-----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, BNNXWa33SFkoPyZZ4wd89Ojc5eXQKpm92IxpXRo3GQhhS1dSlRcMWYQtesvS1cAh CN7qTJa5TqpgFYEzWbxc8w== 0001017062-99-000841.txt : 19990513 0001017062-99-000841.hdr.sgml : 19990513 ACCESSION NUMBER: 0001017062-99-000841 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990512 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: 99618929 BUSINESS ADDRESS: STREET 1: 610 NEWPORT CENTER DR STREET 2: STE 1150 CITY: NEWPORT BEACH STATE: CA ZIP: 92660-6429 BUSINESS PHONE: 9497184400 MAIL ADDRESS: STREET 1: 610 NEWPORT CENTER DR STREET 2: STE 1150 CITY: NEWPORT BEACH STATE: CA ZIP: 92660-6429 FORMER COMPANY: FORMER CONFORMED NAME: BEVERLY INVESTMENT PROPERTIES INC DATE OF NAME CHANGE: 19890515 10-Q 1 NATIONWIDE HEALTH PROPERTIES FORM 10-Q 03/31/1999 ================================================================================ 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 March 31, 1999 [_] 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 (I.R.S. Employer of incorporation or organization) Identification No.) 610 Newport Center Drive, Suite 1150 Newport Beach, California 92660 (Address of principal executive offices) (949) 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 April 30, 1999--46,216,484. ================================================================================ NATIONWIDE HEALTH PROPERTIES, INC. FORM 10-Q March 31, 1999 TABLE OF CONTENTS
Page ---- PART I--FINANCIAL INFORMATION 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 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..... 9 PART II--OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................... 11
1 PART I NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, 1999 1998 ----------- ------------ (Unaudited) (Dollars in thousands) ASSETS ------ Investments in real estate Real estate properties: Land................................................ $ 150,426 $ 148,388 Buildings and improvements.......................... 1,092,644 1,024,637 Construction in progress............................ 50,441 70,363 ---------- ---------- 1,293,511 1,243,388 Less accumulated depreciation....................... (141,656) (133,316) ---------- ---------- 1,151,855 1,110,072 Mortgage loans receivable, net...................... 206,484 206,613 ---------- ---------- 1,358,339 1,316,685 Cash and cash equivalents............................. 14,442 16,182 Receivables........................................... 6,212 6,712 Other assets.......................................... 20,209 17,724 ---------- ---------- $1,399,202 $1,357,303 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Bank borrowings....................................... $ 61,500 $ 42,000 Senior notes due 2000-2038............................ 608,900 545,150 Convertible debentures................................ -- 57,431 Notes and bonds payable............................... 64,720 64,623 Accounts payable and accrued liabilities.............. 63,411 42,541 Stockholders' equity: Preferred stock $1.00 par value; 5,000,000 shares authorized; Issued and outstanding: 1999--1,000,000; 1998-- 1,000,000, stated at liquidation preference of $100 per share.......................................... 100,000 100,000 Common stock $.10 par value; 100,000,000 shares authorized; Issued and outstanding: 1999--46,216,484; 1998-- 46,206,128......................................... 4,622 4,621 Capital in excess of par value....................... 556,097 555,998 Cumulative net income................................ 451,374 433,644 Cumulative dividends................................. (511,422) (488,705) ---------- ---------- Total stockholders' equity......................... 600,671 605,558 ---------- ---------- $1,399,202 $1,357,303 ========== ==========
See accompanying notes. 2 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, -------------------- 1999 1998 --------- --------- (Unaudited) (In thousands except per share amounts) Revenues: Minimum rent........................................ $ 29,396 $ 23,790 Interest and other income........................... 5,931 5,693 Additional rent and additional interest............. 3,982 3,675 --------- --------- 39,309 33,158 Expenses: Interest and amortization of deferred financing costs.............................................. 11,497 8,252 Depreciation and non-cash charges................... 8,730 6,145 General and administrative.......................... 1,352 1,192 --------- --------- 21,579 15,589 --------- --------- Net income before gain on sale of properties......... 17,730 17,569 Gain on sale of properties........................... -- 2,321 --------- --------- Net income........................................... 17,730 19,890 Preferred stock dividends............................ (1,919) (1,919) --------- --------- Net income available to common stockholders.......... $ 15,811 $ 17,971 ========= ========= Per share amounts: Basic/diluted income from continuing operations available to common stockholders................... $ .34 $ .36 ========= ========= Basic/diluted net income available to common stockholders....................................... $ .34 $ .42 ========= ========= Dividends paid per common share..................... $ .45 $ .42 ========= ========= Weighted average shares outstanding.................. 46,214 43,265 ========= =========
