Universal Health Services, Inc. Reports 2014 Fourth Quarter And Full Year Earnings And 2015 Earnings Guidance

Consolidated Results of Operations, As Reported - Three and twelve-month periods ended December 31, 2014 and 2013:

KING OF PRUSSIA, Pa., Feb. 26, 2015 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $172.8 million, or $1.71 per diluted share, during the fourth quarter of 2014 as compared to $124.5 million, or $1.24 per diluted share, during the comparable quarter of 2013.  Net revenues increased 17.0% to $2.11 billion during the fourth quarter of 2014 as compared to $1.80 billion during the fourth quarter of 2013. As anticipated, included in our net revenues during the fourth quarter of 2014 was approximately $11 million of additional net revenues recorded in connection with the Texas Delivery Service Reform Incentive Payment program which were applicable to the period of April 1, 2014 through September 30, 2014.

Reported net income attributable to UHS was $545.3 million, or $5.42 per diluted share, during the year ended December 31, 2014 as compared to $510.7 million, or $5.14 per diluted share, during the 2013 full year.  Net revenues increased 10.7% to $8.07 billion during the twelve-month period of 2014 as compared to $7.28 billion during the comparable twelve-month period of 2013. 

Consolidated Results of Operations, As Adjusted – Three and twelve-month periods ended December 31, 2014 and 2013:

Three-month periods ended December 31, 2014 and 2013:
For the three-month period ended December 31, 2014, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule"), increased approximately 47% to $152.0 million, or $1.51 per diluted share, as compared to $103.6 million, or $1.03 per diluted share, during the fourth quarter of 2013.

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2014 was an aggregate favorable after-tax impact of approximately $20.8 million, or $.20 per diluted share, consisting of: (i) a favorable after-tax impact of $11.7 million, or $.12 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2014, based upon a reserve analysis; (ii) a net favorable after-tax impact of approximately $8.6 million, or $.08 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, and; (iii) an after-tax impact of $493,000 relating to the charge incurred during 2014 in connection with the settlement of the Garden City matter, as discussed below.    

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2013 was an aggregate net favorable after-tax impact of approximately $20.9 million, or $.21 per diluted share, consisting of: (i) a favorable after-tax impact of $9.2 million, or $.09 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, and; (ii) a net favorable after-tax impact of approximately $11.8 million, or $.12 per diluted share, related to the incentive income and expenses recorded in connection with the implementation of EHR applications at our acute care hospitals. 

Twelve-month periods ended December 31, 2014 and 2013:
For the twelve-month period ended December 31, 2014, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, increased approximately 29% to $581.8 million, or $5.78 per diluted share, as compared to $452.1 million, or $4.55 per diluted share, during the comparable twelve-month period of 2013.

As reflected on the Supplemental Schedule, included in our reported results during the year ended December 31, 2014 was a net aggregate unfavorable after-tax impact of approximately $36.4 million, or $.36 per diluted share, related to:

  • an after-tax charge of $27.1 million ($43.2 million pre-tax), or $.27 per diluted share, incurred in connection with the previously disclosed $65 million settlement of the Garden City Employees' Retirement System v. Psychiatric Solutions, Inc. ("Garden City"). This matter was a shareholder class action lawsuit filed in 2009 against Psychiatric Solutions, Inc. ("PSI") and certain of its former officers alleging their violations of federal securities laws and we assumed the defense and liability of this matter as a result of our acquisition of PSI in 2010. This charge is net of approximately $17 million of commercial insurance recoveries that we were entitled to and a previously recorded estimated reserve;
  • an aggregate after-tax charge incurred during the third quarter of 2014 of $22.7 million ($36.2 million pre-tax), or $.23 per diluted share, recorded in connection with the costs related to extinguishment of debt resulting primarily from the early redemption of our previously outstanding $250 million, 7.00% senior unsecured notes that were scheduled to mature in 2018 and the repayment of $550 million of borrowings pursuant to the terms of our previously outstanding Term Loan B facility which was scheduled to mature in 2016;
  • a favorable after-tax impact of $11.7 million, or $.12 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2014, based upon a reserve analysis;
  • an aggregate net unfavorable after-tax impact of $4.7 million, or $.04 per diluted share, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals, and;
  • a favorable after-tax impact of $6.3 million, or $.06 per diluted share, resulting from a gain realized on the sale of a non-operating investment during the first quarter of 2014.

