UNIVERSAL HEALTH SERVICES : ANNOUNCES 2022 FIRST QUARTER FINANCIAL RESULTS - Form 8-K

UNIVERSAL HEALTH SERVICES, INC.

ANNOUNCES 2022 FIRST QUARTER FINANCIAL RESULTS

Consolidated Results of Operations, As Reported and As Adjusted - Three-month periods ended March 31, 2022 and 2021:

KING OF PRUSSIA, PA - Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $153.9 million, or $2.02 per diluted share, during the first quarter of 2022, as compared to $209.1 million, or $2.43 per diluted share, during the first quarter of 2021. Net revenues increased by 9.3% to $3.293 billion during the first quarter of 2022 as compared to $3.013 billion during the first quarter of 2021.

As reflected on the Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our adjusted net income attributable to UHS during the first quarter of 2022 was $163.5 million, or $2.15 per diluted share, as compared to $210.1 million, or $2.44 per diluted share, during the first quarter of 2021.

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2022, was an unfavorable after-tax unrealized loss of $9.5 million, or $.13 per diluted share, ($12.5 million pre-tax which is included in "Other (income) expense, net"), resulting from a decrease in the market value of certain equity securities.

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2021, was a net aggregate unfavorable after-tax impact of $1.1 million, or $.01 per diluted share, consisting of the following: (i) an after-tax unrealized loss of $2.1 million, or $.02 per diluted share, ($2.8 million pre-tax which is included in "Other (income) expense, net"), resulting from a decrease in the market value of certain equity securities, and; (ii) a favorable after-tax impact of $1.1 million, or $.01 per diluted share, resulting from ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09").

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 $368.3 million during the first quarter of 2022, as compared to $426.3 million during the first quarter of 2021. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, was $379.5 million during the first quarter of 2022, as compared to $427.1 million during the first quarter of 2021.

Acute Care Services - Three-month periods ended March 31, 2022 and 2021:

During the first quarter of 2022, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased by 5.7% and adjusted patient days increased by 5.5%, as compared to the first quarter of 2021. At these facilities, during the first quarter of 2022, net revenue per adjusted admission increased by 3.1% and net revenue per adjusted patient day increased by 3.3%, as compared to the first quarter of 2021. Net revenues generated from our acute care services on a same facility basis increased by 9.7% during the first quarter of 2022, as compared to the first quarter of 2021.

Behavioral Health Care Services - Three-month periods ended March 31, 2022 and 2021:

During the first quarter of 2022, at behavioral health care facilities on a same facility basis, adjusted admissions decreased by 1.9% and adjusted patient days decreased by 1.3%, as compared to the first quarter of 2021. At these facilities, during the first quarter of 2022, net revenue per adjusted admission increased by 5.8% and net revenue per adjusted patient day increased by 5.1%, as compared to the first quarter of 2021. Net revenues generated from our behavioral health care services increased by 3.8% during the first quarter of 2022, as compared to the first quarter of 2021.

COVID-19

The impact of the COVID-19 pandemic, which began during the second half of March, 2020, has had a material effect on our operations and financial results since that time. The COVID-19 vaccination process commenced during the first quarter of 2021. Since that time through the second quarter of 2021, we had generally experienced a decline in COVID-19 patients as well as a corresponding recovery in non-COVID patient activity. However, during the third and fourth quarters of 2021, and continuing into the early part of the first quarter of 2022, our facilities generally experienced an increase in COVID-19 patients resulting from the Delta and, more recently, the highly transmissible Omicron variants. COVID-19 related patient volumes at our facilities were generally declining during the latter part of the first quarter of 2022.

The nationwide shortage of nurses and other clinical staff and support personnel has been a significant operating issue facing us and other healthcare providers. Like others in the healthcare industry, we continue to experience a shortage of nurses and other clinical staff and support personnel at our acute care and behavioral health care hospitals in many geographic areas. 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. This staffing shortage has required us to hire expensive temporary personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel. At certain facilities, particularly within our behavioral health care segment, we have been unable to fill all vacant positions and, consequently, have been required to limit patient volumes. These factors had a material unfavorable impact on our results of operations during the first quarter of 2022. The length and extent of the disruptions caused by the COVID-19 pandemic are currently unknown; however, we expect such disruptions to continue during 2022.

