Universal Health Services, Inc.

And thank you for standing by. Welcome to the second quarter 2023 Universal Health Services Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Steve Filton, CFO. Please go ahead.

Thank you, and good morning.

Mark Miller is also joining us this morning. We welcome you to this review of Universal Health Services results for the second quarter ended June 30, 2023. During the conference call, we'll be using words such as believes, expects, anticipates, estimates, and similar words that represent forecasts, projections, and 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, 2022, and our Form 10-Q for the quarter ended March 31, 2023. 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 $2.42 for the second quarter of 2023. After adjusting for the impact of the item reflected on the supplemental schedule as included with the press release, our adjusted net income attributable to UHS per diluted share was $2.53 for the quarter ended June 30, 2023. Our acute hospitals experienced strong demand for their services in the second quarter with adjusted admissions increasing 7.7% over the prior year. Even though the volume growth was skewed somewhat to lower acuity procedures, overall revenue growth was still a very robust 9.7%. While overall surgical volumes were solid, increasing about 5% from the prior year quarter, there was a continuing shift from inpatient to outpatient. Meanwhile, the amount of premium pay in the second quarter was $75 million, reflecting approximately 10 to 12% decline from the amount in the previous several quarters. The continued robust increase in acute volumes is the major reason that premium pay has not declined further. It's worth noting that our average hourly rate, which includes premium pay, was 4% lower than the second quarter of 2022. On a same facility basis, EBITDA at our acute care hospitals increased 16% during the second quarter of 2023 as compared to the comparable prior year quarter. During the second quarter, same facility revenues at our behavioral health hospitals increased by 7.8%, primarily driven by a 6.2% increase in revenue per adjusted patient day. The patient day growth in the quarter was greater at our acute care our acute behavioral hospitals versus our lower acuity residential treatment centers, which tended to drive up the revenue per day beyond the already relatively robust levels we've been posting for several periods. With a similar level of revenue growth in the first quarter, same facility EBITDA for our behavioral hospitals has increased 12% in the first half of the year compared to the comparable prior year period. Our cash generated from operating activities was $654 million during the first six months of 2023 as compared to $478 million during the same period in 2022. In the first half of 2023, we spent $337 million on capital expenditures and acquired 1.4 million of our own shares at a total cost of approximately $192 million. Since 2019, we have repurchased approximately 20% of the company's outstanding shares. As of June 30, 2023, we had $946 million of aggregate available borrowing capacity pursuant to our $1.2 billion revolving credit facility. In our acute care segment, we continue to develop additional inpatient and ambulatory care capacity. We currently have 24 operational freestanding emergency departments, as well as three additional which are expected to be completed and opened over the next six months, and nine more which have been approved and are in various stages of development. Also, construction continues on our de novo acute care hospitals consisting of the 150-bed West Henderson Hospital in Las Vegas, Nevada, which is expected to open next fall, the 150-bed Allen B. Miller Medical Center in Palm Beach Gardens, Florida, and the 136-bed Cedar Hill Regional Medical Center in Washington, D.C., both of which are expected to open in 2025. In our behavioral health segment, we recently completed and opened the 120-bed River Vista Behavioral Health Hospital in Madera, California, and we broke ground on the 96-bed Southridge Behavioral Hospital in West Michigan a joint venture with Trinity Health Michigan, which is expected to open later next year. I will now turn the call over to Mark Miller, President and CEO, for some closing comments.