Universal Health Services, Inc. Reports 2020 Third Quarter Financial Results
Universal Health Services reported a net income of $241.3 million, or $2.82 per diluted share, for Q3 2020, up from $97.2 million, or $1.10 per diluted share, in Q3 2019. Net revenues increased by 3.2% to $2.913 billion. Adjusted net income was $246.5 million, benefitting from $28 million in net revenues from the California Medicaid program. However, COVID-19 impacted operations, reducing patient volumes significantly. For the nine months ended September 30, 2020, net income was $635.2 million, slightly up from $569.7 million for the same period in 2019.
- Net income for Q3 2020 rose to $241.3 million from $97.2 million in Q3 2019.
- Adjusted net income increased to $246.5 million, reflecting an effective revenue strategy.
- Net revenues grew to $2.913 billion, a 3.2% increase compared to Q3 2019.
- COVID-19 severely reduced patient volumes, impacting financial results.
- Adjusted admissions decreased 17.3% in Q3 versus the previous year.
- Total net revenues for the first nine months of 2020 slightly decreased to $8.472 billion from $8.482 billion in 2019.
KING OF PRUSSIA, Pa., Oct. 29, 2020 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was
As reflected on the Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our adjusted net income attributable to UHS during the third quarter of 2020 was
Included in our reported and adjusted net income attributable to UHS during the three-month period ended September 30, 2020 were the following:
- A favorable impact of approximately
$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 the first nine months of 2020 and$17 million were attributable to prior years, and; - An unfavorable impact of approximately
$4.7 million , or$0.06 per diluted share, resulting from a reversal of previously recorded grant income revenues of approximately$5 million , as provided for by the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), as discussed below in CARES Act and Other Governmental Grants and Medicare Accelerated Payments.
As reflected on the Supplemental Schedule, included in our reported results during the third quarter of 2020, was a net aggregate unfavorable after-tax impact of
As reflected on the Supplemental Schedule, included in our reported results during the third quarter of 2019, is an aggregate net unfavorable after-tax impact of
Included in our reported and our adjusted net income attributable to UHS during the third quarter of 2019 is a pre-tax unrealized loss of
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
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. Patient volumes at both our acute care and behavioral health care facilities were most significantly reduced in March and April. Our acute care and behavioral health facilities began experiencing gradual and continued improvement in patient volumes since May as various states eased stay-at-home restrictions and acute care hospitals were permitted to resume elective surgeries and procedures. Although many of our acute care and behavioral health facilities are located in states that have continued to experience intermittent increases in COVID-19 infections, non-COVID-19 patient volumes at our hospitals have not been as dramatically impacted in recent months by increases experienced from time-to-time in COVID-19 patient volumes. We believe that the adverse impact that COVID-19 will have on our future operations and financial results will depend upon many factors, most of which are beyond our capability to control or predict.
Consolidated Results of Operations, As Reported and As Adjusted – Nine-month periods ended September 30, 2020 and 2019:
Reported net income attributable to UHS was
As reflected on the Supplemental Schedule, our adjusted net income attributable to UHS during the nine-month period ended September 30, 2020 was
Our reported and adjusted net income attributable to UHS during the nine-month period ended September 30, 2020 included the following:
- A favorable impact of
$157.2 million , or$1.84 per diluted share, resulting from the recording of approximately$213 million of grant income revenues, as discussed below in CARES Act and Other Governmental Grants and Medicare Accelerated Payments, and; - A favorable impact of
$21.4 million , or$0.25 per diluted share, resulting from the above-mentioned$28 million of net revenues recorded during the third quarter of 2020 in connection with the California Medicaid supplemental payment program.
