Supplemental Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2012

Supplemental Condensed Consolidating Financial Information [Abstract]

Supplemental Condensed Consolidating Financial Information

(12) Supplemental Condensed Consolidating Financial Information

Certain of our senior notes are guaranteed by a group of subsidiaries (the “Guarantors”). The Guarantors, each of which is a 100% directly owned subsidiary of Universal Health Services, Inc., fully and unconditionally guarantee the senior notes on a joint and several basis, subject to certain customary release provisions.

The following financial statements present condensed consolidating financial data for (i) Universal Health Services, Inc. (on a parent company only basis), (ii) the combined Guarantors, (iii) the combined non guarantor subsidiaries (all other subsidiaries), (iv) an elimination column for adjustments to arrive at the information for the parent company, Guarantors, and non guarantors on a consolidated basis, and (v) the parent company and our subsidiaries on a consolidated basis.

Investments in subsidiaries are accounted for by the parent company and the Guarantors using the equity method for this presentation. Results of operations of subsidiaries are therefore classified in the parent company’s and Guarantors’ investment in subsidiaries accounts. The elimination entries set forth in the following condensed consolidating financial statements eliminate distributed and undistributed income of subsidiaries, investments in subsidiaries, and intercompany balances and transactions between the parent, Guarantors, and non guarantors.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,269,429		$	605,991		$	(6,157	)	$	1,869,263
Less: Provision for doubtful accounts		0			110,187			78,723			0			188,910
Net revenues		0			1,159,242			527,268			(6,157	)		1,680,353
Operating charges:
Salaries, wages and benefits		0			595,752			242,323			0			838,075
Other operating expenses		0			236,012			132,737			(6,062	)		362,687
Supplies expense		0			118,357			73,390			0			191,747
EHR incentive income		0			(3,109	)		(7,442	)		0			(10,551	)
Depreciation and amortization		0			52,986			24,046			0			77,032
Lease and rental expense		0			14,884			8,692			(95	)		23,481
Costs related to extinguishment of debt		29,170			0			0			0			29,170
		29,170			1,014,882			473,746			(6,157	)		1,511,641
Income from operations		(29,170	)		144,360			53,522			0			168,712
Interest expense		43,649			886			672			0			45,207
Interest (income) expense, affiliate		0			22,782			(22,782	)		0			0
Equity in net income of consolidated affiliates		(116,764	)		(25,037	)		0			141,801			0
Income before income taxes		43,945			145,729			75,632			(141,801	)		123,505
Provision for income taxes		(27,872	)		50,012			19,992			0			42,132
Net income		71,817			95,717			55,640			(141,801	)		81,373
Less: Income attributable to noncontrolling interests		0			0			9,556			0			9,556
Net income attributable to UHS	$	71,817		$	95,717		$	46,084		$	(141,801	)	$	71,817

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	3,896,741		$	1,840,971		$	(19,036	)	$	5,718,676
Less: Provision for doubtful accounts		0			304,955			217,248			0			522,203
Net revenues		0			3,591,786			1,623,723			(19,036	)		5,196,473
Operating charges:
Salaries, wages and benefits		0			1,825,547			739,505			0			2,565,052
Other operating expenses		0			695,599			382,201			(18,752	)		1,059,048
Supplies expense		0			369,190			225,734			0			594,924
EHR incentive income		0			(5,064	)		(7,442	)		0			(12,506	)
Depreciation and amortization		0			155,242			66,565			0			221,807
Lease and rental expense		0			44,122			27,068			(284	)		70,906
Costs related to extinguishment of debt		29,170			0			0			0			29,170
		29,170			3,084,636			1,433,631			(19,036	)		4,528,401
Income from operations		(29,170	)		507,150			190,092			0			668,072
Interest expense		133,101			2,511			2,193			0			137,805
Interest (income) expense, affiliate		0			68,347			(68,347	)		0			0
Equity in net income of consolidated affiliates		(408,146	)		(94,662	)		0			502,808			0
Income before income taxes		245,875			530,954			256,246			(502,808	)		530,267
Provision for income taxes		(62,110	)		186,641			64,349			0			188,880
Net income		307,985			344,313			191,897			(502,808	)		341,387
Less: Income attributable to noncontrolling interests		0			0			33,402			0			33,402
Net income attributable to UHS	$	307,985		$	344,313		$	158,495		$	(502,808	)	$	307,985

