SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 8-K/A
JOINT CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
APRIL 2, 2001
Commission file number 0-9109 Commission file number 0-9110
MEDITRUST CORPORATION MEDITRUST OPERATING COMPANY
(Exact Name of Registrant as (Exact Name of Registrant as
specified in its charter) specified in its charter)
DELAWARE DELAWARE
(State or other jurisdiction (State or other jurisdiction
of incorporation) of incorporation)
95-3520818 95-3419438
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
909 HIDDEN RIDGE, SUITE 600, 909 HIDDEN RIDGE, SUITE 600,
IRVING, TX 75038 IRVING, TX 75038
(Address of principal executive (Address of principal executive
offices and zip code) offices and zip code)
(214) 492-6600 (214) 492-6600
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 3, 2001, pursuant to a Purchase and Sale Agreement dated as of December
20, 2000 and amended March 8, 2001 and March 29, 2001, Meditrust Corporation and
Meditrust Operating Company (collectively, the "Companies") announced the
transfer of its beneficial ownership interest in a majority of its long term
care skilled nursing facilities to Care Realty, L.L.C. (the "Care Realty
Transfer"). Total gross proceeds of $441 million include $406 million in cash
and $35 million in subordinated indebtedness due April 2006 paying interest at a
rate of 9%. The press release attached hereto as Exhibit 99.1, which is hereby
incorporated by reference herein, provides additional information regarding the
transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
The Meditrust Companies
Pro Forma Combined Consolidated Balance Sheets as of March 31, 2001 (Unaudited) and
December 31, 2000 (Unaudited)............................................................................. 3
Pro Forma Combined Consolidated Statements of Operations for the three months ended
March 31, 2001 (Unaudited) and the year ended December 31, 2000 (Unaudited)............................... 4
Meditrust Corporation
Pro Forma Consolidated Balance Sheets as of March 31, 2001 (Unaudited) and
December 31, 2000 (Unaudited)............................................................................. 5
Pro Forma Consolidated Statements of Operations for the three months ended
March 31, 2001 (Unaudited) and the year ended December 31, 2000 (Unaudited)............................... 6
Meditrust Operating Company
Consolidated Balance Sheets as of March 31, 2001 (Unaudited) and 7
December 31, 2000.........................................................................................
Consolidated Statements of Operations for the three months ended March 31, 2001
(Unaudited) and the year ended December 31, 2000.......................................................... 8
Notes to Pro Forma Combined Consolidated Financial Statements................................................. 9
(c) Exhibits.*
Exhibit No. Description
2.1 Purchase and Sale Agreement**
2.2 First Amendment to Purchase and Sale Agreement**
2.3 Second Amendment to Purchase and Sale Agreement**
99.1 Press release of The Meditrust Companies dated April 3, 2001 announcing the completion
of a $441 million asset sale.
* Previously filed on Joint Current Report on Form 8-K, event dated April 2,
2001.
** The Companies agree to furnish supplementally to the Commission a copy of
any omitted schedule or exhibit to this agreement upon request by the
Commission.
THE MEDITRUST COMPANIES
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements
have been prepared to give effect to the transfer of Meditrust Corporation's
beneficial ownership interest in the majority of its long term care skilled
nursing facilities to Care Realty, L.L.C. The unaudited pro forma
consolidated balance sheets have been prepared assuming that the transactions
described above were completed on the balance sheet dates indicated. The
unaudited pro forma consolidated statements of operations have been prepared
assuming the transactions described above were completed at the beginning of
the indicated periods.
The pro forma adjustments are based upon available information and
contain assumptions that management believes are reasonable under the
circumstances. The unaudited pro forma consolidated financial statements are
provided for informational purposes only and do not purport to be indicative
of the Companies' financial condition or the results of operations that would
actually have been obtained had such transactions been completed for the
periods or as of the dates presented or that may be obtained in the future.
