Universal Health Services (UHS) 10-K risk factor changes: FY2013 vs FY2012

On a combined basis, these facilities contributed 16% [removed: in 2012,] [added: during each of 2013 and 2012 and] 17% in 2011 [removed: and 21% in 2010] of our consolidated net revenues.

On a combined basis, after deducting an allocation for corporate overhead expense, these facilities generated [added: 6% in 2013,] 8% in 2012, [added: and] 11% in 2011 [removed: and 15% in 2010] of our income from operations after net income attributable to noncontrolling interest.

Texas: We own 7 acute care hospitals and [removed: 21] [added: 22] behavioral healthcare facilities as listed in _Item 2.

On a combined basis, these facilities contributed 18% [removed: in 2012, 18% in 2011 and 20% in 2010] of our consolidated net [removed: revenues.][added: revenues during each of 2013, 2012 and 2011.]

On a combined basis, after deducting an allocation for corporate overhead expense, these facilities generated [added: 15% in 2013,] 12% in 2012, [added: and] 14% in 2011 [removed: and 15% in 2010] of our income from operations after net income attributable to noncontrolling interest.

California: We own [removed: 4] [added: 5] acute care hospitals and 6 behavioral healthcare facilities as listed in _Item 2.

On a combined basis, these facilities contributed [added: 9% in 2013 and] 10% of our consolidated net revenues during each of [removed: 2012, 2011] [added: 2012] and [removed: 2010.][added: 2011.]

On a combined basis, after deducting an allocation for corporate overhead expense, these facilities generated [added: 4% in 2013,] 6% in 2012, [added: and] 5% in 2011 [removed: and 4% in 2010] of our income from operations after net income attributable to noncontrolling interest.

In addition, the uncertainty and fiscal pressures placed upon federal and state governments as a result of, among other things, the substantial deterioration in general economic conditions and the funding requirements from the federal healthcare reform legislation, may affect the availability of [added: taxpayer funds for Medicare and Medicaid programs.]

[removed: We receive] Medicaid [removed: revenues in excess of $90 million annually from each of Texas, Pennsylvania, Washington, D.C., Virginia, Illinois] and [removed: Massachusetts, making us particularly sensitive to reductions in Medicaid and] other state based revenue programs (which have been implemented in various forms with respect to our areas of operation in the respective 2013 state fiscal years) as well as regulatory, economic, environmental and competitive changes in those states.

[removed: In the states in which we operate, based] [added: Based] upon the state budgets for the [removed: 2012] [added: 2013] fiscal year (which generally began at various times during the second half of [removed: 2011),] [added: 2012),] we estimate that, on a blended basis, our aggregate Medicaid rates [removed: have been] [added: were] reduced by approximately [removed: 3% to 4%] [added: 1%] (or approximately [removed: $45 million to $55] [added: $15] million annually) from the average rates in effect during the states’ [removed: 2011] [added: 2012] fiscal years (which generally ended during the third quarter of [removed: 2011).][added: 2012).]

Based upon the state budgets for the [removed: 2013] [added: 2014] fiscal year (which [added: will] generally began at various times during the second half of [removed: 2012),] [added: 2013),] we estimate that, on a blended basis, our aggregate Medicaid rates will [removed: be reduced by approximately 1% (or approximately $15 million annually)] [added: remain relatively unchanged] from the [removed: average rates in effect during the states’ 2012] [added: 2013] fiscal [removed: years (which generally ended during the third quarter of 2012).][added: year rates.]

During [removed: 2012,] [added: 2013,] our revenues and payor mix within our acute care operations have been volatile making it difficult to predict the results for [removed: 2013] [added: 2014] or thereafter.

In addition, we recorded approximately $2.37 billion of aggregate goodwill as a result of our acquisition of PSI in November, 2010 and Ascend in October, 2012, and, as of December 31, [removed: 2012,] [added: 2013,] we had approximately [removed: $3.04] [added: $3.05] billion of goodwill recorded on our consolidated balance sheet.

[added: 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 continued 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.

The 2012 Act postponed for two months sequestration cuts mandated under the Budget Control Act of [removed: 2011.]

The 2012 Act includes a document and coding (“DCI”) adjustment and a reduction in Medicaid [removed: DSH] [added: disproportionate share hospital (“DSH”)] payments.

A [removed: recent] [added: 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.

[added: 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 [removed: federal Medicaid funding.]

The Legislation also [removed: contains] [added: contained] provisions aimed at reducing fraud and abuse in healthcare.

Our obligations under EMTALA may increase substantially going forward; CMS has sought stakeholder comments concerning the potential applicability of [added: 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.]

[removed: 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.

However, we also have substantial receivables due to us as of December 31, [removed: 2012] [added: 2013] (a significant portion of which is past due) from certain state-based funding programs, most particularly [removed: Illinois.][added: Illinois and Texas as discussed herein.]

This shortage may require us to enhance wages and benefits to [added: recruit and retain nurses and other medical support personnel or require us to hire expensive temporary personnel.]

Among these laws are the federal False Claims Act, the Health Insurance Portability and Accountability Act of 1996, [removed: or HIPAA,] [added: (“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.

[removed: 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 [added: of the privacy and security regulatory requirements to third parties that perform duties on our behalf.]

Whistleblower provisions allow private individuals to bring actions on behalf of the government [removed: alleging that the defendant has defrauded the federal government.]

[removed: Please see _Item_ _3__._ _Legal] [added: Legal] Proceedings_ for disclosure of current related matters.

The economies in the non-urban communities in which our hospitals operate are often [removed: dependant] [added: dependent] on a small number of large employers.

[added: Although we typically attempt to exclude] significant liabilities from our acquisition transactions and seek indemnification from the sellers of such hospitals for these matters, we could experience difficulty enforcing those obligations or we could incur material liabilities for the past activities of hospitals we acquire.

[removed: Inpatient] utilization, average lengths of stay and occupancy rates continue to be negatively affected by payor-required preadmission authorization and utilization review and by payor pressure to maximize outpatient and alternative healthcare delivery services for less acutely ill patients.

These factors include certain of the risks discussed herein, demographic changes, operating results of other hospital companies, changes in our financial estimates or recommendations of securities analysts, speculation in the press [added: or investment community, the possible effects of war, terrorist and other hostilities, adverse weather conditions, the level of seasonal illnesses, managed care contract negotiations and terminations, changes in general conditions in the economy or the financial markets, or other developments affecting the health care industry.]

At December 31, [removed: 2012, 28.1] [added: 2013, 25.7] 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.

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 [added: current] holders of Class B Common Stock would own a smaller percentage of that class.

As of March 21, [removed: 2012,] [added: 2013,] the shares of Class A and Class C Common Stock constituted [removed: 7.5%] [added: 6.9%] of the aggregate outstanding shares of our Common Stock, had the right to elect five members of the Board of Directors and constituted [removed: 87.3%] [added: 86.2%] of our general voting power.

As of March 21, [removed: 2012,] [added: 2013,] the shares of Class B and Class D Common Stock (excluding shares issuable upon exercise of options) constituted [removed: 92.5%] [added: 93.1%] of the outstanding shares of our Common Stock, had the right to elect two members of the Board of Directors and constituted [removed: 12.7%] [added: 13.8%] of our general voting power.

[removed: Each share of] Class A Common Stock [removed: 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).

We receive Medicaid revenues in excess of $90 million annually from each of Texas, Pennsylvania, Washington, D.C., Illinois, Virginia and Massachusetts, making us particularly sensitive to reductions in

2011.

Although the Bipartisan Budget Act of 2013 has reduced certain sequestration-related budgetary cuts, spending reductions related to the Medicare program remain in place.

On December 26, 2013, President Obama signed into law H.J. Res.

59, the Bipartisan Budget Act of 2013, which includes the Pathway for SGR Reform Act of 2013 (“the Act”).

In addition, on February 15, 2014, Public Law 113-082 was enacted.

The Act and subsequent federal legislation achieves new savings by extending sequestration for mandatory programs – including Medicare – for another three years, through 2024.

It has been projected that the Legislation will result in a net reduction in Medicare and Medicaid payments to hospitals totaling $155 billion over 10 years.

The Legislation and subsequent revisions provide for reductions to both Medicare DSH and Medicaid DSH payments.

The Medicare DSH reductions began in October, 2013 with no material adverse impact to the reimbursements we receive expected until 2015 while Medicaid DSH reimbursements would not be adversely impacted until 2016.

federal Medicaid funding.

As a result, many states, including Texas, have not expanded their Medicaid programs without the threat of loss of federal funding.

If the number of indigent and charity care

Such privacy and security regulations impose extensive administrative, physical and technical

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.

alleging that the defendant has defrauded the federal government.

Please see _Item 3.

Inpatient

_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, payor programs shifting to a more outpatient-based environment, whether or not certain services are offered, seasonal and severe weather conditions, including the effects of extreme low temperatures, hurricanes and tornados, earthquakes, current local economic and demographic changes.

In addition, technological developments and pharmaceutical improvements may reduce the demand for healthcare services or the profitability of the services we offer.

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

taxpayer funds for Medicare and Medicaid programs.

Our consolidated results of operations during 2012 and 2011 include the pro rata portion of these Medicaid rate reductions.

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.

Should the revenues and financial results of our acute care and/or behavioral health care facilities be materially, unfavorably impacted due to, among other

The Legislation will reduce Medicare and Medicaid disproportionate share hospital payments (“DSH”) beginning in 2014, which would adversely impact the reimbursement we receive under these programs.

Pursuant to that decision, the federal government

As a result, it remains unclear whether states will adopt Legislation Medicaid expansion provisions without the threat of loss of federal funding.

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.

recruit and retain nurses and other medical support personnel or require us to hire expensive temporary personnel.

of the privacy and security regulatory requirements to third parties that perform duties on our behalf.

_Our level of indebtedness that we incurred in connection with the acquisitions of PSI and Ascend could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations under the agreements relating to our indebtedness._

Our level of indebtedness that we incurred in connection with the acquisitions of PSI and Ascend could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and could potentially prevent us from meeting our obligations under the agreements relating to our indebtedness.

As of December 31, 2012, our total debt was $3.73 billion and we had $600 million of unused borrowing capacity under our credit agreement and accounts receivable securitization facilities, after taking into account outstanding letters of credit.

Subject to the limits contained in the credit agreement governing our senior credit facility, the indenture that governs the notes and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes.

If we do so, the risks related to our high level of debt could intensify.

Our leverage could result in unfavorable impact on us, including the following:

| | • | | it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; |

| --- | --- | --- | --- |

| | • | | a substantial portion of our cash flows from operations will be dedicated to the payment of principal and interest on our indebtedness and will not be available for other purposes, including our operations, capital expenditures and future business opportunities; |

| --- | --- | --- | --- |

| | • | | some of our borrowings, including borrowings under the credit facilities, are at variable rates of interest, exposing us to the risk of increased interest rates; |

| --- | --- | --- | --- |

| | • | | it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt, and; |

| --- | --- | --- | --- |

| | • | | we may be vulnerable in a downturn in general economic conditions or in our business, or we may be unable to carry out capital spending that is important to our operations. |

| --- | --- | --- | --- |

Although we typically attempt to exclude

or investment community, the possible effects of war, terrorist and other hostilities, adverse weather conditions, the level of seasonal illnesses, managed care contract negotiations and terminations, changes in general conditions in the economy or the financial markets, or other developments affecting the health care industry.

