Universal Health Services Annual Report 2023

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FY2023 Annual Report · Universal Health Services

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UNIVERSAL HEALTH SERVICES, INC.

LE ADING
WITH PU RPOSE

2023

ANNUAL REPORT

OUR MISSION

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

TO PROVIDE SUPERIOR QUALITY
HEALTHCARE SERVICES THAT:

PATIENTS recommend to family and 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 patients
and employees to our investors.

UHS is a registered trademark of UHS of Delaware, Inc.,
a subsidiary of Universal Health Services, Inc. Universal
Health Services, Inc. is a holding company that operates
through its subsidiaries. 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, Inc.’s subsidiaries. Further,
the terms “we,” “us,” “our” or “the company” in such
context similarly refer to the operations of the
subsidiaries of Universal Health Services, Inc.
Any reference to employment at UHS or
employees of UHS refers to employment
with one of the subsidiaries of Universal
Health Services, Inc.

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 .

OUR IMPACT
2023 BY THE NUMBERS

3.6 MILLION

PATIENTS SERVED

$14.3 BILLION

REVENUES

1,900

PROVIDERS
OF PHYSICIAN
SERVICES

96,700 22,100

NURSES

EMPLOYEES,
GLOBALLY

$743 MILLION

INVESTMENT IN EQUIPMENT, FACILITY EXPANSIONS
AND RENOVATIONS

ACUTE
CARE

BEHAVIORAL
HEALTH

322,200 inpatient
admissions

730,000 total
patients served

1.6 million
patient days

5.4 million
patient days (U.S.)

1.6 million ER visits

34,000 deliveries

33 facilities
offering at least 1
Patriot Support Program

7 Accountable
Care Organizations
(ACOs)

168 inpatient beds
added in new and
existing facilities
(U.S.)

INDEX

Board of Directors/
Corporate Officers
and Letter to Our
Shareholders
4-5

Financial Highlights/
Map of Facilities
6-7

Acute Care Division
8-15

Behavioral Health Division
16-23

Sustainability
24-25

Form 10K
10K: 1-128

Corporate Information
Inside Back Cover

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

BOARD OF DIRECTORS

Left to Right (Standing): Nina Chen2,6; Marc D. Miller3,4; Alan B. Miller3*,4*; Eileen C. McDonnell1*,2*,3,5,7; Elliot J. Sussman, MD1,2,5*,6*
(Seated): Maria Singer1,4,5,6; Warren J. Nimetz3,4

Committees of the Board: 1Audit Committee, 2Compensation Committee, 3Executive Committee, 4Finance Committee, 5Nominating and
Governance Committee, 6Quality and Compliance Committee, 7Lead Director, *Committee Chairperson

Learn more: uhs.com/about-uhs/leadership

CORPORATE OFFICERS

Alan B. Miller
Founder and Executive Chairman
of the Board

Marc D. Miller
President and Chief Executive Officer

Steve G. Filton
Executive Vice President
and Chief Financial Officer

Matthew J. Peterson
Executive Vice President
and President
Behavioral Health Division

Edward Sim
Executive Vice President
and President
Acute Care Division

Charles F. Boyle
Senior Vice President
and Controller

Jim Clark
Senior Vice President, Finance
Acute Care Division

Thomas Day
Senior Vice President, Finance
Behavioral Health Division

Geraldine Johnson Geckle
Senior Vice President
Human Resources

Matthew D. Klein
Senior Vice President
and General Counsel

Michael S. Nelson
Senior Vice President
Strategic Services

Victor J. Radina
Senior Vice President
Corporate Development

Cheryl K. Ramagano
Senior Vice President
and Treasurer

UHS of Delaware, Inc. is the administrative services company for, and a wholly owned subsidiary of, Universal Health Services, Inc.
All of our “Corporate Officers” listed above are employees of UHS of Delaware, Inc.

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 .

LETTER TO OUR SHAREHOLDERS

Dear Valued Shareholders,

This year marks the 45th anniversary of our company.
Growing steadily since our inception into a highly
regarded Fortune 500 corporation, UHS has remained
true to our core strategy which includes building or
acquiring high-quality hospitals in rapidly growing
markets, investing in the people and equipment
needed to allow each facility to thrive and becoming
a leading healthcare provider in each community
we serve.

Today, UHS is one of the nation’s largest and most
respected providers of hospital and healthcare services,
with more than 400 acute care hospitals, behavioral
health facilities and ambulatory centers across the
United States, Puerto Rico and the United Kingdom.

While 2023 was on multiple accounts a challenging year
across the healthcare industry, we are proud of our many
achievements, realizing that the important work that we
are doing fulfills an integral need within the communities
we serve. Through our network of subsidiaries, we served
nearly 3.6 million patients in 2023.

During the year, UHS generated net revenues of
$14.3 billion, an increase of 7% over the prior year. On a
same facility basis during 2023 as compared to 2022,
net revenue growth of 8% was experienced within
both the Acute Care and Behavioral Health operating
segments. Adjusted admissions, over the same period,
grew 8% and 3% across the Acute Care and Behavioral
Health Divisions, respectively.

We continued to manage the impacts of market
challenges, including labor shortages and increasing
inflation; however, we recognize that while our revenues
have improved, expenses have continued to grow as
well. We are currently focused on operational initiatives to
increase efficiencies, standardize approaches, optimize
and right-size where prudent.

We continue to make significant capital expenditures
and are well positioned to succeed. Our growth
and development through new facility construction,
expansions and renovations and strategic partnerships
position us for a new era of success. Three de novo
Acute Care hospitals are currently under construction –
in Nevada, Florida and Washington, D.C. Further, we are
building two new Behavioral Health facilities and have
multiple growth initiatives – inpatient and outpatient – in
the pipeline. We continue to prioritize the integration of
ambulatory care access points along the care continuum
in existing markets, including having opened five new
freestanding emergency departments (FEDs) in 2023,
with others in strategic markets on the near horizon.

We are proud of the reputation we have earned as a
leader in the healthcare industry. Among our accolades
and rankings this year:

• Fortune magazine’s World’s Most Admired Companies –
UHS was named for the 14th consecutive year; ranking
#2 in the Healthcare: Medical Facilities category

• Fortune 500 list – UHS has been ranked for 20 years,

currently #311

• Forbes Global 2000 – #434 among American companies

• The American Opportunity Index – #45 in total and #2
within the Medical Care Facilities category. The Index
scores how well America’s largest companies drive
economic mobility and positive career outcomes for
their employees — actions that can help fuel business
performance.

Further, our facilities are regularly 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.

Most importantly, we continue to stay true to our
Mission and values. Our focus remains on positioning
employees and facilities to provide the highest quality
and most efficient care to our millions of current and
future patients. We are intent on maintaining our
reputation as an industry leader and preferred provider,
employer and partner. Looking ahead, we expect this will
yield profitable growth in attractive markets, business
segments and care delivery venues.

On behalf of UHS leadership, we are grateful to patients
for entrusting their care to UHS facilities; to employees
at those facilities for all their hard work; to our business
partners for their collaboration; and to our shareholders
for your continued support and investment.

Sincerely,

Alan B. Miller
Founder and Executive Chairman
of the Board

Marc D. Miller
President and
Chief Executive Officer

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

FINANCIAL HIGHLIGHTS

Year Ended December 31

2023

2022

Net revenues

$14,281,976,000

$13,399,370,000

Adjusted net income
attributable to UHS (1)

$739,365,000

$730,244,000

Adjusted diluted earnings per share

attributable to UHS (1)

$10.54

$9.88

Year Ended December 31

2023

2022

Patient days

Admissions

Average number of licensed beds

7,913,001

794,525

30,915

7,799,735

770,782

31,182

Percentage
Change

-1%

2021

$12,642,117,000

$991,677,000

$11.82

2021

7,731,419

762,302

30,698

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

2023

2022

2021

2020

Amount

Per
Diluted Share

Amount

Per
Diluted Share

Amount

Per
Diluted Share

Amount

Per
Diluted Share

Net income attributable to UHS

$717,795

$10.23

$675,609

$9.14

$991,590

$11.82

$943,953

$10.99

Other combined adjustments

21,570

0.31

54,635 0.74

87 7–66

10,756

Adjusted net income attributable to UHS

$739,365

$10.54

$730,244

$9.88

$991,677

$11.82

$954,709

0.13

$11.12

The “Other combined adjustments” neutralize the effect of items in each year that are nonrecurring or non-operational in nature including items such as: unrealized gains/losses resulting from changes
in the market value of shares of certain equity securities, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales
of assets and businesses, impairment 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. 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
8
2
4
1
$

9
9
3
3
1
$

2
4
6
2
1
$

9
5
5
,
1
1
$

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

Hospital patient days
(in thousands)

2
8
.
1
1
$

2
1
.
1
1
$

4
5
0
1
$

8
8
9
$

3
1
9
7

0
0
8
7

1
3
7
1 7
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

Acute Care Hospitals

Ambulatory Surgery Centers

Behavioral Health Facilities

Freestanding Emergency Departments

Universal Health Services, Inc.

Corporate Headquarters

PUERTO RICO

IMPROVING THE LIVES OF THOSE WE SERVE
400+ LOCATIONS ACROSS 39 U.S. STATES, WASHINGTON, D.C.,
PUERTO RICO AND THE UNITED KINGDOM

UNITED
KINGDOM

Acute Care Hospitals

Ambulatory Surgery Centers

Behavioral Health Facilities

Freestanding Emergency Departments

Universal Health Services, Inc.
Corporate Headquarters

PUERTO RICO

Acute Care Hospitals

Ambulatory Surgery Centers

Behavioral Health Facilities

Freestanding Emergency Departments

Universal Health Services, Inc.
Corporate Headquarters

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

2 0 2 3 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
DI VISION

The Acute Care Division operates 27 hospitals,
providing high-quality care to millions annually.
In our served markets, we are competitively
positioned as a provider of choice.

Our focus has been – and remains – on our three key divisional

priorities: Quality & Service; Operational Efficiency; and Physician

Alignment. We are optimistic about the future and continue to exude

passion and commitment to improving and saving lives. It is the

engagement, passion and drive of aligned teams that delivers results.

We work hard every day to be valued providers to our patients,

their families and our local communities.

2 0 2 3 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

QUALITY & SAFETY

Our commitment to providing superior
quality healthcare is core to UHS’ Mission and
differentiates us in our served communities. We
take the responsibility of protecting the health,
well-being and safety of our patients to heart. We
have a strong foundation to build on and always
strive to do even better.

Our relentless focus on quality will be evidenced in
higher Q-scores, an internal UHS metric, translating
across Centers for Medicare & Medicaid Services
(CMS) star ratings and other industry indicators that
are publicly visible metrics, referenced by consumers
making healthcare decisions. They represent our
core purpose – which is striving to provide the best,
safest care to each and every one of our patients.

Many of our hospitals are
consistently praised for delivering
high-quality care including those
who have earned Leapfrog A
Hospital Safety Grades, a testament
to their excellence in safety, quality
and resource use. In particular, we
are proud of the achievements of
Henderson Hospital in Nevada,
and Temecula Valley Hospital in
California, who each received their
11th “A” rating. Further, Cornerstone
Regional Hospital in Texas received

the Top General Hospital designation from
Leapfrog, recognizing the hospital’s achievements
in patient safety.

We were pleased to announce The George
Washington University Hospital (GW Hospital)
in Washington, D.C., earned a U.S. News &
World Report Best Regional Hospital distinction,
recognizing that GW Hospital is among the very
best in the D.C. area. GW Hospital achieved High
Performing status in three specialty areas and
10 common procedure and condition areas.
South Texas Health System Edinburg was named
a Best Regional Hospital in the McAllen, TX, area for
the second consecutive year, with High Performing
designations in seven common procedure and
condition areas.

Cornerstone Regional Hospital is co-owned with physician investors.

1 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 .

Recognizing excellence in maternity care,
GW Hospital, Centennial Hills Hospital Medical
Center, Corona Regional Medical Center and
Southwest Healthcare Rancho Springs Hospital
each received acknowledgment as a High
Performing Hospital, providing new moms with
peace of mind that they are receiving care from
highly skilled medical professionals.

Continuing with the achievements, Newsweek/
Statista named Lakewood Ranch Medical Center
to the America’s Best Maternity Hospitals list for the
second consecutive year. Lakewood Ranch was one
of only 384 hospitals in the U.S. recognized. This is
a testament to the commitment and dedication
of the entire Women’s Center team.

The reputation of the hospitals operated by our
subsidiaries are vital to our business. Patients often
have a choice, and we aim to continue to differentiate
our care such that patients see our high star ratings
and choose us. In 2023, our online reputation
management team responded to approximately
30,000 reviews posted on Google. UHS Acute Care
hospitals ended the year with an overall average
star rating by consumers of 4.3 out of 5 stars. Overall
average star rating of our freestanding emergency
departments (FEDs) was 4.7 stars. Our focus is clear:
deliver a 5-star Patient Experience.

We are committed to providing high-quality care to
our patients – smiling patients make us smile – here at
ER at West Craig Road, an extension of Centennial Hills
Hospital Medical Center.

ENHANCING PATIENT EXPERIENCE

We are committed to continuous improvement and enhancing
the patient experience while optimizing performance, reducing
costs and improving patient care. Significant results from the
year include:

• We changed the drug formulary, which is the list of drugs we
carry and allow prescribers to use, resulting in $4.2 million
in cost avoidance.

• Patient volume in the hospital-based/full-service Emergency

Departments (EDs) increased 5.6%.

• Overall length of stay for low-acuity ED patients was reduced

by 6.4%.

• We implemented an in-house Managed Service Provider to

manage over 117 contract labor agencies.

• We drove a 53% reduction in contract labor spend and a

15.3% reduction in RN turnover.

• We reduced Hospital Acquired Pressure Injuries by 41% and
Central Line Associated Blood Stream Infections by 29%.

Ten of 11 Rehabilitation units ended the year with Program
Evaluation Model (PEM) scores greater than 90. Meanwhile, units
at St. Mary’s Regional Medical Center, Texoma Medical Center,
South Texas Health System Edinburg and South Texas Health
System McAllen ranked in the top 10% in the country based
on their PEM scores.

Overall, we continued to see positive improvements that delivered
exceptional results, and we anticipate these improvements will
continue to accelerate into 2024.

“Healthcare
is better
where we
are. Our
Division

goals are predicated upon
the foundation of our
strong team. From senior
leadership through all
functions, we hold the bar
high, employ the best in
the industry and engage
our team to contribute their
very best…all for patients.”

> EDWARD SIM, PRESIDENT,
ACUTE CARE DIVISION

PATIENT FEATURE

“ I have end-stage heart failure and currently live with an LVAD.
An LVAD is a left ventricular assist device that is implanted in the
chest. It helps pump blood from the left ventricle to the rest of the
body. The LVAD is doing the work for my heart while I wait for a
transplant. The LVAD team at GW Hospital helped me overcome my
fears and helped me understand what to expect during this time. I am
most thankful to GW Hospital for giving my kids their mom back.”

Taneea is doing well and in good health.

> Taneea, patient
The George Washington University Hospital
Washington, D.C.

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

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

The Alan B. Miller Medical Center will be a new neighborhood hospital
that provides medical center excellence, serving the thriving regional
population. Left to Right: President & CEO Marc D. Miller,
Founder & Executive Chairman Alan B. Miller and his grandson TJ Miller.

GROWTH TO SERVE
MORE PATIENTS

As the populations in key markets continue to grow
and expand, so too do we. We are making great
strides on building three new hospitals.

West Henderson Hospital, in Southern Nevada,
will open in 2024 and will feature 150 beds and a
37-bay Emergency department, among many other
healthcare suites and departments. This will be the
sixth Acute Care hospital within The Valley Health
System, a robust integrated delivery network
that also includes various ambulatory care
access points.

In Washington, D.C., we raised the final steel beam
in constructing Cedar Hill Regional Medical Center
GW Health, a new 136-bed hospital. Cedar Hill will
provide a comprehensive network of care to serve
all District residents, but more importantly it will
ensure residents of Wards 7 and 8 have access
to high-quality care in their community. We are
developing comprehensive services to improve
health and wellness for the residents of this great
city. Cedar Hill is scheduled to open in 2025.

In Florida, we broke ground on the new Alan B.
Miller Medical Center, a 150-bed neighborhood
hospital with medical center excellence that will
serve the growing population of the greater Palm
Beach Gardens community. Named after UHS
Founder and Executive Chairman Alan B. Miller, the
hospital is currently scheduled to open in late 2025.

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 .

Prominence Health is driving physician alignment
through value-based care initiatives, enabling
greater access to better care at lower cost. With
seven Accountable Care Organizations (ACOs)
and 200,000 lives across five U.S. states and
Washington, D.C., Prominence Health and partnered
clinicians continue to produce meaningful cost
savings to Medicare. During the year, Prominence
Health announced $93 million in savings for
Medicare and more than $65 million in earnings for
3,000 participating physicians. This yields a total of
over $468 million saved since the establishment of
the first UHS ACO in 2014.

Prominence Health Plan achieved a 4-star rating for
Medicare Advantage and a 97% quality score given
by CMS for 2023. Prominence Health Plan and the
ACOs are key strategic vehicles to partner with
Primary Care around population health initiatives.

Independence Physician Management (IPM), a
subsidiary of UHS, develops and manages multi-
specialty physician networks and urgent care clinics
which align with our Acute Care and Behavioral
Health facilities in 13 markets across seven states
and the District of Columbia. With over 880
providers, IPM treated patients in over 1.7 million
encounters during the year.

SEVERAL FEDs ARE COMING SOON
ACROSS NEVADA, TEXAS AND FLORIDA:

ENABLING CONVENIENT
ACCESS TO CARE

During the year, we expanded our network of
Freestanding Emergency Departments (FEDs). The FED
model is strategic, efficient and generates high patient
satisfaction ratings.

We have 26 FEDs fully operational, several under
construction, and have acquired land to build additional
FEDs. In 2023, the FEDs handled over 421,000 ER visits
and had over 26,000 transfers to UHS hospitals. By the
end of 2024, we expect to have over 30 FEDs open
and serving patients.

During 2023, we opened:

• ER at Spanish Springs, an extension of

Northern Nevada Medical Center

• Manatee ER at Bayshore Gardens, an extension

of Manatee Memorial Hospital

• ER at North Las Vegas, an extension of

Valley Hospital

• ER at West Craig Road, an extension of

Centennial Hills Hospital

• Desert Springs Hospital was transitioned to
the ER at Desert Springs, an extension of
Valley Hospital.

PATIENT FEATURE

Henderson Police Officer Scott Nelson was brought to the Henderson
Hospital ER in serious condition.

“ The medical team was able to restore my heartbeat and they worked
hard to save my life,” said Mr. Nelson. “I was quite sick and required care
in the ICU for over a week. I am making progress on my recovery. To say
thank you, the Henderson Police Department visited Henderson Hospital
and brought snacks and a plaque to recognize the dedicated staff and
the medical team.”

> Scott, patient
Henderson Hospital
Henderson, NV

2 0 2 3 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

CREATING HEALTH IN HARMONY

FO R S OU THER N CALIFORNIA

In Southern California, we aligned our Acute Care hospitals as a unified network of care –
Southwest Healthcare – employing over 7,000 dedicated team members and comprised of
five hospitals, multiple urgent care locations and affiliated doctors’ practices.

Also in Southern California, we continue to make progress on the integration of Riverside
Medical Clinic (RMC), 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.

THE SOUTHWEST HEALTHCARE NETWORK

SANTA
CLARITA

101

LOS ANGELES

PALMDALE

138

215

210

CORONA

RIVERSIDE

ANAHEIM

215

405

LONG BEACH

HUNTINGTON
BEACH

MURRIETA

SAN CLEMENTE

TEMECULA

Corona Regional Medical Center

Palmdale Regional Medical Center

Southwest Healthcare Rancho Springs Hospital

Southwest Healthcare Inland Valley Hospital

Temecula Valley Hospital

Riverside Medical Clinic**

Temecula Valley Day Surgery*

A+ Urgent Care Centers**
Murrieta - Kalmia Street
Murrieta - Technology Drive
Lake Elsinore
Menifee Lakes

*Majority owned by an affiliate.
**Physician-owned independent groups, managed by an affiliate.

1 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 .
1 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 .

RISING TO NEW HEIGHTS

Southwest Healthcare continues
to expand services and provide care
and employment opportunities across
the Southern California region. Most
recently, Southwest Healthcare Inland
Valley Hospital celebrated the milestone
of the installation of the final steel beam
in its new, seven-story patient tower,
currently under construction.

The tower will include modern,
private patient rooms, the installation
of advanced clinical technologies for
minimally invasive procedures and
globally sustainable infrastructure

Rendering of the new patient tower at Southwest Healthcare
Inland Valley Hospital.

enhancements, including energy-efficient LED fixtures and solar panels. The tower, expected to
open in 2026, is part of a $400 million project to expand and renovate Southwest Healthcare
Inland Valley and Rancho Springs Hospitals.

Hospital leaders and staff were joined by members
of the construction crew and city officials to witness
the installation of the final steel beam. The beam –
adorned with a pine tree, American flag, the hospital
brand logo, and the signatures of hospital employees,
local physicians, the construction workers on the
project and community members – was raised and
positioned atop the tower.

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

1 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 .
1 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 .

UHS
BEHAVIORAL
HEALTH
DI VI SIO N

The Behavioral Health Division brings hope, help and
healing. Across 39 states, Washington, D.C., Puerto Rico
and the United Kingdom, our teams of trusted caregivers
provide high-quality behavioral healthcare services in the
communities we serve.

With the growing demand nationally, our care teams are working

hard to deliver strong patient outcomes, engage and recognize

employee teams and deliver business growth across the division.

The Behavioral Health Division cared for approximately 730,000

individuals across the full continuum of care including inpatient,

outpatient, partial hospitalization and telehealth settings.

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

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

CLINICAL EXCELLENCE

As a leader in the behavioral
health space, we know
individuals come to us
for hope, resiliency and
connection. During the year,
from a clinical excellence
perspective, we delivered

exciting and innovative enhancements. We
rolled out Trauma-Informed Care, the cultural
transformation strategy for the Division. Trauma-
Informed Care is a comprehensive framework that
provides quality, clinical care to survivors of trauma
by emphasizing safety and the notion that healing
occurs through safe and collaborative relationships.

We launched Cerner, an electronic health record
(EHR), at three additional facilities in 2023 while
planning for an additional six implementations in
the coming year. EHR launches will continue over
the next few years and promise to deliver on our
commitment of using technology to support the
clinical teams in conducting their work.

We continued to roll out and implement
ObservSMART at our facilities. The use of this
proximity-based rounding technology has increased
our capacity for patient engagement and has
shown great promise
in reducing high-risk
events as well as
improving overall
timeliness.

All facilities aim to be highly regarded, trusted
providers of behavioral health in the communities
we serve. Black Bear Lodge, La Amistad
Behavioral Health Services, Pride Institute,
Talbott Recovery and The Ridge Behavioral
Health System were listed on Newsweek/Statista’s

annual America’s Best
Addiction Treatment Centers
for 2023. Recognitions such
as this help families choose
from the best treatment
options available.

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 .

Leadership and staff celebrated the go-live of the electronic
health record (EHR) at Brooke Glen Behavioral Hospital, located
in Fort Washington, PA. Left to Right: Leaders Michael McDonald,
Karen E. Johnson and Brooke Glen CEO Neil Callahan.

Patient Satisfaction

Our care teams provide evidence-based
treatment and support to patients resulting in lasting
improvement and recovery for the hundreds of
thousands of patients whom we are privileged to
serve each year.

In CMS’ Quality Reporting requirements, our facilities
are compared to 1,500 psychiatric providers across
the country. Our results exceed the national averages
in 8 out of 12 indicators. In 2023, patients rated their
overall care as 4.4 out of 5 in our patient satisfaction
surveys; 91% indicated they felt better following care
at one of our facilities.

We expanded uptake of the Net Promoter Score
(NPS) in our patient surveys. NPS measures the
loyalty of consumers and has been widely adopted
by most Fortune 1000 companies. We measure NPS
using the question: “How likely would you be to
recommend this facility to a friend or family member?”
In 2023, the UHS Behavioral Health Division’s
NPS was 40 on a scale of -100 to 100. This score is
considered very good/great by industry standards.

We received approximately 8,300 Google reviews
and improved the Division’s average star rating. We
are moving the needle in a positive direction on these
highly visible consumer reviews. Higher average star
ratings instill confidence as prospective patients,
families and referral sources evaluate their care options.

“The care
teams at our
Behavioral
Health
facilities are
compassionate, dedicated
individuals who make a
difference in the lives of
patients and their families.
Our Division is honored to
continue to serve the growing
demand for therapeutic
treatment. Our team members
are our strongest asset, and
we are appreciative of their
unwavering dedication to
serving with excellence.”

> MATT PETERSON, PRESIDENT,
BEHAVIORAL HEALTH DIVISION

SPECIALTY SERVICES AND PROGRAMS

As a dominant player in the industry, our teams constantly
expand service lines to best serve and support patients. We
handled over a million referrals during the year and received
over 7,700 referral source satisfaction surveys.

We offer hundreds of specialty programs to address diverse
audiences. Through our Patriot Support Programs, we serve the
unique needs of active-duty military, reservists, veterans and
their families. We have also increased the number of programs
catering specifically to First Responders to address the needs of
police, firefighters, healthcare providers and Emergency Medical
Services professionals.

Substance Use Disorder treatment – a core service line priority –
features a broad array of options including inpatient detoxification
programs, partial hospitalization programs (with and without
boarding), intensive outpatient programs and sober living supports.

We are nationally recognized for our programs that treat Eating
Disorders. In fact, Center for Change was recently the first behavioral
health facility in the U.S. to earn validation as a Gluten Free Safe Spot®,
another valuable way we are putting patients’ needs at the forefront.

Autism Spectrum Disorder treatment referrals are at an all-time high.
We have programs available at select facilities and provide care
for individuals referred to us from many states. We are proceeding
with plans to expand our capacity to care for this population.

For adolescents in longer-term care with us, we provide
structured education. In 2023, 136 students completed their
high school requirements. By providing personalized lessons
utilizing a combination of direct instruction, online platforms and
community-based instruction, we enable academic success.

PATIENT FEATURE

“ I was at Talbott from late November 2022 to mid-February 2023. I was a
heavy drinker for years and was intervened by my family. The counselors at
Talbott are among the best in the country and truly care about the recovery
of all the patients. I am happier and healthier now. I feel fortunate to be from
Atlanta and have this facility in my backyard, and would recommend it to
anyone, from anywhere. If you are reading this and considering treatment,
I urge you to take the plunge. It may save your life.”

> Scott, alumnus
Talbott Recovery
Atlanta, GA

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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

With overwhelming support from community
partners, elected officials, school district members,
first responders and mental health advocates,
River Vista Behavioral Health hosted a ribbon cutting
ceremony commemorating opening.

CELEBRATING GROWTH
AND EXPANSION

Our continually expanding portfolio of services
has supported noteworthy growth and expansion.
We are privileged to serve an increasing number
of patients, ultimately saving and improving lives.

In June, we opened 128-bed River Vista Behavioral
Health in Madera, California, in partnership with
Valley Children’s Healthcare. This beautiful
new facility is off to a strong start.

At the site of the new Southridge Behavioral
Hospital in Western Michigan, we held a ceremonial
beam topping in November. Our joint venture
partner, Trinity Health Michigan, has a strong
reputation as an anchor in the region and we are
pleased to collaborate with them. The new facility
is on schedule to open in 2025.

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 February, we announced an exciting
partnership with Lehigh Valley Health Network,
in Northeastern Pennsylvania to build a de novo
Behavioral Health Facility. Groundbreaking
will be held in the Spring of 2024.

We opened new replacement buildings for three
Behavioral Health locations: Prairie St. John’s in
North Dakota in 2023; Mountain Youth Academy
in Tennessee and The Hughes Center in Virginia in
early 2024. These achievements solidify our work
in a critical component of the care continuum with
additional residential treatment center beds.

Each of these new construction and expansion
projects underscores our commitment to closing
the gaps in much-needed care. We are a trusted
provider with whom other major health systems
seek to partner. We aim to be the #1 choice for
referral sources and consumers for all levels of care.
In the year ahead, we are on pace to bring on over
200 new beds at de novo and existing facilities.

SUICIDE AWARENESS
AND PREVENTION

UHS continues its strategic partnership with the
National Action Alliance for Suicide Prevention,
helping individuals connect with support when
they find themselves in crisis. During the year, we
supported the one-year anniversary of the launch of
the 988 Suicide & Crisis Lifeline. 988 provides 24/7
access to trained crisis counselors and 100% privacy.
Help is available via phone, text or chat. Since it
launched, there have been over 6 million calls, texts
and chat messages pouring in to trained counselors
who are providing emotional support and stabilization.

The 988 Lifeline helps thousands of people
struggling to overcome suicidal crises or mental
health-related distress every day. Care delivered
has resulted in statistically meaningful improvement.

“Cygnet
aims to make
our name
synonymous
with hope,

opportunity and possibility
at every location where
we are delivering care in
the U.K. We are proud to
be part of UHS and look
forward to many years
of success.”

> DR. TONY ROMERO,

CEO, CYGNET

CYGNET

PATIENT FEATURE

As part of its 35th anniversary in 2023, UHS’ subsidiary in the U.K.
announced the creation of two divisions under the Cygnet umbrella
brand: Cygnet Health Care and Cygnet Social Care. In 2023, Cygnet
achieved 10% growth in revenue and bolstered its commitment to
providing the highest standards of care.

Cygnet’s investment in services and focus on quality has
strengthened its reputation, and in the last year Cygnet provided
care to a record number of individuals. Cygnet is a trusted partner
to the National Health Service and local authorities in England,
Scotland and Wales. It is a positive sign of how commissioners value
the care being offered and defines Cygnet as one of the largest and
leading providers of behavioral health services in the U.K.

For the second year in a row, Cygnet outperformed the national average
in regulatory ratings with 83% of services evaluated across the U.K. rated
‘Good’ or ‘Outstanding’ and 100% of inpatient schools in Cygnet’s
Child and Adolescents Mental Health Services (CAMHS) rated ‘Good.’

Cygnet is grateful to its talented workforce and leadership teams who
are committed to sustaining and exceeding quality standards. In the
past year, Cygnet achieved a reduction in staff turnover, used fewer
agency workers and enhanced the retention of its workforce. Cygnet’s
goal is to grow more talent in-house, provide opportunities for staff to
progress with us and develop current staff members into future leaders.

As part of an extensive expansion program, Cygnet will open six
new hospitals and modernize five existing facilities during 2024.
New services will generate employment in local communities, and
Cygnet will recruit up to 1,000 more people into its workforce.

SERVICE USER FEATURE

“ I have struggled with my mental health for as long as I can remember.
My mental well-being declined to the point where I was admitted to
an acute ward, where I remained for three years. I was fortunate to be
able to move to Cygnet Hospital Maidstone’s Roseacre Ward. While at
Roseacre Ward, I had the most incredible support that has been invaluable
for my recovery. I also received my autism diagnosis which made me
feel validated.

After my stay at Roseacre Ward, I moved to Cygnet Supported Living and

now I have started my dream course at university. I am the happiest I have
ever been. I have a bright future ahead of me and I am so proud of all I
have achieved through the support of Cygnet.”

> Rowan, service user
Roseacre Ward, Cygnet Hospital Maidstone
United Kingdom

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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

SERVING OUR NATION’S MILITARY

We were privileged to serve
over 17,500 active duty military
personnel, veterans and family
members across the Division
via our designated Patriot
Support Programs. Our Division
received referrals from 317 Active
Duty Military Installations, Military
Medical Facilities, National Guard
and Air National Guard Units and
Reserve locations from both the
United States and overseas.

Via Linda Behavioral Hospital in Scottsdale, Arizona, held a ribbon
cutting for their new Patriot Support Program. The 20-bed unit is dedicated
for active-duty U.S. Armed Forces, U.S. Reserve and National Guard
members. Left to Right: Matt Mueller, Andy Laning, Jerry Fenwick, Matt
Peterson, Jackie Hull, Megan James, Michael Leal and Michael Tapp.

Services are designed to
address the effects of combat
stress, PTSD, depression,
Substance Use Disorder and
other behavioral health issues.
In many of our programs, services and care are provided by former military, providing real-world
expertise and understanding. Five new Patriot Support Veterans Programs were added during
the year.

We now have 10 Child and Adolescent programs within the Patriot Support Programs network.
Facilities were selected based on the high volume of military dependents receiving care along
with their high patient satisfaction scores, outstanding Online Reputation star ratings, NPS,
Patient Safety data and clinical outcomes.

As a TRICARE®-authorized provider, there are opportunities to provide services for 10 million active
service members, retirees and their families globally. UHS facilities play a vital role by working with
the U.S. Department of Defense, through the Defense Health Agency, to provide inpatient and
outpatient psychiatric and substance use services.

In 2023, UHS Facilities educated communities about Veterans Affairs (VA) benefits made available
through the COMPACT (Veterans Comprehensive Prevention, Access to Care and Treatment) Act.
There are 18 million veterans across the U.S., and we were honored to provide services to over
7,000 veterans, a growth rate of 24%.

2 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 .

