uhs-8k_20170725.htm

 

 

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): July 25, 2017

 

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))

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 July 25, 2017, 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 July 25, 2017.

 

 

 


 

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: July 25, 2017

 

 

 


 

Exhibit Index

 

Exhibit No.

  

Exhibit

 

 

99.1

  

Universal Health Services, Inc., press release, dated July 25, 2017.

 

 

 

uhs-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

July 25, 2017

CONTACT:Steve Filton

Chief Financial Officer

610-768-3300

 

 

UNIVERSAL HEALTH SERVICES, INC.

REPORTS 2017 SECOND QUARTER FINANCIAL RESULTS

AND REVISES 2017 FULL YEAR EARNINGS GUIDANCE

 

Consolidated Results of Operations, As Reported and As Adjusted  – Three-month periods ended June 30, 2017 and 2016:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $185.4 million, or $1.91 per diluted share, during the second quarter of 2017 as compared to $185.6 million, or $1.89 per diluted share, during the comparable quarter of 2016.  

 

Net revenues increased 7.5% to $2.61 billion during the second quarter of 2017 as compared to $2.43 billion during the second quarter of 2016. As calculated on attached Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), our earnings before interest, taxes, depreciation & amortization (“EBITDA”) increased 3.2% to $438.3 million during the second quarter of 2017 as compared to $424.8 million during the second quarter of 2016.

 

For the three-month period ended June 30, 2017, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $188.1 million, or $1.94 per diluted share, as compared to $191.1 million, or $1.94 per diluted share, during the second quarter of 2016.  As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2017, is a net aggregate unfavorable after-tax impact of $2.7 million, or $.03 per diluted share, consisting of: (i) a favorable after-tax impact of $1.4 million, or $.01 per diluted share, resulting from our January 1, 2017 adoption of ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), as discussed below, offset by; (ii) an unfavorable after tax impact of $4.0 million, or $.04 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of electronic health records (“EHR”) applications at our acute care hospitals.  Included in our reported results during the second quarter of 2016 is an unfavorable after tax impact of $5.5 million, or $.05 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.

 

Consolidated Results of Operations, As Reported and As Adjusted  – Six-month periods ended June 30, 2017 and 2016:

Reported net income attributable to UHS was $391.4 million, or $4.03 per diluted share, during the first six months of 2017 as compared to $376.3 million, or $3.81 per diluted share, during the comparable period of 2016.  

 

Net revenues increased 7.1% to $5.23 billion during the first six months of 2017 as compared to $4.88 billion during the first six months of 2016. As calculated on attached Supplemental Schedule, our


EBITDA increased 4.5% to $898.6 million during the six-month period ended June 30, 2017 as compared to $860.2 million during the comparable six-month period of 2016.

 

For the six-month period ended June 30, 2017, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $392.4 million, or $4.04 per diluted share, as compared to $387.0 million, or $3.92 per diluted share, during the first six months of 2016.  As reflected on the Supplemental Schedule, included in our reported results during the six-month period ended June 30, 2017, is a net aggregate unfavorable after-tax impact of $1.0 million, or $.01 per diluted share, consisting of: (i) a favorable after-tax impact of $8.1 million, or $.08 per diluted share, resulting from our January 1, 2017 adoption of ASU 2016-09, offset by; (ii) an unfavorable after tax impact of $9.1 million, or $.09 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.  Included in our reported results during the six-month period ended June 30, 2016 is an unfavorable after tax impact of $10.7 million, or $.11 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.

 

Acute Care Services – Three and six-month periods ended June 30, 2017 and 2016:

During the second quarter of 2017, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) increased 6.0% and adjusted patient days increased 2.7%, as compared to the second quarter of 2016. Net revenues from our acute care services increased 5.1% during the second quarter of 2017 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission remained unchanged while net revenue per adjusted patient day increased 3.2% during the second quarter of 2017 as compared to the comparable quarter of 2016.

 

During the six-month period ended June 30, 2017, at our acute care hospitals on a same facility basis, adjusted admissions increased 5.5% and adjusted patient days increased 2.2%, as compared to the first six months of 2016. Net revenues from our acute care services increased 4.9% during the first six months of 2017 as compared to the comparable period of the prior year. At these facilities, net revenue per adjusted admission decreased 0.2% while net revenue per adjusted patient day increased 3.1% during the first six months of 2017 as compared to the comparable six-month period of 2016.

