<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 33-65948
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
(Exact name of Registrant as specified in its charter)
(See table of Co-Registrants)
Missouri 43-1623171
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11701 Borman Drive, Suite 315
St. Louis, Missouri 63146
(Address of principal executive offices) (Zip Code)
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), (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares of stock of each of the issuer's classes
of common stock, as of the latest practicable date: N/A
Certain information called for on Item 6 of Part II of this Form 10-Q is
incorporated by reference to Registrants' Registration Statement (No.
33-65948) dated July 13, 1993 which was declared effective October 14, 1993,
Registrants' Form 10-Q filed November 29, 1993, Registrants' Form 10-Q filed
February 11, 1994, Registrants' Form 10-K filed September 28, 1994,
Registrants' Form 10-Q filed February 14, 1995, Registrants' Form 10-Q filed
May 15, 1995, Registrants' Form 10-Q filed February 13, 1996, Registrants'
Form 10-Q filed May 14, 1996, Registrants' Form 10-K filed September 26, 1996,
Registrants' Form 10-Q filed November 13, 1996 and Registrants' Form 10-Q
filed November 12, 1997.
Index to Exhibits is on Page 36.
<PAGE> 2
CO-REGISTRANTS
Rosewood Care Center, Inc. of Swansea
Rosewood Care Center, Inc. of Galesburg
Rosewood Care Center, Inc. of East Peoria
Rosewood Care Center, Inc. of Peoria
Rosewood Care Center, Inc. of Alton
Rosewood Care Center, Inc. of Moline
Swansea Real Estate, Inc.
Galesburg Real Estate, Inc.
East Peoria Real Estate, Inc.
Peoria Real Estate, Inc.
Alton Real Estate, Inc.
Moline Real Estate, Inc.
(Exact names of Co-Registrants as specified in their charters)
No separate periodic or annual reports are filed for each of the co-registrants
and no separate financial statements are included for each of the co-registrants
because the co-registrants are effectively jointly and severally liable with
respect to the Notes and because such separate periodic or annual reports and
such separate financial statements are not deemed material to investors.
2
<PAGE> 3
<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
Index
<CAPTION>
Part I Financial Information Page
- ----------------------------- ----
<S> <C>
Item 1. Financial Statements 4
Rosewood Care Centers Capital Funding Corporation:
Balance Sheet 4
Statement of Operations 5
Statement of Cash Flows 6
Notes to Financial Statement 7
Rosewood Care Center Obligated Companies:
Rosewood Care Center, Inc. of Swansea
Rosewood Care Center, Inc. of Galesburg
Rosewood Care Center, Inc. of East Peoria
Rosewood Care Center, Inc. of Peoria
Rosewood Care Center, Inc. of Alton
Rosewood Care Center, Inc. of Moline
Swansea Real Estate, Inc.
Galesburg Real Estate, Inc.
East Peoria Real Estate, Inc.
Peoria Real Estate, Inc.
Alton Real Estate, Inc.
Moline Real Estate, Inc.
Combined Balance Sheet 8
Combined Statement of Operations 10
Combined Statement of Cash Flows 11
Notes to Combined Financial Statements 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Part II Other Information
- --------------------------
Item 1. Legal Proceedings 20
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 22
Index to Exhibits 36
- -----------------
Signatures 23
- ----------
</TABLE>
3
<PAGE> 4
Part I Financial Information
---------------------
Item 1. Financial Statements
<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
June 30, December 31,
ASSETS 1997 1997
------- -------- ------------
<S> <C> <C>
Cash $ 1 $ 262
Mortgage notes receivable, Rosewood Companies 27,581 26,186
Accrued interest receivable 167 --
------- -------
$27,749 $26,448
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
First mortgage redeemable bonds $27,581 $26,288
Accrued interest 167 159
Stockholders' equity:
Common stock, $1 par value
Authorized - 30,000 shares
Issued and outstanding - 500 shares,
at issue price 1 1
Retained earnings -- --
------- -------
$27,749 $26,448
======= =======
The accompanying notes are an integral part of this financial statement.
</TABLE>
4
<PAGE> 5
<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months Six Months
Ended Ended
December 31, December 31,
------------------- -------------------
1996 1997 1996 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Interest Income $520 $487 $1,071 $983
Interest expense 520 487 $1,071 $983
---- ---- ------ ----
Net Income $ 0 $ 0 $ 0 $ 0
==== ==== ====== ====
The accompanying notes are an integral part of this financial statement.
</TABLE>
5
<PAGE> 6
<TABLE>
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months Six Months
Ended Ended
December 31, December 31,
------------------ ------------------
1996 1997 1996 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Cash flow from operating activities:
Net income $ 0 $ 0 $ 0 $ 0
Decrease in accrued interest receivable -- (6) 0 167
----- ------- ------- -------
Increase (decrease) in accrued interest (6) (6) (8) (8)
----- ------- ------- -------
Net cash provided by operating activities (6) (6) (8) 159
----- ------- ------- -------
Cash flow from investing activities:
Collections on notes receivable 982 1,015 1,236 1,395
----- ------- ------- -------
Net cash used by investing activities 982 1,015 1,236 1,395
----- ------- ------- -------
Cash flow from financing operations:
Reduction of redeemable bonds (976) (1,009) (1,228) (1,293)
----- ------- ------- -------
Net cash provided by financing (976) (1,009) (1,228) (1,293)
----- ------- ------- -------
Net increase (decrease) in cash 0 0 0 261
Cash, beginning 262 262 262 1
----- ------- ------- -------
Cash, ending 262 262 262 262
===== ======= ======= =======
Cash paid for interest $ 520 $ 487 $ 1,071 $ 983
===== ======= ======= =======
The accompanying notes are an integral part of this financial statement.
</TABLE>
6
<PAGE> 7
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. Interim Financial Statements
----------------------------
In the opinion of the Company, these unaudited financial statements
include all adjustments necessary for a fair presentation of its
financial position as of June 30, 1997, and December 31, 1997, and the
results of its operations and its cash flows for the three month and the
six month periods ended December 31, 1996 and 1997. Such adjustments
were of a normal recurring nature.
The results of operations for the six months ended December 31, 1996,
and 1997 are not necessarily indicative of the results for the full
year.
It is suggested that these financial statements be read in conjunction
with the financial statements, accounting policies and financial notes
thereto included in the Form 10K Annual Report (No. 33-65948), which has
previously been filed with the Commission.
2. Issuance of Bonds
-----------------
On October 21, 1993, the Company issued $33,000,000 of its 7-1/4% First
Mortgage Redeemable Bonds due November 1, 2013.
