13) 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 TWELVE MONTHS ENDED DECEMBER 31, 2015
(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	6,798,664		$	3,018,364		$	(32,304	)	$	9,784,724
Less: Provision for doubtful accounts		0			481,294			259,979			0			741,273
Net revenues		0			6,317,370			2,758,385			(32,304	)		9,043,451
Operating charges:
Salaries, wages and benefits		0			3,014,296			1,198,091			0			4,212,387
Other operating expenses		0			1,459,607			690,341			(30,143	)		2,119,805
Supplies expense		0			583,644			390,444			0			974,088
Depreciation and amortization		0			280,985			117,633			0			398,618
Lease and rental expense		0			58,394			38,740			(2,161	)		94,973
Electronic health records incentive income		0			(12,232	)		(3,583	)		0			(15,815	)
		0			5,384,694			2,431,666			(32,304	)		7,784,056
Income from operations		0			932,676			326,719			0			1,259,395

Interest expense		107,665			4,695			1,134			0			113,494
Interest (income) expense, affiliate		0			86,494			(86,494	)		0			0
Equity in net income of consolidated affiliates		(746,984	)		(215,119	)		0			962,103			0
Income before income taxes		639,319			1,056,606			412,079			(962,103	)		1,145,901

Provision for income taxes		(41,209	)		354,611			81,801			0			395,203
Net income		680,528			701,995			330,278			(962,103	)		750,698

Less: Income attributable to noncontrolling interests		0			0			70,170			0			70,170
Net income attributable to UHS	$	680,528		$	701,995		$	260,108		$	(962,103	)	$	680,528

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2014
(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	6,225,997		$	2,707,294		$	(29,220	)	$	8,904,071
Less: Provision for doubtful accounts		0			471,181			227,802			0			698,983
Net revenues		0			5,754,816			2,479,492			(29,220	)		8,205,088
Operating charges:
Salaries, wages and benefits		0			2,757,738			1,087,723			0			3,845,461
Other operating expenses		0			1,342,745			607,098			(27,100	)		1,922,743
Supplies expense		0			546,578			349,115			0			895,693
Depreciation and amortization		0			269,490			106,134			0			375,624
Lease and rental expense		0			58,619			37,494			(2,120	)		93,993
Electronic health records incentive income		0			(19,480	)		(8,422	)		0			(27,902	)
Costs related to extinguishment of debt		36,171			0			0			0			36,171
		36,171			4,955,690			2,179,142			(29,220	)		7,141,783
Income from operations		(36,171	)		799,126			300,350			0			1,063,305

Interest expense		127,528			4,516			1,594			0			133,638
Interest (income) expense, affiliate		0			88,246			(88,246	)		0			0
Equity in net income of consolidated affiliates		(646,386	)		(184,385	)		0			830,771			0
Income before income taxes		482,687			890,749			387,002			(830,771	)		929,667

Provision for income taxes		(62,656	)		305,320			82,007			0			324,671
Net income		545,343			585,429			304,995			(830,771	)		604,996

Less: Income attributable to noncontrolling interests		0			0			59,653			0			59,653
Net income attributable to UHS	$	545,343		$	585,429		$	245,342		$	(830,771	)	$	545,343

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013
(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Net revenues before provision for doubtful accounts	$	0		$	5,734,385		$	2,789,348		$	(28,644	)	$	8,495,089
Less: Provision for doubtful accounts		0			657,106			470,110			0			1,127,216
Net revenues		0			5,077,279			2,319,238			(28,644	)		7,367,873
Operating charges:
Salaries, wages and benefits		0			2,573,205			1,031,415			0			3,604,620
Other operating expenses		0			1,047,856			531,747			(26,808	)		1,552,795
Supplies expense		0			510,078			311,011			0			821,089
Depreciation and amortization		0			236,958			100,214			0			337,172
Lease and rental expense		0			62,518			37,076			(1,836	)		97,758
Electronic health records incentive income		0			(43,027	)		(17,997	)		0			(61,024	)
		0			4,387,588			1,993,466			(28,644	)		6,352,410
Income from operations		0			689,691			325,772			0			1,015,463

Interest expense		139,793			3,365			2,973			0			146,131
Interest (income) expense, affiliate		0			84,640			(84,640	)		0			0
Equity in net income of consolidated affiliates		(597,020	)		(141,004	)		0			738,024			0
Income before income taxes		457,227			742,690			407,439			(738,024	)		869,332

