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Universal Health Services, Inc. Reports 2018 First Quarter Financial Results

04/25/2018
Microphone Webcast - Live
Q1 2018 Universal Health Services Earnings Conference Call
4/26/18 at 9:00 a.m. ET
Consolidated Results of Operations, As Reported and As Adjusted - Three-month periods ended March 31, 2018 and 2017:

KING OF PRUSSIA, Pa., April 25, 2018 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $223.8 million, or $2.36 per diluted share, during the first quarter of 2018 as compared to $206.1 million, or $2.12 per diluted share, during the comparable quarter of 2017.  Net revenues increased 2.9% to $2.69 billion during the first quarter of 2018 as compared to $2.61 billion during the first quarter of 2017.

For the three-month period ended March 31, 2018, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), was $232.1 million, or $2.45 per diluted share, as compared to $204.4 million, or $2.10 per diluted share, during the first quarter of 2017. 

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2018, is a net aggregate unfavorable after-tax impact of $8.3 million, or $.09 per diluted share, consisting of: (i) an unfavorable after-tax impact of $9.9 million, or $.11 per diluted share, resulting from a $13 million pre-tax increase in the reserve established in connection with the discussions with the Department of Justice ("DOJ"), as discussed below, and; (ii) a favorable after-tax impact of $1.6 million, or $.02 per diluted share, resulting from our 2017 adoption of ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09").  Beginning in 2018, the amount of depreciation and amortization expense recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals no longer warrants inclusion in our presentation of adjusted net income attributable to UHS. 

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2017, is a net aggregate favorable after-tax impact of $1.7 million, or $.02 per diluted share, consisting of: (i) a favorable after-tax impact of $6.8 million, or $.07 per diluted share, related to our adoption of ASU 2016-09, and; (ii) an unfavorable after-tax impact of $5.1 million, or $.05 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.  

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI"), was $442.1 million during the first quarter of 2018 as compared to $460.3 million during the first quarter of 2017.  Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of the above-mentioned $13.0 million pre-tax increase in the DOJ reserve recorded during the first quarter of 2018, was $455.1 million during the first quarter of 2018 as compared to $460.3 million during the first quarter of 2017.

Acute Care Services – Three-month periods ended March 31, 2018 and 2017:
During the first quarter of 2018, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 2.3% and adjusted patient days increased 5.4%, as compared to the first quarter of 2017. At these facilities, net revenue per adjusted admission increased 3.4% while net revenue per adjusted patient day increased 0.4% during the first quarter of 2018 as compared to the comparable quarter of 2017. Net revenues from our acute care services on a same facility basis increased 3.7% during the first quarter of 2018 as compared to the comparable quarter of the prior year.

Behavioral Health Care Services – Three-month periods ended March 31, 2018 and 2017:
During the first quarter of 2018, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 1.6% while adjusted patient days increased 0.4% as compared to the first quarter of 2017. At these facilities, net revenue per adjusted admission increased 2.0% while net revenue per adjusted patient day increased 3.2% during the first quarter of 2018 as compared to the comparable quarter in 2017. On a same facility basis, our behavioral health care services' net revenues increased 3.0% during the first quarter of 2018 as compared to the first quarter of 2017.   

Net Cash Provided by Operating Activities and Share Repurchase Program:
For the three months ended March 31, 2018, our net cash provided by operating activities was $364 million as compared to $483 million generated during the first quarter of 2017. The $119 million decrease was due to: (i) a $38 million unfavorable change in cash flows from foreign currency forward exchange contracts related to our investments in the U.K; (ii) a $67 million unfavorable change in accounts receivable; (iii) a $41 million unfavorable change in accrued and deferred income taxes, partially offset by; (iv) $27 million of other combined net favorable changes.

In November of 2017, our Board of Directors authorized a $400 million increase to our stock repurchase program, which increased the aggregate authorization to $1.2 billion from the previous $800 million authorization approved during 2016 and 2014.  Pursuant to this program, we may purchase shares of our Class B Common Stock, from time to time as conditions allow, on the open market or in negotiated private transactions. 

In conjunction with our stock repurchase program, during the first quarter of 2018, we have repurchased approximately 42,000 shares at an aggregate cost of $4.6 million (approximately $110 per share).  Since inception of the program through March 31, 2018, we have repurchased approximately 7.39 million shares at an aggregate cost of $840.9 million (approximately $114 per share). 

Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 26, 2018. 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.

Reserve-DOJ:
During the first quarter of 2018, we recorded a $13 million pre-tax increase to the reserve established in connection with the civil aspects of the government's investigation of certain of our behavioral health care facilities, increasing the aggregate pre-tax reserve to $35 million.  Changes in the reserve may be required in future periods as discussions with the DOJ continue and additional information becomes available.  We cannot predict the ultimate resolution of this matter and therefore can provide no assurance that final amounts paid in settlement or otherwise, if any, or associated costs, will not differ materially from our established reserve.  Please see Item 3-Legal Proceedings in our Form 10-K for the year ended December 31, 2017 for additional disclosure in connection with this matter.

 

Adoption of new revenue recognition standard:
On January 1, 2018, we adopted, using the modified retrospective approach, ASU 2014-09 and ASU 2016-08, "Revenue from Contracts with Customers (Topic 606)" and "Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)", respectively, which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The most significant change from the adoption of the new standard relates to our estimation for the allowance for doubtful accounts. Under the previous standards, our estimate for amounts not expected to be collected based upon our historical experience, were reflected as provision for doubtful accounts, included within net revenue. Under the new standard, our estimate for amounts not expected to be collected based on historical experience will continue to be recognized as a reduction to net revenue, however, not reflected separately as provision for doubtful accounts. Under the new standard, subsequent changes in estimate of collectability due to a change in the financial status of a payor, for example a bankruptcy, will be recognized as bad debt expense in operating charges. The adoption of this ASU in 2018, and amounts recognized as bad debt expense and included in other operating expenses, did not have a material impact on our consolidated financial statements.      

Tax Cuts and Jobs Act of 2017:
Effective January 1, 2018, our provision for income taxes, net income attributable to UHS, and net income attributable to UHS per diluted share, were favorably impacted by the Tax Cuts and Jobs Act of 2017 which made broad and complex changes to the U.S. tax code including, among other things, reducing the U.S. federal corporate tax rate from 35% to 21%.  

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
One of the nation's largest and most respected hospital companies, Universal Health Services, Inc. ("UHS") has built an impressive record of achievement and performance. Growing steadily since its inception into an esteemed Fortune 500 corporation, UHS today has annual revenue exceeding $10 billion. In 2017, UHS was recognized as one of the World's Most Admired Companies by Fortune; ranked #276 on the Fortune 500, and listed #275 in Forbes inaugural ranking of America's Top 500 Public Companies.

Our operating philosophy is as effective today as it was 40 years ago, enabling us to provide compassionate care to our patients and their loved ones: Build or acquire high quality hospitals in rapidly growing markets, invest in the people and equipment needed to allow each facility to thrive, and become the leading healthcare provider in each community we serve.

Headquartered in King of Prussia, PA, UHS has more than 83,000 employees and through its subsidiaries operates 326 inpatient acute care hospitals and behavioral health facilities and 32 outpatient and other facilities located in 37 states, Washington, D.C., 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, 2017), 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, EBITDA net of NCI and adjusted EBITDA net of NCI, 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 impacting our net income attributable to UHS, such as, changes in the reserve established in connection with our discussions with the DOJ, our adoption of ASU 2016-09, and other potential items that are nonrecurring or non-operational in nature including, but not limited to, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of long-lived assets, and other material 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 attributable to UHS, as determined in accordance with GAAP, and 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, 2017. 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
 

ended March 31,
 

2018

  

2017
       

Net revenues before provision for doubtful accounts

$2,687,516

  

$2,825,472

  Less: Provision for doubtful accounts

0

  

212,614

Net revenues

2,687,516

  

2,612,858
       

Operating charges:

      

   Salaries, wages and benefits

1,300,148

  

1,237,964

   Other operating expenses

620,819

  

607,360

   Supplies expense

292,929

  

277,614

   Depreciation and amortization

113,103

  

110,798

   Lease and rental expense

26,703

  

25,189
 

2,353,702

  

2,258,925
       

Income from operations

333,814

  

353,933
       

Interest expense, net

37,576

  

35,507
       

Income before income taxes

296,238

  

318,426
       

Provision for income taxes

67,569

  

107,899
       

Net income

228,669

  

210,527
       

Less:  Net income attributable to

      

noncontrolling interests ("NCI")

4,837

  

4,472
       

Net income attributable to UHS

$223,832

  

$206,055
       
       
       
       
       
       

