Supplemental Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2012

Condensed Consolidating Statement of Income

The following financial statements present condensed consolidating financial data for (i) Universal Health Services, Inc. (on a parent company only basis), (ii) the combined Guarantors, (iii) the combined non guarantor subsidiaries (all other subsidiaries), (iv) an elimination column for adjustments to arrive at the information for the parent company, Guarantors, and non-guarantors on a consolidated basis, and (v) the parent company and our subsidiaries on a consolidated basis.

Investments in subsidiaries are accounted for by the parent company and the Guarantors using the equity method for this presentation. Results of operations of subsidiaries are therefore classified in the parent company’s and Guarantors’ investment in subsidiaries accounts. The elimination entries set forth in the following condensed consolidating financial statements eliminate distributed and undistributed income of subsidiaries, investments in subsidiaries, and intercompany balances and transactions between the parent, Guarantors, and non-guarantors.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,295,803		$	625,213		$	(6,553	)	$	1,914,463
Less: Provision for doubtful accounts		0			105,390			79,270			0			184,660
Net revenues		0			1,190,413			545,943			(6,553	)		1,729,803
Operating charges:
Salaries, wages and benefits		0			608,937			247,941			0			856,878
Other operating expenses		0			223,553			130,318			(6,459	)		347,412
Supplies expense		0			122,524			75,576			0			198,100
Depreciation and amortization		0			50,997			22,081			0			73,078
Lease and rental expense		0			14,394			9,703			(94	)		24,003
		0			1,020,405			485,619			(6,553	)		1,499,471
Income from operations		0			170,008			60,324			0			230,332
Interest expense		44,298			838			752			0			45,888
Interest (income) expense, affiliate		0			22,783			(22,783	)		0			0
Equity in net income of consolidated affiliates		(134,904	)		(28,548	)		0			163,452			0
Income before income taxes		90,606			174,935			82,355			(163,452	)		184,444
Provision for income taxes		(16,955	)		62,521			21,434			0			67,000
Net income		107,561			112,414			60,921			(163,452	)		117,444
Less: Income attributable to noncontrolling interests		0			0			9,883			0			9,883
Net income attributable to UHS	$	107,561		$	112,414		$	51,038		$	(163,452	)	$	107,561

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	2,629,267		$	1,244,287		$	(12,879	)	$	3,860,675
Less: Provision for doubtful accounts		0			194,768			138,515			0			333,283
Net revenues		0			2,434,499			1,105,772			(12,879	)		3,527,392
Operating charges:
Salaries, wages and benefits		0			1,229,795			501,077			0			1,730,872
Other operating expenses		0			459,587			254,088			(12,690	)		700,985
Supplies expense		0			250,833			152,907			0			403,740
Depreciation and amortization		0			102,256			42,714			0			144,970
Lease and rental expense		0			29,238			18,416			(189	)		47,465
		0			2,071,709			969,202			(12,879	)		3,028,032
Income from operations		0			362,790			136,570			0			499,360
Interest expense		89,452			1,625			1,521			0			92,598
Interest (income) expense, affiliate		0			45,565			(45,565	)		0			0
Equity in net income of consolidated affiliates		(291,382	)		(69,625	)		0			361,007			0
Income before income taxes		201,930			385,225			180,614			(361,007	)		406,762
Provision for income taxes		(34,238	)		136,629			44,357			0			146,748
Net income		236,168			248,596			136,257			(361,007	)		260,014
Less: Income attributable to noncontrolling interests		0			0			23,846			0			23,846
Net income attributable to UHS	$	236,168		$	248,596		$	112,411		$	(361,007	)	$	236,168

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2011

(amounts in thousands)

													Total
							Non			Consolidating			Consolidated
	Parent			Guarantors			Guarantors			Adjustments			Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,265,907		$	609,853		$	(6,346	)	$	1,869,414
Less: Provision for doubtful accounts		0			80,327			74,623			0			154,950
Net revenues		0			1,185,580			535,230			(6,346	)		1,714,464
Operating charges:
Salaries, wages and benefits		0			597,724			238,835			0			836,559
Other operating expenses		0			236,064			119,641			(6,251	)		349,454
Supplies expense		0			126,185			75,818			0			202,003
Depreciation and amortization		0			51,088			20,127			0			71,215
Lease and rental expense		0			15,325			7,766			(95	)		22,996
		0			1,026,386			462,187			(6,346	)		1,482,227
Income from operations		0			159,194			73,043			0			232,237
Interest expense, net		48,386			809			613			0			49,808
Interest (income) expense, affiliate		0			15,904			(15,904	)		0			0
Equity in net income of consolidated affiliates		(133,832	)		(38,049	)		0			171,881			0
Income before income taxes		85,446			180,530			88,334			(171,881	)		182,429
Provision for income taxes		(18,203	)		65,171			19,427			0			66,395
Net income		103,649			115,359			68,907			(171,881	)		116,034
Less: Income attributable to noncontrolling interests		0			0			12,385			0			12,385
Net income attributable to UHS	$	103,649		$	115,359		$	56,522		$	(171,881	)	$	103,649

