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Universal Health Services, Inc. Reports 2007 Fourth Quarter and Full Year Earnings and 2008 Guidance
Date:2/28/2008

Consolidated Results of Operations

KING OF PRUSSIA, Pa., Feb. 28 /PRNewswire-FirstCall/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income was $40.0 million, or $.75 per diluted share, during the fourth quarter of 2007 as compared to $34.2 million, or $.63 per diluted share, during the comparable prior year quarter. For the year ended December 31, 2007, reported net income was $170.4 million, or $3.18 per diluted share, as compared to $259.5 million, or $4.56 per diluted share, during the prior year.

As indicated on the attached Schedules of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedules"), our income from continuing operations and net income for the three and twelve- month periods ended December 31, 2007 and 2006 include various items such as: (i) hurricane related expenses, net of recoveries, minority interests and income taxes; (ii) prior period effect of the recording or reserving of Texas Medicaid supplemental payments and cost reports settlements, net of income taxes; (iii) reserve for legal judgment and lawsuit, the write-down of the carrying-value of investment in a joint-venture and gain on sale of real property, net of income taxes; (iv) favorable income tax adjustments to reduce reserves due to the expiration of statute of limitations in various tax jurisdictions; (v) prior period effect of a favorable adjustment to reduce our professional and general liability self-insurance reserves based upon the results of a reserve analysis, net of minority interests and income taxes, and; (vi) a charge incurred during 2006 to record the aggregate present value of the future funding of a portion of a gift from our Chairman oeighted average number

of common shares and

equiv. - diluted 53,233 54,191 53,569 57,908

Diluted earnings (loss) per share:

From continuing operations $0.75 $0.63 $3.18 $4.57

From discontinued operations 0.00 0.00 0.00 (0.01)

Total diluted earnings

per share $0.75 $0.63 $3.18 $4.56

Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income

Information ("Supplemental Schedule")

For the three months ended December 31, 2007 and 2006

(in thousands, except per share amounts)

(unaudited)

Three months Three months

ended December 31, ended December 31,

2007 2006

Net revenues $1,194,211 100.0% $1,065,881 100.0%

Operating charges:

Salaries, wages and benefits 519,187 43.5% 461,500 43.3%

Other operating expenses 248,828 20.8% 228,026 21.4%

Supplies expense 168,811 14.1% 156,431 14.7%

Provision for doubtful accounts 103,378 8.7% 88,940 8.3%

1,040,204 87.1% 934,897 87.7%

Operating income/margin 154,007 12.9% 130,984 12.3%

Lease and rental expense 17,552 15,813

Minority interests in earnings

of consolidated entities 10,710 8,621

Earnings before hurricane related

expenses, hurricane insurance

recoveries, depreciation and

amortization, interest expense,

and income taxes ("EBITDA") 125,745 106,550

Hurricane related expenses, net

of insurance recoveries (493) (640)

Depreciation and amortization 47,864 43,334

Interest expense, net 12,983 9,196

Income before income taxes 65,391 54,660

Provision for income taxes 25,488 20,458

Income from continuing operations 39,903 34,202

Income (loss) from discontinued

operations, net of income taxes 51 (32)

Net income $39,954 $34,170

Three months Three months

ended December 31, ended December 31,

2007 2006

Per Per

Diluted Diluted

Amount Share Amount Share

Calculation of Adjusted Income

from Continuing Operations

Income from continuing

operations $39,903 $0.75 $34,202 $0.63

Plus/minus adjustments:

Hurricane related expenses, net

of recoveries, minority

interests and income taxes (306) (0.01) (233) -

Favorable prior period effect

of Texas Medicaid supplemental

payments and cost report

settlements, net of

income taxes - - (6,280) (0.12)

Reserve for lawsuit, net of

income taxes - - 4,704 0.09

Subtotal after-tax adjustments

to income from continuing

operations (306) (0.01) (1,809) (0.03)

Adjusted income from

continuing operations $39,597 $0.74 $32,393 $0.60

Calculation of Adjusted Net Income

Net income $39,954 $0.75 $34,170 $0.63

After-tax adjustments to income

from continuing operations, as

indicated above (306) (0.01) (1,809) (0.03)

