UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 25, 2010

 

 

UNIVERSAL HEALTH SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

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)

 

 

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 February 25, 2010, Universal Health Services, Inc. issued the press release attached hereto as Exhibit 99.1.

 

Item 9.01

Financial Statements and Exhibits

(d) Exhibits. 99.1 Universal Health Services, Inc., press release, dated February 25, 2010.

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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: February 25, 2010

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Exhibit Index

 

Exhibit No.		Exhibit
99.1		Universal Health Services, Inc., press release, dated February 25, 2010.

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

CONTACT:		Steve Filton
		Chief Financial Officer				February 25, 2010
		610-768-3300

UNIVERSAL HEALTH SERVICES, INC. REPORTS

SIGNIFICANT INCREASES IN 2009 FOURTH QUARTER AND FULL YEAR

EARNINGS PER DILUTED SHARE

Consolidated Results of Operations, As Reported – Three-month periods ended December 31, 2009 and 2008:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $60.9 million, or $.62 per diluted share, during the fourth quarter of 2009 as compared to $46.5 million, or $.46 per diluted share, during the comparable prior year quarter. Net revenues increased 4% to $1.29 billion during the fourth quarter of 2009 as compared to $1.24 billion during the fourth quarter of 2008.

Consolidated Results of Operations, As Reported – Years ended December 31, 2009 and 2008:

Reported net income attributable to UHS was $260.4 million, or $2.64 per diluted share, during the year ended December 31, 2009 as compared to $199.4 million, or $1.96 per diluted share, during 2008. Net revenues increased 4% to $5.20 billion during 2009 as compared to $5.02 billion during 2008.

Consolidated Results of Operations, As Adjusted – Three-month periods ended December 31, 2009 and 2008:

After adjusting the reported results for the three-month periods ended December 31, 2009 and 2008 to neutralize the net favorable impact of the items mentioned below, and as reflected on the attached Schedules of Non-GAAP Supplemental Consolidated Statements of Income Information (“Supplemental Schedules”), our adjusted net income attributable to UHS was $56.5 million, or an increase of 33% to $.57 per diluted share, during the fourth quarter of 2009 as compared to $43.7 million, or $.43 per diluted share, during the fourth quarter of 2008. Included in the reported and adjusted net income attributable to UHS during the fourth quarter of 2009 was $3.4 million, or $.03 per diluted share, recorded in connection with the completion of a hospital construction management contract.

As indicated on the attached Supplemental Schedule, included in our reported net income attributable to UHS during the three-month period ended December 31, 2009, was a favorable impact of $4.4 million, or $.05 per diluted share, resulting from a reduction to our workers’ compensation self-insurance reserves relating primarily to years prior to 2009 based upon a reserve analysis.

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Included in our reported net income attributable to UHS during the three-month period ended December 31, 2008 was a combined net favorable impact of $2.8 million, or $.03 per diluted share, resulting from: (i) a charge recorded in connection with the government’s investigation of our South Texas Health System affiliates (which was settled during the fourth quarter of 2009); (ii) a reduction to our professional and general liability self-insured claims expense due to partial liquidation proceeds received from a bankrupt commercial insurer, and; (iii) the after-tax income from discontinued operations consisting primarily of a gain recorded on divestiture of an acute care hospital sold during the fourth quarter of 2008.

Consolidated Results of Operations, As Adjusted – Years ended December 31, 2009 and 2008:

After adjusting the reported results for the years ended December 31, 2009 and 2008 to neutralize the net favorable impact of the items mentioned below, and as reflected on the attached Supplemental Schedule, our adjusted net income attributable to UHS was $246.2 million, or an increase of 28% to $2.49 per diluted share, during 2009 as compared to $197.3 million, or $1.94 per diluted share, during 2008.

As indicated on the attached Supplemental Schedule, included in our reported net income attributable to UHS during the year ended December 31, 2009, was a combined net favorable impact of $14.2 million, or $.15 per diluted share, resulting from: (i) a favorable adjustment resulting from a reduction to our workers’ compensation self-insurance reserves relating primarily to years prior to 2009 based upon a reserve analysis; (ii) a favorable adjustment resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2009 based upon a reserve analysis, partially offset by; (iii) an unfavorable discrete tax item recorded in connection with the settlement payment made to the government during the fourth quarter of 2009 in connection with their investigation of our South Texas Health System affiliates.

