Universal Health Services Annual Report 2021

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FY2021 Annual Report · Universal Health Services

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in a CHANGING
LEADING in a CHANGING WORLD
in a CHANGING

A N N U A L R E P O R T E S G P R O F I L E

U N I V E R S A L H E A LT H S E R V I C E S , I N C .

OUR MISSION

Established in 1979 by Alan B. Miller,
Founder and Executive Chairman

To provide superior quality

healthcare services that:

Patients recommend to family & friends,

Physicians prefer for their patients,

Purchasers select for their clients,

Employees are proud of, and

Investors seek for long-term returns.

Our Mission statement has been

repeatedly praised by industry experts

for being honest and authentic, and

for identifying value offered to all key

stakeholders from our patients and

employees to our investors.

2 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

Misty Campbell, RN

OUR
OUR IMPACT
2021 BY THE NUMBERS
21

3.2 MILLION
3.2 MILLION
3.2 MILLION

PATIENTS SERVED
PATIENTS SERVED

$12.6 BILLION

REVENUES

1,600+
1,600+

PROVIDERS
PROVIDERS
PROVIDERS
OF PHYSICIAN
OF PHYSICIAN
OF PHYSICIAN
SERVICES
SERVICES
SERVICES

$856
$856
$856
$856
$856
$856
$856
MILLION
MILLION
MILLION
MILLION
MILLION
MILLION
MILLION

INVESTMENT IN
INVESTMENT IN
INVESTMENT IN
INVESTMENT IN
INVESTMENT IN
INVESTMENT IN
EQUIPMENT, FACILITY
EQUIPMENT, FACILITY
EQUIPMENT, FACILITY
EQUIPMENT, FACILITY
EQUIPMENT, FACILITY
EQUIPMENT, FACILITY
EXPANSIONS AND
EXPANSIONS AND
EXPANSIONS AND
EXPANSIONS AND
EXPANSIONS AND
RENOVATIONS
RENOVATIONS
RENOVATIONS
RENOVATIONS
RENOVATIONS

27
27
27

JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
JOINT VENTURE
PARTNERSHIPS
PARTNERSHIPS
PARTNERSHIPS
PARTNERSHIPS

89,000

EMPLOYEES, GLOBALLY

20,100

NURSES

ACUTE CARE

BEHAVIORAL
HEALTH

305,000 inpatient
305,000 inpatient
admissions
admissions

Over 700,000 total
patients served

1.6 million
1.6 million
patient days
patient days
patient days
patient days

6.2 million
patient days

1.1 million
1.1 million
1.1 million
1.1 million
outpatient visits
outpatient visits
outpatient visits
outpatient visits
(excluding ER)
(excluding ER)

25 facilities
offering Patriot
Support Programs

283 inpatient beds
added in new and
existing facilities
in the U.S.

31,800 births
31,800 births

7 Accountable
Care Organizations
(ACOs)

$85 million in
Medicare savings

2 0 2 1 A N N U A L R E P O R T 3

LETTER TO OUR SHAREHOLDERS

Dear Shareholders,

While the pandemic continues to challenge the nation and the world, we are reminded

daily of the very special role that the healthcare industry plays and that our frontline

providers fulfill. They do so with honor, respect and compassion – delivering high quality

care to individuals in our served communities, improving and saving lives. They are true

Healthcare Heroes and we salute them.

Challenges make us stronger – and through a uniﬁed
approach, our teams are continuing to deliver on our
mission, demonstrating agility, supporting each other
and focusing on key priorities.

We welcomed the broad availability of vaccines in early
2021, as well as the booster later in the year. Many of
our hospitals and clinics served as local access points
and we are heartened that the vaccine has appreciably
lessened personal impact of the perhaps inevitable
exposure to COVID-19, as seen from both a staff and
patient standpoint.

In 2021, UHS cared for over three million patients; and
generated net revenues of $12.6 billion, an increase
of 9.4% over the prior year. On a same facility basis
during 2021, as compared to 2020, revenue growth was
experienced within both of our operating segments and
was particularly robust at our Acute Care hospitals where
net revenues increased by 11.6% as adjusted admissions
grew by 7.7%. Across our Behavioral Health facilities, on
a same facility basis, net revenues grew by 5.4% during
2021, as compared to 2020, as adjusted admissions
increased by 1.6%.

Capital growth and development is robust. Our strategic
partnerships, new facility construction, renovations and
expansions, and integration of additional care access
points along the care continuum in served markets
are all proceeding with urgency. In 2021, we acquired
two facilities into our Acute Care Division and opened
three new Behavioral Health facilities. Our Corporate
Development efforts are strong, with more projects
currently in our pipeline than ever. Additionally, telehealth
visits have grown exponentially, both in Acute Care
and Behavioral Health – and we believe the increase
will continue. Particularly invigorating to our team is the
prospect of continuing to meet the growing need for
delivery of more care for more patients.

We are proud of the reputation we have earned over the
past 43 years as a leader in the healthcare industry.

Alan B. Miller, Executive Chairman
of the Board and Marc D. Miller,
President and Chief Executive Officer

For the 12th consecutive
year, UHS was recognized
among ‘World’s Most
Admired Companies’ by Fortune magazine. We have
been ranked for the past 18 years on the Fortune 500 list,
currently at #270; and UHS ranks #307 among American
companies on the Forbes Global 2000. Our executives,
employees and facilities continue to be honored by
national, state and local organizations for delivering high
quality care, for pioneering innovation, for their thought
leadership and for their commitment to serving their local
communities.

While UHS has always invested in environmentally
favorable practices, supported and celebrated
the richness of our communities and implemented
appropriate governance measures, we are hereby
launching a signiﬁcantly expanded Environmental,
Social and Governance (ESG) proﬁle. As a healthcare
company, social responsibilities are at the core of
what we do – each and every day. We appreciate the
opportunity to describe in greater detail our commitment
to excellence, both on an aggregate level as articulated
through metrics, but also at the anecdotal level through
interesting stories.

In summary, UHS is strong, growing and competitively
positioned. As we plan for the future, our most important
priorities continue to be delivery of high-quality patient
care; proﬁtable growth in attractive markets, business
segments and care delivery venues; and maintaining our
reputation as an industry leader and preferred provider,
employer and partner.

Thank you for your continuing interest and investment
in UHS.

Sincerely,

Marc D. Miller
President & Chief Executive Officer

4 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

ENVIRONMENTAL, SOCIAL
AND GOVERNANCE

In our expanded Environmental, Social and Governance

(ESG) profile, we describe the many impactful practices we

employ across the enterprise, providing a snapshot of the

sustainability efforts in place and achievements delivered.

We invite you to learn more about our ESG goals and

practices, the endeavors we use to protect and serve our

stakeholder groups, and how we are identifying and

mitigating challenges in the markets we serve.

INDEX

Acute Care Division
8-17

Behavioral Health Division
18-23

Environmental, Social
and Governance
24-52

Form 10K
10K: 1-128

Corporate Information
130

Board of Directors/
Corporate Officers
Inside Back Cover

2 0 2 1 A N N U A L R E P O R T 5

FINANCIAL HIGHLIGHTS

Year Ended December 31

2021

2020

Net revenues

$12,642,117,000

$11,558,897,000

Adjusted net income
attributable to UHS (1)

$991,677,000

$954,709,000

Adjusted diluted earnings per share

attributable to UHS (1)

$11.82

$11.12

Percentage
Increase

Year Ended December 31

Patient days

Admissions

Average number of licensed beds

2021

7,731,419

762,302

30,698

2020

7,601,144

735,405

30,118

Percentage
Increase

2019

$11,378,259,000

$891,820,000

$9.99

2019

7,939,554

806,350

30,191

(1) Calculation of Adjusted Net
Income Attributable to UHS
(in thousands except per share amounts)

2021

2020

2019

2018

Amount

Per
Diluted Share

Amount

Per
Diluted Share

Amount

Per
Diluted Share

Amount

Per
Diluted Share

Net income attributable to UHS

$991,590

$11.82

$943,953

$10.99

$814,854

Other combined adjustments

–

10,756

Adjusted net income attributable to UHS

$991,677

$11.82

$954,709

0.13

$11.12

76,966

$9.13

0.86

$779,705

114,645

$891,820

$9.99

$894,350

$8.31

1.22

$9.53

The “Other combined adjustments” neutralize the effect of items in each year that are nonrecurring or non-operational in nature including items such as: reserves for various matters, settlements, legal
judgments and lawsuits, our adoption of ASU 2016-09, gains/losses on sales of assets and businesses, impairments of long-lived and intangible assets and other amounts that may be reﬂected in a
given year that relate to prior periods. Since “adjusted net income attributable to UHS” is not computed in accordance with generally accepted accounting principles (“GAAP”), investors are encouraged
to use GAAP measures when evaluating our ﬁnancial performance. To obtain a complete understanding of our ﬁnancial performance the information provided above should be examined in connection
with our consolidated ﬁnancial statements and notes thereto, as contained in this report.

Net revenues
(in millions)

2
4
6
2
1
$

9
5
5
,
1
1
$

8
7
3
,
1
1
$

2
7
7
0
1
$

Adjusted net income per
diluted share attributable
to UHS (1)

Hospital patient days
(in thousands)

2
8
.
1
1
$

2
1
.
1
1
$

9
9
9
$

3
5
9
$

0
4
9
7

5
9
7
7

1
3
7
7

1
0
6
7

6 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

UNITED

KINGDOM

PUERTO RICO

400+ FACILITIES ACROSS
39 U.S. STATES, WASHINGTON, D.C.,
PUERTO RICO & UNITED KINGDOM

PUERTO RICO

Acute Care Hospitals

Ambulatory Centers

Behavioral Health Facilities

Freestanding Emergency Departments

Universal Health Services, Inc.
Corporate Headquarters

UNITED
KINGDOM

To explore our facilities using an interactive map, visit uhs.com/locations

UHS is a registered trademark of UHS of Delaware, Inc., the management company for Universal Health Services, Inc. and a wholly owned subsidiary of Universal Health Services.
Universal Health Services, Inc. is a holding company and operates through its subsidiaries including its management company, UHS of Delaware, Inc. All healthcare and management
operations are conducted by subsidiaries of Universal Health Services, Inc. Any reference to “UHS” or “UHS facilities” including any statements, articles or other publications contained
herein which relates to healthcare or management operations is referring to Universal Health Services’ subsidiaries including UHS of Delaware. Further, the terms “we,” “us,” “our” or “the
company” in such context similarly refer to the operations of Universal Health Services’ subsidiaries including UHS of Delaware. Any reference to employment at UHS or employees of
UHS refers to employment with one of the subsidiaries of Universal Health Services, Inc., including its management company, UHS of Delaware, Inc.

2 0 2 1 A N N U A L R E P O R T 7

8 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

UHS ACUTE CARE
UHS
DIVISION
DIVISION
DIVISION
DIVISION

We deliver superior quality care, serving as the preferred healthcare
We deliver superior quality care, serving as the preferred healthcare
We deliver superior quality care, serving as the preferred healthcare
We deliver superior quality care, serving as the preferred healthcare

provider in key markets.
provider in key markets.
provider in key markets.

The Acute Care Division operates 28 hospitals providing superior care to millions
annually. With continued expansions and partnerships, we are positioned as more
than a hospital provider. Our integrated delivery networks offer patients convenience,
consistency and a meaningful, personalized experience along an expanded continuum
of care.

While 2021 continued to bring COVID-19 pandemic-related challenges, our team exceeded
expectations and delivered solid performance across the U.S. We worked diligently in
the face of adversity and were privileged to care for more than two million patients.
Our efforts and dedication were recognized as we achieved Quality awards for excellence,
and distinctions from industry accrediting organizations for providing high-quality treatment,
care and services.

Delivering clinical excellence to our communities differentiates us in-market – it is what
drives us on a daily basis. We have a talented, dedicated team, true Healthcare Heroes.
Faced with uncertainties through the extended pandemic, our team continued to put
patients at the forefront of everything we do. With the availability of vaccines, we remain
hopeful that we will begin to turn the corner – in each region, nationally and globally.

Marty Wells, RN

2 0 2 1 A N N U A L R E P O R T 9

U H S A C U T E C A R E D I V I S I O N

EXEMPLARY
PATIENT SAFETY

Quality healthcare is our passion.
Improving lives is our reward.
Through our relentless focus
on quality, we are working to
change lives and transform the
delivery of healthcare. During
2021, 12 UHS Acute Care
hospitals earned an “A” safety
grade from The Leapfrog Group, recognizing our
efforts in protecting patients from harm and meeting
the highest safety standards. In fact, nearly 75% of
UHS hospitals received an “A” or “B” safety grade.

In addition, Henderson Hospital was named a Top
Teaching Hospital and Lakewood Ranch Medical
Center was named a Top General Hospital by The
Leapfrog Group, a national organization of employers
and other purchasers recognized as the standard-
setters for healthcare safety and quality. The Leapfrog
Top Hospital awards are widely acknowledged as
some of the most competitive awards American
hospitals can receive.

During the year, the Centers for Medicare and
Medicaid Services (CMS) announced Doctors
Hospital of Laredo, Lakewood Ranch Medical
Center and St. Mary’s Regional Medical Center
earned the Five-Star Overall Rating. The CMS
Five-Star designation is based on performance
across various measures of quality including safety
of care, readmission rate, mortality, timely and
effective care and patient experience.

The George Washington University Hospital was recognized by U.S. News & World Report
for achieving “high performing” status in ﬁve specialty care areas.

1 0 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

LEADERS IN SAFETY

UHS Hospitals Recognized
with an “A” Safety Grade
from The Leapfrog Group
during 2021

Aiken Regional
Medical Centers (SC)

Corona Regional
Medical Center (CA)

Doctors Hospital of
Laredo (TX)

Henderson Hospital
(NV)

Lakewood Ranch
Medical Center (FL)

Northern Nevada
Medical Center (NV)

South Texas Health
System Edinburg (TX)

South Texas Health
System McAllen (TX)

St. Mary’s Regional
Medical Center (OK)

Temecula Valley
Hospital (CA)

Texoma Medical
Center (TX)

Wellington Regional
Medical Center (FL)

2 0 2 1 A N N U A L R E P O R T 1 1

LEADERSHIP IN PERINATAL CARE: Gina Lowery,
Director of Women’s Services at Rancho Springs
Medical Center Campus in Murrieta, CA, was
awarded the March of Dimes Inaugural Excellence
in Perinatal Leadership Award.

Newsweek released its annual list of the best
maternity hospitals in the U.S. in February,
collaborating with The Leapfrog Group to determine
the facilities that meet Leapfrog’s high standards for
safety and quality for maternity care. Corona Regional
Medical Center, Lakewood Ranch Medical Center
and South Texas Health System Edinburg were
named to the Best Maternity Hospitals list.

U.S. News & World Report recognized The
George Washington University Hospital, located
in Washington, D.C., for having achieved “high
performing” status in the specialty care areas of
Heart Attack, Heart Failure, Kidney Failure,
Lung Cancer Surgery and Stroke.

And, UHS was named the #1 Healthcare System
in the U.S. for its Acute Care hospital overall online
reputation score by Reputation.com in its January
2021 report. UHS Acute Care hospitals rate on
average 4.2 out of 5 stars, accumulated collectively
over 11,000 individual reviews during the year.
Reviews are responded to promptly, which drives
differentiation among in-market competitors. Quick,
decisive service recovery occurs at the hospital level
due to collaboration among the teams for Quality,
Risk, Nursing, Performance Improvement and the
Online Reputation Management team.

U H S A C U T E C A R E D I V I S I O N

Conveniently
located on the Las
Vegas Strip, Elite
Medical Center is
an extension of
Valley Hospital.
Elite Medical Center
provides emergency
care 24 hours a day,
seven days a week.

PORTFOLIO GROWTH
AND EXPANSION

During the year, we delivered robust expansions
across the U.S. In the Las Vegas market, we acquired
a dedicated orthopedics hospital, now branded
Valley Health Specialty Hospital, an extension of
Spring Valley Hospital. The Valley Health Specialty
Hospital is the ﬁrst of its kind to offer both specialty
orthopedics and inpatient rehab in one location.

We also acquired Elite Medical Center Las Vegas, a
privately owned micro-hospital offering emergency
care in the heart of the Las Vegas Strip. Accessing
emergency medical care right on the Strip is
convenient, and our ability to quickly transport
patients requiring a higher level of care to one of
our affiliated tertiary care hospitals can be lifesaving.
The facility is branded Elite Medical Center, an
extension of Valley Hospital.

In Reno, Nevada, construction is on schedule for
Northern Nevada Sierra Medical Center to open
in late March 2022. This will be the ﬁrst new full-
service hospital built in Reno in nearly a century and
will provide us the opportunity to become a market
leader in this growing and thriving community.

In Southern California, at Southwest Healthcare
System, we broke ground on major renovation
projects. The facility master plan represents one
of UHS’ largest expansion investments to date.
At the Rancho Springs Medical Center Campus,
the expansion will focus on Women’s and Children’s
Services, the Emergency Department, and other
key clinical offerings such as the health system’s
Robotics program. At the Inland Valley Medical
Center Campus, the expansion will feature a
new seven-story tower with a continuation of
award-winning medical services. The projects are
anticipated to be completed in phases over the
course of the next two to ﬁve years, with particular
focus to ensure that the facilities remain open for
patient care with minimal disruption.

The new Northern Nevada
Sierra Medical Center will
provide residents of Reno,
NV, with convenient access to
quality healthcare. The new
hospital will house 170 private
patient rooms and offer a full
array of healthcare services.

1 2 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

ROBUST GROWTH PLANS
IN KEY MARKETS

In Washington, D.C., we recently broke ground on
Cedar Hill Regional Medical Center, a new 136-bed
hospital in the east end of D.C. This will be the ﬁrst
new hospital built in the region in nearly 20 years
and is scheduled to open in late 2024. An Urgent
Care Center and future ancillary access points will
further support the community.

In West Henderson, Nevada, we acquired land to
build a 150-bed, 500,000 square-foot hospital and a
250,000 square-foot medical office complex. We will
break ground in Spring 2022.

In Palm Beach Gardens, Florida, we are seeking City
approval to build a hospital in this new community,
which is located northeast of Wellington. To serve
the growing population of the greater Palm Beach
Gardens community, the proposed complex will
include a 150-bed hospital and a medical office
building with capacity to expand.

Where love is born.
Meet Aiyana, the
first baby born at
The Birth Place at
Palmdale Regional
Medical Center.
-Born August 23, 2021
6 lbs 7 ozs

We established a strategic alignment with Riverside
Medical Clinic (RMC), located in Riverside County,
California. This new alignment further expands our
care delivery network serving patients in Southern
California. RMC is a premier multi-specialty physician
practice that employs more than 180 physicians and
advanced practice providers in seven physician
offices. RMC has served the local community for
over 85 years.

Also in California, at Palmdale Regional Medical
Center, we opened The Birth Place, a new 33,000
square-foot maternity unit featuring 25 private
patient rooms, six labor and delivery suites managed
by highly skilled staff.

In Texas, construction progressed on the new ﬁve-
story $100 million patient tower at South Texas
Health System Edinburg, which will provide bed
capacity in a rapidly growing market. We held a
beam topping event and remain on schedule to
open in late 2022.

South Texas Health System
Edinburg marked the half-
way point on construction
of the new $100 million
ﬁve-story patient tower. The
tower will open in Fall 2022.

2 0 2 1 A N N U A L R E P O R T 1 3

U H S A C U T E C A R E D I V I S I O N

NETWORKS OF
ACCESSIBLE CARE

Our ambulatory care strategy includes acquiring and/
or building additional access points including new
outpatient rehabilitation centers; wound care centers;
imaging centers; and expansion of Primary Care
networks including our recent strategic alignment
with Riverside Medical Clinic, which has more
than 180 providers.

In Las Vegas, we launched Valley Health at Home
by BAYADA, a new joint venture partnership and our
ﬁrst in-market with BAYADA, a leading home health
agency. This partnership model, soon to be launched
in additional markets, will further expand our integrated
care delivery network capabilities into patient homes
and strengthen the post-acute continuum of care to
meet the increasing demand for in-home services,
particularly among the aging population.

UHS established a strategic alignment
with Riverside Medical Clinic, a premier
multi-specialty physician practice in
Southern California.

Freestanding
Emergency Departments
Provide Convenient Access
to Emergency Care

In 2021, we expanded our network of Freestanding
Emergency Departments (FEDs) with new locations opened
or under construction. During the year, we handled over
250,000 ER visits and 17,000 transfers to UHS hospitals.
Real estate has been acquired to construct a total of ﬁve new
FEDs in key markets in Florida, Nevada and D.C. By the end
of 2022, we expect to have 25 FEDs open and operating.

Now Open:
ER at Valley Vista,
an extension of
Centennial Hills Hospital

Coming Soon:
ER at Spanish Springs,
an extension of
Northern Nevada
Medical Center

Coming Soon:
ER at Sweetwater,
an extension of
Aiken Regional Medical Centers

1 4 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

In addition, our ambulatory surgery network has
expanded with new in-market acquisitions and
de novo facilities.

Independence Physician Management (IPM), a
subsidiary of UHS, was formed in 2012 as the physician
services unit of UHS and is marking its 10th anniversary.
IPM develops and manages multi-specialty physician
networks and urgent care clinics which align with our
acute care facilities.

Through continuing growth, IPM currently operates in 11
markets across six states and the District of Columbia.
With over 700 providers, IPM treated patients in over
1.1 million encounters during 2021. Our leadership team,
practitioners and teams of healthcare professionals
are collectively dedicated to improving the health and
wellness of people in the communities we serve.

Prominence Health Plan is driving physician
alignment through value-based care initiatives via
seven Accountable Care Organizations (ACOs) and
Health Plan products across the country. Prominence

Coming Soon:
ER at Sun City Center,
an extension of
Manatee Memorial Hospital

Coming Soon:
ER at South Summerlin,
an extension of
Summerlin Hospital

is currently serving 24,000 Medicare Advantage
members (adding 6,500 Medicare Advantage
members), 33,000 Commercial lives, and 135,000
MSSP ACO lives. The ACOs saved Medicare $84.7
million in 2020. Since the establishment of the ﬁrst
UHS ACO in 2014, the entities have saved nearly
$300 million and have achieved a 97% quality score.
Prominence Health Plan and the ACOs are key
strategic tools to partner with Primary Care around
population health initiatives.

97%

QUALITY
RATING

Since the establishment of the ﬁrst UHS ACO in
2014, the entities have generated nearly $300
million in Medicare savings and achieved a 97%
quality score.

OPERATIONAL EFFICIENCIES
TO ENHANCE PATIENT
EXPERIENCE

We are committed to continuous improvement and
innovation… constantly looking for ways to enhance
the patient experience while optimizing performance,
reducing costs, and improving patient care. Despite
the challenges of COVID-19, our team advanced new
workﬂows to optimize expense management and
redesign delivery systems.

Our process improvement efforts were aimed at
volume growth in the emergency departments
while systematically improving quality and patient
experience. Patient volume in the emergency
departments increased 16% compared to 2020,
while the time from arrival to ﬁrst provider encounter
dropped 44%. Overall length of stay for low acuity
patients was reduced by 16%. Speciﬁc safety projects
included care of pediatric patients and postpartum
patients in the emergency department setting. Capacity
Management software deployment continues along
with implementation of standard inpatient workﬂows
to streamline the inpatient discharge process, thus
improving overall capacity and hospital throughput.

2 0 2 1 A N N U A L R E P O R T 1 5

U H S A C U T E C A R E D I V I S I O N

Labor and staffing proved to be the biggest
challenge in 2021, with pressure from outside
employment agencies driving up contract labor
rates. We implemented a labor management system
with improved ﬂexible position control capability, as
well as redeﬁned core staffing in many areas. With
the challenge in nursing availability, our Process
Improvement team worked closely with nursing
leadership to identify innovative and alternate
staffing models to continue to deliver high-quality
patient care.

The Acute Inpatient Rehabilitation Units continued
their success in their Program Evaluation Model
(PEM) with 13 of 14 Rehab Units ranking above 90
on their scores for key quality metrics. In addition,

six of our facilities earned certiﬁcation from The
Joint Commission, and two earned certiﬁcation from
the Commission on Accreditation of Rehabilitation
Facilities (CARF).

Process improvement efforts in imaging also
advanced. Inﬁltration/Extravasation metric was
added to the Radiology Quality dashboard and
all hospitals were in the green with an average of
0.20, which is well below the American College
of Radiology (ACR) threshold of ≤ 1%. In our
operating rooms, we recaptured deferred volume
from COVID-19 cancellations as we optimized
our block scheduling, and opened up capacity to
accommodate the backlog in cases.

KEY PERFORMANCE METRICS ARE MONITORED AND CHAMPIONED
BY OUR PROCESS IMPROVEMENT TEAM

OVERALL LENGTH
OF STAY FOR LOW
ACUITY PATIENTS

16%

REDUCTION
FROM 2020

PATIENT VOLUME
IN EMERGENCY
DEPARTMENTS

16%

INCREASE
FROM 2020

TIME FROM ARRIVAL
TO FIRST PROVIDER
ENCOUNTER
DROPPED

44%

1 6 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

THE FACES
OF BRAVERY

Cory
St. Mary’s Regional Medical Center

Mom Amber describes her 9 year-old son
Cory as a sweet, happy kid who is full of
life and smiles. It was difficult for her to
watch her son struggle for months with
periods of fatigue and weakness. “He
was more sick than normal. Some days
he would just lay down on the ﬂoor and
want to sleep.” Cory was diagnosed
with Type 1 diabetes and was admitted
to St. Mary’s Regional Medical Center.
Type 1 diabetes is a condition in which
the body’s immune system attacks and
destroys the cells that produce insulin.
Cory describes it as, “My body doesn’t
produce insulin anymore. It is not fun and
it’s really a pain.”

Working with hospital staff, Mom and Cory
learned how to count carbs and calculate
insulin dosages. Today, Cory attends
school, is active in sports and uses a
continuous glucose monitor. A vital part
of managing diabetes is learning how to
manage the stress of it all. “If he sees me
fall apart, what will that teach him? He
never complains, so I won’t either. He has
taken his diagnosis, accepted it and lives
life to the fullest,” concludes Amber.

Learn more: stmarysregional.com/about/
blog/juvenile-diabetes-life-changing-
diagnosis

Mary
Aiken Regional Medical Centers

“At the age of 64, I was diagnosed with stage 2 invasive ductal
carcinoma. I discovered a lump during a self-breast exam and
notiﬁed my doctor. A mammogram conﬁrmed the lump was
cancer. I do have a family history of cancer – my sister had
metastatic breast cancer and my granddaughter was diagnosed
with breast cancer a few days after I was diagnosed. I was
relieved at how quickly everything moved once I was diagnosed.
I chose to be treated at Aiken Regional Medical Centers because
I worked there for 21 years in patient care, until I retired in 2018.
The staff members are like my second family, and I love them and

trust them completely.”

Learn more: aikenregional.com/about/blog/fighting-cancer-it-
takes-village

Arnold
The George Washington University Hospital

In 2021, Arnold Wynn suffered multiple serious injuries resulting
from a motorcycle accident. When paramedics ﬁrst found him, he
was not able to feel anything below his neck. “I remember seeing
my body, but I could not move my body,” said Arnold. At the 10th
Annual Trauma Survivors Day held at The George Washington
University Hospital in the Fall 2021, we saluted survivors including
Arnold. “The honesty and integrity of the GW Hospital staff helped
me get through. I want to thank the doctors and staff at GW. I stand
here today because of the work the GW team did for me. I get
stronger every day. ‘Thank you’ seems like such a small word, but it
comes from my soul.”

Learn more: facebook.com/gwuhospital/videos/1050864885759929

(l to r) Dr. Michael Rosner,
Arnold Wynn and Dr. Babak Sarani

2 0 2 1 A N N U A L R E P O R T 1 7
2 0 2 1 A N N U A L R E P O R T 1 7

Jiattashey Allen, Director of Care Coordination

1 8 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

UHS BEHAVIORAL
HEALTH DIVISION

Our skilled and dedicated team delivers compassionate care that transforms

lives, families and communities. Our facilities are highly regarded, trusted

providers of behavioral health services in the communities we serve.

The Behavioral Health Division delivered industry-leading patient outcomes and overall
good results for the year. We were privileged to care for over 700,000 individuals via
inpatient, outpatient and telehealth offerings.

Despite the signiﬁcant challenges brought by the pandemic, our team stood strong, and
together we delivered, demonstrating what it means to be resilient. Availability of, and access
to, behavioral health services has become increasingly important in our communities across
the nation. We are seeing individuals with new diagnoses, as well as those with preexisting
conditions requiring a higher level of support.

Seamless coordination across the full continuum of care has long been an aspiration across
the industry. Now, through implementation of digital platforms and strategic alignment across
providers, we can meet patients where they are, supporting them with appropriate care along
the continuum – from assessments and lower-acuity care performed via telehealth, to acute
inpatient hospitalization stepping down to outpatient, followed by at-home online resources to
maintain connection and document progress.

While the nation struggles with staffing shortages, we are investing in staffing excellence
initiatives to drive recruitment and retention. For example, we have augmented our career
development offerings and are collaborating with educational institutions on developing the
next generation of healthcare professionals.

Endurance, rejuvenation and a focus on meeting challenges will continue to be key.
We are determined to focus on progress despite setbacks, see light in darkness, leverage
opportunities and emerge stronger.

2 0 2 1 A N N U A L R E P O R T 1 9

WHAT IS A GOOD NPS SCORE?

-100

Needs Improvement

Good

Great

Excellent

100

-100 - 0

0 - 30

30 - 70

70 - 100

What is a good NPS score?

NEEDS IMPROVEMENT

GOOD

GREAT

EXCELLENT

-100

-100 - 0

0 - 30

30 - 70

70 - 100

100

WHAT IS A GOOD NPS SCORE?

NEEDS IMPROVEMENT

(-100 - 0)

GREAT

(30 - 70)

-100

100

Net Promoter
4
Score Index
100

EXCELLENT
(70 - 100)

GREAT
(30 - 70)

GOOD
(0 - 30)

EXCELLENT

(70 - 100)

100

GREAT

(30 - 70)

EXCELLENT

(70 - 100)

GOOD

(0 - 30)

NEEDS
IMPROVEMENT
(-100 - 0)

NEEDS

IMPROVEMENT

(-100 - 0)

-100

We measure loyalty using the
question, “How likely would you
be to recommend this facility to a
friend or family member?” In 2021,
the UHS Behavioral Health Division
Net Promoter Score was 37.1, which
represents the percent of promoters
minus the percent of detractors.
This score is considered very good
by industry standards.

OUR GROWTH STRATEGY
TO SERVE MORE COMMUNITIES

In response to the need for more acute inpatient
psychiatric capacity in the U.S., we added 65 beds in
existing facilities during 2021.

On the de novo front, our expansion pipeline
delivered an additional 218 beds as we opened
new facilities including Clive Behavioral Health
in Clive, Iowa, a partnership with MercyOne.
We opened Southeast Behavioral Hospital, a
partnership with SoutheastHEALTH, serving Cape
Girardeau, Missouri. We also opened Heritage Oaks
Patient Enrichment (HOPE) Center in Sacramento,
California. This stand-alone 16-bed psychiatric health
facility provides a secure, supportive space for
individuals on their journey to recovery.

In 2021, we completed construction on three new
facilities that opened in early 2022: Granite Hills
Hospital will serve the greater Milwaukee area;
Beaumont Behavioral Health, a partnership with
Beaumont Health serving the Dearborn area;
and the new Via Linda Behavioral Hospital, a
partnership with HonorHealth, serving Scottsdale,
Arizona. Construction is on schedule at the new
River Vista Behavioral Health, on the Madera,
California campus of our joint venture partner, Valley
Children’s Healthcare.

Our division had 1.3 million referrals during the year,
an increase of 19% over the previous year; and 12.6%
higher than pre-pandemic 2019. This record number
of referrals is a strong indication of the continued,
pent up demand for mental health and substance
use disorder services in our markets.

U H S B E H A V I O R A L H E A LT H D I V I S I O N

DELIVERING
INDUSTRY- LEADING
QUALITY AND OUTCOMES

Our facilities provide individuals and their families
with compassionate, quality care based on proven
therapies and treatments that result in successful, long-
term recovery recognized among the nation’s best.

We have a longstanding, independently
validated and evidence-based record
of providing quality healthcare
services to patients and their families.
All UHS hospitals are fully accredited
by independent organizations
including The Joint Commission (TJC)
and/or Commission on Accreditation
of Rehabilitation Facilities (CARF),
whose rigorous clinical assessment
protocols are widely respected throughout the
healthcare industry. Many facilities also hold
advanced specialty accreditations.

The Behavioral Health Division continued to be
a leader in the industry in quality and patient
satisfaction. At facilities across the country and
online via telehealth appointments, we delivered
compassionate care based on proven therapies and
treatment that is resulting in successful, long-term
recovery for the thousands of patients who came to
us during their most vulnerable moments.

In CMS’ Inpatient Psychiatric Facility Quality
Reporting requirements, our Behavioral Health
facilities are compared to approximately 1,500
psychiatric hospitals across the country. UHS
results exceed the national averages in 11 out
of 16 indicators.

In 2021, our patients rated their overall care as 4.4
out of 5 in our patient satisfaction surveys. Of those
surveyed, 91% indicated they felt better following
care at one of our facilities.

We incorporated the Net Promoter Score (NPS) into our
surveys at our facilities. NPS gauges customer loyalty
and has been widely adopted by more than two-thirds
of Fortune 1000 companies. UHS has taken an early
adopter stance aimed at supporting a key aspect of our
Mission: To provide superior quality healthcare services
that patients recommend to family and friends.

2 0 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

In September 2021, we held a ribbon
cutting ceremony for the new Granite Hills
Hospital in Milwaukee County, Wisconsin.

CEO Jeff Herman and his team at Prairie St. John’s,
in Fargo, N.D., commemorated the placing of the ﬁnal
beam atop our new behavioral health hospital. The new
replacement facility is on schedule to open in 2022, and
will serve children, adolescents and adults.

SPECIALIZED CARE
AND TREATMENT
Telehealth Offerings
With patients expecting seamless and convenient
experiences, the healthcare industry is embracing
innovative solutions leveraging telehealth. During
the year, we expanded our direct-to-consumer
services, adding thousands of teletherapy and
telepsychiatry sessions.

In 2022, we will continue this trajectory, but will
shift our focus to expand services for our inpatient
hospitals, offer more convenient post-discharge
appointments, and provide more support for
hospital outpatient programming. Our goal in 2022
is to enable UHS facilities to ﬁll gaps in treatment
programming by leveraging telehealth and a
nationally available pool of clinicians.

Educational Services
The pandemic did not deter the efforts of our
dedicated UHS educators, administrators and
support staff as they helped 220 students complete
their high school requirements during the year. This
represents an 8% increase over the previous year
and is a testament to the perseverance, innovation
and compassion displayed by our teams. We
expect that our educational services are going to
be in demand more than ever due to the learning
disruptions our communities encountered as a result
of the pandemic.

Suicide Awareness & Prevention
Our team is dedicated to changing the national
narrative about suicide in a manner that promotes
hope, resiliency, connectedness and recovery. UHS
partners with the National Action Alliance for Suicide
Prevention, helping individuals connect with ongoing
supports and establish a safety net for those
moments when individuals ﬁnd themselves in crisis.
In fact, research suggests that individuals who called
the Lifeline were more likely to feel less depressed,
less suicidal, less overwhelmed and more hopeful by
the end of calls handled by trained counselors.

As the new 9-8-8 hotline is introduced in the U.S.
in July of 2022, the infrastructure is being built to
support the nation’s ability to manage calls and
connect individuals in mental health and suicide
crisis to applicable local resources. UHS is fully
committed to partnering in this process as needed
by each individual state.

Caring For Our Warriors
During the year, we served more than 18,000
active-duty military personnel, veterans and family
members across the Division, including through
our designated Patriot Support Programs.
Services are speciﬁcally designed to address
the effects of combat stress, post-traumatic stress,
depression, substance use disorder and other
behavioral health issues.

2 0 2 1 A N N U A L R E P O R T 2 1

All schools within our Child and Adolescent Mental
Health inpatient settings are rated as ‘Good’ by the
Education regulator. We have also been recognized
through awards and accreditations by a range of
quality networks.

Despite the pandemic, we opened ﬁve new services,
extended services at three facilitites and repurposed
two existing locations to meet the demand for acute
care. We are proud to have kept our service users
safe and protected our workforce throughout the
unexpected challenges of the year. We initiated a
number of well-being and resilience programs to
support our staff.

In line with the growth of our business, we
strengthened our Governance structure and
appointed four prominent independent Non-
Executive Directors to our Advisory Board, which is
led by Senior Independent Director Professor, the
Lord Patel of Bradford OBE, who is also Chair of
Social Work England and Chair of the Independent
Health Providers Network. We are pleased to have
the expertise of Dame Clare Gerada DBE, President
of the Royal College of General Practitioners; Mark
Stephens CBE and Stephen Firn OBE, each of whom
brings a wealth of experience in leading quality
healthcare services.

U H S B E H A V I O R A L H E A LT H D I V I S I O N

OUR OPERATIONS

IN THE U.K.

Cygnet Health Care is
regarded as a leading
provider of behavioral health
services in the United
Kingdom. Focused on
delivering a diverse range
of services to optimize the
service user experience,
Cygnet is proud to provide
high-quality, specialist support
through its network of health and
social care settings.

During 2021, our 10,500 staff

members supported 7,500 people
at our 150 service locations across the

U.K. Through our values of Care, Respect, Empower,
Integrity and Trust, we take pride in the services
we offer and the outcomes we enable individuals
to achieve.

As a national care provider, we work in partnership
with the National Health Service (NHS) and local
government authorities to provide services that
can help more individuals. We consistently maintain
our high standards across the portfolio and 82% of
Cygnet facilities are rated ‘Good’ or ‘Outstanding’
by U.K. regulators.

New Services that opened in 2021:
Coach House, Gledholt Mews and Coach House
Pixie Ward, Cygnet Joyce Parker Hospital
Fisher Ward, Cygnet Hospital Hexham
North East Supported Living
Upper Oakwood, Cygnet Hospital Godden Green

Service extensions:
Oaklands Flats
Thornﬁeld Grange Flats
The Lodge, Cygnet Wast Hills

Repurposed Locations to meet service demand:
Acer Upper at Cygnet Acer Clinic
George Willard Ward at Cygnet Lodge Woking

Team from Cygnet Acer Clinic,
Chesterﬁeld, Derbyshire

2 2 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

IN OUR
PATIENTS’ WORDS

Regina*
Wellstone Regional Hospital
Jennersville, Indiana

“My adult son was concerned about my mental health,” said Regina.

“In response, I sought help at Wellstone. My spouse had recently

passed and the isolation of Covid restrictions was taking a toll on

my mental health. I was quite miserable and it was affecting my

relationships. Through the guidance of your staff, I was able to

improve my mental and physical

wellbeing. I quit drinking and

attained a much better attitude

and demeanor. I returned to doing

volunteer work. I am a much

happier person. The improvement

has been noticed by family and

friends alike. Now when I hear

people struggling, I tell them about

Wellstone and how you changed

my life for the better.”

Liam*
Broughton Lodge
Cygnet Health Care, U.K.

Liam came to us with a diagnosis of autism. He lived with his family

until they were no longer able to care for him. It was determined that

Liam would beneﬁt from transitioning to a smaller care setting. Staff

were able to establish activities that he liked and that best served

his needs. He began to accept support from the staff, and he built

a positive relationship with his multi-disciplinary team.

“I feel that Liam has progressed loads in a short

time,” said his family. “I can honestly see a massive

improvement in him every time I visit. I can see the

team is dedicated and it puts my mind at ease.

I have to hold back my tears, I am so proud of him.

I can’t thank you enough.”

Josh
Texas NeuroRehab Center
Austin, Texas

In 2021, Josh Quigley came back

to visit and thank his care team

at Texas NeuroRehab Center. In

2019, Josh was hit by a car while

attempting his ‘around the world’

cycling trip. The accident left

29-year-old Josh in the hospital

and rehab for weeks. Thanks

to the dedicated staff at Texas

NeuroRehab Center, in Austin,

TX, Quigley was back on his feet

within several weeks. “Because of

the incredible support I received, I

am back on my bike. My memories

of the care I received are only

positive.” In September 2021,

Quigley set a Guinness record for

the greatest distance cycled in

one week. He claims that

nothing will ever stop him

from cycling.

Learn more:
texasneurorehab.com

* Name anonymized

2 0 2 1 A N N U A L R E P O R T 2 3

Melodee Apodaca-Cosby, RN

Our Principles

We stand for excellence, each and every day,

at each and every encounter. Our Principles

set a high bar and reﬂect our purpose.

We Provide Superior
Quality Patient Care

We Value Each Member of Our
Team and All Their Good Work

We Are Committed to Being a
Highly Ethical Healthcare Provider

We Are Devoted to Serving
Our Local Community

Learn more: uhs.com/principles

2 4 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

ENVIRONMENTAL, SOCIAL
AND GOVERNANCE

Our commitment to improving society in a meaningful way
Our commitment to improving society in a meaningful way
Our commitment to improving society in a meaningful way
Our commitment to improving society in a meaningful way

Despite unprecedented challenges brought on by the pandemic and its multiple surges,
Despite unprecedented challenges brought on by the pandemic and its multiple surges,
Despite unprecedented challenges brought on by the pandemic and its multiple surges,
Despite unprecedented challenges brought on by the pandemic and its multiple surges,
UHS has continued its Environmental, Social and Governance (ESG) efforts focused on
UHS has continued its Environmental, Social and Governance (ESG) efforts focused on
UHS has continued its Environmental, Social and Governance (ESG) efforts focused on
UHS has continued its Environmental, Social and Governance (ESG) efforts focused on
UHS has continued its Environmental, Social and Governance (ESG) efforts focused on
improving society in a meaningful way.
improving society in a meaningful way.
improving society in a meaningful way.
improving society in a meaningful way.
improving society in a meaningful way.

With commitment from the top down, and across our businesses, UHS continually explores
With commitment from the top down, and across our businesses, UHS continually explores
With commitment from the top down, and across our businesses, UHS continually explores
With commitment from the top down, and across our businesses, UHS continually explores
With commitment from the top down, and across our businesses, UHS continually explores
With commitment from the top down, and across our businesses, UHS continually explores
With commitment from the top down, and across our businesses, UHS continually explores
With commitment from the top down, and across our businesses, UHS continually explores
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
ways in which to strengthen our involvement with, and commitment to, our environmental
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
stewardship and sustainability, while maintaining our valued relationship with, and support
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
for, employees, patients and served communities and do so utilizing well-respected,
governing practices with integrity.
governing practices with integrity.
governing practices with integrity.
governing practices with integrity.
governing practices with integrity.
governing practices with integrity.

In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
In the following section we describe the many impactful practices we employ across the
enterprise, providing a snapshot of the sustainability efforts in place and achievements
enterprise, providing a snapshot of the sustainability efforts in place and achievements
enterprise, providing a snapshot of the sustainability efforts in place and achievements
enterprise, providing a snapshot of the sustainability efforts in place and achievements
enterprise, providing a snapshot of the sustainability efforts in place and achievements
enterprise, providing a snapshot of the sustainability efforts in place and achievements
enterprise, providing a snapshot of the sustainability efforts in place and achievements
enterprise, providing a snapshot of the sustainability efforts in place and achievements
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
delivered. We invite you to learn more about our ESG goals and practices, the endeavors we
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
use to protect and serve our stakeholder groups, and how we are identifying and mitigating
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.
challenges in the markets we serve.

2 0 2 1 A N N U A L R E P O R T 2 5

OUR INVESTMENT
IN ENVIRONMENTAL
PROGRAMS
UHS complies with applicable legal and regulatory environmental standards
to protect our patients, visitors, staff and environment. We continue to follow
best practices in regards to managing our energy usages and consumption
and disposing of waste for our existing facilities and buildings, including new
construction and major reconstruction projects.

OPTIMIZING ENERGY
EFFICIENCIES
UHS launched its Corporate Energy
Efficiency Initiative in 2017 with
goals of reducing U.S. facilities’

Automatic Fault Detection & Diagnostic Systems
installed and implemented to proactively identify,
prioritize and address critical HVAC system
components’ failure and faults, per their energy
savings potential.

lighting energy consumption by 50%, and heating,
ventilation, and air conditioning (HVAC) energy
consumption in select Acute Care hospitals by 20%.
With a $36 million investment in upgrades to our
light-emitting diode (LED) lighting and optimization
of our large HVAC systems in U.S. facilities, we
achieved these goals in late 2021.

LED lighting upgrades were carried out in more than
200 Acute Care and Behavioral Health facilities,
including more than 250,000 ﬁxtures and over
500,000 LED lights. The LED lighting products used
were certiﬁed by ENERGY STAR® or DesignLights
Consortium (DLC).

Retro- and Monitoring-Based Commissioning of
HVAC systems was carried out at 14 Acute Care
facilities, optimizing controls of 260 Air Handling
Units, 48 Chillers, 49 Boilers and more than 10,000
Terminal Units/VAV boxes – and a savings of 18.9
million total kWh. Each of these facilities also had

Also, by end of 2021, all UHS Acute Care facilities
and approximately 50% of Behavioral Health facilities
were equipped with Building Automation System
software and hardware.

The projects implemented to-date through this
Corporate Energy Efficiency Initiative resulted in total
measured and veriﬁed annual savings of 80.4 million
kWh of electricity and 950,000 therms of natural gas,
resulting in annual CO2 emission reduction of more
than 62,000 metric tons.

Looking ahead, we expect to initiate new HVAC
projects across the corporation as it not only
produced meaningful energy savings, it also can
potentially reduce labor costs, improve system
reliability and extend equipment life.

To further identify energy saving opportunities, we
will continue to monitor ENERGY STAR Portfolio
Manager Scores of all our Acute Care hospitals.

2 6 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

CORPORATE ENERGY EFFICIENCY INITIATIVE
ANNUAL CO2 EMISSION REDUCTION EQUATES TO:

21,088

tons of waste recycled
instead of landﬁlled

68,527,577

pounds of coal burned, or 7,466
homes’ electricity use for one year

13,484

passenger vehicles
removed from the road or
155,818,268 miles driven
by an average passenger
vehicle

Carbon sequestered by

1,025,183

tree seedlings grown for
10 years or 75,961 acres of
U.S. forests in one year

For his work designing
and implementing
UHS’ Corporate Energy
Efficiency Initiative,
Assistant Director,
Energy Management,
Vaibhav Gagrani, PE,
CEM, LEED AP, earned
The Association of
Energy Engineers’
Distinguished Energy
Professional Award in
Fall 2021.

We also plan to leverage data from the Centralized
Utility Bill Management System, which rolled out
in 2020, to monitor and trend utility expenditures
across the corporation more closely, and identify
and act on potential issues faster.

Certiﬁcations and Registrations
In 2021, two of our Acute Care facilities, Aiken
Regional Medical Centers and Manatee Memorial
Hospital, earned ENERGY STAR Certiﬁcation for
their existing buildings. By end of 2022, we expect
approximately 10 of our Acute Care facilities to
hold this prestigious distinction.

UHS continues to invest in technologies including
servers, desktop and laptop computers, displays and
printers that meet Electronic Product Environmental
Assessment Tool (EPEAT) and ENERGY STAR
certiﬁcations. Nearly 90% of these devices in the
UHS data center and back-up data centers, as well
as our facilities, earned these certiﬁcations.

ENVIRONMENTAL
OPPORTUNITIES FOR
GREEN BUILDING
Construction and design of new
builds, and/or major renovations are
completed with high environmental standards (each
project’s ENERGY STAR Score Rating must be 90
or higher), and in compliance with federal, state and
local energy efficiency standards and energy codes.

Northern Nevada Sierra Medical Center, which
is opening in March 2022, is expected to be
Green Globe Certiﬁed. Looking ahead, any new
construction and major renovation project of
$20 million or more will be registered for Green
Building Initiatives’ Green Globes or USGBC’s LEED
certiﬁcation. Although we are conﬁdent our projects
typically meet these standards, UHS plans to
increase efforts to pursue official certiﬁcations.

2 0 2 1 A N N U A L R E P O R T 2 7

Our future facilities are also
being designed to incorporate
environmentally friendly materials
and processes:

Cedar Hill Regional Medical Center –
Washington, D.C. (est. opening
December 2024)

• Being designed to meet LEED for Healthcare v4,

Silver rating per DC Green Building Code

• Expected to participate in DC recycling program

• Pursuing credits for reduction of global warming
potential products, building products that are
environmentally suitable from environmentally
friendly (low carbon) vendors

• Materials also being speciﬁed for mercury, lead,

cadmium and copper reduction

• Partnering with DC’s “Solar for All” program to

build a solar array above the parking garage that
will provide power to the grid to help subsidize
neighboring housing energy costs

Our commitment to energy-
conscious building, and subsequent
demolition or waste removal, is
reflected in the following recently
completed or ongoing projects:

Granite Hills Hospital – West Allis, WI
(83,000 sq. ft. of new construction)

Construction and design of this newly opened
behavioral health facility successfully transformed
a former contaminated Grey Site, while minimizing
landﬁll waste and including use of energy-efficient
products. In total, efforts included:

• Retaining 5,567 cubic yards of hazardous soils on

site via berms, and out of landﬁlls

• Hauling 21 truckloads of creosote-soaked railroad
ties to a railroad company (not landﬁll) for reuse

• Properly disposing of nearly 37, 600 tons of

hazardous ﬁll

• Fitting all patient rooms with touchless faucets that

are temperature controlled, and outﬁtted with timed
ﬂow stops

• Installing a 60,000 sq. ft. white roof to reduce heat

buildup and energy use

2 8 U N I V E R S A L H E A L T H S E R V I C E S , I N C .
2 8 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

Northern Nevada Sierra Medical Center –
Reno, NV
(302,000 sq. ft. of new construction)
and
Henderson Hospital Tower –
Henderson, NV
(214,000 sq. ft. of new construction)

Our recent construction and major renovation work
in Nevada involved multiple projects, most notably
the new patient tower at Henderson Hospital and
the $300 million, full-service Northern Nevada
Sierra Medical Center. During these Nevada-based
projects:

• 698.7 tons of general construction and design
materials were reused or recycled, earning a
landﬁll diversion rate of 75%

• 543 tons of concrete, dirt, and asphalt were

diverted, scoring an 83% landﬁll diversion rate

• Rooﬁng with appropriately colored, energy-efficient

and recyclable materials was installed

Prairie St. John’s – Fargo, ND
(144,924 sq. ft. current facility replaced with
new 103,373 sq. ft. facility)

This new facility is expected to open by end of 2022.
During construction, contractors were mindful of
minimizing energy waste on site, diverting materials
from landﬁlls, and reusing materials:

• Metal studs used for walls and partitions were
pre-cut at the supplier’s warehouse to reduce
metal stud debris on site

• Debris from demolition of old building will be

crushed onsite and used as base layer for new
parking lots

Former Texoma Medical Center
site – Denison, TX
(278,997 sq. ft. demolition)

In the 2021 demolition of an old hospital
site, UHS’ goals were to reduce the
environmental impact of the site demolition
and make efforts to ensure building materials
were recycled, or properly disposed. During
demolition activities, efforts included:

• Recycling of concrete, rebar, wiring, piping
and all associated metals in the buildings

• Disposing of asbestos-containing building
materials or clean construction debris in an
EPA designated landﬁll

• Transporting approximately 28,875 tons of
building material, sidewalks, canopies, etc.
to a recycling plant where it was crushed
and made into gravel

• Removing approximately 1,080 tons of
materials from buildings and sidewalks
from the site, and transporting it to a metal
recycling plant

Southwest Healthcare System
Inland Valley Medical Center
Campus – Wildomar, CA
(240,000 sq. ft./ renovation)
and
Rancho Springs Medical Center
Campus – Murrieta, CA
(36,000 sq. ft./renovation)

Inland Valley Medical Center and Rancho
Springs Medical Center recent renovations
included outﬁtting the buildings with LED
ﬁxtures and occupancy sensors to reduce
the lighting energy in the building when on,
or when space is unoccupied. Highlights of
our conservation efforts included:

• All Heating Hot Water and Chilled Water

systems’ pumps were updated with
Variable Frequency Drives

• Firetube condensing boilers offering

superior efficiencies and low emissions
were utilized

• 80% of construction and demolition waste

was diverted from landﬁlls

ENVIRONMENTAL
SERVICES
UHS works to utilize processes
and services that are designed
to make its work environments
more eco-friendly and sustainable, while safe for
employees, staff and visitors.

Centennial Hills Hospital Medical Center, Spring
Valley Hospital Medical Center, Henderson
Hospital, Fort Duncan Regional Medical Center,
and St. Mary’s Regional Medical Center participated
in and earned the AORN GO CLEAR Award™ - Gold
for 2020-2023 for the smoke-free environment
of their operating rooms. This award is a
comprehensive approach to ensure a smoke-free
environment wherever surgical smoke is generated
to protect patient and worker safety. Other facilities
are working on the requirements and will submit
applications when ready.

Chemical Management
Environmental Service operations are committed
to using environmentally friendly chemicals
and processes. The teams use a combination
of Green Seal and GREENGUARD chemicals to
clean our hospitals and maintain a clean and safe
environment.

Environmental Service operations invests in
machines which electrically convert water into a
detergent-free cleaning agent for ﬂoor care.
This technology enables many facilities to
signiﬁcantly reduce the amount of chemicals
used to clean ﬂooring.

Further, throughout our organization we continued
to use an environmentally preferable, low-odor and
zinc-free ﬂoor protector to seal and protect our
ﬂoors. This has allowed us to decrease chemical
usage by reducing the frequency of stripping
operations.

2 0 2 1 A N N U A L R E P O R T 2 9

REPROCESSING AND
WASTE DIVERSION
Reprocessing and Waste Diversion
efforts are in place at Corporate
as well as at the facility level.

Supported by the dedication and commitment of
our staff, these initiatives help reduce our carbon
footprint and increase the recycle stream.

Our Acute Care facilities use vendors such as
Stryker® Sustainability, Sterilmed® and Innovative
Health to assist with reprocessing and/or
remanufacturing of single use devices. These
FDA-approved, third-party programs allow for:

• collection of single-use devices

• the buy-back of remanufactured devices at a

50% discount

• the vendors’ purchase of our used devices at

pre-determined fees, for resale of remanufactured
product to another facility or breakdown of product,
and recycling of components (depending on
composition)

RESPONSIBLE
POLLUTION AND WASTE
MANAGEMENT
Facilities participate in annual waste
training to support our initiative for

disposing waste responsibly. Data on waste streams
are collected monthly and reported through the
individual hospitals’ Environment of Care committee
(EOC). The EOC identiﬁes opportunities to reduce
non-recycled material and increase recycled
material. In 2021, this initiative recycled 14 million+
pounds of material.

Acute Care facilities participate in a waste-to-energy
initiative through our waste stream providers,
contributing 3.8 million pounds to this process in
2021. The waste-to-energy process creates energy
from the primary treatment of waste, creating
electricity and/or heat.

Contracts are in place for responsible disposal of
regulated and hazardous waste, including both
hazardous and non-hazardous pharmaceutical
waste. Also, Prescription Destroyer/Stericycle
containers are used to render controlled substances
‘non-retrievable.’

For example, at Palmdale Regional Medical Center, a
facility-wide sustainability program includes reusable
sharps and pharmaceutical waste containers through
Stericycle®; paper recycling through Iron Mountain®;
pallet recycling and can and bottle recycling.

In the U.K., our Cygnet Health Care facilities are
actively promoting the recycling of their cooking oil.
In 2021, more than 6,100 liters of cooking oil were
successfully recycled into biodiesel.

3 0 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

In 2021, our Pharmacy and Supply Chain Value
Analysis teams worked together to purchase RX
Crusher devices and supplies to safely contain
aerosolization of powder when hazardous pills
are crushed. These devices were purchased
for UHS hospital medication rooms.

Purchases of exam gloves used at our Acute
Care, Behavioral Health and IPM locations are
standardized to comply with USP800, as well as to
meet ASTM 6978 minimum standard, when possible.
Shortages during the pandemic caused some
disruptions, yet looking ahead, the team is focused
on meeting these standards.

After proper security measures are taken, UHS’
end-of-life computer equipment is recycled through
a vendor managed program. As a data privacy
and security precaution, we do not donate used
equipment to other third-party organizations.

Conservation of Natural Resources
In 2021, we continued to leverage technology,
digitizing historic paper documents, and shifting
to collecting and sharing data through electronic
means, when possible, in efforts to reduce our
paper consumption. Use of paper faxes has been
substantially reduced as we have adopted online,
digital fax solutions in our Behavioral Health
hospitals for patient referrals. Also, as part of CMS’
Promoting Interoperability standards, our Acute Care
facilities comply with secure email-based continuity
of care standards in their communications with other
health providers eliminating large, paper-based
records transfers.

Within the food and environmental service
operations, we remain committed to reduce paper
consumption. Through leveraging technology –
such as moving paper forms to electronic – these
operations alone have reduced paper use by more
than 34,000 sheets in the past year.

When multiple devices are appropriate, multi-
function printers are used to reduce duplicative
hardware and energy usage. As a further
conservation step, high-volume, multi-function
printers will soon default to duplex printing to
reduce paper usage.

In 2017, Lakewood Ranch Medical
Center’s EVS director, Donny Long,
launched an aggressive recycling
program. Four years later, the
facilities’ carbon footprint fell from
260 trucks annually to 50. During
the same time period, the recycling
program improved from 8% of waste
being recycled to a record to date,
35.4%. Long said, “These results
couldn’t have been achieved without
the commitment and dedication of
our employees to keep Sarasota
County environmentally safe
and green.”

2 0 2 1 A N N U A L R E P O R T 3 1

CULINARY AND
NUTRITION STANDARDS
As part of the Corporate Supply
Chain structure, the Culinary and
Nutrition Department has direct
inﬂuence over the overall food program sourcing
and contracting. This team of Licensed Registered
Dieticians and ACF Certiﬁed Chefs also has
operational inﬂuence over UHS’ Behavioral Health
Division.

Despite the continuing pandemic, and disruptions for
food supplies and staffing, the Culinary and Nutrition
Department has stayed true to its Food as Healing
Fuel approach, being mindful of the importance of
food in a patient’s healing, while continually seeking
ways to reduce waste and improve efficiencies.

The team’s environmentally conscious approach is
evident in all touch points, from designing of kitchens,
ordering of ingredients, creation of recipes, through
to preparation and delivery of meals. The team
continually looks to introduce products that not only
maximize efficiencies, but also improve the patient
experience. When designing new or refurbished
kitchens, the team utilizes energy-efficient equipment
and products/processes to minimize energy usage
and waste. Culinary teams are also being educated
about the best way to utilize equipment, and the
importance of reducing power draws to only those
times the piece of equipment is needed.

In December 2018, the team started using software
and Corporately Managed Order Guides to ensure
facilities were only ordering, and thus producing,
what was needed. Use of these tools, and
subsequent elimination of waste, proved essential
as food supply shortages, shorted inbound freight,
and manufacturer stoppages increased signiﬁcantly
during the pandemic.

Through use of these Guides and batched recipe
software, the price per patient day within the
Behavioral Health Division in 2021 was $0.68 lower
than the previous year, and the number of cases of
product used by our facilities fell 8.2%, which helped
the team mitigate the marketplace’s high inﬂation.

We plan to expand our use of software and Core
List Management to another 40 Behavioral Health
facilities this year.

Since 2017, the team has offered eco-friendly
take-out containers in its retail operations and
worked to reduce its use of disposable containers
and patient trays. However, the pandemic and
the clinical need for disposables complicated
this goal, and our priority turned toward securing
products for the immediate need. Nonetheless,
what developed from this unprecedented national
demand was an increase in sources and production
of non-plastic foam disposable containers. We
took advantage of this trend and switched to these
products when supply availability and cost made it

During the pandemic, the Culinary and Nutrition
team increased its focus on compliance. These efforts
have contributed to a significant increase in earnings
in the past year:

• More than $3.6 million in rebates and incentives from US Foods

• $780,000 in rebates and incentives from Premier GPO

• 11% increase in its cold beverage vending commission from Coca-Cola®

• 51% increase in commission under new vendor, Canteen One ($163,000

in ﬁrst nine months)

3 2 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

In 2021, seven UHS Acute Care hospitals earned
Gluten Intolerance Group’s certification as
Gluten-Free Food Service programs. Only two
other hospitals in the U.S. earned this distinction.

• Centennial Hills Hospital Medical Center

• Desert Springs Hospital Medical Center

• Lakewood Ranch Medical Center

• Northwest Texas Healthcare System

• Summerlin Hospital Medical Center

• The George Washington University Hospital

• Valley Hospital Medical Center

possible. Concurrently, we continued efforts toward
replacing disposable plates, utensils and trays with
more sustainable permanent alternatives, such as
melamine-based goods, where appropriate, for
our patients.

UHS continues to rework and expand its menus to
meet the needs of its patients, staff and visitors.

While gluten-free menu options had been available,
in 2021, our Acute Care Support Services team
worked with select hospitals to earn Gluten Free
certiﬁcations. By year end, seven UHS Acute Care
hospitals were validated as ‘Gluten Free Safe
Spots’ by the Gluten Intolerance Group. To earn this
distinction, facilities underwent a comprehensive
training and audit ensuring they met the highest
standards related to cross-contamination prevention
and meal quality. Each hospital then is re-certiﬁed
annually to ensure compliance. In 2022, we look
to expand this program further throughout our
Acute Care hospitals, and across our Behavioral
Health facilities.

UHS also has begun to identify and include more
plant-based menu items on patient and café menus
at our Acute Care and Behavioral Health facilities.
We have expanded menu options and continue to
build recipes in our dietary software system to be
used in patient and café menus.

