uhs-8k_20200727.htm
false 0000352915 0000352915 2020-07-27 2020-07-27

 

 

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): July 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 July 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 July  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 July 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: July 28, 2020

 

 

 

 

uhs-ex991_6.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

July 27, 2020

 

CONTACT:

Steve Filton

 

Chief Financial Officer

 

610-768-3300

 

 

UNIVERSAL HEALTH SERVICES, INC.

REPORTS 2020 SECOND QUARTER FINANCIAL RESULTS

 

Consolidated Results of Operations, As Reported and As Adjusted  – Three-month periods ended June 30, 2020 and 2019:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $251.9 million, or $2.95 per diluted share, during the second quarter of 2020, as compared to $238.3 million, or $2.66 per diluted share, during the comparable quarter of 2019.  Net revenues decreased 4.4% to $2.730 billion during the second quarter of 2020 as compared to $2.855 billion during the second quarter of 2019.

 

As reflected on the Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), our adjusted net income attributable to UHS during the second quarter of 2020 was $250.2 million, or $2.93 per diluted share, as compared to $247.2 million, or $2.76 per diluted share, during the second quarter of 2019.  

 

Included in our reported and adjusted net income attributable to UHS during the three-month period ended June 30, 2020 was approximately $161.9 million, or $1.90 per diluted share, resulting from the recognition of approximately $218 million of net revenues recorded in connection with various governmental stimulus programs, most notably the Public Health and Social Services Emergency Fund grants, as provided for by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Approximately $157 million of the governmental stimulus program net revenues were attributable to our acute care services and approximately $61 million were attributable to our behavioral health care services.  

 

As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2020, was a net aggregate favorable after-tax impact of $1.7 million, or $.02 per diluted share, consisting of the following: (i) an after-tax unrealized gain of $2.2 million, or $.03 per diluted share, ($2.9 million pre-tax which is included in “Other (income) expense, net”), resulting from an increase 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 $0.5 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 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 government’s investigation of our behavioral health hospitals, (as previously


disclosed, settlement agreements were finalized in early July, 2020 thereby resolving this matter), and; (ii) an unfavorable after-tax impact of $0.5 million, or $.01 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 second quarter of 2019 is a pre-tax unrealized gain of $6.9 million, or $.06 per diluted share (included in “Other (income) expense, net”), resulting from an increase 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 $482.8 million during the second quarter of 2020, as compared to $471.5 million during the second 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, and the increase in the DOJ Reserve recorded during the second quarter of 2019, was $479.7 million during the second quarter of 2020 as compared to $474.8 million during the second quarter of 2019.

 

COVID-19

The impact of the COVID-19 pandemic, which began during the second half of March, 2020, has had a material unfavorable effect on our operations and financial results since that time.  Patient volumes at both our acute care and behavioral health care facilities were most significantly reduced in April. Our acute care and behavioral health facilities began experiencing gradual and continued improvement in patient volumes in May and June as various states eased stay-at-home restrictions and acute care hospitals were permitted to resume elective surgeries and procedures.  However, many of our acute care and behavioral health facilities are located in states that began experiencing significant increases in COVID-19 infections in June and continuing into July. 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.  

 

Consolidated Results of Operations, As Reported and As Adjusted  – Six-month periods ended June 30, 2020 and 2019:

Reported net income attributable to UHS was $394.0 million, or $4.58 per diluted share, during the six-month period ended June 30, 2020, as compared to $472.5 million, or $5.23 per diluted share, during the first six months of 2019.  Net revenues decreased 1.8% to $5.559 billion during the first six months of 2020 as compared to $5.660 billion during the comparable period of 2019.

 

As reflected on the Supplemental Schedule, our adjusted net income attributable to UHS during the six-month period ended June 30, 2020 was $400.4 million, or $4.65 per diluted share, as compared to $470.5 million, or $5.21 per diluted share, during the first six months of 2019.  

 

Our reported and adjusted net income attributable to UHS during the six-month period ended June 30, 2020 included approximately $161.9 million, or $1.89 per diluted share, resulting from the above-mentioned recognition of approximately $218 million of net revenues recorded in connection with governmental stimulus programs, most notably the CARES Act.    