Basic earnings per share attributable to UHS (a)

$2.37

  

$2.13
       

Diluted earnings per share attributable to UHS (a)

$2.36

  

$2.12
       

 

 

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)
       
 

Three months

(a) Earnings per share calculation:

ended March 31,
 

2018

  

2017

Basic and diluted:

      

Net income attributable to UHS

$223,832

  

$206,055

Less: Net income attributable to unvested restricted share grants

(104)

  

(94)

Net income attributable to UHS - basic and diluted

$223,728

  

$205,961
       

Weighted average number of common shares - basic

94,226

  

96,585
       

Basic earnings per share attributable to UHS:

$2.37

  

$2.13
       

Weighted average number of common shares

94,226

  

96,585

Add: Other share equivalents

457

  

787

Weighted average number of common shares and equiv. - diluted

94,683

  

97,372
       

Diluted earnings per share attributable to UHS:

$2.36

  

$2.12
       

 

 

Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule")

For the Three Months ended March 31, 2018 and 2017

(in thousands, except per share amounts)

(unaudited)
               
               
               

Calculation of Earnings/Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA/Adjusted EBITDA net of NCI")
               
 

Three months ended

  

% Net

  

Three months ended

  

% Net
 

March 31, 2018

  

revenues

  

March 31, 2017

  

revenues
               

Net income attributable to UHS

$223,832

      

$206,055

    

   Depreciation and amortization

113,103

      

110,798

    

   Interest expense, net

37,576

      

35,507

    

   Provision for income taxes

67,569

      

107,899

    

EBITDA net of NCI

$442,080

  

16.4%

  

$460,259

  

17.6%
               

Increase in DOJ reserve

13,000

      

-

    

Adjusted EBITDA net of NCI

$455,080

  

16.9%

  

$460,259

  

17.6%
               

Net revenues

$2,687,516

      

$2,612,858

    
               
               
               
               
               

Calculation of Adjusted Net Income Attributable to UHS
               
 

Three months ended

  

Three months ended
 

March 31, 2018

  

March 31, 2017
     

Per

      

Per
 

Amount

  

Diluted Share

  

Amount

  

Diluted Share
               

Net income attributable to UHS

$223,832

  

$2.36

  

$206,055

  

$2.12

Plus/minus after-tax adjustments:

              

Increase in DOJ reserve, after-tax

9,911

  

0.11

  

-

  

-

Impact of ASU 2016-09

(1,598)

  

(0.02)

  

(6,750)

  

(0.07)

EHR depreciation & amortization, after-tax

-

  

-

  

5,073

  

0.05

Subtotal

8,313

  

0.09

  

(1,677)

  

(0.02)

Adjusted net income attributable to UHS

$232,145

  

$2.45

  

$204,378

  

$2.10
               

 

 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)
       
 

Three months
 

ended March 31,
 

2018

  

2017
       

Net income

$228,669

  

$210,527

Other comprehensive income (loss):

      

   Unrealized derivative gains on cash flow hedges

2,124

  

3,066

   Unrealized gain on marketable security

2,367

  

1,094

   Foreign currency translation adjustment

(4,341)

  

7,236

Other comprehensive income before tax

150

  

11,396

Income tax expense related to items of other comprehensive income

1,077

  

1,551

Total other comprehensive income (loss), net of tax

(927)

  

9,845
       

Comprehensive income

227,742

  

220,372

Less: Comprehensive income attributable to noncontrolling interests

4,837

  

4,472

Comprehensive income attributable to UHS

$222,905

  

$215,900
       

 

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)
             
     

March 31,

    

December 31,
     

2018

    

2017

Assets

            

Current assets:

            

    Cash and cash equivalents

  

$

73,053

  

$

74,423

    Accounts receivable, net

    

1,569,803

    

1,500,898

    Supplies

    

137,246

    

136,177

    Other current assets

    

104,624

    

86,504

          Total current assets

    

1,884,726

    

1,798,002
             

Property and equipment

    

8,144,555

    

7,921,126

Less: accumulated depreciation

    

(3,444,003)

    

(3,349,289)
     

4,700,552

    

4,571,837
             

Other assets:

            

    Goodwill

    

3,843,126

    

3,825,157

    Deferred charges

    

8,882

    

9,787

    Deferred income taxes

    

3,072

    

3,007

    Other

    

583,159

    

554,038

Total Assets

  

$

11,023,517

  

