of other companies.
Investors are encouraged to use GAAP measures when evaluating our financial
performance.

(more)

Universal Health Services, Inc.
Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
                                Three months            Nine months
                                ended September 30,     ended September 30,
                                2012        2011        2012        2011
Net revenues before provision   $1,869,263  $1,814,686  $5,718,676  $5,553,268
for doubtful accounts
 Less: Provision for doubtful  188,910     152,011     522,203     456,042
accounts
Net revenues                    1,680,353   1,662,675   5,196,473   5,097,226
Operating charges:
 Salaries, wages and benefits 838,075     828,606     2,565,052   2,492,570
 Other operating expenses     362,687     343,873     1,059,048   1,030,492
 Supplies expense             191,747     198,794     594,924     603,657
 EHR incentive income         (10,551)    -           (12,506)    -
 Depreciation and             77,032      73,170      221,807     213,828
amortization
 Lease and rental expense     23,481      22,704      70,906      68,501
 Costs related to             29,170      -           29,170      -
extinguishment of debt
                                1,511,641   1,467,147   4,528,401   4,409,048
Income from operations          168,712     195,528     668,072     688,178
Interest expense, net           45,207      48,452      137,805     154,677
Income before income taxes      123,505     147,076     530,267     533,501
Provision for income taxes      42,132      52,234      188,880     192,638
Net income                      81,373      94,842      341,387     340,863
Less: Income attributable to
noncontrolling interests        9,556       9,788       33,402      37,967
Net income attributable to UHS  $71,817     $85,054     $307,985    $302,896
Basic earnings per share        $0.74       $0.87       $3.18       $3.10
attributable to UHS (a)
Diluted earnings per share      $0.73       $0.86       $3.15       $3.06
attributable to UHS (a)



Universal Health Services, Inc.
Footnotes to Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
                                      Three months         Nine months
                                      ended September 30,  ended September 30,
                                      2012       2011      2012       2011
(a) Earnings per share calculation:
Basic and diluted:
Net income attributable to UHS        $71,817    $85,054   $307,985   $302,896
Less: Net income attributable to      (85)       (165)     (379)      (440)
unvested restricted share grants
Net income attributable to UHS -      $71,732    $84,889   $307,606   $302,456
basic and diluted
Weighted average number of common     96,817     97,397    96,701     97,447
shares - basic
Basic earnings per share attributable $0.74      $0.87     $3.18      $3.10
to UHS:
Weighted average number of common     96,817     97,397    96,701     97,447
shares
Add: Other share equivalents          794        1,201     1,010      1,461
Weighted average number of common     97,611     98,598    97,711     98,908
shares and equiv. - diluted
Diluted earnings per share            $0.73      $0.86     $3.15      $3.06
attributable to UHS:



Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Consolidated Statements of Income
Information ("Supplemental Schedule")
For the three months ended September 30, 2012 and 2011
(in thousands, except per share amounts)
(unaudited)
Calculation of "EBITDA"
                                      Three months ended   Three months ended
                                      September 30, 2012   September 30, 2011
Net revenues before provision for     $1,869,263           $1,814,686
doubtful accounts
 Less: Provision for doubtful        188,910              152,011
accounts
Net revenues                          1,680,353   100.0%   1,662,675   100.0%
Operating charges:
 Salaries, wages and benefits       838,075     49.9%    828,606     49.8%
 Other operating expenses           362,687     21.6%    343,873     20.7%
 Supplies expense                   191,747     11.4%    198,794     12.0%
 EHR incentive income               (10,551)    -0.6%    -           0.0%
                                      1,381,958   82.2%    1,371,273   82.5%
Operating income/margin ("EBITDAR")   298,395     17.8%    291,402     17.5%
 Lease and rental expense           23,481               22,704
 Income attributable to             9,556                9,788
noncontrolling interests
Earnings before, depreciation and
amortization, interest expense, and   265,358     15.8%    258,910     15.6%
income taxes ("EBITDA")
 Depreciation and amortization      77,032               73,170
 Costs related to extinguishment of 29,170               -
debt
 Interest expense, net              45,207               48,452
Income before income taxes           113,949              137,288
Provision for income taxes            42,132               52,234
Net income attributable to UHS        $71,817              $85,054
Calculation of Adjusted Net Income Attributable to UHS
                                      Three months ended   Three months ended
                                      September 30, 2012   September 30, 2011
                                                  Per                  Per
                                      Amount      Diluted  Amount      Diluted
                                                  Share                Share
Calculation of Adjusted Net Income
Attributable to UHS - including and
excluding EHR impact:
Net income attributable to UHS        $71,817     $0.73    $85,054     $0.86
Plus/minus adjustments:
 Costs related to extinguishment of  18,126      0.19
debt, net of income taxes
Adjusted net income attributable to
UHS - including Electronic Health     $89,943     $0.92    $85,054     $0.86
Records ("EHR") impact
Plus/minus impact of EHR
implementation:
EHR-related incentive income, pre-tax (10,551)
EHR-related salaries, wages and       2,779
benefits, pre-tax
EHR-related other operating costs,    (82)
pre-tax
EHR-related depreciation &            4,575
amortization, pre-tax
EHR-related minority interest in
earnings of consolidated entities,    1,122
pre-tax
Income tax provision on EHR-related   817
items
After-tax impact of EHR-related items (1,340)     (0.01)   -           -
Adjusted net income attributable to   $88,603     $0.91    $85,054     $0.86
UHS



Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Consolidated Statements of Income
Information ("Supplemental Schedule")
For the nine months ended September 30, 2012 and 2011
(in thousands, except per share amounts)
(unaudited)
Calculation of "EBITDA"
                                      Nine months ended    Nine months ended
                                      September 30, 2012   September 30, 2011
Net revenues before provision for     $5,718,676           $5,553,268
doubtful accounts
 Less: Provision for doubtful        522,203              456,042
accounts
Net revenues                          5,196,473   100.0%   5,097,226   100.0%
Operating charges:
 Salaries, wages and benefits       2,565,052   49.4%    2,492,570   48.9%
 Other operating expenses           1,059,048   20.4%    1,030,492   20.2%
 Supplies expense                   594,924     11.4%    603,657     11.8%
 EHR incentive income               (12,506)    -0.2%    -           0.0%
                                      4,206,518   80.9%    4,126,719   81.0%
Operating income/margin ("EBITDAR")   989,955     19.1%    970,507     19.0%
 Lease and rental expense           70,906               68,501
 Income attributable to             33,402               37,967
noncontrolling interests
Earnings before, depreciation and
amortization, interest expense, and   885,647     17.0%    864,039     17.0%
income taxes ("EBITDA")
 Depreciation and amortization      221,807              213,828
 Costs related to extinguishment of 29,170               -
debt
 Interest expense, net              137,805              154,677
Income before income taxes           496,865              495,534
Provision for income taxes            188,880              192,638
Net income attributable to UHS        $307,985             $302,896
Calculation of Adjusted Net Income Attributable to UHS
                                      Nine months ended    Nine months ended
                                      September 30, 2012   September 30, 2011
                                                  Per                  Per
                                      Amount      Diluted  Amount      Diluted
                                                  Share                Share
Calculation of Adjusted Net Income
Attributable to UHS - including and
excluding EHR impact:
Net income attributable to UHS        $307,985    $3.15    $302,896    $3.06
Plus/minus adjustments:
 Medicare Rural Floor settlement,    (18,753)
net of income taxes
 Oklahoma SHOPP Medicaid
reimbursements related to prior       (4,329)
years, net of income taxes
 Impact of revised SSI ratios and
write-off Florida county receivables, 5,149
net of income taxes
 Net Medicaid reimbursements related (3,417)
to prior years, net of income taxes
 Costs related to extinguishment of  18,126
debt, net of income taxes
Subtotal after-tax adjustments to net (3,224)     (0.03)   -           -
income attributable to UHS
Adjusted net income attributable to
UHS - including Electronic Health     $304,761    $3.12    $302,896    $3.06
Records ("EHR") impact
Plus/minus impact of EHR
implementation:
EHR-related incentive income, pre-tax (12,506)
EHR-related salaries, wages and       10,722
benefits, pre-tax
EHR-related other operating costs,    314
pre-tax
EHR-related depreciation &            8,102
amortization, pre-tax
EHR-related minority interest in
earnings of consolidated entities,    (775)
pre-tax
Income tax provision on EHR-related   (2,217)
items
After-tax impact of EHR-related items 3,640       0.03     -           -
Adjusted net income attributable to   $308,401    $3.15    $302,896    $3.06
UHS



