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Press release from PR Newswire

Universal Health Services, Inc. Reports Financial Results For Three And Nine Months Ended September 30, 2013 And Increases 2013 Full Year Guidance

Tuesday, October 29, 2013

Universal Health Services, Inc. Reports Financial Results For Three And Nine Months Ended September 30, 2013 And Increases 2013 Full Year Guidance

17:01 EDT Tuesday, October 29, 2013

Consolidated Results of Operations, As Reported - Three and nine-month periods ended September 30, 2013 and 2012:

KING OF PRUSSIA, Pa., Oct. 29, 2013 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $114.6 million, or $1.15 per diluted share, during the third quarter of 2013 as compared to $71.8 million, or $.73 per diluted share, during the comparable quarter of 2012.  Net revenues increased 8.1% to $1.82 billion during the third quarter of 2013 as compared to $1.68 billion during the third quarter of 2012. 

The state of Texas has recently finalized its 2013 state fiscal year Medicaid disproportionate share hospital ("DSH") payment rule and published updated DSH payment recommendations for the programs covering the period of October 1, 2012 through September 30, 2013. The revised DSH estimates and related data also favorably impacted our Texas Medicaid Waiver uncompensated care payment estimates for the same period. In connection with these revised payment recommendations, our acute care hospitals located in Texas earned additional revenues pursuant to these programs amounting to approximately $21 million which are applicable to the state's 2013 fiscal year. Included in our reported net income attributable to UHS during the three-month period ended September 30, 2013 was approximately $13 million (after-tax), or $.13 per diluted share, earned in connection with these programs, of which, approximately $10 million (after-tax), or $.10 per diluted share, related to the period of October 1, 2012 through June 30, 2013.   

Reported net income attributable to UHS was $386.2 million, or $3.89 per diluted share, during the first nine months of 2013 as compared to $308.0 million, or $3.15 per diluted share, during the comparable period of 2012.  Net revenues increased 5.5% to $5.48 billion during the nine-month period ended September 30, 2013 as compared to $5.20 billion during the comparable nine-month period of 2012. 

Consolidated Results of Operations, As Adjusted ? Three and nine-month periods ended September 30, 2013 and 2012:     For the three-month period ended September 30, 2013, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule"), was $109.5 million, or $1.10 per diluted share, as compared to $88.6 million, or $.91 per diluted share, during the third quarter of 2012.  Included in the adjusted net income attributable to UHS for the three-month period ended September 30, 2013, is the after-tax impact of approximately $10 million, or $.10 per diluted share, resulting from the above-mentioned additional Texas Medicaid revenues applicable to the period of October 1, 2012 through June 30, 2013.

As reflected on the Supplemental Schedule, included in our reported results during the third quarter of 2013 was a net favorable after-tax impact of approximately $5.1 million, or $.05 per diluted share, related to the incentive income and expenses recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals (as discussed below in Accounting for HITECH Act incentive income and EHR expenses). 

As reflected on the 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 net 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 EHR applications.

Included in our reported results during the nine-month period ended September 30, 2013 was a net favorable after-tax impact of $37.8 million, or $.38 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2013, based upon a reserve analysis. During the nine-month period ended September 30, 2013, the pre-tax incentive income of $27.9 million earned in connection with the implementation of EHR applications was essentially offset by EHR-related expenses incurred during the period.    

Included in our reported results during the first nine months of 2012 was a net unfavorable after-tax impact of approximately $3.6 million, or $.03 per diluted share, recorded in connection with the implementation of EHR applications, as well as a net aggregate favorable after-tax impact of $3.2 million, or $.03 per diluted share, consisting of the following: (i) an after-tax charge of $18.1 million resulting from the write-off of deferred financing costs related to the portion of our Term Loan B credit facility that was extinguished during the third quarter of 2012; (ii) a favorable after-tax impact of $18.8 million resulting from an industry-wide settlement 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, related to underpayments of Medicare inpatient prospective payments during a number of years prior to 2012; (iii) a favorable after-tax impact of $4.3 million representing the 2011 portion of the net Medicaid supplemental reimbursements recorded pursuant to the Oklahoma Supplemental Hospital Offset Payment Program; (iv) an aggregate unfavorable after-tax impact of $5.1 million resulting from 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 the write-off of receivables related to revenues recorded during 2011 at two of our acute care hospitals located in Florida resulting from reductions in certain county reimbursements due to reductions in federal matching Inter-Governmental Transfer funds ($2.7 million unfavorable after-tax impact), and; (v) 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. 

