<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, 1996
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 incorporation (I.R.S. Employer
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 April
30, 1996 -- 38,729,932.
================================================================================
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
FORM 10-Q
MARCH 31, 1996
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................. 7
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................... 8
</TABLE>
1
<PAGE>
PART I
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Investments in real estate
Real estate properties:
Land.......................................................... $ 64,530 $ 61,748
Buildings..................................................... 543,783 530,979
--------- ---------
608,313 592,727
Less accumulated depreciation................................. (77,725) (73,722)
--------- ---------
530,588 519,005
Mortgage loans receivable........................................ 133,347 133,226
--------- ---------
663,935 652,231
Cash and cash equivalents.......................................... 17,828 7,937
Receivables........................................................ 2,789 3,478
Other assets....................................................... 5,331 6,465
--------- ---------
$ 689,883 $ 670,111
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings.................................................... $ 85,000 $ 93,900
Senior notes due 2000-2015......................................... 130,000 100,000
Notes and bonds payable............................................ 22,092 23,364
Convertible debentures............................................. 65,000 65,000
Accounts payable and accrued liabilities........................... 17,688 16,025
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: 1996 - 38,729,932, 1995 - 38,720,532... 3,873 3,872
Capital in excess of par value................................... 401,469 401,438
Cumulative net income............................................ 257,714 245,135
Cumulative dividends............................................. (292,953) (278,623)
--------- ---------
Total stockholders' equity.................................. 370,103 371,822
--------- ---------
$ 689,883 $ 670,111
========= =========
</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
MARCH 31,
-------------------
1996 1995
------- ---------
<S> <C> <C>
Revenues:
Minimum rent............................................ $16,167 $12,806
Interest and other income............................... 3,956 3,230
Additional rent and additional interest................. 2,808 2,816
------- -------
22,931 18,852
Expenses:
Depreciation and non-cash charges....................... 4,112 3,287
Interest and amortization of deferred financing costs... 5,431 3,324
General and administrative.............................. 809 784
------- -------
10,352 7,395
------- -------
Net income................................................ $12,579 $11,457
======= =======
Net income per share...................................... $ 0.32 $ .31
======= =======
Dividends paid per share.................................. $ .37 $ .34
======= =======
Weighted average shares outstanding....................... 38,727 36,528
======= =======
</TABLE>
See accompanying notes.
3
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1996 1995
--------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income.......................................... $ 12,579 $ 11,457
Depreciation and non-cash charges................... 4,112 3,287
-------- --------
Funds from operations............................ 16,691 14,744
Amortization of deferred financing costs............ 270 151
Net decrease in other assets and liabilities........ 3,013 2,893
-------- --------
Net cash provided by operating activities........ 19,974 17,788
Cash flow from investing activities:
Acquisition of real estate properties............... (15,586) (11,670)
Investment in mortgage loans receivable............. (3,000) -
Principal payments on mortgage loans receivable..... 3,252 450
-------- --------
Net cash used in investing activities............ (15,334) (11,220)
Cash flow from financing activities:
Bank borrowings, net................................ (8,900) (36,200)
Issuance of senior debt............................. 30,000 46,000
Dividends paid...................................... (14,330) (12,561)
Principal payments on notes and bonds............... (1,272) (157)
Other, net.......................................... (247) (307)
-------- --------
Net cash provided by financing activities........ 5,251 (3,225)
-------- --------
Increase in cash and cash equivalents................. 9,891 3,343
Cash and cash equivalents, beginning of period........ 7,937 3,742
-------- --------
Cash and cash equivalents, end of period.............. $ 17,828 $ 7,085
======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(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, 1996 and 1995 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 1995 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, 1996 and 1995 are not
necessarily indicative of the results for a full year.
