DOCUMENT AND ENTITY INFORMATION	6 Months Ended
DOCUMENT AND ENTITY INFORMATION	Jun. 30, 2010	Jul. 31, 2010 Common Class A [Member]	Jul. 31, 2010 Common Class B [Member]	Jul. 31, 2010 Common Class C [Member]	Jul. 31, 2010 Common Class D [Member]
Document Type	10-Q
Amendment Flag	false
Document Fiscal Period Focus	Q2
Document Period End Date	Jun. 30, 2010
Document Fiscal Year Focus	2010
Entity Registrant Name	UNIVERSAL HEALTH SERVICES INC
Entity Central Index Key	0000352915
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		6,656,808	89,853,975	665,400	35,298

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2010	Jun. 30, 2009	Jun. 30, 2010	Jun. 30, 2009
Net revenues	$ 1,338,315	$ 1,303,640	$ 2,685,468	$ 2,616,059
Operating charges:
Salaries, wages and benefits	563,552	541,950	1,142,478	1,083,247
Other operating expenses	249,114	232,894	496,142	506,115
Supplies expense	179,926	176,411	363,742	350,378
Provision for doubtful accounts	143,764	120,670	269,154	239,648
Depreciation and amortization	54,025	51,085	107,536	102,219
Lease and rental expense	18,185	17,587	36,119	34,659
Total operating charges	1,208,566	1,140,597	2,415,171	2,316,266
Income from operations	129,749	163,043	270,297	299,793
Interest expense, net	12,277	11,879	24,654	24,517
Income before income taxes	117,472	151,164	245,643	275,276
Provision for income taxes	41,057	57,187	86,466	99,265
Net income	76,415	93,977	159,177	176,011
Less: Income attributable to noncontrolling interests	10,843	13,084	21,786	27,577
Net income attributable to UHS	$ 65,572	$ 80,893	$ 137,391	$ 148,434
Basic earnings per share attributable to UHS	$ 0.68	$ 0.82	$ 1.42	$ 1.51
Diluted earnings per share attributable to UHS	$ 0.67	$ 0.82	$ 1.4	$ 1.5
Weighted average number of common shares - basic	96,703	97,700	96,621	98,056
Add: Other share equivalents	1,351	404	1,131	202
Weighted average number of common shares and equivalents - diluted	98,054	98,104	97,752	98,258

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified

Jun. 30, 2010

Dec. 31, 2009

Assets

Cash and cash equivalents

$ 12,337

$ 9,180

^[1]

Accounts receivable, net

618,855

602,559

^[1]

Supplies

84,683

84,272

^[1]

Other current assets

38,985

27,270

^[1]

Deferred income taxes

51,109

51,336

^[1]

Current assets held for sale

16,250

21,580

^[1]

Total current assets

822,219

796,197

^[1]

Property and equipment

3,818,209

3,738,818

^[1]

Less: accumulated depreciation

(1,510,592)

(1,423,580)

^[1]

Property and equipment, net

2,307,617

2,315,238

^[1]

Other assets:

Goodwill

732,754

732,685

^[1]

Deferred charges

8,864

8,643

^[1]

Other

118,303

111,700

^[1]

Total Assets

3,989,757

3,964,463

^[1]

Liabilities and Stockholders' Equity

Current maturities of long-term debt

2,032

2,573

^[1]

Accounts payable and accrued liabilities

552,794

578,617

^[1]

Federal and state taxes

3,298

1,627

^[1]

Total current liabilities

558,124

582,817

^[1]

Other noncurrent liabilities

346,310

375,580

^[1]

Long-term debt

881,344

956,429

^[1]

Deferred income taxes

68,386

60,091

^[1]

Redeemable noncontrolling interests

205,463

197,152

^[1]

UHS common stockholders' equity

1,887,365

1,751,071

^[1]

Noncontrolling interests

42,765

41,323

^[1]

Total equity

1,930,130

1,792,394

^[1]

Total Liabilities and Stockholders' Equity

$ 3,989,757

$ 3,964,463

^[1]

[1]

Note 15

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2010

Jun. 30, 2009

Cash Flows from Operating Activities:

Net income

$ 159,177

$ 176,011

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation & amortization

107,536

102,219

Net gain on sale of assets

(1,993)

Stock-based compensation expense

8,327

6,602

Changes in assets & liabilities, net of effects from acquisitions and dispositions:

Accounts receivable

(16,523)

4,392

Construction management and other receivable

21,003

Accrued interest

(1,757)

106

Accrued and deferred income taxes

3,946

7,934

Other working capital accounts

(15,753)

(1,499)

Other assets and deferred charges

(6,870)

3,844

Other

(4,513)

(3,273)

Accrued insurance expense, net of commercial premiums paid

15,491

13,323

Payments made in settlement of self-insurance claims

(27,698)

(29,823)

Net cash provided by operating activities

219,370

300,839

Cash Flows from Investing Activities:

Property and equipment additions, net of disposals

(121,640)

(183,248)

Proceeds received from sale of assets

5,000

Acquisition of property and business

(9,006)

Net cash used in investing activities

(116,640)

(192,254)

Cash Flows from Financing Activities:

Reduction of long-term debt

(77,974)

(77,356)

Additional borrowings

170

Repurchase of common shares

(3,703)

(15,437)

Dividends paid

(9,693)

(7,890)

Issuance of common stock

3,833

1,350

Profit distributions to noncontrolling interests

(12,336)

(4,259)

Proceeds from sale of noncontrolling interest in majority owned business

300

Net cash used in financing activities

(99,573)

(103,422)

Increase in cash and cash equivalents

3,157

5,163

Cash and cash equivalents, beginning of period

9,180

^[1]

5,460

Cash and cash equivalents, end of period

12,337

10,623

Supplemental Disclosures of Cash Flow Information:

Interest paid

29,783

28,723

Income taxes paid, net of refunds

$ 79,943

$ 90,942

[1]

Note 15

General

6 Months Ended

Jun. 30, 2010

General

(1) General

This Report on Form 10-Q is for the quarterly period ended June 30, 2010. In this Quarterly Report, "we," "us," "our", "UHS" and the "Company" refer to Universal Health Services, Inc. and its subsidiaries.

