uhs-ex991

REPORTS 2019 SECOND QUARTER FINANCIAL RESULTS AND INCREASES TO STOCK REPURCHASE PROGRAM AND CASH DIVIDEND

Consolidated Results of Operations, As Reported and As Adjusted – Three-month periods ended June 30, 2019 and 2018:

KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $238.3 million, or $2.66 per diluted share, during the second quarter of 2019 as compared to $226.1 million, or $2.39 per diluted share, during the comparable quarter of 2018. Net revenues increased 6.5% to $2.855 billion during the second quarter of 2019 as compared to $2.681 billion during the second quarter of 2018.

For the three-month period ended June 30, 2019, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), was $247.2 million, or $2.76 per diluted share, as compared to $233.3 million, or $2.47 per diluted share, during the second quarter of 2018.

Included in our reported and our adjusted net income attributable to UHS is a pre-tax unrealized gain of $6.9 million, or $.06 per diluted share, during the second quarter of 2019, and $8.0 million, or $.06 per diluted share, during the second quarter of 2018. These unrealized gains, which are included in “Other (income) expense, net” on the accompanying consolidated statements of income, resulted from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale.

As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2019, is an aggregate net unfavorable after-tax impact of $8.9 million, or $.10 per diluted share, resulting from: (i) an unfavorable after-tax impact of $8.4 million, or $.09 per diluted share, resulting from an $11.0 million pre-tax increase in the reserve (“DOJ Reserve”) established in connection with the discussions with the Department of Justice (“DOJ”), which have recently resulted in an agreement in principle with the DOJ’s Civil Division (which is subject to certain conditions as discussed below), and; (ii) an unfavorable after-tax impact of $509,000, or $.01 per diluted share, resulting from our adoption of ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”).

As reflected on the Supplemental Schedule, included in our reported results during the second quarter of 2018, is a net aggregate unfavorable after-tax impact of $7.3 million, or $.08 per diluted share, substantially all of which related to the unfavorable after-tax impact of $7.2 million, or $.08 per diluted share, resulting from a $9.5 million pre-tax increase in the DOJ Reserve.

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 $471.5 million during the second quarter of 2019 as compared to $444.7 million during the second quarter of 2018. Our adjusted earnings before interest, taxes, depreciation & amortization (“Adjusted EBITDA net of NCI”), which excludes the impacts of our adoption of ASU 2016-09, other (income) expense, net, as well as the unfavorable impacts of the above-mentioned increases in the DOJ Reserve, was $474.8 million during the second quarter of 2019 as compared to $438.8 million during the second quarter of 2018.

Consolidated Results of Operations, As Reported and As Adjusted – Six-month periods ended June 30, 2019 and 2018:

Reported net income attributable to UHS was $472.5 million, or $5.23 per diluted share, during the six-month period ended June 30, 2019 as compared to $449.9 million, or $4.76 per diluted share, during the comparable six-month period of 2018. Net revenues increased 5.4% to $5.660 billion during the first six months of 2019 as compared to $5.369 billion during the first six months of 2018.

For the six-month period ended June 30, 2019, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $470.5 million, or $5.21 per diluted share, as compared to $465.5 million, or $4.92 per diluted share, during the comparable six-month period of 2018.

Included in our reported and our adjusted net income attributable to UHS is a pre-tax unrealized gain of $2.6 million, or $.02 per diluted share, during the first six months of 2019, and $8.0 million, or $.06 per diluted share, during the comparable six-month period of 2018. As discussed above, these unrealized gains resulted from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale.

As reflected on the Supplemental Schedule, included in our reported results during the six-month period ended June 30, 2019, is an aggregate net favorable after-tax impact of $2.0 million, or $.02 per diluted share, resulting from: (i) an unfavorable after-tax impact of $8.4 million, or $.09 per diluted share, resulting from an $11.0 million pre-tax increase in the DOJ Reserve, offset by; (ii) a favorable after-tax impact of $10.4 million, or $.11 per diluted share, resulting from our adoption of ASU 2016-09.

As reflected on the Supplemental Schedule, included in our reported results during the six-month period ended June 30, 2018, is a net aggregate unfavorable after-tax impact of $15.6 million, or $.16 per diluted share, consisting of: (i) an unfavorable after-tax impact of $17.1 million, or $.18 per diluted share, resulting from a $22.5 million pre-tax increase in the DOJ Reserve, partially offset by; (ii) a favorable after-tax impact of $1.5 million, or $.02 per diluted share, resulting from our adoption of ASU 2016-09.

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 $924.3 million during the six-month period ended June 30, 2019 as compared to $886.8 million during the six-month period ended June 30, 2018. Our adjusted earnings before interest, taxes, depreciation & amortization (“Adjusted EBITDA net of NCI”), which excludes the impacts of our adoption of ASU 2016-09, other (income) expense, net, as well as the unfavorable impacts of the above-

mentioned increases in the DOJ Reserve, was $932.0 million during the six-month period ended June 30, 2019 as compared to $893.9 million during the six-month period ended June 30, 2018.

