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Press release from PR Newswire

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

Tuesday, October 30, 2012

Universal Health Services, Inc. Reports Financial Results For Three And Nine Months Ended September 30, 2012 And Revises 2012 Full Year Guidance16:01 EDT Tuesday, October 30, 2012KING OF PRUSSIA, Pa., Oct. 30, 2012 /PRNewswire/ -- Consolidated Results of Operations, As Reported ? Three and nine-month periods ended September 30, 2012 and 2011:Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $71.8 million, or $.73 per diluted share, during the third quarter of 2012 as compared to $85.1 million, or $.86 per diluted share, during the comparable quarter of 2011.  Net revenues increased 1% to $1.68 billion during the third quarter of 2012 as compared to $1.66 billion during the third quarter of 2011.  Reported net income attributable to UHS was $308.0 million, or $3.15 per diluted share, during the first nine months of 2012 as compared to $302.9 million, or $3.06 per diluted share, during the comparable period of 2011.  Net revenues increased 2% to $5.20 billion during the first nine months of 2012 as compared to $5.10 billion during the comparable period of 2011.  Consolidated Results of Operations, As Adjusted ? Three and nine-month periods ended September 30, 2012 and 2011:For the three-month period ended September 30, 2012, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule"), was $88.6 million, or $.91 per diluted share. There were no such adjustments required to our reported net income attributable to UHS for the third quarter of 2011.     As reflected on the Supplemental Schedule, included in our reported results during the third quarter of 2012, was an aggregate net unfavorable after-tax impact of $16.8 million, or $.18 per diluted share, consisting of: (i) an after-tax charge of $18.1 million ($29.2 million pre-tax), or $.19 per diluted share, resulting from the write-off of deferred financing costs related to the portion of our Term Loan B credit facility that was extinguished during the third quarter of 2012, and; (ii) a favorable after-tax impact of approximately $1.3 million, or $.01 per diluted share, related to the incentive income and expenses recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals (as discussed below in Accounting for HITECH Act incentive income and EHR expenses).  For the nine-month period ended September 30, 2012, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $308.4 million, or $3.15 per diluted share. There were no such adjustments required to our reported net income attributable to UHS for the first nine months of 2011.     As reflected on the Supplemental Schedule, included in our reported results during the first nine months of 2012 was a net aggregate favorable after-tax impact of approximately $400,000 consisting of the following:an unfavorable after-tax charge of approximately $3.6 million recorded in connection with the implementation of EHR applications as discussed below in Accounting for HITECH Act incentive income and EHR expenses; 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 quarter of 2012; a favorable after-tax impact of $4.3 million recorded during the first quarter of 2012 representing the 2011 portion of the net Medicaid supplemental reimbursements earned pursuant to the Oklahoma Supplemental Hospital Offset Payment Program ("SHOPP"); an aggregate unfavorable after-tax impact of $5.1 million recorded during the first quarter of 2012 resulting from: (i) the revised Supplemental Security Income ratios utilized for calculating Medicare disproportionate share hospital reimbursements for federal fiscal years 2006 through 2009 ($2.4 million unfavorable after-tax impact), and; (ii) the write-off of receivables related to revenues recorded during 2011 at two of our acute care hospitals located in Florida resulting from reductions in certain county reimbursements due to reductions in federal matching Inter-Governmental Transfer funds ($2.7 million unfavorable after-tax impact); a net favorable after-tax impact of $3.4 million consisting primarily of the 2011 portion of net Medicaid supplemental revenues recorded during the second quarter of 2012, and; an unfavorable after-tax charge of $18.1 million resulting from the above-mentioned write-off of deferred financing costs related to the portion of our Term Loan B credit facility that was extinguished during the third quarter of 2012. Acute Care Services ? Three and nine-month periods ended September 30, 2012 and 2011:During the third quarter of 2012, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) decreased 1.7% and adjusted patient days decreased 1.0%, as compared to the third quarter of 2011. Net revenues