<PAGE> 1
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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 SEPTEMBER 30, 1994
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 1-9550
BEVERLY ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4100309
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1200 SOUTH WALDRON ROAD, NO. 155
FORT SMITH, ARKANSAS 72903
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (501) 452-6712
INDICATE BY CHECK MARK WHETHER 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 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,
EXCLUSIVE OF TREASURY SHARES, AT OCTOBER 31, 1994 -- 85,590,161
- --------------------------------------------------------------------------------
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<PAGE> 2
BEVERLY ENTERPRISES, INC.
FORM 10-Q
SEPTEMBER 30, 1994
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . . 9
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
1
<PAGE> 3
PART I
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1994 AND DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
(UNAUDITED) (RESTATED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 69,344 $ 77,058
Accounts receivable-patient, less allowance for doubtful accounts:
1994--$26,071; 1993--$19,999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361,384 341,151
Accounts receivable-nonpatient, less allowance for doubtful accounts:
1994--$201; 1993--$343 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,817 6,366
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,091 4,617
Operating supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,065 63,009
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,576 27,050
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,874 34,997
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608,151 554,248
Property and equipment, net of accumulated depreciation and amortization:
1994--$576,257; 1993--$545,604 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,169,140 1,154,478
Other assets:
Notes receivable, less allowance for doubtful notes: 1994--$9,387; 1993--$10,440 . . . . 41,209 41,689
Designated and restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,637 44,948
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,529 72,209
Operating and leasehold rights and licenses, net . . . . . . . . . . . . . . . . . . . . 23,310 25,819
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,118 107,413
----------- -----------
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287,803 292,078
----------- -----------
$ 2,065,094 $ 2,000,804
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 124,029 $ 120,076
Accrued wages and related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 128,209 127,251
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,859 9,519
Accrued restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 34,310
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,092 64,923
Current portion of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . 37,336 43,125
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,865 625
----------- -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379,390 399,829
Long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 724,181 706,917
Deferred income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,130 72,765
Other liabilities and deferred items . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,806 78,431
Commitments and contingencies
Stockholders' equity:
Preferred stock:
Series B, shares issued and outstanding: 3,000,000 . . . . . . . . . . . . . . . . . 150,000 150,000
Series A, shares issued and outstanding: 999,999 . . . . . . . . . . . . . . . . . . -- 100,000
Funds designated for the redemption of Series A preferred stock . . . . . . . . . . . -- (100,000)
Common stock, shares issued: 1994--89,536,668; 1993--88,245,400 . . . . . . . . . . . . 8,954 8,825
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607,909 590,909
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,859 33,263
Treasury stock, at cost: 3,977,800 shares . . . . . . . . . . . . . . . . . . . . . . . (40,135) (40,135)
----------- -----------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810,587 742,862
----------- -----------
$ 2,065,094 $ 2,000,804
=========== ===========
</TABLE>
See accompanying notes.
2
<PAGE> 4
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- ----------------------------
1994 1993 1994 1993
--------- --------- ----------- -----------
(RESTATED) (RESTATED)
<S> <C> <C> <C> <C>
Net operating revenues . . . . . . . . . . . . . . . . . . . $ 763,327 $ 735,491 $ 2,204,527 $ 2,148,169
Interest income . . . . . . . . . . . . . . . . . . . . . . . 3,340 4,058 10,709 11,158
--------- --------- ----------- -----------
Total revenues . . . . . . . . . . . . . . . . . . . . 766,667 739,549 2,215,236 2,159,327
Costs and expenses:
Operating and administrative:
Wages and related . . . . . . . . . . . . . . . . . . . 406,226 404,431 1,183,900 1,186,576
Other . . . . . . . . . . . . . . . . . . . . . . . . . 286,549 270,887 832,969 796,643
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 14,946 15,301 43,974 47,904
Depreciation and amortization . . . . . . . . . . . . . . 23,877 22,044 68,359 64,978
--------- --------- ----------- -----------
Total costs and expenses . . . . . . . . . . . . . . . 731,598 712,663 2,129,202 2,096,101
--------- --------- ----------- -----------
Income before provision for income taxes and
extraordinary charge . . . . . . . . . . . . . . . . . . . 35,069 26,886 86,034 63,226
Provision for income taxes . . . . . . . . . . . . . . . . . 11,573 9,164 28,391 21,425
--------- --------- ----------- -----------
Income before extraordinary charge . . . . . . . . . . . . . 23,496 17,722 57,643 41,801
Extraordinary charge, net of income taxes of $1,155 . . . . . -- (2,345) -- (2,345)
--------- --------- ----------- -----------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,496 $ 15,377 $ 57,643 $ 39,456
========= ========= =========== ===========
Income (loss) per share of common stock:
Primary:
Before redemption premium on Series A preferred stock
and extraordinary charge . . . . . . . . . . . . . . . . $ .25 $ .20 $ .59 $ .50
Redemption premium on Series A preferred stock . . . . . . -- (.25) -- (.25)
--------- --------- ----------- -----------
Income (loss) before extraordinary charge . . . . . . . . .25 (.05) .59 .25
Extraordinary charge . . . . . . . . . . . . . . . . . . . -- (.03) -- (.03)
--------- --------- ----------- -----------
Net income (loss) . . . . . . . . . . . . . . . . . . . . $ .25 $ (.08) $ .59 $ .22
========= ========= =========== ===========
Shares used to compute per share amounts . . . . . . . . . 87,064 80,970 87,014 79,778
========= ========= =========== ===========
Fully-diluted:
Before redemption premium on Series A preferred stock
and extraordinary charge . . . . . . . . . . . . . . . . $ .24 $ .20 $ .59 $ .50
Redemption premium on Series A preferred stock . . . . . . -- (.25) -- (.25)
--------- --------- ----------- -----------
Income (loss) before extraordinary charge . . . . . . . . .24 (.05) .59 .25
Extraordinary charge . . . . . . . . . . . . . . . . . . . -- (.03) -- (.03)
--------- --------- ----------- -----------
Net income (loss) . . . . . . . . . . . . . . . . . . . . $ .24 $ (.08) $ .59 $ .22
========= ========= =========== ===========
Shares used to compute per share amounts . . . . . . . . . 98,612 80,970 98,481 79,852
========= ========= =========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 5
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
1994 1993
--------- ---------
(RESTATED)
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 57,643 $ 39,456
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . 68,359 64,978
Provision for reserves and discounts on patient, notes and other receivables, net 13,319 15,784
Extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 3,500
Gains on dispositions of facilities and other assets, net . . . . . . . . . . . . (9,512) (4,456)
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,496 1,508
Net decrease in insurance reserves . . . . . . . . . . . . . . . . . . . . . . . (1,179) (7,738)
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable - patient . . . . . . . . . . . . . . . . . . . . . . . . (36,463) (28,103)
Operating supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (728) (132)
Prepaid expenses and other receivables . . . . . . . . . . . . . . . . . . . . (2,360) 1,359
Accounts payable and other accrued expenses . . . . . . . . . . . . . . . . . 3,536 4,773
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,049 2,220
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,427) (5,924)
--------- ---------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,090 47,769
--------- ---------
Net cash provided by operating activities . . . . . . . . . . . . . . . . . 86,733 87,225
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . (38,502) (46,969)
Proceeds from dispositions of facilities and other assets . . . . . . . . . . . . . 33,344 6,397
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (86,636) (57,619)
Construction in progress, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,463 (10,786)
Payments on notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,935 5,293
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,171) (11,412)
--------- ---------
Net cash used for investing activities . . . . . . . . . . . . . . . . . . (98,567) (115,096)
Cash flows from financing activities:
Proceeds from issuance of Series B preferred stock, net . . . . . . . . . . . . . . -- 144,500
Funds designated for the redemption of Series A preferred stock . . . . . . . . . . -- (100,000)
Proceeds from issuance of long-term obligations . . . . . . . . . . . . . . . . . . 33,300 75,541
Net borrowings under revolving credit agreement . . . . . . . . . . . . . . . . . . 1,000 --
Repayments of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . (38,686) (90,795)
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . 13,915 1,113
Proceeds from issuance of ATH preferred stock . . . . . . . . . . . . . . . . . . . 1,264 6,389
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,497) (8,265)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,188) (750)
Proceeds from designated funds, net . . . . . . . . . . . . . . . . . . . . . . . . 3,012 3,972
--------- ---------
Net cash provided by financing activities . . . . . . . . . . . . . . . . . 4,120 31,705
--------- ---------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . (7,714) 3,834
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . 77,058 51,034
--------- ---------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . $ 69,344 $ 54,868
========= =========
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) . . . . . . . . . . . . . . . . . . . . . . . . $ 44,634 $ 48,534
Income taxes (net of refunds) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,846 12,106
</TABLE>
See accompanying notes.
4
<PAGE> 6
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
(UNAUDITED)
(i) The condensed consolidated financial statements included herein have
been prepared by the Company, without audit, and include all adjustments of a
normal recurring nature which are, in the opinion of management, necessary for
a fair presentation of the results of operations for the three-month and
nine-month periods ended September 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 these condensed consolidated 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 consolidated 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 nine-month periods ended September 30, 1994 are not necessarily
indicative of the results for a full year. Unless the context indicates
otherwise, the Company means Beverly Enterprises, Inc. and its consolidated
subsidiaries.
Primary earnings per share for the three-month and nine-month periods ended
September 30, 1994 were computed by dividing net income after deduction of
preferred stock dividends by the weighted average number of shares of common
stock outstanding during the period and the weighted average number of shares
issuable upon exercise of stock options, calculated using the treasury stock
method. Fully diluted earnings per share for the three-month and nine-month
periods ended September 30, 1994 were computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
period, the weighted average number of shares issuable upon exercise of stock
options, calculated using the treasury stock method and the assumed conversion
of the Company's Series B preferred stock. Conversion of the Company's 7.625%
convertible subordinated debentures and zero coupon notes would have an
anti-dilutive effect and, therefore, were not assumed.
