Universal Health Services, Inc. Reports 2020 First Quarter Financial Results And Uncertainties Related To COVID-19

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

KING OF PRUSSIA, Pa., April 27, 2020 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $142.0 million, or $1.64 per diluted share, during the first quarter of 2020, as compared to $234.2 million, or $2.57 per diluted share, during the comparable quarter of 2019. Net revenues increased 0.9% to $2.830 billion during the first quarter of 2020 as compared to $2.804 billion during the first quarter of 2019.

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

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2020, was a net aggregate unfavorable after-tax impact of $8.1 million, or $.09 per diluted share, consisting of the following: (i) an after-tax unrealized loss of $7.4 million, or $.08 per diluted share, ($9.6 million pre-tax which is included in "Other (income) expense, net"), resulting from a decrease in the market value of shares of certain marketable securities held for investment and classified as available for sale, and; (ii) a unfavorable after-tax impact of $0.8 million, or $.01 per diluted share, resulting from our adoption of ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09").

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2019, is a favorable after-tax impact of $10.9 million, or $.12 per diluted share, resulting from our adoption of ASU 2016-09.

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

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI", NCI is net income attributable to noncontrolling interests), was $349.1 million during the first quarter of 2020, as compared to $452.7 million during the first quarter of 2019. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, was $358.7 million during the first quarter of 2020 as compared to $457.2 million during the first quarter of 2019.

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

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

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

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

  • Effected initiatives to produce increased labor productivity and reductions to certain other costs.
  • Reduced spend rate and magnitude of certain previously planned capital projects and expenditures.
  • Suspended our stock repurchase program and payment of quarterly dividends.

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

Acute Care Services – Three-month periods ended March 31, 2020 and 2019:
During the first quarter of 2020, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) decreased 4.0% and adjusted patient days decreased 0.2%, as compared to the first quarter of 2019. At these facilities, net revenue per adjusted admission increased 3.7% while net revenue per adjusted patient day decreased 0.3% during the first quarter of 2020 as compared to the first quarter of 2019. Net revenues from our acute care services on a same facility basis increased 0.4% during the first quarter of 2020 as compared to the first quarter of 2019.

Behavioral Health Care Services – Three-month periods ended March 31, 2020 and 2019:
During the first quarter of 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased 2.0% while adjusted patient days decreased 1.3% as compared to the first quarter of 2019. At these facilities, net revenue per adjusted admission increased 4.3% while net revenue per adjusted patient day increased 3.7% during the first quarter of 2020 as compared to the comparable quarter in 2019. On a same facility basis, our behavioral health care services' net revenues increased 2.2% during the first quarter of 2020 as compared to the first quarter of 2019.

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

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

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

  • $998 million of available borrowing capacity pursuant to the terms of our $1 billion revolving credit facility, net of $2 million of outstanding letters of credit (there were no borrowings outstanding), and;
  • $190 million of available borrowing capacity pursuant to the terms of our $450 million accounts receivable securitization program (net of $260 million of outstanding borrowings).

Share Repurchase Program:
Pursuant to our $2.7 billion stock repurchase program, which had an aggregate available repurchase authorization of $559.6 million as of March 31, 2020, shares of our Class B Common Stock may be repurchased, from time to time as conditions allow, on the open market or in negotiated private transactions. As mentioned above, as part of various Covid-19 initiatives, we have suspended our stock repurchase program.

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

Increase to Self-Insured Professional and General Liability Reserves:
Our estimated liability for self-insured professional and general liability claims is based on a number of factors including, among other things, the number of asserted claims and reported incidents, estimates of losses for these claims based on recent and historical settlement amounts, estimates of incurred but not reported claims based on historical experience, and estimates of amounts recoverable under our commercial insurance policies. As a result of unfavorable trends recently experienced, during the first quarter of 2020, we recorded a $20.0 million increase to our reserves for self-insured professional and general liability claims.

