uhs-8k_20180228.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): February 28, 2018

 

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 February 28, 2018, 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 28, 2018.

 

 

 

Exhibit Index

 

Exhibit No.

  

Exhibit

 

 

99.1

  

Universal Health Services, Inc., press release, dated February 28, 2018.

 

 


 

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 28, 2018

 

 

 

 

uhs-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

February 28, 2018

 

CONTACT:

Steve Filton

 

Chief Financial Officer

 

610-768-3300

 

 

UNIVERSAL HEALTH SERVICES, INC.

REPORTS 2017 FOURTH QUARTER AND FULL YEAR EARNINGS

AND 2018 GUIDANCE

 

Consolidated Results of Operations, As Reported and As Adjusted  – Three-month periods ended December 31, 2017 and 2016:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $219.6 million, or $2.31 per diluted share, during the fourth quarter of 2017 as compared to $174.2 million, or $1.78 per diluted share, during the comparable quarter of 2016.  Net revenues increased 6.7% to $2.64 billion during the fourth quarter of 2017 as compared to $2.48 billion during the fourth quarter of 2016.

 

For the three-month period ended December 31, 2017, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), was $189.6 million, or $2.00 per diluted share, as compared to $176.0 million, or $1.80 per diluted share, during the fourth quarter of 2016.  

 

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2017, is a net aggregate favorable after-tax impact of $30.0 million, or $.31 per diluted share, consisting of:

 

a favorable after-tax impact of $30.0 million, or $.32 per diluted share, resulting from a reduction in our net deferred income tax liability recorded in connection with the Tax Cuts and Jobs Act of 2017 (the “TCJA-17”) which reduced the U.S. federal corporate tax rate to 21% from 35%, effective January 1, 2018;

 

a favorable after-tax impact of $13.5 million, or $.14 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;

 

an unfavorable after-tax impact of $11.3 million, or $.12 per diluted share, due to the one-time repatriation tax incurred pursuant to the TCJA-17 (incurred in connection with our behavioral health care facilities located in the U.K. and Puerto Rico), and;

 

an unfavorable after-tax impact of $2.3 million, or $.03 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.

 


As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization (“EBITDA”), increased 7.1% to $447.0 million during the fourth quarter of 2017 as compared to $417.1 million during the fourth quarter of 2016.

 

Consolidated Results of Operations, As Reported and As Adjusted  – Twelve-month periods ended December 31, 2017 and 2016:

Reported net income attributable to UHS was $752.3 million, or $7.81 per diluted share, during the full year of 2017 as compared to $702.4 million, or $7.14 per diluted share, during 2016.  

 

Net revenues increased 6.6% to $10.41 billion during 2017 as compared to $9.77 billion during 2016. As calculated on the attached Supplemental Schedule, our EBITDA increased 3.4% to $1.71 billion during 2017 as compared to $1.65 billion during 2016.

 

As reflected on the Supplemental Schedule, included in our reported results during the full year of 2017, is a net aggregate favorable after-tax impact of $26.8 million, or $.28 per diluted share, consisting of:

 

a favorable after-tax impact of $30.0 million, or $.32 per diluted share, resulting from a reduction in our net deferred income tax liability resulting from lower federal income tax rates beginning January 1, 2018 pursuant to the TCJA-17;

 

a favorable after-tax impact of $22.1 million, or $.23 per diluted share, resulting from our January 1, 2017 adoption of ASU 2016-09, as discussed below;

 

an unfavorable after-tax impact of $11.3 million, or $.12 per diluted share, due to the one-time repatriation tax incurred pursuant to the TCJA of 2017, and;

 

an unfavorable after-tax impact of $14.0 million, or $.15 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 twelve-month periods ended December 31, 2017 and 2016:

During the fourth quarter of 2017, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) increased 7.3% and adjusted patient days increased 5.2%, as compared to the fourth quarter of 2016. Net revenues from our acute care services increased 6.5% during the fourth quarter of 2017 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission decreased 0.1% while net revenue per adjusted patient day increased 1.9% during the fourth quarter of 2017 as compared to the comparable quarter of 2016.