Primary and fully diluted earnings per share for the three-month period
ended September 30, 1993 were computed by dividing net income, after deduction
of preferred stock dividends and the $20,000,000 redemption premium on the
Series A preferred stock, discussed below, by the weighted average number of
shares of common stock outstanding during the period. For the nine-month
period ended September 30, 1993, primary and fully diluted earnings per share
were computed by dividing net income, after deduction of preferred stock
dividends and the $20,000,000 redemption premium on the Series A preferred
stock, by the weighted average number of shares of common stock outstanding
during the period and the weighted average number of shares issuable upon
exercise of stock options, calculated using the treasury stock method. During
the third quarter of 1993, the Company charged retained earnings for the
$20,000,000 excess (the "redemption premium") to be paid to redeem the
Company's Series A preferred stock above its $80,000,000 original recorded
value. Although this amount did not impact the Company's net income, for
accounting purposes the $20,000,000 redemption premium was treated as a
reduction to income available to common stockholders in the calculation of
earnings per share for the three-month and nine-month periods ended September
30, 1993.
Prior year amounts have been restated to reflect the pooling of American
Transitional Hospitals, Inc. ("ATH"), as discussed in Note (iii). Certain
prior year amounts have been reclassified to conform with the 1994
presentation.
Retained earnings at September 30, 1994 can be reconciled by adding net
income for the nine months ended September 30, 1994 of $57,643,000 to retained
earnings as of December 31, 1993, and subtracting from that sum $6,188,000 of
dividends declared on the Series B preferred stock and $859,000 of accretion on
ATH preferred stock.
5
<PAGE> 7
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
(ii) The provisions for income taxes for the three-month and nine-month
periods ended September 30, 1994 and 1993 were based on estimated annual tax
rates of 33% and 34%, as restated, respectively. The Company's effective tax
rate is lower than the federal statutory rate primarily due to the utilization
of certain tax credit carryforwards, partially offset by the impact of state
income taxes. The provisions for income taxes consist of the following for the
three-month and nine-month periods ended September 30 (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ---------------------
1994 1993 1994 1993
--------- -------- ------- -------
(RESTATED) (RESTATED)
<S> <C> <C> <C> <C>
Federal:
Current . . . . . . . . . . . . . $ 8,009 $ 4,705 $21,161 $14,831
Deferred . . . . . . . . . . . . . 758 2,237 347 1,400
State:
Current . . . . . . . . . . . . . 2,299 1,134 5,734 3,519
Deferred . . . . . . . . . . . . . 507 1,088 1,149 1,675
--------- -------- ------- -------
$ 11,573 $ 9,164 $28,391 $21,425
========= ======== ======= =======
</TABLE>
(iii) During the nine months ended September 30, 1994, the Company purchased
15 previously leased nursing facilities (1,772 beds), one previously leased
retirement living center (20 units), and certain other assets, for
approximately $38,500,000 cash (including approximately $1,000,000 borrowed
under the Company's revolving credit agreement), approximately $16,400,000
assumed and acquired debt and approximately $1,100,000 security and other
deposits. Also during such period, the Company sold, subleased or terminated
the leases on 74 nursing facilities (6,886 beds) (11 of such facilities were
included in the 1992 restructuring program discussed below) and certain other
assets for cash proceeds of approximately $76,800,000 (approximately
$42,600,000, included in accounts receivable - nonpatient at September 30,
1994, was received in October 1994), approximately $700,000 of notes
receivable and approximately $40,000 of assumed debt. The operations of these
facilities were immaterial to the Company's financial position and results of
operations.
During the year ended December 31, 1992, the Company recognized a $57,000,000
pre-tax restructuring charge related to a program to discontinue the Company's
operation of 33 nursing facilities with historically poor financial
performance, and to replace, relocate or sell certain other assets (the "1992
restructuring program"). By September 30, 1994, the 1992 restructuring program
was substantially complete.
During the third quarter of 1994, the Company issued 2,400,000 shares of its
common stock for all of the outstanding stock of ATH. ATH operates licensed
hospitals specializing in long-term acute care and transitional acute care to
medically complex, chronically ill patients. The merger has been accounted for
as a pooling of interests and, accordingly the Company's consolidated financial
statements have been restated to reflect ATH's financial position, results of
operations and cash flows for each period prior to the merger. The merger of
ATH was not material to the Company's financial position or results of
operations.
Pharmacy Corporation of America ("PCA"), a subsidiary of the Company, entered
into an agreement to purchase three institutional pharmacy subsidiaries of
Synetic, Inc., for cash of approximately $107,300,000. Closing is subject to
satisfaction of certain conditions, including receipt of regulatory and Synetic
stockholder approvals. The Synetic businesses provide pharmaceutical
dispensing services in New England and Indiana to approximately 45,000 patients
in various institutions, including nursing homes, transitional care facilities,
correctional facilities and group homes. In a separate transaction, PCA
entered into an agreement to purchase Insta-Care Holdings, Inc., for cash of
approximately $112,000,000. Closing is subject to satisfaction of certain
conditions, including receipt of regulatory approvals. Insta-Care Holdings,
Inc. provides pharmaceutical dispensing services in six states to approximately
65,000 patients in nursing homes and correctional facilities. These
acquisitions will be accounted for as purchases and are expected to close
during the fourth quarter of 1994.
6
<PAGE> 8
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
(iv) On November 1, 1994, the Company executed a $375,000,000 Credit
Agreement (the "1994 Credit Agreement") which provides for a $225,000,000 Term
Loan (the "1994 Term Loan") and a $150,000,000 Revolver/Letter of Credit
Facility (the "1994 Revolver/LOC Facility"). The proceeds from the 1994 Term
Loan will be used to consummate the pharmacy acquisitions discussed above. The
1994 Revolver/LOC Facility will replace the Company's revolving credit facility
and letter of credit facility originally entered into in 1993. Currently, the
1994 Term Loan and any Revolver borrowings will bear interest at adjusted LIBOR
plus 1%, the Prime Rate, as defined, or the adjusted CD rate, as defined, plus
1.125%, at the Company's option. Such interest rates may be adjusted quarterly
based on certain financial ratio calculations. The 1994 Term Loan requires
quarterly principal and interest payments through October 1999. The Company
will pay certain commitment fees and commissions with respect to the 1994
Revolver/LOC Facility. The 1994 Credit Agreement will be secured by a security
interest in the stock of PCA and certain of its subsidiaries, including the
acquired businesses discussed above when they become subsidiaries of PCA, and
will impose on the Company certain financial tests and restrictive covenants.
In September 1994, the Board of Directors of the Company adopted a
Stockholder Rights Plan (the "Plan"). The Plan provides for the distribution
of one Common Stock Purchase Right (the "Rights") for each share of common
stock outstanding at the close of business on November 2, 1994. Under certain
circumstances, the Rights become exercisable to purchase the Company's common
stock, or securities of an acquiring entity, at one-half of market value. The
Rights are designed to protect stockholders in the event of an unsolicited
attempt to acquire the Company and to deal with the possibility of unilateral
actions by hostile acquirors. The issuance of the Rights has no dilutive
effect on the Company's earnings per share.
In May 1994, the Company entered into a $25,000,000 promissory note (the
"Note") which bears interest at the rate of 7.75% per annum. The Note is due
in equal quarterly installments of approximately $708,000, including principal
and interest, beginning in September 1994, with a balloon payment due in June
2001. The Note is secured by a mortgage interest in 11 nursing facilities and
a security interest in certain personal property. In addition, the Company has
amended certain of its credit agreements in 1994 to change various restrictive
covenants, release certain collateral and adjust the interest rate
calculations.
During 1993, the Company completed the sale of 3,000,000 shares of $2.75
Cumulative Convertible Exchangeable Preferred Stock (the "Series B preferred
stock") through a public offering. On January 3, 1994, the Company used
approximately $100,000,000 of the net proceeds from such offering to redeem all
of the Company's cumulative convertible preferred stock (the "Series A
preferred stock").
(v) There are various lawsuits and regulatory actions pending against the
Company arising in the normal course of business, some of which seek punitive
damages. The Company does not believe that the ultimate resolution of these
matters will have a material adverse effect on the Company's consolidated
financial position or results of operations.
(vi) Effective July 31, 1987, Beverly Enterprises, a California corporation
("Beverly California"), became a wholly-owned subsidiary of Beverly
Enterprises, Inc., a Delaware corporation ("Beverly Delaware"). Beverly
Delaware (the parent) provides financial, administrative and legal services to
Beverly California for which Beverly California is charged management fees.
7
<PAGE> 9
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
The following summarized unaudited financial information is being reported
because Beverly California's 7.625% convertible subordinated debentures due
March 2003 and its zero coupon notes (collectively, the "Debt Securities") and
its senior secured notes (the "Senior Secured Notes") are publicly held.
Beverly Delaware is co-obligor of the Debt Securities and guarantor of the
Senior Secured Notes. Summary unaudited financial information for Beverly
California is as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ---------------------
1994 1993 1994 1993
--------- --------- -------- ---------
(RESTATED) (RESTATED)
<S> <C> <C> <C> <C>
Total revenues . . . . . . . . . . . . . . . . . . . $ 767,101 $ 739,276 $2,216,204 $2,159,704
Total costs and expenses . . . . . . . . . . . . . . 732,555 712,517 2,130,735 2,096,689
Income before extraordinary charge . . . . . . . . . 23,145 17,636 57,264 41,659
Net income . . . . . . . . . . . . . . . . . . . . . 23,145 15,291 57,264 39,314
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, 1994 DECEMBER 31, 1993
------------------ -----------------
(RESTATED)
<S> <C> <C>
Current assets . . . . . . . . . . . . . . . . . . . $ 534,063 $ 475,017
Long-term assets . . . . . . . . . . . . . . . . . . 1,485,538 1,485,176
Current liabilities . . . . . . . . . . . . . . . . . 376,329 396,270
Long-term liabilities . . . . . . . . . . . . . . . . 862,001 839,058
</TABLE>
In addition to Beverly Delaware, one of its direct wholly-owned subsidiaries
and each of Beverly California's material wholly-owned subsidiaries
(collectively, the "Subsidiary Guarantors") have guaranteed the obligations of
Beverly California under the Senior Secured Notes. Separate financial
statements of Beverly California and the Subsidiary Guarantors are not
considered to be material to holders of the Senior Secured Notes since the
guaranty of each of the Subsidiary Guarantors is joint and several and full and
unconditional (except that liability thereunder is limited to an aggregate
amount equal to the largest amount that would not render its obligations
thereunder subject to avoidance under Section 548 of the Bankruptcy Code of
1978, as amended, or any comparable provisions of applicable state law), and
the aggregate net assets, earnings and equity of the Subsidiary Guarantors and
Beverly California together, after adjustment for intercompany management fees,
are substantially equivalent to the net assets, earnings and equity of Beverly
Delaware on a consolidated basis.
