8-K
0000352915false00003529152023-02-272023-02-27

 

 

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 27, 2023

 

UNIVERSAL HEALTH SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

1-10765

 

23-2077891

(State or other jurisdiction of

 

(Commission

 

(I.R.S. Employer

Incorporation or Organization)

 

File Number)

 

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 Instructions 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))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class B Common Stock

UHS

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

Item 2.02 Results of Operations and Financial Condition

On February 27, 2023, 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 27, 2023.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

Exhibit Index

 

Exhibit No.

 

Exhibit

 

 

99.1

 

Universal Health Services, Inc., press release, dated February 27, 2023.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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.

 

Universal Health Services, Inc.

 

By:

 

/s/ Steve Filton

Name: Steve Filton

Title: Executive Vice President and

            Chief Financial Officer

Date: February 27, 2023

 

 

 


EX-99

Exhibit 99.1

FOR IMMEDIATE RELEASE

February 27, 2023

 

CONTACT:

Steve Filton

 

Chief Financial Officer

 

610-768-3300

 

 

UNIVERSAL HEALTH SERVICES, INC.

ANNOUNCES 2022 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS

AND 2023 FULL YEAR EARNINGS GUIDANCE

 

Consolidated Results of Operations, As Reported and As Adjusted – Three-month periods ended December 31, 2022 and 2021:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $174.8 million, or $2.43 per diluted share, during the fourth quarter of 2022, as compared to $239.1 million, or $3.00 per diluted share, during the fourth quarter of 2021. Net revenues increased by 5.2% to $3.447 billion during the fourth quarter of 2022, as compared to $3.275 billion during the fourth quarter of 2021.

As reflected on the Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), our adjusted net income attributable to UHS during the fourth quarter of 2022, was $217.1 million, or $3.02 per diluted share, as compared to $235.1 million, or $2.95 per diluted share, during the fourth quarter of 2021.

Included in our reported and adjusted net income attributable to UHS during the fourth quarter of 2022, was an aggregate favorable after-tax impact of approximately $19.6 million, or $.27 per diluted share, recorded in connection with $26.0 million of commercial insurance proceeds received during the quarter in connection with the following: (i) $15.7 million related to a business interruption and property damage claim at one of our behavioral health care facilities, and; (ii) $10.3 million related to a previously incurred information technology incident.

Included in our reported and adjusted net income attributable to UHS during the fourth quarter of 2021, was a net favorable after-tax impact of approximately $26.2 million, or $.33 per diluted share, resulting from approximately $34 million of revenues recorded during the fourth quarter of 2021 in connection with the Kentucky Medicaid managed care hospital rate increase program (covering the period of July 1, 2021 to December 31, 2021).

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2022, was a net aggregate unfavorable after-tax impact of $42.3 million, or $.59 per diluted share, consisting of the following: (i) a $44.1 million, or $.61 per diluted share, provision for asset impairment ($57.6 million pre-tax which is included in other operating expenses) recorded to write-down the asset value of an acute care hospital located in Las Vegas, Nevada, as discussed below in Provision for Asset Impairment, and; (ii) a $1.8 million, or $.02 per diluted share, unrealized gain ($2.3 million pre-tax which is included in “Other (income) expense, net”), resulting from an increase in the market value of certain equity securities.

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2021, was a net aggregate favorable after-tax impact of $4.0 million, or $.05 per diluted share, consisting primarily of an after-tax unrealized gain of $4.1 million, or $.05 per diluted share, ($5.4 million pre-tax which is included in “Other (income) expense, net”), resulting from an increase in the market value of certain equity securities.

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization (“EBITDA net of NCI”, NCI is net income attributable to noncontrolling interests), was $419.0 million during the fourth quarter of 2022, as compared to $464.5 million during the fourth quarter of 2021. Our adjusted earnings before interest, taxes, depreciation & amortization (“Adjusted EBITDA net of NCI”), which excludes the impact of the provision for asset impairment and other (income) expense, net, was $471.7 million during the fourth quarter of 2022, as compared to $452.2 million during the fourth quarter of 2021.

