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Universal Health Services, Inc. Reports 2017 Second Quarter Financial Results And Revises 2017 Full Year Earnings Guidance
Webcast Image Webcast - Live
Q2 2017 Universal Health Services Earnings Conference Call
07/26/17 at 9:00 a.m. ET
Consolidated Results of Operations, As Reported and As Adjusted - Three-month periods ended June 30, 2017 and 2016:

KING OF PRUSSIA, Pa., July 25, 2017 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $185.4 million, or $1.91 per diluted share, during the second quarter of 2017 as compared to $185.6 million, or $1.89 per diluted share, during the comparable quarter of 2016.  

Net revenues increased 7.5% to $2.61 billion during the second quarter of 2017 as compared to $2.43 billion during the second quarter of 2016. As calculated on attached Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our earnings before interest, taxes, depreciation & amortization ("EBITDA") increased 3.2% to $438.3 million during the second quarter of 2017 as compared to $424.8 million during the second quarter of 2016.

For the three-month period ended June 30, 2017, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $188.1 million, or $1.94 per diluted share, as compared to $191.1 million, or $1.94 per diluted share, during the second quarter of 2016.  As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2017, is a net aggregate unfavorable after-tax impact of $2.7 million, or $.03 per diluted share, consisting of: (i) a favorable after-tax impact of $1.4 million, or $.01 per diluted share, resulting from our January 1, 2017 adoption of ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), as discussed below, offset by; (ii) an unfavorable after tax impact of $4.0 million, or $.04 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals.  Included in our reported results during the second quarter of 2016 is an unfavorable after tax impact of $5.5 million, or $.05 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.

Consolidated Results of Operations, As Reported and As Adjusted  – Six-month periods ended June 30, 2017 and 2016:

Reported net income attributable to UHS was $391.4 million, or $4.03 per diluted share, during the first six months of 2017 as compared to $376.3 million, or $3.81 per diluted share, during the comparable period of 2016. 

Net revenues increased 7.1% to $5.23 billion during the first six months of 2017 as compared to $4.88 billion during the first six months of 2016. As calculated on attached Supplemental Schedule, our EBITDA increased 4.5% to $898.6 million during the six-month period ended June 30, 2017 as compared to $860.2 million during the comparable six-month period of 2016.

For the six-month period ended June 30, 2017, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $392.4 million, or $4.04 per diluted share, as compared to $387.0 million, or $3.92 per diluted share, during the first six months of 2016.  As reflected on the Supplemental Schedule, included in our reported results during the six-month period ended June 30, 2017, is a net aggregate unfavorable after-tax impact of $1.0 million, or $.01 per diluted share, consisting of: (i) a favorable after-tax impact of $8.1 million, or $.08 per diluted share, resulting from our January 1, 2017 adoption of ASU 2016-09, offset by; (ii) an unfavorable after tax impact of $9.1 million, or $.09 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.  Included in our reported results during the six-month period ended June 30, 2016 is an unfavorable after tax impact of $10.7 million, or $.11 per diluted share, related to the depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals.

Acute Care Services – Three and six-month periods ended June 30, 2017 and 2016:

During the second quarter of 2017, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 6.0% and adjusted patient days increased 2.7%, as compared to the second quarter of 2016. Net revenues from our acute care services increased 5.1% during the second quarter of 2017 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission remained unchanged while net revenue per adjusted patient day increased 3.2% during the second quarter of 2017 as compared to the comparable quarter of 2016.

During the six-month period ended June 30, 2017, at our acute care hospitals on a same facility basis, adjusted admissions increased 5.5% and adjusted patient days increased 2.2%, as compared to the first six months of 2016. Net revenues from our acute care services increased 4.9% during the first six months of 2017 as compared to the comparable period of the prior year. At these facilities, net revenue per adjusted admission decreased 0.2% while net revenue per adjusted patient day increased 3.1% during the first six months of 2017 as compared to the comparable six-month period of 2016.

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on gross charges, amounting to approximately $485 million and $339 million during the three-month periods ended June 30, 2017 and 2016, respectively, and $901 million and $684 million during the six-month periods ended June 30, 2017 and 2016, respectively. The provision for doubtful accounts at our acute care hospitals amounted to approximately $187 million and $179 million during the three-month periods ended June 30, 2017 and 2016, respectively, and $368 million and $319 million during the six-month periods ended June 30, 2017 and 2016, respectively.          

