Published:
Universal Health Realty Income Trust Reports 2008 Second Quarter Financial Results
KING OF PRUSSIA, Pa., July 24 /PRNewswire-FirstCall/ -- Universal Health
Realty Income Trust (NYSE: UHT) announced today that for the quarter ended
June 30, 2008, net income was $4.2 million, or $.35 per diluted share, as
compared to $8.0 million, or $.67 per diluted share, during the same quarter
in the prior year. For the six-month period ended June 30, 2008, net income
was $8.3 million, or $.70 per diluted share, as compared to $13.8 million, or
$1.16 per diluted share, during the comparable six-month period of the prior
year.
Funds from operations ("FFO") remained relatively unchanged at $7.5
million and $7.4 million for the three month periods ended June 30, 2008 and
2007, respectively, or $.63 per diluted share during each period. FFO were
$14.8 million, or $1.24 per diluted share, during the six-month period ended
June 30, 2008 as compared to $14.8 million, or $1.25 per diluted share, during
the comparable six-month period of the prior year.
Included in our financial results during the three and six-month periods
of 2008 was: (i) a decrease in our equity in income of unconsolidated LLCs as
a result of increased depreciation expense recorded by certain of our
unconsolidated limited liability companies ("LLC") in connection with newly
constructed medical office buildings ("MOBs") which opened during the fourth
quarter of 2007, and; (ii) depreciation expense recorded on the replacement
assets received from Universal Health Services, Inc. ("UHS") in connection
with the previously disclosed Chalmette Medical Center ("Chalmette") asset
exchange and substitution transaction. As a result, on a combined basis, our
net income was unfavorably impacted by $187,000, or $.02 per diluted share,
during the second quarter of 2008 and by $516,000, or $.04 per diluted share,
during the six-month period ended June 30, 2008. In addition, our equity in
income of unconsolidated LLCs during the three and six-month periods ended
June 30, 2008 were each unfavorably impacted by $329,000, or $.03 per diluted
share, from the recording of the following by two of our unconsolidated LLCs
that own MOBs inLas Vegas, Nevada: (i) reserves established for certain
tenant receivables in connection with the leases which are in default
resulting from the licensure revocation and closure of physician-owned
gastroenterology and endoscopy clinics, and; (ii) higher than anticipated
building maintenance and repairs expense.
Favorably impacting net income during the quarter ended June 30, 2007 was
a combined gain of $3.2 million, or $.27 per diluted share, consisting of: (i)
a gain of $2.3 million, or $.19 per diluted share, realized on the sale of a
medical office building (included in income from discontinued operations),
and; (ii) a gain of $939,000, or $.08 per diluted share, related to the
recovery of replacement real estate assets in connection with the Chalmette
asset exchange and substitution agreement. Favorably impacting net income
during the six-month period ended June 30, 2007 was a combined gain of $4.3
million, or $.36 per diluted share, consisting of: (i) a gain of $2.3 million,
or $.19 per diluted share, realized on the sale of a medical office building
(included in income from discontinued operations); (ii) a gain of $1.7
million, or $.15 per diluted share, related to the recovery of replacement
real estate assets in connection with the Chalmette asset exchange and
substitution agreement, and; (iii) a gain of $252,000, or $.02 per diluted
share, resulting from the sale of real property by an unconsolidated LLC.
As of June 30, 2008, construction continues on three new MOBs, which are
owned by LLCs, as follows: (i) Palmdale Medical Plaza located inPalmdale,
California, which is substantially completed and scheduled to open soon; (ii)
Summerlin Hospital Medical Office Building III located inLas Vegas, Nevada,
which is scheduled to be completed and opened during the fourth quarter of
2008, and; (iii) Deer Valley Medical Office Building III located inPhoenix,
Arizona, which is scheduled to be completed and opened during the second
quarter of 2009.
The second quarter dividend of $.585 per share was paid on June 30, 2008.
At June 30, 2008, our shareholders' equity was $155.2 million and our
liabilities for borrowed funds were $54.7 million, including mortgage debt of
consolidated entities, which is non-recourse to us, totaling $23.3 million.
Universal Health Realty Income Trust, a real estate investment trust,
invests in healthcare and human service related facilities including acute
care hospitals, behavioral healthcare facilities, rehabilitation hospitals,
sub-acute care facilities, surgery centers, childcare centers and medical
office buildings. We have forty-seven real estate investments in fourteen
states.
Funds from operations, is a widely recognized measure of REIT performance.
Although FFO is a non-GAAP financial measure, we believe that information
regarding FFO is helpful to shareholders and potential investors. We compute
FFO in accordance with standards established by the National Association of
Real Estate Investment Trusts ("NAREIT"), which may not be comparable to FFO
reported by other REITs that do not compute FFO in accordance with the NAREIT
definition, or that interpret the NAREIT definition differently than we
interpret the definition. To facilitate a clear understanding of our
historical operating results, FFO should be examined in conjunction with net
income determined in accordance with GAAP. FFO does not represent cash
generated from operating activities in accordance with GAAP and should not be
considered to be an alternative to net income determined in accordance with
GAAP. In addition, FFO should not be used as: (i) an indication of our
financial performance determined in accordance with GAAP; (ii) as an
alternative to cash flow from operating activities determined in accordance
with GAAP; (iii) as a measure of our liquidity; (iv) nor is FFO an indicator
of funds available for our cash needs, including our ability to make cash
distributions to shareholders. A reconciliation of our reported net income to
FFO is shown below.