Consolidated Results of Operations, As Reported and As Adjusted – Twelve-month periods ended December 31, 2022 and 2021:

Reported net income attributable to UHS was $675.6 million, or $9.14 per diluted share, during the full year of 2022, as compared to $991.6 million, or $11.82 per diluted share, during the full year of 2021. Net revenues increased by 6.0% to $13.399 billion during 2022, as compared to $12.642 billion during 2021.

Our reported and adjusted net income attributable to UHS during the twelve-month period ended December 31, 2021, included the following: (i) a favorable after-tax impact of $74.0 million, or $.88 per diluted share, resulting from approximately $97 million of revenues recorded during 2021 in connection with the Kentucky Medicaid managed care hospital rate increase program (covering the period of July 1, 2020 to December 31, 2021); (ii) an unfavorable after-tax impact of approximately $39.2 million, or $.47 per diluted share, resulting from a $52 million increase to our reserves for self-insured professional and general liability claims recorded during 2021, and; (iii) an aggregate favorable after-tax impact of $28.4 million, or $.34 per diluted share, resulting from aggregate commercial insurance proceeds of approximately $38 million recorded during 2021 in connection with a previously incurred information technology incident and the COVID-19 pandemic.


As reflected on the Supplemental Schedule, our adjusted net income attributable to UHS during the twelve-month period ended December 31, 2022, was $730.2 million, or $9.88 per diluted share, as compared to $991.7 million, or $11.82 per diluted share, during the twelve-month period ended December 31, 2021.

As reflected on the Supplemental Schedule, included in our reported results during the full year of 2022, was a net aggregate unfavorable after-tax impact of $54.6 million, or $.74 per diluted share, consisting of the following: (i) a $44.1 million, or $.60 per diluted share, provision for asset impairment ($57.6 million pre-tax which is included in other operating expenses), as discussed below in Provision for Asset Impairment, and; (ii) a $10.6 million, or $.14 per diluted share, unrealized loss ($13.8 million pre-tax which is included in “Other (income) expense, net”), resulting from a decrease in the market value of certain equity securities.

As reflected on the Supplemental Schedule, included in our reported results during the full year of 2021, were the following which, on a net aggregate basis, amounted to a de minimis amount: (i) an after-tax charge of $12.9 million, or $.15 per diluted share, ($16.8 million pre-tax which is included in “Other (income) expense, net”) recorded in connection with the costs related to extinguishment of debt resulting from various financing transactions completed during the third quarter of 2021; (ii) an after-tax unrealized gain of $10.4 million, or $.12 per diluted share, ($13.6 million pre-tax which is included in “Other (income) expense, net”) resulting from an increase in the market value of shares of certain equity securities, and; (iii) a favorable after-tax impact of $2.4 million, or $.03 per diluted share, resulting from ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”.

As calculated on the attached Supplemental Schedule, our EBITDA net of NCI was $1.594 billion during the full year of 2022, as compared to $1.914 billion during the full year of 2021. Our Adjusted EBITDA net of NCI was $1.662 billion during the full year 2022, as compared to $1.900 billion during the 2021 full year.

Acute Care Services – Three and twelve-month periods ended December 31, 2022 and 2021:

During the fourth quarter of 2022, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) increased by 5.5% while adjusted patient days increased by 1.6%, as compared to the fourth quarter of 2021. At these facilities, during the fourth quarter of 2022, net revenue per adjusted admission decreased by 3.8% while net revenue per adjusted patient day decreased 0.2%, as compared to the fourth quarter of 2021. Net revenues generated from our acute care services on a same facility basis increased by 2.6% during the fourth quarter of 2022, as compared to the fourth quarter of 2021.

During the twelve-month period ended December 31, 2022, at our acute care hospitals on a same facility basis, adjusted admissions increased by 3.1% while adjusted patient days increased by 0.9%, as compared to the comparable twelve-month period of 2021. At these facilities, during the full year of 2022, net revenue per adjusted admission decreased by 0.3% while net revenue per adjusted patient day increased by 1.9%, as compared to the comparable twelve-month period of 2021. Net revenues generated from our acute care services on a same facility basis increased by 4.1% during the full year of 2022, as compared to 2021.