Included in our reported net income attributable to UHS during the year ended December 31, 2008 was a combined net favorable impact of $2.0 million, or $.02 per diluted share, resulting from: (i) a charge recorded in connection with the government’s investigation of our South Texas Health System affiliates; (ii) a reduction to our professional and general liability self-insured claims expense due to partial liquidation proceeds received from a bankrupt commercial insurer; (iii) gains recorded on divestiture of certain real property and other investment, and; (iv) the after-tax income from discontinued operations consisting primarily of a gain recorded on divestiture of an acute care hospital sold during the fourth quarter of 2008.

“Despite the very difficult operating environment in 2009, we are very proud of the manner in which our operators effectively managed the business and increased margins in both our business segments”, said Alan B. Miller, Chief Executive Officer. “Although we’re pleased with our 2009 accomplishments, we know that 2010 will present us with continued economic challenges and we remain committed to the same level of high quality performance and results.”

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Acute Care Services – Three-month periods ended December 31, 2009 and 2008:

At our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) increased 3.1% while adjusted patient days increased 1.0% during the fourth quarter of 2009, as compared to the fourth quarter of 2008. Net revenues at these facilities increased 5.6% during the fourth quarter of 2009 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 2.5% while net revenue per adjusted patient day increased 4.6% during the fourth quarter of 2009 as compared to the comparable quarter of the prior year. On a same facility basis, the operating margin (net revenues less salaries, wages and benefits, other operating expenses, supplies expense and provision for doubtful accounts) at our acute care hospitals decreased to 13.4% during the fourth quarter of 2009 as compared to 14.0% during the fourth quarter of 2008, due to an increase in the provision for doubtful accounts. The provision for doubtful accounts at these hospitals amounted to 12.7% of net revenues during the fourth quarter of 2009 as compared to 12.2% during the fourth quarter of 2008.

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $162 million and $159 million during the three-month periods ended December 31, 2009 and 2008, respectively.

Acute Care Services – Years ended December 31, 2009 and 2008:

During the year ended December 31, 2009, on a same facility basis, adjusted admissions to our acute care facilities increased 2.2% while adjusted patient days increased 0.1%, as compared to 2008. Net revenues at our acute care facilities increased 3.6% during 2009 as compared to 2008. At these facilities, net revenue per adjusted admission increased 1.4% while net revenue per adjusted patient day increased 3.5% during 2009 as compared to 2008. On a same facility basis, the operating margin at our acute care hospitals increased to 15.2% during 2009 as compared to 14.2% during 2008.

Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $671 million and $609 million during 2009 and 2008, respectively.

Behavioral Health Care Services – Three-month periods ended December 31, 2009 and 2008:

At our behavioral health care facilities, on a same facility basis, adjusted admissions increased 4.5% and adjusted patient days increased 3.9% during the fourth quarter of 2009 as compared to the fourth quarter of 2008. Net revenues at these facilities increased 5.1% during the fourth quarter of 2009 as compared to the comparable quarter in the prior year. At these facilities, net revenue per adjusted admission increased

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0.6% while net revenue per adjusted patient day increased 1.2% during the fourth quarter of 2009 over the comparable prior year quarter. The operating margin at our behavioral health care facilities owned during both periods increased to 25.1% during the fourth quarter of 2009 as compared to 22.7% during the fourth quarter of 2008.

Behavioral Health Care Services – Years ended December 31, 2009 and 2008:

During the year ended December 31, 2009, on a same facility basis, adjusted admissions to our behavioral health care facilities increased 1.9% while adjusted patient days increased 0.9%, as compared to 2008. Net revenues at our behavioral health care facilities increased 3.9% during 2009 as compared to 2008. At these facilities, net revenue per adjusted admission increased 2.0% while net revenue per adjusted patient day increased 3.0% during 2009 as compared to 2008. On a same facility basis, the operating margin at our behavioral health facilities increased to 25.4% during 2009 as compared to 23.8% during 2008.

2010 Full Year Guidance:

Based upon the operating trends and financial results experienced during 2009, and subject to certain assumptions, provisions and adjustments, including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures, our estimated range of earnings per diluted share attributable to UHS for the year ended December 31, 2010 is $2.45 to $2.65 on projected net revenues of $5.55 billion.