Of the ending cash balance, $260,000 represents the note receivable
payment on the 25th of the month which is held in the Bond Payment Fund
- Principal and Interest accounts until it is disbursed to the Bond
Holders on the 1st of the following month.
7
<PAGE> 8
<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
June 30, December 31,
ASSETS 1997 1997
------ -------- ------------
<S> <C> <C>
Current assets:
Cash $ 2,320 $ 2,662
Accounts receivable - residents, net of allowance
for doubtful accounts of $224 and $181,
respectively 1,178 1,466
Accounts receivable - third party payor 3,409 2,531
Due from affiliates -0- 267
Interest receivable 256 252
Prepaid insurance and other prepaids 43 223
Deferred income tax benefits 75 75
------- -------
Total current assets 7,281 7,476
------- -------
Property, plant and equipment:
Land 943 943
Site improvements 2,140 2,140
Building 17,830 17,830
Equipment 3,702 3,748
Leasehold improvements 322 338
------- -------
24,937 24,999
Less accumulated depreciation 7,370 7,838
------- -------
17,567 17,161
------- -------
Other assets:
Notes receivable from Rosewood Care Center
Holding Company 7,034 6,217
Amortizable Costs, Net 965 901
------- -------
7,999 7,118
------- -------
$32,847 $31,755
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
8
<PAGE> 9
<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
June 30, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1997
------------------------------------ -------- ------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 2,021 $ 1,998
Accounts payable - trade 1,083 976
Accrued expenses:
Salaries and payroll taxes 470 562
Vacation and employee fringes 244 223
Real estate taxes 510 451
Accrued interes 167 -0-
Management fees - affiliate 265 471
Income taxes 50 95
Dividends payable 543 823
------- -------
Total current liabilities 5,353 5,599
------- -------
Long-term debt:
Notes payable - Rosewood Care Center
Capital Funding Corporation 27,581 26,186
------- -------
27,581 26,186
Less current maturities 2,021 1,998
------- -------
25,560 24,188
------- -------
Stockholders' equity:
Common stock 65 65
Paid-in capital 481 481
Retained earnings 1,388 1,422
------- -------
1,934 1,968
------- -------
$32,847 $31,755
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
9
<PAGE> 10
<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months Six Months
Ended Ended
December 31, December 31,
------------------ ------------------
1996 1997 1996 1997
------ ------ ------- -------
<S> <C> <C> <C> <C>
Patient service revenue:
Private $4,527 $4,824 $ 9,088 $ 9,654
Medicare 2,500 2,444 4,977 4,695
Medicaid 358 376 686 750
Other patient revenues, net of expenses 31 78 46 144
------ ------ ------- -------
7,416 7,722 14,797 15,243
------ ------ ------- -------
Operating expenses:
Facility expenses:
Administrative expense 254 270 465 523
Employee fringe benefits 466 510 920 983
Dietary 493 506 957 979
Nursing 1,808 1,890 3,536 3,712
Ancillary services 1,278 1,443 2,529 2,854
Plant utilities and maintenance 284 284 603 597
Housekeeping and laundry 236 254 464 491
Social services and activities 171 188 324 358
------ ------ ------- -------
4,990 5,345 9,798 10,497
------ ------ ------- -------
Income after facility expenses 2,426 2,377 4,999 4,746
------ ------ ------- -------
Nonfacility expenses:
Real estate taxes 139 139 284 278
Base management fees 198 198 396 396
Illinois Medicaid assessments 98 98 197 197
Depreciation and amortization 268 266 534 532
------ ------ ------- -------
703 701 1,411 1,403
------ ------ ------- -------
Income before incentives 1,723 1,676 3,588 3,343
Incentive management fees (491) (471) (1,017) (897)
Officers' bonuses -- -- -- --
------ ------ ------- -------
Income from operations 1,232 1,205 2,571 2,446
------ ------ ------- -------
Other income (expense):
Interest income 170 168 358 337
Interest expense (520) (487) (1,049) (983)
------ ------ ------- -------
(350) (319) (691) (646)
------ ------ ------- -------
Income before income taxes 882 886 1,880 1,800
Income tax expense (63) (71) (160) (154)
------ ------ ------- -------
Net income 819 815 1,720 1,646
Retained earnings, beginning 1,349 1,430 1,288 1,388
Dividends declared (819) (823) (1,659) (1,612)
------ ------ ------- -------
Retained earnings, ending $1,349 $1,422 $ 1,349 $ 1,422
====== ====== ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
10
<PAGE> 11
<TABLE>
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months Six Months
Ended Ended
December 31, December 31,
------------------- --------------------
Cash flow from operating activities: 1996 1997 1996 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income $ 819 $ 815 $ 1,720 $ 1,646
Adjustments:
Depreciation 236 234 469 468
Amortization 33 32 65 64
Decrease (increase) in:
Accounts receivable - residents 254 (26) (174) (288)
Accounts receivable - third party payors 61 (92) (449) 878
Other receivables and prepaids (155) (303) (1) (443)
Increase (decrease) in:
Accounts payable - trade 39 (176) (368) (107)
Accrued salaries, taxes and fringes (146) 189 34 71
Accrued real estate taxes 91 90 (23) (59)
Accrued management fees (34) 45 28 206
Other payables and accruals (24) (85) 6 (122)
------- ------- ------- -------
Net cash provided by operating activities 1,174 723 1,307 2,314
------- ------- ------- -------
Cash flow from investing activities:
Purchase of property and equipment (51) (36) (78) (62)
Loans and deposits with affiliate 1,404 475 1,019 817
------- ------- ------- -------
Net cash (used) by investing activities 1,353 439 941 755
------- ------- ------- -------
Cash flow from financing activities:
Reduction of long-term debt (982) (1,015) (1,235) (1,395)
Dividends paid (840) (789) (1,454) (1,332)
------- ------- ------- -------
Net cash (used) by financing activities (1,822) (1,804) (2,689) (2,727)
------- ------- ------- -------
Net increase (decrease) in cash 705 (642) (441) 342
Cash, beginning 1,091 3,304 2,237 2,320
------- ------- ------- -------
Cash, ending $ 1,796 $ 2,662 $ 1,796 $ 2,662
======= ======= ======= =======
Cash paid for:
Interest $ 520 $ 564 $ 1,049 $ 1,150
======= ======= ======= =======
Income taxes $ 118 $ 104 $ 206 $ 154
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
11
<PAGE> 12
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
1. Interim Financial Statements
----------------------------
In the opinion of the Companies, these unaudited combined financial
statements include all adjustments necessary for a fair presentation of
their financial position as of June 30, 1997 and December 31, 1997, and
the results of their operations and their cash flows for the three and
six month periods ended December 31, 1996 and 1997. Such adjustments
were of a normal recurring nature.
