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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 27, 2006 (October 26, 2006)

 

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UNIVERSAL HEALTH SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

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DELAWARE		1-10765		23-2077891
(State or other jurisdiction of Incorporation or Organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

UNIVERSAL CORPORATE CENTER

367 SOUTH GULPH ROAD

KING OF PRUSSIA, PENNSYLVANIA 19406

(Address of principal executive office) (Zip Code)

Registrant’s telephone number, including area code (610) 768-3300

Not Applicable

(Former name or former address, if changed since last report)

 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 2.02 Results of Operations and Financial Condition

On October 26, 2006, Universal Health Services, Inc. (the “Company”) issued its 2006 third quarter earnings release. A copy of the Company’s press release is furnished as exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits. 99.1 Universal Health Services, Inc., press release, dated October 26, 2006

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 27, 2006

Exhibit Index

 

Exhibit No.		Exhibit
99.1		Universal Health Services, Inc., press release, dated October 26, 2006

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

 

CONTACT:		Steve Filton
		Chief Financial Officer				October 26, 2006
		610-768-3300

UNIVERSAL HEALTH SERVICES, INC. REPORTS

THIRD QUARTER EARNINGS

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income was $113.9 million, or $2.00 per diluted share, during the third quarter of 2006 as compared to $8.3 million, or $.15 per diluted share, during the comparable prior year quarter. Reported net income was $225.3 million, or $3.89 per diluted share, during the nine months ended September 30, 2006 as compared to $228.6 million, or $3.73 per diluted share, during the comparable prior year nine-month period.

Reported income from continuing operations was $114.0 million, or $2.00 per diluted share, during the third quarter of 2006 as compared to $9.5 million, or $.17 per diluted share, during the third quarter of 2005. Reported income from continuing operations was $225.4 million, or $3.89 per diluted share, during the nine-month period ended September 30, 2006 as compared to $100.8 million, or $1.71 per diluted share, during the nine-month period ended September 30, 2005.

As indicated on the attached Schedules of Non-GAAP Supplemental Consolidated Statements of Income Information (“Supplemental Schedules”), our income from continuing operations and net income for the three and nine-month periods ended September 30, 2006 and 2005 include various items such as: (i) hurricane-related expenses, net of minority interests and income taxes; (ii) hurricane-related insurance recoveries, net of minority interests and income taxes; (iii) prior period effect of supplemental reimbursements from certain states and contractual settlements, net of income taxes; (iv) a previously disclosed charge incurred during the third quarter of 2006 to record the aggregate present value of the future funding of a portion of a gift from our Chairman of the Board of Directors, Chief Executive Officer and President to The College of William & Mary (“W&M Funding”); (v) favorable income tax adjustment to reduce reserves due to the expiration of statute of limitations in a foreign jurisdiction, and; (vi) gains on divestitures, net of income taxes (included in net income for nine-month period ended September 30, 2005).

After adjusting for the items discussed above applicable to each period presented, as indicated on the attached Supplemental Schedules, our adjusted net income during the three-month period ended September 30, 2006 was $30.6 million, or $.54 per diluted

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share, as compared to $28.4 million, or $.52 per diluted share, during the third quarter of 2005. Our adjusted net income during the nine-month period ended September 30, 2006 was $119.4 million, or $2.10 per diluted share, as compared to $125.2 million, or $2.09 per diluted share, during the comparable prior year nine-month period.

Our adjusted income from continuing operations during the three-month period ended September 30, 2006 was $30.7 million, or $.54 per diluted share, as compared to $29.6 million, or $.54 per diluted share, during the three-month period ended September 30, 2005. Our adjusted income from continuing operations during the nine-month period ended September 30, 2006 was $119.5 million, or $2.10 per diluted share, as compared to $123.9 million, or $2.07 per diluted share, during the comparable prior year nine-month period.

