PR Newswire | Apr 26, 2021 04:16PM EDT

And Plans To Return CARES Act Grants Received During First Quarter Of 2021

04/26 15:16 CDT

Universal Health Services, Inc. Announces 2021 First Quarter Financial Results And Plans To Return CARES Act Grants Received During First Quarter Of 2021Consolidated Results of Operations, As Reported and As Adjusted - Three-month periods ended March 31, 2021 and 2020: KING OF PRUSSIA, Pa., April 26, 2021

KING OF PRUSSIA, Pa., April 26, 2021 /PRNewswire/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $209.1 million, or $2.43 per diluted share, during the first quarter of 2021, as compared to $142.0 million, or $1.64 per diluted share, during the first quarter of 2020. Net revenues increased 6.5% to $3.013 billion during the first quarter of 2021 as compared to $2.830 billion during the first quarter of 2020.

During the first quarter of 2021, we received approximately $188 million of additional funds from the federal government in connection with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). We have begun coordinating the return of the funds with the appropriate government agencies and expect to return the $188 million during the second quarter of 2021 utilizing a portion of our cash and cash equivalents held on deposit. Therefore, our results of operations for the quarter ended March 31, 2021 include no impact from the receipt of those funds.

Also, and as previously announced earlier this year, in March of 2021 we funded the early repayment of $695 million of funds received during 2020 pursuant to the Medicare Accelerated and Advance Payment Program. These funds were returned to the government utilizing a portion of our cash and cash equivalents held on deposit.

As reflected on the Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our adjusted net income attributable to UHS during the first quarter of 2021 was $210.1 million, or $2.44 per diluted share, as compared to $150.2 million, or $1.73 per diluted share, during the first quarter of 2020.

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2021, was a net aggregate unfavorable after-tax impact of $1.1 million, or $.01 per diluted share, consisting of the following: (i) an after-tax unrealized loss of $2.1 million, or $.02 per diluted share, ($2.8 million pre-tax which is included in "Other (income) expense, net"), resulting from a decrease in the market value of shares of certain marketable securities held for investment and classified as available for sale, and; (ii) a favorable after-tax impact of $1.1 million, or $.01 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 reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2020, was a net aggregate unfavorable after-tax impact of $8.1 million, or $.09 per diluted share, consisting of the following: (i) an after-tax unrealized loss of $7.4 million, or $.08 per diluted share, ($9.6 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) a unfavorable after-tax impact of $0.8 million, or $.01 per diluted share, resulting from our adoption of ASU 2016-09.

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI", NCI is net income attributable to noncontrolling interests), was $426.3 million during the first quarter of 2021, as compared to $349.1 million during the first quarter of 2020. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, was $427.1 million during the first quarter of 2021 as compared to $358.7 million during the first quarter of 2020.

Acute Care Services - Three-month periods ended March 31, 2021 and 2020:

During the first quarter of 2021 adjusted admissions (adjusted for outpatient activity), at our acute care hospitals owned during both periods ("same facility basis"), decreased 12.1% and adjusted patient days decreased 0.7%, as compared to the first quarter of 2020. At these facilities, net revenue per adjusted admission increased 26.3% while net revenue per adjusted patient day increased 11.8% during the first quarter of 2021 as compared to the first quarter of 2020. Net revenues generated from our acute care services on a same facility basis increased 11.7% during the first quarter of 2021 as compared to the first quarter of 2020.

Behavioral Health Care Services - Three-month periods ended March 31, 2021 and 2020:

During the first quarter of 2021 adjusted admissions, at our behavioral health care facilities on a same facility basis, decreased 4.9% and adjusted patient days decreased 3.8%, as compared to the first quarter of 2020. At these facilities, net revenue per adjusted admission increased 6.2% while net revenue per adjusted patient day increased 4.9% during the first quarter of 2021 as compared to the comparable quarter in 2020. Net revenues generated from our behavioral health care services on a same facility basis increased 0.9% during the first quarter of 2021 as compared to the first quarter of 2020.

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. The COVID-19 vaccination process commenced during the first quarter of 2021 and, while we expect the administration of vaccines will assist in easing the number of COVID-19 patients, the pace of distribution and the portion of the population that will ultimately become vaccinated 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.

