<PAGE> 1
================================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
(_) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............to..........
Commission file number 0-10454
UNIVERSAL HEALTH SERVICES, INC.
- - - ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 23-2077891
- - - ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
UNIVERSAL CORPORATE CENTER
367 SOUTH GULPH ROAD
KING OF PRUSSIA, PENNSYLVANIA 19406
---------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (610) 768-3300
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Common shares outstanding, as
of October 31, 1995.
Class A 1,090,527
Class B 12,628,444
Class C 109,622
Class D 20,768
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Page One of Thirteen Pages
<PAGE> 2
UNIVERSAL HEALTH SERVICES, INC.
I N D E X
PART I. FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . PAGE NO.
Item 1. Financial Statements
Condensed Consolidated Statements of Income -
Three Months Ended September 30, 1995 and 1994
Nine Months Ended September 30, 1995 and 1994 . . . . . . . . . . Three
Condensed Consolidated Balance Sheets - September 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . Four
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1995 and 1994 . . . . . . . . . . . . Five
Notes to Condensed Consolidated Financial Statements . . . . . . Six & Seven
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . Eight, Nine, Ten & Eleven
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . Twelve
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thirteen
Page Two of Thirteen Pages
<PAGE> 3
PART I. FINANCIAL INFORMATION
UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(000's omitted except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------- -------------------------
1995 1994 1995 1994
------------------------- -------------------------
<S> <C> <C> <C> <C>
Net revenues $ 234,144 $ 191,512 $ 669,024 $ 578,143
Operating charges:
Operating expenses 92,068 73,856 260,629 223,773
Salaries and wages 83,120 71,143 238,758 211,225
Provision for doubtful accounts 21,823 16,011 55,065 42,082
Depreciation and amortization 13,218 10,871 36,276 31,107
Lease and rental expense 9,248 8,514 26,796 25,510
Interest expense, net 3,368 1,495 6,409 4,673
----------- ---------- ---------- ----------
222,845 181,890 623,933 538,370
----------- ---------- ---------- ----------
Income before income taxes 11,299 9,622 45,091 39,773
Provision for income taxes 4,070 3,787 16,466 15,498
----------- ---------- ---------- ----------
NET INCOME $ 7,229 $ 5,835 $ 28,625 $ 24,275
=========== ========== ========== ==========
Earnings per common
and common equivalent share: $ 0.51 $ 0.41 $ 2.04 $ 1.70
=========== ========== ========== ==========
Weighted average number of
common shares and equivalents: 14,058 14,314 14,004 14,490
=========== ========== ========== ==========
</TABLE>
See accompanying notes to these condensed consolidated financial statements.
Page Three of Thirteen Pages
<PAGE> 4
UNIVERSAL HEALTH SERVICES,INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's omitted)
<TABLE>
<CAPTION>
September 30, December 31,
------------- ------------
1995 1994
---- ----
(Unaudited)
-----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 156 $ 780
Accounts receivable, net 91,647 84,818
Supplies 19,350 15,723
Deferred income taxes 19,861 12,942
Other current assets 4,731 4,126
------------- -------------
Total current assets 135,745 118,389
------------- -------------
Property and equipment 664,787 596,702
Less: accumulated depreciation (256,897) (265,059)
------------- -------------
407,890 331,643
------------- -------------
OTHER ASSETS:
Excess of cost over fair value of net
assets acquired 140,860 38,762
Deferred income taxes 10,947 2,742
Deferred charges 10,534 1,527
Other 35,895 28,429
------------- -------------
198,236 71,460
------------- -------------
$ 741,871 $ 521,492
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 7,367 $ 7,236
Accounts payable and accrued liabilities 115,289 92,129
Federal and state taxes 5,775 4,417
------------- -------------
Total current liabilities 128,431 103,782
------------- -------------
Other noncurrent liabilities 78,223 71,956
------------- -------------
Long-term debt, net of current maturities 244,830 85,125
------------- -------------
COMMON STOCKHOLDERS' EQUITY:
Class A Common Stock, 1,090,527 shares
outstanding in 1995, 1,090,527 in 1994 11 11
Class B Common Stock, 12,628,189 shares
outstanding in 1995, 12,591,854 in 1994 126 126
Class C Common Stock, 109,622 shares
outstanding in 1995, 109,622 in 1994 1 1
Class D Common Stock, 21,023 shares
outstanding in 1995, 22,769 in 1994 0 0
Capital in excess of par, net of deferred
compensation of $278,000 in 1995
and $414,000 in 1994 89,428 88,295
Retained earnings 200,821 172,196
------------- -------------
290,387 260,629
------------- -------------
$ 741,871 $ 521,492
============= =============
</TABLE>
See accompanying notes to these condensed consolidated financial statements.
