Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarterly period ended September 30, 2025

OR

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

For the transition period from to

Commission file number 1-10765

UNIVERSAL HEALTH SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware		23-2077891
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

UNIVERSAL CORPORATE CENTER

367 SOUTH GULPH ROAD

KING OF PRUSSIA**,** Pennsylvania 19406

(Address of principal executive offices) (Zip Code)

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class B Common Stock, $0.01 par value	UHS	New York Stock Exchange

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

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

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

Large accelerated filer		☒	Accelerated filer		☐
Non-accelerated filer		☐	Smaller reporting company		☐
				Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common shares outstanding, as of October 31, 2025:

Class A		6,574,600
Class B		55,233,701
Class C		661,688
Class D		12,497

UNIVERSAL HEALTH SERVICES, INC.

INDEX

		PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Statements of Income – Three and Nine Months Ended September 30, 2025 and 2024		3
Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2025 and 2024		4
Condensed Consolidated Balance Sheets – September 30, 2025 and December 31, 2024		5
Condensed Consolidated Statements of Changes in Equity – Three and Nine Months Ended September 30, 2025 and 2024		6
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2025 and 2024		8
Notes to Condensed Consolidated Financial Statements		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3. Quantitative and Qualitative Disclosures About Market Risk		67
Item 4. Controls and Procedures		67
PART II. Other Information
Item 1. Legal Proceedings		68
Item 1A. Risk Factors		68
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		70
Item 5. Other Information		70
Item 6. Exhibits		71
Signatures		72

This Quarterly Report on Form 10-Q is for the quarter ended September 30, 2025. This Report modifies and supersedes documents filed prior to this Report. Information that we file with the Securities and Exchange Commission (the “SEC”) in the future will automatically update and supersede information contained in this Report.

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

PART I. FINANCI****AL INFORMATION

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share amounts)

(unaudited)

	Three months ended September 30,								Nine months ended September 30,
	2025				2024				2025				2024
Net revenues	$	4,495,245			$	3,963,027			$	12,878,781			$	11,714,213
Operating charges:
Salaries, wages and benefits		2,071,898				1,912,308				6,037,953				5,611,304
Other operating expenses		1,294,721				1,090,197				3,563,039				3,165,483
Supplies expense		414,583				390,250				1,236,249				1,181,886
Depreciation and amortization		155,060				149,567				455,409				438,050
Lease and rental expense		37,295				36,540				109,348				108,165
		3,973,557				3,578,862				11,401,998				10,504,888
Income from operations		521,688				384,165				1,476,783				1,209,325
Interest expense, net		38,431				44,660				113,851				146,385
Other (income) expense, net		(13,629	)			(2,028	)			(27,767	)			3,315
Income before income taxes		496,886				341,533				1,390,699				1,059,625
Provision for income taxes		117,781				75,623				327,354				233,563
Net income		379,105				265,910				1,063,345				826,062
Less: Net income (loss) attributable to noncontrolling interests		6,148				7,196				20,490				16,362
Net income attributable to UHS	$	372,957			$	258,714			$	1,042,855			$	809,700
Basic earnings per share attributable to UHS	$	5.92			$	3.89			$	16.27			$	12.11
Diluted earnings per share attributable to UHS	$	5.86			$	3.80			$	16.07			$	11.88
Weighted average number of common shares - basic		62,974				66,537				64,100				66,873
Add: Other share equivalents		689				1,571				797				1,297
Weighted average number of common shares and equivalents - diluted		63,663				68,108				64,897				68,170

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

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEM****ENTS OF COMPREHENSIVE INCOME

(amounts in thousands, unaudited)

		Three months ended September 30,								Nine months ended September 30,
		2025				2024				2025				2024
Net income		$	379,105			$	265,910			$	1,063,345			$	826,062
Other comprehensive income (loss):
Foreign currency translation adjustment			(9,020	)			29,221				41,128				29,155
Other			-				-				-				17
Other comprehensive income (loss) before tax			(9,020	)			29,221				41,128				29,172
Income tax expense (benefit) related to items of other comprehensive income (loss)			446				(140	)			46				288
Total other comprehensive (loss) income, net of tax			(9,466	)			29,361				41,082				28,884
Comprehensive income			369,639				295,271				1,104,427				854,946
Less: Comprehensive income (loss) attributable to noncontrolling interests			6,148				7,196				20,490				16,362
Comprehensive income attributable to UHS		$	363,491			$	288,075			$	1,083,937			$	838,584

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

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDA****TED BALANCE SHEETS

(amounts in thousands, unaudited)

	September 30, 2025				December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	112,895			$	125,983
Accounts receivable, net		2,585,335				2,177,751
Supplies		226,655				220,940
Other current assets		333,077				291,614
Total current assets		3,257,962				2,816,288
Property and equipment		13,449,399				12,643,283
Less: accumulated depreciation		(6,476,366	)			(6,071,058	)
		6,973,033				6,572,225
Other assets:
Goodwill		3,989,370				3,932,879
Deferred income taxes		145,319				118,449
Right of use assets-operating leases		382,430				418,719
Deferred charges		9,363				9,404
Other		586,447				601,785
Total Assets	$	15,343,924			$	14,469,749
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	740,186			$	40,059
Accounts payable and other liabilities		2,332,418				2,081,479
Operating lease liabilities		73,334				74,649
Federal and state taxes		13,252				14,219
Total current liabilities		3,159,190				2,210,406
Other noncurrent liabilities		589,854				655,806
Operating lease liabilities noncurrent		346,467				376,239
Long-term debt		3,950,934				4,464,482
Redeemable noncontrolling interests		66,982				13,293
Equity:
UHS common stockholders’ equity		7,169,693				6,666,207
Noncontrolling interest		60,804				83,316
Total equity		7,230,497				6,749,523
Total Liabilities and Stockholders’ Equity	$	15,343,924			$	14,469,749

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

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Three and Nine Months ended September 30, 2025

(amounts in thousands, unaudited)

																														Accumulated				UHS
		Redeemable																												Other				Common
		Noncontrolling				Class A				Class B				Class C				Class D				Cumulative				Retained				Comprehensive				Stockholders'				Noncontrolling
		Interest				Common				Common				Common				Common				Dividends				Earnings				Income (Loss)				Equity				Interest				Total
Balance, July 1, 2025		$	59,569			$	66			$	564			$	7			$	0			$	(740,083	)		$	7,711,745			$	57,749			$	7,030,048			$	55,465			$	7,085,513
Common Stock
Issued/(converted)			—				—				1				—				—				—				3,982				—				3,983				—				3,983
Repurchased, including excise tax			—				—				(14	)			—				—				—				(239,659	)			—				(239,673	)			—				(239,673	)
Restricted share-based compensation expense			—				—				—				—				—				—				16,410				—				16,410				—				16,410
Dividends paid and accrued			—				—				—				—				—				(12,689	)			—				—				(12,689	)			—				(12,689	)
Stock option expense			—				—				—				—				—				—				8,123				—				8,123				—				8,123
Reclass of noncontrolling interests to redeemable noncontrolling interests			—				—				—				—				—				—				—				—				—				—				—
Change in redemption amount of redeemable noncontrolling interest			—				—				—				—				—				—				—				—				—				—				—
Distributions to noncontrolling interests			—				—				—				—				—				—				—				—				—				(789	)			(789	)
Purchase (sale) of ownership interests by (from) minority members			4,403				—				—				—				—				—				—				—				—				2,989				2,989
Comprehensive income:
Net income (loss) to UHS / noncontrolling interests			3,010				—				—				—				—				—				372,957				—				372,957				3,139				376,096
Foreign currency translation adjustments, net of income tax			—				—				—				—				—				—				—				(9,466	)			(9,466	)			—				(9,466	)
Subtotal - comprehensive income			3,010				—				—				—				—				—				372,957				(9,466	)			363,491				3,139				366,630
Balance, September 30, 2025		$	66,982			$	66			$	551			$	7			$	0			$	(752,772	)		$	7,873,558			$	48,283			$	7,169,693			$	60,804			$	7,230,497
																														Accumulated				UHS
		Redeemable																												Other				Common
		Noncontrolling				Class A				Class B				Class C				Class D				Cumulative				Retained				Comprehensive				Stockholders'				Noncontrolling
		Interest				Common				Common				Common				Common				Dividends				Earnings				Income (Loss)				Equity				Interest				Total
Balance, January 1, 2025		$	13,293			$	66			$	577			$	7			$	0			$	(713,705	)		$	7,372,061			$	7,201			$	6,666,207			$	83,316			$	6,749,523
Common Stock
Issued/(converted)			—				—				9				—				—				—				12,289				—				12,298				—				12,298
Repurchased, including excise tax			—				—				(35	)			—				—				—				(620,728	)			—				(620,763	)			—				(620,763	)
Restricted share-based compensation expense			—				—				—				—				—				—				43,722				—				43,722				—				43,722
Dividends paid and accrued			—				—				—				—				—				(39,067	)			—				—				(39,067	)			—				(39,067	)
Stock option expense			—				—				—				—				—				—				25,671				—				25,671				—				25,671
Reclass of noncontrolling interests to redeemable noncontrolling interests			38,523				—				—				—				—				—				—				—				—				(38,523	)			(38,523	)
Change in redemption amount of redeemable noncontrolling interest			2,312				—				—				—				—				—				(2,312	)			—				(2,312	)			—				(2,312	)
Distributions to noncontrolling interests			(2,395	)			—				—				—				—				—				—				—				—				(8,016	)			(8,016	)
Purchase (sale) of ownership interests by (from) minority members			8,635				—				—				—				—				—				—				—				—				10,150				10,150
Comprehensive income:
Net income (loss) to UHS / noncontrolling interests			6,614				—				—				—				—				—				1,042,855				—				1,042,855				13,877				1,056,732
Foreign currency translation adjustments, net of income tax			—				—				—				—				—				—				—				41,082				41,082				—				41,082
Subtotal - comprehensive income			6,614				—				—				—				—				—				1,042,855				41,082				1,083,937				13,877				1,097,814
Balance, September 30, 2025		$	66,982			$	66			$	551			$	7			$	0			$	(752,772	)		$	7,873,558			$	48,283			$	7,169,693			$	60,804			$	7,230,497