As reflected on the Supplemental Schedule, included in our reported results during the nine-month period ended September 30, 2020, was a net aggregate unfavorable after-tax impact of
As reflected on the Supplemental Schedule, included in our reported results during the nine-month period ended September 30, 2019, is an aggregate net unfavorable after-tax impact of
Included in our reported and our adjusted net income attributable to UHS during the nine-month period ended September 30, 2019 is a pre-tax unrealized loss of
As calculated on the attached Supplemental Schedule, our EBITDA net of NCI was
Acute Care Services – Three and nine-month periods ended September 30, 2020 and 2019:
During the third quarter of 2020, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) decreased
During the nine-month period ended September 30, 2020, at our acute care hospitals on a same facility basis, adjusted admissions decreased
Behavioral Health Care Services – Three and nine-month periods ended September 30, 2020 and 2019:
During the third quarter of 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased
During the nine-month period ended September 30, 2020, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased
Net Cash Provided by Operating Activities and Liquidity:
Net Cash Provided by Operating Activities:
For the nine months ended September 30, 2020, our net cash provided by operating activities increased to
The
Liquidity:
As of September 30, 2020, there were no borrowings outstanding pursuant to our
In addition, as of September 30, 2020, we had approximately
CARES Act and Other Governmental Grants and Medicare Accelerated Payments:
As of September 30, 2020, we have received an aggregate of
- Approximately
$396 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 September 30, 2020, was an unfavorable impact of
$4.7 million , or$0.06 per diluted share, resulting from a reversal of previously recorded CARES Act and other grant income revenues of approximately$5 million . During the third quarter of 2020, approximately$4 million of grant income revenues were recorded by our acute care services, while our behavioral health services reversed approximately$9 million of previously recorded CARES Act and other grant income revenues. - Included in our reported and adjusted net income attributable to UHS for the nine-month period ended September 30, 2020, was the favorable impact of
$157.2 million , or$1.84 per diluted share, resulting from the recording of approximately$213 million of CARES Act and other grant income revenues. Approximately$161 million of the grant income revenues were attributable to our acute care services and approximately$52 million were attributable to our behavioral health care services. - As of September 30, 2020, approximately
$183 million of these funds remain in the Medicare accelerated payments and deferred CARES Act and other grants liability account in our condensed consolidated balance sheet. - Approximately
$695 million of Medicare accelerated payments received. 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 nine-month periods ended September 30, 2020 in connection with receipt of these funds. As of September 30, 2020, the funds are included in the Medicare accelerated payments and deferred CARES Act and other grants liability account in our condensed balance sheet.
We recognized grant income net revenues related to the CARES Act and other governmental grant funding based on information available at September 30, 2020 based upon laws and regulations governing the funding as well as interpretations issued by the Department of Health and Human Services ("HHS"). In October 2020, HHS issued new reporting requirements for the CARES Act funding. Due to these new reporting requirements and various interpretations, there is at least a reasonable possibility that amounts recorded under CARES Act funding will change in future periods.
Update on Previously Disclosed 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.
Since that time, our information technology applications have been restored at our acute care and behavioral health hospitals, as well as at the corporate level, thereby re-establishing connections to all major systems and applications, including electronic medical records, laboratory and pharmacy systems. With the back-loading of data substantially complete at this point, our hospitals are resuming normal operations.
We have worked diligently with our information technology security partners to restore our information technology infrastructure and business operations as quickly as possible. In parallel, we immediately began investigating the nature and potential impact of the security incident and engaged third-party information technology and forensic vendors to assist. Although the investigation remains ongoing, no evidence of unauthorized access, copying or misuse of any patient or employee data has been identified to date.
Conference call information:
We will hold a conference call for investors and analysts at 10:00 a.m. eastern time on October 30, 2020. 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
Our operating philosophy is as effective today as it was 40 years ago, enabling us to provide compassionate care to our patients and their loved ones. Our strategy includes building or acquiring high quality hospitals in rapidly growing markets, investing in the people and equipment needed to allow each facility to thrive, and becoming the leading healthcare provider in each community we serve.
Headquartered in King of Prussia, PA, UHS has more than 90,000 employees and through its subsidiaries operates 26 acute care hospitals, 330 behavioral health facilities, 41 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 37 U.S. states, Washington, D.C., Puerto Rico and the United Kingdom. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT). For additional information on the Company, visit our web site: http://www.uhsinc.com.
This press release contains forward-looking statements based on current management expectations. Numerous factors, including those disclosed herein, those related to the anticipated impact of COVID-19 on our operations and financial results, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended June 30, 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 2020. In addition, although we are unable to quantify the ultimate impact of the above-mentioned information technology security incident that we experienced in late September, 2020, the incident could have an adverse effect on our future results of operations.