As of February [removed: 28, 2013,] [added: 27, 2014,] we owned and/or operated [removed: 23] [added: 24] acute care hospitals and [removed: 197] [added: 193] behavioral health centers located in 37 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands.

As a result, the provision for doubtful accounts for our acute care and behavioral health care facilities is reflected as a deduction from net revenues in the accompanying consolidated statements of income for [removed: 2012, 2011] [added: 2013, 2012] and [removed: 2010.][added: 2011.]

Net revenues from our acute care hospitals, surgical hospitals, surgery centers and radiation oncology centers accounted for [removed: 50%] [added: 49%] of our consolidated net revenues in [removed: 2012, 51%] [added: 2013, 50%] in [removed: 2011] [added: 2012] and [removed: 67%] [added: 51%] in [removed: 2010.][added: 2011.]

Net revenues from our behavioral health care facilities accounted for 50% of our consolidated net revenues during [removed: 2012, 49%] [added: 2013, 50%] during [removed: 2011] [added: 2012] and [removed: 33%] [added: 49%] during [removed: 2010.][added: 2011.]

| | • | | 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 Medicaid revenues in excess of $90 million annually from each of Texas, Pennsylvania, Washington, D.C., [removed: Virginia, Illinois] [added: Illinois, Virginia] and Massachusetts); CMS-approved Medicaid supplemental programs in certain states including [removed: Texas,] Oklahoma, [removed: Arkansas, Indiana] [added: California] and [removed: Ohio,] [added: Arkansas,] and; state Medicaid disproportionate share hospital payments in certain states including Texas and South Carolina. We are therefore particularly sensitive to potential reductions in Medicaid and other state based revenue programs [removed: (which have been implemented in various forms with respect to our areas of operation in the respective states’ 2012 and 2013 fiscal years)] as well as regulatory, economic, environmental and competitive changes in those states. We can [added: 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 Department of Health and Human Services (“HHS”) published final regulations in July, 2010 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 implementation period for these new 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. [removed: Our acute care hospitals may] [added: Hospitals that do not] qualify [removed: for these EHR incentive payments upon implementation] [added: as a meaningful user] of [removed: the] EHR [removed: application assuming they meet] [added: by 2015 are subject to a reduced market basket update to] the [removed: “meaningful use criteria”.] [added: inpatient prospective payment system standardized amount in 2015 and each subsequent fiscal year.] Certain of our acute care hospitals implemented EHR applications in 2011 and 2012 and we [removed: plan to continue] [added: continued] the implementation at each of our acute care hospitals, on a facility-by-facility basis, until completion which [removed: is expected to occur] [added: occurred] in [removed: mid-2013. However, there can be no assurance that we (our] [added: June, 2013. Our] acute care [removed: hospitals) will ultimately qualify for these incentive payments and, should we qualify, we] [added: hospitals] are [removed: unable to quantify the amount of] [added: eligible for Medicare and Medicaid EHR] incentive payments [removed: we may receive since the amounts are dependent] upon [removed: various factors including the] implementation [removed: timing at each hospital. Should we qualify for incentive payments, there may be timing differences in the recognition] of the [removed: incentive income and expenses recorded in connection with] [added: EHR application, once they have demonstrated meaningful use of certified EHR technology for] the [added: applicable stage or have completed attestations to their adoption or] implementation of [removed: the] [added: certified] EHR [removed: application] [added: technology. With the exception of the newly constructed Temecula Valley Hospital,] which [removed: may cause material period-to-period changes] [added: was opened] in [removed: our future results of operations. Hospitals] [added: October, 2013, we believe] that [removed: do not qualify as a meaningful user] [added: all] of [removed: EHR by 2015 are subject to a reduced market basket update to] [added: our acute care hospitals have met] the [removed: inpatient prospective payment system (“IPPS”) standardized amount in 2015 and each subsequent fiscal year.] [added: stage 1, year one “meaningful use” criteria.] Although we believe that our acute care hospitals will be in compliance with the EHR standards by 2015, there can be no assurance that all of our facilities will be in compliance and therefore not subject to the penalty provision of the HITECH [removed: Act;] [added: Act. Should we (our acute care hospitals) qualify for incentive payments, there may be timing differences in the recognition of the incentive income and expenses recorded in connection with the implementation of the EHR applications which may cause material period-to-period changes in our future results of operations;] |

| | • | | in August, 2011, the Budget Control Act of 2011 (the “2011 Act”) was enacted into law. 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 [removed: which, if triggered, would result] [added: on March 1, 2013 resulting] in Medicare payment reductions of up to 2% per fiscal year (approximately [removed: $39] [added: $35] million annual reduction to our Medicare net [removed: revenues)] [added: revenues effective as of April 1, 2013)] with a uniform percentage reduction across all Medicare [removed: programs starting in 2013.] [added: programs.] We cannot predict whether Congress will [removed: attempt to suspend or] restructure the [removed: automatic budget cuts] [added: implemented Medicare payment reductions] or what other [added: federal budget] deficit reduction initiatives may be proposed by Congress; |

| | • | | [added: Our accounts receivable] as of December 31, [added: 2013,] 2012 and [removed: December 31, 2011, our accounts receivable] [added: 2011] includes [added: amounts due from Illinois of] approximately [added: $49 million,] $70 million and $54 million, [removed: respectively, due from Illinois.] [added: respectively.] Collection of [removed: these] [added: the outstanding] receivables continues to be delayed due to state budgetary and funding pressures. Approximately [added: $28 million as of December 31, 2013,] $51 million as of December 31, [removed: 2012,] [added: 2012] and $41 million as of December 31, 2011, of the receivables due from Illinois [removed: have been] [added: were] outstanding in excess of 60 days, as of [removed: each respective date, and a large portion will likely remain outstanding for the foreseeable future. Since we expect to eventually collect all amounts due to] |

| | [removed: us,] [added: each respective date. In addition, our accounts receivable as of December 31, 2013 includes approximately $46 million due from Texas in connection with Medicaid supplemental payment programs the majority of which we expect to collect during the second quarter of 2014. Although the accounts receivable due from Illinois and Texas could remain outstanding for the foreseeable future, since we expect to eventually collect all amounts due to us (we have received $27 million of cash remittances from Illinois in January, 2014),] no related reserves have been established in our consolidated financial statements. However, we can provide no assurance that we will eventually collect all amounts due to us from [removed: Illinois.] [added: Illinois and/or Texas.] Failure to ultimately collect all outstanding amounts due from [removed: Illinois] [added: these states] would have an adverse impact on our future consolidated results of operations and cash [removed: flows.] [added: flows;] |

Medicare and Medicaid revenues represented [removed: 39%] [added: 38%] of our net patient revenues during [removed: 2012, 41%] [added: 2013, 39%] during [removed: 2011] [added: 2012] and [removed: 42%] [added: 41%] during [removed: 2010.][added: 2011.]

Revenues from managed care entities, including health maintenance organizations and managed Medicare and Medicaid programs accounted for 49% of our net patient revenues during [removed: 2012, 47% during 2011] [added: each of 2013] and [removed: 51%] [added: 2012 and 47%] during [removed: 2010.][added: 2011.]

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 [removed: 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 [added: administrative review and audit and our estimates may vary from the final settlements.]

Adjustments related to the final settlement of these retrospectively determined amounts did not materially impact our results in [removed: 2012, 2011] [added: 2013, 2012] or [removed: 2010.][added: 2011.]

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, [removed: 2012,] [added: 2013,] would change our after-tax net income by approximately $1 million.

Adjustments related to the final determination of these accounts did not materially impact our results of operations in [removed: 2012, 2011] [added: 2013, 2012] or [removed: 2010.][added: 2011.]

[removed: Our hospitals establish a partial reserve for self-pay accounts in the allowance for] doubtful accounts for both unbilled balances and those that have been billed and are under 90 days old.

[added: Third party liability accounts are fully] reserved in the allowance for doubtful accounts when the balance ages past 180 days from the date of discharge.

Our accounts receivable are recorded net of allowance for doubtful accounts of [removed: $311] [added: $395] million and [removed: $253] [added: $311] million at December 31, [removed: 2012] [added: 2013] and [removed: 2011,] [added: 2012,] respectively.

Approximately [removed: 87%] [added: 90%] during [removed: 2012] [added: 2013] and [removed: 93%] [added: 87%] during [removed: each of 2011 and 2010,] [added: 2012] of our consolidated provision for doubtful accounts, was incurred by our acute care hospitals.

Shown below is our payer mix concentrations and related aging of our billed accounts receivable, net of contractual allowances, for our acute care hospitals as of December 31, [removed: 2012] [added: 2013] and [removed: 2011:][added: 2012:]

[removed: As of] [added: | | | Year Ended] December 31, [removed: 2011:][added: 2012 | | | | | | | | Year Ended December 31, 2011 | | | | | | |]

We recognize income related to Medicare and Medicaid incentive payments using a gain contingency model that is based upon when our eligible hospitals have demonstrated “meaningful use” of [added: certified EHR technology for the applicable period and the cost report information for the full cost report year that will determine the final calculation of the incentive payment is available.]

Medicaid EHR incentive payments: Medicaid EHR incentive payments are determined based upon prior period cost report information available at the time our hospitals [removed: meet] [added: met] the “meaningful use” criteria.

Therefore, the majority of the Medicaid EHR incentive income recognition [removed: occurs] [added: occurred] in the period in which the applicable hospitals [removed: are] [added: were] deemed to have met initial “meaningful use” criteria.

Medicaid EHR incentive payments received prior to our hospitals meeting the “meaningful use” criteria [removed: are] [added: were] included in other current liabilities (as deferred EHR incentive income) in our consolidated balance sheet.

Since our acquisition of PSI on November 15, 2010, the former PSI subsidiaries are self-insured for professional and general liability exposure up to $3 million per occurrence and our legacy subsidiaries (which are not former PSI subsidiaries) are self-insured for professional and general liability exposure up to $10 million per [added: occurrence.]

Effective November, 2010, our subsidiaries (including the former PSI subsidiaries) were provided with several excess policies through commercial insurance carriers which provide for coverage in excess of the applicable per occurrence self-insured retention (either $3 million or $10 million) up to [removed: $200] [added: $250] million per occurrence and in the aggregate.

The 9 behavioral health facilities acquired from Ascend Health Corporation in October, 2012 have general and professional liability policies through commercial insurance carriers which provide for up to $20 million of aggregate coverage, subject to a [removed: $10,000] [added: $25,000] per occurrence deductible.

These facilities, like our other facilities, are also provided excess coverage through commercial insurance carriers for coverage in excess of the underlying commercial policy limitations up to [removed: $200] [added: $250] million per occurrence and in the aggregate.

