<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
-------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________to _____________________
Commission file number 1-9028
NATIONWIDE HEALTH PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 95-3997619
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
4675 MACARTHUR COURT, SUITE 1170
NEWPORT BEACH, CALIFORNIA 92660
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(714) 251-1211
(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 July 31,
1994--18,200,530.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
FORM 10-Q
JUNE 30, 1994
TABLE OF CONTENTS
PART I--FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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...................................... 6
PART II--OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders............ 7
Item 6. Exhibits and Reports on Form 8-K............................... 7
</TABLE>
1
<PAGE>
PART I
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1994 1993
----------- ------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Investments in real estate
Real estate properties:
Land........................................... $ 37,343 $ 33,441
Buildings and improvements..................... 400,419 361,909
-------- --------
437,762 395,350
Less accumulated depreciation.................. (55,876) (50,180)
-------- --------
381,886 345,170
Mortgage loans receivable, net................... 96,180 83,303
-------- --------
478,066 428,473
Cash and cash equivalents.......................... 3,260 3,627
Receivables........................................ 3,002 2,854
Other assets....................................... 5,024 5,211
-------- --------
$489,352 $440,165
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings.................................... $ 51,800 $ 3,800
Convertible debentures............................. 65,000 65,000
Senior subordinated convertible debentures......... 4,045 8,609
Notes and bonds payable............................ 21,333 23,047
Accounts payable and accrued liabilities........... 10,930 6,782
Stockholders' equity:
Preferred stock $1.00 par value; 5,000,000 shares
authorized; none issued or outstanding
Common stock $.10 par value; 100,000,000 shares
authorized; issued and outstanding: 1994--
18,172,690, 1993--17,979,516.................... 1,817 1,797
Capital in excess of par value................... 363,389 358,869
Cumulative net income............................ 172,103 149,951
Cumulative dividends............................. (201,065) (177,690)
-------- --------
Total stockholders' equity..................... 336,244 332,927
-------- --------
$489,352 $440,165
======== ========
</TABLE>
See accompanying notes.
2
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------- -----------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Minimum rent........................... $ 11,706 $ 10,019 $ 22,862 $ 19,852
Additional rent........................ 2,453 2,073 4,740 3,956
Interest and other income.............. 3,221 2,636 6,278 5,345
-------- -------- -------- --------
17,380 14,728 33,880 29,153
Expenses:
Depreciation and amortization.......... 2,926 2,427 5,713 4,787
Interest............................... 2,427 1,418 4,347 3,048
General and administrative............. 819 818 1,668 1,619
-------- -------- -------- --------
6,172 4,663 11,728 9,454
-------- -------- -------- --------
Net income............................... $ 11,208 $ 10,065 $ 22,152 $ 19,699
======== ======== ======== ========
Net income per share..................... $ .62 $ .58 $ 1.22 $ 1.14
======== ======== ======== ========
Dividends paid per share................. $ .65 $ .60 $ 1.2875 $ 1.1875
======== ======== ======== ========
Weighted average shares outstanding...... 18,172 17,479 18,136 17,270
======== ======== ======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
---------------------------
1994 1993
------- -------
<S> <C> <C>
Cash flow from operating activities:
Net income.......................................... $22,152 $19,699
Depreciation, amortization and non-cash charges..... 6,166 4,994
------- -------
Funds from operations............................. 28,318 24,693
Net (increase) decrease in other assets and
liabilities........................................ 2,611 (180)
------- -------
Net cash provided by operating activities......... 30,929 24,513
Cash flow from investing activities:
Acquisition of real estate properties............... (42,412) (17,832)
Secured acquisition financing....................... -- 1,060
Investment in mortgage loans receivable............. (20,656) (17,838)
Principal payments on mortgage loans
receivable......................................... 9,004 17,108
------- -------
Net cash used in investing activities............. (54,064) (17,502)
Cash flow from financing activities:
Bank borrowings, net................................ 48,000 9,150
Dividends paid...................................... (23,374) (20,681)
Principal payments on notes and bonds............... (1,714) (493)
Other, net.......................................... (144) (479)
------- -------
Net cash provided by (used in) financing
activities....................................... 22,768 (12,503)
------- -------
Decrease in cash and cash equivalents................. (367) (5,492)
Cash and cash equivalents, beginning of period........ 3,627 8,281
------- -------
Cash and cash equivalents, end of period.............. $ 3,260 $ 2,789
======= =======
</TABLE>
See accompanying notes.
4
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1994
(UNAUDITED)
(i) The condensed consolidated financial statements included herein have
been prepared by the Company, without audit, and include all adjustments which
are, in the opinion of management, necessary for a fair presentation of the
results of operations for the three-month and six-month periods ended June 30,
1994 and 1993 pursuant to the rules and regulations of the Securities and
Exchange Commission. 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 1993 Annual Report on Form 10-K filed with the
Securities and Exchange Commission. The results of operations for the three-
month and six-month periods ended June 30, 1994 and 1993 are not necessarily
indicative of the results for a full year.
(ii) The Company qualifies as a real estate investment trust under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended. The Company
intends to continue to qualify as such and therefore to distribute at least 95
percent of its taxable income to its stockholders. Accordingly, no provision
has been made for federal income taxes.
(iii) The Company invests in health care related real estate and, as of June
30, 1994, has investments in 169 facilities, including 163 long-term health
care facilities, 4 assisted living facilities and 2 rehabilitation hospitals.
The Company's facilities which are owned and leased under "net" leases are
accounted for as operating leases. The leases have initial terms ranging from
10 to 14 years, and most of the leases have eight five-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. The base amounts, in
most cases, are net patient revenues for the first year of the lease. Under
the terms of the leases, the lessee is responsible for all maintenance,
repairs, taxes and insurance on the leased properties. Fifty-six of the
facilities were leased to and operated by subsidiaries of Beverly Enterprises,
Inc.
