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Universal Health Services, Inc. Reports Significant Increases in 2009 Fourth Quarter and Full Year Earnings Per Diluted Share
Consolidated Results of Operations, As Reported - Three-month periods ended December 31, 2009 and 2008
KING OF PRUSSIA, Pa., Feb 25, 2010 /PRNewswire via COMTEX/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $60.9 million, or $.62 per diluted share, during the fourth quarter of 2009 as compared to $46.5 million, or $.46 per diluted share, during the comparable prior year quarter. Net revenues increased 4% to $1.29 billion during the fourth quarter of 2009 as compared to $1.24 billion during the fourth quarter of 2008.

Consolidated Results of Operations, As Reported - Years ended December 31, 2009 and 2008:

Reported net income attributable to UHS was $260.4 million, or $2.64 per diluted share, during the year ended December 31, 2009 as compared to $199.4 million, or $1.96 per diluted share, during 2008. Net revenues increased 4% to $5.20 billion during 2009 as compared to $5.02 billion during 2008.

Consolidated Results of Operations, As Adjusted - Three-month periods ended December 31, 2009 and 2008:

After adjusting the reported results for the three-month periods ended December 31, 2009 and 2008 to neutralize the net favorable impact of the items mentioned below, and as reflected on the attached Schedules of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedules"), our adjusted net income attributable to UHS was $56.5 million, or an increase of 33% to $.57 per diluted share, during the fourth quarter of 2009 as compared to $43.7 million, or $.43 per diluted share, during the fourth quarter of 2008. Included in the reported and adjusted net income attributable to UHS during the fourth quarter of 2009 was $3.4 million, or $.03 per diluted share, recorded in connection with the completion of a hospital construction management contract.

As indicated on the attached Supplemental Schedule, included in our reported net income attributable to UHS during the three-month period ended December 31, 2009, was a favorable impact of $4.4 million, or $.05 per diluted share, resulting from a reduction to our workers' compensation self-insurance reserves relating primarily to years prior to 2009 based upon a reserve analysis.

Included in our reported net income attributable to UHS during the three-month period ended December 31, 2008 was a combined net favorable impact of $2.8 million, or $.03 per diluted share, resulting from: (i) a charge recorded in connection with the government's investigation of our South Texas Health System affiliates (which was settled during the fourth quarter of 2009); (ii) a reduction to our professional and general liability self-insured claims expense due to partial liquidation proceeds received from a bankrupt commercial insurer, and; (iii) the after-tax income from discontinued operations consisting primarily of a gain recorded on divestiture of an acute care hospital sold during the fourth quarter of 2008.

Consolidated Results of Operations, As Adjusted - Years ended December 31, 2009 and 2008:

After adjusting the reported results for the years ended December 31, 2009 and 2008 to neutralize the net favorable impact of the items mentioned below, and as reflected on the attached Supplemental Schedule, our adjusted net income attributable to UHS was $246.2 million, or an increase of 28% to $2.49 per diluted share, during 2009 as compared to $197.3 million, or $1.94 per diluted share, during 2008.

As indicated on the attached Supplemental Schedule, included in our reported net income attributable to UHS during the year ended December 31, 2009, was a combined net favorable impact of $14.2 million, or $.15 per diluted share, resulting from: (i) a favorable adjustment resulting from a reduction to our workers' compensation self-insurance reserves relating primarily to years prior to 2009 based upon a reserve analysis; (ii) a favorable adjustment resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2009 based upon a reserve analysis, partially offset by; (iii) an unfavorable discrete tax item recorded in connection with the settlement payment made to the government during the fourth quarter of 2009 in connection with their investigation of our South Texas Health System affiliates.

Included in our reported net income attributable to UHS during the year ended December 31, 2008 was a combined net favorable impact of $2.0 million, or $.02 per diluted share, resulting from: (i) a charge recorded in connection with the government's investigation of our South Texas Health System affiliates; (ii) a reduction to our professional and general liability self-insured claims expense due to partial liquidation proceeds received from a bankrupt commercial insurer; (iii) gains recorded on divestiture of certain real property and other investment, and; (iv) the after-tax income from discontinued operations consisting primarily of a gain recorded on divestiture of an acute care hospital sold during the fourth quarter of 2008.

"Despite the very difficult operating environment in 2009, we are very proud of the manner in which our operators effectively managed the business and increased margins in both our business segments", said Alan B. Miller, Chief Executive Officer. "Although we're pleased with our 2009 accomplishments, we know that 2010 will present us with continued economic challenges and we remain committed to the same level of high quality performance and results."