WE ESTABLISHED A NEW PATRIOT SUPPORT MILITARY ADVISORY BOARD
AND RECRUITED NEW MEMBERS WITH UNPRECEDENTED CALIBER, INCLUDING:

The Honorable
David Shulkin, MD,
Former Secretary of
Veterans Affairs

Lieutenant General (Ret)
Ronald Place, MD,
Former Director, Defense
Health Agency

Lieutenant General (Ret)
Bruce Green, MD, MPH,
Former Surgeon General,
United States Air Force

Rear Admiral (Ret)
Bruce Gillingham, MD,
Former Surgeon General,
United States Navy

Rear Admiral (Ret)
Paul Higgins, MD, Director,
Health and Safety Division,
United States Public Health
Service and United States
Coast Guard

Major General (Ret)
Jerry L. Fenwick, MD,
Former Joint Surgeon,
National Guard Bureau

Chief Master Sergeant (Ret)
Charles Cole, Former Chief
of the Medical Enlisted
Force, United States
Air Force

PATIENT FEATURE

“ The time I spent at Laurel Ridge Treatment Center changed my life for
the good. They have world class staff and service. The accommodations,
respect, compassion, love and drive that Mission 100 nurses, staff
therapists and all others give through this program cannot be matched
anywhere else. I was nervous to come here like most, but once I got here,
not only did the staff welcome me with open arms and a smile, but the
TRIBE from Mission 100 did as well. I have never felt this free in my life,
nor have I had this much clarity. Laurel Ridge and their staff save people’s
lives and change them for the better.”

> Beth, former military patient

Laurel Ridge Treatment Center
San Antonio, TX

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SUSTAINABILITY

Serving communities with
integrity and purpose

UHS is committed to being a high-quality healthcare
provider, trusted and respectful employer and valued
partner to the local communities we serve. This has
been – and remains – core to our Mission throughout
our 45-year history.

Our sustainability efforts are an extension of this
commitment to doing business right and are reflected
in our day-to-day operations. In the coming year, we
will continue to focus on further development of new
efficiencies, products and processes that support our
business, services and environment.

ONLINE ONLY – to access the
2023 UHS Sustainability Report,
visit uhs.com/sustainability

2 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 .

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

OUR SUSTAINABILITY IMPACT
2023 BY THE NUMB ER S

FOCUSING ON PATIENTS

100% of U.S. facilities are licensed by their state
and accredited by regulatory bodies, such as
The Joint Commission and/or Commission on
Accreditation of Rehabilitation Facilities

15 facilities with Gluten-Free Food Service validation

91% of Behavioral Health patients indicated
they felt better following care at one of
our facilities*

89% of Behavioral Health patients indicated
they were treated with dignity and respect**

SUPPORTING OUR VALUED TEAMS

75% of U.S. workforce are women

57% of U.S. workforce is ethnically diverse

1,600+ veterans hired in U.S.

81% of U.S. employees report that they feel
included on their team/work unit***

87% of U.S. employees report that the person
they report to treats them with respect***

PARTNERING WITH LOCAL COMMUNITIES

$7.1 billion in salaries, wages and benefits

10+ year partnership with the National Action
Alliance for Suicide Prevention to help those
in crisis

14 years on Fortune magazine’s World’s Most
Admired Companies list

$2.6 billion of uncompensated care at our
Acute Care hospitals

INVESTING IN THE ENVIRONMENT

15 Energy Star certifications

90% of lights in UHS’ U.S. facilities are equipped
with LED versions

5,080.5 metric tons of paper collected, shredded
and recycled

13 Acute Care hospitals using new application
to track food waste

100% of electricity has been procured from
renewable sources since 2021 across all Cygnet
facilities in the U.K.

GOVERNING STRUCTURE

4 (of 6) Board Committees provide oversight
of sustainability-related issues

48 privacy and data-security-related policies maintained
at the Corporate level and locally by U.S. facilities

43% of UHS Board of Directors members
are women

2 Patient Safety Organizations registered under the
Agency for Healthcare Research and Quality to govern
patient-safety initiatives (one for each Division)

*Based on 378,534 respondents to 2023 patient satisfaction surveys
**Based on 378,750 respondents to 2023 patient satisfaction surveys
***Based on 50,064 employees who responded to U.S. Pulse Employee Engagement Survey

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

BUILDING FOR
THE FUTURE

As we move forward, we maintain

a long-term focus on the future.

With a commitment to delivering healthcare

with excellence and quality, we will identify,

develop and pursue rational new opportunities

that complement our core business and achieve

our Mission, ensuring UHS is well positioned

for the decades ahead.

We will remain a vibrant company that

rises to challenges, leverages opportunities

and cultivates visionary leaders.

#ThisIsUHS
uhs.com

2 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 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, 2023
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. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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, 2023 was $9.5 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, 2024, were 6,577,100; 59,969,747; 661,688 and 12,802, respectively.

DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant’s definitive proxy statement for our 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission
within 120 days after December 31, 2023 (incorporated by reference under Part III).

Business

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

Properties
Legal Proceedings
Mine Safety Disclosure

UNIVERSAL HEALTH SERVICES, INC.
2023 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
14
27
27
28
37
37

38
39
40
75
76
76
76
77
77

78
78
78
78
78

79
86

This Annual Report on Form 10-K is for the year ended December 31, 2023. 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 27, 2024, we owned and/or operated 360 inpatient facilities and 48 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.:



27 inpatient acute care hospitals;

27 free-standing emergency departments, and;

10 outpatient centers & 1 surgical hospital.

Behavioral health care facilities (333 inpatient facilities and 10 outpatient facilities):

Located in the U.S.:


186 inpatient behavioral health care facilities, and;



8 outpatient behavioral health care facilities.

Located in the U.K.:


144 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 57% of our

consolidated net revenues during each of 2023 and 2022. Net revenues from our behavioral health care facilities and commercial
health insurer accounted for 43% of our consolidated net revenues during each of 2023 and 2022.

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $761 million in 2023 and $685
million in 2022. Total assets at our U.K. behavioral health care facilities were approximately $1.327 billion as of December 31, 2023
and $1.235 billion as of December 31, 2022.

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 www.uhs.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 2023. 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: Certain of the states in which we operate hospitals have 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”) consolidated
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 $29,899 for each violation, and up to $199,338 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 $120,816 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 $13,508 to $27,018 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, 2023, we had approximately 96,700 total employees consisting of: (i) approximately 84,450 employees

located in the U.S., of which approximately 61,100 were employed full-time, and; (ii) approximately 12,250 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 380 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 500 physicians 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 535 of our employees at four of our hospitals are unionized. At Valley Hospital Medical Center, housekeeping
and dietary employees are represented by the Culinary Workers Union, Local 226, and engineers are represented by the International
Union of Operating Engineers. At HRI Hospital in Boston, 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 registered nurses are represented by the Northwestern Nurses Association/Pennsylvania Association of Staff Nurses
and Allied Professionals. At Fairmount Behavioral Health, registered nurses and certain other professional job classifications are
represented by District 1199C, National Union of Hospital and Health Care Employees, AFSCME, AFL-CIO, as are Licensed
Practical Nurses who are currently organized in a separate bargaining unit.

Culture and Work Environment

During orientation, newly hired employees learn our mission, vision, principles and values, key policies and procedures, a

summary of the various benefits and resources available, and perhaps most notably, an overview of our founding principle, Service
Excellence. Learning key attributes of our Service Excellence standards, which include continuous improvement, employee
development, ethical and fair treatment of all, teamwork, compassion and innovation in service delivery, provides newly hired
employees a thorough understanding of our company culture. Other components of our Service Excellence standards, which include
treating everyone as a guest, demonstrating professionalism and excellence and practicing teamwork, are shared to help guide the
desired approach to day-to-day activities.

Service Excellence Facilitator Certification Workshops are available for facility employees identified by their leadership for
consistently upholding and demonstrating our Service Excellence standards. Certified facilitators foster the Service Excellence culture
and deliver training at their facilities. In 2023, we held 13 workshops with 134 individuals certified as Service Excellence Facilitators.

During 2023, we strengthened our recruitment efforts, improved the overall hiring and onboarding experience (89% very
satisfied/satisfied with overall recruitment process), expanded the training resources employees need to do their jobs effectively and
safely, facilitated more teamwork and collaboration, addressed burnout, expanded mentorship and increased employee engagement.

We conducted a Pulse Employee Engagement Survey and had an overall participation rate of 67% across the organization. 81%
of staff indicated “I feel included on my team/work unit.” Engagement efforts such as services awards, safety programs and employee-
led service excellence/culture committees has assisted with increased employee retention.

Ethical Standards

Each member of our Board of Directors and senior management is committed to healthcare operations that are ethical and in

compliance with all applicable laws and regulations.

We are committed to fostering a culture of accountability at all levels and encourage our employees to report anything they

believe could be noncompliant 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.

Health and Safety

Policies and training programs to encourage work safety are a major focus in our organization. We continue to promote the

employee assistance program which has provided a superior level of service to all our employees and members of their households.
We have continuous training on workplace safety and launched a “We Care” program guide to ensure our hospitals support employees
in a detailed way in the event of an employee injury.

Employee Development

In keeping with our culture of continuous improvement, training opportunities are available for all employees, regardless of

level or status. These include formal instructor-led, in-person or virtual training, informal mentoring or networking opportunities or
self-administered online courses.

Training programs are designed to assist with personal and skill development, career advancement and succession planning. In

addition to mandatory training that focus on keeping employees mindful and informed of key policies and skill sets, many are
voluntary. All training is tailored to include potential Americans with Disabilities Act accommodations.

Across the company, we offer educational and work opportunities, including internships, externships and clinical field
placement opportunities. We have partnered with Chamberlin University and Drexel University to provide their students with
opportunities to earn clinical experience at our healthcare facilities. In 2023, Chamberlin University students participated in more than
1,000 clinical rotations at various acute care and behavioral health care facilities of ours nationwide.

We also offer financial assistance programs, such as educational reimbursement, to support employees participating in degree,

certification and continuing education programs.

Equal Employment Opportunity

We are committed to the principle of Equal Employment Opportunity ("EEO") for all employees and applicants. As an EEO
Employer we support, and are fully committed, to recruitment, selection, placement, promotion and compensation of all individuals
without regard to race, color, religion, age (40 and over or as otherwise defined by applicable law), sex (including pregnancy, gender
identity, and sexual orientation), genetic information (including family medical history), national origin, disability status, protected
veteran status or any other characteristic protected by federal, state or local laws.

Diversity and Inclusion

We value each member of our team and are committed to treating everyone with dignity and respect. Our commitment to

diversity, equality and inclusion includes regularly monitoring employment practices to ensure equity, regardless of an employee’s
gender, race or ethnicity and championing for inclusive behaviors through leadership example, policies and procedures, training and
special events.

Employee Assistance

We continue to support the overall health and financial well-being of our employees across the extensive programs and benefit

plans that we offer. In 2023, we continued to expand the UHS Resource Guide which provides details on access to the benefits,
resources and support tools available to employees throughout our organization.

In 2023, the UHS Foundation continued to support employees and their families who suffered losses due to natural disasters

across the country, including tornados in Arkansas and Hurricane Ian.

Environmental

We have implemented environmentally sustainable practices and we comply with applicable legal and regulatory environmental

standards to protect our patients, visitors, staff and local communities. Our environmental stewardship includes following best
practices when managing energy usage, constructing and designing new builds and/or major renovations and protecting the local
environment.

 Our facilities located in the U.S. utilize a centralized utility billing management system to monitor energy usage and detect
significant deviations from normal usage consumption patterns. Also, 23 of our acute care hospitals utilize automatic fault
detection and diagnostics software to monitor the efficiencies of the heating, ventilation and air conditioning operations. Most of
these facilities also undergo retro-commissioning and monitoring-based commissioning.

 Our newly built facilities, or those undergoing major renovations, are required to meet or exceed all federal, state and local energy
efficiency stands and energy codes, and use mechanical-electrical-plumbing systems to optimize energy efficiencies and water
conservation. Newly constructed acute care facilities are expected to achieve an ENERGY STAR® Portfolio Manager Score of
90 or higher. In addition, all new construction or major renovation projects costing $20 million or more are required to be assessed
for Green Globes and/or U.S. Green Building Council’s Leadership in Energy and Environmental Design certifications.

 Our facilities have adopted policies and procedures that are compliant with the applicable laws from the Environmental Protection
Agency, local departments of health and other regulatory bodies overseeing the responsible disposal of pollution and waste.

 Our water management program is designed to oversee potable, process and utility water programs through active management
and hazard control validation. The program is designed to ensure safe water throughout our buildings and meets ANSI/ASHRAE
Standard 188 (Legionellosis: Risk Management for Building Water Systems). The program also manages domestic potable,
process water and utility water.

Our facilities located in the U.K. continue to procure 100% of their electricity from renewable sources, a practice that has been in

place since 2021. Recently Cygnet updated its emissions targets:

 Net zero carbon for direct (Scope 1) and indirect (Scope 2) emissions by 2035

 Net zero carbon emissions in our supply chain (Scope 3) by 2040.

Our leadership teams actively manage opportunities and risks related to our facilities, including those related to climate change

and other environmental risks.

Revenue and volume trends may be affected by seasonal and severe weather conditions, including the effects of extreme low
temperatures, hurricanes and tornadoes, 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 tornadoes.
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 24 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, operations may be subject to increases in energy prices as well as increased government regulation, such as the limiting
of greenhouse gas emissions, intended to mitigate the impact of climate change, severe weather patterns, or natural disasters. These
could result in additional required capital and/or operational expenditures to comply with such regulation without a corresponding
increase in our revenues.

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.

While our facilities tend to be located in fast growing, concentrated geographies, 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,
including outpatient surgical centers and addiction treatment centers, 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 and other
health care professionals, as well as non-professionals such as mental health technicians. 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. To the extent we cannot meet appropriate staffing 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.

Certain 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, including managed

Medicare and Medicaid 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.

An 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, 2023, 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 2024 at the same rate in place for 2023,
2022 and 2021, 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 $5.3 million during 2023, approximately $5.1 million during 2022 and $4.4 million during 2021.

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 $874,000 during 2023, $1.2 million during 2022 and $6.2 million during 2021,

which are included in other income (expense), net, on the accompanying consolidated statements of income for each year. We
received dividends from the Trust amounting to $2.3 million during 2023 and $2.2 million during each of 2022 and 2021. 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 $7.0 million and $8.4 million at December 31, 2023 and 2022,

respectively, and is included in other assets in the accompanying consolidated balance sheets. The market value of our investment in
the Trust was $34.1 million at December 31, 2023 and $37.6 million at December 31, 2022, 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. The base rents are paid monthly and the bonus rents, which effective as of January 1,
2022 are applicable only to McAllen Medical Center, 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, which was amended during the

first quarter of 2022, 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”), a 102-bed facility located in Temple, Texas, at its fair-market

value of approximately $26.0 million.

in connection with this transaction, since the fair-market value of Aiken and Canyon Creek, which totaled approximately
$83.7 million in the aggregate, exceeded the $79.6 million fair-market value of the Inland Valley Campus of Southwest
Healthcare System, we received approximately $4.1 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.

Also on December 31, 2021, Aiken and Canyon Creek (as lessees), entered into a master lease and individual property leases

pursuant to the leases for these two facilities, amounted to approximately $5.8 million ($4.0 million related to Aiken and $1.8 million
related to Canyon Creek). The aggregate annual rental during 2022 pursuant to the leases for these two facilities, amounted to
approximately $5.7 million ($3.9 million related to Aiken and $1.8 million related to Canyon Creek). There is no bonus rental
component applicable to either of these leases. 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 sheets as of December 31, 2023 and 2022
reflect a financial liability of $77.5 million and $80.9 million, respectively, 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 as a reduction to the outstanding financial liability. The amount allocated to interest expense is determined using our
incremental borrowing rate and is based on the outstanding financial liability.

The aggregate rent payable to the Trust in connection with the leases on McAllen Medical Center, Wellington Regional Medical
Center, Aiken Regional Medical Center and Canyon Creek Behavioral Health was approximately $20.6 million during 2023 and $20.2
million during 2022. 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
during 2021.

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 a specified
period 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 a specified period 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 facility, which was
completed and opened in late 2020, is also leased from the Trust (annual rental of approximately $2.7 million, $2.6 million and $2.5
million during 2023, 2022 and 2021, respectively) 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, 2024:

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

Annual
Minimum
Rent
$ 5,485,000
$ 6,639,000

End of Lease Term

December, 2026
December, 2026

Renewal
Term
(years)

$ 4,072,000
$ 1,841,000
$ 2,775,000

December, 2033
December, 2033
December, 2040

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, 2024, the
annual lease rate for this hospital is $6.6 million (there is no longer a bonus rental component of the lease payment). 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). On each January 1st through 2033,

the annual rent will increase by 2.25% on a cumulative and compounded basis.

(d) This facility is operated by a joint venture in which we are the managing, majority member and an unrelated third-party holds a

minority ownership interest. The joint venture has three, 10-year renewal options at computed lease rates as stipulated in the
lease (2041 through 2070) and two additional, 10-year renewal options at fair market values lease rates (2071 through 2090). 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 various 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.

During the third quarter of 2023, the Trust acquired the McAllen Doctor's Center, a 79,500 rentable square feet medical office

building located in McAllen, Texas. A master lease was executed between a wholly-owned subsidiary of ours and the Trust, pursuant
to the terms of which our subsidiary will master lease 100% of the rentable square feet of the MOB at an initial minimum rent of
$624,000 annually. The master lease commenced during August, 2023 and is scheduled to expire in twelve years.

During the first quarter of 2023, the Trust substantially completed 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, a 170-bed newly constructed acute care hospital owned and operated by a wholly-owned subsidiary of ours, was
completed and opened in April, 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 plus a pro-rata share of the common area
maintenance expenses. The master flex lease could be reduced during the term if certain conditions are met. The ground lease and
master flex lease each commenced during the first quarter of 2023.

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 (53)
Alan B. Miller (86)
Steve G. Filton (66)
Matthew J. Peterson (54)
Edward H. Sim (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 Behavioral Health Division
Executive Vice President, President of Acute Care 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. 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 also serves in the Air National Guard
("ANG"), U.S. Airforce, and was recently promoted to Brigadier General. He has also served for over 25 years with the ANG as a
Healthcare Executive/Medical Service Corps Officer and has held numerous leadership roles.

Mr. Sim's employment with us commenced in December, 2022 as Executive Vice President and President of our Acute Care

Division. He was formerly employed as Chief Operating Officer at Centura Health, since 2017. Prior to joining Centura Health, Mr.
Sim served in senior leadership roles of increasing responsibility for 11 years at Baptist Health.

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, 12 free-standing emergency departments and 21 inpatient behavioral healthcare
facilities as listed in Item 2. Properties. On a combined basis, these facilities contributed 17% of our consolidated net revenues during
both 2023 and 2022, respectively. On a combined basis, after deducting an allocation for corporate overhead expense, these facilities
generated 26% in 2023 and 27% in 2022, of our income from operations after net income attributable to noncontrolling interest.

Nevada: We own 9 inpatient acute care hospitals, 9 free-standing emergency departments, 3 acute outpatient centers and 3
inpatient behavioral healthcare facilities as listed in Item 2. Properties. On a combined basis, these facilities contributed 16% and 17%
of our consolidated net revenues during 2023 and 2022, respectively. On a combined basis, after deducting an allocation for corporate
overhead expense, these facilities generated 16% in 2023 and 14% in 2022, of our income from operations after net income
attributable to noncontrolling interest. Excluding the impact of the $57.6 million provision for asset impairment recorded during 2022,
as discussed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Provision for Asset
Impairments, after deducting an allocation for corporate overhead expense, these facilities generated 18% of our income from
operations after net income attributable to noncontrolling interest during 2022.

California: We own 5 inpatient acute care hospitals, 2 acute outpatient centers, 9 inpatient behavioral healthcare facilities and 3

behavioral healthcare outpatient facilities as listed in Item 2. Properties. On a combined basis, these facilities contributed 11% our
consolidated net revenues during both 2023 and 2022, respectively. On a combined basis, after deducting an allocation for corporate
overhead expense, these facilities generated 12% in 2023 and 15% in 2022, of our income from operations after net income
attributable to noncontrolling interest.

This geographic concentration makes us particularly sensitive to regulatory, economic, public health, environmental and
competitive conditions in those states. Any material change in the current payment programs or regulatory, economic, public health,
environmental or competitive conditions in those states could have a disproportionate effect on our overall business results. In
addition, certain of our facilities and our operations in those states may be adversely impacted by wildfires, winter storms, and other
severe weather conditions, which adverse weather conditions may be more frequent and/or severe as the result of climate change.
Such wildfires, storms or other severe weather conditions may cause considerable disruptions in our operations due to property
damage or electrical outages experienced in affected areas by our personnel, payers, vendors and others.

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., Florida, Kentucky, Massachusetts and Virginia. We also receive Medicaid disproportionate
share hospital payments from certain states including, most significantly, Texas. 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 Patient Protection and Affordable Care Act (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
maintain 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 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. 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.

Continued increase in hospital based physician expenses will materially affect our costs and results of operations.

In our acute care segment, we have experienced a significant increase in hospital based physician related expenses (especially in
the areas of emergency room care and anesthesiology) which has had a material unfavorable impact on our results of operations during
2023. Increases in these physician related expenses could continue to have an unfavorable material impact on our results of operations
for the foreseeable future.

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. 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 such as 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. If these states increase mandatory
nurse-staffing ratios or additional states in which we operate adopt mandatory nurse-staffing ratios, such changes could significantly
affect labor costs and have an adverse impact on revenues if we are required to limit admissions in order to meet the required ratios.

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 or maintain high 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.

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.

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. 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, 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 continue to materially affect our financial
performance.

The healthcare industry is labor intensive and salaries, wages and benefits are subject to inflationary pressures, as are supplies

expense and other operating expenses. 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, in certain circumstances, limit our ability to increase
prices.

In addition, the nationwide shortage of nurses and other clinical staff and support personnel has been a significant operating

issue facing us and other healthcare providers. 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. In some
areas, the labor scarcity 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. This staffing shortage has required us to hire expensive temporary
personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel. At certain
facilities, particularly within our behavioral health care segment, we have been unable to fill all vacant positions and, consequently,

have been required to limit patient volumes. Many of these factors, which had a material unfavorable impact on our results of
operations during 2022, moderated to a certain degree during 2023.

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.

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 for the foreseeable future.
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. If general economic conditions, including inflation, deteriorate or remain volatile or uncertain for an extended
period of time, our liquidity and ability to repay our outstanding debt may be harmed and the trading price of our common stock could
decline. These factors may affect the availability, terms or timing on which we may obtain any additional funding. There can be no
assurance that we will be able to raise additional funds on terms acceptable to us, if at all.

The federal government had previously declared COVID-19 a national emergency, that declaration expired on May 11, 2023 at
which time the favorable payment provisions available to us during the declared national emergency ended. Many of the federal and
state legislative and regulatory measures allowing for flexibility in delivery of care and various financial supports for healthcare
providers were available only for the duration of the public health emergency (“PHE”). Most states have ended their state-level
emergency declarations. The end of the PHE status will result in the conclusion of those policies over various designated timeframes.
On December 29, 2022, the Consolidated Appropriations Act, 2023, was signed into law and phased out the enhanced federal medical
assistance percentage rate states have received during the COVID-19 PHE and fully eliminated the increase on December 31,
2023. States were also permitted to begin Medicaid eligibility redeterminations on March 31, 2023, which is anticipated to result in a
large decrease in Medicaid enrollment. We cannot predict whether the loss of any such favorable conditions available to providers
during the declared PHE will ultimately have a negative financial impact on us.

Compliance with the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Paycheck Protection
Program and Health Care Enhancement Act (“PPPHCE Act”).

The federal Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) created a $175 billion “Public Health and

Social Services Emergency Fund” to reimburse eligible health care providers for “health care related expenses or lost revenues that are
attributable to coronavirus” (the “PHSSEF”). The retention of funds from the PHSSEF is conditioned on eligibility and the acceptance
of terms and conditions, and other guidelines or requirements that may change from time to time, including with respect to
recordkeeping and repayment requirements. We received payments from the targeted distributions of the PHSSEF. 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. We received accelerated payments under this program during
2020, and returned early all of those funds during the first quarter of 2021. 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 U.S. Department of Health and Human Services (“HHS”) is actively auditing recipients of PHSSEF funds to ensure
compliance with the terms and conditions thereof. Failure to comply with such terms and conditions could result in recoupment, False
Claims Act liability, or other penalty.

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 payment reduction
suspension was extended through March 31, 2022, with a 1% payment reduction from then until June 30, 2022 and the full 2%
payment reduction thereafter. The most recent legislation extended these reductions through 2032. 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 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. 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 amended 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. 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.

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. Supreme Court which 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. On September 7, 2022,
the same Texas Federal District Court judge, in the case of Braidwood Management v. Becerra, ruled that the requirement that certain
health plans cover services with an “A” or “B” recommendation from the U.S. Preventive Services Task Force without cost sharing
violates the Appointments Clause of the U.S. Constitution and that the coverage of certain HIV prevention medication violates the
Religious Freedom Restoration Act. The government has appealed the decision to the U.S. Circuit Court of Appeals for the Fifth
Circuit. We are unable to predict the outcome of this litigation or its potential impact at this time. 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.

On March 11, 2021, President Biden signed the American Rescue Plan (“ARP”) into law. The ARP extends eligibility for

Legislation health insurance subsidies to people buying their own health coverage on the Marketplace who have household incomes
above 400% of the federal poverty level. ARP also increased the amount of financial assistance for people at lower incomes who were
already eligible under the Legislation. The Inflation Reduction Act of 2022 (“IRA”) was passed on August 16, 2022, which among
other things, allows for CMS to negotiate prices for certain single-source drugs and biologics reimbursed under Medicare Part B and
Part D, beginning with 10 high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part
B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. The IRA also continued the expanded subsidies for
individuals to obtain private health insurance under the Legislation through 2025. The effect of IRA on hospitals and the healthcare
industry in general is not yet known.

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 payer-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. On April 26, 2023,
CMS announced updated enforcement processes that requires a shortened timeline for coming into compliance when a violation has
been identified and the automatic imposition of a civil monetary penalties in certain circumstances of noncompliance. 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. HHS, the Department of Labor
and the Department of the Treasury have issued interim final rules that begin to implement the legislation. The rules have limited the
ability of our hospital-based physicians to receive payments for services at usually higher out-of-network rates in certain
circumstances, and, as a result, have caused us to increase subsidies to these physicians or to replace their services at a higher cost
level. On February 28, 2022, a district judge in the Eastern District of Texas invalidated portions of the rule governing aspects of the
Independent Dispute Resolution (“IDR”) process. In light of this decision, the government issued a final rule on August 19, 2022
eliminating the rebuttable presumption in favor of the qualifying payment amount (“QPA”) by the IDR entity and providing additional
factors the IDR entity should consider when choosing between two competing offers. On September 22, 2022, the Texas Medical
Association filed a lawsuit challenging the IDR process provided in the updated final rule and alleging that the final rule unlawfully
elevates the QPA above other factors the IDR entity must consider. On February 6, 2023, a federal judge vacated parts of the rule,

including provisions related to considerations of the QPA. The government's appeal of the district court's order is pending in the U.S.
Court of Appeals for the Fifth Circuit.

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. Aspects of United Kingdom data protection law, including the UK Data
Protection Act and legislation commonly referred to as the UK GDPR, remain unclear following the United Kingdom’s exit from the
European Union, including with respect to data transfers between the United Kingdom and other jurisdictions. We cannot fully predict
how the Data Protection Act, the UK GDPR, and other United Kingdom data protection laws or regulations may develop in the
medium to longer term nor the effects of divergent laws and guidance regarding data transfers.

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.

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.

Certain states in which we operate hospitals have certificates of need (“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 patient or other persons 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, and the networks and information
systems of third parties that we rely on, 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. Our systems, in turn, interface with and rely on third-party systems that we do not control,
including medical devices and other processes supporting the interoperability of healthcare infrastructures. Third parties to whom we
outsource certain of our functions, or with whom our systems interface and who may, in some instances, store our sensitive and
confidential data, are also subject to the risks outlined above and may not have or use controls effective to protect such information.
An attack, breach or other system disruption affecting any of these third parties could similarly harm our business.

On February 22, 2024, UnitedHealth Group Incorporated (“UnitedHealth”) indicated in a Form 8-K filing, that a suspected
nation-state associated cyber security threat actor had gained access to some of its Change Healthcare information technology systems.
In the Form 8-K filing, UnitedHealth indicated that it cannot estimate the duration or extent of the disruption. To the best of our
knowledge this did not directly have any impact on our information technology systems; however, as a result of the disruption to the
Change Healthcare systems, certain of our patient billing and collections processes have been disrupted which may cause delays in a
portion of our patient bills being received by commercial payers thereby delaying the related cash remittances to us. In addition, in
connection with our acute care segment commercial health insurer, certain functions, including certain administrative functions,
interface directly and/or indirectly with Change Healthcare systems. Such functions include, but are not limited to, eligibility and
enrollment, patient access, claims management and payments, and billings and collections. As of the filing date of this report on Form

10-K, the Change Healthcare systems remain inoperable. As we continue to assess the potential impact of this event, we have not
determined that this incident is reasonably likely to materially impact our cash flows, financial condition or results of operations.

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 or our third-party service providers’ 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 the event of a material breach or cyber-attack, the associated expenses and losses may exceed our current
insurance coverage for such events. In addition, some adverse consequences are not insurable, such as reputational harm and third-
party business interruption. 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.
Further, consumer confidence in the integrity, availability and confidentiality of information systems and information, including
patient personal information and critical operations data, in the healthcare industry generally could be impacted to the extent there are
successful cyberattacks at other healthcare services companies, which could have a material adverse effect on our business, financial
position or results of operations.

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 tornadoes, 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 tornadoes. 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, including
inflation and rising interest rates, 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, 2023, we had approximately $3.9 billion of goodwill recorded on our consolidated balance

sheets. 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.

Continuing Inflationary Pressures continue to increase our operating costs and we may not be able to pass on increases in costs
commensurate with these increases in costs.

We are experiencing inflationary pressures, primarily in personnel costs, and we anticipate continuing impacts on other cost
areas within the next twelve months. The extent of any future impacts from inflation on our business and our results of operations will
be dependent upon how long the elevated inflation levels persist and the extent to which the rate of inflation further increases, if at all,
neither of which we are able to predict. If elevated levels of inflation were to persist or if the rate of inflation were to accelerate, our
expenses could increase faster than anticipated and we may utilize our capital resources sooner than expected. Further, given the
complexities of the reimbursement landscape in which we operate, 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 in certain circumstances,
limit our ability to increase prices, commercial payers may be unwilling or unable to increase reimbursement rates commensurate with
the inflationary impacts on our costs.

The United Kingdom’s exit from the European Union will continue to have uncertain effects and could adversely impact our
business, results of operations and financial condition.

On January 31, 2020, the United Kingdom formally exited the European Union, which exit, commonly referred to as “Brexit”,

may cause disruptions to, and uncertainty surrounding, our business in the United Kingdom and elsewhere. The ultimate effects of the
Brexit are still difficult to predict as there remain ongoing significant legal and regulatory uncertainty as the United Kingdom
determines which European Union laws to replace or replicate and the resulting divergence between the national laws and regulations
in the United Kingdom and the European Union laws and regulations. Changes related to Brexit could subject us to heightened risks in
that region, including disruptions to trade and free movement of goods, services and people that may lead to increased costs of goods
imported into the United Kingdom, disruptions to our employees in the United Kingdom and the workforce of our business partners,
increased foreign exchange volatility with respect to the British pound and additional legal, political and economic uncertainty.
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. 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 increase in interest rates has substantially increased our borrowing costs
and reduced our ability to access the capital markets on favorable terms. Additional increases in interest rates and the effect on capital
markets could adversely affect our ability to carry out our strategy.

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, 2023, 20.5 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. During 2023, in conjunction with our stock
repurchase program, we have repurchased approximately 3.9 million shares at an aggregate cost of approximately $525 million.
As of December 31, 2023, we had an aggregate available repurchase authorization of approximately $423 million. Pursuant to our
stock repurchase 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.

Our ability to repurchase shares will depend upon, among other factors, our cash flows from operations, our available capital

and potential future capital requirements for strategic transactions, including acquisitions, debt service requirements, and investing in
our existing markets as well as our results of operations, financial condition, interest rates, our access to the capital markets and other
factors beyond our control that our Board of Directors may deem relevant. A suspension or elimination of our share repurchase could
have a negative effect on our stock price.

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 22, 2023, the shares of Class A and Class C Common Stock constituted 10.3% of the aggregate outstanding shares

of our Common Stock, had the right to elect five members of the Board of Directors and constituted 90.4% of our general voting
power as of that date. And as of that date, the shares of Class B and Class D Common Stock (excluding shares issuable upon exercise
of options) constituted 89.7% of the outstanding shares of our Common Stock, had the right to elect two members of the Board of
Directors and constituted 9.6% 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 1C. Cybersecurity

Cybersecurity risk management and strategy

Protecting our data, which includes information related to our patients, members, and customers, is a primary area of our

focus. Given the critical nature of this information, we have developed and implemented a robust cybersecurity risk management
program to assess, identify, and manage risks associated with cybersecurity threats as identified in Item 106(a) of Regulation S-K.
Cybersecurity is an important and integrated part of our risk management program that identifies, monitors and mitigates business,
operational and legal risks.

This program has a multi-tier risk management structure that includes regular reviews of laws, policies, vulnerabilities, and
resource levels to address risks facing our organization. Such risks include operational, intellectual property theft, fraud, risks that
have potential unfavorable impacts on our employees and/or patients, and violation of data privacy or security laws.

To address cybersecurity risks facing our organization, we have adopted a “continuous risk assessment” process. We engage a
third party to conduct a bi-annual National Institute of Technology-Cyber Security Framework assessment to determine the maturity
of our program and related controls. The results of that assessment are shared with management, which drives prioritization and
investment in resources to address those risks. Likewise, annual penetration tests occur to review the efficacy of our technical
controls, results which are reviewed by management and resolved in a timely manner. Other factors that feed into our risk
management practices are also operational events and incidents, which can lead to controls being reviewed and enhanced.

