UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 23, 2008
UNIVERSAL HEALTH REALTY INCOME TRUST
(Exact name of registrant as specified in its charter)
| Maryland | 1-9321 | 23-6858580 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| Universal Corporate Center 367 South Gulph Road King of Prussia, Pennsylvania |
19406 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (610) 265-0688
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On October 23, 2008, the Trust made its third quarter, 2008 earnings release. A copy of the Trust’s press release is furnished as exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| 99.1 |
Press release dated October 23, 2008. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNIVERSAL HEALTH REALTY INCOME TRUST | ||||
| Date: October 23, 2008 | By: | /s/ Alan B. Miller | ||
| Name: | Alan B. Miller | |||
| Title: | Chairman of the Board, Chief Executive Officer and President | |||
| By: | /s/ Charles F. Boyle | |||
| Name: | Charles F. Boyle | |||
| Title: | Vice President and Chief Financial Officer | |||
Exhibit Index
| Exhibit No. |
Exhibit | |
| 99.1 |
Press release dated October 23, 2008. |
Exhibit 99.1
| UNIVERSAL HEALTH REALTY INCOME TRUST | Universal Corporate Center | |||
| 367 S. Gulph Road | ||||
| P.O. Box 61558 | ||||
| King of Prussia, PA 19406 | ||||
| (610) 265-0688 | ||||
| FOR IMMEDIATE RELEASE | ||||
| CONTACT: | Charles Boyle | October 23, 2008 | ||
| Chief Financial Officer | ||||
| (610) 768-3300 | ||||
UNIVERSAL HEALTH REALTY INCOME TRUST
REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS
KING OF PRUSSIA, PA- Universal Health Realty Income Trust (NYSE:UHT) announced today that for the quarter ended September 30, 2008, net income was $4.2 million, or $.35 per diluted share, as compared to $4.4 million, or $.37 per diluted share, during the same quarter in the prior year. For the nine-month period ended September 30, 2008, net income was $12.5 million, or $1.05 per diluted share, as compared to $18.2 million, or $1.53 per diluted share, during the comparable nine-month period of the prior year.
Funds from operations (“FFO”) increased 5% to $7.6 million, or $.64 per diluted share, during the three-month period ended September 30, 2008 as compared $7.2 million, or $.61 per diluted share, during the comparable quarter of the prior year. FFO were $22.4 million, or $1.88 per diluted share, during the nine-month period ended September 30, 2008 as compared to $22.0 million, or $1.85 per diluted share, during the comparable nine-month period of the prior year.
Favorably impacting net income during the nine-month period ended September 30, 2007 was a combined gain of $4.3 million, or $.36 per diluted share, consisting of: (i) a gain of $2.3 million, or $.19 per diluted share, realized on the sale of a medical office building (included in income from discontinued operations); (ii) a gain of $1.7 million, or $.15 per diluted share, related to the recovery of replacement real estate assets in connection with the previously disclosed Chalmette Medical Center asset exchange and substitution transaction, and; (iii) a gain of $252,000, or $.02 per diluted share, resulting from the sale of real property by an unconsolidated LLC. After deducting the gains identified above, net income, as adjusted, for the nine-month period ended September 30, 2007 was $13.9 million, or $1.17 per diluted share.
During the third quarter of 2008, we invested $2.3 million for a 95% non-controlling ownership interest in a LLC that purchased the Vista Medical Terrace and The Sparks Medical Building located in Sparks, Nevada. Both of these medical office buildings (“MOBs”) are located on the campus of Northern Nevada Medical Center, an acute care hospital owned and operated by a wholly-owned subsidiary of UHS. Also during the third quarter of 2008, we
opened the newly constructed Palmdale Medical Plaza located in Palmdale, California, on the campus of an acute care hospital currently under construction by a wholly-owned subsidiary of UHS. As of September 30, 2008, construction continues on two MOBs, which are owned by LLCs in which we hold non-controlling majority ownership interests, as follows: (i) Summerlin Hospital Medical Office Building III located in Las Vegas, Nevada, which is scheduled to be completed and opened during the fourth quarter of 2008, and; (ii) Deer Valley Medical Office Building III located in Phoenix, Arizona, which is scheduled to be completed and opened during the first quarter of 2009.