As reflected on the Supplemental Schedule, included in our reported results during the full year of 2013 was an aggregate net favorable after-tax impact of approximately $58.6 million, or $.59 per diluted share, consisting of: (i) a favorable after-tax impact of $47.0 million, or $.47 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2013, based upon reserve analyses, and; (ii) a net favorable after-tax impact of approximately $11.6 million, or $.12 per diluted share, related to the incentive income and expenses recorded in connection with the implementation of EHR applications at our acute care hospitals.

Acute Care Services – Three and twelve-month periods ended December 31, 2014 and 2013:
During the fourth quarter of 2014, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 5.5% and adjusted patient days increased 6.8%, as compared to the fourth quarter of 2013. Net revenues at these facilities increased 14.9% during the fourth quarter of 2014 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 8.8% while net revenue per adjusted patient day increased 7.6% during the fourth quarter of 2014 as compared to the comparable quarter of 2013. On a same facility basis, the operating margin at our acute care hospitals increased to 18.1% during the fourth quarter of 2014 as compared to 14.1% during the fourth quarter of 2013. We define operating margin as net revenues less salaries, wages and benefits, other operating expenses and supplies expense (excluding the impact of EHR and other items as indicated on the Supplemental Schedules).

During the year ended December 31, 2014, at our acute care hospitals on a same facility basis, adjusted admissions increased 3.1% and adjusted patient days increased 6.5%, as compared to the 2013 full year. Net revenues at these facilities increased 10.0% during the 2014 full year as compared to the 2013 full year. At these facilities, net revenue per adjusted admission increased 6.6% while net revenue per adjusted patient day increased 3.3% during 2014 as compared to 2013. On a same facility basis, the operating margin at our acute care hospitals increased to 18.8% during the year ended December 31, 2014 as compared to 14.8% during the 2013 full year.

The increased operating performance experienced at our acute care facilities during 2014, as compared to 2013, was due in part to improving general economic conditions as well as a decrease in the number of uninsured patients treated at our hospitals.  The decrease in the number of uninsured patients treated at our acute care hospitals was due primarily to the favorable impact of the Affordable Care Act which includes the expansion of Medicaid in certain states in which we operate and the enrollment of patients in newly created commercial exchanges.

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on gross charges, amounting to approximately $284 million and $234 million during the three-month periods ended December 31, 2014 and 2013, respectively, and $1.14 billion and $999 million during the twelve-month periods ended December 31, 2014 and 2013, respectively. The provision for doubtful accounts at our acute care hospitals decreased to approximately $130 million during the three-month period ended December 31, 2014 as compared to $291 million during the comparable quarter of 2013, and decreased to $590 million during the twelve-month period ended December 31, 2014 as compared to $1.02 billion during the 2013 full year. During the three and twelve-month periods ended December 31, 2014, as compared to the comparable periods of 2013, our acute care hospitals experienced a decrease in the aggregate of charity care, uninsured discounts and provision for doubtful accounts as a percentage of gross charges.      

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2014 and 2013:
During the fourth quarter of 2014, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 6.8% while adjusted patient days increased 2.8% compared to the fourth quarter of 2013. At these facilities, net revenue per adjusted admission decreased 0.7% while net revenue per adjusted patient day increased 3.2% during the fourth quarter of 2014 as compared to the comparable quarter in 2013. On a same facility basis, our behavioral health services' net revenues increased 6.3% during the fourth quarter of 2014, as compared to the comparable quarter in 2013, and the operating margins were 28.0% and 27.7% during the three-month periods ended December 31, 2014 and 2013, respectively.   