We also have a mature incident response process in place in the event a cybersecurity incident occurs. This process defines
roles, responsibilities and action plans designed to contain, eradicate, and restore systems in the event of a major disruption. Regularly,
we conduct tabletop exercises to simulate responses to an incident and implement any insight gained from those exercises to improve
our recovery practices. As part of these processes, we regularly engage with assessors, consultants, auditors, and other third parties to
review our cybersecurity program to help identify areas for continued focus, improvement, and compliance.

Third parties who provide services and solutions to our organization are also a source of cyber risk. Through a third-party risk
management program, we review risks associated with these third parties through contractual reviews, vendor risk assessments, and
continual risk reviews by monitoring the cybersecurity risk exposure these third parties pose and implementing remediation where
necessary.

Based on the information available as of the date of this Form 10-K, during our fiscal year 2023 and through the date of this filing,
we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents (as such terms are
defined in Item 106(a) of Regulation S-K), that have materially affected or are reasonably likely to materially affect us, including our
business strategy, results of operations or financial condition. For more information on risks to us from cybersecurity threats, see “Risks
Related to Information Technology - A cyber security incident could cause a violation of HIPAA, breach of patient or other persons
privacy, or other negative impacts.” under “Item 1A. Risk Factors.”

Governance of Cybersecurity

Cybersecurity is an integral part of our risk management program and is an area of focus for our Board of Directors and

management. The Audit Committee of our Board of Directors is responsible for the oversight of risks from cybersecurity
threats. Members of the Audit Committee receive updates, as warranted, including quarterly updates from our Chief Information
Security Officer (“CISO”) regarding matters of cybersecurity, such as key risks facing the organization, core topics, review of
incidents, as well as progress against key information security initiatives. Senior executive leadership also engage in ad-hoc
discussions with management on cybersecurity topics. In addition, our Board of Directors are provided with an annual report
regarding cybersecurity information and related topics.

Our cybersecurity risk management and strategy processes are overseen by our CISO along with leaders from our Information

Security, Compliance, Legal and Internal Auditing teams. Such individuals have an average of over 20 years of prior work experience
in various roles involving information technology, including security, auditing, compliance, systems and programming. These
individuals monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and
participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident
response plan.

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

Location

Centennial Hills Hospital Medical Center .............................................. Las Vegas, Nevada.................................

Fort Duncan Regional Medical Center ................................................... Eagle Pass, Texas ...................................
The George Washington University Hospital (17) ................................. Washington, D.C....................................
Henderson Hospital ................................................................................ Henderson, Nevada ................................

Corona Regional Medical Center ............................................................ Corona, California..................................
Desert View Hospital .............................................................................. Pahrump, Nevada ...................................
Doctors Hospital of Laredo (6) ............................................................... Laredo, Texas.........................................

Number of
Beds
Name of Facility
211
Aiken Regional Medical Centers (1)....................................................... Aiken, South Carolina............................
Aurora Pavilion Behavioral Health Services (1)........................... Aiken, South Carolina............................
62
ER at Sweetwater .......................................................................... North Augusta, South Carolina .............. —
339
ER at Valley Vista ........................................................................ North Las Vegas, Nevada ....................... —
ER at West Craig .......................................................................... Las Vegas, Nevada................................. —
259
25
183
Doctors Hospital Emergency Room Saunders .............................. Laredo, Texas......................................... —
Doctors Hospital Emergency Room South ................................... Laredo, Texas......................................... —
101
395
303
ER at Green Valley Ranch ............................................................ Henderson, Nevada ................................ —
120
ER at Fruitville .............................................................................. Sarasota, Florida..................................... —
295
−−
−−
124
ER at Damonte Ranch ................................................................... Reno, Nevada ......................................... —
ER at McCarran NW ..................................................................... Reno, Nevada ......................................... —
Northern Nevada Sierra Medical Center ................................................. Reno, Nevada .........................................
158
ER at Spanish Springs ................................................................... Sparks, Nevada....................................... —
405
Northwest Texas Healthcare System ...................................................... Amarillo, Texas......................................
Northwest Texas Healthcare System Behavioral Health .............. Amarillo, Texas......................................
90
Northwest Emergency at Town Square ......................................... Amarillo, Texas...................................... —
Northwest Emergency on Georgia ................................................ Amarillo, Texas...................................... —
184

Manatee Memorial Hospital ................................................................... Bradenton, Florida..................................
ER at Sun City Center ................................................................... Wimauma, Florida..................................
Manatee ER at Bayshore Gardens ................................................. Bradenton, Florida..................................
Northern Nevada Medical Center ........................................................... Sparks, Nevada.......................................

Lakewood Ranch Medical Center ........................................................... Lakewood Ranch, Florida ......................

Palmdale Regional Medical Center ......................................................... Palmdale, California...............................
South Texas Health System (2) ...............................................................
South Texas Health System Edinburg/South Texas Health
294
System Children’s (2) ................................................................... Edinburg, Texas .....................................
134
South Texas Health System Behavioral (2) .................................. McAllen, Texas ......................................
60
South Texas Health System Heart (2) ........................................... McAllen, Texas ......................................
South Texas Health System McAllen (1) (2) ................................ McAllen, Texas ......................................
431
South Texas Health System ER Alamo (2) ................................... Alamo, Texas ......................................... —
South Texas Health System ER McColl (2) ................................. Edinburg, Texas ..................................... —
South Texas Health System ER Mission (1) (2) ........................... Mission, Texas ....................................... —
South Texas Health System ER Monte Cristo (2)......................... Edinburg, Texas ..................................... —
South Texas Health System ER Ware Road (2)............................ McAllen, Texas ...................................... —
South Texas Health System ER Weslaco (1) (2) .......................... Weslaco, Texas ...................................... —

Real
Property
Ownership
Interest
Leased
Leased
Owned
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
Owned

Owned
Owned
Owned
Leased
Owned
Owned
Leased
Owned
Owned
Leased

Name of Facility
Southwest Healthcare System .................................................................

Location

...............................................................

Real
Property
Ownership
Interest

Number of
Beds

Southwest Healthcare Inland Valley Hospital ............................. Wildomar, California .............................
Southwest Healthcare Rancho Springs Hospital........................... Murrieta, California................................
Spring Valley Hospital Medical Center .................................................. Las Vegas, Nevada.................................

120
120
364
ER at Blue Diamond ..................................................................... Las Vegas, Nevada................................. —
66
Valley Health Specialty Hospital .................................................. Las Vegas, Nevada.................................
229
St. Mary’s Regional Medical Center ....................................................... Enid, Oklahoma......................................
490
Summerlin Hospital Medical Center ....................................................... Las Vegas, Nevada.................................
140
Temecula Valley Hospital ....................................................................... Temecula, California..............................
354
Texoma Medical Center .......................................................................... Denison, Texas.......................................
60
TMC Behavioral Health Center .................................................... Denison, Texas.......................................
ER at Anna .................................................................................... Anna, Texas ........................................... —
ER at Sherman .............................................................................. Sherman, Texas ...................................... —
306
Valley Hospital Medical Center .............................................................. Las Vegas, Nevada.................................
Elite Medical Center (ER) ............................................................ Las Vegas, Nevada.................................
0
ER at Desert Springs ..................................................................... Las Vegas, Nevada................................. —
ER at North Las Vegas ................................................................. North Las Vegas, Nevada ....................... —
235

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
ER at Westlake .............................................................................. Westlake, Florida .................................. — Leased

Wellington Regional Medical Center (1) ................................................ Wellington, Florida ................................

United States:

Inpatient Behavioral Health Care Facilities

Location

Name of Facility
Alabama Clinical Schools .......................................................................
Birmingham, Alabama............................
Alliance Health Center ............................................................................ Meridian, Mississippi..............................
Anchor Hospital ...................................................................................... Atlanta, Georgia......................................
Arbour Hospital ......................................................................................
Jamaica Plain, Massachusetts .................
Arrowhead Behavioral Health (14) ......................................................... Maumee, Ohio ........................................
Aspen Grove Behavioral Hospital .......................................................... Orem, Utah .............................................
Austin Oaks Hospital .............................................................................. Austin, Texas ..........................................
Beaumont Behavioral Health (16) ......................................................... Dearborn, Michigan ................................
Behavioral Hospital of Bellaire ............................................................... Houston, Texas .......................................
Belmont Pines Hospital........................................................................... Youngstown, Ohio ..................................
Benchmark Behavioral Health Systems .................................................. Woods Cross, Utah .................................
Rosemead, California..............................
BHC Alhambra Hospital .........................................................................
Sautee Nacoochee, Georgia ....................
Black Bear Lodge ...................................................................................
Bloomington, Indiana .............................
Bloomington Meadows Hospital ............................................................
Flowood, Mississippi ..............................
Brentwood Behavioral Healthcare ..........................................................
Brentwood Hospital ................................................................................
Shreveport, Louisiana .............................
The Bridgeway ........................................................................................ North Little Rock, Arkansas ...................
Louisville, Kentucky...............................
The Brook Hospital—Dupont .................................................................
Louisville, Kentucky...............................
The Brook Hospital—KMI .....................................................................
Fort Washington, Pennsylvania ..............
Brooke Glen Behavioral Hospital ...........................................................
Jacksonville, North Carolina ...................
Brynn Marr Hospital ...............................................................................
Phoenix, Arizona ....................................
Calvary Healing Center ...........................................................................
Temple, Texas.........................................
Canyon Creek Behavioral Health (1)......................................................
Chino, California ....................................
Canyon Ridge Hospital ...........................................................................
The Carolina Center for Behavioral Health ............................................ Greer, South Carolina .............................
Cedar Creek Hospital ..............................................................................
St. Johns, Michigan ................................
Cedar Grove Residential Treatment Center ............................................ Murfreesboro, Tennessee ........................
Portland, Oregon.....................................
Cedar Hills Hospital (7) ..........................................................................
Cedar Ridge Behavioral Hospital ........................................................... Oklahoma City, Oklahoma .....................
Cedar Ridge Residential Treatment Center ............................................. Oklahoma City, Oklahoma .....................
Bethany, Oklahoma ................................
Cedar Ridge Behavioral Hospital at Bethany .........................................

Real
Property
Ownership
Interest
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

Number of
Beds
80
214
122
138
48
80
80
137
124
127
94
115
115
78
121
260
127
88
110
146
102
68
102
157
156
54
45
98
60
56
56

United States:

Location

Name of Facility
Cedar Springs Hospital ...........................................................................
Colorado Springs, Colorado....................
Louisville, Colorado ...............................
Centennial Peaks Hospital ......................................................................
Center for Change ................................................................................... Orem, Utah .............................................
Central Florida Behavioral Hospital ....................................................... Orlando, Florida......................................
Chris Kyle Patriots Hospital ................................................................... Anchorage, Alaska..................................
Clarion, Pennsylvania .............................
Clarion Psychiatric Center ......................................................................
Clive, Iowa..............................................
Clive Behavioral Health (1) (11) ............................................................
Savannah, Georgia ..................................
Coastal Behavioral Health ......................................................................
Savannah, Georgia ..................................
Coastal Harbor Treatment Center ...........................................................
Columbus, Indiana ..................................
Columbus Behavioral Center for Children and Adolescents ..................
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 .......................................
Torrance, California................................
Del Amo Behavioral Health System .......................................................
Diamond Grove Center ...........................................................................
Louisville, Mississippi ............................
Dover Behavioral Health System ............................................................ Dover, Delaware .....................................
El Paso, Texas.........................................
El Paso Behavioral Health System ..........................................................
Emerald Coast Behavioral Hospital ........................................................
Panama City, Florida ..............................
Fairfax .....................................................................................................

Fairfax Behavioral Health ............................................................. Kirkland, Washington.............................
Fairfax Behavioral Health—Everett .............................................
Everett, Washington................................
Fairfax Behavioral Health—Monroe ............................................ Monroe, Washington ..............................
Fairmount Behavioral Health System .....................................................
Philadelphia, Pennsylvania .....................
Forest View Hospital .............................................................................. Grand Rapids, Michigan .........................
Fort Lauderdale, Florida .........................
Fort Lauderdale Behavioral Health Center .............................................
Foundations Behavioral Health ............................................................... Doylestown, Pennsylvania ......................
Foundations for Living ........................................................................... Mansfield, Ohio ......................................
St. Clairsville, Ohio ................................
Fox Run Center .......................................................................................
Fremont, California.................................
Fremont Hospital ....................................................................................
Friends Hospital (13) ..............................................................................
Philadelphia, Pennsylvania .....................
Fuller Hospital ........................................................................................ 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 ......................
Portsmouth, Virginia...............................
Harbour Point Behavioral Health Center ................................................
Hartgrove Behavioral Health System .....................................................
Chicago, Illinois......................................
Havenwyck Hospital ............................................................................... Auburn Hills, Michigan ..........................
Heartland Behavioral Health Services .................................................... Nevada, Missouri....................................
Sacramento, California ...........................
Heritage Oaks Hospital ...........................................................................
Heritage Oaks Patient Enrichment Center ..............................................
Sacramento, California ...........................
Hermitage Hall ........................................................................................ Nashville, Tennessee ..............................
Hickory Trail Hospital ............................................................................ DeSoto, Texas.........................................
Littleton, Colorado..................................
Highlands Behavioral Health System .....................................................
Birmingham, Alabama............................
Hill Crest Behavioral Health Services ....................................................
Holly Hill Hospital ..................................................................................
Raleigh, North Carolina ..........................
The Horsham Clinic ................................................................................ Ambler, Pennsylvania.............................
HRI Hospital ...........................................................................................
Brookline, Massachusetts .......................
The Hughes Center ................................................................................. Danville, Virginia ...................................
Spokane, Washington .............................
Inland Northwest Behavioral Health (9) .................................................
Boise, Idaho ............................................
Intermountain Hospital ...........................................................................

Real
Property
Ownership
Interest
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

Number of
Beds
110
104
58
174
36
112
100
50
145
57
148
197
80
97
108
128
166
57
104
166
86

157
30
34
239
108
182
122
84
100
148
219
109
88
54
120
28
109
120
186
160
243
121
125
16
111
86
86
221
296
206
66
96
100
155

Owned
Leased
Leased
Owned
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

United States:

Location

Name of Facility
Kempsville Center of Behavioral Health ................................................ Norfolk, Virginia ....................................
KeyStone Center ..................................................................................... Wallingford, Pennsylvania ......................
Kingwood Pines Hospital ....................................................................... Kingwood, Texas ....................................
La Amistad Behavioral Health Services ................................................. Maitland, Florida ....................................
Lakeside Behavioral Health System ....................................................... Memphis, Tennessee...............................
Lancaster, Pennsylvania ..........................
Lancaster Behavioral Health Hospital (8) ...............................................
Laurel Heights Hospital .......................................................................... Atlanta, Georgia......................................
Laurel Oaks Behavioral Health Center ................................................... Dothan, Alabama ....................................
San Antonio, Texas.................................
Laurel Ridge Treatment Center ...............................................................
Stauton, Virginia.....................................
Liberty Point Behavioral Healthcare .......................................................
Lighthouse Behavioral Health Hospital ..................................................
Conway, South Carolina .........................
Lighthouse Care Center of Augusta ........................................................ Augusta, Georgia ....................................
Springfield, Illinois .................................
Lincoln Prairie Behavioral Health Center ...............................................
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 ..........................................
Las Cruces, New Mexico ........................
Mesilla Valley Hospital ..........................................................................
Palm Springs, California .........................
Michael’s House .....................................................................................
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 Bragaw .................................................................................. Anchorage, Alaska..................................
North Star DeBarr Residential Treatment Center ................................... Anchorage, Alaska..................................
North Star Hospital ................................................................................. Anchorage, Alaska..................................
North Star Palmer Residential Treatment Center ....................................
Palmer, Alaska........................................
Oak Plains Academy ............................................................................... Ashland City, Tennessee .........................
Okaloosa Youth Academy ......................................................................
Crestview, Florida...................................
Old Vineyard Behavioral Health Services .............................................. Winston-Salem, North Carolina ..............
Palmetto Lowcountry Behavioral Health ................................................ North Charleston, South Carolina ...........
Summerville, South Carolina ..................
Palmetto Summerville Behavioral Health ...............................................
Titusville, FL ..........................................
Palm Point Behavioral Health .................................................................
Bradenton, Florida ..................................
Palm Shores Behavioral Health Center ...................................................
Palo Verde Behavioral Health.................................................................
Tucson, Arizona......................................
Parkwood Behavioral Health System ..................................................... Olive Branch, Mississippi .......................
Champaign, Illinois.................................
The Pavilion Behavioral Health System .................................................
Peachford Hospital .................................................................................. Atlanta, Georgia......................................
Pembroke, Massachusetts .......................
Pembroke Hospital ..................................................................................
Little Rock, Arkansas .............................
Pinnacle Pointe Behavioral Healthcare System ......................................
Petersburg, Virginia ................................
Poplar Springs Hospital ..........................................................................
Fargo, North Dakota ...............................
Prairie St John’s ......................................................................................
Eden Prairie, Minnesota ..........................
PRIDE Institute .......................................................................................
Provo Canyon School .............................................................................
Provo, Utah .............................................
Psychiatric Institute of Washington ........................................................ Washington, D.C.....................................
Quail Run Behavioral Health ..................................................................
Phoenix, Arizona ....................................
The Recovery Center .............................................................................. Wichita Falls, Texas ...............................
Lexington, Kentucky ..............................
The Ridge Behavioral Health System .....................................................
Bowling Green, Kentucky ......................
Rivendell Behavioral Health Hospital ....................................................
Benton, Arkansas ....................................
Rivendell Behavioral Health Services of Arkansas ................................
River Crest Hospital ................................................................................
San Angelo, Texas ..................................
River Oaks Hospital ................................................................................ Harahan, Louisiana .................................

Real
Property
Ownership
Interest
Owned
Owned
Owned
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
Owned
Owned
Leased
Owned
Owned
Leased
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned

Number of
Beds
106
153
116
85
373
126
124
118
330
58
105
82
97
140
59
32
119
134
120
110
83
74
134
90
115
132
127
30
30
74
30
20
72
164
108
64
74
65
84
148
122
246
120
127
208
132
42
250
130
116
34
110
125
80
80
126

United States:

Location

Name of Facility
River Park Hospital ................................................................................. Huntington, West Virginia ......................
Jacksonville, Florida ...............................
River Point Behavioral Health ................................................................
River Vista Behavioral Health ................................................................ Madera, California ..................................
Riveredge Hospital .................................................................................
Forest Park, Illinois.................................
Rockford Center ...................................................................................... Newark, Delaware ..................................
Franklin, Tennessee ................................
Rolling Hills Hospital .............................................................................
Shippensburg, Pennsylvania ...................
Roxbury Treatment Center .....................................................................
Saint Simons Island, Georgia ..................
Saint Simons By-The-Sea ......................................................................
Salt Lake City, Utah................................
Salt Lake Behavioral Health ...................................................................
San Marcos, Texas..................................
San Marcos Treatment Center .................................................................
Jupiter, Florida........................................
SandyPines Residential Treatment Center .............................................
Sierra Vista Hospital ...............................................................................
Sacramento, California ...........................
Skywood Recovery ................................................................................. Augusta, Michigan..................................
Cape Girardeau, Missouri .......................
Southeast Behavioral Health (15) ...........................................................
Las Vegas, Nevada .................................
Spring Mountain Sahara .........................................................................
Las Vegas, Nevada .................................
Spring Mountain Treatment Center ........................................................
Springwoods Behavioral Health .............................................................
Fayetteville, Arkansas.............................
Stonington Institute ................................................................................. North Stonington, Connecticut ...............
Streamwood, Illinois...............................
Streamwood Behavioral Healthcare System ...........................................
Summit, New Jersey ...............................
Summit Oaks Hospital ............................................................................
Lawrenceville, Georgia...........................
SummitRidge Hospital ............................................................................
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................................
Phoenix, Arizona ....................................
Valley Hospital .......................................................................................
Via Linda Behavioral Hospital (12) ........................................................
Scottsdale, Arizona .................................
The Vines Hospital ................................................................................. Ocala, Florida .........................................
Virginia Beach Psychiatric Center .......................................................... Virginia Beach, Virginia .........................
Jacksonville, Florida ...............................
Wekiva Springs Center ...........................................................................
Wellstone Regional Hospital ..................................................................
Jeffersonville, Indiana.............................
West Oaks Hospital ................................................................................ Houston, Texas .......................................
Reno, Nevada..........................................
Willow Springs Center ............................................................................
Windmoor Healthcare of Clearwater ......................................................
Clearwater, Florida .................................
Windsor Laurelwood Center for Behavioral Medicine........................... Willoughby, Ohio ...................................
Casper, Wyoming ...................................
Wyoming Behavioral Institute ................................................................

United Kingdom:

Location

Name of Facility
Adarna House ......................................................................................... Bradford, UK ..........................................
Adele Cottages ........................................................................................ Rainworth, UK........................................
Amberwood Lodge ................................................................................ Dorset, UK ..............................................
Ashbrook ................................................................................................. Birmingham, UK.....................................
Ashfield House ...................................................................................... Huddersfield, UK ....................................
Beacon House Lower ............................................................................. Bradford, UK ..........................................
Beacon House Upper ............................................................................. Bradford, UK ..........................................
Beckly .................................................................................................... Halifax, UK.............................................
Beeches ................................................................................................... Retford, UK.............................................

Real
Property
Ownership
Interest
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
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Owned

Number of
Beds
187
84
128
210
148
130
112
101
118
265
149
171
100
102
30
110
80
64
178
126
106
60
137
129
64
79
112
104
140
122
120
98
100
120
100
176
116
144
160
129

Real
Property
Ownership
Interest
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned

Number of
Beds
9
4
9
16
6
8
8
12
12

United Kingdom:

Location

Name of Facility
Birches .................................................................................................... Newark, UK ............................................
Broughton House .................................................................................... Lincolnshire, UK.....................................
Broughton Lodge .................................................................................... Macclesfield, UK ....................................
Chaseways .............................................................................................. Sawbridgeworth, UK ..............................
Cherry Tree House .................................................................................. Mansfield Woodhouse, UK .....................
Conifers ................................................................................................... Derby, UK...............................................
Cygnet Acer ........................................................................................... Chesterfield, UK .....................................
Cygnet Acer 2 ......................................................................................... Chesterfield, UK .....................................
Cygnet Alders Clinic .............................................................................. Gloucester, UK .......................................
Cygnet Appletree ................................................................................... Meadowfield, UK ...................................
Cygnet Aspen Clinic .............................................................................. Doncaster, UK.........................................
Cygnet Aspen House ............................................................................. Doncaster, UK.........................................
Cygnet Bostall House ............................................................................ Abbey Wood, UK ...................................
Cygnet Brunel ......................................................................................... Bristol, 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—Maidstone .................................................................. Maidstone, UK........................................
Cygnet Hospital—Sheffield .................................................................... Sheffield, UK ..........................................
Cygnet Hospital—Sherwood .................................................................. Mansfield, UK.........................................
Cygnet Hospital—Stevenage .................................................................. Stevenage, UK ........................................
Cygnet Hospital—Taunton ..................................................................... Taunton, UK ...........................................
Cygnet Hospital—Woking ...................................................................... Woking, UK............................................
Cygnet Hospital—Wyke ......................................................................... Bradford, UK ..........................................
Cygnet Hospital Colchester - Highwoods ............................................... Colchester, UK........................................
Cygnet Hospital Colchester - Larch Court .............................................. Essex, UK ...............................................
Cygnet Hospital Colchester - Oak Court ................................................ Essex, UK ...............................................
Cygnet Hospital Colchester - Ramsey .................................................... Colchester, 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 ..............................................

Real
Property
Ownership
Interest
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
Owned
Owned
Owned
Owned
Owned
Owned

Number of
Beds
6
34
20
6
6
7
14
14
20
26
16
20
6
32
24
16
57
28
24
10
34
8
20
62
63
32
187
25
50
26
39
36
60
27
72
65
57
44
88
57
62
52
20
4
12
21
57
8
25
15
17
24
31
20
20
30

United Kingdom:

Location

Name of Facility
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.....................................
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 ............................................
Ipswich, UK ............................................
Fairways ..................................................................................................
The Fields ............................................................................................... Sheffield, UK ..........................................
Gables ..................................................................................................... Essex, UK ...............................................
Gledcliffe Road ....................................................................................... Huddersfield, UK ....................................
Gledholt .................................................................................................. Huddersfield, UK ....................................
Gledholt Mews ........................................................................................ Huddersfield, UK ....................................
Glyn House ............................................................................................. Stoke on Trent, UK .................................
Hansa Lodge ........................................................................................... Rainham, 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 ....................................
Lindsay House ....................................................................................... Dundee, UK ............................................
Longfield House ..................................................................................... Bradford, UK ..........................................
Lowry House........................................................................................... Hyde, UK ................................................
Malborn & Teroan ................................................................................. Mansfield, UK.........................................
Marion House ......................................................................................... Derby, UK...............................................
Meadows Mews ...................................................................................... Tipton, UK ..............................................
Morgan House ......................................................................................... Stoke on Trent, UK .................................
Nightingale ............................................................................................. Dorset, UK ..............................................
Norcott House ......................................................................................... Liversedge, UK .......................................
Norcott Lodge ......................................................................................... Liversedge, 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 .....................
Ranaich House ........................................................................................ Dunblane, UK .........................................

Real
Property
Ownership
Interest
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
Leased
Owned
Owned
Owned
Owned
Owned
Owned

Number of
Beds
35
22
25
20
14
30
17
32
23
12
22
26
10
10
26
13
12
10
5
8
12
8
8
54
7
6
9
21
5
5
10
19
11
7
8
3
8
2
9
12
6
5
10
5
10
11
9
8
19
7
5
10
4
13
7
14

United Kingdom:

Location

Name of Facility
Redlands ................................................................................................. Darlington, UK .......................................
Rhyd Alyn ............................................................................................... Flintshire, UK .........................................
River View .............................................................................................. Darlington, 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 .........................................
Trinity Lodge .......................................................................................... Lockerbie, UK.........................................
Tupwood Gate Nursing Home ................................................................ Caterham, UK .........................................
Ty Alarch ................................................................................................ Merthyr Tydfil ........................................
1Vincent Court ........................................................................................ Lancashire, UK .......................................
Walkern Lodge ....................................................................................... Stevenage, UK ........................................
Willow House ......................................................................................... Birmingham, UK.....................................
Woodcross & Turls Hill ......................................................................... Wolverhampton, UK...............................
Woodrow House ..................................................................................... Stockport, UK .........................................

Real
Property
Ownership
Interest
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
5
6
4
4
9
9
6
4
51
10
9
7
14
8
13
6
33
6
5
4
8
8
9

Puerto Rico:

Name of Facility
First Hospital Panamericano—Cidra ...................................................... Cidra, Puerto Rico..................................
First Hospital Panamericano—Ponce ..................................................... Ponce, Puerto Rico .................................
First Hospital Panamericano—San Juan ................................................. San Juan, Puerto Rico ............................

Location

Real
Property
Ownership
Interest
Owned
Owned
Owned

Number of
Beds
165
30
45

Outpatient Behavioral Health Care Facilities

United States:

Real
Property
Ownership
Interest
Name of Facility
Arbour Counseling Services ................................................................... Rockland, Massachusetts ....................................... Owned
The Canyon at Santa Monica .................................................................. Los Angeles, California ......................................... Leased
Foundations San Francisco ..................................................................... San Francisco, California ....................................... Leased
Michael’s House Outpatient ................................................................... Palm Springs, California ........................................ Leased
The Pointe Outpatient Behavioral Health Services ................................. Little Rock, Arkansas............................................. Leased
Saint Louis Behavioral Medicine Institute .............................................. St. Louis, Missouri ................................................. Owned
Skywood Outpatient ............................................................................... Bingham Farms, Michigan ..................................... Leased
Talbott Recovery ..................................................................................... Atlanta, Georgia ..................................................... Owned

Location

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

Cancer Care Institute of Carolina ........................................................ Aiken, South Carolina ...........................................
Cedar Hill Urgent Care ....................................................................... Washington, DC ....................................................
Cornerstone Regional Hospital (3) ..................................................... Edinburg, Texas.....................................................
Las Vegas Institute for Advanced Surgery ......................................... Las Vegas, NV ......................................................
Manatee Diagnostic Center ................................................................. Bradenton, Florida.................................................
Palms Westside Clinic ASC (5) .......................................................... Royal Palm Beach, Florida....................................
Personalized Radiation Oncology (18) ............................................... Reno, Nevada ........................................................
Quail Surgical and Pain Management Center (10) .............................. Reno, Nevada ........................................................
Riverside Medical Clinic Surgery Center ........................................... Riverside, California..............................................
The Surgery Center of Aiken .............................................................. Aiken, South Carolina ...........................................
Temecula Valley Day Surgery (4) ...................................................... Murrieta, California...............................................

Real
Property
Ownership
Interest

Owned
Owned

Real
Property
Ownership
Interest

Owned
Leased
Leased
Leased
Leased
Leased
Leased
Leased
Leased
Owned
Leased

(1) Real property leased from Universal Health Realty Income Trust.
(2) These entities are consolidated under one license operating as the South Texas Health System.
(3) We manage and own a noncontrolling interest of approximately 50% in the entity that operates this facility.
(4) We manage and own a majority interest in an LLC that owns and operates this center.
(5) We own a noncontrolling ownership interest of approximately 50% in the entity that operates this facility that is managed by a

third-party.

(6) We hold an 93% ownership interest in this facility through both general and limited partnership interests. The remaining 7%

ownership interest is held by unaffiliated third parties.

(7) Land of this facility is leased.
(8) 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.

(9) We manage and hold an 80% ownership interest in this facility. The remaining 20% ownership interest is held by an unaffiliated

third party.

(10) We hold a 51% ownership interest in this facility. The remaining 49% ownership interest is held by unaffiliated third parties.
(11) We manage and hold a 52% ownership interest in this facility. The remaining 48% ownership interest is held by an unaffiliated

third party.

(12) We manage and hold a 51% ownership interest in this facility. The remaining 49% ownership interest is held by an unaffiliated

third party.

(13) We manage and hold a 80% ownership interest in this facility. The remaining 20% ownership interest is held by an unaffiliated

third party.

(14) We manage and hold a 70% ownership interest in this facility. The remaining 30% ownership interest is held by an unaffiliated

third party.

(15) We manage and hold a 75% ownership interest in this facility. The remaining 25% ownership interest is held by an unaffiliated

third party.

(16) We manage and hold a 74% ownership interest in this facility. The remaining 26% ownership interest is held by an unaffiliated

third party.

(17) The land of this facility is leased pursuant to the terms of a lease that is scheduled to expire in August, 2082. The lease contains

one, twenty-five year renewal option.

(18) We own a noncontrolling ownership interest of 30% in the entity that operates this facility that is managed by a third-party.

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 $107 million in 2023, $104 million in 2022 and $93 million in 2021.

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.

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.

PART II

The number of stockholders of record as of January 31, 2024, were as follows:

Class A Common
Class B Common
Class C Common
Class D Common

17
656
1
81

Stock Repurchase Programs

As of January 1, 2023, we had an aggregate available repurchase authorization of $947.37 million under 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 2023, we have repurchased approximately 1.13 million shares at an aggregate
cost of approximately $157.32 million (approximately $139.28 per share) pursuant to the terms of our stock repurchase program. In
addition, during the three-month period ended December 31, 2023, 32,019 shares were repurchased in connection with income tax
withholding obligations resulting from stock-based compensation programs. For the year ended December 31, 2023, we have
repurchased approximately 3.86 million shares at an aggregate cost of approximately $524.48 million (approximately $136.05 per
share). In addition, for the year ended December 31, 2023, 164,649 shares were repurchased in connection with income tax
withholding obligations resulting from stock-based compensation programs. As of December 31, 2023, we had an aggregate available
repurchase authorization of $422.88 million pursuant to our stock repurchase program.

During the period of October 1, 2023 through December 31, 2023, we repurchased the following shares:

Additional
Dollars
Authorized
For
Repurchase
(in
thousands)

October, 2023
November, 2023
December, 2023
Total October through
December

—
—
—

—

Total
number of
shares
purchased (1)
388
681,009
480,746

1,162,143

Total
number of
shares
cancelled

Average
price paid
per share
for forfeited
restricted
shares

40
46
543

629

$
$
$

0.01
0.01
0.01

0.01

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)

— $
$
$

679,495
450,000

— $
131.47 $
151.08 $

— $
$
$

89,334
67,987

580,204
490,870
422,883

1,129,495

139.28 $

157,321

(1)

(2)

Includes shares that were repurchased in connection with income tax withholding obligations resulting from the exercise
of stock options and the vesting of restricted stock grants. Also includes 40, 46 and 543 restricted shares that were
forfeited and canceled by former employees pursuant to the terms of our restricted stock purchase plan during October,
November and December, 2023, respectively.

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

During the year ended December 31, 2023 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, 2023.
The graph assumes an investment of $100 made in our common stock and each Index as of January 1, 2019 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., and Tenet Healthcare Corporation.

Company Name / Index
Universal Health Services, Inc.
S&P 500 Index
Peer Group

ITEM 6.

[RESERVED]

2018 Base
100.00
$
100.00
$
100.00
$

2019
123.62
131.49
124.34

$
$
$

2020
118.67
155.68
141.81

$
$
$

2022

2021
112.54 $ 123.09
200.37 $ 164.08
224.60 $ 207.65

$
$
$

2023
133.96
207.21
237.61

$
$
$

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, 2023, as compared to the year ended December 31, 2022. For discussion of our
result of operations and changes in our financial condition for the year ended December 31, 2022 as compared to the year ended
December 31, 2021, please refer to Part II, Item 7. 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, 2022, as filed with the Securities and Exchange
Commission on February 27, 2023.