Net Cash Provided by Operating Activities and Liquidity:

Net Cash Provided by Operating Activities:

For the three months ended March 31, 2021, our net cash provided by operating activities was $72 million as compared to $502 million during the first quarter of 2020. The $430 million net decrease in our cash provided by operating activities during the first quarter of 2021, as compared to the first quarter of 2020, was due to: (i) an unfavorable change of $509 million resulting primarily from the above-mentioned $695 million of Medicare accelerated payments repaid during the first quarter of 2021, net of the $188 million of CARES Act grants received during the first quarter of 2021; (ii) a favorable change of $72 million resulting from an increase in net income plus depreciation and amortization expense and stock-based compensation expense, and; (iii) $7 million of other combined net favorable changes.

Liquidity:

As of March 31, 2021, we had $997 million of aggregate available borrowing capacity pursuant to our $1 billion revolving credit facility, net of outstanding letters of credit. In addition, as of March 31, 2021, we had approximately $765 million of cash and cash equivalents.

Quarterly Dividend and Stock Repurchase Program:

As previously announced, during the first quarter our Board of Directors approved a $0.20 per share cash dividend that was paid on March 31, 2021 to shareholders of record as of March 15, 2021.

In addition, in April, 2021, our Board of Directors approved a resumption to our stock repurchase program, effective immediately. Pursuant to our $2.7 billion stock repurchase program, which had an aggregate available repurchase authorization of $559.6 million as of March 31, 2021, 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. Since inception of the program in 2014 through March 31, 2021, we have repurchased approximately 18.02 million shares at an aggregate cost of approximately $2.14 billion (approximately $119 per share).

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 27, 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 $11.6 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, 335 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

ended March 31,

2021 2020

Net revenues $3,012,987 $2,829,667

Operating charges:

Salaries, wages and benefits 1,497,773 1,432,669

Other operating expenses 709,708 689,790

Supplies expense 347,110 317,827

Depreciation and amortization 131,403 124,394

Lease and rental expense 31,324 28,293

2,717,318 2,592,973

Income from operations 295,669 236,694

Interest expense, net 21,957 36,351

Other (income) expense, net 835 9,560

Income before income taxes 272,877 190,783

Provision for income taxes 63,807 46,323

Net income 209,070 144,460

Less: Net income attributable to

noncontrolling interests ("NCI") (21) 2,423

Net income attributable to UHS $209,091 $142,037

Basic earnings per share attributable to UHS (a) $2.46 $1.64

Diluted earnings per share attributable to UHS (a) $2.43 $1.64

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

Three months

(a) Earnings per share calculation: ended March 31,

2021 2020

Basic and diluted:

Net income attributable to UHS $209,091 $142,037

Less: Net income attributable to unvested restricted share grants (552) (373)

Net income attributable to UHS - basic and diluted $208,539 $141,664

Weighted average number of common shares - basic 84,782 86,212

Basic earnings per share attributable to UHS: $2.46 $1.64

Weighted average number of common shares 84,782 86,212

Add: Other share equivalents 1,014 243

Weighted average number of common shares and equiv. - diluted 85,796 86,455

Diluted earnings per share attributable to UHS: $2.43 $1.64

Universal Health Services, Inc.

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

For the Three Months ended March 31, 2021 and 2020

(in thousands, except per share amounts)

(unaudited)

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

Three months ended % Net Three months ended % Net

March 31, 2021 revenues March 31, 2020 revenues

Net income attributable to UHS $209,091 $142,037

Depreciation and amortization 131,403 124,394

Interest expense, net 21,957 36,351

Provision for income taxes 63,807 46,323

EBITDA net of NCI $426,258 14.1% $349,105 12.3%

Other (income) expense, net 835 9,560

Adjusted EBITDA net of NCI $427,093 14.2% $358,665 12.7%

Net revenues $3,012,987 $2,829,667

Calculation of Adjusted Net Income Attributable to UHS

Three months ended Three months ended

March 31, 2021 March 31, 2020

Per Per

Amount Diluted Share Amount Diluted Share

Net income attributable to UHS $209,091 $2.43 $142,037 $1.64

Plus/minus after-tax adjustments:

Unrealized loss on marketable securities held for sale 2,137 0.02 7,350 0.08

Impact of ASU 2016-09 (1,079) (0.01) 770 0.01

Subtotal adjustments 1,058 0.01 8,120 0.09

Adjusted net income attributable to UHS $210,149 $2.44 $150,157 $1.73

Universal Health Services, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

Three months

ended March 31,

2021 2020

Net income $209,070 $144,460

Other comprehensive income (loss):

Foreign currency translation adjustment (10,346) (39,201)

Other comprehensive income (loss) before tax (10,346) (39,201)

Income tax expense (benefit) related to items of other comprehensive income (1,466) (2,108)(loss)

Total other comprehensive income (loss), net of tax (8,880) (37,093)

Comprehensive income 200,190 107,367

Less: Comprehensive income (loss) attributable to noncontrolling interests (21) 2,423

Comprehensive income attributable to UHS $200,211 $104,944

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

March 31, December 31,

2021 2020

Assets

Current assets:

Cash and cash equivalents $ 764,502 $ 1,224,490

Accounts receivable, net 1,668,650 1,728,928

Supplies 193,961 190,417

Other current assets 157,052 138,034

Total current assets 2,784,165 3,281,869

Property and equipment 10,119,037 9,885,888

Less: accumulated depreciation (4,623,435) (4,512,764)

5,495,602 5,373,124

Other assets:

Goodwill 3,886,973 3,882,715

Deferred income taxes 23,514 22,689

Right of use assets-operating leases 326,703 336,513

Deferred charges 4,782 4,985

Other 574,590 574,984

Total Assets $ 13,096,329 $ 13,476,879

Liabilities and Stockholders' Equity

Current liabilities:

Current maturities of long-term debt $ 107,281 $ 331,998

Accounts payable and other liabilities 1,779,700 1,668,671

Medicare accelerated payments and deferred CARES Act and other grants 189,320 376,151

Operating lease liabilities 60,812 59,796

Federal and state taxes 102,266 44,423

Total current liabilities 2,239,379 2,481,039

Other noncurrent liabilities 476,377 458,549

Operating lease liabilities noncurrent 267,707 278,303

Medicare accelerated payments noncurrent 0 322,617

Long-term debt 3,505,822 3,524,253

Deferred income taxes 735 5,582

Redeemable noncontrolling interest 4,470 4,569

UHS common stockholders' equity 6,513,862 6,317,146

Noncontrolling interest 87,977 84,821

Total equity 6,601,839 6,401,967

Total Liabilities and Stockholders' Equity $ 13,096,329 $ 13,476,879

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three months

ended March 31,

2021 2020

Cash Flows from Operating Activities:

Net income $209,070 $144,460

Adjustments to reconcile net income to net

cash provided by operating activities:

Depreciation & amortization 131,403 124,394

Stock-based compensation expense 18,022 18,047

Changes in assets & liabilities, net of effects from

acquisitions and dispositions:

Accounts receivable 56,851 69,763

Accrued interest 10,133 (4,412)

Accrued and deferred income taxes 53,769 45,200

Other working capital accounts 82,663 73,929

Medicare accelerated payments and deferred CARES Act and other grants (509,448) 0

Other assets and deferred charges (17) 11,084

Other 2,623 (3,038)

Accrued insurance expense, net of commercial premiums paid 35,467 49,559

Payments made in settlement of self-insurance claims (18,741) (26,924)

Net cash provided by operating activities 71,795 502,062

Cash Flows from Investing Activities:

Property and equipment additions, net of disposals (247,459) (184,102)

Inflows (outflows) from foreign exchange contracts that hedge our net U.K. (14,264) 51,691investment

Decrease in capital reserves of commercial insurance subsidiary 100 0

Costs incurred for purchase and implementation of information technology (575) (1,857)applications

Investment in, and advances to, joint ventures and other (129) (751)

Net cash used in investing activities (262,327) (135,019)

Cash Flows from Financing Activities:

Reduction of long-term debt (251,830) (185,098)

Additional borrowings 0 5,453

Repurchase of common shares (7,464) (172,092)