During the twelve-month period ended December 31, 2014, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 4.7% while adjusted patient days increased 1.7% compared to the 2013 full year. At these facilities, net revenue per adjusted admission decreased 0.3% during the year ended December 31, 2014 while net revenue per adjusted patient day increased 2.7% during the twelve-month period ended December 31, 2014 as compared to the 2013 full year. On a same facility basis, our behavioral health services' net revenues increased 5.5% during the full year of 2014, as compared to 2013, and the operating margins were 28.0% and 28.1% during the twelve-month periods ended December 31, 2014 and 2013, respectively.

Share Repurchase Program:
During the third quarter of 2014, our Board of Directors authorized a stock repurchase program whereby, from time to time as conditions allow, we may spend up to $400 million to purchase shares of our Class B Common Stock on the open market or in negotiated private transactions.  In conjunction with this program, during the fourth quarter of 2014, we repurchased 321,500 shares at an aggregate cost of $32.7 million. Since inception of the program through December 31, 2014, we repurchased 548,192 shares at an aggregate cost of $57.9 million.    

2015 Full Year Guidance:
Our estimated range of adjusted net income attributable to UHS for the year ended December 31, 2015, is $6.15 to $6.55 per diluted share. This guidance range represents an increase of approximately 6% to 13% over the adjusted net income attributable to UHS of $5.78 per diluted share for the year ended December 31, 2014, as calculated on the attached Supplemental Schedule.  The range excludes the below-mentioned unfavorable EHR impact of $.12 per diluted share expected during 2015.  

During 2015, our net revenues are estimated to be approximately $8.7 billion to $8.8 billion representing an increase of approximately 8% to 9% over our 2014 net revenues.   

During 2015, we expect to record approximately $15 million of EHR incentive income and approximately $35 million of EHR-related depreciation and amortization expense resulting in a net unfavorable after-tax (and after income attributable to noncontrolling interest) impact of approximately $13 million, or $.12 per diluted share.       

This guidance range excludes the impact of 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.

Behavioral Health Care Acquisition in the United Kingdom ("UK"):
In February, 2015, we completed the acquisition of Orchard Portman House Hospital (renamed Cygnet Hospital-Taunton), a 46-bed behavioral health care facility located near Taunton in the UK. The acquisition of this facility expands our portfolio of hospitals providing behavioral health care services to older adults in the UK. Through our acquisition of Cygnet Health Care Limited in September, 2014, we acquired a total of 17 facilities located throughout the UK including 15 inpatient behavioral health hospitals and 2 nursing homes with a total of 723 beds.

Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 27, 2015. The dial-in number is 1-877-648-7971. 

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

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

This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2014), 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.

Our acute care hospitals are eligible for Medicare and Medicaid EHR incentive payments upon implementation of the EHR application, once they have demonstrated meaningful use of certified EHR technology for the applicable stage or have completed attestations to their adoption or implementation of certified EHR technology.  However, there may be timing differences in the recognition of the incentive income and expenses recorded in connection with the implementation of the EHR application which may cause material period-to-period changes in our future results of operations. Pursuant to regulations, hospitals that do not qualify as a meaningful user of EHR by 2015 are subject to a reduced market basket update to the inpatient prospective payment system standardized amount in 2015 and each subsequent fiscal year. We believe that all of our acute care hospitals have met the applicable meaningful use criteria and therefore are not subject to a reduced market basked update to the inpatient prospective payment standardized amount in federal fiscal year 2015. Under the HITECH Act, hospitals must continue to meet the applicable meaningful use criteria in each fiscal year or they will be subject to a market basket update reduction in a subsequent fiscal year.  

