KING OF PRUSSIA, Pa.,
April 26, 2019 /PRNewswire/
-- Universal Health Realty Income Trust (NYSE: UHT) announced
today that for the three-month period ended March 31, 2019,
reported net income was $4.2 million,
or $.31 per diluted share, as
compared to $9.6 million, or
$.70 per diluted share, during the
first quarter of 2018.
As reflected on the attached Schedule of Non-GAAP Supplemental
Information ("Supplemental Schedule"), our financial results for
the three-month period ended March 31,
2019 included a gain of $250,000, or $.02
per diluted share, related to the sale of a parcel of land located
at one of our buildings. Our financial results for the three-month
period ended March 31, 2018 included
$4.5 million of hurricane insurance
recoveries in excess of damaged property write-downs received in
connection with damage sustained from Hurricane Harvey which
occurred in August, 2017. Excluding the impact of these items from
each respective quarter, and as calculated on the Supplemental
Schedule, our adjusted net income was $4.0
million, or $.29 per diluted
share during the first quarter of 2019, as compared to $5.1 million, or $.37 per diluted share during the first quarter
of 2018.
Our net income and adjusted net income for the three months
ended March 31, 2019 was unfavorably
impacted by $355,000, or $.03 per diluted share, resulting from net asset
write offs recorded in connection with early lease terminations or
relocations that occurred during the first quarter of 2019 at three
of our multi-tenant medical office buildings. Our net income and
adjusted net income for the three months ended March 31, 2018 were favorably impacted by
$968,000, or $.07 per diluted share, as a result of the
business interruption insurance recovery proceeds received during
the first quarter of 2018. Included in this amount, which covered
the period of late August, 2017 through March, 2018 (after
satisfaction of the applicable deductibles), was approximately
$500,000, or $.04 per diluted share, related to the period of
August, 2017 through December 31,
2017.
As calculated on the Supplemental Schedule, our funds from
operations ("FFO"), were $11.0
million, or $.80 per diluted
share during the first quarter of 2019, as compared to $11.5 million, or $.84 per diluted share during the first quarter
of 2018. Our FFO for the three months ended March 31, 2018 were favorably impacted by the
$968,000, or $.07 per diluted share, resulting from the
above-mentioned business interruption insurance recovery
proceeds.
Dividend Information:
The first quarter dividend of $.675 per share, or $9.3
million in the aggregate, was declared on March 6, 2019 and paid on March 29, 2019.
Capital Resources Information:
At March 31, 2019, we had
$200.3 million of borrowings
outstanding pursuant to the terms of our $300 million credit agreement and $99.7 million of available borrowing capacity.
The credit agreement has a scheduled maturity date of March, 2022,
however, we have the option to extend the maturity date for up to
two additional six-month periods.
Adoption of ASU 2016-02, "Leases (Topic 842): Amendments to
the FASB Accounting Standards Codification":
Effective January 1, 2019, we
adopted ASU 2016-02 which requires lessees to, among other things,
recognize right-of-use assets and lease liabilities on the balance
sheet. As a result of our adoption of ASU 2016-02, in connection
with ground leases where we are the lessee, our consolidated
balance sheet as of March 31, 2019
includes right-of-use land assets ($8.8
million) and ground lease liabilities ($8.8 million). Prior period financial
statements were not adjusted for the effects of this new
standard.
General Information, Forward-Looking Statements and Risk
Factors 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, rehabilitation hospitals, sub-acute
care facilities, medical/office buildings, free-standing emergency
departments and childcare centers. We have investments in
sixty-nine properties located in twenty states.
This press release contains forward-looking statements based on
current management expectations. Numerous factors, including those
disclosed herein, those related to healthcare and healthcare real
estate industry trends and those detailed in our filings with the
Securities and Exchange Commission (as set forth in
Item 1A - Risk Factors and in
Item 7-Forward-Looking Statements and Risk Factors
in our Form 10-K for the year ended
December 31, 2018) may cause the results to differ materially
from those anticipated in the forward-looking statements. Many of
the factors that will determine our future results are beyond our
capability to control or predict. These statements are subject to
risks and uncertainties and therefore actual results may differ
materially. 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.
