-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AEaZXBPigoF8fkQyvdeqF7fjaMMry18h1+PJqaDha6+NUmAbYH3FdcVZNNqGGmJR zztTeqZ37lxxMHlu7IzQOw== 0000950135-95-000992.txt : 19950426 0000950135-95-000992.hdr.sgml : 19950426 ACCESSION NUMBER: 0000950135-95-000992 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950425 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDITRUST CENTRAL INDEX KEY: 0000774350 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046532031 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09582 FILM NUMBER: 95530913 BUSINESS ADDRESS: STREET 1: 197 FIRST AVENUE CITY: NEEDHAM STATE: MA ZIP: 02194 BUSINESS PHONE: 6174336000 MAIL ADDRESS: STREET 1: 197 FIRST AVENUE CITY: NEEDHAM STATE: MA ZIP: 02194 10-Q 1 MEDITRUST 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 X Quarterly report pursuant to Section 13 or 15(d) of the Securities - --- Exchange Act of 1934 For The Quarterly Period Ended MARCH 31, 1995 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 0-14022 MEDITRUST --------- (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-6532031 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 197 First Avenue Needham Heights, Massachusetts 02194 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 433-6000 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of March 31, 1995, there were outstanding 48,693,576 shares of beneficial interest, without par value. 2 MEDITRUST FORM 10-Q INDEX
Page (s) -------- Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets at March 31, 1995 (unaudited) and December 31, 1994 3 Consolidated Statements of Income for the three months ended March 31, 1995 and 1994 (unaudited) 4 Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994 (unaudited) 5 Notes to Consolidated Financial Statements (unaudited) 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 10 Signatures 10 - 2 -
3 MEDITRUST PART I. FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS
March 31 December 31 1995 1994 -------- ----------- (Unaudited) (Audited) (In thousands) ASSETS Real estate investments (Note 3): Land . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,060 $ 42,060 Buildings and improvements, net of accumulated depreciation of $69,792 and $65,918, respectively . . . . . . . . . . . . . . 580,231 518,428 Real estate mortgages . . . . . . . . . . . . . . . . . . 968,865 923,741 ----------- ----------- Total real estate investments . . . . . . . . . . . . 1,591,156 1,484,229 Other assets, net . . . . . . . . . . . . . . . . . . . . . . 56,824 54,246 Cash and cash equivalents . . . . . . . . . . . . . . . . . . 44,224 39,937 Fees, interest and other receivables . . . . . . . . . . . . 22,123 16,718 ----------- ----------- Total assets . . . . . . . . . . . . . . . . . . . . $ 1,714,327 $ 1,595,130 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Indebtedness (Note 4): Senior unsecured notes, net . . . . . . . . . . . . . . . $ 273,044 $ 285,360 Senior mortgage notes, net . . . . . . . . . . . . . . . . 21,257 21,206 Convertible debentures, net . . . . . . . . . . . . . . . 222,500 231,277 Bank notes payable, net . . . . . . . . . . . . . . . . . 49,747 168,645 Bonds and mortgages payable, net . . . . . . . . . . . . . 59,047 59,264 ----------- ----------- Total indebtedness . . . . . . . . . . . . . . . . . 625,595 765,752 Deferred income . . . . . . . . . . . . . . . . . . . . . . . 12,704 12,559 Accrued expenses and other liabilities . . . . . . . . . . . 48,866 46,672 ----------- ----------- Total liabilities . . . . . . . . . . . . . . . . . 687,165 824,983 ----------- ----------- Commitments and contingencies (Note 3) Shareholders' equity (Notes 4, 5 and 6): Shares of beneficial interest without par value: Unlimited shares authorized: 48,694 and 39,619 shares issued and outstanding in 1995 and 1994, respectively . . . . . 1,119,456 860,071 Distributions in excess of net income . . . . . . . . . (92,294) (89,924) Total shareholders' equity . . . . . . . . . . . . . . . 1,027,162 770,147 ----------- ----------- Total liabilities and shareholders' equity . . . . . $ 1,714,327 $ 1,595,130 =========== ===========
