KING OF PRUSSIA, Pa., April 25 Universal HealthRealty Income Trust (NYSE: UHT) announced today that for the quarter endedMarch 31, 2008, net income was $4.2 million, or $.35 per diluted share, ascompared to $5.8 million, or $.49 per diluted share, during the same quarterin the prior year. Included in our financial results during the first quarterof 2008 was increased depreciation expense of $329,000, or $.03 per dilutedshare, recorded by certain of our unconsolidated limited liability companies("LLC") in connection with the newly constructed medical office buildingswhich opened during the fourth quarter of 2007 (as discussed below) and thedepreciation expense recorded on the replacement assets received fromUniversal Health Services, Inc. in connection with the previously disclosedChalmette Medical Center ("Chalmette") asset exchange and substitutiontransaction. Favorably impacting net income during the quarter ended March 31,2007 was a combined gain of $1,041,000, or $.09 per diluted share, consistingof: (i) a gain of $789,000, or $.07 per diluted share, related to the recoveryof replacement real estate assets in connection with the Chalmette assetexchange and substitution agreement, and; (ii) a gain of $252,000, or $.02 perdiluted share, resulting from the sale of real property by a LLC.
Funds from operations ("FFO") were $7.3 million, or $.62 per dilutedshare, during the first quarter of 2008 as compared to $7.4 million, or $.62per diluted share, during the comparable quarter of the prior year. The firstquarter dividend of $.58 per share was paid on March 31, 2008.
During the fourth quarter of 2007, three newly constructed medical officebuildings, which are owned by LLCs in which we hold 95%, non-controllingownership interests, were completed and opened as follows: (i) Canyon SpringsMedical Plaza located in Gilbert, Arizona; (ii) Phoenix Children's East ValleyCare Center located in Gilbert, Arizona, and; (iii) Centennial Hills MedicalOffice Building I located in Las Vegas, Nevada. The Phoenix Children's EastValley Care Center is a single tenant facility which is fully occupiedpursuant to the terms of a twenty-year lease. Leasing activity at the CanyonSprings Medical Plaza and Centennial Hills Medical Office Building I, whichare multi-tenant facilities, continued to improve during the first quarter of2008 as these facilities continue their initial lease-up.
In addition, as of March 31, 2008, construction continues on three newmedical office buildings, which are owned by LLCs, as follows: (i) PalmdaleMedical Plaza located in Palmdale, California, which is scheduled to becompleted and opened during the second quarter of 2008; (ii) SummerlinHospital Medical Office Building III located in Las Vegas, Nevada, which isscheduled to be completed and opened during the fourth quarter of 2008, and;(iii) Deer Valley Medical Office Building III located in Phoenix, Arizona,which is scheduled to be completed and opened during the second quarter of2009.
Also, in February of 2008, we purchased the Kindred Hospital; CorpusChristi, a 74-bed long-term acute care hospital located in Corpus Christi,Texas for a total purchase price of $8.1 million. We paid $4.7 million in cashand assumed $3.4 million of third-party mortgage debt that is non-recourse tous. The lease payments on this facility are unconditionally guaranteed byKindred Healthcare, Inc. until its scheduled expiration in June, 2019.
At March 31, 2008, our shareholders' equity was $157.8 million and ourliabilities for borrowed funds were $49.7 million, including mortgage debt ofconsolidated entities, which is non-recourse to us, totaling $23.9 million.
Universal Health Realty Income Trust, a real estate investment trust,invests in healthcare and human service related facilities including acutecare hospitals, behavioral healthcare facilities, rehabilitation hospitals,sub-acute care fa