Page Four of Thirteen Pages
<PAGE> 5
UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted - unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-----------------
SEPTEMBER 30,
-------------
1995 1994
----------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $28,625 $24,275
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation & amortization 36,276 31,107
Provision for self-insurance reserves 11,106 7,797
Changes in assets & liabilities, net of effects from
acquisitions and dispositions:
Accounts receivable 14,927 3,014
Accrued interest (6) (1,487)
Accrued and deferred income taxes (13,766) (10,054)
Other working capital accounts 8,684 5,816
Other assets and deferred charges (7,377) (3,482)
Other 1,515 5,314
Payments made in settlement of self-insurance claims (5,349) (7,567)
---------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 74,635 54,733
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions, net (38,473) (38,712)
Acquisition of businesses, net of divestitures (187,346) (5,084)
Acquisition of assets held for lease (3,062) (6,638)
---------- -----------
NET CASH USED IN INVESTING ACTIVITIES (228,881) (50,434)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additional borrowings, net of financing costs 152,662 10,614
Reduction of long-term debt 0 (13,247)
Issuance of common stock 960 971
Repurchase of common shares 0 (2,221)
---------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 153,622 (3,883)
---------- -----------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (624) 416
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 780 569
---------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $156 $985
========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $6,415 $6,160
========== ===========
Income taxes paid, net of refunds $30,232 $25,552
========== ===========
</TABLE>
See accompanying notes to these condensed consolidated financial statements.
Page Five of Thirteen Pages
<PAGE> 6
UNIVERSAL HEALTH SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) GENERAL
The consolidated financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission and reflect all adjustments which, in the opinion of
the Company, are necessary to fairly present results for the interim periods.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the accompanying disclosures are adequate to make the
information presented not misleading. It is suggested that these financial
statements be read in conjunction with the financial statements, accounting
policies and the notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1994.
(2) EARNINGS PER SHARE
Earnings per share are based on the weighted average number of common shares
outstanding during the year adjusted to give effect to common stock
equivalents. The earnings per share for the first three months of the nine
month period ended September 30, 1994 have been adjusted to reflect the assumed
conversion of the Company's convertible debentures. In April 1994, the Company
redeemed the debentures which reduced the fully diluted number of shares
outstanding by 451,233.
(3) UNUSUAL ITEMS
Included in net revenues for each of the three month periods ended September
30, 1995 and 1994 was $3.1 million of additional revenues received from special
Medicaid reimbursements received by two of the Company's acute care facilities
which participate in the Texas Medical Assistance Program. Upon meeting
certain conditions of participation and serving a disproportionally high share
of the state's low income patients, the hospitals became eligible and received
additional reimbursement from the state's disproportionate share hospital fund.
Pursuant to the recently approved terms of this program covering the period of
September, 1995 through August, 1996, future revenues earned in accordance with
this plan will be reduced to approximately $7 million per year. This program
is scheduled to expire in August, 1996 and the Company can not predict whether
this program will continue beyond the scheduled termination date.
Included in net revenues for the nine month period ended September 30, 1995 is
$10.6 million of additional revenues received from the special Medicaid
reimbursement program mentioned above. Included in operating expenses during
the 1995 nine month period is a $2.7 million pre-tax charge related to the
Company's divestiture of two acute care hospitals in connection with the
acquisition of the 225-bed acute and psychiatric hospital located in Aiken,
South Carolina.
Included in net revenues for the nine month period ended September 30, 1994 is
$9.1 million of additional revenues received from the special Medicaid
reimbursement program. Included in operating expenses for the nine months
ended June 30, 1994 is a $2.8 million write-down recorded against the book
value of the real property of a psychiatric hospital owned by the Company and
leased to an unaffiliated third party, which is currently in default under the
terms of the lease, a $1.1 million favorable adjustment made to reduce the
Company's workers' compensation reserves and $2.5 million of expenses related
to the disposition of businesses.
