uhs-8k_20190725.htm
false UNIVERSAL HEALTH SERVICES INC 0000352915 0000352915 2019-07-25 2019-07-25

 

 

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, 2019

 

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 July 25, 2019, 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, 2019.

 

 

 

Exhibit Index

 

Exhibit No.

  

Exhibit

 

 

99.1

  

Universal Health Services, Inc., press release, dated July 25, 2019.

 

 


 

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 26, 2019

 

 

 

 

uhs-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

July 25, 2019

 

CONTACT:

Steve Filton

 

Chief Financial Officer

 

610-768-3300

 

 

UNIVERSAL HEALTH SERVICES, INC.

REPORTS 2019 SECOND QUARTER FINANCIAL RESULTS AND INCREASES TO STOCK REPURCHASE PROGRAM AND CASH DIVIDEND

 

Consolidated Results of Operations, As Reported and As Adjusted  – Three-month periods ended June 30, 2019 and 2018:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $238.3 million, or $2.66 per diluted share, during the second quarter of 2019 as compared to $226.1 million, or $2.39 per diluted share, during the comparable quarter of 2018.  Net revenues increased 6.5% to $2.855 billion during the second quarter of 2019 as compared to $2.681 billion during the second quarter of 2018.

 

For the three-month period ended June 30, 2019, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), was $247.2 million, or $2.76 per diluted share, as compared to $233.3 million, or $2.47 per diluted share, during the second quarter of 2018.  

 

Included in our reported and our adjusted net income attributable to UHS is a pre-tax unrealized gain of $6.9 million, or $.06 per diluted share, during the second quarter of 2019, and $8.0 million, or $.06 per diluted share, during the second quarter of 2018. These unrealized gains, which are included in “Other (income) expense, net” on the accompanying consolidated statements of income, resulted from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale.  

 

As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2019, is an aggregate net unfavorable after-tax impact of $8.9 million, or $.10 per diluted share, resulting from: (i) an unfavorable after-tax impact of $8.4 million, or $.09 per diluted share, resulting from an $11.0 million pre-tax increase in the reserve (“DOJ Reserve”) established in connection with the discussions with the Department of Justice (“DOJ”), which have recently resulted in an agreement in principle with the DOJ’s Civil Division (which is subject to certain conditions as discussed below), and; (ii) an unfavorable after-tax impact of $509,000, or $.01 per diluted share, resulting from our adoption of ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”).

 

As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2018, is a net aggregate unfavorable after-tax impact of $7.3 million, or $.08 per diluted share, substantially all of which related to the unfavorable after-tax impact of $7.2 million, or $.08 per diluted share, resulting from a $9.5 million pre-tax increase in the DOJ Reserve.  

 


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 $471.5 million during the second quarter of 2019 as compared to $444.7 million during the second quarter of 2018.  Our adjusted earnings before interest, taxes, depreciation & amortization (“Adjusted EBITDA net of NCI”), which excludes the impacts of our adoption of ASU 2016-09, other (income) expense, net, as well as the unfavorable impacts of the above-mentioned increases in the DOJ Reserve, was $474.8 million during the second quarter of 2019 as compared to $438.8 million during the second quarter of 2018.

 

Consolidated Results of Operations, As Reported and As Adjusted  – Six-month periods ended June 30, 2019 and 2018:

Reported net income attributable to UHS was $472.5 million, or $5.23 per diluted share, during the six-month period ended June 30, 2019 as compared to $449.9 million, or $4.76 per diluted share, during the comparable six-month period of 2018.  Net revenues increased 5.4% to $5.660 billion during the first six months of 2019 as compared to $5.369 billion during the first six months of 2018.

 

For the six-month period ended June 30, 2019, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $470.5 million, or $5.21 per diluted share, as compared to $465.5 million, or $4.92 per diluted share, during the comparable six-month period of 2018.  

 

Included in our reported and our adjusted net income attributable to UHS is a pre-tax unrealized gain of $2.6 million, or $.02 per diluted share, during the first six months of 2019, and $8.0 million, or $.06 per diluted share, during the comparable six-month period of 2018. As discussed above, these unrealized gains resulted from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale.  

