Universal Health Services, Inc. Reports Financial Results For The Three And Nine Months Ended September 30, 2014

Consolidated Results of Operations, As Reported - Three and nine-month periods ended September 30, 2014 and 2013:

KING OF PRUSSIA, Pa., Oct. 27, 2014 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $82.8 million, or $.82 per diluted share, during the third quarter of 2014 as compared to $114.6 million, or $1.15 per diluted share, during the comparable quarter of 2013.  Net revenues increased 11.1% to $2.02 billion during the third quarter of 2014 as compared to $1.82 billion during the third quarter of 2013.

Reported net income attributable to UHS was $372.5 million, or $3.71 per diluted share, during the first nine months of 2014 as compared to $386.2 million, or $3.89 per diluted share, during the comparable period of 2013.  Net revenues increased 8.7% to $5.96 billion during the first nine months of 2014 as compared to $5.48 billion during the comparable period of 2013. 

Included in our reported results during the three and nine-month periods ended September 30, 2014 was a pre-tax charge of $44.0 million incurred in connection with a previously disclosed legal settlement (as discussed below) as well as a pre-tax charge of $36.2 million resulting from the costs related to the extinguishment of debt in connection with the previously disclosed financing transactions that occurred during the quarter.

Consolidated Results of Operations, As Adjusted – Three and nine-month periods ended September 30, 2014 and 2013:

For the three-month period ended September 30, 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 26% to $137.5 million, or $1.36 per diluted share, as compared to $109.5 million, or $1.10 per diluted share, during the third quarter of 2013.

As reflected on the Supplemental Schedule, included in our reported results during the third quarter of 2014 was an aggregate net unfavorable after-tax impact of approximately $54.7 million, or $.54 per diluted share, related to:

  • an after-tax charge of $27.6 million ($44.0 million pre-tax), or $.27 per diluted share,  incurred in connection with the previously disclosed $65 million settlement of Garden City Employees' Retirement System v. Psychiatric Solutions, Inc. ("PSI"), Joey A. Jacobs, Brent Turner and Jack E. Polson. This matter was a shareholder class action lawsuit filed in 2009 against 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.  The charge incurred during the third quarter of 2014 is net of approximately $16 million of commercial insurance recoveries that we were entitled to and a previously recorded estimated reserve;
  • an aggregate after-tax charge 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, and;     
  • an aggregate net unfavorable after-tax impact of $4.5 million, or $.04 per diluted share, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals.   

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 EHR applications at our acute care hospitals. 

For the nine-month period ended September 30, 2014, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, increased approximately 23% to $429.8 million, or $4.28 per diluted share, as compared to $348.5 million, or $3.51 per diluted share, during the comparable period of 2013.

As reflected on the Supplemental Schedule, included in our reported results during the nine-month period ended September 30, 2014 was: (i) an unfavorable after-tax impact of approximately $27.6 million, or $.27 per diluted share, resulting from the above-mentioned litigation settlement during the third quarter of 2014; (ii) an aggregate unfavorable after-tax impact of approximately $22.7 million, or $.23 per diluted share, resulting from the above-mentioned costs related to extinguishment of debt incurred during the third quarter of 2014; (iii) an aggregate net unfavorable after-tax impact of approximately $13.3 million, or $.13 per diluted share, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of EHR applications, and; (iv) 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.  

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.   

Acute Care Services – Three and nine-month periods ended September 30, 2014 and 2013:

During the third quarter of 2014, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 4.1% and adjusted patient days increased 6.7%, as compared to the third quarter of 2013. Net revenues at these facilities increased 7.9% during the third quarter of 2014 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 3.6% while net revenue per adjusted patient day increased 1.0% during the third 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 18.3% during the third quarter of 2014 as compared to 14.4% during the third quarter of 2013. We define operating margin as net revenues less salaries, wages and benefits, other operating expenses and supplies expense (excluding the EHR impact, as indicated on the Supplemental Schedule).

During the first nine months of 2014, at our acute care hospitals on a same facility basis, adjusted admissions increased 2.3% and adjusted patient days increased 6.4%, as compared to the comparable period of 2013. Net revenues at these facilities increased 8.4% during the first nine months of 2014 as compared to the comparable period of the prior year. At these facilities, net revenue per adjusted admission increased 5.9% while net revenue per adjusted patient day increased 1.9% during the first nine months of 2014 as compared to the comparable period of 2013. On a same facility basis, the operating margin at our acute care hospitals increased to 19.1% during the first nine months of 2014 as compared to 15.1% during the comparable period of 2013.

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 $266 million and $276 million during the three-month periods ended September 30, 2014 and 2013, respectively, and $852 million and $764 million during the nine-month periods ended September 30, 2014 and 2013, respectively. The provision for doubtful accounts at our acute care hospitals decreased to approximately $129 million during the three-month period ended September 30, 2014 as compared to $291 million during the comparable quarter of 2013, and decreased to $460 million during the nine-month period ended September 30, 2014 as compared to $725 million during the comparable period of 2013.  During the three and nine-month periods ended September 30, 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 nine-month periods ended September 30, 2014 and 2013:

During the third quarter of 2014, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 5.4% while adjusted patient days increased 2.1% compared to the third quarter of 2013. At these facilities, net revenue per adjusted admission decreased 0.3% while net revenue per adjusted patient day increased 2.9% during the third quarter of 2014 as compared to the comparable quarter in 2013. On a same facility basis, our behavioral health services' net revenues increased 6.2% during the third quarter of 2014, as compared to the comparable quarter in 2013, and the operating margins were 27.6% and 27.3% during the three-month periods ended September 30, 2014 and 2013, respectively.   

During the nine-month period ended September 30, 2014, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 4.0% while adjusted patient days increased 1.4% compared to the comparable period of 2013. At these facilities, net revenue per adjusted admission remained relatively unchanged while net revenue per adjusted patient day increased 2.5% during the first nine months of 2014 as compared to the comparable period of 2013. On a same facility basis, our behavioral health services' net revenues increased 5.3% during the first nine months of 2014, as compared to the comparable period of 2013, and the operating margins were 28.0% and 28.2% during the nine-month periods ended September 30, 2014 and 2013, respectively.

Acquisition of Cygnet and Share Repurchase Program:

As previously disclosed, in late September, 2014, we acquired the stock of Cygnet Health Care Limited ("Cygnet") for a purchase price of approximately $327 million. Through this acquisition, we have added a total of 18 facilities located throughout the United Kingdom including 16 inpatient behavioral health hospitals and 2 nursing homes with a total of 734 beds. The Cygnet facilities generated aggregate revenues of approximately $161 million during the twelve-month period prior to our acquisition.

During the third quarter of 2014, our Board of Directors authorized a stock repurchase program whereby, from time to time as conditions allow, we may spend up to $400 million to purchase shares of our Class B Common Stock on the open market or in negotiated private transactions.  In conjunction with this program, during the third quarter of 2014, we repurchased 226,692 shares at an aggregate cost of $25.2 million.      

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on October 28, 2014. 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, 2013 and in Item 2-Forward Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended June 30, 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. 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, 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, 2013 and our Report on Form 10-Q for the quarterly period ended June 30, 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


Nine months


ended September 30,


ended September 30,


2014


2013


2014


2013









Net revenues before provision for doubtful accounts

$2,175,554


$2,134,740


$6,499,680


$6,294,750

  Less: Provision for doubtful accounts

157,796


318,371


541,935


811,774

Net revenues

2,017,758


1,816,369


5,957,745


5,482,976









Operating charges:








   Salaries, wages and benefits

953,583


903,212


2,850,868


2,702,842

   Other operating expenses

512,794


393,549


1,323,274


1,100,118

   Supplies expense

222,708


206,995


662,280


613,981

   Depreciation and amortization

93,456


86,971


277,506


248,465

   Lease and rental expense

23,860


23,904


70,656


72,651

   Electronic health records incentive income

(1,425)


(23,148)


(4,029)


(27,943)

   Costs related to extinguishment of debt

36,171


0


36,171


0


1,841,147


1,591,483


5,216,726


4,710,114









Income from operations

176,611


224,886


741,019


772,862









Interest expense, net

32,133


32,314


102,413


110,488









Income before income taxes

144,478


192,572


638,606


662,374









Provision for income taxes

48,440


69,473


224,102


241,537









Net income

96,038


123,099


414,504


420,837









Less:  Income attributable to








noncontrolling interests

13,241


8,512


41,958


34,625









Net income attributable to UHS

$82,797


$114,587


$372,546


$386,212

















































Basic earnings per share attributable to UHS (a)

$0.84


$1.17


$3.77


$3.94









Diluted earnings per share attributable to UHS (a)

$0.82


$1.15


$3.71


$3.89

 

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,


2014


2013


2014


2013









(a) Earnings per share calculation:
















Basic and diluted:








Net income attributable to UHS

$82,797


$114,587


$372,546


$386,212

Less: Net income attributable to unvested restricted share grants

(17)


(43)


(164)


(200)

Net income attributable to UHS - basic and diluted

$82,780


$114,544


$372,382


$386,012









Weighted average number of common shares - basic

99,052


98,151


98,832


97,965









Basic earnings per share attributable to UHS:

$0.84


$1.17


$3.77


$3.94









Weighted average number of common shares

99,052


98,151


98,832


97,965

Add: Other share equivalents

1,981


1,436


1,643


1,158

Weighted average number of common shares and equiv. - diluted

101,033


99,587


100,475


99,123









Diluted earnings per share attributable to UHS:

$0.82


$1.15


$3.71


$3.89

 

Universal Health Services, Inc.

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

For the three months ended September 30, 2014 and 2013

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Three months ended


Three months ended


September 30, 2014


September 30, 2013

















Net revenues before provision for doubtful accounts

$2,175,554




$2,134,740



  Less: Provision for doubtful accounts

157,796




318,371



Net revenues

2,017,758


100.0%


1,816,369


100.0%









Operating charges:








   Salaries, wages and benefits

953,583


47.3%


903,212


49.7%

   Other operating expenses

512,794


25.4%


393,549


21.7%

   Supplies expense

222,708


11.0%


206,995


11.4%

   EHR incentive income

(1,425)


-0.1%


(23,148)


-1.3%


1,687,660


83.6%


1,480,608


81.5%









Operating income/margin ("EBITDAR")

330,098


16.4%


335,761


18.5%









   Lease and rental expense

23,860




23,904



   Income attributable to noncontrolling interests

13,241




8,512











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

292,997


14.5%


303,345


16.7%









   Depreciation and amortization

93,456




86,971



   Costs related to extinguishment of debt

36,171




0



   Interest expense, net

32,133




32,314











Income before income taxes 

131,237




184,060











Provision for income taxes

48,440




69,473



Net income attributable to UHS

$82,797




$114,587



















Calculation of Adjusted Net Income Attributable to UHS










Three months ended


Three months ended


September 30, 2014


September 30, 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

$82,797


$0.82


$114,587


$1.15

Plus/minus adjustments:








  Litigation settlement, net of income taxes

27,570


0.27


-


-

  Costs related to extinguishment of debt, net of income taxes

22,665


0.23


-


-

Subtotal after-tax adjustments to net income attributable to UHS

50,235


0.50


-


-

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

$133,032


$1.32


$114,587


$1.15









Plus/minus impact of EHR implementation: 








EHR-related incentive income, pre-tax

(1,425)




(23,148)



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

-




4,753



EHR-related other operating costs, pre-tax

-




(893)



EHR-related depreciation & amortization, pre-tax

9,312




10,916



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

(733)




147



Income tax provision on EHR-related items 

(2,671)




3,098



After-tax impact of EHR-related items

4,483


0.04


(5,127)


(0.05)

Adjusted net income attributable to UHS

$137,515


$1.36


$109,460


$1.10

 

Universal Health Services, Inc.

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

For the nine months ended September 30, 2014 and 2013

(in thousands, except per share amounts)

(unaudited)

























Calculation of "EBITDA"










Nine months ended


Nine months ended


September 30, 2014


September 30, 2013

















Net revenues before provision for doubtful accounts

$6,499,680




$6,294,750



  Less: Provision for doubtful accounts

541,935




811,774



Net revenues

5,957,745


100.0%


5,482,976


100.0%









Operating charges:








   Salaries, wages and benefits

2,850,868


47.9%


2,702,842


49.3%

   Other operating expenses

1,323,274


22.2%


1,100,118


20.1%

   Supplies expense

662,280


11.1%


613,981


11.2%

   EHR incentive income

(4,029)


-0.1%


(27,943)


-0.5%


4,832,393


81.1%


4,388,998


80.0%









Operating income/margin ("EBITDAR")

1,125,352


18.9%


1,093,978


20.0%









   Lease and rental expense

70,656




72,651



   Income attributable to noncontrolling interests

41,958




34,625











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

1,012,738


17.0%


986,702


18.0%









   Depreciation and amortization

277,506




248,465



   Costs related to extinguishment of debt

36,171




0



   Interest expense, net

102,413




110,488











Income before income taxes 

596,648




627,749











Provision for income taxes

224,102




241,537



Net income attributable to UHS

$372,546




$386,212



















Calculation of Adjusted Net Income Attributable to UHS










Nine months ended


Nine months ended


September 30, 2014


September 30, 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

$372,546


$3.71


$386,212


$3.89

Plus/minus adjustments:








  Gain on sale of investment, net of income taxes

(6,330)


(0.06)


-


-

  Litigation settlement, net of income taxes

27,570


0.27


-


-

  Costs related to extinguishment of debt, net of income taxes

22,665


0.23


-


-

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








      self-insured claims, net of income taxes

-


-


(37,826)


(0.38)

Subtotal after-tax adjustments to net income attributable to UHS

43,905


0.44


(37,826)


(0.38)

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

$416,451


$4.15


$348,386


$3.51









Plus/minus impact of EHR implementation: 








EHR-related incentive income, pre-tax

(4,029)




(27,943)



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

0




4,991



EHR-related other operating costs, pre-tax

0




1,125



EHR-related depreciation & amortization, pre-tax

27,912




23,408



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

(2,571)




(1,378)



Income tax provision on EHR-related items 

(7,969)




(76)



After-tax impact of EHR-related items

13,343


0.13


127


-

Adjusted net income attributable to UHS

$429,794


$4.28


$348,513


$3.51

 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)










Three months


Nine months


ended September 30,


ended September 30,


2014


2013


2014


2013









Net income

$96,038


$123,099


$414,504


$420,837

Other comprehensive income (loss):








   Unrealized derivative gains (loss) on cash flow hedges

4,712


3,054


12,922


12,871

   Amortization of terminated hedge

(84)


(84)


(252)


(252)

   Currency translation adjustment

(2,506)


0


(2,506)


0

Other comprehensive income before tax

2,122


2,970


10,164


12,619

Income tax expense related to items of other comprehensive income

1,620


1,120


4,685


4,758

Total other comprehensive income, net of tax

502


1,850


5,479


7,861









Comprehensive income

96,540


124,949


419,983


428,698

Less: Comprehensive income attributable to noncontrolling interests

13,241


8,512


41,958


34,625

Comprehensive income attributable to UHS

$83,299


$116,437


$378,025


$394,073

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)











September 30,



December 31,




2014



2013

Assets







Current assets:







    Cash and cash equivalents


$

39,711


$

17,238

    Accounts receivable, net



1,239,478



1,116,961

    Supplies



104,390



101,781

    Deferred income taxes



95,204



119,903

    Other current assets



143,311



76,446

          Total current assets



1,622,094



1,432,329








Property and equipment



6,105,090



5,691,902

Less: accumulated depreciation



(2,456,116)



(2,249,733)




3,648,974



3,442,169








Other assets:







    Goodwill



3,296,358



3,049,016

    Deferred charges



41,910



57,881

    Other



352,256



330,328



$

8,961,592


$

8,311,723








Liabilities and Stockholders' Equity







Current liabilities:







    Current maturities of long-term debt


$

81,477


$

99,312

    Accounts payable and accrued liabilities



1,083,987



953,449

    Federal and state taxes



0



7,127

          Total current liabilities



1,165,464



1,059,888








Other noncurrent liabilities



280,797



284,589

Long-term debt



3,373,341



3,209,762

Deferred income taxes



253,191



239,148








Redeemable noncontrolling interest



231,473



218,107








UHS common stockholders' equity



3,603,204



3,249,979

Noncontrolling interest



54,122



50,250

          Total equity



3,657,326



3,300,229










$

8,961,592


$

8,311,723

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Nine months


ended September 30,


2014


2013





Cash Flows from Operating Activities:




  Net income

$414,504


$420,837

  Adjustments to reconcile net income to net 




cash provided by operating activities:




Depreciation & amortization

277,506


248,648

Gains on sales of assets and businesses, net of losses

(7,837)


(2,973)

Stock-based compensation expense

22,713


20,072

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

19,730


0

  Changes in assets & liabilities, net of effects from




acquisitions and dispositions:




   Accounts receivable

(98,193)


(99,261)

   Accrued interest

6,547


10,376

   Accrued and deferred income taxes 

(18,392)


5,109

   Other working capital accounts 

59,613


10,313

   Other assets and deferred charges

15,868


13,425

   Other 

(7,000)


5,792

   Accrued insurance expense, net of commercial premiums paid

57,729


(1,406)

   Payments made in settlement of self-insurance claims

(53,234)


(55,009)

          Net cash provided by operating activities

689,554


575,923





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(309,361)


