-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JaBe8ve2HI4aXkBuOufVvQq2b1pziewgC//Cp9EWnOTHOw4KWJAb8O3XW2tvm41P r1+n95GZoH/RbzcLlpfjjg== 0001017062-97-001364.txt : 19970725 0001017062-97-001364.hdr.sgml : 19970725 ACCESSION NUMBER: 0001017062-97-001364 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970724 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE HEALTH PROPERTIES INC CENTRAL INDEX KEY: 0000780053 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 953997619 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09028 FILM NUMBER: 97644784 BUSINESS ADDRESS: STREET 1: 4675 MACARTHUR COURT STE 1170 CITY: NEWPORT BEACH STATE: CA ZIP: 92660 BUSINESS PHONE: 7142511211 MAIL ADDRESS: STREET 1: 4675 MACARTHUR COURT STREET 2: STE 1170 CITY: NEWSPORT BEACH STATE: CA ZIP: 92660 FORMER COMPANY: FORMER CONFORMED NAME: BEVERLY INVESTMENT PROPERTIES INC DATE OF NAME CHANGE: 19890515 10-Q 1 10-Q DATED 06-30-97 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 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 1-9028 NATIONWIDE HEALTH PROPERTIES, INC. (Exact name of registrant as specified in its charter) Maryland 95-3997619 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification Number) 610 Newport Center Drive, Suite 1150 Newport Beach, California 92660 (Address of principal executive offices) (714) 718-4400 (Registrant's telephone number, including area code) 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 ------ ------ Shares of registrant's common stock, $.10 par value, outstanding at June 30, 1997 -- 41,803,924. =============================================================================== NATIONWIDE HEALTH PROPERTIES, INC. FORM 10-Q June 30, 1997 TABLE OF CONTENTS Part I--Financial Information
Page ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets......................................... 2 Condensed Consolidated Statements of Operations............................... 3 Condensed Consolidated Statements of Cash Flows............................... 4 Notes to Condensed Consolidated Financial Statements.......................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................... 7 Part II--Other Information Item 4. Submission of Matters to a Vote of Security Holders........................... 9 Item 6. Exhibits and Reports on Form 8-K.............................................. 9
1 PART I NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
June 30, December 31, 1997 1996 --------------- ------------- (Unaudited) (Dollars in thousands) Investments in real estate Real estate properties: Land................................. $ 83,974 $ 75,252 Buildings and improvements........... 623,754 574,544 Construction in progress............. 10,631 2,213 -------- -------- 718,359 652,009 Less accumulated depreciation........ (97,250) (89,967) -------- -------- 621,109 562,042 Mortgage loans receivable, net........ 199,487 160,464 -------- -------- 820,596 722,506 Cash and cash equivalents............... 10,686 11,709 Receivables............................. 4,595 4,321 Other assets............................ 8,062 6,448 -------- -------- $843,939 $744,984 ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings.............................. $ 46,300 $ 32,300 Senior notes due 2000-2015................... 275,000 190,000 Convertible debentures....................... 64,720 64,920 Notes and bonds payable...................... 9,189 9,229 Accounts payable and accrued liabilities..... 22,666 19,947 Stockholders' equity: Preferred stock $1.00 par value; 5,000,000 shares authorized; none issued or outstanding Common stock $.10 par value; 100,000,000 shares authorized; issued and outstanding: 1997 - 41,803,924, 1996 - 41,785,001........... 4,181 4,179 Capital in excess of par value........... 462,946 462,534 Cumulative net income.................... 329,748 300,079 Cumulative dividends..................... (370,811) (338,204) --------- --------- Total stockholders' equity......... 426,064 428,588 --------- --------- $ 843,939 $ 744,984 ========= =========
See accompanying notes. 2 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 1997 1996 1997 1996 ------- -------- ------- -------- Revenues Minimum rent.......................... $18,469 $16,472 $36,747 $32,639 Interest and other income............. 5,372 3,972 10,095 7,928 Additional rent and additional interest............................. 3,357 2,856 6,658 5,664 ------- ------- ------- ------- 27,198 23,300 53,500 46,231 Expenses: Interest and amortization of deferred financing costs............. 6,665 5,300 12,767 10,731 Depreciation and non-cash charges..... 4,694 4,144 9,252 8,256 General and administrative............ 925 847 1,812 1,656 ------- ------- ------- ------- 12,284 10,291 23,831 20,643 ------- ------- ------- ------- Net Income............................... $14,914 $13,009 $29,669 $25,588 ======= ======= ======= ======= Net income per share..................... $ .36 $ .33 $ .71 $ .66 ======= ======= ======= ======= Dividends paid per share................. $ .39 $ .37 $ .78 $ .74 ======= ======= ======= ======= Weighted average shares outstanding...... 41,804 39,168 41,802 39,948 ======= ======= ======= =======