Provision for income taxes		(53,506	)		262,346			106,469			0			315,309
Net income		510,733			480,344			300,970			(738,024	)		554,023

Less: Income attributable to noncontrolling interests		0			0			43,290			0			43,290
Net income attributable to UHS	$	510,733		$	480,344		$	257,680		$	(738,024	)	$	510,733

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2015
(amounts in thousands)

	Parent			Guarantors			Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	680,528		$	701,995		$	330,278	$	(962,103	)	$	750,698
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		4,970			0			0		0			4,970
Amortization of terminated hedge		(336	)		0			0		0			(336	)
Minimum pension liability		2,177			2,177			0		(2,177	)		2,177
Foreign currency translation adjustment		(1,728	)		(1,728	)		0		1,728			(1,728	)
Other comprehensive income before tax		5,083			449			0		(449	)		5,083
Income tax expense related to items of other comprehensive income		2,980			817			0		(817	)		2,980
Total other comprehensive income, net of tax		2,103			(368	)		0		368			2,103
Comprehensive income		682,631			701,627			330,278		(961,735	)		752,801
Less: Comprehensive income attributable to noncontrolling interests		0			0			70,170		0			70,170
Comprehensive income attributable to UHS	$	682,631		$	701,627		$	260,108	$	(961,735	)	$	682,631

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2014
(amounts in thousands)

	Parent			Guarantors			Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	545,343		$	585,429		$	304,995	$	(830,771	)	$	604,996
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		17,668			0			0		0			17,668
Amortization of terminated hedge		(336	)		0			0		0			(336	)
Minimum pension liability		(14,270	)		(14,270	)		0		14,270			(14,270	)
Foreign currency translation adjustment		(2,431	)		(2,431	)		0		2,431			(2,431	)
Other comprehensive income before tax		631			(16,701	)		0		16,701			631
Income tax expense related to items of other comprehensive income		1,053			(5,356	)		0		5,356			1,053
Total other comprehensive income, net of tax		(422	)		(11,345	)		0		11,345			(422	)
Comprehensive income		544,921			574,084			304,995		(819,426	)		604,574
Less: Comprehensive income attributable to noncontrolling interests		0			0			59,653		0			59,653
Comprehensive income attributable to UHS	$	544,921		$	574,084		$	245,342	$	(819,426	)	$	544,921

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013
(amounts in thousands)

	Parent			Guarantors		Non Guarantors		Consolidating Adjustments			Total Consolidated Amounts
Net income	$	510,733		$	480,344	$	300,970	$	(738,024	)	$	554,023
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		16,963			0		0		0			16,963
Amortization of terminated hedge		(336	)		0		0		0			(336	)
Minimum pension liability		14,657			14,657		0		(14,657	)		14,657
Other comprehensive income before tax		31,284			14,657		0		(14,657	)		31,284
Income tax expense related to items of other comprehensive income		11,940			5,670		0		(5,670	)		11,940
Total other comprehensive income, net of tax		19,344			8,987		0		(8,987	)		19,344
Comprehensive income		530,077			489,331		300,970		(747,011	)		573,367
Less: Comprehensive income attributable to noncontrolling interests		0			0		43,290		0			43,290
Comprehensive income attributable to UHS	$	530,077		$	489,331	$	257,680	$	(747,011	)	$	530,077

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2015
(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	47,192		$	14,036		$	0		$	61,228
Accounts receivable, net		0		918,699			383,730			0			1,302,429
Supplies		0		72,499			43,538			0			116,037
Deferred income taxes		132,975		2,145			0			0			135,120
Other current assets		0		89,973			13,517			0			103,490
Total current assets		132,975		1,130,508			454,821			0			1,718,304

Investments in subsidiaries		7,760,156		1,876,415			0			(9,636,571	)		0

Intercompany receivable		80,764		0			747,709			(828,473	)		0
Intercompany note receivable		0		0			1,242,937			(1,242,937	)		0

Property and equipment		0		4,722,050			1,808,519			0			6,530,569
Less: accumulated depreciation		0		(1,845,746	)		(848,845	)		0			(2,694,591	)
		0		2,876,304			959,674			0			3,835,978
Other assets:
Goodwill		0		3,070,061			526,053			0			3,596,114
Deferred charges		25,877		5,530			3,950			0			35,357
Other		14,251		394,998			39,111			0			448,360
	$	8,014,023	$	9,353,816		$	3,974,255		$	(11,707,981	)	$	9,634,113
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	60,368	$	1,223		$	1,131		$	0		$	62,722
Accounts payable and accrued liabilities		19,996		744,137			269,564			0			1,033,697
Federal and state taxes		3,987		0			0			0			3,987
Total current liabilities		84,351		745,360			270,695			0			1,100,406