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(amounts in thousands)

													Total
							Non			Consolidating			Consolidated
	Parent			Guarantors			Guarantors			Adjustments			Amounts
Net revenues before provision for doubtful accounts	$	0		$	2,550,935		$	1,206,560		$	(12,653	)	$	3,744,842
Less: Provision for doubtful accounts		0			170,756			133,364			0			304,120
Net revenues		0			2,380,179			1,073,196			(12,653	)		3,440,722
Operating charges:
Salaries, wages and benefits		0			1,190,926			476,391			0			1,667,317
Other operating expenses		0			467,052			234,222			(12,463	)		688,811
Supplies expense		0			253,889			151,393			0			405,282
Depreciation and amortization		0			101,721			39,088			0			140,809
Lease and rental expense		0			30,995			15,048			(190	)		45,853
		0			2,044,583			916,142			(12,653	)		2,948,072
Income from operations		0			335,596			157,054			0			492,650
Interest expense, net		103,256			1,602			1,367			0			106,225
Interest (income) expense, affiliate		0			31,808			(31,808	)		0			0
Equity in net income of consolidated affiliates		(281,440	)		(88,251	)		0			369,691			0
Income before income taxes		178,184			390,437			187,495			(369,691	)		386,425
Provision for income taxes		(39,658	)		140,132			39,930			0			140,404
Net income		217,842			250,305			147,565			(369,691	)		246,021
Less: Income attributable to noncontrolling interests		0			0			28,179			0			28,179
Net income attributable to UHS	$	217,842		$	250,305		$	119,386		$	(369,691	)	$	217,842

Condensed Consolidating Statements of Comprehensive Income

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2012

(amounts in thousands)

											Total
						Non		Consolidating			Consolidated
	Parent			Guarantors		Guarantors		Adjustments			Amounts
Net income	$	107,561		$	112,414	$	60,921	$	(163,452	)	$	117,444
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		212			0		0		0			212
Amortization of terminated hedge		(84	)		0		0		0			(84	)
Other comprehensive income before tax		128			0		0		0			128
Income tax expense related to items of other comprehensive income		50			0		0		0			50
Total other comprehensive income, net of tax		78			0		0		0			78
Comprehensive income		107,639			112,414		60,921		(163,452	)		117,522
Less: Comprehensive income attributable to noncontrolling interests		0			0		9,883		0			9,883
Comprehensive income attributable to UHS	$	107,639		$	112,414	$	51,038	$	(163,452	)	$	107,639

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(amounts in thousands)

											Total
						Non		Consolidating			Consolidated
	Parent			Guarantors		Guarantors		Adjustments			Amounts
Net income	$	236,168		$	248,596	$	136,257	$	(361,007	)	$	260,014
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		1,827			0		0		0			1,827
Amortization of terminated hedge		(168	)		0		0		0			(168	)
Other comprehensive income before tax		1,659			0		0		0			1,659
Income tax expense related to items of other comprehensive income		632			0		0		0			632
Total other comprehensive income, net of tax		1,027			0		0		0			1,027
Comprehensive income		237,195			248,596		136,257		(361,007	)		261,041
Less: Comprehensive income attributable to noncontrolling interests		0			0		23,846		0			23,846
Comprehensive income attributable to UHS	$	237,195		$	248,596	$	112,411	$	(361,007	)	$	237,195

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2011

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	103,649		$	115,359	$	68,907	$	(171,881	)	$	116,034
Other comprehensive income (loss):
Unrealized derivative losses on cash flow hedges		(20,583	)		0		0		0			(20,583	)
Amortization of terminated hedge		(84	)		0		0		0			(84	)
Other comprehensive income before tax		(20,667	)		0		0		0			(20,667	)
Income tax expense related to items of other comprehensive income		(7,916	)		0		0		0			(7,916	)
Total other comprehensive income, net of tax		(12,751	)		0		0		0			(12,751	)
Comprehensive income		90,898			115,359		68,907		(171,881	)		103,283
Less: Comprehensive income attributable to noncontrolling interests		0			0		12,385		0			12,385
Comprehensive income attributable to UHS	$	90,898		$	115,359	$	56,522	$	(171,881	)	$	90,898

