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: | Cheryl K. Ramagano | July 24, 2006 | ||
Vice President & Treasurer | ||||
(610) 768-3300 |
UNIVERSAL HEALTH REALTY INCOME TRUST
REPORTS SECOND QUARTER EARNINGS
KING OF PRUSSIA, PA- Universal Health Realty Income Trust (NYSE:UHT) announced today that for the quarter ended June 30, 2006, net income was $6.9 million, or $.58 per diluted share, as compared to $6.2 million, or $.52 per diluted share, for the same quarter in the prior year. Favorably impacting net income during the second quarter of 2006 is the recognition of a previously deferred gain of $1.9 million, or $.16 per diluted share, resulting from the sale of our interest in an unconsolidated limited liability company (“LLC”) during the fourth quarter of 2005. Favorably impacting net income during the second quarter of 2005 was a gain of $1.2 million, or $.10 per diluted share, related to the recovery of replacement costs of real estate assets at Wellington Regional Medical Center (“Wellington”) that were damaged by hurricanes Frances and Jeanne during 2004.
Funds from operations (“FFO”) were $7.4 million and FFO per diluted share were $.63 during each of the three months ended June 30, 2006 and June 30, 2005. The second quarter dividend of $.565 per share was paid on June 30, 2006.
For the six month period ended June 30, 2006, net income was $11.8 million, or $1.00 per diluted share, as compared to $13.8 million, or $1.16 per diluted share, during the prior year six month period. Included in net income during the six month period ended June 30, 2006 is the recognition of a previously deferred gain of $1.9 million, or $.16 per diluted share, as mentioned above. Included in net income during the six month period ended June 30, 2005 was a gain of $1.0 million, or $.09 per diluted share, resulting from the sale of real property by an unconsolidated LLC and a gain of $2.7 million, or $.23 per diluted share, related to the recovery of replacement costs of real estate assets at Wellington. FFO were $14.8 million, or $1.24 per diluted share, during the six month period ended June 30, 2006 as compared to $14.6 million, or $1.24 per diluted share, during the prior year six month period.
At June 30, 2006, our shareholders’ equity was $154.4 million and our liabilities for borrowed funds were $39.5 million, including mortgage debt of consolidated entities, which is non-recourse to us, totaling $25.2 million.
On July 21, 2006, we completed the previously disclosed transfer of the real property assets and all rights attendant thereto (including insurance proceeds) of Chalmette Medical Center (“Chalmette”) to Universal Health Services, Inc. (“UHS”) in exchange and substitution for newly constructed real property assets (“Capital Additions”) owned by UHS at Wellington, The Bridgeway (“Bridgeway”) and Southwest Healthcare System-Inland Valley Campus (“Inland Valley”). Also on July 21, 2006, upon the completion of the Chalmette exchange and substitution agreement, we entered into amended and restated leases with each of the individual lessees to reflect the rents payable on the respective Capital Additions at Wellington, Bridgeway and Inland Valley.
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-three real estate investments in fifteen 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.
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Universal Health Realty Income Trust
Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2006 and 2005
(amounts in thousands, except per share amounts)
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenues: | ||||||||||||||||
Base rental - UHS facilities | $ | 3,094 | $ | 3,247 | $ | 6,186 | $ | 6,404 | ||||||||
Base rental - Non-related parties | 3,101 | 3,038 | 6,168 | 6,049 | ||||||||||||
Bonus rental - UHS facilities | 1,104 | 1,119 | 2,255 | 2,342 | ||||||||||||
Tenant reimbursements and other - Non-related parties | 935 | 833 | 1,881 | 1,807 | ||||||||||||
Tenant reimbursements and other - UHS facilities | 94 | 108 | 197 | 234 | ||||||||||||
8,328 | 8,345 | 16,687 | 16,836 | |||||||||||||
Expenses: | ||||||||||||||||
Depreciation and amortization | 1,423 | 1,466 | 2,839 | 2,874 | ||||||||||||
Advisory fees to UHS | 355 | 353 | 702 | 708 | ||||||||||||
Other operating expenses | 1,619 | 1,548 | 3,317 | 3,122 | ||||||||||||
3,397 | 3,367 | 6,858 | 6,704 | |||||||||||||
Income before equity in unconsolidated limited liability companies (“LLCs”), property damage recovered from UHS and interest expense | 4,931 | 4,978 | 9,829 | 10,132 | ||||||||||||