Net revenues increased 7% to $1.04 billion during the third quarter of 2006 as compared to $971 million during the third quarter of 2005. Net revenues increased 5% to $3.13 billion during the nine months ended September 30, 2006 as compared to $2.97 billion during the prior year nine-month period. Impacting our net revenues during the 2006 periods was the loss of revenues generated at our acute care facilities in Louisiana which were damaged and closed since the third quarter of 2005 as a result of Hurricane Katrina. On a combined basis, these facilities generated net revenues of $40 million and $166 million during the three and nine-month periods ended September 30, 2005, respectively. Also, as previously disclosed, on January 1^st of this year we implemented a formal company-wide uninsured discount policy which has had the effect of lowering both net revenues and the provision for doubtful accounts by approximately $17 million and $46 million during the three and nine-month periods ended September 30, 2006, respectively. The implementation of this uninsured discount policy did not have a significant impact on our 2006 net income.

At our acute care hospitals owned during both periods, inpatient admissions increased 1.9% and patient days increased 4.8% during the third quarter of 2006 as compared to the comparable 2005 quarter. Inpatient admissions increased 1.5% and patient days increased 2.4% during the nine-month period ended September 30, 2006 as compared to the comparable prior year period. Since our acute care facilities located in Louisiana have been closed since the third quarter of 2005, the inpatient statistics for those facilities have been excluded from the three and nine-month periods of each year. At our behavioral health care facilities owned during both quarters, inpatient admissions increased 3.0% and patient days increased 1.2% during the third quarter of 2006 as compared to the comparable 2005 quarter. Inpatient admissions increased 3.5% and patient days increased 1.7% during the nine-month period ended September 30, 2006 as compared to the comparable prior year period.

Our consolidated operating margin, as calculated on the attached Supplemental Schedules, was 12.2% and 13.0% during the three-month periods ended September 30, 2006 and 2005, respectively. The operating margin at our acute care hospitals owned during both periods (“same facility basis”) remained unchanged at 11.8% during each of the three-month periods ended September 30, 2006 and 2005. On a same facility basis,

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the operating margin at our behavioral health hospitals increased to 24.7% during the third quarter of 2006 from 22.7% during the comparable quarter of the prior year. Contributing to the decrease in consolidated operating margin during the third quarter of 2006, as compared to the comparable prior year quarter, were lower operating margins experienced at our behavioral health facilities acquired during the fourth quarter of 2005 and the $4.5 million charge incurred during the third quarter of 2006 in connection with the W&M Funding.

Our consolidated operating margin was 13.4% and 13.9% during the nine-month periods ended September 30, 2006 and 2005, respectively. On a same facility basis, the operating margin at our acute care hospitals decreased to 13.5% during the nine months ended September 30, 2006 as compared to 14.4% during the nine months ended September 30, 2005. On a same facility basis, the operating margin at our behavioral health hospitals increased to 25.7% during the nine months ended September 30, 2006 as compared to 24.5% during the comparable prior year period.

Our provision for doubtful accounts as a percentage of net revenues was 9.4% and 10.6% during the three-month periods ended September 30, 2006 and 2005, respectively, and 8.3% and 9.5% during the nine-month periods ended September 30, 2006 and 2005, respectively. Exclusive of the impact of the uninsured discount implemented at the beginning of this year, as a percentage of net revenues, the provision for doubtful accounts would have been 10.8% and 9.6% during the three and nine-month periods ended September 30, 2006.

Effective July 1, 2006, the pharmacy services for our acute care facilities were brought in-house from an outsourced vendor and as a result of this change, during the third quarter of 2006, we experienced an increase in our supplies expense and salaries, wages and benefits expense and a decrease in our other operating expenses. The transition of our pharmacy services did not have a significant impact on our operating margin or net income during the third quarter of 2006.

As previously announced during the third quarter of 2006, we reached an agreement with our insurance carrier to settle all claims related to damage sustained at our facilities located in Louisiana as a result of Hurricane Katrina. Including amounts collected from our other insurance carriers in 2005 and 2006, we received total insurance proceeds of $264 million which represented approximately 95% of our insurance policy limits.

We will hold a conference call for investors and analysts at 9:00 a.m. Eastern Time on October 27, 2006. The dial-in number is 1-877-648-7971. A digital recording of the conference call will be available two hours after the completion of the conference call on October 27, 2006 and will continue through midnight on November 3, 2006. The recording can be accessed by calling 1-800-642-1687 and entering the conference ID number 8537972.