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 27, 2024, we owned and/or operated 360 inpatient facilities and 48 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.:



27 inpatient acute care hospitals;

27 free-standing emergency departments, and;

10 outpatient centers & 1 surgical hospital.

Behavioral health care facilities (333 inpatient facilities and 10 outpatient facilities):

Located in the U.S.:


186 inpatient behavioral health care facilities, and;



8 outpatient behavioral health care facilities.

Located in the U.K.:


144 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 57% of our

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, 2023, 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 or 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, or the negative of those words and 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 are difficult to predict and many of which are outside of our control. Many factors, including those set forth herein in Item 1A.
Risk Factors, and other important factors disclosed in this report, and from time to time in our other filings with the SEC, could cause
actual performance or results to differ materially from those expressed in the statements. Such factors include, among other things, the
following:



in our acute care segment, we have experienced a significant increase in hospital based physician related expenses (especially
in the areas of emergency room care and anesthesiology) which has had a material unfavorable impact on our results of
operations during 2023. Although we have implemented various initiatives to mitigate the increased expense, to the degree
possible, increases in these physician related expenses could continue to have an unfavorable material impact on our results of
operations for the foreseeable future;

the healthcare industry is labor intensive and salaries, wages and benefits are subject to inflationary pressures, as are supplies
expense and other operating expenses. In addition, the nationwide shortage of nurses and other clinical staff and support
personnel experienced by healthcare providers in the past has been a significant operating issue facing us and other healthcare
providers. In the past, the staffing shortage has, at times, required us to hire expensive temporary personnel and/or enhance
wages and benefits to recruit and retain nurses and other clinical staff and support personnel. At certain facilities, particularly
within our behavioral health care segment, there have been occasions when we were unable to fill all vacant positions and,
consequently, we were required to limit patient volumes. The staffing shortage has required us to enhance wages and benefits
to recruit and retain nurses and other clinical staff and support personnel or required us to hire expensive temporary personnel.
We have also experienced general inflationary cost increases related to medical supplies as well as certain of our other
operating expenses. Many of these factors, which had a material unfavorable impact on our results of operations during 2022,
moderated to a certain degree during 2023;

in 2021, the rate of inflation in the United States began to increase and has since risen to levels not experienced in over 40
years. We are experiencing inflationary pressures, primarily in personnel costs, and we anticipate continuing impacts on other
cost areas within the next twelve months. The extent of any future impacts from inflation on our business and our results of
operations will be dependent upon how long the elevated inflation levels persist and the extent to which the rate of inflation
further increases, if at all, neither of which we are able to predict. If elevated levels of inflation were to persist or if the rate of
inflation were to accelerate, our expenses could increase faster than anticipated and we may utilize our capital resources sooner
than expected. Further, given the complexities of the reimbursement landscape in which we operate, 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 in certain circumstances, limit our ability to increase prices. In addition, although we have been
requesting and negotiating increased rates from commercial payers to defray our increased cost of providing patient care,
commercial payers may be unwilling or unable to increase reimbursement rates commensurate with the inflationary impacts on
our costs;

 The rapid increase in interest rates have increased our interest expense significantly increasing our expenses and reducing our
free cash flow and our ability to access the capital markets on favorable terms. As such, the effects of inflation and increased
borrowing rates may adversely impact our results of operations, financial condition and cash flows;

 on January 19, 2024, President Biden signed into law H.R. 2872 which provides fiscal year 2024 appropriations to federal

agencies for continuing projects and activities funded in four of the 12 annual appropriations bills through March 1, 2024. The
remaining eight annual appropriations bills are funded through March 8, 2024. We cannot predict whether or not there will be
future legislation averting a federal government shutdown, however, our operating cash flows and results of operations could
be materially unfavorably impacted by a federal government shutdown;



in January 2020, the Centers for Disease Control and Prevention confirmed the spread of COVID-19 to the United States and,
in March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. Although the federal
government had previously declared COVID-19 a national emergency, that declaration expired on May 11, 2023 at which time
the favorable payment provisions available to us during the declared national emergency ended. Many of the federal and state
legislative and regulatory measures allowing for flexibility in delivery of care and various financial supports for healthcare

providers were available only for the duration of the public health emergency (“PHE”). Most states have ended their state-level
emergency declarations. The end of the PHE status will result in the conclusion of those policies over various designated
timeframes. We cannot predict whether the loss of any such favorable conditions available to providers during the declared
PHE will ultimately have a negative financial impact on us. The federal Coronavirus Aid, Relief, and Economic Security Act
(the “CARES Act”) created a $175 billion “Public Health and Social Services Emergency Fund” to reimburse eligible health
care providers for “health care related expenses or lost revenues that are attributable to coronavirus” (the “PHSSEF”). We
received payments from the 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. We received accelerated payments under this program during
2020, and returned early all of those funds during the first quarter of 2021, as disclosed herein. Providers receiving PHSSEF
payments were required to sign terms and conditions regarding utilization of the payments. 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. On December 29, 2022, the Consolidated
Appropriations Act, 2023, was signed into law and phases out the enhanced federal medical assistance percentage rate states
have received during the COVID-19 PHE and fully eliminates the increase on December 31, 2023. States were also permitted
to begin Medicaid eligibility redeterminations on March 31, 2023, which is anticipated to result in a large decrease in Medicaid
enrollment. The impact of the COVID-19 pandemic, which began in March, 2020, has had a material effect on our operations
and financial results, at various times, since that time. We cannot predict if there will be future disruptions caused by the
COVID-19 pandemic;

 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 Patient Protection and Affordable Care Act, as amended by the Health and Education
Reconciliation Act (collectively, the "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 Inflation Reduction Act of 2022 (“IRA”) was passed on August 16,
2022, which among other things, allows for CMS to negotiate prices for certain single-source drugs reimbursed under
Medicare Part B and Part D. The American Rescue Plan Act’s expansion of subsidies to purchase coverage through a
Legislation exchange, which the IRA continued through 2025, is anticipated to increase exchange enrollment.



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. On September 7, 2022, the Legislation faced its most recent challenge when a Texas Federal District Court
judge, in the case of Braidwood Management v. Becerra, ruled that a requirement that certain health plans cover services
without cost sharing violates the Appointments Clause of the U.S. Constitution and that the coverage of certain HIV prevention
medication violates the Religious Freedom Restoration Act. The government has appealed the decision to the U.S. Circuit
Court of Appeals for the Fifth Circuit. Any future efforts to challenge, replace or replace the Legislation or expand or
substantially amend its provision is unknown. See below in Sources of Revenues 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 payer-specific negotiated rates, minimum negotiated rates, maximum negotiated rates, and
discounted cash rates, 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. On April 26, 2023, CMS
announced updated enforcement processes that requires a shortened timeline for coming into compliance when a violation has
been identified and the automatic imposition of a civil monetary penalties in certain circumstances of noncompliance;

 as part of the Consolidated Appropriations Act of 2021 (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. HHS, the Department of Labor and the Department of the Treasury have
issued interim final rules, which begin to implement the legislation. The rules have limited the ability of our hospital-based
physicians to receive payments for services at usually higher out-of-network rates in certain circumstances, and, as a result,
have caused us to increase subsidies to these physicians or to replace their services at a higher cost level. On February 28,
2022, a district judge in the Eastern District of Texas invalidated portions of the rule governing aspects of the Independent
Dispute Resolution (“IDR”) process. In light of this decision, the government issued a final rule on August 19, 2022
eliminating the rebuttable presumption in favor of the qualifying payment amount (“QPA”) by the IDR entity and providing
additional factors the IDR entity should consider when choosing between two competing offers. On September 22, 2022, the
Texas Medical Association filed a lawsuit challenging the IDR process provided in the updated final rule and alleging that the
final rule unlawfully elevates the QPA above other factors the IDR entity must consider. On February 6, 2023, a federal judge
vacated parts of the rule, including provisions related to considerations of the QPA. The government's appeal of the district
court's order is pending in the U.S. Court of Appeals for the Fifth Circuit;

 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 8 to the Consolidated Financial Statements - Commitments
and Contingencies and the effects of adverse publicity relating to such matters;

 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 and related expenses resulting from a shortage of nurses, physicians 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, or any third-party security systems that we rely on, 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 violations of applicable privacy and other laws, significant penalties or fines, litigation,
loss of customers, significant damage to our reputation and business, and other liability or losses. We may also incur additional
costs related to cybersecurity risk management and remediation. There can be no assurance that we or our service providers, if
applicable, will not suffer losses relating to cyber-attacks or other information security breaches in the future or that our
insurance coverage will be adequate to cover all the costs resulting from such events;



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;

 our business, results of operations, financial condition, or stock price may be adversely affected if we are not able to achieve
our environmental, social and governance (“ESG”) goals or comply with emerging ESG regulations, or otherwise meet the
expectations of our stakeholders with respect to ESG matters;

 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, Massachusetts
and Virginia. We also receive Medicaid disproportionate share hospital ("DSH") 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;

 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 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. The most recent legislation extended these reductions through 2032. 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 on our results of operations;

 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;

 we have exposure to fluctuations in foreign currency exchange rates, primarily the pound sterling. We have international

subsidiaries that operate in the United Kingdom. We routinely hedge our exposures to foreign currencies with certain financial
institutions in an effort to minimize the impact of certain currency exchange rate fluctuations, but these hedges may be
inadequate to protect us from currency exchange rate fluctuations. To the extent that these hedges are inadequate, our reported
financial results or the way we conduct our business could be adversely affected. Furthermore, if a financial counterparty to our
hedges experiences financial difficulties or is otherwise unable to honor the terms of the foreign currency hedge, we may
experience material financial losses;



the impact of a shift of care from inpatient to lower cost outpatient settings and controls designed to reduce inpatient services
on our revenue, 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 Consolidated 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 2023, 2022 or 2021. 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, 2023,
would change our after-tax net income by approximately $2 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 2023 or 2022 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, 2023 and 2022:

Charity care
Uninsured discounts
Total uncompensated care

(dollar amounts in thousands)

2023

2022

Amount

843,449
1,792,493
$ 2,635,942

Amount

32% $
786,962
68% 1,474,933
100% $ 2,261,895

35%
65%
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
Estimated cost of providing uncompensated care

(amounts in thousands)

2023

83,383 $
177,206
260,589 $

2022

85,434
160,122
245,556

Self-Insured/Other Insurance Risks: We provide for self-insured risks, primarily 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 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

self-insured general and professional liability and workers’ compensation liability.

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. Please see additional disclosure
below in Provision for Asset Impairments.

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, 2023 which indicated no impairment of goodwill. There was no

goodwill impairment during 2022.

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 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 and foreign net
operating loss carry-forwards, tax credits, and interest deduction limitations.

Due to recent guidance and enacted laws surrounding the global 15% minimum tax rate that will be effective after 2024 from
the Organization for Economic Co-operation and Development ("OECD") as well as jurisdictions that we operate in, we anticipate
adverse effects to our provision for income taxes as well as cash taxes. We do not expect these adverse effects to be material and will
continue to monitor changes in tax policies and laws issued by the OECD and jurisdictions that we operate in.

We operate in multiple jurisdictions with varying tax laws. We are subject to audits by any of these taxing authorities. We

believe that adequate accruals have been provided for federal, foreign and state taxes.

See Note 6 to the Consolidated Financial Statements-Income Taxes for additional disclosure of our effective tax rates.

Recent Accounting Pronouncements: For a summary of recent accounting pronouncements, please see Note 1 to the
Consolidated Financial Statements-Business and Summary of Significant Accounting Standards as included in this Report on Form
10-K for the year ended December 31, 2023.

Results of Operations

Clinical Staffing, Physician Related Expenses and Effects of Inflation:

The healthcare industry is labor intensive and salaries, wages and benefits are subject to inflationary pressures, as are supplies

expense and other operating expenses. In addition, the nationwide shortage of nurses and other clinical staff and support personnel
experienced by healthcare providers in the past has been a significant operating issue facing us and other healthcare providers. In some
areas, the labor scarcity has strained our resources and staff, which has required us to utilize higher-cost temporary labor and pay
premiums above standard compensation for essential workers. In the past, the staffing shortage has, at times, required us to hire
expensive temporary personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support
personnel. At certain facilities, particularly within our behavioral health care segment, there have been occasions when we were
unable to fill all vacant positions and, consequently, we were required to limit patient volumes. The staffing shortage has required us
to enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel or required us to hire
expensive temporary personnel. We have also experienced general inflationary cost increases related to medical supplies as well as
certain of our other operating expenses. Many of these factors, which had a material unfavorable impact on our results of operations
during 2022, moderated to a certain degree during 2023.

In our acute care segment, we have experienced a significant increase in hospital-based physician related expenses (especially in
the areas of emergency room care and anesthesiology) which has had a material unfavorable impact on our results of operations during
2023. Although we have implemented various initiatives to mitigate the increased expense, to the degree possible, increases in these
physician related expenses could continue to have an unfavorable material impact on our results of operations for the foreseeable
future.

Although 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, in certain circumstances, limit our ability to increase prices, we have been
requesting and negotiating increased rates from commercial insurers to defray our increased cost of providing patient care. In addition,
we have implemented various productivity enhancement programs and cost reduction initiatives including, but not limited to, the
following: team-based patient care initiatives designed to optimize the level of patient care services provided by our licensed
nurses/clinicians; efforts to reduce utilization of, and rates paid for, premium pay labor; consolidation of medical supply vendors to
increase purchasing discounts; review and reduction of clinical variation in connection with the utilization of medical supplies, and;
various other efforts to increase productivity and/or reduce costs including investments in new information technology
applications.

The following table summarizes our results of operations, and is used in the discussion below, for the years ended December 31,

2023 and 2022 (dollar amounts in thousands):

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 (loss) attributable
to noncontrolling interests
Net income attributable to UHS

Year Ended December 31,

2023

2022

Amount

% of Net
Revenues

Amount

% of Net
Revenues

14,281,976

100.0% $

13,399,370

100.0%

7,107,484
3,757,216
1,532,828
568,041
141,026
13,106,595
1,175,381
206,674
28,281
940,426
221,119
719,307

49.8%
26.3%
10.7%
4.0%
1.0%
91.8%
8.2%
1.4%
0.2%
6.6%
1.5%
5.0%

6,762,256
3,445,733
1,474,339
581,861
131,626
12,395,815
1,003,555
126,889
10,406
866,260
209,278
656,982

1,512
717,795

0.0%
5.0% $

(18,627)
675,609

50.5%
25.7%
11.0%
4.3%
1.0%
92.5%
7.5%
0.9%
0.1%
6.5%
1.6%
4.9%

-0.1%
5.0%

Net revenues increased by 6.6%, or $883 million, to $14.28 billion during 2023 as compared to $13.40 billion during 2022. The

increase in net revenues was primarily attributable to:



a $1.01 billion or 7.8% 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;

$123 million of other combined net decreases including $162 million of decreased revenues at Desert Springs which
discontinued all inpatient operations during the first quarter of 2023.

Income before income taxes increased by $74 million to $940 million during 2023 as compared to $866 million during 2022.

The increase was attributable to:



an increase of $111 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

an increase of $103 million at our behavioral health care facilities, as discussed below in Behavioral Health Services;

a decrease of $80 million due to an increase in interest expense due to increases in our weighted average cost of
borrowings and aggregate average borrowings outstanding, as discussed below in Other Operating Results-Interest
Expense, and;

$60 million of other combined net decreases, including a $28 million increase in the unrealized loss in the market value of
certain equity securities.

Net income attributable to UHS increased by $42 million to $718 million during 2023 as compared to $676 million during 2022.

This increase was attributable to:



an increase of $74 million in income before income taxes, as discussed above;

a decrease of $20 million due to an increase in the income attributable to noncontrolling interests, and;

a decrease of $12 million resulting from an increase in the provision for income taxes due primarily to the income tax
expense recorded in connection with the $54 million increase in pre-tax income. Please see additional disclosure below in
Other Operating Results-Provision for Income Taxes and Effective Tax Rates.

Adjustments to self-insured professional and general liability and workers' compensation liability reserves:

Professional and general liability:

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 2023 and 2022, our results of operations included pre-tax increases to our

reserves for self-insured professional and general liability claims amounting to approximately $25 million during 2023 and $16
million during 2022. During 2023, approximately $18 million of the reserves increase is included in our Same Facility basis acute care
hospitals services’ results, and approximately $7 million is included in our behavioral health services’ results. During 2022,
approximately $10 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.

Workers' compensation liability:

As a result of favorable trends experienced recently, our results of operations during 2023 included a decrease to our reserves

for self-insured workers' compensation liability claims amounting to approximately $10 million, of which approximately $4 million is
included in our same facility basis acute care hospitals services’ results, and approximately $5 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,

2023 and 2022.

Average licensed beds
Average available beds
Patient days
Average daily census
Occupancy-licensed beds
Occupancy-available beds
Admissions
Length of stay

Same Facility Basis

All

2023

6,604
6,432
1,564,390
4,286.0

64.9%
66.6%

319,829
4.9

2022

6,640
6,468
1,512,013
4,142.5

62.4%
64.0%

300,507
5.0

2023

6,691
6,519
1,576,074
4,318.0

64.5%
66.2%

322,218
4.9

2022

6,923
6,751
1,569,611
4,300.3

62.1%
63.7%

311,537
5.0

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-Summary of 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 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, 2023 and 2022 (dollar amounts in thousands):

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 (income) expense, net
Other (income) expense, net

Income before income taxes

Year Ended
December 31, 2023

Year Ended
December 31, 2022

Amount
$ 7,840,740

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 7,284,868

100.0%

3,363,213
2,144,102
1,303,018
358,308
95,565
7,264,206
576,534
(2,501)
6,099
572,936

4.6%
1.2%

42.9% 3,225,039
27.3% 1,863,414
16.6% 1,226,294
369,493
85,915
92.6% 6,770,155
514,713
1,109
1,493
512,111

7.4%
0.0%
0.1%
7.3% $

44.3%
25.6%
16.8%
5.1%
1.2%
92.9%
7.1%
0.0%
0.0%
7.0%

During 2023, as compared to 2022, net revenues from our acute care hospital services, on a Same Facility basis, increased by

$556 million or 7.6%. Income before income taxes (and before income attributable to noncontrolling interests) increased by $61
million, or 11.9%, amounting to $573 million, or 7.3% of net revenues during 2023, as compared to $512 million, or 7.0% of net
revenues during 2022.

During 2023, net revenue per adjusted admission decreased by 0.6% while net revenue per adjusted patient day increased by

2.2%, as compared to 2022. During 2023, as compared to 2022, the net revenue per adjusted admission, and per adjusted patient day,
were pressured by the following: (i) a greater percentage of lower acuity procedures; (ii) an increase in denied claims and challenges
to patient status classifications by certain of our commercial payers, and; (iii) a decrease in the number of patients with a COVID-19
diagnosis treated at our acute care hospitals and less incremental government reimbursement associated with COVID-19 patients.

During 2023, as compared to 2022, inpatient admissions to our acute care hospitals increased by 6.4% and adjusted admissions

(adjusted for outpatient activity) increased by 7.6%. Patient days at these facilities increased by 3.5% and adjusted patient days
increased by 4.7% during 2023, as compared to 2022. The average length of inpatient stay at these facilities was 4.9 days during 2023
and 5.0 days during 2022. The occupancy rate, based on the average available beds at these facilities, was 67% during 2023, as
compared to 64% during 2022.

On a Same Facility basis during 2023, as compared to 2022, salaries, wages and benefits expense increased by $138 million, or
4.3%. As a percentage of net revenues, salaries, wages and benefits expense decreased to 42.9% during 2023 as compared to 44.3%
during 2022.

Other operating expenses increased $281 million, or 15.1%, during 2023, as compared to 2022. Operating expenses incurred by
our commercial health insurer, consisting primarily of medical costs, increased approximately $40 million during 2023 as compared to
2022. Excluding the operating expenses incurred by our commercial health insurer, other operating expenses increased $241 million,
or 16.4% during 2023 as compared to 2022. The increase during 2023, as compared to 2022, was due primarily to a $127 million, or
26.6%, increase in physician-related expenses (as discussed above in Results of Operations - Clinical Staffing, Physician Related
Expenses and Effects of Inflation), as well as the expenses related to the increase in patient volumes.

Supplies expense increased $77 million, or 6.3%, during 2023, as compared to 2022. The increase was due, in part, to the
increase in patient volumes experienced during 2023, as compared to 2022 . As a percentage of net revenues, supplies expense
decreased to 16.6% during 2023 as compared to 16.8% during 2022.

All Acute Care Hospital Services

The following table summarizes the results of operations for all our acute care operations during 2023 and 2022. 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 operating results of recently acquired/opened facilities, or divested/closed facilities, including the
operating results and provision for asset impairment (recorded during 2022) for Desert Springs Hospital which discontinued all
inpatient operations during the first quarter of 2023. Dollar amounts below are reflected in thousands.

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 (income) expense, net
Other (income) expense, net

Income before income taxes

Year Ended
December 31, 2023

Year Ended
December 31, 2022

Amount
$ 8,081,402

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 7,646,749

100.0%

3,406,060
2,347,560
1,317,917
367,644
96,589
7,535,770
545,632
(2,501)
7,788
540,345

4.5%
1.2%

42.1% 3,332,535
29.0% 2,146,196
16.3% 1,264,688
383,115
86,654
93.2% 7,213,188
433,561
1,109
2,788
429,664

6.8%
0.0%
0.1%
6.7% $

43.6%
28.1%
16.5%
5.0%
1.1%
94.3%
5.7%
0.0%
0.0%
5.6%

During 2023, as compared to 2022, net revenues from our acute care hospital services increased by $435 million, or 5.7%, due
to: (i) the $556 million, or 7.6% increase in Same Facility revenues, as discussed above, and; (ii) $121 million of other combined net
decreases consisting primarily of decreased revenues at Desert Springs Hospital and decreased provider tax assessments, partially
offset by the revenues generated at a 170-bed acute care hospital located in Reno, Nevada, that opened in early April, 2022 (this
facility was reflected in our acute care hospital services' operating results effective May 1st of each year).

Income before income taxes increased by $111 million, or 25.8%, to $540 million, or 6.7% of net revenues during 2023, as

compared to $430 million, or 5.6% of net revenues during 2022. The $111 million increase in income before income taxes from our
acute care hospital services resulted from the $61 million, or 12%, increase in income before income taxes at our acute care hospital
services, on a Same Facility basis, as discussed above, and $50 million of other combined net increases resulting primarily from
decreased losses incurred at Desert Springs Hospital (a $58 million provision for asset impairment was recorded for Desert Springs
Hospital during 2022).

During 2023, as compared to 2022, salaries, wages and benefits expense increased by $74 million, or 2.2%. The increase was

due primarily to the above-mentioned $138 million increase related to our acute care hospital services, on a Same Facility basis,
partially offset by a combined net decrease of $64 million resulting primarily from decreased salaries, wages and benefits expense
related to Desert Springs Hospital.

Other operating expenses increased $201 million, or 9.4%, during 2023, as compared to 2022. The increase was due primarily to

the $281 million above-mentioned increase related to our acute care hospital services, on a Same Facility basis, partially offset by a
combined net decrease of $80 million resulting primarily from decreased operating expenses related to Desert Springs Hospital (2022
included a $58 million provision for asset impairment).

Supplies expense increased by $53 million, or 4.2%, during 2023, as compared to 2022. The increase was due primarily to the

above-mentioned $77 million increase related to our acute care hospital services, on a Same Facility basis, partially offset by a
combined net decrease of $24 million resulting primarily from decreased supplies expense related to Desert Springs Hospital.

Please see Results of Operations - Clinical Staffing, Physician Related Expenses and Effects of Inflation above for additional

disclosure regarding the factors impacting our operating costs.

Behavioral Health Care Services

The following table sets forth certain operating statistics for our behavioral health care services for the years ended December

31, 2023 and 2022.

Average licensed beds
Average available beds
Patient days
Average daily census
Occupancy-licensed beds
Occupancy-available beds
Admissions
Length of stay

Same Facility Basis

All

2023

24,016
23,916
6,289,388
17,231.2

71.7%
72.0%

468,131
13.4

2022

24,014
23,914
6,175,143
16,918.2

70.5%
70.7%

454,441
13.6

2023

24,224
24,124
6,336,927
17,361.4

71.7%
72.0%

472,307
13.4

2022

24,259
24,159
6,230,124
17,068.8

70.4%
70.7%

459,245
13.6

Behavioral Health Care Services-Same Facility Basis

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-Summary of 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 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, 2023 and 2022 (dollar amounts in thousands):

Net revenues
Operating charges:

Income before income taxes

Year Ended
December 31, 2023

Year Ended
December 31, 2022

Amount
$6,048,883

3,343,222
1,163,365
216,879
187,105
43,785
4,954,356
1,094,527
4,434
(3,426)
$1,093,519

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 5,598,764

100.0%

3.6%
3.1%
0.7%

55.3% 3,088,108
19.2% 1,078,918
210,903
184,684
41,951
81.9% 4,604,564
994,200
18.1%
5,169
0.1%
-0.1%
(6,343)
18.1% $ 995,374

55.2%
19.3%
3.8%
3.3%
0.7%
82.2%
17.8%
0.1%
-0.1%
17.8%

During 2023, as compared to 2022, net revenues from our behavioral health services, on a Same Facility basis, increased by

$450 million or 8.0%. Income before income taxes increased by $98 million, or 9.9%, amounting to $1.094 billion or 18.1% of net
revenues during 2023, as compared to $995 million or 17.8% of net revenues during 2022.

During 2023, net revenue per adjusted admission increased by 4.7% while net revenue per adjusted patient day increased by
5.9%, as compared to 2022. During 2023, as compared to 2022, inpatient admissions and adjusted admissions to our behavioral health
care hospitals increased by 3.0% and 3.2%, respectively. Patient days at these facilities increased by 1.9% and adjusted patient days
increased by 2.1% during 2023, as compared to 2022. The average length of inpatient stay at these facilities was 13.4 days and 13.6
days during 2023 and 2022, respectively. The occupancy rate, based on the average available beds at these facilities, was 72% and
71% during 2023 and 2022, respectively.

On a Same Facility basis during 2023, as compared to 2022, salaries, wages and benefits expense increased $255 million or
8.3%. The increase during 2023, as compared to 2022, was due to a 4.1% increase in salaries, wages and benefits expense per average
full-time equivalent employee, as well as a 4.0% increase in the average number of full time equivalent employees. The increased
staffing was due, in part, to increased patient volumes. As a percentage of net revenues during each year, salaries, wages and benefits
expense increased slightly to 55.3% during 2023 as compared to 55.2% during 2022.

Other operating expenses increased $84 million, or 7.8%, during 2023, as compared to 2022. The increase during 2023, as
compared to 2022, was due, in part, to increased patient volumes. As a percentage of net revenues during each year, other operating
expenses decreased slightly to 19.2% during 2023 as compared to 19.3% during 2022.

Supplies expense increased $6 million, or 2.8%, during 2023, as compared to 2022.

All Behavioral Health Care Services

The following table summarizes the results of operations for all our behavioral health care services during 2023 and 2022. 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.

Net revenues
Operating charges:

Income before income taxes

Year Ended
December 31, 2023

Year Ended
December 31, 2022

Amount
$6,190,921

3,353,008
1,303,311
217,310
189,297
44,028
5,106,954
1,083,967
4,558
(4,271)
$1,083,680

% of Net
Revenues

Amount

% of Net
Revenues

100.0% $ 5,729,758

100.0%

3.5%
3.1%
0.7%

54.2% 3,107,216
21.1% 1,201,563
211,786
186,555
43,868
82.5% 4,750,988
978,770
17.5%
5,323
0.1%
(6,843)
-0.1%
17.5% $ 980,290

54.2%
21.0%
3.7%
3.3%
0.8%
82.9%
17.1%
0.1%
-0.1%
17.1%

During 2023, as compared to 2022, net revenues generated from our behavioral health services increased by $461 million, or

8.0%. The increase was primarily attributable to the $450 million, or 8.0%, increase in net revenues at our behavioral health facilities,
on a Same Facility basis, as discussed above.

Income before income taxes increased by $103 million, or 11%, to $1.084 billion or 17.5% of net revenues during 2023, as
compared to $980 million or 17.1% of net revenues during 2022. The increase in income before income taxes at our behavioral health
facilities during 2023, as compared to 2022, was primarily attributable to the $98 million, or 10%, increase in income before income
taxes generated at our behavioral health facilities, on a Same Facility basis, as discussed above.

During 2023, as compared to 2022, salaries, wages and benefits expense increased by $246 million or 7.9%. The increase was

due primarily to the above-mentioned $255 million, or 8.3%, increase related to our behavioral health facilities, on a Same Facility
basis.

Other operating expenses increased by $102 million, or 8.5%, during 2023, as compared to 2022. The increase was due

primarily to the above-mentioned $84 million, or 7.8%, increase related to our behavioral health facilities, on a Same Facility basis, as
well as a $23 million increase in provider tax assessments.

Supplies expense increased $6 million, or 2.6%, during 2023, as compared to 2022.

Please see Results of Operations - Clinical Staffing, Physician Related Expenses and Effects of Inflation above for additional

disclosure regarding the factors impacting our operating costs.

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.

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.

In 2010, the Patient Protection and Affordable Care Act, as amended by the Health and Education Reconciliation Act

(collectively, the “Legislation”) was enacted and its two primary goals were to provide for increased access to coverage for healthcare
and to reduce healthcare-related expenses. The Legislation revised 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 reductions to Medicaid DSH payments which are scheduled to begin in 2024.

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
withdrew certain previously issued section 1115 demonstrations aligned with these policies, but Georgia has imposed work and
community engagement requirements under a Medicaid demonstration program that launched July 1, 2023. If additional section 1115
demonstrations that include work and community requirements are implemented, we anticipate that they would lead to reductions in
coverage and likely increases in uncompensated care in those 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. That ruling was ultimately appealed
to the United States Supreme Court, which decided in California v. Texas that the plaintiffs in the matter lacked standing to bring their
constitutionality claims. The Court did not reach the plaintiffs’ merits arguments, which specifically challenged the constitutionality
of the Legislation’s individual mandate and the entirety of the Legislation itself. As a result, the Legislation will continue to be law,
and HHS and its respective agencies will continue to enforce regulations implementing the law. However, on September 7, 2022, the
Legislation faced its most recent challenge when a Texas Federal District Court judge, in the case of Braidwood Management v.
Becerra, ruled that a requirement that certain health plans cover services without cost sharing violates the Appointments Clause of the
U.S. Constitution and that the coverage of certain HIV prevention medication violates the Religious Freedom Restoration Act. The
government has appealed the decision to the U.S. Circuit Court of Appeals for the Fifth Circuit.

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. In December, 2022, CMS proposed to change the standard for identification of an overpayment and
would require the report and return of an overpayment if a provider or supplier has actual knowledge of the existence of an
overpayment or acts in reckless disregard or deliberate ignorance of an overpayment. 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

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.

In addition to legislative changes, the Legislation can be significantly impacted by executive branch actions. President Biden
has taken executive actions that will strengthen the Legislation and may 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 ACA or the Medicaid program.
The American Rescue Plan Act of 2021's expansion of subsidies to purchase coverage through an exchange contributed to increased
exchange enrollment in 2021. The IRA’s extension of the subsidies through 2025 is expected to increase exchange enrollment in
future years. 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 10 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, 2023, CMS published its IPPS 2024 final payment rule which provides for a 3.1% market basket increase to the base

Medicare MS-DRG blended rate. When statutorily mandated budget neutrality factors, annual geographic wage index updates
(including a change in the Medicare Rural Floor calculation), 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 6.6%. Including DSH payments, an increase to the Medicare
Outlier threshold and certain other adjustments, we estimate our overall increase from the final IPPS 2024 rule (covering the period of
October 1, 2023 through September 30, 2024) will approximate 5.4%.

In August, 2022, CMS published its IPPS 2023 final payment rule which provides for a 4.1% 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 4.6.%. Including DSH payments, an increase to the Medicare Outlier threshold and certain other adjustments, we
estimate our overall increase from the final IPPS 2023 rule (covering the period of October 1, 2022 through September 30, 2023) will

approximate 4.4%. This projected impact from the IPPS 2023 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.

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. Subsequent legislation has extended this sequestration through 2032. The CARES Act, as amended,
temporarily suspended or limited the application of this sequestration from May 1, 2020 through June 30, 2022, with a return to the
full 2% Medicare payment reduction thereafter.

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, 2023, CMS published its Psych PPS final rule for the federal fiscal year 2024. Under this final rule, payments to our

behavioral health care hospitals and units are estimated to increase by 3.3% compared to federal fiscal year 2023. This amount
includes the effect of the 3.5% net market basket update which reflects the offset of a 0.2% productivity adjustment.

In July, 2022, CMS published its Psych PPS final rule for the federal fiscal year 2023. Under this final rule, payments to our

behavioral health care hospitals and units are estimated to increase by 3.8% compared to federal fiscal year 2022. This amount
includes the effect of the 4.1% net market basket update which reflects the offset of a 0.3% productivity adjustment.

On November 2, 2023, in light of the Supreme Court’s decision in American Hospital Association v. Becerra (142 S. Ct. 1896

(2022)) and the district court’s remand to the agency, CMS issued a final rule outlining the remedy for the 340B-acquired drug
payment policy for calendar years 2018-2022. CMS published the final rule to remedy the payment rates the Court held were invalid
aspects of their past policy and will affect nearly all hospitals paid under the OPPS. As part of the final remedy, CMS will make an
adjustment to the update factor to maintain budget neutrality as required by statute. CMS finalized the 340B policy for calendar year
2018 in 2017 in a budget neutral manner that included increasing payments for non-drug items and services; this payment increase
was in effect from calendar years 2018 through 2022. CMS estimates that hospitals were paid $7.8 billion more for non-drug items
and services during this time period than they would have been paid in the absence of the 340B payment policy. Because CMS is now
making additional payments to affected 340B covered entity hospitals to pay them what they would have been paid had the 340B
policy never been implemented, CMS will make a corresponding offset to maintain budget neutrality as if the 340B payment policy
had never been in effect. To carry out this required $7.8 billion budget neutrality adjustment, CMS will reduce future non-drug item
and service payments by adjusting the OPPS conversion factor by minus 0.5% starting in calendar year 2026 and continuing for 16
years. The impact of this 0.5% reduction on our 2026 results of operations is approximately $4 million.

