FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(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, 1995
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Health Care REIT, Inc.
(Exact name of registrant as specified in its charter)
Delaware 34-1096634
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One SeaGate, Suite 1950, Toledo, Ohio 43604
(Address of principal executive office) (Zip Code)
(Registrant's telephone number, including area code) (419) 247-2800
- -------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes _____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class: Shares of Common Stock, $1.00 par value
Outstanding 11,649,725 shares
<PAGE>
HEALTH CARE REIT, INC.
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet as of
March 31, 1995 and Audited Consolidated Balance
Sheet as of December 31, 1994. 3
Unaudited Consolidated Statements of Income
for the three months ended March 31, 1995
and 1994. 4
Unaudited Consolidated Statements of Cash Flows for
the three months ended March 31, 1995 and 1994. 5
Unaudited Consolidated Statements of Shareholders'
Equity for the three months ended March 31, 1995
and 1994. 6
Consolidated Notes to Financial Statements. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 7
Part II. OTHER INFORMATION
Item 5. Other Information. 10
Item 6. Exhibits and Reports on Form 8-K. 10
SIGNATURES 11
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS (Unaudited)
HEALTH CARE REIT, INC. AND SUBSIDIARY
<TABLE>
March 31 March 31
1995 1994
(Unaudited) (Audited)
------------ ------------
<C> <C>
<S>
ASSETS
Real Estate Related Investments:
Loans receivable:
Mortgage loans $231,122,105 $230,781,805
Construction and other short-term loans 24,628,455 17,073,652
Working capital loans to related parties 6,375,163 7,068,254
------------ ------------
262,125,723 254,923,711
Investment in operating-lease properties 56,841,913 57,231,651
Investment in direct financing leases 11,369,894 11,427,721
------------ ------------
330,337,530 323,583,083
Less allowance for losses 5,150,000 5,150,000
------------ ------------
NET REAL ESTATE RELATED INVESTMENTS 325,187,530 318,433,083
Other Assets:
Deferred loan expenses 2,445,429 2,469,260
Investments 532,000
Cash and cash equivalents 647,286 935,449
Receivables and other assets 2,286,399 2,264,197
------------ ------------
5,911,114 5,668,906
------------ ------------
$331,098,644 $324,101,989
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Borrowings under line of credit arrangements $ 76,300,000 $ 70,900,000
Other long-term obligations 57,178,748 57,372,790
Accrued expenses and other liabilities 8,386,728 6,649,424
------------ ------------
TOTAL LIABILITIES 141,865,476 134,922,214
Shareholders' Equity:
Preferred Stock, $1.00 par value:
Authorized - 10,000,000 shares
in 1995
Issued and outstanding - none
Common Stock, $1.00 par value:
Authorized - 40,000,000 shares
Issued and outstanding - 11,649,725
in 1995 and 11,595,115 in 1994 11,649,725 11,595,115
Capital in excess of par value 162,192,064 161,086,758
Undistributed net income 15,391,379 16,497,902
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 189,233,168 189,179,775
------------ ------------
$331,098,644 $324,101,989
============ ============
See notes to financial statements
</TABLE>
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
HEALTH CARE REIT, INC. AND SUBSIDIARY
<TABLE>
Three Months Ended
March 31
1995 1994
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<S>
Gross Income:
Interest and other income $ 7,526,250 $ 5,236,096
Operating leases:
Rents 1,541,609 1,149,753
Direct financing leases:
Lease income 382,164 1,685,742
Gain on exercise of options 192,275
Loan and commitment fees 174,970 177,373
----------- -----------
9,624,993 8,441,239
Expenses:
Interest:
Senior notes and other long-
term obligations 1,455,976 1,545,209
Line of credit arrangements 1,668,373 528,954
Loan expense 185,689 74,243
Management fees 645,658 643,054
Provision for depreciation 389,738 301,937
Other operating expenses 414,594 363,592
----------- -----------
4,760,028 3,456,989
----------- -----------
NET INCOME $ 4,864,965 $ 4,984,250
=========== ===========
Average number of shares
outstanding 11,619,386 11,467,040
Net income per share $ .42 $ .43
Dividends per share $ .515 $ .495
See notes to financial statements
</TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
HEALTH CARE REIT, INC. AND SUBSIDIARY
<TABLE>
Three Months Ended
March 31
1995 1994
-----------------------------
<C> <C>
<S>
OPERATING ACTIVITIES:
Net income $ 4,864,965 $ 4,984,250
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization of loan and organization
expenses 186,228 74,782
Provision for depreciation 389,738 301,937
Loan and commitment fees earned less
than cash received 242,086 368,187
Direct financing lease income less than
cash received 57,827 460,254
Interest income (in excess of) less
than cash received (45,863) 103,012
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
AVAILABLE FOR DISTRIBUTION 5,694,981 6,292,422
Increase in accrued expenses and other
liabilities 1,495,218 935,322
