Universal Health Services, Inc. : Reports 2018 First Quarter Financial Results

KING OF PRUSSIA, Pa., April 25, 2018 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $223.8 million, or $2.36 per diluted share, during the first quarter of 2018 as compared to $206.1 million, or $2.12 per diluted share, during the comparable quarter of 2017.  Net revenues increased 2.9% to $2.69 billion during the first quarter of 2018 as compared to $2.61 billion during the first quarter of 2017.

For the three-month period ended March 31, 2018, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), was $232.1 million, or $2.45 per diluted share, as compared to $204.4 million, or $2.10 per diluted share, during the first quarter of 2017. 

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2018, is a net aggregate unfavorable after-tax impact of $8.3 million, or $.09 per diluted share, consisting of: (i) an unfavorable after-tax impact of $9.9 million, or $.11 per diluted share, resulting from a $13 million pre-tax increase in the reserve established in connection with the discussions with the Department of Justice ("DOJ"), as discussed below, and; (ii) a favorable after-tax impact of $1.6 million, or $.02 per diluted share, resulting from our 2017 adoption of ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09").  Beginning in 2018, the amount of depreciation and amortization expense recorded in connection with the implementation of electronic health records ("EHR") applications at our acute care hospitals no longer warrants inclusion in our presentation of adjusted net income attributable to UHS. 

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2017, is a net aggregate favorable after-tax impact of $1.7 million, or $.02 per diluted share, consisting of: (i) a favorable after-tax impact of $6.8 million, or $.07 per diluted share, related to our adoption of ASU 2016-09, and; (ii) an unfavorable after-tax impact of $5.1 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.  

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI"), was $442.1 million during the first quarter of 2018 as compared to $460.3 million during the first quarter of 2017.  Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of the above-mentioned $13.0 million pre-tax increase in the DOJ reserve recorded during the first quarter of 2018, was $455.1 million during the first quarter of 2018 as compared to $460.3 million during the first quarter of 2017.

Acute Care Services – Three-month periods ended March 31, 2018 and 2017:
During the first quarter of 2018, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 2.3% and adjusted patient days increased 5.4%, as compared to the first quarter of 2017. At these facilities, net revenue per adjusted admission increased 3.4% while net revenue per adjusted patient day increased 0.4% during the first quarter of 2018 as compared to the comparable quarter of 2017. Net revenues from our acute care services on a same facility basis increased 3.7% during the first quarter of 2018 as compared to the comparable quarter of the prior year.

Behavioral Health Care Services – Three-month periods ended March 31, 2018 and 2017:
During the first quarter of 2018, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 1.6% while adjusted patient days increased 0.4% as compared to the first quarter of 2017. At these facilities, net revenue per adjusted admission increased 2.0% while net revenue per adjusted patient day increased 3.2% during the first quarter of 2018 as compared to the comparable quarter in 2017. On a same facility basis, our behavioral health care services' net revenues increased 3.0% during the first quarter of 2018 as compared to the first quarter of 2017.   

Net Cash Provided by Operating Activities and Share Repurchase Program:
For the three months ended March 31, 2018, our net cash provided by operating activities was $364 million as compared to $483 million generated during the first quarter of 2017. The $119 million decrease was due to: (i) a $38 million unfavorable change in cash flows from foreign currency forward exchange contracts related to our investments in the U.K; (ii) a $67 million unfavorable change in accounts receivable; (iii) a $41 million unfavorable change in accrued and deferred income taxes, partially offset by; (iv) $27 million of other combined net favorable changes.

In November of 2017, our Board of Directors authorized a $400 million increase to our stock repurchase program, which increased the aggregate authorization to $1.2 billion from the previous $800 million authorization approved during 2016 and 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 our stock repurchase program, during the first quarter of 2018, we have repurchased approximately 42,000 shares at an aggregate cost of $4.6 million (approximately $110 per share).  Since inception of the program through March 31, 2018, we have repurchased approximately 7.39 million shares at an aggregate cost of $840.9 million (approximately $114 per share). 

Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 26, 2018. 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.

Reserve-DOJ:
During the first quarter of 2018, we recorded a $13 million pre-tax increase to the reserve established in connection with the civil aspects of the government's investigation of certain of our behavioral health care facilities, increasing the aggregate pre-tax reserve to $35 million.  Changes in the reserve may be required in future periods as discussions with the DOJ continue and additional information becomes available.  We cannot predict the ultimate resolution of this matter and therefore can provide no assurance that final amounts paid in settlement or otherwise, if any, or associated costs, will not differ materially from our established reserve.  Please see Item 3-Legal Proceedings in our Form 10-K for the year ended December 31, 2017 for additional disclosure in connection with this matter.