We believe that operating income, operating margin, adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share and earnings before interest, taxes, depreciation and amortization ("EBITDA"), which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of material items that are nonrecurring or non-operational in nature including items such as, but not limited to, costs related to extinguishment of debt, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods.  To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2014. 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


Twelve months


ended December 31,


ended December 31,


2014


2013


2014


2013









Net revenues before provision for doubtful accounts

$2,264,629


$2,116,288


$8,764,309


$8,411,038

  Less: Provision for doubtful accounts

157,048


315,442


698,983


1,127,216

Net revenues

2,107,581


1,800,846


8,065,326


7,283,822









Operating charges:








   Salaries, wages and benefits

994,593


901,778


3,845,461


3,604,620

   Other operating expenses

459,707


368,626


1,782,981


1,468,744

   Supplies expense

233,413


207,108


895,693


821,089

   Depreciation and amortization

98,118


88,707


375,624


337,172

   Lease and rental expense

23,337


25,107


93,993


97,758

   Electronic health records incentive income

(23,873)


(33,081)


(27,902)


(61,024)

   Costs related to extinguishment of debt

0


0


36,171


0


1,785,295


1,558,245


7,002,021


6,268,359









Income from operations

322,286


242,601


1,063,305


1,015,463









Interest expense, net

31,225


35,643


133,638


146,131









Income before income taxes

291,061


206,958


929,667


869,332









Provision for income taxes

100,569


73,772


324,671


315,309









Net income

190,492


133,186


604,996


554,023









Less:  Income attributable to








noncontrolling interests

17,695


8,665


59,653


43,290









Net income attributable to UHS

$172,797


$124,521


$545,343


$510,733

















































Basic earnings per share attributable to UHS (a)

$1.75


$1.27


$5.52


$5.21









Diluted earnings per share attributable to UHS (a)

$1.71


$1.24


$5.42


$5.14

 

 

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Twelve months


ended December 31,


ended December 31,


2014


2013


2014


2013









(a) Earnings per share calculation:
















Basic and diluted:








Net income attributable to UHS

$172,797


$124,521


$545,343


$510,733

Less: Net income attributable to unvested restricted share grants

(72)


(94)


(236)


(294)

Net income attributable to UHS - basic and diluted

$172,725


$124,427


$545,107


$510,439









Weighted average number of common shares - basic

98,808


98,237


98,826


98,033









Basic earnings per share attributable to UHS:

$1.75


$1.27


$5.52


$5.21









Weighted average number of common shares

98,808


98,237


98,826


98,033

Add: Other share equivalents

1,943


1,838


1,718


1,328

Weighted average number of common shares and equiv. - diluted

100,751


100,075


100,544


99,361









Diluted earnings per share attributable to UHS:

$1.71


$1.24


$5.42


$5.14

 

 

Universal Health Services, Inc.

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

For the three months ended December 31, 2014 and 2013

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Three months ended


Three months ended


December 31, 2014


December 31, 2013

















Net revenues before provision for doubtful accounts

$2,264,629




$2,116,288



  Less: Provision for doubtful accounts

157,048




315,442



Net revenues

2,107,581


100.0%


1,800,846


100.0%









Operating charges:








   Salaries, wages and benefits

994,593


47.2%


901,778


50.1%

   Other operating expenses

459,707


21.8%


368,626


20.5%

   Supplies expense

233,413


11.1%


207,108


11.5%

   EHR incentive income

(23,873)


-1.1%


(33,081)


-1.8%


1,663,840


78.9%


1,444,431


80.2%









Operating income/margin ("EBITDAR")

443,741


21.1%


356,415


19.8%









   Lease and rental expense

23,337




25,107



   Income attributable to noncontrolling interests

17,695




8,665











Earnings before, depreciation and amortization, costs related to extinguishment of debt, interest expense, and income taxes ("EBITDA")

402,709


19.1%


322,643


17.9%









   Depreciation and amortization

98,118




88,707



   Interest expense, net

31,225




35,643











Income before income taxes 

273,366




198,293











Provision for income taxes

100,569




73,772



Net income attributable to UHS

$172,797




$124,521



















Calculation of Adjusted Net Income Attributable to UHS










Three months ended


Three months ended


December 31, 2014


December 31, 2013




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

$172,797


$1.71


$124,521


$1.24

Plus/minus adjustments:








  Litigation settlement, net of income taxes

(493)


-


-


-

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








      self-insured claims, net of income taxes

(11,707)


(0.12)


(9,155)