Page Six of Thirteen Pages
<PAGE> 7
(4) OTHER LIABILITIES
Other noncurrent liabilities include the long-term portion of the Company's
professional and general liability and workers' compensation reserves.
(5) COMMITMENT AND CONTINGENCIES
Under certain agreements, the Company has committed or guaranteed an aggregate
of $22 million related principally to the Company's self-insurance programs and
as support for various debt instruments and loan guarantees.
(6) ACQUISITIONS, DIVESTITURES AND DEBT ISSUANCE
During the third quarter of 1995, the Company completed the acquisition of
Aiken Regional Medical Centers, a 225-bed acute care facility located in Aiken,
South Carolina for approximately $44 million in cash, a 104-bed acute care
hospital and a 126-bed acute care hospital. The majority of the real estate
assets of the 126-bed facility were being leased from Universal Health Realty
Income Trust (the "Trust") pursuant to the terms of an operating lease which
was scheduled to expire in 2000. In exchange for the real estate assets of the
126-bed acute care hospital, the Company exchanged substitution properties
consisting of additional real estate assets owned by the Company but related to
three acute care facilities which are operated by the Company but the real
estate of which is owned by the Trust. As a result of the divestiture of the
two acute care hospitals in connection with the acquisition of Aiken Regional
Medical Centers, the Company recorded a $2.7 million pre-tax charge during the
second quarter of 1995.
Also during the quarter, the Company completed the acquisition of a 512-bed
acute care hospital located in Bradenton, Florida for approximately $139
million in cash.
During the third quarter of 1995, the Company completed a $135 million issuance
of Senior Notes. The Senior Notes have an 8.75% coupon rate (9.2% effective
rate including amortization of interest rate swap termination fees and
amortization of bond discount) and are due in 2005. The notes can be redeemed
at a premium on or after August 15, 2000 through August 15, 2002 after which
time the notes are redeemable at par. The interest on the bonds will be paid
semiannually in arrears on February 15 and August 15 of each year. The net
proceeds generated from the Senior Note issuance totaled approximately $131
million and were used to finance the acquisitions described above.
(7) SUBSEQUENT EVENT
Subsequent to the third quarter of 1995, the Company sold the operations and
majority of assets of a 202-bed acute care hospital located in Plantation,
Florida for cash proceeds of approximately $20 million. The sale resulted in a
post-tax gain of approximately $5 million which will be recorded during the
fourth quarter of 1995.
Page Seven of Thirteen Pages
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Net revenues for the three and nine months ended September 30, 1995 increased
$43 million or 22% and $91 million or 16% over the comparable prior year
periods, respectively, due primarily to: (i) the acquisition of a 112-bed acute
care hospital in November of 1994; (ii) the acquisitions of a 225-bed acute
care facility and a 512-bed acute care facility acquired during the third
quarter of 1995 and; (iii) revenue growth at facilities owned during both
periods. Net revenues at acute care and behavioral health services hospital
facilities owned during both periods increased $9 million or 6% for the three
months ended September 30, 1995 and $35 million or 7% for the nine months ended
September 30, 1995 over the comparable prior year periods, excluding the
additional revenues received from the special Medicaid reimbursements received
by two of the Company's acute care facilities which participate in the Texas
Medical Assistance Program, as described in Note 3.
Excluding the net revenue effect of the special Medicaid reimbursement programs
and the unusual expense items included in the three and nine month periods
ended September 30, 1995 and 1994 described below, earnings before interest,
income taxes, depreciation, amortization and lease rental expense (EBITDAR)
increased 24% or $6.6 million and 10% or $9.3 million during the three and nine
month periods ended September 30, 1995 over the comparable prior year periods,
respectively. Included in operating expenses for the nine months ended
September 30, 1995 is a $2.7 million pre-tax charge related to the Company's
divestiture of two acute care hospitals in connection with the acquisition of
the 225-bed acute hospital located in Aiken, South Carolina. Included in
operating expenses for the nine months ended September 30, 1994 is a $2.8
million write-down recorded against the book value of the real property of a
psychiatric hospital owned by the Company and leased to an unaffiliated third
party which is in default of the lease, a $1.1 million favorable adjustment
made to reduce the Company's workers' compensation reserves and $2.5 million of
expenses related to the disposition of businesses. Overall operating margins,
excluding the special Medicaid reimbursements and unusual expense items
mentioned above, were 14.7% and 14.6% for the three month periods ended
September 30, 1995 and 1994 and 16.2% and 16.9% for the nine month periods
ended September 30, 1995 and 1994, respectively.