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company's Form 10-K for the year ended December 31, 1994, are an integral part of these financial statements. - 3 - 4 MEDITRUST CONSOLIDATED STATEMENTS OF INCOME for the three months ended March 31, 1995 and 1994 (Unaudited) __________
1995 1994 ---- ---- (In thousands, except per Share amounts) Revenues: Rental income . . . . . . . . . . . . . . . . . . . . $ 21,056 $ 21,314 Interest income . . . . . . . . . . . . . . . . . . . 27,877 19,681 -------- --------- Total revenues . . . . . . . . . . . . . . . . . . 48,933 40,995 -------- --------- Expenses: Interest . . . . . . . . . . . . . . . . . . . . . . 18,474 16,415 Depreciation and amortization . . . . . . . . . . . . 4,343 4,422 General and administrative . . . . . . . . . . . . . 1,933 2,453 -------- --------- Total expenses . . . . . . . . . . . . . . . . . . 24,750 23,290 -------- --------- Net income . . . . . . . . . . . . . . . . . . . . . . . $ 24,183 $ 17,705 ======== ========= Net income per share, based on 40,594 and 33,438 weighted average Shares outstanding in 1995 and 1994, respectively . . . . . $ .60 $ .53 ======== ==========
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company's Form 10-K for the year ended December 31, 1994, are an integral part of these financial statements. - 4 - 5 MEDITRUST CONSOLIDATED STATEMENTS OF CASH FLOWS for the three months ended March 31, 1995 and 1994 (Unaudited)
1995 1994 ---- ---- (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income . . . . . . . . . . . . . . . . . $ 24,183 $ 17,705 Depreciation of real estate . . . . . . . . . 3,874 3,958 Goodwill amortization . . . . . . . . . . . . 389 389 Shares issued for compensation . . . . . . . 202 300 Other depreciation and amortization and other items, net 794 698 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES AVAILABLE FOR DISTRIBUTION . . . . . . . . . 29,442 23,050 Net change in other assets and liabilities . (3,937) 649 -------- -------- Net cash provided by operating activities . . 25,505 23,699 --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from equity offering . . . . . . . . 263,594 Proceeds from convertible debenture offering 90,000 Proceeds from bank notes . . . . . . . . . . 161,700 69,000 Proceeds from stock options . . . . . . . . . 48 1,954 Equity offering and debt issuance costs . . . (13,594) (2,438) Repayment of bank notes . . . . . . . . . . . (280,700) (88,000) Repayment of senior unsecured notes . . . . . (12,500) (12,500) Principal payments on bonds and mortgages payable (223) (256) Distributions to shareholders . . . . . . . . (26,553) (21,604) -------- ------- Net cash provided by financing activities 91,772 36,156 --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Investment in real estate mortgages and development funding . . . . . . . . . . . (46,665) (51,723) Additions of real estate . . . . . . . . . . (65,677) (223) Principal payments on real estate mortgages . 1,537 987 Working capital advances . . . . . . . . . . (10,865) (9,815) Collection of receivables and repayment of working capital advances . . . . . . . . . 8,680 12,264 --------- -------- Net cash used in investing activities . . (112,990) (48,510) -------- ------- Net increase in cash and cash equivalents 4,287 11,345 Cash and cash equivalents at: Beginning of period . . . . . . . . . . . 39,937 16,306 --------- -------- End of period . . . . . . . . . . . . . . $ 44,224 $ 27,651 ========= ======== Supplemental disclosure of cash flow information (see Note 2).
