<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
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.)
5111 ROGERS AVENUE, SUITE 40-A
FORT SMITH, ARKANSAS 72919-0155
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (501) 452-6712
INDICATE BY CHECK MARK WHETHER REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT REGISTRANT
WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
--- ---
SHARES OF REGISTRANT'S COMMON STOCK, $.10 PAR VALUE, OUTSTANDING,
EXCLUSIVE OF TREASURY SHARES, AT OCTOBER 31, 1995 -- 98,456,905
- --------------------------------------------------------------------------------
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<PAGE> 2
BEVERLY ENTERPRISES, INC.
FORM 10-Q
SEPTEMBER 30, 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 . . . . . . . . . . . . . . . . . . . . . . . . . 8
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
1
<PAGE> 3
PART I
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
----------------- -----------------
(UNAUDITED) (NOTE)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,678 $ 67,964
Accounts receivable-patient, less allowance for doubtful accounts:
1995--$22,799; 1994--$28,293 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470,159 438,743
Accounts receivable-nonpatient, less allowance for doubtful accounts:
1995--$257; 1994--$302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,845 10,896
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,712 5,028
Operating supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,582 60,243
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,235 35,098
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,150 34,365
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691,361 652,337
Property and equipment, net of accumulated depreciation and amortization:
1995--$625,173; 1994--$592,158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,229,196 1,200,623
Other assets:
Notes receivable, less allowance for doubtful notes:
1995--$6,386; 1994--$6,429 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,437 41,677
Designated and restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,814 41,939
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380,007 245,990
Operating and leasehold rights and licenses, net . . . . . . . . . . . . . . . . . . . . 21,147 23,336
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,002 116,676
----------- -----------
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624,407 469,618
----------- -----------
$ 2,544,964 $ 2,322,578
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 137,537 $ 117,001
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 --
Accrued wages and related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 131,144 132,066
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,659 10,828
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,082 85,110
Current portion of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . 59,118 60,199
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,608 4,421
----------- -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446,148 409,625
Long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 897,103 918,018
Deferred income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,272 81,117
Other liabilities and deferred items . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,760 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--102,364,501; 1994--89,620,822 . . . . . . . . . . . 10,236 8,962
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762,480 609,762
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,100 98,655
Treasury stock, at cost: 3,972,208 shares . . . . . . . . . . . . . . . . . . . . . . . (40,135) (40,135)
----------- -----------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,030,681 827,244
----------- -----------
$ 2,544,964 $ 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-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- -------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net operating revenues . . . . . . . . . . . . . . . . . . . $ 834,905 $ 763,327 $ 2,420,899 $ 2,204,527
Interest income . . . . . . . . . . . . . . . . . . . . . . . 3,505 3,340 10,267 10,709
---------- ---------- ------------ ------------
Total revenues . . . . . . . . . . . . . . . . . . . . 838,410 766,667 2,431,166 2,215,236
Costs and expenses:
Operating and administrative:
Wages and related . . . . . . . . . . . . . . . . . . . 442,679 406,226 1,285,091 1,183,900
Other . . . . . . . . . . . . . . . . . . . . . . . . . 308,177 286,549 914,490 832,969
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 21,598 16,083 63,872 47,297
Depreciation and amortization . . . . . . . . . . . . . . 25,991 22,740 77,982 65,036
---------- ---------- ------------ ------------
Total costs and expenses . . . . . . . . . . . . . . . 798,445 731,598 2,341,435 2,129,202
---------- ---------- ------------ ------------
Income before provision for income taxes . . . . . . . . . . 39,965 35,069 89,731 86,034
Provision for income taxes . . . . . . . . . . . . . . . . . 15,187 11,573 34,098 28,391
---------- ---------- ------------ ------------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,778 $ 23,496 $ 55,633 $ 57,643
========== ========== ============ ============
Net income per share of common stock:
Primary:
Net income applicable to common shares . . . . . . . . . . $ 22,715 $ 21,433 $ 49,445 $ 51,455
========== ========== ============ ============
Net income per share . . . . . . . . . . . . . . . . . . . $ .23 $ .25 $ .54 $ .59
========== ========== ============ ============
Shares used to compute net income per share . . . . . . . 99,879 87,064 91,736 87,014
========== ========== ============ ============
Fully diluted:
Net income applicable to common shares . . . . . . . . . . $ 24,778 $ 23,496 $ 49,445 $ 57,643
========== ========== ============ ============
Net income per share . . . . . . . . . . . . . . . . . . . $ .22 $ .24 $ .54 $ .59
========== ========== ============ ============
Shares used to compute net income per share . . . . . . . 111,209 98,612 91,907 98,481
========== ========== ============ ============
</TABLE>
Net income applicable to common shares is computed by deducting preferred
stock dividends from net income, when dilutive. Primary earnings per share for
the three-month and nine-month periods ended September 30, 1995 and 1994 and
fully diluted earnings per share for the nine-month period ended September 30,
1995 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. Fully diluted earnings
per share for the three-month periods ended September 30, 1995 and 1994 and the
nine-month period ended September 30, 1994 were computed by dividing net income
by the weighted average number of shares of common stock outstanding during the
period, the weighted average number of shares issuable upon exercise of stock
options, calculated using the treasury stock method and the assumed conversion
of the Company's cumulative convertible exchangeable preferred stock.
