Universal Health Services, Inc. Reports 2012 Fourth Quarter and Full Year Earnings and 2013 Earnings Guidance Consolidated Results of Operations, As Reported - Three and twelve-month periods ended December 31, 2012 and 2011:

KING OF PRUSSIA, Pa., Feb. 28, 2013 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $135.5 million, or $1.39 per diluted share, during the fourth quarter of 2012 as compared to $95.3 million, or $.98 per diluted share, during the comparable quarter of 2011.  Net revenues increased 6% to $1.76 billion during the fourth quarter of 2012 as compared to $1.66 billion during the fourth quarter of 2011. 

Reported net income attributable to UHS was $443.4 million, or $4.53 per diluted share, during the twelve-month period of 2012 as compared to $398.2 million, or $4.04 per diluted share, during the 2011 full year period.  Net revenues increased 3% to $6.96 billion during the twelve-month period of 2012 as compared to $6.76 billion during the comparable 2011 twelve-month period. 

Consolidated Results of Operations, As Adjusted – Three-month periods ended December 31, 2012 and 2011: 
For the three-month period ended December 31, 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 $98.0 million, or $1.00 per diluted share, as compared to $88.8 million, or $.91 per diluted share, during the fourth quarter of 2011.     

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2012, was an aggregate net favorable after-tax impact of $37.4 million, or $.39 per diluted share, consisting of: (i) a favorable after-tax impact of approximately $15.5 million, or $.16 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2012, based upon a reserve analysis; (ii) a favorable after-tax impact of approximately $16.4 million, or $.17 per diluted share, resulting from the gain realized on the sale of Auburn Regional Medical Center which was divested in October, 2012, and; (iii) a favorable after-tax impact of approximately $5.5 million, or $.06 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). 

As reflected on the attached Supplemental Schedule, included in our net income attributable to UHS during the three-month period ended December 31, 2011, was the favorable after-tax impact of $6.5 million, or $.07 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2011, based upon a reserve analysis.

Consolidated Results of Operations, As Adjusted – Twelve-month periods ended December 31, 2012 and 2011: 
For the twelve-month period ended December 31, 2012, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $406.4 million, or $4.15 per diluted share, as compared to $391.7 million, or $3.97 per diluted share, during the comparable twelve-month period of 2011.    

As reflected on the Supplemental Schedule, included in our reported results during the twelve-month period ended December 31, 2012 was a net favorable aggregate after-tax impact of approximately $37.0 million, or $.38 per diluted share, consisting of the following:

  • a favorable after-tax impact of approximately $15.5 million resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2012, based upon a reserve analysis;
  • a favorable after-tax impact of approximately $16.4 million resulting from the gain realized on the sale of Auburn Regional Medical Center;
  • a favorable after-tax impact of approximately $1.9 million, recorded in connection with the implementation of EHR applications as discussed below in Accounting for HITECH Act incentive income and EHR expenses;
  • a 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 favorably impacted our pre-tax consolidated financial results by $30.2 million during the first quarter of 2012, 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;
  • a 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;
  • an 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);
  • a 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;
  • an unfavorable after-tax charge of $18.1 million 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.

As indicated on the attached Supplemental Schedule, included in our net income attributable to UHS during the year ended December 31, 2011, was the favorable after-tax impact of $6.5 million, or $.07 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2011.

Acute Care Services – Three and twelve-month periods ended December 31, 2012 and 2011: 
During the fourth quarter of 2012, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 1.7% and adjusted patient days increased 1.4%, as compared to the fourth quarter of 2011. Net revenues at these facilities increased 3.1% during the fourth quarter of 2012 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 1.4% while net revenue per adjusted patient day increased 1.7% during the fourth 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 14.4% during the fourth quarter of 2012 as compared to 15.5% during the fourth 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 twelve-months ended December 31, 2012, at our acute care hospitals on a same facility basis, adjusted admissions increased 0.2% and adjusted patient days increased 0.5%, as compared to the comparable twelve-month period of 2011. Net revenues at these facilities increased 0.4% during the full year of 2012 as compared to 2011.  At these facilities, net revenue per adjusted admission increased 0.2% while net revenue per adjusted patient day decreased 0.1% during the twelve month period of 2012, as compared to 2011. The operating margin at our acute care hospitals owned during both years decreased to 15.8% during 2012, as compared to 17.2% during 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 $206 million and $248 million during the three-month periods ended December 31, 2012 and 2011, respectively, and $1.05 billion and $956 million during the twelve-month periods ended December 31, 2012 and 2011, respectively.