8
<PAGE> 10
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1994
(UNAUDITED)
OPERATING RESULTS
THIRD QUARTER 1994 COMPARED TO THIRD QUARTER 1993
Net income was $23,496,000 for the third quarter of 1994, as compared to net
income of $15,377,000, restated, as discussed below, for the same period in
1993. Net income for 1993 includes a $2,345,000 extraordinary charge, net of
income taxes, related to the acceleration of unamortized debt issue costs
associated with certain debt that was repaid or refinanced. During the third
quarter of 1994, the Company completed the previously announced merger of
American Transitional Hospitals, Inc. ("ATH") in exchange for 2,400,000 shares
of Beverly common stock. The merger was accounted for as a pooling of
interests and, accordingly, the Company's consolidated financial statements
have been restated to reflect ATH's financial position, results of operations
and cash flows for each period prior to the merger. The merger of ATH was not
material to the Company's financial position or results of operations.
Net operating revenues and operating and administrative costs increased
approximately $27,800,000 and $17,500,000, respectively, for the third quarter
of 1994, as compared to the same period in 1993. These increases consist of
the following: increases in net operating revenues and operating and
administrative costs for facilities which the Company operated during each of
the quarters ended September 30, 1994 and 1993 ("same facility operations") of
approximately $55,400,000 and $48,600,000, respectively; increases in net
operating revenues and operating and administrative costs of approximately
$4,400,000 and $4,700,000, respectively, related to ATH operations and the
acquisition of two facilities in 1993; and decreases in net operating revenues
and operating and administrative costs of approximately $32,000,000 and
$35,800,000, respectively, due to the disposition of, or lease terminations on,
74 facilities in 1994 and 43 facilities in 1993.
The increase in net operating revenues for same facility operations for the
third quarter of 1994, as compared to the same period in 1993, was due to the
following: approximately $31,300,000 due primarily to increases in Medicaid
room and board rates, and to a lesser extent, private and Medicare room and
board rates; approximately $21,600,000 due to increased ancillary revenues as
a result of providing additional ancillary services to the Company's Medicare
and private-pay patients; approximately $1,700,000 due to a shift in the
Company's patient mix to a higher Medicare census; and approximately
$8,500,000 due primarily to pharmacy-related revenues and various other items.
The Company's Medicare, private and Medicaid census for same facility
operations was 12%, 19%, and 68%, respectively, for the third quarter of 1994,
as compared to 11%, 19%, and 69%, respectively, for the same period in 1993.
These increases in net operating revenues were partially offset by
approximately $7,700,000 due to a decrease in same facility occupancy to 89.1%
for the third quarter of 1994, as compared to 90.5% for the same period in
1993.
The increase in operating and administrative costs for same facility
operations for the third quarter of 1994, as compared to the same period in
1993, was due to the following: approximately $22,000,000 due to increased
wages and related expenses principally due to higher wages and greater benefits
intended to attract and retain qualified personnel, the hiring of therapists on
staff as opposed to contracting for their services, and increased staffing
levels in the Company's nursing facilities to cover higher acuity patients;
approximately $12,100,000 due to additional ancillary costs (excluding wages
and related expenses) associated with the increase in ancillary services
provided to the Company's Medicare and private-pay patients; approximately
$7,200,000 due to increases in supplies and other variable costs primarily due
to additional supplies required to meet the needs of the Company's
higher acuity patients; and approximately $7,300,000 due primarily to increases
in pharmacy-related costs and various other items.
Ancillary revenues are derived from providing services to residents beyond
room and board care. These services include occupational, physical, speech,
respiratory and IV therapy, as well as sales of pharmaceutical products and
9
<PAGE> 11
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
other services. The Company's overall ancillary revenues for the third quarter
of 1994 were $181,992,000 and represented 23.8% of net operating revenues, as
compared to $159,928,000 of ancillary revenues for the same period in 1993
which represented 21.7% of net operating revenues for the third quarter of
1993. Although the Company is pursuing further growth of ancillary revenues
through expansion of specialty services, such as rehabilitation and sub-acute
care, there can be no assurance that such growth will continue. Growth in
ancillary revenues, as well as increases in Medicare census, have also resulted
in higher costs for the Company due to higher acuity services being provided to
these patients. The Company's overall ancillary costs, excluding wages and
related expenses, were $98,134,000 for the third quarter of 1994, compared to
$91,071,000 for the same period in 1993.
Depreciation and amortization expense increased approximately $1,800,000 for
the third quarter of 1994 as compared to the same period in 1993 primarily due
to the acquisition of previously leased facilities, the opening of newly
constructed facilities and additional capital expenditures, partially offset by
a decrease due to the disposition of or lease terminations on certain
facilities.
NINE MONTHS 1994 COMPARED TO NINE MONTHS 1993
Net income was $57,643,000 for the nine months ended September 30, 1994, as
compared to net income of $39,456,000, restated, as discussed above, for the
same period in 1993. Net income for 1993 includes a $2,345,000 extraordinary
charge, net of income taxes, discussed above.
Net operating revenues and operating and administrative costs increased
approximately $56,400,000 and $33,700,000, respectively, for the nine months
ended September 30, 1994, as compared to the same period in 1993. These
increases consist of the following: increases in net operating revenues and
operating and administrative costs for facilities which the Company operated
during each of the nine-month periods ended September 30, 1994 and 1993 ("same
facility operations") of approximately $164,200,000 and $138,500,000,
respectively; increases in net operating revenues and operating and
administrative costs of approximately $12,100,000 and $12,500,000, respectively,
related to ATH operations and the acquisition of three facilities in 1993; and
decreases in net operating revenues and operating and administrative costs of
approximately $119,900,000 and $117,300,000, respectively, due to the
disposition of, or lease terminations on, 74 facilities in 1994 and 43
facilities in 1993.
The increase in net operating revenues for same facility operations for the
nine months ended September 30, 1994, as compared to the same period in 1993,
was due to the following: approximately $82,500,000 due primarily to
increases in Medicaid room and board rates, and to a lesser extent, private and
Medicare room and board rates; approximately $74,500,000 due to increased
ancillary revenues as a result of providing additional ancillary services to
the Company's Medicare and private-pay patients; approximately $5,500,000 due
to a shift in the Company's patient mix to a higher Medicare census; and
approximately $20,200,000 due primarily to pharmacy-related revenues and
various other items. The Company's Medicare, private and Medicaid census for
same facility operations was 12%, 19%, and 68%, respectively, for the nine
months ended September 30, 1994, as compared to 11%, 19%, and 69%,
respectively, for the same period in 1993. These increases in net operating
revenues were partially offset by approximately $18,500,000 due to a decrease
in same facility occupancy to 89.1% for the nine months ended September 30,
1994, as compared to 90.2% for the same period in 1993.
The increase in operating and administrative costs for same facility
operations for the nine months ended September 30, 1994, as compared to the
same period in 1993, was due to the following: approximately $61,100,000 due
to increased wages and related expenses principally due to higher wages and
greater benefits intended to attract and retain qualified personnel, the hiring
of therapists on staff as opposed to contracting for their services, and
increased staffing levels in the Company's nursing facilities to cover
higher acuity patients; approximately $54,800,000 due to additional ancillary
costs (excluding wages and related expenses) associated with the increase in
ancillary services provided to the Company's Medicare and private-pay patients;
approximately $5,300,000 due to increases in supplies and other variable costs
primarily due to additional supplies required to meet the needs of the
Company's higher acuity patients; and approximately $17,300,000 due primarily
to increases in pharmacy-related costs and various other items.
10
<PAGE> 12
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
The Company's overall ancillary revenues for the nine months ended September
30, 1994 were $528,182,000 and represented 24.0% of net operating revenues, as
compared to ancillary revenues of $454,970,000 for the same period in 1993
which represented 21.2% of net operating revenues for the nine months ended
September 30, 1993. The Company's overall ancillary costs, excluding wages and
related expenses, were $290,310,000 for the nine months ended September 30,
1994, compared to $254,202,000 for the same period in 1993.
Interest expense decreased approximately $3,900,000 as compared to the same
period in 1993 primarily due to the repayment in the third quarter of 1993 of
approximately $45,000,000 of debt with a portion of the proceeds from issuance
of the Series B preferred stock (as defined herein) and the conversion in the
third quarter of 1993 of approximately $46,000,000 in principal amount of the
Company's 9% convertible subordinated debentures into common stock.
Depreciation and amortization expense increased approximately $3,400,000 as
compared to the same period in 1993 primarily due to the acquisition of
previously leased facilities, the opening of newly constructed facilities and
additional capital expenditures, partially offset by a decrease due to the
disposition of or lease terminations on certain facilities.
The Company's future operating performance will continue to be affected by
the issues facing the long-term health care industry as a whole, including the
maintenance of occupancy, its ability to continue to expand higher margin
business from Medicare, managed care and private-pay payors, the availability
of nursing and therapy personnel, the adequacy of funding of governmental
reimbursement programs, the demand for nursing home care and the nature of any
health care reform measures that may be taken by the federal government, as
discussed below, as well as by any state governments. The Company's ability
to control costs, including its wages and related expenses which continue to
rise and represent the largest component of the Company's operating and
administrative expenses, will also significantly impact its future operating
results.