Conversion of the Company's 7.625% convertible subordinated debentures and zero
coupon notes would have an anti-dilutve effect and, therefore, were not
assumed.
See accompanying notes.
3
<PAGE> 5
BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,633 $ 57,643
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . 77,982 65,036
Provision for reserves and discounts on patient, notes and other receivables, net 10,788 13,319
Amortization of deferred financing costs . . . . . . . . . . . . . . . . . . . . 3,346 3,323
Gains on dispositions of facilities and other assets, net . . . . . . . . . . . . (1,990) (9,512)
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,007 1,496
Net decrease in insurance reserves . . . . . . . . . . . . . . . . . . . . . . . (5,154) (1,179)
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable - patient . . . . . . . . . . . . . . . . . . . . . . . . (27,251) (36,463)
Operating supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 (728)
Prepaid expenses and other receivables . . . . . . . . . . . . . . . . . . . . 616 (2,360)
Accounts payable and other accrued expenses . . . . . . . . . . . . . . . . . 5,673 3,536
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,447 6,049
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,784) (13,427)
---------- ----------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,786 29,090
---------- ----------
Net cash provided by operating activities . . . . . . . . . . . . . . . . . 130,419 86,733
Cash flows from investing activities:
Proceeds from dispositions of facilities and other assets . . . . . . . . . . . . . 15,002 33,344
Payments for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . (30,719) (38,502)
Payments on notes receivable and REMIC investment . . . . . . . . . . . . . . . . . 15,337 7,726
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82,187) (92,182)
Construction and development in progress, net . . . . . . . . . . . . . . . . . . . (42,436) (807)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,500) (8,146)
---------- ----------
Net cash used for investing activities . . . . . . . . . . . . . . . . . . (138,503) (98,567)
Cash flows from financing activities:
Repayments of long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . (35,759) (38,686)
Proceeds from issuance of long-term obligations . . . . . . . . . . . . . . . . . . 25,000 33,300
Net borrowings under revolving credit facility . . . . . . . . . . . . . . . . . . . 12,000 1,000
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . 1,950 13,915
Proceeds from issuance of ATH preferred stock . . . . . . . . . . . . . . . . . . . --- 1,264
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,621) (3,497)
Dividends paid on preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . (6,188) (6,188)
Proceeds from designated funds, net . . . . . . . . . . . . . . . . . . . . . . . . 416 3,012
---------- ----------
Net cash provided by (used for) financing activities . . . . . . . . . . . (4,202) 4,120
---------- ----------
Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . (12,286) (7,714)
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . 67,964 77,058
---------- ----------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . $ 55,678 $ 69,344
========== ==========
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) . . . . . . . . . . . . . . . . . . . . . . . . $ 59,695 $ 44,634
Income taxes (net of refunds) . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,644 20,846
</TABLE>
See accompanying notes.
4
<PAGE> 6
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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-month and
nine-month periods ended September 30, 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-month and
nine-month periods ended September 30, 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.
Certain prior year amounts have been reclassified to conform with the 1995
presentation.