 

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on gross charges, amounting to approximately $485 million and $339 million during the three-month periods ended June 30, 2017 and 2016, respectively, and $901 million and $684 million during the six-month periods ended June 30, 2017 and 2016, respectively. The provision for doubtful accounts at our acute care hospitals amounted to approximately $187 million and $179 million during the three-month periods ended June 30, 2017 and 2016, respectively, and $368 million and $319 million during the six-month periods ended June 30, 2017 and 2016, respectively.          

 

Behavioral Health Care Services – Three and six-month periods ended June 30, 2017 and 2016:

During the second quarter of 2017, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.7% while adjusted patient days increased 1.4% as compared to the second quarter of 2016. At these facilities, net revenue per adjusted admission decreased 1.4% while net revenue per adjusted patient day increased 0.9% during the second quarter of 2017 as compared to


the comparable quarter in 2016. On a same facility basis, our behavioral health care services’ net revenues increased 2.2% during the second quarter of 2017 as compared to the second quarter of 2016.    

 

During the six-month period ended June 30, 2017, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.1% while adjusted patient days increased 0.8% as compared to the first six months of 2016. At these facilities, net revenue per adjusted admission decreased 1.2% while net revenue per adjusted patient day increased 1.0% during the first six months of 2017 as compared to the comparable six-month period of 2016. On a same facility basis, our behavioral health care services’ net revenues increased 1.8% during the first six months of 2017 as compared to the comparable period of 2016.    

 

Net Cash Provided by Operating Activities and Share Repurchase Program:

For the six months ended June 30, 2017, our net cash provided by operating activities decreased to $534 million from $836 million generated during the comparable six-month period of 2016.  The $302 million decrease was caused primarily by a $217 million unfavorable change in other working capital accounts resulting primarily from changes in accrued compensation and accounts payable due to timing of disbursements, and a $92 million unfavorable change in cash flows from foreign currency forward exchange contracts related to our investments in the U.K.  

 

In February of 2016, our Board of Directors authorized a $400 million increase to our stock repurchase program, which increased the aggregate authorization to $800 million from the previous $400 million authorization approved during the third quarter of 2014.  Pursuant to this program, we may purchase shares of our Class B Common Stock, from time to time as conditions allow, on the open market or in negotiated private transactions.  

 

In conjunction with this program, during the second quarter of 2017, we have repurchased 983,900 shares at an aggregate cost of $115.9 million (approximately $118 per share).  During the first six months of 2017, we have repurchased approximately 1.1 million shares at an aggregate cost of approximately $127.1 million (approximately $117 per share). Since inception of the program through June 30, 2017, we have repurchased approximately 5.47 million shares at an aggregate cost of approximately $641.2 million (approximately $117 per share).  

 

Revision of 2017 Full Year Earnings Guidance Range:

Based upon the operating trends and financial results experienced during the first six months of 2017, we are revising our estimated range of adjusted net income attributable to UHS for the year ended December 31, 2017 to $7.50 to $8.00 per diluted share from the previously provided range of $7.70 to $8.20 per diluted share.  This revised guidance range decreases both the lower and upper end of the previously provided range by approximately 2.5%.  

 

This revised guidance excludes the expected EHR unfavorable impact of $.15 per diluted share for the year, as well as the impact on our provision for income taxes and net income attributable to UHS resulting from of our January 1, 2017 adoption of ASU 2016-09, which as discussed below, we are unable to estimate at this time. This guidance range also excludes the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as, but not limited to, gains/losses on sales of assets and businesses, costs related to extinguishment of debt, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets, impact of share repurchases and other material amounts that may be reflected in our financial statements that relate to prior periods.


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.

 

Adoption of ASU 2016-09:

Effective January 1, 2017, we adopted ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which amends the accounting for employee share-based payment transactions to require recognition of the tax effects resulting from the settlement of stock-based awards as income tax expense or benefit in the income statement in the reporting period in which they occur.  In connection with the adoption of ASU 2016-09, during the three and six-month periods ended June 30, 2017, we recorded reductions to our provision for income taxes of $1.4 million and $8.1 million, respectively, which resulted in a corresponding increases in our net income attributable to UHS of $1.4 million, or $.01 per diluted share, during the second quarter of 2017 and $8.1 million, or $.08 per diluted share, during the first six months of 2017.

 

Since the impact of ASU 2016-09 on our future financial statements is dependent upon the timing of stock option exercises, and the market price of our stock at the time of exercise, we are unable to estimate the impact this adoption will have on our future provision for income taxes and net income attributable to UHS.  This reporting change is applied prospectively, effective as of January 1, 2017, with the exception of the change in the presentation of the excess income tax benefits related to stock-based compensation in the Statement of Cash Flows, which was applied retrospectively.    

 

Conference call information:        

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on Wednesday, July 26, 2017. The dial-in number is 1-877-648-7971.  

