4/10/2017 Universal Health Services' (UHS) CEO Alan Miller on Q3 2016 Results - Earnings Call Transcript Seeking Alpha Universal Health Services' (UHS) CEO Alan Miller on Q3 2016 Results Earnings Call Transcript Oct.30.16 About: Universal Health (UHS) Q3: 10-23-16 Earnings Summary Press Release 10-Q News EPS of $1.6 misses by $-0.08 Revenue of $2.41B (+ 8.1% Y/Y) beats by $10M Universal Health Services Inc. (NYSE:UHS) Q3 2016 Earnings Conference Call October 27, 2016 9:00 A.M. ET Executives Steve Filton - Senior Vice President and Chief Financial Officer Alan Miller - Chief Executive Officer Analysts Tejus Ujjani - Goldman Sachs Justin Lake - Wolfe Research Ralph Giacobbe - Citi Paula Torch - Avondale Partners Gary Lieberman - Wells Fargo A.J. Rice - UBS Frank Morgan - RBC Capital Markets Josh Raskin - Barclays Ana Gupte - Leerink Whit Mayo - Robert Baird https://seekingalpha.com/article/4016781-universal-health-services-uhs-ceo-alan-miller-q3-2016-results-earnings-call-transcript 1/3 4/10/2017 Universal Health Services' (UHS) CEO Alan Miller on Q3 2016 Results - Earnings Call Transcript Seeking Alpha Kevin Fischbeck - Bank of America Operator Good morning. My name is Sia, and I will be the conference operator today. At this time, I would like to welcome everyone to the Third Quarter Earnings Conference Call. [Operator Instructions] Thank you. At this time, I would like to turn the conference over to Steve Filton. Please go ahead sir. Steve Filton Thank you. Good morning. Alan Miller, our CEO, is also joining us this morning. Welcome to this review of Universal Health Services results for the third quarter ended September 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 those forward-looking statements, I recommend a careful reading of the section on Risk Factors and Forwardlooking 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 June 30, 2016. We'd like to highlight just a couple of developments and business trends before opening the call up to questions. As discussed in our press release last night, the company reported net income attributable to UHS of $1.54 per diluted share for the third quarter of 2016. After adjusting each quarter's reported results for the incentive income and expenses recorded in connection with the implementation of electronic health record applications at our acute care hospitals, as disclosed on the supplemental schedule included with last night's earnings release, adjusted net income attributable to UHS was $157.2 million or $1.60 per diluted share during the third quarter of 2016, as compared to $155.3 million or $1.53 per diluted share during the third quarter of 2015. On a same facility basis in our acute care division, net revenues during the third quarter of 2016 increased 9.0% over last year's comparable quarter. The increase resulted primarily from a 4.6% increase in adjusted admissions to our hospitals owned for more than a year and a 3.2% increase in revenue per adjusted admission. On a same facility basis, operating margins for our acute care hospitals decreased to 14.7% during the third quarter of 2016 from 15.3% during the third quarter of 2015. https://seekingalpha.com/article/4016781-universal-health-services-uhs-ceo-alan-miller-q3-2016-results-earnings-call-transcript 2/3 4/10/2017 Universal Health Services' (UHS) CEO Alan Miller on Q3 2016 Results - Earnings Call Transcript Seeking Alpha On a same facility basis, net revenues in our behavioral health division increased 2.7% during the third quarter of 2016 as compared to the third quarter of 2015. During this year's third quarter, adjusted patient days to our behavioral health facilities increased 1.1%, and revenue per adjusted patient day increased 1.5% as compared to last year's third quarter. Operating margins for our behavioral health hospitals owned for more than a year were 26.0% and 27.4% during the quarters ended September 30, 2016 and 2015, respectively. For the nine months ended September 30, 2016, our net cash provided by operating activities increased approximately 38% to $1.1 billion over the $796 million generated during the comparable nine-month period of 2015. Our accounts receivable days outstanding decreased to 50 days during the third quarter of 2016, as compared to 55 days during the third quarter of 2015. At September 30, 2016, our ratio of debt-to-total capitalization was 45.3%. We spent $148 million on capital expenditures during the third quarter of 2016 and $396 million during the first nine months of 2016. https://seekingalpha.com/article/4016781-universal-health-services-uhs-ceo-alan-miller-q3-2016-results-earnings-call-transcript 3/3