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Universal Health Services, Inc. Reports 2007 Third Quarter Earnings
Date:10/29/2007

Consolidated Results of Operations:

KING OF PRUSSIA, Pa., Oct. 29 /PRNewswire-FirstCall/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income was $28.9 million, or $.54 per diluted share, during the third quarter of 2007 as compared to $113.9 million, or $2.00 per diluted share, during the comparable prior year quarter. For the nine months ended September 30, 2007, reported net income was $130.4 million, or $2.43 per diluted share, as compared to $225.3 million, or $3.89 per diluted share, during the comparable nine-month period in 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 nine-month periods ended September 30, 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 judgments, 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 after-tax adjustment to reduce our professional and general liability self-insurance reserves based upon the results of a third-party actuarial analysis, and; (vi) a charge incurred during the third quarter of 2006 to record the aggregate present value of the futu$2.44 $4.11

Diluted:

Income from continuing operations $29,002 $114,029 $130,616 $225,392

Less: Dividends on unvested

restricted stock, net of taxes (18) (20) (62) (63)

Add: Debenture interest, net of

taxes - - - 4,902

Income from continuing operations

- diluted $28,984 $114,009 $130,554 $230,231

Loss from discontinued operations (148) (84) (183) (104)

Net income - diluted $28,836 $113,925 $130,371 $230,127

Weighted average number of common

shares 53,481 56,794 53,491 54,764

Add: Shares for conversion of

convertible debentures - - - 4,168

Other share equivalents 148 207 190 227

Weighted average number of common

shares and equiv. - diluted 53,629 57,001 53,681 59,159

Diluted earnings per share:

From continuing operations $0.54 $2.00 $2.43 $3.89

From discontinued operations 0.00 0.00 0.00 0.00

Total diluted earnings

per share $0.54 $2.00 $2.43 $3.89

Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income

Information ("Supplemental Schedule")

For the three months ended September 30, 2007 and 2006

(in thousands, except per share amounts)

(unaudited)

Three months ended Three months ended

September 30, 2007 September 30, 2006

Net revenues $1,180,217 100.0% $1,043,457 100.0%

Operating charges:

Salaries, wages and benefits 510,917 43.3% 459,099 44.0%

Other operating expenses 265,534 22.5% 211,875 20.3%

Supplies expense 162,342 13.8% 146,944 14.1%

Provision for doubtful accounts 110,451 9.4% 97,901 9.4%

1,049,244 88.9% 915,819 87.8%

Operating income/margin 130,973 11.1% 127,638 12.2%

Lease and rental expense 17,920 16,184

Minority interests in earnings

of consolidated entities 9,784 14,948

Earnings before hurricane related

expenses, hurricane insurance

recoveries, depreciation and

amortization, interest expense,

and income taxes ("EBITDA") 103,269 96,506

Hurricane related expenses, net

of insurance recoveries 82 (130,328)

Depreciation and amortization 46,548 40,961

Interest expense, net 12,881 6,140

Income before income taxes 43,758 179,733

Provision for income taxes 14,756 65,704

Income from continuing operations 29,002 114,029

Loss from discontinued operations,

net of income taxes (148) (84)

Net income $28,854 $113,945

Three months ended Three months ended

September 30, 2007 September 30, 2006

Per Per

Diluted Diluted

Amount Share Amount Share

Calculation of Adjusted Income

from Continuing Operations

Income from continuing operations $29,002 $0.54 $114,029 $2.00

Plus/minus adjustments:

Hurricane related expenses, net

of recoveries, minority

interests and income taxes 50 - (77,877) (1.37)

Unfavorable (favorable) prior

period effect of Texas Medicaid

supplemental payments and

cost report settlements, net of

income taxes 3,399 0.07 (7,025) (0.12)

Favorable tax reserve

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

Reserve for legal judgment, net

of income taxes 2,292 0.04 - -

Write-down of investment in

joint-venture, net of income

taxes 1,603 0.03 - -

W&M Funding - - 4,466 0.08

Subtotal after-tax adjustments to

income from continuing operations 5,265 0.10 (83,336) (1.46)

Adjusted income from continuing

operations $34,267 $0.64 $30,693 $0.54

Calculation of Adjusted Net Income

Net income $28,854 $0.54 $113,945 $2.00

After-tax adjustments to income

from continuing operations, as

indicated above 5,265 0.10 (83,336) (1.46)

Adjusted net income $34,119 $0.64 $30,609 $0.54

Universal Health Services, Inc.

