<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 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 __________________
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 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
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Shares of registrant's common stock, $.10 par value, outstanding at April 30,
1995--18,271,379.
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NATIONWIDE HEALTH PROPERTIES, INC.
FORM 10-Q
MARCH 31, 1995
TABLE OF CONTENTS
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Page
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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.............................. 6
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................. 7
</TABLE>
1
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PART I
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
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(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
Investments in real estate
Real estate properties:
Land......................................................... $ 40,506 $ 39,981
Buildings.................................................... 429,282 418,137
--------- ---------
469,788 458,118
Less accumulated depreciation................................ (65,252) (62,080)
--------- ---------
404,536 396,038
Mortgage loans receivable, net.................................. 105,839 105,824
--------- ---------
510,375 501,862
Cash and cash equivalents......................................... 7,085 3,742
Receivables....................................................... 1,352 2,936
Other assets...................................................... 5,868 5,269
--------- ---------
$ 524,680 $ 513,809
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings................................................... $ 44,000 $ 80,200
Senior notes due 2000-2015........................................ 46,000 -
Notes and bonds payable........................................... 20,363 20,520
Convertible debentures............................................ 65,000 65,000
Senior subordinated convertible debentures........................ 2,277 2,690
Accounts payable and accrued liabilities.......................... 11,533 9,293
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: 1995 - 18,271,379, 1994 - 18,238,193.. 1,827 1,824
Capital in excess of par value.................................. 365,461 364,959
Cumulative net income........................................... 206,221 194,764
Cumulative dividends............................................ (238,002) (225,441)
--------- ---------
Total stockholders' equity................................. 335,507 336,106
--------- ---------
$ 524,680 $ 513,809
========= =========
</TABLE>
See accompanying notes.
2
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NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
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<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1995 1994
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Revenues:
Minimum rent............................................ $12,806 $11,156
Additional rent and additional interest................. 2,816 2,287
Interest and other income............................... 3,230 3,057
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18,852 16,500
Expenses:
Depreciation and non-cash charges....................... 3,287 2,853
Interest and amortization of deferred financing costs... 3,324 1,920
General and administrative.............................. 784 783
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7,395 5,556
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Net income............................................... $11,457 $10,944
======= =======
Net income per share..................................... $ 0.63 $ 0.60
======= =======
Dividends paid per share................................. $0.6875 $0.6375
======= =======
Weighted average shares outstanding...................... 18,264 18,099
======= =======
</TABLE>
See accompanying notes.
3
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NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------
1995 1994
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<S> <C> <C>
Cash flow from operating activities:
Net income............................................. $ 11,457 $ 10,944
Depreciation and non-cash charges...................... 3,287 2,853
-------- --------
Funds from operations................................ 14,744 13,797
Amortization of deferred financing costs............... 151 144
Net decrease in other assets and liabilities........... 2,893 1,032
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Net cash provided by operating activities............ 17,788 14,973
Cash flow from investing activities:
Acquisition of real estate properties.................. (11,670) (8,756)
Investment in mortgage loans receivable................ - (20,656)
Principal payments on mortgage loans receivable........ 450 3,509
-------- --------
Net cash used in investing activities................ (11,220) (25,903)
Cash flow from financing activities:
Bank borrowings, net................................... (36,200) 22,100
Issuance of senior debt................................ 46,000 -
Dividends paid......................................... (12,561) (11,562)
Other, net............................................. (464) (288)
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Net cash provided by (used in) financing activities.. (3,225) 10,250
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Increase (decrease) in cash and cash equivalents........ 3,343 (680)
Cash and cash equivalents, beginning of period.......... 3,742 3,627
-------- --------
Cash and cash equivalents, end of period................ $ 7,085 $ 2,947
======== ========
</TABLE>
See accompanying notes.
4
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NATIONWIDE HEALTH PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(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, 1995 and 1994
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
1994 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, 1995 and 1994 are not necessarily indicative of the results for a full year.
(ii) Certain amounts in the 1994 financial statements have been reclassified
for consistent financial statement presentation.
(iii) The Company qualifies as a real estate investment trust under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended. The Company
intends to continue to qualify as such and therefore to distribute at least 95
percent of its taxable income to its stockholders. Accordingly, no provision
has been made for federal income taxes.
(iv) The Company invests in health care related real estate and, as of March
31, 1995, has investments in 182 facilities, including 174 long-term health care
facilities, 6 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 of the
facilities were leased to and operated by subsidiaries of Beverly Enterprises,
Inc.
(v) In February 1995, the Company acquired two assisted living facilities
in two separate transactions for an aggregate purchase price of $11,400,000. The
facilities were concurrently leased under terms generally similar to the
Company's existing leases. In February and March 1995, the Company issued
$46,000,000 in medium-term notes. The notes bear fixed interest at a weighted
average rate of 8.62% and matures at a weighted average of 8.6 years.
5
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NATIONWIDE HEALTH PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1995
OPERATING RESULTS
First Quarter 1995 Compared to First Quarter 1994
Revenues for the three-months ended March 31, 1995 increased $2,352,000 or 14%
over the same period in 1994. 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 and
additional interest earned under the Company's existing leases and mortgages
receivable.
Total expenses for the three-month period increased $1,839,000 or 33% over the
same period in 1994. The increase is primarily due to increased interest
expense as a result of increased levels of bank borrowings and higher short-term
interest rates in the first quarter of 1995 and due to the issuance of
$46,000,000 of medium-term notes in February and March 1995. The increase was
also attributable to increased depreciation due to the acquisition of facilities
in 1994 and 1995.
The Company expects increased rental revenues due to the addition of
facilities to its property base during 1994 and 1995 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
In February 1995, the Company acquired two assisted living facilities in two
separate transactions for an aggregate purchase price of $11,400,000. The
acquisitions were funded by bank borrowings on the Company's bank line of credit
and cash on hand.
During the first quarter, the Company issued $46,000,000 in medium-term notes.
The notes bear fixed interest at a weighted average interest rate of 8.62% and
have a weighted average maturity of 8.6 years. The proceeds were used to repay
borrowings on the Company's bank line of credit. At March 31, 1995, the Company
had $56,000,000 available under its $100,000,000 bank line of credit. The
Company has effective shelf registrations on file with the Securities and
Exchange Commission under which the Company may issue (a) up to $54,000,000 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.
6
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K, dated February 15, 1995, for the
purpose of filing (i) the Amended and Restated Distribution Agreement,
dated February 15, 1995, among Nationwide Health Properties, Inc.,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
and Goldman, Sachs & Co., and (ii) a statement regarding computation of
ratios of earnings to fixed charges.
7
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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 , 1995
NATIONWIDE HEALTH PROPERTIES, INC.
By /s/ Mark L. Desmond
---------------------------
Mark L. Desmond
Vice President and Treasurer
(Principal Financial Officer)
8
<TABLE> <S> <C>
<PAGE>
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 7,085
<SECURITIES> 0
<RECEIVABLES> 1,352
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 469,788
<DEPRECIATION> 65,252
<TOTAL-ASSETS> 524,680
<CURRENT-LIABILITIES> 0
<BONDS> 177,640
<COMMON> 1,827
0
0
<OTHER-SE> 333,680
<TOTAL-LIABILITY-AND-EQUITY> 524,680
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<TOTAL-REVENUES> 18,852
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<OTHER-EXPENSES> 3,287
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<INTEREST-EXPENSE> 3,324
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<NET-INCOME> 14,744
<EPS-PRIMARY> .63
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