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8-K - FORM 8-K - UNIVERSAL HEALTH REALTY INCOME TRUSTd528169d8k.htm

Exhibit 99.1

 

UNIVERSAL HEALTH REALTY INCOME TRUST    Universal Corporate Center
   367 S. Gulph Road
   P.O. Box 61558
   King of Prussia, PA 19406
   (610) 265-0688
FOR IMMEDIATE RELEASE   
CONTACT: Charles Boyle    April 24, 2013
                       Chief Financial Officer   
                       (610) 768-3300   

UNIVERSAL HEALTH REALTY INCOME TRUST

REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS

Consolidated Results of Operations - Three-Month Periods Ended March 31, 2013 and 2012:

KING OF PRUSSIA, PA- Universal Health Realty Income Trust (NYSE:UHT) announced today that for the three-month period ended March 31, 2013, reported net income was $3.4 million, or $.27 per diluted share, as compared to $9.5 million, or $.75 per diluted share, during the first quarter of 2012.

After adjusting the reported results for the three-month periods ended March 31, 2013 and 2012 for the net impact of the items mentioned below, and as reflected on the attached Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), our adjusted net income was $3.5 million, or $.28 per diluted share, during the first quarter of 2013 as compared to $2.7 million, or $.21 per diluted share, during the first quarter of 2012.

As calculated on the attached Supplemental Schedule, our adjusted funds from operations (“AFFO”) increased $320,000, or 4%, to $9.0 million, or $.71 per diluted share, during the first quarter of 2013, as compared to $8.7 million, or $.69 per diluted share, during the first quarter of 2012.

As reflected on the attached Supplemental Schedule, our reported net income during the three-month period ended March 31, 2012 included a $7.4 million net gain on the divestiture of property owned by an unconsolidated LLC. After neutralizing the impact of the gain recorded in last year’s first quarter, as well as the transaction costs recorded during the first quarter of each year, our adjusted net income increased $850,000, or $.07 per diluted share, during the first quarter of 2013 as compared to the comparable quarter of 2012. The increase in adjusted net income during the first quarter of 2013, as compared to the first quarter of 2012, was attributable to: (i) a net combined increase of $444,000 resulting primarily from increased income generated at a number of our properties, and; (ii) an increase of $406,000 resulting from a decrease in depreciation and amortization expense resulting primarily from a decrease in amortization expense recorded on intangible assets.

The $320,000 increase in our AFFO during the first quarter of 2013, as compared to the first quarter of 2012, was attributable to the $850,000 increase in adjusted net income, as discussed above, partially offset by a $530,000 decrease in the add-back of depreciation and amortization expense recorded on our consolidated investments and unconsolidated affiliates. The decrease in the add-back of depreciation and amortization expense resulted primarily from the above-mentioned decrease in amortization expense recorded on intangible assets during the first quarter of 2013 as compared to the first quarter of 2012.


Capital Resources Information:

At March 31, 2013, we had $84.2 million of borrowings outstanding under our $150 million revolving credit agreement and $53.4 million of available borrowing capacity, net of outstanding borrowings and letters of credit.

We filed a Registration Statement with the Securities and Exchange Commission which became effective in November 2012, under which we can offer up to $50 million of our securities pursuant to supplemental prospectuses which we may file from time to time. No offering will be made except pursuant to such supplemental prospectuses.

Dividend Information:

The first quarter dividend of $.62 per share was paid on March 29, 2013.

Completion and Opening of a New Medical Office Building:

On April 1, 2013, the newly constructed Forney Medical Plaza II located in Forney, Texas was completed and opened. This multi-tenant medical office building, consisting of 30,000 rentable square feet, is owned by a limited partnership in which we hold a 95% non-controlling ownership interest.

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, behavioral healthcare facilities, rehabilitation hospitals, sub-acute care facilities, surgery centers, childcare centers and medical office buildings. We have investments in fifty-four properties located in fifteen 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, 2012), 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.

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, and adjusted funds from operations (“AFFO”) and AFFO 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, 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. AFFO was also computed for the three-month periods ended March 31, 2013 and 2012, as reflected on the Supplemental Schedules and discussed herein, since we believe it is helpful to our investors since it adjusts for the effect of a gain on divestiture of property owned by an unconsolidated LLC (during the first quarter of 2012) and transaction costs related to acquisitions. FFO/AFFO do 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/AFFO 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/AFFO 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, 2012. 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.

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Universal Health Realty Income Trust

Consolidated Statements of Income

For the Three Months Ended March 31, 2013 and 2012

(amounts in thousands, except per share amounts)

(unaudited)

 

     Three Months
Ended March 31,
 
     2013     2012  

Revenues:

    

Base rental - UHS facilities

   $ 3,790      $ 3,807   

Base rental - Non-related parties

     7,046        6,681   

Bonus rental - UHS facilities

     1,098        1,116   

Tenant reimbursements and other - Non-related parties

     1,788        1,650   

Tenant reimbursements and other - UHS facilities

     163        97   
  

 

 

   

 

 

 
     13,885        13,351   
  

 

 

   

 

 

 

Expenses:

    

Depreciation and amortization

     4,814        5,220   

Advisory fees to UHS

     571        533   

Other operating expenses

     3,665        3,470   

Transaction costs

     82        520   
  

 

 

   

 

 

 
     9,132        9,743   
  

 