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2022 and 2021:

During the fourth quarter of 2022, at our behavioral health care facilities on a same facility basis, adjusted admissions increased by 0.7% while adjusted patient days increased by 2.0%, as compared to the fourth quarter of 2021. At these facilities, during the fourth quarter of 2022, net revenue per adjusted admission increased by 3.4% and net revenue per adjusted patient day increased by 2.2%, as compared to the fourth quarter of 2021. Net revenues generated from our behavioral health care services increased by 4.3% during the fourth quarter of 2022, as compared to the fourth quarter of 2021.

During the twelve-month period ended December 31, 2022, at our behavioral health care facilities on a same facility basis, adjusted admissions increased by 0.7% while adjusted patient days increased by 1.2%, as compared to the comparable twelve-month period of 2021. At these facilities, during the full year of 2022, net revenue per adjusted admission increased by 4.0% and net revenue per adjusted patient day increased by 3.5%, as compared to the comparable twelve-month period of 2021. Net revenues generated from our behavioral health care services increased by 4.2% during the full year of 2022, as compared to 2021.

Net Cash Provided by Operating Activities and Liquidity:

Net Cash Provided by Operating Activities:

During the twelve-month period ended December 31, 2022, our net cash provided by operating activities was $996 million as compared to $884 million during the twelve-month period of 2021. The $112 million net increase in our net cash provided by operating activities during 2022, as compared to 2021, was due to: (i) a favorable change of $695 million from the early return of Medicare accelerated payments which were received during 2020 and repaid during the first quarter of 2021; (ii) an unfavorable change of $249 million in accounts receivable due, in part, to increased receivables related to supplemental Medicaid programs in various states as well as amounts outstanding at December 31, 2022, related to facilities and businesses that were opened/acquired during the past year; (iii)an unfavorable change of $238 million resulting from a decrease in net income plus depreciation and amortization expense, stock-based compensation expense, gain/loss on sales of assets and businesses, costs related to extinguishment of debt and provision for asset impairments; (iv) an unfavorable change of $193 million from other working capital accounts due primarily to the timing of disbursements for accounts payable, accrued expenses and accrued compensation, as well as the payment during 2022, of a portion of the employer’s share of the 2020 Social Security taxes which were deferred pursuant to the CARES Act; (v) an unfavorable change of $62 million in accrued insurance expense, net of commercial premiums paid; (vi) a favorable change of $59 million in other assets and deferred charges; (vii) a favorable change of $25 million in accrued and deferred income taxes, and; (viii) $75 million of other combined net favorable changes.


Liquidity:

As of December 31, 2022, we had $886 million of aggregate available borrowing capacity pursuant to our $1.2 billion revolving credit facility, net of outstanding borrowings and letters of credit.

Stock Repurchase Program:

As of December 31, 2021, we had an aggregate remaining repurchase authorization of approximately $358 million pursuant to our stock repurchase program. In February of 2022, our Board of Directors authorized a $1.4 billion increase to the program. As of December 31, 2022, we had an aggregate available repurchase authorization of approximately $947 million.

Pursuant to the terms of our stock repurchase program, shares of our Class B Common Stock may be repurchased, from time to time as conditions allow, on the open market or in negotiated private transactions. During the fourth quarter of 2022, we have repurchased 812,141 shares at an aggregate cost of approximately $107.2 million (approximately $132 per share) pursuant to the program. During the full year of 2022, we have repurchased approximately 6.67 million shares at an aggregate cost of approximately $810.9 million (approximately $122 per share) pursuant to the program.

Provision for Asset Impairment:

Our financial statements for the three and twelve-month periods ended December 31, 2022, include a pre-tax provision for asset impairment of $57.6 million, which is included in other operating expenses on the accompanying consolidated statements of income, to write-down the asset value of Desert Springs Hospital Medical Center, a 282-bed acute care hospital located in Las Vegas, Nevada. In early 2023, as a result of various competitive pressures and operational challenges experienced in the market, which had a significant unfavorable impact on the hospital’s results of operations during the past year, as well as physical plant constraints and limitations resulting from the advanced age of the facility (which opened in 1971), we announced plans to discontinue all inpatient operations by March of 2023. During the next two years, we plan to continue providing emergency department services within a portion of the existing facility while we construct a new free-standing emergency department on the hospital's campus. The provision for asset impairment reduced the asset values of the facility's real estate and equipment to their estimated fair values.

