<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1997
-----------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ______
MANOR CARE, INC.
----------------
COMMISSION FILE NUMBER 1-8195
-----------------------------
Incorporated in Delaware E.I.#52-1200376
- ------------------------ ----------------
11555 Darnestown Road, Gaithersburg, Maryland 20878
- ---------------------------------------------------
Telephone: (301) 979-4000
- ---------
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- --------
63,621,768 Common Shares were outstanding as of January 6, 1998.
This report contains 13 pages.
<PAGE>
PART I. FINANCIAL INFORMATION
FINANCIAL STATEMENTS
MANOR CARE, INC. AND SUBSIDIARIES
---------------------------------
The consolidated balance sheet as of November 30, 1997, the consolidated
statements of income for the three and six month periods ended November 30, 1997
and 1996, and the consolidated statements of cash flows for the six months ended
November 30, 1997 and 1996, have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position,
results of operations and cash flows at November 30, 1997 and for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's May 31, 1997 annual report to shareholders and
September 15, 1997 Form 8-K, previously filed with the Commission. The results
of operations for the three and six month periods ended November 30, 1997 and
1996, and cash flows for the six months ended November 30, 1997 and 1996, are
not necessarily indicative of the operating results or cash flows for the full
year.
2
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
November 30, 1997 May 31, 1997
------------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 27,065 $ 18,396
Receivables (net of allowances
of $30,688 and $24,670) 166,393 126,043
Inventories 11,527 11,273
Current deferred income tax benefit 30,300 32,083
Other current assets 28,420 5,874
---------- ----------
Total current assets 263,705 193,669
---------- ----------
Property and equipment, at cost
Land 78,108 76,130
Buildings and improvements 835,351 815,851
Capitalized leases 12,747 12,747
Furniture, fixtures and equipment 189,544 175,896
Facilities in progress 86,772 48,154
---------- ----------
1,202,522 1,128,778
Less accumulated depreciation (349,780) (322,985)
---------- ----------
Net property and equipment 852,742 805,793
---------- ----------
Goodwill 9,366 9,479
---------- ----------
Advances to discontinued lodging segment - 115,723
---------- ----------
Net investment in discontinued assisted living,
pharmacy and home health segments 276,955 277,066
---------- ----------
Due from discontinued assisted living, pharmacy
and home health segments 75,260 75,560
---------- ----------
Other assets 88,250 70,288
---------- ----------
Total assets $1,566,278 $1,547,578
========== ==========
</TABLE>
3
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
November 30, 1997 May 31, 1997
------------------ ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 5,664 $ 11,649
Accounts payable 52,014 53,462
Accrued expenses 89,306 94,840
Income taxes 13,712 -
---------- ----------
Total current liabilities 160,696 159,951
---------- ----------
Mortgages and other long-term debt 308,616 201,680
---------- ----------
Subordinated long-term debt 149,490 289,510
---------- ----------
Deferred income taxes and other 218,453 206,006
---------- ----------
Stockholders' equity
Common stock 6,710 6,682
Contributed capital 198,605 194,640
Retained earnings 575,020 538,630
Treasury stock, at cost (51,312) (49,521)
---------- ----------
Total stockholders' equity 729,023 690,431
---------- ----------
Total liabilities and stockholders'
equity $1,566,278 $1,547,578
========== ==========
</TABLE>
4
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per-share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $280,254 $259,263 $554,308 $509,489
-------- -------- -------- --------
Expenses
Operating expenses 207,910 193,357 416,157 384,896
Depreciation and amortization 16,693 14,653 32,678 29,239
General corporate and other 11,279 13,460 22,544 27,623
-------- -------- -------- --------
Total expenses 235,882 221,470 471,379 441,758
-------- -------- -------- --------
Income from operations 44,372 37,793 82,929 67,731
-------- -------- -------- --------
Other income and (expenses)