The results of operations for the six month periods ended December 31,
1996 and 1997 are not necessarily indicative of the results for the full
years.
It is suggested that these financial statements be read in conjunction
with the financial statements, accounting policies and financial notes
thereto included in the Form 10K Annual Report (No. 33-65948), which has
previously been filed with the Commission.
2. Litigation
----------
The Companies, from time to time, are involved in litigation in the
ordinary course of business including disputes involving management
contracts, patient services, employment services, and employment claims.
The Companies are also involved in routine administrative and judicial
proceedings regarding permits and expenses. The Companies are not a
party to any lawsuit or proceeding which, in the opinion of management,
is individually or in the aggregate, likely to have a material adverse
effect on the combined financial position or results of operations of
the Companies.
3. Refinancing of Long-Term Debt
-----------------------------
On October 21, 1993, the Companies refinanced their long-term debt with
Rosewood Care Centers Capital Funding Corporation, which issued
$33,000,000 of its 7-1/4% First Mortgage Redeemable Bonds due November
1, 2013.
Remaining loan proceeds were loaned to Rosewood Care Center Holding
Company under unsecured promissory notes bearing interest at 7-1/4% per
annum and having maturities from October to December 1999.
12
<PAGE> 13
ROSEWOOD CARE CENTER
FACILITY COMPANIES AND REAL ESTATE COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
3. Refinancing of Long-Term Debt (Continued)
-----------------------------------------
Loan costs of $609,000 and underwriter's discount of $841,500 are being
amortized over the term of the long-term debt, on the interest method.
4. Dividends
---------
Dividends in the amount of $1,612,700 were declared during the six
months ended December 31, 1997.
13
<PAGE> 14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Rosewood Care Centers Capital Funding Corporation
The Corporation is a pass through entity. Interest income and expenses
offset, resulting in no income or loss.
The Combined Facility Companies and Real Estate Companies
Three Months Ended December 31, 1997 Compared With
Three Months Ended December 31, 1996
Overview
--------
The Companies have continued their marketing emphasis on short-term
convalescent care while continuing to provide long-term care. The number of
short-term care patients and demand for ancillary rehabilitative and therapy
services has continued to increase. Revenues and expenses associated with
rehabilitative and therapy services have continued to increase through
December 31, 1997.
The Medicare program and various forms of private payment are principal
payors for short-term nursing home care and rehabilitative services. All six
of the facilities participate in the federally administered Medicare program.
All six of the facilities also participate in the Medicaid program for a
distinct number of beds in each facility.
The Companies will continue to be affected by the government's attempts
to control Medicare costs and by market issues facing the nursing home
industry as a whole. The ability of the Companies to control the costs of
labor which continue to rise and represent one of the largest components of
the Companies' operating expenses, will also significantly impact the future
operating results.
Operating Results
-----------------
Net revenues have increased to $7,722,000 for the three months ended
December 31, 1997 from $7,416,000 for the three months ended December 31 1996,
an increase of $306,000 or 4.1%. Private revenues have increased $297,000
from $4,527,000 for the three months ended December 31, 1996 to $4,824,000 for
the three months ended December 31, 1997. Revenue generated from ancillary
services increased $140,000 while revenue from room charges increased $157,000
when compared to the same three month period last year. The average room rate
has increased from $107 per day for the three month period ended December 31,
1996 to $114 per day for the current three month period. Private census has
decreased from 41,687 patient days for 1996 to 40,576 patient days for the
current three month period ended December 31, 1997.
14
<PAGE> 15
The majority of the increase in ancillary revenue can be accounted for
by the change in the method of billing and collecting for drugs sold to
private paying residents. Prior to July 1, 1997, drugs supplied to private
paying residents were billed by an unrelated third party pharmacy company
directly to the private paying residents and not reflected as revenues or
expenses of the Companies. Effective July 1, 1997, the Companies began
directly billing residents for drugs. The drugs, which continue to be
supplied to the private paying residents by the unrelated pharmacy company,
are billed to the residents by the Companies at the same cost as previously
charged to the residents by the unrelated pharmacy company in prior periods.
As compensation for performing the billing and collecting for the drugs, the
Companies retain a portion of the drug billings. For the three months ended
December 31, 1997, this aggregated $57,000, which is reflected in Other
Patient Revenues for the current period.
Net revenues for Medicare decreased from $2,500,000 for the three months
ended December 31, 1996 to $2,444,000 for the three months ended December 31,
1997, a decrease of $56,000 or 2.2%. The Medicare census has decreased to
9,230 patient days from 10,367 patient days for the same period last year.
Medicaid revenue has increased from $358,000 to $376,000 when compared
to the same three month period last year. The increase is the result of an
increase in census from 5,408 patient days for the three months ended December
31, 1996 to 5,536 patient days for the three months ended December 31, 1997.
The occupancy of the facilities has decreased to 86.8% for the current
three month period compared to 90.1% for the same three month period last
year. Additional information on occupancy is presented in the comparative
information for the six month period.
Facility operating expenses increased to $5,345,000 (or $96.58 per
patient day) for the current three month period ended December 31, 1997, from
$4,990,000 (or $86.84 per patient day) for the three months ended December 31,
1996.
Administrative expenses have increased $16,000 when compared to the same
three month period last year. The majority of the increase can be accounted
for by the increase in wages, telephone, new employee training and the
increase in the cost of continuing education of employees reimbursed by the
Company.
The cost of employee benefits has increased $44,000 from $466,000 for
the three months ended December 31, 1996, to $510,000 for the three months
ended December 31, 1997. The majority of the increase can be accounted for by
an increase in vacation and holiday pay of $19,400, an $8,900 increase in
payroll taxes and a $9,700 increase in the cost of health insurance and
workers' compensation insurance. The balance of the increase is the result of
inflation.
Dietary expenses increased approximately $13,000 when compared to the
same three month period last year which can be accounted for by increased
labor costs.
Nursing costs increased from $1,808,000 for the three months ended
December 31, 1996 to $1,890,000 for the three months ended December 31, 1997,
an increase of $82,000 or 4.5%. Labor costs increased $73,000 when compared
to the
15
<PAGE> 16
same period last year, with the balance of the increase accounted for by the
increase in the cost of medical supplies.
Ancillary services costs have increased from $1,278,000 for the three
months ended December 31, 1996 to $1,443,000 for the three months ended
December 31, 1997, an increase of $165,000 or 12.9%. The majority of the
increase is the result of the increase in the cost of drugs sold to private
payor residents which was discussed above.
Plant utilities and maintenance, aggregating $284,000 have not changed
when compared to the same period last year.
Housekeeping and laundry costs have increased $18,000 when compared to
the same three month period last year. All of the increase can be accounted
for by the increase in the cost of labor for both departments.