Universal Health Services, Inc.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
                                      Three months         Nine months
                                      ended September 30,  ended September 30,
                                      2012       2011      2012       2011
Net income                            $81,373    $94,842   $341,387   $340,863
Other comprehensive income (loss):
 Unrealized derivative gains (loss) (45)       (21,360)  1,782      (39,636)
on cash flow hedges
 Amortization of terminated hedge   (84)       (84)      (252)      (252)
Other comprehensive (loss) income     (129)      (21,444)  1,530      (39,888)
before tax
Income tax (benefit) expense related
to items of other comprehensive       (47)       (8,214)   585        (15,270)
income (loss)
Total other comprehensive (loss)      (82)       (13,230)  945        (24,618)
income, net of tax
Comprehensive income                  81,291     81,612    342,332    316,245
Less: Comprehensive income
attributable to noncontrolling        9,556      9,788     33,402     37,967
interests
Comprehensive income attributable to  $71,735    $71,824   $308,930   $278,278
UHS



Universal Health Services, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                September 30,    December 31,
                                                2012             2011
Assets
Current assets:
 Cash and cash equivalents                 $ 25,652         $ 41,229
 Accounts receivable, net                    1,042,535        969,802
 Supplies                                    97,013           96,775
 Deferred income taxes                       123,131          108,324
 Other current assets                        93,022           99,859
 Assets of facilities held for sale          107,071          48,916
 Total current assets                  1,488,424        1,364,905
Property and equipment                          5,240,909        5,106,160
Less: accumulated depreciation                  (1,924,833)      (1,818,180)
                                                3,316,076        3,287,980
Other assets:
 Goodwill                                    2,594,740        2,627,602
 Deferred charges                            87,092           111,780
 Other                                       294,734          272,978
                                              $ 7,781,066      $ 7,665,245
Liabilities and Stockholders' Equity
Current liabilities:
 Current maturities of long-term debt      $ 2,499          $ 2,479
 Accounts payable and accrued liabilities    810,963          832,125
 Federal and state taxes                     6,774            -
 Liabilities of facilities held for sale     18,112           2,329
 Total current liabilities             838,348          836,933
Other noncurrent liabilities                    408,535          401,908
Long-term debt                                  3,440,962        3,651,428
Deferred income taxes                           195,692          209,592
Redeemable noncontrolling interest              234,056          218,266
UHS common stockholders' equity                 2,608,782        2,296,352
Noncontrolling interest                         54,691           50,766
 Total equity                          2,663,473        2,347,118
                                              $ 7,781,066      $ 7,665,245



Universal Health Services, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                                        Nine months
                                                        ended September 30,
                                                        2012         2011
Cash Flows from Operating Activities:
 Net income                                            $341,387     $340,863
 Adjustments to reconcile net income to net
 cash provided by operating activities:
 Depreciation & amortization                          227,641      220,208
 (Gain) loss on sale of assets                        (945)        164
 Stock-based compensation expense                     16,189       13,434
 Costs related to extinguishment of debt             29,170       -
 Changes in assets & liabilities, net of effects from
 acquisitions and dispositions:
 Accounts receivable                                 (86,821)     (103,700)
Accrued interest                                    11,901       13,143
 Accrued and deferred income taxes                  (260)        102,949
 Other working capital accounts                     (42,916)     (74,342)
 Other assets and deferred charges                   25,959       20,215
 Other                                              5,833        4,146
 Accrued insurance expense, net of commercial        66,752       71,186
premiums paid
 Payments made in settlement of self-insurance       (58,884)     (45,764)
claims
 Net cash provided by operating activities     535,006      562,502
Cash Flows from Investing Activities:
 Property and equipment additions, net of disposals   (282,191)    (195,404)
 Proceeds received from sale of assets and businesses 56,194       23,682
 Acquisition of property and businesses               (25,092)     (8,599)
 Costs incurred for purchase and implementation of    (41,854)     (27,874)
electronic health records application
 Return of deposit on terminated purchase agreement   6,500        -
 Net cash used in investing activities         (286,443)    (208,195)
Cash Flows from Financing Activities:
 Reduction of long-term debt                          (1,127,829)  (267,539)
 Additional borrowings                                906,000      36,000
 Financing costs                                      (8,257)      (23,559)
 Repurchase of common shares                          (9,676)      (44,532)
 Dividends paid                                       (14,519)     (14,638)
 Issuance of common stock                             3,828        3,596
 Profit distributions to noncontrolling interests     (13,687)     (33,962)
 Net cash used in financing activities         (264,140)    (344,634)
(Decrease) increase in cash and cash equivalents        (15,577)     9,673
Cash and cash equivalents, beginning of period          41,229       29,474
Cash and cash equivalents, end of period                $25,652      $39,147
Supplemental Disclosures of Cash Flow Information:
 Interest paid                                         $104,560     $120,712
 Income taxes paid, net of refunds                     $187,899     $89,268