This guidance range includes an aggregate reduction to our 2010 net income attributable to UHS, as compared to 2009, of $28 million, or $.18 per diluted share, due to: (i) expected reimbursement reductions pursuant to Texas Medicaid supplemental payments; (ii) expected reimbursement reductions pursuant to the Texas disproportionate share hospital fund payments; (iii) expected Texas Medicaid reimbursement reductions related to our hospitals in South Texas, and; (iv) no projected income in 2010 from our hospital construction management business.

This guidance range also excludes the impact of items, if applicable, that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other amounts that may be reflected in our 2010 financial statements that relate to prior periods.

Two-For-One Stock Split:

During the fourth quarter of 2009, we declared and paid a two-for-one stock split in the form of a 100% stock dividend which was paid on December 15, 2009 to shareholders of record as of December 1, 2009. All classes of common stock participated on a pro rata basis and all references to share quantities and earnings per share for all periods presented herein have been adjusted to reflect the two-for-one stock split.

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Conference Call Information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 26, 2010. 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 February 26, 2010 and will continue through midnight on March 11, 2010. The recording can be accessed by calling 1-800-642-1687 and entering the conference ID number 54426914. This call will also be available live over the internet at our web site at www.uhsinc.com. The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents at www.streetevents.com.

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

Universal Health Services, Inc. (“UHS”) is one of the nation’s largest hospital companies, operating 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 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, 2009), 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 operating income, operating margin, adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share and earnings before interest, taxes, depreciation and amortization (“EBITDA”), which are non-GAAP financial measures (“GAAP” is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of items that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as

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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, 2009. 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.

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Universal Health Services, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)

 

		Three months ended December 31,						Twelve months ended December 31,
		2009			2008			2009			2008
Net revenues		$	1,291,211		$	1,237,402		$	5,202,379		$	5,022,417
Operating charges:
Salaries, wages and benefits			562,931			532,667			2,204,422			2,133,181
Other operating expenses			235,016			267,021			994,923			1,044,278
Supplies expense			177,219			170,231			699,249			694,477
Provision for doubtful accounts			127,869			111,299			508,603			476,745
Depreciation and amortization			51,279			51,091			204,703			193,635
Lease and rental expense			18,035			16,861			69,947			69,882
			1,172,349			1,149,170			4,681,847			4,612,198
Income from operations			118,862			88,232			520,532			410,219
Interest expense, net			10,513			13,060			45,810			53,207
Income from continuing operations before income taxes			108,349			75,172			474,722			357,012
Provision for income taxes			39,167			28,026			170,475			123,378
Income from continuing operations			69,182			47,146			304,247			233,634
Income from discontinued operations, net of income tax expense (a)			—			6,002			—			6,436
Net income			69,182			53,148			304,247			240,070
Less: Net income attributable to noncontrolling interests			8,317			6,671			43,874			40,693
Net income attributable to UHS		$	60,865		$	46,477		$	260,373		$	199,377
Basic earnings per share attributable to UHS (b)
From continuing operations		$	0.62		$	0.40		$	2.65		$	1.90
From discontinued operations			—			0.06			—			0.06
Total basic earnings per share		$	0.62		$	0.46		$	2.65		$	1.96
Diluted earnings per share attributable to UHS (b)
From continuing operations		$	0.62		$	0.40		$	2.64		$	1.90
From discontinued operations			—			0.06			—			0.06
Total diluted earnings per share		$	0.62		$	0.46		$	2.64		$	1.96

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Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

 

