Company Announcements

Universal Health Services, Inc. Reports 2020 Fourth Quarter And Full Year Financial Results And 2021 Full Year Earnings Guidance

KING OF PRUSSIA, Pa., Feb. 25, 2021 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $308.7 million, or $3.60 per diluted share, during the fourth quarter of 2020, as compared to $245.2 million, or $2.79 per diluted share, during the comparable quarter of 2019.  Net revenues increased 6.6% to $3.087 billion during the fourth quarter of 2020 as compared to $2.890 billion during the fourth quarter of 2019.

As reflected on the Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our adjusted net income attributable to UHS during the fourth quarter of 2020 was $307.9 million, or $3.59 per diluted share, as compared to $245.1 million, or $2.79 per diluted share, during the fourth quarter of 2019. 

Included in our reported and adjusted net income attributable to UHS during the three-month period ended December 31, 2020 were the following:

  • A favorable impact of approximately $151.4 million, or $1.76 per diluted share, resulting from the recording of approximately $200 million of grant revenues from various governmental stimulus programs, most notably the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), as discussed below in CARES Act and Other Governmental Grants and Medicare Accelerated Payments.
  • An unfavorable estimated impact of $42.1 million ($55 million pre-tax), or $.49 per diluted share, resulting from the previously disclosed information technology incident that occurred on September 27, 2020. As discussed below in Information Technology Incident, we estimate that this incident had a pre-tax unfavorable impact of approximately $67 million during the twelve-month period ended December 31, 2020.

As reflected on the Supplemental Schedule, included in our reported results during the fourth quarter of 2020, was a net aggregate favorable after-tax impact of $849,000, or $.01 per diluted share, consisting of the following: (i) an after-tax unrealized gain of $3.9 million, or $.05 per diluted share, ($5.1 million pre-tax which is included in "Other (income) expense, net"), resulting from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale, and; (ii) a unfavorable after-tax impact of $3.0 million, or $.04 per diluted share, resulting from our adoption of ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09").

As indicated on the attached Supplemental Schedule, there were no significant adjustments made to our reported net income attributable to UHS during the fourth quarter of 2019. 

Included in our reported, and our adjusted, net income attributable to UHS during the fourth quarter of 2019 is a pre-tax unrealized gain of $16.7 million, or $.15 per diluted share (included in "Other (income), expense, net"), resulting from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale. 

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI", NCI is net income attributable to noncontrolling interests), was $557.2 million during the fourth quarter of 2020, as compared to $485.1 million during the fourth quarter of 2019. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, was $548.9 million during the fourth quarter of 2020 as compared to $465.8 million during the fourth quarter of 2019.

Consolidated Results of Operations, As Reported and As Adjusted  – Twelve-month periods ended December 31, 2020 and 2019:

Reported net income attributable to UHS was $944.0 million, or $10.99 per diluted share, during the twelve-month period ended December 31, 2020, as compared to $814.9 million, or $9.13 per diluted share, during the full year of 2019.  Net revenues increased 1.6% to $11.559 billion during the year ended December 31, 2020 as compared to $11.378 billion during the full year of 2019.

As reflected on the Supplemental Schedule, our adjusted net income attributable to UHS during the twelve-month period ended December 31, 2020 was $954.7 million, or $11.12 per diluted share, as compared to $891.8 million, or $9.99 per diluted share, during the full year of 2019. 

Our reported and adjusted net income attributable to UHS during the twelve-month period ended December 31, 2020 included the following:

  • A favorable impact of $308.6 million, or $3.61 per diluted share, resulting from the recording of approximately $413 million of grant revenues, as discussed below in CARES Act and Other Governmental Grants and Medicare Accelerated Payments.
  • An unfavorable estimated impact of $51.3 million ($67 million pre-tax), or $.60 per diluted share, resulting from the information technology incident, as discussed below in Information Technology Incident.
  • A favorable impact of $21.4 million, or $0.25 per diluted share, resulting from $28 million of net revenues recorded in connection with the California Medicaid supplemental payment program related to our acute care hospitals. Approximately $11 million of these supplemental revenues were attributable to 2020 and $17 million were attributable to prior years.

As reflected on the Supplemental Schedule, included in our reported results during the twelve-month period ended December 31, 2020, was a net aggregate unfavorable after-tax impact of $10.8 million, or $.13 per diluted share, consisting of the following: (i) an after-tax unrealized loss of $3.3 million, or $.04 per diluted share, ($4.3 million pre-tax which is included in "Other (income) expense, net"), resulting from a decrease in the market value of shares of certain marketable securities held for investment and classified as available for sale, and; (ii) an unfavorable after-tax impact of $7.4 million, or $.09 per diluted share, resulting from our adoption of ASU 2016-09.

As reflected on the Supplemental Schedule, included in our reported results during the twelve-month period ended December 31, 2019, is an aggregate net unfavorable after-tax impact of $77.0 million, or $.86 per diluted share, resulting from: (i) an unfavorable after-tax impact of $74.6 million, or $.84 per diluted share, resulting from a $97.6 million provision for asset impairment recorded in connection with Foundations Recovery Network; (ii) an unfavorable after-tax impact of $14.6 million, or $.16 per diluted share, resulting from the non-deductible portion of the net federal and state income taxes related to the settlement finalized in July, 2020 with the Department of Justice, Civil Division, and; (iii) a favorable after-tax impact of $12.2 million, or $.14 per diluted share, resulting from our adoption of ASU 2016-09.

Included in our reported and our adjusted net income attributable to UHS during the year ended December 31, 2019 is a pre-tax unrealized gain of $4.1 million, or $.04 per diluted share (included in "Other (income) expense, net"), resulting from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale.  

As calculated on the attached Supplemental Schedule, our EBITDA net of NCI was $1.860 billion during the full year of 2020, as compared to $1.707 billion during the full year of 2019. Our Adjusted EBITDA net of NCI, which excludes the impact of other (income) expense, net, the increase in the Department of Justice settlement reserve, and the provision for asset impairment, both of which were recorded during 2019, was $1.860 billion during the twelve-month period ended December 31, 2020 and $1.802 billion during the full year of 2019.

COVID-19

The impact of the COVID-19 pandemic, which began during the second half of March, 2020, has had a material unfavorable effect on our operations and financial results since that time, before giving effect to the revenues recorded in connection with the CARES Act and other governmental grants as discussed below in CARES Act and Other Governmental Grants and Medicare Accelerated Payments.