As of December 31, 2012, the total accrual for our professional and general liability [removed: claims, including the estimated] claims [removed: related to the facilities acquired from PSI,] was $279 million, of which $48 million is included in current liabilities.

As of December 31, [removed: 2011,] [added: 2013,] the total accrual for our professional and general liability [removed: claims, including the estimated] claims [removed: related to the facilities acquired from PSI,] was [removed: $292] [added: $206] million, of which [removed: $60] [added: $44] million is included in current liabilities.

We recorded reductions to our professional and general liability self-insurance reserves (relating to prior years) amounting to [removed: $27] [added: $81] million during [removed: 2012, $11] [added: 2013, $27] million during [removed: 2011] [added: 2012] and [removed: $49] [added: $11] million during [removed: 2010.][added: 2011.]

The favorable [removed: changes] [added: change] in our estimated future claims payments recorded during [removed: 2010] [added: 2013, relating to years prior to 2013,] were due [added: primarily] to: (i) an increased weighting given to company-specific metrics (to [removed: 75%] [added: 100%] from [removed: 50%),] [added: 75%),] and decreased general industry metrics (to [removed: 25%] [added: 0%] from [removed: 50%),] [added: 25%),] related to projected incidents per exposure, historical claims experience and loss development factors; (ii) historical data which measured the realized favorable impact of medical malpractice tort reform experienced in several states in which we operate, and; (iii) a decrease in claims related to certain higher risk specialties (such as obstetrical) due to a continuation of the company-wide patient safety initiative undertaken during the last several years.

[removed: There were no material] [added: The] adjustments [added: recorded during the last three years] to our prior year reserves for workers’ compensation claims [removed: recorded during] [added: did not have a material impact on our consolidated results of operations for the years ended December 31, 2013,] 2012 or 2011.

Although we are unable to predict whether or not our future financial statements will include adjustments to our prior year reserves for self-insured general and professional and workers’ compensation claims, given the relatively unpredictable nature of the these potential liabilities and the factors impacting these [removed: reserves] [added: 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, [removed: 2012] [added: 2013] (amount in thousands):

| Plus: Accrued insurance expense, net of commercial premiums paid (a) [removed: (b)] | | | [removed: 4,742] [added: 50,865] | | | | [removed: 14,997] [added: 32,747] | | | | [removed: 19,739] [added: 83,612] | |

| Less: Payments made in settlement of self-insured claims | | | [removed: (31,713] [added: (37,127] | ) | | | [removed: (18,460] [added: (33,517] | ) | | | [removed: (50,173] [added: (70,644] | ) |

| Plus: Liabilities assumed in the acquisition of PSI | | | [removed: 50,800] [added: (4,467] | [added: )] | | | [removed: 31,956] [added: 0] | | | | [removed: 82,756] [added: (4,467] | [added: )] |

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._

| | • | | in March, 2010, the Health Care and Education Reconciliation Act of 2010 and the Patient Protection and Affordable Care Act were enacted into law and created significant changes to health insurance coverage for U.S. citizens as well as material revisions to the federal Medicare and state Medicaid programs. The two combined primary goals of these acts are to provide for increased access to coverage for healthcare and to reduce healthcare-related expenses. Medicare, Medicaid and other health care industry changes are scheduled to be implemented at various times during this decade. We cannot predict the effect, if any, these enactments will have on our future results of operations; |

estimates will change by material amounts in the near term.

Our hospitals establish a partial reserve for self-pay accounts in the allowance for

As of December 31, 2013:

| Medicare | | $ | 66,125 | | | $ | 8,885 | | | $ | 2,983 | | | $ | 12,500 | |

| Medicaid | | | 20,710 | | | | 15,095 | | | | 10,309 | | | | 27,422 | |

| Commercial insurance and other | | | 237,587 | | | | 78,048 | | | | 35,671 | | | | 71,191 | |

| Private pay | | | 143,683 | | | | 96,294 | | | | 20,983 | | | | 4,354 | |

| Total | | $ | 468,105 | | | $ | 198,322 | | | $ | 69,946 | | | $ | 115,467 | |

As of December 31, 2013, the total accrual for our workers’ compensation liability claims was $64 million, of which $34 million is included in current liabilities.

As of December 31, 2012, the total accrual for our workers’ compensation liability claims was $66 million, of which $35 million is included in current liabilities.

| Balance at December 31, 2013 | | $ | 206,290 | | | $ | 63,798 | | | $ | 270,088 | |

_Property Insurance:_

Since certain of our facilities have been designated by our insurer as flood prone, we have elected to purchase policies from The National Flood Insurance Program to cover a substantial portion of the applicable deductible.

There were also no impairments during 2012 or 2011.

Net revenues increased 5% or $322 million to $7.28 billion during 2013 as compared to $6.96 billion during 2012.

| | • | | other combined net increase of $83 million consisting primarily of the net revenues generated during the first ten months of 2013 at nine behavioral health facilities acquired from Ascend Health Corporation in October, 2012 (the operating results for these facilities for the months of November and December of 2013 and 2012 are included in our behavioral health care facilities-same facility basis results). |

| | a. | a decrease of $28 million at our acute care facilities as discussed below in _Acute Care Hospital Services_, excluding the impact of the applicable items mentioned in c., d., h., and j., below; |

| | b. | an increase of $57 million at our behavioral health facilities, as discussed below in _Behavioral Health Services,_ excluding the impact of the applicable items mentioned in c., and i., below; |

| | e. | a decrease of $26 million resulting from a gain realized on the sale of an acute care hospital (Auburn Regional Medical Center) which was sold during the fourth quarter of 2012; |

| | f. | an increase of $29 million resulting from the write-off deferred financing costs, during 2012, related to the portion of our Term Loan B credit facility that was extinguished during the third quarter of 2012; |

| | g. | an increase of $33 million due to a decrease in interest expense resulting primarily from a decrease in our average effective borrowing rate during 2013 as compared to 2012 (as discussed below in _Interest Expense_); |

| | h. | a net aggregate increase of $11 million resulting from the following unfavorable items recorded during 2012: (i) the revised Supplemental Security Income ratios utilized for calculating Medicare disproportionate share hospital reimbursements for federal fiscal years 2006 through 2009 ($7 million unfavorable impact), and; (ii) the write-off of receivables related to revenues recorded during 2011 at two of our acute care hospitals located in Florida resulting from reductions in certain county reimbursements due to reductions in federal matching Inter-Governmental Transfer funds ($4 million unfavorable impact); |

| | i. | a decrease of $14 million resulting from the 2011 portion, recorded in 2012, of net Medicaid supplemental reimbursements earned pursuant to new programs initiated in certain states in which we operate behavioral health facilities, most notably the Oklahoma Supplemental Hospital Offset Payment Program which was approved during 2012, retroactive to July 1, 2011; |

| | j. | an increase of $16 million related to the incentive income ($61 million in 2013 and $30 million in 2012), net of related expenses ($43 million in 2013 and $28 million in 2012), recorded during the each year in connection with the implementation of EHR applications at our acute care hospitals, and; |

| | k. | $8 million of other combined net increases. |

| --- | --- | --- |

| --- | --- | --- |

| | c. | an increase of $33 million (net of related expenses) resulting from the above-mentioned 2012 agreement with the United States Department of Health and Human Services, the Secretary of Health and Human Services, and the Centers for Medicare and Medicaid Services; |

| --- | --- | --- |

| --- | --- | --- |

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| Net revenues | | | 3,566,825 | | | | 100.0 | % | | | 3,437,864 | | | | 100.0 | % |

| --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| | • | | our level of indebtedness has increased substantially as a result of our 2010 acquisition of PSI, and increased more as a result of our acquisition of Ascend Health Corporation in October, 2012 (as discussed herein), which could, among other things, adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the economy or our industry and could potentially prevent us from meeting our obligations under the agreements related to our indebtedness; |

| | 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; |

| --- | --- |

| --- | --- |

administrative review and audit and our estimates may vary from the final settlements.

Third party liability accounts are fully

As of December 31, 2012, our accounts receivable includes $70 million due from Illinois ($54 million as of December 31, 2011), the collection of which has been delayed due to budgetary and funding pressures experienced by the state.

Although as of December 31, 2012 approximately $51 million of the receivables due from Illinois have been outstanding in excess of 60 days ($41 million as of December 31, 2011), and a large portion will likely remain outstanding for the foreseeable future, we expect to eventually collect all amounts due to us and therefore no related reserves have been established in our consolidated financial statements.

However, we can provide no assurance that we will eventually collect all amounts due to us from Illinois.

Failure to ultimately collect all outstanding amounts due from Illinois would have an adverse impact on our future consolidated results of operations and cash flows.

| Medicare | | $ | 62,219 | | | $ | 3,890 | | | $ | 1,190 | | | $ | 2,962 | |

| Medicaid | | | 27,891 | | | | 15,622 | | | | 9,288 | | | | 24,847 | |

| Commercial insurance and other | | | 221,850 | | | | 63,216 | | | | 30,984 | | | | 68,118 | |

| Private pay | | | 105,841 | | | | 77,267 | | | | 9,594 | | | | 18,826 | |

| Total | | $ | 417,801 | | | $ | 159,995 | | | $ | 51,056 | | | $ | 114,753 | |

certified EHR technology for the applicable period and the cost report information for the full cost report year that will determine the final calculation of the incentive payment is available.

occurrence.

Based upon the results of workers’ compensation reserves analyses, during 2010, we recorded a reduction to our prior year reserves for workers’ compensation claims amounting to $4 million.

| Balance at January 1, 2010 | | $ | 265,608 | | | $ | 42,531 | | | $ | 308,139 | |

| Less: Adjustments to liabilities assumed in the acquisition of PSI | | | (4,467 | ) | | | 0 | | | | (4,467 | ) |

| --- | --- |

| (b) | Workers compensation amount for 2010 is net of adjustment recorded during the year, as discussed above. |

| --- | --- |

The 9 behavioral health facilities acquired from Ascend Health Corporation in October, 2012 have commercial property insurance policies which provide for full replacement cost coverage, subject to a $10,000 deductible.

Due to an increase in property losses experienced nationwide in recent years, the cost of commercial property insurance has increased.

