Universal Health Services, Inc. Reports 2018 Fourth Quarter And Full Year Financial Results And 2019 Full Year Earnings Guidance

02/27/2019
Microphone Webcast - Live
Q4 2018 Universal Health Services Earnings Conference Call
2/28/19 at 9:00 a.m. ET
 
Consolidated Results of Operations, As Reported and As Adjusted - Three-month periods ended December 31, 2018 and 2017:

KING OF PRUSSIA, Pa., Feb. 27, 2019 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $158.1 million, or $1.70 per diluted share, during the fourth quarter of 2018 as compared to $219.6 million, or $2.31 per diluted share, during the comparable quarter of 2017.  Net revenues increased 4.2% to $2.754 billion during the fourth quarter of 2018 as compared to $2.643 billion during the fourth quarter of 2017.

For the three-month period ended December 31, 2018, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), was $220.1 million, or $2.37 per diluted share, as compared to $189.6 million, or $2.00 per diluted share, during the fourth quarter of 2017. 

Included in our reported and our adjusted net income attributable to UHS during the fourth quarter of 2018, is a pre-tax unrealized loss of $12.5 million, or $.10 per diluted share (included in "Other (income) expense, net"), resulting from a decrease in the market value of shares of certain marketable securities held for investment and classified as available for sale.  

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2018, is a net aggregate unfavorable after-tax impact of $62.0 million, or $.67 per diluted share, consisting primarily of the following: (i) an unfavorable after-tax impact of $24.5 million, or $.26 per diluted share, resulting from a $31.9 million pre-tax increase in the reserve established in connection with the discussions with the Department of Justice ("DOJ Reserve"), as discussed below, and; (ii) an unfavorable after-tax impact of $37.7 million, or $.41 per diluted share, resulting from a $49.3 million provision for intangible asset impairment, as discussed below.  

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2017, is a net aggregate favorable after-tax impact of $30.0 million, or $.31 per diluted share, consisting of: (i) a favorable after-tax impact of $30.0 million, or $.32 per diluted share, resulting from a reduction in our net deferred income tax liability recorded in connection with the Tax Cuts and Jobs Act of 2017 (the "TCJA-17") which reduced the U.S. federal corporate tax rate to 21% from 35%, effective January 1, 2018; (ii) a favorable after-tax impact of $13.5 million, or $.14 per diluted share, resulting from our January 1, 2017 adoption of ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), as discussed below; (iii) an unfavorable after-tax impact of $11.3 million, or $.12 per diluted share, due to the one-time repatriation tax incurred pursuant to the TCJA-17 (incurred in connection with our behavioral health care facilities located in the U.K. and Puerto Rico), and; (iv) an unfavorable after-tax impact of $2.3 million, or $.03 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals.

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 $359.9 million during the fourth quarter of 2018 as compared to $447.0 million during the fourth quarter of 2017.  Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of the above-mentioned $31.9 million pre-tax increase in the DOJ Reserve, the $49.3 million provision for intangible asset impairment and $12.5 million of other expense, net, was $453.6 million during the fourth quarter of 2018 as compared to $447.0 million during the fourth quarter of 2017.

Consolidated Results of Operations, As Reported and As Adjusted  – Twelve-month periods ended December 31, 2018 and 2017:
Reported net income attributable to UHS was $779.7 million, or $8.31 per diluted share, during the twelve-month period ended December 31, 2018 as compared to $752.3 million, or $7.81 per diluted share, during the full year of 2017.  Net revenues increased 3.5% to $10.772 billion during 2018 as compared to $10.410 billion during 2017.

For the twelve-month period ended December 31, 2018, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $894.4 million, or $9.53 per diluted share, as compared to $725.5 million, or $7.53 per diluted share, during the full year of 2017. 

Included in our reported and our adjusted net income attributable to UHS during the full year of 2018, is a pre-tax unrealized gain of $6.0 million, or $.05 per diluted share (included in "Other (income) expense, net"), resulting from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale.  

As reflected on the Supplemental Schedule, included in our reported results during the twelve-month period ended December 31, 2018, is a net aggregate unfavorable after-tax impact of $114.6 million, or $1.22 per diluted share, consisting of: (i) an unfavorable after-tax impact of $78.2 million, or $.83 per diluted share, resulting from a $102.3 million pre-tax increase in the DOJ Reserve, as discussed below; (ii) an unfavorable after-tax impact of $37.7 million, or $.40 per diluted share, resulting from a $49.3 million provision for intangible asset impairment, as discussed below, partially offset by; (iii) a favorable after-tax impact of $1.2 million, or $.01 per diluted share, resulting from our adoption of ASU 2016-09.  

As reflected on the Supplemental Schedule, included in our reported results during the full year of 2017, is a net aggregate favorable after-tax impact of $26.8 million, or $.28 per diluted share, consisting of: (i) a favorable after-tax impact of $30.0 million, or $.32 per diluted share, resulting from a reduction in our net deferred income tax liability resulting from lower federal income tax rates beginning January 1, 2018 pursuant to the TCJA-17; (ii) a favorable after-tax impact of $22.1 million, or $.23 per diluted share, resulting from our January 1, 2017 adoption of ASU 2016-09, as discussed below; (iii) an unfavorable after-tax impact of $11.3 million, or $.12 per diluted share, due to the one-time repatriation tax incurred pursuant to the TCJA of 2017, and; (iv) an unfavorable after-tax impact of $14.0 million, or $.15 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI"), was $1.624 billion during the full year of 2018 as compared to $1.709 billion during the 2017 full year. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of the $102.3 million pre-tax increase in the DOJ Reserve, the $49.3 million provision for intangible asset impairment and $14.2 million of other income, net, was $1.762 billion during the twelve-month period ended December 31, 2018 as compared to $1.709 billion during the twelve-month period of 2017.

Acute Care Services – Three and twelve-month periods ended December 31, 2018 and 2017:
During the fourth quarter of 2018, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 2.2% and adjusted patient days increased 4.8%, as compared to the fourth quarter of 2017. At these facilities, net revenue per adjusted admission increased 4.2% while net revenue per adjusted patient day increased 1.6% during the fourth quarter of 2018 as compared to the comparable quarter of 2017. Net revenues from our acute care services on a same facility basis increased 4.7% during the fourth quarter of 2018 as compared to the comparable quarter of the prior year.