                             Universal Health Services, Inc.
                             Supplemental Statistical Information
                              
                              (un-audited)
                                            % Change  % Change
                                            Quarter     9 months
                                            Ended       ended
Same Facility:                              9/30/2012   9/30/2012
Acute Care Hospitals
Revenues                                    -0.4%       -0.5%
Adjusted Admissions                         -1.7%       -0.3%
Adjusted Patient Days                       -1.0%       0.3%
Revenue Per Adjusted                        1.3%        -0.2%
Admission
Revenue Per Adjusted                        0.6%        -0.7%
Patient Day
Behavioral Health
Hospitals
Revenues                                    3.4%        4.2%
Adjusted Admissions                         2.6%        5.0%
Adjusted Patient Days                       0.7%        1.2%
Revenue Per Adjusted                        0.7%        -0.7%
Admission
Revenue Per Adjusted                        2.6%        2.9%
Patient Day
UHS Consolidated              Third Quarter Ended       Nine months Ended
                              9/30/2012     9/30/2011   9/30/2012   9/30/2011
Revenues                      $1,680,353    $1,662,675  $5,196,473  $5,097,226
EBITDA (1)                  265,358       258,910     885,647     864,039
EBITDA Margin (1)             15.8%         15.6%       17.0%       17.0%
Cash Flow From Operations     162,144       206,726     535,006     562,502
Days Sales Outstanding        57            51          55          50
Capital Expenditures        99,840        79,164      282,191     195,404
Debt                                                   3,443,461   3,687,741
Shareholders Equity                                     2,608,782   2,221,382
Debt / Total                                            56.9%       62.4%
Capitalization
Debt / EBITDA (2)                                      2.96        3.42
Debt / Cash From                                        4.99        5.55
Operations (2)
Acute Care EBITDAR            13.4%         14.8%       16.2%       17.8%
Margin (3)
Behavioral Health EBITDAR     27.8%         26.5%       27.8%       26.7%
Margin (3)
(1) Net of Minority
Interest
(2) Latest 4 quarters
(3) Before Corporate overhead allocation and minority interest. Before
Adjustments shown on the Supplemental Schedule



