UNIVERSAL HEALTH SERVICES, INC. ANNOUNCES 2023 SECOND QUARTER FINANCIAL RESULTS

Consolidated Results of Operations, As Reported and As Adjusted  – Three-month periods ended June 30, 2023 and 2022:

KING OF PRUSSIA, Pa., July 25, 2023 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $171.3 million, or $2.42 per diluted share, during the second quarter of 2023, as compared to $164.1 million, or $2.20 per diluted share, during the second quarter of 2022. Net revenues increased by 6.8% to $3.548 billion during the second quarter of 2023, as compared to $3.323 billion during the second quarter of 2022.

As reflected on the Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our adjusted net income attributable to UHS during the second quarter of 2023 was $179.4 million, or $2.53 per diluted share, as compared to $163.9 million, or $2.20 per diluted share, during the second quarter of 2022.  As reflected on the Supplemental Schedule, included in our reported results was an unrealized after-tax loss of $8.1 million, or $.11 per diluted share, ($10.5 million pre-tax) during the second quarter of 2023. The unrealized loss, which is included in "Other (income) expense, net", resulted from a decrease in the market value of certain equity securities.

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 $419.3 million during the second quarter of 2023, as compared to $384.5 million during the second quarter of 2022. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, was $425.9 million during the second quarter of 2023, as compared to $382.6 million during the second quarter of 2022.

Consolidated Results of Operations, As Reported and As Adjusted  – Six-month periods ended June 30, 2023 and 2022:

Reported net income attributable to UHS was $334.4 million, or $4.70 per diluted share, during the first six months of 2023, as compared to $318.0 million, or $4.22 per diluted share, during the first six months 2022. Net revenues increased by 6.0% to $7.016 billion during the first six months of 2023, as compared to $6.616 billion during the comparable period of 2022.

As reflected on the Supplemental Schedule, our adjusted net income attributable to UHS during the first six months of 2023, was $346.9 million, or $4.87 per diluted share, as compared to $327.4 million, or $4.35 per diluted share, during the six-month period ended June 30, 2022.

As reflected on the Supplemental Schedule, included in our reported results were unrealized after-tax losses of $12.5 million, or $.17 per diluted share, ($16.3 million pre-tax) during the first six months of 2023 and $9.4 million, or $.13 per diluted share, ($12.3 million pre-tax) during the first six months of 2022. These unrealized losses, which are included in "Other (income) expense, net", resulted from decreases in the market value of certain equity securities.

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI"), was $826.6 million during the first six months of 2023, as compared to $752.9 million during the first six months of 2022. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, was $846.9 million during the first six months of 2023, as compared to $762.1 million during the comparable period of 2022.

Acute Care Services – Three and six-month periods ended June 30, 2023 and 2022:

During the second quarter of 2023, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased by 7.7% while adjusted patient days increased by 6.9%, as compared to the second quarter of 2022. At these facilities, during the second quarter of 2023, net revenue per adjusted admission increased by 1.3% while net revenue per adjusted patient day increased by 2.0%, as compared to the second quarter of 2022. Net revenues generated from our acute care services, on a same facility basis, increased by 9.7% during the second quarter of 2023, as compared to the second quarter of 2022.

During the six-month period ended June 30, 2023, at our acute care hospitals on a same facility basis, adjusted admissions increased by 9.1% while adjusted patient days increased by 5.2%, as compared to the first six months of 2022. At these facilities, during the first six months of 2023, net revenue per adjusted admission decreased by 3.3% while net revenue per adjusted patient day increased by 0.3%, as compared to the first six months of 2022. Net revenues generated from our acute care services, on a same facility basis, increased by 6.6% during the first six months of 2023, as compared to the comparable period of 2022.

Behavioral Health Care Services – Three and six-month periods ended June 30, 2023 and 2022:

During the second quarter of 2023, at our behavioral health care facilities on a same facility basis, adjusted admissions increased by 3.3% while adjusted patient days increased by 1.5%, as compared to the second quarter of 2022. At these facilities, during the second quarter of 2023, net revenue per adjusted admission increased by 4.4% and net revenue per adjusted patient day increased by 6.2%, as compared to the second quarter of 2022. Net revenues generated from our behavioral health care services, on a same facility basis, increased by 7.8% during the second quarter of 2023, as compared to the second quarter of 2022.