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This call will also be available live over the internet at our web site at www.uhsinc.com. It will also be distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at http://www.companyboardroom.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents (www.streetevents.com).

Universal Health Services, Inc. is one of the nation’s largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico. 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 “Risk Factors” on pages 24 through 30 and in “Forward-Looking Statements and Risk Factors” on pages 39 and 40 of our Form 10-K for the year ended December 31, 2005), may cause 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 operating income, operating margin, adjusted income from continuing operations, adjusted income from continuing operations per diluted share, adjusted net income, adjusted net income per diluted share, adjusted operating income and adjusted operating margin, 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 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 items that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, hurricane-related expenses and insurance recoveries, the W&M Funding, and other amounts reflected in the current or prior year financial statements that relate to prior periods. To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this Report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2005. Since the items included or excluded from these measures are significant components in understanding and assessing financial

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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.

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Universal Health Services, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

 

		Three months ended September 30,								Nine months ended September 30,
		2006				2005				2006				2005
Net revenues		$	1,043,457			$	970,772			$	3,125,419			$	2,968,305
Operating charges:
Salaries, wages and benefits			459,099				395,938				1,336,087				1,210,175
Other operating expenses			211,875				229,119				708,932				694,991
Supplies expense			146,944				117,127				400,271				369,787
Provision for doubtful accounts			97,901				102,734				260,090				280,620
Depreciation and amortization			40,961				38,552				120,360				116,236
Lease and rental expense			16,184				14,688				48,247				45,443
Hurricane related expenses			4,172				128,895				14,432				128,895
Hurricane insurance recoveries			(4,172	)			(81,709	)			(14,432	)			(81,709	)
			972,964				945,344				2,873,987				2,764,438
Income before interest expense, hurricane insurance recoveries in excess of expenses, minority interests and income taxes			70,493				25,428				251,432				203,867
Interest expense, net			6,140				6,404				23,362				24,530
Hurricane insurance recoveries in excess of expenses			(130,328	)			—				(167,359	)			—
Minority interests in earnings of consolidated entities			14,948				4,014				37,617				19,859
Income before income taxes			179,733				15,010				357,812				159,478
Provision for income taxes			65,704				5,531				132,420				58,677
Income from continuing operations			114,029				9,479				225,392				100,801
(Loss) income from discontinued operations, net of income tax expense (a)			(84	)			(1,160	)			(104	)			127,770
Net income		$	113,945			$	8,319			$	225,288			$	228,571
Basic earnings (loss) per share: (b)
From continuing operations		$	2.01			$	0.17			$	4.11			$	1.79
From discontinued operations			0.00				(0.02	)			0.00				2.27
Total basic earnings per share		$	2.01			$	0.15			$	4.11			$	4.06
Diluted earnings (loss) per share: (b)
From continuing operations		$	2.00			$	0.17			$	3.89			$	1.71
From discontinued operations			0.00				(0.02	)			0.00				2.02
Total diluted earnings per share		$	2.00			$	0.15			$	3.89			$	3.73

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Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

 