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company's Form 10-K for the year ended December 31, 1994, are an integral part of these financial statements. - 5 - 6 MEDITRUST NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Summary of Significant Accounting Policies ------------------------------------------ Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted in this Form 10-Q in compliance with the Rules and Regulations of the Securities and Exchange Commission. However, in the opinion of Meditrust ("the Company"), the disclosures contained in this Form 10-Q are adequate to make the information presented not misleading. See Report on Form 10-K for the year ended December 31, 1994 (and the Report on Form 8-K dated March 8, 1995 incorporated by reference therein) for additional information relevant to significant accounting policies followed by the Company. Basis of Presentation --------------------- In the opinion of the Company, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position as of March 31, 1995 and the results of operations and cash flows for each of the three-month periods ended March 31, 1995 and 1994. The results of operations for the three-month period ended March 31, 1995 are not necessarily indicative of the results which may be expected for the entire year. Certain 1994 amounts have been reclassified to conform to the 1995 presentation. 2. Supplemental Cash Flow Information ----------------------------------
Three Months Ended March 31, ----------------------- 1995 1994 ------- -------- (Dollars in thousands) Interest paid during the period . . . . . . . . . . . . . $14,809 $ 16,344 Non-cash financing transaction: Shares issued for conversion of debentures . . . . . . 9,129 30,106
3. Real Estate Investments ----------------------- During the three months ended March 31, 1995, the Company provided permanent mortgage financing of $34,898,000 for five long-term care facilities and two retirement living facilities located in Kansas, Kentucky, Massachusetts, Nevada, Tennessee, Utah and Washington. In addition, the Company also provided net development financing of $11,767,000 for four long-term care facilities and six medical office buildings under construction. During the three months ended March 31, 1995, the Company received principal payments on real estate mortgages of $1,537,000. During the three months ended March 31, 1995, the Company acquired for $65,650,000 an acute care hospital located in Arizona and provided $27,000 for an addition to a facility currently owned by the Company. - 6 - 7 MEDITRUST NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued (Unaudited) At March 31, 1995, the Company was committed to providing additional financings of approximately $19,000,000 relating to four long-term care facilities and six medical office buildings currently under construction. 4. Indebtedness and Shareholders' Equity ------------------------------------- In March 1995, the Company completed the sale of 8,750,000 shares at $30.125 per Share. The net proceeds to the Company from this offering were used to repay short-term borrowings and for investments in additional health care facilities. During the three months ended March 31, 1995, $4,160,000 of principal amount of 9% convertible debentures were converted into 154,064 Shares and $4,969,000 of principal amount of 7% convertible debentures were converted into 162,250 Shares. The Company has a total of $205,000,000 in unsecured credit facilities bearing interest at the lenders' prime rate or LIBOR plus 1.0% to 1.5% of which approximately $149,000,000 is available at March 31, 1995. In January 1995, the Company entered into an 8% interest rate cap for $100,000,000 of its unsecured credit facilities. 5. Distributions Paid to Shareholders ---------------------------------- On February 15, 1995, the Company paid a dividend of $.6675 per Share to shareholders of record on January 31, 1995. This dividend related to the period from October 1, 1994 through December 31, 1994. 6. Subsequent Events ----------------- On April 4, 1995, the Company completed the sale of an additional 500,000 shares at $30.125 per Share. The net proceeds to the Company from this offering were used to repay short-term borrowings and for investments in additional health care facilities. On April 11, 1995, the Company declared a dividend of $.6725 per Share payable on May 15, 1995 to shareholders of record on April 28, 1995. This dividend relates to the period from January 1, 1995 through March 31, 1995. - 7 - 8 MEDITRUST MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS --------------------- Revenues for the three months ended March 31, 1995 were $48,933,000 compared to $40,995,000 for the three months ended March 31, 1994, an increase of $7,938,000 or 19%. Rental income decreased by $258,000 and resulted primarily from the termination of leases in June 1994 on three facilities which became mortgage investments. Interest income increased by $8,196,000 and resulted from additional real estate investments made during the past twelve months. For the three months ended March 31, 1995, total expenses increased by $1,460,000. Interest expense increased by $2,059,000 and resulted from the issuance of $90,000,000 of 7 1/2% debentures in March 1994 and a higher level of short-term borrowings during the 1995 period and was partially offset by the prepayment of $10,800,000 of senior mortgage notes at 10.75% in December 1994, the prepayment of $12,500,000 of senior unsecured notes at 10.86% in February 1995 and the conversion of $38,025,000 principal amount of 9% and 7% convertible debentures during the past twelve months. Depreciation and amortization decreased by $79,000 and general and administrative expenses decreased by $520,000. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- As of March 31, 1995, the Company's gross real estate investments totaled $1.66 billion including 238 long-term care facilities, 23 rehabilitation hospitals, two alcohol and substance abuse treatment facilities, six psychiatric hospitals, six retirement living facilities, six medical office buildings and one acute care hospital. As of March 31, 1995, the Company's outstanding commitments for additional financing totaled approximately $19,000,000 for the completion of ten facilities under construction. The Company had shareholders' equity of $1,027,162,000 and a debt to equity ratio of .61 to 1.0 as of March 31, 1995. The Company provides funding for its investments through a combination of long-term and short-term financing including both debt and equity. The Company obtains long-term financing through the issuance of Shares, the issuance of long-term unsecured notes, the issuance of convertible debentures and the assumption of mortgage notes. The Company obtains short-term financing through the use of bank lines of credit which are replaced with long-term financing as appropriate. From time to time, the Company may utilize interest rate caps or swaps to hedge interest rate volatility. It is the Company's objective to match mortgage and lease terms with the terms of its borrowings. The Company seeks to maintain an appropriate spread between its borrowing costs and the rate of return on its investments. When development loans convert to sale/leaseback transactions or permanent mortgage loans, the base rent or interest rate, as appropriate, is fixed at the time of such conversion. During the three-month period ended March 31, 1995, the Company completed the sale of 8,750,000 shares at $30.125 per share. The net proceeds to the Company from this offering were used to repay short-term borrowings and for investments in additional health care facilities. - 8 - 9 MEDITRUST MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued Under the Company's unsecured credit facilities, a total of approximately $149,000,000 was available at March 31, 1995. In addition, the Company has an effective shelf registration on file with the Securities and Exchange Commission under which the Company may issue up to approximately $165,000,000 of securities including debt, convertible debt and shares of beneficial interest. The Company believes that its various sources of capital are adequate to finance its operations as well as pending property acquisitions, mortgage financings and future dividends. For the balance of 1995, however, in the event that the Company identifies appropriate investment opportunities, the Company may raise additional capital through the sale of shares of beneficial interest or by the issuance of additional long-term debt. - 9 - 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K --------------------------------
(a) Exhibits Exhibit No. Title Method of Filing - -------- ----- ---------------- 11 Statement Regarding Computation of Per Share Earnings. . . . . . . . . . . . . . . . . . . . . Filed herewith 27 Financial Data Schedule . . . . . . . . . . . . . Filed herewith (b) Reports on Form 8-K
During the quarter ended March 31, 1995, the Company filed a Form 8-K dated March 8, 1995 which included the consolidated financial statements of the Company for the year ended December 31, 1994. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MEDITRUST Date: April 25, 1995 By: /s/ Lisa P. McAlister ------------------------------------- Lisa P. McAlister, Vice President and Treasurer (and Chief Accounting Officer) - 10 - EX-11 2 STATEMENT REGARDING COMPUTATION EARNINGS PER SHARE 1 Exhibit 11 MEDITRUST STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS (000 omitted except for per share amounts)
Quarter ended March 31, ----------------- 1995 1994 ---- ---- Primary Weighted average shares 40,594 33,438 Dilutive effect of: Stock options 65 103 Warrants 49 ------- ------- Weighted average number of shares and equivalent shares outstanding 40,659 33,590 ======= ======= Net income $24,183 $17,705 ======= ======= Net income per share (A) $.59 $0.53 ======= ======= (A) This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%. Fully Diluted Weighted average number of shares used in primary calculation 40,659 33,590 Assumed conversion of debentures 6,675 6,652 ------- ------- Fully diluted weighted average shares and equivalent shares outstanding 47,334 40,242 ======= ======= Net income $24,183 $17,705 Interest and debt amortization on assumed conversion of debentures 4,472 4,259 ------- ------- Adjusted net income for fully diluted calculation $28,655 $21,964 ======= ======= Net income per share (B) $.61 $0.55 ======= ======= (B) This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15 because it produces anti-dilutive results.
- 11 - EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995 AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1995 OF MEDITRUST AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 1 44,224 0 22,123 0 0 0 692,083 69,792 1,714,327 0 625,595 0 0 1,119,456 (92,294) 1,714,327 0 48,933 0 0 0 0 18,474 24,183 0 24,183 0 0 0 24,183 .60 .60
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