Acute Care Services ? Three and nine-month periods ended September 30, 2013 and 2012:    During the third quarter of 2013, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 3.6% and adjusted patient days increased 4.1%, as compared to the third quarter of 2012. Net revenues at these facilities, excluding approximately $16 million of the above-mentioned additional revenues earned in connection with the Texas Medicaid DSH and uncompensated care programs covering the period of October 1, 2012 through June 30, 2013, increased 6.6% during the third quarter of 2013 as compared to the comparable quarter of 2012. At these facilities, net revenue per adjusted admission increased 2.9% while net revenue per adjusted patient day increased 2.5% during the third quarter of 2013 as compared to the third quarter of 2012. On a same facility basis, excluding the above-mentioned $16 million of additional revenues earned in connection with the Texas Medicaid DSH and uncompensated care programs covering the period of October 1, 2012 through June 30, 2013, the operating margin at our acute care hospitals decreased to 12.8% during the third quarter of 2013 as compared to 13.4% during the third quarter of 2012. 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 as indicated on the Supplemental Schedule).

During the first nine months of 2013, at our acute care hospitals on a same facility basis, adjusted admissions increased 1.3% and adjusted patient days increased 1.8%, as compared to the first nine months of 2012. Net revenues at these facilities increased 4.6% during the nine-month period ended September 30, 2013 as compared to the comparable period in 2012. At these facilities, net revenue per adjusted admission increased 3.3% while net revenue per adjusted patient day increased 2.8% during the first nine months of 2013 as compared to the comparable period in 2012. On a same facility basis, the operating margin at our acute care hospitals decreased to 15.1% during the first nine months of 2013 as compared to 16.2% during the first nine months 2012.

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 approximately $276 million and $259 million during the three-month periods ended September 30, 2013 and 2012, respectively, and approximately $766 million and $840 million during the nine-month periods ended September 30, 2013 and 2012, respectively. In addition, the provision for doubtful accounts at our acute care hospitals increased to approximately $291 million during the third quarter of 2013 as compared to approximately $167 million during the third quarter of 2012 and increased to approximately $725 million during the first nine months of 2013 as compared to approximately $456 million during the comparable period of 2012.  

Behavioral Health Care Services ? Three and nine-month periods ended September 30, 2013 and 2012:  During the third quarter of 2013, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 5.8% while adjusted patient days increased 1.5%, as compared to the third quarter of 2012. Net revenues at these facilities increased 3.4% during the third quarter of 2013, as compared to the comparable quarter in 2012. At these facilities, net revenue per adjusted admission decreased 2.2% while net revenue per adjusted patient day increased 1.9% during the third quarter of 2013 over the comparable quarter in 2012. The operating margin at our behavioral health care facilities owned during both periods was 27.5% during the three-month period ended September 30, 2013 and 27.9% during the comparable quarter of 2012.   

During the first nine months of 2013, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.8% while adjusted patient days increased 1.0%, as compared to the first nine months of 2012. Net revenues at these facilities increased 3.0% during the nine-month period ended September 30, 2013, as compared to the comparable period in 2012. At these facilities, net revenue per adjusted admission decreased 0.8% while net revenue per adjusted patient day increased 2.0% during the first nine months of 2013 over the comparable period in 2012. The operating margin at our behavioral health care facilities owned during both periods increased to 28.2% during the nine-month period ended September 30, 2013, as compared to 27.8% during the comparable period in 2012.

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 continued to do so, on a hospital-by-hospital basis, until completion which occurred at the end of June, 2013. 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.  With the exception of the newly constructed and recently opened Temecula Valley Hospital (as discussed below), we believe that all of our acute care hospitals have met the stage 1, year one meaningful use criteria.   

As reflected on the Supplemental Schedule, in connection with the implementation of EHR applications, our consolidated results of operations include the net favorable after-tax impact of $5.1 million ($8.2 million pre-tax) during the third quarter of 2013 and $1.3 million ($2.2 million pre-tax) during the third quarter of 2012.  In connection with the implementation of EHR applications, our consolidated results of operations include the net unfavorable after-tax impact of $127,000 ($203,000 pre-tax) during the first nine months of 2013 and $3.6 million ($5.9 million pre-tax) during the comparable nine-month period of 2012.   