The unaudited pro forma consolidated financial statements and
related notes should be read in conjunction with the Combined Consolidated
Financial Statements of the Companies and the notes thereto, Management's
Discussion and Analysis of Financial Condition and Results of Operations and
other financial information included on the Joint Annual Report on Form 10-K
and the Quarterly Report on Form 10-Q.
2
THE MEDITRUST COMPANIES
PRO FORMA COMBINED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS) MARCH 31, 2001 DECEMBER 31, 2000
----------------------------------------- ----------------------------------------
HISTORICAL ADJUSTMENT PRO FORMA HISTORICAL ADJUSTMENT PRO FORMA
-------------- ------------ ------------- ------------- ------------ -------------
ASSETS:
Real estate investments, net ...................$ 3,322,002 $ (430,108)(1) $ 2,891,894 $3,352,676 $ (435,950)(1) $2,916,726
Cash and cash equivalents....................... 36,396 404,533 (2) 39,929 38,993 404,533 (2) 42,526
(401,000)(3) (401,000)(3)
Fees, interest and other receivables............ 60,547 29,872 (4) 90,419 73,476 29,872 (4) 97,905
- (5,443)(5)
Goodwill, net................................... 452,104 - 452,104 457,789 - 457,789
Other assets, net............................... 161,863 - 161,863 170,213 - 170,213
------------ -------------- ------------ ------------ -------------- ------------
Total assets..............................$ 4,032,912 $ (396,703) $ 3,636,209 $4,093,147 $ (407,988) $3,685,159
============ ============== ============ ============ ============== ============
LIABILITIES:
Indebtedness:
Notes payable, net..........................$ 1,013,806 $ (401,000)(3) $ 612,806 1,013,640 $ (401,000)(3) $ 612,640
Convertible debentures, net................. 53,942 - 53,942 136,915 - 136,915
Bank notes payable, net..................... 486,176 - 486,176 397,827 - 397,827
Bonds and mortgages payable, net............ 33,778 - 33,778 42,077 - 42,077
------------ -------------- ------------ ------------ -------------- ------------
Total indebtedness........................ 1,587,702 (401,000) 1,186,702 1,590,459 (401,000) 1,189,459
------------ -------------- ------------ ------------ -------------- ------------
Accounts payable, accrued expenses and other
liabilities................................. 137,274 4,297 (6) 141,571 179,877 3,945 (6) 183,822
------------ -------------- ------------ ------------ -------------- ------------
Total liabilities........................ 1,724,976 (396,703) 1,328,273 1,770,336 (397,055) 1,373,281
------------ -------------- ------------ ------------ -------------- ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Meditrust Corporation Preferred Stock, $0.10
par value; 6,000 shares authorized; 701
shares issued and outstanding at March 31,
2001 and December 31, 2000,
respectively............................... 70 - 70 70 - 70
Paired Common Stock, $0.20 combined par
value; 500,000 shares authorized;
143,008 and 142,905 paired shares
issued and outstanding at March 31,
2001 and December 31, 2000,
respectively............................. 28,603 - 28,603 28,580 - 28,580
Additional paid-in-capital................... 3,659,662 - 3,659,662 3,659,339 - 3,659,339
Unearned compensation........................ (4,489) - (4,489) (4,911) - (4,911)
Accumulated other comprehensive income....... (812) - (812) (985) - (985)
Distributions in excess of net income........ (1,375,098) - (1,375,098) (1,359,282) (10,933)(7) (1,370,215)
------------ -------------- ------------ ------------ -------------- ------------
Total shareholders' equity............... 2,307,936 - 2,307,936 2,322,811 (10,933) 2,311,878
------------ -------------- ------------ ------------ -------------- ------------
Total liabilities and shareholders'
equity................................ $ 4,032,912 $ (396,703) $ 3,636,209 $4,093,147 $ (407,988) $3,685,159
============ ============== ============ ============ ============== ============
3
THE MEDITRUST COMPANIES
PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED FOR THE YEAR ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 31, 2001 DECEMBER 31, 2000
-------------------------------------------- ----------------------------------------
HISTORICAL ADJUSTMENT PRO FORMA HISTORICAL ADJUSTMENT PRO FORMA
