Universal Health Realty Income Trust Reports 2019 Fourth Quarter And Full Year Financial Results
02/26/2020
As calculated on the attached Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our funds from operations ("FFO"), were
As reflected on the Supplemental Schedule, our financial results for the three-month period ended
The decrease in our adjusted net income and FFO during the fourth quarter of 2019, as compared to the fourth quarter of 2018, was primarily due to the previously disclosed vacancies that occurred as of
Consolidated Results of Operations - Twelve-Month Periods Ended
For the twelve-month period ended
As calculated on the Supplemental Schedule, our FFO were
As reflected on the Supplemental Schedule, our financial results for the twelve-month period ended
Our financial results for the twelve-month period ended
Excluding the impact of these items from each respective twelve-month period, and as calculated on the Supplemental Schedule, our adjusted net income was
Our net income, adjusted net income and FFO for the twelve months ended
Dividend Information:
The fourth quarter dividend of
Capital Resources Information:
At
Acquisition and Divestiture During the Fourth Quarter of 2019:
In November, 2019, we acquired the Bellin Health Family Medicine Center located in
In December, 2019, we sold the Kings Crossing II medical office building, located in
Lease Expirations/Vacancies of Two Hospital Facilities:
As disclosed in our Form 10-K for the year ended
The leases on these two hospital facilities, located in
We are marketing each property for lease to new tenants. However, should these properties remain owned and vacant for an extended period of time, or should we experience decreased lease rates on future leases, as compared to prior/expired lease rates, or incur substantial renovation costs to make the properties suitable for other operators/tenants, our future results of operations could be materially unfavorably impacted.
New Construction Projects:
In late July, 2019, a wholly-owned subsidiary of ours entered into an agreement to build and lease a newly constructed 108-bed behavioral health care hospital located in
Construction of this hospital, for which we have engaged a wholly-owned subsidiary of UHS to act as project manager, is expected to be completed in late 2020. The hospital lease will commence upon issuance of the certificate of occupancy. The approximate cost of the project is estimated at
In September, 2019, we entered into an agreement whereby we will own a 95% ownership interest in
Adoption of ASU 2016-02, "Leases (Topic 842): Amendments to the FASB Accounting Standards Codification":
Effective
General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
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
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
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
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
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Consolidated Statements of Income |
||||||||||||||||
For the Three and Twelve Months Ended |
||||||||||||||||
(amounts in thousands, except per share amounts) |
||||||||||||||||
(unaudited) |
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Three Months Ended |
Twelve Months Ended |
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|
|
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Revenues: |
||||||||||||||||
Lease revenue - UHS facilities (a.) |
$ |
5,830 |
$ |
5,674 |
$ |
23,095 |
$ |
22,661 |
||||||||
Lease revenue- Non-related parties |
12,556 |
12,681 |
52,020 |
50,466 |
||||||||||||
Other revenue - UHS facilities |
215 |
123 |
867 |
338 |
||||||||||||
Other revenue - Non-related parties |
258 |
254 |
1,181 |
2,745 |
||||||||||||
18,859 |
18,732 |
77,163 |
76,210 |
|||||||||||||
Expenses: |
||||||||||||||||
Depreciation and amortization |
6,306 |
6,346 |
25,870 |
24,976 |
||||||||||||
Advisory fees to UHS |
1,011 |
979 |
3,974 |
3,806 |
||||||||||||
Other operating expenses |
5,463 |
4,952 |
21,569 |
20,723 |
||||||||||||
12,780 |
12,277 |
51,413 |
49,505 |
|||||||||||||
Income before equity in income of unconsolidated limited |
6,079 |
6,455 |
25,750 |
26,705 |
||||||||||||
Equity in income of unconsolidated LLCs |
459 |
566 |
1,796 |
1,771 |
||||||||||||
Hurricane insurance recovery proceeds in excess of |
- |
- |
- |
4,535 |
||||||||||||
Hurricane business interruption insurance recovery |
- |
- |
- |
1,162 |
||||||||||||
Gains on sales of real estate assets |
1,701 |
- |
1,951 |
- |
||||||||||||
Interest expense, net |
(2,401) |
(2,608) |
(10,533) |
(9,977) |
||||||||||||
Net income |
$ |
5,838 |
$ |
4,413 |
$ |
18,964 |
$ |
24,196 |
||||||||
Basic earnings per share |
$ |
0.43 |
$ |
0.32 |
$ |
1.38 |
$ |
1.76 |
||||||||
Diluted earnings per share |
$ |
0.42 |
$ |
0.32 |
$ |
1.38 |
$ |
1.76 |
||||||||
Weighted average number of shares outstanding - Basic |
13,736 |
13,727 |
13,732 |
13,722 |
||||||||||||
Weighted average number of shares outstanding - Diluted |