Increase in other receivables and
prepaid items (22,741) (332,458)
------------ ------------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 7,167,458 6,895,286
INVESTING ACTIVITIES:
Proceeds from exercise of lease purchase
options 1,610,393
Purchase of investments (532,000)
Investment in loans receivable (10,063,758) (33,390,720)
Investment in operating-lease properties (7,263,353)
Investment in direct financing leases (1,300,000)
Principal collected on loans 2,907,609 4,354,536
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (7,688,149) (35,989,144)
FINANCING ACTIVITIES:
Long-term borrowings under line of
credit arrangements 27,700,000 42,100,000
Principal payments on long-term borrowings
under line of credit arrangements (22,300,000) (12,800,000)
Net proceeds from the issuance of shares 1,159,916 1,108,337
Principal payments on other long-term
obligations (194,042) (172,006)
Increase in deferred loan expense (161,858) (50,200)
Cash distributions to shareholders (5,971,488) (5,665,897)
------------ ------------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 232,528 24,520,234
------------ ------------
Decrease in cash and cash equivalents (288,163) (4,573,624)
Cash and cash equivalents at beginning of
period 935,449 4,896,314
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 647,286 $ 322,690
============ ============
Supplemental Cash Flow Information --
Interest Paid $ 1,680,853 $ 1,023,582
============ ============
See notes to financial statements
</TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
HEALTH CARE REIT, INC. AND SUBSIDIARY
<TABLE>
Three Months Ended
March 31
1995 1994
----------------------------
<C> <C>
<S>
Balances at beginning of period $189,179,775 $184,131,828
Net income 4,864,965 4,984,250
Proceeds from issuance of shares
under the dividend reinvestment
plan - 54,610 in 1995 and 47,980
in 1994 1,159,916 1,108,337
Cash dividend paid (5,971,488) (5,665,897)
------------ ------------
Balances at end of period $189,233,168 $184,558,518
============ ============
( ) Denotes deduction
See notes to financial statements
</TABLE>
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
Health Care REIT, Inc. and Subsidiary
Note A - Basis of Presentation
- ------------------------------
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered for a fair
presentation have been included. Operating results for the three
months ended March 31, 1995 are not necessarily an indication of
the results that may be expected for the year ended December 31,
1995. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1994.
Net income per share has been computed by dividing net income
by the average number of shares outstanding.
Note B - Investments
- --------------------
During the first quarter of 1995, the Company purchased common
stock in a privately held company. This investment does not have
a readily determinable fair value. Accordingly, this investment is
recorded at the lower of cost or estimated net realizable value.
Note C - Contingencies
- ----------------------
As disclosed in the financial statements for the year ended
December 31, 1994, the Company was contingently liable for certain
obligations amounting to approximately $20,175,000. No significant
change in these contingencies has occurred as of March 31, 1995.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
- -------------------------------
In the first quarter of 1995, the Company made an additional
$1,000,000 mortgage loan on an existing facility and continued to
finance nine construction loans and one participating loan for
approximately $8,638,000. In addition, the Company received
$1,050,000 principal repayment on a loan, as well as approximately
$693,000 working capital loan repayments. The above loan activity
is the reason total loans receivable increased $7,202,000 in the
first quarter of 1995.
The Company's working capital loans, all to related parties,
are expected to slowly decline as the underlying projects continue
to improve their financial performance and thereby pay down these
loans.
In the first quarter of 1995, the Company paid $532,000 for
common stock in a privately held company with which the Company has
several mortgage loans and operating-lease transactions. The
investment was pursuant to warrants the Company obtained when it
made the mortgage loans and invested in the operating-lease
properties.
Since December 31, 1994, borrowings under line of credit
arrangements increased $5,400,000 due to the investment activity
discussed above. As of March 31, 1995, the Company had
approximately $120,387,000 in unfunded commitments and total
available funding sources of approximately $102,200,000.
During the first quarter of 1995, the Company received
approximately $1,160,000 from the sale of its shares under the
dividend reinvestment plan.
Results of Operations
- ---------------------
Gross income for the first quarter of 1995 was $9,624,993 or
14% more than the first quarter of 1994. Interest income on loans
receivable and operating lease rents increased while direct
financing lease income and gain on exercise of options declined.