Acute Care Services - Three-month periods ended December 31, 2009 and 2008:

At our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 3.1% while adjusted patient days increased 1.0% during the fourth quarter of 2009, as compared to the fourth quarter of 2008. Net revenues at these facilities increased 5.6% during the fourth quarter of 2009 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 2.5% while net revenue per adjusted patient day increased 4.6% during the fourth quarter of 2009 as compared to the comparable quarter of the prior year. On a same facility basis, the operating margin (net revenues less salaries, wages and benefits, other operating expenses, supplies expense and provision for doubtful accounts) at our acute care hospitals decreased to 13.4% during the fourth quarter of 2009 as compared to 14.0% during the fourth quarter of 2008, due to an increase in the provision for doubtful accounts. The provision for doubtful accounts at these hospitals amounted to 12.7% of net revenues during the fourth quarter of 2009 as compared to 12.2% during the fourth quarter of 2008.

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $162 million and $159 million during the three-month periods ended December 31, 2009 and 2008, respectively.

Acute Care Services - Years ended December 31, 2009 and 2008:

During the year ended December 31, 2009, on a same facility basis, adjusted admissions to our acute care facilities increased 2.2% while adjusted patient days increased 0.1%, as compared to 2008. Net revenues at our acute care facilities increased 3.6% during 2009 as compared to 2008. At these facilities, net revenue per adjusted admission increased 1.4% while net revenue per adjusted patient day increased 3.5% during 2009 as compared to 2008. On a same facility basis, the operating margin at our acute care hospitals increased to 15.2% during 2009 as compared to 14.2% during 2008.

Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $671 million and $609 million during 2009 and 2008, respectively.

Behavioral Health Care Services - Three-month periods ended December 31, 2009 and 2008:

At our behavioral health care facilities, on a same facility basis, adjusted admissions increased 4.5% and adjusted patient days increased 3.9% during the fourth quarter of 2009 as compared to the fourth quarter of 2008. Net revenues at these facilities increased 5.1% during the fourth quarter of 2009 as compared to the comparable quarter in the prior year. At these facilities, net revenue per adjusted admission increased 0.6% while net revenue per adjusted patient day increased 1.2% during the fourth quarter of 2009 over the comparable prior year quarter. The operating margin at our behavioral health care facilities owned during both periods increased to 25.1% during the fourth quarter of 2009 as compared to 22.7% during the fourth quarter of 2008.

Behavioral Health Care Services - Years ended December 31, 2009 and 2008:

During the year ended December 31, 2009, on a same facility basis, adjusted admissions to our behavioral health care facilities increased 1.9% while adjusted patient days increased 0.9%, as compared to 2008. Net revenues at our behavioral health care facilities increased 3.9% during 2009 as compared to 2008. At these facilities, net revenue per adjusted admission increased 2.0% while net revenue per adjusted patient day increased 3.0% during 2009 as compared to 2008. On a same facility basis, the operating margin at our behavioral health facilities increased to 25.4% during 2009 as compared to 23.8% during 2008.

2010 Full Year Guidance:

Based upon the operating trends and financial results experienced during 2009, and subject to certain assumptions, provisions and adjustments, including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures, our estimated range of earnings per diluted share attributable to UHS for the year ended December 31, 2010 is $2.45 to $2.65 on projected net revenues of $5.55 billion.

This guidance range includes an aggregate reduction to our 2010 net income attributable to UHS, as compared to 2009, of $28 million, or $.18 per diluted share, due to: (i) expected reimbursement reductions pursuant to Texas Medicaid supplemental payments; (ii) expected reimbursement reductions pursuant to the Texas disproportionate share hospital fund payments; (iii) expected Texas Medicaid reimbursement reductions related to our hospitals in South Texas, and; (iv) no projected income in 2010 from our hospital construction management business.

This guidance range also excludes the impact of items, if applicable, that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other amounts that may be reflected in our 2010 financial statements that relate to prior periods.

Two-For-One Stock Split:

During the fourth quarter of 2009, we declared and paid a two-for-one stock split in the form of a 100% stock dividend which was paid on December 15, 2009 to shareholders of record as of December 1, 2009. All classes of common stock participated on a pro rata basis and all references to share quantities and earnings per share for all periods presented herein have been adjusted to reflect the two-for-one stock split.

Conference Call Information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 26, 2010. The dial-in number is 1-877-648-7971. A digital recording of the conference call will be available two hours after the completion of the conference call on February 26, 2010 and will continue through midnight on March 11, 2010. The recording can be accessed by calling 1-800-642-1687 and entering the conference ID number 54426914. This call will also be available live over the internet at our web site at www.uhsinc.com. The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents at www.streetevents.com.