13,757 |
13,727 |
13,752 |
13,722 |
||||||||||||
(a.) Includes bonus rental on UHS hospital facilities of |
|
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Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule") |
||||||||||||||||
For the Three Months Ended |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Calculation of Adjusted Net Income |
||||||||||||||||
Three Months Ended |
Three Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
5,838 |
$ |
0.42 |
$ |
4,413 |
$ |
0.32 |
||||||||
Adjustments: |
||||||||||||||||
Less: Gain on sale of real estate assets |
(1,701) |
(0.12) |
- |
- |
||||||||||||
Subtotal adjustments to net income |
(1,701) |
(0.12) |
- |
- |
||||||||||||
Adjusted net income |
$ |
4,137 |
$ |
0.30 |
$ |
4,413 |
$ |
0.32 |
||||||||
Calculation of Funds From Operations ("FFO") |
||||||||||||||||
Three Months Ended |
Three Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
5,838 |
$ |
0.42 |
$ |
4,413 |
$ |
0.32 |
||||||||
Plus: Depreciation and amortization expense: |
||||||||||||||||
Consolidated investments |
6,306 |
0.46 |
6,162 |
0.45 |
||||||||||||
Unconsolidated affiliates |
287 |
0.02 |
257 |
0.02 |
||||||||||||
Less: Gain on sale of real estate assets |
(1,701) |
(0.12) |
- |
- |
||||||||||||
FFO |
$ |
10,730 |
$ |
0.78 |
$ |
10,832 |
$ |
0.79 |
||||||||
Dividend paid per share |
$ |
0.685 |
$ |
0.675 |
|
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Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule") |
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For the Twelve Months Ended |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Calculation of Adjusted Net Income |
||||||||||||||||
Twelve Months Ended |
Twelve Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
18,964 |
$ |
1.38 |
$ |
24,196 |
$ |
1.76 |
||||||||
Adjustments: |
||||||||||||||||
Less: Hurricane insurance recovery proceeds |
- |
- |
(4,535) |
(0.33) |
||||||||||||
Less: Gains on sales of real estate assets |
(1,951) |
(0.14) |
- |
- |
||||||||||||
Subtotal adjustments to net income |
(1,951) |
(0.14) |
(4,535) |
(0.33) |
||||||||||||
Adjusted net income |
$ |
17,013 |
$ |
1.24 |
$ |
19,661 |
$ |
1.43 |
||||||||
Calculation of Funds From Operations ("FFO") |
||||||||||||||||
Twelve Months Ended |
Twelve Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
18,964 |
$ |
1.38 |
$ |
24,196 |
$ |
1.76 |
||||||||
Plus: Depreciation and amortization expense: |
||||||||||||||||
Consolidated investments |
25,870 |
1.88 |
24,337 |
1.77 |
||||||||||||
Unconsolidated affiliates |
1,141 |
0.08 |
1,036 |
0.08 |
||||||||||||
Less: Hurricane insurance recovery proceeds |
- |
- |
(4,535) |
(0.33) |
||||||||||||
Less: Gains on sales of real estate assets |
(1,951) |
(0.14) |
- |
- |
||||||||||||
FFO |
$ |
44,024 |
$ |
3.20 |
$ |
45,034 |
$ |
3.28 |
||||||||
Dividend paid per share |
$ |
2.720 |
$ |
2.680 |
|
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Consolidated Balance Sheets |
||||||||
(dollar amounts in thousands, except share data) |
||||||||
(unaudited) |
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|
|
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2019 |
2018 |
|||||||
Assets: |
||||||||
Real Estate Investments: |
||||||||
Buildings and improvements and construction in progress |
$ |
572,503 |
$ |
557,650 |
||||
Accumulated depreciation |
(194,888) |
(173,316) |
||||||
377,615 |
384,334 |
|||||||
Land |
54,892 |
53,396 |
||||||
Net Real Estate Investments |
432,507 |
437,730 |
||||||
Investments in limited liability companies ("LLCs") |
6,918 |
5,019 |
||||||
Other Assets: |
||||||||
Cash and cash equivalents |
6,110 |
5,036 |
||||||
Lease and other receivables from UHS |
2,963 |
2,739 |
||||||
Lease receivable - other |
7,640 |
7,469 |
||||||
Intangible assets (net of accumulated amortization of |
14,553 |
17,407 |
||||||
Right-of-use land assets, net |
8,944 |
- |
||||||
Deferred charges and other assets, net |
9,154 |
8,356 |
||||||
Total Assets |
$ |
488,789 |
$ |
483,756 |
||||
Liabilities: |
||||||||
Line of credit borrowings |
$ |
212,950 |
$ |
196,400 |
||||
Mortgage notes payable, non-recourse to us, net |
60,744 |
64,881 |
||||||
Accrued interest |
374 |
450 |
||||||
Accrued expenses and other liabilities |
12,888 |
11,765 |
||||||
Ground lease liabilities, net |
8,944 |
- |
||||||
Tenant reserves, deposits and deferred and prepaid rents |
11,155 |
11,650 |
||||||
Total Liabilities |
307,055 |
285,146 |
||||||
Equity: |
||||||||
Preferred shares of beneficial interest, |
- |
- |
||||||
Common shares, |
138 |
137 |
||||||
Capital in excess of par value |
266,723 |
266,031 |
||||||
Cumulative net income |
661,280 |
642,316 |
||||||
Cumulative dividends |
(747,417) |
(710,006) |
||||||
Accumulated other comprehensive income |
1,010 |
132 |
||||||
Total Equity |
181,734 |
198,610 |
||||||
Total Liabilities and Equity |
$ |
488,789 |
$ |
483,756 |
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SOURCE
Charles Boyle, Chief Financial Officer, (610) 768-3300