ACUTE CARE SERVICES
Net revenues from the Company's acute care hospitals and ambulatory treatment
centers accounted for 86% of the consolidated net revenues for each of the
three and nine month periods ended September 30, 1995 and 85% of the
consolidated net revenues for each of the three and nine month periods ended
September 30, 1994.
Page Eight of Thirteen Pages
<PAGE> 9
Net revenues at the Company's acute care hospitals owned during both periods
increased 7% during the three months ended September 30, 1995 and 8% during the
nine months ended September 30, 1995 over the comparable prior year periods,
after excluding the revenues received from the special Medicaid reimbursements.
Despite the continued shift in the delivery of healthcare services to
outpatient care, the Company's acute care hospitals owned during both periods
experienced a 10% increase in admissions and a 6% increase in patient days for
the three months ended September 30, 1995, and a 9% increase in admissions and
a 4% increase in patient days for the nine months ended September 30, 1995 over
the comparable prior year periods, respectively. Outpatient activity at the
Company's acute care hospitals continues to increase as gross outpatient
revenues at the hospitals owned during both periods increased 12% and 18%
during the three and nine months ended September 30, 1995 over the comparable
prior year periods, respectively, and comprised 24% and 25% of the Company's
gross patient revenues for the three months ended September 30, 1995 and 1994
and 24% of gross patient revenues for each of the nine month periods ended
September 30, 1995 and 1994, respectively. The increase is primarily the
result of advances in medical technologies, which allow more services to be
provided on an outpatient basis and increased pressure from Medicare, Medicaid,
health maintenance organizations (HMOs), preferred provider organizations
(PPOs) and insurers to reduce hospital stays and provide services, where
possible, on a less expensive outpatient basis. To accommodate the increased
utilization of outpatient services, the Company has expanded or redesigned
several of its outpatient facilities and services.
In addition, to take advantage of the trend toward increased outpatient
services, the Company has continued to invest in the acquisition and
development of outpatient surgery and radiation therapy centers. The Company
currently operates or manages twenty-five outpatient treatment centers, which
have contributed to the increase in the Company's outpatient revenues. The
Company expects the growth in outpatient services to continue, although the
rate of growth may be moderated in the future.
BEHAVIORAL HEALTH SERVICES
Net revenues from the Company's behavioral health services accounted for 13%
and 14% of the consolidated net revenues for the three and nine month periods
ended September 30, 1995 and 14% and 15% of the consolidated net revenues for
the three and nine month periods ended September 30, 1994. Net revenues at the
Company's behavioral health services hospitals owned during both periods
remained relatively unchanged for the three and nine months ended September 30,
1995 as compared to the comparable prior year periods. Admissions at the
Company's behavioral health services hospitals owned during both periods
increased 2% and patient days increased 3% during the three months ended
September 30, 1995, and admissions increased 4% and patient days increased 1%
during the nine months ended September 30, 1995 over the comparable prior year
periods, respectively. The average length of stay at these facilities, which
decreased 3% for the nine months ended September 30, 1995, remained relatively
unchanged for the three months ended September 30, 1995 as compared to the
comparable prior year periods, respectively. The reduction in the average
length of stay for the nine months of 1995 as compared to the first half of
1994 is a result of changing practices in the delivery of psychiatric care and
continued cost containment pressures from payors which includes a greater
emphasis on the utilization of outpatient services. Management of the Company
has responded to these trends by developing and marketing new outpatient
treatment programs.