By changing culinary offerings to a more plant-
based diet, we are improving the health of our
communities by reducing the intake of saturated
fat and increasing the intake of ﬁber and other
micronutrients, such as magnesium and potassium.
Additionally, through the shift to include plant-based
options, we are reducing carbon emissions and
environmental contamination.

Looking ahead, UHS will focus on
improving means of monitoring
sustainability data corporate wide as
well as work toward developing
initiatives focused on Energy
Procurement, Water Management and
Waste Management and Reprocessing.

2 0 2 1 A N N U A L R E P O R T 3 3

OUR COMMITMENT
TO SOCIAL CAUSES

At UHS, we are committed to supporting, protecting, serving and engaging
with key stakeholder audiences including employees, physicians, patients and
the communities we serve. We proudly provide meaningful contributions in many
ways, making a positive and lasting impact.

CORPORATE RECOGNITION
UHS is respected in the healthcare industry, building
an impressive record of achievement, including:

• Being named year after year to Fortune World’s
Most Admired list; the Fortune 500 ranking; and
the Forbes Global 2000.

• In the Philadelphia region – our corporate

headquarters location – UHS ranked among the
largest employers, largest healthcare systems,
and top public companies in the region by the
Philadelphia Business Journal.

• Being a founding member company supporting
the Veterans Jobs Mission, the leading private-
sector solution addressing U.S. military veteran
unemployment. In 2021, UHS has employed more
than 1,500
veterans, an
increase of 24%
since 2020.

HIGH-QUALITY
HEALTHCARE SERVICES
Our hospitals, facilities and teams have attained
numerous accolades for the care we deliver and the
leadership we demonstrate including:

• Twelve Acute Care hospitals earned an “A” safety
grade from The Leapfrog Group. In total, nearly
75% of our hospitals earned an “A” or “B” safety
grade, recognizing our efforts in protecting
patients from harm and meeting the highest
safety standards.

• UHS was named the #1 “Healthcare System” for
reputation score by Reputation.com. Our Acute
Care hospitals were rated 4.2 out of 5 stars,
surpassing most in-market competitors.

• Patients at our Behavioral Health facilities rated
their care 4.4 out of 5 in our patient satisfaction
surveys. Of patients surveyed, 91% report upon
discharge that they felt better following treatment
at our facility.

• In CMS’ Inpatient Psychiatric Facility Quality

Reporting requirements, our Behavioral Health
facilities are compared to approximately 1,500
other psychiatric hospitals across the country.
UHS results exceed the national averages in
11 out of 16 indicators.

• We consistently maintain our high standards across
the portfolio and 82% of Cygnet facilities are rated
Good or Outstanding by U.K. regulators.

3 4 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

responders and their families. Each program has
a dedicated military liaison to ensure appropriate
and consistent communication. In 2021, UHS
Behavioral Health Facilities and Patriot Support
Programs provided care for more than 18,000
service members, Veterans and family members,
an increase of 9% since 2020.

CHARITABLE CARE
In 2021, UHS Acute Care facilities in the U.S.
contributed $2 billion in charity care and
uninsured discounts to qualiﬁed patients.

COMMUNITY PARTNERS
UHS has a long-standing record and commitment
to clinical excellence, high patient satisfaction
and outcome measurement. Our comprehensive
use of various evidence-based clinical outcome
assessment metrics allows us to effectively track
and measure our performances, and identify
opportunities to improve patients’ quality of care
and satisfaction.

UHS’ Behavioral Health Division offers a wide variety
of programs and services to TRICARE® members
and their beneﬁciaries. In addition, specialized
Patriot Support Programs are available at 25 of our
U.S. facilities providing high-quality, behavioral health
care to active-duty military personnel, Veterans, ﬁrst

TRICARE is a registered trademark of the Department of Defense,
Defense Health Agency. All rights reserved.

Community Outreach

Throughout the year, individual facilities offer a variety of free programs and events to help educate and
support the local communities, such as health and wellness classes and screenings, seminars, support
groups and health-related services and events.

Our community stewardship also includes donations, employees volunteering time and hosting
fundraising events (i.e., toy drives, food collections, organized walks, etc.) to benefit a wide range of
healthcare, civic and community-based organizations throughout the year. Here are some of the many
recipients of these actions:

Philadelphia Region

While UHS focuses on providing quality care to patients’ physical and mental health, we also recognize
the importance of meeting their social needs as well. An estimated 11.5% of adults in the U.S. are food
insecure. Insufficient food intake or malnutrition may increase the risk of issues such as diabetes,
hypertension, asthma, tooth decay, anemia, infection, birth defects, depression, anxiety, emotional
imbalance, stress, and starvation.

Recently, The George Washington University Hospital has been working with the Food Insecurity
Project, to identify its inpatients who were food insecure. We learned 54% of screened inpatients were
indeed food insecure, and of those, only about 40% were currently receiving Supplemental Nutrition
Assistance Program (SNAP) benefits. Our dieticians consulted with these patients, and at discharge,
were given information about available federal and state food assistance programs, such as SNAP, that
are available to them. We are sharing our experience with other UHS facilities to increase awareness of
the social determinants of health, how to identify them and how to address the problem.

2 0 2 1 A N N U A L R E P O R T 3 5
2 0 2 1 A N N U A L R E P O R T 3 5

REACTION TO
COVID-19

Over the past two years, all healthcare providers have navigated uncharted waters.
Nonetheless, at UHS, we have continually risen as a team to meet the challenges
presented by the COVID-19 pandemic. Together, we continued to be safe, trusted
providers of high-quality healthcare and valued resources for evidence-based
information and guidance to our served communities.

#HEALTHCAREHEROES
Their resilience is remarkable. Our frontline
providers stepped up time and time again to meet
demands for quality care and compassion through
each of the pandemic’s surges. Meanwhile, internal
procurement teams took on the challenge of
securing critical medical supplies, equipment and
staff, despite supply chain disruptions and shortages
in competitive markets. Our Incident Command and
Communication teams worked together to provide
continual, up-to-date guidance to facility leadership
throughout the organization regarding treatment
and safety protocols. Further, environmental teams
worked to improve efficiencies and, when needed,
implemented additional protocols to ensure safe,
clean and trusted environments for our patients,
visitors and staff.

Throughout, our Acute Care hospitals and clinics
provided care for those affected by the COVID-19
virus, including serving as monoclonal antibody
infusion treatment sites in some cities. In December
2020, Health and Human Services Secretary Alex
Azar and U.S. Surgeon General Jerome Adams were
onsite at The George Washington University Hospital

to participate in the National Ceremonial COVID-19
Vaccination Kick Off Event. Since then, these
facilities also served as key access points and/or
sources of information for vaccinations and boosters.

SUPPLY CHAIN SUSTAINABILITY
In 2021, UHS supply teams increased spending,
built a supply cache and sought alternative suppliers
to garner needed and sustainable inventory
levels in order to protect our staff and patients.
This included additional sourcing of powered air-
purifying respirators (PAPRs), elastomeric respirators,
ventilators, high-pressure non-invasive ventilators,
and rental of patient beds, ventilators, IV pumps and
feeding pumps to supplement current inventories
during peak COVID times.

Also, in 2021 UHS established a Corporate
Warehouse to store essential personal
protective equipment (PPE), such as cover
gowns, exam gloves and N95 masks to serve
as a back-up reserve for our hospitals during
their PPE shortages.

3 6 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

To comply with a state law enacted in April 2021,
our ﬁve Acute Care facilities in California have since
collected and maintained a 90-day supply of eye
protection, isolation gowns, surgical masks, N95
masks, shoe coverings, PAPRs and elastomeric
respirators.

In partnership with Premier, UHS acquired a minority
stake in Prestige Ameritech to provide an additional
U.S.-based supplier of PPE. In September 2021, UHS
partnered again with Premier and others to acquire
a minority stake in Exela Holdings, Inc. to shore up a
vital supply of pharmaceutical products and support
domestic production.

EMPLOYEE ASSISTANCE
While these actions helped to protect the physical
health of our employees, steps also were taken in
the past year to address their mental well-being as
well. Most recently in September 2021, we launched

a new 24/7 conﬁdential Employee Assistance
Program (EAP) for employees and family members.
Through the service, employees have access to up
to three free counseling sessions per issue, per year,
in addition to self-guided modules focused on well-
being screening, stress reduction, mindfulness and
meditation, as well as other resources. At the facility
level, initiatives such as the creation of “Recharge
Rooms” or weekly Psychology staff drop-ins were
implemented to support our most valued asset – our
employees.

The UHS Foundation was established to provide
ﬁnancial assistance to our employees negatively
affected due to natural disasters, such as hurricanes
or ﬁres. We extended its eligibility to include those
employees enduring hardships due to a national
public health pandemic.

“The pandemic taught us a little more about shared
sacrifice. Through unified orchestration, our team
effectively established and deployed many best
practices. The effort all hinged on our employees.
Every one of them… they never wavered.
And for that, I am eternally grateful.”

PRESIDENT & CEO MARC D. MILLER AT THE 2021 BEN FRANKLIN
GLOBAL FORUM IN PHILADELPHIA, HONORING U.S. MILITARY
GOLD STAR FAMILIES

2 0 2 1 A N N U A L R E P O R T 3 7

LEADERSHIP APPOINTMENTS
AND DISTINCTIONS

UHS leaders are talented, dedicated professionals who
are often recognized by their industry peers. Below are
some of our leadership team who have been elected
to local Board of Directors/Trustees and/or who have
been recognized by their local communities for their
contributions:

Marc D. Miller, President and CEO, was
named to the Board of Directors for
the Federation of American Hospitals
(FAH). In addition, he has been a
member of the Board of Directors of

Premier since 2015. He is one of ten board members
focused on guiding the company as it looks to improve
its members’ quality outcomes, while concurrently,
safely reducing costs.

Geraldine Johnson Geckle, Senior Vice
President, Human Resources, serves as
Vice Chair, Board of Advisors, College of
Arts and Sciences at Loyola University
Maryland. She recently made a gift to

the University to support equity and inclusion initiatives
as well as capital renovations to Beatty Hall for the
Miguel B. Fernandez Family Center for Innovation and
Collaborative Learning.

Matt Peterson, Executive Vice President
and President, Behavioral Health
Division, was named Chairman of the
Board of Trustees of the National
Association for Behavioral Health

(NABH) for the 2022 calendar year. He is also a Fellow
of the American College of Healthcare Executives
(FACHE), and a Fellow of the Healthcare Financial
Management Association (FHFMA).

Karen E. Johnson, MSW, Senior Vice
President and Chief Clinical Officer,
Behavioral Health Division, serves on the
Health Systems Corporate Liaison Group
of The Joint Commission. She serves

on the Quality Committee of the NABH. In addition, she
serves on the Executive Committee of the National
Action Alliance for Suicide Prevention, leading
implementation of Zero Suicide at UHS facilities, while
also serving on the Transforming Health Systems
component of the Action Alliance.

Mark Friedlander, MD, MBA, Vice
President and Chief Medical Officer,
Behavioral Health Division, was elected
as a delegate from the Pennsylvania
Medical Society to the American

Medical Association.

Karla Perez, Regional Vice President,
Acute Care Division, is a board member
of the Las Vegas Metro Chamber of
Commerce; Nevada Mutual Insurance
Company; the Nevada State Bank and

Nathan Adelson Hospice.

Kevin DiLallo, Group Vice President,
Acute Care Division, recently received
the Manatee County Government,
Work that Matters Challenge Coin and
Certiﬁcate for his distinguished service

during his tenure as the CEO and Group Vice President
of the Manatee Healthcare System.

Kimberly D. Russo, CEO, The George
Washington University Hospital, and
Group Vice President, serves on several
boards including The Leukemia &
Lymphoma Society, National Capital
Area; the Economic Club; and the Regional Policy
Board for AHA. In 2019 and 2021, Washingtonian
Magazine named Kim to their list of Washington’s
Most Powerful Women.

Ethan Permenter, Divisional Vice
President, was appointed an At-Large
member of the NABH for the 2022
calendar year.

MAJ Mark C. Fleming, Ph.D., Regional
Vice President, and Major in the U.S.
Army National Guard, began a four-
year term as a board member of the
National Register of Health Service

Psychologists. He also serves on the Board of
Examiners of Psychology; serves as a Board Member
for Project Return; and a Board Member on Mental
Health America of the MidSouth. Mark was awarded
the 2021 Innovation Award by the National Guard
Behavioral Health Working Group for exceptional
innovation and implementation of programs that
improve behavioral healthcare for soldiers and
families of the Army National Guard.

3 8 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

Tim Bedford, CEO, Emerald Coast
Behavioral Hospital, serves on several
boards including the NAMI Bay County
Board; Warrior Beach Retreat; Florida
State Panama City Development

Board; SPARE local chapter for suicide prevention;
and the Panama City Chamber of Commerce.

Allison Davenport, CEO of Riveredge
Hospital, was listed by Crain’s Chicago
Business Notable Executives of Color
in Healthcare.

Jaime Fernandez, Group CEO,
serves on the Board of Directors
for the Virginia Hospital and
Healthcare Association.

Shane Frazier, MBA, BSN, RN, CEO,
Pinnacle Pointe Behavioral Healthcare
System, serves as Vice Chair for the
Board of the Children’s Protection
Center. He also serves on the Board

of Managers of the Arkansas Provider Coalition; and
the Community Council for the Little Rock Air Force
Base. In 2022, Shane was selected by the readers of
Arkansas Money & Politics magazine as one of the top
C-Suite Executives of the year.

Andy Guz, CEO of Lakewood Ranch
Medical Center, serves on the
Lakewood Ranch Community Fund;
the Greater Sarasota Chamber of
Commerce; and is a member of the

American College of Healthcare Executives (ACHE).
He also serves on the Bradenton Area Economic
Development Corporation and is a Board member
for Meals on Wheels PLUS of Manatee County.

Kurtis Hooks, CEO of Virginia Beach
Psychiatric Center, is a Trustee for
the Hampton Roads Chamber of
Commerce; is a member of the
Executive Healthcare Committee of
the Virginia Chamber of Commerce; he also serves
as Chair of the Behavioral Health Committee of the
Virginia Health and Hospital Association. In addition,
he was appointed by Virginia Beach City Council to
the 5/31 Memorial Committee (commemorating the
5/31/2019 Virginia Beach Mass Shooting Tragedy)
and is a founding member of the Hampton Roads
Opioid Working Group.

Rachel Legend, Group Director,
serves on Massachusetts’ Overdose
Prevention and Intervention Task
Force; and is a member of the Council
on Substance Abuse Prevention.

Krista Roberts, CEO, St. Mary’s Regional
Medical Center, serves on the Vance
Development Authority; the Council
on Finance & Strategic Information
and the Council on Rural Health with
the Oklahoma Hospital Association; and Leadership
Oklahoma as ambassador, Northwest Oklahoma.
She was one of three ﬁnalists for the 2021 Pillar of
the Plains award for her work to better the Enid
community.

Robin Weagley, CEO of The
Meadows Psychiatric Center, was
named as one of the 2021 Women
Making a Difference, as selected by
community leaders and readers of the

Pennsylvania Business Central.

John Willingham, Divisional Vice
President, serves on the SCHA
Board of Directors; the Workforce
Advisory Council; and the Hospital
and Healthsystem Association

of PA Political Action Committee.

Salt Lake Behavioral Health CEO, Kreg Gillman, recognized as
patriotic employer by The Office of the Secretary of Defense
Employer Support of the Guard and Reserve, in connection with
the Utah Air National Guard for his role in supporting employees
serving in the military but also his large role in supporting the
mental health of active-duty members through the facilities’
Strong Hope and Courage to Change programs.

2 0 2 1 A N N U A L R E P O R T 3 9
2 0 2 1 A N N U A L R E P O R T 3 9

Our Workforce

At UHS it’s a team effort! The UHS corporate office team members work hard
to support our hospital and facility colleagues, who in turn are committed
to providing superior care to our patients. Together this team of 89,000
individuals allows UHS to make meaningful impact on our patients, their
families and the communities we serve.

Our policy is to provide equal employment opportunity to all employees
and applicants. We are fully compliant with all federal, state and local
laws and regulations relating to equal opportunity employment and
nondiscrimination matters for all protected classes of employees
(i.e., religion, color, gender, sexual orientation, age, disability and
military status, among others).

THE DIVERSITY OF OUR WORKFORCE IS
OUTLINED BELOW:

Gary Diep, RN

U.S.

U.K.

Gender Distribution
All Employees

Female
75%

Male
25%

Female
67%

Male
33%

Black
23%

Hispanic
17%

Asian
9%

Other
5%

Black
14%

Asian
6%

Other
2%

White
44%

Don’t know/
rather not say
34%

In the U.K., our
10,000+ Cygnet
workforce is
comprised of
more than 110
nationalities.

Ethnicity Breakdown
All Employees

White
47%

4 0 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

EMPLOYEE DEVELOPMENT
& TRAINING
We love empowering our people! Whether it
be through formal training programs or informal
mentoring and networking opportunities, individuals
are able to develop their skills and beneﬁt from
support and inspiration from helpful, experienced
professionals.

UHS’ Learning and Development team offers a
variety of professional and leadership development
programs to strengthen our company, to support
our employees’ career goals, and assist with
succession planning.

The Corporate New Employee Orientation program
introduces new employees to UHS’ Mission, Vision,
Principles, and Values, our policies and procedures,
as well as employee beneﬁts and resources. Also
as part of their onboarding process, new Corporate
employees participate in a two-hour Service
Excellence training session to learn about:

• Service Excellence Attributes that serve as the

foundation of UHS’ corporate culture — continuous
improvement, employee development, ethical and
fair treatment of all, teamwork, compassion, and
innovation in service delivery.

• Service Excellence Standards that deﬁne how

we interact daily — treating everyone as a guest,
demonstrating professionalism and excellence, and
practicing teamwork.

A Service Excellence Facilitator Workshop is offered
to expand awareness and adoption of these core
Attributes and Standards throughout all subsidiary
entities. Workshop participants are identiﬁed by local
leadership with CEO approval and certiﬁed by the
Learning and Development team to deliver Service
Excellence training at their respective facilities.

“Training programs have
always been baked into
the UHS landscape.”

Geraldine Johnson Geckle,
UHS Senior Vice President,
Human Resources

Developing an
Internal Talent
Pipeline
UHS is vested in identifying
and nurturing the leadership
qualities of team members,
from our ﬁrst-time managers
to top-level executives. Our L3
Executive Development Program
was developed for aspiring CEOs
of Acute Care and Behavioral Health
facilities. Called L3 because it focuses on the
three leadership qualities of innovation, execution
and results, this rigorous program exposes high-
potential employees to a variety of relevant learning
experiences. Participants in the Acute Care and
Behavioral Health L3 programs have at least 15
hours of formal training, including classroom and/
or virtual sessions. It also has informal elements
including one-on-one access to a skip-level mentor,
next-level ‘learn by doing’ stretch assignments and
an action learning team project.

The time to complete the Acute Care L3 program
depends on course scheduling/delivery. Once
participants have completed the core curriculum
they are invited to participate in monthly webinars.
The Behavioral Health core curriculum is typically
completed within 2-3 months.

We offer a COO-in-Training Program designed to
provide an executive-level, CEO training curriculum
for high caliber leaders. Our development is
designed for project-based interactive learning with
a focus on technical and leadership skills. The COOs
are mentored by CEOs and Vice Presidents. Upon
completion of the training, COOs are matched with a
CEO position within the Behavioral Health Division.

Our industry-unique Leadership Summit provides
an orientation for CEOs new to UHS. Each CEO
completes three interactive sessions (approximately
20 hours) of coursework within the ﬁrst year. The
Summit allows the cohort of new CEOs to gain
exposure to the UHS network of resources while
receiving an orientation to UHS processes. This
commitment to professional development results in
our strong clinical outcomes provided by a team of
talented and skilled leaders.

2 0 2 1 A N N U A L R E P O R T 4 1

By using ROI studies and evaluations, we continue
to measure our programs to ensure alignment
with business goals and challenges, as well as the
changing healthcare environment. We also seek
to measure their effectiveness and modify and/or
introduce new learning initiatives as needed.

Implementation of the L3 program has led to a
meaningful increase in the percentage of executives
who were promoted within the company, especially
among Acute Care Chief Operating Officers (COOs).
As seen by chart below, since the launch of the
L3 program, the percentage of COOs who were
promoted to this position from within the company
nearly doubled to 81%!

% of Acute Care COOs Promoted
to This Role From Within UHS

81%

41%

2010-2015
(Before L3)

2016-Current
(Since L3 Launch)

Encouraged by these results, and to further
strengthen employees’ career growth opportunities,
UHS will launch additional L3 programs in 2022. The
new L3 for Acute Care Nursing and L3 for Behavioral
Health Nursing will be aimed at those qualiﬁed
employees seeking the Chief Nursing Officer role.

UHS’ core m3 Management Development Program
is designed for Corporate, Acute Care, Behavioral
Health, IPM and Prominence Health Plan employees
of all leadership levels and covers three areas
of focus: Fundamental, Inﬂuence and Strategic
Management. The curriculum includes multiple
virtual classroom and online modules, each typically
2-3 hours in length, and is completed within a
two-year period.

One of the most important roles of a manager is to
ensure that our employees are learning, growing
and developing. To support our managers, we
provide various resources, such as coaching guides,
webinars, on-line classes and more.

Training programs include specialty tracks (i.e., for
Nursing, COOs, CFOs, Emerging Leaders, etc.)
and are constantly evolving. In 2021, HR Essentials
was launched for all supervisors with direct reports
to create awareness for HR basics, their role and
responsibilities, and importance of partnering with
local HR department and leadership to foster and
ensure a compliant, risk-avoidant, positive and safe
work environment for all employees. In early 2022,
Business Basics was implemented for Corporate
employees looking to enhance their professional
skills, such as business writing, email etiquette and
time management, as well as others.

In addition to formal training programs, UHS
employees have access to a Corporate Divisional
team. Due to UHS’ size and scope, these teams
are able to share best practices and expertise
across most key areas of the business (i.e., Clinical,
Business Development, Managed Care, Finance,
Risk, etc.). Within the Behavioral Health Division,
this network of colleagues typically are those who
started at the local facility level, and thus have
experienced the “day-to-day” work, and can speak
to the nuances of the local environment and/
or facility. Access to this network not only gives
employees insight on opportunities of advancement
within the company, but also peace of mind that
they are consulting with someone with hands-on
experience in their role, building credibility and trust.

m3 COUNTS FOR 2021

5,400+ HOURS OF
m3 TRAINING DELIVERED

2,000+ EMPLOYEES
ATTENDING m3 PROGRAMS*
(*Employees may have attended more than one session)

144 m3 PROGRAMS
CONDUCTED

4 2 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

THE UHS GRADUATE MEDICAL
EDUCATION PROGRAM
In early 2018, the UHS Acute Care Division, Quality,
Physician Leadership, GME and Research (UHS
GME) set out to successfully grow the UHS Graduate
Medical Education (GME) Program with the goal
of developing excellence in graduate medical
education and creating a reliable pipeline of newly
trained physicians and pharmacists to join our
Acute Care facilities’ local practices and affiliated
Accountable Care Organizations through resident
and fellow retention.

UHS Sponsored Programs
Between June 2018 and July 2022, the number of
UHS Sponsored Programs more than tripled, from
5 programs to 18. These programs are operating out
of Manatee Memorial Hospital, The Valley Health
System GME Consortium, UHS Southern California
Medical Education Consortium (UHS SoCal MEC),
Texoma Medical Center, and Wellington Regional
Medical Center. Active programs include residency
specialties in Emergency Medicine, Family Medicine,
General Surgery, Internal Medicine, Pharmacy and
Transitional Year.

We are continuing to develop programs and, by July
2024, expect to have 28 UHS Sponsored Programs
in place, including new programs at Aiken Regional
Medical Centers, The Valley Health System GME
Consortium and UHS SoCal MEC.

New programs will include residency specialties in
Psychiatry, Obstetrics/Gynecology and Neurology,
as well as fellowship programs in Cardiovascular
Disease, Critical Care, Gastroenterology, Pulmonary
and Sports Medicine.

As the number of UHS Sponsored Programs
increased and activated, and new programs matured,
the number of residents within UHS Sponsored
Programs increased. Between June 2018 and
January 2022, the total residents in UHS Sponsored
Programs nearly tripled from 89 to 262. By July 1,
2022, the number of residents in UHS Sponsored
Programs is expected to jump further to 315, and then
to nearly 500 within two years’ time.

Academic Partnership Programs
The UHS GME Program currently has 59 total
Academic Partnership Programs within our UHS
Acute facilities including The George Washington
University Hospital, Northwest Texas Healthcare
System, South Texas Health System and the Valley
Hospital Medical Center facilities.

Collectively, these facilities are currently training
approximately 637 total residents and fellows.

Looking ahead, we expect to have all UHS Programs
currently under development to receive their
ACGME accreditation by July 2024. By this point,
the UHS GME Program (including UHS Sponsored
Programs and Academic Partnership Programs)
expects to host 87 GME training programs with
nearly 1,140 GME residents and fellows across a
variety of specialties.

UHS’ investment
in Sponsored
Programs led
to a substantial
increase in number
of programs and
residents since 2018,
and a prediction
of double-digit
growth over the
next 2 years.

UHS Sponsored Programs

UHS Sponsored Programs’ Residents

499

315

June 2018

July 2022

July 2024
(projected)

June 2018

July 2022

July 2024
(projected)

Start Dates

2 0 2 1 A N N U A L R E P O R T 4 3

NURSING APPRENTICESHIPS/
INTERNSHIPS
A variety of programs and opportunities are offered
to help nurses learn, grow and advance in their
careers. Recently, Northwest Texas Healthcare
System formed a partnership with West Texas
A&M University to offer tuition reimbursement for
Northwest RNs interested in obtaining their Bachelor
of Science in Nursing degree through the university’s
“ADN to BSN” program. Northwest’s full-time RNs
with an Associate’s Degree in Nursing are qualiﬁed
to enroll in the 11-month online program.

Wellington Regional Medical Center worked
with Palm Beach State College to offer a nurse
apprenticeship class to nurses in their ﬁnal six weeks
of school. Through this program nurses are able to
complete their hospital onboarding and education
requirements at the same time they are completing
the apprenticeship.

Across the company, UHS also provides internships
to students at local education institutions, and its
employees frequently serve as guest lecturers at the
schools. In 2021, the UHS Corporate Office hired 30
interns for its Information Services and Supply Chain
departments. Among these interns, 43% were female
and 37% identiﬁed as diverse.

EMPLOYEE BENEFITS
UHS nurtures the personal, professional, and
ﬁnancial health and well-being of our team members
and their families through a diverse range of
beneﬁts. Healthcare beneﬁts include medical
insurance, dental and vision care coverage as well
as resources such as the Employee Assistance
Program (EAP) and Livongo to help enrollees
maintain a healthy quality of life. Further, UHS offers
accident, critical illness and pet insurance.

The EAP and other resources are available to
address the emotional needs of employees and their
loved ones, including access to telemedicine as well
as a new mobile app that offers access to self-help
mental health programs.

Further, our Financial Program allow employees to
effectively manage their investments by offering
competitive Savings, Retirement and Employee
Stock Purchase Plans, Health Savings Accounts,
Tuition Assistance and Student Loan Reﬁnancing

for qualiﬁed employees. Other offerings include
mortgage, home and auto insurance programs,
legal assistance and identity theft programs.

UHS offers an extensive program of voluntary
beneﬁts, discounts, promotions and resources aimed
to help employees balance personal, family and
work life. This includes access to Rethink, a free
research-based program that provides support to
parents raising children with learning or behavioral
challenges or developmental disabilities, Veteran
Connection, as well as COVID-19-speciﬁc information
and resources.

UHS Foundation for Employees

In 2005 we established the UHS
Foundation, a 501(c)(3) nonproﬁt
entity that provides assistance to
UHS employees who have been
affected by hardship due to natural
disasters such as hurricanes,
ﬁres and tornadoes, and more

recently, by a national public health pandemic. To
date, the UHS Foundation has disbursed nearly $3
million to employees needing assistance for living
expenses, including housing, utilities, clothing and
other necessities. In 2021, more than 50 employees
affected by severe winter storms in Texas, Hurricane
Ida and its remnants, or tornadoes in Kentucky were
provided assistance.

“Thanks a million times over!
Hurricane IDA was my first
hurricane and as frightening as
it was, I did not feel completely
alone. All the way from the CEO
and CNO, support was there. The
communication line was always
open. Now, this amazing financial
assistance from all of you. I have
never met many of the team
members in the UHS community
and knowing I have been in
the hearts of this UHS team is
overwhelming. Overwhelming in
an emotional, amazing, great way.
Thank you, really thank you.”

Christina Mohammed, RN, River Oaks Hospital

4 4 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

Cygnet

Multicultural

Network

Employee Engagement

In partnership with an independent outside vendor, UHS’ Corporate
Human Resources department deploys an Employment Engagement
Survey biannually, providing employees the opportunity to express their
opinions about the corporation and provide ideas on how to enhance their
work experience. A shorter 20-question Pulse Survey is sent out the years
when the full survey is not. Responses are confidential and reported as an
aggregate total by department, for each facility and Corporate. Managers
are encouraged to share the results with their team and work together to
address any lower-scoring areas through action planning.

Feedback from the surveys have led, for
example, to creation of TEAM C.A.R.E.,
an employee-run program that focuses
on Connecting, Attracting, Retaining and
Engaging employees. Its three committees
- Career Enrichment, Health & Wellness and
Social & Community – deliver programming,
content and events that enrich the overall UHS Corporate Office
employee experience.

To strategically influence
policy and procedures to reflect
issues faced by staff from ethnic
minority backgrounds

Share experiences
and provide a voice
for staff from ethnic

minorities

To identify and

raise the profile

of the unique

needs of staff from

ethnic minorities

In May 2021, TEAM C.A.R.E. established the virtual UHS Toastmasters
Club, offering skills development for public speaking, presentation
coaching and leadership skill development to voluntary members.

To ACT
on concerns
and effect
positive change

Aims of the
Multicultural Network

Other TEAM C.A.R.E. events offered throughout the year include UHS
Annual Golf Tournament, Executive Speaker Services, charity and social
events that support local communities and Veterans, and clubs and
activities to support mental and physical well-being, among others.

Facilities also host similar programs to engage the staff. Members of GW Hospital
Women’s Board, GWU’s Strategic Employee Engagement Council and other volunteers
help pass presents to patients during the holidays.

Search ‘Multicultural Network’ on MyCygnet for
more information and upcoming opportunities

Contact members of the Multicultural

Network Steering Group

MulticulturalNetwork@cygnethealth.co.uk

Cygnet

Multicultural

Network

It’s time to ACT
Acknowledge the Past
Change the Present
Transform the Future

Cygnet

In the U.K., as part of its Diversity and
Inclusion strategy, Cygnet established
Multicultural
the Cygnet Multicultural Network and
the LGBTQ+ Network. The Cygnet
Multicultural Network was established
to 1) identify and raise the profile of
the unique needs of staff from ethnic
minorities, 2) share experiences and
provide a voice for staff from ethnic

Network

minorities, 3) strategically influence policy and procedures to reflect issues faced
by staff from ethnic minority backgrounds and 4) ACT on concerns and effect
positive change.

The LGBTQ+ Network is committed to promoting change, reducing stigma,
discrimination and prejudice, and creating a safe space for LGBTQ+ colleagues to
connect and support each other. Learn more: cygnethealth.co.uk/about.

Share experiences
and provide a voice
for staff from ethnic

To strategically influence
policy and procedures to reflect
issues faced by staff from ethnic

minorities

minority backgrounds

2 0 2 1 A N N U A L R E P O R T 4 5
2 0 2 1 A N N U A L R E P O R T 4 5
Share experiences
and provide a voice
for staff from ethnic
minorities

To strategically influence

policy and procedures to reflect
issues faced by staff from ethnic

minority backgrounds

To identify and

raise the profile

of the unique

needs of staff from

ethnic minorities

To ACT

on concerns

To identify and

raise the profile

and effect

of the unique

positive change

needs of staff from

ethnic minorities

To ACT

on concerns

and effect

positive change

Aims of the

Multicultural Network

Search ‘Multicultural Network’ on MyCygnet for

more information and upcoming opportunities

Aims of the

Multicultural Network

Contact members of the Multicultural

Network Steering Group

MulticulturalNetwork@cygnethealth.co.uk

It’s time to ACT

Acknowledge the Past

Change the Present

Search ‘Multicultural Network’ on MyCygnet for

more information and upcoming opportunities

Transform the Future

Contact members of the Multicultural

Network Steering Group

MulticulturalNetwork@cygnethealth.co.uk

It’s time to ACT

Acknowledge the Past

Change the Present

Transform the Future

EMPLOYEE RECOGNITION/AWARDS
UHS recognizes the meaningful contributions our
Corporate and healthcare facility team members
make to the lives of patients, their families and
our communities through tributes, awards and
messaging from Corporate leadership.

Service Excellence
Each year UHS bestows multiple Service Excellence
Awards to recognize those employees and facilities
who provide world-class service — service that is
professional, timely, effective and efficient to all our
customers, at all times.

Corporate home
office employees
are also nominated
for this award;

up to three winners are selected by the Corporate
Senior Leadership team annually. At the facility level,
three Service Excellence Awards are presented at
the annual leadership conference to a deserving
Acute Care Division facility, Behavioral Health
Residential Treatment Center and Behavioral Health
acute psychiatric facility. To be considered, facilities
need to be approved by Behavioral Health and
Acute Care Division presidents and complete an
application. Winners are determined by Divisional
and Corporate senior leadership. Notably, in 2021
Corporate senior leadership awarded all UHS
facilities a Service Excellence Award as a gesture of
gratitude for their quality service in the year 2020
during the height of the pandemic.

Other Annual Performance Awards
• Chairman’s Council Award – presented to facility

CEOs who met or exceeded ﬁnancial goals,
satisfaction scores for physician, patients and
employees, community involvement and consistent
overall leadership.

• Quality Awards – presented to one facility in each

category (Acute Care, Behavioral Health Residential
Treatment Center and Behavioral Health Acute)
based on their performance, including quality and
safety ratings from industry (i.e., HCAHPS, Leapfrog,
CMS, The Joint Commission) and/or patients.

Corporate and Facility Service
Anniversaries
Each year, UHS recognizes Corporate employees’
milestone work anniversaries with a Service
Anniversary certiﬁcate and gift. Employees are
recognized after every ﬁve years of service as a
Corporate Home Office employee. Some UHS
facilities also offer Service Anniversary awards to
eligible facility employees. These award programs
are managed at the local facility level.

Facilities also regularly issue employee recognition
awards nominated by leadership or peers such as
“Non-Clinical or Clinical Employee of the Month,”
“Employee of the Year,” “Going the Extra Mile,”
“Operational Excellence, Quality or Service
Pillar Award,” “Leader of the Year” and “Growth
and Development Winner” to recognize
deserving colleagues.

At Acute Care facilities, DAISY Awards are
celebrated for those singled out by patients, visitors
or staff for their excellence in compassionate care
and dedication to our patients and their families.

Since late 2021, our Behavioral Health facilities in
the U.K. have been distributing Cygnet Nightingale
Awards to those nominated by their colleagues
for going above and beyond in their role, and
displaying excellence in the six Cs of nursing:
Care, Compassion, Competence, Communication,
Courage and Commitment.

Recharge Rooms
To show appreciation for their hardworking
staff, Behavioral Health facilities began creating
comfortable “Recharge” spaces, where staff can
enjoy quiet time to relax and rejuvenate. Employees
are encourged to be creative in designing the
space. Some include a Staff Lounge for coffee and
meals, as well as a Recharge Room equipped with a
massage chair, sound machine and books to read.

4 6 U N I V E R S A L H E A L T H S E R V I C E S , I N C .

River Crest Hospital’s staff Recharge
Room (San Antonio, TX) is a dedicated
space for our hardworking staff to rest,
relax and rejuvenate. Other Behavioral
Health facilities who have also already
embraced this feature include:

• Austin Lakes Hospital

• Cedar Creek Hospital

• The Meadows Psychiatric Center

• Palmetto Lowcountry Behavioral Health

• Windmoor Healthcare

PRIVACY & DATA SECURITY
At UHS, Privacy and Data Security is one of our
top priorities. The team’s Mission is to preserve the
conﬁdentiality, integrity and availability of information
assets in accordance with Information Security
Policies for employees and patients. A main focus
is to appropriately identify, select, deploy, maintain
and improve information security controls.

As previously disclosed, we experienced an
information technology security incident in
September 2020. As a result of this cyberattack,
we suspended user access to our information
technology applications related to operations
located in the United States. While our information
technology applications were offline, patient care
was delivered safely and effectively at our facilities
across the country utilizing established back-up
processes, including offline documentation methods.
We worked diligently with our information technology
security partners to restore our information
technology infrastructure and business operations
as quickly as possible. UHS has continued its efforts
to fortify its privacy and security measures with
considerable investment in personnel, products
and processes.

Brandi Wilhelm, Director of Business Development

Currently there are approximately 48 privacy and
security related policies at the Corporate level and
maintained locally by U.S. hospital business units.

We adhere to privacy and security policies, and the
several federal and state laws and other regulatory
requirements relating to data privacy and security,
including for example, the Health Insurance
Portability and Accountability Act of 1996 (HIPAA)
Security Rule and the Payment Card Industry (PCI)
requirements governing compliant technology and
processes of consumer credit card information.

UHS’ Privacy and Data Security team is led by a
Chief Compliance and Privacy Officer and a Chief
Information Security Officer, as well as designated
hospital-based facility Privacy Officers. Meanwhile,
third-party cybersecurity ﬁrms provide continual
monitoring and investigation services, including
regular security penetration tests and audits.

All staff complete required annual training on
data privacy and cybersecurity, accounting for an
investment of over 45,000 hours each year on this
important education.

2 0 2 1 A N N U A L R E P O R T 4 7

OUR GOVERNANCE
STRUCTURE

UHS’ Board of Directors is chaired by our founder,
Alan B. Miller. Of the seven-member board, four (57%) are
independent members, and two (29%) of which are women.

Each director has access to any member of
management of the Company. It is the policy of the
Board to encourage its members to contact the
CEO and other members of management of the
Company at any time to discuss any aspect of the
Company’s business. Members of the Board are also
encouraged to visit at least one of the Company’s
hospitals each year.

The Board has six committees:

• Audit Committee

• Compensation Committee

• Executive Committee

• Finance Committee

• Nominating and Governance Committee

• Quality and Compliance Committee

Please visit uhs.com for more information about
the charter of each of these committees.

BUSINESS ETHICS
The Board of Directors and senior management of
UHS are committed to healthcare operations that
are ethical and in compliance with all applicable
laws and regulations. UHS’ Chief Compliance
Officer oversees the UHS Compliance Program
and regularly reports on the company’s compliance
program operations to the Quality and Compliance
Committee of the Board of Directors and to the UHS
Compliance Committee. The committees review
reports and recommendations of the UHS Chief
Compliance Officer based upon data generated
through the UHS Compliance Program operations.

UHS maintains a compliance program that includes
appropriate policies and procedures consistent
with legal and regulatory requirements, compliance
education (including enterprise-wide compliance
training of all new employees as part of the
onboarding process), and its audit and monitoring
and disclosure programs.

UHS operates a Compliance Hotline as part of its Code of Conduct. To report an ethical dilemma
or potentially inappropriate or illegal conduct, individuals may call the Compliance Hotline
(toll free at 1-800-852-3449) or use Internet-based reporting at www.uhs.alertline.com

Learn more: uhs.com/compliance

4 8 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

We are committed to fostering a culture of
accountability at all levels and encourage our
employees to report anything they believe
could be out of compliance with our values. We
prohibit retaliation for the good faith reporting
of compliance concerns and offer the ability for
individuals to anonymously elevate any concerns.
Our commitment to fairness and integrity extends to
everyone with whom we interact and do business.

Our Code of Conduct provides guidance on
expectations for acceptable behavior for those who
work on behalf of UHS. It is intended to promote
honest and ethical conduct, deter wrongdoing and
ensure compliance with all applicable governmental
laws, rules and regulations, and prompt internal
reporting of violations and compliance concerns. Our
Compliance Manual serves as a resource of basic
healthcare compliance standards and overview of
the UHS Compliance Program. Further, our Code
of Business Conduct and Corporate Standards
provides standards of ethical business practices and
must be followed by all UHS personnel.

Learn more: uhs.com/compliance-and-ethics/uhs-
compliance-policies-procedures/

LOCAL GOVERNANCE
In addition to in-house Executive Leadership teams,
UHS’ Acute Care and Behavioral Health hospitals, as
well as our ambulatory surgery centers (ASCs), have
organized Medical Staff and local governing bodies
jointly overseeing patient care.

Facilities’ Boards of Directors have both ﬁnancial and
non-clinical operational decision-making authority
but delegate oversight of patient care and Medical
Staff governance to local governing bodies.

Local governing bodies for Acute Care Division
facilities typically include representation from local
community members, medical staff, and hospital
or regional leadership. Local governing bodies
for Behavioral Health Division facilities typically
include representation from the local facility, Division
leadership, and may include current or retired
medical staff.

In the U.K., our Cygnet facilities are governed by a
13-member Executive Management Board. In 2020,
Cygnet established a four-member Advisory Board
to provide independent scrutiny and strategic
insight to Cygnet’s experienced leadership team.
Approximately 46% and 25% of these respective
boards are female.

The Acute Care and Behavioral Health Divisions
each have their own Division Compliance
Officer, while each hospital has a designated
Facility Compliance Officer to oversee their local
compliance program and obligations of their
respective facilities.

As with their peers, UHS facilities receive regular
visits and inspections by state and federal regulatory
agencies. Each Division has its own Chief Medical
Officer and quality designees. Similar roles are
in place at the regional, and when appropriate,
individual facility level. To improve quality
management, leadership reviews and analyze
performance metrics each month. Best practices
are then shared throughout the company.

The Acute Care and Behavioral Health Quality
and Clinical teams actively promote a culture of
continuous quality improvement that incorporates
evidence-based best practices and clinical variation
reduction to optimize clinical services and ensure
the effective and efficient delivery of high-quality
medical care. In the Acute Care facilities, programs
such as the Zero Harm Patient Safety Campaign are
in place to reduce the number of hospital-acquired
conditions, healthcare associated infections and
patient mortality. Further, our Behavioral Health
Division continues its efforts to ensure that all of its
patients are treated in a safe environment focused
on trauma-informed principles of care.

2 0 2 1 A N N U A L R E P O R T 4 9

RISK MANAGEMENT MEASURES
Risk Management teams are in place for the
Acute Care and Behavioral Health Divisions.
Each has a Division Director, Senior and/or Regional
Managers, as well as Facility Risk Managers.
There are also dedicated Corporate Loss Control,
Claims, and Environmental Risk and Emergency
Management departments.

UHS’ robust Risk Management process includes
four key steps: Risk Identiﬁcation, Risk Analysis,
Risk Control and Risk Financing.

Risk Identiﬁcation’s primary purpose is the early
detection of adverse or unexpected patient
outcomes and hazards. To this end, UHS has
processes, systems, methods and tools in place to
promptly identify the organization’s risk exposure
to issues that may impact its Mission and Vision
of providing superior, quality healthcare services.
These tools include The Joint Commission’s Sentinel
Event Alerts and Failure Mode Effect Analysis as well
as internal safety processes (i.e., Incident reports,
Adverse drug reactions reporting, Discrepancy
reports, Executive and Unit Safety Huddles,
rounding, patient safety surveys, grievances and
complaints). Data is continually collected, analyzed
and benchmarked against previous time periods,
other UHS facilities as well as nationally available
benchmarks/data.

Risk Analysis provides the organization a clear
understanding of its risks and an opportunity to
provide company-wide corrective action, when
needed, to minimize risk across the organization,
and/or in the future. It involves continually
conducting thorough reviews of practices,
processes, projects and services, to recognize
and/or detect problems or potential problems
to minimize the potential loss.

Risk Control’s purpose is to have loss preventative
and control methods in place before an event
occurs. This requires teams to conduct assessments
of high-risk areas, new service lines, etc. and
proactively adapt processes/procedures, if needed.
One important risk control technique, claims
management, provides a systemized approach to
reducing the ﬁnancial loss and negative community
image in cases when preventative measures fail and
injury occurs. UHS’ robust claims handling process
is essential to maintaining the ﬁnancial assets of the
organization.

Lastly, Risk Financing is the methodology to ensure
that ﬁnancial resources are available to pay for
the cost associated with loss should risk control
techniques fail. UHS utilizes a risk management
program evaluation process to ensure its highly
effective program exists across all facilities.

UHS’ Acute Care and Behavioral Health Divisions
each have their own Patient Safety Organization
(PSO) which is registered with the federal
government, under the Agency for Healthcare
Research and Quality. These PSOs govern the
risk management process, and voluntarily report,
aggregate and analyze data in efforts to improve the
safety and quality of patient care.

UHS’ evaluation process includes interactions of
Corporate and Facility Administration, Patient Safety
Council, and Environmental Risk Management as
well as procedures and processes, such as Root

In 2021, one patient safety priority was to

utilize quantification of blood loss to drive

early intervention, and ultimately decrease

severe maternal morbidity related to obstetrical

hemorrhage. Across our 19 acute care facilities

offering obstetrics services, our utilization

of quantification of blood loss jumped nearly 5

percentage points to 92.3% by year end. In turn,

our overall hemorrhage rate improved from

7.23% to 6.39% during the same time period.

Annualizing the data, this translates to 263

fewer moms impacted by hemorrhages.

5 0 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

Cause Analysis (RCA), to identify and investigate
issues, analyze results, implement corrective action
(if needed), and educate key stakeholders to reduce
safety risk among patients and staff.

Within the Acute Care Division, a Corporate
Patient Safety Council (CPSC), comprised of its
facilities’ executive leadership team and their
respective regional vice presidents, establishes
speciﬁc patient safety priorities each year to further
identify ways to mitigate risk and reduce patient
harm. Data from these initiatives are shared with
the Board of Directors’ Quality and Compliance
Committee each quarter. UHS’ Behavioral Health
Division Senior Vice President and Chief Clinical
Officer also reviews patient safety data with this
Committee on a quarterly basis.

The Environmental Risk and Emergency
Management programs work to analyze and contain
risk and implement risk avoidance measures to
ensure a safe and secure working environment.
The foundation of the programs focuses around
the continuity model to mitigate, prepare, respond
and recover through events.

In 2021, 38 Behavioral Health facilities, 13 Acute
Care hospitals and seven FEDs received speciﬁc
training for Environmental Risk and Emergency
Management programs.

Also during the year, a new SharePoint site was
shared with all facilities to allow for continual
engagement with program resources and real time
updates to industry standards and best practices.
Facilities are also provided Emergency Management
playbooks on the topics of wildﬁre and winter storm to
augment the preparedness, response and recovery
capabilities of their programs.

INCIDENT COMMAND
In the event of an emergency, our Incident
Command team is activated. This includes
Environmental Risk and Emergency Management,
crisis experts, as well as subject matter experts
essential for that particular event, including Clinical
Operations, Human Resources, Supply Chain,
Information Security and Communications. For
example, at the start of COVID-19 in 2020, like
many other organizations, we activated our Incident
Command to direct the clinical guidance, protocols,
operational adjustments, supply chain, human
resources and communications necessary to equip
our facilities to pivot care delivery and meet evolving
needs as the pandemic expanded (and continues to
ebb and surge). Through this uniﬁed orchestration,
we quickly and effectively established and deployed
best practices, communicated directives, reduced
unwanted variation and escalated urgent issues.
In an effort to continuously improve, we learn
from each event and seek to drive more efficient
procedures, enhanced staff communication
and greater consistency.

One recent example of the

facilities’ level of emergency

preparedness is the December

30, 2021, evacuation of all

Centennial Peaks Hospital patients

and staff due to a fast-moving grass fire in the

Louisville, CO area. All 64 patients were safely

transferred by secure transportation to other

local behavioral health facilities, who were

ready to accept them. This contingency planning

allowed patients’ care, treatment and services to

continue with minimum disruption.

2 0 2 1 A N N U A L R E P O R T 5 1

EMPLOYEE SAFETY
Training programs and systems to encourage
workplace safety are a major focus in our
organization. To this end, UHS has an Employee
Safety Council chaired by the Corporate Director of
Environmental Risk and Emergency Management.

During 2021, our increased attention to workplace
safety has enabled us to continue our commitment
to keeping our employees and facilities safe during
the COVID-19 pandemic.

UHS has a Staff Safety subcommittee comprised
of members of Clinical, Loss Control, Risk, Human
Resources and Legal teams. The ﬁrst phase of one
of its latest initiatives concluded in June 2021. The 21
Behavioral Health facilities that participated had an
aggregate reduction in staff injuries from aggression
of 27% (exceeding the goal of 25%). Phase 2 of the
initiative was launched in the fourth quarter.

VENDOR ENROLLMENT
UHS uses VendorProof, a service that ensures
vendors of healthcare organizations meet federal
compliance requirements. Vendors provide key
information which ProviderTrust then uses to perform
required compliance screenings, supporting a safe
and efficient supply chain. All vendors that deliver
goods or services are required to participate in
the program.

As part of our Staff Safety
Initiative, Behavioral Health
facility staff have access to new
Workplace Violence Prevention
training and a new Employee
Assistance Program (EAP), as
well as monthly “Spotlight
on Safety” posters, clinical
newsletters and virtual forums.
The new toolkit, “We Care:
Supporting Injured Employees,”
was also deployed across the
Division, providing support
and resources for employees
injured at work.

5 2 U N I V E R S A L H E A LT H S E R V I C E S , I N C .

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(MARK ONE)

☒

☐

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File No. 1-10765

UNIVERSAL HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

UNIVERSAL CORPORATE CENTER
367 South Gulph Road
P.O. Box 61558
King of Prussia, Pennsylvania
(Address of principal executive offices)

23-2077891
(I.R.S. Employer
Identification Number)

19406-0958
(Zip Code)

Registrant’s telephone number, including area code: (610) 768-3300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class B Common Stock, $0.01 par value

UHS

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
Class D Common Stock, $.01 par value
(Title of each Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.

Large accelerated filer

Non-accelerated filer

☒

☐

Accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of voting stock held by non-affiliates at June 30, 2021 was $10.8 billion. (For the purpose of this calculation, it was assumed that Class A,
Class C, and Class D Common Stock, which are not traded but are convertible share-for-share into Class B Common Stock, have the same market value as Class B
Common Stock. Also, for purposes of this calculation only, all directors are deemed to be affiliates.)
The number of shares of the registrant’s Class A Common Stock, $.01 par value, Class B Common Stock, $.01 par value, Class C Common Stock, $.01 par value, and
Class D Common Stock, $.01 par value, outstanding as of January 31, 2022, were 6,577,100; 67,552,047; 661,688 and 14,625, respectively.

DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant’s definitive proxy statement for our 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission
within 120 days after December 31, 2021 (incorporated by reference under Part III).

Business

Item 1
Item 1A Risk Factors
Item 1B Unresolved Staff Comments
Item 2
Item 3
Item 4

Properties
Legal Proceedings
Mine Safety Disclosure

UNIVERSAL HEALTH SERVICES, INC.
2021 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

PART I

PART II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
[RESERVED]
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 5
Item 6
Item 7
Item 7A Quantitative and Qualitative Disclosures About Market Risk
Item 8
Item 9
Item 9A Controls and Procedures
Item 9B Other Information
Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

PART III
Item 10 Directors, Executive Officers and Corporate Governance
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13 Certain Relationships and Related Transactions, and Director Independence
Item 14 Principal Accountant Fees and Services

Item 15 Exhibits and Financial Statement Schedules
Item 16 Form 10-K Summary

PART IV

SIGNATURES

1
12
26
26
36
36

37
38
39
74
75
75
75
76
76

77
77
77
77
77

78
84

This Annual Report on Form 10-K is for the year ended December 31, 2021. This Annual Report modifies and supersedes

documents filed prior to this Annual Report. Information that we file with the Securities and Exchange Commission (the “SEC”) in
the future will automatically update and supersede information contained in this Annual Report.

In this Annual Report, “we,” “us,” “our” “UHS” and the “Company” refer to Universal Health Services, Inc. and its

subsidiaries. UHS is a registered trademark of UHS of Delaware, Inc., the management company for, and a wholly-owned subsidiary
of Universal Health Services, Inc. Universal Health Services, Inc. is a holding company and operates through its subsidiaries including
its management company, UHS of Delaware, Inc. All healthcare and management operations are conducted by subsidiaries of
Universal Health Services, Inc. To the extent any reference to “UHS” or “UHS facilities” in this report including letters, narratives or
other forms contained herein relates to our healthcare or management operations it is referring to Universal Health Services, Inc.’s
subsidiaries including UHS of Delaware, Inc. Further, the terms “we,” “us,” “our” or the “Company” in such context similarly refer to
the operations of Universal Health Services Inc.’s subsidiaries including UHS of Delaware, Inc. Any reference to employees or
employment contained herein refers to employment with or employees of the subsidiaries of Universal Health Services, Inc. including
UHS of Delaware, Inc.

PART I

ITEM 1.

Business

Our principal business is owning and operating, through our subsidiaries, acute care hospitals and outpatient facilities and

behavioral health care facilities.

As of February 24, 2022, we owned and/or operated 363 inpatient facilities and 40 outpatient and other facilities including the

following located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico:

Acute care facilities located in the U.S.:






28 inpatient acute care hospitals (including a newly constructed, 170-bed hospital located in Reno, Nevada, that is
scheduled to be completed and opened during the first quarter of 2022);
19 free-standing emergency departments, and;
6 outpatient centers & 1 surgical hospital.

Behavioral health care facilities (335 inpatient facilities and 14 outpatient facilities):

Located in the U.S.:




187 inpatient behavioral health care facilities, and;
12 outpatient behavioral health care facilities.

Located in the U.K.:




145 inpatient behavioral health care facilities, and;
2 outpatient behavioral health care facilities.

Located in Puerto Rico:



3 inpatient behavioral health care facilities.

Net revenues from our acute care hospitals, outpatient facilities and commercial health insurer accounted for 56% of our
consolidated net revenues during 2021 and 55% during 2020. Net revenues from our behavioral health care facilities and commercial
health insurer accounted for 44% of our consolidated net revenues during 2021 and 45% during 2020.

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $688 million in 2021 and $584
million in 2020. Total assets at our U.K. behavioral health care facilities were approximately $1.351 billion as of December 31, 2021
and $1.334 billion as of December 31, 2020.

Services provided by our hospitals include general and specialty surgery, internal medicine, obstetrics, emergency room care,

radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services and/or behavioral health services. We
provide capital resources as well as a variety of management services to our facilities, including central purchasing, information
services, finance and control systems, facilities planning, physician recruitment services, administrative personnel management,
marketing and public relations.

Available Information

We are a Delaware corporation that was organized in 1979. Our principal executive offices are located at Universal Corporate

Center, 367 South Gulph Road, P.O. Box 61558, King of Prussia, PA 19406. Our telephone number is (610) 768-3300.

Our website is located at http://www.uhsinc.com. Copies of our annual, quarterly and current reports that we file with the SEC,

and any amendments to those reports, are available free of charge on our website. Our filings are also available to the public at the
website maintained by the SEC, www.sec.gov. The information posted on our website is not incorporated into this Annual Report. Our
Board of Directors’ committee charters (Audit Committee, Compensation Committee, Nominating & Governance Committee and
Quality and Compliance Committee), Code of Business Conduct and Corporate Standards applicable to all employees, Code of Ethics
for Senior Financial Officers, Corporate Governance Guidelines and our Code of Conduct, Corporate Compliance Manual and
Compliance Policies and Procedures are available free of charge on our website. Copies of such reports and charters are available in
print to any stockholder who makes a request. Such requests should be made to our Secretary at our King of Prussia, PA corporate
headquarters. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers of
any provision of our Code of Ethics for Senior Financial Officers by promptly posting this information on our website.

In accordance with Section 303A.12(a) of the New York Stock Exchange Listed Company Manual, we submitted our CEO’s
certification to the New York Stock Exchange in 2021. Additionally, contained in Exhibits 31.1 and 31.2 of this Annual Report on

Form 10-K, are our CEO’s and CFO’s certifications regarding the quality of our public disclosures under Section 302 of the Sarbanes-
Oxley Act of 2002.

Our Mission

Our company mission is:

To provide superior quality healthcare services that

PATIENTS recommend to families and friends,

PHYSICIANS prefer for their patients,

PURCHASERS select for their clients,

EMPLOYEES are proud of, and

INVESTORS seek for long-term returns.

To achieve this, we have a commitment to:



service excellence

continuous improvement in measurable ways

employee development

ethical and fair treatment of all

teamwork

compassion

innovation in service delivery

Business Strategy

We believe community-based hospitals will remain the focal point of the healthcare delivery network and we are committed to a

philosophy of self-determination for both the company and our hospitals.

Acquisition of Additional Hospitals. We selectively seek opportunities to expand our base of operations by acquiring,
constructing or leasing additional hospital facilities. We are committed to a program of rational growth around our core businesses,
while retaining the missions of the hospitals we manage and the communities we serve. Such expansion may provide us with access to
new markets and new healthcare delivery capabilities. We also continue to examine our facilities and consider divestiture of those
facilities that we believe do not have the potential to contribute to our growth or operating strategy. In recent years our behavioral
health services segment has been focused on efforts to partner with non-UHS acute care hospitals to help operate their behavioral
health services. These arrangements include hospital purchases, leased beds and joint venture operating agreements.

Improvement of Operations of Existing Hospitals and Services. We also seek to increase the operating revenues and
profitability of owned hospitals by the introduction of new services, improvement of existing services, physician recruitment and the
application of financial and operational controls.

We are involved in continual development activities for the benefit of our existing facilities. From time-to-time applications are
filed with state health planning agencies to add new services in existing hospitals in states which require certificates of need, or CONs.
Although we expect that some of these applications will result in the addition of new facilities or services to our operations, no
assurances can be made for ultimate success by us in these efforts.

Quality and Efficiency of Services. Pressures to contain healthcare costs and technological developments allowing more

procedures to be performed on an outpatient basis have led payers to demand a shift to ambulatory or outpatient care wherever
possible. We are responding to this trend by emphasizing the expansion of outpatient services. In addition, in response to cost
containment pressures, we continue to implement programs at our facilities designed to improve financial performance and efficiency
while continuing to provide quality care, including more efficient use of professional and paraprofessional staff, monitoring and
adjusting staffing levels and equipment usage, improving patient management and reporting procedures and implementing more
efficient billing and collection procedures. In addition, we will continue to emphasize innovation in our response to the rapid changes
in regulatory trends and market conditions while fulfilling our commitment to patients, physicians, employees, communities and our
stockholders.

In addition, our aggressive recruiting of highly qualified physicians and developing provider networks help to establish our

facilities as an important source of quality healthcare in their respective communities.

Hospital Utilization

We believe that the most important factors relating to the overall utilization of a hospital include the quality and market position

of the hospital and the number, quality and specialties of physicians providing patient care within the facility. Generally, we believe
that the ability of a hospital to meet the health care needs of its community is determined by its breadth of services, level of
technology, emphasis on quality of care and convenience for patients and physicians. Other factors that affect utilization include
general and local economic conditions, market penetration of managed care programs, the degree of outpatient use, the availability of
reimbursement programs such as Medicare and Medicaid, and demographic changes such as the growth in local populations.
Utilization across the industry also is being affected by improvements in clinical practice, medical technology and pharmacology.
Current industry trends in utilization and occupancy have been significantly affected by changes in reimbursement policies of third
party payers. We are also unable to predict the extent to which these industry trends will continue or accelerate. In addition, our acute
care services business is typically subject to certain seasonal fluctuations, such as higher patient volumes and net patient service
revenues in the first and fourth quarters of the year.

Sources of Revenue

We receive payments for services rendered from private insurers, including managed care plans, the federal government under

the Medicare program, state governments under their respective Medicaid programs and directly from patients. See Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Sources of Revenue for additional
disclosure. Other information related to our revenues, income and other operating information for each reporting segment of our
business is provided in Note 12 to our Consolidated Financial Statements, Segment Reporting.

Regulation and Other Factors

Overview: The healthcare industry is subject to numerous laws, regulations and rules including, among others, those related to

government healthcare participation requirements, various licensure and accreditations, reimbursement for patient services, health
information privacy and security rules, and Medicare and Medicaid fraud and abuse provisions (including, but not limited to, federal
statutes and regulations prohibiting kickbacks and other illegal inducements to potential referral sources, false claims submitted to
federal or state health care programs and self-referrals by physicians). Providers that are found to have violated any of these laws and
regulations may be excluded from participating in government healthcare programs, subjected to significant fines or penalties and/or
required to repay amounts received from the government for previously billed patient services. Although we believe our policies,
procedures and practices comply with governmental regulations, no assurance can be given that we will not be subjected to additional
governmental inquiries or actions, or that we would not be faced with sanctions, fines or penalties if so subjected. Even if we were to
ultimately prevail, a significant governmental inquiry or action under one of the above laws, regulations or rules could have a material
adverse impact on us.

Licensing, Certification and Accreditation: All of our U.S. hospitals are subject to compliance with various federal, state and

local statutes and regulations in the U.S. and receive periodic inspection by state licensing agencies to review standards of medical
care, equipment and cleanliness. Our hospitals must also comply with the conditions of participation and licensing requirements of
federal, state and local health agencies, as well as the requirements of municipal building codes, health codes and local fire
departments. Various other licenses and permits are also required in order to dispense narcotics, operate pharmacies, handle
radioactive materials and operate certain equipment. Our facilities in the United Kingdom are also subject to various laws and
regulations.