Behavioral Health Care Services – Three and six-month periods ended June 30, 2017 and 2016:

During the second quarter of 2017, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.7% while adjusted patient days increased 1.4% as compared to the second quarter of 2016. At these facilities, net revenue per adjusted admission decreased 1.4% while net revenue per adjusted patient day increased 0.9% during the second quarter of 2017 as compared to the comparable quarter in 2016. On a same facility basis, our behavioral health care services' net revenues increased 2.2% during the second quarter of 2017 as compared to the second quarter of 2016.    

During the six-month period ended June 30, 2017, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.1% while adjusted patient days increased 0.8% as compared to the first six months of 2016. At these facilities, net revenue per adjusted admission decreased 1.2% while net revenue per adjusted patient day increased 1.0% during the first six months of 2017 as compared to the comparable six-month period of 2016. On a same facility basis, our behavioral health care services' net revenues increased 1.8% during the first six months of 2017 as compared to the comparable period of 2016.   

Net Cash Provided by Operating Activities and Share Repurchase Program:

For the six months ended June 30, 2017, our net cash provided by operating activities decreased to $534 million from $836 million generated during the comparable six-month period of 2016.  The $302 million decrease was caused primarily by a $217 million unfavorable change in other working capital accounts resulting primarily from changes in accrued compensation and accounts payable due to timing of disbursements, and a $92 million unfavorable change in cash flows from foreign currency forward exchange contracts related to our investments in the U.K. 

In February of 2016, our Board of Directors authorized a $400 million increase to our stock repurchase program, which increased the aggregate authorization to $800 million from the previous $400 million authorization approved during the third quarter of 2014.  Pursuant to this program, we may purchase shares of our Class B Common Stock, from time to time as conditions allow, on the open market or in negotiated private transactions. 

In conjunction with this program, during the second quarter of 2017, we have repurchased 983,900 shares at an aggregate cost of $115.9 million (approximately $118 per share).  During the first six months of 2017, we have repurchased approximately 1.1 million shares at an aggregate cost of approximately $127.1 million (approximately $117 per share). Since inception of the program through June 30, 2017, we have repurchased approximately 5.47 million shares at an aggregate cost of approximately $641.2 million (approximately $117 per share). 

Revision of 2017 Full Year Earnings Guidance Range:

Based upon the operating trends and financial results experienced during the first six months of 2017, we are revising our estimated range of adjusted net income attributable to UHS for the year ended December 31, 2017 to $7.50 to $8.00 per diluted share from the previously provided range of $7.70 to $8.20 per diluted share.  This revised guidance range decreases both the lower and upper end of the previously provided range by approximately 2.5%. 

This revised guidance excludes the expected EHR unfavorable impact of $.15 per diluted share for the year, as well as the impact on our provision for income taxes and net income attributable to UHS resulting from of our January 1, 2017 adoption of ASU 2016-09, which as discussed below, we are unable to estimate at this time. This guidance range also excludes the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as, but not limited to, gains/losses on sales of assets and businesses, costs related to extinguishment of debt, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets, impact of share repurchases and other material amounts that may be reflected in our financial statements that relate to prior periods. It is also subject to certain conditions including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.

Adoption of ASU 2016-09:

Effective January 1, 2017, we adopted ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting", which amends the accounting for employee share-based payment transactions to require recognition of the tax effects resulting from the settlement of stock-based awards as income tax expense or benefit in the income statement in the reporting period in which they occur.  In connection with the adoption of ASU 2016-09, during the three and six-month periods ended June 30, 2017, we recorded reductions to our provision for income taxes of $1.4 million and $8.1 million, respectively, which resulted in a corresponding increases in our net income attributable to UHS of $1.4 million, or $.01 per diluted share, during the second quarter of 2017 and $8.1 million, or $.08 per diluted share, during the first six months of 2017.

Since the impact of ASU 2016-09 on our future financial statements is dependent upon the timing of stock option exercises, and the market price of our stock at the time of exercise, we are unable to estimate the impact this adoption will have on our future provision for income taxes and net income attributable to UHS.  This reporting change is applied prospectively, effective as of January 1, 2017, with the exception of the change in the presentation of the excess income tax benefits related to stock-based compensation in the Statement of Cash Flows, which was applied retrospectively.    

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on Wednesday, July 26, 2017. The dial-in number is 1-877-648-7971. 

A live broadcast of the conference call will be available on our website at www.uhsinc.com.  A replay of the call will be available following the conclusion of the live call and will be available for one full year.

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

Universal Health Services, Inc. ("UHS") is one of the nation's largest hospital companies operating through its subsidiaries acute care hospitals, behavioral health facilities and ambulatory centers located throughout the United States, the United Kingdom, Puerto Rico and the U.S. Virgin Islands.  It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT).  For additional information on the Company, visit our web site: http://www.uhsinc.com.

