uhs-8k_20200427.htm
false 0000352915 0000352915 2020-04-27 2020-04-27

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 27, 2020

 

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 April 27, 2020, 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 April 27, 2020.

104

  

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

 

 

 

Exhibit Index

 

Exhibit No.

  

Exhibit

 

 

99.1

  

Universal Health Services, Inc., press release, dated April 27, 2020.

 

104

  

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

 

 


 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Universal Health Services, Inc.

 

By:

 

/s/ Steve Filton

Name: Steve Filton

Title: Executive Vice President and

            Chief Financial Officer

Date: April 28, 2020

 

 

 

 

uhs-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

April 27, 2020

 

CONTACT:

Steve Filton

 

Chief Financial Officer

 

610-768-3300

 

 

UNIVERSAL HEALTH SERVICES, INC.

REPORTS 2020 FIRST QUARTER FINANCIAL RESULTS AND UNCERTAINTIES RELATED TO COVID-19

 

Consolidated Results of Operations, As Reported and As Adjusted  – Three-month periods ended March 31, 2020 and 2019:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $142.0 million, or $1.64 per diluted share, during the first quarter of 2020, as compared to $234.2 million, or $2.57 per diluted share, during the comparable quarter of 2019.  Net revenues increased 0.9% to $2.830 billion during the first quarter of 2020 as compared to $2.804 billion during the first quarter of 2019.

 

As reflected on the Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), our adjusted net income attributable to UHS during the first quarter of 2020 was $150.2 million, or $1.73 per diluted share, as compared to $223.3 million, or $2.45 per diluted share, during the first quarter of 2019.  

 

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2020, was a net aggregate unfavorable after-tax impact of $8.1 million, or $.09 per diluted share, consisting of the following: (i) an after-tax unrealized loss of $7.4 million, or $.08 per diluted share, ($9.6 million pre-tax which is included in “Other (income) expense, net”), resulting from a decrease in the market value of shares of certain marketable securities held for investment and classified as available for sale, and; (ii) a unfavorable after-tax impact of $0.8 million, 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 first quarter of 2019, is a favorable after-tax impact of $10.9 million, or $.12 per diluted share, resulting from our adoption of ASU 2016-09.

 

Included in our reported and our adjusted net income attributable to UHS during the first quarter of 2019, is a pre-tax unrealized loss of $4.3 million, or $.03 per diluted share (included in “Other (income) expense, net”), resulting from a decrease in the market value of shares of certain marketable securities held for investment and classified as available for sale.  

 

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 $349.1 million during the first quarter of 2020, as compared to $452.7 million during the first quarter of 2019. Our adjusted earnings before interest, taxes, depreciation & amortization


(“ Adjusted EBITDA net of NCI ”), which excludes the impact of other (income) expense, net, was $358.7 million during the first quarter of 20 20 as compared to $ 457.2 million during the first quarter of 201 9 .

 

COVID-19

The impact of the COVID-19 pandemic has had a material unfavorable effect on our operations and financial results during the first quarter of 2020.  Patient volumes at our acute care hospitals and our behavioral health care facilities were significantly reduced during the second half of March as various COVID-19 policies were implemented by our facilities and federal and state governments. These significant reductions to patient volumes experienced at our facilities have continued into April, 2020.  We believe that the adverse impact that COVID-19 will have on our future operations and financial results will depend upon many factors, most of which are beyond our capability to control or predict.  

 

Due to the continued uncertainty regarding COVID-19, we are withdrawing our previously issued operating results forecast and earnings guidance for the year ending December 31, 2020.

 

Our primary focus as the effects of COVID-19 began to impact our facilities was the health and safety of our patients, employees and physicians. We implemented various measures to provide the safest possible environment within our facilities during this pandemic and will continue to do so.  

 

In addition, we recognize the significant financial stress created by the dramatic decline in patient volumes that began in mid-March, 2020, at our acute care and behavioral health facilities, and as a result, have implemented numerous financial-related measures including the following:

 

Effected initiatives to produce increased labor productivity and reductions to certain other costs.