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

Universal Health Services, Inc. ("UHS") is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico. 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, 2009), may cause the results to differ materially from those anticipated in the forward-looking statements. Many of the factors that will determine our future results are beyond our capability to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially. Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

We believe that operating income, operating margin, adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share and earnings before interest, taxes, depreciation and amortization ("EBITDA"), which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of items that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits 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, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2009. 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.



                        Universal Health Services, Inc.
                        -------------------------------
                       Consolidated Statements of Income
                       ---------------------------------
                    (in thousands, except per share amounts)


                                     Three months         Twelve months
                                  ended December 31,    ended December 31,
                                  ------------------    ------------------
                                   2009       2008       2009       2008
                                   ----       ----       ----       ----

    Net revenues                $1,291,211 $1,237,402 $5,202,379 $5,022,417

    Operating charges:
       Salaries, wages and
        benefits                   562,931    532,667  2,204,422  2,133,181
       Other operating expenses    235,016    267,021    994,923  1,044,278
       Supplies expense            177,219    170,231    699,249    694,477
       Provision for doubtful
        accounts                   127,869    111,299    508,603    476,745
       Depreciation and
        amortization                51,279     51,091    204,703    193,635
       Lease and rental expense     18,035     16,861     69,947     69,882
                                    ------     ------     ------     ------
                                 1,172,349  1,149,170  4,681,847  4,612,198
                                 ---------  ---------  ---------  ---------

    Income from operations         118,862     88,232    520,532    410,219

    Interest expense, net           10,513     13,060     45,810     53,207
                                    ------     ------     ------     ------

    Income from continuing
     operations before income
     taxes                         108,349     75,172    474,722    357,012

    Provision for income taxes      39,167     28,026    170,475    123,378
                                    ------     ------    -------    -------

    Income from continuing
     operations                     69,182     47,146    304,247    233,634

    Income from discontinued
     operations, net of
     income tax expense (a)              -      6,002          -      6,436
                                        --      -----         --      -----

    Net income                      69,182     53,148    304,247    240,070

    Less:  Net income attributable
     to noncontrolling interests     8,317      6,671     43,874     40,693
                                   -------    -------   --------   --------
    Net income attributable to
     UHS                           $60,865    $46,477   $260,373   $199,377
                                   =======    =======   ========   ========

    Basic earnings per share
     attributable to UHS (b)
       From continuing operations    $0.62      $0.40      $2.65      $1.90
       From discontinued operations      -       0.06          -       0.06
                                        --       ----         --       ----
         Total basic earnings per
          share                      $0.62      $0.46      $2.65      $1.96
                                     =====      =====      =====      =====

    Diluted earnings per share
     attributable to UHS (b)
       From continuing operations    $0.62      $0.40      $2.64      $1.90
       From discontinued operations      -       0.06          -       0.06
                                        --       ----         --       ----
          Total diluted earnings per
           share                     $0.62      $0.46      $2.64      $1.96
                                     =====      =====      =====      =====



                        Universal Health Services, Inc.
                        -------------------------------
                Footnotes to Consolidated Statements of Income
                ----------------------------------------------
                   (in thousands, except per share amounts)


                                       Three months          Twelve months
                                     ended December 31,     ended December 31,
                                    ------------------     ------------------
                                        2009     2008        2009      2008
                                        ----     ----        ----      ----

    (a) Calculation of income from
     discontinued operations, net of
     income tax:
    --------------------------------

    Loss from discontinued
     operations, pre-tax                   -    ($3,702)        -   ($2,996)
    Gain on divestiture                    -     13,413         -    13,413
                                          --     ------        --    ------
    Income from discontinued
     operations, pre-tax                   -      9,711         -    10,417
    Income tax expense                     -     (3,709)        -    (3,981)
                                          --     ------        --    ------
    Income from discontinued
     operations, net of taxes              -     $6,002         -    $6,436
                                          ==     ======        ==    ======


    (b) Earnings per share calculation:
    -----------------------------------

    Basic and diluted:
    ------------------
    Income from continuing
     operations                      $69,182    $47,146  $304,247  $233,634
    Less: Net income attributable
     to noncontrolling
     interest                         (8,317)    (6,671)  (43,874)  (40,693)
    Less: Net income attributable
     to unvested restricted
     share grants                       (234)      (143)   (1,146)     (719)
                                        ----       ----    ------      ----
    Income from continuing
     operations attributable to
     UHS - basic and diluted          60,631     40,332   259,227   192,222
    Income from discontinued
     operations, net of taxes              -      6,002         -     6,436
                                          --      -----        --     -----
    Net income attributable to UHS -
      basic and diluted              $60,631    $46,334  $259,227  $198,658
                                     =======    =======  ========  ========