 

As reflected on the Supplemental Schedule, included in our reported results during the six-month period ended June 30, 2020, was a net aggregate unfavorable after-tax impact of $6.4 million, or $.07 per diluted share, consisting of the following: (i) an after-tax unrealized loss of $5.1 million, or $.06 per


diluted share, ($6.7 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) an unfavorable after-tax impact of $1.3 million, or $.01 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, 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 the above-mentioned $11.0 million pre-tax increase in the DOJ Reserve, and; (ii) a favorable after-tax impact of $10.4 million, or $.11 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 six-month period ended June 30, 2019 is a pre-tax unrealized gain of $2.6 million, or $.02 per diluted share (included in “Other (income) expense, net”), resulting from an increase 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 EBITDA net of NCI was $831.9 million during the first six months of 2020, as compared to $924.3 million during the first six months of 2019. Our Adjusted EBITDA net of NCI, which excludes the impact of other (income) expense, net, and the increase in the DOJ Reserve recorded during the first six months of 2019, was $838.3 million during the six-month period ended June 30, 2020 and $932.0 million during the comparable period of 2019.

 

Acute Care Services – Three and six-month periods ended June 30, 2020 and 2019:

During the second quarter of 2020, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) decreased 24.8% and adjusted patient days decreased 18.1%, as compared to the second quarter of 2019. At these facilities, excluding the governmental stimulus revenues of approximately $157 million recorded during the second quarter of 2020, net revenue per adjusted admission increased 12.7% while net revenue per adjusted patient day increased 3.5% during the second quarter of 2020 as compared to the second quarter of 2019. During the second quarter of 2020, as compared to the second quarter of 2019, net revenues generated from our acute care services on a same facility basis decreased 3.5% including the governmental stimulus revenues, and decreased 14.0% excluding the governmental stimulus revenues.

 

During the six-month period ended June 30, 2020, at our acute care hospitals on a same facility basis, adjusted admissions decreased 14.4% and adjusted patient days decreased 9.1%, as compared to the first six months of 2019. At these facilities, excluding the governmental stimulus revenues of approximately $157 million recorded during the first six months of 2020, net revenue per adjusted admission increased 7.7% while net revenue per adjusted patient day increased 1.3% during the six-month period ended June 30, 2020 as compared to the comparable six-month period of 2019. During the first six months of 2020, as compared to the first six months of 2019, net revenues generated from our acute care services on a same facility basis decreased 1.6% including the governmental stimulus revenues, and decreased 6.8% excluding the governmental stimulus revenues.

 

Behavioral Health Care Services – Three and six-month periods ended June 30, 2020 and 2019:

During the second quarter of 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased 15.4% while adjusted patient days decreased 10.4% as compared to the second quarter of 2019. At these facilities, excluding the governmental stimulus revenues of


approximately $61 million recorded during the second quarter of 2020, net revenue per adjusted admission increased 8.1% while net revenue per adjusted patient day increased 2.0% during the second quarter of 2020 as compared to the comparable quarter in 2019. During the second quarter of 2020, as compared to the second quarter of 2019, net revenues generated from our behavioral health care services on a same facility basis decreased 3.8% including the governmental stimulus revenues, and decreased 8.5% excluding the governmental stimulus revenues.    

 

During the six-month period ended June 30, 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased 8.6% and adjusted patient days decreased 5.9%, as compared to the first six months of 2019. At these facilities, excluding the governmental stimulus revenues of approximately $61 million recorded during the first six months of 2020, net revenue per adjusted admission increased 5.9% while net revenue per adjusted patient day increased 2.8% during the first six months of 2020 as compared to the comparable period of 2019. During the first six months of 2020, as compared to the first six months of 2019, net revenues generated from our behavioral health care services on a same facility basis decreased 0.8% including the governmental stimulus revenues, and decreased 3.2% excluding the governmental stimulus revenues.

 

Net Cash Provided by Operating Activities and Liquidity:

 

Net Cash Provided by Operating Activities:

For the six months ended June 30, 2020, our net cash provided by operating activities increased to $1.451 billion as compared to $673 million generated during the first six months of 2019.

 

The $779 million net increase was due to: (i) a favorable change of $477 million resulting from the Medicare accelerated payments and deferred governmental stimulus grants; (ii) a favorable change of $233 million in accounts receivable; (iii) a favorable change of $134 million in accrued and deferred income taxes; (iv) an unfavorable change of $67 million resulting from a decrease in net income plus/minus depreciation and amortization expense, stock-based compensation expense and loss on sales of assets and businesses, and; (v) $2 million of other combined net favorable changes.  