------------- --------------- -------------- ------------ ------------ ------------
REVENUE:
Hotel.................................... $ 152,996 $ - $ 152,996 $ 611,545 $ - $ 611,545
Rental................................... 27,194 (16,676)(8) 10,518 116,040 (65,766)(8) 50,274
Interest................................. 9,263 (2,134)(9) 7,129 95,253 (5,920)(9) 89,333
------------- --------------- ------------ ------------ -------------- ------------
189,453 (18,810) 170,643 822,838 (71,686) 751,152
------------- --------------- ------------ ------------ -------------- ------------
EXPENSES:
Hotel operations......................... 74,400 - 74,400 321,630 - 321,630
Interest................................. 34,936 (8,947)(10) 25,989 186,951 (38,112)(10) 148,839
Depreciation and amortization............ 35,300 - 35,300 150,138 (14,897)(11) 135,241
Amortization of goodwill................. 5,686 - 5,686 22,755 - 22,755
General and administrative............... 12,161 7 (12) 12,168 49,985 28 (12) 50,013
Rental property operations............... 7,804 - 7,804 28,895 - 28,895
Loss on sale of assets................... 54 - 54 130,536 - 130,536
Impairment of real estate assets,
mortgages and notes receivable......... 21,088 - 21,088 183,698 5,489 (13) 189,187
Provision for loss on
equity securities..................... - - - 50,279 - 50,279
Other.................................... 10,020 - 10,020 32,901 5,443 (14) 38,344
------------- --------------- ------------ ------------ -------------- ------------
201,449 (8,940) 192,509 1,157,768 (42,049) 1,115,719
------------- --------------- ------------ ------------ -------------- ------------
LOSS BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPAL............................... (11,996) (9,870) (21,866) (334,930) (29,637) (364,567)
Income tax expense...................... 176 - 176 629 - 629
------------- --------------- ------------ ------------ -------------- ------------
LOSS BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE.................... (12,172) (9,870) (22,042) (335,559) (29,637) (365,196)
Gain on early extinguishments of debt... - - - 1,403 - 1,403
Cumulative effect on prior years (to
December 31, 2000) of change in
accounting principle.................. 856 - 856 - - -
------------- --------------- ------------ ------------ -------------- ------------
NET LOSS................................... (11,316) (9,870) (21,186) (334,156) (29,637) (363,793)
Preferred stock dividends............... (4,500) - (4,500) (18,000) - (18,000)
------------- --------------- ------------ ------------ -------------- ------------
NET LOSS AVAILABLE TO COMMON
SHAREHOLDERS............................ $ (15,816) $ (9,870) $ (25,686) $ (352,156) $ (29,637) $ (381,793)
============= =============== ============ ============ ============== ============
BASIC LOSS PER PAIRED COMMON SHARE:
Loss available to Common Shareholders
before extraordinary item............... $ (0.12) $ (0.07) $ (0.19) $ (2.49) $ (0.21) $ (2.70)
Gain on early extinguishments of debt...... - - - 0.01 - 0.01
Cumulative effect of change in accounting
principle............................... 0.01 - 0.01 - - -
------------- --------------- ------------ ------------ -------------- ------------
Net loss................................... $ (0.11) $ (0.07) $ (0.18) $ (2.48) $ (0.21) $ (2.69)
============= =============== ============ ============ ============== ============
DILUTED LOSS PER PAIRED COMMON SHARE:
Loss available to Common Shareholders
before extraordinary item............... $ (0.12) $ (0.07) $ (0.19) $ (2.49) $ (0.21) $ (2.70)
Gain on early extinguishments of debt...... - - - 0.01 - 0.01
Cumulative effect of change in accounting
principle............................... 0.01 - 0.01 - - -
------------- --------------- ------------ ------------ -------------- ------------
Net loss................................... $ (0.11) $ (0.07) $ (0.18) $ (2.48) $ (0.21) $ (2.69)
============= =============== ============ ============ ============== ============
4
MEDITRUST CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS) MARCH 31, 2001 DECEMBER 31, 2000
------------------------------------------ ---------------------------------------
HISTORICAL ADJUSTMENT PRO FORMA HISTORICAL ADJUSTMENT PRO FORMA
------------- -------------- ------------ ------------- ------------ ------------
