KING OF PRUSSIA, Pa., Feb. 2 /PRNewswire-FirstCall/ -- Universal Health Realty Income Trust announced today that for the quarter ended December 31, 2004, net income was $6.7 million or $.56 per diluted share as compared to $8.1 million or $.69 per diluted share for the same quarter in the prior year. Included in net income and earnings per diluted share for the three months ended December 31, 2004, was a gain of $833,000 or $.07 per diluted share resulting from the sale of the Virtue Street Pavilion to the former lessee. Included in net income and earnings per diluted share for the three months ended December 31, 2003, were gains on sales of real property by unconsolidated limited liability companies (“LLCs”) amounting to $2.5 million or $.21 per diluted share. Funds from operations (“FFO”) were $7.9 million and FFO per diluted share were $.67 during each of the three months ended December 31, 2004 and 2003. The fourth quarter dividend of $.505 per share was paid on December 31, 2004 and represents a dividend payout of 75% of FFO.
For the twelve-month period ended December 31, 2004, net income was $23.7 million or $2.00 per diluted share as compared to $24.4 million or $2.07 per diluted share during the prior year. Included in net income and earnings per diluted share during the twelve-month period ended December 31, 2004, were gains on sales of real property of $1.8 million or $.16 per diluted share. Included in net income and earnings per diluted share during the twelve-month period ended December 31, 2003, were gains on sales of real property of $2.8 million or $.24 per diluted share. For the twelve-month period ended December 31, 2004, FFO increased 3% to $31.2 million or $2.64 per diluted share as compared to $30.1 million or $2.56 per diluted share during the prior year.
At December 31, 2004, our shareholders’ equity was $154.1 million and our liabilities for borrowed funds were $46.2 million, including mortgage debt of consolidated entities, which is non-recourse to us, totaling $26.2 million.
Effective March 31, 2004, we adopted Financial Interpretation No. 46R (“FIN 46R”), “Consolidation of Variable Interest Entities”, an Interpretation of ARB No. 51. Consequently, the December 31, 2004 Consolidated Balance Sheet includes the: (i) assets; (ii) liabilities; (iii) third-party borrowings, which are non-recourse to us, and; (iv) minority interests, of three of our LLC investments that meet the criteria of a variable interest entity and where we are deemed to be the primary beneficiary. As a result of FIN 46R, our Consolidated Balance Sheet, as of December 31, 2004, includes assets of $39.0 million and borrowings, which are non-recourse to us, of $22.1 million. Also as a consequence of FIN 46R, beginning on April 1, 2004, we began consolidating the results of operations of these LLC investments on our Consolidated Statements of Income. Accordingly, for the three month period ended December 31, 2004, our Consolidated Statements of Income included $1.6 million of revenue, $287,000 of depreciation and amortization expense, $563,000 of other operating expenses and $429,000 of interest expense recorded in connection with the consolidation of these LLCs. During the twelve-month period ended December 31, 2004, our Consolidated Statements of Income included $4.8 million of revenue, $873,000 of depreciation and amortization expense, $1.7 million of other operating expenses and $1.3 million of interest expense recorded in connection with the consolidation of these LLCs. There was no impact on our net income as a result of the consolidation of these LLCs.
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-two real estate investments in fifteen states.
Funds from operations, 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. A reconciliation of our reported net income to FFO is shown below.