Agreement in Principle with DOJ's Civil Division and DOJ Reserve:
As previously disclosed on July 25, 2019, we have reached an agreement in principle with the DOJ's Civil Division, and on behalf of various states' attorneys general offices, to resolve the civil aspect of the government's investigation of our behavioral health care facilities for $127 million subject to requisite approvals and preparation and execution of definitive settlement and related agreements. At that time, we also disclosed that we were further advised that the previously disclosed investigations being conducted by the DOJ's Criminal Frauds Section in connection with these matters had been closed.

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

Since the agreement in principle with the DOJ's Civil Division is subject to certain required approvals and negotiation and execution of definitive settlement agreements, as well as finalization and execution of a corporate integrity agreement with the Office of Inspector General for the United States Department of Health and Human Services, we can provide no assurance that definitive agreements will ultimately be finalized. We therefore can provide no assurance that final amounts paid in settlement or otherwise, or associated costs, or the income tax deductibility of such payments, will not differ materially from our established reserve and assumptions related to income tax deductibility. Please see Item 3-Legal Proceedings in our Form 10-K for the year ended December 31, 2019 for additional disclosure in connection with this matter.

Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 28, 2020. The dial-in number is 1-877-648-7971.

A live broadcast of the conference call will be available on our website at. Also, a replay of the call will be available following the conclusion of the live call and will be available for one full year.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
One of the nation's largest and most respected providers of hospital and healthcare services, Universal Health Services, Inc. has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues were approximately $11.4 billion during 2019. In 2020, UHS was again recognized as one of the World's Most Admired Companies by Fortune; in 2019 ranked #293 on the Fortune 500; and in 2017, listed #275 in Forbes inaugural ranking of America's Top 500 Public Companies.

Our operating philosophy is as effective today as it was 40 years ago, enabling us to provide compassionate care to our patients and their loved ones. Our strategy includes building or acquiring high quality hospitals in rapidly growing markets, investing in the people and equipment needed to allow each facility to thrive, and becoming the leading healthcare provider in each community we serve.

Headquartered in King of Prussia, PA, UHS has more than 90,000 employees and through its subsidiaries operates 26 acute care hospitals, 331 behavioral health facilities, 42 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 37 U.S. states, Washington, D.C., Puerto Rico and the United Kingdom. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT). For additional information on the Company, visit our web site: http://www.uhsinc.com.

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

We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA net of NCI and Adjusted EBITDA net of NCI, which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect of material items impacting our net income attributable to UHS, such as, our adoption of ASU 2016-09, unrealized gains/losses resulting from changes in the market value of shares of certain marketable securities held for investment and classified as available for sale, and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of long-lived and intangible assets, changes in the reserve established in connection with our discussions with the Department of Justice, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. To obtain a complete understanding of our financial performance these measures should be examined in connection with net income attributable to UHS, as determined in accordance with GAAP, and as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Reports on Form 10-K for the year ended December 31, 2019. Since the items included or excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be alternatives to net income as a measure of our operating performance or profitability. Since these measures, as presented, are not determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable to other similarly titled measures of other companies. Investors are encouraged to use GAAP measures when evaluating our financial performance.

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Universal Health Services, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

       
 

Three months

 

ended March 31,

 

2020

 

2019

       

Net revenues

$2,829,667

 

$2,804,391

       

Operating charges:

     

Salaries, wages and benefits

1,432,669

 

1,365,546

Other operating expenses

689,790

 

644,780

Supplies expense

317,827

 

307,463

Depreciation and amortization

124,394

 

120,040

Lease and rental expense

28,293

 

26,125

 

2,592,973

 

2,463,954

       

Income from operations

236,694

 

340,437

       

Interest expense, net

36,351

 

39,640

Other (income) expense, net

9,560

 

4,501

       

Income before income taxes

190,783

 

296,296

       

Provision for income taxes

46,323

 

58,898

       

Net income

144,460

 

237,398

       

