Supplemental Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2013

Condensed Consolidating Statements of Income

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,451,793		$	690,311		$	(7,364	)	$	2,134,740
Less: Provision for doubtful accounts		0			188,151			130,220			0			318,371
Net revenues		0			1,263,642			560,091			(7,364	)		1,816,369
Operating charges:
Salaries, wages and benefits		0			646,595			256,617			0			903,212
Other operating expenses		0			255,295			145,222			(6,968	)		393,549
Supplies expense		0			128,284			78,711			0			206,995
Electronic health records incentive income		0			(16,089	)		(7,059	)		0			(23,148	)
Depreciation and amortization		0			60,615			26,356			0			86,971
Lease and rental expense		0			15,518			8,782			(396	)		23,904
		0			1,090,218			508,629			(7,364	)		1,591,483
Income from operations		0			173,424			51,462			0			224,886
Interest expense		30,853			840			621			0			32,314
Interest (income) expense, affiliate		0			24,391			(24,391	)		0			0
Equity in net income of consolidated affiliates		(133,630	)		(28,048	)		0			161,678			0
Income before income taxes		102,777			176,241			75,232			(161,678	)		192,572
Provision for (benefit from) income taxes		(11,810	)		62,429			18,854			0			69,473
Net income		114,587			113,812			56,378			(161,678	)		123,099
Less: Income attributable to noncontrolling interests		0			0			8,512			0			8,512
Net income attributable to UHS	$	114,587		$	113,812		$	47,866		$	(161,678	)	$	114,587

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	4,289,656		$	2,026,466		$	(21,372	)	$	6,294,750
Less: Provision for doubtful accounts		0			488,213			323,561			0			811,774
Net revenues		0			3,801,443			1,702,905			(21,372	)		5,482,976
Operating charges:
Salaries, wages and benefits		0			1,931,610			771,232			0			2,702,842
Other operating expenses		0			693,102			427,488			(20,472	)		1,100,118
Supplies expense		0			380,888			233,093			0			613,981
Electronic health records incentive income		0			(19,657	)		(8,286	)		0			(27,943	)
Depreciation and amortization		0			173,991			74,474			0			248,465
Lease and rental expense		0			46,729			26,822			(900	)		72,651
		0			3,206,663			1,524,823			(21,372	)		4,710,114
Income from operations		0			594,780			178,082			0			772,862
Interest expense		105,571			2,540			2,377			0			110,488
Interest (income) expense, affiliate		0			73,173			(73,173	)		0			0
Equity in net income of consolidated affiliates		(451,375	)		(98,326	)		0			549,701			0
Income before income taxes		345,804			617,393			248,878			(549,701	)		662,374
Provision for (benefit from) income taxes		(40,408	)		221,322			60,623			0			241,537
Net income		386,212			396,071			188,255			(549,701	)		420,837
Less: Income attributable to noncontrolling interests		0			0			34,625			0			34,625
Net income attributable to UHS	$	386,212		$	396,071		$	153,630		$	(549,701	)	$	386,212

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,269,429		$	605,991		$	(6,157	)	$	1,869,263
Less: Provision for doubtful accounts		0			110,187			78,723			0			188,910
Net revenues		0			1,159,242			527,268			(6,157	)		1,680,353
Operating charges:
Salaries, wages and benefits		0			595,546			242,529			0			838,075
Other operating expenses		0			236,218			132,531			(6,062	)		362,687
Supplies expense		0			118,357			73,390			0			191,747
Electronic health records incentive income		0			(3,109	)		(7,442	)		0			(10,551	)
Depreciation and amortization		0			52,985			24,047			0			77,032
Lease and rental expense		0			14,884			8,692			(95	)		23,481
Costs relating to extinguishment of debt		29,170			0			0			0			29,170
		29,170			1,014,881			473,747			(6,157	)		1,511,641
Income from operations		(29,170	)		144,361			53,521			0			168,712
Interest expense		43,649			886			672			0			45,207
Interest (income) expense, affiliate		0			22,782			(22,782	)		0			0
Equity in net income of consolidated affiliates		(116,764	)		(25,037	)		0			141,801			0
Income before income taxes		43,945			145,730			75,631			(141,801	)		123,505
Provision for (benefit from) income taxes		(27,872	)		50,012			19,992			0			42,132
Net income		71,817			95,718			55,639			(141,801	)		81,373
Less: Income attributable to noncontrolling interests		0			0			9,556			0			9,556
Net income attributable to UHS	$	71,817		$	95,718		$	46,083		$	(141,801	)	$	71,817