 

During the twelve-month period ended December 31, 2017, at our acute care hospitals on a same facility basis, adjusted admissions increased 5.5% and adjusted patient days increased 2.8%, as compared to the full year of 2016. Net revenues from our acute care services increased 4.7% during the full year of 2017 as compared to 2016. At these facilities, net revenue per adjusted admission decreased 0.3% while net revenue per adjusted patient day increased 2.4% during 2017 as compared to 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 $406 million and $399 million during the three-month periods ended December 31, 2017 and 2016, respectively, and $1.77 billion and $1.45 billion during the twelve-month periods ended December 31, 2017 and 2016, respectively. The provision for doubtful accounts at our acute care hospitals amounted to approximately $182 million and $136 million during the three-month periods ended December 31, 2017 and 2016, respectively, and $756 million and $628 million during the twelve-month periods ended December 31, 2017 and 2016, respectively.        

 

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2017 and 2016:

During the fourth quarter of 2017, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 2.5% while adjusted patient days decreased 0.7% as compared to the fourth quarter of 2016. At these facilities, net revenue per adjusted admission decreased 0.3% while net revenue per adjusted patient day increased 2.9% during the fourth quarter of 2017 as compared to the comparable quarter in 2016. On a same facility basis, our behavioral health care services’ net revenues increased 1.6% during the fourth quarter of 2017 as compared to the fourth quarter of 2016.    

 

During the twelve-month period ended December 31, 2017, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 2.4% while adjusted patient days increased 0.2% as compared to the full year of 2016. At these facilities, net revenue per adjusted admission decreased 0.4% while net revenue per adjusted patient day increased 1.9% during the full year of 2017 as compared to 2016. On a same facility basis, our behavioral health care services’ net revenues increased 1.7% during 2017 as compared to 2016.    

 

Net Cash Provided by Operating Activities and Share Repurchase Program:

For the twelve months ended December 31, 2017, our net cash provided by operating activities was $1.18 billion as compared to $1.33 billion generated during the full year of 2016. The $151 million decrease was due to: (i) a $144 million unfavorable change in cash flows from foreign currency forward exchange contracts related to our investments in the U.K; (ii) a $90 million unfavorable change in other working capital accounts resulting primarily from changes in accounts payable and accrued expenses due to timing of disbursements, partially offset by; (iii) $83 million of other net favorable changes including a $63 million favorable change in accounts receivable.

 

In November of 2017, our Board of Directors authorized a $400 million increase to our stock repurchase program, which increased the aggregate authorization to $1.2 billion from the previous $800 million authorization approved during 2016 and 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 fourth quarter of 2017, we have repurchased approximately 1.0 million shares at an aggregate cost of $100.8 million (approximately $100 per share).  During the twelve months of 2017, we have repurchased approximately 2.96 million shares at an aggregate cost of $322.2 million (approximately $109 per share). Since inception of the program through December 31, 2017, we have repurchased approximately 7.35 million shares at an aggregate cost of $836.3 million (approximately $114 per share).  

 

2018 Full Year Guidance Range:

Reflected below is our 2018 guidance range for consolidated net revenues, earnings before interest, taxes, depreciation & amortization (“EBITDA”), earnings per diluted share (“EPS-diluted”) and


capital expenditures.  EBITDA is a non-GAAP financial measure 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, 2017. Please see the Supplemental Non-GAAP Disclosures - 2018 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, 2018

 

       Low

       High

Net revenues

$10.923 billion

$11.063 billion

EBITDA

$1.758 billion

$1.837 billion  

Adjusted EPS-diluted

$9.25 per share

$9.90 per share

Capital expenditures

$600 million

$625 million

 

Our 2018 guidance contains a number of assumptions including, but not limited to, the following:

 

This guidance excludes the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as, but not limited to, the impact of 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 that differ from included assumptions 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.

 

Our net revenues are estimated to be approximately $10.923 billion to $11.063 billion representing an increase of approximately 5% to 6% over our 2017 net revenues of approximately $10.410 billion.    

 

This adjusted EPS-diluted guidance range represents an increase of approximately 23% to 31% over the adjusted net income attributable to UHS of $7.53 per diluted share for the year ended December 31, 2017, as calculated on the attached Supplemental Schedule.

 

This adjusted EPS-diluted guidance range includes the estimated favorable impact on our 2018 provision for income taxes and net income attributable to UHS, resulting from the TCJA-17, amounting to approximately $142 million to $152 million, or $1.52 to $1.63 per diluted share.      

 

This guidance range, like our adjusted earnings for 2017 as discussed above, excludes 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, as discussed below.   

