Real Estate Investments - As of February 24, 2022, the company has investments in 75 facilities across 21 states, including 6 hospital facilities, 58 medical/office buildings, 4 free-standing emergency departments, 4 childcare centers, and 3 specialty facilities[23]. - The company has a total of 75 real estate investments or commitments, indicating a strategy of market expansion in the healthcare sector[23]. - The company’s facilities include a mix of owned and leased properties, with a focus on healthcare-related services[23]. - The company has six acute and behavioral health care hospitals in its portfolio as of December 31, 2021, up from four in 2020[26]. - The company acquired three hospitals as part of an asset purchase agreement with Universal Health Services on December 31, 2021[26]. - The company paid approximately $2.8 million in cash to Universal Health Services for the acquisition of Aiken Regional Medical Center and Canyon Creek Behavioral Health[28]. - The company is developing Sierra Medical Plaza I, an MOB in Reno, Nevada, with an estimated cost of approximately $34 million[42]. - The company purchased a 5% minority ownership interest in Grayson Properties, LP for approximately $3.1 million, consolidating the LP effective with the purchase date[43]. - The company acquired the Fire Mesa office building in Las Vegas for approximately $12.9 million, fully leased to a subsidiary of UHS[44]. Revenue and Financial Performance - The leases for the six acute and behavioral health care hospitals accounted for approximately 25% of consolidated revenues in 2021, compared to 22% in 2020[26]. - The revenue from the specialty facility lease that expired in 2021 represented about 2% of consolidated revenue for the year ended December 31, 2021[27]. - The combined revenues from leases on three acute care and one behavioral health care hospital facilities leased to subsidiaries of UHS accounted for approximately 23% of the company's consolidated revenue for the five years ended December 31, 2021[32]. - The aggregate revenues generated from UHS-related tenants comprised approximately 32% of the company's consolidated revenue for the five years ended December 31, 2021[32]. - The company entered into an asset purchase and sale agreement with UHS, resulting in a gain of approximately $68.4 million included in the consolidated statement of income for the year ended December 31, 2021[33]. - The annual rental for Aiken Regional Medical Center and Canyon Creek Behavioral Health is approximately $5.6 million, with a 2.25% annual increase starting January 1, 2023[35]. - The lease on Wellington Regional Medical Center was renewed for a 5-year term with an annual fair market value lease rate of $6.3 million, increasing by 2.50% annually starting January 1, 2023[40]. - The company anticipates continued investment in healthcare-related facilities to improve its competitive position in the market[58]. - The company recorded a decrease of $546,000 in net income due to increased interest expense[210]. - For the year ended December 31, 2021, net income was $109.2 million, a significant increase of $89.7 million compared to $19.4 million in 2020[210]. - Total revenues increased by $6.2 million, or 7.9%, during 2021 compared to 2020, primarily driven by rentals from the Clive Behavioral Health facility and increased bonus rentals from hospitals leased to UHS[211]. Lease and Occupancy Information - The average remaining lease term for the six acute and behavioral health care hospitals is 10.6 years, with renewal options ranging from one to ten years[26]. - The combined weighted average Coverage Ratio for the four occupied hospitals owned at the end of 2021 was approximately 7.9, compared to 10.3 at the end of 2020[29]. - The average occupancy rate for the Inland Valley Campus of Southwest Healthcare System was 76% in 2021, up from 63% in 2020[160]. - McAllen Medical Center reported an occupancy rate of 51% in 2021, with a guaranteed payment of $5,485,000 until 2026[160]. - Wellington Regional Medical Center achieved a 75% occupancy rate in 2021, with a guaranteed payment of $6,319,000 and a lease term until 2026[160]. - Clive Behavioral Health reported a low occupancy rate of 16% in 2021, with a guaranteed payment of $2,628,000 until 2040[160]. - The Rosenberg Children's Medical Plaza maintained a 100% occupancy rate in 2021, with a guaranteed payment of $2,265,000 until 2028[161]. - The Texoma Medical Plaza achieved a 96% occupancy rate in 2021, with a guaranteed payment of $1,948,000 until 2030[161]. Regulatory and Compliance Issues - The company qualifies as a REIT and must distribute at least 90% of its annual REIT taxable income to shareholders to maintain this status[52]. - The company must comply with strict income distribution requirements to maintain its REIT status, which could adversely affect its financial condition if not met[131]. - Dividends paid by the company as a REIT may be subject to higher federal income tax rates compared to dividends from regular corporations, potentially affecting share value[130]. - Compliance with REIT requirements may limit the ability to pursue attractive investment opportunities[133]. - The company is subject to federal excise tax, which is 4% of the amount exceeding cash distributions during the calendar year[208]. Market and Economic Risks - The operators of the company's facilities derive a significant portion of their revenue from federal and state healthcare programs, including Medicare and Medicaid, which are subject to changes that could materially affect reimbursement levels[60]. - The company faces risks related to tenants' ability to make timely rent payments, which could adversely affect occupancy levels and revenue[79]. - The Budget Control Act mandated a 2% reduction in Medicare payments, which has been extended through 2030, potentially impacting future revenues[86]. - The uncertainties surrounding healthcare reform could materially affect the company's revenues and net income[88]. - The company has seen significant budget deficits in states where its facilities operate, leading to potential reductions in Medicaid funding[84]. - Changes in government reimbursement programs and private payor negotiations could adversely impact the financial position of the company's hospital operators[85]. - The COVID-19 pandemic has not had a material adverse impact on the company's financial results during 2021, but future developments related to the pandemic are likely to have a material adverse impact on financial results[190]. - The company faces potential risks from increased competition and decreases in occupancy and rental rates in certain markets, which may adversely affect operating results[192]. Advisory and Management Fees - Advisory fees incurred and paid to UHS amounted to $4.4 million in 2021, $4.1 million in 2020, and $4.0 million in 2019, based on average invested real estate assets of $629 million, $592 million, and $568 million respectively[49]. - The advisory agreement with UHS was renewed for 2022 under the same terms as in 2021 and 2020, indicating continuity in the advisory relationship[48]. Future Outlook - The company anticipates that the future operations and financial results will depend on various factors related to the COVID-19 pandemic, including the volume of canceled or rescheduled elective procedures[75]. - The company may experience a decrease in prospective tenants due to COVID-19 restrictions, which could negatively impact new lease volumes and renewal rates[190]. - Legislative initiatives, including the CARES Act and ARPA, have provided funding to healthcare providers, but the impact on tenants' operations remains uncertain[190]. - The company faces increased competition in the healthcare industry, which has resulted in lower revenues and higher costs for operators, including UHS[113].