Since the future volumes and severity of COVID-19 patients remain highly uncertain and subject to change, including potential increases in future COVID-19 patient volumes caused by new variants of the virus, as well as related pressures on staffing and wage rates, we are not able to fully quantify the impact that these factors will have on our future financial results. However, developments related to the COVID-19 pandemic could continue to materially affect our financial performance during 2022.

Net Cash Provided by Operating Activities and Liquidity:

Net Cash Provided by Operating Activities:

For the three months ended March 31, 2022, our net cash provided by operating activities was $445 million as compared to $72 million during the first quarter of 2021. The $374 million net increase in our net cash provided by operating activities during the first quarter of 2022, as compared to the first quarter of 2021, was due to: (i) a favorable change of $510 million resulting primarily from the early return of Medicare accelerated payments which were received during 2020 and repaid during the first quarter of 2021, partially offset by; (ii) an unfavorable change of $72 million in accounts receivable; (iii) an unfavorable change of $44 million resulting from a decrease in net income plus depreciation and amortization expense, stock-based compensation expense and gain/loss on sales of assets and businesses, and; (iv) $20 million of other combined net unfavorable changes.

Liquidity:

As of March 31, 2022, we had $736 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 previously announced, on February 24, 2022, our Board of Directors authorized a $1.4 billion increase to our stock repurchase program. Pursuant to this 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 first quarter of 2022, we have repurchased approximately 2.65 million shares at an aggregate cost of approximately $350.2 million (approximately $132 per share). As of March 31, 2022, we had an aggregate available repurchase authorization of approximately $1.41 billion.

2022 Operating Results Forecast:

On February 24, 2022, we provided our 2022 operating results forecast as part of our 2021 fourth quarter and full year financial results' announcement. As disclosed at that time, since the future volumes and severity of COVID-19 patients remain highly uncertain and subject to change, as well as pressures on staffing and wage rates, we are not able to fully quantify the impact that these factors will have on our future financial results.

Our operating results during the first quarter of 2022 reflect continued uncertainties related to the COVID-19 pandemic as well cost escalations related to the nationwide shortage of nurses and other clinical staff and support personnel. As a result, our labor costs were higher than anticipated, and patient volumes at our behavioral health care facilities were lower than anticipated, which unfavorably impacted our operating results during the first quarter of 2022.

At this time, we are not changing our previously released 2022 operating results forecast. However, given the continued uncertainties related to the COVID-19 pandemic, as well as the healthcare staffing shortage and its unfavorable impact on our labor costs and behavioral health patient volumes, we may make reductions to our 2022 full year operating results forecast at a future date if the unfavorable operating trends experienced during the first quarter of 2022 do not improve.

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 26, 2022. The dial-in number is 1-877-648-7971.

A live broadcast of the conference call will be available on our website at www.uhs.com. 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 during 2021 were approximately $12.6 billion. In 2022, UHS was again recognized as one of the World's Most Admired Companies by Fortune; and in 2021 the Company ranked #270 on the Fortune 500 and #307 on Forbes' list of America's Largest Public Companies.

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 over 89,000 employees and through its subsidiaries operates 28 acute care hospitals (including the newly constructed, 170-bed Northern Nevada Sierra Medical Center located in Reno, Nevada, which opened in early April, 2022), 336 behavioral health facilities, 40

outpatientfacilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 39U.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 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 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 A-Risk Factors and in -Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2021), 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 potential impact on future COVID-19 patient volumes resulting from new variants of the virus, 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 and potential retrospective adjustment in future periods of CARES Act and other grant income revenues recorded as revenues in prior periods; 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; potential increases to expenses and other costs related to staffing, supply chain, construction and medical equipment costs and other expenditures resulting from inflation; 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 developments related to the COVID-19 pandemic could continue to materially affect our financial performance during 2022.

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 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, 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-K for the year ended December 31, 2021. 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.