Acute Care Services – Three and six-month periods ended June 30, 2019 and 2018:

During the second quarter of 2019, at our acute care hospitals owned during both periods (“same facility basis”), adjusted admissions (adjusted for outpatient activity) increased 5.0% and adjusted patient days increased 5.2%, as compared to the second quarter of 2018. At these facilities, net revenue per adjusted admission increased 3.5% while net revenue per adjusted patient day increased 3.3% during the second quarter of 2019 as compared to the second quarter of 2018. Net revenues from our acute care services on a same facility basis increased 9.0% during the second quarter of 2019 as compared to the second quarter of 2018.

During the six-month period ended June 30, 2019, at our acute care hospitals on a same facility basis, adjusted admissions increased 5.0% and adjusted patient days increased 4.8%, as compared to the first six months of 2018. At these facilities, net revenue per adjusted admission increased 1.5% while net revenue per adjusted patient day increased 1.6% during the six-month period ended June 30, 2019 as compared to the comparable six-month period of 2018. Net revenues from our acute care services on a same facility basis increased 6.8% during the first six months of 2019 as compared to the first six months of 2018.

Behavioral Health Care Services – Three and six-month periods ended June 30, 2019 and 2018:

During the second quarter of 2019, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 0.5% while adjusted patient days increased 0.3% as compared to the second quarter of 2018. At these facilities, net revenue per adjusted admission increased 2.2% while net revenue per adjusted patient day increased 2.4% during the second quarter of 2019 as compared to the comparable quarter in 2018. On a same facility basis, our behavioral health care services’ net revenues increased 2.7% during the second quarter of 2019 as compared to the second quarter of 2018.

During the six-month period ended June 30, 2019, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 1.7% while adjusted patient days increased 0.6% as compared to the comparable six-month period of 2018. At these facilities, net revenue per adjusted admission increased 1.3% while net revenue per adjusted patient day increased 2.4% during the first six months of 2019 as compared to the comparable six-month period in 2018. On a same facility basis, our behavioral health care services’ net revenues increased 2.9% during the six-month period ended June 30, 2019 as compared to the comparable six-month period of 2018.

For the six months ended June 30, 2019, our net cash provided by operating activities increased to $624 million as compared to $607 million generated during the comparable six-month period of 2018. The $17 million net increase was due to: (i) a favorable change of $40 million resulting from an increase in net income plus/minus depreciation and amortization expense, stock-based compensation expense and net gains on sale of assets and businesses; (ii) an unfavorable change of $37 million in accounts receivable, and; (iii) $14 million of other combined net favorable changes.

In conjunction with our January 1, 2019 adoption of ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities”, we have included the net cash inflows or outflows, which were received or paid in connection with foreign exchange contracts that hedge our investment in the U.K., in investing cash flows on the consolidated statements of cash flows. Prior to 2019, these net

inflows/outflows were included in operating cash flows. Prior period amounts have been reclassified to conform with current year presentation on the consolidated statements of cash flows included herein.

On July 25, 2019, our Board of Directors authorized a $1.0 billion increase to our stock repurchase program, which increased the aggregate authorization to $2.7 billion from the previous $1.7 billion authorization approved in various increments since 2014. Pursuant to this program, which currently has an aggregate available repurchase authorization of $1.017 billion, 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.

In conjunction with our previously approved stock repurchase programs, during the second quarter of 2019, we have repurchased approximately 2.72 million shares at an aggregate cost of $339.2 million (approximately $125 per share). During the first six months of 2019, we have repurchased approximately 3.56 million shares at an aggregate cost of $445.6 million (approximately $125 per share). Since inception of the program in 2014 through June 30, 2019, we have repurchased approximately 14.23 million shares at an aggregate cost of approximately $1.68 billion (approximately $118 per share).

Also on July 25, 2019, our Board of Directors authorized a $.10 per share increase in our cash dividend to $.20 per share. This cash dividend will be paid on September 16, 2019 to shareholders of record as of September 3, 2019.

We have recently reached an agreement in principle with the DOJ’s Civil Division, and on behalf of various states’ attorneys general offices, to resolve the civil aspect of the government’s investigation of our behavioral health care facilities for $127 million subject to requisite approvals and preparation and execution of definitive settlement and related agreements. We have further been advised that the previously disclosed investigations being conducted by the DOJ’s Criminal Frauds Section in connection with these matters have been closed. We are awaiting the initial draft of a potential corporate integrity agreement with the Office of Inspector General for the United States Department of Health and Human Services (“OIG”) which we expect will be part of the overall settlement of this matter.

