(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 MARCH 31, 2013

(amounts in thousands)


													Total
							Non			Consolidating			Consolidated
	Parent			Guarantors			Guarantors			Adjustments			Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,421,852		$	663,206		$	(6,710	)	$	2,078,348
Less: Provision for doubtful accounts		0			149,768			96,948			0			246,716

Net revenues		0			1,272,084			566,258			(6,710	)		1,831,632

Operating charges:
Salaries, wages and benefits		0			645,594			256,702			0			902,296
Other operating expenses		0			244,419			143,203			(6,615	)		381,007
Supplies expense		0			128,710			75,932			0			204,642
Depreciation and amortization		0			55,779			24,033			0			79,812
Lease and rental expense		0			15,675			9,085			(95	)		24,665
EHR incentive income		0			(3,116	)		(1,596	)		0			(4,712	)

		0			1,087,061			507,359			(6,710	)		1,587,710

Income from operations		0			185,023			58,899			0			243,922
Interest expense		37,946			854			1,138			0			39,938
Interest (income) expense, affiliate		0			24,391			(24,391	)		0			0
Equity in net income of consolidated affiliates		(143,206	)		(31,781	)		0			174,987			0

Income before income taxes		105,260			191,559			82,152			(174,987	)		203,984
Provision for income taxes		(14,524	)		65,323			23,250			0			74,049

Net income		119,784			126,236			58,902			(174,987	)		129,935
Less: Income attributable to noncontrolling interests		0			0			10,151			0			10,151

Net income attributable to UHS	$	119,784		$	126,236		$	48,751		$	(174,987	)	$	119,784

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(amounts in thousands)


													Total
							Non			Consolidating			Consolidated
	Parent			Guarantors			Guarantors			Adjustments			Amounts
Net revenues before provision for doubtful accounts	$	0		$	1,333,465		$	614,484		$	(6,326	)	$	1,941,623
Less: Provision for doubtful accounts		0			89,378			59,209			0			148,587

Net revenues		0			1,244,087			555,275			(6,326	)		1,793,036

Operating charges:
Salaries, wages and benefits		0			621,064			251,050			0			872,114
Other operating expenses		0			235,828			121,703			(6,231	)		351,300
Supplies expense		0			128,309			77,051			0			205,360
Depreciation and amortization		0			51,260			20,532			0			71,792
Lease and rental expense		0			14,844			8,693			(95	)		23,442

		0			1,051,305			479,029			(6,326	)		1,524,008

Income from operations		0			192,782			76,246			0			269,028
Interest expense, net		45,154			787			769			0			46,710
Interest (income) expense, affiliate		0			22,782			(22,782	)		0			0
Equity in net income of consolidated affiliates		(156,478	)		(41,077	)		0			197,555			0

Income before income taxes		111,324			210,290			98,259			(197,555	)		222,318
Provision for income taxes		(17,283	)		74,108			22,923			0			79,748

Net income		128,607			136,182			75,336			(197,555	)		142,570
Less: Income attributable to noncontrolling interests		0			0			13,963			0			13,963

Net income attributable to UHS	$	128,607		$	136,182		$	61,373		$	(197,555	)	$	128,607

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2013

(amounts in thousands)


											Total
						Non		Consolidating			Consolidated
	Parent			Guarantors		Guarantors		Adjustments			Amounts
Net income	$	119,784		$	126,236	$	58,902	$	(174,987	)	$	129,935
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		4,535			0		0		0			4,535
Amortization of terminated hedge		(84	)		0		0		0			(84	)

Other comprehensive income before tax		4,451			0		0		0			4,451
Income tax expense related to items of other comprehensive income		1,678			0		0		0			1,678

Total other comprehensive income, net of tax		2,773			0		0		0			2,773

Comprehensive income		122,557			126,236		58,902		(174,987	)		132,708
Less: Comprehensive income attributable to noncontrolling interests		0			0		10,151		0			10,151

Comprehensive income attributable to UHS	$	122,557		$	126,236	$	48,751	$	(174,987	)	$	122,557

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(amounts in thousands)


											Total
						Non		Consolidating			Consolidated
	Parent			Guarantors		Guarantors		Adjustments			Amounts
Net income	$	128,607		$	136,182	$	75,336	$	(197,555	)	$	142,570
Other comprehensive income (loss):
Unrealized derivative gains on cash flow hedges		1,615			0		0		0			1,615
Amortization of terminated hedge		(84	)		0		0		0			(84	)