(more)

Universal Health Services, Inc.
Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
		Three months
		ended March 31,
		2022			2021
Net revenues		$	3,292,956				3,012,987
Operating charges:
Salaries, wages and benefits			1,692,270				1,497,773
Other operating expenses			820,934				709,708
Supplies expense			371,073				347,110
Depreciation and amortization			143,784				131,403
Lease and rental expense			32,038				31,324
			3,060,099				2,717,318
Income from operations			232,857				295,669
Interest expense, net			21,673				21,957
Other (income) expense, net			11,201				835
Income before income taxes			199,983				272,877
Provision for income taxes			48,962				63,807
Net income			151,021				209,070
Less: Net income (loss) attributable to noncontrolling interests ("NCI")			(2,892	)			(21	)
Net income attributable to UHS		$	153,913			$	209,091
Basic earnings per share attributable to UHS (a)		$	2.05			$	2.46
Diluted earnings per share attributable to UHS (a)		$	2.02			$	2.43

Universal Health Services, Inc.
Footnotes to Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
		Three months
		ended March 31,
		2022			2021
(a) Earnings per share calculation:
Basic and diluted:
Net income attributable to UHS		$	153,913			$	209,091
Less: Net income attributable to unvested restricted share grants			(249	)			(552	)
Net income attributable to UHS - basic and diluted		$	153,664			$	208,539
Weighted average number of common shares - basic			75,030				84,782
Basic earnings per share attributable to UHS:		$	2.05			$	2.46
Weighted average number of common shares			75,030				84,782
Add: Other share equivalents			1,011				1,014
Weighted average number of common shares and equiv. - diluted			76,041				85,796
Diluted earnings per share attributable to UHS:		$	2.02			$	2.43

Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule")
For the Three Months ended March 31, 2022 and 2021
(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, 2022			revenues			March 31, 2021			revenues
Net income attributable to UHS	$	153,913							$	209,091
Depreciation and amortization		143,784								131,403
Interest expense, net		21,673								21,957
Provision for income taxes		48,962								63,807
EBITDA net of NCI	$	368,332				11.2	%		$	426,258				14.1	%
Other (income) expense, net		11,201								835
Adjusted EBITDA net of NCI	$	379,533				11.5	%		$	427,093				14.2	%
Net revenues	$	3,292,956							$	3,012,987
Calculation of Adjusted Net Income Attributable to UHS
	Three months ended			Three months ended
	March 31, 2022			March 31, 2021
					Per							Per
	Amount			Diluted Share			Amount			Diluted Share
Net income attributable to UHS	$	153,913			$	2.02			$	209,091			$	2.43
Plus/minus after-tax adjustments:
Unrealized loss on equity securities		9,537				0.13				2,137				0.02
Impact of ASU 2016-09		-				-				(1,079	)			(0.01	)
Subtotal adjustments		9,537				0.13				1,058				0.01
Adjusted net income attributable to UHS	$	163,450			$	2.15			$	210,149			$	2.44

Universal Health Services, Inc.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
		Three months
		ended March 31,
		2022			2021
Net income		$	151,021			$	209,070
Other comprehensive income (loss):
Foreign currency translation adjustment			(18,470	)			(10,346	)
Other comprehensive income (loss) before tax			(18,470	)			(10,346	)
Income tax expense (benefit) related to items of other comprehensive income (loss)			(944	)			(1,466	)
Total other comprehensive income (loss), net of tax			(17,526	)			(8,880	)
Comprehensive income			133,495				200,190
Less: Comprehensive income (loss) attributable to noncontrolling interests			(2,892	)			(21	)
Comprehensive income attributable to UHS		$	136,387			$	200,211