Adoption of new revenue recognition standard:
On January 1, 2018, we adopted, using the modified retrospective approach, ASU 2014-09 and ASU 2016-08, "Revenue from Contracts with Customers (Topic 606)" and "Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)", respectively, which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The most significant change from the adoption of the new standard relates to our estimation for the allowance for doubtful accounts. Under the previous standards, our estimate for amounts not expected to be collected based upon our historical experience, were reflected as provision for doubtful accounts, included within net revenue. Under the new standard, our estimate for amounts not expected to be collected based on historical experience will continue to be recognized as a reduction to net revenue, however, not reflected separately as provision for doubtful accounts. Under the new standard, subsequent changes in estimate of collectability due to a change in the financial status of a payor, for example a bankruptcy, will be recognized as bad debt expense in operating charges. The adoption of this ASU in 2018, and amounts recognized as bad debt expense and included in other operating expenses, did not have a material impact on our consolidated financial statements.      

Tax Cuts and Jobs Act of 2017:
Effective January 1, 2018, our provision for income taxes, net income attributable to UHS, and net income attributable to UHS per diluted share, were favorably impacted by the Tax Cuts and Jobs Act of 2017 which made broad and complex changes to the U.S. tax code including, among other things, reducing the U.S. federal corporate tax rate from 35% to 21%.  

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
One of the nation's largest and most respected hospital companies, Universal Health Services, Inc. ("UHS") has built an impressive record of achievement and performance. Growing steadily since its inception into an esteemed Fortune 500 corporation, UHS today has annual revenue exceeding $10 billion. In 2017, UHS was recognized as one of the World's Most Admired Companies by Fortune; ranked #276 on the Fortune 500, and 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: Build or acquire high quality hospitals in rapidly growing markets, invest in the people and equipment needed to allow each facility to thrive, and become the leading healthcare provider in each community we serve.

Headquartered in King of Prussia, PA, UHS has more than 83,000 employees and through its subsidiaries operates 326 inpatient acute care hospitals and behavioral health facilities and 32 outpatient and other facilities located in 37 states, Washington, D.C., 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, 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 operating income, operating margin, 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 in each year of material items impacting our net income attributable to UHS, such as, changes in the reserve established in connection with our discussions with the DOJ, our adoption of ASU 2016-09, and other potential items that are nonrecurring or non-operational in nature including, but not limited to, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of long-lived assets, 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 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-K for the year ended December 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
	ended March 31,
	2018		2017
Net revenues before provision for doubtful accounts	$2,687,516		$2,825,472
Less: Provision for doubtful accounts	0		212,614
Net revenues	2,687,516		2,612,858
Operating charges:
Salaries, wages and benefits	1,300,148		1,237,964
Other operating expenses	620,819		607,360
Supplies expense	292,929		277,614
Depreciation and amortization	113,103		110,798
Lease and rental expense	26,703		25,189
	2,353,702		2,258,925
Income from operations	333,814		353,933
Interest expense, net	37,576		35,507
Income before income taxes	296,238		318,426
Provision for income taxes	67,569		107,899
Net income	228,669		210,527
Less:  Net income attributable to
noncontrolling interests ("NCI")	4,837		4,472
Net income attributable to UHS	$223,832		$206,055
Basic earnings per share attributable to UHS (a)	$2.37		$2.13
Diluted earnings per share attributable to UHS (a)	$2.36		$2.12

 

 

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,
	2018		2017
Basic and diluted:
Net income attributable to UHS	$223,832		$206,055
Less: Net income attributable to unvested restricted share grants	(104)		(94)
Net income attributable to UHS - basic and diluted	$223,728		$205,961
Weighted average number of common shares - basic	94,226		96,585
Basic earnings per share attributable to UHS:	$2.37		$2.13
Weighted average number of common shares	94,226		96,585
Add: Other share equivalents	457		787
Weighted average number of common shares and equiv. - diluted	94,683		97,372
Diluted earnings per share attributable to UHS:	$2.36		$2.12

 

 

Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule")
For the Three Months ended March 31, 2018 and 2017
(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, 2018		revenues		March 31, 2017		revenues
Net income attributable to UHS	$223,832				$206,055
Depreciation and amortization	113,103				110,798
Interest expense, net	37,576				35,507
Provision for income taxes	67,569				107,899
EBITDA net of NCI	$442,080		16.4%		$460,259		17.6%
Increase in DOJ reserve	13,000				-
Adjusted EBITDA net of NCI	$455,080		16.9%		$460,259		17.6%
Net revenues	$2,687,516				$2,612,858
Calculation of Adjusted Net Income Attributable to UHS
	Three months ended				Three months ended
	March 31, 2018				March 31, 2017
			Per				Per
	Amount		Diluted Share		Amount		Diluted Share
Net income attributable to UHS	$223,832		$2.36		$206,055		$2.12
Plus/minus after-tax adjustments:
Increase in DOJ reserve, after-tax	9,911		0.11		-		-
Impact of ASU 2016-09	(1,598)		(0.02)		(6,750)		(0.07)
EHR depreciation & amortization, after-tax	-		-		5,073		0.05
Subtotal	8,313		0.09		(1,677)		(0.02)
Adjusted net income attributable to UHS	$232,145		$2.45		$204,378		$2.10

 

Universal Health Services, Inc.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
	Three months
	ended March 31,
	2018		2017
Net income	$228,669		$210,527
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges	2,124		3,066
Unrealized gain on marketable security	2,367		1,094
Foreign currency translation adjustment	(4,341)		7,236
Other comprehensive income before tax	150		11,396
Income tax expense related to items of other comprehensive income	1,077		1,551
Total other comprehensive income (loss), net of tax	(927)		9,845
Comprehensive income	227,742		220,372
Less: Comprehensive income attributable to noncontrolling interests	4,837		4,472
Comprehensive income attributable to UHS	$222,905		$215,900

 

 

Universal Health Services, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
			March 31,			December 31,
			2018			2017
Assets
Current assets:
Cash and cash equivalents		$	73,053		$	74,423
Accounts receivable, net			1,569,803			1,500,898
Supplies			137,246			136,177
Other current assets			104,624			86,504
Total current assets			1,884,726			1,798,002
Property and equipment			8,144,555			7,921,126
Less: accumulated depreciation			(3,444,003)			(3,349,289)
			4,700,552			4,571,837
Other assets:
Goodwill			3,843,126			3,825,157
Deferred charges			8,882			9,787
Deferred income taxes			3,072			3,007
Other			583,159			554,038
Total Assets		$	11,023,517		$	10,761,828
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt		$	566,248		$	545,619
Accounts payable and accrued liabilities			1,366,333			1,284,081
Federal and state taxes			86,996			18,334
Total current liabilities			2,019,577			1,848,034
Other noncurrent liabilities			311,900			306,304
Long-term debt			3,355,087			3,494,390
Deferred income taxes			44,850			54,962
Redeemable noncontrolling interest			6,081			6,702
UHS common stockholders' equity			5,215,646			4,989,514
Noncontrolling interest			70,376			61,922
Total equity			5,286,022			5,051,436
Total Liabilities and Stockholders' Equity		$	11,023,517		$	10,761,828

 

 

Universal Health Services, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Three months
	ended March 31,
	2018		2017
Cash Flows from Operating Activities:
Net income	$228,669		$210,527
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation & amortization	113,134		110,798
Stock-based compensation expense	19,700		15,348
Gain on sale of assets and businesses	(703)		0
Changes in assets & liabilities, net of effects from
acquisitions and dispositions:
Accounts receivable	(72,526)		(5,362)
Accrued interest	(6,209)		(6,123)
Accrued and deferred income taxes	61,674		102,269
Other working capital accounts	59,032		66,877
Other assets and deferred charges	(5,438)		(7,654)
Other	(37,642)		(229)
Accrued insurance expense, net of commercial premiums paid	23,125		22,007
Payments made in settlement of self-insurance claims	(18,765)		(25,349)
Net cash provided by operating activities	364,051		483,109
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals	(189,041)		(144,338)
Acquisition of property and businesses	(20,931)		(17,832)
Proceeds received from sales of assets and businesses	839		0
Costs incurred for purchase and implementation of information technology application	(8,570)		(9,456)
Decrease (increase) in capital reserves of commercial insurance subsidiary	100		(3,000)
Investment in, and advances to,  joint venture	(8,675)		0
Net cash used in investing activities	(226,278)		(174,626)
Cash Flows from Financing Activities:
Reduction of long-term debt	(140,676)		(260,633)
Additional borrowings	20,500		21,600
Repurchase of common shares	(9,441)		(29,167)
Dividends paid	(9,422)		(9,662)
Issuance of common stock	2,545		2,540
Profit distributions to noncontrolling interests	(4,217)		(4,118)
Net cash used in financing activities	(140,711)		(279,440)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,857		285
(Decrease) increase in cash, cash equivalents and restricted cash	(1,081)		29,328
Cash, cash equivalents and restricted cash, beginning of period	167,297		121,950
Cash, cash equivalents and restricted cash, end of period	$166,216		$151,278
Supplemental Disclosures of Cash Flow Information:
Interest paid	$41,539		$39,404
Income taxes paid, net of refunds	$2,749		$5,253
Noncash purchases of property and equipment	$84,708		$56,427