Page Nine of Thirteen Pages
<PAGE> 10
The shift to outpatient care is reflected in higher revenues from outpatient
services, as gross outpatient revenues at the Company's behavioral health
services hospitals owned during both periods increased 6% and 12% for the three
and nine months ended September 30, 1995 over the comparable prior year periods
and comprised 16% of the Company's behavioral health services gross patient
revenues for each of the three and nine month periods ended June 30, 1995 as
compared to 15% and 14% in the comparable prior year periods, respectively.
OTHER OPERATING RESULTS
Depreciation and amortization expense increased $2.3 million and $5.2 million
for the three and nine months ended September 30, 1995 over the comparable
prior year periods, respectively, due primarily to: (i) the acquisition of a
112-bed acute care hospital in November of 1994; (ii) the third quarter of 1995
acquisitions of a 225-bed acute and psychiatric care facility and a 512-bed
acute care facility and; (iii) additional depreciation expense related to
capital expenditures and expansions made in the Company's acute care division.
The effective tax rate was 36% and 39% for the three months ended September 30,
1995 and 1994 and 37% and 39% for the nine months ended September 30, 1995 and
1994, respectively. The reduction in the Company's effective tax rate in the
1995 periods as compared to the comparable 1994 periods was attributable to two
factors: (i) the financing of employee benefit programs and; (ii) the
deductibility of previously non-deductible goodwill amortization resulting from
the sale of two hospitals.
GENERAL TRENDS
An increased proportion of the Company's revenue is derived from fixed payment
services, including Medicare and Medicaid which accounted for 46% and 42% of
the Company's net patient revenues for the three months ended September 30,
1995 and 1994 and 46% and 43% of the Company's net patient revenues for the
nine months ended September 30, 1995 and 1994, respectively, excluding the
additional revenues from the special Medicaid reimbursement programs. The
Company expects the Medicare and Medicaid revenues to continue to increase as a
larger portion of the general population qualifies for coverage as a result of
the aging population and expansion of state Medicaid programs. The Medicare
program reimburses the Company's hospitals primarily based on established rates
by a diagnosis related group for acute care hospitals and by a cost based
formula for psychiatric hospitals.
In addition to the Medicare and Medicaid programs, other payors continue to
actively negotiate the amounts they will pay for services performed. In
general, the Company expects the percentage of its business from managed care
programs, including HMOs and PPOs to grow. The consequent growth in managed
care networks and the resulting impact of these networks on the operating
results of the Company's facilities vary among the markets in which the Company
operates.
In addition to the trends described above that continue to have an impact on
operating results, there are a number of other, more general factors affecting
the Company's business. Both the House of Representatives and the Senate have
passed legislation providing for substantial Medicare savings over a seven year
period, including reductions in payments to hospitals, which would limit the
rate of growth of the program.
Page Ten of Thirteen Pages
<PAGE> 11
The House of Representatives and the Senate bills have not yet been reconciled
and the ultimate legislation will be subject to Presidential approval. The
Company cannot predict what new legislation may ultimately be enacted, and if
enacted, no assurance can be given that the implementation of such reforms will
not have a material adverse effect on the Company's business. In Texas, a law
has been passed which mandates that the state senate apply for a waiver from
current Medicaid regulations to allow the state to require that certain
Medicaid participants be serviced through managed care providers. The Company
is unable to predict whether Texas will be granted such a waiver or the effect
on the Company's business of such waiver.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $74.6 million during the first
nine months of 1995 as compared to $54.7 million in the comparable 1994 period.
The increase during the 1995 first nine months as compared to the comparable
1994 period was due primarily to a $13 million increase in net income plus the
addback of the non-cash charges (depreciation, amortization and provision for
self-insurance reserves), a $15 million reduction in accounts receivable during
the first nine months of 1995 from the 1994 year end balance as compared to a
$3 million reduction in accounts receivable during the first nine months of
1994 from the 1993 year end balance. These favorable increases in net cash
provided by operating activities during the first nine months of 1995 as
compared to the comparable prior year period were partially offset by a $5
million increase in income tax payments. The favorable change in accounts
receivable during the first nine months of 1995 was due primarily to the
realization of several large Medicare cost report settlements. The net cash
provided by operating activities substantially exceeded the scheduled
maturities of long-term debt.
