UNIVERSAL HEALTH SERVICES, INC. ANNOUNCES 2023 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS AND 2024 OPERATING RESULTS FORECAST

02/27/2024

Consolidated Results of Operations, As Reported and As Adjusted  – Three-month periods ended December 31, 2023 and 2022:

KING OF PRUSSIA, Pa., Feb. 27, 2024 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $216.4 million, or $3.16 per diluted share, during the fourth quarter of 2023, as compared to $174.8 million, or $2.43 per diluted share, during the fourth quarter of 2022. Net revenues increased by 7.4% to $3.704 billion during the fourth quarter of 2023, as compared to $3.447 billion during the fourth quarter of 2022.

As reflected on the Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our adjusted net income attributable to UHS during the fourth quarter of 2023 was $214.9 million, or $3.13 per diluted share, as compared to $217.1 million, or $3.02 per diluted share, during the fourth quarter of 2022. 

Included in our reported and adjusted net income attributable to UHS during the fourth quarter of 2023, were net incremental reimbursements (net of related provider taxes) of approximately $17.8 million, or $.20 per diluted share, recorded in connection with the recently approved Mississippi Hospital Access Program covering the period of July 1, 2023 through December 31, 2023.  Included in our reported and adjusted net income attributable to UHS during the fourth quarter of 2022, was an aggregate favorable after-tax impact of approximately $19.6 million, or $.27 per diluted share, recorded in connection with $26.0 million of commercial insurance proceeds received during the quarter in connection with the following: (i) $15.7 million related to a business interruption and property damage claim at one of our behavioral health care facilities, and; (ii) $10.3 million related to a previously incurred information technology incident.     

As reflected on the Supplemental Schedule, included in our reported results were unrealized after-tax gains of $1.5 million, or $.03 per diluted share ($1.9 million pre-tax), during the fourth quarter of 2023, and $1.8 million, or $.02 per diluted share ($2.3 million pre-tax) during the fourth quarter of 2022. These unrealized gains, which are included in "Other (income) expense, net", resulted from increases in the market value of certain equity securities.  In addition, as discussed below, included in our reported results during the fourth quarter of 2022 was an unfavorable after-tax impact of $44.1 million, or $.61 per diluted share, resulting from a provision for asset impairment ($57.6 million pre-tax which is included in other operating expenses) recorded to write-down the asset value of an acute care hospital, as discussed below.   

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI", NCI is net income attributable to noncontrolling interests), was $476.9 million during the fourth quarter of 2023, as compared to $419.0 million during the fourth quarter of 2022. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, and provision for asset impairment (during the fourth quarter of 2022), was $473.4 million during the fourth quarter of 2023, as compared to $471.7 million during the fourth quarter of 2022.

Consolidated Results of Operations, As Reported and As Adjusted  – Twelve-month periods ended December 31, 2023 and 2022:

Reported net income attributable to UHS was $717.8 million, or $10.23 per diluted share, during the full year 2023, as compared to $675.6 million, or $9.14 per diluted share, during 2022. Net revenues increased by 6.6% to $14.282 billion during the full year of 2023, as compared to $13.399 billion during 2022.

As reflected on the Supplemental Schedule, our adjusted net income attributable to UHS during the twelve-month period ended December 31, 2023, was $739.4 million, or $10.54 per diluted share, as compared to $730.2 million, or $9.88 per diluted share, during the twelve-month period ended December 31, 2022

As reflected on the Supplemental Schedule, included in our reported results were unrealized after-tax losses of $21.6 million, or $.31 per diluted share ($28.2 million pre-tax), during 2023, and $10.6 million, or $.14 per diluted share ($13.8 million pre-tax) during 2022. These unrealized losses, which are included in "Other (income) expense, net", resulted from decreases in the market value of certain equity securities.  In addition, included in our reported results during the full year of 2022 was an unfavorable after-tax impact of $44.1 million, or $.60 per diluted share, resulting from a provision for asset impairment, ($57.6 million pre-tax which is included in other operating expenses), as discussed below. 

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI"), was $1.714 billion during 2023, as compared to $1.594 billion during 2022. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, and provision for asset impairment (during 2022), was $1.742 billion during 2023, as compared to $1.662 billion during 2022.

Acute Care Services – Three and twelve-month periods ended December 31, 2023 and 2022:

During the fourth quarter of 2023, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased by 5.6% while adjusted patient days increased by 4.3%, as compared to the fourth quarter of 2022. At these facilities, during the fourth quarter of 2023, net revenue per adjusted admission increased by 3.7% while net revenue per adjusted patient day increased by 5.0%, as compared to the fourth quarter of 2022. Net revenues generated from our acute care services, on a same facility basis, increased by 9.7% during the fourth quarter of 2023, as compared to the fourth quarter of 2022.

