Universal Health Services · Earnings release

FOR IMMEDIATE RELEASE

CONTACT:

Steve Filton

Chief Financial Officer

UNIVERSAL HEALTH SERVICES, INC.

ANNOUNCES 2025 FIRST QUARTER FINANCIAL RESULTS

Consolidated Results of Operations, As Reported and As Adjusted – Three-month periods ended March 31, 2025 and 2024:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $316.7 million, or $4.80 per diluted share, during the first quarter of 2025, as compared to $261.8 million, or $3.82 per diluted share, during the first quarter of 2024. Net revenues increased by 6.7% to $4.100 billion during the first quarter of 2025, as compared to $3.844 billion during the first quarter of 2024.

As reflected on the Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), our adjusted net income attributable to UHS during the first quarter of 2025 was $319.5 million, or $4.84 per diluted share, as compared to $253.1 million, or $3.70 per diluted share, during the first quarter of 2024.

As reflected on the Supplemental Schedule, included in our reported results during the first quarter of 2025 were: (i) an unrealized after-tax loss of $3.3 million, or $.05 per diluted share ($4.3 million pre-tax), resulting from a decrease in the market value of certain equity securities (included in “Other (income) expense, net”), and; (ii) a favorable net after-tax impact of $0.5 million, or $.01 per diluted share, resulting from the net tax benefit recorded in connection with “ASU 2016-09”, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, net of the impact of executive compensation limitations pursuant to IRC section 162(m).

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, 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.

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 $603.9 million during the first quarter of 2025, as compared to $525.9 million during the first quarter of 2024. Our adjusted earnings before interest, taxes, depreciation & amortization (“Adjusted EBITDA net of NCI”), which excludes the impact of other (income) expense, net, was $598.2 million during the first quarter of 2025, as compared to $525.8 million during the first quarter of 2024.

Acute Care Services – Three-month periods ended March 31, 2025 and 2024:

During the first quarter of 2025, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) increased by 2.4% while adjusted patient days increased by 0.3%, as compared to the first quarter of 2024. At these facilities, during the first quarter of 2025, net revenue per adjusted admission increased by 2.5% while net revenue per adjusted patient day increased by 4.7%, as compared to the first quarter of 2024. Net revenues generated from our acute care services, on a same facility basis, increased by 6.5% during the first quarter of 2025, as compared to the first quarter of 2024.

Behavioral Health Care Services – Three-month periods ended March 31, 2025 and 2024:

During the first quarter of 2025, at our behavioral health care facilities on a same facility basis, adjusted admissions decreased by 1.6% while adjusted patient days decreased by 0.3%, as compared to the first quarter

of 2024. At these facilities, during the first quarter of 2025, net revenue per adjusted admission increased by 7.2% and net revenue per adjusted patient day increased by 5.8%, as compared to the first quarter of 2024. Net revenues generated from our behavioral health care services, on a same facility basis, increased by 5.5% during the first quarter of 2025, as compared to the first quarter of 2024.

Net Cash Provided by Operating Activities and Liquidity:

Net Cash Provided by Operating Activities:

During the three-month period ended March 31, 2025, our net cash provided by operating activities was $360 million as compared to $396 million during the first quarter of 2024. The $36 million net decrease in our net cash provided by operating activities consisted of: (i) a favorable change of $69 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) an unfavorable change of $144 million in accounts receivable due, in part, to delays in receipt of funds in connection with certain Medicaid supplement payment programs in various states (approximately $82 million of which related to the Nevada state directed payment program which was approved by the Centers for Medicare and Medicaid Services in April, 2025, retroactive to January 1, 2025); (iii) a favorable change of $20 million in other assets and deferred charges; (iv) a favorable change of $16 million in accrued and deferred income taxes, and; (v) $3 million of other combined net favorable changes.

Liquidity:

As of March 31, 2025, we had $1.02 billion of aggregate available borrowing capacity pursuant to our $1.3 billion revolving credit facility, net of outstanding borrowings and letters of credit.

Stock Repurchase Program:

In connection with 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.

Pursuant to this program, during the first quarter of 2025, we have repurchased approximately 1.0 million shares at an aggregate cost of approximately $180.6 million (average price of approximately $181 per share).

As of March 31, 2025, we had an aggregate available repurchase authorization of approximately $643.7 million pursuant to our stock repurchase program.

Conference call information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 29, 2025. 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 2024 were $15.8 billion. UHS ranked #299 on the Fortune 500; and #399 on Forbes’ list of America’s Largest Public Companies. In 2025, 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 99,300 employees and, through its subsidiaries, operates 29 inpatient acute care hospitals, 334 inpatient behavioral health facilities, 60 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, 2024), 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. In addition, we receive substantial reimbursement from multiple states in connection with various supplemental Medicaid payment programs. Failure to renew these programs beyond their scheduled termination dates, failure of the public hospitals to provide the necessary Inter-Governmental Transfers for the states’ share of the Medicaid disproportionate share hospital programs, failure of our hospitals that currently receive supplemental Medicaid revenues to qualify for future funds under these programs, the adoption of certain proposed reductions of federal funding for Medicaid, or reductions in other reimbursements, could cause our actual results of operations for the year ended December 31, 2025 to differ materially from our 2025 operating results forecast.