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

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Three and Nine Months ended September 30, 2024

(amounts in thousands, unaudited)

																														Accumulated				UHS
		Redeemable																												Other				Common
		Noncontrolling				Class A				Class B				Class C				Class D				Cumulative				Retained				Comprehensive				Stockholders'				Noncontrolling
		Interest				Common				Common				Common				Common				Dividends				Earnings				Income (Loss)				Equity				Interest				Total
Balance, July 1, 2024		$	5,418			$	66			$	594			$	7			$	0			$	(687,015	)		$	7,162,908			$	8,812			$	6,485,372			$	65,433			$	6,550,805
Common Stock
Issued/(converted)			—				—				3				—				—				—				3,634				—				3,637				—				3,637
Repurchased, including excise tax			—				—				(8	)			—				—				—				(184,131	)			—				(184,139	)			—				(184,139	)
Restricted share-based compensation expense			—				—				—				—				—				—				12,867				—				12,867				—				12,867
Dividends paid and accrued			—				—				—				—				—				(13,472	)			—				—				(13,472	)			—				(13,472	)
Stock option expense			—				—				—				—				—				—				13,356				—				13,356				—				13,356
Distributions to noncontrolling interests			—				—				—				—				—				—				—				—				—				(702	)			(702	)
Purchase (sale) of ownership interests by (from) minority members			—				—				—				—				—				—				—				—				—				3,668				3,668
Comprehensive income:
Net income (loss) to UHS / noncontrolling interests			205				—				—				—				—				—				258,714				—				258,714				6,991				265,705
Other			—				—				—				—				—				—				—				—				—				—				—
Foreign currency translation adjustments, net of income tax			—				—				—				—				—				—				—				29,361				29,361				—				29,361
Subtotal - comprehensive income			205				—				—				—				—				—				258,714				29,361				288,075				6,991				295,066
Balance, September 30, 2024		$	5,623			$	66			$	589			$	7			$	0			$	(700,487	)		$	7,267,348			$	38,173			$	6,605,696			$	75,390			$	6,681,086
																														Accumulated				UHS
		Redeemable																												Other				Common
		Noncontrolling				Class A				Class B				Class C				Class D				Cumulative				Retained				Comprehensive				Stockholders'				Noncontrolling
		Interest				Common				Common				Common				Common				Dividends				Earnings				Income (Loss)				Equity				Interest				Total
Balance, January 1, 2024		$	5,191			$	66			$	599			$	7			$	0			$	(659,890	)		$	6,798,930			$	9,289			$	6,149,001			$	47,714			$	6,196,715
Common Stock
Issued/(converted)			—				—				11				—				—				—				11,020				—				11,031				—				11,031
Repurchased, including excise tax			—				—				(21	)			—				—				—				(424,056	)			—				(424,077	)			—				(424,077	)
Restricted share-based compensation expense			—				—				—				—				—				—				30,746				—				30,746				—				30,746
Dividends paid and accrued			—				—				—				—				—				(40,597	)							—				(40,597	)			—				(40,597	)
Stock option expense			—				—				—				—				—				—				41,025				—				41,025				—				41,025
Distributions to noncontrolling interests			(649	)			—				—				—				—				—				—				—				—				(5,142	)			(5,142	)
Purchase (sale) of ownership interests by (from) minority members			—				—				—				—				—				—				—				—				—				17,537				17,537
Comprehensive income:																															—
Net income (loss) to UHS / noncontrolling interests			1,081				—				—				—				—				—				809,700				—				809,700				15,281				824,981
Other							—				—				—				—				—				(17	)			17				—				—				—
Foreign currency translation adjustments, net of income tax			—				—				—				—				—				—				—				28,867				28,867				—				28,867
Subtotal - comprehensive income			1,081				—				—				—				—				—				809,683				28,884				838,567				15,281				853,848
Balance, September 30, 2024		$	5,623			$	66			$	589			$	7			$	0			$	(700,487	)		$	7,267,348			$	38,173			$	6,605,696			$	75,390			$	6,681,086

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

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED S****TATEMENTS OF CASH FLOWS

(amounts in thousands, unaudited)

		Nine months ended September 30,
		2025				2024
Cash Flows from Operating Activities:
Net income		$	1,063,345			$	826,062
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation & amortization			455,409				438,050
Loss (gain) on sales of assets and businesses			2,833				(5,124	)
Costs related to extinguishment of debt			-				3,158
Stock-based compensation expense			70,586				72,727
Changes in assets & liabilities, net of effects from acquisitions and dispositions:
Accounts receivable			(294,210	)			11,703
Accrued interest			7,052				(1,762	)
Accrued and deferred income taxes			(39,287	)			(10,949	)
Other working capital accounts			20,415				1,329
Other assets and deferred charges			(29,629	)			(5,621	)
Other, net			19,114				25,732
Accrued insurance expense, net of commercial premiums paid			177,054				175,104
Payments made in settlement of self-insurance claims, net of commercial insurance reimbursements			(162,978	)			(121,745	)
Net cash provided by operating activities			1,289,704				1,408,664
Cash Flows from Investing Activities:
Property and equipment additions			(733,932	)			(697,865	)
Proceeds received from sales of assets and businesses			2,980				30,219
Acquisition of businesses and property			(47,772	)			0
Outflows from foreign exchange contracts that hedge our net U.K. investment			(49,351	)			(35,667	)
Costs incurred for purchase and development of enterprise resource planning application			(18,676	)			0
Decrease in capital reserves of commercial insurance subsidiary			100				197
Net cash used in investing activities			(846,651	)			(703,116	)
Cash Flows from Financing Activities:
Repayments of long-term debt			(27,791	)			(2,471,515	)
Additional borrowings			208,986				2,210,248
Financing costs			(382	)			(9,992	)
Repurchase of common shares			(615,941	)			(420,588	)
Dividends paid			(38,902	)			(40,302	)
Issuance of common stock			12,119				10,864
Profit distributions to noncontrolling interests			(10,409	)			(5,791	)
Purchase (sale) of ownership interests by (from) minority member			18,728				8,959
Net cash used in financing activities			(453,592	)			(718,117	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			2,390				2,696
Decrease in cash, cash equivalents and restricted cash			(8,149	)			(9,873	)
Cash, cash equivalents and restricted cash, beginning of period			224,752				214,470
Cash, cash equivalents and restricted cash, end of period		$	216,603			$	204,597
Supplemental Disclosures of Cash Flow Information:
Interest paid		$	103,050			$	144,378
Income taxes paid, net of refunds		$	355,968			$	236,975
Noncash purchases of property and equipment		$	146,650			$	87,333

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

UNIVERSAL HEALTH SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLID****ATED FINANCIAL STATEMENTS

(1) General

This Quarterly Report on Form 10-Q is for the quarterly period ended September 30, 2025. In this Quarterly Report, “we,” “us,” “our” “UHS” and the “Company” refer to Universal Health Services, Inc. and its subsidiaries.

The condensed consolidated interim financial statements include the accounts of our majority-owned subsidiaries and partnerships and limited liability companies controlled by us, or our subsidiaries, as managing general partner or managing member. The condensed consolidated interim financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect all adjustments (consisting only of normal recurring adjustments) which, in our opinion, are necessary to fairly state results for the interim periods. Certain information and footnote disclosures normally included in audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although we believe that the accompanying disclosures are adequate to make the information presented not misleading. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements, significant accounting policies and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 26, 2025.

(2) Relationship with Universal Health Realty Income Trust and Other Related Party Transactions

Relationship with Universal Health Realty Income Trust:

At September 30, 2025, we held approximately 5.7% of the outstanding shares of Universal Health Realty Income Trust (the “Trust”). We serve as Advisor to the Trust under an annually renewable advisory agreement, which is scheduled to expire on December 31st of each year, pursuant to the terms of which we conduct the Trust’s day-to-day affairs, provide administrative services and present investment opportunities. The advisory agreement was renewed by the Trust for 2025 at the same rate in place for 2024, 2023 and 2022, providing for an advisory computation at 0.70% of the Trust’s average invested real estate assets. We earned an advisory fee from the Trust, which is included in net revenues in the accompanying condensed consolidated statements of income, of approximately $1.4 million during each of the three-month periods ended September, 2025 and 2024, and approximately $4.2 million and $4.1 million during the nine-month periods ended September 30, 2025 and 2024, respectively.

In addition, certain of our officers and directors are also officers and/or directors of the Trust. Management believes that it has the ability to exercise significant influence over the Trust, therefore we account for our investment in the Trust using the equity method of accounting.

Our pre-tax share of income from the Trust was approximately $260,000 and $300,000 during the three-month periods ended September 30, 2025 and 2024, respectively, and approximately $828,000 and $914,000 during the nine-month periods ended September 30, 2025 and 2024, respectively, and is included in other income (expense), net, on the accompanying condensed consolidated statements of income for each period. We received dividends from the Trust amounting to $583,000 and $575,000 during the three-month periods ended September 30, 2025 and 2024, respectively, and $1.7 million during each of the nine-month periods ended September 30, 2025 and 2024, respectively. The carrying value of our investment in the Trust was $4.8 million and $5.8 million at September 30, 2025 and December 31, 2024, respectively, and is included in other assets in the accompanying condensed consolidated balance sheets. The market value of our investment in the Trust was $30.8 million at September 30, 2025 and $29.3 million at December 31, 2024, based on the closing price of the Trust’s stock on the respective dates.

The Trust commenced operations in 1986 by purchasing certain hospital properties from us and immediately leasing the properties back to our respective subsidiaries. The base rents are paid monthly and the bonus rents, which effective as of January 1, 2022 are applicable only to McAllen Medical Center, are computed and paid on a quarterly basis, based upon a computation that compares current quarter revenue to a corresponding quarter in the base year. The leases with those subsidiaries are unconditionally guaranteed by us and are cross-defaulted with one another.

