-----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, HU0ooviUp2QGMCOT2t+E4S1zDfLnrNpj/mdHUSWwYDMHYyjtYh89NCKdaidiZRHY NndgYpHn3p3iXX5KYzYb5w== 0001017062-97-001988.txt : 19971114 0001017062-97-001988.hdr.sgml : 19971114 ACCESSION NUMBER: 0001017062-97-001988 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 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: SEC FILE NUMBER: 001-09028 FILM NUMBER: 97714149 BUSINESS ADDRESS: STREET 1: 610 NEWPORT CENTER DR STREET 2: STE 1150 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 FORM 10-Q DATED SEPTEMBER 30, 1997 ================================================================================ 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 September 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 October 31, 1997 - 43,127,908. ================================================================================ NATIONWIDE HEALTH PROPERTIES, INC. FORM 10-Q September 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 2. Changes in Securities and Use of Proceeds.............................. 10 Item 6. Exhibits and Reports on Form 8-K....................................... 11
1 PART I NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
September 30, December 31, 1997 1996 ----------- ----------- (Unaudited) (Dollars in thousands) Investments in real estate Real estate properties: Land ............................................... $ 113,081 $ 75,252 Buildings and improvements.......................... 766,600 574,544 Construction in progress............................ 13,929 2,213 ---------- -------- 893,610 652,009 Less accumulated depreciation ...................... (101,410) (89,967) ---------- -------- 792,200 562,042 Mortgage loans receivable, net........................ 209,131 160,464 ---------- -------- 1,001,331 722,506 Cash and cash equivalents............................... 37,919 11,709 Receivables............................................. 5,125 4,321 Other assets............................................ 8,955 6,448 ---------- -------- $1,053,330 $744,984 ========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings......................................... $ -- $ 32,300 Senior notes due 2000-2037.............................. 355,000 190,000 Convertible debentures.................................. 64,534 64,920 Notes and bonds payable................................. 48,908 9,229 Accounts payable and accrued liabilities................ 30,836 19,947 Stockholders' equity: Preferred stock $1.00 par value; 5,000,000 shares authorized;....................... 100,000 -- Issued and outstanding: 1997-1,000,000; 1996-none, stated at liquidation preference of $100 per share Common stock $.10 par value; 100,000,000 shares authorized; Issued and outstanding: 1997-43,127,908, 1996-41,785,001.................. 4,313 4,179 Capital in excess of par value....................... 490,610 462,534 Cumulative net income................................ 346,290 300,079 Cumulative dividends................................. (387,161) (338,204) ---------- --------- Total stockholders' equity..................... 554,052 428,588 ---------- --------- $1,053,330 $ 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 Nine Months Ended September 30, September 30, 1997 1996 1997 1996 ------------------------------------------------------------- Revenues: Minimum rent...................... $19,876 $16,792 $56,623 $49,431 Interest and other income......... 5,891 4,314 15,986 12,242 Additional rent and additional interest......................... 3,529 3,198 10,187 8,862 ------- ------- ------- ------- 29,296 24,304 82,796 70,535 Expenses: Interest and amortization of deferred financing costs......... 7,873 4,808 20,639 15,539 Depreciation and non-cash charges. 4,749 4,198 14,001 12,454 General and administrative........ 961 843 2,774 2,499 ------- ------- ------- ------- 13,583 9,849 37,414 30,492 ------- ------- ------- ------- Net income before gain on sale of properties.......................... $15,713 $14,455 $45,382 $40,043 Gain on sale of properties........... 829 -- 829 -- ------- ------- ------- ------- Net income........................... 16,542 14,455 46,211 40,043 Preferred stock dividends............ (43) -- (43) -- ------- ------- ------- ------- Net income available to common stockholders........................ $16,499 $14,455 $46,168 $40,043 ======= ======= ======= ======= Net income before gain on sale of properties.......................... $ .37 $ .35 $ 1.08 $ 1.00 ======= ======= ======= ======= Net income per share................. $ .39 $ .35 $ 1.10 $ 1.00 ======= ======= ======= ======= Net income available to common stockholders per share.............. $ .39 $ .35 $ 1.10 $ 1.00 ======= ======= ======= ======= Dividends paid per share............. $ .39 $ .37 $ 1.17 $ 1.11 ======= ======= ======= ======= Weighted average shares outstanding.. 41,910 41,781 41,838 39,899 ======= ======= ======= =======