•

The increase in interest rates during the past few years has increased our interest expense significantly thereby reducing our free cash flow. As such, although interest rates have moderated more recently, the effects of increased borrowing rates have adversely impacted our results of operations, financial condition and cash flows. We cannot predict future changes to interest rates, however, significant increases in our borrowing rates could have a material unfavorable impact on our future results of operations and our ability to access the capital markets on favorable terms.

•

Changes in laws or policies governing the terms of foreign trade, and in particular, increased trade restrictions, tariffs or taxes on imports from where our products or materials are made (either directly or through our suppliers) could have an impact on our competitive position, business operations and financial results.

•

The outcome of known and unknown litigation, liabilities and other claims asserted against us and/or our subsidiaries, including, but not limited to, the matters related to Cumberland Hospital for Children and Adolescents, located in New Kent, Virginia, as previously disclosed on Form 8-K on September 30, 2024, Form 10-Q for the quarterly period ended September 30, 2024 and Form 10-K for the year ended December 31, 2024; and the matter related to the Pavilion Behavioral Health System (“Pavilion”), located in Champaign, Illinois, as previously disclosed on Forms 8-K on April 1, 2024, September 30, 2024 and October 11, 2024, Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024 and September 30, 2024 and Form 10-K for the year ended December 31, 2024.

We have reached an agreement in principle with respect to the Pavilion matter which is subject to the execution of a final settlement agreement and court approval of that agreement. Although the terms of

the settlement are confidential, we expect that the settlement, if finalized and approved by the court, will be covered by our commercial excess insurance and our existing reserves for that matter. Although we can make no assurances regarding the ultimate outcome of these matters, or what damages will ultimately be awarded, the final resolution of these matters could 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, net of the impact of executive compensation limitations pursuant to IRC section 162(m), 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, 2024. 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.

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Universal Health Services, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

Three months

ended March 31,

Net revenues

$

Operating charges:

Salaries, wages and benefits

Other operating expenses

Supplies expense

Depreciation and amortization

Lease and rental expense

Income from operations

Interest expense, net

Other (income) expense, net

)

)

Income before income taxes

Provision for income taxes

Net income

Less: Net income (loss) attributable to noncontrolling interests ("NCI")

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

ended March 31,

(a) Earnings per share calculation:

Basic and diluted:

Net income attributable to UHS

$

$

Less: Net income attributable to unvested restricted share grants

0

)

Net income attributable to UHS - basic and diluted

$

$

Weighted average number of common shares - basic

Basic earnings per share attributable to UHS:

$

$

Weighted average number of common shares

Add: Other share equivalents

Weighted average number of common shares and equiv. - diluted

Diluted earnings per share attributable to UHS:

$

$

Universal Health Services, Inc.

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

(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

revenues

revenues

Net income attributable to UHS

$

$

Depreciation and amortization

Interest expense, net

Provision for income taxes

EBITDA net of NCI

$

%

$

%

Other (income) expense, net

)

)

Adjusted EBITDA net of NCI

$

%

$

%

Net revenues

$

$

Calculation of Adjusted Net Income Attributable to UHS

Three months ended

Three months ended

Per

Per

Amount

Diluted Share

Amount

Diluted Share

Net income attributable to UHS

$

$

$

$

Plus/minus after-tax adjustments:

Unrealized loss on equity securities

)

)

)

)

Subtotal adjustments

)

)

Adjusted net income attributable to UHS

$

$

$

$

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

$

Accounts receivable, net

Supplies

Other current assets

Total current assets

Property and equipment

Less: accumulated depreciation

)

)

Other assets:

Goodwill

Deferred income taxes

Right of use assets-operating leases

Deferred charges

Other

Total Assets

$

$

Liabilities and Stockholders' Equity

Current liabilities:

Current maturities of long-term debt

$

$

Accounts payable and other liabilities

Operating lease liabilities

Federal and state taxes

Total current liabilities

Other noncurrent liabilities

Operating lease liabilities noncurrent

Long-term debt

Redeemable noncontrolling interest

UHS common stockholders' equity

Noncontrolling interest

Total equity

Total Liabilities and Stockholders' Equity

$

$

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three months

ended March 31,

Cash Flows from Operating Activities:

Net income

$

$

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation & amortization

Gains on sales of assets and businesses

0

)

Stock-based compensation expense

Changes in assets & liabilities, net of effects from acquisitions and dispositions:

Accounts receivable

)

)

Accrued interest

Accrued and deferred income taxes

Other working capital accounts

)

)

Other assets and deferred charges

)

)

Other

Accrued insurance expense, net of commercial premiums paid

Payments made in settlement of self-insurance claims

)

)

Net cash provided by operating activities

Cash Flows from Investing Activities:

Property and equipment additions

)

)

Proceeds received from sales of assets and businesses

0

Acquisition of businesses and property

)

0

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

)

(Increase) decrease in capital reserves of commercial insurance subsidiary

)