Social Services and Activities costs have increased $17,000 when
compared to the same three month period last year and can be accounted for by
the increase in labor for these departments.
Interest income which aggregated $170,000 and 168,000 for the periods
ending December 31, 1996 and 1997, respectively, is virtually unchanged.
Interest expense decreased $33,000 when compared to the same three month
period last year. The decrease is the result of the decrease in the long term
debt from $28,044,000 on December 31, 1996 to $26,186,000 as of December 31,
1997.
Six Months Ended December 31, 1997 Compared With
Six Months Ended December 31, 1996
Operating Results
-----------------
Net revenues have increased to $15,243,000 for the six months ended
December 31, 1997 from $14,797,000 for the six months ended December 31, 1996,
an increase of $446,000 or 3.0%. Private revenues have increased $566,000
from $9,088,000 for the six months ended December 31, 1996, to $9,654,000 for
the six months ended December 31, 1997. Revenue generated from ancillary
services increased $215,000, while revenue from room charges increased
$351,000 when compared to the same period last year. The average private room
rates for the current period aggregated $114 per patient day compared to $105
per patient day for the same period last year. Private census has decreased
from 84,171 patient days for the six months ended December 31, 1996, to 80,598
patient days for the period ended December 31, 1997.
As previously discussed, effective July 1, 1997, the Companies began
billing the private paying residents for drugs previously billed directly to
the residents by an unrelated third party pharmacy company. This change has
resulted in an increase in ancillary revenue aggregating $309,000 for the
current six month period. Other ancillary revenues, comprised of
occupational, physical and speech therapy, declined $94,000 when compared to
the same period last year. The portion of the drug billings retained by the
Companies as
16
<PAGE> 17
compensation for the billing and collecting for drugs aggregated $104,000 for
the six months ended December 31, 1997, compared to $0 for the six months
ended December 31, 1996 and is reflected in Other Patient Revenues for the
current six month period.
Net revenues for Medicare have decreased from $4,977,000 for the six
months ended December 31, 1996 to $4,695,000 for the six months ended December
31, 1997, a decrease of $282,000 or 5.7%. The Medicare census has decreased
from 20,700 patient days for the six months ended December 31, 1996 to 17,846
patient days for the six months ended December 31, 1997. The Medicare
reimbursement rate has increased approximately $30 per day when compared to
the same period last year, which is the direct result of the increase in
ancillary services provided to the Medicare qualified residents.
Medicaid revenue has increased from $686,000 to $750,000 when compared
to the same period last year. The increase is the result of a increase in
census from 10,478 patient days for the six months ended December 31, 1996 to
11,027 patient days for the six months ended December 31, 1997.
The facilities have an average occupancy rate of 87.2% for the current
six month period, compared to 90.5% for the same period last year. The East
Peoria facility is the only facility with an average occupancy significantly
below levels achieved by the majority of the Companies' facilities.
Management is in the process of making management changes at the East Peoria
facility, which included a change of the facility administrator in November,
1997, in an effort to bring the East Peoria facility in line with the rest of
the Companies' operations. The occupancy for the six facilities for the
current six month period compared to the same period last year is as follows:
<TABLE>
<CAPTION>
December 31
1996 1997
<S> <C> <C>
Swansea 96.4 98.7
Galesburg 86.3 80.9
Moline 93.3 94.3
Alton 98.9 97.5
Peoria 89.8 91.0
East Peoria 78.4 62.2
Average 90.5 87.2
</TABLE>
Facility operating expenses increased to $10,497,000 (or $95.89 per
patient day) for the current six month period ended December 31, 1997, from
$9,798,000 (or $84.94 per patient day) for the six months ended December 31,
1996.
Administrative expenses have increased $58,000 when compared to the same
period last year. The majority of the increase can be accounted for by the
increase in wages, telephone, advertising for new employees and new employee
training.
The cost of employee benefits has increased $63,000 when compared to the
same six month period last year. The majority of the increase can be
accounted for by a $42,500 increase in sick, holiday and vacation pay and a
$13,900
17
<PAGE> 18
increase in payroll taxes. The balance of the increase is the result of
inflation.
Dietary expenses have increased approximately $22,000 when compared to
the same period last year, the result of an increase in labor costs for the
current six month period.
Nursing costs increased from $3,536,000 for the six months ended
December 31, 1996 to $3,712,000 for the six months ended December 31, 1997, an
increase of $176,000 or 4.9%. Labor costs increased $68,000, compared to the
same period last year, with the balance of the increase due to the increase in
the cost of medical supplies.
Ancillary services costs have increased from $2,529,000 for the six
months ended December 31, 1996 to $2,854,000 for the six months ended December
31, 1997, an increase of $325,000 or 12.9%. This increase in costs is the
direct result of the increase in ancillary revenue and services provided to
the residents of the facilities. The cost of drugs has increased $309,000 when
compared to the same period last year. This increase was the result of the
change in billings for drugs to private residents previously discussed.
Therapy services for speech, occupational and physical therapy are provided at
four of the facilities by a related company, Rosewood Therapy Services, Inc.,
and are billed to the Companies at cost, which has resulted in substantial
savings to the Companies over contracting with unrelated third party therapy
providers, aggregating $264,000 over the six month period ending December 31,
1996.
Plant utilities and maintenance costs decreased $6,000 from $603,000 for
the six months ended December 31, 1996, to $597,000 for the six month period
ended December 31, 1997. The decrease can be accounted for by the decrease in
repairs for the current period.
Housekeeping and laundry costs increased $27,000, compared to the same
six month period last year. Labor costs increased $34,000, while the cost of
supplies decreased $7,000 when compared to the same period last year.
Social Services and Activities costs have increased $34,000 when
compared to the same period last year. The increase is the result of the
increase in labor costs for these departments.
Interest income has decreased $21,000 when compared to the same period
last year as a result of the decrease in the notes receivable outstanding
during the six month period from the affiliated company, Rosewood Care Center
Holding Co.
Interest expense decreased $66,000 when compared to the same period last
year. The decrease is the result of the decrease in the long term debt from
$28,044,000 on December 31, 1996 to $26,186,000 as of December 31, 1997.
The Facility Companies file a consolidated income tax return with their
parent company, Rosewood Care Center Holding Co. The income of the Real
Estate Companies is taxed at the individual shareholder level, as each real
estate company is an S corporation. The amount reflected as income taxes is
the
18
<PAGE> 19
facility companies' portion of federal and state taxes calculated for the six
months ended December 31, 1997 and 1996, on an annualized basis.
Liquidity and Capital Resources
-------------------------------
As of December 31, 1997, the Balance Sheet reflects $267,000 as due from
affiliates which was paid subsequent to the period ended December 31, 1997.