(ii) The provisions for income taxes for the three-month and nine-month
periods ended September 30, 1995 and 1994 were based on estimated annual tax
rates of 38% and 33%, respectively. The Company's annual effective tax rates
in 1995 and 1994 were different 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 annual effective tax rate for 1995 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-month and nine-month
periods ended September 30 (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ -------------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Federal:
Current . . . . . . . . . . . . . $ 8,195 $ 8,009 $ 21,180 $ 21,161
Deferred . . . . . . . . . . . . . 3,794 758 5,739 347
State:
Current . . . . . . . . . . . . . 2,383 2,299 5,911 5,734
Deferred . . . . . . . . . . . . . 815 507 1,268 1,149
--------- ---------- --------- ---------
$ 15,187 $ 11,573 $ 34,098 $ 28,391
========= ========== ========= =========
</TABLE>
(iii) During the nine months ended September 30, 1995, the Company purchased
17 previously leased nursing facilities (2,118 beds), one previously leased
retirement living center (17 units), and certain other assets for approximately
$31,600,000 cash, approximately $40,400,000 acquired debt and approximately
$1,700,000 security and other deposits. The Company does not operate four of
such facilities which were subleased to other nursing home operators in prior
year transactions and currently remain under lease to such operators. Also
during such period, the Company sold, subleased or terminated the leases on 10
nursing facilities (1,121 beds), 12 homes for the developmentally disabled
(1,065 beds), six retirement living centers (1,141 units) and certain other
assets for cash proceeds of approximately $36,500,000 (approximately
$22,600,000 of which was included in accounts receivable-nonpatient at
September 30, 1995 and was received in October 1995), approximately $52,800,000
of assumed debt and approximately $3,700,000 of notes receivable. The Company
recognized net pre-tax gains of approximately $2,000,000 as a result of these
dispositions. The operations of these facilities were immaterial to the
Company's financial position and results of operations.
5
<PAGE> 7
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
In June 1995, the Company completed its acquisition of Pharmacy Management
Services, Inc. ("PMSI") in exchange for approximately 12,400,000 shares of the
Company's $.10 par value common stock plus closing and related costs. PMSI is
a leading nationwide provider of medical cost containment and managed care
services to workers' compensation payors and claimants. The acquisition was
accounted for as a purchase and was not material to the Company's financial
position or results of operations.
(iv) In April 1995, the Company announced that its Board of Directors had
preliminarily approved a plan to spin off to its stockholders approximately 80%
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 as well as mail
order pharmaceutical services to workers' compensation payors, claimants and
employers. In addition, the Company announced that it was also contemplating a
public offering of up to 19.9% of PCA's common stock. Subsequently, the
Company disclosed that certain operational difficulties at PCA were adversely
affecting PCA's operating results and that it had made changes in PCA's
management and certain of PCA's operational and pricing policies to address
these difficulties. The Company is evaluating the PCA spin-off in light of
these developments as well as considering other strategic alternatives for PCA.
The Board of Directors has made no commitment to a formal plan to dispose of
the common stock of PCA, and there can be no assurance that the PCA spin-off or
any other strategic transaction will occur.
(v) On November 9, 1995, the Company filed a Registration Statement with
the Securities and Exchange Commission relating to a proposed underwritten
public offering (the "Offering") by the Company of $150,000,000 aggregate
principal amount of unsecured senior notes (the "Senior Notes"). The Company
intends to use the net cash proceeds from this Offering to redeem all of the
outstanding 14 1/4% Senior Secured Notes, to prepay certain scheduled
maturities under various bank credit agreements and for general corporate
purposes. The Senior Notes will be guaranteed by substantially all of the
Company's subsidiaries and will impose on the Company certain financial tests
and restrictive covenants. No assurance can be given that this Offering will
be consummated.
Effective November 1, 1995, the Company exercised its option to exchange
(the "Exchange") all of the outstanding shares of its $2.75 Cumulative
Convertible Exchangeable Preferred Stock (liquidation preference $50 per share)
(the "Preferred Stock") for $150,000,000 aggregate principal amount of its
5 1/2% Convertible Subordinated Debentures due August 1, 2018 (the "5 1/2%
Subordinated Debentures"). The Company issued $50 principal amount of 5 1/2%
Subordinated Debentures in exchange for each share of Preferred Stock. All
holders of Preferred Stock were required to participate in the Exchange. The
5 1/2% Subordinated Debentures contain conversion and optional redemption
provisions substantially identical to those of the Preferred Stock. Had the
Exchange been completed prior to January 1, 1995, the pro forma net income per
share for the three-month and nine-month periods ended September 30, 1995 would
have been $.24 and $.56, respectively.
In June 1995, the Company issued $25,000,000 aggregate principal amount of
taxable revenue bonds ("Series 1995 Bonds"), which require semi-annual
interest-only payments at the rate of 6.88% per annum with respect to
$7,000,000 of such bonds and interest-only payments at the rate of 7.24% per
annum with respect to $18,000,000 of such bonds. The Series 1995 Bonds require
a $7,000,000 principal payment in June 2000, mature in June 2005 and are
secured by a letter of credit.