Interest income from advances
to discontinued lodging segment 2,390 5,078 4,994 10,157
Interest income and other 1,115 1,494 3,707 3,147
Interest expense (6,202) (6,165) (13,031) (11,467)
-------- -------- -------- --------
Total other income and
(expenses), net (2,697) 407 (4,330) 1,837
-------- -------- -------- --------
Income from continuing operations
before income taxes 41,675 38,200 78,599 69,568
Income taxes 16,300 15,270 30,400 27,597
-------- -------- -------- --------
Income from continuing
operations 25,375 22,930 48,199 41,971
Discontinued operations:
Income from discontinued assisted
living, pharmacy and home health
operations (net of income taxes of
$4,452, $530, $5,292 and $1,803) 331 1,104 (2,633) 2,329
Income from discontinued lodging
operations (net of income taxes
of $0, $5,800, $0, $8,734) - 8,410 - 11,829
Extraordinary item, net of taxes (3,216) - (3,216) -
Cumulative change in accounting
principle, net of taxes (3,173) - (3,173) -
-------- -------- -------- --------
Net income $ 19,317 $ 32,444 $ 39,177 $ 56,129
======== ======== ======== ========
Average shares outstanding 63,787 63,079 63,748 63,040
-------- -------- -------- --------
Earnings per share:
Earnings from continuing
operations $ 0.40 $ 0.36 $ 0.76 $ 0.67
Earnings from discontinued
assisted living, pharmacy
and home health operations 0.01 0.02 (0.04) 0.03
Earnings from discontinued
lodging operations - 0.13 - 0.19
Extraordinary item (0.05) - (0.05) -
Cumulative change in
accounting principle (0.05) - (0.05) -
-------- -------- -------- --------
Total earnings per share $ 0.30* $ 0.51 $ 0.62 $ 0.89
======== ======== ======== ========
Dividends per share of common stock $ 0.022 $ 0.022 $ 0.044 $ 0.044
======== ======== ======== ========
</TABLE>
*Does not add due to rounding.
5
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended November 30,
-----------------------------
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 39,177 $ 56,129
Reconciliation of net income to net cash
provided by operating activities:
Income from discontinued assisted living, pharmacy,
home health 2,633 (2,329)
Income from discontinued lodging segment - (11,829)
Depreciation and amortization 32,678 29,239
Cumulative change in accounting principle 5,288 -
Amortization of debt discount 115 397
Provision for bad debts 11,900 5,847
Increase in deferred taxes 3,516 8,219
Gain on sale of properties (2,057) (7,321)
Minority interest 79 296
Changes in assets and liabilities
Change in receivables (44,976) (30,442)
Change in inventories and other current assets (22,800) (20,805)
Change in current liabilities (6,889) (6,575)
Change in income taxes payable 13,712 9,442
Change in other liabilities 10,634 (4,439)
--------- ---------
NET CASH PROVIDED BY CONTINUING OPERATIONS 43,010 25,829
NET CASH PROVIDED BY DISCONTINUED
ASSISTED LIVING, PHARMACY AND HOME HEALTH
OPERATIONS 3,875 13,103
NET CASH PROVIDED BY DISCONTINUED
LODGING SEGMENT - 40,599
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 46,885 79,531
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (81,602) (58,992)
Investment in systems development (18,905) (6,352)
Acquisition of healthcare facilities - (4,440)
Sale of healthcare facilities - 17,283
Payments of receivables from discontinued lodging
operations 115,723 -
Advances to discontinued assisted living, pharmacy and
home health operations (2,222) (19,306)
Other items, net (7,532) (6,437)
--------- ---------
NET CASH PROVIDED (UTILIZED) BY INVESTING ACTIVITIES
OF CONTINUING OPERATIONS 5,462 (78,244)
NET CASH PROVIDED (UTILIZED) BY INVESTING ACTIVITIES
OF DISCONTINUED ASSISTED LIVING, PHARMACY AND
HOME HEALTH OPERATIONS 5,043 (11,816)
NET CASH (UTILIZED) BY INVESTING ACTIVITIES
OF DISCONTINUED LODGING SEGMENT - (29,424)
--------- ---------
NET CASH PROVIDED (UTILIZED) BY INVESTING
ACTIVITIES 10,505 (119,484)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt 108,661 149,012
Principal payments of debt (1,748) (106,872)
Proceeds from exercise of stock options 3,989 10,149
Treasury stock acquired (1,807) -
Retirement of bonds (146,100) (9,900)
Dividends paid (2,798) (2,765)
--------- ---------
NET CASH (UTILIZED) PROVIDED BY FINANCING
ACTIVITIES OF CONTINUING OPERATIONS (39,803) 39,624
NET CASH (UTILIZED) BY FINANCING ACTIVITIES
OF DISCONTINUED ASSISTED LIVING, PHARMACY AND