Net revenues increased 38% or $1.86 billion to $6.76 billion during 2011 as compared to $4.90 billion during 2010.

| | • | | $1.64 billion increase in revenues at the facilities acquired by us from PSI (includes the period of January through November of 2011 as compared to November 15th through November 30th of 2010). |

| | • | | an increase of $25 million at our acute care facilities, as discussed below in _Acute Care Hospital Services,_ exclusive of: (i) the $32 million net unfavorable change in the reductions recorded during 2011 and 2010 to our professional and general liability reserves, as discussed above in _Self-Insured Risks_ (the amounts attributable to our acute care hospitals were $10 million in 2011 and $42 million in 2010), and; (ii) the favorable change caused by the $7 million charge recorded during 2010 to write-off certain costs related to an acute care hospital construction project; |

| | • | | a decrease of $123 million due to an increase in interest expense resulting primarily from the cost of borrowings utilized to finance the acquisition of PSI in November, 2010; |

| | • | | an increase of $53 million resulting from the transaction fees incurred during 2010 in connection with our acquisition of PSI, and; |

| | • | | a net decrease of $31 million from other combined net unfavorable changes consisting of: (i) a $9 million increase resulting from the charge incurred during 2010 in connection with split-dollar life insurance agreements entered into during 2010 on the lives of our chief executive officer and his wife; (ii) a $7 million increase resulting from the charge recorded during 2010 to write-off certain costs related to an acute care hospital construction project; (iii) a net decrease of $8 million resulting from |

| | the net unfavorable change in the operating results of Auburn Regional Medical Center and Peak Behavioral Health Services which are reflected as discontinued operations, and; (iv) a net decrease of $39 million from other combined net unfavorable changes including the corporate overhead expenses incurred in connection with the behavioral health care facilities acquired from PSI. |

| Net revenues | | | 3,423,957 | | | | 100.0 | % | | | 3,272,488 | | | | 100.0 | % |

| Salaries, wages and benefits | | | 1,507,870 | | | | 44.0 | % | | | 1,430,453 | | | | 43.7 | % |

| Other operating expenses | | | 704,067 | | | | 20.6 | % | | | 672,591 | | | | 20.6 | % |

| Supplies expense | | | 622,175 | | | | 18.2 | % | | | 624,427 | | | | 19.1 | % |

| Depreciation and amortization | | | 190,322 | | | | 5.6 | % | | | 171,682 | | | | 5.2 | % |

We performed periodic assessments of the cash flow hedge instruments during [removed: 2012] [added: 2013] and [removed: 2011] [added: 2012] and determined the hedges to be highly effective.

However, at December 31, [removed: 2012,] [added: 2013,] each swap agreement entered into by us was in a net liability position which would require us to make the net settlement payments to the counterparties.

During [removed: the first quarter of] 2011, we entered into [removed: an] [added: a forward starting] interest rate cap on a total notional amount of [removed: $275] [added: $450] million [added: from December, 2011 to December, 2012 reducing to $400 million from December, 2012 to December, 2013] whereby we paid a premium of [removed: $30,000] [added: $740,000] in exchange for the counterparty agreeing to pay the difference between [removed: 2.25%] [added: 7.00%] and three-month LIBOR if the three-month LIBOR rate rises above [removed: 2.25%] [added: 7.00%] during the term of the [removed: cap, which expired in December, 2011.][added: cap.]

[removed: If the] [added: The] three-month LIBOR [removed: does not reach] [added: never reached] 7.00% during the term of the cap, [added: which expired in December, 2013, and therefore] no payment [removed: is] [added: was] made to us.

We also entered into six [removed: additional] forward starting interest rate swaps in [removed: the first quarter of] 2011 whereby we pay a fixed rate on a total notional amount of $425 million and receive three-month LIBOR.

The three remaining interest rate swaps with total notional amounts of [removed: $100] [added: $75] million, $25 million and [removed: $75] [added: $100] million became effective in December, 2011 and have [added: corresponding] fixed rates of [removed: 2.50%, 1.96% and] 1.32%, [removed: and maturity dates in December, 2014, December, 2013] [added: 1.96%] and [removed: December, 2012, respectively.][added: 2.50%.]

[removed: We also] [added: During 2010, we] entered into four forward starting interest rate swaps [removed: in the fourth quarter of 2010] whereby we pay a fixed rate on a total notional amount [added: of $600 million and receive three-month LIBOR.]

During the fourth quarter of 2007, we entered into two interest rate swaps whereby we [removed: pay] [added: paid] a fixed rate on a total notional principal amount of $150 million and [removed: receive] [added: received] three-month LIBOR.

Each of the two interest rate [removed: swaps] [added: swaps, which are now expired,] had an initial notional principal amount of $75 million.

The [removed: notional amount of] [added: fixed rate payable on] the [removed: first] [added: other] interest rate [removed: swap] [added: swap, on which the notional principal amount] reduced to $50 million in October, [removed: 2010.The fixed rate payable] [added: 2010,] was 4.76% and it matured in October, 2012.

The fixed rate payable on [added: one of] the [removed: second] interest rate [removed: swap] [added: swaps] was 4.87% and it matured in October, 2011.

[removed: The] [added: At December 31, 2012, the] fair value of our interest rate swaps was a liability of $41 [removed: million at December 31, 2012,] [added: million,] substantially all of which is included in other noncurrent liabilities on the accompanying balance sheet.

[removed: At December 31, 2011, the] [added: The] fair value of our interest rate swaps was a liability of [removed: $48 million,] [added: $24 million at December 31, 2013,] of which [removed: $4] [added: $19] million is included in other current liabilities and [removed: $44] [added: $5] million is included in other noncurrent liabilities on the accompanying balance sheet.

The table below presents information about our long-term financial instruments that are sensitive to changes in interest rates as of December 31, [removed: 2012.][added: 2013.]

| | | [removed: 2013 | | | |] 2014 | | | | 2015 | | | | 2016 | | | | 2017 | | | | [added: 2018 | | | |] Thereafter | | | | Total | | |

| Average interest rates | | | 7.0 | % | | | 7.0 | % | | | 7.0 | % | | | [removed: 7.0] [added: 6.9] | % | | | 6.9 | % | | | [removed: 6.9] [added: 6.1] | % | | | [removed: 7.0] [added: 6.8] | % |

| Average interest rates | | | [removed: 2.3] [added: 2.5] | % | | | 2.3 | % | | | [removed: 3.3] | [removed: %] | | | [removed: 2.3] | [removed: %] | | | | | | | | | | | 2.3 | % |

| Notional amount | | $ | [removed: 25,000] [added: 100,000] | | | $ | [removed: 100,000] [added: 825,000] | | | [removed: $] | [removed: 825,000] | | | | | | | | | | | | | | | $ | [removed: 950,000] [added: 925,000] | |

| Average interest rates | | | [removed: 2.0] [added: 1.8] | % | | | [removed: 2.5] [added: 1.8] | % | | | [removed: 2.3] [added: 1.8] | % | | | | | | | | | | | | | | | [removed: 2.3] [added: 1.8] | % |

As calculated based upon our variable rate debt outstanding as of December 31, [removed: 2012] [added: 2013] that is subject to interest rate fluctuations, each 1% change in interest rates would impact our pre-tax income by approximately [removed: $21] [added: $17] million.

The $75 million and $25 million interest rate swaps matured in December, 2012 and December, 2013, respectively, and the $100 million interest rate swap is scheduled to mature in December, 2014.

| Debt | | $ | 1,909 | | | $ | 18,003 | | | $ | 401,720 | | | $ | 1,798 | | | $ | 251,893 | | | $ | 12,241 | | | $ | 687,564 | |

| Debt | | $ | 97,403 | | | $ | 121,258 | | | $ | 2,402,849 | | | | | | | | | | | | | | | $ | 2,621,510 | |

##### [Table of Contents](#toc)

The three-month LIBOR never reached 2.25% during the term of the cap.

Therefore, no payment was made to us.

We also entered into a forward starting interest rate cap on a total notional amount of $450 million from December, 2011 to December, 2012 reducing to $400 million from December, 2012 to December, 2013 whereby we paid a premium of $740,000 in exchange for the counterparty agreeing to pay the difference between 7.00% and three-month LIBOR if the three-month LIBOR rate rises above 7.00% during the term of the cap.

During the fourth quarter of 2010, we entered into three interest rate caps on a total notional amount of $1 billion whereby we paid a premium of $240,000 in exchange for the counterparties agreeing to pay the difference between 2.25% and three-month LIBOR if the three-month LIBOR rate rises above 2.25% during the term of the caps.

All of these caps expired in December, 2011.

The three-month LIBOR rate never rose above 2.25% during the term of the caps.

Therefore, no payments were made to us.

of $600 million and receive three-month LIBOR.

| Debt | | $ | 1,974 | | | $ | 1,720 | | | $ | 17,404 | | | $ | 401,188 | | | $ | 1,262 | | | $ | 272,776 | | | $ | 696,324 | |

| Debt | | $ | 615 | | | $ | 292 | | | $ | 51,184 | | | $ | 2,981,605 | | | | | | | | | | | $ | 3,033,696 | |

| Interest rate caps: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Notional amount | | $ | 400,000 | | | | | | | | | | | | | | | | | | | | | | | $ | 400,000 | |

| Average interest rates | | | 7.00 | % | | | | | | | | | | | | | | | | | | | | | | | 7.00 | % |

As of February [removed: 28, 2013,] [added: 27, 2014,] we owned and/or operated [removed: 23] [added: 24] acute care hospitals and [removed: 197] [added: 193] behavioral health centers located in 37 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands.

Net revenues from our acute care hospitals, surgical hospitals, surgery centers and radiation oncology centers accounted for [removed: 50%] [added: 49%] of our consolidated net revenues in [removed: 2012, 51%] [added: 2013, 50%] in [removed: 2011] [added: 2012] and [removed: 67%] [added: 51%] in [removed: 2010.][added: 2011.]

Net revenues from our behavioral health care facilities accounted for 50% of our consolidated net revenues during [removed: 2012, 49% during 2011] [added: each of 2013] and [removed: 33%] [added: 2012 and 49%] during [removed: 2010.][added: 2011.]

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 [removed: 2012.][added: 2013.]

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 [removed: 2012.][added: 2002.]

[removed: _2012] [added: _2013] Acquisition and Divestiture Activity:_

The aggregate pre-tax gain on [removed: the divestiture of San Juan Capestrano in January, 2012] [added: these divestitures] did not have a material impact on our consolidated results of operations during [removed: 2012.][added: 2013.]

Current industry trends in utilization and occupancy have been significantly [added: affected by changes in reimbursement policies of third party payors.]