This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2016 and in Item 2-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended March 31, 2017), may cause the results to differ materially from those anticipated in the forward-looking statements.  Many of the factors that will determine our future results are beyond our capability to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially.  Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA and adjusted EBITDA, which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of material items that are nonrecurring or non-operational in nature including, but not limited to, costs/benefits related to the impact on our provision for income taxes and net income attributable to UHS resulting from our January 1, 2017 adoption of ASU 2016-09, the implementation of EHR applications at our acute care hospitals, extinguishment of debt, gains/losses on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits, impairments of long-lived assets, and other items and other material amounts that may be reflected in the current or prior year financial statements that relate to prior periods. 

To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2016 and our Report on Form 10-Q for the quarterly period ended March 31, 2017. Since the items included or excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be alternatives to net income as a measure of our operating performance or profitability. Since these measures, as presented, are not determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable to other similarly titled measures of other companies. Investors are encouraged to use GAAP measures when evaluating our financial performance.

 

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,


2017


2016


2017


2016









Net revenues before provision for doubtful accounts

$2,827,709


$2,638,848


$5,653,181


$5,258,441

  Less: Provision for doubtful accounts

215,353


207,993


427,967


377,788

Net revenues

2,612,356


2,430,855


5,225,214


4,880,653









Operating charges:








   Salaries, wages and benefits

1,236,294


1,130,933


2,474,258


2,279,072

   Other operating expenses

632,193


585,995


1,239,553


1,147,579

   Supplies expense

274,539


254,422


552,153


509,672

   Depreciation and amortization

113,112


101,411


223,910


205,460

   Lease and rental expense

26,027


24,806


51,216


49,258


2,282,165


2,097,567


4,541,090


4,191,041









Income from operations

330,191


333,288


684,124


689,612









Interest expense, net

35,920


30,442


71,427


60,042









Income before income taxes

294,271


302,846


612,697


629,570









Provision for income taxes

103,883


107,397


211,782


218,402









Net income

190,388


195,449


400,915


411,168









Less:  Net income attributable to








noncontrolling interests

4,994


9,872


9,466


34,832









Net income attributable to UHS

$185,394


$185,577


$391,449


$376,336

















































Basic earnings per share attributable to UHS (a)

$1.93


$1.91


$4.06


$3.86









Diluted earnings per share attributable to UHS (a)

$1.91


$1.89


$4.03


$3.81

 

 

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Six months

(a) Earnings per share calculation:

ended June 30,


ended June 30,


2017


2016


2017


2016

Basic and diluted:








Net income attributable to UHS

$185,394


$185,577


$391,449


$376,336

Less: Net income attributable to unvested restricted share grants

(82)


(84)


(176)


(173)

Net income attributable to UHS - basic and diluted

$185,312


$185,493


$391,273


$376,163









Weighted average number of common shares - basic

96,247


97,109


96,416


97,358









Basic earnings per share attributable to UHS:

$1.93


$1.91


$4.06


$3.86









Weighted average number of common shares

96,247


97,109


96,416


97,358

Add: Other share equivalents

795


1,280


791


1,284

Weighted average number of common shares and equiv. - diluted

97,042


98,389


97,207


98,642









Diluted earnings per share attributable to UHS:

$1.91


$1.89


$4.03


$3.81

 

 

Universal Health Services, Inc.

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

For the three months ended June 30, 2017 and 2016

(in thousands, except per share amounts)

(unaudited)

























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










Three months ended


% Net


Three months ended


% Net


June 30, 2017


revenues


June 30, 2016


revenues









Net income attributable to UHS

$185,394




$185,577



   Depreciation and amortization

113,112




101,411



   Interest expense, net

35,920




30,442



   Provision for income taxes

103,883




107,397



EBITDA

$438,309


16.8%


$424,827


17.5%

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

29




(455)



Adjusted EBITDA

$438,338


16.8%


$424,372


17.5%









Net revenues

$2,612,356




$2,430,855











































Calculation of Adjusted Net Income Attributable to UHS










Three months ended


Three months ended


June 30, 2017


June 30, 2016




Per




Per


Amount


Diluted Share


Amount


Diluted Share









Net income attributable to UHS

$185,394


$1.91


$185,577


$1.89

Plus/minus after-tax adjustments:








Impact of ASU 2016-09

(1,382)


(0.01)


-


-

After-tax impact of EHR-related items

4,038


0.04


5,477


0.05

Subtotal

2,656


0.03


5,477


0.05

Adjusted net income attributable to UHS

$188,050


$1.94


$191,054


$1.94

 

 

Universal Health Services, Inc.