All of our eligible hospitals have been accredited by The Joint Commission. All of our acute care hospitals and most of our

behavioral health centers in the U.S. are certified as providers of Medicare and Medicaid services by the appropriate governmental
authorities.

If any of our facilities were to lose its Joint Commission accreditation or otherwise lose its certification under the Medicare and
Medicaid programs, the facility may be unable to receive reimbursement from the Medicare and Medicaid programs and other payers.
We believe our facilities are in substantial compliance with current applicable federal, state, local and independent review body
regulations and standards. The requirements for licensure, certification and accreditation are subject to change and, in order to remain
qualified, it may become necessary for us to make changes in our facilities, equipment, personnel and services in the future, which
could have a material adverse impact on operations.

Certificates of Need: Many of the states in which we operate hospitals have enacted certificates of need (“CON”) laws as a

condition prior to hospital capital expenditures, construction, expansion, modernization or initiation of major new services. Failure to
obtain necessary state approval can result in our inability to complete an acquisition, expansion or replacement, the imposition of civil
or, in some cases, criminal sanctions, the inability to receive Medicare or Medicaid reimbursement or the revocation of a facility’s
license, which could harm our business. In addition, significant CON reforms have been proposed in a number of states that would
increase the capital spending thresholds and provide exemptions of various services from review requirements. In the past, we have

not experienced any material adverse effects from those requirements, but we cannot predict the impact of these changes upon our
operations.

Conversion Legislation: Many states have enacted or are considering enacting laws affecting the conversion or sale of not-for-
profit hospitals to for-profit entities. These laws generally require prior approval from the attorney general, advance notification and
community involvement. In addition, attorneys general in states without specific conversion legislation may exercise discretionary
authority over these transactions. Although the level of government involvement varies from state to state, the trend is to provide for
increased governmental review and, in some cases, approval of a transaction in which a not-for-profit entity sells a health care facility
to a for-profit entity. The adoption of new or expanded conversion legislation and the increased review of not-for-profit hospital
conversions may limit our ability to grow through acquisitions of not-for-profit hospitals.

Utilization Review: Federal regulations require that admissions and utilization of facilities by Medicare and Medicaid patients

must be reviewed in order to ensure efficient utilization of facilities and services. The law and regulations require Peer Review
Organizations (“PROs”) to review the appropriateness of Medicare and Medicaid patient admissions and discharges, the quality of
care provided, the validity of diagnosis related group (“DRG”) classifications and the appropriateness of cases of extraordinary length
of stay. PROs may deny payment for services provided, assess fines and also have the authority to recommend to the Department of
Health and Human Services (“HHS”) that a provider that is in substantial non-compliance with the standards of the PRO be excluded
from participating in the Medicare program. We have contracted with PROs in each state where we do business to perform the
required reviews.

Audits: Most hospitals are subject to federal audits to validate the accuracy of Medicare and Medicaid program submitted
claims. If these audits identify overpayments, we could be required to pay a substantial rebate of prior years’ payments subject to
various administrative appeal rights. The federal government contracts with third-party “recovery audit contractors” (“RACs”) and
“Medicaid integrity contractors” (“MICs”), on a contingent fee basis, to audit the propriety of payments to Medicare and Medicaid
providers. Similarly, Medicare zone program integrity contractors (“ZPICs”) target claims for potential fraud and abuse. Additionally,
Medicare administrative contractors (“MACs”) must ensure they pay the right amount for covered and correctly coded services
rendered to eligible beneficiaries by legitimate providers. The Centers for Medicare and Medicaid Services (“CMS”) announced its
intent to consolidate many of these Medicare and Medicaid program integrity functions into new unified program integrity contractors
(“UPICs”), though it remains unclear what effect, if any, this consolidation may have. We have undergone claims audits related to our
receipt of federal healthcare payments during the last three years, the results of which have not required material adjustments to our
consolidated results of operations. However, potential liability from future federal or state audits could ultimately exceed established
reserves, and any excess could potentially be substantial. Further, Medicare and Medicaid regulations also provide for withholding
Medicare and Medicaid overpayments in certain circumstances, which could adversely affect our cash flow.

Self-Referral and Anti-Kickback Legislation

The Stark Law: The Social Security Act includes a provision commonly known as the “Stark Law.” This law prohibits
physicians from referring Medicare and Medicaid patients to entities with which they or any of their immediate family members have
a financial relationship, unless an exception is met. These types of referrals are known as “self-referrals.” Sanctions for violating the
Stark Law include civil penalties up to $26,125 for each violation, and up to $174,172 for sham arrangements. There are a number of
exceptions to the self-referral prohibition, including an exception for a physician’s ownership interest in an entire hospital as opposed
to an ownership interest in a hospital department unit, service or subpart. However, federal laws and regulations now limit the ability
of hospitals relying on this exception to expand aggregate physician ownership interest or to expand certain hospital facilities. This
regulation also places a number of compliance requirements on physician-owned hospitals related to reporting of ownership interest.
There are also exceptions for many of the customary financial arrangements between physicians and providers, including employment
contracts, leases and recruitment agreements that adhere to certain enumerated requirements. CMS issued a final rule in 2020 that
created a new Stark exception for value-based models. Although the final regulations provide exceptions to the Stark Law, there may
remain regulatory risks for participating hospitals, as well as financial and operational risks.

We monitor all aspects of our business and have developed a comprehensive ethics and compliance program that is designed to

meet or exceed applicable federal guidelines and industry standards. Nonetheless, because the law in this area is complex and
constantly evolving, there can be no assurance that federal regulatory authorities will not determine that any of our arrangements with
physicians violate the Stark Law.

Anti-kickback Statute: A provision of the Social Security Act known as the “anti-kickback statute” prohibits healthcare

providers and others from directly or indirectly soliciting, receiving, offering or paying money or other remuneration to other
individuals and entities in return for using, referring, ordering, recommending or arranging for such referrals or orders of services or
other items covered by a federal or state health care program. However, changes to the anti-kickback statute have reduced the intent
required for violation; one is no longer required to have actual knowledge or specific intent to commit a violation of the anti-kickback
statute in order to be found in violation of such law.

The anti-kickback statute contains certain exceptions, and the Office of the Inspector General of the Department of Health and

Human Services (“OIG”) has issued regulations that provide for “safe harbors,” from the federal anti-kickback statute for various
activities. These activities, which must meet certain requirements, include (but are not limited to) the following: investment interests,

space rental, equipment rental, practitioner recruitment, personnel services and management contracts, sale of practice, referral
services, warranties, discounts, employees, group purchasing organizations, waiver of beneficiary coinsurance and deductible
amounts, managed care arrangements, obstetrical malpractice insurance subsidies, investments in group practices, freestanding
surgery centers, donation of technology for electronic health records and referral agreements for specialty services. In 2020, the OIG
issued a final rule that established an anti-kickback statute safe harbor for value based models. Although the final regulations provide
safe harbors, there may remain regulatory risks for participating hospitals, as well as financial and operational risks. The fact that
conduct or a business arrangement does not fall within a safe harbor or exception does not automatically render the conduct or
business arrangement illegal under the anti-kickback statute. However, such conduct and business arrangements may lead to increased
scrutiny by government enforcement authorities.

Although we believe that our arrangements with physicians and other referral sources have been structured to comply with
current law and available interpretations, there can be no assurance that all arrangements comply with an available safe harbor or that
regulatory authorities enforcing these laws will determine these financial arrangements do not violate the anti-kickback statute or other
applicable laws. Violations of the anti-kickback statute may be punished by a criminal fine of up to $100,000 for each violation or
imprisonment, however, under 18 U.S.C. Section 3571, this fine may be increased to $250,000 for individuals and $500,000 for
organizations. Civil money penalties may include fines of up to $105,563 per violation and damages of up to three times the total
amount of the remuneration and/or exclusion from participation in Medicare and Medicaid.

Similar State Laws: Many of the states in which we operate have adopted laws that prohibit payments to physicians in

exchange for referrals similar to the anti-kickback statute and the Stark Law, some of which apply regardless of the source of payment
for care. These statutes typically provide criminal and civil penalties as well as loss of licensure. In many instances, the state statutes
provide that any arrangement falling in a federal safe harbor will be immune from scrutiny under the state statutes. However, in most
cases, little precedent exists for the interpretation or enforcement of these state laws.

These laws and regulations are extremely complex and, in many cases, we don’t have the benefit of regulatory or judicial
interpretation. It is possible that different interpretations or enforcement of these laws and regulations could subject our current or past
practices to allegations of impropriety or illegality or could require us to make changes in our facilities, equipment, personnel,
services, capital expenditure programs and operating expenses. A determination that we have violated one or more of these laws, or
the public announcement that we are being investigated for possible violations of one or more of these laws (see Item 3. Legal
Proceedings), could have a material adverse effect on our business, financial condition or results of operations and our business
reputation could suffer significantly. In addition, we cannot predict whether other legislation or regulations at the federal or state level
will be adopted, what form such legislation or regulations may take or what their impact on us may be.

If we are deemed to have failed to comply with the anti-kickback statute, the Stark Law or other applicable laws and regulations,

we could be subjected to liabilities, including criminal penalties, civil penalties (including the loss of our licenses to operate one or
more facilities), and exclusion of one or more facilities from participation in the Medicare, Medicaid and other federal and state health
care programs. The imposition of such penalties could have a material adverse effect on our business, financial condition or results of
operations.

Federal False Claims Act and Similar State Regulations: A current trend affecting the health care industry is the increased

use of the federal False Claims Act, and, in particular, actions being brought by individuals on the government’s behalf under the
False Claims Act’s qui tam, or whistleblower, provisions. Whistleblower provisions allow private individuals to bring actions on
behalf of the government by alleging that the defendant has defrauded the Federal government.

When a defendant is determined by a court of law to have violated the False Claims Act, the defendant may be liable for up to
three times the actual damages sustained by the government, plus mandatory civil penalties of between $12,537 to $25,076 for each
separate false claim. There are many potential bases for liability under the False Claims Act. Liability often arises when an entity
knowingly submits a false claim for reimbursement to the federal government. The Fraud Enforcement and Recovery Act of 2009
(“FERA”) amended and expanded the number of actions for which liability may attach under the False Claims Act, eliminating
requirements that false claims be presented to federal officials or directly involve federal funds. FERA also clarifies that a false claim
violation occurs upon the knowing retention, as well as the receipt, of overpayments. In addition, recent changes to the anti-kickback
statute have made violations of that law punishable under the civil False Claims Act. Further, a number of states have adopted their
own false claims provisions as well as their own whistleblower provisions whereby a private party may file a civil lawsuit on behalf of
the state in state court. The False Claims Act require that federal healthcare program overpayments be returned within 60 days from
the date the overpayment was identified, or by the date any corresponding cost report was due, whichever is later. Failure to return an
overpayment within this period may result in additional civil False Claims Act liability.

Other Fraud and Abuse Provisions: The Social Security Act also imposes criminal and civil penalties for submitting false
claims to Medicare and Medicaid. False claims include, but are not limited to, billing for services not rendered, billing for services
without prescribed documentation, misrepresenting actual services rendered in order to obtain higher reimbursement and cost report
fraud. Like the anti-kickback statute, these provisions are very broad.

Further, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) broadened the scope of the fraud and abuse

laws by adding several criminal provisions for health care fraud offenses that apply to all health benefit programs, whether or not
payments under such programs are paid pursuant to federal programs. HIPAA also introduced enforcement mechanisms to prevent

fraud and abuse in Medicare. There are civil penalties for prohibited conduct, including, but not limited to billing for medically
unnecessary products or services.

HIPAA Administrative Simplification and Privacy Requirements: The administrative simplification provisions of HIPAA,

as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), require the use of uniform
electronic data transmission standards for health care claims and payment transactions submitted or received electronically. These
provisions are intended to encourage electronic commerce in the health care industry. HIPAA also established federal rules protecting
the privacy and security of personal health information. The privacy and security regulations address the use and disclosure of
individual health care information and the rights of patients to understand and control how such information is used and disclosed.
Violations of HIPAA can result in both criminal and civil fines and penalties.

We believe that we are in material compliance with the privacy regulations of HIPAA, as we continue to develop training and

revise procedures to address ongoing compliance. The HIPAA security regulations require health care providers to implement
administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of patient information.
HITECH has since strengthened certain HIPAA rules regarding the use and disclosure of protected health information, extended
certain HIPAA provisions to business associates, and created new security breach notification requirements. HITECH has also
extended the ability to impose civil money penalties on providers not knowing that a HIPAA violation has occurred. We believe that
we have been in substantial compliance with HIPAA and HITECH requirements to date. Recent changes to the HIPAA regulations
may result in greater compliance requirements for healthcare providers, including expanded obligations to report breaches of
unsecured patient data, as well as create new liabilities for the actions of parties acting as business associates on our behalf.

Red Flags Rule: In addition, the Federal Trade Commission (“FTC”) Red Flags Rule requires financial institutions and

businesses maintaining accounts to address the risk of identity theft. The Red Flag Program Clarification Act of 2010, signed on
December 18, 2010, appears to exclude certain healthcare providers from the Red Flags Rule, but permits the FTC or relevant
agencies to designate additional creditors subject to the Red Flags Rule through future rulemaking if the agencies determine that the
person in question maintains accounts subject to foreseeable risk of identity theft. Compliance with any such future rulemaking may
require additional expenditures in the future.

Patient Safety and Quality Improvement Act of 2005: On July 29, 2005, the Patient Safety and Quality Improvement Act of

2005 was enacted, which has the goal of reducing medical errors and increasing patient safety. This legislation establishes a
confidential reporting structure in which providers can voluntarily report “Patient Safety Work Product” (“PSWP”) to “Patient Safety
Organizations” (“PSOs”). Under the system, PSWP is made privileged, confidential and legally protected from disclosure. PSWP does
not include medical, discharge or billing records or any other original patient or provider records but does include information
gathered specifically in connection with the reporting of medical errors and improving patient safety. This legislation does not
preempt state or federal mandatory disclosure laws concerning information that does not constitute PSWP. PSOs are certified by the
Secretary of the HHS for three-year periods and analyze PSWP, provide feedback to providers and may report non-identifiable PSWP
to a database. In addition, PSOs are expected to generate patient safety improvement strategies.

Environmental Regulations: Our healthcare operations generate medical waste that must be disposed of in compliance with
federal, state and local environmental laws, rules and regulations. Infectious waste generators, including hospitals, face substantial
penalties for improper disposal of medical waste, including civil penalties of up to $25,000 per day of noncompliance, criminal
penalties of up to $50,000 per day, imprisonment, and remedial costs. In addition, our operations, as well as our purchases and sales of
facilities are subject to various other environmental laws, rules and regulations. We believe that our disposal of such wastes is in
material compliance with all state and federal laws.

Corporate Practice of Medicine: Several states, including Florida, Nevada, California and Texas, have laws and/or regulations

that prohibit corporations and other entities from employing physicians and practicing medicine for a profit or that prohibit certain
direct and indirect payments or fee-splitting arrangements between health care providers that are designed to induce or encourage the
referral of patients to, or the recommendation of, particular providers for medical products and services. Possible sanctions for
violation of these restrictions include loss of license and civil and criminal penalties. In addition, agreements between the corporation
and the physician may be considered void and unenforceable. These statutes and/or regulations vary from state to state, are often
vague and have seldom been interpreted by the courts or regulatory agencies. We do not expect these state corporate practice of
medicine proscriptions to significantly affect our operations. Many states have laws and regulations which prohibit payments for
referral of patients and fee-splitting with physicians. We do not make any such payments or have any such arrangements.

EMTALA: All of our hospitals are subject to the Emergency Medical Treatment and Active Labor Act (“EMTALA”). This

federal law generally requires hospitals with an emergency department that are certified providers under Medicare to conduct a
medical screening examination of every person who visits the hospital’s emergency room for treatment and, if the patient is suffering
from a medical emergency, to either stabilize the patient’s condition or transfer the patient to a facility that can better handle the
condition. Our obligation to screen and stabilize emergency medical conditions exists regardless of a patient’s ability to pay for
treatment. There are severe penalties under EMTALA if a hospital fails to screen or appropriately stabilize or transfer a patient or if
the hospital delays appropriate treatment in order to first inquire about the patient’s ability to pay. Penalties for violations of
EMTALA include civil monetary penalties and exclusion from participation in the Medicare program. In addition to any liabilities that
a hospital may incur under EMTALA, an injured patient, the patient’s family or a medical facility that suffers a financial loss as a

direct result of another hospital’s violation of the law can bring a civil suit against the hospital unrelated to the rights granted under
that statute.

The federal government broadly interprets EMTALA to cover situations in which patients do not actually present to a hospital’s
emergency room, but present for emergency examination or treatment to the hospital’s campus, generally, or to a hospital-based clinic
that treats emergency medical conditions or are transported in a hospital-owned ambulance, subject to certain exceptions. EMTALA
does not generally apply to patients admitted for inpatient services; however, CMS has sought industry comments on the potential
applicability of EMTALA to hospital inpatients and the responsibilities of hospitals with specialized capabilities, respectively. CMS
has not yet issued regulations or guidance in response to that request for comments. The government also has expressed its intent to
investigate and enforce EMTALA violations actively in the future. We believe that we operate in substantial compliance with
EMTALA.

Health Care Industry Investigations: We are subject to claims and suits in the ordinary course of business, including those

arising from care and treatment afforded by our hospitals and are party to various government investigations and litigation. Please see
Item 3. Legal Proceedings included herein for additional disclosure. In addition, currently, and from time to time, some of our
facilities are subjected to inquiries and/or actions and receive notices of potential non-compliance of laws and regulations from various
federal and state agencies. Providers that are found to have violated these laws and regulations may be excluded from participating in
government healthcare programs, subjected to potential licensure, certification, and/or accreditation revocation, subjected to fines or
penalties or required to repay amounts received from the government for previously billed patient services.

We monitor all aspects of our business and have developed a comprehensive ethics and compliance program that is designed to
meet or exceed applicable federal guidelines and industry standards. Because the law in this area is complex and constantly evolving,
governmental investigation or litigation may result in interpretations that are inconsistent with industry practices, including ours.
Although we believe our policies, procedures and practices comply with governmental regulations, no assurance can be given that we
will not be subjected to inquiries or actions, or that we will not be faced with sanctions, fines or penalties in connection with the
investigations. Even if we were to ultimately prevail, the government’s inquiry and/or action in connection with these matters could
have a material adverse effect on our future operating results.

Our substantial Medicare, Medicaid and other governmental billings may result in heightened scrutiny of our operations. It is

possible that governmental entities could initiate additional investigations or litigation in the future and that such matters could result
in significant penalties as well as adverse publicity. It is also possible that our executives and/or managers could be included as targets
or witnesses in governmental investigations or litigation and/or named as defendants in private litigation.

Revenue Rulings 98-15 and 2004-51: In March 1998 and May 2004, the IRS issued guidance regarding the tax consequences

of joint ventures between for-profit and not-for-profit hospitals. As a result of the tax rulings, the IRS has proposed, and may in the
future propose, to revoke the tax-exempt or public charity status of certain not-for-profit entities which participate in such joint
ventures or to treat joint venture income as unrelated business taxable income to them. The tax rulings have limited development of
joint ventures and any adverse determination by the IRS or the courts regarding the tax-exempt or public charity status of a not-for-
profit partner or the characterization of joint venture income as unrelated business taxable income could further limit joint venture
development with not-for-profit hospitals, and/or require the restructuring of certain existing joint ventures with not-for-profits.

State Rate Review: Some states where we operate hospitals have adopted legislation mandating rate or budget review for
hospitals or have adopted taxes on hospital revenues, assessments or licensure fees to fund indigent health care within the state. In the
aggregate, state rate reviews and indigent tax provisions have not materially, adversely affected our results of operations.

Medical Malpractice Tort Law Reform: Medical malpractice tort law has historically been maintained at the state level. All
states have laws governing medical liability lawsuits. Over half of the states have limits on damages awards. Almost all states have
eliminated joint and several liability in malpractice lawsuits, and many states have established limits on attorney fees. Many states had
bills introduced in their legislative sessions to address medical malpractice tort reform. Proposed solutions include enacting limits on
non-economic damages, malpractice insurance reform, and gathering lawsuit claims data from malpractice insurance companies and
the courts for the purpose of assessing the connection between malpractice settlements and premium rates. Reform legislation has also
been proposed, but not adopted, at the federal level that could preempt additional state legislation in this area.

Compliance Program: Our company-wide compliance program has been in place since 1998. Currently, the program’s
elements include a Code of Conduct, risk area specific policies and procedures, employee education and training, an internal system
for reporting concerns, auditing and monitoring programs, and a means for enforcing the program’s policies.

Since its initial adoption, the compliance program continues to be expanded and developed to meet the industry’s expectations

and our needs. Specific written policies, procedures, training and educational materials and programs, as well as auditing and
monitoring activities have been prepared and implemented to address the functional and operational aspects of our business. Specific
areas identified through regulatory interpretation and enforcement activities have also been addressed in our program. Claims
preparation and submission, including coding, billing, and cost reports, comprise the bulk of these areas. Financial arrangements with
physicians and other referral sources, including compliance with anti-kickback and Stark laws and emergency department treatment
and transfer requirements are also the focus of policy and training, standardized documentation requirements, and review and audit.

United Kingdom Regulation: Our operations in the United Kingdom are also subject to a high level of regulation relating to
registration and licensing requirements, employee regulation, clinical standards, environmental rules as well as other areas. We are
also subject to a highly regulated business environment, and failure to comply with the various laws and regulations applicable to us
could lead to substantial penalties and other adverse effects on our business.

Human Capital Management

Employees and Medical Staff

As of December 31, 2021, we had approximately 89,400 total employees consisting of: (i) approximately 78,900 employees

located in the U.S., of which approximately 57,800 were employed full-time, and; (ii) approximately 10,500 employees located in the
U.K. Our hospitals are staffed by licensed physicians who have been admitted to the medical staff of individual hospitals. In a number
of our markets, physicians may have admitting privileges at other hospitals in addition to ours. Within our acute care division,
approximately 340 physicians are employed by physician practice management subsidiaries of ours either directly or through contracts
with affiliated group practices structured as 501A corporations. Members of the medical staffs of our hospitals also serve on the
medical staffs of hospitals not owned by us and may terminate their affiliation with our hospitals at any time. In addition, within our
behavioral health division, approximately 490 psychiatrists are employed by subsidiaries of ours either directly or through contracts
with affiliated group practices structured as 501A corporations. Each of our hospitals is managed on a day-to-day basis by a managing
director employed by a subsidiary of ours. In addition, a Board of Governors, including members of the hospital’s medical staff,
governs the medical, professional and ethical practices at each hospital. We believe that our relations with our employees are
satisfactory.

Labor Relations

Approximately 990 of our employees at five of our hospitals are unionized. At Valley Hospital Medical Center, housekeeping
and dietary employees are represented by the Culinary Workers and Bartenders Union, engineers are represented by the International
Union of Operating Engineers. At Desert Springs Hospital, engineers are represented by the International Union of Operating
Engineers and registered nurses are represented by the Service Employees International Union (“SEIU”). At the Psychiatric Institute
of Washington, clinical, clerical, support and maintenance employees are represented by the Communication Workers of America
(AFL-CIO). At HRI Hospital, registered nurses, licensed practical nurses, certain technicians and some clerical employees are
represented by the SEIU. At Brooke Glen Behavioral Hospital, unionized employees are represented by the Teamsters and the
Northwestern Nurses Association/Pennsylvania Association of Staff Nurses and Allied Professionals.

Culture and Work Environment

Our commitment to “Service Excellence” serves as the foundation of our culture and is defined as providing world-class service
that is professional, timely, effective and efficient to all of our customer groups at all times. Serving as the foundation of our company
mission, vision, and principles, Service Excellence is the way we approach every human interaction at our company, all the time,
every day.

All new employees participate in a Service Excellence training session. Employees learn what Service Excellence means at our

company and develop an action plan on how to apply this to their everyday work. The individual action plan is mutually shared and
maintained with employees and their managers.

To recruit and retain a diverse and talented workforce, we continuously monitor and update our competitive compensation and

benefit packages. We regularly survey our employees to obtain their views and assess employee satisfaction. We use the views
expressed in the surveys to assess and update our people strategy and policies.

Ethical Standards

We set high ethical standards for ourselves because caring for our patients is a sacred trust. We are committed to fostering a
culture of accountability at all levels and encourage our employees to report anything they believe could be out of compliance with
our values. We provide protected ways for them to do that.

Our commitment to fairness and integrity extends to everyone with whom we interact and do business.

Diversity and Inclusion

We know that the quality of the patient experience is driven by the personal compassion, competence and commitment our team

members deliver every day. We value each member of our team and are committed to treating everyone with dignity and respect. A
collaborative approach among our staff is encouraged because we all share the goal of providing superior quality patient care and
support to families and loved ones.

Health and Safety

Policies and training programs to encourage work safety are a major focus in our organization. During 2020, our increased
attention to workplace safety has enabled us to continue our commitment to keeping our employees and facilities safe during the
COVID-19 pandemic.

Employee Development

We have a number of employee and leadership development programs in place to strengthen our company, help further our

employees’ personal career goals and assist with succession planning. We encourage employees to take charge of their career
development and set objectives in partnership with their managers. We train managers to partner with employees and support them in
their efforts.

We utilize various methods for personal and technical development: on-demand videos, webinars, classroom trainings,

coaching, and more. We also offer tuition reimbursement as a part of our benefits program.

Equal Employment Opportunity

We are committed to the principle of Equal Employment Opportunity for all employees and applicants. It is our policy to

ensure that both current and prospective employees receive equal employment opportunity without consideration of race, religion,
color, national origin, nationality, ancestry, age, sex, marital status, sexual orientation, or disability in accordance with local, state and
federal laws.

Employee Assistance – The UHS Foundation

During 2021, the UHS Foundation, which was previously established to assist our employees that are significantly impacted by

various events such as FEMA-qualified natural disasters and presidential-declared natural disasters, continued to provide financial
support for UHS employees and their families who were significantly impacted by the COVID-19 pandemic.

During 2020, in response to the COVID 19 pandemic, the base salaries of all of our executive and non-executive officers, as

well as certain other members of our senior management team, were reduced by various percentages. In turn, we contributed the
funds generated from these base salary reductions to the UHS Foundation. In addition, the UHS Foundation also received voluntary
contributions from other employees and various other parties, including members of our Board of Directors.

Utilizing funds from the UHS Foundation, we worked with impacted employees to cover the employee cost-share for benefits

throughout COVID-19. In addition, we also deployed the ‘UHS Resource Guide, a consolidated one-stop access to the benefits,
resources, and support tools available across the organization. In addition, we also expanded resources through our employee
assistance program, with a particular focus on emotional wellness and COVID-19 support for our front-line healthcare workers.

Competition

The health care industry is highly competitive. In recent years, competition among healthcare providers for patients has
intensified in the United States due to, among other things, regulatory and technological changes, increasing use of managed care
payment systems, cost containment pressures and a shift toward outpatient treatment. In all of the geographical areas in which we
operate, there are other facilities that provide services comparable to those offered by our facilities. In addition, some of our
competitors include hospitals that are owned by tax-supported governmental agencies or by nonprofit corporations and may be
supported by endowments and charitable contributions and exempt from property, sale and income taxes. Such exemptions and
support are not available to us.

In some markets, certain of our competitors may have greater financial resources, be better equipped and offer a broader range
of services than us. Certain hospitals that are located in the areas served by our facilities are specialty or large hospitals that provide
medical, surgical and behavioral health services, facilities and equipment that are not available at our hospitals. The increase in
outpatient treatment and diagnostic facilities, outpatient surgical centers and freestanding ambulatory surgical also increases
competition for us. In addition, some of our hospitals face competition from hospitals or surgery centers that are physician owned.

The number and quality of the physicians on a hospital’s staff are important factors in determining a hospital’s success and
competitive advantage. Typically, physicians are responsible for making hospital admissions decisions and for directing the course of
patient treatment. We believe that physicians refer patients to a hospital primarily on the basis of the patient’s needs, the quality of
other physicians on the medical staff, the location of the hospital and the breadth and scope of services offered at the hospital’s
facilities. We strive to retain and attract qualified doctors by maintaining high ethical and professional standards and providing
adequate support personnel, technologically advanced equipment and facilities that meet the needs of those physicians.

In addition, we depend on the efforts, abilities, and experience of our medical support personnel, including our nurses,
pharmacists and lab technicians and other health care professionals. We compete with other health care providers in recruiting and
retaining qualified hospital management, nurses and other medical personnel. Our acute care and behavioral health care facilities are
experiencing the effects of a nationwide staffing shortage, which has caused and may continue to cause an increase in salaries, wages
and benefits expense in excess of the inflation rate. In addition, in some markets like California, there are requirements to maintain
specified nurse-staffing levels. To the extent we cannot meet those levels, we may be required to limit the healthcare services provided
in these markets which would have a corresponding adverse effect on our net operating revenues.

Many states in which we operate hospitals have CON laws. The application process for approval of additional covered services,

new facilities, changes in operations and capital expenditures is, therefore, highly competitive in these states. In those states that do
not have CON laws or which set relatively high levels of expenditures before they become reviewable by state authorities, competition
in the form of new services, facilities and capital spending is more prevalent. See “Regulation and Other Factors.”

Our ability to negotiate favorable service contracts with purchasers of group health care services also affects our competitive

position and significantly affects the revenues and operating results of our hospitals. Managed care plans attempt to direct and control
the use of hospital services and to demand that we accept lower rates of payment. In addition, employers and traditional health
insurers are increasingly interested in containing costs through negotiations with hospitals for managed care programs and discounts
from established charges. In return, hospitals secure commitments for a larger number of potential patients. Generally, hospitals
compete for service contracts with group health care service purchasers on the basis of price, market reputation, geographic location,
quality and range of services, quality of the medical staff and convenience. The importance of obtaining contracts with managed care
organizations varies from market to market depending on the market strength of such organizations.

A key element of our growth strategy is expansion through the acquisition of additional hospitals in select markets. The
competition to acquire hospitals is significant. We compete for acquisitions with other for-profit health care companies, private equity
and venture capital firms, as well as not-for-profit entities. Some of our competitors have greater resources than we do. We intend to
selectively seek opportunities to expand our base of operations by adhering to our disciplined program of rational growth, but may not
be successful in accomplishing acquisitions on favorable terms.

Relationship with Universal Health Realty Income Trust

At December 31, 2021, we held approximately 5.7% of the outstanding shares of Universal Health Realty Income Trust (the

“Trust”). We serve as Advisor to the Trust under an annually renewable advisory agreement, which is scheduled to expire on
December 31st of each year, pursuant to the terms of which we conduct the Trust’s day-to-day affairs, provide administrative services
and present investment opportunities. The advisory agreement was renewed by the Trust for 2022 at the same rate as the prior three
years, providing for an advisory computation at 0.70% of the Trust’s average invested real estate assets. We earned an advisory fee
from the Trust, which is included in net revenues in the accompanying consolidated statements of income, of approximately $4.4
million during 2021, $4.1 million during 2020 and $4.0 million during 2019.

In addition, certain of our officers and directors are also officers and/or directors of the Trust. Management believes that it has

the ability to exercise significant influence over the Trust, therefore we account for our investment in the Trust using the equity
method of accounting.

Our pre-tax share of income from the Trust was $6.2 million during 2021 and $1.1 million during each of 2020 and 2019, which
are included in other income, net, on the accompanying consolidated statements of income for each year. We received dividends from
the Trust amounting to $2.2 million during each of 2021 and 2020 and $2.1 million 2019. Included in our share of the Trust’s income
during 2021 was approximately $5.0 million related to our share of gains on various transactions recorded by the Trust, including an
asset purchase and sale transaction between the Trust and UHS, as discussed below.

The carrying value of our investment in the Trust was $9.4 million and $5.4 million at December 31, 2021 and 2020,

respectively, and is included in other assets in the accompanying consolidated balance sheets. The market value of our investment in
the Trust was $46.8 million at December 31, 2021 and $50.6 million at December 31, 2020, based on the closing price of the Trust’s
stock on the respective dates.

The Trust commenced operations in 1986 by purchasing certain hospital properties from us and immediately leasing the
properties back to our respective subsidiaries. Most of the leases were entered into at the time the Trust commenced operations and
provided for initial terms of 13 to 15 years with up to six additional 5-year renewal terms. Each lease, at that time, also provided for
additional or bonus rental, as discussed below. The base rents are paid monthly and the bonus rents are computed and paid on a
quarterly basis, based upon a computation that compares current quarter revenue to a corresponding quarter in the base year. The
leases with those subsidiaries are unconditionally guaranteed by us and are cross-defaulted with one another.

On December 31, 2021 we entered into an asset purchase and sale agreement with the Trust, pursuant to the terms of which:



a wholly-owned subsidiary of ours purchased from the Trust, the real estate assets of the Inland Valley Campus of Southwest
Healthcare System located in Wildomar, California, at its fair market value of $79.6 million.

two wholly-owned subsidiaries of ours transferred to the Trust, the real estate assets of the following properties:

o Aiken Regional Medical Center (“Aiken”), located in Aiken, South Carolina (which includes a 211-bed acute care
hospital and a 62-bed behavioral health facility), at its fair-market value of approximately $57.7 million, and;
o Canyon Creek Behavioral Health (“Canyon Creek”), located in Temple, Texas, at its fair-market value of

approximately $24.7 million.

in connection with this transaction, since the fair-market value of Aiken and Canyon Creek, which totaled approximately
$82.4 million in the aggregate, exceeded the $79.6 million fair-market value of the Inland Valley Campus of Southwest
Healthcare System, we received approximately $2.8 million in cash from the Trust. This transaction generated a gain of
approximately $68.4 million for the Trust, our share of which (approximately $4.0 million) is included in our consolidated
statement of income for the year ended December 31, 2021.

rent (as defined in the master lease), for seven, five-year optional renewal terms. The aggregate annual rental during 2022 pursuant to
the leases for these two facilities, amounts to approximately $5.6 million ($3.9 million related to Aiken and $1.7 million related to
Canyon Creek). There is no bonus rental component applicable to either of these leases. Beginning on January 1, 2023, and thereafter
on each January 1st through 2033, the annual rental will increase by 2.25% on a cumulative and compounded basis.

As a result of the purchase options within the lease agreements for Aiken and Canyon Creek, the asset purchase and sale
transaction is accounted for as a failed sale leaseback in accordance with U.S. GAAP. We have accounted for the asset exchange and
substitution transaction with the Trust as a financing arrangement and, since we did not derecognize the real property related to Aiken
and Canyon Creek, we will continue to depreciate the assets. Our Consolidated Balance Sheet as of December 31, 2021 reflects a
financial liability of $82.4 million, which is included in debt, for the fair value of real estate assets that we exchanged as part of the
transaction. Our monthly lease payments payable to the Trust will be recorded to interest expense and the outstanding financial
liability. The amount allocated to interest expense will be determined using our incremental borrowing rate and will be based on the
outstanding financial liability.

Total aggregate rent expense under the operating leases on three hospital facilities with the Trust (McAllen Medical Center,
Wellington Regional Medical Center and Inland Valley Campus of Southwest Healthcare System) was $17.7 million, $17.1 million
and $16.4 million during 2021, 2020 and 2019, respectively. Pursuant to the Master Leases by certain subsidiaries of ours and the
Trust as described in the table below, dated 1986 and 2021 (“the Master Leases”) which govern the leases of McAllen Medical Center
and Wellington Regional Medical Center (each of which is governed by the Master Lease dated 1986), and Aiken Regional Medical
Center and Canyon Creek Behavioral Health (each of which is governed by the Master Lease dated 2021), we have the option to
renew the leases at the lease terms described above and below by providing notice to the Trust at least 90 days prior to the termination
of the then current term. We also have the right to purchase the respective leased hospitals at their appraised fair market value upon
any of the following: (i) at the end of the lease terms or any renewal terms; (ii) upon one month’s notice should a change of control of
the Trust occur, or; (iii) within the time period as specified in the lease in the event that we provide notice to the Trust of our intent to
offer a substitution property/properties in exchange for one (or more) of the hospital properties leased from the Trust should we be
unable to reach an agreement with the Trust on the properties to be substituted. In addition, we have rights of first refusal to:
(i) purchase the respective leased facilities during and for 180 days after the lease terms at the same price, terms and conditions of any
third-party offer, or; (ii) renew the lease on the respective leased facility at the end of, and for 180 days after, the lease term at the
same terms and conditions pursuant to any third-party offer.

In addition, we are the managing, majority member in a joint venture with an unrelated third-party that operates Clive
Behavioral Health, a 100-bed behavioral health care facility located in Clive, Iowa. The real property of this newly constructed
facility, which was completed and opened in late, 2020, is also leased from the Trust (annual rental of approximately $2.5 million
during 2021) pursuant to the lease terms as provided in the table below. In connection with the lease on this facility, the joint venture
has the right to purchase the leased facility from the Trust at its appraised fair market value upon either of the following: (i) by
providing notice at least 270 days prior to the end of the lease terms or any renewal terms, or; (ii) upon 30 days’ notice anytime within
12 months of a change of control of the Trust (UHS also has this right should the joint venture decline to exercise its purchase right).
Additionally, the joint venture has rights of first offer to purchase the facility prior to any third-party sale.

The table below provides certain details for each of the hospitals leased from the Trust as of January 1, 2022:

Hospital Name
McAllen Medical Center
Wellington Regional Medical Center
Aiken Regional Medical Center/Aurora Pavilion Behavioral
Health Services
Canyon Creek Behavioral Health
Clive Behavioral Health Hospital

Annual
Minimum
Rent
$ 5,485,000
$ 6,319,000

End of Lease Term

December, 2026
December, 2026

$ 3,895,000
$ 1,670,000
$ 2,628,000

December, 2033
December, 2033
December, 2040

Renewal
Term
(years)

5 (a)
5 (b)

35 (c)
35 (c)
50 (d)

(a) We have one 5-year renewal option at existing lease rates (through 2031).
(b) We have one 5-year renewal option at fair market value lease rates (through 2031). Upon the December 31, 2021 expiration of

the lease on Wellington Regional Medical Center, a wholly-owned subsidiary of ours exercised its fair market value renewal
option and renewed the lease for a 5-year term scheduled to expire on December 31, 2026. Effective January 1, 2022, the
annual fair market value lease rate for this hospital is $6.3 million (there is no longer a bonus rental component of the lease
payment). Beginning on January 1, 2023, and thereafter on each January 1st through 2026, the annual rent will increase by
2.50% on a cumulative and compounded basis.

(c) We have seven 5-year renewal options at fair market value lease rates (2034 through 2068).
(d) This facility is operated by a joint venture in which we are the managing, majority member and an unrelated third-party holds a

Beginning in January, 2022, and thereafter in each January through 2040 (and potentially through 2070 if three, 10-year renewal
options are exercised), the annual rental will increase by 2.75% on a cumulative and compounded basis.

In addition, certain of our subsidiaries are tenants in several medical office buildings (“MOBs”) and two free-standing

emergency departments owned by the Trust or by limited liability companies in which the Trust holds 95% to 100% of the ownership
interest.

In January, 2022, the Trust commenced construction on a new 86,000 rentable square feet multi-tenant MOB that is located on
the campus of Northern Nevada Sierra Medical Center in Reno, Nevada. Northern Nevada Sierra Medical Center, which is currently
under construction and will be owned and operated by a wholly-owned subsidiary of ours, is a 170-bed acute care hospital that is
scheduled to be completed and opened in the Spring of 2022. In connection with this MOB, a ground lease and a master flex lease was
executed between a wholly-owned subsidiary of ours and the Trust, pursuant to the terms of which our subsidiary will master lease
approximately 68% of the rentable square feet of the MOB at an initial minimum rent of $1.3 million annually. The master flex lease
could be reduced during the term if certain conditions are met.

Executive Officers of the Registrant

The executive officers, whose terms will expire at such time as their successors are elected, are as follows:

Name and Age
Marc D. Miller (51)
Alan B. Miller (84)
Steve G. Filton (64)
Marvin G. Pember (68)
Matthew J. Peterson (52)

Present Position with the Company

Chief Executive Officer, President and Director
Executive Chairman of the Board
Executive Vice President, Chief Financial Officer and Secretary
Executive Vice President, President of Acute Care Division
Executive Vice President, President of Behavioral Health Division

Mr. Marc D. Miller was appointed Chief Executive Officer and President effective January 1, 2021. He has served as President

since May, 2009 and prior thereto served as Senior Vice President and co-head of our Acute Care Hospitals since 2007. He was
elected a Director in May, 2006 and Vice President in 2005. He has served in various capacities related to our acute care division since
2000. He was elected to the Board of Trustees of Universal Health Realty Income Trust in December, 2008. In August, 2015, he was
appointed to the Board of Directors of Premier, Inc., a publicly traded healthcare performance improvement alliance. See Note 9 to
the Consolidated Financial Statements-Relationship with Universal Health Realty Income Trust and Other Related Party Transactions
for additional disclosure regarding the Company’s group purchasing organization agreement with Premier, Inc. Marc D. Miller is the
son of Alan B. Miller, our Executive Chairman of the Board.

Mr. Alan B. Miller was appointed Executive Chairman of the Board effective January 1, 2021. He had been Chairman of the

Board and Chief Executive Officer since the Company’s inception and also served as President from inception until May, 2009. Prior
thereto, he was President, Chairman of the Board and Chief Executive Officer of American Medicorp, Inc. He currently serves as
Chairman of the Board, Chief Executive Officer and President of Universal Health Realty Income Trust. He is the father of Marc D.
Miller, our Chief Executive Officer, President and Director.

Mr. Filton was elected Executive Vice President in 2017 and continues to serve as Chief Financial Officer since his appointment

in 2003. He has also served as Secretary since 1999. He had served as Senior Vice President since 2003, as Vice President and
Controller since 1991, and as Director of Corporate Accounting since 1985.

Mr. Pember was elected Executive Vice President in 2017 and continues to serve as President of our Acute Care Division since
commencement of his employment with us in 2011. He had served as Senior Vice President since 2011. He was formerly employed
for 12 years at Indiana University Health, Inc. (formerly known as Clarian Health Partners, Inc.), a nonprofit hospital system that
operates multiple facilities in Indiana, where he served as Executive Vice President and Chief Financial Officer.

Mr. Peterson’s employment with us commenced in September, 2019 as Executive Vice President and President of our
Behavioral Health Division. He was formerly employed at UnitedHealth Group for 11 years serving in various capacities including
Chief Operating Officer for OptumGovernment, a health services and technology company, as well as various other Senior Vice
President/Vice President roles. In addition to his civilian business career, Mr. Peterson has served for nearly 32 years as a member of
the United States Military, currently as a Colonel and healthcare executive/global health in the Air National Guard.

ITEM 1A. Risk Factors

We are subject to numerous known and unknown risks, many of which are described below and elsewhere in this Annual

Report. Any of the events described below could have a material adverse effect on our business, financial condition and results of
operations. Additional risks and uncertainties that we are not aware of, or that we currently deem to be immaterial, could also impact
our business and results of operations.

Risks Related to Business Operations

A significant portion of our revenue is produced by facilities located in Texas, Nevada and California.

Texas: We own 7 inpatient acute care hospitals and 22 inpatient behavioral healthcare facilities as listed in Item 2. Properties.

On a combined basis, these facilities contributed 16% of our consolidated net revenues during each of 2021 and 2020. On a combined
basis, after deducting an allocation for corporate overhead expense, these facilities generated 11% in 2021 and 13% in 2020, of our
income from operations after net income attributable to noncontrolling interest.

Nevada: We own 9 inpatient acute care hospitals and 3 inpatient behavioral healthcare facilities as listed in Item 2. Properties.

On a combined basis, these facilities contributed 17% of our consolidated net revenues during each of 2021 and 2020. On a combined
basis, after deducting an allocation for corporate overhead expense, these facilities generated 22% in 2021 and 17% in 2020, of our
income from operations after net income attributable to noncontrolling interest. Effective January, 2020, United/Sierra Healthcare in
Las Vegas, entered into an agreement with a competitor health system that was previously excluded from their contractual network in
the area. As a result, we believe that our 6 acute care hospitals in the Las Vegas, Nevada market, will likely experience a decline in
patient volumes. However, we have entered into an amended agreement with United/Sierra Healthcare related to our hospitals in the
Las Vegas market that provided for various rate increases that began in January, 2020. Although we estimate that the unfavorable
impact of the projected declines in patient volumes should be largely offset by the favorable impact of the increased rates, we can
provide no assurance that these developments on the Las Vegas market, will not have a material adverse impact on our future results
of operations.

California: We own 5 inpatient acute care hospitals and 8 inpatient behavioral healthcare facilities as listed in Item 2.

Properties. On a combined basis, these facilities contributed 11% of our consolidated net revenues during each of 2021 and 2020. On
a combined basis, after deducting an allocation for corporate overhead expense, these facilities generated 20% during each of 2021
and 2020, of our income from operations after net income attributable to noncontrolling interest.

The significant portion of our revenues and earnings derived from these facilities makes us particularly sensitive to legislative,
regulatory, economic, environmental and competition changes in Texas, Nevada and California. Any material change in the current
payment programs or regulatory, economic, environmental or competitive conditions in these states could have a disproportionate
effect on our overall business results.

Our revenues and results of operations are significantly affected by payments received from the government and other third party
payers.

We derive a significant portion of our revenue from third-party payers, including the Medicare and Medicaid programs.
Changes in these government programs in recent years have resulted in limitations on reimbursement and, in some cases, reduced
levels of reimbursement for healthcare services. Payments from federal and state government programs are subject to statutory and
regulatory changes, administrative rulings, interpretations and determinations, requirements for utilization review, and federal and
state funding restrictions, all of which could materially increase or decrease program payments, as well as affect the cost of providing
service to patients and the timing of payments to facilities. We are unable to predict the effect of recent and future policy changes on
our operations. In addition, the uncertainty and fiscal pressures placed upon federal and state governments as a result of, among other
things, deterioration in general economic conditions and the funding requirements from the federal healthcare reform legislation, may
affect the availability of taxpayer funds for Medicare and Medicaid programs. In addition, the vast majority of the net revenues
generated at our behavioral health facilities located in the United Kingdom are derived from governmental payers. If the rates paid or
the scope of services covered by governmental payers in the United States or United Kingdom are reduced, there could be a material
adverse effect on our business, financial position and results of operations.

We receive annual Medicaid revenues of approximately $100 million, or greater, from each of Texas, California, Nevada,

Illinois, Pennsylvania, Washington, D.C., Kentucky, Florida and Massachusetts. We also receive Medicaid disproportionate share
hospital payments in certain states including Texas and South Carolina. We are therefore particularly sensitive to potential reductions
in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those
states.

In addition to changes in government reimbursement programs, our ability to negotiate favorable contracts with private payers,

including managed care organizations, significantly affects the revenues and operating results of our hospitals. Private payers,
including managed care organizations, increasingly are demanding that we accept lower rates of payment.

We expect continued third-party efforts to aggressively manage reimbursement levels and cost controls. Reductions in

reimbursement amounts received from third-party payers could have a material adverse effect on our financial position and our results
of operations.

If we are not able to provide high quality medical care at a reasonable price, patients may choose to receive their health care from
our competitors.

In recent years, the number of quality measures that hospitals are required to report publicly has increased. Centers for Medicare

and Medicaid Services (“CMS”) publishes performance data related to quality measures and data on patient satisfaction surveys that
hospitals submit in connection with the Medicare program. Federal law provides for the future expansion of the number of quality
measures that must be reported. Additionally, the Legislation requires all hospitals to annually establish, update and make public a list

of their standard charges for products and services. Also, the No Surprises Act, adopted as part of the Consolidated Appropriations
Act, 2021 (“CAA”), creates additional price transparency requirements beginning January 1, 2022, including requiring providers to
send health plans of insured patients and uninsured patients a good faith estimate of the expected charges and diagnostic codes prior to
the scheduled date of the service or item. If any of our hospitals achieve poor results on the quality measures or patient satisfaction
surveys (or results that are lower than our competitors) or if our standard charges are higher than our competitors, our patient volume
could decline because patients may elect to use competing hospitals or other health care providers that have better metrics and pricing.
This circumstance could harm our business and results of operations.

An increase in uninsured and underinsured patients in our acute care facilities or the deterioration in the collectability of the
accounts of such patients could harm our results of operations.

Collection of receivables from third-party payers and patients is our primary source of cash and is critical to our operating

performance. Our primary collection risks relate to uninsured patients and the portion of the bill that is the patient’s responsibility,
which primarily includes co-payments and deductibles. However, we also have substantial receivables due to us from certain state-
based funding programs. We estimate our provisions for doubtful accounts based on general factors such as payer mix, the agings of
the receivables, historical collection experience and assessment of probability of future collections. We routinely review accounts
receivable balances in conjunction with these factors and other economic conditions that might ultimately affect the collectability of
the patient accounts and make adjustments to our allowances as warranted. Significant changes in business office operations, payer
mix, economic conditions or trends in federal and state governmental health coverage could affect our collection of accounts
receivable, cash flow and results of operations. If we experience unexpected increases in the growth of uninsured and underinsured
patients or in bad debt expenses, our results of operations will be harmed.

Our hospitals face competition for patients from other hospitals and health care providers.

The healthcare industry is highly competitive, and competition among hospitals, and other healthcare providers for patients and

physicians has intensified in recent years. In all of the geographical areas in which we operate, there are other facilities that provide
services comparable to those offered by our facilities. Some of our competitors include hospitals that are owned by tax-supported
governmental agencies or by nonprofit corporations and may be supported by endowments and charitable contributions and exempt
from property, sales and income taxes. Such exemptions and support are not available to us.

In some markets, certain of our competitors may have greater financial resources, be better equipped and offer a broader range
of services than we offer. The number of inpatient facilities, as well as outpatient surgical and diagnostic centers, many of which are
fully or partially owned by physicians, in the geographic areas in which we operate has increased significantly. As a result, most of
our hospitals operate in an increasingly competitive environment.

We also operate health care facilities in the United Kingdom where the National Health Service (the “NHS”) is the principal

provider of healthcare services. In addition to the NHS, we face competition in the United Kingdom from independent sector
providers and other publicly funded entities for patients.

If our competitors are better able to attract patients, recruit physicians and other healthcare professionals, expand services or
obtain favorable managed care contracts at their facilities, we may experience a decline in patient volume and our business may be
harmed.

Our performance depends on our ability to recruit and retain quality physicians.

Typically, physicians are responsible for making hospital admissions decisions and for directing the course of patient treatment.

As a result, the success and competitive advantage of our hospitals depends, in part, on the number and quality of the physicians on
the medical staffs of our hospitals, the admitting practices of those physicians and our maintenance of good relations with those
physicians. Physicians generally are not employees of our hospitals, and, in a number of our markets, physicians have admitting
privileges at other hospitals in addition to our hospitals. They may terminate their affiliation with us at any time. If we are unable to
provide high ethical and professional standards, adequate support personnel and technologically advanced equipment and facilities
that meet the needs of those physicians, they may be discouraged from referring patients to our facilities and our results of operations
may decline.

It may become difficult for us to attract and retain an adequate number of physicians to practice in certain of the non-urban
communities in which our hospitals are located. Our failure to recruit physicians to these communities or the loss of physicians in
these communities could make it more difficult to attract patients to our hospitals and thereby may have a material adverse effect on
our business, financial condition and results of operations.

Generally, the top ten attending physicians within each of our facilities represent a large share of our inpatient revenues and

admissions. The loss of one or more of these physicians, even if temporary, could cause a material reduction in our revenues, which
could take significant time to replace given the difficulty and cost associated with recruiting and retaining physicians.

If we do not continually enhance our hospitals with the most recent technological advances in diagnostic and surgical equipment,
our ability to maintain and expand our markets will be adversely affected.

The technology used in medical equipment and related devices is constantly evolving and, as a result, manufacturers and
distributors continue to offer new and upgraded products to health care providers. To compete effectively, we must continually assess
our equipment needs and upgrade when significant technological advances occur. If our facilities do not stay current with
technological advances in the health care industry, patients may seek treatment from other providers and/or physicians may refer their
patients to alternate sources, which could adversely affect our results of operations and harm our business.

Our performance depends on our ability to attract and retain qualified nurses and medical support staff and we face competition
for staffing that may increase our labor costs and harm our results of operations.

We depend on the efforts, abilities, and experience of our medical support personnel, including our nurses, pharmacists and lab

technicians and other healthcare professionals. We compete with other healthcare providers in recruiting and retaining qualified
hospital management, nurses and other medical personnel.

The nationwide shortage of nurses and other clinical staff and support personnel has been a significant operating issue facing us
and other healthcare providers. In particular, like others in the healthcare industry, we continue to experience a shortage of nurses and
other clinical staff and support personnel at our acute care and behavioral health care hospitals in many geographic areas, which
shortage has been exacerbated by the COVID‑19 pandemic. We are treating patients with COVID‑19 in our facilities and, in some
areas, the increased demand for care is putting a strain on our resources and staff, which has required us to utilize higher‑cost
temporary labor and pay premiums above standard compensation for essential workers. The length and extent of the disruptions
caused by the COVID‑19 pandemic are currently unknown; however, we expect such disruptions to continue into 2022 and potentially
throughout the duration of the pandemic and beyond. This staffing shortage may require us to further enhance wages and benefits to
recruit and retain nurses and other clinical staff and support personnel or require us to hire expensive temporary personnel. To the
extent we cannot maintain sufficient staffing levels at our hospitals, we may be required to limit the acute and behavioral health care
services provided at certain of our hospitals which would have a corresponding adverse effect on our net revenues. In addition, in
some markets like California, there are requirements to maintain specified nurse-staffing levels which could adversely affect our net
revenues to the extent we cannot meet those levels.

We cannot predict the degree to which we will be affected by the future availability or cost of attracting and retaining talented
medical support staff. If our general labor and related expenses increase, we may not be able to raise our rates correspondingly. Our
failure to either recruit and retain qualified hospital management, nurses and other medical support personnel or control our labor costs
could harm our results of operations.

Increased labor union activity is another factor that could adversely affect our labor costs. Union organizing activities and
certain potential changes in federal labor laws and regulations could increase the likelihood of employee unionization in the future, to
the extent a greater portion of our employee base unionized, it is possible our labor costs could increase materially.

The failure of certain employers, or the closure of certain facilities, could have a disproportionate impact on our hospitals.

The economies in the communities in which our hospitals operate are often dependent on a small number of large employers.
Those employers often provide income and health insurance for a disproportionately large number of community residents who may
depend on our hospitals and other health care facilities for their care. The failure of one or more large employer or the closure or
substantial reduction in the number of individuals employed at facilities located in or near the communities where our hospitals
operate, could cause affected employees to move elsewhere to seek employment or lose insurance coverage that was otherwise
available to them. The occurrence of these events could adversely affect our revenue and results of operations, thereby harming our
business.

The trend toward value-based purchasing may negatively impact our revenues.

We believe that value-based purchasing initiatives of both governmental and private payers tying financial incentives to quality

and efficiency of care will increasingly affect the results of operations of our hospitals and other healthcare facilities and may
negatively impact our revenues if we are unable to meet expected quality standards. The Legislation contains a number of provisions
intended to promote value-based purchasing in federal healthcare programs. Medicare now requires providers to report certain quality
measures in order to receive full reimbursement increases for inpatient and outpatient procedures that were previously awarded
automatically. In addition, hospitals that meet or exceed certain quality performance standards will receive increased reimbursement
payments, and hospitals that have “excess readmissions” for specified conditions will receive reduced reimbursement. Furthermore,
Medicare no longer pays hospitals additional amounts for the treatment of certain hospital-acquired conditions unless the conditions
were present at admission. Beginning in federal fiscal year 2015, hospitals that rank in the worst 25% of all hospitals nationally for
hospital acquired conditions in the previous year were subject to reduced Medicare reimbursements. The Legislation also prohibits the
use of federal funds under the Medicaid program to reimburse providers for treating certain provider-preventable conditions.

There is a trend among private payers toward value-based purchasing of healthcare services, as well. Many large commercial

payers require hospitals to report quality data, and several of these payers will not reimburse hospitals for certain preventable adverse
events. We expect value-based purchasing programs, including programs that condition reimbursement on patient outcome measures,

to become more common and to involve a higher percentage of reimbursement amounts. We are unable at this time to predict how this
trend will affect our results of operations, but it could negatively impact our revenues if we are unable to meet quality standards
established by both governmental and private payers.

Controls designed to reduce inpatient services and increasing rates of “denials” may reduce our revenues.

Controls imposed by third-party payers designed to reduce admissions and lengths of stay, commonly referred to as “utilization
review,” have affected and are expected to continue to affect our facilities. Utilization review entails the review of the admission and
course of treatment of a patient by managed care plans. Inpatient utilization, average lengths of stay and occupancy rates continue to
be negatively affected by payer-required preadmission authorization and utilization review and by payer pressure to maximize
outpatient and alternative healthcare delivery services for less acutely ill patients. Efforts to impose more stringent cost controls are
expected to continue. In addition, we have been experiencing increasing rates of denied claims (“denials”) from managed care payers
which have reduced our net revenues and increased our operating costs as we devote additional resources to enhanced documentation
and collection efforts. Although we cannot predict the effect these factors will have on our operations, significant limits on the scope
of services reimbursed, and reimbursements withheld due to denials, could have a material adverse effect on our business, financial
position and results of operations.

We depend heavily on key management personnel and the departure of one or more of our key executives or a significant portion
of our local hospital management personnel could harm our business.

The expertise and efforts of our senior executives and key members of our local hospital management personnel are critical to

the success of our business. The loss of the services of one or more of our senior executives or of a significant portion of our local
hospital management personnel could significantly undermine our management expertise and our ability to provide efficient, quality
healthcare services at our facilities, which could harm our business. Effective January 1, 2021, Mr. Alan B. Miller, our Founder,
Chairman and Chief Executive Officer has stepped down as Chief Executive Officer and Mr. Marc D. Miller, our former President,
was appointed and has been serving as our Chief Executive Officer. Mr. Alan B. Miller continues to serve in his current role as
Executive Chairman of our Board of Directors in addition to retaining certain other management responsibilities within our Company.

Risks Related to the COVID-19 Pandemic

COVID-19 and other pandemics, epidemics, or public health threats may adversely affect our business, results of operations and
financial condition.

We are subject to risks associated with public health threats and epidemics, including the health concerns relating to the
COVID-19 pandemic. In January 2020, the Centers for Disease Control and Prevention (“CDC”) confirmed the spread of the disease
to the United States. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The federal
government has declared COVID-19 a national emergency, as many federal and state authorities have implemented aggressive
measures to “flatten the curve” of confirmed individuals diagnosed with COVID-19 in an attempt to curtail the spread of the virus and
to avoid overwhelming the health care system.

The COVID-19 pandemic has adversely impacted and is likely to further adversely impact us, our employees, our patients, our
vendors and supply chain partners, and financial institutions, which could continue to have a material adverse effect on our business,
results of operations and financial condition. In an effort to slow the spread of the disease, since March, 2020, at various times, most
state and local governments mandated general “shelter-in-place” orders or other similar restrictions that require or strongly encourage
social distancing and, face coverings, and that have closed or limited non-essential business activities. Some of these restrictions
remain in place. Additionally, evidence suggests that individuals to deciding to forego medical care delivered in traditional venues.

These dynamics have manifested themselves in our hospitals in, among other ways, reduced emergency room visits,

elective/scheduled procedures and acute and behavioral health patient days. While such measures are expected to assist in responding
to the recent outbreak, self-quarantines, shelter-in-place orders, and suspension of voluntary procedures and surgeries have had, and
will likely continue to have, an adverse impact on the operations and financial position of health care provider systems due to
increased costs (including labor costs which have been pressured during the COVID-19 pandemic due to a shortage of clinicians and
increased wage rates due to increased demand for those services), actual reduction and potential reduction in overall patient volume,
and shifts in payor mix.

Despite these measures, there have been waves of escalated COVID-19 cases at various times, including the fourth quarter of
2020 and into the first quarter of 2021, as well as the fourth quarter of 2021 and into the first quarter of 2022, in many states in the
U.S., including many states in which we operate hospitals. Since the first quarter of 2021, COVID-19 vaccinations have begun to be
administered. Since that time, through the second quarter of 2021, we had generally experienced a decline in COVID-19 patients as
well as a corresponding recovery in non-COVID-19 patient activity. However, during the third quarter of 2021, our facilities
generally experienced an increase in COVID-19 patients resulting primarily from the Delta variant. Also, since late in 2021, the newly
discovered and highly transmissible Omicron variant has resulted in an increase in COVID-19 infections. Since the third quarter of
2021, booster doses for COVID-19 vaccination have begun to be administered, and while we expect the administration of booster
doses to assist in easing the number of COVID-19 patients, the pace at which this is likely to occur is difficult to predict.

The COVID-19 pandemic has led to a constrained supply environment which could result in higher cost to procure, and
potential unavailability of, critical personal protection equipment, pharmaceuticals and medical supplies. Should a supply disruption
result in the inability to obtain especially high margin drugs and compound components necessary for patient care, our consolidated
financial statements could be negatively impacted.