See accompanying notes. 3 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Six Months Ended June 30, ---------------------- 1997 1996 --------- --------- Cash Flow from operating activities: Net income................................................ $ 29,669 $ 25,588 Depreciation and non-cash charges......................... 9,252 8,256 Amortization of deferred financing costs.................. 370 374 Net decrease in other assets and liabilities.............. 271 3,308 --------- --------- Net cash provided by operating activities............... 39,562 37,526 Cash flow from investing activities: Acquisition of real estate properties..................... (73,213) (25,220) Investment in mortgage loans receivable................... (34,095) (3,800) Principal payments on mortgage loans receivable........... 1,026 4,672 --------- --------- Net cash used in investing activities................... (106,282) (24,348) Cash flow from financing activities: Bank borrowings........................................... 126,000 48,600 Repayment of bank borrowings.............................. (112,000) (127,800) Issuance of senior unsecured debt......................... 85,000 50,000 Issuance of common stock.................................. - 61,149 Dividends paid............................................ (32,607) (28,662) Principal payments on notes and bonds..................... (40) (13,482) Other, net................................................ (656) (470) --------- --------- Net cash provided by financing activities................ 65,697 (10,665) --------- --------- Increase (decrease) in cash and cash equivalents............ (1,023) 2,513 Cash and cash equivalents, beginning of period.............. 11,709 7,937 --------- --------- Cash and cash equivalents, end of period.................... $ 10,686 $ 10,450 ========= =========
See accompanying notes. 4 NATIONWIDE HEALTH PROPERTIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 1997 (Unaudited) (i) The condensed consolidated financial statements included herein have been prepared by the Company, without audit, and include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the three-month and six-month periods ended June 30, 1997 and 1996 pursuant to the rules and regulations of the Securities and Exchange Commission. All of such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Although the Company believes that the disclosures in such financial statements are adequate to make the information presented not misleading, these condensed consolidated financial statements should be read in conjunction with the Company's financial statements and the notes thereto included in the Company's 1996 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The results of operations for the three-month and six-month periods ended June 30, 1997 and 1996 are not necessarily indicative of the results for a full year. (ii) Net income per share is calculated by dividing net income by the weighted average common shares outstanding during the period. The effect of common stock options is immaterial. The effect of convertible debentures in 1996 is anti-dilutive and in 1997 is immaterial. (iii) The Company qualifies as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. The Company intends to continue to qualify as such and therefore to distribute at least 95 percent of its taxable income to its stockholders. Accordingly, no provision has been made for federal income taxes. (iv) The Company invests in health care related real estate and, as of June 30, 1997, had investments in 254 facilities, including 191 long-term health care facilities, 61 assisted living facilities and two rehabilitation hospitals. The Company's facilities are operated by 59 different operators. The Company's facilities which are owned and leased under "net" leases are accounted for as operating leases. The leases have initial terms ranging from 10 to 19 years, and the leases generally have two or more multiple-year renewal options. The Company earns fixed monthly minimum rents and may earn periodic additional rents. The additional rent payments are generally computed as a percentage of facility net patient revenues in excess of base amounts and/or increases in the Consumer Price Index. The base amounts, in most cases, are net patient revenues for the first year of the lease. Certain of the leases contain provisions such that the percentage of further revenue increases due to the Company as additional rent is limited to 1% at such time as additional rent exceeds 41% of base rent. Under the terms of the leases, the lessee is responsible for all maintenance, repairs, taxes and insurance on the leased properties. Forty-three of the facilities were leased to and operated by subsidiaries of Beverly Enterprises, Inc. (v) During the six-month period ended June 30, 1997, the Company acquired twelve assisted living facilities and three long-term health care facilities in thirteen separate transactions for an aggregate purchase price of $52,735,000. The acquisitions were funded by bank borrowings on the Company's bank line of credit and cash on hand. The facilities were concurrently leased under terms generally similar to the Company's existing leases. In addition, the Company provided new construction financing of approximately $11,188,000 for eleven assisted living facilities, one long-term health care facility and one medical office building and capital improvement funding in the aggregate amount of approximately $8,045,000 in accordance with certain existing lease agreements. 