Universal Health Services, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
		March 31,			December 31,
		2022			2021
Assets
Current assets:
Cash and cash equivalents		$	105,999			$	115,301
Accounts receivable, net			1,754,877				1,746,635
Supplies			208,302				206,839
Other current assets			232,724				194,781
Total current assets			2,301,902				2,263,556
Property and equipment			10,929,292				10,770,702
Less: accumulated depreciation			(5,010,825	)			(4,896,427	)
			5,918,467				5,874,275
Other assets:
Goodwill			3,949,788				3,962,624
Deferred income taxes			47,549				45,707
Right of use assets-operating leases			368,921				367,477
Deferred charges			6,310				6,525
Other			551,509				573,379
Total Assets		$	13,144,446			$	13,093,543
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt		$	48,486			$	48,409
Accounts payable and other liabilities			1,976,389				1,860,496
Operating lease liabilities			65,607				64,484
Federal and state taxes			55,734				10,720
Total current liabilities			2,146,216				1,984,109
Other noncurrent liabilities			475,006				464,759
Operating lease liabilities noncurrent			305,643				304,624
Long-term debt			4,250,689				4,141,879
Redeemable noncontrolling interest			4,314				5,119
UHS common stockholders' equity			5,867,872				6,089,664
Noncontrolling interest			94,706				103,389
Total equity			5,962,578				6,193,053
Total Liabilities and Stockholders' Equity		$	13,144,446			$	13,093,543

Universal Health Services, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Three months
	ended March 31,
	2022			2021
Cash Flows from Operating Activities:
Net income	$	151,021			$	209,070
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation & amortization		143,784				131,403
Loss on sale of assets and businesses		1,084				0
Stock-based compensation expense		19,055				18,022
Changes in assets & liabilities, net of effects from acquisitions and dispositions:
Accounts receivable		(15,073	)			56,851
Accrued interest		180				10,133
Accrued and deferred income taxes		47,548				53,769
Other working capital accounts		63,308				82,663
Medicare accelerated payments and deferred CARES Act and other grants		250				(509,448	)
Other assets and deferred charges		26,042				(17	)
Other		(4,020	)			2,623
Accrued insurance expense, net of commercial premiums paid		41,685				35,467
Payments made in settlement of self-insurance claims		(29,431	)			(18,741	)
Net cash provided by operating activities		445,433				71,795
Cash Flows from Investing Activities:
Property and equipment additions		(200,002	)			(247,459	)
Proceeds received from sales of assets and businesses		10,232				0
Inflows (outflows) from foreign exchange contracts that hedge our net U.K. investment		20,710				(14,264	)
Decrease in capital reserves of commercial insurance subsidiary		100				100
Costs incurred for purchase of information technology applications, net of refunds		0				(575	)
Investment in, and advances to, joint venture and other		0				(129	)
Net cash used in investing activities		(168,960	)			(262,327	)
Cash Flows from Financing Activities:
Repayments of long-term debt		(11,966	)			(251,830	)
Additional borrowings		117,400				0
Repurchase of common shares		(365,505	)			(7,464	)
Dividends paid		(14,875	)			(17,018	)
Issuance of common stock		3,503				3,357
Profit distributions to noncontrolling interests		(5,289	)			(4,525	)
Purchase (sale) of ownership interests by (from) minority member		(1,307	)			7,603
Net cash used in financing activities		(278,039	)			(269,877	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(2,232	)			423
Decrease in cash, cash equivalents and restricted cash		(3,798	)			(459,986	)
Cash, cash equivalents and restricted cash, beginning of period		178,934				1,279,154
Cash, cash equivalents and restricted cash, end of period	$	175,136			$	819,168
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	20,388			$	11,421
Income taxes paid, net of refunds	$	4,423			$	8,654
Noncash purchases of property and equipment	$	90,730			$	60,124