[PART I. FINANCIAL INFORMATION (unaudited)](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION%20(unaudited)) Presents the unaudited condensed consolidated financial statements and related notes for the specified periods [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheets, equity, cash flows, and explanatory notes [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Provides a summary of the company's revenues, expenses, net income, and earnings per share for the specified periods **Condensed Consolidated Statements of Income (amounts in thousands)** | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total Revenues | $21,205 | $19,692 | $62,780 | $58,180 | | Total Expenses | $13,914 | $13,052 | $41,308 | $38,815 | | Net Income | $5,344 | $5,193 | $17,551 | $14,447 | | Basic Earnings Per Share | $0.39 | $0.38 | $1.28 | $1.05 | | Diluted Earnings Per Share | $0.39 | $0.38 | $1.27 | $1.05 | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Details the company's net income and other comprehensive income components, such as unrealized derivative gains/losses **Condensed Consolidated Statements of Comprehensive Income (amounts in thousands)** | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Income | $5,344 | $5,193 | $17,551 | $14,447 | | Unrealized derivative gains/(loss) on cash flow hedges | $471 | $234 | $3,259 | $(5,709) | | Total Comprehensive Income | $5,815 | $5,427 | $20,810 | $8,738 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents a snapshot of the company's assets, liabilities, and equity at specific reporting dates **Condensed Consolidated Balance Sheets (amounts in thousands)** | Metric | September 30, 2021 | December 31, 2020 | | :-------------------------------- | :------------------- | :------------------ | | Net Real Estate Investments | $436,458 | $443,801 | | Investments in and advances to LLCs | $23,123 | $4,278 | | Cash and cash equivalents | $9,347 | $5,742 | | Total Assets | $517,681 | $494,009 | | Line of credit borrowings | $276,800 | $236,200 | | Mortgage notes payable, non-recourse to us, net | $57,397 | $58,895 | | Total Liabilities | $365,870 | $335,004 | | Total Equity | $151,811 | $159,005 | [Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines the changes in the company's total equity, including net income, dividends, and other comprehensive income **Condensed Consolidated Statements of Changes in Equity (amounts in thousands)** | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Equity (Beginning of Period) | $159,005 | $181,734 | | Net Income | $17,551 | $14,447 | | Cumulative Dividends | $(28,868) | $(28,426) | | Unrealized net gain/(loss) on cash flow hedges | $3,259 | $(5,709) | | Total Equity (End of Period) | $151,811 | $162,394 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities **Condensed Consolidated Statements of Cash Flows (amounts in thousands)** | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $36,194 | $32,775 | | Net cash used in investing activities | $(41,155) | $(16,792) | | Net cash provided by/(used in) financing activities | $8,566 | $(15,773) | | Increase in cash and cash equivalents | $3,605 | $210 | | Cash and cash equivalents, end of period | $9,347 | $6,320 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures regarding the company's accounting policies and financial statement items [(1) General](index=9&type=section&id=(1)%20General) Describes the Trust's identity, revenue recognition, and the unaudited nature of the financial statements - The Trust refers to Universal Health Realty Income Trust and its subsidiaries[28](index=28&type=chunk) - Revenues do not include unconsolidated LLCs, which are accounted for by the equity method[29](index=29&type=chunk) - Financial statements are unaudited and condensed, prepared in conformity with U.S. GAAP[30](index=30&type=chunk) [(2) Relationship with Universal Health Services, Inc. ("UHS") and Related Party Transactions](index=9&type=section&id=(2)%20Relationship%20with%20Universal%20Health%20Services%2C%20Inc.%20(%22UHS%22)%20and%20Related%20Party%20Transactions) Details the company's relationship with UHS, including tenant revenue, advisory fees, and specific property transactions **UHS-Related Tenant Revenue Contribution** | Period | 2021 | 2020 | | :-------------------------------- | :----- | :----- | | Three Months Ended Sep 30 | 37% | 34% | | Nine Months Ended Sep 30 | 36% | 33% | - UHS of Delaware, Inc., a wholly-owned subsidiary of UHS, serves as the Trust's Advisor under an annually renewable Advisory Agreement[7](index=7&type=chunk)[44](index=44&type=chunk) **Advisory Fees to UHS (amounts in thousands)** | Period | 2021 | 2020 | | :-------------------------------- | :----- | :----- | | Three Months Ended Sep 30 | $1,121 | $1,039 | | Nine Months Ended Sep 30 | $3,272 | $3,082 | - UHS owned **5.7%** of the Trust's outstanding shares of beneficial interest as of September 30, 2021, and December 31, 2020[46](index=46&type=chunk) - UHS plans to terminate the existing lease on Southwest Healthcare System, Inland Valley Campus, by December 31, 2021, and has agreed to exchange it for substitution properties of substantially equal fair market value[36](index=36&type=chunk)[39](index=39&type=chunk)[81](index=81&type=chunk) - In May 2021, the Trust acquired the Fire Mesa office building in Las Vegas, Nevada, for approximately **$12.9 million**, which is 100% leased by a wholly-owned subsidiary of UHS[38](index=38&type=chunk)[54](index=54&type=chunk) [(3) Dividends and Equity Issuance Program](index=13&type=section&id=(3)%20Dividends%20and%20Equity%20Issuance%20Program) Reports on dividends declared and paid, along with activity under the at-the-market equity issuance program **Dividends Declared and Paid (amounts in thousands, except per share)** | Period | 2021 | 2020 | | :-------------------------------- | :----- | :----- | | Three Months Ended Sep 30 | $9,649 ($0.70/share) | $9,501 ($0.69/share) | | Nine Months Ended Sep 30 | $28,868 ($2.095/share) | $28,426 ($2.065/share) | - No shares were issued under the at-the-market (ATM) equity issuance program during the first nine months of 2021[51](index=51&type=chunk)[139](index=139&type=chunk) - Since its commencement in Q2 2020, the ATM program has issued **2,704 shares**, generating approximately **$270 thousand** in net proceeds[51](index=51&type=chunk)[139](index=139&type=chunk) [(4) Acquisitions and Divestitures](index=13&type=section&id=(4)%20Acquisitions%20and%20Divestitures) Summarizes recent property acquisitions and divestitures, including their financial impact - In May 2021, the Fire Mesa office building in Las Vegas, Nevada, was acquired for approximately **$12.9 million** as part of tax-deferred like-kind exchange transactions[54](index=54&type=chunk) - In June 2021, the Children's Clinic at Springdale, AR, was sold for approximately **$3.2 million**, resulting in a gain of **$1.3 million**[55](index=55&type=chunk) - Subsequent to September 30, 2021 (November 1, 2021), the Auburn Medical Office Building II was sold for approximately **$25.1 million**[53](index=53&type=chunk) [(5) Summarized Financial Information of Equity Affiliates](index=14&type=section&id=(5)%20Summarized%20Financial%20Information%20of%20Equity%20Affiliates) Provides financial details for the company's unconsolidated equity investments in jointly-owned LLCs/LPs - As of September 30, 2021, the Trust had non-controlling equity investments in five jointly-owned LLCs/LPs, accounted for under the equity method, with ownership interests ranging from **33% to 95%**[29](index=29&type=chunk)[61](index=61&type=chunk) **Our Share of Net Income from Unconsolidated LLCs (amounts in thousands)** | Period | 2021 | 2020 | | :-------------------------------- | :----- | :----- | | Three Months Ended Sep 30 | $303 | $517 | | Nine Months Ended Sep 30 | $1,341 | $1,371 | - Subsequent to September 30, 2021, the Trust purchased the remaining **5%** minority ownership interest in Grayson Properties, LP for approximately **$3.1 million**, resulting in **100%** ownership and future consolidation[37](index=37&type=chunk)[62](index=62&type=chunk)[71](index=71&type=chunk) **Mortgage Notes Payable by Unconsolidated LLCs/LPs (non-recourse to Trust, amounts in thousands)** | Date | Balance | | :-------------------------------- | :------ | | September 30, 2021 | $22,133 | | December 31, 2020 | $39,735 | [(6) Recent Accounting Pronouncements](index=16&type=section&id=(6)%20Recent%20Accounting%20Pronouncements) Discusses the impact of new FASB guidance on COVID-19 lease concessions and reference rate reform - The FASB issued guidance providing accounting relief for COVID-19 related lease concessions, allowing entities to account for them as if part of existing lease contracts under certain conditions[72](index=72&type=chunk) - The COVID-19 pandemic did not materially affect the Trust's operations or financial results during the three and nine months ended September 30, 2021, or the year ended December 31, 2020[73](index=73&type=chunk) - The FASB issued ASC Topic 848, "Reference Rate Reform," offering optional practical expedients for reference rate reform activities impacting debt, leases, and derivatives[74](index=74&type=chunk) [(7) Lease Accounting](index=17&type=section&id=(7)%20Lease%20Accounting) Explains the company's adoption of ASC 842, disaggregated lease revenue, and significant lease events - The Trust adopted the new lease standard (ASC 842) on January 1, 2019, applying it to leases as both a lessor and lessee[76](index=76&type=chunk) **Lease Revenue Disaggregation (amounts in thousands)** | Category | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Lease revenue - UHS facilities | $7,574 | $6,381 | $21,971 | $18,243 | | Lease revenue - Non-related parties | $13,115 | $12,841 | $39,324 | $38,526 | - UHS has indicated its intent to renew the lease on Wellington Regional Medical Center, which expires December 31, 2021, at fair market value lease rates[80](index=80&type=chunk) - The lease on Kindred Hospital Chicago Central is scheduled to expire on December 31, 2021, and the tenant does not intend to renew, leading to marketing efforts for new tenants[83](index=83&type=chunk) - Two hospital facilities in Evansville, Indiana, and Corpus Christi, Texas, have remained vacant since May/June 2019[84](index=84&type=chunk) [(8) Debt and Financial Instruments](index=19&type=section&id=(8)%20Debt%20and%20Financial%20Instruments) Details the company's revolving credit agreement, mortgage notes, interest rate swaps, and debt covenants - On July 2, 2021, the Trust entered into an amended and restated revolving credit agreement, increasing its aggregate revolving credit commitment to **$375 million** from **$350 million**, maturing on July 2, 2025[88](index=88&type=chunk)[148](index=148&type=chunk) - As of September 30, 2021, the Trust had **$276.8 million** of outstanding borrowings and **$94.6 million** of available borrowing capacity under its credit agreement[91](index=91&type=chunk)[151](index=151&type=chunk) **Mortgage Notes Payable, Non-Recourse (amounts in thousands)** | Date | Balance | | :-------------------------------- | :------ | | September 30, 2021 | $57,397 | | December 31, 2020 | $58,895 | - The Trust has three interest rate swap agreements with a combined notional amount of **$140 million**, designated as cash flow hedges, to manage interest rate