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

For the six months ended June 30, 2017 and 2016

(in thousands, except per share amounts)

(unaudited)

























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










Six months ended


% Net


Six months ended


% Net


June 30, 2017


revenues


June 30, 2016


revenues









Net income attributable to UHS

$391,449




$376,336



   Depreciation and amortization

223,910




205,460



   Interest expense, net

71,427




60,042



   Provision for income taxes

211,782




218,402



EBITDA

$898,568


17.2%


$860,240


17.6%

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

(173)




(1,417)



Adjusted EBITDA

$898,395


17.2%


$858,823


17.6%









Net revenues

$5,225,214




$4,880,653











































Calculation of Adjusted Net Income Attributable to UHS










Six months ended


Six months ended


June 30, 2017


June 30, 2016




Per




Per


Amount


Diluted Share


Amount


Diluted Share









Net income attributable to UHS

$391,449


$4.03


$376,336


$3.81

Plus/minus after-tax adjustments:








Impact of ASU 2016-09

(8,132)


(0.08)


-


-

After-tax impact of EHR-related items

9,111


0.09


10,711


0.11

Subtotal

979


0.01


10,711


0.11

Adjusted net income attributable to UHS

$392,428


$4.04


$387,047


$3.92

 

 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)










Three months


Six months


ended June 30,


ended June 30,


2017


2016


2017


2016









Net income

$190,388


$195,449


$400,915


$411,168

Other comprehensive income (loss):








   Unrealized derivative gains (losses) on cash flow hedges

(129)


(3,769)


2,937


(18,068)

   Amortization of terminated hedge

0


(83)


0


(167)

   Unrealized gain (loss) on marketable security

3,066


(621)


4,160


(621)

   Foreign currency translation adjustment

1,713


(4,163)


8,949


1,823

Other comprehensive income (loss) before tax

4,650


(8,636)


16,046


(17,033)

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

1,095


(1,667)


2,646


(7,027)

Total other comprehensive income (loss), net of tax

3,555


(6,969)


13,400


(10,006)









Comprehensive income

193,943


188,480


414,315


401,162

Less: Comprehensive income attributable to noncontrolling interests

4,994


9,872


9,466


34,832

Comprehensive income attributable to UHS

$188,949


$178,608


$404,849


$366,330

 

 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)











June 30,



December 31,




2017



2016

Assets







Current assets:







    Cash and cash equivalents


$

66,446


$

33,747

    Accounts receivable, net



1,456,999



1,439,553

    Supplies



130,698



125,365

    Other current assets



109,017



82,706

          Total current assets



1,763,160



1,681,371








Property and equipment



7,604,631



7,314,437

Less: accumulated depreciation



(3,162,756)



(2,983,481)




4,441,875



4,330,956








Other assets:







    Goodwill



3,803,386



3,784,106

    Deferred charges



11,720



13,520

    Deferred income taxes



1,301



1,234

    Other



531,045



506,615

Total Assets


$

10,552,487


$

10,317,802








Liabilities and Stockholders' Equity







Current liabilities:







    Current maturities of long-term debt


$

126,109


$

105,895

    Accounts payable and accrued liabilities



1,182,396



1,209,329

    Federal and state taxes



13,724



2,149

          Total current liabilities



1,322,229



1,317,373








Other noncurrent liabilities



282,732



275,167

Long-term debt



3,988,912



4,030,230

Deferred income taxes



73,813



88,119








Redeemable noncontrolling interest



6,974



9,319








UHS common stockholders' equity



4,812,854



4,533,220

Noncontrolling interest



64,973



64,374

          Total equity



4,877,827



4,597,594








Total Liabilities and Stockholders' Equity


$

10,552,487


$

10,317,802

 

 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Six months


ended June 30,


2017


2016





Cash Flows from Operating Activities:




  Net income

$400,915


$411,168

  Adjustments to reconcile net income to net 




cash provided by operating activities:




Depreciation & amortization

223,910


205,460

Stock-based compensation expense

29,053


24,693

  Changes in assets & liabilities, net of effects from




acquisitions and dispositions:




   Accounts receivable

941


(45,729)

   Accrued interest

211


9,158

   Accrued and deferred income taxes 

(5,529)


17,997

   Other working capital accounts 

(93,715)


123,315

   Other assets and deferred charges

(19,927)


(8,149)

   Other 

(23,411)


52,050

   Excess income tax benefits related to stock-based compensation

0


35,247

   Accrued insurance expense, net of commercial premiums paid

58,903


44,231

   Payments made in settlement of self-insurance claims

(37,759)