    UNIVERSAL HEALTH SERVICES, INC.
    SELECTED HOSPITAL STATISTICS
    FOR THE THREE MONTHS ENDED
    SEPTEMBER 30, 2012 AND 2011
    AS REPORTED:
                        ACUTE (1)                     BEHAVIORAL HEALTH
                        09/30/12   09/30/11   %      09/30/12   09/30/11   %
                                              change                        change
    Hospitals owned     25         25         0.0%    175        178        -1.7%
    and leased
    Average licensed    5,704      5,739      -0.6%   19,177     19,372     -1.0%
    beds
    Patient days        273,361    279,322    -2.1%   1,289,975  1,291,753  -0.1%
    Average daily       2,971.3    3,036.1    -2.1%   14,021.5   14,040.8   -0.1%
    census
    Occupancy-licensed  52.1%      52.9%      -1.5%   73.1%      72.5%      0.9%
    beds
    Admissions          61,521     63,305     -2.8%   91,520     89,951     1.7%
    Length of stay      4.4        4.4        0.7%    14.1       14.4       -1.8%
    Inpatient revenue   $3,013,482 $2,827,617 6.6%    $1,410,170 $1,368,405 3.1%
    Outpatient revenue  1,517,261  1,384,084  9.6%    151,788    146,836    3.4%
    Total patient       4,530,743  4,211,701  7.6%    1,561,958  1,515,241  3.1%
    revenue
    Other revenue       25,006     19,884     25.8%   36,303     35,581     2.0%
    Gross hospital      4,555,749  4,231,585  7.7%    1,598,261  1,550,822  3.1%
    revenue
    Total deductions    3,560,780  3,265,466  9.0%    734,266    707,287    3.8%
    Net hospital
    revenue before
     provision for     $994,969   $966,119   3.0%    $863,995   $843,535   2.4%
    doubtful accounts
    Provision for       $166,570   $134,344   24.0%   $22,326    $17,710    26.1%
    doubtful accounts
    Net hospital        828,399    831,775    -0.4%   841,669    825,825    1.9%
    revenue
    SAME FACILITY:
                        ACUTE (1)                    BEHAVIORAL HEALTH (2)(3)
                        09/30/12   09/30/11   %      09/30/12   09/30/11   %
                                              change                        change
    Hospitals owned     24         24         0.0%    171        171        0.0%
    and leased
    Average licensed    5,545      5,580      -0.6%   19,010     18,960     0.3%
    beds
    Patient days        265,043    270,314    -2.0%   1,278,478  1,266,518  0.9%
    Average daily       2,880.9    2,938.2    -2.0%   13,896.5   13,766.5   0.9%
    census
    Occupancy-licensed  52.0%      52.7%      -1.3%   73.1%      72.6%      0.7%
    beds
    Admissions          59,643     61,229     -2.6%   90,415     87,895     2.9%
    Length of stay      4.4        4.4        0.7%    14.1       14.4       -1.9%
(1) Auburn is excluded in both current and prior years. Hospital count previously
    reflected number of licenses
    we have revised to reflect number of
    hospitals.
(2) King George School, Marion, Pennsylvania Clinical School, and San Juan
    Capestrano
    are excluded in both current and prior
    years.
(3) Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group
    Homes and the Peaks
    are excluded in both current and prior
    years
    UNIVERSAL HEALTH SERVICES, INC.
    SELECTED HOSPITAL STATISTICS
    FOR THE NINE MONTHS ENDED
    SEPTEMBER 30, 2012 AND 2011
    AS REPORTED:
                        ACUTE (1)                     BEHAVIORAL HEALTH
                        09/30/12   09/30/11   %      09/30/12   09/30/11   %
                                              change                        change
    Hospitals owned     25         25         0.0%    175        178
    and leased
    Average licensed    5,703      5,713      -0.2%   19,152     19,390     -1.2%
    beds
    Patient days        852,588    872,943    -2.3%   3,905,070  3,913,151  -0.2%
    Average daily       3,111.6    3,197.6    -2.7%   14,252.1   14,333.9   -0.6%
    census
    Occupancy-licensed  54.6%      56.0%      -2.5%   74.4%      73.9%      0.7%
    beds
    Admissions          189,886    195,818    -3.0%   279,231    270,042    3.4%
    Length of stay      4.5        4.5        0.7%    14.0       14.5       -3.5%
    Inpatient revenue   $9,326,344 $8,934,701 4.4%    $4,242,528 $4,154,117 2.1%
    Outpatient revenue  4,606,680  4,068,566  13.2%   474,623    453,652    4.6%
    Total patient       13,933,024 13,003,267 7.2%    4,717,151  4,607,769  2.4%
    revenue
    Other revenue       68,827     55,620     23.7%   109,273    105,102    4.0%
    Gross hospital      14,001,851 13,058,887 7.2%    4,826,424  4,712,871  2.4%
    revenue
    Total deductions    10,947,246 10,073,372 8.7%    2,188,024  2,162,038  1.2%
    Net hospital
    revenue before
     provision for     $3,054,605 $2,985,515 2.3%    $2,638,400 $2,550,833 3.4%
    doubtful accounts
    Provision for       $456,078   $398,445   14.5%   $66,144    $57,497    15.0%
    doubtful accounts
    Net hospital        2,598,527  2,587,070  0.4%    2,572,256  2,493,336  3.2%
    revenue
    SAME FACILITY:
                        ACUTE(1)                     BEHAVIORAL HEALTH (2)(3)
                        09/30/12   09/30/11   %      09/30/12   09/30/11   %
                                              change                        change
    Hospitals owned     24         24         0.0%    171        171        0.0%
    and leased
    Average licensed    5,544      5,554      -0.2%   18,977     18,901     0.4%
    beds
    Patient days        825,781    845,672    -2.4%   3,871,182  3,826,941  1.2%
    Average daily       3,013.8    3,097.7    -2.7%   14,128.4   14,018.1   0.8%
    census
    Occupancy-licensed  54.4%      55.8%      -2.5%   74.5%      74.2%      0.4%
    beds
    Admissions          184,021    189,456    -2.9%   276,105    263,293    4.9%
    Length of stay      4.5        4.5        0.5%    14.0       14.5       -3.5%
(1) Auburn is excluded in both current and prior years. Hospital count previously
    reflected number of licenses
    we have revised to reflect number of
    hospitals.
(2) King George School, Marion, Pennsylvania Clinical School, and San Juan
    Capestrano
    are excluded in both current and prior
    years.
(3) Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group
    Homes and the Peaks
    are excluded in both current and prior
    years



SOURCE Universal Health Services, Inc.

Website: http://www.uhsinc.com
Contact: Steve Filton, Chief Financial Officer, +1-610-768-3300
 
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