ASSETS:
Real estate investments, net .................. $ 3,302,644 $ (430,108)(1) $ 2,872,536 $ 3,333,168 $ (435,950)(1) $2,897,218
Cash and cash equivalents...................... 36,386 404,533 (2) 39,919 38,991 404,533 (2) 42,524
(401,000)(3) (401,000)(3)
Fees, interest and other receivables........... 38,725 29,872 (4) 68,597 56,829 29,872 (4) 81,258
(5,443)(5)
Goodwill, net.................................. 423,643 - 423,643 429,134 - 429,134
Rent and royalties receivable from Meditrust
Operating Company............................ 140,532 - 140,532 63,516 - 63,516
Due from Meditrust Operating Company........... - - - 27,679 - 27,679
Other assets, net.............................. 108,215 - 108,215 117,275 - 117,275
------------ -------------- ------------ ------------- -------------- -----------
Total assets............................. $ 4,050,145 $ (396,703) $ 3,653,442 $ 4,066,592 $ (407,988) $3,658,604
============ ============== ============ ============= ============== ===========
LIABILITIES:
Indebtedness:
Notes payable, net........................ $ 1,013,806 $ (401,000)(3) $ 612,806 $ 1,013,640 $ (401,000)(3) $ 612,640
Convertible debentures, net................ 53,942 - 53,942 136,915 - 136,915
Bank notes payable, net.................... 486,176 - 486,176 397,827 - 397,827
Bonds and mortgages payable, net........... 33,778 - 33,778 42,077 - 42,077
------------ -------------- ------------ ------------- -------------- -----------
Total indebtedness....................... 1,587,702 (401,000) 1,186,702 1,590,459 (401,000) 1,189,459
------------ -------------- ------------ ------------- -------------- -----------
Due to Meditrust Operating Company............. 28,747 - 28,747 - - -
Accounts payable, accrued expenses and other
liabilities................................. 72,425 4,297 (6) 76,722 110,545 3,945 (6) 114,490
------------ -------------- ------------ ------------- -------------- -----------
Total liabilities........................ 1,688,874 (396,703) 1,292,171 1,701,004 (397,055) 1,303,949
------------ -------------- ------------ ------------- -------------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Meditrust Corporation Preferred Stock, $0.10
par value; 6,000 shares authorized; 701
shares issued and outstanding at March 31,
2001 and December 31, 2000, respectively... 70 - 70 70 - 70
Common Stock, $0.10 par value; 500,000
shares authorized; 144,313 and
144,210 shares issued and outstanding at
March 31, 2001 and December 31, 2000,
respectively............................... 14,432 - 14,432 14,421 - 14,421
Additional paid-in-capital................... 3,592,640 - 3,592,640 3,592,306 - 3,592,306
Unearned compensation........................ (2,240) - (2,240) (2,526) - (2,526)
Accumulated other comprehensive income....... 173 - 173 - - -
Distributions in excess of net income........ (1,243,804) - (1,243,804) (1,238,683) (10,933)(7) (1,249,616)
------------ -------------- ------------ ------------- -------------- -----------
Total shareholders' equity............... 2,361,271 - 2,361,271 2,365,588 (10,933) 2,354,655
------------ -------------- ------------ ------------- -------------- -----------
Total liabilities and shareholders'
equity.................................$ 4,050,145 $ (396,703) $3,653,442 $ 4,066,592 $ (407,988) $3,658,604
============ ============== ============ ============= ============== ===========
5
MEDITRUST CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED FOR THE YEAR ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 31, 2001 DECEMBER 31, 2000
----------------------------------------- ---------------------------------------
HISTORICAL ADJUSTMENT PRO FORMA HISTORICAL ADJUSTMENT PRO FORMA
------------- ------------ ------------- -------------- ------------ -----------
REVENUE:
Rental.....................................$ 27,194 $ (16,676)(8) $ 10,518 $ 116,040 $ (65,766)(8) $ 50,274
Interest................................... 9,257 (2,134)(9) 7,123 95,172 (5,920)(9) 89,252
Rent from Meditrust Operating Company...... 71,568 - 71,568 278,379 - 278,379
Interest from Meditrust Operating Company.. - - - 616 - 616
Royalty from Meditrust Operating Company... 5,448 - 5,448 20,666 - 20,666
Hotel...................................... 3,055 - 3,055 11,216 - 11,216