In addition, CMS issued an Interim Final Rule (“IFR”) effective November 5, 2021 mandating COVID-19 vaccinations for all
applicable staff at all Medicare and Medicaid certified facilities. Under the IFR, facilities covered by this regulation must establish a
policy ensuring all eligible staff have received the first dose of a two-dose COVID-19 vaccine or a one-dose COVID-19 vaccine prior
to providing any care, treatment, or other services by December 5, 2021. All eligible staff must have received the necessary shots to be
fully vaccinated – either two doses of Pfizer or Moderna or one dose of Johnson & Johnson – by January 4, 2022. The regulation also
provides for exemptions based on recognized medical conditions or religious beliefs, observances, or practices. Under the IFR,
facilities must develop a similar process or plan for permitting exemptions in alignment with federal law. If facilities fail to comply
with the IFR by the deadlines established, they are subject to potential termination from the Medicare and Medicaid program for non-
compliance. In addition, the Occupational Safety and Health Administration also issued an Emergency Temporary Standard (“ETS”)
requiring all businesses with 100 or more employees to be vaccinated by January 4, 2022. Pursuant to the ETS, those employees not
vaccinated by that date will need to show a negative COVID-19 test weekly and wear a face mask in the workplace. Legal challenges
to these rules ensued, and the U.S. Supreme Court has upheld a stay of the ETS requirements but permitted the IFR vaccination
requirements to go into effect pending additional litigation. CMS has indicated that hospitals in states not involved in the Supreme
Court litigation are expected to be in compliance with IFR vaccination requirements consistent with the dates referenced above.
Hospitals in states that were involved in the Supreme Court litigation must now come into compliance with first dose requirements by
February 13, 2022 and second dose requirements by March 15, 2022. Hospitals in Texas must come into compliance with the first
dose requirements by February 19, 2022 and the second dose requirements by March 21, 2022, due to the recent termination of
separate litigation there. We cannot predict at this time the potential viability or impact of any such additional
litigation. Implementation of these rules could have an impact on staffing at our facilities for those employees that are not vaccinated
in accordance with IFR and ETS requirements, and associated loss of revenues and increased costs resulting from staffing issues could
have a material adverse effect on our financial results.

The extent to which the COVID-19 pandemic and measures taken in response thereto impact our business, results of operations
and financial condition will depend on numerous factors and future developments, most of which are beyond our control or ability to
predict. The ultimate impact of the COVID-19 pandemic, including the future volumes and severity of COVID-19 patients caused by
new variants of the virus, as well as related pressures on staffing and wage rates and the strained supply environment, is highly
uncertain and subject to change. We are not able to fully quantify the impact that these factors will have on our future financial results,
but expect developments related to the COVID-19 pandemic to materially affect our financial performance in 2022. Even after the
COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts on our financial condition and our
results of operations as a result of its macroeconomic impact, including any recession that has occurred or may occur in the future.

Despite these measures, there have been waves of escalated COVID-19 cases at various times, including the third and fourth
quarters of 2021 and continuing into the first quarter of 2022, in many states in the U.S., including many states in which we operate
hospitals. Recently, COVID-19 vaccinations have begun to be administered and while we expect the administration of vaccines will
assist in easing the number of COVID-19 patients, the pace at which this is likely to occur is very difficult to predict. The extent to
which the COVID-19 pandemic and measures taken in response thereto impact our business, results of operations and financial
condition will depend on numerous factors and future developments, most of which are beyond our control or ability to predict. The
ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We are not able to fully quantify the impact
that these factors will have on our future financial results, but expect developments related to the COVID-19 pandemic to materially
affect our financial performance in 2022. Even after the COVID-19 pandemic has subsided, we may continue to experience materially
adverse impacts on our financial condition and our results of operations as a result of its macroeconomic impact, including any
recession that has occurred or may occur in the future.

There is a high degree of uncertainty regarding the implementation and impact of the Coronavirus Aid, Relief, and Economic
Security Act (the “CARES Act”) and the Paycheck Protection Program and Health Care Enhancement Act (“PPPHCE Act”).

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), a stimulus package signed into law on March 27,

2020, authorizes $100 billion in grant funding to hospitals and other healthcare providers to be distributed through the Public Health
and Social Services Emergency Fund (the “PHSSEF”). These funds are not required to be repaid provided the recipients attest to and
comply with certain terms and conditions, including limitations on balance billing and not using PHSSEF funds to reimburse expenses
or losses that other sources are obligated to reimburse. However, since the expenses and losses will be ultimately measured over the
life of the COVID-19 pandemic, potential retrospective unfavorable adjustments in future periods, of funds recorded as revenues in
prior periods, could occur. The U.S. Department of Health and Human Services (“HHS”) initially distributed $30 billion of this
funding based on each provider’s share of total Medicare fee-for-service reimbursement in 2019. Subsequently, HHS distributed $50
billion in CARES Act funding (including the $30 billion already distributed) proportional to providers’ share of 2018 net patient
revenue. We have received payments from these initial distributions of the PHSSEF as disclosed herein. HHS has indicated that
distributions of the remaining $50 billion will be targeted primarily to hospitals in COVID-19 high impact areas, to rural providers,
safety net hospitals and certain Medicaid providers and to reimburse providers for COVID-19-related treatment of uninsured patients.
We have received payments from these targeted distributions of the PHSSEF, as disclosed herein. The CARES Act also makes other
17

forms of financial assistance available to healthcare providers, including through Medicare and Medicaid payment adjustments and an
expansion of the Medicare Accelerated and Advance Payment Program, which makes available accelerated payments of Medicare
funds in order to increase cash flow to providers. On April 26, 2020, CMS announced it was reevaluating and temporarily suspending
the Accelerated and Advance Payment Program in light of the availability of the PHSSEF and the significant funds available through
other programs. We have received accelerated payments under this program as disclosed herein.

The Paycheck Protection Program and Health Care Enhancement Act (the “PPPHCE Act”), a stimulus package signed into law

on April 24, 2020, includes additional emergency appropriations for COVID-19 response, including $75 billion to be distributed to
eligible providers through the PHSSEF. Recipients will not be required to repay the government for funds received, provided they
comply with HHS-defined terms and conditions. A third phase of PHSSEF allocations was recently announced, under which $24.5
billion was made available for providers who previously received, rejected or accepted PHSSEF payments. Applicants that have not
yet received PHSSEF payments of 2 percent of patient revenue will receive a payment that, when combined with prior payments (if
any), equals 2 percent of patient care revenue. Providers that have already received payments of approximately 2 percent of annual
revenue from patient care can submit more information and may be eligible for an additional payment. On December 27, 2020, the
Consolidated Appropriations Act, 2021 (“CAA”) was signed into law. The CAA appropriated an additional $3 billion to the PHSSEF,
codified flexibility for providers to calculate lost revenues and permitted parent organizations to allocate PHSSEF targeted
distributions to subsidiary organizations. The CAA also provides that not less than 85 percent of the unobligated PHSSEF amounts
and any future funds recovered from health care providers should be used for additional distributions that consider financial losses and
changes in operating expenses in the third or fourth quarters of 2020 and the first quarter of 2021 that are attributable to the
coronavirus. The CAA provided additional funding for testing, contact tracing and vaccine administration. Providers receiving
payments were required to sign terms and conditions regarding utilization of the payments. Any provider receiving funds in excess of
$10,000 in the aggregate will be required to report data elements to HHS detailing utilization of the payments. Providers will report
healthcare related expenses attributable to COVID-19 that have not been reimbursed by another source, which may include general
and administrative or healthcare related operating expenses. Funds may also be applied to lost revenues, represented as a negative
change in year-over-year net patient care operating income. All such fund payments must be expended by June 30, 2021.

There is a high degree of uncertainty surrounding the implementation of the CARES Act and the PPPHCE Act, and the federal

government may consider additional stimulus and relief efforts, but we are unable to predict whether additional stimulus measures will
be enacted or their impact. There can be no assurance as to the total amount of financial and other types of assistance we will receive
under the CARES Act and the PPPHCE Act, and it is difficult to predict the impact of such legislation on our operations or how they
will affect operations of our competitors. Moreover, we are unable to assess the extent to which anticipated negative impacts on us
arising from the COVID-19 pandemic will be offset by amounts or benefits received or to be received under the CARES Act and the
PPPHCE Act.

Risks Related to the Regulatory Environment

Reductions or changes in Medicare and Medicaid funding could have a material adverse effect on our future results of operations.

The Budget Control Act of 2011 (the “Budget Control Act”) mandated significant reductions in federal spending for fiscal years

2012-2021, including a reduction of 2% on all Medicare payments during this period. Subsequent legislation enacted by Congress
eliminated the 2% reduction through 2021 but extended these reductions through 2030 in exchange. The most recent legislation
extended the payment reduction suspension through March 31, 2022, with a 1% payment reduction from then until June 30, 2022 and
the full 2% payment reduction thereafter. Please see Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations, Sources of Revenue-Medicare, for additional disclosure.

Beginning in 2024 and continuing through 2027, the Medicaid disproportionate share hospital (“DSH”) allotment to the states

from federal funds will be reduced. Such reductions have been delayed several times, most recently under the CAA, which further
delays the DSH reductions through 2024. During the reduction period, state Medicaid DSH allotments from federal funds will be
reduced by $8 billion annually. Reductions are imposed on states based on percentage of uninsured individuals, Medicaid utilization
and uncompensated care.

We are subject to uncertainties regarding health care reform.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (the “Legislation”). Two

primary goals of the Legislation are to provide for increased access to coverage for healthcare and to reduce healthcare-related
expenses.

Although it was expected that as a result of the Legislation there would be a reduction in uninsured patients, which would

reduce our expense from uncollectible accounts receivable, the Legislation makes a number of other changes to Medicare and
Medicaid which we believe may have an adverse impact on us. It has been projected that the Legislation will result in a net reduction
in Medicare and Medicaid payments to hospitals totaling $155 billion over 10 years. The Legislation revises reimbursement under the
Medicare and Medicaid programs to emphasize the efficient delivery of high quality care and contains a number of incentives and
penalties under these programs to achieve these goals. The Legislation implements a value-based purchasing program, which will
reward the delivery of efficient care. Conversely, certain facilities will receive reduced reimbursement for failing to meet quality

parameters; such hospitals will include those with excessive readmission or hospital-acquired condition rates. It remains unclear what
portions of that legislation may remain, or what any replacement or alternative programs may be created by future legislation.

A 2012 U.S. Supreme Court ruling limited the federal government’s ability to expand health insurance coverage by holding
unconstitutional sections of the Legislation that sought to withdraw federal funding for state noncompliance with certain Medicaid
coverage requirements. Pursuant to that decision, the federal government may not penalize states that choose not to participate in the
Medicaid expansion program by reducing their existing Medicaid funding. Therefore, states can choose to accept or not to participate
without risking the loss of federal Medicaid funding. As a result, many states, including Texas, have not expanded their Medicaid
programs without the threat of loss of federal funding. CMS had granted section 1115 demonstration waivers providing for work and
community engagement requirements for certain Medicaid eligible individuals. However, most recently, the Biden Administration
has expressed disfavor with Medicaid program work requirements, with the understanding that such requirements pose a substantial
risk that many potential demonstration beneficiaries would be prevented from initially enrolling in coverage or that the requirements
would lead to a sizable number of eligibility suspensions and eventual disenrollments among beneficiaries who are initially able to
enroll. Accordingly, CMS has recently revoked certain State Medicaid program approvals including work requirements.

The various provisions in the Legislation that directly or indirectly affect Medicare and Medicaid reimbursement are scheduled

to take effect over a number of years. The impact of the Legislation on healthcare providers will be subject to implementing
regulations, interpretive guidance and possible future legislation or legal challenges. Certain Legislation provisions, such as that
creating the Medicare Shared Savings Program, create uncertainty in how healthcare may be reimbursed by federal programs in the
future. Thus, we cannot predict the impact of the Legislation on our future reimbursement at this time and we can provide no
assurance that the Legislation will not have a material adverse effect on our future results of operations.

The Legislation also contained provisions aimed at reducing fraud and abuse in healthcare. The Legislation amends several

existing laws, including the federal Anti-Kickback Statute and the False Claims Act, making it easier for government agencies and
private plaintiffs to prevail in lawsuits brought against healthcare providers. While Congress had previously revised the intent
requirement of the Anti-Kickback Statute to provide that a person is not required to “have actual knowledge or specific intent to
commit a violation of” the Anti-Kickback Statute in order to be found in violation of such law, the Legislation also provides that any
claims for items or services that violate the Anti-Kickback Statute are also considered false claims for purposes of the federal civil
False Claims Act. The Legislation provides that a healthcare provider that retains an overpayment in excess of 60 days is subject to the
federal civil False Claims Act, although certain final regulations implementing this statutory requirement remain pending. The
Legislation also expands the Recovery Audit Contractor program to Medicaid. These amendments also make it easier for severe fines
and penalties to be imposed on healthcare providers that violate applicable laws and regulations.

We have partnered with local physicians in the ownership of certain of our facilities. These investments have been permitted

under an exception to the physician self-referral law. The Legislation permits existing physician investments in a hospital to continue
under a “grandfather” clause if the arrangement satisfies certain requirements and restrictions, but physicians are prohibited from
increasing the aggregate percentage of their ownership in the hospital. The Legislation also imposes certain compliance and disclosure
requirements upon existing physician-owned hospitals and restricts the ability of physician-owned hospitals to expand the capacity of
their facilities. As discussed below, should the Legislation be repealed in its entirety, this aspect of the Legislation would also be
repealed restoring physician ownership of hospitals and expansion right to its position and practice as it existed prior to the
Legislation.

The impact of the Legislation on each of our hospitals may vary. Because Legislation provisions are effective at various times
over the next several years, we anticipate that many of the provisions in the Legislation may be subject to further revision. Initiatives
to repeal the Legislation, in whole or in part, to delay elements of implementation or funding, and to offer amendments or supplements
to modify its provisions have been persistent. The ultimate outcomes of legislative attempts to repeal or amend the Legislation and
legal challenges to the Legislation are unknown. Legislation has already been enacted that has eliminated the penalty for failing to
maintain health coverage that was part of the original Legislation. In addition, Congress has considered legislation that would, if
enacted, in material part: (i) eliminate the large employer mandate to obtain or provide health insurance coverage, respectively; (ii)
permit insurers to impose a surcharge up to 30 percent on individuals who go uninsured for more than two months and then purchase
coverage; (iii) provide tax credits towards the purchase of health insurance, with a phase-out of tax credits accordingly to income
level; (iv) expand health savings accounts; (v) impose a per capita cap on federal funding of state Medicaid programs, or, if elected by
a state, transition federal funding to block grants, and; (vi) permit states to seek a waiver of certain federal requirements that would
allow such state to define essential health benefits differently from federal standards and that would allow certain commercial health
plans to take health status, including pre-existing conditions, into account in setting premiums.

In addition to legislative changes, the Legislation can be significantly impacted by executive branch actions. President Biden is

reimbursement accounts by employers to permit employees to purchase health insurance in the individual market. The uncertainty
resulting from these Executive Branch policies has led to reduced Exchange enrollment in 2018, 2019 and 2020 is expected to further
worsen the individual and small group market risk pools in future years. It is also anticipated that these policies may create additional
cost and reimbursement pressures on hospitals.

It remains unclear what portions of the Legislation may remain, or whether any replacement or alternative programs may be

created by any future legislation. Any such future repeal or replacement may have significant impact on the reimbursement for
healthcare services generally, and may create reimbursement for services competing with the services offered by our hospitals.
Accordingly, there can be no assurance that the adoption of any future federal or state healthcare reform legislation will not have a
negative financial impact on our hospitals, including their ability to compete with alternative healthcare services funded by such
potential legislation, or for our hospitals to receive payment for services.

While attempts to repeal the entirety of the Legislation have not been successful to date, a key provision of the Legislation was

repealed as part of the Tax Cuts and Jobs Act and on December 14, 2018, a Texas Federal District Court Judge declared the
Legislation unconstitutional, reasoning that the individual mandate tax penalty was essential to and not severable from the remainder
of the Legislation. The case was appealed to the U.S. Court of Appeals for the Fifth Circuit and on December 18, 2019, a three-judge
panel declared the Legislation’s individual mandate unconstitutional and remanded the case back to the Texas Federal District Court
to determine which of the Legislation’s provisions should be stricken with the mandate or whether the entire law is unconstitutional
without the individual mandate. The U.S. Supreme Court heard appeals and ultimately held in California v. Texas that the plaintiffs
lacked standing to challenge the Legislation’s requirement to obtain minimum essential health insurance coverage, or the individual
mandate. The Court dismissed the case without specifically ruling on the constitutionality of the Legislation. As a result, the
Legislation will continue to remain law, in its entirety, likely for the foreseeable future. While the results of the 2020 elections
potentially reduce the risk of the Legislation being eliminated in whole or in part, the continued uncertainties regarding
implementation of the Legislation create unpredictability for the strategic and business planning efforts of health care providers, which
in itself constitutes a risk.

Under the Legislation, hospitals are required to make public a list of their standard charges, and effective January 1, 2019, CMS

has required that this disclosure be in machine-readable format and include charges for all hospital items and services and average
charges for diagnosis-related groups. On November 27, 2019, CMS published a final rule on “Price Transparency Requirements for
Hospitals to Make Standard Charges Public.” This rule took effect on January 1, 2021 and requires all hospitals to also make public
their payor-specific negotiated rates, minimum negotiated rates, maximum negotiated rates and cash for all items and services,
including individual items and services and service packages, that could be provided by a hospital to a patient. Failure to comply with
these requirements may result in daily monetary penalties.

As part of the CAA, Congress passed legislation aimed at preventing or limiting patient balance billing in certain circumstances.

The CAA addresses surprise medical bills stemming from emergency services, out-of-network ancillary providers at in-network
facilities, and air ambulance carriers. The legislation prohibits surprise billing when out-of-network emergency services or out-of-
network services at an in-network facility are provided, unless informed consent is received. In these circumstances providers are
prohibited from billing the patient for any amounts that exceed in-network cost-sharing requirements. On July 13, 2021, HHS, the
Department of Labor and the Department of the Treasury issued an interim final rule, which begins to implement this legislation. The
rule would limit our ability to receive payment for services at usually higher out-of-network rates in certain circumstances and prohibit
out-of-network payments in other circumstances.

We are required to treat patients with emergency medical conditions regardless of ability to pay.

In accordance with our internal policies and procedures, as well as the Emergency Medical Treatment and Active Labor Act, or

EMTALA, we provide a medical screening examination to any individual who comes to one of our hospitals while in active labor
and/or seeking medical treatment (whether or not such individual is eligible for insurance benefits and regardless of ability to pay) to
determine if such individual has an emergency medical condition. If it is determined that such person has an emergency medical
condition, we provide such further medical examination and treatment as is required to stabilize the patient’s medical condition, within
the facility’s capability, or arrange for transfer of such individual to another medical facility in accordance with applicable law and the
treating hospital’s written procedures. Our obligations under EMTALA may increase substantially going forward; CMS has sought
stakeholder comments concerning the potential applicability of EMTALA to hospital inpatients and the responsibilities of hospitals
with specialized capabilities, respectively, but has yet to issue further guidance in response to that request. If the number of indigent
and charity care patients with emergency medical conditions we treat increases significantly, or if regulations expanding our
obligations to inpatients under EMTALA is proposed and adopted, our results of operations will be harmed.

If we fail to continue to meet the promoting interoperability criteria related to electronic health record systems (“EHR”), our
operations could be harmed.

Pursuant to Health Information Technology for Economic and Clinical Health (“HITECH”) regulations, hospitals that did not

qualify as a meaningful user of EHR by 2015 were subject to a reduced market basket update to the inpatient prospective payment
system (“IPPS”) standardized amount in 2015 and each subsequent fiscal year. In the 2019 IPPS final rule, CMS re-named the
meaningful use program to “promoting interoperability”. We believe that all of our acute care hospitals have met the applicable
promoting interoperability criteria and therefore are not subject to a reduced market basked update to the IPPS standardized amount.

However, under the HITECH Act, hospitals must continue to meet the applicable criteria in each fiscal year or they will be subject to a
market basket update reduction in a subsequent fiscal year. Failure of our acute care hospitals to continue to meet the applicable
meaningful use criteria would have an adverse effect on our future net revenues and results of operations.

If we fail to comply with extensive laws and government regulations, we could suffer civil or criminal penalties or be required to
make significant changes to our operations that could reduce our revenue and profitability.

The healthcare industry is required to comply with extensive and complex laws and regulations at the federal, state and local

government levels relating to, among other things: hospital billing practices and prices for services; relationships with physicians and
other referral sources; adequacy of medical care and quality of medical equipment and services; ownership of facilities; qualifications
of medical and support personnel; confidentiality, maintenance, privacy and security issues associated with health-related information
and patient medical records; the screening, stabilization and transfer of patients who have emergency medical conditions; certification,
licensure and accreditation of our facilities; operating policies and procedures, and; construction or expansion of facilities and
services.

Among these laws are the federal False Claims Act, the Health Insurance Portability and Accountability Act of 1996,

(“HIPAA”), the federal anti-kickback statute and the provision of the Social Security Act commonly known as the “Stark Law.” These
laws, and particularly the anti-kickback statute and the Stark Law, impact the relationships that we may have with physicians and
other referral sources. We have a variety of financial relationships with physicians who refer patients to our facilities, including
employment contracts, leases and professional service agreements. We also provide financial incentives, including minimum revenue
guarantees, to recruit physicians into communities served by our hospitals. The Office of the Inspector General of the Department of
Health and Human Services, or OIG, has enacted safe harbor regulations that outline practices that are deemed protected from
prosecution under the anti-kickback statute. A number of our current arrangements, including financial relationships with physicians
and other referral sources, may not qualify for safe harbor protection under the anti-kickback statute. Failure to meet a safe harbor
does not mean that the arrangement necessarily violates the anti-kickback statute, but may subject the arrangement to greater scrutiny.
We cannot assure that practices that are outside of a safe harbor will not be found to violate the anti-kickback statute. CMS published
a Medicare self-referral disclosure protocol, which is intended to allow providers to self-disclose actual or potential violations of the
Stark law. Because there are only a few judicial decisions interpreting the Stark law, there can be no assurance that our hospitals will
not be found in violation of the Stark Law or that self-disclosure of a potential violation would result in reduced penalties.

Federal regulations issued under HIPAA contain provisions that require us to implement and, in the future, may require us to

implement additional costly electronic media security systems and to adopt new business practices designed to protect the privacy and
security of each of our patient’s health and related financial information. Such privacy and security regulations impose extensive
administrative, physical and technical requirements on us, restrict our use and disclosure of certain patient health and financial
information, provide patients with rights with respect to their health information and require us to enter into contracts extending many
of the privacy and security regulatory requirements to third parties that perform duties on our behalf. Additionally, recent changes to
HIPAA regulations may result in greater compliance requirements, including obligations to report breaches of unsecured patient data,
as well as create new liabilities for the actions of parties acting as business associates on our behalf.

These laws and regulations are extremely complex, and, in many cases, we do not have the benefit of regulatory or judicial
interpretation. In the future, it is possible that different interpretations or enforcement of these laws and regulations could subject our
current or past practices to allegations of impropriety or illegality or could require us to make changes in our facilities, equipment,
personnel, services, capital expenditure programs and operating expenses. A determination that we have violated one or more of these
laws (see Note 8 to the Consolidated Financial Statements - Commitments and Contingencies, as included this Form 10-K), or the
public announcement that we are being investigated for possible violations of one or more of these laws, could have a material adverse
effect on our business, financial condition or results of operations and our business reputation could suffer significantly. In addition,
we cannot predict whether other legislation or regulations at the federal or state level will be adopted, what form such legislation or
regulations may take or what their impact on us may be. See Item 1 Business—Self-Referral and Anti-Kickback Legislation.

If we are deemed to have failed to comply with the anti-kickback statute, the Stark Law or other applicable laws and regulations,

we could be subjected to liabilities, including criminal penalties, civil penalties (including the loss of our licenses to operate one or
more facilities), and exclusion of one or more facilities from participation in the Medicare, Medicaid and other federal and state
healthcare programs. The imposition of such penalties could have a material adverse effect on our business, financial condition or
results of operations.

We also operate health care facilities in the United Kingdom and have operations and commercial relationships with companies
in other foreign jurisdictions and, as a result, are subject to certain U.S. and foreign laws applicable to businesses generally, including
anti-corruption laws. The Foreign Corrupt Practices Act regulates U.S. companies in their dealings with foreign officials, prohibiting
bribes and similar practices, and requires that they maintain records that fairly and accurately reflect transactions and appropriate
internal accounting controls. In addition, the United Kingdom Bribery Act has wide jurisdiction over certain activities that affect the
United Kingdom.

Our operations in the United Kingdom are also subject to a high level of regulation relating to registration and licensing

requirements employee regulation, clinical standards, environmental rules as well as other areas. We are also subject to a highly
regulated business environment, and failure to comply with the various laws and regulations, applicable to us could lead to substantial
penalties, and other adverse effects on our business.

We are subject to occupational health, safety and other similar regulations and failure to comply with such regulations could harm
our business and results of operations.

We are subject to a wide variety of federal, state and local occupational health and safety laws and regulations. Regulatory
requirements affecting us include, but are not limited to, those covering: (i) air and water quality control; (ii) occupational health and
safety (e.g., standards regarding blood-borne pathogens and ergonomics, etc.); (iii) waste management; (iv) the handling of asbestos,
polychlorinated biphenyls and radioactive substances; and (v) other hazardous materials. If we fail to comply with those standards, we
may be subject to sanctions and penalties that could harm our business and results of operations.

We are subject to pending legal actions, purported stockholder class actions, governmental investigations and regulatory actions.

We and our subsidiaries are subject to pending legal actions, governmental investigations and regulatory actions (see Note 8 to
the Consolidated Financial Statements - Commitments and Contingencies, as included this Form 10-K). We may become subject to
additional medical malpractice lawsuits, product liability lawsuits, class action lawsuits and other legal actions in the ordinary course
of business.

Defending ourselves against the allegations in the lawsuits and governmental investigations, or similar matters and any related

publicity, could potentially entail significant costs and could require significant attention from our management and our reputation
could suffer significantly. We are unable to predict the outcome of these matters or to reasonably estimate the amount or range of any
such loss; however, these lawsuits and the related publicity and news articles that have been published concerning these matters could
have a material adverse effect on our business, financial condition, results of operations and/or cash flows which in turn could cause a
decline in our stock price. In an effort to resolve one or more of these matters, we may choose to negotiate a settlement. Amounts we
pay to settle any of these matters may be material. All professional and general liability insurance we purchase is subject to policy
limitations. We believe that, based on our past experience and actuarial estimates, our insurance coverage is adequate considering the
claims arising from the operations of our hospitals. While we continuously monitor our coverage, our ultimate liability for
professional and general liability claims could change materially from our current estimates. If such policy limitations should be
partially or fully exhausted in the future, or payments of claims exceed our estimates or are not covered by our insurance, it could have
a material adverse effect on our operations.

We are and may become subject to other loss contingencies, both known and unknown, which may relate to past, present and
future facts, events, circumstances and occurrences. Should an unfavorable outcome occur in some or all of our legal proceedings or
other loss contingencies, or if successful claims and other actions are brought against us in the future, there could be a material adverse
impact on our financial position, results of operations and liquidity.

In particular, government investigations, as well as qui tam and stockholder lawsuits, may lead to material fines, penalties,
damages payments or other sanctions, including exclusion from government healthcare programs. The federal False Claims Act
permits private parties to bring qui tam, or whistleblower, lawsuits on behalf of the government against companies alleging that the
defendant has defrauded the federal government. These private parties are entitled to share in any amounts recovered by the
government, and, as a result, the number of whistleblower lawsuits that have been filed against providers has increased significantly in
recent years. Because qui tam lawsuits are filed under seal, we could be named in one or more such lawsuits of which we are not
aware. Settlements of lawsuits involving Medicare and Medicaid issues routinely require both monetary payments and corporate
integrity agreements, each of which could have a material adverse effect on our business, financial condition, results of operations
and/or cash flows.

The failure of certain employers, or the closure of certain facilities, could have a disproportionate impact on our hospitals.

If any of our existing health care facilities lose their accreditation or any of our new facilities fail to receive accreditation, such
facilities could become ineligible to receive reimbursement under Medicare or Medicaid.

The construction and operation of healthcare facilities are subject to extensive federal, state and local regulation relating to,
among other things, the adequacy of medical care, equipment, personnel, operating policies and procedures, fire prevention, rate-
setting and compliance with building codes and environmental protection. Additionally, such facilities are subject to periodic
inspection by government authorities to assure their continued compliance with these various standards.

All of our hospitals are deemed certified, meaning that they are accredited, properly licensed under the relevant state laws and

regulations and certified under the Medicare program. The effect of maintaining certified facilities is to allow such facilities to
participate in the Medicare and Medicaid programs. We believe that all of our healthcare facilities are in material compliance with
applicable federal, state, local and other relevant regulations and standards. However, should any of our healthcare facilities lose their
deemed certified status and thereby lose certification under the Medicare or Medicaid programs, such facilities would be unable to
receive reimbursement from either of those programs and our business could be materially adversely effected.

State efforts to regulate the construction or expansion of health care facilities could impair our ability to expand.

Many of the states in which we operate hospitals have enacted Certificates of Need, or (“CON”), laws as a condition prior to

hospital capital expenditures, construction, expansion, modernization or initiation of major new services. Our failure to obtain
necessary state approval could result in our inability to complete a particular hospital acquisition, expansion or replacement, make a
facility ineligible to receive reimbursement under the Medicare or Medicaid programs, result in the revocation of a facility’s license or
impose civil or criminal penalties on us, any of which could harm our business.

In addition, significant CON reforms have been proposed in a number of states that would increase the capital spending
thresholds and provide exemptions of various services from review requirements. In the past, we have not experienced any material
adverse effects from those requirements, but we cannot predict the impact of these changes upon our operations.

Risks Related to Information Technology

A cyber security incident could cause a violation of HIPAA, breach of member privacy, or other negative impacts.

We rely extensively on our information technology (“IT”) systems to manage clinical and financial data, communicate with our

patients, payers, vendors and other third parties and summarize and analyze operating results. In addition, we have made significant
investments in technology to adopt and utilize electronic health records and to become meaningful users of health information
technology pursuant to the American Recovery and Reinvestment Act of 2009. Our IT systems are subject to damage or interruption
from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches including credit
card or personally identifiable information breaches, vandalism, theft, natural disasters, catastrophic events, human error and potential
cyber threats, including malicious codes, worms, phishing attacks, denial of service attacks, ransomware and other sophisticated
cyber-attacks, and our disaster recovery planning cannot account for all eventualities. As cyber criminals continue to become more
sophisticated through evolution of their tactics, techniques and procedures, we have taken, and will continue to take, additional
preventive measures to strengthen the cyber defenses of our networks and data. However, if any of our systems are damaged, fail to
function properly or otherwise become unavailable, we may incur substantial costs to repair or replace them, and may experience loss
or corruption of critical data such as protected health information or other data subject to privacy laws and proprietary business
information and interruptions or disruptions and delays in our ability to perform critical functions, which could materially and
adversely affect our businesses and results of operations and could result in significant penalties or fines, litigation, loss of customers,
significant damage to our reputation and business, and other losses. In addition, our future results of operations, as well as our
reputation, could be adversely impacted by theft, destruction, loss, or misappropriation of public health information, other confidential
data or proprietary business information.

In September, 2020, we had experienced an information technology security incident which led us to suspend user access to our
information technology applications related to operations located in the United States. While our information technology applications
were offline, patient care was delivered safely and effectively at our facilities across the country utilizing established back-up
processes, including offline documentation methods. We have investigated the nature and potential impact of the security incident and
engaged third-party information technology and forensic vendors to assist. No evidence of unauthorized access, copying or misuse of
any patient or employee data has been identified to date. Promptly after the incident, our information technology applications were
restored at our acute care and behavioral health hospitals, as well as at the corporate level, thereby re-establishing connections to all
major systems and applications, including electronic medical records, laboratory and pharmacy systems and our hospitals resumed
normal operations.

Risks Related to the Market Conditions and Liquidity

Our revenues and volume trends may be adversely affected by certain factors over which we have no control.

Our revenues and volume trends are dependent on many factors, including physicians’ clinical decisions and availability, payer

programs shifting to a more outpatient-based environment, whether or not certain services are offered, seasonal and severe weather
conditions, including the effects of extreme low temperatures, hurricanes and tornados, earthquakes, climate change, current local
economic and demographic changes. We have a high concentration of facilities in various geographic areas, including states that have
a potentially higher risk of experiencing events such as severe weather conditions and earthquakes. Given the location of our facilities,
we are particularly susceptible to revenue loss, cost increase, or damage caused by severe weather conditions or natural disasters such
as hurricanes, wildfires, earthquakes, or tornados. Any significant loss due to a natural disaster may not be covered by insurance and
may lead to an increase in the cost of insurance or unavailability on acceptable terms. Climate change may also have effects on our
business by increasing the cost of property insurance or making coverage unavailable on acceptable terms. To the extent that
significant changes in the climate occur in areas where our facilities are located, we may experience increased frequency of severe
weather conditions or natural disasters or other changes to weather patterns, all of which may result in physical damage to or a

decrease in demand for properties affected by these conditions. Should the impact of climate change be material in nature or occur for
lengthy periods of time, our financial condition, revenues, results of operations, or cash flow may be adversely affected. In addition,
government regulation intended to mitigate the impact of climate change, severe weather patterns, or natural disasters could result in
additional required capital expenditures to comply with such regulation without a corresponding increase in our revenues. In addition,
technological developments and pharmaceutical improvements may reduce the demand for healthcare services or the profitability of
the services we offer. Further, the Medicare program’s three-year phase out and eventual elimination of the Inpatient Only List, a list
of surgeries and procedures that are only covered by Medicare when provided in an inpatient setting, may reduce inpatient volumes.

A worsening of economic and employment conditions in the United States could materially affect our business and future results
of operations.

Our patient volumes, revenues and financial results depend significantly on the universe of patients with health insurance, which
to a large extent is dependent on the employment status of individuals in our markets. Worsening of economic conditions may result in
a higher unemployment rate which may increase the number of individuals without health insurance. As a result, our facilities may
experience a decrease in patient volumes, particularly in less intense, more elective service lines, or an increase in services provided to
uninsured patients. These factors could have a material unfavorable impact on our future patient volumes, revenues and operating
results.

In addition, as of December 31, 2021, we had approximately $4.0 billion of goodwill recorded on our consolidated balance

sheet. Should the revenues and financial results of our acute care and/or behavioral health care facilities be materially, unfavorably
impacted due to, among other things, a worsening of the economic and employment conditions in the United States that could
negatively impact our patient volumes and reimbursement rates, a continued rise in the unemployment rate and increases in the
number of uninsured patients treated at our facilities, we may incur future charges to recognize impairment in the carrying value of our
goodwill and other intangible assets, which could have a material adverse effect on our financial results.

Legal uncertainty or a worsening of the economic conditions in the United Kingdom could materially affect our business and
future results of operations.

On June 23, 2016, the United Kingdom affirmatively voted in a non-binding referendum in favor of the exit of the United
Kingdom from the European Union (“Brexit”) and it was approved by vote of the British legislature. On March 29, 2017, the United
Kingdom triggered Article 50 of the Lisbon Treaty, formally starting negotiations regarding its exit from the European Union. On
January 31, 2020, the United Kingdom formally exited the European Union. On December 24, 2020, the United Kingdom and the
European Union reached a post-Brexit trade and cooperation agreement that created new business and security requirements and
preserved the United Kingdom’s tariff- and quota-free access to the European Union member states. The trade and cooperation
agreement was provisionally applied as of January 1, 2021 and entered into force on May 1, 2021, following ratification by the
European Union.

Changes to the trading relationship between the United Kingdom and the European Union may result in increased cost of goods

imported into the United Kingdom. Additional currency volatility could result in a weaker British pound, which may decrease the
profitability of our operations in the United Kingdom. A weaker British pound versus the U.S. Dollar also causes local currency
results of our United Kingdom operations to be translated into fewer U.S. Dollars during a reporting period. While we may elect to
enter into hedging arrangements to protect our business against certain currency fluctuations, these hedging arrangements do not
provide comprehensive protection, and our results of operations could be adversely affected by foreign exchange fluctuations.

Brexit could lead to legal and regulatory uncertainty as the United Kingdom determines which European Union laws to replace

or replicate. Brexit could also lead to increased legal and regulatory complexity as national laws and regulations in the United
Kingdom start to diverge from European Union laws and regulations. For instance, rules for data transfers outside of the United
Kingdom and European Economic Area have changed significantly with Brexit and a recent Court of European Justice decision, and
are subject to further revision and updated regulatory guidance, making necessary compliance measures challenging to ascertain and
implement with respect to our United Kingdom operations. The exit of the United Kingdom from the European Union could also
create future economic uncertainty, both in the United Kingdom and globally, and could cause disruptions to and create uncertainty
surrounding our business. Any of these effects of Brexit, and others we cannot anticipate, could harm our business, financial condition
or results of operations.

We continue to see rising costs in construction materials and labor. Such increased costs could have an adverse effect on the cash
flow return on investment relating to our capital projects.

The cost of construction materials and labor has significantly increased. As we continue to invest in modern technologies,

emergency rooms and operating room expansions, the construction of medical office buildings for physician expansion and
reconfiguring the flow of patient care, we spend large amounts of money generated from our operating cash flow or borrowed funds.
Although we evaluate the financial feasibility of such projects by determining whether the projected cash flow return on investment
exceeds our cost of capital, such returns may not be achieved if the cost of construction continues to rise significantly or the expected
patient volumes are not attained.

The deterioration of credit and capital markets may adversely affect our access to sources of funding and we cannot be certain of
the availability and terms of capital to fund the growth of our business when needed.

We require substantial capital resources to fund our acquisition growth strategy and our ongoing capital expenditure programs
for renovation, expansion, construction and addition of medical equipment and technology. We believe that our capital expenditure
program is adequate to expand, improve and equip our existing hospitals. We cannot predict, however, whether financing for our
growth plans and capital expenditure programs will be available to us on satisfactory terms when needed, which could harm our
business.

To fund all or a portion of our future financing needs, we rely on borrowings from various sources including fixed rate, long-

term debt as well as borrowings pursuant to our revolving credit facility and accounts receivable securitization program. If any of the
lenders were unable to fulfill their future commitments, our liquidity could be impacted, which could have a material unfavorable
impact our results of operations and financial condition.

The phase-out of LIBOR on January 1, 2022 and June 30, 2023.

In 2017, the U.K. Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to phase out LIBOR and

stop compelling banks to submit rates for its calculation. In 2021, the FCA further announced that effective January 1, 2022, the one
week and two-month USD LIBOR tenors are no longer being published, and all other USD LIBOR tenors will cease to be published
after June 30, 2023.

The Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee
which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to USD-LIBOR in derivatives and other
financial contracts. We are not able to predict how the markets will respond to SOFR or any other alternative reference rate as the
transition away from LIBOR continues in the coming years. Any changes adopted by FCA or other governing bodies in the method
used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our
interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates
and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

At December 31, 2021, we had contracts that are indexed to LIBOR, such as our unsecured revolving credit facility and interest
rate derivatives. We are monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on
derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting
value transfer that may occur. The value of loans, securities, or derivative instruments tied to LIBOR could also be impacted if LIBOR
is limited or discontinued. For some instruments, the method of transitioning to an alternative rate may be challenging, as they may
require negotiation with the respective counterparty. Our unsecured revolving credit facility contains provisions specifying alternative
interest rate calculations to be employed when LIBOR ceases to be available as a benchmark.

We currently expect the LIBOR-indexed rates included in our debt agreements to be available until June 30, 2023. We
anticipate managing the transition to a preferred alternative rate using the language set out in our agreements, however, future market
conditions may not allow immediate implementation of desired modifications and we may incur significant associated costs in doing
so. We will continue to monitor and evaluate the potential impact on our debt payments and value of our related debt, however, we are
not able to predict when LIBOR-indexed rates (other than one week and two-month tenors which are not included in our debt
agreements and are no longer being published) will cease to be available.

Risks Related to Our Common Stock

The number of outstanding shares of our Class B Common Stock is subject to potential increases or decreases.

At December 31, 2021, 20.0 million shares of Class B Common Stock were reserved for issuance upon conversion of shares of

Class A, C and D Common Stock outstanding, for issuance upon exercise of options to purchase Class B Common Stock and for
issuance of stock under other incentive plans. Class A, C and D Common Stock are convertible on a share for share basis into Class B
Common Stock. To the extent that these shares were converted into or exercised for shares of Class B Common Stock, the number of
shares of Class B Common Stock available for trading in the public market place would increase substantially and the current holders
of Class B Common Stock would own a smaller percentage of that class.

In addition, from time-to-time our Board of Directors approve stock repurchase programs authorizing us to purchase shares of

our Class B Common Stock on the open market at prevailing market prices or in negotiated transactions off the market. Such
repurchases decrease the number of outstanding shares of our Class B Common Stock. In April, 2021, our Board of Directors
approved a resumption to our stock repurchase program which had been suspended in April, 2020, as part of various COVID-19
initiatives. During 2021, in conjunction with our stock repurchase program, we repurchased approximately 8.4 million shares at an
aggregate cost of approximately $1.20 billion. As of December 31, 2021, we had an aggregate available repurchase authorization of
approximately $358 million pursuant to this program.

Conversely, as a potential means of generating additional funds to operate and expand our business, we may from time-to-time
issue equity through the sale of stock which would increase the number of outstanding shares of our Class B Common Stock. Based

upon factors such as, but not limited to, the market price of our stock, interest rate on borrowings and uses or potential uses for cash,
repurchase or issuance of our stock could have a dilutive effect on our future basic and diluted earnings per share.

The right to elect the majority of our Board of Directors and the majority of the general shareholder voting power resides with the
holders of Class A and C Common Stock, the majority of which is owned by Alan B. Miller, Executive Chairman of our Board of
Directors.

Our Restated Certificate of Incorporation provides that, with respect to the election of directors, holders of Class A Common

Stock vote as a class with the holders of Class C Common Stock, and holders of Class B Common Stock vote as a class with holders
of Class D Common Stock, with holders of all classes of our Common Stock entitled to one vote per share.

As of March 25, 2021, the shares of Class A and Class C Common Stock constituted 8.5% of the aggregate outstanding shares

of our Common Stock, had the right to elect five members of the Board of Directors and constituted 88.0% of our general voting
power as of that date. As of March 25, 2021, the shares of Class B and Class D Common Stock (excluding shares issuable upon
exercise of options) constituted 91.5% of the outstanding shares of our Common Stock, had the right to elect two members of the
Board of Directors and constituted 12.0% of our general voting power as of that date.

As to matters other than the election of directors, our Restated Certificate of Incorporation provides that holders of Class A,

Class B, Class C and Class D Common Stock all vote together as a single class, except as otherwise provided by law.

Each share of Class A Common Stock entitles the holder thereof to one vote; each share of Class B Common Stock entitles the

holder thereof to one-tenth of a vote; each share of Class C Common Stock entitles the holder thereof to 100 votes (provided the
holder of Class C Common Stock holds a number of shares of Class A Common Stock equal to ten times the number of shares of
Class C Common Stock that holder holds); and each share of Class D Common Stock entitles the holder thereof to ten votes (provided
the holder of Class D Common Stock holds a number of shares of Class B Common Stock equal to ten times the number of shares of
Class D Common Stock that holder holds).

In the event a holder of Class C or Class D Common Stock holds a number of shares of Class A or Class B Common Stock,
respectively, less than ten times the number of shares of Class C or Class D Common Stock that holder holds, then that holder will be
entitled to only one vote for every share of Class C Common Stock, or one-tenth of a vote for every share of Class D Common Stock,
which that holder holds in excess of one-tenth the number of shares of Class A or Class B Common Stock, respectively, held by that
holder. The Board of Directors, in its discretion, may require beneficial owners to provide satisfactory evidence that such owner holds
ten times as many shares of Class A or Class B Common Stock as Class C or Class D Common Stock, respectively, if such facts are
not apparent from our stock records.

Since a substantial majority of the Class A shares and Class C shares are controlled by Mr. Alan B. Miller and members of his

family, one of whom is Marc D. Miller, our Chief Executive Officer, President and a director, and they can elect a majority of our
company’s directors and effect or reject most actions requiring approval by stockholders without the vote of any other stockholders,
there are potential conflicts of interest in overseeing the management of our company.

In addition, because this concentrated control could discourage others from initiating any potential merger, takeover or other
change of control transaction that may otherwise be beneficial to our businesses, our business and prospects and the trading price of
our securities could be adversely affected.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 2.

Properties

Executive and Administrative Offices and Commercial Health Insurer

We own various office buildings in King of Prussia and Wayne, Pennsylvania, Brentwood, Tennessee, Denton, Texas and Reno,

Nevada.

Facilities

The following tables set forth the name, location, type of facility and, for acute care hospitals and behavioral health care

facilities, the number of licensed beds:

Acute Care Hospitals

Name of Facility

Location

Aiken Regional Medical Centers (2)......................................................... Aiken, South Carolina
Aurora Pavilion Behavioral Health Services (2) ............................. Aiken, South Carolina

Centennial Hills Hospital Medical Center ................................................ Las Vegas, Nevada
ER at Valley Vista ........................................................................... Las Vegas, Nevada
Corona Regional Medical Center .............................................................. Corona, California
Desert Springs Hospital Medical Center ................................................... Las Vegas, Nevada
Desert View Hospital ................................................................................ Pahrump, Nevada
Doctors Hospital of Laredo (7) ................................................................. Laredo, Texas
Doctors Hospital Emergency Room Saunders ................................. Laredo, Texas
Doctors Hospital Emergency Room South ...................................... Laredo, Texas
Fort Duncan Regional Medical Center ..................................................... Eagle Pass, Texas
The George Washington University Hospital (1) ..................................... Washington, D.C.
Henderson Hospital .................................................................................. Henderson, Nevada
ER at Green Valley Ranch .............................................................. Henderson, Nevada
Lakewood Ranch Medical Center ............................................................. Bradenton, Florida

ER at Fruitville ................................................................................ Sarasota, Florida

Manatee Memorial Hospital ..................................................................... Bradenton, Florida
Northern Nevada Medical Center ............................................................. Sparks, Nevada

ER at McCarran NW ....................................................................... Reno, Nevada
Northern Nevada Sierra Medical Center (15) ........................................... Reno, Nevada
Northwest Texas Healthcare System ........................................................ Amarillo, Texas
Northwest Texas Healthcare System Behavioral Health ................. Amarillo, Texas
Northwest Emergency at Town Square ........................................... Amarillo, Texas
Northwest Emergency on Georgia .................................................. Amarillo, Texas
Palmdale Regional Medical Center ........................................................... Palmdale, California
South Texas Health System (3)

Edinburg Regional Medical Center/Children’s Hospital (3) ........... Edinburg, Texas
South Texas Health System Behavioral (3) ..................................... McAllen, Texas
South Texas Health System Heart (3) ............................................. McAllen, Texas
South Texas Health System McAllen (2) (3) .................................. McAllen, Texas
South Texas Health System ER Alamo (3) ..................................... Alamo, Texas
South Texas Health System ER McColl (3) .................................... Edinburg, Texas
South Texas Health System ER Mission (2) (3) .............................. Mission, Texas
South Texas Health System ER Monte Cristo (3) ........................... Edinburg, Texas
South Texas Health System ER Ware Road (3) .............................. McAllen, Texas
South Texas Health System ER Weslaco (2) (3) ............................. Weslaco, Texas

Southwest Healthcare System

Inland Valley Medical Center Campus .......................................... Wildomar, California
Rancho Springs Medical Center Campus ........................................ Murrieta, California
Spring Valley Hospital Medical Center .................................................... Las Vegas, Nevada
ER at Blue Diamond........................................................................ Las Vegas, Nevada
Valley Health Specialty Hospital .................................................... Las Vegas, Nevada

St. Mary’s Regional Medical Center ......................................................... Enid, Oklahoma
Summerlin Hospital Medical Center ......................................................... Las Vegas, Nevada
Temecula Valley Hospital ......................................................................... Temecula, California
Texoma Medical Center ............................................................................ Denison, Texas
TMC Behavioral Health Center ....................................................... Denison, Texas

Number
of
Beds

Real
Property
Ownership
Interest

211
62
339
—
238
282
25
183
—
—
101
395
239
—
120
—
295
219
—
170
405
90
—
—
184

235
134
60
431
—
—
—
—
—
—

120
120
364
—
66
229
485
140
354
60

Leased
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

Owned
Owned
Owned
Leased
Owned
Owned
Leased
Owned
Owned
Leased

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

Name of Facility

Location

ER at Anna ...................................................................................... Anna, Texas
ER at Sherman ................................................................................. Sherman, Texas
Valley Hospital Medical Center ................................................................ Las Vegas, Nevada
Elite Medical Center ........................................................................ Las Vegas, Nevada
Wellington Regional Medical Center (2) .................................................. West Palm Beach, Florida
ER at Westlake ................................................................................ West Palm Beach, Florida

Inpatient Behavioral Health Care Facilities

United States:

Name of Facility

Location

Alabama Clinical Schools ....................................................................... Birmingham, Alabama
Alliance Health Center ............................................................................ Meridian, Mississippi
Anchor Hospital ...................................................................................... Atlanta, Georgia
Arbour Hospital ..................................................................................... Boston, Massachusetts
Arrowhead Behavioral Health ............................................................... Maumee, Ohio
Austin Lakes Hospital ............................................................................ Austin, Texas
Austin Oaks Hospitals............................................................................. Austin, Texas
Beaumont Behavioral Health (13) .......................................................... Dearborn, Michigan
Behavioral Hospital of Bellaire ............................................................... Houston, Texas
Belmont Pines Hospital.......................................................................... Youngstown, Ohio
Benchmark Behavioral Health Systems .................................................. Woods Cross, Utah
BHC Alhambra Hospital ......................................................................... Rosemead, California
Black Bear Lodge ................................................................................... Sautee, Georgia
Bloomington Meadows Hospital ............................................................ Bloomington, Indiana
Boulder Creek Academy ......................................................................... Bonners Ferry, Idaho
Brentwood Behavioral Healthcare .......................................................... Flowood, Mississippi
Brentwood Hospital ................................................................................ Shreveport, Louisiana
The Bridgeway ........................................................................................ North Little Rock, Arkansas
The Brook Hospital—Dupont ................................................................. Louisville, Kentucky
The Brook Hospital—KMI ..................................................................... Louisville, Kentucky
Brooke Glen Behavioral Hospital ........................................................... Fort Washington, Pennsylvania
Brynn Marr Hospital ...............................................................................
Calvary Center ........................................................................................ Phoenix, Arizona
Canyon Creek Behavioral Health (2) ..................................................... Temple, Texas
Canyon Ridge Hospital .......................................................................... Chino, California
The Carolina Center for Behavioral Health ............................................ Greer, South Carolina
Cedar Creek Hospital .............................................................................. St. Johns, Michigan
Cedar Grove Residential Treatment Center ............................................ Murfreesboro, Tennessee
Cedar Hills Hospital (8) .......................................................................... Beaverton, Oregon
Cedar Ridge Behavioral Hospital ........................................................... Oklahoma City, Oklahoma
Cedar Ridge Residential Treatment Center ............................................. Oklahoma City, Oklahoma
Cedar Ridge Bethany .............................................................................. Bethany, Oklahoma
Cedar Springs Hospital ........................................................................... Colorado Springs, Colorado
Centennial Peaks Hospital ...................................................................... Louisville, Colorado
Center for Change ................................................................................... Orem, Utah
Central Florida Behavioral Hospital ....................................................... Orlando, Florida
Chris Kyle Patriots Hospital ................................................................... Anchorage, Alaska
Clarion Psychiatric Center ...................................................................... Clarion, Pennsylvania
Clive Behavioral Health (2) (12) ............................................................ Clive, Iowa
Coastal Behavioral Health ...................................................................... Savannah, Georgia

Jacksonville, North Carolina

Number
of
Beds

—
—
328
—
235
—

Real
Property
Ownership
Interest

Owned
Owned
Owned
Owned
Leased
Leased

Number
of
Beds

Real
Property
Ownership
Interest

80
214
122
136
48
58
80
32
124
121
94
115
115
78
105
121
260
127
88
110
146
102
68
102
157
156
54
40
98
60
56
56
110
104
58
174
36
112
100
50

Owned
Owned
Owned
Owned
Owned
Leased
Owned
Leased
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned

United States:

Location

Name of Facility
Coastal Harbor Treatment Center ........................................................... Savannah, Georgia
Columbus Behavioral Center for Children and Adolescents .................. Columbus, Indiana
Compass Intervention Center .................................................................. Memphis, Tennessee
Copper Hills Youth Center ..................................................................... West Jordan, Utah
Coral Shores Behavioral Health ............................................................. Stuart, Florida
Cumberland Hall Hospital ...................................................................... Hopkinsville, Kentucky
Cumberland Hospital for Children and Adolescents ............................... New Kent, Virginia
Cypress Creek Hospital ........................................................................... Houston, Texas
DeBarr Residential Treatment Center ..................................................... Anchorage, Alaska
Del Amo Behavioral Health System ....................................................... Torrance, California
Diamond Grove Center ........................................................................... Louisville, Mississippi
Dover Behavioral Health System ............................................................ Dover, Delaware
El Paso Behavioral Health System .......................................................... El Paso, Texas
Emerald Coast Behavioral Hospital ........................................................ Panama City, Florida
Fairmount Behavioral Health System ..................................................... Philadelphia, Pennsylvania
Fairfax

Fairfax Behavioral Health ............................................................... Kirkland, Washington
Fairfax Behavioral Health—Everett ................................................ Everett, Washington
Fairfax Behavioral Health—Monroe ............................................... Monroe, Washington
Forest View Hospital .............................................................................. Grand Rapids, Michigan
Fort Lauderdale Behavioral Health Center ............................................. Fort Lauderdale, Florida
Foundations Behavioral Health ............................................................... Doylestown, Pennsylvania
Foundations for Living ........................................................................... Mansfield, Ohio
Fox Run Center ....................................................................................... St. Clairsville, Ohio
Fremont Hospital .................................................................................... Fremont, California
Friends Hospital ...................................................................................... Philadelphia, Pennsylvania
Fuller Hospital ........................................................................................ South Attleboro, Massachusetts
Garfield Park Behavioral Hospital .......................................................... Chicago, Illinois
Glen Oaks Hospital ................................................................................. Greenville, Texas
Granite Hills Hospital ............................................................................. West Allis, Wisconsin
Gulf Coast Treatment Center .................................................................. Fort Walton Beach, Florida
Gulfport Behavioral Health System ........................................................ Gulfport, Mississippi
Hampton Behavioral Health Center ........................................................ Westhampton, New Jersey
Harbour Point Behavioral Health Center ................................................ Portsmouth, Virginia
Hartgrove Behavioral Health System ..................................................... Chicago, Illinois
Havenwyck Hospital ............................................................................... Auburn Hills, Michigan
Heartland Behavioral Health Services .................................................... Nevada, Missouri
Hermitage Hall ........................................................................................ Nashville, Tennessee
Heritage Oaks Hospital .......................................................................... Sacramento, California
Heritage Oaks Patient Enrichment Center .............................................. Sacramento, California
Hickory Trail Hospital ............................................................................ DeSoto, Texas
Highlands Behavioral Health System ..................................................... Highlands Ranch, Colorado
Hill Crest Behavioral Health Services .................................................... Birmingham, Alabama
Holly Hill Hospital .................................................................................. Raleigh, North Carolina
The Horsham Clinic ................................................................................ Ambler, Pennsylvania
HRI Hospital ........................................................................................... Brookline, Massachusetts
The Hughes Center ................................................................................. Danville, Virginia
Inland Northwest Behavioral Health (10) ............................................... Spokane, Washington
Intermountain Hospital ........................................................................... Boise, Idaho
Kempsville Center of Behavioral Health ................................................ Norfolk, Virginia
KeyStone Center ..................................................................................... Wallingford, Pennsylvania
Kingwood Pines Hospital ....................................................................... Kingwood, Texas

Number
of
Beds

Real
Property
Ownership
Interest

141
57
108
197
80
97
110
128
30
166
55
104
166
86
239

157
30
34
108
182
122
84
100
148
219
102
88
54
120
28
109
120
186
160
243
151
111
125
16
86
86
221
296
206
62
64
100
155
106
153
116

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

Owned
Leased
Leased
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

United States:

Location

Name of Facility
La Amistad Behavioral Health Services ................................................. Maitland, Florida
Lakeside Behavioral Health System ....................................................... Memphis, Tennessee
Lancaster Behavioral Health Hospital (9) ............................................... Lancaster, Pennsylvania
Laurel Heights Hospital .......................................................................... Atlanta, Georgia
Laurel Oaks Behavioral Health Center ................................................... Dothan, Alabama
Laurel Ridge Treatment Center ............................................................... San Antonio, Texas
Liberty Point Behavioral Healthcare ....................................................... Stauton, Virginia
Lighthouse Behavioral Health Hospital .................................................. Conway, South Carolina
Lighthouse Care Center of Augusta ........................................................ Augusta, Georgia
Lincoln Prairie Behavioral Health Center ............................................... Springfield, Illinois
Lincoln Trail Behavioral Health System ................................................. Radcliff, Kentucky
Mayhill Hospital ..................................................................................... Denton, Texas
McDowell Center for Children ............................................................... Dyersburg, Tennessee
The Meadows Psychiatric Center ........................................................... Centre Hall, Pennsylvania
Meridell Achievement Center ................................................................. Austin, Texas
Mesilla Valley Hospital .......................................................................... Las Cruces, New Mexico
Michael’s House ..................................................................................... Palm Springs, California
Michiana Behavioral Health ................................................................... Plymouth, Indiana
Midwest Center for Youth and Families ................................................. Kouts, Indiana
Millwood Hospital .................................................................................. Arlington, Texas
Mountain Youth Academy ...................................................................... Mountain City, Tennessee
Natchez Trace Youth Academy .............................................................. Waverly, Tennessee
Newport News Behavioral Health Center ............................................... Newport News, Virginia
North Spring Behavioral Healthcare ....................................................... Leesburg, Virginia
North Star Hospital ................................................................................. Anchorage, Alaska
North Star Bragaw .................................................................................. Anchorage, Alaska
Oak Plains Academy ............................................................................... Ashland City, Tennessee
Okaloosa Youth Academy ...................................................................... Crestview, Florida
Old Vineyard Behavioral Health Services .............................................. Winston-Salem, North Carolina
Palmer Residential Treatment Center ..................................................... Palmer, Alaska
Palmetto Lowcountry Behavioral Health ................................................ North Charleston, South Carolina
Palmetto Summerville Behavioral Health ............................................... Summerville, South Carolina
Palm Point Behavioral Health ................................................................. Titusville, FL
Palm Shores Behavioral Health Center ................................................... Bradenton, Florida
Palo Verde Behavioral Health................................................................... Tucson, Arizona
Parkwood Behavioral Health System ..................................................... Olive Branch, Mississippi
The Pavilion Behavioral Health System ................................................. Champaign, Illinois
Peachford Hospital .................................................................................. Atlanta, Georgia
Pembroke Hospital .................................................................................. Pembroke, Massachusetts
Pinnacle Pointe Behavioral Healthcare System ...................................... Little Rock, Arkansas
Poplar Springs Hospital .......................................................................... Petersburg, Virginia
Prairie St John’s ...................................................................................... Fargo, North Dakota
PRIDE Institute ....................................................................................... Eden Prairie, Minnesota
Provo Canyon Behavioral Hospital ......................................................... Orem, Utah
Provo Canyon School ............................................................................. Provo, Utah
Psychiatric Institute of Washington ........................................................ Washington, D.C.
Quail Run Behavioral Health .................................................................. Phoenix, Arizona
The Recovery Center .............................................................................. Wichita Falls, Texas
The Ridge Behavioral Health System ..................................................... Lexington, Kentucky
Rivendell Behavioral Health Hospital .................................................... Bowling Green, Kentucky
Rivendell Behavioral Health Services of Arkansas ................................ Benton, Arkansas
River Crest Hospital ................................................................................ San Angelo, Texas

Number
of
Beds

Real
Property
Ownership
Interest

85
373
126
124
118
330
58
105
82
97
140
59
32
119
134
120
90
83
74
134
90
115
132
127
74
30
98
75
164
30
108
64
74
65
84
148
122
246
120
127
208
158
42
80
274
130
116
34
110
125
80
80

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Leased
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned

United States:

Location

Jacksonville, Florida

Name of Facility
Riveredge Hospital ................................................................................. Forest Park, Illinois
River Oaks Hospital ................................................................................ New Orleans, Louisiana
River Park Hospital ................................................................................. Huntington, West Virginia
River Point Behavioral Health ................................................................
Rockford Center ...................................................................................... Newark, Delaware
Rolling Hills Hospital ............................................................................. Franklin, Tennessee
Roxbury Treatment Center ..................................................................... Shippensburg, Pennsylvania
Salt Lake Behavioral Health ................................................................... Salt Lake City, Utah
San Marcos Treatment Center ................................................................ San Marcos, Texas
SandyPines Residential Treatment Center ............................................... Tequesta, Florida
Schick Shadel Hospital ............................................................................. Burien, Washington
Sierra Vista Hospital ............................................................................... Sacramento, California
Saint Simons by the Sea .......................................................................... St. Simons, Georgia
Skywood Recovery ................................................................................. Augusta, Michigan
Southeast Behavioral Health (14) ........................................................... Cape Girardeau, Missouri
Spring Mountain Sahara ......................................................................... Las Vegas, Nevada
Spring Mountain Treatment Center ........................................................ Las Vegas, Nevada
Springwoods Behavioral Health ............................................................. Fayetteville, Arkansas
Stonington Institute ................................................................................. North Stonington, Connecticut
Streamwood Behavioral Healthcare System ........................................... Streamwood, Illinois
Summit Oaks Hospital ........................................................................... Summit, New Jersey
SummitRidge Hospital ............................................................................ Lawrenceville, Georgia
Suncoast Behavioral Health Center ........................................................ Bradenton, Florida
Texas NeuroRehab Center ..................................................................... Austin, Texas
Three Rivers Behavioral Health ............................................................. West Columbia, South Carolina
Three Rivers Midlands ............................................................................ West Columbia, South Carolina
Turning Point Care Center ...................................................................... Moultrie, Georgia
University Behavioral Center ................................................................. Orlando, Florida
University Behavioral Health of Denton ................................................. Denton, Texas
Valle Vista Health System ...................................................................... Greenwood, Indiana
Valley Hospital ....................................................................................... Phoenix, Arizona
The Vines Hospital ................................................................................. Ocala, Florida
Virginia Beach Psychiatric Center .......................................................... Virginia Beach, Virginia
Wekiva Springs Center ...........................................................................
Wellstone Regional Hospital ..................................................................
West Oaks Hospital ................................................................................ Houston, Texas
Willow Springs Center ............................................................................ Reno, Nevada
Windmoor Healthcare of Clearwater ...................................................... Clearwater, Florida
Windsor Laurelwood Center for Behavioral Medicine ........................... Willoughby, Ohio
Wyoming Behavioral Institute
Casper, Wyoming