$

10,761,828
             

Liabilities and Stockholders' Equity

            

Current liabilities:

            

    Current maturities of long-term debt

  

$

566,248

  

$

545,619

    Accounts payable and accrued liabilities

    

1,366,333

    

1,284,081

    Federal and state taxes

    

86,996

    

18,334

          Total current liabilities

    

2,019,577

    

1,848,034
             

Other noncurrent liabilities

    

311,900

    

306,304

Long-term debt

    

3,355,087

    

3,494,390

Deferred income taxes

    

44,850

    

54,962
             

Redeemable noncontrolling interest

    

6,081

    

6,702
             

UHS common stockholders' equity

    

5,215,646

    

4,989,514

Noncontrolling interest

    

70,376

    

61,922

          Total equity

    

5,286,022

    

5,051,436
             

Total Liabilities and Stockholders' Equity

  

$

11,023,517

  

$

10,761,828
             

 

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)
 

Three months
 

ended March 31,
 

2018

  

2017
       

Cash Flows from Operating Activities:

      

  Net income

$228,669

  

$210,527

  Adjustments to reconcile net income to net 

      

cash provided by operating activities:

      

Depreciation & amortization

113,134

  

110,798

Stock-based compensation expense

19,700

  

15,348

Gain on sale of assets and businesses

(703)

  

0

  Changes in assets & liabilities, net of effects from

      

acquisitions and dispositions:

      

   Accounts receivable

(72,526)

  

(5,362)

   Accrued interest

(6,209)

  

(6,123)

   Accrued and deferred income taxes 

61,674

  

102,269

   Other working capital accounts 

59,032

  

66,877

   Other assets and deferred charges

(5,438)

  

(7,654)

   Other 

(37,642)

  

(229)

   Accrued insurance expense, net of commercial premiums paid

23,125

  

22,007

   Payments made in settlement of self-insurance claims

(18,765)

  

(25,349)

          Net cash provided by operating activities

364,051

  

483,109
       

Cash Flows from Investing Activities:

      

   Property and equipment additions, net of disposals

(189,041)

  

(144,338)

   Acquisition of property and businesses

(20,931)

  

(17,832)

   Proceeds received from sales of assets and businesses

839

  

0

   Costs incurred for purchase and implementation of information technology application

(8,570)

  

(9,456)

   Decrease (increase) in capital reserves of commercial insurance subsidiary

100

  

(3,000)

   Investment in, and advances to,  joint venture

(8,675)

  

0

          Net cash used in investing activities

(226,278)

  

(174,626)
       

Cash Flows from Financing Activities:

      

   Reduction of long-term debt

(140,676)

  

(260,633)

   Additional borrowings

20,500

  

21,600

   Repurchase of common shares

(9,441)

  

(29,167)

   Dividends paid

(9,422)

  

(9,662)

   Issuance of common stock

2,545

  

2,540

   Profit distributions to noncontrolling interests

(4,217)

  

(4,118)

          Net cash used in financing activities

(140,711)

  

(279,440)
       

   Effect of exchange rate changes on cash, cash equivalents and restricted cash

1,857

  

285

(Decrease) increase in cash, cash equivalents and restricted cash

(1,081)

  

29,328

Cash, cash equivalents and restricted cash, beginning of period

167,297

  

121,950

Cash, cash equivalents and restricted cash, end of period

$166,216

  

$151,278
       

Supplemental Disclosures of Cash Flow Information:

      

  Interest paid

$41,539

  

$39,404
       

  Income taxes paid, net of refunds

$2,749

  

$5,253
       

  Noncash purchases of property and equipment

$84,708

  

$56,427
       
       

 

 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)
           
           
           
         

 % Change 
         

Quarter ended

Same Facility:

        

3/31/2018
           

Acute Care Hospitals

          

Revenues

        

3.7%

Adjusted Admissions

        

2.3%

Adjusted Patient Days

        

5.4%

Revenue Per Adjusted Admission

      

3.4%

Revenue Per Adjusted Patient Day

      

0.4%
           
           
           

Behavioral Health Hospitals

          

Revenues

        

3.0%

Adjusted Admissions

        

1.6%

Adjusted Patient Days

        

0.4%

Revenue Per Adjusted Admission

      

2.0%

Revenue Per Adjusted Patient Day

      

3.2%
           
           
           
           

UHS Consolidated

    

First quarter ended
     

3/31/2018

  

3/31/2017
           

Revenues

    