In November, 2023, CMS issued its OPPS final rule for 2024. The hospital market basket increase is 3.3% and the productivity

adjustment reduction is 0.2% for a net market basket increase of 3.1%. When other statutorily required adjustments and hospital
patient service mix are considered, we estimate that our overall Medicare OPPS update for 2024 will aggregate to a net increase of
9.7%. This percentage reflects the impact resulting from rural floor changes to the Medicare wage index adjustment factor where
certain states, such as California and Nevada, will materially benefit from this change.

In November, 2022, CMS issued its OPPS final rule for 2023. The hospital market basket increase is 4.1% and the productivity

adjustment reduction is -0.3% for a net market basket increase of 3.8%. The final rule provides that in light of the Supreme Court
decision in American Hospital Association v. Becerra, CMS is applying the default rate, generally average sales price plus 6%, to

340B acquired drugs and biologicals for 2023. CMS stated they will address the remedy for 340B drug payments from 2018-2022 in
future rulemaking prior to the CY 2024 OPPS/ASC proposed rule. During the 2018-2022 time period, we recorded an aggregate of
approximately $45 million to $50 million of Medicare revenues related to the prior 340B payment policy. When other statutorily
required adjustments and hospital patient service mix are considered as well as impact of the aforementioned 340B Program policy
change, we estimate that our overall Medicare OPPS update for 2023 will aggregate to a net increase of 0.9% which includes a 0.3%
increase to behavioral health division partial hospitalization rates.

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 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. In July, 2023, CMS proposed multiple provisions, effective as of January 1, 2024, focused on
increasing hospital price transparency and compliance enforcement including but not limited to: (1) standard charges data would be
posted online using a CMS template, instead of using the hospital’s own form/format; (2) all standard charge information would be
encoded with a specified set of data elements (e.g., hospital name; license number; payer/plan name; description of service; billing
codes, among others); (3) other technical changes related to increasing consumers’ automated accessibility to hospital standard
charges, and; (4) certifications regarding accuracy of standard charge data and related compliance warning notices from CMS and
requiring accessibility to health system leadership regarding transparency noncompliance.

In July, 2023, the Departments of Labor, Health and Human Services and the Treasury announced proposed rules that would:

 Mandate that insurers analyze the outcomes of their coverage to ensure there's equivalent access to mental health care,

including provider networks, prior authorization rates and payment for out-of-network providers, and take action to get in
compliance;

 Establish when health plans can’t use prior authorization or other tactics to make it more difficult to access mental health

and substance use treatment;

 Require additional insurers to comply with the 2008 Mental Health Parity and Addiction Equity Act.

While these proposed rules, if adopted, would likely improve patient access to inpatient and outpatient mental health services,

we are unable to estimate the related potential impact on our results of operations.

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, Massachusetts and Virginia. We also receive Medicaid disproportionate share
hospital payments in certain states including, most significantly, Texas. 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 fiscal year
2024, 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.

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 and it has not been implemented in any states. Accordingly, we are unable to
predict whether the HAO demonstration will impact our future results of operations.

Summary of Various State Medicaid Supplemental Payment Programs:

The following table summarizes the revenues, healthcare provider taxes (“Provider Taxes”) and net benefit related to each of the

above-mentioned Medicaid supplemental programs for the years ended December 31, 2023 and 2022. The Provider Taxes are
recorded in other operating expenses on the consolidated statements of income as included herein.

Texas Supplemental Payment Programs:
Revenues
Provider Taxes
Net benefit

Nevada SDP:
Revenues
Provider Taxes
Net benefit

Various Other State Programs:
Revenues
Provider Taxes
Net benefit

Subtotal-Provider Tax Programs:
Revenues
Provider Taxes
Aggregate net benefit from Provider Tax Programs

Texas, Nevada and South Carolina DSH/SPA Programs:
Revenues
Provider Taxes
Net benefit

Total Supplemental Medicaid Programs:
Revenues
Provider Taxes
Aggregate net benefit from all Supplemental Programs

(amounts in millions)

Estimated 2024

2023

2022

300 $
(120)
180 $

265 $
(107)
158 $

247 $
(82 )
165 $

285
(110)
175

13 $
(4 )
9 $

0
0
0

662 $
(246)
416 $

593 $
(211 )
382 $

1,227 $
(473)
754 $

853 $
(297 )
556 $

499
(177)
322

784
(287)
497

55 $
0
55 $

73 $
0
73 $

75
0
75

1,282 $
(473)
809 $

926 $
(297 )
629 $

859
(287)
572

Texas Supplemental Payment Programs:

Certain of our acute care hospitals located in various counties of Texas participate in Medicaid supplemental payment Section

1115 Waiver indigent care programs. The 1115 Waiver has been approved by CMS through September 30, 2030. 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.

CHIRP (including QIF)

On March 26, 2021, THHSC published a final rule that will apply to program periods on or after September 1, 2021, and
Uniform Hospital Rate Increase Program ("UHRIP") was re-named the Comprehensive Hospital Increase Reimbursement Program
(“CHIRP”). CHIRP will be comprised of a UHRIP component and an Average Commercial Incentive Award component. CHIRP has

a pool size of $4.7 billion. On March 25, 2022, CMS approved the CHIRP program retroactive to September 1, 2021 through August
31, 2022. The impact of the CHIRP program is reflected in the State Medicaid Supplemental Payment Program Table below including
approximately $12 million of estimated CHIRP revenues which were recorded during the first quarter of 2022, attributable to the
period September 1, 2021 through December 31, 2021, net of associated provider taxes. On August 1, 2022, CMS approved the
CHIRP program, with a pool of $5.2 billion, for the rate period effective September 1, 2022 to August 31, 2023. On July 31, 2023,
CMS approved the CHIRP program, with a pool of $6.5 billion, for the rate period of September 1, 2023 to August 31, 2024.

On January 26, 2024, THHSC issued a final rule that will modify the CHIRP payments beginning with the State Fiscal Year

(SFY) 2025 rate period to promote the advancement of the quality goals and strategies the program is designed to advance.

The final modifications include:

 Creation of a new a pay-for-performance incentive payment through a third component in CHIRP, the Alternate

Participating Hospital Reimbursement for Improving Quality Award ("APHRIQA"). For state fiscal years beginning with
SFY 2025, THHSC does not anticipate that behavioral health hospitals or rural hospitals will be included in a pay-for-
performance program.

 The funds for payment of the APHRIQA component will be transitioned from the existing uniform rate increase

components of the UHRIP and the Average Commercial Incentive Award and will be paid using a scorecard that directs
managed care organizations to pay providers for performance achievements on quality outcome measures. Payments will
be distributed under APHRIQA on a monthly, quarterly, semi-annual, or annual basis that aligns with the measurement
period determined for quality metrics reporting.

We cannot determine the impact of this final rule. However, CHIRP payment levels could be reduced materially if: (1) the pool
size of the new APHRIQA component is materially less than THHSC carve-out of the current CHIRP pool, or; (2) if our hospitals are
not able meet the required APHRIQA pay-for-performance metrics.

Certain of our acute care hospitals located in Texas recorded an aggregate of $33 million in Quality Incentive Fund (“QIF”)
revenues during each of 2023 and 2022. The amounts recorded during 2023 were applicable to the period of September 1, 2021 to
August 31, 2022; and the amounts recorded during 2022 were applicable to the period of September 1, 2020 to August 31, 2021. This
revenue was earned pursuant to contract terms with various Medicaid managed care plans which requires the annual payout of QIF
funds when a managed care service delivery area’s actual claims-based CHIRP payments are less than targeted CHIRP payments for a
specific rate year. We also anticipate these hospitals may be entitled to a comparable amount of aggregate QIF revenue during 2024.

Included in these provider pax programs are reimbursements received in connection with the Texas Uncompensated Care

program ("UC"). The size and distribution of the UC pool are determined based on charity care costs reported to THHSC in
accordance with Medicare cost report Worksheet S-10 principles.

HARP

On September 24, 2021, THHSC 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, which was approved by CMS on August 15, 2023, will provide additional funding to hospitals to help offset the cost
hospitals incur while providing Medicaid services. Included in our results of operations during 2023 was approximately $20 million,
approximately $13 million of which is applicable to the period of October 1, 2021 through September 30, 2022. During 2024, we
expect to record HARP revenues of approximately $28 million. The HARP program is technically a Medicaid Upper Payment Limit
as payment under this program is based on a reasonable estimate of the amount that would be paid for the services under Medicare
payment principles but is referred to as HARP by THHSC.

DSRIP

In addition, the Texas Medicaid Section 1115 Waiver included a Delivery System Reform Incentive Payments ("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 FFY 2022, DSRIP funding under the waiver is eliminated except for certain
carryover DSRIP projects. No revenues were recorded by us during 2023 in connection with this DSRIP program. Included in our
results of operations during 2022, was approximately $18 million of DSRIP revenues.

Nevada State Directed Payment Program ("SDP"):

As previously reported, in February, 2023, the Nevada Division of Health Care Financing and Policy (“DHCFP”) outlined a

new provider fee on private hospitals located in Nevada that would effectively capture new Medicaid federal share for certain
categories of services eligible for the new payment program. In late December, 2023, the Centers for Medicare and Medicaid Services
(“CMS”) approved the Medicaid managed care component of the Nevada SDP program, with an effective date of January 1, 2024.
Based upon financial data provided by the DHCFP for our facilities located in Nevada, we estimate that our aggregate net

reimbursements pursuant to the Medicaid managed care component of the Nevada SDP program (net of related provider taxes) will
approximate $140 million during the year ended December 31, 2024. Payments made pursuant to this component of the Nevada SDP
program, which requires annual approval by CMS, are subject to reconciliation by DHCFP based on actual Medicaid managed care
utilization during 2024. There can be no assurance that the Medicaid managed care component of the Nevada SDP will continue for
any period after December 31, 2024, or that it will not be modified.

Including the impact of the Medicaid fee for service upper payment limit component of the Nevada SDP program (estimated net

reimbursements of $18 million attributable to our Nevada facilities during the year ended December 31, 2024), which was approved
by CMS in November and December of 2023, we estimate that our aggregate net reimbursements pursuant to both components of the
Nevada SDP program (net of related provider taxes) will approximate $158 million during the year ended December 31, 2024.

Various Other State Programs:

We receive substantial reimbursement from multiple states in connection with various supplemental Medicaid payment

programs. The states include, but are not limited to, the state programs listed below from which we receive significant
reimbursements.

Kentucky Hospital Rate Increase Program (“HRIP”):

In early 2021, CMS approved the Kentucky Medicaid Managed Care Hospital Rate Increase Program (“HRIP”). Included in our

financial results was approximately $73 million during 2023 and approximately $69 million during 2022, Programs such as HRIP
require an annual state submission and approval by CMS. In January, 2024, CMS approved the program for the period of January 1,
2024 through December 31, 2024 at rates comparable to the prior year. We estimate that our reimbursements pursuant to HRIP will
approximate $71 million during the year ended December 31, 2024.

California SPA:

In California, the state continues to operate Medicaid supplemental payment programs consisting of three components: Fee For

Service Payment, Managed Care-Pass-Through Payment and Managed Care-Directed Payment. The non-federal share for these
programs are financed by a statewide provider tax. The Directed Payment method will be based on actual concurrent hospital
Medicaid managed care in-network patient volume whereas the other programs are based on prior year Medicaid utilization. The
CMS program approval status is outlined in the table below.

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,
2024

Approved through December 31, 2024; Paid
through December 31, 2022

Managed Care-Pass-Through Payment Approved through December 31,

2022

Approved through December 31, 2021 and
paid in advance through December 31, 2022

Managed Care-Directed Payment

Approved through December 31,
2022

Approved through December 31, 2021 and
paid through December 31, 2021

In connection with this program, included in our financial results was approximately $46 million during 2023 and approximately
$50 million during 2022. We estimate that our reimbursements pursuant to this program will approximate $51 million during the year
ended December 31, 2024.

Mississippi Hospital Access Program

In September, 2023, subject to CMS approval, Mississippi announced a $689 million, two-part Medicaid payment proposal,
effective retroactively to July 1, 2023, that would be funded by annual hospital assessments to the state's Medicaid program. These
hospital assessments are calculated using a formula provided under state law. The first part of the proposal, known as the Mississippi
Hospital Access Program (“MHAP”), would provide direct payments for hospitals that serve patients in the state's Medicaid managed
care delivery system. Hospitals would be reimbursed near the average commercial rate, which is the upper limit for Medicaid
managed care reimbursements. The second part of the proposal would supplement Medicaid payment rates for hospitals providing
inpatient and outpatient services up to Medicaid's regulated upper payment limit. In December, 2023, CMS approved the MHAP
program component.

In connection with this new program and the prior program, included in our financial results was approximately $33 million
during 2023 and $16 million during 2022. We estimate that our reimbursements pursuant to these supplemental payment programs
will approximate $45 million during the year ended December 31, 2024.

Florida Medicaid Managed Care Directed Payment Program (“DPP”):

The Florida DPP provides for an additional payment for Medicaid managed care contracted services. In connection with this

program, included in our financial results was approximately $43 million during 2023 and $36 million during 2022 (recorded during
fourth quarters of each year). We estimate that our reimbursements pursuant to this DPP will approximate $41 million during the year
ended December 31, 2024.

Illinois Medicaid Supplemental Payment Programs

The Illinois Medicaid Supplemental Payment Programs are comprised of three components: (1) Medicaid managed care directed

payment program; (2) Medicaid managed care pass-through program, and; (3) Medicaid fee for service supplemental payment
program. These programs require various related legislative and regulatory approvals each year.

In connection with these programs, included in our financial results was approximately $36 million during 2023 and $49 million

during 2022 . Included in the 2022 amount was a non-recurring Medicaid managed care claims processing catchup payment
amounting to approximately $10 million. We estimate that our reimbursements pursuant to these supplemental payment programs will
approximate $38 million during the year ended December 31, 2024.

Indiana Medicaid Managed Care DPP

The Indiana DPP provides for an additional payment for Medicaid managed care contracted services. In connection with this

program, included in our financial results was approximately $31 million during 2023 and $27 million during 2022 . We estimate that
our reimbursements pursuant to this program will approximate $34 million during the year ended December 31, 2024.

Oklahoma (Transition to Managed Care and Implementation of a Medicaid Managed Care DPP)

The current Oklahoma Medicaid supplemental payment program in effect, prior to the planned implementation of the new DPP
in 2024, is the Supplemental Hospital Offset Payment Program (“SHOPP”). The SHOPP component will remain in place for certain
categories of Medicaid patients that will continue to be enrolled in the traditional Medicaid Fee for Service program.

In May, 2022, Oklahoma enacted legislation that directs the Oklahoma Health Care Authority ("OHCA") to: (i) transition its

Medicaid program from a fee for service payment model to a managed care payment model by no later than October 1, 2023, and: (ii)
concurrently implement a Medicaid managed care DPP using a managed care gap of 90% of average commercial rates. In December,
2022, the OHCA delayed the implementation date of the Medicaid managed care change and related DPP until April 1, 2024. In
September, 2023, CMS approved the DPP program effective as of April 1, 2024.

In connection with the SHOPP program, included in our financial results was approximately $12 million during 2023 and $9
million during 2022. We estimate that our reimbursements pursuant to these two supplemental payment programs (i.e. SHOPP and
DPP) will approximate $21 million during the year ended December 31, 2024.

South Carolina Health Access, Workforce and Quality (“HAWQ”) Program

In September 2023, CMS approved the South Carolina HAWQ Program retroactive to July 1, 2023. This program is Medicaid
managed care directed payment program that provides for a rate enhancement to Medicaid managed care encounters. In connection
with this new program and the prior program, included in our financial results was approximately $11 million during 2023. We
estimate that our reimbursements pursuant to these supplemental payment programs will approximate $21 million during the year
ended December 31, 2024.

Texas, Nevada and South Carolina DSH/Other Programs:

Texas DSH:

Upon meeting certain conditions and serving a disproportionately high share of Texas’ low income patients, our qualifying
facilities located in Texas receive additional reimbursement from the state’s DSH fund. The Texas DSH program was renewed for the
state’s 2024 DSH fiscal year (covering the period of October 1, 2023 through September 30, 2024).

In connection with this DSH program, included in our financial results was an aggregate of approximately $47 million and $48

million during 2023 and 2022, respectively. We estimate that our aggregate reimbursements earned pursuant to the Texas DSH
program will approximate $34 million during 2024.

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 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, 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
Texas could be reduced by approximately 41% from current DSH payment levels. A series of federal continuing resolutions ("CR")
were passed by the federal government which provided for ongoing federal funding.

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 $31 million as of December 31, 2023 and $42 million as of
December 31, 2022 related to certain DSH and UC adverse federal court decisions including the Children’s Hospital Association of
Texas v. Azar (“CHAT”).

Nevada State Plan Amendment ("SPA")

CMS initially approved an SPA in Nevada in August, 2014 and this SPA has been approved for additional state fiscal years,

including the 2023 fiscal year covering the period of July 1, 2022 through June 30, 2023. CMS approval for the 2024 fiscal year,
which is still pending, is expected to occur.

In connection with this program, included in our financial results was approximately $25 million and $21 million during 2023

and 2022, respectively. We estimate that our reimbursements pursuant to this program will approximate $21 million during 2024.

South Carolina DSH:

One of our facilities located in South Carolina received additional reimbursement from the state’s DSH fund. However, the
South Carolina HAWQ Program, as described above, ended our DSH payment eligibility in the South Carolina DSH program during
2023. In connection with this DSH program, included in our financial results was approximately $6 million during 2022.

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”) was included in the Families First Coronavirus Response Act. The Consolidated Appropriations Act of 2023 (“CAA of
2023”) provided for the transitional reduction of the 6.2% enhanced FMAP during 2023 to 5.0% during the second quarter, 2.5%
during the third quarter and 1.5% during the fourth quarter of 2023. The impact of the enhanced FMAP Medicaid supplemental and
DSH payments are reflected in our financial results for the years ended December 31, 2023 and 2022.

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. 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 cause our estimates to
differ by material amounts which 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.

We receive Medicaid SDP payments from managed care organizations (“MCO’s”) authorized by CMS under 42 CFR §438.6
(c). Consistent with capitated rates paid by Medicaid state agencies to MCO’s for managing Medicaid beneficiary lives under a risk-
based arrangement, SDP program related capitated rates must also be developed by the state in accordance with actuarial soundness
standards noted at 42 CFR §438.4 and non-compliance could result in a reduction to SDP payment levels.

We incur 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 that are used by respective states to finance the non-federal share of SDP’s (or other
Medicaid supplemental payment programs). 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
supplemental payment programs. States are subject to CMS both concurrent and retrospective review for their compliance with the
applicable Provider Tax regulations and related federal statute. If CMS determines Provider Taxes used by a state Medicaid program
to finance the non-federal share of a SDP (or other Medicaid supplemental payment programs) are not in compliance with the
applicable Provider Tax regulations and related federal statute, Company SDP payments (and other Medicaid supplemental payments)
could be subject to recoupment by the respective state agency when non-compliance is determined by CMS to exist.

We believe that the SDP (and other state supplemental payment) programs are designed by each state to be in full compliance
with the applicable federal regulations and federal statutes. However, we are unable to provide assurance CMS will determine on a

retroactive basis that a state’s SDP (or other Medicaid supplemental payment program) design and Medicaid financing structures is in
full compliance with the applicable federal regulations and federal statute(s).

On April 27, 2023, CMS released two proposed rules addressing access, quality and payment in Medicaid, Children's Health

Insurance Program ("CHIP"), and Medicaid/CHIP Managed Care plans. Together, the Access NPRM and Managed Care NPRM
(“Managed Care Rule”) include new and updated proposed requirements for states and managed care plans that would establish
consistent access standards, and a standardized approach to transparently review and assess Medicaid payment rates across states. The
Managed Care Rule also proposes standards to allow enrollees to easily compare plans based on quality and access to providers
through the state’s website.

The Managed Care Rule proposes several new requirements related to Medicaid State Directed Payments. These proposed

changes would include:

 A broader requirement that states ensure each provider receiving a state directed payment attest that it does not participate

in any arrangement that holds taxpayers harmless for the cost of a tax in violation of federal requirements.

 Requiring that provider payment levels for inpatient and outpatient hospital services not exceed the average commercial

rate.

 Removing unnecessary regulatory barriers to help states use state directed payments to implement value-based payment

arrangements.

The Managed Care proposed rule, if implemented, could have a significant impact on the means by which states finance the
non-federal share of their Medicaid programs. Under the proposal, CMS would have the ability to strike down common financing
arrangements such as a provider taxes. These changes could have detrimental impacts on state Medicaid programs. If finalized as
proposed, the rule could potentially force states to raise taxes or cut their Medicaid budgets. In subsequent years, it could have an
unfavorable impact on Medicaid beneficiaries by likely limiting access to providers and requiring states to consider reductions to their
Medicaid programs.

As disclosed herein, we receive a significant amount of Medicaid and Medicaid managed care revenue from both base payments

and supplemental payments. Although we are unable to estimate the impact of the Managed Care Rule on our future results of
operations, if implemented as proposed, Managed Care Rule related changes could have a material adverse impact on our future
results of operations.

HITECH Act: In July 2010, 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 Labor, and the Department of the Treasury,

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. On February 28, 2022, a district judge in the
Eastern District of Texas invalidated portions of the rule governing aspects of the Independent Dispute Resolution (“IDR”) process. In
light of this decision, the government issued a final rule on August 19, 2022 eliminating the rebuttable presumption in favor of the
qualifying payment amount (“QPA”) by the IDR entity and providing additional factors the IDR entity should consider when choosing
between two competing offers. CMS regulations and guidance implementing the IDR process has been subject to a significant amount
of provider-initiated litigation. As a result, portions of those regulations and guidance materials have been vacated by a federal district
court, causing CMS to, on several occasions, pause and resume IDR process operations, causing significant delay in the processing of
claims. On October 27, 2023, HHS, the Department of Labor, the Department of the Treasury, and OPM issued a proposed rule
intended to improve the functioning of the federal IDR process. Additionally, arguments made by the plaintiffs in such litigation have
included allegations that CMS’s regulations and guidance materials are favorable to payers. We cannot predict the impact of the
proposed rule on our operations at this time.

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.

Medicaid Federal DSH Allotment:

Although the implementation has been delayed several times, the Legislation (as amended by subsequent federal legislation)

requires annual aggregate reductions in federal Medicaid DSH allotment from FFY 2024 through FFY 2027. Commencing in federal
fiscal year 2024, and continuing through 2027, DSH payments are scheduled to be reduced by $8 billion annually. The most recent CR
(H.R. 2872) enacted into law on January 17, 2024, funds four appropriations bills through March 1, 2024, and eight appropriations
bills through March 8, 2024. This CR also delayed the aforementioned Medicaid Disproportionate Share Hospital cuts through March
8, 2024.

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 and FFY 2023 final rule, as discussed above, and as a result of the COVID-19 pandemic, CMS has
implemented a budget neutral payment policy to fully offset the 2% VBP withhold during each of FFY 2022 and FFY 2023. In FFY
2024, as part of the FFY 2024 IPPS final rule, CMS removed the budget neutral policy that was in place in FFY 2022 and FFY 2023.

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. As part of the
FFY 2023 final rule discussed above, and as a result of the on-going COVID-19 pandemic, CMS will suppress all six measures in the
HAC Reduction Program for the FY 2023 program year and eliminate the HAC reduction program’s one percent payment penalty. In
FFY 2024, as part of the FFY 2024 IPPS final rule, CMS eliminated the suppression of the applicable HAC measures and as a result
reinstated the HAC reduction program.

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. As part of the FFY 2023 IPPS final rule discussed above, CMS will
modify all of the condition-specific readmission measures to include an adjustment for patient history of COVID-19 for FFY 2024.

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 that 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.

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 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: (i) Waivers and Flexibilities for hospitals and
other healthcare facilities including those for physical environment requirements and certain Emergency Medical Treatment & Labor
Act provisions; (ii) Provider Enrollment Flexibilities; (iii) Flexibility and Relief for State Medicaid Programs including those under
section 1135 Waivers, and; (iv) Suspension of Certain Enforcement Activities.

In addition to the national emergency declaration, various forms of legislation were enacted 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 through December 31,
2022, in accordance with specified conditions. The CAA of 2023, signed into law on December 29, 2022, provided for
the transitional reduction of the 6.2% enhanced FMAP during 2023 to 5.0% during the second quarter, 2.5% during the
third quarter and 1.5% during the fourth quarter of 2023.

 Effective April 1, 2023, the CAA of 2023 allows states to initiate Medicaid renewals, post-enrollment verifications, and

redeterminations over a 12-month period for all individuals who are enrolled in such plan (or waiver) as of April 1, 2023.
This activity was previously prohibited as a condition for the receipt of the enhanced FMAP during the PHE. This
Medicaid enrollment related activity is likely to reduce Medicaid beneficiary enrollment. In the states in which we

operate, we cannot predict the extent to which disenrolled Medicaid beneficiaries will be able to replace their Medicaid
coverage with employer-based insurance coverage or via coverage obtained through the ACA Health Insurance
Exchange. We are therefore unable to estimate the impact of this Medicaid enrollment activity on our results of
operations.

Public Health Emergency Declaration

 Up to its expiration on May 11, 2023, the PHE provided for certain Medicare payment provisions that were contingent on
the PHE including the twenty percent (20%) Medicare add-on for inpatient hospital COVID-19 patients noted below.

Reimburse hospitals at Medicare rates for uncompensated COVID-19 care for the uninsured

 Our financial results for 2023 included no revenues recorded in connection with the COVID-19 uninsured program while

our financial results for 2022 included revenues of approximately $22 million.

 Effective March 22, 2022, HHS announced that the HRSA COVID-19 Uninsured Program and Coverage Assistance

Fund is no longer accepting claims due to insufficient funding.

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
June 30, 2022 and partially suspended at a 1% payment reduction for an additional three-month period that ended on June
30, 2022, with a return to the full 2% Medicare payment reduction thereafter.

 Our financial results for 2023 included no revenues recorded in connection with the Medicare sequestration relief

program while our financial results for 2022 included revenues of approximately $17 million.

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.

Included in our financial results were revenues recorded in connection with the COVID-19 add-on program amounting to
approximately $6 million during 2023 and $30 million during 2022. These payments were intended to offset the increased
expenses associated with the treatment of Medicare COVID-19 patients.

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

As reflected on the schedule below, interest expense was $207 million during 2023 and $127 million during 2022 (amounts in

thousands):

Revolving credit & demand notes (a.)
Tranche A term loan facility (a.)
$800 million, 2.65% Senior Notes due 2030 (b.)
$700 million, 1.65% Senior Notes due 2026 (c.)
$500 million, 2.65% Senior Notes due 2032 (d.)
Accounts receivable securitization program (e.)
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

2023

2022

23,139 $

155,673
21,426
11,725
13,380
—

225,343
5,035
1,290
(24,422)
(572)
206,674 $

9,791
68,782
21,426
11,725
13,380
39

125,143
4,903
5,844
(8,623)
(378)
126,889

(a.) As of December 31, 2023, our credit agreement dated November 15, 2010, as amended, provided for the following:



a $1.2 billion aggregate amount revolving credit facility that is scheduled to mature in August, 2026 (which, as of
December 31, 2023, had $701 million of aggregate available borrowing capacity net of $496 million of outstanding
borrowings and $3 million of letters of credit), and;

a tranche A term loan facility with $2.26 billion of outstanding borrowings as of December 31, 2023 (including the
$700 million increase that occurred in June, 2022).

(b.) In September, 2020, we completed the offering of $800 million aggregate principal amount of 2.65% Senior Notes due in

2030.

(c.) In August, 2021, we completed the offering of $700 million aggregate principal amount of 1.65% Senior Notes due in 2026.

(d.) In August, 2021, we completed the offering of $500 million aggregate principal amount of 2.65% Senior Notes due in 2032.

(e.) The accounts receivable securitization program expired on its maturity date in December, 2022 and was not renewed or

replaced.

Interest expense increased by $80 million during 2023 to $207 million as compared to $127 million during 2022. The increase

was primarily due to: (i) a net $102 million increase in aggregate interest expense on our revolving credit, demand notes, senior notes,
term loan facilities and accounts receivable securitization program, resulting from an increase in our aggregate average cost of
borrowings pursuant to these facilities (4.8% during 2023 as compared to 2.8% during 2022), as well as an increase in the aggregate
average outstanding borrowings ($4.63 billion during 2023 as compared to $4.40 billion during 2022), partially offset by; (ii) a net
$22 million decrease in other combined interest expenses, including a $16 million increase in capitalized interest on major projects.

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
facility and accounts receivable securitization program, which amounted to approximately $4.63 billion during 2023 and $4.40 billion
during 2022, were 4.9% during 2023 and 2.9% during 2022.

Provision for Asset Impairments

Our financial statements for the year ended December 31, 2022, include a pre-tax provision for asset impairment of

approximately $58 million, which is included in other operating expenses on the accompanying consolidated statements of income, to
write-down the asset value of Desert Springs Hospital Medical Center, a 282-bed acute care hospital located in Las Vegas, Nevada. In
early 2023, as a result of various competitive pressures and operational challenges experienced in the market, which had a significant
unfavorable impact on the hospital's results of operations during the past year, as well as physical plant constraints and limitations
resulting from the advanced age of the facility (which opened in 1971), we announced plans to discontinue all inpatient operations by
March of 2023. For a period of time, we plan to continue providing emergency department services within a portion of the existing
facility while we construct a new free-standing emergency department on the hospital's campus. The provision for asset impairment
reduced the asset values of the facility's real estate and equipment to their estimated fair values.

During 2021, in connection with the discontinuation of a certain module of a new clinical/financial information technology
application under development, our financial results included 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 statements 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, 2023 and 2022 (dollar amounts in thousands):

Provision for income taxes
Income before income taxes
Effective tax rate

2023
221,119
940,426

2022
209,278
866,260

23.5%

24.2%

The provision for income taxes increased $12 million during 2023, as compared to 2022, due primarily to the income tax
provision recorded in connection with the $54 million increase in pre-tax income ($74 million increase in income before income taxes
partially offset by a $20 million increase in net income attributable to noncontrolling interests).

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 — See disclosure above in Results of Operations-Clinical Staffing, Physician Related Expenses and Effects of

Inflation.

Liquidity

Year ended December 31, 2023 as compared to December 31, 2022:

Net cash provided by operating activities

Net cash provided by operating activities was $1.268 billion during 2023 as compared to $996 million during 2022. The net

increase of $272 million was primarily attributable to the following:



a favorable change of $114 million from other working capital accounts due primarily to the timing of disbursements for
accrued compensation and certain other accrued liabilities;

a favorable change of $76 million in accounts receivable;

a favorable change of $29 million in other assets and deferred charges, and;

$53 million of other combined net favorable 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 57 days at December 31, 2023 and 55 days
at December 31, 2022.

Net cash used in investing activities

Net cash used in investing activities was $763 million during 2023 and $647 million during 2022.

2023:

The $763 million of net cash used in investing activities during 2023 consisted of:



$743 million spent on capital expenditures including capital expenditures for equipment, renovations and new projects at
various existing facilities;

$41 million paid in connection with net cash outflows from forward exchange contracts that hedge our investment in the
U.K. against movements in exchange rates;

$24 million of proceeds received from sales of assets and businesses, and;



$4 million spent on the acquisition of businesses and property.

2022:

The $647 million of net cash used in investing activities during 2022 consisted of:



$734 million spent on capital expenditures including capital expenditures for equipment, renovations and new projects at
various existing facilities;

$95 million received in connection with net cash inflows from forward exchange contracts that hedge our investment in
the U.K. against movements in exchange rates;

$20 million spent on the acquisition of businesses and property, and;

$12 million of proceeds received from sales of assets and businesses.

Net cash used in financing activities

Net cash used in financing activities was $494 million during 2023 and $318 million during 2022.

2023:

The $494 million of net cash used in financing activities during 2023 consisted of the following:

generated $185 million of proceeds from additional borrowings pursuant to our revolving credit facility;

spent $547 million to repurchase shares of our Class B Common Stock in connection with: (i) open market purchases
pursuant to our stock repurchase program ($524 million), and; (ii) income tax withholding obligations related to stock-
based compensation programs ($23 million);

spent $85 million on net repayment of debt as follows: (i) $79 million related to our tranche A term loan facility, and; (ii)
$6 million related to other debt facilities;

spent $55 million to pay quarterly cash dividends of $.20 per share;

generated $14 million from the issuance of shares of our Class B Common Stock pursuant to the terms of employee stock
purchase plans;

spent $7 million to pay profit distributions related to noncontrolling interests in majority owned businesses, and;

received $3 million for the purchase of minority ownership interests in majority owned businesses.



2022:

The $318 million of net cash used in financing activities during 2022 consisted of the following:



generated $705 million of proceeds from new borrowings consisting primarily of $700 million of proceeds generated from
the new tranche A term loan facility which commenced in June, 2022;

spent $833 million to repurchase shares of our Class B Common Stock in connection with: (i) open market purchases
pursuant to our stock repurchase program ($811 million), and; (ii) income tax withholding obligations related to stock-
based compensation programs ($22 million);

spent $89 million on net repayment of debt as follows: (i) $51 million related to our tranche A term loan facility; (ii) $32
million related to our revolving credit facility, and; (iii) $6 million related to other debt facilities;

spent $58 million to pay quarterly cash dividends of $.20 per share;

spent $49 million in connection with the purchase of ownership interests from minority members, net of sales, consisting
primarily of our purchase of George Washington University's 20% ownership in the George Washington University
Hospital (we now own 100% of the hospital);

generated $14 million from the issuance of shares of our Class B Common Stock pursuant to the terms of employee stock
purchase plans;

spent $5 million to pay profit distributions related to noncontrolling interests in majority owned businesses, and;

spent $3 million to pay financing costs.