See accompanying notes. 3 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, ---------------- 1999 1998 ------- ------- (Unaudited) (In thousands) Cash flow from operating activities: Net income.................................................. $17,730 $19,890 Gain on sale of properties.................................. -- (2,321) Depreciation and non-cash charges........................... 8,730 6,145 Amortization of deferred financing costs.................... 220 225 Net decrease in other assets and liabilities................ 18,887 8,091 ------- ------- Net cash provided by operating activities................. 45,567 32,030 Cash flow from investing activities: Investment in real estate properties.......................... (50,123) (30,191) Disposition of real estate properties....................... -- 5,496 Investment in mortgage loans receivable..................... (96) (707) Principal payments on mortgage loans receivable............. 544 532 ------- ------- Net cash used in investing activities..................... (49,675) (24,870) Cash flow from financing activities: Bank borrowings............................................. 106,100 33,900 Repayment of bank borrowings................................ (86,600) (31,900) Issuance of senior unsecured debt........................... 63,750 15,000 Dividends paid.............................................. (22,717) (20,115) Principal payments on notes and bonds....................... (57,543) (83) Other, net.................................................. (622) (107) ------- ------- Net cash provided by (used in) financing activities....... 2,368 (3,305) ------- ------- Increase (decrease) in cash and cash equivalents.............. (1,740) 3,855 Cash and cash equivalents, beginning of period................ 16,182 10,192 ------- ------- Cash and cash equivalents, end of period...................... $14,442 $14,047 ======= =======
See accompanying notes. 4 NATIONWIDE HEALTH PROPERTIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 1999 (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 periods ended March 31, 1999 and 1998 pursuant to the rules and regulations of the Securities and Exchange Commission. All 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 1998 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The results of operations for the three-month periods ended March 31, 1999 and 1998 are not necessarily indicative of the results for a full year. (ii) The Company invests in healthcare related real estate and, as of March 31, 1999, had investments in 361 facilities located in 34 states. The facilities include 203 skilled nursing facilities, 115 assisted living facilities, 14 continuing care retirement communities, 24 residential care facilities for the elderly, 2 rehabilitation hospitals and 3 medical clinics. The Company's facilities are operated by 60 different operators, including the following publicly traded companies: Alternative Living Services, Inc., American Retirement Corporation, ARV Assisted Living, Inc., Beverly Enterprises, Inc., Harborside Healthcare Corporation, HEALTHSOUTH Corporation, Integrated Health Services, Mariner Post-Acute Network, Newcare Health Corporation and Sun Healthcare Group, Inc. Of the operators of the facilities, only Alternative Living Services, Inc. and Beverly Enterprises, Inc. account for more than 10% of the Company's revenues. They accounted for 12% and 15%, respectively, of the Company's total revenues for the three months ended March 31, 1999. As of March 31, 1999, the Company had direct ownership of 161 skilled nursing facilities, 107 assisted living facilities, 9 continuing care retirement communities, 24 residential care facilities for the elderly, 2 rehabilitation hospitals and 3 medical clinics. Substantially all of the Company's owned facilities are leased under "net" leases (the "Leases"), which are accounted for as operating leases. The Leases have initial terms ranging from 9 to 19 years, and generally the Leases 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 or as a percentage of the increase in the Consumer Price Index. Additional rents are generally calculated and payable monthly or quarterly. Most Leases contain provisions such that the total rent cannot decrease from one year to the next. Most Leases contain cross- collateralization and cross-default provisions tied to other Leases with the same lessee, as well as grouped lease renewals and grouped purchase options. Obligations under the Leases have corporate