		Three months ended September 30,								Nine months ended September 30,
		2006				2005				2006				2005
(a) Calculation of income from discontinued operations, net of income tax:
(Loss) income from operations		$	(133	)		$	(1,825	)		$	(165	)		$	5,713
Gains on divestitures			—				—				—				186,221
Asset impairment charge			—				—				—				(3,105	)
(Loss) income from discontinued operations, pre-tax			(133	)			(1,825	)			(165	)			188,829
Income tax benefit (provision)			49				665				61				(61,059	)
(Loss) income from discontinued operations, net of income tax expense		$	(84	)		$	(1,160	)		$	(104	)		$	127,770
(b) Earnings per share calculation:
Basic:
Income from continuing operations		$	114,029			$	9,479			$	225,392			$	100,801
Less: Dividends on unvested restricted stock, net of taxes			(20	)			(26	)			(63	)			(81	)
Income from continuing operations - basic		$	114,009			$	9,453			$	225,329			$	100,720
(Loss) income from discontinued operations			(84	)			(1,160	)			(104	)			127,770
Net income - basic		$	113,925			$	8,293			$	225,225			$	228,490
Weighted average number of common shares - basic			56,794				54,682				54,764				56,210
Basic earnings (loss) per share:
From continuing operations		$	2.01			$	0.17			$	4.11			$	1.79
From discontinued operations			0.00				(0.02	)			0.00				2.27
Total basic earnings per share		$	2.01			$	0.15			$	4.11			$	4.06
Diluted:
Income from continuing operations		$	114,029			$	9,479			$	225,392			$	100,801
Less: Dividends on unvested restricted stock, net of taxes			(20	)			(26	)			(63	)			(81	)
Add: Debenture interest, net of taxes			—				—				4,902				7,196
Income from continuing operations - diluted		$	114,009			$	9,453			$	230,231			$	107,916
(Loss) income from discontinued operations			(84	)			(1,160	)			(104	)			127,770
Net income - diluted		$	113,925			$	8,293			$	230,127			$	235,686
Weighted average number of common shares			56,794				54,682				54,764				56,210
Add: Shares for conversion of convertible debentures			—				—				4,168				6,577
Other share equivalents			207				466				227				476
Weighted average number of common shares and equiv. - diluted			57,001				55,148				59,159				63,263
Diluted earnings (loss) per share:
From continuing operations		$	2.00			$	0.17			$	3.89			$	1.71
From discontinued operations			0.00				(0.02	)			0.00				2.02
Total diluted earnings per share		$	2.00			$	0.15			$	3.89			$	3.73

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Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

		September 30, 2006			December 31, 2005
Assets:
Cash and cash equivalents		$	14,817		$	7,963
Accounts receivable, net			584,764			499,726
Other current assets			113,311			100,609
Property, plant and equipment, net			1,609,890			1,429,653
Other assets			826,245			820,758
Total Assets		$	3,149,027		$	2,858,709
Liabilities and Stockholders’ Equity:
Current portion of long-term debt		$	3,137		$	5,191
Other current liabilities			625,382			518,979
Other noncurrent liabilities			347,813			289,195
Long-term debt			464,806			637,654
Deferred income taxes			24,403			42,713
Minority interest			187,041			159,879
Stockholders’ equity			1,496,445			1,205,098
Total Liabilities and Stockholders’ Equity		$	3,149,027		$	2,858,709

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Universal Health Services, Inc.

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

For the Three Months Ended September 30, 2006 and 2005

(in thousands, except per share amounts)

(unaudited)

 

		Three months ended September 30, 2006								Three months ended September 30, 2005
Net revenues		$	1,043,457				100.0	%		$	970,772				100.0	%
Operating charges:
Salaries, wages and benefits			459,099				44.0	%			395,938				40.8	%
Other operating expenses			211,875				20.3	%			229,119				23.6	%
Supplies expense			146,944				14.1	%			117,127				12.1	%
Provision for doubtful accounts			97,901				9.4	%			102,734				10.6	%
			915,819				87.8	%			844,918				87.0	%
Operating income/margin			127,638				12.2	%			125,854				13.0	%
Lease and rental expense			16,184								14,688
Minority interests in earnings of consolidated entities			14,948								4,014
Earnings before hurricane related expenses, hurricane insurance recoveries, depreciation and amortization, interest expense, and income taxes (“EBITDA”)			96,506								107,152
Hurricane related expenses			4,172								128,895
Hurricane insurance recoveries			(134,500	)							(81,709	)
Depreciation and amortization			40,961								38,552
Interest expense, net			6,140								6,404
Income before income taxes			179,733								15,010
Provision for income taxes			65,704								5,531
Income from continuing operations			114,029								9,479
(Loss) income from discontinued operations, net of income taxes			(84	)							(1,160	)
Net income		$	113,945							$	8,319
		Three months ended September 30, 2006								Three months ended September 30, 2005
		Amount				Per Diluted Share				Amount				Per Diluted Share
Calculation of Adjusted Income from Continuing Operations
Income from continuing operations		$	114,029			$	2.00			$	9,479			$	0.17
Plus/minus adjustments:
Hurricane related expenses, net of minority interests and income taxes			2,206				0.04				78,064				1.42
Hurricane related insurance recoveries, net of minority interests and income taxes			(80,083	)			(1.41	)			(49,758	)			(0.90	)
Prior period effect of supplemental reimbursements received from certain states and contractual settlements, net of income taxes			(7,025	)			(0.12	)			(8,201	)			(0.15	)
W&M Funding			4,466				0.08				—				—
Favorable tax reserve adjustment			(2,900	)			(0.05	)			—				—
Subtotal after-tax adjustments to income from continuing operations			(83,336	)			(1.46	)			20,105				0.37
Adjusted income from continuing operations		$	30,693			$	0.54			$	29,584			$	0.54
Calculation of Adjusted Net Income
Net income		$	113,945			$	2.00			$	8,319			$	0.15
After-tax adjustments to income from continuing operations, as indicated above			(83,336	)			(1.46	)			20,105				0.37
Adjusted net income		$	30,609			$	0.54			$	28,424			$	0.52

