FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended Septembeer 30, 2000
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended September 30, 2000 Commission file number 000-17596
Meridian Healthcare Growth and Income Fund Limited Partnership
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1549486
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
225 East Redwood Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (410) 727-4083
N/A
(Former Name, Former Address, and Former Fiscal Year,
if Changed Since Last Report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
INDEX
Page No.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS 2
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Earnings 4
Consolidated Statements of Partners' Capital 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 13
Part II. Other Information
Item 1. through Item 6. 13
Signatures 14
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Cautionary Statement Regarding Forward Looking Statements
Certain statements contained herein, including certain statements in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" concerning the Fund's business outlook or future economic
performances, anticipated profitability, revenues, expenses or other financial
items together with other statements that are not historical facts are
"forward-looking statements" as that term is defined under the Federal
Securities Law. Forward-looking statements are necessarily estimates reflecting
the best judgement of the party making such statements based upon correct
information and involve a number of risks, uncertainties and other factors which
could cause actual results to differ materially from those stated in such
statements. Risks, uncertainties and factors which could affect the accuracy of
such forward looking statements are identified in the Fund's Prospectus and the
Fund's Registration Statement filed by the Fund with the Securities and Exchange
Commission, and forward looking statements contained herein or in other public
statements of the Fund should be considered in light of those factors. There can
be no assurance that factors will not affect the accuracy of such forward
looking statements.
-2-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30,
2000 December 31,
(Unaudited) 1999
---------------- ----------------
Assets
Current Assets
<S> <C> <C>
Cash and cash equivalents $ 3,105 $ 2,511
Accounts receivable, net 8,239 7,224
Estimated third-party payor settlements 1,012 342
Prepaid expenses 748 478
---------------- ----------------
Total current assets 13,104 10,555
---------------- ----------------
Property and equipment, net of accumulated depreciation 32,807 33,346
---------------- ----------------
Other assets
Loan aquisition costs, net 403 -
Goodwill, net 4,555 4,745
---------------- ----------------
4,958 4,745
---------------- ----------------
Total assets $ 50,869 $ 48,646
================ ================
Liabilities and Partners' Capital
Current liabilities
Current portion of long-term debt $ 367 $ 22,605
Accrued compensation and related costs 573 778
Accounts payable and other accrued expenses 4,269 2,926
Estimated third-party payor settlements 2,007 1,934
---------------- ----------------
Total current liabilities 7,216 28,243
---------------- ----------------
Long-term debt 23,505 -
Deferred management fee payable 927 894
Loan payable to the Development General Partner 1,176 1,137
---------------- ----------------
25,608 2,031
---------------- ----------------
Partners' capital
General partners (135) (132)
Assignee limited partners; 1,540,040
units issued and outstanding 18,180 18,504
---------------- ----------------
Total partners' capital 18,045 18,372
---------------- ----------------
Total liabilities and
partners' capital $ 50,869 $ 48,646
================ ================
</TABLE>
See accompanying notes to consolidated financial statements
-3-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Statements of Earnings
(Unaudited)
(Dollars in thousands except per unit amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------------ -----------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
---------------- ---------------- ---------------- ----------------
Revenues
<S> <C> <C> <C> <C>
Medicaid and Medicare patients $ 11,190 $ 10,210 $ 33,057 $ 29,995
Private patients 2,870 2,397 7,989 7,480
Investment and other income 94 38 247 103
---------------- ---------------- ---------------- ----------------
14,154 12,645 41,293 37,578
---------------- ---------------- ---------------- ----------------
Expenses
Operating, including $2,126, $1,718,
$6,206 and $4,563 to related parties 11,110 10,067 32,506 29,383
Management and administration fees
to related parties 917 822 2,679 2,442
General and administrative 222 232 719 720
Depreciation and amortization 544 522 1,675 1,506
Interest expense 614 427 1,562 1,249
---------------- ---------------- ---------------- ----------------
13,407 12,070 39,141 35,300
---------------- ---------------- ---------------- ----------------
Net earnings $ 747 $ 575 $ 2,152 $ 2,278
================ ================ ================ ================
Net earnings per unit of assignee
limited partnership interest-basic
(computed based on 1,540,040
units) $ 0.48 $ 0.37 $ 1.38 $ 1.46
============== ============== ============== ==============