guarantees, and Leases covering 194 facilities are backed by irrevocable letters of credit or security deposits that cover 1 to 12 months of monthly minimum rents. Under the terms of the Leases, each lessee is responsible for all maintenance, repairs, taxes and insurance on the leased properties. As of March 31, 1999, the Company held 33 mortgage loans secured by 42 skilled nursing facilities, 8 assisted living facilities and 5 continuing care retirement communities. As of March 31, 1999, the mortgage loans had a net book value of approximately $206,484,000 with individual outstanding balances ranging from approximately $511,000 to $21,500,000 and maturities ranging from 2003 to 2025. (iii) Basic earnings per share is computed by dividing income available to common stockholders by the weighted average common shares outstanding. Income available to common stockholders is calculated by 5 NATIONWIDE HEALTH PROPERTIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) deducting dividends declared on preferred stock from income from continuing operations and net income. Diluted earnings per share includes the effect of the potential shares outstanding: dilutive stock options and dilutive convertible debentures. The effect of convertible debentures was not dilutive in 1999 and 1998.
Three Months Ended March 31, ----------------------------- 1999 1998 -------------- -------------- Income Shares Income Shares ------- ------ ------- ------ (in thousands) Income before gain on sale of properties..... $17,730 $17,569 Less: preferred stock dividends.............. 1,919 1,919 ------- ------- Amounts used to calculate Basic EPS.......... 15,811 46,214 15,650 43,265 Effect of dilutive securities: Stock options.............................. -- -- -- 3 ------- ------ ------- ------ Amounts used to calculate Diluted EPS...... $15,811 46,214 $15,650 43,268 ======= ====== ======= ======
(iv) 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. (v) During the three-month period ended March 31, 1999, the Company acquired 7 residential care facilities for the elderly in 1 transaction for an aggregate investment of approximately $2,304,000. During the first three months of 1999, the Company has provided new construction financing of approximately $45,698,000. Construction of 8 assisted living facilities was completed in the first three months of 1999, in which the Company's total aggregate investment was $69,819,000; $23,995,000 of this amount was a current year investment included in the new construction financing amount above. Upon acquisition or completion of construction, as applicable, the facilities were concurrently leased under terms generally similar to the Company's existing Leases. The Company also funded approximately $2,117,000 in capital improvements in accordance with certain existing lease provisions. Such capital improvements will result in an increase in the minimum rents earned by the Company on these facilities. During the three months ended March 31, 1999, the Company funded an additional $96,000 on existing mortgage loans. Such additional amounts funded will result in an increase in interest income earned by the Company. During the three-month period ended March 31, 1999, the Company issued $63,750,000 in aggregate principal amount of medium-term notes. The notes bear fixed interest at a weighted average rate of 7.75% and have a weighted average maturity of 8.1 years. During the three months ended March 31, 1999, $57,431,000 of the Company's 6.25% convertible debentures were repaid and the remaining $8,000 were converted into 356 shares of the Company's common stock. 6 NATIONWIDE HEALTH PROPERTIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS March 31, 1999 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, government regulations, including changes in Medicare and Medicaid payment levels, changes in the healthcare industry, the amount of any additional investments, access to capital markets and changes in the ratings of the Company's debt securities. Operating Results First Quarter 1999 Compared to First Quarter 1998 Minimum rent increased $5,606,000 or 24% over the same period in 1998. The increase was primarily due to minimum rent resulting from investments in additional leased facilities during the last twelve months. Interest and other income increased by $238,000 or 4% over the same period in 1998. The increase was primarily due to the increase in mortgage loans during the last twelve months. Additional rent and additional interest increased by $307,000 or 8% over the same period in 1998. The increase was attributable to increased additional rent and additional interest as provided in the Company's existing leases and mortgage loans receivable based on increases in the facility revenues or the Consumer Price Index. Interest and amortization of deferred financing costs increased $3,245,000 or 39% over the same period in 1998. The increase was primarily due to the issuance of $238,900,000 in medium-term notes during the last twelve months. Depreciation and non-cash charges increased $2,585,000 or 42% over the same period in 1998. The increase was primarily attributable to increased depreciation due to the acquisition of additional facilities over the last twelve months. General and administrative costs increased $160,000 or 13% over the same period in 1998. The increase was due to increased wages and increases in other general expenses. 