2023 Operating Results Forecast:

Reflected below is our 2023 guidance range for consolidated net revenues, earnings before interest, taxes, depreciation & amortization, and the impacts of other income/expense and net income attributable to noncontrolling interests (“Adjusted EBITDA net of NCI”), adjusted net income attributable to UHS per diluted share (“Adjusted EPS-diluted”) and capital expenditures.

Adjusted EPS-diluted and Adjusted EBITDA net of NCI, are non-GAAP financial measures and should be examined in connection with net income determined in accordance with GAAP as presented in the consolidated financial statements and notes thereto in this report or in our filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2022. Please see the Supplemental Non-GAAP Disclosures - 2023 Operating Results Forecast schedule as included herein for additional information and a reconciliation to the financial forecasts as computed in accordance with GAAP.

For the Year Ended

December 31, 2023

 

      Low

      High

Net revenues

$14.044 billion

$14.314 billion

Adjusted EBITDA net of NCI

$1.662 billion

$1.753 billion

Adjusted EPS-diluted

$9.50 per share

$10.50 per share

Capital expenditures

$725 million

$875 million

Our 2023 guidance contains a number of assumptions including, but not limited to, the following:

The 2023 forecasted amounts exclude the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as pre-tax unrealized gains/losses resulting from changes in the market value of shares of certain equity securities, and other potential material items including, but not limited to, reserves for various matters including settlements, legal judgments and lawsuits, potential impacts of non-ordinary course acquisitions, divestitures, joint ventures or other strategic transactions, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, impairment of long-lived and intangible assets, other amounts that may be reflected in the current financial statements that relate to prior periods, and the impact of share repurchases that differ from our forecasted assumptions. It is also subject to certain conditions including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.
Our net revenues are estimated to be approximately $14.044 billion to $14.314 billion representing an increase of approximately 4.8% to 6.8% over our 2022 net revenues of approximately $13.399 billion.
Our Adjusted EBITDA net of NCI is estimated to be approximately $1.662 billion to $1.753 billion, as compared to our 2022 Adjusted EBITDA net of NCI of $1.662 billion.
Our projected interest expense during 2023 is estimated to increase by approximately $71 million, or 56%, over the interest expense incurred during 2022. The increase is due primarily to increases in our projected average cost of borrowings, and aggregate average borrowings outstanding, pursuant to our revolving credit and tranche A term loan facilities.

Our Adjusted EPS-diluted range is estimated to be $9.50 per diluted share to $10.50 per diluted share, as compared to our adjusted net income attributable to UHS of $9.88 per diluted share for the year ended December 31, 2022, as calculated on the attached Supplemental Schedule.

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 28, 2023. A live webcast of the call will be available on our website at www.uhs.com. To participate via telephone, please register in advance by accessing this link.

Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the call will be available for one full year following the live call.

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

One of the nation’s largest and most respected providers of hospital and healthcare services, Universal Health Services, Inc. has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues during 2022 were approximately $13.4 billion. UHS ranked #297 on the Fortune 500; and #391 on Forbes’ list of America’s Largest Public Companies. UHS was again recognized as one of the World’s Most Admired Companies by Fortune.

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

Headquartered in King of Prussia, PA, UHS has approximately 93,800 employees and, through its subsidiaries, operates 28 inpatient acute care hospitals, 331 inpatient behavioral health facilities, 39 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT). For additional information visit www.uhs.com.

This press release contains forward-looking statements based on current management expectations. Numerous factors, including those disclosed herein, those related to the anticipated impact of COVID-19 on our operations and financial results, 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, 2022), may cause the results to differ materially from those anticipated in the forward-looking statements. These statements are subject to risks and uncertainties and therefore actual results may differ materially. Readers should not place undue reliance on such forward-looking statements which reflect management’s view only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Many of the factors that could affect our future results are beyond our control or ability to predict, including the impact of the COVID-19 pandemic. The impact of the COVID-19 pandemic, which began during the second half of March, 2020, has had a material effect on our operations and financial results since that time. The length and extent of the disruptions caused by the COVID‑19 pandemic are currently unknown; however, we expect such disruptions to continue into the future. Since the future volumes and severity of COVID-19 patients remain highly uncertain and subject to change, including potential increases in future COVID-19 patient volumes caused by new variants of the virus, as well as related pressures on staffing and wage rates, we are not able to fully quantify the impact that these factors will have on our future financial results. However, future developments related to the COVID-19 pandemic could continue to materially affect our financial performance.