Intercompany payable		0		828,473			0			(828,473	)		0
Intercompany note payable		0		1,242,937			0			(1,242,937	)		0

Other noncurrent liabilities		1,982		206,287			70,565			0			278,834
Long-term debt		3,362,143		16,790			8,370			0			3,387,303
Deferred income taxes		315,900		0			0			0			315,900

Redeemable noncontrolling interests		0		0			242,509			0			242,509
Equity:
UHS common stockholders’ equity		4,249,647		6,313,969			3,322,602			(9,636,571	)		4,249,647
Noncontrolling interest		0		0			59,514			0			59,514
Total equity		4,249,647		6,313,969			3,382,116			(9,636,571	)		4,309,161
	$	8,014,023	$	9,353,816		$	3,974,255		$	(11,707,981	)	$	9,634,113

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2014
(amounts in thousands)

	Parent		Guarantors			Non Guarantors			Consolidating Adjustments			Total Consolidated Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	21,784		$	10,285		$	0		$	32,069
Accounts receivable, net		0		933,971			348,764			0			1,282,735
Supplies		0		67,847			40,268			0			108,115
Deferred income taxes		113,822		743			0			0			114,565
Other current assets		0		62,431			15,223			0			77,654
Total current assets		113,822		1,086,776			414,540			0			1,615,138

Investments in subsidiaries		7,013,540		1,661,296			0			(8,674,836	)		0

Intercompany receivable		103,808		0			408,682			(512,490	)		0
Intercompany note receivable		0		0			1,222,637			(1,222,637	)		0

Property and equipment		0		4,494,567			1,717,463			0			6,212,030
Less: accumulated depreciation		0		(1,686,192	)		(846,149	)		0			(2,532,341	)
		0		2,808,375			871,314			0			3,679,689
Other assets:
Goodwill		0		2,764,555			526,658			0			3,291,213
Deferred charges		32,379		5,402			2,538			0			40,319
Other		9,601		283,302			55,181			0			348,084
	$	7,273,150	$	8,609,706		$	3,501,550		$	(10,409,963	)	$	8,974,443
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	44,874	$	1,260		$	22,185		$	0		$	68,319
Accounts payable and accrued liabilities		20,245		1,051,309			41,508			0			1,113,062
Federal and state taxes		1,446		0			0			0			1,446
Total current liabilities		66,565		1,052,569			63,693			0			1,182,827

Intercompany payable		0		512,490			0			(512,490	)		0
Intercompany note payable		0		1,222,637			0			(1,222,637	)		0

Other noncurrent liabilities		1,322		189,456			77,777			0			268,555
Long-term debt		3,187,103		20,212			2,900			0			3,210,215
Deferred income taxes		282,214		0			0			0			282,214

Redeemable noncontrolling interests		0		0			239,552			0			239,552
Equity:
UHS common stockholders’ equity		3,735,946		5,612,342			3,062,494			(8,674,836	)		3,735,946
Noncontrolling interest		0		0			55,134			0			55,134
Total equity		3,735,946		5,612,342			3,117,628			(8,674,836	)		3,791,080
	$	7,273,150	$	8,609,706		$	3,501,550		$	(10,409,963	)	$	8,974,443

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2015
(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash (used in) provided by operating activities	$	(21,287	)	$	655,439		$	386,746		$	0	$	1,020,898

Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(209,355	)		(169,966	)		0		(379,321	)
Acquisition of property and businesses					(513,382	)		(20,273	)				(533,655	)
Proceeds received from sale of assets and businesses		0			647			2,744			0		3,391
Increase in insurance subsidiary investments		0			(3,300	)		0			0		(3,300	)
Net cash used in investing activities		0			(725,390	)		(187,495	)		0		(912,885	)