Jacksonville, Florida
Jeffersonville, Indiana

United Kingdom:

Name of Facility

Location

Acer Clinic ............................................................................................. Chesterfield, UK
Acer Clinic 2 ........................................................................................... Chesterfield, UK
Adele Cottage ......................................................................................... Rainworth, UK
Albert Ward ........................................................................................... Darlington, UK
Amberwood Lodge ................................................................................ Dorset, UK
Ashbrook ................................................................................................. Birmingham, UK
Ashfield House ...................................................................................... Huddersfield, UK

Number
of
Beds

Real
Property
Ownership
Interest

210
126
187
84
148
130
112
118
265
149
60
171
101
100
102
30
110
80
64
178
126
96
60
123
122
64
79
112
104
132
122
98
100
120
100
176
116
144
160
129

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned

Number
of
Beds

14
14
2
26
9
16
6

Real
Property
Ownership
Interest

Owned
Owned
Owned
Owned
Owned
Owned
Owned

United Kingdom:

Name of Facility

Location

Beacon Lower ....................................................................................... Bradford, UK
Beacon Upper ........................................................................................ Bradford, UK
Beckly .................................................................................................... Halifax, UK
Beeches ................................................................................................... Retford, UK
Birches .................................................................................................... Newark, UK
Broughton House .................................................................................... Lincolnshire, UK
Broughton Lodge .................................................................................... Macclesfield, UK
CAS Brunel ............................................................................................. Bristol, UK
Chaseways .............................................................................................. Sawbridgeworth, UK
Cherry Tree House .................................................................................. Mansfield Woodhouse, UK
Conifers ................................................................................................... Derby, UK
Cygnet Alders Clinic .............................................................................. Gloucester, UK
Cygnet Appletree ................................................................................... Meadowfield, UK
Cygnet Aspen House ............................................................................. Doncaster, UK
Cygnet Aspen Lodge .............................................................................. Doncaster, UK
Cygnet Bostall House ............................................................................ Abbey Wood, UK
Cygnet Cedars ......................................................................................... Birmingham, UK
Cygnet Cedar Vale .................................................................................. East Bridgeford, UK
Cygnet Churchill ..................................................................................... London, UK
Cygnet Delfryn House ............................................................................ Flintshire, UK
Cygnet Delfryn Lodge ............................................................................ Flintshire, UK
Cygnet Elms ............................................................................................ Birmingham, UK
Cygnet Fountains .................................................................................... Blackburn, UK
Cygnet Grange ........................................................................................ Sutton-in-Ashfield, UK
Cygnet Heathers ...................................................................................... West Bromwich, UK
Cygnet Hospital—Beckton ..................................................................... London, UK
Cygnet Hospital—Bierley ....................................................................... Bradford, UK
Cygnet Hospital—Blackheath................................................................. London, UK
Cygnet Hospital Bury ............................................................................. Bury, UK
Cygnet Hospital Clifton .......................................................................... Nottingham, UK
Cygnet Hospital—Derby ........................................................................ Derby, UK
Cygnet Hospital—Ealing ........................................................................ Ealing, UK
Cygnet Hospital—Godden Green ........................................................... Sevenoaks, UK
Cygnet Hospital—Harrogate .................................................................. Middlesex, UK
Cygnet Hospital—Harrow ...................................................................... Harrow, UK
Cygnet Hospital Hexham ........................................................................ Northumberland, UK
Cygnet Hospital—Kewstoke .................................................................. Weston-super-Mare, UK
Cygnet Hospital Sheffield ....................................................................... Sheffield, UK
Cygnet Hospital—Stevenage .................................................................. Stevenage, UK
Cygnet Hospital—Taunton ..................................................................... Taunton, UK
Cygnet Hospital Woking ......................................................................... Woking, UK
Cygnet Hospital—Wyke ......................................................................... Bradford, UK
Cygnet Joyce Parker Hospital ................................................................. Coventry, UK
Cygnet Lodge .......................................................................................... Sutton-in-Ashfield, UK
Cygnet Lodge—Brighouse ..................................................................... Brighouse, UK
Cygnet Lodge – Kenton .......................................................................... Middlesex, UK
Cygnet Lodge—Lewisham ..................................................................... London, UK
Cygnet Lodge – Salford .......................................................................... Manchester, UK
Cygnet Lodge – Woking ......................................................................... Woking, UK
Cygnet Manor ......................................................................................... Shirebrook, UK
Cygnet Newham House .......................................................................... Middlesbrough, UK
Cygnet Nield House ................................................................................ Crewe, UK

Number
of
Beds

Real
Property
Ownership
Interest

8
8
12
12
6
34
20
32
6
6
7
20
26
20
16
6
24
14
57
28
24
10
32
8
20
62
63
32
167
25
50
26
39
36
61
27
72
57
88
57
60
52
56
8
25
15
17
24
31
20
20
30

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

United Kingdom:

Name of Facility

Location

Cygnet Oaks ............................................................................................ Barnsley, UK
Cygnet Pindar House .............................................................................. Barnsley, UK
Cygnet Raglan House ............................................................................. West Midlands, UK
Cygnet Sedgley House ............................................................................ Wolverhampton, UK
Cygnet Sedgley Lodge ............................................................................ Wolverhampton, UK
Cygnet Sherwood House ......................................................................... Mansfield, UK
Cygnet Sherwood Lodge ......................................................................... Mansfield, UK
Cygnet St. Augustine’s ........................................................................... Stoke on Trent, UK
Cygnet St. Teilo House ........................................................................... Gwent, UK
Cygnet St. Williams ................................................................................ Darlington, UK
Cygnet Storthfield House ........................................................................ Derbyshire, UK
Cygnet Victoria House ............................................................................ Darlington, UK
Cygnet Views .......................................................................................... Matlock, UK
Cygnet Wallace Hospital ........................................................................ Dundee, UK
Cygnet Wast Hills ................................................................................... Birmingham, UK
Cygnet Woodside .................................................................................... Bradford, UK
Dene Brook ............................................................................................. Rotherham, UK
Devon Lodge........................................................................................... Southampton, UK
Dove Valley Mews ................................................................................. Barnsley, UK
Ducks Halt .............................................................................................. Essex, UK
Eleni House ............................................................................................. Essex, UK
Ellen Mhor .............................................................................................. Dundee, UK
Elston House ........................................................................................... Newark, UK
Fairways ..................................................................................................
Ipswich, UK
Farm Lodge ............................................................................................. Rainham, UK
The Fields ............................................................................................... Sheffield, UK
Highwoods .............................................................................................. Colchester, UK
Gables ..................................................................................................... Essex, UK
Gledcliffe Road ....................................................................................... Huddersfield, UK
Gledholt .................................................................................................. Huddersfield, UK
Gledholt Mews ........................................................................................ Huddersfield, UK
Glyn House ............................................................................................. Stoke on Trent, UK
Hawkstone .............................................................................................. Keighley, UK
Hollyhurst ............................................................................................... Darlington, UK
Hope House............................................................................................. Hartlepool, UK
Kirkside House ....................................................................................... Leeds, UK
Kirkside Lodge ....................................................................................... Leeds, UK
Langdale Coach House ........................................................................... Huddersfield, UK
Langdale House ...................................................................................... Huddersfield, UK
Larch Court ............................................................................................. Essex, UK
Limes Houses .......................................................................................... Mansfield, UK
Lindsay House ....................................................................................... Dundee, UK
Longfield House ..................................................................................... Bradford, UK
Lowry House........................................................................................... Hyde, UK
Maidstone ............................................................................................... Maidstone, UK
Marion House ......................................................................................... Derby, UK
Meadows Mews .....................................................................................
Tipton, UK
Morgan House ......................................................................................... Stoke on Trent, UK
Newbus Grange ....................................................................................... Neasham, UK
Nightingale ............................................................................................. Dorset, UK
Norcott House ......................................................................................... Liversedge, UK
Norcott Lodge ......................................................................................... Liversedge, UK

Number
of
Beds

Real
Property
Ownership
Interest

35
22
25
20
14
30
17
32
23
12
22
6
10
10
26
9
13
12
10
5
8
12
8
8
5
54
20
7
6
9
21
5
10
19
11
7
8
3
8
4
6
2
9
12
65
5
10
5
17
10
11
9

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

United Kingdom:

Name of Facility

Location

Oak Court ................................................................................................ Essex, UK
Oakhurst Lodge ....................................................................................... Hampshire, UK
Oaklands ................................................................................................. Northumberland, UK
Old Leigh House ..................................................................................... Essex, UK
The Orchards........................................................................................... Essex, UK
Outwood ................................................................................................. Leeds, UK
Oxley Lodge ........................................................................................... Huddersfield, UK
Oxley Woodhouse ................................................................................... Huddersfield, UK
Pines ........................................................................................................ Mansfield Woodhouse, UK
45 Portland Road .................................................................................... Birmingham, UK
Ramsey ................................................................................................... Colchester, UK
Ranaich House ........................................................................................ Dunblane, UK
Redlands ................................................................................................. Darlington, UK
Rhyd Alyn ............................................................................................... Flintshire, UK
Shear Meadow ........................................................................................ Hemel Hempstead, UK
Sherwood Lodge Step Down .................................................................. Mansfield, UK
The Squirrels ........................................................................................... Hampshire, UK
4, 5, 7 The Sycamores ............................................................................. South Normanton, UK
15 The Sycamores ................................................................................... South Normanton, UK
Tabley House Nursing Home .................................................................. Knutsford, UK
Thistle House .......................................................................................... Dundee, UK
Thornfield Grange ................................................................................... Bishop Auckland, UK
Thornfield House .................................................................................... Bradford, UK
Thors Park ............................................................................................... Essex, UK
Toller Road ............................................................................................. Leicestershire, UK
Trinity House .......................................................................................... Galloway, UK
Tupwood Gate Nursing Home ................................................................ Caterham, UK
1 Vincent Court ....................................................................................... Lancashire, UK
Walkern Lodge ....................................................................................... Stevenage, UK
Whorlton Hall ........................................................................................ County Durham, UK
Willow House ......................................................................................... Birmingham, UK
12 Woodcross Street ............................................................................... Wolverhampton, UK
Woodrow House ..................................................................................... Stockport, UK
Yew Trees ............................................................................................... Essex, UK

Puerto Rico:

Name of Facility
First Hospital Panamericano—Cidra ........................................................ Cidra, Puerto Rico
First Hospital Panamericano—San Juan ................................................... San Juan, Puerto Rico
First Hospital Panamericano—Ponce ....................................................... Ponce, Puerto Rico

Location

Number
of
Beds

Real
Property
Ownership
Interest

12
8
19
7
5
10
4
13
7
4
21
14
5
6
4
9
9
6
4
51
10
9
7
14
8
13
33
5
4
17
8
8
9
10

Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

Number
of
Beds

165
45
30

Real
Property
Ownership
Interest

Owned
Owned
Owned

Outpatient Behavioral Health Care Facilities

United States:

Location

Name of Facility
Arbour Counseling Services .............................................................................................. Rockland, Massachusetts
Arbour Senior Care ............................................................................................................ Rockland, Massachusetts
Behavioral Educational Services ....................................................................................... Riverdale, Florida
The Canyon at Santa Monica ............................................................................................. Santa Monica, California
First Home Care (VA) ....................................................................................................... Portsmouth, Virginia
Foundations Atlanta at Midtown ........................................................................................ Atlanta, Georgia
Foundations San Francisco ................................................................................................ San Francisco, California
Michael’s House Outpatient .............................................................................................. Palm Springs, California
The Pointe Outpatient Behavioral Health Services ............................................................ Little Rock, Arkansas
Saint Louis Behavioral Medicine Institute ......................................................................... St. Louis, Missouri
Skywood Outpatient .......................................................................................................... Bingham Farms, Michigan
Talbott Recovery ................................................................................................................ Atlanta, Georgia

United Kingdom:

Name of Facility

Location

Long Eaton Day Services ................................................................................................... Nottingham, UK
Sheffield Day Services ....................................................................................................... Sheffield, UK

Outpatient Centers and Surgical Hospital

Name of Facility

Location

Aiken Surgery Center ........................................................................................................ Aiken, South Carolina
Cancer Care Institute of Carolina ....................................................................................... Aiken, South Carolina
Cornerstone Regional Hospital (4) .................................................................................... Edinburg, Texas
Manatee Diagnostic Center ................................................................................................ Bradenton, Florida
Palms Westside Clinic ASC (6) ......................................................................................... Royal Palm Beach, Florida
Quail Surgical and Pain Management Center (11) ............................................................. Reno, Nevada
Temecula Valley Day Surgery (5) ..................................................................................... Murrieta, California

Real
Property
Ownership
Interest

Owned
Owned
Leased
Leased
Leased
Leased
Leased
Leased
Leased
Owned
Leased
Owned

Real
Property
Ownership
Interest

Owned
Owned

Real
Property
Ownership
Interest

Owned
Owned
Leased
Leased
Leased
Leased
Leased

(1) We hold an 80% ownership interest in this facility through a general partnership interest in a limited partnership. The remaining

20% ownership interest is held by an unaffiliated third party which leases the property to the partnership for nominal rent. The
term of the partnership is scheduled to expire in July, 2047, and we have five, five-year extension options. The term of the lease
is coterminous with the partnership term with a fair market value rental of the property during the extension term.

(2) Real property leased from Universal Health Realty Income Trust.
(3) These entities are consolidated under one license operating as the South Texas Health System.
(4) We manage and own a noncontrolling interest of approximately 50% in the entity that operates this facility.
(5) We manage and own a majority interest in an LLC that owns and operates this center.
(6) We own a noncontrolling ownership interest of approximately 50% in the entity that operates this facility that is managed by a

third-party.

(7) We hold an 91% ownership interest in this facility through both general and limited partnership interests. The remaining 9%

ownership interest is held by unaffiliated third parties.

(8) Land of this facility is leased.
(9) We manage and own a noncontrolling interest of 50% in this facility. The remaining 50% ownership interest is held by an

unaffiliated third party. Land of this facility is leased from the unaffiliated third party member.

(10) We manage and hold an 80% ownership interest in this facility. The remaining 20% ownership interest is held by an unaffiliated

third party.

(11) We hold a 51% ownership interest in this facility. The remaining 49% ownership interest is held by unaffiliated third parties.
(12) We manage and hold a 52% ownership interest in this facility. The remaining 48% ownership interest is held by an unaffiliated

third party.

(13) We manage and hold a 74.1% ownership interest in this facility. The remaining 25.9% ownership interest is held by an

unaffiliated third party.

(14) We manage and hold a 75% ownership interest in this facility. The remaining 25% ownership interest is held by an unaffiliated

third party.

(15) Hospital is scheduled to be completed and opened during the first quarter of 2022.

We own or lease medical office buildings adjoining some of our hospitals. We believe that the leases on the facilities, medical
office buildings and other real estate leased or owned by us do not impose any material limitation on our operations. The aggregate
lease payments on facilities leased by us were $86 million in 2021 and $82 million in both 2020 and 2019.

ITEM 3.

Legal Proceedings

The information regarding our legal proceedings is contained in Note 8 to the Consolidated Financial Statements -

Commitments and Contingencies, as included this Form 10-K, is incorporated herein by reference.

ITEM 4. Mine Safety Disclosures

Not applicable.

PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our Class B Common Stock is traded on the New York Stock Exchange under the symbol UHS. Shares of our Class A, Class C
and Class D Common Stock are not traded in any public market, but are each convertible into shares of our Class B Common Stock on
a share-for-share basis.

The number of stockholders of record as of January 31, 2022, were as follows:

Class A Common
Class B Common
Class C Common
Class D Common

17
814
1
90

Stock Repurchase Programs

On February 24, 2022, our Board of Directors authorized a $1.4 billion increase to our stock repurchase program. Pursuant to

this program, shares of our Class B Common Stock may be repurchased, from time to time as conditions allow, on the open market or
in negotiated private transactions. There is no expiration date for our stock repurchase programs.

As reflected below, during the fourth quarter of 2021, pursuant to previous share repurchase authorizations, including a $1.0
billion increase to the program approved by our Board of Directors in July, 2021, we have repurchased approximately 3.43 million
shares at an aggregate cost of approximately $432.3 million. For the year ended December 31, 2021, we have repurchased
approximately 8.41 million shares at an aggregate cost of approximately $1.201 billion. As of December 31, 2021, prior to the above-
mentioned increased authorization approved in February, 2022, we had an aggregate available repurchase authorization of $358.2
million.

During the period of October 1, 2021 through December 31, 2021, we repurchased the following shares:

Total
number of
shares
purchased
(1)

Additional
Dollars
Authorized
For
Repurchase
(in
thousands)
—
29
— 2,222,037
— 1,203,913

Total
number
of
shares
cancelled

Average
price paid
per share
for forfeited
restricted
shares

Total
Number
of shares
purchased
as part of
publicly
announced
programs
(2)

Average
price paid
per share
for shares
purchased
as part of
publicly
announced
program

Aggregate
purchase
price paid
(in thousands)

Maximum
number of
dollars that
may yet be
purchased
under the
program
(in
thousands)

731 $
1,206 $
1,301 $

0.01
0.01
0.01

— $

— $
2,221,796 $ 126.53 $
1,203,595 $ 125.57 $

— $
281,125 $
151,137 $

790,495
509,370
358,233

- 3,425,979

3,238 $

0.01

3,425,391 $ 126.19 $

432,262

October, 2021
November, 2021
December, 2021
Total October through
December

(1)

(2)

During the three-month period ended December 31, 2021, 588 shares were repurchased in connection with income tax
withholding obligations resulting from the exercise of stock options and the vesting of restricted stock grants.

The only publicly announced program pursuant to which the shares were repurchased was the share repurchase program
described above. There is no other plan or program that has expired during this time period. Also, there is no other plan
or program that we have determined to terminate prior to expiration, or under which we do not intend to make further
purchases.

Dividends

Our Board of Directors approved the resumption of quarterly dividend payments of $0.20 per share beginning in the first quarter

of 2021 (after being temporarily suspended during 2020 as part of various COVID-19 initiatives). During the year ended December
31, 2021 we paid dividends of $0.80 per share. Dividend equivalents are accrued on unvested restricted stock units and are paid upon
vesting of the restricted stock unit.

Our Credit Agreement contains covenants that include limitations on, among other things, dividends and stock repurchases (see

below in Capital Resources-Credit Facilities and Outstanding Debt Securities).

Equity Compensation

Refer to Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, of this

report for information regarding securities authorized for issuance under our equity compensation plans.

Stock Price Performance Graph

The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return on
the stock included in the Standard & Poor’s 500 Index and a Peer Group Index during the five-year period ended December 31, 2021.
The graph assumes an investment of $100 made in our common stock and each Index as of January 1, 2017 and has been weighted
based on market capitalization. Note that our common stock price performance shown below should not be viewed as being indicative
of future performance.

Companies in the peer group, which consist of companies in the S&P 500 Index or S&P MidCap 400 Index are as follows:
Acadia Healthcare Company, Inc., Community Health Systems, Inc., HCA Healthcare, Inc., LifePoint Health, Inc. (included until
November, 2018, when it was acquired by Apollo Management) and Tenet Healthcare Corporation.

Comparison of Cumulative Five Year Total Return

$400

$300

$200

$100

2016

2017

2018

2019

2020

2021

Universal Health Services

S&P 500 Index

Peer Group

Company Name / Index
Universal Health Services, Inc.
S&P 500 Index
Peer Group

ITEM 6.

[RESERVED]

2016 Base
100.00
$
100.00
$
100.00
$

2017
106.93
121.83
113.54

$
$
$

2018
110.31
116.49
154.00

$
$
$

2019
136.36 $
153.17 $
191.48 $

2020
130.90
181.35
218.39

$
$
$

2021
124.14
233.41
345.88

$
$
$

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended
to promote an understanding of our operating results and financial condition. The MD&A is provided as a supplement to, and should
be read in conjunction with, our consolidated financial statements and the accompanying notes to the Consolidated Financial
Statements, as included in this Annual Report on Form 10-K. The MD&A contains forward-looking statements that involve risks,
uncertainties, and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a
result of various factors, including, but not limited to, those presented under Item 1A. Risk Factors, and below in Forward-Looking
Statements and Risk Factors and as included elsewhere in this Annual Report on Form 10-K. This section generally discusses our
results of operations for the year ended December 31, 2021 as compared to the year ended December 31, 2020. For discussion of our
result of operations and changes in our financial condition for the year ended December 31, 2020 as compared to the year ended
December 31, 2019, please refer to Part II, Management’s Discussion and Analysis of Financial Condition and Results of Operations
in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on
February 25, 2021.

Overview

Our principal business is owning and operating, through our subsidiaries, acute care hospitals and outpatient facilities and

behavioral health care facilities.

As of February 24, 2022, we owned and/or operated 363 inpatient facilities and 40 outpatient and other facilities including the

following located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico:

Acute care facilities located in the U.S.:






Behavioral health care facilities (335 inpatient facilities and 14 outpatient facilities):

Located in the U.S.:




187 inpatient behavioral health care facilities, and;
12 outpatient behavioral health care facilities.

Located in the U.K.:




145 inpatient behavioral health care facilities, and;
2 outpatient behavioral health care facilities.

Located in Puerto Rico:



3 inpatient behavioral health care facilities.

Services provided by our hospitals include general and specialty surgery, internal medicine, obstetrics, emergency room care,

Forward-Looking Statements and Risk Factors

You should carefully review the information contained in this Annual Report, and should particularly consider any risk factors
that we set forth in this Annual Report on Form 10-K for the year ended December 31, 2021, and in other reports or documents that
we file from time to time with the Securities and Exchange Commission (the “SEC”). In this Annual Report, we state our beliefs of
future events and of our future financial performance. This Annual Report contains “forward-looking statements” that reflect our
current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking
statements include, among other things, the information concerning our possible future results of operations, business and growth

strategies, financing plans, expectations that regulatory developments or other matters will not have a material adverse effect on our
business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which
we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions, and statements of our goals
and objectives, and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,”
“could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,”
“appears,” “projects” and similar expressions, as well as statements in future tense, identify forward-looking statements. In evaluating
those statements, you should specifically consider various factors, including the risks related to healthcare industry trends and those
set forth herein in Item 1A. Risk Factors. Those factors may cause our actual results to differ materially from any of our forward-
looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be
accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based
on information available at the time and/or our good faith belief with respect to future events, and is subject to risks and uncertainties
that could cause actual performance or results to differ materially from those expressed in the statements. Such factors include, among
other things, the following:



we are subject to risks associated with public health threats and epidemics, including the health concerns relating to the
COVID-19 pandemic. In January 2020, the Centers for Disease Control and Prevention (“CDC”) confirmed the spread of
the disease to the United States. In March 2020, the World Health Organization declared the COVID-19 outbreak a
pandemic. The federal government has declared COVID-19 a national emergency, as many federal and state authorities
have implemented aggressive measures to “flatten the curve” of confirmed individuals diagnosed with COVID-19 in an
attempt to curtail the spread of the virus and to avoid overwhelming the health care system;

the impact of the COVID-19 pandemic, which began during the second half of March, 2020, has had a material effect on
our operations and financial results since that time. The COVID-19 vaccination process commenced during the first
quarter of 2021. Since that time through the second quarter of 2021, we had generally experienced a decline in COVID-19
patients as well as a corresponding recovery in non-COVID patient activity. However, during the third and fourth
quarters of 2021, and continuing into the first quarter of 2022, our facilities generally experienced an increase in COVID-
19 patients resulting from the Delta and, more recently, the highly transmissible Omicron variants. Booster doses for
COVID-19 vaccinations began during the third quarter of 2021, and while we expect the administration of vaccines
booster doses will assist in easing the number of COVID-19 patients, the pace at which this is likely to occur is very
difficult to predict. Also, the COVID-19 pandemic has led to a constrained supply environment which could result in
higher cost to procure, and potential unavailability of, critical personal protection equipment, pharmaceuticals and medical
supplies. Should a supply disruption result in the inability to obtain especially high margin drugs and compound
components necessary for patient care, our consolidated financial statements could be negatively impacted. As of
December 31, 2021, we have not experienced a significant impact in the availability of supplies from the COVID-19
pandemic. Since the future volumes and severity of COVID-19 patients remain highly uncertain and subject to change,
including potential increases in future COVID-19 patient volumes caused by new variants of the virus, as well as related
pressures on staffing and wage rates and the strained supply environment, we are not able to fully quantify the impact that
these factors will have on our future financial results. However, developments related to the COVID-19 pandemic could
materially affect our financial performance during 2022. Even after the COVID-19 pandemic has subsided, we may
continue to experience materially adverse impacts on our financial condition and our results of operations as a result of its
macroeconomic impact, and many of our known risks described in the Risk Factors section of our Annual Report on Form
10-K for the year ended December 31, 2021;

the nationwide shortage of nurses and other clinical staff and support personnel has been a significant operating issue
facing us and other healthcare providers. In particular, like others in the healthcare industry, we continue to experience a
shortage of nurses and other clinical staff and support personnel at our acute care and behavioral health care hospitals in
many geographic areas, which shortage has been exacerbated by the COVID‑19 pandemic. We are treating patients with
COVID‑19 in our facilities and, in some areas, the increased demand for care is putting a strain on our resources and staff,
which has required us to utilize higher‑cost temporary labor and pay premiums above standard compensation for essential
workers. The length and extent of the disruptions caused by the COVID‑19 pandemic are currently unknown; however,
we expect such disruptions to continue into 2022 and potentially throughout the duration of the pandemic and beyond.
This staffing shortage may require us to further enhance wages and benefits to recruit and retain nurses and other clinical
staff and support personnel or require us to hire expensive temporary personnel. To the extent we cannot maintain
sufficient staffing levels at our hospitals, we may be required to limit the acute and behavioral health care services
provided at certain of our hospitals which would have a corresponding adverse effect on our net revenues. In addition, in
some markets like California, there are requirements to maintain specified nurse-staffing levels which could adversely
affect our net revenues to the extent we cannot meet those levels;



the Centers for Medicare and Medicaid Services (“CMS”) issued an Interim Final Rule (“IFR”) effective November 5,
2021 mandating COVID-19 vaccinations for all applicable staff at all Medicare and Medicaid certified facilities. Under
the IFR, facilities covered by this regulation must establish a policy ensuring all eligible staff have received the first dose



of a two-dose COVID-19 vaccine or a one-dose COVID-19 vaccine prior to providing any care, treatment, or other
services by December 5, 2021. All eligible staff must have received the necessary shots to be fully vaccinated – either two
doses of Pfizer or Moderna or one dose of Johnson & Johnson – by January 4, 2022. The regulation also provides for
exemptions based on recognized medical conditions or religious beliefs, observances, or practices. Under the IFR,
facilities must develop a similar process or plan for permitting exemptions in alignment with federal law. If facilities fail
to comply with the IFR by the deadlines established, they are subject to potential termination from the Medicare and
Medicaid program for non-compliance. In addition, the Occupational Safety and Health Administration also issued an
Emergency Temporary Standard (“ETS”) requiring all businesses with 100 or more employees to be vaccinated by
January 4, 2022. Pursuant to the ETS, those employees not vaccinated by that date will need to show a negative COVID-
19 test weekly and wear a face mask in the workplace. Legal challenges to these rules ensued, and the U.S. Supreme
Court has upheld a stay of the ETS requirements but permitted the IFR vaccination requirements to go into effect pending
additional litigation. CMS has indicated that hospitals in states not involved in the Supreme Court litigation are expected
to be in compliance with IFR vaccination requirements consistent with the dates referenced above. Hospitals in states that
were involved in the Supreme Court litigation must now come into compliance with first dose requirements by February
13, 2022 and second dose requirements by March 15, 2022. Hospitals in Texas must come into compliance with first
dose requirements by February 19, 2022 and second dose requirements by March 21, 2022 due to the recent termination
of separate litigation. We cannot predict at this time the potential viability or impact of any such additional
litigation. Implementation of these rules could have an impact on staffing at our facilities for those employees that are not
vaccinated in accordance with IFR and ETS requirements, and associated loss of revenues and increased costs resulting
from staffing issues could have a material adverse effect on our financial results;

the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), a stimulus package signed into law on
March 27, 2020, authorizes $100 billion in grant funding to hospitals and other healthcare providers to be distributed
through the Public Health and Social Services Emergency Fund (the “PHSSEF”). These funds are not required to be
repaid provided the recipients attest to and comply with certain terms and conditions, including limitations on balance
billing and not using PHSSEF funds to reimburse expenses or losses that other sources are obligated to reimburse.
However, since the expenses and losses will be ultimately measured over the life of the COVID-19 pandemic, potential
retrospective unfavorable adjustments in future periods, of funds recorded as revenues in prior periods, could occur. The
U.S. Department of Health and Human Services (“HHS”) initially distributed $30 billion of this funding based on each
provider’s share of total Medicare fee-for-service reimbursement in 2019. Subsequently, HHS determined that CARES
Act funding (including the $30 billion already distributed) would be allocated proportional to providers’ share of 2018 net
patient revenue. We have received payments from these initial distributions of the PHSSEF as disclosed herein. HHS has
indicated that distributions of the remaining $50 billion will be targeted primarily to hospitals in COVID-19 high impact
areas, to rural providers, safety net hospitals and certain Medicaid providers and to reimburse providers for COVID-19
related treatment of uninsured patients. We have received payments from these targeted distributions of the PHSSEF, as
disclosed herein. The CARES Act also makes other forms of financial assistance available to healthcare providers,
including through Medicare and Medicaid payment adjustments and an expansion of the Medicare Accelerated and
Advance Payment Program, which made available accelerated payments of Medicare funds in order to increase cash flow
to providers. On April 26, 2020, CMS announced it was reevaluating and temporarily suspending the Medicare
Accelerated and Advance Payment Program in light of the availability of the PHSSEF and the significant funds available
through other programs. We have received accelerated payments under this program during 2020, and returned early all
of those funds during the first quarter of 2021, as disclosed herein. The Paycheck Protection Program and Health Care
Enhancement Act (the “PPPHCE Act”), a stimulus package signed into law on April 24, 2020, includes additional
emergency appropriations for COVID-19 response, including $75 billion to be distributed to eligible providers through
the PHSSEF. A third phase of PHSSEF allocations made $24.5 billion available for providers who previously received,
rejected or accepted PHSSEF payments. Applicants that had not yet received PHSSEF payments of 2 percent of patient
revenue were to receive a payment that, when combined with prior payments (if any), equals 2 percent of patient care
revenue. Providers that have already received payments of approximately 2 percent of annual revenue from patient care
were potentially eligible for an additional payment. Recipients will not be required to repay the government for PHSSEF
funds received, provided they comply with HHS defined terms and conditions. On December 27, 2020, the Consolidated
Appropriations Act, 2021 (“CAA”) was signed into law. The CAA appropriated an additional $3 billion to the PHSSEF,
codified flexibility for providers to calculate lost revenues, and permitted parent organizations to allocate PHSSEF
targeted distributions to subsidiary organizations. The CAA also provides that not less than 85 percent of the unobligated
PHSSEF amounts and any future funds recovered from health care providers should be used for additional distributions
that consider financial losses and changes in operating expenses in the third or fourth quarters of 2020 and the first quarter
of 2021 that are attributable to the coronavirus. The CAA provided additional funding for testing, contact tracing and
vaccine administration. Providers receiving payments were required to sign terms and conditions regarding utilization of
the payments. Any provider receiving funds in excess of $10,000 in the aggregate will be required to report data elements
to HHS detailing utilization of the payments, and we will be required to file such reports. We, and other providers, will
report healthcare related expenses attributable to COVID-19 that have not been reimbursed by another source, which may
include general and administrative or healthcare related operating expenses. Funds may also be applied to lost revenues,
represented as a negative change in year-over-year net patient care operating income. The deadline for using all Provider

Relief Fund payments depends on the date of the payment received period; payments received in the first period of April
10, 2020 to June 30, 2020 were to have been expended by June 30, 2021 and payments received in the fourth period of
July 1, 2021 to December 31, 2021 must be expended by December 31, 2022. The American Rescue Plan Act of 2021
(“ARPA”), enacted on March 11, 2021, included funding directed at detecting, diagnosing, tracing, and monitoring
COVID-19 infections; establishing community vaccination centers and mobile vaccine units; promoting, distributing, and
tracking COVID-19 vaccines; and reimbursing rural hospitals and facilities for healthcare-related expenses and lost
revenues attributable to COVID-19. ARPA increased the eligibility for, and amount of, premium tax credits to purchase
health coverage through Patient Protection and Affordable Care Act, as amended by the Health and Education
Reconciliation Act (collectively, the “Legislation”). Further, ARPA set the Medicaid program’s federal medical assistance
percentage (“FMAP”) at 100 percent for amounts expended for COVID-19 vaccines and vaccine administration. ARPA
also increases the FMAP by 5 percent for eight calendar quarters to incentivize states to expand their Medicaid programs.
Finally, ARPA provides subsidies to cover 100 percent of health insurance premiums under the Consolidated Omnibus
Budget Reconciliation Act through September 30, 2021. There is a high degree of uncertainty surrounding the
implementation of the CARES Act, the PPPHCE Act, the CAA and ARPA, and the federal government may consider
additional stimulus and relief efforts, but we are unable to predict whether additional stimulus measures will be enacted or
their impact. There can be no assurance as to the total amount of financial and other types of assistance we will receive
under the CARES Act, the PPPHCE Act, the CAA and the ARPA, and it is difficult to predict the impact of such
legislation on our operations or how they will affect operations of our competitors. Moreover, we are unable to assess the
extent to which anticipated negative impacts on us arising from the COVID-19 pandemic will be offset by amounts or
benefits received or to be received under the CARES Act, the PPPHCE Act, the CAA and the ARPA;

our ability to comply with the existing laws and government regulations, and/or changes in laws and government
regulations;

an increasing number of legislative initiatives have been passed into law that may result in major changes in the health
care delivery system on a national or state level. For example, Congress has reduced to $0 the penalty for failing to
maintain health coverage that was part of the original Legislation as part of the Tax Cuts and Jobs Act. President Biden
has undertaken and is expected to undertake additional executive actions that will strengthen the Legislation and reverse
the policies of the prior administration. To date, the Biden administration has issued executive orders implementing a
special enrollment period permitting individuals to enroll in health plans outside of the annual open enrollment period and
reexamining policies that may undermine the Legislation or the Medicaid program. The ARPA’s expansion of subsidies to
purchase coverage through a Legislation exchange is anticipated to increase exchange enrollment. The Trump
Administration had directed the issuance of final rules (i) enabling the formation of association health plans that would be
exempt from certain Legislation requirements such as the provision of essential health benefits, (ii) expanding the
availability of short-term, limited duration health insurance, (iii) eliminating cost-sharing reduction payments to insurers
that would otherwise offset deductibles and other out-of-pocket expenses for health plan enrollees at or below 250 percent
of the federal poverty level, (iv) relaxing requirements for state innovation waivers that could reduce enrollment in the
individual and small group markets and lead to additional enrollment in short-term, limited duration insurance and
association health plans and (v) incentivizing the use of health reimbursement arrangements by employers to permit
employees to purchase health insurance in the individual market. The uncertainty resulting from these Executive Branch
policies may have led to reduced Exchange enrollment in 2018, 2019 and 2020. It is also anticipated that these policies, to
the extent that they remain as implemented, may create additional cost and reimbursement pressures on hospitals,
including ours. In addition, there have been numerous political and legal efforts to expand, repeal, replace or modify the
Legislation since its enactment, some of which have been successful, in part, in modifying the Legislation, as well as court
challenges to the constitutionality of the Legislation. The U.S. Supreme Court rejected the latest such case on June 17,
2021, when the Court held in California v. Texas that the plaintiffs lacked standing to challenge the Legislation’s
requirement to obtain minimum essential health insurance coverage, or the individual mandate. The Court dismissed the
case without specifically ruling on the constitutionality of the Legislation. As a result, the Legislation will continue to
remain law, in its entirety, likely for the foreseeable future. Any future efforts to challenge, replace or replace the
Legislation or expand or substantially amend its provision is unknown. See below in Sources of Revenue and Health
Care Reform for additional disclosure;

under the Legislation, hospitals are required to make public a list of their standard charges, and effective January 1, 2019,
CMS has required that this disclosure be in machine-readable format and include charges for all hospital items and
services and average charges for diagnosis-related groups. On November 27, 2019, CMS published a final rule on “Price
Transparency Requirements for Hospitals to Make Standard Charges Public.” This rule took effect on January 1, 2021 and
requires all hospitals to also make public their payor-specific negotiated rates, minimum negotiated rates, maximum
negotiated rates, and cash for all items and services, including individual items and services and service packages, that
could be provided by a hospital to a patient. Failure to comply with these requirements may result in daily monetary
penalties. On November 2, 2021, CMS released a final rule amending several hospital price transparency policies and
increasing the amount of penalties for noncompliance through the use of a scaling factor based on hospital bed count;



as part of the CAA, Congress passed legislation aimed at preventing or limiting patient balance billing in certain
circumstances. The CAA addresses surprise medical bills stemming from emergency services, out-of-network ancillary
providers at in-network facilities, and air ambulance carriers. The legislation prohibits surprise billing when out-of-
network emergency services or out-of-network services at an in-network facility are provided, unless informed consent is
received. In these circumstances providers are prohibited from billing the patient for any amounts that exceed in-network
cost-sharing requirements. On July 13, 2021, HHS, the Department of Labor and the Department of the Treasury issued an
interim final rule, which begins to implement the legislation. The rule would limit our ability to receive payment for
services at usually higher out-of-network rates in certain circumstances and prohibit out-of-network payments in other
circumstances;

possible unfavorable changes in the levels and terms of reimbursement for our charges by third party payers or
government based payers, including Medicare or Medicaid in the United States, and government based payers in the
United Kingdom;

our ability to enter into managed care provider agreements on acceptable terms and the ability of our competitors to do the
same;

the outcome of known and unknown litigation, government investigations, false claims act allegations, and liabilities and
other claims asserted against us and other matters as disclosed in Note 6 to the Consolidated Financial Statements -
Commitments and Contingencies and the effects of adverse publicity relating to such matters;

the unfavorable impact on our business of the deterioration in national, regional and local economic and business
conditions, including a worsening of unfavorable credit market conditions;

competition from other healthcare providers (including physician owned facilities) in certain markets;

technological and pharmaceutical improvements that increase the cost of providing, or reduce the demand for healthcare;

our ability to attract and retain qualified personnel, nurses, physicians and other healthcare professionals and the impact
on our labor expenses resulting from a shortage of nurses and other healthcare professionals;

demographic changes;

there is a heightened risk of future cybersecurity threats, including ransomware attacks targeting healthcare providers. If
successful, future cyberattacks could have a material adverse effect on our business. Any costs that we incur as a result of
a data security incident or breach, including costs to update our security protocols to mitigate such an incident or breach
could be significant. Any breach or failure in our operational security systems can result in loss of data or an unauthorized
disclosure of or access to sensitive or confidential member or protected personal or health information and could result in
significant penalties or fines, litigation, loss of customers, significant damage to our reputation and business, and other
losses. Previously, we had experienced a cyberattack in September, 2020 that had an adverse effect on our operating
results during the fourth quarter of 2020, before giving effect to partial recovery of the loss through receipt, during 2021,
of commercial insurance proceeds and collection of previously reserved patient accounts, as discussed herein;

the availability of suitable acquisition and divestiture opportunities and our ability to successfully integrate and improve
our acquisitions since failure to achieve expected acquisition benefits from certain of our prior or future acquisitions could
result in impairment charges for goodwill and purchased intangibles;

the impact of severe weather conditions, including the effects of hurricanes and climate change;

as discussed below in Sources of Revenue, we receive revenues from various state and county-based programs, including
Medicaid in all the states in which we operate. We receive annual Medicaid revenues of approximately $100 million, or
greater, from each of Texas, California, Nevada, Illinois, Pennsylvania, Washington, D.C., Kentucky, Florida and
Massachusetts. We also receive Medicaid disproportionate share hospital payments in certain states including Texas and
South Carolina. We are therefore particularly sensitive to potential reductions in Medicaid and other state-based revenue
programs as well as regulatory, economic, environmental and competitive changes in those states. We can provide no
assurance that reductions to revenues earned pursuant to these programs, and the effect of the COVID-19 pandemic on
state budgets, particularly in the above-mentioned states, will not have a material adverse effect on our future results of
operations;

our ability to continue to obtain capital on acceptable terms, including borrowed funds, to fund the future growth of our
business;

our inpatient acute care and behavioral health care facilities may experience decreasing admission and length of stay
trends;



our financial statements reflect large amounts due from various commercial and private payers and there can be no
assurance that failure of the payers to remit amounts due to us will not have a material adverse effect on our future results
of operations;

the Budget Control Act of 2011 (the “2011 Act”) imposed annual spending limits for most federal agencies and programs
aimed at reducing budget deficits by $917 billion between 2012 and 2021, according to a report released by the
Congressional Budget Office. Among its other provisions, the law established a bipartisan Congressional committee,
known as the Joint Select Committee on Deficit Reduction (the “Joint Committee”), which was tasked with making
recommendations aimed at reducing future federal budget deficits by an additional $1.5 trillion over 10 years. The Joint
Committee was unable to reach an agreement by the November 23, 2011 deadline and, as a result, across-the-board cuts to
discretionary, national defense and Medicare spending were implemented on March 1, 2013 resulting in Medicare
payment reductions of up to 2% per fiscal year with a uniform percentage reduction across all Medicare programs. The
Bipartisan Budget Act of 2015, enacted on November 2, 2015, continued the 2% reductions to Medicare reimbursement
imposed under the 2011 Act. Recent legislation has suspended payment reductions through December 31, 2021 in
exchange for extended cuts through 2030. Subsequent legislation extended the payment reduction suspension through
March 31, 2022, with a 1% payment reduction from then until June 30, 2022 and the full 2% payment reduction
thereafter. We cannot predict whether Congress will restructure the implemented Medicare payment reductions or what
other federal budget deficit reduction initiatives may be proposed by Congress going forward. See below in 2019 Novel
Coronavirus Disease Medicare and Medicaid Payment Related Legislation – Medicare Sequestration Relief, for
additional disclosure related to the favorable effect the legislative extensions have had/are expected to have on our results
of operations during 2020 and 2021;

uninsured and self-pay patients treated at our acute care facilities unfavorably impact our ability to satisfactorily and
timely collect our self-pay patient accounts;

changes in our business strategies or development plans;

in June, 2016, the United Kingdom affirmatively voted in a non-binding referendum in favor of the exit of the United
Kingdom (“U.K.”) from the European Union (the “Brexit”) and it was approved by vote of the British legislature. On
March 29, 2017, the United Kingdom triggered Article 50 of the Lisbon Treaty, formally starting negotiations regarding
its exit from the European Union. On January 31, 2020, the U.K. formally exited the European Union. On December 24,
2020, the United Kingdom and the European Union reached a post-Brexit trade and cooperation agreement that created
new business and security requirements and preserved the United Kingdom’s tariff- and quota-free access to the European
Union member states. The trade and cooperation agreement was provisionally applied as of January 1, 2021 and entered
into force on May 1, 2021, following ratification by the European Union. We do not know to what extent Brexit will
ultimately impact the business and regulatory environment in the U.K., the European Union, or other countries. Any of
these effects of Brexit, and others we cannot anticipate, could harm our business, financial condition and results of
operations, and;



other factors referenced herein or in our other filings with the Securities and Exchange Commission.

Given these uncertainties, risks and assumptions, as outlined above, you are cautioned not to place undue reliance on such
forward-looking statements. Our actual results and financial condition could differ materially from those expressed in, or implied by,
the forward-looking statements. Forward-looking statements speak only as of the date the statements are made. We assume no
obligation to publicly update any forward-looking statements to reflect actual results, changes in assumptions or changes in other
factors affecting forward-looking information, except as may be required by law. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires

us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying
notes.

A summary of our significant accounting policies is outlined in Note 1 to the financial statements. We consider our critical
accounting policies to be those that require us to make significant judgments and estimates when we prepare our financial statements,
including the following:

Revenue Recognition: We report net patient service revenue at the estimated net realizable amounts from patients and third-

party payers and others for services rendered. We have agreements with third-party payers that provide for payments to us at amounts
different from our established rates. Payment arrangements include rates per discharge, reimbursed costs, discounted charges and per
diem payments. Estimates of contractual allowances under managed care plans, which represent explicit price concessions, are based
upon the payment terms specified in the related contractual agreements. We closely monitor our historical collection rates, as well as
changes in applicable laws, rules and regulations and contract terms, to assure that provisions are made using the most accurate
information available. However, due to the complexities involved in these estimations, actual payments from payers may be different
from the amounts we estimate and record.

See Note 10 to the Consolidated Financial Statements-Revenue Recognition, for additional disclosure related to our revenues

including a disaggregation of our consolidated net revenues by major source for each of the periods presented herein.

We estimate our Medicare and Medicaid revenues using the latest available financial information, patient utilization data,

government provided data and in accordance with applicable Medicare and Medicaid payment rules and regulations. The laws and
regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation and as a result, there
is at least a reasonable possibility that recorded estimates will change by material amounts in the near term. Certain types of payments
by the Medicare program and state Medicaid programs (e.g. Medicare Disproportionate Share Hospital, Medicare Allowable Bad
Debts and Inpatient Psychiatric Services) are subject to retroactive adjustment in future periods as a result of administrative review
and audit and our estimates may vary from the final settlements. Such amounts are included in accounts receivable, net, on our
Consolidated Balance Sheets. The funding of both federal Medicare and state Medicaid programs are subject to legislative and
regulatory changes. As such, we cannot provide any assurance that future legislation and regulations, if enacted, will not have a
material impact on our future Medicare and Medicaid reimbursements. Adjustments related to the final settlement of these
retrospectively determined amounts did not materially impact our results in 2021, 2020 or 2019. If it were to occur, each 1%
adjustment to our estimated net Medicare revenues that are subject to retrospective review and settlement as of December 31, 2021,
would change our after-tax net income by approximately $1 million.

Charity Care, Uninsured Discounts and Other Adjustments to Revenue: Collection of receivables from third-party payers
and patients is our primary source of cash and is critical to our operating performance. Our primary collection risks relate to uninsured
patients and the portion of the bill which is the patient’s responsibility, primarily co-payments and deductibles. We estimate our
revenue adjustments for implicit price concessions based on general factors such as payer mix, the aging of the receivables and
historical collection experience. We routinely review accounts receivable balances in conjunction with these factors and other
economic conditions which might ultimately affect the collectability of the patient accounts and make adjustments to our allowances
as warranted. At our acute care hospitals, third party liability accounts are pursued until all payment and adjustments are posted to the
patient account. For those accounts with a patient balance after third party liability is finalized or accounts for uninsured patients, the
patient receives statements and collection letters.

Historically, a significant portion of the patients treated throughout our portfolio of acute care hospitals are uninsured patients

which, in part, has resulted from patients who are employed but do not have health insurance or who have policies with relatively high
deductibles. Patients treated at our hospitals for non-elective services, who have gross income of various amounts, dependent upon the
state, ranging from 200% to 400% of the federal poverty guidelines, are deemed eligible for charity care. The federal poverty
guidelines are established by the federal government and are based on income and family size. Because we do not pursue collection of
amounts that qualify as charity care, the transaction price is fully adjusted and there is no impact in our net revenues or in our accounts
receivable, net.

A portion of the accounts receivable at our acute care facilities are comprised of Medicaid accounts that are pending approval
from third-party payers but we also have smaller amounts due from other miscellaneous payers such as county indigent programs in
certain states. Our patient registration process includes an interview of the patient or the patient’s responsible party at the time of
registration. At that time, an insurance eligibility determination is made and an insurance plan code is assigned. There are various pre-
established insurance profiles in our patient accounting system which determine the expected insurance reimbursement for each
patient based on the insurance plan code assigned and the services rendered. Certain patients may be classified as Medicaid pending at
registration based upon a screening evaluation if we are unable to definitively determine if they are currently Medicaid eligible. When
a patient is registered as Medicaid eligible or Medicaid pending, our patient accounting system records net revenues for services
provided to that patient based upon the established Medicaid reimbursement rates, subject to the ultimate disposition of the patient’s
Medicaid eligibility. When the patient’s ultimate eligibility is determined, reclassifications may occur which impacts net revenues in
future periods. Although the patient’s ultimate eligibility determination may result in adjustments to net revenues, these adjustments
did not have a material impact on our results of operations in 2021, 2020 or 2019 since our facilities make estimates at each financial
reporting period to adjust revenue based on historical collections.

We also provide discounts to uninsured patients (included in “uninsured discounts” amounts below) who do not qualify for

Medicaid or charity care. Because we do not pursue collection of amounts classified as uninsured discounts, the transaction price is
fully adjusted and there is no impact in our net revenues or in our net accounts receivable. In implementing the discount policy, we
first attempt to qualify uninsured patients for governmental programs, charity care or any other discount program. If an uninsured
patient does not qualify for these programs, the uninsured discount is applied.

Uncompensated care (charity care and uninsured discounts):

The following table shows the amounts recorded at our acute care hospitals for charity care and uninsured discounts, based on

charges at established rates, for the years ended December 31, 2021 and 2020:

Charity care
Uninsured discounts
Total uncompensated care

(dollar amounts in thousands)

2021

2020

Amount

661,965
1,336,319
$ 1,998,284

Amount

33% $
622,668
67% 1,578,470
100% $ 2,201,138

28%
72%
100%

The estimated cost of providing uncompensated care:

The estimated cost of providing uncompensated care, as reflected below, were based on a calculation which multiplied the

percentage of operating expenses for our acute care hospitals to gross charges for those hospitals by the above-mentioned total
uncompensated care amounts. The percentage of cost to gross charges is calculated based on the total operating expenses for our acute
care facilities divided by gross patient service revenue for those facilities. An increase in the level of uninsured patients to our
facilities and the resulting adverse trends in the adjustments to net revenues and uncompensated care provided could have a material
unfavorable impact on our future operating results.

Estimated cost of providing charity care
Estimated cost of providing uninsured discounts related care
Estimated cost of providing uncompensated care

(amounts in thousands)

2021

2020

72,095 $
145,538
217,633 $

73,690
186,804
260,494

Self-Insured/Other Insurance Risks: We provide for self-insured risks including general and professional liability claims,

workers’ compensation claims and healthcare and dental claims. Our estimated liability for self-insured professional and general
liability claims is based on a number of factors including, among other things, the number of asserted claims and reported incidents,
estimates of losses for these claims based on recent and historical settlement amounts, estimate of incurred but not reported claims
based on historical experience, and estimates of amounts recoverable under our commercial insurance policies. All relevant
information, including our own historical experience is used in estimating the expected amount of claims. While we continuously
monitor these factors, our ultimate liability for professional and general liability claims could change materially from our current
estimates due to inherent uncertainties involved in making this estimate. Our estimated self-insured reserves are reviewed and
changed, if necessary, at each reporting date and changes are recognized currently as additional expense or as a reduction of expense.
In addition, we also: (i) own commercial health insurers headquartered in Reno, Nevada, and Puerto Rico and; (ii) maintain self-
insured employee benefits programs for employee healthcare and dental claims. The ultimate costs related to these
programs/operations include expenses for claims incurred and paid in addition to an accrual for the estimated expenses incurred in
connection with claims incurred but not yet reported. Given our significant insurance-related exposure, there can be no assurance that
a sharp increase in the number and/or severity of claims asserted against us will not have a material adverse effect on our future results
of operations.

See Note 8 to the Consolidated Financial Statements-Commitments and Contingencies, for additional disclosure related to our

professional and general liability, workers’ compensation liability and property insurance.

Long-Lived Assets: We review our long-lived assets for impairment whenever events or circumstances indicate that the

carrying value of these assets may not be recoverable. The assessment of possible impairment is based on our ability to recover the
carrying value of our asset based on our estimate of its undiscounted future cash flow. If the analysis indicates that the carrying value
is not recoverable from future cash flows, the asset is written down to its estimated fair value and an impairment loss is recognized.
Fair values are determined based on estimated future cash flows using appropriate discount rates.

Goodwill and Intangible Assets: Goodwill and indefinite-lived intangible assets are reviewed for impairment at the reporting

unit level on an annual basis or more often if indicators of impairment arise. Our judgments regarding the existence of impairment
indicators are based on market conditions and operational performance of each reporting unit. We have designated October 1st as our
annual impairment assessment date for our goodwill and indefinite-lived intangible assets.

We performed an impairment assessment as of October 1, 2021 which indicated no impairment of goodwill. There were also no

goodwill impairments during 2020 or 2019.

Future changes in the estimates used to conduct the impairment review, including profitability and market value projections,
could indicate impairment in future periods potentially resulting in a write-off of a portion or all of our goodwill or indefinite-lived
intangible assets.

Income Taxes: Deferred tax assets and liabilities are recognized for the amount of taxes payable or deductible in future years as
a result of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. We believe

that future income will enable us to realize our deferred tax assets net of recorded valuation allowances relating to state and foreign net
operating loss carry-forwards, foreign tax credits, and interest deduction limitations.

We operate in multiple jurisdictions with varying tax laws. We are subject to audits by any of these taxing authorities. Our tax
returns have been examined by the Internal Revenue Service through the year ended December 31, 2006. We believe that adequate
accruals have been provided for federal, foreign and state taxes.

See Provision for Income Taxes and Effective Tax Rates below for discussion of our effective tax rates during 2021 and 2020.

Recent Accounting Pronouncements: For a summary of recent accounting pronouncements, please see Note 1 to the
Consolidated Financial Statements-Accounting Standards as included in this Report on Form 10-K for the year ended December 31,
2021.

CARES Act and Other Governmental Grants and Medicare Accelerated Payments:

2021:

During 2021, we received approximately $189 million of additional funds from the federal government in connection with the
CARES Act, substantially all of which were received during the first quarter of 2021. During the second quarter of 2021, we returned
the $189 million to the appropriate government agencies utilizing a portion of our cash and cash equivalents held on deposit.
Therefore, our results of operations for the twelve-month period ended December 31, 2021 include no impact from the receipt of those
funds.

Also, in March of 2021 we made an early repayment of $695 million of funds received during 2020 pursuant to the Medicare
Accelerated and Advance Payment Program. These funds were returned to the government utilizing a portion of our cash and cash
equivalents held on deposit.

2020:
As of December 31, 2020, we had received an aggregate of $1.112 billion as follows:

o Approximately $417 million of funds received from various governmental stimulus programs, most notably
the CARES Act. Included in our net income attributable to UHS for the year ended December 31, 2020,
was the favorable impact of approximately $309 million (after-tax) resulting from the recording of
approximately $413 million of CARES Act and other grant income revenues. Approximately $316 million
of the grant income revenues were attributable to our acute care services and approximately $97 million
were attributable to our behavioral health care services.

o Approximately $695 million of Medicare accelerated payments received pursuant to the Medicare
Accelerated and Advance Payment Program. There was no impact on our earnings during 2020 in
connection with receipt of these funds. As mentioned above, in March of 2021, we made an early, full
repayment of these funds to the government.

Please see Sources of Revenue- 2019 Novel Coronavirus Disease Medicare and Medicaid Payment Related Legislation below

for additional disclosure.

Results of Operations

The following table summarizes our results of operations, and is used in the discussion below, for the years ended December 31,

2021 and 2020 (dollar amounts in thousands):

Year Ended December 31,

Net revenues
Operating charges:

Salaries, wages and benefits
Other operating expenses
Supplies expense
Depreciation and amortization
Lease and rental expense
Subtotal-operating expenses
Income from operations
Interest expense, net
Other (income) expense, net
Income before income taxes
Provision for income taxes
Net income
Less: Net income attributable to
noncontrolling interests
Net income attributable to UHS

2021
% of Net
Revenues

2020
% of Net
Revenues

Amount

100.0% $ 11,558,897

100.0%

Amount
$ 12,642,117

6,163,944
3,035,869
1,427,134
533,213
118,863
11,279,023
1,363,094
83,672
(13,891)
1,293,313
305,681
987,632

48.8%
24.0%
11.3%
4.2%
0.9%

5,613,097
2,672,762
1,288,132
510,493
116,059
89.2% 10,200,543
1,358,354
10.8%
106,285
0.7%
(14 )
-0.1%
1,252,083
10.2%
299,293
2.4%
952,790
7.8%

(3,958)
991,590

0.0%
7.8% $

8,837
943,953

48.6%
23.1%
11.1%
4.4%
1.0%
88.2%
11.8%
0.9%
0.0%
10.8%
2.6%
8.2%

0.1%
8.2%

Net revenues increased by 9.4%, or $1.08 billion, to $12.64 billion during 2021 as compared to $11.56 billion during 2020. As

discussed above, included in our net revenues during 2020 was approximately $413 million of net revenues recorded in connection
with various governmental stimulus programs, most notably the CARES Act.

The increase in net revenues was primarily attributable to:



a $1.00 billion or 8.8% increase in net revenues generated from our acute care and behavioral health care operations
owned during both periods (which we refer to as “same facility”), and;

$80 million of other combined net increases including a $28 million increase in revenues related to provider tax programs
which had no impact on net income attributable to UHS as reflected above since the amounts were offset between net
revenues and other operating expenses.

Income before income taxes increased by $41 million to $1.29 billion during 2021 as compared to $1.25 billion during 2020.

The $41 million increase in our income before income taxes during 2021, as compared to 2020, was due to the following:



an increase of $41 million at our acute care facilities, as discussed below in Acute Care Hospital Services, which includes
the favorable impact recorded during 2020, from $316 million of net revenues recorded in connection with various
governmental stimulus programs, most notably the CARES Act ($306 million pre-tax favorable impact in 2020, net of
amounts attributable noncontrolling interests);

an increase of $2 million at our behavioral health care facilities, as discussed below in Behavioral Health Services, which
includes the favorable impact recorded during 2020, from $97 million of net revenues recorded in connection with various
governmental stimulus programs, most notably the CARES Act;

an increase of $23 million due to a decrease in interest expense due primarily to a decrease in our aggregate average cost
of borrowings, as discussed below in Other Operating Results-Interest Expense, and;

$25 million of other combined net decreases.

Net income attributable to UHS increased by $48 million to $992 million during 2021 as compared to $944 million during 2020.

This increase was attributable to:



an increase of $41 million in income before income taxes, as discussed above;

an increase of $13 million due to a decrease in income attributable to noncontrolling interests, and;



a decrease of $6 million resulting from a net increase in the provision for income taxes due primarily to: (i) the income tax
provision recorded in connection with the $54 million increase in pre-tax income, and; (ii) a $10 million decrease in the
provision for income taxes resulting from ASU 2016-09, which decreased our provision for income taxes by
approximately $2 million during 2021, as compared to an increase of approximately $7 million during 2020. Please see
additional disclosure below in Other Operating Results-Provision for Income Taxes and Effective Tax Rates.

Increase to self-insured professional and general liability reserves:

Our estimated liability for self-insured professional and general liability claims is based on a number of factors including,

among other things, the number of asserted claims and reported incidents, estimates of losses for these claims based on recent and
historical settlement amounts, estimates of incurred but not reported claims based on historical experience, and estimates of amounts
recoverable under our commercial insurance policies.

As a result of unfavorable trends experienced during 2021 and 2020, included in our results of operations were pre-tax increases

of $52 million during 2021 and $25 million during 2020 to increase our reserves for self-insured professional and general liability
claims. During 2021, approximately $39 million of the reserves increase is included in our same facility basis acute care hospitals
services’ results and approximately $13 million is included in our behavioral health services’ results. During 2020, approximately $19
million of the reserves increase is included in our same facility basis acute care hospitals services’ results and approximately $6
million is included in our behavioral health services’ results.

Acute Care Hospital Services

The following table sets forth certain operating statistics for our acute care hospital services for the years ended December

31, 2021 and 2020.

Average licensed beds
Average available beds
Patient days
Average daily census
Occupancy-licensed beds
Occupancy-available beds
Admissions
Length of stay

Same Facility Basis

2021

6,543
6,371
1,564,828
4,287.2

65.5%
67.3%

304,955
5.1

2020

6,457
6,285
1,458,321
3,984.5

61.7%
63.4%

286,535
5.1

All

2021

6,566
6,394
1,568,639
4,297.6
65.5 %
67.2 %
305,296
5.1

2020

6,457
6,285
1,458,321
3,984.5

61.7%
63.4%

286,535
5.1

Acute Care Hospital Services-Same Facility Basis

We believe that providing our results on a “Same Facility” basis (which is a non-GAAP measure), which includes the operating
results for facilities and businesses operated in both the current year and prior year periods, is helpful to our investors as a measure of
our operating performance. Our Same Facility results also neutralize (if applicable) the effect of items that are non-operational in
nature including items such as, but not limited to, gains/losses on sales of assets and businesses, impacts of settlements, legal
judgments and lawsuits, impairments of long-lived and intangible assets and other amounts that may be reflected in the current or
prior year financial statements that relate to prior periods.