In connection with the agreement in principle with the DOJ’s Civil Division, during the three and six-month periods ended June 30, 2019, we recorded a pre-tax increase of approximately $11.0 million in the DOJ Reserve, which includes related fees and costs due to or on behalf of third-parties. The aggregate pre-tax DOJ Reserve amounted to $134 million as of June 30, 2019 and $123 million as of December 31, 2018. Our financial statements assume that the amounts included in the aggregate pre-tax DOJ Reserve are fully deductible for federal and state income tax purposes.

Since the agreement in principle with the DOJ’s Civil Division is subject to certain required approvals and negotiation and execution of definitive settlement agreements, as well as negotiation and execution of a potential corporate integrity agreement with the OIG, we can provide no assurance that definitive agreements will ultimately be finalized. We therefore can provide no assurance that final amounts paid in settlement or otherwise, or associated costs, or the income tax deductibility of such payments, will not differ materially from our established reserve and assumptions related to income tax deductibility. Please see Item 1-Legal Proceedings in our Form 10-Q for the quarterly period ended March 31, 2019 for additional disclosure in connection with this matter.

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on July 26, 2019. The dial-in number is 1-877-648-7971.

A live broadcast of the conference call will be available on our website at www.uhsinc.com. Also, a replay of the call will be available following the conclusion of the live call and will be available for one full year.

Adoption of ASU 2016-02, “Leases (Topic 842): Amendments to the FASB Accounting Standards Codification”:

Effective January 1, 2019, we adopted ASU 2016-02 which requires companies to, among other things, recognize lease assets and lease liabilities on the balance sheet. As a result of our adoption of ASU 2016-02, our consolidated balance sheet as of June 30, 2019 includes right of use assets-operating leases ($332.1 million) and operating lease liabilities ($56.4 million current and $275.7 million noncurrent). Prior period financial statements were not adjusted for the effects of this new standard.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:

One of the nation’s largest and most respected hospital companies, Universal Health Services, Inc. (“UHS”) has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues were $10.77 billion during 2018. In 2019, UHS was again recognized as one of the World’s Most Admired Companies by Fortune; ranked #293 on the Fortune 500; and in 2017, listed #275 in Forbes inaugural ranking of America’s Top 500 Public Companies.

Our operating philosophy is as effective today as it was 40 years ago, enabling us to provide compassionate care to our patients and their loved ones. Our mission 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 more than 87,000 employees and through its subsidiaries operates 353 inpatient acute care hospitals and behavioral health facilities and 38 outpatient and other facilities located in 37 states, Washington, D.C., Puerto Rico and the United Kingdom. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT). For additional information on the Company, visit our web site: http://www.uhsinc.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 in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2018 and in Item 2-Forward-Looking Statements and Risk Factors in our Form 10-Q for the quarterly period ended March 31, 2019), may cause the results to differ materially from those anticipated in the forward-looking statements. Many of the factors that will determine our future results are beyond our capability to control or predict. 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.

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 in each year of material items impacting our net income attributable to UHS, such as, changes in the reserve established in connection with our discussions with the Department of Justice, our adoption of ASU 2016-09 and other potential material items that are nonrecurring or non-operational in nature including, but not limited to, impairments of 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, 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 Reports on Form 10-K for the year ended December 31, 2018 and Form 10-Q for the quarterly period ended March 31, 2019. 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						Six months
	ended June 30,						ended June 30,
	2019			2018			2019			2018
Net revenues	$	2,855,168			2,681,353		$	5,659,559			5,368,869

Operating charges:
Salaries, wages and benefits		1,383,481			1,305,974			2,749,027			2,606,122
Other operating expenses		672,564			624,484			1,317,344			1,245,303
Supplies expense		305,857			289,733			613,320			582,662
Depreciation and amortization		121,168			109,581			241,208			222,684
Lease and rental expense		26,535			27,119			52,660			53,822
		2,509,605			2,356,891			4,973,559			4,710,593

Income from operations		345,563			324,462			686,000			658,276
Interest expense, net		42,487			38,000			82,127			75,576
Other (income) expense, net		(7,732	)		(15,308	)		(3,231	)		(15,308	)
Income before income taxes		310,808			301,770			607,104			598,008
Provision for income taxes		69,543			71,059			128,441			138,628
Net income		241,265			230,711			478,663			459,380
Less: Net income attributable to noncontrolling interests		2,945			4,659			6,175			9,496
Net income attributable to UHS	$	238,320		$	226,052		$	472,488		$	449,884

Basic earnings per share attributable to UHS (a)	$	2.67		$	2.40		$	5.24		$	4.78

Diluted earnings per share attributable to UHS (a)	$	2.66		$	2.39		$	5.23		$	4.76

Universal Health Services, Inc.
Footnotes to Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)

	Three months						Six months
	ended June 30,						ended June 30,
	2019			2018			2019			2018
(a) Earnings per share calculation:

Basic and diluted:
Net income attributable to UHS	$	238,320		$	226,052		$	472,488		$	449,884
Less: Net income attributable to unvested restricted share grants		(656	)		(392	)		(1,171	)		(496	)
Net income attributable to UHS - basic and diluted	$	237,664		$	225,660		$	471,317		$	449,388

Weighted average number of common shares - basic		89,136			93,842			89,956			94,034

Basic earnings per share attributable to UHS:	$	2.67		$	2.40		$	5.24		$	4.78

Weighted average number of common shares		89,136			93,842			89,956			94,034
Add: Other share equivalents		99			439			145			448
Weighted average number of common shares and equiv. - diluted		89,235			94,281			90,101			94,482

Diluted earnings per share attributable to UHS:	$	2.66		$	2.39		$	5.23		$	4.76

Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule")
For the Three Months ended June 30, 2019 and 2018
(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
	June 30, 2019			revenues			June 30, 2018			revenues
Net income attributable to UHS	$	238,320					$	226,052
Depreciation and amortization		121,168						109,581
Interest expense, net		42,487						38,000
Provision for income taxes		69,543						71,059
EBITDA net of NCI	$	471,518			16.5	%	$	444,692			16.6	%

Other (income) expense, net		(7,732	)					(15,308	)
Increase in DOJ Reserve		10,978						9,451
Adjusted EBITDA net of NCI	$	474,764			16.6	%	$	438,835			16.4	%

Net revenues	$	2,855,168					$	2,681,353

Calculation of Adjusted Net Income Attributable to UHS

	Three months ended						Three months ended
	June 30, 2019						June 30, 2018
				Per						Per
	Amount			Diluted Share			Amount			Diluted Share
Net income attributable to UHS	$	238,320		$	2.66		$	226,052		$	2.39
Plus/minus after-tax adjustments:
Increase in DOJ Reserve, after-tax		8,369			0.09			7,205			0.08
Impact of ASU 2016-09		509			0.01			61			-
Subtotal adjustments	$	8,878		$	0.10		$	7,266		$	0.08
Adjusted net income attributable to UHS	$	247,198		$	2.76		$	233,318		$	2.47

Universal Health Services, Inc.
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule")
For the Six Months ended June 30, 2019 and 2018
(in thousands, except per share amounts)
(unaudited)



Calculation of Earnings/Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA/Adjusted EBITDA net of NCI")

	Six months ended			% Net			Six months ended			% Net
	June 30, 2019			revenues			June 30, 2018			revenues
Net income attributable to UHS	$	472,488					$	449,884
Depreciation and amortization		241,208						222,684
Interest expense, net		82,127						75,576
Provision for income taxes		128,441						138,628
EBITDA net of NCI	$	924,264			16.3	%	$	886,772			16.5	%

Other (income) expense, net		(3,231	)					(15,308	)
Increase in DOJ Reserve		10,978						22,451
Adjusted EBITDA net of NCI	$	932,011			16.5	%	$	893,915			16.6	%

Net revenues	$	5,659,559					$	5,368,869

Calculation of Adjusted Net Income Attributable to UHS

	Six months ended						Six months ended
	June 30, 2019						June 30, 2018
				Per						Per
	Amount			Diluted Share			Amount			Diluted Share
Net income attributable to UHS	$	472,488		$	5.23		$	449,884		$	4.76
Plus/minus after-tax adjustments:
Increase in DOJ Reserve, after-tax		8,369			0.09			17,116			0.18
Impact of ASU 2016-09		(10,398	)		(0.11	)		(1,537	)		(0.02	)
Subtotal adjustments	$	(2,029	)	$	(0.02	)	$	15,579		$	0.16
Adjusted net income attributable to UHS	$	470,459		$	5.21		$	465,463		$	4.92

Universal Health Services, Inc.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)

	Three months						Six months
	ended June 30,						ended June 30,
	2019			2018			2019			2018
Net income	$	241,265		$	230,711		$	478,663		$	459,380
Other comprehensive income (loss):
Unrealized derivative gains (losses) on cash flow hedges		(1,008	)		(545	)		(3,925	)		1,579
Foreign currency translation adjustment		5,159			1,184			(9,103	)		(3,157	)
Other		0			(2,367	)		0			0
Other comprehensive income (loss) before tax		4,151			(1,728	)		(13,028	)		(1,578	)
Income tax expense (benefit) related to items of other comprehensive income (loss)		1,616			(702	)		(850	)		375
Total other comprehensive income (loss), net of tax		2,535			(1,026	)		(12,178	)		(1,953	)

Comprehensive income		243,800			229,685			466,485			457,427
Less: Comprehensive income attributable to noncontrolling interests		2,945			4,659			6,175			9,496
Comprehensive income attributable to UHS	$	240,855		$	225,026		$	460,310		$	447,931