 

   

 

 

 

Income before equity in income of unconsolidated limited liability companies (“LLCs”), interest expense and gain, net

     4,753        3,608   

Equity in income of unconsolidated LLCs

     569        554   

Gain on divestiture of property owned by an unconsolidated LLC, net

     —          7,375   

Interest expense, net

     (1,895     (2,023
  

 

 

   

 

 

 

Net income

   $ 3,427      $ 9,514   
  

 

 

   

 

 

 

Basic earnings per share

   $ 0.27      $ 0.75   
  

 

 

   

 

 

 

Diluted earnings per share

   $ 0.27      $ 0.75   
  

 

 

   

 

 

 

Weighted average number of shares outstanding - Basic

     12,671        12,652   

Weighted average number of share equivalents

     16        5   
  

 

 

   

 

 

 

Weighted average number of shares and equivalents outstanding - Diluted

     12,687        12,657   
  

 

 

   

 

 

 


Universal Health Realty Income Trust

Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”)

For the three months ended March 31, 2013 and 2012

(in thousands, except per share amounts)

(unaudited)

Calculation of Adjusted Net Income

 

     Three months ended      Three months ended  
     March 31, 2013      March 31, 2012  
            Per            Per  
     Amount      Diluted Share      Amount     Diluted Share  

Net income

   $ 3,427       $ 0.27       $ 9,514      $ 0.75   

Adjustments:

          

Less: Gain on divestiture of property owned by an unconsolidated LLC, net

     —           —            (7,375     (0.58

Transaction costs

     82         0.01         520        0.04   
  

 

 

    

 

 

    

 

 

   

 

 

 

Subtotal adjustments to net income

     82         0.01         (6,855     (0.54
  

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted net income

   $ 3,509       $ 0.28       $ 2,659      $ 0.21   
  

 

 

    

 

 

    

 

 

   

 

 

 

Calculation of Adjusted Funds From Operations (“AFFO”)

 

     Three months ended      Three months ended  
     March 31, 2013      March 31, 2012  
            Per            Per  
     Amount      Diluted Share      Amount     Diluted Share  

Net income

   $ 3,427       $ 0.27       $ 9,514      $ 0.75   

Plus: Depreciation and amortization expense:

          

Consolidated investments

     4,757         0.37         5,182        0.41   

Unconsolidated affiliates

     753         0.06         858        0.07   

Less: Gain, net of related transaction costs

          

On divestiture of property owned by an unconsolidated LLC, net

     —           —            (7,375     (0.58
  

 

 

    

 

 

    

 

 

   

 

 

 

Funds From Operations (“FFO”)

     8,937         0.70         8,179      $ 0.65   

Transaction costs

     82         0.01         520        0.04   
  

 

 

    

 

 

    

 

 

   

 

 

 

AFFO

   $ 9,019       $ 0.71       $ 8,699      $ 0.69   
  

 

 

    

 

 

    

 

 

   

 

 

 

Dividend paid per share

      $ 0.620         $ 0.610   
     

 

 

      

 

 

 


Universal Health Realty Income Trust

Consolidated Balance Sheets

(dollar amounts in thousands)

(unaudited)

 

     March 31,
2013
    December 31,
2012
 

Assets:

    

Real Estate Investments:

    

Buildings and improvements

   $ 374,800      $ 374,416   

Accumulated depreciation

     (90,223     (87,088
  

 

 

   

 

 

 
     284,577        287,328   

Land

     27,058        27,058   
  

 

 

   

 

 

 

Net Real Estate Investments

     311,635        314,386   
  

 

 

   

 

 

 

Investments in and advances to limited liability companies (“LLCs”)

     28,907        28,636   

Other Assets:

    

Cash and cash equivalents

     3,321        3,048   

Base and bonus rent receivable from UHS

     2,106        2,041   

Rent receivable - other

     2,987        2,783   

Intangible assets (net of accumulated amortization of $9.8 million and $8.2 million at March 31, 2013 and December 31, 2012, respectively)

     24,667        26,293   

Deferred charges, goodwill and other assets, net

     5,882        5,851   
  

 

 

   

 

 

 

Total Assets

   $ 379,505      $ 383,038   
  

 

 

   

 

 

 

Liabilities:

    

Line of credit borrowings

   $ 84,150      $ 81,750   

Mortgage and other notes payable, non-recourse to us (including net debt premium of
$1.2 million and $1.3 million at March 31, 2013 and December 31, 2012, respectively)

     114,943        116,186   

Accrued interest

     487        539   

Accrued expenses and other liabilities

     4,424        4,920   

Tenant reserves, escrows, deposits and prepaid rents

     2,041        1,898   
  

 

 

   

 

 

 

Total Liabilities

     206,045        205,293   
  

 

 

   

 

 

 

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: 2013 - 12,690,264 2012 -12,688,998

     127        127   

Capital in excess of par value

     214,253        214,094   

Cumulative net income

     470,302        466,875   

Cumulative dividends

     (511,292     (503,425
  

 

 

   

 

 

 

Total Universal Health Realty Income Trust Shareholders’ Equity

     173,390        177,671   

Non-controlling equity interest

     70        74   
  

 

 

   

 

 

 

Total Equity

     173,460        177,745   
  

 

 

   

 

 

 

Total Liabilities and Equity

   $ 379,505      $ 383,038