In an effort to slow the spread of the disease, since March, 2020, at various times, most state and local governments mandated general "shelter-in-place" orders or other similar restrictions that require or strongly encourage social distancing and, face coverings, and that have closed or limited non-essential business activities. Some of these restrictions remain in place. Additionally, evidence suggests that individuals may be deciding to forego medical care delivered in traditional venues. These dynamics have manifested themselves in our hospitals in, among other ways, reduced emergency room visits, elective/scheduled procedures and acute and behavioral health patient days.  While such measures are expected to assist in responding to the recent outbreak, self-quarantines, shelter-in-place orders, and suspension of voluntary procedures and surgeries have had, and will likely continue to have, an adverse impact on the operations and financial position of health care provider systems due to increased costs (including labor costs which have been pressured during the COVID-19 pandemic due to a shortage of clinicians and increased wage rates resulting from increased demand for those services), actual reduction and potential reduction in overall patient volume, and shifts in payor mix. Despite these measures, there have been waves of escalated COVID-19 cases at various times, including the fourth quarter of 2020 and into the first quarter of 2021, in many states in the U.S., including many states in which we operate hospitals.

Recently, COVID-19 vaccinations have begun to be administered and while we expect the administration of vaccines will assist in easing the number of COVID-19 patients, the pace at which this is likely to occur is difficult to predict. The extent to which the COVID-19 pandemic and measures taken in response thereto impact our business, results of operations and financial condition will depend on numerous factors and future developments, most of which are beyond our control or ability to predict. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We are not able to fully quantify the impact that these factors will have on our future financial results, but expect developments related to the COVID-19 pandemic to materially affect our financial performance in 2021.

CARES Act and Other Governmental Grants and Medicare Accelerated Payments:

As of December 31, 2020, we have received an aggregate of $1.112 billion as follows:

  • Approximately $417 million of funds received from various governmental stimulus programs, most notably the Public Health and Social Services Emergency Fund, as provided for by the CARES Act.
    • Included in our reported and adjusted net income attributable to UHS for the three-month period ended December 31, 2020, was a favorable impact of $151.4 million, or $1.76 per diluted share, resulting from the recording of approximately $200 million of CARES Act and other grant revenues. During the fourth quarter of 2020, approximately $155 million of the grant revenues were recorded by our acute care services, and approximately $45 million of the grant revenues were recorded by our behavioral health services.
    • Included in our reported and adjusted net income attributable to UHS for the twelve-month period ended December 31, 2020, was the favorable impact of $308.6 million, or $3.61 per diluted share, resulting from the recording of approximately $413 million of CARES Act and other grant revenues. Approximately $316 million of the grant revenues were attributable to our acute care services and approximately $97 million were attributable to our behavioral health care services.
    • As of December 31, 2020, approximately $4 million of these funds remain in the Medicare accelerated payments and deferred CARES Act and other grants liability account in our consolidated balance sheet.
  • Approximately $695 million of Medicare accelerated payments received pursuant to the Medicare Accelerated and Advance Payment Program ("MAAPP"). Pursuant to legislation enacted on October 1, 2020, these funds are required to be repaid to the government beginning in the second quarter of 2021 through the third quarter of 2022 through withholding of future Medicare revenues earned during those periods. There was no impact on our earnings during the three and twelve-month periods ended December 31, 2020 in connection with receipt of these funds.
    • We are planning for the early repayment of the $695 million of Medicare accelerated payments previously received pursuant to the MAAPP. We have commenced the repayment process and anticipate that the $695 million of funds will be repaid to the government in March or April of 2021.

Additional CARES Act grants amounting to $187 million were received in January, 2021.  There was no impact on our results of operations for the year ended December 31, 2020 in connection with receipt of these funds.

Information Technology Incident:

As previously disclosed on September 29, 2020, we experienced an information technology security incident in the early morning hours of September 27, 2020. As a result of this cyberattack, we suspended user access to our information technology applications related to operations located in the United States. While our information technology applications were offline, patient care was delivered safely and effectively at our facilities across the country utilizing established back-up processes, including offline documentation methods.  Our information technology applications were substantially restored at our acute care and behavioral health hospitals at various times in October, 2020, on a rolling/staggered basis, and our facilities generally resumed standard operating procedures at that time.

Immediately after the incident, we worked diligently with our information technology security partners to restore our information technology infrastructure and business operations as quickly as possible. In parallel, we began investigating the nature and potential impact of the security incident and engaged third-party information technology and forensic vendors to assist. No evidence of unauthorized access, copying or misuse of any patient or employee data has been identified to date.  

Given the disruption to the standard operating procedures at our facilities during the period of September 27, 2020 into October, 2020, certain patient activity, including ambulance traffic and elective/scheduled procedures at our acute care hospitals, were diverted to competitor facilities. We also incurred significant incremental labor expense, both internal and external, to restore information technology operations as expeditiously as possible. Additionally, certain administrative functions such as coding and billing were delayed into December, 2020, which had a negative impact on our operating cash flows during the fourth quarter of 2020.

As a result of these factors, we estimate that this incident had an aggregate unfavorable pre-tax impact of approximately $67 million during the year ended December 31, 2020. We estimate that approximately $12 million of the unfavorable pre-tax impact was experienced during the third quarter of 2020, and approximately $55 million was experienced during the fourth quarter of 2020. The substantial majority of the unfavorable impact was attributable to our acute care services and consisted primarily of lost operating income resulting from the related decrease in patient activity as well as increased revenue reserves recorded in connection with the associated billing delays. Also included were certain labor expenses, professional fees and other operating expenses incurred as a direct result of this incident and the related disruption to our operations. Although we can provide no assurance or estimation related to the receipt timing, or amount, of the proceeds that we may receive pursuant to commercial insurance coverage we have in connection with this incident, we believe we are entitled to recovery of the majority of the ultimate financial impact resulting from the cyberattack.

Acute Care Services – Three and twelve-month periods ended December 31, 2020 and 2019:

During the fourth quarter of 2020, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) decreased 14.5% and adjusted patient days decreased 2.2%, as compared to the fourth quarter of 2019. At these facilities, excluding the CARES Act and other grant revenues of approximately $155 million recorded during the fourth quarter of 2020, net revenue per adjusted admission increased 14.9% while net revenue per adjusted patient day increased 0.6% during the fourth quarter of 2020 as compared to the fourth quarter of 2019. During the fourth quarter of 2020, as compared to the fourth quarter of 2019, net revenues generated from our acute care services on a same facility basis increased 9.5% including the impact of the CARES Act and other grant revenues, and decreased 0.4% excluding the impact of the CARES Act and other grant revenues.