Net cash used in investing activities

)

)

Cash Flows from Financing Activities:

Repayments of long-term debt

)

)

Additional borrowings

Repurchase of common shares

)

)

Dividends paid

)

)

Issuance of common stock

Profit distributions to noncontrolling interests

)

)

Purchase (sale) of ownership interests by (from) minority members

)

Net cash used in financing activities

)

)

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

)

Decrease in cash, cash equivalents and restricted cash

)

)

Cash, cash equivalents and restricted cash, beginning of period

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

$

$

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)

% Change

Same Facility:

Three Months ended

Acute Care Services

Revenues

Adjusted Admissions

Adjusted Patient Days

Revenue Per Adjusted Admission

Revenue Per Adjusted Patient Day

Behavioral Health Care Services

Revenues

Adjusted Admissions

Adjusted Patient Days

Revenue Per Adjusted Admission

Revenue Per Adjusted Patient Day

UHS Consolidated

Three Months ended

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

Capital Expenditures

Days Sales Outstanding

Debt

UHS' Shareholders Equity

Debt / Total Capitalization

Debt / EBITDA net of NCI (1)

Debt / Adjusted EBITDA net of NCI (1)

Debt / Cash From Operations (1)

(1) Latest 4 quarters.

Universal Health Services, Inc.

Acute Care Hospital Services

For the Three Months ended

(in thousands)

(unaudited)

Same Facility Basis - Acute Care Hospital Services

Three months ended

Three months ended

Amount

% of Net

Revenues

Amount

% of Net

Revenues

Net revenues

$

%

$

%

Operating charges:

Salaries, wages and benefits

%

%

Other operating expenses

%

%

Supplies expense

%

%

Depreciation and amortization

%

%

Lease and rental expense

%

%

Subtotal-operating expenses

%

%

Income from operations

%

%

Interest expense, net

%

%

Other (income) expense, net

)

)%

%

Income before income taxes

$

%

$

%

All Acute Care Hospital Services

Three months ended

Three months ended

Amount

% of Net

Revenues

Amount

% of Net

Revenues

Net revenues

$

%

$

%

Operating charges:

Salaries, wages and benefits

%

%

Other operating expenses

%

%

Supplies expense

%

%

Depreciation and amortization

%

%

Lease and rental expense

%

%

Subtotal-operating expenses

%

%

Income from operations

%

%

Interest expense, net

%

%

Other (income) expense, net

)

)%

%

Income before income taxes

$

%

$

%

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 goodwill, 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, 2024.

The All Acute Care Hospital Services table summarizes the results of operations for all our acute care operations during the periods presented. These amounts include: (i) our acute care results on a same facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including the results of facilities acquired or opened during the last twelve months.

Universal Health Services, Inc.

Behavioral Health Care Services

For the Three Months ended

(in thousands)

(unaudited)

Same Facility - Behavioral Health Care Services

Three months ended

Three months ended

Amount

% of Net

Revenues

Amount

% of Net

Revenues

Net revenues

$

%

$

%

Operating charges:

Salaries, wages and benefits

%

%

Other operating expenses

%

%

Supplies expense

%

%

Depreciation and amortization

%

%

Lease and rental expense

%

%

Subtotal-operating expenses

%

%

Income from operations

%

%

Interest expense, net

%

%

Other (income) expense, net

)

)%

)

)%

Income before income taxes

$

%

$

%

All Behavioral Health Care Services

Three months ended

Three months ended

Amount

% of Net

Revenues

Amount

% of Net

Revenues

Net revenues

$

%

$

%

Operating charges:

Salaries, wages and benefits

%

%

Other operating expenses

%

%

Supplies expense

%

%

Depreciation and amortization

%

%

Lease and rental expense

%

%

Subtotal-operating expenses

%

%

Income from operations

%

%

Interest expense, net

%

%

Other (income) expense, net

)

)%

)

)%

Income before income taxes

$

%

$

%

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 goodwill, 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 the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2024.

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.

Universal Health Services, Inc.

Selected Hospital Statistics

For the Three Months Ended

(unaudited)

AS REPORTED:

ACUTE

BEHAVIORAL HEALTH

% change

% change

Hospitals owned and leased

%

%

Average licensed beds

%

%

Average available beds

%

%

Patient days

%

%

Average daily census

%

%

Occupancy-licensed beds

%

%

%

%

%

%

Occupancy-available beds

%

%

%

%

%

%

Admissions

%

%

Length of stay

%

%

Inpatient revenue

$

$

%

$

$

%

Outpatient revenue

%

%

Total patient revenue

%

%

Other revenue

%

%

Gross revenue

%

%

Total deductions

%

%

Net revenue

$

$

%

$

$

%

SAME FACILITY:

ACUTE

BEHAVIORAL HEALTH

% change

% change

Hospitals owned and leased

%

%

Average licensed beds

%

%

Average available beds

%

%

Patient days

%

%

Average daily census

%

%

Occupancy-licensed beds

%

%

%

%

%

%

Occupancy-available beds

%

%

%

%

%

%

Admissions

%

%

Length of stay

%

%