Universal Health Services, Inc. Reports Financial Results for Three and Six Months Ended June 30, 2012 and Revises 2012 Full Year Guidance Consolidated Results of Operations, As Reported - Three and six-month periods ended June 30, 2012 and 2011:

KING OF PRUSSIA, Pa., July 26, 2012 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $107.6 million, or $1.10 per diluted share, during the second quarter of 2012 as compared to $103.6 million, or $1.04 per diluted share, during the comparable quarter of 2011.  Net revenues increased 1% to $1.73 billion during the second quarter of 2012 as compared to $1.71 billion during the second quarter of 2011. 

Reported net income attributable to UHS was $236.2 million, or $2.41 per diluted share, during the first six months of 2012 as compared to $217.8 million, or $2.20 per diluted share, during the comparable period of 2011.  Net revenues increased 3% to $3.53 billion during the first six months of 2012 as compared to $3.44 billion during the comparable period of 2011. 

Consolidated Results of Operations, As Adjusted – Three and six-month periods ended June 30, 2012 and 2011:

For the three-month period ended June 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 $109.1 million, or $1.12 per diluted share. There were no such adjustments required to our reported net income attributable to UHS for the second quarter of 2011.    

As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2012, was a net favorable after-tax impact of $3.4 million, or $.03 per diluted share, consisting primarily of the 2011 portion of net Medicaid supplemental revenues recorded during the quarter and an unfavorable after-tax charge of approximately $5.0 million, or $.05 per diluted share, related to the revenues 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 payments and EHR expenses).  The net Medicaid supplemental revenues related primarily to new supplemental Medicaid programs initiated in certain states in which we operate behavioral health care facilities.  These supplemental programs commenced during the second quarter of 2012 and were retroactive to July, 2011.

For the six-month period ended June 30, 2012, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $219.8 million, or $2.25 per diluted share. There were no such adjustments required to our reported net income attributable to UHS for the first six months of 2011.    

As reflected on the Supplemental Schedule, included in our reported results during the first six months of 2012 was the above-mentioned unfavorable after-tax charge of approximately $5.0 million, or $.05 per diluted share, recorded in connection with the implementation of EHR applications and an aggregate favorable after-tax impact of $21.4 million, or $.21 per diluted share, consisting of the following:

  • 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 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 six months of 2012;
  • a favorable after-tax impact of $4.3 million representing the 2011 portion of the net Medicaid supplemental reimbursements earned pursuant to the Oklahoma Supplemental Hospital Offset Payment Program ("SHOPP"). Pursuant to the terms and conditions of the SHOPP program, which was retroactive to July, 2011, we estimate that we are entitled to annual net reimbursements of approximately $14 million during each of the state's fiscal years of 2012 and 2013;
  • an aggregate unfavorable after-tax impact of $5.1 million 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), and;
  • a net favorable after-tax impact of $3.4 million consisting primarily of the above-mentioned, 2011 portion of net Medicaid supplemental revenues recorded during the second quarter of 2012.

Acute Care Services – Three and six-month periods ended June 30, 2012 and 2011:

During the second quarter of 2012, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) decreased 1.3% and adjusted patient days increased 0.7%, as compared to the second quarter of 2011. Net revenues at these facilities decreased 2.2% during the second quarter of 2012 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission decreased 0.9% while net revenue per adjusted patient day decreased 2.9% during the second quarter of 2012 as compared to the comparable quarter of the prior year. The declines in net revenue per adjusted admission and adjusted patient day were largely due to difficult comparisons to the prior year quarter when our net revenues were favorably impacted by positive changes in payor mix of patients treated at our hospitals and a stabilization of uninsured patient volumes. On a same facility basis, the operating margin at our acute care hospitals decreased to 16.1% during the second quarter of 2012 as compared to 17.8% during the second 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 six months of 2012, at our acute care hospitals on a same facility basis, adjusted admissions increased 0.4% and adjusted patient days increased 0.9%, as compared to the comparable six-month period of 2011. Net revenues at these facilities decreased 0.5% during the first six months of 2012 as compared to the comparable period of 2011.  At these facilities, net revenue per adjusted admission decreased 0.9% while net revenue per adjusted patient day decreased 1.4% during the first six 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 17.6% during the first six months of 2012, as compared to 19.2% during the comparable six-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 $266 million and $239 million during the three-month periods ended June 30, 2012 and 2011, respectively, and $581 million and $462 million during the six-month periods ended June 30, 2012 and 2011, respectively.

Behavioral Health Care Services – Three and six-month periods ended June 30, 2012 and 2011:

During the second quarter of 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.3% while adjusted patient days increased 0.2%, as compared to the second quarter of 2011. Net revenues at these facilities increased 4.1% during the second quarter of 2012, as compared to the comparable quarter in 2011. At these facilities, net revenue per adjusted admission increased 0.4% while net revenue per adjusted patient day increased 3.5% during the second quarter of 2012 over the comparable quarter in 2011. The operating margin at our behavioral health care facilities owned during both periods increased to 28.6% during the second quarter of 2012, as compared to 26.9% during the second quarter of 2011. 

During the first six months of 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 6.2% while adjusted patient days increased 1.5%, as compared to the comparable period of 2011. Net revenues at these facilities increased 4.7% during the first six months of 2012, as compared to the comparable period of 2011. At these facilities, net revenue per adjusted admission decreased 1.4% while net revenue per adjusted patient day increased 3.2% during the first six months of 2012 over the comparable period of 2011. The operating margin at our behavioral health care facilities owned during both periods increased to 27.7% during the first six months of 2012, as compared to 26.7% during the comparable period of 2011. 

Accounting for HITECH Act incentive payments 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 June 30, 2012, EHR applications have been implemented at nine of our acute care hospitals, the majority of which occurred during the second quarter 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.  One hospital met the "meaningful use" criteria during the first half of 2012 (occurred during the second quarter) and we anticipate that eight additional hospitals will qualify by the end of 2012.

As reflected on the Supplemental Schedule, our consolidated results of operations for the three and six-month periods ended June 30, 2012 include an after-tax charge of approximately $5.0 million, or $.05 per diluted share, recorded in connection with the implementation of EHR applications. This charge, which on a pre-tax basis amounted to $8.0 million, net of $1.9 million attributable to third-party, non-controlling ownership interests, consists of $2.0 million of revenue offset by $8.3 million of salaries, wages, benefits and other operating expenses and $3.5 million of depreciation and amortization expense.  The EHR-related revenue recorded during the second quarter of 2012 consists of state Medicaid EHR incentive payments attributable to an acute care hospital that met the "meaningful use" criteria during the quarter. 

During the six-month period of July 1, 2012 through December 31, 2012, based upon our scheduled EHR implementations and anticipated "meaningful use" qualifications, we anticipate recording approximately $32 million of EHR revenues and $18 million of EHR-related incremental expenses resulting in a favorable after-tax impact of approximately $9 million, or $.09 per diluted share.  Combined with the above-mentioned EHR-related revenues and expenses recorded during the first six months of 2012, we estimate that our consolidated results of operations for the year ended December 31, 2012 will include approximately $34 million of EHR revenues and $28 million of EHR-related incremental expenses resulting in a net favorable after-tax impact of approximately $4 million, or $.04 per diluted share.          

Revised 2012 Full Year Guidance:

Against the backdrop of a sluggish economic recovery, and based upon the operating trends and financial results experienced during the first six months of 2012, our revised estimated range of adjusted net income attributable to UHS, for the year ended December 31, 2012 is $4.25 to $4.35 per diluted share. This revised guidance, which excludes the estimated favorable $.04 per diluted share EHR impact mentioned above and the impact of the other items reflected on the Supplemental Schedule for the six months ended June 30, 2012, represents a decrease of approximately 2% to 3% from the previously provided range of $4.33 to $4.48 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.

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on July 27, 2012. The dial-in number is 1-877-648-7971.  A live broadcast of the call will be available on our website at www.uhsinc.com.  Also, a replay of the call will be available on our website following the completion of the conference call.

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 March 31, 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 six-month periods ended June 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 revenues 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, 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 March 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


Six months


ended June 30,


ended June 30,


2012


2011


2012


2011









Net revenues before provision for doubtful accounts

$1,914,463


$1,869,414


$3,860,675


$3,744,842

  Less: Provision for doubtful accounts

184,660


154,950


333,283


304,120

Net revenues

1,729,803


1,714,464


3,527,392


3,440,722









Operating charges:








   Salaries, wages and benefits

856,878


836,559


1,730,872


1,667,317

   Other operating expenses

347,412


349,454


700,985


688,811

   Supplies expense

198,100


202,003


403,740


405,282

   Depreciation and amortization

73,078


71,215


144,970


140,809

   Lease and rental expense

24,003


22,996


47,465


45,853


1,499,471


1,482,227


3,028,032


2,948,072









Income from operations

230,332


232,237


499,360


492,650









Interest expense, net

45,888


49,808


92,598


106,225









Income before income taxes

184,444


182,429


406,762


386,425









Provision for income taxes

67,000


66,395


146,748


140,404









Net income

117,444


116,034


260,014


246,021









Less:  Income attributable to








noncontrolling interests

9,883


12,385


23,846


28,179









Net income attributable to UHS

$107,561


$103,649


$236,168


$217,842

















































Basic earnings per share attributable to UHS (a)

$1.11


$1.06


$2.44


$2.23









Diluted earnings per share attributable to UHS (a)

$1.10


$1.04


$2.41


$2.20









Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Six months


ended June 30,


ended June 30,


2012


2011


2012


2011









(a) Earnings per share calculation:
















Basic and diluted:








Net income attributable to UHS

$107,561


$103,649


$236,168


$217,842

Less: Net income attributable to unvested restricted share grants

(126)


(126)


(294)


(275)

Net income attributable to UHS - basic and diluted

$107,435


$103,523


$235,874


$217,567









Weighted average number of common shares - basic

96,691


97,563


96,642


97,472









Basic earnings per share attributable to UHS:

$1.11


$1.06


$2.44


$2.23









Weighted average number of common shares

96,691


97,563


96,642


97,472

Add: Other share equivalents

1,038


1,695


1,118


1,591

Weighted average number of common shares and equiv. - diluted

97,729


99,258


97,760


99,063









Diluted earnings per share attributable to UHS:

$1.10


$1.04


$2.41


$2.20









Universal Health Services, Inc.

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

For the three months ended June 30, 2012 and 2011

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Three months ended


Three months ended


June 30, 2012


June 30, 2011

















Net revenues before provision for doubtful accounts

$1,914,463




$1,869,414



  Less: Provision for doubtful accounts

184,660




154,950



Net revenues

1,729,803


100.0%


1,714,464


100.0%









Operating charges:








   Salaries, wages and benefits

856,878


49.5%


836,559


48.8%

   Other operating expenses

347,412


20.1%


349,454


20.4%

   Supplies expense

198,100


11.5%


202,003


11.8%


1,402,390


81.1%


1,388,016


81.0%









Operating income/margin ("EBITDAR")

327,413


18.9%


326,448


19.0%









   Lease and rental expense

24,003




22,996



   Income attributable to noncontrolling interests

9,883




12,385











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

293,527


17.0%


291,067


17.0%









   Depreciation and amortization

73,078




71,215



   Interest expense, net

45,888




49,808











Income before income taxes 

174,561




170,044











Provision for income taxes

67,000




66,395



Net income attributable to UHS

$107,561




$103,649



















Calculation of Adjusted Net Income Attributable to UHS










Three months ended


Three months ended


June 30, 2012


June 30, 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

$107,561


$1.10


$103,649


$1.04

Plus/minus adjustments:








  Net Medicaid reimbursements related to prior years, net of income taxes

(3,417)


(0.03)


-


-

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

$104,144


$1.07


$103,649


$1.04









Plus/minus impact of EHR implementation: 








EHR-related net revenues, pre-tax

(1,955)







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

7,943







EHR-related other operating costs, pre-tax

396







EHR-related depreciation & amortization, pre-tax

3,527







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

(1,897)







Income tax provision on EHR-related items 

(3,034)







After-tax impact of EHR-related items

4,980


0.05


-


-

Adjusted net income attributable to UHS

$109,124


$1.12


$103,649


$1.04









Universal Health Services, Inc.

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

For the six months ended June 30, 2012 and 2011

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Six months ended


Six months ended


June 30, 2012


June 30, 2011

















Net revenues before provision for doubtful accounts

$3,860,675




$3,744,842



  Less: Provision for doubtful accounts

333,283




304,120



Net revenues

3,527,392


100.0%


3,440,722


100.0%









Operating charges:








   Salaries, wages and benefits

1,730,872


49.1%


1,667,317


48.5%

   Other operating expenses

700,985


19.9%


688,811


20.0%

   Supplies expense

403,740


11.4%


405,282


11.8%


2,835,597


80.4%


2,761,410


80.3%









Operating income/margin ("EBITDAR")

691,795


19.6%


679,312


19.7%









   Lease and rental expense

47,465




45,853



   Income attributable to noncontrolling interests

23,846




28,179











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

620,484


17.6%


605,280


17.6%









   Depreciation and amortization

144,970




140,809



   Interest expense, net

92,598




106,225











Income before income taxes 

382,916




358,246











Provision for income taxes

146,748




140,404



Net income attributable to UHS

$236,168




$217,842



















Calculation of Adjusted Net Income Attributable to UHS










Six months ended


Six months ended


June 30, 2012


June 30, 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

$236,168


$2.41


$217,842


$2.20

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)







Subtotal after-tax adjustments to net income attributable to UHS

(21,350)


(0.21)


-


-

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

$214,818


$2.20


$217,842


$2.20









Plus/minus impact of EHR implementation: 








EHR-related net revenues, pre-tax

(1,955)







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

7,943







EHR-related other operating costs, pre-tax

396







EHR-related depreciation & amortization, pre-tax

3,527







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

(1,897)







Income tax provision on EHR-related items 

(3,034)







After-tax impact of EHR-related items

4,980


0.05


-


-

Adjusted net income attributable to UHS

$219,798


$2.25


$217,842


$2.20









Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)










Three months


Six months


ended June 30,


ended June 30,


2012


2011


2012


2011









Net income

$117,444


$116,034


$260,014


$246,021

Other comprehensive income (loss):








   Unrealized derivative gains (loss) on cash flow hedges

212


(20,583)


1,827


(18,276)

   Amortization of terminated hedge

(84)


(84)


(168)


(168)

Other comprehensive income before tax

128


(20,667)


1,659


(18,444)

Income tax expense related to items of other comprehensive income

50


(7,916)


632


(7,056)

Total other comprehensive income, net of tax

78


(12,751)


1,027


(11,388)









Comprehensive income

117,522


103,283


261,041


234,633

Less: Comprehensive income attributable to noncontrolling interests

9,883


12,385


23,846


28,179

Comprehensive income attributable to UHS

$107,639


$90,898


$237,195


$206,454

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)











June 30,



December 31,




2012



2011

Assets







Current assets:







    Cash and cash equivalents


$

32,941


$

41,229

    Accounts receivable, net



1,019,929



969,802

    Supplies



96,882



96,775

    Deferred income taxes



122,795



108,324

    Other current assets



99,534



99,859

    Assets of facilities held for sale



84,365



48,916

          Total current assets



1,456,446



1,364,905








Property and equipment



5,172,407



5,106,160

Less: accumulated depreciation



(1,875,492)



(1,818,180)




3,296,915



3,287,980








Other assets:







    Goodwill



2,610,637



2,627,602

    Deferred charges



106,095



111,780

    Other



288,555



272,978



$

7,758,648


$

7,665,245








Liabilities and Stockholders' Equity







Current liabilities:







    Current maturities of long-term debt


$

2,497


$

2,479

    Accounts payable and accrued liabilities



852,256



832,125

    Federal and state taxes



12,893



0

    Liabilities of facilities held for sale



15,966



2,329

          Total current liabilities



883,612



836,933








Other noncurrent liabilities



393,928



401,908

Long-term debt



3,458,509



3,651,428

Deferred income taxes



206,403



209,592








Redeemable noncontrolling interest



226,537



218,266








UHS common stockholders' equity



2,536,884



2,296,352

Noncontrolling interest



52,775



50,766

          Total equity



2,589,659



2,347,118










$

7,758,648


$

7,665,245








Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Six months


ended June 30,


2012


2011





Cash Flows from Operating Activities:




  Net income

$260,014


$246,021

  Adjustments to reconcile net income to net 




cash provided by operating activities:




Depreciation & amortization

148,703


144,949

Stock-based compensation expense

10,996


8,665

  Changes in assets & liabilities, net of effects from




acquisitions and dispositions:




   Accounts receivable

(63,937)


(77,661)

   Accrued interest

15,873


(2,309)

   Accrued and deferred income taxes 

3,955


55,420

   Other working capital accounts 

(13,085)


(48,417)

   Other assets and deferred charges

13,866


11,525

   Other 

2,050


3,468

   Accrued insurance expense, net of commercial premiums paid

42,241


47,480

   Payments made in settlement of self-insurance claims

(47,814)


(33,365)

          Net cash provided by operating activities

372,862


355,776





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(182,351)