HOME HEALTH OPERATIONS (8,918) (1,287)
NET CASH PROVIDED BY FINANCING
ACTIVITIES OF DISCONTINUED LODGING SEGMENT - 654
--------- ---------
NET CASH (UTILIZED) PROVIDED BY FINANCING
ACTIVITIES (48,721) 38,991
--------- ---------
CHANGE IN CASH AND CASH EQUIVALENTS 8,669 (962)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 18,396 38,943
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 27,065 $ 37,981
========= =========
</TABLE>
6
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
On September 15, 1997, the Company announced its intention to proceed with a
separation of its assisted living, pharmacy and home health businesses
(collectively, the "Health Services Business") from its skilled nursing, real
estate and healthcare facility development business via a spin-off of the Health
Services Business (the "Distribution"). The spin-off of the Health Services
Business will be effected by a distribution to the Company's shareholders of all
the common stock of New ManorCare Health Services, Inc., a wholly owned
subsidiary of the Company, which as of the date of the spin-off, will own and
operate all the Company's assisted living operations as well as manage and lease
the skilled nursing assets owned by the Company. Following the Distribution, New
ManorCare Health Services, Inc. will change its name to ManorCare Health
Services, Inc. and the Company will change its name to Manor Care Realty, Inc.
The Board of Directors voted to approve in principle the transaction subject to
receipt of other approvals and consents and satisfactory implementation of the
arrangements for the Distribution. The Company anticipates that the transaction
will be completed by the end of fiscal year 1998. The Distribution is
conditional upon certain matters, including receipt of a satisfactory solvency
opinion, and the declaration of the special dividend by the Company's Board of
Directors. As of November 30, 1997, the Company had cash advances totaling
$277.0 million outstanding to the Health Services Business. These advances will
be forgiven at the date of the spin-off.
The following discussion is based on the operations of the skilled nursing
facilities before the Distribution and related transactions. The operations of
the skilled nursing facilities will continue to have a material impact on Manor
Care Realty after the Distribution because of certain lease agreements which
will be in place between ManorCare Health Services and Manor Care Realty.
However, the information contained herein does not indicate the results of
operations or financial condition of Manor Care Realty that would have been
reported for the periods indicated had the Distribution occurred on the first
day of the periods discussed.
Following the Distribution, Manor Care Realty's principal sources of revenue
will be payments pursuant to the leasing of the skilled nursing facilities to
ManorCare Health Services, the operations of the developed assisted living
facilities prior to sale, the proceeds of the sale of assisted living
facilities, and revenues of Mesquite Hospital. Manor Care Realty's principal
operating expenses will be related to the operation of the assisted living
facilities prior to sale, the operating expenses of Mesquite Hospital and
general overhead expenses. The following review of operating results includes
the historical results of the skilled nursing facilities for the specified
periods. The results of the Company's assisted living, pharmacy and home health
segments have been reported as discontinued operations.
Revenues increased $21.0 million (8.1%) and $44.8 million (8.8%) to $280.3
million and $554.3 million for the three and six months ended November 30, 1997
as compared to the same periods in the prior year. The increase in revenues is
principally attributable to increases in rates of 5.1% and capacity. The growth
in bed capacity is attributable to the purchase of one skilled nursing facility
(179 beds), openings of three newly constructed facilities (387 beds) and
additions/renovations at existing facilities (274 beds). The increase in rates
includes the incremental impact of settlements with government agencies related
to prior period cost reports of ($0.2) million and $3.9 million for the three
and six months ended November 30, 1997 as compared to the same periods in the
prior year.