 

 

Universal Health Services, Inc.
Supplemental Statistical Information
(unaudited)
					% Change
					Quarter ended
Same Facility:					3/31/2018
Acute Care Hospitals
Revenues					3.7%
Adjusted Admissions					2.3%
Adjusted Patient Days					5.4%
Revenue Per Adjusted Admission					3.4%
Revenue Per Adjusted Patient Day					0.4%
Behavioral Health Hospitals
Revenues					3.0%
Adjusted Admissions					1.6%
Adjusted Patient Days					0.4%
Revenue Per Adjusted Admission					2.0%
Revenue Per Adjusted Patient Day					3.2%
UHS Consolidated			First quarter ended
			3/31/2018		3/31/2017
Revenues			$2,687,516		$2,612,858
EBITDA net of NCI			$442,080		$460,259
EBITDA Margin net of NCI			16.4%		17.6%
Adjusted EBITDA net of NCI			$455,080		$460,259
Adjusted EBITDA Margin net of NCI			16.9%		17.6%
Cash Flow From Operations			$364,051		$483,109
Days Sales Outstanding			53		50
Capital Expenditures			$189,041		$144,338
Debt			$3,921,335		$3,898,579
UHS' Shareholders Equity			$5,215,646		$4,735,962
Debt / Total Capitalization			42.9%		45.2%
Debt / EBITDA net of NCI (1)			2.32		2.32
Debt / Adjusted EBITDA net of NCI (1)			2.30		2.32
Debt / Cash From Operations (1)			3.69		2.91
(1)  Latest 4 quarters

 

 

Universal Health Services, Inc.
Acute Care Hospital Services
For the three months ended
March 31, 2018 and 2017
(in thousands)
Same Facility Basis - Acute Care Hospital Services
		Three months ended				Three months ended
		March 31, 2018				March 31, 2017
		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues before provision for doubtful accounts		$1,423,653				$1,553,467
Less: Provision for doubtful accounts		-				180,983
Net revenues		1,423,653		100.0%		1,372,484		100.0%
Operating charges:
Salaries, wages and benefits		581,573		40.9%		554,902		40.4%
Other operating expenses		307,397		21.6%		315,223		23.0%
Supplies expense		243,153		17.1%		228,485		16.6%
Depreciation and amortization		72,150		5.1%		63,049		4.6%
Lease and rental expense		14,283		1.0%		13,916		1.0%
Subtotal-operating expenses		1,218,556		85.6%		1,175,575		85.7%
Income from operations		205,097		14.4%		196,909		14.3%
Interest expense, net		531		0.0%		745		0.1%
Income before income taxes		204,566		14.4%		196,164		14.3%
All Acute Care Hospital Services
		Three months ended				Three months ended
		March 31, 2018				March 31, 2017
		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues before provision for doubtful accounts		$1,445,632				$1,570,530
Less: Provision for doubtful accounts		-				180,983
Net revenues		1,445,632		100.0%		1,389,547		100.0%
Operating charges:
Salaries, wages and benefits		581,768		40.2%		554,960		39.9%
Other operating expenses		330,036		22.8%		332,299		23.9%
Supplies expense		243,153		16.8%		228,485		16.4%
Depreciation and amortization		72,150		5.0%		71,338		5.1%
Lease and rental expense		14,283		1.0%		13,916		1.0%
Subtotal-operating expenses		1,241,390		85.9%		1,200,998		86.4%
Income from operations		204,242		14.1%		188,549		13.6%
Interest expense, net		531		0.0%		745		0.1%
Income before income taxes		203,711		14.1%		187,804		13.5%

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 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 assets, the impact of the EHR applications (in 2017) 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, 2017.