 

As reflected on the Supplemental Schedule, included in our reported results during the six-month period ended June 30, 2019, is an aggregate net favorable after-tax impact of $2.0 million, or $.02 per diluted share, resulting from: (i) an unfavorable after-tax impact of $8.4 million, or $.09 per diluted share, resulting from an $11.0 million pre-tax increase in the DOJ Reserve, offset by; (ii) a favorable after-tax impact of $10.4 million, or $.11 per diluted share, resulting from our adoption of ASU 2016-09.

 

As reflected on the Supplemental Schedule, included in our reported results during the six-month period ended June 30, 2018, is a net aggregate unfavorable after-tax impact of $15.6 million, or $.16 per diluted share, consisting of: (i) an unfavorable after-tax impact of $17.1 million, or $.18 per diluted share, resulting from a $22.5 million pre-tax increase in the DOJ Reserve, partially offset by; (ii) a favorable after-tax impact of $1.5 million, or $.02 per diluted share, resulting from our adoption of ASU 2016-09.

 

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 $924.3 million during the six-month period ended June 30, 2019 as compared to $886.8 million during the six-month period ended June 30, 2018.  Our adjusted earnings before interest, taxes, depreciation & amortization (“Adjusted EBITDA net of NCI”), which excludes the impacts of our adoption of ASU 2016-09, other (income) expense, net, as well as the unfavorable impacts of the above-


mentioned increases in the DOJ Reserve, was $932.0 million during the six-month period ended June 30, 2019 as compared to $893.9 million during the six-month period ended June 30, 2018.

 

Acute Care Services – Three and six-month periods ended June 30, 2019 and 2018:

During the second quarter of 2019, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) increased 5.0% and adjusted patient days increased 5.2%, as compared to the second quarter of 2018. At these facilities, net revenue per adjusted admission increased 3.5% while net revenue per adjusted patient day increased 3.3% during the second quarter of 2019 as compared to the second quarter of 2018. Net revenues from our acute care services on a same facility basis increased 9.0% during the second quarter of 2019 as compared to the second quarter of 2018.

 

During the six-month period ended June 30, 2019, at our acute care hospitals on a same facility basis, adjusted admissions increased 5.0% and adjusted patient days increased 4.8%, as compared to the first six months of 2018. At these facilities, net revenue per adjusted admission increased 1.5% while net revenue per adjusted patient day increased 1.6% during the six-month period ended June 30, 2019 as compared to the comparable six-month period of 2018. Net revenues from our acute care services on a same facility basis increased 6.8% during the first six months of 2019 as compared to the first six months of 2018.

 

Behavioral Health Care Services – Three and six-month periods ended June 30, 2019 and 2018:

During the second quarter of 2019, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 0.5% while adjusted patient days increased 0.3% as compared to the second quarter of 2018. At these facilities, net revenue per adjusted admission increased 2.2% while net revenue per adjusted patient day increased 2.4% during the second quarter of 2019 as compared to the comparable quarter in 2018. On a same facility basis, our behavioral health care services’ net revenues increased 2.7% during the second quarter of 2019 as compared to the second quarter of 2018.    

 

During the six-month period ended June 30, 2019, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 1.7% while adjusted patient days increased 0.6% as compared to the comparable six-month period of 2018. At these facilities, net revenue per adjusted admission increased 1.3% while net revenue per adjusted patient day increased 2.4% during the first six months of 2019 as compared to the comparable six-month period in 2018. On a same facility basis, our behavioral health care services’ net revenues increased 2.9% during the six-month period ended June 30, 2019 as compared to the comparable six-month period of 2018.    

 

Net Cash Provided by Operating Activities:

For the six months ended June 30, 2019, our net cash provided by operating activities increased to $624 million as compared to $607 million generated during the comparable six-month period of 2018. The $17 million net increase was due to: (i) a favorable change of $40 million resulting from an increase in net income plus/minus depreciation and amortization expense, stock-based compensation expense and net gains on sale of assets and businesses; (ii) an unfavorable change of $37 million in accounts receivable, and; (iii) $14 million of other combined net favorable changes.  