Our Same Facility basis results reflected on the tables below also exclude from net revenues and other operating expenses,

provider tax assessments incurred in each period as discussed below Sources of Revenue-Various State Medicaid Supplemental
Payment Programs. However, these provider tax assessments are included in net revenues and other operating expenses as reflected in
the table below under All Acute Care Hospital Services. The provider tax assessments had no impact on the income before income
taxes as reflected on the tables below since the amounts offset between net revenues and other operating expenses. To obtain a
complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income
as determined in accordance with U.S. GAAP and as presented in the condensed consolidated financial statements and notes thereto as
contained in this Annual Report on Form 10-K.

The following table summarizes the results of operations for our acute care hospital services on a same facility basis and is used

in the discussions below for the years ended December 31, 2021 and 2020 (dollar amounts in thousands):

Net revenues
Operating charges:

Income before income taxes

Year Ended
December 31, 2021

Year Ended
December 31, 2020

Amount
$ 6,963,627

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 6,238,236

100.0%

2,947,853
1,656,848
1,218,969
327,774
73,421
6,224,865
738,762
1,006
567
737,189

42.3%
23.8%
17.5%
4.7%
1.1%
89.4%
10.6%
0.0%
0.0%
10.6% $

2,611,143
1,462,627
1,081,154
318,077
69,638
5,542,639
695,597
1,567
0
694,030

41.9%
23.4%
17.3%
5.1%
1.1%
88.8%
11.2%
0.0%
0.0%
11.1%

On a same facility basis during 2021, as compared to 2020, net revenues from our acute care hospital services increased $725
million or 11.6%. Income before income taxes (and before income attributable to noncontrolling interests) increased by $43 million,
or 6%, to $737 million or 10.6% of net revenues during 2021 as compared to $694 million or 11.1% of net revenues during 2020.

As mentioned above, included in our acute care hospital services’ revenues during 2020 was approximately $316 million of

revenues recorded in connection with funds received from various governmental stimulus programs, most notably the CARES Act.
Excluding these governmental stimulus program revenues from 2020, net revenues from our acute care hospital services, on a same
facility basis, increased $1.04 billion or 17.6% during 2021, as compared to 2020, and income before income taxes increased $359
million or 95% during 2021, as compared to 2020.

During 2021, excluding the impact of the $316 million of governmental stimulus program revenues recorded during 2020, net

revenue per adjusted admission increased by 8.6% while net revenue per adjusted patient day increased by 7.7%, as compared to 2020.
During 2021, as compared to 2020, inpatient admissions to our acute care hospitals increased by 6.4% and adjusted admissions
increased by 7.7%. Patient days at these facilities increased by 7.3% and adjusted patient days increased by 8.6% during 2021 as
compared to 2020. The average length of inpatient stay at these facilities remained unchanged at 5.1 days during each of 2021 and
2020. The occupancy rate, based on the average available beds at these facilities, was 67% and 63% during 2021 and 2020,
respectively.

Information Technology Incident in 2020:

As previously disclosed on September 29, 2020, we experienced an information technology security incident in the early
morning hours of September 27, 2020. As a result of this cyberattack, we suspended user access to our information technology
applications related to operations located in the United States. While our information technology applications were offline, patient
care was delivered safely and effectively at our facilities across the country utilizing established back-up processes, including offline
documentation methods. Our information technology applications were substantially restored at our acute care and behavioral health
hospitals at various times in October, 2020, on a rolling/staggered basis, and our facilities generally resumed standard operating
procedures at that time.

Given the disruption to the standard operating procedures at our facilities during the period of September 27, 2020 into October,
2020, certain patient activity, including ambulance traffic and elective/scheduled procedures at our acute care hospitals, were diverted
to competitor facilities. We also incurred significant incremental labor expense, both internal and external, to restore information
technology operations as expeditiously as possible. Additionally, certain administrative functions such as coding and billing were
delayed into December, 2020, which had a negative impact on our operating cash flows during the fourth quarter of 2020.

As a result of these factors, we estimated that, for the year ended December 31, 2020, this incident had an aggregate unfavorable

pre-tax impact of approximately $67 million. The substantial majority of the unfavorable impact was attributable to our acute care
services and consisted primarily of lost operating income resulting from the related decrease in patient activity as well as increased
revenue reserves recorded in connection with the associated billing delays. Also, the unfavorable impact included certain labor
expenses, professional fees and other operating expenses incurred as a direct result of this incident and the related disruption to our
operations.

During the year ended December 31, 2021, the operating results of our acute care services were favorably impacted by an
aggregate of approximately $43 million resulting from: (i) receipt of commercial cyber insurance proceeds (approximately $26
million), and; (ii) collection of revenues previously reserved during 2020 (approximately $17 million). Although we can provide no
assurance or estimation related to the receipt timing, or amount of additional proceeds that we may receive pursuant to commercial

insurance coverage we have in connection with this incident, we believe we are entitled to additional insurance proceeds of up to
approximately $18 million.

All Acute Care Hospital Services

The following table summarizes the results of operations for all our acute care operations during 2021 and 2020. These amounts

include: (i) our acute care results on a same facility basis, as indicated above; (ii) the impact of provider tax assessments which
increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other
amounts including, if applicable, the results of recently acquired/opened ancillary businesses. Dollar amounts below are reflected in
thousands.

Net revenues
Operating charges:

Income before income taxes

Year Ended
December 31, 2021

Year Ended
December 31, 2020

Amount
$ 7,108,254

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 6,337,304

100.0%

2,968,140
1,772,312
1,224,664
331,508
75,391
6,372,015
736,239
1,006
567
734,666

41.8%
24.9%
17.2%
4.7%
1.1%
89.6%
10.4%
0.0%
0.0%
10.3% $

2,611,514
1,561,875
1,081,159
318,124
69,638
5,642,310
694,994
1,567
0
693,427

41.2%
24.6%
17.1%
5.0%
1.1%
89.0%
11.0%
0.0%
0.0%
10.9%

During 2021, as compared to 2020, net revenues from our acute care hospital services increased $771 million or 12.2% to
$7.11 billion as compared to $6.34 billion during 2020 due to: (i) the $725 million, or 11.6%, increase in same facility revenues, as
discussed above, and; (ii) an aggregate increase of $46 million consisting of revenues generated from recently acquired facilities and
businesses (as discussed in Note 2 to the Consolidated Financial Statements-Acquisitions and Divestitures) and an increase in provider
tax assessments which had no impact on net income attributable to UHS since the amounts were offset between net revenues and other
operating expenses.

Income before income taxes increased by $41 million, or 6%, to $735 million or 10.3% of net revenues during 2021 as
compared to $693 million or 10.9% of net revenues during 2020. The $41 million increase in income before income taxes from our
acute care hospital services resulted primarily from the above-mentioned $43 million increase in income before income taxes, on a
same facility basis, as discussed above.

Excluding the above-mentioned $316 million of revenues recorded during 2020 in connection with various governmental
stimulus programs, net revenues from our acute care hospital services increased by $1.09 billion or 18.0% during 2021, as compared
to 2020, and income before income taxes increased by $357 million or 95% during 2021, as compared to 2020.

Behavioral Health Care Services

The following table sets forth certain operating statistics for our behavioral health care services for the years ended December

31, 2021 and 2020.

Average licensed beds
Average available beds
Patient days
Average daily census
Occupancy-licensed beds
Occupancy-available beds
Admissions
Length of stay

Same Facility Basis

2021

23,740
23,638
6,114,699
16,752.6

70.6%
70.9%

451,493
13.5

2020

23,477
23,375
6,109,418
16,692.4

71.1%
71.4%

445,737
13.7

All

2021

24,132
24,030
6,162,780
16,884.3
70.0 %
70.3 %
457,006
13.5

2020

23,661
23,559
6,142,823
16,783.7

70.9%
71.2%

448,870
13.7

Behavioral Health Care Services-Same Facility Basis

Our Same Facility basis results (which is a non-GAAP measure), which include the operating results for facilities and

businesses operated in both the current year and prior year period, neutralize (if applicable) the effect of items that are non-operational
in nature including items such as, but not limited to, gains/losses on sales of assets and businesses, impact of the reserve established in
connection with the civil aspects of the government’s investigation of certain of our behavioral health care facilities, impacts of
settlements, legal judgments and lawsuits, impairments of long-lived and intangible assets and other amounts that may be reflected in
the current or prior year financial statements that relate to prior periods. Our Same Facility basis results reflected on the table below
also excludes from net revenues and other operating expenses, provider tax assessments incurred in each period as discussed below
Sources of Revenue-Various State Medicaid Supplemental Payment Programs. However, these provider tax assessments are included
in net revenues and other operating expenses as reflected in the table below under All Behavioral Health Care Services. The provider
tax assessments had no impact on the income before income taxes as reflected on the tables below since the amounts offset between
net revenues and other operating expenses. To obtain a complete understanding of our financial performance, the Same Facility results
should be examined in connection with our net income as determined in accordance with U.S. GAAP and as presented in the
condensed consolidated financial statements and notes thereto as contained in this Annual Report on Form 10-K.

The following table summarizes the results of operations for our behavioral health care services, on a same facility basis, and is

used in the discussions below for the years ended December 31, 2021 and 2020 (dollar amounts in thousands):

Net revenues
Operating charges:

Income before income taxes

Year Ended
December 31, 2021

Year Ended
December 31, 2020

Amount
$ 5,394,647

2,874,224
1,037,248
203,516
182,303
41,182
4,338,473
1,056,174
1,338
96
$ 1,054,740

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 5,116,728

100.0%

53.3% 2,717,905
929,922
19.2%
204,442
3.8%
175,537
3.4%
41,940
0.8%
80.4% 4,069,746
19.6% 1,046,982
1,447
1,060
19.6% $ 1,044,475

0.0%
0.0%

53.1%
18.2%
4.0%
3.4%
0.8%
79.5%
20.5%
0.0%
0.0%
20.4%

On a same facility basis during 2021, net revenues generated from our behavioral health services increased by $278 million, or

5.4%, to $5.39 billion, from $5.12 billion generated during 2020. Income before income taxes increased by $10 million, or 1%, to
$1.05 billion or 19.6% of net revenues during 2021, as compared to $1.04 billion or 19.6% of net revenues during 2020.

As mentioned above, included in our behavioral health services’ revenues during 2020 was approximately $97 million of
revenues recorded in connection with funds received from various governmental stimulus programs, most notably the CARES Act.
Excluding these governmental stimulus program revenues from 2020, net revenues from our behavioral health services, on a same
facility basis, increased by $375 million or 7.5% during 2021, as compared to 2020, and income before income taxes increased $107
million or 11% during 2021, as compared to 2020.

During 2021, excluding the impact of the $97 million of governmental stimulus program revenues, net revenue per adjusted
admission increased by 5.4% and net revenue per adjusted patient day increased by 6.7%, as compared to 2020. On a same facility
basis, inpatient admissions and adjusted admissions to our behavioral health facilities increased by 1.3% and 1.6% during 2021, as
compared to 2020, respectively. Patient days and adjusted patient days at these facilities increased by 0.1% and 0.4% during 2021, as
compared to 2020, respectively. The average length of inpatient stay at these facilities was 13.5 days and 13.7 days during 2021 and
2020, respectively. The occupancy rate, based on the average available beds at these facilities, was 71% during each of 2021 and
2020.

All Behavioral Health Care Services

The following table summarizes the results of operations for all our behavioral health care services during 2021 and 2020. These

amounts include: (i) our behavioral health care results on a same facility basis, as indicated above; (ii) the impact of provider tax
assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and;
(iii) certain other amounts, if applicable, including the results of facilities acquired or opened during the past year as well as the results
of certain facilities that were closed or restructured during the past year. Dollar amounts below are reflected in thousands.

Year Ended
December 31, 2021

Year Ended
December 31, 2020

Net revenues
Operating charges:

Income before income taxes

Amount
$ 5,503,644

2,893,028
1,145,879
204,840
187,761
41,703
4,473,211
1,030,433
4,780
96
$ 1,025,557

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 5,208,722

100.0%

3.7%
3.4%
0.8%

52.6% 2,727,129
20.8% 1,023,733
204,711
182,012
45,505
81.3% 4,183,090
18.7% 1,025,632
1,599
776
18.6% $ 1,023,257

0.1%
0.0%

52.4%
19.7%
3.9%
3.5%
0.9%
80.3%
19.7%
0.0%
0.0%
19.6%

During 2021, as compared to 2020, net revenues generated from our behavioral health services increased $295 million due to:

(i) the above-mentioned $278 million or 5.4% increase in net revenues on a same facility basis, and; (ii) $17 million other combined
net increases consisting primarily of an increase in provider tax assessments which had no impact on net income attributable to UHS
since the amounts were offset between net revenues and other operating expenses.

Income before income taxes increased by $2 million to $1.03 billion or 18.6% of net revenues during 2021, as compared to
$1.02 billion or 19.6% of net revenues during 2020. The increase in income before income taxes at our behavioral health facilities was
due primarily to: (i) the above-mentioned $10 million increase on a same facility basis, partially offset by; (ii) an $8 million net
aggregate decrease resulting primarily from the start-up losses sustained at various newly opened facilities.

Excluding the above-mentioned $97 million of revenues recorded during 2020 in connection with various governmental
stimulus programs, net revenues from our behavioral health services increased by $392 million or 7.7% during 2021, as compared to
2020, and income before income taxes increased by $99 million or 11% during 2021, as compared to 2020.

Sources of Revenue

Overview: We receive payments for services rendered from private insurers, including managed care plans, the federal
government under the Medicare program, state governments under their respective Medicaid programs and directly from patients.

Hospital revenues depend upon inpatient occupancy levels, the medical and ancillary services and therapy programs ordered by

physicians and provided to patients, the volume of outpatient procedures and the charges or negotiated payment rates for such
services. Charges and reimbursement rates for inpatient routine services vary depending on the type of services provided (e.g.,
medical/surgical, intensive care or behavioral health) and the geographic location of the hospital. Inpatient occupancy levels fluctuate
for various reasons, many of which are beyond our control. The percentage of patient service revenue attributable to outpatient
services has generally increased in recent years, primarily as a result of advances in medical technology that allow more services to be
provided on an outpatient basis, as well as increased pressure from Medicare, Medicaid and private insurers to reduce hospital stays
and provide services, where possible, on a less expensive outpatient basis. We believe that our experience with respect to our
increased outpatient levels mirrors the general trend occurring in the health care industry and we are unable to predict the rate of
growth and resulting impact on our future revenues.

Patients are generally not responsible for any difference between customary hospital charges and amounts reimbursed for such

services under Medicare, Medicaid, some private insurance plans, and managed care plans, but are responsible for services not

covered by such plans, exclusions, deductibles or co-insurance features of their coverage. The amount of such exclusions, deductibles
and co-insurance has generally been increasing each year. Indications from recent federal and state legislation are that this trend will
continue. Collection of amounts due from individuals is typically more difficult than from governmental or business payers which
unfavorably impacts the collectability of our patient accounts.

As described below in the section titled 2019 Novel Coronavirus Disease Medicare and Medicaid Payment Related Legislation,

the federal government has enacted multiple pieces of legislation to assist healthcare providers during the COVID-19 world-wide
pandemic and U.S. National Emergency declaration. We have outlined those legislative changes related to Medicare and Medicaid
payment and their estimated impact on our financial results, where estimates are possible.

Sources of Revenues and Health Care Reform: Given increasing budget deficits, the federal government and many states are
currently considering additional ways to limit increases in levels of Medicare and Medicaid funding, which could also adversely affect
future payments received by our hospitals. In addition, the uncertainty and fiscal pressures placed upon the federal government as a
result of, among other things, impacts on state revenue and expenses resulting from the COVID-19 pandemic, economic recovery
stimulus packages, responses to natural disasters, and the federal and state budget deficits in general may affect the availability of
government funds to provide additional relief in the future. We are unable to predict the effect of future policy changes on our
operations.

On March 23, 2010, President Obama signed into law the Legislation. Two primary goals of the Legislation are to provide for

increased access to coverage for healthcare and to reduce healthcare-related expenses.

The Legislation revises reimbursement under the Medicare and Medicaid programs to emphasize the efficient delivery of high
quality care and contains a number of incentives and penalties under these programs to achieve these goals. The Legislation provides
for decreases in the annual market basket update for federal fiscal years 2010 through 2019, a productivity offset to the market basket
update beginning October 1, 2011 for Medicare Part B reimbursable items and services and beginning October 1, 2012 for Medicare
inpatient hospital services. The Legislation and subsequent revisions provide for reductions to both Medicare DSH and Medicaid DSH
payments. The Medicare DSH reductions began in October, 2013 while the Medicaid DSH reductions are scheduled to begin in 2024.
The Legislation implemented a value-based purchasing program, which will reward the delivery of efficient care. Conversely, certain
facilities will receive reduced reimbursement for failing to meet quality parameters; such hospitals will include those with excessive
readmission or hospital-acquired condition rates.

A 2012 U.S. Supreme Court ruling limited the federal government’s ability to expand health insurance coverage by holding
unconstitutional sections of the Legislation that sought to withdraw federal funding for state noncompliance with certain Medicaid
coverage requirements. Pursuant to that decision, the federal government may not penalize states that choose not to participate in the
Medicaid expansion by reducing their existing Medicaid funding. Therefore, states can choose to expand or not to expand their
Medicaid program without risking the loss of federal Medicaid funding. As a result, many states, including Texas, have not expanded
their Medicaid programs without the threat of loss of federal funding. CMS has previously granted section 1115 demonstration
waivers providing for work and community engagement requirements for certain Medicaid eligible individuals. CMS has also released
guidance to states interested in receiving their Medicaid funding through a block grant mechanism. The Biden administration has
signaled its intent to withdraw previously issued section 1115 demonstrations aligned with these policies. However, if implemented,
the previously issued section 1115 demonstrations are anticipated to lead to reductions in coverage, and likely increases in
uncompensated care, in states where these demonstration waivers are granted.

On December 14, 2018, a Texas Federal District Court deemed the Legislation to be unconstitutional in its entirety. The Court

concluded that the Individual Mandate is no longer permissible under Congress’s taxing power as a result of the Tax Cut and Jobs Act
of 2017 (“TCJA”) reducing the individual mandate’s tax to $0 (i.e., it no longer produces revenue, which is an essential feature of a
tax), rendering the Legislation unconstitutional. The court also held that because the individual mandate is “essential” to the
Legislation and is inseverable from the rest of the law, the entire Legislation is unconstitutional. Because the court issued a declaratory
judgment and did not enjoin the law, the Legislation remained in place pending its appeal. The District Court for the Northern District
of Texas ruling was appealed to the U.S. Court of Appeals for the Fifth Circuit. On December 18, 2019, the Fifth Circuit Court of
Appeals’ three-judge panel voted 2-1 to strike down the Legislation individual mandate as unconstitutional. The Fifth Circuit Court
also sent the case back to the Texas district court to determine which Legislation provisions should be stricken with the mandate or
whether the entire Legislation is unconstitutional. On March 2, 2020, the U.S. Supreme Court agreed to hear, during the 2020-2021
term, two consolidated cases, filed by the State of California and the United States House of Representatives, asking the U.S. Supreme
Court to review the ruling by the Fifth Circuit Court of Appeals. Oral argument was heard on November 10, 2020, and on June 17,
2021, the U.S. Supreme Court issued an opinion holding 7-2 that a group of states and individuals lacked standing to challenge the
constitutionality of the Affordable Care Act (“ACA”). The Court did not reach the plaintiffs’ merits arguments, which specifically
challenged the constitutionality of the ACA’s individual mandate and the entirety of the ACA itself. As a result, the ACA will
continue to be law, and HHS and its respective agencies will continue to enforce regulations implementing the law.

The various provisions in the Legislation that directly or indirectly affect Medicare and Medicaid reimbursement are scheduled

future. Thus, we cannot predict the impact of the Legislation on our future reimbursement at this time and we can provide no
assurance that the Legislation will not have a material adverse effect on our future results of operations.

The Legislation also contained provisions aimed at reducing fraud and abuse in healthcare. The Legislation amends several

existing laws, including the federal Anti-Kickback Statute and the False Claims Act, making it easier for government agencies and
private plaintiffs to prevail in lawsuits brought against healthcare providers. While Congress had previously revised the intent
requirement of the Anti-Kickback Statute to provide that a person is not required to “have actual knowledge or specific intent to
commit a violation of” the Anti-Kickback Statute in order to be found in violation of such law, the Legislation also provides that any
claims for items or services that violate the Anti-Kickback Statute are also considered false claims for purposes of the federal civil
False Claims Act. The Legislation provides that a healthcare provider that retains an overpayment in excess of 60 days is subject to the
federal civil False Claims Act. The Legislation also expands the Recovery Audit Contractor program to Medicaid. These amendments
also make it easier for severe fines and penalties to be imposed on healthcare providers that violate applicable laws and regulations.

We have partnered with local physicians in the ownership of certain of our facilities. These investments have been permitted

The impact of the Legislation on each of our hospitals may vary. Because Legislation provisions are effective at various times
over the next several years, we anticipate that many of the provisions in the Legislation may be subject to further revision. Initiatives
to repeal the Legislation, in whole or in part, to delay elements of implementation or funding, and to offer amendments or supplements
to modify its provisions have been persistent. The ultimate outcomes of legislative attempts to repeal or amend the Legislation and
legal challenges to the Legislation are unknown. Legislation has already been enacted that eliminated the individual mandate penalty,
effective January 1, 2019, related to the obligation to obtain health insurance that was part of the original Legislation. In addition,
Congress previously considered legislation that would, in material part: (i) eliminate the large employer mandate to offer health
insurance coverage to full-time employees; (ii) permit insurers to impose a surcharge up to 30 percent on individuals who go
uninsured for more than two months and then purchase coverage; (iii) provide tax credits towards the purchase of health insurance,
with a phase-out of tax credits accordingly to income level; (iv) expand health savings accounts; (v) impose a per capita cap on federal
funding of state Medicaid programs, or, if elected by a state, transition federal funding to block grants, and; (vi) permit states to seek a
waiver of certain federal requirements that would allow such state to define essential health benefits differently from federal standards
and that would allow certain commercial health plans to take health status, including pre-existing conditions, into account in setting
premiums.

In addition to legislative changes, the Legislation can be significantly impacted by executive branch actions. President Biden is

expected to undertake executive actions that will strengthen the Legislation and may reverse the policies of the prior administration.
The Trump Administration had directed the issuance of final rules (i) enabling the formation of health plans that would be exempt
from certain Legislation essential health benefits requirements; (ii) expanding the availability of short-term, limited duration health
insurance; (iii) eliminating cost-sharing reduction payments to insurers that would otherwise offset deductibles and other out-of-
pocket expenses for health plan enrollees at or below 250 percent of the federal poverty level; (iv) relaxing requirements for state
innovation waivers that could reduce enrollment in the individual and small group markets and lead to additional enrollment in short-
term, limited duration insurance and association health plans; and (vi) incentivizing the use of health reimbursement arrangements by
employers to permit employees to purchase health insurance in the individual market. The uncertainty resulting from these Executive
Branch policies led to reduced Exchange enrollment in 2018, 2019 and 2020. To date, the Biden administration has issued executive
orders implementing a special enrollment period permitting individuals to enroll in health plans outside of the annual open enrollment
period and reexamining policies that may undermine the ACA or the Medicaid program. The ARPA’s expansion of subsidies to
purchase coverage through an exchange contributed to increased exchange enrollment in 2021. The recent and on-going COVID-19
pandemic and related U.S. National Emergency declaration may significantly increase the number of uninsured patients treated at our
facilities extending beyond the most recent CBO published estimates due to increased unemployment and loss of group health plan
health insurance coverage. It is also anticipated that these policies may create additional cost and reimbursement pressures on
hospitals.

It remains unclear what portions of the Legislation may remain, or whether any replacement or alternative programs may be

created by any future legislation. Any such future repeal or replacement may have significant impact on the reimbursement for
healthcare services generally, and may create reimbursement for services competing with the services offered by our
hospitals. Accordingly, there can be no assurance that the adoption of any future federal or state healthcare reform legislation will not
have a negative financial impact on our hospitals, including their ability to compete with alternative healthcare services funded by
such potential legislation, or for our hospitals to receive payment for services.

For additional disclosure related to our revenues including a disaggregation of our consolidated net revenues by major source for

each of the periods presented herein, please see Note 12 to the Consolidated Financial Statements-Revenue.

Medicare: Medicare is a federal program that provides certain hospital and medical insurance benefits to persons aged 65 and

over, some disabled persons and persons with end-stage renal disease. All of our acute care hospitals and many of our behavioral
health centers are certified as providers of Medicare services by the appropriate governmental authorities. Amounts received under the
Medicare program are generally significantly less than a hospital’s customary charges for services provided. Since a substantial
portion of our revenues will come from patients under the Medicare program, our ability to operate our business successfully in the
future will depend in large measure on our ability to adapt to changes in this program.

Under the Medicare program, for inpatient services, our general acute care hospitals receive reimbursement under the inpatient

prospective payment system (“IPPS”). Under the IPPS, hospitals are paid a predetermined fixed payment amount for each hospital
discharge. The fixed payment amount is based upon each patient’s Medicare severity diagnosis related group (“MS-DRG”). Every
MS-DRG is assigned a payment rate based upon the estimated intensity of hospital resources necessary to treat the average patient
with that particular diagnosis. The MS-DRG payment rates are based upon historical national average costs and do not consider the
actual costs incurred by a hospital in providing care. This MS-DRG assignment also affects the predetermined capital rate paid with
each MS-DRG. The MS-DRG and capital payment rates are adjusted annually by the predetermined geographic adjustment factor for
the geographic region in which a particular hospital is located and are weighted based upon a statistically normal distribution of
severity. While we generally will not receive payment from Medicare for inpatient services, other than the MS-DRG payment, a
hospital may qualify for an “outlier” payment if a particular patient’s treatment costs are extraordinarily high and exceed a specified
threshold. MS-DRG rates are adjusted by an update factor each federal fiscal year, which begins on October 1. The index used to
adjust the MS-DRG rates, known as the “hospital market basket index,” gives consideration to the inflation experienced by hospitals
in purchasing goods and services. Generally, however, the percentage increases in the MS-DRG payments have been lower than the
projected increase in the cost of goods and services purchased by hospitals.

In August, 2021, CMS published its IPPS 2022 final payment rule which provides for a 2.7% market basket increase to the base

Medicare MS-DRG blended rate. When statutorily mandated budget neutrality factors, annual geographic wage index updates,
documenting and coding adjustments, and adjustments mandated by the Legislation are considered, without consideration for the
required Medicare DSH payments changes and increase to the Medicare Outlier threshold, the overall final increase in IPPS payments
is approximately 2.5%. Including DSH payments and certain other adjustments, we estimate our overall increase from the final IPPS
2022 rule (covering the period of October 1, 2021 through September 30, 2022) will approximate 1.5%. This projected impact from
the IPPS 2022 final rule includes an increase of approximately 0.5% to partially restore cuts made as a result of the American
Taxpayer Relief Act of 2012 (“ATRA”), as required by the 21st Century Cures Act but excludes the impact of the sequestration
reductions related to the 2011 Act, Bipartisan Budget Act of 2015, and Bipartisan Budget Act of 2018, as discussed below.

In September, 2020, CMS published its IPPS 2021 final payment rule which provides for a 2.4% market basket increase to the
base Medicare MS-DRG blended rate. When statutorily mandated budget neutrality factors, annual geographic wage index updates,
documenting and coding adjustments, and adjustments mandated by the Legislation are considered, without consideration for the
required Medicare DSH payments changes and increase to the Medicare Outlier threshold, the overall increase in IPPS payments is
approximately 1.8%. Including DSH payments and certain other adjustments, we estimate our overall increase from the final IPPS
2021 rule (covering the period of October 1, 2020 through September 30, 2021) will approximate 2.3%. This projected impact from
the IPPS 2021 final rule includes an increase of approximately 0.5% to partially restore cuts made as a result of ATRA, as required by
the 21st Century Cures Act but excludes the impact of the sequestration reductions related to the 2011 Act, Bipartisan Budget Act of
2015, and Bipartisan Budget Act of 2018.

In the final rule, CMS will require hospitals to report certain market-based payment rate information for Medicare Advantage

organizations on their Medicare cost report for cost reporting periods ending on or after January 1, 2021, to be used in a potential
change to the methodology for calculating the IPPS MS-DRG relative weights to reflect relative market-based pricing, beginning in
FY 2024.

In August, 2019, CMS published its IPPS 2020 final payment rule which provides for a 3.0% market basket increase to the base

Medicare MS-DRG blended rate. When statutorily mandated budget neutrality factors, annual geographic wage index updates,
documenting and coding adjustments, and adjustments mandated by the Legislation are considered, without consideration for the
required Medicare DSH payments changes and increase to the Medicare Outlier threshold, the overall increase in IPPS payments is
approximately 2.8%. Including DSH payments and certain other adjustments, we estimate our overall increase from the final IPPS
2020 rule (covering the period of October 1, 2019 through September 30, 2020) will approximate 2.1%. This projected impact from
the IPPS 2020 final rule includes an increase of approximately 0.5% to partially restore cuts made as a result ATRA, as required by
the 21st Century Cures Act but excludes the impact of the sequestration reductions related to the 2011 Act, Bipartisan Budget Act of
2015, and Bipartisan Budget Act of 2018, as discussed below. CMS completed its full phase-in to use uncompensated care data from
the 2015 Worksheet S-10 hospital cost reports to allocate approximately $8.5 billion in the DSH Uncompensated Care Pool.

In June, 2019, the Supreme Court of the United States issued a decision favorable to hospitals impacting prior year Medicare
DSH payments (Azar v. Allina Health Services, No. 17-1484 (U.S. Jun. 3, 2019)). In Allina, the hospitals challenged the Medicare
DSH adjustments for federal fiscal year 2012, specifically challenging CMS’s decision to include inpatient hospital days attributable
to Medicare Part C enrollee patients in the numerator and denominator of the Medicare/SSI fraction used to calculate a hospital’s DSH
payments. This ruling addresses CMS’s attempts to impose the policy espoused in its vacated 2004 rulemaking to a fiscal year in the
2004–2013 time period without using notice-and-comment rulemaking. This decision should require CMS to recalculate hospitals’

DSH Medicare/SSI fractions, with Medicare Part C days excluded, for at least federal fiscal year 2012, but likely federal fiscal years
2005 through 2013. In August, 2020, CMS issued a rule that proposed to retroactively negate the effects of the aforementioned
Supreme Court decision, which rule has yet to be finalized. Although we can provide no assurance that we will ultimately receive
additional funds, we estimate that the favorable impact of this court ruling on certain prior year hospital Medicare DSH payments
could range between $18 million to $28 million in the aggregate.

The 2011 Act included the imposition of annual spending limits for most federal agencies and programs aimed at reducing
budget deficits by $917 billion between 2012 and 2021, according to a report released by the Congressional Budget Office. Among its
other provisions, the law established a bipartisan Congressional committee, known as the Joint Committee, which was responsible for
developing recommendations aimed at reducing future federal budget deficits by an additional $1.5 trillion over 10 years. The Joint
Committee was unable to reach an agreement by the November 23, 2011 deadline and, as a result, across-the-board cuts to
discretionary, national defense and Medicare spending were implemented on March 1, 2013 resulting in Medicare payment reductions
of up to 2% per fiscal year. Recent legislation suspended payment reductions through December 31, 2021, in exchange for extended
cuts through 2030. In December, 2021, the suspended 2% payment reduction was extended until March 31, 2022 and partially
suspended at a 1% payment reduction for an additional three-month period that ends on June 30, 2022.

Inpatient services furnished by psychiatric hospitals under the Medicare program are paid under a Psychiatric Prospective

Payment System (“Psych PPS”). Medicare payments to psychiatric hospitals are based on a prospective per diem rate with
adjustments to account for certain facility and patient characteristics. The Psych PPS also contains provisions for outlier payments and
an adjustment to a psychiatric hospital’s base payment if it maintains a full-service emergency department.

In July, 2021, CMS published its Psych PPS final rule for the federal fiscal year 2022. Under this final rule, payments to our
psychiatric hospitals and units are estimated to increase by 2.2% compared to federal fiscal year 2021. This amount includes the effect
of the 2.0% net market basket update which reflects the offset of a 0.7% productivity adjustment.

In July, 2020, CMS published its Psych PPS final rule for the federal fiscal year 2021. Under this final rule, payments to our
psychiatric hospitals and units are estimated to increase by 2.2% compared to federal fiscal year 2020. This amount includes the effect
of the 2.2% market basket update.

In July, 2019, CMS published its Psych PPS final rule for the federal fiscal year 2020. Under this final rule, payments to our
psychiatric hospitals and units are estimated to increase by 1.7% compared to federal fiscal year 2019. This amount includes the effect
of the 2.9% market basket update less a 0.75% adjustment as required by the ACA and a 0.4% productivity adjustment.

CMS’s calendar year 2018 final OPPS rule, issued on November 13, 2017, substantially reduced Medicare Part B

reimbursement for 340B Program drugs paid to hospitals. Beginning January 1, 2018, CMS reimbursement for certain separately
payable drugs or biologicals that are acquired through the 340B Program by a hospital paid under the OPPS (and not excepted from
the payment adjustment policy) is the average sales price of the drug or biological minus 22.5 percent, an effective reduction of
26.89% in payments for 340B program drugs. In December, 2018, the U.S. District Court for the District of Columbia ruled that HHS
did not have statutory authority to implement the 2018 Medicare OPPS rate reduction related to hospitals that qualify for drug
discounts under the federal 340B Program and granted a permanent injunction against the payment reduction. On July 31, 2020, the
U.S. Court of Appeals for the D.C. Circuit reversed the District Court and held that HHS’s decision to lower drug reimbursement rates
for 340B hospitals rests on a reasonable interpretation of the Medicare statute. No further legal challenges are available to the
plaintiffs and, as a result, we recognized $8 million of revenues during 2020 that were previously reserved in a prior year. These
payment reductions are being challenged before the U.S. Supreme Court, which heard the oral arguments in American Hospital
Association v. Becerra on November 30, 2021. The final result of such lawsuit cannot be predicted.

On November 2, 2021, CMS issued its OPPS final rule for 2022. The hospital market basket increase is 2.7% and the
productivity adjustment reduction is -0.7% for a net market basket increase of 2.0%. When other statutorily required adjustments
and hospital patient service mix are considered, we estimate that our overall Medicare OPPS update for 2022 will aggregate to a
net increase of 2.4% which includes a 3.0% increase to behavioral health division partial hospitalization rates.

In December, 2020, CMS published its OPPS final rule for 2021. The hospital market basket increase is 2.4% and there is no

productivity adjustment reduction to the 2021 OPPS market basket. When other statutorily required adjustments and hospital
patient service mix are considered, we estimate that our overall Medicare OPPS update for 2021 will aggregate to a net increase of
3.3% which includes a 9.2% increase to behavioral health division partial hospitalization rates.

In November, 2019, CMS published its OPPS final rule for 2020. The hospital market basket increase is 3.0%. The Medicare

statute requires a productivity adjustment reduction of 0.4% to the 2020 OPPS market basket resulting in a 2020 update to OPPS
payment rates by 2.6%. When other statutorily required adjustments and hospital patient service mix are considered, we estimate that
our overall Medicare OPPS update for 2020 will aggregate to a net increase of 2.7% which includes a 7.7% increase to behavioral
health division partial hospitalization rates. When the behavioral health division’s partial hospitalization rate impact is excluded, we
estimate that our Medicare 2020 OPPS payments will result in a 1.9% increase in payment levels for our acute care division, as
compared to 2019. For CY 2020, CMS will use the FY 2020 hospital IPPS post-reclassified wage index for urban and rural areas as

the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized
amount.

In November, 2019, CMS finalized its Hospital Price Transparency rule that implements certain requirements under the June
24, 2019 Presidential Executive Order related to Improving Price and Quality Transparency in American Healthcare to Put Patients
First. Under this final rule, effective January 1, 2021, CMS will require: (1) hospitals make public their standard changes (both gross
charges and payer-specific negotiated charges) for all items and services online in a machine-readable format, and; (2) hospitals to
make public standard charge data for a limited set of “shoppable services” the hospital provides in a form and manner that is more
consumer friendly. On November 2, 2021, CMS released a final rule increasing the monetary penalty that CMS can impose on
hospitals that fail to comply with the price transparency requirements. We believe that our hospitals are in full compliance with the
applicable federal regulations.

Medicaid: Medicaid is a joint federal-state funded health care benefit program that is administered by the states to provide
benefits to qualifying individuals. Most state Medicaid payments are made under a PPS-like system, or under programs that negotiate
payment levels with individual hospitals. Amounts received under the Medicaid program are generally significantly less than a
hospital’s customary charges for services provided. In addition to revenues received pursuant to the Medicare program, we receive a
large portion of our revenues either directly from Medicaid programs or from managed care companies managing Medicaid. All of our
acute care hospitals and most of our behavioral health centers are certified as providers of Medicaid services by the appropriate
governmental authorities.

We receive revenues from various state and county-based programs, including Medicaid in all the states in which we operate.

We receive annual Medicaid revenues of approximately $100 million, or greater, from each of Texas, California, Nevada, Illinois,
Pennsylvania, Washington, D.C., Kentucky, Florida and Massachusetts. We also receive Medicaid disproportionate share hospital
payments in certain states including Texas and South Carolina. We are therefore particularly sensitive to potential reductions in
Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those
states. We can provide no assurance that reductions to revenues earned pursuant to these programs, particularly in the above-
mentioned states, will not have a material adverse effect on our future results of operations.

The Legislation substantially increases the federally and state-funded Medicaid insurance program, and authorizes states to

establish federally subsidized non-Medicaid health plans for low-income residents not eligible for Medicaid starting in 2014.
However, the Supreme Court has struck down portions of the Legislation requiring states to expand their Medicaid programs in
exchange for increased federal funding. Accordingly, many states in which we operate have not expanded Medicaid coverage to
individuals at 133% of the federal poverty level. Facilities in states not opting to expand Medicaid coverage under the Legislation may
be additionally penalized by corresponding reductions to Medicaid disproportionate share hospital payments beginning in 2020, as
discussed below. We can provide no assurance that further reductions to Medicaid revenues, particularly in the above-mentioned
states, will not have a material adverse effect on our future results of operations.

On November 12, 2019, CMS issued the proposed Medicaid Fiscal Accountability Rule (“MFAR”) which CMS believed
would strengthen the fiscal integrity of the Medicaid program and help ensure that state supplemental payments and financing
arrangements are transparent and value-driven. In January, 2021, CMS issued a formal notice of withdrawal of this proposed
rule.

In January, 2020, CMS announced a new opportunity to support states with greater flexibility to improve the health of their
Medicaid populations. The new 1115 Waiver Block Grant Type Demonstration program, titled Healthy Adult Opportunity (“HAO”),
emphasizes the concept of value-based care while granting states extensive flexibility to administer and design their programs within a
defined budget. CMS believes this state opportunity will enhance the Medicaid program’s integrity through its focus on accountability
for results and quality improvement, making the Medicaid program stronger for states and beneficiaries. The Biden administration has
signaled its intent to withdraw the HAO demonstration. Accordingly, we are unable to predict whether the HAO demonstration will
impact our future results of operations.

Various State Medicaid Supplemental Payment Programs:

We incur health-care related taxes (“Provider Taxes”) imposed by states in the form of a licensing fee, assessment or other

mandatory payment which are related to: (i) healthcare items or services; (ii) the provision of, or the authority to provide, the health
care items or services, or; (iii) the payment for the health care items or services. Such Provider Taxes are subject to various federal
regulations that limit the scope and amount of the taxes that can be levied by states in order to secure federal matching funds as part of
their respective state Medicaid programs. As outlined below, we derive a related Medicaid reimbursement benefit from assessed
Provider Taxes in the form of Medicaid claims based payment increases and/or lump sum Medicaid supplemental payments.

Included in these Provider Tax programs are reimbursements received in connection with the Texas Uncompensated Care/Upper

Payment Limit program (“UC/UPL”) and Texas Delivery System Reform Incentive Payments program (“DSRIP”). Additional
disclosure related to the Texas UC/UPL and DSRIP programs is provided below.

Texas Uncompensated Care/Upper Payment Limit Payments:

Certain of our acute care hospitals located in various counties of Texas (Grayson, Hidalgo, Maverick, Potter and Webb)
participate in Medicaid supplemental payment Section 1115 Waiver indigent care programs. Section 1115 Waiver Uncompensated
Care (“UC”) payments replace the former Upper Payment Limit (“UPL”) payments. These hospitals also have affiliation agreements
with third-party hospitals to provide free hospital and physician care to qualifying indigent residents of these counties. Our hospitals
receive both supplemental payments from the Medicaid program and indigent care payments from third-party, affiliated hospitals. The
supplemental payments are contingent on the county or hospital district making an Inter-Governmental Transfer (“IGT”) to the state
Medicaid program while the indigent care payment is contingent on a transfer of funds from the applicable affiliated hospitals.
However, the county or hospital district is prohibited from entering into an agreement to condition any IGT on the amount of any
private hospital’s indigent care obligation.

On December 21, 2017, CMS approved the 1115 Waiver for the period January 1, 2018 to September 30, 2022. The Waiver
continued to include UC and DSRIP payment pools with modifications and new state specific reporting deadlines that if not met by
THHSC will result in material decreases in the size of the UC and DSRIP pools. For UC during the initial two years of this renewal,
the UC program will remain relatively the same in size and allocation methodology. For year three of this waiver renewal, the federal
fiscal year (“FFY”) 2020, and through FFY 2022, the size and distribution of the UC pool will be determined based on charity care
costs reported to HHSC in accordance with Medicare cost report Worksheet S-10 principles. In September 2019, CMS approved the
annual UC pool size in the amount of $3.9 billion for demonstration years (“DYs”) 9, 10 and 11 (October 1, 2019 to September 30,
2022).

On April 16, 2021, CMS rescinded its January 15, 2021, 1115 Waiver ten year expedited renewal approval that was effective
through September 30, 2030. In July, 2021, HHSC submitted another 1115 Waiver renewal application to CMS which reflects the
same terms and conditions agreed to by CMS on January 15, 2021, in order to receive an extension beyond September 30, 2022.

Effective April 1, 2018, certain of our acute care hospitals located in Texas began to receive Medicaid managed care rate
enhancements under the Uniform Hospital Rate Increase Program (“UHRIP”). The non-federal share component of these UHRIP rate
enhancements are financed by Provider Taxes. The Texas 1115 Waiver rules require UHRIP rate enhancements be considered in the
Texas UC payment methodology which results in a reduction to our UC payments. The UC amounts reported in the State Medicaid
Supplemental Payment Program Table below reflect the impact of this new UHRIP program. In July 2020, THHSC announced CMS
approval of an increase to UHRIP pool for the state’s 2021 fiscal year to $2.7 billion from its prior funding level of $1.6 billion.

On March 26, 2021, HHSC published a final rule that will apply to program periods on or after September 1, 2021, and UHRIP

will be re-named the Comprehensive Hospital Increase Reimbursement Program (“CHIRP”). CHIRP will be comprised of a UHRIP
component and an Average Commercial Incentive Award (“ACIA”) component. HHSC has proposed a pool size of $5.0 billion
subject to CMS approval. We are not able to estimate the financial impact of the program change if CMS approval occurs.

Although we believe that CMS will ultimately approve the UHRIP program for the 2022 fiscal year, CMS approval has not yet

occurred. As a result, our results of operations for the year ended December 31, 2021 exclude approximately $12 million of
estimated UHRIP net revenues attributable to the period September 1, 2021 through December 31, 2021.

On January 11, 2021, HHSC announced that CMS approved the pre-print modification that HHSC submitted for UHRIP period

March 1, 2021 through August 31, 2021. CMS approved rate changes that will now increase rates for private Institutions of Mental
Disease (“IMD”) for services provided to patients under age 21 or patients 65 years of age or older. The impact of this program is
included in the Medicaid Supplemental Payment Programs table below.

On September 24, 2021, HHSC finalized New Fee-for-Service Supplemental Payment Program: Hospital Augmented

Reimbursement Program (“HARP”) to be effective October 1, 2021. The HARP program continues the financial transition for
providers who have historically participated in the Delivery System Reform Incentive Payment program described below. The
program will provide additional funding to hospitals to help offset the cost hospitals incur while providing Medicaid services.
HHSC financial model released concurrent with the publication of the final rule indicates net potential incremental Medicaid
reimbursements to us of approximately $15 million annually, without consideration of any potential adverse impact on future
Medicaid DSH or Medicaid UC payments. This program is subject to CMS approval.

Texas Delivery System Reform Incentive Payments:

In addition, the Texas Medicaid Section 1115 Waiver includes a DSRIP pool to incentivize hospitals and other providers to

transform their service delivery practices to improve quality, health status, patient experience, coordination, and cost-effectiveness.
DSRIP pool payments are incentive payments to hospitals and other providers that develop programs or strategies to enhance access
to health care, increase the quality of care, the cost-effectiveness of care provided and the health of the patients and families served.
In May, 2014, CMS formally approved specific DSRIP projects for certain of our hospitals for demonstration years 3 to 5 (our
facilities did not materially participate in the DSRIP pool during demonstration years 1 or 2). DSRIP payments are contingent on the
hospital meeting certain pre-determined milestones, metrics and clinical outcomes. Additionally, DSRIP payments are contingent on
a governmental entity providing an IGT for the non-federal share component of the DSRIP payment. THHSC generally approves
DSRIP reported metrics, milestones and clinical outcomes on a semi-annual basis in June and December. Under the CMS approval
noted above, the Waiver renewal requires the transition of the DSRIP program to one focused on "health system performance

measurement and improvement." THHSC must submit a transition plan describing "how it will further develop its delivery system
reforms without DSRIP funding and/or phase out DSRIP funded activities and meet mutually agreeable milestones to demonstrate
its ongoing progress." The size of the DSRIP pool will remain unchanged for the initial two years of the waiver renewal with
unspecified decreases in years three and four of the renewal, FFY 2020 and 2021, respectively. In FFY 2022, DSRIP funding under
the waiver is eliminated. In connection with this DSRIP program, included in our results of operations was an aggregate of
approximately $34 million in 2021 and $23 million in each of 2020 and 2019. For FFY 2022, we will no longer receive DSRIP
funds due to the elimination of this funding source by CMS in the Waiver renewals except for certain carryover DSRIP projects for
which achievement of the required metrics will not be known until later in state fiscal year 2022. In March, 2020, HHSC submitted a
DSRIP Transition Plan to CMS as required by the 1115 Waiver Special Terms and Conditions #37 that outlines a transition from the
current DSRIP program to a Value-Based Purchasing (“VBP”) type payment model. As noted above, HHSC finalized a rule to make
changes to existing UHRIP program. This rule change reflects HHSC’s effort to comply with federal regulations that require
directed-payment programs to advance goals included in the state’s Medicaid managed care quality strategy and to align with the
ongoing efforts to transition from the Delivery System Reform Incentive Payment program. We are unable to estimate the financial
impact of this payment change.

Summary of Amounts Related To The Above-Mentioned Various State Medicaid Supplemental Payment Programs:

The following table summarizes the revenues, Provider Taxes and net benefit related to each of the above-mentioned Medicaid

supplemental programs for the years ended December 31, 2021 and 2020. The Provider Taxes are recorded in other operating
expenses on the Condensed Consolidated Statements of Income as included herein.

Texas UC/UPL:
Revenues
Provider Taxes
Net benefit

Texas DSRIP:
Revenues
Provider Taxes
Net benefit

Various other state programs:
Revenues
Provider Taxes
Net benefit

Total all Provider Tax programs:
Revenues
Provider Taxes
Net benefit

(amounts in millions)

2021

2020

120 $
(35)
85 $

49 $
(16)
33 $

472 $
(160)
312 $

641 $
(211)
430 $

119
(37 )
82

33
(10 )
23

336
(138 )
198

488
(185 )
303

We estimate that our aggregate net benefit from the Texas and various other state Medicaid supplemental payment programs

will approximate $391 million (net of Provider Taxes of $257 million) during the year ending December 31, 2022. These amounts are
based upon various terms and conditions that are out of our control including, but not limited to, the states’/CMS’s continued approval
of the programs and the applicable hospital district or county making IGTs consistent with 2021 levels. The decrease in the projected
aggregate net benefit from these programs for 2022, as compared to 2021, relates primarily to a $39 million projected net decrease in
reimbursements from the Kentucky Hospital Rate Increase Program, as discussed below, since the $97 million net benefit realized
from this program during 2021 was applicable to the eighteen-month period of July 1, 2020 through December 31, 2021.

Future changes to these terms and conditions could materially reduce our net benefit derived from the programs which could

have a material adverse impact on our future consolidated results of operations. In addition, Provider Taxes are governed by both
federal and state laws and are subject to future legislative changes that, if reduced from current rates in several states, could have a
material adverse impact on our future consolidated results of operations. As described below in 2019 Novel Coronavirus Disease
Medicare and Medicaid Payment Related Legislation, a 6.2% increase to the Medicaid Federal Matching Assistance Percentage
(“FMAP”) is included in the Families First Coronavirus Response Act. The impact of the enhanced FMAP Medicaid supplemental
and DSH payments are reflected in our financial results for the years ended December 31, 2021 and 2020. We are unable to estimate
the prospective financial impact of this provision at this time as our financial impact is contingent on unknown state action during
future eligible federal fiscal quarters.

Texas and South Carolina Medicaid Disproportionate Share Hospital Payments:

Hospitals that have an unusually large number of low-income patients (i.e., those with a Medicaid utilization rate of at least one
standard deviation above the mean Medicaid utilization, or having a low income patient utilization rate exceeding 25%) are eligible to
receive a DSH adjustment. Congress established a national limit on DSH adjustments. Although this legislation and the resulting state
broad-based provider taxes have affected the payments we receive under the Medicaid program, to date the net impact has not been
materially adverse.

Upon meeting certain conditions and serving a disproportionately high share of Texas’ and South Carolina’s low income
patients, five of our facilities located in Texas and one facility located in South Carolina received additional reimbursement from each
state’s DSH fund. The South Carolina and Texas DSH programs were renewed for each state’s 2022 DSH fiscal year (covering the
period of October 1, 2021 through September 30, 2022).

In connection with these DSH programs, included in our financial results was an aggregate of approximately $51 million during
2021 and $48 million during 2020. We expect the aggregate reimbursements to our hospitals pursuant to the Texas and South Carolina
2022 fiscal year programs to be approximately $48 million.

The Legislation and subsequent federal legislation provides for a significant reduction in Medicaid disproportionate share

payments beginning in federal fiscal year 2024 (see above in Sources of Revenues and Health Care Reform-Medicaid Revisions for
additional disclosure related to the delay of these DSH reductions). HHS is to determine the amount of Medicaid DSH payment cuts
imposed on each state based on a defined methodology. As Medicaid DSH payments to states will be cut, consequently, payments to
Medicaid-participating providers, including our hospitals in Texas and South Carolina, will be reduced in the coming years. Based on
the CMS final rule published in September, 2019, beginning in fiscal year 2024 (as amended by the CARES Act and the CAA),
annual Medicaid DSH payments in South Carolina and Texas could be reduced by approximately 74% and 44%, respectively, from
2020 DSH payment levels.

Our behavioral health care facilities in Texas have been receiving Medicaid DSH payments since FFY 2016. As with all
Medicaid DSH payments, hospitals are subject to state audits that typically occur up to three years after their receipt. DSH payments
are subject to a federal Hospital Specific Limit (“HSL”) and are not fully known until the DSH audit results are concluded. In
general, freestanding psychiatric hospitals tend to provide significantly less charity care than acute care hospitals and therefore are at
more risk for retroactive recoupment of prior year DSH payments in excess of their respective HSL. In light of the retroactive HSL
audit risk for freestanding psychiatric hospitals, we have established DSH reserves for our facilities that have been receiving funds
since FFY 2016. These DSH reserves are also impacted by the resolution of federal DSH litigation related to Children’s Hospital
Association of Texas v. Azar (“CHAT”), No. 17-cv-844 (D.D.C. March 2, 2018), appeal docketed, No. 18-5135 (D.C. Cir. May 9,
2018) where the calculation of HSL was being challenged. In August, 2019, DC Circuit Court of Appeals issued a unanimous
decision in CHAT and reversed the judgment of the district court in favor of CMS and ordered that CMS’s “2017 Rule” (regarding
Medicaid DSH Payments—Treatment of Third Party Payers in Calculating Uncompensated Care Costs) be reinstated. CMS has not
issued any additional guidance post the ruling. In April 2020, the plaintiffs in the case have petitioned the Supreme Court of the
United States to hear their case. Additionally, there have been separate legal challenges on this same issue in the Fifth and Eight
Circuits. On November 4, 2019, the United States Court of Appeals for the Eighth Circuit issued an opinion upholding the 2017 Rule.
Missouri Hosp. Ass’n v. Azar, No. 18-1778 (8th Cir. Nov. 4, 2019) (i.e. reversing a district court order enjoining the 2017 rule). On
April 20, 2020, the United States Court of Appeals of the Fifth Circuit issued a decision also upholding the 2017 Rule. Baptist
Memorial Hospital v. Azar, No. 18-60592 (5th Cir. April 20, 2020). In light of these court decisions, we continue to maintain reserves
in the financial statements for cumulative Medicaid DSH and UC reimbursements related to our behavioral health hospitals located in
Texas that amounted to $40 million and $35 million as of December 31, 2021 and 2020, respectively.

Nevada SPA:

In Nevada, CMS approved a state plan amendment (“SPA”) in August, 2014 that implemented a hospital supplemental payment

program retroactive to January 1, 2014. This SPA has been approved for additional state fiscal years including the 2022 fiscal year
covering the period of July 1, 2021 through June 30, 2022.

In connection with this program, included in our financial results was approximately $23 million during 2021 and $25 million

during 2020. We estimate that our reimbursements pursuant to this program will approximate $21 million during the year ended
December 31, 2022.

California SPA:

In California, CMS issued formal approval of the 2017-19 Hospital Fee Program in December, 2017 retroactive to January 1,

2017 through September 30, 2019. In September, 2019, the state submitted a request to renew the Hospital Fee Program for the period
July 1, 2019 to December 31, 2021. On February 25, 2020, CMS approved this renewed program. These approvals include the
Medicaid inpatient and outpatient fee-for-service supplemental payments and the overall provider tax structure but did not yet include
the approval of the managed care rate setting payment component for certain rate periods (see table below). The managed care
payment component consists of two categories of payments, “pass-through” payments and “directed” payments. The pass-through

payments are similar in nature to the prior Hospital Fee Program payment method whereas the directed payment method will be based
on actual concurrent hospital Medicaid managed care in-network patient volume.

California Hospital Fee Program CMS Approval Status:

Hospital Fee Program
Component

CMS Methodology Approval
Status

CMS Rate Setting Approval Status

Fee For Service Payment

Approved through December
31, 2021

Approved through December 31, 2021;
Paid through June 30, 2021

Managed Care-Pass-Through
Payment

Approved through December
31, 2021

Managed Care-Directed Payment Approved through December

31, 2020

Approved through June 30, 2017; Paid
in advance of approval through
December 31, 2020

Approved through June 30, 2017; Paid
in advance of approval through
December 31, 2019

In connection with the existing program, included in our financial results was approximately $46 million during 2021 and $63

million during 2020 ($17 million of which related to prior years). We estimate that our reimbursements pursuant to this program will
approximate $50 million during the year ended December 31, 2022. The aggregate impact of the California supplemental payment
program, as outlined above, is included in the above State Medicaid Supplemental Payment Program table.

In April, 2020, the California Department of Health Care Services (“DHCS”) notified hospital providers that participate in the

Medicaid managed care directed payment program that DHCS would recalculate directed payments for the period of July 1, 2017
through September 30, 2018 (“SFY 2018”) to remedy an identified data error. In August, 2020, as a follow-up to that notification,
DHCS issued its corrected directed payment calculations. The updated calculation resulted in a favorable adjustment to the above
program year and also resulted in increased expected supplemental payment amount for program years subsequent to the recalculated
SFY 2018 rate period. The California Hospital Fee amounts noted above include our portion of the state corrected data.

Kentucky Hospital Rate Increase Program (“HRIP”):

In early 2021, CMS approved the Kentucky Medicaid Managed Care Hospital Rate Increase Program (“HRIP”) for SFY 2021,
which covered the period of July 1, 2020 through June 30, 2021. In December 2021, CMS approved the HRIP program period for the
period July 1, 2021 to December 31, 2021. Included in our financial results for the year ended December 31, 2021 was approximately
$97 million of HRIP reimbursement covering the eighteen-month period of July 1, 2020 through December 31, 2021.

Programs such as HRIP require an annual state submission and approval by CMS. In December, 2021, CMS approved the

program for the period of January 1, 2022 through December 31, 2022 at rates similar to the prior year. We estimate that our
reimbursements pursuant to HRIP will approximate $58 million during the year ended December 31, 2022.

Florida Medicaid Managed Care Directed Payment Program (“DPP”):

During the fourth quarter of 2021, we recorded approximately $23 million of increased reimbursement resulting from the
Medicaid managed care directed payment program for the 2021 rate period (covering the period of October 1, 2020 to September 30,
2021). Various DPP related legislative and regulatory approvals result in the retroactive payment of the increased reimbursement after
the applicable rate year has ended. The payment methodology and amount of the 2022 DPP (covering the period of October 1, 2021 to
September 30, 2022) is expected to be comparable to the 2021 DPP. As a result, if CMS and other legislative and regulatory approvals
occur in connection with the 2022 DPP, we estimate that our reimbursements pursuant to the 2022 DPP will approximate $21 million
during the year ended December 31, 2022. Additional Medicaid managed regions in the state may participate in the program during
the 2022 DPP year which, if implemented, would increase our reimbursements received pursuant to the 2022 DPP.

Risk Factors Related To State Supplemental Medicaid Payments:

As outlined above, we receive substantial reimbursement from multiple states in connection with various supplemental
Medicaid payment programs. The states include, but are not limited to, Texas, Mississippi, Illinois, Nevada, Arkansas, California and
Indiana. Failure to renew these programs beyond their scheduled termination dates, failure of the public hospitals to provide the
necessary IGTs for the states’ share of the DSH programs, failure of our hospitals that currently receive supplemental Medicaid
revenues to qualify for future funds under these programs, or reductions in reimbursements, could have a material adverse effect on
our future results of operations.

In April, 2016, CMS published its final Medicaid Managed Care Rule which explicitly permits but phases out the use of pass-

through payments (including supplemental payments) by Medicaid Managed Care Organizations (“MCO”) to hospitals over ten years
but allows for a transition of the pass-through payments into value-based payment structures, delivery system reform initiatives or
payments tied to services under a MCO contract. Since we are unable to determine the financial impact of this aspect of the final rule,
we can provide no assurance that the final rule will not have a material adverse effect on our future results of operations. In

November, 2020, CMS issued a final rule permitting pass-through supplemental provider payments during a time-limited period when
states transition populations or services from fee-for-service Medicaid to managed care.

HITECH Act: In July 2010, the Department of Health and Human Services (“HHS”) published final regulations implementing
the health information technology (“HIT”) provisions of the American Recovery and Reinvestment Act (referred to as the “HITECH
Act”). The final regulation defines the “meaningful use” of Electronic Health Records (“EHR”) and establishes the requirements for
the Medicare and Medicaid EHR payment incentive programs. The final rule established an initial set of standards and certification
criteria. The implementation period for these Medicare and Medicaid incentive payments started in federal fiscal year 2011 and can
end as late as 2016 for Medicare and 2021 for the state Medicaid programs. State Medicaid program participation in this federally
funded incentive program is voluntary but all of the states in which our eligible hospitals operate have chosen to participate. Our acute
care hospitals qualified for these EHR incentive payments upon implementation of the EHR application assuming they meet the
“meaningful use” criteria. The government’s ultimate goal is to promote more effective (quality) and efficient healthcare delivery
through the use of technology to reduce the total cost of healthcare for all Americans and utilizing the cost savings to expand access to
the healthcare system.

All of our acute care hospitals have met the applicable meaningful use criteria. However, under the HITECH Act, hospitals

must continue to meet the applicable meaningful use criteria in each fiscal year or they will be subject to a market basket update
reduction in a subsequent fiscal year. Failure of our acute care hospitals to continue to meet the applicable meaningful use criteria
would have an adverse effect on our future net revenues and results of operations.

In the 2019 IPPS final rule, CMS overhauled the Medicare and Medicaid EHR Incentive Program to focus on interoperability,

improve flexibility, relieve burden and place emphasis on measures that require the electronic exchange of health information between
providers and patients. We can provide no assurance that the changes will not have a material adverse effect on our future results of
operations.

Managed Care: A significant portion of our net patient revenues are generated from managed care companies, which include

health maintenance organizations, preferred provider organizations and managed Medicare (referred to as Medicare Part C or
Medicare Advantage) and Medicaid programs. In general, we expect the percentage of our business from managed care programs to
continue to grow. The consequent growth in managed care networks and the resulting impact of these networks on the operating
results of our facilities vary among the markets in which we operate. Typically, we receive lower payments per patient from managed
care payers than we do from traditional indemnity insurers, however, during the past few years we have secured price increases from
many of our commercial payers including managed care companies.

Commercial Insurance: Our hospitals also provide services to individuals covered by private health care insurance. Private

insurance carriers typically make direct payments to hospitals or, in some cases, reimburse their policy holders, based upon the
particular hospital’s established charges and the particular coverage provided in the insurance policy. Private insurance reimbursement
varies among payers and states and is generally based on contracts negotiated between the hospital and the payer.

Commercial insurers are continuing efforts to limit the payments for hospital services by adopting discounted payment
mechanisms, including predetermined payment or DRG-based payment systems, for more inpatient and outpatient services. To the
extent that such efforts are successful and reduce the insurers’ reimbursement to hospitals and the costs of providing services to their
beneficiaries, such reduced levels of reimbursement may have a negative impact on the operating results of our hospitals.