A live broadcast of the conference call will be available on our website at www.uhsinc.com.  A replay of the call will be available following the conclusion of the live call and will be available for one full year.

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

Universal Health Services, Inc. (“UHS”) is one of the nation’s largest hospital companies operating through its subsidiaries acute care hospitals, behavioral health facilities and ambulatory centers located throughout the United States, the United Kingdom, Puerto Rico and the U.S. Virgin Islands.  It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT).  For additional information on the Company, visit our web site: http://www.uhsinc.com.

 

This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2016 and in Item 2-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended March 31, 2017), may cause the results to differ materially from those anticipated in the forward-looking statements.  Many of the factors that will determine our future results are beyond our capability to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially.  Readers should not place undue reliance on such forward-looking statements which reflect management’s view only as of the date hereof.  We


undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

 

We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA and adjusted EBITDA, which are non-GAAP financial measures (“GAAP” is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of material items that are nonrecurring or non-operational in nature including, but not limited to, costs/benefits related to the impact on our provision for income taxes and net income attributable to UHS resulting from our January 1, 2017 adoption of ASU 2016-09, the implementation of EHR applications at our acute care hospitals, extinguishment of debt, gains/losses on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets, and other items and other material amounts that may be reflected in the current or prior year financial statements that relate to prior periods.  

 

To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as 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, 2016 and our Report on Form 10-Q for the quarterly period ended March 31, 2017. 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

 

 

Six months

 

 

 

ended June 30,

 

 

ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net revenues before provision for doubtful accounts

 

$

2,827,709

 

 

$

2,638,848

 

 

$

5,653,181

 

 

$

5,258,441

 

Less: Provision for doubtful accounts

 

 

215,353

 

 

 

207,993

 

 

 

427,967

 

 

 

377,788

 

Net revenues

 

 

2,612,356

 

 

 

2,430,855

 

 

 

5,225,214

 

 

 

4,880,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

1,236,294

 

 

 

1,130,933

 

 

 

2,474,258

 

 

 

2,279,072

 

Other operating expenses

 

 

632,193

 

 

 

585,995

 

 

 

1,239,553

 

 

 

1,147,579

 

Supplies expense

 

 

274,539

 

 

 

254,422

 

 

 

552,153

 

 

 

509,672

 

Depreciation and amortization

 

 

113,112

 

 

 

101,411

 

 

 

223,910

 

 

 

205,460

 

Lease and rental expense

 

 

26,027

 

 

 

24,806

 

 

 

51,216

 

 

 

49,258

 

 

 

 

2,282,165

 

 

 

2,097,567

 

 

 

4,541,090

 

 

 

4,191,041

 

Income from operations

 

 

330,191

 

 

 

333,288

 

 

 

684,124

 

 

 

689,612

 

Interest expense, net

 

 

35,920

 

 

 

30,442

 

 

 

71,427

 

 

 

60,042

 

Income before income taxes

 

 

294,271

 

 

 

302,846

 

 

 

612,697

 

 

 

629,570

 

Provision for income taxes

 

 

103,883

 

 

 

107,397

 

 

 

211,782

 

 

 

218,402

 

Net income

 

 

190,388

 

 

 

195,449

 

 

 

400,915

 

 

 

411,168

 

Less:  Net income attributable to noncontrolling interests

 

 

4,994

 

 

 

9,872

 

 

 

9,466

 

 

 

34,832

 

Net income attributable to UHS

 

$

185,394

 

 

$

185,577

 

 

$

391,449

 

 

$

376,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS (a)

 

$

1.93

 

 

$

1.91

 

 

$

4.06

 

 

$

3.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS (a)

 

$

1.91

 

 

$

1.89

 

 

$

4.03

 

 

$

3.81

 

 



Universal Health Services, Inc.

 

Footnotes to Consolidated Statements of Income

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Six months

 

 

 

ended June 30,

 

 

ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(a) Earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to UHS

 

$

185,394

 

 

$

185,577

 

 

$

391,449

 

 

$

376,336

 

Less: Net income attributable to unvested restricted share grants

 

 

(82

)

 

 

(84

)

 

 

(176

)

 

 

(173

)

Net income attributable to UHS - basic and diluted

 

$

185,312

 

 

$

185,493

 

 

$

391,273

 

 

$

376,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic

 

 

96,247

 

 

 

97,109

 

 

 

96,416

 

 

 

97,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS:

 

$

1.93

 

 

$

1.91

 

 

$

4.06

 

 

$

3.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

96,247

 

 

 

97,109

 

 

 

96,416

 

 

 

97,358

 

Add: Other share equivalents

 

 

795

 

 

 

1,280

 

 

 

791

 

 

 

1,284

 

Weighted average number of common shares and equiv. - diluted

 

 

97,042

 

 

 

98,389

 

 

 

97,207

 

 

 

98,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS:

 

$

1.91

 

 

$

1.89

 

 

$

4.03

 

 

$

3.81

 

 


Universal Health Services, Inc.