During the six-month period ended June 30, 2023, at our behavioral health care facilities on a same facility basis, adjusted admissions increased by 5.4% while adjusted patient days increased by 3.1%, as compared to the first six months of 2022. At these facilities, during the first six months of 2023, net revenue per adjusted admission increased by 3.3% and net revenue per adjusted patient day increased by 5.6%, as compared to the first six months of 2022. Net revenues generated from our behavioral health care services, on a same facility basis, increased by 8.7% during the first six months of 2023, as compared to the comparable period of 2022.

Net Cash Provided by Operating Activities and Liquidity:

Net Cash Provided by Operating Activities:

During the six-month period ended June 30, 2023, our net cash provided by operating activities was $654 million as compared to $478 million during the first six months of 2022. Included in the $176 million net increase in our net cash provided by operating activities was a favorable change of $119 million in other working capital accounts due primarily to the timing of disbursements for accrued compensation and accounts payable.

Liquidity:

As of June 30, 2023, we had $946 million of aggregate available borrowing capacity pursuant to our $1.2 billion revolving credit facility, net of outstanding borrowings and letters of credit. 

Stock Repurchase Program:

As of December 31, 2022, we had an aggregate remaining repurchase authorization of approximately $947 million pursuant to our stock repurchase program. Pursuant to the terms of our stock repurchase program, 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.

During the second quarter of 2023, we have repurchased 758,578 shares at an aggregate cost of approximately $113.4 million (approximately $150 per share) pursuant to the program. During the first six months of 2023, we have repurchased approximately 1.4 million shares at an aggregate cost of approximately $192.1 million (approximately $136 per share) pursuant to the program.

As of June 30, 2023, we had an aggregate available repurchase authorization of approximately $755 million.

Revised 2023 Operating Results Forecasts:

Based upon the operating trends and financial results experienced during the first six months of 2023, as indicated on the Revised Forecast table below, we are increasing the lower end of our guidance range for consolidated net revenues, earnings before interest, taxes, depreciation & amortization, and the impacts of other income/expense and net income attributable to noncontrolling interests ("Adjusted EBITDA, net of NCI"), and adjusted net income attributable to UHS per diluted share ("Adjusted EPS-diluted") for the year ended December 31, 2023. The higher end of the 2023 guidance range for these metrics is remaining substantially unchanged.

The tables below include our revised 2023 operating results forecasts for the year ended December 31, 2023, as well as our original 2023 operating results forecast which was previously disclosed on February 27, 2023.

	Revised Forecast			Original Forecast
	For the Year Ended			For the Year Ended
	December 31, 2023			December 31, 2023
	Low	High		Low	High
Net revenues	$14.130 billion	$14.330 billion		$14.044 billion	$14.314 billion
Adjusted EBITDA, net of NCI	$1.696 billion	$1.756 billion		$1.662 billion	$1.753 billion
Adjusted EPS – diluted	$9.85 per share	$10.50 per share		$9.50 per share	$10.50 per share

Adjusted EPS-diluted and Adjusted EBITDA net of NCI, are non-GAAP financial measures and should be examined in connection with net income determined in accordance with GAAP as presented in the consolidated financial statements and notes thereto in this report or in our filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2022 and our Form 10-Q for the quarter ended March 31, 2023. Please see the schedule of Supplemental Non-GAAP Disclosures - 2023 Revised Operating Results Forecast, as included herein for additional information and a reconciliation to the financial forecasts as computed in accordance with GAAP.  In addition, the 2023 revised forecasted amounts exclude the impact of certain future items, if applicable, including those as outlined below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on July 26, 2023.  A live webcast of the call will be available on our website at www.uhs.com. To participate via telephone, please register in advance at this link.

Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the call will be available for one full year following the live call.

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 during 2022 were approximately $13.4 billion. UHS ranked #311 on the Fortune 500; and #434 on Forbes' list of America's Largest Public Companies. UHS was again recognized as one of the World's Most Admired Companies by Fortune.

Our operating philosophy is as effective today as it was upon the Company's founding in 1979, 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 approximately 93,800 employees and, through its subsidiaries, operates 27 inpatient acute care hospitals, 331 inpatient behavioral health facilities, 42 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT).  For additional information visit www.uhs.com.