The aggregate rent payable to the Trust in connection with the leases on McAllen Medical Center, Wellington Regional Medical Center, Aiken Regional Medical Center and Canyon Creek Behavioral Health was approximately $5 million during each of the three-month periods ended September 30, 2025 and 2024 and approximately $16 million during each of the nine-month periods ended September 30, 2025 and 2024.

In connection with an asset purchase and sale agreement, and related lease agreements, completed with the Trust in 2021, related to Aiken Regional Medical Center ("Aiken") and Canyon Creek Behavioral Health ("Canyon Creek"), our consolidated balance sheets at September 30, 2025 and December 31, 2024 reflect financial liabilities, which are included in debt, of approximately $71 million and $74 million, respectively. In connection with that transaction, as a result of our purchase option within the lease agreements related to Aiken and Canyon Creek, the asset purchase and sale transaction was accounted for as a failed sale leaseback in accordance with U.S.

GAAP and we have accounted for the transaction as a financing arrangement. Our lease payments payable to the Trust in connection with Aiken and Canyon Creek are recorded to interest expense and as a reduction of the outstanding financial liability. Since we did not derecognize the real property related to Aiken and Canyon Creek as a result of the asset purchase and sale agreement, we will continue to depreciate the assets.

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

In addition, we are the managing, majority member in a joint venture with an unrelated third-party that operates Clive Behavioral Health, a 100-bed behavioral health care facility located in Clive, Iowa. The real property of this facility, which was completed and opened in late 2020, is also leased from the Trust (annual rental of approximately $2.9 million, $2.8 million and $2.7 million during 2025, 2024 and 2023, respectively) pursuant to the lease terms as provided in the table below. In connection with the lease on this facility, the joint venture has the right to purchase the leased facility from the Trust at its appraised fair market value upon either of the following: (i) by providing notice at least 270 days prior to the end of the lease terms or any renewal terms, or; (ii) upon 30 days' notice anytime within 12 months of a change of control of the Trust (UHS also has this right should the joint venture decline to exercise its purchase right). Additionally, the joint venture has rights of first offer to purchase the facility prior to any third-party sale.

The table below provides certain details for each of the hospitals leased from the Trust as of September 30, 2025:

Hospital Name		Annual Minimum Rent				End of Lease Term		Renewal Term (years)
McAllen Medical Center		$	5,485,000			December, 2026			5		(a)
Wellington Regional Medical Center		$	6,805,000			December, 2026			5		(b)
Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services		$	4,164,000			December, 2033			35		(c)
Canyon Creek Behavioral Health		$	1,882,000			December, 2033			35		(c)
Clive Behavioral Health Hospital		$	2,851,000			December, 2040			50		(d)

(a)

We have one 5-year renewal option at existing lease rates (through 2031).

(b)

We have one 5-year renewal option at fair market value lease rates (through 2031). On each January 1st through 2026, the annual rent will increase by 2.5% on a cumulative and compounded basis.

(c)

We have seven 5-year renewal options at fair market value lease rates (2034 through 2068). On each January 1st through 2033, the annual rent will increase by 2.25% on a cumulative and compounded basis.

(d)

This facility is operated by a joint venture in which we are the managing, majority member and an unrelated third-party holds a minority ownership interest. The joint venture has three, 10-year renewal options at computed lease rates as stipulated in the lease (2041 through 2070) and two additional, 10-year renewal options at fair market value lease rates (2071 through 2090). In each January through 2040 (and potentially through 2070 if three, 10-year renewal options are exercised), the annual rental will increase by 2.75% on a cumulative and compounded basis.

In addition, certain of our subsidiaries are tenants in several medical office buildings (“MOBs”) and two free-standing emergency departments ("FED") owned by the Trust or by limited liability companies in which the Trust holds 95% to 100% of the ownership interest. In connection with these two FEDs, in October, 2024, our subsidiaries exercised their 5-year renewal options on the facilities which are located in Weslaco and Mission, Texas. The renewal option covers the period of February 1, 2025 through January 31, 2030 (the current lease terms were scheduled to expire on January 31, 2025; with aggregate annual lease rates of approximately $1.07 million). Pursuant to terms of the leases, and consistent with the terms of the leases currently in effect for each property, the lease rates are scheduled to increase 2% per year through the end of the renewed lease terms. Our subsidiaries have four, 5-year renewal options remaining on each of these FEDs, with the first three renewal options (covering the years 2030 through 2044) providing for 2% annual increases to the lease rates, and the remaining two, 5-year renewal options (covering the years 2045 through 2054) providing for lease

rates at the then fair market value. These leases are cross-defaulted with one another and our subsidiaries have the option to purchase the leased properties upon the expiration of each five-year extended term at the fair market value at that time.

In October, 2025, a ground lease and a master flex lease were executed between a wholly-owned subsidiary of ours and the Trust. The Trust intends to develop, construct and own the real property of Palm Beach Garden Medical Plaza I, a MOB located in Palm Beach Gardens, Florida. This multi-tenant MOB, consisting of 80,000 rentable square feet, is scheduled to be completed during the third quarter of 2026. The MOB will be located on the campus of the Alan B. Miller Medical Center, a newly constructed acute care hospital owned and operated by a wholly-owned subsidiary of ours, which is scheduled to be completed and opened during the second quarter of 2026. The 10-year master flex lease agreement, which is subject to reduction based on the execution of third-party leases with the Trust, was executed for approximately 75% of the rentable square feet of the MOB. The Trust has engaged a wholly-owned subsidiary of UHS to act as project manager, and construction of the MOB is expected to commence in November, 2025.

During the third quarter of 2023, the Trust acquired the McAllen Doctor's Center, a 79,500 rentable square feet medical office building located in McAllen, Texas. A master lease was executed between a wholly-owned subsidiary of ours and the Trust, pursuant to the terms of which our subsidiary will master lease 100% of the rentable square feet of the MOB at an initial minimum rent of $624,000 annually. The master lease commenced during August, 2023 and is scheduled to expire in twelve years from that date.

During the first quarter of 2023, the Trust substantially completed construction on a new 86,000 rentable square foot multi-tenant MOB that is located on the campus of Northern Nevada Sierra Medical Center in Reno, Nevada. Northern Nevada Sierra Medical Center, a 170-bed newly constructed acute care hospital owned and operated by a wholly-owned subsidiary of ours, was completed and opened in April, 2022. In connection with this MOB, a ten-year master flex lease was executed between a wholly-owned subsidiary of ours and the Trust (scheduled to expire in March, 2033), pursuant to the terms of which our subsidiary initially agreed to master lease up to approximately 68% of the rentable square feet of the MOB. The master flex lease has been reduced since inception as certain conditions have been met. A ground lease for this facility commenced during 2023 and is scheduled to expire in 2098.

Other Related Party Transactions:

In December, 2010, our Board of Directors approved the Company’s entering into supplemental life insurance plans and agreements on the lives of Alan B. Miller (our Executive Chairman of the Board) and his wife. As a result of these agreements, as amended in October, 2016, based on actuarial tables and other assumptions, during the life expectancies of the insureds, we would pay approximately $28 million in premiums, and certain trusts owned by our Executive Chairman of the Board, would pay approximately $9 million in premiums. Based on the projected premiums mentioned above, and assuming the policies remain in effect until the death of the insureds, we will be entitled to receive death benefit proceeds of no less than approximately $37 million representing the $28 million of aggregate premiums paid by us as well as the $9 million of aggregate premiums paid by the trusts. In connection with these policies, we will pay/we paid approximately $1 million, net, in premium payments during 2025 and 2024.

In August, 2015, Marc D. Miller, our President and Chief Executive Officer and member of our Board of Directors, was appointed to the Board of Directors of Premier, Inc. (“Premier”), a healthcare performance improvement alliance. During 2013, we entered into a new group purchasing organization agreement (“GPO”) with Premier. In conjunction with the GPO agreement, we acquired a minority interest in Premier for a nominal amount. During the fourth quarter of 2013, in connection with the completion of an initial public offering of the stock of Premier, we received cash proceeds for the sale of a portion of our ownership interest in the GPO. Also, in connection with this GPO agreement, we received shares of restricted stock of Premier which vested ratably over a seven-year period (2014 through 2020), contingent upon our continued participation and minority ownership interest in the GPO. During the third quarter of 2020, we entered into an agreement with Premier pursuant to the terms of which, among other things, our ownership interest in Premier was converted into shares of Class A Common Stock of Premier. We have elected to retain a portion of the previously vested shares of Premier, the market value of which is included in other assets on our condensed consolidated balance sheets. Based upon the closing price of Premier’s stock on each respective date, the market value of our shares of Premier was $62 million as of September 30, 2025 and $47 million as of December 31, 2024. Any change in market value of our Premier shares since December 31, 2024 is recorded as an unrealized gain/loss and included in “Other (income) expense, net” in our condensed consolidated statements of income for the three and nine-month periods ended September 30, 2025.

Additionally, we received cash dividends from Premier amounting to approximately $470,000 during both three-month periods ended September 30, 2025 and 2024, respectively, and approximately $1.4 million during both the nine-month periods ended September 30, 2025 and 2024, respectively, which are included in “Other (income) expense, net” in our condensed consolidated statements of income.

A member of our Board of Directors and member of the Executive Committee and Finance Committee is Of Counsel to Norton Rose Fulbright US LLP, a law firm engaged by us for a variety of legal services. The Board member and his law firm also provide personal legal services to our Executive Chairman and he acts as trustee of certain trusts for the benefit of our Executive Chairman and his family.

(3) Other Noncurrent liabilities and Redeemable/Noncontrolling Interests

Other noncurrent liabilities include the long-term portion of our professional and general liability, workers’ compensation reserves, pension and deferred compensation liabilities, and liabilities incurred in connection with split-dollar life insurance agreements on the lives of our chief executive officer and his wife.

As of September 30, 2025, outside owners held noncontrolling, minority ownership interests of: (i) approximately 7% in an acute care facility located in Texas; (ii) 49%, 30%, 20%, 25%, and 48% in five behavioral health care facilities located in Arizona, Ohio, Washington, Missouri, and Iowa, respectively, (iii) 25% and 49% in two behavioral health care facilities located in Michigan and; (iv) approximately 5% in an acute care facility and 49% in a surgery center, located in Nevada. The noncontrolling interest and redeemable noncontrolling interest balances of $61 million and $67 million, respectively, as of September 30, 2025, consist primarily of the third-party ownership interests in these hospitals.