(33,012)

          Net cash provided by operating activities

533,592


836,429





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(262,452)


(247,715)

   Acquisition of property and businesses

(19,610)


(27,525)

   Increase in capital reserves of commercial insurance subsidiary

(3,000)


0

   Costs incurred for purchase and implementation of information technology application

(19,448)


0

          Net cash used in investing activities

(304,510)


(275,240)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(45,675)


(843,351)

   Additional borrowings

21,600


1,022,239

   Acquisition of noncontrolling interests in majority owned businesses

0


(418,000)

   Financing costs

0


(10,734)

   Repurchase of common shares

(147,463)


(239,139)

   Dividends paid

(19,280)


(19,484)

   Issuance of common stock

4,927


4,362

   Profit distributions to noncontrolling interests

(11,430)


(59,615)

          Net cash used in financing activities

(197,321)


(563,722)





   Effect of exchange rate changes on cash and cash equivalents

938


(2,422)

Increase (decrease) in cash and cash equivalents

32,699


(4,955)

Cash and cash equivalents, beginning of period

33,747


61,228

Cash and cash equivalents, end of period

$66,446


$56,273





Supplemental Disclosures of Cash Flow Information:




  Interest paid

$66,765


$53,558





  Income taxes paid, net of refunds

$216,214


$165,947





  Noncash purchases of property and equipment

$63,089


$42,747

 

 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)




































 % Change 


 % Change 








Quarter ended


6 months ended



Same Facility:





6/30/2017


6/30/2017













Acute Care Hospitals










Revenues





5.1%


4.9%



Adjusted Admissions





6.0%


5.5%



Adjusted Patient Days





2.7%


2.2%



Revenue Per Adjusted Admission




0.0%


-0.2%



Revenue Per Adjusted Patient Day




3.2%


3.1%

































Behavioral Health Hospitals










Revenues





2.2%


1.8%



Adjusted Admissions





3.7%


3.1%



Adjusted Patient Days





1.4%


0.8%



Revenue Per Adjusted Admission




-1.4%


-1.2%



Revenue Per Adjusted Patient Day




0.9%


1.0%











































UHS Consolidated



Second quarter ended


Six months ended




6/30/2017


6/30/2016


6/30/2017


6/30/2016











Revenues



$2,612,356


$2,430,855


$5,225,214


$4,880,653

EBITDA (1)



$438,309


$424,827


$898,568


$860,240

EBITDA Margin (1)



16.8%


17.5%


17.2%


17.6%





















Cash Flow From Operations



$50,584


$361,200


$533,592


$836,429

Days Sales Outstanding



51


50


50


50

Capital Expenditures  



$118,114


$120,501


$262,452


$247,715











Debt 







$4,115,021


$3,594,177

UHS' Shareholders Equity







$4,812,854


$4,302,978

Debt / Total Capitalization







46.1%


45.5%

Debt / EBITDA  (2)







2.43


2.21

Debt / Cash From Operations  (2)






3.99


2.67











(1)  Net of Minority Interest 

(2)  Latest 4 quarters

 

 

Universal Health Services, Inc.

Acute Care Hospital Services

For the three and six months ended

June 30, 2017 and 2016

(in thousands)



































Same Facility Basis - Acute Care Hospital Services




































Three months ended


Three months ended


Six months ended


Six months ended



June 30, 2017


June 30, 2016


June 30, 2017


June 30, 2016



Amount


% of Net
Revenues 


Amount


% of Net
Revenues 


Amount


% of Net
Revenues 


Amount


% of Net
Revenues 

Net revenues before provision for doubtful accounts


$1,472,401




$1,409,777




$2,978,717




$2,821,963



Less: Provision for doubtful accounts


178,447




178,918




351,845




318,673



Net revenues


1,293,954


100.0%


1,230,859


100.0%


2,626,872


100.0%


2,503,290


100.0%

Operating charges:

