 

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

 

For the three months ended June 30, 2017 and 2016

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

% Net

 

 

Three months ended

 

 

% Net

 

 

June 30, 2017

 

 

revenues

 

 

June 30, 2016

 

 

revenues

 

Net income attributable to UHS

$

185,394

 

 

 

 

 

 

$

185,577

 

 

 

 

 

   Depreciation and amortization

 

113,112

 

 

 

 

 

 

 

101,411

 

 

 

 

 

   Interest expense, net

 

35,920

 

 

 

 

 

 

 

30,442

 

 

 

 

 

   Provision for income taxes

 

103,883

 

 

 

 

 

 

 

107,397

 

 

 

 

 

Unadjusted EBITDA

$

438,309

 

 

 

16.8

%

 

$

424,827

 

 

 

17.5

%

EHR-related net income attributable to noncontrolling interests, pre-tax

 

29

 

 

 

 

 

 

 

(455

)

 

 

 

 

Adjusted EBITDA

$

438,338

 

 

 

16.8

%

 

$

424,372

 

 

 

17.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

2,612,356

 

 

 

 

 

 

$

2,430,855

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Three months ended

 

 

June 30, 2017

 

 

June 30, 2016

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

185,394

 

 

$

1.91

 

 

$

185,577

 

 

$

1.89

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of ASU 2016-09

 

(1,382

)

 

 

(0.01

)

 

 

-

 

 

 

-

 

After-tax impact of EHR-related items

 

4,038

 

 

 

0.04

 

 

 

5,477

 

 

 

0.05

 

Subtotal

$

2,656

 

 

$

0.03

 

 

$

5,477

 

 

$

0.05

 

Adjusted net income attributable to UHS

$

188,050

 

 

$

1.94

 

 

$

191,054

 

 

$

1.94

 

 


Universal Health Services, Inc.

 

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

 

For the six months ended June 30, 2017 and 2016

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

% Net

 

 

Six months ended

 

 

% Net

 

 

June 30, 2017

 

 

revenues

 

 

June 30, 2016

 

 

revenues

 

Net income attributable to UHS

$

391,449

 

 

 

 

 

 

$

376,336

 

 

 

 

 

   Depreciation and amortization

 

223,910

 

 

 

 

 

 

 

205,460

 

 

 

 

 

   Interest expense, net

 

71,427

 

 

 

 

 

 

 

60,042

 

 

 

 

 

   Provision for income taxes

 

211,782

 

 

 

 

 

 

 

218,402

 

 

 

 

 

Unadjusted EBITDA

$

898,568

 

 

 

17.2

%

 

$

860,240

 

 

 

17.6

%

EHR-related net income attributable to noncontrolling interests, pre-tax

 

(173

)

 

 

 

 

 

 

(1,417

)

 

 

 

 

Adjusted EBITDA

$

898,395

 

 

 

17.2

%

 

$

858,823

 

 

 

17.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

5,225,214

 

 

 

 

 

 

$

4,880,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

Six months ended

 

 

June 30, 2017

 

 

June 30, 2016

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

391,449

 

 

$

4.03

 

 

$

376,336

 

 

$

3.81

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of ASU 2016-09

 

(8,132

)

 

 

(0.08

)

 

 

-

 

 

 

-

 

After-tax impact of EHR-related items

 

9,111

 

 

 

0.09

 

 

 

10,711

 

 

 

0.11

 

Subtotal

$

979

 

 

$

0.01

 

 

$

10,711

 

 

$

0.11

 

Adjusted net income attributable to UHS

$

392,428

 

 

$

4.04

 

 

$

387,047

 

 

$

3.92

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Six months

 

 

 

ended June 30,

 

 

ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net income

 

$

190,388

 

 

$

195,449

 

 

$

400,915

 

 

$

411,168

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized derivative gains (losses) on cash flow hedges

 

 

(129

)

 

 

(3,769

)

 

 

2,937

 

 

 

(18,068

)

Amortization of terminated hedge

 

 

0

 

 

 

(83

)

 

 

0

 

 

 

(167

)

Unrealized gain (loss) on marketable security

 

 

3,066

 

 

 

(621

)

 

 

4,160

 

 

 

(621

)

Foreign currency translation adjustment

 

 

