KING OF PRUSSIA, Pa.,
Feb. 28, 2019 /PRNewswire/
-- Universal Health Realty Income Trust (NYSE:UHT) announced
today that for the three-month period ended December 31, 2018,
reported net income was $4.4 million,
or $.32 per diluted share, as
compared to $6.1 million, or
$.44 per diluted share, during the
fourth quarter of 2017.
As calculated on the Schedule of Non-GAAP Supplemental
Information ("Supplemental Schedule"), our funds from operations
("FFO") were $10.8 million, or
$.79 per diluted share, during the
fourth quarter of 2018, as compared to $10.5
million, or $.77 per diluted
share, during the fourth quarter of 2017.
As a result of damage sustained in August, 2017 from Hurricane
Harvey at certain of our properties located in Texas, our financial results for the
three-month period ended December 31,
2017 included approximately $1.6
million of hurricane related expenses and $3.6 million of hurricane related insurance
recoveries. Excluding these items from the three-month period
ended December 31, 2017, and as
calculated on the Supplemental Schedule, our adjusted net income
was $4.0 million, or $.29 per diluted share. During the three-month
period ended December 31, 2017, our
net income, adjusted net income and FFO were unfavorably impacted
by approximately $375,000, or
$.03 per diluted share, as a result
of the temporary closure of the hurricane impacted properties.
Consolidated Results of Operations - Twelve-Month Periods
Ended December 31, 2018 and 2017:
For the twelve-month period ended December 31, 2018, our reported net income was
$24.2 million, or $1.76 per diluted share, as compared to
$45.6 million, or $3.35 per diluted share during the twelve-month
period of 2017.
As calculated on the Supplemental Schedule, our FFO were
$45.0 million, or $3.28 per diluted share, during the twelve-month
period of 2018, as compared to $42.2
million, or $3.10 per diluted
share, during the twelve-month period of 2017.
As reflected on the Supplemental Schedule, and as discussed
below, our financial results for the twelve-month period ended
December 31, 2018, included
$4.5 million of hurricane insurance
recoveries in excess of property damage write-downs recorded in
connection with damage sustained from Hurricane Harvey. Our
financial results for the twelve-month period of 2017 included
hurricane related expenses of $5.0
million, hurricane related insurance recoveries of
$7.0 million, and a gain of
$27.2 million recorded in connection
with our purchase of the minority ownership interest in, and
subsequent divesture of, the St. Mary's Professional Office
Building ("Arlington
transaction"). Excluding these items from each respective period,
and as calculated on the Supplemental Schedule, our adjusted net
income was $19.7 million, or
$1.43 per diluted share, during the
twelve-month period ended December 31,
2018 as compared to $16.4
million, or $1.20 per diluted
share, during the twelve-month period ended December 31, 2017.
Our net income and FFO for the twelve-month period ended
December 31, 2018 included a net
favorable impact of approximately $1.3
million, or $.10 per diluted
share, consisting of the following: (i) a favorable impact of
approximately $1.7 million, or
$.12 per diluted share, received in
connection with a lease termination agreement entered into during
the second quarter of 2018 on a single-tenant medical office
building located in Texas (this
agreement terminated a lease that was scheduled to expire in July,
2020), partially offset by; (ii) an unfavorable impact of
approximately $400,000, or
$.02 per diluted share, consisting of
non-recurring repairs and remediation expenses incurred at one of
our medical office buildings. Also included in our net income and
FFO during the twelve-month period ended December 31, 2018 was a favorable impact of
approximately $1.2 million, or
$.08 per diluted share, of business
interruption insurance recoveries recorded in connection with
damage sustained from Hurricane Harvey. Included in this amount,
which covered the period of late August, 2017 through the second
quarter of 2018 (after satisfaction of the applicable deductibles),
was approximately $500,000, or
$.04 per diluted share, related to
2017.
Dividend Information:
The fourth quarter dividend of $.675 per share, or $9.3
million in the aggregate, was declared on December 6, 2018 and paid on December 31, 2018.