The nationwide shortage of nurses and other clinical staff and support personnel has been a significant operating issue facing us and other healthcare providers. Like others in the healthcare industry, we continue to experience a shortage of nurses and other clinical staff and support personnel at our acute care and behavioral health care hospitals in many geographic areas. In some areas, the labor scarcity is putting a strain on our resources and staff, which has required us to utilize higher‑cost temporary labor and pay premiums above standard compensation for essential workers. This staffing shortage has required us to hire expensive temporary personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel. At certain facilities, particularly within our behavioral health care segment, we have been unable to fill all vacant positions and, consequently, have been required to limit patient volumes. These factors, which had a material unfavorable impact on our results of operations during 2022, could continue to have an unfavorable material impact on our results of operations for the foreseeable future.

In addition, the increase in interest rates has substantially increased our borrowings costs and reduced our ability to access the capital markets on favorable terms. Additional increases in interest rates could have a significant unfavorable impact on our future results of operations and the resulting effect on the capital markets could adversely affect our ability to carry out our strategy.

We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA net of NCI and Adjusted EBITDA net of NCI, which are non-GAAP financial measures (“GAAP” is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our


investors since it neutralizes the effect of material items impacting our net income attributable to UHS, such as, changes in the market value of shares of certain equity securities and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of goodwill and long-lived and intangible assets, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. To obtain a complete understanding of our financial performance these measures should be examined in connection with net income attributable to UHS, as determined in accordance with GAAP, and as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2022. 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.

 

 

(more)

 

 


 

 

Universal Health Services, Inc.

 

Consolidated Statements of Income

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Twelve months

 

 

 

ended December 31,

 

 

ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenues

 

$

3,446,980

 

 

 

3,275,251

 

 

$

13,399,370

 

 

 

12,642,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating charges:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

1,701,083

 

 

 

1,621,788

 

 

 

6,762,256

 

 

 

6,163,944

 

Other operating expenses

 

 

919,673

 

 

 

802,279

 

 

 

3,445,733

 

 

 

3,035,869

 

Supplies expense

 

 

381,936

 

 

 

374,157

 

 

 

1,474,339

 

 

 

1,427,134

 

Depreciation and amortization

 

 

148,353

 

 

 

133,363

 

 

 

581,861

 

 

 

533,213

 

Lease and rental expense

 

 

34,551

 

 

 

30,015

 

 

 

131,626

 

 

 

118,863

 

 

 

 

3,185,596

 

 

 

2,961,602

 

 

 

12,395,815

 

 

 

11,279,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

261,384

 

 

 

313,649

 

 

 

1,003,555

 

 

 

1,363,094

 

Interest expense, net

 

 

43,887

 

 

 

19,217

 

 

 

126,889

 

 

 

83,672

 

Other (income) expense, net

 

 

(4,838

)

 

 

(12,316

)

 

 

10,406

 

 

 

(13,891

)

Income before income taxes

 

 

222,335

 

 

 

306,748

 

 

 

866,260

 

 

 

1,293,313

 

Provision for income taxes

 

 

51,966

 

 

 

72,837

 

 

 

209,278

 

 

 

305,681

 

Net income

 

 

170,369

 

 

 

233,911

 

 

 

656,982

 

 

 

987,632

 

Less: Net income (loss) attributable to noncontrolling interests ("NCI")

 

 

(4,451

)

 

 

(5,213

)

 

 

(18,627

)

 

 

(3,958

)

Net income attributable to UHS

 

$

174,820

 

 

$

239,124

 

 

$

675,609

 

 

$

991,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS (a)

 

$

2.45

 

 

$

3.03

 

 

$

9.23

 

 

$

11.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS (a)

 

$

2.43

 

 

$

3.00

 

 

$

9.14

 

 

$

11.82

 

 

 


Universal Health Services, Inc.