2013 Full Year Guidance Increase:    Based upon the operating trends and financial results experienced during the first nine months of 2013, we are increasing our estimated range of adjusted net income attributable to UHS, for the year ended December 31, 2013, to $4.52 to $4.58 per diluted share. This revised guidance, which excludes the expected net favorable EHR impact for the year as well as the impact of the other item reflected on the Supplemental Schedule for the nine months ended September 30, 2013, represents an increase of approximately 2% to 4% from the previously provided range of $4.35 to $4.50 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.

Opening of the newly constructed Temecula Valley Hospital:     In October, 2013, we opened the newly constructed Temecula Valley Hospital, an acute care facility located in Temecula, California.  With 140 private patient rooms, Temecula Valley Hospital offers emergency care, advanced cardiac and stroke care, orthopedics and general medical care, along with surgical specialties.  The new hospital is our fourth located in Riverside County, which is one of the fastest-growing counties in the United States. 

Conference call information:          We will hold a conference call for investors and analysts at 10:00 a.m. eastern time on October 30, 2013. The dial-in number is 1-877-648-7971. 

A live broadcast of the conference call will be available on our website at www.uhsinc.com.  A replay of the call will follow shortly after conclusion of the live call and will be available for one full year.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:    Universal Health Services, Inc. ("UHS") is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico and the U.S. Virgin Islands.  It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT).  For additional information on the Company, visit our web site: http://www.uhsinc.com.

This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2012 and in Item 2-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended June 30, 2013), may cause the results to differ materially from those anticipated in the forward-looking statements.  The operating pressures that we continue to experience in many of our acute care markets has increased the volatility of our financial results making estimation of future results more challenging.  Many of the factors that will determine our future results are beyond our capability to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially.  Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

As mentioned above, 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. 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 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 and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods.  To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2012 and report on Form 10-Q for the quarterly period ended June 30, 2013. 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

Nine months

ended September 30,

ended September 30,

2013

2012

2013

2012

Net revenues before provision for doubtful accounts

$2,134,740

$1,869,263

$6,294,750

$5,718,676

  Less: Provision for doubtful accounts

318,371

188,910

811,774

522,203

Net revenues

1,816,369

1,680,353

5,482,976

5,196,473

Operating charges:

   Salaries, wages and benefits

903,212

838,075

2,702,842

2,565,052

   Other operating expenses

393,549

362,687

1,100,118

1,059,048

   Supplies expense

206,995

191,747

613,981

594,924

   Depreciation and amortization

86,971

77,032

248,465

221,807

   Lease and rental expense

23,904

23,481

72,651

70,906

   Electronic health records incentive income

(23,148)

(10,551)

(27,943)

(12,506)

   Costs related to extinguishment of debt

0

29,170

0

29,170

1,591,483

1,511,641

4,710,114

4,528,401

Income from operations

224,886

168,712

772,862

668,072

Interest expense, net

32,314

45,207

110,488

137,805

Income before income taxes

192,572

123,505

662,374

530,267

Provision for income taxes

69,473

42,132

241,537

188,880

Net income

123,099

81,373

420,837

341,387

Less:  Income attributable to

noncontrolling interests

8,512

9,556

34,625

33,402

Net income attributable to UHS

$114,587

$71,817

$386,212

$307,985

Basic earnings per share attributable to UHS (a)

$1.17

$0.74

$3.94

$3.18

Diluted earnings per share attributable to UHS (a)

$1.15

$0.73

$3.89

$3.15

 

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,

2013

2012

2013

2012

(a) Earnings per share calculation:

Basic and diluted:

Net income attributable to UHS

$114,587

$71,817

$386,212

$307,985

Less: Net income attributable to unvested restricted share grants

(43)

(85)

(200)

(379)

Net income attributable to UHS - basic and diluted

$114,544

$71,732

$386,012

$307,606

Weighted average number of common shares - basic

98,151

96,817

97,965

96,701

Basic earnings per share attributable to UHS:

$1.17

$0.74

$3.94

$3.18

Weighted average number of common shares

98,151

96,817

97,965

96,701

Add: Other share equivalents

1,436

794

1,158

1,010

Weighted average number of common shares and equiv. - diluted

99,587

97,611

99,123

97,711

Diluted earnings per share attributable to UHS:

$1.15

$0.73

$3.89

$3.15

 

Universal Health Services, Inc.

