Universal Health Services, Inc. Reports 2015 Third Quarter Financial Results

10/27/2015
Webcast Image Webcast - Live
Q3 2015 Universal Health Services Earnings Conference Call
10/28/15 at 9:00 a.m. ET

 
Consolidated Results of Operations, As Reported and As Adjusted - Three-month periods ended September 30, 2015 and 2014:

KING OF PRUSSIA, Pa., Oct. 27, 2015 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $150.3 million, or $1.48 per diluted share, during the third quarter of 2015 as compared to $82.8 million, or $.82 per diluted share, during the comparable quarter of 2014.  Net revenues increased 9.3% to $2.23 billion during the third quarter of 2015 as compared to $2.04 billion during the third quarter of 2014.

For the three-month period ended September 30, 2015, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule"), increased approximately 13% to $155.3 million, or $1.53 per diluted share, as compared to $137.5 million, or $1.36 per diluted share, during the third quarter of 2014.

As reflected on the Supplemental Schedule, included in our reported results during the third quarters of 2015 and 2014 are net unfavorable after-tax impacts of approximately $5.0 million, or $.05 per diluted share, during the third quarter of 2015 and $4.5 million, or $.04 per diluted share, during the third quarter of 2014, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals.  In addition, included in our reported results during the three-month period ended September 30, 2014 was an aggregate after-tax charge of $50.2 million, or $.50 per diluted share, incurred in connection with a legal settlement ($27.6 million, or $.27 per diluted share) as well as the costs related to the extinguishment of debt in connection with financing transactions that occurred during the third quarter of 2014 ($22.6 million, or $.23 per diluted share).

Consolidated Results of Operations, As Reported and As Adjusted – Nine-month periods ended September 30, 2015 and 2014:

Reported net income attributable to UHS was $506.8 million, or $5.02 per diluted share, during the first nine months of 2015 as compared to $372.5 million, or $3.71 per diluted share, during the comparable period of 2014. Net revenues increased 11.6% to $6.73 billion during the first nine months of 2015 as compared to $6.03 billion during the comparable period of 2014. 

For the nine-month period ended September 30, 2015, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, increased approximately 21% to $521.4 million, or $5.16 per diluted share, as compared to $429.8 million, or $4.28 per diluted share, during the first nine months of 2014.

As reflected on the Supplemental Schedule, included in our reported results during the first nine months of 2015 is a net unfavorable after-tax impact of approximately $14.6 million, or $.14 per diluted share, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.  As reflected on the Supplemental Schedule, included in our reported results during the nine-month period ended September 30, 2014 was a net aggregate after-tax charge of $57.2 million, or $.57 per diluted share, consisting of: (i) an aggregate net unfavorable after-tax impact of approximately $13.3 million, or $.13 per diluted share, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of EHR applications; (ii) the above-mentioned aggregate after-tax charge of $50.2 million, or $.50 per diluted share, incurred in connection with a legal settlement and costs related to the extinguishment of debt that occurred during the third quarter of 2014, and; (iii) a favorable after-tax impact of $6.3 million, or $.06 per diluted share, resulting from a gain realized on the sale of a non-operating investment during the first quarter of 2014.  

Acute Care Services – Three and nine-month periods ended September 30, 2015 and 2014:

During the third quarter of 2015, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 5.1% and adjusted patient days increased 5.6%, as compared to the third quarter of 2014. Net revenues at these facilities increased 7.2% during the third quarter of 2015 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 3.0% while net revenue per adjusted patient day increased 2.6% during the third quarter of 2015 as compared to the comparable quarter of 2014. On a same facility basis, the operating margin at our acute care hospitals decreased to 15.4% during the third quarter of 2015 as compared to 17.1% during the third quarter of 2014. We define operating margin as net revenues less salaries, wages and benefits, other operating expenses and supplies expense (excluding the EHR impact, as indicated on the Supplemental Schedule).

During the first nine months of 2015, at our acute care hospitals on a same facility basis, adjusted admissions increased 5.5% and adjusted patient days increased 6.1%, as compared to the comparable period of 2014. Net revenues at these facilities increased 9.2% during the first nine months of 2015 as compared to the comparable period of the prior year. At these facilities, net revenue per adjusted admission increased 4.1% while net revenue per adjusted patient day increased 3.5% during the first nine months of 2015 as compared to the comparable period of 2014. On a same facility basis, the operating margin at our acute care hospitals increased to 18.9% during the first nine months of 2015 as compared to 18.3% during the comparable period of 2014.