Universal Health Services, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

	June 30,			December 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	61,297		$	105,220
Accounts receivable, net		1,601,352			1,509,909
Supplies		153,574			148,206
Other current assets		148,809			174,467
Total current assets		1,965,032			1,937,802

Property and equipment		8,859,104			8,563,455
Less: accumulated depreciation		(3,914,406	)		(3,715,515	)
		4,944,698			4,847,940
Other assets:
Goodwill		3,843,429			3,844,628
Deferred income taxes		15,747			5,280
Right of use assets-operating leases		332,135			0
Deferred charges		7,533			8,772
Other		644,076			621,058
Total Assets	$	11,752,650		$	11,265,480

Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt	$	91,833		$	63,446
Accounts payable and accrued liabilities		1,253,760			1,253,714
Legal reserves		141,750			129,150
Operating lease liabilities		56,447			0
Federal and state taxes		479			2,428
Total current liabilities		1,544,269			1,448,738

Other noncurrent liabilities		369,229			361,809
Operating lease liabilities noncurrent		275,688			0
Long-term debt		4,057,121			3,935,187
Deferred income taxes		37,906			49,661

Redeemable noncontrolling interest		3,986			4,292

UHS common stockholders' equity		5,393,089			5,389,262
Noncontrolling interest		71,362			76,531
Total equity		5,464,451			5,465,793

Total Liabilities and Stockholders' Equity	$	11,752,650		$	11,265,480

Universal Health Services, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Six months
	ended June 30,
	2019			2018
Cash Flows from Operating Activities:
Net income	$	478,663		$	459,380
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation & amortization		241,208			222,716
Stock-based compensation expense		34,676			34,716
Gain on sale of assets and businesses		0			(2,513	)
Changes in assets & liabilities, net of effects from acquisitions and dispositions:
Accounts receivable		(101,329	)		(64,055	)
Accrued interest		948			199
Accrued and deferred income taxes		(16,846	)		(42,540	)
Other working capital accounts		30,082			8,977
Other assets and deferred charges		(1,333	)		(14,144	)
Other		(49,687	)		(3,422	)
Accrued insurance expense, net of commercial premiums paid		51,819			46,255
Payments made in settlement of self-insurance claims		(44,115	)		(38,606	)
Net cash provided by operating activities		624,086			606,963
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		(323,920	)		(370,252	)
Acquisition of property and businesses		0			(20,931	)
Inflows (outflows) from foreign exchange contracts that hedge our net U.K. investment		53,363			22,298
Proceeds received from sales of assets and businesses		0			13,502
Costs incurred for purchase and implementation of information technology applications		(13,893	)		(24,087	)
Increase in capital reserves of commercial insurance subsidiary		0			100
Investment in, and advances to, joint venture and other		(11,949	)		(14,059	)
Net cash used in investing activities		(296,399	)		(393,429	)
Cash Flows from Financing Activities:
Reduction of long-term debt		(28,617	)		(82,470	)
Additional borrowings		177,200			30,500
Financing costs		0			(754	)
Repurchase of common shares		(494,649	)		(134,784	)
Dividends paid		(17,953	)		(18,804	)
Issuance of common stock		5,271			4,959
Profit distributions to noncontrolling interests		(11,650	)		(7,914	)
Net cash used in financing activities		(370,398	)		(209,267	)

Effect of exchange rate changes on cash, cash equivalents and restricted cash		(273	)		(1,138	)
(Decrease) Increase in cash, cash equivalents and restricted cash		(42,984	)		3,129
Cash, cash equivalents and restricted cash, beginning of period		199,685			167,297
Cash, cash equivalents and restricted cash, end of period	$	156,701		$	170,426
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	78,623		$	70,890
Income taxes paid, net of refunds	$	145,604		$	182,130
Noncash purchases of property and equipment	$	71,923		$	91,742
Right-of-use assets obtained in exchange for lease obligations	$	359,329		$	-

Universal Health Services, Inc.
Supplemental Statistical Information
(unaudited)


	% Change			% Change
Same Facility:	quarter ended			Six months ended
	6/30/2019			6/30/2019
Acute Care Services
Revenues		9.0	%		6.8	%
Adjusted Admissions		5.0	%		5.0	%
Adjusted Patient Days		5.2	%		4.8	%
Revenue Per Adjusted Admission		3.5	%		1.5	%
Revenue Per Adjusted Patient Day		3.3	%		1.6	%

Behavioral Health Care Services
Revenues		2.7	%		2.9	%
Adjusted Admissions		0.5	%		1.7	%
Adjusted Patient Days		0.3	%		0.6	%
Revenue Per Adjusted Admission		2.2	%		1.3	%
Revenue Per Adjusted Patient Day		2.4	%		2.4	%