Capital Resources Information:
At December 31, 2018, we had
$196.4 million of borrowings
outstanding pursuant to the terms of our $300 million credit agreement and $103.6 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.
Hurricane Harvey Impact:
In late August 2017, five of our
medical office buildings located in the Houston, Texas area incurred extensive water
damage as a result of Hurricane Harvey. Until various times during
the second quarter of 2018, these properties were temporarily
closed and non-operational as we continued to reconstruct and
restore them to an operational condition. As of June 30, 2018, reconstruction on all of the
occupied space in these properties had been completed and
operations had fully resumed.
During 2018, pursuant to the terms of a global settlement with
our commercial property insurance carrier, we received $5.5 million of additional insurance recovery
proceeds bringing the aggregate hurricane-related insurance
recoveries to $12.5 million. The
aggregate insurance proceeds recoveries, which were net of
applicable deductibles, covered substantially all of the costs
incurred related to the remediation, repair and reconstruction of
each of these properties as well business interruption recoveries
for the lost income related to each of these properties during the
period they were non-operational.
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 and Twelve Months Ended December 31, 2018 and
2017
(amounts in thousands, except per share amounts)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base rental -
UHS facilities
|
|
$
|
4,191
|
|
|
$
|
4,263
|
|
|
$
|
16,738
|
|
|
$
|
16,888
|
|
Base rental -
Non-related parties
|
|
|
10,321
|
|
|
|
10,082
|
|
|
|
41,267
|
|
|
|
40,335
|
|
Bonus rental -
UHS facilities
|
|
|
1,242
|
|
|
|
1,261
|
|
|
|
4,988
|
|
|
|
4,917
|
|
Tenant
reimbursements and other - Non-related parties
|
|
|
2,614
|
|
|
|
2,326
|
|
|
|
11,944
|
|
|
|
9,198
|
|
Tenant
reimbursements and other - UHS facilities
|
|
|
364
|
|
|
|
327
|
|
|
|
1,273
|
|
|
|
1,010
|
|
|
|
|
18,732
|
|
|
|
18,259
|
|
|
|
76,210
|
|
|
|
72,348
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
6,346
|
|
|
|
6,355
|
|
|
|
24,976
|
|
|
|
25,116
|
|
Advisory fees
to UHS
|
|
|
979
|
|
|
|
929
|
|
|
|
3,806
|
|
|
|
3,577
|
|
Other operating
expenses
|
|
|
4,952
|
|
|
|
5,006
|
|
|
|
20,723
|
|
|
|
19,511
|
|
Hurricane
related expenses
|
|
|
-
|
|
|
|
1,569
|
|
|
|
-
|
|
|
|
4,967
|
|
Hurricane
insurance recoveries
|
|
|
-
|
|
|
|
(1,569)
|
|
|
|
-
|
|
|
|
(4,967)
|
|
Transaction
costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
107
|
|
|
|
|
12,277
|
|
|
|
12,290
|
|
|
|
49,505
|
|
|
|
48,311
|
|
Income before equity
in income of unconsolidated limited liability companies ("LLCs"),
interest expense, hurricane insurance recovery proceeds and
gain
|
|
|
6,455
|
|
|
|
5,969
|
|
|
|
26,705
|
|
|
|
24,037
|
|
Equity in
income of unconsolidated LLCs
|
|
|
566
|
|
|
|
457
|
|
|
|
1,771
|
|
|
|
2,416
|
|
Hurricane
insurance recovery proceeds in excess of damaged property
write-downs
|
|
|
-
|
|
|
|
2,033
|
|
|
|
4,535
|
|
|
|
2,033
|
|
Hurricane
business interruption insurance recovery proceeds
|
|
|
-
|
|
|
|
-
|
|
|
|
1,162
|
|
|
|
-
|
|
Gain on