risk[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[164](index=164&type=chunk) - At September 30, 2021, the fair value of the interest rate swaps was a net liability of **$556 thousand**[98](index=98&type=chunk)[161](index=161&type=chunk) - A **1%** change in interest rates would impact net income by approximately **$1.4 million**, based on variable rate debt outstanding and interest rate swaps[165](index=165&type=chunk) **Compliance Ratios (as of September 30, 2021)** | Covenant | Requirement | Actual | | :-------------------------------- | :---------- | :----- | | Tangible net worth | >=$125,000 | $141,419 | | Total leverage | <60% | 45.6% | | Secured leverage | <30% | 8.1% | | Unencumbered leverage | <60% | 47.2% | | Fixed charge coverage | >1.50x | 4.8x | [(9) Segment Reporting](index=21&type=section&id=(9)%20Segment%20Reporting) Explains the company's single reportable segment structure for its healthcare and human service facilities - The Trust's primary business is investing in and leasing healthcare and human service facilities through direct ownership or joint ventures[99](index=99&type=chunk) - The Trust operates as a single reportable segment, aggregating individual properties due to similarities in nature, economics, tenants, and operational processes[99](index=99&type=chunk)[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on financial condition, operating results, liquidity, capital resources, and off-balance sheet arrangements [Overview](index=22&type=section&id=Overview) Introduces Universal Health Realty Income Trust as a REIT investing in healthcare and human service facilities - Universal Health Realty Income Trust is a REIT that invests in healthcare and human service related facilities[102](index=102&type=chunk) - As of November 1, 2021, the portfolio includes **71** real estate investments across **20** states, comprising hospitals, free-standing emergency departments, medical/office buildings, and childcare centers[102](index=102&type=chunk) [Forward Looking Statements and Certain Risk Factors](index=22&type=section&id=Forward%20Looking%20Statements%20and%20Certain%20Risk%20Factors) Discusses potential future impacts from COVID-19, reliance on UHS, regulatory changes, and competition - Future operations and financial results are subject to material impact from COVID-19 related factors, including patient volumes, government regulations, and economic conditions[104](index=104&type=chunk)[105](index=105&type=chunk) - A substantial portion of revenues (**37%** for Q3 2021, **36%** for 9M 2021) is dependent on one operator, Universal Health Services, Inc. (UHS)[106](index=106&type=chunk) - New CMS and OSHA mandates for COVID-19 vaccinations for healthcare staff by January 4, 2022, could adversely affect staffing, patient volumes, and labor costs for operators[106](index=106&type=chunk) - Risks include potential inability to complete tax-deferred like-kind exchange transactions under Section 1031, leading to unfavorable tax consequences[108](index=108&type=chunk) - Competition for properties and tenants, changes in healthcare regulations, and reimbursement levels (Medicare/Medicaid) are significant risk factors[109](index=109&type=chunk)[112](index=112&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Explains the company's accounting for real estate acquisitions and its qualification as a REIT - The Trust applies purchase accounting for real estate acquisitions, allocating fair value to tangible assets (land, building, tenant improvements) and identified intangible assets and liabilities (above/below-market leases, acquired ground leases)[113](index=113&type=chunk)[116](index=116&type=chunk) - The Trust qualifies as a REIT under Sections 856 to 860 of the Internal Revenue Code, generally exempting it from federal income tax on distributed income[118](index=118&type=chunk)[119](index=119&type=chunk) - The Trust is subject to a **4%** federal excise tax if **85%** of ordinary income plus **95%** of capital gain income for the calendar year exceeds cash distributions[120](index=120&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Analyzes the company's net income, total revenues, Funds From Operations (FFO), and interest expense **Net Income (amounts in thousands)** | Period | 2021 | 2020 | Change | | :-------------------------------- | :----- | :----- | :----- | | Three Months Ended Sep 30 | $5,344 | $5,193 | +$151 | | Nine Months Ended Sep 30 | $17,551 | $14,447 | +$3,104 | **Total Revenues (amounts in thousands)** | Period | 2021 | 2020 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Three Months Ended Sep 30 | $21,205 | $19,692 | +$1,513 | +7.7% | | Nine Months Ended Sep 30 | $62,780 | $58,180 | +$4,600 | +7.9% | - Revenue increases were primarily driven by the Clive Behavioral Health facility (completed Dec 2020) and increased bonus rentals from UHS hospital facilities[122](index=122&type=chunk) **Funds From Operations (FFO) (amounts in thousands, except per share)** | Period | 2021 | 2020 | Change | | :-------------------------------- | :----- | :----- | :----- | | Three Months Ended Sep 30 | $12,617 ($0.92/diluted share) | $11,882 ($0.86/diluted share) | +$735 (+$0.06/diluted share) | | Nine Months Ended Sep 30 | $37,994 ($2.76/diluted share) | $34,476 ($2.50/diluted share) | +$3,518 (+$0.26/diluted share) | **Interest Expense, Net (amounts in thousands)** | Period | 2021 | 2020 | Change | | :-------------------------------- | :----- | :----- | :----- | | Three Months Ended Sep 30 | $2,250 | $1,964 | +$286 | | Nine Months Ended Sep 30 | $6,566 | $6,289 | +$277 | - The increase in interest expense was primarily due to higher average outstanding borrowings on the revolving credit agreement and increased interest rate swap expenses, partially offset by a decrease in the average cost of borrowings for the nine-month period[129](index=129&type=chunk)[131](index=131&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Examines the company's cash flows, borrowing capacity, and strategies for funding operations and investments **Net Cash Flows (amounts in thousands)** | Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $36,194 | $32,775 | | Investing Activities | $(41,155) | $(16,792) | | Financing Activities | $8,566 | $(15,773) | - Net cash used in investing activities increased significantly in 2021 due to the acquisition of the Fire Mesa office building (**$13.0 million**), additions to real estate investments (**$11.5 million**), and equity investments in unconsolidated LLCs (**$16.1 million**)[134](index=134&type=chunk) - The amended revolving credit agreement increased the commitment to **$375 million**, with **$94.6 million** of available borrowing capacity as of September 30, 2021[144](index=144&type=chunk)[148](index=148&type=chunk)[151](index=151&type=chunk) - Operating cash flows have been sufficient to fund dividend payments, and the Trust expects to finance capital expenditures and acquisitions using internal and additional funds[143](index=143&type=chunk)[144](index=144&type=chunk) - The Trust is in compliance with all covenants in its Credit Agreement as of September 30, 2021[92](index=92&type=chunk)[152](index=152&type=chunk) [Off Balance Sheet Arrangements](index=33&type=section&id=Off%20Balance%20Sheet%20Arrangements) Discloses the company's off-balance sheet commitments, including outstanding standby letters of credit - As of September 30, 2021, off-balance sheet arrangements included **$3.6 million** in outstanding standby letters of credit related to Grayson Properties II[155](index=155&type=chunk) [Acquisition and Divestiture Activity](index=33&type=section&id=Acquisition%20and%20Divestiture%20Activity) Refers to detailed information on property acquisitions and divestitures provided in the financial notes - Refer to Note 4 for details on completed acquisition and divestiture transactions[156](index=156&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses the company's exposure to interest rate risk and its management through financial instruments and sensitivity analysis - The Trust uses interest rate swap agreements with a total notional amount of **$140 million** as cash flow hedges to manage interest rate risk[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[164](index=164&type=chunk) - At September 30, 2021, the fair value of the interest rate swaps was a net liability of **$556 thousand**[161](index=161&type=chunk) - A **1%** change in interest rates would impact the Trust's net income by approximately **$1.4 million**, based on variable rate debt and interest rate swaps[165](index=165&type=chunk) **Long-term Debt and Interest Rate Swaps (amounts in thousands, as of Sep 30, 2021)** | Category | Total | Average Interest Rate | | :-------------------------------- | :------ | :-------------------- | | Fixed rate debt | $57,681 | 4.3% | | Variable rate debt | $276,800 | 1.3% | | Interest rate swaps (notional amount) | $140,000 | 1.070% | [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures and the absence of material changes in internal control over financial reporting - The CEO and CFO concluded that the disclosure controls and procedures were effective as of September 30, 2021[167](index=167&type=chunk) - There have been no material changes in internal control over financial reporting during the first nine months of 2021[168](index=168&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents additional information not included in the financial statements, such as risk factors and exhibits [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) States that there are no material changes to the risk factors previously disclosed in the annual report - No material changes in risk factors from those set forth in the Annual Report on Form 10-K for the year ended December 31, 2020[171](index=171&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Lists the documents filed as exhibits, including credit agreements and certifications - Includes the Amended and Restated Credit Agreement dated July 2, 2021[172](index=172&type=chunk) - Contains certifications from the Chief Executive Officer and Chief Financial Officer pursuant to SEC rules and the Sarbanes-Oxley Act[172](index=172&type=chunk) - Includes Inline XBRL Instance Document and Taxonomy Extension Documents[172](index=172&type=chunk) [SIGNATURES](index=37&type=section&id=SIGNATURES) Contains the official signatures of the registrant's authorized officers, confirming the report's submission - The report was signed on November 8, 2021, by Alan B. Miller (Chairman of the Board, President and Chief Executive Officer) and Charles F. Boyle (Vice President and Chief Financial Officer)[174](index=174&type=chunk)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q (MARK ONE) For the transition period from to Commission file number 1-9321 UNIVERSAL HEALTH REALTY INCOME TRUST (Exact name of registrant as specified in its charter) MARYLAND 23-6858580 (State or othe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9321 UNIVERSAL HEALTH REALTY INCOME TRUST (Exact name of registrant as specified in its charter) MARYLAND 23-6858580 (State or other jurisdiction of incorporation or organization) UNIVERSAL CORPORATE CENTER 367 SOUTH GUL ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-9321 UNIVERSAL HEALTH REALTY INCOME TRUST (Exact name of registrant as specified in its charter) Maryland 23-6858580 (State or other jurisdiction of ...