This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to the potential 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 2-Forward Looking Statements and Risk Factors in our Form 10-Q for the quarter ended March 31, 2023 and in Item 1A-Risk Factors, and Item 7-Forward-Looking Statements and Risk Factors, in our Form 10-K for the year ended December 31, 2022), 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, but not limited to:

• The nationwide shortage of nurses and other clinical staff and support personnel has been a significant operating issue facing us and other healthcare providers. In some areas, the labor scarcity is putting a strain on our resources and staff, which has required us to utilize higher‑cost temporary labor and pay premiums above standard compensation for essential workers. These factors, which had a material unfavorable impact on our results of operations during 2022, could continue to have an unfavorable material impact on our results of operations for the foreseeable future.

• The impact of the COVID-19 pandemic, which began in March, 2020, has had a material effect on our operations and financial results, at various times, since that time. We cannot predict if there will be future disruptions caused by the COVID‑19 pandemic.

• A significant portion of our revenues are derived from federal and state government programs including the Medicare and Medicaid programs. Payments from these programs are subject to statutory and regulatory changes, administrative rulings, interpretations and determinations, requirements for utilization review, and federal and state funding restrictions.  Changes to these programs, if adopted, could materially affect program payments which could materially impact our results of operations.

• The increase in interest rates has substantially increased our borrowings costs and reduced our ability to access the capital markets on favorable terms.  Additional increases in interest rates could have a significant unfavorable impact on our future results of operations and the resulting effect on the capital markets could adversely affect our ability to carry out our strategy.

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, changes in the market value of shares of certain equity securities and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of goodwill, long-lived and intangible assets, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, potential impacts of non-ordinary acquisitions, divestitures, joint ventures or other strategic transactions, 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 Report on Form 10-Q for the quarter ended March 31, 2023 and our Report on Form 10-K for the year ended December 31, 2022. 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,
	2023		2022		2023		2022
Net revenues	$3,548,138		$3,323,407		$7,015,656		$6,616,363
Operating charges:
Salaries, wages and benefits	1,770,271		1,691,472		3,523,606		3,383,742
Other operating expenses	938,314		867,885		1,817,265		1,688,819
Supplies expense	380,294		354,993		760,283		726,066
Depreciation and amortization	143,744		143,850		285,365		287,634
Lease and rental expense	35,387		31,773		70,309		63,811
	3,268,010		3,089,973		6,456,828		6,150,072
Income from operations	280,128		233,434		558,828		466,291
Interest expense, net	48,831		25,676		99,707		47,349
Other (income) expense, net	6,602		(1,972)		20,325		9,229
Income before income taxes	224,695		209,730		438,796		409,713
Provision for income taxes	55,393		50,949		107,119		99,911
Net income	169,302		158,781		331,677		309,802
Less:  Net income (loss) attributable to
noncontrolling interests ("NCI")	(2,011)		(5,281)		(2,751)		(8,173)
Net income attributable to UHS	$171,313		$164,062		$334,428		$317,975
Basic earnings per share attributable to UHS (a)	$2.44		$2.22		$4.75		$4.27
Diluted earnings per share attributable to UHS (a)	$2.42		$2.20		$4.70		$4.22

 

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,
	2023		2022		2023		2022
Basic and diluted:
Net income attributable to UHS	$171,313		$164,062		$334,428		$317,975
Less: Net income attributable to unvested restricted share grants	(61)		(164)		(190)		(413)
Net income attributable to UHS - basic and diluted	$171,252		$163,898		$334,238		$317,562
Weighted average number of common shares - basic	70,073		73,682		70,304		74,356
Basic earnings per share attributable to UHS:	$2.44		$2.22		$4.75		$4.27
Weighted average number of common shares	70,073		73,682		70,304		74,356
Add: Other share equivalents	766		753		859		882
Weighted average number of common shares and equiv. - diluted	70,839		74,435		71,163		75,238
Diluted earnings per share attributable to UHS:	$2.42		$2.20		$4.70		$4.22

 

Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule")
For the Three Months ended June 30, 2023 and 2022
(in thousands, except per share amounts)
(unaudited)
Calculation of Earnings/Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA/Adjusted EBITDA net of NCI")
	Three months ended		% Net		Three months ended		% Net
	June 30, 2023		revenues		June 30, 2022		revenues
Net income attributable to UHS	$171,313				$164,062
Depreciation and amortization	143,744				143,850
Interest expense, net	48,831				25,676
Provision for income taxes	55,393				50,949
EBITDA net of NCI	$419,281		11.8 %		$384,537		11.6 %
Other (income) expense, net	6,602				(1,972)
Adjusted EBITDA net of NCI	$425,883		12.0 %		$382,565		11.5 %
Net revenues	$3,548,138				$3,323,407
Calculation of Adjusted Net Income Attributable to UHS
	Three months ended				Three months ended
	June 30, 2023				June 30, 2022
			Per				Per
	Amount		Diluted Share		Amount		Diluted Share
Net income attributable to UHS	$171,313		$2.42		$164,062		$2.20
Plus/minus after-tax adjustments:
Unrealized loss (gain) on equity securities	8,051		0.11		(153)		-
Subtotal adjustments	8,051		0.11		(153)		-
Adjusted net income attributable to UHS	$179,364		$2.53		$163,909		$2.20