Less: Net income attributable to

     

noncontrolling interests ("NCI")

2,423

 

3,230

       

Net income attributable to UHS

$142,037

 

$234,168

       
       
       
       
       
       

Basic earnings per share attributable to UHS (a)

$1.64

 

$2.57

       

Diluted earnings per share attributable to UHS (a)

$1.64

 

$2.57

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

       
 

Three months

(a) Earnings per share calculation:

ended March 31,

 

2020

 

2019

Basic and diluted:

     

Net income attributable to UHS

$142,037

 

$234,168

Less: Net income attributable to unvested restricted share grants

(373)

 

(515)

Net income attributable to UHS - basic and diluted

$141,664

 

$233,653

       

Weighted average number of common shares - basic

86,212

 

90,776

       

Basic earnings per share attributable to UHS:

$1.64

 

$2.57

       

Weighted average number of common shares

86,212

 

90,776

Add: Other share equivalents

243

 

191

Weighted average number of common shares and equiv. - diluted

86,455

 

90,967

       

Diluted earnings per share attributable to UHS:

$1.64

 

$2.57

Universal Health Services, Inc.

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

For the Three Months ended March 31, 2020 and 2019

(in thousands, except per share amounts)

(unaudited)

               
               
               

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

               
 

Three months ended

 

% Net

 

Three months ended

 

% Net

 

March 31, 2020

 

revenues

 

March 31, 2019

 

revenues

               

Net income attributable to UHS

$142,037

     

$234,168

   

Depreciation and amortization

124,394

     

120,040

   

Interest expense, net

36,351

     

39,640

   

Provision for income taxes

46,323

     

58,898

   

EBITDA net of NCI

$349,105

 

12.3%

 

$452,746

 

16.1%

               

Other (income) expense, net

9,560

     

4,501

   

Adjusted EBITDA net of NCI

$358,665

 

12.7%

 

$457,247

 

16.3%

               

Net revenues

$2,829,667

     

$2,804,391

   
               
               
               
               
               

Calculation of Adjusted Net Income Attributable to UHS

               
 

Three months ended

 

Three months ended

 

March 31, 2020

 

March 31, 2019

     

Per

     

Per

 

Amount

 

Diluted Share

 

Amount

 

Diluted Share

               

Net income attributable to UHS

$142,037

 

$1.64

 

$234,168

 

$2.57

Plus/minus after-tax adjustments:

             

Unrealized loss on marketable securities held for sale

7,350

 

0.08

 

-

 

-

Impact of ASU 2016-09

770

 

0.01

 

(10,907)

 

(0.12)

Subtotal adjustments

8,120

 

0.09

 

(10,907)

 

(0.12)

Adjusted net income attributable to UHS

$150,157

 

$1.73

 

$223,261

 

$2.45

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

       
 

Three months

 

ended March 31,

 

2020

 

2019

       

Net income

$144,460

 

$237,398

Other comprehensive income (loss):

     

Unrealized derivative gains (losses) on cash flow hedges

0

 

(2,917)

Foreign currency translation adjustment

(39,201)

 

(14,262)

Other comprehensive income (loss) before tax

(39,201)

 

(17,179)

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

(2,108)

 

(2,466)

Total other comprehensive income (loss), net of tax

(37,093)

 

(14,713)

       

Comprehensive income

107,367

 

222,685

Less: Comprehensive income attributable to noncontrolling interests

2,423

 

3,230

Comprehensive income attributable to UHS

$104,944

 

$219,455

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

             
     

March 31,

   

December 31,

     

2020

   

2019

Assets

           

Current assets:

           

Cash and cash equivalents

 

$

54,619

 

$

61,268

Accounts receivable, net

   

1,486,829

   

1,560,847

Supplies

   

162,597

   

159,889

Other current assets

   

130,301

   

133,930

Total current assets

   

1,834,346

   

1,915,934

             

Property and equipment

   

9,232,949

   

9,106,377

Less: accumulated depreciation

   