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,237,210		$	583,581		$	(6,105	)	$	1,814,686
Less: Provision for doubtful accounts		0			90,046			61,965			0			152,011
Net revenues		0			1,147,164			521,616			(6,105	)		1,662,675
Operating charges:
Salaries, wages and benefits		0			587,621			240,985			0			828,606
Other operating expenses		0			232,667			117,216			(6,010	)		343,873
Supplies expense		0			123,204			75,590			0			198,794
Depreciation and amortization		0			53,218			19,952			0			73,170
Lease and rental expense		0			14,949			7,850			(95	)		22,704
		0			1,011,659			461,593			(6,105	)		1,467,147
Income from operations		0			135,505			60,023			0			195,528
Interest expense, net		47,113			810			529			0			48,452
Interest (income) expense, affiliate		0			15,904			(15,904	)		0			0
Equity in net income of consolidated affiliates		(113,314	)		(29,851	)		0			143,165			0
Income before income taxes		66,201			148,642			75,398			(143,165	)		147,076
Provision for income taxes		(18,853	)		51,165			19,922			0			52,234
Net income		85,054			97,477			55,476			(143,165	)		94,842
Less: Income attributable to noncontrolling interests		0			0			9,788			0			9,788
Net income attributable to UHS	$	85,054		$	97,477		$	45,688		$	(143,165	)	$	85,054

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	3,781,885		$	1,790,141		$	(18,758	)	$	5,553,268
Less: Provision for doubtful accounts		0			260,713			195,329			0			456,042
Net revenues		0			3,521,172			1,594,812			(18,758	)		5,097,226
Operating charges:
Salaries, wages and benefits		0			1,775,194			717,376			0			2,492,570
Other operating expenses		0			697,527			351,438			(18,473	)		1,030,492
Supplies expense		0			376,674			226,983			0			603,657
Depreciation and amortization		0			154,788			59,040			0			213,828
Lease and rental expense		0			45,888			22,898			(285	)		68,501
		0			3,050,071			1,377,735			(18,758	)		4,409,048
Income from operations		0			471,101			217,077			0			688,178
Interest expense, net		150,369			2,412			1,896			0			154,677
Interest (income) expense, affiliate		0			47,712			(47,712	)		0			0
Equity in net income of consolidated affiliates		(394,754	)		(118,102	)		0			512,856			0
Income before income taxes		244,385			539,079			262,893			(512,856	)		533,501
Provision for income taxes		(58,511	)		191,297			59,852			0			192,638
Net income		302,896			347,782			203,041			(512,856	)		340,863
Less: Income attributable to noncontrolling interests		0			0			37,967			0			37,967
Net income attributable to UHS	$	302,896		$	347,782		$	165,074		$	(512,856	)	$	302,896

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	71,817		$	95,717	$	55,640	$	(141,801	)	$	81,373
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		(45	)		0		0		0			(45	)
Amortization of terminated hedge		(84	)		0		0		0			(84	)
Other comprehensive income before tax		(129	)		0		0		0			(129	)
Income tax expense related to items of other comprehensive income		(47	)		0		0		0			(47	)
Total other comprehensive income, net of tax		(82	)		0		0		0			(82	)
Comprehensive income		71,735			95,717		55,640		(141,801	)		81,291
Less: Comprehensive income attributable to noncontrolling interests		0			0		9,556		0			9,556
Comprehensive income attributable to UHS	$	71,735		$	95,717	$	46,084	$	(141,801	)	$	71,735

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	307,985		$	344,313	$	191,897	$	(502,808	)	$	341,387
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		1,782			0		0		0			1,782
Amortization of terminated hedge		(252	)		0		0		0			(252	)
Other comprehensive income before tax		1,530			0		0		0			1,530
Income tax expense related to items of other comprehensive income		585			0		0		0			585
Total other comprehensive income, net of tax		945			0		0		0			945
Comprehensive income		308,930			344,313		191,897		(502,808	)		342,332
Less: Comprehensive income attributable to noncontrolling interests		0			0		33,402		0			33,402
Comprehensive income attributable to UHS	$	308,930		$	344,313	$	158,495	$	(502,808	)	$	308,930

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	85,054		$	97,477	$	55,476	$	(143,165	)	$	94,842
Other comprehensive income (loss):
Unrealized derivative losses on cash flow hedges		(21,360	)		0		0		0			(21,360	)
Amortization of terminated hedge		(84	)		0		0		0			(84	)
Other comprehensive income before tax		(21,444	)		0		0		0			(21,444	)
Income tax expense related to items of other comprehensive income		(8,214	)		0		0		0			(8,214	)
Total other comprehensive income, net of tax		(13,230	)		0		0		0			(13,230	)
Comprehensive income		71,824			97,477		55,476		(143,165	)		81,612
Less: Comprehensive income attributable to noncontrolling interests		0			0		9,788		0			9,788
Comprehensive income attributable to UHS	$	71,824		$	97,477	$	45,688	$	(143,165	)	$	71,824