 

Reduced spend rate and magnitude of certain previously planned capital projects and expenditures.

 

Suspended our stock repurchase program and payment of quarterly dividends.

 

In April, 2020, we have received funds related to accelerated Medicare payments and Public Health and Social Services Emergency Fund grants, as provided for by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  There was no impact on our financial statements for the three-month period ended March 31, 2020 related to funds received in connection with the CARES Act.

 

Acute Care Services – Three-month periods ended March 31, 2020 and 2019:

During the first quarter of 2020, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) decreased 4.0% and adjusted patient days decreased 0.2%, as compared to the first quarter of 2019. At these facilities, net revenue per adjusted admission increased 3.7% while net revenue per adjusted patient day decreased 0.3% during the first quarter of 2020 as compared to the first quarter of 2019. Net revenues from our acute care services on a same facility basis increased 0.4% during the first quarter of 2020 as compared to the first quarter of 2019.

 

Behavioral Health Care Services – Three-month periods ended March 31, 2020 and 2019:

During the first quarter of 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased 2.0% while adjusted patient days decreased 1.3% as compared to the first quarter of 2019. At these facilities, net revenue per adjusted admission increased 4.3% while net revenue


per adjusted patient day increased 3.7% during the first quarter of 2020 as compared to the comparable quarter in 2019. On a same facility basis, our behavioral health care services’ net revenues increased 2.2% during the first quarter of 2020 as compared to the first quarter of 2019.    

 

Net Cash Provided by Operating Activities, Liquidity, Share Repurchase Program and Increase to Accrued Insurance Expense:

 

Net Cash Provided by Operating Activities:

For the three months ended March 31, 2020, our net cash provided by operating activities increased to $502 million as compared to $432 million generated during the first quarter of 2019. The $70 million net increase was due to: (i) an unfavorable change of $88 million resulting from a decrease in net income plus/minus depreciation and amortization expense and stock-based compensation expense; (ii) a favorable change of $171 million in accounts receivable; (iii) an unfavorable change of $34 million in other working capital accounts resulting primarily from changes in accounts payable due to timing of disbursements; (iv) a favorable change of $25 million in accrued insurance expense, net of commercial premiums paid (see additional disclosure below), and; (v) $4 million of other combined net unfavorable changes.  

 

Liquidity:

As of March 31, 2020, we had $1.188 billion of aggregate available borrowing capacity as follows:

 

$998 million of available borrowing capacity pursuant to the terms of our $1 billion revolving credit facility, net of $2 million of outstanding letters of credit (there were no borrowings outstanding), and;

 

$190 million of available borrowing capacity pursuant to the terms of our $450 million accounts receivable securitization program (net of $260 million of outstanding borrowings).

 

Share Repurchase Program:

Pursuant to our $2.7 billion stock repurchase program, which had an aggregate available repurchase authorization of $559.6 million as of March 31, 2020, 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. As mentioned above, as part of various Covid-19 initiatives, we have suspended our stock repurchase program.  

 

In conjunction with our stock repurchase program, during the first quarter of 2020, we have repurchased approximately 1.95 million shares at an aggregate cost of $196.6 million (approximately $101 per share).  Since inception of the program in 2014 through March 31, 2020, we have repurchased approximately 18.02 million shares at an aggregate cost of approximately $2.14 billion (approximately $119 per share). 

 

Increase to Self-Insured Professional and General Liability Reserves:

Our estimated liability for self-insured professional and general liability claims is based on a number of factors including, among other things, the number of asserted claims and reported incidents, estimates of losses for these claims based on recent and historical settlement amounts, estimates of incurred but not reported claims based on historical experience, and estimates of amounts recoverable under our commercial insurance policies. As a result of unfavorable trends recently experienced, during


the first quarter of 2020, we recorded a $20.0 million increase to our reserves for self-insured professional and general liability claims.  

 

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

As previously disclosed on July 25, 2019, we have 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.  At that time, we also disclosed that we were further advised that the previously disclosed investigations being conducted by the DOJ’s Criminal Frauds Section in connection with these matters had been closed.  