(4,190,658)

   

(4,089,679)

     

5,042,291

   

5,016,698

             

Other assets:

           

Goodwill

   

3,836,566

   

3,869,760

Deferred income taxes

   

17,482

   

16,189

Right of use assets-operating leases

   

341,264

   

326,518

Deferred charges

   

5,936

   

6,373

Other

   

542,541

   

516,778

Total Assets

 

$

11,620,426

 

$

11,668,250

             

Liabilities and Stockholders' Equity

           

Current liabilities:

           

Current maturities of long-term debt

 

$

69,521

 

$

87,550

Accounts payable and accrued liabilities

   

1,382,652

   

1,272,374

Legal reserves

   

145,227

   

144,509

Operating lease liabilities

   

57,772

   

56,442

Federal and state taxes

   

34,779

   

2,515

Total current liabilities

   

1,689,951

   

1,563,390

             

Other noncurrent liabilities

   

387,669

   

329,932

Operating lease liabilities noncurrent

   

284,008

   

270,076

Long-term debt

   

3,735,799

   

3,896,577

Deferred income taxes

   

34,003

   

25,071

             

Redeemable noncontrolling interest

   

3,953

   

4,333

             

UHS common stockholders' equity

   

5,413,209

   

5,504,105

Noncontrolling interest

   

71,834

   

74,766

Total equity

   

5,485,043

   

5,578,871

             

Total Liabilities and Stockholders' Equity

 

$

11,620,426

 

$

11,668,250

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

Three months

   
 

ended March 31,

 

2020

 

2019

       

Cash Flows from Operating Activities:

     

Net income

$144,460

 

$237,398

Adjustments to reconcile net income to net

     

cash provided by operating activities:

     

Depreciation & amortization

124,394

 

120,040

Stock-based compensation expense

18,047

 

17,591

Changes in assets & liabilities, net of effects from

     

acquisitions and dispositions:

     

Accounts receivable

69,763

 

(101,619)

Accrued interest

(4,412)

 

(2,687)

Accrued and deferred income taxes

45,200

 

52,291

Other working capital accounts

73,929

 

107,878

Other assets and deferred charges

11,084

 

(3,771)

Other

(3,038)

 

2,605

Accrued insurance expense, net of commercial premiums paid

49,559

 

24,398

Payments made in settlement of self-insurance claims

(26,924)

 

(22,320)

Net cash provided by operating activities

502,062

 

431,804

       

Cash Flows from Investing Activities:

     

Property and equipment additions, net of disposals

(184,102)

 

(69,848)

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

51,691

 

(28,008)

Costs incurred for purchase and implementation of information technology applications

(1,857)

 

(9,678)

Investment in, and advances to, joint ventures and other

(751)

 

(879)

Net cash used in investing activities

(135,019)

 

(208,413)

       

Cash Flows from Financing Activities:

     

Reduction of long-term debt

(185,098)

 

(114,540)

Additional borrowings

5,453

 

8,700

Repurchase of common shares

(172,092)

 

(143,785)

Dividends paid

(17,344)

 

(9,081)

Issuance of common stock

3,002

 

2,726

Profit distributions to noncontrolling interests

(5,735)

 

(10,314)

Net cash used in financing activities

(371,814)

 

(266,294)

       

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

(1,673)

 

794

Decrease in cash, cash equivalents and restricted cash

(6,444)

 

(42,109)

Cash, cash equivalents and restricted cash, beginning of period

105,667

 

199,685

Cash, cash equivalents and restricted cash, end of period

$99,223

 

$157,576

       

Supplemental Disclosures of Cash Flow Information:

     

Interest paid

$39,483

 

$41,050

       

Income taxes paid, net of refunds

$6,783

 

$5,087

       

Noncash purchases of property and equipment

$58,935

 

$71,987

       

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

$29,112

 

$355,981

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)

           
           
           
         

% Change

         

Quarter ended

Same Facility:

       

2020-03-31

           