See accompanying notes. 3 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Nine Months Ended September 30, ----------------------------------- 1997 1996 Cash flow from operating activities: Net income............................. $ 46,211 $ 40,043 Gain on sale of properties............. (829) -- Depreciation and non-cash charges...... 14,001 12,453 Amortization of deferred financing costs................................. 581 573 Net decrease in other assets and liabilities........................... 6,951 1,891 --------- --------- Net cash provided by operating activities........................ 66,915 54,960 Cash flow from investing activities: Acquisition of real estate properties............................ (182,656) (38,082) Disposition of real estate properties............................ 4,827 -- Investment in mortgage loans receivable............................ (43,898) (26,350) Principal payments on mortgage loans receivable...................... 1,542 5,180 --------- --------- Net cash used in investing activities........................ (220,185) (59,252) Cash flow from financing activities: Bank borrowings........................ 244,100 96,050 Repayment of bank borrowings........... (276,400) (141,750) Issuance of senior unsecured debt...... 165,000 50,000 Issuance of common stock............... 1 60,905 Issuance of preferred stock............ 97,250 -- Dividends paid......................... (48,957) (44,121) Principal payments on notes and bonds................................. (60) (14,115) Other, net............................. (1,454) (540) --------- --------- Net cash provided by financing activities......................... 179,480 6,429 --------- --------- Increase in cash and cash equivalents...... 26,210 2,137 Cash and cash equivalents, beginning of period.................................... 11,709 7,937 --------- --------- Cash and cash equivalents, end of period... $ 37,919 $ 10,074 ========= =========
See accompanying notes. 4 NATIONWIDE HEALTH PROPERTIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 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 nine-month periods ended September 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 nine-month periods ended September 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 ninety-five percent (95%) 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 September 30, 1997, had investments in 277 facilities, including 195 long-term health care facilities, 69 assisted living facilities, 10 continuing care retirement communities, two rehabilitation hospitals and one medical clinic. The Company's facilities are operated by 61 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-one of the facilities were leased to and operated by subsidiaries of Beverly Enterprises, Inc. (v) During the nine-month period ended September 30, 1997, the Company acquired 21 assisted living facilities, nine long-term health care facilities, four continuing care retirement communities and one medical clinic in 26 separate transactions for an aggregate purchase price of approximately $204,048,000. The acquisitions were funded by bank borrowings on the Company's bank line of credit, approximately $39,739,000 of debt assumption, 1,315,686 shares of the Company's common stock and cash on hand. The facilities were concurrently leased under terms generally similar to the Company's existing leases. In addition, during the nine-month period ended September 30, 1997 the Company completed the development of one long-term health care facility and two 5 assisted living facilities for an aggregate cost of approximately $13,245,000, provided new construction financing of approximately $23,619,000 and provided capital improvement funding of approximately $11,932,000 in accordance with certain existing lease agreements. During the nine-month period ended September 30, 1997, the Company provided six mortgage loans secured by five long-term health care facilities, three assisted living facilities and two continuing care retirement communities in six separate transactions in the aggregate amount of approximately $42,675,000. The loans were funded by bank borrowings under the Company's bank line of credit and cash on hand. 