As of December 31, 1997, the Companies had approximately $2,662,000 in cash
and cash equivalents and net working capital of approximately $1,877,000.
There was a net increase in cash of $342,000 since June 30, 1997. For the six
months ended December 31, 1997, net cash provided by operations was
$2,314,000. Net cash from investing activities was $755,000 of which $817,000
was received from Rosewood Care Center Holding Co. as payment on notes due
from the affiliated company and $62,000 was used by the Companies for the
purchase of personal property and equipment used in the operations of the
facilities. Net cash used in financing activities aggregated $2,727,000 of
which $1,395,000 was used to retire debt and $1,332,000 was used for the
payment of dividends. The Companies believe they have adequate capital for
operations and replacements for the coming year and the foreseeable future.
Accounts receivable from private paying patients increased to $1,466,000
as of December 31, 1997, compared to $1,178,000 as of June 30, 1997. Accounts
receivable from third party payers decreased to $2,531,000 as of December 31,
1997, compared to $3,409,000 as of June 30, 1997. $882,000 of this amount is
due from Medicare for unsettled cost reports through December 31, 1997 which
are subject to audit. $243,000 of this amount was received subsequent to
December 31, 1997, as an interim settlement until the audits are completed by
the intermediary.
The Medicare program continues to face intense scrutiny and significant
cutbacks. In budget legislation passed by Congress in 1997, a new Medicare
prospective payment system ("MPPS") was enacted. This new MPPS is intended to
help the Medicare program achieve targeted reductions in spending growth of
approximately $9.2 billion for skilled nursing facilities over the next five
years. The new MPPS reimburses the provider for routine, ancillary and
capital costs. The new MPPS rate will initially be a blended rate, based on
previous facility costs adjusted by an inflation factor and a national rate.
The first year the rate will be based on 75% facility costs and 25% national
rate. The second year rate is 50% facility costs and 50% national rate. In the
fourth year, 100% of the new MPPS will be based on the national rate. The
national rate is subject to adjustment for the acuity of the patient mix and
variation in geographic labor costs.
The current system of Medicare payment is a cost reimbursement system
which requires, among other things, a projection of care to be provided at the
time the resident is admitted and a report of care actually given when the
resident is discharged. In addition to the changes described above, the new
MPPS is to be based on units of service defined for the purpose of calculating
prospective payment. This payment system requires more frequent assessment
and reporting than under the current system.
19
<PAGE> 20
The new MPPS is currently scheduled to take effect on July 1, 1998 for
the Companies. Although some officials believe the July 1, 1998 effective
date will not be extended, the regulations relating to regional adjustment
factors have not yet been published. These regulations, which were originally
to be published by April 1, 1998 are now projected for May 1, 1998. The
effect of this new MPPS is not yet known. The Companies will incur additional
clerical and other staffing costs as a result of the additional reporting
required. If the new MPPS is successful in its intent to pay for the Medicare
services rendered on a more timely basis, the Companies should receive the
major portion of the Medicare payments quicker. However, the new MPPS
currently contemplates a continuation of the year end reporting required under
the current system for a final reconciliation. Until the regulations are
final and the Companies have some experience with reimbursement under the new
MPPS, the effect of the new MPPS on the results of operations and financial
conditions of the Companies is uncertain.
Management does not anticipate any cash flow shortages during the
foreseeable future, despite the changes in the Medicare payment system, unless
Medicare administration and payment terms significantly further deteriorate.
Part II Other Information
- --------------------------
Item 1. Legal Proceedings.
There were no material developments with respect to legal proceedings
during the quarter ended December 31, 1997.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
The Sun Bank Letter of Credit funding the Debt Service Reserve Fund
expired December 6, 1997 and was renewed for another one year term, expiring
December 6, 1998.
During the period ending December 31, 1997, the construction of the 60
bed expansion wing at Rosewood Care Center of Alton was substantially
completed. Subsequent to the end of the fiscal quarter, the state inspection
was conducted and the expansion wing was licensed and opened on January 23,
1998. There are certain restrictions on the expansion which are contained in
the Loan Agreement and the Trust Indenture. In accordance with those
restrictions, ownership of the
20
<PAGE> 21
expansion wing is maintained in the name of the Alton Real Estate II, L.L.C.,
a separate entity from Alton Real Estate, Inc. which owns the existing nursing
home. Rosewood Care Center, Inc. of Alton, the company which leases and
operates the Alton skilled nursing facility, is also the lessee and operator
of the expansion wing. In accordance with the terms of the Loan Agreement,
and the Loan Guarantee Agreement, under certain conditions, Rosewood Care
Center, Inc. of Alton can terminate the lease and take other actions which
could be adverse to Alton Real Estate II, L.L.C. without penalty while the
bonds are outstanding.
During the period ending December 31, 1997, the construction of the 60
bed expansion wing at Rosewood Care Center of Galesburg continued. The
expansion wing is under roof, with major systems installed and interior finish
progressing. Opening of the expansion wing is projected for the last quarter
of fiscal 1998. There are certain restrictions on the expansion which are
contained in the Loan Agreement and the Trust Indenture. In accordance with
those restrictions, ownership of the expansion wing is maintained in the name
of the Galesburg Real Estate II, L.L.C., a separate entity from Galesburg Real
Estate, Inc. which owns the existing nursing home. Rosewood Care Center, Inc.
of Galesburg, the company which leases and operates the Galesburg skilled
nursing facility, will also be the lessee and operator of the expansion wing.
In accordance with the terms of the Loan Agreement, and the Loan Guarantee
Agreement, under certain conditions, Rosewood Care Center, Inc. of Galesburg
can terminate the lease and take other actions which could be adverse to
Galesburg Real Estate II, L.L.C. without penalty while the bonds are
outstanding.
In the 1997 fiscal year, a related company, Rosewood Therapy Services,
Inc. began providing therapy services to the facilities owned and operated by
the Companies. In 1997, therapy services were provided to the facilities at
prevailing market rates, on the same terms and conditions as would be entered
into with unrelated therapy companies. During the 1997 fiscal year, the
Companies' paid $3,016,000 to unrelated companies for physical and
occupational therapy services and an additional $236,000 for speech therapy
services. Amounts paid by the Companies to Rosewood Therapy Services during
the 1997 fiscal year were negligible. Beginning with the 1998 fiscal year,
therapy services are provided to the facilities at Rosewood Therapy Services'
cost, rather than at prevailing market rates. During the first half of the
1998 fiscal year, the Companies' paid $770,000 to unrelated companies for
physical, occupational therapy services and speech therapy services. Amounts
paid by the Companies to Rosewood Therapy Services during the first half of
the 1998 fiscal year, aggregated $840,000. The Companies intend to obtain
substantially all therapy services from Rosewood Therapy Services for the 1998
fiscal year. Effective March 1998, the Companies will be terminating
contracts with the remaining unrelated third party therapy providers and
thereafter, substantially all speech, occupational and physical therapy will
be provided by Rosewood Therapy Services. The Companies anticipate that only
nominal amounts will be paid to outside companies to provide specialized
therapies or to cover short term staffing needs.