5 During June 1997, the Company sold two long-term health care facilities for an aggregate purchase price of approximately $6,863,000. The Company received a mortgage note in the amount of the purchase price, which is secured by the two facilities. The related gain of approximately $1,676,000 on such sale will be recognized into income on a deferred basis in proportion to the receipt of principal payments on the mortgage loans provided by the Company. During the six-month period ended June 30, 1997, the Company provided four mortgage loans secured by five long-term health care facilities and three assisted living facilities in four separate transactions in the aggregate amount of $33,675,000. The loans were funded by bank borrowings under the Company's bank line of credit and cash on hand. During the six months ended June 30, 1997, the Company issued $85,000,000 in medium term notes. The notes bear fixed interest at a weighted average rate of 7.39% and have a weighted average maturity of 10 years. The proceeds were used to reduce borrowings on the Company's bank line of credit. 6 NATIONWIDE HEALTH PROPERTIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS June 30, 1997 Operating Results Six Months 1997 Compared to Six Months 1996 Revenues for the six-months ended June 30, 1997 increased $7,269,000 or 16% over the same period in 1996. The increase is due to increased minimum rent and interest income resulting from additional investments in real estate properties and mortgage loans receivable during the last twelve months. The increase was also attributable to increased additional rent and additional interest earned under the Company's existing leases and mortgage loans receivable based on increases in the facility revenues and the Consumer Price Index. Total expenses for the six-month period ended June 30, 1997 increased $3,188,000 or 15% over the same period in 1996. The increase is due to increased interest expense as a result of the issuance of fixed rate medium term notes during the last twelve months and to increased depreciation in connection with the acquisition of additional facilities during the last twelve months. Second Quarter 1997 Compared to Second Quarter 1996 Revenues for the three months ended June 30, 1997 increased $3,898,000 or 17% over the same period in 1996. The increase is primarily due to increased minimum rent and interest income resulting from investments in additional facilities during the last twelve months. The increase was also attributed to increased additional rent and additional interest earned under the Company's existing leases and mortgage loans receivable based on increases in the facility revenues and Consumer Price Index. Total expenses for the three-months ended June 30, 1997 increased $1,993,000 or 19% over the same period in 1996. The increase is primarily due to increased interest expense as a result of the issuance of fixed rate medium term notes during the last twelve months and to a lesser extent to increased depreciation in connection with the acquisition of additional facilities during the last twelve months. The Company expects increased rental revenues and interest income due to the addition of facilities to its property base and mortgage loans receivable over the last twelve months. The Company also expects increased additional rent and additional interest because the Company's leases and mortgages generally contain provisions under which additional rents or interest income increase with increases in facility revenues and/or increases in the Consumer Price Index. Historically, revenues at the Company's facilities and the Consumer Price Index generally have increased; although, there are no assurances that they will continue to increase in the future. Sales of facilities or repayments of mortgages would serve to offset the aforementioned revenue increases. Additional investments in health care facilities would also increase rental and/or interest income. As additional investments in facilities are made, depreciation and/or interest expense could also increase. Any such increases, however, are expected to be more than offset by rents or interest income associated with the investments. Statement of Financial Accounting Standards ("SFAS") No. 128 Earnings per Share and SFAS No. 129 Disclosure of Information about Capital Structure were issued in February 1997 and are effective for periods ending after December 15, 1997. The Company will adopt SFAS No. 128 and SFAS No. 129 for the period ending December 31, 1997 and anticipates that such adoption will not materially impact the Company's financial statements. SFAS No. 130 Reporting Comprehensive Income and SFAS No. 131 Disclosures about Segments of an Enterprise and Related Information were issued in June 1997. The Company will adopt SFAS No. 130 and SFAS No. 131 in 1998 and anticipates that such adoption will not materially impact the Company's financial statements. 