In connection with certain of the behavioral health care facilities mentioned above, the outside owners have “put options” to potentially put their entire ownership interest to us either in the future upon the occurrence of certain triggering events (as specified in the agreements), or at the present time. If exercised, the put option requires us to purchase the minority member’s interest at fair market value. Amounts recorded as redeemable noncontrolling interests on our condensed consolidated balance sheet as of September 30, 2025 reflect the estimated fair market value of the minority ownership interests that contain such put options.

Generally accepted accounting principles require that noncontrolling interests be classified as equity and we have presented noncontrolling interests in total equity. However, since certain of our noncontrolling interests have redemption rights outside of our control, those noncontrolling interests are classified outside of permanent equity. Accordingly, noncontrolling interests with an estimated redemption amount of approximately $39 million as of March 31, 2025 have been reclassified from noncontrolling interest to redeemable noncontrolling interests as of June 30, 2025. We do not believe these revisions are material to the condensed consolidated financial statements as of March 31, 2025 or to any prior years’ consolidated financial statements.

The minority owners of a 20% interest in a behavioral health care facility located in Pennsylvania had previously exercised their put option and we purchased their ownership interest in April, 2025.

(4) Treasury

In September 2024, we entered into a tenth amendment ("Tenth Amendment") to our credit agreement ("Credit Agreement"), dated as of November 15, 2010, as amended and restated at various times from March, 2011 to June, 2022, among UHS, as borrower, the several banks and other financial institutions or entities from time to time parties thereto, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent. The Tenth Amendment provided for: (i) an extension of the maturity date to September 26, 2029; (ii) a new revolving credit facility of up to $1.3 billion (which as of September 30, 2025, had $965 million of aggregate available borrowing capacity, net of $332 million of outstanding borrowings and $3 million of letters of credit), and; (iii) a new replacement tranche A term loan facility ("Tranche A Term Loan") of up to $1.2 billion (which had $1.17 billion of outstanding borrowings as of September 30, 2025).

Pursuant to the terms of the Tenth Amendment, the Tranche A Term Loan provides for installment payments of $7.5 million per quarter commencing on December 31, 2024 through September 30, 2026, and $15.0 million per quarter commencing on December 31, 2026 through June 30, 2029. The unpaid principal balance at June 30, 2029 (scheduled to be $975.0 million) is payable on the September 26, 2029 scheduled maturity date of the Credit Agreement.

Revolving credit and Tranche A Term Loan borrowings under the Credit Agreement bear interest at our election at either (1) the ABR rate which is defined as the rate per annum equal to the greatest of (a) the lender’s prime rate, (b) the greater of the federal funds effective rate and the overnight bank funding rate, plus 0.5% and (c) one month term SOFR rate plus 1.1%, in each case, plus an applicable margin based upon our consolidated leverage ratio at the end of each quarter ranging from 0.25% to 0.625%, or (2) the one, three or six month term SOFR rate plus 0.1% (at our election), plus an applicable margin based upon our consolidated leverage ratio at the end of each quarter ranging from 1.25% to 1.625%. As of September 30, 2025, the applicable margins were 0.25% for ABR-based loans and 1.25% for SOFR-based loans under the revolving credit and term loan A facilities. The revolving credit facility includes a $125 million sub-limit for letters of credit. The Credit Agreement is secured by certain assets of the Company and our material subsidiaries (which generally excludes asset classes such as substantially all of the patient-related accounts receivable of our acute care hospitals, if sold to a receivables facility pursuant to the Credit Agreement, and certain real estate assets and assets held in joint-ventures with third parties) and is guaranteed by our material subsidiaries.

The Credit Agreement includes a material adverse change clause that must be represented at each draw. The Credit Agreement also contains covenants that include a limitation on sales of assets, mergers, change of ownership, liens, indebtedness, transactions with affiliates, dividends and stock repurchases; and requires compliance with financial covenants including maximum leverage. We were in compliance with all required covenants as of September 30, 2025 and December 31, 2024.

As of September 30, 2025, we had combined aggregate principal of $3.0 billion from the following senior secured notes:

$700 million of aggregate principal amount of 1.65% senior secured notes due in September, 2026 ("2026 Notes") which were issued on August 24, 2021. Interest on the 2026 Notes is payable on March 1st and September 1st until the maturity date of September 1, 2026.

$500 million of aggregate principal amount of 4.625% senior secured notes due in October, 2029 ("2029 Notes") which were issued on September 26, 2024. Interest on the 2029 Notes is payable on April 15th and October 15th, commencing April 15, 2025 until the maturity date of October 15, 2029.

$800 million of aggregate principal amount of 2.65% senior secured notes due in October, 2030 ("2030 Notes") which were issued on September 21, 2020. Interest on the 2030 Notes is payable on April 15th and October 15th, until the maturity date of October 15, 2030.

$500 million of aggregate principal amount of 2.65% senior secured notes due in January, 2032 ("2032 Notes") which were issued on August 24, 2021. Interest on the 2032 Notes is payable on January 15th and July 15th until the maturity date of January 15, 2032.

$500 million of aggregate principal amount of 5.050% senior secured notes due in October, 2034 ("2034 Notes") which were issued on September 26, 2024. Interest on the 2034 Notes is payable on April 15th and October 15th, commencing on April 15, 2025 until the maturity date of October 15, 2034.

The 2026, 2029, 2030, 2032 and 2034 Notes (collectively "All the Notes") are guaranteed (the “Guarantees”) on a senior secured basis by all of our existing and future direct and indirect subsidiaries that guarantee our Credit Agreement, other first lien obligations, or any junior lien obligations (the "Subsidiary Guarantors"). All the Notes and the Guarantees are secured by first-priority liens, subject to permitted liens, on certain of the Company’s and the Subsidiary Guarantors’ assets now owned or acquired in the future by the Company or the Subsidiary Guarantors (other than real property, accounts receivable sold pursuant to a Company-related receivables facility (as defined in the Indenture pursuant to which All the Notes were issued (the “Indentures”), and certain other excluded assets). The Company’s obligations with respect to All the Notes, the obligations of the Subsidiary Guarantors under the Guarantees, and the performance of all of the Company’s and the Subsidiary Guarantors’ other obligations under the Indentures, are secured equally and ratably with the Company’s and the Subsidiary Guarantors’ obligations under the Credit Agreement. However, the liens on the collateral securing All the Notes and the Guarantees will be released if: (i) All the Notes have investment grade ratings; (ii) no default has occurred and is continuing, and; (iii) the liens on the collateral securing all first lien obligations (including the Credit Agreement and All the Notes) and any junior lien obligations are released or the collateral under the Credit Agreement, any other first lien obligations and any junior lien obligations is released or no longer required to be pledged. The liens on any collateral securing All the Notes and the Guarantees will also be released if the liens on that collateral securing the Credit Agreement, other first lien obligations and any junior lien obligations are released.

The average outstanding borrowings and the average effective interest rate, which includes amortization of deferred financing costs and original issue discount, under our revolving credit, term loan A and senior notes, were approximately $4.46 billion and 4.1%, respectively, during the third quarter of 2025, and $4.34 billion and 4.8%, respectively, during the third quarter of 2024. The average outstanding borrowings and average effective interest rate on these facilities were approximately $4.36 billion and 4.1%, respectively, during the first nine months of 2025, and $4.50 billion and 5.0%, respectively, during the first nine months of 2024.

In connection with an asset purchase and sale agreement, and related lease agreements, completed with Universal Health Realty Income Trust ("Trust") in December 2021, our consolidated balance sheets at September 30, 2025 and December 31, 2024 reflect financial liabilities, which are included in debt, of approximately $71 million and $74 million, respectively. In connection with that transaction, as a result of our purchase option within the lease agreements related to two of our facilities, the asset purchase and sale transaction was accounted for as a failed sale leaseback in accordance with U.S. GAAP and we have accounted for the transaction as a financing arrangement. Our lease payments payable to the Trust are recorded to interest expense and as a reduction of the outstanding financial liability, and the amount allocated to interest expense is determined based upon our incremental borrowing rate and the outstanding financial liability.

At September 30, 2025, the carrying value and fair value of our debt were approximately $4.7 billion and $4.5 billion, respectively. At December 31, 2024, the carrying value and fair value of our debt were approximately $4.5 billion and $4.2 billion, respectively. The fair value of our debt was computed based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with debt instruments.

The aggregate scheduled maturities of our $4.7 billion total debt outstanding as of September 30, 2025, are as follows: (i) $740 million due during the next 12 months; (ii) $42 million due during months 13 to 24; (iii) $72 million due during months 25 to 36; (iv) $1.40 billion due during months 37 to 48; (v) $510 million due during months 49 to 60, and; (vi) $1.93 billion due in greater than 60 months.

Foreign Currency Forward Exchange Contracts:

We use forward exchange contracts to hedge our net investment in foreign operations against movements in exchange rates. The effective portion of the unrealized gains or losses on these contracts is recorded in foreign currency translation adjustment within

accumulated other comprehensive income and remains there until either the sale or liquidation of the subsidiary. In connection with these forward exchange contracts, we recorded net cash outflows of $49 million and $36 million during the nine-month periods ended September 30, 2025 and 2024, respectively.

Derivatives Hedging Relationships:

The following table presents the effects of our foreign currency forward exchange contracts on our results of operations for the three and nine-month periods ended September 30, 2025 and 2024 (in thousands):

	Gain/(Loss) recognized in AOCI
	Three months ended								Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2025				2024				2025				2024
Net Investment Hedge relationships
Foreign currency forward exchange contracts	$	18,571			$	(43,490	)		$	(48,943	)		$	(35,289	)

No other gains or losses were recognized in income related to derivatives in Subtopic 815-20.