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 August 1997, the Company sold one long-term health care facility to the lessee of such facility pursuant to a purchase option provision in the respective lease for a purchase price of approximately $4,829,000 resulting in a gain of approximately $829,000. The proceeds of the sale were used to repay bank borrowings on the Company's bank line of credit. During the nine months ended September 30, 1997, the Company issued $165,000,000 in medium-term notes. The notes bear fixed interest at a weighted average rate of 7.12% and have a weighted average maturity of 19 years. The proceeds were used to reduce borrowings on the Company's bank line of credit. In September 1997, the Company sold 1,000,000 shares of 7.677% Series A Cumulative Preferred Step-Up REIT securities ("Preferred Stock") with a liquidation preference of $100 per share. Dividends on the Preferred Stock are cumulative from the date of original issue and are payable quarterly in arrears, commencing December 31, 1997 at the rate of 7.677% per annum of the liquidation preference per share (equivalent to $7.677 per annum per share) through September 30, 2012 and at a rate of 9.677% of the liquidation preference per annum per share (equivalent to $9.677 per annum per share) thereafter. The Preferred Stock is not redeemable prior to September 30, 2007. On or after September 30, 2007, the Preferred Stock may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price of $100 per share, plus accrued and unpaid dividends, if any, thereon. 6 NATIONWIDE HEALTH PROPERTIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS September 30, 1997 Operating Results Nine Months 1997 Compared to Nine Months 1996 Revenues for the nine months ended September 30, 1997 increased $12,261,000 or 17% 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 nine-month period ended September 30, 1997 increased $6,922,000 or 23% 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. Third Quarter 1997 Compared to Third Quarter 1996 Revenues for the three months ended September 30, 1997 increased $4,992,000 or 21% 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 September 30, 1997 increased $3,734,000 or 38% 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. In addition, during the three months ended September 30, 1997, the Company recognized a gain of approximately $829,000 from the sale of a long-term health care facility. 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. 7 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. Liquidity and Capital Resources During the nine-month period ended September 30, 1997, the Company acquired 21 assisted living facilities, nine long-term health care facilities, four continuing care retirement communities and one medical clinic in 26 separate transactions for an aggregate purchase price of approximately $204,048,000. The acquisitions were funded by bank borrowings on the Company's bank line of credit, approximately $39,739,000 of debt assumption, 1,315,686 shares of the Company's common stock and cash on hand. The facilities were concurrently leased under terms generally similar to the Company's existing leases. In addition, during the nine-month period ended September 30, 1997, the Company provided new construction financing of approximately $23,619,000 for 15 assisted living facilities, three medical clinics and one long-term care facility. During the nine-month period ended September 30, 1997, three properties completed the construction phase of the Company's investment process. The facilities were completed in three separate transactions for a total investment of $13,245,000 and included the construction of one long-term health care facility and two assisted living facilities. The facilities were leased under terms generally similar to the Company's existing leases. The Company also funded approximately $11,932,000 in capital improvements in accordance with certain existing lease agreements. Such capital improvements will result in an increase in the minimum rent rents earned by the Company. The construction advances and capital improvement advances were funded by bank borrowings on the Company's bank line of credit and by cash on hand. During the nine-month period ended September 30, 1997, the Company provided six mortgage loans secured by five long-term health care facilities, three assisted living facilities and two continuing care retirement communities in six separate transactions in the aggregate amount of approximately $42,675,000. The loans were funded by bank borrowings under the Company's bank line of credit and cash on hand. 