    Weighted average number of
     common shares - basic            97,290    100,016    97,794   101,222
                                      ------    -------    ------   -------

    Basic earnings per share
     attributable to UHS:
         From continuing operations    $0.62      $0.40     $2.65     $1.90
         From discontinued
          operations                       -       0.06         -      0.06
                                          --       ----        --      ----
              Total basic earnings per
               share                   $0.62      $0.46     $2.65     $1.96
                                       =====      =====     =====     =====

    Weighted average number of
     common shares                    97,290    100,016    97,794   101,222
    Add: Other share equivalents         790        256       481       196
                                         ---        ---       ---       ---
    Weighted average number of
     common shares and equiv. -
     diluted                          98,080    100,272    98,275   101,418
                                      ------    -------    ------   -------

    Diluted earnings per share
     attributable to UHS:
         From continuing operations    $0.62      $0.40     $2.64     $1.90
         From discontinued
          operations                       -       0.06         -      0.06
                                          --       ----        --      ----
              Total diluted earnings
               per share               $0.62      $0.46     $2.64     $1.96
                                       =====      =====     =====     =====



                          Universal Health Services, Inc.
                          -------------------------------
        Schedule of Non-GAAP Supplemental Consolidated Statements of Income
                        Information ("Supplemental Schedule")
        --------------------------------------------------------------------
               For the three months ended December 31, 2009 and 2008
               -----------------------------------------------------
                      (in thousands, except per share amounts)



               Calculation of Adjusted Net Income Attributable to UHS
               ------------------------------------------------------

                              Three months ended        Three months ended
                              December 31, 2009         December 31, 2008
                              -----------------         -----------------
                                           Per                        Per
                            Amount    Diluted Share    Amount    Diluted Share
                            ------    -------------    ------    -------------
    Calculation of Adjusted
     Net Income Attributable
     to UHS (excluding
     discontinued operations)
    ------------------------
    Net income
     attributable to UHS     $60,865       $0.62      $46,477        $0.46
    Less: Income from
     discontinued
     operations, net of
     income taxes                  -           -       (6,002)       (0.06)
    Adjustments to
     neutralize impact of:
       Reduction to our
        workers' compensation
        self-insurance
        reserves relating
        primarily to years
        prior to 2009, net
        of income taxes       (4,350)      (0.05)           -            -
       South Texas Health
        System affiliates
        reserve, net of
        income taxes               -           -        9,153         0.09
       Partial liquidation
        proceeds from a
        bankrupt commercial
        insurer, net of
        income taxes               -           -       (5,968)       (0.06)
                                  --          --       ------        -----
    Subtotal - after-tax
     adjustments              (4,350)      (0.05)      (2,817)       (0.03)
                              ------       -----       ------        -----
    Adjusted net income
     attributable to UHS     $56,515       $0.57      $43,660        $0.43
                             =======       =====      =======        =====



                  Calculation of "EBITDA"
                  -----------------------

                             Three months ended       Three months ended
                             December 31, 2009        December 31, 2008
                              -----------------       -----------------
    Calculation of
     "EBITDA"
    --------------
    Net revenues          $1,291,211       100.0%  $1,237,402        100.0%

    Operating charges:
      Salaries, wages
       and benefits          562,931        43.6%     532,667         43.0%
      Other operating
       expenses             235,016        18.2%      267,021         21.6%
      Supplies expense      177,219        13.7%      170,231         13.8%
      Provision for
       doubtful accounts    127,869         9.9%      111,299          9.0%
                            -------         ---       -------          ---
                          1,103,035        85.4%    1,081,218         87.4%
                          ---------        ----     ---------         ----

    Operating income/
     margin                  188,176       14.6%      156,184         12.6%

       Lease and rental
        expense               18,035                   16,861
       Net income
        attributable to
        noncontrolling
        interests              8,317                    6,671
                               -----                    -----

    Earnings before,
     depreciation and
     amortization, interest
     expense, and income
     taxes ("EBITDA")       $161,824                 $132,652
                            ========                 ========