Universal Health Services, Inc.
Supplemental Statistical Information
(unaudited)
						% Change
Same Facility:						3 months ended
						3/31/2022
Acute Care Services
Revenues			9.7%
Adjusted Admissions			5.7%
Adjusted Patient Days			5.5%
Revenue Per Adjusted Admission			3.1%
Revenue Per Adjusted Patient Day			3.3%
Behavioral Health Care Services
Revenues			3.8%
Adjusted Admissions			-1.9%
Adjusted Patient Days			-1.3%
Revenue Per Adjusted Admission			5.8%
Revenue Per Adjusted Patient Day			5.1%
UHS Consolidated				Three months ended
				3/31/2022		3/31/2021
Revenues				$3,292,956		$3,012,987
EBITDA net of NCI				$368,332		$426,258
EBITDA Margin net of NCI				11.2%		14.1%
Adjusted EBITDA net of NCI				$379,533		$427,093
Adjusted EBITDA Margin net of NCI				11.5%		14.2%
Cash Flow From Operations				$445,433		$71,795
Days Sales Outstanding				48		50
Capital Expenditures				$200,002		$247,459
Debt				$4,299,175		$3,613,103
UHS' Shareholders Equity				$5,867,872		$6,513,862
Debt / Total Capitalization				42.3%		35.7%
Debt / EBITDA net of NCI (1) (2)				2.32		1.87
Debt / Adjusted EBITDA net of NCI (1) (2)				2.32		1.87
Debt / Cash From Operations (1) (2)				3.42		1.87
(1) Latest 4 quarters
(2) For the three months ended March 31, 2021, Debt, net of approximately $749 million of short-term cash
investments, resulted in ratios of 1.48 for each of Net Debt/EBITDA net of NCI, Net Debt/Adjusted EBITDA
net of NCI, and Net Debt/Cash from Operations.

Universal Health Services, Inc.

Acute Care Hospital Services

For the Three Months ended

March 31, 2022 and 2021

(in thousands)

Same Facility Basis - Acute Care Hospital Services
		Three months ended			Three months ended
		March 31, 2022			March 31, 2021
		Amount			% of Net Revenues			Amount			% of Net Revenues
Net revenues		$	1,834,779				100.0	%		$	1,671,836				100.0	%
Operating charges:
Salaries, wages and benefits			820,210				44.7	%			706,811				42.3	%
Other operating expenses			437,477				23.8	%			393,207				23.5	%
Supplies expense			313,137				17.1	%			296,478				17.7	%
Depreciation and amortization			92,939				5.1	%			81,184				4.9	%
Lease and rental expense			17,715				1.0	%			20,112				1.2	%
Subtotal-operating expenses			1,681,478				91.6	%			1,497,792				89.6	%
Income from operations			153,301				8.4	%			174,044				10.4	%
Interest expense, net			638				0.0	%			246				0.0	%
Other (income) expense, net			201				0.0	%			-				-
Income before income taxes		$	152,462				8.3	%		$	173,798				10.4	%
All Acute Care Hospital Services
		Three months ended			Three months ended
		March 31, 2022			March 31, 2021
		Amount			% of Net Revenues			Amount			% of Net Revenues
Net revenues		$	1,912,316				100.0	%		$	1,694,542				100.0	%
Operating charges:
Salaries, wages and benefits			843,906				44.1	%			707,218				41.7	%
Other operating expenses			482,078				25.2	%			416,007				24.5	%
Supplies expense			321,427				16.8	%			296,479				17.5	%
Depreciation and amortization			94,534				4.9	%			81,362				4.8	%
Lease and rental expense			20,852				1.1	%			20,112				1.2	%
Subtotal-operating expenses			1,762,797				92.2	%			1,521,178				89.8	%
Income from operations			149,519				7.8	%			173,364				10.2	%
Interest expense, net			638				0.0	%			246				0.0	%
Other (income) expense, net			201				0.0	%			-				-
Income before income taxes		$	148,680				7.8	%		$	173,118				10.2	%

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, 2021.

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 Months ended

March 31, 2022 and 2021

(in thousands)