Schedule of Non-GAAP Supplemental Consolidated Statements of Income

Information ("Supplemental Schedule")

For the nine months ended September 30, 2007 and 2006

(in thousands, except per share amounts)

(unaudited)

Nine months ended Nine months ended

September 30, 2007 September 30, 2006

Net revenues $3,556,794 100.0% $3,125,419 100.0%

Operating charges:

Salaries, wages and benefits 1,520,489 42.7% 1,336,087 42.7%

Other operating expenses 748,979 21.1% 708,932 22.7%

Supplies expense 506,946 14.3% 400,271 12.8%

Provision for doubtful accounts 312,583 8.8% 260,090 8.3%

3,088,997 86.8% 2,705,380 86.6%

Operating income/margin 467,797 13.2% 420,039 13.4%

Lease and rental expense 50,701 48,247

Minority interests in earnings

of consolidated entities 32,651 37,617

Earnings before hurricane related

expenses, hurricane insurance

recoveries, depreciation and

amortization, interest expense,

and income taxes ("EBITDA") 384,445 334,175

Hurricane insurance recoveries

in excess of expenses 707 (167,359)

Depreciation and amortization 135,417 120,360

Interest expense, net 38,643 23,362

Income before income taxes 209,678 357,812

Provision for income taxes 79,062 132,420

Income from continuing operations 130,616 225,392

Loss from discontinued operations,

net of income taxes (183) (104)

Net income $130,433 $225,288

Nine months ended Nine months ended

September 30, 2007 September 30, 2006

Per Per

Diluted Diluted

Amount Share Amount Share

Calculation of Adjusted Income

from Continuing Operations

Income from continuing operations $130,616 $2.43 $225,392 $3.89

Plus/minus adjustments:

Hurricane related expenses, net

of recoveries, minority

interests and income taxes 436 - (99,675) (1.69)

Gain on sale of real property,

net of income taxes (1,356) (0.02) - -

Reduction of reserve for

professional and general

liability self-insured claims,

net of minority interests and

income taxes (10,045) (0.19) - -

Unfavorable (favorable) prior

period effect of Texas Medicaid

supplemental payments and cost

report settlements, net of

income taxes 3,399 0.07 (7,818) (0.13)

Favorable tax reserve

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

Reserve for legal judgment, net

of income taxes 2,292 0.04 - -

Write-down of investment in

joint-venture, net of income

taxes 1,603 0.03 - -

W&M Funding - - 4,466 0.08

Subtotal after-tax adjustments to

income from continuing operations (5,750) (0.11) (105,927) (1.79)

Adjusted income from continuing

operations $124,866 $2.32 $119,465 $2.10

Calculation of Adjusted Net Income

Net income $130,433 $2.43 $225,288 $3.89

After-tax adjustments to income

from continuing operations, as

indicated above (5,750) (0.11) (105,927) (1.79)

Adjusted net income $124,683 $2.32 $119,361 $2.10

Universal Health Services, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

September 30, December 31,

2007 2006

Assets:

Cash and cash equivalents $13,574 $14,939

Accounts receivable, net 631,527 595,009

Other current assets 161,779 118,558

Property, plant and equipment, net 1,894,507 1,685,085

Other assets 895,217 863,451

Total Assets $3,596,604 $3,277,042

Liabilities and Stockholders' Equity:

Current portion of long-term debt $3,329 $1,938

Other current liabilities 552,258 500,513

Other noncurrent liabilities 353,328 340,815

Long-term debt 900,628 821,363

Deferred income taxes 48,810 35,888

Minority interest 203,412 174,061

Stockholders' equity 1,534,839 1,402,464

Total Liabilities and Stockholders' Equity $3,596,604 $3,277,042

Universal Health Services, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Nine months

ended September 30,

2007 2006

Cash Flows from Operating Activities:

Net income $130,433 $225,288

Adjustments to reconcile net income

to net cash provided by operating

activities:

Depreciation & amortization 135,417 120,360

Accretion of discount on convertible

debentures - 6,364

Gain on sale of assets and businesses (2,200) -

Hurricane insurance recoveries - (137,862)

Hurricane related expenses - 4,894

Changes in assets & liabilities, net of

effects from acquisitions and dispositions:

Accounts receivable (17,359) (85,132)