                          Universal Health Services, Inc.
                          -------------------------------
        Schedule of Non-GAAP Supplemental Consolidated Statements of Income
                        Information ("Supplemental Schedule")
        --------------------------------------------------------------------
               For the twelve months ended December 31, 2009 and 2008
               ------------------------------------------------------
                      (in thousands, except per share amounts)



               Calculation of Adjusted Net Income Attributable to UHS
               ------------------------------------------------------

                             Twelve months ended        Twelve months ended
                              December 31, 2009          December 31, 2008
                              -----------------          -----------------
                                           Per                        Per
                            Amount    Diluted Share    Amount    Diluted Share
                            ------    -------------    ------    -------------
    Calculation of Adjusted Net
     Income Attributable to UHS
     (excluding discontinued
     operations)
    ---------------------------
    Net income
     attributable to UHS    $260,373         $2.64    $199,377          $1.96
    Less: Income from
     discontinued
     operations, net of
     income taxes                  -             -      (6,436)         (0.06)
    Adjustments to neutralize
     impact of:
       Reduction to our
        professional and general
        liability self-insurance
        reserves relating
        to years prior to
        2009, net of income
        taxes                (14,168)         (0.14)         -              -
       Reduction to our
        workers' compensation
        self-insurance
        reserves relating
        primarily to years
        prior to 2009, net
        of income taxes       (4,350)         (0.05)         -              -
       Discrete tax item
        recorded in connection
        with settlement payment
        made to government     4,331           0.04          -              -
       Gain on sale of real
        property and other
        investment, net
        of income taxes            -              -     (4,894)         (0.05)
       South Texas Health
        System affiliates
        reserve, net of
        income taxes               -              -     15,255           0.15
       Partial liquidation
        proceeds from a bankrupt
        commercial insurer,
        net of income taxes        -              -     (5,968)         (0.06)
                                  --             --     ------         -----
    Subtotal - after-tax
     adjustments             (14,187)         (0.15)    (2,043)         (0.02)
                             -------          -----      ------         -----
    Adjusted net income
     attributable to UHS    $246,186          $2.49   $197,334           $1.94
                            ========          =====   ========           =====



                     Calculation of "EBITDA"
                     -----------------------

                             Twelve months ended        Twelve months ended
                              December 31, 2009          December 31, 2008
                              -----------------          -----------------
    Calculation of "EBITDA"
    -----------------------
    Net revenues          $5,202,379       100.0%     $5,022,417       100.0%

    Operating charges:
       Salaries, wages
        and benefits       2,204,422        42.4%      2,133,181        42.5%
       Other operating
        expenses             994,923        19.1%      1,044,278        20.8%
       Supplies expense      699,249        13.4%        694,477        13.8%
       Provision for
        doubtful accounts    508,603         9.8%        476,745         9.5%
                             -------         ---         -------         ---
                           4,407,197        84.7%      4,348,681        86.6%
                           ---------        ----       ---------        ----

    Operating income/
     margin                  795,182        15.3%        673,736        13.4%

       Lease and rental
        expense               69,947                      69,882
       Net income
        attributable to
        noncontrolling
        interests             43,874                      40,693
                              ------                      ------

    Earnings before,
     depreciation and
     amortization,
     interest expense,
     and income taxes
     ("EBITDA")             $681,361                    $563,161
                            ========                    ========



                Universal Health Services, Inc.
                -------------------------------
             Condensed Consolidated Balance Sheets
             -------------------------------------
                   (in thousands, unaudited)


                                   December 31,   December 31,
                                       2009           2008
                                       ----           ----
    Assets
    Current assets:
        Cash and cash
         equivalents                 $9,180         $5,460
        Accounts receivable, net    602,559        625,437
        Supplies                     84,272         76,043
        Other current assets         27,270         26,375
        Deferred income taxes        51,336         34,522
        Current assets held for sale 21,580         21,580
                                     ------         ------
              Total current assets  796,197        789,417
                                    -------        -------

    Property and equipment        3,738,818      3,355,974
    Less: accumulated
     depreciation                (1,423,580)    (1,255,682)
                                 ----------     ----------
                                  2,315,238      2,100,292
                                  ---------      ---------

    Other assets:
        Goodwill                    732,685        732,937
        Deferred charges              8,643         10,428
        Other                       111,700        109,388
                                    -------        -------
                                 $3,964,463     $3,742,462
                                 ==========     ==========

    Liabilities and Stockholders'
     Equity
    Current liabilities:
        Current maturities of
         long-term debt              $2,573         $8,708
        Accounts payable and
         accrued liabilities        578,617        542,008
        Federal and state taxes       1,627         10,409
                                      -----         ------
              Total current
               liabilities          582,817        561,125
                                    -------        -------