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 gross charges, amounting to approximately $322 million and $266 million during the three-month periods ended September 30, 2015 and 2014, respectively, and $872 million and $852 million during the nine-month periods ended September 30, 2015 and 2014, respectively.  The provision for doubtful accounts at our acute care hospitals amounted to approximately $185 million and $129 million during the three-month periods ended September 30, 2015 and 2014, respectively, and $459 million and $460 million during the nine-month periods ended September 30, 2015 and 2014, respectively.   Our acute care hospitals experienced an increase in the aggregate of charity care, uninsured discounts and provision for doubtful accounts, as a percentage of gross charges, during the third quarter of 2015, as compared to the third quarter of 2014. During the first nine months of 2015, as compared to the comparable period of 2014, our acute care hospitals experienced a decrease in the aggregate of charity care, uninsured discounts and provision for doubtful accounts, as a percentage of gross charges.       

Behavioral Health Care Services – Three and nine-month periods ended September 30, 2015 and 2014:

During the third quarter of 2015, at our behavioral health care facilities on a same facility basis, adjusted admissions and adjusted patient days each increased 1.6% as compared to the third quarter of 2014. At these facilities, net revenue per adjusted admission and net revenue per adjusted patient day each increased 3.1% during the third quarter of 2015 over the comparable quarter in 2014. On a same facility basis, our behavioral health services' net revenues increased 5.0% during the third quarter of 2015, as compared to the comparable quarter in 2014, and the operating margins were 27.5% and 27.6% during the three-month periods ended September 30, 2015 and 2014, respectively.   

During the nine-month period ended September 30, 2015, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.8% while adjusted patient days increased 1.5% compared to the comparable period of 2014. At these facilities, net revenue per adjusted admission increased 1.4% and net revenue per adjusted patient day increased 3.7% during the first nine months of 2015 over the comparable period of 2014. On a same facility basis, our behavioral health services' net revenues increased 5.5% during the first nine months of 2015, as compared to the comparable period of 2014, and the operating margins were 28.2% and 27.9% during the nine-month periods ended September 30, 2015 and 2014, respectively.

2015 Full Year Earnings Guidance Revision:

Based upon the operating trends and financial results experienced during the first nine months of 2015, our revised estimated range of adjusted net income attributable to UHS, for the year ended December 31, 2015, is $6.75 to $7.05 per diluted share. This revised guidance, which excludes the expected EHR impact for the year, maintains the lower end of the previously provided range of $6.75 to $7.15 per diluted share, and decreases the upper end of the range by approximately 1%.     

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, costs related to extinguishment of debt, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets, impact of share repurchases 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.

Acquisitions in August and October of 2015:

As previously announced:

  • In August, 2015, we acquired the stock of Alpha Hospitals Holdings Limited ("Alpha") consisting of four behavioral health care hospitals with 305 beds located in the U.K. The acquisition of the Alpha hospitals increases our behavioral health care presence in the U.K. to 21 hospitals consisting of approximately 1,100 beds.
  • In October, 2015, we completed the acquisition of Foundations Recovery Network, LLC ("Foundations").  Through this acquisition, we have added 4 inpatient facilities consisting of 322 beds as well as 8 outpatient centers.  In addition, there are over 140 expansion beds in progress.  Foundations, one of the premier names in addiction treatment, is focused on treating adults with co-occurring addiction and mental health disorders through an evidence-based integrated treatment model in residential and outpatient settings.          

Share Repurchase Program:

During the third quarter of 2014, our Board of Directors authorized a stock repurchase program whereby, from time to time as conditions allow, we may spend up to $400 million to purchase shares of our Class B Common Stock on the open market or in negotiated private transactions.  In conjunction with this program, during the third quarter of 2015, we repurchased 543,380 shares at an aggregate cost of $72.0 million. Since inception of the program through September 30, 2015, we repurchased approximately 1.4 million shares at an aggregate cost of $166.4 million.             

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on October 28, 2015. 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 be available following the 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 through its subsidiaries acute care hospitals, behavioral health facilities and ambulatory centers located throughout the United States, the United Kingdom, 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, 2014 and in Item 2-Forward Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended June 30, 2015), 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.

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 material 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, impairments of long-lived assets 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, 2014 and our Report on Form 10-Q for the quarterly period ended June 30, 2015. 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.

We incur health-care related taxes ("Provider Taxes") imposed by states in the form of a licensing fee, assessment or other mandatory payment which are related to: (i) healthcare items or services; (ii) the provision of, or the authority to provide, the health care items or services, or; (iii) the payment for the health care items or services.  Such Provider Taxes are subject to various federal regulations that limit the scope and amount of the taxes that can be levied by states in order to secure federal matching funds as part of their respective state Medicaid programs. We derive a related Medicaid reimbursement benefit from assessed Provider Taxes in the form of Medicaid claims based payment increases and/or lump sum Medicaid supplemental payments. Under these programs, including the impact of uncompensated care and upper payment limit programs, and the Texas Delivery System Reform Incentive program, we earned revenues (before Provider Tax assessments) of approximately $62 million and $53 million during the three-month periods ended September 30, 2015 and 2014, respectively, and $221 million and $180 million during the nine-month periods ended September 30, 2015 and 2014, respectively. These revenues were offset by assessments of $30 million and $21 million during the third quarters of 2015 and 2014, respectively, and $97 million and $71 million during the nine-month periods ended September 30, 2015 and 2014, respectively, which are recorded in other operating expenses on the attached Condensed Consolidated Statement of Income. Prior to 2015, these assessments were recorded as a reduction to our net revenues. Accordingly, to conform with current year presentation, these assessments were reclassified on our Condensed Consolidated Statement of Income for the three and nine-month periods ended September 30, 2014.    

Our acute care hospitals are eligible for Medicare and Medicaid EHR incentive payments upon implementation of the EHR application, once they have demonstrated meaningful use of certified EHR technology for the applicable stage or have completed attestations to their adoption or implementation of certified EHR technology.  However, 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. Pursuant to regulations, 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. We believe that all of our acute care hospitals have met the applicable meaningful use criteria and therefore are not subject to a reduced market basked update to the inpatient prospective payment standardized amount in federal fiscal year 2015. Under the HITECH Act, hospitals must continue to meet the applicable meaningful use criteria in each fiscal year or they will be subject to a market basket update reduction in a subsequent fiscal year.  

 

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,


2015


2014


2015


2014









Net revenues before provision for doubtful accounts

$2,439,071


$2,196,513


$7,271,852


$6,570,732

  Less: Provision for doubtful accounts

211,416


157,796


543,640


541,935

Net revenues

2,227,655


2,038,717


6,728,212


6,028,797









Operating charges:








   Salaries, wages and benefits

1,057,226


953,583


3,132,993


2,850,868

   Other operating expenses

529,383


533,753


1,571,060


1,394,326

   Supplies expense

242,259


222,708


721,979


662,280

   Depreciation and amortization

99,442


93,456


295,697


277,506

   Lease and rental expense

24,544


23,860


70,631


70,656

   Electronic health records incentive income

(356)


(1,425)


(1,751)


(4,029)

   Costs related to extinguishment of debt

0


36,171


0


36,171


1,952,498


1,862,106


5,790,609


5,287,778









Income from operations

275,157


176,611


937,603


741,019









Interest expense, net

27,130


32,133


84,851


102,413









Income before income taxes

248,027


144,478


852,752


638,606









Provision for income taxes

84,373


48,440


293,371


224,102









Net income

163,654


96,038


559,381


414,504









Less:  Income attributable to








noncontrolling interests

13,367


13,241


52,602


41,958









Net income attributable to UHS

$150,287


$82,797


$506,779


$372,546

















































Basic earnings per share attributable to UHS (a)

$1.52


$0.84


$5.12


$3.77









Diluted earnings per share attributable to UHS (a)

$1.48


$0.82


$5.02


$3.71









 

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,


2015


2014


2015


2014









(a) Earnings per share calculation:
















Basic and diluted:








Net income attributable to UHS

$150,287


$82,797


$506,779


$372,546

Less: Net income attributable to unvested restricted share grants

(82)


(17)


(221)


(164)

Net income attributable to UHS - basic and diluted

$150,205


$82,780


$506,558


$372,382









Weighted average number of common shares - basic

98,858


99,052


98,924


98,832









Basic earnings per share attributable to UHS:

$1.52


$0.84


$5.12


$3.77









Weighted average number of common shares

98,858


99,052


98,924


98,832

Add: Other share equivalents

2,301


1,981


1,987


1,643

Weighted average number of common shares and equiv. - diluted

101,159


101,033


100,911


100,475









Diluted earnings per share attributable to UHS:

$1.48


$0.82


$5.02


$3.71









 

Universal Health Services, Inc.