(116,240)

   Proceeds received from sale of assets and businesses

53,461


2,041

   Acquisition of property and businesses

(11,476)


0

   Costs incurred for purchase and implementation of electronic health records application

(28,008)


(11,416)

   Return of deposit on terminated purchase agreement

6,500


0

          Net cash used in investing activities

(161,874)


(125,615)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(195,686)


(200,566)

   Additional borrowings

0


36,000

   Financing costs

0


(23,534)

   Repurchase of common shares

(2,927)


(6,163)

   Dividends paid

(9,673)


(9,763)

   Issuance of common stock

2,575


2,408

   Profit distributions to noncontrolling interests

(13,565)


(23,201)

          Net cash used in financing activities

(219,276)


(224,819)





(Decrease) increase in cash and cash equivalents

(8,288)


5,342

Cash and cash equivalents, beginning of period

41,229


29,474

Cash and cash equivalents, end of period

$32,941


$34,816





Supplemental Disclosures of Cash Flow Information:




  Interest paid

$62,158


$102,213





  Income taxes paid, net of refunds

$141,571


$83,532







       Universal Health Services, Inc.





  Supplemental Statistical Information






                   (unaudited)






























 % Change 


 % Change 








Quarter Ended


6 months ended



Same Facility:





6/30/2012


6/30/2011













Acute Care Hospitals










Revenues





-2.2%


-0.5%



Adjusted Admissions





-1.3%


0.4%



Adjusted Patient Days





0.7%


0.9%



Revenue Per Adjusted Admission





-0.9%


-0.9%



Revenue Per Adjusted Patient Day





-2.9%


-1.4%























Behavioral Health Hospitals




















Revenues





4.1%


4.7%



Adjusted Admissions





3.3%


6.2%



Adjusted Patient Days





0.2%


1.5%



Revenue Per Adjusted Admission





0.4%


-1.4%



Revenue Per Adjusted Patient Day





3.5%


3.2%











































UHS Consolidated



Second Quarter Ended


Six months Ended




6/30/2012


6/30/2011


6/30/2012


6/30/2011











Revenues



$1,729,803


$1,714,464


$3,527,392


$3,440,722

EBITDA   (1)



293,527


291,067


620,484


605,280

EBITDA Margin (1)



17.0%


17.0%


17.6%


17.6%











Cash Flow From Operations



245,639


172,599


372,862


355,776

Days Sales Outstanding



54


48


53


47

Capital Expenditures  



89,788


59,682


182,351


116,240











Debt 







3,461,006


3,753,469

Shareholders Equity







2,536,884


2,186,107

Debt / Total Capitalization







57.7%


63.2%

Debt / EBITDA  (2)







2.99


3.81

Debt / Cash From Operations  (2)







4.71


5.96





















Acute Care EBITDAR Margin  (3) 



15.9%


17.7%


17.4%


19.4%

Behavioral Health EBITDAR Margin  (3) 


28.8%


26.1%


27.4%


26.1%





















(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

JUNE 30, 2012 AND 2011



















AS REPORTED:





























                       ACUTE (1)



               BEHAVIORAL HEALTH



06/30/12

06/30/11

%  change


06/30/12

06/30/11

%  change










Hospitals owned and leased


20

20

0.0%


174

179

-2.8%

Average licensed beds


5,629

5,545

1.5%


19,191

19,404

-1.1%

Patient days


270,752

277,323

-2.4%


1,305,933

1,322,126

-1.2%

Average daily census


2,975.3

3,047.5

-2.4%


14,350.9

14,528.9

-1.2%

Occupancy-licensed beds


52.9%

55.0%

-3.8%


74.8%

74.9%

-0.1%

Admissions


59,768

62,479

-4.3%


91,936

90,530

1.6%

Length of stay


4.5

4.4

2.1%


14.2

14.6

-2.7%










Inpatient revenue


$3,034,837

$2,951,260

2.8%


$1,423,894

$1,404,643

1.4%

Outpatient revenue


1,540,569

1,364,531

12.9%


162,475

157,748

3.0%

Total patient revenue


4,575,406

4,315,791

6.0%


1,586,369

1,562,391

1.5%

Other revenue


22,842

18,222

25.4%


36,406

35,323

3.1%

Gross hospital revenue


4,598,248

4,334,013

6.1%


1,622,775

1,597,714

1.6%










Total deductions


3,588,553

3,333,810

7.6%


727,240

734,460

-1.0%










Net hospital revenue before 









  provision for doubtful accounts


1,009,695

1,000,203

0.9%


895,535

863,254

3.7%










Provision for doubtful accounts


164,143

136,296

20.4%


20,504

18,520

10.7%










Net hospital revenue 


$845,552

$863,907

-2.1%


$875,031

$844,734

3.6%










SAME FACILITY:





