 

Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule")
For the Six Months ended June 30, 2023 and 2022
(in thousands, except per share amounts)
(unaudited)
Calculation of Earnings/Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA/Adjusted EBITDA net of NCI")
	Six months ended		% Net		Six months ended		% Net
	June 30, 2023		revenues		June 30, 2022		revenues
Net income attributable to UHS	$334,428				$317,975
Depreciation and amortization	285,365				287,634
Interest expense, net	99,707				47,349
Provision for income taxes	107,119				99,911
EBITDA net of NCI	$826,619		11.8 %		$752,869		11.4 %
Other (income) expense, net	20,325				9,229
Adjusted EBITDA net of NCI	$846,944		12.1 %		$762,098		11.5 %
Net revenues	$7,015,656				$6,616,363
Calculation of Adjusted Net Income Attributable to UHS
	Six months ended				Six months ended
	June 30, 2023				June 30, 2022
			Per				Per
	Amount		Diluted Share		Amount		Diluted Share
Net income attributable to UHS	$334,428		$4.70		$317,975		$4.22
Plus/minus after-tax adjustments:
Unrealized loss on equity securities	12,512		0.17		9,384		0.13
Subtotal adjustments	12,512		0.17		9,384		0.13
Adjusted net income attributable to UHS	$346,940		$4.87		$327,359		$4.35

 

Universal Health Services, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
			June 30,			December 31,
			2023			2022
Assets
Current assets:
Cash and cash equivalents		$	79,451		$	102,818
Accounts receivable, net			2,103,478			2,017,722
Supplies			215,380			218,517
Other current assets			226,405			198,283
Total current assets			2,624,714			2,537,340
Property and equipment			11,441,608			11,085,852
Less: accumulated depreciation			(5,413,892)			(5,167,394)
			6,027,716			5,918,458
Other assets:
Goodwill			3,929,722			3,909,456
Deferred income taxes			109,773			68,397
Right of use assets-operating leases			446,618			454,650
Deferred charges			5,858			6,264
Other			587,908			599,623
Total Assets		$	13,732,309		$	13,494,188
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt		$	111,357		$	81,447
Accounts payable and other liabilities			1,843,379			1,760,588
Operating lease liabilities			73,649			67,776
Federal and state taxes			6,962			4,608
Total current liabilities			2,035,347			1,914,419
Other noncurrent liabilities			571,206			487,669
Operating lease liabilities noncurrent			387,709			395,522
Long-term debt			4,605,075			4,726,533
Redeemable noncontrolling interest			4,213			4,695
UHS common stockholders' equity			6,087,182			5,920,582
Noncontrolling interest			41,577			44,768
Total equity			6,128,759			5,965,350
Total Liabilities and Stockholders' Equity		$	13,732,309		$	13,494,188

 