During the twelve-month period ended December 31, 2018, at our acute care hospitals on a same facility basis, adjusted admissions increased 2.1% and adjusted patient days increased 4.8%, as compared to the full year of 2017. At these facilities, net revenue per adjusted admission increased 4.1% while net revenue per adjusted patient day increased 1.4% during the full year of 2018 as compared to the 2017 full year. Net revenues from our acute care services on a same facility basis increased 4.6% during 2018 as compared to the prior year.

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2018 and 2017:
During the fourth quarter of 2018, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 4.5% while adjusted patient days increased 1.2% as compared to the fourth quarter of 2017. At these facilities, net revenue per adjusted admission decreased 2.1% while net revenue per adjusted patient day increased 1.1% during the fourth quarter of 2018 as compared to the comparable quarter in 2017. On a same facility basis, our behavioral health care services' net revenues increased 2.0% during the fourth quarter of 2018 as compared to the fourth quarter of 2017.   

During the twelve-month period ended December 31, 2018, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.0% while adjusted patient days increased 0.5% as compared to the full year of 2017. At these facilities, net revenue per adjusted admission was unchanged while net revenue per adjusted patient day increased 2.5% during the full year of 2018 as compared to 2017. On a same facility basis, our behavioral health care services' net revenues increased 2.6% during the twelve-month period of 2018 as compared to the 2017 full year.   

Net Cash Provided by Operating Activities and Share Repurchase Program:
For the twelve months ended December 31, 2018, our net cash provided by operating activities was $1.341 billion as compared to $1.183 billion generated during the full year of 2017. The net increase of $158 million was due to: (i) a $130 million favorable change in cash flows from foreign currency forward exchange contracts related to our investments in the U.K; (ii) a favorable change of $91 million due to an increase in net income plus/minus depreciation and amortization expense, stock-based compensation, a net gain on sales of assets and businesses, costs related to extinguishment of debt and provision for intangible asset impairment; (iii) an unfavorable change of $48 million in accrued and deferred income taxes; (iv) a favorable change of $40 million in other working capital accounts resulting primarily from changes in accrued expenses due to timing of disbursements; (v) an unfavorable change of $18 million in accounts receivable, and; (vi) $37 million of other combined net unfavorable changes.

In December of 2018, our Board of Directors authorized a $500 million increase to our stock repurchase program, which increased the aggregate authorization to $1.7 billion from the previous $1.2 billion authorization approved during 2017, 2016 and 2014. Pursuant to this program, we may purchase shares of our Class B Common Stock, from time to time as conditions allow, on the open market or in negotiated private transactions. There is no expiration date for our stock repurchase programs.

In conjunction with our stock repurchase program, during the fourth quarter of 2018, we have repurchased approximately 1.22 million shares at an aggregate cost of $149.3 million (approximately $122 per share), $16.6 million of which was paid in early January, 2019. During the twelve-month period of 2018, we have repurchased approximately 3.32 million shares at an aggregate cost of $401.3 million (approximately $121 per share), $16.6 million of which was paid in early January, 2019. Since inception of the program in 2014 through December 31, 2018, we have repurchased approximately 10.67 million shares at an aggregate cost of $1.24 billion (approximately $116 per share). 

2019 Operating Results Forecast:
Reflected below is our 2019 guidance range for consolidated net revenues, earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI"), adjusted earnings per diluted share ("Adjusted EPS-diluted") and capital expenditures.  Adjusted EPS-diluted and EBITDA net of NCI, are non-GAAP financial measures and should be examined in connection with net income determined in accordance with GAAP as presented in the consolidated financial statements and notes thereto in this report or in our filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2018. Please see the Supplemental Non-GAAP Disclosures - 2019 Operating Results Forecast schedule as included herein for additional information and a reconciliation to the financial forecasts as computed in accordance with GAAP. 

 

For the Year Ended

 

December 31, 2019

 

       Low

       High

Net revenues

$11.213 billion

$11.361 billion

EBITDA net of NCI

$1.826 billion

$1.909 billion 

Adjusted EPS-diluted

$9.70 per share

$10.40 per share

Capital expenditures

$675 million

$725 million

Our 2019 guidance contains a number of assumptions including, but not limited to, the following:

  • The 2019 forecasted amounts exclude the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as changes in the reserve (including the income tax deductibility assumptions) established in connection with the discussions with the Department of Justice, pre-tax unrealized gains/losses resulting from increases/decreases in the market value of shares of certain marketable securities held for investment and classified as available for sale, our adoption of ASU 2016-09, 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, impairment of long-lived and intangible assets, and other amounts that may be reflected in the current financial statements that related to prior periods and the impact of share repurchases that differ from included 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 $11.213 billion to $11.361 billion representing an increase of approximately 4.1% to 5.5% over our 2018 net revenues of approximately $10.772 billion.
     
  • The Adjusted EPS-diluted guidance range represents an increase of approximately 2% to 9% over the adjusted net income attributable to UHS of $9.53 per diluted share for the year ended December 31, 2018, as calculated on the attached Supplemental Schedule.
     
  • The guidance range, like our adjusted earnings for 2018, as discussed above, excludes changes in the reserve established in connection with the Department of Justice, pre-tax unrealized gains/losses resulting from increases/decreases in the market value of shares of certain marketable securities held for investment and classified as available for sale, and the impact on our provision for income taxes and net income attributable to UHS resulting from of our adoption of ASU 2016-09, as discussed below.

Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 28, 2019. 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.  Also, a replay of the call will be available following the conclusion of the live call and will be available for one full year.

DOJ Reserve:
During the three and twelve-month periods ended December 31, 2018, we recorded pre-tax increases of approximately $31.9 million and $102.3 million, respectively, to the reserve established in connection with the civil aspects of the government's investigation of certain of our behavioral health care facilities, increasing the aggregate pre-tax reserve to approximately $123 million as of December 31, 2018.  Changes in the reserve may be required in future periods as discussions with the Department of Justice continue and additional information becomes available.  We cannot predict the ultimate resolution of this matter and therefore can provide no assurance that final amounts paid in settlement or otherwise, if any, or associated costs, as well as the income tax deductibility of payments, will not differ materially from our established reserve and assumptions related to income tax deductibility. Please see Item 3-Legal Proceedings in our Form 10-K for the year ended December 31, 2018 for additional disclosure in connection with this matter.