During the twelve-month period ended December 31, 2020, at our acute care hospitals on a same facility basis, adjusted admissions decreased 15.2% and adjusted patient days decreased 5.5%, as compared to the full year of 2019. At these facilities, excluding the CARES Act and other grant revenues of approximately $316 million recorded during the full year of 2020, net revenue per adjusted admission increased 14.1% while net revenue per adjusted patient day increased 2.4% during the twelve-month period ended December 31, 2020 as compared to the full year of 2019. During the twelve months of 2020, as compared to the full year of 2019, net revenues generated from our acute care services on a same facility basis increased 3.0% including the CARES Act and other grant revenues, and decreased 2.2% excluding the CARES Act and other grant revenues.

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2020 and 2019:

During the fourth quarter of 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased 9.2% while adjusted patient days decreased 5.9% as compared to the fourth quarter of 2019. At these facilities, excluding the impact of the CARES Act and other grant revenues of approximately $45 million recorded during the fourth quarter of 2020, net revenue per adjusted admission increased 9.5% while net revenue per adjusted patient day increased 5.7% during the fourth quarter of 2020 as compared to the comparable quarter in 2019. During the fourth quarter of 2020, as compared to the fourth quarter of 2019, net revenues generated from our behavioral health care services on a same facility basis increased 3.0% including the impact of the CARES Act and other grant revenues, and decreased 0.5% excluding the impact of the CARES Act and other grant revenues.    

During the twelve-month period ended December 31, 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased 8.0% and adjusted patient days decreased 5.3%, as compared to the full year of 2019. At these facilities, excluding the CARES Act and other grant revenues of approximately $97 million recorded during the twelve months of 2020, net revenue per adjusted admission increased 7.3% while net revenue per adjusted patient day increased 4.3% during the full year of 2020 as compared to the full year of 2019. During the full year of 2020, as compared to the full year of 2019, net revenues generated from our behavioral health care services on a same facility basis increased 0.6% including the CARES Act and other grant revenues, and decreased 1.3% excluding the CARES Act and other grant revenues.

Net Cash Provided by Operating Activities and Liquidity:

Net Cash Provided by Operating Activities:

For the twelve months ended December 31, 2020, our net cash provided by operating activities increased to $2.

The $922 million net increase was due to: (i) a favorable change of $699 million resulting primarily from the $695 million of Medicare accelerated payments received during 2020; (ii) a favorable change of $176 million due to the payment deferral of the employer's share of Social Security taxes, as provided for by the CARES Act; (iii) an unfavorable change of $104 million in accounts receivable due, in part, to the coding and billing delays experienced during the fourth quarter of 2020 resulting from the information technology incident, as discussed below; (iv) a favorable change of $55 million resulting from an increase in net income plus/minus depreciation and amortization expense, stock-based compensation, provision for asset impairment, net gains/losses on sales of assets and businesses and costs related to extinguishment of debt; (v) a favorable change of $38 million in accrued insurance expense, net of commercial premiums paid; (vi) a favorable change of $35 million in accrued and deferred income taxes, and; (vii) $23 million of other combined net favorable changes.  

Liquidity:

As of December 31, 2020, we had $1.222 billion of aggregate available borrowing capacity pursuant to the following: (i) $997 million of available borrowing capacity pursuant to our $1 billion revolving credit facility (there were no borrowings outstanding), net of outstanding letters of credit, and; (ii) $225 million of available borrowing capacity pursuant to our $450 million accounts receivable securitization program, net of $225 million of outstanding borrowings.     

In addition, as of December 31, 2020, we had approximately $1.224 billion of cash and cash equivalents. 

Stock Repurchase Program and Payment of Quarterly Dividends:

In April of 2020, as part of various Covid-19 initiatives, we suspended our stock repurchase program and payment of quarterly dividends.    

Our Board of Directors have recently approved a $0.20 per share cash dividend payable on March 31, 2021 to shareholders of record as of March 15, 2021

We are planning to resume stock repurchases, subject to approval by our Board of Directors, during the second quarter of 2021.

Pursuant to our $2.7 billion stock repurchase program, which had an aggregate available repurchase authorization of $559.6 million as of December 31, 2020, shares of our Class B Common Stock may be repurchased, from time to time as conditions allow, on the open market or in negotiated private transactions.   

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

2021 Operating Results Forecast:

Reflected below is our 2021 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"), adjusted net income attributable to UHS per diluted share ("Adjusted EPS-diluted") and capital expenditures. 

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, 2020. Please see the Supplemental Non-GAAP Disclosures - 2021 Operating Results Forecast schedule as included herein for additional information and a reconciliation to the financial forecasts as computed in accordance with GAAP. 

                                                                                


For the Year Ended
December 31, 2021


       Low

       High

Net revenues

$12.125 billion

$12.361 billion

Adjusted EBITDA net of NCI

$1.738 billion

$1.849 billion 

Adjusted EPS-diluted

$10.05 per share

$11.05 per share

Capital expenditures

$850 million

$1.000 billion

Our 2021 guidance contains a number of assumptions including, but not limited to, the following:

  • The impact of the COVID-19 pandemic, which began during the second half of March, 2020, has had a material unfavorable effect on our operations and financial results since that time, before giving effect to the revenues recorded in connection with the CARES Act and other governmental grants. The extent to which the COVID-19 pandemic and measures taken in response thereto impact our business, results of operations and financial condition will depend on numerous factors and future developments, most of which are beyond our control or ability to predict. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We are not able to fully quantify the impact that these factors will have on our future financial results, but expect developments related to the COVID-19 pandemic to materially affect our financial performance in 2021 and our 2021 operating results forecast. Please see additional disclosure above in COVID-19.
  • The 2021 forecasted revenues and other amounts exclude any favorable impact that may result from revenues and income recorded during 2021 in connection with various governmental stimulus programs, most notably the CARES Act.
  • In addition, the 2021 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 increases/decreases in the market value of shares of certain marketable securities held for investment and classified as available for sale, our adoption of ASU 2016-09, 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, impairment of 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 included assumptions. It is also subject to certain conditions including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.
  • Our net revenues are estimated to be approximately $12.125 billion to $12.361 billion representing an increase of approximately 4.9% to 6.9% over our 2020 net revenues of approximately $11.559 billion.
    • Our 2021 forecasted net revenues exclude any revenues that may be recorded during 2021 in connection with various governmental stimulus programs, most notably the CARES Act.
    • Our 2020 net revenues include approximately $413 million of CARES Act and other grant revenues.
  • Our Adjusted EBITDA net of NCI is estimated to be approximately $1.738 billion to $1.849 billion as compared to our 2020 Adjusted EBITDA net of NCI of $1.860 billion.
    • Our 2021 forecasted Adjusted EBITDA net of NCI excludes any income that may be recorded during 2021 in connection with various governmental stimulus programs, most notably the CARES Act.
    •  Our 2020 Adjusted EBITDA includes approximately $403 million of income related to CARES Act and other grant revenues ($413 million of CARES Act and other grant revenues, less $10 million attributable to noncontrolling interests).
  • Our Adjusted EPS-diluted range is estimated to be $10.05 per diluted share to $11.05 per diluted share as compared to our adjusted net income attributable to UHS of $11.12 per diluted share for the year ended December 31, 2020, as calculated on the attached Supplemental Schedule.
    • Our 2021 forecasted Adjusted EPS-diluted excludes any after-tax income that may be recorded during 2021 in connection with various governmental stimulus programs, most notably the CARES Act.
    • Our 2020 Adjusted EPS-diluted includes $3.61 of after-tax income related to the recording of $413 million of CARES Act and other grant revenues.

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 26, 2021. 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.  Also, a replay of the call will be available following the conclusion of the live call and will be available for one full year.

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

One of the nation's largest and most respected providers of hospital and healthcare services, Universal Health Services, Inc. has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues were approximately $11.56 billion during 2020. In 2021, UHS was again recognized as one of the World's Most Admired Companies by Fortune; in 2020 ranked #281 on the Fortune 500; and listed #330 in Forbes ranking of U.S.' Largest Public Companies.

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

Headquartered in King of Prussia, PA, UHS has approximately 89,000 employees and through its subsidiaries operates 26 acute care hospitals, 334 behavioral health facilities, 39 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 38 U.S. states, Washington, D.C., Puerto Rico and the United Kingdom. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT).  For additional information on the Company, visit our web site: http://www.uhsinc.com.

This press release contains forward-looking statements based on current management expectations.  Numerous factors, including those disclosed herein, those related to the anticipated impact of COVID-19 on our operations and financial results, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2020), may cause the results to differ materially from those anticipated in the forward-looking statements.  These statements are subject to risks and uncertainties and therefore actual results may differ materially.  Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.  Many of the factors that could affect our future results are beyond our control or ability to predict, including the impact of the COVID-19 pandemic. Our future operations and financial results will likely be materially impacted by developments related to COVID-19 including, but not limited to, the length of time and severity of the spread of the pandemic; the volume of cancelled or rescheduled elective procedures and the volume of COVID-19 patients treated at our hospitals and other healthcare facilities; measures we are taking to respond to the COVID-19 pandemic; the impact of government and administrative regulation and stimulus on the hospital industry 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; and potential increases to expenses related to staffing, supply chain or other expenditures; the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, as well as risks associated with disruptions in the financial markets and the business of financial institutions as the result of the COVID-19 pandemic which could impact us from a financing perspective; and changes in general economic conditions nationally and regionally in our markets resulting from the COVID-19 pandemic. We are not able to fully quantify the impact that these factors will have on our future financial results, but expect developments related to the COVID-19 pandemic to materially affect our financial performance in 2021.

We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA net of NCI and Adjusted EBITDA net of NCI, which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect of material items impacting our net income attributable to UHS, such as, our adoption of ASU 2016-09, unrealized gains/losses resulting from changes in the market value of shares of certain marketable securities held for investment and classified as available for sale, and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of long-lived and intangible assets, changes in the reserve established in connection with our discussions with the Department of Justice, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. To obtain a complete understanding of our financial performance these measures should be examined in connection with net income attributable to UHS, as determined in accordance with GAAP, and as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2020. 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


Twelve months


ended December 31,


ended December 31,


2020


2019


2020


2019









Net revenues

$3,086,935


$2,896,247


$11,558,897


$11,378,259









Operating charges:








   Salaries, wages and benefits

1,466,070


1,431,640


5,613,097


5,588,893

   Other operating expenses

690,560


644,393


2,672,762


2,723,911

   Supplies expense

351,324


324,090


1,288,132


1,251,346

   Depreciation and amortization

133,930


127,656


510,493


490,392

   Lease and rental expense

31,092


27,489


116,059


107,809


2,672,976


2,555,268


10,200,543


10,162,351









Income from operations

413,959


340,979


1,358,354


1,215,908









Interest expense, net

19,886


39,159


106,285


162,733

Other (income) expense, net

(8,305)


(19,338)


(14)


(13,162)









Income before income taxes

402,378


321,158


1,252,083


1,066,337









Provision for income taxes

94,644


73,148


299,293


238,794









Net income

307,734


248,010


952,790


827,543









Less:  Net income attributable to








noncontrolling interests ("NCI")

(974)


2,834


8,837


12,689









Net income attributable to UHS

$308,708


$245,176


$943,953


$814,854

















































Basic earnings per share attributable to UHS (a)

$3.63


$2.81


$11.06


$9.16









Diluted earnings per share attributable to UHS (a)

$3.60


$2.79


$10.99


$9.13









 

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)










Three months


Twelve months

(a) Earnings per share calculation:

ended December 31,


ended December 31,


2020


2019


2020


2019

Basic and diluted:








Net income attributable to UHS

$308,708


$245,176


$943,953


$814,854

Less: Net income attributable to unvested restricted share grants

(994)


(614)


(2,981)


(2,028)

Net income attributable to UHS - basic and diluted

$307,714


$244,562


$940,972


$812,826









Weighted average number of common shares - basic

84,728


87,184


85,061


88,762









Basic earnings per share attributable to UHS:

$3.63


$2.81


$11.06


$9.16









Weighted average number of common shares

84,728


87,184


85,061


88,762

Add: Other share equivalents

859


419


526


278

Weighted average number of common shares and equiv. - diluted

85,587


87,603


85,587


89,040









Diluted earnings per share attributable to UHS:

$3.60


$2.79


$10.99


$9.13









 

Universal Health Services, Inc.