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 healthcare 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 at least partially offset by rents or interest income associated with the investments. Liquidity and Capital Resources During the three-month period ended March 31, 1999, the Company acquired 7 residential care facilities for the elderly in 1 transaction for an aggregate investment of approximately $2,304,000. During the first three months of 1999, the Company has provided new construction financing of approximately $45,698,000. Construction of 8 assisted living facilities was completed in the first three months of 1999, in which the Company's total aggregate investment was $69,819,000; $23,995,000 of this amount was a current year 7 investment included in the new construction financing amount above. Upon acquisition or completion of construction, as applicable, the facilities were concurrently leased under terms generally similar to the Company's existing leases. The Company also funded approximately $2,117,000 in capital improvements in accordance with certain existing lease provisions. Such capital improvements will result in an increase in the minimum rents earned by the Company on these facilities. The acquisitions, construction advances and capital improvement advances were funded by borrowings on the Company's bank line of credit and by cash on hand. During the three months ended March 31, 1999, the Company funded an additional $96,000 on existing mortgage loans. Such additional amounts funded will result in an increase in interest income earned by the Company. During the three-month period ended March 31, 1999, the Company issued $63,750,000 in aggregate principal amount of medium-term notes. The notes bear fixed interest at a weighted average rate of 7.75% and have a weighted average maturity of 8.1 years. At March 31, 1999, the Company had $38,500,000 available under its $100,000,000 bank line of credit. The Company has shelf registrations on file with the Securities and Exchange Commission under which the Company may issue (a) up to $491,100,000 in aggregate principal amount of medium term notes and (b) up to approximately $178,247,000 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 healthcare related facilities. Financing for such future investments may be provided by borrowings under the Company's bank line of credit, 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. Year 2000 Readiness Disclosure All statements contained in the following section are "Year 2000 Readiness Disclosures" within the meaning of the Year 2000 Information and Disclosure Act. The Year 2000 issue (the "Year 2000 Issue") in computers arises from the common industry practice of using two digits to represent a date in computer software code and databases to enhance both processing time and save storage space. Therefore, when dates in the year 2000 and beyond are indicated and computer programs read the date "00," the computer may default to the year "1900" rather than the correct "2000." This could result in incorrect calculations, faulty data and computer shutdowns, which would cause disruptions of operations. The Company is reviewing the risks of the Year 2000 Issue with regard to the Company's own internal operations, information systems and software applications and the impact on the Company of its outside vendors', lessees' and borrowers' ability to operate. The Company believes its own internal operations, information systems and software applications are likely to be compliant or will be compliant by mid-1999 based upon reasonable assurance by vendors and the Company's information systems consultant. The Company's computer information system currently consists of 16 personal computers and 1 network server. The Company anticipates replacing its entire computer system during the second quarter of 1999 to enable it to upgrade its accounting software unrelated to the Year 2000 Issue. The cost to remediate the Year 2000 Issue with regard to the Company's internal operations, information systems and software applications is not believed to be material. The Company's vendors that provide banking, communications and payroll services and the Company's lessees and borrowers will also likely be affected by the Year 2000 Issue. If the Company's vendors, lessees and borrowers are not Year 2000 compliant, or if they face disruptions in their operations or cash flows due to Year 2000 Issues, the Company could face