    Other noncurrent liabilities    375,580        407,652
    Long-term debt                  956,429        990,661
    Deferred income taxes            60,091         12,439


    UHS common stockholders'
     equity                       1,751,071      1,543,850
    Noncontrolling interest         238,475        226,735
                                    -------        -------
              Total equity        1,989,546      1,770,585

                                 ----------     ----------
                                 $3,964,463     $3,742,462
                                 ==========     ==========



                     Universal Health Services, Inc.
                     -------------------------------
                  Consolidated Statements of Cash Flows
                  -------------------------------------
                              (in thousands)

                                                     Twelve months
                                                  ended December 31,
                                                  ------------------
                                                      2009      2008
                                                      ----      ----

    Cash Flows from Operating Activities:
     Net income                                   $304,247  $240,070
     Adjustments to reconcile net income to net
      cash provided by operating activities:
       Depreciation & amortization                 204,703   195,766
       Gains on sales of assets and businesses,
        net of losses                               (1,346)  (21,464)
       Stock-based compensation expense             13,096    14,125
       Provision for settlements                         -    25,000
     Changes in assets & liabilities, net of
      effects from acquisitions and dispositions:
       Accounts receivable                          (1,402)   22,445
       Construction management and other receivable 29,519   (20,693)
       Accrued interest                                357      (123)
       Accrued and deferred income taxes            14,930    (3,483)
       Other working capital accounts              (18,828)    3,878
       Other assets and deferred charges            (1,258)   21,003
       Other                                           755     2,811
       Accrued insurance expense, net of commercial
        premiums paid                               44,314    73,413
       Payments made in settlement of self-
        insurance claims                           (55,782)  (58,561)
                                                   -------   -------
              Net cash provided by operating
               activities                          533,305   494,187
                                                   -------   -------

    Cash Flows from Investing Activities:
       Property and equipment additions, net of
        disposals                                 (379,748) (354,537)
       Acquisition of property and businesses      (12,499)  (23,481)
       Proceeds received from sales of assets and
        businesses                                   9,770    82,062
       Settlement proceeds received related to
        prior year acquisitions, net of expenses         -     1,539
       Investment in joint-venture                       -    (1,249)
                                                        --    ------
              Net cash used in investing
               activities                         (382,477) (295,666)
                                                  --------  --------

    Cash Flows from Financing Activities:
       Reduction of long-term debt                 (66,499) (166,557)
       Additional borrowings                        26,069   151,129
       Financing costs                                   -      (975)
       Repurchase of common shares                 (63,288) (149,404)
       Dividends paid                              (16,706)  (16,150)
       Issuance of common stock                      3,290     2,354
       Profit distributions to noncontrolling
        interests                                  (29,866)  (31,087)
       Capital contributions from noncontrolling
        interests                                      121     2,333
       Purchase of noncontrolling interest in
        majority owned business                       (229)   (1,058)
                                                      ----    ------
              Net cash used in financing
               activities                         (147,108) (209,415)
                                                  --------  --------

    Increase (decrease) in cash and cash
     equivalents                                     3,720   (10,894)
    Cash and cash equivalents, beginning of
     period                                          5,460    16,354
                                                     -----    ------
    Cash and cash equivalents, end of period        $9,180    $5,460
                                                    ======    ======

    Supplemental Disclosures of Cash Flow
     Information:
      Interest paid                                $57,018   $62,285
                                                   =======   =======

      Income taxes paid, net of refunds           $155,368  $130,379
                                                  ========  ========



                         Universal Health Services, Inc.
                      Supplemental Statistical Information
                                (un-audited)

                                            % Change        % Change
                                          Quarter Ended  12 months ended
    --------------
    Same Facility:                         12/31/2009      12/31/2009
    --------------                         ----------      ----------

    Acute Care Hospitals
    --------------------
    Revenues                                  5.6%             3.6%
    Adjusted Admissions                       3.1%             2.2%
    Adjusted Patient Days                     1.0%             0.1%
    Revenue Per Adjusted Admission            2.5%             1.4%
    Revenue Per Adjusted Patient Day          4.6%             3.5%


    Behavioral Health Hospitals
    ---------------------------

    Revenues                                  5.1%             3.9%
    Adjusted Admissions                       4.5%             1.9%
    Adjusted Patient Days                     3.9%             0.9%
    Revenue Per Adjusted Admission            0.6%             2.0%
    Revenue Per Adjusted Patient Day          1.2%             3.0%