Acute Care Hospitals

         

Revenues

       

0.4%

Adjusted Admissions

       

-4.0%

Adjusted Patient Days

       

-0.2%

Revenue Per Adjusted Admission

     

3.7%

Revenue Per Adjusted Patient Day

     

-0.3%

           
           
           

Behavioral Health Hospitals

         

Revenues

       

2.2%

Adjusted Admissions

       

-2.0%

Adjusted Patient Days

       

-1.3%

Revenue Per Adjusted Admission

     

4.3%

Revenue Per Adjusted Patient Day

     

3.7%

           
           
           
           

UHS Consolidated

   

First quarter ended

     

2020-03-31

 

2019-03-31

           

Revenues

   

$2,829,667

 

$2,804,391

EBITDA net of NCI

   

$349,105

 

$452,746

EBITDA Margin net of NCI

   

12.3%

 

16.1%

Adjusted EBITDA net of NCI

   

$358,665

 

$457,247

Adjusted EBITDA Margin net of NCI

 

12.7%

 

16.3%

           
           

Cash Flow From Operations

   

$502,062

 

$431,804

Days Sales Outstanding

   

48

 

51

Capital Expenditures

   

$184,102

 

$169,848

           

Debt

   

$3,805,320

 

$3,893,929

UHS' Shareholders Equity

   

$5,413,209

 

$5,482,415

Debt / Total Capitalization

   

41.3%

 

41.5%

Debt / EBITDA net of NCI (1)

   

2.37

 

2.38

Debt / Adjusted EBITDA net of NCI (1)

2.23

 

2.21

Debt / Cash From Operations (1)

   

2.52

 

3.00

           

(1) Latest 4 quarters

         

Universal Health Services, Inc.

     

Acute Care Hospital Services

     

For the three months ended

     

March 31, 2020 and 2019

     

(in thousands)

     
                         
                         

Same Facility Basis - Acute Care Hospital Services

                       
                         
   

Three months ended

 

Three months ended

       
   

March 31, 2020

 

March 31, 2019

       
   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues

       

Net revenues

 

$1,497,123

 

100.0%

 

$1,491,351

 

100.0%

       

Operating charges:

                       

Salaries, wages and benefits

 

658,929

 

44.0%

 

619,317

 

41.5%

       

Other operating expenses

 

375,531

 

25.1%

 

332,738

 

22.3%

       

Supplies expense

 

264,530

 

17.7%

 

258,144

 

17.3%

       

Depreciation and amortization

 

77,928

 

5.2%

 

74,361

 

5.0%

       

Lease and rental expense

 

16,020

 

1.1%

 

14,299

 

1.0%

       

Subtotal-operating expenses

 

1,392,938

 

93.0%

 

1,298,859

 

87.1%

       

Income from operations

 

104,185

 

7.0%

 

192,492

 

12.9%

       

Interest expense, net

 

618

 

0.0%

 

279

 

0.0%

       

Other (income) expense, net

 

-

 

-

 

-

 

-

       

Income before income taxes

 

$103,567

 

6.9%

 

$192,213

 

12.9%

       
                         
                         
                         

All Acute Care Hospital Services

                       
                         
   

Three months ended

 

Three months ended

       
   

March 31, 2020

 

March 31, 2019

       
   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues

       

Net revenues

 

$1,521,049

 

100.0%

 

$1,514,844

 

100.0%

       

Operating charges:

                       

Salaries, wages and benefits

 

658,959

 

43.3%

 

619,317

 

40.9%

       

Other operating expenses

 

399,457

 

26.3%

 

356,231

 

23.5%

       

Supplies expense

 

264,530

 

17.4%

 

258,144

 

17.0%

       

Depreciation and amortization

 

77,928

 

5.1%

 

74,361

 

4.9%

       

Lease and rental expense

 

16,020

 

1.1%

 

14,299

 

0.9%

       

Subtotal-operating expenses

 