We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA net of NCI and Adjusted EBITDA net of NCI, which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect of material items impacting our net income attributable to UHS, such as, our adoption of ASU 2016-09, unrealized gains/losses resulting from changes in the market value of shares of certain marketable securities held for investment and classified as available for sale, and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of long-lived and intangible assets, changes in the reserve established in connection with our discussions with the Department of Justice, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. To obtain a complete understanding of our financial performance these measures should be examined in connection with net income attributable to UHS, as determined in accordance with GAAP, and as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Reports on Form 10-K for the year ended December 31, 2019 and Form 10-Q for the quarterly period ended June 30, 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 | Nine months | ||||||
ended September 30, | ended September 30, | ||||||
2020 | 2019 | 2020 | 2019 | ||||
Net revenues | |||||||
Operating charges: | |||||||
Salaries, wages and benefits | 1,406,348 | 1,408,226 | 4,147,027 | 4,157,253 | |||
Other operating expenses | 666,665 | 762,174 | 1,982,202 | 2,079,518 | |||
Supplies expense | 335,409 | 313,936 | 936,808 | 927,256 | |||
Depreciation and amortization | 125,961 | 121,528 | 376,563 | 362,736 | |||
Lease and rental expense | 28,488 | 27,660 | 84,967 | 80,320 | |||
2,562,871 | 2,633,524 | 7,527,567 | 7,607,083 | ||||
Income from operations | 349,670 | 188,929 | 944,395 | 874,929 | |||
Interest expense, net | 24,575 | 41,447 | 86,399 | 123,574 | |||
Other (income) expense, net | 1,831 | 9,407 | 8,291 | 6,176 | |||
Income before income taxes | 323,264 | 138,075 | 849,705 | 745,179 | |||
Provision for income taxes | 79,172 | 37,205 | 204,649 | 165,646 | |||
Net income | 244,092 | 100,870 | 645,056 | 579,533 | |||
Less: Net income attributable to | |||||||
noncontrolling interests ("NCI") | 2,813 | 3,680 | 9,811 | 9,855 | |||
Net income attributable to UHS | |||||||
Basic earnings per share attributable to UHS (a) | |||||||
Diluted earnings per share attributable to UHS (a) | |||||||
Universal Health Services, Inc. | |||||||
Footnotes to Consolidated Statements of Income | |||||||
(in thousands, except per share amounts) | |||||||
(unaudited) | |||||||
Three months | Nine months | ||||||
(a) Earnings per share calculation: | ended September 30, | ended September 30, | |||||
2020 | 2019 | 2020 | 2019 | ||||
Basic and diluted: | |||||||
Net income attributable to UHS | |||||||
Less: Net income attributable to unvested restricted share grants | (790) | (243) | (1,987) | (1,414) | |||
Net income attributable to UHS - basic and diluted | |||||||
Weighted average number of common shares - basic | 84,672 | 87,952 | 85,172 | 89,288 | |||
Basic earnings per share attributable to UHS: | |||||||
Weighted average number of common shares | 84,672 | 87,952 | 85,172 | 89,288 | |||
Add: Other share equivalents | 575 | 403 | 415 | 231 | |||
Weighted average number of common shares and equiv. - diluted | 85,247 | 88,355 | 85,587 | 89,519 | |||
Diluted earnings per share attributable to UHS: | |||||||
Universal Health Services, Inc. | |||||||
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule") | |||||||
For the Three Months ended September 30, 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 | ||||
September 30, 2020 | revenues | September 30, 2019 | revenues | ||||
Net income attributable to UHS | |||||||
Depreciation and amortization | 125,961 | 121,528 | |||||
Interest expense, net | 24,575 | 41,447 | |||||
Provision for income taxes | 79,172 | 37,205 | |||||
EBITDA net of NCI | |||||||
Other (income) expense, net | 1,831 | 9,407 | |||||
Provision for asset impairment | - | 97,631 | |||||
Adjusted EBITDA net of NCI | |||||||
Net revenues | |||||||
Calculation of Adjusted Net Income Attributable to UHS | |||||||