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 August 1997, the Company sold one long-term health care facility to the lessee of such facility pursuant to a purchase option provision in the respective lease for a purchase price of approximately $4,829,000 resulting in a gain of approximately $829,000. The proceeds of the sale were used to repay bank borrowings on the Company's bank line of credit. During the nine months ended September 30, 1997, the Company issued $165,000,000 in medium-term notes. The notes bear fixed interest at a weighted average rate of 7.12% and have a weighted average maturity of 19 years. The proceeds were used to reduce borrowings on the Company's bank line of credit. In September 1997, the Company sold 1,000,000 shares of 7.677% Series A Cumulative Preferred Step-up REIT securities ("Preferred Stock") with a liquidation preference of $100 per share. Dividends on the Preferred Stock are cumulative from the date of original issue and are payable quarterly in arrears, commencing December 31, 1997 at the rate of 7.677% per annum of the liquidation preference per share (equivalent to $7.677 per annum per share) through September 30, 2012 and at a rate of 9.677% of the liquidation preference per annum per share (equivalent to $9.677 per annum per share) thereafter. The Preferred Stock is not redeemable prior to September 30, 2007. On or after September 30, 2007, the Preferred Stock may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price of $100 per share, plus accrued and unpaid dividends, if any, thereon. 8 Proceeds from the sale of the Preferred Stock were used to repay bank borrowings under the Company's bank line of credit and will be used for general corporate purposes, including the funding of additional investments. 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 September 30, 1997, the Company had the maximum amount of $100,000,000 available under its 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 $245,000,000 in aggregate principal amount of medium term notes and (b) up to approximately $233,122,000 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: the effect of economic and market conditions and changes in interest rates, changes in the health care industry, government regulations, including changes in reimbursement levels under the Medicare and Medicaid programs, changes in the ratings of the Company's debt securities or preferred stock, the amount and timing of any additional investments made by the Company, and access to capital markets. 9 PART II OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds. (b) The Preferred Stock is senior to the Company's Common Stock with respect to dividends and amounts paid at liquidation. Except in certain circumstances, unless full cumulative dividends on the Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in shares of Common Stock or other capital stock ranking junior to the Preferred Stock as to dividends and upon liquidation) may be declared or paid or set aside for payment, nor may any shares of Common Stock or any other capital stock of the Company ranking junior to or on a parity with the Preferred Stock as to dividends or amounts upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such stock) by the Company (except by conversion into or exchange for other capital stock of the Company ranking junior to the Preferred Stock as to dividends and amounts upon liquidation). Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, then, before any distribution or payment may be made to the holders of any shares of Common Stock, the holders of Preferred Stock are entitled to receive out of assets of the Company legally available for distribution to stockholders, liquidation distributions in the amount of the liquidation preference of $100.00 per share, plus an amount equal to all dividends accrued and unpaid thereon. 10 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 10.1 Amendment Number Six to Credit Agreement dated August 15, 1997 between the Company and Wells Fargo Bank, National Association, the Sumitomo Bank Limited, The Bank of New York, Sanwa Bank California and BHF-Bank Aktiengesellschaft. 27 FINANCIAL DATA SCHEDULE (b) Reports on Form 8-K A Form 8-K dated August 18, 1997 was filed with respect to the acquisition of assets during the period January 1, 1997 through August 4, 1997, including audited proforma statements of income for the acquired facilities and unaudited pro forma financial statements for the Company giving effect to the acquisitions. A Form 8-K dated August 19, 1997 was filed to include certain exhibits related to the issue and sale by the Company of its Medium-Term Notes, Series C. A Form 8-K dated September 24, 1997 was filed to include certain exhibits related to the issue and sale by the Company of $1,000,000 shares of its 7.677% Series A Cumulative Preferred Step-Up REIT Securities. 