KING OF PRUSSIA, Pa., July 21 /PRNewswire-FirstCall/ -- Universal Health Realty Income Trust announced today that for the quarter ended June 30, 2010, net income was $4.3 million, or $.35 per diluted share, as compared to $4.8 million, or $.40 per diluted share, during the same quarter in the prior year. For the six-month period ended June 30, 2010, net income was $8.8 million, or $.73 per diluted share, as compared to $9.4 million, or $.80 per diluted share during the comparable six-month period of the prior year.
Funds from operations ("FFO") were $8.3 million, or $.69 per diluted share, during the second quarter of 2010 as compared to $8.5 million, or $.71 per diluted share, during the comparable quarter of the prior year. For the six-month period ended June 30, 2010, FFO were $16.8 million, or $1.39 per diluted share, as compared to $16.5 million, or $1.39 per diluted share during the comparable six-month period of the prior year.
During the three and six-month periods ended June 30, 2009, our net income included approximately $300,000, or $.02 per diluted share, and our FFO included approximately $400,000, or $.03 per diluted share, in connection with the following related to certain unconsolidated limited liability companies ("LLCs"): (i) the effect of a favorable adjustment resulting from the change in estimate to the accrued operating expenses of an LLC, partially offset by; (ii) the operating losses sustained during the second quarter of 2009 at an LLC that owns a medical office building that was completed and opened in April of 2009.
The second quarter dividend of $.605 per share was paid on June 30, 2010. At June 30, 2010, our shareholders' equity was $140.0 million and our liabilities for borrowed funds were $82.4 million, including mortgage debt of consolidated entities, which is non-recourse to us, totaling $23.6 million.
Summerlin Medical Office Building III, which is located in Las Vegas, Nevada on the campus of Summerlin Hospital Medical Center (a majority-owned subsidiary of Universal Health Services, Inc.), was completed and opened during the first quarter of 2009. In connection with this medical office building ("MOB"), which is owned by a LLC in which we hold a majority, non-controlling ownership interest, Summerlin Hospital Medical Center committed to a master lease agreement for a specified portion of the space. As a result of this master lease agreement, the LLC was considered a variable interest entity. Since we were the primary beneficiary, the financial results of this MOB were included in our financial statements on a consolidated basis prior to January 1, 2010. During the first quarter of 2010, the master lease threshold was met and, as a result, this MOB is accounted for as an unconsolidated LLC under the equity method beginning on January 1, 2010. During the three-month period ended June 30, 2009, this property generated approximately $345,000 of revenue, $135,000 of other operating expenses and $160,000 of combined interest and depreciation and amortization expense. During the six-month period ended June 30, 2009, this property generated approximately $500,000 of revenue, $200,000 of other operating expenses and $220,000 of combined interest and depreciation and amortization expense There was no material impact on our net income as a result of the deconsolidation of this LLC.
Property Development Activity:
As of June 30, 2010, construction continued on the BRB Medical Office Building located in Kingwood, Texas. This MOB, which is owned by an LLC in which we hold a majority, non-controlling ownership interest, is scheduled to be opened in October of 2010.
General Information, Forward-Looking Statements and Non-GAAP Financial Measures:
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 fifty-two real estate investments in fifteen states.
Funds from operations is a widely recognized measure of performance for Real Estate Investment Trusts ("REITs"). We believe that funds from operations and funds from operations per diluted share, which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. 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. 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) an alternative to cash flow from operating activities determined in accordance with GAAP; (iii) a measure of our liquidity, or; (iv) 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.
To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2009 and our Form 10-Q for the quarter ended March 31, 2010. Since the items included or excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be alternatives to net income as a measure of our operating performance or profitability. Since these measures, as presented, are not determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable to other similarly titled measures of other companies. Investors are encouraged to use GAAP measures when evaluating our financial performance.