You should carefully review the information contained in this Quarterly Report, and should particularly consider any risk factors that we set forth in this Quarterly Report and in other reports or documents that we file from time to time with the Securities and Exchange Commission (the "SEC"). In this Quarterly Report, we state our beliefs of future events and of our future financial performance. In some cases, you can identify those so-called "forward-looking statements" by words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of those words and other comparable words. You should be aware that those statements are only our predictions. Actual events or results may differ materially. In evaluating those statements, you should specifically consider various factors, including the risks related to healthcare industry trends and those detailed in our filings with the SEC including those set forth in our Annual Report on Form 10-K for the year ended December 31, 2009 in Item 1A Risk Factors and in Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations – Forward Looking Statements and Risk Factors. Those factors may cause our actual results to differ materially from any of our forward-looking statements.

The condensed consolidated financial statements include the accounts of our majority-owned subsidiaries and partnerships and limited liability companies controlled by us, or our subsidiaries, as managing general partner or managing member. The condensed consolidated financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the SEC and reflect all normal and recurring adjustments which, in our opinion, are necessary to fairly present results for the interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although we believe that the accompanying disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements, significant accounting policies and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2009.

- Definition

Describes an entity's accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. An entity also may describe its accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References+ Details

Relationship with Universal Health Realty Income Trust and Related Party Transactions

6 Months Ended

Jun. 30, 2010

Relationship with Universal Health Realty Income Trust and Related Party Transactions

(2) Relationship with Universal Health Realty Income Trust and Related Party Transactions

Relationship with Universal Health Realty Income Trust:

At June 30, 2010, we held approximately 6.4% of the outstanding shares of Universal Health Realty Income Trust (the "Trust"). We serve as Advisor to the Trust under an annually renewable advisory agreement pursuant to the terms of which we conduct the Trust's day-to-day affairs, provide administrative services and present investment opportunities. In addition, certain of our officers and directors are also officers and/or directors of the Trust. Management believes that it has the ability to exercise significant influence over the Trust, therefore we account for our investment in the Trust using the equity method of accounting. We earned an advisory fee from the Trust, which is included in net revenues in the accompanying condensed consolidated statements of income, of $465,000 and $389,000 during the three-month periods ended June 30, 2010 and 2009, respectively, and $903,000 and $779,000 during the six-month periods ended June 30, 2010 and 2009, respectively. Our pre-tax share of income from the Trust was $300,000 during each of the three-month periods ended June 30, 2010 and 2009 and $600,000 for each of the six-month periods ended June 30, 2010 and 2009, respectively. The carrying value of this investment was $7.2 million and $8.1 million at June 30, 2010 and December 31, 2009, respectively, and is included in other assets in the accompanying condensed consolidated balance sheets. The market value of this investment, based on the closing price of the Trust's stock on the respective dates, was $25.3 million at June 30, 2010 and $25.2 million at December 31, 2009.

Total rent expense under the operating leases on the hospital facilities with the Trust was $4.0 million and $4.1 million during the three-month periods ended June 30, 2010 and 2009, respectively, and $8.2 million for each of the six-month periods ended June 30, 2010 and 2009. In addition, certain of our subsidiaries are tenants in several medical office buildings owned by limited liability companies in which the Trust holds non-controlling ownership interests.

The table below details the renewal options and terms for each of our four hospital facilities leased from the Trust:


Hospital Name	Type of Facility	Annual Minimum Rent		End of Lease Term	Renewal Term (years)
McAllen Medical Center	Acute Care	$	5,485,000	December, 2011	20	(a)
Wellington Regional Medical Center	Acute Care	$	3,030,000	December, 2011	20	(b)
Southwest Healthcare System, Inland Valley Campus	Acute Care	$	2,648,000	December, 2011	20	(b)
The Bridgeway	Behavioral Health	$	930,000	December, 2014	10	(c)

(a)	We have four 5-year renewal options at existing lease rates (through 2031).

(b)	We have two 5-year renewal options at existing lease rates (through 2021) and two 5-year renewal options at fair market value lease rates (2022 through 2031).

(c)	We have two 5-year renewal options at fair market value lease rates (2015 through 2024).

Other Related Party Transactions:

A member of our Board of Directors and member of the Executive Committee is Of Counsel to the law firm used by us as our principal outside counsel. This Board member is also the trustee of certain trusts for the benefit of our Chief Executive Officer ("CEO") and his family. This law firm also provides personal legal services to our CEO.

- Definition

This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

Other Noncurrent liabilities and Redeemable/Noncontrolling Interests

6 Months Ended

Jun. 30, 2010

Other Noncurrent liabilities and Redeemable/Noncontrolling Interests

(3) Other Noncurrent liabilities and Redeemable/Noncontrolling Interests

Other noncurrent liabilities include the long-term portion of our professional and general liability, workers' compensation reserves, and pension liability.

In connection with certain of our acute care hospitals, outside owners hold noncontrolling, minority ownership interests of: (i) approximately 28% in our five acute care facilities located in Las Vegas, Nevada; (ii) 20% in an acute care facility located in Washington, D.C., and; (iii) approximately 11% in an acute care facility located in Laredo, Texas. The redeemable noncontrolling interests balance of $205.5 million as of June 30, 2010 and $197.2 million as of December 31, 2009 (see Note 15), and the noncontrolling interests balance of $42.8 million as of June 30, 2010 and $41.3 million as of December 31, 2009 (see Note 15), consist primarily of the third-party ownership interests in these hospitals.

In connection with the five acute care facilities located in Las Vegas, Nevada, the minority ownership interests of which are reflected as redeemable noncontrolling interests on our Condensed Consolidated Balance Sheet, the outside owners have certain "put rights", that are currently exercisable, that if exercised, require us to purchase the minority member's interests. The put rights are exercisable upon the occurrence of: (i) certain specified financial conditions falling below established thresholds; (ii) breach of the management contract by the managing member (a subsidiary of ours), or; (iii) if the minority member's ownership percentage is reduced to less than certain thresholds.