(iv) During the six-month period ended June 30, 1994, the Company acquired
seven long-term health care facilities and three assisted living facilities in
seven separate transactions for an aggregate purchase price of approximately
$39,943,000. The facilities were concurrently leased under terms generally
similar to the Company's existing leases.
In addition to the acquisitions, the Company provided capital improvement
funding in the aggregate amount of approximately $2,456,000 in accordance with
certain existing lease provisions. Such capital improvements will result in an
increase in the minimum rents earned by the Company.
During the six-month period ended June 30, 1994, the Company provided two
mortgage loans secured by three long-term health care facilities and one
assisted living facility in the aggregate amount of $19,450,000. Proceeds of
approximately $5,960,000 were received in connection with the repayment of
three mortgage loans secured by 9 long-term health care facilities.
5
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1994
OPERATING RESULTS
Six Months 1994 Compared to Six Months 1993
Revenues for the six-months ended June 30, 1994 increased $4,727,000 or 16%
over the same period in 1993. The increase is primarily due to increased
minimum rent and interest income resulting from investments in additional
facilities during the last twelve months and increased additional rent earned
under the Company's existing leases.
Total expenses for the six-month period increased $2,274,000 or 24% over the
same period in 1993. The increase is due to an increase in depreciation due to
the acquisition of facilities in 1993 and 1994, and to increased interest
expense in connection with the issuance of $65,000,000 of convertible
debentures in November 1993 and increased bank borrowings in 1994. This
increase was partially offset by a decrease in interest expense in connection
with the conversion of a portion of the Company's senior subordinated
convertible debentures during the last twelve months.
Second Quarter 1994 Compared to Second Quarter 1993
Revenues for the three months ended June 30, 1994 increased $2,652,000 or 18%
over the same period in 1993. The increase is primarily due to increased
minimum rent and interest income resulting from investments in additional
facilities during the last twelve months and increased additional rent earned
under the Company's existing leases.
Total expenses for the three-months ended June 30, 1994 increased $1,509,000
or 32% over the same period in 1993. The increase is due to an increase in
depreciation due to the acquisition of facilities in 1993 and 1994, and to
increased interest expense in connection with the issuance of $65,000,000 of
convertible debentures in November 1993 and increased bank borrowings in 1994.
This increase was partially offset by a decrease in interest expense in
connection with the conversion of a portion of the Company's senior
subordinated convertible debentures during the last twelve months.
The Company expects increased rental revenues due to the addition of
facilities to its property base during 1993 and 1994 and due to increased
additional rents under its leases. The Company also expects increased interest
income resulting from additional investments in mortgage loans over the last
twelve months. Additional investments in health care facilities would also
increase rental and/or interest income. As additional investments in facilities
are made, depreciation and/or interest expense could also increase. Any such
increases, however, are expected to be more than offset by rents or interest
income associated with the investments.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1994, the Company acquired seven long-
term health care facilities and three assisted living facilities in seven
separate transactions for an aggregate purchase price of approximately
$39,943,000. Additionally, the Company provided two mortgage loans secured by
three long-term health care facilities and one assisted living facility in an
aggregate amount of $19,450,000. Such acquisitions and mortgages were funded by
bank borrowings.
6
<PAGE>
On April 28, 1994, the Company amended the terms of its bank line of credit
to increase the amount of the line of credit from $70,000,000 to $100,000,000
and to extend its maturity to March 31, 1997. At June 30, 1994, the Company had
$48,200,000 available under such bank line of credit. Additionally, the Company
has effective shelf registrations on file with the Securities and Exchange
Commission under which the Company may issue (a) up to $100,000,000 in
aggregate principal amount of medium term notes and (b) up to $135,000,000 of
securities including debt, convertible debt, common and preferred stock.
The Company anticipates making additional investments in health care related
facilities. Financing for such future investments may be provided by borrowings
under the Company's bank line, private placements or public offerings of debt
or equity, and the assumption of secured indebtedness. The Company believes it
has sufficient liquidity and financing capability to finance future investments
as well as repay borrowings at or prior to their maturity.
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Stockholders was held on April 22, 1994 ("Annual
Meeting"). At the Annual Meeting, Sam A. Brooks, Jr. and Robert H. Finch were
re-elected as directors to serve for a three-year term until the 1997 Annual
Meeting of Stockholders. The other directors whose term of office continued
after the meeting are Milton J. Brock, Jr., David R. Banks, R. Bruce Andrews
and Charles D. Miller.
At the Annual Meeting, the proposal to amend the Company's Amended and
Restated Articles of Incorporation to increase the total number of authorized
shares of the Company's Common Stock, par value $.10 per share, from 25,000,000
to 100,000,000 was approved, and the selection of Arthur Andersen & Co. as
independent accountants for the year ending December 31, 1994 was ratified.
Voting at the Annual Meeting was as follows:
<TABLE>
<CAPTION>
VOTES ABSTENTIONS
VOTES CAST AND BROKER
MATTER CAST FOR AGAINST NON-VOTES
------ ---------- --------- -----------
<S> <C> <C> <C>
Election of Sam A. Brooks 15,978,536 131,189 --
Election of Robert H. Finch 15,976,361 133,364 --
Amendment of the Company's Amended and
Restated Articles of Incorporation 12,123,682 3,864,275 121,768
Ratification of selection of Arthur Andersen
& Co 15,802,413 233,006 74,306
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the three-
month period ended June 30, 1994.
7
<PAGE>
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: August 11, 1994
NATIONWIDE HEALTH PROPERTIES, INC.
By MARK L. DESMOND
---------------------------------------
Mark L. Desmond
Vice President and Treasurer
(Principal Financial Officer)
8