In connection with the agreement in principle with the DOJ’s Civil Division, the aggregate pre-tax DOJ Reserve amounted to approximately $134 million at each of March 31, 2020 and December 31, 2019.  There was no change to the DOJ Reserve during the first quarter of 2020.

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 finalization and execution of a corporate integrity agreement with the Office of Inspector General for the United States Department of Health and Human Services, 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 3-Legal Proceedings in our Form 10-K for the year ended December 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 April 28, 2020. The dial-in number is 1-877-648-7971.  

A live broadcast of the conference call will be available on our website at.  Also, 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 providers of hospital and healthcare services, Universal Health Services, Inc. has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues were approximately $11.4 billion during 2019. In 2020, UHS was again recognized as one of the World’s Most Admired Companies by Fortune ; in 2019 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 strategy includes building or acquiring high quality hospitals in rapidly growing markets, investing in the people and equipment needed to allow each facility to thrive, and becoming the leading healthcare provider in each community we serve.

 

Headquartered in King of Prussia, PA, UHS has more than 90,000 employees and through its subsidiaries operates 26 acute care hospitals, 331 behavioral health facilities, 42 outpatient facilities and


ambulatory care access points, an insurance offering, a physician network and various related services located in 37 U.S. 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 the anticipated impact of COVID-19 on our operations and financial results, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A - Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2019), may cause the results to differ materially from those anticipated in the forward-looking statements.  These statements are subject to risks and uncertainties and therefore actual results may differ materially.  Readers should not place undue reliance on such forward-looking statements which reflect management’s view only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.  Many of the factors that could affect our future results are beyond our control or ability to predict, including the impact of the COVID-19 pandemic. Our future operations and financial results will likely be materially impacted by developments related to COVID-19 including, but not limited to, the length of time and severity of the spread of the pandemic; the volume of cancelled or rescheduled elective procedures and the volume of COVID-19 patients treated at our hospitals and other healthcare facilities; measures we are taking to respond to the COVID-19 pandemic; the impact of government and administrative regulation and stimulus on the hospital industry; declining patient volumes and unfavorable changes in payer mix caused by deteriorating macroeconomic conditions (including increases in uninsured and underinsured patients as the result of business closings and layoffs); potential disruptions to our clinical staffing and shortages and disruptions related to supplies required for our employees and patients; and potential increases to expenses related to staffing, supply chain or other expenditures; the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, as well as risks associated with disruptions in the financial markets and the business of financial institutions as the result of the COVID-19 pandemic which could impact us from a financing perspective; and changes in general economic conditions nationally and regionally in our markets resulting from the COVID-19 pandemic. We are not able to fully quantify the impact that these factors will have on our future financial results, but expect developments related to the COVID-19 pandemic to materially affect our financial performance in 2020.

 

We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA net of NCI and Adjusted EBITDA net of NCI, which are non-GAAP financial measures (“GAAP” is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect of material items impacting our net income attributable to UHS, such as, our adoption of ASU 2016-09, unrealized gains/losses resulting from changes in the market value of shares of certain marketable securities held for investment and classified as available for sale, 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, changes in the reserve established in connection with our discussions with the Department of Justice, 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, 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

 

 

 

ended March 31,

 

 

 

2020

 

 

2019

 

Net revenues

 

$

2,829,667

 

 

 

2,804,391

 

 

 

 

 

 

 

 

 

 

Operating charges:

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

1,432,669

 

 

 

1,365,546

 

Other operating expenses

 

 

689,790

 

 

 

644,780

 

Supplies expense

 

 

317,827

 

 

 

307,463

 

Depreciation and amortization

 

 

124,394

 

 

 

120,040

 

Lease and rental expense

 

 

28,293

 

 

 

26,125

 

 

 

 

2,592,973

 

 

 

2,463,954

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

236,694

 

 

 

340,437

 

Interest expense, net

 

 

36,351

 

 

 

39,640

 

Other (income) expense, net

 

 

9,560

 

 

 

4,501

 

Income before income taxes

 

 

190,783

 

 

 

296,296

 

Provision for income taxes

 

 

46,323

 

 

 

58,898

 

Net income

 

 

144,460

 

 

 

237,398

 

Less:  Net income attributable to noncontrolling interests

 

 

2,423

 

 

 

3,230

 

Net income attributable to UHS

 

$

142,037

 

 

$

234,168

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS (a)

 

$

1.64

 

 

$

2.57

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS (a)

 

$

1.64

 

 

$

2.57

 

 



Universal Health Services, Inc.