Other comprehensive income before tax		1,531			0		0		0			1,531
Income tax expense related to items of other comprehensive income		582			0		0		0			582

Total other comprehensive income, net of tax		949			0		0		0			949

Comprehensive income		129,556			136,182		75,336		(197,555	)		143,519
Less: Comprehensive income attributable to noncontrolling interests		0			0		13,963		0			13,963

Comprehensive income attributable to UHS	$	129,556		$	136,182	$	61,373	$	(197,555	)	$	129,556

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MARCH 31, 2013

(amounts in thousands)


												Total
						Non			Consolidating			Consolidated
	Parent		Guarantors			Guarantors			Adjustments			Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	8,317		$	9,078		$	0		$	17,395
Accounts receivable, net		6,797		796,571			346,034			0			1,149,402
Supplies		0		60,735			38,239			0			98,974
Other current assets		0		84,202			12,511			(2,566	)		94,147
Deferred income taxes		77,130		43,561			322			(322	)		120,691
Assets of facilities held for sale		0		0			20,742			0			20,742

Total current assets		83,927		993,386			426,926			(2,888	)		1,501,351

Investments in subsidiaries		5,924,685		1,355,613			0			(7,280,298	)		0
Intercompany receivable		643,775		0			386,624			(1,030,399	)		0
Intercompany note receivable		0		0			1,007,453			(1,007,453	)		0
Property and equipment		0		3,923,685			1,523,542			0			5,447,227
Less: accumulated depreciation		0		(1,337,761	)		(713,680	)		0			(2,051,441	)

		0		2,585,924			809,862			0			3,395,786

Other assets:
Goodwill		820		2,554,835			485,671			0			3,041,326
Deferred charges		63,493		5,547			2,178			0			71,218
Other		8,451		223,952			74,424			0			306,827

	$	6,725,151	$	7,719,257		$	3,193,138		$	(9,321,038	)	$	8,316,508

Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	0	$	803		$	909		$	0		$	1,712
Accounts payable and accrued liabilities		43,325		692,530			150,579			0			886,434
Liabilities of facilities held for sale		0		0			836			0			836
Federal and state taxes		73,779		813			495			0			75,087

Total current liabilities		117,104		694,146			152,819			0			964,069

Intercompany payable		0		1,032,965			0			(1,032,965	)		0
Other noncurrent liabilities		23,336		250,523			105,864			0			379,723
Long-term debt		3,623,708		5,294			39,760			0			3,668,762
Intercompany note payable		0		1,007,453			0			(1,007,453	)		0
Deferred income taxes		126,096		56,801			0			(322	)		182,575
Redeemable noncontrolling interests		0		0			234,724			0			234,724
UHS common stockholders’ equity		2,834,907		4,672,075			2,608,223			(7,280,298	)		2,834,907
Noncontrolling interest		0		0			51,748			0			51,748

Total equity		2,834,907		4,672,075			2,659,971			(7,280,298	)		2,886,655

	$	6,725,151	$	7,719,257		$	3,193,138		$	(9,321,038	)	$	8,316,508

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2012

(amounts in thousands)


												Total
						Non			Consolidating			Consolidated
	Parent		Guarantors			Guarantors			Adjustments			Amounts
Assets
Current assets:
Cash and cash equivalents	$	0	$	11,949		$	11,522		$	0		$	23,471
Accounts receivable, net		7,154		741,983			318,060			0			1,067,197
Supplies		0		61,100			37,900			0			99,000
Other current assets		2,188		75,117			10,631			0			87,936
Deferred income taxes		61,364		43,555			322			(780	)		104,461
Assets of facilities held for sale		0		0			25,431			0			25,431

Total current assets		70,706		933,704			403,866			(780	)		1,407,496

Investments in subsidiaries		5,781,479		1,323,832			0			(7,105,311	)		0
Intercompany receivable		644,105		0			360,538			(1,004,643	)		0
Intercompany note receivable		0		0			1,007,453			(1,007,453	)		0
Property and equipment		0		3,867,471			1,500,874			0			5,368,345
Less: accumulated depreciation		0		(1,288,975	)		(697,135	)		0			(1,986,110	)

		0		2,578,496			803,739			0			3,382,235

Other assets:
Goodwill		820		2,554,531			481,414			0			3,036,765
Deferred charges		67,831		5,839			2,218			0			75,888
Other		9,645		209,558			79,256			0			298,459