Cash, Cash Equivalents and Restricted Cash:

Cash, cash equivalents, and restricted cash as reported in the condensed consolidated statements of cash flows are presented separately on our condensed consolidated balance sheets as follows (in thousands):

	September 30,				September 30,				December 31,
	2025				2024				2024
Cash and cash equivalents	$	112,895			$	106,077			$	125,983
Restricted cash (a)		103,708				98,520				98,769
Total cash, cash equivalents and restricted cash	$	216,603			$	204,597			$	224,752

(a) Restricted cash is included in other assets on the accompanying condensed consolidated balance sheets and consists of statutorily required capital reserves related to our commercial insurance subsidiary.

The fair value of our restricted cash was computed based upon quotes received from financial institutions. We consider these to be “level 1” in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with financial securities.

(5) Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques used to measure fair value into one of three levels:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These included quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following tables present the assets and liabilities recorded at fair value on a recurring basis:

	Balance at			Balance Sheet	Basis of Fair Value Measurement
(in thousands)	September 30, 2025			Location	Level 1			Level 2			Level 3
Assets:
Money market mutual funds	$	120,968		Other noncurrent assets	$	120,968
Certificates of deposit		2,206		Other noncurrent assets					2,206
Equity securities		62,069		Other noncurrent assets		62,069
Deferred compensation assets		53,883		Other noncurrent assets		53,883
Foreign currency forward exchange contracts		979		Other current assets					979
	$	240,105			$	236,920		$	3,185			-
Liabilities:
Deferred compensation liability		53,883		Other noncurrent liabilities		53,883
	$	53,883			$	53,883		$	-			-
	Balance at			Balance Sheet	Basis of Fair Value Measurement
(in thousands)	December 31, 2024			Location	Level 1			Level 2			Level 3
Assets:
Money market mutual funds	$	115,399		Other noncurrent assets	$	115,399
Certificates of deposit		2,206		Other noncurrent assets					2,206
Equity securities		47,333		Other noncurrent assets		47,333
Deferred compensation assets		49,222		Other noncurrent assets		49,222
Foreign currency forward exchange contracts		572		Other current assets					572
	$	214,732			$	211,954		$	2,778			-
Liabilities:
Deferred compensation liability		49,222		Other noncurrent liabilities		49,222
	$	49,222			$	49,222		$	-			-

The fair value of our money market mutual funds, certificates of deposit and equity securities with a readily determinable fair value are computed based upon quoted market prices in an active market. The fair value of deferred compensation assets and the offsetting liability are computed based on market prices in an active market held in a rabbi trust. The fair value of our foreign currency exchange contracts is determined using quoted forward exchange rates and spot rates at the reporting date.

(6) Commitments and Contingencies

Professional and General Liability, Workers’ Compensation Liability

The vast majority of our subsidiaries are self-insured for professional and general liability exposure up to: (i) $20 million for professional liability and $3 million for general liability per occurrence in 2025, 2024, 2023, 2022 and 2021; (ii) $10 million and $3 million per occurrence, respectively, in 2020; (iii) $5 million and $3 million per occurrence, respectively, during 2019, 2018 and 2017, and; (iv) $10 million and $3 million per occurrence, respectively, prior to 2017. For each of the years indicated above, through February 2025, for claims involving multiple plaintiffs, a single self-insured retention may apply, as stipulated in and subject to the terms and conditions of the applicable commercial policies, for claims qualifying as group related integrated occurrences and/or medical incidents. As of March 1, 2025, the single self-insured retention no longer applies in connection with claims made by multiple plaintiffs against our behavioral health care facilities.

These subsidiaries are provided with several excess policies through commercial insurance carriers which provide for coverage in excess of the applicable per occurrence and aggregate self-insured retention or underlying policy limits up to approximately $110 million in 2025; $175 million in 2024; $165 million in 2023; $162 million in 2022; $155 million in 2021 and $250 million during each of 2014 through 2020. Effective March, 2025, our commercial insurance coverage contains less favorable terms than previous years including coverage exclusions for incidents involving sexual molestation or abuse, higher premiums and lower aggregate limitations.

In addition, from time to time based upon marketplace conditions, we may elect to purchase additional commercial coverage for certain of our facilities or businesses. Our behavioral health care facilities located in the U.K. have policies through a commercial insurance carrier located in the U.K. that provides for £20 million of professional liability coverage and £25 million of general liability coverage.

The commercial insurance limits indicated above for each policy year may have been reduced due to payment of covered claims or suits, subject to the policy terms and conditions.

As of September 30, 2025, the total net accrual for our self-insured professional and general liability claims was $489 million, of which $100 million was included in current liabilities. As of December 31, 2024, the total net accrual for our self-insured professional and general liability claims was $487 million, of which $85 million was included in current liabilities.

As a result of unfavorable trends experienced during the past several years, included in our results of operations were increases to our reserve for self-insured professional and general liability claims amounting to approximately $35 million recorded during the three and nine-months ended September 30, 2025 and approximately $30 million and $44 million during the three and nine-months periods ended September 30, 2024. For the full year 2024 we recorded $79 million. All professional and general liability insurance we purchase is subject to policy limitations. Our estimated liability for self-insured professional and general liability claims is based on a number of factors including, among other things, the number of asserted claims and reported incidents, estimates of losses for these claims based on recent and historical settlement amounts and jury verdicts, estimates of incurred but not reported claims based on historical experience, and estimates of amounts recoverable under our commercial insurance policies. All relevant information, including our own historical experience, applicable per occurrence and aggregate self-insured retentions, and limitations and exclusions pursuant to our commercial insurance policies, is used in estimating our expected liability for self-insured claims. While we continuously monitor these factors, our ultimate liability for professional and general liability claims could change materially from our current estimates due to inherent uncertainties involved in making this estimate. Given our significant exposure to professional and general liability claims, there can be no assurance that a sharp increase in the number and/or severity of claims asserted against us, and/or reductions in the amount of commercial coverage available to us, will not have a material adverse effect on our future results of operations.

As of September 30, 2025, the total accrual for our workers’ compensation liability claims was $149 million, $64 million of which was included in current liabilities. As of December 31, 2024, the total accrual for our workers’ compensation liability claims was $137 million, $58 million of which was included in current liabilities.

Although we are unable to predict whether or not our future financial statements will require updates to estimates for our prior year reserves for self-insured general and professional and workers’ compensation claims, given the relatively unpredictable nature of these potential liabilities and the factors impacting these reserves, as discussed above, it is reasonably likely that our future financial results may include material adjustments to prior period reserves.

As disclosed below in Legal Proceedings, Cumberland Hospital for Children and Adolescents (“Cumberland”), an indirect subsidiary of the Company, is a defendant in multi-plaintiff lawsuits filed in the Circuit Court for Richmond, Virginia (the “Cumberland Litigation”), relating to allegations of inappropriate sexual contact during medical examinations by Dr. Daniel Davidow, an independent contractor and the former medical director for Cumberland. The Company and UHS of Delaware, Inc., our administrative services subsidiary (“UHS Delaware”), were also named as co-defendants in the Cumberland Litigation. Plaintiffs have asserted claims of negligence, assault and battery (against Dr. Davidow), false imprisonment, violations of the Virginia Consumer Protection

Act (“VCPA”), and vicarious liability for Dr. Davidow’s conduct against Cumberland, the Company, and UHS Delaware. The Company and UHS Delaware were dismissed from the action during the trial of the first three plaintiffs, which occurred in September, 2024. On September 27, 2024, a jury entered a verdict finding Dr. Davidow and Cumberland liable and awarded these three plaintiffs combined compensatory damages of $60 million for all liability theories, an additional combined $180 million in trebled damages for violation of the VCPA, and an additional combined $120 million in punitive damages. Cumberland filed post-trial motions challenging this verdict, including the amounts awarded in the verdict. Based upon Virginia law, the Court reduced the punitive damage amount to a combined maximum of $1.05 million ($350,000 per plaintiff). Cumberland has filed a notice of appeal on the remaining verdict. Plaintiffs have separately filed a notice of appeal seeking to challenge the dismissal of the Company and UHS Delaware during trial, and the Court’s order reducing the punitive damages award against Cumberland.

There are approximately 40 additional plaintiffs making similar allegations with claims pending in the Cumberland Litigation. The Company and UHS Delaware remain defendants with respect to the remaining plaintiffs. We expect that the trials for the remaining plaintiffs, as well as any additional plaintiffs, will be scheduled at various times over the next several years and will continue to be tried in small groups.

We can make no assurances regarding the ultimate financial exposure, timing, substance or outcome of the Cumberland matter (which related to occurrences in the 2020 policy year), or the amount of damages that may be ultimately held recoverable after post-judgment proceedings and appeals. As of September 30, 2025, without reduction for any potential amounts related to the Cumberland matter, the Company and its subsidiaries have aggregate insurance coverage of approximately $147 million remaining under commercial policies for matters applicable to the 2020 policy year (in excess of the applicable self-insured retention amounts of $10 million per single occurrence/$25 million for multi-plaintiff matters for professional liability claims and $3 million per occurrence for general liability claims). In the event the resolution of the Cumberland matter exhausts all or a significant portion of the remaining commercial insurance coverage available to the Company and its subsidiaries related to other matters that occurred in 2020, or the Cumberland matter causes the posting of large bonds or other collateral during the appeal processes, our future results of operations and capital resources would be materially adversely impacted.

We have received lawsuits in various jurisdictions on behalf of numerous former patients spanning decades claiming to be the victims of sexual assaults while patients at our facilities. Many of these lawsuits have been brought in conjunction with various states extending their statute of limitations to allow alleged victims of sexual assaults or abuse to file claims many years after the alleged incidents occurred. We are uncertain as to potential liability in connection with these matters.