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	3,896,741		$	1,840,971		$	(19,036	)	$	5,718,676
Less: Provision for doubtful accounts		0			304,955			217,248			0			522,203
Net revenues		0			3,591,786			1,623,723			(19,036	)		5,196,473
Operating charges:
Salaries, wages and benefits		0			1,825,547			739,505			0			2,565,052
Other operating expenses		0			695,599			382,201			(18,752	)		1,059,048
Supplies expense		0			369,190			225,734			0			594,924
Electronic health records incentive income		0			(5,064	)		(7,442	)		0			(12,506	)
Depreciation and amortization		0			155,242			66,565			0			221,807
Lease and rental expense		0			44,122			27,068			(284	)		70,906
Costs related to extinguishment of debt		29,170			0			0			0			29,170
		29,170			3,084,636			1,433,631			(19,036	)		4,528,401
Income from operations		(29,170	)		507,150			190,092			0			668,072
Interest expense		133,101			2,511			2,193			0			137,805
Interest (income) expense, affiliate		0			68,347			(68,347	)		0			0
Equity in net income of consolidated affiliates		(408,146	)		(94,662	)		0			502,808			0
Income before income taxes		245,875			530,954			256,246			(502,808	)		530,267
Provision for (benefit from) income taxes		(62,110	)		186,641			64,349			0			188,880
Net income		307,985			344,313			191,897			(502,808	)		341,387
Less: Income attributable to noncontrolling interests		0			0			33,402			0			33,402
Net income attributable to UHS	$	307,985		$	344,313		$	158,495		$	(502,808	)	$	307,985

Condensed Consolidating Statements of Comprehensive Income

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	114,587		$	113,812	$	56,378	$	(161,678	)	$	123,099
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		3,054			0		0		0			3,054
Amortization of terminated hedge		(84	)		0		0		0			(84	)
Other comprehensive income before tax		2,970			0		0		0			2,970
Income tax expense related to items of other comprehensive income		1,120			0		0		0			1,120
Total other comprehensive income, net of tax		1,850			0		0		0			1,850
Comprehensive income		116,437			113,812		56,378		(161,678	)		124,949
Less: Comprehensive income attributable to noncontrolling interests		0			0		8,512		0			8,512
Comprehensive income attributable to UHS	$	116,437		$	113,812	$	47,866	$	(161,678	)	$	116,437

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	386,212		$	396,071	$	188,255	$	(549,701	)	$	420,837
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		12,871			0		0		0			12,871
Amortization of terminated hedge		(252	)		0		0		0			(252	)
Other comprehensive income before tax		12,619			0		0		0			12,619
Income tax expense related to items of other comprehensive income		4,758			0		0		0			4,758
Total other comprehensive income, net of tax		7,861			0		0		0			7,861
Comprehensive income		394,073			396,071		188,255		(549,701	)		428,698
Less: Comprehensive income attributable to noncontrolling interests		0			0		34,625		0			34,625
Comprehensive income attributable to UHS	$	394,073		$	396,071	$	153,630	$	(549,701	)	$	394,073

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	71,817		$	95,718	$	55,639	$	(141,801	)	$	81,373
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		(45	)		0		0		0			(45	)
Amortization of terminated hedge		(84	)		0		0		0			(84	)
Other comprehensive income before tax		(129	)		0		0		0			(129	)
Income tax expense related to items of other comprehensive income		(47	)		0		0		0			(47	)
Total other comprehensive income, net of tax		(82	)		0		0		0			(82	)
Comprehensive income		71,735			95,718		55,639		(141,801	)		81,291
Less: Comprehensive income attributable to noncontrolling interests		0			0		9,556		0			9,556
Comprehensive income attributable to UHS	$	71,735		$	95,718	$	46,083	$	(141,801	)	$	71,735