The increase in interest income on loans receivable and operating
lease rents is attributable to the growth in the loan and
operating-lease portfolios, two long-term trends which the Company
anticipates will continue. The decrease in direct financing lease
income and gain on exercise of options is a reflection of other
long-term trends which should also continue due to the decrease
market acceptance of direct financing leases.
In the first quarter of 1994, gross income included $192,275
in gains on exercise of options. However, there were no such gains
for the comparable period in 1995. Future gains on exercise of
options are anticipated to be few and modest, since the Company has
only six remaining direct financing lease investments which total
approximately $11,370,000.
Net income totalled $4,864,965 in the first quarter of 1995
versus $4,984,250 for the comparable period in 1994. The decrease
in net income was reflected in the $.42 per share earned in the
first quarter of 1995 versus $.43 per share earned in the first
quarter of 1994. Contributing factors were the absence of a gain
on exercise of options in 1995 (discussed above) and a tightening
in the Company's net interest rate margin, as explained below.
Average earnings on assets (excluding gains) increased 44
basis points in the first quarter of 1995 versus the first quarter
of 1994. The increase would have been higher except for placing
three loans on non-accrual status (discussed below) during the
first quarter of 1995. The increase in average earnings on assets
was a reflection of converting construction loans to higher earning
permanent mortgage loans during 1994 and the general rise in
interest rates during the last 12 months. At the same time, the
Company experienced a 117 basis point increase in its average cost
of borrowing. This was primarily due to the general rise in
interest rates, but the increase was also due to the cost of a
variable interest rate swap, which is due to expire in May 1995.
The Company does not intend to replace the expiring variable
interest rate swap. Therefore, unless there is a renewed increase
in general interest rates, the Company anticipates a moderation of
its average cost of borrowing in the near future.
As the Company continues to fulfill its financing commitments,
its borrowings on the lines of credit will increase even more,
which should favorably affect the average cost of debt.
Lastly, the Company's net income was affected by the average
quarter-end debt to equity ratio of .73 to 1 in 1995 versus .63 to
1 in the first quarter of 1994. The increase is due to the
increase in real estate related investments. The increase in debt
had the effect of increasing the Company's interest related
expense.
In January 1995, the Company filed a lawsuit for collection of
past due interest and principal of approximately $1,994,000 related
to a nursing home in Detroit, Michigan. In March of 1995, the
Company filed two lawsuits in Florida to collect past due interest
and principal on a mortgage loan secured by two behavioral care
facilities. In connection with the March filing, the Company
presented for payment and received $1,125,000 on a letter of credit
securing the Florida mortgage loan. After application of the
letter of credit proceeds, the Company's carrying value of the
Florida mortgage loan is approximately $13,468,000. Each of these
loans was put on non-accrual status effective the beginning of the
month the respective lawsuits were filed. The Company has
evaluated its allowance for losses and believes that the allowance
is adequate, based on the information presently available.
PART II. OTHER INFORMATION
Item 5. Other Information
- --------------------------
On January 18, 1995, the Company issued a press release in
which it announced that the Board of Directors voted to pay a
quarterly dividend of $.515 per share payable to shareholders of
record on February 3, 1995.
On February 6, 1995, the Company issued a press release in
which it announced, among other things, that the Board of Directors
had approved in principle the acquisition of First Toledo Advisory
Company, the manager of the Company. The transaction is subject to
definitive agreements, stockholder approval and other customary
conditions.
On February 9, 1995, the Company issued a press release in
which it announced, among other things, that the 1994 net income
per share for the year was up $.02 or .9% more than 1993.
On March 24, 1995, the Company issued a press release in which
it announced, among other things, that it had filed two lawsuits in
Florida to collect past due interest and principal on a mortgage
loan secured by two behavioral facilities.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
4. Specimen of Note with Fifth Third Bank
99. Press release dated January 18, 1995
99. Press release dated February 6, 1995
99. Press release dated February 9, 1995
99. Press release dated March 24, 1995
(b) Reports on Form 8-K
Reports on Form 8-K were filed on February 13, 1995
announcing the approval in principal to acquire First Toledo
Advisory Company, Manager of the Company, and March 24, 1995
reporting on the filing of a lawsuit to collect past due interest
and principal.
Pursuant to the requirement of the Securities and Exchange Act
of 1934, the Registrant had duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
HEALTH CARE REIT, INC.