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	217,842		$	250,305	$	147,565	$	(369,691	)	$	246,021
Other comprehensive income (loss):
Unrealized derivative losses on cash flow hedges		(18,276	)		0		0		0			(18,276	)
Amortization of terminated hedge		(168	)		0		0		0			(168	)
Other comprehensive income before tax		(18,444	)		0		0		0			(18,444	)
Income tax expense related to items of other comprehensive income		(7,056	)		0		0		0			(7,056	)
Total other comprehensive income, net of tax		(11,388	)		0		0		0			(11,388	)
Comprehensive income		206,454			250,305		147,565		(369,691	)		234,633
Less: Comprehensive income attributable to noncontrolling interests		0			0		28,179		0			28,179
Comprehensive income attributable to UHS	$	206,454		$	250,305	$	119,386	$	(369,691	)	$	206,454

Condensed Consolidating Balance Sheet

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2012

(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	23,148		$	9,793		$	0		$	32,941
Accounts receivable, net		3,786		705,845			310,298			0			1,019,929
Supplies		0		58,738			38,144			0			96,882
Other current assets		12,878		77,560			9,096			0			99,534
Deferred income taxes		81,565		41,230			322			(322	)		122,795
Current assets held for sale		0		84,365			0			0			84,365
Total current assets		98,229		990,886			367,653			(322	)		1,456,446
Investments in subsidiaries		5,504,955		1,251,474			0			(6,756,429	)		0
Intercompany receivable		475,833		0			129,403			(605,236	)		0
Intercompany note receivable		0		0			1,142,539			(1,142,539	)		0
Property and equipment		0		3,687,805			1,484,602			0			5,172,407
Less: accumulated depreciation		0		(1,205,261	)		(670,231	)		0			(1,875,492	)
		0		2,482,544			814,371			0			3,296,915
Other assets:
Goodwill		820		2,115,465			494,352			0			2,610,637
Deferred charges		91,728		5,986			8,381			0			106,095
Other		9,450		192,612			86,493			0			288,555
	$	6,181,015	$	7,038,967		$	3,043,192		$	(8,504,526	)	$	7,758,648
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	0	$	1,049		$	1,448		$	0		$	2,497
Accounts payable and accrued liabilities		27,519		620,332			204,405			0			852,256
Current liabilities held for sale		0		15,966			0			0			15,966
Federal and state taxes		12,072		201			620			0			12,893
Total current liabilities		39,591		637,548			206,473			0			883,612
Intercompany payable		0		605,236			0			(605,236	)		0
Other noncurrent liabilities		50,747		237,291			105,890			0			393,928
Long-term debt		3,405,069		1,411			52,029			0			3,458,509
Intercompany note payable		0		1,142,539			0			(1,142,539	)		0
Deferred income taxes		148,724		58,001			0			(322	)		206,403
Redeemable noncontrolling interests		0		0			226,537			0			226,537
UHS common stockholders’ equity		2,536,884		4,356,941			2,399,488			(6,756,429	)		2,536,884
Noncontrolling interest		0		0			52,775			0			52,775
Total equity		2,536,884		4,356,941			2,452,263			(6,756,429	)		2,589,659
	$	6,181,015	$	7,038,967		$	3,043,192		$	(8,504,526	)	$	7,758,648