As a general matter, increases in the Company's operating costs result in
higher patient rates under Medicaid programs in subsequent periods. However,
the Company's results of operations will continue to be affected by the time
lag in most states between the increases in reimbursable costs and the receipt
of related reimbursement rate increases. Medicaid rate increases, adjusted
for inflation, are generally based upon changes in costs for a full calendar
year period. The time lag before such costs are reflected in permitted rates
varies from state to state, with a substantial portion of the increases taking
effect up to 18 months after the related cost increases.
The Clinton Administration proposed health care reform legislation to
Congress in October 1993. Other proposed health care reform legislation was
also debated and formulated by various groups in 1993 and 1994. Although no
major health care reform legislation has been adopted in 1994, this issue
remains a high priority to the Administration and other groups. Among the
proposals under consideration are insurance market reforms to increase the
availability of group health insurance to small businesses, requirements that
all businesses offer health insurance coverage to their employees and the
creation of a single governmental health insurance plan that would cover all
citizens. These proposals and industry and other groups' recommendations will
likely impact the form and content of any future health care reform
legislation. As a result, the Company is unable to predict the type of
legislation or regulations that may be adopted or the impact, if any, on the
Company. There can be no assurance that any health care reform will not
adversely affect the Company's financial position or results of operations.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1994, the Company had approximately $69,344,000 in cash and
cash equivalents and net working capital of approximately $228,761,000. The
Company anticipates that approximately $29,640,000 of its existing cash at
September 30, 1994, while not legally restricted, will be utilized to fund
certain workers compensation and general liability claims, and the Company does
not expect to use such cash for other purposes. The Company had $49,000,000 of
unused commitments under its revolving credit agreement and $15,000,000 of
unused commitments under its commercial paper program as of September 30, 1994.
11
<PAGE> 13
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
Net cash provided by operating activities for the nine months ended
September 30, 1994 was approximately $86,733,000. Net cash used for investing
activities was approximately $98,567,000 and net cash provided by financing
activities was approximately $4,120,000 for the nine months ended September 30,
1994. The Company primarily used cash generated from operations to fund
capital expenditures and construction totaling approximately $82,173,000. The
Company received cash proceeds of approximately $31,000,000 from the sale or
sublease of 28 nursing facilities in Texas, and received $12,000,000 in cash
proceeds from the exercise of an option grant for 1,000,000 common shares at
$12.00 per share. In addition, the Company issued approximately
$33,300,000 in long-term obligations and borrowed $1,000,000 under its
revolving credit agreement. A portion of such proceeds was used to repay
approximately $38,686,000 of long-term obligations and to fund acquisitions of
approximately $38,502,000. In April 1994, the Company filed a Registration
Statement on Form S-3 with the Securities and Exchange Commission to register
the 1,000,000 common shares purchased under the option grant. This did not
result in any additional proceeds to the Company. In October 1994, the Company
received approximately $42,600,000 of proceeds from the sale of 30 nursing
facilities in Texas.
Pharmacy Corporation of America ("PCA"), a subsidiary of the Company,
entered into an agreement to purchase three institutional pharmacy subsidiaries
of Synetic, Inc., for cash of approximately $107,300,000. Closing is subject
to satisfaction of certain conditions, including receipt of regulatory and
Synetic stockholder approvals. The Synetic businesses provide pharmaceutical
dispensing services in New England and Indiana to approximately 45,000 patients
in various institutions, including nursing homes, transitional care facilities,
correctional facilities and group homes. In a separate transaction, PCA
entered into an agreement to purchase Insta-Care Holdings, Inc., for cash of
approximately $112,000,000. Closing is subject to satisfaction of certain
conditions, including receipt of regulatory approvals. Insta-Care Holdings,
Inc. provides pharmaceutical dispensing services in six states to approximately
65,000 patients in nursing homes and correctional facilities. These
acquisitions will be accounted for as purchases and are expected to close
during the fourth quarter of 1994.
On November 1, 1994, the Company executed a $375,000,000 Credit Agreement
(the "1994 Credit Agreement") which provides for a $225,000,000 Term Loan (the
"1994 Term Loan") and a $150,000,000 Revolver/Letter of Credit Facility (the
"1994 Revolver/LOC Facility"). The proceeds from the 1994 Term Loan will be
used to consummate the pharmacy acquisitions discussed above. The 1994
Revolver/LOC Facility will replace the Company's revolving credit facility and
letter of credit facility originally entered into in 1993. Currently, the 1994
Term Loan and any Revolver borrowings will bear interest at adjusted LIBOR plus
1%, the Prime Rate, as defined, or the adjusted CD rate, as defined, plus
1.125%, at the Company's option. Such interest rates may be adjusted quarterly
based on certain financial ratio calculations. The 1994 Term Loan requires
quarterly principal and interest payments through October 1999.
In September 1994, the Board of Directors of the Company adopted a
Stockholder Rights Plan (the "Plan"). The Plan provides for the distribution
of one Common Stock Purchase Right (the "Rights") for each share of common
stock outstanding at the close of business on November 2, 1994. Under certain
circumstances, the Rights become exercisable to purchase the Company's common
stock, or securities of an acquiring entity, at one-half of market value. The
Rights are designed to protect stockholders in the event of an unsolicited
attempt to acquire the Company and to deal with the possibility of unilateral
actions by hostile acquirors. The issuance of the Rights has no dilutive
effect on the Company's earnings per share.
In May 1994, the Company entered into a $25,000,000 promissory note (the
"Note") which bears interest at the rate of 7.75% per annum. The Note is due
in equal quarterly installments of approximately $708,000, including principal
and interest, beginning in September 1994, with a balloon payment due in June
2001. In addition, the Company has amended certain of its credit agreements in
1994 to change various restrictive covenants, release certain collateral and
adjust the interest rate calculations.
12
<PAGE> 14
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
During 1993, the Company completed the sale of 3,000,000 shares of $2.75
Cumulative Convertible Exchangeable Preferred Stock (the "Series B preferred
stock") through a public offering. On January 3, 1994, the Company used
approximately $100,000,000 of the net proceeds from such offering to redeem all
of the Company's cumulative convertible preferred stock (the "Series A
preferred stock"). The Series A preferred stock dividend rate was scheduled to
increase from 1% to 10% on January 1, 1994.
The Company believes that its existing cash and cash equivalents, working
capital from operations, proceeds from the dispositions of certain facilities,
borrowings under its banking arrangements and commercial paper program,
proceeds from issuance of certain debt securities and refinancings of certain
existing indebtedness will be adequate to repay its debts due within one year
of approximately $37,336,000, to make normal recurring capital additions and
improvements for the twelve months ending September 30, 1995 of approximately
$100,000,000, to make selective acquisitions, including the purchase of
previously leased facilities, and to meet working capital requirements.
13
<PAGE> 15
PART II
BEVERLY ENTERPRISES, INC.
OTHER INFORMATION
SEPTEMBER 30, 1994
(UNAUDITED)
ITEM 1. LEGAL PROCEEDINGS
There are various lawsuits and regulatory actions pending against the
Company arising in the normal course of business, some of which seek punitive
damages. The Company does not believe that the ultimate resolution of these
matters will have a material adverse effect on the Company's consolidated
financial position or results of operations.
ITEM 6(A). EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Indenture dated as of December 27, 1990 (the "Senior Secured Note
Indenture"), among Beverly California, Beverly Enterprises and
Yasuda Bank and Trust Company (U.S.A.) with respect to Senior
Secured Floating Rate Notes due 1995 and 14 1/4% Senior Secured
Fixed Rate Notes due 1997 (incorporated by reference to Exhibit
4.1 to the Registration Statement on Form S-4 of Beverly
California, Beverly Enterprises and the Registrants set forth on
the Table of Additional Co-Registrants filed on February 8, 1991
(File No. 33-38954))
4.2 Supplemental Indenture No. 1, dated as of September 20, 1991, to
the Senior Secured Note Indenture (incorporated by reference to
Exhibit 4.1 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991)
4.3 Supplemental Indenture No. 2, dated as of September 26, 1991, to
the Senior Secured Note Indenture (incorporated by reference to
Exhibit 4.2 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991)
4.4 Supplemental Indenture No. 3, dated as of March 11, 1992, to the
Senior Secured Note Indenture (incorporated by reference to
Exhibit 4 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended March 31, 1992)
4.5 Supplemental Indenture No. 4, dated as of July 21, 1993, to the
Senior Secured Note Indenture (incorporated by reference to
Exhibit 4.5 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993)
4.6 Subsidiary Guaranty dated as of December 27, 1990 by Beverly
Enterprises, Beverly California and the Subsidiary Guarantors
listed therein (incorporated by reference to Exhibit 4.3 to the
Registration Statement on Form S-4 of Beverly California, Beverly
Enterprises and the Registrants set forth on the Table of
Additional Co-Registrants filed on February 8, 1991 (File No.