Three months ended | Three months ended | ||||||
September 30, 2020 | September 30, 2019 | ||||||
Per | Per | ||||||
Amount | Diluted Share | Amount | Diluted Share | ||||
Net income attributable to UHS | |||||||
Plus/minus after-tax adjustments: | |||||||
Unrealized loss on marketable securities held for sale | 2,066 | 0.02 | - | - | |||
Increase in DOJ Reserve and related income taxes | - | - | 6,214 | 0.07 | |||
Impact of ASU 2016-09 | 3,137 | 0.04 | (1,724) | (0.02) | |||
Provision for asset impairment | - | - | 74,583 | 0.84 | |||
Subtotal adjustments | 5,203 | 0.06 | 79,073 | 0.89 | |||
Adjusted net income attributable to UHS | |||||||
Universal Health Services, Inc. | |||||||
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule") | |||||||
For the Nine Months ended September 30, 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") | |||||||
Nine months ended | % Net | Nine months ended | % Net | ||||
September 30, 2020 | revenues | September 30, 2019 | revenues | ||||
Net income attributable to UHS | |||||||
Depreciation and amortization | 376,563 | 362,736 | |||||
Interest expense, net | 86,399 | 123,574 | |||||
Provision for income taxes | 204,649 | 165,646 | |||||
EBITDA net of NCI | |||||||
Other (income) expense, net | 8,291 | 6,176 | |||||
Increase in DOJ Reserve | - | 10,978 | |||||
Provision for asset impairment | - | 97,631 | |||||
Adjusted EBITDA net of NCI | |||||||
Net revenues | |||||||
Calculation of Adjusted Net Income Attributable to UHS | |||||||
Nine months ended | Nine months ended | ||||||
September 30, 2020 | September 30, 2019 | ||||||
Per | Per | ||||||
Amount | Diluted Share | Amount | Diluted Share | ||||
Net income attributable to UHS | |||||||
Plus/minus after-tax adjustments: | |||||||
Unrealized loss on marketable securities held for sale | 7,193 | 0.08 | - | - | |||
Increase in DOJ Reserve and related income taxes | - | - | 14,583 | 0.16 | |||
Impact of ASU 2016-09 | 4,412 | 0.05 | (12,122) | (0.14) | |||
Provision for asset impairment | - | - | 74,583 | 0.84 | |||
Subtotal adjustments | 11,605 | 0.13 | 77,044 | 0.86 | |||
Adjusted net income attributable to UHS | |||||||
Universal Health Services, Inc. | |||||||
Consolidated Statements of Comprehensive Income | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three months | Nine months | ||||||
ended September 30, | ended September 30, | ||||||
2020 | 2019 | 2020 | 2019 | ||||
Net income | |||||||
Other comprehensive income (loss): | |||||||
Unrealized derivative gains (losses) on cash flow hedges | 0 | 0 | 0 | (3,925) | |||
Foreign currency translation adjustment | 14,245 | (10,089) | (18,280) | (19,192) | |||
Other comprehensive income (loss) before tax | 14,245 | (10,089) | (18,280) | (23,117) | |||
Income tax expense (benefit) related to items of other comprehensive income (loss) | 302 | 174 | (908) | (676) | |||
Total other comprehensive income (loss), net of tax | 13,943 | (10,263) | (17,372) | (22,441) | |||
Comprehensive income | 258,035 | 90,607 | 627,684 | 557,092 | |||
Less: Comprehensive income attributable to noncontrolling interests | 2,813 | 3,680 | 9,811 | 9,855 | |||
Comprehensive income attributable to UHS | |||||||
Universal Health Services, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
September 30, | December 31, | ||||||
2020 | 2019 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,101,230 | $ | 61,268 | |||
Accounts receivable, net | 1,574,751 | 1,560,847 | |||||
Supplies | 176,105 | 159,889 | |||||
Other current assets | 143,072 | 133,930 | |||||
Total current assets | 2,995,158 | 1,915,934 | |||||
Property and equipment | 9,652,778 | 9,106,377 | |||||
Less: accumulated depreciation | (4,403,941) | (4,089,679) | |||||
5,248,837 | 5,016,698 | ||||||
Other assets: | |||||||
Goodwill | 3,854,265 | 3,869,760 | |||||
Deferred income taxes | 19,936 | 16,189 | |||||
Right of use assets-operating leases | 330,172 | 326,518 | |||||
Deferred charges | 5,136 | 6,373 | |||||
Other | 556,258 | 516,778 | |||||
Total Assets | $ | 13,009,762 | $ | 11,668,250 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 94,504 | $ | 87,550 | |||
Accounts payable and other liabilities | 1,625,262 | 1,272,374 | |||||
Medicare accelerated payments and deferred CARES Act and other grants | 878,480 | 0 | |||||
Legal reserves | 5,426 | 144,509 | |||||
Operating lease liabilities | 57,219 | 56,442 | |||||
Federal and state taxes | 7,335 | 2,515 | |||||
Total current liabilities | 2,668,226 | 1,563,390 | |||||
Other noncurrent liabilities | 488,457 | 329,932 | |||||
Operating lease liabilities noncurrent | 274,236 | 270,076 | |||||
Long-term debt | 3,514,673 | 3,896,577 | |||||
Deferred income taxes | 24,895 | 25,071 | |||||
Redeemable noncontrolling interest | 4,177 | 4,333 | |||||
UHS common stockholders' equity | 5,962,788 | 5,504,105 | |||||
Noncontrolling interest | 72,310 | 74,766 | |||||
Total equity | 6,035,098 | 5,578,871 | |||||
Total Liabilities and Stockholders' Equity | $ | 13,009,762 | $ | 11,668,250 | |||
Universal Health Services, Inc. | |||
Consolidated Statements of Cash Flows | |||
(in thousands) | |||
(unaudited) | |||
Nine months | |||
ended September 30, | |||
2020 | 2019 | ||
Cash Flows from Operating Activities: | |||
Net income | |||
Adjustments to reconcile net income to net | |||
cash provided by operating activities: | |||
Depreciation & amortization | 376,563 | 362,736 | |
(Gain) loss on sale of assets and businesses | 2,124 | (5,982) | |
Stock-based compensation expense | 49,928 | 52,167 | |
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 | 11,431 | (37,332) | |
Accrued interest | (10,526) | (2,962) | |
Accrued and deferred income taxes | (2,095) | (53,714) | |
Other working capital accounts | 119,948 | 90,262 | |
Medicare accelerated payments and deferred CARES Act and other grants | 878,480 | 0 | |
Other assets and deferred charges | 1,271 | 15,237 | |
Other | 115,431 | (663) | |
Accrued insurance expense, net of commercial premiums paid | 113,571 | 76,245 | |
Payments made in settlement of self-insurance claims | (84,390) | (68,046) | |
Net cash provided by operating activities | 2,218,157 | 1,105,112 | |
Cash Flows from Investing Activities: | |||
Property and equipment additions, net of disposals | (546,656) | (480,247) | |
Proceeds received from sales of assets and businesses | 7,851 | 7,497 | |
Acquisition of businesses and property | (52,009) | 0 | |
Inflows from foreign exchange contracts that hedge our net U.K. investment | 22,453 | 34,484 | |
Costs incurred for purchase and implementation of information technology applications | (5,345) | (18,240) | |
Investment in, and advances to, joint ventures and other | (997) | (11,949) | |
Net cash used in investing activities | (574,703) | (468,455) | |
Cash Flows from Financing Activities: | |||
Reduction of long-term debt | (1,173,590) | (68,175) | |
Additional borrowings | 803,197 | 15,100 | |
Financing costs | (8,256) | 0 | |
Repurchase of common shares | (200,098) | (587,976) | |
Dividends paid | (17,344) | (35,556) | |
Issuance of common stock | 9,288 | 8,248 | |
Profit distributions to noncontrolling interests | (15,175) | (11,887) | |
Purchase of ownership interests from minority members | (548) | 0 | |
Net cash used in financing activities | (602,526) | (680,246) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (706) | (1,259) | |
Increase (decrease) in cash, cash equivalents and restricted cash | 1,040,222 | (44,848) | |
Cash, cash equivalents and restricted cash, beginning of period | 105,667 | 199,685 | |
Cash, cash equivalents and restricted cash, end of period | |||
Supplemental Disclosures of Cash Flow Information: | |||
Interest paid | |||
Income taxes paid, net of refunds | |||
Noncash purchases of property and equipment | |||
Right-of-use assets obtained in exchange for lease obligations | |||
Universal Health Services, Inc. | |||||||||
Supplemental Statistical Information | |||||||||
(unaudited) | |||||||||
% Change | % Change | ||||||||
Quarter ended | 9 months ended | ||||||||
Same Facility: | 9/30/2020 | 9/30/2020 | |||||||
Acute Care Hospitals | |||||||||
Revenues (a) | |||||||||
Revenues-excludes CARES Act and other grant income | - | ||||||||
