UPMC’s Strong Financial Results For First-Half Fiscal Year 2010 Allow Continued Delivery of Outstanding Patient Care and Reinvestment in the Future of its Employees and the Region
- Operating revenues continue at a 10% annual growth rate; operating income up 13% compared to same period year ago.
- Operating EBIDA – or cash flow income – of $326 million is on target to exceed $600 million for fiscal year 2010.
- $3 billion diversified investment reserve portfolio returned 11.8 % for the first half.
- UPMC continues to grow and invest in the region, with more than $200 million in capital expenditures and investments in new businesses. Another $125 million invested to fully protect its employees’ pensions.
PITTSBURGH, Feb. 5 – In the midst of a challenging economic environment, UPMC’s strong financial results for the first half of fiscal year 2010 allow the global health enterprise to continue to deliver excellent patient care. These results also allow UPMC to make more than $200 million in capital expenditures and new business investments for new technology, construction and renovations, creating additional jobs and new programs for the residents of western Pennsylvania. A $125 million pension contribution reflects UPMC’s commitment to protect the retirement assets of its employees.
UPMC’s operating revenues increased by $216 million to more than $4 billion for the first half (July 1 through Dec. 31, 2009). This coincides with a compound annual growth rate of 10 percent over the last five years and 47 percent growth since 2006. UPMC’s operating income for the half was $130 million, up 13 percent from this time last year.
UPMC’s earnings before interest, depreciation and amortization (EBIDA) – a key measure of financial performance and the ability to generate the necessary resources for reinvestment – were $326 million for this half, and are on target to exceed $600 million for fiscal year 2010.
“As forecasted, the unstable global economy has continued to present challenges for the health care industry. The robust financial results for the first half of the fiscal year reflect UPMC’s strong management and efficient delivery of high-quality health care,” said Robert A. DeMichiei, UPMC senior vice president and chief financial officer. “UPMC’s financial strength allows it to continue fulfilling its core mission of providing the best patient care available today while reinvesting in the region and our employees.”
UPMC’s key operating metrics were up: Enrollment in UPMC’s insurance services grew 8 percent to more than 1.4 million members; outpatient activity grew 5 percent; physician services activity increased 11 percent; and the number of employed physicians grew slightly to 2,728. Total admissions and observations for the first half were up 0.6 percent compared to the same period year-ago.
UPMC’s diversified investment reserve portfolio stands at $3 billion, an 11.8 percent return for the first half. “While in the past six months UPMC’s investment portfolio has recovered much of the value it lost in fiscal year 2009, it’s important to keep a long-term perspective,” said C. Talbot Heppenstall, Jr., UPMC senior vice president and treasurer. “Its value changes with market fluctuations, and with UPMC’s prudent fiscal management, we have not needed to draw on these long-term reserves to fund day-to-day operations, capital expenditures or employee pension investments.”
UPMC is an $8 billion integrated global health enterprise headquartered in Pittsburgh, Pennsylvania, and is one of the leading nonprofit health systems in the United States. As western Pennsylvania’s largest employer, with 50,000 employees, UPMC is transforming the economy of the region into one based on medicine, research and technology. By integrating 20 hospitals, 400 doctors’ offices and outpatient sites, long-term care facilities and a major health insurance services division, and in collaboration with its academic partner, the University of Pittsburgh Schools of the Health Sciences, UPMC has advanced the quality and efficiency of health care and developed internationally renowned programs in transplantation, cancer, neurosurgery, psychiatry, orthopaedics and sports medicine, among others. UPMC is commercializing its medical and technological expertise by nurturing new companies, developing strategic business relationships with some of the world’s leading multinational corporations, and expanding into international markets, including Italy, Ireland, the United Kingdom, Cyprus, Qatar and Japan.