We believe that adjusted net income and adjusted net income per
diluted share (as reflected on the attached Supplemental
Schedules), 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. In
addition, we believe that, when applicable, comparing and
discussing our financial results based on these measures, as
calculated, is helpful to our investors since it neutralizes the
effect in each year of material items that are nonrecurring or
non-operational in nature including items such as, but not limited
to, gains on transactions and hurricane proceeds in excess of
damaged property write-downs.
Funds from operations ("FFO") is a widely recognized measure of
performance for Real Estate Investment Trusts ("REITs"). We believe
that FFO and FFO per diluted share, which are non-GAAP financial
measures, are helpful to our investors as measures of our operating
performance. We compute FFO, as reflected on the attached
Supplemental Schedules, 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 adjusts for the effects of
gains, such as gains on transactions and hurricane recovery
proceeds in excess of damaged property write-downs during the
periods presented. 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 reflected on the Supplemental
Schedules included 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, 2018. 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.
Universal Health
Realty Income Trust
|
|
Consolidated
Statements of Income
|
|
For the Three Months
Ended March 31, 2019 and 2018
|
|
(amounts in
thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2019
|
|
|
2018
|
|
Revenues:
|
|
|
|
|
|
|
|
Lease revenue -
UHS facilities (a.)
|
$
|
5,793
|
|
|
$
|
5,735
|
|
Lease revenue-
Non-related parties
|
|
12,731
|
|
|
|
12,507
|
|
Other revenue -
UHS facilities
|
|
213
|
|
|
|
62
|
|
Other revenue -
Non-related parties
|
|
375
|
|
|
|
235
|
|
|
|
19,112
|
|
|
|
18,539
|
|
Expenses:
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
6,708
|
|
|
|
6,287
|
|
Advisory fees
to UHS
|
|
970
|
|
|
|
904
|
|
Other operating
expenses
|
|
5,210
|
|
|
|
5,208
|
|
|
|
12,888
|
|
|
|
12,399
|
|
Income before equity
in income of unconsolidated limited liability companies
("LLCs"), interest expense, hurricane insurance recovery
proceeds and gain
|
|
6,224
|
|
|
|
6,140
|
|
Equity in
income of unconsolidated LLCs
|
|
430
|
|
|
|
429
|
|
Hurricane
insurance recovery proceeds in excess of damaged
property
write-downs
|
|
-
|
|
|
|
4,535
|
|
Hurricane
business interruption insurance recovery proceeds
|
|
-
|
|
|
|
968
|
|
Gain on sale of
land
|
|
250
|
|
|
|
-
|
|
Interest expense,
net
|
|
(2,692)
|
|
|
|
(2,468)
|
|
Net income
|
$
|
4,212
|
|
|
$
|
9,604
|
|
Basic and diluted
earnings per share
|
$
|
0.31
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding - Basic and Diluted
|
|
13,728
|
|
|
|
13,718
|
|
|
|
|
|
|
|
|
|
(a.) Includes bonus
rental on UHS hospital facilities of $1,394 and $1,326 for the
three-month periods ended March 31, 2019 and 2018,
respectively.