Provision for Intangible Assets Impairment
During 2018, we recorded a pre-tax $49.3 million provision for asset impairment to reduce the carrying value of a tradename intangible asset to approximately $75 million from approximately $124 million as previously recorded in connection with our 2015 acquisition of Foundations Recovery Network, L.L.C. ("Foundations"). The intangible asset impairment charge, which is included in other operating expenses in our 2018 consolidated statements of income, was recorded after evaluation of the estimated fair value of the Foundations' tradename for its existing facilities, consisting of 4 inpatient and 12 outpatient facilities as of December 31, 2018, as well as estimated planned de novos. This asset impairment charge was impacted by the following: (i) the lost future revenue and cash flows resulting from the permanent closure of a Foundations' inpatient facility located in Malibu, California that was severely damaged in the California wildfires during the fourth quarter of 2018; (ii) reduction in growth rates of projected future patient volumes, revenues and operating cash flows based upon pressures on reimbursement rates experienced from certain payers and competitive pressures experienced in certain markets, and; (iii) revisions made to the number and timing of planned de novo facilities.           

Adoption of New Revenue Recognition Standard:
On January 1, 2018, we adopted, using the modified retrospective approach, ASU 2014-09 and ASU 2016-08, "Revenue from Contracts with Customers (Topic 606)" and "Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)", respectively, which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The most significant change from the adoption of the new standard relates to our estimation for the allowance for doubtful accounts. Under the previous standards, our estimate for amounts not expected to be collected based upon our historical experience, were reflected as provision for doubtful accounts, included within net revenue. Under the new standard, our estimate for amounts not expected to be collected based on historical experience will continue to be recognized as a reduction to net revenue, however, not reflected separately as provision for doubtful accounts. Under the new standard, subsequent changes in estimate of collectability due to a change in the financial status of a payer, for example a bankruptcy, will be recognized as bad debt expense in operating charges. The adoption of this ASU in 2018, and amounts recognized as bad debt expense and included in other operating expenses, did not have a material impact on our consolidated financial statements.      

Tax Cuts and Jobs Act of 2017:
Effective January 1, 2018, our provision for income taxes, net income attributable to UHS, and net income attributable to UHS per diluted share, were favorably impacted by the Tax Cuts and Jobs Act of 2017 which made broad and complex changes to the U.S. tax code including, among other things, reducing the U.S. federal corporate tax rate from 35% to 21%.  

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
One of the nation's largest and most respected hospital companies, Universal Health Services, Inc. ("UHS") has built an impressive record of achievement and performance. Growing steadily since its inception into an esteemed Fortune 500 corporation, UHS today has annual revenue exceeding $10.7 billion. In 2019, UHS was again recognized as one of the World's Most Admired Companies by Fortune; in 2018, ranked #268 on the Fortune 500; and in 2017, listed #275 in Forbes inaugural ranking of America's Top 500 Public Companies.

Our operating philosophy is as effective today as it was 40 years ago, enabling us to provide compassionate care to our patients and their loved ones: Build or acquire high quality hospitals in rapidly growing markets, invest in the people and equipment needed to allow each facility to thrive, and become the leading healthcare provider in each community we serve.

Headquartered in King of Prussia, PA, UHS has more than 87,000 employees and through its subsidiaries operates 350 inpatient acute care hospitals and behavioral health facilities and 37 outpatient and other facilities located in 37 states, Washington, D.C., Puerto Rico and the United Kingdom. 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, 2018), 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.

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 in each year of material items impacting our net income attributable to UHS, such as, changes in the reserve established in connection with our discussions with the Department of Justice, our adoption of ASU 2016-09, impairments of long-lived and intangible assets, and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, 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 Reports on Form 10-K for the year ended December 31, 2018. 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,

 

2018

 

2017

 

2018

 

2017

               

Net revenues before provision for doubtful accounts

   

$2,849,971

     

$11,278,942

  Less: Provision for doubtful accounts

   

207,184

     

869,077

Net revenues

$2,754,496

 

2,642,787

 

$10,772,278

 

10,409,865

               

Operating charges:

             

   Salaries, wages and benefits

1,331,704

 

1,254,851

 

5,254,536

 

4,980,637

   Other operating expenses

717,942

 

624,986

 

2,614,687

 

2,493,062

   Supplies expense

300,791

 

284,854

 

1,168,654

 

1,105,096

   Depreciation and amortization

118,075

 

113,638

 

453,045

 

447,765

   Lease and rental expense

26,162

 

25,714

 

106,094

 

103,127

 

2,494,674

 

2,304,043

 

9,597,016

 

9,129,687

               

Income from operations

259,822

 

338,744

 

1,175,262

 

1,280,178

               

Interest expense, net

39,874

 

36,786

 

154,956

 

145,169

Other (income) expense, net

12,498

 

0

 

(14,219)

 

0

               

Income before income taxes

207,450

 

301,958

 

1,034,525

 

1,135,009

               

Provision for income taxes

43,828

 

76,923

 

236,642

 

363,697

               

Net income

163,622

 

225,035

 

797,883

 

771,312

               

Less:  Net income attributable to

             

noncontrolling interests ("NCI")

5,547

 

5,426

 

18,178

 

19,009

               

Net income attributable to UHS

$158,075

 

$219,609

 

$779,705

 

$752,303

               
               
               
               
               
               

Basic earnings per share attributable to UHS (a)

$1.71

 

$2.32

 

$8.35

 

$7.86

               

Diluted earnings per share attributable to UHS (a)

$1.70

 

$2.31

 

$8.31

 

$7.81

 

 

 

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,

 

2018

 

2017

 

2018

 

2017

Basic and diluted:

             

Net income attributable to UHS

$158,075

 

$219,609

 

$779,705

 

$752,303

Less: Net income attributable to unvested restricted share grants

(278)

 

(105)

 

(1,091)

 

(362)

Net income attributable to UHS - basic and diluted

$157,797

 

$219,504

 

$778,614

 

$751,941

               

Weighted average number of common shares - basic

92,187

 

94,530

 

93,276

 

95,652

               

Basic earnings per share attributable to UHS:

$1.71

 

$2.32

 

$8.35

 

$7.86

               

Weighted average number of common shares

92,187

 

94,530

 

93,276

 

95,652

Add: Other share equivalents

519

 

379

 

474

 

673

Weighted average number of common shares and equiv. - diluted

92,706

 

94,909

 

93,750

 

96,325

               

Diluted earnings per share attributable to UHS:

$1.70

 

$2.31

 

$8.31

 

$7.81

               

 

 

Universal Health Services, Inc.

