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Universal Health Services Inc – ‘10-K’ for 12/31/10 – ‘XML.R17’

On: Monday, 2/28/11, at 5:02pm ET · For: 12/31/10 · Accession #: 1193125-11-50142 · File #: 1-10765

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/28/11  Universal Health Services Inc     10-K       12/31/10   39:7.5M                                   Donnelley … Solutions/FA

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Universal Health Services Inc--Form 10-K            HTML   1.84M 
 2: EX-10.3     Agreement                                           HTML     15K 
 3: EX-21       Subsidiaries of Registrant                          HTML    107K 
 4: EX-23.1     Consent of Independent Registered Accounting Firm   HTML     14K 
 5: EX-31.1     Section 302 CEO Certification                       HTML     17K 
 6: EX-31.2     Section 302 CFO Certification                       HTML     17K 
 7: EX-32.1     Section 906 CEO Certification                       HTML     14K 
 8: EX-32.2     Section 906 CFO Certification                       HTML     14K 
31: XML         IDEA XML File -- Definitions and References          XML     97K 
36: XML         IDEA XML File -- Filing Summary                      XML     85K 
34: XML.R1      Document and Entity Information                      XML    324K 
35: XML.R2      Consolidated Statements of Income                    XML    400K 
22: XML.R3      Consolidated Statements of Income (Parenthetical)    XML     36K 
26: XML.R4      Consolidated Balance Sheets                          XML    671K 
30: XML.R5      Consolidated Balance Sheets (Parenthetical)          XML    291K 
29: XML.R6      Consolidated Statements of Changes in Equity         XML   1.76M 
38: XML.R7      Consolidated Statements of Changes in Equity         XML     85K 
                (Parenthetical)                                                  
18: XML.R8      Consolidated Statements of Cash Flows                XML    550K 
28: XML.R9      Business and Summary of Significant Accounting       XML    151K 
                Policies                                                         
17: XML.R10     Acquisitions and Divestitures                        XML     92K 
16: XML.R11     Financial Instruments                                XML     44K 
21: XML.R12     Long-Term Debt                                       XML     72K 
33: XML.R13     Common Stock                                         XML    152K 
23: XML.R14     Income Taxes                                         XML    148K 
24: XML.R15     Lease Commitments                                    XML     60K 
27: XML.R16     Commitments and Contingencies                        XML     73K 
39: XML.R17     Relationship With Universal Health Realty Income     XML     57K 
                Trust and Related Party Transactions                             
19: XML.R18     Pension Plan                                         XML    180K 
15: XML.R19     Segment Reporting                                    XML     78K 
25: XML.R20     Quarterly Results                                    XML    134K 
32: XML.R21     Schedule Ii-Valuation and Qualifying Accounts        XML     52K 
37: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS    855K 
 9: EX-101.INS  XBRL Instance -- uhs-20101231                        XML   1.21M 
11: EX-101.CAL  XBRL Calculations -- uhs-20101231_cal                XML    134K 
12: EX-101.DEF  XBRL Definitions -- uhs-20101231_def                 XML    157K 
13: EX-101.LAB  XBRL Labels -- uhs-20101231_lab                      XML    449K 
14: EX-101.PRE  XBRL Presentations -- uhs-20101231_pre               XML    301K 
10: EX-101.SCH  XBRL Schema -- uhs-20101231                          XSD     55K 
20: ZIP         XBRL Zipped Folder -- 0001193125-11-050142-xbrl      Zip    104K

‘XML.R17’ — Relationship With Universal Health Realty Income Trust and Related Party Transactions