 During the twelve-month period ended December 31, 2023, at our acute care hospitals on a same facility basis, adjusted admissions increased by 7.6% while adjusted patient days increased by 4.7%, as compared to the year ended December 31, 2022. At these facilities, during the full year of 2023, net revenue per adjusted admission decreased by 0.6% while net revenue per adjusted patient day increased by 2.2%, as compared to 2022. Net revenues generated from our acute care services, on a same facility basis, increased by 7.6% during the full year of 2023, as compared to 2022.

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2023 and 2022:

During the fourth quarter of 2023, at our behavioral health care facilities on a same facility basis, adjusted admissions increased by 1.4% while adjusted patient days increased by 1.1%, as compared to the fourth quarter of 2022. At these facilities, during the fourth quarter of 2023, net revenue per adjusted admission increased by 5.8% and net revenue per adjusted patient day increased by 6.1%, as compared to the fourth quarter of 2022. Net revenues generated from our behavioral health care services, on a same facility basis, increased by 7.2% during the fourth quarter of 2023, as compared to the fourth quarter of 2022.

During the twelve-month period ended December 31, 2023, at our behavioral health care facilities on a same facility basis, adjusted admissions increased by 3.2% while adjusted patient days increased by 2.1%, as compared to the comparable period of 2022. At these facilities, during the full year of 2023, net revenue per adjusted admission increased by 4.7% and net revenue per adjusted patient day increased by 5.9%, as compared to 2022. Net revenues generated from our behavioral health care services, on a same facility basis, increased by 8.0% during 2023, as compared to 2022.

Net Cash Provided by Operating Activities and Liquidity:

Net Cash Provided by Operating Activities:

During the twelve-month period ended December 31, 2023, our net cash provided by operating activities was $1.268 billion as compared to $996 million during the full year of 2022. Included in the $272 million net increase in our net cash provided by operating activities was a favorable change of $114 million in other working capital accounts due primarily to the timing of disbursements for accrued compensation and certain other accrued liabilities, as well as a favorable change of $76 million in accounts receivable.  

Liquidity:

As of December 31, 2023, we had $701 million of aggregate available borrowing capacity pursuant to our $1.2 billion revolving credit facility, net of outstanding borrowings and letters of credit.       

Stock Repurchase Program:

As of January 1, 2023, we had an aggregate remaining repurchase authorization of approximately $947 million pursuant to our stock repurchase program. Pursuant to the terms of our stock repurchase program, shares of our Class B Common Stock may be repurchased, from time to time as conditions allow, on the open market or in negotiated private transactions.

During the fourth quarter of 2023, we have repurchased 1.13 million shares at an aggregate cost of approximately $157.3 million (approximately $139 per share) pursuant to the program. During the full year of 2023, we have repurchased approximately 3.86 million shares at an aggregate cost of approximately $524.5 million (approximately $136 per share) pursuant to the program.

As of December 31, 2023, we had an aggregate available repurchase authorization of approximately $423 million.

2024 Operating Results Forecast:

Reflected below is our 2024 forecasted range for consolidated net revenues, earnings before interest, taxes, depreciation & amortization, and the impacts of other income/expense and net income attributable to noncontrolling interests ("Adjusted EBITDA net of NCI"), net income attributable to UHS per diluted share ("EPS-diluted") and capital expenditures. 

Our 2024 forecasted range of net income attributable to UHS, and EPS-diluted, exclude certain items as described below because we do not believe we can forecast those items with sufficient accuracy. Adjusted EBITDA net of NCI, is a non-GAAP financial measure and should not be considered a measure of financial performance under GAAP. We believe Adjusted EBITDA net of NCI is helpful to our investors as a measure of our operating performance. Please see the Supplemental Non-GAAP Disclosures - 2024 Operating Results Forecast schedule as included herein for additional information and a reconciliation of our 2024 forecasted range of net income attributable to UHS to our 2024 forecasted range of Adjusted EBITDA net of NCI. 