 

Footnotes to Consolidated Statements of Income

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Twelve months

 

 

 

ended December 31,

 

 

ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

(a) Earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to UHS

 

$

174,820

 

 

$

239,124

 

 

$

675,609

 

 

$

991,590

 

Less: Net income attributable to unvested restricted share grants

 

 

(156

)

 

 

(450

)

 

 

(748

)

 

 

(2,059

)

Net income attributable to UHS - basic and diluted

 

$

174,664

 

 

$

238,674

 

 

$

674,861

 

 

$

989,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic

 

 

71,165

 

 

 

78,808

 

 

 

73,118

 

 

 

82,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS:

 

$

2.45

 

 

$

3.03

 

 

$

9.23

 

 

$

11.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

71,165

 

 

 

78,808

 

 

 

73,118

 

 

 

82,519

 

Add: Other share equivalents

 

 

627

 

 

 

867

 

 

 

714

 

 

 

1,173

 

Weighted average number of common shares and equiv. - diluted

 

 

71,792

 

 

 

79,675

 

 

 

73,832

 

 

 

83,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS:

 

$

2.43

 

 

$

3.00

 

 

$

9.14

 

 

$

11.82

 

 


Universal Health Services, Inc.

 

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

 

For the Three Months ended December 31, 2022 and 2021

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

% Net

 

 

Three months ended

 

 

% Net

 

 

December 31, 2022

 

 

revenues

 

 

December 31, 2021

 

 

revenues

 

Net income attributable to UHS

$

174,820

 

 

 

 

 

$

239,124

 

 

 

 

   Depreciation and amortization

 

148,353

 

 

 

 

 

 

133,363

 

 

 

 

   Interest expense, net

 

43,887

 

 

 

 

 

 

19,217

 

 

 

 

   Provision for income taxes

 

51,966

 

 

 

 

 

 

72,837

 

 

 

 

EBITDA net of NCI

$

419,026

 

 

 

12.2

%

 

$

464,541

 

 

 

14.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

(4,838

)

 

 

 

 

 

(12,316

)

 

 

 

Provision for asset impairment

 

57,550

 

 

 

 

 

 

-

 

 

 

 

Adjusted EBITDA net of NCI

$

471,738

 

 

 

13.7

%

 

$

452,225

 

 

 

13.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

3,446,980

 

 

 

 

 

$

3,275,251

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Three months ended

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

 

 

Per

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

174,820

 

 

$

2.43

 

 

$

239,124

 

 

$

3.00

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

Unrealized (gain) loss on equity securities

 

(1,778

)

 

 

(0.02

)

 

 

(4,119

)

 

 

(0.05

)

Provision for asset impairment

 

44,055

 

 

 

0.61

 

 

 

-

 

 

 

-

 

Impact of ASU 2016-09

 

-

 

 

 

-

 

 

 

99

 

 

 

-

 

Subtotal adjustments

 

42,277

 

 

 

0.59

 

 

 

(4,020

)

 

 

(0.05

)

Adjusted net income attributable to UHS

$

217,097

 

 

$

3.02

 

 

$

235,104

 

 

$

2.95

 

 

 

 

 

 

 

 

 

 


Universal Health Services, Inc.

 

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

 

For the Twelve Months ended December 31, 2022 and 2021

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended

 

 

% Net

 

 

Twelve months ended

 

 

% Net

 

 

December 31, 2022

 

 

revenues

 

 

December 31, 2021

 

 

revenues

 

Net income attributable to UHS

$

675,609

 

 

 

 

 

$

991,590

 

 

 

 

   Depreciation and amortization

 

581,861

 

 

 

 

 

 

533,213

 

 

 

 

   Interest expense, net

 

126,889

 

 

 

 

 

 

83,672

 

 

 

 

   Provision for income taxes

 

209,278

 

 

 

 

 

 

305,681

 

 

 

 

EBITDA net of NCI

$

1,593,637

 

 

 

11.9

%

 

$

1,914,156

 

 

 

15.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

10,406

 

 

 

 

 

 

(13,891

)

 

 

 

Provision for asset impairment

 

57,550

 

 

 

 

 

 

-

 

 

 

0

 

Adjusted EBITDA net of NCI

$

1,661,593

 

 

 

12.4

%

 

$

1,900,265

 

 

 

15.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

13,399,370

 

 

 

 

 

$

12,642,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended

 

 

Twelve months ended

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

 

 

Per

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

675,609

 

 

$

9.14

 

 

$

991,590

 

 

$

11.82

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

Unrealized (gain) loss on equity securities

 

10,580

 

 

 