Equity in income of unconsolidated LLCs (including recognition of previously deferred gain of $1,860 on sale of our interest in an unconsolidated LLC for the three and six months ended June 30, 2006 and a gain on sale of real property of $1,043 during the six month period ended June 30, 2005) | 2,540 | 815 | 3,265 | 2,796 | ||||||||||||
Property damage recovered from UHS - Wellington | — | 1,213 | — | 2,741 | ||||||||||||
Interest expense, net | (579 | ) | (801 | ) | (1,254 | ) | (1,884 | ) | ||||||||
Net income | $ | 6,892 | $ | 6,205 | $ | 11,840 | $ | 13,785 | ||||||||
Basic earnings per share | $ | 0.58 | $ | 0.53 | $ | 1.01 | $ | 1.17 | ||||||||
Diluted earnings per share | $ | 0.58 | $ | 0.52 | $ | 1.00 | $ | 1.16 | ||||||||
Weighted average number of shares outstanding - Basic | 11,782 | 11,762 | 11,780 | 11,759 | ||||||||||||
Weighted average number of share equivalents | 79 | 77 | 79 | 76 | ||||||||||||
Weighted average number of shares and equivalents outstanding - Diluted | 11,861 | 11,839 | 11,859 | 11,835 | ||||||||||||
Calculation of Funds From Operations (“FFO”): |
| |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Net income | $ | 6,892 | $ | 6,205 | $ | 11,840 | $ | 13,785 | ||||||||
Plus: Depreciation and amortization expense: | ||||||||||||||||
Consolidated investments | 1,349 | 1,405 | 2,692 | 2,750 | ||||||||||||
Unconsolidated affiliates | 1,066 | 989 | 2,092 | 1,884 | ||||||||||||
Less: Gain on LLC’s sale of real property | — | 18 | — | (1,043 | ) | |||||||||||
Previously deferred gain on sale of our interest in an unconsolidated LLC | (1,860 | ) | — | (1,860 | ) | — | ||||||||||
Property damage recovered from UHS - Wellington | — | (1,213 | ) | — | (2,741 | ) | ||||||||||
Funds from operations (FFO) | $ | 7,447 | $ | 7,404 | $ | 14,764 | $ | 14,635 | ||||||||
Funds from operations (FFO) per share - Basic | $ | 0.63 | $ | 0.63 | $ | 1.25 | $ | 1.24 | ||||||||
Funds from operations (FFO) per share - Diluted | $ | 0.63 | $ | 0.63 | $ | 1.24 | $ | 1.24 | ||||||||
Dividend paid per share | $ | 0.565 | $ | 0.555 | $ | 1.125 | $ | 1.060 | ||||||||
Universal Health Realty Income Trust
Consolidated Balance Sheets
(dollar amounts in thousands)
(unaudited)
June 30, 2006 | December 31, 2005 | |||||||
Assets: | ||||||||
Real Estate Investments: | ||||||||
Buildings and improvements | $ | 188,089 | $ | 187,451 | ||||
Accumulated depreciation | (60,421 | ) | (57,729 | ) | ||||
127,668 | 129,722 | |||||||
Land | 23,143 | 23,143 | ||||||
Net Real Estate Investments | 150,811 | 152,865 | ||||||
Investments in and advances to limited liability companies (“LLCs”) | 36,460 | 29,572 | ||||||
Other Assets: | ||||||||
Cash and cash equivalents | 1,324 | 1,717 | ||||||
Bonus rent receivable from UHS | 1,104 | 1,088 | ||||||
Rent receivable - other | 1,051 | 1,000 | ||||||
Note receivable from sale of property | — | 3,102 | ||||||
Property damage receivable from UHS | 6,259 | 6,259 | ||||||
Deferred charges and other assets, net | 1,309 | 1,286 | ||||||
Total Assets | $ | 198,318 | $ | 196,889 | ||||
Liabilities and Shareholders’ Equity: | ||||||||
Liabilities: | ||||||||
Line of credit borrowings | $ | 14,300 | $ | 10,000 | ||||
Mortgage note payable, non-recourse to us | 3,911 | 3,972 | ||||||
Mortgage notes payable of consolidated LLCs, non-recourse to us | 21,316 | 21,576 | ||||||
Deferred gain on sale of our interest in an unconsolidated LLC | — | 1,860 | ||||||
Accrued interest | 323 | 357 | ||||||
Accrued expenses and other liabilities | 2,895 | 2,575 | ||||||
Fair value of derivative instruments | 20 | 100 | ||||||
Tenant reserves, escrows, deposits and prepaid rents | 860 | 697 | ||||||
Total Liabilities | 43,625 | 41,137 | ||||||
Minority interests | 299 | 302 | ||||||
Shareholders’ Equity: | ||||||||
Preferred shares of beneficial interest, $.01 par value; 5,000,000 shares authorized; none outstanding | — | — | ||||||
Common shares, $.01 par value; 95,000,000 shares authorized; issued and outstanding: 2006 - 11,785,542; 2005 -11,777,829 | 118 | 118 | ||||||
Capital in excess of par value | 187,220 | 186,943 | ||||||
Cumulative net income | 282,017 | 270,177 | ||||||
Accumulated other comprehensive loss | (20 | ) | (100 | ) | ||||
Cumulative dividends | (314,941 | ) | (301,688 | ) | ||||
Total Shareholders’ Equity | 154,394 | 155,450 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 198,318 | $ | 196,889 | ||||