Property Insurance

We have commercial property insurance policies for our properties, covering the period of June 1, 2025 to June 1, 2026, providing property and business interruption coverage for losses in excess of $15 million per occurrence or per location (as applicable based upon the event) up to a $1 billion annual policy limitation for certain catastrophic events or perils. These commercial policies provide for coverage of up to $250 million of annual aggregate coverage for losses resulting from windstorm damage at all facilities except those in Puerto Rico where $100 million of annual aggregate coverage is provided. Losses resulting from named windstorms are subject to deductibles between 3% and 5% of the total insurable value of the property. In addition, we have commercial property insurance policies covering catastrophic losses resulting from earthquake and flood damage, each subject to aggregated loss limits (as opposed to per occurrence losses). Commercially insured earthquake coverage for our facilities is subject to various deductibles and limitations including: (i) $150 million limitation for our facilities located in California and Alaska; (ii) $100 million limitation for our facilities in New Madrid Seismic Zone, Pacific Northwest Seismic Zone, South Carolina, Utah and certain counties in Nevada; (iii) $40 million limitation for our facilities located in Puerto Rico, and; (iv) $250 million limitation for our facilities located in other states. Our commercially insured flood coverage has a limit of $100 million annually. There is also a $10 million sublimit for one of our facilities located in Houston, Texas, and a $1 million sublimit for our facilities located in Puerto Rico. As of January 1, 2025, property insurance for our behavioral health facilities located in the U.K. are provided on an all risk basis up to a £2.3 billion, with a coverage cap per location of £150 million for any one occurrence, that includes coverage for real and personal property as well as business interruption losses.

These commercial property policies are subject to a deductible of: (i) $5 million per location for damage resulting from earthquake, wind, hail and flood, and; (ii) $5 million per occurrence for all other events. For per location or per occurrence losses in excess of the applicable deductible, we are self-insured, through our wholly-owned captive insurance company, for up to $10 million of annual aggregate losses. Should the $10 million self-insured annual aggregate limitation be exhausted during the policy year, we have commercial reinsurance coverage for the next $30 million of annual aggregate losses in excess of the applicable deductible. In the event the $30 million of commercial reinsurance coverage is also exhausted, we are self-insured for all per location or per occurrence losses up to $25 million, including the $5 million deductible.

Commitment to Develop, Lease and Operate an Acute Care Hospital in Washington, D.C.

During 2020, we entered into various agreements with the District of Columbia (the “District”) related to the development, leasing and operation of an acute care hospital and certain other facilities/structures on land owned by the District (“District Facilities”). Pursuant to the agreements, on behalf of the District, we served as manager for development and construction of the District Facilities, which

were funded entirely by the District. The District Facilities had an aggregate cost of approximately $417 million, substantially all of which has been incurred as of September 30, 2025. Construction of the acute care hospital (Cedar Hill Regional Medical Center) was completed and the hospital opened on April 15, 2025.

We are leasing the District Facilities for a nominal rental amount for a period of 75 years and are obligated to operate the District Facilities during the lease term. We have certain lease termination rights in connection with the District Facilities beginning on the tenth anniversary of the lease commencement date for various and decreasing amounts as provided for in the agreements. Additionally, any time after the 10th anniversary of the lease term, we have a right to purchase the District Facilities for a price equal to the greater of fair market value of the District Facilities or the amount necessary to defease the bonds issued by the District to fund the construction of the District Facilities. The lease agreement also entitles the District to participation rent should certain specified earnings before interest, taxes, depreciation and amortization thresholds be achieved by the acute care hospital.

Additionally, we have committed to expend no less than $75 million (approximately $21 million of which has been incurred as of September 30, 2025), over a projected 12-year period, in healthcare infrastructure including expenditures related to the District Facilities as well as other healthcare related expenditures in certain specified areas of Washington, D.C. Pursuant to the agreements, the District is entitled to certain termination fees and other amounts as specified in the agreements in the event we, within certain specified periods of time, cease to operate the acute care hospital or there is a transfer of control of us or our subsidiary operating the hospital.

Legal Proceedings

We operate in a highly regulated and litigious industry which subjects us to various claims and lawsuits in the ordinary course of business as well as regulatory proceedings and government investigations. These claims or suits include claims for damages for personal injuries, medical malpractice, commercial/contractual disputes, wrongful restriction of, or interference with, physicians’ staff privileges, and employment related claims. In addition, health care companies are subject to investigations and/or actions by various state and federal governmental agencies or those bringing claims on their behalf. Government action has increased with respect to investigations and/or allegations against healthcare providers concerning possible violations of fraud and abuse and false claims statutes as well as compliance with clinical and operational regulations. Currently, and from time to time, we and some of our facilities are subjected to inquiries in the form of subpoenas, Civil Investigative Demands, audits and other document requests from various federal and state agencies. These inquiries can lead to notices and/or actions including repayment obligations from state and federal government agencies associated with potential non-compliance with laws and regulations. Further, the federal False Claims Act allows private individuals to bring lawsuits (qui tam actions) against healthcare providers that submit claims for payments to the government. Various states have also adopted similar statutes. When such a claim is filed, the government will investigate the matter and decide if they are going to intervene in the pending case. These qui tam lawsuits are placed under seal by the court to comply with the False Claims Act’s requirements. If the government chooses not to intervene, the private individual(s) can proceed independently on behalf of the government. Health care providers that are found to violate the False Claims Act may be subject to substantial monetary fines/penalties as well as face potential exclusion from participating in government health care programs or be required to comply with Corporate Integrity Agreements as a condition of a settlement of a False Claims Act matter. In September 2014, the Criminal Division of the Department of Justice (“DOJ”) announced that all qui tam cases will be shared with their Division to determine if a parallel criminal investigation should be opened. The DOJ has also announced an intention to pursue civil and criminal actions against individuals within a company as well as the corporate entity or entities. In addition, health care facilities are subject to monitoring by state and federal surveyors to ensure compliance with program Conditions of Participation. In the event a facility is found to be out of compliance with a Condition of Participation and unable to remedy the alleged deficiency(s), the facility faces termination from the Medicare and Medicaid programs or compliance with a System Improvement Agreement to remedy deficiencies and ensure compliance.

The laws and regulations governing the healthcare industry are complex covering, among other things, government healthcare participation requirements, licensure, certification and accreditation, privacy of patient information, reimbursement for patient services as well as fraud and abuse compliance. These laws and regulations are constantly evolving and expanding. Further, the original Patient Protection and Affordable Care Act, as amended by the Health and Education Reconciliation Act, has added additional obligations on healthcare providers to report and refund overpayments by government healthcare programs and authorizes the suspension of Medicare and Medicaid payments “pending an investigation of a credible allegation of fraud.” We monitor our business and have developed an ethics and compliance program with respect to these complex laws, rules and regulations. Although we believe our policies, procedures and practices comply with government regulations, there is no assurance that we will not be faced with the sanctions referenced above which include fines, penalties and/or substantial damages, repayment obligations, payment suspensions, licensure revocation, and expulsion from government healthcare programs. Even if we were to ultimately prevail in any action brought against us or our facilities or in responding to any inquiry, such action or inquiry could have a material adverse effect on us.

Certain legal matters are described below:

K.E.E., et al., Plaintiffs v. Cumberland Hospital, LLC d/b/a Cumberland Hospital for Children and Adolescents, et al. (and related lawsuits)

Cumberland Hospital for Children and Adolescents (“Cumberland”), an indirect subsidiary of the Company, is a defendant in multi-plaintiff lawsuits filed in the Circuit Court for Richmond, Virginia (the “Cumberland Litigation”), relating to allegations of inappropriate sexual contact during medical examinations by Dr. Daniel Davidow, an independent contractor and the former medical director for Cumberland. The Company and UHS of Delaware, Inc., our administrative services subsidiary (“UHS Delaware”), were also named as co-defendants in the Cumberland Litigation. Plaintiffs have asserted claims of negligence, assault and battery (against Dr. Davidow), false imprisonment, violations of the Virginia Consumer Protection Act (“VCPA”), and vicarious liability for Dr. Davidow’s conduct against Cumberland, the Company, and UHS Delaware. All defendants have denied liability.

The claims asserted by three of the plaintiffs in the Cumberland Litigation were consolidated for trial in September of 2024. The Company and UHS Delaware were dismissed from the action during trial. On September 27, 2024, a jury entered a verdict finding Dr. Davidow and Cumberland liable and awarded these three plaintiffs combined compensatory damages of $60 million for all liability theories, an additional combined $180 million in trebled damages for violation of the VCPA, and an additional combined $120 million in punitive damages. Cumberland filed post-trial motions challenging this verdict. Based upon Virginia law, the Court reduced the punitive damage amount to a combined maximum of $1.05 million ($350,000 per plaintiff). Cumberland has filed a notice of appeal on the remaining verdict. Plaintiffs have separately filed a notice of appeal seeking to challenge the dismissal of the Company and UHS Delaware during trial, and the Court’s order reducing the punitive damages award against Cumberland.

There are approximately 40 additional plaintiffs making similar allegations with claims pending in the Cumberland Litigation. The Company and UHS Delaware remain defendants with respect to the remaining plaintiffs. We expect that the trials for the remaining plaintiffs, as well as any additional plaintiffs, will be scheduled at various times over the next several years and will continue to be tried in small groups.

In the event the resolution of the Cumberland matter exhausts all or a significant portion of the remaining commercial insurance coverage available to the Company and its subsidiaries related to other matters that occurred in 2020, or the Cumberland matter causes the posting of large bonds or other collateral during the appeal processes, our future results of operations and capital resources would be materially adversely impacted.

St. Mary’s Medical Group, Inc. et. al. v. Pinnacle Medical Group, Northern Nevada, et. al.

UHS of Delaware, Inc., the wholly-owned administrative services subsidiary of the Company is a defendant in a lawsuit filed in Washoe County, Nevada, along with Pinnacle Management Group NV, LLC ("Pinnacle Medical Group", in which a subsidiary of the Company holds a 50% interest) and several individuals. The Company was previously dismissed from the lawsuit. The lawsuit contains allegations of intentional interference with contractual relationships and prospective economic advantage resulting from the departure of several physicians and advance practice providers from St. Mary’s Medical Group in Reno, Nevada, who joined Pinnacle Medical Group in 2021.

A trial of this matter was concluded on September 26, 2025, with a verdict rendered against UHS of Delaware, Inc. and the other defendants for approximately $4.7 million in compensatory damages. The jury also awarded punitive damages against UHS of Delaware, Inc. of $500 million and lesser amounts against some of the other defendants. Based upon Nevada statutory law, we expect the punitive damages to be reduced to a maximum of approximately $14 million. We also believe that recent Nevada Supreme Court precedent could further reduce the amount of punitive damages.