(vi) 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.
6
<PAGE> 8
BEVERLY ENTERPRISES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
(vii) 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, American Transitional Hospitals, Inc., Beverly Indemnity, Ltd. and
Beverly REMIC Depositor, Inc. Beverly Delaware (the parent) provides
financial, administrative and legal services to these subsidiaries, including
BHRS, for which it charges 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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- ---------------------------
1995 1994 1995 1994
----------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Total revenues . . . . . . . . . . . . . . . . . . . $ 709,455 $ 767,101 $ 2,109,660 $ 2,216,204
Total costs and expenses . . . . . . . . . . . . . . 673,154 732,555 2,031,519 2,130,735
Net income . . . . . . . . . . . . . . . . . . . . . 22,506 23,145 48,447 57,264
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, 1995 DECEMBER 31, 1994
--------------------------- --------------------------
<S> <C> <C>
Current assets . . . . . . . . . . . . . . . . . . . $ 432,903 $ 577,307
Long-term assets . . . . . . . . . . . . . . . . . . 1,406,195 1,695,216
Current liabilities . . . . . . . . . . . . . . . . . 309,303 402,463
Long-term liabilities . . . . . . . . . . . . . . . . 790,747 1,071,276
</TABLE>
7
<PAGE> 9
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1995
(UNAUDITED)
GENERAL
Health care system reform and concerns over rising Medicare and Medicaid
costs continue to be high priorities for the federal and certain state
governments. Although no comprehensive health care, Medicare or Medicaid
reform legislation has yet been implemented, pressures to contain costs and the
active discussion and issues raised by the Clinton Administration, Congress and
various other groups have impacted the health care delivery system. In October
1995, both the U.S. House of Representatives and the U.S. Senate approved
bills that would reshape the Medicare and Medicaid programs. These complex
bills, as currently passed, propose significant reductions in the overall rate
of Medicare and Medicaid spending growth. There is active discussion
concerning these proposals and the form of any final legislation signed into
law could differ significantly from current proposals. The impact of currently
proposed legislation on the Company is not readily determinable. However, in
their currently proposed form, such legislation and proposals could have a
material adverse effect on the Company's future financial position, results of
operations and cash flows.
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, the availability of nursing, therapy and other 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 above, 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.
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," which requires impairment losses to be recognized
for long-lived assets used in operations when indicators of impairment are
present and the undiscounted cash flows are not sufficient to recover the
assets' carrying amount. The impairment loss is measured by comparing the fair
value of the asset to its carrying amount. The Company will be required to
adopt Statement No. 121 during the first quarter of 1996. Due to the
significant number of operating facilities the Company maintains, and the
extensive number of estimates that must be made to assess the impact of
Statement No. 121, the effect of adoption on the Company's financial statements
has not yet been determined, but is expected to be material.
OPERATING RESULTS
THIRD QUARTER 1995 COMPARED TO THIRD QUARTER 1994
Net income was $24,778,000 for the third quarter of 1995, as compared to net
income of $23,496,000 for the same period in 1994. Income before provision for
income taxes was $39,965,000 for the third quarter of 1995, as compared to
$35,069,000 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.
8
<PAGE> 10
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
Net operating revenues and operating and administrative costs increased
approximately $71,600,000 and $58,100,000, respectively, for the third 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 September 30, 1995 and 1994 ("same facility operations") of
approximately $34,500,000 and $26,900,000, respectively; increases in net
operating revenues and operating and administrative costs of approximately
$79,000,000 and $69,700,000, respectively, related to the expanded operations
of American Transitional Hospitals, Inc. ("ATH") and the acquisitions of
Insta-Care Holdings, Inc. ("Insta-Care") and the institutional pharmacy
subsidiaries of Synetic, Inc. ("Synetic pharmacies") in late 1994 as well as
Pharmacy Management Services, Inc. ("PMSI") in mid-1995; and decreases in net
operating revenues and operating and administrative costs of approximately
$41,900,000 and $38,500,000, respectively, due to the disposition of, or lease
terminations on, 28 facilities in 1995 and 77 facilities in 1994.
The increase in net operating revenues for same facility operations for the
third quarter of 1995, as compared to the same period in 1994, was due to the
following: approximately $26,600,000 due primarily to increases in Medicaid
room and board rates, and to a lesser extent, private and Medicare room and
board rates; approximately $9,700,000 due primarily to increases in
pharmacy-related revenues; approximately $2,200,000 due to increased ancillary
revenues as a result of providing additional ancillary services to the
Company's Medicare and private-pay patients; and approximately $2,300,000 due
to various other items. These increases in net operating revenues were
partially offset by approximately $6,300,000 due to a decrease in same facility
occupancy to 88.4% for the third quarter of 1995, as compared to 89.5% for the
same period in 1994.
The increase in operating and administrative costs for same facility
operations for the third quarter of 1995, as compared to the same period in
1994, was due to the following: approximately $32,100,000 due to increased
wages and related expenses (excluding pharmacy) principally due to higher wages
and greater benefits required 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 $4,900,000 due to increases in nursing
supplies and other variable costs; and approximately $9,900,000 due primarily
to increases in pharmacy-related costs and various other items. These
increases in operating and administrative costs were partially offset by
approximately $20,000,000 due to a decrease in contracted therapy services as a
result of hiring therapists on staff as opposed to contracting for their
services.
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 third quarter
of 1995 were approximately $243,600,000 and represented 29.2% of net operating
revenues, as compared to approximately $182,000,000 of ancillary revenues for
the same period in 1994 which represented 23.8% of net operating revenues for
the third quarter of 1994. The Company is pursuing further growth of ancillary
revenues through expansion of specialty services, such as rehabilitation
therapy and sales of pharmaceuticals. Due to the Company's continuing efforts
to bring therapists on staff as opposed to contracting for their services, and
the corresponding reduction in costs, the overall rate of growth in ancillary
revenues could be adversely impacted. See "-Liquidity and Capital Resources"
below.
Interest expense increased approximately $5,500,000 as compared to the same
period in 1994 primarily due to additional interest related to the issuance of
approximately $299,000,000 of long-term obligations primarily in conjunction
with certain acquisitions. Depreciation and amortization expense increased
approximately $3,300,000 as compared to the same period in 1994 primarily due
to acquisitions, capital additions and improvements and the opening of newly
constructed facilities, partially offset by a decrease due to the disposition
of, or lease terminations on, certain facilities.
9
<PAGE> 11
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
NINE MONTHS 1995 COMPARED TO NINE MONTHS 1994
Net income was $55,633,000 for the nine months ended September 30, 1995, as
compared to net income of $57,643,000 for the same period in 1994. Income
before provision for income taxes was $89,731,000 for the nine months ended
September 30, 1995, as compared to $86,034,000 for the same period in 1994.
Net operating revenues and operating and administrative costs increased
approximately $216,400,000 and $182,700,000, respectively, for the nine months
ended September 30, 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 nine-month periods ended September 30, 1995 and 1994 ("same
facility operations") of approximately $137,600,000 and $108,300,000,
respectively; increases in net operating revenues and operating and
administrative costs of approximately $185,800,000 and $168,900,000,
respectively, related to the expanded operations of ATH and the acquisitions of
Insta-Care and Synetic pharmacies in late 1994 as well as PMSI in mid-1995; and
decreases in net operating revenues and operating and administrative costs of
approximately $107,000,000 and $94,500,000, respectively, due to the
disposition of, or lease terminations on, 28 facilities in 1995 and 77
facilities in 1994.
The increase in net operating revenues for same facility operations for the
nine months ended September 30, 1995, as compared to the same period in 1994,
was due to the following: approximately $88,600,000 due primarily to increases
in Medicaid room and board rates, and to a lesser extent, private and Medicare
room and board rates; approximately $28,800,000 due to increased ancillary
revenues as a result of providing additional ancillary services to the
Company's Medicare and private-pay patients; approximately $25,000,000 due
primarily to increases in pharmacy-related revenues; and approximately
$9,000,000 due to various other items. These increases in net operating
revenues were partially offset by approximately $13,800,000 due to a decrease
in same facility occupancy to 88.6% for the nine months ended September 30,
1995, as compared to 89.4% for the same period in 1994.
The increase in operating and administrative costs for same facility
operations for the nine months ended September 30, 1995, as compared to the
same period in 1994, was due to the following: approximately $98,100,000 due
to increased wages and related expenses (excluding pharmacy) principally due to
higher wages and greater benefits required 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 $23,600,000 due to
increases in nursing supplies and other variable costs; and approximately
$19,600,000 due primarily to increases in pharmacy-related costs and various
other items. These increases in operating and administrative costs were
partially offset by approximately $33,000,000 due to a decrease in contracted
therapy services as a result of hiring therapists on staff as opposed to
contracting for their services.
The Company's overall ancillary revenues for the nine months ended September
30, 1995 were approximately $706,500,000 and represented 29.2% of net operating
revenues, as compared to approximately $528,200,000 of ancillary revenues for
the same period in 1994 which represented 24.0% of net operating revenues for
the nine months ended September 30, 1994.
Interest expense increased approximately $16,600,000 as compared to the same
period in 1994 primarily due to additional interest related to the issuance of
approximately $308,000,000 of long-term obligations primarily in conjunction
with certain acquisitions. Depreciation and amortization expense increased
approximately $12,900,000 as compared to the same period in 1994 primarily due
to acquisitions, capital additions and improvements and the opening of newly
constructed facilities, partially offset by a decrease due to the disposition
of, or lease terminations on, certain facilities.
10
<PAGE> 12
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1995, the Company had approximately $55,700,000 in cash and
cash equivalents and net working capital of approximately $245,200,000. The
Company anticipates that approximately $30,800,000 of its existing cash at
September 30, 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 $98,600,000 of unused commitments under its Revolver/Letter of
Credit Facility as of September 30, 1995.
Net cash provided by operating activities for the nine months ended
September 30, 1995 was approximately $130,400,000, an increase of approximately
$43,700,000 from the prior year. Net cash used for investing and financing
activities were approximately $138,500,000 and $4,200,000, respectively, for
the nine months ended September 30, 1995. The Company primarily used cash
generated from operations to fund capital expenditures and construction
totaling approximately $124,600,000. The Company received cash proceeds of
approximately $15,000,000 from the dispositions of facilities and other assets
and approximately $25,000,000 from the issuance of long-term obligations. Such
proceeds, along with borrowings under the Company's revolving credit facility,
were primarily used to repay approximately $35,800,000 of long-term obligations
and to fund acquisitions of approximately $30,700,000. Approximately
$22,600,000 of net cash proceeds from the sales of certain facilities and other
assets during September 1995 was received in October 1995.
On November 9, 1995, the Company filed a Registration Statement with the
Securities and Exchange Commission relating to a proposed underwritten public
offering (the "Offering") by the Company of $150,000,000 aggregate principal
amount of unsecured senior notes (the "Senior Notes"). The Company intends to
use the net cash proceeds from this Offering to redeem all of the outstanding
14 1/4% Senior Secured Notes, to prepay certain scheduled maturities under
various bank credit agreements and for general corporate purposes. The Senior
Notes will be guaranteed by substantially all of the Company's subsidiaries and
will impose on the Company certain financial tests and restrictive covenants.
No assurance can be given that this Offering will be consummated.
Effective November 1, 1995, the Company exercised its option to exchange
(the "Exchange") all of the outstanding shares of its $2.75 Cumulative
Convertible Exchangeable Preferred Stock (liquidation preference $50 per share)
(the "Preferred Stock") for $150,000,000 aggregate principal amount of its
5 1/2% Convertible Subordinated Debentures due August 1, 2018 (the "5 1/2%
Subordinated Debentures"). The Company issued $50 principal amount of 5 1/2%
Subordinated Debentures in exchange for each share of Preferred Stock. All
holders of Preferred Stock were required to participate in the Exchange. The 5
1/2% Subordinated Debentures contain conversion and optional redemption
provisions substantially identical to those of the Preferred Stock. Had the
Exchange been completed prior to January 1, 1995, the pro forma net income per
share for the three-month and nine-month periods ended September 30, 1995 would
have been $.24 and $.56, respectively.
In June 1995, the Company completed its acquisition of Pharmacy Management
Services, Inc. ("PMSI") in exchange for approximately 12,400,000 shares of the
Company's $.10 par value common stock plus closing and related costs. PMSI is
a leading nationwide provider of medical cost containment and managed care
services to workers' compensation payors and claimants. The acquisition was
accounted for as a purchase.
In June 1995, the Company issued $25,000,000 aggregate principal amount of
taxable revenue bonds ("Series 1995 Bonds"), which require semi-annual
interest-only payments at the rate of 6.88% per annum with respect to
$7,000,000 of such bonds and interest-only payments at the rate of 7.24% per
annum with respect to $18,000,000 of such bonds. The Series 1995 Bonds require
a $7,000,000 principal payment in June 2000, mature in June 2005 and are
secured by a letter of credit.