11 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: November 12, 1997 NATIONWIDE HEALTH PROPERTIES, INC. By /s/MARK L. DESMOND ---------------------------------------- Mark L. Desmond Senior Vice President and Chief Financial Officer (Principal Financial Officer) 12 EX-10.1 2 AMEND NO. 6 TO CREDIT AGRMT DATED 8/15/97 EXHIBIT 10.1 AMENDMENT NUMBER SIX AND WAIVER TO CREDIT AGREEMENT --------------------------------------------------- This AMENDMENT NUMBER SIX AND WAIVER TO CREDIT AGREEMENT, dated as of August 15, 1997 (this "Amendment"), is entered into among NATIONWIDE HEALTH PROPERTIES, INC., a Maryland corporation (the "Borrower"), the financial institutions which are signatories to the Credit Agreement (each a "Bank" and, collectively, the "Banks"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as agent for the Banks thereunder (in such capacity, the "Agent"). WHEREAS, the Borrower has requested that the Banks amend certain provisions of the Credit Agreement to provide for, among other things, the revision of covenants in connection with the incurrence of indebtedness by the Borrower. WHEREAS, Borrower has informed Banks and Agent that Borrower intends to enter into a transaction pursuant to which Borrower will acquire five (5) facilities: a continuing care retirement community in Glendale, Wisconsin, a continuing care retirement community in Waukesha, Wisconsin, an independent living facility/assisted living facility in Menomonee Falls, Wisconsin, an independent living facility in West Allis, Wisconsin, and a nursing home in Duluth, Minnesota (the "Properties"), and lease the Properties to Laureate Group, Inc. ("Laureate"), all as more particularly described in a memorandum (the "Memorandum") from Andy Stokes to Borrower's Board of Directors, dated June 12, 1997, a true and complete copy of which is attached hereto as Exhibit "A" ----------- (the transaction substantially as described in the Memorandum is referred to herein as the "Transaction"); WHEREAS, Borrower has requested that Banks and Agent waive Borrower's compliance with certain covenants set forth in Section 9.4 of the Credit ----------- Agreement in connection with the consummation of the Transaction; and WHEREAS, subject to the terms and conditions contained herein, the Banks are willing to amend such provisions of the Credit Agreement and to waive Borrower's compliance with certain covenants set forth in Section 9.4 of the ----------- Credit Agreement. NOW, THEREFORE, in consideration of the mutual covenants, conditions, and provisions hereinafter set forth, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS FOR THIS AMENDMENT; ------------------------------ AMENDMENT OF ARTICLE I OF THE CREDIT AGREEMENT ---------------------------------------------- 1.1 Definitions for this Amendment. Any and all initially ------------------------------ capitalized terms used herein shall have the meanings ascribed thereto in the Credit Agreement unless specifically defined herein. For purposes of this Amendment, the following initially capitalized terms shall have the following meanings: "Agent" shall have the meaning set forth in the introduction to this ----- Amendment. "Amendment" means this Amendment Number Six and Waiver to Credit --------- Agreement among the Borrower, the Banks, and the Agent. "Bank" and "Banks" shall have the respective meanings set forth in the ---- ----- introduction to this Amendment. "Borrower" shall have the meaning set forth in the introduction to -------- this Amendment. "Credit Agreement" means that certain Credit Agreement, dated as of ---------------- May 20, 1993, among the Borrower, the Banks, and the Agent, as amended by that certain Amendment Number One to Credit Agreement dated as of April 28, 1994, that certain Amendment Number Two to Credit Agreement dated as of July 11, 1995, that certain Amendment Number Three to Credit Agreement dated as of January 22, 1996, that certain Amendment Number Four and Waiver to Credit Agreement dated as of December 10, 1996, and that certain Amendment Number Five to Credit Agreement dated as of April 1, 1997. 1.2 Amendment of Section 1.1 of the Credit Agreement. Section 1.1 of ------------------------------------------------ the Credit Agreement is hereby amended by inserting the following defined terms: "1997 Indenture" means that certain Indenture, dated as of August 19, -------------- 1997, from the Borrower to The Bank of New York, as Trustee, providing for the issuance from time to time of unsecured and unsubordinated debentures, notes or other evidences of indebtedness of the Borrower. "1997 Indenture Indebtedness" means Indebtedness of the Borrower --------------------------- incurred under or pursuant to the 1997 Indenture. ARTICLE 2 AMENDMENT OF CERTAIN PROVISIONS ------------------------------- OF THE CREDIT AGREEMENT ----------------------- 2.1 Amendment of Section 4.3(b) of the Credit Agreement. Section --------------------------------------------------- 4.3(b) of the Credit Agreement is amended by deleting clause (i) therefrom in its entirety and substituting therefor the following clause: (i) If the Borrower shall create or incur Indenture Indebtedness, 1996 Indenture Indebtedness or 1997 Indenture Indebtedness or, with the prior written consent of the Majority Banks, shall create, incur or assume Indebtedness pursuant to Sections 9.4(a)(v) or 9.4(a)(vii), the Borrower --------------------------------- shall pay to the Agent as a prepayment in whole or ratably in part of the outstanding amount of the Loans, an amount equal to the Net Cash Proceeds received by the Borrower from such Indebtedness as created, incurred or assumed (to the extent of the amount of the Loans then outstanding). 2.2 Amendment of Section 8.1 of the Credit Agreement. Section 8.1 of ------------------------------------------------ the Credit Agreement is amended by inserting the following new subsection (u) immediately -2- following subsection (t) thereof: (u) Compliance with Securities Laws. Each of the Borrower and its ------------------------------- Subsidiaries is in compliance in all material respects with all applicable federal and state securities laws, rules, regulations and orders of any Governmental Authority with respect to the 1997 Indenture and the Indebtedness issued and to be issued pursuant to the 1997 Indenture. 2.3 Amendment of Section 9.1(b) of the Credit Agreement. Section --------------------------------------------------- 9.1(b) of the Credit Agreement is amended by deleting clause (xi) therefrom in its entirety and substituting therefor the following clause: (xi) as soon as reasonably practical and, in any event, not less than two days prior to the consummation thereof, written notice of (A) the proposed incurrence or issuance of Indenture Indebtedness, 1996 Indenture Indebtedness or 1997 Indenture Indebtedness or (B) any proposed supplement or amendment to the Indenture, the 1996 Indenture or the 1997 Indenture; and 2.4 Amendment of Section 9.2 of the Credit Agreement. Section 9.2 of ------------------------------------------------ the Credit Agreement is amended by deleting subsection (a) therefrom in its entirety and substituting therefor the following subsection: (a) Leverage Ratio. The Borrower will not permit the ratio of -------------- Consolidated Total Liabilities to Consolidated Tangible Net Worth to be greater than 1.3 to 1.0; 2.5 Amendment of Section 9.4(a) of the Credit Agreement. Section --------------------------------------------------- 9.4(a) of the Credit Agreement is amended by deleting the "." at the end of clause (xi) thereof and inserting in place thereof "; and" and by inserting immediately thereafter the following new clause (xii): (xii) 1997 Indenture Indebtedness; provided, however, that: (a) -------- ------- the maximum aggregate principal amount of 1997 Indenture Indebtedness at any time outstanding shall not exceed $300,000,000; (b) without the prior written consent of the Majority Banks, no regularly scheduled principal payment on any 1997 Indenture Indebtedness shall be required prior to the fifth (5th) anniversary of the issuance of the debenture, note or other evidence of indebtedness evidencing such 1997 Indenture Indebtedness (without regard to the effect of the acceleration provisions set forth in Section 502 of the 1997 Indenture); (c) all 1997 Indenture Indebtedness shall be unsecured; (d) in connection with the incurrence or issuance of any 1997 Indenture Indebtedness, no covenant (financial or otherwise) shall be imposed upon, or agreed to by, the Borrower that is more restrictive (in the judgment of the Majority Banks) than the covenants set forth in this Agreement; and (e) prior to the effectiveness thereof, the Majority Banks shall have approved, in their sole discretion, each supplement or amendment to the 1997 Indenture. -3- ARTICLE 3 WAIVERS OF CERTAIN PROVISIONS ----------------------------- OF THE CREDIT AGREEMENT ----------------------- 3.1 Waiver of Section 9.4(a)(ix) of the Credit Agreement. Banks ---------------------------------------------------- hereby agree to waive compliance by Borrower and its Subsidiaries with subsection (a)(ix) of Section 9.4 of the Credit Agreement in connection with the consummation of the Transaction to the extent the Transaction includes the assumption of Indebtedness in an amount not to exceed $53,004,800 which is secured by Liens upon the Properties. 3.2 Waiver of Section 9.4(b) of the Credit Agreement. Banks hereby ------------------------------------------------ agree to waive compliance by Borrower and its Subsidiaries with Section 9.4(b) of the Credit Agreement in connection with the consummation of the Transaction to the extent the Transaction includes the assumption of Liens upon the Properties securing Indebtedness in an amount not to exceed $53,004,800. 