Arlington transaction
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27,196
|
|
Interest expense,
net
|
|
|
(2,608)
|
|
|
|
(2,395)
|
|
|
|
(9,977)
|
|
|
|
(10,063)
|
|
Net income
|
|
$
|
4,413
|
|
|
$
|
6,064
|
|
|
$
|
24,196
|
|
|
$
|
45,619
|
|
Basic earnings per
share
|
|
$
|
0.32
|
|
|
$
|
0.44
|
|
|
$
|
1.76
|
|
|
$
|
3.35
|
|
Diluted earnings per
share
|
|
$
|
0.32
|
|
|
$
|
0.44
|
|
|
$
|
1.76
|
|
|
$
|
3.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding - Basic and Diluted
|
|
|
13,727
|
|
|
|
13,716
|
|
|
|
13,722
|
|
|
|
13,625
|
|
Universal Health
Realty Income Trust Schedule of Non-GAAP Supplemental
Information ("Supplemental Schedule")
For the Three Months Ended December 31, 2018 and 2017
(in thousands, except per share amounts)
(unaudited)
|
|
Calculation of
Adjusted Net Income
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
Net income
|
|
$
|
4,413
|
|
|
$
|
0.32
|
|
|
$
|
6,064
|
|
|
$
|
0.44
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus: Hurricane
related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
1,569
|
|
|
|
0.11
|
|
Less: Hurricane
insurance recovery proceeds in excess of damaged property
write-downs
|
|
|
|
|
|
|
|
|
|
|
(1,569)
|
|
|
|
(0.11)
|
|
Less: Hurricane
insurance recoveries
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,033)
|
|
|
|
(0.15)
|
|
Subtotal adjustments
to net income
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,033)
|
|
|
|
(0.15)
|
|
Adjusted net
income
|
|
$
|
4,413
|
|
|
$
|
0.32
|
|
|
$
|
4,031
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
Calculation of
Funds From Operations ("FFO")
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
Net income
|
|
$
|
4,413
|
|
|
$
|
0.32
|
|
|
$
|
6,064
|
|
|
$
|
0.44
|
|
Plus: Depreciation and
amortization expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
investments
|
|
|
6,162
|
|
|
|
0.45
|
|
|
|
6,220
|
|
|
|
0.46
|
|
Unconsolidated
affiliates
|
|
|
257
|
|
|
|
0.02
|
|
|
|
259
|
|
|
|
0.02
|
|
Less:
Hurricane insurance recovery proceeds in excess of damaged property
write-downs
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,033)
|
|
|
|
(0.15)
|
|
FFO
|
|
$
|
10,832
|
|
|
$
|
0.79
|
|
|
$
|
10,510
|
|
|
$
|
0.77
|
|
Dividend paid per
share
|
|
|
|
|
|
$
|
0.675
|
|
|
|
|
|
|
$
|
0.665
|
|
Universal Health
Realty Income Trust Schedule of Non-GAAP Supplemental
Information ("Supplemental Schedule")
For the Twelve Months Ended December 31, 2018 and 2017
(in thousands, except per share amounts)
(unaudited)
|
|
Calculation of
Adjusted Net Income
|
|
|
|
Twelve Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
Net income
|
|
$
|
24,196
|
|
|
$
|
1.76
|
|
|
$
|
45,619
|
|
|
$
|
3.35
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus: Hurricane
related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
4,967
|
|
|
|
0.36
|
|
Less: Hurricane
insurance recovery proceeds in excess of damaged property
write-downs
|
|
|
(4,535)
|
|
|
|
(0.33)
|
|
|
|
(2,033)
|
|
|
|
(0.15)
|
|
Less: Hurricane
insurance recoveries
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,967)
|
|
|
|
(0.36)
|
|
Less: Gain on
Arlington transaction
|
|
|
-
|
|
|
|
-
|
|
|
|
(27,196)
|
|
|
|
(2.00)
|
|
Subtotal adjustments
to net income
|
|
|
(4,535)
|