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

For the three months ended September 30, 2013 and 2012

(in thousands, except per share amounts)

(unaudited)

Calculation of "EBITDA"

Three months ended

Three months ended

September 30, 2013

September 30, 2012

Net revenues before provision for doubtful accounts

$2,134,740

$1,869,263

  Less: Provision for doubtful accounts

318,371

188,910

Net revenues

1,816,369

100.0%

1,680,353

100.0%

Operating charges:

   Salaries, wages and benefits

903,212

49.7%

838,075

49.9%

   Other operating expenses

393,549

21.7%

362,687

21.6%

   Supplies expense

206,995

11.4%

191,747

11.4%

   EHR incentive income

(23,148)

-1.3%

(10,551)

-0.6%

1,480,608

81.5%

1,381,958

82.2%

Operating income/margin ("EBITDAR")

335,761

18.5%

298,395

17.8%

   Lease and rental expense

23,904

23,481

   Income attributable to noncontrolling interests

8,512

9,556

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

303,345

16.7%

265,358

15.8%

   Depreciation and amortization

86,971

77,032

   Costs related to extinguishment of debt

0

29,170

   Interest expense, net

32,314

45,207

Income before income taxes 

184,060

113,949

Provision for income taxes

69,473

42,132

Net income attributable to UHS

$114,587

$71,817

Calculation of Adjusted Net Income Attributable to UHS

Three months ended

Three months ended

September 30, 2013

September 30, 2012

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

$114,587

$1.15

$71,817

$0.73

Plus/minus adjustments:

  Costs related to extinguishment of debt, net of income taxes

-

-

18,126

0.19

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

$114,587

$1.15

$89,943

$0.92

Plus/minus impact of EHR implementation: 

EHR-related incentive income, pre-tax

(23,148)

(10,551)

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

4,753

2,779

EHR-related other operating costs, pre-tax

(893)

(82)

EHR-related depreciation & amortization, pre-tax

10,916

4,575

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

147

1,122

Income tax provision on EHR-related items 

3,098

817

After-tax impact of EHR-related items

(5,127)

(0.05)

(1,340)

(0.01)

Adjusted net income attributable to UHS

$109,460

$1.10

$88,603

0.91

 

Universal Health Services, Inc.

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

For the nine months ended September 30, 2013 and 2012

(in thousands, except per share amounts)

(unaudited)

Calculation of "EBITDA"

Nine months ended

Nine months ended

September 30, 2013

September 30, 2012

Net revenues before provision for doubtful accounts

$6,294,750

$5,718,676

  Less: Provision for doubtful accounts

811,774

522,203

Net revenues

5,482,976

100.0%

5,196,473

100.0%

Operating charges:

   Salaries, wages and benefits

2,702,842

49.3%

2,565,052

49.4%

   Other operating expenses

1,100,118

20.1%

1,059,048

20.4%

   Supplies expense

613,981

11.2%

594,924

11.4%

   EHR incentive income

(27,943)

-0.5%

(12,506)

-0.2%

4,388,998

80.0%

4,206,518

80.9%

Operating income/margin ("EBITDAR")

1,093,978

20.0%

989,955

19.1%

   Lease and rental expense

72,651

70,906

   Income attributable to noncontrolling interests

34,625

33,402

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

986,702

18.0%

885,647

17.0%

   Depreciation and amortization

248,465

221,807

   Costs related to extinguishment of debt

0

29,170

   Interest expense, net

110,488

137,805

Income before income taxes 

627,749

496,865

Provision for income taxes

241,537

188,880

Net income attributable to UHS

$386,212

$307,985

Calculation of Adjusted Net Income Attributable to UHS

Nine months ended

Nine months ended

September 30, 2013

September 30, 2012

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

$386,212

$3.89

$307,985

$3.15

Plus/minus adjustments:

  Reduction of reserves relating to prior years for professional and general liability

      self-insured claims, net of income taxes

(37,826)

-

  Medicare Rural Floor settlement, net of income taxes

-

(18,753)

  Oklahoma SHOPP Medicaid reimbursements related to prior years, net of income taxes

-

(4,329)

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

-

5,149

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

-

(3,417)

  Costs related to extinguishment of debt, net of income taxes

-

-

18,126

Subtotal after-tax adjustments to net income attributable to UHS

(37,826)

(0.38)

(3,224)

(0.03)

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

$348,386

$3.51

$304,761

$3.12

Plus/minus impact of EHR implementation: 