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Universal Health Services, Inc.

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

For the Nine Months Ended September 30, 2006 and 2005

(in thousands, except per share amounts)

(unaudited)

 

		Nine months ended September 30, 2006								Nine months ended September 30, 2005
Net revenues		$	3,125,419				100.0	%		$	2,968,305				100.0	%
Operating charges:
Salaries, wages and benefits			1,336,087				42.7	%			1,210,175				40.8	%
Other operating expenses			708,932				22.7	%			694,991				23.4	%
Supplies expense			400,271				12.8	%			369,787				12.5	%
Provision for doubtful accounts			260,090				8.3	%			280,620				9.5	%
			2,705,380				86.6	%			2,555,573				86.1	%
Operating income/margin			420,039				13.4	%			412,732				13.9	%
Lease and rental expense			48,247								45,443
Minority interests in earnings of consolidated entities			37,617								19,859
Earnings before hurricane related expenses, hurricane insurance recoveries, depreciation and amortization, interest expense, and income taxes (“EBITDA”)			334,175								347,430
Hurricane related expenses			14,432								128,895
Hurricane insurance recoveries			(181,791	)							(81,709	)
Depreciation and amortization			120,360								116,236
Interest expense, net			23,362								24,530
Income before income taxes			357,812								159,478
Provision for income taxes			132,420								58,677
Income from continuing operations			225,392								100,801
(Loss) income from discontinued operations, net of income taxes			(104	)							127,770
Net income		$	225,288							$	228,571
		Nine months ended September 30, 2006								Nine months ended September 30, 2005
		Amount				Per Diluted Share				Amount				Per Diluted Share
Calculation of Adjusted Income from Continuing Operations
Income from continuing operations		$	225,392			$	3.89			$	100,801			$	1.71
Plus/minus adjustments:
Hurricane related expenses, net of minority interests and income taxes			8,139				0.14				78,064				1.23
Hurricane related insurance recoveries, net of minority interests and income taxes			(107,814	)			(1.83	)			(49,758	)			(0.79	)
Prior period effect of supplemental reimbursements received from certain states and contractual settlements, net of income taxes			(7,818	)			(0.13	)			(5,225	)			(0.08	)
W&M Funding			4,466				0.08				—				—
Favorable tax reserve adjustment			(2,900	)			(0.05	)			—				—
Subtotal after-tax adjustments to income from continuing operations			(105,927	)			(1.79	)			23,081				0.36
Adjusted income from continuing operations		$	119,465			$	2.10			$	123,882			$	2.07
Calculation of Adjusted Net Income
Net income		$	225,288			$	3.89			$	228,571			$	3.73
After-tax adjustments to income from continuing operations, as indicated above			(105,927	)			(1.79	)			23,081				0.36
Gain on divestitures, net of income taxes			—				—				(126,462	)			(2.00	)
Adjusted net income		$	119,361			$	2.10			$	125,190			$	2.09

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Universal Health Services, Inc.

