Universal Health Realty Income Trust Reports First Quarter 2004 Financial Results

KING OF PRUSSIA, Pa., April 19 /PRNewswire-FirstCall/ -- Universal Health Realty Income Trust announced today that net income per diluted share for the quarter ended March 31, 2004 was $.43 compared to $.48 for the same period in the prior year. Included in the net income per diluted share for the first quarter ended March 31, 2003 was a gain on the sale of real property of $365,000 or $.03 per diluted share.

Funds from operations (FFO) per diluted share for the quarter ended March 31, 2004 were $.66 compared to $.63 for the same period in the prior year. The first quarter dividend of $.495 per share was paid on March 31, 2004 and represents a dividend payout ratio of 75% of FFO.

Effective March 31, 2004, we adopted Financial Interpretation No. 46R ("FIN 46R"), "Consolidation of Variable Interest Entities," an Interpretation of ARB No. 51. As a result, the March 31, 2004 Balance Sheet has been adjusted to include the assets, liabilities and third-party borrowings which are non-recourse to us and the minority interests of three of our limited liability company ("LLC") investments that meet the criteria of a variable interest entity and where we are the primary beneficiary. As a result of FIN 46R total assets of $39.5 million and borrowings which are non-recourse to us of $22.5 million were recorded on March 31, 2004.

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-four real estate investments in fifteen states.

Funds from operations ("FFO"), 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.

Universal Health Realty Income Trust Statements of Income For the Three Months Ended March 31, 2004 and 2003 (amounts in thousands, except per share amounts) (unaudited) Three Months Ended March 31, 2004 2003 Revenues: Base rental - UHS facilities $3,185 $3,253 Base rental, tenant reimbursements and other - Non-related parties 2,710 2,732 Bonus rental - UHS facilities 1,262 1,208 7,157 7,193 Expenses: Depreciation & amortization 1,146 1,112 Advisory fees to UHS 374 350 Other operating expenses 789 827 2,309 2,289 Income before equity in limited liability companies ("LLCs") and interest expense 4,848 4,904 Equity in income of LLCs (including gain on sale of real property of $365 in 2003) 849 1,386 Interest expense (649) (620) Net income $5,048 $5,670 Net income per share - Basic $0.43 $0.48 Net income per share - Diluted $0.43 $0.48 Weighted average number of shares outstanding - Basic 11,737 11,700 Weighted average number of share equivalents 68 65 Weighted average number of shares and equivalents - Diluted 11,805 11,765 Three Months Ended March 31, 2004 2003 Net income $5,048 $5,670 Plus: Depreciation and amortization expense: Consolidated investments 1,103 1,099 Unconsolidated affiliates 1,610 986 Less: Gain on LLC's sale of real property 0 (365) Funds from operations (FFO) $7,761 $7,390 Funds from operations (FFO) per share - Basic $0.66 $0.63 Funds from operations (FFO) per share - Diluted $0.66 $0.63 Dividend paid per share $0.495 $0.485 Universal Health Realty Income Trust Consolidated Balance Sheets (dollar amounts in thousands) March 31, December 31, Assets: 2004 2003 Real Estate Investments: Buildings and improvements $201,706 $160,079 Accumulated depreciation (58,615) (52,219) 143,091 107,860 Land 24,913 22,929 Net Real Estate Investments 168,004 130,789 Investments in and advances to limited liability companies ("LLCs") 45,012 61,001 Other Assets: Cash 1,106 628 Bonus rent receivable from UHS 1,209 1,093 Rent receivable from non- related parties 421 107 Deferred charges and other assets, net 917 673 Total Assets $216,669 $194,291 Liabilities and Shareholders' Equity: Liabilities: Bank borrowings $37,166 $37,242 Borrowings of consolidated, jointly-owned LLCs, non- recourse to the Trust 22,460 - Accrued interest 520 310 Accrued expenses and other liabilities 1,748 1,826 Fair value of derivative instruments 2,202 2,254 Tenant reserves, escrows, deposits and prepaid rents 672 461 Minority interests 244 - Total Liabilities 65,012 42,093 Shareholders' Equity: Preferred shares of beneficial interest, $.01 par value; 5,000,000 shares authorized; none outstanding - - Common shares, $.01 par value; 95,000,000 shares authorized; issued and outstanding: 2004 - 11,741,184; 2003 - 11,736,395 117 117 Capital in excess of par value 185,834 185,675 Cumulative net income 226,131 221,083 Accumulated other comprehensive loss (2,003) (2,065) Cumulative dividends (258,422) (252,612) Total Shareholders' Equity 151,657 152,198 Total Liabilities and Shareholders' Equity $216,669 $194,291

Universal Health Realty Income Trust

CONTACT: Cheryl K. Ramagano, Vice President & Treasurer, UniversalHealth Realty Income Trust, +1-610-265-0688

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