33-38954))
4.7 Subsidiary Guaranty dated as of April 1, 1991 by Beverly
Enterprises, Beverly California and the Subsidiary Guarantors
listed therein (incorporated by reference to Exhibit 4.5 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1991)
4.8 Subsidiary Guaranty dated as of October 31, 1991 by Beverly
Enterprises, Beverly California and Northshore Rehab Association,
Inc. as Subsidiary Guarantor (incorporated by reference to
Exhibit 4.6 to Beverly Enterprises' Annual Report on Form 10-K
for the year ended December 31, 1991)
4.9 Subsidiary Guaranty dated as of December 30, 1991 by Beverly
Enterprises, Beverly California and Beverly Indemnity, Inc. as
Subsidiary Guarantor (incorporated by reference to Exhibit 4.7 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1991)
14
<PAGE> 16
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.10 Indenture dated as of August 1, 1993 between Beverly Enterprises
and Chemical Bank, as Trustee with respect to Beverly
Enterprises' 5 1/2% Convertible Subordinated Debentures due
August 1, 2018, issuable upon exchange of Beverly Enterprises'
$2.75 Cumulative Convertible Exchangeable Preferred Stock (the
"Subordinated Debenture Indenture") (incorporated by reference to
Exhibit 4.10 to Beverly Enterprises' Quarterly Report on Form
10-Q for the quarter ended June 30, 1993)
4.11 Certificate of Designation, Powers, Preferences and Rights, and
the Qualifications, Limitations or Restrictions Thereof, of the
Series of Preferred Stock to be designated $2.75 Cumulative
Convertible Exchangeable Preferred Stock of Beverly Enterprises
(the "$2.75 Certificate of Designation")(incorporated by
reference to Exhibit 4.12 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended June 30, 1993)
4.12 Indenture dated as of April 1, 1993 (the "First Mortgage Bond
Indenture"), among Beverly Enterprises, Delaware Trust Company,
as Corporate Trustee, and Richard N. Smith, as Individual
Trustee, with respect to First Mortgage Bonds (incorporated by
reference to Exhibit 4.1 to Beverly Enterprises' Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993)
4.13 First Supplemental Indenture dated as of April 1, 1993 to the
First Mortgage Bond Indenture, with respect to 8 3/4% First
Mortgage Bonds (Series A) due 2008 (incorporated by reference to
Exhibit 4.2 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended March 31, 1993)
4.14 Second Supplemental Indenture dated as of July 1, 1993
to the First Mortgage Bond Indenture, with respect to 8 5/8%
First Mortgage Bonds (Series B) due 2008 (replaces Exhibit 4.1 to
Beverly Enterprises' Current Report on Form 8-K dated July 15,
1993)(incorporated by reference to Exhibit 4.15 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993)
4.15 Indenture dated as of December 30, 1993 (the "Notes Indenture"),
between Beverly Enterprises, Inc. and Boatmen's Trust Company, as
Trustee, with respect to the Notes (incorporated by reference to
Exhibit 4.2 to Beverly Enterprises' Registration Statement on
Form S-3 filed on November 9, 1993 (File No. 33-50965))
4.16 First Supplemental Indenture dated as of December 30, 1993 to the
Notes Indenture, with respect to 8.75% Notes due 2003
(incorporated by reference to Exhibit 4.4 to Beverly Enterprises'
Current Report on Form 8-K dated January 4, 1994)
4.17 Rights Agreement dated as of September 29, 1994, between Beverly
Enterprises, Inc. and The Bank of New York, as Rights Agent
(incorporated by reference to Exhibit 1 to Beverly Enterprises'
Registration Statement on Form 8-A filed on October 18, 1994)
In accordance with item 601(b)(4)(iii) of Regulation S-K, certain
instruments pertaining to Beverly Enterprises' long-term
obligations have not been filed; copies thereof will be furnished
to the Securities and Exchange Commission upon request.
10.1 * Amended and Restated 1981 Beverly Stock Option Plan (incorporated
by reference to Post-Effective Amendment No. 2 on Form S-8 to
Beverly Enterprises' Registration Statement on Form S-4 filed on
July 31, 1987 (File No. 33-13243))
10.2 * Amended and Restated 1981 Beverly Incentive Stock Option Plan
(incorporated by reference to Post-Effective Amendment No. 2 on
Form S-8 to Beverly Enterprises' Registration Statement on Form
S-4 filed on July 31, 1987 (File No. 33-13243))
10.3 * 1985 Beverly Nonqualified Stock Option Plan (incorporated by
reference to Post-Effective Amendment No. 2 on Form S-8 to
Beverly Enterprises' Registration Statement on Form S-4 filed on
July 31, 1987 (File No. 33-13243))
10.4 * Amended and Restated Beverly Enterprises, Inc. 1993 Long-Term
Incentive Stock Plan (as amended by Amendment No. 1)
(incorporated by reference to Exhibit 10.4 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
10.5 * Beverly Enterprises, Inc. Annual Incentive Plan (incorporated by
reference to Exhibit A to Beverly Enterprises definitive proxy
for the Annual Meeting of Stockholders held May 19, 1994)
15
<PAGE> 17
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.6 * Retirement Plan for Outside Directors (incorporated by reference
to Exhibit 10.5 to Beverly Enterprises' Quarterly Report on Form
10-Q for the quarter ended June 30, 1993)
10.7 * Beverly Enterprises, Inc. Non-Employee Directors' Stock Option
Plan (incorporated by reference to Exhibit 4.1 to Beverly
Enterprises' Registration Statement on Form S-8 filed on
September 21, 1994 (File No. 33-55571))
10.8 * Executive Medical Reimbursement Plan (incorporated by reference
to Exhibit 10.5 to Beverly Enterprises' Annual Report on Form
10-K for the year ended December 31, 1987)
10.9 * Amended and Restated Beverly Enterprises, Inc. Executive Life
Insurance Plan and Summary Plan Description (incorporated by
reference to Exhibit 10.7 to Beverly Enterprises' Annual Report
on Form 10-K for the year ended December 31, 1993)
10.10 * Executive Physicals Policy (incorporated by reference to Exhibit
10.8 to Beverly Enterprises' Quarterly Report on Form 10-Q for
the quarter ended June 30, 1993)
10.11 * Amended and Restated Deferred Compensation Plan effective July
18, 1991 (incorporated by reference to Exhibit 10.6 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1991)
10.12 * Executive Retirement Plan (incorporated by reference to Exhibit
10.9 to Beverly Enterprises' Annual Report on Form 10-K for the
year ended December 31, 1987)
10.13 * Amendment No. 1, effective as of July 1, 1991, to the Executive
Retirement Plan (incorporated by reference to Exhibit 10.8 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1991)
10.14 * Amendment No. 2, effective as of December 12, 1991, to the
Executive Retirement Plan (incorporated by reference to Exhibit
10.9 to Beverly Enterprises' Annual Report on Form 10-K for the
year ended December 31, 1991)
10.15 * Amendment No. 3, effective as of July 31, 1992, to the Executive
Retirement Plan (incorporated by reference to Exhibit 10.10 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1992)
10.16 * Form of Indemnification Agreement between Beverly Enterprises and
its officers, directors and certain of its employees
(incorporated by reference to Exhibit 19.14 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1987)
10.17 * Form of request by Beverly Enterprises to certain of its officers
or directors relating to indemnification rights (incorporated by
reference to Exhibit 19.5 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.18 * Form of request by Beverly Enterprises to certain of its officers
or employees relating to indemnification rights (incorporated by
reference to Exhibit 19.6 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.19 * Agreement dated December 29, 1986 between Beverly Enterprises and
Stephens Inc. (incorporated by reference to Exhibit 10.20 to
Beverly Enterprises' Registration Statement on Form S-1 filed on
January 18, 1990 (File No. 33-33052))
10.20 * Severance Plan for Corporate and Regional Employees effective
December 1, 1989 (incorporated by reference to Exhibit 10.21 to
Amendment No. 1 to Beverly Enterprises' Registration Statement on
Form S-1 filed on February 26, 1990 (File No. 33-33052))
16
<PAGE> 18
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.21 * Form of Restricted Stock Performance Agreement dated June 28,
1990 under the 1985 Beverly Nonqualified Stock Option Plan
(incorporated by reference to Exhibit 10.22 to Beverly
Enterprises' Registration Statement on Form S-1 filed on July 30,
1990 (File No. 33-36109))
10.22 * Form of Agreement Concerning Benefits Upon Severance dated as of
September 1, 1990 between Beverly Enterprises and certain
officers of Beverly Enterprises (incorporated by reference to
Exhibit 10.23 to Beverly Enterprises' Registration Statement on
Form S-1 filed on July 30, 1990 (File No. 33-36109))
10.23 * First Amendment to Agreement Concerning Benefits Upon Severance
dated as of April 25, 1993 between Beverly Enterprises and Ronald
C. Kayne (incorporated by reference to Exhibit 10.22 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1993)
10.24 * Beverly Enterprises Company Car Policy effective May 1, 1988
(incorporated by reference to Exhibit 10.18 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.25 * American Transitional Hospitals, Inc. 1993 Nonqualified Stock
Option Plan assumed by Beverly Enterprises, Inc. (incorporated
by reference to Exhibit 10.39 to Beverly Enterprises'
Registration Statement on Form S-4 (Amendment No. 1) filed on
August 5, 1994 (File No. 33-54501))
10.26 * Stock Option Agreement between Beverly Enterprises, Inc. and
Robert C. Crosby dated September 2, 1994 (incorporated by
reference to Exhibit 4.4 to Beverly Enterprises' Registration
Statement on Form S-8 filed on September 21, 1994 (File No.