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2012 and 2011: 
During the fourth quarter of 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 5.0% while adjusted patient days increased 0.5%, as compared to the fourth quarter of 2011. Net revenues at these facilities increased 4.5% during the fourth quarter of 2012, as compared to the comparable quarter in 2011. At these facilities, net revenue per adjusted admission decreased 0.5% while net revenue per adjusted patient day increased 4.0% during the fourth quarter of 2012 over the comparable quarter in 2011. The operating margin at our behavioral health care facilities owned during both periods increased to 27.6% during the fourth quarter of 2012, as compared to 25.3% during the fourth quarter of 2011. 

During the twelve-months ended December 31, 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 5.0% while adjusted patient days increased 1.0%, as compared to the full year of 2011. Net revenues at these facilities increased 4.3% during the twelve-months of 2012, as compared to the comparable twelve-month period of 2011. At these facilities, net revenue per adjusted admission decreased 0.7% while net revenue per adjusted patient day increased 3.2% during the full year of 2012 over 2011. The operating margin at our behavioral health care facilities owned during both years increased to 27.7% during 2012 as compared to 26.3% during 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 December 31, 2012, EHR applications have been implemented at fourteen of our acute care hospitals. Our acute care hospitals are eligible for Medicare and Medicaid EHR incentive payments upon implementation of the EHR application, assuming they meet the "meaningful use" criteria.  As of December 31, 2012, eleven hospitals met the "meaningful use" criteria.

As reflected on the Supplemental Schedule, our consolidated results of operations for the three-month period ended December 31, 2012 includes the favorable after-tax impact of approximately $5.5 million, or $.06 per diluted share, recorded in connection with the implementation of EHR applications. This favorable impact, which on a pre-tax basis amounted to $8.9 million, consists of $17.5 million of EHR incentive income offset by $3.4 million of salaries, wages, benefits and other operating expenses and $5.2 million of depreciation and amortization expense. 

As reflected on the Supplemental Schedule, our consolidated results of operations for the year ended December 31, 2012 includes the favorable after-tax impact of approximately $1.9 million, or $.02 per diluted share, recorded in connection with the implementation of EHR applications. This favorable impact, which on a pre-tax basis amounted to $3.0 million, including a $700,000 benefit from the net expense attributable to third-party, non-controlling ownership interests, consists of $30.0 million of EHR incentive income offset by $14.4 million of salaries, wages, benefits and other operating expenses and $13.3 million of depreciation and amortization expense. 

During 2013, based upon our remaining scheduled EHR implementations and anticipated "meaningful use" qualifications, we expect to record approximately $57 million of EHR incentive income and approximately $36 million of EHR-related incremental expenses (including $29 million of depreciation and amortization expense) resulting in a net favorable after-tax impact of approximately $13 million, or $.13 per diluted share.       

2013 Full Year Guidance: 
Excluding the favorable $.13 per diluted share EHR impact mentioned above, our estimated range of net income attributable to UHS for the year ended December 31, 2013, is $4.35 to $4.50 per diluted share.  This guidance range represents an increase of approximately 5% to 8% over the adjusted net income attributable to UHS of $4.15 per diluted share for the year ended December 31, 2012, as calculated on the attached supplemental schedule, and as discussed above.   

During 2013, our net revenues are estimated to increase approximately 6% to $7.41 billion, as compared to $6.96 billion during 2012. 

This guidance range excludes the impact of 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.

Acquisition of Ascend Health Corporation: 
As previously announced, we completed the acquisition of Ascend Health Corporation ("Ascend") in October, 2012.  Ascend was the largest private behavioral health provider with 9 owned or leased freestanding inpatient facilities located in 5 states including Texas, Arizona, Utah, Oregon and Washington.    

Conference call information: 
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on March 1, 2013. 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, 2012), may cause the results to differ materially from those anticipated in the forward-looking statements.  The operating pressures that we continue to experience in many of our acute care markets has increased the volatility of our financial results making estimation of future results more challenging.  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 twelve-month periods ended December 31, 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, 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.

