UHS second-quarter net revenues increase 3% to $1.34 billion

Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $65.6 million, or $.67 per diluted share, during the second quarter of 2010 as compared to $80.9 million, or $.82 per diluted share, during the comparable prior year quarter. Net revenues increased 3% to $1.34 billion during the second quarter of 2010 as compared to $1.30 billion during the second quarter of 2009.  

After adjusting the reported results for the second quarters of 2010 and 2009 to neutralize the impact of the below-mentioned adjustments, our adjusted net income attributable to UHS was $66.7 million, or $.68 per diluted share, during the second quarter of 2010 as compared to $71.1 million, or $.72 per diluted share, during the second quarter of 2009.  

As indicated on the attached Schedules of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedules"), included in our net income attributable to UHS during the three and six-month periods ended June 30, 2010, was a net loss of $1.1 million, or $.01 per diluted share, consisting of: (i) a favorable after-tax adjustment of $10.2 million, or $.10 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2010 based upon a reserve analysis, offset by; (ii) the unfavorable after-tax impact of $11.3 million, or $.11 per diluted share, resulting from the recording of transaction fees incurred in connection with our previously announced agreement to acquire Psychiatric Solutions, Inc.

As indicated on the attached Supplemental Schedules, included in our net income attributable to UHS during the three and six-month periods ended June 30, 2009, was net income of $9.8 million, or $.10 per diluted share, consisting of: (i) a favorable after-tax adjustment of $14.1 million, or $.14 per diluted share, resulting from a reduction to our professional and general liability self-insurance reserves relating to years prior to 2009 based upon a reserve analysis, partially offset by; (ii) an unfavorable discrete tax item of $4.3 million, or $.04 per diluted share.  

Consolidated Results of Operations – Six-month periods ended June 30, 2010 and 2009:

During the six-month period ended June 30, 2010, our reported net income attributable to UHS was $137.4 million, or $1.40 per diluted share, as compared to $148.4 million, or $1.50 per diluted share, during the comparable prior year period. Net revenues increased 3% to $2.69 billion during the first six months of 2010 as compared to $2.62 billion during the first six months of 2009.  

After adjusting the reported results for six-month periods ended June 30, 2010 and 2009 to neutralize the impact of the above-mentioned adjustments, our adjusted net income attributable to UHS was $138.5 million, or $1.41 per diluted share, during the first six months of 2010 as compared to $138.6 million, or $1.40 per diluted share, during the first six months of 2009.  

Acute Care Services - Three-month periods ended June 30, 2010 and 2009:

At our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 1.9% while adjusted patient days increased 0.3% during the second quarter of 2010, as compared to the second quarter of 2009. Net revenues at these facilities increased 2.2% during the second quarter of 2010 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission during the second quarter of 2010 increased 0.3% while net revenue per adjusted patient day increased 1.9% as compared to the comparable quarter of the prior year. On a same facility basis, excluding the items mentioned above and as included on the Supplemental Schedules, the operating margin at our acute care hospitals decreased to 14.2% during the second quarter of 2010 as compared to 16.9% during the second quarter of 2009.  

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $190 million and $181 million during the three-month periods ended June 30, 2010 and 2009, respectively.

Acute Care Services - Six-month periods ended June 30, 2010 and 2009:

During the six-month period ended June 30, 2010, on a same facility basis, adjusted admissions increased 1.8% while adjusted patient days increased 0.5% over the comparable prior year period.  Net revenues at these facilities increased 2.6% during the second quarter of 2010 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 0.8% while net revenue per adjusted patient day increased 2.2% during the second quarter of 2010 as compared to the comparable quarter of the prior year. On a same facility basis, excluding the items mentioned above and as included on the Supplemental Schedules, the operating margin at our acute care hospitals decreased to 15.2% during the second quarter of 2010 as compared to 17.2% during the second quarter of 2009.  

Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $366 million and $340 million during the six-month periods ended June 30, 2010 and 2009, respectively.

Behavioral Health Care Services – Three-month periods ended June 30, 2010 and 2009:

At our behavioral health care facilities, on a same facility basis, adjusted admissions increased 4.7% and adjusted patient days increased 2.4% during the second quarter of 2010 as compared to the second quarter of 2009.  Net revenues at these facilities increased 5.5% during the second quarter of 2010 as compared to the comparable quarter in the prior year. At these facilities, net revenue per adjusted admission during the second quarter of 2010 increased 0.1% while net revenue per adjusted patient day increased 2.3% as compared to the comparable prior year quarter. On a same facility basis, excluding the items mentioned above and as included on the Supplemental Schedules, the operating margin at our behavioral health care facilities increased to 27.9% during the second quarter of 2010 as compared to 25.9% during the second quarter of 2009.  

Behavioral Health Care Services – Six-month periods ended June 30, 2010 and 2009:

During the six-month period ended June 30, 2010, on a same facility basis, adjusted admissions increased 4.2% and adjusted patient days increased 3.1% during the first six months of 2010 as compared to the comparable period of 2009.  Net revenues at these facilities increased 6.1% during the first six months of 2010 as compared to the comparable prior year period. At these facilities, net revenue per adjusted admission increased 1.4% while net revenue per adjusted patient day increased 2.5% during the first six months of 2010 over the comparable prior year period. On a same facility basis, excluding the items mentioned above and as included on the Supplemental Schedules, the operating margin at our behavioral health care facilities increased to 27.0% during the first six months of 2010 as compared to 25.2% during the comparable period of 2009.  

Dividends Declared:      

On July 21, 2010, our Board of Directors approved a cash dividend of $0.05 per share payable on September 15, 2010 to shareholders of record as of September 1, 2010.