During the first nine months of 1995, the Company used its operating cash flow
and additional borrowed funds ($227 million) primarily to: (i) purchase the
225-bed acute care hospital located in Aiken, SC and the 512-bed acute care
hospital located in Bradenton, FL ($183 million) and; (ii) to finance capital
expenditures ($38 million).
During the third quarter of 1995, the Company completed the acquisitions of a
225-bed acute and psychiatric hospital and a 512-bed acute care hospital in
exchange for $183 million in cash and a 104-bed acute care facility and a
126-bed acute care hospital (see Note 6). In connection with the acquisition
of Edinburg hospital in 1994, the Company is committed to invest at least an
additional $30 million over a ten year period to renovate the existing facility
and construct an additional facility.
During the third quarter of 1995, the Company completed a $135 million issuance
of Senior Notes. The Senior Notes have an 8.75% coupon rate (9.2% effective
rate including amortization of interest rate swap termination fees and
amortization of bond discount) and are due in 2005. The notes can be redeemed
at a premium on or after August 15, 2000 through August 15, 2002 after which
time the notes are redeemable at par. The interest on the Notes will be paid
semiannually in arrears on February 15 and August 15 of each year. The net
proceeds generated from the Note issuance totaled approximately $131 million
and were used to finance the acquisitions as described in Note 6.
The Company expects to finance all capital expenditures and acquisitions with
internally generated funds and borrowed funds. As of September 30, 1995, the
Company had approximately $200 million of unused borrowing capacity under its
commercial paper and revolving credit facilities.
Page Eleven of Thirteen Pages
<PAGE> 12
PART II. OTHER INFORMATION
UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
A current report on Form 8-K dated and filed on September 15, 1995, and
amended on Form 8-K/A dated and filed on October 5, 1995, reporting the
acquisition of substantially all of the assets and operations of Manatee
Memorial Hospital under Item 2. The following financial information was
provided under Item 7: (i) the audited Financial Statements of Manatee
Hospitals and Health Systems, Inc. as of and for the Years ended August 31,
1994 and 1993, incorporated by reference to pages F-31 to F-45 of the
Company's Registration Statement on Form S-3, File No. 33-60287, declared
effective on July 18, 1995; (ii) the unaudited interim combined financial
statements of Manatee Hospitals and Health Systems, Inc. as of and for the
Ten Months ended June 30, 1995 and 1994; (iii) the Pro Forma Condensed
Consolidated Income Statement for year ended December 31, 1994 for Universal
Health Services, Inc. and Subsidiaries, incorporated by reference to page
S-4 of the Company's Registration Statement on Form S-3, File No. 33-60287,
declared effective on July 18,1995, and ; (iv) the Pro Forma Balance Sheet
and Condensed Consolidated Income Statement for Universal Health Services,
Inc. and Subsidiaries as of and for the Six Months ended June 30, 1995.
11. Statement re computation of per share earnings is set forth on Page six in
Note 2 of the Notes to Condensed Consolidated Financial Statements.
All other items of this Report are inapplicable.
Page Twelve of Thirteen Pages
<PAGE> 13
UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Universal Health Services, Inc.
(Registrant)
Date: November 10, 1995 /s/ Kirk E. Gorman
-------------------------------------------
Kirk E. Gorman, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer and Duly
Authorized Officer).
Page Thirteen of Thirteen Pages
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 156
<SECURITIES> 0
<RECEIVABLES> 91,647
<ALLOWANCES> 0
<INVENTORY> 19,350
<CURRENT-ASSETS> 135,745
<PP&E> 664,787
<DEPRECIATION> 256,897
<TOTAL-ASSETS> 741,871
<CURRENT-LIABILITIES> 128,431
<BONDS> 244,830
<COMMON> 138
0
0
<OTHER-SE> 290,249
<TOTAL-LIABILITY-AND-EQUITY> 741,871
<SALES> 0
<TOTAL-REVENUES> 669,024
<CGS> 0
<TOTAL-COSTS> 499,387
<OTHER-EXPENSES> 63,072
<LOSS-PROVISION> 55,065
<INTEREST-EXPENSE> 6,409
<INCOME-PRETAX> 45,091
<INCOME-TAX> 16,466
<INCOME-CONTINUING> 28,625
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,625
<EPS-PRIMARY> 2.04
<EPS-DILUTED> 2.04
</TABLE>