 

Liquidity:

As of June 30, 2020, there were no borrowings outstanding pursuant to our $1 billion revolving credit facility or our $450 million accounts receivable securitization program.  As of that date, we had $1.375 billion of aggregate available borrowing capacity pursuant to the terms of these debt facilities, net of outstanding letters of credit.    

 

In addition, as of June 30, 2020, we had approximately $574 million of short-term cash investments.

 

Conference call information:        

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on July 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 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.


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 listed #330 in Forbes ranking of U.S.’ Largest 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, 330 behavioral health facilities, 41 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-Q for the quarterly period ended March 31, 2020), 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 and potential retrospective adjustment in future periods of governmental stimulus grants recorded as revenues in prior periods; 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 and Form 10-Q for the quarterly period ended March 31, 2020. 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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net revenues

 

$

2,729,754

 

 

 

2,855,168

 

 

$

5,559,421

 

 

 

5,659,559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

1,308,010

 

 

 

1,383,481

 

 

 

2,740,679

 

 

 

2,749,027

 

Other operating expenses

 

 

625,747

 

 

 

672,564

 

 

 

1,315,537

 

 

 

1,317,344

 

Supplies expense

 

 

283,572

 

 

 

305,857

 

 

 

601,399

 

 

 

613,320

 

Depreciation and amortization

 

 

126,208

 

 

 

121,168

 

 

 

250,602

 

 

 

241,208

 

Lease and rental expense

 

 

28,186

 

 

 

26,535

 

 

 

56,479

 

 

 

52,660

 

 

 

 

2,371,723

 

 

 

2,509,605

 

 

 

4,964,696

 

 

 

4,973,559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

358,031

 

 

 

345,563

 

 

 

594,725

 

 

 

686,000

 

Interest expense, net

 

 

25,473

 

 

 

42,487

 

 

 

61,824

 

 

 

82,127

 

Other (income) expense, net

 

 

(3,100

)

 

 

(7,732

)

 

 

6,460

 

 

 

(3,231

)

Income before income taxes

 

 

335,658

 

 

 

310,808

 

 

 

526,441

 

 

 

607,104

 

Provision for income taxes

 

 

79,154

 

 

 

69,543

 

 

 

125,477

 

 

 

128,441

 

Net income

 

 

256,504

 

 

 

241,265

 

 

 

400,964

 

 

 

478,663

 

Less:  Net income attributable to noncontrolling interests

 

 

4,575

 

 

 

2,945

 

 

 

6,998

 

 

 

6,175

 

Net income attributable to UHS

 

$

251,929

 

 

$

238,320

 

 

$

393,966

 

 

$

472,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS (a)

 

$

2.97

 

 

$

2.67

 

 

$

4.60

 

 

$

5.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS (a)

 

$

2.95

 

 

$

2.66

 

 

$

4.58

 

 

$

5.23

 

 



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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

(a) Earnings per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to UHS

 

$

251,929

 

 

$

238,320

 

 

$

393,966

 

 

$

472,488

 

Less: Net income attributable to unvested restricted share grants

 

 

(824

)

 

 

(656

)

 

 

(1,197

)

 

 

(1,171

)

Net income attributable to UHS - basic and diluted

 

$

251,105

 

 

$

237,664

 

 

$

392,769

 

 

$

471,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic

 

 

84,632

 

 

 

89,136

 

 

 

85,422

 

 

 

89,956

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to UHS:

 

$

2.97

 

 

$

2.67

 

 

$

4.60

 

 

$

5.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

84,632

 

 

 

89,136

 

 

 

85,422

 

 

 

89,956

 

Add: Other share equivalents

 

 

427

 

 

 

99

 

 

 

335

 

 

 

145

 

Weighted average number of common shares and equiv. - diluted

 

 

85,059

 

 

 

89,235

 

 

 

85,757

 

 

 

90,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to UHS:

 

$

2.95

 

 

$

2.66

 

 

$

4.58

 

 

$

5.23

 

 


Universal Health Services, Inc.