Salaries, wages and benefits


534,475


41.3%


507,371


41.2%


1,072,630


40.8%


1,019,331


40.7%

Other operating expenses


308,211


23.8%


301,796


24.5%


617,213


23.5%


586,886


23.4%

Supplies expense


218,899


16.9%


203,517


16.5%


441,868


16.8%


410,285


16.4%

Depreciation and amortization


62,716


4.8%


56,294


4.6%


122,705


4.7%


115,603


4.6%

Lease and rental expense


14,263


1.1%


13,875


1.1%


27,474


1.0%


26,917


1.1%

Subtotal-operating expenses


1,138,564


88.0%


1,082,853


88.0%


2,281,890


86.9%


2,159,022


86.2%

Income from operations


155,390


12.0%


148,006


12.0%


344,982


13.1%


344,268


13.8%

Interest expense, net


690


0.1%


822


0.1%


1,434


0.1%


1,643


0.1%

Income before income taxes


$154,700


12.0%


$147,184


12.0%


$343,548


13.1%


$342,625


13.7%




















































All Acute Care Hospital Services




































Three months ended


Three months ended


Six months ended


Six months ended



June 30, 2017


June 30, 2016


June 30, 2017


June 30, 2016



Amount


% of Net
Revenues


Amount


% of Net
Revenues 


Amount


% of Net
Revenues


Amount


% of Net
Revenues 

Net revenues before provision for doubtful accounts


$1,553,826




$1,432,246




$3,124,356




$2,859,148



Less: Provision for doubtful accounts


187,369




178,918




368,352




318,673



Net revenues


1,366,457


100.0%


1,253,328


100.0%


2,756,004


100.0%


2,540,475


100.0%

Operating charges:

















Salaries, wages and benefits


551,735


40.4%


507,745


40.5%


1,106,695


40.2%


1,019,767


40.1%

Other operating expenses


343,669


25.2%


324,496


25.9%


675,968


24.5%


624,457


24.6%

Supplies expense


224,924


16.5%


203,520


16.2%


453,409


16.5%


410,288


16.2%

Depreciation and amortization


73,017


5.3%


65,482


5.2%


144,355


5.2%


134,097


5.3%

Lease and rental expense


14,545


1.1%


13,891


1.1%


28,461


1.0%


26,933


1.1%

Subtotal-operating expenses


1,207,890


88.4%


1,115,134


89.0%


2,408,888


87.4%


2,215,542


87.2%

Income from operations


158,567


11.6%


138,194


11.0%


347,116


12.6%


324,933


12.8%

Interest expense, net


690


0.1%


822


0.1%


1,435


0.1%


1,643


0.1%

Income before income taxes


$157,877


11.6%


$137,372


11.0%


$345,681


12.5%


$323,290


12.7%



































We believe that providing our results on a "Same Facility" basis (which is a non-GAAP measure), which includes the operating results for facilities and businesses operated in both the current year and prior year periods, is helpful to our investors as a measure of our operating performance. Our Same Facility results also neutralize (if applicable) the impact of the EHR applications, the effect of items that are non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, impacts of 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. Our Same Facility basis results exclude from net revenues and other operating expenses, provider tax assessments incurred in each period.However, these provider tax assessments are included in net revenues and other operating expenses as reflected in the table under All Acute Care Hospital Services. The provider tax assessments had no impact on the income before income taxes as reflected on the above tables since the amounts offset between net revenues and other operating expenses. To obtain a complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income as determined in accordance with GAAP and as presented in the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2016 and our Form 10-Q for the quarterly period ended March 31, 2017. 


















The All Acute Care Hospital Servicestable summarizes the results of operations for all our acute care operations during the three and six-month periods ended June 30, 2017 and 2016. These amounts include: (i) our acute care results on a same facility basis, as indicated above; (ii) the impact of the implementation of EHR applications at our acute care hospitals; (iii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iv) certain other amounts including the results of facilities acquired or opened during the last twelve months.

 

 

Universal Health Services, Inc.

Behavioral Health Services

For the three and six months ended

June 30, 2017 and 2016

(in thousands)



































Same Facility - Behavioral Health




































Three months ended


Three months ended


Six months ended


Six months ended



June 30, 2017


June 30, 2016


June 30, 2017


June 30, 2016



Amount


% of Net
Revenues 


Amount


% of Net
Revenues 


Amount


% of Net
Revenues 


Amount


% of Net
Revenues 

Net revenues before provision for doubtful accounts


$1,209,123




$1,184,696




$2,390,357




$2,349,621



Less: Provision for doubtful accounts


28,047




29,109




58,662




58,897



Net revenues


1,181,076


100.0%


1,155,587


100.0%


2,331,695


100.0%


2,290,724


100.0%

Operating charges:

