Dividends paid (17,018) (17,344)

Issuance of common stock 3,357 3,002

Profit distributions to noncontrolling interests (4,525) (5,735)

Purchase of ownership interests by minority members 7,603 0

Net cash used in financing activities (269,877) (371,814)

Effect of exchange rate changes on cash, cash equivalents and restricted 423 (1,673)cash

Decrease in cash, cash equivalents and restricted cash (459,986) (6,444)

Cash, cash equivalents and restricted cash, beginning of period 1,279,154 105,667

Cash, cash equivalents and restricted cash, end of period $819,168 $99,223

Supplemental Disclosures of Cash Flow Information:

Interest paid $11,421 $39,483

Income taxes paid, net of refunds $8,654 $6,783

Noncash purchases of property and equipment $60,124 $58,935

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)

% Change

3 Months ended

Same Facility: 3/31/2021

Acute Care Hospitals

Revenues 11.7%

Adjusted Admissions -12.1%

Adjusted Patient Days -0.7%

Revenue Per Adjusted Admission 26.3%

Revenue Per Adjusted Patient Day 11.8%

Behavioral Health Hospitals

Revenues 0.9%

Adjusted Admissions -4.9%

Adjusted Patient Days -3.8%

Revenue Per Adjusted Admission 6.2%

Revenue Per Adjusted Patient Day 4.9%

UHS Consolidated Three months ended

3/31/2021 3/31/2020

Revenues $3,012,987 $2,829,667

EBITDA net of NCI $426,258 $349,105

EBITDA Margin net of NCI 14.1% 12.3%

Adjusted EBITDA net of NCI $427,093 $358,665

Adjusted EBITDA Margin net of NCI 14.2% 12.7%

Cash Flow From Operations $71,795 $502,062

Days Sales Outstanding 50 48

Capital Expenditures $247,459 $184,102

Debt $3,613,103 $3,805,320

UHS' Shareholders Equity $6,513,862 $5,413,209

Debt / Total Capitalization 35.7% 41.3%

Debt / EBITDA net of NCI (1) 1.87 2.37

Debt / Adjusted EBITDA net of NCI (1) 1.87 2.23

Debt / Cash From Operations (1) 1.87 2.52

Net Debt / EBITDA net of NCI (1) (2) 1.48

Net Debt / Adjusted EBITDA net of NCI (1) (2) 1.48

Net Debt / Cash From Operations (1) (2) 1.48

(1) Latest 4 quarters.

(2) Debt, net of approximately $749,000 of short-term cash investments as ofMarch 31, 2021.

Universal Health Services, Inc.

Acute Care Hospital Services

For the three months ended

March 31, 2021 and 2020

(in thousands)

Same Facility Basis - Acute Care Hospital Services

Three months ended Three months ended

March 31, 2021 March 31, 2020

Amount % of Net Amount % of Net Revenues Revenues

Net revenues $1,671,836 100.0% $1,497,123 100.0%

Operating charges:

Salaries, wages and benefits 706,811 42.3% 658,929 44.0%

Other operating expenses 393,207 23.5% 375,531 25.1%

Supplies expense 296,478 17.7% 264,530 17.7%

Depreciation and amortization 81,184 4.9% 77,928 5.2%

Lease and rental expense 20,112 1.2% 16,020 1.1%

Subtotal-operating expenses 1,497,792 89.6% 1,392,938 93.0%

Income from operations 174,044 10.4% 104,185 7.0%

Interest expense, net 246 0.0% 618 0.0%

Other (income) expense, net 0 - 0 -

Income before income taxes $173,798 10.4% $103,567 6.9%

All Acute Care Hospital Services

Three months ended Three months ended

March 31, 2021 March 31, 2020

Amount % of Net Amount % of Net Revenues Revenues

Net revenues $1,694,542 100.0% $1,521,049 100.0%

Operating charges:

Salaries, wages and benefits 707,218 41.7% 658,959 43.3%

Other operating expenses 416,007 24.5% 399,457 26.3%

Supplies expense 296,479 17.5% 264,530 17.4%

Depreciation and amortization 81,362 4.8% 77,928 5.1%

Lease and rental expense 20,112 1.2% 16,020 1.1%

Subtotal-operating expenses 1,521,178 89.8% 1,416,894 93.2%

Income from operations 173,364 10.2% 104,155 6.8%

Interest expense, net 246 0.0% 618 0.0%

Other (income) expense, net 0 - 0 -

Income before income taxes $173,118 10.2% $103,537 6.8%

We believe that providing our results on a "Same Facility" basis (which is anon-GAAP measure), which includes the operating results for facilities andbusinesses operated in both the current year and prior year periods, ishelpful to our investors as a measure of our operating performance. Our SameFacility results also neutralize (if applicable), the effect of materialitems that are nonrecurring or non-operational in nature including items suchas, but not limited to, reserves for various matters, settlements, legaljudgments and lawsuits, cost related to extinguishment of debt, gains/losseson sales of assets and businesses, impairments of long-lived and intangibleassets and other amounts that may be reflected in the current or prior yearfinancial statements that relate to prior periods. Our Same Facility basisresults exclude from net revenues and other operating expenses, provider taxassessments incurred in each period. However, these provider tax assessmentsare included in net revenues and other operating expenses as reflected in thetable under All Acute Care Hospital Services. The provider tax assessmentshad no impact on the income before income taxes as reflected on the abovetables since the amounts offset between net revenues and other operatingexpenses. To obtain a complete understanding of our financial performance,the Same Facility results should be examined in connection with our netincome as determined in accordance with GAAP and as presented herein and thecondensed consolidated financial statements and notes thereto as contained inour Form 10-K for the year ended December 31, 2020.

The All Acute Care Hospital Servicestable summarizes the results ofoperations 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 whichincreased net revenues and other operating expenses but had no impact onincome before income taxes, and; (iii) certain other amounts including theresults of facilities acquired or opened during the last twelve months.

Universal Health Services, Inc.

Behavioral Health Care Services

For the three months ended

March 31, 2021 and 2020

(in thousands)

Same Facility - Behavioral Health Care Services

Three months ended Three months ended

March 31, 2021 March 31, 2020

Amount % of Net Amount % of Net Revenues Revenues

Net revenues $1,292,042 100.0% $1,281,052 100.0%

Operating charges:

Salaries, wages and benefits 701,567 54.3% 690,375 53.9%

Other operating expenses 245,373 19.0% 242,366 18.9%

Supplies expense 50,746 3.9% 51,561 4.0%

Depreciation and amortization 45,302 3.5% 42,715 3.3%

Lease and rental expense 11,274 0.9% 11,020 0.9%

Subtotal-operating expenses 1,054,262 81.6% 1,038,037 81.0%

Income from operations 237,780 18.4% 243,015 19.0%

Interest expense, net 338 0.0% 364 0.0%

Other (income) expense, net 413 0.0% 889 0.1%

Income before income taxes $237,029 18.3% $241,762 18.9%

All Behavioral Health Care Services

Three months ended Three months ended

March 31, 2021 March 31, 2020

Amount % of Net Amount % of Net Revenues Revenues

Net revenues $1,315,337 100.0% $1,306,109 100.0%

Operating charges:

Salaries, wages and benefits 703,975 53.5% 693,272 53.1%

Other operating expenses 269,297 20.5% 266,182 20.4%

Supplies expense 51,009 3.9% 51,639 4.0%

Depreciation and amortization 46,482 3.5% 43,889 3.4%

Lease and rental expense 11,683 0.9% 12,158 0.9%

Subtotal-operating expenses 1,082,446 82.3% 1,067,140 81.7%

Income from operations 232,891 17.7% 238,969 18.3%

Interest expense, net 1,153 0.1% 397 0.0%

Other (income) expense, net 413 0.0% 889 0.1%

Income before income taxes $231,325 17.6% $237,683 18.2%

We believe that providing our results on a "Same Facility" basis (which is anon-GAAP measure), which includes the operating results for facilities andbusinesses operated in both the current year and prior year periods, ishelpful to our investors as a measure of our operating performance. Our SameFacility results also neutralize (if applicable), the effect of materialitems that are nonrecurring or non-operational in nature including items suchas, but not limited to, reserves for various matters, settlements, legaljudgments, lawsuits and reserves established in connection with thegovernment's investigation of our behavioral health care facilities, costrelated to extinguishment of debt, gains/losses on sales of assets andbusinesses, impairments of long-lived and intangible assets and other amountsthat may be reflected in the current or prior year financial statements thatrelate to prior periods. Our Same Facility basis results exclude from netrevenues and other operating expenses, provider tax assessments incurred ineach period. However, these provider tax assessments are included in netrevenues and other operating expenses as reflected in the table under AllBehavioral Health Care Services. The provider tax assessments had no impacton the income before income taxes as reflected on the above tables since theamounts offset between net revenues and other operating expenses. To obtain acomplete understanding of our financial performance, the Same Facilityresults should be examined in connection with our net income as determined inaccordance with GAAP and as presented herein and in the condensedconsolidated financial statements and notes thereto as contained in our Form10-K for the year ended December 31, 2020.

The All Behavioral Health Care Servicestable summarizes the results ofoperations for all our behavioral health care facilities during the periodspresented. These amounts include: (i) our behavioral health results on a samefacility basis, as indicated above; (ii) the impact of provider taxassessments which increased net revenues and other operating expenses but hadno impact on income before income taxes, and; (iii) certain other amountsincluding the results of facilities acquired or opened during the last twelvemonths as well as the results of certain facilities that were closed orrestructured during the past year.

Universal Health Services, Inc.

Selected Hospital Statistics

For the Three Months ended

March 31, 2021 and 2020

AS REPORTED:

ACUTE BEHAVIORAL HEALTH

3/31/21 3/31/20 % change 3/31/21 3/31/20 % change

Hospitals owned and leased 26 26 0.0% 335 331 0.9%

Average licensed beds 6,515 6,451 1.0% 24,018 23,634 1.6%

Average available beds 6,343 6,279 1.0% 23,918 23,531 1.6%

Patient days 392,391 370,513 5.9% 1,534,162 1,592,611 -3.7%

Average daily census 4,359.9 4,071.7 7.1% 17,046.2 17,501.2 -2.6%

Occupancy-licensed beds 66.9% 63.1% 6.0% 71.0% 74.1% -4.2%

Occupancy-available beds 68.7% 64.8% 6.0% 71.3% 74.4% -4.2%

Admissions 72,924 77,768 -6.2% 115,408 121,017 -4.6%

Length of stay 5.4 4.8 12.9% 13.3 13.2 1.0%

Inpatient revenue $9,119,184 $7,821,472 16.6% $2,473,565 $2,525,539 -2.1%

Outpatient revenue 4,580,720 4,681,741 -2.2% 246,764 259,739 -5.0%

Total patient revenue 13,699,904 12,503,213 9.6% 2,720,329 2,785,278 -2.3%

Other revenue 143,265 116,278 23.2% 62,208 56,390 10.3%

Gross hospital revenue 13,843,169 12,619,491 9.7% 2,782,537 2,841,668 -2.1%

Total deductions 12,148,627 11,098,442 9.5% 1,467,200 1,535,559 -4.5%

Net hospital revenue $1,694,542 $1,521,049 11.4% $1,315,337 $1,306,109 0.7%

SAME FACILITY:

ACUTE BEHAVIORAL HEALTH

3/31/21 3/31/20 % change 3/31/21 3/31/20 % change

Hospitals owned and leased 26 26 0.0% 319 319 0.0%

Average licensed beds 6,515 6,451 1.0% 23,689 23,397 1.2%

Average available beds 6,343 6,279 1.0% 23,589 23,294 1.3%

Patient days 392,391 370,513 5.9% 1,525,725 1,582,445 -3.6%

Average daily census 4,359.9 4,071.7 7.1% 16,952.5 17,389.5 -2.5%

Occupancy-licensed beds 66.9% 63.1% 6.0% 71.6% 74.3% -3.7%

Occupancy-available beds 68.7% 64.8% 6.0% 71.9% 74.7% -3.7%

Admissions 72,924 77,768 -6.2% 114,426 120,082 -4.7%

Length of stay 5.4 4.8 12.9% 13.3 13.2 1.2%

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SOURCE Universal Health Services, Inc.