UHS of Delaware, Inc. and the other defendants are evaluating all legal options and intend to challenge this verdict in post-judgment trial court proceedings and on appeal. Although we are uncertain as to the ultimate financial exposure related to this matter and we can make no assurance regarding its outcome, or the amount of damages that may be recoverable after post-judgment proceedings and appeals, during the third quarter of 2025, we recorded an $18 million legal reserve in connection with this matter. If we are unsuccessful in reversing the verdict, or significantly reducing the level of damages, or we are required to post a substantial bond pending appeal, this matter could have a material adverse effect on the financial condition of the Company.

Other Matters

Various other suits, claims and investigations, including government subpoenas, arising against, or issued to, us are pending and additional such matters may arise in the future. Management will consider additional disclosure from time to time to the extent it believes such matters may be or become material. The outcome of any current or future litigation or governmental or internal investigations, including the matters described above, cannot be accurately predicted, nor can we predict any resulting penalties, fines or other sanctions that may be imposed at the discretion of federal or state regulatory authorities. We record accruals for such contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters described above or that are otherwise pending because the inherently unpredictable nature of legal proceedings

may be exacerbated by various factors, including, but not limited to: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the matter is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties, or; (vii) there is a wide range of potential outcomes. It is possible that the outcome of these matters could have a material adverse impact on our future results of operations, financial position, cash flows and, potentially, our reputation.

(7) Segment Reporting

We operate in two reportable segments: Acute Care Hospital Services and Behavioral Health Care Services. Our chief operating decision making (“CODM”) group is comprised of our President and Chief Executive Officer and each of our respective division Presidents for our Acute Care Hospital Services and Behavioral Health Care Services. The operating segments are managed separately because each operating segment represents a business unit that offers different types of healthcare services or operates in different healthcare environments. The primary profitability measurement utilized by the President and Chief Executive Officer as well as the Presidents of each operating segment is segment income before income taxes. Segment income before income taxes is utilized by the CODM group during the annual budgeting process and during their reviews of our monthly operating results to monitor each segment’s operating results as compared to prior periods and the respective operating budgets.

The expenses included in our non-segment operating expenses below include centralized services including, but not limited to, information technology, purchasing, reimbursement, accounting and finance, taxation, legal, advertising and design and construction. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2024. We do not present asset information for our segments as this information is not used to allocate resources.

Note: prior year amounts related to certain facilities previously included in our Behavioral Health Care Services’ results have been reclassified into our Acute Care Hospital Services' results as of May 1, 2024 to conform with current year presentation.

Three Months Ended September 30, 2025		Acute Care Hospital Services				Behavioral Health Care Services (c)				Total
		(amounts in thousands)
Net revenue from reportable segments		$	2,630,065			$	1,860,259			$	4,490,324
Reconciliation of Net Revenue
Non-segment revenue											4,921
Total Net Revenue										$	4,495,245
Salaries, wages and benefits		$	973,680			$	995,570
Other segment item operating expenses (a)			1,258,986				462,131
Depreciation and amortization expense			97,389				55,294
Interest (income) expense, net			528				1,265
Other (income) expense, net			(623	)			733
Reportable segment income before income taxes		$	300,105			$	345,266			$	645,371
Reconciliation of non-segment revenue/expenses to consolidated income before income taxes
Non-segment revenue											4,921
Non-segment operating expenses (b)											130,507
Non-segment interest expense, net											36,638
Non-segment other (income) expense, net											(13,739	)
Income before income taxes										$	496,886
Nine Months Ended September 30, 2025		Acute Care Hospital Services				Behavioral Health Care Services (c)				Total
		(amounts in thousands)
Net revenue from reportable segments		$	7,380,328			$	5,487,984			$	12,868,312
Reconciliation of Net Revenue
Non-segment revenue											10,469
Total Net Revenue										$	12,878,781
Salaries, wages and benefits		$	2,821,509			$	2,900,892
Other segment item operating expenses (a)			3,490,402				1,345,738
Depreciation and amortization expense			288,406				159,961
Interest (income) expense, net			1,177				3,444
Other (income) expense, net			(9,806	)			(929	)
Reportable segment income before income taxes		$	788,640			$	1,078,878			$	1,867,518
Reconciliation of non-segment revenue/expenses to consolidated income before income taxes
Non-segment revenue											10,469
Non-segment operating expenses (b)											395,090
Non-segment interest expense, net											109,230
Non-segment other (income) expense, net											(17,032	)
Income before income taxes										$	1,390,699

Three Months Ended September 30, 2024		Acute Care Hospital Services				Behavioral Health Care Services (c)				Total
Net revenue from reportable segments		$	2,253,819			$	1,706,612			$	3,960,431
Reconciliation of Net Revenue
Non-segment revenue											2,596
Total Net Revenue										$	3,963,027
Salaries, wages and benefits		$	899,375			$	914,477
Other segment item operating expenses (a)			1,058,086				422,609
Depreciation and amortization expense			94,747				52,227
Interest expense, net			1,077				1,041
Other expense (income), net			(527	)			(861	)
Reportable segment income before income taxes		$	201,061			$	317,119			$	518,180
Reconciliation of non-segment revenue/expenses to consolidated income before income taxes
Non-segment revenue											2,596
Non-segment operating expenses (b)											137,341
Non-segment interest expense, net											42,542
Non-segment other (income) expense, net											(640	)
Income before income taxes										$	341,533
Nine Months Ended September 30, 2024		Acute Care Hospital Services				Behavioral Health Care Services (c)				Total
		(amounts in thousands)
Net revenue from reportable segments		$	6,617,586			$	5,088,711			$	11,706,297
Reconciliation of Net Revenue
Non-segment revenue											7,916
Total Net Revenue										$	11,714,213
Salaries, wages and benefits		$	2,620,069			$	2,682,167
Other segment item operating expenses (a)			3,095,859				1,258,743
Depreciation and amortization expense			279,420				150,577
Interest expense, net			3,363				3,076
Other expense (income), net			(354	)			(2,408	)
Reportable segment income before income taxes		$	619,229			$	996,556			$	1,615,785
Reconciliation of non-segment revenue/expenses to consolidated income before income taxes
Non-segment revenue											7,916
Non-segment operating expenses (b)											418,053
Non-segment interest expense, net											139,946
Non-segment other (income) expense, net											6,077
Income before income taxes										$	1,059,625

(a)

Other segment operating expenses for each period includes other operating expenses, supplies expense and lease and rental expense.

(b)

Non-segment operating expenses for each period includes salaries, wages and benefits, other operating expenses, supplies expense and lease and rental expense.

(c)

Includes net revenues generated from our behavioral health care facilities located in the U.K. amounting to approximately $264 million and $230 million for the three-month periods ended September 30, 2025 and 2024, respectively, and approximately $738 million and $651 million for the nine-month periods ended September 30, 2025 and 2024, respectively.

(8) Earnings Per Share Data and Stock Based Compensation

Basic earnings per share are based on the weighted average number of common shares outstanding during the period. Diluted earnings per share are based on the weighted average number of common shares outstanding during the period adjusted to give effect to common stock equivalents.

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

		Three months ended September 30,								Nine months ended September 30,
		2025				2024				2025				2024
Basic and Diluted:
Net income attributable to UHS		$	372,957			$	258,714			$	1,042,855			$	809,700
Less: Net income attributable to unvested restricted share grants			-				-				-				(50	)
Net income attributable to UHS – basic and diluted		$	372,957			$	258,714			$	1,042,855			$	809,650
Weighted average number of common shares - basic			62,974				66,537				64,100				66,873
Net effect of dilutive stock options and grants based on the treasury stock method			689				1,571				797				1,297
Weighted average number of common shares and equivalents - diluted			63,663				68,108				64,897				68,170
Earnings per basic share attributable to UHS:		$	5.92			$	3.89			$	16.27			$	12.11
Earnings per diluted share attributable to UHS:		$	5.86			$	3.80			$	16.07			$	11.88

The “Net effect of dilutive stock options and grants based on the treasury stock method” for all periods presented above, excludes certain outstanding stock options applicable to each period since the effect would have been anti-dilutive. The excluded weighted-average stock options totaled 6,000 for the three-months ended September 30, 2025 and 7,000 for the nine-months ended September 30, 2025. There were no excluded weighted-average stock options for the three-months ended September 30, 2024 and totaled 799,000 for the nine-months ended September 30, 2024. All classes of our common stock have the same dividend rights.

Stock-Based Compensation:

During the three-month periods ended September, 2025 and 2024, pre-tax compensation costs of $8.1 million and $13.4 million, respectively, was recognized related to outstanding stock options. During the nine-month periods ended September 30, 2025 and 2024, pre-tax compensation costs of $25.7 million and $41.0 million, respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended September 30, 2025 and 2024, pre-tax compensation costs of approximately $16.4 million and $12.9 million, respectively, was recognized related to restricted stock awards, restricted stock units and performance based restricted stock units. During the nine-month periods ended September 30, 2025 and 2024, pre-tax compensation costs of $43.7 million and $30.7 million, respectively, was recognized related to restricted stock awards, restricted stock units and performance based restricted stock units.

As of September, 2025 there was approximately $174.4 million of unrecognized compensation cost related to unvested options, restricted stock awards, restricted stock units and performance based restricted stock units which is expected to be recognized over the remaining weighted average vesting period of 2.5 years. There were an aggregate of 554,065 restricted units, net of cancellations, granted during the first nine months of 2025 under the 2020 Stock Incentive Plan, including 61,251 performance based restricted stock units, with a weighted-average grant date fair value of $178.25 per share. The expense associated with stock-based compensation arrangements is a non-cash charge. In the condensed consolidated statements of cash flows, stock-based compensation expense is an adjustment to reconcile net income to cash provided by operating activities and aggregated to $70.6 million and $72.7 million during the nine-month periods ended September 30, 2025 and 2024, respectively.

(9) Dispositions and acquisitions

Nine-month period ended September 30 2025:

Acquisitions:

During the first nine months of 2025, we spent $48 million on the acquisition of behavioral health care businesses and property located in the United Kingdom.

Divestitures:

During the first nine months of 2025, we received $3 million from the sales of assets and businesses.