Adjusted Admissions | - | - | |||||||
Adjusted Patient Days | - | - | |||||||
Revenue Per Adjusted Admission-excludes CARES Act and other grant income | |||||||||
Revenue Per Adjusted Patient Day-excludes CARES Act and other grant income | |||||||||
Behavioral Health Hospitals | |||||||||
Revenues (b) | - | ||||||||
Revenues-excludes CARES Act and other grant income | - | ||||||||
Adjusted Admissions | - | - | |||||||
Adjusted Patient Days | - | - | |||||||
Revenue Per Adjusted Admission-excludes CARES Act and other grant income | |||||||||
Revenue Per Adjusted Patient Day-excludes CARES Act and other grant income | |||||||||
(a) Includes CARES Act and other grant income of | |||||||||
(b) Includes the reversal of CARES Act and other grant income of | |||||||||
UHS Consolidated | third quarter ended | nine months ended | |||||||
9/30/2020 | 9/30/2019 | 9/30/2020 | 9/30/2019 | ||||||
Revenues | |||||||||
EBITDA net of NCI | |||||||||
EBITDA Margin net of NCI | |||||||||
Adjusted EBITDA net of NCI | |||||||||
Adjusted EBITDA Margin net of NCI | |||||||||
Cash Flow From Operations | |||||||||
Days Sales Outstanding | 51 | 50 | |||||||
Capital Expenditures | |||||||||
Debt | |||||||||
UHS' Shareholders Equity | |||||||||
Debt / Total Capitalization | |||||||||
Debt / EBITDA net of NCI (1) | 2.02 | 2.50 | |||||||
Debt / Adjusted EBITDA net of NCI (1) | 2.03 | 2.21 | |||||||
Debt / Cash From Operations (1) | 1.41 | 2.76 | |||||||
Net Debt / EBITDA net of NCI (1) (2) | 1.40 | ||||||||
Net Debt / Adjusted EBITDA net of NCI (1) (2) | 1.41 | ||||||||
Net Debt / Cash From Operations (1) (2) | 0.98 | ||||||||
(1) Latest 4 quarters | |||||||||
(2) Debt, net of | |||||||||
Universal Health Services, Inc. | ||||||||||||||||
Acute Care Hospital Services | ||||||||||||||||
For the Three and Nine Months ended | ||||||||||||||||
September 30, 2020 and 2019 | ||||||||||||||||
(in thousands) | ||||||||||||||||
Same Facility Basis - Acute Care Hospital Services | ||||||||||||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
Amount | % of Net | Amount | % of Net | Amount | % of Net | Amount | % of Net | |||||||||
Net revenues (a) | ||||||||||||||||
Operating charges: | ||||||||||||||||
Salaries, wages and benefits | 660,610 | 653,792 | 1,909,216 | 1,897,144 | ||||||||||||
Other operating expenses | 366,754 | 344,681 | 1,086,669 | 1,017,833 | ||||||||||||
Supplies expense | 283,829 | 263,462 | 781,778 | 777,309 | ||||||||||||
Depreciation and amortization | 78,388 | 76,318 | 234,756 | 226,489 | ||||||||||||
Lease and rental expense | 17,641 | 16,235 | 50,224 | 45,270 | ||||||||||||
Subtotal-operating expenses | 1,407,222 | 1,354,488 | 4,062,643 | 3,964,045 | ||||||||||||
Income from operations | 177,920 | 148,403 | 465,721 | 529,251 | ||||||||||||
Interest expense, net | 205 | 305 | 1,339 | 828 | ||||||||||||
Other (income) expense, net | - | - | 13 | - | - | (32) | (0.0)% | |||||||||
Income before income taxes | ||||||||||||||||
All Acute Care Hospital Services | ||||||||||||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
Amount | % of Net | Amount | % of Net | Amount | % of Net | Amount | % of Net | |||||||||
Net revenues (a) | ||||||||||||||||
Operating charges: | ||||||||||||||||
Salaries, wages and benefits | 660,694 | 653,792 | 1,909,415 | 1,897,144 | ||||||||||||
Other operating expenses | 391,642 | 370,325 | 1,156,909 | 1,099,625 | ||||||||||||
Supplies expense | 283,827 | 263,462 | 781,776 | 777,309 | ||||||||||||
Depreciation and amortization | 78,388 | 76,318 | 234,756 | 226,489 | ||||||||||||
Lease and rental expense | 17,641 | 16,235 | 50,224 | 45,270 | ||||||||||||
Subtotal-operating expenses | 1,432,192 | 1,380,132 | 4,133,080 | 4,045,837 | ||||||||||||
Income from operations | 177,811 | 148,403 | 465,478 | 529,251 | ||||||||||||
Interest expense, net | 205 | 305 | 1,339 | 828 | ||||||||||||
Other (income) expense, net | - | - | 13 | - | - | (32) | (0.0)% | |||||||||
Income before income taxes | ||||||||||||||||
(a) Includes CARES Act and other grant income of | ||||||||||||||||