 

Footnotes to Consolidated Statements of Income

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

 

ended March 31,

 

 

 

2020

 

 

2019

 

(a) Earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

 

 

Net income attributable to UHS

 

$

142,037

 

 

$

234,168

 

Less: Net income attributable to unvested restricted share grants

 

 

(373

)

 

 

(515

)

Net income attributable to UHS - basic and diluted

 

$

141,664

 

 

$

233,653

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic

 

 

86,212

 

 

 

90,776

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS:

 

$

1.64

 

 

$

2.57

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

86,212

 

 

 

90,776

 

Add: Other share equivalents

 

 

243

 

 

 

191

 

Weighted average number of common shares and equiv. - diluted

 

 

86,455

 

 

 

90,967

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS:

 

$

1.64

 

 

$

2.57

 

 


Universal Health Services, Inc.

 

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

 

For the Three Months ended March 31, 2020 and 2019

 

(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

 

 

March 31, 2020

 

 

revenues

 

 

March 31, 2019

 

 

revenues

 

Net income attributable to UHS

$

142,037

 

 

 

 

 

 

$

234,168

 

 

 

 

 

   Depreciation and amortization

 

124,394

 

 

 

 

 

 

 

120,040

 

 

 

 

 

   Interest expense, net

 

36,351

 

 

 

 

 

 

 

39,640

 

 

 

 

 

   Provision for income taxes

 

46,323

 

 

 

 

 

 

 

58,898

 

 

 

 

 

EBITDA net of NCI

$

349,105

 

 

 

12.3

%

 

$

452,746

 

 

 

16.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

9,560

 

 

 

 

 

 

 

4,501

 

 

 

 

 

Adjusted EBITDA net of NCI

$

358,665

 

 

 

12.7

%

 

$

457,247

 

 

 

16.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

2,829,667

 

 

 

 

 

 

$

2,804,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Three months ended

 

 

March 31, 2020

 

 

March 31, 2019

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

142,037

 

 

$

1.64

 

 

$

234,168

 

 

$

2.57

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities held for sale

 

7,350

 

 

 

0.08

 

 

 

-

 

 

 

-

 

Impact of ASU 2016-09

 

770

 

 

 

0.01

 

 

 

(10,907

)

 

 

(0.12

)

Subtotal adjustments

 

8,120

 

 

 

0.09

 

 

 

(10,907

)

 

 

(0.12

)

Adjusted net income attributable to UHS

$

150,157

 

 

$

1.73

 

 

$

223,261

 

 

$

2.45

 

 

 

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

 

ended March 31,

 

 

 

2020

 

 

2019

 

Net income

 

$

144,460

 

 

$

237,398

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Unrealized derivative gains (losses) on cash flow hedges

 

 

0

 

 

 

(2,917

)

Foreign currency translation adjustment

 

 

(39,201

)

 

 

(14,262

)

Other comprehensive income (loss)  before tax

 

 

(39,201

)

 

 

(17,179

)

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

 

 

(2,108

)

 

 

(2,466

)

Total other comprehensive income (loss), net of tax

 

 

(37,093

)

 

 

(14,713

)

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

107,367

 

 

 

222,685

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

2,423

 

 

 

3,230

 

Comprehensive income attributable to UHS

 

$

104,944

 

 

$

219,455

 

 


Universal Health Services, Inc.