The third quarter dividend of $.585 per share was paid on September 30, 2008. At September 30, 2008, our shareholders’ equity was $152.6 million and our liabilities for borrowed funds were $59.0 million, including mortgage debt of consolidated entities, which is non-recourse to us, totaling $23.3 million.
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-eight real estate investments in fourteen 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.
(more)
Universal Health Realty Income Trust
Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 2008 and 2007
(amounts in thousands, except per share amounts)
(unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Revenues: |
||||||||||||||||
| Base rental - UHS facilities |
$ | 3,347 | $ | 3,067 | $ | 9,505 | $ | 9,182 | ||||||||
| Base rental - Non-related parties |
2,559 | 2,324 | 7,399 | 7,033 | ||||||||||||
| Bonus rental - UHS facilities |
898 | 926 | 2,969 | 2,998 | ||||||||||||
| Tenant reimbursements and other - Non-related parties |
584 | 565 | 1,669 | 1,714 | ||||||||||||
| Tenant reimbursements and other - UHS facilities |
38 | 23 | 100 | 100 | ||||||||||||
| 7,426 | 6,905 | 21,642 | 21,027 | |||||||||||||
| Expenses: |
||||||||||||||||
| Depreciation and amortization |
1,517 | 1,327 | 4,372 | 3,836 | ||||||||||||
| Advisory fees to UHS |
408 | 355 | 1,151 | 1,062 | ||||||||||||
| Other operating expenses |
1,211 | 1,083 | 3,516 | 3,299 | ||||||||||||
| 3,136 | 2,765 | 9,039 | 8,197 | |||||||||||||
| Income before equity in income of unconsolidated limited liability companies (“LLCs”), property damage recovered from UHS (Chalmette) and interest expense |
4,290 | 4,140 | 12,603 | 12,830 | ||||||||||||
| Equity in income of unconsolidated LLCs (including recognition of gain on sale of real property of $252 during the nine months ended September 30, 2007) |
567 | 692 | 1,608 | 2,340 | ||||||||||||
| Replacement property recovered from UHS - Chalmette |
— | 20 | — | 1,748 | ||||||||||||
| Interest expense |
(651 | ) | (438 | ) | (1,688 | ) | (1,233 | ) | ||||||||
| Income from continuing operations |
4,206 | 4,414 | 12,523 | 15,685 | ||||||||||||
| Income from discontinued operations, net (including gain on sale of real property of $2,270 during the nine months ended September 30, 2007) |
— | 16 | — | 2,527 | ||||||||||||
| Net income |
$ | 4,206 | $ | 4,430 | $ | 12,523 | $ | 18,212 | ||||||||
| Basic earnings per share: |
||||||||||||||||
| From continuing operations |
$ | 0.35 | $ | 0.37 | $ | 1.06 | $ | 1.33 | ||||||||
| From discontinued operations |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.21 | ||||||||
| Total basic earnings per share |
$ | 0.35 | $ | 0.37 | $ | 1.06 | $ | 1.54 | ||||||||
| Diluted earnings per share: |
||||||||||||||||
| From continuing operations |
$ | 0.35 | $ | 0.37 | $ | 1.05 | $ | 1.32 | ||||||||
| From discontinued operations |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.21 | ||||||||
| Total diluted earnings per share |
$ | 0.35 | $ | 0.37 | $ | 1.05 | $ | 1.53 | ||||||||
| Weighted average number of shares outstanding - Basic |
11,855 | 11,835 | 11,849 | 11,811 | ||||||||||||
| Weighted average number of share equivalents |