Universal Health Services, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Six months
	ended June 30,
	2023		2022
Cash Flows from Operating Activities:
Net income	$331,677		$309,802
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation & amortization	285,365		287,634
(Gain) loss on sale of assets and businesses	(6,250)		1,084
Stock-based compensation expense	43,062		41,640
Changes in assets & liabilities, net of effects from
acquisitions and dispositions:
Accounts receivable	(82,078)		(89,729)
Accrued interest	(107)		1,329
Accrued and deferred income taxes	(32,695)		(34,260)
Other working capital accounts	20,216		(98,811)
Medicare accelerated payments and deferred CARES Act and other grants	2,741		5,339
Other assets and deferred charges	32,746		30,278
Other	15,471		(15,763)
Accrued insurance expense, net of commercial premiums paid	95,157		97,570
Payments made in settlement of self-insurance claims	(51,604)		(58,066)
Net cash provided by operating activities	653,701		478,047
Cash Flows from Investing Activities:
Property and equipment additions	(336,664)		(407,962)
Proceeds received from sales of assets and businesses	23,688		10,232
Acquisition of businesses and property	(3,728)		(12,485)
(Outflows) inflows from foreign exchange contracts that hedge our net U.K. investment	(31,305)		84,535
Decrease in capital reserves of commercial insurance subsidiary	0		100
Net cash used in investing activities	(348,009)		(325,580)
Cash Flows from Financing Activities:
Repayments of long-term debt	(93,557)		(226,854)
Additional borrowings	0		700,000
Financing costs	(293)		(2,387)
Repurchase of common shares	(209,756)		(565,182)
Dividends paid	(28,263)		(29,641)
Issuance of common stock	6,598		6,661
Profit distributions to noncontrolling interests	(4,735)		(5,323)
Purchase (sale) of ownership interests by (from) minority members	407		(1,307)
Net cash used in financing activities	(329,599)		(124,033)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	2,377		(5,457)
Decrease (increase) in cash, cash equivalents and restricted cash	(21,530)		22,977
Cash, cash equivalents and restricted cash, beginning of period	200,837		178,934
Cash, cash equivalents and restricted cash, end of period	$179,307		$201,911
Supplemental Disclosures of Cash Flow Information:
Interest paid	$97,297		$43,796
Income taxes paid, net of refunds	$133,840		$145,448
Noncash purchases of property and equipment	$100,461		$112,420

 

Universal Health Services, Inc.
Supplemental Statistical Information
(unaudited)
							% Change		% Change
							3 Months ended		6 Months ended
Same Facility:							6/30/2023		6/30/2023
Acute Care Hospitals
Revenues							9.7 %		6.6 %
Adjusted Admissions							7.7 %		9.1 %
Adjusted Patient Days							6.9 %		5.2 %
Revenue Per Adjusted Admission							1.3 %		-3.3 %
Revenue Per Adjusted Patient Day							2.0 %		0.3 %
Behavioral Health Hospitals
Revenues							7.8 %		8.7 %
Adjusted Admissions							3.3 %		5.4 %
Adjusted Patient Days							1.5 %		3.1 %
Revenue Per Adjusted Admission							4.4 %		3.3 %
Revenue Per Adjusted Patient Day							6.2 %		5.6 %
UHS Consolidated			Second Quarter Ended				Six Months Ended
			6/30/2023		6/30/2022		6/30/2023		6/30/2022
Revenues			$3,548,138		$3,323,407		$7,015,656		$6,616,363
EBITDA net of NCI			$419,281		$384,537		$826,619		$752,869
EBITDA Margin net of NCI			11.8 %		11.6 %		11.8 %		11.4 %
Adjusted EBITDA net of NCI			$425,883		$382,565		$846,944		$762,098
Adjusted EBITDA Margin net of NCI			12.0 %		11.5 %		12.1 %		11.5 %
Cash Flow From Operations			$362,948		$32,614		$653,701		$478,047
Days Sales Outstanding			54		50		54		50
Capital Expenditures			$167,912		$207,960		$336,664		$407,962
Debt							$4,716,432		$4,665,409
UHS' Shareholders Equity							$6,087,182		$5,814,660
Debt / Total Capitalization							43.7 %		44.5 %
Debt / EBITDA net of NCI (1)							2.83		2.81
Debt / Adjusted EBITDA net of NCI (1)							2.70		2.81
Debt / Cash From Operations (1)							4.03		3.76
(1) Latest 4 quarters.

 