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

For the Three Months ended December 31, 2018 and 2017

(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, 2018

 

revenues

 

December 31, 2017

 

revenues

               

Net income attributable to UHS

$158,075

     

$219,609

   

   Depreciation and amortization

118,075

     

113,638

   

   Interest expense, net

39,874

     

36,786

   

   Provision for income taxes

43,828

     

76,923

   

EBITDA net of NCI

$359,852

 

13.1%

 

$446,956

 

16.9%

               

Other (income) expense, net

12,498

     

-

   

Increase in DOJ Reserve

31,895

     

-

   

Provision for intangible asset impairment

49,310

     

-

   

Adjusted EBITDA net of NCI

$453,555

 

16.5%

 

$446,956

 

16.9%

               

Net revenues

$2,754,496

     

$2,642,787

   
               
               
               
               
               

Calculation of Adjusted Net Income Attributable to UHS

               
 

Three months ended

 

Three months ended

 

December 31, 2018

 

December 31, 2017

     

Per

     

Per

 

Amount

 

Diluted Share

 

Amount

 

Diluted Share

               

Net income attributable to UHS

$158,075

 

$1.70

 

$219,609

 

$2.31

Plus/minus after-tax adjustments:

             

Increase in DOJ Reserve, after-tax

24,477

 

0.26

 

-

 

-

Impact of ASU 2016-09

(139)

 

-

 

(13,477)

 

(0.14)

Provision for intangible asset impairment, after-tax

37,669

 

0.41

 

-

 

-

EHR depreciation & amortization, after-tax

-

 

-

 

2,255

 

0.03

Impact of TCJA-17-Deferred tax

-

 

-

 

(30,000)

 

(0.32)

Impact of TCJA-17-Repatriation tax

-

 

-

 

11,250

 

0.12

Subtotal adjustments

62,007

 

0.67

 

(29,972)

 

(0.31)

Adjusted net income attributable to UHS

$220,082

 

$2.37

 

$189,637

 

$2.00

               

 

 

Universal Health Services, Inc.

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

For the Twelve Months ended December 31, 2018 and 2017

(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, 2018

 

revenues

 

December 31, 2017

 

revenues

               

Net income attributable to UHS

$779,705

     

$752,303

   

   Depreciation and amortization

453,045

     

447,765

   

   Interest expense, net

154,956

     

145,169

   

   Provision for income taxes

236,642

     

363,697

   

EBITDA net of NCI

$1,624,348

 

15.1%

 

$1,708,934

 

16.4%

               

Other (income) expense, net

(14,219)

     

-

   

Increase in DOJ Reserve

102,327

     

-

   

Provision for intangible asset impairment

49,310

     

-

   

Adjusted EBITDA net of NCI

$1,761,766

 

16.4%

 

$1,708,934

 

16.4%

               

Net revenues

$10,772,278

     

$10,409,865

   
               
               
               
               
               

Calculation of Adjusted Net Income Attributable to UHS

               
 

Twelve months ended

 

Twelve months ended

 

December 31, 2018

 

December 31, 2017

     

Per

     

Per

 

Amount

 

Diluted Share

 

Amount

 

Diluted Share

               

Net income attributable to UHS

$779,705

 

$8.31

 

$752,303

 

$7.81

Plus/minus after-tax adjustments:

             

Increase in DOJ Reserve, after-tax

78,171

 

0.83

 

-

 

-

Impact of ASU 2016-09

(1,195)

 

(0.01)

 

(22,096)

 

(0.23)

Provision for intangible asset impairment, after-tax

37,669

 

0.40

 

-

 

-

EHR depreciation & amortization, after-tax

-

 

-

 

14,002

 

0.15

Impact of TCJA-17-Deferred tax

-

 

-

 

(30,000)

 

(0.32)

Impact of TCJA-17-Repatriation tax

-

 

-

 

11,250

 

0.12

Subtotal adjustments

114,645

 

1.22

 

(26,844)

 

(0.28)

Adjusted net income attributable to UHS

$894,350

 

$9.53

 

$725,459

 

$7.53

 

 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

               
 

Three months

 

Twelve months

 

ended December 31,

 

ended December 31,

 

2018

 

2017

 

2018

 

2017

               

Net income

$163,622

 

$225,035

 

$797,883

 

$771,312

Other comprehensive income (loss):

             

   Unrealized derivative gains (losses) on cash flow hedges

(2,460)

 

3,132

 

(2,805)

 

6,679

   Minimum pension liability

(6,892)

 

4,070

 

(6,892)

 

4,070

   Foreign currency translation adjustment

25,198

 

16,746

 

9,718

 

26,678

   Other

4,398

 

(3,814)

 

4,398

 

(2,169)

Other comprehensive income (loss) before tax

20,244

 

20,134

 

4,419

 

35,258

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

8,987

 

729

 

8,905

 

2,664

Total other comprehensive income (loss), net of tax

11,257

 

19,405

 

(4,486)

 

32,594

               

Comprehensive income

174,879

 

244,440

 

793,397

 

803,906

Less: Comprehensive income attributable to noncontrolling interests

5,547

 

5,426

 

18,178

 

19,009

Comprehensive income attributable to UHS

$169,332

 

$239,014

 

$775,219

 

$784,897

               

 

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

             
     

December 31,

   

December 31,

     

2018

   

2017

Assets

           

Current assets:

           

    Cash and cash equivalents

 

$

105,220

 

$

74,423

    Accounts receivable, net

   

1,509,909

   

1,500,898

    Supplies

   

148,206

   

136,177

    Other current assets

   

174,467

   

86,504

          Total current assets

   

1,937,802

   

1,798,002

             

Property and equipment

   

8,563,455

   

7,921,126

Less: accumulated depreciation

   

(3,715,515)

   

(3,349,289)

     

4,847,940

   

4,571,837

             

Other assets:

           

    Goodwill

   

3,844,628

   

3,825,157

    Deferred income taxes

   

5,280

   

3,007

    Deferred charges

   

8,772

   

9,787

    Other

   

621,058

   

554,038

Total Assets

 

$

11,265,480

 

$

10,761,828

             

Liabilities and Stockholders' Equity

           

Current liabilities:

           

    Current maturities of long-term debt

 

$

63,446

 

$

545,619

    Accounts payable and accrued liabilities

   

1,382,864

   

1,284,081

    Federal and state taxes

   

2,428

   

18,334

          Total current liabilities

   

1,448,738

   

1,848,034

             

Other noncurrent liabilities

   

361,809

   

306,304

Long-term debt

   

3,935,187

   

3,494,390

Deferred income taxes

   

49,661

   

54,962

             

Redeemable noncontrolling interest

   

4,292

   

6,702

             

UHS common stockholders' equity

   

5,389,262

   

4,989,514

Noncontrolling interest

   

76,531

   

61,922

          Total equity

   

5,465,793

   

5,051,436

             

Total Liabilities and Stockholders' Equity

 

$

11,265,480

 

$

10,761,828

 

 

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

Twelve months

 

ended December 31,

 

2018

 

2017

       

Cash Flows from Operating Activities:

     

  Net income

$797,883

 

$771,312

  Adjustments to reconcile net income to net 

     

cash provided by operating activities:

     

Depreciation & amortization

453,076

 

447,883

Gain on sale of assets and businesses

(2,513)

 

0

Stock-based compensation expense

66,581

 

56,738

Costs related to extinguishment of debt

2,727

 

0

Provision for intangible asset impairment

49,310

 

0

  Changes in assets & liabilities, net of effects from

     

acquisitions and dispositions:

     

   Accounts receivable

(42,239)

 

(24,719)

   Accrued interest

(4,478)

 

705

   Accrued and deferred income taxes 

(54,052)

 

(6,405)

   Other working capital accounts 

24,696

 

(15,165)

   Other assets and deferred charges

(31,429)

 

(27,936)

   Other 

64,615

 

(42,564)

   Accrued insurance expense, net of commercial premiums paid

92,863

 

102,595

   Payments made in settlement of self-insurance claims

(76,147)

 

(79,192)

          Net cash provided by operating activities

1,340,893

 

1,183,252

       

Cash Flows from Investing Activities:

     

   Property and equipment additions, net of disposals

(664,962)

 

(557,506)

   Acquisition of property and businesses

(110,464)

 

(22,878)

   Proceeds received from sales of assets and businesses

13,502

 

108

   Costs incurred for purchase and implementation of information technology applications

(36,243)

 

(29,047)

   Decrease (increase) in capital reserves of commercial insurance subsidiary

100

 

(3,100)

   Investment in, and advances to,  joint venture

(15,331)

 

(7,976)

          Net cash used in investing activities

(813,398)

 

(620,399)

       

Cash Flows from Financing Activities:

     

   Reduction of long-term debt

(830,496)

 

(143,106)

   Additional borrowings

791,247

 

41,100

   Financing costs

(13,787)

 

(76)

   Repurchase of common shares

(397,425)

 

(364,401)

   Dividends paid

(37,342)

 

(38,211)

   Issuance of common stock

10,196

 

10,254

   Profit distributions to noncontrolling interests

(14,595)

 

(24,713)

          Net cash used in financing activities

(492,202)

 

(519,153)

       

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

(2,905)

 

1,647

Increase in cash, cash equivalents and restricted cash

32,388

 

45,347

Cash, cash equivalents and restricted cash, beginning of period

167,297

 

121,950

Cash, cash equivalents and restricted cash, end of period

$199,685

 

$167,297

       

Supplemental Disclosures of Cash Flow Information:

     

  Interest paid

$150,290

 

$135,533

       

  Income taxes paid, net of refunds

$293,837

 

$370,855

       

  Noncash purchases of property and equipment

$77,674

 

$82,496

 

 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)

                   
                   
                   
         

 % Change 

 

 % Change 

   
         

Quarter ended

 

12 months ended

   

Same Facility:

       

12/31/2018

 

12/31/2018

   
                   

Acute Care Hospitals

                 

Revenues

       

4.7%

 

4.6%

   

Adjusted Admissions

       

2.2%

 

2.1%

   

Adjusted Patient Days

       

4.8%

 

4.8%

   

Revenue Per Adjusted Admission

     

4.2%

 

4.1%

   

Revenue Per Adjusted Patient Day

     

1.6%

 

1.4%

   
                   
                   
                   

Behavioral Health Hospitals

                 

Revenues

       

2.0%

 

2.6%

   

Adjusted Admissions

       

4.5%

 

3.0%

   

Adjusted Patient Days

       

1.2%

 

0.5%

   

Revenue Per Adjusted Admission

     

-2.1%

 

0.0%

   

Revenue Per Adjusted Patient Day

     

1.1%

 

2.5%

   
                   
                   
                   
                   

UHS Consolidated

   

Fourth quarter ended

 

Twelve months ended

     

12/31/2018

 

12/31/2017

 

12/31/2018

 

12/31/2017

                   

Revenues

   

$2,754,496

 

$2,642,787

 

$10,772,278

 

$10,409,865

EBITDA net of NCI

   

$359,852

 

$446,956

 

$1,624,348

 

$1,708,934

EBITDA Margin net of NCI

   

13.1%

 

16.9%

 

15.1%

 

16.4%

Adjusted EBITDA net of NCI

   

$453,555

 

$446,956

 

$1,761,766

 

$1,708,934

Adjusted EBITDA Margin net of NCI

 

16.5%

 

16.9%

 

16.4%

 

16.4%

                   
                   

Cash Flow From Operations

   

$365,405

 

$304,535

 

$1,340,893

 

$1,183,252

Days Sales Outstanding

   

50

 

52

 

51

 

53

Capital Expenditures  

   

$143,613

 

$138,813

 

$664,962

 

$557,506

                   

Debt 

           

$3,998,633

 

$4,040,009

UHS' Shareholders Equity

           

$5,389,262

 

$4,989,514

Debt / Total Capitalization

           

42.6%

 

44.7%

Debt / EBITDA net of NCI (1)

           

2.46

 

2.36

Debt / Adjusted EBITDA net of NCI (1)

       

2.27

 

2.36

Debt / Cash From Operations (1)

           

2.98

 

3.41

                   

(1)  Latest 4 quarters

                 

 

 

Universal Health Services, Inc.