 

In conjunction with our January 1, 2019 adoption of ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities”, we have included the net cash inflows or outflows, which were received or paid in connection with foreign exchange contracts that hedge our investment in the U.K., in investing cash flows on the consolidated statements of cash flows.  Prior to 2019, these net


inflows/outflows were included in operating cash flows. Prior period amounts have been reclassified to conform with current year presentation on the consolidated statements of cash flows included herein.        

 

Increases to Stock Repurchase Program and Cash Dividend:

On July 25, 2019, our Board of Directors authorized a $1.0 billion increase to our stock repurchase program, which increased the aggregate authorization to $2.7 billion from the previous $1.7 billion authorization approved in various increments since 2014. Pursuant to this program, which currently has an aggregate available repurchase authorization of $1.017 billion, 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. 

 

In conjunction with our previously approved stock repurchase programs, during the second quarter of 2019, we have repurchased approximately 2.72 million shares at an aggregate cost of $339.2 million (approximately $125 per share).  During the first six months of 2019, we have repurchased approximately 3.56 million shares at an aggregate cost of $445.6 million (approximately $125 per share). Since inception of the program in 2014 through June 30, 2019, we have repurchased approximately 14.23 million shares at an aggregate cost of approximately $1.68 billion (approximately $118 per share). 

 

Also on July 25, 2019, our Board of Directors authorized a $.10 per share increase in our cash dividend to $.20 per share. This cash dividend will be paid on September 16, 2019 to shareholders of record as of September 3, 2019.    

 

Agreement in Principle with DOJ’s Civil Division and DOJ Reserve:

We have recently reached an agreement in principle with the DOJ’s Civil Division, and on behalf of various states’ attorneys general offices, to resolve the civil aspect of the government’s investigation of our behavioral health care facilities for $127 million subject to requisite approvals and preparation and execution of definitive settlement and related agreements.  We have further been advised that the previously disclosed investigations being conducted by the DOJ’s Criminal Frauds Section in connection with these matters have been closed.  We are awaiting the initial draft of a potential corporate integrity agreement with the Office of Inspector General for the United States Department of Health and Human Services (“OIG”) which we expect will be part of the overall settlement of this matter.

In connection with the agreement in principle with the DOJ’s Civil Division, during the three and six-month periods ended June 30, 2019, we recorded a pre-tax increase of approximately $11.0 million in the DOJ Reserve, which includes related fees and costs due to or on behalf of third-parties.  The aggregate pre-tax DOJ Reserve amounted to $134 million as of June 30, 2019 and $123 million as of December 31, 2018. Our financial statements assume that the amounts included in the aggregate pre-tax DOJ Reserve are fully deductible for federal and state income tax purposes.

Since the agreement in principle with the DOJ’s Civil Division is subject to certain required approvals and negotiation and execution of definitive settlement agreements, as well as negotiation and execution of a potential corporate integrity agreement with the OIG, we can provide no assurance that definitive agreements will ultimately be finalized. We therefore can provide no assurance that final amounts paid in settlement or otherwise, or associated costs, or the income tax deductibility of such payments, will not differ materially from our established reserve and assumptions related to income tax deductibility. Please see Item 1-Legal Proceedings in our Form 10-Q for the quarterly period ended March 31, 2019 for additional disclosure in connection with this matter.


 

Conference call information:        

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on July 26, 2019. 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.  Also, a replay of the call will be available following the conclusion of the live call and will be available for one full year.

Adoption of ASU 2016-02, “Leases (Topic 842): Amendments to the FASB Accounting Standards Codification”:

Effective January 1, 2019, we adopted ASU 2016-02 which requires companies to, among other things, recognize lease assets and lease liabilities on the balance sheet. As a result of our adoption of ASU 2016-02, our consolidated balance sheet as of June 30, 2019 includes right of use assets-operating leases ($332.1 million) and operating lease liabilities ($56.4 million current and $275.7 million noncurrent).  Prior period financial statements were not adjusted for the effects of this new standard.    

