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Universal Health Realty Income Trust Reports 2009 Third Quarter Financial Results
PR Newswire
Oct 22, 2009
KING OF PRUSSIA, Pa., Oct. 22 /PRNewswire-FirstCall/ -- Universal Health Realty Income Trust (NYSE: UHT) announced today that for the quarter ended September 30, 2009, net income increased 9% to $4.6 million, or $.38 per diluted share, as compared to $4.2 million, or $.35 per diluted share, during the same quarter in the prior year. For the nine-month period ended September 30, 2009, net income increased 12% to $14.0 million, or $1.18 per diluted share, as compared to $12.5 million, or $1.05 per diluted share, during the comparable nine-month period of the prior year.
The increase in net income of $365,000, or $.03 per diluted share, during the third quarter of 2009, as compared to the comparable prior year quarter, was due primarily to an increase in our share of income generated at various properties owned by unconsolidated limited liability companies ("LLCs") in which we hold non-controlling ownership interests as well as an increase in bonus rents earned on the hospital facilities operated by wholly-owned subsidiaries of Universal Health Services, Inc. ("UHS").
The increase in net income of approximately $1.5 million, or $.13 per diluted share, during the nine-month period ended September 30, 2009, as compared to the comparable prior year period, was due primarily to: (i) an increase in our share of income generated at various unconsolidated LLCs; (ii) the effect of a favorable adjustment resulting from the change in estimate to the operating expenses of an LLC, and; (iii) an increase in bonus rents earned on the UHS hospital facilities.
Funds from operations ("FFO") increased 9% to $8.3 million, or $.70 per diluted share, during the third quarter of 2009 as compared to $7.6 million, or $.64 per diluted share, during the comparable quarter of the prior year. For the nine-month period ended September 30, 2009, FFO increased 11% to $24.8 million, or $2.09 per diluted share, as compared to $22.4 million, or $1.88 per diluted share during the comparable nine-month period of the prior year.
The third quarter dividend of $.595 per share was paid on September 30, 2009. At September 30, 2009, our shareholders' equity was $138.1 million and our liabilities for borrowed funds were $84.4 million, including mortgage debt of consolidated entities, which is non-recourse to us, totaling $34.2 million.
The increases in base rentals-UHS facilities, depreciation and amortization, other operating expenses and interest expense during the three and nine months ended September 30, 2009, as compared to the comparable prior year periods, resulted primarily from the operating results of two newly constructed medical office buildings which were completed and opened during the third quarter of 2008 and the first quarter of 2009.
In September, 2009, the Auburn Medical Office Building II located in Auburn, Washington, on the campus of an acute care hospital owned and operated by a wholly-owned subsidiary of UHS, was completed and opened. At September 30, 2009, construction continues on the Texoma Medical Plaza located in Denison, Texas which is scheduled to be completed and opened in late 2009 or early 2010. Texoma Medical Plaza is located on the campus of a replacement acute care hospital currently under construction by a wholly-owned subsidiary of UHS.
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-one 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, 2008 and our Form 10-Q for the quarter ended June 30, 2009. 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 Nine Months Ended September 30, 2009 and 2008
(amounts in thousands, except per share amounts)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Base rental - UHS facilities $3,640 $3,347 $10,737 $9,505
Base rental - Non-related parties 2,566 2,559 7,720 7,399
Bonus rental - UHS facilities 1,022 898 3,167 2,969
Tenant reimbursements and
other - Non-related parties 639 584 2,064 1,669
Tenant reimbursements and other
- UHS facilities 57 38 139 100
-- -- --- ---
7,924 7,426 23,827 21,642
----- ----- ------ ------
Expenses:
Depreciation and amortization 1,623 1,517 4,747 4,372
Advisory fees to UHS 412 408 1,191 1,151
Other operating expenses 1,468 1,211 4,510 3,516
----- ----- ----- -----
3,503 3,136 10,448 9,039
----- ----- ------ -----
Income before equity in income of
unconsolidated limited liability
companies ("LLCs") and interest
expense 4,421 4,290 13,379 12,603
Equity in income of
unconsolidated LLCs 750 567 2,516 1,608
Interest expense, net (600) (651) (1,876) (1,688)
------ ------ ------- -------
Net income $4,571 $4,206 $14,019 $12,523
====== ====== ======= =======
----- ----- ----- -----
Basic earnings per share $0.38 $0.35 $1.18 $1.06
===== ===== ===== =====
----- ----- ----- -----
Diluted earnings per share $0.38 $0.35 $1.18 $1.05
===== ===== ===== =====
Weighted average number of
shares outstanding - Basic 11,884 11,855 11,873 11,849
Weighted average number
of share equivalents 4 37 7 37
- -- - --
Weighted average number of shares
and equivalents outstanding - Diluted 11,888 11,892 11,880 11,886
====== ====== ====== ======
Calculation of Funds From
Operations ("FFO"):
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
Net income $4,571 $4,206 $14,019 $12,523
Plus: Depreciation and
amortization expense:
Consolidated investments 1,598 1,497 4,674 4,314
Unconsolidated affiliates 2,126 1,882 6,151 5,532
----- ----- ----- -----
Funds from operations (FFO) $8,295 $7,585 $24,844 $22,369
====== ====== ======= =======
Funds from operations (FFO)
per share - Basic $0.70 $0.64 $2.09 $1.89
===== ===== ===== =====
Funds from operations (FFO)
per share - Diluted $0.70 $0.64 $2.09 $1.88
===== ===== ===== =====
Dividend paid per share $0.595 $0.585 $1.780 $1.750
====== ====== ====== ======
Universal Health Realty Income Trust
Consolidated Balance Sheets
(dollar amounts in thousands)
(unaudited)
September 30, December 31,
Assets: 2009 2008
------- ---- ----
Real Estate Investments:
Buildings and improvements $206,578 $191,761
Accumulated depreciation (70,829) (66,255)
------- -------
135,749 125,506
Land 19,348 19,348
Construction in progress - 9,795
-- -----
Net Real Estate Investments 155,097 154,649
------- -------
Investments in and advances to
limited liability companies
("LLCs") 60,311 56,462
Other Assets:
Cash and cash equivalents 1,818 618
Base and bonus rent receivable
from UHS 2,030 1,982
Rent receivable - other 741 945
Deferred charges, notes receivable
and intangible and other assets,
net 6,250 6,400
----- -----
Total Assets $226,247 $221,056
======== ========
Liabilities:
------------
Line of credit borrowings $50,200 $39,000
Mortgage notes payable, non-
recourse to us 6,732 6,892
Mortgage, construction and other loans
payable of consolidated LLCs,
non-recourse to us 27,497 25,800
Accrued interest 154 190
Accrued expenses and other
liabilities 2,573 3,196
Tenant reserves, escrows, deposits
and prepaid rents 782 883
--- ---
Total Liabilities 87,938 75,961
------ ------
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: 2009 - 11,899,849
2008 -11,865,919 119 119
Capital in excess of par value 189,652 189,347
Cumulative net income 352,737 338,718
Cumulative dividends (404,414) (383,256)
-------- --------
Total Universal Health Realty
Income Trust Shareholders'
Equity 138,094 144,928
Third-party equity interests 215 167
--- ---
Total Equity 138,309 145,095
------- -------
Total Liabilities and
Equity $226,247 $221,056
======== ========
SOURCE Universal Health Realty Income Trust
Copyright (2009) PR Newswire. All Rights Reserved.
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