We believe that providing our results on a "Same Facility" basis (which is a non-GAAP measure), which includes the operating results for facilities and businesses operated in both the current year and prior year periods, is helpful to our investors as a measure of our operating performance. Our Same Facility results also neutralize (if applicable), the effect of material items that are nonrecurring or non-operational in nature including items such as, but not limited to, reserves for various matters, settlements, legal judgments and lawsuits, cost related to extinguishment of debt, gains/losses on sales of assets and businesses, impairments of long-lived and intangible assets and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. Our Same Facility basis results exclude from net revenues and other operating expenses, provider tax assessments incurred in each period. However, these provider tax assessments are included in net revenues and other operating expenses as reflected in the table under All Acute Care Hospital Services. The provider tax assessments had no impact on the income before income taxes as reflected on the above tables since the amounts offset between net revenues and other operating expenses. To obtain a complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income as determined in accordance with GAAP and as presented herein and the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2019 and Form 10-Q for the quarter ended June 30, 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 Nine Months ended | ||||||||||||||||
September 30, 2020 and 2019 | ||||||||||||||||
(in thousands) | ||||||||||||||||
Same Facility - Behavioral Health Care Services | ||||||||||||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
Amount | % of Net | Amount | % of Net | Amount | % of Net | Amount | % of Net | |||||||||
Net revenues (a) | ||||||||||||||||
Operating charges: | ||||||||||||||||
Salaries, wages and benefits | 683,441 | 683,345 | 2,024,303 | 2,027,271 | ||||||||||||
Other operating expenses | 230,060 | 239,548 | 694,978 | 714,310 | ||||||||||||
Supplies expense | 51,811 | 50,336 | 153,827 | 148,660 | ||||||||||||
Depreciation and amortization | 43,985 | 41,595 | 130,258 | 123,089 | ||||||||||||
Lease and rental expense | 10,067 | 10,910 | 31,854 | 32,248 | ||||||||||||
Subtotal-operating expenses | 1,019,364 | 1,025,734 | 3,035,220 | 3,045,578 | ||||||||||||
Income from operations | 257,611 | 236,040 | 766,386 | 762,220 | ||||||||||||
Interest expense, net | 354 | 359 | 1,079 | 1,103 | ||||||||||||
Other (income) expense, net | 526 | 1,058 | 2,337 | 1,842 | ||||||||||||
Income before income taxes | ||||||||||||||||
All Behavioral Health Care Services | ||||||||||||||||
Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
Amount | % of Net | Amount | % of Net | Amount | % of Net | Amount | % of Net | |||||||||
Net revenues (a) | ||||||||||||||||
Operating charges: | ||||||||||||||||
Salaries, wages and benefits | 684,575 | 690,084 | 2,027,223 | 2,049,731 | ||||||||||||
Other operating expenses | 253,779 | 363,328 | 765,006 | 891,250 | ||||||||||||
Supplies expense | 51,858 | 50,692 | 153,861 | 149,809 | ||||||||||||
Depreciation and amortization | 45,154 | 42,436 | 134,081 | 127,327 | ||||||||||||
Lease and rental expense | 10,734 | 11,822 | 34,151 | 35,185 | ||||||||||||
Subtotal-operating expenses | 1,046,100 | 1,158,362 | 3,114,322 | 3,253,302 | ||||||||||||
Income from operations | 253,491 | 133,454 | 750,501 | 645,138 | ||||||||||||
Interest expense, net | 433 | 359 | 1,184 | 1,103 | ||||||||||||
Other (income) expense, net | 526 | (4,924) | (0.4)% | 2,337 | (4,138) | (0.1)% | ||||||||||
Income before income taxes | ||||||||||||||||
(a) Includes the reversal of CARES Act and other grant income of | ||||||||||||||||
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, 2019 and Form 10-Q for the quarter ended June 30, 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 | ||||||||||||
September 30, 2020 and 2019 | ||||||||||||
AS REPORTED: | ||||||||||||
ACUTE | BEHAVIORAL HEALTH | |||||||||||