Supplemental Statistical Information

(un-audited)

 

Same Facility:		% Change Quarter Ended 9/30/2006			% Change 9 months ended 9/30/2006
Acute Care Hospitals
Revenues		7.2	%		5.9	%
Adjusted Admissions		1.2	%		1.4	%
Adjusted Patient Days		4.3	%		2.6	%
Revenue Per Adjusted Admission		6.0	%		4.4	%
Revenue Per Adjusted Patient Day		2.8	%		3.2	%
Behavioral Health Hospitals
Revenues		7.5	%		7.9	%
Adjusted Admissions		3.0	%		3.3	%
Adjusted Patient Days		0.9	%		1.6	%
Revenue Per Adjusted Admission		4.4	%		4.5	%
Revenue Per Adjusted Patient Day		6.5	%		6.2	%

 

UHS Consolidated		Third Quarter Ended								Nine months Ended
		9/30/2006				9/30/2005				9/30/2006				9/30/2005
Revenues		$	1,043,457			$	970,772			$	3,125,419			$	2,968,305
EBITDA (1)			96,506				107,152				334,175				347,430
EBITDA Margin (1)			9.2	%			11.0	%			10.7	%			11.7	%
Cash Flow From Operations			60,948				126,005				250,020				356,443
Days Sales Outstanding			52				48				51				46
Capital Expenditures			80,335				62,496				233,008				171,343
Debt (net of cash)							—				453,126			$	450,019
Shareholders Equity							—				1,496,445			$	1,223,997
Debt / Total Capitalization							—				23.2	%			26.9	%
Debt / EBITDA (2)							—				1.05				1.00
Debt / Cash From Operations (2)							—				1.42				1.03
Acute Care EBITDAR Margin (3) (4)			13.0	%			13.0	%			14.0	%			14.4	%
Behavioral Health EBITDAR Margin (3) (4)			22.5	%			23.2	%			23.6	%			24.4	%

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(1)	Net of Minority Interest

(2)	Latest 4 quarters

(3)	Before Corporate overhead allocation and minority interest

(4)	Excluding discontinued operations

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UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE THREE MONTHS ENDED

SEPTEMBER 30, 2006

 

AS REPORTED:		ACUTE (1) (2)											BEHAVIORAL HEALTH
		09/30/06				09/30/05				% change			09/30/06				09/30/05				% change
Hospitals owned and leased			21				24			-12.5	%			79				45			75.6	%
Average licensed beds			5,139				5,557			-7.5	%			6,640				4,517			47.0	%
Patient days			268,537				275,148			-2.4	%			467,860				335,825			39.3	%
Average daily census			2,918.9				2,990.7			-2.4	%			5,085.4				3,650.3			39.3	%
Occupancy-licensed beds			56.8	%			53.8	%		5.5	%			76.6	%			80.8	%		-5.2	%
Admissions			60,656				62,502			-3.0	%			28,100				25,724			9.2	%
Length of stay			4.4				4.4			0.6	%			16.6				13.1			27.5	%
Inpatient revenue		$	1,813,162			$	1,752,146			3.5	%		$	416,515			$	336,676			23.7	%
Outpatient revenue			717,752				707,282			1.5	%			47,809				45,111			6.0	%
Total patient revenue			2,530,914				2,459,428			2.9	%			464,324				381,787			21.6	%
Other revenue			11,014				12,352			-10.8	%			7,546				7,122			6.0	%
Gross hospital revenue			2,541,928				2,471,780			2.8	%			471,870				388,909			21.3	%
Total deductions			1,764,296				1,708,052			3.3	%			217,700				193,839			12.3	%
Net hospital revenue		$	777,632			$	763,728			1.8	%		$	254,170			$	195,070			30.3	%

 

SAME FACILITY:		ACUTE (1) (3)									BEHAVIORAL HEALTH (4)
		09/30/06			09/30/05			% change			09/30/06			09/30/05			% change
Hospitals owned and leased		21			21			0.0	%		45			45			0.0	%
Average licensed beds		5,139			5,012			2.5	%		4,551			4,517			0.8	%
Patient days		268,557			256,358			4.8	%		339,738			335,800			1.2	%
Average daily census		2,919.1			2,786.5			4.8	%		3,692.8			3,650.0			1.2	%
Occupancy-licensed beds		56.8	%		55.6	%		2.2	%		81.1	%		80.8	%		0.4	%
Admissions		60,656			59,547			1.9	%		26,494			25,724			3.0	%
Length of stay		4.4			4.3			2.8	%		12.8			13.1			-1.8	%

---

(1)	Does not include hospitals located in France or discontinued operations.