Real Estate Investments - As of October 31, 2020, the company has 71 real estate investments or commitments located in 20 states, including 7 hospital facilities, 4 free-standing emergency departments, and 56 medical/office buildings[103]. Financial Performance - Net income for the three-month period ended September 30, 2020, was $5.2 million, an increase of $540,000 from $4.7 million in the same period of 2019[125]. - For the nine-month period ended September 30, 2020, net income was $14.4 million, up $1.3 million from $13.1 million in the comparable period of 2019[125]. - Total revenues decreased by $174,000, or 0.9%, during the three-month period ended September 30, 2020, compared to the same quarter in 2019[125]. - Total revenues also decreased by $124,000, or 0.2%, during the nine-month period ended September 30, 2020, compared to the same period in 2019[125]. - The revenue decrease was primarily due to $842,000 and $1.74 million recorded in the three and nine-month periods ended September 30, 2019, respectively, from two hospital facilities that had lease expirations and vacancies[125]. - Funds From Operations (FFO) for Q3 2020 was $11.882 million, an increase of $519,000 or 4.6% compared to $11.363 million in Q3 2019[128]. - FFO per diluted share increased to $0.86 in Q3 2020 from $0.83 in Q3 2019[128]. - FFO for the first nine months of 2020 increased by $1.2 million, or $0.08 per diluted share, compared to the same period in 2019[129]. COVID-19 Impact - The COVID-19 pandemic is expected to materially impact future operations and financial results, including potential declines in patient volumes and revenues at hospital facilities[105]. - The company may experience a decrease in prospective tenants due to COVID-19 restrictions, which could adversely affect new lease volumes and renewal rates[107]. - The company is unable to fully quantify the financial impact of COVID-19 on its results for 2020, but anticipates a material adverse effect[107]. - Approximately 99% of tenants paid their rent through September 30, 2020, indicating minimal adverse impact from COVID-19 on operations[136]. Operating Expenses and Cash Flow - Operating expenses related to consolidated medical office buildings totaled $4.8 million for Q3 2020, compared to $4.9 million in Q3 2019[126]. - Net cash provided by operating activities was $32.8 million for the nine-month period ended September 30, 2020, compared to $31.7 million in the same period of 2019[141]. - During the nine-month period ended September 30, 2020, the company generated net cash provided by operating activities of $32.8 million, compared to $31.7 million for the same period in 2019, reflecting a year-over-year increase of approximately 3.5%[148]. Debt and Financing - The company had $227.1 million of outstanding borrowings and $5.6 million of letters of credit under its Credit Agreement as of September 30, 2020, with $117.3 million of available borrowing capacity remaining[159]. - The company entered into an amendment to its revolving credit agreement, increasing the total commitment to $350 million from $300 million, with a maturity scheduled for March 2022[156]. - The company expects to finance all capital expenditures and acquisitions using internally generated funds and additional funds from its $350 million revolving credit agreement, which had $117.3 million available as of September 30, 2020[152]. - The company received $14.2 million of net borrowings on its revolving credit agreement during the nine months ended September 30, 2020, compared to $9.3 million in the same period of 2019[145][146]. - The company incurred approximately $507,000 in fees and expenses related to the commencement of its at-the-market equity issuance program[147]. Regulatory and Market Risks - The company faces risks related to the potential inability of tenants to make timely rent payments, which could affect occupancy levels and cash flow[106]. - The general real estate market has been negatively impacted by increased competition and decreases in occupancy and rental rates, which may adversely affect operating results[108]. - The company is subject to risks associated with changes in government regulations, including Medicare and Medicaid reimbursement levels, which could impact revenues[108]. - The company’s ability to obtain capital on acceptable terms for future growth may be adversely affected by deteriorating economic conditions[108]. Interest Rate and Leverage - Each 1% change in interest rates would impact the company's net income by approximately $871,000[173]. - The company entered into interest rate swap agreements totaling a notional amount of $140 million, with fixed rates ranging from 0.565% to 1.4975%[171]. - The average interest rate for fixed-rate debt is approximately 4.3%[172]. - The total leverage ratio stood at 44.0%, below the covenant limit of 60%[161]. - The company has a total long-term debt of $286.8 million as of September 30, 2020[170].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9321 UNIVERSAL HEALTH REALTY INCOME TRUST (Exact name of registrant as specified in its charter) MARYLAND 23-6858580 (State or othe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9321 UNIVERSAL HEALTH REALTY INCOME TRUST (Exact name of registrant as specified in its charter) Washington, D.C. 20549 MARYLAND 23-6858580 (State or oth ...