Adjusted net income $39,648 $0.74 $32,361 $0.60

Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income

Information ("Supplemental Schedule")

For the twelve months ended December 31, 2007 and 2006

(in thousands, except per share amounts)

(unaudited)

Twelve months Twelve months

ended December 31, ended December 31,

2007 2006

Net revenues $4,751,005 100.0% $4,191,300 100.0%

Operating charges:

Salaries, wages and benefits 2,039,676 42.9% 1,797,587 42.9%

Other operating expenses 997,807 21.0% 936,958 22.4%

Supplies expense 675,757 14.2% 556,702 13.3%

Provision for doubtful accounts 415,961 8.8% 349,030 8.3%

4,129,201 86.9% 3,640,277 86.9%

Operating income/margin 621,804 13.1% 551,023 13.1%

Lease and rental expense 68,253 64,060

Minority interests in earnings

of consolidated entities 43,361 46,238

Earnings before hurricane related

expenses, hurricane insurance

recoveries, depreciation and

amortization, interest expense,

and income taxes ("EBITDA") 510,190 440,725

Hurricane insurance recoveries

in excess of expenses 214 (167,999)

Depreciation and amortization 183,281 163,694

Interest expense, net 51,626 32,558

Income before income taxes 275,069 412,472

Provision for income taxes 104,550 152,878

Income from continuing operations 170,519 259,594

Loss from discontinued operations,

net of income taxes (132) (136)

Net income $170,387 $259,458

Twelve months Twelve months

ended December 31, ended December 31,

2007 2006

Per Per

Diluted Diluted

Amount Share Amount Share

Calculation of Adjusted Income

from Continuing Operations

Income from continuing

operations $170,519 $3.18 $259,594 $4.57

Plus/minus adjustments:

Hurricane related expenses, net

of recoveries, minority

interests and income taxes 133 - (99,908) (1.73)

Gain on sale of real property,

net of income taxes (1,364) (0.02) - -

Reduction of reserve for

professional and general

liability self-insured claims,

net of minority interests

and income taxes (10,104) (0.19) - -

Unfavorable (favorable) prior

period effect of Texas

Medicaid supplemental payments

and cost report settlements,

net of income taxes 3,419 0.07 (10,059) (0.18)

Favorable tax reserve

adjustment (2,079) (0.04) (2,900) (0.05)

Reserve for legal judgment and

lawsuit, net of income taxes 2,307 0.04 6,273 0.11

Write-down of investment in

joint-venture, net of income

taxes 1,612 0.03 - -

W&M Funding - - 4,466 0.08

Subtotal after-tax adjustments to

income from continuing

operations (6,076) (0.11) (102,128) (1.77)

Adjusted income from

continuing operations $164,443 $3.07 $157,466 $2.80

Calculation of Adjusted

Net Income

Net income $170,387 $3.18 $259,458 $4.56

After-tax adjustments to

income from continuing

operations, as indicated

above (6,076) (0.11) (102,128) (1.77)

Adjusted net income $164,311 $3.07 $157,330 $2.79

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

December 31, December 31,

2007 2006

Assets:

Cash and cash equivalents $16,354 $14,939

Accounts receivable, net 627,186 595,009

Other current assets 131,307 118,558

Property, plant and equipment, net 1,933,916 1,685,085

Other assets 899,894 863,451

Total Assets $3,608,657 $3,277,042

Liabilities and Stockholders' Equity:

Current portion of long-term debt $3,116 $1,938

Other current liabilities 484,595 500,513

Other noncurrent liabilities 344,755 340,815

Long-term debt 1,008,786 821,363

Deferred income taxes 40,022 35,888

Minority interest 210,184 174,061

Stockholders' equity 1,517,199 1,402,464

Total Liabilities and

Stockholders' Equity $3,608,657 $3,277,042

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

Twelve months

ended December 31,

2007 2006

Cash Flows from Operating Activities:

Net income $170,387 $259,458

Adjustments to reconcile net income

to net cash provided by operating

activities:

Depreciation & amortization 183,281 163,694

Accretion of discount on convertible

debentures - 6,364

Gain on sale of assets and businesses (3,722) -

Hurricane related expenses - 13,792

Hurricane insurance recoveries accrued - (181,791)

Hurricane insurance recoveries received

for operating expenses - 43,929

Changes in assets & liabilities, net of

effects from acquisitions and dispositions:

Accounts receivable (11,540) (93,552)

Accrued interest 2,143 796

Accrued and deferred income taxes 9,648 (111,438)

Other working capital accounts (26,547) 18,090

Other assets and deferred charges (4,700) 2,524

Payment of hurricane related expenses - (14,889)

Other 8,688 15,126

Minority interest in earnings of

consolidated entities, net of

distributions 10,334 15,536

Accrued insurance expense, net of

commercial premiums paid 64,131 76,456

Payments made in settlement of

self-insurance claims (53,608) (44,856)

Net cash provided by operating

activities 348,495 169,239

Cash Flows from Investing Activities:

Property and equipment additions,

net of disposals (339,813) (341,140)

Proceeds received from sale of assets 6,818 -

Acquisition of assets and businesses (101,792) (81,800)

Hurricane insurance recoveries received - 144,571

Purchase of minority ownership

interest in majority owned business (14,762) -

Net cash used in investing activities (449,549) (278,369)

Cash Flows from Financing Activities:

Additional borrowings 183,206 494,353

Reduction of long-term debt (8,716) (34,898)

Repurchase of common shares (74,091) (350,372)

Dividends paid (17,169) (17,445)

Issuance of common stock 2,264 5,637

Financing costs (588) (2,020)

Net cash received for termination

of derivatives - 3,393

Capital contributions from minority

member 17,563 17,458

Net cash provided by financing

activities 102,469 116,106

Increase in cash and cash equivalents 1,415 6,976

Cash and cash equivalents, beginning

of period 14,939 7,963

Cash and cash equivalents, end of period $16,354 $14,939

Supplemental Disclosures of Cash Flow

Information:

Interest paid $58,567 $35,474

Income taxes paid, net of refunds $93,519 $263,465

Universal Health Services, Inc.

Supplemental Statistical Information

(unaudited)

% Change % Change

Quarter 12 months

ended ended

Same Facility: 12/31/2007 12/31/2007

Acute Care Hospitals

Revenues 7.6% 7.7%

Adjusted Admissions 2.6% 4.3%

Adjusted Patient Days 1.2% 4.0%

Revenue Per Adjusted Admission 4.8% 3.3%

Revenue Per Adjusted Patient Day 6.4% 3.6%

Behavioral Health Hospitals

Revenues 9.5% 7.4%

Adjusted Admissions 6.5% 4.1%

Adjusted Patient Days 4.8% 4.2%

Revenue Per Adjusted Admission 2.8% 3.1%

Revenue Per Adjusted Patient Day 4.5% 3.1%

UHS Consolidated Fourth quarter ended Twelve months ended

12/31/2007 12/31/2006 12/31/2007 12/31/2006

Revenues $1,194,211 $1,065,881 $4,751,005 $4,191,300

EBITDA (1) 125,745 106,550 510,190 440,725

EBITDA Margin (1) 10.5% 10.0% 10.7% 10.5%

Cash Flow From Operations 25,714 -80,781 348,495 169,239

Days Sales Outstanding 48 51 48 52

Capital Expenditures 76,447 108,132 339,813 341,140

Debt 1,011,902 823,301

Shareholders Equity 1,517,199 1,402,464

Debt / Total Capitalization 40.0% 37.0%

Debt / EBITDA (2) 1.98 1.87

Debt / Cash From Operations (2) 2.98 4.86

Acute Care EBITDAR

Margin(3)(4) 13.0% 12.1% 13.5% 13.5%

Behavioral Health EBITDAR

Margin(3)(4) 22.8% 22.6% 22.9% 23.3%

(1) Net of Minority Interest

(2) Latest 4 quarters

(3) Before Corporate overhead allocation and minority interest

(4) Excluding discontinued operations

UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE THREE MONTHS ENDED

DECEMBER 31, 2007

AS REPORTED:

ACUTE (1)

12/31/07 12/31/06 % change

Hospitals owned and leased 22 21 4.8%

Average licensed beds 5,415 5,139 5.4%

Patient days 285,286 275,664 3.5%

Average daily census 3,100.9 2,996.3 3.5%

Occupancy-licensed beds 57.3% 58.3% -1.8%

Admissions 64,425 62,055 3.8%

Length of stay 4.4 4.4 -0.3%

Inpatient revenue $2,130,045 $1,910,457 11.5%

Outpatient revenue 894,019 729,711 22.5%

Total patient revenue 3,024,064 2,640,168 14.5%

Other revenue 15,510 12,859 20.6%

Gross hospital revenue 3,039,574 2,653,027 14.6%

Total deductions 2,171,094 1,870,204 16.1%

Net hospital revenue $868,480 $782,823 10.9%

SAME FACILITY:

ACUTE (2)

12/31/07 12/31/06 % change

Hospitals owned and leased 21 21 0.0%

Average licensed beds 5,181 5,139 0.8%

Patient days 271,823 275,664 -1.4%

Average daily census 2,954.6 2,996.3 -1.4%

Occupancy-licensed beds 57.0% 58.3% -2.2%

Admissions 62,079 62,055 0.0%

Length of stay 4.4 4.4 -1.4%

AS REPORTED:

BEHAVIORAL HEALTH

12/31/07 12/f the Board of Directors, Chief Executive Officer and President to The College of William & Mary ("W&M Funding").

After adjusting for the items discussed above applicable to each period presented, as indicated on the attached Supplemental Schedules, our adjusted net income during the three-month period ended December 31, 2007 was $39.6 million, or $.74 per diluted share, as compared to $32.4 million, or $.60 per diluted share, during the fourth quarter of 2006. Our adjusted net income during the year ended December 31, 2007 was $164.3 million, or $3.07 per diluted share, as compared to $157.3 million, or $2.79 per diluted share, during the prior year.

Net revenues increased 12% to $1.19 billion during the fourth quarter of 2007 as compared to $1.07 billion during the fourth quarter of 2006. Net revenues increased 13% to $4.75 billion during the year ended December 31, 2007 as compared to $4.19 billion during the prior year. Our consolidated operating margin, as calculated on the attached Supplemental Schedules (without adjusting for the various items mentioned above), was 12.9% and 12.3% during the three-month periods ended December 31, 2007 and 2006, respectively, and 13.1% during each of the years ended December 31, 2007 and 2006.

Acute Care Services:

At our acute care hospitals owned during both periods ("same facility basis"), inpatient admissions were unchanged and patient days decreased 1.4% during the fourth quarter of 2007 as compared to the fourth quarter of 2006. On a same facility basis, net revenues at our acute care facilities increased 7.6% during the fourth quarter of 2007 as compared to the comparable prior year quarter. Net revenue per adjusted admission at these facilities increased 4.8% during the fourth quarter of 2007 over the comparable prior year quarter. The operating margin at our acute care hospitals owned during both periods increased to 13.9% during the fourth quarter of 2007 as compared to 12.1% during the fou31/06 % change

Hospitals owned and leased 85 79 7.6%

Average licensed beds 7,573 6,927 9.3%

Patient days 517,818 469,340 10.3%

Average daily census 5,628.5 5,101.5 10.3%

Occupancy-licensed beds 74.3% 73.6% 0.9%

Admissions 30,548 27,211 12.3%

Length of stay 17.0 17.2 -1.7%

Inpatient revenue $467,737 $418,770 11.7%

Outpatient revenue 62,362 51,848 20.3%

Total patient revenue 530,099 470,618 12.6%

Other revenue 7,750 8,115 -4.5%

Gross hospital revenue 537,849 478,733 12.3%

Total deductions 239,349 217,182 10.2%

Net hospital revenue $298,500 $261,551 14.1%

SAME FACILITY:

BEHAVIORAL HEALTH(3)

12/31/07 12/31/06 % change

Hospitals owned and leased 79 79 0.0%

Average licensed beds 7,174 6,918 3.7%

Patient days 494,813 468,666 5.6%

Average daily census 5,378.4 5,094.2 5.6%

Occupancy-licensed beds 75.0% 73.6% 1.8%

Admissions 29,126 27,154 7.3%

Length of stay 17.0 17.3 -1.6%

(1) Licensed beds from our Acute care hospitals located in New Orleans are

excluded in 2006 and 2007.