Date: May 8, 1995 By: BRUCE G. THOMPSON
Bruce G. Thompson, Chairman and
Chief Executive Officer
Date: May 8, 1995 By: ROBERT J. PRUGER
Robert J. Pruger, Chief
Financial Officer
Date: May 8, 1995 By: KATHLEEN S. PREPHAN
Kathleen S. Prephan, Chief
Accounting Officer
EXHIBIT INDEX
The following documents are included in this Form 10-Q as Exhibits:
Designation
Number Under
Exhibit Item 601 of Page
Number Regulation S-K Exhibit Description Number
- ------- -------------- ------------------- ------
1 4 Note with Fifth
Third Bank 13
2 99 Press Release dated
January 18, 1995 20
3 99 Press Release dated
February 6, 1995 21
4 99 Press Release dated
February 9, 1995 22
5 99 Press Release dated
March 24, 1995 23
<TABLE> <S> <C>
<ARTICLE> CT
<CIK> 0000766704
<NAME> HEALTH CARE REIT, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<TOTAL-ASSETS> 331,098,644
<COMMON> 11,649,725
0
0
<OTHER-SE> 177,583,443
<TOTAL-LIABILITY-AND-EQUITY> 331,098,644
<TOTAL-REVENUES> 9,624,993
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,864,965
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,864,965
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
</TABLE>
REVOLVING COGNOVIT DEMAND NOTE
$20,000,000.00 Toledo, Ohio December 30, 1994
ON DEMAND, FOR VALUE RECEIVED, Health Care REIT, Inc., a
Delaware corporation (the "Borrower"), having an address of One
SeaGate, Toledo, Ohio, 43604, hereby promises to pay to the order
of The Fifth Third Bank of Northwestern Ohio, N.A., a national
banking association ("Lender"), having an address of 606 Madison
Avenue, Toledo, Ohio, 43604, the sum of Twenty Million Dollars
($20,000,000.00) or such lesser principal amount as may be advanced
by Lender and outstanding hereunder from time to time, plus
interest from this date until fully paid.
1. Interest. Borrower shall pay interest on the outstanding
principal balance of this Revolving Cognovit Demand Note (the
"Note") at the variable rate per annum equal to the rate of
interest announced by the Lender as its prime rate of interest.
The prime rate is not necessarily the lowest rate offered by the
Lender and the interest rate will change as and when Lender's prime
rate changes. Lender's decision as to the prime rate shall be
final and binding. Borrower shall pay interest on any amounts not
paid when due, and on any judgment on this Note, at the default
rate of interest (the "Default Rate") equal to six percent (6%) per
annum plus the rate of interest otherwise payable on this Note.
Interest shall be calculated based on the actual number of days
elapsed over a 360-day year (365/360 method).
2. Payments. Commencing December 31, 1994, and on the last
day of each consecutive month thereafter, Borrower shall make
monthly payments of interest until the earlier of (i) demand by
Lender, or (ii) May 31, 1995, at which time all outstanding
principal and accrued but unpaid interest shall be due and payable.
Each payment shall be made in U.S. Dollars, in immediately
available funds without set off or counterclaim.
3. Renewal. Provided that no event of default (as that term
is defined in Section 11 infra.) has occurred, in the event that
Lender determines that this Note will not be renewed at maturity,
Lender shall provide Borrower with not less than thirty (30) days'
prior written notice of non-renewal. Nothing in this Section 3
obligates Lender to renew or extend this Note or affects Lender's
right to demand full payment of this Note at any time.
4. Place of Payment. Borrower shall make all payments on
this Note at Lender's office at 606 Madison Avenue, Toledo, Ohio,
43604 or at such other place as the Lender may designate.
5. Purpose. Borrower shall use the proceeds of this Note
for working capital purposes in the ordinary course of business.
6. Prepayment. Borrower may prepay this note in whole or in
part without penalty, provided Borrower provides Lender with ten
(10) days' prior written notice thereof. No partial prepayment
will postpone the due date or affect the amount of the next
scheduled payment due hereunder.
7. Late Charge. Borrower acknowledges that default in any
payment due under this Note will result in loss and additional
expense to Lender in handling such delinquent payments and meeting
its other financial obligations, and to the extent such loss and
additional expense is extremely difficult and impractical to
ascertain, Borrower agrees that if any payment hereunder is not
paid within ten (10) days of the due date, Borrower shall pay to
Lender a late charge equal to five percent (5%) of the amount of
the overdue payment.
8. Application of Payments. Unless Lender elects otherwise,
all payments and other amounts received by Lender shall be credited
first to any charges, costs, expenses and fees due hereunder or
payable by Borrower in connection herewith; second, to interest on
the foregoing amounts at the Default Rate from the due date or date
of payment by Lender, as the case may be; third, to accrued by
unpaid interest on this Note; fourth, to the principal amount
outstanding; and the balance, if any, to Borrower.