2024 Expected Capital Expenditures:

During 2024, we expect to spend approximately $850 million to $1.000 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

In June, 2022, we entered into a ninth amendment to our credit agreement dated as of November 15, 2010, as amended and
restated as of September, 2012, August, 2014, October, 2018, August, 2021, and September, 2021, 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”). The ninth amendment provided for, among other things, the following: (i) a new
incremental tranche A term loan facility in the aggregate principal amount of $700 million which is scheduled to mature on August 24,
2026, and; (ii) replaces the option to make Eurodollar borrowings (which bear interest by reference to the LIBO Rate) with Term
Benchmark Loans, which will bear interest by reference to the Secured Overnight Financing Rate (“SOFR”). The net proceeds
generated from the incremental tranche A term loan facility were used to repay a portion of the borrowings that were previously
outstanding under our revolving credit facility.

As of December 31, 2023, our Credit Agreement provided for the following:



a tranche A term loan facility with $2.26 billion of outstanding borrowings as of December 31, 2023.

The tranche A term loan facility provides for installment payments of $30.0 million per quarter through June, 2026. The unpaid

principal balance at June 30, 2026 is payable on the August 24, 2026 scheduled maturity date of the Credit Agreement.

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 term SOFR 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 term SOFR
rate plus 0.1% (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, 2023, the applicable margins were 0.50% for ABR-based loans and 1.50% for
SOFR-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, if sold to
a receivables facility pursuant to the Credit Agreement, 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, 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, 2023 and 2022.

The average amounts outstanding under our Credit Agreement were $2.629 billion during 2023, $2.396 billion during 2022 and
$2.214 billion during 2021. The average effective interest rate on borrowings under our Credit Agreement, including amortization of
deferred financing costs, were 6.80% during 2023, 3.33% during 2022 and 1.69% during 2021.

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.

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, 2023, we had combined aggregate principal of $2.0 billion from the following senior secured notes:



$700 million aggregate principal amount of 1.65% senior secured notes due in September, 2026 (“2026 Notes”) which were
issued on August 24, 2021.

$800 million aggregate principal amount of 2.65% senior secured notes due in October, 2030 (“2030 Notes”) which were
issued on September 21, 2020.

$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.

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 is 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 initially issued 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”). In December, 2022, we completed a registered exchange offer in which virtually all
previously outstanding Notes were exchanged for identical Notes that were registered under the Securities Act, and thereby became
freely transferable (subject to certain restrictions applicable to affiliates and broker dealers). Notes originally issued under Rule 144A
or Regulation S that were not exchanged remain outstanding and may not be offered or sold in the United States absent registration
under the Securities Act or an applicable exemption from registration requirements thereunder.

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.

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
purchase and sale agreement with Universal Health Realty Income Trust (the “Trust”). Pursuant to the terms of the agreement, which
was amended during the first quarter of 2022, 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, as amended, (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 Creek 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 lease payments payable to the
Trust are recorded to interest expense and as a reduction of the outstanding financial liability, and the amount allocated to interest
expense is determined based upon our incremental borrowing rate and the outstanding financial liability. In connection with this
transaction, our consolidated balance sheets at December 31, 2023 and December 31, 2022 reflect financial liabilities, which are
included in debt, of approximately $77 million and $81 million, respectively.

At December 31, 2023, the carrying value and fair value of our debt were approximately $4.9 billion and $4.6 billion,
respectively. At December 31, 2022, the carrying value and fair value of our debt were approximately $4.8 billion and $4.4 billion,
respectively. 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 44% at December 31, 2023 and 45% at December 31,

2022.

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 $701 million of available borrowing capacity as of December 31, 2023, 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.

Supplemental Guarantor Financial Information

As of December 31, 2023, we had combined aggregate principal of $2.0 billion from The Notes:



$700 million aggregate principal amount of the 2026 Notes;



$800 million aggregate principal amount of the 2030 Notes, and;

$500 million of aggregate principal amount of the 2032 Notes.

The Notes are fully and unconditionally guaranteed pursuant to the Guarantees on a senior secured basis by the Subsidiary
Guarantors. 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 Indentures pursuant
to which The Notes were issued ), 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 Indentures, 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.

The Notes will be structurally subordinated to all obligations of our existing and future subsidiaries that are not and do not
become Subsidiary Guarantors of The Notes. No appraisal of the value of the collateral has been made, and the value of the collateral
in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. Consequently,
liquidating the collateral securing The Notes may not produce proceeds in an amount sufficient to pay any amounts due on The Notes.

We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although our Credit Agreement
contains restrictions on the incurrence of additional indebtedness and our Credit Agreement and The Notes contain restrictions on our
ability to incur liens to secure additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and
the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent
us from incurring obligations that do not constitute indebtedness. In addition, if we incur any additional indebtedness secured by liens
that rank equally with The Notes, subject to collateral arrangements, the holders of that debt will be entitled to share ratably with you
in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of our
company. This may have the effect of reducing the amount of proceeds paid to holders of The Notes.

Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of The Notes and the incurrence of the
Guarantees. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary
from state to state, The Notes or the Guarantees (or the grant of collateral securing any such obligations) could be voided as a
fraudulent transfer or conveyance if we or any of the Subsidiary Guarantors, as applicable, (a) issued The Notes or incurred the
Guarantees with the intent of hindering, delaying or defrauding creditors or (b) under certain circumstances received less than
reasonably equivalent value or fair consideration in return for either issuing The Notes or incurring the Guarantees.

Basis of Presentation

The following tables include summarized financial information of Universal Health Services, Inc. and the other obligors in
respect of debt issued by Universal Health Services, Inc. The summarized financial information of each obligor group is presented on
a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-
guarantor subsidiaries, which would otherwise be consolidated in accordance with GAAP, are excluded from the below summarized
financial information pursuant to SEC Regulation S-X Rule 13-01.

The summarized balance sheet information for the consolidated obligor group of debt issued by Universal Health Services, Inc. is

presented in the table below:

(in thousands)
Current assets
Noncurrent assets (1)
Current liabilities
Noncurrent liabilities
Due to non-guarantors
(1) Includes goodwill of $3,267 million and $3,273 million as of December 31, 2023 and 2022, respectively.

2,292,716 $
8,876,623 $
1,786,642 $
5,728,371 $
913,481 $

December 31, 2023

$
$
$
$
$

December 31, 2022
2,062,900
8,773,036
1,686,005
5,587,141
942,731

The summarized results of operations information for the consolidated obligor group of debt issued by Universal Health Services,

Inc. is presented in the table below:

(in thousands)
Net revenues
Operating charges
Interest expense, net
Other (income) expense, net
Net income

Twelve Months Ended
December 31, 2023

Twelve Months
Ended

11,454,260 $
10,416,176
277,521
24,996

556,423 $

December 31, 2022
10,853,259
9,947,778
193,486
7,487
532,047

Affiliates Whose Securities Collateralize the Senior Secured Notes

The Notes and the Guarantees are secured by, among other things, pledges of the capital stock of our subsidiaries held by us or by

our secured Guarantors, in each case other than certain excluded assets and subject to permitted liens. Such collateral securities are
secured equally and ratably with our and the Guarantors’ obligations under our Credit Agreement. For a list of our subsidiaries the
capital stock of which has been pledged to secure The Notes, see Exhibit 22.1 to this Report.

Upon the occurrence and during the continuance of an event of default under the indentures governing The Notes, subject to the
terms of the Security Agreement relating to The Notes provide for (among other available remedies) the foreclosure upon and sale of
the Collateral (including the pledged stock) and the distribution of the net proceeds of any such sale to the holders of The Notes, the
lenders under the Credit Agreement and the holders of any other permitted first priority secured obligations on a pro rata basis, subject
to any prior liens on the collateral.

No appraisal of the value of the collateral securities has been made, and the value of the collateral securities in the event of
liquidation will depend on market and economic conditions, the availability of buyers and other factors. Consequently, liquidating the
collateral securities securing The Notes may not produce proceeds in an amount sufficient to pay any amounts due on The Notes.

The security agreement relating to The Notes provides that the representative of the lenders under our Credit Agreement will

initially control actions with respect to that collateral and, consequently, exercise of any right, remedy or power with respect to
enforcing interests in or realizing upon such collateral will initially be at the direction of the representative of the lenders.

No trading market exists for the capital stock pledged as collateral.

The assets, liabilities and results of operations of the combined affiliates whose securities are pledged as collateral are not

materially different than the corresponding amounts presented in the consolidated financial information of Universal Health Services,
Inc.

Contractual Obligations and Off-Balance Sheet Arrangements

As of December 31, 2023 we were party to certain off balance sheet arrangements consisting of standby letters of credit and

surety bonds which totaled $189 million consisting of: (i) $170 million related to our self-insurance programs, and; (ii) $19 million of
other debt and public utility guarantees.

Obligations under operating leases for real property, real property master leases and equipment amount to $915 million as of
December 31, 2023. 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, 2023:

Long-term debt obligations (a)
Estimated future interest payments on debt
outstanding as of December 31, 2023 (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

Total
$4,912,469

Payments Due by Period (dollars in thousands)
2-3
years

Less than
1 year
$ 126,686

$3,339,067 $

4-5
years
14,942

After
5 years
$1,431,774

913,689
98,601
327,380
914,913

261,671
54,327
75,678
84,621

416,509
44,274
100,288
146,211

81,515
0
78,144
88,333

153,994
0
73,270
595,748

165,073
109,803
$7,441,928

22,675
109,803
$ 735,461

15,427
13,983
0
0
$4,060,332 $ 278,361

112,988
0
$2,367,774

(a) Reflects debt outstanding, after unamortized financing costs, as of December 31, 2023 as discussed in Note 4 to the

Consolidated Financial Statements.

(b) Assumes that all debt outstanding as of December 31, 2023, 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, 2023. 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 two behavioral health care facilities scheduled to be completed in 2025 that,
subject to approval of certain regulatory conditions, we are required to build pursuant to joint-venture agreements with third
parties. In addition, we had various other projects under construction as of December 31, 2023. 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) $65 million related to long-term contracts with third-parties consisting primarily of certain revenue cycle data
processing services for our acute care facilities; (ii) $188 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 facilities; (iii) $4 million for other software applications, and; (iv) $70 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, 2023 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, 2023 includes right of
use assets amounting to $455 million and aggregate operating lease liabilities of $454 million ($72 million included in current
liabilities and $383 million included in noncurrent liabilities).

(f) Consists of $139 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 $26 million of estimated future payments
related to other retirement plan liabilities ($22 million of liabilities recorded in other non-current liabilities as of December 31,
2023 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, 2023, the total net accrual for our professional and general liability claims was $431 million, of which $70

million is included in other current liabilities and $361 million is included in other non-current liabilities. We exclude the $431 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 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 $439 million, approximately $210 million of which was
incurred as of December 31, 2023, which is being entirely funded by the District. Construction of the District Facilities is expected to
be completed during 2025. 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 12-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.

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, 2023. 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)

2024

2025

2026

2027

2028

Thereafter

Total

Long-term debt:
Fixed rate:
Debt
Average interest rates

Variable rate:

Debt
Average interest rates

Interest rate swaps:
Notional amount
Average interest rates

6,686

$
2.4%

6,345

702,847

7,191

2.4%

120,000

$
7.0%

120,000

2,509,875

7.0%

2.8%

0
0.0%

7,751

$
2.8%

0
0.0%

1,431,774

3.2%

0
0.0%

2,162,594

2.7%

2,749,875

7.0%

As calculated based upon our variable rate debt outstanding as of December 31, 2023 that is subject to interest rate fluctuations,

each 1% change in interest rates would impact our pre-tax income by approximately $27 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, 2023, 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 2023

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, 2023, 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, 2023 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 of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule
10b5-1 trading arrangement during the Company’s quarter ended December 31, 2023, as such terms are defined under Item 408(a) of
Regulation S-K.

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, 2023. 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, 2023.

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, 2023.

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, 2023.

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, 2023.

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

Amended and Restated Bylaws of Registrant, previously filed as Exhibit 3.1 to the Company’s Current Report on Form

8-K dated September 21, 2022, is incorporated herein by reference.

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

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.

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.

4.7

Second Supplemental Indenture, dated as of June 23, 2022, among the Company, the Subsidiary Guarantors party

thereto, U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee,
and JPMorgan Chase Bank, N.A., as collateral agent, to the indenture, dated as of September 21, 2020, previously filed
as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 27, 2022, is incorporated herein by reference.

4.8

First Supplemental Indenture, dated as of June 23, 2022, among the Company, the Subsidiary Guarantors party thereto,
U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee, and

No.

Description

JPMorgan Chase Bank, N.A., as collateral agent, to the indenture, dated as of August 24, 2021, previously filed as
Exhibit 4.2 to the Company’s Current Report on Form 8-K dated June 27, 2022, is incorporated herein by reference.

4.9

Third Supplemental Indenture, dated as of November 4, 2022, among the Company, the Subsidiary Guarantors party

thereto, U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee,
and JPMorgan Chase Bank, N.A., as collateral agent, to the indenture, dated as of September 21, 2020, previously filed
as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q dated November 8, 2022, is incorporated herein by
reference.

4.10

10.1

10.2

10.3

10.4

Second Supplemental Indenture, dated as of November 4, 2022, among the Company, the Subsidiary Guarantors party
thereto, U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee,
and JPMorgan Chase Bank, N.A., as collateral agent, to the indenture, dated as of August 24, 2021, previously filed as
Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q dated November 8, 2022, is incorporated herein by
reference.

Agreement, dated December 7, 2023, 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*

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.

10.9*

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.

10.10*

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.

10.11*

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.

No.
10.12*

Description

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.

10.13

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
Report on Form 10-K for the year ended December 31, 2006, is incorporated herein by reference.

10.14*

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.

10.15*

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.

10.16

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.

10.17

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.

10.18

10.19

10.20

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.

10.21

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.

10.22

10.23

10.24

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.

Eighth 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.

Ninth Amendment to Amended and Restated Credit and Security Agreement, dated as of April 22, 2022. previously filed
as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the Quarter dated May 6, 2022, is incorporated
herein by reference.

10.25

Tenth Amendment to Amended and Restated Credit and Security Agreement, dated as of July 22, 2022, previously filed

as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q dated August 8, 2022, is incorporated herein by
reference.

10.26

Eleventh Amendment to Amended and Restated Credit and Security Agreement, dated as of September 20, 2022,
previously filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q dated November 8, 2022, is
incorporated herein by reference.

10.27

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.

No.
10.28

10.29

10.30

Description

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.

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.

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
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.

10.31

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.

10.32

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.

10.33

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.

10.34

10.35

10.36

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.

No.
10.37

10.38

Description

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.

10.39

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 Quarterly Report on Form 10-Q dated November 8, 2021, is
incorporated herein by reference.

10.40

Ninth Amendment and Increased Facility Activation Notice dated as of June 23, 2022, to Credit Agreement, dated as of
November 15, 2010 and as amended and restated as of March 15, 2011, September 21, 2012, May 16, 2013, August 7,
2014, June 7, 2016, October 23, 2018, August 24, 2021 and September 10, 2021, among the Company, JP Morgan Chase
Bank, N.A., as administrative agent and other financial institutions or entities from time to time parties thereto,
previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 27, 2022, is incorporated
herein by reference.

10.41*

Form of Supplemental Life Insurance Plan and Agreement Part A: Alan B. Miller 1998 Dual Life Insurance 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 10.1 to the Company’s Current Report on Form 8-K
dated December 10, 2010, is incorporated herein by reference.

10.42*

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.

10.43*

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.

10.44*

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.

10.45

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.

10.46*

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.

10.47*

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.

No.

Description

10.48*

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.

10.49*

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.

10.50

10.51

10.52

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.

10.53

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
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.

10.54*

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.

10.55*

Amendment, dated as of March 23, 2022, to Employment Agreement, dated as of December 23, 2020, between

Universal Health Services, Inc. and Marc D. Miller, previously filed as Exhibit 10.2 to the Company’s Current Report on
Form 8-K dated March 23, 2022, is incorporated herein by reference.

10.56*

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.

10.57*

Amendment, dated as of March 23, 2022, to Employment Agreement, dated as of December 23, 2020, between

Universal Health Services, Inc. and Alan B. Miller, previously filed as Exhibit 10.3 to the Company’s Current Report on
Form 8-K dated March 23, 2022, is incorporated herein by reference.

10.58

Master Lease Document between certain subsidiaries of Universal Health Services, Inc. and Universal Health Realty

Income Trust, dated December 31, 2021 previously filed as Exhibit 10.54 to the Company’s Annual Report on Form 10-
K dated February 24, 2022, is incorporated herein by reference.

No.
10.59*

10.60*

10.61*

Description

Universal Health Services, Inc. 2022 Executive Incentive Plan, previously filed as Exhibit 10.1 to the Company’s

Current Report on Form 8-K dated March 23, 2022, is incorporated herein by reference.

Universal Health Services, Inc. Amended and Restated 2020 Omnibus Stock and Incentive Plan, previously filed as
Exhibit 99.1 to the Company’s Registration Statement on Form S-8 (File No. 333-265495) dated June 9, 2022, is
incorporated herein by reference.

Form of Restricted Stock Unit Award Agreement under the Universal Health Services, Inc. 2020 Omnibus Stock and
Incentive Plan, previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on August 8,
2022, is incorporated herein by reference.

10.62*

Form of Restricted Stock Units Award Agreement for Named Executive Officers with Employment Agreements, ,

previously filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2022, is incorporated
herein by reference.

10.63*

Form of Restricted Stock Units Award Agreement for Named Executive Officers without Employment Agreements,

previously filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2022, is incorporated
herein by reference.

10.64*

Form of Restricted Stock Units Award Agreement for Directors, previously filed as Exhibit 10.7 to the Company’s

Quarterly Report on Form 10-Q filed on May 6, 2022, is incorporated herein by reference.

10.65*

10.66*

Separation Agreement and General Release by and between UHS of Delaware, Inc. and Marvin Pember effective as of
December 31, 2022, previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K/A dated December
7, 2022, is incorporated herein by reference.

Employment Agreement between Universal Health Services, Inc. and Edward Sim dated October 18, 2022 previously
filed as Exhibit 10.66 to the Company’s Annual Report on Form 10-K dated February 27, 2023, is incorporated herein
by reference.

Statement regarding computation of per share earnings is set forth in Note 1 of the Notes to the Consolidated Financial

Statements.

Subsidiaries of Registrant.

22.1

List of Guarantor Subsidiaries and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize

Securities of the 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)/15d-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)/15d-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.

Universal Health Services, Inc. Clawback Policy.

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags
are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

No.
104

Description

Cover page 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 27, 2024

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

Title

Date

Executive Chairman of the Board

February 27, 2024

Director, President and Chief Executive Officer (Principal
Executive Officer)

February 27, 2024

/s/ NINA CHEN-LANGENMAYR
Nina Chen-Langenmayr

Director

/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

Director

Executive Vice President, Chief Financial Officer and
Secretary

(Principal Financial and Accounting Officer)

February 27, 2024

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, 2023, 2022, and 2021
Consolidated Statements of Comprehensive Income for December 31, 2023, 2022, and 2021
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Changes in Equity for December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
Supplemental Financial Statement Schedule II: Valuation and Qualifying Accounts as of and for December 31, 2023,

2022, and 2021

89
91
92
93
94
97
98

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, 2023 and 2022, 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, 2023, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2023 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,
2023, 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, 2023, the net accounts receivable balance was $2.2 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, 2023, and comparing the calculated balance to management’s estimate of the
net accounts receivable balance.

/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 27, 2024
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 income (loss) 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

2023

Year Ended December 31,
2022
(in thousands, except per share data)

2021

14,281,976 $ 13,399,370

12,642,117

7,107,484
3,757,216
1,532,828
568,041
141,026
13,106,595
1,175,381
206,674
28,281
940,426
221,119
719,307
1,512
717,795 $
10.35 $
10.23 $
69,321
804
70,125

6,762,256
3,445,733
1,474,339
581,861
131,626
12,395,815
1,003,555
126,889
10,406
866,260
209,278
656,982
(18,627)
675,609
9.23
9.14
73,118
714
73,832

$
$
$

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

$
$
$

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):

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 loss (income) attributable to noncontrolling
interests
Comprehensive income attributable to UHS

2023

Year Ended December 31,
2022
(Dollar amounts in thousands)
$

656,982

719,307 $

4,166
15,271
19,437

480
18,957
738,264

(2,869)
(37,310)
(40,179)

(220)
(39,959)
617,023

1,512
736,752 $

(18,627)
635,650

2021

987,632

1,427
(20,743)
(19,316)

(1,487)
(17,829)
969,803

(3,958)
973,761

The accompanying notes are an integral part of these consolidated financial statements.

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

Assets

December 31,

2023
2022
(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

Liabilities and Stockholders’ Equity

Current liabilities:

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
Operating lease liabilities noncurrent
Long-term debt
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 2023 and 6,577,100 shares in 2022
Class B Common Stock, limited voting, $.01 par value; authorized 150,000,000
shares: issued and outstanding 59,930,083 shares in 2023 and 63,375,992 shares in 2022
Class C Common Stock, voting, $.01 par value; authorized 1,200,000 shares: issued
and outstanding 661,688 shares in 2023 and 661,688 shares in 2022
Class D Common Stock, limited voting, $.01 par value; authorized 5,000,000 shares:
issued and outstanding 12,962 shares in 2023 and 14,170 shares in 2022
Cumulative dividends
Retained earnings
Accumulated other comprehensive income

Universal Health Services, Inc. common stockholders’ equity
Noncontrolling interest
Total Equity
Total Liabilities and Stockholders’ Equity

119,439
2,238,265
216,988
236,658
2,811,350

737,226
7,139,980
3,066,339
101,318
11,044,863
(5,652,518)
5,392,345
732,184
6,124,529

3,932,407
85,626
433,962
6,974
572,754
5,031,723
13,967,602

126,686
613,974

549,470
17,436
154,186
71,600
5,375
472,574
2,046
2,013,347

584,007
382,559
4,785,783

5,191

599

0
(659,890)
6,798,930
9,289
6,149,001
47,714
6,196,715
13,967,602

102,818
2,017,722
218,517
198,283
2,537,340

727,313
6,756,228
2,936,992
102,494
10,523,027
(5,167,394)
5,355,633
562,825
5,918,458

3,909,456
68,397
454,650
6,264
599,623
5,038,390
13,494,188

81,447
636,601

470,858
16,243
110,889
67,776
2,397
523,600
4,608
1,914,419

487,669
395,522
4,726,533

4,695

637

0
(604,127)
6,533,667
(9,668)
5,920,582
44,768
5,965,350
13,494,188

The accompanying notes are an integral part of these consolidated financial statements.

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Common Stock

Issued/(converted) including tax benefits from
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Stock option expense
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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, 2021

Redeemable
Noncontrolling
Interest

4,569

—
—
—
—
—
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U
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I
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V
UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
S
E
O
R
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
L
t
S
h
For the Years Ended December 31, 2023, 2022 and 2021
I
A
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(in thousands)
—
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s
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The accompanying notes are an integral part of these consolidated financial statements.

Accumulated
Other
Comprehensive
Income (Loss)
48,120

UHS
Common

Stockholders'

Equity

Noncontrolling
Interest

6,317,146

84,821

Total
6,401,967

—
—
—
—
—
—
—
—

—

(18,914)

1,085
(17,829)
30,291

13,374
(1,220,875)
12,936
(65,984)
59,306
—
—
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991,590

(18,914)

—
—
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(6,878)
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16,247

(4,710)

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(1,220,875)
12,936
(65,984)
59,306
(6,878)
13,909
16,247

986,880

(18,914)

1,085
973,761
6,089,664

—
(4,710)
103,389

1,085
969,051
6,193,053

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UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)
For the Years Ended December 31, 2023, 2022 and 2021
(in thousands)

Balance, January 1, 2022
Common Stock

Redeemable
Noncontrolling
Interest

5,119

Issued/(converted) including tax benefits from
exercise of stock options
Repurchased
Restricted share-based compensation expense

Dividends paid
Stock option expense
Acquisition of noncontrolling interest in majority owned
business
Distributions to noncontrolling interests
Purchase of ownership interests by minority members
Comprehensive income:

Net income to UHS / noncontrolling interests
Foreign currency translation adjustments (net of
income tax effect of $469)
Minimum pension liability (net of income tax effect
of $689)

Subtotal - comprehensive income
Balance, December 31, 2022

—
—
—
—
—

—
(650)
—

226

—

—
226
4,695

Class A
Common

Class B
Common

Class C
Common

Class D
Common

Cumulative
Dividends

Retained
Earnings

—
—
—
—
—

—
—
—

—

—
—
66

698

11
(72)
—
—
—

—
—
—

—

—
—
637

—
—
—
—
—

—
—
—

—

—
—
7

—

—
—
—
—
—

—
—
—

—

—
—
—

(545,487)

6,604,089

—
—
—
(58,640)
—

—
—
—

—

14,196
(832,846)
17,649
—
66,244

(11,274)
—
—

675,609

—

—
—
(604,127)

—
675,609
6,533,667

Accumulated
Other
Comprehensive
Income (Loss)
30,291

UHS
Common

Stockholders'

Equity

Noncontrolling
Interest

6,089,664

103,389

Total
6,193,053

—
—
—
—
—

—
—
—

—

(37,779)

(2,180)
(39,959)
(9,668)

14,207
(832,918)
17,649
(58,640)
66,244

(11,274)
—
—

675,609

(37,779)

(2,180)
635,650
5,920,582

—
—
—
—
—

(37,608)
(4,741)
2,581

(18,853)

—

—
(18,853)
44,768

14,207
(832,918)
17,649
(58,640)
66,244

(48,882)
(4,741)
2,581

656,756

(37,779)

(2,180)
616,797
5,965,350

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, 2023, 2022 and 2021
(in thousands)

Redeemable
Noncontrolling
Interest

4,695

Class A
Common

Class B
Common

Class C
Common

Class D
Common

Cumulative
Dividends

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

UHS
Common

Stockholders'

Equity

Noncontrolling
Interest

(604,127)

6,533,667

(9,668)

5,920,582

44,768

Balance, January 1, 2023
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
Comprehensive income:

Net income to UHS / noncontrolling interests
Foreign currency translation adjustments (net of
income tax effect of $520)
Minimum pension liability (net of income tax effect
of $1,000)

Subtotal - comprehensive income
Balance, December 31, 2023

—
—
—
—
—
(1,050)
—

1,546

—

—
1,546
5,191

—
—
—
—
—
—
—

—

—
—
66

637

3
(41)
—
—
—
—
—

—

—
—
599

—
—
—
—
—
—
—

—

—
—
7

—

—
—
—
—
—
—
—

—

—
—
—

—
—
—
(55,763)
—
—
—

—

13,760
(552,567)
22,032
—
64,243
—
—

717,795

—

—
—
(659,890)

—
717,795
6,798,930

—
—
—
—
—
—
—

—

15,791

3,166
18,957
9,289

13,763
(552,608)
22,032
(55,763)
64,243
—
—

717,795

15,791

—
—
—
—
—
(5,780)
8,760

(34)

—

Total
5,965,350

13,763
(552,608)
22,032
(55,763)
64,243
(5,780)
8,760

717,761

15,791

3,166
736,752
6,149,001

—
(34)
47,714

3,166
736,718
6,196,715

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
(Gain) loss 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
(Outflows) inflows 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

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 (sale) of ownership interests by (from) minority member

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Increase (decrease) 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

2023

Year Ended December 31,
2022
(Amounts in thousands)

2021

719,307 $

656,982

987,632

568,041
(6,250)
87,720
0
0

(182,444)
1,193
(43,450)
(32,321)
2,978
48,517
39,133
183,462
(118,089)
1,267,797

(743,055)
(3,728)

581,861
584
85,378
0
57,550

(258,338)
1,835
(29,510)
(146,692)
2,391
19,918
(8,676)
174,723
(141,983)
996,023

(734,001)
(20,309)

(40,695)
24,187

94,913
12,001

0
16
(763,275)

(85,480)
185,100
(308)
(547,363)
(55,480)
13,654
(6,830)
2,762
(493,945)
3,056
13,633
200,837
214,470 $

200,446 $
257,896 $
66,899 $

0
100
(647,296)

(89,367)
705,321
(3,164)
(832,918)
(58,449)
14,068
(5,391)
(48,500)
(318,400)
(8,424)
21,903
178,934
200,837

120,136
250,759
72,064

$
$
$

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
(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

$
$
$

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.

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-

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

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 2023, 2022 or 2021 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, 2023, 2022 and 2021:

Charity care
Uninsured discounts
Total uncompensated care

2023

Amount

(dollar amounts in thousands)
2022

Amount

2021

Amount

$
843,449
1,792,493
$ 2,635,942

32% $
786,962
68% 1,474,933
100% $ 2,261,895

35% $
661,965
65% 1,336,319
100% $ 1,998,284

33%
67%
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
Estimated cost of providing uncompensated care

2023

(amounts in thousands)
2022

83,383 $

177,206
260,589 $

85,434 $
160,122
245,556 $

2021

72,095
145,538
217,633

Concentration of Revenues: Our seven acute care hospitals and seven free-standing emergency departments in the Las Vegas,

Nevada, market contributed, on a combined basis, 14% in 2023, 15% in 2022 and 16% in 2021 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)
2022
102,818 $
98,019
200,837 $

2023
119,439 $
95,031
214,470 $

2021
115,301
63,633
178,934

(a) Restricted cash is included in other assets on the accompanying consolidated balance sheets 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.

Our financial statements for the year ended December 31, 2022, include a pre-tax provision for asset impairment of

We capitalized interest during the construction period of major construction projects and during the development and
implementation of information technology applications amounting to $24.4 million during 2023, $8.6 million during 2022 and $4.4
million during 2021.

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 $535.6 million during 2023, $544.0 million during 2022
and $501.6 million during 2021.

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, 2023 which indicated no impairment of goodwill. There were also no goodwill
impairments during 2022 or 2021. 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, 2023 were as follows (in thousands):

Balance, January 1, 2022
Goodwill acquired during the period
Goodwill divested during the period
Adjustments to goodwill (a)
Balance, December 31, 2022
Goodwill acquired during the period
Goodwill divested during the period
Adjustments to goodwill (a)
Balance, December 31, 2023

Acute Care
Services

Behavioral
Health
Services

0
0
(53,858)

Total
Consolidated
515,936 $ 3,446,688 $ 3,962,624
—
0
(53,168)
3,392,830 3,909,456
4,598
(6,062)
24,415
516,628 $ 3,415,779 $ 3,932,407

0
0
690
516,626
0
0
2

4,598
(6,062)
24,413

(a)

The changes in the Behavioral Health Services’ goodwill consist of 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 ($113 million and $116
million as of December 31, 2023 and 2022, respectively); (v) deposits; (vi) investments in various businesses, including Universal
Health Realty Income Trust ($7 million and $8 million as of as of December 31, 2023 and 2022, respectively) and Premier, Inc. ($50
million and $78 million as of December 31, 2023 and 2022, respectively); (vii) the invested assets related to a deferred compensation

100

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, 2023. There
were no impairments in 2023 or 2022. 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.

The following table shows the amounts recorded as net intangible assets for the years ended December 31, 2023 and 2022:

Medicare licenses (a)
Certificates of need
Contract relationships and other (net of $56,288 and $55,353 of
accumulated amortization for 2023 and 2022, respectively)
Net Intangible Assets

(a) Indefinite lives.

(amounts in thousands)

2023

2022

57,226 $
7,501

12,291
77,018 $

57,226
7,989

12,887
78,102

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,

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. See Note 8 - Commitments and Contingencies for additional disclosure related to
our self-insured general and professional liability and workers’ compensation liability.

Due to recent guidance and enacted laws surrounding the global 15% minimum tax rate that will be effective after 2024 from

the Organization for Economic Co-operation and Development ("OECD") as well as jurisdictions that we operate in. We do not expect
these adverse effects to be material and will continue to monitor changes in tax policies and laws issued by the OECD and
jurisdictions that we operate in.

We operate in multiple jurisdictions with varying tax laws. We are subject to audits by any of these taxing authorities. 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, and liabilities incurred in connection with
split-dollar life insurance agreements on the lives of our executive chairman of the board and his wife.

Redeemable Noncontrolling Interests and Noncontrolling Interest: As of December 31, 2023, outside owners held
noncontrolling, minority ownership interests of: (i) approximately 7% in an acute care facility located in Texas; (ii) 49%, 20%, 30%,
20%, 25%, 48% and 26% in seven behavioral health care facilities located in Arizona, Pennsylvania, Ohio, Washington, Missouri,
Iowa and Michigan, respectively, and; (iii) approximately 5% in an acute care facility located in Nevada. The noncontrolling interest

101

and redeemable noncontrolling interest balances of $48 million and $5 million, respectively, as of December 31, 2023, consist
primarily of the third-party ownership interests in these hospitals.

In August, 2022, we purchased the 20% noncontrolling ownership interest in a hospital majority owned by us, located in
Washington D.C. for $51 million. We now have 100% ownership interest in the hospital. The noncontrolling interest balance was
reclassified to retained earnings and is included in common stockholders’ equity in the accompanying consolidated balance sheets and
in retained earnings in the accompanying consolidated statements of changes in equity.