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


For the three months ended September 30, 2015 and 2014


(in thousands, except per share amounts)


(unaudited)





























Calculation of "EBITDA"












Three months ended


Three months ended



September 30, 2015


September 30, 2014




















Net revenues before provision for doubtful accounts

$2,439,071




$2,196,513




  Less: Provision for doubtful accounts

211,416




157,796




Net revenues

2,227,655


100.0%


2,038,717


100.0%











Operating charges:









   Salaries, wages and benefits

1,057,226


47.5%


953,583


46.8%


   Other operating expenses

529,383


23.8%


533,753


26.2%


   Supplies expense

242,259


10.9%


222,708


10.9%


   EHR incentive income

(356)


0.0%


(1,425)


-0.1%



1,828,512


82.1%


1,708,619


83.8%











Operating income/margin ("EBITDAR")

399,143


17.9%


330,098


16.2%











   Lease and rental expense

24,544




23,860




   Income attributable to noncontrolling interests

13,367




13,241













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

361,232


16.2%


292,997


14.4%











   Depreciation and amortization

99,442




93,456




   Costs related to extinguishment of debt

0




36,171




   Interest expense, net

27,130




32,133













Income before income taxes 

234,660




131,237













Provision for income taxes

84,373




48,440




Net income attributable to UHS

$150,287




$82,797






















Calculation of Adjusted Net Income Attributable to UHS












Three months ended


Three months ended



September 30, 2015


September 30, 2014





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

$150,287


$1.48


$82,797


$0.82


Plus/minus adjustments:









  Litigation settlement, net of income taxes

-


-


27,570


0.27


  Costs related to extinguishment of debt, net of income taxes

-


-


22,665


0.23


Subtotal after-tax adjustments to net income attributable to UHS

-


-


50,235


0.50


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

$150,287


$1.48


$133,032


$1.32











Plus/minus impact of EHR implementation: 









EHR-related incentive income, pre-tax

(356)




(1,425)




EHR-related depreciation & amortization, pre-tax

9,306




9,312




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

(965)




(733)




Income tax provision on EHR-related items 

(2,976)




(2,671)




After-tax impact of EHR-related items

5,009


0.05


4,483


0.04


Adjusted net income attributable to UHS

$155,296


$1.53


$137,515


$1.36




















 

Universal Health Services, Inc.


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


For the nine months ended September 30, 2015 and 2014


(in thousands, except per share amounts)


(unaudited)





























Calculation of "EBITDA"












Nine months ended


Nine months ended



September 30, 2015


September 30, 2014




















Net revenues before provision for doubtful accounts

$7,271,852




$6,570,732




  Less: Provision for doubtful accounts

543,640




541,935




Net revenues

6,728,212


100.0%


6,028,797


100.0%











Operating charges:









   Salaries, wages and benefits

3,132,993


46.6%


2,850,868


47.3%


   Other operating expenses

1,571,060


23.4%


1,394,326


23.1%


   Supplies expense

721,979


10.7%


662,280


11.0%


   EHR incentive income

(1,751)


0.0%


(4,029)


-0.1%



5,424,281


80.6%


4,903,445


81.3%











Operating income/margin ("EBITDAR")

1,303,931


19.4%


1,125,352


18.7%











   Lease and rental expense

70,631




70,656




   Income attributable to noncontrolling interests

52,602




41,958













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

1,180,698


17.5%


1,012,738


16.8%











   Depreciation and amortization

295,697




277,506




   Costs related to extinguishment of debt

0




36,171




   Interest expense, net

84,851




102,413













Income before income taxes 

800,150




596,648













Provision for income taxes

293,371




224,102




Net income attributable to UHS

$506,779




$372,546






















Calculation of Adjusted Net Income Attributable to UHS












Nine months ended


Nine months ended



September 30, 2015


September 30, 2014





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

$506,779


$5.02


$372,546


$3.71


Plus/minus adjustments:









  Gain on sale of investment, net of income taxes

-


-


(6,330)


(0.06)