During the last fiscal quarter, the Companies became participants in the
401 (k) Plan maintained by an affiliate, HSM Management Services, Inc. The
Plan allows but does not require a matching contribution from the Companies.
The Companies do not expect participation in the 401 (k) plan to have a
material impact on financial performance.
21
<PAGE> 22
The Companies continue to have discussions with large providers relating
to managed care options. At December 31, 1997, no new contracts had been
finalized.
Item 6. Exhibits and Reports on Form 8-K.
(a) See Index to Exhibits on Page 36.
(b) Reports on Form 8-K.
None.
22
<PAGE> 23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ROSEWOOD CARE CENTERS CAPITAL
FUNDING CORPORATION, Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal
Financial and Accounting Officer)
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ROSEWOOD CARE CENTER, INC. OF
SWANSEA, Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
24
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ROSEWOOD CARE CENTER, INC. OF
GALESBURG, Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer
25
<PAGE> 26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ROSEWOOD CARE CENTER, INC. OF
PEORIA, Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
26
<PAGE> 27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ROSEWOOD CARE CENTER, INC. OF
EAST PEORIA, Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
27
<PAGE> 28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ROSEWOOD CARE CENTER, INC. OF
ALTON, Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
28
<PAGE> 29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ROSEWOOD CARE CENTER, INC. OF
MOLINE, Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
29
<PAGE> 30
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SWANSEA REAL ESTATE, INC., Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal and Executive Officer
and Principal Financial
and Accounting Officer
30
<PAGE> 31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GALESBURG REAL ESTATE, INC., Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
31
<PAGE> 32
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
PEORIA REAL ESTATE, INC., Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
32
<PAGE> 33
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
EAST PEORIA REAL ESTATE, INC., Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
33
<PAGE> 34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ALTON REAL ESTATE, INC., Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
34
<PAGE> 35
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
MOLINE REAL ESTATE, INC., Registrant
Dated: February 11, 1998 By: /s/ Larry Vander Maten
--------------------------------------
Larry Vander Maten
President and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
35
<PAGE> 36
ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION
Exhibit Index
These Exhibits are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
4.1 Reference is made to Article III of the Articles of Incorporation of
Rosewood Care Centers Capital Funding Corporation filed on September
28, 1994 as Exhibit 3.1 (and referenced in Exhibit 4.1) of the Form
10-K.
4.2 Reference is made to the Trust Indenture filed on November 29, 1993
as Exhibit 4.2 of the Form 10-Q of Registrants.
4.3 Reference is made to the Bond filed on November 29, 1993 as Exhibit
4.3 of the Form 10-Q of Registrants.
4.4 Reference is made to the Loan Guaranty Agreement between Rosewood
Care Centers Capital Funding Corporation and Rosewood Care Center,
Inc. of Alton and the additional Loan Guaranty Agreements listed on
the Schedule filed on November 29, 1993 as Exhibit 4.4 of the Form
10-Q of Registrants.
4.5 Reference is made to the Note executed by Alton Real Estate, Inc. and
the additional Notes listed on the Schedule filed on November 29, 1993 as
Exhibit 4.5 of the Form 10-Q of Registrants.
10.1 Reference is made to the Trust Indenture filed on November 29, 1993
as Exhibit 4.2 of the Form 10-Q of Registrants.
10.2 Reference is made to the Collateral Pledge and Security Agreement
between Rosewood Care Centers Capital Funding Corporation and Alton
Real Estate, Inc. and the additional Collateral Pledge and Security
Agreements listed on the Schedule filed on November 29, 1993 as
Exhibit 10.2 of the Form 10-Q of Registrants.
10.3 Reference is made to the Mortgage Between Alton Real Estate, Inc. and
Rosewood Care Centers Capital Funding Corporation and the additional
Mortgages listed on the Schedule filed on November 29, 1993 as
Exhibit 10.3 of the Form 10-Q of Registrants.
10.4 Reference is made to the Security Agreement between Rosewood Care
Centers Capital Funding Corporation and Rosewood Care Center, Inc. of
Alton and the additional Security Agreements listed on the Schedule
filed on November 29, 1993 as Exhibit 10.4 of the Form 10-Q of
Registrants.
10.5 Reference is made to the Assignment of Rents and Leases between
Rosewood Care Centers Capital Funding Corporation and Alton Real
Estate, Inc. and the additional Assignments of Rents and Leases
listed on the Schedule
36
<PAGE> 37
filed on November 29, 1993 as Exhibit 10.5 of the Form 10-Q of
Registrants.
10.6 Reference is made to the Subordination and Attornment Agreement
between Rosewood Care Centers Capital Funding Corporation and Alton
Real Estate, Inc. and the additional Subordination and Attornment
Agreements listed on the Schedule filed on November 29, 1993 as
Exhibit 10.6 of the Form 10-Q of Registrants.
10.7 Reference is made to the Acknowledgment and Consent between Rosewood
Care Centers Capital Funding Corporation and Hovan Enterprises, Inc.
filed on November 29, 1993 as Exhibit 10.7 of the Form 10-Q of
Registrants.
10.8 Reference is made to the Administrative Services Agreement between
Hovan Enterprises, Inc. and Alton Real Estate, Inc. and the
additional Administrative Services Agreements listed on the Schedule
filed on November 29, 1993 as Exhibit 10.8 of the Form 10-Q of
Registrants.
10.9 Reference is made to the Revised and Restated Management Agreement
between Rosewood Care Center, Inc. of Alton and Hovan Enterprises,
Inc. and the additional Revised and Restated Management Agreements
listed on the Schedule filed on November 29, 1993 as Exhibit 10.9 of
the Form 10-Q of Registrants.
10.10 Reference is made to the Lease between Alton Real Estate, Inc. and
Rosewood Care Center, Inc. of Alton and the additional Leases listed
on the Schedule filed on November 29, 1993 as Exhibit 10.10 of the
Form 10-Q of Registrants.
10.11 Reference is made to the Assignment of Management Agreement between
Rosewood Care Center, Inc. of Alton and Mercantile Bank and the
additional Assignments of Management Agreement listed on the Schedule
filed on November 29, 1993 as Exhibit 10.11 of the Form 10-Q of
Registrants.