7
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations (cont.)
- -----------------------------
Operating expenses increased $14.6 million (7.5%) and $31.3 million (8.1%) to
$207.9 million and $416.2 million for the three and six months ended November
30, 1997 as compared to the same periods in the prior year. The increase in
operating expenses is attributable to additional capacity and increased staffing
necessitated by higher patient acuity and more complex product and service
offerings. As a result, the operating profit associated with the operation of
the skilled nursing facilities for the six months ended November 30, 1997
increased to $138.2 million from $124.6 million in the previous period.
Operating margin as a percentage of sales increased from 24.5% to 24.9%.
Depreciation and amortization increased $2.0 million and $3.4 million for the
three and six month periods ended November 30, 1997, respectively, due to
increases in property and equipment resulting from additions and renovations to
existing facilities as well as new construction during the past twelve months.
General corporate and other expense for the three and six month periods ended
November 30, 1997, decreased $2.2 million and $5.1 million, respectively, when
compared to the same periods last year. This decrease was partially due to a
reduction in employees related to the discontinued lodging operations and
reengineering efforts in both organizational and financial systems.
Additionally, a gain of $2.1 million from the sale of a corporate office
building is included in general corporate and other expense for the three and
six month periods ended November 30, 1997. For the three and six month periods
ended November 30, 1996, a gain of $7.3 million from the sale of four nursing
centers and charitable contributions expense of $5.0 million are included in
general corporate and other expense. General corporate and other expense
represented 4.0% and 4.1% of revenues during the three and six month periods
ended November 30, 1997 compared to 5.2% and 5.4% for the same periods last
year. General corporate and other expense includes risk management, information
systems, treasury, accounting, legal, human resources and other administrative
support functions.
Interest income from advances to discontinued lodging operations decreased by
$2.7 million and $5.2 million for the three and six months ended November 30,
1997 compared to the same periods last year. This reduction was attributable to
the prepayment of $110.0 million of indebtedness in the fourth quarter of fiscal
year 1997 and the prepayment of the remaining $115.7 million in the second
quarter of fiscal year 1998.
Interest expense remained constant for the three month period ended November 30,
1997 as compared to the same prior year period and increased $1.6 million for
the six month period ended November 30, 1997 over the prior year. The increase
in interest expense resulted primarily from an increase in the average
outstanding balance of the $250 million competitive advance and multi-currency
revolving credit facility (the "Credit Facility"). Interest capitalized in
conjunction with construction programs amounted to $1.5 million and $2.3 million
for the three and six months ended November 30, 1997 and $0.8 million and $2.0
million for the three and six months ended November 30, 1996.
8
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations (cont.)
- -----------------------------
Income from continuing operations before income taxes for the three and six
month periods ended November 30, 1997, was $41.7 million and $78.6 million,
respectively. This compares to income from continuing operations before income
taxes in the same periods last year of $38.2 million and $69.6 million.
On November 1, 1996, Manor Care, Inc. completed the spin-off of its lodging
segment by contributing its net investment in discontinued lodging operations
totaling $165.7 million to Choice Hotels International, Inc. Manor Care
shareholders of record on October 10, 1996, received one share of Choice Hotels
International, Inc. common stock for each outstanding share of Manor Care common
stock. Accordingly, lodging results are reported as discontinued operations for
all periods presented. Because the spin-off was completed two months into the
second quarter, results for the three and six month periods ended November 30,
1996 include less than three and six months, respectively, of income and
earnings per share from the discontinued lodging segment.
On November 20, 1997, a consensus was reached by the Emerging Issues Task Force
regarding reengineering costs (Issue 97-13) providing that all reengineering
costs be expensed as incurred based on the fair value of the services rendered.
As a result, in November 1997, the Company expensed $3.2 million of
reengineering costs (net of taxes) as the effect of a cumulative change in
accounting principle.