11
<PAGE> 13
BEVERLY ENTERPRISES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEPTEMBER 30, 1995
(UNAUDITED)
In April 1995, the Company announced that its Board of Directors had
preliminarily approved a plan to spin off to its stockholders approximately 80%
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 as well as mail
order pharmaceutical services to workers' compensation payors, claimants and
employers. In addition, the Company announced that it was also contemplating a
public offering of up to 19.9% of PCA's common stock. Subsequently, the
Company disclosed that certain operational difficulties at PCA were adversely
affecting PCA's operating results and that it had made changes in PCA's
management and certain of PCA's operational and pricing policies to address
these difficulties. The Company is evaluating the PCA spin-off in light of
these developments as well as considering strategic alternatives for PCA. The
Board of Directors has made no commitment to a formal plan to dispose of the
common stock of PCA, and there can be no assurance that the PCA spin-off or any
other strategic transaction will occur.
The Company believes that its existing cash and cash equivalents, working
capital from operations, net cash proceeds from the Offering, 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 $59,100,000, to make normal recurring capital
additions and improvements for the twelve months ending September 30, 1996 of
approximately $118,000,000, to make selective acquisitions, including the
purchase of previously leased facilities, and to meet working capital
requirements.
12
<PAGE> 14
PART II
BEVERLY ENTERPRISES, INC.
OTHER INFORMATION
SEPTEMBER 30, 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
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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)
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)
13
<PAGE> 15
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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)
4.20 Amendment, dated as of April 6, 1995, to the Rights Agreement between
Beverly Enterprises, Inc. and The Bank of New York, as Rights Agent
(incorporated by reference to Exhibit 4.20 to Beverly Enterprises,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30,
1995)
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))
14
<PAGE> 16
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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))
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)
15
<PAGE> 17
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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* Amendment Number One to the Employment Contract dated as of June 19,
1995 between Beverly Enterprises, Inc. and David R. Banks
(incorporated by reference to Exhibit 10.29 to Beverly Enterprises,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30,
1995)
10.30* 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))
10.31* 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))
10.32* 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)
10.33* 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))
10.34* 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))
10.35 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)
10.36 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)
10.37 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)
10.38 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)
10.39 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)
10.40 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)
10.41 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)
10.42 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))
10.43 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))
10.44 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))
16
<PAGE> 18
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.45 Eleventh Amendment dated as of March 27, 1995 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.44 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995)
10.46 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))
10.47 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))
10.48 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))
10.49 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)
10.50 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)
10.51 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))
10.52 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))
10.53 Fifth Amendment dated as of December 30, 1994 to the Nippon Credit
Agreement (incorporated by reference to Exhibit 10.52 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995)
10.54 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))
10.55 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))
10.56 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)
10.57 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))
10.58 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 nine months ended September 30, 1995
* Exhibits 10.1 through 10.34 are the management contracts,
compensatory plans, contracts and arrangements in which any
director or named executive officer participates.
ITEM 6(b). REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the three
months ended September 30, 1995.
17
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BEVERLY ENTERPRISES, INC.
Registrant
Dated: November 13, 1995 By: SCOTT M. TABAKIN
---------------------------------
Scott M. Tabakin
Senior Vice President, Controller,
Chief Accounting Officer and
Acting Chief Financial Officer
18
<PAGE> 20
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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)
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)
<PAGE> 21
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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)
4.20 Amendment, dated as of April 6, 1995, to the Rights Agreement between
Beverly Enterprises, Inc. and The Bank of New York, as Rights Agent
(incorporated by reference to Exhibit 4.20 to Beverly Enterprises,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30,
1995)
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))
<PAGE> 22
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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))
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)
<PAGE> 23
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
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* Amendment Number One to the Employment Contract dated as of June 19,
1995 between Beverly Enterprises, Inc. and David R. Banks
(incorporated by reference to Exhibit 10.29 to Beverly Enterprises,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30,
1995)
10.30* 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))
10.31* 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))
10.32* 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)
10.33* 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))
10.34* 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))
10.35 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)
10.36 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)
10.37 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)
10.38 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)
10.39 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)
10.40 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)
10.41 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)
10.42 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))
10.43 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))
10.44 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))
<PAGE> 24
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.45 Eleventh Amendment dated as of March 27, 1995 to the LTCB Credit
Agreement (incorporated by reference to Exhibit 10.44 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995)
10.46 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))
10.47 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))
10.48 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))
10.49 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)
10.50 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)
10.51 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))
10.52 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))
10.53 Fifth Amendment dated as of December 30, 1994 to the Nippon Credit
Agreement (incorporated by reference to Exhibit 10.52 to Beverly
Enterprises, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995)
10.54 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))
10.55 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))
10.56 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)
10.57 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))
10.58 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 nine months ended September 30, 1995
* Exhibits 10.1 through 10.34 are the management contracts,
compensatory plans, contracts and arrangements in which any
director or named executive officer participates.