    ----------------
    UHS Consolidated     Fourth Quarter Ended           Twelve months Ended
    ----------------     --------------------           -------------------
                       12/31/2009    12/31/2008      12/31/2009    12/31/2008
                       ----------    ----------      ----------    ----------

    Revenues           $1,291,211     $1,237,402    $5,202,379    $5,022,417
    EBITDA   (1)          161,824        132,652       681,361       563,161
    EBITDA Margin (1)        12.5%          10.7%         13.1%         11.2%

    Cash Flow From
     Operations            49,030         79,424       533,305       494,187
    Days Sales Outstanding     43             47            42            46
    Capital Expenditures  101,093        114,657       379,918       354,537

    Debt                                               959,002       999,369
    UHS Common
     Stockholders' Equity                            1,751,071     1,543,850
    Debt / Total
     Capitalization                                       35.4%         39.3%
    Debt / EBITDA  (2)                                    1.41          1.77
    Debt / Cash From
     Operations  (2)                                      1.80          2.02


    Acute Care EBITDAR
     Margin (3)              14.0%          10.8%         15.9%         13.4%
    Behavioral Health
     EBITDAR Margin  (3)     25.0%          22.7%         25.1%         23.3%


    (1)  Net of Minority Interest
    (2)  Latest 4 quarters
    (3)  Before Corporate overhead allocation, minority interest and prior
         year self insurance reserve adjustment booked in 2009


                          UNIVERSAL HEALTH SERVICES, INC.
               SELECTED HOSPITAL STATISTICS FOR THE THREE MONTHS ENDED
                                DECEMBER 31, 2009
    AS REPORTED:
    ------------
                                                    ACUTE (1)
                                           12/31/09     12/31/08    %  change
                                           --------     --------    ---------

     Hospitals owned and leased                 21           21        0.0%
     Average licensed beds                   5,540        5,450        1.7%
     Patient days                          289,469      290,196       -0.3%
     Average daily census                  3,146.4      3,154.3       -0.3%
     Occupancy-licensed beds                  56.8%        57.9%      -1.9%
     Admissions                             66,018       64,851        1.8%
     Length of stay                            4.4          4.5       -2.0%

     Inpatient revenue                  $2,471,016   $2,292,917        7.8%
     Outpatient revenue                  1,018,861      906,669       12.4%
     Total patient revenue               3,489,877    3,199,586        9.1%
     Other revenue                          17,254       16,837        2.5%
     Gross hospital revenue              3,507,131    3,216,423        9.0%

     Total deductions                    2,557,018    2,323,146       10.1%

     Net hospital revenue                 $950,113     $893,277        6.4%


    AS REPORTED:
    ------------
                                               BEHAVIORAL HEALTH
                                          12/31/09    12/31/08    %  change
                                          --------    --------    ---------
     Hospitals owned and leased                84          81        3.7%
     Average licensed beds                  8,054       7,742        4.0%
     Patient days                         530,927     505,028        5.1%
     Average daily census                 5,770.9     5,489.4        5.1%
     Occupancy-licensed beds                 71.7%       70.9%       1.1%
     Admissions                            33,614      31,325        7.3%
     Length of stay                          15.8        16.1       -2.0%

     Inpatient revenue                   $522,505    $484,524        7.8%
     Outpatient revenue                    73,255      64,741       13.2%
     Total patient revenue                595,760     549,265        8.5%
     Other revenue                          8,120       8,096        0.3%
     Gross hospital revenue               603,880     557,361        8.3%

     Total deductions                     272,925     247,251       10.4%

     Net hospital revenue                $330,955    $310,110        6.7%


    SAME FACILITY:
    --------------
                                          ACUTE  (1)
                                 12/31/09     12/31/08    %  change
                                 --------     --------    ---------

     Hospitals owned and leased       21           21        0.0%
     Average licensed beds         5,540        5,450        1.7%
     Patient days                289,469      290,196       -0.3%
     Average daily census        3,146.4      3,154.3       -0.3%
     Occupancy-licensed beds        56.8%        57.9%      -1.9%
     Admissions                   66,018       64,851        1.8%
     Length of stay                  4.4          4.5       -2.0%


    SAME FACILITY:
    --------------
                                         BEHAVIORAL HEALTH (2)
                                  12/31/09       12/31/08  %  change
                                  --------       --------  ---------

     Hospitals owned and leased      81             81        0.0%
     Average licensed beds        7,852          7,742        1.4%
     Patient days               523,590        505,052        3.7%
     Average daily census       5,691.2        5,489.7        3.7%
     Occupancy-licensed beds       72.5%          70.9%       2.2%
     Admissions                  32,646         31,325        4.2%
     Length of stay                16.0           16.1       -0.5%


    (1) Acute care hospitals located in New Orleans and Central Montgomery
        Medical Center are excluded in current and prior years.
    (2) Centennial Peaks, Coastal Behavioral, Shenandoah Valley and
        Springwoods Behavioral are excluded in both current and prior years.
        Central Florida and Summit Ridge Hospital is included from September
        1st through year to date. Broad Horizons, Highlander RTC, Midwest
        Youth and Vista Group Homes are excluded in both current and prior
        years.