9. Covenants, Etc. Run to Lender. All representations,
warranties undertakings and covenants, both financial and non-
financial, now or hereafter made, given, accepted or agreed upon by
Borrower to or in favor of any lender (including, without
limitation, those representations, warranties, undertakings and
covenants set forth in the Amended and Restated Credit Agreement
between Borrower and Seven Banks and National City Bank, As Agent,
dated September 8, 1994, together with any extensions, renewals,
amendments, restatements, modifications or refinancings thereof and
further including, without limitation, those representations,
warranties, undertakings and covenants set forth in the Note
Purchase Agreement dated as of April 8, 1993 between Borrower and
The Equitable Life Assurance Society of the United States,
Equitable Variable Life Insurance Company, Allstate Life Insurance
Company, The Life Insurance Company of Virginia, and Central Life
Assurance Company, together with any extensions, renewals,
amendments, restatements, modifications or refinancings thereof),
are hereby incorporated herein by reference. Borrower intends and
agrees that Lender shall enjoy the benefits of such
representations, warranties, undertakings and covenants as if made
directly in favor of Lender by Borrower herein. Notwith-standing
the foregoing, Borrower shall furnish Lender with only the
statements, reports and information listed below at the times or
intervals specified unless Lender requests from Borrower additional
information, statements, reports, certifications, data or material
in which event Borrower shall, from time to time, satisfy Lender's
requests for such additional information, statements,
certifications, data or material:
a. Within one hundred twenty (120) days after the close
of each fiscal year, audited financial statements for the year
ended prepared by independent outside accountants, satisfactory to
Lender.
b. Within one hundred twenty (120) days after the close
of each fiscal year, a copy of its 10-K report filed with the
Securities and Exchange Commission.
c. Within forty-five (45) days after the close of each
quarter, a copy of Borrower's financial statements certified by an
officer of the Borrower as of the close of that period.
d. Within forty-five (45) days after the close of each
quarter, a copy of Borrower's Delinquency Report and Unfunded
Commitment Report.
e. Within forty-five (45) days after the close of each
quarter, a statement, certified by an officer of the Borrower, to
the effect that the Borrower is in compliance with its covenants
with its lenders.
10. Furnish Copies. At all times during which (i) any
amount is outstanding under this Note, or (ii) credit is available
to Borrower under this Note, Borrower shall promptly furnish to
Lender true, correct and complete copies of any and all loan
agreements, credit agreements or other similar agreements as well
as all notes, and any other documents, as may be required by the
Lender from time to time, together with all amendments and
modifications to each of them (collectively, the "Loan Documents")
pursuant to or in connection with which Borrower obtains or can
obtain borrowed funds.
11. Default. The following shall constitute events of
default ("Event of Default") under this Note:
a) If Borrower or any subsidiary of Borrower shall fail
to pay when due any amount owed to Lender of every nature or type.
b) If Borrower or any subsidiary of Borrower shall fail
to perform any obligation (other than payment obligations) to or in
favor of Lender of every nature or type (i) which failure continues
of a period of ten (10) calendar days following notice by Lender,
or (ii) if, by reason of the nature of such failure, the same
cannot be remedied within said ten (10) days, Borrower fails to
proceed with diligence satisfactory to Bank after receipt of the
notice to cure the same or, in any event, fails to cure such
default within sixty (60) days after receipt of the notice.
c) If Borrower or any subsidiary of Borrower shall fail
to pay when due any material obligation to any third party and such
third party accelerates the obligation or institutes legal
proceedings with respect to such non-payment.
d) If any representation, warranty or statement or
material information now existing or hereafter made by Borrower in
writing to Lender or to any other lender shall be false or
erroneous in any material respect.
e) If Borrower or any subsidiary of Borrower shall fail
or omit to observe or perform any material covenant or agreement
now or hereafter undertaken by Borrower in any credit agreement,
note purchase agreement, loan agreement, note, mortgage,
assignment, security agreement or other document pursuant to or in
connection with which Borrower obtains or can obtain borrowed funds
from any lender, note purchaser or the like.
f) If an event of default under any Loan Document has
occurred.
g) If Borrower becomes insolvent or generally unable to
meet its debt as they become due or fails, suspends or goes out of
business.
h) If there is a material adverse change in Borrower's
business or financial condition.
i) If a trustee, receiver or custodian is appointed
over all or any part of Borrower's property.
j) If Borrower or any subsidiary of Borrower shall
commence or consent to any law relating to bankruptcy, insolvency,
reorganization or relief of debtors.
k) If there shall be a commenced against the Company or
any subsidiary any proceeding under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors which is not
dismissed within sixty (60) days of the commencement thereof.
