SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Meditrust
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(Name of Registrant as Specified In Its Charter)
Meditrust
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[X] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
$ 842,363.83
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(2) Form, Schedule or Registration Statement No.:
Registration Statement on Form S-4 (333-34831)
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(3) Filing Party:
Santa Anita Realty Enterprises, Inc.
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(4) Date Filed:
September 2, 1997
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Notes:
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THESE SLIDES CONTAIN FORWARD LOOKING STATEMENTS THAT ARE SUBJECT TO RISKS AND
UNCERTAINTIES. FOR THOSE STATEMENTS, WE CLAIM THE PROTECTION OF THE SAFE HARBOR
FOR FORWARD-LOOKING STATEMENTS CONTAINED IN THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF
FUTURE PERFORMANCE. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE IN THE
FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.
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Overview of Meditrust
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* Largest Health Care Real Estate Investment Trust (REIT)
. $2.6 Billion Asset Base
. 470 Healthcare Facilities
. 39 States
. 36 Operators
as of June 30, 1997
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CONSISTENT GROWTH IN REAL ESTATE INVESTMENTS
[BAR GRAPH DEPICTING GROWTH IN REAL ESTATE INVESTMENTS
FOR THE YEARS 1988 THROUGH 1997 APPEARS HERE]
December 31, 1988 69%
1989 33%
1990 16%
1991 14%
1992 22%
1993 19%
1994 21%
1995 20%
1996 21%
1997E 22%
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Growth Strategy
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Elderly Care: The Spectrum of Health Care Delivery Options
------------ ------------ ------------
"go-go" "slow-go" "no-go"
------------ ------------ ------------
------------ ------------ ------------
Assisted Traditional
Independent Living Geriatric
Living Facility Nursing
Home
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Lower Acuity Higher Acuity
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INVESTMENTS BY TYPE OF FACILITY
JUNE 30, 1997
[PIE CHART DEPICTING INVESTMENTS BY TYPE OF FACILITY]
NURSING HOMES 59%
RETIREMENT AND
ASSISTED LIVING 19%
REHAB SERVICE 11%
MEDICAL OFFICE
BUILDINGS 7%
ACUTE CARE
HOSPITAL CAMPUS 3%
PSYCHIATRIC;
ALCOHOL AND
SUBSTANCE ABUSE 1%
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INVESTMENTS BY OPERATOR
JUNE 30, 1997
[PIE CHART DEPICTING INVESTMENTS BY OPERATOR]
LIFE CARE CENTERS OF AMERICA 22%
SUN HEALTHCARE* 15%
EMERITUS CORPORATION* 7%
HORIZON/CMS* 5%
SPRINGWOOD ASSOCIATES 5%
HARBORSIDE* 4%
HEALTH ASSET REALTY TRUST 4%
TENET* 3%
INTEGRATED HEALTH SERVICES* 2%
OTHER NON PUBLIC 19%
OTHER PUBLIC*: 14%
- ALTERNATIVE LIVING SERVICES
- ARV ASSISTED LIVING
- ASSISTED LIVING CONCEPTS
- COLUMBIA
- GENESIS
- HEALTHSOUTH REHABILITATION
- KARRINGTON HEALTH
- MARINER
- MULTICARE
- STERLING HOUSE CORPORATION
- YOUTH SERVICES INTERNATIONAL
* PUBLIC COMPANIES = 50% OF TOTAL OPERATOR BASE
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DIVIDEND GROWTH 46 CONSECUTIVE INCREASES
[LINE GRAPH DEPICTING DIVIDEND GROWTH PER SHARE BY QUARTER]
Q1 .6075 1992 $2.46
Q2 .6125
Q3 .6175
Q4 .6225
Q1 .6275 1993 $2.54
Q2 .6325
Q3 .6375
Q4 .6425
Q1 .6475 1994 $2.62
Q2 .6525
Q3 .6575
Q4 .6625
Q1 .6675 1995 $2.70
Q2 .6725
Q3 .6775
Q4 .6825
Q1 .6875 1996 $2.78
Q2 .6925
Q3 .6975
Q4 .7025
Q1 .7075 1997 $2.86*
Q2 .7125
* ANALYST PROJECTION
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"Free Stock"
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IPO Share Price $13.33
Paid Dividends Per Share $26.47
as of June 30, 1997
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AVERAGE ANNUAL TOTAL RETURN
SINCE INCEPTION*
[BAR GRAPH DEPICTING AVERAGE ANNUAL TOTAL RETURN]
MEDITRUST 22%
S&P 16%
NAREIT 10%
*1985-1996
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[PICTURE OF A LIGHT BULB]