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 Twelve Months Ended December 31, 2004 and 2003 (amounts in thousands, except per share amounts) (unaudited) Three Months Twelve Months Ended December 31, Ended December 31, 2004 2003 2004 2003 Revenues: Base rental - UHS facilities $3,424 $2,870 $13,100 $11,545 Base rental - Non-related parties 2,752 2,294 10,656 9,114 Bonus rental - UHS facilities 1,128 1,093 4,668 4,562 Tenant reimbursements and other - Non-related parties 665 487 2,667 1,831 Tenant reimbursements and other - UHS facilities 247 - 686 - 8,216 6,744 31,777 27,052 Expenses: Depreciation and amortization 1,353 1,082 5,177 4,267 Advisory fees to UHS 380 386 1,498 1,486 Other operating expenses 1,370 879 5,000 3,353 Property write-down - hurricane damage - - 1,863 - Property damage recoverable from UHS - - (1,863) - 3,103 2,347 11,675 9,106 Income before equity in unconsolidated limited liability companies (“LLCs”) and interest expense 5,113 4,397 20,102 17,946 Equity in income of unconsolidated LLCs (including gains on sales of real property of $2,466 during the three-month period ended December 31, 2003 and $1,009 and $2,831 during the twelve-month periods ended December 31, 2004 and 2003, respectively) 1,207 4,063 4,967 7,974 Interest expense (877) (615) (3,357) (2,487) Income from continuing operations 5,443 7,845 21,712 23,433 Income from discontinued operations, net (including gain on sale of real property of $833 during the three- and twelve-month period ended December 31, 2004) 1,215 248 1,959 992 Net income $6,658 $8,093 $23,671 $24,425 Basic earnings per share: From continuing operations $0.46 $0.67 $1.85 $2.00 From discontinued operations $0.11 $0.02 $0.17 $0.09 Total basic earnings per share $0.57 $0.69 $2.02 $2.09 Diluted earnings per share: From continuing operations $0.46 $0.67 $1.84 $1.99 From discontinued operations $0.10 $0.02 $0.16 $0.08 Total diluted earnings per share $0.56 $0.69 $2.00 $2.07 Weighted average number of shares outstanding - Basic 11,753 11,731 11,744 11,713 Weighted average number of share equivalents 72 63 69 66 Weighted average number of shares and equivalents outstanding - Diluted 11,825 11,794 11,813 11,779 Calculation of Funds From Operations (“FFO”): Three Months Twelve Months Ended December 31, Ended December 31, 2004 2003 2004 2003 Net income $6,658 $8,093 $23,671 $24,425 Plus: Depreciation and amortization expense: Consolidated investments 1,225 1,106 5,088 4,409 Unconsolidated affiliates 880 1,142 4,282 4,146 Less: Gain on LLC’s sale of real property - (2,466) (1,009) (2,831) Gain on sale of real property - discontinued operations (833) - (833) - Funds from operations (FFO) $7,930 $7,875 $31,199 $30,149 Funds from operations (FFO) per share - Basic $0.67 $0.67 $2.66 $2.57 Funds from operations (FFO) per share - Diluted $0.67 $0.67 $2.64 $2.56 Dividend paid per share $0.505 $0.495 $2.000 $1.960 Universal Health Realty Income Trust Consolidated Balance Sheets (dollar amounts in thousands) (unaudited) December 31, December 31, Assets: 2004 2003 Real Estate Investments: Buildings and improvements $189,859 $160,079 Accumulated depreciation (56,803) (52,219) 133,056 107,860 Land 23,143 22,929 Construction in progress 1,863 - Net Real Estate Investments 158,062 130,789 Investments in and advances to limited liability companies (“LLCs”) 40,523 61,001 Other Assets: Cash 3,588 628 Bonus rent receivable from UHS 1,128 1,093 Rent receivable - other 392 107 Deferred charges and other assets, net 890 673 Total Assets $204,583 $194,291 Liabilities and Shareholders’ Equity: Liabilities: Line of credit borrowings $20,000 $33,057 Mortgage note payable, non-recourse to us 4,083 4,185 Mortgage notes payable of consolidated LLCs, non-recourse to us 22,127 - Accrued interest 417 310 Accrued expenses and other liabilities 1,902 1,826 Fair value of derivative instruments 1,059 2,254 Tenant reserves, escrows, deposits and prepaid rents 703 461 Total Liabilities 50,291 42,093 Minority interests 239 - 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 - 11,755,670; 2003 - 11,736,395 118 117 Capital in excess of par value 186,275 185,675 Cumulative net income 244,754 221,083 Accumulated other comprehensive loss (994) (2,065) Cumulative dividends (276,100) (252,612) Total Shareholders’ Equity 154,053 152,198 Total Liabilities and Shareholders’ Equity $204,583 $194,291
Universal Health Realty Income Trust
CONTACT: Cheryl K. Ramagano, Vice President & Treasurer of UniversalHealth Realty Income Trust, +1-610-768-3300