Surprise Billing Interim Final Rule: On September 30, 2021, the Department of Health and Human Services (“HHS”), the

Department of Labor, and the Department of the Treasury (collectively, the Departments), along with the Office of Personnel
Management (“OPM”), released an interim final rule with comment period, entitled “Requirements Related to Surprise Billing; Part
II.” This rule is related to Title I (the No Surprises Act) of Division BB of the Consolidated Appropriations Act, 2021, and establishes
new protections from surprise billing and excessive cost sharing for consumers receiving health care items/services. It implements
additional protections against surprise medical bills under the No Surprises Act, including provisions related to the independent
dispute resolution process, good faith estimates for uninsured (or self-pay) individuals, the patient-provider dispute resolution process,
and expanded rights to external review. We do not expect this interim final rule to have a material impact on our results of operations.

Other Sources: Our hospitals provide services to individuals that do not have any form of health care coverage. Such patients

are evaluated, at the time of service or shortly thereafter, for their ability to pay based upon federal and state poverty guidelines,
qualifications for Medicaid or other state assistance programs, as well as our local hospitals’ indigent and charity care policy. Patients
without health care coverage who do not qualify for Medicaid or indigent care write-offs are offered substantial discounts in an effort
to settle their outstanding account balances.

Health Care Reform: Listed below are the Medicare, Medicaid and other health care industry changes which have been, or are

scheduled to be, implemented as a result of the Legislation.

Implemented Medicare Reductions and Reforms:

•

The Legislation reduced the market basket update for inpatient and outpatient hospitals and inpatient behavioral health
facilities by 0.25% in each of 2010 and 2011, by 0.10% in each of 2012 and 2013, 0.30% in 2014, 0.20% in each of 2015
and 2016 and 0.75% in each of 2017, 2018 and 2019.

The Legislation implemented certain reforms to Medicare Advantage payments, effective in 2011.

A Medicare shared savings program, effective in 2012.

A hospital readmissions reduction program, effective in 2012.

A value-based purchasing program for hospitals, effective in 2012.

A national pilot program on payment bundling, effective in 2013.

Reduction to Medicare DSH payments, effective in 2014, as discussed above.

Medicaid Revisions:

•

Expanded Medicaid eligibility and related special federal payments, effective in 2014.

The Legislation (as amended by subsequent federal legislation) requires annual aggregate reductions in federal DSH
funding from FFY 2024 through FFY 2027. Medicaid DSH reductions have been delayed several times. Commencing in
federal fiscal year 2024, and continuing through 2027, DSH payments will be reduced by $8 billion annually.

Health Insurance Revisions:

•

Large employer insurance reforms, effective in 2015.

Individual insurance mandate and related federal subsidies, effective in 2014. As noted above in
Health Care Reform, the Tax Cuts and Jobs Act enacted into law in December, 2017 eliminated the
individual insurance federal mandate penalty beginning January 1, 2019.

Federally mandated insurance coverage reforms, effective in 2010 and forward.

The Legislation seeks to increase competition among private health insurers by providing for transparent federal and state
insurance exchanges. The Legislation also prohibits private insurers from adjusting insurance premiums based on health status,
gender, or other specified factors. We cannot provide assurance that these provisions will not adversely affect the ability of private
insurers to pay for services provided to insured patients, or that these changes will not have a negative material impact on our results
of operations going forward.

Value-Based Purchasing:

There is a trend in the healthcare industry toward value-based purchasing of healthcare services. These value-based purchasing

programs include both public reporting of quality data and preventable adverse events tied to the quality and efficiency of care
provided by facilities. Governmental programs including Medicare and Medicaid currently require hospitals to report certain quality
data to receive full reimbursement updates. In addition, Medicare does not reimburse for care related to certain preventable adverse
events. Many large commercial payers currently require hospitals to report quality data, and several commercial payers do not
reimburse hospitals for certain preventable adverse events.

The Legislation required HHS to implement a value-based purchasing program for inpatient hospital services which became
effective on October 1, 2012. The Legislation requires HHS to reduce inpatient hospital payments for all discharges by 2% in FFY
2017 and subsequent years. HHS will pool the amount collected from these reductions to fund payments to reward hospitals that meet
or exceed certain quality performance standards established by HHS. HHS will determine the amount each hospital that meets or
exceeds the quality performance standards will receive from the pool of dollars created by these payment reductions. As part of the
FFY 2022 IPPS final rule described above, and as a result of the on-going COVID-19 pandemic, CMS has implemented a budget
neutral payment policy to fully offset the 2% VBP withhold during FFY 2022.

Hospital Acquired Conditions:

The Legislation prohibits the use of federal funds under the Medicaid program to reimburse providers for medical assistance
provided to treat hospital acquired conditions (“HAC”). Beginning in FFY 2015, hospitals that fall into the top 25% of national risk-
adjusted HAC rates for all hospitals in the previous year will receive a 1% reduction in their total Medicare payments.

Readmission Reduction Program:

In the Legislation, Congress also mandated implementation of the hospital readmission reduction program (“HRRP”). Hospitals

with excessive readmissions for conditions designated by HHS will receive reduced payments for all inpatient discharges, not just
discharges relating to the conditions subject to the excessive readmission standard. The HRRP currently assesses penalties on hospitals
having excess readmission rates for heart failure, myocardial infarction, pneumonia, acute exacerbation of chronic obstructive
pulmonary disease (COPD) and elective total hip arthroplasty (THA) and/or total knee arthroplasty (TKA), excluding planned
readmissions, when compared to expected rates. In the fiscal year 2015 IPPS final rule, CMS added readmissions for coronary artery
bypass graft (CABG) surgical procedures beginning in fiscal year 2017. To account for excess readmissions, an applicable hospital's
base operating DRG payment amount is adjusted for each discharge occurring during the fiscal year. Readmissions payment
adjustment factors can be no more than a 3 percent reduction.

Accountable Care Organizations:

The Legislation requires HHS to establish a Medicare Shared Savings Program that promotes accountability and coordination of

care through the creation of accountable care organizations (“ACOs”). The ACO program allows providers (including hospitals),
physicians and other designated professionals and suppliers to voluntarily work together to invest in infrastructure and redesign
delivery processes to achieve high quality and efficient delivery of services. The program is intended to produce savings as a result of
improved quality and operational efficiency. ACOs that achieve quality performance standards established by HHS will be eligible to
share in a portion of the amounts saved by the Medicare program. CMS is also developing and implementing more advanced ACO
payment models, such as the Next Generation ACO Model, which require ACOs to assume greater risk for attributed
beneficiaries. On December 21, 2018, CMS published a final rule that, in general, requires ACO participants to take on additional risk
associated with participation in the program. On April 30, 2020, CMS issued an interim final rule with comment in response to the
COVID-19 national emergency permitting ACOs with current agreement periods expiring on December 31, 2020 the option to extend
their existing agreement period by one year, and permitting certain ACOs to retain their participation level through 2021. It remains
unclear to what extent providers will pursue federal ACO status or whether the required investment would be warranted by increased
payment.

Bundled Payments for Care Improvement Advanced:

The Center for Medicare & Medicaid Innovation (“CMMI”) implemented a new, second generation voluntary episode payment
model, Bundled Payments for Care Improvement Advanced (“BPCI-Advanced” or the “Program”), with the first performance period
beginning October 1, 2018. BPCI-Advanced is designed to test a new iteration of bundled payments with an aim to align incentives
among participating health care providers to reduce expenditures and improve quality of care for traditional Medicare beneficiaries.

During the fourth quarter of 2020, CMS restructured the FY2021 to FY2023 program and required participants to select from

eight Clinical Episode Service Line Groups instead of individual clinical episodes. CMS also announced that the now voluntary
program would become mandatory in 2024.

For our hospitals that participated in the program, the CMS BPCI-A reconciliation for the period October 1, 2018 through

December 31, 2020 did not have a material impact on our financial results.

The ultimate success and financial impact of the BPCI-Advanced program is contingent on multiple variables so we are unable

to estimate the future impact. However, given the breadth and scope of participation of our acute care hospitals in BPCI-Advanced,
the impact could be significant (either favorably or unfavorably) depending on actual program results.

2019 Novel Coronavirus Disease Medicare and Medicaid Payment Related Legislation

In response to the growing threat of COVID-19, on March 13, 2020 a national emergency was declared. The declaration
empowered the HHS Secretary to waive certain Medicare, Medicaid and Children’s Health Insurance Program (“CHIP”) program
requirements and Medicare conditions of participation under Section 1135 of the Social Security Act. Having been granted this
authority by HHS, CMS issued a broad range of blanket waivers, which eased certain requirements for impacted providers, including:

• Waivers and Flexibilities for Hospitals and other Healthcare Facilities including those for physical environment

requirements and certain Emergency Medical Treatment & Labor Act provisions
Provider Enrollment Flexibilities
Flexibility and Relief for State Medicaid Programs including those under section 1135 Waivers
Suspension of Certain Enforcement Activities

•
•
•

In addition to the national emergency declaration, Congress passed and Presidents Trump and Biden have signed various forms of

legislation intended to support state and local authority responses to COVID-19 as well as provide fiscal support to businesses,
individuals, financial markets, hospitals and other healthcare providers.

Some of the financial support included in the various legislative actions include:

• Medicaid FMAP Enhancement

• The FMAP was increased by 6.2% retroactive to the federal fiscal quarter beginning January 1, 2020 and each
subsequent federal fiscal quarter for all states and U.S. territories during the declared public health emergency, in
accordance with specified conditions.

•

Public Health Emergency Declaration

•

The HHS Secretary renewed the public health emergency (“PHE”) effective January 16, 2022 for ninety (90) days.
As a result, states would be eligible for the enhanced FMAP through the end of federal fiscal quarter ending June 30,
2022 should the PHE not be rescinded by the Secretary before the end of the ninety day period.

• Creation of a $250 billion Public Health and Social Services Emergency Fund (“PHSSEF”)

•

Makes grants available to hospitals and other healthcare providers to cover unreimbursed healthcare related
expenses or lost revenues attributable to the public health emergency resulting from the coronavirus.

During 2021, we received approximately $189 million in PHSSEF grants from the federal government as provided
for by the CARES Act. As previously disclosed, we returned these funds to HHS during the second quarter of 2021.
Since our intent was to return these funds, our financial results for the year ended December 31, 2021 include no
impact from the receipt of these federal funds. In connection with this PHSSEF program, as well as other various
state and local governmental stimulus programs, included in financial results were reimbursements of approximately
$20 million recorded during 2021 and $413 million recorded during 2020.

During the year ended December 31, 2020, we received approximately $417 million of funds from various
governmental stimulus programs, most notably the PHSSEF as provided for by the CARES Act. As mentioned
above, included financial results for the year ended December 31, 2020 was approximately $413 million of revenues
recognized in connection with funds received from these federal, state and local governmental stimulus programs.

All PHSSEF receipts are subject to meeting the applicable the terms and conditions of the various distribution
programs as of September 30, 2021. The Consolidated Appropriations Act, 2021 (H.R. 133) enacted on December
27, 2020 includes language that provides specific instructions on: (1) the redistribution of PHSSEF grant payments
by a parent company among its subsidiaries, and; (2) the calculation of lost revenue in a PHSSEF grant entitlement
determination. The HHS terms and conditions for all grant recipients and specific fund distributions are located at
https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/for-providers/index.html

• Reimburse hospitals at Medicare rates for uncompensated COVID-19 care for the uninsured

•

Our financial results for the years ended December 31, 2021 and 2020 include approximately $71 million and $29
million, respectively, of revenues recorded in connection with this COVID-19 uninsured program. Revenue for the
eligible patient encounters is recorded in the period in which the encounter is deemed eligible for this program net of
any normal accounting reserves.

• Medicare Sequestration Relief

•

Suspension of the 2% Medicare sequestration offset for Medicare services provided from May 1, 2020 through
December 31, 2021 by various legislative extensions. In December, 2021, the suspended 2% payment reduction was
extended until March 31, 2022 and partially suspended at a 1% payment reduction for an additional three-month
period that ends on June 30, 2022.
Our financial results for the years ended December 31, 2021 and 2020 include approximately $45 million and $30
million, respectively, of revenues recorded in connection with this Medicare sequestration relief program.

• Medicare add-on for inpatient hospital COVID-19 patients

•

Increases the payment that would otherwise be made to a hospital for treating a Medicare patient admitted with
COVID-19 by twenty percent (20%) for the duration of the COVID-19 public health emergency.

Our financial results for the years ended December 31, 2021 and 2020 include approximately $34 million and $32
million, respectively, of revenues recorded in connection with this COVID-19 Medicare add-on program. These
payments were intended to offset the increased expenses associated with the treatment of Medicare COVID-19
patients.

• Expansion of the Medicare Accelerated and Advance Payment Program (“MAAPP”)

•

In March, 2021, we fully repaid the $695 million of Medicare Accelerated payments received during 2020.

In addition to statutory and regulatory changes to the Medicare program and each of the state Medicaid programs, our

operations and reimbursement may be affected by administrative rulings, new or novel interpretations and determinations of existing
laws and regulations, post-payment audits, requirements for utilization review and new governmental funding restrictions, all of
which may materially increase or decrease program payments as well as affect the cost of providing services and the timing of
payments to our facilities. The final determination of amounts we receive under the Medicare and Medicaid programs often takes
many years, because of audits by the program representatives, providers’ rights of appeal and the application of numerous technical
reimbursement provisions. We believe that we have made adequate provisions for such potential adjustments. Nevertheless, until final
adjustments are made, certain issues remain unresolved and previously determined allowances could become either inadequate or
more than ultimately required.

Finally, we expect continued third-party efforts to aggressively manage reimbursement levels and cost controls. Reductions in

reimbursement amounts received from third-party payers could have a material adverse effect on our financial position and our results.
Other Operating Results

Interest Expense

Reflected below are the components of our interest expense which amounted to $84 million during 2021 and $106 million

during 2020 (amounts in thousands):

Revolving credit & demand notes (a.)
$700 million, 4.75% Senior Notes due 2022 (b.)
$400 million, 5.00% Senior Notes due 2026 (c.)
$800 million, 2.65% Senior Notes due 2030 (d.)
$700 million, 1.65% Senior Notes due 2026 (e.)
$500 million, 2.65% Senior Notes due 2032 (f.)
Term loan facility A (a.)
Term loan facility B (a.)
Accounts receivable securitization program (g.)
Subtotal-revolving credit, demand notes, Senior Notes, term
loan facilities and accounts receivable securitization
program
Amortization of financing fees
Other combined interest expense
Capitalized interest on major projects
Interest income
Interest expense, net

2021

2020

2,318 $
—
14,000
21,470
4,137
4,720
26,408
5,941
787

79,781
4,310
5,588
(4,411 )
(1,596 )
83,672 $

2,248
23,932
20,000
5,849
—
—
38,467
11,892
3,752

106,140
4,938
2,268
(4,257)
(2,804)
106,285

(a.) In August, 2021, we entered into a seventh amendment to our credit agreement dated November 15, 2010, as amended,
which provided for the amendment and restatement of the previously existing credit facility. In September, 2021, we
entered into an eighth amendment to our credit agreement which modified the definition of “Adjusted LIBO Rate”. The
seventh amendment, provided for, among other things, the following: (i) a $1.2 billion aggregate amount revolving credit
facility that is scheduled to mature in August, 2026, representing an increase of $200 million over the $1.0 billion previous
commitment ($343 million of borrowings outstanding as of December 31, 2021); (ii) a $1.7 billion tranche A term loan
facility that is scheduled to mature in August, 2026, resulting in a reduction of $150 million from the $1.85 billion of
borrowings outstanding under the previous tranche A term loan facility, and; (iii) repayment of approximately $488 million
of borrowings outstanding under the previous tranche B term loan facility. The $638 million net repayment of borrowings
under the tranche A and tranche B term loan facilities in connection with the seventh amendment ($150 million and $488
million, respectively), were funded utilizing a portion of the proceeds generated from the August, 2021 issuance of the $700
million, 1.65% Senior Notes due in 2026, and the $500 million, 2.65%, Senior Notes due in 2032.

(b.) In September, 2020, we redeemed the entire $700 million aggregate principal amount of our previously outstanding 4.75%

Senior Secured Notes that were scheduled to mature in 2022.

(c.) In September, 2021, we redeemed the entire $400 million aggregate principal amount of our previously outstanding 5.00%
Senior Secured Notes that were scheduled to mature in 2026 at a cash redemption price equal to the sum of 102.50% of the
aggregate principal amount. This redemption was funded utilizing a portion of the proceeds generated from the August,
2021 issuance of the $700 million, 1.65% Senior Notes due in 2026, and the $500 million, 2.65% Senior Notes due in 2032,
as discussed in (e.) and (f.) below.

(d.) In September, 2020, we completed the offering of $800 million aggregate principal amount of 2.65% Senior Notes due in

2030.

(e.) In August, 2021, we completed the offering of $700 million aggregate principal amount of 1.65% Senior Notes due in 2026.

(f.) In August, 2021, we completed the offering of $500 million aggregate principal amount of 2.65% Senior Notes due in 2032.

(g.) Our accounts receivable securitization program was amended in April, 2021 to reduce the borrowing commitment to $20
million (from $450 million previously) and to extend the maturity date to April 25, 2022. There are no outstanding
borrowings as of December 31, 2021.

Interest expense decreased by $22 million during 2021 to $84 million as compared to $106 million during 2020. The decrease
was primarily due to: (i) a net $26 million decrease in aggregate interest expense on our revolving credit, demand notes, senior notes,
term loan facilities and accounts receivable securitization program resulting from a decrease in our aggregate average cost of
borrowings pursuant to these facilities (2.1% during 2021 as compared to 2.8% during 2020), partially offset by a slight increase in the
aggregate average outstanding borrowings ($3.72 billion during 2021 as compared to $3.70 billion during 2020), partially offset by;
(ii) a net $4 million increase in other interest expenses.

The average effective interest rate, including amortization of deferred financing costs, original issue discount and designated
interest rate swap expense/income, on borrowings outstanding under our revolving credit, demand notes, senior notes, term loan A and
B facilities and accounts receivable securitization program, which amounted to approximately $3.72 billion during 2021 and $3.70
billion during 2020, were 2.2% during 2021 and 3.0% during 2020.
Costs Related to Early Extinguishment of Debt

In connection with financing transactions completed during 2021 and 2020, our results of operations for each year include pre-
tax charges of approximately $17 million in 2021 and $1 million in 2020, incurred for the costs related to the extinguishment of debt.
These charges, which were included in other operating (income) expenses, net, consisted of the following: (i) during 2021, write-off of
deferred charges (approximately $7 million) as well as the make-whole premium paid on the early redemption of the $400 million, 5%
senior notes (approximately $10 million), and; (ii) during 2020, write-off of deferred charges ($3 million), partially offset by the
recording of the unamortized bond premium ($2 million) related to the above-mentioned redemption (in September, 2020) of the $700
million aggregate principal amount of the 4.75% senior secured notes that were scheduled to mature in 2022.
Provision for Asset Impairment

In connection with the discontinuation of a certain module of a new clinical/financial information technology application under

development, our financial results for the year ended December 31, 2021 include a pre-tax provision for asset impairment of
approximately $14 million to write-off the applicable portion of the capitalized costs incurred and is included in other operating
expenses on the accompanying consolidated statement of income.
Provision for Income Taxes and Effective Tax Rates

The effective tax rates, as calculated by dividing the provision for income taxes by income before income taxes, were as follows

for each of the years ended December 31, 2021 and 2020 (dollar amounts in thousands):

Provision for income taxes
Income before income taxes
Effective tax rate

2021
305,681 $
1,293,313
23.6 %

2020
299,293
1,252,083

23.9%

The provision for income taxes increased $6 million during 2021, as compared to 2020, due primarily to: (i) the income tax

provision recorded in connection with the $54 million increase in pre-tax income, as discussed above in Results of Operations, and;
(ii) a $10 million decrease in the provision for income taxes resulting from ASU 2016-09, which decreased our provision for income
taxes by approximately $2 million during 2021, as compared to an increase of approximately $7 million during 2020.

Effects of Inflation and Seasonality

Seasonality —Our acute care services business is typically seasonal, with higher patient volumes and net patient service

revenue in the first and fourth quarters of the year. This seasonality occurs because, generally, more people become ill during the
winter months, which results in significant increases in the number of patients treated in our hospitals during those months.

Inflation — The healthcare industry is very labor intensive and salaries and benefits are subject to inflationary pressures, as are
supply costs, construction costs and medical equipment and other costs. The nationwide shortage of nurses and other clinical staff and
support personnel has been a significant operating issue facing us and other healthcare providers. In particular, like others in the
healthcare industry, we continue to experience a shortage of nurses and other clinical staff and support personnel in certain geographic
areas, which has been exacerbated by the COVID-19 pandemic. We are treating patients with COVID-19 in our facilities and, in some
areas, the increased demand for care is putting a strain on our resources and staff, which has required us to utilize higher-cost
temporary labor and pay premiums above standard compensation for essential workers. The length and extent of the disruptions
caused by the COVID-19 pandemic are currently unknown; however, we expect such disruptions to continue into 2022 and potentially
throughout the duration of the pandemic and beyond. This staffing shortage may require us to further enhance wages and benefits to
recruit and retain nurses and other clinical staff and support personnel or require us to hire expensive temporary personnel. We have
also experienced cost increases related to the procurement of medical supplies and equipment as well as construction of new facilities

and additional capacity added to existing facilities. Our ability to pass on increased costs associated with providing healthcare to
Medicare and Medicaid patients is limited due to various federal, state and local laws which have been enacted that, in certain cases,
limit our ability to increase prices.

Liquidity

Year ended December 31, 2021 as compared to December 31, 2020:

Net cash provided by operating activities

Net cash provided by operating activities was $884 million during 2021 as compared to $2.360 billion during 2020. The net

decrease of $1.476 billion was primarily attributable to the following:



an unfavorable change of $1.398 billion resulting primarily from the early return of the $695 million of Medicare
accelerated payments which were repaid during the first quarter of 2021, as compared to a favorable change of $699
million experienced during 2020 resulting primarily from receipt of the Medicare accelerated payments;

an unfavorable change of approximately $262 million due to the following, as provided for by the CARES Act: (i) a $178
million favorable impact experienced during 2020 resulting from the payment deferral of the employer’s share of Social
Security taxes, and; (ii) an $84 million unfavorable impact experienced during 2021 resulting from the payment of the
first of two installments to remit the deferred amount (the $94 million remaining payment deferral will be remitted during
2022);

a favorable change of $137 million in accounts receivable due, in part, to the unfavorable impact experienced during
2020, and corresponding favorable impact experienced during 2021, resulting from the coding, billing and collection
delays experienced during the fourth quarter of 2020 resulting from the information technology incident, as discussed
above;

a favorable change of $88 million resulting from an increase in net income plus/minus depreciation and amortization
expense, stock-based compensation, gain/loss on sale of assets and businesses and costs related to debt extinguishment
and provision for asset impairment;

an unfavorable change of $64 million in accrued and deferred income taxes;

a favorable change of $49 million in accrued insurance expense, net of commercial premiums paid, and;

$26 million of other combined net unfavorable changes.

Days sales outstanding (“DSO”): Our DSO are calculated by dividing our net revenue by the number of days in the year. The
result is divided into the accounts receivable balance at the end of the year. Our DSO were 50 days at December 31, 2021 and 55 days
at December 31, 2020.

Net cash used in investing activities

Net cash used in investing activities was $914 million during 2021 and $803 million during 2020.

2021:

The $914 million of net cash used in investing activities during 2021 consisted of:



$856 million spent on capital expenditures including capital expenditures for equipment, renovations and new projects at
various existing facilities;

$105 million spent to acquire businesses and property, consisting primarily of a micro acute care hospital located in Las
Vegas, Nevada, and a physician practice management company located in California;

$25 million of proceeds received from sales of assets and businesses;

$20 million received in connection with the implementation of information technology applications (consists primarily of
refunded costs previously paid), and;

$1 million received in connection with net cash outflows from forward exchange contracts that hedge our investment in
the U.K. against movements in exchange rates.

2020:

The $803 million of net cash used in investing activities during 2020 consisted of:



$731 million spent on capital expenditures including capital expenditures for equipment, renovations and new projects at
various existing facilities;



$52 million spent to acquire businesses and property, consisting primarily of the real estate assets of an acute care hospital
located in Las Vegas, Nevada;

$22 million spent in connection with net cash outflows from forward exchange contracts that hedge our investment in the
U.K. against movements in exchange rates;

$8 million of proceeds received from sales of assets and businesses;

$3 million spent on the purchase and implementation of information technology applications, and;

$3 million spent to fund investments in various joint-ventures.

Net cash used in financing activities

Net cash used in financing activities was $1.069 billion during 2021 and $385 million during 2020.

2021:

The $1.069 billion of net cash used in financing activities during 2021 consisted of the following:

spent $3.038 billion on net repayment of debt as follows: (i) $1.911 billion related to our tranche A term loan facility; (ii)
$490 million related to our terminated tranche B term loan facility; (iii) $410 million related to the early redemption of our
previously outstanding $400 million, 5.00% senior secured notes which were scheduled to mature in June, 2026; (iv) $225
million related to our accounts receivable securitization program, and; (v) $2 million related to other debt facilities;

generated $3.255 billion of proceeds related to new borrowings as follows: (i) $1.7 billion related to our tranche A term
loan facility; (ii) $699 million (net of discount) related to the August, 2021 issuance of $700 million, 1.65% senior
secured notes due in September, 2026; (iii) $499 million (net of discount) related to the August, 2021 issuance of $500
million, 2.65% senior secured notes due in January, 2032; (iv) $343 million pursuant to our revolving credit facility, and;
(v) $14 million of proceeds received related to other debt facilities;

spent $1.221 billion to repurchase shares of our Class B Common Stock in connection with: (i) open market purchases
pursuant to our stock repurchase program ($1.201 billion), and; (ii) income tax withholding obligations related to stock-
based compensation programs ($20 million);

spent $66 million to pay quarterly cash dividends of $.20 per share;

spent $19 million to pay financing costs incurred in connection with the various financing transactions, as discussed
herein;

generated $13 million from the issuance of shares of our Class B Common Stock pursuant to the terms of employee stock
purchase plans;

received $13 million in capital contributions from minority members in majority owned businesses, and;

spent $7 million to pay profit distributions related to noncontrolling interests in majority owned businesses.



2020:

The $385 million of net cash used in financing activities during 2020 consisted of the following:



spent $963 million on net repayment of debt as follows: (i) $700 million to redeem our previously outstanding 4.75%
senior secured notes which were scheduled to mature in 2022; (ii) $175 million related to our accounts receivable
securitization program; (iii) $50 million related to our term loan A facility; (iv) $31 million related to our short-term, on-
demand credit facility; (v) $5 million related to our term loan B facility, and; (vi) $2 million related to other debt facilities;

generated $802 million of proceeds related to new borrowings as follows: (i) $798 million of proceeds (net of discount)
received in connection with the issuance in September, 2020, of the $800 million, 2.65% senior secured notes which are
scheduled to mature in 2030, and; (ii) $4 million related to other debt facilities.

spent $207 million to repurchase shares of our Class B Common Stock in connection with: (i) open market purchases
pursuant to our stock repurchase program, which was suspended in April, 2020 for the remainder of 2020 as a result of the
COVID-19 pandemic ($197 million), and; (ii) income tax withholding obligations related to stock-based compensation
programs ($10 million);

spent $20 million to pay profit distributions related to noncontrolling interests in majority owned businesses;

received $18 million in capital contributions from minority members in majority owned businesses;

spent $17 million to pay a cash dividend of $.20 per share during the first quarter of 2020 (quarterly dividends were
suspended during the remainder of 2020 as a result of the COVID-19 pandemic);



generated $12 million from the issuance of shares of our Class B Common Stock pursuant to the terms of employee stock
purchase plans, and;

spent $10 million to pay financing costs incurred in connection with the $800 million, 2.65% senior secured notes which
were issued during the third quarter of 2020.

2022 Expected Capital Expenditures:

During 2022, we expect to spend approximately $950 million to $1.1 billion on capital expenditures which includes

expenditures for capital equipment, construction of new facilities, and renovations and expansions at existing hospitals. We believe
that our capital expenditure program is adequate to expand, improve and equip our existing hospitals. We expect to finance all capital
expenditures and acquisitions with internally generated funds and/or additional funds, as discussed below.

Capital Resources:

Credit Facilities and Outstanding Debt Securities

On August 24, 2021, we entered into a seventh amendment to our credit agreement dated as of November 15, 2010, as amended

and restated as of September 21, 2012, August 7, 2014 and October 23, 2018, among UHS, as borrower, the several banks and other
financial institutions from time to time parties thereto, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, (the
“Credit Agreement”). In September, 2021, we entered into an eighth amendment to our Credit Agreement which modified the
definition of “Adjusted LIBO Rate”.

The seventh amendment to the Credit Agreement, among other things, provided for the following:

a $1.2 billion aggregate amount revolving credit facility, which is scheduled to mature on August 24, 2026, representing an
increase of $200 million over the $1.0 billion previous commitment. As of December 31, 2021, this facility had $343 million
of borrowings outstanding and $854 million of available borrowing capacity, net of $4 million of outstanding letters of credit;

a $1.7 billion tranche A term loan facility, which is scheduled to mature on August 24, 2026, resulting in an initial reduction
of $150 million from the $1.85 billion of borrowings outstanding under the previous tranche A term loan facility, and;

repayment of approximately $488 million of outstanding borrowings and termination of the previous tranche B term loan
facility.

Pursuant to the terms of the seventh amendment, the tranche A term loan, which had $1.689 billion of borrowings outstanding as

of December 31, 2021, provides for installment payments of $10.625 million per quarter beginning on December 31, 2021 through
September 30, 2023 and $21.25 million per quarter beginning on December 31, 2023 through June 30, 2026. The unpaid principal
balance at June 30, 2026 is due on the maturity date.

Revolving credit and tranche A term loan borrowings under the Credit Agreement bear interest at our election at either (1) the
ABR rate which is defined as the rate per annum equal to the greatest of (a) the lender’s prime rate, (b) the weighted average of the
federal funds rate, plus 0.5% and (c) one month LIBOR rate plus 1%, in each case, plus an applicable margin based upon our
consolidated leverage ratio at the end of each quarter ranging from 0.25% to 0.625%, or (2) the one, three or six month LIBOR rate (at
our election), plus an applicable margin based upon our consolidated leverage ratio at the end of each quarter ranging from 1.25% to
1.625%. As of December 31, 2021, the applicable margins were 0.25% for ABR-based loans and 1.25% for LIBOR-based loans under
the revolving credit and term loan A facilities. The revolving credit facility includes a $125 million sub-limit for letters of credit. The
Credit Agreement is secured by certain assets of the Company and our material subsidiaries (which generally excludes asset classes
such as substantially all of the patient-related accounts receivable of our acute care hospitals, and certain real estate assets and assets
held in joint-ventures with third parties) and is guaranteed by our material subsidiaries.

The Credit Agreement includes a material adverse change clause that must be represented at each draw. The Credit Agreement
also contains covenants that include a limitation on sales of assets, mergers, change of ownership, liens and indebtedness, transactions
with affiliates, dividends and stock repurchases; and requires compliance with financial covenants including maximum leverage. We
were in compliance with all required covenants as of December 31, 2021 and December 31, 2020.

On August 24, 2021, we completed the following via private offerings to qualified institutional buyers under Rule 144A and to

non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended:

Issued $700 million of aggregate principal amount of 1.65% senior secured notes due on September 1, 2026, and;

Issued $500 million of aggregate principal amount of 2.65% senior secured notes due on January 15, 2032.

In April, 2021, our accounts receivable securitization program (“Securitization”) was amended (the eighth amendment) to: (i)
reduce the aggregate borrowing commitments to $20 million (from $450 million previously); (ii) slightly reduce the borrowing rates
and commitment fee, and; (iii) extend the maturity date to April 25, 2022 (from April, 2021 previously). Substantially all other
material terms and conditions remained unchanged. There were no borrowings outstanding pursuant to the Securitization as of
December 31, 2021.

On September 13, 2021, we redeemed $400 million of aggregate principal amount of 5.00% senior secured notes, that were

scheduled to mature on June 1, 2026, at 102.50% of the aggregate principal, or $410 million.

As of December 31, 2021, we had combined aggregate principal of $2.0 billion from the following senior secured notes:

o $700 million aggregate principal amount of 1.65% senior secured notes due in September, 2026 (“2026 Notes”) which were

issued on August 24, 2021.

o $800 million aggregate principal amount of 2.65% senior secured notes due in October, 2030 (“2030 Notes”) which were

issued on September 21, 2020.

o $500 million of aggregate principal amount of 2.65% senior secured notes due in January, 2032 (“2032 Notes”) which were

issued on August 24, 2021.

On September 28, 2020, we redeemed the entire $700 million aggregate principal amount of our previously outstanding 4.75%

senior secured notes, which were scheduled to mature in August, 2022, at 100% of the aggregate principal amount.

Interest on the 2026 Notes is payable on March 1st and September 1st until the maturity date of September 1, 2026. Interest on

the 2030 Notes payable on April 15th and October 15th, until the maturity date of October 15, 2030. Interest on the 2032 Notes is
payable on January 15th and July 15th until the maturity date of January 15, 2032.

The 2026 Notes, 2030 Notes and 2032 Notes (collectively “The Notes”) were offered only to qualified institutional buyers under

Rule 144A and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act of 1933, as
amended (the “Securities Act”). The Notes have not been registered under the Securities Act and may not be offered or sold in the
United States absent registration or an applicable exemption from registration requirements.

The Notes are guaranteed (the “Guarantees”) on a senior secured basis by all of our existing and future direct and indirect

subsidiaries (the “Subsidiary Guarantors”) that guarantee our Credit Agreement, or other first lien obligations or any junior lien
obligations. The Notes and the Guarantees are secured by first-priority liens, subject to permitted liens, on certain of the Company’s
and the Subsidiary Guarantors’ assets now owned or acquired in the future by the Company or the Subsidiary Guarantors (other than
real property, accounts receivable sold pursuant to the Company’s Existing Receivables Facility (as defined in the Indenture pursuant
to which The Notes were issued (the “Indenture”)), and certain other excluded assets). The Company’s obligations with respect to The
Notes, the obligations of the Subsidiary Guarantors under the Guarantees, and the performance of all of the Company’s and the
Subsidiary Guarantors’ other obligations under the Indenture, are secured equally and ratably with the Company’s and the Subsidiary
Guarantors’ obligations under the Credit Agreement and The Notes by a perfected first-priority security interest, subject to permitted
liens, in the collateral owned by the Company and its Subsidiary Guarantors, whether now owned or hereafter acquired. However, the
liens on the collateral securing The Notes and the Guarantees will be released if: (i) The Notes have investment grade ratings; (ii) no
default has occurred and is continuing, and; (iii) the liens on the collateral securing all first lien obligations (including the Credit
Agreement and The Notes) and any junior lien obligations are released or the collateral under the Credit Agreement, any other first
lien obligations and any junior lien obligations is released or no longer required to be pledged. The liens on any collateral securing
The Notes and the Guarantees will also be released if the liens on that collateral securing the Credit Agreement, other first lien
obligations and any junior lien obligations are released.

In connection with the issuance of The Notes, the Company, the Subsidiary Guarantors and the representatives of the several
initial purchasers, entered into Registration Rights Agreements (the “Registration Rights Agreements”), whereby the Company and the
Subsidiary Guarantors have agreed, at their expense, to use commercially reasonable best efforts to: (i) cause to be filed a registration
statement enabling the holders to exchange The Notes and the Guarantees for registered senior secured notes issued by the Company
and guaranteed by the then Subsidiary Guarantors under the Indenture (the “Exchange Securities”), containing terms identical to those
of The Notes (except that the Exchange Securities will not be subject to restrictions on transfer or to any increase in annual interest
rate for failure to comply with the Registration Rights Agreements); (ii) cause the registration statement to become effective; (iii)
complete the exchange offer not later than 60 days after such effective date and in any event on or prior to a target registration date of
March 21, 2023 in the case of the 2030 Notes and February 24, 2024 in the case of the 2026 and 2032 Notes, and; (iv) file a shelf
registration statement for the resale of The Notes if the exchange offers cannot be effected within the time periods listed above. The
interest rate on The Notes will increase and additional interest thereon will be payable if the Company does not comply with its
obligations under the Registration Rights Agreements.

As discussed in Note 9 to the Consolidated Financial Statements-Relationship with Universal Health Realty Income Trust and
Other Related Party Transactions, on December 31, 2021, we (through wholly-owned subsidiaries of ours) entered into an asset
exchange and substitution transaction with Universal Health Realty Income Trust (the “Trust”), pursuant to the terms of which we,
among other things, transferred to the Trust, the real estate assets of Aiken Regional Medical Center (“Aiken”) and Canyon Creek
Behavioral Health (“Canyon Creek”). In connection with this transaction, Aiken and Canyon Creek (as lessees), entered into a master
lease and individual property leases (with the Trust as lessor), for initial lease terms on each property of approximately twelve years,
ending on December 31, 2033. As a result of our purchase option within the Aiken and Canyon Spring lease agreements, this asset
purchase and sale transaction is accounted for as a failed sale leaseback in accordance with U.S. GAAP and we have accounted for the
transaction as a financing arrangement. Our monthly lease payments payable to the Trust will be recorded to interest expense and as a
reduction of the outstanding financial liability. The amount allocated to interest expense will be determined using our incremental

borrowing rate and will be based on the outstanding financial liability. In connection with this transaction, our Consolidated Balance
Sheet at December 31, 2021 reflects a financial liability of approximately $82 million which is included in debt.

At December 31, 2021, the carrying value and fair value of our debt were each approximately $4.2 billion. At December 31,
2020, the carrying value and fair value of our debt were each approximately $3.9 billion. The fair value of our debt was computed
based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the
authoritative guidance for disclosures in connection with debt instruments.

Our total debt as a percentage of total capitalization was approximately 41% at December 31, 2021 and 38% at December 31,

2020.

We expect to finance all capital expenditures and acquisitions and pay dividends and potentially repurchase shares of our

common stock utilizing internally generated and additional funds. Additional funds may be obtained through: (i) borrowings under our
existing revolving credit facility, which had $854 million of available borrowing capacity as of December 31, 2021, or through
refinancing the existing Credit Agreement; (ii) the issuance of other short-term and/or long-term debt, and/or; (iii) the issuance of
equity. We believe that our operating cash flows, cash and cash equivalents, available commitments under existing agreements, as
well as access to the capital markets, provide us with sufficient capital resources to fund our operating, investing and financing
requirements for the next twelve months. However, in the event we need to access the capital markets or other sources of financing,
there can be no assurance that we will be able to obtain financing on acceptable terms or within an acceptable time. Our inability to
obtain financing on terms acceptable to us could have a material unfavorable impact on our results of operations, financial condition
and liquidity.

Contractual Obligations and Off-Balance Sheet Arrangements

As of December 31, 2021 we were party to certain off balance sheet arrangements consisting of standby letters of credit and

surety bonds which totaled $168 million consisting of: (i) $158 million related to our self-insurance programs, and; (ii) $10 million of
other debt and public utility guarantees.

Obligations under operating leases for real property, real property master leases and equipment amount to $448 million as of
December 31, 2021. The real property master leases are leases for buildings on or near hospital property for which we guarantee a
certain level of rental income. We sublease space in these buildings and any amounts received from these subleases are offset against
the expense. In addition, we lease certain hospital facilities from Universal Health Realty Trust (the “Trust”) with terms scheduled to
expire in 2026, 2033 and 2040. These leases contain various renewal options, as disclosed in Note 9 to the Consolidated Financial
Statements-Relationship with Universal Health Realty Income Trust and Other Related Party Transactions. We also lease two free-
standing emergency departments and space in certain medical office buildings which are owned by the Trust. In addition, we lease the
real property of certain other facilities from non-related parties as indicated in Item 2. Properties, as included herein.

The following represents the scheduled maturities of our contractual obligations as of December 31, 2021:

Long-term debt obligations (a)
Estimated future interest payments on debt
outstanding as of December 31, 2021 (b)
Construction commitments (c)
Purchase and other obligations (d)
Operating leases (e)
Estimated future payments for defined benefit
pension plan, and other retirement plan (f)
Health and dental unpaid claims (g)
Total contractual cash obligations

Less than

Payments Due by Period (dollars in thousands)
2-3
years
151,660 $ 2,552,668

4-5
years

48,409

1 year

After
5 years
$ 1,437,551

94,725
10,532
54,236
75,790

160,632
10,532
116,021
127,348

146,614
0
84,146
95,291

241,182
0
112,325
150,024

Total
$ 4,190,288

643,153
21,063
366,728
448,453

178,861
113,600
$ 5,962,146

17,861
113,600
415,153

17,889
0

18,616
0
584,082 $ 2,897,335

124,495
0
$ 2,065,577

(a) Reflects debt outstanding, after unamortized financing costs, as of December 31, 2021 as discussed in Note 4 to the

Consolidated Financial Statements.

(b) Assumes that all debt outstanding as of December 31, 2021, including borrowings under our Credit Agreement, remain

outstanding until the final maturity of the debt agreements at the same interest rates (some of which are floating) which were in
effect as of December 31, 2021. We have the right to repay borrowings upon short notice and without penalty, pursuant to the
terms of the Credit Agreement.

(c) Our share of the estimated construction cost of a behavioral health care facility scheduled to be completed in 2023 that, subject
to approval of certain regulatory conditions, we are required to build pursuant to a joint-venture agreement with a third party. In
addition, we had various other projects under construction as of December 31, 2021. Because we can terminate substantially all
of the construction contracts related to the various other projects at any time without paying a termination fee, these costs are
excluded from the table above.

(d) Consists of: (i) $63 million related to long-term contracts with third-parties consisting primarily of certain revenue cycle data
processing services for our acute care facilities; (ii) $208 million related to the future expected costs to be paid to a third-party
vendor in connection with the ongoing operation of an electronic health records application and purchase and implementation of
a revenue cycle and other applications for our acute care facilities; (iii) and $21 million for other software applications, and; (iv)
$75 million in healthcare infrastructure in Washington D.C. in connection with various agreements with the District of
Columbia, as discussed below.

(e) Reflects our future minimum operating lease payment obligations related to our operating lease agreements outstanding as of

December 31, 2021 as discussed in Note 7 to the Consolidated Financial Statements. Some of the lease agreements provide us
with the option to renew the lease and our future lease obligations would change if we exercised these renewal options. In
connection with these operating lease commitments, our consolidated balance sheet as of December 31, 2021 includes right of
use assets amounting to $367 million and aggregate operating lease liabilities of $369 million ($64 million included in current
liabilities and $305 million included in noncurrent liabilities).

(f) Consists of $156 million of estimated future payments related to our non-contributory, defined benefit pension plan (estimated
through 2080), as disclosed in Note 8 to the Consolidated Financial Statements, and $23 million of estimated future payments
related to other retirement plan liabilities ($20 million of liabilities recorded in other non-current liabilities as of December 31,
2021 in connection with these retirement plans).

(g) Consists of accrued and unpaid estimated claims expense incurred in connection with our commercial health insurers and self-

insured employee benefit plans.

As of December 31, 2021, the total net accrual for our professional and general liability claims was $349 million, of which $74

million is included in other current liabilities and $275 million is included in other non-current liabilities. We exclude the $349 million
for professional and general liability claims from the contractual obligations table because there are no significant contractual
obligations associated with these liabilities and because of the uncertainty of the dollar amounts to be ultimately paid as well as the
timing of such payments. Please see Self-Insured/Other Insurance Risks above for additional disclosure related to our professional and
general liability claims and reserves.

During 2020, we entered into a various agreements with the District of Columbia (the “District”) related to the development,

leasing and operation of an acute care hospital and certain other facilities/structures on land owned by the District (“District
Facilities”). The agreements contemplate that we will serve as manager for development and construction of the District Facilities on
behalf of the District, with a projected aggregate cost of approximately $375 million, approximately $8 million of which was incurred
as of December 31, 2021, which will be entirely funded by the District. Construction of the District Facilities is expected to be
completed by 2024. Upon completion of the District Facilities, we will lease the District Facilities for a nominal rental amount for a
period of 75 years and are obligated to operate the District Facilities during the lease term. We have certain lease termination rights in
connection with the District Facilities beginning on the tenth anniversary of the lease commencement date for various and decreasing
amounts as provided for in the agreements. Additionally, any time after the 10th anniversary of the lease term, we have a right to
purchase the District Facilities for a price equal to the greater of fair market value of the District Facilities or the amount necessary to
defease the bonds issued by the District to fund the construction of the District Facilities. The lease agreement also entitles the District
to participation rent should certain specified earnings before interest, taxes, depreciation and amortization thresholds be achieved by
the acute care hospital. Additionally, we have committed to expend no less than $75 million, over a projected 13-year period, in
healthcare infrastructure including expenditures related to the District Facilities as well as other healthcare related expenditures in
certain specified areas of Washington, D.C. This financial commitment is included in “Purchase and other obligations” as reflected on
the contractual obligations table above. Pursuant to the agreements, the District is entitled to certain termination fees and other
amounts as specified in the agreements in the event we, within certain specified periods of time, cease to operate the acute care
hospital or there is a transfer of control of us or our subsidiary operating the hospital.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

We manage our ratio of fixed and floating rate debt with the objective of achieving a mix that management believes is
appropriate. To manage this risk in a cost-effective manner, we, from time to time, enter into interest rate swap agreements in which
we agree to exchange various combinations of fixed and/or variable interest rates based on agreed upon notional amounts. We account
for our derivative and hedging activities using the Financial Accounting Standard Board’s guidance which requires all derivative
instruments, including certain derivative instruments embedded in other contracts, to be carried at fair value on the balance sheet. For
derivative transactions designated as hedges, we formally document all relationships between the hedging instrument and the related
hedged item, as well as its risk-management objective and strategy for undertaking each hedge transaction.

Derivative instruments designated in a hedge relationship to mitigate exposure to variability in expected future cash flows, or

other types of forecasted transactions, are considered cash flow hedges. Cash flow hedges are accounted for by recording the fair value
of the derivative instrument on the balance sheet as either an asset or liability, with a corresponding amount recorded in accumulated
other comprehensive income (“AOCI”) within shareholders’ equity. Amounts are reclassified from AOCI to the income statement in
the period or periods the hedged transaction affects earnings. From time to time, we use interest rate derivatives in our cash flow
hedge transactions. Such derivatives are designed to be highly effective in offsetting changes in the cash flows related to the hedged
liability.

For hedge transactions that do not qualify for the short-cut method, at the hedge’s inception and on a regular basis thereafter, a
formal assessment is performed to determine whether changes in the fair values or cash flows of the derivative instruments have been
highly effective in offsetting changes in cash flows of the hedged items and whether they are expected to be highly effective in the
future.

The fair value of interest rate swap agreements approximates the amount at which they could be settled, based on estimates

obtained from the counterparties. When applicable, we assess the effectiveness of our hedge instruments on a quarterly basis.
Although we do not anticipate nonperformance by our counterparties to interest rate swap agreements, the counterparties expose us to
credit risk in the event of nonperformance. We do not hold or issue derivative financial instruments for trading purposes.

During the years ended December 31, 2021 and 2020, we had no cash flow hedges outstanding. During 2019, we had nine
interest rate swaps outstanding, all of which expired on April 15, 2019, whereby we paid a fixed rate on a total notional amount of
$1.0 billion and received one-month LIBOR. The average fixed rate payable on these swaps was 1.31%.

When applicable, we measure our interest rate swaps at fair value on a recurring basis. The fair value of our interest rate swaps

is based on quotes from our counterparties. We consider those inputs to be “level 2” in the fair value hierarchy as outlined in the
authoritative guidance for disclosures in connection with derivative instruments and hedging activities.

The table below presents information about our long-term financial instruments that are sensitive to changes in interest rates as

of December 31, 2021. For debt obligations, the table presents principal cash flows and related weighted-average interest rates by
contractual maturity dates.

Maturity Date, Fiscal Year Ending December 31

(dollar amounts in thousands)

2022

2023

2024

2025

2026

Thereafter

Total

$ 5,909

6,523

7,012

6,274

2.4%

$ 700,168 $ 1,437,551
2.4 %

3.2%

$2,163,437

2.6%

$ 42,500

$ 53,125

85,000

1.4%

1,761,226
1.4 %

0
0.0%

$2,026,851

1.4%

Long-term debt:
Fixed rate:
Debt
Average interest rates

Variable rate:
Debt
Average interest rates

Interest rate swaps:
Notional amount
Average interest rates

As calculated based upon our variable rate debt outstanding as of December 31, 2021 that is subject to interest rate fluctuations,

each 1% change in interest rates would impact our pre-tax income by approximately $20 million.

ITEM 8.

Financial Statements and Supplementary Data

Our Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Changes in Equity,
Consolidated Statements of Cash Flows and Consolidated Statements of Comprehensive Income, together with the reports of
PricewaterhouseCoopers LLP, independent registered public accounting firm, are included elsewhere herein. Reference is made to the
“Index to Financial Statements and Financial Statement Schedule.”

ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A. Controls and Procedures.

As of December 31, 2021, under the supervision and with the participation of our management, including our Chief Executive

Officer (“CEO”) and Chief Financial Officer (“CFO”), we performed an evaluation of the effectiveness of our disclosure controls and
procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended. Based on this
evaluation, the CEO and CFO have concluded that our disclosure controls and procedures are effective to ensure that material
information is recorded, processed, summarized and reported by management on a timely basis in order to comply with our disclosure
obligations under the Securities Exchange Act of 1934, as amended, and the SEC rules thereunder.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting or in other factors during the fourth quarter of 2021

that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining an adequate system of internal control over our financial reporting.

In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley
Act, management has conducted an assessment, including testing, using the criteria on Internal Control—Integrated Framework
(2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our system of internal control
over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
and fair presentation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on its assessment, management has concluded that we maintained effective internal control over financial reporting as of
December 31, 2021, based on criteria in Internal Control—Integrated Framework (2013), issued by the COSO. The effectiveness of
the Company’s internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP,
an independent registered public accounting firm as stated in its report which appears herein.

ITEM 9B Other Information

None.

ITEM 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Other Information

Not applicable.

ITEM 10. Directors, Executive Officers and Corporate Governance

PART III

There is hereby incorporated by reference the information to appear under the captions “Election of Directors”, “Section 16(a)

Beneficial Ownership Reporting Compliance” and “Corporate Governance” in our Proxy Statement, to be filed with the Securities and
Exchange Commission within 120 days after December 31, 2021. See also “Executive Officers of the Registrant” appearing in Item 1
hereof.

ITEM 11. Executive Compensation

There is hereby incorporated by reference the information to appear under the caption “Executive Compensation” in our Proxy

Statement to be filed with the Securities and Exchange Commission within 120 days after December 31, 2021.

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

There is hereby incorporated by reference the information to appear under the caption “Security Ownership of Certain
Beneficial Owners and Management” and “Executive Compensation” in our Proxy Statement, to be filed with the Securities and
Exchange Commission within 120 days after December 31, 2021.

ITEM 13. Certain Relationships and Related Transactions, and Director Independence

There is hereby incorporated by reference the information to appear under the captions “Certain Relationships and Related
Transactions” and “Corporate Governance” in our Proxy Statement, to be filed with the Securities and Exchange Commission within
120 days after December 31, 2021.

ITEM 14. Principal Accountant Fees and Services.

There is hereby incorporated by reference the information to appear under the caption “Relationship with Independent Auditors”

in our Proxy Statement, to be filed with the Securities and Exchange Commission within 120 days after December 31, 2021.

PART IV

ITEM 15. Exhibits and Financial Statement Schedules

(a) Documents filed as part of this report:

(1) Financial Statements:

See “Index to Financial Statements and Financial Statement Schedule.”

(2) Financial Statement Schedules:

See “Index to Financial Statements and Financial Statement Schedule.”

(3) Exhibits:

No.
3.1

Description

Registrant’s Restated Certificate of Incorporation, and Amendments thereto, previously filed as Exhibit 3.1 to the

Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, are incorporated herein by reference
(P).

3.2

Bylaws of Registrant, as amended, previously filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for

the year ended December 31, 1987, is incorporated herein by reference (P).

3.3

Amendment to the Registrant’s Restated Certificate of Incorporation previously filed as Exhibit 3.1 to the Company’s

Current Report on Form 8-K dated July 3, 2001 is incorporated herein by reference.

4.1

Description of Securities of the Registrant previously filed as Exhibit 4.5 to the Company’s Annual Report on Form 10-

K for the year ended December 31, 2019, is incorporated herein by reference.

4.2

4.3

4.4

4.5

4.6

4.7

Indenture, dated as of September 21, 2020, by and among the Company, the Subsidiary Guarantors party thereto, MUFG
Union Bank, N.A., as trustee, and JPMorgan Chase Bank, N.A., as collateral agent., previously filed as Exhibit 4.1 to the
Company’s Current Report on Form 8-K dated September 21, 2020, is incorporated herein by reference.

Additional Authorized Representative Joinder Agreement, dated as of September 21, 2020, among the Company, the
Subsidiary Guarantors party thereto, JPMorgan Chase Bank, N.A., as collateral agent, the Authorized Representatives
specified therein and MUFG Union Bank, N.A., as trustee, as an Additional Authorized Representative, previously filed
as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 21, 2020, is incorporated herein by
reference.

Registration Rights Agreement, dated as of September 21, 2020, by and among the Company, the Subsidiary Guarantors
party thereto, and J.P. Morgan Securities LLC, BofA Securities, Inc. and Goldman Sachs & Co. LLC, as representatives
of the several Initial Purchasers, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated
September 21, 2020, is incorporated herein by reference.

Indenture, dated as of August 24, 2021, by and among the Company, the Subsidiary Guarantors party thereto, U.S. Bank
National Association, as Trustee, and JPMorgan Chase Bank, N.A., as collateral agent, previously filed as Exhibit 4.1 to
the Company’s Current Report on Form 8-K dated August 24, 2021, is incorporated herein by reference.

Additional Authorized Representative Joinder Agreement, dated as of August 24, 2021, among U.S. Bank National
Association, as Trustee and Additional Authorized Representative, the Company, the Subsidiary Guarantors party
thereto, and JPMorgan Chase Bank, N.A., as collateral agent and administrative agent, previously filed as Exhibit 4.2 to
the Company’s Current Report on Form 8-K dated August 24, 2021, is incorporated herein by reference.

Supplemental Indenture, dated as of August 24, 2021, among the Company, the Subsidiary Guarantors party thereto,
U.S. Bank National Association (as successor to MUFG Union Bank, N.A.), as trustee, and JPMorgan Chase Bank,
N.A., as collateral agent, to the indenture, dated as of September 21, 2020, governing the Existing 2030 Notes,
previously filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K dated August 24, 2021, is incorporated
herein by reference.

4.8

Registration Rights Agreement, dated as of August 24, 2021, by and among the Company, the Subsidiary Guarantors

party thereto, and J.P. Morgan Securities LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC and Truist Securities,
Inc., as representatives of the several Initial Purchasers, previously filed as Exhibit 10.1 to the Company’s Current

No.

Description

Report on Form 8-K dated August 24, 2021, is incorporated herein by reference.

10.1

10.2

10.3

10.4

Agreement, dated December 1, 2021, to renew Advisory Agreement dated as of December 24, 1986, and amended and
restated effective as of January 1, 2019 between Universal Health Realty Income Trust and UHS of Delaware, Inc.

Agreement, dated as of December 4, 2019, to renew Advisory Agreement, dated as of December 24, 1986, and amended
and restated effective as of January 1, 2019 between Universal Health Realty Income Trust and UHS of Delaware, Inc.,
previously filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018,
is incorporated herein by reference.

Form of Leases, including Form of Master Lease Document for Leases, between certain subsidiaries of the Company and
Universal Health Realty Income Trust, filed as Exhibit 10.3 to Amendment No. 3 of the Registration Statement on Form
S-11 and Form S-2 of Registrant and Universal Health Realty Income Trust (Registration No. 33-7872), is incorporated
herein by reference (P).

Corporate Guaranty of Obligations of Subsidiaries Pursuant to Leases and Contract of Acquisition, dated December 24,
1986, issued by the Company in favor of Universal Health Realty Income Trust, previously filed as Exhibit 10.5 to the
Company’s Current Report on Form 8-K dated December 24, 1986, is incorporated herein by reference (P).

10.5

Universal Health Services, Inc. Executive Retirement Income Plan dated January 1, 1993, previously filed as Exhibit

10.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, is incorporated herein by
reference.

10.6

Universal Health Services, Inc. Supplemental Executive Retirement Income Plan effective as of June 1, 2018, dated as of

June 18, 2018, previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2019, is incorporated herein by reference.

10.7

Asset Purchase Agreement dated as of February 6, 1996, among Amarillo Hospital District, UHS of Amarillo, Inc. and

Universal Health Services, Inc., previously filed as Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the
year ended December 31, 1995, is incorporated herein by reference (P).

10.8

Agreement of Limited Partnership of District Hospital Partners, L.P. (a District of Columbia limited partnership) by and
among UHS of D.C., Inc. and The George Washington University, previously filed as Exhibit 10.1 to the Company’s
Quarterly Report on Form 10-Q for the quarters ended March 30, 1997, and June 30, 1997, is incorporated herein by
reference (P).

10.9

Contribution Agreement between The George Washington University (a congressionally chartered institution in the

District of Columbia) and District Hospital Partners, L.P. (a District of Columbia limited partnership), previously filed as
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, is incorporated
herein by reference (P).

10.10*

Amended and Restated Universal Health Services, Inc. Supplemental Deferred Compensation Plan dated as of January 1,
2002, previously filed as Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the year ended December 31,
2002, is incorporated herein by reference.

10.11*

Universal Health Services, Inc. Employee Stock Purchase Plan, previously filed as Exhibit 4.1 to the Company’s

Registration Statement on Form S-8 (File No. 333-122188), dated January 21, 2005 is incorporated herein by reference.

10.12*

Universal Health Services, Inc. Third Amended and Restated 2005 Stock Incentive Plan as Amended, previously filed as

Exhibit 99.1 to the Company’s Registration Statement on Form S-8 (File No.333-218359), dated May 31, 2017, is
incorporated herein by reference.

10.13*

Form of Stock Option Agreement, previously filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K,
dated June 8, 2005, is incorporated herein by reference.

10.14*

Form of Stock Option Agreement for Non-Employee Directors, previously filed as Exhibit 10.2 to the Company’s

Current Report on Form 8-K, dated October 3, 2005, is incorporated herein by reference.

10.15

Amendment No. 1 to the Master Lease Document, between certain subsidiaries of Universal Health Services, Inc. and

Universal Health Realty Income Trust, dated April 24, 2006, previously filed as Exhibit 10.29 to the Company’s Annual

No.

Description

Report on Form 10-K for the year ended December 31, 2006, is incorporated herein by reference.

10.16*

Amended and Restated Universal Health Services, Inc. 2010 Employees’ Restricted Stock Purchase Plan, previously

filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2015, is incorporated herein
by reference.

10.17*

Universal Health Services, Inc. 2010 Executive Incentive Plan, previously filed as Exhibit 10.3 to the Company’s

Quarterly Report on Form 10-Q filed on August 7, 2015, is incorporated herein by reference.

10.18

Omnibus Amendment to Receivables Sale Agreements, dated as of October 27, 2010, previously filed as Exhibit 10.1 to

the Company’s Current Report on Form 8-K dated November 2, 2010, is incorporated herein by reference.

10.19

Amended and Restated Credit and Security Agreement, dated as of October 27, 2010, previously filed as Exhibit 10.2 to

the Company’s Current Report on Form 8-K dated November 2, 2010, is incorporated herein by reference.

10.20

10.21

10.22

Second Amendment to Amended and Restated Credit and Security Agreement, dated as of October 25, 2013, previously
filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 30, 2013, is incorporated herein by
reference.

Third Amendment to Amended and Restated Credit and Security Agreement, dated as of August 1, 2014, previously
filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 4, 2014, is incorporated herein by
reference.

Fourth Amendment to Amended and Restated Credit and Security Agreement, dated as of December 22, 2015,
previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 22, 2015, is
incorporated herein by reference.

10.23

Fifth Amendment to Amended and Restated Credit and Security Agreement, dated as of July 7, 2017, previously filed as

Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2017, is incorporated herein by
reference.

10.24

10.25

Sixth Amendment to Amended and Restated Credit and Security Agreement, dated as of April 26, 2018, previously filed
as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 27, 2018, is incorporated herein by reference.

Seventh Amendment to Amended and Restated Credit and Security Agreement, dated as of April 26, 2021, previously
filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated May 7, 2021, is incorporated herein by
reference.

10.26

Assignment and Assumption Agreement, dated as of October 27, 2010, previously filed as Exhibit 10.3 to the

Company’s Current Report on Form 8-K dated November 2, 2010, is incorporated herein by reference.

10.27

Credit Agreement, dated as of November 15, 2010, by and among Universal Health Services, Inc., JPMorgan Chase

Bank, N.A. and the various financial institutions as are or may become parties thereto, as Lenders, SunTrust Bank, The
Royal Bank of Scotland, Plc, Bank of Tokyo-Mitsubishi UFJ Trust Company and Credit Agricole Corporate and
Investment Bank, as co-documentation agents, Deutsche Bank Securities Inc. and Bank of America N.A. as co-
syndication agents, and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders and as collateral agent for
the secured parties, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 17,
2010, is incorporated herein by reference.

10.28

First Amendment, dated as of March 15, 2011, to the Credit Agreement, dated as of November 15, 2010, by and among
Universal Health Services, Inc., JPMorgan Chase Bank, N.A. and the various financial institutions as are or may become
parties thereto, as Lenders, certain banks as co-documentation agents, and as co-syndication agents, and JPMorgan
Chase Bank, N.A., as administrative agent for the Lenders and as collateral agent for the secured parties, previously filed
as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 15, 2011, is incorporated herein by
reference.