 

Universal Health Services, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Twelve months


ended December 31,


ended December 31,


2012


2011


2012


2011









Net revenues before provision for doubtful accounts

$1,969,395


$1,803,530


$7,688,071


$7,356,798

  Less: Provision for doubtful accounts

204,468


140,534


726,671


596,576

Net revenues

1,764,927


1,662,996


6,961,400


6,760,222









Operating charges:








   Salaries, wages and benefits

875,865


833,808


3,440,917


3,326,378

   Other operating expenses

322,790


323,201


1,381,838


1,353,693

   Supplies expense

204,697


201,832


799,621


805,489

   Depreciation and amortization

80,619


73,383


302,426


287,211

   Lease and rental expense

23,979


21,822


94,885


90,323

   Electronic health records incentive income

(17,532)


-


(30,038)


-

   Costs related to extinguishment of debt

-


-


29,170


-


1,490,418


1,454,046


6,018,819


5,863,094









Income from operations

274,509


208,950


942,581


897,128









Interest expense, net

41,113


46,115


178,918


200,792









Income before income taxes

233,396


162,835


763,663


696,336









Provision for income taxes

85,736


54,828


274,616


247,466









Net income

147,660


108,007


489,047


448,870









Less:  Income attributable to








noncontrolling interests

12,199


12,736


45,601


50,703









Net income attributable to UHS

$135,461


$95,271


$443,446


$398,167

































Basic earnings per share attributable to UHS (a)

$1.39


$0.99


$4.57


$4.09









Diluted earnings per share attributable to UHS (a)

$1.39


$0.98


$4.53


$4.04

































 

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Twelve months


ended December 31,


ended December 31,


2012


2011


2012


2011









(a) Earnings per share calculation:
















Basic and diluted:








Net income attributable to UHS

$135,461


$95,271


$443,446


$398,167

Less: Net income attributable to unvested restricted share grants

(118)


(81)


(497)


(521)

Net income attributable to UHS - basic and diluted

$135,343


$95,190


$442,949


$397,646









Weighted average number of common shares - basic

97,181


96,455


96,821


97,199









Basic earnings per share attributable to UHS:

$1.39


$0.99


$4.57


$4.09









Weighted average number of common shares

97,181


96,455


96,821


97,199

Add: Other share equivalents

530


969


890


1,338

Weighted average number of common shares and equiv. - diluted

97,711


97,424


97,711


98,537









Diluted earnings per share attributable to UHS:

$1.39


$0.98


$4.53


$4.04









 

Universal Health Services, Inc.


Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule")


For the three months ended December 31, 2012 and 2011


(in thousands, except per share amounts)


(unaudited)





























Calculation of "EBITDA"












Three months ended


Three months ended



December 31, 2012


December 31, 2011




















Net revenues before provision for doubtful accounts

$1,969,395




$1,803,530




  Less: Provision for doubtful accounts

204,468




140,534




Net revenues

1,764,927


100.0%


1,662,996


100.0%











Operating charges:









   Salaries, wages and benefits

875,865


49.6%


833,808


50.1%


   Other operating expenses

322,790


18.3%


323,201


19.4%


   Supplies expense

204,697


11.6%


201,832


12.1%


   EHR incentive income

(17,532)


-1.0%


-


0.0%



1,385,820


78.5%


1,358,841


81.7%











Operating income/margin ("EBITDAR")

379,107


21.5%


304,155


18.3%











   Lease and rental expense

23,979




21,822




   Income attributable to noncontrolling interests

12,199




12,736













Earnings before, depreciation and amortization, interest expense, and income taxes ("EBITDA")

342,929


19.4%


269,597


16.2%











   Depreciation and amortization

80,619




73,383




   Costs related to extinguishment of debt

-




-




   Interest expense, net

41,113




46,115













Income before income taxes 

221,197




150,099













Provision for income taxes

85,736




54,828




Net income attributable to UHS

$135,461




$95,271






















Calculation of Adjusted Net Income Attributable to UHS












Three months ended


Three months ended



December 31, 2012


December 31, 2011





Per




Per



Amount


Diluted Share


Amount


Diluted Share


Calculation of Adjusted Net Income Attributable to UHS - including and excluding EHR impact:









Net income attributable to UHS

$135,461


$1.39


$95,271


$0.98


Plus/minus adjustments:









  Reduction of reserves relating to prior years for professional









      and general liability self-insured claims, net of income taxes

(15,516)


(0.16)


(6,477)


($0.07)


  Gain on sale of assets and business, net of income taxes

(16,417)


(0.17)


-


-


Subtotal after-tax adjustments to net income attributable to UHS

(31,933)


(0.33)


(6,477)


(0.07)


Adjusted net income attributable to UHS - including Electronic Health Records ("EHR") impact

$103,528


$1.06


$88,794


$0.91











Plus/minus impact of EHR implementation: 









EHR-related incentive income, pre-tax

(17,532)








EHR-related salaries, wages and benefits, pre-tax

3,594








EHR-related other operating costs, pre-tax

(173)








EHR-related depreciation & amortization, pre-tax

5,191








EHR-related minority interest in earnings of consolidated entities, pre-tax

53








Income tax provision on EHR-related items 

3,357








After-tax impact of EHR-related items

(5,510)


(0.06)


-


-


Adjusted net income attributable to UHS

$98,018


$1.00


$88,794


$0.91





























 

Universal Health Services, Inc.


Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule")


For the twelve months ended December 31, 2012 and 2011


(in thousands, except per share amounts)


(unaudited)





























Calculation of "EBITDA"












Twelve months ended


Twelve months ended



December 31, 2012


December 31, 2011




















Net revenues before provision for doubtful accounts

$7,688,071




$7,356,798




  Less: Provision for doubtful accounts

726,671




596,576




Net revenues

6,961,400


100.0%


6,760,222


100.0%











Operating charges:









   Salaries, wages and benefits

3,440,917


49.4%


3,326,378


49.2%


   Other operating expenses

1,381,838


19.9%


1,353,693


20.0%


   Supplies expense

799,621


11.5%


805,489


11.9%


   EHR incentive income

(30,038)


-0.4%


-


0.0%



5,592,338


80.3%


5,485,560


81.1%











Operating income/margin ("EBITDAR")

1,369,062


19.7%


1,274,662


18.9%











   Lease and rental expense

94,885




90,323




   Income attributable to noncontrolling interests

45,601




50,703













Earnings before, depreciation and amortization, interest expense, and income taxes ("EBITDA")

1,228,576


17.6%


1,133,636


16.8%











   Depreciation and amortization

302,426




287,211




   Costs related to extinguishment of debt

29,170




-




   Interest expense, net

178,918




200,792













Income before income taxes 

718,062




645,633













Provision for income taxes

274,616




247,466




Net income attributable to UHS

$443,446




$398,167






















Calculation of Adjusted Net Income Attributable to UHS












Twelve months ended


Twelve months ended



December 31, 2012


December 31, 2011





Per




Per



Amount


Diluted Share


Amount


Diluted Share


Calculation of Adjusted Net Income Attributable to UHS - including and excluding EHR impact:









Net income attributable to UHS

$443,446


$4.53


$398,167


$4.04


Plus/minus adjustments:









  Medicare Rural Floor settlement, net of income taxes

(18,753)








  Oklahoma SHOPP Medicaid reimbursements related to prior years,

    net of income taxes

(4,329)








  Impact of revised SSI ratios and write-off Florida county receivables, 

    net of income taxes

5,149








  Net Medicaid reimbursements related to prior years, net of

    income taxes

(3,417)








  Costs related to extinguishment of debt, net of income taxes

18,126








  Reduction of reserves relating to prior years for professional









     and general liability self-insured claims, net of income taxes

(15,516)




(6,477)




  Gain on sale of assets and business, net of income taxes

(16,417)




-




Subtotal after-tax adjustments to net income attributable to UHS

(35,157)


(0.36)


(6,477)


(0.07)


Adjusted net income attributable to UHS - including Electronic Health Records ("EHR") impact

$408,289


$4.17


$391,690


$3.97











Plus/minus impact of EHR implementation: 









EHR-related incentive income, pre-tax

(30,038)








EHR-related salaries, wages and benefits, pre-tax

14,316








EHR-related other operating costs, pre-tax

141








EHR-related depreciation & amortization, pre-tax

13,293








EHR-related minority interest in earnings of consolidated entities, pre-tax

(722)








Income tax provision on EHR-related items 

1,140








After-tax impact of EHR-related items

(1,870)


(0.02)


-


-


Adjusted net income attributable to UHS

$406,419


$4.15


$391,690


$3.97





























 

Universal Health Services, Inc.