(2) Acute care hospitals located in New Orleans and Texoma are excluded in

current and prior years.

(3) Cottonwood, Dover Behavioral, Foundations Behavioral, Highlands

Behavioral and Shenandoah Valley are excluded in both current and

prior years. Cedar Ridge RTC and Northstar RTC are included in both

current and prior years from July 1st through year to date ("YTD").

Academy at Canyon Creek and Casa de Lago are included in both current

and prior years from August 1st through YTD. Cedar Ridge Hospital is

included in both current and prior years from September 1st through

YTD. Lincoln Trail is included in both current and prior years from

November 1 through YTD and Spring Mountain is included in both current

and prior years from December 1 through YTD. Tennessee Valley,

Tuscaloosa Juvenile Detention Center and Triple L Group homes are

excluded in current and prior years.

UNIVERSAL HEALTH SERVICES, INC.

SELECTED HOSPITAL STATISTICS

FOR THE TWELVE MONTHS ENDED

DECEMBER 31, 2007

AS REPORTED:

ACUTE (1)

12/31/07 12/31/06 % change

Hospitals owned and leased 22 21 4.8%

Average licensed beds 5,417 5,070 6.8%

Patient days 1,172,130 1,095,375 7.0%

Average daily census 3,211.3 3,000.9 7.0%

Occupancy-licensed beds 59.3% 59.2% 0.2%

Admissions 262,147 246,429 6.4%

Length of stay 4.5 4.4 0.6%

Inpatient revenue $8,588,580 $7,518,157 14.2%

Outpatient revenue 3,560,296 2,876,867 23.8%

Total patient revenue 12,148,876 10,395,024 16.9%

Other revenue 60,878 51,549 18.1%

Gross hospital revenue 12,209,754 10,446,573 16.9%

Total deductions 8,731,499 7,339,940 19.0%

Net hospital revenue $3,478,255 $3,106,633 12.0%

SAME FACILITY:

ACUTE (2)

12/31/07 12/31/06 % change

Hospitals owned and leased 21 21 0.0%

Average licensed beds 5,183 5,070 2.2%

Patient days 1,118,543 1,095,375 2.1%

Average daily census 3,064.5 3,000.9 2.1%

Occupancy-licensed beds 59.1% 59.2% -0.1%

Admissions 252,226 246,429 2.4%

Length of stay 4.4 4.4 -0.2%

AS REPORTED:

BEHAVIORAL HEALTH

12/31/07 12/31/06 % change

Hospitals owned and leased 85 79 7.6%

Average licensed beds 7,348 6,607 11.2%

Patient days 2,007,119 1,855,306 8.2%

Average daily census 5,499.0 5,083.0 8.2%

Occupancy-licensed beds 74.8% 76.9% -2.7%

Admissions 119,730 111,490 7.4%

Length of stay 16.8 16.6 0.7%

Inpatient revenue $1,806,835 $1,663,509 8.6%

Outpatient revenue 235,920 206,453 14.3%

Total patient revenue 2,042,755 1,869,962 9.2%

Other revenue 29,688 32,207 -7.8%

Gross hospital revenue 2,072,443 1,902,169 9.0%

Total deductions 926,365 873,202 6.1%

Net hospital revenue $1,146,078 $1,028,967 11.4%

SAME FACILITY:

BEHAVIORAL HEALTH (3)

12/31/07 12/31/06 % change

Hospitals owned and leased 79 79 0.0%

Average licensed beds 6,877 6,548 5.0%

Patient days 1,919,426 1,839,564 4.3%

Average daily census 5,258.7 5,039.9 4.3%

Occupancy-licensed beds 76.5% 77.0% -0.7%

Admissions 115,111 110,361 4.3%

Length of stay 16.7 16.7 0.0%

(1) Licensed beds from our Acute care hospitals located in New Orleans are

excluded in 2006 and 2007.

(2) Acute care hospitals located in New Orleans and Texoma are excluded in

current and prior years.

(3) Cottonwood, Dover Behavioral, Foundations Behavioral, Highlands

Behavioral and Shenandoah Valley are excluded in both current and

prior years. Cedar Ridge RTC and Northstar RTC are included in both

current and prior years from July 1st through year to date ("YTD").

Academy at Canyon Creek and Casa de Lago are included in both current

and prior years from August 1st through YTD. Cedar Ridge Hospital is

included in both current and prior years from September 1st through

YTD. Lincoln Trail is included in both current and prior years from

November 1 through YTD and Spring Mountain is included in both current

and prior years from December 1 through YTD. Tennessee Valley,

Tuscaloosa Juvenile Detention Center and Triple L Group homes are

excluded in current and prior years.

rth quarter of 2006.

At our acute care hospitals, on a same facility basis, inpatient admissions increased 2.4% and patient days increased 2.1% during the year ended December 31, 2007 as compared to the prior year. Net revenues at these facilities increased 7.7% during 2007 as compared to 2006. Net revenue per adjusted admission at these facilities increased 3.3% during the year ended December 31, 2007 over the prior year. The operating margin at our acute care hospitals owned during both years increased to 13.8% during 2007 as compared to 13.4% during 2006.

We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $130 million and $117 million during the three-month periods ended December 31, 2007 and 2006, respectively, and $548 million and $443 million during the years ended December 31, 2007 and 2006, respectively.

Behavioral Health Care Services:

At our behavioral health facilities, on a same facility basis, inpatient admissions increased 7.3% and patient days increased 5.6% during the fourth quarter of 2007 as compared to the fourth quarter of 2006. On a same facility basis, net revenues at our behavioral health facilities increased 9.5% during the fourth quarter of 2007 as compared to the comparable prior year quarter. Net revenue per adjusted admission at these facilities increased 2.8% during the fourth quarter of 2007 over the comparable prior year quarter. The operating margin at our behavioral health facilities owned during both periods increased to 23.4% during the fourth quarter of 2007 as compared to 22.8% during the fourth quarter of 2006.

At our behavioral health facilities, on a same facility basis, inpatient admissions and patient days each increased 4.3% during the year ended December 31, 2007 as compared to the prior year. On a same facility basis, net revenues at our behavioral health facilities increased 7.4% during 2007 as compared to 2006. Net revenue per adjusted admission at these facilities increased 3.1% during 2007 over the prior year. The operating margin at our behavioral health facilities owned during both years was 23.6% during 2007 and 23.5% during 2006.

2008 Guidance:

During 2008, based upon current trends and subject to certain provisions and adjustments, including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures, we estimate that we will achieve earnings per diluted share from continuing operations of approximately $3.37 to $3.42 on projected net revenues of $5.13 billion.

During 2008, we expect to spend approximately $400 million to $425 million on capital expenditures, including approximately $240 million related to expenditures for capital equipment, renovations, new projects at existing hospitals and completion of major construction projects in progress at December 31, 2007.

Conference Call Information:

We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 29, 2008. The dial-in number is 1-877-648-7971. A digital recording of the conference call will be available two hours after the completion of the conference call on February 29, 2008 and will continue through midnight on March 14, 2008. The recording can be accessed by calling 1-800-642-1687 and entering the conference ID number 32133043. This call will also be available live over the internet at our web site at http://www.uhsinc.com. It will also be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at http://www.companyboardroom.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (http://www.streetevents.com).