$2,687,516

  

$2,612,858

EBITDA net of NCI

    

$442,080

  

$460,259

EBITDA Margin net of NCI

    

16.4%

  

17.6%

Adjusted EBITDA net of NCI

    

$455,080

  

$460,259

Adjusted EBITDA Margin net of NCI

  

16.9%

  

17.6%
           
           

Cash Flow From Operations

    

$364,051

  

$483,109

Days Sales Outstanding

    

53

  

50

Capital Expenditures  

    

$189,041

  

$144,338
           

Debt 

    

$3,921,335

  

$3,898,579

UHS' Shareholders Equity

    

$5,215,646

  

$4,735,962

Debt / Total Capitalization

    

42.9%

  

45.2%

Debt / EBITDA net of NCI (1)

    

2.32

  

2.32

Debt / Adjusted EBITDA net of NCI (1)

2.30

  

2.32

Debt / Cash From Operations (1)

    

3.69

  

2.91
           

(1)  Latest 4 quarters

          

 

 

Universal Health Services, Inc.

Acute Care Hospital Services

For the three months ended

March 31, 2018 and 2017

(in thousands)
                 
                 

Same Facility Basis - Acute Care Hospital Services

                
                 
   

Three months ended

  

Three months ended
   

March 31, 2018

  

March 31, 2017
   

Amount

  

% of Net
Revenues 

  

Amount

  

% of Net
Revenues 

Net revenues before provision for doubtful accounts

  

$1,423,653

      

$1,553,467

    

Less: Provision for doubtful accounts

  

-

      

180,983

    

Net revenues

  

1,423,653

  

100.0%

  

1,372,484

  

100.0%

Operating charges:

                

Salaries, wages and benefits

  

581,573

  

40.9%

  

554,902

  

40.4%

Other operating expenses

  

307,397

  

21.6%

  

315,223

  

23.0%

Supplies expense

  

243,153

  

17.1%

  

228,485

  

16.6%

Depreciation and amortization

  

72,150

  

5.1%

  

63,049

  

4.6%

Lease and rental expense

  

14,283

  

1.0%

  

13,916

  

1.0%

Subtotal-operating expenses

  

1,218,556

  

85.6%

  

1,175,575

  

85.7%

Income from operations

  

205,097

  

14.4%

  

196,909

  

14.3%

Interest expense, net

  

531

  

0.0%

  

745

  

0.1%

Income before income taxes

  

204,566

  

14.4%

  

196,164

  

14.3%
                 
                 
                 

All Acute Care Hospital Services

                
                 
   

Three months ended

  

Three months ended
   

March 31, 2018

  

March 31, 2017
   

Amount

  

% of Net
Revenues

  

Amount

  

% of Net
Revenues 

Net revenues before provision for doubtful accounts

  

$1,445,632

      

$1,570,530

    

Less: Provision for doubtful accounts

  

-

      

180,983

    

Net revenues

  

1,445,632

  

100.0%

  

1,389,547

  

100.0%

Operating charges:

                

Salaries, wages and benefits

  

581,768

  

40.2%

  

554,960

  

39.9%

Other operating expenses

  

330,036

  

22.8%

  

332,299

  

23.9%

Supplies expense

  

243,153

  

16.8%

  

228,485

  

16.4%

Depreciation and amortization

  

72,150

  

5.0%

  

71,338

  

5.1%

Lease and rental expense

  

14,283

  

1.0%

  

13,916

  

1.0%

Subtotal-operating expenses

  

1,241,390

  

85.9%

  

1,200,998

  

86.4%

Income from operations

  

204,242

  

14.1%

  

188,549

  

13.6%

Interest expense, net

  

531

  

0.0%

  

745

  

0.1%

Income before income taxes

  

203,711

  

14.1%

  

187,804

  

13.5%
                 

 

We believe that providing our results on a "Same Facility" basis (which is a non-GAAP measure), which includes the operating results for facilities and businesses operated in both the current year and prior year periods, is helpful to our investors as a measure of our operating performance. Our Same Facility results also neutralize (if applicable), the effect of items that are nonrecurring or non-operational in nature including items such as, but not limited to, reserves for various matters, settlements, legal judgments and lawsuits, cost related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of long-lived assets, the impact of the EHR applications (in 2017) and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. Our Same Facility basis results exclude from net revenues and other operating expenses, provider tax assessments incurred in each period. However, these provider tax assessments are included in net revenues and other operating expenses as reflected in the table under All Acute Care Hospital Services. The provider tax assessments had no impact on the income before income taxes as reflected on the above tables since the amounts offset between net revenues and other operating expenses. To obtain a complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income as determined in accordance with GAAP and as presented herein and the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2017.
                         

The All Acute Care Hospital Services table summarizes the results of operations for all our acute care operations during the periods presented. These amounts include: (i) our acute care results on a same facility basis, as indicated above; (ii) the impact of the implementation of EHR applications at our acute care hospitals (in 2017); (iii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iv) certain other amounts including the results of facilities acquired or opened during the last twelve months.

 

 

Universal Health Services, Inc.

Behavioral Health Care Services

For the three months ended

March 31, 2018 and 2017

(in thousands)
                 
                 

Same Facility - Behavioral Health Care Services

                
                 
   

Three months ended

  

Three months ended
   

March 31, 2018

  

March 31, 2017
   

Amount

  

% of Net
Revenues 

  

Amount

  

% of Net
Revenues 

Net revenues before provision for doubtful accounts

  

$1,209,937

      

$1,205,077

    

Less: Provision for doubtful accounts

  

-

      

30,636

    

Net revenues

  

1,209,937

  

100.0%

  

1,174,441

  

100.0%

Operating charges:

                

Salaries, wages and benefits

  

630,568

  

52.1%

  

597,092

  

50.8%

Other operating expenses

  

230,347

  

19.0%

  

229,888

  

19.6%

Supplies expense

  

48,769

  

4.0%

  

47,747

  

4.1%

Depreciation and amortization

  

36,743

  

3.0%

  

35,316

  

3.0%

Lease and rental expense

  

12,008

  

1.0%

  

10,761

  

0.9%

Subtotal-operating expenses

  

958,435

  

79.2%

  

920,804

  

78.4%

Income from operations

  

251,502

  

20.8%

  

253,637

  

21.6%

Interest expense, net

  

427

  

0.0%

  

723

  

0.1%

Income before income taxes

  

251,075

  

20.8%

  

252,914

  

21.5%
                 
                 
                 

All Behavioral Health Care Services

                
                 
   

Three months ended

  

Three months ended
   

March 31, 2018

  

March 31, 2017
   

Amount

  

% of Net
Revenues

  

Amount

  

% of Net
Revenues 

Net revenues before provision for doubtful accounts

  

$1,237,996

      

$1,249,748

    

Less: Provision for doubtful accounts

  

-

      

31,626

    

Net revenues

  

1,237,996

  

100.0%

  

1,218,122

  

100.0%

Operating charges:

                

Salaries, wages and benefits

  

642,128

  

51.9%

  

613,849

  

50.4%

Other operating expenses

  

256,402

  

20.7%

  

254,478

  

20.9%

Supplies expense

  

49,536

  

4.0%

  

49,036

  

4.0%

Depreciation and amortization

  

38,454

  

3.1%

  

36,945

  

3.0%

Lease and rental expense

  

12,301

  

1.0%

  

11,160

  

0.9%

Subtotal-operating expenses

  

998,821

  

80.7%

  

965,468

  

79.3%

Income from operations

  

239,175

  

19.3%

  

252,654

  

20.7%

Interest expense, net

  

427

  

0.0%

  

723

  

0.1%

Income before income taxes

  

238,748

  

19.3%

  

251,931

  

20.7%
                 

 

We believe that providing our results on a "Same Facility" basis (which is a non-GAAP measure), which includes the operating results for facilities and businesses operated in both the current year and prior year periods, is helpful to our investors as a measure of our operating performance. Our Same Facility results also neutralize (if applicable), the effect of items that are nonrecurring or non-operational in nature including items such as, but not limited to, reserves for various matters, settlements, legal judgments and lawsuits, cost related to extinguishment of debt, gains/losses on sales of assets and businesses, 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. Our Same Facility basis results exclude from net revenues and other operating expenses, provider tax assessments incurred in each period.However, these provider tax assessments are included in net revenues and other operating expenses as reflected in the table under All Behavioral Health Care Services. The provider tax assessments had no impact on the income before income taxes as reflected on the above tables since the amounts offset between net revenues and other operating expenses. To obtain a complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income as determined in accordance with GAAP and as presented herein and in the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2017.
                         