33-55571))
10.27 Master Lease Document -- General Terms and Conditions dated
December 30, 1985 for Leases between Beverly California and
various subsidiaries thereof as lessees and Beverly Investment
Properties, Inc. as lessor (incorporated by reference to Exhibit
10.12 to Beverly California's Annual Report on Form 10-K for the
year ended December 31, 1985)
10.28 Agreement dated as of December 29, 1986 among Beverly California,
Beverly Enterprises -- Texas, Inc., Stephens Inc. and Real
Properties, Inc. (incorporated by reference to Exhibit 28 to
Beverly California's Current Report on Form 8-K dated December
30, 1986) and letter agreement dated as of July 31, 1987 among
Beverly Enterprises, Beverly California, Beverly Enterprises --
Texas, Inc. and Stephens Inc. with reference thereto
(incorporated by reference to Exhibit 19.13 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1987)
10.29 Credit Agreement, dated as of March 24, 1992, among Beverly
Enterprises, Inc., Beverly California Corporation, the Lenders
listed therein, Bank of Montreal as Co-Agent, and The Long Term
Credit Bank of Japan, Ltd. Los Angeles Agency as Agent (the
"LTCB Credit Agreement") (incorporated by reference to Exhibit
10.2 to Beverly Enterprises' Quarterly Report on Form 10-Q for
the quarter ended March 31, 1992)
10.30 Amendment No. 1 dated as of April 7, 1992 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.3 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
March 31, 1992)
10.31 Second Amendment dated as of May 11, 1992 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.23 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.32 Third Amendment dated as of March 1, 1993 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.24 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.33 Seventh Amendment dated as of May 2, 1994 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.31 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
17
<PAGE> 19
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.34 Master Sale and Servicing Agreement dated as of December 1, 1990
among Beverly Funding Corporation, Beverly California, the
wholly-owned subsidiaries of Beverly Enterprises listed therein,
Beverly Enterprises and certain wholly-owned subsidiaries of
Beverly Enterprises which may become parties thereto
(incorporated by reference to Exhibit 10.27 to the Registration
Statement on Form S-4 of Beverly California, Beverly Enterprises
and the Registrants set forth on the Table of Additional
Co-Registrants filed on February 8, 1991 (File No. 33-38954))
10.35 First Omnibus Amendment to Liquidity Agreement, Depository
Agreement, Pledge and Security Agreement and Master Sale and
Servicing Agreement dated as of July 1, 1991 (incorporated by
reference to Exhibit 10.1 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991)
10.36 Second Amendment to Master Sale and Servicing Agreement dated as
of March 1, 1992 (incorporated by reference to Exhibit 10.4 to
Beverly Enterprises' Quarterly Report on Form 10-Q for the
quarter ended March 31, 1992)
10.37 Second Omnibus Amendment to Master Sale and Servicing Agreement,
Pledge Agreement and Selling Subsidiary Agreements dated as of
September 28, 1992, among Beverly Funding Corporation, Beverly
California Corporation, Beverly Enterprises, Inc., the
wholly-owned subsidiaries of Beverly Enterprises, Inc. listed on
the signature pages and the Banks listed on the signature pages
(incorporated by reference to Exhibit 10 to Beverly Enterprises'
Quarterly Report on Form 10-Q for the quarter ended September 30,
1992)
10.38 Credit Agreement dated as of March 2, 1993 among Beverly
Enterprises, Inc., Beverly California Corporation, the Lenders
listed therein, and the Nippon Credit Bank, Ltd. Los Angeles
Agency as Agent (the "Nippon Credit Agreement") (incorporated by
reference to Exhibit 10.29 to Beverly Enterprises' Annual Report
on Form 10-K for the year ended December 31, 1992)
10.39 Second Amendment dated as of May 19, 1994 to the Nippon Credit
Agreement (incorporated by reference to Exhibit 10.37 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
10.40 Credit Agreement dated as of March 1, 1993 among Beverly
California Corporation, Beverly Enterprises, Inc., the Banks
listed therein, Morgan Guaranty Trust Company of New York as
Issuing Bank and Agent (the "Morgan Credit Agreement")
(incorporated by reference to Exhibit 10.30 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.41 First Amendment dated as of May 3, 1993 to the Morgan Credit
Agreement (incorporated by reference to Exhibit 10.34 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993)
10.42 Second Amendment dated as of September 30, 1993 to the Morgan
Credit Agreement (incorporated by reference to Exhibit 10.35 to
Beverly Enterprises' Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993)
10.43 Third Amendment dated as of April 6, 1994 to the Morgan Credit
Agreement (incorporated by reference to Exhibit 10.41 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
10.44 Data Processing Agreement, dated as of August 1, 1992, by and
between Systematics Telecommunications Services, Inc. and
Beverly California Corporation (incorporated by reference to
Exhibit 10 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1992)
11.1 Computation of Net Income (Loss) Per Share
27.1 Financial Data Schedule for the nine months ended September 30,
1994
* Exhibits 10.1 through 10.26 are the management contracts,
compensatory plans, contracts and arrangements in which any
director or named executive officer participates.
ITEM 6(B). REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the three months
ended September 30, 1994.
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BEVERLY ENTERPRISES, INC.
Registrant
Dated: November 14, 1994 By: /s/ SCOTT M. TABAKIN
------------------------------
Scott M. Tabakin
Vice President, Controller and
Chief Accounting Officer
19
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C>
4.1 Indenture dated as of December 27, 1990 (the "Senior Secured Note
Indenture"), among Beverly California, Beverly Enterprises and
Yasuda Bank and Trust Company (U.S.A.) with respect to Senior
Secured Floating Rate Notes due 1995 and 14 1/4% Senior Secured
Fixed Rate Notes due 1997 (incorporated by reference to Exhibit
4.1 to the Registration Statement on Form S-4 of Beverly
California, Beverly Enterprises and the Registrants set forth on
the Table of Additional Co-Registrants filed on February 8, 1991
(File No. 33-38954))
4.2 Supplemental Indenture No. 1, dated as of September 20, 1991, to
the Senior Secured Note Indenture (incorporated by reference to
Exhibit 4.1 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991)
4.3 Supplemental Indenture No. 2, dated as of September 26, 1991, to
the Senior Secured Note Indenture (incorporated by reference to
Exhibit 4.2 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991)
4.4 Supplemental Indenture No. 3, dated as of March 11, 1992, to the
Senior Secured Note Indenture (incorporated by reference to
Exhibit 4 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended March 31, 1992)
4.5 Supplemental Indenture No. 4, dated as of July 21, 1993, to the
Senior Secured Note Indenture (incorporated by reference to
Exhibit 4.5 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993)
4.6 Subsidiary Guaranty dated as of December 27, 1990 by Beverly
Enterprises, Beverly California and the Subsidiary Guarantors
listed therein (incorporated by reference to Exhibit 4.3 to the
Registration Statement on Form S-4 of Beverly California, Beverly
Enterprises and the Registrants set forth on the Table of
Additional Co-Registrants filed on February 8, 1991 (File No.
33-38954))
4.7 Subsidiary Guaranty dated as of April 1, 1991 by Beverly
Enterprises, Beverly California and the Subsidiary Guarantors
listed therein (incorporated by reference to Exhibit 4.5 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1991)
4.8 Subsidiary Guaranty dated as of October 31, 1991 by Beverly
Enterprises, Beverly California and Northshore Rehab Association,
Inc. as Subsidiary Guarantor (incorporated by reference to
Exhibit 4.6 to Beverly Enterprises' Annual Report on Form 10-K
for the year ended December 31, 1991)
4.9 Subsidiary Guaranty dated as of December 30, 1991 by Beverly
Enterprises, Beverly California and Beverly Indemnity, Inc. as
Subsidiary Guarantor (incorporated by reference to Exhibit 4.7 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1991)
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C>
4.10 Indenture dated as of August 1, 1993 between Beverly Enterprises
and Chemical Bank, as Trustee with respect to Beverly
Enterprises' 5 1/2% Convertible Subordinated Debentures due
August 1, 2018, issuable upon exchange of Beverly Enterprises'
$2.75 Cumulative Convertible Exchangeable Preferred Stock (the
"Subordinated Debenture Indenture") (incorporated by reference to
Exhibit 4.10 to Beverly Enterprises' Quarterly Report on Form
10-Q for the quarter ended June 30, 1993)
4.11 Certificate of Designation, Powers, Preferences and Rights, and
the Qualifications, Limitations or Restrictions Thereof, of the
Series of Preferred Stock to be designated $2.75 Cumulative
Convertible Exchangeable Preferred Stock of Beverly Enterprises
(the "$2.75 Certificate of Designation")(incorporated by
reference to Exhibit 4.12 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended June 30, 1993)
4.12 Indenture dated as of April 1, 1993 (the "First Mortgage Bond
Indenture"), among Beverly Enterprises, Delaware Trust Company,
as Corporate Trustee, and Richard N. Smith, as Individual
Trustee, with respect to First Mortgage Bonds (incorporated by
reference to Exhibit 4.1 to Beverly Enterprises' Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993)
4.13 First Supplemental Indenture dated as of April 1, 1993 to the
First Mortgage Bond Indenture, with respect to 8 3/4% First
Mortgage Bonds (Series A) due 2008 (incorporated by reference to
Exhibit 4.2 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended March 31, 1993)
4.14 Second Supplemental Indenture dated as of July 1, 1993
to the First Mortgage Bond Indenture, with respect to 8 5/8%
First Mortgage Bonds (Series B) due 2008 (replaces Exhibit 4.1 to
Beverly Enterprises' Current Report on Form 8-K dated July 15,
1993)(incorporated by reference to Exhibit 4.15 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993)
4.15 Indenture dated as of December 30, 1993 (the "Notes Indenture"),
between Beverly Enterprises, Inc. and Boatmen's Trust Company, as
Trustee, with respect to the Notes (incorporated by reference to
Exhibit 4.2 to Beverly Enterprises' Registration Statement on
Form S-3 filed on November 9, 1993 (File No. 33-50965))
4.16 First Supplemental Indenture dated as of December 30, 1993 to the
Notes Indenture, with respect to 8.75% Notes due 2003
(incorporated by reference to Exhibit 4.4 to Beverly Enterprises'
Current Report on Form 8-K dated January 4, 1994)
4.17 Rights Agreement dated as of September 29, 1994, between Beverly
Enterprises, Inc. and The Bank of New York, as Rights Agent
(incorporated by reference to Exhibit 1 to Beverly Enterprises'
Registration Statement on Form 8-A filed on October 18, 1994)
In accordance with item 601(b)(4)(iii) of Regulation S-K, certain
instruments pertaining to Beverly Enterprises' long-term
obligations have not been filed; copies thereof will be furnished
to the Securities and Exchange Commission upon request.