For the Year Ended

December 31, 2024

 
 

       Low

       High

Net revenues

$15.411 billion

$15.706 billion

Adjusted EBITDA net of NCI

$1.931 billion

$2.019 billion 

EPS-diluted

$13.00 per share

$14.00 per share

Capital expenditures

$850 million

$1.000 billion

Our 2024 operating results forecast contains a number of assumptions including, but not limited to, the following:

  • The 2024 forecasted amounts exclude the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as pre-tax unrealized gains/losses resulting from changes in the market value of shares of certain equity securities, and other potential material items including, but not limited to, reserves for various matters including settlements, legal judgments and lawsuits, potential impacts of non-ordinary course acquisitions, divestitures, joint ventures or other strategic transactions, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of goodwill, long-lived and intangible assets, other amounts that may be reflected in the current financial statements that relate to prior periods, and the impact of share repurchases that differ from our forecasted assumptions. 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.
  • Our net revenues are estimated to be approximately $15.411 billion to $15.706 billion representing an increase of 7.9% to 10.0% over our 2023 net revenues of $14.282 billion.
  • Our Adjusted EBITDA net of NCI is estimated to be approximately $1.931 billion to $2.019 billion representing an increase of 10.9% to 15.9% over our 2023 Adjusted EBITDA net of NCI of $1.742 billion.
  • Our EPS-diluted range is estimated to be $13.00 per diluted share to $14.00 per diluted share, representing an increase of 23.3% to 32.8% over our adjusted net income attributable to UHS of $10.54 per diluted share for the year ended December 31, 2023, as calculated on the attached Supplemental Schedule.
  • Our 2024 operating results forecast includes approximately $158 million of net reimbursements (net of related provider taxes) expected to be earned pursuant to the previously disclosed Nevada State Directed Payment program ("SDP").
    • The Medicaid managed care component of the Nevada SDP, our annual net reimbursements from which are expected to approximate $140 million during 2024, was approved by the Centers for Medicare and Medicaid Services ("CMS") in late December, 2023, with an effective date of January 1, 2024. This component of the Nevada SDP requires annual approval by CMS and is subject to reconciliation by Nevada's Division of Health Care Financing and Policy based on actual Medicaid managed care utilization during 2024. There can be no assurance that the Medicaid managed care component of the Nevada SDP will continue for any period after December 31, 2024, or that it will not be modified.
    • The Medicaid fee for service upper payment limit component of the Nevada SDP, our annual net reimbursements from which are expected to approximate $18 million during 2024, was approved by CMS during the fourth quarter of 2023, with an effective date of July 1, 2023.

Provision for Asset Impairment (recorded during the fourth quarter of 2022):

Our financial statements for the three and twelve-month periods ended December 31, 2022, included a pre-tax provision for asset impairment of $57.6 million, which is included in other operating expenses on the accompanying consolidated statements of income. In March of 2023, we discontinued all inpatient operations at Desert Springs Hospital Medical Center, an acute care facility located in Las Vegas, Nevada. Since that time, we have continued providing emergency department services within a portion of the existing facility while we construct a new free-standing emergency department on the hospital's campus. The provision for asset impairment recorded during the fourth quarter of 2022 reduced the asset values of the facility's real estate and equipment to their estimated fair values.      

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 28, 2024. A live webcast of the call will be available on our website at www.uhs.com. To participate via telephone, please register in advance at this link. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the call will be available for one full year following the live call.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:

One of the nation's largest and most respected providers of hospital and healthcare services, Universal Health Services, Inc. has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues during 2023 were $14.282 billion. UHS ranked #311 on the Fortune 500; and #434 on Forbes' list of America's Largest Public Companies. UHS was again recognized as one of the World's Most Admired Companies by Fortune.  

Our operating philosophy is as effective today as it was upon the Company's founding in 1979, enabling us to provide compassionate care to our patients and their loved ones.  Our strategy includes building or acquiring high quality hospitals in rapidly growing markets, investing in the people and equipment needed to allow each facility to thrive, and becoming the leading healthcare provider in each community we serve.

Headquartered in King of Prussia, PA, UHS has approximately 96,700 employees and, through its subsidiaries, operates 27 inpatient acute care hospitals, 333 inpatient behavioral health facilities, 48 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT).  For additional information visit www.uhs.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 Item 7-Forward-Looking Statements and Risk Factors, in our Form 10-K for the year ended December 31, 2023), may cause the results to differ materially from those anticipated in the forward-looking statements.  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. 