Universal Health Services, Inc.
Acute Care Hospital Services
For the Three and Six Months ended
June 30, 2023 and 2022
(in thousands)
Same Facility Basis - Acute Care Hospital Services
		Three months ended				Three months ended				Six months ended				Six months ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues		$1,953,269		100.0 %		$1,779,801		100.0 %		$3,842,349		100.0 %		$3,604,498		100.0 %
Operating charges:
Salaries, wages and benefits		828,503		42.4 %		799,804		44.9 %		1,639,056		42.7 %		1,611,447		44.7 %
Other operating expenses		548,713		28.1 %		469,560		26.4 %		1,041,113		27.1 %		904,030		25.1 %
Supplies expense		323,746		16.6 %		292,303		16.4 %		640,002		16.7 %		602,385		16.7 %
Depreciation and amortization		91,511		4.7 %		89,980		5.1 %		178,438		4.6 %		181,744		5.0 %
Lease and rental expense		23,639		1.2 %		20,204		1.1 %		47,231		1.2 %		40,909		1.1 %
Subtotal-operating expenses		1,816,112		93.0 %		1,671,851		93.9 %		3,545,840		92.3 %		3,340,515		92.7 %
Income from operations		137,157		7.0 %		107,950		6.1 %		296,509		7.7 %		263,983		7.3 %
Interest expense, net		(503)		(0.0) %		478		0.0 %		(1,080)		(0.0) %		1,116		0.0 %
Other (income) expense, net		0		-		221		0.0 %		6,213		0.2 %		422		0.0 %
Income before income taxes		$137,660		7.0 %		$107,251		6.0 %		$291,376		7.6 %		$262,445		7.3 %
All Acute Care Hospital Services
		Three months ended				Three months ended				Six months ended				Six months ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues		$2,003,079		100.0 %		$1,875,516		100.0 %		$3,976,611		100.0 %		$3,787,832		100.0 %
Operating charges:
Salaries, wages and benefits		836,331		41.8 %		829,040		44.2 %		1,680,291		42.3 %		1,672,946		44.2 %
Other operating expenses		590,616		29.5 %		532,504		28.4 %		1,134,916		28.5 %		1,014,582		26.8 %
Supplies expense		327,650		16.4 %		302,728		16.1 %		655,710		16.5 %		624,155		16.5 %
Depreciation and amortization		94,304		4.7 %		95,004		5.1 %		187,630		4.7 %		189,538		5.0 %
Lease and rental expense		24,035		1.2 %		20,482		1.1 %		48,189		1.2 %		41,334		1.1 %
Subtotal-operating expenses		1,872,936		93.5 %		1,779,758		94.9 %		3,706,736		93.2 %		3,542,555		93.5 %
Income from operations		130,143		6.5 %		95,758		5.1 %		269,875		6.8 %		245,277		6.5 %
Interest expense, net		(503)		(0.0) %		478		0.0 %		(1,080)		(0.0) %		1,116		0.0 %
Other (income) expense, net		119		0.0 %		221		0.0 %		7,132		0.2 %		422		0.0 %
Income before income taxes		$130,527		6.5 %		$95,059		5.1 %		$263,823		6.6 %		$243,739		6.4 %

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 goodwill, 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, 2022 and Form 10-Q for the quarter ended March 31, 2023.

The All Acute Care Hospital Services table 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 and Six Months ended
June 30, 2023 and 2022
(in thousands)
Same Facility - Behavioral Health Care Services
		Three months ended				Three months ended				Six months ended				Six months ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues		$1,517,005		100.0 %		$1,407,147		100.0 %		$2,976,724		100.0 %		$2,737,959		100.0 %
Operating charges:
Salaries, wages and benefits		843,222		55.6 %		767,333		54.5 %		1,649,168		55.4 %		1,513,493		55.3 %
Other operating expenses		296,203		19.5 %		274,146		19.5 %		573,572		19.3 %		542,694		19.8 %
Supplies expense		53,773		3.5 %		52,373		3.7 %		106,103		3.6 %		101,991		3.7 %
Depreciation and amortization		46,554		3.1 %		45,280		3.2 %		91,555		3.1 %		90,762		3.3 %
Lease and rental expense		11,203		0.7 %		10,415		0.7 %		21,785		0.7 %		20,676		0.8 %
Subtotal-operating expenses		1,250,955		82.5 %		1,149,547		81.7 %		2,442,183		82.0 %		2,269,616		82.9 %
Income from operations		266,050		17.5 %		257,600		18.3 %		534,541		18.0 %		468,343		17.1 %
Interest expense, net		993		0.1 %		1,360		0.1 %		2,071		0.1 %		2,587		0.1 %
Other (income) expense, net		(733)		(0.0) %		(643)		(0.0) %		(1,309)		(0.0) %		(758)		(0.0) %
Income before income taxes		265,790		17.5 %		$256,883		18.3 %		$533,779		17.9 %		$466,514		17.0 %
All Behavioral Health Care Services
		Three months ended				Three months ended				Six months ended				Six months ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues		$1,542,194		100.0 %		$1,433,920		100.0 %		$3,032,683		100.0 %		$2,800,387		100.0 %
Operating charges:
Salaries, wages and benefits		844,308		54.7 %		773,966		54.0 %		1,654,094		54.5 %		1,527,852		54.6 %
Other operating expenses		322,518		20.9 %		299,782		20.9 %		627,750		20.7 %		598,249		21.4 %
Supplies expense		53,837		3.5 %		52,655		3.7 %		106,325		3.5 %		102,832		3.7 %
Depreciation and amortization		46,778		3.0 %		45,863		3.2 %		92,397		3.0 %		91,942		3.3 %
Lease and rental expense		11,255		0.7 %		10,973		0.8 %		21,923		0.7 %		21,793		0.8 %
Subtotal-operating expenses		1,278,696		82.9 %		1,183,239		82.5 %		2,502,489		82.5 %		2,342,668		83.7 %
Income from operations		263,498		17.1 %		250,681		17.5 %		530,194		17.5 %		457,719		16.3 %
Interest expense, net		993		0.1 %		1,366		0.1 %		2,204		0.1 %		2,731		0.1 %
Other (income) expense, net		(1,188)		(0.1) %		(643)		(0.0) %		(2,059)		(0.1) %		(758)		(0.0) %
Income before income taxes		263,693		17.1 %		$249,958		17.4 %		$530,049		17.5 %		$455,746		16.3 %