UHS Consolidated	Second quarter ended						Six months ended
	6/30/2019			6/30/2018			6/30/2019			6/30/2018
Revenues	$	2,855,168		$	2,681,353		$	5,659,559		$	5,368,869
EBITDA net of NCI	$	471,518		$	444,692		$	924,264		$	886,772
EBITDA Margin net of NCI		16.5	%		16.6	%		16.3	%		16.5	%
Adjusted EBITDA net of NCI	$	474,764		$	438,835		$	932,011		$	893,915
Adjusted EBITDA Margin net of NCI		16.6	%		16.4	%		16.5	%		16.6	%

Cash Flow From Operations	$	233,185		$	197,059		$	624,086		$	606,963
Days Sales Outstanding		51			53			51			53
Capital Expenditures	$	154,072		$	181,211		$	323,920		$	370,252

Debt							$	4,148,954		$	3,990,464
UHS' Shareholders Equity							$	5,393,089		$	5,317,583
Debt / Total Capitalization								43.5	%		42.9	%
Debt / EBITDA net of NCI (1)								2.50			2.35
Debt / Adjusted EBITDA net of NCI (1)								2.31			2.34
Debt / Cash From Operations (1)								3.21			3.12

(1) Latest 4 quarters

Same Facility Basis - Acute Care Hospital Services

	Three months ended						Three months ended						Six months ended						Six months ended
	June 30, 2019						June 30, 2018						June 30, 2019						June 30, 2018
	Amount			% of Net Revenues			Amount			% of Net Revenues			Amount			% of Net Revenues			Amount			% of Net Revenues
Net revenues	$	1,498,493			100.0	%	$	1,374,725			100.0	%	$	2,989,355			100.0	%		2,798,502			100.0	%
Operating charges:
Salaries, wages and benefits		623,218			41.6	%		584,126			42.5	%		1,241,909			41.5	%		1,165,894			41.7	%
Other operating expenses		339,507			22.7	%		308,660			22.5	%		671,392			22.5	%		616,841			22.0	%
Supplies expense		255,322			17.0	%		240,118			17.5	%		513,033			17.2	%		483,271			17.3	%
Depreciation and amortization		75,368			5.0	%		67,165			4.9	%		149,596			5.0	%		139,315			5.0	%
Lease and rental expense		14,654			1.0	%		14,708			1.1	%		28,910			1.0	%		28,991			1.0	%
Subtotal-operating expenses		1,308,069			87.3	%		1,214,777			88.4	%		2,604,840			87.1	%		2,434,312			87.0	%
Income from operations		190,424			12.7	%		159,948			11.6	%		384,515			12.9	%		364,190			13.0	%
Interest expense, net		244			0.0	%		431			0.0	%		523			0.0	%		962			0.0	%
Other (income) expense, net		(45	)		(0.0	)%		(2,498	)		(0.2	)%		(45	)		(0.0	)%		(2,498	)		(0.1	)%
Income before income taxes	$	190,225			12.7	%	$	162,015			11.8	%	$	384,037			12.8	%	$	365,726			13.1	%

All Acute Care Hospital Services

	Three months ended						Three months ended						Six months ended						Six months ended
	June 30, 2019						June 30, 2018						June 30, 2019						June 30, 2018
	Amount			% of Net Revenues			Amount			% of Net Revenues			Amount			% of Net Revenues			Amount			% of Net Revenues
Net revenues	$	1,531,709			100.0	%	$	1,403,991			100.0	%	$	3,046,553			100.0	%		2,849,623			100.0	%
Operating charges:
Salaries, wages and benefits		624,035			40.7	%		584,126			41.6	%		1,243,352			40.8	%		1,165,894			40.9	%
Other operating expenses		373,069			24.4	%		337,926			24.1	%		729,300			23.9	%		667,962			23.4	%
Supplies expense		255,703			16.7	%		240,118			17.1	%		513,847			16.9	%		483,271			17.0	%
Depreciation and amortization		75,810			4.9	%		67,165			4.8	%		150,171			4.9	%		139,315			4.9	%
Lease and rental expense		14,736			1.0	%		14,708			1.0	%		29,035			1.0	%		28,991			1.0	%
Subtotal-operating expenses		1,343,353			87.7	%		1,244,043			88.6	%		2,665,705			87.5	%		2,485,433			87.2	%
Income from operations		188,356			12.3	%		159,948			11.4	%		380,848			12.5	%		364,190			12.8	%
Interest expense, net		244			0.0	%		431			0.0	%		523			0.0	%		962			0.0	%
Other (income) expense, net		(45	)		(0.0	)%		(2,498	)		(0.2	)%		(45	)		(0.0	)%		(2,498	)		(0.1	)%
Income before income taxes	$	188,157			12.3	%	$	162,015			11.5	%	$	380,370			12.5	%	$	365,726			12.8	%

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 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, 2018 and Form 10-Q for the quarter ended March 31, 2019.