Many of the factors that could affect our future results are beyond our control or ability to predict, including, but not limited to:   

  • A significant portion of our revenues are derived from federal and state government programs including the Medicare and Medicaid programs. Payments from these programs are subject to statutory and regulatory changes, administrative rulings, interpretations and determinations, requirements for utilization review, and federal and state funding restrictions. Changes to these programs, if adopted, could materially affect program payments which could materially impact our results of operations.
  • The nationwide shortage of nurses and other clinical staff and support personnel experienced by healthcare providers in the past has been a significant operating issue facing us and other healthcare providers. In the past, the staffing shortage has, at times, required us to hire expensive temporary personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel. At certain facilities, particularly within our behavioral health care segment, there have been occasions when we were unable to fill all vacant positions and, consequently, we were required to limit patient volumes. The staffing shortage has required us to enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel or required us to hire expensive temporary personnel. Many of these factors, which had a material unfavorable impact on our results of operations during 2022, moderated to a certain degree during 2023.
  • The increase in interest rates has substantially increased our borrowings costs and reduced our ability to access the capital markets on favorable terms. Additional increases in interest rates could have a significant unfavorable impact on our future results of operations and the resulting effect on the capital markets could adversely affect our ability to carry out our strategy.

We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA net of NCI and Adjusted EBITDA net of NCI, which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect of material items impacting our net income attributable to UHS, such as, changes in the market value of shares of certain equity securities and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of goodwill, long-lived and intangible assets, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, potential impacts of non-ordinary acquisitions, divestitures, joint ventures or other strategic transactions, 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 attributable to UHS, as determined in accordance with GAAP, and as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2023. 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,

 

2023

 

2022

 

2023

 

2022

               

Net revenues

$3,703,546

 

$3,446,980

 

$14,281,976

 

$13,399,370

               

Operating charges:

             

   Salaries, wages and benefits

1,799,008

 

1,701,083

 

7,107,484

 

6,762,256

   Other operating expenses

998,732

 

919,673

 

3,757,216

 

3,445,733

   Supplies expense

393,878

 

381,936

 

1,532,828

 

1,474,339

   Depreciation and amortization

145,481

 

148,353

 

568,041

 

581,861

   Lease and rental expense

35,251

 

34,551

 

141,026

 

131,626

 

3,372,350

 

3,185,596

 

13,106,595

 

12,395,815

               

Income from operations

331,196

 

261,384

 

1,175,381

 

1,003,555

               

Interest expense, net

53,589

 

43,887

 

206,674

 

126,889

Other (income) expense, net

(3,516)

 

(4,838)

 

28,281

 

10,406

               

Income before income taxes

281,123

 

222,335

 

940,426

 

866,260

               

Provision for income taxes

61,501

 

51,966

 

221,119

 

209,278

               

Net income

219,622

 

170,369

 

719,307

 

656,982

               

Less:  Net income (loss) attributable to

             

noncontrolling interests ("NCI")

3,244

 

(4,451)

 

1,512

 

(18,627)

               

Net income attributable to UHS

$216,378

 

$174,820

 

$717,795

 

$675,609

               
               
               
               

Basic earnings per share attributable to UHS (a)

$3.19

 

$2.45

 

$10.35

 

$9.23

               

Diluted earnings per share attributable to UHS (a)

$3.16

 

$2.43

 

$10.23

 

$9.14

 

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

               
 

Three months

 

Twelve months

(a) Earnings per share calculation:

ended December 31,

 

ended December 31,

 

2023

 

2022

 

2023

 

2022

Basic and diluted:

             

Net income attributable to UHS

$216,378

 

$174,820

 

$717,795

 

$675,609

Less: Net income attributable to unvested restricted share grants

(66)

 

(156)

 

(308)

 

(748)

Net income attributable to UHS - basic and diluted

$216,312

 

$174,664

 

$717,487

 

$674,861

               

Weighted average number of common shares - basic

67,809

 

71,165

 

69,321

 

73,118

               

Basic earnings per share attributable to UHS:

$3.19

 

$2.45

 

$10.35

 

$9.23

               

Weighted average number of common shares

67,809

 

71,165

 

69,321

 

73,118

Add: Other share equivalents

741

 

627

 

804

 

714

Weighted average number of common shares and equiv. - diluted

68,550

 

71,792

 

70,125

 

73,832

               

Diluted earnings per share attributable to UHS:

$3.16

 

$2.43

 

$10.23

 

$9.14

 

Universal Health Services, Inc.

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

For the Three Months ended December 31, 2023 and 2022

(in thousands, except per share amounts)

(unaudited)

               
               
               

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

               
 

Three months ended

 

% Net

 

Three months ended

 

% Net

 

December 31, 2023

 

revenues

 

December 31, 2022

 

revenues

               

Net income attributable to UHS

$216,378

     

$174,820

   

   Depreciation and amortization

145,481

     

148,353

   

   Interest expense, net

53,589

     

43,887

   

   Provision for income taxes

61,501

     

51,966

   

EBITDA net of NCI

$476,949

 

12.9 %

 

$419,026

 

12.2 %

               

Other (income) expense, net

(3,516)

     

(4,838)

   

Provision for asset impairment

-

     

57,550

   

Adjusted EBITDA net of NCI

$473,433

 

12.8 %

 

$471,738

 

13.7 %

               

Net revenues

$3,703,546

     

$3,446,980

   
               
               
               
               
               

Calculation of Adjusted Net Income Attributable to UHS

               
 

Three months ended

 

Three months ended

 

December 31, 2023

 

December 31, 2022

     

Per

     

Per

 

Amount

 

Diluted Share

 

Amount

 

Diluted Share

               

Net income attributable to UHS

$216,378

 

$3.16

 

$174,820

 

$2.43

Plus/minus after-tax adjustments:

             

Unrealized gain on equity securities

(1,470)

 

(0.03)

 

(1,778)

 

(0.02)

Provision for asset impairment

-

 

-

 

44,055

 

0.61

Subtotal adjustments

(1,470)

 

(0.03)

 

42,277

 

0.59

Adjusted net income attributable to UHS

$214,908

 

$3.13

 

$217,097

 

$3.02

 

Universal Health Services, Inc.

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

For the Twelve Months ended December 31, 2023 and 2022

(in thousands, except per share amounts)

(unaudited)

               
               
               

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

               
 

Twelve months ended

 

% Net

 

Twelve months ended

 

% Net

 

December 31, 2023

 

revenues

 

December 31, 2022

 

revenues

               

Net income attributable to UHS

$717,795

     

$675,609

   

   Depreciation and amortization

568,041

     

581,861

   

   Interest expense, net

206,674

     

126,889

   

   Provision for income taxes

221,119

     

209,278

   

EBITDA net of NCI

$1,713,629

 

12.0 %

 

$1,593,637

 

11.9 %

               

Other (income) expense, net

28,281

     

10,406

   

Provision for asset impairment

-

     

57,550

   

Adjusted EBITDA net of NCI

$1,741,910

 

12.2 %

 

$1,661,593

 

12.4 %

               

Net revenues

$14,281,976

     

$13,399,370

   
               
               
               
               
               

Calculation of Adjusted Net Income Attributable to UHS

               
 

Twelve months ended

 

Twelve months ended

 

December 31, 2023

 

December 31, 2022

     

Per

     

Per

 

Amount

 

Diluted Share

 

Amount

 

Diluted Share

               

Net income attributable to UHS

$717,795

 

$10.23

 

$675,609

 

$9.14

Plus/minus after-tax adjustments:

             

Unrealized loss on equity securities

21,570

 

0.31

 

10,580

 

0.14

Provision for asset impairment

-

 

-

 

44,055

 

0.60

Subtotal adjustments

21,570

 

0.31

 

54,635

 

0.74

Adjusted net income attributable to UHS

$739,365

 

$10.54

 

$730,244

 

$9.88

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

             
     

December 31,

   

December 31,

     

2023

   

2022

Assets

           

Current assets:

           

    Cash and cash equivalents

 

$

119,439

 

$

102,818

    Accounts receivable, net

   

2,238,265

   

2,017,722

    Supplies

   

216,988

   

218,517

    Other current assets

   

236,658

   

198,283

          Total current assets

   

2,811,350

   

2,537,340

             

Property and equipment

   

11,777,047

   

11,085,852

Less: accumulated depreciation

   

(5,652,518)

   

(5,167,394)

     

6,124,529

   

5,918,458

             

Other assets:

           

    Goodwill

   

3,932,407

   

3,909,456

    Deferred income taxes

   

85,626

   

68,397

    Right of use assets-operating leases

   

433,962

   

454,650

    Deferred charges

   

6,974

   

6,264

    Other

   

572,754

   

599,623

Total Assets

 

$

13,967,602

 

$

13,494,188

             

Liabilities and Stockholders' Equity

           

Current liabilities:

           

    Current maturities of long-term debt

 

$

126,686

 

$

81,447

    Accounts payable and other liabilities

   

1,813,015

   

1,760,588

    Operating lease liabilities

   

71,600

   

67,776

    Federal and state taxes

   

2,046

   

4,608

          Total current liabilities

   

2,013,347

   

1,914,419

             

Other noncurrent liabilities

   

584,007

   

487,669

Operating lease liabilities noncurrent

   

382,559

   

395,522

Long-term debt

   

4,785,783

   

4,726,533

             

Redeemable noncontrolling interest

   

5,191

   

4,695

             

UHS common stockholders' equity

   

6,149,001

   

5,920,582

Noncontrolling interest

   

47,714

   

44,768

          Total equity

   

6,196,715

   

5,965,350

             

Total Liabilities and Stockholders' Equity

 

$

13,967,602

 

$

13,494,188

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

Twelve months

 

ended December 31,

 

2023

 

2022

       

Cash Flows from Operating Activities:

     

  Net income

$719,307

 

$656,982

  Adjustments to reconcile net income to net 

     

cash provided by operating activities:

     

Depreciation & amortization

568,041

 

581,861

(Gain) loss on sale of assets and businesses

(6,250)

 

584

Stock-based compensation expense

87,720

 

85,378

Provision for asset impairment

0

 

57,550

  Changes in assets & liabilities, net of effects from

     

acquisitions and dispositions:

     

   Accounts receivable

(182,444)

 

(258,338)

   Accrued interest

1,193

 

1,835

   Accrued and deferred income taxes 

(43,450)

 

(29,510)

   Other working capital accounts 

(32,321)

 

(146,692)

   Medicare accelerated payments and deferred CARES Act and other grants

2,978

 

2,391

   Other assets and deferred charges

48,517

 

19,918

   Other 

39,133

 

(8,676)

   Accrued insurance expense, net of commercial premiums paid

183,462

 

174,723

   Payments made in settlement of self-insurance claims

(118,089)

 

(141,983)

          Net cash provided by operating activities

1,267,797

 

996,023

       

Cash Flows from Investing Activities:

     

   Property and equipment additions

(743,055)

 

(734,001)

   Proceeds received from sales of assets and businesses

24,187

 

12,001

   Acquisition of businesses and property

(3,728)

 

(20,309)

   (Outflows) inflows from foreign exchange contracts that hedge our net U.K. investment

(40,695)

 

94,913

   Decrease in capital reserves of commercial insurance subsidiary 

16

 

100

          Net cash used in investing activities

(763,275)

 

(647,296)

       

Cash Flows from Financing Activities:

     

   Repayments of long-term debt

(85,480)

 

(89,367)

   Additional borrowings

185,100

 

705,321

   Financing costs

(308)

 

(3,164)

   Repurchase of common shares

(547,363)

 

(832,918)

   Dividends paid

(55,480)

 

(58,449)

   Issuance of common stock

13,654

 

14,068

   Profit distributions to noncontrolling interests

(6,830)

 

(5,391)

   (Purchase) sale of ownership interests by (from) minority members

2,762

 

(48,500)

          Net cash used in financing activities

(493,945)

 

(318,400)

       

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

3,056

 

(8,424)

Increase in cash, cash equivalents and restricted cash

13,633

 

21,903

Cash, cash equivalents and restricted cash, beginning of period

200,837

 

178,934

Cash, cash equivalents and restricted cash, end of period

$214,470

 

$200,837

       

Supplemental Disclosures of Cash Flow Information:

     

  Interest paid

$200,446

 

$120,136

       

  Income taxes paid, net of refunds

$257,896

 

$250,759

       

  Noncash purchases of property and equipment

$66,899

 

$72,064

 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)

                   
                   
             

 % Change 

 

 % Change 

             

3 Months ended

 

12 Months ended

Same Facility:

           

12/31/2023

 

12/31/2023

                   

Acute Care Hospitals

                 

Revenues

           

9.7 %

 

7.6 %

Adjusted Admissions

           

5.6 %

 

7.6 %

Adjusted Patient Days

           

4.3 %

 

4.7 %

Revenue Per Adjusted Admission

           

3.7 %

 

-0.6 %

Revenue Per Adjusted Patient Day

           

5.0 %

 

2.2 %

                   

Behavioral Health Hospitals

                 

Revenues

           

7.2 %

 

8.0 %

Adjusted Admissions

           

1.4 %

 

3.2 %

Adjusted Patient Days

           

1.1 %

 

2.1 %

Revenue Per Adjusted Admission

           

5.8 %

 

4.7 %

Revenue Per Adjusted Patient Day

           

6.1 %

 

5.9 %

                   

UHS Consolidated

   

Fourth Quarter Ended

 

Twelve Months Ended

     

12/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

                   

Revenues

   

$3,703,546

 

$3,446,980

 

$14,281,976

 

$13,399,370

EBITDA net of NCI

   

$476,949

 

$419,026

 

$1,713,629

 

$1,593,637

EBITDA Margin net of NCI

   

12.9 %

 

12.2 %

 

12.0 %

 

11.9 %

Adjusted EBITDA net of NCI

   

$473,433

 

$471,738

 

$1,741,910

 

$1,661,593

Adjusted EBITDA Margin net of NCI

 

12.8 %

 

13.7 %

 