Same Facility - Behavioral Health Care Services
		Three months ended			Three months ended
		March 31, 2022			March 31, 2021
		Amount			% of Net Revenues			Amount			% of Net Revenues
Net revenues		$	1,334,532				100.0	%			1,285,977				100.0	%
Operating charges:
Salaries, wages and benefits			745,806				55.9	%			698,228				54.3	%
Other operating expenses			265,691				19.9	%			244,365				19.0	%
Supplies expense			49,597				3.7	%			50,513				3.9	%
Depreciation and amortization			44,731				3.4	%			45,090				3.5	%
Lease and rental expense			10,724				0.8	%			11,251				0.9	%
Subtotal-operating expenses			1,116,549				83.7	%			1,049,447				81.6	%
Income from operations			217,983				16.3	%			236,530				18.4	%
Interest expense, net			465				0.0	%			338				0.0	%
Other (income) expense, net			(115	)			(0.0	)%			413				0.0	%
Income before income taxes		$	217,633				16.3	%		$	235,779				18.3	%
All Behavioral Health Care Services
		Three months ended			Three months ended
		March 31, 2022			March 31, 2021
		Amount			% of Net Revenues			Amount			% of Net Revenues
Net revenues		$	1,366,467				100.0	%			1,315,337				100.0	%
Operating charges:
Salaries, wages and benefits			753,886				55.2	%			703,975				53.5	%
Other operating expenses			298,467				21.8	%			269,297				20.5	%
Supplies expense			50,178				3.7	%			51,009				3.9	%
Depreciation and amortization			46,079				3.4	%			46,482				3.5	%
Lease and rental expense			10,820				0.8	%			11,683				0.9	%
Subtotal-operating expenses			1,159,430				84.8	%			1,082,446				82.3	%
Income from operations			207,037				15.2	%			232,891				17.7	%
Interest expense, net			1,365				0.1	%			1,153				0.1	%
Other (income) expense, net			(115	)			(0.0	)%			413				0.0	%
Income before income taxes		$	205,787				15.1	%		$	231,325				17.6	%

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 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, 2021.

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
March 31, 2022 and 2021
AS REPORTED:
		ACUTE			BEHAVIORAL HEALTH
		03/31/22			03/31/21			%change			03/31/22			03/31/21			% change
Hospitals owned and leased			27				26				3.8	%			336				335				0.3	%
Average licensed beds			6,749				6,515				3.6	%			24,243				24,018				0.9	%
Average available beds			6,577				6,343				3.7	%			24,143				23,918				0.9	%
Patient days			405,952				392,391				3.5	%			1,506,351				1,534,162				-1.8	%
Average daily census			4,510.6				4,359.9				3.5	%			16,737.2				17,046.2				-1.8	%
Occupancy-licensed beds			66.8	%			66.9	%			-0.1	%			69.0	%			71.0	%			-2.8	%
Occupancy-available beds			68.6	%			68.7	%			-0.2	%			69.3	%			71.3	%			-2.8	%
Admissions			75,289				72,924				3.2	%			112,433				115,408				-2.6	%
Length of stay			5.4				5.4				-0.1	%			13.4				13.3				0.7	%
Inpatient revenue		$	10,239,231			$	9,119,184				12.3	%		$	2,436,474			$	2,473,565				-1.5	%
Outpatient revenue			5,775,539				4,580,720				26.1	%			257,113				246,764				4.2	%
Total patient revenue			16,014,770				13,699,904				16.9	%			2,693,587				2,720,329				-1.0	%
Other revenue			184,481				143,265				28.8	%			66,697				62,208				7.2	%
Gross hospital revenue			16,199,251				13,843,169				17.0	%			2,760,284				2,782,537				-0.8	%
Total deductions			14,286,935				12,148,627				17.6	%			1,393,817				1,467,200				-5.0	%
Net hospital revenue		$	1,912,316			$	1,694,542				12.9	%		$	1,366,467			$	1,315,337				3.9	%
SAME FACILITY:
		ACUTE			BEHAVIORAL HEALTH
		03/31/22			03/31/21			% change			03/31/22			03/31/21			% change
Hospitals owned and leased			26				26				0.0	%			331				331				0.0	%
Average licensed beds			6,683				6,515				2.6	%			23,841				23,725				0.5	%
Average available beds			6,511				6,343				2.6	%			23,741				23,625				0.5	%
Patient days			402,165				392,391				2.5	%			1,493,766				1,519,290				-1.7	%
Average daily census			4,468.5				4,359.9				2.5	%			16,597.4				16,881.0				-1.7	%
Occupancy-licensed beds			66.9	%			66.9	%			-0.1	%			69.6	%			71.2	%			-2.2	%
Occupancy-available beds			68.6	%			68.7	%			-0.2	%			69.9	%			71.5	%			-2.2	%
Admissions			74,933				72,924				2.8	%			111,084				113,708				-2.3	%
Length of stay			5.4				5.4				-0.3	%			13.4				13.4				0.6	%