Consolidated Statements of Comprehensive Income


(in thousands)


(unaudited)












Three months


Twelve months



ended December 31,


ended December 31,



2012


2011


2012


2011











Net income

$147,660


$108,007


$489,047


$448,870


Other comprehensive income (loss):









   Unrealized derivative gains (loss) on cash flow hedges

4,895


2,159


6,677


(37,477)


   Amortization of terminated hedge

(84)


(84)


(336)


(336)


   Minimum pension liability

4,986


(12,397)


4,986


(12,397)


Other comprehensive (loss) income before tax

9,797


(10,322)


11,327


(50,210)


Income tax (benefit) expense related to items of other comprehensive income (loss)

3,721


(3,904)


4,306


(19,174)


Total other comprehensive (loss) income, net of tax

6,076


(6,418)


7,021


(31,036)











Comprehensive income

153,736


101,589


496,068


417,834


Less: Comprehensive income attributable to noncontrolling interests

12,199


12,736


45,601


50,703


Comprehensive income attributable to UHS

$141,537


$88,853


$450,467


$367,131











 

Universal Health Services, Inc.


Condensed Consolidated Balance Sheets


(in thousands)


(unaudited)













December 31,



December 31,





2012



2011


Assets








Current assets:








    Cash and cash equivalents


$

23,471


$

41,229


    Accounts receivable, net



1,067,197



969,802


    Supplies



99,000



96,775


    Deferred income taxes



104,461



108,324


    Other current assets



87,936



99,859


    Assets of facilities held for sale



25,431



48,916


          Total current assets



1,407,496



1,364,905










Property and equipment



5,368,345



5,106,160


Less: accumulated depreciation



(1,986,110)



(1,818,180)





3,382,235



3,287,980










Other assets:








    Goodwill



3,036,765



2,627,602


    Deferred charges



75,888



111,780


    Other



298,459



272,978




$

8,200,843


$

7,665,245










Liabilities and Stockholders' Equity








Current liabilities:








    Current maturities of long-term debt


$

2,589


$

2,479


    Accounts payable and accrued liabilities



889,557



832,125


    Federal and state taxes



1,062



0


    Liabilities of facilities held for sale



850



2,329


          Total current liabilities



894,058



836,933










Other noncurrent liabilities



395,355



401,908


Long-term debt



3,727,431



3,651,428


Deferred income taxes



183,747



209,592










Redeemable noncontrolling interest



234,303



218,266










UHS common stockholders' equity



2,713,345



2,296,352


Noncontrolling interest



52,604



50,766


          Total equity



2,765,949



2,347,118












$

8,200,843


$

7,665,245


















 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Twelve months


ended December 31,


2012


2011





Cash Flows from Operating Activities:




  Net income

$489,047


$448,870

  Adjustments to reconcile net income to net 




  cash provided by operating activities:




  Depreciation & amortization

308,690


295,861

  Gains on sales of assets and businesses, net of losses

(27,085)


(452)

  Stock-based compensation expense

22,518


18,225

   Costs related to extinguishment of debt

29,170


0

  Changes in assets & liabilities, net of effects from




  acquisitions and dispositions:




   Accounts receivable

(71,068)


(134,838)

   Accrued interest

152


(3,577)

   Accrued and deferred income taxes 

10,374


85,792

   Other working capital accounts 

28,554


(28,382)

   Other assets and deferred charges

30,976


37,160

   Other 

6,367


(1,387)

   Accrued insurance expense, net of commercial premiums paid

62,660


83,612

   Payments made in settlement of self-insurance claims

(75,084)


(82,633)

          Net cash provided by operating activities

815,271


718,251





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(363,192)


(285,682)

   Acquisition of property and businesses

(527,847)


(29,466)

   Proceeds received from sale of assets and businesses

149,311


67,592

   Costs incurred for purchase and implementation of electronic

     health records application

(54,362)


(38,249)

   Return of deposit on terminated purchase agreement

6,500


0

          Net cash used in investing activities

(789,590)


(285,805)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(849,647)


(381,517)

   Additional borrowings

913,500


98,100

   Financing costs

(8,283)


(23,608)

   Repurchase of common shares

(19,154)


(60,482)

   Dividends paid

(58,395)


(19,466)

   Issuance of common stock

5,435


4,779

   Profit distributions to noncontrolling interests

(26,895)


(38,497)

          Net cash used in financing activities

(43,439)


(420,691)





(Decrease) increase in cash and cash equivalents

(17,758)


11,755

Cash and cash equivalents, beginning of period

41,229


29,474

Cash and cash equivalents, end of period

$23,471


$41,229





Supplemental Disclosures of Cash Flow Information:




  Interest paid

$157,415


$176,328





  Income taxes paid, net of refunds

$264,824


$163,029









 





















       Universal Health Services, Inc.

  Supplemental Statistical Information

(un-audited)


























 % Change 


 % Change 








Quarter Ended


12 months ended



Same Facility:





12/31/2012


12/31/2012













Acute Care Hospitals










Revenues





3.1%


0.4%



Adjusted Admissions





1.7%


0.2%



Adjusted Patient Days





1.4%


0.5%



Revenue Per Adjusted Admission





1.4%


0.2%



Revenue Per Adjusted Patient Day





1.7%


-0.1%























Behavioral Health Hospitals




















Revenues





4.5%


4.3%



Adjusted Admissions





5.0%


5.0%



Adjusted Patient Days





0.5%


1.0%



Revenue Per Adjusted Admission





-0.5%


-0.7%



Revenue Per Adjusted Patient Day





4.0%


3.2%











































UHS Consolidated



Fourth Quarter Ended


Twelve months Ended




12/31/2012


12/31/2011


12/31/2012


12/31/2011











Revenues



$1,764,927


$1,662,996


$6,961,400


$6,760,222

EBITDA   (1)



342,929


269,597


1,228,576


1,133,636

EBITDA Margin (1)



19.4%


16.2%


17.6%


16.8%











Cash Flow From Operations



280,265


155,749


815,271


718,251

Days Sales Outstanding



56


53


56


51

Capital Expenditures  



81,001


90,278


363,192


285,682











Debt 







3,730,020


3,653,907

Shareholders' Equity







2,713,345


2,296,352

Debt / Total Capitalization







57.9%


61.4%

Debt / EBITDA  







3.04


3.22

Debt / Cash From Operations  







4.58


5.09





















Acute Care EBITDAR Margin  (2) 



14.4%


15.5%


15.8%


17.2%

Behavioral Health EBITDAR Margin  (2) 


27.6%


24.8%


27.6%


25.8%





















(1)  Net of Minority Interest and before the items shown on the Supplemental Schedule.

(2)  Before Corporate overhead allocation and minority interest and adjustments shown on the Supplemental Schedule. Also excludes financial information for facilities reflected as discontinued operations.





















 





























       UNIVERSAL HEALTH SERVICES, INC.

        SELECTED HOSPITAL STATISTICS

         FOR THE THREE MONTHS ENDED

 DECEMBER 31, 2012



















AS REPORTED:





























                       ACUTE (1)



               BEHAVIORAL HEALTH



12/31/12

12/31/11

%  change


12/31/12

12/31/11

%  change










Hospitals owned and leased


23

23

0.0%


185

179

3.4%

Average licensed beds


5,620

5,604

0.3%


19,977

19,372

3.1%

Patient days


269,969

269,164

0.3%


1,340,429

1,276,929

5.0%

Average daily census


2,934.4

2,925.7

0.3%


14,569.9

13,879.7

5.0%

Occupancy-licensed beds


52.2%

52.2%

0.0%


72.9%

71.6%

1.8%

Admissions


61,213

60,822

0.6%


95,634

86,814

10.2%

Length of stay


4.4

4.4

-0.3%


14.0

14.7

-4.7%










Inpatient revenue


$3,080,223

$2,835,547

8.6%


$1,521,842

$1,353,613

12.4%

Outpatient revenue


1,527,935

1,362,580

12.1%


171,554

153,225

12.0%

Total patient revenue


4,608,158

4,198,127

9.8%


1,693,396

1,506,838

12.4%

Other revenue


30,406

21,864

39.1%


33,788

34,810

-2.9%

Gross hospital revenue


4,638,564

4,219,991

9.9%


1,727,184

1,541,648

12.0%










Total deductions


3,596,470

3,263,037

10.2%


814,073

705,662

15.4%










Net hospital revenue before 









  provision for doubtful accounts

$1,042,094

$956,954

8.9%


$913,111

$835,986

9.2%










Provision for doubtful accounts

$179,205

$120,067

49.3%


$25,226

$20,458

23.3%










Net hospital revenue 


862,889

836,887

3.1%


887,885

815,528

8.9%



















SAME FACILITY:




















                      ACUTE  (1)



             BEHAVIORAL HEALTH (2)



12/31/12

12/31/11

%  change


12/31/12

12/31/11

%  change










Hospitals owned and leased


23

23

0.0%


172

172

0.0%

Average licensed beds


5,620

5,604

0.3%


18,922

18,848

0.4%

Patient days


269,974

269,164

0.3%


1,264,338

1,253,647

0.9%

Average daily census


2,934.5

2,925.7

0.3%


13,742.8

13,626.6

0.9%

Occupancy-licensed beds


52.2%

52.2%

0.0%


72.6%

72.3%

0.5%

Admissions


61,213

60,822

0.6%


89,879

85,302

5.4%

Length of stay


4.4

4.4

-0.3%


14.1

14.7

-4.3%





































(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, San Juan Capestrano, Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group Homes, the Peaks and the Ascend facilities are excluded in both current and prior years.



















 

       UNIVERSAL HEALTH SERVICES, INC.

        SELECTED HOSPITAL STATISTICS

          FOR THE TWELVE MONTHS ENDED

DECEMBER 31, 2012



















AS REPORTED:





























                       ACUTE (1)



               BEHAVIORAL HEALTH



12/31/12

12/31/11

%  change


12/31/12

12/31/11

%  change










Hospitals owned and leased


23

23

0.0%


185

179

3.4%

Average licensed beds


5,563

5,566

-0.1%


19,362

19,388

-0.1%

Patient days


1,095,804

1,114,820

-1.7%


5,245,499

5,090,080

3.1%

Average daily census


2,994.0

3,054.3

-2.0%


14,332.0

13,945.4

2.8%

Occupancy-licensed beds


53.8%

54.9%

-1.9%


74.0%

71.8%

2.9%

Admissions


245,234

250,278

-2.0%


374,865

356,856

5.0%

Length of stay


4.5

4.5

0.3%


14.0

14.3

-1.9%










Inpatient revenue


$12,406,567

$11,770,248

5.4%


$5,764,370

$5,507,730

4.7%

Outpatient revenue


6,134,615

5,431,146

13.0%


646,177

606,877

6.5%

Total patient revenue


18,541,182

17,201,394

7.8%


6,410,547

6,114,607

4.8%

Other revenue


99,233

77,476

28.1%


143,061

139,912

2.3%

Gross hospital revenue


18,640,415

17,278,870

7.9%


6,553,608

6,254,519

4.8%










Total deductions


14,543,716

13,336,401

9.1%


3,002,097

2,867,700

4.7%










Net hospital revenue before 









  provision for doubtful accounts

$4,096,699

$3,942,469

3.9%


$3,551,511

$3,386,819

4.9%










Provision for doubtful accounts

$635,283

$518,512

22.5%


$91,370

$77,957

17.2%










Net hospital revenue 


3,461,416

3,423,957

1.1%


3,460,141

3,308,862

4.6%




























SAME FACILITY:





























                       ACUTE   (1)



             BEHAVIORAL HEALTH (2)



12/31/12

12/31/11

%  change


12/31/12

12/31/11

%  change










Hospitals owned and leased


23

23

0.0%


172

172

0.0%

Average licensed beds


5,563

5,566

-0.1%


18,864

18,798

0.4%

Patient days


1,095,804

1,114,820

-1.7%


5,110,604

5,060,579

1.0%

Average daily census


2,994.0

3,054.3

-2.0%


13,963.4

13,864.6

0.7%

Occupancy-licensed beds


53.8%

54.9%

-1.9%


74.0%

73.8%

0.4%

Admissions


245,234

250,278

-2.0%


364,907

347,757

4.9%

Length of stay


4.5

4.5

0.3%


14.0

14.6

-3.8%




























(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, San Juan Capestrano, Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group Homes, the Peaks and the Ascend facilities are excluded in both current and prior years.










 

SOURCE Universal Health Services, Inc.



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