Long-term debt

6 Months Ended

Jun. 30, 2010

Long-term debt

(4) Long-term debt

We have an $800 million, unsecured non-amortizing revolving credit agreement, as amended ("Credit Agreement") which is scheduled to expire in July, 2011. The Credit Agreement includes a $100 million sub-limit for letters of credit. The interest rate on the borrowings is determined, at our option, as either: (i) the one, two, three or six month London Inter-Bank Offer Rate ("LIBOR") plus a spread of 0.33% to 0.575%; (ii) at the higher of the Agent's prime rate or the federal funds rate plus 0.50%, or; (iii) a competitive bid rate. A facility fee ranging from 0.07% to 0.175% is required on the total commitment. The applicable margins over LIBOR and the facility fee are based upon our credit ratings from Standard & Poor's Ratings Services and Moody's Investors Service, Inc. At June 30, 2010, the applicable margin over the LIBOR rate was 0.50% and the facility fee was 0.125%. There are no compensating balance requirements. As of June 30, 2010, we had $166 million of borrowings outstanding under our revolving credit agreement and $571 million of available borrowing capacity, net of $63 million of outstanding letters of credit.

In August, 2007, we entered into a $200 million accounts receivable securitization program ("Securitization") with a group of conduit lenders and liquidity banks. The patient-related accounts receivable ("Receivables") for substantially all of our acute care hospitals serve as collateral for the outstanding borrowings. The interest rate on the borrowings is based on the commercial paper rate plus a spread of .35%. The initial term of this Securitization was 364 days and the term can be extended for incremental 364 day periods upon mutual agreement of the parties. The facility was extended for a third 364-day term in August, 2009 and will mature in August, 2010. We have accounted for this Securitization as borrowings. We maintain effective control over the Receivables since, pursuant to the terms of the Securitization, the Receivables are sold from certain of our subsidiaries to special purpose entities that are wholly-owned by us. The wholly-owned special purpose entities use the Receivables to collateralize the loans obtained from the group of third-party conduit lenders and liquidity banks. The group of third-party conduit lenders and liquidity banks do not have recourse to us beyond the assets of the wholly-owned special purpose entities that securitize the loans. As of June 30, 2010, we had $100 million of borrowings outstanding pursuant to this program and $100 million of available borrowing capacity. The outstanding borrowings pursuant to the Securitization program are classified as long-term on our balance sheet since they can be refinanced through available borrowings under the terms of our Credit Agreement, which is scheduled to expire in July of 2011.

In June, 2006, we issued $250 million of senior notes (the "Notes") which have a 7.125% coupon rate and mature on June 30, 2016. Interest on the Notes is payable semiannually in arrears on June 30 and December 30 of each year. In June, 2008, we issued an additional $150 million of Notes which formed a single series with the original Notes issued in June, 2006. Other than their date of issuance and initial price to the public, the terms of the Notes issued in June, 2008 are identical to, and trade interchangeably with, the Notes which were originally issued in June, 2006.

During 2001, we issued $200 million of senior notes which have a 6.75% coupon rate and which mature on November 15, 2011. The interest on the senior notes is paid semiannually in arrears on May 15 and November 15 of each year. The senior notes can be redeemed in whole at any time and in part from time to time.

The carrying amount and fair value of our long-term debt was $881 million and $901 million at June 30, 2010, respectively. The fair value of our debt was computed based upon quotes received from financial institutions.

Our revolving credit agreement includes a material adverse change clause that must be represented at each draw. The facility also requires compliance with maximum debt to capitalization and minimum fixed charge coverage ratios. We are in compliance with all required covenants as of June 30, 2010. We also believe that we would remain in compliance if the full amount of our commitment was borrowed.

Our $200 million Securitization facility, under which we had $100 million of outstanding borrowings at June 30, 2010, matures in August, 2010. Upon maturity, or shortly thereafter, we plan to replace the existing Securitization with a new $250 million accounts receivable securitization program. Our existing $800 million Credit Agreement, under which we had $166 million of outstanding borrowings at June 30, 2010, matures on July 28, 2011. In May, 2010, we announced our intent to acquire, through a merger, Psychiatric Solutions, Inc. ("Merger"). In association with the Merger, we have obtained a debt financing commitment for a total of $3.45 billion consisting of an $800 million revolving credit agreement, a $1.05 billion term loan A and a $1.6 billion term loan B (collectively "The Credit Facilities"). The Credit Facilities will become effective upon closing of the Merger which is expected to occur in the fourth quarter of 2010. Should the Merger be completed and the Credit Facilities become effective, our existing $800 million Credit Agreement, which is scheduled to mature on July 28, 2011, will be replaced by The Credit Facilities. We also have $200 million of 6.75% senior notes which are scheduled to mature November 15, 2011. Although our refinancing plans for these bonds have not yet been determined, we believe we will have sufficient capacity under The Credit Facilities to repay the $200 million of 6.75% senior notes upon their maturity in November, 2011.

Effective January 1, 2009, we adopted the authoritative guidance for disclosures in connection with derivative instruments and hedging activities which requires additional disclosure about a company's derivative activities, but does not require any new accounting related to derivative activities. During the fourth quarter of 2007, we entered into two interest rate swaps whereby we pay a fixed rate on a total notional principal amount of $150 million and receive 3-month LIBOR. Each of the two interest rate swaps has a notional principal amount of $75 million. The fixed rate payable on the first interest rate swap is 4.7625% and matures on October 5, 2012. The fixed rate payable on the second interest rate swap is 4.865% and the maturity date is October, 17, 2011. The notional amount of the second interest rate swap reduces to $50 million on October 18, 2010. We measure our interest rate swaps at fair value on a recurring basis. The fair value of our interest rate swaps is based primarily on quotes from banks. We consider those inputs to be "level 3" in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with derivative instruments and hedging activities. The fair value of our interest rate swaps was a liability of $10.8 million at June 30, 2010 and $11.5 million at December 31, 2009 which are included in other long-term liabilities on the accompanying balance sheet.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2010

Commitments and Contingencies

(5) Commitments and Contingencies

Professional and General Liability Claims and Property Insurance

Effective January 1, 2008, most of our subsidiaries became self-insured for malpractice exposure up to $10 million per occurrence, as compared to $20 million per occurrence in the prior year. We purchased several excess policies through commercial insurance carriers which provide for coverage in excess of $10 million up to $195 million per occurrence and in the aggregate. However, we are liable for 10% of the claims paid pursuant to the commercially insured coverage in excess of $10 million up to $60 million per occurrence and in the aggregate.

Our estimated liability for self-insured professional and general liability claims is based on a number of factors including, among other things, the number of asserted claims and reported incidents, estimates of losses for these claims based on recent and historical settlement amounts, estimate of incurred but not reported claims based on historical experience, and estimates of amounts recoverable under our commercial insurance policies. While we continuously monitor these factors, our ultimate liability for professional and general liability claims could change materially from our current estimates due to inherent uncertainties involved in making this estimate. Given our significant self-insured exposure for professional and general liability claims, there can be no assurance that a sharp increase in claims asserted against us will not have a material adverse effect on our future results of operations.