3.3 Waiver of Section 9.4(d) of the Credit Agreement. Banks hereby ------------------------------------------------ agree to waive compliance by Borrower and its Subsidiaries with Section 9.4(d) of the Credit Agreement in connection with the consummation of the Transaction to the extent the Transaction constitutes a merger with, or an acquisition of all or substantially all of the assets of, any Person. 3.4 Waiver of Section 9.4(f)(iii)(A) of the Credit Agreement. Banks -------------------------------------------------------- hereby agree to waive compliance by Borrower and its Subsidiaries with subsection (f)(iii)(A) of Section 9.4 of the Credit Agreement in connection with the consummation of the Transaction to the extent the Transaction includes the purchase of the Properties for a consideration which exceeds $30,000,000; provided, however, that such purchase consideration shall not exceed $96,000,000 - -------- ------- (including assumption of Indebtedness but exclusive of Borrower's transaction expenses). 3.5 Waiver of Section 9.4(f)(iii)(B) of the Credit Agreement. Banks -------------------------------------------------------- hereby agree that, for purposes of the computation from time to time of compliance by Borrower and its Subsidiaries with subsection (f)(iii)(B) of Section 9.4 of the Credit Agreement during the current fiscal year only, the purchase consideration payable in connection with the consummation of the Transaction shall be excluded from the $200,000,000 limitation set forth in such subsection; provided, however, that such purchase consideration shall not exceed -------- ------- $96,000,000 (including assumption of Indebtedness but exclusive of Borrower's transaction expenses). ARTICLE 4 MISCELLANEOUS ------------- 4.1 Loan Documents. This Amendment shall be one of the Loan -------------- Documents. 4.2 Execution. This Amendment may be executed in any number of --------- counterparts, each of which when so executed and delivered shall be deemed an original. All of such counterparts shall constitute but one and the same instrument. Delivery of an executed counterpart of the signature pages of this Amendment by telecopier shall be equally effective as -4- delivery of a manually executed counterpart. Any party delivering an executed counterpart of the signature pages of this Amendment by telecopier shall thereafter also promptly deliver a manually executed counterpart, but the failure to deliver such manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. 4.3 Effectiveness. This Amendment shall be effective as of the date ------------- first written above, when (a) one or more counterparts hereof shall have been executed by the Borrower, the Banks, and the Agent and shall have been delivered to the Agent and (b) the Borrower shall have delivered to the Banks and the Agent an executed copy of the 1997 Indenture. 4.4 No Other Amendment. Except as expressly amended hereby, the ------------------ Credit Agreement shall remain unchanged and in full force and effect. To the extent any terms or provisions of this Amendment conflict with those of the Credit Agreement, the terms and provisions of this Amendment shall control. This Amendment shall be deemed a part of and is hereby incorporated in the Credit Agreement. 4.5 Governing Law. This Amendment shall be governed by, and ------------- construed and enforced in accordance with, the laws of the State of California. [SIGNATURE PAGE FOLLOWS] -5- IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of the date first above written. WELLS FARGO BANK, NATIONAL SANWA BANK CALIFORNIA ASSOCIATION, in its individual capacity and as Agent By By ---------------------------- ---------------------------------- Title: Vice President Title: ---------------------------- THE SUMITOMO BANK, LIMITED BHF-BANK AKTIENGESELLSCHAFT By By ---------------------------- ---------------------------------- Title: Title: ---------------------- ---------------------------- By By ---------------------------- ---------------------------------- Title: Title: ---------------------- ---------------------------- THE BANK OF NEW YORK By ---------------------------- Title: ----------------------- NATIONWIDE HEALTH PROPERTIES, INC. By ----------------------------- Title: ------------------------ EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 37,919 0 5,125 0 0 8,955 893,610 (101,410) 1,053,330 30,836 468,442 0 100,000 4,313 449,739 1,053,330 0 82,796 0 16,775 0 0 20,639 45,382 0 45,382 0 829 0 46,211 1.10 1.10
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