KING OF PRUSSIA, Pa., April 21 Universal Health Realty Income Trust (NYSE: UHT) announced today that for the quarter ended March 31, 2010, net income was $4.5 million, or $.37 per diluted share, as compared to $4.6 million, or $.39 per diluted share, during the same quarter in the prior year.
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Funds from operations ("FFO") increased 5% to $8.5 million, or $.70 per diluted share, during the first quarter of 2010 as compared to $8.1 million, or $.68 per diluted share, during the comparable quarter of the prior year.
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The first quarter dividend of $.60 per share was paid on March 31, 2010. At March 31, 2010, our shareholders' equity was $138.3 million and our liabilities for borrowed funds were $81.7 million, including mortgage debt of consolidated entities, which is non-recourse to us, totaling $21.8 million.
Summerlin Medical Office Building III, which is located in Las Vegas, Nevada on the campus of Summerlin Hospital Medical Center (a majority-owned subsidiary of Universal Health Services, Inc.), was completed and opened during the first quarter of 2009. In connection with this medical office building ("MOB"), which is owned by a limited liability company ("LLC") in which we hold a majority, non-controlling ownership interest, Summerlin Hospital Medical Center committed to a master lease agreement for a specified portion of the space. As a result of this master lease agreement, the LLC was considered a variable interest entity. Since we were the primary beneficiary, the financial results of this MOB were included in our financial statements on a consolidated basis prior to January 1, 2010. During the first quarter of 2010, the master lease threshold has been met and, as a result, this MOB is accounted for as an unconsolidated LLC under the equity method beginning on January 1, 2010. During the three-month period ended March 31, 2009, this property generated approximately $160,000 of revenue, $65,000 of other operating expenses and $60,000 of combined interest and depreciation and amortization expense. There was no material impact on our net income as a result of the deconsolidation of this LLC.
Acquisition and Property Development Activity:
During the first quarter of 2010, an LLC in which we hold a majority, non-controlling ownership interest, purchased the North Valley Medical Plaza, a medical office building located in Phoenix, Arizona. Also during the first quarter of 2010, the Texoma Medical Plaza, which is located in Denison, Texas, was completed and opened. This newly constructed MOB, which is owned by an LLC in which we hold a majority, non-controlling ownership interest, is located on the campus of an acute care hospital owned and operated by a wholly-owned subsidiary of Universal Health Services, Inc.
As of March 31, 2010, construction continued on the BRB Medical Office Building located in Kingwood, Texas. This MOB, which is owned by an LLC in which we hold a majority, non-controlling ownership interest, is scheduled to be completed and opened during the third quarter of 2010.
General Information, Forward-Looking Statements 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, behavioral healthcare facilities, rehabilitation hospitals, sub-acute care facilities, surgery centers, childcare centers and medical office buildings. We have fifty-two real estate investments in fifteen states.
Funds from operations is a widely recognized measure of performance for Real Estate Investment Trusts ("REITs"). We believe that funds from operations and funds from operations per diluted share, 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. 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. 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 shown 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, 2009. 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.
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 Months Ended March 31, 2010 and 2009 (amounts in thousands, except per share amounts) (unaudited)
SOURCE Universal Health Realty Income Trust