(0.09)

Subtotal after-tax adjustments to net income attributable to UHS

(12,200)


(0.12)


(9,155)


(0.09)

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

$160,597


$1.59


$115,366


$1.15









Plus/minus impact of EHR implementation: 








EHR-related incentive income, pre-tax

(23,873)




(33,081)



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

-




1,579



EHR-related other operating costs, pre-tax

-




2,238



EHR-related depreciation & amortization, pre-tax

9,361




9,877



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

727




533



Income tax provision on EHR-related items 

5,147




7,078



After-tax impact of EHR-related items

(8,638)


(0.08)


(11,776)


(0.12)

Adjusted net income attributable to UHS

$151,959


$1.51


$103,590


$1.03

 

 

Universal Health Services, Inc.

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

For the twelve months ended December 31, 2014 and 2013

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Twelve months ended


Twelve months ended


December 31, 2014


December 31, 2013

















Net revenues before provision for doubtful accounts

$8,764,309




$8,411,038



  Less: Provision for doubtful accounts

698,983




1,127,216



Net revenues

8,065,326


100.0%


7,283,822


100.0%









Operating charges:








   Salaries, wages and benefits

3,845,461


47.7%


3,604,620


49.5%

   Other operating expenses

1,782,981


22.1%


1,468,744


20.2%

   Supplies expense

895,693


11.1%


821,089


11.3%

   EHR incentive income

(27,902)


-0.3%


(61,024)


-0.8%


6,496,233


80.5%


5,833,429


80.1%









Operating income/margin ("EBITDAR")

1,569,093


19.5%


1,450,393


19.9%









   Lease and rental expense

93,993




97,758



   Income attributable to noncontrolling interests

59,653




43,290











Earnings before, depreciation and amortization, costs related to extinguishment of debt, interest expense, and income taxes ("EBITDA")

1,415,447


17.5%


1,309,345


18.0%









   Depreciation and amortization

375,624




337,172



   Costs related to extinguishment of debt

36,171




0



   Interest expense, net

133,638




146,131











Income before income taxes 

870,014




826,042











Provision for income taxes

324,671




315,309



Net income attributable to UHS

$545,343




$510,733



















Calculation of Adjusted Net Income Attributable to UHS










Twelve months ended


Twelve months ended


December 31, 2014


December 31, 2013




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

$545,343


$5.42


$510,733


$5.14

Plus/minus adjustments:








  Gain on sale of investment, net of income taxes

(6,330)


(0.06)


-


-

  Litigation settlement, net of income taxes

27,077


0.27


-


-

  Costs related to extinguishment of debt, net of income taxes

22,665


0.23


-


-

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








      self-insured claims, net of income taxes

(11,707)


(0.12)


(46,981)


(0.47)

Subtotal after-tax adjustments to net income attributable to UHS

31,705


0.32


(46,981)


(0.47)

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

$577,048


$5.74


$463,752


$4.67









Plus/minus impact of EHR implementation: 








EHR-related incentive income, pre-tax

(27,902)




(61,024)



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

-




6,570



EHR-related other operating costs, pre-tax

-




3,363



EHR-related depreciation & amortization, pre-tax

37,273




33,286



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

(1,844)




(846)



Income tax provision on EHR-related items 

(2,822)




7,002



After-tax impact of EHR-related items

4,705


0.04


(11,649)


(0.12)

Adjusted net income attributable to UHS

$581,753


$5.78


$452,103


$4.55

 

 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)










Three months


Twelve months


ended December 31,


ended December 31,


2014


2013


2014


2013









Net income

$190,492


$133,186


$604,996


$554,023

Other comprehensive income (loss):








   Unrealized derivative gains (loss) on cash flow hedges

4,746


4,092


17,668


16,963

   Amortization of terminated hedge

(84)


(84)


(336)


(336)

   Minimum pension liability

(14,270)


14,657


(14,270)


14,657

   Foreign currency translation adjustment

75


0


(2,431)


0

Other comprehensive income before tax

(9,533)