0.14

 

 

 

(10,374

)

 

 

(0.12

)

Provision for asset impairment

 

44,055

 

 

 

0.60

 

 

 

-

 

 

 

-

 

Debt extinguishment costs

 

-

 

 

 

-

 

 

 

12,884

 

 

 

0.15

 

Impact of ASU 2016-09

 

-

 

 

 

-

 

 

 

(2,423

)

 

 

(0.03

)

Subtotal adjustments

 

54,635

 

 

 

0.74

 

 

 

87

 

 

 

-

 

Adjusted net income attributable to UHS

$

730,244

 

 

$

9.88

 

 

$

991,677

 

 

$

11.82

 

 

 


Universal Health Services, Inc.

 

Condensed Consolidated Balance Sheets

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

102,818

 

 

$

115,301

 

Accounts receivable, net

 

 

2,017,722

 

 

 

1,746,635

 

Supplies

 

 

218,517

 

 

 

206,839

 

Other current assets

 

 

198,283

 

 

 

194,781

 

Total current assets

 

 

2,537,340

 

 

 

2,263,556

 

 

 

 

 

 

 

 

Property and equipment

 

 

11,085,852

 

 

 

10,770,702

 

Less: accumulated depreciation

 

 

(5,167,394

)

 

 

(4,896,427

)

 

 

 

5,918,458

 

 

 

5,874,275

 

Other assets:

 

 

 

 

 

 

Goodwill

 

 

3,909,456

 

 

 

3,962,624

 

Deferred income taxes

 

 

68,397

 

 

 

45,707

 

Right of use assets-operating leases

 

 

454,650

 

 

 

367,477

 

Deferred charges

 

 

6,264

 

 

 

6,525

 

Other

 

 

599,623

 

 

 

573,379

 

Total Assets

 

$

13,494,188

 

 

$

13,093,543

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current maturities of long-term debt

 

$

81,447

 

 

$

48,409

 

Accounts payable and other liabilities

 

 

1,760,588

 

 

 

1,860,496

 

Operating lease liabilities

 

 

67,776

 

 

 

64,484

 

Federal and state taxes

 

 

4,608

 

 

 

10,720

 

Total current liabilities

 

 

1,914,419

 

 

 

1,984,109

 

 

 

 

 

 

 

 

Other noncurrent liabilities

 

 

487,669

 

 

 

464,759

 

Operating lease liabilities noncurrent

 

 

395,522

 

 

 

304,624

 

Long-term debt

 

 

4,726,533

 

 

 

4,141,879

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

4,695

 

 

 

5,119

 

 

 

 

 

 

 

 

UHS common stockholders' equity

 

 

5,920,582

 

 

 

6,089,664

 

Noncontrolling interest

 

 

44,768

 

 

 

103,389

 

Total equity

 

 

5,965,350

 

 

 

6,193,053

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

13,494,188

 

 

$

13,093,543

 

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

(unaudited)

 

 

Twelve months

 

 

ended December 31,

 

 

2022

 

 

2021

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net income

$

656,982

 

 

$

987,632

 

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

 

 

 

 

 

Depreciation & amortization

 

581,861

 

 

 

533,213

 

Loss (gain) on sale of assets and businesses

 

584

 

 

 

(5,170

)

Costs related to extinguishment of debt

 

0

 

 

 

16,831

 

Stock-based compensation expense

 

85,378

 

 

 

73,686

 

Provision for asset impairment

 

57,550

 

 

 

14,391

 

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

 

 

 

 

 

Accounts receivable

 

(258,338

)

 

 

(8,873

)

Accrued interest

 

1,835

 

 

 

4,950

 

Accrued and deferred income taxes

 

(29,510

)

 

 

(54,030

)

Other working capital accounts

 

(146,692

)

 

 

46,526

 

Medicare accelerated payments and deferred CARES Act and other grants

 

2,391

 

 

 

(698,762

)

Other assets and deferred charges

 

19,918

 

 

 

(39,337

)

Other

 

(8,676

)

 

 

(82,075

)

Accrued insurance expense, net of commercial premiums paid

 

174,723

 

 

 

186,215

 

Payments made in settlement of self-insurance claims

 

(141,983

)

 

 

(91,502

)

Net cash provided by operating activities

 

996,023