Cash Flows from Financing Activities:
Reduction of long-term debt		(42,133	)		(3,459	)		(22,574	)		0		(68,166	)
Additional borrowings		234,400			0			0			0		234,400
Financing costs		(515	)		0			0			0		(515	)
Repurchase of common shares		(209,782	)		0			0			0		(209,782	)
Dividends paid		(39,532	)		0			0			0		(39,532	)
Issuance of common stock		8,441			0			0			0		8,441
Excess income tax benefits related to stock-based compensation		47,364			0			0			0		47,364
Profit distributions to noncontrolling interests		0			0			(62,220	)		0		(62,220	)
Proceeds received from sale/leaseback of real property		0			0			12,765			0		12,765
Changes in intercompany balances with affiliates, net		23,044			100,427			(123,471	)		0		0
Net cash provided by (used in) financing activities		21,287			96,968			(195,500	)		0		(77,245	)

Effect of exchange rate changes on cash and cash equivalents		0			(1,609	)		0			0		(1,609	)

Increase in cash and cash equivalents		0			25,408			3,751			0		29,159
Cash and cash equivalents, beginning of period		0			21,784			10,285			0		32,069
Cash and cash equivalents, end of period	$	0		$	47,192		$	14,036		$	0	$	61,228

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2014
(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by operating activities	$	18,579		$	687,101		$	330,196		$	0	$	1,035,876

Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(230,102	)		(161,048	)		0		(391,150	)
Acquisition of property and businesses		0			(422,081	)		(9,305	)		0		(431,386	)
Proceeds received from sale of assets and businesses		0			11,450			3,728			0		15,178
Costs incurred for purchase and implementation of electronic health records application		0			(13,488	)		0			0		(13,488	)
Increase in insurance subsidiary investments		0			(12,000	)		0			0		(12,000	)
Net cash used in investing activities		0			(666,221	)		(166,625	)		0		(832,846	)

Cash Flows from Financing Activities:
Reduction of long-term debt		(866,748	)		(867	)		(11,514	)		0		(879,129	)
Additional borrowings		830,000			0			0			0		830,000
Financing costs		(14,976	)		0			0			0		(14,976	)
Repurchase of common shares		(100,749	)		0			0			0		(100,749	)
Dividends paid		(29,665	)		0			0			0		(29,665	)
Issuance of common stock		6,863			0			0			0		6,863
Excess income tax benefits related to stock-based compensation		33,912			0			0			0		33,912
Profit distributions to noncontrolling interests		0			0			(33,680	)		0		(33,680	)
Changes in intercompany balances with affiliates, net		122,784			(5,444	)		(117,340	)		0		0
Net cash used in financing activities		(18,579	)		(6,311	)		(162,534	)		0		(187,424	)

Effect of exchange rate changes on cash and cash equivalents		0			(775	)		0			0		(775	)

Increase in cash and cash equivalents		0			13,794			1,037			0		14,831
Cash and cash equivalents, beginning of period		0			7,990			9,248			0		17,238
Cash and cash equivalents, end of period	$	0		$	21,784		$	10,285		$	0	$	32,069

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013
(amounts in thousands)

	Parent			Guarantors			Non Guarantors			Consolidating Adjustments		Total Consolidated Amounts
Net cash provided by operating activities	$	17,946		$	587,083		$	279,212		$	0	$	884,241

Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(269,419	)		(89,074	)		0		(358,493	)
Acquisition of property and businesses		0			(8,094	)		(4,542	)		0		(12,636	)
Proceeds received from sale of assets and businesses		0			7,916			29,566			0		37,482
Costs incurred for purchase and implementation of electronic health records application		0			(49,811	)		0			0		(49,811	)
Net cash used in investing activities		0			(319,408	)		(64,050	)		0		(383,458	)

Cash Flows from Financing Activities:
Reduction of long-term debt		(429,996	)		(109	)		(10,119	)		0		(440,224	)
Additional borrowings		15,761			0			0			0		15,761
Financing costs		(231	)		0			0			0		(231	)
Repurchase of common shares		(27,201	)		0			0			0		(27,201	)
Dividends paid		(19,621	)		0			0			0		(19,621	)
Issuance of common stock		5,708			0			0			0		5,708
Excess income tax benefits related to stock-based compensation		20,121			0			0			0		20,121
Profit distributions to noncontrolling interests		0			0			(61,329	)		0		(61,329	)
Changes in intercompany balances with affiliates, net		417,513			(271,525	)		(145,988	)		0		0
Net cash used in financing activities		(17,946	)		(271,634	)		(217,436	)		0		(507,016	)

Decrease in cash and cash equivalents		0			(3,959	)		(2,274	)		0		(6,233	)
Cash and cash equivalents, beginning of period		0			11,949			11,522			0		23,471
Cash and cash equivalents, end of period	$	0		$	7,990		$	9,248		$	0	$	17,238