The matters discussed in this report, as well as the news releases issued
from time to time by us, include certain statements containing the words
"believes", "anticipates", "intends", "expects" and words of similar import,
which constitute "forward-looking statements" within the meaning of Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements or industry results to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Readers should not
place undue reliance on such forward-looking statements which reflect
management's view only as of the date hereof. We undertake no obligation to
revise or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information, future
events or otherwise.
Universal Health Realty Income Trust
Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2008 and 2007
(amounts in thousands, except per share amounts)
(unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Revenues:
Base rental - UHS facilities $3,096 $3,053 $6,158 $6,115
Base rental - Non-related parties 2,443 2,374 4,840 4,709
Bonus rental - UHS facilities 1,063 1,035 2,071 2,072
Tenant reimbursements and other -
Non-related parties 597 564 1,085 1,149
Tenant reimbursements and other -
UHS facilities 38 53 62 77
7,237 7,079 14,216 14,122
Expenses:
Depreciation and amortization 1,449 1,254 2,855 2,509
Advisory fees to UHS 376 356 743 707
Other operating expenses 1,170 1,075 2,305 2,216
2,995 2,685 5,903 5,432
Income before equity in income of
unconsolidated limited liability
companies ("LLCs"), property
damage recovered from UHS
(Chalmette) and interest expense 4,242 4,394 8,313 8,690
Equity in income of unconsolidated
LLCs (including recognition of
gain on sale of real property of
$252 during the six months
ended June 30, 2007) 429 701 1,041 1,648
Replacement property recovered from
UHS - Chalmette - 939 - 1,728
Interest expense (512) (428) (1,037) (795)
Income from continuing operations 4,159 5,606 8,317 11,271
Income from discontinued operations,
net (including gain on sale of real
property of $2,270 during the three
and six months ending June 30, 2007) - 2,365 - 2,511
Net income $4,159 $7,971 $8,317 $13,782
Basic earnings per share:
From continuing operations $0.35 $0.48 $0.70 $0.96
From discontinued operations $0.00 $0.20 $0.00 $0.21
Total basic earnings per share $0.35 $0.68 $0.70 $1.17
Diluted earnings per share:
From continuing operations $0.35 $0.47 $0.70 $0.95
From discontinued operations $0.00 $0.20 $0.00 $0.21
Total diluted earnings per
share $0.35 $0.67 $0.70 $1.16
Weighted average number of shares
outstanding - Basic 11,849 11,807 11,846 11,800
Weighted average number of share
equivalents 36 38 37 75
Weighted average number of shares
and equivalents outstanding -
Diluted 11,885 11,845 11,883 11,875
Calculation of Funds From Operations
("FFO"):
Three Months Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Net income $4,159 $7,971 $8,317 $13,782
Plus: Depreciation and amortization
expense:
Consolidated investments 1,429 1,215 2,817 2,490
Unconsolidated affiliates 1,863 1,440 3,650 2,790
Less: Gain on sale of real property
- discontinued operations - (2,270) - (2,270)
Gain on LLC's sale of real
property - - - (252)
Gain on asset exchange and
substitution agreement with
UHS - Chalmette - (939) - (1,728)
Funds from operations (FFO) $7,451 $7,417 $14,784 $14,812
Funds from operations (FFO)
per share - Basic $0.63 $0.63 $1.25 $1.26
Funds from operations (FFO)
per share - Diluted $0.63 $0.63 $1.24 $1.25
Dividend paid per share $0.585 $0.575 $1.165 $1.145
Universal Health Realty Income Trust
Consolidated Balance Sheets
(dollar amounts in thousands)
(unaudited)
June 30, December 31,
Assets: 2008 2007
Real Estate Investments:
Buildings and improvements $184,414 $178,655
Accumulated depreciation (63,393) (60,627)
121,021 118,028
Land 19,362 18,258
Construction in progress 9,567 7,511
Net Real Estate Investments 149,950 143,797
Investments in and advances to
limited liability companies ("LLCs") 52,447 52,030
Other Assets:
Cash and cash equivalents 1,531 1,131
Bonus rent receivable from UHS 1,063 960
Rent receivable - other 1,604 746
Deferred charges, notes
receivable and intangible and
other assets, net 6,440 1,085
Total Assets $213,035 $199,749
Liabilities and Shareholders' Equity:
Liabilities:
Line of credit borrowings $31,400 $16,800
Mortgage note payable,
non-recourse to us 6,992 3,717
Mortgage and construction loans
payable of consolidated LLCs,
non-recourse to us 16,339 16,100
Accrued interest 111 125
Accrued expenses and other liabilities 1,906 1,874
Tenant reserves, escrows,
deposits and prepaid rents 971 741
Total Liabilities 57,719 39,357
Minority interests 106 87
Shareholders' Equity:
Preferred shares of beneficial interest,
$.01 par value; 5,000,000 shares
authorized; none issued and outstanding - -
Common shares, $.01 par value;
95,000,000 shares authorized; issued
and outstanding: 2008 - 11,854,494;
2007 -11,834,805 119 118
Capital in excess of par value 189,028 188,638
Cumulative net income 335,382 327,065
Cumulative dividends (369,319) (355,516)
Total Shareholders' Equity 155,210 160,305
Total Liabilities and
Shareholders' Equity $213,035 $199,749
SOURCE Universal Health Realty Income Trust
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