The All Behavioral Health Care Servicestable summarizes the results of operations for all our behavioral health care facilities during the periods presented. These amounts include: (i) our behavioral health results on a same facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including the results of facilities acquired or opened during the last twelve months.

 

 

Universal Health Services, Inc.

Selected Hospital Statistics

For the three months ended

March 31, 2018 and 2017
                         
                         

AS REPORTED:

                        
                         
                         
   

ACUTE

  

BEHAVIORAL HEALTH
   

3/31/18

  

3/31/17

  

%  change

  

3/31/18

  

3/31/17

  

%  change
                         

Hospitals owned and leased

  

26

  

26

  

0.0%

  

300

  

292

  

2.7%

Average licensed beds

  

6,161

  

6,107

  

0.9%

  

23,240

  

23,056

  

0.8%

Average available beds

  

5,985

  

5,932

  

0.9%

  

23,158

  

22,875

  

1.2%

Patient days

  

352,818

  

333,000

  

6.0%

  

1,581,996

  

1,592,454

  

-0.7%

Average daily census

  

3,920.2

  

3,700.0

  

6.0%

  

17,577.7

  

17,693.9

  

-0.7%

Occupancy-licensed beds

  

63.6%

  

60.6%

  

5.0%

  

75.6%

  

76.7%

  

-1.4%

Occupancy-available beds

  

65.5%

  

62.4%

  

5.0%

  

75.9%

  

77.4%

  

-1.9%

Admissions

  

76,643

  

74,351

  

3.1%

  

119,980

  

118,330

  

1.4%

Length of stay

  

4.6

  

4.5

  

2.8%

  

13.2

  

13.5

  

-2.0%
                         

Inpatient revenue

  

$6,361,766

  

$5,597,850

  

13.6%

  

$2,402,258

  

$2,183,002

  

10.0%

Outpatient revenue

  

3,714,661

  

3,294,177

  

12.8%

  

255,181

  

246,460

  

3.5%

Total patient revenue

  

10,076,427

  

8,892,027

  

13.3%

  

2,657,439

  

2,429,462

  

9.4%

Other revenue

  

98,187

  

121,265

  

-19.0%

  

50,033

  

51,476

  

-2.8%

Gross hospital revenue

  

10,174,614

  

9,013,292

  

12.9%

  

2,707,472

  

2,480,938

  

9.1%

Total deductions

  

8,728,982

  

7,442,762

  

17.3%

  

1,469,476

  

1,231,190

  

19.4%

Net hospital revenue before 

                        

  provision for doubtful accounts

  

1,445,632

  

1,570,530

  

-8.0%

  

1,237,996

  

1,249,748

  

-0.9%

Provision for doubtful accounts

  

0

  

180,983

  

-100.0%

  

0

  

31,626

  

-100.0%

Net hospital revenue 

  

$1,445,632

  

$1,389,547

  

4.0%

  

$1,237,996

  

$1,218,122

  

1.6%
                         
                         

SAME FACILITY:

                        
                         
   

ACUTE

  

BEHAVIORAL HEALTH
   

3/31/18

  

3/31/17

  

%  change

  

3/31/18

  

3/31/17

  

%  change
                         

Hospitals owned and leased

  

26

  

26

  

0.0%

  

286

  

286

  

0.0%

Average licensed beds

  

6,161

  

6,107

  

0.9%

  

22,545

  

22,251

  

1.3%

Average available beds

  

5,985

  

5,932

  

0.9%

  

22,463

  

22,170

  

1.3%

Patient days

  

352,818

  

333,000

  

6.0%

  

1,558,863

  

1,544,760

  

0.9%

Average daily census

  

3,920.2

  

3,700.0

  

6.0%

  

17,320.7

  

17,164.0

  

0.9%

Occupancy-licensed beds

  

63.6%

  

60.6%

  

5.0%

  

76.8%

  

77.1%

  

-0.4%

Occupancy-available beds

  

65.5%

  

62.4%

  

5.0%

  

77.1%

  

77.4%

  

-0.4%

Admissions

  

76,643

  

74,351

  

3.1%

  

118,631

  

116,197

  

2.1%

Length of stay

  

4.6

  

4.5

  

2.8%

  

13.1

  

13.3

  

-1.2%
                         

 

 

Cision View original content:http://www.prnewswire.com/news-releases/universal-health-services-inc-reports-2018-first-quarter-financial-results-300636682.html

SOURCE Universal Health Services, Inc.

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