UNIVERSAL HEALTH SERVICES INC

Previous wording

As of June 30, 2024, we owned and/or operated 359 inpatient facilities and 48 outpatient and other facilities, including the following, located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico:

Current wording

As of September 30, 2024, we owned and/or operated 361 inpatient facilities and 49 outpatient and other facilities, including the following, located in 39 states, Washington, D.C., the United Kingdom and Puerto Rico:

Previous wording

27 free-standing emergency departments, and;

Current wording

28 free-standing emergency departments, and;

Previous wording

Behavioral health care facilities (332 inpatient facilities and 10 outpatient facilities):

Current wording

Behavioral health care facilities (334 inpatient facilities and 10 outpatient facilities):

Previous wording

Net revenues from our acute care hospitals, outpatient facilities and commercial health insurer accounted for 56% of our consolidated net revenues during each of the three and six-month periods ended June 30, 2024, and 57% during each of the three and six-month periods ended June 30, 2023. Net revenues from our behavioral health care facilities and commercial health insurer accounted for 44% of our consolidated net revenues during each of the three and six-month periods ended June 30, 2024, and 43% during each of the three and six-month periods ended June 30, 2023.

Current wording

Net revenues from our acute care hospitals, outpatient facilities and commercial health insurer accounted for 57% of our consolidated net revenues during each of the three-month periods ended September 30, 2024 and 2023, and 56% and 57% during the nine-month periods ended September 30, 2024 and 2023, respectively. Net revenues from our behavioral health care facilities and commercial health insurer accounted for 43% of our consolidated net revenues during each of the three-month periods ended September 30, 2024 and 2023, and 44% and 43% during nine-month periods ended September 30, 2024 and 2023, respectively.

Previous wording

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $213 million and $190 million during the three-month periods ended June 30, 2024 and 2023, respectively, and $421 million and $358 million during the six-month periods ended June 30, 2024 and 2023, respectively. Total assets at our U.K. behavioral health care facilities were approximately $1.36 billion as of June 30, 2024 and $1.327 billion as of December 31, 2023.

Current wording

Our behavioral health care facilities located in the U.K. generated net revenues of approximately $230 million and $203 million during the three-month periods ended September 30, 2024 and 2023, respectively, and $651 million and $561 million during the nine-month periods ended September 30, 2024 and 2023, respectively. Total assets at our U.K. behavioral health care facilities were approximately $1.442 billion as of September 30, 2024 and $1.327 billion as of December 31, 2023.

Previous wording

there have been numerous political and legal efforts to expand, repeal, replace or modify the Legislation, since its enactment, some of which have been successful, in part, in modifying the Legislation, as well as court challenges to the constitutionality of the Legislation. The U.S. Supreme Court held in California v. Texas that the plaintiffs lacked standing to challenge the Legislation’s requirement to obtain minimum essential health insurance coverage, or the individual mandate. The Court dismissed the case without specifically ruling on the constitutionality of the Legislation. As a result, the Legislation will continue to remain law, in its entirety, likely for the foreseeable future. On September 7, 2022, the Legislation faced its most recent challenge when a Texas Federal District Court judge, in the case of Braidwood Management v. Becerra, ruled that a requirement that certain health plans cover services without cost sharing violates the Appointments Clause of the U.S. Constitution and that the coverage of certain HIV prevention medication violates the Religious Freedom Restoration Act. The decision was appealed to the U.S. Court of Appeals for the Fifth Circuit, which on June 21, 2024, affirmed the District Court’s ruling regarding preventive services recommended by United States Preventive Services Task Force being unconstitutional. However, the Fifth Circuit overturned the nationwide injunction imposed by the District Court, preserving access to the majority of preventive services in dispute for now. The matter is expected to be the subject of additional litigation, having been remanded in part to the District Court. The outcome and impacts of this litigation cannot be predicted. Any future efforts to challenge, replace or replace the Legislation or expand or substantially amend its provision is unknown. See below in Sources of Revenues and Health Care Reformfor additional disclosure;

Current wording

there have been numerous political and legal efforts to expand, repeal, replace or modify the Legislation, since its enactment, some of which have been successful, in part, in modifying the Legislation, as well as court challenges to the constitutionality of the Legislation. The U.S. Supreme Court held in California v. Texas that the plaintiffs lacked standing to challenge the Legislation’s requirement to obtain minimum essential health insurance coverage, or the individual mandate. The Court dismissed the case without specifically ruling on the constitutionality of the Legislation. As a result, the Legislation will continue to remain law, in its entirety, likely for the foreseeable future. On September 7, 2022, the Legislation faced its most recent challenge when a Texas Federal District Court judge, in the case of Braidwood Management v. Becerra, ruled that a requirement that certain health plans cover services without cost sharing violates the Appointments Clause of the U.S. Constitution and that the coverage of certain HIV prevention medication violates the Religious Freedom Restoration Act. The decision was appealed to the U.S. Court of Appeals for the Fifth Circuit, which on June 21, 2024, affirmed the District Court’s ruling regarding preventive services recommended by United States Preventive Services Task Force being unconstitutional. However, the Fifth Circuit overturned the nationwide injunction imposed by the District Court, preserving access to the majority of preventive services in dispute for now. On September 19, 2024, the U.S. Government filed a Petition for Writ of Certiorari, seeking review by the U.S. Supreme Court. The outcome and impacts of this litigation cannot be predicted. Any future efforts to challenge, replace or replace the Legislation or expand or substantially amend its provision is unknown. See below in Sources of Revenues and Health Care Reformfor additional disclosure;

Previous wording

the outcome of known and unknown litigation, government investigations, inquiries, false claims act allegations, and liabilities and other claims asserted against us and other matters, and the effects of adverse publicity relating to such matters, including, but not limited to, the March 28, 2024, jury verdict (of compensatory damages of $60 million and punitive damages of $475 million) returned against The Pavilion Behavioral Health System (the “Pavilion”), one of our indirect subsidiaries, as disclosed in Note 6 to the Condensed Consolidated Financial Statements - Commitments and Contingencies, Legal Proceedings. The Pavilion has filed post-trial motions, a portion of which were heard on August 1, 2024, with the remainder scheduled to be heard on August 23, 2024. The Pavilion will pursue an appeal as appropriate depending on the court's resolution of post-trial motions. We are uncertain as to the ultimate financial exposure related to the Pavilion matter (which relates to an occurrence in 2020) and we can make no assurances regarding timing or substance of its outcome, or the amount of damages that may be ultimately held recoverable after post-judgment proceedings and appeal. While the Pavilion has professional liability insurance to cover a portion of these amounts, the resolution of this matter may have a material adverse effect on the Company. As of June 30, 2024, without reduction for any potential amounts related to the above-mentioned Pavilion matter, the Company and its subsidiaries have aggregate insurance coverage of approximately $221 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 occurrence for professional liability claims and $3 million per occurrence for general liability claims). In the event the resolution of the Pavilion 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 Pavilion matter causes the posting of a large bond or other collateral during an appeal process, our future results of operations and capital resources could be materially adversely impacted;

Current wording

the outcome of known and unknown litigation, government investigations, inquiries, false claims act allegations, and liabilities and other claims asserted against us and other matters, and the effects of adverse publicity relating to such matters, including, but not limited to, the jury verdicts returned against The Pavilion Behavioral Health System (the "Pavilion") and Cumberland Hospital for Children and Adolescents ("Cumberland"), two of our indirect subsidiaries, as disclosed in Note 6 to the Condensed Consolidated Financial Statements - Commitments and Contingencies, Legal Proceedings. We are uncertain as to the ultimate financial exposure related to the Pavilion and Cumberland matters (which relate to occurrences in 2020) and we can make no assurances regarding timing or substance of their outcome, or the amount of damages that may be ultimately held recoverable after post-judgment proceedings and appeals. As of September 30, 2024, without reduction for any potential amounts related to the Pavilion and Cumberland matters, the Company and its subsidiaries have aggregate insurance coverage of approximately $221 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 occurrence for professional liability claims and $3 million per occurrence for general liability claims). In the event the resolution of the Pavilion and Cumberland matters 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 Pavilion and Cumberland matters cause the posting of large bonds or other collateral during the appeal processes, our future results of operations and capital resources could be materially adversely impacted;

Previous wording

as discussed below in Sources of Revenue, we receive revenues from various state and county-based programs, including Medicaid in all the states in which we operate. We receive annual Medicaid revenues of approximately $100 million, or greater, from each of Texas, Nevada, California, Illinois, Pennsylvania, Washington, D.C., Kentucky, Massachusetts, Mississippi, Virginia and Florida,. We also receive Medicaid DSH payments in certain states including, most significantly, Texas. We are therefore particularly sensitive to potential reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those states;

Current wording

as discussed below in Sources of Revenue, we receive revenues from various state and county-based programs, including Medicaid in all the states in which we operate. We receive annual Medicaid revenues of approximately $100 million, or greater, from each of Texas, Nevada, California, Illinois, Pennsylvania, Washington, D.C., Kentucky, Massachusetts, Virginia, Mississippi and Florida,. We also receive Medicaid DSH payments in certain states including, most significantly, Texas. We are therefore particularly sensitive to potential reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those states;

Previous wording

Net revenues increased by 10.1%, or $359 million, to $3.908 billion during the three-month period ended June 30, 2024, as compared to $3.548 billion during the second quarter of 2023. The net increase was primarily attributable to: (i) a $297 million, or 8.5%, increase in net revenues generated from our acute care hospital services and behavioral health services operated during both periods (which we refer to as “Same Facility”), and; (ii) an other combined net increase of $62 million, including a $58 million increase in provider tax assessments (which increased net revenues and other operating expenses but had no impact on income before income taxes).

Current wording

Net revenues increased by 11.2%, or $400 million, to $3.963 billion during the three-month period ended September 30, 2024, as compared to $3.563 billion during the third quarter of 2023. The net increase was primarily attributable to: (i) a $340 million, or 9.8%, increase in net revenues generated from our acute care hospital services and behavioral health services operated during both periods (which we refer to as “Same Facility”), and; (ii) an other combined net increase of $60 million due to an increase in provider tax assessments (which increased net revenues and other operating expenses but had no impact on income before income taxes).

Previous wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $157 million, or 70%, to $382 million during the three-month period ended June 30, 2024 as compared to $225 million during the second quarter of 2023. The net increase was due to:

Current wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $121 million, or 55%, to $342 million during the three-month period ended September 30, 2024 as compared to $221 million during the third quarter of 2023. The net increase was due to:

Previous wording

an increase of $81 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Current wording

an increase of $67 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Previous wording

an increase of $97 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services, and;

Current wording

an increase of $57 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services, and;

Previous wording

a $1.2 billion aggregate amount revolving credit facility that is scheduled to mature in August, 2026 (which, as of June 30, 2024, had $1.02 billion of aggregate available borrowing capacity net of $176.5 million of outstanding borrowings and $3 million of letters of credit), and;

Current wording

$3 million of other combined net decreases.

Previous wording

Net income attributable to UHS increased by $118 million, or 69%, to $289 million during the three-month period ended June 30, 2024 as compared to $171 million during the second quarter of 2023. This increase was attributable to:

Current wording

Net income attributable to UHS increased by $92 million, or 55%, to $259 million during the three-month period ended September 30, 2024, as compared to $167 million during the third quarter of 2023. This increase was attributable to:

Previous wording

a decrease of $7 million due to an unfavorable change in income/loss attributable to noncontrolling interests, and;

Current wording

a decrease of $6 million due to an unfavorable change in income/loss attributable to noncontrolling interests, and;

Previous wording

a decrease of $32 million resulting from an increase in the provision for income taxes resulting primarily from: (i) the increase in the provision for income taxes resulting from the $150 million increase in pre-tax income, partially offset by; (ii) a $2 million decrease in the provision for income taxes during the second quarter of 2024 from the impact of ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09").

Current wording

a decrease of $23 million resulting from an increase in the provision for income taxes resulting primarily from: (i) the increase in the provision for income taxes resulting from the $115 million increase in pre-tax income, partially offset by; (ii) a $4 million decrease in the provision for income taxes during the third quarter of 2024 from the net tax benefit recorded pursuant to ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), net of the impact of executive compensation limitations pursuant to IRC section 162(m).

Previous wording

The following table summarizes our results of operations and is used in the discussion below for the six-month periods ended June 30, 2024 and 2023 (dollar amounts in thousands):

Current wording

The following table summarizes our results of operations and is used in the discussion below for the nine-month periods ended September 30, 2024 and 2023 (dollar amounts in thousands):

Previous wording

Net revenues increased by 10.5%, or $736 million, to $7.751 billion during the six-month period ended June 30, 2024, as compared to $7.016 billion during the first six months of 2023. The net increase was primarily attributable to: (i) a $635 million, or 9.2%, increase in net revenues generated from our acute care hospital services and behavioral health services, on a same facility basis, and; (ii) an other combined net increase of $121 million, including a $115 million increase in provider tax assessments (which increased net revenues and other operating expenses but had no impact on income before income taxes), partially offset by a $20 million decrease in net revenues generated at Desert Springs Hospital Medical Center ("Desert Springs") located in Las Vegas, Nevada, which discontinued all inpatient operations during the first quarter of 2023.

Current wording

Net revenues increased by 10.7%, or $1.136 billion, to $11.714 billion during the nine-month period ended September 30, 2024, as compared to $10.578 billion during the first nine months of 2023. The net increase was primarily attributable to: (i) a $975 million, or 9.4%, increase in net revenues generated from our acute care hospital services and behavioral health services, on a same facility basis, and; (ii) an other combined net increase of $182 million, consisting primarily of a $174 million increase in provider tax assessments (which increased net revenues and other operating expenses but had no impact on income before income taxes), partially offset by a $21 million decrease in net revenues generated at Desert Springs Hospital Medical Center ("Desert Springs") located in Las Vegas, Nevada, which discontinued all inpatient operations during the first quarter of 2023.

Previous wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $279 million, or 64%, to $718 million during the six-month period ended June 30, 2024 as compared to $439 million during the first six months of 2023. The net increase was due to:

Current wording

Income before income taxes (before income attributable to noncontrolling interests) increased by $400 million, or 61%, to $1.060 billion during the nine-month period ended September 30, 2024 as compared to $659 million during the first nine months of 2023. The net increase was due to:

Previous wording

an increase of $153 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Current wording

an increase of $220 million at our acute care facilities, as discussed below in Acute Care Hospital Services;

Previous wording

an increase of $150 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services, and;

Current wording

an increase of $207 million at our behavioral health care facilities, as discussed below in Behavioral Health Care Services, and;

Previous wording

Net income attributable to UHS increased by $217 million, or 65%, to $551 million during the six-month period ended June 30, 2024 as compared to $334 million during the first six months 2023. This increase was attributable to:

Current wording

Net income attributable to UHS increased by $308 million, or 62%, to $810 million during the nine-month period ended September 30, 2024, as compared to $501 million during the first nine months 2023. This increase was attributable to:

Previous wording

a decrease of $12 million due to an unfavorable change in income/loss attributable to noncontrolling interests, and;

Current wording

a decrease of $18 million due to an unfavorable change in income/loss attributable to noncontrolling interests, and;

Previous wording

a decrease of $51 million resulting from an increase in the provision for income taxes resulting primarily from: (i) the increase in the provision for income taxes resulting from the $267 million increase in pre-tax income, partially offset by; (ii) a $12 million decrease in the provision for income taxes during the first six months of 2024 from the impact of ASU 2016-09.

Current wording

a decrease of $74 million resulting from an increase in the provision for income taxes resulting primarily from: (i) the increase in the provision for income taxes resulting from the $382 million increase in pre-tax income, partially offset by; (ii) a $18 million decrease in the provision for income taxes during the first nine months of 2024, as compared to the comparable period of 2023, from the net tax benefit recorded pursuant to ASU 2016-09, net of the impact of executive compensation limitations pursuant to IRC section 162(m).

Previous wording

As a result of unfavorable trends experienced during the past several years, included in our results of operations were increases to our reserves for self-insured professional and general liability claims amounting to approximately $7 million and $14 million during the three and six-month periods ended June 30, 2024, respectively. Approximately $5 million and $10 million of the increase is included in our same facility basis acute care hospital services' results during the three and six-month periods ended June 30, 2024, respectively, and approximately $2 million and $4 million is included in our same facility basis behavioral health services' results during the three and six-month periods ended June 30, 2024, respectively

Current wording

As a result of unfavorable trends experienced during the past several years, included in our results of operations were increases to our reserves for self-insured professional and general liability claims amounting to approximately $30 million and $44 million during the three and nine-month periods ended September 30, 2024, respectively. Approximately $23 million and $33 million of the increase is included in our same facility basis acute care hospital services' results during the three and nine-month periods ended September 30, 2024, respectively, and approximately $7 million and $11 million is included in our same facility basis behavioral health services' results during the three and nine-month periods ended September 30, 2024, respectively.

Previous wording

Our results of operations for the three and six-month periods ended June 30, 2023 included a $20 million increase to our reserves for self-insured professional and general liability claims, of which $14 million is included in our same facility basis acute care hospital services' results during each of the three and six-month periods ended June 30, 2023, and approximately $6 million is included in our same facility basis behavioral health services' results during each of the three and six-month periods ended June 30, 2023.

Current wording

Our results of operations for the comparable periods of 2023 included increases to our reserves for self-insured professional and general liability claims amounting to approximately $5 million and $25 million during the three and nine-month periods ended September 30, 2023, respectively. Approximately $4 million and $18 million of the increase is included in our same facility basis acute care hospital services' results during the three and nine-month periods ended September 30, 2023, respectively, and approximately $1 million and $7 million is included in our same facility basis behavioral health services' results during the three and nine-month periods ended September 30, 2023, respectively.

Previous wording

The following table sets forth certain operating statistics for our acute care hospital services for the three and six-month periods ended June 30, 2024 and 2023.

Current wording

The following table sets forth certain operating statistics for our acute care hospital services for the three and nine-month periods ended September 30, 2024 and 2023.

Previous wording

The following table summarizes the results of operations for our acute care facilities on a Same Facility basis and is used in the discussion below for the three and six-month periods ended June 30, 2024 and 2023 (dollar amounts in thousands):

Current wording

The following table summarizes the results of operations for our acute care facilities on a Same Facility basis and is used in the discussion below for the three and nine-month periods ended September 30, 2024 and 2023 (dollar amounts in thousands):

Previous wording

During the three-month period ended June 30, 2024, as compared to the comparable prior year quarter, net revenues from our acute care hospital services, on a Same Facility basis, increased by $130 million or 6.6%. Income before income taxes (and before income attributable to noncontrolling interests) increased by $83 million, or 62%, amounting to $215 million, or 10.2% of net revenues during the second quarter of 2024, as compared to $132 million, or 6.7% of net revenues during the second quarter of 2023. Included in our Same Facility basis' net revenues and income before income taxes, during the second quarter of 2024, was approximately $38 million of net reimbursements (net of related provider taxes) recorded in connection with the Nevada state directed payment program which was approved by the Centers for Medicare and Medicaid Services in December, 2023. Please see additional disclosure below in Sources of Revenue-Nevada State Directed Payment Program ("SDP").

Current wording

During the three-month period ended September 30, 2024, as compared to the comparable prior year quarter, net revenues from our acute care hospital services, on a Same Facility basis, increased by $182 million or 9.2%. Income before income taxes (and before income attributable to noncontrolling interests) increased by $69 million, or 51%, amounting to $204 million, or 9.5% of net revenues during the third quarter of 2024, as compared to $135 million, or 6.9% of net revenues during the third quarter of 2023. Included in our Same Facility basis' net revenues and income before income taxes, during the third quarter of 2024, was approximately $40 million of net reimbursements (net of related provider taxes) recorded in connection with the Nevada state directed payment program which was approved by the Centers for Medicare and Medicaid Services in December, 2023. Please see additional disclosure below in Sources of Revenue-Nevada State Directed Payment Program ("SDP").

Previous wording

During the three-month period ended June 30, 2024, net revenue per adjusted admission increased by 3.5% while net revenue per adjusted patient day increased 5.3%, as compared to the comparable quarter of 2023. During the three-month period ended June 30, 2024, as compared to the comparable prior year quarter, inpatient admissions to our acute care hospitals increased by 3.5% while adjusted admissions (adjusted for outpatient activity) increased by 3.4%. Patient days and adjusted patient days at these facilities each increased by 1.6% during the three-month period ended June 30, 2024, as compared to the comparable prior year quarter. The average length of inpatient stay at these facilities was 4.8 days and 4.9 days during the three-month periods ended June 30, 2024 and 2023, respectively. The occupancy rate, based on the average available beds at these facilities, was 66% during each of the three-month periods ended June 30, 2024 and 2023.

Current wording

During the three-month period ended September 30, 2024, net revenue per adjusted admission increased by 7.0% while net revenue per adjusted patient day increased 6.5%, as compared to the comparable quarter of 2023. During the three-month period ended September 30, 2024, as compared to the comparable prior year quarter, inpatient admissions to our acute care hospitals increased by 2.1% while adjusted admissions (adjusted for outpatient activity) increased by 1.5%. Patient days at these facilities increased by 2.4% and adjusted patient days increased by 2.0% during the three-month period ended September 30, 2024, as compared to the comparable prior year quarter. The average length of inpatient stay at these facilities was 4.8 days during each of the three-month periods ended September 30, 2024 and 2023. The occupancy rate, based on the average available beds at these facilities, was 66% and 64% during the three-month periods ended September 30, 2024 and 2023, respectively.

Previous wording

On a Same Facility basis during the three-month period ended June 30, 2024, as compared to the comparable quarter of 2023, the increase to salaries, wages and benefits expense moderated to $20 million, or 2.3%. Although our acute care facilities experienced an increase in patient volumes during the second quarter of 2024, as compared to the comparable quarter of 2023, the related incremental staffing cost increase was offset by the following: (i) a reduction in premium pay (overtime paid to employees and external temporary resources' expense) which decreased by approximately $14 million during the second quarter of 2024, as compared to the second quarter of 2023, and; (ii) a restructuring, that occurred in early 2024, at certain of our acute care hospitals that reduced the number of employees in positions that were not directly related to the delivery of patient care. As a percentage of net revenues, salaries, wages and benefits expense decreased to 40.7% during the second quarter of 2024 as compared to 42.4% during the second quarter of 2023.

Current wording

On a Same Facility basis, during the three-month period ended September 30, 2024, as compared to the comparable quarter of 2023, salaries, wages and benefits expense increased by $39 million, or 4.6%. Although our acute care facilities experienced an increase in patient volumes during the third quarter of 2024, as compared to the comparable quarter of 2023, the related incremental staffing cost increase was partially offset by the following: (i) a reduction in premium pay (overtime paid to employees and external temporary resources' expense) which decreased by approximately $8 million, or 12%, during the third quarter of 2024, as compared to the comparable quarter of 2023, and; (ii) a restructuring, that occurred in early 2024, at certain of our acute care hospitals that reduced the number of employees in positions that were not directly related to the delivery of patient care. As a percentage of net revenues, salaries, wages and benefits expense decreased to 41.6% during the third quarter of 2024 as compared to 43.5% during the third quarter of 2023.

Previous wording

During the six-month period ended June 30, 2024, as compared to the comparable prior year period, net revenues from our acute care hospital services, on a Same Facility basis, increased by $315 million or 8.1%. Income before income taxes (and before income attributable to noncontrolling interests) increased by $147 million, or 54%, amounting to $422 million, or 10.0% of net revenues during the first six months of 2024, as compared to $275 million, or 7.1% of net revenues during the comparable period of 2023. Included in our Same Facility basis' net revenues and income before income taxes, during the first six months of 2024, was approximately $76 million of net reimbursements (net of related provider taxes) recorded in connection with the Nevada state directed payment program which was approved by the Centers for Medicare and Medicaid Services in December, 2023. Please see additional disclosure below in Sources of Revenue-Nevada State Directed Payment Program ("SDP").

Current wording

During the nine-month period ended September 30, 2024, as compared to the comparable prior year period, net revenues from our acute care hospital services, on a Same Facility basis, increased by $497 million or 8.5%. Income before income taxes (and before income attributable to noncontrolling interests) increased by $216 million, or 53%, amounting to $627 million, or 9.9% of net revenues during the first nine months of 2024, as compared to $410 million, or 7.0% of net revenues during the comparable period of 2023. Included in our Same Facility basis' net revenues and income before income taxes, during the first nine months of 2024, was approximately $117 million of net reimbursements (net of related provider taxes) recorded in connection with the Nevada state directed payment program which was approved by the Centers for Medicare and Medicaid Services in December, 2023. Please see additional disclosure below in Sources of Revenue-Nevada State Directed Payment Program ("SDP").

Previous wording

During the six-month period ended June 30, 2024, net revenue per adjusted admission increased by 4.0% while net revenue per adjusted patient day increased 5.5%, as compared to the comparable period of 2023. During the six-month period ended June 30, 2024, as compared to the comparable prior year period, inpatient admissions to our acute care hospitals increased by 4.6% while adjusted admissions increased by 3.9%. Patient days and adjusted patient days at these facilities increased by 3.0% and 2.5%, respectively, during the six-month period ended June 30, 2024, as compared to the comparable prior year period. The average length of inpatient stay at these facilities was 4.9 days during each of the six-month periods ended June 30, 2024 and 2023. The occupancy rate, based on the average available beds at these facilities, was 68% and 67% during the six-month periods ended June 30, 2024 and 2023, respectively.

Current wording

During the nine-month period ended September 30, 2024, net revenue per adjusted admission increased by 5.0% while net revenue per adjusted patient day increased by 5.8%, as compared to the comparable period of 2023. During the nine-month period ended September 30, 2024, as compared to the comparable prior year period, inpatient admissions to our acute care hospitals increased by 3.7% while adjusted admissions increased by 3.1%. Patient days and adjusted patient days at these facilities increased by 2.8% and 2.3%, respectively, during the nine-month period ended September 30, 2024, as compared to the comparable prior year period. The average length of inpatient stay at these facilities was 4.9 days during each of the nine-month periods ended September 30, 2024 and 2023. The occupancy rate, based on the average available beds at these facilities, was 68% and 66% during the nine-month periods ended September 30, 2024 and 2023, respectively.

Previous wording

On a Same Facility basis during the six-month period ended June 30, 2024, as compared to the comparable period of 2023, salaries, wages and benefits expense increased by $53 million, or 3.2%. Although our acute care facilities experienced an increase in patient volumes during the first six months of 2024, as compared to the comparable period of 2023, the related incremental staffing cost increase was offset by the following: (i) a reduction in premium pay (overtime paid to employees and external temporary resources' expense) which decreased by approximately $32 million during the first six months of 2024, as compared to the comparable period of 2023, and; (ii) a restructuring, that occurred in early 2024, at certain of our acute care hospitals that reduced the number of employees in positions that were not directly related to the delivery of patient care. As a percentage of net revenues, salaries, wages and benefits expense decreased to 40.8% during the first six months of 2024 as compared to 42.7% during the comparable period of 2023.

Current wording

On a Same Facility basis during the nine-month period ended September 30, 2024, as compared to the comparable period of 2023, salaries, wages and benefits expense increased by $92 million, or 3.7%. Although our acute care facilities experienced an increase in patient volumes during the first nine months of 2024, as compared to the comparable period of 2023, the related incremental staffing cost increase was offset by the following: (i) a reduction in premium pay (overtime paid to employees and external temporary resources' expense) which decreased by approximately $40 million during the first nine months of 2024, as compared to the comparable period of 2023, and; (ii) a restructuring, that occurred in early 2024, at certain of our acute care hospitals that reduced the number of employees in positions that were not directly related to the delivery of patient care. As a percentage of net revenues, salaries, wages and benefits expense decreased to 41.1% during the first nine months of 2024 as compared to 43.0% during the comparable period of 2023.

Previous wording

Other operating expenses increased $96 million, or 9.0%, during the first six months of 2024, as compared to the comparable period of 2023. The increase during the first six months of 2024, as compared to the comparable period of 2023, was due, in part, to the following: (i) a $30 million, or 10.4%, increase in physician-related expenses (as discussed above in Results of Operations - Clinical Staffing, Physician Related Expenses and Effects of Inflation;(ii) a $15 million, or 6.8%, increase in the operating expenses incurred by our commercial health insurer, and; (iii) the expenses related to the increase in patient volumes. As a percentage of net revenues, other operating expenses increased to 27.5% during the first six months of 2024, as compared to 27.2% during the comparable period of 2023.

Current wording

Other operating expenses increased by $151 million, or 9.4%, during the first nine months of 2024, as compared to the comparable period of 2023. Operating expenses incurred by our commercial health insurer, consisting primarily of medical costs, increased by $34 million during the first nine months of 2024, as compared to the comparable period of 2023. In addition, as discussed above in Results of Operations-Adjustments to self-insured professional and general liability reserves, included in the other operating expenses of our acute care hospital services during the first nine months of 2024, as compared to the comparable period of 2023, was a $15 million increase in the adjustments made to our self-insured professional and general liability reserves. Excluding these expense items from each period, other operating expenses increased by $101 million, or 8.1%. Contributing to the increase during the first nine months of 2024, as compared to the comparable period of 2023, was a $37 million, or 8.6%, increase in physician-related expenses, as well as the expenses incurred in connection with the increase in patient volumes. As a percentage of net revenues, other operating expenses increased to 27.6% during the first nine months of 2024, as compared to 27.4% during the comparable period of 2023.

Previous wording

The following table summarizes the results of operations for all our acute care operations during the three and six-month periods ended June 30, 2024 and 2023. These amounts include: (i) our acute care results on a Same Facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including, if applicable, the results of recently acquired/opened facilities and businesses as well as the operating results for Desert Springs which discontinued all inpatient operations during the first quarter of 2023. Dollar amounts below are reflected in thousands.

Current wording

The following table summarizes the results of operations for all our acute care operations during the three and nine-month periods ended September 30, 2024 and 2023. These amounts include: (i) our acute care results on a Same Facility basis, as indicated above; (ii) the impact of provider tax assessments which increased net revenues and other operating expenses but had no impact on income before income taxes, and; (iii) certain other amounts including, if applicable, the results of recently acquired/opened facilities and businesses as well as the operating results for Desert Springs which discontinued all inpatient operations during the first quarter of 2023. Dollar amounts below are reflected in thousands.

Previous wording

During the three-month period ended June 30, 2024, as compared to the comparable prior year quarter, net revenues from our acute care hospital services increased by $170 million, or 8.5%, due to: (i) the $130 million, or 6.6% increase in Same Facility revenues, as discussed above; (ii) a $41 million increase in provider tax assessments (which had no impact on income before income taxes since the amounts offset between net revenues and other operating expenses), and; (iii) $1 million of other combined net decreases.

Current wording

During the three-month period ended September 30, 2024, as compared to the comparable prior year quarter, net revenues from our acute care hospital services increased by $228 million, or 11.3%, due to: (i) the $181 million, or 9.2% increase in Same Facility revenues, as discussed above, and; (ii) a $47 million increase in provider tax assessments (which had no impact on income before income taxes since the amounts offset between net revenues and other operating expenses).

Previous wording

Income before income taxes increased by $81 million, or 62%, to $212 million, or 9.7% of net revenues during the first six months of 2024, as compared to $131 million, or 6.5% of net revenues during the first six months of 2023. The $81 million increase in income before income taxes from our acute care hospital services resulted primarily from the $83 million Same Facility basis' increase in income before income taxes from our acute care hospital services, as discussed above.

Current wording

Income before income taxes increased by $67 million, or 51%, to $199 million, or 8.9% of net revenues during the third quarter of 2024, as compared to $132 million, or 6.6% of net revenues during the comparable quarter of 2023. The increase in income before income taxes from our acute care hospital services resulted primarily from the $69 million Same Facility basis's increase in income before income taxes from our acute care hospital services, as discussed above.

Previous wording

Other operating expenses increased $64 million, or 10.9%, during the second quarter of 2024, as compared to the comparable quarter of 2023. The increase was due to the $23 million above-mentioned increase related to our acute care hospital services, on a Same Facility basis, and the $41 million above-mentioned increase in provider tax assessments.

Current wording

Other operating expenses increased by $102 million, or 17.2%, during the third quarter of 2024, as compared to the comparable quarter of 2023. The increase was due to the $55 million above-mentioned increase related to our acute care hospital services, on a Same Facility basis, and the $47 million above-mentioned increase in provider tax assessments.

Previous wording

During the six-month period ended June 30, 2024, as compared to the comparable prior year period, net revenues from our acute care hospital services increased by $382 million, or 9.6%, due to: (i) the $315 million, or 8.1% increase in Same Facility revenues, as discussed above; (ii) an $88 million increase in provider tax assessments (which had no impact on income before income taxes since the amounts offset between net revenues and other operating expenses), and; (iii) $21 million of other combined net decreases consisting primarily of decreased revenues at Desert Springs.

Current wording

During the nine-month period ended September 30, 2024, as compared to the comparable prior year period, net revenues from our acute care hospital services increased by $610 million, or 10.2%, due to: (i) the $497 million, or 8.5% increase in Same Facility revenues, as discussed above; (ii) a $135 million increase in provider tax assessments (which had no impact on income before income taxes since the amounts offset between net revenues and other operating expenses), and; (iii) $22 million of other combined net decreases consisting primarily of decreased revenues at Desert Springs.