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	302,896		$	347,782	$	203,041	$	(512,856	)	$	340,863
Other comprehensive income (loss):
Unrealized derivative losses on cash flow hedges		(39,636	)		0		0		0			(39,636	)
Amortization of terminated hedge		(252	)		0		0		0			(252	)
Other comprehensive income before tax		(39,888	)		0		0		0			(39,888	)
Income tax expense related to items of other comprehensive income		(15,270	)		0		0		0			(15,270	)
Total other comprehensive income, net of tax		(24,618	)		0		0		0			(24,618	)
Comprehensive income		278,278			347,782		203,041		(512,856	)		316,245
Less: Comprehensive income attributable to noncontrolling interests		0			0		37,967		0			37,967
Comprehensive income attributable to UHS	$	278,278		$	347,782	$	165,074	$	(512,856	)	$	278,278

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2012

(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	18,487		$	7,165		$	0		$	25,652
Accounts receivable, net		3,314		732,142			307,079			0			1,042,535
Supplies		0		59,561			37,452			0			97,013
Other current assets		8,065		73,270			11,687			0			93,022
Deferred income taxes		81,894		41,237			322			(322	)		123,131
Current assets held for sale		0		107,071			0			0			107,071
Total current assets		93,273		1,031,768			363,705			(322	)		1,488,424
Investments in subsidiaries		5,621,719		1,276,511			0			(6,898,230	)		0
Intercompany receivable		422,241		0			175,909			(598,150	)		0
Intercompany note receivable		0		0			1,142,539			(1,142,539	)		0
Property and equipment		0		3,748,468			1,492,441			0			5,240,909
Less: accumulated depreciation		0		(1,243,819	)		(681,014	)		0			(1,924,833	)
		0		2,504,649			811,427			0			3,316,076
Other assets:
Goodwill		820		2,101,345			492,575			0			2,594,740
Deferred charges		72,388		5,928			8,776			0			87,092
Other		8,971		202,818			82,945			0			294,734
	$	6,219,412	$	7,123,019		$	3,077,876		$	(8,639,241	)	$	7,781,066
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	0	$	1,029		$	1,470		$	0		$	2,499
Accounts payable and accrued liabilities		22,582		604,201			184,180			0			810,963
Current liabilities held for sale		0		18,112			0			0			18,112
Federal and state taxes		5,966		188			620			0			6,774
Total current liabilities		28,548		623,530			186,270			0			838,348
Intercompany payable		0		598,150			0			(598,150	)		0
Other noncurrent liabilities		51,880		250,752			105,903			0			408,535
Long-term debt		3,388,425		1,153			51,384			0			3,440,962
Intercompany note payable		0		1,142,539			0			(1,142,539	)		0
Deferred income taxes		141,777		54,237			0			(322	)		195,692
Redeemable noncontrolling interests		0		0			234,056			0			234,056
UHS common stockholders’ equity		2,608,782		4,452,658			2,445,572			(6,898,230	)		2,608,782
Noncontrolling interest		0		0			54,691			0			54,691
Total equity		2,608,782		4,452,658			2,500,263			(6,898,230	)		2,663,473
	$	6,219,412	$	7,123,019		$	3,077,876		$	(8,639,241	)	$	7,781,066