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<div> 9) RELATIONSHIP WITH UNIVERSAL HEALTH REALTY INCOME TRUST AND RELATED PARTY TRANSACTIONS Relationship with Universal Health Realty Income Trust: At December 31, 2010, we held approximately 6.2% 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 pursuant to the terms of which we conduct the Trust's day-to-day affairs, provide administrative services and present investment opportunities. 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. We earned an advisory fee from the Trust, which is included in net revenues in the accompanying consolidated statements of income, of approximately $1.8 million during 2010 and $1.6 million during each of 2009 and 2008. Our pre-tax share of income from the Trust was $1.0 million during 2010, $1.1 million during 2009 and $900,000 during 2008 and is included in net revenues in the accompanying consolidated statements of income for each year. The carrying value of this investment was $7.3 million and $8.1 million at December 31, 2010 and 2009, respectively, and is included in other assets in the accompanying consolidated balance sheets. The market value of this investment was $28.8 million at December 31, 2010 and $25.2 million at December 31, 2009, based on the closing price of the Trust's stock on the respective dates. Total rent expense under the operating leases on the hospital facilities with the Trust was $16.2 million during 2010, $16.3 million during 2009 and $16.1 million during 2008. In addition, certain of our subsidiaries are tenants in several medical office buildings owned by limited liability companies in which the Trust holds non-controlling ownership interests. The Trust commenced operations in 1986 by purchasing certain properties from us and immediately leasing the properties back to our respective subsidiaries. Most of the leases were entered into at the time the Trust commenced operations and provided for initial terms of 13 to 15 years with up to six additional 5-year renewal terms. Each lease also provided for additional or bonus rental, as discussed below. The base rents are paid monthly and the bonus rents are computed and paid on a quarterly basis, based upon a computation that compares current quarter revenue to a corresponding quarter in the base year. The leases with our subsidiaries are unconditionally guaranteed by us and are cross-defaulted with one another. Pursuant to the terms of the leases with the Trust, we have the option to renew the leases at the lease terms described above by providing notice to the Trust at least 90 days prior to the termination of the then current term. In addition, we have rights of first refusal to: (i) purchase the respective leased facilities during and for 180 days after the lease terms at the same price, terms and conditions of any third-party offer, or; (ii) renew the lease on the respective leased facility at the end of, and for 180 days after, the lease term at the same terms and conditions pursuant to any third-party offer. We also have the right to purchase the respective leased facilities at the end of the lease terms or any renewal terms at the appraised fair market value. In addition, during 2006, as part of the overall exchange and substitution transaction relating to Chalmette Medical Center ("Chalmette") which was completed during the third quarter of 2006, as well as the early five year lease renewals on Southwest Healthcare System-Inland Valley Campus ("Inland Valley"), Wellington Regional Medical Center ("Wellington"), McAllen Medical Center and The Bridgeway ("Bridgeway"), the Trust agreed to amend the Master Lease to include a change of control provision. The change of control provision grants us the right, upon one month's notice should a change of control of the Trust occur, to purchase any or all of the four leased hospital properties at their appraised fair market value purchase price. The table below details the renewal options and terms for each of our four hospital facilities leased from the Trust: <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr><td width="49%"> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom" nowrap="nowrap"> Hospital Name</td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="center">Type of Facility</td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Annual Minimum Rent</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">End of Lease Term</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Renewal Term (years)</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> McAllen Medical Center</td> <td valign="bottom"> </td> <td valign="bottom">Acute Care</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">5,485,000</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">December, 2011</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">20</td> <td valign="bottom" nowrap="nowrap">(a) </td></tr> <tr><td valign="top"> Wellington Regional Medical Center</td> <td valign="bottom"> </td> <td valign="bottom">Acute Care</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,030,000</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">December, 2011</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">20</td> <td valign="bottom" nowrap="nowrap">(b) </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Southwest Healthcare System, Inland Valley Campus</td> <td valign="bottom"> </td> <td valign="bottom">Acute Care</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,648,000</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">December, 2011</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">20</td> <td valign="bottom" nowrap="nowrap">(b) </td></tr> <tr><td valign="top"> The Bridgeway</td> <td valign="bottom"> </td> <td valign="bottom">Behavioral Health</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">930,000</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">December, 2014</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">(c) </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">(a)</td> <td valign="top" align="left">We have four 5-year renewal options at existing lease rates (through 2031). </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">(b)</td> <td valign="top" align="left">We have two 5-year renewal options at existing lease rates (through 2021) and two 5-year renewal options at fair market value lease rates (2022 through 2031). </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">(c)</td> <td valign="top" align="left">We have two 5-year renewal options at fair market value lease rates (2015 through 2024). </td></tr></table> Split-dollar Life Insurance Agreements: In December, 2010, our Board of Directors approved the Company's entering into supplemental life insurance plans and agreements on the lives of our chief executive officer and his wife. As a result of these agreements, based on actuarial tables and other assumptions, during the life expectancies of the insureds, we would pay approximately $25 million in premiums and certain trusts, owned by our chief executive officer, would pay approximately $8 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 $33 million representing the $25 million of aggregate premiums paid by us as well as the $8 million of aggregate premiums paid by the trusts. During the fourth quarter of 2010, we paid approximately $6 million in premium payments. We recorded a pre-tax and after-tax expense of $9 million during the fourth quarter of 2010 representing the present value of our projected premium funding commitment over the terms of the policies. Other Related Party Transactions: A member of our Board of Directors and member of the Executive Committee is Of Counsel to the law firm used by us as our principal outside counsel. This Board member is also the trustee of certain trusts for the benefit of our CEO and his family. This law firm also provides personal legal services to our CEO. </div>

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3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 9/20/11  SEC                               UPLOAD¶     9/21/17    1:45K  Universal Health Services Inc.
 8/09/11  SEC                               UPLOAD¶     9/21/17    1:50K  Universal Health Services Inc.
 7/06/11  SEC                               UPLOAD¶     9/21/17    1:61K  Universal Health Services Inc.

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Filing Submission 0001193125-11-050142 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Universal Health Services Inc – ‘10-K’ for 12/31/10 – ‘XML.R17’

On: Monday, 2/28/11, at 5:02pm ET · For: 12/31/10 · Accession #: 1193125-11-50142 · File #: 1-10765

Previous ‘10-K’: ‘10-K’ on 2/25/10 for 12/31/09 · Next: ‘10-K/A’ on 9/8/11 for 12/31/10 · Latest: ‘10-K’ on 2/27/24 for 12/31/23 · 3 References: By: SEC – ‘UPLOAD’ on 9/20/11 By: SEC – ‘UPLOAD’ on 8/9/11 By: SEC – ‘UPLOAD’ on 7/6/11

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34Filing Table of Contents

‘XML.R17’ — Relationship With Universal Health Realty Income Trust and Related Party Transactions

This Financial Report is an XBRL XML File.

3 Subsequent Filings that Reference this Filing

Previous ‘10-K’: ‘10-K’ on 2/25/10 for 12/31/09 · Next: ‘10-K/A’ on 9/8/11 for 12/31/10 · Latest: ‘10-K’ on 2/27/24 for 12/31/23 · 3 References:

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents