Good morning my name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to the Universal Health Services First Quarter 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions]. Thank you. Mr. Filton, you may begin your conference. Steve Filton Thank you and good morning. Alan Miller our CEO is also joining us this morning, welcome to this review of Universal Health Services results for the first quarter ended March 31, 2015. During the conference call, Alan and I will be using words such as believes, expects, anticipates, estimate and similar words that represent forecasts, projections and forward-looking statements. For anyone not familiar with the risks and uncertainties inherent in these forward-looking statements, I recommend a careful reading of the section on risk factors and forward-looking statements and risk factors in our Form 10-K for the year ended December 31, 2014. We'd like to highlight just a couple of developments and business trends before opening the call up to questions. As discussed in our press release last night, the Company reported net income attributable to UHS per diluted share of $1.73 for the quarter. After adjusting depreciation and amortization expense associated with the implementation of electronic health record applications at our acute care hospitals our adjusted net income attributable to UHS per diluted share was $1.78 for the quarter ended March 31, 2015. On a same facility basis in our acute care division revenues increased 12.2% during the first quarter of 2015. The increase resulted primarily from a 5.7% increase in adjusted admissions and a 6.1% increase in revenue per adjusted admission. On a same facility basis operating margins for our…

I guess the market often times has a hard time getting your numbers right on a quarter-to-quarter basis. How would you characterize this quarter versus your internal expectations?

Sure Kevin, at least certainly would share the view that this was a strong quarter. I would note that our internal expectations for the quarter were somewhat higher than the street’s, maybe by $0.07 or $0.08. So we didn't we didn't have quite as much of an internally beat still a very nice beat in the quarter. But it's also part of the reason why we chose not to revise our guidance at this point.

If there's anything that you could point to that kind of, versus your internal budget, where numbers came in a little bit stronger?

Yes, my guess is, directionally our experience was much like the street expectations and model and that clearly the biggest excess over budget or expectations was in the acute division, the 12% plus revenue growth, same-store revenue growth in acute division and it was well in excess of the 7% to 8% that we talked about having guided to in our 2015 guidance, so that was clearly the biggest element of the beat.

Okay. And then I know that you guys usually don't update numbers with Q1, but any thoughts about how reform is coming in versus your expectations? And I will jump off.

Sure. Look I think we've made the point, throughout 2014 that I think the science if you will of identifying the discrete impact of reform was difficult in 2015 I think as we move into the second year of reform implementation it becomes even sort of more blurry from our perspective. I think that we estimated that about 6% to 7% of our acute care EBITDA would come from reform patients either Medicaid expansion patients or commercial exchange patients and I think we still believe that that's a best guess number and I think we ran, at that rate in Q1. One but again I'll I will sort of caveat that I think we believe that it is becoming more and more difficult to precisely identify that impact and I think it will be become even more difficult as time passes.

Your next question will come from the line of Paula Torch with Avondale Partners.

Great, thank you so much for taking the question and congrats on a very nice quarter to start the year. I just wanted to know if you could update us on the percentage of the business that may be related to the economic environment improving and maybe how we should think about those trends for the rest of the year in 2015? And also if you could give us more color on may be your larger markets and what is happening in Texas, Florida and Vegas?

Sure, Paula. I think what we’ve said in 2014 was reattributed something like 35% to 40% of our acute care improvement to a CA related impact, a comparable amount of 35% to 40% to just the economic improvement in our market and then the remaining 15% to 20% to kind of discrete market share improvement et cetera in our individual markets. Again, it strikes me that those percentages are probably still reasonably accurate in 2015. In terms of sort of geographically how the quarter looked, we had a very, very strong quarter in our Las Vegas market. Volumes were very strong in the Las Vegas market, we continue to see a full quarter's worth of benefit of the Medicaid expansion in Nevada which is a Medicaid expansion state obviously. And so just real strong results in the Las Vegas market in Q1.

And do you think some of the strength is sustainable throughout the year, I mean you talked about the 7% to 8% increase, we had a 12%, so would that mean that just given the difficult compares that we might see some softness sort of as we go through or is it too soon to tell?

Well I think part of the reason why, we made no change to guidance is that I think after one quarter e think its generally premature to make changes to the outlook. We certainly feel like the core strength that the both business segments demonstrated in Q1 is largely sustainable. I mean that 12+% same store revenue growth in acute division, particularly as the year progresses and the comparisons become more difficult and the volume comparisons in particular become more difficult, I think it will be difficult to sustain but I think the core directional trends that are very strong in the two businesses we certainly believe should be sustainable.

Okay, thank you for that color. And I just wanted to know, what do you attribute the strength in the revenue or the pricing per adjusted admit to? Is there anything in particular that you could call out for us that happened during the quarter in terms of pricing or payer-mix shift?

I think it's a continuation of some of the trends that we called out in the fourth quarter. We talked about in Q4, very strong surgical volume strength. We saw those same trends in Q1. I highlighted in Q4 the fact that I think for the first time, at least in recent memory our inpatient surgical growth rate was higher than our outpatient, we saw that same dynamic continue into Q1. So that's certainly driving a lot of the sort of acuity element of the revenue improvement and then secondly we just had that continued pair mix improvement. We anticipated that 2015 would benefit from a full year of that enrollment that we saw occur, sort of incrementally throughout 2014 and I think Q1 was a reflection of that. And again in particularly in places like Las Vegas which had a huge Medicaid expansion growth in ’14 and you're seeing that play-out in a full quarter in the first quarter of 2015.

Your next question will come from the line of A.J. Rice with UBS.

First of all, obviously you had a good cash flow quarter as well as operating quarter. But you didn't do too much in the buyback mode. Is that indicative of you are seeing an uptick in deal activity or any thoughts about the buyback going forward?

So the first quarter is a little different for us and I think for most in the sense we spend most of the first quarter in a quiet period so most of the buyback during the first quarter is done in our case under [indiscernible] pre-planned repurchase that we established some price and parameters around and you know sometimes we missed those estimates. So I think I wouldn’t read be relatively modest repurchases in Q1 to be terribly meaningful in any regard. I'll repeat what we have said in the last few quarters since the buyback authorization in Q2 of 2014 was approved by the board and that is we anticipate we're going to generate a significant amount of free cash. We're not really anxious to see our leverage levels go any lower than they were when we established the share buyback. And while we continue to explore opportunities in the M& A space in both of the business segments, I think we feel comfortable we have the room to do -- most size deals as well as share repurchase as well as continuing CapEx at the current levels. So we're really comfortable that we can accomplish all those things and still maintain what in our minds is a comfortable leverage level.

And I might also just ask you, because we get asked a lot about it. A couple of weeks ago you filed another 8-K indicating some additional request for information in the behavioral business. Broadly, I will just throw out on the table, is there anything that can be said about what is happening behind the scenes there? And then I would also throw it out in terms of the operating performance looking at the behavioral business from a high level, doesn't look like those inquiries are having any impact, at least in aggregate on the business. Is that your assessment of it or anything we should be aware of?

So the investigation has been on going now for a little over two years, A.J. we take it very seriously. We've cooperated fully with the government and we have responded to all their requests and continue to respond to any new and incremental requests that they make. But I think your observation is a fair one in the sense that we also continue to operate our business consistent with what we believe are the highest standards and will continue to do so. I think, unfortunately those who follow the industry know that these investigations can be a long process and it certainly has been long already but I also don't believe it's necessarily in its end stages so it may go on for a while and while it does we'll continue to take it seriously and comply with the government and cooperate with the government but at the same time we're going to continue to run the business which we feel delivers high quality, care throughout the portfolio.

Okay, maybe I will slip in a last technical question. The California-provider fee, I think you were not accruing previously the managed care portion, did you accrue anything in this quarter? And what might that be if it ever comes to fruition for you.

So we did not recognize any incremental California UPL drive in the quarter and I think if it were to be approved, it's probably another my recollection , A.J. is another sort of $5 million to $6 million It's not a huge number.

Our next question will come from the line of Ralph Giacobbe with Credit Suisse.

Thank you, good morning. I just wanted to jump to the behavioral side, do you think there was any help from mental health parity in the quarter, any way to discern that? And then I know we talk about this every quarter, but any more visibility or optimism around sort of the length of stay challenges?

So I think on the length of stay issue, we continue to see length of stay declined, although I'll repeat a comment that I made in the fourth quarter and I think it continued into Q1 and that is that at least some of that length of stay decline at least in the last few quarters is self-imposed or self manufactured in the sense that we continue to convert residential beds and residential services to acute beds and acute services. And when we do that we are by definition lowering our length of stay because acute services length of stay is markedly lower than the residential length of stay. So at least some element of the length of stay decline is intentional and quite frankly I think in our minds a positive development in that we're replacing higher revenue beds with lower revenue beds and I think that's partly what you see in the strong revenue growth that same store revenue growth of 6+% which is clearly at the high end of our or own expectations. As far as being able to identify the effects from parity, I think we always believed that would be difficult to do and I think we still believe that, almost well not impossible to do and that’s because when we see a patient who has valid and legitimate insurance, we really don't sort of know the history of that insurance to what degree benefit plan design has really changed et cetera. I think the insurance companies or the government might have a better insight into that. What we are very focused on as a company I think and as an industry is in making sure that the parity rules and regulations including some of the newer ones and some of the clarifications are being properly enforced because I think we believe that there still are plans and that there still is executions of plans that are not compliant and therefore that there is sort of upside as if we can ensure that compliance is met throughout the country.

Okay. That's helpful. And where are you, I guess, in the process of converting beds? Is there a timeline for us to think about in terms of where you are at this point or is this just ongoing?

I don't know that it's sort of a finite sort of process Ralph, where we have X number of beds that we want to convert. I think it's an issue we're always looking at the best and highest use of all of our beds and to the degree that beds become sort of underperforming because rates go down or length of stay is under great pressure, whatever it may be and if the demand is there for another better performing service, we're willing to convert those beds. So I don't know that we would sort of put it in the context of whether we're done with 50% of our conversions, I think for us, it's just sort of an ongoing process and will remain so.

Just SWB came in a lot better, is it anything more than just leveraging the top line or are there specific initiatives there that help? And I guess more importantly on a go-forward basis, can you help us in terms of what a fair range on thinking about that line item as a percentage of revenue, particularly considering your commentary around being tough to sustain the level of topline growth that we have seen in the quarter?

Yes, I mean salaries and wages are obviously the single biggest expense side in both of our divisions and get a lot of attention from the operators. But the nature of the business is such that when you have the really sort of strong revenue growth that we had in Q1, you are likely to see a significant amount of operating leverage, we did see that -- particularly in the acute division in Q1. If that revenue run rate does start to sort of modestly regress as I suggested before that it might from the 12+% we ran in Q1, be a little bit challenging to generate quite as much leverage as we did but our operators are very focused on controlling those salary numbers and delivering in efficient and high quality product. So I think they'll continue to remain focused that way.

Your next question will come from the line of Frank Morgan with RBC Capital Markets.

Good morning. I guess hopping back to that discussion on parity. I know CMS recently put out a proposal about extending mental health parity to manage Medicaid and shield, and I'm just curious how much of an impact that might have? And do you think this may be a step in the direction at least toward striking down the IMD exclusion?

So look Frank, I think you get to the point and I think is most of the people listening know that the IMD exclusion precludes freestanding behavioral facilities from treating or from being paid at least for adult Medicaid patients and that's a big hurdle From our perspective. The recent parity clarifications that you mentioned I think are helpful for the non adult population may be that the Medicaid population at under age twenty one and I think what it says is that Medicare managed care organizations and other like organizations have to comply with parity as to and in our case that under 21 population. So I think it's helpful, not in a sort of game changing way but it's definitely helpful around the ages if you will. We are hopeful and continue to work as an industry for a more rational sort of approach to the IMD exclusion and that means I think we continue to lobby CMS can co-operate with day to gathering activities to try and demonstrate that, lifting the IMD exclusion would be the correct thing to do for a public policy prospect. And we also continue to work on the legislative end of it. I’m working with congress men like working with legislatives like, Congressman Murphy, who has a bill out there that would eliminate the IMD exclusion. So, we are working on a number of fronts. I think that, lifting the IMD exclusion would be a game changer. I think the continued modifications to the parity law and the parity rules are helpful. But the sort of a end goal would be the lifting of the IMD exclusion.

In terms, you mentioned good, broad-based performance across most of your markets, but I guess if there anywhere that you see really still has up-side maybe on a relative base, some markets that are underperforming but still have up-side. And also I think you have got any hospital, at least in the works in Vegas, could you get us comment there. Thanks

I think what you’re seeing and we talked about this for years and I think, during the several years of the recession beginning in 2009 for us as a company, I think has an industry in extending, you know well through 2013, we had this sort of multi-year pressure from the recession from un-compensated care et cetera which put a burden on our volumes, our volume were rather muted during that period and our uncompensated care levels just grew throughout that period. And then beginning in 2014 with the benefits of the Affordable Care Act providing insurance to millions of people, who didn’t have it before as well as the improving economy allowing people to go back to work and get reinsured, all that’s been helpful in our markets I think because the decline was a multi-year decline. We always anticipated that the recovery would be a multi-year recovery and, we are certainly seeing that. I would suggest, either the second or the third year of the recovery in Las Vegas and the second year of recovery in a number of other or other markets. So, I’m not sure that we feel like we can sustain these Q1 levels of growth, I think we are comfortable that, again the course sort of recovery that’s taking place, is something that should last for a number of years.

Your next question will come from the line of Whit Mayo with Robert Baird.

just saying looking back historically, you guys have earned 30% of acute-care EBITDA in the first quarter on some modest site performance for the rest of the year, I think I can easily get near the high end of the range. Is it fair to maybe think about, given the outperformance in the first quarter, that you could be tracking closer to the high end than maybe the midpoint at this time?

Sure I mean, I think although you described it as dangerous Whit. It would be, if you do the math, I think there is a real change in the operating landscape, or unanticipated hurdles either in the core businesses. We should be comfortably, moving towards the high-end of our existing range. I think again just for a, all the reasons that we sided before, we just felt it was, you know not terribly prudent to tinker with the range if high-end and low-end at this point and we I’ll take a, kind of a closer look in, and a more measured look at it , at the end of the second quarter. But certain I think if you do the math, it’s not at all unreasonable to make the observation that we are, headed for the higher-end of the range.

It seems appropriate. And maybe just on cost trends for a second, is there anything new that you are paying attention to an either segment right now and any increase in registry cost with the volume that you're seeing come through the acute care portfolio and you've leveraged supplies maybe a little bit more than I would have thought, given the strength in the surgical performance in the quarter, and the specialty pharma has gotten a lot of attention lately. So I guess I'm just trying to wrap my head around the cost trends and what you are seeing and what initiatives you have underway?

I think, again as a company and as an industry, we really did a significant amount of belt-tightening and kind of real structural reviews of our cost structure during those years of the recession when our revenues were really challenged. And I think that left us in a very good position, beginning in 2014 when the revenue trends reversed themselves and revenue growth began new and earnestly and as a consequence you know we've seen these pretty robust expansion of margins, particularly on the acute side of the business. I think from a cost perspective you know you cited the things that we're certainly concerned about as volumes grow. There is pressure on wages, we see that in higher over-time and higher use of temporary nurses. We see it to some degree and pressures in terms of placing doctors. we see quite a bit of pressure frankly on the behavioral side in finding an adequate number of psychiatrist in all of our facilities and that's put some pressure on use of, locums physicians and that sort of thing. But as I think we step back and look at it, I don't know that there's anything on the sort of the cost landscape that we would describe or think about as a huge discrete threat, rather it's always the challenge that as the business grows you want to just make sure that you remain efficient. And I think our operators have been doing that for the last year and a half or so and they have been doing a very good job of that.

Okay, might sneak one quick one in, and just looking for an update on Cygnet and the updated performance of that asset? Thanks.

The behavioral company that we bought in the U.K. at the end of September was running at a very healthy occupancy levels, probably close to 80% when we bought them. We didn't really believe there was a huge amount of upside opportunity in the existing business but we're happy to say that even on the core business occupancy rates have risen in the six months we've owned them and are getting close to 90% and that obviously is generating better than expected results for that business and at the same time we announced a small acquisition in our first six months of ownership where we've started a development project in our first six months of ownership and we continue to look at a whole series of other opportunities both sort of large and small. So we are couldn't frankly be more pleased with that platform in the six months that we've owned it than we are.

Your next question will come from the line of Joshua Raskin with Barclays.

First question just on what we are seeing in terms of institutional providers and health plan collaborations, and whether that means sort of capitation or even all the way down to provider sponsored health plans. I'm just curious what your perspectives, if you guys have any pilots going on -- I'm thinking more of the 24 acute-care hospitals? What your thoughts are on the future of that?

Josh we certainly share the view that over the long term the reimbursement or payment landscape in acute care will change from a fee for service-- the traditional fee for service reimbursement to some sort of fee for value reimbursement that will include things like bundle payments or accountable care organizations and ultimately get to the end of the continuum which is sort of the capital model on the risk, on the sort of the pure risk model that I think you're referencing. I think we believe that that process is definitely an evolutionary process as it is one that will take multiple years. Honestly, in the vast majority of our reimbursement remains fee for service reimbursement although in some cases like in Medicare there are quality components and element of that but it still largely remains fee for service reimbursement. What we are doing, a number of things both in terms of our relationship with our physicians and really trying to integrate with our physicians particularly on the information technology side to prepare for that move to kind of more of a risk shifting environment with bundle payments and capitation et cetera. We’ve talked I think at some length over the last few quarters about some of the initiatives surrounding the purchase in the middle of last year of health insurance company in Nevada to better prepare us again for that sort of risk taking to allow us in certain selected markets and with certain selected products to go out there and have a provider sponsored product in certain of our markets. So we're trying to move and adjust the right pace in our markets, not trying to get ahead of the curve but also absolutely ensuring that we are nowhere behind the curve in terms of these changes that we know are coming in certainly at least the acute care space.

So, Steve is that pace being driven more by the payers then and you're sort of reacting to or trying to accommodate those changes as opposed to this being a UHS-driven? I'm just trying to think, do you think ultimately this is good or bad?

I don't know that we would have a value judgment about it I mean I think what we would say is it inevitable. I think that payers and I think public policymakers have determined that the ultimately the real way to control costs in the healthcare space is by a shift of risk from the employer and the payer to the consumer and the provider. And so I think we're going there and it's not necessarily I think on the surface a good or bad thing. I think it's a good thing if you can react nimbly and flexibly to the changes and I think we're prepared to do that. So you can be the one to have and put together a large network in our markets and deliver high quality, low cost care efficient care and in the market then I think it will be a good thing and I think we believe we're well positioned to do that.

Okay, and then shifting topics, one last one for me. Just on the behavioral health hospitals, just thing about the M&A pipeline? We haven't seen a ton of activity. I'm thinking more domestically, so forgetting about the UK. Any updates on thoughts and maybe juxtaposing the commentary around lack of buybacks in the first quarter? How we should think about the psych hospital and M&A pipeline?

I think that the behavioral business is characterized at the moment by a lot of strong result, certainly all results are reflective of the underlying strength in this business. So as a result, I think most of the larger and far and away the largest but most of the larger consolidated providers are right now in growth mode as opposed to in a sale mode or in a divesture mode. So we're competing for assets with a number of other providers. I do think there are still are a lot of other providers out there to be acquired. We have talked number of times about the opportunity for the 50% or so half of the days are admissions in this in the behavioral business that are currently serviced within acute care hospital so that's behavioral beds within acute care hospitals, some of the growth for instance of beds that I mentioned in my opening remarks are beds at acute hospitals, non-affiliated acute care hospitals that we have opened in connection with newly, sort of formed partnerships with acute care hospitals. And we still think that a significant opportunity in the future. Now to be fair those opportunities are relatively by its size. We will get thirty beds at a time or fifty or seventy beds at a time. We're not going to get thousands and thousands of dead at a single stroke but the ultimate opportunity I think is enormous and as far and away the largest provider of freestanding Behavioral Services in the country,I think we're very well positioned to take advantage of that.

Your next question will come from the line of Darren Lehrich with Deutsche Bank.

Hi, it’s Dana Nuntin in for Darren. Just a follow-up on an earlier question in the behavioral segment as particularly in the UK, can you provide some more color on bed additions and development there and how you might be working with NHS on getting approvals and finding opportunities to expand beds there?

Well I think that the opportunity in the U.K. broadly is sort of a twofold opportunity. One is that the overall demand or private psychiatric beds is going to continue to grow as the National Health Service continues a trend towards outsourcing, more of that business and deciding that they're going to spend their capital on investments other than behavioral investment and I think leave a lot of the new incremental capital to be invested in the behavioral industry to the private sector. At the same time, the market much like it is here in the U.S. remains fragmented and as a consequence there are you M&A opportunities and we were pursuing those and also doing all the same things we're doing in the U.S. which I think you alluded to in your question where we're running as I said in response to a previous question at very high occupancy rates, so we're looking at adding beds to our existing facilities as we are here in the U.S. we're looking at building Greenfield de novo projects and will continue to do all those things.

Your next question will come from the line of Chris Rigg with Susquehanna Financial.

I just wanted to keep going with the M&A theme here for another minute. I know you guys have talked about in the past the potential for an appetite for sort of larger nonprofit deals and I guess I’d love to get your view, we are seeing very strong results from the publicly traded trends. Are the results we're seeing you from you guys sort of an illusion to what's going on amongst the sort of nonpublic guys? Or do you think the dynamic has actually changed materially because of the ACA? And that is a setback to sort of nearer-term, larger nonprofit deals? Thanks.

Chris I'm not sure that I'm the foremost expert on this subject but I think if you if you look at the not for profit financial data that is out there in any sort of consolidated way, I think that probably the best data comes from the rating agencies. And I think that their data suggests that the not for profit financial results have not improved at the same rate over the last year or year and a half as the full profit result. And so I think you still find a number of not for profit acute hospitals that find themselves financially challenged in a variety of ways. I think also going back to Josh Raskin’s question, I think a lot of not for profit hospitals look at the landscape of changing reimbursement and the challenges that presents and the need to be in a large network and find that they may not be able to check all the boxes and I think they're looking for either partners or they're looking for some sort of sale arrangement that allows them to be sort of the better position to move forward in the future. So you know we're talking with a number not for profits about those sorts of opportunities. I think those sorts of opportunities are going to be there in the next few years. It's difficult to predict how and at what rate that will develop and all we can do is respond to them as they develop but we're certainly ready to do so. We certainly have the financial flexibility to do so.

[Operator Instructions]. We have a question in queue from the line of Ana Gupte with Leerink Partners.

Steve, I think you said a little bit about Las Vegas, and I apologize if I've missed any more color but as you are looking at the various geographies, particularly in your acute-care business, Medicaid expanding states, non-Medicaid expanding states, and then Vegas, which is, as you said, the third year of economic recovery; Texas, which has had a recovery, but is going to a bit of a state of layoffs and so on. How is the payer-mix to the extent to your visibility deferring from one core market versus another?

The trends have been directionally the same over the last year and a half and that is we certainly have seen a decline in uninsured patients and an increase in insured patients mostly in Medicaid and commercial exchange patients, the percentages and the magnitude of that change differs a little bit from market to market and it's a little challenging as I suggested at the outset of the call to kind of discreetly identify to what degree those changes. Those payer mix changes of the given by the ACA and to what degree they're being driven by economic improvement or other factors. But I think our view is as I said doing you know in earlier response that those trends the ACA implementation will continue this year and probably for at least one more year and I think the economic improvement will likely continuum and you know, there are individual market average, which I think are also driving, some of this improvement. And I think, it has been very successful and I think our minds will also those results will be sustainable as well.

Do you have any real-time visibility into Texas just on recognizing your exposure to the oil-heavy economies is a bit more limited than your peers about working Americans in Texas that might want to use more care, do more surgeries or whatever, because they are fearful of layoffs? Is any of that visible at all in the first quarter?

Well, I think is worth knowing that, while we are in a number of markets in Texas. We are really not in any markets, that are heavily dependent on the oil and gas industry, and I don’t think we are therefore directly impacted by any other softness and that sector of the economy, to be fair. While we continue to watch it closely, I don’t think we are seeing any pressure on either volumes or pair mix currently. In our markets in Texas, frankly I think, you know one of our broader concerns is that, If there really is a squeeze on the Texas economy, and it gets, sort of Felton and impact at the state budget level, we are big Medicate provider in Texas both in terms of traditional Medicate re-imbruement as well as some of the special programs like, disproportion share and UPL. So, but that’s sort of thing that we keep, close eye on but to be fair, we are not really seeing any impact from our software Texas economy in our markets as of this moment.

Thanks. My final one. On the other OpEx that showed some deterioration, is that a transient spike and might get better?

A few of the items that I noted previously, in terms of some of the cause pressure thing like temporary. Some of our temporary causes et cetera are recorded on that line but I think for the most part, that line should remain as a percentage revenue at least, fairly static.

Your next question will come from the line of the Gary Lieberman with Wells Fargo.

Two cash flow statement questions. In the release you said you had repurchased $5.6 million worth of shares and in the cash-flow statement it looks like $29 million.

Yes, so the difference I think is stock based compensation, Gary that’s the reconciling item.

Okay. And there's an item for a sale leaseback of real property of about $12.5 million.

Yeah so, we have to pre-standing ED’s in Texas that we sold to universal health realty income trust, at-leased back in the quarter.

Okay. And then maybe just a final question on the behavioral business, the pricing looked particularly strong. Is that a domestic function? Is that being impacted by the UK business at all?

I think, it probably is more impacted by the dynamic that I was talking about before which is the continued shift of beds from residential to acute. So what I was sort of talking about cosmetically that will make our length of stay look lower but it will also clearly drive up our revenue per day. And I think you know that’s your seeing that element in our strong pricing.

Your next question will come from the line of John Ransom with Raymond James.

Hi, good morning. This is just a nit, but your provider-tax programs, how much of that is Texas and how much of that are other states?

We have virtually no provider tax reinforcement in Texas, we do have that upper-payment limit program, but it’s not really a provider text. And I believe John that those upper- payment limit reimbursement amounts are all disclosed in our SEC filings.

But you also have provider-tax programs as well?

We do, and some other states like California and other states and again, I think all those are announcer, very sort of disclosed in a fair man in detail in the SEC filings.

There are no further questions at this time.

We thank everybody for their time and look forward to speaking with everyone again next quarter.