Nine-month period ended September 30 2024:

Acquisitions:

During the first nine months of 2024, there were no acquisitions.

Divestitures:

During the first nine months of 2024, we received $30 million from the sales of assets and businesses.

(10) Dividends

We declared and paid dividends of $12.5 million, or $.20 per share, during the third quarter of 2025 and $13.3 million, or $.20 per share, during the third quarter of 2024. We declared and paid dividends of $38.9 million, or $.60 per share, during the nine-month period ended September 30, 2025 and $40.3 million, or $.60 per share, during the nine-month period ended September 30, 2024.

(11) Income Taxes

Our effective income tax rates were 23.7% and 22.1% during the three-month periods ended September 30, 2025, and 2024, respectively, and 23.5% and 22.0% during the nine-month periods ended September 30, 2025, and 2024, respectively. The increase in our effective tax rates during the three and nine-months ended September 30, 2025, as compared with the comparable periods in 2024, was primarily due to unfavorable changes in tax benefit from employee share-based payments, net of the impact of executive compensation limitations pursuant to IRC section 162(m), amounting to $3 million and $14 million, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of corporate income tax law changes, was signed into law in the United States. The OBBBA includes law changes related to bonus depreciation, the expensing of domestic research costs, certain U.S. international tax rules and other modifications. There is no material impact on our estimated annual effective tax rate in 2025. The majority of the tax law changes will take effect starting in 2026.

As of January 1, 2025, our unrecognized tax benefits were approximately $2 million. During the nine months ended September 30, 2025, changes to the estimated liabilities for uncertain tax positions (including accrued interest) relating to tax positions taken during prior and current periods did not have a material impact on our financial statements.

We recognize accrued interest and penalties associated with uncertain tax positions as part of the tax provision. As of September 30, 2025, we have less than $1 million of accrued interest and penalties. The U.S. federal statute of limitations remains open for 2021 and subsequent years. Foreign and U.S. state and local jurisdictions have statutes of limitations generally ranging from 3 to 4 years. The statute of limitations on certain jurisdictions could expire within the next twelve months. It is reasonably possible that the amount of uncertain tax benefits will change during the next 12 months, however, it is anticipated that any such change, if it were to occur, would not have a material impact on our results of operations.

We operate in multiple jurisdictions with varying tax laws. We are subject to audits by any of these taxing authorities. We believe that adequate accruals have been provided for federal, foreign and state taxes.

(12) Revenue Recognition

We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Our estimate for amounts not expected to be collected based on historical experience will continue to be recognized as a reduction to net revenue. However, subsequent changes in estimate of collectability due to a change in the financial status of a payer, for example a bankruptcy, will be recognized as bad debt expense in operating charges.

The performance obligation is separately identifiable from other promises in the customer contract. As the performance obligations are met (i.e. room, board, ancillary services, level of care), revenue is recognized based upon allocated transaction price. The transaction price is allocated to separate performance obligations based upon the relative standalone selling price. In instances where we determine there are multiple performance obligations across multiple months, the transaction price will be allocated by applying an estimated implicit and explicit rate to gross charges based on the separate performance obligations*.*

In assessing collectability, we have elected the portfolio approach. This portfolio approach is being used as we have large volume of similar contracts with similar classes of customers. We reasonably expect that the effect of applying a portfolio approach to a group of contracts would not differ materially from considering each contract separately. Management’s judgment to group the contracts by portfolio is based on the payment behavior expected in each portfolio category. As a result, aggregating all of the contracts (which are at the patient level) by the particular payer or group of payers, will result in the recognition of the same amount of revenue as applying the analysis at the individual patient level.

We group our revenues into categories based on payment behaviors. Each component has its own reimbursement structure which allows us to disaggregate the revenue into categories that share the nature and timing of payments. The other patient revenue consists primarily of self-pay, government-funded non-Medicaid, and other.

The following table disaggregates our revenue by major source for the three and nine-month periods ended September 30, 2025 and 2024 (in thousands):

Note: prior year amounts related to certain facilities previously included in our Behavioral Health Care Services’ results have been reclassified into our Acute Care Hospital Services' results as of May 1, 2024 to conform with current year presentation.

	For the three months ended September 30, 2025
	Acute Care							Behavioral Health							Other				Total
Medicare	$	374,814			14	%		$	85,769			5	%						$	460,583			10	%
Managed Medicare		404,619			15	%			111,992			6	%							516,611			11	%
Medicaid		451,867			17	%			314,398			17	%							766,265			17	%
Managed Medicaid		180,592			7	%			447,340			24	%							627,932			14	%
Managed Care (HMO and PPOs)		831,058			32	%			410,763			22	%							1,241,821			28	%
UK Revenue		0			0	%			264,486			14	%							264,486			6	%
Other patient revenue and adjustments, net		151,144			6	%			167,871			9	%							319,015			7	%
Other non-patient revenue		235,971			9	%			57,640			3	%			4,921				298,532			7	%
Total Net Revenue	$	2,630,065			100	%		$	1,860,259			100	%		$	4,921				4,495,245			100	%
	For the nine months ended September 30, 2025
	Acute Care							Behavioral Health							Other				Total
Medicare	$	1,141,829			15	%		$	236,040			4	%						$	1,377,869			11	%
Managed Medicare		1,236,634			17	%			319,448			6	%							1,556,082			12	%
Medicaid		983,889			13	%			953,404			17	%							1,937,293			15	%
Managed Medicaid		509,186			7	%			1,341,183			24	%							1,850,369			14	%
Managed Care (HMO and PPOs)		2,421,837			33	%			1,232,638			22	%							3,654,475			28	%
UK Revenue		0			0	%			738,460			13	%							738,460			6	%
Other patient revenue and adjustments, net		447,484			6	%			491,658			9	%							939,142			7	%
Other non-patient revenue		639,469			9	%			175,153			3	%			10,469				825,091			6	%
Total Net Revenue	$	7,380,328			100	%		$	5,487,984			100	%		$	10,469			$	12,878,781			100	%
	For the three months ended September 30, 2024
	Acute Care							Behavioral Health							Other				Total
Medicare	$	323,015			14	%		$	80,599			5	%						$	403,614			10	%
Managed Medicare		362,961			16	%			106,753			6	%							469,714			12	%
Medicaid		299,147			13	%			260,212			15	%							559,359			14	%
Managed Medicaid		157,435			7	%			419,890			25	%							577,325			15	%
Managed Care (HMO and PPOs)		726,227			32	%			399,791			23	%							1,126,018			28	%
UK Revenue		0			0	%			230,153			13	%							230,153			6	%
Other patient revenue and adjustments, net		118,193			5	%			154,818			9	%							273,011			7	%
Other non-patient revenue		266,841			12	%			54,396			3	%			2,596				323,833			8	%
Total Net Revenue	$	2,253,819			100	%		$	1,706,612			100	%		$	2,596			$	3,963,027			100	%
	For the nine months ended September 30, 2024
	Acute Care							Behavioral Health							Other				Total
Medicare	$	1,010,737			15	%		$	233,188			5	%						$	1,243,925			11	%
Managed Medicare		1,106,470			17	%			305,411			6	%							1,411,881			12	%
Medicaid		774,586			12	%			800,966			16	%							1,575,552			13	%
Managed Medicaid		471,344			7	%			1,257,645			25	%							1,728,989			15	%
Managed Care (HMO and PPOs)		2,131,280			32	%			1,224,893			24	%							3,356,173			29	%
UK Revenue		0			0	%			650,655			13	%							650,655			6	%
Other patient revenue and adjustments, net		375,727			6	%			449,043			9	%							824,770			7	%
Other non-patient revenue		747,442			11	%			166,910			3	%			7,916				922,268			8	%
Total Net Revenue	$	6,617,586			100	%		$	5,088,711			100	%		$	7,916			$	11,714,213			100	%

(13) Lease Accounting

Our operating leases are primarily for real estate, including certain acute care facilities, off-campus outpatient facilities, medical office buildings, and corporate and other administrative offices. Our real estate lease agreements typically have initial terms of five to ten years. These real estate leases may include one or more options to renew, with renewals that can extend the lease term from five to ten years. The exercise of lease renewal options is at our sole discretion. When determining the lease term, we included options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Five of our hospital facilities are held under operating leases with Universal Health Realty Income Trust with two leases expiring in 2026, two expiring in 2033 and one expiring in 2040 (for additional disclosure, see Note 2 to the Consolidated Financial Statements-Relationship with Universal Health Realty Income Trust and Other Related Party Transactions). We are also the lessee of the real property of certain facilities from unrelated third parties.

Supplemental cash flow information related to leases for the nine-month periods ended September 30, 2025 and 2024 are as follows (in thousands):

	Nine months ended September 30,
	2025				2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	101,970			$	99,526
Operating cash flows from finance leases	$	2,646			$	2,756
Financing cash flows from finance leases	$	1,855			$	3,167
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	27,148			$	50,696
Finance leases	$	1,410			$	8,441

(14) Recent Accounting Standards

During 2024, we adopted ASU 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)”. ASU 2023-07 modifies reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses categorized as significant or regularly provided to the Chief Operating Decision Maker (CODM). The standard was applied retrospectively to all periods presented in the financial statements. See Note 7 - Segment Reporting for the required disclosures.

In November 2024, the Financial Accounting Standards Board ("FASB") issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (subtopic 220-40)". ASU 2024-03 requires disclosures, in the notes to financial statements, of specified information about certain costs and expenses. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact this new standard will have on the related disclosures in the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures (Topic 740)”. ASU 2023-09 requires enhanced disclosures on income taxes paid, adds disaggregation of continuing operations before income taxes between foreign and domestic earnings and defines specific categories for the reconciliation of jurisdictional tax rate to effective tax rate. This ASU is effective for fiscal years beginning after December 15, 2024, and can be applied on a prospective basis. We are currently evaluating the impact this new standard will have on the related disclosures in the consolidated financial statements.

From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by us as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. We have assessed the recently issued guidance that is not yet effective and, unless otherwise indicated above, we believe the new guidance will not have a material impact on our results of operations, cash flows or financial position.