                      ACUTE  (1)



             BEHAVIORAL HEALTH (2)



06/30/12

06/30/11

%  change


06/30/12

06/30/11

%  change










Hospitals owned and leased


20

20

0.0%


173

173

0.0%

Average licensed beds


5,629

5,545

1.5%


19,045

18,962

0.4%

Patient days


270,752

277,323

-2.4%


1,295,977

1,294,766

0.1%

Average daily census


2,975.3

3,047.5

-2.4%


14,241.5

14,228.2

0.1%

Occupancy-licensed beds


52.9%

55.0%

-3.8%


74.8%

75.0%

-0.3%

Admissions


59,768

62,479

-4.3%


90,960

88,194

3.1%

Length of stay


4.5

4.4

2.1%


14.2

14.7

-3.0%





































(1) Auburn is excluded in both current and prior years.














(2) King George School, Marion, Pennsylvania Clinical School, San Juan Capestrano, Brooke Glen and  


   Jefferson Trail are excluded in both current and prior years.





UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE SIX MONTHS ENDED

JUNE 30, 2012 AND 2011



















AS REPORTED:





























                       ACUTE (1)



               BEHAVIORAL HEALTH



06/30/12

06/30/11

%  change


06/30/12

06/30/11

%  change










Hospitals owned and leased


20

20

0.0%


174

179


Average licensed beds


5,627

5,541

1.6%


19,142

19,400

-1.3%

Patient days


560,778

575,381

-2.5%


2,615,095

2,621,398

-0.2%

Average daily census


3,081.2

3,178.9

-3.1%


14,368.7

14,482.9

-0.8%

Occupancy-licensed beds


54.8%

57.4%

-4.6%


75.1%

74.7%

0.5%

Admissions


124,378

128,227

-3.0%


187,711

180,093

4.2%

Length of stay


4.5

4.5

0.5%


13.9

14.6

-4.3%










Inpatient revenue


$6,312,862

$6,107,084

3.4%


$2,845,979

$2,795,844

1.8%

Outpatient revenue


3,089,419

2,684,482

15.1%


323,733

307,343

5.3%

Total patient revenue


9,402,281

8,791,566

6.9%


3,169,712

3,103,187

2.1%

Other revenue


43,821

35,180

24.6%


72,974

69,531

5.0%

Gross hospital revenue


9,446,102

8,826,746

7.0%


3,242,686

3,172,718

2.2%










Total deductions


7,384,511

6,807,350

8.5%


1,458,974

1,459,161

0.0%










Net hospital revenue before 









  provision for doubtful accounts


2,061,591

2,019,396

2.1%


1,783,712

1,713,557

4.1%










Provision for doubtful accounts


289,508

264,101

9.6%


43,808

39,879

9.9%










Net hospital revenue 


$1,772,083

$1,755,295

1.0%


$1,739,904

$1,673,678

4.0%





































SAME FACILITY:





























                       ACUTE   (1)



             BEHAVIORAL HEALTH (2)



06/30/12

06/30/11

%  change


06/30/12

06/30/11

%  change










Hospitals owned and leased


20

20

0.0%


173

173

0.0%

Average licensed beds


5,627

5,541

1.6%


18,977

18,901

0.4%

Patient days


560,778

575,381

-2.5%


2,596,594

2,566,128

1.2%

Average daily census


3,081.2

3,178.9

-3.1%


14,267.0

14,177.5

0.6%

Occupancy-licensed beds


54.8%

57.4%

-4.6%


75.2%

75.0%

0.2%

Admissions


124,378

128,227

-3.0%


185,712

175,429

5.9%

Length of stay


4.5

4.5

0.5%


14.0

14.6

-4.4%




























(1) Auburn is excluded in both current and prior years.














(2) King George School, Marion, Pennsylvania Clinical School, San Juan Capestrano, Brooke Glen and  


   Jefferson Trail are excluded in both current and prior years.





 

SOURCE Universal Health Services, Inc.



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