10.29

Credit Agreement, dated as of November 15, 2010 and amended and restated as of September 21, 2012, by and among
Universal Health Services, Inc. (the borrower), the several lenders from time to time parties thereto, Credit Agricole
Corporate and Investment Bank, Mizuho Corporate Bank LTD., Royal Bank of Canada and The Royal Bank of Scotland
PLC (as co-documentation agents), Bank of Tokyo-Mitsubishi UFJ Trust Company, Bank of America N.A. and

No.

Description

SunTrust Bank (as co-syndication agents), and JPMorgan Chase Bank, N.A. (as administrative agent), previously filed as
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 26, 2012, is incorporated herein by
reference.

10.30

Second Amendment, dated as of September 21, 2012, to the Credit Agreement, dated as of November 15, 2010 (as

amended from time to time), among Universal Health Services, Inc., a Delaware corporation, the several banks and other
financial institutions from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and the
other agents party thereto, previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated
September 26, 2012, is incorporated herein by reference.

10.31

Third Amendment, dated as of May 16, 2013, to the Credit Agreement, dated as of November 15, 2010, as amended

from time to time, among Universal Health Services, Inc., a Delaware corporation, the several banks and other financial
institutions from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other agents
party thereto, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 17, 2013, is
incorporated herein by reference.

10.32

Fourth Amendment, dated as of August 7, 2014, to the Credit Agreement, dated as of November 15, 2010, as previously

amended from time to time, by and among Universal Health Services, Inc., the several banks and other financial
institutions from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other agents
party thereto, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 12, 2014, is
incorporated herein by reference.

10.33

10.34

10.35

10.36

10.37

Credit Agreement, dated as of November 15, 2010 and amended and restated as of August 7, 2014, by and among
Universal Health Services, Inc., the several banks and other financial institutions from time to time parties thereto,
JPMorgan Chase Bank, N.A., as administrative agent and the other agents party thereto, previously filed as Exhibit 10.2
to the Company’s Current Report on Form 8-K dated August 12, 2014, is incorporated herein by reference.

Fifth Amendment to the Credit Agreement, dated as of November 15, 2010, as amended on March 15, 2011, September
21, 2012, May 16, 2013 and August 7, 2014, among the Company, as borrower, the several banks and other financial
institutions from time to time parties thereto, as lenders, JPMorgan Chase Bank, N.A., as administrative agent, and the
other agents party thereto, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 8,
2016, is incorporated herein by reference.

Sixth Amendment, dated as of October 23, 2018, to the Credit Agreement, dated as of November 15, 2010, as amended
on March 15, 2011, September 21, 2012, May 16, 2013, August 7, 2014 and June 7, 2016, among the Company, as
borrower, the several banks and other financial institutions from time to time parties thereto, as lenders, JPMorgan Chase
Bank, N.A., as administrative agent, and the other agents party thereto, previously filed as Exhibit 10.1 to the Company’s
Current Report on Form 8-K dated October 24, 2018, is incorporated herein by reference.

Increased Facility Activation Notice – Incremental Term Loans, dated as of October 31, 2018, to the Credit Agreement,
dated as of November 15, 2010, as amended on March 15, 2011, September 21, 2012, May 16, 2013, August 7, 2014,
June 7, 2016 and October 23, 2018, among the Company, as borrower, the several banks and other financial institutions
from time to time parties thereto, as lenders, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents
party thereto, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 2, 2018, is
incorporated herein by reference.

Seventh Amendment, dated as of August 24, 2021, to the Credit Agreement, dated as of November 15, 2010, as amended
on March 15, 2011, September 21, 2012, May 16, 2013, August 7, 2014, June 7, 2016 and October 23, 2018, among the
Company, as borrower, the several banks and other financial institutions from time to time parties thereto, as lenders,
JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto, previously filed as Exhibit 10.2
to the Company’s Current Report on Form 8-K dated August 24, 2021, is incorporated herein by reference.

10.38

Eighth Amendment, dated as of September 10, 2021, to the Credit Agreement, dated as of November 15, 2010, as

amended on March 15, 2011, September 21, 2012, May 16, 2013, August 7, 2014, June 7, 2016, October 23, 2018 and
August 24, 2021, among the Company, as borrower, the several banks and other financial institutions from time to time
parties thereto, as lenders, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto,
previously filed as Exhibit 10.3 to the Company’s Quaterly Report on Form 10-Q dated November 8, 2021, is
incorporated herein by reference.

10.39*

Form of Supplemental Life Insurance Plan and Agreement Part A: Alan B. Miller 1998 Dual Life Insurance Trust

No.

Description

(effective December 9, 2010, by and between Universal Health Services, Inc., a Delaware corporation (the “Company”),
and Anthony Pantaleoni as Trustee), previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K
dated December 10, 2010, is incorporated herein by reference.

10.40*

Form of Supplemental Life Insurance Plan and Agreement Part B: Alan B. Miller 2002 Trust (effective December 9,

2010, by and between Universal Health Services, Inc., a Delaware corporation (the “Company”), and Anthony
Pantaleoni as Trustee), previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated
December 10, 2010, is incorporated herein by reference.

10.41*

Universal Health Services, Inc. Termination, Assignment and Release Agreement (effective December 9, 2010, by and

between Universal Health Services, Inc., a Delaware corporation (the “Company”), Anthony Pantaleoni as Trustee of the
Alan B. Miller 1998 Dual Life Insurance Trust, and Alan B. Miller, Executive), previously filed as Exhibit 10.3 to the
Company’s Current Report on Form 8-K dated December 10, 2010, is incorporated herein by reference.

10.42*

Universal Health Services, Inc. Termination, Assignment and Release Agreement (effective December 9, 2010, by and

between Universal Health Services, Inc., a Delaware corporation (the “Company”), Anthony Pantaleoni as Trustee of the
Alan B. Miller 2002 Trust, and Alan B. Miller, Executive), previously filed as Exhibit 10.4 to the Company’s Current
Report on Form 8-K dated December 10, 2010, is incorporated herein by reference.

10.43

Collateral Agreement, dated as of August 7, 2014, among Universal Health Services, Inc., the subsidiary guarantors

party thereto, MUFG Union Bank, N.A., as 2014 Trustee, The Bank of New York Mellon Trust Company, N.A., as 2006
Trustee, and JPMorgan Chase Bank, N.A., as collateral agent, previously filed as Exhibit 10.4 to the Company’s Current
Report on Form 8-K dated August 12, 2014, is incorporated herein by reference.

10.44

Universal Health Services, Inc. 2020 Omnibus Stock and Incentive Plan, previously filed as Exhibit 99.1 to the

Company’s Registration Statement on Form S-8 (File No. 333-238880) dated June 2, 2020, is incorporated herein by
reference.

10.45

Form of Stock Option Award Agreement under the Universal Health Services, Inc. 2020 Omnibus Stock and Incentive
Plan, previously filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2020, is
incorporated herein by reference.

10.46

Form of Restricted Stock Award Agreement under the Universal Health Services, Inc. 2020 Omnibus Stock and

Incentive Plan, previously filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on August 7,
2020, is incorporated herein by reference.

10.47

10.48

10.49

10.50

Form of Restricted Stock Unit Award Agreement under the Universal Health Services, Inc. 2020 Omnibus Stock and
Incentive Plan, previously filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed on August 7,
2020, is incorporated herein by reference.

Settlement Agreement among: (i) the United States of America, acting through the United States Department of Justice
and on behalf of the Office of Inspector General (OIG-HHS) of the Department of Health and Human Services (HHS);
the Defense Health Agency (DHA), acting on behalf of the TRICARE Program; the Office of Personnel Management
(OPM), which administers the Federal Employees Health Benefits Program (FEHBP); and the United States Department
of Veteran Affairs (VA) (collectively, the United States); (ii) Universal Health Services, Inc. (“UHS, Inc.”) and UHS of
Delaware, Inc. (“UHS of Delaware, Inc.”), acting on behalf of the entities listed on Exhibits A and B, (collectively the
“Defendants” or “UHS”); and (iii) various individuals (collectively, the “Relators”), previously filed as Exhibit 10.1 to
the Company’s Current Report on Form 8-K dated July 10, 2020, is incorporated herein by reference.

Form of Settlement Agreement between various states and Universal Health Services, Inc. and UHS of Delaware, Inc.,
acting on behalf of the entities listed on Exhibits A and B, previously filed as Exhibit 10.2 to the Company’s Current
Report on Form 8-K dated July 10, 2020, is incorporated herein by reference.

Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human
Services and Universal Health Services, Inc. and UHS of Delaware, Inc., previously filed as Exhibit 10.3 to the
Company’s Current Report on Form 8-K dated July 10, 2020, is incorporated herein by reference.

10.51

Stipulation and Agreement of Settlement, dated as of September 15, 2021, by and among (a) lead plaintiffs in the

stockholder derivative action captioned In re Universal Health Services, Inc., Derivative Litigation, Case No. 2:17-cv-
02187-JHS (including each of its member cases, the “Federal Action”), pending in the United States District Court for

No.

Description

the Eastern District of Pennsylvania; (b) plaintiffs in the stockholder derivative litigation captioned Delaware County
Employees’ Retirement Fund and the Chester County Employees’ Retirement System v. Alan B. Miller, et al., C.A. No.
2017-0475-JTL (the “Delaware Action”), brought in the Court of Chancery of the State of Delaware; (c) Dr. Eli Inzlicht-
Sprei; (d) defendants in the Federal Action; (e) defendants in the Delaware Action; and (f) nominal defendant in the
Federal Action and Delaware Action: Universal Health Services, Inc., by and through their respective undersigned
counsel, previously filed as Exhibit 99.3 to the Company’s Current Report on Form 8-K dated October 25, 2021, is
incorporated herein by reference.

10.52*

Employment Agreement between Universal Health Services, Inc. and Marc D. Miller dated as of December 23, 2020,

previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 23, 2020, is
incorporated herein by reference.

10.53*

Employment Agreement between Universal Health Services, Inc. and Alan B. Miller dated as of December 23, 2020,

previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 23, 2020, is
incorporated herein by reference.

10.54

Master Lease Document between certain subsidiaries of Universal Health Services, Inc. and Universal Health Realty

Income Trust, dated December 31, 2021.

Statement regarding computation of per share earnings is set forth in Note 1 of the Notes to the Consolidated Financial

Statements.

Subsidiaries of Registrant.

23.1

Consent of Independent Registered Public Accounting Firm-PricewaterhouseCoopers LLP.

31.1

Certification from the Company’s Chief Executive Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities

Exchange Act of 1934.

31.2

Certification from the Company’s Chief Financial Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities

Exchange Act of 1934.

32.1

Certification from the Company’s Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification from the Company’s Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document)

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Management contract or compensatory plan or arrangement.

Exhibits, other than those incorporated by reference, have been included in copies of this Annual Report filed with the Securities and
Exchange Commission. Stockholders of the Company will be provided with copies of those exhibits upon written request to the
Company.

ITEM 16. Form 10-K Summary

None.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

UNIVERSAL HEALTH SERVICES, INC.

By:

/s/ MARC D. MILLER
Marc D. Miller
Chief Executive Officer

February 24, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signatures

/s/ ALAN B. MILLER
Alan B. Miller

/s/ MARC D. MILLER
Marc D. Miller

/s/ LAWRENCE S. GIBBS
Lawrence S. Gibbs

/s/ EILEEN C. MCDONNELL
Eileen C. McDonnell

/s/ WARREN J. NIMETZ
Warren J. Nimetz

/s/ MARIA SINGER
Maria Singer

/s/ ELLIOTT J. SUSSMAN M.D.
Elliot J. Sussman M.D.

/s/ STEVE FILTON
Steve Filton

Title

Date

Executive Chairman of the Board

February 24, 2022

Director, President and Chief Executive Officer (Principal
Executive Officer)

February 24, 2022

Director

Executive Vice President, Chief Financial Officer and
Secretary

(Principal Financial and Accounting Officer)

February 24, 2022

UNIVERSAL HEALTH SERVICES, INC.

INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE

Consolidated Financial Statements:

Report of Independent Registered Public Accounting Firm (PCAOB ID: 238)
Consolidated Statements of Income for December 31, 2021, 2020, and 2019
Consolidated Statements of Comprehensive Income for December 31, 2021, 2020, and 2019
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Changes in Equity for December 31, 2021, 2010 and 2019
Consolidated Statements of Cash Flows for December 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
Supplemental Financial Statement Schedule II: Valuation and Qualifying Accounts as of and for December 31, 2021,

2020, and 2019

87
89
90
91
92
95
96

128

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Universal Health Services, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Universal Health Services, Inc. and its subsidiaries (the
“Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income, of comprehensive income, of
changes in equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes and
financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We
also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.

Valuation of accounts receivable

As described in Notes 1, 10 and 12 to the consolidated financial statements, the Company reports net patient service revenue at the
estimated net realizable amounts from patients and third-party payers and others for services rendered. The Company has agreements
with third-party payers that provide for payments to the Company at amounts different from established rates. Payment arrangements
include rates per discharge, reimbursed costs, discounted charges and per diem payments. Estimates of contractual allowances, which
represent explicit price concessions, under managed care plans are based upon the payment terms specified in the related contractual
agreements. Management estimates Medicare and Medicaid revenues using the latest available financial information, patient
utilization data, government provided data and in accordance with applicable Medicare and Medicaid payment rules and regulations.
Management monitors the historical collection rates, as well as changes in applicable laws, rules and regulations and contract terms, to
assure that provisions are made using the most accurate information available. In addition to explicit price concessions, management
estimates revenue adjustments for implicit price concessions based on general factors such as payer mix, the aging of the receivables
and historical collection experience. Management routinely reviews accounts receivable balances in conjunction with these factors and
other economic conditions which might ultimately affect the collectability of the patient accounts and make adjustments to the
allowances as warranted. As of December 31, 2021, the net accounts receivable balance was $1.7 billion.

The principal considerations for our determination that performing procedures relating to the valuation of accounts receivable is a
critical audit matter are the significant judgment by management in estimating net accounts receivable, specifically as it relates to
developing the estimate for explicit and implicit price concessions, which in turn led to significant auditor judgment, subjectivity and
effort in performing procedures and evaluating audit evidence obtained related to the estimation of price concessions.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the valuation of
accounts receivable, including controls over management’s valuation approach, assumptions and data used to estimate the explicit and
implicit price concessions. These procedures also included, among others, (i) testing management’s process for developing the
estimate for price concessions, as well as the relevance of the historical billing and collection data as an input to the valuation
approach; (ii) testing the accuracy of a sample of revenue transactions and a sample of cash collections from the historical billing data
and historical collection data used in management’s estimation of price concessions; (iii) evaluating the historical accuracy of
management’s process for developing the estimate of the amount which will ultimately be collected by comparing actual cash
collections to the previously recorded net accounts receivable balance; and (iv) developing an independent expectation of the net
accounts receivable balance. Developing an independent expectation involved calculating the percentage of cash collections as
compared to the recorded net accounts receivable balance as of the end of the prior year, applying those calculated percentages to the
recorded accounts receivable balance as of December 31, 2021, and comparing the calculated balance to management’s estimate of the
net accounts receivable balance.

/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 24, 2022
We have served as the Company’s auditor since 2007.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

Net revenues
Operating charges:

Salaries, wages and benefits
Other operating expenses
Supplies expense
Depreciation and amortization
Lease and rental expense

Income from operations
Interest expense, net
Other (income) expense, net
Income before income taxes
Provision for income taxes
Net income
Less: Net (loss) income attributable to noncontrolling interests
Net income attributable to UHS
Basic earnings per share attributable to UHS
Diluted earnings per share attributable to UHS
Weighted average number of common shares—basic
Add: Other share equivalents
Weighted average number of common shares and equivalents—diluted

2021

Year Ended December 31,
2020
(in thousands, except per share data)

2019

12,642,117

11,558,897

11,378,259

6,163,944
3,035,869
1,427,134
533,213
118,863
11,279,023
1,363,094
83,672
(13,891)
1,293,313
305,681
987,632
(3,958)
991,590
11.99
11.82
82,519
1,173
83,692

$
$
$

5,613,097
2,672,762
1,288,132
510,493
116,059
10,200,543
1,358,354
106,285
(14)
1,252,083
299,293
952,790
8,837
943,953
11.06
10.99
85,061
526
85,587

$
$
$

5,588,893
2,723,911
1,251,346
490,392
107,809
10,162,351
1,215,908
162,733
(13,162)
1,066,337
238,794
827,543
12,689
814,854
9.16
9.13
88,762
278
89,040

$
$
$

The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income
Other comprehensive income (loss):

Unrealized derivative losses on cash flow hedges
Minimum pension liability
Foreign currency translation adjustment

Other comprehensive income before tax
Income tax expense related to items of other
comprehensive income
Total other comprehensive income (loss), net of tax
Comprehensive income
Less: Comprehensive income attributable to noncontrolling
interests
Comprehensive income attributable to UHS

2021

987,632

Year Ended December 31,
2020
(Dollar amounts in thousands)
$

952,790

0
1,427
(20,743)
(19,316)

(1,487)
(17,829)
969,803

0
4,428
13,619
18,047

1,820
16,227
969,017

(3,958)
973,761

8,837
960,180

2019

827,543

(3,925)
8,503
27,886
32,464

4,813
27,651
855,194

12,689
842,505

The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

Assets

December 31,

2021
2020
(Dollar amounts in thousands)

Current assets:

Cash and cash equivalents
Accounts receivable, net
Supplies
Other current assets

Total current assets
Property and Equipment

Land
Buildings and improvements
Equipment
Property under finance lease

Accumulated depreciation

Construction-in-progress

Other assets:
Goodwill
Deferred income taxes
Right of use assets-operating leases
Deferred charges
Other

Total Assets

Current liabilities:

Liabilities and Stockholders’ Equity

Current maturities of long-term debt
Accounts payable
Accrued liabilities

Compensation and related benefits
Interest
Taxes other than income
Operating lease liabilities
Medicare accelerated payments and deferred CARES Act and other grants
Other
Current federal and state income taxes

Total current liabilities

Other noncurrent liabilities
Medicare accelerated payments and deferred CARES Act noncurrent
Operating lease liabilities noncurrent
Long-term debt
Deferred income taxes
Commitments and contingencies (Note 8)
Redeemable noncontrolling interest
Equity:

Class A Common Stock, voting, $.01 par value; authorized 12,000,000 shares: issued
and outstanding 6,577,100 shares in 2021 and 6,577,100 shares in 2020
Class B Common Stock, limited voting, $.01 par value; authorized 150,000,000
shares: issued and outstanding 69,834,320 shares in 2021 and 77,805,530 shares in 2020
Class C Common Stock, voting, $.01 par value; authorized 1,200,000 shares: issued
and outstanding 661,688 shares in 2021 and 661,688 shares in 2020
Class D Common Stock, limited voting, $.01 par value; authorized 5,000,000 shares:
issued and outstanding 17,956 shares in 2021 and 18,251 shares in 2020
Cumulative dividends
Retained earnings
Accumulated other comprehensive income

Universal Health Services, Inc. common stockholders’ equity
Noncontrolling interest
Total Equity
Total Liabilities and Stockholders’ Equity

115,301
1,746,635
206,839
194,781
2,263,556

732,717
6,509,629
2,759,934
102,940
10,105,220
(4,896,427 )
5,208,793
665,482
5,874,275

3,962,624
45,707
367,477
6,525
573,379
4,955,712

13,093,543

48,409
658,900

466,353
14,408
160,793
64,484
6
560,036
10,720
1,984,109
464,759
0
304,624
4,141,879
0

1,224,490
1,728,928
190,417
138,034
3,281,869

665,000
6,030,183
2,607,692
75,611
9,378,486
(4,512,764)
4,865,722
507,402
5,373,124

3,882,715
22,689
336,513
4,985
574,984
4,821,886
13,476,879

331,998
570,523

410,165
9,458
152,227
59,796
376,151
526,298
44,423
2,481,039
458,549
322,617
278,303
3,524,253
5,582

5,119

4,569

698

0
(545,487 )
6,604,089
30,291
6,089,664
103,389
6,193,053

13,093,543

778

0
(479,503)
6,747,678
48,120
6,317,146
84,821
6,401,967
13,476,879

The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Years Ended December 31, 2021, 2020 and 2019
(in thousands)

Redeemable
Noncontrolling Class A Class B Class C Class D Cumulative Retained Comprehensive Stockholders' Noncontrolling

Accumulated
Other

UHS
Common

Balance, January 1, 2019
Common Stock

Issued/(converted) including tax benefits from
exercise of stock options
Repurchased
Restricted share-based compensation expense

Dividends paid
Stock option expense
Distributions to noncontrolling interests
Other
Comprehensive income:

Net income to UHS / noncontrolling interests
Foreign currency translation adjustments (net of
income tax effect of $3,693)
Unrealized derivative gains on cash flow hedges (net
of income tax effect of $928)
Minimum pension liability (net of income tax effect of
$2,048)

Subtotal - comprehensive income
Balance, December 31, 2019

Interest

4,292

Common Common Common Common Dividends Earnings
0 $ (409,156 ) $ 5,793,262

841 $

66 $

7 $

Income (Loss)
4,242
$

Equity
5,389,262

Interest

76,531

Total
$ 5,465,793

—
—
—
—
—
(500)
—

541

—

—
—
—
—
—
—
—

—

10
(57 )
—
—
—
—
—

—

—
—
—
—
—
—
—

—

—
—
—
—
—
—
—

—

—
—
—
(53,003 )
—
—
—

10,930
(753,870)
8,222
—
60,106
—
—

—

814,854

—

—
—
—
—
—
—
—

—

10,940
(753,927)
8,222
(53,003)
60,106
—
—

—
—
—
—
—
(15,359)
1,446

10,940
(753,927 )
8,222
(53,003 )
60,106
(15,359 )
1,446

814,854

12,148

827,002

24,193

(2,997)

—

24,193

(2,997 )

—
541
4,333

—
—
66 $

—
—
794 $

—
—
7 $

—
—
—
814,854
— $ (462,159 ) $ 5,933,504

—
—

6,455
27,651
31,893

6,455
842,505
5,504,105

—
12,148
74,766

6,455
854,653
$ 5,578,871

The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)
For the Years Ended December 31, 2021, 2020 and 2019
(in thousands)

Redeemable
Noncontrolling Class A Class B Class C Class D Cumulative Retained Comprehensive Stockholders' Noncontrolling

Accumulated
Other

UHS
Common

Interest

Common Common Common Common Dividends Earnings

Income (Loss)

Equity

Interest

Total

Common Stock

Issued/(converted) including tax benefits from
exercise of stock options
Repurchased
Restricted share-based compensation expense

Dividends paid
Stock option expense
Distributions to noncontrolling interests
Purchase of ownership interests by minority members
Other

Comprehensive income:
Net income to UHS / noncontrolling interests
Foreign currency translation adjustments (net of
income tax effect of $749)
Minimum pension liability (net of income tax effect of
$1,071)

Subtotal - comprehensive income
Balance, December 31, 2020

—
—
—
—
—
(500)
—
—

736

—

—
—
—
—
—
—
—
—

—

4
(20 )
—
—
—
—
—
—

—

—
—
—
—
—
—
—
—

—

—
—
—
—
—
—
—
—

—

—
—
—
(17,344 )
—
—
—
—

12,754
(206,699)
9,505
—
54,661
—
—
—

—

943,953

—

—
736
4,569

—
—
66 $

—
—
778 $

—
—
7 $

—
—
—
943,953
— $ (479,503 ) $ 6,747,678

—
—

—
—
—
—
—
—
—
—

—

12,870

3,357
16,227
48,120

12,758
(206,719)
9,505
(17,344)
54,661
—
—
—

943,953

12,870

—
—
—
—
—
(19,305)
17,959
3,300

12,758
(206,719 )
9,505
(17,344 )
54,661
(19,305 )
17,959
3,300

8,101

952,054

—

12,870

3,357
960,180
6,317,146

—
8,101
84,821

3,357
968,281
$ 6,401,967

The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)
For the Years Ended December 31, 2021, 2020 and 2019
(in thousands)

Accumulated

UHS

Redeemable
Noncontrolling Class A Class B Class C Class D Cumulative Retained Comprehensive Stockholders' Noncontrolling

Common

Other

Interest

Common Common Common Common Dividends Earnings Income (Loss)

Equity

Interest

Total

Common Stock

Issued/(converted) including tax benefits from
exercise of stock options
Repurchased
Restricted share-based compensation expense

Dividends paid
Stock option expense
Distributions to noncontrolling interests
Purchase of ownership interests by minority members
Other
Comprehensive income:

Net income to UHS / noncontrolling interests
Foreign currency translation adjustments (net of
income tax effect of $1,829)
Minimum pension liability (net of income tax effect of
$342)

Subtotal - comprehensive income
Balance, December 31, 2021

—
—
—
—
—
(202)
—
—

752

—

—
—
—
—
—
—
—
—

—

5
(85 )
—
—
—
—
—
—

—

—
—
—
—
—
—
—
—

—

—
—
—
—
—
—
—
—

—

—
13,369
— (1,220,790)
12,936
—
—
(65,984 )
59,306
—
—
—
—
—
—
—

—

991,590

—
—
—
—
—
—
—
—

—

13,374
(1,220,875)
12,936
(65,984)
59,306
—
—
—

—
13,374
— (1,220,875 )
12,936
—
(65,984 )
—
59,306
—
(6,878 )
(6,878)
13,909
13,909
16,247
16,247

991,590

(4,710)

986,880

—

(18,914)

—

(18,914 )

—
752
5,119

—
—
66 $

—
—
698 $

—
—
7 $

—
—
—
—
— $ (545,487 ) $ 6,604,089 $

—
991,590

1,085
(17,829)
30,291

1,085
973,761
6,089,664

—
(4,710)
103,389

1,085
969,051
$ 6,193,053

The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash Flows from Operating Activities:

Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation & amortization
Loss (Gain) on sales of assets and businesses
Stock-based compensation expense
Costs related to extinguishment of debt
Provision for asset impairment
Changes in assets & liabilities, net of effects from acquisitions and
dispositions:
Accounts receivable
Accrued interest
Accrued and deferred income taxes
Other working capital accounts
Medicare accelerated payments and deferred CARES Act and other grants
Other assets and deferred charges
Other
Accrued insurance expense, net of commercial premiums paid
Payments made in settlement of self-insurance claims

Net cash provided by operating activities

Cash Flows from Investing Activities:
Property and equipment additions
Acquisition of businesses and property
Inflows (outflows) from foreign exchange contracts that hedge our net U.K.
investment
Proceeds received from sales of assets and businesses
Costs incurred for purchase and implementation of information technology
applications
Decrease (Increase) in capital reserves of commercial insurance subsidiary
Investment in, and advances to, joint ventures and other

Net cash used in investing activities

Cash Flows from Financing Activities:

Repayments of long-term debt
Additional borrowings
Financing costs
Repurchase of common shares
Dividends paid
Issuance of common stock
Profit distributions to noncontrolling interests
Purchase of ownership interests by minority member

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents
(Decrease) increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
Cash, cash equivalents and restricted cash, end of period
Supplemental Disclosures of Cash Flow Information:

Interest paid
Income taxes paid, net of refunds
Noncash purchases of property and equipment

2021

Year Ended December 31,
2020
(Amounts in thousands)

2019

987,632

952,790

827,543

533,213
(5,170)
73,686
16,831
14,391

(8,873)
4,950
(54,030)
46,526
(698,762)
(39,337)
(82,075)
186,215
(91,502)
883,695

(855,659)
(105,415)

1,357
25,425

19,726
100
0
(914,466)

(3,037,868)
3,254,974
(18,770)
(1,220,875)
(65,896)
13,372
(7,080)
13,193
(1,068,950)
(499)
(1,100,220)
1,279,154
178,934

75,607
362,978
167,234

$
$
$

510,493
1,957
65,837
1,365
0

(145,901)
(10,028)
9,593
124,545
698,768
(4,555)
109,167
159,223
(113,085)
2,360,169

(731,307)
(52,009)

(21,740)
8,168

(2,902)
(100)
(2,672)
(802,562)

(962,567)
801,599
(10,300)
(206,719)
(17,344)
12,318
(19,805)
17,959
(384,859)
739
1,173,487
105,667
1,279,154

112,598
286,247
74,854

$
$
$

490,392
(7,540)
69,431
0
97,631

(42,056)
209
(25,194)
39,664
0
(27,205)
7,703
105,672
(97,781)
1,438,469

(634,095)
(8,005)

(19,763)
9,450

(21,418)
0
(14,579)
(688,410)

(57,142)
39,220
0
(770,504)
(53,003)
10,806
(15,859)
1,446
(845,036)
959
(94,018)
199,685
105,667

157,406
260,622
63,514

$
$
$

The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1) BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Services provided by our hospitals, all of which are operated by subsidiaries of ours, include general and specialty surgery,
internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy
services and/or behavioral health services. We, through our subsidiaries, provide capital resources as well as a variety of management
services to our facilities, including central purchasing, information services, finance and control systems, facilities planning, physician
recruitment services, administrative personnel management, marketing and public relations.

The more significant accounting policies follow:

Principles of Consolidation: The consolidated financial statements include the accounts of our majority-owned subsidiaries

and partnerships controlled by us or our subsidiaries as the managing general partner. All intercompany accounts and transactions
have been eliminated.

Revenue Recognition

We report net patient service revenue at the estimated net realizable amounts from patients and third-party payers and others for

services rendered. We have agreements with third-party payers that provide for payments to us at amounts different from our
established rates. Payment arrangements include rates per discharge, reimbursed costs, discounted charges and per diem payments.
Estimates of contractual allowances under managed care plans, which represent explicit price concessions, are based upon the
payment terms specified in the related contractual agreements. We closely monitor our historical collection rates, as well as changes in
applicable laws, rules and regulations and contract terms, to assure that provisions are made using the most accurate information
available. However, due to the complexities involved in these estimations, actual payments from payers may be different from the
amounts we estimate and record.

See Note 10-Revenue Recognition, for additional disclosure related to our revenues including a disaggregation of our

consolidated net revenues by major source for each of the periods presented herein.

We estimate our Medicare and Medicaid revenues using the latest available financial information, patient utilization data,

Historically, a significant portion of the patients treated throughout our portfolio of acute care hospitals are uninsured patients

A portion of the accounts receivable at our acute care facilities are comprised of Medicaid accounts that are pending approval
from third-party payers but we also have smaller amounts due from other miscellaneous payers such as county indigent programs in
certain states. Our patient registration process includes an interview of the patient or the patient’s responsible party at the time of
registration. At that time, an insurance eligibility determination is made and an insurance plan code is assigned. There are various pre-
established insurance profiles in our patient accounting system which determine the expected insurance reimbursement for each
patient based on the insurance plan code assigned and the services rendered. Certain patients may be classified as Medicaid pending at
registration based upon a screening evaluation if we are unable to definitively determine if they are currently Medicaid eligible. When
a patient is registered as Medicaid eligible or Medicaid pending, our patient accounting system records net revenues for services
provided to that patient based upon the established Medicaid reimbursement rates, subject to the ultimate disposition of the patient’s
Medicaid eligibility. When the patient’s ultimate eligibility is determined, reclassifications may occur which impacts net revenues in
future periods. Although the patient’s ultimate eligibility determination may result in adjustments to net revenues, these adjustments
do not have a material impact on our results of operations in 2021, 2020 or 2019 since our facilities make estimates at each financial
reporting period to adjust revenue based on historical collections.

We also provide discounts to uninsured patients (included in “uninsured discounts” amounts below) who do not qualify for

Uncompensated care (charity care and uninsured discounts):

The following table shows the amounts recorded at our acute care hospitals for charity care and uninsured discounts, based on

charges at established rates, for the years ended December 31, 2021, 2020 and 2019:

Charity care
Uninsured discounts
Total uncompensated care

2021
Amount %

(dollar amounts in thousands)
2020

2019

Amount %

$ 661,965
1,336,319
$1,998,284

33% $ 622,668
67% 1,578,470
100% $2,201,138

28 % $ 672,326
72 % 1,511,738
100 % $ 2,184,064

31%
69%
100%

The estimated cost of providing uncompensated care:

The estimated cost of providing uncompensated care, as reflected below, were based on a calculation which multiplied the

Estimated cost of providing charity care
Estimated cost of providing uninsured discounts related care
Estimated cost of providing uncompensated care

72,095
145,538
217,633

73,690 $
186,804
260,494 $

77,886
175,128
253,014

(amounts in thousands)
2020

2019

2021

Concentration of Revenues: Our six acute care hospitals in the Las Vegas, Nevada market contributed, on a combined basis,

16% in 2021, 15% in 2020 and 16% in 2019 of our consolidated net revenues.

Cash, Cash Equivalents and Restricted Cash: We consider all highly liquid investments purchased with maturities of three

months or less to be cash equivalents.

Cash, cash equivalents, and restricted cash as reported in the consolidated statements of cash flows are presented separately on

our consolidated balance sheets as follow:

Cash and cash equivalents
Restricted cash (a)
Total cash, cash equivalents and restricted cash

(amounts in thousands)
2020

$ 1,224,490 $
54,664
$ 1,279,154 $

2021
115,301
63,633
178,934

2019

61,268
44,399
105,667

(a) Restricted cash is included in other assets on the accompanying consolidated balance sheet and consists of statutorily

required capital reserves related to our commercial insurance subsidiary.

The fair value of our restricted cash was computed based upon quotes received from financial institutions. We consider these

to be “level 1” in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with financial
securities.

Property and Equipment: Property and equipment are stated at cost. Expenditures for renewals and improvements are charged

to the property accounts. Replacements, maintenance and repairs which do not improve or extend the life of the respective asset are
expensed as incurred. We remove the cost and the related accumulated depreciation from the accounts for assets sold or retired and the
resulting gains or losses are included in the results of operations. Construction-in-progress includes both construction projects and
equipment not yet placed into service.

See Provision for Asset Impairment-Foundations Recovery Network, in Other Assets and Intangible Assets below, for additional

disclosure related to a provision for asset impairment recorded during 2019 to reduce the carrying value of real property assets of
certain Foundations Recovery Network, L.L.C. facilities.

While in progress, we capitalized interest on major construction projects and the development and implementation of

information technology applications amounting to $4.4 million during 2021, $4.3 million during 2020 and $3.4 million during 2019.

Depreciation is provided on the straight-line method over the estimated useful lives of buildings and improvements (twenty to

forty years) and equipment (three to fifteen years). Depreciation expense was $501.6 million during 2021, $478.8 million during 2020
and $455.6 million during 2019.

Long-Lived Assets: We review our long-lived assets, including intangible assets, for impairment whenever events or

circumstances indicate that the carrying value of these assets may not be recoverable. The assessment of possible impairment is based
on our ability to recover the carrying value of our asset based on our estimate of its undiscounted future cash flows. If the analysis
indicates that the carrying value is not recoverable from future cash flows, the asset is written down to its estimated fair value and an
impairment loss is recognized. Fair values are determined based on estimated future cash flows using appropriate discount rates.

Goodwill: Goodwill is reviewed for impairment at the reporting unit level on an annual basis or sooner if the indicators of
impairment arise. Our judgments regarding the existence of impairment indicators are based on market conditions and operational
performance of each reporting unit. We have designated October 1st as our annual impairment assessment date and performed
quantitative impairment assessments as of October 1, 2021 which indicated no impairment of goodwill. There were also no goodwill
impairments during 2020 or 2019. Future changes in the estimates used to conduct the impairment reviews, including profitability and
market value projections, could indicate impairment in future periods potentially resulting in a write-off of a portion or all of our
goodwill.

Changes in the carrying amount of goodwill for the two years ended December 31, 2021 were as follows (in thousands):

Balance, January 1, 2020
Goodwill acquired during the period
Goodwill divested during the period
Adjustments to goodwill (a)
Balance, December 31, 2020
Goodwill acquired during the period
Goodwill divested during the period
Adjustments to goodwill (b)
Balance, December 31, 2021

Acute Care
Services

Behavioral
Health
Services

0
0
14,349

Total
Consolidated
448,415 $ 3,421,345 $ 3,869,760
127
0
12,828
3,435,694 3,882,715
55,406
0
24,503
515,936 $ 3,446,688 $ 3,962,624

127
0
(1,521)
447,021
55,406
0
13,509

0
0
10,994

(a)
(b)

The changes in the Behavioral Health Services’ goodwill consists primarily of foreign currency translation adjustments.
Adjustments to goodwill during 2021 consist of the following: $13.5 million in Acute Care Services consists primarily of
a measurement period adjustment to the preliminary purchase price allocation related to a 2020 acquisition; and the
$11.0 million in Behavioral Health Services consists of $16.3 million recorded in connection with a third party minority
ownership interest in a majority owned joint venture that constructed and owns a recently opened behavioral health
facility, partially offset by a $5.3 million decrease related to foreign currency translation adjustments.

Other Assets and Intangible Assets: Other assets consist primarily of amounts related to: (i) intangible assets acquired in

connection with our acquisitions of Cambian Group, PLC’s adult services’ division during 2015, Ascend Health Corporation during
2012 and Psychiatric Solutions, Inc. during 2010; (ii) prepaid fees for various software and other applications used by our hospitals;

(iii) costs incurred in connection with the purchase and implementation of an electronic health records application for each of our
acute care facilities; (iv) statutorily required capital reserves related to our commercial insurance subsidiary ($82 million and $73
million as of December 31, 2021 and 2020, respectively); (v) deposits; (vi) investments in various businesses, including Universal
Health Realty Income Trust ($9 million and $5 million as of as of December 31, 2021 and 2020, respectively) and Premier, Inc. ($92
million and $78 million as of December 31, 2021 and 2020, respectively); (vii) the invested assets related to a deferred compensation
plan that is held by an independent trustee in a rabbi-trust and that has a related payable included in other noncurrent liabilities, and;
(viii) other miscellaneous assets.

Intangible assets are reviewed for impairment on an annual basis or more often if indicators of impairment arise. Our judgments
regarding the existence of impairment indicators are based on market conditions and operational performance of each asset. We have
designated October 1st as our annual impairment assessment date and performed impairment assessments as of October 1, 2021. In
connection with the discontinuation of a certain module of a new clinical/financial information technology application under
development, our financial results for the year ended December 31, 2021 include a pre-tax provision for asset impairment of
approximately $14 million to write-off the applicable portion of the capitalized costs incurred and is included in other operating
expenses on the accompanying consolidated statement of income. There was no impairment recorded during 2020. During 2019 we
recorded provisions for asset impairments related to Foundations Recovery Network, L.L.C., as discussed below.

Provision for Asset Impairment-Foundations Recovery Network:

Our financial results for the year ended December 31, 2019 include a pre-tax provisions for asset impairment of approximately
$98 million recorded in connection with Foundations Recovery Network, L.L.C. (“Foundations”), which was acquired by us in 2015.
This provision for asset impairment includes: (i) a $75 million impairment provision to write-off the carrying value of the
Foundations’ tradename intangible asset, and; (ii) a $23 million impairment provision to reduce the carrying value of real property
assets of certain Foundations’ facilities.

The provision for asset impairment recorded during 2019, which is included in other operating expenses in the accompanying
consolidated statements of income, was recorded after evaluation of the estimated fair value of the Foundations’ tradename as well as
certain related real property assets. The provision for asset impairment was impacted by the following: (i) decisions made by
management during 2019 to cancel the opening of future planned de novo facilities; (ii) reductions in projected future patient volumes,
revenues and cash flows resulting from continued operating trends and financial results experienced by existing facilities that
significantly lagged expectations, and; (iii) competitive pressures experienced in certain markets that were deemed to be permanent.

The following table shows the amounts recorded as net intangible assets for the years ended December 31, 2021 and 2020:

Medicare licenses
Certificates of need
Contract relationships and other (net of $54,134 and $52,804
of accumulated amortization for 2021 and 2020, respectively)
Net Intangible Assets

(amounts in thousands)

2021

2020

57,226 $
8,239

15,576
81,041 $

57,226
8,253

17,107
82,586

Supplies: Supplies, which consist primarily of medical supplies, are stated at the lower of cost (first-in, first-out basis) or

market.

Self-Insured/Other Insurance Risks: We provide for self-insured risks, primarily general and professional liability claims and

workers’ compensation claims. Our estimated liability for self-insured professional and general liability claims is based on a number
of factors including, among other things, the number of asserted claims and reported incidents, estimates of losses for these claims
based on recent and historical settlement amounts, estimate of incurred but not reported claims based on historical experience, and
estimates of amounts recoverable under our commercial insurance policies. All relevant information, including our own historical
experience is used in estimating the expected amount of claims. While we continuously monitor these factors, our ultimate liability for
professional and general liability claims could change materially from our current estimates due to inherent uncertainties involved in
making this estimate. Our estimated self-insured reserves are reviewed and changed, if necessary, at each reporting date and changes
are recognized currently as additional expense or as a reduction of expense. See Note 8 - Commitments and Contingencies for
discussion of adjustments to our prior year reserves for claims related to our self-insured general and professional liability and
workers’ compensation liability.

In addition, we also: (i) own commercial health insurers headquartered in Nevada and Puerto Rico, and; (ii) maintain self-

insured employee benefits programs for employee healthcare and dental claims. The ultimate costs related to these
programs/operations include expenses for claims incurred and paid in addition to an accrual for the estimated expenses incurred in
connection with claims incurred but not yet reported. Given our significant insurance-related exposure, there can be no assurance that
a sharp increase in the number and/or severity of claims asserted against us will not have a material adverse effect on our future results
of operations.

Income Taxes: Deferred tax assets and liabilities are recognized for the amount of taxes payable or deductible in future years

as a result of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. We
believe that future income will enable us to realize our deferred tax assets net of recorded valuation allowances relating to state net
operating loss carry-forwards.

We operate in multiple jurisdictions with varying tax laws. We are subject to audits by any of these taxing authorities. Our tax

returns have been examined by the Internal Revenue Service (“IRS”) through the year ended December 31, 2006. We believe that
adequate accruals have been provided for federal, foreign and state taxes. See Note 6 - Income Taxes, for additional disclosure.

Other Noncurrent Liabilities: Other noncurrent liabilities include the long-term portion of our professional and general
liability, workers’ compensation reserves, pension and deferred compensation liabilities, payment deferral of the employer’s share of
Social Security taxes as provided for by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and liabilities
incurred in connection with split-dollar life insurance agreements on the lives of our chief executive officer and his wife.

Redeemable Noncontrolling Interests and Noncontrolling Interest: As of December 31, 2021, outside owners held
noncontrolling, minority ownership interests of: (i) 20% in an acute care facility located in Washington, D.C.; (ii) approximately 9%
in an acute care facility located in Texas; (iii) 20%, 30%, 20%, 25% and 48% in five behavioral health care facilities located in
Pennsylvania, Ohio, Washington, Missouri and Iowa, respectively, and; (iv) approximately 5% in an acute care facility located in
Nevada. The noncontrolling interest and redeemable noncontrolling interest balances of $103 million and $5 million, respectively, as
of December 31, 2021, consist primarily of the third-party ownership interests in these hospitals.

In connection with the two behavioral health care facilities located in Pennsylvania and Ohio, the minority ownership interests

of which are reflected as redeemable noncontrolling interests on our Consolidated Balance Sheet, the outside owners have “put
options” to put their entire ownership interest to us at any time. If exercised, the put option requires us to purchase the minority
member’s interest at fair market value. Accordingly, the amounts recorded as redeemable noncontrolling interests on our Consolidated
Balance Sheet reflects the estimated fair market value of these ownership interests.

Accumulated Other Comprehensive Income: The accumulated other comprehensive income (“AOCI”) component of
stockholders’ equity includes: net unrealized gains and losses on effective cash flow hedges, foreign currency translation adjustments
and the net minimum pension liability of a non-contributory defined benefit pension plan which covers employees at one of our
subsidiaries. See Note 11 - Pension Plan for additional disclosure regarding the defined benefit pension plan.

The amounts recognized in AOCI for the two years ended December 31, 2021 were as follows (in thousands):

Balance, January 1, 2020, net of income tax
2020 activity:
Pretax amount
Income tax effect
Change, net of income tax
Balance, January 1, 2021, net of income tax
2021 activity:
Pretax amount
Income tax effect
Change, net of income tax
Balance, December 31, 2021, net of income tax

Net Unrealized
Gains (Losses) on
Effective Cash
Flow Hedges

Foreign
Currency
Translation
Adjustment

(17) $

39,568 $

Minimum
Pension
Liability

Total
AOCI
(7,658) $ 31,893

0
0
0
(17)

0
0
0
(17) $

13,619
(749 )
12,870
52,438

4,428
(1,071)
3,357
(4,301)

18,047
(1,820)
16,227
48,120

(20,743 )
1,829
(18,914 )
33,524 $

(19,316)
1,427
1,487
(342)
1,085
(17,829)
(3,216) $ 30,291

Accounting for Derivative Financial Investments and Hedging Activities and Foreign Currency Forward Exchange

Contracts: We manage our ratio of fixed and floating rate debt with the objective of achieving a mix that management believes is
appropriate. To manage this risk in a cost-effective manner, we, from time to time, enter into interest rate swap agreements in which
we agree to exchange various combinations of fixed and/or variable interest rates based on agreed upon notional amounts. We account
for our derivative and hedging activities using the Financial Accounting Standard Board’s (“FASB”) guidance which requires all
derivative instruments, including certain derivative instruments embedded in other contracts, to be carried at fair value on the balance
sheet. For derivative transactions designated as hedges, we formally document all relationships between the hedging instrument and
the related hedged item, as well as its risk-management objective and strategy for undertaking each hedge transaction.

Derivative instruments designated in a hedge relationship to mitigate exposure to variability in expected future cash flows, or

other types of forecasted transactions, are considered cash flow hedges. Cash flow hedges are accounted for by recording the fair value

100

of the derivative instrument on the balance sheet as either an asset or liability, with a corresponding amount recorded in accumulated
other comprehensive income (“AOCI”) within shareholders’ equity. Amounts are reclassified from AOCI to the income statement in
the period or periods the hedged transaction affects earnings. From time to time, we use interest rate derivatives in our cash flow
hedge transactions. Such derivatives are designed to be highly effective in offsetting changes in the cash flows related to the hedged
liability.

In August 2017, the FASB issued new guidance on hedge accounting (ASU 2017-12) that is intended to more closely align

hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase
transparency as to the scope and results of hedging programs. The new guidance amends the presentation and disclosure requirements,
and changes how companies assess effectiveness. We adopted this guidance as of January 1, 2019 and applied to all existing hedges as
of the adoption date. As of December 31, 2021 we have no cash flow hedges.

We use forward exchange contracts to hedge our net investment in foreign operations against movements in exchange rates. The

effective portion of the unrealized gains or losses on these contracts is recorded in foreign currency translation adjustment within
accumulated other comprehensive income and remains there until either the sale or liquidation of the subsidiary. In conjunction with
the January 1, 2019 adoption of ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities”, we reclassified our
presentation of the net cash inflows or outflows, which were received or paid in connection with foreign exchange contracts that hedge
our net investment in foreign operations against movements in exchange rates, to investing cash flows on the consolidated statements
of cash flows.

Stock-Based Compensation: We have a number of stock-based employee compensation plans. Pursuant to the FASB’s

guidance, we expense the grant-date fair value of stock options and other equity-based compensation pursuant to the straight-line
method over the stated vesting period of the award using the Black-Scholes option-pricing model.
The expense associated with share-based compensation arrangements is a non-cash charge. In the Consolidated Statements of Cash
Flows, share-based compensation expense is an adjustment to reconcile net income to cash provided by operating activities.

Earnings per Share: Basic earnings per share are based on the weighted average number of common shares outstanding
during the year. Diluted earnings per share are based on the weighted average number of common shares outstanding during the year
adjusted to give effect to common stock equivalents.

The following table sets forth the computation of basic and diluted earnings per share, for the periods indicated:

Basic and diluted:
Net Income
Less: Net (income) loss attributable to noncontrolling
interest
Less: Net income attributable to unvested restricted share
grants
Net income attributable to UHS—basic and diluted
Basic earnings per share attributable to UHS:
Weighted average number of common shares—basic
Total basic earnings per share
Diluted earnings per share attributable to UHS:
Weighted average number of common shares

Net effect of dilutive stock options and grants based
on the treasury stock method

Weighted average number of common shares and
equivalents—diluted

Total diluted earnings per share

Twelve Months Ended December 31,

2021

2020

2019

987,632

952,790 $

827,543

3,958

(8,837 )

(12,689)

(2,059)
989,531

82,519
11.99

(2,981 )
940,972 $

(2,028)
812,826

85,061
11.06 $

88,762
9.16

82,519

85,061

88,762

1,173

526

278

83,692
11.82

85,587
10.99 $

89,040
9.13

The “Net effect of dilutive stock options and grants based on the treasury stock method”, for all years presented above, excludes

certain outstanding stock options applicable to each year since the effect would have been anti-dilutive. The excluded weighted-
average stock options totaled approximately 4.2 million during 2021, 6.4 million during 2020 and 5.5 million during 2019.

101

Fair Value of Financial Instruments: The fair values of our debt and investments are based on quoted market prices. The fair

values of other long-term debt, including capital lease obligations, are estimated by discounting cash flows using period-end interest
rates and market conditions for instruments with similar maturities and credit quality. The carrying amounts reported in the balance
sheet for cash, accounts receivable, accounts payable, and short-term borrowings approximates their fair values due to the short-term
nature of these instruments. Accordingly, these items have been excluded from the fair value disclosures included elsewhere in these
notes to consolidated financial statements.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Mergers and Acquisitions: The acquisition method of accounting for business combinations requires that the assets acquired

and liabilities assumed be recorded at the date of acquisition at their respective fair values with limited exceptions. Fair value is
defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Any
excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill.
Transaction costs and costs to restructure the acquired company are expensed as incurred. The fair value of intangible assets, including
Medicare licenses, certificates of need, tradenames and certain contracts, is based on significant judgments made by our management,
and accordingly, for significant items we typically obtain assistance from third party valuation specialists.

GPO Agreement/Minority Ownership Interest: During 2013, we entered into a new group purchasing organization

agreement (“GPO”) with Premier, Inc. (“Premier), a healthcare performance improvement alliance, and acquired a minority interest in
the GPO for a nominal amount. During the fourth quarter of 2013, in connection with the completion of an initial public offering of
the stock of Premier, we received cash proceeds for the sale of a portion of our ownership interest in the GPO, which were recorded as
deferred income, on a pro rata basis, as a reduction to our supplies expense over the initial expected life of the GPO agreement. Also
in connection with this GPO agreement, we received shares of restricted stock in Premier which vest ratably over a seven-year period
(2014 through 2020), contingent upon our continued participation and minority ownership interest in the GPO. We recognized the fair
value of this restricted stock, as a reduction to our supplies expense, in our consolidated statements of income, on a pro rata basis, over
the vesting period. During the third quarter of 2020, we entered into an agreement with Premier pursuant to the terms of which, among
other things, our ownership interest in Premier was converted into shares of Class A Common Stock of Premier. We have elected to
retain a portion of the previously vested shares of Premier, the value of which is included in other assets on our consolidated balance
sheet. Based upon the closing price of Premier’s stock on each respective date, the market value of our shares of Premier was $92
million and $78 million as of December 31, 2021 and 2020, respectively. The change in market value of these shares is recorded as an
unrealized gain and included in “Other (income) expense, net” on our consolidated statements of income. Additionally, Premier paid
cash dividends of $1.7 million and $848,000 as of December 31, 2021 and 2020, respectively, which are included in “Other (income)
expense, net” in our condensed consolidated statements of income.

Provider Taxes: We incur health-care related taxes (“Provider Taxes”) imposed by states in the form of a licensing fee,
assessment or other mandatory payment which are related to: (i) healthcare items or services; (ii) the provision of, or the authority to
provide, the health care items or services, or; (iii) the payment for the health care items or services. Such Provider Taxes are subject to
various federal regulations that limit the scope and amount of the taxes that can be levied by states in order to secure federal matching
funds as part of their respective state Medicaid programs. We derive a related Medicaid reimbursement benefit from assessed Provider
Taxes in the form of Medicaid claims based payment increases and/or lump sum Medicaid supplemental payments.

Under these programs, including the impact of the Texas Uncompensated Care and Upper Payment Limit program, the Texas

Delivery System Reform Incentive program, and various other state programs, we earned revenues (before Provider Taxes) of
approximately $641 million during 2021, $488 million during 2020 and $419 million during 2019. These revenues were offset by
Provider Taxes of approximately $211 million during 2021, $185 million during 2020 and $194 million during 2019, which are
recorded in other operating expenses on the Consolidated Statements of Income as included herein. The aggregate net benefit from
these programs was $430 million during 2021, $303 million during 2020 and $225 million during 2019. The aggregate net benefit
pursuant to these programs is earned from multiple states and therefore no particular state’s portion is individually material to our
consolidated financial statements. In addition, under various disproportionate share hospital payment programs and the Nevada state
plan amendment program, we earned revenues of $74 million in 2021, $73 million in 2020 and $78 million in 2019.

102

CARES Act and Other Governmental Grants and Medicare Accelerated Payments: During 2021, we received

approximately $189 million of additional funds from the federal government in connection with the CARES Act, which we returned
during the year utilizing a portion of our cash and cash equivalents held on deposit. Therefore, there was no impact on our earnings
during 2021 in connection with receipt of those funds.

Also during 2021, we made an early repayment of $695 million of funds received during 2020 pursuant to the Medicare
Accelerated and Advance Payment Program (“MAAPP”). These funds, which were required to be repaid to the government beginning
in the second quarter of 2021 through the third quarter of 2022, were returned to the government utilizing a portion of our cash and
cash equivalents held on deposit.

As of December 31, 2020, we received an aggregate of $1.112 billion of funds consisting of: (i) $417 million received pursuant
to various governmental stimulus programs, most notably the Public Health and Social Services Emergency Fund (the “PHSSEF”) as
provided for by the CARES Act, of which approximately $413 million were recorded as net revenues during 2020 and approximately
$4 million remained in the Medicare accelerated payments and deferred CARES Act and other grants liability account in our
consolidated balance sheet, and; (ii) $695 million of MAAPP funds, which as discussed above, were repaid early to the government
during 2021. As of December 31, 2020, $372 million of the MAAPP funds were included in the current liabilities in our consolidated
balance sheet and $323 million were included noncurrent liabilities. There was no impact on our earnings during 2021 or 2020 in
connection with receipt of the MAAPP funds.

Recent Accounting Standards: In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate

Reform on Financial Reporting.” The ASU is intended to provide temporary optional expedients and exceptions to the US GAAP
guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market
transition from LIBOR and other interbank offered rates to alternative reference rates. This guidance was effective beginning on
March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is
currently evaluating the impact this guidance may have on our consolidated financial statements.

From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by the
Company as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. The Company
has assessed the recently issued guidance that is not yet effective and, unless otherwise indicated above, believes the new guidance
will not have a material impact on our results of operations, cash flows or financial position.

Foreign Currency Translation: Assets and liabilities of our U.K. subsidiaries are denominated in pound sterling and translated

into U.S. dollars at: (i) the rates of exchange at the balance sheet date, and; (ii) average rates of exchange prevailing during the year
for revenues and expenses. The currency translation adjustments are reported as a component of accumulated other comprehensive
income. See Note 3 - Financial Instruments, Foreign Currency Forward Exchange Contracts for additional disclosure.

2) ACQUISITIONS AND DIVESTITURES

Year ended December 31, 2021:

2021 Acquisitions of Assets and Businesses:

During 2021, we spent $105 million on the acquisition of businesses and property, consisting primarily of a micro acute care

hospital located in Las Vegas, Nevada, and a physician practice management company located in California.

2021 Divestiture of Assets and Businesses:
During 2021, we received $25 million from the sale of assets and businesses.

Year ended December 31, 2020:

2020 Acquisitions of Assets and Businesses:

During 2020, we spent $52 million on the acquisition of businesses and property, consisting primarily of the real estate assets of an

acute care hospital located in Las Vegas, Nevada.

2020 Divestiture of Assets and Businesses:

During 2020, we received $8 million from the sale of assets and businesses.

103

Year ended December 31, 2019:

2019 Acquisitions of Assets and Businesses:

During 2019, we spent $8 million to acquire various businesses and properties.

2019 Divestiture of Assets:

During 2019, we received $9 million from the sales of various assets.

3) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

Cash Flow Hedges:

When applicable, we measure our interest rate swaps at fair value on a recurring basis. The fair value of our interest rate swaps

Foreign Currency Forward Exchange Contracts:

We use forward exchange contracts to hedge our net investment in foreign operations against movements in exchange rates. The

effective portion of the unrealized gains or losses on these contracts is recorded in foreign currency translation adjustment within
accumulated other comprehensive income and remains there until either the sale or liquidation of the subsidiary. In connection with
these forward exchange contracts, we recorded net cash inflows of approximately $1 million during 2021, net cash outflows of
approximately $22 million during 2020 and net cash inflows of approximately $20 million during 2019.

Derivatives Hedging Relationships:

The following table presents the effects of our interest rate swap agreements and our foreign currency foreign exchange

contracts on our results of operations for the three years ended December 31 (in thousands):

Cash Flow Hedge relationships
Interest rate swap agreements (a)

Net Investment Hedge relationships
Foreign currency foreign exchange contracts

Gain/(Loss) recognized in AOCI

December 31,

2021

2020

2019

(7,272)

0 $

(3,925)

(22,097 ) $

(18,328)

(a) The amount of gain reclassified out of AOCI into interest expense, net was $3.4 million during 2019.

No other gains or losses were recognized in income related to derivatives in Subtopic 815-20.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the

principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the
measurement date. The following fair value hierarchy classifies the inputs to valuation techniques used to measure fair value into one
of three levels:

 Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
 Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These

included quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or
liabilities in markets that are not active.

 Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

104

The following tables present the assets and liabilities recorded at fair value on a recurring basis:

(in thousands)
Assets:
Money market mutual funds
Certificates of deposit
Equity securities
Deferred compensation assets
Foreign currency exchange contracts

Liabilities:
Deferred compensation liability

(in thousands)
Assets:
Term Deposits
Money market mutual funds
Money market mutual funds
Certificates of deposit
Equity securities
Deferred compensation assets
Foreign currency exchange contracts

Liabilities:
Deferred compensation liability

Balance at
December 31,
2021

Balance Sheet

Basis of Fair Value Measurement

Location

Level 1

Level 2

Level 3

79,900 Other assets
2,300 Other assets
91,919 Other assets
45,759 Other assets
1,357 Other current assets

79,900

91,919
45,759

221,235

$ 217,578 $

2,300

1,357
3,657

$
$

45,759 Other noncurrent liabilities $
$
45,759

45,759
45,759

Balance at
December 31,
2020

Balance Sheet

Basis of Fair Value Measurement

Location

Level 1

Level 2

Level 3

540,000 Cash and cash equivalents
37,100 Cash and cash equivalents
70,995 Other assets
2,300 Other assets
78,367 Other assets
42,044 Other assets
9,987 Other current assets

780,793

$ 540,000

37,100
70,995

78,367
42,044

2,300

9,987
$ 228,506 $ 552,287

$
$

42,044 Other noncurrent liabilities $
$
42,044

42,044
42,044

The fair value of our money market mutual funds, certificates of deposit and equity securities with a readily determinable fair

value are computed based upon quoted market prices in an active market. The fair value of deferred compensation assets and the
offsetting liability are computed based on market prices in an active market held in a rabbi trust. The fair value of our interest rate
swaps are based on quotes from our counter parties. The fair value of our foreign currency exchange contracts is valued using quoted
forward exchange rates and spot rates at the reporting date

As of December 31, 2020, in addition to the $577 million reflected above in cash and cash equivalents, we have approximately

$581 million of other cash accounts that earn interest at variable rates ranging from .20% to .25%.

105

4) LONG-TERM DEBT

A summary of long-term debt follows:

December 31,

2021

2020

(amounts in thousands)

Long-term debt:

Notes and Mortgages payable (including obligations under finance leases of $79,331 in
2021 and $52,905 in 2020) and term loans with varying maturities through 2099;
weighted average interest rates of 5.6% in 2021 and 6.8% in 2020 (see Note 7
regarding finance leases)
Tranche A term loan
Revolving credit facility
2.65% Senior Secured Notes due 2030, net of unamortized discount of $1,968 in 2021
and $2,193 in 2020
1.65% Senior Secured Notes due 2026, net of unamortized discount of $813 in 2021
2.65% Senior Secured Notes due 2032, net of unamortized discount of $1,254 in 2021
Term Loan B
Accounts receivable securitization program
5.00% Senior Secured Notes due 2026
Total debt before unamortized financing costs
Less-Unamortized financing costs
Total debt after unamortized financing costs
Less-Amounts due within one year
Long-term debt

185,027 $

1,689,375
342,600

798,032
699,187
498,746
—
—
—
4,212,967
(22,679 )
4,190,288
(48,409 )
4,141,879 $

61,638
1,900,000
—

797,806
—
—
490,000
225,000
400,000
3,874,444
(18,193)
3,856,251
(331,998)
3,524,253

Credit Facilities and Outstanding Debt Securities

On August 24, 2021, we entered into a seventh amendment to our credit agreement dated as of November 15, 2010, as amended

The seventh amendment to the Credit Agreement, among other things, provided for the following:

repayment of approximately $488 million of outstanding borrowings and termination of the previous tranche B term loan
facility.

Pursuant to the terms of the seventh amendment, the tranche A term loan, which had $1.689 billion of borrowings outstanding as

106

with affiliates, dividends and stock repurchases; and requires compliance with financial covenants including maximum leverage. We
were in compliance with all required covenants as of December 31, 2021 and December 31, 2020.