		Three months ended December 31,								Twelve months ended December 31,
		2009				2008				2009				2008
(a) Calculation of income from discontinued operations, net of income tax:
Loss from discontinued operations, pre-tax			—			($	3,702	)			—			($	2,996	)
Gain on divestiture			—				13,413				—				13,413
Income from discontinued operations, pre-tax			—				9,711				—				10,417
Income tax expense			—				(3,709	)			—				(3,981	)
Income from discontinued operations, net of taxes			—			$	6,002				—			$	6,436
(b) Earnings per share calculation:
Basic and diluted:
Income from continuing operations		$	69,182			$	47,146			$	304,247			$	233,634
Less: Net income attributable to noncontrolling interest			(8,317	)			(6,671	)			(43,874	)			(40,693	)
Less: Net income attributable to unvested restricted share grants			(234	)			(143	)			(1,146	)			(719	)
Income from continuing operations attributable to UHS - basic and diluted			60,631				40,332				259,227				192,222
Income from discontinued operations, net of taxes			—				6,002				—				6,436
Net income attributable to UHS - basic and diluted		$	60,631			$	46,334			$	259,227			$	198,658
Weighted average number of common shares - basic			97,290				100,016				97,794				101,222
Basic earnings per share attributable to UHS:
From continuing operations		$	0.62			$	0.40			$	2.65			$	1.90
From discontinued operations			—				0.06				—				0.06
Total basic earnings per share		$	0.62			$	0.46			$	2.65			$	1.96
Weighted average number of common shares			97,290				100,016				97,794				101,222
Add: Other share equivalents			790				256				481				196
Weighted average number of common shares and equiv. - diluted			98,080				100,272				98,275				101,418
Diluted earnings per share attributable to UHS:
From continuing operations		$	0.62			$	0.40			$	2.64			$	1.90
From discontinued operations			—				0.06				—				0.06
Total diluted earnings per share		$	0.62			$	0.46			$	2.64			$	1.96

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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 December 31, 2009 and 2008

(in thousands, except per share amounts)

Calculation of Adjusted Net Income Attributable to UHS

 

		Three months ended December 31, 2009								Three months ended December 31, 2008
		Amount				Per Diluted Share				Amount				Per Diluted Share
Calculation of Adjusted Net Income Attributable to UHS (excluding discontinued operations)
Net income attributable to UHS		$	60,865			$	0.62			$	46,477			$	0.46
Less: Income from discontinued operations, net of income taxes			—				—				(6,002	)			(0.06	)
Adjustments to neutralize impact of:
Reduction to our workers’ compensation self-insurance reserves relating primarily to years prior to 2009, net of income taxes			(4,350	)			(0.05	)			—				—
South Texas Health System affiliates reserve, net of income taxes			—				—				9,153				0.09
Partial liquidation proceeds from a bankrupt commercial insurer, net of income taxes			—				—				(5,968	)			(0.06	)
Subtotal - after-tax adjustments			(4,350	)			(0.05	)			(2,817	)			(0.03	)
Adjusted net income attributable to UHS		$	56,515			$	0.57			$	43,660			$	0.43

Calculation of “EBITDA”

 

		Three months ended December 31, 2009						Three months ended December 31, 2008
Calculation of “EBITDA”
Net revenues		$	1,291,211		100.0	%		$	1,237,402		100.0	%
Operating charges:
Salaries, wages and benefits			562,931		43.6	%			532,667		43.0	%
Other operating expenses			235,016		18.2	%			267,021		21.6	%
Supplies expense			177,219		13.7	%			170,231		13.8	%
Provision for doubtful accounts			127,869		9.9	%			111,299		9.0	%
			1,103,035		85.4	%			1,081,218		87.4	%
Operating income/margin			188,176		14.6	%			156,184		12.6	%
Lease and rental expense			18,035						16,861
Net income attributable to noncontrolling interests			8,317						6,671
Earnings before, depreciation and amortization, interest expense, and income taxes (“EBITDA”)		$	161,824					$	132,652

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Universal Health Services, Inc.

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

For the twelve months ended December 31, 2009 and 2008

(in thousands, except per share amounts)

Calculation of Adjusted Net Income Attributable to UHS

 

		Twelve months ended December 31, 2009								Twelve months ended December 31, 2008
		Amount				Per Diluted Share				Amount				Per Diluted Share
Calculation of Adjusted Net Income Attributable to UHS (excluding discontinued operations)
Net income attributable to UHS		$	260,373			$	2.64			$	199,377			$	1.96
Less: Income from discontinued operations, net of income taxes			—				—				(6,436	)			(0.06	)
Adjustments to neutralize impact of:
Reduction to our professional and general liability self-insurance reserves relating to years prior to 2009, net of income taxes			(14,168	)			(0.14	)			—				—
Reduction to our workers’ compensation self-insurance reserves relating primarily to years prior to 2009, net of income taxes			(4,350	)			(0.05	)			—				—
Discrete tax item recorded in connection with settlement payment made to government			4,331				0.04				—				—
Gain on sale of real property and other investment, net of income taxes			—				—				(4,894	)			(0.05	)
South Texas Health System affiliates reserve, net of income taxes			—				—				15,255				0.15
Partial liquidation proceeds from a bankrupt commercial insurer, net of income taxes			—				—				(5,968	)			(0.06	)
Subtotal - after-tax adjustments			(14,187	)			(0.15	)			(2,043	)			(0.02	)
Adjusted net income attributable to UHS		$	246,186			$	2.49			$	197,334			$	1.94