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 the implementation of EHR applications at our acute care hospitals (in 2017); (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 Care Services
For the three months ended
March 31, 2018 and 2017
(in thousands)
Same Facility - Behavioral Health Care Services
		Three months ended				Three months ended
		March 31, 2018				March 31, 2017
		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues before provision for doubtful accounts		$1,209,937				$1,205,077
Less: Provision for doubtful accounts		-				30,636
Net revenues		1,209,937		100.0%		1,174,441		100.0%
Operating charges:
Salaries, wages and benefits		630,568		52.1%		597,092		50.8%
Other operating expenses		230,347		19.0%		229,888		19.6%
Supplies expense		48,769		4.0%		47,747		4.1%
Depreciation and amortization		36,743		3.0%		35,316		3.0%
Lease and rental expense		12,008		1.0%		10,761		0.9%
Subtotal-operating expenses		958,435		79.2%		920,804		78.4%
Income from operations		251,502		20.8%		253,637		21.6%
Interest expense, net		427		0.0%		723		0.1%
Income before income taxes		251,075		20.8%		252,914		21.5%
All Behavioral Health Care Services
		Three months ended				Three months ended
		March 31, 2018				March 31, 2017
		Amount		% of Net Revenues		Amount		% of Net Revenues
Net revenues before provision for doubtful accounts		$1,237,996				$1,249,748
Less: Provision for doubtful accounts		-				31,626
Net revenues		1,237,996		100.0%		1,218,122		100.0%
Operating charges:
Salaries, wages and benefits		642,128		51.9%		613,849		50.4%
Other operating expenses		256,402		20.7%		254,478		20.9%
Supplies expense		49,536		4.0%		49,036		4.0%
Depreciation and amortization		38,454		3.1%		36,945		3.0%
Lease and rental expense		12,301		1.0%		11,160		0.9%
Subtotal-operating expenses		998,821		80.7%		965,468		79.3%
Income from operations		239,175		19.3%		252,654		20.7%
Interest expense, net		427		0.0%		723		0.1%
Income before income taxes		238,748		19.3%		251,931		20.7%

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 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 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, 2017.

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.

 

 

Universal Health Services, Inc.
Selected Hospital Statistics
For the three months ended
March 31, 2018 and 2017
AS REPORTED:
		ACUTE						BEHAVIORAL HEALTH
		3/31/18		3/31/17		%  change		3/31/18		3/31/17		%  change
Hospitals owned and leased		26		26		0.0%		300		292		2.7%
Average licensed beds		6,161		6,107		0.9%		23,240		23,056		0.8%
Average available beds		5,985		5,932		0.9%		23,158		22,875		1.2%
Patient days		352,818		333,000		6.0%		1,581,996		1,592,454		-0.7%
Average daily census		3,920.2		3,700.0		6.0%		17,577.7		17,693.9		-0.7%
Occupancy-licensed beds		63.6%		60.6%		5.0%		75.6%		76.7%		-1.4%
Occupancy-available beds		65.5%		62.4%		5.0%		75.9%		77.4%		-1.9%
Admissions		76,643		74,351		3.1%		119,980		118,330		1.4%
Length of stay		4.6		4.5		2.8%		13.2		13.5		-2.0%
Inpatient revenue		$6,361,766		$5,597,850		13.6%		$2,402,258		$2,183,002		10.0%
Outpatient revenue		3,714,661		3,294,177		12.8%		255,181		246,460		3.5%
Total patient revenue		10,076,427		8,892,027		13.3%		2,657,439		2,429,462		9.4%
Other revenue		98,187		121,265		-19.0%		50,033		51,476		-2.8%
Gross hospital revenue		10,174,614		9,013,292		12.9%		2,707,472		2,480,938		9.1%
Total deductions		8,728,982		7,442,762		17.3%		1,469,476		1,231,190		19.4%
Net hospital revenue before
provision for doubtful accounts		1,445,632		1,570,530		-8.0%		1,237,996		1,249,748		-0.9%
Provision for doubtful accounts		0		180,983		-100.0%		0		31,626		-100.0%
Net hospital revenue		$1,445,632		$1,389,547		4.0%		$1,237,996		$1,218,122		1.6%
SAME FACILITY:
		ACUTE						BEHAVIORAL HEALTH
		3/31/18		3/31/17		%  change		3/31/18		3/31/17		%  change
Hospitals owned and leased		26		26		0.0%		286		286		0.0%
Average licensed beds		6,161		6,107		0.9%		22,545		22,251		1.3%
Average available beds		5,985		5,932		0.9%		22,463		22,170		1.3%
Patient days		352,818		333,000		6.0%		1,558,863		1,544,760		0.9%
Average daily census		3,920.2		3,700.0		6.0%		17,320.7		17,164.0		0.9%
Occupancy-licensed beds		63.6%		60.6%		5.0%		76.8%		77.1%		-0.4%
Occupancy-available beds		65.5%		62.4%		5.0%		77.1%		77.4%		-0.4%
Admissions		76,643		74,351		3.1%		118,631		116,197		2.1%
Length of stay		4.6		4.5		2.8%		13.1		13.3		-1.2%

 

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SOURCE Universal Health Services, Inc.