As of June 30, 2010, the total accrual for our professional and general liability claims was $256 million, of which $46 million is included in accounts payable and accrued liabilities. As of December 31, 2009, the total accrual for our professional and general liability claims was $266 million, of which $46 million is included in other current liabilities.

During the second quarters of 2010 and 2009, based upon reserve analyses, we recorded reductions to our professional and general liability self-insurance reserves relating to prior years. These favorable changes in our estimated future claims payments, amounting to $16 million during the second quarter of 2010 and $23 million during the second quarter of 2009, were partially due to the favorable impact of medical malpractice tort reform experienced in several states in which we operate as well as a decrease in claims related to certain higher risk specialties (such as obstetrical) due to a company-wide patient safety initiative undertaken during the last few years.

Effective April 1, 2009, we have commercial property insurance policies covering catastrophic losses resulting from windstorm damage up to a $1 billion policy limit per occurrence. Losses resulting from non-named windstorms are subject to a $250,000 deductible. Losses resulting from named windstorms are subject to deductibles between 3% and 5% (based upon the location of the facility) of the declared total insurable value of the property. In addition, we have commercial property insurance policies covering catastrophic losses resulting from earthquake and flood damage, each subject to aggregated loss limits (as opposed to per occurrence losses). Our earthquake limit is $250 million, except for facilities in Alaska, California and the New Madrid (which includes certain counties located in Arkansas, Illinois, Kentucky, Mississippi, Missouri and Tennessee) and Pacific Northwest Seismic Zones which are subject to a $100 million limitation. The earthquake limit in Puerto Rico is $25 million. Earthquake losses are subject to a $250,000 deductible for our facilities located in all states except California, Alaska, Washington, Puerto Rico and the New Madrid where earthquake losses are subject to deductibles ranging from 1% to 5% (based upon the location of the facility) of the declared total insurable value of the property. Flood losses have either a $250,000 or $500,000 deductible, based upon the location of the facility. Due to an increase in property losses experienced nationwide in recent years, the cost of commercial property insurance has increased. As a result, catastrophic coverage for earthquake and flood has been limited to annual aggregate losses (as opposed to per occurrence losses). Given these insurance market conditions, there can be no assurance that a continuation of these unfavorable trends, or a sharp increase in uninsured property losses sustained by us, will not have a material adverse effect on our future results of operations.

Other

As of June 30, 2010 we were party to certain off balance sheet arrangements consisting of standby letters of credit and surety bonds. Our outstanding letters of credit and surety bonds as of June 30, 2010 totaled $80 million consisting of: (i) $64 million related to our self-insurance programs; (ii) $14 million related primarily to pending appeals of legal judgments (including judgments related to professional and generally liability claims), and; (iii) $2 million of other debt guarantees related to public utilities and entities in which we own a minority interest.

Legal Proceedings

We are subject to claims and suits in the ordinary course of business, including those arising from care and treatment afforded by our hospitals and are party to litigation, as outlined below.

False Claims Act Case Against Virginia Behavioral Health Facilities:

In late 2007 and again on July 3, 2008 and January 27, 2009, the Office of Inspector General for the Department of Health and Human Services ("OIG") issued subpoenas to two of our facilities, Marion Youth Center and Mountain Youth Academy, seeking documents related to the treatment of Medicaid beneficiaries at the facilities. It was our understanding at that time that the OIG was investigating whether claims for reimbursement submitted by those facilities to the Virginia Medicaid program were supported by adequate documentation of the services provided which could be considered to be a basis for a false claims act violation. On August 4, 2008, the Office of the Attorney General for the Commonwealth of Virginia issued a subpoena to Keystone Newport News, another of our facilities. It was our understanding at that time that the Office of Attorney General was investigating whether Keystone Newport News complied with various Virginia laws and regulations, including documentation requirements.

In response to these subpoenas, we produced the requested documents on a rolling basis and we cooperated with the investigations in all respects. We also met with representatives of the OIG, the Virginia Attorney General, the United States Attorney for the Western District of Virginia, and the United States Department of Justice Civil Division on several occasions to discuss a possible resolution of this matter. However, the parties were not able to reach a resolution.

Consequently, on November 4, 2009, the United States Department of Justice and the Virginia Attorney General intervened in a qui tam case that had been filed under seal in 2007 against Universal Health Services, Inc. ("UHS"), and Keystone Marion, LLC and Keystone Education and Youth Center ("Keystone"). The Department of Justice and the Commonwealth of Virginia filed and served their complaint which, at present, relates solely to the Marion Youth Center. The complaint alleges causes of action pursuant to the federal and state false claims acts, Virginia fraud statutes, and unjust enrichment. The former employees filed a separate amended complaint, alleging employment and retaliation claims as well as false claim act violations. On April 30, 2010, UHS and Keystone filed separate motions to dismiss the government's claims in their entirety. Keystone also filed a separate motion to dismiss the relators' employment claims. The court recently ruled on the motions granting them in part and denying them in part. The court has allowed the government's False Claim Act case to proceed and parts of the relators' employment related claims. We have established a reserve in connection with this matter which did not have a material impact on our financial statements. We will continue to defend ourselves vigorously against the government's and former employees' allegations. There can be no assurance that we will prevail in the litigation or that the case will be limited to the Marion Youth Center.

Ethridge v. Universal Health Services et. al:

In June, 2008, we and one of our acute care facilities, Lancaster Community Hospital, were named as defendants in a wage and hour lawsuit in Los Angeles County Superior Court. This is a purported class action lawsuit alleging that the hospital failed to provide sufficient meal and break periods to certain employees. In June, 2010 a settlement was reached with the attorneys for the class representative for an amount that will not materially affect our consolidated financial position or results of operations. The settlement is subject to court approval which has not yet occurred.