1,416,894

 

93.2%

 

1,322,352

 

87.3%

       

Income from operations

 

104,155

 

6.8%

 

192,492

 

12.7%

       

Interest expense, net

 

618

 

0.0%

 

279

 

0.0%

       

Other (income) expense, net

 

-

 

-

 

-

 

-

       

Income before income taxes

 

$103,537

 

6.8%

 

$192,213

 

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 effect of material items that are nonrecurring or non-operational in nature including items such as, but not limited to, reserves for various matters, settlements, legal judgments and lawsuits, cost related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of long-lived and intangible assets 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 herein and the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2019.

                         

The All Acute Care Hospital Servicestable summarizes the results of operations for all our acute care operations during the periods presented. These amounts include: (i) our acute care 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.

       

Behavioral Health Care Services

       

For the three months ended

       

March 31, 2020 and 2019

       

(in thousands)

       
                         
                         

Same Facility - Behavioral Health Care Services

                       
                         
   

Three months ended

 

Three months ended

       
   

March 31, 2020

 

March 31, 2019

       
   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues

       

Net revenues

 

$1,284,000

 

100.0%

 

$1,256,909

 

100.0%

       

Operating charges:

                       

Salaries, wages and benefits

 

692,477

 

53.9%

 

667,923

 

53.1%

       

Other operating expenses

 

243,209

 

18.9%

 

237,272

 

18.9%

       

Supplies expense

 

51,629

 

4.0%

 

48,716

 

3.9%

       

Depreciation and amortization

 

42,931

 

3.3%

 

40,929

 

3.3%

       

Lease and rental expense

 

11,211

 

0.9%

 

10,620

 

0.8%

       

Subtotal-operating expenses

 

1,041,457

 

81.1%

 

1,005,460

 

80.0%

       

Income from operations

 

242,543

 

18.9%

 

251,449

 

20.0%

       

Interest expense, net

 

364

 

0.0%

 

375

 

0.0%

       

Other (income) expense, net

 

889

 

0.1%

 

675

 

0.1%

       

Income before income taxes

 

$241,290

 

18.8%

 

$250,399

 

19.9%

       
                         
                         
                         

All Behavioral Health Care Services

                       
                         
   

Three months ended

 

Three months ended

       
   

March 31, 2020

 

March 31, 2019

       
   

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues

       

Net revenues

 

$1,306,109

 

100.0%

 

$1,286,383

 

100.0%

       

Operating charges:

                       

Salaries, wages and benefits

 

693,272

 

53.1%

 

675,699

 

52.5%

       

Other operating expenses

 

266,182

 

20.4%

 

262,137

 

20.4%

       

Supplies expense

 

51,639

 

4.0%

 

49,131

 

3.8%

       

Depreciation and amortization

 

43,889

 

3.4%

 

42,552

 

3.3%

       

Lease and rental expense

 

12,158

 

0.9%

 

11,644

 

0.9%

       

Subtotal-operating expenses

 

1,067,140

 

81.7%

 

1,041,163

 

80.9%

       

Income from operations

 

238,969

 

18.3%

 

245,220

 

19.1%

       

Interest expense, net

 

397

 

0.0%

 

375

 

0.0%

       

Other (income) expense, net

 

889

 

0.1%

 

677

 

0.1%

       

Income before income taxes

 

$237,683

 

18.2%

 

$244,168

 

19.0%

       
                         
                         

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 material items that are nonrecurring or non-operational in nature including items such as, but not limited to, reserves for various matters, settlements, legal judgments, lawsuits and reserves established in connection with the goverment's investigation of our behavioral health care facilities, cost related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of long-lived and intangible assets 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 herein and in the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2019.

                         

The All Behavioral Health Care Servicestable summarizes the results of operations for all our behavioral health care facilities during the periods presented. 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 as well as the results of certain facilities that were closed or restructured during the past year.

Universal Health Services, Inc.