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

For the Three Months ended December 31, 2020 and 2019

(in thousands, except per share amounts)

(unaudited)

























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










Three months ended


% Net


Three months ended


% Net


December 31, 2020


revenues


December 31, 2019


revenues









Net income attributable to UHS

$308,708




$245,176



   Depreciation and amortization

133,930




127,656



   Interest expense, net

19,886




39,159



   Provision for income taxes

94,644




73,148



EBITDA net of NCI

$557,168


18.0%


$485,139


16.8%









Other (income) expense, net

(8,305)




(19,338)



Adjusted EBITDA net of NCI

$548,863


17.8%


$465,801


16.1%









Net revenues

$3,086,935




$2,896,247











































Calculation of Adjusted Net Income Attributable to UHS










Three months ended


Three months ended


December 31, 2020


December 31, 2019




Per




Per


Amount


Diluted Share


Amount


Diluted Share









Net income attributable to UHS

$308,708


$3.60


$245,176


$2.79

Plus/minus after-tax adjustments:








Unrealized gain on marketable securities held for sale

(3,880)


(0.05)


-


-

Impact of ASU 2016-09

3,031


0.04


(78)


-

Subtotal adjustments

(849)


(0.01)


(78)


-

Adjusted net income attributable to UHS

$307,859


$3.59


$245,098


$2.79









 

Universal Health Services, Inc.

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

For the Twelve Months ended December 31, 2020 and 2019

(in thousands, except per share amounts)

(unaudited)

























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










Twelve months ended


% Net


Twelve months ended


% Net


December 31, 2020


revenues


December 31, 2019


revenues









Net income attributable to UHS

$943,953




$814,854



   Depreciation and amortization

510,493




490,392



   Interest expense, net

106,285




162,733



   Provision for income taxes

299,293




238,794



EBITDA net of NCI

$1,860,024


16.1%


$1,706,773


15.0%









Other (income) expense, net

(14)




(13,162)



Increase in DOJ Reserve

-




10,978



Provision for asset impairment

-




97,631



Adjusted EBITDA net of NCI

$1,860,010


16.1%


$1,802,220


15.8%









Net revenues

$11,558,897




$11,378,259











































Calculation of Adjusted Net Income Attributable to UHS










Twelve months ended


Twelve months ended


December 31, 2020


December 31, 2019




Per




Per


Amount


Diluted Share


Amount


Diluted Share









Net income attributable to UHS

$943,953


$10.99


$814,854


$9.13

Plus/minus after-tax adjustments:








Unrealized loss on marketable securities held for sale

3,313


0.04


-


-

Increase in DOJ Reserve and related income taxes

-


-


14,583


0.16

Impact of ASU 2016-09

7,443


0.09


(12,200)


(0.14)

Provision for asset impairment

-


-


74,583


0.84

Subtotal adjustments

10,756


0.13


76,966


0.86

Adjusted net income attributable to UHS

$954,709


$11.12


$891,820


$9.99









 

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)










Three months


Twelve months


ended December 31,


ended December 31,


2020


2019


2020


2019









Net income

$307,734


$248,010


$952,790


$827,543

Other comprehensive income (loss):








   Unrealized derivative losses on cash flow hedges

0


0


0


(3,925)

   Minimum pension liability

4,428


8,503


4,428


8,503

   Foreign currency translation adjustment

31,899


47,078


13,619


27,886

Other comprehensive income (loss) before tax

36,327


55,581


18,047


32,464

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

2,728


5,489


1,820


4,813

Total other comprehensive income (loss), net of tax

33,599


50,092


16,227


27,651









Comprehensive income

341,333


298,102


969,017


855,194

Less: Comprehensive income (loss) attributable to noncontrolling interests

(974)


2,834


8,837


12,689

Comprehensive income attributable to UHS

$342,307


$295,268


$960,180


$842,505









 

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)











December 31,



December 31,




2020



2019

Assets







Current assets:







    Cash and cash equivalents


$

1,224,490


$

61,268

    Accounts receivable, net



1,728,928



1,560,847

    Supplies



190,417



159,889

    Other current assets



138,034



133,930

          Total current assets



3,281,869



1,915,934








Property and equipment



9,885,888



9,106,377

Less: accumulated depreciation



(4,512,764)



(4,089,679)




5,373,124



5,016,698








Other assets:







    Goodwill



3,882,715



3,869,760

    Deferred income taxes



22,689



16,189

    Right of use assets-operating leases



336,513



326,518

    Deferred charges



4,985



6,373

    Other



574,984



516,778

Total Assets


$

13,476,879


$

11,668,250








Liabilities and Stockholders' Equity







Current liabilities:







    Current maturities of long-term debt


$

331,998


$

87,550

    Accounts payable and other liabilities



1,656,046



1,272,374

    Medicare accelerated payments and deferred CARES Act and other grants


376,151



0

    Legal reserves



12,625



144,509

    Operating lease liabilities



59,796



56,442

    Federal and state taxes



44,423



2,515

          Total current liabilities



2,481,039



1,563,390








Other noncurrent liabilities



458,549



329,932

Operating lease liabilities noncurrent



278,303



270,076

Medicare accelerated payments noncurrent



322,617



0

Long-term debt



3,524,253



3,896,577

Deferred income taxes



5,582



25,071








Redeemable noncontrolling interest



4,569



4,333








UHS common stockholders' equity



6,317,146



5,504,105

Noncontrolling interest



84,821



74,766

          Total equity



6,401,967



5,578,871








Total Liabilities and Stockholders' Equity


$

13,476,879


$

11,668,250








 

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


Twelve months


ended December 31,


2020


2019





Cash Flows from Operating Activities:




  Net income

$952,790


$827,543

  Adjustments to reconcile net income to net




cash provided by operating activities:




Depreciation & amortization

510,493


490,392

(Gain) loss on sale of assets and businesses

1,957


(7,540)

Stock-based compensation expense

65,837


69,431

Costs related to extinguishment of debt

1,365


0

Provision for asset impairment

0


97,631

  Changes in assets & liabilities, net of effects from




acquisitions and dispositions:




   Accounts receivable

(145,901)


(42,056)

   Accrued interest

(10,028)


209

   Accrued and deferred income taxes

9,593


(25,194)