Information related to the behavioral health care facilities acquired by us in connection with our acquisition of Ascend Health Corporation is included for the [removed: period of October 10, 2012 through December 31, 2012.]

| | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | | | [removed: 2008] [added: 2009] | | |

| Acute Care Hospitals (1) | | | [removed: 5,682] [added: 5,652] | | | | [removed: 5,726] [added: 5,682] | | | | [removed: 5,689] [added: 5,726] | | | | [removed: 5,484] [added: 5,689] | | | | [removed: 6,101] [added: 5,484] | |

| Behavioral Health Centers | | | [removed: 19,362] [added: 19,975] | | | | [removed: 19,280] [added: 19,362] | | | | [removed: 9,427] [added: 19,280] | | | | [removed: 7,921] [added: 9,427] | | | | [removed: 7,658] [added: 7,921] | |

| Acute Care Hospitals (1) | | | [removed: 5,457] [added: 5,429] | | | | [removed: 5,424] [added: 5,457] | | | | [removed: 5,383] [added: 5,424] | | | | [removed: 5,128] [added: 5,383] | | | | [removed: 5,249] [added: 5,128] | |

| Behavioral Health Centers | | | [removed: 19,282] [added: 19,876] | | | | [removed: 19,262] [added: 19,282] | | | | [removed: 9,409] [added: 19,262] | | | | [removed: 7,901] [added: 9,409] | | | | [removed: 7,629] [added: 7,901] | |

| Acute Care Hospitals (1) | | | [removed: 251,099] [added: 246,160] | | | | [removed: 258,754] [added: 251,099] | | | | [removed: 264,470] [added: 258,754] | | | | [removed: 265,244] [added: 264,470] | | | | [removed: 268,207] [added: 265,244] | |

| Behavioral Health Centers | | | [removed: 374,865] [added: 402,088] | | | | [removed: 352,208] [added: 374,865] | | | | [removed: 166,434] [added: 352,208] | | | | [removed: 136,639] [added: 166,434] | | | | [removed: 129,553] [added: 136,639] | |

| Acute Care Hospitals (1) | | | 4.5 | | | | [removed: 4.4] [added: 4.5] | | | | 4.4 | | | | 4.4 | | | | [removed: 4.5] [added: 4.4] | |

| Behavioral Health Centers | | | [removed: 14.0] [added: 13.3] | | | | [removed: 14.6] [added: 14.0] | | | | [removed: 15.1] [added: 14.6] | | | | [removed: 15.4] [added: 15.1] | | | | [removed: 16.1] [added: 15.4] | |

| Acute Care Hospitals (1) | | | [removed: 1,122,557] [added: 1,112,541] | | | | [removed: 1,151,183] [added: 1,122,557] | | | | [removed: 1,155,984] [added: 1,151,183] | | | | [removed: 1,166,704] [added: 1,155,984] | | | | [removed: 1,200,672] [added: 1,166,704] | |

| Behavioral Health Centers | | | [removed: 5,245,499] [added: 5,365,734] | | | | [removed: 5,157,454] [added: 5,245,499] | | | | [removed: 2,507,046] [added: 5,157,454] | | | | [removed: 2,105,625] [added: 2,507,046] | | | | [removed: 2,085,114] [added: 2,105,625] | |

| Acute Care Hospitals (1) | | | 54 | % | | | [removed: 55] [added: 54] | % | | | [removed: 56] [added: 55] | % | | | [removed: 58] [added: 56] | % | | | [removed: 54] [added: 58] | % |

| Behavioral Health Centers | | | 74 | % | | | [removed: 73] [added: 74] | % | | | 73 | % | | | 73 | % | | | [removed: 74] [added: 73] | % |

| Acute Care Hospitals (1) | | | 56 | % | | | [removed: 58] [added: 56] | % | | | [removed: 59] [added: 58] | % | | | [removed: 62] [added: 59] | % | | | 62 | % |

| Behavioral Health Centers | | | [removed: 75] [added: 74] | % | | | [removed: 73] [added: 75] | % | | | 73 | % | | | 73 | % | | | [removed: 75] [added: 73] | % |

| (1) | The statistical information for Auburn Regional Medical Center located in Washington (divested during the fourth quarter of 2012) [removed: and Central Montgomery Medical Center located in Pennsylvania (divested during the fourth quarter of 2008)] is included in the above information through [removed: each] [added: its] respective divestiture date. |

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 [added: directly from patients.]

Management’s Discussion and Analysis of Financial Condition and Results [removed: of Operations—Sources] [added: of_ _Operations—Sources] of Revenue_ for additional disclosure.

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 health care programs [removed: and self-referrals by physicians).]

These laws generally require prior approval [added: from the attorney general, advance notification and community involvement.]

[removed: 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.

[added: 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 [removed: health care program.]

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 [added: 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.]

[added: HITECH has also extended the] ability to impose civil money penalties on providers not knowing that a HIPAA violation has occurred.

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 [added: treatment in order to first inquire about the patient’s ability to pay.]

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 [added: indigent health care within the state.]

Over half of the states have limits on [removed: damages awards.]

Our facilities had approximately [removed: 65,100] [added: 66,100] employees on December 31, [removed: 2012,] [added: 2013,] of whom approximately [removed: 46,000] [added: 47,000] were employed full-time.

Within our acute care division, approximately [removed: 120] [added: 140] physicians are employed by physician practice management subsidiaries of ours either directly or through contracts with affiliated group practices structured as 501A corporations.

In addition, within our behavioral health division, approximately [removed: 360] [added: 380] psychiatrists are employed by subsidiaries of ours either directly or through contracts with affiliated group practices structured as 501A corporations.

During 2013, we spent $13 million for the purchase of real property located in Pennsylvania, Nevada and Arizona.

During 2013, we received $37 million in connection with the divestiture of Peak Behavioral Health Services and certain other assets and real property including three previously closed behavioral health care facilities.

We agreed to sell Peak Behavioral Health Services as part of our agreement with the Federal Trade Commission in connection with our acquisition of Ascend Health Corporation in October of 2012.

period of October 10, 2012 through December 31, 2012.

and self-referrals by physicians).

The law and regulations require Peer Review Organizations (“PROs”) to review the appropriateness of Medicare and

The Centers for Medicare and Medicaid Services (“CMS”) recently announced its intent to consolidate many of these Medicare and Medicaid program integrity functions into new unified program integrity contractors (“UPICs”), though it remains unclear what effect, if any, this proposed consolidation may have.

health care program.

damages awards.

Corona timely filed objections to the election and an appeal.

In October, 2012, we acquired Ascend Health Corporation (“Ascend”).

Ascend was the largest private behavioral health provider with 9 owned or leased freestanding inpatient facilities located in 5 states.

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

During 2012, we spent $528 million to acquire the following assets and businesses:

| | • | | spent $503 million to acquire 9 behavioral health care facilities from Ascend Health Corporation in October, 2012, and; |

| | • | | spent $25 million in connection with the acquisition of physician practices and various real property. |

In connection with the receipt of antitrust clearance from the Federal Trade Commission (“FTC”) in connection with our acquisition of Ascend Health Corporation in October of 2012, we agreed to certain conditions, including the divestiture, within approximately six months, of Peak Behavioral Health Services (“Peak”), a 104-bed behavioral health care facility located in Santa Teresa, New Mexico.

The revenues of Peak were approximately $18 million and $14 million during 2012 and 2011, respectively.

During 2012, we received $149 million from the divestiture of assets and businesses, including the following:

| | • | | received $93 million for the sale of Auburn Regional Medical Center (“Auburn”), a 159-bed acute care hospital located in Auburn, Washington (sold in October); |

| | • | | received $50 million for the sale of the Hospital San Juan Capestrano, a 108-bed acute care hospital located in Rio Piedras, Puerto Rico (sold in January pursuant to our agreement with the FTC in connection with our acquisition of Psychiatric Solutions, Inc. in November, 2010), and; |

| | • | | received an aggregate of $6 million for the sale of the real property of two non-operating behavioral health facilities and our majority ownership interest in an outpatient surgery center located in Puerto Rico. |

The aggregate pre-tax gain on the divestiture of Auburn was approximately $26 million and is included in our 2012 consolidated results of operations.

_The Ascend Acquisition_

In October, 2012, we paid $503 million to acquire Ascend Health Corporation (“Ascend”) which owned or leased 9 freestanding inpatient behavioral health care facilities located in 5 states including Texas, Arizona, Utah, Oregon and Washington.

At the time of the acquisition, Ascend was the largest private behavioral health care provider.

The facilities acquired by us have an aggregate of approximately 800 licensed beds with additional capacity for approximately 65 beds currently being constructed.

affected by changes in reimbursement policies of third party payors.

directly from patients.

from the attorney general, advance notification and community involvement.

Nonetheless, because the

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.

HITECH has also extended the

treatment in order to first inquire about the patient’s ability to pay.

indigent health care within the state.

Associations of California/Union of Health Care Professionals (UNAC/UHCP).

quality and range of services, quality of the medical staff and convenience.

In September, 2010, we, along with many other companies in the healthcare industry, received a letter from the United States Department of Justice (“DOJ”) advising of a False Claim Act investigation being conducted in connection with the implantation of implantable cardioverter defibrillators (“ICDs”) from 2003 to [removed: the present] [added: 2010] at several of our acute care facilities.

The DOJ alleges that ICDs were implanted and billed by our facilities in contravention of a National [removed: Claims] [added: Coverage] Determination regarding these devices.

In July, 2012, one of our subsidiaries, Peachford Behavioral Health System of Atlanta located in Atlanta, Georgia, received a subpoena from the OIG for the Department of Health and Human Services requesting various [removed: documents from 2004 to the present.]

In February, 2013, the OIG served a subpoena requesting various documents from [removed: January] [added: January,] 2008 to the [removed: present] [added: date of the subpoena] directed at Universal Health Services, Inc. (“UHS”) concerning it and UHS of Delaware, Inc., and several UHS owned facilities including: Keys of Carolina, Old Vineyard Behavioral Health, The Meadows Psychiatric Center, Streamwood Behavioral Health, Hartgrove Hospital, Rock River Academy and Residential Treatment Center, Roxbury Treatment Center, Harbor Point Behavioral Health Center, f/k/a, The Pines Residential Treatment Center, including the Crawford, Brighton and Kempsville campuses, Wekiva Springs Center and River Point Behavioral Health.

Prior to receiving this subpoena: (i) the Keys of Carolina and Old Vineyard received notification during the second half of 2012 from the United States Department of Justice of its intent to proceed with an investigation following requests for documents [removed: from] [added: for the period of] January, 2007 to [removed: the present] [added: October, 2012] from the North Carolina state Attorney General’s Office; (ii) Harbor Point Behavioral Health Center received a subpoena in December, 2012 from the Attorney General of the Commonwealth of Virginia requesting various documents from [removed: July] [added: July,] 2006 to the [removed: present,] [added: date of the subpoena,] and; (iii) The Meadows Psychiatric Center received a subpoena from the OIG in February, 2013 requesting certain documents from 2008 to the [removed: present.][added: date of the subpoena.]

Included in our consolidated balance sheets as of December 31, [removed: 2012] [added: 2013] and [removed: 2011,] [added: 2012,] is an estimated reserve (current liability) and corresponding commercial insurance recovery (current asset) which did not have a material impact on our financial statements.

Government action has increased with respect to investigations and/or allegations concerning possible violations of fraud and [added: abuse and false claims statutes and/or regulations by healthcare providers.]

documents.

We have provided all requested documents.

During the fourth quarter of 2013, we were notified that the governmental agencies investigating this matter had declined to proceed.

In April, 2013, the OIG served facility specific subpoenas on Wekiva Springs Center and River Point Behavioral Health requesting various documents from January, 2005 to the date of the subpoena.

In June, 2013, the OIG served a subpoena on Coastal Harbor Health System in Savannah, Georgia requesting documents from January, 2009 to the date of the subpoena.

In July, 2013, another subpoena was issued to Wekiva Springs Center and River Point Behavioral Health requesting additional records.

We have been advised by the DOJ’s Criminal Frauds Section that they have received a referral from the DOJ Civil Division and have opened an investigation of River Point Behavioral Health and Wekiva Springs Center.

In February, 2014, we were notified that the investigation conducted by the Criminal Frauds Section has been expanded to include the National Deaf Academy.