12.2 %

 

12.4 %

                   

Cash Flow From Operations

   

$452,431

 

$297,304

 

$1,267,797

 

$996,023

Capital Expenditures  

   

$206,390

 

$164,446

 

$743,055

 

$734,001

Days Sales Outstanding

           

57

 

55

                   
                   

Debt 

           

$4,912,469

 

$4,807,980

UHS' Shareholders Equity

           

$6,149,001

 

$5,920,582

Debt / Total Capitalization

           

44.4 %

 

44.8 %

Debt / EBITDA net of NCI (1)

           

2.87

 

3.02

Debt / Adjusted EBITDA net of NCI (1)

         

2.82

 

2.89

Debt / Cash From Operations (1)

           

3.87

 

4.83

                   

(1) Latest 4 quarters.

                 

 

Universal Health Services, Inc.

Acute Care Hospital Services

For the Three and Twelve Months ended

December 31, 2023 and 2022

(in thousands)

                                 
                                 

Same Facility Basis - Acute Care Hospital Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

   

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

Net revenues

 

$2,032,535

 

100.0 %

 

$1,852,000

 

100.0 %

 

$7,840,740

 

100.0 %

 

$7,284,868

 

100.0 %

Operating charges:

                               

Salaries, wages and benefits

 

869,942

 

42.8 %

 

812,340

 

43.9 %

 

3,363,213

 

42.9 %

 

3,225,039

 

44.3 %

Other operating expenses

 

559,282

 

27.5 %

 

481,164

 

26.0 %

 

2,144,102

 

27.3 %

 

1,863,414

 

25.6 %

Supplies expense

 

338,790

 

16.7 %

 

321,747

 

17.4 %

 

1,303,018

 

16.6 %

 

1,226,294

 

16.8 %

Depreciation and amortization

 

93,287

 

4.6 %

 

94,919

 

5.1 %

 

358,308

 

4.6 %

 

369,493

 

5.1 %

Lease and rental expense

 

23,930

 

1.2 %

 

23,159

 

1.3 %

 

95,565

 

1.2 %

 

85,915

 

1.2 %

Subtotal-operating expenses

 

1,885,231

 

92.8 %

 

1,733,329

 

93.6 %

 

7,264,206

 

92.6 %

 

6,770,155

 

92.9 %

Income from operations

 

147,304

 

7.2 %

 

118,671

 

6.4 %

 

576,534

 

7.4 %

 

514,713

 

7.1 %

Interest expense, net

 

(643)

 

(0.0) %

 

(241)

 

(0.0) %

 

(2,501)

 

(0.0) %

 

1,109

 

0.0 %

Other (income) expense, net

 

931

 

0.0 %

 

687

 

0.0 %

 

6,099

 

0.1 %

 

1,493

 

0.0 %

Income before income taxes

 

$147,016

 

7.2 %

 

$118,225

 

6.4 %

 

$572,936

 

7.3 %

 

$512,111

 

7.0 %

                                 
                                 
                                 

All Acute Care Hospital Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

Net revenues

 

$2,087,503

 

100.0 %

 

$1,939,239

 

100.0 %

 

$8,081,402

 

100.0 %

 

$7,646,749

 

100.0 %

Operating charges:

                               

Salaries, wages and benefits

 

871,182

 

41.7 %

 

834,647

 

43.0 %

 

3,406,060

 

42.1 %

 

3,332,535

 

43.6 %

Other operating expenses

 

615,810

 

29.5 %

 

596,152

 

30.7 %

 

2,347,560

 

29.0 %

 

2,146,196

 

28.1 %

Supplies expense

 

338,732

 

16.2 %

 

329,129

 

17.0 %

 

1,317,917

 

16.3 %

 

1,264,688

 

16.5 %

Depreciation and amortization

 

93,479

 

4.5 %

 

97,557

 

5.0 %

 

367,644

 

4.5 %

 

383,115

 

5.0 %

Lease and rental expense

 

23,960

 

1.1 %

 

23,330

 

1.2 %

 

96,589

 

1.2 %

 

86,654

 

1.1 %

Subtotal-operating expenses

 

1,943,163

 

93.1 %

 

1,880,815

 

97.0 %

 

7,535,770

 

93.2 %

 

7,213,188

 

94.3 %

Income from operations

 

144,340

 

6.9 %

 

58,424

 

3.0 %

 

545,632

 

6.8 %

 

433,561

 

5.7 %

Interest expense, net

 

(643)

 

(0.0) %

 

(241)

 

(0.0) %

 

(2,501)

 

(0.0) %

 

1,109

 