at these facilities decreased 0.4% during the third quarter of 2012 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 1.3% while net revenue per adjusted patient day increased 0.6% during the third quarter of 2012 as compared to the comparable quarter of the prior year. On a same facility basis, the operating margin at our acute care hospitals decreased to 13.4% during the third quarter of 2012 as compared to 14.8% during the third quarter of 2011. We define operating margin as net revenues less salaries, wages and benefits, other operating expenses and supplies expense (excluding the impact of the items mentioned above and excluding the EHR impact, as indicated on the Supplemental Schedule).During the first nine months of 2012, at our acute care hospitals on a same facility basis, adjusted admissions decreased 0.3% and adjusted patient days increased 0.3%, as compared to the comparable nine-month period of 2011. Net revenues at these facilities decreased 0.5% during the first nine months of 2012 as compared to the comparable period of 2011.  At these facilities, net revenue per adjusted admission decreased 0.2% while net revenue per adjusted patient day decreased 0.7% during the first nine months of 2012, as compared to the comparable period of 2011. On a same facility basis, the operating margin at our acute care hospitals decreased to 16.2% during the first nine months of 2012, as compared to 17.8% during the comparable nine-month period of 2011. We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $259 million and $246 million during the three-month periods ended September 30, 2012 and 2011, respectively, and $840 million and $708 million during the nine-month periods ended September 30, 2012 and 2011, respectively. Behavioral Health Care Services ? Three and nine-month periods ended September 30, 2012 and 2011:During the third quarter of 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 2.6% while adjusted patient days increased 0.7%, as compared to the third quarter of 2011. Net revenues at these facilities increased 3.4% during the third quarter of 2012, as compared to the comparable quarter in 2011. At these facilities, net revenue per adjusted admission increased 0.7% while net revenue per adjusted patient day increased 2.6% during the third quarter of 2012 over the comparable quarter in 2011. The operating margin at our behavioral health care facilities owned during both periods increased to 27.8% during the third quarter of 2012, as compared to 26.5% during the third quarter of 2011.  During the first nine months of 2012, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 5.0% while adjusted patient days increased 1.2%, as compared to the comparable period of 2011. Net revenues at these facilities increased 4.2% during the first nine months of 2012, as compared to the comparable period of 2011. At these facilities, net revenue per adjusted admission decreased 0.7% while net revenue per adjusted patient day increased 2.9% during the first nine months of 2012 over the comparable period of 2011. The operating margin at our behavioral health care facilities owned during both periods increased to 27.8% during the first nine months of 2012, as compared to 26.7% during the comparable period of 2011.  Accounting for HITECH Act incentive income and EHR expenses:The health information technology provisions of the American Recovery and Reinvestment Act (referred to as the "HITECH Act") established criteria related to the "meaningful use" of electronic health records ("EHR") for acute care hospitals and established requirements for the Medicare and Medicaid EHR payment incentive programs.    During 2011, we began implementing EHR applications at certain of our acute care hospitals and will continue to do so, on a hospital-by-hospital basis, until completion which is scheduled to occur by the end of June, 2013. As of September 30, 2012, EHR applications have been implemented at eleven of our acute care hospitals, the majority of which occurred during the second and third quarters of 2012.  Our acute care hospitals will be eligible for Medicare and Medicaid EHR incentive payments upon implementation of the EHR application, assuming they meet the "meaningful use" criteria.  Eight hospitals met the "meaningful use" criteria during the first nine months of 2012 and one additional hospital may qualify by the end of 2012.As reflected on the Supplemental Schedule, our consolidated results of operations for the three-month period ended September 30, 2012 includes the favorable after-tax impact of approximately $1.3 million, or $.01 per diluted share, recorded in connection with the implementation of EHR applications. This favorable impact, which on a pre-tax basis amounted to $2.2 million, net of $1.1 million attributable to third-party, non-controlling ownership interests, consists of $10.6 million of EHR incentive income offset by $2.8 million of salaries, wages, benefits and other operating expenses and $4.5 million of depreciation and amortization expense.  