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	307,985		$	344,313	$	191,897	$	(502,808	)	$	341,387
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		1,782			0		0		0			1,782
Amortization of terminated hedge		(252	)		0		0		0			(252	)
Other comprehensive income before tax		1,530			0		0		0			1,530
Income tax expense related to items of other comprehensive income		585			0		0		0			585
Total other comprehensive income, net of tax		945			0		0		0			945
Comprehensive income		308,930			344,313		191,897		(502,808	)		342,332
Less: Comprehensive income attributable to noncontrolling interests		0			0		33,402		0			33,402
Comprehensive income attributable to UHS	$	308,930		$	344,313	$	158,495	$	(502,808	)	$	308,930

Condensed Consolidating Balance Sheet

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2013

(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	4,364		$	7,758		$	0		$	12,122
Accounts receivable, net		2,935		812,583			350,996			0			1,166,514
Supplies		0		63,431			37,818			0			101,249
Other current assets		2,344		78,183			10,244			0			90,771
Deferred income taxes		89,342		43,282			0			0			132,624
Total current assets		94,621		1,001,843			406,816			0			1,503,280
Investments in subsidiaries		6,232,854		1,422,158			0			(7,655,012	)		0
Intercompany receivable		395,486		0			500,227			(895,713	)		0
Intercompany note receivable		0		0			1,007,453			(1,007,453	)		0
Property and equipment		0		4,044,182			1,565,894			0			5,610,076
Less: accumulated depreciation		0		(1,434,744	)		(750,431	)		0			(2,185,175	)
		0		2,609,438			815,463			0			3,424,901
Other assets:
Goodwill		820		2,541,523			496,826			0			3,039,169
Deferred charges		54,160		6,002			2,457			0			62,619
Other		8,147		240,659			72,968			0			321,774
	$	6,786,088	$	7,821,623		$	3,302,210		$	(9,558,178	)	$	8,351,743
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	86,903	$	364		$	1,025		$	0		$	88,292
Accounts payable and accrued liabilities		39,282		714,033			173,453			0			926,768
Federal and state taxes		7,274		1,983			0			0			9,257
Total current liabilities		133,459		716,380			174,478			0			1,024,317
Intercompany payable		0		895,713			0			(895,713	)		0
Other noncurrent liabilities		15,326		199,061			105,827			0			320,214
Long-term debt		3,367,414		5,191			39,030			0			3,411,635
Intercompany note payable		0		1,007,453			0			(1,007,453	)		0
Deferred income taxes		159,111		55,915			0			0			215,026
Redeemable noncontrolling interests		0		0			218,080			0			218,080
UHS common stockholders’ equity		3,110,778		4,941,910			2,713,102			(7,655,012	)		3,110,778
Noncontrolling interest		0		0			51,693			0			51,693
Total equity		3,110,778		4,941,910			2,764,795			(7,655,012	)		3,162,471
	$	6,786,088	$	7,821,623		$	3,302,210		$	(9,558,178	)	$	8,351,743

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2012

(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	11,949		$	11,522		$	0		$	23,471
Accounts receivable, net		7,154		741,983			318,060			0			1,067,197
Supplies		0		61,100			37,900			0			99,000
Other current assets		2,188		75,117			10,631			0			87,936
Deferred income taxes		61,364		43,555			322			(780	)		104,461
Assets of facilities held for sale		0		0			25,431			0			25,431
Total current assets		70,706		933,704			403,866			(780	)		1,407,496
Investments in subsidiaries		5,781,479		1,323,832			0			(7,105,311	)		0
Intercompany receivable		644,105		0			360,538			(1,004,643	)		0
Intercompany note receivable		0		0			1,007,453			(1,007,453	)		0
Property and equipment		0		3,867,471			1,500,874			0			5,368,345
Less: accumulated depreciation		0		(1,288,975	)		(697,135	)		0			(1,986,110	)
		0		2,578,496			803,739			0			3,382,235
Other assets:
Goodwill		820		2,554,531			481,414			0			3,036,765
Deferred charges		67,831		5,839			2,218			0			75,888
Other		9,645		209,558			79,256			0			298,459
	$	6,574,586	$	7,605,960		$	3,138,484		$	(9,118,187	)	$	8,200,843
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	0	$	990		$	1,599		$	0		$	2,589
Accounts payable and accrued liabilities		10,985		740,484			138,088			0			889,557
Liabilities of facilities held for sale		0		0			850			0			850
Federal and state taxes		0		900			620			(458	)		1,062
Total current liabilities		10,985		742,374			141,157			(458	)		894,058
Intercompany payable		0		1,004,643			0			(1,004,643	)		0
Other noncurrent liabilities		46,048		243,478			105,829			0			395,355
Long-term debt		3,676,940		5,372			45,119			0			3,727,431
Intercompany note payable		0		1,007,453			0			(1,007,453	)		0
Deferred income taxes		127,268		56,801			0			(322	)		183,747
Redeemable noncontrolling interests		0		0			234,303			0			234,303
UHS common stockholders’ equity		2,713,345		4,545,839			2,559,472			(7,105,311	)		2,713,345
Noncontrolling interest		0		0			52,604			0			52,604
Total equity		2,713,345		4,545,839			2,612,076			(7,105,311	)		2,765,949
	$	6,574,586	$	7,605,960		$	3,138,484		$	(9,118,187	)	$	8,200,843