Devore, et. al. v. Keystone Education and Youth Services, LLC:

Alicante School in California was acquired by a subsidiary of ours in October, 2005. Prior to our acquisition, two former employees of the facility filed a false claim act qui tam action and a gender discrimination/whistleblower claim in a California state court. The plaintiffs' allege that the Alicante School improperly billed subdivisions of the state of California based upon services provided at the school and that the plaintiffs were discriminated against based upon their gender and as a result of their objection to these practices. In June 2008, we entered into an agreement with the former owners of the facility whereby they agreed to defend the case, indemnify us and hold us harmless for any damages that may result from this case. The former owners of the facility have been funding the legal defense of this case since that time. While we may be required to initially fund any settlement or judgment resulting from this matter, we intend to pursue collection of any such amounts from the former owners of the facility pursuant to the June, 2008 indemnification agreement.

Other Matters

The healthcare industry is subject to numerous laws and regulations which include, among other things, matters such as government healthcare participation requirements, various licensure and accreditations, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Government action has increased with respect to investigations and/or allegations concerning possible violations of fraud and abuse and false claims statutes and/or regulations by healthcare providers. Providers that are found to have violated these laws and regulations may be excluded from participating in government healthcare programs, subjected to potential licensure revocation, subjected to fines or penalties or required to repay amounts received from the government for previously billed patient services. We monitor all aspects of our business and have developed a comprehensive ethics and compliance program that is designed to meet or exceed applicable federal guidelines and industry standards. Because the law in this area is complex and constantly evolving, governmental investigation or litigation may result in interpretations that are inconsistent with industry practices, including ours. Although we believe our policies, procedures and practices comply with governmental regulations, there is no assurance that we will not be faced with sanctions, fines or penalties in connection with such inquiries or actions, including with respect to the investigations and other matters discussed herein. Even if we were to ultimately prevail, such inquiries and/or actions could have a material adverse effect on us.

Southwest Healthcare System:

During the third quarter of 2009, Southwest Healthcare System ("SWHCS"), which operates Rancho Springs Medical Center and Inland Valley Regional Medical Center in Riverside County, California, entered into an agreement with the Center for Medicare and Medicaid Services ("CMS"). The agreement required SWHCS to engage an independent quality monitor to assist SWHCS in meeting all CMS' conditions of participation. Further, the agreement provided that, during the last 60 days of the agreement, CMS would conduct a full Medicare certification survey. That survey took place the week of January 11, 2010.

In April, 2010, SWHCS received notification from CMS that it intended to effectuate the termination of SWHCS's Medicare provider agreement effective June 1, 2010. At that time, SWHCS commenced discussions with officials from CMS regarding an agreement in an effort to resolve the provider agreement termination action. In May, 2010, SWHCS entered into an agreement with CMS which abated the termination action scheduled for June 1, 2010. The agreement is up to one year in duration and requires SWHCS to engage independent experts in various disciplines to analyze and develop implementation plans for SWHCS to meet the Medicare conditions of participation. At the conclusion of the agreement, CMS will conduct a full certification survey to determine if SWHCS has achieved substantial compliance with the Medicare conditions of participation. During the term of the agreement, SWHCS will remain eligible to receive reimbursements from Medicare for services rendered to Medicare beneficiaries.

Also in April, 2010, SWHCS received notification from the California Department of Public Health ("CDPH") indicating that it planned to initiate a process to revoke SWHCS's hospital license. In May, 2010, SWHCS received the formal document related to the revocation action. CDPH has previously indicated its willingness to rescind this revocation should SWHCS demonstrate its ability to meet all state licensing requirements. SWHCS is currently engaged in pursuing a resolution of this action with CDPH, however, there can be no assurance it will be able to do so. Should SWHCS fail to reach an agreement with CDPH, SWHCS will appeal CDPH's revocation action and SWHCS would remain operational during the appeal process.

Rancho Springs Medical Center and Inland Valley Medical Center remain fully committed to providing high-quality healthcare to their patients and the communities they serve. We therefore intend to work expeditiously and collaboratively with both CMS and CDPH in an effort to resolve these matters, although there can be no assurance we will be able to do so. Failure to resolve these matters could have a material adverse effect on us. For the year ended December 31, 2009 and the six months ended June 30, 2010, after deducting an allocation for corporate overhead expense, SWHCS generated approximately 4% and 3%, respectively, of our income from operations after income attributable to noncontrolling interest.

General:

Currently, and from time to time, some of our other facilities are subjected to inquiries and/or actions and receive notices of potential non-compliance of laws and regulations from various federal and state agencies. If one of our facilities is found to have violated these laws and regulations, the facility may be excluded from participating in government healthcare programs, subjected to potential licensure revocation, subjected to fines or penalties or required to repay amounts received from the government for previously billed patient services. We do not believe that, other than as described above, any such existing action would materially affect our consolidated financial position or results of operations.

In addition, various suits and claims arising against us in the ordinary course of business are pending. In the opinion of management, the outcome of such claims and litigation will not materially affect our consolidated financial position or results of operations.

Segment Reporting

6 Months Ended

Jun. 30, 2010

Segment Reporting

(6) Segment Reporting

Our reportable operating segments consist of acute care hospital services and behavioral health care services. The "Other" column below includes centralized services including information services, purchasing, reimbursement, accounting, taxation, legal, advertising, design and construction and patient accounting as well as the operating results for our other operating entities including outpatient surgery and radiation centers. The chief operating decision making group for our acute care hospital services and behavioral health care services is comprised of the Chief Executive Officer, the President and the Presidents of each operating segment. The Presidents of each operating segment also manage the profitability of each respective segment's various facilities. The operating segments are managed separately because each operating segment represents a business unit that offers different types of healthcare services or operates in different healthcare environments. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2009.


	Three months ended June 30, 2010
	Acute Care Hospital Services		Behavioral Health Services		Other			Total Consolidated
	(Amounts in thousands)
Gross inpatient revenues	$	2,624,502	$	554,141		—		$	3,178,643
Gross outpatient revenues	$	1,171,634	$	81,987	$	12,083		$	1,265,704
Total net revenues	$	974,010	$	357,008	$	7,297		$	1,338,315
Income/(loss) before income taxes	$	94,744	$	87,116	($	64,388	)	$	117,472
Total assets as of 6/30/10	$	2,760,944	$	1,002,427	$	226,386		$	3,989,757

	Six months ended June 30, 2010
	Acute Care Hospital Services		Behavioral Health Services		Other			Total Consolidated
	(Amounts in thousands)
Gross inpatient revenues	$	5,407,933	$	1,098,922		—		$	6,506,855
Gross outpatient revenues	$	2,288,559	$	159,964	$	23,645		$	2,472,168
Total net revenues	$	1,963,321	$	706,190	$	15,957		$	2,685,468
Income/(loss) before income taxes	$	196,648	$	163,973	($	114,978	)	$	245,643
Total assets as of 6/30/10	$	2,760,944	$	1,002,427	$	226,386		$	3,989,757