Selected Hospital Statistics

For the three months ended

March 31, 2020 and 2019

                         
                         

AS REPORTED:

                       
                         
                         
   

ACUTE

 

BEHAVIORAL HEALTH

   

03/31/20

 

03/31/19

 

% change

 

03/31/20

 

03/31/19

 

% change

                         

Hospitals owned and leased

 

26

 

26

 

0.0%

 

331

 

327

 

1.2%

Average licensed beds

 

6,451

 

6,371

 

1.3%

 

23,634

 

23,941

 

-1.3%

Average available beds

 

6,279

 

6,195

 

1.4%

 

23,531

 

23,841

 

-1.3%

Patient days

 

370,513

 

369,720

 

0.2%

 

1,592,611

 

1,618,805

 

-1.6%

Average daily census

 

4,071.7

 

4,108.0

 

-0.9%

 

17,501.2

 

17,986.7

 

-2.7%

Occupancy-licensed beds

 

63.1%

 

64.5%

 

-2.1%

 

74.1%

 

75.1%

 

-1.4%

Occupancy-available beds

 

64.8%

 

66.3%

 

-2.2%

 

74.4%

 

75.4%

 

-1.4%

Admissions

 

77,768

 

80,663

 

-3.6%

 

121,017

 

123,707

 

-2.2%

Length of stay

 

4.8

 

4.6

 

3.9%

 

13.2

 

13.1

 

0.6%

                         

Inpatient revenue

 

$7,821,472

 

$7,163,714

 

9.2%

 

$2,525,539

 

$2,483,999

 

1.7%

Outpatient revenue

 

4,681,741

 

4,257,614

 

10.0%

 

259,739

 

266,546

 

-2.6%

Total patient revenue

 

12,503,213

 

11,421,328

 

9.5%

 

2,785,278

 

2,750,545

 

1.3%

Other revenue

 

116,278

 

109,326

 

6.4%

 

56,390

 

48,599

 

16.0%

Gross hospital revenue

 

12,619,491

 

11,530,654

 

9.4%

 

2,841,668

 

2,799,144

 

1.5%

Total deductions

 

11,098,442

 

10,015,810

 

10.8%

 

1,535,559

 

1,512,761

 

1.5%

Net hospital revenue

 

$1,521,049

 

$1,514,844

 

0.4%

 

$1,306,109

 

$1,286,383

 

1.5%

                         
                         

SAME FACILITY:

                       
                         
   

ACUTE

 

BEHAVIORAL HEALTH

   

03/31/20

 

03/31/19

 

% change

 

03/31/20

 

03/31/19

 

% change

                         

Hospitals owned and leased

 

26

 

26

 

0.0%

 

313

 

313

 

0.0%

Average licensed beds

 

6,451

 

6,371

 

1.3%

 

23,484

 

23,352

 

0.6%

Average available beds

 

6,279

 

6,195

 

1.4%

 

23,381

 

23,252

 

0.6%

Patient days

 

370,513

 

369,720

 

0.2%

 

1,585,748

 

1,600,002

 

-0.9%

Average daily census

 

4,071.7

 

4,108.0

 

-0.9%

 

17,425.8

 

17,777.8

 

-2.0%

Occupancy-licensed beds

 

63.1%

 

64.5%

 

-2.1%

 

74.2%

 

76.1%

 

-2.5%

Occupancy-available beds

 

64.8%

 

66.3%

 

-2.2%

 

74.5%

 

76.5%

 

-2.5%

Admissions

 

77,768

 

80,663

 

-3.6%

 

120,416

 

122,288

 

-1.5%

Length of stay

 

4.8

 

4.6

 

3.9%

 

13.2

 

13.1

 

0.6%

Cision View original content:http://www.prnewswire.com/news-releases/universal-health-services-inc-reports-2020-first-quarter-financial-results-and-uncertainties-related-to-covid-19-301047812.html

SOURCE Universal Health Services, Inc.


Company Codes: NYSE:UHS

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