Condensed Consolidating Statements of Cash Flows

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by operating activities	$	9,438		$	341,031			241,263		$	0	$	591,732
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(202,758	)		(76,993	)		0		(279,751	)
Proceeds received from sale of assets and businesses		0			7,552			29,566			0		37,118
Acquisition of property and businesses		0			(1,320	)		0			0		(1,320	)
Costs incurred for purchase and implementation of electronic health records application		0			(42,353	)		0			0		(42,353	)
Net cash used in investing activities		0			(238,879	)		(47,427	)		0		(286,306	)
Cash Flows from Financing Activities:
Reduction of long-term debt		(226,761	)		(807	)		(6,663	)		0		(234,231	)
Additional borrowings		1,500			0			0			0		1,500
Repurchase of common shares		(22,186	)		0			0			0		(22,186	)
Dividends paid		(14,706	)		0			0			0		(14,706	)
Issuance of common stock		4,096			0			0			0		4,096
Profit distributions to noncontrolling interests		0			0			(51,248	)		0		(51,248	)
Changes in intercompany balances with affiliates, net		248,619			(108,930	)		(139,689	)		0		0
Net cash used in financing activities		(9,438	)		(109,737	)		(197,600	)		0		(316,775	)
Decrease in cash and cash equivalents		0			(7,585	)		(3,764	)		0		(11,349	)
Cash and cash equivalents, beginning of period		0			11,949			11,522			0		23,471
Cash and cash equivalents, end of period	$	0		$	4,364		$	7,758		$	0	$	12,122

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by (used in) operating activities	$	(7,607	)	$	379,574			163,039		$	0	$	535,006
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(236,978	)		(45,213	)		0		(282,191	)
Proceeds received from sale of assets and businesses		0			49,984			6,210			0		56,194
Acquisition of property and businesses		0			(11,476	)		(13,616	)		0		(25,092	)
Costs incurred for purchase and implementation of electronic health records application		0			(41,854	)		0			0		(41,854	)
Return of deposit on terminated purchase agreement		6,500			0			0			0		6,500
Net cash provided by (used in) investing activities		6,500			(240,324	)		(52,619	)		0		(286,443	)
Cash Flows from Financing Activities:
Reduction of long-term debt		(1,123,140	)		(2,567	)		(2,122	)		0		(1,127,829	)
Additional borrowings		906,000			0			0			0		906,000
Financing costs		(8,257	)		0			0			0		(8,257	)
Repurchase of common shares		(9,676	)		0			0			0		(9,676	)
Dividends paid		(14,519	)		0			0			0		(14,519	)
Issuance of common stock		3,828			0			0			0		3,828
Profit distributions to noncontrolling interests		0			0			(13,687	)		0		(13,687	)
Changes in intercompany balances with affiliates, net		246,871			(151,417	)		(95,454	)		0		0
Net cash provided by (used in) financing activities		1,107			(153,984	)		(111,263	)		0		(264,140	)
Decrease in cash and cash equivalents		0			(14,734	)		(843	)		0		(15,577	)
Cash and cash equivalents, beginning of period		0			33,221			8,008			0		41,229
Cash and cash equivalents, end of period	$	0		$	18,487		$	7,165		$	0	$	25,652