significant temporary disruptions in rent and mortgage payments and, therefore, cash flows after that date. 8 The Company's lessees and borrowers generally rely extensively on information systems, including systems for capturing patient and cost information and for billing and collection of reimbursement for healthcare services provided. Furthermore, the Company's lessees and borrowers likewise are dependent on a variety of third parties, including, but not limited to, Medicare and Medicaid programs, insurance companies, HMO's and other private payors, governmental agencies, fiscal intermediaries that process claims and make payments for the Medicare and Medicaid programs, utilities that provide electricity, water, natural gas and communications services, and vendors of medical supplies and pharmaceuticals used in patient care, all of whom must also adequately address the Year 2000 Issue. The Company is currently reviewing publicly filed information of its lessees, borrowers and vendors regarding their state of readiness with respect to identifying and remediating their Year 2000 Issues. In January of 1999, the Company began sending questionnaires to and/or contacting its lessees, borrowers and vendors regarding their state of readiness with respect to identifying and remediating their Year 2000 Issues. The Company plans to complete the assessment by mid- 1999. However, it is not possible for the Company to determine or be assured that adequate remediation of the Year 2000 Issue will be accomplished by such lessees, borrowers and vendors. Furthermore, it is not possible for the Company to determine or be assured that third parties upon which the Company's lessees, borrowers and vendors are dependent, will accomplish adequate remediation of their Year 2000 Issues. The Company will also have risks associated with Year 2000 Issues in non- information technology areas as it relates to owned properties. There is a risk that embedded chips in elevators, security systems, electrical systems and similar technology-driven devices may stop functioning due to Year 2000 Issues. Substantially all of the Company's owned properties are leased under triple-net leases and as such, the cost to remediate any of these items will be paid by the lessees. Based on currently available information, the Company believes that the impact of the Year 2000 Issue, as it relates to its internal operations, information systems and software applications will not be material. However, there can be no assurance that the Year 2000 Issues of its vendors, lessees, borrowers and third parties upon which they are dependent will not have a material impact on the future operations and/or financial results of the Company. Readers are cautioned that most of the statements contained in the "Year 2000 Readiness Disclosure" paragraphs are forward looking and should be read in conjunction with the Company's disclosures under the heading "Statement Regarding Forward Looking Disclosure" set forth above. Quantitative and Qualitative Disclosures About Market Risk The "Market Risk Exposure" paragraphs are presented to provide an update about material changes to the "Market Risk Exposure" paragraphs included in the Company's 1998 Annual Report on Form 10-K filed with the Securities and Exchange Commission and should be read in conjunction with those paragraphs. The Company is exposed to market risks related to fluctuations in interest rates on its mortgage loans receivable and debt. The Company does not utilize interest rate swaps, forward or option contracts on foreign currencies or commodities, or other types of derivative financial instruments. Readers are cautioned that many of the statements contained in the "Market Risk Exposure" paragraphs are forward looking and should be read in conjunction with the Company's disclosures under the heading "Statement Regarding Forward Looking Disclosure" set forth above. The Company provides mortgage loans to operators of healthcare facilities as part of its normal operations. The majority of the loans have fixed rates. Four of the mortgage loans have adjustable rates, however, the rates adjust only once or twice over the loan lives and the minimum adjusted rate is equal to the current rate. Therefore, all mortgage loans receivable are treated as fixed rate notes. 9 The Company utilizes debt financing primarily for the purpose of making additional investments in healthcare facilities. Historically, the Company has made short-term borrowings on its bank line of credit to fund its acquisitions until market conditions were appropriate, based on management's judgment, to issue stock or fixed rate debt to provide long-term financing. During the three months ended March 31, 1999, the Company issued an additional $63,750,000 of fixed rate debt maturing on the following dates with the following interest rates: $23,750,000 maturing in 2004 at an average rate of 7.56% and $40,000,000 maturing in 2009 at an average rate of 7.87%. In addition, the bank borrowings under the Company's bank line of credit have increased to $61,500,000 from $42,000,000. In January of 1999, $57,431,000 of the Company's 6.25% convertible debentures were repaid and the remaining $8,000 were converted into 356 shares of the Company's common stock. The Company does not believe that the future market risks related to the above securities or those detailed in the 1998 Annual Report on Form 10-K will have a material impact on the Company or the results of its future operations. 