------------- ------------ ------------ -------------- ------------ -----------
116,522 (18,810) 97,712 522,089 (71,686) 450,403
------------- ------------ ------------ -------------- ------------ -----------
EXPENSES:
Hotel operations........................... 1,442 - 1,442 5,377 - 5,377
Interest................................... 34,857 (8,947)(10) 25,910 186,457 (38,112)(10) 148,345
Depreciation and amortization.............. 32,726 - 32,726 135,414 (14,897)(11) 120,517
Amortization of goodwill................... 5,492 - 5,492 21,977 - 21,977
General and administrative................. 4,340 7 (12) 4,347 19,017 28 (12) 19,045
Rental property operations................. 7,804 - 7,804 28,895 - 28,895
Loss on sale of assets..................... 54 - 54 131,513 - 131,513
Impairment of real estate assets,
mortgages, and notes receivable.......... 21,088 - 21,088 183,698 5,489 (13) 189,187
Provision for loss on equity securities.... - - - 50,279 - 50,279
Other...................................... 10,020 - 10,020 32,901 5,443 (14) 38,344
------------- ------------ ------------ -------------- ------------ -----------
117,823 (8,940) 108,883 795,528 (42,049) 753,479
------------- ------------ ------------ -------------- ------------ -----------
LOSS BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE... (1,301) (9,870) (11,171) (273,439) (29,637) (303,076)
Income tax expense......................... 176 - 176 629 - 629
------------- ------------ ------------ -------------- ------------ -----------
LOSS BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE....................... (1,477) (9,870) (11,347) (274,068) (29,637) (303,705)
Gain on early extinguishments of debt...... - - - 1,403 - 1,403
Cumulative effect on prior years (to
December 31, 2000) of change in
accounting principle..................... 856 - 856 - - -
------------- ------------ ------------ -------------- ------------ -----------
NET LOSS...................................... (621) (9,870) (10,491) (272,665) (29,637) (302,302)
Preferred stock dividends................. (4,500) - (4,500) (18,000) - (18,000)
------------- ------------ ------------ -------------- ------------ -----------
NET LOSS AVAILABLE TO COMMON
SHAREHOLDERS..............................$ (5,121) $ (9,870) $ (14,991) $ (290,665) $ (29,637) $(320,302)
============= ============ ============ ============== ============ ===========
BASIC LOSS PER COMMON SHARE:
Loss available to Common Shareholders
before extraordinary item.................$ (0.04) $ (0.07) $ (0.11) $ (2.04) $ (0.21) $ (2.25)
Gain on early extinguishments of debt......... - - - 0.01 - 0.01
Cumulative effect of change in accounting
principle................................. 0.01 - 0.01 - - -
------------- ------------ ------------ -------------- ------------ -----------
Net loss......................................$ (0.03) $ (0.07) $ (0.10) $ (2.03) $ (0.21) $ (2.24)
============= ============ ============ ============== ============ ===========
DILUTED LOSS PER COMMON SHARE:
Loss available to Common Shareholders
before extraordinary item.................$ (0.04) $ (0.07) $ (0.11) $ (2.04) $ (0.21) $ (2.25)
Gain on early extinguishments of debt......... - - - 0.01 - 0.01
Cumulative effect of change in accounting
principle................................. 0.01 - 0.01 - - -
------------- ------------ ------------ -------------- ------------ -----------
Net loss......................................$ (0.03) $ (0.07) $ (0.10) $ (2.03) $ (0.21) $ (2.24)
============= ============ ============ ============== ============ ===========
6
MEDITRUST OPERATING COMPANY
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
-------------------- -------------------
(IN THOUSANDS) 2001 2000
-------------------- -------------------
(unaudited)
ASSETS:
Cash and cash equivalents.................................................. $ 10 $ 2
Fees, interest and other receivables....................................... 21,822 16,647
Due from Meditrust Corporation............................................. 28,747 -
Other current assets, net.................................................. 9,552 9,613
-------------------- -------------------
Total current assets.................................................. 60,131 26,262
