Consolidated Results of Operations, As Reported and As Adjusted – Three-month periods ended March 31, 2024 and 2023: KING OF PRUSSIA, Pa., April 24, 2024 /PRNewswire/ -- Universal Health Services, Inc. (NYSE:UHS) announced today that its reported net income attributable to UHS was $261.8 million, or $3.82 per diluted share, during the first quarter of 2024, as compared to $163.1 million, or $2.28 per diluted share, during the first quarter of 2023. Net revenues increased by 10.8% to $3.844 billion during the first quarter of 2024, as compared to $3.468 billion during the first quarter of 2023. As reflected on the Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our adjusted net income attributable to UHS during the first quarter of 2024 was $253.1 million, or $3.70 per diluted share, as compared to $167.6 million, or $2.34 per diluted share, during the first quarter of 2023.  As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2024 were: (i) a favorable after-tax impact of $9.2 million, or $.13 per diluted share, resulting from the tax benefit recorded in connection with employee share-based payments (pursuant to "ASU 2016-09", Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting), and; (ii) an unrealized after-tax loss of $0.4 million, or $.01 per diluted share ($0.6 million pre-tax), resulting from a decrease in the market value of certain equity securities (included in "Other (income) expense, net"). Our reported results during the first quarter of 2023 included an unrealized after-tax loss of $4.5 million, or $.06 per diluted share, ($5.8 million pre-tax) resulting from a decrease in the market value of certain equity securities.  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 $525.9 million during the first quarter of 2024, as compared to $407.3 million during the first quarter of 2023. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impact of other (income) expense, net, was $525.8 million during the first quarter of 2024, as compared to $421.1 million during the first quarter of 2023. Acute Care Services – Three-month periods ended March 31, 2024 and 2023: During the first quarter of 2024, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased by 4.5% while adjusted patient days increased by 3.4%, as compared to the first quarter of 2023. At these facilities, during the first quarter of 2024, net revenue per adjusted admission increased by 4.6% while net revenue per adjusted patient day increased by 5.8%, as compared to the first quarter of 2023. Net revenues generated from our acute care services, on a same facility basis, increased by 9.6% during the first quarter of 2024, as compared to the first quarter of 2023. Behavioral Health Care Services – Three-month periods ended March 31, 2024 and 2023: During the first quarter of 2024, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased by 0.8% while adjusted patient days increased by 2.0%, as compared to the first quarter of 2023. At these facilities, during the first quarter of 2024, net revenue per adjusted admission increased by 11.2% and net revenue per adjusted patient day increased by 8.2%, as compared to the first quarter of 2023. Net revenues generated from our behavioral health care services, on a same facility basis, increased by 10.4% during the first quarter of 2024, as compared to the first quarter of 2023. Net Cash Provided by Operating Activities and Liquidity: Net Cash Provided by Operating Activities: During the three-month period ended March 31, 2024, our net cash provided by operating activities was $396 million as compared to $291 million during the first three months of 2023. The $106 million net increase in our net cash provided by operating activities consisted of: (i) a favorable change of $98 million resulting from an increase in net income plus/minus depreciation and amortization expense, stock-based compensation expense and gains on sales of assets and businesses; (ii) a favorable change of $86 million in other working capital accounts due primarily to the timing of disbursements for other accrued liabilities; (iii) an unfavorable change of $59 million in accounts receivable; (iv) an unfavorable change of $45 million in other assets and deferred charges, and; (v) $26 million of other combined net favorable changes. Liquidity: As of March 31, 2024, we had $733 million of aggregate available borrowing capacity pursuant to our $1.2 billion revolving credit facility, net of outstanding borrowings and letters of credit. Stock Repurchase Program: Pursuant to the terms of our stock repurchase program, shares of our Class B Common Stock may be repurchased, from time to time as conditions allow, on the open market or in negotiated private transactions. During the first quarter of 2024, we have repurchased 700,000 shares at an aggregate cost of approximately $125.1 million (approximately $179 per share) pursuant to the program. As of March 31, 2024, we had an aggregate available repurchase authorization of approximately $298 million. Conference call information: We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 25, 2024. A live webcast of the call will be available on our website at www.uhs.com. To participate via telephone, please register in advance at this link. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the call will be available for one full year following the live call. 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. (the "Company") has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues during 2023 were $14.282 billion. UHS ranked #311 on the Fortune 500; and #434 on Forbes' list of America's Largest Public Companies. UHS was again recognized as one of the World's Most Admired Companies by Fortune.  