	Three months ended June 30, 2009
	Acute Care Hospital Services		Behavioral Health Services		Other			Total Consolidated
	(Amounts in thousands)
Gross inpatient revenues	$	2,469,774	$	524,246		—		$	2,994,020
Gross outpatient revenues	$	1,047,095	$	72,513	$	16,470		$	1,136,078
Total net revenues	$	952,836	$	332,589	$	18,215		$	1,303,640
Income/(loss) before income taxes	$	125,775	$	76,133	($	50,744	)	$	151,164
Total assets as of 6/30/09	$	2,634,643	$	986,865	$	215,368		$	3,836,876

	Six months ended June 30, 2009
	Acute Care Hospital Services		Behavioral Health Services		Other			Total Consolidated
	(Amounts in thousands)
Gross inpatient revenues	$	5,049,913	$	1,027,927		—		$	6,077,840
Gross outpatient revenues	$	2,042,794	$	140,641	$	32,383		$	2,215,818
Total net revenues	$	1,912,685	$	654,742	$	48,632		$	2,616,059
Income/(loss) before income taxes	$	239,488	$	142,297	($	106,509	)	$	275,276
Total assets as of 6/30/09	$	2,634,643	$	986,865	$	215,368		$	3,836,876

Earnings Per Share Data ("EPS") and Stock Based Compensation

6 Months Ended

Jun. 30, 2010

Earnings Per Share Data ("EPS") and Stock Based Compensation

(7) Earnings Per Share Data ("EPS") and Stock Based Compensation

Basic earnings per share are based on the weighted average number of common shares outstanding during the period. Diluted earnings per share are based on the weighted average number of common shares outstanding during the period adjusted to give effect to common stock equivalents.

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):


	Three months ended June 30,						Six months ended June 30,
	(amounts in thousands)
	2010			2009			2010			2009
Basic and Diluted:
Net income attributable to UHS	$	65,572		$	80,893		$	137,391		$	148,434
Less: Net income attributable to unvested restricted share grants		(278	)		(381	)		(593	)		(695	)

Net income attributable to UHS – basic and diluted	$	65,294		$	80,512		$	136,798		$	147,739

Weighted average number of common shares – basic		96,703			97,700			96,621			98,056
Net effect of dilutive stock options and grants based on the treasury stock method		1,351			404			1,131			202

Weighted average number of common shares and equivalents – diluted		98,054			98,104			97,752			98,258

Earnings per basic share attributable to UHS	$	0.68		$	0.82		$	1.42		$	1.51

Earnings per diluted share attributable to UHS	$	0.67		$	0.82		$	1.40		$	1.50

Stock-Based Compensation: During the three-month periods ended June 30, 2010 and 2009, compensation cost of $3.4 million ($2.1 million after-tax) and $2.4 million ($1.5 million after-tax), respectively, was recognized related to outstanding stock options. During the six-month periods ended June 30, 2010 and 2009, compensation cost of $6.8 million ($4.2 million after-tax) and $5.2 million ($3.2 million after-tax), respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended June 30, 2010 and 2009, compensation cost of $867,000 ($538,000 after-tax) and $786,000 ($488,000 after-tax), respectively, was recognized related to restricted stock. During the six-month periods ended June 30, 2010 and 2009, compensation cost of $1.6 million ($971,000 after-tax) and $1.4 million ($888,000 after-tax) was recognized related to restricted stock. As of June 30, 2010 there was $32.8 million of unrecognized compensation cost related to unvested options and restricted stock which is expected to be recognized over the remaining weighted average vesting period of 2.9 years. There were 94,000 stock options granted during the first six months of 2010 with a weighted-average grant date fair value of $7.84 per share. There were 49,472 restricted stock shares granted during the first six months of 2010, with a weighted-average grant date fair value of $30.32 per share.

Comprehensive Income

6 Months Ended

Jun. 30, 2010

Comprehensive Income

(8) Comprehensive Income

Comprehensive income (loss) is comprised of net income, changes in unrealized gains or losses on derivative financial instruments and foreign currency translation adjustments.


	Three months ended June 30,						Six months ended June 30,
(amounts in thousands)	2010			2009			2010			2009
Net income attributable to UHS	$	65,572		$	80,893		$	137,391		$	148,434
Other comprehensive income (loss):
Amortization of terminated hedge, net of taxes		(54	)		(54	)		(108	)		(108	)
Unrealized derivative gains on cash flow hedges, net of taxes		390			1,428			468			1,114

Comprehensive income attributable to UHS	$	65,908		$	82,267		$	137,751		$	149,440

During the three and six-month periods ended June 30, 2010 and 2009, none of the components of other comprehensive income related to noncontrolling interests.

- Definition

This label may include the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains and losses on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains and losses on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain or loss and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References+ Details

Dispositions and acquisitions of assets and businesses and assets held for sale

6 Months Ended

Jun. 30, 2010

Dispositions and acquisitions of assets and businesses and assets held for sale

(9) Dispositions and acquisitions of assets and businesses and assets held for sale

Agreement to Acquire Psychiatric Solutions, Inc. ("PSI"):

In May, 2010, we reached a definitive agreement whereby we will acquire PSI for a price of $33.75 per share in cash, or approximately $2.0 billion. Including the assumption of approximately $1.1 billion in PSI net debt, the total transaction consideration is approximately $3.1 billion. The transaction has fully committed debt financing to be provided by JPMorgan Chase Bank, N.A. and Deutsche Bank AG. We expect to complete the transaction in the fourth quarter of 2010, subject to customary closing conditions, including regulatory approvals and clearance under the Hart-Scott-Rodino Act, as well as approval by PSI's shareholders. During the second quarter of 2010, we incurred approximately $18 million of acquisition related costs which are included in other operating expenses on our Condensed Consolidated Statements of Income.

Six-month period ended June 30, 2010:

Acquisitions:

During the first quarter of 2010, we acquired substantially all of the assets of an outpatient surgery center located in Florida in which we previously held a 20% minority ownership interest. The purchase price consideration in connection with this transaction consisted of acquisition of the net assets less the assumption of the outstanding liabilities and third-party debt.