We had previously agreed to a settlement of this matter which was approved by Virginia state officials during the first quarter of 2014.

_Two Rivers Psychiatric Hospital:_

In April, 2011, the Centers for Medicare and Medicaid Services (“CMS”) issued notice of its decision terminating Two Rivers Psychiatric Hospital (“Two Rivers”) in Kansas City, Missouri from participation in the Medicare and Medicaid program.

The termination notice was issued as a result of surveys conducted which allegedly found Two Rivers to be out of compliance with the conditions of participation required for participation in the Medicare program and for Two Rivers’ alleged failure to alleviate an “immediate jeopardy” situation.

Two Rivers filed an administrative appeal with the U.S. Department of Health and Human Services, Departmental

Appeal Board, Civil Remedies Division, seeking review and reversal of that decision.

In addition, Two Rivers filed a complaint in the U.S. District Court for the Western District of Missouri seeking a temporary restraining order and preliminary injunction against CMS rescinding the termination action.

Later in April, 2011, the District Court issued a temporary restraining order abating the termination action pending a preliminary injunction hearing or an agreement with CMS.

In May, 2011, Two Rivers and CMS entered into a settlement agreement which resulted in the rescission of the termination notice and actions by CMS.

Pursuant to the terms of the agreement, Two Rivers was required to submit an acceptable plan of correction relative to the immediate jeopardy citation and engage independent experts in various disciplines to analyze and develop implementation plans for Two Rivers to meet the applicable Medicare conditions of participation.

Both of these actions have occurred.

Pursuant to the agreement, CMS conducted an initial survey of Two Rivers in April 2012 to determine if the Medicare conditions of participation, which formed the basis of the termination action in April 2011, had been met.

In late April, 2012, CMS advised Two Rivers that it has successfully passed this initial survey.

Pursuant to the terms of the agreement, a second survey will be conducted in early 2013 to further confirm that Two Rivers is in compliance with all Medicare/Medicaid Conditions of Participation.

During the term of this agreement, Two Rivers remains eligible to receive reimbursements for services rendered to Medicare and Medicaid beneficiaries.

Two Rivers remains fully committed to providing high-quality healthcare to their patients and the community it serves.

We therefore intend to work expeditiously and collaboratively with CMS in an effort to resolve these matters.

We can provide no assurance that Two Rivers will not ultimately lose its Medicare certification.

The operating results of Two Rivers did not have a material impact on our consolidated results of operations or financial condition for the years ended December 31, 2012 or 2011.

We are in the process of securing and collecting the requested documents for production.

At present, we are uncertain as to the focus, scope or extent of the investigation, liability of the facility and/or potential financial exposure, if any, in connection with this matter.

We have recently reached a preliminary settlement of this matter which requires finalization of a definitive agreement and approval of Virginia state officials.

abuse and false claims statutes and/or regulations by healthcare providers.

10-K 1 [removed: d444706d10k.htm] [added: d649956d10k.htm] UNIVERSAL HEALTH SERVICES INC--FORM 10-K

For the fiscal year ended December 31, [removed: 2012][added: 2013]

The aggregate market value of voting stock held by non-affiliates at June 30, [removed: 2012] [added: 2013] was [removed: $3.82] [added: $6.0] billion.

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, [removed: 2013,] [added: 2014,] were [removed: 6,625,708, 90,407,949,] [added: 6,595,708; 91,321,038;] 664,000 and [removed: 31,942,] [added: 29,983,] respectively.

Portions of the registrant’s definitive proxy statement for our [removed: 2012] [added: 2013] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2012] [added: 2013] (incorporated by reference under Part III).

[removed: 2012] [added: 2013] FORM 10-K ANNUAL REPORT

| Item 1 | | [removed: [Business](#toc444706_2)] [added: [Business](#toc649956_2)] | | | 1 | |

| Item 1A | | [Risk [removed: Factors](#toc444706_3)] [added: Factors](#toc649956_3)] | | | 15 | |

| Item 1B | | [Unresolved Staff [removed: Comments](#toc444706_4)] [added: Comments](#toc649956_4)] | | | 28 | |

| Item 2 | | [removed: [Properties](#toc444706_5)] [added: [Properties](#toc649956_5)] | | | 28 | |

| Item 3 | | [Legal [removed: Proceedings](#toc444706_6)] [added: Proceedings](#toc649956_6)] | | | 34 | |

| Item 4 | | [Mine Safety [removed: Disclosure](#toc444706_7)] [added: Disclosure](#toc649956_7)] | | | 37 | |

| Item 5 | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#toc444706_9)] [added: Securities](#toc649956_9)] | | | 38 | |

| Item 6 | | [Selected Financial [removed: Data](#toc444706_10)] [added: Data](#toc649956_10)] | | | 41 | |

| Item 7 | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#toc444706_11)] [added: Operations](#toc649956_11)] | | | 42 | |

| Item 7A | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#toc444706_12)] [added: Risk](#toc649956_12)] | | | [removed: 87] [added: 88] | |

| Item 8 | | [Financial Statements and Supplementary [removed: Data](#toc444706_13)] [added: Data](#toc649956_13)] | | | 89 | |

| Item 9 | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#toc444706_14)] [added: Disclosure](#toc649956_14)] | | | [removed: 89] [added: 90] | |

| Item 9A | | [Controls and [removed: Procedures](#toc444706_15)] [added: Procedures](#toc649956_15)] | | | 90 | |

| Item 9B | | [Other [removed: Information](#toc444706_16)] [added: Information](#toc649956_16)] | | | 90 | |

| [PART [removed: III](#toc444706_17)] [added: III](#toc649956_17)] | | | | | | |

| Item 10 | | [Directors, Executive Officers and Corporate [removed: Governance](#toc444706_18)] [added: Governance](#toc649956_18)] | | | 91 | |

| Item 11 | | [Executive [removed: Compensation](#toc444706_19)] [added: Compensation](#toc649956_19)] | | | 91 | |

| Item 12 | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#toc444706_20)] [added: Matters](#toc649956_20)] | | | 91 | |

| Item 13 | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#toc444706_21)] [added: Independence](#toc649956_21)] | | | 91 | |

| Item 14 | | [Principal Accountant Fees and [removed: Services](#toc444706_22)] [added: Services](#toc649956_22)] | | | 91 | |

| Item 15 | | [Exhibits and Financial Statement [removed: Schedules](#toc444706_24)] [added: Schedules](#toc649956_24)] | | | 92 | |

This Annual Report on Form 10-K is for the year ended December 31, [removed: 2012.][added: 2013.]

| [PART I](#toc649956_1) | | | | | | |

| [PART II](#toc649956_8) | | | | | | |

| [PART IV](#toc649956_23) | | | | | | |

| [SIGNATURES](#toc649956_25) | | | | | 97 | |

| [PART I](#toc444706_1) | | | | | | |

| [PART II](#toc444706_8) | | | | | | |

| [PART IV](#toc444706_23) | | | | | | |

| [SIGNATURES](#toc444706_25) | | | | | 97 | |

| Aurora Pavilion | | Aiken, South Carolina | | | [removed: 59] [added: 62] | | | | Owned | |

| Centennial Hills Hospital Medical Center (1) | | Las Vegas, Nevada | | | [removed: 171] [added: 177] | | | | Owned | |

| Corona Regional Medical Center | | Corona, California | | | [removed: 240] [added: 238] | | | | Owned | |

| Doctors’ Hospital of Laredo (9) | | Laredo, Texas | | | [removed: 180] [added: 183] | | | | Owned | |

| Northern Nevada Medical Center | | Sparks, Nevada | | | [removed: 100] [added: 108] | | | | Owned | |

| Northwest Texas Healthcare System | | Amarillo, Texas | | | [removed: 404] [added: 385] | | | | Owned | |

| The Pavilion at Northwest Texas Healthcare System | | Amarillo, Texas | | | [removed: 85] [added: 90] | | | | Owned | |

| Inland Valley Campus (3) | | Wildomar, California | | | [removed: 130] [added: 132] | | | | Leased | |

| Rancho Springs Campus | | Murrieta, California | | | [removed: 122] [added: 120] | | | | Owned | |

| Spring Valley Hospital Medical Center (1) | | Las Vegas, Nevada | | | [removed: 231] [added: 237] | | | | Owned | |

| Texoma Medical Center | | Denison, Texas | | | [removed: 191] [added: 228] | | | | Owned | |

| Alhambra Hospital [removed: (10)] | | Rosemead, California | | | 103 | | | | Owned | |

| Alliance Health Center [removed: (10)] | | Meridian, Mississippi | | | 214 | | | | Owned | |

| Arrowhead Behavioral Health [removed: (10)] | | Maumee, Ohio | | | 52 | | | | Owned | |

| Atlantic Shores Hospital [removed: (10)] | | Fort Lauderdale, Florida | | | 72 | | | | Owned | |

| Austin Lakes Hospital [removed: (10)] | | Austin, Texas | | | 54 | | | | Leased | |

| Behavioral Educational Services [removed: (10)] | | Riverdale, Florida | | | — | | | | Leased | |

| Behavioral Hospital of Bellaire [removed: (12)] | | Houston, Texas | | | [removed: 76] [added: 120] | | | | Leased | |

| Belmont Pines Hospital [removed: (10)] | | Youngstown, Ohio | | | 102 | | | | Owned | |

| Benchmark Behavioral Health System [removed: (10)] | | Woods Cross, Utah | | | 84 | | | | Owned | |

| Bloomington Meadows Hospital [removed: (10)] | | Bloomington, Indiana | | | 78 | | | | Owned | |

| Brentwood Behavioral Health of Mississippi [removed: (10)] | | Flowood, Mississippi | | | 105 | | | | Owned | |

| Brentwood Hospital [removed: (10)] | | Shreveport, Louisiana | | | 200 | | | | Owned | |

| Brook Hospital—Dupont [removed: (10)] | | Louisville, Kentucky | | | 88 | | | | Owned | |

| Brook Hospital—KMI [removed: (10)] | | Louisville, Kentucky | | | 110 | | | | Owned | |

| Brooke Glen Behavioral Hospital [removed: (10)] | | Fort Washington, Pennsylvania | | | 146 | | | | Owned | |

| Brynn Marr Hospital [removed: (10)] | | Jacksonville, North Carolina | | | 100 | | | | Owned | |

| Calvary Addiction Recovery Center [removed: (10)] | | Phoenix, Arizona | | | 50 | | | | Owned | |

| Canyon Ridge Hospital [removed: (10)] | | Chino, California | | | 106 | | | | Owned | |

| The Carolina Center for Behavioral Health | | Greer, South Carolina | | | [removed: 112] [added: 125] | | | | Owned | |

| Cedar Hills Hospital [removed: (12) (13)] [added: (10)] | | Beaverton, Oregon | | | 78 | | | | Owned | |

| Cedar Springs Behavioral Health [removed: (10)] | | Colorado Springs, Colorado | | | 110 | | | | Owned | |

| Chicago Children’s Center for Behavioral Health [removed: (10)] | | Chicago, Illinois | | | 40 | | | | Leased | |