Accrued interest 9,055 7,519

Accrued and deferred income taxes (6,374) 36,745

Other working capital accounts 47,558 8,157

Other assets and deferred charges 37 6,943

Other 4,923 11,413

Minority interest in earnings of consolidated

entities, net of distributions 9,041 15,223

Accrued insurance expense, net of commercial

premiums paid 45,275 61,378

Payments made in settlement of self-insurance

claims (33,025) (31,270)

Net cash provided by operating activities 322,781 250,020

Cash Flows from Investing Activities:

Property and equipment additions, net of

disposals (263,366) (233,008)

Proceeds received from sale of assets 5,268 -

Acquisition of assets and businesses (103,159) (45,654)

Hurricane insurance recoveries received - 144,571

Purchase of minority ownership interest

in majority owned business (14,762) -

Net cash used in investing activities (376,019) (134,091)

Cash Flows from Financing Activities:

Additional borrowings 170,000 248,645

Reduction of long-term debt (103,846) (141,804)

Repurchase of common shares (14,386) (220,343)

Dividends paid (12,917) (13,090)

Issuance of common stock 1,041 4,205

Financing costs (148) (2,020)

Net cash received for termination of

derivatives - 3,393

Capital contributions from minority

member 12,129 11,939

Net cash provided by (used in)

financing activities 51,873 (109,075)

(Decrease) Increase in cash and cash

equivalents (1,365) 6,854

Cash and cash equivalents, beginning

of period 14,939 7,963

Cash and cash equivalents, end of period $13,574 $14,817

Supplemental Disclosures of Cash Flow

Information:

Interest paid $35,991 $18,073

Income taxes paid, net of refunds $83,894 $95,412

Universal Health Services, Inc.

Supplemental Statistical Information

(un-audited)

% Change % Change

Quarter Ended 9 months ended

Same Facility: 9/30/2007 9/30/2007

Acute Care Hospitals

Revenues 7.6% 8.0%

Adjusted Admissions 4.5% 4.8%

Adjusted Patient Days 4.9% 5.0%

Revenue Per Adjusted Admission 3.0% 3.1%

Revenue Per Adjusted Patient Day 2.6% 2.9%

Behavioral Health Hospitals

Revenues 7.9% 6.7%

Adjusted Admissions 2.8% 3.3%

Adjusted Patient Days 4.1% 4.6%

Revenue Per Adjusted Admission 5.1% 3.3%

Revenue Per Adjusted Patient Day 3.7% 2.0%

UHS Consolidated Third Quarter Ended Nine months Ended

9/30/2007 9/30/2006 9/30/2007 9/30/2006

Revenues $1,180,217 $1,043,457 $3,556,794 $3,125,419

EBITDA (1) 103,269 96,506 384,445 334,175

EBITDA Margin (1) 8.8% 9.2% 10.8% 10.7%

Cash Flow From Operations 163,805 60,948 322,781 250,020

Days Sales Outstanding 49 52 48 51

Capital Expenditures 78,779 80,335 263,366 233,008

Debt 903,957 453,126

Shareholders Equity 1,534,839 1,496,445

Debt / Total

Capitalization 37.1% 23.2%

Debt / EBITDA (2) 1.84 0.58

Debt / Cash From

Operations (2) 3.74 0.67

Acute Care EBITDAR Margin

(3) (4) 11.4% 13.0% 13.7% 14.0%

Behavioral Health EBITDAR

Margin (3) (4) 21.4% 22.5% 23.0% 23.6%

(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

SEPTEMBER 30, 2007

AS REPORTED:

ACUTE (1)

09/30/07 09/30/06 % change

Hospitals owned and leased 22 21 4.8%

Average licensed beds 5,417 5,139 5.4%

Patient days 290,968 268,537 8.4%

Average daily census 3,162.7 2,918.9 8.4%

Occupancy-licensed beds 58.4% 56.8% 2.8%

Admissions 64,817 60,656 6.9%

Length of stay 4.5 4.4 1.4%

Inpatient revenue $2,095,327 $1,813,162 15.6%

Outpatient revenue 900,787 717,752 25.5%

Total patient revenue 2,996,114 2,530,914 18.4%

Other revenue 15,807 11,014 43.5%

Gross hospital revenue 3,011,921 2,541,928 18.5%

Total deductions 2,148,715 re funding of a portion of a gift from our Chairman of 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 September 30, 2007 was $34.1 million, or $.64 per diluted share, as compared to $30.6 million, or $.54 per diluted share, during the third quarter of 2006. Our adjusted net income during the nine-month period ended September 30, 2007 was $124.7 million, or $2.32 per diluted share, as compared to $119.4 million, or $2.10 per diluted share, during the comparable prior year nine-month period.

