4/10/2017 Universal Health Services (UHS) Alan B. Miller on Q2 2016 Results - Earnings Call Transcript Seeking Alpha Universal Health Services (UHS) Alan B. Miller on Q2 2016 Results Earnings Call Transcript Jul.27.16 About: Universal Health (UHS) Q2: 07-25-16 Earnings Summary 10-Q News EPS of $1.94 Revenue of $2.43B (+ 6.6% Y/Y) misses by $-30M Universal Health Services, Inc. (NYSE:UHS) Q2 2016 Earnings Call July 27, 2016 9:00 am ET Executives Steve G. Filton - Senior Vice President and Chief Financial Officer Alan B. Miller - Chairman & Chief Executive Officer Analysts Paula Torch - Avondale Partners LLC Frank Lee - Susquehanna Financial Group LLLP Tejus Ujjani - Goldman Sachs & Co. Joanna S. Gajuk - Bank of America Gary Lieberman - Wells Fargo Securities LLC Whit Mayo - Robert W. Baird & Co., Inc. (Broker) Joshua Raskin - Barclays Capital, Inc. John W. Ransom - Raymond James & Associates, Inc. A.J. Rice - UBS Securities LLC Ana A. Gupte - Leerink Partners LLC https://seekingalpha.com/article/3992125-universal-health-services-uhs-alan-b-miller-q2-2016-results-earnings-call-transcript 1/3 4/10/2017 Universal Health Services (UHS) Alan B. Miller on Q2 2016 Results - Earnings Call Transcript Seeking Alpha Ralph Giacobbe - Citigroup Global Markets, Inc. (Broker) Operator Good morning. My name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Universal Health Services second quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. And, Mr. Steve Filton, you may begin your conference. Steve G. Filton - Senior Vice President and Chief Financial Officer Good morning. Alan Miller, our CEO, is also joining us this morning. Welcome to this review of Universal Health Services' results for the second quarter ended June 30, 2016. During this conference call, Alan and I will be using words such as "believes," "expects," "anticipates," "estimates," and similar words that represent forecasts, projections, and forward-looking statements. For anyone not familiar with the risks and uncertainties inherent in these forward-looking statements, I recommend a careful reading of the section on Risk Factors and Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2015, and our Form 10-Q for the quarter ended March 31, 2016. We would like to highlight just a couple of developments and business trends before opening the call up to your questions. As discussed in our press release last night, the company recorded net income attributable to UHS per diluted share of $1.89 for the quarter. After adjusting each quarters' reported results for the incentive income and expenses recorded in connection with the implementation of electronic health records applications at our acute care hospitals as disclosed on the supplemental schedule included with last night earnings release, adjusted net income attributable to UHS increased to $191.1 million or $1.94 per diluted share during the second quarter of 2016 as compared to $186.6 million or $1.85 per diluted share during the second quarter of last year. On a same-facility basis in our acute care division, revenues during the second quarter of 2016 increased 7.4% over last year's comparable quarter. The increase resulted primarily from a 3.9% increase in adjusted admissions to our hospitals owned for more than a year https://seekingalpha.com/article/3992125-universal-health-services-uhs-alan-b-miller-q2-2016-results-earnings-call-transcript 2/3 4/10/2017 Universal Health Services (UHS) Alan B. Miller on Q2 2016 Results - Earnings Call Transcript Seeking Alpha and a 1.3% increase in revenue per adjusted admission. On a same-facility basis, operating margins for our acute care division decreased to 17.7% during the second quarter of 2016 from 19.1% during the second quarter of 2015. On a same-facility basis, net revenues in our behavioral health division increased 2.0% during the second quarter of 2016 as compared to the second quarter of 2015. During this year's second quarter as compared to last year's, adjusted admissions to our behavioral health facilities owned for more than a year decreased 0.3%, and adjusted patient days increased 0.2%. Revenue per adjusted admission and adjusted patient day rose 2.4% and 1.9%, respectively, during the second quarter of 2016 over the comparable prior-year quarter. On a same-facility basis, operating margins for our behavioral health division were 28.1% and 28.7% during the quarters ended June 30, 2016 and 2015 respectively. For the six months ended June 30, 2016, our cash provided by operating activities increased approximately 50% to $801 million over the $532 million generated during the comparable six-month period of 2015. Our accounts receivable days outstanding decreased slightly to 50 days during the second quarter of 2016 as compared to 54 days during the second quarter of 2015. https://seekingalpha.com/article/3992125-universal-health-services-uhs-alan-b-miller-q2-2016-results-earnings-call-transcript 3/3