Investment in common stock of Meditrust Corporation........................ 37,581 37,581
Goodwill, net.............................................................. 28,461 28,655
Property, plant and equipment, less accumulated depreciation of $10,954
and $9,339, respectively.............................................. 57,113 56,125
Other non-current assets................................................... 6,592 6,959
-------------------- -------------------
Total assets................................................ $ 189,878 $ 155,582
==================== ===================
LIABILITIES:
Accounts payable........................................................... $ 28,259 $ 28,876
Accrued payroll and employee benefits...................................... 27,118 30,767
Accrued expenses and other current liabilities............................. 6,735 6,516
Rent and royalty payable to Meditrust Corporation.......................... 140,532 63,516
Due to Meditrust Corporation............................................... - 27,679
-------------------- -------------------
Total current liabilities............................................ 202,644 157,354
Other non-current liabilities.............................................. 2,737 3,173
-------------------- -------------------
Total liabilities.................................................... 205,381 160,527
-------------------- -------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common Stock, $0.10 par value; 500,000 shares authorized; 143,008 and
142,905 shares issued and outstanding at March 31, 2001 and December 31,
2000, respectively ...................................................... 14,302 14,290
Additional paid-in-capital................................................. 104,723 104,734
Unearned compensation...................................................... (2,249) (2,385)
Accumulated other comprehensive income..................................... (985) (985)
Accumulated deficit........................................................ (131,294) (120,599)
-------------------- -------------------
Total shareholders' deficit........................................ (15,503) (4,945)
-------------------- -------------------
Total liabilities and shareholders' equity..................... $ 189,878 $ 155,582
==================== ===================
7
MEDITRUST OPERATING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE
MONTHS ENDED FOR THE YEAR ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 31, 2001 DECEMBER 31, 2000
-------------------- --------------------
REVENUE: (unaudited)
Hotel ............................................... $ 150,045 $ 600,329
Interest ............................................ 6 81
-------------------- --------------------
150,051 600,410
-------------------- --------------------
EXPENSES:
Hotel operations .................................... 73,038 316,253
Depreciation and amortization ....................... 2,574 14,724
Amortization of goodwill ........................... 194 778
Interest and other .................................. 79 494
Interest to Meditrust Corporation ................... - 616
General and administrative .......................... 7,845 30,968
Royalty to Meditrust Corporation .................... 5,448 20,666
Rent to Meditrust Corporation ....................... 71,568 278,379
Gain on asset sales.................................. - (977)
-------------------- --------------------
160,746 661,901
-------------------- --------------------
NET LOSS .............................................. $ (10,695) $ (61,491)
==================== ====================
EARNINGS PER COMMON SHARE:
Assuming no dilution ................................. $ (0.08) $ (0.43)
Assuming dilution..................................... $ (0.08) $ (0.43)
8
THE MEDITRUST COMPANIES
NOTES TO PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The pro forma combined consolidated balance sheets have been prepared assuming
that the transfer of the Companies' beneficial ownership interest in certain
healthcare facilities on April 3, 2001 was completed on the dates of the
indicated periods. The pro forma combined consolidated statements of operations
have been prepared assuming that the transaction described above was completed
at the beginning of the indicated periods.