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 sheets, 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 sheets reflect 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, 2023 were as follows (in thousands):

Balance, January 1, 2022, net of income tax
2022 activity:
Pretax amount
Income tax effect
Change, net of income tax
Balance, January 1, 2023, net of income tax
2023 activity:
Pretax amount
Income tax effect
Change, net of income tax
Balance, December 31, 2023, net of income tax

Net Unrealized
Gains (Losses) on
Effective Cash
Flow Hedges

(17) $

Foreign
Currency
Translation
Adjustment
33,524

Minimum
Pension
Liability

Total
AOCI

(3,216) $

30,291

0
0
0
(17)

(37,310)
(469)
(37,779)
(4,255)

(2,869)
689
(2,180)
(5,396)

0
0
0
(17) $

15,271
520
15,791
11,536

4,166
(1,000)
3,166
(2,230) $

(40,179)
220
(39,959)
(9,668)

19,437
(480)
18,957
9,289

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
of the derivative instrument on the balance sheets as either an asset or liability, with a corresponding amount recorded in accumulated
other comprehensive income (“AOCI”) within statements of changes in 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.

We use forward exchange contracts to hedge our net investment in foreign operations against movements in exchange rates. The

102

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 (in thousands,

except per share data):

Basic and diluted:
Net Income
Less: Net (income) loss attributable to noncontrolling
interest ("NCI")
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
2022
2023

719,307 $

656,982 $

987,632

(1,512)

18,627

3,958

(308)
717,487 $

(748)
674,861 $

(2,059)
989,531

69,321
10.35 $

73,118
9.23 $

82,519
11.99

69,321

73,118

82,519

804

714

1,173

70,125
10.23 $

73,832
9.14 $

83,692
11.82

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 5.1 million during 2023, 6.0 million during 2022 and 4.2 million during 2021.

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
sheets 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

103

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
sheets. Based upon the closing price of Premier’s stock on each respective date, the market value of our shares of Premier was $50
million and $78 million as of December 31, 2023 and 2022, respectively. The change in market value of these shares is recorded as an
unrealized gain/loss and included in “Other (income) expense, net” on our consolidated statements of income. Additionally, Premier
paid cash dividends of $1.9 million during 2023, $1.8 million during 2022 and $1.7 million during 2021, which are included in “Other
(income) expense, net” in our 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 $853 million during 2023, $784 million during 2022 and $641 million during 2021. These revenues were offset by
Provider Taxes of approximately $297 million during 2023, $287 million during 2022 and $211 million during 2021, which are
recorded in other operating expenses on the consolidated statements of income as included herein. The aggregate net benefit from
these programs was $556 million during 2023, $497 million during 2022 and $430 million during 2021. 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 state plan
amendment programs, we earned revenues of $73 million in 2023, $75 million in 2022 and $74 million in 2021.

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.

Recent Accounting Standards: In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment

Disclosures (Topic 280)”. ASU 2023-07 modifies reportable segment disclosure requirements, primarily through enhanced disclosures
about segment expenses categorized as significant or regularly provided to the Chief Operating Decision Maker (CODM). In addition,
the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment
measures of profit or loss, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better
understand an entity’s overall performance and assess potential future cash flows. This ASU is effective for annual periods beginning
after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption
permitted. We are currently evaluating the impact this new standard will have on the related disclosures in the consolidated financial
statements, but do not believe there will be a material impact.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures (Topic 740)”. ASU 2023-09

requires enhanced disclosures on income taxes paid, adds disaggregation of continuing operations before income taxes between
foreign and domestic earnings and defines specific categories for the reconciliation of jurisdictional tax rate to effective tax rate. This
ASU is effective for fiscal years beginning after December 15, 2024, and can be applied on a prospective basis. We are currently
evaluating the impact this new standard will have on the related disclosures in the consolidated financial statements.

From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by us as of
the effective date or, in some cases where early adoption is permitted, in advance of the effective date. We have assessed the recently
issued guidance that are not yet effective and, unless otherwise indicated above, we believe 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

104

for revenues and expenses. The currency translation adjustments are reported as a component of accumulated other comprehensive
income. See Note 3 - Financial Instruments and Fair Value Measurement for additional disclosure.

2) ACQUISITIONS AND DIVESTITURES

Year ended December 31, 2023:

2023 Acquisitions of Assets and Businesses:

During 2023, we spent $4 million on the acquisition of businesses and properties.

2023 Divestiture of Assets and Businesses:

During 2023, we received $24 million from the sale of assets and businesses.

Year ended December 31, 2022:

2022 Acquisitions of Assets and Businesses:

During 2022, we spent $20 million to acquire various businesses and properties.

2022 Divestiture of Assets:

During 2022, we received $12 million from the sales of various assets.

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.

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 outflows of approximately $41 million during 2023, and net cash inflows of
approximately $95 million during 2022 and $1 million during 2021.

Derivatives Hedging Relationships:

The following table presents the effects of our foreign currency foreign exchange contracts on our results of operations for the

three years ended December 31 (in thousands):

Gain/(Loss) recognized in AOCI

December 31,

2023

2022

2021

Net Investment Hedge relationships
Foreign currency foreign exchange contracts

(45,748)

96,698

(7,272)

No other gains or losses were recognized in income related to derivatives in Subtopic 815-20.

105

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.

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

Liabilities:
Foreign currency foreign exchange
contracts
Deferred compensation liability

(in thousands)
Assets:
Money market mutual funds
Certificates of deposit
Equity securities
Deferred compensation assets
Foreign currency foreign exchange
contracts

Liabilities:
Deferred compensation liability

Balance at
December 31, 2023

Balance Sheet
Location

Basis of Fair Value Measurement
Level 2

Level 3

Level 1

111,129 Other noncurrent assets
2,300 Other noncurrent assets
49,923 Other noncurrent assets
43,060 Other noncurrent assets

206,412

$ 111,129

49,923
43,060
$ 204,112 $

2,300

1,911 Accrued liabilities other
43,060 Other noncurrent liabilities
44,971

$
43,060
43,060 $

1,911

Balance at
December 31, 2022

Balance Sheet
Location

Basis of Fair Value Measurement
Level 2

Level 3

Level 1

$
$

113,649 Other noncurrent assets
2,200 Other noncurrent assets
78,099 Other noncurrent assets
38,032 Other noncurrent assets

$ 113,649

78,099
38,032

3,142 Other current assets

235,122

$ 229,780 $

38,032 Other noncurrent liabilities $
$
38,032

38,032
38,032

2,200

3,142
5,342

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 foreign
currency exchange contracts is valued using quoted forward exchange rates and spot rates at the reporting date.

106

4) LONG-TERM DEBT

A summary of long-term debt follows:

Long-term debt:

Notes and Mortgages payable (including obligations under finance leases of $72,693 in
2023 and $75,595 in 2022) and term loans with varying maturities through 2099;
weighted average interest rates of 3.5% in 2023 and 3.6% in 2022 (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 $1,517 in 2023 and
$1,742 in 2022
1.65% Senior Secured Notes due 2026, net of unamortized discount of $463 in 2023 and
$638 in 2022
2.65% Senior Secured Notes due 2032, net of unamortized discount of $994 in 2023 and
$1,124 in 2022

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

Credit Facilities and Outstanding Debt Securities

December 31,

2023

2022

(amounts in thousands)

178,511 $

2,258,750
495,500

798,483

699,537

499,006
4,929,787
(17,318)
4,912,469
(126,686)
4,785,783 $

184,800
2,338,125
310,400

798,258

699,362

498,876
4,829,821
(21,841)
4,807,980
(81,447)
4,726,533

As of December 31, 2023, our Credit Agreement provided for the following:



a tranche A term loan facility with $2.26 billion of outstanding borrowings as of December 31, 2023.

The tranche A term loan facility provides for installment payments of $30.0 million per quarter through June, 2026. The unpaid

principal balance at June 30, 2026 is payable on the August 24, 2026 scheduled maturity date of the Credit Agreement.

The Credit Agreement includes a material adverse change clause that must be represented at each draw. The Credit Agreement

107

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.

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, 2023, we had combined aggregate principal of $2.0 billion from the following senior secured notes:



$700 million aggregate principal amount of 1.65% senior secured notes due in September, 2026 (“2026 Notes”) which were
issued on August 24, 2021.

$800 million aggregate principal amount of 2.65% senior secured notes due in October, 2030 (“2030 Notes”) which were
issued on September 21, 2020.

$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.

Interest on the 2026 Notes is payable on March 1st and September 1st until the maturity date of September 1, 2026. Interest on

The 2026 Notes, 2030 Notes and 2032 Notes (collectively “The Notes”) were initially issued only to qualified institutional

As discussed in Note 9 to the Consolidated Financial Statements-Relationship with Universal Health Realty Income Trust and

108

transaction, our consolidated balance sheets at December 31, 2023 and December 31, 2022 reflect financial liabilities, which are
included in debt, of approximately $77 million and $81 million, respectively.

The aggregate scheduled maturities of our total debt outstanding as of December 31, 2023 are as follows:

2024
2025
2026
2027
2028
Later
Total maturities before unamortized financing costs
Less-Unamortized financing costs
Total

5) COMMON STOCK

Dividends

(000s)

126,686
126,345
3,220,447
7,191
7,751
1,441,367
4,929,787
(17,318)
4,912,469

We declared and paid cash dividends of $.80 per share during each of the last three years amounting to, in the aggregate, $55.5

million during 2023, $58.4 million during 2022 and $65.9 million during 2021. All classes of our common stock have similar
economic rights.

Stock Repurchase Programs

As of January 1, 2023, we had an aggregate available purchase authorization of $947.37 million. As of December 31, 2023, we

had an aggregate available repurchase authorization of $422.88 million. 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.

The following schedule provides information related to our stock repurchase program for each of the three years ended
December 31, 2023. During 2023, 3,855,046 shares ($524.5 million in the aggregate) were repurchased pursuant to the terms of the
stock repurchase program and 164,649 shares ($22.9 million in the aggregate) were repurchased in connection with the income tax
withholding obligations resulting from stock-based compensation programs. During 2022, 6,666,547 shares ($810.9 million in the
aggregate) were repurchased pursuant to the terms of the stock repurchase program and 153,305 shares ($22.0 million in the
aggregate) were repurchased in connection with the income tax withholding obligations resulting from stock-based compensation
programs. During 2021, 8,409,721 shares ($1.20 billion in the aggregate) were repurchased pursuant to the terms of the stock
repurchase program and 134,464 shares ($19.5 million in the aggregate) were repurchased in connection with the income tax
withholding obligations resulting from stock-based compensation programs.

Additional
dollars
authorized
for
repurchase
(in
thousands)

Total
number of
shares
purchased
(a.)

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

Average
price paid
per share
for shares
purchased
as part of
publicly
announced
program

Aggregate
purchase
price paid
for shares
purchased
as part of
publicly
announced
program

Aggregate
purchase
price paid
(in
thousands)

$ 1,000,000 8,559,946
$ 1,400,000 6,828,319
— 4,022,051
$

15,756
8,467
2,356

$ 2,400,000 19,410,316

26,579

$
$
$

0.01
0.01
0.01

8,409,721
6,666,547
3,855,046

0.01

18,931,314

$
$
$

142.85
121.63
136.05

$ 1,220,876 $ 1,201,330
$ 832,915 $ 810,865
$ 547,362 $ 524,485

133.99

$ 2,601,153 $ 2,536,680

Maximum
number of
dollars
that may
yet be
purchased
under the
program
(in
thousands)

$
$
$
$

559,563
358,233
947,368
422,883

Balance as of
January 1, 2021
2021
2022
2023
Total for three year
period ended
December 31, 2023

(a.)

Includes 2,356, 8,467 and 15,756 of restricted shares that were forfeited by former employees pursuant to the terms of our restricted stock purchase plan
during 2023, 2022 and 2021, respectively.

109

Stock-based Compensation Plans

At December 31, 2023, 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 (computed utilizing the Black-Scholes option-pricing model) and other equity-based
compensation pursuant to the straight-line method over the stated vesting period of the awards.

Pre-tax share-based compensation costs of $64.2 million during 2023, $66.2 million during 2022 and $59.3 million during 2021

were recognized related to outstanding stock options. In addition, pre-tax compensation costs of $22.0 million during 2023, $19.1
million during 2022 and $14.4 million during 2021 were recognized related to amortization of restricted stock and units as well as
discounts provided in connection with shares purchased pursuant to our 2005 Employee Stock Purchase Plan. As of December 31,
2023, there was approximately $158.5 million of unrecognized compensation cost related to unvested stock options and restricted
stock which is expected to be recognized over the remaining average vesting period of 2.4 years.

The expense associated with stock-based compensation arrangements is a non-cash charge. In the consolidated statements of
cash flows, stock-based compensation expense is an adjustment to reconcile net income to cash provided by operating activities and
aggregated to $87.7 million in 2023, $85.4 million in 2022 and $73.7 million in 2021. In connection with our January 1, 2017
adoption of ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment
Accounting”, our provision for income taxes and our net income attributable to UHS were unfavorably impacted by $4.7 million
during 2023, unfavorably impacted by $636,000 during 2022 and favorably impacted by $2.4 million in 2021.

In 2005, we adopted the 2005 Stock Incentive Plan (the “Stock Incentive Plan”) which was amended in 2008, 2010, 2015 and

2017 and was canceled in 2020, as discussed below. An aggregate of 35.6 million shares of Class B Common Stock had been reserved
under the Stock Incentive Plan, the remaining balance of which was canceled in 2020. During 2020 stock options, net of cancellations,
of approximately 2.2 million were granted under the Stock Incentive Plan. Stock options to purchase Class B Common Stock have
been granted to our officers, key employees and members of our Board of Directors. Commencing in 2018, our key employees and
non-executive officers began receiving a portion of their stock-based compensation in the form of restricted stock (as discussed below)
in addition to receiving options to purchase Class B Common Stock.

In 2020, we adopted the 2020 Omnibus Stock and Incentive Plan (the “2020 Stock Incentive Plan”) which was amended in
2022. An aggregate of 12.1 million shares of Class B Common Stock has been reserved for issuance under the 2020 Stock Incentive
Plan. Under the 2020 Stock Incentive Plan, shares that are subject to stock options shall be counted as one share per stock option, and
every share that is subject to restricted stock awards or restricted stock units shall be counted as four shares. Various other types of
equity awards are also permitted under the 2020 Stock Incentive Plan. During 2023, approximately 1.8 million stock options, net of
cancellations, and 271,093 restricted stock units (including 93,606 performance based restricted stock units, net of cancellations) were
granted under the 2020 Stock Incentive Plan. During 2022, approximately 1.5 million stock options, net of cancellations, and
215,244 restricted stock units (including 65,768 performance based restricted stock units, net of cancellations) were granted under the
2020 Stock Incentive Plan. During 2021, approximately 2.0 million stock options, net of cancellations, and 119,004 of restricted stock
units, net of cancellations, were granted under the 2020 Stock Incentive Plan. Restricted stock and restricted stock units issued under
the 2020 Stock Incentive Plan do not have rights to receive dividends on unvested restricted awards, however, the accrual of dividend
equivalents on unvested restricted awards may be permitted. Upon adoption of the 2020 Stock Incentive Plan, no additional awards
were granted under the 2005 Stock Incentive Plan or the 2010 Employees’ Restricted Stock Purchase Plan (discussed below), and
reserves for future issuance pursuant to each plan were canceled.

The per option weighted-average grant-date fair value of options granted during 2023 under the 2020 Stock Incentive Plan was

$41.88. The per option weighted-average grant-date fair value of options granted during 2022 under the 2020 Stock Incentive Plan
was $45.63. The per option weighted-average grant-date fair value of options granted during 2021 under the 2020 Stock Incentive
Plan was $39.66. All stock options issued in 2023 and 2022 were granted with an exercise price equal to the fair market value on the
date of the grant. Stock options granted during 2021 were either granted with an exercise price equal to the fair market value on the
date of grant, or for our named executive officers, half of their total option award value was issued with a premium exercise price of
10% above the grant date fair market value. The majority of options are exercisable ratably over a four-year period beginning one
year after the date of the grant. All outstanding options expire five years after the date of the grant. As of December 31, 2023,
approximately 4.31 million shares of Class B Common Stock remain available for issuance pursuant to the 2020 Stock Incentive Plan.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model. The
following weighted average assumptions were derived from averaging the number of options granted during the most recent five-year
period. The weighted-average assumptions reflected below were based upon thirty option grants for the five-year period ending

110

December 31, 2023, twenty-nine option grants for the five-year period ending December 31, 2022 and twenty-eight option grants for
the five-year period ending December 31, 2021.

Year Ended December 31,
Expected volatility
Risk free Interest rate
Expected life (years)
Forfeiture rate
Dividend yield

2023

2022

2021

36%
2%

3.5

7%
0.7%

33 %
2 %

3.6

7 %
0.6 %

31%
2%

3.5

8%
0.5%

The risk-free rate is based on the U.S. Treasury zero coupon four year yield curve in effect at the time of grant. The expected

life of the stock options granted was estimated using the historical behavior of employees. Expected volatility was based on historical
volatility for a period equal to the stock option’s expected life. Expected dividend yield is based on our dividend yield at the time of
grant. The forfeiture rate is based upon the actual historical forfeitures utilizing the 5-year term of the option.

The table below summarizes our stock option activity during the year ended December 31, 2023:

Outstanding Options
Balance, January 1, 2023

Granted
Exercised
Cancelled

Balance, December 31, 2023
Outstanding options vested and exercisable as of
December 31, 2023

Number
of Shares

7,875,667 $
1,916,756 $
(2,575,468) $
(422,161) $
6,794,794 $

Weighted
Average
Exercise
Price

122.04
118.78
121.22
126.87
121.13

2,450,613 $

114.96

The following table provides information about unvested options for the year ended December 31, 2023:

Unvested options as of January 1, 2023
Granted
Vested
Cancelled
Unvested options as of December 31, 2023

Weighted
Average
Grant Date
Fair Value

35.09
41.88
31.64
40.09
39.22

Shares
4,801,953 $
1,916,756 $
(1,989,313) $
(385,215) $
4,344,181 $

The following table provides information regarding all options outstanding at December 31, 2023:

Number of options outstanding
Weighted average exercise price
Aggregate intrinsic value as of December 31, 2023
Weighted average remaining contractual life (years)

Options
Outstanding

Options
Exercisable

121.13 $

6,794,794 2,450,613
$
114.96
$212,853,349 $ 91,893,004
1.5
2.6

The total in-the-money value of all stock options exercised during the years ended December 31, 2023, 2022 and 2021 were

$57.1 million, $49.4 million and $52.0 million, respectively.

111

The weighted average remaining contractual life for options outstanding and weighted average exercise price per share for

exercisable options at December 31, 2021, 2022 and 2023 were as follows:

Year Ended:

2021
2022
2023

Weighted
Average
Exercise Price
Per Share

Weighted
Average
Remaining
Contractual Life
(in Years)

116.80
122.04
121.13

2.6
2.5
2.6

Options
Outstanding
Shares

8,556,115
7,875,667
6,794,794

Exercisable
Options
Shares

2,997,296
3,073,714
2,450,613

Weighted
Average
Exercise Price
Per Share

119.00
116.89
114.96

Expected to
Vest
Options
Shares

5,005,113
4,508,480
4,178,237

Weighted
Average
Exercise Price
Per Share

116.94
121.89
124.86

As mentioned above, in 2020, we adopted the 2020 Stock Incentive Plan. During 2023, 2022 and 2021 restricted stock units,

net of cancellations, of approximately 271,093 (including 93,606 performance based restricted stock units), 215,244 (including 65,768
performance based restricted stock units, net of cancellations) and 119,004, respectively, were granted under the 2020 Stock Incentive
Plan with four-year vesting periods from the date of grant. The weighted average grant-date fair value of the restricted stock units
issued during 2023, 2022 and 2021 under the 2020 Stock Incentive Plan was $118.14, $142.70 and $138.80, respectively. The fair
value of each restricted stock unit was determined as the closing UHS market price on the date of grant. Restricted shares and/or units
of Class B Common Stock have been granted to our officers, key employees and members of our Board of Directors.

In addition to the 2020 Stock Incentive Plan, we have our 2005 Employee Stock Purchase Plan (the “Employee Stock Plan”)
which allows eligible employees to purchase shares of Class B Common Stock at a ten percent discount. There were 100,507, 127,538
and 96,179 shares issued pursuant to the Employee Stock Purchase Plan during 2023, 2022 and 2021, respectively. In connection
with the Employee Stock Plan, we have reserved 2.0 million shares of Class B Common Stock for issuance and have issued
approximately 1.8 million shares as of December 31, 2023. As of December 31, 2023, approximately 200,000 shares of Class B
Common Stock remain available for issuance pursuant to this plan.

At December 31, 2023, 20,543,028 shares of Class B Common Stock were reserved for issuance upon conversion of shares of

6) INCOME TAXES

Components of income tax expense/(benefit) are as follows (amounts in thousands):

Current

Federal
Foreign
State

Deferred
Federal
Foreign
State

Total

2023

Year Ended December 31,
2022

2021

202,895 $
6,505
29,677
239,077

(19,716)
3,367
(1,609)
(17,958)
221,119 $

178,666
14,740
33,423
226,829

(9,935)
(1,509)
(6,107)
(17,551)
209,278

276,471
13,754
44,993
335,218

(26,638)
1,521
(4,420)
(29,537)
305,681

Our provision for income taxes for the years ended December 31, 2023, 2022 and 2021 included tax expenses of $5 million, tax

expenses of $1 million and tax benefits of $2 million, respectively, related to employee share-based payments. Excess tax benefits
(when the deductible amount related to the settlement of employee equity awards for tax purposes exceeds the cumulative
compensation cost recognized for financial reporting purposes) and deficiencies, if applicable, are recorded as a component of our tax
provision.

The foreign provision for income taxes is based on foreign pre-tax earnings of $80 million in 2023, $76 million in 2022 and $79

million in 2021. In the future, we anticipate repatriating only previously taxed foreign earnings subjected as well as any future
earnings that would qualify for a full dividend received deduction for distributions post-December 31, 2017. As of December 31,
2023, the amount of previously taxed earnings and earnings that would qualify for a full dividend received deduction total $100
million. At this time, there are no material tax effects related to future cash repatriation of undistributed foreign earnings. As such, we
have not recognized a deferred tax liability related to existing undistributed earnings.

On August 16, 2022, the U.S. federal government enacted the Inflation Reduction Act of 2022 (“the Act”). The Act includes tax

provisions, among other things, which implements (i) a 15 percent minimum tax on book income of certain large corporations; (ii) a

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one percent excise tax on net stock repurchases; and (iii) several tax incentives to promote clean energy. The Act does not have a
material impact on our income tax provision.

A reconciliation between the federal statutory rate and the effective tax rate is as follows:

Federal statutory rate
State taxes, net of federal income tax benefit
Tax effects of foreign operations
Tax benefit from settlement of employee equity awards
Other items
Impact of income attributable to noncontrolling interests

Effective tax rate

2023

Year Ended December 31,
2022

2021

21.0%
2.4%
-0.7%
0.4%
0.4%
0.0%
23.5%

21.0%
2.4%
-0.3%
0.1%
0.5%
0.5%
24.2%

21.0%
2.5%
-0.1%
-0.2%
0.3%
0.1%
23.6%

Our effective tax rates were 23.5%, 24.2% and 23.6% for the years ended December 31, 2023, 2022 and 2021, respectively. The

decrease in our effective tax rate for the year ended December 31, 2023, as compared to 2022, is due primarily to the increase in net
income attributable to noncontrolling interests during 2023, as compared to 2022. The increase in our effective tax rate for the year
ended December 31, 2022, as compared to 2021, is due to the decrease in net income attributable to noncontrolling interests during
2022, as compared to 2021.

Included in “Other current assets” on our consolidated balance sheets are prepaid federal, state and foreign income taxes

amounting to approximately $37 million and $17 million as of December 31, 2023 and 2022, respectively.

The components of deferred taxes are as follows (amounts in thousands):

Year Ended December 31,

2023

Liabilities

2022

Liabilities

Self-insurance reserves
Compensation accruals
Doubtful accounts and other reserves
Other currently non-deductible accrued liabilities
Depreciable and amortizable assets
Operating lease liabilities
Right of use assets-operating leases
State and foreign net operating loss carryforwards and other
state and foreign deferred tax assets
Net pension liabilities – OCI only
Other liabilities

Valuation allowance
Total deferred income taxes

Assets
118,824
81,747
123,634
19,926

106,590

96,117
701

280,678

101,853

6,715
389,246
0
389,246

Assets
103,528
77,269
141,511
12,520

108,704

80,823
1,702

547,539
(72,667)
474,872

526,057
(63,325)
462,732

281,203

106,675

6,457
394,335
0
394,335

At December 31, 2023, state net operating loss carryforwards (losses originating in tax years beginning prior to January 1, 2023,

expiring in years 2024 through 2042), and credit carryforwards available to offset future taxable income approximated $1 billion
representing approximately $72 million in deferred state tax benefit (net of the federal benefit); and state related interest expense
carryforwards approximated $58 million representing approximately $3 million in deferred state tax benefit (net of the federal
benefit). At December 31, 2023, there were foreign net operating losses and interest expense carryforwards of approximately $77
million, most of which are carried forward indefinitely, representing approximately $19 million in deferred foreign tax benefit. At
December 31, 2023, related to a prior year stock acquisition, there were federal net operating losses of approximately $8 million
carried forward indefinitely for federal purposes representing approximately $2 million in deferred federal tax benefits.

A valuation allowance is required when it is more likely than not that some portion of the deferred tax assets will not be
realized. Based on available evidence, it is more likely than not that certain of our state tax benefits will not be realized. Therefore,
valuation allowances of approximately $68 million and $59 million have been reflected as of December 31, 2023 and 2022,
respectively. During 2023, the valuation allowance on these state tax benefits increased by $9 million primarily due to additional net
operating losses incurred. In addition, valuation allowances of approximately $4 million have been reflected as of December 31, 2023
and 2022, related to foreign net operating losses and credit carryforwards.

During 2023 and 2022, the estimated liabilities for uncertain tax positions (including accrued interest and penalties) were

increased less than $1 million due to tax positions taken in the current and prior years. The balance at each of the years ended

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December 31, 2023 and 2022, if subsequently recognized, that would favorably affect the effective tax rate and the provision for
income taxes is approximately $2 million as of each date.

We recognize accrued interest and penalties associated with uncertain tax positions as part of the tax provision. As of December

31, 2023 and 2022, we have accrued interest and penalties of less than $1 million as of each date. The U.S. federal statute of
limitations remains open for the 2020 and subsequent years. Foreign and U.S. state and local jurisdictions have statutes of limitations
generally ranging for 3 to 4 years. The statute of limitations on certain jurisdictions could expire within the next twelve months. It is
reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months, however, it is anticipated that
any such change, if it were to occur, would not have a material impact on our results of operations.

The tabular reconciliation of unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021 is as follows

(amounts in thousands):

Balance at January 1,
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Settlements
Balance at December 31,

7) LEASE COMMITMENTS

2023

As of December 31,
2022

2021

2,727 $
500
180
(557)
0
2,850 $

2,544
500
159
(461)
(15)
2,727

2,806
500
213
(261)
(714)
2,544

We follow FASB ASU 2016-02 ("Topic 842") "Leases." Under Topic 842, lessees are required to recognize assets and
liabilities on the balance sheets for most leases and provide enhanced disclosures. Leases will be classified as either finance or
operating.

We have elected the policy exemption that allows lessees to choose to not separate lease and non-lease components by class of

underlying asset and are applying this expedient to all relevant asset classes.

We determine if an arrangement is or contains a lease at inception of the contract. Our right-of-use assets represent our right to
use the underlying assets for the lease term and our lease liabilities represent our obligation to make lease payments arising from the
leases. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments
over the lease term. We use the implicit rate noted within the contract if known or determinable. If the implicit rate is not readily
available, we use our estimated incremental borrowing rate, which is derived using a collateralized borrowing rate for the same
currency and term as the associated lease. A right-of-use asset and lease liability is not recognized for leases with an initial term of 12
months or less and we recognize lease expense for these leases on a straight-line basis over the lease term within lease and rental
expense.

Our operating leases are primarily for real estate, including certain acute care facilities, off-campus outpatient facilities, medical
office buildings, and corporate and other administrative offices. Our real estate lease agreements typically have initial terms of five to
ten years. These real estate leases may include one or more options to renew, with renewals that can extend the lease term from five
to ten years. The exercise of lease renewal options is at our sole discretion. When determining the lease term, we included options to
extend or terminate the lease when it is reasonably certain that we will exercise that option.

Five of our hospital facilities are held under operating leases with Universal Health Realty Income Trust with two hospital terms
expiring in 2026, two expiring in 2033, and one expiring in 2040 (see Note 9 for additional disclosure). We also lease the real property
of certain facilities (see Item 2. Properties for additional disclosure).

The components of lease expense for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands):

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Operating lease cost
Variable and short term lease cost (a)
Total lease and rental expense

Finance lease cost:

Amortization of property under capital lease
Interest on debt of property under capital lease

Total finance lease cost

Twelve months ended
December 31,

2023

2022

2021

99,812
41,214
141,026

4,998
3,771
8,769

90,326
41,300
131,626

5,110
3,903
9,013

77,420
41,443
118,863

3,626
4,124
7,750

(a) Includes equipment, month-to-month and leases with a maturity of less than 12 months.

Supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021 are as follows (in

thousands):

Twelve months ended
December 31,

2023

2022

2021

Cash paid for amounts included in the measurement of lease
liabilities:

Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases

Right-of-use assets obtained in exchange for lease obligations:

Operating leases
Finance leases

$
$
$

$
$

129,299
3,832
3,817

62,223
452

$
$
$

$
$

124,704 $ 118,433
4,612
2,849

3,963 $
3,454 $

163,679 $
1,066 $

95,805
28,600

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Supplemental balance sheets information related to leases as of December 31, 2023 and 2022 are as follows (in thousands):

Operating Leases
Right of use assets-operating leases

Operating lease liabilities
Operating lease liabilities noncurrent
Total operating lease liabilities

Finance Leases
Property and equipment
Accumulated depreciation

Property and equipment, net

Current maturities of long-term debt
Long-term debt

Total finance lease liabilities

Weighted Average remaining lease term, years

Operating leases
Finance leases

Weighted Average discount rate

Operating leases
Finance leases

December 31,
2023

December 31,
2022

433,962

71,600
382,559
454,159

101,318
(38,423)
62,895

3,050
69,643
72,693

16.5
20.0

5.2%
5.5%

454,650

67,776
395,522
463,298

102,494
(34,455)
68,039

3,046
72,549
75,595

16.1
20.7

5.0%
5.4%

Future maturities of lease liabilities as of December 31, 2023 are as follows (in thousands):

Year ending December 31,
2024
2025
2026
2027
2028
Later years
Total lease payments
less imputed interest
Total

Operating Leases

Finance Leases

84,621
77,848
68,363
50,291
38,042
595,748
914,913
(460,754)
454,159

6,716
5,943
5,948
6,104
6,265
95,309
126,285
(53,592)
72,693

We assumed approximately $1 million in finance lease obligations during each of 2023 and 2022 and $29 million during 2021.
In the ordinary course of business, our facilities routinely lease equipment pursuant to new lease arrangements that will likely result in
future lease and rental expense in excess of amounts indicated above.

8) COMMITMENTS AND CONTINGENCIES

Professional and General Liability, Workers’ Compensation Liability

The vast majority of our subsidiaries are self-insured for professional and general liability exposure up to: (i) $20 million for
professional liability and $3 million for general liability per occurrence in 2023, 2022 and 2021; (ii) $10 million and $3 million per
occurrence in 2020; (iii) $5 million and $3 million per occurrence, respectively, during 2019, 2018 and 2017, and; (iv) $10 million and
$3 million per occurrence, respectively, prior to 2017.

These subsidiaries are provided with several excess policies through commercial insurance carriers which provide for coverage

in excess of the applicable per occurrence and aggregate self-insured retention or underlying policy limits up to approximately

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$165 million in 2023; $162 million in 2022; $155 million in 2021 and $250 million during each of 2014 through 2020. In addition,
from time to time based upon marketplace conditions, we may elect to purchase additional commercial coverage for certain of our
facilities or businesses. Our behavioral health care facilities located in the U.K. have policies through a commercial insurance carrier
located in the U.K. that provides for £16 million of professional liability coverage, and £25 million of general liability coverage.

As of December 31, 2023, the total net accrual for our professional and general liability claims was $431 million, of which $70

million was included in current liabilities. As of December 31, 2022, the total net accrual for our professional and general liability
claims was $372 million, of which $74 million was included in current liabilities.

As a result of unfavorable trends experienced during the last three years, our results of operations included pre-tax increases to

our reserves for self-insured professional and general liability claims amounting to approximately $25 million during 2023, $16
million during 2022 and $52 million during 2021. 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. 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. Given our significant self-insured exposure for professional and general
liability claims, 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.

As of December 31, 2023, the total accrual for our workers’ compensation liability claims was $130 million, $55 million of

which was included in current liabilities. As of December 31, 2022, the total accrual for our workers’ compensation liability claims
was $125 million, $55 million of which was included in current liabilities. As a result of favorable trends experienced during the year,
included in our results of operations during 2023 was a pre-tax decrease to our reserves for self-insured workers' compensation
liability claims of approximately $10 million.

Although we are unable to predict whether or not our future financial statements will require updates to estimates for our prior

year reserves for self-insured general and professional and workers’ compensation claims, given the relatively unpredictable nature of
these potential liabilities and the factors impacting these reserves, as discussed above, it is reasonably likely that our future financial
results may include material adjustments to prior period reserves.