 

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 our inception into an esteemed Fortune 500 corporation, our annual revenues were $10.77 billion during 2018. In 2019, UHS was again recognized as one of the World’s Most Admired Companies by Fortune; ranked #293 on the Fortune 500; and in 2017, 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.  Our mission 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 more than 87,000 employees and through its subsidiaries operates 353 inpatient acute care hospitals and behavioral health facilities and 38 outpatient and other facilities located in 37 states, Washington, D.C., Puerto Rico and the United Kingdom. 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, 2018 and in Item 2-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended March 31, 2019), 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 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 in each year of material items impacting our net income attributable to UHS, such as, changes in the reserve established in connection with our discussions with the Department of Justice, our adoption of ASU 2016-09 and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of 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 Reports on Form 10-K for the year ended December 31, 2018 and Form 10-Q for the quarterly period ended March 31, 2019. 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,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net revenues

 

$

2,855,168

 

 

 

2,681,353

 

 

$

5,659,559

 

 

 

5,368,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

1,383,481

 

 

 

1,305,974

 

 

 

2,749,027

 

 

 

2,606,122

 

Other operating expenses

 

 

672,564

 

 

 

624,484

 

 

 

1,317,344

 

 

 

1,245,303

 

Supplies expense

 

 

305,857

 

 

 

289,733

 

 

 

613,320

 

 

 

582,662

 

Depreciation and amortization

 

 

121,168

 

 

 

109,581

 

 

 

241,208

 

 

 

222,684

 

Lease and rental expense

 

 

26,535

 

 

 

27,119

 

 

 

52,660

 

 

 

53,822

 

 

 

 

2,509,605

 

 

 

2,356,891

 

 

 

4,973,559

 

 

 

4,710,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

345,563

 

 

 

324,462

 

 

 

686,000

 

 

 

658,276

 

Interest expense, net

 

 

42,487

 

 

 

38,000

 

 

 

82,127

 

 

 

75,576

 

Other (income) expense, net

 

 

(7,732

)

 

 

(15,308

)

 

 

(3,231

)

 

 

(15,308

)

Income before income taxes

 

 

310,808

 

 

 

301,770

 

 

 

607,104

 

 

 

598,008

 

Provision for income taxes

 

 

69,543

 

 

 

71,059

 

 

 

128,441

 

 

 

138,628

 

Net income

 

 

241,265

 

 

 

230,711

 

 

 

478,663

 

 

 

459,380

 

Less:  Net income attributable to noncontrolling interests

 

 

2,945

 

 

 

4,659

 

 

 

6,175

 

 

 

9,496

 

Net income attributable to UHS

 

$

238,320

 

 

$

226,052

 

 

$

472,488

 

 

$

449,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS (a)

 

$

2.67

 

 

$

2.40

 

 

$

5.24

 

 

$

4.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS (a)

 

$

2.66

 

 

$

2.39

 

 

$

5.23

 

 

$

4.76

 

 



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,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(a) Earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to UHS

 

$

238,320

 

 

$

226,052

 

 

$

472,488

 

 

$

449,884

 

Less: Net income attributable to unvested restricted share grants

 

 

(656

)

 

 

(392

)

 

 

(1,171

)

 

 

(496

)

Net income attributable to UHS - basic and diluted

 

$

237,664

 

 

$

225,660

 

 

$

471,317

 

 

$

449,388

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic

 

 

89,136

 

 

 

93,842

 

 

 

89,956

 

 

 

94,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS:

 

$

2.67

 

 

$

2.40

 

 

$

5.24

 

 

$

4.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

89,136

 

 

 

93,842

 

 

 

89,956

 

 

 

94,034

 

Add: Other share equivalents

 

 

99

 

 

 

439

 

 

 

145

 

 

 

448

 

Weighted average number of common shares and equiv. - diluted

 

 

89,235

 

 

 

94,281

 

 

 

90,101

 

 

 

94,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS:

 

$

2.66

 

 

$

2.39

 

 

$

5.23

 

 

$

4.76

 

 


Universal Health Services, Inc.