Long-Term Debt
- --------------
Long-term debt was $458.1 million at November 30, 1997 compared to $491.2
million at May 31, 1997. Amounts related to assisted living mortgages totaled
$45.3 million at November 30, 1997 and $45.6 million at May 31, 1997 and are
included in long-term debt as well as in due from discontinued assisted living,
pharmacy and home health segments, as these mortgages will be transferred to the
discontinued assisted living, pharmacy and home health segments on the date of
the Distribution. The current portion of long term debt amounted to $5.7 million
at November 30, 1997.
On November 17, 1997, Manor Care redeemed all outstanding 9 1/2% Senior
Subordinated Notes due 2002 at a redemption price of 103.56% with the proceeds
of borrowings under the Credit Facility. Manor Care recorded an extraordinary
item of $3.2 million after taxes representing the premium paid on redemption.
In October 1997, the Company received a $115.7 million prepayment on its three
year, 9% note with Choice Hotels International, Inc., the proceeds from which
were used to pay down borrowings under the Credit Facility. At November 30,
1997, bank lines totaled $275.0 million, of which $38.1 million remained unused.
9
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Long-Term Debt (cont.)
- ----------------------
In June 1996, the Company issued $150.0 million of 7.5% Senior Notes due 2006.
These notes are redeemable at the option of the Company at any time at a price
equal to the greater of (a) the principal amount or (b) the sum of the present
values of the remaining scheduled payments of principal and interest, discounted
with an applicable treasury rate plus 15 basis points, plus accrued interest to
the date of redemption. The proceeds of this offering were used to repay
borrowings under the Company's Credit Facility.
In July 1996, the Company repurchased 9.5% Senior Notes with a face amount of
$9.9 million for $10.5 million.
Acquisitions, Openings, Divestitures and Sales of Property
- ----------------------------------------------------------
During the first six months of fiscal year 1998, the Company opened one newly
constructed skilled nursing facility located in California and sold a corporate
office building located in Maryland. During the first six months of fiscal 1997,
the Company transferred an assisted living facility to the discontinued lodging
operations with an approximate net book value of $4.9 million. In addition, the
Company acquired a nursing center in California for $4.4 million and sold four
nursing centers in Indiana, Iowa, Illinois and Texas for $17.3 million. The
Company also opened three newly constructed skilled nursing facilities.
Liquidity and Capital Resources
- -------------------------------
The Company has available cash balances of $27.1 million as of November 30,
1997. In connection with the Distribution, Manor Care Realty, through its
wholly-owned subsidiary, Manor Care Real Estate, anticipates offering $350.0
million Senior Notes due 2008. Concurrent with the sale of the Notes, the
Company anticipates entering into new credit facilities (the "New Credit
Facilities") to be provided by a group of banks consisting of a $300.0 million
revolving credit facility and a $150.0 million term loan facility. The gross
proceeds from the issuance of the Notes, together with borrowings under the New
Credit Facilities, will be used to effect the Distribution, including financing
the cash portion of the capital contribution to New ManorCare Health Services,
refinancing certain debt of Manor Care and paying related fees and expenses.
Additionally, ManorCare Health Services plans to offer to exchange each $1,000
principal amount of its 7 1/2 % Senior Notes due 2006 (the "New MCHS Senior
Notes") for each $1,000 principal amount of 7 1/2 % Senior Notes due 2006 of
Manor Care (the "Old Senior Notes") properly tendered (the "Exchange Offer"). In
addition, consents to certain amendments of the covenants governing the Old
Senior Notes will be sought in connection with the Exchange Offer. Consummation
of the Exchange Offer is conditional upon, among other things, acceptance of the
Exchange Offer by holders of at least a majority in principal amount of the Old
Senior Notes (the "Minimum Tender Condition") and consummation of the
Distribution. As a result of the Exchange Offer, ManorCare Health Services, not
Manor Care Realty, will be the obligor on the New MCHS Senior Notes; and Manor
Care Realty, not ManorCare Health Services, will remain the obligor on the Old
Senior Notes.