 

Condensed Consolidated Balance Sheets

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

54,619

 

 

$

61,268

 

Accounts receivable, net

 

 

1,486,829

 

 

 

1,560,847

 

Supplies

 

 

162,597

 

 

 

159,889

 

Other current assets

 

 

130,301

 

 

 

133,930

 

Total current assets

 

 

1,834,346

 

 

 

1,915,934

 

 

 

 

 

 

 

 

 

 

Property and equipment

 

 

9,232,949

 

 

 

9,106,377

 

Less: accumulated depreciation

 

 

(4,190,658

)

 

 

(4,089,679

)

 

 

 

5,042,291

 

 

 

5,016,698

 

Other assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

3,836,566

 

 

 

3,869,760

 

Deferred income taxes

 

 

17,482

 

 

 

16,189

 

Right of use assets-operating leases

 

 

341,264

 

 

 

326,518

 

Deferred charges

 

 

5,936

 

 

 

6,373

 

Other

 

 

542,541

 

 

 

516,778

 

Total Assets

 

$

11,620,426

 

 

$

11,668,250

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

69,521

 

 

$

87,550

 

Accounts payable and accrued liabilities

 

 

1,382,652

 

 

 

1,272,374

 

Legal reserves

 

 

145,227

 

 

 

144,509

 

Operating lease liabilities

 

 

57,772

 

 

 

56,442

 

Federal and state taxes

 

 

34,779

 

 

 

2,515

 

Total current liabilities

 

 

1,689,951

 

 

 

1,563,390

 

 

 

 

 

 

 

 

 

 

Other noncurrent liabilities

 

 

387,669

 

 

 

329,932

 

Operating lease liabilities noncurrent

 

 

284,008

 

 

 

270,076

 

Long-term debt

 

 

3,735,799

 

 

 

3,896,577

 

Deferred income taxes

 

 

34,003

 

 

 

25,071

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

3,953

 

 

 

4,333

 

 

 

 

 

 

 

 

 

 

UHS common stockholders' equity

 

 

5,413,209

 

 

 

5,504,105

 

Noncontrolling interest

 

 

71,834

 

 

 

74,766

 

Total equity

 

 

5,485,043

 

 

 

5,578,871

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

11,620,426

 

 

$

11,668,250

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

(unaudited)

 

 

Three months

 

 

ended March 31,

 

 

2020

 

 

2019

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

Net income

$

144,460

 

 

$

237,398

 

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

 

 

 

 

 

 

 

Depreciation & amortization

 

124,394

 

 

 

120,040

 

Stock-based compensation expense

 

18,047

 

 

 

17,591

 

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

 

 

 

 

 

 

 

Accounts receivable

 

69,763

 

 

 

(101,619

)

Accrued interest

 

(4,412

)

 

 

(2,687

)

Accrued and deferred income taxes

 

45,200

 

 

 

52,291

 

Other working capital accounts

 

73,929

 

 

 

107,878

 

Other assets and deferred charges

 

11,084

 

 

 

(3,771

)

Other

 

(3,038

)

 

 

2,605

 

Accrued insurance expense, net of commercial premiums paid

 

49,559

 

 

 

24,398

 

Payments made in settlement of self-insurance claims

 

(26,924

)

 

 

(22,320

)

Net cash provided by operating activities

 

502,062

 

 

 

431,804

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

Property and equipment additions, net of disposals

 

(184,102

)

 

 

(169,848

)

Inflows (outflows) from foreign exchange contracts that hedge our net U.K. investment

 

51,691

 

 

 

(28,008

)

Costs incurred for purchase and implementation of information technology applications

 

(1,857

)

 

 

(9,678

)

Investment in, and advances to, joint venture and other

 

(751

)

 

 

(879

)

Net cash used in investing activities

 

(135,019

)

 

 

(208,413

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

Reduction of long-term debt

 

(185,098

)

 

 

(114,540

)

Additional borrowings

 

5,453

 

 

 

8,700

 

Repurchase of common shares

 

(172,092

)

 

 

(143,785

)

Dividends paid

 

(17,344

)

 

 

(9,081

)

Issuance of common stock

 

3,002

 

 

 

2,726

 

Profit distributions to noncontrolling interests

 

(5,735

)

 

 

(10,314

)

Net cash used in financing activities

 

(371,814

)

 

 

(266,294

)

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(1,673

)

 

 

794

 

Decrease in cash, cash equivalents and restricted cash

 

(6,444

)

 

 

(42,109

)

Cash, cash equivalents and restricted cash, beginning of period

 

105,667

 

 

 

199,685

 

Cash, cash equivalents and restricted cash, end of period

$

99,223

 

 

$

157,576

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

 

Interest paid

$

39,483

 

 

$

41,050

 

Income taxes paid, net of refunds

$

6,783

 

 

$

5,087

 

Noncash purchases of property and equipment

$

58,935

 

 

$

71,987

 

Right-of-use assets obtained in exchange for lease obligations

$

29,112

 

 

$

355,981

 


 

Universal Health Services, Inc.

 

Supplemental Statistical Information

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

 

Same Facility:

 

 

 

 

 

 

Three months ended

 

 

 

 

 

 

 

 

3/31/2020

 

Acute Care Services

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

0.4

%

Adjusted Admissions

 

 

 

 

 

 

 

-4.0

%

Adjusted Patient Days

 

 

 

 

 

 

 

-0.2

%

Revenue Per Adjusted Admission

 

 

 

 

 

 

 

3.7

%

Revenue Per Adjusted Patient Day

 

 

 

 

 

 

 

-0.3

%

 

 

 

 

 

 

 

 

 

 

Behavioral Health Care Services

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

2.2

%

Adjusted Admissions

 

 

 

 

 

 

 

-2.0

%

Adjusted Patient Days

 

 

 

 

 

 

 

-1.3

%

Revenue Per Adjusted Admission

 

 

 

 

 

 

 

4.3

%

Revenue Per Adjusted Patient Day

 

 

 

 

 

 

 

3.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UHS Consolidated

 

 

First quarter ended

 

 

 

 

3/31/2020

 

 

3/31/2019

 

Revenues

 

 

$

2,829,667

 

 

$

2,804,391

 

EBITDA net of NCI

 

 

$

349,105

 

 

$

452,746

 

EBITDA Margin net of NCI

 

 

 

12.3

%

 

 

16.1

%

Adjusted EBITDA net of NCI

 

 

$

358,665

 

 

$

457,247

 

Adjusted EBITDA Margin net of NCI

 

 

 

12.7

%

 

 

16.3

%

 

 

 

 

 

 

 

 

 

 

Cash Flow From Operations

 

 

$

502,062

 

 

$

431,804

 

Days Sales Outstanding

 

 

 

48

 

 

 

51

 

Capital Expenditures

 

 

$

184,102

 

 

$

169,848

 

 

 

 

 

 

 

 

 

 

 

Debt

 

 

$

3,805,320

 

 

$

3,893,929

 

UHS' Shareholders Equity

 

 

$

5,413,209

 

 

$

5,482,415

 

Debt / Total Capitalization

 

 

 

41.3

%

 

 

41.5

%

Debt / EBITDA net of NCI (1)

 

 

 

2.37

 

 

 

2.38

 

Debt / Adjusted EBITDA net of NCI (1)

 

 

 

2.23

 

 

 

2.21

 

Debt / Cash From Operations (1)

 

 

 

2.52

 

 

 

3.00

 

 

 

 

 

 

 

 

 

 

 

(1)  Latest 4 quarters

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Universal Health Services, Inc .

Acute Care Hospital Services

For the three months ended

March 31, 2020 and 2019

(in thousands)

 

Same Facility Basis - Acute Care Hospital Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Three months ended

 

 

 

March 31, 2020

 

 

March 31, 2019

 

 

 

Amount

 

 

% of Net

Revenues

 

 

Amount

 

 

% of Net

Revenues

 

Net revenues

 

$

1,497,123

 

 

 

100.0

%

 

$

1,491,351

 

 

 

100.0

%

Operating charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

658,929

 

 

 

44.0

%

 

 

619,317

 

 

 

41.5

%

Other operating expenses

 

 

375,531

 

 

 

25.1

%