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SANTA ANITA
[PICTURE OF A GOLD CUP]
GOLD CUP
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The Paired Share REIT Structure
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-----------------------
Shareholders
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-----------------------
"Paired" Certificates
-----------------------
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Realty Company Operating Company
------------------- -------------------
. Real Estate Investment Trust . C-Corp
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Transaction Summary
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. Structure: Reverse Merger
Tax Free Exchange
. Option: $100M Available for Cash Tender of
Santa Anita Common Shares @ $31
per Share
. Exchange Ratio: 1.2016 Santa Anita Shares per
Meditrust Share
. Value: $415M/$33.30 per Share *
* based on $40/share
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Advantages of Paired-Share Structure
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* Provides higher yields and increased internal growth through direct
operations
* Increase underwriting of real estate through acquisition of
operations
* Achieve superior return on invested capital
* Opportunity to expand investments and diversify
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1997 FFO Multiples
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Paired Share REITS: Multiples
Starwood Lodging 14.9
Patriot American 14.2
First Union Realty 15.2
Average 14.8
Per Share Multiple
Meditrust $40.00 12.8
$46.00 15.0
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Improvement to Spread on Core Business
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Share FFO
Price Yield
$40 7.8%
$46 6.8%
1.0%
$500 million
FFO Growth
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Effect of FFO and Dividend - Post Merger
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Consensus
Estimate Adjusted for Adjusted for
Pre Merger Stock Split Merger
1997
Estimated FFO $3.12 $2.60 $2.52
Estimated Dividend Payment $2.86 $2.38 $2.38
Payout Ratio 92% 92% 94%
1998
Estimated FFO* $3.26 $2.71 $2.46 **
Estimated Dividend Payment $2.94 $2.45 $2.45
Payout Ratio 90% 90% 100%
* Assumes $500 million in core business
** Assumes no acquisitions
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Acquisition Strategy
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Meditrust vs. Patriot American
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Improvement in Investment Spreads
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Current Spread on Investments 2.50%
"Leakage" 1.50%
4.00%
Operating Company Returns 12-15%
Spread (after cost of capital) 4.5-7.5%
$2 Billion on Investments $90-150 million
Additional FFO per Share $.90-$1.50
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Access to Capital
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Revolving Line of Credit $ 500,000,000
Equity 2,000,000,000
Long Term Debt 1,000,000,000
Meditrust Currency 2,000,000,000
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TOTAL ACCESS TO CAPITAL $5,500,000,000
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Financial Position
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Pro Forma*
Capital Structure at: 6/30/97 12/31/96 12/31/95 12/31/94
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($ in 000's)
Real Estate Portfolio $2,806,509 $2,286,160 $1,855,002 $1,550,147
Total Debt 1,219,568 858,760 762,291 765,752
Total Shareholder's Equity (BV) 1,770,409 1,384,941 1,061,755 770,147
Equity Market Cap** 2,676,768 2,453,960 1,784,798 1,198,475
Total Market Cap** 3,896,336 3,312,720 2,547,069 1,964,227
Debt to Total Market Cap 31% 26% 30% 39%
Debt to Total Market Cap 24%
(Assuming Conversion of
Convertible Debentures)
*Investment Grade Ratings from Duff & Phelps, Moody's, and S&P
* Pro Forma amounts consider the August 1997 $410 Million Debt Offering and the
Santa Anita transaction, which is based on a post merger share price of $31.