10
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources (cont.)
- -------------------------------
Following the Distribution, Manor Care Realty's principal capital requirements
will be financing the development of skilled nursing and assisted living
facilities. Manor Care Realty expects to invest between $1.5 billion and $1.9
billion over the next five years to develop skilled nursing and assisted living
facilities. This includes acquisitions of existing skilled nursing facilities
and capital improvements for new and existing facilities. Manor Care Realty
expects to fund these activities with proceeds of borrowings under the New
Credit Facilities, proceeds from the sale of facilities to ManorCare Health
Services pursuant to a development agreement and cash provided from operating
activities, including payments from ManorCare Health Services under certain
lease agreements. Completing this development plan will require additional debt
and equity financing, including proceeds from an equity offering expected to
occur in the twelve months following the Distribution. There can be no assurance
that Manor Care Realty will be able to obtain debt or equity financing on terms
acceptable to it or that the proceeds of such financing will be available or
sufficient to fund Manor Care Realty's capital requirements.
11
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
- -------
At the annual shareholders meeting on September 15, 1997, the shareholders
elected the directors who had been nominated by the Company. The number of votes
cast was as follows:
<TABLE>
<CAPTION>
For Against/Withheld
---------- ----------------
<S> <C> <C>
Stewart Bainum 56,083,780 172,511
Stewart Bainum, Jr. 56,085,789 170,502
Regina E. Herzlinger 56,085,903 170,788
William H. Longfield 56,089,981 166,310
Frederic V. Malek 56,055,582 200,709
Jerry E. Robertson 56,067,818 188,473
Kennett L. Simmons 56,085,398 170,893
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
- -------
(a) Exhibits
27 - Financial Data Schedule
(b) The following reports on Form 8-K were filed during the three months ended
November 30, 1997:
1) Form 8-K dated September 15, 1997 reporting under Item 2, the
announcement of the Company's intention to spin-off the Company's
assisted living, pharmacy and home health businesses.
12
<PAGE>
MANOR CARE, INC. AND SUBSIDIARIES
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MANOR CARE, INC. (Registrant)
-----------------
--------------------------------------
Date: January 12, 1998 By: Leigh C. Comas
----------------- Vice President Finance and Treasurer
--------------------------------------
Date: January 12, 1998 By: James H. Rempe
----------------- Senior Vice President, General Counsel
and Secretary
--------------------------------------
Date: January 12, 1998 By: Margarita Schoendorfer
----------------- Vice President and Controller
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, THE CONSOLIDATED STATEMENTS OF INCOME AND THE
CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<CASH> 27,065
<SECURITIES> 0
<RECEIVABLES> 197,081
<ALLOWANCES> 30,688
<INVENTORY> 11,527
<CURRENT-ASSETS> 263,705
<PP&E> 1,202,522
<DEPRECIATION> 349,780
<TOTAL-ASSETS> 1,566,278
<CURRENT-LIABILITIES> 160,696
<BONDS> 458,106
0
0
<COMMON> 6,710
<OTHER-SE> 722,313
<TOTAL-LIABILITY-AND-EQUITY> 1,566,278
<SALES> 0
<TOTAL-REVENUES> 554,308
<CGS> 0
<TOTAL-COSTS> 426,801
<OTHER-EXPENSES> 32,678
<LOSS-PROVISION> 11,900
<INTEREST-EXPENSE> 13,031
<INCOME-PRETAX> 78,599
<INCOME-TAX> 30,400
<INCOME-CONTINUING> 48,199
<DISCONTINUED> (2,633)
<EXTRAORDINARY> (3,216)
<CHANGES> (3,173)
<NET-INCOME> 39,177
<EPS-PRIMARY> 0.615<F1>
<EPS-DILUTED> 0.615<F1>
<FN>
<F1>The Company presents simple earnings per share (EPS) on the face of its
income statement as fully dilutive EPS is at least 97% of simple EPS. The
figures presented above are simple EPS.
</FN>
</TABLE>