|
|
|
(0.33)
|
|
|
|
(29,229)
|
|
|
|
(2.15)
|
|
Adjusted net
income
|
|
$
|
19,661
|
|
|
$
|
1.43
|
|
|
$
|
16,390
|
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
Calculation of
Funds From Operations ("FFO")
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
|
Amount
|
|
|
Per
Diluted Share
|
|
Net income
|
|
$
|
24,196
|
|
|
$
|
1.76
|
|
|
$
|
45,619
|
|
|
$
|
3.35
|
|
Plus: Depreciation and
amortization expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
investments
|
|
|
24,337
|
|
|
|
1.77
|
|
|
|
24,598
|
|
|
|
1.81
|
|
Unconsolidated
affiliates
|
|
|
1,036
|
|
|
|
0.08
|
|
|
|
1,240
|
|
|
|
0.09
|
|
Less:
Hurricane insurance recovery proceeds in excess of damaged property
write-downs
|
|
|
(4,535)
|
|
|
|
(0.33)
|
|
|
|
(2,033)
|
|
|
|
(0.15)
|
|
Gain on Arlington transaction
|
|
|
-
|
|
|
|
-
|
|
|
|
(27,196)
|
|
|
|
(2.00)
|
|
FFO
|
|
$
|
45,034
|
|
|
$
|
3.28
|
|
|
$
|
42,228
|
|
|
$
|
3.10
|
|
Dividend paid per
share
|
|
|
|
|
|
$
|
2.680
|
|
|
|
|
|
|
$
|
2.640
|
|
Universal Health
Realty Income Trust Consolidated Balance Sheets
(dollar amounts in thousands)
(unaudited)
|
|
|
|
December
31,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
Assets:
|
|
|
|
|
|
|
|
|
Real Estate
Investments:
|
|
|
|
|
|
|
|
|
Buildings and
improvements and construction in progress
|
|
$
|
557,650
|
|
|
$
|
546,634
|
|
Accumulated
depreciation
|
|
|
(173,316)
|
|
|
|
(153,379)
|
|
|
|
|
384,334
|
|
|
|
393,255
|
|
Land
|
|
|
53,396
|
|
|
|
53,142
|
|
Net Real Estate Investments
|
|
|
437,730
|
|
|
|
446,397
|
|
Investments in limited
liability companies ("LLCs")
|
|
|
5,019
|
|
|
|
4,671
|
|
Other
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
5,036
|
|
|
|
3,387
|
|
Base and bonus rent
and other receivables from UHS
|
|
|
2,739
|
|
|
|
2,680
|
|
Rent receivable -
other
|
|
|
7,469
|
|
|
|
6,422
|
|
Intangible assets (net
of accumulated amortization of $27.6 million and
$28.7
million, respectively)
|
|
|
17,407
|
|
|
|
20,559
|
|
Deferred charges and
other assets, net
|
|
|
8,356
|
|
|
|
5,892
|
|
Total Assets
|
|
$
|
483,756
|
|
|
$
|
490,008
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Line of credit
borrowings
|
|
$
|
196,400
|
|
|
$
|
181,050
|
|
Mortgage notes
payable, non-recourse to us, net
|
|
|
64,881
|
|
|
|
75,359
|
|
Accrued
interest
|
|
|
450
|
|
|
|
540
|
|
Accrued expenses and
other liabilities
|
|
|
11,765
|
|
|
|
12,188
|
|
Tenant reserves,
deposits and deferred and prepaid rents
|
|
|
11,650
|
|
|
|
10,310
|
|
Total Liabilities
|
|
|
285,146
|
|
|
|
279,447
|
|
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: 2018 -
13,746,803;
2017 -
13,735,369
|
|
|
137
|
|
|
|
137
|
|
Capital in excess of
par value
|
|
|
266,031
|
|
|
|
265,335
|
|
Cumulative net
income
|
|
|
642,316
|
|
|
|
618,120
|
|
Cumulative
dividends
|
|
|
(710,006)
|
|
|
|
(673,175)
|
|
Accumulated other
comprehensive income
|
|
|
132
|
|
|
|
144
|
|
Total Equity
|
|
|
198,610
|
|
|
|
210,561
|
|
Total Liabilities and Equity
|
|
$
|
483,756
|
|
|
$
|
490,008
|
|
View original
content:http://www.prnewswire.com/news-releases/universal-health-realty-income-trust-reports-2018-fourth-quarter-and-full-year-financial-results-300803596.html
SOURCE Universal Health Realty Income Trust