10.12 Reference is made to the Contract between Resident and Facility filed
on July 13, 1993 as Exhibit 10.12 of the Registration Statement of
Registrants (No. 33-65948) declared effective October 14, 1993.
10.13 Reference is made to the Loan Agreement among Rosewood Care Centers
Capital Funding Corporation and Alton Real Estate, Inc., Swansea Real
Estate, Inc., Peoria Real Estate, Inc., East Peoria Real Estate,
Inc., Moline Real Estate, Inc., and Galesburg Real Estate, Inc. filed
on November 29, 1993 as Exhibit 10.13 of the Form 10-Q of
Registrants.
10.14 Reference is made to the Loan Guaranty Agreement filed on November
29, 1993 as Exhibit 4.4 of the Form 10-Q of Registrants.
10.15 Reference is made to the Letter of Credit issued by Sun Bank,
National Association to Mercantile Bank of St. Louis N.A. as Trustee
under the Trust Indenture on December 6, 1993 and substituted for the
cash in the Debt Service Reserve Fund on December 9, 1993, filed on
February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the
Registrants.
37
<PAGE> 38
10.16 Reference is made to the renewal of the Letter of Credit filed on
February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the
Registrants, which renewal was filed on February 14, 1995 as Exhibit
10.16 of the Form 10-Q of the Registrants.
10.17 Reference is made to the renewal of the Letter of Credit filed on
February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the
Registrants, which renewal was filed on February 13, 1996 as Exhibit
10.17 of the Form 10-Q of the Registrants.
10.18 Reference is made to the renewal of the Letter of Credit filed on
February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the
Registrants, which renewal was filed on November 13, 1996 as Exhibit
10.18 of the Form 10-Q of the Registrants.
10.19 Reference is made to the Consultant Services Agreement between
Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of
Alton (Additional Consultant Services Agreements listed on the
Schedule), which was filed on November 12, 1997 as Exhibit 10.19 of
the Form 10-Q of the Registrants.
10.20 Renewal of the Letter of Credit filed on February 11, 1994 as Exhibit
10.15 on the Form 10-Q of the Registrants.
27.1 Financial Data Schedule of Rosewood Care Center Capital Funding
Corporation.
27.2 Financial Data Schedule of Rosewood Care Center of Galesburg.
27.3 Financial Data Schedule of Rosewood Care Center of Swansea.
27.4 Financial Data Schedule of Rosewood Care Center of East Peoria.
27.5 Financial Data Schedule of Rosewood Care Center of Peoria.
27.6 Financial Data Schedule of Rosewood Care Center of Alton.
27.7 Financial Data Schedule of Rosewood Care Center of Moline.
27.8 Financial Data Schedule of Swansea Real Estate.
27.9 Financial Data Schedule of Galesburg Real Estate.
27.10 Financial Data Schedule of East Peoria Real Estate.
27.11 Financial Data Schedule of Peoria Real Estate.
27.12 Financial Data Schedule of Alton Real Estate.
27.13 Financial Data Schedule of Moline Real Estate.
38
<PAGE> 39
99.1 Reference is made to the Amended and Restated License Agreement filed
September 28, 1994 as Exhibit 99.1 of Form 10-K of Registrants.
99.2 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Swansea filed on July 13, 1993 as Exhibit 99.2 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.3 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Alton filed on July 13, 1993 as Exhibit 99.3 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.4 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of East Peoria filed on July 13, 1993 as Exhibit 99.4 of the
Registration Statement of Registrants (No. 33-65948) declared
effective October 14, 1993.
99.5 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Peoria filed on July 13, 1993 as Exhibit 99.5 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.6 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Galesburg filed on July 13, 1993 as Exhibit 99.6 of the
Registration Statement of Registrants (No. 33-65948) declared
effective October 14, 1993.
99.7 Reference is made to the Medicare Provider Agreement between The
Secretary of Health and Human Services and Rosewood Care Center, Inc.
of Moline filed on July 13, 1993 as Exhibit 99.7 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.8 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Swansea filed on July 13, 1993 as Exhibit 99.8 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.9 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Alton filed on July 13, 1993 as Exhibit 99.9 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.10 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
East Peoria filed on July 13, 1993 as Exhibit 99.10 of the
Registration Statement of Registrants (No. 33-65948) declared
effective October 14, 1993.
99.11 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Peoria filed on July 13, 1993 as Exhibit 99.11 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
39
<PAGE> 40
99.12 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Galesburg filed on July 13, 1993 as Exhibit 99.12 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.13 Reference is made to the Medicaid Provider Agreement between The
Illinois Department of Public Aid and Rosewood Care Center, Inc. of
Moline filed on July 13, 1993 as Exhibit 99.13 of the Registration
Statement of Registrants (No. 33-65948) declared effective October
14, 1993.
99.14 Reference is made to the Lease Agreement filed on September 28, 1994
as Exhibit 99.14 of the Form 10-K of Registrants.
99.15 Reference is made to the Revised and Restated Grant and Declaration o
of Easements filed on September 28, 1994 as Exhibit 99.15 of the Form
10-K of Registrants.
99.16 Reference is made to the Managed Care Agreement between Rosewood Care
Center, Inc. of Moline, Heritage National Health Plan, Inc., John
Deere Family Health Plan and Deere and Company filed on May 15, 1995
as Exhibit 99.16 of the Form 10-Q of Registrants.
99.17 Reference is made to the Skilled Nursing Facility Agreement between
Health Care Service Corporation and Rosewood Care Center, et al.
filed on September 26, 1996 as Exhibit 99.17 of the Form 10-K of the
Registrants.
</TABLE>
40
<PAGE> 41
SCHEDULE
THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS
THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED ON NOVEMBER 23,
1993 10-Q.
4.4 Loan Guaranty Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Swansea
Loan Guaranty Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Peoria
Loan Guaranty Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of East Peoria
Loan Guaranty Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Moline
Loan Guaranty Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Galesburg
4.5 Note executed by Swansea Real Estate, Inc.
Note executed by Peoria Real Estate, Inc.
Note executed by East Peoria Real Estate, Inc.
Note executed by Moline Real Estate, Inc.
Note executed by Galesburg Real Estate, Inc.
10.2 Collateral Pledge and Security Agreement between Rosewood Care Centers
Capital Funding Corporation and Swansea Real Estate, Inc.
Collateral Pledge and Security Agreement between Rosewood Care Centers
Capital Funding Corporation and Peoria Real Estate, Inc.
Collateral Pledge and Security Agreement between Rosewood Care Centers
Capital Funding Corporation and East Peoria Real Estate, Inc.
Collateral Pledge and Security Agreement between Rosewood Care Centers
Capital Funding Corporation and Moline Real Estate, Inc.