7 Liquidity and Capital Resources During the six-month period ended June 30, 1997, the Company acquired twelve assisted living facilities and three long-term health care facilities in thirteen separate transactions for an aggregate purchase price of $52,735,000. The acquisitions were funded by bank borrowings under the Company's bank line of credit and cash on hand. The facilities were concurrently leased under terms generally similar to the Company's existing leases. In addition, the Company provided new construction financing of approximately $11,188,000 for eleven assisted living facilities, one long-term health care facility and one medical office building, and capital improvement funding in the aggregate amount of approximately $8,045,000 in accordance with certain existing lease agreements. New construction and capital improvements were funded by cash on hand and bank borrowings on the Company's bank line of credit. During the six-month period ended June 30, 1997, the Company provided four mortgage loans secured by five long-term health care facilities and three assisted living facilities in four separate transactions in the aggregate amount of $33,675,000. The loans were funded by bank borrowings under the Company's bank line of credit and cash on hand. During the first six months of 1997, the Company issued $85,000,000 in medium term notes. The notes bear fixed interest at a weighted average of 7.39% and have a weighted average maturity of 10 years. The proceeds were used to reduce borrowings on the Company's bank line of credit. During April 1997, the Company's $100,000,000 bank line of credit was amended to, among other things, extend its maturity to March 31, 2000 and reduce its current LIBOR borrowing margin from .90% to .75%. At June 30, 1997, the Company had $53,700,000 available under its $100,000,000 bank line of credit. The Company has effective shelf registrations on file with the Securities and Exchange Commission under which the Company may issue (a) up to $25,000,000 in aggregate principal amount of medium term notes and (b) up to $333,122,000 of securities including debt, convertible debt, common and preferred stock. The Company anticipates issuing securities under such shelf registrations to repay borrowings under the Company's bank line of credit. The Company anticipates making additional investments in health care related facilities. Financing for such future investments may be provided by borrowings under the Company's bank line, private placements or public offerings of debt or equity, and the assumption of secured indebtedness. The Company believes it has sufficient liquidity and financing capability to finance future investments as well as repay borrowings at or prior to their maturity. Statement Regarding Forward Looking Disclosure Certain information contained in this report includes forward looking statements, which can be identified by the use of forward looking terminology such as "may," "will," "expect," "should" or comparable terms or the negative thereof. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include (without limitation) the following: changes in the health industry, government regulations, including changes in Medicare and Medicaid payment levels, changes in the ratings of the Company's debt securities, the amount of any additional investments made by the Company, access to capital markets and the effect of economic and market conditions and changes in interest rates. 8 PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. The Annual Meeting of Stockholders was held on April 11, 1997 ("Annual Meeting"). At the Annual Meeting, Sam A. Brooks, Jr. and Jack D. Samuelson were re-elected as directors to serve for a three-year term until the 2000 Annual Meeting of Stockholders. The other directors whose term of office continued after the meeting are Milton J. Brock, Jr., David R. Banks, R. Bruce Andrews and Charles D. Miller. Additionally, the selection of Arthur Andersen LLP as independent accountants for the year ended December 31, 1997 was ratified. Voting at the Annual Meeting was as follows:
Abstentions Votes Cast Votes cast broker non For against votes Matter ---------- ---------- ------------ - ------ Election of Sam A. Brooks, Jr. 37,496,951 165,119 - Election of Jack D. Samuelson 37,468,695 193,375 - Ratification of selection of Arthur Andersen LLP 37,528,272 45,472 88,326
Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits None. (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the six-month period ended June 30, 1997. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: July 24, 1997 NATIONWIDE HEALTH PROPERTIES, INC. By /s/ MARK L. DESMOND ----------------------------------------------- Mark L. Desmond Senior Vice President and Chief Financial Officer (Principal Financial Officer) 10 EX-27 2 FDS ART. 5 FOR 10-Q DATED 06-30-97
5 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 10,686 0 4,595 0 0 8,062 718,359 97,250 843,939 22,666 395,209 0 0 4,181 421,883 843,939 0 53,500 0 23,831 1,812 0 12,767 29,669 0 0 0 0 0 29,669 .71 .71
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