10.1 * Amended and Restated 1981 Beverly Stock Option Plan (incorporated
by reference to Post-Effective Amendment No. 2 on Form S-8 to
Beverly Enterprises' Registration Statement on Form S-4 filed on
July 31, 1987 (File No. 33-13243))
10.2 * Amended and Restated 1981 Beverly Incentive Stock Option Plan
(incorporated by reference to Post-Effective Amendment No. 2 on
Form S-8 to Beverly Enterprises' Registration Statement on Form
S-4 filed on July 31, 1987 (File No. 33-13243))
10.3 * 1985 Beverly Nonqualified Stock Option Plan (incorporated by
reference to Post-Effective Amendment No. 2 on Form S-8 to
Beverly Enterprises' Registration Statement on Form S-4 filed on
July 31, 1987 (File No. 33-13243))
10.4 * Amended and Restated Beverly Enterprises, Inc. 1993 Long-Term
Incentive Stock Plan (as amended by Amendment No. 1)
(incorporated by reference to Exhibit 10.4 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
10.5 * Beverly Enterprises, Inc. Annual Incentive Plan (incorporated by
reference to Exhibit A to Beverly Enterprises definitive proxy
for the Annual Meeting of Stockholders held May 19, 1994)
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C>
10.6 * Retirement Plan for Outside Directors (incorporated by reference
to Exhibit 10.5 to Beverly Enterprises' Quarterly Report on Form
10-Q for the quarter ended June 30, 1993)
10.7 * Beverly Enterprises, Inc. Non-Employee Directors' Stock Option
Plan (incorporated by reference to Exhibit 4.1 to Beverly
Enterprises' Registration Statement on Form S-8 filed on
September 21, 1994 (File No. 33-55571))
10.8 * Executive Medical Reimbursement Plan (incorporated by reference
to Exhibit 10.5 to Beverly Enterprises' Annual Report on Form
10-K for the year ended December 31, 1987)
10.9 * Amended and Restated Beverly Enterprises, Inc. Executive Life
Insurance Plan and Summary Plan Description (incorporated by
reference to Exhibit 10.7 to Beverly Enterprises' Annual Report
on Form 10-K for the year ended December 31, 1993)
10.10 * Executive Physicals Policy (incorporated by reference to Exhibit
10.8 to Beverly Enterprises' Quarterly Report on Form 10-Q for
the quarter ended June 30, 1993)
10.11 * Amended and Restated Deferred Compensation Plan effective July
18, 1991 (incorporated by reference to Exhibit 10.6 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1991)
10.12 * Executive Retirement Plan (incorporated by reference to Exhibit
10.9 to Beverly Enterprises' Annual Report on Form 10-K for the
year ended December 31, 1987)
10.13 * Amendment No. 1, effective as of July 1, 1991, to the Executive
Retirement Plan (incorporated by reference to Exhibit 10.8 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1991)
10.14 * Amendment No. 2, effective as of December 12, 1991, to the
Executive Retirement Plan (incorporated by reference to Exhibit
10.9 to Beverly Enterprises' Annual Report on Form 10-K for the
year ended December 31, 1991)
10.15 * Amendment No. 3, effective as of July 31, 1992, to the Executive
Retirement Plan (incorporated by reference to Exhibit 10.10 to
Beverly Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1992)
10.16 * Form of Indemnification Agreement between Beverly Enterprises and
its officers, directors and certain of its employees
(incorporated by reference to Exhibit 19.14 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1987)
10.17 * Form of request by Beverly Enterprises to certain of its officers
or directors relating to indemnification rights (incorporated by
reference to Exhibit 19.5 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.18 * Form of request by Beverly Enterprises to certain of its officers
or employees relating to indemnification rights (incorporated by
reference to Exhibit 19.6 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.19 * Agreement dated December 29, 1986 between Beverly Enterprises and
Stephens Inc. (incorporated by reference to Exhibit 10.20 to
Beverly Enterprises' Registration Statement on Form S-1 filed on
January 18, 1990 (File No. 33-33052))
10.20 * Severance Plan for Corporate and Regional Employees effective
December 1, 1989 (incorporated by reference to Exhibit 10.21 to
Amendment No. 1 to Beverly Enterprises' Registration Statement on
Form S-1 filed on February 26, 1990 (File No. 33-33052))
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C>
10.21 * Form of Restricted Stock Performance Agreement dated June 28,
1990 under the 1985 Beverly Nonqualified Stock Option Plan
(incorporated by reference to Exhibit 10.22 to Beverly
Enterprises' Registration Statement on Form S-1 filed on July 30,
1990 (File No. 33-36109))
10.22 * Form of Agreement Concerning Benefits Upon Severance dated as of
September 1, 1990 between Beverly Enterprises and certain
officers of Beverly Enterprises (incorporated by reference to
Exhibit 10.23 to Beverly Enterprises' Registration Statement on
Form S-1 filed on July 30, 1990 (File No. 33-36109))
10.23 * First Amendment to Agreement Concerning Benefits Upon Severance
dated as of April 25, 1993 between Beverly Enterprises and Ronald
C. Kayne (incorporated by reference to Exhibit 10.22 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1993)
10.24 * Beverly Enterprises Company Car Policy effective May 1, 1988
(incorporated by reference to Exhibit 10.18 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.25 * American Transitional Hospitals, Inc. 1993 Nonqualified Stock
Option Plan assumed by Beverly Enterprises, Inc. (incorporated
by reference to Exhibit 10.39 to Beverly Enterprises'
Registration Statement on Form S-4 (Amendment No. 1) filed on
August 5, 1994 (File No. 33-54501))
10.26 * Stock Option Agreement between Beverly Enterprises, Inc. and
Robert C. Crosby dated September 2, 1994 (incorporated by
reference to Exhibit 4.4 to Beverly Enterprises' Registration
Statement on Form S-8 filed on September 21, 1994 (File No.
33-55571))
10.27 Master Lease Document -- General Terms and Conditions dated
December 30, 1985 for Leases between Beverly California and
various subsidiaries thereof as lessees and Beverly Investment
Properties, Inc. as lessor (incorporated by reference to Exhibit
10.12 to Beverly California's Annual Report on Form 10-K for the
year ended December 31, 1985)
10.28 Agreement dated as of December 29, 1986 among Beverly California,
Beverly Enterprises -- Texas, Inc., Stephens Inc. and Real
Properties, Inc. (incorporated by reference to Exhibit 28 to
Beverly California's Current Report on Form 8-K dated December
30, 1986) and letter agreement dated as of July 31, 1987 among
Beverly Enterprises, Beverly California, Beverly Enterprises --
Texas, Inc. and Stephens Inc. with reference thereto
(incorporated by reference to Exhibit 19.13 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1987)
10.29 Credit Agreement, dated as of March 24, 1992, among Beverly
Enterprises, Inc., Beverly California Corporation, the Lenders
listed therein, Bank of Montreal as Co-Agent, and The Long Term
Credit Bank of Japan, Ltd. Los Angeles Agency as Agent (the
"LTCB Credit Agreement") (incorporated by reference to Exhibit
10.2 to Beverly Enterprises' Quarterly Report on Form 10-Q for
the quarter ended March 31, 1992)
10.30 Amendment No. 1 dated as of April 7, 1992 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.3 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
March 31, 1992)
10.31 Second Amendment dated as of May 11, 1992 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.23 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.32 Third Amendment dated as of March 1, 1993 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.24 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.33 Seventh Amendment dated as of May 2, 1994 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.31 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C>
10.34 Master Sale and Servicing Agreement dated as of December 1, 1990
among Beverly Funding Corporation, Beverly California, the
wholly-owned subsidiaries of Beverly Enterprises listed therein,
Beverly Enterprises and certain wholly-owned subsidiaries of
Beverly Enterprises which may become parties thereto
(incorporated by reference to Exhibit 10.27 to the Registration
Statement on Form S-4 of Beverly California, Beverly Enterprises
and the Registrants set forth on the Table of Additional
Co-Registrants filed on February 8, 1991 (File No. 33-38954))
10.35 First Omnibus Amendment to Liquidity Agreement, Depository
Agreement, Pledge and Security Agreement and Master Sale and
Servicing Agreement dated as of July 1, 1991 (incorporated by
reference to Exhibit 10.1 to Beverly Enterprises' Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991)
10.36 Second Amendment to Master Sale and Servicing Agreement dated as
of March 1, 1992 (incorporated by reference to Exhibit 10.4 to
Beverly Enterprises' Quarterly Report on Form 10-Q for the
quarter ended March 31, 1992)
10.37 Second Omnibus Amendment to Master Sale and Servicing Agreement,
Pledge Agreement and Selling Subsidiary Agreements dated as of
September 28, 1992, among Beverly Funding Corporation, Beverly
California Corporation, Beverly Enterprises, Inc., the
wholly-owned subsidiaries of Beverly Enterprises, Inc. listed on
the signature pages and the Banks listed on the signature pages
(incorporated by reference to Exhibit 10 to Beverly Enterprises'
Quarterly Report on Form 10-Q for the quarter ended September 30,
1992)
10.38 Credit Agreement dated as of March 2, 1993 among Beverly
Enterprises, Inc., Beverly California Corporation, the Lenders
listed therein, and the Nippon Credit Bank, Ltd. Los Angeles
Agency as Agent (the "Nippon Credit Agreement") (incorporated by
reference to Exhibit 10.29 to Beverly Enterprises' Annual Report
on Form 10-K for the year ended December 31, 1992)
10.39 Second Amendment dated as of May 19, 1994 to the Nippon Credit
Agreement (incorporated by reference to Exhibit 10.37 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
10.40 Credit Agreement dated as of March 1, 1993 among Beverly
California Corporation, Beverly Enterprises, Inc., the Banks
listed therein, Morgan Guaranty Trust Company of New York as
Issuing Bank and Agent (the "Morgan Credit Agreement")
(incorporated by reference to Exhibit 10.30 to Beverly
Enterprises' Annual Report on Form 10-K for the year ended
December 31, 1992)
10.41 First Amendment dated as of May 3, 1993 to the Morgan Credit
Agreement (incorporated by reference to Exhibit 10.34 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993)
10.42 Second Amendment dated as of September 30, 1993 to the Morgan
Credit Agreement (incorporated by reference to Exhibit 10.35 to
Beverly Enterprises' Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993)
10.43 Third Amendment dated as of April 6, 1994 to the Morgan Credit
Agreement (incorporated by reference to Exhibit 10.41 to Beverly
Enterprises' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994)
10.44 Data Processing Agreement, dated as of August 1, 1992, by and
between Systematics Telecommunications Services, Inc. and
Beverly California Corporation (incorporated by reference to
Exhibit 10 to Beverly Enterprises' Quarterly Report on Form 10-Q
for the quarter ended June 30, 1992)
11.1 Computation of Net Income (Loss) Per Share
27.1 Financial Data Schedule for the nine months ended September 30,
1994.
* Exhibits 10.1 through 10.26 are the management contracts,
compensatory plans, contracts and arrangements in which any
director or named executive officer participates.