** Equity Market Cap based on Closing Stock Price at the End of Each Period.
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MEDITRUST OPTIONS
INPATIENT HEALTHCARE
[PICTURE OF AN OCTAGON]
INPATIENT
HEALTHCARE
MEDITRUST
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MEDITRUST OPTIONS
ANCILLARY HEALTHCARE
[PICTURE OF AN OCTAGON]
INPATIENT ANCILLARY
HEALTHCARE HEALTHCARE
MEDITRUST
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MEDITRUST OPTIONS
RETIREMENT COMMUNITIES
[PICTURE OF AN OCTAGON]
INPATIENT ANCILLARY
HEALTHCARE HEALTHCARE
MEDITRUST RETIREMENT COMMUNITIES
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MEDITRUST OPTIONS
ENTERTAINMENT
[PICTURE OF AN OCTAGON]
INPATIENT ANCILLARY
HEALTHCARE HEALTHCARE
RETIREMENT COMMUNITIES
MEDITRUST
ENTERTAINMENT
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MEDITRUST OPTIONS
RECREATION
[PICTURE OF AN OCTAGON]
INPATIENT ANCILLARY
HEALTHCARE HEALTHCARE
RETIREMENT
COMMUNITIES
MEDITRUST
ENTERTAINMENT
RECREATION
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MEDITRUST OPTIONS
THOROUGHBRED HORSE RACING
[PICTURE OF AN OCTAGON]
INPATIENT ANCILLARY
HEALTHCARE HEALTHCARE
RETIREMENT
COMMUNITIES
MEDITRUST
ENTERTAINMENT
THOROUGHBRED RECREATION
HORSE RACING
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MEDITRUST OPTIONS
EQUITY DEVELOPMENT
[PICTURE OF AN OCTAGON]
INPATIENT ANCILLARY
HEALTHCARE HEALTHCARE
RETIREMENT
COMMUNITIES
MEDITRUST
EQUITY ENTERTAINMENT
DEVELOPMENT
THOROUGHBRED RECREATION
HORSE RACING
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MEDITRUST OPTIONS
REIT CONSOLIDATION
[PICTURE OF AN OCTAGON]
INPATIENT ANCILLARY
HEALTHCARE HEALTHCARE
REIT RETIREMENT
CONSOLIDATION COMMUNITIES
MEDITRUST
EQUITY ENTERTAINMENT
DEVELOPMENT
THOROUGHBRED RECREATION
HORSE RACING
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POST PARADE
FAST TRACK
[PICTURE OF A HORSE] STARWOOD
[PICTURE OF A HORSE] PATRIOT
[PICTURE OF A HORSE] FIRST UNION
[PICTURE OF A HORSE] MEDITRUST
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[PICTURE OF A HORSE RACE TRACK
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WINNERS
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[PICTURE OF A HORSE RACE TRACK
WITH FOUR HORSES AT VARIOUS POINTS ON THE TRACK]
WINNERS
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[PICTURE OF A HORSE RACE TRACK
WITH FOUR HORSES AT VARIOUS POINTS ON THE TRACK]
WINNERS
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[PICTURE OF A HORSE RACE TRACK
WITH FOUR HORSES AT VARIOUS POINTS ON THE TRACK]
WINNERS
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[PICTURE OF A HORSE RACE TRACK
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WINNERS
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WINNERS
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PHOTO FINISH
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WINNERS
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EVERYONE IS A WINNER
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PHOTO FINISH
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Summary / Benefits
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Diversification Elimination of
Leakage
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Lower Cost
of Capital Increased
Shareholder
Liquidity
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197 First Avenue, Needham, MA 02194
http://www.reit.com
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