12. Acceleration, Remedies. Upon the occurrence of any
Event of Default, in addition to any and all other remedies at law
or in equity, at the option of Lender the outstanding principal
balance of this Note and all accrued and unpaid interest thereon
and all other amounts payable by Borrower to Lender of every nature
and type shall be immediately due and payable, and all such amounts
shall bear interest at the Default Rate from the date of the Event
of Default until paid. Lender may exercise any and all remedies
without notice or demand of any kind which are hereby waived by
Borrower.
13. Demand Feature Unconditional. Notwithstanding the
Events of Default set forth in Section 11 above, Lender's right to
demand full payment of this Note by Borrower at any time is
unconditional and does not require the existence of an Event of
Default.
14. Representations. Borrower hereby represents and
warrants to Lender that (i) Borrower is a duly organized and
validly existing Delaware corporation in good standing; (ii)
Borrower has requisite corporate power and authority to execute and
deliver this Note and to incur the indebtedness reflected thereby;
(iii) the execution and deliver of this Note and the consummation
of the transactions contemplated hereby shall not result in a
breach by Borrower under any note, mortgage, loan agreement,
security agreement or other contract to which Borrower is a party
or signatory; and (iv) the officer of Borrower executing and
delivering this Note on Borrower's behalf has been duly authorized
to do so.
15. Certification of No Default. At all times during which
(i) any amount is outstanding under this Note, or (ii) credit is
available to Borrower under this Note, Borrower shall furnish to
Lender, within forty-five (45) days after each quarter end, a
certificate signed by its chief executive or chief financial
officer, to the effect that no default has occurred under any Loan
Document or, if a default has occurred, that a default has occurred
together with a description of such default.
16. Compensating Balance. At all times during which (i) any
amount is outstanding under this Note, or (ii) credit is available
to Borrower under this Note, Borrower shall maintain with Lender a
non-interest bearing deposit account with a minimum balance of
$200,000.00.
17. Time is of the Essence. Time is of the essence in the
payment of this Note.
18. Waivers. None of the following shall constitute a
course of dealing, estoppel, waiver or the like upon which Borrower
may rely: (a) Lender's acceptance of one or more late or partial
payments; (b) Lender's forbearance from exercising any right or
remedy under this Note; or (c) Lender's forbearance from exercising
any right or remedy under this Note on any one or more occasions.
Lender's exercise of any rights or remedies or a part of a right or
remedy on one or more occasions shall not preclude Lender from
exercising the right or remedy at any other time. Lender's rights
and remedies under this Note and the law and equity are cumulative
to, but independent of, each other.
19. Jury Trial Waiver. The Borrower hereby waives any right
to a trial by jury in any action to enforce or defend any matter
arising from or related to the Note, or any other document or
agreement evidencing or relating to the loan.
20. Notices. All notices, demands, requests and consents
(hereinafter "notices") given or made pursuant to this Note shall
be in writing, shall be addressed to the addresses set forth in the
introductory paragraph hereof or such other address as either party
may designate for itself by a notice complying with this Section,
and shall be served by: (a) personal delivery; (b) United States
mail, postage prepaid; or (c) nationally recognized overnight
courier service. All notices shall be deemed to be given upon the
earlier of actual receipt, three (3) days after mailing or one (1)
business day after deposit with the overnight courier. Any notices
meeting the requirements of this Section shall be effective,
regardless of whether or not actually received.
21. Representation and Warranty Regarding Business Purpose.
Borrower represents and warrants that the loan evidenced by this
Note is for business purposes and not for personal, family,
household, or agricultural purposes.
22. Security. This Note is unsecured.
23. Waiver of Demands. Borrower hereby waives presentment,
dishonor, notice of dishonor, protest, noting for protest, notice
of default all other notices, and all demands.
24. Attorneys' Fees and Expenses. After an Event of Default
has occurred or has been declared, Borrower shall pay to Lender all
reasonable costs and expenses incurred by Lender in enforcing or
preserving Lender's rights under this Note (regardless of whether
such Event of Default is subsequently cured) including but not
limited to, (a) attorneys' and paralegals' fees and disbursements;
(b) the fees and expenses of any litigation, administrative,
bankruptcy, insolvency, receivership and any other similar
proceeding; (c) court costs; (d) the expenses of Lender, its
employees, agents, attorneys and witnesses in preparing for
litigation, administrative, bankruptcy, insolvency and other
proceedings and for lodging, travel, and attendance at meetings,
hearings, depositions, and trials; and (e) consulting and witness
fees incurred by Lender in connection with any litigation or other
proceeding.