  Litigation settlement, net of income taxes

-


-


27,570


0.27


  Costs related to extinguishment of debt, net of income taxes

-


-


22,665


0.23


Subtotal after-tax adjustments to net income attributable to UHS

-


-


43,905


0.44


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

$506,779


$5.02


$416,451


$4.15











Plus/minus impact of EHR implementation: 









EHR-related incentive income, pre-tax

(1,751)




(4,029)




EHR-related depreciation & amortization, pre-tax

27,918




27,912




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

(2,892)




(2,571)




Income tax provision on EHR-related items 

(8,676)




(7,969)




After-tax impact of EHR-related items

14,599


0.14


13,343


0.13


Adjusted net income attributable to UHS

$521,378


$5.16


$429,794


$4.28











 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)










Three months


Nine months


ended September 30,


ended September 30,


2015


2014


2015


2014









Net income

$163,654


$96,038


$559,381


$414,504

Other comprehensive income (loss):








   Unrealized derivative gains (loss) on cash flow hedges

(9,888)


4,712


(4,950)


12,922

   Amortization of terminated hedge

(84)


(84)


(252)


(252)

   Foreign currency translation adjustment

(2,304)


(2,506)


(96)


(2,506)

Other comprehensive income before tax

(12,276)


2,122


(5,298)


10,164

Income tax expense related to items of other comprehensive income

(3,742)


1,620


(1,530)


4,685

Total other comprehensive income, net of tax

(8,534)


502


(3,768)


5,479









Comprehensive income

155,120


96,540


555,613


419,983

Less: Comprehensive income attributable to noncontrolling interests

13,367


13,241


52,602


41,958

Comprehensive income attributable to UHS

$141,753


$83,299


$503,011


$378,025









 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)











September 30,



December 31,




2015



2014

Assets







Current assets:







    Cash and cash equivalents


$

39,523


$

32,069

    Accounts receivable, net



1,328,300



1,282,735

    Supplies



112,718



108,115

    Deferred income taxes



134,554



114,565

    Other current assets



81,459



77,654

          Total current assets



1,696,554



1,615,138








Property and equipment



6,515,914



6,212,030

Less: accumulated depreciation



(2,739,822)



(2,532,341)




3,776,092



3,679,689








Other assets:







    Goodwill



3,388,378



3,291,213

    Deferred charges



35,113



40,319

    Other



310,741



348,084



$

9,206,878


$

8,974,443








Liabilities and Stockholders' Equity







Current liabilities:







    Current maturities of long-term debt


$

84,883


$

68,319

    Accounts payable and accrued liabilities



1,102,616



1,113,062

    Federal and state taxes



8,697



1,446

          Total current liabilities



1,196,196



1,182,827








Other noncurrent liabilities



292,441



268,555

Long-term debt



3,009,954



3,210,215

Deferred income taxes



264,358



282,214








Redeemable noncontrolling interest



250,213



239,552








UHS common stockholders' equity



4,133,099



3,735,946

Noncontrolling interest



60,617



55,134

          Total equity



4,193,716



3,791,080










$

9,206,878


$

8,974,443








 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Nine months


ended September 30,


2015


2014





Cash Flows from Operating Activities:




  Net income

$559,381


$414,504

  Adjustments to reconcile net income to net 




cash provided by operating activities:




Depreciation & amortization

295,697


277,506

Stock-based compensation expense

30,145


22,713

Gains on sales of assets and businesses, net of losses

(1,037)


(7,837)

   Write-off of deferred financing costs related to extinguishment of debt

0


19,730

  Changes in assets & liabilities, net of effects from




acquisitions and dispositions:




   Accounts receivable

(60,877)


(98,193)

   Accrued interest

(297)


6,547

   Accrued and deferred income taxes 

(12,568)


(18,392)

   Other working capital accounts 

(54,018)


59,613

   Other assets and deferred charges

6,629


15,868

   Other 

13,140


(7,000)

   Accrued insurance expense, net of commercial premiums paid

75,715


57,729

   Payments made in settlement of self-insurance claims

(55,411)


(53,234)

          Net cash provided by operating activities

796,499


689,554





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(269,578)


(309,361)

   Proceeds received from sale of assets and businesses

2,744


15,178

   Cash paid/reserved related to acquisition of property and businesses

(183,103)


(402,405)

   Costs incurred for purchase and implementation of electronic health records application

0


(11,204)

          Net cash used in investing activities

(449,937)


(707,792)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(207,371)


(842,543)