                        UNIVERSAL HEALTH SERVICES, INC.
            SELECTED HOSPITAL STATISTICS FOR THE TWELVE MONTHS ENDED
                              DECEMBER 31, 2009

    AS REPORTED:
    ------------
                                             ACUTE (1)
                                     12/31/09     12/31/08   %  change
                                     --------     --------   ---------

     Hospitals owned and leased          21           21        0.0%
     Average licensed beds            5,484        5,452        0.6%
     Patient days                 1,166,704    1,182,985       -1.4%
     Average daily census           3,196.4      3,232.2       -1.1%
     Occupancy-licensed beds           58.3%        59.3%      -1.7%
     Admissions                     265,244      263,536        0.6%
     Length of stay                     4.4          4.5       -2.0%

     Inpatient revenue           $9,901,032   $9,292,596        6.5%
     Outpatient revenue           4,100,427    3,655,051       12.2%
     Total patient revenue       14,001,459   12,947,647        8.1%
     Other revenue                   70,879       72,578       -2.3%
     Gross hospital revenue      14,072,338   13,020,225        8.1%

     Total deductions            10,262,666    9,350,721        9.8%

     Net hospital revenue        $3,809,672   $3,669,504        3.8%


    AS REPORTED:
    ------------
                                       BEHAVIORAL HEALTH
                                     12/31/09    12/31/08   %  change
                                     --------    --------   ---------

     Hospitals owned and leased            84          81       3.7%
     Average licensed beds              7,921       7,658       3.4%
     Patient days                   2,105,625   2,085,114       1.0%
     Average daily census             5,768.8     5,697.0       1.3%
     Occupancy-licensed beds             72.8%       74.4%     -2.1%
     Admissions                       136,639     129,553       5.5%
     Length of stay                      15.4        16.1      -4.3%

     Inpatient revenue             $2,075,141  $1,951,560       6.3%
     Outpatient revenue               282,473     258,022       9.5%
     Total patient revenue          2,357,614   2,209,582       6.7%
     Other revenue                     31,728      34,330      -7.6%
     Gross hospital revenue         2,389,342   2,243,912       6.5%

     Total deductions               1,074,313     992,796       8.2%

     Net hospital revenue          $1,315,029  $1,251,116       5.1%


    SAME FACILITY:
    --------------
                                              ACUTE  (1)
                                     12/31/09     12/31/08    %  change
                                     --------     --------    ---------
     Hospitals owned and leased          21           21        0.0%
     Average licensed beds            5,484        5,452        0.6%
     Patient days                 1,166,613    1,182,985       -1.4%
     Average daily census           3,196.2      3,232.2       -1.1%
     Occupancy-licensed beds           58.3%        59.3%      -1.7%
     Admissions                     265,244      263,536        0.6%
     Length of stay                     4.4          4.5       -2.0%



    SAME FACILITY:
    --------------
                                        BEHAVIORAL HEALTH (2)
                                      12/31/09   12/31/08  %  change
                                      --------   --------  ---------

     Hospitals owned and leased           81         81       0.0%
     Average licensed beds             7,685      7,543       1.9%
     Patient days                  2,072,945  2,048,941       1.2%
     Average daily census            5,679.3    5,598.2       1.4%
     Occupancy-licensed beds            73.9%      74.2%     -0.4%
     Admissions                      132,230    129,379       2.2%
     Length of stay                     15.7       15.8      -1.0%


    (1) Acute care hospitals located in New Orleans and Central
        Montgomery Medical Center are excluded in current and prior years.
    (2) Centennial Peaks, Coastal Behavioral, Shenandoah Valley and
        Springwoods Behavioral are excluded in both current and prior years.
        Central Florida and Summit Ridge Hospital is included from September
        1st through year to date. Broad Horizons, Highlander RTC, Midwest
        Youth and Vista Group Homes are excluded in both current and prior
        years.


SOURCE Universal Health Services, Inc.

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