Salaries, wages and benefits


590,987


50.0%


564,335


48.8%


1,174,551


50.4%


1,125,008


49.1%

Other operating expenses


233,260


19.7%


222,502


19.3%


458,255


19.7%


436,619


19.1%

Supplies expense


48,896


4.1%


48,524


4.2%


96,657


4.1%


96,623


4.2%

Depreciation and amortization


33,633


2.8%


33,006


2.9%


66,632


2.9%


65,749


2.9%

Lease and rental expense


10,920


0.9%


10,746


0.9%


21,497


0.9%


21,815


1.0%

Subtotal-operating expenses


917,696


77.7%


879,113


76.1%


1,817,592


78.0%


1,745,814


76.2%

Income from operations


263,380


22.3%


276,474


23.9%


514,103


22.0%


544,910


23.8%

Interest expense, net


439


0.0%


438


0.0%


1,162


0.0%


882


0.0%

Income before income taxes


$262,941


22.3%


$276,036


23.9%


$512,941


22.0%


$544,028


23.7%




















































All Behavioral Health Care Services




































Three months ended


Three months ended


Six months ended


Six months ended



June 30, 2017


June 30, 2016


June 30, 2017


June 30, 2016



Amount


% of Net
Revenues


Amount


% of Net
Revenues 


Amount


% of Net
Revenues


Amount


% of Net
Revenues 

Net revenues before provision for doubtful accounts


$1,270,547




$1,203,826




$2,520,295




$2,394,916



Less: Provision for doubtful accounts


27,986




29,071




59,612




59,115



Net revenues


1,242,561


100.0%


1,174,755


100.0%


2,460,683


100.0%


2,335,801


100.0%

Operating charges:

















Salaries, wages and benefits


622,829


50.1%


567,280


48.3%


1,236,678


50.3%


1,132,152


48.5%

Other operating expenses


268,241


21.6%


240,714


20.5%


522,719


21.2%


477,729


20.5%

Supplies expense


49,984


4.0%


48,664


4.1%


99,020


4.0%


97,000


4.2%

Depreciation and amortization


37,564


3.0%


33,887


2.9%


74,509


3.0%


67,419


2.9%

Lease and rental expense


11,358


0.9%


10,856


0.9%


22,518


0.9%


22,118


0.9%

Subtotal-operating expenses


989,976


79.7%


901,401


76.7%


1,955,444


79.5%


1,796,418


76.9%

Income from operations


252,585


20.3%


273,354


23.3%


505,239


20.5%


539,383


23.1%

Interest expense, net


439


0.0%


438


0.0%


1,162


0.0%


882


0.0%

Income before income taxes


$252,146


20.3%


$272,916


23.2%


$504,077


20.5%


$538,501


23.1%



































We believe that providing our results on a "Same Facility" basis (which is a non-GAAP measure), which includes the operating results for facilities and businesses operated in both the current year and prior year periods, is helpful to our investors as a measure of our operating performance. Our Same Facility results also neutralize (if applicable), the effect of items that are non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, impacts of 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. Our Same Facility basis results exclude from net revenues and other operating expenses, provider tax assessments incurred in each period.However, these provider tax assessments are included in net revenues and other operating expenses as reflected in the table under All Behavioral Health Care Services. The provider tax assessments had no impact on the income before income taxes as reflected on the above tables since the amounts offset between net revenues and other operating expenses. To obtain a complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income as determined in accordance with GAAP and as presented in the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2016 and our Form 10-Q for the quarterly period ended March 31, 2017. 


















The All Behavioral Health Care Servicestable summarizes the results of operations for all our behavioral health care facilities during the three and six-month periods ended June 30, 2017 and 2016. These amounts include: (i) our behavioral health results on a same facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including the results of facilities acquired or opened during the last twelve months.

 

 

Universal Health Services, Inc.

Selected Hospital Statistics

For the three months ended

June 30, 2017 and 2016



















AS REPORTED:





























ACUTE


BEHAVIORAL HEALTH



6/30/17

6/30/16

%  change


6/30/17

6/30/16

%  change










Hospitals owned and leased


26

24

8.3%


294

213

38.0%

Average licensed beds


6,120

5,854

4.5%


23,133

21,824

6.0%

Patient days


324,249

306,907

5.7%


1,625,692

1,511,204

7.6%

Average daily census


3,563.2

3,372.6

5.7%


17,864.7

16,606.6

7.6%

Occupancy-licensed beds


58.2%

57.6%

1.1%


77.2%

76.1%

1.5%

Admissions


73,552

66,824

10.1%


119,142

114,873

3.7%

Length of stay


4.4

4.6

-4.0%


13.6

13.2

3.7%










Inpatient revenue


$5,430,997

$4,682,682

16.0%


$2,249,135

$1,995,992

12.7%

Outpatient revenue


3,286,930

2,838,852

15.8%


257,312

229,243

12.2%

Total patient revenue


8,717,927

7,521,534

15.9%


2,506,447

2,225,235

12.6%

Other revenue


118,177

118,988

-0.7%


52,883

53,053

-0.3%

Gross hospital revenue


8,836,104

7,640,522

15.6%


2,559,330

2,278,288

12.3%










Total deductions


7,282,278

6,208,276

17.3%


1,288,783

1,074,462

19.9%










Net hospital revenue before 









  provision for doubtful accounts


1,553,826

1,432,246

8.5%


1,270,547

1,203,826

5.5%










Provision for doubtful accounts


187,369

178,918

4.7%


27,986

29,071

-3.7%










Net hospital revenue 


$1,366,457

$1,253,328

9.0%


$1,242,561

$1,174,755

5.8%



















SAME FACILITY:




