 

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 twelve-month periods ended December 31, 2017, we recorded reductions to our provision for income taxes of $13.5 million and $22.1 million, respectively, which resulted in a corresponding increases in our net income attributable to UHS of $13.5 million, or $.14 per diluted share, during the fourth quarter of 2017 and $22.1 million, or $.23 per diluted share, during the full year 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 March 1, 2018. 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:

One of the nation’s largest and most respected hospital companies, Universal Health Services, Inc. (“UHS”) has built an impressive record of achievement and performance. Growing steadily since its inception into an esteemed Fortune 500 corporation, UHS today has annual revenue exceeding $10 billion. In 2017, UHS was recognized as one of the World’s Most Admired Companies by Fortune; ranked #276 on the Fortune 500, and listed #275 in Forbes inaugural ranking of America’s Top 500 Public Companies.

 

Our operating philosophy is as effective today as it was 40 years ago, enabling us to provide compassionate care to our patients and their loved ones: Build or acquire high quality hospitals in rapidly growing markets, invest in the people and equipment needed to allow each facility to thrive, and become the leading healthcare provider in each community we serve.

 

Headquartered in King of Prussia, PA, UHS has more than 83,000 employees and through its subsidiaries operates 326 inpatient acute care hospitals and behavioral health facilities and 32 outpatient and other facilities located in 37 states, Washington, D.C., 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, 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 operating income, operating margin, adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share and 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 related to the implementation of EHR applications at our acute care hospitals, the impact on our 2017 provision for income taxes and net income attributable to UHS resulting from the TCJA-17, the impact on our provision for income taxes and net income attributable to UHS resulting from our adoption of ASU 2016-09, and other potential items that are nonrecurring or non-operational in nature including, but not limited to, costs related to 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 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, 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

 

 

Twelve months

 

 

 

ended December 31,

 

 

ended December 31,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net revenues before provision for doubtful accounts

 

$

2,849,971

 

 

$

2,638,436

 

 

$

11,278,942

 

 

$

10,507,788

 

Less: Provision for doubtful accounts

 

 

207,184

 

 

 

162,751

 

 

 

869,077

 

 

 

741,578

 

Net revenues

 

 

2,642,787

 

 

 

2,475,685

 

 

 

10,409,865

 

 

 

9,766,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

1,254,851

 

 

 

1,156,729

 

 

 

4,980,637

 

 

 

4,585,530

 

Other operating expenses

 

 

624,986

 

 

 

614,490

 

 

 

2,493,062

 

 

 

2,359,339

 

Supplies expense

 

 

284,854

 

 

 

263,872

 

 

 

1,105,096

 

 

 

1,031,337

 

Depreciation and amortization

 

 

113,638

 

 

 

107,436

 

 

 

447,765

 

 

 

416,608

 

Lease and rental expense

 

 

25,714

 

 

 

24,267

 

 

 

103,127

 

 

 

97,324

 

Electronic health records incentive income

 

 

 

 

 

(5,339

)

 

 

 

 

 

(5,339

)

 

 

 

2,304,043

 

 

 

2,161,455

 

 

 

9,129,687

 

 

 

8,484,799

 

Income from operations

 

 

338,744

 

 

 

314,230

 

 

 

1,280,178

 

 

 

1,281,411

 

Interest expense, net

 

 

36,786

 

 

 

32,882

 

 

 

145,169

 

 

 

125,053

 

Income before income taxes

 

 

301,958

 

 

 

281,348

 

 

 

1,135,009

 

 

 

1,156,358

 

Provision for income taxes

 

 

76,923

 

 

 

102,610

 

 

 

363,697

 

 

 

409,187

 

Net income

 

 

225,035

 

 

 

178,738

 

 

 

771,312

 

 

 

747,171

 

Less:  Net income attributable to noncontrolling interests

 

 

5,426

 

 

 

4,530

 

 

 

19,009

 

 

 

44,762

 

Net income attributable to UHS

 

$

219,609

 

 

$

174,208

 

 

$

752,303

 

 

$

702,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS (a)

 

$

2.32

 

 

$

1.80

 

 

$

7.86

 

 

$

7.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS (a)

 

$

2.31

 

 

$

1.78

 

 

$

7.81

 

 

$

7.14

 

 



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,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(a) Earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to UHS

 

$

219,609

 

 

$

174,208

 

 

$

752,303

 

 

$

702,409

 