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 government's investigation of our behavioral health care facilities, cost related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of goodwill, 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, 2022 and Form 10-Q for the quarter ended March 31, 2023.

The All Behavioral Health Care Services table 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
June 30, 2023 and 2022
AS REPORTED:
		ACUTE						BEHAVIORAL HEALTH
		6/30/23		6/30/22		%  change		6/30/23		6/30/22		%  change
Hospitals owned and leased		27		28		-3.6 %		331		333		-0.6 %
Average licensed beds		6,624		6,971		-5.0 %		24,189		24,340		-0.6 %
Average available beds		6,452		6,799		-5.1 %		24,089		24,240		-0.6 %
Patient days		384,373		375,955		2.2 %		1,588,575		1,574,715		0.9 %
Average daily census		4,223.8		4,131.4		2.2 %		17,456.9		17,304.6		0.9 %
Occupancy-licensed beds		63.8 %		59.3 %		7.6 %		72.2 %		71.1 %		1.5 %
Occupancy-available beds		65.5 %		60.8 %		7.7 %		72.5 %		71.4 %		1.5 %
Admissions		79,100		76,713		3.1 %		119,656		116,627		2.6 %
Length of stay		4.9		4.9		-0.8 %		13.3		13.4		-0.9 %
Inpatient revenue		$10,960,845		$9,706,731		12.9 %		$2,670,370		$2,561,553		4.2 %
Outpatient revenue		7,515,780		6,206,039		21.1 %		281,036		268,489		4.7 %
Total patient revenue		18,476,625		15,912,770		16.1 %		2,951,406		2,830,042		4.3 %
Other revenue		240,899		202,975		18.7 %		73,926		75,359		-1.9 %
Gross hospital revenue		18,717,524		16,115,745		16.1 %		3,025,332		2,905,401		4.1 %
Total deductions		16,714,445		14,240,229		17.4 %		1,483,138		1,471,481		0.8 %
Net hospital revenue		$2,003,079		$1,875,516		6.8 %		$1,542,194		$1,433,920		7.6 %
SAME FACILITY:
		ACUTE						BEHAVIORAL HEALTH
		6/30/23		6/30/22		%  change		6/30/23		6/30/22		%  change
Hospitals owned and leased		27		27		0.0 %		330		330		0.0 %
Average licensed beds		6,624		6,689		-1.0 %		24,063		23,991		0.3 %
Average available beds		6,452		6,517		-1.0 %		23,963		23,891		0.3 %
Patient days		384,373		362,044		6.2 %		1,578,277		1,559,048		1.2 %
Average daily census		4,223.8		3,978.5		6.2 %		17,343.7		17,132.4		1.2 %
Occupancy-licensed beds		63.8 %		59.5 %		7.2 %		72.1 %		71.4 %		0.9 %
Occupancy-available beds		65.5 %		61.0 %		7.2 %		72.4 %		71.7 %		0.9 %
Admissions		79,100		73,927		7.0 %		118,778		115,271		3.0 %
Length of stay		4.9		4.9		-0.8 %		13.3		13.5		-1.8 %

 