Divestitures and assets held for sale:

During the first six months of 2010, we received cash proceeds of $5.0 million for sale of: (i) our minority ownership interest in a healthcare technology company (during the first quarter), and; (ii) for sale of a portion of our ownership interest in an outpatient surgery center located in Texas (during the second quarter).

In August 2005, our Methodist Hospital located in New Orleans, Louisiana, was severely damaged and closed as a result of Hurricane Katrina. Since that time, the facility has remained closed and non-operational. In July 2010, we executed a letter of intent, which is contingent upon certain conditions, to sell the real property of Methodist Hospital to the City of New Orleans for cash proceeds of $16.25 million. We expect to complete this transaction during the third quarter of 2010. The assets of this facility are classified as assets held for sale in the accompanying Condensed Consolidated Balance Sheet as of June 30, 2010.

The pre-tax gain, net of losses, resulting from the above-mentioned transactions did not have a material impact on our financial statements for the three or six-month periods ended June 30, 2010.

Six-month period ended June 30, 2009:

Acquisitions:

During the second quarter of 2009, we spent $9 million to acquire a 72-bed behavioral health facility located in Louisville, Colorado.

Divestitures:

There were no divestitures during the first six months of 2009.

Pension Plan

6 Months Ended

Jun. 30, 2010

Pension Plan

(11) Pension Plan

The following table shows the components of net periodic pension cost for our defined benefit pension plan for the three and six-month periods ended June 30, 2010 and 2009 (amounts in thousands):


	Three months ended June 30,						Six months ended June 30,
	2010			2009			2010			2009
Service cost	$	154		$	298		$	570		$	596
Interest cost		669			1,209			2,479			2,418
Expected return on assets		(695	)		(982	)		(2,576	)		(1,964	)
Recognized actuarial loss		342			1,169			1,269			2,338

Net periodic pension cost	$	470		$	1,694		$	1,742		$	3,388

During the six months ended June 30, 2010, we made contributions totaling $6.3 million to our pension plan.

- Definition

Description containing the entire pension and other postretirement benefits disclosure as a single block of text.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 158

-Paragraph 7, 21, 22

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5, 6, 7, 8

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 8

-Subparagraph m

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 106

-Paragraph 518

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 87

-Paragraph 264

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph b

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph a

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph h

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph q

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Staff Position (FSP)

-Number FAS106-2

-Paragraph 20, 21, 22

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Emerging Issues Task Force (EITF)

-Number 03-2

-Paragraph 8

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Principles Board Opinion (APB)

-Number 30

-Paragraph 26

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Implementation Guide (Q and A)

-Number FAS88

-Paragraph 63

+ Details

Income Taxes

6 Months Ended

Jun. 30, 2010

Income Taxes

(12) Income Taxes

As of January 1, 2010, our unrecognized tax benefits were approximately $6 million. The amount, if recognized, that would affect the effective tax rate is approximately $4 million. During the quarter ended June 30, 2010, changes to the estimated liabilities for uncertain tax positions (including accrued interest) relating to tax positions taken during prior and current periods did not have a material impact on our financial statements.

We recognize accrued interest and penalties associated with uncertain tax positions as part of the tax provision. As of June 30, 2010, we have approximately $1 million of accrued interest and penalties. The U.S. federal statute of limitations remains open for the 2006 and subsequent years. Foreign and U.S. state and local jurisdictions have statutes of limitations generally ranging from 3 to 4 years. The statute of limitations on certain jurisdictions could expire within the next twelve months.

We operate in multiple jurisdictions with varying tax laws. We are subject to audits by any of these taxing authorities. Our tax returns have been examined by the Internal Revenue Service ("IRS") through the year ended December 31, 2006. We believe that adequate accruals have been provided for federal, foreign and state taxes.

Recent Accounting Standards

6 Months Ended

Jun. 30, 2010

Recent Accounting Standards

(13) Recent Accounting Standards

Transfers of Financial Assets: In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for transfers of financial assets. This amendment requires greater transparency and additional disclosures for transfers of financial assets and the entity's continuing involvement with them and changes the requirements for derecognizing financial assets. In addition, this amendment eliminates the concept of a qualifying special-purpose entity ("QSPE"). This amendment became effective for us on January 1, 2010. This amendment did not have a material impact on our consolidated financial position or results of operations.

Consolidation of Variable Interest Entities: In June 2009, the FASB also issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities ("VIE"s). The elimination of the concept of a QSPE, as discussed above, removes the exception from applying the consolidation guidance within this amendment. This amendment requires an enterprise to perform a qualitative analysis when determining whether or not it must consolidate a VIE. The amendment also requires an enterprise to continuously reassess whether it must consolidate a VIE. Additionally, the amendment requires enhanced disclosures about an enterprise's involvement with VIEs and any significant change in risk exposure due to that involvement, as well as how its involvement with VIEs impacts the enterprise's financial statements. Finally, an enterprise will be required to disclose significant judgments and assumptions used to determine whether or not to consolidate a VIE. This amendment became effective for us on January 1, 2010. This amendment did not have a material impact on our consolidated financial position or results of operations.

Stockholders' Equity

6 Months Ended

Jun. 30, 2010

Stockholders' Equity

(14)

Stockholders' Equity

The following schedule presents the reconciliation of the carrying amount of total equity, equity attributable to UHS Common Stockholders and equity attributable to the noncontrolling interests for the six-month period ended June 30, 2010 (in thousands):


				Universal Health Services, Inc. Common Stockholders' Equity (Note 15)
	Redeemable Noncontrolling			Classes of Common Stock								Cumulative Dividends			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			UHS Common Stockholders' Equity			Noncontrolling Interest (b)			Total Equity
	Redeemable Noncontrolling			A		B			C		D	Cumulative Dividends			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			UHS Common Stockholders' Equity			Noncontrolling Interest (b)			Total Equity
Balance, January 1, 2010 (As Revised)	$	197,152		$	67	$	896		$	7	—	$	(108,627	)	$	1,879,981		$	(21,253	)	$	1,751,071		$	41,323		$	1,792,394
Common Stock (a)
Issued/(converted) including tax benefits from exercise of stock options		—			—		2			—	—		—			1,448			—			1,450			—			1,450
Repurchased		—			—		(1	)		—	—		—			(2,156	)		—			(2,157	)		—			(2,157	)
Restricted share-based compensation expense		—			—		—			—	—		—			877			—			877			—			877
Dividends paid		—			—		—			—	—		(4,834	)		—			—			(4,834	)		—			(4,834	)
Stock option expense		—			—		—			—	—		—			3,505			—			3,505			—			3,505
Profit distributions to noncontrolling interests		(775	)																						(3,844	)		(3,844	)
Comprehensive income:
Net income		7,848			—		—			—	—		—			71,819			—			71,819			3,095			74,914
Amortization of terminated hedge (net of income tax effect of $30)		—			—		—			—	—		—			—			(54	)		(54	)		—			(54	)
Unrealized derivative losses on cash flow hedges (net of income tax effect of $47)		—			—		—			—	—		—			—			78			78			—			78