 

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

 

For the Three Months ended June 30, 2019 and 2018

 

(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

 

 

June 30, 2019

 

 

revenues

 

 

June 30, 2018

 

 

revenues

 

Net income attributable to UHS

$

238,320

 

 

 

 

 

 

$

226,052

 

 

 

 

 

   Depreciation and amortization

 

121,168

 

 

 

 

 

 

 

109,581

 

 

 

 

 

   Interest expense, net

 

42,487

 

 

 

 

 

 

 

38,000

 

 

 

 

 

   Provision for income taxes

 

69,543

 

 

 

 

 

 

 

71,059

 

 

 

 

 

EBITDA net of NCI

$

471,518

 

 

 

16.5

%

 

$

444,692

 

 

 

16.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

(7,732

)

 

 

 

 

 

 

(15,308

)

 

 

 

 

Increase in DOJ Reserve

 

10,978

 

 

 

 

 

 

 

9,451

 

 

 

 

 

Adjusted EBITDA net of NCI

$

474,764

 

 

 

16.6

%

 

$

438,835

 

 

 

16.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

2,855,168

 

 

 

 

 

 

$

2,681,353

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Three months ended

 

 

June 30, 2019

 

 

June 30, 2018

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

238,320

 

 

$

2.66

 

 

$

226,052

 

 

$

2.39

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in DOJ Reserve, after-tax

 

8,369

 

 

 

0.09

 

 

 

7,205

 

 

 

0.08

 

Impact of ASU 2016-09

 

509

 

 

 

0.01

 

 

 

61

 

 

 

-

 

Subtotal adjustments

$

8,878

 

 

$

0.10

 

 

$

7,266

 

 

$

0.08

 

Adjusted net income attributable to UHS

$

247,198

 

 

$

2.76

 

 

$

233,318

 

 

$

2.47

 

 


Universal Health Services, Inc.

 

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

 

For the Six Months ended June 30, 2019 and 2018

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

% Net

 

 

Six months ended

 

 

% Net

 

 

June 30, 2019

 

 

revenues

 

 

June 30, 2018

 

 

revenues

 

Net income attributable to UHS

$

472,488

 

 

 

 

 

 

$

449,884

 

 

 

 

 

   Depreciation and amortization

 

241,208

 

 

 

 

 

 

 

222,684

 

 

 

 

 

   Interest expense, net

 

82,127

 

 

 

 

 

 

 

75,576

 

 

 

 

 

   Provision for income taxes

 

128,441

 

 

 

 

 

 

 

138,628

 

 

 

 

 

EBITDA net of NCI

$

924,264

 

 

 

16.3

%

 

$

886,772

 

 

 

16.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

(3,231

)

 

 

 

 

 

 

(15,308

)

 

 

 

 

Increase in DOJ Reserve

 

10,978

 

 

 

 

 

 

 

22,451

 

 

 

 

 

Adjusted EBITDA net of NCI

$

932,011

 

 

 

16.5

%

 

$

893,915

 

 

 

16.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

5,659,559

 

 

 

 

 

 

$

5,368,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

Six months ended

 

 

June 30, 2019

 

 

June 30, 2018

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

472,488

 

 

$

5.23

 

 

$

449,884

 

 

$

4.76

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in DOJ Reserve, after-tax

 

8,369

 

 

 

0.09

 

 

 

17,116

 

 

 

0.18

 

Impact of ASU 2016-09

 

(10,398

)

 

 

(0.11

)

 

 

(1,537

)

 

 

(0.02

)

Subtotal adjustments

$

(2,029

)

 

$

(0.02

)

 

$

15,579

 

 

$

0.16

 

Adjusted net income attributable to UHS

$

470,459

 

 

$

5.21

 

 

$

465,463

 

 

$

4.92

 

 

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Six months

 

 

 

ended June 30,

 

 

ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income

 

$

241,265

 

 

$

230,711

 

 

$

478,663

 

 

$

459,380

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized derivative gains (losses) on cash flow hedges

 

 

(1,008

)

 

 

(545

)

 

 

(3,925

)

 

 

1,579

 

