<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1995
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 APRIL 28, 1995 -- 85,733,758
================================================================================
<PAGE> 2
BEVERLY ENTERPRISES, INC.
FORM 10-Q
MARCH 31, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I -- FINANCIAL INFORMATION PAGE
----
<S> <C>
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 . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
1
<PAGE> 3
PART I
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
----------- -----------
(UNAUDITED) (NOTE)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,003 $ 67,964
Accounts receivable-patient, less allowance for doubtful accounts:
1995--$28,054; 1994--$28,293 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479,305 438,743
Accounts receivable-nonpatient, less allowance for doubtful accounts:
1995--$237; 1994--$302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,764 10,896
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,760 5,028
Operating supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,682 60,243
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,539 35,098
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,496 34,365
----------- ----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659,549 652,337
Property and equipment, net of accumulated depreciation and amortization:
1995--$613,115; 1994--$592,158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,218,290 1,200,623
Other assets:
Notes receivable, less allowance for doubtful notes:
1995--$6,182; 1994--$6,429 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,350 41,677
Designated and restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,660 41,939
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,623 245,990
Operating and leasehold rights and licenses, net . . . . . . . . . . . . . . . . . . . . 22,750 23,336
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,170 116,676
----------- ----------
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468,553 469,618
----------- ----------
$ 2,346,392 $2,322,578
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 136,322 $ 117,001
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 --
Accrued wages and related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 129,350 132,066
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,151 10,828
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,249 85,110
Current portion of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . 65,973 60,199
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,035 4,421
----------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434,080 409,625
Long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 901,048 918,018
Deferred income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,618 81,117
Other liabilities and deferred items . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,155 86,574
Commitments and contingencies
Stockholders' equity:
Preferred stock, shares issued and outstanding: 3,000,000 . . . . . . . . . . . . . . . 150,000 150,000
Common stock, shares issued: 1995--89,696,731; 1994--89,620,822 . . . . . . . . . . . . 8,970 8,962
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610,515 609,762
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,141 98,655
Treasury stock, at cost: 3,972,208 shares . . . . . . . . . . . . . . . . . . . . . . . (40,135) (40,135)
----------- ----------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 842,491 827,244
----------- ----------
$ 2,346,392 $2,322,578
=========== ==========
</TABLE>
NOTE: The balance sheet at December 31, 1994 has been derived from the audited
consolidated financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
See accompanying notes.
2
<PAGE> 4
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994
------------- --------------
<S> <C> <C>
Net operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 795,619 $ 716,693
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 3,732
------------ -------------
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799,119 720,425
Costs and expenses:
Operating and administrative:
Wages and related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417,433 387,425
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308,541 273,196
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,549 15,550
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . 25,904 21,695
------------ -------------
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 772,427 697,866
------------ -------------
Income before provision for income taxes . . . . . . . . . . . . . . . . . . . . 26,692 22,559
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,143 7,444
------------ -------------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,549 $ 15,115
============ =============
Net income applicable to common shares . . . . . . . . . . . . . . . . . . . . . $ 14,486 $ 13,052
============ =============
Net income per share of common stock . . . . . . . . . . . . . . . . . . . . . . $ 0.17 $ 0.15
============ =============
Shares used to compute net income per share . . . . . . . . . . . . . . . . . . . 87,304 86,765
============ =============
</TABLE>
Net income applicable to common shares is computed by deducting preferred
stock dividends from net income, when dilutive. Primary and fully diluted
earnings per share for the three months ended March 31, 1995 and 1994 were
computed by dividing net income applicable to common shares 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. Conversion of the Company's
cumulative convertible exchangeable preferred stock, 7.625% convertible
subordinated debentures and zero coupon notes would have an anti-dilutive
effect and, therefore, were not assumed.
See accompanying notes.
3
<PAGE> 5
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,549 $ 15,115
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . 25,904 21,695
Provision for reserves and discounts on patient, notes and other
receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,455 3,945
Amortization of deferred financing costs . . . . . . . . . . . . . . . . . . . . 1,078 1,085
Gains on dispositions of facilities, net . . . . . . . . . . . . . . . . . . . . --- (2,770)
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,070 195
Net decrease in insurance reserves . . . . . . . . . . . . . . . . . . . . . . . (2,028) (435)
Changes in operating assets and liabilities, net of acquisitions
and dispositions:
Accounts receivable - patient . . . . . . . . . . . . . . . . . . . . . . . . (43,172) (16,207)
Operating supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 (579)
Prepaid expenses and other receivables . . . . . . . . . . . . . . . . . . . . (1,612) (2,611)
Accounts payable and other accrued expenses . . . . . . . . . . . . . . . . . 12,890 5,332
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,694 5,259
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (188) (4,177)
---------- ---------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,885 10,732
---------- ---------
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . 20,434 25,847
Cash flows from investing activities:
Proceeds from dispositions of facilities and other assets . . . . . . . . . . . . . 1,032 31,228
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . (12,117) (8,409)
Payments on notes receivable and REMIC investment . . . . . . . . . . . . . . . . . 6,421 4,552
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,040) (23,453)
Construction in progress, net . . . . . . . . . . . . . . . . . . . . . . . . . . . (555) (1,160)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,187) (7,270)
---------- ---------
Net cash used for investing activities . . . . . . . . . . . . . . . . . . . (42,446) (4,512)
Cash flows from financing activities:
Repayments of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . (11,196) (18,592)
Net borrowings under revolving credit agreement . . . . . . . . . . . . . . . . . . 5,000 ---
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . 264 13,251
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (241) (1,135)
Dividends paid on preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . (2,063) (2,063)
Proceeds from designated funds, net . . . . . . . . . . . . . . . . . . . . . . . . 287 2,044
---------- ---------
Net cash used for financing activities . . . . . . . . . . . . . . . . . . . (7,949) (6,495)
---------- ---------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . (29,961) 14,840
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . 67,964 77,058
---------- ---------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . $ 38,003 $ 91,898
========== =========
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) . . . . . . . . . . . . . . . . . . . . . . . . $ 19,148 $ 13,071
Income taxes (net of refunds) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,379 1,990
</TABLE>
See accompanying notes.
4
<PAGE> 6
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
(i) The condensed consolidated financial statements included herein have
been prepared by the Company, without audit, and include all adjustments 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 months ended
March 31, 1995 and 1994 pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures in 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 1994
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
The results of operations for the three months ended March 31, 1995 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.
Prior year amounts have been restated to reflect pooling of interests
accounting treatment for the 1994 merger of American Transitional Hospitals,
Inc. ("ATH"). Certain prior year amounts have been reclassified to conform
with the 1995 presentation.
(ii) The provisions for income taxes for the three months ended March 31,
1995 and 1994 were based on estimated annual tax rates of 38% and 33%, as
restated, respectively. The Company's effective tax rates in 1995 and 1994
were 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 1995 annual effective tax rate increased to 38% compared to
33% in 1994 as a result of a substantial utilization of certain tax credit
carryforwards in 1994 and prior years. The provisions for income taxes consist
of the following for the three months ended March 31 (in thousands):
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Federal:
Current . . . . . . . . . . . . . . . . . . . . . . . $ 7,114 $ 5,948
Deferred . . . . . . . . . . . . . . . . . . . . . . . 894 (308)
State:
Current . . . . . . . . . . . . . . . . . . . . . . . 1,959 1,301
Deferred . . . . . . . . . . . . . . . . . . . . . . . 176 503
-------- ---------
$ 10,143 $ 7,444
======== =========
</TABLE>
(iii) During the three months ended March 31, 1995, the Company purchased
three previously leased nursing facilities (447 beds) and certain other assets
for approximately $12,100,000 cash and approximately $700,000 security and
other deposits. The Company does not operate two of such facilities which were
subleased to another nursing home operator in a 1993 transaction and currently
remain under lease.
In December 1994, the Company entered into an agreement to acquire Pharmacy
Management Services, Inc. ("PMSI") in exchange for shares of the Company's $.10
par value common stock ("Common Stock"). PMSI is a leading nationwide provider
of medical cost containment and managed care services to workers' compensation
payors and claimants. The Company has filed a Registration Statement on Form
S-4 with the Securities and Exchange Commission to register 14,959,209 shares of
Common Stock, all or a portion of which will be used for such acquisition. The
transaction is subject to the satisfaction of certain conditions, including the
receipt of PMSI stockholder approval. The acquisition will be accounted for as a
purchase and is expected to close during the second quarter of 1995.
5
<PAGE> 7
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1995
(UNAUDITED)
On April 6, 1995, the Company announced that its Board of Directors had, on
that date, preliminarily approved a plan to spin off to its stockholders 80% or
more of the common stock of Pharmacy Corporation of America ("PCA"), a
wholly-owned subsidiary of the Company which provides institutional pharmacy
services to nursing homes, hospitals and other institutional customers
throughout the United States. The spin-off is intended to be structured as a
tax-free distribution to the Company's stockholders under Section 355 of the
Internal Revenue Code of 1986, as amended. The spin-off is subject to numerous
conditions and events which have not been met or determined as of the date
hereof, including obtaining final approval of the spin-off plan by the
Company's Board of Directors, obtaining the contemplated fundings described
below, obtaining regulatory and other third party approvals and confirmation by
independent advisors of the intended tax treatment of the transaction. The
Company does not presently intend to seek a ruling from the Internal Revenue
Service concerning the proposed spin-off. As of the date hereof, no conversion
or distribution ratio has been established by the Company with respect to a
specific number of shares of common stock of PCA to which each stockholder of
the Company would be entitled to receive in the distribution. The Company
anticipates that the record date for determining those stockholders of the
Company who will be entitled to participate in the distribution will occur by
the end of 1995.
In connection with the proposed spin-off transaction, on April 13, 1995, the
Company announced that it was also contemplating a public offering of up to
19.9% of PCA's common stock prior to the distribution of the remainder of such
stock to the Company's stockholders. The Company also announced that PCA may
borrow up to $275,000,000 from banks and other institutional lenders. Neither
the amount of proceeds from any future public offering of PCA's common stock
nor the amount or terms of any anticipated PCA indebtedness is determinable at
this time. It is expected, however, that substantially all of PCA's assets
would be pledged to secure the borrowings. Although no commitments have been
sought or received by the Company or PCA as of the date hereof, the Company
has held informal discussions with various prospective lenders and has received
informal indications from them that the financing appears feasible. Proceeds
from PCA's borrowings and the public offering of PCA's common stock, if
successfully completed, would be used to repay intercompany indebtedness to the
Company, with any remaining proceeds to be paid to the Company as a dividend.
While no determination has been made by the Company as to the specific use of
any cash proceeds received by it from these proposed transactions, such
proceeds may be used to repay debt of the Company, finance acquisitions or
other capital investments, repurchase the Company's stock or for other
corporate purposes. The offering of PCA's common stock would be subject to
customary regulatory and lender approvals, as well as market conditions at the
time, and the proposed PCA borrowings would be subject to the execution of
definitive agreements, the approval of the Company's and PCA's respective
Boards of Directors, and other conditions customary in similar transactions.
There can be no assurances, however, that a public offering of PCA's common
stock will be successfully completed or that PCA will be able to obtain any
funds through borrowings with third parties. Moreover, the Company's Board of
Directors has only preliminarily approved the concept of the spin-off, and has
made no commitment to a formal plan to dispose of the stock of PCA at the
present time. The Company intends to submit to its stockholders later in 1995
the plan to spin-off PCA, and to solicit approval of the proposed spin-off from
its stockholders at that time. Because of the material uncertainties associated
with the proposed spin-off of PCA and related transactions as described above,
there can be no assurances that any of these transactions will be concluded or,
if ultimately concluded, will not be materially different from those described
above.
(iv) 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.
(v) 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"). Effective
January 1, 1995, Beverly California changed its name to Beverly Health and
Rehabilitation Services, Inc. ("BHRS") and distributed certain of its
wholly-owned subsidiaries to Beverly Delaware in an effort to better focus
management's attention on specific services delivered by the Company within the
long-term health care arena. Such subsidiaries include, among others, PCA,
ATH, Beverly Indemnity, Ltd. and Beverly REMIC Depositor, Inc. Beverly
Delaware (the parent) provides financial, administrative and legal services to
BHRS for which BHRS is charged management fees.
The following summarized unaudited financial information concerning BHRS is
being reported because BHRS's 7.625% convertible subordinated debentures due
March 2003 and its zero coupon notes (collectively, the "Debt Securities") are
publicly held. Beverly Delaware is co-obligor of the Debt Securities. Summary
unaudited financial information for BHRS is as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1995 MARCH 31, 1994
------------------ ------------------
<S> <C> <C>
Total revenues . . . . . . . . . . . . . . $ 702,738 $ 720,678
Total costs and expenses . . . . . . . . . 681,832 698,167
Net income . . . . . . . . . . . . . . . . 12,652 15,082
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
MARCH 31, 1995 DECEMBER 31, 1994
-------------- -----------------
<S> <C> <C>
Current assets . . . . . . . . . . . . . . $ 434,589 $ 577,307
Long-term assets . . . . . . . . . . . . . 1,414,072 1,695,216
Current liabilities . . . . . . . . . . . 278,090 402,463
Long-term liabilities . . . . . . . . . . 861,534 1,071,276
</TABLE>
6
<PAGE> 8
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1995
(UNAUDITED)
OPERATING RESULTS
FIRST QUARTER 1995 COMPARED TO FIRST QUARTER 1994
Net income was $16,549,000 for the first quarter of 1995, as compared to net
income of $15,115,000, as restated per discussion below, for the same period in
1994. Income before provision for income taxes was $26,692,000 for the first
quarter of 1995, as compared to $22,559,000, as restated, for the same period
in 1994. The Company's annual effective tax rate increased to 38% in 1995
compared to 33% in 1994 as a result of a substantial utilization of certain tax
credit carryforwards in 1994 and prior years. The Company's consolidated
financial statements for 1994 and prior periods have been restated to reflect
the 1994 merger of American Transitional Hospitals, Inc. ("ATH"), which was
accounted for as a pooling of interests.
Net operating revenues and operating and administrative costs increased
approximately $78,900,000 and $65,400,000, respectively, for the first quarter
of 1995, as compared to the same period in 1994. 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 March 31, 1995 and 1994 ("same facility operations") of
approximately $60,100,000 and $45,600,000, respectively; increases in net
operating revenues and operating and administrative costs of approximately
$50,100,000 and $47,300,000, respectively, related to the operations of ATH and
the acquisitions of Insta-Care and Synetic in 1994; and decreases in net
operating revenues and operating and administrative costs of approximately
$31,300,000 and $27,500,000, respectively, due to the disposition of, or lease
terminations on, 77 facilities in 1994.
The increase in net operating revenues for same facility operations for the
first quarter of 1995, as compared to the same period in 1994, was due to the
following: approximately $31,000,000 due primarily to increases in Medicaid
room and board rates, and to a lesser extent, private and Medicare room and
board rates; approximately $15,800,000 due to increased ancillary revenues as
a result of providing additional ancillary services to the Company's Medicare
and private-pay patients; and approximately $15,200,000 due primarily to
increases in pharmacy-related revenues and various other items. These
increases in net operating revenues were partially offset by approximately
$1,900,000 due to a decrease in same facility occupancy to 88.9% for the first
quarter of 1995, as compared to 89.2% for the same period in 1994.
The increase in operating and administrative costs for same facility
operations for the first quarter of 1995, as compared to the same period in
1994, was due to the following: approximately $32,000,000 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 increased patient acuity;
approximately $6,800,000 due primarily to additional ancillary costs incurred
(excluding wages and related expenses) and increased supplies purchased to meet
the needs of the Company's higher acuity patients; and approximately
$6,800,000 due primarily to increases in pharmacy-related costs and various
other items.
Ancillary revenues are derived from providing services to residents beyond
room, board and custodial care. These services include occupational, physical,
speech, respiratory and IV therapy, as well as, sales of pharmaceuticals and
other services. The Company's overall ancillary revenues for the first quarter
of 1995 were approximately $234,300,000 and represented 29.4% of net operating
revenues, as compared to approximately $170,200,000 of ancillary revenues for
the same period in 1994 which represented 23.7% of net operating revenues for
the first quarter of 1994. Although the Company is pursuing further growth of
ancillary revenues through expansion of specialty services, such as
rehabilitation therapy and sales of pharmaceuticals, there can be no assurance
that such growth will continue. See " -- Liquidity and Capital Resources"
below. Growth in ancillary revenues, as well as increases in Medicare census,
have also resulted in higher costs for the Company due to the higher acuity
services being provided to these
7
<PAGE> 9
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
MARCH 31, 1995
(UNAUDITED)
patients. The Company's overall ancillary costs (excluding wages and related
expenses) were approximately $94,500,000 for the first quarter of 1995,
compared to approximately $95,700,000 for the same period in 1994.
Interest expense increased approximately $5,000,000 as compared to the same
period in 1994 primarily due to additional interest related to the issuance and
assumption of approximately $243,000,000 of long-term obligations during 1994
in conjunction with certain acquisitions. Depreciation and amortization
expense increased approximately $4,200,000 as compared to the same period in
1994 primarily due to acquisitions, the opening of newly constructed facilities
and capital additions and improvements, partially offset by a decrease due to
the disposition of or lease terminations on certain nursing 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 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.
Health care system reform and concerns over rising Medicare costs continue to
be high priorities for the federal and certain state governments. Although no
comprehensive health care or Medicare reform legislation has been implemented,
the active discussion and issues raised by the Clinton Administration, Congress
and various other groups have impacted the health care delivery system.
Pressures to contain costs and cover a larger percentage of the population have
heightened public awareness and scrutiny over the health care market. Reform
proposals still under consideration include insurance market reforms to
increase the availability of group health insurance to small businesses,
requirements that all businesses offer health coverage to their employees and
the creation of a single government health insurance plan that would cover all
citizens. Various discussions and proposals recommending cuts to the Medicare
program, as well as limiting the rate of increase of Medicare expenditures, are
also at the forefront of public debate. These proposals, as well as 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 and their
impact on the Company. There can be no assurance that any health care reform
or other changes within the health care market will not adversely affect the
Company's financial position, results of operations or cash flows.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995, the Company had approximately $38,003,000 in cash and cash
equivalents and net working capital of approximately $225,469,000. The Company
anticipates that approximately $26,031,000 of its existing cash at March 31,
1995, 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 approximately $98,000,000 of
unused commitments under its Revolver/Letter of Credit Facility (the
"Revolver/LOC Facility") as of March 31, 1995.
8
<PAGE> 10
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
MARCH 31, 1995
(UNAUDITED)
Net cash provided by operating activities for the first quarter of 1995 was
approximately $20,434,000, a decrease of approximately $5,413,000 from the
prior year due primarily to an increase in accounts receivable as a result of
increased billing rates and changes in Medicare billing requirements. Net cash
used for investing and financing activities was approximately $42,446,000 and
$7,949,000, respectively, for the first quarter of 1995. The Company primarily
used cash and cash equivalents on hand at January 1, 1995, cash generated from
operations during the first quarter of 1995 and borrowings under its revolving
credit agreement to fund capital expenditures and construction totaling
approximately $28,595,000, to repay approximately $11,196,000 of long-term
obligations and to fund acquisitions of approximately $12,117,000.
In December 1994, the Company entered into an agreement to acquire Pharmacy
Management Services, Inc. ("PMSI") in exchange for shares of Common Stock.
PMSI is a leading nationwide provider of medical cost containment and managed
care services to workers' compensation payors and claimants. The Company has
filed a Registration Statement on Form S-4 with the Securities and Exchange
Commission to register 14,959,209 shares of Common Stock, all or a portion of
which will be used for such acquisition. The transaction is subject to the
satisfaction of certain conditions, including receipt of PMSI stockholder
approval. The acquisition will be accounted for as a purchase and is expected
to close during the second quarter of 1995.
On April 6, 1995, the Company announced that its Board of Directors had, on
that date, preliminarily approved a plan to spin off to its stockholders
80% or more of the common stock of Pharmacy Corporation of America ("PCA"), a
wholly-owned subsidiary of the Company which provides institutional pharmacy
services to nursing homes, hospitals, and other institutional customers
throughout the United States. The spin-off is intended to be structured as a
tax-free distribution to the Company's stockholders under Section 355 of the
Internal Revenue Code of 1986, as amended. The spin-off is subject to numerous
conditions and events which have not been met or determined as of the date
hereof, including obtaining final approval of the spin-off plan by the
Company's Board of Directors, obtaining the contemplated fundings described
below, obtaining regulatory and other third party approvals and confirmation by
independent advisors of the intended tax treatment of the transaction. The
Company does not presently intend to seek a ruling from the Internal Revenue
Service concerning the proposed spin-off. As of the date hereof, no conversion
or distribution ratio has been established by the Company with respect to a
specific number of shares of common stock of PCA to which each stockholder of
the Company would be entitled to receive in the distribution. The Company
anticipates that the record date for determining those stockholders of the
Company who will be entitled to participate in the distribution will occur by
the end of 1995.
In connection with the proposed spin-off transaction, on April 13, 1995, the
Company announced that it was also contemplating a public offering of up to
19.9% of PCA's common stock prior to the distribution of the remainder of such
stock to the Company's stockholders. The Company also announced that PCA may
borrow up to $275,000,000 from banks and other institutional lenders. Neither
the amount of proceeds from any future public offering of PCA's common stock
nor the amount or terms of any anticipated PCA indebtedness is determinable at
this time. It is expected, however, that substantially all of PCA's assets
would be pledged to secure the borrowings. Although no commitments have been
sought or received by the Company or PCA as of the date hereof, the Company has
held informal discussions with various prospective lenders and has received
informal indications from them that the financing appears feasible. Proceeds
from PCA's borrowings and the public offering of PCA's common stock, if
successfully completed, would be used to repay intercompany indebtedness to the
Company, with any remaining proceeds to be paid to the Company as a dividend.
While no determination has been made by the Company as to the specific use of
any cash proceeds received by it from these proposed transactions, such
proceeds may be used to repay debt of the Company, finance acquisitions or
other capital investments, repurchase the Company's stock or for other
corporate purposes. The offering of PCA's common stock would be subject to
customary regulatory and lender approvals, as well as market conditions at the
time, and the proposed PCA borrowings would be subject to the execution of
definitive agreements, the approval of the Company's and PCA's respective
Boards of Directors, and other conditions customary in similar transactions.
There can be no assurances, however, that a public offering of PCA's common
stock will be successfully completed or that PCA will be able to obtain any
funds through borrowings with third parties. Moreover, the Company's Board of
Directors has only preliminarily approved the concept of the spin-off, and has
made no commitment to a formal plan to dispose of the stock of PCA at the
present time. The Company intends to submit to its stockholders later in 1995
the plan to spin off PCA, and to solicit approval of the proposed spin-off from
its stockholders at that time. Because of the material uncertainties associated
with the proposed spin-off of PCA and related transactions as described above,
there can be no assurances that any of these transactions will be concluded or,
if ultimately concluded, will not be materially different from those described
above.
The Company believes that its existing cash and cash equivalents, working
capital from operations, borrowings under its banking arrangements, issuance of
certain debt securities and refinancings of certain existing indebtedness will
be adequate to repay its debts due within one year of approximately
$65,973,000, to make normal recurring capital additions and improvements for
the twelve months ending March 31, 1995 of approximately $118,000,000, to make
selective acquisitions, including the purchase of previously leased facilities,
and to meet working capital requirements.
9
<PAGE> 11
PART II
BEVERLY ENTERPRISES, INC.
OTHER INFORMATION
MARCH 31, 1995
(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
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Indenture dated as of December 27, 1990 (the "Senior Secured Note Indenture"), among Beverly California,
Beverly Enterprises, Inc. 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, Inc. 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, Inc.'s 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, Inc.'s 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, Inc.'s 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, Inc.'s Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993)
4.6 Supplemental Indenture No. 5, dated as of November 1, 1994, to the Senior Secured Note Indenture (incorporated
by reference to Exhibit 4.6 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on
February 13, 1995 (File No. 33-57663))
4.7 Supplemental Indenture No. 6, dated as of December 30, 1994, to the Senior Secured Note Indenture
(incorporated by reference to Exhibit 4.7 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4
filed on February 13, 1995 (File No. 33-57663))
4.8 Subsidiary Guaranty dated as of December 27, 1990 by Beverly Enterprises, Inc., Beverly California Corporation
and the Subsidiary Guarantors listed therein (incorporated by reference to Exhibit 4.3 to the Registration
Statement on Form S-4 of Beverly California Corporation, Beverly Enterprises, Inc. and the Registrants set
forth on the Table of Additional Co-Registrants filed on February 8, 1991 (File No. 33-38954))
4.9 Subsidiary Guaranty dated as of April 1, 1991 by Beverly Enterprises, Inc., Beverly California Corporation and
the Subsidiary Guarantors listed therein (incorporated by reference to Exhibit 4.5 to Beverly Enterprises,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
4.10 Subsidiary Guaranty dated as of October 31, 1991 by Beverly Enterprises, Inc., Beverly California Corporation
and the Subsidiary Guarantors listed therein (incorporated by reference to Exhibit 4.6 to Beverly Enterprises,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.11 Subsidiary Guaranty dated as of December 30, 1991 by Beverly Enterprises, Inc., Beverly California Corporation
and Beverly Indemnity, Inc. as Subsidiary Guarantor (incorporated by reference to Exhibit 4.7 to Beverly
Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
4.12 Indenture dated as of August 1, 1993 between Beverly Enterprises, Inc. and Chemical Bank, as Trustee, with
respect to Beverly Enterprises, Inc.'s 5 1/2% Convertible Subordinated Debentures due August 1, 2018, issuable
upon exchange of Beverly Enterprises, Inc.'s $2.75 Cumulative Convertible Exchangeable Preferred Stock (the
"Subordinated Debenture Indenture") (incorporated by reference to Exhibit 4.10 to Beverly Enterprises, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993)
4.13 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, Inc. (the "$2.75 Certificate of
Designation")(incorporated by reference to Exhibit 4.12 to Beverly Enterprises, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1993)
4.14 Indenture dated as of April 1, 1993 (the "First Mortgage Bond Indenture"), among Beverly Enterprises, Inc.,
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, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993)
4.15 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, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 1993)
4.16 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,
Inc.'s Current Report on Form 8-K dated July 15, 1993)(incorporated by reference to Exhibit 4.15 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1993)
4.17 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, Inc.'s Registration Statement on Form S-3 filed on November 9, 1993 (File No. 33-50965))
4.18 First Supplemental Indenture dated as of December 30, 1993 to the Notes Indenture, with respect to 8 3/4%
Notes due 2003 (incorporated by reference to Exhibit 4.4 to Beverly Enterprises, Inc.'s Current Report on Form
8-K dated January 4, 1994)
4.19 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, Inc.'s 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 Incentive Stock Option Plan (incorporated by reference to Post-Effective
Amendment No. 2 on Form S-8 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on
July 31, 1987 (File No. 33-13243))
10.2* 1985 Beverly Nonqualified Stock Option Plan (incorporated by reference to Post-Effective Amendment No. 2 on
Form S-8 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on July 31, 1987
(File No. 33-13243))
10.3* Amended and Restated Beverly Enterprises, Inc. 1993 Long-Term Incentive Stock Plan (the "1993 Plan") (as
amended by Amendment No. 1) (incorporated by reference to Exhibit 10.4 to Beverly Enterprises, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994)
10.4* Beverly Enterprises, Inc. Annual Incentive Plan (incorporated by reference to Exhibit 10.4 to Beverly
Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.5* Form of Other Stock Unit Agreement under the 1993 Plan (incorporated by reference to Exhibit 10.5 to Beverly
Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.6* Retirement Plan for Outside Directors (incorporated by reference to Exhibit 10.5 to Beverly Enterprises,
Inc.'s 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, Inc.'s Registration Statement on Form S-8 filed on September 21, 1994 (File No. 33-
55571))
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.8* Executive Medical Reimbursement Plan (incorporated by reference to Exhibit 10.5 to Beverly Enterprises, Inc.'s
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 (the
"Executive Life Plan") (incorporated by reference to Exhibit 10.7 to Beverly Enterprises, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1993)
10.10* Amendment No. 1, effective September 29, 1994, to the Executive Life Plan (incorporated by reference to
Exhibit 10.10 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.11* Executive Physicals Policy (incorporated by reference to Exhibit 10.8 to Beverly Enterprises, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended June 30, 1993)
10.12* Amended and Restated Deferred Compensation Plan effective July 18, 1991 (incorporated by reference to Exhibit
10.6 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
10.13* Amendment No. 1, effective September 29, 1994, to the Deferred Compensation Plan (incorporated by reference to
Exhibit 10.13 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.14* Executive Retirement Plan (incorporated by reference to Exhibit 10.9 to Beverly Enterprises, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1987)
10.15* Amendment No. 1, effective as of July 1, 1991, to the Executive Retirement Plan (incorporated by reference to
Exhibit 10.8 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
10.16* Amendment No. 2, effective as of December 12, 1991, to the Executive Retirement Plan (incorporated by
reference to Exhibit 10.9 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1991)
10.17* Amendment No. 3, effective as of July 31, 1992, to the Executive Retirement Plan (incorporated by reference to
Exhibit 10.10 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.18* Amendment No. 4, effective as of January 1, 1993, to the Executive Retirement Plan (incorporated by reference
to Exhibit 10.18 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1994)
10.19* Amendment No. 5, effective as of September 29, 1994, to the Executive Retirement Plan (incorporated by
reference to Exhibit 10.19 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1994)
10.20* Form of Indemnification Agreement between Beverly Enterprises, Inc. and its officers, directors and certain of
its employees (incorporated by reference to Exhibit 19.14 to Beverly Enterprises, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1987)
10.21* Form of request by Beverly Enterprises, Inc. to certain of its officers or directors relating to
indemnification rights (incorporated by reference to Exhibit 19.5 to Beverly Enterprises, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.22* Form of request by Beverly Enterprises, Inc. to certain of its officers or employees relating to
indemnification rights (incorporated by reference to Exhibit 19.6 to Beverly Enterprises, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.23* Agreement dated December 29, 1986 between Beverly Enterprises, Inc. and Stephens Inc. (incorporated by
reference to Exhibit 10.20 to Beverly Enterprises, Inc.'s Registration Statement on Form S-1 filed on
January 18, 1990 (File No. 33-33052))
10.24* 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, Inc. Registration Statement on Form S-1 filed on
February 26, 1990 (File No. 33-33052))
10.25* 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, Inc.'s Registration Statement
on Form S-1 filed on July 30, 1990 (File No. 33-36109))
10.26* Form of Agreement Concerning Benefits Upon Severance dated as of September 1, 1990 between Beverly
Enterprises, Inc. and certain officers of Beverly Enterprises, Inc. (incorporated by reference to
Exhibit 10.23 to Beverly Enterprises, Inc.'s Registration Statement on Form S-1 filed on July 30, 1990 (File
No. 33-36109))
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.27* First Amendment to Agreement Concerning Benefits Upon Severance dated as of April 25, 1993 between Beverly
Enterprises, Inc. and Ronald C. Kayne (incorporated by reference to Exhibit 10.22 to Beverly Enterprises,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1993)
10.28* Form of Employment Agreement, made as of September 29, 1994, between Beverly Enterprises, Inc. and David R.
Banks (incorporated by reference to Exhibit 10.28 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1994)
10.29* Form of Change In Control Severance Agreement, made as of September 29, 1994, between Beverly Enterprises,
Inc. and its Executive Vice Presidents (incorporated by reference to Exhibit 10.29 to Beverly Enterprises,
Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.30* Form of Change In Control Severance Agreement, made as of September 29, 1994, between Beverly Enterprises,
Inc. and certain of its officers (incorporated by reference to Exhibit 10.30 to Beverly Enterprises, Inc.'s
Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.31* Beverly Enterprises Company Car Policy effective May 1, 1988 (incorporated by reference to Exhibit 10.18 to
Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.32* American Transitional Hospitals, Inc. 1993 Nonqualified Stock Option Plan assumed by Beverly Enterprises, Inc.
(incorporated by reference to Exhibit 10.39 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4
(Amendment No. 1) filed on August 5, 1994 (File No. 33-54501))
10.33* 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, Inc.'s Registration Statement on Form S-8
filed on September 21, 1994 (File No. 33-55571))
10.34 Master Lease Document -- General Terms and Conditions dated December 30, 1985 for Leases between Beverly
California Corporation and various subsidiaries thereof as lessees and Beverly Investment Properties, Inc. as
lessor (incorporated by reference to Exhibit 10.12 to Beverly California Corporation's Annual Report on
Form 10-K for the year ended December 31, 1985)
10.35 Agreement dated as of December 29, 1986 among Beverly California Corporation, Beverly Enterprises -- Texas,
Inc., Stephens Inc. and Real Properties, Inc. (incorporated by reference to Exhibit 28 to Beverly California
Corporation's Current Report on Form 8-K dated December 30, 1986) and letter agreement dated as of
July 31, 1987 among Beverly Enterprises, Inc., Beverly California Corporation, Beverly Enterprises -- Texas,
Inc. and Stephens Inc. with reference thereto (incorporated by reference to Exhibit 19.13 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1987)
10.36 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, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 1992)
10.37 Amendment No. 1 dated as of April 7, 1992 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.3 to Beverly Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 1992)
10.38 Second Amendment dated as of May 11, 1992 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.23 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.39 Third Amendment dated as of March 1, 1993 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.24 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.40 Seventh Amendment dated as of May 2, 1994 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.31 to Beverly Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1994)
10.41 Eighth Amendment dated as of November 1, 1994, to the LTCB Credit Agreement (incorporated by reference to
Exhibit 10.41 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.42 Ninth Amendment dated as of November 9, 1994 to the LTCB Credit Agreement (incorporated by reference to
Exhibit 10.42 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.43 Tenth Amendment dated as of December 6, 1994 to the LTCB Credit Agreement (incorporated by reference to
Exhibit 10.43 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.44 Eleventh Amendment dated as of March 27, 1995 to the LTCB Credit Agreement
10.45 First Amendment and Restatement dated as of December 1, 1994 to Master Sale and Servicing Agreement dated as
of December 1, 1990 among Beverly Funding Corporation, Beverly California Corporation, the wholly-owned
subsidiaries of Beverly Enterprises, Inc. listed therein, Beverly Enterprises, Inc. and certain wholly-owned
subsidiaries of Beverly Enterprises, Inc. which may become parties thereto (incorporated by reference to
Exhibit 10.44 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.46 Trust Indenture dated as of December 1, 1994 from Beverly Funding Corporation, as Issuer, to Chemical Bank, as
Trustee (the "Chemical Indenture") (incorporated by reference to Exhibit 10.45 to Beverly Enterprises, Inc.'s
Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.47 Series Supplement dated as of December 1, 1994 to the Chemical Indenture (incorporated by reference to Exhibit
10.46 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No.
33-57663))
10.48 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, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1992)
10.49 Second Amendment dated as of May 19, 1994 to the Nippon Credit Agreement (incorporated by reference to Exhibit
10.37 to Beverly Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1994)
10.50 Third Amendment dated as of November 1, 1994 to the Nippon Credit Agreement (incorporated by reference to
Exhibit 10.49 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.51 Fourth Amendment dated as of November 9, 1994 to the Nippon Credit Agreement (incorporated by reference to
Exhibit 10.50 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.52 Fifth Amendment dated as of December 30, 1994 to the Nippon Credit Agreement
10.53 Credit Agreement dated as of November 1, 1994 among Beverly California Corporation, Beverly Enterprises, Inc.,
the Banks listed therein, and Morgan Guaranty Trust Company of New York, as Issuing Bank and as Agent (the
"Morgan Credit Agreement") (incorporated by reference to Exhibit 10.51 to Beverly Enterprises, Inc.'s
Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.54 First Amendment dated as of December 30, 1994 to the Morgan Credit Agreement (incorporated by reference to
Exhibit 10.52 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.55 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,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1992)
10.56 Form of Employment Agreement to be executed by Robert C. Crosby and ATH at the time ATH became a wholly-owned
subsidiary of Beverly Enterprises, Inc. (incorporated by reference to Exhibit 10.38 to Beverly Enterprises,
Inc.'s Registration Statement on Form S-4 filed on July 8, 1994 (File No. 33-54501))
10.57 Form of Irrevocable Trust Agreement for the Beverly Enterprises, Inc. Executive Benefits Plan (incorporated by
reference to Exhibit 10.55 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February
13, 1995 (File No. 33-57663))
11.1 Computation of Net Income Per Share
27.1 Financial Data Schedule for the three months ended March 31, 1995
</TABLE>
* Exhibits 10.1 through 10.33 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
On February 10, 1995, the Company filed an amendment on Form 8-K/A,
which reported under Item 5 the proposed merger with PMSI and filed under Item
7 the unaudited pro forma combined financial statements giving effect to the
proposed merger and the acquisitions of Insta-Care and Synetic.
14
<PAGE> 16
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: May 12, 1995 By: SCOTT M. TABAKIN
-----------------------------------
Scott M. Tabakin
Vice President, Controller and
Chief Accounting Officer
15
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Indenture dated as of December 27, 1990 (the "Senior Secured Note Indenture"), among Beverly California,
Beverly Enterprises, Inc. 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, Inc. 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, Inc.'s 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, Inc.'s 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, Inc.'s 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, Inc.'s Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993)
4.6 Supplemental Indenture No. 5, dated as of November 1, 1994, to the Senior Secured Note Indenture (incorporated
by reference to Exhibit 4.6 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on
February 13, 1995 (File No. 33-57663))
4.7 Supplemental Indenture No. 6, dated as of December 30, 1994, to the Senior Secured Note Indenture
(incorporated by reference to Exhibit 4.7 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4
filed on February 13, 1995 (File No. 33-57663))
4.8 Subsidiary Guaranty dated as of December 27, 1990 by Beverly Enterprises, Inc., Beverly California Corporation
and the Subsidiary Guarantors listed therein (incorporated by reference to Exhibit 4.3 to the Registration
Statement on Form S-4 of Beverly California Corporation, Beverly Enterprises, Inc. and the Registrants set
forth on the Table of Additional Co-Registrants filed on February 8, 1991 (File No. 33-38954))
4.9 Subsidiary Guaranty dated as of April 1, 1991 by Beverly Enterprises, Inc., Beverly California Corporation and
the Subsidiary Guarantors listed therein (incorporated by reference to Exhibit 4.5 to Beverly Enterprises,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
4.10 Subsidiary Guaranty dated as of October 31, 1991 by Beverly Enterprises, Inc., Beverly California Corporation
and the Subsidiary Guarantors listed therein (incorporated by reference to Exhibit 4.6 to Beverly Enterprises,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.11 Subsidiary Guaranty dated as of December 30, 1991 by Beverly Enterprises, Inc., Beverly California Corporation
and Beverly Indemnity, Inc. as Subsidiary Guarantor (incorporated by reference to Exhibit 4.7 to Beverly
Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
4.12 Indenture dated as of August 1, 1993 between Beverly Enterprises, Inc. and Chemical Bank, as Trustee, with
respect to Beverly Enterprises, Inc.'s 5 1/2% Convertible Subordinated Debentures due August 1, 2018, issuable
upon exchange of Beverly Enterprises, Inc.'s $2.75 Cumulative Convertible Exchangeable Preferred Stock (the
"Subordinated Debenture Indenture") (incorporated by reference to Exhibit 4.10 to Beverly Enterprises, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993)
4.13 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, Inc. (the "$2.75 Certificate of
Designation")(incorporated by reference to Exhibit 4.12 to Beverly Enterprises, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1993)
4.14 Indenture dated as of April 1, 1993 (the "First Mortgage Bond Indenture"), among Beverly Enterprises, Inc.,
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, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993)
4.15 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, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 1993)
4.16 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,
Inc.'s Current Report on Form 8-K dated July 15, 1993)(incorporated by reference to Exhibit 4.15 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1993)
4.17 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, Inc.'s Registration Statement on Form S-3 filed on November 9, 1993 (File No. 33-50965))
4.18 First Supplemental Indenture dated as of December 30, 1993 to the Notes Indenture, with respect to 8 3/4%
Notes due 2003 (incorporated by reference to Exhibit 4.4 to Beverly Enterprises, Inc.'s Current Report on Form
8-K dated January 4, 1994)
4.19 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, Inc.'s 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 Incentive Stock Option Plan (incorporated by reference to Post-Effective
Amendment No. 2 on Form S-8 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on
July 31, 1987 (File No. 33-13243))
10.2* 1985 Beverly Nonqualified Stock Option Plan (incorporated by reference to Post-Effective Amendment No. 2 on
Form S-8 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on July 31, 1987
(File No. 33-13243))
10.3* Amended and Restated Beverly Enterprises, Inc. 1993 Long-Term Incentive Stock Plan (the "1993 Plan") (as
amended by Amendment No. 1) (incorporated by reference to Exhibit 10.4 to Beverly Enterprises, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994)
10.4* Beverly Enterprises, Inc. Annual Incentive Plan (incorporated by reference to Exhibit 10.4 to Beverly
Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.5* Form of Other Stock Unit Agreement under the 1993 Plan (incorporated by reference to Exhibit 10.5 to Beverly
Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.6* Retirement Plan for Outside Directors (incorporated by reference to Exhibit 10.5 to Beverly Enterprises,
Inc.'s 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, Inc.'s Registration Statement on Form S-8 filed on September 21, 1994 (File No. 33-
55571))
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.8* Executive Medical Reimbursement Plan (incorporated by reference to Exhibit 10.5 to Beverly Enterprises, Inc.'s
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 (the
"Executive Life Plan") (incorporated by reference to Exhibit 10.7 to Beverly Enterprises, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1993)
10.10* Amendment No. 1, effective September 29, 1994, to the Executive Life Plan (incorporated by reference to
Exhibit 10.10 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.11* Executive Physicals Policy (incorporated by reference to Exhibit 10.8 to Beverly Enterprises, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended June 30, 1993)
10.12* Amended and Restated Deferred Compensation Plan effective July 18, 1991 (incorporated by reference to Exhibit
10.6 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
10.13* Amendment No. 1, effective September 29, 1994, to the Deferred Compensation Plan (incorporated by reference to
Exhibit 10.13 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.14* Executive Retirement Plan (incorporated by reference to Exhibit 10.9 to Beverly Enterprises, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1987)
10.15* Amendment No. 1, effective as of July 1, 1991, to the Executive Retirement Plan (incorporated by reference to
Exhibit 10.8 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991)
10.16* Amendment No. 2, effective as of December 12, 1991, to the Executive Retirement Plan (incorporated by
reference to Exhibit 10.9 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1991)
10.17* Amendment No. 3, effective as of July 31, 1992, to the Executive Retirement Plan (incorporated by reference to
Exhibit 10.10 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.18* Amendment No. 4, effective as of January 1, 1993, to the Executive Retirement Plan (incorporated by reference
to Exhibit 10.18 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1994)
10.19* Amendment No. 5, effective as of September 29, 1994, to the Executive Retirement Plan (incorporated by
reference to Exhibit 10.19 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1994)
10.20* Form of Indemnification Agreement between Beverly Enterprises, Inc. and its officers, directors and certain of
its employees (incorporated by reference to Exhibit 19.14 to Beverly Enterprises, Inc.'s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1987)
10.21* Form of request by Beverly Enterprises, Inc. to certain of its officers or directors relating to
indemnification rights (incorporated by reference to Exhibit 19.5 to Beverly Enterprises, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.22* Form of request by Beverly Enterprises, Inc. to certain of its officers or employees relating to
indemnification rights (incorporated by reference to Exhibit 19.6 to Beverly Enterprises, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended September 30, 1987)
10.23* Agreement dated December 29, 1986 between Beverly Enterprises, Inc. and Stephens Inc. (incorporated by
reference to Exhibit 10.20 to Beverly Enterprises, Inc.'s Registration Statement on Form S-1 filed on
January 18, 1990 (File No. 33-33052))
10.24* 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, Inc. Registration Statement on Form S-1 filed on
February 26, 1990 (File No. 33-33052))
10.25* 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, Inc.'s Registration Statement
on Form S-1 filed on July 30, 1990 (File No. 33-36109))
10.26* Form of Agreement Concerning Benefits Upon Severance dated as of September 1, 1990 between Beverly
Enterprises, Inc. and certain officers of Beverly Enterprises, Inc. (incorporated by reference to
Exhibit 10.23 to Beverly Enterprises, Inc.'s Registration Statement on Form S-1 filed on July 30, 1990 (File
No. 33-36109))
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.27* First Amendment to Agreement Concerning Benefits Upon Severance dated as of April 25, 1993 between Beverly
Enterprises, Inc. and Ronald C. Kayne (incorporated by reference to Exhibit 10.22 to Beverly Enterprises,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1993)
10.28* Form of Employment Agreement, made as of September 29, 1994, between Beverly Enterprises, Inc. and David R.
Banks (incorporated by reference to Exhibit 10.28 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1994)
10.29* Form of Change In Control Severance Agreement, made as of September 29, 1994, between Beverly Enterprises,
Inc. and its Executive Vice Presidents (incorporated by reference to Exhibit 10.29 to Beverly Enterprises,
Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.30* Form of Change In Control Severance Agreement, made as of September 29, 1994, between Beverly Enterprises,
Inc. and certain of its officers (incorporated by reference to Exhibit 10.30 to Beverly Enterprises, Inc.'s
Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.31* Beverly Enterprises Company Car Policy effective May 1, 1988 (incorporated by reference to Exhibit 10.18 to
Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.32* American Transitional Hospitals, Inc. 1993 Nonqualified Stock Option Plan assumed by Beverly Enterprises, Inc.
(incorporated by reference to Exhibit 10.39 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4
(Amendment No. 1) filed on August 5, 1994 (File No. 33-54501))
10.33* 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, Inc.'s Registration Statement on Form S-8
filed on September 21, 1994 (File No. 33-55571))
10.34 Master Lease Document -- General Terms and Conditions dated December 30, 1985 for Leases between Beverly
California Corporation and various subsidiaries thereof as lessees and Beverly Investment Properties, Inc. as
lessor (incorporated by reference to Exhibit 10.12 to Beverly California Corporation's Annual Report on
Form 10-K for the year ended December 31, 1985)
10.35 Agreement dated as of December 29, 1986 among Beverly California Corporation, Beverly Enterprises -- Texas,
Inc., Stephens Inc. and Real Properties, Inc. (incorporated by reference to Exhibit 28 to Beverly California
Corporation's Current Report on Form 8-K dated December 30, 1986) and letter agreement dated as of
July 31, 1987 among Beverly Enterprises, Inc., Beverly California Corporation, Beverly Enterprises -- Texas,
Inc. and Stephens Inc. with reference thereto (incorporated by reference to Exhibit 19.13 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1987)
10.36 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, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 1992)
10.37 Amendment No. 1 dated as of April 7, 1992 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.3 to Beverly Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 1992)
10.38 Second Amendment dated as of May 11, 1992 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.23 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.39 Third Amendment dated as of March 1, 1993 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.24 to Beverly Enterprises, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992)
10.40 Seventh Amendment dated as of May 2, 1994 to the LTCB Credit Agreement (incorporated by reference to Exhibit
10.31 to Beverly Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1994)
10.41 Eighth Amendment dated as of November 1, 1994, to the LTCB Credit Agreement (incorporated by reference to
Exhibit 10.41 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.42 Ninth Amendment dated as of November 9, 1994 to the LTCB Credit Agreement (incorporated by reference to
Exhibit 10.42 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.43 Tenth Amendment dated as of December 6, 1994 to the LTCB Credit Agreement (incorporated by reference to
Exhibit 10.43 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.44 Eleventh Amendment dated as of March 27, 1995 to the LTCB Credit Agreement
10.45 First Amendment and Restatement dated as of December 1, 1994 to Master Sale and Servicing Agreement dated as
of December 1, 1990 among Beverly Funding Corporation, Beverly California Corporation, the wholly-owned
subsidiaries of Beverly Enterprises, Inc. listed therein, Beverly Enterprises, Inc. and certain wholly-owned
subsidiaries of Beverly Enterprises, Inc. which may become parties thereto (incorporated by reference to
Exhibit 10.44 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.46 Trust Indenture dated as of December 1, 1994 from Beverly Funding Corporation, as Issuer, to Chemical Bank, as
Trustee (the "Chemical Indenture") (incorporated by reference to Exhibit 10.45 to Beverly Enterprises, Inc.'s
Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.47 Series Supplement dated as of December 1, 1994 to the Chemical Indenture (incorporated by reference to Exhibit
10.46 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995 (File No.
33-57663))
10.48 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, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1992)
10.49 Second Amendment dated as of May 19, 1994 to the Nippon Credit Agreement (incorporated by reference to Exhibit
10.37 to Beverly Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1994)
10.50 Third Amendment dated as of November 1, 1994 to the Nippon Credit Agreement (incorporated by reference to
Exhibit 10.49 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.51 Fourth Amendment dated as of November 9, 1994 to the Nippon Credit Agreement (incorporated by reference to
Exhibit 10.50 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.52 Fifth Amendment dated as of December 30, 1994 to the Nippon Credit Agreement
10.53 Credit Agreement dated as of November 1, 1994 among Beverly California Corporation, Beverly Enterprises, Inc.,
the Banks listed therein, and Morgan Guaranty Trust Company of New York, as Issuing Bank and as Agent (the
"Morgan Credit Agreement") (incorporated by reference to Exhibit 10.51 to Beverly Enterprises, Inc.'s
Registration Statement on Form S-4 filed on February 13, 1995 (File No. 33-57663))
10.54 First Amendment dated as of December 30, 1994 to the Morgan Credit Agreement (incorporated by reference to
Exhibit 10.52 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February 13, 1995
(File No. 33-57663))
10.55 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,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1992)
10.56 Form of Employment Agreement to be executed by Robert C. Crosby and ATH at the time ATH became a wholly-owned
subsidiary of Beverly Enterprises, Inc. (incorporated by reference to Exhibit 10.38 to Beverly Enterprises,
Inc.'s Registration Statement on Form S-4 filed on July 8, 1994 (File No. 33-54501))
10.57 Form of Irrevocable Trust Agreement for the Beverly Enterprises, Inc. Executive Benefits Plan (incorporated by
reference to Exhibit 10.55 to Beverly Enterprises, Inc.'s Registration Statement on Form S-4 filed on February
13, 1995 (File No. 33-57663))
11.1 Computation of Net Income Per Share
27.1 Financial Data Schedule for the three months ended March 31, 1995
</TABLE>
<PAGE> 1
EXHIBIT 10.44
ELEVENTH AMENDMENT
TO CREDIT AGREEMENT
AMONG
BEVERLY ENTERPRISES, INC.,
BEVERLY CALIFORNIA CORPORATION,
THE SUBSIDIARY GUARANTORS LISTED HEREIN,
THE LENDERS LISTED HEREIN,
BANK OF MONTREAL, AS CO-AGENT,
AND
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
LOS ANGELES AGENCY, AS AGENT
DATED AS OF MARCH 27, 1995
THIS ELEVENTH AMENDMENT dated as of March 27, 1995 (this
"AMENDMENT"), is entered into by and among BEVERLY ENTERPRISES, INC., a
Delaware corporation ("BEI"), BEVERLY CALIFORNIA CORPORATION, a California
corporation ("BORROWER"), the SUBSIDIARY GUARANTORS listed on the signature
pages hereof (together with BEI, the "GUARANTORS"), the LENDERS listed on the
signature pages hereof (such lenders, together with each Person that may or has
become a party to the Credit Agreement (as defined below) pursuant to
subsection 10.8 thereof, are referred to herein individually as a "LENDER" and
collectively as the "LENDERS"), BANK OF MONTREAL as co-agent for the Lenders
(in such capacity, the "CO-AGENT"), and THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., Los Angeles Agency ("LTCB"), as agent for the Lenders (in such capacity,
the "AGENT"). This Amendment amends the Credit Agreement dated March 24, 1992
by and among BEI, Borrower, Co-Agent, Agent and Lenders, as amended by that
First Amendment to Credit Agreement dated April 7, 1992 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further amended by that Second
Amendment to Credit Agreement dated as of May 11, 1992 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further amended by that Third
Amendment to Credit Agreement dated as of March 1, 1993 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further amended by that Fourth
Amendment to Credit Agreement dated as of November 1, 1993 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further amended by that Fifth
Amendment to Credit Agreement dated as of March 21, 1994 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further amended by that Sixth
Amendment to Credit Agreement dated as of April 22, 1994 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further amended by that Seventh
Amendment to Credit Agreement dated as of May 2, 1994 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further amended by that Eighth
Amendment to Credit Agreement dated as of November 1, 1994 by and among BEI,
Borrower, Co-Agent, Agent and the Lenders, as further
<PAGE> 2
amended by that Ninth Amendment to Credit Agreement dated as of November 9,
1994 by and among BEI, Borrower, Co-Agent, Agent and the Lenders, as further
amended by that Tenth Amendment to Credit Agreement dated as of December 6,
1994 by and among BEI, Borrower, Co-Agent, Agent and the Lenders (said Credit
Agreement, as so amended, the "CREDIT AGREEMENT"), as set forth herein.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Borrower desires to amend the Credit Agreement in
certain respects;
WHEREAS, Lenders, Co-Agent and Agent have agreed to approve
such amendments;
WHEREAS, Guarantors desire to reaffirm the effectiveness
respectively of the Subsidiary Guaranty Agreement and the BEI Guaranty
Agreement;
NOW, THEREFORE, in consideration of the terms and conditions
herein contained, BEI, Borrower, Guarantors, Co-Agent, Agent and Lenders agree
as follows:
AGREEMENT
SECTION 1. AMENDMENT TO SUBSECTION 1.1 OF THE CREDIT AGREEMENT
Subsection 1.1 of the Credit Agreement is hereby amended,
effective for all fiscal periods ending after December 30, 1994, by deleting
the definition therein of "Consolidated Capital Expenditures" in its entirety
and replacing it with the following:
"'CONSOLIDATED CAPITAL EXPENDITURES' means, for any period,
the sum, without duplication, of (i) the total amount of additions to
property and equipment of BEI and its Consolidated Subsidiaries during
such period of the types classified as "Capital expenditures" on the
consolidated statement of cash flows included in the Base Financials
and (ii) all investments (whether by means of share purchase, capital
contribution, loan, time deposit or otherwise) made by BEI or any of
its Subsidiaries during such period in Beverly Japan Corporation;
provided that "Consolidated Capital Expenditures" shall exclude (A)
the application of insurance or condemnation proceeds
2
<PAGE> 3
to rebuilding facilities, and (B) the amount of any Debt (including,
without limitation, any obligation with respect to any letter of
credit or similar instrument) and contingent obligations incurred or
assumed for the purpose of financing all or any part of the cost of
constructing any asset to the extent that such amount does not exceed
75% of the cost of acquiring or constructing such asset."
SECTION 2. REPRESENTATIONS AND WARRANTIES
In order to induce Agent, Co-Agent and Lenders to enter into
this Amendment, each of BEI and Borrower represents and warrants to Agent,
Co-Agent and Lenders that:
(a) The representations and warranties of each Loan Party
contained in the Credit Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as though
made on and as of the date hereof except to the extent that such
representations and warranties specifically relate to an earlier date, in which
case they are true, correct and complete in all material respects as of such
earlier date;
(b) No event has occurred and is continuing or would
result from the execution of this Amendment that constitutes an Event of
Default or Potential Event of Default;
(c) Each Loan Party has performed in all material
respects all agreements and satisfied all conditions that the Credit Agreement
and this Amendment provide shall be performed by it on or before the date
hereof;
(d) The execution, delivery and performance of this
Amendment and the Credit Agreement as amended by this Amendment, by each Loan
Party are within the corporate power and authority of each such Loan Party
and, as of the Eleventh Amendment Effective Date (as hereinafter defined),
will be duly authorized by all necessary corporate action on the part of each
Loan Party, and this Amendment, as of the Eleventh Amendment Effective Date, is
duly executed and delivered by each of such Loan Parties and will constitute a
valid and binding agreement of each of such Loan Parties, enforceable against
such Loan Parties in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The Credit Agreement constitutes and, as
of the Eleventh Amendment Effective Date, the Credit Agreement, as amended by
this Amendment, will constitute, a valid and binding agreement of BEI and
Borrower, enforceable against BEI and Borrower in accordance with its
3
<PAGE> 4
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles, relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
(e) The execution and delivery by each Loan Party of this
Amendment and the performance by each Loan Party of the Credit Agreement as
amended by this Amendment, do not and will not (i) violate any provision of any
law or any governmental rule or regulation applicable to any Loan Party, the
Certificate or Articles of Incorporation or Bylaws of any Loan Party or any
order, judgment or decree of any court or other agency of government binding on
any Loan Party, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any instrument that is
material, individually or in the aggregate, and that is binding on such Loan
Party, (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of any Loan Party (other than any Liens created
under any of the Loan Documents in favor of Agent on behalf of Lenders), or
(iv) require any approval or consent of any Person under any instrument that is
material, individually or in the aggregate, and that is binding on such Loan
Party.
(f) The execution and delivery by each Loan Party of this
Amendment and the performance by each Loan Party of the Credit Agreement as
amended by this Amendment, do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "ELEVENTH
AMENDMENT EFFECTIVE DATE"):
A. On or before the Eleventh Amendment Effective Date,
BEI, Borrower and each Subsidiary Guarantor shall deliver to Lenders (or to
Agent for Lenders with sufficient originally executed copies, as appropriate,
for each Lender and its counsel) the following, each, unless otherwise noted,
dated the Eleventh Amendment Effective Date:
(i) Signature and incumbency certificates of its officers
executing this Amendment certified by its secretary or an assistant
secretary; and
(ii) Executed counterparts of this Amendment.
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<PAGE> 5
B. On or before the Eleventh Amendment Effective Date,
Requisite Lenders shall have delivered to Agent a counterpart of this Amendment
originally executed by a duly authorized officer of such Lender or by telex or
telephonic confirmation.
SECTION 4. THE GUARANTIES
Each Guarantor acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Amendment and consents to the
amendment of the Credit Agreement effected pursuant to this Amendment. Each
Guarantor hereby confirms that the Guaranty Agreement and the Collateral
Documents to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be, to
the fullest extent possible the payment and performance of all Obligations,
Guarantied Obligations (as defined in the applicable Guaranty Agreements) and
Secured Obligations (as defined in the Collateral Documents), as the case may
be, including, without limitation, the payment and performance of all
Obligations of Borrower now or hereafter existing under or in respect of the
Credit Agreement as amended by this Amendment and the Notes defined therein.
Each Guarantor acknowledges and agrees that any of the
Guaranty Agreements and the Collateral Documents to which it is a party or
otherwise bound shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be impaired
or limited by the execution or effectiveness of this Amendment. Each Guarantor
represents and warrants that all representations and warranties contained in
the Credit Agreement as amended by this Amendment and the Guaranty Agreements
and the Collateral Documents to which it is a party or otherwise bound are
true, correct and complete in all material respects on and as of the Eleventh
Amendment Effective Date to the same extent as though made on and as of that
date except to the extent that such representations and warranties specifically
relate to an earlier date, in which case they are true, correct and complete in
all material respects as of such earlier date.
Each Guarantor acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Guarantor is not required by the terms of the Credit Agreement or any
other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment or any other Loan Document and (ii) that
neither the terms of the Credit Agreement, any other Loan Document nor this
Amendment shall be deemed to require the consent of any Guarantor to any future
amendments to the Credit Agreement.
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<PAGE> 6
SECTION 5. COUNTERPARTS; EFFECTIVENESS
This Amendment may be executed in any number of counterparts,
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Amendment
(other than the provisions of Section 1 hereof) shall become effective upon the
execution of a counterpart hereof by Requisite Lenders and each of the Loan
Parties and receipt of written or telephonic notification of such execution and
authorization of delivery thereof.
SECTION 6. FEES AND EXPENSES
Borrower acknowledges that all costs, fees and expenses as
described in subsection 10.4 of the Credit Agreement incurred by Agent and its
counsel with respect to this Amendment and the documents and transactions
contemplated hereby shall be for the account of Borrower.
SECTION 7. EFFECT OF AMENDMENT
It is hereby agreed that, except as specifically provided
herein, this Amendment does not in any way affect or impair the terms and
conditions of the Credit Agreement, and all terms and conditions of the Credit
Agreement are to remain in full force and effect unless otherwise specifically
amended or changed pursuant to the terms and conditions of this Amendment.
SECTION 8. APPLICABLE LAW
This Amendment and the rights and obligations of the parties
hereto and all other aspects hereof shall be deemed to be made under, shall be
governed by, and shall be construed and enforced in accordance with, the laws
of the State of New York without regard to principles of conflicts of laws.
6
<PAGE> 7
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written above.
BEI:
BEVERLY ENTERPRISES, INC.
By: Schuyler Hollingsworth, Jr.
Title: Sr. Vice President and Treasurer
BORROWER:
BEVERLY CALIFORNIA CORPORATION
By: Schuyler Hollingsworth, Jr.
Title: Sr. Vice President and Treasurer
AGENT, CO-AGENT AND LENDERS:
THE LONG-TERM CREDIT BANK OF JAPAN,
LOS ANGELES AGENCY,
as Agent and as a Lender
By: /s/ YUTAKA KAMISAWA
Title: Deputy General Manager
Yutaka Kamisawa
BANK OF MONTREAL,
as Co-Agent and as a Lender
By: /s/ DANIEL A. BROWN
Title: Director
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<PAGE> 8
LENDERS:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: /s/ JAMES W. LATIMER
Title: Managing Director
U.S. NATIONAL BANK OF OREGON
By: __________________________
Title: _______________________
The Subsidiary Guarantors:
Beverly Enterprises - Alabama, Inc.
Beverly Enterprises - Arkansas, Inc.
Beverly Enterprises - Florida, Inc.
Beverly Enterprises - Georgia, Inc.
Beverly Enterprises - Maryland, Inc.
Beverly Enterprises - Massachusetts, Inc.
Beverly Enterprises - Minnesota, Inc.
Beverly Enterprises - Mississippi, Inc.
Beverly Enterprises - Missouri, Inc.
Beverly Enterprises - Nebraska, Inc.
Beverly Enterprises - North Carolina, Inc.
Beverly Enterprises - Oregon
Beverly Enterprises - Wisconsin, Inc.
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<PAGE> 9
Commercial Management, Inc.
Hallmark Convalescent Homes, Inc.
Hospital Facilities Corporation
Moderncare of Lumberton, Inc.
Nebraska City S-C-H, Inc.
South Dakota - Beverly Enterprises, Inc.
Vantage Healthcare Corporation
AGI-Camelot, Inc.
AGI-McDonald County Health Care, Inc.
Beverly Enterprises - Arizona, Inc.
Beverly Enterprises - California, Inc.
Beverly Enterprises - Colorado, Inc.
Beverly Enterprises - Connecticut, Inc.
Beverly Enterprises - Garden Terrace, Inc.
Beverly Enterprises - Hawaii, Inc.
Beverly Enterprises - Idaho, Inc.
Beverly Enterprises - Illinois, Inc.
Beverly Enterprises - Indiana, Inc.
Beverly Enterprises - Kansas, Inc.
Beverly Enterprises - Kentucky, Inc.
Beverly Enterprises - Louisiana, Inc.
Beverly Enterprises - Michigan, Inc.
Beverly Enterprises - New Jersey, Inc.
Beverly Enterprises - Ohio, Inc.
Beverly Enterprises - Pennsylvania, Inc.
Beverly Enterprises - South Carolina, Inc.
Beverly Enterprises - Tennessee, Inc.
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<PAGE> 10
Beverly Enterprises - Texas, Inc.
Beverly Enterprises - Utah, Inc.
Beverly Enterprises - Virginia, Inc.
Beverly Enterprises - Washington, Inc.
Beverly Enterprises - West Virginia, Inc.
Beverly Indemnity, Ltd.
Beverly Manor Inc. of Hawaii
Beverly Savana Cay Manor, Inc.
Columbia-Valley Nursing Home, Inc.
Computran Systems, Inc.
Continental Care Centers of Council
Bluffs, Inc.
Forest City Building Ltd.
Home Medical Systems, Inc.
Kenwood View Nursing Home, Inc.
Liberty Nursing Homes, Incorporated
Medical Arts Health Facility of
Lawrenceville, Inc.
Nursing Home Operators, Inc.
Petersen Health Care, Inc.
Pharmacy Corporation of America
Salem No. 1, Inc.
South Alabama Nursing Home, Inc.
American Transitional Care Centers of
Texas, Inc.
American Transitional Care Dallas-Ft.
Worth, Inc.
American Transitional Health Care, Inc.
American Transitional Hospitals, Inc.
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<PAGE> 11
American Transitional Hospitals of
Indiana, Inc.
American Transitional Hospitals of
Oklahoma, Inc.
American Transitional Hospitals of
Tennessee, Inc.
ATH Del Oro, Inc.
ATH Heights, Inc.
ATH Tuscon, Inc.
Beverly Enterprises Japan Limited
AdviNet, Inc.
Beverly Crest Corporation
Beverly Enterprises-Distribution Services,
Inc.
Hospice Preferred Choice, Inc.
Beverly Rehabilitation Services, Inc.
Synergos, Inc.
Synergos-Scottsdale, Inc.
Synergos-Pleasanthill, Inc.
Synergos-North Hollywood, Inc.
By: Schuyler Hollingsworth, Jr.
Title: Sr. Vice President and Treasurer
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<PAGE> 1
EXHIBIT 10.52
EXECUTION VERSION
FIFTH AMENDMENT
TO CREDIT AGREEMENT
AMONG
BEVERLY ENTERPRISES, INC.,
BEVERLY CALIFORNIA CORPORATION,
THE SUBSIDIARY GUARANTORS LISTED HEREIN,
THE LENDERS LISTED HEREIN,
AND
THE NIPPON CREDIT BANK, LTD.
LOS ANGELES AGENCY, AS AGENT
DATED AS OF DECEMBER 30, 1994
THIS FIFTH AMENDMENT dated as of December 30, 1994 (this
"AMENDMENT"), is entered into by and among BEVERLY ENTERPRISES, INC., a
Delaware corporation ("BEI"), BEVERLY CALIFORNIA CORPORATION, a California
corporation ("BORROWER"), the SUBSIDIARY GUARANTORS listed on the signature
pages hereof (together with BEI, the "GUARANTORS"), the LENDERS listed on the
signature pages hereof (such lenders, together with each Person that may or has
become a party to the Credit Agreement (as hereinafter defined) pursuant to
subsection 10.8 thereof, are referred to herein individually as a "LENDER" and
collectively as the "LENDERS"), and THE NIPPON CREDIT BANK, LTD., Los Angeles
Agency ("NIPPON"), as agent for the Lenders (in such capacity, the "AGENT").
This Amendment amends the Credit Agreement dated as of March 2, 1993 by and
among BEI, Borrower, Agent and Lenders, as amended by that certain First
Amendment to Credit Agreement dated as of May 6, 1994, as further amended by
that certain Second Amendment to Credit Agreement dated as of May 19, 1994, as
further amended by that certain Third Amendment to Credit Agreement dated as of
November 1, 1994, and as further amended by that certain Fourth Amendment to
Credit Agreement dated as of November 9, 1994 (as so amended, the "CREDIT
AGREEMENT"), as set forth herein.
RECITALS
WHEREAS, Borrower desires to amend the Credit Agreement in
certain respects;
WHEREAS, Lenders and Agent have agreed to approve such
amendments;
WHEREAS, Guarantors desire to reaffirm the effectiveness
respectively of the Subsidiary Guaranty Agreement and the BEI Guaranty
Agreement;
<PAGE> 2
AGREEMENT
NOW, THEREFORE, in consideration of the terms and conditions
herein contained, BEI, Borrower, Guarantors, Agent and Lenders agree as
follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined
above and elsewhere in this Amendment shall be used herein as so defined.
Unless otherwise defined herein, all other capitalized terms used herein shall
have the respective meanings given to those terms in the Credit Agreement, as
amended by this Amendment. The rules of construction set forth in Section I of
the Credit Agreement shall, to the extent not inconsistent with the terms of
this Amendment, apply to this Amendment and are hereby incorporated by
reference.
2. AMENDMENT TO CREDIT AGREEMENT. Subject to conditions set forth
in paragraph 4 hereof, the Credit Agreement is hereby amended as follows:
(a) The definition of "Consolidated Capital Expenditures"
set forth in Subsection 1.1 is amended by deleting such definition in
its entirety and replacing it with the following:
'CONSOLIDATED CAPITAL EXPENDITURES' means, for any
period, the sum, without duplication, of (i) the total amount
of additions to property and equipment of BEI and its
Consolidated Subsidiaries during such period of the types
classified as "Capital expenditures" on the consolidated
statement of cash flows included in the 1993 Base Financials
and (ii) all Investments made by BEI or any of its
Subsidiaries during such period in Beverly Japan Corporation;
provided that "Consolidated Capital Expenditures" shall
exclude (A) the application of insurance or condemnation
proceeds to rebuilding facilities and (B) the amount of any
Debt incurred or assumed for the purpose of financing all or
any part of the cost of constructing any asset to the extent
that such amount does not exceed 75% of the cost of acquiring
or constructing such asset.
(b) Subsection 1.1 is further amended by deleting the
following definition:
"CAPITAL EXPENDITURES"
(c) Subsection 1.1 is further amended by deleting the
definition of "Workout Transaction" which was added in the Second
Amendment to Credit Agreement dated as of May 19, 1994 and retaining
the definition of "Workout Transaction" which was added in the Fourth
Amendment to Credit Agreement dated as of dated as of May 9, 1994.
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<PAGE> 3
(d) Subsection 5.23 is amended by deleting such
subsection in its entirety and replacing it with the following:
"5.23 CONSOLIDATED CAPITAL EXPENDITURES
BEI and its Subsidiaries will not pay or incur
Consolidated Capital Expenditures in any fiscal year set forth
below which exceed in aggregate amount for such year the
amount set forth opposite such year below:
Fiscal year ending December 31, 1993 - $110,000,000;
Fiscal year ending December 31, 1994 - $125,000,000;
Fiscal year ending December 31, 1995 - $130,000,000;
Fiscal year ending December 31, 1996 - $135,000,000;
Fiscal year ending December 31, 1997 - $140,000,000;
Fiscal year ending December 31, 1998 - $145,000,000;
and
Each fiscal year thereafter - $150,000,000;
Provided, however, that, if in any fiscal year the
Consolidated Capital Expenditures are less than the amount
permitted by this Subsection 5.23 (without giving effect to
any additional amount permitted by this proviso), the
aggregate amount of Consolidated Capital Expenditures
permitted in the next succeeding fiscal year will be increased
by an amount equal to such shortfall."
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent
and the Lenders to enter into this Amendment, each of BEI and Borrower
represents and warrants to the Agent and the Lenders that:
(a) The representations and warranties of each Loan Party
contained in the Credit Agreement are true, correct and complete in
all material respects on and as of the date hereof to the same extent
as though made on and as of the date hereof except to the extent that
such representations and warranties specifically relate to an earlier
date, in which case they are true, correct and complete in all
material respects as of such earlier date;
(b) No event has occurred and is continuing or would
result from the execution of this Amendment that constitutes an Event
of Default or Potential Event of Default;
(c) Each Loan Party has performed in all material
respects all agreements and satisfied all conditions that the Credit
Agreement and this Amendment provide shall be performed by it on or
before the date hereof;
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<PAGE> 4
(d) The execution, delivery and performance of this
Amendment, and the Credit Agreement as amended by this Amendment, by
each Loan Party which is a party thereto are within the corporate
power and authority of each such Loan Party and, as of the Fifth
Amendment Effective Date (as hereinafter defined), will be duly
authorized by all necessary corporate action on the part of each Loan
Party, and this Amendment as of the Fifth Amendment Effective Date (as
hereinafter defined), are duly executed and delivered by each of such
Loan Parties which is a party thereto and will constitute a valid and
binding agreement of each of such Loan Parties, enforceable against
such Loan Parties in accordance with their terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The Credit Agreement constitutes and, as of the Fifth
Amendment Effective Date (as hereinafter defined), the Credit
Agreement, as amended by this Amendment, will constitute, a valid and
binding agreement of BEI and Borrower, enforceable against BEI and
Borrower in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles, relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability.
(e) The execution and delivery by each applicable Loan
Party of this Amendment and the performance by each such Loan Party of
the Credit Agreement as amended by this Amendment, do not and will not
(i) violate any provision of any law or any governmental rule or
regulation applicable to any Loan Party, the Certificate or Articles
of Incorporation or Bylaws of any Loan Party or any order, judgment or
decree of any court or other agency of government binding on any Loan
Party, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any instrument
that is material, individually or in the aggregate, and that is
binding on such Loan Party, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of any
Loan Party (other than any Liens created under any of the Loan
Documents in favor of Agent on behalf of Lenders), or (iv) require any
approval or consent of any Person under any instrument that is
material, individually or in the aggregate, and that is binding on
such Loan Party.
(f) The execution and delivery by each applicable Loan
Party of this Amendment and the performance by each such Loan Party of
the Credit Agreement as amended by this Amendment, do not and will not
require any registration with, consent or approval of, or notice to,
or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
4
<PAGE> 5
4. CONDITIONS TO EFFECTIVENESS. Section 2 of this Amendment shall
become effective only upon the satisfaction of all of the following conditions
precedent (the date of satisfaction of such conditions being referred to herein
as the "FIFTH AMENDMENT EFFECTIVE DATE"):
(a) On or before the Fifth Amendment Effective Date,
Borrower shall deliver to the Lenders (or to the Agent for the Lenders
with sufficient originally executed copies, as appropriate, for each
Lender and its counsel) the following, each, unless otherwise noted,
dated the Fifth Amendment Effective Date, duly executed and delivered
by the parties thereto:
(i) Signature and incumbency certificates of each
of BEI, Borrower and each Subsidiary Guarantor of its
respective officers executing this Amendment certified by such
party's respective secretary or assistant secretary; and
(ii) Executed counterparts of this Amendment.
(b) On or before the Fifth Amendment Effective Date, each
Lender shall have delivered to the Agent a counterpart of this
Amendment originally executed by a duly authorized officer of such
Lender or by telex or telephonic confirmation.
(c) On or before the Fifth Amendment Effective Date:
(i) Borrower shall have caused payment to the
Agent of an amendment fee of $5,000.00;
(ii) Borrower shall have caused payment to the
Agent of all amounts regarding the costs and expenses
reasonably incurred by Agent in connection with this
Amendment; and
(iii) An amendment to the Morgan Credit Agreement,
which amendment shall be satisfactory to Agent in all material
respects, shall have become effective in all respects.
(d) Borrower shall have delivered to the Lenders (or to
the Agent for the Lenders with sufficient originally executed copies,
as appropriate, for each Lender and its counsel) a Certificate of the
Secretary or Assistant Secretary of Borrower, dated the Fifth
Amendment Effective Date, certifying that the Certificate of
Incorporation and Bylaws of Borrower, in the form delivered to the
Agent and the Lenders on the Closing Date, are in full force and
effect and have not been amended, supplemented, revoked or repealed
since such date.
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<PAGE> 6
(e) On or before the Fifth Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incidental
thereto not previously found acceptable by the Agent, acting on behalf
of the Lenders, and its counsel shall be satisfactory in form and
substance to the Agent and such counsel, and the Agent and such
counsel shall have received all such counterpart originals or
certified copies of such documents as the Agent may reasonably
request.
5. ACKNOWLEDGMENT OF GUARANTORS. Each Guarantor acknowledges that
it has reviewed the terms and provisions of the Credit Agreement and this
Amendment and consents to the amendment of the Credit Agreement effected
pursuant to this Amendment. Each Guarantor hereby confirms that the Guaranty
Agreement and the Collateral Documents to which it is a party or otherwise
bound and all Collateral encumbered thereby will continue to guaranty or
secure, as the case may be, to the fullest extent possible the payment and
performance of all Obligations, Guarantied Obligations (as defined in the
applicable Guaranty Agreements) and Secured Obligations (as defined in the
Collateral Documents), as the case may be, including, without limitation, the
payment and performance of all Obligations of Borrower now or hereafter
existing under or in respect of the Credit Agreement as amended by this
Amendment and the Notes defined therein.
Each Guarantor acknowledges and agrees that any of the
Guaranty Agreements and the Collateral Documents to which it is a party or
otherwise bound shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be impaired
or limited by the execution or effectiveness of this Amendment. Each Guarantor
represents and warrants that all representations and warranties contained in
the Credit Agreement as amended by this Amendment and the Guaranty Agreements
and the Collateral Documents to which it is a party or otherwise bound are
true, correct and complete in all material respects on and as of the Fifth
Amendment Effective Date to the same extent as though made on and as of that
date except to the extent that such representations and warranties specifically
relate to an earlier date, in which case they are true, correct and complete in
all material respects as of such earlier date.
Each Guarantor acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Guarantor is not required by the terms of the Credit Agreement or any
other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment or any other Loan Document and (ii) that
neither the terms of the Credit Agreement, any other Loan Document nor this
Amendment shall be deemed to require the consent of any Guarantor to any future
amendments to the Credit Agreement.
6
<PAGE> 7
6. EFFECTIVENESS; COUNTERPARTS. This Amendment may be executed in
any number of counterparts, and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Amendment (other than the provisions of Section 2) shall
become effective upon the execution of a counterpart hereof by all Lenders and
each of the Loan Parties and receipt of written or telephonic notification of
such execution and authorization of delivery thereof.
7. FEES AND EXPENSES. The Borrower acknowledges that all costs,
fees and expenses as described in subsection 10.4 of the Credit Agreement
incurred by the Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of the
Borrower.
8. EFFECT OF AMENDMENT. It is hereby agreed that, except as
specifically provided herein, this Amendment does not in any way affect or
impair the terms and conditions of the Credit Agreement, and all terms and
conditions of the Credit Agreement are to remain in full force and effect
unless otherwise specifically amended or changed pursuant to the terms and
conditions of this Amendment.
9. APPLICABLE LAW. This Amendment and the rights and obligations
of the parties hereto and all other aspects hereof shall be deemed to be made
under, shall be governed by, and shall be construed and enforced in accordance
with, the laws of the State of New York without regard to principles of
conflicts of laws.
7
<PAGE> 8
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BEI:
BEVERLY ENTERPRISES, INC.
By: Schuyler Hollingsworth, Jr.
Title: Sr. Vice President and Treasurer
BORROWER:
BEVERLY CALIFORNIA CORPORATION
By: Schuyler Hollingsworth, Jr.
Title: Sr. Vice President and Treasurer
AGENT:
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY,
as Agent and as a Lender
By: _________________________
Title: ______________________
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<PAGE> 9
LENDERS:
THE NIPPON CREDIT BANK, LTD.,
LOS ANGELES AGENCY,
as Agent and as a Lender
By: _________________________
Title: ______________________
THE TORONTO-DOMINION (TEXAS), INC.
as a Lender
By: _________________________
Title: ______________________
[Signatures Continued]
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<PAGE> 10
THE SUBSIDIARY GUARANTORS:
American Transitional Care
Centers of Texas, Inc.
American Transitional Care
Dallas-Ft. Worth, Inc.
American Transitional Health Care, Inc.
American Transitional
Hospitals, Inc.
American Transitional
Hospitals of Indiana, Inc.
American Transitional
Hospitals of Oklahoma, Inc.
American Transitional
Hospitals of Tennessee, Inc.
ATH Del Oro, Inc.
ATH Heights, Inc.
ATH Tucson, Inc.
Beverly Enterprises -
Alabama, Inc.
Beverly Enterprises -
Arkansas, Inc.
Beverly Enterprises -
Florida, Inc.
Beverly, Enterprises -
Georgia, Inc.
Beverly Enterprises -
Japan Limited
Beverly Enterprises -
Maryland, Inc.
Beverly Enterprises -
Massachusetts, Inc.
Beverly Enterprises -
Minnesota, Inc.
S-3
<PAGE> 11
Beverly Enterprises -
Mississippi, Inc.
Beverly Enterprises -
Missouri, Inc.
Beverly Enterprises -
Nebraska, Inc.
Beverly Enterprises -
North Carolina, Inc.
Beverly Enterprises -
Oregon
Beverly Enterprises -
Wisconsin, Inc.
Commercial Management,
Inc.
Hallmark Convalescent
Homes, Inc.
Hospital Facilities
Corporation
Moderncare of Lumberton,
Inc.
Nebraska City S-C-H, Inc.
South Dakota - Beverly
Enterprises, Inc.
Vantage Healthcare
Corporation
AGI-Camelot, Inc.
AGI-McDonald County
Health Care, Inc.
Beverly Enterprises -
Arizona, Inc.
Beverly Enterprises -
California, Inc.
Beverly Enterprises -
Colorado, Inc.
Beverly Enterprises -
Connecticut, Inc.
S-4
<PAGE> 12
Beverly Enterprises -
Garden Terrace, Inc.
Beverly Enterprises -
Hawaii, Inc.
Beverly Enterprises -
Idaho, Inc.
Beverly Enterprises -
Illinois, Inc.
Beverly Enterprises -
Indiana, Inc.
Beverly Enterprises -
Kansas, Inc.
Beverly Enterprises -
Kentucky, Inc.
Beverly Enterprises -
Louisiana, Inc.
Beverly Enterprises -
Michigan, Inc.
Beverly Enterprises -
New Jersey, Inc.
Beverly Enterprises -
Ohio, Inc.
Beverly Enterprises -
Pennsylvania, Inc.
Beverly Enterprises -
South Carolina, Inc.
Beverly Enterprises -
Tennessee, Inc.
Beverly Enterprises -
Texas, Inc.
Beverly Enterprises -
Utah, Inc.
Beverly Enterprises -
Virginia, Inc.
Beverly Enterprises -
Washington, Inc.
S-5
<PAGE> 13
Beverly Enterprises -
West Virginia, Inc.
Beverly Indemnity, Ltd.
Beverly Manor Inc. of
Hawaii
Beverly Savana Cay Manor,
Inc.
Columbia-Valley Nursing
Home, Inc.
Computran Systems, Inc.
Continental Care Centers
of Council Bluffs, Inc.
Forest City Building Ltd.
Home Medical Systems,
Inc.
Kenwood View Nursing
Home, Inc.
Liberty Nursing Homes,
Incorporated
Medical Arts Health
Facility of
Lawrenceville, Inc.
Nursing Home Operators,
Inc.
Petersen Health Care,
Inc.
Pharmacy Corporation of
America
Salem No. 1, Inc.
South Alabama Nursing
Home, Inc.
S-6
<PAGE> 14
Taylor County Health
Facility, Incorporated
By: Schuyler Hollingsworth, Jr.
Title: Sr. Vice President and Treasurer
S-7
<PAGE> 1
BEVERLY ENTERPRISES, INC.
EXHIBIT 11.1
COMPUTATION OF NET INCOME PER SHARE
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
PRIMARY:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,549 $ 15,115
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,063) (2,063)
----------- -----------
Net income applicable to common shares . . . . . . . . . . . . . . . . . . . . . . . $ 14,486 $ 13,052
=========== ===========
Applicable common shares:
Weighted average outstanding shares during the period . . . . . . . . . . . . . . . 85,665 85,108
Weighted average shares issuable upon exercise of common stock equivalents
outstanding (principally stock options) using the "treasury stock" method . . . . 1,639 1,657
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,304 86,765
=========== ===========
Net income per share of common stock . . . . . . . . . . . . . . . . . . . . . . . . $ 0.17 $ 0.15
=========== ===========
FULLY DILUTED:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,549 $ 15,115
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 zero coupon notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ---(a) ---(a)
Less applicable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- ---
----------- -----------
Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,549 $ 15,115
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,063) (2,063)
----------- -----------
Adjusted net income applicable to common shares . . . . . . . . . . . . . . . . . . . $ 14,486 $ 13,052
=========== ===========
Applicable common shares:
Weighted average outstanding shares during the period . . . . . . . . . . . . . . . 85,665 85,108
Assumed conversion of cumulative convertible exchangeable preferred stock . . . . . ---(a) ---(a)
Weighted average shares issuable upon exercise of common stock equivalents
outstanding (principally stock options) using the "treasury stock" method . . . . 1,771 1,654
Assumed conversion of 7.625% convertible subordinated debentures . . . . . . . . . ---(a) ---(a)
Assumed conversion of zero coupon notes . . . . . . . . . . . . . . . . . . . . . . ---(a) ---(a)
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,436 86,762
=========== ===========
Net income per share of common stock . . . . . . . . . . . . . . . . . . . . . . . . $ 0.17 $ 0.15
=========== ===========
</TABLE>
_______________
(a) Conversion would be anti-dilutive and is therefore not assumed in the
computation of earnings per share of common stock.
<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 THE QUARTERLY PERIOD ENDED MARCH 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 38,003
<SECURITIES> 0
<RECEIVABLES> 522,120<F1>
<ALLOWANCES> 28,291<F2>
<INVENTORY> 58,682
<CURRENT-ASSETS> 659,549
<PP&E> 1,831,405
<DEPRECIATION> 613,115
<TOTAL-ASSETS> 2,346,392
<CURRENT-LIABILITIES> 434,080
<BONDS> 901,048
<COMMON> 8,970
0
150,000
<OTHER-SE> 683,521
<TOTAL-LIABILITY-AND-EQUITY> 2,346,392
<SALES> 795,619
<TOTAL-REVENUES> 799,119
<CGS> 0
<TOTAL-COSTS> 725,974
<OTHER-EXPENSES> 25,904
<LOSS-PROVISION> 0<F3>
<INTEREST-EXPENSE> 20,549
<INCOME-PRETAX> 26,692
<INCOME-TAX> 10,143
<INCOME-CONTINUING> 16,549
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,549
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
<FN>
<F1>Excludes $47,532 of long-term notes receivable.
<F2>Excludes $6,182 of allowance for long-term notes receivable.
<F3>Included in Total costs and expenses line.
</FN>
</TABLE>