PART I [ITEM 1. Business](index=4&type=section&id=Item%201.%20Business) Universal Health Realty Income Trust (UHT) is a REIT investing in healthcare and human service facilities across twenty states, with revenue significantly influenced by UHS and government programs - As of February 26, 2020, UHT has **seventy-one real estate investments** located in **twenty states**, including seven hospital facilities, fifty-six medical/office buildings, four free-standing emergency departments, and four preschool and childcare centers[17](index=17&type=chunk) - Hospital facilities comprised approximately **26% of consolidated revenues in 2019**, 25% in 2018, and 26% in 2017, with two non-renewed leases contributing approximately **2% in 2018 and 2017**[26](index=26&type=chunk)[27](index=27&type=chunk) - Lease payments from UHS-related tenants accounted for approximately **31% of consolidated revenues in 2019**, 30% in 2018, and 32% in 2017, with three acute care hospitals leased to UHS subsidiaries expiring in **2021 and 2026**[32](index=32&type=chunk)[99](index=99&type=chunk) UHS Hospital Lease Terms and Annual Minimum Rent (as of Dec 31, 2019) | Hospital Name | Annual Minimum Rent ($) | End of Lease Term | Renewal Term (years) | | :------------------------------------ | :---------------------- | :---------------- | :------------------- | | McAllen Medical Center | $5,485,000 | December, 2026 | 5 (a) | | Wellington Regional Medical Center | $3,030,000 | December, 2021 | 10 (b) | | Southwest Healthcare System, Inland Valley Campus | $2,648,000 | December, 2021 | 10 (b) | - UHS of Delaware, Inc. serves as the Trust's Advisor, with an advisory fee of **$4.0 million in 2019** (0.70% of average invested real estate assets), and the incentive fee provision was eliminated effective January 1, 2019[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - The Trust qualifies as a REIT, requiring distribution of at least **90% of annual REIT taxable income** to shareholders and is generally not subject to federal income tax on distributed income[45](index=45&type=chunk) - A significant portion of revenue for acute care hospitals and FEDs is derived from federal and state healthcare programs (Medicare and Medicaid), making the Trust vulnerable to changes in reimbursement policies and funding restrictions[52](index=52&type=chunk)[53](index=53&type=chunk)[60](index=60&type=chunk) [ITEM 1A. Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The Trust faces significant risks from government and third-party payor dependence, healthcare reform uncertainties, intense competition, reliance on UHS, and inherent real estate and external event vulnerabilities - Revenues of the Trust's tenants are significantly affected by payments from government programs (Medicare, Medicaid) and private payors, which have seen limitations and reductions in reimbursement[67](index=67&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - The uncertain future of the Patient Protection and Affordable Care Act (ACA) due to legal challenges and executive actions could materially adversely affect hospital operators and the Trust's revenues[73](index=73&type=chunk)[81](index=81&type=chunk) - The healthcare industry is highly competitive, with facilities competing against other providers and facing increased competition from outpatient treatment and diagnostic facilities[84](index=84&type=chunk)[85](index=85&type=chunk) - Substantial dependence on UHS for approximately **31% of consolidated revenues in 2019**, coupled with potential non-renewal of leases or purchase options, could materially reduce the Trust's revenues and net income[99](index=99&type=chunk) - The phase-out of LIBOR after 2021 introduces uncertainty regarding alternative benchmark rates, potentially impacting interest payments on the Trust's variable-rate debt and derivative instruments[98](index=98&type=chunk) - Maintaining REIT status requires distributing at least **90% of taxable income**, limiting growth capital and subjecting the Trust to federal income tax if status is lost[94](index=94&type=chunk)[117](index=117&type=chunk) - Real estate ownership carries inherent risks including illiquidity, market fluctuations, maintenance costs, environmental hazards, and tenant defaults, potentially requiring significant renovation costs for new tenants[112](index=112&type=chunk)[132](index=132&type=chunk) - External events such as pandemics (e.g., Coronavirus), epidemics, or catastrophic weather could adversely impact tenant operations, public trust, and the Trust's business[113](index=113&type=chunk)[114](index=114&type=chunk) [ITEM 1B. Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The registrant reported no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[136](index=136&type=chunk) [ITEM 2. Properties](index=23&type=section&id=Item%202.%20Properties) This section details the Trust's real estate investments, including hospital facilities and medical office buildings, covering locations, occupancy, lease terms, and rental information Hospital Facilities Overview (as of 12/31/2019) | Facility Name | Type | Available Beds | 2019 Occupancy | End of Lease Term | Renewal Term (years) | Annual Minimum Rent ($) | | :-------------------------------------- | :----------- | :------------- | :--------------- | :---------------- | :------------------- | :---------------------- | | Southwest Healthcare System | Acute Care | 130 | 63% | 2021 | 10 | $2,648,000 | | McAllen Medical Center | Acute Care | 370 | 50% | 2026 | 5 | $5,485,000 | | Wellington Regional Medical Center | Acute Care | 153 | 62% | 2021 | 10 | $3,030,000 | | Evansville Rehabilitation Hospital | Specialty | 0 (vacant) | — | — | — | $0 | | Corpus Christi | Specialty | 0 (vacant) | — | — | — | $0 | | Kindred Hospital Chicago Central | Specialty | 68 | 27% | 2021 | — | $1,550,000 | - During 2019, the Trust executed **62 new or renewed leases** for medical office buildings, comprising approximately **24% of aggregate rentable square feet** (17% renewed, 7% new), with weighted-average rental rates on renewed leases remaining relatively unchanged and tenant improvement costs averaging **$15 per square foot**[142](index=142&type=chunk) Average Effective Annual Rental per Square Foot (2019 vs. 2018) | Property Type | 2019 | 2018 | | :-------------------------------- | :----- | :----- | | Hospital facilities | $20.55 | $18.28 | | MOBs, FEDs, childcare centers | $30.27 | $29.65 | | All properties (combined) | $27.41 | $25.99 | Lease Expirations by Year (as of December 31, 2019) | Year | Expiring Square Feet | Number of Tenants | Annual Rentals of Expiring Leases ($) | Percentage of Annual Rentals | | :--- | :------------------- | :---------------- | :------------------------------------ | :--------------------------- | | 2020 | 305,629 | 90 | 9,949,053 | 12% | | 2021 | 844,249 | 77 | 21,181,868 | 25% | | 2022 | 316,897 | 74 | 9,664,573 | 11% | | 2023 | 313,470 | 61 | 9,099,573 | 11% | | 2024 | 177,961 | 36 | 5,449,569 | 6% | | 2025 | 207,518 | 28 | 6,118,957 | 7% | | 2026 | 206,852 | 29 | 5,963,291 | 7% | | 2027 | 171,541 | 16 | 5,389,932 | 6% | | 2028 | 38,693 | 8 | 1,254,829 | 1% | | 2029 | 22,529 | 4 | 663,594 | 1% | | Thereafter | 127,819 | 9 | 3,788,030 | 4% | | **Total** | **3,155,434** | **433** | **86,291,092** | **100%** | [ITEM 3. Legal Proceedings](index=30&type=section&id=Item%203.%20Legal%20Proceedings) The registrant reported no legal proceedings - There are no legal proceedings[156](index=156&type=chunk) [ITEM 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the registrant - This item is not applicable[156](index=156&type=chunk) PART II [ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section covers the Trust's common equity market, shareholder matters, and equity purchases, detailing stock exchange listing, shareholder count, dividend policy, and stock price performance - The Trust's shares of beneficial interest are listed on the New York Stock Exchange under the symbol **UHT**[157](index=157&type=chunk) - As of January 31, 2020, there were approximately **307 shareholders of record**[158](index=158&type=chunk) - The Trust intends to declare quarterly dividends to comply with REIT requirements, mandating distribution of at least **90% of annual REIT taxable income** to shareholders[159](index=159&type=chunk) Indexed Stock Price Performance (Base Period Dec 2014 = $100) | Company Name / Index | Dec 15 | Dec 16 | Dec 17 | Dec 18 | Dec 19 | | :-------------------------------- | :----- | :----- | :----- | :----- | :----- | | Universal Health Realty Income Trust | $109.52 | $150.23 | $178.51 | $151.93 | $299.21 | | S&P 500 Index | $101.38 | $113.51 | $138.29 | $132.23 | $173.86 | | Peer Group | $94.32 | $94.43 | $92.99 | $106.66 | $132.65 | [ITEM 6. Selected Financial Data](index=32&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of selected financial data, including operating results, balance sheet, FFO, cash flow, and per-share data, with a reconciliation of net income to FFO Selected Financial Data (000s, except per share amounts) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :------------------------------------------ | :----- | :----- | :----- | :----- | :----- | | Total