   Additional borrowings

16,300


969,800

   Financing costs

0


(13,413)

   Repurchase of common shares

(129,862)


(63,292)

   Dividends paid

(29,696)


(19,794)

   Issuance of common stock

6,030


4,907

   Excess income tax benefits related to stock-based compensation

29,287


30,242

   Profit distributions to noncontrolling interests

(35,965)


(25,074)

   Proceeds received from sale/leaseback of real property

12,765


0

          Net cash (used in) provided by financing activities

(338,512)


40,833





   Effect of exchange rate changes on cash and cash equivalents

(596)


(122)

Increase in cash and cash equivalents

7,454


22,473

Cash and cash equivalents, beginning of period

32,069


17,238

Cash and cash equivalents, end of period

$39,523


$39,711





Supplemental Disclosures of Cash Flow Information:




  Interest paid, including early redemption premium and original issue discount write-off in 2014

$79,866


$98,670





  Income taxes paid, net of refunds

$274,124


$212,148





  Noncash purchases of property and equipment

$37,228


$25,326





 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)


























 % Change 


 % Change 








quarter ended


nine months ended



Same Facility:





9/30/2015


9/30/2015













Acute Care Hospitals










Revenues





7.2%


9.2%



Adjusted Admissions





5.1%


5.5%



Adjusted Patient Days





5.6%


6.1%



Revenue Per Adjusted Admission




3.0%


4.1%



Revenue Per Adjusted Patient Day




2.6%


3.5%























Behavioral Health Hospitals



















Revenues





5.0%


5.5%



Adjusted Admissions





1.6%


3.8%



Adjusted Patient Days





1.6%


1.5%



Revenue Per Adjusted Admission




3.1%


1.4%



Revenue Per Adjusted Patient Day




3.1%


3.7%











































UHS Consolidated



Third quarter ended


Nine months ended




9/30/2015


9/30/2014


9/30/2015


9/30/2014











Revenues



$2,227,655


$2,038,717


$6,728,212


$6,028,797

EBITDA   (1)



361,232


292,997


1,180,698


1,012,738

EBITDA Margin (1)



16.2%


14.4%


17.5%


16.8%











Cash Flow From Operations



264,896


231,138


796,499


689,554

Days Sales Outstanding



55


56


54


56

Capital Expenditures  



98,998


122,575


269,578


309,361











Debt 







3,094,837


3,454,818

UHS' Shareholders Equity







4,133,099


3,603,204

Debt / Total Capitalization







42.8%


48.9%

Debt / EBITDA  (2)







1.95


2.59

Debt / Cash From Operations  (2)






2.71


3.46





















Acute Care EBITDAR Margin  (3) 

15.4%


17.1%


18.9%


18.3%

Behavioral Health EBITDAR Margin  (3) 

27.5%


27.6%


28.2%


27.9%





















(1)  Net of Minority Interest 









(2)  Latest 4 quarters










(3)  Same facility basis, before Corporate overhead allocation and minority interest.













 

Universal Health Services, Inc.

Selected Hospital Statistics

For the Three Months ended

September 30, 2015 and 2014



















AS REPORTED:





























                       ACUTE



               BEHAVIORAL HEALTH



09/30/15

09/30/14

%  change


09/30/15

09/30/14

%  change










Hospitals owned and leased


24

24

0.0%


204

202

1.0%

Average licensed beds


5,842

5,769

1.3%


21,158

20,263

4.4%

Patient days


298,761

285,861

4.5%


1,455,450

1,381,789

5.3%

Average daily census


3,247.4

3,107.2

4.5%


15,820.1

15,019.4

5.3%

Occupancy-licensed beds


55.6%

53.9%

3.1%


74.8%

74.1%

0.9%

Admissions


65,288

62,749

4.0%


111,800

108,334

3.2%

Length of stay


4.6

4.6

0.4%


13.0

12.8

2.1%










Inpatient revenue


$4,115,598

$3,616,647

13.8%


$1,876,896

$1,678,222

11.8%

Outpatient revenue


2,444,456

2,058,148

18.8%


202,333

192,032

5.4%

Total patient revenue


6,560,054

5,674,795

15.6%


2,079,229

1,870,254

11.2%

Other revenue


90,753

84,541

7.3%


52,080

46,539

11.9%

Gross hospital revenue


6,650,807

5,759,336

15.5%


2,131,309

1,916,793

11.2%










Total deductions


5,329,234

4,587,776

16.2%


1,015,619

895,528

13.4%










Net hospital revenue before 









  provision for doubtful accounts


1,321,573

1,171,560

12.8%


1,115,690

1,021,265

9.2%










Provision for doubtful accounts


185,232

128,913

43.7%


26,181

28,804

-9.1%










Net hospital revenue 


$1,136,341

$1,042,647

9.0%


$1,089,509

$992,461

9.8%



















SAME FACILITY:




