(279,751)

   Proceeds received from sale of assets and businesses

15,178


37,118

   Cash paid/reserved related to acquisition of property and businesses

(402,405)


(1,320)

   Costs incurred for purchase and implementation of electronic health records application

(11,204)


(42,353)

          Net cash used in investing activities

(707,792)


(286,306)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(842,543)


(234,231)

   Additional borrowings

969,800


1,500

   Financing costs

(13,413)


0

   Repurchase of common shares

(63,292)


(22,186)

   Dividends paid

(19,794)


(14,706)

   Issuance of common stock

4,907


4,096

   Excess income tax benefits related to stock-based compensation

30,242


15,809

   Profit distributions to noncontrolling interests

(25,074)


(51,248)

          Net cash provided by (used in) financing activities

40,833


(300,966)





Effect of exchange rate changes on cash and cash equivalents

(122)


0

Increase (decrease) in cash and cash equivalents

22,473


(11,349)

Cash and cash equivalents, beginning of period

17,238


23,471

Cash and cash equivalents, end of period

$39,711


$12,122





Supplemental Disclosures of Cash Flow Information:




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

$98,670


$88,430





  Income taxes paid, net of refunds

$212,148


$218,290

 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)


























 % Change 


 % Change 








quarter ended


9 months ended



Same Facility:





9/30/2014


9/30/2014













Acute Care Hospitals










Revenues





7.9%


8.4%



Adjusted Admissions





4.1%


2.3%



Adjusted Patient Days





6.7%


6.4%



Revenue Per Adjusted Admission





3.6%


5.9%



Revenue Per Adjusted Patient Day





1.0%


1.9%























Behavioral Health Hospitals




















Revenues





6.2%


5.3%



Adjusted Admissions





5.4%


4.0%



Adjusted Patient Days





2.1%


1.4%



Revenue Per Adjusted Admission





-0.3%


-0.1%



Revenue Per Adjusted Patient Day





2.9%


2.5%











































UHS Consolidated



Third quarter ended


Nine months ended




9/30/2014


9/30/2013


9/30/2014


9/30/2013











Revenues



$2,017,758


$1,816,369


$5,957,745


$5,482,976

EBITDA   (1)



292,997


303,345


1,012,738


986,702

EBITDA Margin (1)



14.5%


16.7%


17.0%


18.0%











Cash Flow From Operations



231,138


185,006


689,554


575,923

Days Sales Outstanding



57


59


57


58

Capital Expenditures  



122,575


103,807


309,361


279,751











Debt 







3,454,818


3,499,927

UHS' Shareholders Equity







3,603,204


3,110,778

Debt / Total Capitalization







48.9%


52.9%

Debt / EBITDA  (2)







2.59


2.63

Debt / Cash From Operations  (2)







3.46


4.17





















Acute Care EBITDAR Margin  (3) 



18.3%


14.4%


19.1%


15.1%

Behavioral Health EBITDAR Margin  (3) 


27.6%


27.3%


28.0%


28.2%





















(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, 2014 and 2013



















AS REPORTED:





























ACUTE


BEHAVIORAL HEALTH



09/30/14

09/30/13

%  change


09/30/14

09/30/13

%  change










Hospitals owned and leased


24

23

4.3%


202

182

11.0%

Average licensed beds


5,769

5,617

2.7%


20,263

19,930

1.7%

Patient days


285,861

272,905

4.7%


1,381,789

1,331,234

3.8%

Average daily census


3,107.2

2,966.3

4.7%


15,019.4

14,469.9

3.8%

Occupancy-licensed beds


53.9%

52.8%

2.0%


74.1%

72.6%

2.1%

Admissions


63,749

61,155

4.2%


108,334

101,183

7.1%

Length of stay


4.5

4.5

0.5%


12.8

13.2

-3.1%










Inpatient revenue


$3,616,647

$3,296,484

9.7%


$1,678,222

$1,567,436

7.1%

Outpatient revenue


2,058,148

1,712,290

20.2%


192,032

179,783

6.8%

Total patient revenue


5,674,795

5,008,774

13.3%


1,870,254

1,747,219

7.0%

Other revenue


84,541

33,912

149.3%


46,539

33,921

37.2%

Gross hospital revenue


5,759,336

5,042,686

14.2%


1,916,793

1,781,140

7.6%










Total deductions


4,592,288

3,852,278

19.2%


911,975

845,786

7.8%










Net hospital revenue before 









  provision for doubtful accounts

1,167,048

1,190,408

-2.0%


1,004,818

935,354

7.4%










Provision for doubtful accounts

128,913

290,875

-55.7%


28,804

27,419

5.1%










Net hospital revenue 


$1,038,135

$899,533

15.4%


$976,014

$907,935

7.5%



















SAME FACILITY:




