revenues | $77,163 | $76,210 | $72,348 | $67,081 | $63,950 | | Net income | $18,964 | $24,196 | $45,619 | $17,215 | $23,691 | | Real estate investments, net | $432,507 | $437,730 | $446,397 | $447,240 | $390,496 | | Total assets | $488,789 | $483,756 | $490,008 | $524,750 | $458,503 | | Total indebtedness | $273,694 | $261,281 | $256,409 | $315,717 | $252,306 | | Funds from operations (FFO) | $44,024 | $45,034 | $42,228 | $41,559 | $38,349 | | Cash provided by operating activities | $42,652 | $42,928 | $46,005 | $40,733 | $38,178 | | Basic earnings per share | $1.38 | $1.76 | $3.35 | $1.28 | $1.78 | | Diluted funds from operations per share | $3.20 | $3.28 | $3.10 | $3.09 | $2.88 | | Dividends per share | $2.720 | $2.680 | $2.640 | $2.600 | $2.560 | - Net income in 2019 included **$2.0 million in net gains** from real estate asset sales; in 2018, it included **$4.5 million in hurricane recovery proceeds**, **$1.2 million in business interruption insurance**, and **$1.7 million from a lease termination**; in 2017, it included **$2.0 million in hurricane recovery proceeds** and a **$27.2 million net gain** from the Arlington transaction[167](index=167&type=chunk) Reconciliation of Net Income to Funds From Operations (FFO) (000s) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :---------------------------------------------------- | :----- | :----- | :----- | :----- | :----- | | Net income | $18,964 | $24,196 | $45,619 | $17,215 | $23,691 | | Depreciation and amortization (consolidated) | 25,870 | 24,337 | 24,598 | 22,493 | 21,710 | | Depreciation and amortization (unconsolidated affiliates) | 1,141 | 1,036 | 1,240 | 1,851 | 1,690 | | Less gains (property exchange, sales, Arlington, hurricane) | (1,951) | (4,535) | (29,229) | — | (8,742) | | **Funds From Operations** | **$44,024** | **$45,034** | **$42,228** | **$41,559** | **$38,349** | [ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the Trust's financial condition and operations, covering business overview, critical accounting policies, detailed financial performance, hurricane impact, lease dynamics, inflation, and liquidity and capital resources - Net income decreased by **$5.2 million to $19.0 million in 2019** compared to $24.2 million in 2018, primarily due to lower hurricane recovery proceeds and lease termination income in 2018, partially offset by gains on real estate sales and increased bonus rent from UHS facilities in 2019[191](index=191&type=chunk) - Total revenues increased by **$1.0 million (1.3%) in 2019 to $77.2 million**, driven by a **$563,000 increase in bonus rental revenue** from UHS hospital facilities and a **$718,000 increase** from a short-term lease, partially offset by a **$428,000 decrease** due to a vacant hospital facility[191](index=191&type=chunk) - Funds from operations (FFO) decreased by **$1.0 million, or $0.08 per diluted share, in 2019** compared to 2018, mainly due to a **$1.7 million decrease** from a 2018 lease termination agreement and a **$500,000 decrease** from 2018 business interruption insurance proceeds, partially offset by a **$563,000 increase** in bonus rent from UHS hospital facilities[196](index=196&type=chunk) - In 2018, the Trust received approximately **$4.5 million in hurricane insurance recovery proceeds** in excess of damaged property write-downs and **$1.2 million in hurricane business interruption insurance recoveries** related to Hurricane Harvey's impact on five medical office buildings in 2017[199](index=199&type=chunk) - Two hospital facilities became vacant in 2019 due to lease expirations (Evansville, Indiana, and Corpus Christi, Texas), which had previously contributed approximately **2% of consolidated revenues in 2019, 2018, and 2017**[201](index=201&type=chunk)[202](index=202&type=chunk) - Net cash provided by operating activities was **$42.7 million in 2019**, **$42.9 million in 2018**, and **$46.0 million in 2017**, consistently exceeding dividends paid in all three years[213](index=213&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - Net cash used in investing activities was **$16.5 million in 2019**, compared to **$8.0 million in 2018** and **$39.5 million provided in 2017** (due to the St. Mary's divestiture); 2019 investing activities included **$12.3 million for capital additions**, **$5.1 million for property acquisitions**, and **$2.1 million for equity investments** in LLCs[213](index=213&type=chunk)[214](index=214&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) Revolving Credit Agreement Status (as of December 31, 2019) | Metric | Amount ($) | | :-------------------- | :------------- | | Borrowing Capacity | $300 million | | Outstanding Borrowings | $213.0 million | | Available Capacity | $87.0 million | | Maturity Date | March 2022 | | Average Interest Rate (2019) | 3.7% | Debt Compliance Ratios (as of December 31, 2019) | Covenant | UHT (2019) | Covenant (Limit) | | :-------------------- | :--------- | :--------------- | | Tangible net worth | $167,181 | > $125,000 | | Total leverage | 42.3% | < 60% | | Secured leverage | 9.1% | < 30% | | Unencumbered leverage | 38.5% | < 60% | | Fixed charge coverage | 4.0x | > 1.50x | Total Contractual Obligations (as of December 31, 2019, in thousands) | Obligation Type | Total | < 1 Year | 2-3 Years | 4-5 Years | > 5 Years | | :------------------------------------ | :------ | :------- | :-------- | :-------- | :-------- | | Long-term non-recourse debt-fixed | $61,144 | $1,913 | $14,278 | $25,442 | $19,511 | | Long-term debt-variable | $212,950 | — | $212,950 | — | — | | Estimated future interest payments | $29,555 | $8,922 | $12,620 | $2,735 | $5,278 | | Operating leases | $27,842 | $480 | $960 | $960 | $25,442 | | Construction commitments | $45,981 | $45,981 | — | — | — | | Equity and debt financing commitments | $362 | $362 | — | — | — | | **Total** | **$377,834** | **$57,658** | **$240,808** | **$29,137** | **$50,231** | [ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Trust's exposure to market risks, particularly interest rate risk and the LIBOR transition, detailing the use of financial instruments to manage this risk - The Financial Conduct Authority (FCA) intends to stop compelling banks to submit rates for LIBOR after 2021, with SOFR identified as the preferred alternative, creating uncertainty for LIBOR-indexed contracts[238](index=238&type=chunk)[240](index=240&type=chunk) - The Trust entered into a **$50 million notional interest rate swap in September 2019** (fixed rate **1.144%**, matures September 2024) and a **$35 million notional swap in January 2020** (fixed rate **1.4975%**, matures January 2024) to manage interest rate risk[242](index=242&type=chunk)[243](index=243&type=chunk) - Based on variable rate debt outstanding as of December 31, 2019, and accounting for the interest rate swap, each **1% change in interest rates** would impact the Trust's net income by approximately **$1.6 million**[250](index=250&type=chunk) Financial Instruments Sensitive to Interest Rate Changes (as of December 31, 2019, in thousands) | Type | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | Average Interest Rate | | :---------------- | :--- | :--- | :----- | :----- | :----- | :--------- | :------ | :----------------- | | Fixed rate debt | $1,913 | $2,081 | $12,197 | $11,892 | $13,550 | $19,511 | $61,144 | 4.3% | | Variable rate debt | — | — | $212,950 | — | — | — | $212,950 | 3.0% | | Interest rate swaps (notional) | — | — | — | — | $50,000 | — | $50,000 | 1.1% | [ITEM 8. Financial Statements and Supplementary Data](index=51&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements (Balance Sheets, Statements of Income, Comprehensive Income, Changes in Equity, and Cash Flows) and the independent auditor's report included elsewhere in the Annual Report - The Consolidated Balance Sheets, Consolidated Statements of Income, Comprehensive Income, Changes in Equity and Cash Flows, along with the reports of KPMG LLP, are included elsewhere in this Annual Report[251](index=251&type=chunk) [ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=51&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The registrant reported no changes in or disagreements with accountants on accounting and financial disclosure - There were no changes in or disagreements with accountants on accounting and financial disclosure[251](index=251&type=chunk) [ITEM 9A. Controls and Procedures](index=51&type=section&id=Item%209A.%20Controls%20and%20Procedures) This section details management's conclusion on the effectiveness of disclosure controls and internal control over financial reporting, including changes due to ASC 842 adoption, and the independent auditor's unqualified opinion - The CEO and CFO concluded that the Trust's disclosure controls and procedures were **effective as of December 31, 2019**[252](index=252&type=chunk) - Changes were implemented to internal controls relating to leases due to the adoption of **ASC 842 on January 1, 2019**, including new policies and enhanced contract review requirements[253](index=253&type=chunk) - Management concluded that the Trust maintained **effective internal control over financial reporting as of December 31, 2019**, based on criteria established in the COSO framework[257](index=257&type=chunk) - KPMG LLP, the independent registered public accounting firm, expressed an **unqualified opinion** on the effectiveness of the Trust's internal control over financial reporting as of December 31, 2019[259](index=259&type=chunk) [ITEM 9B. Other Information](index=54&type=section&id=Item%209B.