09/30/20 | 09/30/19 | % change | 09/30/20 | 09/30/19 | % change | |||||||
Hospitals owned and leased | 26 | 26 | 330 | 327 | ||||||||
Average licensed beds | 6,451 | 6,387 | 23,566 | 23,637 | - | |||||||
Average available beds | 6,279 | 6,211 | 23,464 | 23,536 | - | |||||||
Patient days | 383,958 | 356,914 | 1,563,259 | 1,623,465 | - | |||||||
Average daily census | 4,173.5 | 3,879.5 | 16,991.9 | 17,646.4 | - | |||||||
Occupancy-licensed beds | - | |||||||||||
Occupancy-available beds | - | |||||||||||
Admissions | 71,682 | 79,285 | - | 115,569 | 122,709 | - | ||||||
Length of stay | 5.4 | 4.5 | 13.5 | 13.2 | ||||||||
Inpatient revenue | - | |||||||||||
Outpatient revenue | 4,128,549 | 4,477,277 | - | 243,600 | 257,690 | - | ||||||
Total patient revenue | 12,265,813 | 11,482,109 | 2,731,168 | 2,794,194 | - | |||||||
Other revenue | 127,396 | 114,026 | 53,105 | 57,602 | - | |||||||
Gross hospital revenue | 12,393,209 | 11,596,135 | 2,784,273 | 2,851,796 | - | |||||||
Total deductions | 10,783,206 | 10,067,600 | 1,484,682 | 1,559,980 | - | |||||||
Net hospital revenue | ||||||||||||
SAME FACILITY: | ||||||||||||
ACUTE | BEHAVIORAL HEALTH | |||||||||||
09/30/20 | 09/30/19 | % change | 09/30/20 | 09/30/19 | % change | |||||||
Hospitals owned and leased | 26 | 26 | 312 | 312 | ||||||||
Average licensed beds | 6,451 | 6,387 | 23,440 | 23,350 | ||||||||
Average available beds | 6,279 | 6,211 | 23,338 | 23,249 | ||||||||
Patient days | 383,958 | 356,914 | 1,556,152 | 1,609,071 | - | |||||||
Average daily census | 4,173.5 | 3,879.5 | 16,914.7 | 17,489.9 | - | |||||||
Occupancy-licensed beds | - | |||||||||||
Occupancy-available beds | - | |||||||||||
Admissions | 71,682 | 79,285 | - | 114,902 | 121,345 | - | ||||||
Length of stay | 5.4 | 4.5 | 13.5 | 13.3 | ||||||||
Universal Health Services, Inc. | ||||||||||||
Selected Hospital Statistics | ||||||||||||
For the Nine Months ended | ||||||||||||
September 30, 2020 and 2019 | ||||||||||||
AS REPORTED: | ||||||||||||
ACUTE | BEHAVIORAL HEALTH | |||||||||||
09/30/20 | 09/30/19 | % change | 09/30/20 | 09/30/19 | % change | |||||||
Hospitals owned and leased | 26 | 26 | 330 | 327 | ||||||||
Average licensed beds | 6,451 | 6,376 | 23,591 | 23,792 | - | |||||||
Average available beds | 6,279 | 6,200 | 23,488 | 23,692 | - | |||||||
Patient days | 1,071,830 | 1,084,534 | - | 4,620,471 | 4,874,801 | - | ||||||
Average daily census | 3,911.8 | 3,972.6 | - | 16,863.0 | 17,856.4 | - | ||||||
Occupancy-licensed beds | - | - | ||||||||||
Occupancy-available beds | - | - | ||||||||||
Admissions | 213,658 | 238,827 | - | 339,356 | 368,103 | - | ||||||
Length of stay | 5.0 | 4.5 | 13.6 | 13.2 | ||||||||
Inpatient revenue | - | |||||||||||
Outpatient revenue | 12,204,970 | 13,137,199 | - | 719,513 | 792,929 | - | ||||||
Total patient revenue | 34,900,483 | 34,357,670 | 8,017,979 | 8,361,058 | - | |||||||
Other revenue | 513,423 | 337,369 | 223,212 | 168,341 | ||||||||
Gross hospital revenue | 35,413,906 | 34,695,039 | 8,241,191 | 8,529,399 | - | |||||||
Total deductions | 30,815,348 | 30,119,951 | 4,376,368 | 4,630,959 | - | |||||||
Net hospital revenue | - | |||||||||||
SAME FACILITY: | ||||||||||||
ACUTE | BEHAVIORAL HEALTH | |||||||||||
09/30/20 | 09/30/19 | % change | 09/30/20 | 09/30/19 | % change | |||||||
Hospitals owned and leased | 26 | 26 | 312 | 312 | ||||||||
Average licensed beds | 6,451 | 6,376 | 23,441 | 23,333 | ||||||||
Average available beds | 6,279 | 6,200 | 23,339 | 23,233 | ||||||||
Patient days | 1,071,830 | 1,084,534 | - | 4,598,843 | 4,823,337 | - | ||||||
Average daily census | 3,911.8 | 3,972.6 | - | 16,784.1 | 17,667.9 | - | ||||||
Occupancy-licensed beds | - | - | ||||||||||
Occupancy-available beds | - | - | ||||||||||
Admissions | 213,658 | 238,827 | - | 337,566 | 363,608 | - | ||||||
Length of stay | 5.0 | 4.5 | 13.6 | 13.3 | ||||||||
View original content:http://www.prnewswire.com/news-releases/universal-health-services-inc-reports-2020-third-quarter-financial-results-301163372.html
SOURCE Universal Health Services, Inc.
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