0.0 %

Other (income) expense, net

 

867

 

0.0 %

 

1,982

 

0.1 %

 

7,788

 

0.1 %

 

2,788

 

0.0 %

Income before income taxes

 

$144,116

 

6.9 %

 

$56,683

 

2.9 %

 

$540,345

 

6.7 %

 

$429,664

 

5.6 %

 

We believe that providing our results on a "Same Facility" basis (which is a non-GAAP measure), which includes the operating results for facilities and businesses operated in both the current year and prior year periods, is helpful to our investors as a measure of our operating performance. Our Same Facility results also neutralize (if applicable), the effect of material items that are nonrecurring or non-operational in nature including items such as, but not limited to, reserves for various matters, settlements, legal judgments and lawsuits, cost related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of goodwill, long-lived and intangible assets and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. Our Same Facility basis results exclude from net revenues and other operating expenses, provider tax assessments incurred in each period. However, these provider tax assessments are included in net revenues and other operating expenses as reflected in the table under All Acute Care Hospital Services. The provider tax assessments had no impact on the income before income taxes as reflected on the above tables since the amounts offset between net revenues and other operating expenses. To obtain a complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income as determined in accordance with GAAP and as presented herein and the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2023.

                                     

The All Acute Care Hospital Services table summarizes the results of operations for all our acute care operations during the periods presented. These amounts include: (i) our acute care results on a same facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes; (ii) the impact of an asset impairment recorded in the three and twelve months ended December 31, 2022, and; (iv) certain other amounts including the results of facilities acquired or opened during the last twelve months.

 

Universal Health Services, Inc.

Behavioral Health Care Services

For the Three and Twelve Months ended

December 31, 2023 and 2022

(in thousands)

                                 
                                 

Same Facility - Behavioral Health Care Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

   

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

Net revenues

 

$1,558,805

 

100.0 %

 

$1,453,766

 

100.0 %

 

$6,048,883

 

100.0 %

 

$5,598,764

 

100.0 %

Operating charges:

                               

Salaries, wages and benefits

 

852,069

 

54.7 %

 

794,776

 

54.7 %

 

3,343,222

 

55.3 %

 

3,088,108

 

55.2 %

Other operating expenses

 

296,915

 

19.0 %

 

262,606

 

18.1 %

 

1,163,365

 

19.2 %

 

1,078,918

 

19.3 %

Supplies expense

 

55,674

 

3.6 %

 

53,446

 

3.7 %

 

216,879

 

3.6 %

 

210,903

 

3.8 %

Depreciation and amortization

 

48,066

 

3.1 %

 

47,435

 

3.3 %

 

187,105

 

3.1 %

 

184,684

 

3.3 %

Lease and rental expense

 

11,143

 

0.7 %

 

10,689

 

0.7 %

 

43,785

 

0.7 %

 

41,951

 

0.7 %

Subtotal-operating expenses

 

1,263,867

 

81.1 %

 

1,168,952

 

80.4 %

 

4,954,356

 

81.9 %

 

4,604,564

 

82.2 %

Income from operations

 

294,938

 

18.9 %

 

284,814

 

19.6 %

 

1,094,527

 

18.1 %

 

994,200

 

17.8 %

Interest expense, net

 

1,108

 

0.1 %

 

1,212

 

0.1 %

 

4,434

 

0.1 %

 

5,169

 

0.1 %

Other (income) expense, net

 

(1,132)

 

(0.1) %

 

(4,921)

 

(0.3) %

 

(3,426)

 

(0.1) %

 

(6,343)

 

(0.1) %

Income before income taxes

 

$294,962

 

18.9 %

 

$288,523

 

19.8 %

 

$1,093,519

 

18.1 %

 

$995,374

 

17.8 %

                                 
                                 
                                 

All Behavioral Health Care Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

Net revenues

 

$1,615,543

 

100.0 %

 

$1,494,543

 

100.0 %

 

$6,190,921

 

100.0 %

 

$5,729,758

 

100.0 %

Operating charges:

                               

Salaries, wages and benefits

 

854,670

 

52.9 %

 

796,455

 

53.3 %

 

3,353,008

 

54.2 %

 

3,107,216

 

54.2 %

Other operating expenses

 

353,353

 

21.9 %

 

302,908

 

20.3 %

 

1,303,311

 

21.1 %

 

1,201,563

 

21.0 %

Supplies expense

 

55,713

 

3.4 %

 

53,471

 

3.6 %

 

217,310

 

3.5 %

 

211,786

 

3.7 %

Depreciation and amortization

 

49,180

 

3.0 %

 

47,752

 

3.2 %