%20Other%20Information) The registrant reported no other information - No other information was reported[265](index=265&type=chunk) PART III [ITEM 10. Directors, Executive Officers and Corporate Governance](index=54&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates by reference information on Directors, Executive Officers, and Corporate Governance from the Trust's definitive proxy statement for the 2020 Annual Meeting of Shareholders - Information regarding Directors, Executive Officers, and Corporate Governance is incorporated by reference from the definitive proxy statement for the 2020 Annual Meeting of Shareholders[267](index=267&type=chunk) [ITEM 11. Executive Compensation](index=54&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information regarding executive compensation from the Trust's definitive proxy statement for the 2020 Annual Meeting of Shareholders - Information regarding Executive Compensation is incorporated by reference from the definitive proxy statement for the 2020 Annual Meeting of Shareholders[268](index=268&type=chunk) [ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=54&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information on security ownership of certain beneficial owners and management, and related stockholder matters, from the Trust's definitive proxy statement for the 2020 Annual Meeting of Shareholders - Information regarding Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters is incorporated by reference from the definitive proxy statement for the 2020 Annual Meeting of Shareholders[269](index=269&type=chunk) [ITEM 13. Certain Relationships and Related Transactions, and Director Independence](index=54&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information on certain relationships and related transactions, and director independence, from the Trust's definitive proxy statement for the 2020 Annual Meeting of Shareholders - Information regarding Certain Relationships and Related Transactions, and Director Independence is incorporated by reference from the definitive proxy statement for the 2020 Annual Meeting of Shareholders[270](index=270&type=chunk) [ITEM 14. Principal Accountant Fees and Services](index=54&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section incorporates by reference information regarding principal accountant fees and services from the Trust's definitive proxy statement for the 2020 Annual Meeting of Shareholders - Information regarding Principal Accountant Fees and Services is incorporated by reference from the definitive proxy statement for the 2020 Annual Meeting of Shareholders[271](index=271&type=chunk) PART IV [ITEM 15. Exhibits, Financial Statement Schedules](index=55&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed as part of the 10-K report, including the Declaration of Trust, Advisory Agreement, Lease Forms, Credit Agreement, and various certifications - The report includes financial statements, financial statement schedules, and various exhibits such as the Declaration of Trust, Amended and Restated Bylaws, Amended and Restated Advisory Agreement, Form of Leases, Credit Agreement, and certifications from the CEO and CFO[274](index=274&type=chunk)[277](index=277&type=chunk) [ITEM 16. Form 10-K Summary](index=57&type=section&id=Item%2016.%20Form%2010-K%20Summary) The registrant reported no Form 10-K Summary - No Form 10-K Summary was reported[278](index=278&type=chunk) SIGNATURES [SIGNATURES](index=58&type=section&id=SIGNATURES) This section contains the signatures of the registrant's authorized officers and trustees, certifying the filing of the report - The report was signed by Alan B. Miller, Chairman of the Board, Chief Executive Officer and President, and other Trustees and the Chief Financial Officer on **February 26, 2020**[281](index=281&type=chunk)[282](index=282&type=chunk) INDEX TO FINANCIAL STATEMENTS AND SCHEDULE [Consolidated Financial Statements](index=59&type=section&id=Consolidated%20Financial%20Statements) This section provides an index to the consolidated financial statements and Schedule III, including the Independent Auditor's Report, Balance Sheets, Statements of Income, Comprehensive Income, Changes in Equity, Cash Flows, and accompanying notes - The index lists the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Income, Comprehensive Income, Changes in Equity, Cash Flows, and Notes to the Consolidated Financial Statements[284](index=284&type=chunk) [Report of Independent Registered Public Accounting Firm](index=60&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP provided an unqualified opinion on the consolidated financial statements and internal control over financial reporting, identifying the assessment of net real estate investments' carrying value as a critical audit matter - KPMG LLP issued an **unqualified opinion** on the consolidated financial statements for the three-year period ended December 31, 2019[286](index=286&type=chunk) - KPMG LLP also issued an **unqualified opinion** on the effectiveness of the Company's internal control over financial reporting as of December 31, 2019[287](index=287&type=chunk) - The assessment of the carrying value of net real estate investments was identified as a **critical audit matter** due to the high degree of subjective and complex auditor judgment required in evaluating impairment indicators and assumptions[293](index=293&type=chunk)[294](index=294&type=chunk) - The Company changed its method of accounting for leases as of **January 1, 2019**, due to the adoption of Accounting Standards Codification Topic 842, Leases[288](index=288&type=chunk) [Consolidated Balance Sheets—December 31, 2019 and December 31, 2018](index=62&type=section&id=Consolidated%20Balance%20Sheets%E2%80%94December%2031%2C%202019%20and%20December%2031%2C%202018) Presents the consolidated balance sheets for Universal Health Realty Income Trust as of December 31, 2019, and December 31, 2018, detailing assets, liabilities, and equity Consolidated Balance Sheet Data (amounts in thousands) | Metric | Dec 31, 2019 | Dec 31, 2018 | | :------------------------------------------ | :----------- | :----------- | | Net Real Estate Investments | $432,507 | $437,730 | | Investments in limited liability companies ("LLCs") | $6,918 | $5,019 | | Cash and cash equivalents | $6,110 | $5,036 | | Intangible assets, net | $14,553 | $17,407 | | Right-of-use land assets, net | $8,944 | — | | Total Assets | $488,789 | $483,756 | | Line of credit borrowings | $212,950 | $196,400 | | Mortgage notes payable, non-recourse to us, net | $60,744 | $64,881 | | Ground lease liabilities, net | $8,944 | — | | Total Liabilities | $307,055 | $285,146 | | Total Equity | $181,734 | $198,610 | [Consolidated Statements of Income—Years Ended December 31, 2019, 2018 and 2017](index=63&type=section&id=Consolidated%20Statements%20of%20Income%E2%80%94Years%20Ended%20December%2031%2C%202019%2C%202018%20and%202017) Presents the consolidated statements of income for the years ended December 31, 2019, 2018, and 2017, showing revenues, expenses, net income, and earnings per share Consolidated Statements of Income Data (amounts in thousands, except per share amounts) | Metric | 2019 | 2018 | 2017 | | :------------------------------------------ | :----- | :----- | :----- | | Lease revenue - UHS facilities | $23,095 | $22,661 | $22,611 | | Lease revenue - Non-related parties | $52,020 | $50,466 | $48,642 | | Total Revenues | $77,163 | $76,210 | $72,348 | | Depreciation and amortization | $25,870 | $24,976 | $25,116 | | Advisory fees to UHS | $3,974 | $3,806 | $3,577 | | Other operating expenses | $21,569 | $20,723 | $19,511 | | Net income | $18,964 | $24,196 | $45,619 | | Basic earnings per share | $1.38 | $1.76 | $3.35 | | Diluted earnings per share | $1.38 | $1.76 | $3.35 | - Bonus rental on UHS hospital facilities amounted to **$5,551 thousand in 2019**, **$4,988 thousand in 2018**, and **$4,917 thousand in 2017**[302](index=302&type=chunk) [Consolidated Statements of Comprehensive Income —Years Ended December 31, 2019, 2018 and 2017](index=64&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%E2%80%94Years%20Ended%20December%2031%2C%202019%2C%202018%20and%202017) Presents the consolidated statements of comprehensive income for the years ended December 31, 2019, 2018, and 2017, including net income and other comprehensive income/loss components Consolidated Statements of Comprehensive Income (amounts in thousands) | Metric | 2019 | 2018 | 2017 | | :------------------------------------------ | :----- | :----- | :----- | | Net Income | $18,964 | $24,196 | $45,619 | | Unrealized derivative gain/(loss) on cash flow hedges | $878 | $(12) | $39 | | **Total comprehensive income** | **$19,842** | **$24,184** | **$45,658** | [Consolidated Statements of Changes in Equity—Years Ended December 31, 2019, 2018 and 