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, 2010 and 2009 (amounts in thousands, except per share amounts) (unaudited) Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 2010 2009 2010 2009 ---- ---- ---- ---- Revenues: Base rental -UHS facilities $3,292 $3,637 $6,584 $7,097 Base rental - Non- related parties 2,573 2,578 5,183 5,154 Bonus rental -UHS facilities 1,023 1,050 2,117 2,145 Tenant reimbursements and other - Non- related parties 543 711 1,159 1,425 Tenant reimbursements and other -UHS facilities 42 47 74 82 --- --- --- --- 7,473 8,023 15,117 15,903 ----- ----- ------ ------ Expenses: Depreciation and amortization 1,610 1,586 3,179 3,124 Advisory fees to UHS 466 389 903 779 Other operating expenses 1,434 1,536 2,786 3,042 ----- ----- ----- ----- 3,510 3,511 6,868 6,945 ----- ----- ----- ----- Income before equity in income of unconsolidated limited liability companies ("LLCs") and interest expense 3,963 4,512 8,249 8,958 Equity in income of unconsolidated LLCs 833 959 1,569 1,766 Interest expense, net (522) (669) (1,017) (1,276) Net income $4,274 $4,802 $8,801 $9,448 ====== ====== ====== ====== Basic earnings per share $0.35 $0.40 $0.73 $0.80 ===== ===== ===== ===== Diluted earnings per share $0.35 $0.40 $0.73 $0.80 ===== ===== ===== ===== Weighted average number of shares outstanding -Basic 12,111 11,876 12,094 11,868 Weighted average number of share equivalents 2 4 2 8 --- --- --- --- Weighted average number of shares and equivalents outstanding -Diluted 12,113 11,880 12,096 11,876 ====== ====== ====== ====== Calculation of Funds From Operations ("FFO"): Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 2010 2009 2010 2009 ---- ---- ---- ---- Net income $4,274 $4,802 $8,801 $9,448 Plus: Depreciation and amortization expense: Consolidated investments 1,573 1,561 3,107 3,076 Unconsolidated affiliates 2,451 2,095 4,882 4,025 ----- ----- ----- ----- Funds from operations (FFO) $8,298 $8,458 $16,790 $16,549 ====== ====== ======= ======= Funds from operations (FFO) per share - Basic $0.69 $0.71 $1.39 $1.39 ===== ===== ===== ===== Funds from operations (FFO) per share - Diluted $0.69 $0.71 $1.39 $1.39 ===== ===== ===== ===== Dividend paid per share $0.605 $0.595 $1.205 $1.185 ====== ====== ====== ====== Universal Health Realty Income Trust Consolidated Balance Sheets (dollar amounts in thousands, except share amounts) (unaudited) December June 30, 31, Assets: 2010 2009 ------- ---- ---- Real Estate Investments: Buildings and improvements $195,460 $207,597 Accumulated depreciation (75,175) (72,405) ------- ------- 120,285 135,192 Land 19,348 19,348 ------ ------ Net Real Estate Investments 139,633 154,540 ------- ------- Investments in and advances to limited liability companies ("LLCs") 75,499 61,934 Other Assets: Cash and cash equivalents 1,246 3,038 Base and bonus rent receivable from UHS 2,031 2,039 Rent receivable - other 852 980 Deferred charges, notes receivable and intangible and other assets, net 6,447 6,294 ----- ----- Total Assets $225,708 $228,825 ======== ======== Liabilities: ------------ Line of credit borrowings $58,800 $48,800 Mortgage notes payable, non-recourse to us 8,478 6,677 Mortgage, construction and other loans payable of consolidated LLCs, non-recourse to us 15,105 28,790 Accrued interest 146 142 Accrued expenses and other liabilities 2,038 2,251 Tenant reserves, escrows, deposits and prepaid rents 991 981 --- --- Total Liabilities 85,558 87,641 ------ ------ 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: 2010 -12,253,756 2009 -12,089,474 123 121 Capital in excess of par value 200,066 195,209 Cumulative net income 366,095 357,294 Cumulative dividends (426,329) (411,662) -------- -------- Total Universal Health Realty Income Trust Shareholders' Equity 139,955 140,962 Third-party equity interests 195 222 --- --- Total Equity 140,150 141,184 ------- ------- Total Liabilities and Equity $225,708 $228,825 ======== ========
Universal Health Realty Income Trust
CONTACT: Charles Boyle, Chief Financial Officer, Universal Health Realty
Income Trust, +1-610-768-3300