</TABLE>
<PAGE> 1
BEVERLY ENTERPRISES, INC.
EXHIBIT 11.1
COMPUTATION OF NET INCOME (LOSS) PER SHARE
THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------
1994 1993
------- --------
(RESTATED)
<S> <C> <C>
PRIMARY:
Income before redemption premium on Series A preferred stock and extraordinary charge $23,496 $ 17,722
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . . -- (20,000)
------- ---------
Income (loss) before extraordinary charge . . . . . . . . . . . . . . . . . . . . . . 23,496 (2,278)
Extraordinary charge, net of income taxes . . . . . . . . . . . . . . . . . . . . . . -- (2,345)
------- ---------
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,496 (4,623)
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,063) (1,625)
------- --------
Net income (loss) applicable to common shares . . . . . . . . . . . . . . . . . . . . $21,433 $ (6,248)
======= ========
Applicable common shares:
Weighted average outstanding shares during the period . . . . . . . . . . . . . . . 85,527 80,970
Assumed conversion of Series A preferred stock . . . . . . . . . . . . . . . . . . -- -- (a)
Weighted average shares issuable upon exercise of common stock equivalents
outstanding (principally stock options) using the treasury stock method . . . . . 1,537 -- (a)
------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,064 80,970
======= ========
Income (loss) per share of common stock:
Before redemption premium on Series A preferred stock and extraordinary charge . . $ 0.25 $ 0.20
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . -- (0.25)
------- --------
Income (loss) before extraordinary charge . . . . . . . . . . . . . . . . . . . . . 0.25 (0.05)
Extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (0.03)
------- --------
Net income (loss) per share of common stock . . . . . . . . . . . . . . . . . . . . $ 0.25 $ (0.08)
======= ========
FULLY DILUTED:
Income before redemption premium on Series A preferred stock and extraordinary charge $23,496 $ 17,722
Reduction of interest and amortization expenses resulting from assumed conversion
of 7.625% convertible subordinated debentures . . . . . . . . . . . . . . . . . . . -- (a) -- (a)
Reduction of interest and amortization expenses resulting from assumed conversion
of 9% convertible subordinated debentures . . . . . . . . . . . . . . . . . . . . . -- (b) -- (a)
Reduction of interest and amortization expenses resulting from assumed conversion
of zero coupon notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (a) -- (a)
Less applicable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
------- --------
Adjusted income before redemption premium on Series A preferred stock and
extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,496 17,722
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . . -- (20,000)
------- --------
Adjusted income (loss) before extraordinary charge . . . . . . . . . . . . . . . . . 23,496 (2,278)
Extraordinary charge, net of income taxes . . . . . . . . . . . . . . . . . . . . . . -- (2,345)
------- --------
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,496 (4,623)
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (1,625)
------- --------
Adjusted net income (loss) applicable to common shares . . . . . . . . . . . . . . . $23,496 $ (6,248)
======= ========
Applicable common shares:
Weighted average outstanding shares during the period . . . . . . . . . . . . . . . 85,527 80,970
Assumed conversion of Series A preferred stock . . . . . . . . . . . . . . . . . . -- -- (a)
Assumed conversion of Series B preferred stock . . . . . . . . . . . . . . . . . . 11,253 -- (a)
Weighted average shares issuable upon exercise of common stock equivalents
outstanding (principally stock options) using the treasury stock method . . . . . 1,832 -- (a)
Assumed conversion of 7.625% convertible subordinated debentures . . . . . . . . . -- (a) -- (a)
Assumed conversion of 9% convertible subordinated debentures . . . . . . . . . . . -- (b) -- (a)
Assumed conversion of zero coupon notes . . . . . . . . . . . . . . . . . . . . . . -- (a) -- (a)
------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,612 80,970
======= ========
Income (loss) per share of common stock:
Before redemption premium on Series A preferred stock and extraordinary charge . . $ 0.24 $ 0.20
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . -- (0.25)
-------- --------
Income (loss) before extraordinary charge . . . . . . . . . . . . . . . . . . . . . 0.24 (0.05)
Extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (0.03)
-------- --------
Net income (loss) per share of common stock . . . . . . . . . . . . . . . . . . . . $ 0.24 $ (0.08)
======== ========
</TABLE>
_________________
(a) Conversion would be anti-dilutive and is therefore not assumed in the
computation of earnings per share of common stock.
(b) The 9% convertible subordinated debentures were converted to common stock
during the third quarter of 1993.
<PAGE> 2
BEVERLY ENTERPRISES, INC.
EXHIBIT 11.1
COMPUTATION OF NET INCOME (LOSS) PER SHARE (CONTINUED)
THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1994 1993
----------- -----------
(RESTATED)
<S> <C>
PRIMARY:
Income before redemption premium on Series A preferred stock and extraordinary charge $ 57,643 $ 41,801
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . . -- (20,000)
----------- -----------
Income before extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . 57,643 21,801
Extraordinary charge, net of income taxes . . . . . . . . . . . . . . . . . . . . . . -- (2,345)
----------- -----------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,643 19,456
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,188) (2,125)
----------- -----------
Net income applicable to common shares . . . . . . . . . . . . . . . . . . . . . . . $ 51,455 $ 17,331
=========== ===========
Applicable common shares:
Weighted average outstanding shares during the period . . . . . . . . . . . . . . . 85,374 78,235
Assumed conversion of Series A preferred stock . . . . . . . . . . . . . . . . . . -- -- (a)
Weighted average shares issuable upon exercise of common stock equivalents
outstanding (principally stock options) using the "treasury stock" method . . . . 1,640 1,543
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,014 79,778
=========== ===========
Income (loss) per share of common stock:
Before redemption premium on Series A preferred stock and extraordinary charge . . . $ 0.59 $ 0.50
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . -- (0.25)
----------- -----------
Income before extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . 0.59 0.25
Extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (0.03)
----------- -----------
Net income per share of common stock . . . . . . . . . . . . . . . . . . . . . . . . $ 0.59 $ 0.22
=========== ===========
FULLY DILUTED:
Income before redemption premium on Series A preferred stock and extraordinary charge $ 57,643 $ 41,801
Reduction of interest and amortization expenses resulting from assumed conversion
of 7.625% convertible subordinated debentures . . . . . . . . . . . . . . . . . . . -- (a) -- (a)
Reduction of interest and amortization expenses resulting from assumed conversion
of 9% convertible subordinated debentures . . . . . . . . . . . . . . . . . . . . . -- (b) -- (a)
Reduction of interest and amortization expenses resulting from assumed conversion
of zero coupon notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (a) -- (a)
Less applicable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
----------- -----------
Adjusted income before redemption premium on Series A preferred stock and
extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,643 41,801
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . . -- (20,000)
----------- -----------
Adjusted income before extraordinary charge . . . . . . . . . . . . . . . . . . . . . 57,643 21,801
Extraordinary charge, net of income taxes . . . . . . . . . . . . . . . . . . . . . . -- (2,345)
----------- -----------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,643 19,456
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (2,125)
----------- -----------
Adjusted net income applicable to common shares . . . . . . . . . . . . . . . . . . . $ 57,643 $ 17,331
=========== ===========
Applicable common shares:
Weighted average outstanding shares during the period . . . . . . . . . . . . . . . 85,374 78,235
Assumed conversion of Series A preferred stock . . . . . . . . . . . . . . . . . . -- -- (a)
Assumed conversion of Series B preferred stock . . . . . . . . . . . . . . . . . . 11,253 -- (a)
Weighted average shares issuable upon exercise of common stock equivalents
outstanding (principally stock options) using the "treasury stock" method . . . . 1,854 1,617
Assumed conversion of 7.625% convertible subordinated debentures . . . . . . . . . -- (a) -- (a)
Assumed conversion of 9% convertible subordinated debentures . . . . . . . . . . . -- (b) -- (a)
Assumed conversion of zero coupon notes . . . . . . . . . . . . . . . . . . . . . . -- (a) -- (a)
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,481 79,852
=========== ===========
Income (loss) per share of common stock:
Before redemption premium on Series A preferred stock and extraordinary charge . . $ 0.59 $ 0.50
Redemption premium on Series A preferred stock . . . . . . . . . . . . . . . . . . -- (0.25)
----------- -----------
Income before extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . 0.59 0.25
Extraordinary charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (0.03)
----------- -----------
Net income per share of common stock . . . . . . . . . . . . . . . . . . . . . . . $ 0.59 $ 0.22
=========== ===========
</TABLE>
- ---------------
(a) Conversion would be anti-dilutive and is therefore not assumed in the
computation of earnings per share of common stock.
(b) The 9% convertible subordinated debentures were converted to common stock
during the third quarter of 1993.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITS QUARTERLY
REPORT ON FORM 10-Q FOR SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 69,344
<SECURITIES> 0
<RECEIVABLES> 442,564<F1>
<ALLOWANCES> 26,272<F2>
<INVENTORY> 61,065
<CURRENT-ASSETS> 608,151
<PP&E> 1,745,397
<DEPRECIATION> 576,257
<TOTAL-ASSETS> 2,065,094
<CURRENT-LIABILITIES> 379,390
<BONDS> 724,181
<COMMON> 8,954
0
150,000
<OTHER-SE> 651,633
<TOTAL-LIABILITY-AND-EQUITY> 2,065,094
<SALES> 2,204,527
<TOTAL-REVENUES> 2,215,236
<CGS> 0
<TOTAL-COSTS> 2,016,869
<OTHER-EXPENSES> 68,359
<LOSS-PROVISION> 0<F3>
<INTEREST-EXPENSE> 43,974
<INCOME-PRETAX> 86,034
<INCOME-TAX> 28,391
<INCOME-CONTINUING> 57,643
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,643
<EPS-PRIMARY> .59
<EPS-DILUTED> .59
<FN>
<F1>Excludes $50,596 of long-term notes receivable.
<F2>Excludes $9,387 of allowance for long-term notes receivable.
<F3>Included in Total Costs line.
</FN>
</TABLE>