ACUTE  (1)


BEHAVIORAL HEALTH (2)



09/30/14

09/30/13

%  change


09/30/14

09/30/13

%  change










Hospitals owned and leased


23

23

0.0%


174

174

0.0%

Average licensed beds


5,629

5,617

0.2%


19,651

19,472

0.9%

Patient days


282,118

272,905

3.4%


1,338,361

1,309,960

2.2%

Average daily census


3,066.5

2,966.3

3.4%


14,547.4

14,238.7

2.2%

Occupancy-licensed beds


54.5%

52.8%

3.2%


74.0%

73.1%

1.2%

Admissions


61,634

61,155

0.8%


106,583

101,135

5.4%

Length of stay


4.6

4.5

2.6%


12.6

13.0

-3.1%




























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















(2) Bristol Youth Academy, Community BH, Gulf Coast Treatment Center, John Costigan Ctr, Okaloosa 


     Youth Academy, Palo Verde, The Peaks, Psychiatric Institute of Washington, Sun Coast BH,

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

 

Universal Health Services, Inc.

Selected Hospital Statistics

For the Nine Months ended

September 30, 2014 and 2013



















AS REPORTED:





























ACUTE


BEHAVIORAL HEALTH



09/30/14

09/30/13

%  change


09/30/14

09/30/13

%  change










Hospitals owned and leased


24

23

4.3%


202

182

11.0%

Average licensed beds


5,776

5,617

2.8%


19,991

19,979

0.1%

Patient days


875,717

836,355

4.7%


4,104,323

4,055,171

1.2%

Average daily census


3,207.8

3,063.6

4.7%


15,034.2

14,854.1

1.2%

Occupancy-licensed beds


55.5%

54.5%

1.8%


75.2%

74.3%

1.2%

Admissions


187,587

185,591

1.1%


319,665

304,305

5.0%

Length of stay


4.7

4.5

3.6%


12.8

13.3

-3.7%










Inpatient revenue


$11,217,320

$10,124,908

10.8%


$4,973,633

$4,741,967

4.9%

Outpatient revenue


6,083,715

5,072,065

19.9%


580,627

559,288

3.8%

Total patient revenue


17,301,035

15,196,973

13.8%


5,554,260

5,301,255

4.8%

Other revenue


173,227

95,784

80.9%


135,956

95,908

41.8%

Gross hospital revenue


17,474,262

15,292,757

14.3%


5,690,216

5,397,163

5.4%










Total deductions


13,980,408

11,864,873

17.8%


2,694,348

2,563,604

5.1%










Net hospital revenue before 









  provision for doubtful accounts

3,493,854

3,427,884

1.9%


2,995,868

2,833,559

5.7%










Provision for doubtful accounts

460,319

724,971

-36.5%


82,049

86,610

-5.3%










Net hospital revenue 


$3,033,535

$2,702,913

12.2%


$2,913,819

$2,746,949

6.1%



















SAME FACILITY:




















ACUTE   (1)


BEHAVIORAL HEALTH (2)



09/30/14

09/30/13

%  change


09/30/14

09/30/13

%  change










Hospitals owned and leased


23

23

0.0%


174

174

0.0%

Average licensed beds


5,636

5,617

0.3%


19,562

19,406

0.8%

Patient days


866,284

836,355

3.6%


4,019,543

3,962,813

1.4%

Average daily census


3,173.2

3,063.6

3.6%


14,723.6

14,515.8

1.4%

Occupancy-licensed beds


56.3%

54.5%

3.2%


75.3%

74.8%

0.6%

Admissions


184,874

185,591

-0.4%


315,626

303,189

4.1%

Length of stay


4.7

4.5

4.0%


12.7

13.1

-2.6%




























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















(2) Bristol Youth Academy, Community BH, Gulf Coast Treatment Center, John Costigan Ctr, Okaloosa 


     Youth Academy, Palo Verde, The Peaks, Psychiatric Institute of Washington, Sun Coast BH, Fairfax Everett,


     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-financial-results-for-the-three-and-nine-months-ended-september-30-2014-333207733.html

SOURCE Universal Health Services, Inc.

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