Collateral Pledge and Security Agreement between Rosewood Care Centers
Capital Funding Corporation and Galesburg Real Estate, Inc.
10.3 Mortgage Between Swansea Real Estate, Inc. and Rosewood Care Centers
Capital Funding Corporation
Mortgage Between Peoria Real Estate, Inc. and Rosewood Care Centers
Capital Funding Corporation
Mortgage Between East Peoria Real Estate, Inc. and Rosewood Care Centers
Capital Funding Corporation
41
<PAGE> 42
Mortgage Between Moline Real Estate, Inc. and Rosewood Care Centers
Capital Funding Corporation
Mortgage Between Galesburg Real Estate, Inc. and Rosewood Care Centers
Capital Funding Corporation
10.4 Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Swansea
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Peoria
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of East Peoria
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Moline
Security Agreement between Rosewood Care Centers Capital Funding
Corporation and Rosewood Care Center, Inc. of Galesburg
10.5 Assignment of Rents and Leases between Rosewood Care Centers Capital
Funding Corporation and Swansea Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers Capital
Funding Corporation and Peoria Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers Capital
Funding Corporation and East Peoria Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers Capital
Funding Corporation and Moline Real Estate, Inc.
Assignment of Rents and Leases between Rosewood Care Centers Capital
Funding Corporation and Galesburg Real Estate, Inc.
10.6 Subordination and Attornment Agreement between Rosewood Care Centers
Capital Funding Corporation and Swansea Real Estate, Inc.
Subordination and Attornment Agreement between Rosewood Care Centers
Capital Funding Corporation and Peoria Real Estate, Inc.
Subordination and Attornment Agreement between Rosewood Care Centers
Capital Funding Corporation and East Peoria Real Estate, Inc.
Subordination and Attornment Agreement between Rosewood Care Centers
Capital Funding Corporation and Moline Real Estate, Inc.
Subordination and Attornment Agreement between Rosewood Care Centers
Capital Funding Corporation and Galesburg Real Estate, Inc.
42
<PAGE> 43
10.8 Administrative Services Agreement between Hovan Enterprises, Inc. and
Swansea Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises, Inc. and
Peoria Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises, Inc. and
East Peoria Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises, Inc. and
Moline Real Estate, Inc.
Administrative Services Agreement between Hovan Enterprises, Inc. and
Galesburg Real Estate, Inc.
10.9 Revised and Restated Management Agreement between Rosewood Care Center,
Inc. of Swansea and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care Center,
Inc. of Peoria and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care Center,
Inc. of East Peoria and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care Center,
Inc. of Moline and Hovan Enterprises, Inc.
Revised and Restated Management Agreement between Rosewood Care Center,
Inc. of Galesburg and Hovan Enterprises, Inc.
10.10 Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc.
of Swansea
Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc.
of Peoria
Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc.
of East Peoria
Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc.
of Moline
Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc.
of Galesburg
10.11 Assignment of Management Agreement between Rosewood Care Center, Inc. of
Swansea and Mercantile Bank
Assignment of Management Agreement between Rosewood Care Center, Inc. of
Peoria and Mercantile Bank
Assignment of Management Agreement between Rosewood Care Center, Inc. of
East Peoria and Mercantile Bank
43
<PAGE> 44
Assignment of Management Agreement between Rosewood Care Center, Inc. of
Moline and Mercantile Bank
Assignment of Management Agreement between Rosewood Care Center, Inc. of
Galesburg and Mercantile Bank
THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS
THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED ON NOVEMBER 12,
1997
10.19 Consultant Services Agreement between Rosewood Therapy Services, Inc.
and Rosewood Care Center, Inc. of Swansea
Consultant Services Agreement between Rosewood Therapy Services, Inc.
and Rosewood Care Center, Inc. of Moline
Consultant Services Agreement between Rosewood Therapy Services, Inc.
and Rosewood Care Center, Inc. of Galesburg
44
<PAGE> 1
EXHIBIT 10.20
November 14, 1997
Ms. Devera A. Buckley, Assistant Vice President
State Street Bank and Trust Company of Missouri, N.A.
Corporate Trust Department
P.O. Box 321
St. Louis, Missouri 63166-0321
Re: Rosewood Care Center Holding Co.
Letter of Credit No. F700564 in the amount of $3,129,889.00
Expiring December 6, 1997
Dear Ms. Buckley:
This is to advise you that SunTrust Bank, Central Florida, N.A., will renew
the above-referenced Letter of Credit in favor of State Street Bank and Trust
Company of Missouri, N.A., for a period of one year.
If you should have any questions, please call me at (407) 237-5303.
Sincerely,
/s/Glenys Blenden
Vice President
Copies: Ms. Susan Gamble - Summers, Compton, Wells & Hamburg
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements at December 31, 1997 for the period ended December 31,
1997 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000909110
<NAME> ROSEWOOD CARE CENTER CAPITAL FUNDING CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 262
<SECURITIES> 0
<RECEIVABLES> 26,186
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 262
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,448
<CURRENT-LIABILITIES> 159
<BONDS> 26,288
<COMMON> 1
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 26,448
<SALES> 0
<TOTAL-REVENUES> 983
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909114
<NAME> ROSEWOOD CARE CENTER OF GALESBURG
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909113
<NAME> ROSEWOOD CARE CENTER OF SWANSEA
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909115
<NAME> ROSEWOOD CARE CENTER OF EAST PEORIA
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909116
<NAME> ROSEWOOD CARE CENTER OF PEORIA
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909117
<NAME> ROSEWOOD CARE CENTER OF ALTON
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909118
<NAME> ROSEWOOD CARE CENTER OF MOLINE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909120
<NAME> SWANSEA REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909121
<NAME> GALESBURG REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909122
<NAME> EAST PEORIA REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909123
<NAME> PEORIA REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909124
<NAME> ALTON REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,662
<SECURITIES> 0
<RECEIVABLES> 4,178
<ALLOWANCES> 181
<INVENTORY> 0
<CURRENT-ASSETS> 7,476
<PP&E> 24,999
<DEPRECIATION> 7,838
<TOTAL-ASSETS> 31,755
<CURRENT-LIABILITIES> 5,599
<BONDS> 0
<COMMON> 65
0
0
<OTHER-SE> 1,903
<TOTAL-LIABILITY-AND-EQUITY> 31,755
<SALES> 15,099
<TOTAL-REVENUES> 15,580
<CGS> 0
<TOTAL-COSTS> 12,797
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 983
<INCOME-PRETAX> 1,800
<INCOME-TAX> 154
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,646
<EPS-PRIMARY> 25
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Combined Financial Statements at December 31, 1997 for the period ended
December 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000909125
<NAME> MOLINE REAL ESTATE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
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0
0
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</TABLE>