Acute Care Hospital Services

For the three and twelve months ended

December 31, 2018 and 2017

(in thousands)

                                 
                                 

Same Facility Basis - Acute Care Hospital Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2018

 

December 31, 2017

 

December 31, 2018

 

December 31, 2017

   

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

Net revenues before provision for doubtful accounts

         

$1,564,541

             

$6,128,103

   

Less: Provision for doubtful accounts

         

182,284

             

755,615

   

Net revenues

 

1,446,693

 

100.0%

 

1,382,257

 

100.0%

 

$5,618,428

 

100.0%

 

5,372,488

 

100.0%

Operating charges:

                               

Salaries, wages and benefits

 

603,805

 

41.7%

 

568,455

 

41.1%

 

2,366,078

 

42.1%

 

2,241,127

 

41.7%

Other operating expenses

 

312,128

 

21.6%

 

302,071

 

21.9%

 

1,238,787

 

22.0%

 

1,244,186

 

23.2%

Supplies expense

 

249,290

 

17.2%

 

234,721

 

17.0%

 

967,833

 

17.2%

 

905,164

 

16.8%

Depreciation and amortization

 

70,596

 

4.9%

 

68,460

 

5.0%

 

278,558

 

5.0%

 

262,950

 

4.9%

Lease and rental expense

 

14,186

 

1.0%

 

14,142

 

1.0%

 

57,229

 

1.0%

 

57,208

 

1.1%

Subtotal-operating expenses

 

1,250,005

 

86.4%

 

1,187,849

 

85.9%

 

4,908,485

 

87.4%

 

4,710,635

 

87.7%

Income from operations

 

196,688

 

13.6%

 

194,408

 

14.1%

 

709,943

 

12.6%

 

661,853

 

12.3%

Interest expense, net

 

314

 

0.0%

 

610

 

0.0%

 

1,658

 

0.0%

 

2,684

 

0.0%

Other (income) expense, net

 

-

 

-

 

-

 

-

 

(2,498)

 

(0.0)%

 

-

 

-

Income before income taxes

 

196,374

 

13.6%

 

193,798

 

14.0%

 

710,783

 

12.7%

 

$659,169

 

12.3%

                                 
                                 
                                 

All Acute Care Hospital Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2018

 

December 31, 2017

 

December 31, 2018

 

December 31, 2017

   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

Net revenues before provision for doubtful accounts

         

$1,594,219

             

$6,240,302

   

Less: Provision for doubtful accounts

         

182,288

             

755,619

   

Net revenues

 

1,487,232

 

100.0%

 

1,411,931

 

100.0%

 

$5,719,905

 

100.0%

 

5,484,683

 

100.0%

Operating charges:

                               

Salaries, wages and benefits

 

604,188

 

40.6%

 

568,618

 

40.3%

 

2,367,014

 

41.4%

 

2,241,527

 

40.9%

Other operating expenses

 

352,809

 

23.7%

 

332,287

 

23.5%

 

1,341,088

 

23.4%

 

1,350,741

 

24.6%

Supplies expense

 

249,523

 

16.8%

 

234,721

 

16.6%

 

968,067

 

16.9%

 

905,165

 

16.5%

Depreciation and amortization

 

70,699

 

4.8%

 

72,084

 

5.1%

 

278,661

 

4.9%

 

285,501

 

5.2%

Lease and rental expense

 

14,192

 

1.0%

 

14,142

 

1.0%

 

57,235

 

1.0%

 

57,208

 

1.0%

Subtotal-operating expenses

 

1,291,411

 

86.8%

 

1,221,852

 

86.5%

 

5,012,065

 

87.6%

 

4,840,142

 

88.2%

Income from operations

 

195,821

 

13.2%

 

190,079

 

13.5%

 

707,840

 

12.4%

 

644,541

 

11.8%

Interest expense, net

 

314

 

0.0%

 

610

 

0.0%

 

1,658

 

0.0%

 

2,684

 

0.0%

Other (income) expense, net

 

-

 

-

 

-

 

-

 

(2,498)

 

(0.0)%

 

-

 

-

Income before income taxes

 

195,507

 

13.1%

 

189,469

 

13.4%

 

708,680

 

12.4%

 

$641,857

 

11.7%

                                 
                                 

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 long-lived and intangible assets, the impact of the EHR applications (in 2017) 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, 2018.

                                 

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 the implementation of EHR applications at our acute care hospitals (in 2017); (iii) the impact of provider tax

assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, 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, 2018 and 2017

(in thousands)

                                 
                                 

Same Facility - Behavioral Health Care Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2018

 

December 31, 2017

 

December 31, 2018

 

December 31, 2017

   

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues 

Net revenues before provision for doubtful accounts

         

$1,220,181

             

$4,878,039

   

Less: Provision for doubtful accounts

         

26,869

             

110,030

   

Net revenues

 

$1,217,419

 

100.0%

 

1,193,312

 

100.0%

 

$4,891,178

 

100.0%

 

4,768,009

 

100.0%

Operating charges:

                               

Salaries, wages and benefits

 

641,488

 

52.7%

 

615,534

 

51.6%

 

2,558,296

 

52.3%

 

2,437,495

 

51.1%

Other operating expenses

 

234,868

 

19.3%

 

233,701

 

19.6%

 

935,562

 

19.1%

 

935,750

 

19.6%

Supplies expense

 

50,345

 

4.1%

 

49,204

 

4.1%

 

197,305

 

4.0%

 

195,813

 

4.1%

Depreciation and amortization

 

41,042

 

3.4%

 

37,540

 

3.1%

 

153,924

 

3.1%

 

145,707

 

3.1%

Lease and rental expense

 

11,394

 

0.9%

 

11,065

 

0.9%

 

46,942

 

1.0%

 

43,825

 

0.9%

Subtotal-operating expenses

 

979,137

 

80.4%

 

947,044

 

79.4%

 

3,892,029

 

79.6%

 

3,758,590

 

78.8%

Income from operations

 

238,282

 

19.6%

 

246,268

 

20.6%

 

999,149

 

20.4%

 

1,009,419

 

21.2%

Interest expense, net

 

362

 

0.0%

 

415

 

0.0%

 

1,597

 

0.0%

 

2,005

 

0.0%

Other (income) expense, net

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Income before income taxes

 

237,920

 

19.5%

 

245,853

 

20.6%

 

997,552

 

20.4%

 

1,007,414

 

21.1%

                                 
                                 
                                 

All Behavioral Health Care Services

                               
                                 
   

Three months ended

 