Net revenues increased 13% to $1.18 billion during the third quarter of 2007 as compared to $1.04 billion during the third quarter of 2006. Net revenues increased 14% to $3.56 billion during the first nine months of 2007 as compared to $3.13 billion during the comparable nine-month period of 2006. Our consolidated operating margin, as calculated on the attached Supplemental Schedules (without adjusting for the various items mentioned above), was 11.1% and 12.2% during the three-month periods ended September 30, 2007 and 2006, respectively, and 13.2% and 13.4% during the nine-month periods ended September 30, 2007 and 2006, respectively.

Acute Care Services:

At our acute care hospitals owned during both periods ("same facility basis"), inpatient admissions increased 2.5% and patient days increased 2.9% during the third quarter of 2007 as compared to the third quarter of 2006. On a same facility basis, net revenues at our acute care facilities increased 7.6% during the third quarter of 2007 as compared to the comparable prior year quarter. Net revenue per adjusted admission at these facilities increased 3.0% during the third quarter of 2007 over the comparable prior year quarter. The operating margin at 1,764,266 21.8%

Net hospital revenue $863,206 $777,662 11.0%

SAME FACILITY:

ACUTE (2)

09/30/07 09/30/06 % change

Hospitals owned and leased 21 21 0.0%

Average licensed beds 5,183 5,139 0.9%

Patient days 276,423 268,557 2.9%

Average daily census 3,004.6 2,919.1 2.9%

Occupancy-licensed beds 58.0% 56.8% 2.1%

Admissions 62,193 60,656 2.5%

Length of stay 4.4 4.4 0.4%

AS REPORTED:

BEHAVIORAL HEALTH

09/30/07 09/30/06 % change

Hospitals owned and leased 85 81 4.9%

Average licensed beds 7,485 6,640 12.7%

Patient days 506,466 467,860 8.3%

Average daily census 5,505.1 5,085.4 8.3%

Occupancy-licensed beds 73.5% 76.6% -4.0%

Admissions 30,156 28,100 7.3%

Length of stay 16.8 16.6 0.9%

Inpatient revenue $452,223 $416,515 8.6%

Outpatient revenue 54,470 47,809 13.9%

Total patient revenue 506,693 464,324 9.1%

Other revenue 7,476 7,546 -0.9%

Gross hospital revenue 514,169 471,870 9.0%

Total deductions 229,156 217,700 5.3%

Net hospital revenue $285,013 $254,170 12.1%

SAME FACILITY:

BEHAVIORAL HEALTH (3)

09/30/07 09/30/06 % change

Hospitals owned and leased 78 78 0.0%

Average licensed beds 7,000 6,588 6.3%

Patient days 484,996 463,312 4.7%

Average daily census 5,271.7 5,036.0 4.7%

Occupancy-licensed beds 75.3% 76.4% -1.5%

Admissions 28,830 27,894 3.4%

Length of stay 16.8 16.6 1.3%

(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, Lincoln Trail, Shenandoah Valley and Spring Mountain

Sahara are excluded in both current and prior years. Cedar Ridge RTC

is included in both current and prior years from July 1st through year

to date. Academy at Canyon Creek and Casa de Lago are included in both

current and prior years from August 1st through year to date. Cedar

Ridge Hospital is included in both current and prior years from

September 1st through year to date. 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 NINE MONTHS ENDED

SEPTEMBER 30, 2007

AS REPORTED:

ACUTE (1)

09/30/07 09/30/06 % change

Hospitals owned and leased 22 21 4.8%

Average licensed beds 5,417 5,047 7.3%

Patient days 886,844 819,711 8.2%

Average daily census 3,248.5 3,002.6 8.2%

Occupancy-licensed beds 60.0% 59.5% 0.8%

Admissions 197,722 184,374 7.2%

Length of stay 4.5 4.4 0.9%

Inpatient revenue $6,458,535 $5,607,700 15.2%

Outpatient revenue 2,666,277 2,147,156 24.2%

Total patient revenue 9,124,812 7,754,856 17.7%

Other revenue 45,368 38,690 17.3%

Gross hospital revenue 9,170,180 7,793,546 17.7%

Total deductions 6,560,437 5,469,986 19.9%

Net hospital revenue $2,609,743 $2,323,560 12.3%

SAME FACILITY:

ACUTE (2)

09/30/07 09/30/06 % change

Hospitals owned and leased 21 21 0.0%

Average licensed beds 5,183 5,047 2.7%

Patient days 846,710 819,710 3.3%

Average daily census 3,101.5 3,002.6 3.3%

Occupancy-licensed beds 59.8% 59.5% 0.6%

Admissions 190,147 184,374 3.1%

Length of stay 4.5 4.4 0.2%

AS REPORTED:

BEHAVIORAL HEALTH

09/30/07 09/30/06 % change

Hospitals owned and leased 85 81 4.9%

Average licensed beds 7,269 6,492 12.0%

Patient days 1,489,301 1,386,299 7.4%

Average daily census 5,455.3 5,078.0 7.4%

Occupancy-licensed beds 75.0% 78.2% -4.1%

Admissions 89,182 84,100 6.0%

Length of stay 16.7 16.5 1.3%

Inpatient revenue $1,339,098 $1,244,739 7.6%

Outpatient revenue 173,558 154,605 12.3%

Total patient revenue 1,512,656 1,399,344 8.1%

Other revenue 21,938 24,092 -8.9%

Gross hospital revenue 1,534,594 1,423,436 7.8%

Total deductions 687,016 656,020 4.7%

Net hospital revenue $847,578 $767,416 10.4%

SAME FACILITY:

BEHAVIORAL HEALTH (3)

09/30/07 09/30/06 % change

Hospitals owned and leased 78 78 0.0%

Average licensed beds 6,818 6,424 6.1%

Patient days 1,434,670 1,370,870 4.7%

Average daily census 5,255.2 5,021.5 4.7%

Occupancy-licensed beds 77.1% 78.2% -1.4%

Admissions 86,030 83,207 3.4%

Length of stay 16.7 16.5 1.2%

(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, Lincoln Trail, Shenandoah Valley and Spring Mountain

Sahara are excluded in both current and prior years. Cedar Ridge RTC

is included in both current and prior years from July 1st through year

to date. Academy at Canyon Creek and Casa de Lago are included in both

current and prior years from August 1st through year to date. Cedar

Ridge Hospital is included in both current and prior years from

September 1st through year to date. Tennessee Valley, Tuscaloosa

Juvenile Detention Center and Triple L Group homes are excluded in

current and prior years.

our acute care hospitals owned during both periods increased to 12.6% during the third quarter of 2007 as compared to 11.8% during the third quarter of 2006.

At our acute care hospitals, on a same facility basis, inpatient admissions increased 3.1% and patient days increased 3.3% during the nine months ended September 30, 2007 as compared to the comparable prior year period. Net revenues at these facilities increased 8.0% during the first nine months of 2007 as compared to the comparable prior year nine-month period. Net revenue per adjusted admission at these facilities increased 3.1% during the nine months ended September 30, 2007 over the comparable prior year nine-month period. The operating margin at our acute care hospitals owned during both periods increased to 13.7% during the first nine months of 2007 as compared to 13.5% during the comparable prior year nine-month period.

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 $149 million and $99 million during the three-month periods ended September 30, 2007 and 2006, respectively, and $418 million and $326 million during the nine-month periods ended September 30, 2007 and 2006, respectively.

Behavioral Health Care Services:

At our behavioral health facilities, on a same facility basis, inpatient admissions increased 3.4% and patient days increased 4.7% during the third quarter of 2007 as compared to the third quarter of 2006. On a same facility basis, net revenues at our behavioral health facilities increased 7.9% during the third quarter of 2007 as compared to the comparable prior year quarter. Net revenue per adjusted admission at these facilities increased 5.1% during the third quarter of 2007 over the comparable prior year quarter. The operating margin at our behavioral health facilities owned during both periods was 22.4% during the third quarter of 2007 as compared to 22.6% during the third quarter of 2006.

At our behavioral health facilities, on a same facility basis, inpatient admissions increased 3.4% and patient days increased 4.7% during the nine months ended September 30, 2007 as compared to the comparable prior year period. On a same facility basis, net revenues at our behavioral health facilities increased 6.7% during the nine months ended September 30, 2007 as compared to the comparable prior year nine-month period. Net revenue per adjusted admission at these facilities increased 3.3% during the first nine months of 2007 over the comparable prior year nine-month period. The operating margin at our behavioral health facilities owned during both periods was 23.7% during each of the nine-month periods ended September 30, 2007 and 2006.

