Universal Health Services Inc (UHS) Q4 2020 Earnings Call Transcript

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Universal Health Services Inc (NYSE:UHS)
Q4 2020 Earnings Call
Feb 26, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Fourth Quarter and Full Year 2020 UHS Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]

I’d now like to turn the call over to your speaker today, CFO Steve Filton. Thank you. Please go ahead, sir.

Steve Filton — Executive Vice President & Chief Financial Officer

Good morning. Thank you, James. Marc Miller is also joining us this morning and we welcome you to this review of Universal Health Services’ Results for the Fourth Quarter ended December 31, 2020. During the conference call, we will be using words such as believes, expects, anticipates, estimates, and similar words that represent forecast, 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, 2020. 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 per diluted share of $3.60 for the fourth quarter of 2020. After adjusting for the impact of the items reflected in the supplemental schedule as included with the press release, our adjusted net income attributable to UHS per diluted share was $3.59 for the quarter ended December 31, 2020.

As of December 31, 2020, we had received approximately $417 million of funds from various governmental stimulus programs, most notably the CARES Act. Included in our reported and adjusted income for the 3 and 12 months ended December 31, 2020, is approximately $200 million and $413 million respectively of net revenues recorded in connection with these stimulus programs.

For the full year of 2020, approximately $316 million of those revenues were attributable to our acute facilities and $97 million were attributable to our behavioral health facilities. In addition, during 2020, we received approximately $695 million of Medicare’s accelerated payments, which had no impact on our earnings during the year. We have commenced the repayment process and anticipate the $695 million of funds will be repaid to the government in March or April of 2021.

As previously disclosed on September 27, 2020, we experienced an information technology into that, which resulted in the suspension of user access to our information technology applications in the United States. Our information technology applications were substantially restored at our acute and behavioral hospitals at various times in October 2020 on a rolling and/or staggered basis in our facilities generally resumed standard operating procedures at that time.

We estimate that this incident had an unfavorable pre-tax impact of approximately $67 million during the year ended December 31, 2020 as a result of lost revenues, incremental recovery expenses and delayed coding and billing. We estimate that approximately $12 million of the unfavorable pre-tax income impact was experienced during the third quarter of 2020, at approximately $55 million was experienced during the fourth quarter of 2020.

During the fourth quarter of 2020, we also continue to experience a material unfavorable impact on our operations and financial results from the COVID-19 pandemic before giving effect to the revenues recorded in connection with the CARES Act and other governmental grants. Specifically, we experienced an increased wave of COVID patients in December 2020,…