Subtotal - comprehensive income		7,848																	24			71,843			3,095			74,938

Balance, March 31, 2010 (As Revised)	$	204,225		$	67	$	897		$	7	—	$	(113,461	)	$	1,955,474		$	(21,229	)	$	1,821,755		$	40,574		$	1,862,329
Common Stock (a)
Issued/(converted) including tax benefits from exercise of stock options		—			—		2			—	—		—			2,186			—			2,188			—			2,188
Repurchased		—			—		—			—	—		—			(1,546	)		—			(1,546	)		—			(1,546	)
Restricted share-based compensation expense		—			—		—			—	—		—			686			—			686			—			686
Dividends paid		—			—		—			—	—		(4,859	)		—			—			(4,859	)		—			(4,859	)
Stock option expense		—			—		—			—	—		—			3,233			—			3,233			—			3,233
Profit distributions to noncontrolling interests		(6,276	)																						(1,441	)		(1,441	)
Capital contributions from noncontrolling interests																									300			300
Comprehensive income:
Net income		7,514			—		—			—	—		—			65,572			—			65,572			3,332			68,904
Amortization of terminated hedge (net of income tax effect of $30)		—			—		—			—	—		—			—			(54	)		(54	)		—			(54	)
Unrealized derivative losses on cash flow hedges (net of income tax effect of $237)		—			—		—			—	—		—			—			390			390			—			390

Subtotal - comprehensive income		7,514																	336			65,908			3,332			69,240

Balance, June 30, 2010	$	205,463		$	67	$	899		$	7	—	$	(118,320	)	$	2,025,605		$	(20,893	)	$	1,887,365		$	42,765		$	1,930,130

(a)	Authorized shares of Universal Health Services, Inc. consist of 12,000,000 shares of Class A Common Stock, 150,000,000 shares of Class B Common Stock, 1,200,000 shares of Class C Common Stock and 5,000,000 shares of Class D Common Stock.

(b)	See Note 15 for revision related to reclassification of noncontrolling interests to redeemable noncontrolling interests outside of permanent equity.

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

Revision of December 31, 2009 and 2008 Consolidated Balance Sheets and Statements of Changes in Equity and of Unaudited March 31, 2010 Consolidated Balance Sheet

6 Months Ended

Jun. 30, 2010

Revision of December 31, 2009 and 2008 Consolidated Balance Sheets and Statements of Changes in Equity and of Unaudited March 31, 2010 Consolidated Balance Sheet

(15) Revision of December 31, 2009 and 2008 Consolidated Balance Sheets and Statements of Changes in Equity and of Unaudited March 31, 2010 Consolidated Balance Sheet

Generally accepted accounting principles require that noncontrolling interests be classified as equity and we have previously presented all noncontrolling interests in total equity. However, since certain of our noncontrolling interests have redemption rights outside of our control, those noncontrolling interests are classified outside of permanent equity. Accordingly, noncontrolling interests with an estimated redemption amount of $186 million as of December 31, 2008, $197 million as of December 31, 2009 and $204 million as of March 31, 2010 have been reclassified from total equity to redeemable noncontrolling interests outside of permanent equity. These revisions did not affect stockholders' equity attributable to UHS nor did they affect any previously reported percentages based upon equity (such as percentage of debt to total capitalization and return on average equity), since we have based those calculations on only stockholders' equity attributable to UHS (as opposed to total equity).

We do not believe these revisions are material to the condensed consolidated financial statements as of March 31, 2010 or to any prior years' consolidated financial statements. In each applicable future filing, we will revise the December 31, 2009 and 2008 Consolidated Balance Sheet and Consolidated Statements of Changes in Equity and the March 31, 2010 Condensed Consolidated Balance Sheet

The applicable sections of our December 31, 2009 and 2008 Consolidated Balance Sheet, as reported and as revised, are as follows:


	*As Reported*			*As Revised*			*As Reported*			*As Revised*
	December 31, 2009			December 31, 2009			December 31, 2008			December 31, 2008
Redeemable noncontrolling interest		—		$	197,152			—		$	186,097

Equity:
Class A Common Stock	$	67		$	67		$	33		$	33

Class B Common Stock		896			896			458			458

Class C Common Stock		7			7			3			3

Class D Common Stock		—			—			—			—

Cumulative dividends		(108,627	)		(108,627	)		(91,921	)		(91,921	)
Retained earnings		1,879,981			1,879,981			1,666,973			1,666,973

Accumulated other comprehensive loss		(21,253	)		(21,253	)		(31,696	)		(31,696	)

Universal Health Services, Inc. common stockholders' equity		1,751,071			1,751,071			1,543,850			1,543,850
Noncontrolling interest		238,475			41,323			226,735			40,638

Total Equity	$	1,989,546		$	1,792,394		$	1,770,585		$	1,584,488

The applicable section of our March 31, 2010 Condensed Consolidated Balance Sheet, as reported and as revised, are as follows:


	*As Reported*		*As Revised*
	March 31, 2010		March 31, 2010
Redeemable noncontrolling interest		—	$	204,225

UHS common stockholders' equity	$	1,821,755	$	1,821,755
Noncontrolling interest		244,799		40,574

Total equity	$	2,066,554	$	1,862,329

Dividends	6 Months Ended
Dividends	Jun. 30, 2010
Dividends	(10) Dividends We declared and paid dividends of $4.9 million, or $.05 per share, during the second quarter of 2010 and $3.9 million, or $.04 per share, during the second quarter of 2009. During the six-month periods ended June 30, 2010 and 2009, we declared and paid dividends of $9.7 million and $7.9 million, respectively.