| Community Cornerstones [removed: (10)] | | Rio Piedras, Puerto Rico | | | — | | | | Leased | |

| Copper Hills Youth Center [removed: (10)] | | West Jordan, Utah | | | 197 | | | | Owned | |

| Cumberland Hall [removed: (10)] | | Hopkinsville, Kentucky | | | 97 | | | | Owned | |

| Cumberland Hospital [removed: (10)] | | New Kent, Virginia | | | 130 | | | | Owned | |

| Cypress Creek Hospital [removed: (10)] | | Houston, Texas | | | 96 | | | | Owned | |

| Diamond Grove Center [removed: (10)] | | Louisville, Mississippi | | | 55 | | | | Owned | |

| Emerald Coast Behavioral Hospital [removed: (10)] | | Panama City, Florida | | | 90 | | | | Owned | |

| Temecula Valley Hospital | | Temecula, California | | | 140 | | | | Owned | |

| Austin Oaks Hospitals | | Austin, Texas | | | 80 | | | | Owned | |

| Palm Shores Behavioral Health Center | | Bradenton, Florida | | | 64 | | | | Owned | |

| --- | --- |

| Bristol Youth Academy | | Bristol, Florida | | | 60 | | | | Owned | |

| Community Behavioral Health | | Memphis, Tennessee | | | 50 | | | | Leased | |

| Gulf Coast Youth Academy (10) | | Fort Walton Beach, Florida | | | 24 | | | | Owned | |

| John Costigan Center (Streamwood RTC) (10) | | Streamwood, Illinois | | | 73 | | | | Owned | |

| Manatee Palms Youth Services (10) | | Bradenton, Florida | | | 60 | | | | Owned | |

| Peak Behavioral Health Services (10) | | Santa Teresa, New Mexico | | | 104 | | | | Owned | |

| --- | --- |

| --- | --- |

| (10) | These facilities were acquired by us in November, 2010 in connection with our acquisition of PSI. |

| (11) | Garfield Park was completed and opened in February, 2013. |

| (12) | These facilities were acquired by us in October, 2012 in connection with our acquisition of Ascend Health Corporation. |

The table below sets forth, for the quarters indicated, the high and low reported closing sales prices per share reported on the New York Stock Exchange for our Class B Common Stock for the years ended December 31, [removed: 2012] [added: 2013] and [removed: 2011:][added: 2012:]

| 1st | | $ | [removed: 44.78-$36.82] [added: 64.38-$49.69] | | | $ | [removed: 49.41-$42.06] [added: 44.78-$36.82] | |

| 2nd | | $ | [removed: 43.72-$37.30] [added: 71.20-$60.12] | | | $ | [removed: 56.41-$46.13] [added: 43.72-$37.30] | |

| 3rd | | $ | [removed: 45.75-$38.25] [added: 74.99-$63.83] | | | $ | [removed: 54.64-$34.00] [added: 45.75-$38.25] | |

| 4th | | $ | [removed: 49.46-$41.31] [added: 83.12-$75.67] | | | $ | [removed: 42.90-$31.91] [added: 49.46-$41.31] | |

The number of stockholders of record as of January 31, [removed: 2013] [added: 2014] were as follows:

| Class A Common | | | [removed: 23] [added: 16] | |

| Class B Common | | | [removed: 308] [added: 286] | |

| Class D Common | | | [removed: 130] [added: 119] | |

During the period of October 1, [removed: 2012] [added: 2013] through December 31, [removed: 2012,] [added: 2013,] we repurchased the following shares:

| October, [removed: 2012] [added: 2013] | | | — | | | | [removed: 7,508] [added: 8,011] | | | N/A | | | 0 | | | | N/A | | | | N/A | | | | 767,702 | |

| November, [removed: 2012] [added: 2013] | | | — | | | | [removed: 40,781] [added: 27,434] | | | N/A | | | 0 | | | | N/A | | | | N/A | | | | 767,702 | |

| Total October through December | | | — | | | | [removed: 206,871] [added: 62,457] | | | N/A | | | 0 | | | | N/A | | | | N/A | | | | | |

| (a) | Substantially all the shares repurchased during the fourth quarter of [removed: 2012] [added: 2013] related to income tax withholding obligations resulting from the exercise of stock options. [removed: There were also 750 shares related to restricted shares that were forfeited by former employees pursuant to the terms of our restricted stock purchase plan.] No shares were repurchased pursuant to our publicly announced stock repurchase program. |

During the two years ending December 31, [removed: 2012,] [added: 2013,] dividends per share were declared and paid as follows (the fourth quarter of 2012 dividend paid includes a special dividend of $0.40 per share):

| Fourth quarter | | $ | [removed: .45] [added: .05] | | | $ | [removed: .05] [added: .45] | |

| Total | | $ | [removed: .60] [added: .20] | | | $ | [removed: .20] [added: .60] | |

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, [removed: 2012.][added: 2013.]

The graph assumes an investment of $100 made in our common stock and each Index as of January 1, [removed: 2008] [added: 2009] and has been weighted based on market capitalization.

Companies in the peer group, which consist of companies in the S&P 500 Index or S&P MidCap 400 Index (in which we are also included), are as follows: Community Health Systems, Inc., Health Management Associates, [added: Inc.,] LifePoint Hospitals, Inc., Tenet Healthcare Corporation and HCA Holdings, Inc. (included from March, 2011 at which time the company’s stock began publicly trading).

[removed: ][added: ]

| Company Name / Index | | [removed: 2007 | | | |] 2008 | | | | 2009 | | | | 2010 | | | | 2011 | | | | 2012 | | | [added: | 2013 | | |]

| | | 2013 | | | | 2012 | | |

| December, 2013 | | | — | | | | 27,012 | | | N/A | | | 0 | | | | N/A | | | | N/A | | | | 767,702 | |

| | | 2013 | | | | 2012 | | |

| Universal Health Services | | $ | 100.00 | | | $ | 163.32 | | | $ | 233.81 | | | $ | 210.19 | | | $ | 264.94 | | | $ | 446.59 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 126.46 | | | $ | 145.51 | | | $ | 148.59 | | | $ | 172.37 | | | $ | 228.19 | |

| Peer Group | | $ | 100.00 | | | $ | 263.75 | | | $ | 307.80 | | | $ | 219.38 | | | $ | 345.96 | | | $ | 509.53 | |

| | | 2012 | | | | 2011 | | |

| December, 2012 | | | — | | | | 158,582 | | | N/A | | | 0 | | | | N/A | | | | N/A | | | | 767,702 | |

| | | 2012 | | | | 2011 | | |

| Universal Health Services, Inc. | | $ | 100.00 | | | $ | 73.83 | | | $ | 120.59 | | | $ | 172.63 | | | $ | 155.19 | | | $ | 195.62 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 63.00 | | | $ | 79.67 | | | $ | 91.68 | | | $ | 93.61 | | | $ | 108.59 | |

| Peer Group | | $ | 100.00 | | | $ | 40.61 | | | $ | 107.12 | | | $ | 125.01 | | | $ | 89.10 | | | $ | 140.51 | |

The following table contains our selected financial data for, or as of the end of, each of the five years ended December 31, [removed: 2012.][added: 2013.]

| | | [added: 2013 | | | |] 2012 (4) | | | | 2011 | | | | 2010 (5) | | | | 2009 | | | [removed: | 2008 | | |]

| Net revenues | | $ | [removed: 6,961,400] [added: 7,283,822] | | | $ | [removed: 6,760,222] [added: 6,961,400] | | | $ | [removed: 4,900,147] [added: 6,760,222] | | | $ | [removed: 4,585,329] [added: 4,900,147] | | | $ | [removed: 4,437,597] [added: 4,585,329] | |

| Income from continuing operations before income taxes | | $ | [removed: 763,663] [added: 869,332] | | | $ | [removed: 696,336] [added: 763,663] | | | $ | [removed: 428,097] [added: 696,336] | | | $ | [removed: 474,722] [added: 428,097] | | | $ | [removed: 357,012] [added: 474,722] | |

| Net income attributable to UHS | | $ | [removed: 443,446] [added: 510,733] | | | $ | [removed: 398,167] [added: 443,446] | | | $ | [removed: 230,183] [added: 398,167] | | | $ | [removed: 260,373] [added: 230,183] | | | $ | [removed: 199,377] [added: 260,373] | |

| Net margin | | | [removed: 6.4] [added: 7.0] | % | | | [removed: 5.9] [added: 6.4] | % | | | [removed: 4.7] [added: 5.9] | % | | | [removed: 5.7] [added: 4.7] | % | | | [removed: 4.5] [added: 5.7] | % |

| Return on average equity | | | [removed: 17.2] [added: 16.8] | % | | | [removed: 18.1] [added: 17.2] | % | | | [removed: 12.1] [added: 18.1] | % | | | [removed: 15.4] [added: 12.1] | % | | | [removed: 13.0] [added: 15.4] | % |

| Cash provided by operating activities | | $ | [removed: 815,271] [added: 884,241] | | | $ | [removed: 718,251] [added: 799,231] | | | $ | [removed: 501,344] [added: 710,683] | | | $ | [removed: 541,262] [added: 501,344] | | | $ | [removed: 494,187] [added: 541,262] | |

| Capital expenditures, net (1) | | $ | [removed: 363,192] [added: 358,493] | | | $ | [removed: 285,682] [added: 363,192] | | | $ | [removed: 239,274] [added: 285,682] | | | $ | [removed: 379,748] [added: 239,274] | | | $ | [removed: 354,537] [added: 379,748] | |

| Total assets | | $ | [removed: 8,200,843] [added: 8,311,723] | | | $ | [removed: 7,665,245] [added: 8,200,843] | | | $ | [removed: 7,527,936] [added: 7,665,245] | | | $ | [removed: 3,964,463] [added: 7,527,936] | | | $ | [removed: 3,742,462] [added: 3,964,463] | |

| Long-term borrowings | | $ | [removed: 3,727,431] [added: 3,209,762] | | | $ | [removed: 3,651,428] [added: 3,727,431] | | | $ | [removed: 3,912,102] [added: 3,651,428] | | | $ | [removed: 956,429] [added: 3,912,102] | | | $ | [removed: 990,661] [added: 956,429] | |

| UHS’s common stockholders’ equity | | $ | [removed: 2,713,345] [added: 3,249,979] | | | $ | [removed: 2,296,352] [added: 2,713,345] | | | $ | [removed: 1,978,772] [added: 2,296,352] | | | $ | [removed: 1,751,071] [added: 1,978,772] | | | $ | [removed: 1,543,850] [added: 1,751,071] | |

| Percentage of total debt to total capitalization | | | [removed: 58] [added: 50] | % | | | [removed: 61] [added: 58] | % | | | [removed: 66] [added: 61] | % | | | [removed: 35] [added: 66] | % | | | [removed: 39] [added: 35] | % |