 

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

 

For the Three Months ended June 30, 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

 

 

June 30, 2020

 

 

revenues

 

 

June 30, 2019

 

 

revenues

 

Net income attributable to UHS

$

251,929

 

 

 

 

 

 

$

238,320

 

 

 

 

 

   Depreciation and amortization

 

126,208

 

 

 

 

 

 

 

121,168

 

 

 

 

 

   Interest expense, net

 

25,473

 

 

 

 

 

 

 

42,487

 

 

 

 

 

   Provision for income taxes

 

79,154

 

 

 

 

 

 

 

69,543

 

 

 

 

 

EBITDA net of NCI

$

482,764

 

 

 

17.7

%

 

$

471,518

 

 

 

16.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

(3,100

)

 

 

 

 

 

 

(7,732

)

 

 

 

 

Increase in DOJ Reserve

 

-

 

 

 

 

 

 

 

10,978

 

 

 

 

 

Adjusted EBITDA net of NCI

$

479,664

 

 

 

17.6

%

 

$

474,764

 

 

 

16.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

2,729,754

 

 

 

 

 

 

$

2,855,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Three months ended

 

 

June 30, 2020

 

 

June 30, 2019

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

251,929

 

 

$

2.95

 

 

$

238,320

 

 

$

2.66

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on marketable securities held for sale

 

(2,223

)

 

 

(0.03

)

 

 

-

 

 

 

-

 

Increase in DOJ Reserve

 

-

 

 

 

-

 

 

 

8,369

 

 

 

0.09

 

Impact of ASU 2016-09

 

505

 

 

 

0.01

 

 

 

509

 

 

 

0.01

 

Subtotal adjustments

 

(1,718

)

 

 

(0.02

)

 

 

8,878

 

 

 

0.10

 

Adjusted net income attributable to UHS

$

250,211

 

 

$

2.93

 

 

$

247,198

 

 

$

2.76

 

 

 

 

 


Universal Health Services, Inc.

 

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

 

For the Six Months ended June 30, 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")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

% Net

 

 

Six months ended

 

 

% Net

 

 

June 30, 2020

 

 

revenues

 

 

June 30, 2019

 

 

revenues

 

Net income attributable to UHS

$

393,966

 

 

 

 

 

 

$

472,488

 

 

 

 

 

   Depreciation and amortization

 

250,602

 

 

 

 

 

 

 

241,208

 

 

 

 

 

   Interest expense, net

 

61,824

 

 

 

 

 

 

 

82,127

 

 

 

 

 

   Provision for income taxes

 

125,477

 

 

 

 

 

 

 

128,441

 

 

 

 

 

EBITDA net of NCI

$

831,869

 

 

 

15.0

%

 

$

924,264

 

 

 

16.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

6,460

 

 

 

 

 

 

 

(3,231

)

 

 

 

 

Increase in DOJ Reserve

 

-

 

 

 

 

 

 

 

10,978

 

 

 

 

 

Adjusted EBITDA net of NCI

$

838,329

 

 

 

15.1

%

 

$

932,011

 

 

 

16.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

5,559,421

 

 

 

 

 

 

$

5,659,559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted Net Income Attributable to UHS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

Six months ended

 

 

June 30, 2020

 

 

June 30, 2019

 

 

 

 

 

 

Per

 

 

 

 

 

 

Per

 

 

Amount

 

 

Diluted Share

 

 

Amount

 

 

Diluted Share

 

Net income attributable to UHS

$

393,966

 

 

$

4.58

 

 

$

472,488

 

 

$

5.23

 

Plus/minus after-tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities held for sale

 

5,127

 

 

 

0.06

 

 

 

-

 

 

 

-

 

Increase in DOJ Reserve

 

-

 

 

 

-

 

 

 

8,369

 

 

 

0.09

 

Impact of ASU 2016-09

 

1,275

 

 

 

0.01

 

 

 

(10,398

)

 

 

(0.11

)

Subtotal adjustments

 

6,402

 

 

 

0.07

 

 

 

(2,029

)

 

 

(0.02

)

Adjusted net income attributable to UHS

$

400,368

 

 

$

4.65

 

 

$

470,459

 

 

$

5.21

 

 

 

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Six months

 

 

 

ended June 30,

 

 

ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income

 

$

256,504

 

 

$

241,265

 

 

$

400,964

 

 

$

478,663

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized derivative gains (losses) on cash flow hedges

 

 

0

 

 

 

(1,008

)

 

 

0

 

 

 

(3,925

)

Foreign currency translation adjustment

 

 

6,676

 

 

 

5,159

 

 

 

(32,525

)

 

 

(9,103

)

Other comprehensive income (loss)  before tax

 

 

6,676

 

 

 

4,151

 

 

 

(32,525

)

 

 

(13,028

)

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

 

 

898

 

 

 

1,616

 

 

 

(1,210

)

 

 

(850

)

Total other comprehensive income (loss), net of tax

 

 

5,778

 

 

 

2,535

 

 

 

(31,315

)

 

 

(12,178

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

262,282

 

 

 

243,800

 

 

 

369,649

 

 

 

466,485

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

4,575

 

 

 

2,945

 

 

 

6,998

 

 

 

6,175

 

Comprehensive income attributable to UHS

 

$

257,707

 

 

$

240,855

 

 

$

362,651

 

 

$

460,310

 

 


Universal Health Services, Inc.

 

Condensed Consolidated Balance Sheets

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

539,622

 

 

$

61,268

 

Accounts receivable, net

 

 

1,438,697

 

 

 

1,560,847

 

Supplies

 

 

167,626

 

 

 

159,889

 

Other current assets

 

 

150,842

 

 

 

133,930

 

Total current assets

 

 

2,296,787

 

 

 

1,915,934

 

 

 

 

 

 

 

 

 

 

Property and equipment

 

 

9,398,890

 

 

 

9,106,377

 

Less: accumulated depreciation

 

 

(4,294,341

)

 

 

(4,089,679

)

 

 

 

5,104,549

 

 

 

5,016,698

 

Other assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

3,836,020

 

 

 

3,869,760

 

Deferred income taxes

 

 

20,241

 

 

 

16,189

 

Right of use assets-operating leases

 

 

335,388

 

 

 

326,518

 

Deferred charges

 

 

6,390

 

 

 

6,373

 

Other

 

 

549,124

 

 

 

516,778

 

Total Assets

 

$

12,148,499

 

 

$

11,668,250

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

82,085

 

 

$

87,550

 

Accounts payable and other liabilities

 

 

1,371,698

 

 

 

1,272,374

 

Medicare accelerated payments and deferred governmental stimulus grants

 

 

477,099

 

 

 

0

 

Legal reserves

 

 

145,227

 

 

 

144,509

 

Operating lease liabilities

 

 

56,629

 

 

 

56,442

 

Federal and state taxes

 

 

126,431

 

 

 

2,515

 

Total current liabilities

 

 

2,259,169

 

 

 

1,563,390

 

 

 

 

 

 

 

 

 

 

Other noncurrent liabilities

 

 

374,616

 

 

 

329,932

 

Operating lease liabilities noncurrent

 

 

279,747

 

 

 

270,076

 

Long-term debt

 

 

3,449,940

 

 

 

3,896,577

 

Deferred income taxes

 

 

19,168

 

 

 

25,071

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

4,287

 

 

 

4,333

 

 

 

 

 

 

 

 

 

 

UHS common stockholders' equity

 

 

5,688,647

 

 

 

5,504,105

 

Noncontrolling interest

 

 

72,925

 

 

 

74,766

 

Total equity

 

 

5,761,572

 

 

 

5,578,871

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

12,148,499

 

 

$

11,668,250

 

 


Universal Health Services, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

(unaudited)

 

 

Six months

 

 

ended June 30,

 

 

2020

 

 

2019

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

Net income

$

400,964

 

 

$

478,663

 

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

 

 

 

 

 

 

 

Depreciation & amortization

 

250,602

 

 

 

241,208

 

Loss on sale of assets and businesses

 

2,161

 

 

 

0

 

Stock-based compensation expense

 

33,954

 

 

 

34,676

 

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

 

 

 

 

 

 

 

Accounts receivable

 

131,294

 

 

 

(101,329

)

Accrued interest

 

(2,191

)

 

 

948

 

Accrued and deferred income taxes

 

116,707

 

 

 

(16,846

)

Other working capital accounts

 

26,361

 

 

 

30,082

 

Medicare accelerated payments and deferred governmental stimulus grants

 

477,099

 

 

 

0

 

Other assets and deferred charges