Less: Net income attributable to unvested restricted share grants

 

 

(105

)

 

 

(72

)

 

 

(362

)

 

 

(314

)

Net income attributable to UHS - basic and diluted

 

$

219,504

 

 

$

174,136

 

 

$

751,941

 

 

$

702,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic

 

 

94,530

 

 

 

96,998

 

 

 

95,652

 

 

 

97,208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS:

 

$

2.32

 

 

$

1.80

 

 

$

7.86

 

 

$

7.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

94,530

 

 

 

96,998

 

 

 

95,652

 

 

 

97,208

 

Add: Other share equivalents

 

 

379

 

 

 

917

 

 

 

673

 

 

 

1,172

 

Weighted average number of common shares and equiv. - diluted

 

 

94,909

 

 

 

97,915

 

 

 

96,325

 

 

 

98,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS:

 

$

2.31

 

 

$

1.78

 

 

$

7.81

 

 

$

7.14

 

 


Universal Health Services, Inc.

 

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

 

For the Three Months ended December 31, 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

 

 

December 31, 2017

 

 

revenues

 

 

December 31, 2016

 

 

revenues

 

Net income attributable to UHS

$

219,609

 

 

 

 

 

 

$

174,208

 

 

 

 

 

   Depreciation and amortization

 

113,638

 

 

 

 

 

 

 

107,436

 

 

 

 

 

   Interest expense, net

 

36,786

 

 

 

 

 

 

 

32,882

 

 

 

 

 

   Provision for income taxes

 

76,923

 

 

 

 

 

 

 

102,610

 

 

 

 

 

Unadjusted EBITDA

$

446,956

 

 

 

16.9

%

 

$

417,136

 

 

 

16.8

%

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

 

(29

)

 

 

 

 

 

 

(128

)

 

 

 

 

Adjusted EBITDA

$

446,927

 

 

 

16.9

%

 

$

417,008

 

 

 

16.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

2,642,787

 

 

 

 

 

 

$

2,475,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Three months ended

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

219,609

 

 

$

2.31

 

 

$

174,208

 

 

$

1.78

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of ASU 2016-09

 

(13,477

)

 

 

(0.14

)

 

 

-

 

 

 

-

 

After-tax impact of EHR-related items

 

2,255

 

 

 

0.03

 

 

 

1,770

 

 

 

0.02

 

Impact of TCJA-17-Deferred tax

 

(30,000

)

 

 

(0.32

)

 

 

-

 

 

 

-

 

Impact of TCJA-17-Repatriation tax

 

11,250

 

 

 

0.12

 

 

 

-

 

 

 

-

 

Subtotal

$

(29,972

)

 

$

(0.31

)

 

$

1,770

 

 

$

0.02

 

Adjusted net income attributable to UHS

$

189,637

 

 

$

2.00

 

 

$

175,978

 

 

$

1.80

 

 


Universal Health Services, Inc.

 

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

 

For the Twelve Months ended December 31, 2017 and 2016

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended

 

 

% Net

 

 

Twelve months ended

 

 

% Net

 

 

December 31, 2017

 

 

revenues

 

 

December 31, 2016

 

 

revenues

 

Net income attributable to UHS

$

752,303

 

 

 

 

 

 

$

702,409

 

 

 

 

 

   Depreciation and amortization

 

447,765

 

 

 

 

 

 

 

416,608

 

 

 

 

 

   Interest expense, net

 

145,169

 

 

 

 

 

 

 

125,053

 

 

 

 

 

   Provision for income taxes

 

363,697

 

 

 

 

 

 

 

409,187

 

 

 

 

 

Unadjusted EBITDA

$

1,708,934

 

 

 

16.4

%

 

$

1,653,257

 

 

 

16.9

%

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

 

(229

)

 

 

 

 

 

 

(1,746

)

 

 

 

 

Adjusted EBITDA

$

1,708,705

 

 

 

16.4

%

 

$

1,651,511

 

 

 

16.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

10,409,865

 

 

 

 

 

 

$

9,766,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended

 

 

Twelve months ended

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

752,303

 

 

$

7.81

 

 

$

702,409

 

 

$

7.14

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of ASU 2016-09

 

(22,096

)

 

 

(0.23

)

 

 

-

 

 

 

-

 

After-tax impact of EHR-related items

 

14,002

 

 

 

0.15

 

 

 

17,830

 

 

 