The EHR incentive income recorded during the third quarter of 2012 consists of state Medicaid EHR incentive payments attributable to seven acute care hospitals that met the "meaningful use" criteria during the quarter.  As reflected on the Supplemental Schedule, our consolidated results of operations for the nine-month period ended September 30, 2012 includes an after-tax charge of approximately $3.6 million, or $.04 per diluted share, recorded in connection with the implementation of EHR applications. This charge, which on a pre-tax basis amounted to $5.9 million, net of $800,000 attributable to third-party, non-controlling ownership interests, consists of $12.5 million of EHR incentive income offset by $11.1 million of salaries, wages, benefits and other operating expenses and $8.1 million of depreciation and amortization expense.  Revised 2012 Full Year Guidance:The operating trends and financial results experienced by our behavioral health facilities met our expectations during the first nine months of 2012.  However, against the backdrop of a continued sluggish economic recovery, the operating trends and financial results experienced by our acute care hospitals were below our expectations for the third quarter of 2012 and those trends are expected to continue during the fourth quarter of this year.  Based upon our consolidated financial results experienced during the first nine months of 2012, and most notably the results experienced by our acute care hospitals during the third quarter of 2012, our revised estimated range of adjusted net income attributable to UHS, for the year ended December 31, 2012 is $4.00 to $4.10 per diluted share. This revised guidance, which excludes the favorable EHR impact mentioned above and the impact of the other items reflected on the Supplemental Schedule for the nine months ended September 30, 2012, represents a decrease of approximately 6% from the previously provided range of $4.25 to $4.35 per diluted share.    This guidance range also excludes the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other material amounts that may be reflected in our financial statements that relate to prior periods. It is also subject to certain conditions including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.The operating pressures that we continue to experience in many of our acute care markets has increased the volatility of the financial results of our acute care hospitals making estimation of future results more challenging.  However, we continue to actively and aggressively respond to these challenges through strategic initiatives and operational enhancements such as physician recruitment and integration and implementation of expense controls and other operating efficiencies.              Conference call information:We will hold a conference call for investors and analysts at 9:00 a.m. Eastern Time on October 31, 2012. The dial-in number is 1-877-648-7971.  A live broadcast of the conference call will be available on our website at www.uhsinc.com.  A replay of the call will follow shortly after conclusion of the live call and will be available for one full year.General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:Universal Health Services, Inc. ("UHS") is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico and the U.S. Virgin Islands.  It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT).  For additional information on the Company, visit our web site: http://www.uhsinc.com.This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2011 and in Item 2-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended June 30, 2012), may cause the results to differ materially from those anticipated in the forward-looking statements.  Many of the factors that will determine our future results are beyond our capability to control or predict.  These statements are subject to risks and uncertainties and therefore actual results may differ materially.  Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.During the first quarter of 2012, we adopted the Financial Accounting Standards Board's Accounting Standards Update No. 2011-07, "Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities," which required health care entities to change the presentation in their statement of operations by reclassifying the provision for bad debts associated with patient service revenue from an operating expense to a deduction from patient service revenue (net of contractual allowances and discounts). As a result, the provision for doubtful accounts for our acute care and behavioral health care facilities is reflected as a deduction for net revenues in the accompanying consolidated statements of income for the three and nine-month periods ended September 30, 2012 and 2011. The adoption of this standard had no impact on our financial position or results of operations. As mentioned above, our acute care hospitals may qualify for EHR incentive payments upon implementation of an EHR application assuming they meet the "meaningful use" criteria. However, there can be no assurance that we (our acute care hospitals) will ultimately qualify for these incentive payments and, should we qualify, we are unable to quantify the amount of incentive payments we may receive since the amounts are dependent upon various factors including the implementation timing at each hospital. Should we qualify for incentive payments, there may be timing differences in the recognition of the incentive income and expenses recorded in connection with the implementation of the EHR application which may cause material period-to-period changes in our future results of operations. Hospitals that do not qualify as a meaningful user of EHR by 2015 are subject to a reduced market basket update to the inpatient prospective payment system standardized amount in 2015 and each subsequent fiscal year. Although we believe that our acute care hospitals will be in compliance with the EHR standards by 2015, there can be no assurance that all of our facilities will be in compliance and therefore not subject to the penalty provision of the HITECH Act. We believe that operating income, operating margin, adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share and earnings before interest, taxes, depreciation and amortization ("EBITDA"), which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of items that are nonrecurring or non-operational in nature including items such as, but not limited to, costs related to extinguishment of debt, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods.  To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2011 and Report on Form 10-Q for the quarterly period ended June 30, 2012. Since the items included or excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be alternatives to net income as a measure of our operating performance or profitability.  Since these measures, as presented, are not determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable to other similarly titled measures of other companies.  Investors are encouraged to use GAAP measures when evaluating our financial performance.          (more)Universal Health Services, Inc.Consolidated Statements of Income(in thousands, except per share amounts)(unaudited)Three monthsNine monthsended September 30,ended September 30,2012201120122011Net revenues before provision for doubtful accounts$1,869,263$1,814,686$5,718,676$5,553,268  Less: Provision for doubtful accounts188,910152,011522,203456,042Net revenues1,680,3531,662,6755,196,4735,097,226Operating charges:   Salaries, wages and benefits838,075828,6062,565,0522,492,570   Other operating expenses362,687343,8731,059,0481,030,492   Supplies expense191,747198,794594,924603,657   EHR incentive income(10,551)-(12,506)-   Depreciation and amortization77,03273,170221,807213,828   Lease and rental expense23,48122,70470,90668,501   Costs related to extinguishment of debt29,170-29,170-1,511,6411,467,1474,528,4014,409,048Income from operations168,712195,528668,072688,178Interest expense, net45,20748,452137,805154,677Income before income taxes123,505147,076530,267533,501Provision for income taxes42,13252,234188,880192,638Net income81,37394,842341,387340,863Less:  Income attributable tononcontrolling interests9,5569,78833,40237,967Net income attributable to UHS$71,817$85,054$307,985$302,896Basic earnings per share attributable to UHS (a)$0.74$0.87$3.18$3.10Diluted earnings per share attributable to UHS (a)$0.73$0.86$3.15$3.06 Universal Health Services, Inc.Footnotes to Consolidated Statements of Income(in thousands, except per share amounts)(unaudited)Three monthsNine monthsended September 30,ended September 30,2012201120122011(a) Earnings per share calculation:Basic and diluted:Net income attributable to UHS$71,817$85,054$307,985$302,896Less: Net income attributable to unvested restricted share grants(85)(165)(379)(440)Net income attributable to UHS - basic and diluted$71,732$84,889$307,606$302,456Weighted average number of common shares - basic96,81797,39796,70197,447Basic earnings per share attributable to UHS:$0.74$0.87$3.18$3.10Weighted average number of common shares96,81797,39796,70197,447Add: Other share equivalents7941,2011,0101,461Weighted average number of common shares and equiv. - diluted97,61198,59897,71198,908Diluted earnings per share attributable to UHS:$0.73$0.86$3.15$3.06 Universal Health Services, Inc.Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule")For the three months ended September 30, 2012 and 2011(in thousands, except per share amounts)(unaudited)Calculation of "EBITDA"Three months endedThree months endedSeptember 30, 2012September 30, 2011Net revenues before provision for doubtful accounts$1,869,263$1,814,686  Less: Provision for doubtful accounts188,910152,011Net revenues1,680,353100.0%1,662,675100.0%Operating charges:   Salaries, wages and benefits838,07549.9%828,60649.8%   Other operating expenses362,68721.6%343,87320.7%   Supplies expense191,74711.4%198,79412.0%   EHR incentive income(10,551)-0.6%-0.0%1,381,95882.2%1,371,27382.5%Operating income/margin ("EBITDAR")298,39517.8%291,40217.5%   Lease and rental expense23,48122,704   Income attributable to noncontrolling interests9,5569,788Earnings before, depreciation and amortization, interest expense, and income taxes ("EBITDA")265,35815.8%258,91015.6%   Depreciation and amortization77,03273,170   Costs related to extinguishment of debt29,170-   Interest expense, net45,20748,452Income before income taxes 113,949137,288Provision for income taxes42,13252,234Net income attributable to UHS$71,817$85,054Calculation of Adjusted Net Income Attributable to UHSThree months endedThree months endedSeptember 30, 2012September 30, 2011PerPerAmountDiluted ShareAmountDiluted ShareCalculation of Adjusted Net Income Attributable to UHS - including and excluding EHR impact:Net income attributable to UHS$71,817$0.73$85,054$0.86Plus/minus adjustments:  Costs related to extinguishment of debt, net of income taxes18,1260.19Adjusted net income attributable to UHS - including Electronic Health Records ("EHR") impact$89,943$0.92$85,054$0.86Plus/minus impact of EHR implementation: EHR-related incentive income, pre-tax(10,551)EHR-related salaries, wages and benefits, pre-tax2,779EHR-related other operating costs, pre-tax(82)EHR-related depreciation & amortization, pre-tax4,575EHR-related minority interest in earnings of consolidated entities, pre-tax1,122Income tax provision on EHR-related items 817After-tax impact of EHR-related items(1,340)(0.01)--Adjusted net income attributable to UHS$88,603$0.91$85,054$0.86 Universal Health Services, Inc.Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule")For the nine months ended September 30, 2012 and 2011(in thousands, except per share amounts)(unaudited)Calculation of "EBITDA"Nine months endedNine months endedSeptember 30, 2012September 30, 2011Net revenues before provision for doubtful accounts$5,718,676$5,553,268  Less: Provision for doubtful accounts522,203456,042Net revenues5,196,473100.0%5,097,226100.0%Operating charges:   Salaries, wages and benefits2,565,05249.4%2,492,57048.9%   Other operating expenses1,059,04820.4%1,030,49220.2%   Supplies expense594,92411.4%603,65711.8%   EHR incentive income(12,506)-0.2%-0.0%4,206,51880.9%4,126,71981.0%Operating income/margin ("EBITDAR")989,95519.1%970,50719.0%   Lease and rental expense70,90668,501   Income attributable to noncontrolling interests33,40237,967Earnings before, depreciation and amortization, interest expense, and income taxes ("EBITDA")885,64717.0%864,03917.0%   Depreciation and amortization221,807213,828   Costs related to extinguishment of debt29,170-   Interest expense, net137,805154,677Income before income taxes 496,865495,534Provision for income taxes188,880192,638Net income attributable to UHS$307,985$302,896Calculation of Adjusted Net Income Attributable to UHSNine months endedNine months endedSeptember 30, 2012September 30, 2011PerPerAmountDiluted ShareAmountDiluted ShareCalculation of Adjusted Net Income Attributable to UHS - including and excluding EHR impact:Net income attributable to UHS$307,985$3.15$302,896$3.06Plus/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 taxes5,149  Net Medicaid reimbursements related to prior years, net of income taxes(3,417)  Costs related to extinguishment of debt, net of income taxes18,126Subtotal after-tax adjustments to net income attributable to UHS(3,224)(0.03)--Adjusted net income attributable to UHS - including Electronic Health Records ("EHR") impact$304,761$3.12$302,896$3.06Plus/minus impact of EHR implementation: EHR-related incentive income, pre-tax(12,506)EHR-related salaries, wages and benefits, pre-tax10,722EHR-related other operating costs, pre-tax314EHR-related depreciation & amortization, pre-tax8,102EHR-related minority interest in earnings of consolidated entities, pre-tax(775)Income tax provision on EHR-related items (2,217)After-tax impact of EHR-related items3,6400.03--Adjusted net income attributable to UHS$308,401$3.15$302,896$3.06 