Calculation of “EBITDA”

 

		Twelve months ended December 31, 2009						Twelve months ended December 31, 2008
Calculation of “EBITDA”
Net revenues		$	5,202,379		100.0	%		$	5,022,417		100.0	%
Operating charges:
Salaries, wages and benefits			2,204,422		42.4	%			2,133,181		42.5	%
Other operating expenses			994,923		19.1	%			1,044,278		20.8	%
Supplies expense			699,249		13.4	%			694,477		13.8	%
Provision for doubtful accounts			508,603		9.8	%			476,745		9.5	%
			4,407,197		84.7	%			4,348,681		86.6	%
Operating income/margin			795,182		15.3	%			673,736		13.4	%
Lease and rental expense			69,947						69,882
Net income attributable to noncontrolling interests			43,874						40,693
Earnings before, depreciation and amortization, interest expense, and income taxes (“EBITDA”)		$	681,361					$	563,161

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Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands, unaudited)

 

		December 31, 2009				December 31, 2008
Assets
Current assets:
Cash and cash equivalents		$	9,180			$	5,460
Accounts receivable, net			602,559				625,437
Supplies			84,272				76,043
Other current assets			27,270				26,375
Deferred income taxes			51,336				34,522
Current assets held for sale			21,580				21,580
Total current assets			796,197				789,417
Property and equipment			3,738,818				3,355,974
Less: accumulated depreciation			(1,423,580	)			(1,255,682	)
			2,315,238				2,100,292
Other assets:
Goodwill			732,685				732,937
Deferred charges			8,643				10,428
Other			111,700				109,388
		$	3,964,463			$	3,742,462
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt		$	2,573			$	8,708
Accounts payable and accrued liabilities			578,617				542,008
Federal and state taxes			1,627				10,409
Total current liabilities			582,817				561,125
Other noncurrent liabilities			375,580				407,652
Long-term debt			956,429				990,661
Deferred income taxes			60,091				12,439
UHS common stockholders’ equity			1,751,071				1,543,850
Noncontrolling interest			238,475				226,735
Total equity			1,989,546				1,770,585
		$	3,964,463			$	3,742,462

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Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

 

		Twelve months ended December 31,
		2009				2008
Cash Flows from Operating Activities:
Net income		$	304,247			$	240,070
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation & amortization			204,703				195,766
Gains on sales of assets and businesses, net of losses			(1,346	)			(21,464	)
Stock-based compensation expense			13,096				14,125
Provision for settlements			—				25,000
Changes in assets & liabilities, net of effects from acquisitions and dispositions:
Accounts receivable			(1,402	)			22,445
Construction management and other receivable			29,519				(20,693	)
Accrued interest			357				(123	)
Accrued and deferred income taxes			14,930				(3,483	)
Other working capital accounts			(18,828	)			3,878
Other assets and deferred charges			(1,258	)			21,003
Other			755				2,811
Accrued insurance expense, net of commercial premiums paid			44,314				73,413
Payments made in settlement of self-insurance claims			(55,782	)			(58,561	)
Net cash provided by operating activities			533,305				494,187
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals			(379,748	)			(354,537	)
Acquisition of property and businesses			(12,499	)			(23,481	)
Proceeds received from sales of assets and businesses			9,770				82,062
Settlement proceeds received related to prior year acquisitions, net of expenses			—				1,539
Investment in joint-venture			—				(1,249	)
Net cash used in investing activities			(382,477	)			(295,666	)
Cash Flows from Financing Activities:
Reduction of long-term debt			(66,499	)			(166,557	)
Additional borrowings			26,069				151,129
Financing costs			—				(975	)
Repurchase of common shares			(63,288	)			(149,404	)
Dividends paid			(16,706	)			(16,150	)
Issuance of common stock			3,290				2,354
Profit distributions to noncontrolling interests			(29,866	)			(31,087	)
Capital contributions from noncontrolling interests			121				2,333
Purchase of noncontrolling interest in majority owned business			(229	)			(1,058	)
Net cash used in financing activities			(147,108	)			(209,415	)
Increase (decrease) in cash and cash equivalents			3,720				(10,894	)
Cash and cash equivalents, beginning of period			5,460				16,354
Cash and cash equivalents, end of period		$	9,180			$	5,460
Supplemental Disclosures of Cash Flow Information:
Interest paid		$	57,018			$	62,285
Income taxes paid, net of refunds		$	155,368			$	130,379

---

Universal Health Services, Inc.