ACUTE (1)


BEHAVIORAL HEALTH (2)



6/30/17

6/30/16

%  change


6/30/17

6/30/16

%  change










Hospitals owned and leased


24

24

0.0%


212

212

0.0%

Average licensed beds


5,965

5,854

1.9%


21,922

21,713

1.0%

Patient days


318,555

306,907

3.8%


1,526,725

1,505,750

1.4%

Average daily census


3,500.6

3,372.6

3.8%


16,777.2

16,546.7

1.4%

Occupancy-licensed beds


58.7%

57.6%

1.9%


76.5%

76.2%

0.4%

Admissions


71,557

66,824

7.1%


118,887

114,627

3.7%

Length of stay


4.5

4.6

-3.1%


12.8

13.1

-2.2%










(1) Henderson Hospital and Desert View Hospital are excluded in current year.

(2) CAMBIAN facilities are excluded in current year.

 

 

Universal Health Services, Inc.

Selected Hospital Statistics

For the six months ended

June 30, 2017 and 2016



















AS REPORTED:





























ACUTE


BEHAVIORAL HEALTH



6/30/17

6/30/16

%  change


6/30/17

6/30/16

%  change










Hospitals owned and leased


26

24

8.3%


294

213

38.0%

Average licensed beds


6,114

5,854

4.4%


23,094

21,788

6.0%

Patient days


657,249

632,141

4.0%


3,218,146

3,011,909

6.8%

Average daily census


3,631.2

3,473.3

4.5%


17,779.8

16,549.0

7.4%

Occupancy-licensed beds


59.4%

59.3%

0.2%


77.0%

76.0%

1.3%

Admissions


147,903

136,498

8.4%


237,472

230,294

3.1%

Length of stay


4.4

4.6

-4.0%


13.6

13.1

3.6%










Inpatient revenue


$11,028,847

$9,648,219

14.3%


$4,432,137

$3,955,562

12.0%

Outpatient revenue


6,581,107

5,606,181

17.4%


503,772

450,886

11.7%

Total patient revenue


17,609,954

15,254,400

15.4%


4,935,909

4,406,448

12.0%

Other revenue


239,442

230,545

3.9%


104,359

103,591

0.7%

Gross hospital revenue


17,849,396

15,484,945

15.3%


5,040,268

4,510,039

11.8%










Total deductions


14,725,040

12,625,797

16.6%


2,519,973

2,115,123

19.1%










Net hospital revenue before 









  provision for doubtful accounts


3,124,356

2,859,148

9.3%


2,520,295

2,394,916

5.2%










Provision for doubtful accounts


368,352

318,673

15.6%


59,612

59,115

0.8%










Net hospital revenue 


$2,756,004

$2,540,475

8.5%


$2,460,683

$2,335,801

5.3%



















SAME FACILITY:




















ACUTE (1)


BEHAVIORAL HEALTH (2)



6/30/17

6/30/16

%  change


6/30/17

6/30/16

%  change










Hospitals owned and leased


24

24

0.0%


212

212

0.0%

Average licensed beds


5,959

5,854

1.8%


21,840

21,601

1.1%

Patient days


646,514

632,141

2.3%


3,020,202

2,995,902

0.8%

Average daily census


3,571.9

3,473.3

2.8%


16,686.2

16,461.0

1.4%

Occupancy-licensed beds


59.9%

59.3%

1.0%


76.4%

76.2%

0.3%

Admissions


144,209

136,498

5.6%


236,842

229,762

3.1%

Length of stay


4.5

4.6

-3.2%


12.8

13.0

-2.2%










(1) Henderson Hospital and Desert View Hospital are excluded in current year.

(2) CAMBIAN facilities are excluded in current year.

 

View original content:http://www.prnewswire.com/news-releases/universal-health-services-inc-reports-2017-second-quarter-financial-results-and-revises-2017-full-year-earnings-guidance-300493922.html

SOURCE Universal Health Services, Inc.

Steve Filton, Chief Financial Officer, 610-768-3300

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