2017](index=65&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity%E2%80%94Years%20Ended%20December%2031%2C%202019%2C%202018%20and%202017) Presents the consolidated statements of changes in equity for 2019, 2018, and 2017, detailing changes in common shares, capital in excess of par value, cumulative net income, cumulative dividends, and accumulated other comprehensive income Consolidated Statements of Changes in Equity (amounts in thousands) | Metric | Jan 1, 2017 | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2019 | | :-------------------------------- | :---------- | :----------- | :----------- | :----------- | | Total Equity | $191,277 | $210,561 | $198,610 | $181,734 | | Number of Common Shares (thousands) | 13,599 | 13,735 | 13,747 | 13,757 | | Capital in excess of par value | $255,656 | $265,335 | $266,031 | $266,723 | | Cumulative net income | $572,501 | $618,120 | $642,316 | $661,280 | | Cumulative dividends | $(637,121) | $(673,175) | $(710,006) | $(747,417) | | Stock-based compensation expense | — | $538 | $571 | $702 | | Dividends per share | $2.64 | $2.64 | $2.68 | $2.72 | [Consolidated Statements of Cash Flows—Years Ended December 31, 2019, 2018 and 2017](index=66&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%E2%80%94Years%20Ended%20December%2031%2C%202019%2C%202018%20and%202017) Presents the consolidated statements of cash flows for the years ended December 31, 2019, 2018, and 2017, categorizing cash flows into operating, investing, and financing activities Consolidated Statements of Cash Flows (amounts in thousands) | Activity | 2019 | 2018 | 2017 | | :------------------------------------------ | :----- | :----- | :----- | | Net cash provided by operating activities | $42,652 | $42,928 | $46,005 | | Net cash (used in)/provided by investing activities | $(16,472) | $(7,959) | $39,461 | | Net cash used in financing activities | $(25,106) | $(33,320) | $(86,009) | | Increase/(decrease) in cash and cash equivalents | $1,074 | $1,649 | $(543) | | Cash and cash equivalents, end of year | $6,110 | $5,036 | $3,387 | - Supplemental disclosures show interest paid of **$10,025 thousand in 2019**, **$9,469 thousand in 2018**, and **$9,692 thousand in 2017**; invoices accrued for construction and improvements were **$1,485 thousand in 2019**, **$924 thousand in 2018**, and **$546 thousand in 2017**[311](index=311&type=chunk) [Notes to the Consolidated Financial Statements](index=67&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section details the Trust's organization, accounting policies, UHS relationships, construction, acquisitions, lease accounting, debt, dividends, incentive plans, equity affiliates, segment reporting, and Hurricane Harvey impact - The Trust is a Maryland real estate investment trust (REIT) that invests in **71 healthcare and human service related facilities** across **20 states** as of February 26, 2020[314](index=314&type=chunk) - Net intangible assets totaled **$14.6 million as of December 31, 2019**, primarily consisting of in-place lease values (**$12.8 million net**) and above-market leases (**$1.5 million net**)[320](index=320&type=chunk) - Consolidated depreciation expense was **$21.8 million in 2019**, **$20.5 million in 2018**, and **$19.7 million in 2017**[321](index=321&type=chunk) - The Trust accounts for its **five unconsolidated investments in LLCs/LPs** (**33% to 95% non-controlling ownership interests**) using the equity method of accounting[327](index=327&type=chunk)[329](index=329&type=chunk)[410](index=410&type=chunk) - Lease revenue from McAllen Medical Center, a related party, represented approximately **10% of consolidated revenues in 2019**, **9% in 2018**, and **10% in 2017**[340](index=340&type=chunk) - The Trust adopted **ASC 842, Leases, on January 1, 2019**, recognizing right-of-use assets and lease liabilities for ground leases where it is the lessee, totaling approximately **$8.9 million each as of December 31, 2019**[345](index=345&type=chunk)[381](index=381&type=chunk) - In 2019, the Trust initiated construction of Texoma Medical Plaza II (MOB, **95% interest**) and Clive Behavioral Health Hospital (**108-bed, wholly-owned**), both expected to be completed in late 2020[364](index=364&type=chunk)[365](index=365&type=chunk) - The Trust acquired Bellin Health Family Medicine Center for **$5.1 million** in late 2019 and sold Kings Crossing II MOB for **$2.5 million** (net, **$1.7 million gain**) and a parcel of land for **$250,000** (gain) in 2019[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) Minimum Future Base Rents from Non-Cancelable Leases (Consolidated, in thousands) | For the year ended December 31, | 2019 | 2018 | | :------------------------------ | :----- | :----- | | 2020 | $57,102 | $50,291 | | 2021 | $50,580 | $45,357 | | 2022 | $35,030 | $30,089 | | 2023 | $28,899 | $24,972 | | 2024 | $23,147 | $67,288 | | Thereafter | $55,482 | $274,491 | | **Total minimum base rents** | **$250,240** | **$274,491** | Summarized Combined Statements of Income for Equity Affiliates (amounts in thousands) | Metric | 2019 | 2018 | 2017 | | :------- | :----- | :----- | :----- | | Revenues | $10,063 | $9,592 | $10,673 | | Operating expenses | $4,046 | $3,557 | $3,883 | | Depreciation and amortization | $1,758 | $1,772 | $1,988 | | Interest, net | $1,295 | $1,311 | $1,570 | | Net income | $2,964 | $2,952 | $3,232 | | Our share of net income | $1,796 | $1,771 | $2,416 | Summarized Combined Balance Sheets for Equity Affiliates (amounts in thousands) | Metric | Dec 31, 2019 | Dec 31, 2018 | | :------------------------------------------ | :----------- | :----------- | | Net property, including construction in progress | $33,207 | $31,818 | | Other assets | $7,452 | $3,251 | | Total assets | $40,659 | $35,069 | | Other liabilities | $6,785 | $2,717 | | Mortgage notes payable, non-recourse to us | $26,650 | $27,256 | | Equity | $7,224 | $5,096 | | Total liabilities and equity | $40,659 | $35,069 | Quarterly Results (Unaudited, 2019, amounts in thousands) | Metric | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Total 2019 | | :-------------------------------- | :------ | :------ | :------ | :------ | :--------- | | Revenues | $19,112 | $19,326 | $19,866 | $18,859 | $77,163 | | Net income | $4,212 | $4,261 | $4,653 | $5,838 | $18,964 | | Basic earnings per share | $0.31 | $0.31 | $0.34 | $0.43 | $1.38 | | Diluted earnings per share | $0.31 | $0.31 | $0.34 | $0.42 | $1.38 | Quarterly Results (Unaudited, 2018, amounts in thousands) | Metric | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | Total 2018 | | :-------------------------------- | :------ | :------ | :------ | :------ | :--------- | | Revenues | $18,539 | $20,111 | $18,828 | $18,732 | $76,210 | | Net income | $9,604 | $5,805 | $4,374 | $4,413 | $24,196 | | Basic earnings per share | $0.70 | $0.42 | $0.32 | $0.32 | $1.76 | | Diluted earnings per share | $0.70 | $0.42 | $0.32 | $0.32 | $1.76 | [Schedule III—Real Estate and Accumulated Depreciation—December 31, 2019](index=86&type=section&id=Schedule%20III%E2%80%94Real%20Estate%20and%20Accumulated%20Depreciation%E2%80%94December%2031%2C%202019) This schedule details the Trust's real estate properties, including initial cost, improvements, basis adjustments, gross amount, accumulated depreciation, acquisition/improvement dates, and average depreciable life for each facility - The schedule provides a detailed listing of each real estate property, including its initial cost, building and improvements, adjustments to basis, gross amount carried at year-end, accumulated depreciation as of December 31, 2019, and average depreciable life[426](index=426&type=chunk)[428](index=428&type=chunk)[430](index=430&type=chunk) - The total gross amount of real estate investments carried at the end of 2019 was **$627,395 thousand**, with accumulated depreciation of **$194,888 thousand**[430](index=430&type=chunk) [Notes to Schedule III—December 31, 2019](index=89&type=section&id=Notes%20to%20Schedule%20III%E2%80%94December%2031%2C%202019) This section provides reconciliations of real estate properties and accumulated depreciation from January 1, 2017, to December 31, 2019, detailing additions, acquisitions, disposals, and depreciation expense Reconciliation of Real Estate Properties (amounts in thousands) | Metric | 2019 | 2018 | 2017 | | :---------------------- | :----- | :----- | :----- | | Balance at January 1 | $611,046 | $599,776 | $585,828 | | Additions | $12,882 | $8,641 | $12,492 | | Acquisitions | $4,510 | $3,222 | $9,931 | | Disposals/Divestitures | $(1,043) | $(593) | $(8,475) | | **Balance at December 31** | **$627,395** | **$611,046** | **$599,776** | Reconciliation of Accumulated Depreciation (amounts in thousands) | Metric | 2019 | 2018 | 2017 | | :---------------------- | :----- | :----- | :----- | | Balance at January 1 | $173,316 | $153,379 | $138,588 | | Disposals/Divestitures | $(220) | $(593) | $(4,896) | | Depreciation expense | $21,792 | $20,530 | $19,687 | | **Balance at December 31** | **$194,888** | **$173,316** | **$153,379** |

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9321 UNIVERSAL HEALTH REALTY INCOME TRUST (Exact name of registrant as specified in its charter) MARYLAND 23-6858580 (State or ...