|
|
|
|
|
|
|
|
Universal Health
Realty Income Trust
|
Schedule of Non-GAAP
Supplemental Information ("Supplemental Schedule")
|
For the Three Months
Ended March 31, 2019 and 2018
|
(in thousands,
except per share amounts)
|
(unaudited)
|
|
Calculation of
Adjusted Net Income
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
Amount
|
|
Per
Diluted Share
|
|
Amount
|
|
Per
Diluted Share
|
|
Net income
|
$
|
4,212
|
|
$
|
0.31
|
|
$
|
9,604
|
|
$
|
0.70
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Hurricane
insurance recoveries
|
|
-
|
|
|
-
|
|
|
(4,535)
|
|
|
(0.33)
|
|
Gain on sale of land
|
|
(250)
|
|
|
(0.02)
|
|
|
-
|
|
|
-
|
|
Subtotal adjustments
to net income
|
|
(250)
|
|
|
(0.02)
|
|
|
(4,535)
|
|
|
(0.33)
|
|
Adjusted net
income
|
$
|
3,962
|
|
$
|
0.29
|
|
$
|
5,069
|
|
$
|
0.37
|
|
Calculation of
Funds From Operations ("FFO")
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2019
|
|
|
March 31,
2018
|
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
Net income
|
|
$
|
4,212
|
|
|
$
|
0.31
|
|
|
$
|
9,604
|
|
|
$
|
0.70
|
|
Plus: Depreciation and
amortization expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
investments
|
|
|
6,708
|
|
|
|
0.49
|
|
|
|
6,151
|
|
|
|
0.45
|
|
Unconsolidated
affiliates
|
|
|
283
|
|
|
|
0.02
|
|
|
|
271
|
|
|
|
0.02
|
|
Less: Hurricane
insurance recovery proceeds in excess of
damaged property write-downs
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,535)
|
|
|
|
(0.33)
|
|
Gain on sale of land
|
|
|
(250)
|
|
|
|
(0.02)
|
|
|
|
-
|
|
|
|
-
|
|
FFO
|
|
$
|
10,953
|
|
|
$
|
0.80
|
|
|
$
|
11,491
|
|
|
$
|
0.84
|
|
Dividend paid per
share
|
|
|
|
|
|
$
|
0.675
|
|
|
|
|
|
|
$
|
0.665
|
|
Universal Health
Realty Income Trust
|
Consolidated Balance
Sheets
|
(dollar amounts in
thousands, except share data)
|
(unaudited)
|
|
|
|
March
31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Assets:
|
|
|
|
|
|
|
|
|
Real Estate
Investments:
|
|
|
|
|
|
|
|
|
Buildings and
improvements and construction in progress
|
|
$
|
558,414
|
|
|
$
|
557,650
|
|
Accumulated
depreciation
|
|
|
(178,481)
|
|
|
|
(173,316)
|
|
|
|
|
379,933
|
|
|
|
384,334
|
|
Land
|
|
|
53,396
|
|
|
|
53,396
|
|
Net Real Estate Investments
|
|
|
433,329
|
|
|
|
437,730
|
|
Investments in limited
liability companies ("LLCs")
|
|
|
4,944
|
|
|
|
5,019
|
|
Other
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
6,032
|
|
|
|
5,036
|
|
Base and bonus rent
and other receivables from UHS
|
|
|
4,145
|
|
|
|
2,739
|
|
Rent receivable -
other
|
|
|
7,031
|
|
|
|
7,469
|
|
Intangible assets (net
of accumulated amortization of $25.4 million and
$27.6 million,
respectively)
|
|
|
16,565
|
|
|
|
17,407
|
|
Right-of-use land
assets
|
|
|
8,848
|
|
|
|
-
|
|
Deferred charges and
other assets, net
|
|
|
8,156
|
|
|
|
8,356
|
|
Total Assets
|
|
$
|
489,050
|
|
|
$
|
483,756
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Line of credit
borrowings
|
|
$
|
200,300
|
|
|
$
|
196,400
|
|
Mortgage notes
payable, non-recourse to us, net
|
|
|
64,456
|
|
|
|
64,881
|
|
Accrued
interest
|
|
|
488
|
|
|
|
450
|
|
Accrued expenses and
other liabilities
|
|
|
10,164
|
|
|
|
11,765
|
|
Ground lease
liabilities
|
|
|
8,848
|
|
|
|
-
|
|
Tenant reserves,
deposits and deferred and prepaid rents
|
|
|
11,167
|
|
|
|
11,650
|
|
Total Liabilities
|
|
|
295,423
|
|
|
|
285,146
|
|
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: 2019 -
13,747,567;
2018 -
13,746,803
|
|
|
137
|
|
|
|
137
|
|
Capital in excess of
par value
|
|
|
266,247
|
|
|
|
266,031
|
|
Cumulative net
income
|
|
|
646,528
|
|
|
|
642,316
|
|
Cumulative
dividends
|
|
|
(719,285)
|
|
|
|
(710,006)
|
|
Accumulated other
comprehensive income
|
|
|
-
|
|
|
|
132
|
|
Total Equity
|
|
|
193,627
|
|
|
|
198,610
|
|
Total Liabilities and Equity
|
|
$
|
489,050
|
|
|
$
|
483,756
|
|
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SOURCE Universal Health Realty Income Trust