EHR-related incentive income, pre-tax

(27,943)

(12,506)

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

4,991

10,722

EHR-related other operating costs, pre-tax

1,125

314

EHR-related depreciation & amortization, pre-tax

23,408

8,102

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

(1,378)

(775)

Income tax provision on EHR-related items 

(76)

(2,217)

After-tax impact of EHR-related items

127

-

3,640

0.03

Adjusted net income attributable to UHS

$348,513

$3.51

$308,401

$3.15

 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

Three months

Nine months

ended September 30,

ended September 30,

2013

2012

2013

2012

Net income

$123,099

$81,373

$420,837

$341,387

Other comprehensive income (loss):

   Unrealized derivative gains (loss) on cash flow hedges

3,054

(45)

12,871

1,782

   Amortization of terminated hedge

(84)

(84)

(252)

(252)

Other comprehensive (loss) income before tax

2,970

(129)

12,619

1,530

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

1,120

(47)

4,758

585

Total other comprehensive (loss) income, net of tax

1,850

(82)

7,861

945

Comprehensive income

124,949

81,291

428,698

342,332

Less: Comprehensive income attributable to noncontrolling interests

8,512

9,556

34,625

33,402

Comprehensive income attributable to UHS

$116,437

$71,735

$394,073

$308,930

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

September 30,

December 31,

2013

2012

Assets

Current assets:

    Cash and cash equivalents

$

12,122

$

23,471

    Accounts receivable, net

1,166,514

1,067,197

    Supplies

101,249

99,000

    Deferred income taxes

132,624

104,461

    Other current assets

90,771

87,936

    Assets of facilities held for sale

0

25,431

          Total current assets

1,503,280

1,407,496

Property and equipment

5,610,076

5,368,345

Less: accumulated depreciation

(2,185,175)

(1,986,110)

3,424,901

3,382,235

Other assets:

    Goodwill

3,039,169

3,036,765

    Deferred charges

62,619

75,888

    Other

321,774

298,459

$

8,351,743

$

8,200,843

Liabilities and Stockholders' Equity

Current liabilities:

    Current maturities of long-term debt

$

88,292

$

2,589

    Accounts payable and accrued liabilities

926,768

889,557

    Federal and state taxes

9,257

1,062

    Liabilities of facilities held for sale

0

850

          Total current liabilities

1,024,317

894,058

Other noncurrent liabilities

320,214

395,355

Long-term debt

3,411,635

3,727,431

Deferred income taxes

215,026

183,747

Redeemable noncontrolling interest

218,080

234,303

UHS common stockholders' equity

3,110,778

2,713,345

Noncontrolling interest

51,693

52,604

          Total equity

3,162,471

2,765,949

$

8,351,743

$

8,200,843

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Nine months

ended September 30,

2013

2012

Cash Flows from Operating Activities:

  Net income

$420,837

$341,387

  Adjustments to reconcile net income to net 

cash provided by operating activities:

Depreciation & amortization

248,648

227,641

Stock-based compensation expense

20,072

16,189

Gains on sales of assets and business, net of losses

(2,973)

(945)

Costs related to extinguishment of debt

0

29,170

  Changes in assets & liabilities, net of effects from

acquisitions and dispositions:

   Accounts receivable

(99,261)

(86,821)

   Accrued interest

10,376

11,901

   Accrued and deferred income taxes 

20,918

(260)

   Other working capital accounts 

10,313

(42,916)

   Other assets and deferred charges

13,425

25,959

   Other 

5,792

5,833

   Accrued insurance expense, net of commercial premiums paid

(1,406)

66,752

   Payments made in settlement of self-insurance claims

(55,009)

(58,884)

          Net cash provided by operating activities

591,732

535,006

Cash Flows from Investing Activities:

   Property and equipment additions, net of disposals

(279,751)

(282,191)

   Proceeds received from sale of assets and businesses

37,118

56,194

   Acquisition of property and businesses

(1,320)

(25,092)

   Costs incurred for purchase and implementation of electronic health records application

(42,353)

(41,854)

   Return of deposit on terminated purchase agreement

0

6,500

          Net cash used in investing activities

(286,306)

(286,443)

Cash Flows from Financing Activities:

   Reduction of long-term debt

(234,231)

(1,127,829)

   Additional borrowings

1,500

906,000

   Financing costs

0

(8,257)

   Repurchase of common shares

(22,186)

(9,676)

   Dividends paid

(14,706)

(14,519)

   Issuance of common stock

4,096

3,828

   Profit distributions to noncontrolling interests

(51,248)

(13,687)

          Net cash used in financing activities

(316,775)

(264,140)

Decrease in cash and cash equivalents

(11,349)

(15,577)

Cash and cash equivalents, beginning of period

23,471

41,229

Cash and cash equivalents, end of period

$12,122

$25,652

Supplemental Disclosures of Cash Flow Information:

  Interest paid

$88,430

$104,560

  Income taxes paid, net of refunds

$218,290

$187,899

 

       Universal Health Services, Inc.