| Average licensed beds | | | [removed: 5,563] [added: 5,652] | | | | [removed: 5,567] [added: 5,563] | | | | [removed: 5,530] [added: 5,567] | | | | [removed: 5,334] [added: 5,530] | | | | [removed: 5,303] [added: 5,334] | |

| Average available beds | | | [removed: 5,338] [added: 5,429] | | | | [removed: 5,265] [added: 5,338] | | | | [removed: 5,224] [added: 5,265] | | | | [removed: 5,001] [added: 5,224] | | | | [removed: 5,041] [added: 5,001] | |

| Inpatient admissions | | | [removed: 245,234] [added: 246,160] | | | | [removed: 250,278] [added: 245,234] | | | | [removed: 255,522] [added: 250,278] | | | | [removed: 256,821] [added: 255,522] | | | | [removed: 254,859] [added: 256,821] | |

| Average length of patient stay | | | 4.5 | | | | 4.5 | | | | [removed: 4.4] [added: 4.5] | | | | 4.4 | | | | [removed: 4.5] [added: 4.4] | |

| Patient days | | | [removed: 1,095,790] [added: 1,112,541] | | | | [removed: 1,114,807] [added: 1,095,790] | | | | [removed: 1,116,643] [added: 1,114,807] | | | | [removed: 1,130,531] [added: 1,116,643] | | | | [removed: 1,147,105] [added: 1,130,531] | |

| Occupancy rate for licensed beds | | | 54 | % | | | [removed: 55] [added: 54] | % | | | 55 | % | | | [removed: 58] [added: 55] | % | | | [removed: 59] [added: 58] | % |

| Occupancy rate for available beds | | | 56 | % | | | [removed: 58] [added: 56] | % | | | [removed: 59] [added: 58] | % | | | [removed: 62] [added: 59] | % | | | 62 | % |

| Average licensed beds | | | [removed: 19,258] [added: 19,940] | | | | [removed: 19,178] [added: 19,258] | | | | [removed: 9,415] [added: 19,178] | | | | [removed: 7,921] [added: 9,415] | | | | [removed: 7,658] [added: 7,921] | |

| Average available beds | | | [removed: 19,178] [added: 19,841] | | | | [removed: 19,160] [added: 19,178] | | | | [removed: 9,397] [added: 19,160] | | | | [removed: 7,901] [added: 9,397] | | | | [removed: 7,629] [added: 7,901] | |

| Inpatient admissions | | | [removed: 373,437] [added: 401,565] | | | | [removed: 351,086] [added: 373,437] | | | | [removed: 166,310] [added: 351,086] | | | | [removed: 136,639] [added: 166,310] | | | | [removed: 129,553] [added: 136,639] | |

| Average length of patient stay | | | [removed: 14.0] [added: 13.3] | | | | [removed: 14.6] [added: 14.0] | | | | [removed: 15.1] [added: 14.6] | | | | [removed: 15.4] [added: 15.1] | | | | [removed: 16.1] [added: 15.4] | |

| Patient days | | | [removed: 5,212,800] [added: 5,354,334] | | | | [removed: 5,130,245] [added: 5,212,800] | | | | [removed: 2,503,770] [added: 5,130,245] | | | | [removed: 2,105,625] [added: 2,503,770] | | | | [removed: 2,085,114] [added: 2,105,625] | |

| Occupancy rate for licensed beds | | | 74 | % | | | [removed: 73] [added: 74] | % | | | 73 | % | | | 73 | % | | | [removed: 74] [added: 73] | % |

| Occupancy rate for available beds | | | 74 | % | | | [removed: 73] [added: 74] | % | | | 73 | % | | | 73 | % | | | [removed: 75] [added: 73] | % |

| Income from continuing operations attributable to UHS—basic | | $ | [removed: 4.57] [added: 5.21] | | | $ | [removed: 4.09] [added: 4.57] | | | $ | [removed: 2.37] [added: 4.09] | | | $ | [removed: 2.65] [added: 2.37] | | | $ | [removed: 1.90] [added: 2.65] | |

| Income from continuing operations attributable to UHS—diluted | | $ | [removed: 4.53] [added: 5.14] | | | $ | [removed: 4.04] [added: 4.53] | | | $ | [removed: 2.34] [added: 4.04] | | | $ | [removed: 2.64] [added: 2.34] | | | $ | [removed: 1.90] [added: 2.64] | |

| Net income attributable to UHS—basic | | $ | [removed: 4.57] [added: 5.21] | | | $ | [removed: 4.09] [added: 4.57] | | | $ | [removed: 2.37] [added: 4.09] | | | $ | [removed: 2.65] [added: 2.37] | | | $ | [removed: 1.96] [added: 2.65] | |

| Net income attributable to UHS—diluted | | $ | [removed: 4.53] [added: 5.14] | | | $ | [removed: 4.04] [added: 4.53] | | | $ | [removed: 2.34] [added: 4.04] | | | $ | [removed: 2.64] [added: 2.34] | | | $ | [removed: 1.96] [added: 2.64] | |

| Dividends declared | | $ | [removed: 0.60] [added: 0.20] | | | $ | [removed: 0.20] [added: 0.60] | | | $ | 0.20 | | | $ | [removed: 0.17] [added: 0.20] | | | $ | [removed: 0.16] [added: 0.17] | |

| Weighted average number of shares outstanding—basic | | | [removed: 96,821] [added: 98,033] | | | | [removed: 97,199] [added: 96,821] | | | | [removed: 96,786] [added: 97,199] | | | | [removed: 97,794] [added: 96,786] | | | | [removed: 101,222] [added: 97,794] | |

| Weighted average number of shares and share equivalents outstanding—diluted | | | [removed: 97,711] [added: 99,361] | | | | [removed: 98,537] [added: 97,711] | | | | [removed: 97,973] [added: 98,537] | | | | [removed: 98,275] [added: 97,973] | | | | [removed: 101,418] [added: 98,275] | |

##### [Table of Contents](#toc)

##### [Table of Contents](#toc)

As of December 31, [removed: 2012,] [added: 2013,] 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.

There have been no changes in our internal control over financial reporting or in other factors during the fourth quarter of [removed: 2012] [added: 2013] that have materially affected, or are reasonably likely to materially affect, our internal control over 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 [removed: Framework,_] [added: Framework (1992),_] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on its assessment, management has concluded that we maintained effective internal control over financial reporting as of December 31, [removed: 2012,] [added: 2013,] based on criteria in _Internal Control—Integrated [removed: Framework,_] [added: Framework (1992),_] issued by the COSO.

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2012] [added: 2013] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm as stated in its report which appears herein.

In October, 2012, we completed the acquisition of Ascend Health Corporation.

We are in the process of transferring all accounting for the new acquisition to our headquarters and into our existing internal control procedures.

The integration may lead to changes in these controls in future periods but we do not expect these changes to materially affect our internal control over financial reporting.

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, [removed: 2012.][added: 2013.]

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, [removed: 2012.][added: 2013.]

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, [removed: 2012.][added: 2013.]

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, [removed: 2012.][added: 2013.]

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, [removed: 2012.][added: 2013.]

10.1* Employment Agreement, dated as of [removed: December 27, 2007,] [added: July 24, 2013,] by and between Universal Health Services, Inc. and Alan B.

Miller, previously filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated [removed: December 27, 2007,] [added: July 26, 2013,] is incorporated herein by reference.

10.3 Agreement, dated December 6, [removed: 2012,] [added: 2013,] to renew Advisory Agreement, dated as of December 24, 1986, between Universal Health Realty Income Trust and UHS of Delaware, Inc.

10.8 Agreement of Limited Partnership of District Hospital Partners, L.P. (a District of Columbia limited partnership) by and among UHS of D.C., Inc. and The George Washington University, previously filed as [added: Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarters ended March 30, 1997, and June 30, 1997, is incorporated herein by reference.]

[removed: 10.23] [added: 10.24] Assignment and Assumption Agreement, dated as of October 27, 2010, previously filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated November 2, 2010, is incorporated herein by reference.

[removed: 10.24] [added: 10.25] 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 Registrant’s Current Report on Form 8-K dated November 17, 2010, is incorporated herein by reference.

[removed: 10.25] [added: 10.26] 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 Registrant’s Current Report on Form 8-K dated March 15, 2011, is incorporated herein by reference.

[removed: 10.26] [added: 10.27] 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 Tokoyo-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 Registrant’s Current Report on Form 8-K dated September 26, 2012, is incorporated herein by reference.

[removed: 10.27] [added: 10.28] 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 Registrant’s Current Report on Form 8-K dated September 26, 2012, is incorporated herein by reference.

[removed: 10.28*] [added: 10.30*] Form of Supplemental Life Insurance Plan and Agreement Part A: Alan B.

[removed: 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 Registrant’s Current Report on Form 8-K dated December 10, 2010, is incorporated herein by reference.

[removed: 10.29*] [added: 10.31*] Form of Supplemental Life Insurance Plan and Agreement Part B: Alan B.

[removed: 10.30*] [added: 10.32*] 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.

[removed: 10.31*] [added: 10.33*] 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.

[removed: 101.INS] [added: 101.INS] XBRL Instance Document

[removed: 101.SCH] [added: 101.SCH] XBRL Taxonomy Extension Schema Document

[removed: 101.CAL] [added: 101.CAL] XBRL Taxonomy Extension Calculation Linkbase Document

[removed: 101.DEF] [added: 101.DEF] XBRL Taxonomy Extension Definition Linkbase Document

[removed: 101.LAB] [added: 101.LAB] XBRL Taxonomy Extension Label Linkbase Document

[removed: 101.PRE] [added: 101.PRE] XBRL Taxonomy Extension Presentation Linkbase Document

| /S/ ALAN B. MILLER Alan B. Miller | | Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | | February [removed: 28, 2013] [added: 27, 2014] |

| /S/ MARC D. MILLER Marc D. Miller | | Director and President | | February [removed: 28, 2013] [added: 27, 2014] |

| /S/ JOHN H. HERRELL John H. Herrell | | Director | | February [removed: 28, 2013] [added: 27, 2014] |

| /S/ ROBERT H. HOTZ Robert H. Hotz | | Director | | February [removed: 28, 2013] [added: 27, 2014] |

| /S/ ANTHONY PANTALEONI Anthony Pantaleoni | | Director | | February [removed: 28, 2013] [added: 27, 2014] |

| /S/ LAWRENCE S. GIBBS Lawrence S. Gibbs | | Director | | February [removed: 28, 2013] [added: 27, 2014] |

| /S/ STEVE FILTON Steve Filton | | Senior Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) | | February [removed: 28, 2013] [added: 27, 2014] |

| [removed: Consolidated] [added: [Consolidated] Financial [removed: Statements:] [added: Statements:](#toc649956_26)] | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#toc444706_50)] [added: Firm](#toc649956_27)] | | | 99 | |

| [Consolidated Statements of Income for the three years ended December 31, [removed: 2012](#toc444706_51)] [added: 2013](#toc649956_28)] | | | 100 | |

| [Consolidated Statements of Comprehensive Income for the three years ended December 31, [removed: 2012](#toc444706_52)] [added: 2013](#toc649956_29)] | | | 101 | |