<PAGE> 1
BEVERLY ENTERPRISES, INC.
EXHIBIT 11.1
COMPUTATION OF NET INCOME PER SHARE
THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- -------------------------
1995 1994 1995 1994
--------- -------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY:
Net income $ 24,778 $ 23,496 $ 55,633 $ 57,643
Preferred stock dividends (2,063) (2,063) (6,188) (6,188)
--------- --------- --------- ---------
Net income applicable to common shares $ 22,715 $ 21,433 $ 49,445 $ 51,455
========= ========= ========= =========
Applicable common shares:
Weighted average outstanding shares during the period 98,257 85,527 90,121 85,374
Weighted average shares issuable upon exercise of
common stock equivalents outstanding (principally
stock options) using the "treasury stock" method 1,622 1,537 1,615 1,640
--------- --------- --------- ---------
Total 99,879 87,064 91,736 87,014
========= ========= ========= =========
Net income per share of common stock $ 0.23 $ 0.25 $ 0.54 $ 0.59
========= ========= ========= =========
FULLY DILUTED:
Net income $ 24,778 $ 23,496 $ 55,633 $ 57,643
Reduction of interest and amortization expenses resulting
from assumed conversion of 7.625% convertible
subordinated debentures --(a) --(a) --(a) --(a)
Reduction of interest and amortization expenses resulting
from assumed conversion of zero coupon notes --(a) --(a) --(a) --(a)
Less applicable income taxes -- -- -- --
--------- --------- --------- ---------
Adjusted net income 24,778 23,496 55,633 57,643
Preferred stock dividends -- -- (6,188) --
--------- --------- --------- ---------
Adjusted net income applicable to common shares $ 24,778 $ 23,496 $ 49,445 $ 57,643
========= ========= ========= =========
Applicable common shares:
Weighted average outstanding shares during the period 98,257 85,527 90,121 85,374
Assumed conversion of cumulative convertible
exchangeable preferred stock 11,253 11,253 --(a) 11,253
Weighted average shares issuable upon exercise of
common stock equivalents outstanding (principally
stock options) using the "treasury stock" method 1,699 1,832 1,786 1,854
Assumed conversion of 7.625% convertible subordinated
debentures --(a) --(a) --(a) --(a)
Assumed conversion of zero coupon notes --(a) --(a) --(a) --(a)
--------- --------- --------- ---------
Total 111,209 98,612 91,907 98,481
========= ========= ========= =========
Net income per share of common stock $ 0.22 $ 0.24 $ 0.54 $ 0.59
========= ========= ========= =========
</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 SEPTMEBER 30,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 55,678
<SECURITIES> 0
<RECEIVABLES> 534,772<F1>
<ALLOWANCES> 23,056<F1><F2>
<INVENTORY> 61,582
<CURRENT-ASSETS> 691,361
<PP&E> 1,854,369
<DEPRECIATION> 625,173
<TOTAL-ASSETS> 2,544,964
<CURRENT-LIABILITIES> 446,148
<BONDS> 897,103
<COMMON> 10,236
0
150,000
<OTHER-SE> 870,445
<TOTAL-LIABILITY-AND-EQUITY> 2,544,964
<SALES> 2,420,899
<TOTAL-REVENUES> 2,431,166
<CGS> 0
<TOTAL-COSTS> 2,199,581
<OTHER-EXPENSES> 77,982
<LOSS-PROVISION> 0<F3>
<INTEREST-EXPENSE> 63,872
<INCOME-PRETAX> 89,731
<INCOME-TAX> 34,098
<INCOME-CONTINUING> 55,633
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,633
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
<FN>
<F1>Excludes $48,823 of long-term notes receivable.
<F2>Excludes $6,386 of allowance for long-term notes receivable.
<F3>Included in Total costs and expenses line.
</FN>
</TABLE>