   Other working capital accounts

124,545


39,664

   Medicare accelerated payments and deferred CARES Act and other grants

698,768


0

   Other assets and deferred charges

(4,555)


(27,205)

   Other

109,167


7,703

   Accrued insurance expense, net of commercial premiums paid

159,223


105,672

   Payments made in settlement of self-insurance claims

(113,085)


(97,781)

          Net cash provided by operating activities

2,360,169


1,438,469





Cash Flows from Investing Activities:




   Property and equipment additions, net of disposals

(731,307)


(634,095)

   Proceeds received from sales of assets and businesses

8,168


9,450

   Acquisition of businesses and property

(52,009)


(8,005)

   Outflows from foreign exchange contracts that hedge our net U.K. investment

(21,740)


(19,763)

   Increase in capital reserves of commercial insurance subsidiary

(100)


0

   Costs incurred for purchase and implementation of information technology applications

(2,902)


(21,418)

   Investment in, and advances to,  joint ventures and other

(2,672)


(14,579)

          Net cash used in investing activities

(802,562)


(688,410)





Cash Flows from Financing Activities:




   Reduction of long-term debt

(962,567)


(57,142)

   Additional borrowings

801,599


39,220

   Financing costs

(10,300)


0

   Repurchase of common shares

(206,719)


(770,504)

   Dividends paid

(17,344)


(53,003)

   Issuance of common stock

12,318


10,806

   Profit distributions to noncontrolling interests

(19,805)


(15,859)

   Purchase of ownership interests by minority members

17,959


1,446

          Net cash used in financing activities

(384,859)


(845,036)





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

739


959

Increase (decrease) in cash, cash equivalents and restricted cash

1,173,487


(94,018)

Cash, cash equivalents and restricted cash, beginning of period

105,667


199,685

Cash, cash equivalents and restricted cash, end of period

$1,279,154


$105,667





Supplemental Disclosures of Cash Flow Information:




  Interest paid

$112,598


$157,406





  Income taxes paid, net of refunds

$286,247


$260,622





  Noncash purchases of property and equipment

$74,854


$63,514









 

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)




























 % Change


 % Change








3 Months ended


12 Months ended

Same Facility:







12/31/2020


12/31/2020











Acute Care Hospitals










Revenues (a)







9.5%


3.0%

Revenues-excludes CARES Act and other grant revenues




-0.4%


-2.2%

Adjusted Admissions







-14.5%


-15.2%

Adjusted Patient Days







-2.2%


-5.5%

Revenue Per Adjusted Admission-excludes CARES Act and other grant revenues

14.9%


14.1%

Revenue Per Adjusted Patient Day-excludes CARES Act and other grant revenues

0.6%


2.4%











Behavioral Health Hospitals










Revenues (b)







3.0%


0.6%

Revenues-excludes CARES Act and other grant revenues




-0.5%


-1.3%

Adjusted Admissions







-9.2%


-8.0%

Adjusted Patient Days







-5.9%


-5.3%

Revenue Per Adjusted Admission-excludes CARES Act and other grant revenues

9.5%


7.3%

Revenue Per Adjusted Patient Day-excludes CARES Act and other grant revenues

5.7%


4.3%











(a) Includes CARES Act and other grant revenues of $155 million and $316 million recorded in the three and twelve-months periods ended December 31, 2020, respectively.

(b) Includes CARES Act and other grant revenues of $45 million and $97 million recorded in the three and twelve-months periods ended December 31, 2020, respectively.





















UHS Consolidated



Three months ended


Twelve months ended




12/31/2020


12/31/2019


12/31/2020


12/31/2019











Revenues



$3,086,935


$2,896,247


$11,558,897


$11,378,259

EBITDA net of NCI



$557,168


$485,139


$1,860,024


$1,706,773

EBITDA Margin net of NCI



18.0%


16.8%


16.1%


15.0%

Adjusted EBITDA net of NCI



$548,863


$465,801


$1,860,010


$1,802,220

Adjusted EBITDA Margin net of NCI


17.8%


16.1%


16.1%


15.8%











Cash Flow From Operations







$2,360,169


$1,438,469

Days Sales Outstanding







55


50

Capital Expenditures 







$731,307


$634,095











Debt







$3,856,251


$3,984,127

UHS' Shareholders Equity







$6,317,146


$5,504,105

Debt / Total Capitalization







37.9%


42.0%

Debt / EBITDA net of NCI (1)







2.07


2.33

Debt / Adjusted EBITDA net of NCI (1)





2.07


2.21

Debt / Cash From Operations (1)






1.63


2.77

Net Debt / EBITDA net of NCI (1) (2)





1.45



Net Debt / Adjusted EBITDA net of NCI (1) (2)




1.45



Net Debt / Cash From Operations (1) (2)





1.14













(1) Latest 4 quarters.










(2) Debt, net of approximately $1.2 billion of short term cash investments as of December 31, 2020.













 

Universal Health Services, Inc.

Acute Care Hospital Services

For the Three and Twelve Months ended

December 31, 2020 and 2019

(in thousands)



































Same Facility Basis - Acute Care Hospital Services




































Three months ended


Three months ended


Twelve months ended


Twelve months ended



December 31, 2020


December 31, 2019


December 31, 2020


December 31, 2019



Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues

Net revenues (a)


$1,709,872


100.0%


$1,561,605


100.0%


$6,238,236


100.0%


$6,054,901


100.0%

Operating charges:

















Salaries, wages and benefits


701,927


41.1%


662,538


42.4%


2,611,143


41.9%


2,559,682


42.3%

Other operating expenses


375,958


22.0%


347,182


22.2%


1,462,627


23.4%


1,365,015


22.5%

Supplies expense


299,376


17.5%


272,438


17.4%


1,081,154


17.3%


1,049,747


17.3%

Depreciation and amortization


83,321


4.9%


78,775


5.0%


318,077


5.1%


305,264


5.0%

Lease and rental expense


19,414


1.1%


15,215


1.0%


69,638


1.1%


60,485


1.0%

Subtotal-operating expenses


1,479,996


86.6%


1,376,148


88.1%


5,542,639


88.8%


5,340,193


88.2%

Income from operations


229,876


13.4%


185,457


11.9%


695,597


11.2%


714,708


11.8%

Interest expense, net


228


0.0%


502


0.0%


1,567


0.0%


1,330


0.0%

Other (income) expense, net


0


-


0


-


0


-


(32)