Three months ended

 

Twelve months ended

 

Twelve months ended

   

December 31, 2018

 

December 31, 2017

 

December 31, 2018

 

December 31, 2017

   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

 

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues 

Net revenues before provision for doubtful accounts

         

$1,250,298

             

$5,020,177

   

Less: Provision for doubtful accounts

         

28,809

             

113,458

   

Net revenues

 

$1,264,323

 

100.0%

 

1,221,489

 

100.0%

 

$5,038,874

 

100.0%

 

4,906,719

 

100.0%

Operating charges:

                               

Salaries, wages and benefits

 

662,117

 

52.4%

 

627,066

 

51.3%

 

2,617,337

 

51.9%

 

2,496,236

 

50.9%

Other operating expenses

 

312,404

 

24.7%

 

257,378

 

21.1%

 

1,091,102

 

21.7%

 

1,042,056

 

21.2%

Supplies expense

 

51,043

 

4.0%

 

49,969

 

4.1%

 

200,008

 

4.0%

 

199,936

 

4.1%

Depreciation and amortization

 

44,207

 

3.5%

 

38,984

 

3.2%

 

163,155

 

3.2%

 

152,067

 

3.1%

Lease and rental expense

 

11,827

 

0.9%

 

11,452

 

0.9%

 

48,316

 

1.0%

 

45,445

 

0.9%

Subtotal-operating expenses

 

1,081,598

 

85.5%

 

984,849

 

80.6%

 

4,119,918

 

81.8%

 

3,935,740

 

80.2%

Income from operations

 

182,725

 

14.5%

 

236,640

 

19.4%

 

918,956

 

18.2%

 

970,979

 

19.8%

Interest expense, net

 

363

 

0.0%

 

415

 

0.0%

 

1,597

 

0.0%

 

2,005

 

0.0%

Other (income) expense, net

 

1,206

 

0.1%

 

-

 

-

 

1,842

 

0.0%

 

-

 

-

Income before income taxes

 

181,156

 

14.3%

 

$236,225

 

19.3%

 

915,517

 

18.2%

 

$968,974

 

19.7%

                                 
                                 

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 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 Behavioral Health Care 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 in the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2018.

                                 

The All Behavioral Health Care Servicestable summarizes the results of operations for all our behavioral health care facilities during the periods presented. These amounts include:

(i) our behavioral health 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; (iii) an intangible asset impairment charge recorded during 2018 in connection with Foundations Recovery Network, L.L.C., and; (iv) certain

other amounts including the results of facilities acquired or opened during the last twelve months as well as the results of certain facilities that were closed or restructured during the past

year.

 

 

Universal Health Services, Inc.

Selected Hospital Statistics

For the three months ended

December 31, 2018 and 2017

                         
                         

AS REPORTED:

                       
                         
                         
   

ACUTE

 

BEHAVIORAL HEALTH

   

12/31/18

 

12/31/17

 

%  change

 

12/31/18

 

12/31/17

 

%  change

                         

Hospitals owned and leased

 

26

 

26

 

0.0%

 

324

 

300

 

8.0%

Average licensed beds

 

6,340

 

6,132

 

3.4%

 

23,907

 

23,225

 

2.9%

Average available beds

 

6,164

 

5,960

 

3.4%

 

23,823

 

23,140

 

3.0%

Patient days

 

348,399

 

330,319

 

5.5%

 

1,612,081

 

1,569,123

 

2.7%

Average daily census

 

3,786.8

 

3,590.4

 

5.5%

 

17,522.6

 

17,055.7

 

2.7%

Occupancy-licensed beds

 

59.7%

 

58.6%

 

2.0%

 

73.3%

 

73.4%

 

-0.1%

Occupancy-available beds

 

61.4%

 

60.2%

 

2.0%

 

73.6%

 

73.7%

 

-0.2%

Admissions

 

77,988

 

75,795

 

2.9%

 

119,997

 

114,049

 

5.2%

Length of stay

 

4.5

 

4.4

 

2.5%

 

13.4

 

13.8

 

-2.4%

                         

Inpatient revenue

 

$6,279,880

 

$5,514,735

 

13.9%

 

$2,425,291

 

$2,260,616

 

7.3%

Outpatient revenue

 

3,797,937

 

3,335,708

 

13.9%

 

260,836

 

253,078

 

3.1%

Total patient revenue

 

10,077,817

 

8,850,443

 

13.9%

 

2,686,127

 

2,513,694

 

6.9%

Other revenue

 

100,480

 

115,512

 

-13.0%

 

50,072

 

50,711

 

-1.3%

Gross hospital revenue

 

10,178,297

 

8,965,955

 

13.5%

 

2,736,199

 

2,564,405

 

6.7%

Total deductions

 

8,691,065

 

7,371,736

 

17.9%

 

1,471,876

 

1,314,107

 

12.0%

Net hospital revenue before 

                       

  provision for doubtful accounts

 

1,487,232

 

1,594,219

 

-6.7%

 

1,264,323

 

1,250,298

 

1.1%

Provision for doubtful accounts

 

0

 

182,288

 

-100.0%

 

0

 

28,809

 

-100.0%

Net hospital revenue 

 

$1,487,232

 

$1,411,931

 

5.3%

 

$1,264,323

 

$1,221,489

 

3.5%

                         
                         

SAME FACILITY:

                       
                         
   

ACUTE

 

BEHAVIORAL HEALTH

   

12/31/18

 

12/31/17

 

%  change

 

12/31/18

 

12/31/17

 

%  change

                         

Hospitals owned and leased

 

26

 

26

 

0.0%

 

291

 

291

 

0.0%

Average licensed beds

 

6,340

 

6,132

 

3.4%

 

22,842

 

22,502

 

1.5%

Average available beds

 

6,164

 

5,960

 

3.4%

 

22,758

 

22,417

 

1.5%

Patient days

 

348,399

 

330,319

 

5.5%

 

1,566,806

 

1,546,557

 

1.3%

Average daily census

 

3,786.8

 

3,590.4

 

5.5%

 

17,030.5

 

16,810.4

 

1.3%

Occupancy-licensed beds

 

59.7%

 

58.6%

 

2.0%

 

74.6%

 

74.7%

 

-0.2%

Occupancy-available beds

 

61.4%

 

60.2%

 

2.0%

 

74.8%

 

75.0%

 

-0.2%

Admissions

 

77,988

 

75,795

 

2.9%

 

118,557

 

113,280

 

4.7%

Length of stay

 

4.5

 

4.4

 

2.5%

 

13.2

 

13.7

 

-3.2%

 

 

Universal Health Services, Inc.