10 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits 3.1 Amendment Number Nine to Credit Agreement dated as of March 8, 1999 between the Company and Wells Fargo Bank, National Association, The Bank of New York, Sanwa Bank California and Nationsbank, N.A. 27. Financial Data Schedule (b) Reports on Form 8-K A Form 8-K dated February 18, 1999 was filed to include an exhibit related to the Company's $500 million medium-term note shelf registration statement. 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: May 12, 1999 NATIONWIDE HEALTH PROPERTIES, INC. /s/ Mark L. Desmond By: __________________________________ Mark L. Desmond Senior Vice President and Chief Financial Officer (Principal Financial Officer) 12 EX-3.1 2 AMENDMENT NUMBER NINE TO CREDIT AGREEMENT 03/08/99 EXHIBIT 3.1 AMENDMENT NUMBER NINE TO CREDIT AGREEMENT ----------------------------------------- This AMENDMENT NUMBER NINE TO CREDIT AGREEMENT, dated as of March 8, 1999 (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 Section 4.1(b) of the Credit Agreement to provide for a longer period of time for the Banks to respond to a request by the Borrower to extend the Termination Date. WHEREAS, subject to the terms and conditions contained herein, the Banks are willing to amend such provisions 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 Nine 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, that certain Amendment Number Five to Credit Agreement dated as of April 1, 1997, that certain Amendment Number Six and Waiver to Credit Agreement dated as of August 15, 1997, and that certain Amendment Number Seven and Restatement of Amendments One Through Six to Credit Agreement dated as of April 6, 1998, and that certain Amendment Number Eight to Credit Agreement dated as of January 29, 1999. ARTICLE 2 AMENDMENT OF CERTAIN PROVISIONS ------------------------------- 1 OF THE CREDIT AGREEMENT ----------------------- 2.1 Amendment of Section 4.1(b) of the Credit Agreement. Section 4.1(b) of the --------------------------------------------------- Credit Agreement is amended by deleting clause (ii) therefrom in its entirety and substituting therefor the following clause: (ii) Notwithstanding Section 4.1(b)(i), not later than January 31 of ----------------- each year, commencing January 31, 1996, the Borrower may (at its option) give written notice to the Agent and each Bank that it requests the Banks to extend the Termination Date then in effect for an additional one year period. Each of the Banks may grant or reject such request in its sole discretion and shall provide written notice of such grant or rejection to the Borrower and the Agent not later than May 1 following such request; provided that failure of any Bank -------- so to provide such written notice to the Borrower and the Agent shall be deemed a rejection of such request. ARTICLE 3 MISCELLANEOUS ------------- 3.1 Loan Documents. This Amendment shall be one of the Loan Documents. -------------- 3.2 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 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. 3.3 Effectiveness. This Amendment shall be effective as of the date first ------------- written above, when 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. 3.4 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. 3.5 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] 2 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 ASSOCIATION, in its individual capacity and as Agent By: ____________________________ Title: _____________________ SANWA BANK CALIFORNIA By: ____________________________ Title: _____________________ By: ____________________________ Title: _____________________ NATIONSBANK, N.A. By: ____________________________ Title: _____________________ By: ____________________________ Title: _____________________ THE BANK OF NEW YORK By: ____________________________ Title: _____________________ By: ____________________________ Title: _____________________ NATIONWIDE HEALTH PROPERTIES, INC. By: ____________________________ Title: _____________________ By: ____________________________ Title: _____________________ 3 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 14,442 0 6,212 0 0 40,863 1,293,511 141,656 1,399,202 63,411 735,120 0 100,000 4,622 496,049 1,399,202 0 39,309 0 10,082 0 0 11,497 17,730 0 17,730 0 0 0 17,730 0.34 0.34
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