Foreign currency translation adjustment

 

 

5,159

 

 

 

1,184

 

 

 

(9,103

)

 

 

(3,157

)

Other

 

 

0

 

 

 

(2,367

)

 

 

0

 

 

 

0

 

Other comprehensive income (loss)  before tax

 

 

4,151

 

 

 

(1,728

)

 

 

(13,028

)

 

 

(1,578

)

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

 

 

1,616

 

 

 

(702

)

 

 

(850

)

 

 

375

 

Total other comprehensive income (loss), net of tax

 

 

2,535

 

 

 

(1,026

)

 

 

(12,178

)

 

 

(1,953

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

243,800

 

 

 

229,685

 

 

 

466,485

 

 

 

457,427

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

2,945

 

 

 

4,659

 

 

 

6,175

 

 

 

9,496

 

Comprehensive income attributable to UHS

 

$

240,855

 

 

$

225,026

 

 

$

460,310

 

 

$

447,931

 

 


Universal Health Services, Inc.

 

Condensed Consolidated Balance Sheets

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

61,297

 

 

$

105,220

 

Accounts receivable, net

 

 

1,601,352

 

 

 

1,509,909

 

Supplies

 

 

153,574

 

 

 

148,206

 

Other current assets

 

 

148,809

 

 

 

174,467

 

Total current assets

 

 

1,965,032

 

 

 

1,937,802

 

 

 

 

 

 

 

 

 

 

Property and equipment

 

 

8,859,104

 

 

 

8,563,455

 

Less: accumulated depreciation

 

 

(3,914,406

)

 

 

(3,715,515

)

 

 

 

4,944,698

 

 

 

4,847,940

 

Other assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

3,843,429

 

 

 

3,844,628

 

Deferred income taxes

 

 

15,747

 

 

 

5,280

 

Right of use assets-operating leases

 

 

332,135

 

 

 

0

 

Deferred charges

 

 

7,533

 

 

 

8,772

 

Other

 

 

644,076

 

 

 

621,058

 

Total Assets

 

$

11,752,650

 

 

$

11,265,480

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

91,833

 

 

$

63,446

 

Accounts payable and accrued liabilities

 

 

1,253,760

 

 

 

1,253,714

 

Legal reserves

 

 

141,750

 

 

 

129,150

 

Operating lease liabilities

 

 

56,447

 

 

 

0

 

Federal and state taxes

 

 

479

 

 

 

2,428

 

Total current liabilities

 

 

1,544,269

 

 

 

1,448,738

 

 

 

 

 

 

 

 

 

 

Other noncurrent liabilities

 

 

369,229

 

 

 

361,809

 

Operating lease liabilities noncurrent

 

 

275,688

 

 

 

0

 

Long-term debt

 

 

4,057,121

 

 

 

3,935,187

 

Deferred income taxes

 

 

37,906

 

 

 

49,661

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

3,986

 

 

 

4,292

 

 

 

 

 

 

 

 

 

 

UHS common stockholders' equity

 

 

5,393,089

 

 

 

5,389,262

 

Noncontrolling interest

 

 

71,362

 

 

 

76,531

 

Total equity

 

 

5,464,451

 

 

 

5,465,793

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

11,752,650

 

 

$

11,265,480

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

(unaudited)

 

 

Six months

 

 

ended June 30,

 

 

2019

 

 

2018

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

Net income

$

478,663

 

 

$

459,380

 

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

 

 

 

 

 

 

 

Depreciation & amortization

 

241,208

 

 

 

222,716

 

Stock-based compensation expense

 

34,676

 

 

 

34,716

 

Gain on sale of assets and businesses

 

0

 

 

 

(2,513

)

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

 

 

 

 

 

 

 

Accounts receivable

 

(101,329

)

 

 

(64,055

)

Accrued interest

 

948

 

 

 

199

 

Accrued and deferred income taxes

 

(16,846

)

 

 

(42,540

)

Other working capital accounts

 

30,082

 

 

 

8,977

 

Other assets and deferred charges

 

(1,333

)

 

 

(14,144

)

Other

 

(49,687

)