Universal Health Services, Inc.
Selected Hospital Statistics
For the Six Months ended
June 30, 2023 and 2022
AS REPORTED:
		ACUTE						BEHAVIORAL HEALTH
		6/30/23		6/30/22		%  change		6/30/23		6/30/22		%  change
Hospitals owned and leased		27		28		-3.6 %		331		333		-0.6 %
Average licensed beds		6,711		6,860		-2.2 %		24,210		24,291		-0.3 %
Average available beds		6,539		6,688		-2.2 %		24,110		24,191		-0.3 %
Patient days		788,626		781,907		0.9 %		3,161,147		3,081,066		2.6 %
Average daily census		4,357.0		4,319.9		0.9 %		17,464.9		17,022.5		2.6 %
Occupancy-licensed beds		64.9 %		63.0 %		3.1 %		72.1 %		70.1 %		2.9 %
Occupancy-available beds		66.6 %		64.6 %		3.2 %		72.4 %		70.4 %		2.9 %
Admissions		159,226		152,002		4.8 %		240,216		229,060		4.9 %
Length of stay		5.0		5.1		-3.7 %		13.2		13.5		-2.2 %
Inpatient revenue		$22,362,336		$19,945,962		12.1 %		$5,298,360		$4,998,027		6.0 %
Outpatient revenue		14,811,896		11,981,578		23.6 %		553,407		525,602		5.3 %
Total patient revenue		37,174,232		31,927,540		16.4 %		5,851,767		5,523,629		5.9 %
Other revenue		462,892		387,456		19.5 %		139,244		142,056		-2.0 %
Gross hospital revenue		37,637,124		32,314,996		16.5 %		5,991,011		5,665,685		5.7 %
Total deductions		33,660,513		28,527,164		18.0 %		2,958,328		2,865,298		3.2 %
Net hospital revenue		$3,976,611		$3,787,832		5.0 %		$3,032,683		$2,800,387		8.3 %
SAME FACILITY:
		ACUTE						BEHAVIORAL HEALTH
		6/30/23		6/30/22		%  change		6/30/23		6/30/22		%  change
Hospitals owned and leased		27		27		0.0 %		330		330		0.0 %
Average licensed beds		6,538		6,578		-0.6 %		24,024		23,939		0.4 %
Average available beds		6,366		6,406		-0.6 %		23,924		23,839		0.4 %
Patient days		776,943		752,308		3.3 %		3,136,187		3,047,895		2.9 %
Average daily census		4,292.5		4,156.4		3.3 %		17,327.0		16,839.2		2.9 %
Occupancy-licensed beds		65.7 %		63.2 %		3.9 %		72.1 %		70.3 %		2.5 %
Occupancy-available beds		67.4 %		64.9 %		3.9 %		72.4 %		70.6 %		2.5 %
Admissions		156,837		146,434		7.1 %		237,799		226,006		5.2 %
Length of stay		5.0		5.1		-3.6 %		13.2		13.5		-2.2 %

 

Universal Health Services, Inc.
Supplemental Non-GAAP Disclosures
2023 Revised Operating Results Forecast
(in thousands, except per share amounts)
			Forecast For The Year Ending December 31, 2023
					% Net				% Net
			Low		revenues		High		revenues
Net revenues			$14,130,000				$14,330,000
Adjusted net income attributable to UHS (a)			$693,483				$739,143
Depreciation and amortization			584,725				584,725
Interest expense			198,996				198,996
Other (income) expense, net			1,353				1,353
Provision for income taxes			217,796				232,136
Adjusted EBITDA net of NCI (b)			$1,696,353		12.0 %		$1,756,353		12.3 %
Adjusted net income attributable to UHS, per diluted share (a)			$9.85				$10.50
Shares used in computing diluted earnings per share			70,332				70,322

(a) Adjusted net income attributable to UHS/per diluted share are non-GAAP financial measures.  The 2023 forecasted amounts exclude the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as pre-tax unrealized gains/losses resulting from changes in the market value of shares of certain equity securities, and other potential material items including, but not limited to, reserves for various matters including settlements, legal judgments and lawsuits, potential impacts of non-ordinary course acquisitions, divestitures, joint ventures or other strategic transactions, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of goodwill, long-lived and intangible assets, other amounts that may be reflected in the current financial statements that relate to prior periods, and the impact of share repurchases that differ from our forecasted assumptions. It is also subject to certain conditions including those as set forth in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.
(b) Adjusted EBITDA net of NCI is a non-GAAP financial measure.  To obtain a complete understanding of our financial performance, Adjusted EBITDA net of NCI should be examined in connection with net income determined in accordance with GAAP as presented in the consolidated financial statements and notes thereto in this report or in our filings with the Securities and Exchange Commission including in our Form 10-K for the year ended December 31, 2022 and Form 10-Q for the quarter ended March 31, 2023.

 

Cision

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SOURCE Universal Health Services, Inc.