  Supplemental Statistical Information

                   (un-audited)

 % Change 

 % Change 

Quarter Ended

9 months ended

Same Facility:

9/30/2013

9/30/2013

Acute Care Hospitals

Revenues

6.6%

4.6%

Adjusted Admissions

3.6%

1.3%

Adjusted Patient Days

4.1%

1.8%

Revenue Per Adjusted Admission

2.9%

3.3%

Revenue Per Adjusted Patient Day

2.5%

2.8%

Behavioral Health Hospitals

Revenues

3.4%

3.0%

Adjusted Admissions

5.8%

3.8%

Adjusted Patient Days

1.5%

1.0%

Revenue Per Adjusted Admission

-2.2%

-0.8%

Revenue Per Adjusted Patient Day

1.9%

2.0%

UHS Consolidated

Third Quarter Ended

Nine months Ended

9/30/2013

9/30/2012

9/30/2013

9/30/2012

Revenues

$1,816,369

$1,680,353

$5,482,976

$5,196,473

EBITDA   (1)

303,345

265,358

986,702

885,647

EBITDA Margin (1)

16.7%

15.8%

18.0%

17.0%

Cash Flow From Operations

185,730

162,144

591,732

535,006

Days Sales Outstanding

59

57

58

55

Capital Expenditures  

103,807

99,840

279,751

282,191

Debt 

3,499,927

3,443,461

Shareholders Equity

3,110,778

2,608,782

Debt / Total Capitalization

52.9%

56.9%

Debt / EBITDA  (2)

2.63

2.96

Debt / Cash From Operations  (2)

4.01

4.99

Acute Care EBITDAR Margin  (3) 

12.8%

13.4%

15.1%

16.2%

Behavioral Health EBITDAR Margin  (3) 

27.5%

27.9%

28.2%

27.8%

(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, 2013 AND 2012

AS REPORTED:

                       ACUTE (1)

               BEHAVIORAL HEALTH

09/30/13

09/30/12

%  change

09/30/13

09/30/12

%  change

Hospitals owned and leased

23

23

0.0%

182

176

3.4%

Average licensed beds

5,617

5,545

1.3%

19,930

19,177

3.9%

Patient days

272,905

265,043

3.0%

1,331,234

1,289,975

3.2%

Average daily census

2,966.4

2,880.9

3.0%

14,469.9

14,021.5

3.2%

Occupancy-licensed beds

52.8%

52.0%

1.6%

72.6%

73.1%

-0.7%

Admissions

61,155

59,643

2.5%

101,183

91,520

10.6%

Length of stay

4.5

4.4

0.4%

13.2

14.1

-6.7%

Inpatient revenue

$3,296,484

$3,013,482

9.4%

$1,567,436

$1,410,170

11.2%

Outpatient revenue

1,712,290

1,517,261

12.9%

179,783

151,788

18.4%

Total patient revenue

5,008,774

4,530,743

10.6%

1,747,219

1,561,958

11.9%

Other revenue

33,912

25,006

35.6%

33,921

36,303

-6.6%

Gross hospital revenue

5,042,686

4,555,749

10.7%

1,781,140

1,598,261

11.4%

Total deductions

3,852,278

3,560,780

8.2%

845,786

734,266

15.2%

Net hospital revenue before 

  provision for doubtful accounts

$1,190,408

$994,969

19.6%

$935,354

$863,995

8.3%

Provision for doubtful accounts

$290,875

$166,570

74.6%

$27,419

$22,326

22.8%

Net hospital revenue 

899,533

828,399

8.6%

907,935

841,669

7.9%

SAME FACILITY:

                      ACUTE  (1)

             BEHAVIORAL HEALTH (2)