Supplemental Statistical Information

(un-audited)

 

Same Facility:		% Change Quarter Ended 12/31/2009			% Change 12 months ended 12/31/2009
Acute Care Hospitals
Revenues		5.6	%		3.6	%
Adjusted Admissions		3.1	%		2.2	%
Adjusted Patient Days		1.0	%		0.1	%
Revenue Per Adjusted Admission		2.5	%		1.4	%
Revenue Per Adjusted Patient Day		4.6	%		3.5	%
Behavioral Health Hospitals
Revenues		5.1	%		3.9	%
Adjusted Admissions		4.5	%		1.9	%
Adjusted Patient Days		3.9	%		0.9	%
Revenue Per Adjusted Admission		0.6	%		2.0	%
Revenue Per Adjusted Patient Day		1.2	%		3.0	%

 

 

 

UHS Consolidated		Fourth Quarter Ended								Twelve months Ended
		12/31/2009				12/31/2008				12/31/2009				12/31/2008
Revenues		$	1,291,211			$	1,237,402			$	5,202,379			$	5,022,417
EBITDA (1)			161,824				132,652				681,361				563,161
EBITDA Margin (1)			12.5	%			10.7	%			13.1	%			11.2	%
Cash Flow From Operations			49,030				79,424				533,305				494,187
Days Sales Outstanding			43				47				42				46
Capital Expenditures			101,093				114,657				379,918				354,537
Debt											959,002				999,369
UHS Common Stockholders’ Equity											1,751,071				1,543,850
Debt / Total Capitalization											35.4	%			39.3	%
Debt / EBITDA (2)											1.41				1.77
Debt / Cash From Operations (2)											1.80				2.02
Acute Care EBITDAR Margin (3)			14.0	%			10.8	%			15.9	%			13.4	%
Behavioral Health EBITDAR Margin (3)			25.0	%			22.7	%			25.1	%			23.3	%

 

(1)	Net of Minority Interest

(2)	Latest 4 quarters

(3)	Before Corporate overhead allocation, minority interest and prior year self insurance reserve adjustment booked in 2009

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UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE THREE MONTHS ENDED

DECEMBER 31, 2009

AS REPORTED:

 

		ACUTE (1)											BEHAVIORAL HEALTH
		12/31/09				12/31/08				% change			12/31/09				12/31/08				% change
Hospitals owned and leased			21				21			0.0	%			84				81			3.7	%
Average licensed beds			5,540				5,450			1.7	%			8,054				7,742			4.0	%
Patient days			289,469				290,196			-0.3	%			530,927				505,028			5.1	%
Average daily census			3,146.4				3,154.3			-0.3	%			5,770.9				5,489.4			5.1	%
Occupancy-licensed beds			56.8	%			57.9	%		-1.9	%			71.7	%			70.9	%		1.1	%
Admissions			66,018				64,851			1.8	%			33,614				31,325			7.3	%
Length of stay			4.4				4.5			-2.0	%			15.8				16.1			-2.0	%
Inpatient revenue		$	2,471,016			$	2,292,917			7.8	%		$	522,505			$	484,524			7.8	%
Outpatient revenue			1,018,861				906,669			12.4	%			73,255				64,741			13.2	%
Total patient revenue			3,489,877				3,199,586			9.1	%			595,760				549,265			8.5	%
Other revenue			17,254				16,837			2.5	%			8,120				8,096			0.3	%
Gross hospital revenue			3,507,131				3,216,423			9.0	%			603,880				557,361			8.3	%
Total deductions			2,557,018				2,323,146			10.1	%			272,925				247,251			10.4	%
Net hospital revenue		$	950,113			$	893,277			6.4	%		$	330,955			$	310,110			6.7	%

