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Actionable news in UHS: UNIVERSAL HEALTH SERVICES Inc CLASS B,

Universal Health Services, Inc. Reports 2015 THIRD QUARTER FINANCIAL RESULTS

The following excerpt is from the company's SEC filing.

Consolidated Results of Operations, As Reported and As Adjusted Three-month periods ended September 30, 2015 and 2014:

KING OF PRUSSIA, PA Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $150.3 million, or $1.48 per diluted share, during the third quarter of 2015 as compared to $82.8 million, or $.82 per diluted share, during the comparable quarter of 2014. Net revenues increased 9.3% to $2.23 billion during the third quarter of 2015 as compared to $2.04 billion during the third quarter of 2014.

For the three-month period ended Sep tember 30, 2015, our adjusted net income attributable to UHS, as calculated on the attached Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information (Supplemental Schedule), increased approximately 13% to $155.3 million, or $1.53 per diluted share, as compared to $137.5 million, or $1.36 per diluted share, during the third quarter of 2014.

As reflected on the Supplemental Schedule, included in our reported results during the third quarters of 2015 and 2014 are net unfavorable after-tax impacts of approximately $5.0 million, or $.05 per diluted share, during the third quarter of 2015 and $4.5 million, or $.04 per diluted share, during the third quarter of 2014, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of electronic health records (EHR) applications at our acute care hospitals. In addition, included in our reported results during the three-month period ended September 30, 2014 was an aggregate after-tax charge of $50.2 million, or $.50 per diluted share, incurred in connection with a legal settlement ($27.6 million, or $.27 per diluted share) as well as the costs related to the extinguishment of debt in connection with financing transactions that occurred during the third quarter of 2014 ($22.6 million, or $.23 per diluted share).

Consolidated Results of Operations, As Reported and As Adjusted Nine-month periods ended September 30, 2015 and 2014:

Reported net income attributable to UHS was $506.8 million, or $5.02 per diluted share, during the first nine months of 2015 as compared to $372.5 million, or $3.71 per diluted share, during the comparable period of 2014. Net revenues increased 11.6% to $6.73 billion during the first nine months of 2015 as compared to $6.03 billion during the comparable period of 2014.

For the nine-month period ended September 30, 2015, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, increased approximately 21% to $521.4 million, or $5.16 per diluted share, as compared to $429.8 million, or $4.28 per diluted share, during the first nine months of 2014.

As reflected on the Supplemental Schedule, included in our reported results during the first nine months of 2015 is a net unfavorable after-tax impact of approximately $14.6 million, or $.14 per diluted share, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of EHR applications at our acute care hospitals. As reflected on the Supplemental Schedule, included in our reported results during the nine-month period ended September 30, 2014 was a net aggregate after-tax charge of $57.2 million, or $.57 per diluted share, consisting of: (i) an aggregate net unfavorable after-tax impact of approximately $13.3 million, or $.13 per diluted share, related to the incentive income and depreciation and amortization expense recorded in connection with the implementation of EHR applications; (ii) the above-mentioned aggregate after-tax charge of $50.2 million, or $.50 per diluted share, incurred in connection with a legal settlement and costs related to the extinguishment of debt that occurred during the third quarter of 2014, and; (iii) a favorable after-tax impact of $6.3 million, or $.06 per diluted share, resulting from a gain realized on the sale of a non-operating investment during the first quarter of 2014.

Acute Care Services Three and nine-month periods ended September 30, 2015 and 2014:

During the third quarter of 2015, at our acute care hospitals owned during both periods (same facility basis), adjusted admissions (adjusted for outpatient activity) increased 5.1% and adjusted patient days increased 5.6%, as compared to the third quarter of 2014. Net revenues at these facilities increased 7.2% during the third quarter of 2015 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 3.0% while net revenue per adjusted patient day increased 2.6% during the third quarter of 2015 as compared to the comparable quarter of 2014. On a same facility basis, the operating margin at our acute care hospitals decreased to 15.4% during the third quarter of 2015 as compared to 17.1% during the third quarter of 2014. We define operating margin as net revenues less salaries, wages and benefits, other operating expenses and supplies expense (excluding the EHR impact, as indicated on the Supplemental Schedule).

During the first nine months of 2015, at our acute care hospitals on a same facility basis, adjusted admissions increased 5.5% and adjusted patient days increased 6.1%, as compared to the comparable period of 2014. Net revenues at these facilities increased 9.2% during the first nine months of 2015 as compared to the comparable period of the prior year. At these facilities, net revenue per adjusted admission increased 4.1% while net revenue per adjusted patient day increased 3.5% during the first nine months of 2015 as compared to the comparable period of 2014. On a same facility basis, the operating margin at our acute care hospitals increased to 18.9% during the first nine months of 2015 as compared to 18.3% during the comparable period of 2014.

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 gross charges, amounting to approximately $322 million and $266 million during the three-month periods ended September 30, 2015 and 2014, respectively, and $872 million and $852 million during the nine-month periods ended September 30, 2015 and 2014, respectively. The provision for doubtful accounts at our acute care hospitals amounted to approximately $185 million and $129 million during the three-month

periods ended September 30, 2015 and 2014, respectively, and $459 million and $460 million during the nine-month periods ended September 30, 2015 and 2014, respectively. Our acute care hospitals experienced an increase in the aggregate of charity care, uninsured discounts and provision for doubtful accounts, as a percentage of gross charges, during the third quarter of 2015, as compared to the third quarter of 2014. During the first nine months of 2015, as compared to the comparable period of 2014, our acute care hospitals experienced a decrease in the aggregate of charity care, uninsured discounts and provision for doubtful accounts, as a percentage of gross charges.

Behavioral Health Care Services Three and nine-month periods ended September 30, 2015 and 2014:

During the third quarter of 2015, at our behavioral health care facilities on a same facility basis, adjusted admissions and adjusted patient days each increased 1.6% as compared to the third quarter of 2014. At these facilities, net revenue per adjusted admission and net revenue per adjusted patient day each increased 3.1% during the third quarter of 2015 over the comparable quarter in 2014. On a same facility basis, our behavioral health services net revenues increased 5.0% during the third quarter of 2015, as compared to the comparable quarter in 2014, and the operating margins were 27.5% and 27.6% during the three-month periods ended September 30, 2015 and 2014, respectively.

During the nine-month period ended September 30, 2015, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 3.8% while adjusted patient days increased 1.5% compared to the comparable period of 2014. At these facilities, net revenue per adjusted admission increased 1.4% and net revenue per adjusted patient day increased 3.7% during the first nine months of 2015 over the comparable period of 2014. On a same facility basis, our...


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