Universal Health Services, Inc.Consolidated Statements of Comprehensive Income(in thousands)(unaudited)Three monthsNine monthsended September 30,ended September 30,2012201120122011Net income$81,373$94,842$341,387$340,863Other comprehensive income (loss):   Unrealized derivative gains (loss) on cash flow hedges(45)(21,360)1,782(39,636)   Amortization of terminated hedge(84)(84)(252)(252)Other comprehensive (loss) income before tax(129)(21,444)1,530(39,888)Income tax (benefit) expense related to items of other comprehensive income (loss)(47)(8,214)585(15,270)Total other comprehensive (loss) income, net of tax(82)(13,230)945(24,618)Comprehensive income81,29181,612342,332316,245Less: Comprehensive income attributable to noncontrolling interests9,5569,78833,40237,967Comprehensive income attributable to UHS$71,735$71,824$308,930$278,278 Universal Health Services, Inc.Condensed Consolidated Balance Sheets(in thousands)(unaudited)September 30,December 31,20122011AssetsCurrent assets:    Cash and cash equivalents$25,652$41,229    Accounts receivable, net1,042,535969,802    Supplies97,01396,775    Deferred income taxes123,131108,324    Other current assets93,02299,859    Assets of facilities held for sale107,07148,916          Total current assets1,488,4241,364,905Property and equipment5,240,9095,106,160Less: accumulated depreciation(1,924,833)(1,818,180)3,316,0763,287,980Other assets:    Goodwill2,594,7402,627,602    Deferred charges87,092111,780    Other294,734272,978$7,781,066$7,665,245Liabilities and Stockholders' EquityCurrent liabilities:    Current maturities of long-term debt$2,499$2,479    Accounts payable and accrued liabilities810,963832,125    Federal and state taxes6,774-    Liabilities of facilities held for sale18,1122,329          Total current liabilities838,348836,933Other noncurrent liabilities408,535401,908Long-term debt3,440,9623,651,428Deferred income taxes195,692209,592Redeemable noncontrolling interest234,056218,266UHS common stockholders' equity2,608,7822,296,352Noncontrolling interest54,69150,766          Total equity2,663,4732,347,118$7,781,066$7,665,245 Universal Health Services, Inc.Consolidated Statements of Cash Flows(in thousands)(unaudited)Nine monthsended September 30,20122011Cash Flows from Operating Activities:  Net income$341,387$340,863  Adjustments to reconcile net income to net    cash provided by operating activities:   Depreciation & amortization227,641220,208   (Gain) loss on sale of assets(945)164   Stock-based compensation expense16,18913,434    Costs related to extinguishment of debt29,170-  Changes in assets & liabilities, net of effects from   acquisitions and dispositions:    Accounts receivable(86,821)(103,700)    Accrued interest11,90113,143    Accrued and deferred income taxes (260)102,949    Other working capital accounts (42,916)(74,342)    Other assets and deferred charges25,95920,215    Other 5,8334,146    Accrued insurance expense, net of commercial premiums paid66,75271,186    Payments made in settlement of self-insurance claims(58,884)(45,764)          Net cash provided by operating activities535,006562,502Cash Flows from Investing Activities:   Property and equipment additions, net of disposals(282,191)(195,404)   Proceeds received from sale of assets and businesses56,19423,682   Acquisition of property and businesses(25,092)(8,599)   Costs incurred for purchase and implementation of electronic health records application(41,854)(27,874)   Return of deposit on terminated purchase agreement6,500-          Net cash used in investing activities(286,443)(208,195)Cash Flows from Financing Activities:   Reduction of long-term debt(1,127,829)(267,539)   Additional borrowings906,00036,000   Financing costs(8,257)(23,559)   Repurchase of common shares(9,676)(44,532)   Dividends paid(14,519)(14,638)   Issuance of common stock3,8283,596   Profit distributions to noncontrolling interests(13,687)(33,962)          Net cash used in financing activities(264,140)(344,634)(Decrease) increase in cash and cash equivalents(15,577)9,673Cash and cash equivalents, beginning of period41,22929,474Cash and cash equivalents, end of period$25,652$39,147Supplemental Disclosures of Cash Flow Information:  Interest paid$104,560$120,712  Income taxes paid, net of refunds$187,899$89,268        Universal Health Services, Inc.  