18,665


631


31,284

Income tax expense related to items of other comprehensive income

(3,632)


7,182


1,053


11,940

Total other comprehensive income, net of tax

(5,901)


11,483


(422)


19,344









Comprehensive income

184,591


144,669


604,574


573,367

Less: Comprehensive income attributable to noncontrolling interests

17,695


8,665


59,653


43,290

Comprehensive income attributable to UHS

$166,896


$136,004


$544,921


$530,077

 

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)











December 31,



December 31,




2014



2013

Assets







Current assets:







    Cash and cash equivalents


$

32,069


$

17,238

    Accounts receivable, net



1,282,735



1,116,961

    Supplies



108,115



101,781

    Deferred income taxes



114,565



119,903

    Other current assets



77,654



76,446

          Total current assets



1,615,138



1,432,329








Property and equipment



6,212,030



5,691,902

Less: accumulated depreciation



(2,532,341)



(2,249,733)




3,679,689



3,442,169








Other assets:







    Goodwill



3,291,213



3,049,016

    Deferred charges



40,319



57,881

    Other



348,084



330,328



$

8,974,443


$

8,311,723








Liabilities and Stockholders' Equity







Current liabilities:







    Current maturities of long-term debt


$

68,319


$

99,312

    Accounts payable and accrued liabilities



1,113,062



953,449

    Federal and state taxes



1,446



7,127

          Total current liabilities



1,182,827



1,059,888








Other noncurrent liabilities



268,555



284,589

Long-term debt



3,210,215



3,209,762

Deferred income taxes



282,214



239,148








Redeemable noncontrolling interest



239,552



218,107








UHS common stockholders' equity



3,735,946



3,249,979

Noncontrolling interest



55,134



50,250

          Total equity



3,791,080



3,300,229










$

8,974,443


$

8,311,723

 

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Twelve months


ended December 31,


2014


2013





Cash Flows from Operating Activities:




  Net income

$604,996


$554,023

  Adjustments to reconcile net income to net 




cash provided by operating activities:




Depreciation & amortization

375,624


337,356

Gains on sales of assets and businesses, net of losses

(7,837)


(3,114)

Stock-based compensation expense

31,092


27,783

   Costs related to extinguishment of debt

19,730


0

  Changes in assets & liabilities, net of effects from




acquisitions and dispositions:




   Accounts receivable

(105,708)


(49,708)

   Accrued interest

4,400


(1,197)

   Accrued and deferred income taxes 

33,920


34,861

   Other working capital accounts 

73,912


26,234

   Other assets and deferred charges

13,667


8,984

   Other 

2,449


23,485

   Accrued insurance expense, net of commercial premiums paid

59,276


(3,821)

   Payments made in settlement of self-insurance claims

(69,645)


(70,645)

          Net cash provided by operating activities

1,035,876


884,241





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(391,150)


(358,493)

   Proceeds received from sales of assets and businesses

15,178


37,482

   Acquisition of property and businesses

(431,386)


(12,636)

   Costs incurred for purchase and implementation of electronic health records application

(13,488)


(49,811)

   Increase in insurance subsidiary investments

(12,000)


0

          Net cash used in investing activities

(832,846)


(383,458)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(879,129)


(440,224)

   Additional borrowings

830,000


15,761

   Financing costs

(14,976)


(231)

   Repurchase of common shares

(100,749)


(27,201)

   Dividends paid

(29,665)


(19,621)

   Issuance of common stock

6,863


5,708

   Excess income tax benefits related to stock-based compensation

33,912


20,121

   Profit distributions to noncontrolling interests

(33,680)


(61,329)

          Net cash used in financing activities

(187,424)


(507,016)





   Effect of exchange rate changes on cash and cash equivalents

(775)


0

Increase (decrease) in cash and cash equivalents

14,831


(6,233)

Cash and cash equivalents, beginning of period

17,238


23,471

Cash and cash equivalents, end of period

$32,069


$17,238





Supplemental Disclosures of Cash Flow Information:




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

$130,279


$131,259





  Income taxes paid, net of refunds

$258,612


$259,896





  Noncash purchases of property and equipment

$35,469


$36,212

 

 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)


























 % Change 


 % Change 








quarter ended


12 months ended



Same Facility:





12/31/2014


12/31/2014













Acute Care Hospitals










Revenues





14.9%


10.0%



Adjusted Admissions





5.5%


3.1%



Adjusted Patient Days





6.8%


6.5%



Revenue Per Adjusted Admission





8.8%


6.6%



Revenue Per Adjusted Patient Day





7.6%


3.3%























Behavioral Health Hospitals




















Revenues





6.3%


5.5%



Adjusted Admissions





6.8%


4.7%



Adjusted Patient Days





2.8%


1.7%



Revenue Per Adjusted Admission





-0.7%


-0.3%



Revenue Per Adjusted Patient Day





3.2%


2.7%











































UHS Consolidated



Fourth quarter ended


Twelve months ended




12/31/2014


12/31/2013


12/31/2014


12/31/2013











Revenues



$2,107,581


$1,800,846


$8,065,326


$7,283,822

EBITDA   (1)



402,709


322,643


1,415,447


1,309,345

EBITDA Margin (1)



19.1%


17.9%


17.5%


18.0%











Cash Flow From Operations



346,322


308,318


1,035,876


884,241

Days Sales Outstanding



56


57


58


56

Capital Expenditures  



81,789


78,742


391,150


358,493











Debt 







3,278,534


3,309,074

UHS' Shareholders Equity







3,735,946


3,249,979

Debt / Total Capitalization







46.7%


50.5%

Debt / EBITDA  (2)







2.32


2.53

Debt / Cash From Operations  (2)







3.16


3.74





















Acute Care EBITDAR Margin  (3) 



18.1%


14.1%


18.8%


14.8%

Behavioral Health EBITDAR Margin  (3) 


28.0%


27.7%


28.0%


28.1%





















(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

December 31, 2014 and 2013



















AS REPORTED:





























                       ACUTE



               BEHAVIORAL HEALTH



12/31/14

12/31/13

%  change


12/31/14

12/31/13

%  change










Hospitals owned and leased


24

24

0.0%


203

180

12.8%

Average licensed beds


5,769

5,757

0.2%


20,925

19,961

4.8%

Patient days


292,009

276,186

5.7%


1,414,337

1,310,563

7.9%

Average daily census


3,174.0

3,002.0

5.7%


15,373.2

14,245.3

7.9%

Occupancy-licensed beds


55.0%

52.1%

5.6%


73.5%

71.4%

2.9%

Admissions


63,578

60,569

5.0%


106,845

97,783

9.3%

Length of stay


4.6

4.6

0.7%


13.2

13.4

-1.2%










Inpatient revenue


$3,725,782

$3,344,361

11.4%


$1,716,120

$1,552,079

10.6%

Outpatient revenue


2,063,316

1,756,242

17.5%


203,682

185,222

10.0%

Total patient revenue


5,789,098

5,100,603

13.5%


1,919,802

1,737,301

10.5%

Other revenue


88,608

32,678

171.2%


50,041

40,546

23.4%

Gross hospital revenue


5,877,706

5,133,281

14.5%


1,969,843

1,777,847

10.8%










Total deductions


4,676,086

3,969,063

17.8%


911,274

832,169

9.5%










Net hospital revenue before 









  provision for doubtful accounts

1,201,620

1,164,218

3.2%


1,058,569

945,678

11.9%










Provision for doubtful accounts

130,065

290,762

-55.3%


26,921

24,660

9.2%










Net hospital revenue 


$1,071,555

$873,456

22.7%


$1,031,648

$921,018

12.0%



















SAME FACILITY:




















                      ACUTE  (1)



             BEHAVIORAL HEALTH (2)