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2011

(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	33,221		$	8,008		$	0		$	41,229
Accounts receivable, net		8,891		663,593			297,318			0			969,802
Supplies		0		59,467			37,308			0			96,775
Other current assets		33,057		56,864			9,938			0			99,859
Deferred income taxes		67,189		41,755			322			(942	)		108,324
Current assets held for sale		0		48,916			0			0			48,916
Total current assets		109,137		903,816			352,894			(942	)		1,364,905
Investments in subsidiaries		5,213,573		1,181,849			0			(6,395,422	)		0
Intercompany receivable		669,112		0			74,155			(743,267	)		0
Intercompany note receivable		0		0			1,148,839			(1,148,839	)		0
Property and equipment		0		3,650,025			1,456,135			0			5,106,160
Less: accumulated depreciation		0		(1,184,283	)		(633,897	)		0			(1,818,180	)
		0		2,465,742			822,238			0			3,287,980
Other assets:
Goodwill		820		2,132,103			494,679			0			2,627,602
Deferred charges		103,434		5,972			2,374			0			111,780
Other		10,412		241,107			21,459			0			272,978
	$	6,106,488	$	6,930,589		$	2,916,638		$	(8,288,470	)	$	7,665,245
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	0	$	1,133		$	1,346		$	0		$	2,479
Accounts payable and accrued liabilities		14,201		616,026			201,898			0			832,125
Current liabilities held for sale		0		2,329			0			0			2,329
Federal and state taxes		0		0			620			(620	)		0
Total current liabilities		14,201		619,488			203,864			(620	)		836,933
Intercompany payable		0		743,267			0			(743,267	)		0
Other noncurrent liabilities		49,840		249,033			103,035			0			401,908
Long-term debt		3,594,182		3,616			53,630			0			3,651,428
Intercompany note payable		0		1,148,839			0			(1,148,839	)		0
Deferred income taxes		151,913		58,001			0			(322	)		209,592
Redeemable noncontrolling interests		0		0			218,266			0			218,266
UHS common stockholders’ equity		2,296,352		4,108,345			2,287,077			(6,395,422	)		2,296,352
Noncontrolling interest		0		0			50,766			0			50,766
Total equity		2,296,352		4,108,345			2,337,843			(6,395,422	)		2,347,118
	$	6,106,488	$	6,930,589		$	2,916,638		$	(8,288,470	)	$	7,665,245

Condensed Consolidating Statements of Cash Flows

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by operating activities	$	2,144		$	279,941		$	90,777		$	0	$	372,862
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(153,894	)		(28,457	)		0		(182,351	)
Proceeds received from sale of assets and businesses		0			49,984			3,477			0		53,461
Acquisition of property and businesses		0			(11,476	)		0					(11,476	)
Costs incurred for purchase and development of electronic health records application		0			(28,008	)		0			0		(28,008	)
Return of deposit on terminated purchase agreement		6,500			0			0			0		6,500
Net cash used in investing activities		6,500			(143,394	)		(24,980	)		0		(161,874	)
Cash Flows from Financing Activities:
Reduction of long-term debt		(191,898	)		(2,289	)		(1,499	)		0		(195,686	)
Repurchase of common shares		(2,927	)		0			0			0		(2,927	)
Dividends paid		(9,673	)		0			0			0		(9,673	)
Issuance of common stock		2,575			0			0			0		2,575
Profit distributions to noncontrolling interests		0			0			(13,565	)		0		(13,565	)
Changes in intercompany balances with affiliates, net		193,279			(144,331	)		(48,948	)		0		0
Net cash (used in) provided by financing activities		(8,644	)		(146,620	)		(64,012	)		0		(219,276	)
Increase (decrease) in cash and cash equivalents		0			(10,073	)		1,785			0		(8,288	)
Cash and cash equivalents, beginning of period		0			33,221			8,008			0		41,229
Cash and cash equivalents, end of period	$	0		$	23,148		$	9,793		$	0	$	32,941

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by operating activities	$	13,222		$	298,741			43,813		$	0	$	355,776
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(88,240	)		(28,000	)		0		(116,240	)
Proceeds received from sale of assets and businesses		0			2,041			0			0		2,041
Costs incurred for purchase and development of electronic health records application		0			(11,416	)		0			0		(11,416	)
Net cash used in investing activities		0			(97,615	)		(28,000	)		0		(125,615	)
Cash Flows from Financing Activities:
Reduction of long-term debt		(188,161	)		(850	)		(11,555	)		0		(200,566	)
Additional borrowings		36,000			0			0			0		36,000
Financing costs		(23,534	)		0			0			0		(23,534	)
Repurchase of common shares		(6,163	)		0			0			0		(6,163	)
Dividends paid		(9,763	)		0			0			0		(9,763	)
Issuance of common stock		2,408			0			0			0		2,408
Profit distributions to noncontrolling interests		0			0			(23,201	)		0		(23,201	)
Changes in intercompany balances with affiliates, net		175,991			(194,187	)		18,196					0
Net cash (used in) provided by financing activities		(13,222	)		(195,037	)		(16,560	)		0		(224,819	)
Increase (decrease) in cash and cash equivalents		0			6,089			(747	)		0		5,342
Cash and cash equivalents, beginning of period		0			21,385			8,089			0		29,474
Cash and cash equivalents, end of period	$	0		$	27,474 $			7,342		$	0	$	34,816