SAME FACILITY:

 

		ACUTE (1)									BEHAVIORAL HEALTH (2)
		12/31/09			12/31/08			% change			12/31/09			12/31/08			% change
Hospitals owned and leased		21			21			0.0	%		81			81			0.0	%
Average licensed beds		5,540			5,450			1.7	%		7,852			7,742			1.4	%
Patient days		289,469			290,196			-0.3	%		523,590			505,052			3.7	%
Average daily census		3,146.4			3,154.3			-0.3	%		5,691.2			5,489.7			3.7	%
Occupancy-licensed beds		56.8	%		57.9	%		-1.9	%		72.5	%		70.9	%		2.2	%
Admissions		66,018			64,851			1.8	%		32,646			31,325			4.2	%
Length of stay		4.4			4.5			-2.0	%		16.0			16.1			-0.5	%

 

(1)	Acute care hospitals located in New Orleans and Central Montgomery Medical Center are excluded in current and prior years.

(2)

Centennial Peaks, Coastal Behavioral, Shenandoah Valley and Springwoods Behavioral are excluded in both current and prior years. Central Florida and Summit Ridge Hospital is included from September 1st through year to date. Broad Horizons, Highlander RTC, Midwest Youth and Vista Group Homes are excluded in both current and prior years.

---

UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE TWELVE MONTHS ENDED

DECEMBER 31, 2009

AS REPORTED:

 

		ACUTE (1)											BEHAVIORAL HEALTH
		12/31/09				12/31/08				% change			12/31/09				12/31/08				% change
Hospitals owned and leased			21				21			0.0	%			84				81			3.7	%
Average licensed beds			5,484				5,452			0.6	%			7,921				7,658			3.4	%
Patient days			1,166,704				1,182,985			-1.4	%			2,105,625				2,085,114			1.0	%
Average daily census			3,196.4				3,232.2			-1.1	%			5,768.8				5,697.0			1.3	%
Occupancy-licensed beds			58.3	%			59.3	%		-1.7	%			72.8	%			74.4	%		-2.1	%
Admissions			265,244				263,536			0.6	%			136,639				129,553			5.5	%
Length of stay			4.4				4.5			-2.0	%			15.4				16.1			-4.3	%
Inpatient revenue		$	9,901,032			$	9,292,596			6.5	%		$	2,075,141			$	1,951,560			6.3	%
Outpatient revenue			4,100,427				3,655,051			12.2	%			282,473				258,022			9.5	%
Total patient revenue			14,001,459				12,947,647			8.1	%			2,357,614				2,209,582			6.7	%
Other revenue			70,879				72,578			-2.3	%			31,728				34,330			-7.6	%
Gross hospital revenue			14,072,338				13,020,225			8.1	%			2,389,342				2,243,912			6.5	%
Total deductions			10,262,666				9,350,721			9.8	%			1,074,313				992,796			8.2	%
Net hospital revenue		$	3,809,672			$	3,669,504			3.8	%		$	1,315,029			$	1,251,116			5.1	%

SAME FACILITY:

 

		ACUTE (1)									BEHAVIORAL HEALTH (2)
		12/31/09			12/31/08			% change			12/31/09			12/31/08			% change
Hospitals owned and leased		21			21			0.0	%		81			81			0.0	%
Average licensed beds		5,484			5,452			0.6	%		7,685			7,543			1.9	%
Patient days		1,166,613			1,182,985			-1.4	%		2,072,945			2,048,941			1.2	%
Average daily census		3,196.2			3,232.2			-1.1	%		5,679.3			5,598.2			1.4	%
Occupancy-licensed beds		58.3	%		59.3	%		-1.7	%		73.9	%		74.2	%		-0.4	%
Admissions		265,244			263,536			0.6	%		132,230			129,379			2.2	%
Length of stay		4.4			4.5			-2.0	%		15.7			15.8			-1.0	%

 

(1)	Acute care hospitals located in New Orleans and Central Montgomery Medical Center are excluded in current and prior years.

(2)

Centennial Peaks, Coastal Behavioral, Shenandoah Valley and Springwoods Behavioral are excluded in both current and prior years. Central Florida and Summit Ridge Hospital is included from September 1st through year to date. Broad Horizons, Highlander RTC, Midwest Youth and Vista Group Homes are excluded in both current and prior years.