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.

Same Facility - Behavioral Health Care Services

	Three months ended					Three months ended						Six months ended					Six months ended
	June 30, 2019					June 30, 2018						June 30, 2019					June 30, 2018
	Amount		% of Net Revenues			Amount			% of Net Revenues			Amount		% of Net Revenues			Amount			% of Net Revenues
Net revenues	$	1,272,249		100.0	%		1,238,263			100.0	%	$	2,513,474		100.0	%		2,443,311			100.0	%
Operating charges:
Salaries, wages and benefits		664,547		52.2	%		642,368			51.9	%		1,320,133		52.5	%		1,273,199			52.1	%
Other operating expenses		234,563		18.4	%		233,585			18.9	%		468,987		18.7	%		464,171			19.0	%
Supplies expense		49,499		3.9	%		48,808			3.9	%		98,117		3.9	%		97,551			4.0	%
Depreciation and amortization		39,095		3.1	%		37,734			3.0	%		78,967		3.1	%		74,472			3.0	%
Lease and rental expense		11,006		0.9	%		11,528			0.9	%		21,923		0.9	%		23,224			1.0	%
Subtotal-operating expenses		998,710		78.5	%		974,023			78.7	%		1,988,127		79.1	%		1,932,617			79.1	%
Income from operations		273,539		21.5	%		264,240			21.3	%		525,347		20.9	%		510,694			20.9	%
Interest expense, net		369		0.0	%		410			0.0	%		744		0.0	%		837			0.0	%
Other (income) expense, net		-		-			-			-			-		—			-			-
Income before income taxes	$	273,170		21.5	%	$	263,830			21.3	%	$	524,603		20.9	%	$	509,857			20.9	%


All Behavioral Health Care Services

	Three months ended					Three months ended						Six months ended					Six months ended
	June 30, 2019					June 30, 2018						June 30, 2019					June 30, 2018
	Amount		% of Net Revenues			Amount			% of Net Revenues			Amount		% of Net Revenues			Amount			% of Net Revenues
Net revenues	$	1,320,241		100.0	%		1,274,083			100.0	%	$	2,606,624		100.0	%		2,512,079			100.0	%
Operating charges:
Salaries, wages and benefits		683,948		51.8	%		651,852			51.2	%		1,359,647		52.2	%		1,293,980			51.5	%
Other operating expenses		265,785		20.1	%		259,959			20.4	%		527,922		20.3	%		516,361			20.6	%
Supplies expense		49,986		3.8	%		49,470			3.9	%		99,117		3.8	%		99,006			3.9	%
Depreciation and amortization		42,339		3.2	%		39,777			3.1	%		84,891		3.3	%		78,231			3.1	%
Lease and rental expense		11,719		0.9	%		12,256			1.0	%		23,363		0.9	%		24,557			1.0	%
Subtotal-operating expenses		1,053,777		79.8	%		1,013,314			79.5	%		2,094,940		80.4	%		2,012,135			80.1	%
Income from operations		266,464		20.2	%		260,769			20.5	%		511,684		19.6	%		499,944			19.9	%
Interest expense, net		369		0.0	%		410			0.0	%		744		0.0	%		837			0.0	%
Other (income) expense, net		109		0.0	%		(1,085	)		(0.00	)		786		0.0	%		(1,085	)		(0.00	)
Income before income taxes	$	265,986		20.1	%	$	261,444			20.5	%	$	510,154		19.6	%	$	500,192			19.9	%

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 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 in the condensed consolidated financial statements and notes thereto as contained in our Form 10-K for the year ended December 31, 2018 and Form 10-Q for the quarter ened March 31, 2019.

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 as well as the results of certain facilities that were closed or restructured during the past year.

Universal Health Services, Inc.
Selected Hospital Statistics
For the three months ended
June 30, 2019 and 2018


AS REPORTED:
	ACUTE									BEHAVIORAL HEALTH
	06/30/19			06/30/18			% change			06/30/19			06/30/18			% change

Hospitals owned and leased		26			26			0.0	%		327			301			8.6	%
Average licensed beds		6,371			6,213			2.5	%		23,798			23,262			2.3	%
Average available beds		6,195			6,037			2.6	%		23,698			23,178			2.2	%
Patient days		357,894			339,697			5.4	%		1,632,531			1,605,977			1.7	%
Average daily census		3,932.9			3,733.1			5.4	%		17,939.9			17,648.1			1.7	%
Occupancy-licensed beds		61.7	%		60.1	%		2.7	%		75.4	%		75.9	%		-0.6	%
Occupancy-available beds		63.5	%		61.8	%		2.7	%		75.7	%		76.1	%		-0.6	%
Admissions		78,879			74,997			5.2	%		121,687			120,469			1.0	%
Length of stay		4.5			4.5			0.2	%		13.4			13.3			0.6	%