09/30/13

09/30/12

%  change

09/30/13

09/30/12

%  change

Hospitals owned and leased

23

23

0.0%

171

171

0.0%

Average licensed beds

5,617

5,545

1.3%

18,490

18,411

0.4%

Patient days

272,905

265,043

3.0%

1,253,270

1,240,510

1.0%

Average daily census

2,966.4

2,880.9

3.0%

13,622.5

13,483.8

1.0%

Occupancy-licensed beds

52.8%

52.0%

1.6%

73.7%

73.2%

0.6%

Admissions

61,155

59,643

2.5%

95,630

90,841

5.3%

Length of stay

4.5

4.4

0.5%

13.1

13.7

-4.0%

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

(2) Jefferson Trail, Manatee Palms Group Homes, the Peaks, San Juan Capestrano, Keys of Carolina, 

    Garfield Park and Austin Oaks are excluded in both current and prior years. Brook Glen is include in 

    in both current and prior years from March 1st through September 30th. John Costigan Ctr and

    Community BH is excluded in both current and prior years from June 1st through September 30th.

    Bristol Youth Academy, Gulf Coast Treatment Center and Okalooa Youth Academy is excluded in both 

    current and prior years from July 1st through September 30th.

UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2013 AND 2012

AS REPORTED:

                       ACUTE (1)

               BEHAVIORAL HEALTH

09/30/13

09/30/12

%  change

09/30/13

09/30/12

%  change

Hospitals owned and leased

23

23

0.0%

182

176

Average licensed beds

5,617

5,544

1.3%

19,979

19,152

4.3%

Patient days

836,355

825,781

1.3%

4,055,171

3,905,070

3.8%

Average daily census

3,063.6

3,013.8

1.7%

14,854.1

14,252.1

4.2%

Occupancy-licensed beds

54.5%

54.4%

0.3%

74.3%

74.4%

-0.1%

Admissions

185,591

184,021

0.9%

304,305

279,231

9.0%

Length of stay

4.5

4.5

0.4%

13.3

14.0

-4.7%

Inpatient revenue

$10,124,908

$9,326,344

8.6%

$4,741,967

$4,242,528

11.8%

Outpatient revenue

5,072,065

4,606,680

10.1%

559,288

474,623

17.8%

Total patient revenue

15,196,973

13,933,024

9.1%

5,301,255

4,717,151

12.4%

Other revenue

95,784

68,827

39.2%

95,908

109,273

-12.2%

Gross hospital revenue

15,292,757

14,001,851

9.2%

5,397,163

4,826,424

11.8%

Total deductions

11,864,873

10,947,246

8.4%

2,563,604

2,188,024

17.2%

Net hospital revenue before 

  provision for doubtful accounts

$3,427,884

$3,054,605

12.2%

$2,833,559

$2,638,400

7.4%

Provision for doubtful accounts

$724,971

$456,078

59.0%

$86,610

$66,144

30.9%

Net hospital revenue 

2,702,913

2,598,527

4.0%

2,746,949

2,572,256

6.8%

SAME FACILITY:

                       ACUTE   (1)

             BEHAVIORAL HEALTH (2)

09/30/13

09/30/12

%  change

09/30/13

09/30/12

%  change

Hospitals owned and leased

23

23

0.0%

172

172

0.0%

Average licensed beds

5,617

5,544

1.3%

18,819

18,689

0.7%

Patient days

836,355

825,781

1.3%

3,846,843

3,817,258

0.8%

Average daily census

3,063.6

3,013.8

1.7%

14,091.0

13,931.6

1.1%

Occupancy-licensed beds

54.5%

54.4%

0.3%

74.9%

74.5%

0.4%

Admissions

185,591

184,021

0.9%

286,973

276,938

3.6%

Length of stay

4.5

4.5

0.4%

13.4

13.8

-2.7%

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

(2) Jefferson Trail, Manatee Palms Group Homes, the Peaks, San Juan Capestrano, Keys of Carolina, 

    Garfield Park and Austin Oaks are excluded in both current and prior years. Brook Glen is include in 

    in both current and prior years from March 1st through September 30th. John Costigan Ctr and

    Community BH is excluded in both current and prior years from June 1st through September 30th.

    Bristol Youth Academy, Gulf Coast Treatment Center and Okalooa Youth Academy is excluded in both 

    current and prior years from July 1st through September 30th.

SOURCE Universal Health Services, Inc.

For further information: Steve Filton, Chief Financial Officer, 610-768-3300

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