(ii) On January 19, 1996, the Board of Directors of Nationwide Health
Properties, Inc. authorized a two-for-one stock split of the Company's common
stock effective March 8, 1996. The financial statements included herein have
been restated to reflect the stock split. Additionally, certain amounts in the
1995 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, 1996, had investments in 211 facilities, including 172 long-term health care
facilities, 37 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 19 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. Forty-five of the facilities were
leased to and operated by subsidiaries of Beverly Enterprises, Inc.
(v) During the three-month period ended March 31, 1996, the Company acquired
two assisted living facilities in two separate transactions for an aggregate
purchase price of approximately $13,900,000. The acquisitions were funded by
bank borrowings on the Company's bank line of credit and cash on hand. The
facilities were concurrently leased under terms generally similar to the
Company's existing leases.
During the first three months of 1996, the Company issued $30,000,000 in
medium-term notes. The notes bear fixed interest at a weighted average of 6.87%
and have a weighted average maturity of 5.33 years. The proceeds were used to
reduce borrowings on the Company's bank line of credit.
5
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1996
OPERATING RESULTS
Three Months 1996 Compared to Three Months 1995
Revenues for the three-months ended March 31, 1996 increased $4,079,000 or
22% over the same period in 1995. The increase is due to increased minimum rent
and interest income resulting from investments in additional facilities during
the last twelve months.
Total expenses for the three-month period increased $2,957,000 or 40% over
the same period in 1995. The increase is primarily due to increased interest
expense as a result of greater borrowings on the Company's bank line of credit
and the issuance of medium term notes during 1995 and 1996. The increase in
total expenses was also attributable to increased depreciation due to the
acquisition of additional facilities in the last twelve months.
The Company expects increased rental revenues due to the addition of
facilities to its property base in the last twelve months 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 three-month period ended March 31, 1996, the Company acquired
two assisted living facilities in two separate transactions for an aggregate
purchase price of approximately $13,900,000. The acquisitions were funded by
bank borrowings on the Company's bank line of credit and cash on hand. The
facilities were concurrently leased under terms generally similar to the
Company's existing leases.
During the first three months of 1996, the Company issued $30,000,000 in
medium-term notes. The notes bear fixed interest at a weighted average of 6.87%
and have a weighted average maturity of 5.33 years. The proceeds were used to
reduce borrowings on the Company's bank line of credit.
At March 31, 1996, the Company had $15,000,000 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 $170,000,000 in aggregate principal amount of medium term notes
and (b) up to $97,500,000 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
<PAGE>
STATEMENT REGARDING FORWARD LOOKING DISCLOSURE
Certain information contained in this report includes forward looking
statements, which can be identified by the use of forward looking terminology
such as "may", "will", "expect", "should" or comparable terms or the negative
thereof. These statements involve risks and uncertainties that could cause
actual results to differ materially from those described in the statements.
These risks and uncertainties include (without limitation) the following; the
effect of economic and market conditions and changes in interest rates,
government regulations, changes in the health industry, the amount of any
additional investments, access to capital markets and changes in the ratings of
the Company's debt securities.
7
<PAGE>
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
During the three-month period ended March 31, 1996, the Company filed
a report on Form 8-K dated January 30, 1996 to file the Distribution
Agreement, dated January 30, 1996, among the Company, Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner and Smith Incorporation, and
Goldman Sachs & Co.
8
<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: May 6, 1996
NATIONWIDE HEALTH PROPERTIES, INC.
By /s/ MARK L. DESMOND
---------------------------------------------
Mark L. Desmond
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 17,828
<SECURITIES> 0
<RECEIVABLES> 2,789
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,331
<PP&E> 608,313
<DEPRECIATION> 77,725
<TOTAL-ASSETS> 689,883
<CURRENT-LIABILITIES> 17,688
<BONDS> 302,092
0
0
<COMMON> 3,873
<OTHER-SE> 366,230
<TOTAL-LIABILITY-AND-EQUITY> 689,883
<SALES> 0
<TOTAL-REVENUES> 22,931
<CGS> 0
<TOTAL-COSTS> 10,352
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,431
<INCOME-PRETAX> 12,579
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,579
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,579
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
</TABLE>