Other Matters:

Over the last several weeks, at our request, our legal representatives have met with representatives of the United States Attorney's Office for the Southern District of Texas to discuss the status of the previously disclosed investigations of our South Texas Health System affiliates. Our representatives have been advised that the investigations remain active and ongoing and that the government is focused on payments to physicians and certain others that they believe may have been improper or illegal. We believe that the government is also focusing its investigation to determine whether the South Texas Health System affiliates and certain individuals illegally failed to fully comply with the original government subpoena. We are in the process of investigating these matters and are cooperating with the investigations and intend to respond to the matters raised with us. We are unable to evaluate the existence or extent of any potential financial exposure in connection with this matter at this time.

Conference Call Information:

We will hold a conference call for investors and analysts at 9:00 a.m. Eastern Time on October 30, 2007. 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 October 30, 2007 and will continue through midnight on November 12, 2007. The recording can be accessed by calling 1-800-642-1687 and entering the conference ID number 19454560. 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 and Forward-Looking Statements and Risk Factors:

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, 2006), 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 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-Q for the quarter ended June 30, 2007 and our Report on Form 10-K for the year ended December 31, 2006. 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 Nine months

ended September 30, ended September 30,

2007 2006 2007 2006

Net revenues $1,180,217 $1,043,457 $3,556,794 $3,125,419

Operating charges:

Salaries, wages and

benefits 510,917 459,099 1,520,489 1,336,087

Other operating

expenses 265,534 211,875 748,979 708,932

Supplies expense 162,342 146,944 506,946 400,271

Provision for doubtful

accounts 110,451 97,901 312,583 260,090

Depreciation and

amortization 46,548 40,961 135,417 120,360

Lease and rental

expense 17,920 16,184 50,701 48,247

Hurricane related

expenses, net 82 4,172 707 14,432

Hurricane insurance

recoveries - (4,172) - (14,432)

1,113,794 972,964 3,275,822 2,873,987

Income before interest

expense, hurricane

insurance recoveries

in excess of expenses,

minority interests and

income taxes 66,423 70,493 280,972 251,432

Interest expense, net 12,881 6,140 38,643 23,362

Hurricane insurance

recoveries in excess of

expenses - (130,328) - (167,359)

Minority interests in

earnings of consolidated

entities 9,784 14,948 32,651 37,617

Income before income taxes 43,758 179,733 209,678 357,812

Provision for income taxes 14,756 65,704 79,062 132,420

Income from continuing

operations 29,002 114,029 130,616 225,392

Loss from discontinued

operations, net of

income tax benefit (a) (148) (84) (183) (104)

Net income $28,854 $113,945 $130,433 $225,288

Basic earnings per share: (b)

From continuing

operations $0.54 $2.01 $2.44 $4.11

From discontinued

operations 0.00 0.00 0.00 0.00

Total basic earnings

per share $0.54 $2.01 $2.44 $4.11

Diluted earnings per share: (b)

From continuing

operations $0.54 $2.00 $2.43 $3.89

From discontinued

operations 0.00 0.00 0.00 0.00

Total diluted earnings

per share $0.54 $2.00 $2.43 $3.89

Universal Health Services, Inc.

Footnotes to Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

Three months Nine months

ended September 30, ended September 30,

2007 2006 2007 2006

(a) Calculation of income from

discontinued operations, net of

income tax:

Loss from operations ($240) ($133) ($296) ($165)

Income tax benefit 92 49 113 61

Loss from discontinued operations,

net of taxes ($148) ($84) ($183) ($104)

(b) Earnings per share calculation:

Basic:

Income from continuing operations $29,002 $114,029 $130,616 $225,392

Less: Dividends on unvested

restricted stock, net of taxes (18) (20) (62) (63)

Income from continuing operations

- basic $28,984 $114,009 $130,554 $225,329

Loss from discontinued operations (148) (84) (183) (104)

Net income - basic $28,836 $113,925 $130,371 $225,225

Weighted average number of common

shares - basic 53,481 56,794 53,491 54,764

Basic earnings (loss) per share:

From continuing operations $0.54 $2.01 $2.44 $4.11

From discontinued operations 0.00 0.00 0.00 0.00

Total basic earnings per share $0.54 $2.01
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SOURCE Universal Health Services, Inc.
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