12/31/14

12/31/13

%  change


12/31/14

12/31/13

%  change










Hospitals owned and leased


23

23

0.0%


179

179

0.0%

Average licensed beds


5,629

5,617

0.2%


19,702

19,503

1.0%

Patient days


287,583

274,684

4.7%


1,329,060

1,297,338

2.4%

Average daily census


3,125.9

2,985.7

4.7%


14,446.3

14,101.5

2.4%

Occupancy-licensed beds


55.5%

53.2%

4.5%


73.3%

72.3%

1.4%

Admissions


62,204

60,123

3.5%


104,035

97,745

6.4%

Length of stay


4.6

4.6

1.2%


12.8

13.3

-3.7%





































(1) Temecula is excluded in both current and prior years















(2) Okaloosa Youth Academy, Palo Verde, Psychiatric Institute of Washington, Sun Coast BH, 

     Fairfax Everett, Quail Run and the UK facilites are excluded in both current and prior years.

 

 

Universal Health Services, Inc.

Selected Hospital Statistics

For the Twelve Months ended

December 31, 2014 and 2013



















AS REPORTED:





























                       ACUTE



               BEHAVIORAL HEALTH



12/31/14

12/31/13

%  change


12/31/14

12/31/13

%  change










Hospitals owned and leased


24

24

0.0%


203

180

12.8%

Average licensed beds


5,776

5,652

2.2%


20,231

19,975

1.3%

Patient days


1,167,726

1,112,541

5.0%


5,518,660

5,365,734

2.9%

Average daily census


3,199.2

3,048.1

5.0%


15,119.6

14,700.6

2.9%

Occupancy-licensed beds


55.4%

53.9%

2.7%


74.7%

73.6%

1.5%

Admissions


251,165

246,160

2.0%


426,510

402,088

6.1%

Length of stay


4.6

4.5

2.9%


12.9

13.3

-3.0%










Inpatient revenue


$14,943,102

$13,469,269

10.9%


$6,689,753

$6,294,046

6.3%

Outpatient revenue


8,147,031

6,828,307

19.3%


784,309

744,510

5.3%

Total patient revenue


23,090,133

20,297,576

13.8%


7,474,062

7,038,556

6.2%

Other revenue


261,835

128,462

103.8%


185,997

136,454

36.3%

Gross hospital revenue


23,351,968

20,426,038

14.3%


7,660,059

7,175,010

6.8%










Total deductions


18,656,494

15,833,936

17.8%


3,605,622

3,395,773

6.2%










Net hospital revenue before 









  provision for doubtful accounts

4,695,474

4,592,102

2.3%


4,054,437

3,779,237

7.3%










Provision for doubtful accounts

590,384

1,015,733

-41.9%


108,970

111,270

-2.1%










Net hospital revenue 


$4,105,090

$3,576,369

14.8%


$3,945,467

$3,667,967

7.6%




























SAME FACILITY:





























                       ACUTE   (1)



             BEHAVIORAL HEALTH (2)



12/31/14

12/31/13

%  change


12/31/14

12/31/13

%  change










Hospitals owned and leased


23

23

0.0%


179

179

0.0%

Average licensed beds


5,634

5,617

0.3%


19,597

19,430

0.9%

Patient days


1,153,911

1,111,097

3.9%


5,348,491

5,259,979

1.7%

Average daily census


3,161.4

3,044.1

3.9%


14,653.4

14,410.9

1.7%

Occupancy-licensed beds


56.1%

54.2%

3.5%


74.8%

74.2%

0.8%

Admissions


247,078

245,714

0.6%


419,661

400,934

4.7%

Length of stay


4.7

4.5

3.3%


12.7

13.1

-2.9%




























(1) Temecula is excluded in both current and prior years















(2) Okaloosa Youth Academy, Palo Verde, Psychiatric Institute of Washington, Sun Coast BH, 

     Fairfax Everett, Quail Run and the UK facilities are excluded in both current and prior years.

     Garfield Park is excluded in both current and prior years in January only.  Austin Oaks is excluded in both current

     and prior years January thru May.




 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/universal-health-services-inc-reports-2014-fourth-quarter-and-full-year-earnings-and-2015-earnings-guidance-300042418.html

SOURCE Universal Health Services, Inc.

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