25. Governing Law. This Note shall be construed under the
laws of the State of Ohio.
26. Severability. If any clause, provision, section or
article of this Note is ruled invalid by any court of competent
jurisdiction, the invalidity of such clause, provision, section or
article shall not affect any of the remaining provisions hereof.
27. Assignment. Borrower shall neither assign its rights or
delegate its obligation under this Note.
28. Warrant of Attorney. With full knowledge of all
constitutional rights, Borrower hereby authorizes any attorney-at-
law to appear on Borrower's behalf in any court of record in the
State of Ohio after this Note becomes due and payable, whether by
demand, acceleration or otherwise; to waive the issuing and service
of process and all other constitutional rights to due process of
law; to confess a judgment against Borrower in favor of Lender for
the amount then appearing due together with the costs of suit; to
release all errors; and to waive all rights of appeal and stays of
execution. With full knowledge of all constitutional rights,
Borrower hereby voluntarily and knowingly waives all rights to
notice and hearing prior to judgment being so confessed against
Borrower.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE
AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE
TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A
COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR, WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON ITS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
HEALTH CARE REIT, INC.
By:_____________________________
Title:__________________________
F O R I M M E D I A T E R E L E A S E
PRESS RELEASE
January 18, 1995
For more information contact:
Erin Ibele (419) 247-2800
Robert Pruger (419) 247-2800
HEALTH CARE REIT, INC. INCREASES DIVIDEND
Toledo, Ohio, January 18, 1995....The Directors of Health
Care REIT, Inc. (NYSE/HCN) voted to pay a quarterly cash dividend
of $.515 per share, an increase of $.005 per share from the
previous dividend. The dividend will be payable February 20, 1995
to shareholders of record on February 3, 1995. This will be the
REIT's 95th consecutive dividend distribution.
F O R I M M E D I A T E R E L E A S E
PRESS RELEASE
February 6, 1995
For more information contact:
Erin Ibele (419) 247-2800
Robert Pruger (419) 247-2800
Toledo, Ohio, February 6, 1995 (NYSE/HCN)....Health Care REIT, Inc.
(the "Company") announced today that its Board of Directors, acting
on a recommendation of a special committee thereof, had approved in
principle the acquisition of First Toledo Advisory Company
("FTAC"). FTAC currently serves as the manager of the Company and
is owned by Bruce G. Thompson, Chairman and Chief Executive
Officer, and Frederic D. Wolfe, President.
The agreement in principle contemplates that the Company would
issue 215,154 shares of common stock as consideration for the
acquisition of FTAC, subject to adjustment under certain
circumstances. In connection with the closing of the acquisition,
each of Messrs. Thompson and Wolfe would enter into five-year
service agreements and would purchase 168,382 shares of Company
common stock at a price of $21.38 per share with funds loaned by
the Company. The service agreement with Mr. Thompson would provide
for two years continued service as Chief Executive Officer of the
Company and for consulting services thereafter, and the service
agreement with Mr. Wolfe would provide for five years of consulting
services. Under the stock purchase and loan arrangements, 20% of
each loan could be forgiven each year if continued service and
stock price performance tests are met. Any remaining balance of
the loan would be repaid at the end of the five-year period. The
stock price performance test would require a cumulative $5 increase
in the Company stock price from the current level during the five-
year period.
The transactions described above are subject to definitive
agreements, stockholder approval and other customary conditions.
It is anticipated that the closing would occur in the second
quarter of 1995 shortly after the Company's annual stockholders'
meeting if stockholders approve the transaction.
Health Care REIT, Inc. is the first real estate investment trust to
specialize in financing health care facilities, primarily nursing
homes. The Company also invests in assisted living and retirement
facilities, rehabilitation centers, primary care facilities, and
behavioral care facilities.
F O R I M M E D I A T E R E L E A S E
PRESS RELEASE
February 9, 1995
For more information contact:
Erin Ibele (419) 247-2800
Robert Pruger (419) 247-2800
HEALTH CARE REIT, INC. ANNOUNCES 1994 RESULTS
Toledo, Ohio, February 9, 1995 (NYSE/HCN)....For the quarter ended
December 31, 1994, net income was $5.8 million compared to $5.1
million in the fourth quarter of 1993, an increase of 15.6%. For
the fourth quarter of 1994, net income per share of $.51 was up
$.06 or 13.3% above the fourth quarter of 1993. For the year ended
December 31, 1994, net income per share was $2.17 compared to $2.15
for the year ended December 31, 1993, an increase of .9%.