	$	6,574,586	$	7,605,960		$	3,138,484		$	(9,118,187	)	$	8,200,843

Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	0	$	990		$	1,599		$	0		$	2,589
Accounts payable and accrued liabilities		10,985		740,484			138,088			0			889,557
Liabilities of facilities held for sale		0		0			850			0			850
Federal and state taxes		0		900			620			(458	)		1,062

Total current liabilities		10,985		742,374			141,157			(458	)		894,058

Intercompany payable		0		1,004,643			0			(1,004,643	)		0
Other noncurrent liabilities		46,048		243,478			105,829			0			395,355
Long-term debt		3,676,940		5,372			45,119			0			3,727,431
Intercompany note payable		0		1,007,453			0			(1,007,453	)		0
Deferred income taxes		127,268		56,801			0			(322	)		183,747
Redeemable noncontrolling interests		0		0			234,303			0			234,303
UHS common stockholders’ equity		2,713,345		4,545,839			2,559,472			(7,105,311	)		2,713,345
Noncontrolling interest		0		0			52,604			0			52,604

Total equity		2,713,345		4,545,839			2,612,076			(7,105,311	)		2,765,949

	$	6,574,586	$	7,605,960		$	3,138,484		$	(9,118,187	)	$	8,200,843

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2013

(amounts in thousands)


												Total
							Non			Consolidating		Consolidated
	Parent			Guarantors			Guarantors			Adjustments		Amounts
Net cash provided by operating activities	$	74,013			35,367			78,383		$	0	$	187,763

Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(54,822	)		(41,097	)		0		(95,919	)
Proceeds received from sale of assets and businesses		0			4,178			2,479			0		6,657
Acquisition of property and businesses		0			0			0					0
Costs incurred for purchase and implementation of electronic health records application		0			(16,412	)		0			0		(16,412	)
Return of deposit on terminated purchase agreement		0			0			0			0		0

Net cash used in investing activities		0			(67,056	)		(38,618	)		0		(105,674	)

Cash Flows from Financing Activities:
Reduction of long-term debt		(63,612	)		(265	)		(6,049	)		0		(69,926	)
Additional borrowings		9,500			0			0			0		9,500
Repurchase of common shares		(14,027	)		0			0			0		(14,027	)
Dividends paid		(4,870	)		0			0			0		(4,870	)
Issuance of common stock		1,232			0			0			0		1,232
Profit distributions to noncontrolling interests		0			0			(10,074	)		0		(10,074	)
Changes in intercompany balances with affiliates, net		(2,236	)		28,322			(26,086	)		0		0

Net cash (used in) provided by financing activities		(74,013	)		28,057			(42,209	)		0		(88,165	)

Decrease in cash and cash equivalents		0			(3,632	)		(2,444	)		0		(6,076	)
Cash and cash equivalents, beginning of period		0			11,949			11,522			0		23,471

Cash and cash equivalents, end of period	$	0		$	8,317		$	9,078		$	0	$	17,395

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(amounts in thousands)


												Total
							Non			Consolidating		Consolidated
	Parent			Guarantors			Guarantors			Adjustments		Amounts
Net cash provided by operating activities	$	93,390		$	10,893			22,940		$	0	$	127,223

Cash Flows from Investing Activities:
Property and equipment additions, net of disposals		0			(79,339	)		(13,224	)		0		(92,563	)
Proceeds received from sale of assets and businesses		0			49,984			3,477			0		53,461
Costs incurred for purchase and implementation of electronic health records application		0			(14,501	)		0			0		(14,501	)
Return of deposit on terminated purchase agreement		0			6,500			0			0		6,500

Net cash used in investing activities		0			(37,356	)		(9,747	)		0		(47,103	)

Cash Flows from Financing Activities:
Reduction of long-term debt		(69,052	)		(305	)		(1,585	)		0		(70,942	)
Repurchase of common shares		(2,017	)		0			0			0		(2,017	)
Dividends paid		(4,832	)		0			0			0		(4,832	)
Issuance of common stock		1,016			0			0			0		1,016
Profit distributions to noncontrolling interests		0			0			(2,575	)		0		(2,575	)
Changes in intercompany balances with affiliates, net		(18,505	)		26,964			(8,459	)		0		0

Net cash (used in) provided by financing activities		(93,390	)		26,659			(12,619	)		0		(79,350	)

Increase in cash and cash equivalents		0			196			574			0		770
Cash and cash equivalents, beginning of period		0			33,221			8,008			0		41,229

Cash and cash equivalents, end of period	$	0		$	33,417		$	8,582		$	0	$	41,999