(0.0)%

Income before income taxes


$229,648


13.4%


$184,955


11.8%


$694,030


11.1%


$713,410


11.8%




















































All Acute Care Hospital Services




































Three months ended


Three months ended


Twelve months ended


Twelve months ended



December 31, 2020


December 31, 2019


December 31, 2020


December 31, 2019



Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues

Net revenues (a)


$1,738,746


100.0%


$1,589,472


100.0%


$6,337,304


100.0%


$6,164,560


100.0%

Operating charges:

















Salaries, wages and benefits


702,099


40.4%


662,538


41.7%


2,611,514


41.2%


2,559,682


41.5%

Other operating expenses


404,966


23.3%


375,049


23.6%


1,561,875


24.6%


1,474,674


23.9%

Supplies expense


299,383


17.2%


272,438


17.1%


1,081,159


17.1%


1,049,747


17.0%

Depreciation and amortization


83,368


4.8%


78,775


5.0%


318,124


5.0%


305,264


5.0%

Lease and rental expense


19,414


1.1%


15,215


1.0%


69,638


1.1%


60,485


1.0%

Subtotal-operating expenses


1,509,230


86.8%


1,404,015


88.3%


5,642,310


89.0%


5,449,852


88.4%

Income from operations


229,516


13.2%


185,457


11.7%


694,994


11.0%


714,708


11.6%

Interest expense, net


228


0.0%


502


0.0%


1,567


0.0%


1,330


0.0%

Other (income) expense, net


0


-


0


-


0


-


(32)


(0.0)%

Income before income taxes


$229,288


13.2%


$184,955


11.6%


$693,427


10.9%


$713,410


11.6%


















 

(a) Includes CARES Act and other grant revenues of $155 million and $316 million recorded in the three and twelve-months periods ended December 31, 2020, respectively.


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, 2020.


















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 Twelve Months ended

December 31, 2020 and 2019

(in thousands)



































Same Facility - Behavioral Health Care Services




































Three months ended


Three months ended


Twelve months ended


Twelve months ended



December 31, 2020


December 31, 2019


December 31, 2020


December 31, 2019



Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues

Net revenues (a)


$1,322,752


100.0%


$1,284,273


100.0%


$5,124,358


100.0%


$5,092,071


100.0%

Operating charges:

















Salaries, wages and benefits


697,738


52.7%


684,542


53.3%


2,722,041


53.1%


2,711,813


53.3%

Other operating expenses


236,872


17.9%


238,404


18.6%


931,850


18.2%


952,714


18.7%

Supplies expense


50,831


3.8%


51,066


4.0%


204,658


4.0%


199,726


3.9%

Depreciation and amortization


46,394


3.5%


44,251


3.4%


176,652


3.4%


167,340


3.3%

Lease and rental expense


10,678


0.8%


10,708


0.8%


42,532


0.8%


42,956


0.8%

Subtotal-operating expenses


1,042,513


78.8%


1,028,971


80.1%


4,077,733


79.6%


4,074,549


80.0%

Income from operations


280,239


21.2%


255,302


19.9%


1,046,625


20.4%


1,017,522


20.0%

Interest expense, net


368


0.0%


357


0.0%


1,447


0.0%


1,460


0.0%

Other (income) expense, net


(1,277)


(0.1)%


(1,438)


(0.1)%


1,060


0.0%


404


0.0%

Income before income taxes


$281,148


21.3%


$256,383


20.0%


$1,044,118


20.4%


$1,015,658


19.9%




















































All Behavioral Health Care Services




































Three months ended


Three months ended


Twelve months ended


Twelve months ended



December 31, 2020


December 31, 2019


December 31, 2020


December 31, 2019



Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues


Amount


% of Net
Revenues

Net revenues (a)


$1,343,899


100.0%


$1,311,623


100.0%


$5,208,722


100.0%


$5,210,063


100.0%

Operating charges:

















Salaries, wages and benefits


699,906


52.1%


690,140


52.6%


2,727,129


52.4%


2,739,871


52.6%

Other operating expenses


258,727


19.3%


261,483


19.9%


1,023,733


19.7%


1,152,733


22.1%

Supplies expense


50,850


3.8%


51,305


3.9%


204,711


3.9%


201,114


3.9%

Depreciation and amortization


47,931


3.6%


45,370


3.5%


182,012


3.5%


172,697


3.3%

Lease and rental expense


11,354


0.8%


11,614


0.9%


45,505


0.9%


46,799


0.9%

Subtotal-operating expenses


1,068,768


79.5%


1,059,912


80.8%


4,183,090


80.3%


4,313,214


82.8%

Income from operations


275,131


20.5%


251,711


19.2%


1,025,632


19.7%


896,849


17.2%

Interest expense, net


415


0.0%


357


0.0%


1,599


0.0%


1,460


0.0%

Other (income) expense, net


(1,561)


(0.1)%


(1,438)


(0.1)%


776


0.0%


(5,576)


(0.1)%

Income before income taxes


$276,277


20.6%


$252,792


19.3%


$1,023,257


19.6%


$900,965


17.3%

(a) Includes CARES Act and other grant revenues of $45 million and $97 million recorded in the three and twelve-months periods ended December 31, 2020, respectively.


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, 2020.


















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

December 31, 2020 and 2019



























AS REPORTED:









































ACUTE


BEHAVIORAL HEALTH



12/31/20


12/31/19


%  change


12/31/20


12/31/19


%  change














Hospitals owned and leased


26


26


0.0%


334


327


2.1%

Average licensed beds


6,476


6,387


1.4%


23,859


23,648


0.9%

Average available beds


6,304


6,215


1.4%


23,759


23,545


0.9%

Patient days


386,491


367,313


5.2%


1,522,352


1,612,906


-5.6%

Average daily census


4,201.0


3,992.5


5.2%


16,547.3


17,531.6


-5.6%

Occupancy-licensed beds


64.9%


62.5%


3.8%


69.4%


74.1%


-6.4%

Occupancy-available beds


66.6%


64.2%


3.7%


69.6%


74.5%


-6.5%

Admissions


72,877


79,156


-7.9%


109,514


120,264


-8.9%

Length of stay


5.3


4.6


14.3%


13.4


13.4


0.0%














Inpatient revenue


$7,866,580


$7,210,451


9.1%


$2,420,468


$2,532,774


-4.4%

Outpatient revenue


4,067,550


4,529,430


-10.2%


244,286


273,775


-10.8%

Total patient revenue


11,934,130


11,739,881


1.7%


2,664,754


2,806,549


-5.1%

Other revenue


275,271


121,482


126.6%


109,554


60,371


81.5%

Gross hospital revenue


12,209,401


11,861,363


2.9%


2,774,308


2,866,920


-3.2%

Total deductions


10,470,655


10,271,891


1.9%


1,430,409


1,555,297


-8.0%

Net hospital revenue


$1,738,746


$1,589,472


9.4%


$1,343,899


$1,311,623


2.5%



























SAME FACILITY:




