</TABLE>
See accompanying notes to consolidated financial statements
-4-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Statements of Partners' Capital
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
Dollars in thousands
<TABLE>
<CAPTION>
Assignee
General Limited
Partners Partners Total
---------------- ---------------- ----------------
<S> <C> <C> <C>
Balance at December 31, 1999 $ (132) $ 18,504 $ 18,372
Net earnings 22 2,130 2,152
Distributions to partners (25) (2,454) (2,479)
---------------- ---------------- ----------------
Balance at September 30, 2000 $ (135) $ 18,180 $ 18,045
================ ================ ================
Balance at December 31, 1998 $ (128) $ 18,941 $ 18,813
Net earnings 23 2,255 2,278
Distributions to partners (25) (2,454) (2,479)
---------------- ---------------- ----------------
Balance at September 30, 1999 $ (130) $ 18,742 $ 18,612
================ ================ ================
</TABLE>
See accompanying notes to consolidated financial statements
-5-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMTIED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30,
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
2000 1999
--------------- ----------------
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 2,152 $ 2,278
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation and amortization 1,675 1,506
Minority interest in net earnings of operating
partnerships 24 26
Increase in loan payable to Development General Partner 39 39
Increase in deferred management fee payable 33 33
Change in other assets and liabilities
Accounts receivable (1,039) (273)
Estimated third-party payor settlements (597) 364
Prepaid expenses (270) (7)
Accrued compensation and related costs (205) (481)
Accounts payable and other accrued expenses 1,343 (794)
--------------- ----------------
Net cash provided by operating activities 3,155 2,691
--------------- ----------------
Cash flows from investing activities-
additions to property and equipment (836) (1,051)
--------------- ----------------
Cash flows from financing activities
Deferred financing fees (84) -
Loan acquisition costs (429) -
Net proceeds from issuance of long-term debt 24,000 -
Repayment of long-term debt (22,733) (558)
Distributions to partners (2,479) (2,479)
--------------- ----------------
Net cash used in financing activities (1,725) (3,037)
--------------- ----------------
Net increase (decrease) in cash and cash equivalents 594 (1,397)
Cash and cash equivalents
Beginning of period 2,511 2,928
--------------- ----------------
End of period $ 3,105 $ 1,531
=============== ================
</TABLE>
See accompanying notes to consolidated financial statements
-6-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
September 30, 2000
(Unaudited)
NOTE 1 - THE FUND AND BASIS OF PREPARATION
The Fund owns 98.99% limited partnership interests in each of the seven
operating partnerships. The Fund through its seven operating partnerships,
derives substantially all of its revenue from extended healthcare provided to
nursing center residents including room and board, nursing care, drugs and other
medical services.
The accompanying consolidated financial statements of Meridian Healthcare Growth
and Income Fund Limited Partnership (the "Fund") do not include all of the
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles. The
unaudited interim consolidated financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair statement of the
results for the interim periods presented. All such adjustments are of a normal
recurring nature. The unaudited interim financial information contained in the
consolidated financial statements should be read in conjunction with the
consolidated financial statements contained in the 1999 Annual Report.
NOTE 2 - RELATED PARTY TRANSACTIONS
On June 22, 2000, Genesis Health Ventures, Inc. (Genesis) and certain of its
subsidiaries and affiliates filed petitions for Chapter 11 bankruptcy protection
with the U.S. Bankruptcy Court in Wilmington, Delaware. Meridian Healthcare,
Inc., which manages the Fund's nursing centers under the terms of management
agreements described below, is a wholly-owned subsidiary of Genesis and was
named as a debtor affiliate in the bankruptcy filing. Certain other subsidiaries
of Genesis which supply the Fund's nursing centers with drugs, medical supplies,
and other services as described below were also included in the bankruptcy
filing. The Genesis bankruptcy filing has not had an impact on the Fund's
operations, results of operations or financial position.
The Fund is obligated to pay the Administrative General Partner an annual
administration fee of the greater of $75,000 per year or 1/2 of 1% of the Fund's
annual revenues. The nursing centers owned by the operating partnerships are
managed by Meridian Healthcare, Inc., an affiliate of the Development General
Partner, under the terms of existing management agreements which provide for
management fees equal to 6% of the annual revenues of each nursing center.
Certain of the operating partnerships also purchase drugs and medical supplies
and other services from affiliates of the Development General Partner. Such
purchases are in turn billed to patients or third party payors at prices which
on average approximate the nursing center's cost.
Transactions with these related parties for the three and nine months ended
September 30, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
<S> <C> <C> <C> <C>
Management and administration fees $ 917,000 $ 822,000 $2,679,000 $2,442,000
Drug and medical supplies purchases 898,000 763,000 2,621,000 2,133,000
Nursing and rehabilitation services 1,228,000 955,000 3,585,000 2,430,000
Interest expense on borrowings 23,000 21,000 72,000 67,000
</TABLE>
The Development General Partner loaned the Fund $597,000, as required by the
Cash Flow Deficit Guaranty Agreement, to support the operating deficits
generated by the Moorsesville, Salisbury and Woodlands nursing centers during
each center's first two years of operations subsequent to the Fund's acquisition
of partnership interests. Loans outstanding under an arrangement, including
accumulated interest from inception of the loan at 9% per annum, were $1,176,000
at September 30, 2000 and $1,137,000 at December 31, 1999. The Fund is obligated
to repay these loans when certain specified financial criteria are met, the most
significant of which is the payment of a preferred return to the assignee
limited partners as defined in the Fund's partnership agreement.
-7-
<PAGE>
Notes to Consolidated Financial Statements
September 30, 2000
(Unaudited)
NOTE 3 - DEBT
The Fund closed its mortgage loan refinancing with a new bank for loans totaling
$24,000,000 on June 12, 2000. The renewal terms became effective on June 12,
2000 and provide for a term of five years at an interest rate of 9.75%. Monthly
payments of $229,886 are based on a 25-year amortization schedule with a balloon
payment due at the end of the 5-year term. Prior to the effective date of the
new loan terms on June 12, 2000, the mortgage loans bear interest at LIBOR plus
1.55%.
The Fund also replaced its $4,000,000 line of credit facility with the same
lender under the terms similar to the mortgage loan terms above.
NOTE 4 - NET EARNINGS PER UNIT OF ASSIGNEE LIMITED PARTNERSHIP INTEREST
Net earnings per unit of assignee limited partnership interest is disclosed on
the Consolidated Statements of Operations and is based upon 1,540,040 units.
-8-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Fund closed its mortgage loan refinancing with a new bank for loans
totaling $24,000,000 on June 12, 2000. The renewal terms became effective on
June 12, 2000 and provide for a term of five years at an interest rate of 9.75%.
Monthly payments are based on a 25-year amortization schedule with a balloon
payment due at the end of the 5-year term.
The Fund also replaced its $4,000,000 line of credit facility with the same
lender under terms similar to the mortgage loan terms described above.
The Fund's working capital (excluding the current portion of long-term
debt) increased $109,000 to $6,255,000 at September 30, 2000 as compared to
$6,146,000 at June 30, 2000. The Fund has sufficient liquid assets and other
available credit resources to satisfy its operating expenditures and anticipated
routine capital improvements at each of the seven nursing home facilities.
Cash flow from operating activities was $3,155,000 for the nine-month
period ended September 30, 2000 as compared to $2,691,000 for the same period of
1999.
Cash used from investing activities for the nine-month period ended
September 30, 2000 was $836,000 and included improvements to the Fund's seven
operating facilities. Similar improvements made during the first nine months of
1999 were $1,051,000.
Cash flows from financing activities through the first half of 2000
included proceeds from the issuance of the Fund's new long-term debt of
$24,000,000, repayment of long term debt of $22,733,000, an extension fee paid
to the prior lender of $84,000, new loan acquisition costs of $429,000 and
distributions to partners totaling $2,479,000.
The Fund believes that the short-term liquidity needs will be met through
expected cash flow from operations and available working capital from the
existing line of credit.
Between 1988 and 1999 the Development General Partner loaned the Fund
$597,000 to support operating deficits generated by the Mooresville, Salisbury
and Woodlands nursing centers during each centers' first two years of operation.
Loans outstanding under this arrangement, including interest at 9% per annum,
were $1,176,000 at September 30, 2000.
On November 13, 2000 the Fund will make its third quarter 2000 distribution
to partners of $826,410. This distribution was fully funded by third quarter
2000 operations. Management believes based on the 2000 budget that operations
from the seven nursing centers will be sufficient to fund a similar quarterly
distribution for the fourth quarter. Preliminary discussions regarding 2001
operations would indicate a similar quarterly distribution policy into 2001.
The major challenge to the Fund in the foreseeable future is to control
operating expenses in light of Medicare's conversion to the Prospective Payment
System, to maintain a quality mix of patients and to increase the overall census
at each of the facilities.
-9-
<PAGE>
Results of Operations
On June 22, 2000, Genesis Health Ventures, Inc. (Genesis) and certain of
its subsidiaries and affiliates filed petitions for Chapter 11 bankruptcy
protection with the U.S. Bankruptcy Court in Wilmington Delaware. Meridian
Healthcare, Inc., which manages the Fund's nursing centers under the terms of
management agreements described in note 2 of the Fund's September 30, 2000
unaudited consolidated financial statements, is a wholly-owned subsidiary of
Genesis and was named as a debtor affiliate in the bankruptcy filing. Certain
other subsidiaries of Genesis which supply the Fund's nursing centers with
drugs, medical supplies, and other services were also included in the bankruptcy
filing. The Genesis bankruptcy filing has not had an impact on the Fund's
operations, results of operations or financial position nor is it expected to.
Three Months Ended September 30, 2000 vs Three Months ended September 30, 1999
Net earnings were $747,000 for the three months ended September 30, 2000 as
compared to $575,000 for the same period in the prior year representing a
increase of $172,000 or 30%.
The Fund's third quarter 2000 revenues of $14,154,000 increased $1,509,000
or 11.9% over the same period in 1999. Medicare and Medicaid revenues increased
$980,000, Private revenue increased $473,000 with the remaining increase coming
from Investment and other Income.
The $980,000 increase in Medicaid and Medicare revenue for the three months
ended September 30, 2000 as compared to the same period in 1999 is primarily the
result of Medicaid and Medicare rate increases. Medicaid revenue for the three
months ended September 30, 2000 increased $837,000 over the same period in 1999.
This increase is primarily due to an overall Medicaid rate increase of
approximately 13.7% driven primarily by the four Maryland centers. The Maryland
centers received their annual rate adjustment in July of 1999 and a second
Medicaid rate increase in October 1999 which was implemented to reflect a
modification to the state reimbursement program. Medicare revenue increased
$143,000 for the third quarter of 2000 compared to the same period in the prior
year. The increase in Medicare revenue is primarily due to a 2.3% increase in
Medicare census and a rate increase of 2.2%.
The $473,000 increase in private revenue was primarily the result of higher
rates from private pay and insurance customers. Rates paid by private paying
customers increased 16.6% for the third quarter of 2000 compared to 1999,
primarily due to increased ancillary utilization and inflationary room and board
rate increases. Rates received from insurance companies increased 30.4% for the
three months ended September 30, 2000 compared to the same period in 1999,
primarily due to an increase in the clinical needs of the customers being
referred from the insurance payers.
Third quarter 2000 expenses of $13,407,000 increased $1,337,000 or 11.1%
from the three months ended September 30, 1999.
Operating expenses increased $1,043,000 or 10.4% for the three months ended
September 30, 2000 compared to the same period in 1999, primarily due to nursing
and ancillary expenses. Nursing expenses overall increased $366,000 for the
third quarter 2000 compared to the same period in 1999. This increase is due to
increased salary and wages and an increase in the utilization of temporary nurse
staffing. For the quarter ended September 30, 2000 compared to the same period
in the prior year nursing salary and wages increased $175,000 and temporary
nurse staffing expenses increased $147,000. The increases in salary and wages
and the increased utilization of temporary nurse staffing is the result of an
overall shortage of nurses within the healthcare industry. Ancillary expenses
overall increased $357,000 for the third quarter of 2000 compared to the same
period in 1999. This increase is primarily due to the increasing utilization of
therapy services and the increasing cost of prescription drugs and medical
supplies. Therapy costs increased $189,000 and drug and medical supply costs
increased $157,000 in the third quarter of fiscal year 2000 as compared to the
same period in 1999. The remaining increase in operating cost is due to higher
bad debt charges and general inflationary cost increases.
-10-
<PAGE>
Results of operations (continued)
Management and administrative fees increased $95,000 or 11.6% for the third
quarter of 2000 as compared to the same period in 1999. This growth in these
fees is caused by increased management fees expense. The growth in the
management fee is a result of increases in revenues as the management fee is
calculated as a percentage of the Fund's net revenue.
Interest expense for the third quarter of 2000 compared to the third
quarter of 1999 increased $187,000 or 43.8%. This increase is a result of the
refinancing of the Fund's mortgage which increased both the principal balance
and raised the interest rate. The refinancing was effective June 12, 2000.
Nine Months Ended September 30, 2000 vs Nine Months Ended September 30, 1999
Net earnings for the nine months ended September 30, 2000 were $2,152,000
representing a decrease of $126,000 or 5.5% compared to the same period in 1999.
Fund revenues of $41,293,000 increased $3,715,000 or 9.9% for the nine
months ended September 30, 2000 as compared to the same period in the prior
year. Medicaid and Medicare revenue increased $3,062,000 and Private revenue
increased $509,000 for the nine month period ended September 30, 2000 compared
to the same period in 1999.
The $3,062,000 increase in Medicaid and Medicare revenue for the nine
months ended September 30, 2000 as compared to the same period in 1999 is
primarily the result of a Medicaid rate increase and an increase in the number
of Medicare days. Medicaid revenue for the nine months ended September 30, 2000
increased $1,574,000 over the same period in 1999. This increase was primarily
due to an overall Medicaid rate increase of approximately 11.7% driven primarily
by the four Maryland centers. The Maryland centers received their annual rate
adjustment in July of 1999 and a second Medicaid rate increase in October 1999
which was implemented to reflect a modification to the state reimbursement
program. Medicare revenue increased $1,488,000 for the first nine months of
fiscal year 2000 compared to the same period in the prior year. The increase in
Medicare revenue is primarily due to the increase in Medicare census and the
increased utilization of Medicare Part B services. The Medicare census increased
3,952 days or 12.4% for the nine months end September 30, 2000 compared to the
nine months ended September 30, 1999. Medicare Part B revenue of $465,000
increased $196,118 or 72.8% due to an increase in Part B utilization.
Overall expenses increased $3,841,000 or 10.9% to $39,141,000 for the nine
months ended September 30, 2000 as compared to $35,300,000 for the same period
in 1999.
Operating expenses of $32,506,0000 increased $3,123,000 or 10.6% for the
nine months ended September 30, 2000 as compared to the nine months ended
September 30, 1999. This increase is primarily due to the increased cost of
nursing services and ancillary costs. Nursing costs increased $1,247,000 for the
nine months ended September 30, 2000 as compared to the same period in 1999.
This increase is primarily due to increases in salary and wages and the
increased utilization of temporary nurse staffing. Salary and wage expense for
nurses increased $297,000 and temporary nurse staffing expense increased
$892,000 for the nine months ended September 30, 2000 compared to the same
period in the prior year. The increase in nursing salary and wages and
utilization of temporary nurse staffing is a result of an overall shortage of
nurses within the healthcare industry. Ancillary expenses increased $1,121,000
or 27.6% for the nine months ended September 30, 2000 compared to the same
period in 1999. This increase is primarily due to the increase in the Medicare
census and the increased utilization of Part B ancillary services. The remaining
increase in operating costs is due to higher bad debt charges and general
inflationary cost increases.
Management and administrative fees increased $237,000 or 9.7% for the nine
months ended September 30, 2000 as compared to the same period in 1999. This
growth in these fees is caused by increased management fees expense. The growth
in the management fee is a result of increases in revenues as the management fee
is calculated as a percentage of the Fund's net revenue.
-11-
<PAGE>
Results of operations (continued)
Interest expense increased $313,000 for the nine months ended September
30, 2000 as compared to the same period in the prior year. The increase is the
result of increases in the Fund's variable interest rate on the mortgage notes
and refinancing of the mortgage increasing the beginning principal balance to
$24,000,000 at a higher interest rate. The refinancing was effective June 12,
2000.
Legislative and Regulatory Issues
Legislative and regulatory action has resulted in continuing changes in the
Medicare and Medicaid reimbursement programs. The changes have limited, and are
expected to continue to limit, payment increases under these programs. Also, the
timing of payments made under the Medicare and Medicaid programs is subject to
regulatory action and governmental budgetary constraints; in recent years, the
time period between submission of claims and payment has increased. Within the
statutory framework of the Medicare and Medicaid programs, there are substantial
areas subject to administrative rulings and interpretations which may further
affect payments made under those programs. Further, the federal and state
governments may reduce the funds available under those programs in the future or
require more stringent utilization and quality reviews of eldercare centers or
other providers. There can be no assurances that adjustments from Medicare or
Medicaid audits will not have a material adverse effect on the Fund.
-12-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
PART I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Fund's long-term debt was converted to a fixed interest mortgage loan
effective June 12, 2000 and therefore there is no longer any exposed market
risk.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities and Use of Proceeds
Inapplicable
Item 3. Defaults upon Senior Securities
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
Inapplicable
Item 5. Other Information
Inapplicable
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits: Financial Data Schedule
b) Reports on Form 8-K: None
-13-
<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND
LIMITED PARTNERSHIP
DATE: 11/10/00 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Healthcare, Inc.
Administrative General Partner
DATE: 11/10/00 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Brown-Healthcare, Inc.
Administrative General Partner
-14-