Total assets of $324.1 million at December 31, 1994 were up 13.7%
from a year ago, while shareholders' equity increased 2.7% to
$189.2 million.
Funds from operations for the three months ended December 31, 1994
was $7.3 million ($.63 per share) compared with $6.1 million ($.54
per share) for the three months ended December 31, 1993. For the
year 1994, funds from operations was $31.7 million ($2.75 per
share) compared to $22.8 million ($2.44 per share) for 1993.
The fourth quarters of 1994 and 1993, as well as annual results,
were affected by gains on exercises and/or prepayment fees.
Excluding these items, funds from operations would have been $.50
and $.53 for the fourth quarters of 1994 and 1993, respectively,
and would have been $2.15 and $2.07 for the years 1994 and 1993,
respectively.
The following tables highlight the information presented above.
SUMMARY FINANCIAL DATA
(In thousands except per share amounts)
<TABLE>
Three Months Ended
December 31 Year Ended
(Unaudited) December 31
------------------- ------------------
1994 1993 1994 1993
------- ------- ------- -------
<C> <C> <C> <C>
<S>
GROSS INCOME
Gross Income:
Interest and other income $ 7,073 $ 5,285 $26,225 $21,734
Direct financing leases 659 1,865 4,353 8,094
Operating-lease rents 1,543 994 5,480 2,812
Loan and commitment fees 229 262 1,184 1,203
Gain on exercise of options 1,538 314 5,490 2,175
------- ------- ------- -------
$11,042 $ 8,720 $42,732 $36,018
======= ======= ======= =======
Three Months Ended
December 31 Year Ended
(Unaudited) December 31
------------------- ------------------
1994 1993 1994 1993
------- ------- ------- -------
OTHER FINANCIAL INFORMATION
Gross Income $11,042 $ 8,720 $42,732 $36,018
Net income 5,843 5,052 24,953 20,055
Funds from operations 7,301 6,072 31,697 22,780
Net income per share .51 .45 2.17 2.15
Funds from operations per share .63 .54 2.75 2.44
Distributions per share .51 .49 2.01 1.93
Average number of shares
outstanding 11,573 10,901 11,519 9,339
</TABLE>
<TABLE>
December 31
-------------------
1994 1993
-------- --------
<C> <C>
<S>
Assets:
Real Estate Related Investments:
Loans receivable $254,924 $185,282
Investment in operating-lease properties 57,231 42,776
Investment in direct financing leases 11,428 52,950
-------- --------
323,583 281,008
Less allowance for losses 5,150 4,150
-------- --------
318,433 276,858
Other assets 5,669 8,166
-------- --------
Total assets $324,102 $285,024
======== ========
Total liabilities $134,922 $100,892
Shareholders' Equity 189,180 184,132
-------- --------
$324,102 $285,024
======== ========
</TABLE>
Health Care REIT, Inc. is the first real estate investment trust to
specialize in financing health care facilities, primarily nursing
homes. The Company also invests in assisted living and retirement
facilities, rehabilitation centers, primary care facilities, and
behavioral care facilities.
F O R I M M E D I A T E R E L E A S E
PRESS RELEASE
March 24, 1995
For more information contact:
Erin Ibele (419) 247-2800
Robert Pruger (419) 247-2800
Toledo, Ohio, March 24, 1995 (NYSE/HCN)....Health Care REIT, Inc.
(the "Company") disclosed today the filings on March 14, 1995 and
March 15, 1995 of two lawsuits in Florida to collect past due
interest and principal on a $13,700,000 mortgage loan secured by
two behavioral care facilities, totaling 294 beds. On March 21,
1995, the Company filed a complaint in Pinellas County, Florida for
money damages on a personal guaranty. The Company has additional
security in the form of guarantees in an amount of approximately
$1,500,000 and a $1,000,000 subordinated mortgage on one additional
behavioral care facility.
On March 13, 1995, the Company presented for payment a $1,125,000
Letter of Credit, and on March 14, 1995, the proceeds were paid to
the Company. Subsequently, the Borrower and certain of its
subsidiaries filed for protection under Chapter 11 of the
Bankruptcy Code. The Company is vigorously pursuing all of its
remedies.
Health Care REIT, Inc. is the first real estate investment trust to
specialize in financing health care facilities, primarily nursing
homes. The Company also invests in assisted living and retirement
facilities, rehabilitation centers, primary care facilities, and
behavioral care facilities.