1,713

 

 

 

(4,163

)

 

 

8,949

 

 

 

1,823

 

Other comprehensive income (loss) before tax

 

 

4,650

 

 

 

(8,636

)

 

 

16,046

 

 

 

(17,033

)

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

 

 

1,095

 

 

 

(1,667

)

 

 

2,646

 

 

 

(7,027

)

Total other comprehensive income (loss), net of tax

 

 

3,555

 

 

 

(6,969

)

 

 

13,400

 

 

 

(10,006

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

193,943

 

 

 

188,480

 

 

 

414,315

 

 

 

401,162

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

4,994

 

 

 

9,872

 

 

 

9,466

 

 

 

34,832

 

Comprehensive income attributable to UHS

 

$

188,949

 

 

$

178,608

 

 

$

404,849

 

 

$

366,330

 

 


Universal Health Services, Inc.

 

Condensed Consolidated Balance Sheets

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

66,446

 

 

$

33,747

 

Accounts receivable, net

 

 

1,456,999

 

 

 

1,439,553

 

Supplies

 

 

130,698

 

 

 

125,365

 

Other current assets

 

 

109,017

 

 

 

82,706

 

Total current assets

 

 

1,763,160

 

 

 

1,681,371

 

Property and equipment

 

 

7,604,631

 

 

 

7,314,437

 

Less: accumulated depreciation

 

 

(3,162,756

)

 

 

(2,983,481

)

 

 

 

4,441,875

 

 

 

4,330,956

 

Other assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

3,803,386

 

 

 

3,784,106

 

Deferred charges

 

 

11,720

 

 

 

13,520

 

Deferred income taxes

 

 

1,301

 

 

 

1,234

 

Other

 

 

531,045

 

 

 

506,615

 

Total Assets

 

$

10,552,487

 

 

$

10,317,802

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

126,109

 

 

$

105,895

 

Accounts payable and accrued liabilities

 

 

1,182,396

 

 

 

1,209,329

 

Federal and state taxes

 

 

13,724

 

 

 

2,149

 

Total current liabilities

 

 

1,322,229

 

 

 

1,317,373

 

 

 

 

 

 

 

 

 

 

Other noncurrent liabilities

 

 

282,732

 

 

 

275,167

 

Long-term debt

 

 

3,988,912

 

 

 

4,030,230

 

Deferred income taxes

 

 

73,813

 

 

 

88,119

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

6,974

 

 

 

9,319

 

 

 

 

 

 

 

 

 

 

UHS common stockholders' equity

 

 

4,812,854

 

 

 

4,533,220

 

Noncontrolling interest

 

 

64,973

 

 

 

64,374

 

Total equity

 

 

4,877,827

 

 

 

4,597,594

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

10,552,487

 

 

$

10,317,802

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

(unaudited)

 

 

Six months

 

 

ended June 30,

 

 

2017

 

 

2016

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

Net income

$

400,915

 

 

$

411,168

 

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

 

 

 

 

 

 

 

Depreciation & amortization

 

223,910

 

 

 

205,460

 

Stock-based compensation expense

 

29,053

 

 

 

24,693

 

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

 

 

 

 

 

 

 

   Accounts receivable

 

941

 

 

 

(45,729

)

   Accrued interest

 

211

 

 

 

9,158

 

   Accrued and deferred income taxes

 

(5,529

)

 

 

17,997

 

   Other working capital accounts

 

(93,715

)

 

 

123,315

 

   Other assets and deferred charges

 

(19,927

)

 

 

(8,149

)

   Other

 

(23,411

)

 

 

52,050

 

   Excess income tax benefits related to stock-based compensation

 

0

 

 

 

35,247

 

   Accrued insurance expense, net of commercial premiums paid

 

58,903

 

 

 

44,231

 

   Payments made in settlement of self-insurance claims

 

(37,759

)

 

 

(33,012

)

Net cash provided by operating activities

 

533,592

 

 

 

836,429

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

Property and equipment additions, net of disposals

 

(262,452

)

 

 

(247,715

)

Acquisition of property and businesses

 

(19,610

)

 

 

(27,525

)

Increase in capital reserves of commercial insurance subsidiary

 

(3,000

)

 

 

0

 

Costs incurred for purchase and implementation of information technology application

 

(19,448

)

 

 

0

 

Net cash used in investing activities

 

(304,510

)

 

 

(275,240

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

Reduction of long-term debt

 

(45,675

)

 

 

(843,351

)

Additional borrowings

 

21,600

 

 

 

1,022,239

 

Acquisition of noncontrolling interests in majority owned businesses

 

0

 

 

 

(418,000