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2011

(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	33,221		$	8,008		$	0		$	41,229
Accounts receivable, net		8,891		663,593			297,318			0			969,802
Supplies		0		59,467			37,308			0			96,775
Other current assets		33,057		56,864			9,938			0			99,859
Deferred income taxes		67,189		41,755			322			(942	)		108,324
Current assets held for sale		0		48,916			0			0			48,916
Total current assets		109,137		903,816			352,894			(942	)		1,364,905
Investments in subsidiaries		5,213,573		1,181,849			0			(6,395,422	)		0
Intercompany receivable		669,112		0			74,155			(743,267	)		0
Intercompany note receivable		0		0			1,148,839			(1,148,839	)		0
Property and equipment		0		3,650,025			1,456,135			0			5,106,160
Less: accumulated depreciation		0		(1,184,283	)		(633,897	)		0			(1,818,180	)
		0		2,465,742			822,238			0			3,287,980
Other assets:
Goodwill		820		2,132,103			494,679			0			2,627,602
Deferred charges		103,434		5,972			2,374			0			111,780
Other		10,412		241,107			21,459			0			272,978
	$	6,106,488	$	6,930,589		$	2,916,638		$	(8,288,470	)	$	7,665,245
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	0	$	1,133		$	1,346		$	0		$	2,479
Accounts payable and accrued liabilities		14,201		616,026			201,898			0			832,125
Current liabilities held for sale		0		2,329			0			0			2,329
Federal and state taxes		0		0			620			(620	)		0
Total current liabilities		14,201		619,488			203,864			(620	)		836,933
Intercompany payable		0		743,267			0			(743,267	)		0
Other noncurrent liabilities		49,840		249,033			103,035			0			401,908
Long-term debt		3,594,182		3,616			53,630			0			3,651,428
Intercompany note payable		0		1,148,839			0			(1,148,839	)		0
Deferred income taxes		151,913		58,001			0			(322	)		209,592
Redeemable noncontrolling interests		0		0			218,266			0			218,266
UHS common stockholders’ equity		2,296,352		4,108,345			2,287,077			(6,395,422	)		2,296,352
Noncontrolling interest		0		0			50,766			0			50,766
Total equity		2,296,352		4,108,345			2,337,843			(6,395,422	)		2,347,118
	$	6,106,488	$	6,930,589		$	2,916,638		$	(8,288,470	)	$	7,665,245

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by operating activities	$	(7,607	)	$	379,574		$	163,039		$	0	$	535,006
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(236,978	)		(45,213	)		0		(282,191	)
Proceeds received from sale of assets and businesses		0			49,984			6,210			0		56,194
Acquisition of property and businesses		0			(11,476	)		(13,616	)				(25,092	)
Costs incurred for purchase and development of electronic health records application		0			(41,854	)		0			0		(41,854	)
Return of deposit on terminated purchase agreement		6,500			0			0			0		6,500
Net cash used in investing activities		6,500			(240,324	)		(52,619	)		0		(286,443	)
Cash Flows from Financing Activities:
Reduction of long-term debt		(1,123,140	)		(2,567	)		(2,122	)		0		(1,127,829	)
Additional borrowings		906,000			0			0			0		906,000
Financing costs		(8,257	)		0			0			0		(8,257	)
Repurchase of common shares		(9,676	)		0			0			0		(9,676	)
Dividends paid		(14,519	)		0			0			0		(14,519	)
Issuance of common stock		3,828			0			0			0		3,828
Profit distributions to noncontrolling interests		0			0			(13,687	)		0		(13,687	)
Changes in intercompany balances with affiliates, net		246,871			(151,417	)		(95,454	)		0		0
Net cash (used in) provided by financing activities		1,107			(153,984	)		(111,263	)		0		(264,140	)
Increase (decrease) in cash and cash equivalents		0			(14,734	)		(843	)		0		(15,577	)
Cash and cash equivalents, beginning of period		0			33,221			8,008			0		41,229
Cash and cash equivalents, end of period	$	0		$	18,487		$	7,165		$	0	$	25,652

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by operating activities	$	60,800		$	388,838			112,864		$	0	$	562,502
Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(143,953	)		(51,451	)		0		(195,404	)
Proceeds received from sale of assets and businesses		0			0			23,682			0		23,682
Acquisition of property and businesses		0			0			(8,599	)		0		(8,599	)
Costs incurred for purchase and development of electronic health records application		0			(27,874	)		0			0		(27,874	)
Net cash used in investing activities		0			(171,827	)		(36,368	)		0		(208,195	)
Cash Flows from Financing Activities:
Reduction of long-term debt		(252,289	)		(1,156	)		(14,094	)		0		(267,539	)
Additional borrowings		36,000			0			0			0		36,000
Financing costs		(23,559	)		0			0			0		(23,559	)
Repurchase of common shares		(44,532	)		0			0			0		(44,532	)
Dividends paid		(14,638	)		0			0			0		(14,638	)
Issuance of common stock		3,596			0			0			0		3,596
Profit distributions to noncontrolling interests		0			0			(33,962	)		0		(33,962	)
Changes in intercompany balances with affiliates, net		234,622			(205,164	)		(29,458	)				0
Net cash (used in) provided by financing activities		(60,800	)		(206,320	)		(77,514	)		0		(344,634	)
Increase (decrease) in cash and cash equivalents		0			10,691			(1,018	)		0		9,673
Cash and cash equivalents, beginning of period		0			21,385			8,089			0		29,474
Cash and cash equivalents, end of period	$	0		$	32,076		$	7,071		$	0	$	39,147