Universal Health Realty me Trust(US:UHT)2025-11-07 21:15Real Estate Investments - As of September 30, 2025, the company has 77 real estate investments or commitments located in 21 states, including 6 hospital facilities and 61 medical/office buildings[99]. Revenue Sources - Approximately 39% of the company's consolidated revenues during the three-month period ended September 30, 2025, were derived from one operator, UHS[103]. Financial Performance - Net income for the three-month period ended September 30, 2025, was $4.0 million, unchanged from the same period in 2024[111]. - Revenues increased by $808,000 to $25.3 million during the three-month period ended September 30, 2025, compared to $24.5 million in the same period of 2024[112]. - For the nine-month period ended September 30, 2025, net income was $13.3 million, a decrease of $1.3 million from $14.6 million in the corresponding period of 2024[111]. - Funds From Operations (FFO) increased by $908,000 to $12.2 million during the third quarter of 2025, compared to $11.3 million in the third quarter of 2024[119]. - FFO for the first nine months of 2025 decreased by $166,000 to $35.9 million, compared to $36.1 million in the same period of 2024[120]. Interest and Expenses - The increase in interest rates over the past few years has significantly raised the company's interest expense, negatively impacting net income and cash provided by operating activities[104]. - Interest expense remained stable at $4.8 million for the three-month periods ended September 30, 2025, and 2024, while it increased to $14.2 million from $13.9 million for the nine-month periods[122]. - The average effective cost of borrowings decreased to 5.93% during the third quarter of 2025, down from 6.93% in the comparable quarter of 2024[122]. - Other operating expenses totaled $19.8 million for the nine-month period ended September 30, 2025, compared to $19.5 million in the same period of 2024[117]. Legislative and Economic Risks - Legislation enacted on July 4, 2025, may limit Medicaid enrollment and expenditure, potentially reducing revenues for the operators of the company's properties[104]. - The company faces inflationary pressures affecting its tenants, which could impact their ability to make rental payments[104]. - The company is subject to various legislative initiatives that may result in major changes in the healthcare delivery system, potentially impacting operators' financial conditions[105]. - The Budget Control Act of 2011 has imposed annual Medicare payment reductions, which may affect the operators of the company's properties[105]. - The company faces potential negative financial impacts from legislative changes affecting health care delivery and reimbursement[110]. - The company is exposed to risks from economic conditions that could lead to declines in patient volumes and occupancy rates at its medical office buildings[105]. Cash Flow and Financing Activities - Net cash provided by operating activities increased to $35.5 million for the nine months ended September 30, 2025, up from $33.8 million in the same period of 2024, representing a $1.7 million increase[124]. - Net cash used in investing activities was $12.4 million during the first nine months of 2025, compared to $11.2 million in the same period of 2024[126]. - Net cash used in financing activities decreased to $23.2 million for the nine months ended September 30, 2025, down from $24.4 million in the same period of 2024[129]. - Dividends paid amounted to $30.7 million in the first nine months of 2025, compared to $30.2 million in the same period of 2024[135]. - The company declared and paid dividends that were approximately $4.8 million greater than net cash provided by operating activities during the first nine months of 2025[135]. - The company received $8.2 million of net borrowings pursuant to its Credit Agreement during the nine months ended September 30, 2025[130]. - The company expects to finance all capital expenditures and acquisitions using internally generated funds and additional funds from its Credit Agreement[139]. Borrowings and Credit Agreement - The company had $357.1 million of outstanding borrowings under its $425 million Credit Agreement as of September 30, 2025, with $67.9 million of available borrowing capacity[146]. - The maturity date of the credit agreement has been extended to September 30, 2028, from July 2025, and the aggregate borrowing capacity has increased to $425 million from $375 million[142]. - The applicable margin over the Adjusted Term SOFR rate for revolving loans was 1.20% as of September 30, 2025[144]. - Aggregate borrowings under the credit agreement for the quarter ended September 30, 2025, were $14.9 million, compared to $17.2 million for the same quarter in 2024[147]. - The company remains in compliance with all covenants in the credit agreement as of September 30, 2025[148]. Tangible Net Worth and Leverage - As of September 30, 2025, the company's tangible net worth was $152.5 million, exceeding the covenant requirement of $125 million[149]. - The total leverage ratio was 44.0% as of September 30, 2025, remaining below the maximum limit of 60%[149]. - The company had various non-recourse mortgages with a combined carrying value of approximately $18.7 million as of September 30, 2025[151]. - The fair value of the mortgages outstanding as of September 30, 2025, was approximately $17.6 million, compared to a carrying value of approximately $18.7 million[151]. - The company has no off-balance sheet arrangements as of September 30, 2025[152].