(2)	Does not include discontinued operations. Licensed beds from our Acute care hospitals located in New Orleans are excluded in 2006.

(3)	Discontinued operations and our three acute care hospitals located in New Orleans are excluded in current and prior years.

(4)

Academy at Canyon Creek, Ascent, Boulder Creek, Casa de Lago, Cedar Ridge RTC & Hospital, Center for Change, NorthStar RTC, Northwest Academy, Wyoming Behavioral and the Keystone facilities are excluded in current and prior year. King George School is included in both current and prior years from September 1st through YTD.

---

UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2006

 

AS REPORTED:		ACUTE (1) (2)											BEHAVIORAL HEALTH
		09/30/06				09/30/05				% change			09/30/06				09/30/05				% change
Hospitals owned and leased			21				24			-12.5	%			79				45			75.6	%
Average licensed beds			5,047				5,553			-9.1	%			6,492				4,462			45.5	%
Patient days			819,711				877,216			-6.6	%			1,386,299				1,004,913			38.0	%
Average daily census			3,002.6				3,213.2			-6.6	%			5,078.0				3,681.0			38.0	%
Occupancy-licensed beds			59.5	%			57.9	%		2.8	%			78.2	%			82.5	%		-5.2	%
Admissions			184,374				193,894			-4.9	%			84,100				76,752			9.6	%
Length of stay			4.4				4.5			-1.7	%			16.5				13.1			25.9	%
Inpatient revenue		$	5,607,700			$	5,538,861			1.2	%		$	1,244,739			$	1,007,384			23.6	%
Outpatient revenue			2,147,156				2,116,715			1.4	%			154,605				145,092			6.6	%
Total patient revenue			7,754,856				7,655,576			1.3	%			1,399,344				1,152,476			21.4	%
Other revenue			37,871				39,850			-5.0	%			24,092				23,801			1.2	%
Gross hospital revenue			7,792,727				7,695,426			1.3	%			1,423,436				1,176,277			21.0	%
Total deductions			5,469,167				5,344,201			2.3	%			656,020				592,259			10.8	%
Net hospital revenue		$	2,323,560			$	2,351,225			-1.2	%		$	767,416			$	584,018			31.4	%

 

SAME FACILITY:		ACUTE (1) (3)									BEHAVIORAL HEALTH (4)
		09/30/06			09/30/05			% change			09/30/06			09/30/05			% change
Hospitals owned and leased		21			21			0.0	%		45			45			0.0	%
Average licensed beds		5,047			5,008			0.8	%		4,502			4,462			0.9	%
Patient days		819,710			800,354			2.4	%		1,022,303			1,004,886			1.7	%
Average daily census		3,002.6			2,931.7			2.4	%		3,744.7			3,680.9			1.7	%
Occupancy-licensed beds		59.5	%		58.5	%		1.6	%		83.2	%		82.5	%		0.8	%
Admissions		184,374			181,735			1.5	%		79,445			76,752			3.5	%
Length of stay		4.4			4.4			1.0	%		12.9			13.1			-1.7	%

---

(1)	Does not include hospitals located in France or discontinued operations.

(2)	Does not include discontinued operations. Licensed beds from our Acute care hospitals located in New Orleans are excluded in 2006.

(3)	Discontinued operations and our three acute care hospitals located in New Orleans are excluded in current and prior years.

(4)

Academy at Canyon Creek, Ascent, Boulder Creek, Casa de Lago, Cedar Ridge RTC & Hospital, Center for Change, NorthStar RTC, Northwest Academy, Wyoming Behavioral and the Keystone facilities are excluded in current and prior year. King George School is included in both current and prior years from September 1st through YTD.