UNIVERSAL HEALTH REALTY INCOME TRUST REPORTS 2022 SECOND QUARTER FINANCIAL RESULTS
07/25/2022
Consolidated Results of Operations - Three-Month Periods Ended
As calculated on the attached Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), our funds from operations ("FFO"), were
Our financial results for the three-month period ended
The decrease in our adjusted net income of
During the second quarter of 2022, as compared to the second quarter of 2021, our FFO decreased
Consolidated Results of Operations - Six-Month Periods Ended
For the six-month period ended
As calculated on the Supplemental Schedule, our FFO were
After adjusting the reported results for the six-month period ended
The decrease in our adjusted net income of
During the first six months of 2022, as compared to the comparable period of 2021, our FFO decreased
Dividend Information:
The second quarter dividend of
Capital Resources Information:
At
Vacant Specialty Facilities:
As previously disclosed, the lease on the specialty hospital located in
We estimate that the aggregate operating expenses for the three vacant specialty facilities, including the facility located in
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 the potential impact of COVID-19 on our financial results, as well as the operations and financial results of each of our tenants, those related to healthcare industry trends and those detailed in our filings with the
Many of the factors that could affect our future results are beyond our control or ability to predict, including the impact of the COVID-19 pandemic. Future operations and financial results of our tenants, and in turn ours, could be materially impacted by various developments including those related to COVID-19. Such developments include, but are not limited to, decreases in staffing availability and related increases to wage expense experienced by our tenants resulting from the nationwide shortage of nurses and other clinical staff and support personnel, the impact of government and administrative regulation and stimulus on the health care industry; declining patient volumes and unfavorable changes in payer mix caused by deteriorating macroeconomic conditions (including increases in uninsured and underinsured patients as the result of business closings and layoffs); potential disruptions related to supplies required for our tenants' employees and patients; and potential increases to other expenditures. Due to COVID-19 restrictions and its impact on the economy, we may experience a decrease in prospective tenants which could unfavorably impact the volume of new leases, as well as the renewal rate of existing leases. The COVID-19 pandemic may delay our construction projects which could result in increased costs and delay the timing of opening and rental payments from those projects, although no such delays have yet occurred. The COVID-19 pandemic could also impact our indebtedness and the ability to refinance such indebtedness on acceptable terms, as well as risks associated with disruptions in the financial markets and the business of financial institutions as the result of the COVID-19 pandemic, which could impact us from a financing perspective; and changes in general economic conditions nationally and regionally in the markets where our properties are located resulting from the COVID-19 pandemic. We are not able to quantify the impact that these factors will have on our future operations, but developments related to the COVID-19 pandemic could have a material adverse impact on our future financial results.
We believe that, if and when applicable, adjusted net income and adjusted net income per diluted share (as reflected on the Supplemental Schedule), 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 Six Months Ended |
||||||||||||||||
(amounts in thousands, except share information) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
|
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Revenues: |
||||||||||||||||
Lease revenue - UHS facilities (a.) |
$ |
7,394 |
$ |
7,265 |
$ |
14,820 |
$ |
14,397 |
||||||||
Lease revenue - Non-related parties |
12,933 |
13,117 |
25,828 |
26,209 |
||||||||||||
Other revenue - UHS facilities |
233 |
207 |
462 |
433 |
||||||||||||
Other revenue - Non-related parties |
242 |
287 |
497 |
536 |
||||||||||||
Interest income on financing leases - UHS facilities |
1,369 |
- |
2,739 |
- |
||||||||||||
22,171 |
20,876 |
44,346 |
41,575 |
|||||||||||||
Expenses: |
||||||||||||||||
Depreciation and amortization |
6,679 |
6,951 |
13,388 |
13,738 |
||||||||||||
Advisory fees to UHS |
1,266 |
1,089 |
2,490 |
2,151 |
||||||||||||
Other operating expenses |
6,986 |
5,903 |
13,853 |
11,505 |
||||||||||||
14,931 |
13,943 |
29,731 |
27,394 |
|||||||||||||
Income before equity in income of unconsolidated limited |
7,240 |
6,933 |
14,615 |
14,181 |
||||||||||||
Equity in income of unconsolidated LLCs |
345 |
567 |
597 |
1,038 |
||||||||||||
Gain on sale of real estate assets |
- |
1,304 |
- |
1,304 |
||||||||||||
Interest expense, net |
(2,367) |
(2,183) |
(4,589) |
(4,316) |
||||||||||||
Net income |
$ |
5,218 |
$ |
6,621 |
$ |
10,623 |
$ |
12,207 |
||||||||
Basic earnings per share |
$ |
0.38 |
$ |
0.48 |
$ |
0.77 |
$ |
0.89 |
||||||||
Diluted earnings per share |
$ |
0.38 |
$ |
0.48 |
$ |
0.77 |
$ |
0.89 |
||||||||
