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Universal Health Realty Income Trust Reports 2009 Fourth Quarter And Full Year Financial Results

KING OF PRUSSIA, Pa., Feb. 23 /PRNewswire-FirstCall/ -- Universal Health Realty Income Trust (NYSE: UHT) announced today that for the quarter ended December 31, 2009, net income was $4.6 million, or $.38 per diluted share, as compared to a reported net loss of $870,000, or $.07 per diluted share, during the comparable quarter in the prior year.  As indicated on the Supplemental Schedule of Adjusted Net Income ("Supplemental Schedule"), included in net income during the three and twelve-month periods ended December 31, 2008, was an asset impairment charge recorded in connection with a medical office building complex located in Riverdale, Georgia. After adjusting for the provision for asset impairment, as indicated on the Supplemental Schedule, our adjusted net income for the quarter ended December 31, 2008 was $3.7 million, or $0.31 per diluted share.

Our net income during the fourth quarter of 2009 increased $852,000, or $.07 per diluted, share, over the adjusted net income earned during the fourth quarter of 2008. The increase was due to: (i) a favorable change of $250,000, or $.02 per diluted share, from reduced other operating expenses resulting primarily from higher than anticipated building maintenance and repairs expense incurred at one of our medical office buildings ("MOBs") during the fourth quarter of 2008; (ii) a favorable change of $132,000, or $.01 per diluted share, resulting from net increase in our share of income generated at various properties owned by unconsolidated limited liability companies ("LLCs") in which we hold non-controlling ownership interests; (iii) a favorable change of $131,000, or $.01 per diluted share, from a net decrease in interest expense resulting primarily from a decrease in the average cost of borrowings pursuant to our revolving credit facility (partially offset by increased average outstanding borrowings), and; (iv) approximately $300,000, or $.03 per diluted share, of other combined favorable changes including the income generated at a newly constructed MOB that was competed and opened during the first quarter of 2009 and an increase in bonus rentals earned on the UHS hospital facilities.

During the fourth quarter of 2009, our funds from operations ("FFO") increased 18% to $8.5 million, or $.71 per diluted share, as compared to $7.2 million, or $.61 per diluted share, as adjusted for the impact of the asset impairment, during the fourth quarter of 2008.  

The fourth quarter dividend of $.60 per share was paid on December 31, 2009.  At December 31, 2009, our shareholders' equity was $141.0 million and our liabilities for borrowed funds were $84.3 million, including mortgage and other debt of consolidated entities, which is non-recourse to us, totaling $35.5 million.

Property Development Activity:

As of December 31, 2009, construction continued on two MOBs which are owned by LLCs in which we hold non-controlling ownership interests, as follows: (i) Texoma Medical Plaza located in Denison, Texas, on the campus of a newly constructed and recently opened replacement acute care hospital owned and operated by a wholly-owned subsidiary of UHS, which is scheduled to be completed and opened during the first quarter of 2010, and; (ii) BRB Medical Office Building, located in Kingwood, Texas, which is scheduled to be completed and opened during the third quarter of 2010.

During 2009, we completed construction and opened three medical office buildings ("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, on the campus of an acute care hospital owned and operated by a wholly-owned subsidiary of UHS (included in our financial statements on a consolidated basis); (ii) Deer Valley Medical Office Building III located in Phoenix, Arizona (included in our financial statements on an unconsolidated basis), and; (iii) Auburn Medical Office Building II located in Auburn, Washington, on the campus of an acute care hospital owned and operated by a wholly-owned subsidiary of UHS (included in our financial statements on an unconsolidated basis).

Years ended December 31, 2009 and 2008:

For the year ended December 31, 2009, net income was $18.6 million, or $1.56 per diluted share, as compared to reported net income of $11.7 million, or $.98 per diluted share, during 2008. After adjusting for the provision for asset impairment recorded during the fourth quarter of 2008, as indicated on the Supplemental Schedule, our adjusted net income for the year ended December 31, 2008 was $16.2 million, or $1.37 per diluted share

Our net income during the year ended December 31, 2009 increased $2.3 million, or $.19 per diluted, share, over the adjusted net income earned during the year ended December 31, 2008. The increase was primarily due to: (i) an increase in our share of income generated at various unconsolidated LLCs, including the effect of a favorable adjustment resulting from a change in estimate to the operating expenses of a certain LLC; (ii) a decrease in interest expense on our revolving credit facility resulting from a decrease in our average cost of borrowings, partially offset by increased average outstanding borrowings (net of interest expense related to two new MOBs which were completed and opened during the third quarter of 2008 and the first quarter of 2009); (iii) an increase in the bonus rentals earned on the UHS hospital facilities, and; (iv) the income generated at a newly constructed MOB that was completed and opened during the first quarter of 2009.  

The increases in base rentals -- UHS facilities, depreciation and amortization, other operating expenses and interest expense during the three and twelve months ended December 31, 2009, as compared to the comparable prior year periods, resulted primarily from the operating results of two newly constructed medical office buildings which were completed and opened during the third quarter of 2008 and the first quarter of 2009.

For the year ended December 31, 2009, our FFO increased 13% to $33.3 million, or $2.80 per diluted share, as compared to $29.6 million, or $2.49 per diluted share, as adjusted for the impact of the asset impairment, during 2008

Equity Issuance Program:

Pursuant to the terms of our previously announced at-the-market equity issuance program, we issued 184,600 common shares of beneficial interest which generated aggregate cash proceeds, net of commissions, of $5.6 million during the fourth quarter of 2009.

Dividends Paid During 2009

Dividends of $2.38 per share were declared and paid during 2009, of which $1.94 per share was ordinary income and $.44 per share was a return of capital distribution.  

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-one real estate investments in fifteen states.

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