TRANSACTION
The pro forma financial statements reflect the closing of the following
transactions:
- The transfer of Meditrust Corporation's beneficial ownership
interest in the majority of its long term care skilled nursing
facilities to Care Realty, L.L.C. (the "Care Realty Transfer") for
$406 million in cash and $35 million in subordinated indebtedness;
and
- The application of the net proceeds towards indebtedness of $401
million.
PRO FORMA ADJUSTMENTS AND ASSUMPTIONS
The following notes describe the adjustments made to the historical financial
statements:
(1) To reflect the transfer of Meditrust Corporation's real estate
investments to Care Realty, L.L.C. as follows:
March 31, December 31,
(IN THOUSANDS) 2001 2000
------------- -----------------
Mortgages $ 96,185 $ 96,538
Leases 414,910 414,910
------------- -----------------
511,095 511,448
Impairment reserve (80,987) (75,498)
------------- -----------------
Total investment in real estate transferred $ 430,108 $ 435,950
============= =================
(2) To record the net cash received at the closing of the Care Realty
Transfer.
(3) To record the repayment of notes payable with net proceeds
received from Care Realty, L.L.C.
(4) To record the $35 million in subordinated indebtedness, net of
discount.
(5) To reflect the write-off of straight-line rent receivables recorded
at December 31, 2000.
(6) To record the accrual of transaction costs incurred in connection
with the Care Realty Transfer.
(7) To record the effect of additional impairments identified in
connection with the Care Realty Transfer and the effect of the
write-off of straight-line rent receivables recorded at December 31,
2000.
(8) To remove the historical rental revenue related to investments in
leased assets transferred to Care Realty, L.L.C.
(9) To remove the historical interest revenue related to investments in
mortgages transferred to Care Realty, L.L.C.
9
THE MEDITRUST COMPANIES
NOTES TO PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(10) To reflect the net effect on interest expense resulting from the
application of proceeds received in connection with the Care Realty
Transfer to repay notes payable as follows:
Three months ended, Year ended,
(IN THOUSANDS) March 31, 2001 December 31, 2000
------------------------- -----------------------
Proceeds applied to notes payable $ 401,000 $ 401,000
Weighted average interest rate* 8.9% 9.5%
------------------------- -----------------------
8,947 38,112
========================= =======================
* Prior to effect of interest rate swap agreement which would
have reduced the interest expense adjustments by approximately
$367,000 and $3,792,000, respectively, for the three months
ended March 31, 2001 and the year ended December 31, 2000.
(11) To remove the historical depreciation and amortization related to
investments in leased assets transferred to Care Realty, L.L.C.
(12) To remove the historical amortization of deferred gains on sale
leaseback assets transferred to Care Realty L.L.C.
(13) To reflect in the statement of operations for the year ended
December 31, 2000 the additional impairment of real estate
investments recorded in connection with the Care Realty Transfer.
(14) To reflect in the statement of operations for the year ended
December 31, 2000 the write-off of straight-line rent receivables
recorded in connection with the Care Realty Transfer.
10
THE MEDITRUST COMPANIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: __________________________
MEDITRUST CORPORATION
/s/ David L. Rea
----------------------------
David L. Rea
Chief Financial Officer
MEDITRUST OPERATING COMPANY
/s/ David L. Rea
----------------------------
David L. Rea
Chief Financial Officer
11