ACUTE


BEHAVIORAL HEALTH



12/31/20


12/31/19


%  change


12/31/20


12/31/19


%  change














Hospitals owned and leased


26


26


0.0%


312


312


0.0%

Average licensed beds


6,476


6,387


1.4%


23,665


23,361


1.3%

Average available beds


6,304


6,215


1.4%


23,565


23,258


1.3%

Patient days


386,491


367,313


5.2%


1,515,912


1,599,852


-5.2%

Average daily census


4,201.0


3,992.5


5.2%


16,477.3


17,389.7


-5.2%

Occupancy-licensed beds


64.9%


62.5%


3.8%


69.6%


74.4%


-6.5%

Occupancy-available beds


66.6%


64.2%


3.7%


69.9%


74.8%


-6.5%

Admissions


72,877


79,156


-7.9%


108,854


119,052


-8.6%

Length of stay


5.3


4.6


14.3%


13.9


13.4


3.6%














 

Universal Health Services, Inc.

Selected Hospital Statistics

For the Twelve Months ended

December 31, 2020 and 2019



























AS REPORTED:









































ACUTE


BEHAVIORAL HEALTH



12/31/20


12/31/19


%  change


12/31/20


12/31/19


%  change














Hospitals owned and leased


26


26


0.0%


334


327


2.1%

Average licensed beds


6,457


6,379


1.2%


23,661


23,812


-0.6%

Average available beds


6,285


6,205


1.3%


23,559


23,711


-0.6%

Patient days


1,458,321


1,451,847


0.4%


6,142,823


6,487,707


-5.3%

Average daily census


3,984.5


3,977.7


0.2%


16,783.7


17,774.5


-5.6%

Occupancy-licensed beds


61.7%


62.4%


-1.0%


70.9%


74.6%


-5.0%

Occupancy-available beds


63.4%


64.1%


-1.1%


71.2%


75.0%


-5.0%

Admissions


286,535


317,983


-9.9%


448,870


488,367


-8.1%

Length of stay


5.1


4.6


11.5%


13.7


13.3


3.0%














Inpatient revenue


$30,562,093


$28,430,922


7.5%


$9,718,934


$10,100,903


-3.8%

Outpatient revenue


16,272,520


17,666,629


-7.9%


963,799


1,066,704


-9.6%

Total patient revenue


46,834,613


46,097,551


1.6%


10,682,733


11,167,607


-4.3%

Other revenue


788,694


458,851


71.9%


332,766


228,712


45.5%

Gross hospital revenue


47,623,307


46,556,402


2.3%


11,015,499


11,396,319


-3.3%

Total deductions


41,286,003


40,391,842


2.2%


5,806,777


6,186,256


-6.1%

Net hospital revenue


$6,337,304


$6,164,560


2.8%


$5,208,722


$5,210,063


0.0%



























SAME FACILITY:




























ACUTE


BEHAVIORAL HEALTH



12/31/20


12/31/19


%  change


12/31/20


12/31/19


%  change














Hospitals owned and leased


26


26


0.0%


312


312


0.0%

Average licensed beds


6,457


6,379


1.2%


23,497


23,340


0.7%

Average available beds


6,285


6,205


1.3%


23,395


23,239


0.7%

Patient days


1,458,321


1,451,847


0.4%


6,114,762


6,423,197


-4.8%

Average daily census


3,984.5


3,977.7


0.2%


16,707.0


17,597.8


-5.1%

Occupancy-licensed beds


61.7%


62.4%


-1.0%


71.1%


75.4%


-5.7%

Occupancy-available beds


63.4%


64.1%


-1.1%


71.4%


75.7%


-5.7%

Admissions


286,535


317,983


-9.9%


446,420


482,660


-7.5%

Length of stay


5.1


4.6


11.5%


13.7


13.3


2.9%














 

Universal Health Services, Inc.

Supplemental Non-GAAP Disclosures

2021 Operating Results Forecast

(in thousands, except per share amounts)
























Forecast For The Year Ending December 31, 2021






% Net




% Net




Low


revenues


High


revenues

Net revenues (a)



$12,125,000




$12,361,000













Adjusted net income attributable to UHS (a) (b)

$856,090




$940,813













 Depreciation and amortization



533,231




533,231



 Interest expense



93,498




93,498



 Other (income) expense, net



(7,607)




(7,607)



 Provision for income taxes



262,824




289,068



Adjusted EBITDA net of NCI (a) (c)


$1,738,036


14.3%


$1,849,003


15.0%











Adjusted net income attributable to UHS, per diluted share (a) (b)

$10.05




$11.05













Shares used in computing diluted earnings per share

84,865




84,865













(a)  The 2021 forecasted revenues and other amounts exclude any favorable impact that may result from funds received in connection with various governmental stimulus programs, most notably the CARES Act. The impact of the COVID-19 pandemic, which began during the second half of March, 2020, has had a material unfavorable effect on our operations and financial results since that time, before giving effect to the revenues recorded in connection with the CARES Act and other governmental grants. The extent to which the COVID-19 pandemic and measures taken in response thereto impact our business, results of operations and financial condition will depend on numerous factors and future developments, most of which are beyond our control or ability to predict. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We are not able to fully quantify the impact that these factors will have on our future financial results, but expect developments related to the COVID-19 pandemic to materially affect our financial performance in 2021 and our 2021 operating results forecast.












(b) Adjusted net income attributable to UHS/per diluted share are non-GAAP financial measures.  The 2021 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 increases/decreases in the market value of shares of certain marketable securities held for investment and classified as available for sale, our adoption of ASU 2016-09, 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, impairment of 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 included assumptions. It is also subject to certain conditions including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.












(c) 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 our Report on Form 10-K for the year ended December 31, 2020.

 

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SOURCE Universal Health Services, Inc.