Our operating philosophy is as effective today as it was upon the Company's founding in 1979, enabling us to provide compassionate care to our patients and their loved ones. Our strategy includes building or acquiring high quality hospitals in rapidly growing markets, investing in the people and equipment needed to allow each facility to thrive, and becoming the leading healthcare provider in each community we serve. Headquartered in King of Prussia, PA, UHS has approximately 96,700 employees and, through its subsidiaries, operates 27 inpatient acute care hospitals, 333 inpatient behavioral health facilities, 48 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT). For additional information visit www.uhs.com. This press release contains forward-looking statements based on current management expectations. Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors, and Item 7-Forward-Looking Statements and Risk Factors, in our Form 10-K for the year ended December 31, 2023), 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, but not limited to: A significant portion of our revenues are derived from federal and state government programs including the Medicare and Medicaid programs. Payments from these programs are subject to statutory and regulatory changes, administrative rulings, interpretations and determinations, requirements for utilization review, and federal and state funding restrictions. Changes to these programs, if adopted, could materially affect program payments which could materially impact our results of operations. The increase in interest rates has substantially increased our borrowings costs and reduced our ability to access the capital markets on favorable terms. Additional increases in interest rates could have a significant unfavorable impact on our future results of operations and the resulting effect on the capital markets could adversely affect our ability to carry out our strategy. The outcome of known and unknown litigation, liabilities and other claims asserted against us and/or our subsidiaries, including, but not limited to, the March 28, 2024, jury award (of compensatory damages of $60 million and punitive damages of $475 million) against The Pavilion Behavioral Health System (the "Pavilion), an indirect subsidiary of the Company, as previously disclosed on Form 8-K, as filed with the Securities and Exchange Commission on April 1, 2024. While the Pavilion has professional liability insurance to cover a portion of these amounts, the resolution of this matter may have a material adverse effect on the Company. We believe that adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share, EBITDA net of NCI and Adjusted EBITDA net of NCI, which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect of material items impacting our net income attributable to UHS, such as, changes in the market value of shares of certain equity securities, the impact of ASU 2016-09 and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of goodwill, long-lived and intangible assets, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, potential impacts of non-ordinary acquisitions, divestitures, joint ventures or other strategic transactions, 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, 2023. 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, 2024 2023 Net revenues $3,843,582 $3,467,518 Operating charges:    Salaries, wages and benefits 1,842,624 1,753,335    Other operating expenses 1,032,170 878,951    Supplies expense 403,573 379,989    Depreciation and amortization 141,003 141,621    Lease and rental expense 35,450 34,922 3,454,820 3,188,818 Income from operations 388,762 278,700 Interest expense, net 52,826 50,876 Other (income) expense, net (150) 13,723 Income before income taxes 336,086 214,101 Provision for income taxes 70,264 51,726 Net income 265,822 162,375 Less:  Net income (loss) attributable to noncontrolling interests ("NCI") 3,988 (740) Net income attributable to UHS $261,834 $163,115 Basic earnings per share attributable to UHS (a) $3.90 $2.31 Diluted earnings per share attributable to UHS (a) $3.82 $2.28   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, 2024 2023 Basic and diluted: Net income attributable to UHS $261,834 $163,115 Less: Net income attributable to unvested restricted share grants (45) (129) Net income attributable to UHS - basic and diluted $261,789 $162,986 Weighted average number of common shares - basic 67,204 70,535 Basic earnings per share attributable to UHS: $3.90 $2.31 Weighted average number of common shares 67,204 70,535 Add: Other share equivalents 1,278 952 Weighted average number of common shares and equiv. - diluted 68,482 71,487 Diluted earnings per share attributable to UHS: $3.82 $2.28   Universal Health Services, Inc. Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule") For the Three Months ended March 31, 2024 and 2023 (in thousands, except per share amounts) (unaudited) Calculation of Earnings/Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA/Adjusted EBITDA net of NCI") Three months ended % Net Three months ended % Net March 31, 2024 revenues March 31, 2023 revenues Net income attributable to UHS $261,834 $163,115    Depreciation and amortization 141,003 141,621    Interest expense, net 52,826 50,876    Provision for income taxes 70,264 51,726 EBITDA net of NCI $525,927 13.7 % $407,338 11.7 % Other (income) expense, net (150) 13,723 Adjusted EBITDA net of NCI $525,777 13.7 % $421,061 12.1 % Net revenues $3,843,582 $3,467,518 Calculation of Adjusted Net Income Attributable to UHS Three months ended Three months ended March 31, 2024 March 31, 2023 Per Per Amount Diluted Share Amount Diluted Share Net income attributable to UHS $261,834 $3.82 $163,115 $2.28 Plus/minus after-tax adjustments: Unrealized loss on equity securities 444 0.01 4,461 0.06 Impact of ASU 2016-09 (9,156) (0.13) - - Subtotal adjustments (8,712) (0.12) 4,461 0.06 Adjusted net income attributable to UHS $253,122 $3.70 $167,576 $2.34   Universal Health Services, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited) March 31, December 31, 2024 2023 Assets Current assets:     Cash and cash equivalents $ 112,093 $ 119,439     Accounts receivable, net 2,299,425 2,238,265     Supplies 216,058 216,988     Other current assets 243,352 236,658           Total current assets 2,870,928 2,811,350 Property and equipment 11,955,109 11,777,047