Inpatient revenue	$	7,051,925		$	6,164,010			14.4	%	$	2,547,626		$	2,448,894			4.0	%
Outpatient revenue		4,402,308			3,760,326			17.1	%		268,693			267,537			0.4	%
Total patient revenue		11,454,233			9,924,336			15.4	%		2,816,319			2,716,431			3.7	%
Other revenue		114,017			100,171			13.8	%		62,140			51,145			21.5	%
Gross hospital revenue		11,568,250			10,024,507			15.4	%		2,878,459			2,767,576			4.0	%
Total deductions		10,036,541			8,620,516			16.4	%		1,558,218			1,493,493			4.3	%
Net hospital revenue	$	1,531,709		$	1,403,991			9.1	%	$	1,320,241		$	1,274,083			3.6	%

SAME FACILITY:
	ACUTE									BEHAVIORAL HEALTH
	06/30/19			06/30/18			% change			06/30/19			06/30/18			% change

Hospitals owned and leased		26			26			0.0	%		288			288			0.0	%
Average licensed beds		6,371			6,213			2.5	%		22,833			22,625			0.9	%
Average available beds		6,195			6,037			2.6	%		22,733			22,541			0.9	%
Patient days		357,894			339,697			5.4	%		1,585,284			1,579,633			0.4	%
Average daily census		3,932.9			3,733.1			5.4	%		17,420.7			17,358.6			0.4	%
Occupancy-licensed beds		61.7	%		60.1	%		2.7	%		76.3	%		76.7	%		-0.6	%
Occupancy-available beds		63.5	%		61.8	%		2.7	%		76.6	%		77.0	%		-0.5	%
Admissions		78,879			74,997			5.2	%		120,006			119,288			0.6	%
Length of stay		4.5			4.5			0.2	%		13.2			13.2			-0.2	%

Universal Health Services, Inc.
Selected Hospital Statistics
For the six months ended
June 30, 2019 and 2018


AS REPORTED:
	ACUTE									BEHAVIORAL HEALTH
	06/30/19			06/30/18			% change			06/30/19			06/30/18			% change

Hospitals owned and leased		26			26			0.0	%		327			301			8.6	%
Average licensed beds		6,371			6,187			3.0	%		23,871			23,252			2.7	%
Average available beds		6,195			6,011			3.1	%		23,771			23,169			2.6	%
Patient days		727,620			692,496			5.1	%		3,251,336			3,187,973			2.0	%
Average daily census		4,020.2			3,825.8			5.1	%		17,963.2			17,613.1			2.0	%
Occupancy-licensed beds		63.1	%		61.8	%		2.0	%		75.3	%		75.7	%		-0.7	%
Occupancy-available beds		64.9	%		63.6	%		2.0	%		75.6	%		76.0	%		-0.6	%
Admissions		159,542			151,640			5.2	%		245,394			240,449			2.1	%
Length of stay		4.6			4.6			-0.1	%		13.2			13.3			-0.1	%

Inpatient revenue	$	14,215,639		$	12,525,776			13.5	%	$	5,031,625		$	4,851,152			3.7	%
Outpatient revenue		8,659,922			7,474,987			15.9	%		535,239			522,718			2.4	%
Total patient revenue		22,875,561			20,000,763			14.4	%		5,566,864			5,373,870			3.6	%
Other revenue		223,343			198,358			12.6	%		110,739			101,178			9.4	%
Gross hospital revenue		23,098,904			20,199,121			14.4	%		5,677,603			5,475,048			3.7	%
Total deductions		20,052,351			17,349,498			15.6	%		3,070,979			2,962,969			3.6	%
Net hospital revenue	$	3,046,553		$	2,849,623			6.9	%	$	2,606,624		$	2,512,079			3.8	%

SAME FACILITY:
	ACUTE									BEHAVIORAL HEALTH
	06/30/19			06/30/18			% change			06/30/19			06/30/18			% change

Hospitals owned and leased		26			26			0.0	%		288			288			0.0	%
Average licensed beds		6,371			6,187			3.0	%		22,842			22,598			1.1	%
Average available beds		6,195			6,011			3.1	%		22,742			22,515			1.0	%
Patient days		727,620			692,496			5.1	%		3,156,169			3,137,870			0.6	%
Average daily census		4,020.2			3,825.8			5.1	%		17,437.4			17,336.3			0.6	%
Occupancy-licensed beds		63.1	%		61.8	%		2.0	%		76.3	%		76.7	%		-0.5	%
Occupancy-available beds		64.9	%		63.6	%		2.0	%		76.7	%		77.0	%		-0.4	%
Admissions		159,542			151,640			5.2	%		242,175			238,076			1.7	%
Length of stay		4.6			4.6			-0.1	%		13.0			13.2			-1.1	%


CONTACT:	Steve Filton
	Chief Financial Officer
	610-768-3300