Weighted average number of shares outstanding - Basic |
13,768 |
13,753 |
13,766 |
13,751 |
||||||||||||
Weighted average number of shares outstanding - Diluted |
13,789 |
13,776 |
13,788 |
13,773 |
||||||||||||
(a.) Includes bonus rental on |
|
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Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule") |
||||||||||||||||
For the Three Months Ended |
||||||||||||||||
(amounts in thousands, except share information) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Calculation of Adjusted Net Income |
||||||||||||||||
Three Months Ended |
Three Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
5,218 |
$ |
0.38 |
$ |
6,621 |
$ |
0.48 |
||||||||
Adjustments: |
||||||||||||||||
Less: Gain on sale of real estate assets |
- |
- |
(1,304) |
(0.09) |
||||||||||||
Subtotal adjustments to net income |
- |
- |
(1,304) |
(0.09) |
||||||||||||
Adjusted net income |
$ |
5,218 |
$ |
0.38 |
$ |
5,317 |
$ |
0.39 |
Calculation of Funds From Operations ("FFO") |
||||||||||||||||
Three Months Ended |
Three Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
5,218 |
$ |
0.38 |
$ |
6,621 |
$ |
0.48 |
||||||||
Plus: Depreciation and amortization expense: |
||||||||||||||||
Consolidated investments |
6,679 |
0.48 |
6,951 |
0.50 |
||||||||||||
Unconsolidated affiliates |
295 |
0.02 |
374 |
0.03 |
||||||||||||
Less: Gain on sale of real estate assets |
- |
- |
(1,304) |
(0.09) |
||||||||||||
FFO |
$ |
12,192 |
$ |
0.88 |
$ |
12,642 |
$ |
0.92 |
||||||||
Dividend paid per share |
$ |
0.710 |
$ |
0.700 |
|
||||||||||||||||
Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule") |
||||||||||||||||
For the Six Months Ended |
||||||||||||||||
(amounts in thousands, except share information) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Calculation of Adjusted Net Income |
||||||||||||||||
Six Months Ended |
Six Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
10,623 |
$ |
0.77 |
$ |
12,207 |
$ |
0.89 |
||||||||
Adjustments: |
||||||||||||||||
Less: Gain on sale of real estate assets |
- |
- |
(1,304) |
(0.10) |
||||||||||||
Subtotal adjustments to net income |
- |
- |
(1,304) |
(0.10) |
||||||||||||
Adjusted net income |
$ |
10,623 |
$ |
0.77 |
$ |
10,903 |
$ |
0.79 |
Calculation of Funds From Operations ("FFO") |
||||||||||||||||
Six Months Ended |
Six Months Ended |
|||||||||||||||
|
|
|||||||||||||||
Amount |
Per Diluted Share |
Amount |
Per Diluted Share |
|||||||||||||
Net income |
$ |
10,623 |
$ |
0.77 |
$ |
12,207 |
$ |
0.89 |
||||||||
Plus: Depreciation and amortization expense: |
||||||||||||||||
Consolidated investments |
13,388 |
0.97 |
13,738 |
1.00 |
||||||||||||
Unconsolidated affiliates |
590 |
0.04 |
736 |
0.05 |
||||||||||||
Less: Gain on sale of real estate assets |
- |
- |
(1,304) |
(0.10) |
||||||||||||
FFO |
$ |
24,601 |
$ |
1.78 |
$ |
25,377 |
$ |
1.84 |
||||||||
Dividend paid per share |
$ |
1.415 |
$ |
1.395 |
|
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Consolidated Balance Sheets |
||||||||
(amounts in thousands, except share information) |
||||||||
(unaudited) |
||||||||
|
|
|||||||
2022 |
2021 |
|||||||
Assets: |
||||||||
Real Estate Investments: |
||||||||
Buildings and improvements and construction in progress |
$ |
630,220 |
$ |
608,836 |
||||
Accumulated depreciation |
(237,268) |
(225,584) |
||||||
392,952 |
383,252 |
|||||||
Land |
56,631 |
54,897 |
||||||
Net Real Estate Investments |
449,583 |
438,149 |
||||||
Financing receivable from UHS |
83,697 |
82,439 |
||||||
Net Real Estate Investments and Financing receivable |
533,280 |
520,588 |
||||||
Investments in and advances to limited liability companies ("LLCs") |
9,713 |
10,139 |
||||||
Other Assets: |
||||||||
Cash and cash equivalents |
8,399 |
22,504 |
||||||
Lease and other receivables from UHS |
4,696 |
4,641 |
||||||
Lease receivable - other |
7,767 |
7,109 |
||||||
Intangible assets (net of accumulated amortization of |
10,548 |
9,972 |
||||||
Right-of-use land assets, net |
11,476 |
11,495 |
||||||
Deferred charges and other assets, net |
17,934 |
11,971 |
||||||
Total Assets |
$ |
603,813 |
$ |
598,419 |
||||
Liabilities: |
||||||||
Line of credit borrowings |
$ |
284,300 |
$ |
271,900 |
||||
Mortgage notes payable, non-recourse to us, net |
50,729 |
56,866 |
||||||
Accrued interest |
323 |
346 |
||||||
Accrued expenses and other liabilities |
12,286 |
12,157 |
||||||
Ground lease liabilities, net |
11,476 |
11,495 |
||||||
Tenant reserves, deposits and deferred and prepaid rents |
10,053 |
10,328 |
||||||
Total Liabilities |
369,167 |
363,092 |
||||||
Equity: |
||||||||
Preferred shares of beneficial interest, none issued and outstanding |
- |
- |
||||||
Common shares, 95,000,000 shares authorized; issued and outstanding: 2022 - 13,800,694; 2021 - 13,783,442 |
138 |
138 |
||||||
Capital in excess of par value |
269,039 |
268,515 |
||||||
Cumulative net income |
800,182 |
789,559 |
||||||
Cumulative dividends |
(843,515) |
(823,998) |
||||||
Accumulated other comprehensive income |
8,802 |
1,113 |
||||||
Total Equity |
234,646 |
235,327 |
||||||
Total Liabilities and Equity |
$ |
603,813 |
$ |
598,419 |
View original content:https://www.prnewswire.com/news-releases/universal-health-realty-income-trust-reports-2022-second-quarter-financial-results-301592727.html
SOURCE
Charles Boyle, Chief Financial Officer, (610) 768-3300