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

Universal Health Services, Inc. is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico. 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, 2007), may cause 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 operating income, operating margin, adjusted income from continuing operations, adjusted income from continuing operations per diluted share, adjusted net income, adjusted net income per diluted share and earnings before interest, taxes, depreciation and amortization ("EBITDA"), 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 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 items that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, hurricane- related expenses and insurance recoveries, reserves for legal judgments, lawsuits and other settlements 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, determined in accordance with GAAP, 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 Report on Form 10-K for the year ended December 31, 2007. 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)

Three months Twelve months

ended December 31, ended December 31,

2007 2006 2007 2006

Net revenues $1,194,211 $1,065,881 $4,751,005 $4,191,300

Operating charges:

Salaries, wages and

benefits 519,187 461,500 2,039,676 1,797,587

Other operating expenses 248,828 228,026 997,807 936,958

Supplies expense 168,811 156,431 675,757 556,702

Provision for doubtful

accounts 103,378 88,940 415,961 349,030

Depreciation and

amortization 47,864 43,334 183,281 163,694

Lease and rental expense 17,552 15,813 68,253 64,060

Hurricane related

expenses, net (493) (640) 214 13,792

Hurricane insurance

recoveries - - - (13,792)

1,105,127 993,404 4,380,949 3,868,031

Income before interest

expense, hurricane

insurance recoveries

in excess of expenses,

minority interests and

income taxes 89,084 72,477 370,056 323,269

Interest expense, net 12,983 9,196 51,626 32,558

Hurricane insurance recoveries

in excess of expenses - - - (167,999)

Minority interests in

earnings of consolidated

entities 10,710 8,621 43,361 46,238

Income before income taxes 65,391 54,660 275,069 412,472

Provision for income taxes 25,488 20,458 104,550 152,878

Income from continuing

operations 39,903 34,202 170,519 259,594

Income (loss) from

discontinued operations,

net of income tax

benefit (a) 51 (32) (132) (136)

Net income $39,954 $34,170 $170,387 $259,458

Basic earnings per share: (b)

From continuing operations $0.75 $0.63 $3.19 $4.76

From discontinued operations 0.00 0.00 0.00 0.00

Total basic earnings

per share $0.75 $0.63 $3.19 $4.76

Diluted earnings (loss)

per share: (b)

From continuing operations $0.75 $0.63 $3.18 $4.57

From discontinued operations 0.00 0.00 0.00 (0.01)

Total diluted earnings

per share $0.75 $0.63 $3.18 $4.56

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

Three months Twelve months

ended December 31, ended December 31,

2007 2006 2007 2006

(a) Calculation of income from

discontinued operations,

net of income tax:

Income (loss) from operations $83 ($52) ($213) ($217)

Income tax (expense) benefit (32) 20 81 81

Income (loss) from discontinued

operations, net of taxes $51 ($32) ($132) ($136)

(b) Earnings per share calculation:

Basic:

Income from continuing

operations $39,903 $34,202 $170,519 $259,594

Less: Dividends on unvested

restricted stock, net of taxes (17) (26) (79) (89)

Income from continuing

operations - basic $39,886 $34,176 $170,440 $259,505

Income (loss) from

discontinued operations 51 (32) (132) (136)

Net income - basic $39,937 $34,144 $170,308 $259,369

Weighted average number

of common shares - basic 53,051 53,936 53,381 54,557

Basic earnings per share:

From continuing operations $0.75 $0.63 $3.19 $4.76

From discontinued operations 0.00 0.00 0.00 0.00

Total basic earnings

per share $0.75 $0.63 $3.19 $4.76

Diluted:

Income from continuing

operations $39,903 $34,202 $170,519 $259,594

Less: Dividends on unvested

restricted stock,

net of taxes (17) (26) (79) (89)

Add: Debenture interest,

net of taxes - - - 4,887

Income from continuing

operations - diluted $39,886 $34,176 $170,440 $264,392

Income (loss) from

discontinued operations 51 (32) (132) (136)

Net income - diluted $39,937 $34,144 $170,308 $264,256

Weighted average number

of common shares 53,051 53,936 53,381 54,557

Add: Shares for conversion of

convertible debentures - - - 3,117

Other share equivalents 182 255 188 234

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SOURCE Universal Health Services, Inc.
Copyright©2008 PR Newswire.
All rights reserved

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