                      ACUTE



             BEHAVIORAL HEALTH (1)



09/30/15

09/30/14

%  change


09/30/15

09/30/14

%  change










Hospitals owned and leased


24

24

0.0%


181

181

0.0%

Average licensed beds


5,842

5,769

1.3%


20,001

19,802

1.0%

Patient days


298,761

285,861

4.5%


1,376,854

1,350,744

1.9%

Average daily census


3,247.4

3,107.2

4.5%


14,965.8

14,682.0

1.9%

Occupancy-licensed beds


55.6%

53.9%

3.1%


74.8%

74.2%

0.9%

Admissions


65,288

62,749

4.0%


110,058

107,968

1.9%

Length of stay


4.6

4.6

0.4%


12.5

12.5

0.0%



















(1) Quail Run, Timberlawn of Garland and the UK facilities are excluded in both



    current and prior years.
















           

Universal Health Services, Inc.

Selected Hospital Statistics

For the Nine Months ended

September 30, 2015 and 2014



















AS REPORTED:





























                       ACUTE



               BEHAVIORAL HEALTH



09/30/15

09/30/14

%  change


09/30/15

09/30/14

%  change










Hospitals owned and leased


24

24

0.0%


204

202

1.0%

Average licensed beds


5,823

5,776

0.8%


21,054

19,991

5.3%

Patient days


919,491

875,717

5.0%


4,362,069

4,104,323

6.3%

Average daily census


3,368.1

3,207.8

5.0%


15,978.3

15,034.2

6.3%

Occupancy-licensed beds


57.8%

55.5%

4.1%


75.9%

75.2%

0.9%

Admissions


195,925

187,587

4.4%


338,361

319,665

5.8%

Length of stay


4.7

4.7

0.5%


12.9

12.8

0.4%










Inpatient revenue


$12,633,298

$11,217,320

12.6%


$5,565,391

$4,973,633

11.9%

Outpatient revenue


7,132,212

6,083,715

17.2%


623,915

580,627

7.5%

Total patient revenue


19,765,510

17,301,035

14.2%


6,189,306

5,554,260

11.4%

Other revenue


268,398

173,227

54.9%


157,200

135,956

15.6%

Gross hospital revenue


20,033,908

17,474,262

14.6%


6,346,506

5,690,216

11.5%










Total deductions


16,128,232

13,959,584

15.5%


2,989,148

2,644,120

13.0%










Net hospital revenue before 









  provision for doubtful accounts


3,905,676

3,514,678

11.1%


3,357,358

3,046,096

10.2%










Provision for doubtful accounts


458,879

460,319

-0.3%


84,644

82,049

3.2%










Net hospital revenue 


$3,446,797

$3,054,359

12.8%


$3,272,714

$2,964,047

10.4%



















SAME FACILITY:




















                      ACUTE



             BEHAVIORAL HEALTH (1)



09/30/15

09/30/14

%  change


09/30/15

09/30/14

%  change










Hospitals owned and leased


24

24

0.0%


181

181

0.0%

Average licensed beds


5,823

5,776

0.8%


19,883

19,819

0.3%

Patient days


919,491

875,717

5.0%


4,139,144

4,069,666

1.7%

Average daily census


3,368.1

3,207.8

5.0%


15,161.7

14,907.2

1.7%

Occupancy-licensed beds


57.8%

55.5%

4.1%


76.3%

75.2%

1.4%

Admissions


195,925

187,587

4.4%


331,961

319,185

4.0%

Length of stay


4.7

4.7

0.5%


12.5

12.8

-2.2%



















(1) Quail Run, Timberlawn of Garland and the UK facilities are excluded in both



    current and prior years.
















To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/universal-health-services-inc-reports--2015-third-quarter-financial-results-300167160.html

SOURCE Universal Health Services, Inc.

Steve Filton, Chief Financial Officer, 610-768-3300