37 | 36 | 37 | 63 | ||||||||||||
| Weighted average number of shares and equivalents outstanding - Diluted |
11,892 | 11,871 | 11,886 | 11,874 | ||||||||||||
| Calculation of Funds From Operations (“FFO”): | ||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Net income |
$ | 4,206 | $ | 4,430 | $ | 12,523 | $ | 18,212 | ||||||||
| Plus: Depreciation and amortization expense: |
||||||||||||||||
| Consolidated investments |
1,497 | 1,316 | 4,314 | 3,806 | ||||||||||||
| Unconsolidated affiliates |
1,882 | 1,484 | 5,532 | 4,274 | ||||||||||||
| Less: Gain on sale of real property - discontinued operations |
— | — | — | (2,270 | ) | |||||||||||
| Gain on LLC’s sale of real property |
— | — | — | (252 | ) | |||||||||||
| Gain on asset exchange and substitution agreement with UHS - Chalmette |
— | (20 | ) | — | (1,748 | ) | ||||||||||
| Funds from operations (FFO) |
$ | 7,585 | $ | 7,210 | $ | 22,369 | $ | 22,022 | ||||||||
| Funds from operations (FFO) per share - Basic |
$ | 0.64 | $ | 0.61 | $ | 1.89 | $ | 1.86 | ||||||||
| Funds from operations (FFO) per share - Diluted |
$ | 0.64 | $ | 0.61 | $ | 1.88 | $ | 1.85 | ||||||||
| Dividend paid per share |
$ | 0.585 | $ | 0.575 | $ | 1.750 | $ | 1.720 | ||||||||
Universal Health Realty Income Trust
Consolidated Balance Sheets
(dollar amounts in thousands)
(unaudited)
| September 30, 2008 |
December 31, 2007 |
|||||||
| Assets: |
||||||||
| Real Estate Investments: |
||||||||
| Buildings and improvements |
$ | 195,149 | $ | 178,655 | ||||
| Accumulated depreciation |
(64,856 | ) | (60,627 | ) | ||||
| 130,293 | 118,028 | |||||||
| Land |
19,348 | 18,258 | ||||||
| Construction in progress |
— | 7,511 | ||||||
| Net Real Estate Investments |
149,641 | 143,797 | ||||||
| Investments in and advances to limited liability companies (“LLCs”) |
55,053 | 52,030 | ||||||
| Other Assets: |
||||||||
| Cash and cash equivalents |
1,529 | 1,131 | ||||||
| Base and bonus rent receivable from UHS |
1,917 | 960 | ||||||
| Rent receivable - other |
731 | 746 | ||||||
| Deferred charges, notes receivable and intangible and other assets, net |
6,315 | 1,085 | ||||||
| Total Assets |
$ | 215,186 | $ | 199,749 | ||||
| Liabilities and Shareholders’ Equity: |
||||||||
| Liabilities: |
||||||||
| Line of credit borrowings |
$ | 35,700 | $ | 16,800 | ||||
| Mortgage notes payable, non-recourse to us |
6,942 | 3,717 | ||||||
| Mortgage and other loans payable of consolidated LLCs, non-recourse to us |
16,312 | 16,100 | ||||||
| Accrued interest |
143 | 125 | ||||||
| Accrued expenses and other liabilities |
2,389 | 1,874 | ||||||
| Tenant reserves, escrows, deposits and prepaid rents |
920 | 741 | ||||||
| Total Liabilities |
62,406 | 39,357 | ||||||
| Minority interests |
150 | 87 | ||||||
| Shareholders’ 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: 2008 - 11,862,429; 2007 -11,841,938 |
119 | 118 | ||||||
| Capital in excess of par value |
189,180 | 188,638 | ||||||
| Cumulative net income |
339,588 | 327,065 | ||||||
| Cumulative dividends |
(376,257 | ) | (355,516 | ) | ||||
| Total Shareholders’ Equity |
152,630 | 160,305 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 215,186 | $ | 199,749 | ||||