Supplemental Statistical Information                   (un-audited) % Change  % Change Quarter Ended9 months endedSame Facility:9/30/20129/30/2012Acute Care HospitalsRevenues-0.4%-0.5%Adjusted Admissions-1.7%-0.3%Adjusted Patient Days-1.0%0.3%Revenue Per Adjusted Admission1.3%-0.2%Revenue Per Adjusted Patient Day0.6%-0.7%Behavioral Health HospitalsRevenues3.4%4.2%Adjusted Admissions2.6%5.0%Adjusted Patient Days0.7%1.2%Revenue Per Adjusted Admission0.7%-0.7%Revenue Per Adjusted Patient Day2.6%2.9%UHS ConsolidatedThird Quarter EndedNine months Ended9/30/20129/30/20119/30/20129/30/2011Revenues$1,680,353$1,662,675$5,196,473$5,097,226EBITDA   (1)265,358258,910885,647864,039EBITDA Margin (1)15.8%15.6%17.0%17.0%Cash Flow From Operations162,144206,726535,006562,502Days Sales Outstanding57515550Capital Expenditures  99,84079,164282,191195,404Debt 3,443,4613,687,741Shareholders Equity2,608,7822,221,382Debt / Total Capitalization56.9%62.4%Debt / EBITDA  (2)2.963.42Debt / Cash From Operations  (2)4.995.55Acute Care EBITDAR Margin  (3) 13.4%14.8%16.2%17.8%Behavioral Health EBITDAR Margin  (3) 27.8%26.5%27.8%26.7%(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 STATISTICSFOR THE THREE MONTHS ENDEDSEPTEMBER 30, 2012 AND 2011AS REPORTED:ACUTE (1)BEHAVIORAL HEALTH09/30/1209/30/11%  change09/30/1209/30/11%  changeHospitals owned and leased25250.0%175178-1.7%Average licensed beds5,7045,739-0.6%19,17719,372-1.0%Patient days273,361279,322-2.1%1,289,9751,291,753-0.1%Average daily census2,971.33,036.1-2.1%14,021.514,040.8-0.1%Occupancy-licensed beds52.1%52.9%-1.5%73.1%72.5%0.9%Admissions61,52163,305-2.8%91,52089,9511.7%Length of stay4.44.40.7%14.114.4-1.8%Inpatient revenue$3,013,482$2,827,6176.6%$1,410,170$1,368,4053.1%Outpatient revenue1,517,2611,384,0849.6%151,788146,8363.4%Total patient revenue4,530,7434,211,7017.6%1,561,9581,515,2413.1%Other revenue25,00619,88425.8%36,30335,5812.0%Gross hospital revenue4,555,7494,231,5857.7%1,598,2611,550,8223.1%Total deductions3,560,7803,265,4669.0%734,266707,2873.8%Net hospital revenue before   provision for doubtful accounts$994,969$966,1193.0%$863,995$843,5352.4%Provision for doubtful accounts$166,570$134,34424.0%$22,326$17,71026.1%Net hospital revenue 828,399831,775-0.4%841,669825,8251.9%SAME FACILITY:ACUTE  (1)BEHAVIORAL HEALTH (2)(3)09/30/1209/30/11%  change09/30/1209/30/11%  changeHospitals owned and leased24240.0%1711710.0%Average licensed beds5,5455,580-0.6%19,01018,9600.3%Patient days265,043270,314-2.0%1,278,4781,266,5180.9%Average daily census2,880.92,938.2-2.0%13,896.513,766.50.9%Occupancy-licensed beds52.0%52.7%-1.3%73.1%72.6%0.7%Admissions59,64361,229-2.6%90,41587,8952.9%Length of stay4.44.40.7%14.114.4-1.9%(1)Auburn is excluded in both current and prior years. Hospital count previously reflected number of licenseswe have revised to reflect number of hospitals.(2)King George School, Marion, Pennsylvania Clinical School, and San Juan Capestrano  are excluded in both current and prior years.(3)Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group Homes and the Peaks are excluded in both current and prior years UNIVERSAL HEALTH SERVICES, INC.SELECTED HOSPITAL STATISTICSFOR THE NINE MONTHS ENDEDSEPTEMBER 30, 2012 AND 2011AS REPORTED:ACUTE (1)BEHAVIORAL HEALTH09/30/1209/30/11%  change09/30/1209/30/11%  changeHospitals owned and leased25250.0%175178Average licensed beds5,7035,713-0.2%19,15219,390-1.2%Patient days852,588872,943-2.3%3,905,0703,913,151-0.2%Average daily census3,111.63,197.6-2.7%14,252.114,333.9-0.6%Occupancy-licensed beds54.6%56.0%-2.5%74.4%73.9%0.7%Admissions189,886195,818-3.0%279,231270,0423.4%Length of stay4.54.50.7%14.014.5-3.5%Inpatient revenue$9,326,344$8,934,7014.4%$4,242,528$4,154,1172.1%Outpatient revenue4,606,6804,068,56613.2%474,623453,6524.6%Total patient revenue13,933,02413,003,2677.2%4,717,1514,607,7692.4%Other revenue68,82755,62023.7%109,273105,1024.0%Gross hospital revenue14,001,85113,058,8877.2%4,826,4244,712,8712.4%Total deductions10,947,24610,073,3728.7%2,188,0242,162,0381.2%Net hospital revenue before   provision for doubtful accounts$3,054,605$2,985,5152.3%$2,638,400$2,550,8333.4%Provision for doubtful accounts$456,078$398,44514.5%$66,144$57,49715.0%Net hospital revenue 2,598,5272,587,0700.4%2,572,2562,493,3363.2%SAME FACILITY:ACUTE (1)BEHAVIORAL HEALTH (2)(3)09/30/1209/30/11%  change09/30/1209/30/11%  changeHospitals owned and leased24240.0%1711710.0%Average licensed beds5,5445,554-0.2%18,97718,9010.4%Patient days825,781845,672-2.4%3,871,1823,826,9411.2%Average daily census3,013.83,097.7-2.7%14,128.414,018.10.8%Occupancy-licensed beds54.4%55.8%-2.5%74.5%74.2%0.4%Admissions184,021189,456-2.9%276,105263,2934.9%Length of stay4.54.50.5%14.014.5-3.5%(1)Auburn is excluded in both current and prior years. Hospital count previously reflected number of licenseswe have revised to reflect number of hospitals.(2)King George School, Marion, Pennsylvania Clinical School, and San Juan Capestrano  are excluded in both current and prior years.(3)Brook Glen Behavioral Hospital, Jefferson Train, Manatee Palms Group Homes and the Peaks are excluded in both current and prior years  SOURCE Universal Health Services, Inc.For further information: Steve Filton, Chief Financial Officer, +1-610-768-3300