0.18

 

Impact of TCJA-17-Deferred tax

 

(30,000

)

 

 

(0.32

)

 

 

-

 

 

 

-

 

Impact of TCJA-17-Repatriation tax

 

11,250

 

 

 

0.12

 

 

 

-

 

 

 

-

 

Subtotal

$

(26,844

)

 

$

(0.28

)

 

$

17,830

 

 

$

0.18

 

Adjusted net income attributable to UHS

$

725,459

 

 

$

7.53

 

 

$

720,239

 

 

$

7.32

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Twelve months

 

 

 

ended December 31,

 

 

ended December 31,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net income

 

$

225,035

 

 

$

178,738

 

 

$

771,312

 

 

$

747,171

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized derivative gains on cash flow hedges

 

 

3,132

 

 

 

13,082

 

 

 

6,679

 

 

 

1,438

 

Amortization of terminated hedge

 

 

0

 

 

 

0

 

 

 

0

 

 

 

(167

)

Unrealized loss on marketable security

 

 

(3,814

)

 

 

(1,474

)

 

 

(2,169

)

 

 

(2,229

)

Minimum pension liability

 

 

4,070

 

 

 

13,356

 

 

 

4,070

 

 

 

13,356

 

Foreign currency translation adjustment

 

 

16,746

 

 

 

(888

)

 

 

26,678

 

 

 

(10,038

)

Other comprehensive income before tax

 

 

20,134

 

 

 

24,076

 

 

 

35,258

 

 

 

2,360

 

Income tax expense related to items of other comprehensive income

 

 

729

 

 

 

9,329

 

 

 

2,664

 

 

 

4,648

 

Total other comprehensive income (loss), net of tax

 

 

19,405

 

 

 

14,747

 

 

 

32,594

 

 

 

(2,288

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

244,440

 

 

 

193,485

 

 

 

803,906

 

 

 

744,883

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

5,426

 

 

 

4,530

 

 

 

19,009

 

 

 

44,762

 

Comprehensive income attributable to UHS

 

$

239,014

 

 

$

188,955

 

 

$

784,897

 

 

$

700,121

 

 


Universal Health Services, Inc.

 

Condensed Consolidated Balance Sheets

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

74,423

 

 

$

33,747

 

Accounts receivable, net

 

 

1,500,898

 

 

 

1,439,553

 

Supplies

 

 

136,177

 

 

 

125,365

 

Other current assets

 

 

86,504

 

 

 

82,706

 

Total current assets

 

 

1,798,002

 

 

 

1,681,371

 

Property and equipment

 

 

7,921,126

 

 

 

7,314,437

 

Less: accumulated depreciation

 

 

(3,349,289

)

 

 

(2,983,481

)

 

 

 

4,571,837

 

 

 

4,330,956

 

Other assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

3,825,157

 

 

 

3,784,106

 

Deferred charges

 

 

9,787

 

 

 

13,520

 

Deferred income taxes

 

 

3,007

 

 

 

1,234

 

Other

 

 

554,038

 

 

 

506,615

 

Total Assets

 

$

10,761,828

 

 

$

10,317,802

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

545,619

 

 

$

105,895

 

Accounts payable and accrued liabilities

 

 

1,284,081

 

 

 

1,209,329

 

Federal and state taxes

 

 

18,334

 

 

 

2,149

 

Total current liabilities

 

 

1,848,034

 

 

 

1,317,373

 

 

 

 

 

 

 

 

 

 

Other noncurrent liabilities

 

 

306,304

 

 

 

275,167

 

Long-term debt

 

 

3,494,390

 

 

 

4,030,230

 

Deferred income taxes

 

 

54,962

 

 

 

88,119

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

6,702

 

 

 

9,319

 

 

 

 

 

 

 

 

 

 

UHS common stockholders' equity

 

 

4,989,514

 

 

 

4,533,220

 

Noncontrolling interest

 

 

61,922

 

 

 

64,374

 

Total equity

 

 

5,051,436

 

 

 

4,597,594

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

10,761,828

 

 

$

10,317,802

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

(unaudited)

 

 

Twelve months

 

 

ended December 31,

 

 

2017

 

 

2016

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

Net income

$

771,312

 

 

$

747,171

 

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

 

 

 

 

 

 

 

Depreciation & amortization

 

447,883

 

 

 

416,608

 

Stock-based compensation expense

 

56,738