Below is a schedule showing the changes in our general and professional liability and workers’ compensation reserves during

the three years ended December 31, 2023 (amount in thousands):

Balance at January 1, 2021
Plus: Accrued insurance expense, net of commercial
premiums paid
Less: Payments made in settlement of self-insured claims
Balance at January 1, 2022
Plus: Accrued insurance expense, net of commercial
premiums paid
Less: Payments made in settlement of self-insured claims
Balance at January 1, 2023
Plus: Accrued insurance expense, net of commercial
premiums paid
Less: Payments made in settlement of self-insured claims
Balance at December 31, 2023

General and
Professional
Liability

Workers’
Compensation

263,779 $

105,185 $

Total
368,964

129,690
(44,776)
348,693

111,763
(88,556)
371,900

56,525
(46,725)
114,985

186,215
(91,501)
463,678

62,960
(53,429)
124,516

174,723
(141,985)
496,416

127,445
(67,860)
431,485 $

56,017
(50,229)
130,304 $

183,462
(118,089)
561,789

Property Insurance

We have commercial property insurance policies for our properties providing property and business interruption coverage for

losses in excess of $25 million per occurrence or per location (as applicable based upon the event) up to a $1 billion annual policy
limitation for certain catastrophic events or perils. These commercial policies provide for coverage of up to $250 million of annual
aggregate coverage for losses resulting from windstorm damage. Losses resulting from named windstorms are subject to deductibles
between 3% and 5% of the total insurable value of the property. In addition, we have commercial property insurance policies
covering catastrophic losses resulting from earthquake and flood damage, each subject to aggregated loss limits (as opposed to per
occurrence losses). Commercially insured earthquake coverage for our facilities is subject to various deductibles and limitations
including: (i) $100 million limitation for our facilities located in California, New Madrid Seismic Zone, Pacific Northwest Seismic
Zone, Alaska and various counties in Nevada; (ii) $100 million limitation for our facilities located in fault zones within the United
States; (iii) $40 million limitation for our facilities located in Puerto Rico, and; (iv) $250 million limitation for many of our facilities

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located in other states. Our commercially insured flood coverage has a limit of $100 million annually. There is also a $10 million
sublimit for one of our facilities located in Houston, Texas, and a $1 million sublimit for our facilities located in Puerto Rico. Property
insurance for our behavioral health facilities located in the U.K. are provided on an all risk basis up to a £1.5 billion policy limit, with
coverage caps per location, that includes coverage for real and personal property as well as business interruption losses.

These commercial policies are subject to a deductible of: (i) $5 million per location for damage resulting from earthquake, wind,

hail and flood, and; (ii) $5 million per occurrence for all other events. For per location or per occurrence losses in excess of the
applicable deductible, we are self-insured, through our wholly-owned captive, for up to $20 million of annual aggregate losses. Should
the $20 million self-insured annual aggregate limitation be exhausted during the policy year, we have commercial insurance coverage
for the next $20 million of annual aggregate losses in excess of the applicable deductible. In the event the $20 million of commercial
coverage is also exhausted, we are self-insured for all per location or per occurrence losses up to $25 million, including the $5 million
deductible.

Commitment to Develop, Lease and Operate an Acute Care Hospital in Washington, D.C.

During 2020, we entered into various agreements with the District of Columbia (the “District”) related to the development,

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 (approximately $5 million of which has been incurred as of

December 31, 2023), over a projected 12-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. 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.

Information Technology Incident

In connection with an information technology security incident in late September, 2020, our results of operations for the years

ended December 31, 2022 and 2021 were favorably impacted by an aggregate of approximately $13 million and $45 million,
respectively, resulting from receipt of commercial cyber insurance proceeds (approximately $41 million in the aggregate during 2022
and 2021), and; (ii) collection of revenues previously reserved during 2020 (approximately $17 million during 2021).

Other Contractual Commitments:

In addition to our long-term debt obligations as discussed in Note 4 - Long-Term Debt and our operating lease obligations as
discussed in Note 7 - Lease Commitments, we have various other contractual commitments outstanding as of December 31, 2023 as
follows: (i) other combined estimated future purchase obligations of $327 million related to a long-term contract with third-parties
consisting primarily of certain revenue cycle data processing services for our acute care facilities ($65 million), expected future costs
to be paid to a third-party vendor in connection with the ongoing operation of an electronic health records application and purchase
implementation of a revenue cycle and other applications for our acute care facilities ($188 million), healthcare infrastructure in
Washington D.C. in connection with various agreements with the District of Columbia ($70 million), and other software applications
($4 million); (ii) estimated construction commitment of $99 million representing our share of the construction cost of two behavioral
health care facilities scheduled to be completed in 2025 that, subject to approval of certain regulatory conditions, we are required to
build pursuant to joint-venture agreements with a third-party; (iii) combined estimated future payments of $165 million related to our
non-contributory, defined benefit pension plan ($139 million consisting of estimated payments through 2080) and other retirement
plan liabilities ($26 million), and; (iv) accrued and unpaid estimated claims expense incurred in connection with our commercial
health insurers and self-insured employee benefit plans ($110 million).

Legal Proceedings

We operate in a highly regulated and litigious industry which subjects us to various claims and lawsuits in the ordinary course of

business as well as regulatory proceedings and government investigations. These claims or suits include claims for damages for

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personal injuries, medical malpractice, commercial/contractual disputes, wrongful restriction of, or interference with, physicians’ staff
privileges, and employment related claims. In addition, health care companies are subject to investigations and/or actions by various
state and federal governmental agencies or those bringing claims on their behalf. Government action has increased with respect to
investigations and/or allegations against healthcare providers concerning possible violations of fraud and abuse and false claims
statutes as well as compliance with clinical and operational regulations. Currently, and from time to time, we and some of our facilities
are subjected to inquiries in the form of subpoenas, Civil Investigative Demands, audits and other document requests from various
federal and state agencies. These inquiries can lead to notices and/or actions including repayment obligations from state and federal
government agencies associated with potential non-compliance with laws and regulations. Further, the federal False Claims Act allows
private individuals to bring lawsuits (qui tam actions) against healthcare providers that submit claims for payments to the government.
Various states have also adopted similar statutes. When such a claim is filed, the government will investigate the matter and decide if
they are going to intervene in the pending case. These qui tam lawsuits are placed under seal by the court to comply with the False
Claims Act’s requirements. If the government chooses not to intervene, the private individual(s) can proceed independently on behalf
of the government. Health care providers that are found to violate the False Claims Act may be subject to substantial monetary
fines/penalties as well as face potential exclusion from participating in government health care programs or be required to comply
with Corporate Integrity Agreements as a condition of a settlement of a False Claims Act matter. In September 2014, the Criminal
Division of the Department of Justice (“DOJ”) announced that all qui tam cases will be shared with their Division to determine if a
parallel criminal investigation should be opened. The DOJ has also announced an intention to pursue civil and criminal actions against
individuals within a company as well as the corporate entity or entities. In addition, health care facilities are subject to monitoring by
state and federal surveyors to ensure compliance with program Conditions of Participation. In the event a facility is found to be out of
compliance with a Condition of Participation and unable to remedy the alleged deficiency(s), the facility faces termination from the
Medicare and Medicaid programs or compliance with a System Improvement Agreement to remedy deficiencies and ensure
compliance.

The laws and regulations governing the healthcare industry are complex covering, among other things, government healthcare

participation requirements, licensure, certification and accreditation, privacy of patient information, reimbursement for patient services
as well as fraud and abuse compliance. These laws and regulations are constantly evolving and expanding. Further, the Legislation has
added additional obligations on healthcare providers to report and refund overpayments by government healthcare programs and
authorizes the suspension of Medicare and Medicaid payments “pending an investigation of a credible allegation of fraud.” We
monitor our business and have developed an ethics and compliance program with respect to these complex laws, rules and regulations.
Although we believe our policies, procedures and practices comply with government regulations, there is no assurance that we will not
be faced with the sanctions referenced above which include fines, penalties and/or substantial damages, repayment obligations,
payment suspensions, licensure revocation, and expulsion from government healthcare programs. Even if we were to ultimately
prevail in any action brought against us or our facilities or in responding to any inquiry, such action or inquiry could have a material
adverse effect on us.

Certain legal matters are described below:

Knight v. Miller, et. al.

In July 2021, a shareholder derivative lawsuit was filed by plaintiff, Robin Knight, in the Chancery Court in Delaware against

the members of the Board of Directors of the Company as well as certain officers (C.A. No.: 2021-0581-SG). The Company was
named as a nominal defendant. The lawsuit alleges that in March 2020 stock options were awarded with exercise prices that did not
reflect the Company’s fundamentals and business prospects, and in anticipation of future market rebound resulting in excessive gains.
The lawsuit makes claims of breaches of fiduciary duties, waste of corporate assets, and unjust enrichment. The lawsuit seeks
monetary damages allegedly incurred by the Company, disgorgement of the March 2020 stock awards as well as any proceeds derived
therefrom and unspecified equitable relief. Defendants deny the allegations. We filed a motion to dismiss the complaint and the court
granted part and denied part of our motion. During the third quarter of 2022, we reached a preliminary settlement, which would not
have had a material impact on our consolidated financial statements. The settlement required court approval which the court declined
to provide. Our Board of Directors has authorized the formation of a Special Litigation Committee to review the matter and determine
whether it is in the best interests of the Company to pursue this claim. The court has stayed the litigation until March 31, 2024 while
the Special Litigation Committee conducts their review. We are uncertain as to potential liability or financial exposure, if any, which
may be associated with this matter.

Disproportionate Share Hospital Payment Matter:

In late September, 2015, many hospitals in Pennsylvania, including certain of our behavioral health care hospitals located in the

state, received letters from the Pennsylvania Department of Human Services (the “Department”) demanding repayment of allegedly
excess Medicaid Disproportionate Share Hospital payments (“DSH”), primarily consisting of managed care payments characterized as
DSH payments, for the federal fiscal year (“FFY”) 2011 amounting to approximately $4 million in the aggregate. Since that time,
certain of our behavioral health care hospitals in Pennsylvania have received similar requests for repayment for alleged DSH
overpayments for FFYs 2012 through 2015. For FFY 2012, the claimed overpayment amounts to approximately $4 million. For FFY
2013, FFY 2014 and FFY 2015 the initial claimed overpayments and attempted recoupment by the Department were approximately $7

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million, $8 million and $7 million, respectively. The Department has agreed to a change in methodology which, upon confirmation of
the underlying data being accepted by the Department, could reduce the initial claimed overpayments for FFY 2013, FFY 2014 and
FFY 2015 to approximately $2 million, $2 million and $3 million, respectively. We filed administrative appeals for all of our facilities
contesting the recoupment efforts for FFYs 2011 through 2015 as we believe the Department’s calculation methodology is inaccurate
and conflicts with applicable federal and state laws and regulations. The Department has agreed to postpone the recoupment of the
state’s share for FFY 2011 to 2013 until all hospital appeals are resolved but started recoupment of the federal share. For FFY 2014
and FFY 2015, the Department has initiated the recoupment of the alleged overpayments. Starting in FY 2016, the first full fiscal year
after the January 1, 2015 effective date of Medicaid expansion in Pennsylvania, the Department no longer characterized managed care
payments received by the hospitals as DSH payments. We can provide no assurance that we will ultimately be successful in our legal
and administrative appeals related to the Department’s repayment demands. If our legal and administrative appeals are unsuccessful,
our future consolidated results of operations and financial condition could be adversely impacted by these repayments.

Other Matters:

Various other suits, claims and investigations, including government subpoenas, arising against, or issued to, us are pending and

additional such matters may arise in the future. Management will consider additional disclosure from time to time to the extent it
believes such matters may be or become material. The outcome of any current or future litigation or governmental or internal
investigations, including the matters described above, cannot be accurately predicted, nor can we predict any resulting penalties, fines
or other sanctions that may be imposed at the discretion of federal or state regulatory authorities. We record accruals for such
contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be
reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time
regarding the matters described above or that are otherwise pending because the inherently unpredictable nature of legal proceedings
may be exacerbated by various factors, including, but not limited to: (i) the damages sought in the proceedings are unsubstantiated or
indeterminate; (ii) discovery is not complete; (iii) the matter is in its early stages; (iv) the matters present legal uncertainties; (v) there
are significant facts in dispute; (vi) there are a large number of parties, or; (vii) there is a wide range of potential outcomes. It is
possible that the outcome of these matters could have a material adverse impact on our future results of operations, financial position,
cash flows and, potentially, our reputation.

9) RELATIONSHIP WITH UNIVERSAL HEALTH REALTY INCOME TRUST AND OTHER RELATED PARTY
TRANSACTIONS

Relationship with Universal Health Realty Income Trust:

At December 31, 2023, 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 2024 at the same rate in place for 2023,
2022 and 2021, 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 $5.3 million during 2023, $5.1 million during 2022 and $4.4 million during 2021.

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 $874,000 during 2023, $1.2 million during 2022 and $6.2 million during 2021,

The carrying value of our investment in the Trust was $7.0 million and $8.4 million at December 31, 2023 and 2022,

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On December 31, 2021, we entered into an asset purchase and sale agreement with the Trust, which was amended during the

first quarter of 2022, pursuant to the terms of which:



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

value of approximately $26.0 million.

Also on December 31, 2021, Aiken and Canyon Creek (as lessees), entered into a master lease and individual property leases

(with the Trust as lessor), as amended, for initial lease terms on each property of approximately twelve years, ending on December 31,
2033. Subject to the terms of the master lease, Aiken and Canyon Creek have the right to renew their leases, at the then current fair
market rent (as defined in the master lease), for seven, five-year optional renewal terms. The aggregate annual rental during 2023
pursuant to the leases for these two facilities, amounted to approximately $5.8 million ($4.0 million related to Aiken and $1.8 million
related to Canyon Creek). The aggregate annual rental during 2022 pursuant to the leases for these two facilities, amounted to
approximately $5.7 million ($3.9 million related to Aiken and $1.8 million related to Canyon Creek). There is no bonus rental
component applicable to either of these leases. 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 sheets as of December 31, 2023 and 2022
reflects a financial liability of $77.5 million and $80.9 million, respectively, 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 as a reduction to the outstanding financial liability. The amount allocated to interest expense is determined using our
incremental borrowing rate and is based on the outstanding financial liability.

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 a specified
period 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 a specified period of time 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 facility, which was
completed and opened in late, 2020, is also leased from the Trust (annual rental of approximately $2.7 million, $2.6 million and $2.5
million during 2023, 2022 and 2021, respectively) 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)

121

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, 2024:

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

Annual
Minimum
Rent
$ 5,485,000
$ 6,639,000

End of Lease Term

December, 2026
December, 2026

Renewal
Term
(years)

$ 4,072,000
$ 1,841,000
$ 2,775,000

December, 2033
December, 2033
December, 2040

5 (a)
5 (b)

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

(c) We have seven 5-year renewal options at fair market value lease rates (2034 through 2068). On each January 1st through 2033,

the annual rent will increase by 2.25% on a cumulative and compounded basis.

(d) This facility is operated by a joint venture in which we are the managing, majority member and an unrelated third-party holds a

minority ownership interest. The joint venture has three, 10-year renewal options at computed lease rates as stipulated in the
lease (2041 through 2070) and two additional, 10-year renewal options at fair market value lease rates (2071 through 2090). 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 various 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.

During the third quarter of 2023, the Trust acquired the McAllen Doctor's Center, a 79,500 rentable square feet medical office

Other Related Party Transactions:

In December, 2010, our Board of Directors approved the Company’s entering into supplemental life insurance plans and

agreements on the lives of Alan B. Miller (our Executive Chairman of the Board) and his wife. As a result of these agreements, as
amended in October, 2016, based on actuarial tables and other assumptions, during the life expectancies of the insureds, we would pay
approximately $28 million in premiums, and certain trusts owned by our Executive Chairman of the Board, would pay approximately
$9 million in premiums. Based on the projected premiums mentioned above, and assuming the policies remain in effect until the death
of the insureds, we will be entitled to receive death benefit proceeds of no less than approximately $37 million representing the $28
million of aggregate premiums paid by us as well as the $9 million of aggregate premiums paid by the trusts. In connection with these
policies, we paid approximately $1.0 million, net, in premium payments during 2023, 2022 and 2021.

In August, 2015, Marc D. Miller, our President and Chief Executive Officer and member of our Board of Directors, was
appointed to the Board of Directors of Premier, Inc. (“Premier”), a healthcare performance improvement alliance. During 2013, we
entered into a new group purchasing organization agreement (“GPO”) with Premier. In conjunction with the GPO agreement, we
acquired a minority interest in Premier for a nominal amount. During the fourth quarter of 2013, in connection with the completion of

122

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. Also in connection with this GPO agreement, we received shares of restricted stock of Premier which vested ratably over a
seven-year period (2014 through 2020), contingent upon our continued participation and minority ownership interest in the GPO.
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 market value of which is included in other assets on our consolidated balance sheets.
Based upon the closing price of Premier’s stock on each respective date, the market value of our shares of Premier was $50 million as
of December 31, 2023 and $78 million as of December 31, 2022. The $28 million decrease in market value of our vested Premier
shares since December 31, 2021 was recorded as an unrealized loss and included in “Other (income) expense, net” in our consolidated
statements of income for the year ended December 31, 2023. A $14 million decrease in the market value of our vested Premier shares
during 2022 was recorded as an unrealized loss and included in “Other (income) expense, net” in our consolidated statements of
income for the year ended December 31, 2022. A $14 million increase in the market value of our vested Premier shares during 2021
was recorded as an unrealized gain and included in “Other (income) expense, net” in our consolidated statements of income for the
year ended December 31, 2021.

Additionally, we received cash dividends from Premier amounting to $1.9 million during 2023, $1.8 million during 2022 and

$1.7 million during 2021, which are included in “Other (income) expense, net” in our consolidated statements of income.

A member of our Board of Directors and member of the Executive Committee and Finance Committee is a partner in Norton
Rose Fulbright US LLP, a law firm engaged by us for a variety of legal services. The Board member and his law firm also provide
personal legal services to our Executive Chairman and he acts as trustee of certain trusts for the benefit of our Executive Chairman and
his family.

10) REVENUE RECOGNITION

We recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to

which we expect to be entitled in exchange for those goods or services. Our estimate for amounts not expected to be collected based
on historical experience will continue to be recognized as a reduction to net revenue. However, subsequent changes in estimate of
collectability due to a change in the financial status of a payer, for example a bankruptcy, will be recognized as bad debt expense in
operating charges.

The performance obligation is separately identifiable from other promises in the customer contract. As the performance
obligations are met (i.e.: room, board, ancillary services, level of care), revenue is recognized based upon allocated transaction price.
The transaction price is allocated to separate performance obligations based upon the relative standalone selling price. In instances
where we determine there are multiple performance obligations across multiple months, the transaction price will be allocated by
applying an estimated implicit and explicit rate to gross charges based on the separate performance obligations.

In assessing collectability, we have elected the portfolio approach. This portfolio approach is being used as we have large
volume of similar contracts with similar classes of customers. We reasonably expect that the effect of applying a portfolio approach to
a group of contracts would not differ materially from considering each contract separately. Management’s judgment to group the
contracts by portfolio is based on the payment behavior expected in each portfolio category. As a result, aggregating all of the
contracts (which are at the patient level) by the particular payer or group of payers, will result in the recognition of the same amount of
revenue as applying the analysis at the individual patient level.

123

We group our revenues into categories based on payment behaviors. Each component has its own reimbursement structure

which allows us to disaggregate the revenue into categories that share the nature and timing of payments. The other patient revenue
consists primarily of self-pay, government-funded non-Medicaid, and other.

The following table disaggregates our revenue by major source for the years ended December 31, 2023, 2022 and 2021 (in

thousands):

Medicare
Managed Medicare
Medicaid
Managed Medicaid
Managed Care (HMO and PPOs)
UK Revenue
Other patient revenue and adjustments, net
Other non-patient revenue
Total Net Revenue

11) PENSION PLAN

For the year ended December 31, 2023

Acute Care
1,297,084
1,368,284
638,986
716,380
2,658,890
0
452,781
948,997
8,081,402

16% $
17%
8%
9%
33%
0%
6%
12%
100% $

Behavioral Health
310,321
345,771
893,918
1,574,281
1,552,304
761,124
528,422
224,780
6,190,921

5%
6%
14%
25%
25%
12%
9%
4%
100% $

Other

9,653
9,653

For the year ended December 31, 2022

Acute Care
1,289,425
1,274,719
719,870
757,488
2,536,818
0
261,879
806,550
7,646,749

17% $
17%
9%
10%
33%
0%
3%
11%
100% $

Behavioral Health
326,337
285,870
792,526
1,449,367
1,476,136
684,594
483,763
231,165
5,729,758

6%
5%
14%
25%
26%
12%
8%
4%
100% $

Other

22,863
22,863

For the year ended December 31, 2021

Acute Care
1,292,205
1,118,901
539,741
618,727
2,521,089
0
358,458
659,133
7,108,254

18% $
16%
8%
9%
35%
0%
5%
9%
100% $

Behavioral Health
361,914
244,061
751,951
1,328,536
1,435,938
687,725
484,742
208,777
5,503,644

7%
4%
14%
24%
26%
12%
9%
4%
100% $

Other

30,219
30,219

Total
1,607,405
1,714,055
1,532,904
2,290,661
4,211,194
761,124
981,203
1,183,430
$ 14,281,976

Total
1,615,762
1,560,589
1,512,396
2,206,855
4,012,954
684,594
745,642
1,060,578
$ 13,399,370

Total
1,654,119
1,362,962
1,291,692
1,947,263
3,957,027
687,725
843,200
898,129
$ 12,642,117

11%
12%
11%
16%
29%
5%
7%
8%
100%

12%
12%
11%
16%
30%
5%
6%
8%
100%

13%
11%
10%
15%
31%
5%
7%
7%
100%

We maintain contributory and non-contributory retirement plans for eligible employees. Our contributions to the contributory

plan amounted to $73.9 million, $72.0 million and $69.8 million in 2023, 2022 and 2021, respectively. The non-contributory plan is a
defined benefit pension plan which covers employees of one of our subsidiaries. The benefits are based on years of service and the
employee’s highest compensation for any five years of employment. Our funding policy is to contribute annually at least the minimum
amount that should be funded in accordance with the provisions of ERISA.

For defined benefit pension plans, the benefit obligation is the “projected benefit obligation”, the actuarial present value, as of
December 31 measurement date, of all benefits attributed by the pension benefit formula to employee service rendered to that date.
The amount of benefit to be paid depends on a number of future events incorporated into the pension benefit formula, including
estimates of the average life of employees/survivors and average years of service rendered. It is measured based on assumptions

124

concerning future interest rates and future compensation levels. The following table shows the reconciliation of the defined benefit
pension plan as of December 31, 2023 and 2022:

Change in plan assets:

Fair value of plan assets at beginning of year
Actual return (loss) on plan assets
Benefits paid
Administrative expenses
Fair value of plan assets at end of year

Change in benefit obligation:

Benefit obligation at beginning of year
Service cost
Interest cost
Benefits paid
Actuarial (gain) loss
Benefit obligation at end of year

Amounts recognized in the Consolidated Balance Sheet:

Other noncurrent assets
Total amounts recognized at end of year

2023

2022

(000s)

96,627 $
8,779
(6,417 )
(574 )
98,415 $

87,277 $
803
4,118
(6,417 )
(156 )
85,625 $

127,360
(23,674)
(6,448)
(611)
96,627

116,034
607
2,836
(6,448)
(25,752)
87,277

12,790 $
12,790 $

9,350
9,350

$
$

Components of net periodic cost (benefit)

Service cost
Interest cost
Expected return on plan assets

Net periodic cost

Measurement Dates
Benefit obligations
Fair value of plan assets

Weighted average assumptions as of December 31

Discount rate
Rate of compensation increase

2023

2022
(000s)

2021

803 $

4,118
(4,195)

726 $

607 $
2,836
(4,335)
(892) $

546
2,493
(4,490)
(1,451)

2023

2022

12/31/2023
12/31/2023

12/31/2022
12/31/2022

2023

2022

4.71%
4.00%

4.91%
4.00%

Weighted-average assumptions for net periodic benefit
cost calculations
Discount rate
Expected long-term rate of return on plan assets
Rate of compensation increase

2023

2022

2021

4.91%
4.50%
4.00%

2.52%
3.50%
4.00%

2.08%
3.50%
4.00%

The “accumulated benefit obligation” for our pension plan represents the actuarial present value of benefits based on employee
service and compensation as of a certain date and does not include an assumption about future compensation levels. The accumulated
benefit obligation for our plan was $85.6 million and $87.3 million as of December 31, 2023 and 2022, respectively. The fair value of
plan assets exceeded the accumulated benefit obligation by $12.8 million and $9.4 million as of December 31, 2023 and 2022,
respectively.

We estimate that there will be no net loss or prior service cost amortized from accumulated other comprehensive income during

2024.

The market values of our pension plan assets at December 31, 2023 and 2022, reported using net asset value as a practical

expedient, by asset category are as follows (in thousands):

125

Equities:

U.S. Large Cap
U.S. Mid Cap
U.S. Small Cap
International Developed
Emerging Markets

Fixed income:

Core Fixed Income
Long Duration Fixed Income

Cash/Currency:

Cash Equivalents
Total market value

2023

2022

5,423
1,480
1,491
3,943
2,540

17,492
65,289

757
98,415

5,301
1,451
1,452
3,867
2,426

17,074
64,277

779
96,627

To develop the expected long-term rate of return on plan assets assumption, we considered the historical returns and the future

expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio.

The following table shows expected benefit payments for the years 2024 through 2033 for our defined pension plan. There will

be benefit payments under this plan beyond 2033.

Estimated Future Benefit Payments (000s)

2024
2025
2026
2027
2028
2029-2033
Total

Plan Assets
Asset Category

Equity securities
Fixed income securities
Other

Total

6,752
6,745
6,714
6,671
6,601
31,330
64,813

2023

2022

15%
84%
1%
100%

Investment Policy, Guidelines and Objectives have been established for the defined benefit pension plan. The investment policy

is in keeping with the fiduciary requirements under existing federal laws and managed in accordance with the Prudent Investor Rule.
Total portfolio risk is regularly evaluated and compared to that of the plan’s policy target allocation and judged on a relative basis over
a market cycle. The following asset allocation policy and ranges have been established in accordance with the overall risk and return
objectives of the portfolio:

Total Equity
Total Fixed Income
Other

As of
12/31/2023

Permitted
Range

15%
84%
1%

10-30%
70-90%
0-10%

In accordance with the investment policy, the portfolio will invest in high quality, large and small capitalization companies
traded on national exchanges, and investment grade securities. The investment managers will not write or buy options for speculative
purposes; securities may not be margined or sold short. The manager may employ futures or options for the purpose of hedging
exposure, and will not purchase unregistered sectors, private placements, partnerships or commodities.

12) SEGMENT REPORTING

Our reportable operating segments consist of acute care hospital services and behavioral health care services. The “Other”
segment column below includes centralized services including, but not limited to, information technology, purchasing, reimbursement,
accounting and finance, taxation, legal, advertising and design and construction. The chief operating decision making group for our
acute care services and behavioral health care services is comprised of our Chief Executive Officer and the Presidents of each
operating segment. The Presidents for each operating segment also manage the profitability of each respective segment’s various

126

facilities. The operating segments are managed separately because each operating segment represents a business unit that offers
different types of healthcare services or operates in different healthcare environments. The accounting policies of the operating
segments are the same as those described in the summary of significant accounting policies included in Note 1-Business and Summary
of Significant Accounting Policies. The corporate overhead allocations, as reflected below, are utilized for internal reporting purposes
and are comprised of each period’s projected corporate-level operating expenses (excluding interest expense). The overhead expenses
are captured and allocated directly to each segment, to the extent possible, based upon each segment’s respective percentage of total
operating expenses.

2023

Gross inpatient revenues
Gross outpatient revenues
Total net revenues
Income (loss) before allocation of corporate
overhead and income taxes
Allocation of corporate overhead
Income (loss) after allocation of corporate overhead
and before income taxes
Total assets

2022

2021

Acute Care
Hospital
Services

Behavioral
Health
Services (a.)
(Dollar amounts in thousands)

Other

Total
Consolidated

$ 44,687,035
$ 29,858,874
8,081,402
$

$ 10,648,996
1,087,595
$
6,190,921
$

$
$
$

— $ 55,336,031
— $ 30,946,469
9,653 $ 14,281,976

$
$

540,345
$
(266,413) $

1,083,680
$
(186,662) $

(683,599) $
453,075 $

940,426
0

273,932
6,201,235

$
$

897,018
7,526,672

$
$

(230,524) $
940,426
239,695 $ 13,967,602

Acute Care
Hospital
Services (b.)

Behavioral
Health
Services (a.)
(Dollar amounts in thousands)

Other

Total
Consolidated

$ 40,004,670
$ 24,813,718
7,646,749
$

$ 10,116,566
1,031,370
$
5,729,758
$

$
$
$

— $ 50,121,236
— $ 25,845,088
22,863 $ 13,399,370

$
$

429,664
$
(252,034) $

980,290
$
(179,936) $

(543,694) $
431,970 $

866,260
0

177,630
5,993,887

$
$

800,354
7,277,293

$
$

(111,724) $
866,260
223,008 $ 13,494,188

Acute Care
Hospital
Services

Behavioral
Health
Services (a.)
(Dollar amounts in thousands)

Other

Total
Consolidated

$ 36,522,155
$ 20,633,921
7,108,254
$

$
$
$

9,927,401
1,013,547
5,503,644

$
$
$

— $ 46,449,556
— $ 21,647,468
30,219 $ 12,642,117

$
$

734,666
$
(233,298) $

1,025,557
$
(172,512) $

(466,910) $
405,810 $

1,293,313
0

501,368
5,534,912

$
$

853,045
7,250,427

$
$

(61,100) $
1,293,313
308,204 $ 13,093,543

(a) Includes net revenues generated from our behavioral health care facilities located in the U.K. amounting to approximately $761

million in 2023, $685 million in 2022 and $688 million in 2021. Total assets at our U.K. behavioral health care facilities were
approximately $1.327 billion as of December 31, 2023, $1.235 billion as of December 31, 2022 and $1.351 billion as of December 31,
2021.

(b) Included in our 2022 acute care hospital services operating segment income (loss) before allocation of corporate overhead and income

taxes is a pre-tax $58 million provision for asset impairment charge to reduce the carrying value of real property assets.

127

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(amounts in thousands)

Valuation Allowance for Deferred Tax Assets:
Year ended December 31, 2023

Year ended December 31, 2022

Year ended December 31, 2021

Balance at
beginning
of period

Charges to
costs and
expenses

Balance
at end
of period

63,325 $
62,356 $
68,003 $

9,342 $
969 $
(5,647) $

72,667

63,325

62,356

128

CORPORATE INFORMATION

EXECUTIVE OFFICES

Universal Corporate Center
367 South Gulph Road
King of Prussia, PA 19406
(610) 768-3300

ANNUAL MEETING

May 15, 2024, 10:00 a.m.

COMPANY COUNSEL
Norton Rose Fulbright
New York, New York

AUDITORS

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania

TRANSFER AGENT AND REGISTRAR

First Class, Certified or Registered Mail:
Computershare Investor Services
P.O. Box 43078
Providence, RI 02940-3078

Overnight Mail:
Computershare Investor Services
150 Royall St., Suite 101
Canton, MA 02021
1-800-851-9677

Shareholder website:
www.computershare.com/investor

Shareholder online inquiries:

https://www-us.computershare.com/
investor/Contact

TDD: Hearing Impaired # 1-800-231-5469

Please contact Computershare for prompt
assistance on address changes, lost
certificates, consolidation of duplicate
accounts or related matters.

INTERNET ADDRESS

The Company can be accessed online
at uhs.com.

LISTING

Class B Common Stock: New York Stock
Exchange under the symbol UHS

PUBLICATIONS

For copies of the Company’s Annual Report,
Form 10-K, Form 10-Q, quarterly earnings
releases, and proxy statements, please call
1-800-874-5819, or write

Investor Relations
Universal Health Services, Inc.
Universal Corporate Center
367 South Gulph Road
King of Prussia, PA 19406

FINANCIAL COMMUNITY INQUIRIES

The Company welcomes inquiries from
members of the financial community seeking
information on the Company. These should be
directed to Steve Filton, Chief Financial Officer.

DISCLOSURE UNDER 303A.12(a)

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 2023.
Additionally, contained in Exhibits 31.1 and 31.2
of our Annual Report on Form 10-K filed with
the Securities and Exchange Commission on
February 27, 2024, are our CEO’s and CFO’s
Certifications regarding the quality of our public
disclosure under Section 302 of the Sarbanes-
Oxley Act of 2002.

F A C I L I T Y L O C A T I O N S

U N I T E D S T A T E S

Alabama | Alaska | Arizona

Arkansas | California

Colorado | Connecticut

U N I T E D K I N G D O M

England

Bristol | Cheshire

County Durham | Derbyshire

Delaware | District of Columbia

Dorset | Essex

Florida | Georgia | Idaho

Illinois | Indiana | Iowa

Kentucky | Louisiana

Massachusetts | Michigan

Minnesota | Mississippi

Missouri | Nevada

Gloucestershire | Hampshire

Hertfordshire | Kent

Lancashire | Leicestershire

Lincolnshire | London

Greater Manchester | North Yorkshire

Northumberland | Nottinghamshire

New Jersey | New Mexico

Somerset | South Yorkshire

North Carolina | North Dakota

Staffordshire | Suffolk | Surrey

Ohio | Oklahoma | Oregon

Teesside | West Midlands | West Yorkshire

Pennsylvania | South Carolina

Scotland

Tennessee | Texas

Utah | Virginia | Washington

West Virginia | Wisconsin

Wyoming

P U E R T O R I C O

Angus | Dumfries and Galloway

Stirling

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Flintshire | Gwent

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