Selected Hospital Statistics

For the Twelve months ended

December 31, 2018 and 2017

                         
                         

AS REPORTED:

                       
                         
                         
   

ACUTE

 

BEHAVIORAL HEALTH

   

12/31/18

 

12/31/17

 

%  change

 

12/31/18

 

12/31/17

 

%  change

                         

Hospitals owned and leased

 

26

 

26

 

0.0%

 

324

 

300

 

8.0%

Average licensed beds

 

6,232

 

6,127

 

1.7%

 

23,509

 

23,151

 

1.5%

Average available beds

 

6,056

 

5,954

 

1.7%

 

23,425

 

23,068

 

1.5%

Patient days

 

1,376,988

 

1,312,265

 

4.9%

 

6,418,334

 

6,381,756

 

0.6%

Average daily census

 

3,772.6

 

3,595.2

 

4.9%

 

17,584.5

 

17,484.3

 

0.6%

Occupancy-licensed beds

 

60.5%

 

58.7%

 

3.2%

 

74.8%

 

75.5%

 

-1.0%

Occupancy-available beds

 

62.3%

 

60.4%

 

3.2%

 

75.1%

 

75.8%

 

-1.0%

Admissions

 

303,985

 

297,390

 

2.2%

 

482,658

 

467,822

 

3.2%

Length of stay

 

4.5

 

4.4

 

2.7%

 

13.3

 

13.6

 

-2.5%

                         

Inpatient revenue

 

$24,814,959

 

$21,888,207

 

13.4%

 

$9,735,521

 

$8,949,984

 

8.8%

Outpatient revenue

 

14,967,313

 

13,115,881

 

14.1%

 

1,025,721

 

993,409

 

3.3%

Total patient revenue

 

39,782,272

 

35,004,088

 

13.7%

 

10,761,242

 

9,943,393

 

8.2%

Other revenue

 

397,932

 

468,300

 

-15.0%

 

202,346

 

205,212

 

-1.4%

Gross hospital revenue

 

40,180,204

 

35,472,388

 

13.3%

 

10,963,588

 

10,148,605

 

8.0%

Total deductions

 

34,460,299

 

29,232,086

 

17.9%

 

5,924,714

 

5,128,428

 

15.5%

Net hospital revenue before 

                       

  provision for doubtful accounts

 

5,719,905

 

6,240,302

 

-8.3%

 

5,038,874

 

5,020,177

 

0.4%

Provision for doubtful accounts

 

0

 

755,619

 

-100.0%

 

0

 

113,458

 

-100.0%

Net hospital revenue 

 

$5,719,905

 

$5,484,683

 

4.3%

 

$5,038,874

 

$4,906,719

 

2.7%

                         
                         

SAME FACILITY:

                       
                         
   

ACUTE

 

BEHAVIORAL HEALTH

   

12/31/18

 

12/31/17

 

%  change

 

12/31/18

 

12/31/17

 

%  change

                         

Hospitals owned and leased

 

26

 

26

 

0.0%

 

291

 

291

 

0.0%

Average licensed beds

 

6,232

 

6,127

 

1.7%

 

22,722

 

22,374

 

1.6%

Average available beds

 

6,056

 

5,954

 

1.7%

 

22,639

 

22,291

 

1.6%

Patient days

 

1,376,988

 

1,312,265

 

4.9%

 

6,293,768

 

6,244,201

 

0.8%

Average daily census

 

3,772.4

 

3,595.2

 

4.9%

 

17,243.2

 

17,107.4

 

0.8%

Occupancy-licensed beds

 

60.5%

 

58.7%

 

3.2%

 

75.9%

 

76.5%

 

-0.7%

Occupancy-available beds

 

62.3%

 

60.4%

 

3.2%

 

76.2%

 

76.7%

 

-0.8%

Admissions

 

303,985

 

297,390

 

2.2%

 

477,254

 

461,901

 

3.3%

Length of stay

 

4.5

 

4.4

 

2.7%

 

13.2

 

13.5

 

-2.4%

 

 

Universal Health Services, Inc.

 

Supplemental Non-GAAP Disclosures

 

2019 Operating Results Forecast

 

(in thousands, except per share amounts)

 
                     
                     
     

Forecast For The Year Ending December 31, 2019

 
         

% Net

     

% Net

 
     

Low

 

revenues

 

High

 

revenues

 

Net revenues

   

$11,213,000

     

$11,361,000

     
                     

Adjusted net income attributable to UHS (a)

 

$882,453

     

$945,658

     
                     

 Depreciation and amortization

   

491,517

     

491,517

     

 Interest expense

   

177,524

     

177,524

     

 Provision for income taxes

   

274,711

     

294,386

     

EBITDA net of NCI (b)

   

$1,826,205

 

16.3%

 

$1,909,085

 

16.8%

 
                     

Adjusted net income attributable to UHS, per diluted share (a)

$9.70

     

$10.40

     
                     

Shares used in computing diluted earnings per share

 

90,755

     

90,755

     
                     
                     

(a) The 2019 forecasted amounts exclude the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as

changes in the reserve established in connection with our discussions with the Department of Justice, pre-tax unrealized gains/losses resulting from

increases/decrease in the market value of shares of certain marketable securities held for investment and classified as available for sale, our adoption of

ASU 2016-09, 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, impairment of long-lived and intangible assets, and other amounts that may be reflected in the

current financial statements that related to prior periods and the impact of share repurchases that differ from included assumptions.  It is also subject to

certain conditions including those set forth in the accompanying report in General Information, Forward-Looking Statements and Risk Factors and Non-

GAAP Financial Measures.

                     

(b) EBITDA is a non-GAAP financial measure.  To obtain a complete understanding of our financial performance, EBITDA should be examined in

connection with net income determined in accordance with GAAP as presented in the consolidated financial statements and notes thereto in this report or

in our filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2018.

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/universal-health-services-inc-reports-2018-fourth-quarter-and-full-year-financial-results-and-2019-full-year-earnings-guidance-300803489.html

SOURCE Universal Health Services, Inc.

Steve Filton, Chief Financial Officer, 610-768-3300