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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 8, 1995
MEDITRUST
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(Exact name of registrant as specified in charter)
Massachusetts 0-14022 04-6532031
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(State of (Commission (I.R.S. Employer
Incorporation) File No.) Identification No.)
197 First Avenue, Needham, Massachusetts 02194
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(617) 433-6000
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Item 5. OTHER EVENTS
Meditrust (the "Company") is in the process of negotiating the terms,
conditions and structure of a proposed sale of $105,000,000 principal amount of
the Company's convertible notes to certain institutional investors (primarily
insurance companies) in transactions arranged by NatWest Securities Limited and
Smith Barney Inc. Based upon current negotiations, the notes are expected to
be issued in two series, one in the principal amount of $40,000,000 bearing
interst at 8.54% with a five-year term and the other in the principal amount of
$65,000,000 bearing interest at 8.56% with a seven-year term. The notes are
expected to be convertible into shares of beneficial interest, at the option of
the holder, at a conversion price of $32.625 per share. There is no assurance
that this transaction will be consummated.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
YEAR ENDED DECEMBER 31, 1994 VS. YEAR ENDED DECEMBER 31, 1993.
Revenues for the year ended December 31, 1994 were $172,993,000
compared to $150,375,000 for the year ended December 31, 1993, an increase of
$22,618,000 or 15%. Revenue growth resulted from increased rental income of
$2,059,000 and increased interest income of $20,559,000 resulting primarily from
additional real estate investments made during the past year.
For the year ended December 31, 1994, total expenses increased by
$5,794,000. Interest expense increased by $5,286,000 and resulted from the
issuance of convertible debentures in November 1993 and March 1994 and a higher
level of short-term borrowings during 1994. The increase was partially offset by
the prepayment of senior secured and unsecured debt totaling $23,300,000 and the
conversion of convertible debentures totaling $59,002,000 during 1994.
Depreciation and amortization expense increased by $894,000 and general and
administrative expense decreased by $386,000.
YEAR ENDED DECEMBER 31, 1993 VS. YEAR ENDED DECEMBER 31, 1992.
Revenues for the year ended December 31, 1993 were $150,375,000
compared to $132,394,000 for the year ended December 31, 1992, an increase of
$17,981,000 or 14%. Revenue growth resulted from increased rental income of
$10,325,000 and increased interest income of $7,656,000 as a result of
additional real estate investments made during the past year.
For the year ended December 31, 1993, total expenses increased by
$5,703,000. Interest expense increased by $4,034,000 and resulted primarily from
the issuance of convertible debentures in February and November 1993 which was
partially offset by the prepayment of senior debt in December 1992. Depreciation
and amortization expense increased by $2,245,000 primarily due to depreciation
of the additional real estate investments made during the past year and general
and administrative expense decreased by $576,000.
Liquidity and Capital Resources
The Company provides funding for its investments through a combination
of long-term and short-term financing including both debt and equity. The
Company obtains long-term financing through the issuance of Shares, the issuance
of long-term unsecured
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notes, the issuance of convertible debentures and the assumption of mortgage
notes. The Company obtains short-term financing through the use of bank lines of
credit which are replaced with long-term financing as appropriate. From time to
time, the Company may utilize interest rate caps or swaps to hedge interest rate
volatility. It is the Company's objective to match the mortgage and lease terms
with the terms of its borrowings. The Company seeks to maintain an appropriate
spread between its borrowing costs and the rate of return on its investments.
When development loans convert to sale/leaseback transactions or permanent
mortgage loans, the base rent or interest rate, as appropriate, is fixed at the
time of such conversion.
In March 1994, the Company issued $90,000,000 of 7 1/2% convertible
debentures due 2001 and the proceeds were used to repay short-term borrowings.
In October 1994, the Company completed the sale of 4,500,000 Shares at
$30.875 and the proceeds of $138,937,000 were used to repay short-term
borrowings and for investments in additional health care facilities.
As of December 31, 1994, the Company's gross real estate investments
totaled $1,550,147,000 including 233 long-term care facilities, 23
rehabilitation hospitals, two alcohol and substance abuse treatment facilities,
six psychiatric hospitals, four retirement living facilities and six medical
office buildings. As of December 31, 1994, the Company had outstanding funding
commitments of approximately $31,398,000 for the completion of ten facilities
under construction and for additions to three existing facilities. The Company
has shareholders' equity of $770,147,000 and a total debt to equity ratio of 1.0
to 1.0 as of December 31, 1994.
As of January 31, 1995, the Company has an unsecured revolving line of
credit expiring July 1997 in the amount of $205,000,000 bearing interest at the
lender's prime rate or LIBOR plus 1.25%. In addition, the Company has effective
shelf registrations on file with the Securities and Exchange commission under
which the Company may issue up to $444,000,000 of securities including debt,
convertible debt and shares of beneficial interest.
The Company believes that its various sources of capital resources are
adequate to finance its operations as well as pending property acquisitions,
mortgage financings and future dividends. For the balance of 1995, however, in
the event that the Company identifies appropriate investment opportunities, the
Company may raise additional capital through the sale of shares of beneficial
interest or by the issuance of additional long-term debt.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Description
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23 Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedule
99 Consolidated Financial Statements of Meditrust as
of December 31, 1994 and 1993 and for the years
ended December 31, 1994, 1993 and 1992
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDITRUST
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March 8, 1995 /s/ Lisa P. McAlister
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Lisa P. McAlister
Vice President and Treasurer
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