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Previous: FIRST UNION REAL ESTATE EQUITY & MORTGAGE INVESTMENTS, 10-K405, 1999-03-29 |
Next: FORD MOTOR CREDIT CO, S-3, 1999-03-29 |
<PAGE> 1
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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 AND EXCHANGE ACT OF 1934
---------------------------------
Date of Report March 29, 1999
---------------
First Union Real Estate Equity and Mortgage Investments
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 1-6249 34-6513657
- --------------------------- ------------------------ --------------------
State or other jurisdiction (Commission File Number) (I.R.S. Employer
Identification No.)
Suite 1900, 55 Public Square
Cleveland, Ohio 44113-1937
- ---------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 781-4030
--------------------
- --------------------------------------------------------------------------------
Former name or former address, if changed since last report.
Total number of pages in report 2.
<PAGE> 2
ITEM 5. OTHER EVENTS
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The registrant has entered into contracts to sell nine shopping
centers and two office buildings.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
a) Financial Statements of Businesses Acquired
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Not applicable
b) Proforma Financial Information
------------------------------
The Proforma Combined Balance Sheet of the registrant as of
December 31, 1998, attached hereto as Exhibit 99.1, and the
Proforma Combined Statement of Operations for the year ended
December 31, 1998, attached hereto as Exhibit 99.2, reflects
proforma adjustments to the registrant's historical financial
statements assuming certain properties were not owned by the
registrant during that time as explained in the Notes to the
Proforma Financial Statements.
The Proforma Combined Statement of Operations for the year
ended December 31, 1998 is not necessarily indicative of the
actual results that would have occurred had the property sales
been consummated at the beginning of the respective periods or
of future operations of the registrant. The Proformas do not
take into consideration the increase in the registrant's liqudity
or possible uses of those funds.
These statements should be read in conjunction with the
Notes to Proforma Financial Statements.
c) Exhibits
99.1) Proforma Combined Balance Sheet as of December 31, 1998
99.2) Proforma Combined Statement of Operations for the Twelve
Months Ended December 31, 1998
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.
First Union Real Estate Equity
and Mortgage Investments
------------------------------
(Registrant)
Date: March 29, 1999 By: /s/ Gregory C. Scott
-------------- ----------------
Gregory C. Scott
Controller
<PAGE> 3
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
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PROFORMA COMBINED STATEMENT OF OPERATIONS
For the Twelve months Ended December 31, 1998
(in thousands)
<TABLE>
<CAPTION>
(Audited) 1998
1998 Adjustments Proforma
--------- ----------- --------
<S> <C> <C> <C>
REVENUES
Rents $ 320,592 $ 31,919 (a) $ 288,673
Interest - Mortgage loans 1,211 - 1,211
- Short-term investments 1,337 - 1,337
- Investments 302 - 302
Joint venture income and fees 501 - 501
Other 583 - 583
--------- --------- ---------
324,526 31,919 292,607
--------- --------- ---------
EXPENSES
Property operating 223,667 10,957 (a) 212,710
Real estate taxes 12,453 3,914 (a) 8,539
Depreciation and amortization 33,389 9,220 (a) 24,169
Interest-mortgages 29,032 1,219 (b) 27,813
Senior notes 5,856 5,856 (b) -
Bank loans 12,214 869 (b) 11,345
Notes payable 3,757 3,746 (b) 11
General and administrative 37,577 - 37,577
Litigation and Proxy expenses 4,848 - 4,848
Foreign currency loss 2,198 - 2,198
Unrealized loss on carrying value of assets identified
for disposition and impaired assets 51,000 - 51,000
--------- --------- ---------
415,991 35,781 380,210
--------- --------- ---------
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS $ (91,465) $ 3,862 $ (87,603)
Preferred dividend
(2,999) - (2,999)
--------- ---------
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAIN $ (94,464) $ (90,602)
========= =========
Per share data
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS,
BASIC AND DILUTED $ (3.07) $ (2.94)
========= =========
Adjusted shares of beneficial interest, basic 30,772 30,772
Adjusted shares of beneficial interest, diluted 31,015 31,115
</TABLE>
(a) To reflect the registrant's contracts to sell two office buildings and
nine shopping malls. Adjustment column also reflects the completed
sales of an office building and shopping center in the first quarter
of 1999.
(b) To reflect the use of proceeds from the sale of the properties net of
mortgage debt on the properties.
<PAGE> 4
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
-------------------------------------------------------
Proforma Combined Balance Sheet as of December 31, 1998
(in thousands)
<TABLE>
<CAPTION>
(Audited) 1998
1998 Adjustments Proforma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Investments in real estate
Land $ 130,340 (18,955) $ 111,385
Buildings and improvements 676,519 (169,978) 506,541
---------- -------- ---------
806,859 (188,933) 617,926
Less - Accumulated depreciation (165,357) 81,717 (83,640)
---------- -------- ---------
Total investments in real estate 641,502 (107,216) 534,286 (a)
Investment in joint venture 1,722 1,722
Mortgage loans and notes receivable 5,508 5,508
Other assets
Cash and cash equivalents - unrestricted 28,649 28,649
- restricted 16,526 16,526
Accounts receivable and prepayments 21,809 21,809
Investments 5 5
Inventory 2,798 2,798
Goodwill, net 45,379 45,379
Management and lease agreements, net 1,852 1,852
Deferred charges and other, net 6,864 6,864
Unamortized debt issue costs 7,758 (371) 7,387 (a)
Other 6,312 6,312
---------- -------- ---------
Total assets $ 786,684 (107,587) $ 679,097
========== ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loans $ 345,042 (15,225) $ 329,817 (a)
Notes payable 94,996 (90,000) 4,996 (a)
Senior notes 12,538 (12,538) 0 (a)
Bank loans 125,821 (10,999) 114,822 (a)
Accounts payable and accrued liabilities 42,659 42,659
Deferred obligations 10,602 10,602
Deferred capital gains and other deferred income 3,283 3,283
---------- -------- ---------
Total liabilities 634,941 (128,762) 506,179
---------- -------- ---------
Minority interest 1,047 1,047
Shareholders' equity
Preferred shares of beneficial interest, $25 liquidation preference,
2,300,000 shares authorized and 1,349,000 outstanding 31,737 31,737
Shares of beneficial interest, $1 par, unlimited authorization, outstanding 31,416 31,416
Paid-in capital 89,660 21,175 110,835
Foreign currency translation adjustment (2,117) (2,117)
---------- -------- ---------
Total shareholders' equity 150,696 21,175 171,871 (a)
---------- -------- ---------
$ 786,684 (107,587) $ 679,097
========== ======== =========
</TABLE>
(a) To reflect the registrant's potential sales of nine additional shopping
malls and two office buildings which are under contract and the sale of an
office building and shopping center in the first quarter of 1999. The sale
of the office building and shopping center resulted in gross proceeds of
$23.4 million which represents 3% of the registrant's December 31, 1998
total assets. The net proceeds after closing costs, mortgage prepayment
fees and mortgage prepayments would be $113.5 million for both consummated
asset sales and the properties under contract to sell. For the purposes
of the historical balance sheet, the remaining proceeds are used to repay
the $90 million Note Payable $12.5 million Senior Notes and $11.0 million
of bank loans.
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