<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 April 15, 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
------------
The registrant has entered into contracts to sell nine shopping
centers, one office building and eight apartment complexes. The registrant has
sold a shopping center in February 1999 and two office buildings in March 1999
and April 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
a) Financial Statements
--------------------
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 the sale of nine shopping
centers, eight apartment complexes and an office building
which are under contract to be sold and the completed sales
of two office buildings and a shopping center.
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 liquidity 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: April 15, 1999 By:/S/ Gregory C. Scott
-------------- ----------------
Gregory C. Scott
Controller
<PAGE> 1
EXHIBIT 99.1
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS Proforma
Combined Balance Sheets as of December 31, 1998
(in thousands)
<TABLE>
<CAPTION>
1998
1998 Adjustments Proforma
---- ----------- --------
<S> <C> <C> <C>
ASSETS
Investments in real estate
Land $ 130,340 (31,549) $ 98,791
Buildings and improvements 676,519 (250,391) 426,128
--------- -------- ---------
806,859 (281,940) 524,919
Less - Accumulated depreciation (165,357) 97,368 (67,989)
--------- -------- ---------
Total investments in real estate 641,502 (184,572)(a) 456,930
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 (718)(a) 7,040
Other 6,312 -- 6,312
--------- -------- ---------
Total assets $ 786,684 (185,290) $ 601,394
========= ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loans $ 345,042 (52,956)(a) $ 292,086
Notes payable 94,996 (60,327)(a) 34,669
Senior notes 12,538 -- (a) 12,538
Bank loans 125,821 (101,000)(a) 24,821
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 (214,283) 420,658
--------- -------- ---------
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 28,993(a) 118,653
Foreign currency translation adjustment (2,117) (2,117)
--------- -------- ---------
Total shareholders' equity 150,696 28,993 179,689
--------- -------- ---------
$ 786,684 -- $ 601,394
========= ======== =========
</TABLE>
(a) To reflect the registrant's sale of two office buildings and a shopping
center and the potential sales of nine additional shopping malls, one
office building and eight apartment complexes which are under contract to
be sold. The net proceeds after closing costs, mortgage prepayment fees and
mortgage prepayments would be $161.3 million. For the purposes of the
historical balance sheet, the remaining proceeds are used to repay $60.3
million of Notes payable and $101 million of Bank loans. The sale of the
two office buildings and a shopping center resulted in gross proceeds of
$27.2 million which represents 3% of the registrant's December 31, 1998
total assets.
<PAGE> 1
EXHIBIT 99.2
FIRST UNION REAL ESTATE INVESTMENTS
PROFORMA COMBINED STATEMENTS OF OPERATIONS
For the Twelve months Ended December 31, 1998
(in thousands)
<TABLE>
<CAPTION>
1998
REVENUES 1998 Adjustments Proforma
--------- ----------- --------
<S> <C> <C> <C>
Rents $ 320,592 $ 48,972 (a) $ 271,620
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 48,972 275,554
--------- -------- ---------
EXPENSES
Property operating 223,667 17,133 (a) 206,534
Real estate taxes 12,453 4,888 (a) 7,565
Depreciation and amortization 33,389 10,025 (a) 23,364
Interest-mortgages 29,032 4,037 (b) 24,995
Senior notes 5,856 3,256 (b) 2,600
Bank loans 12,214 7,753 (b) 4,461
Notes payable 3,757 2,511 (b) 1,246
General and administrative 37,577 150 (c) 37,427
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 49,753 366,238
--------- -------- ---------
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS $ (91,465) $ 781 $ (90,684)
--------- -------- ---------
Preferred Dividend (2,999) (2,999)
--------- ---------
Net loss before extraordinary loss and capital gains $ (94,464) $ (93,683)
========= =========
Per share data
NET LOSS BEFORE EXTRAORDINARY LOSS AND CAPITAL GAINS,
BASIC AND DILUTED $ (3.07) $ (3.04)
========= =========
Adjusted shares of beneficial interest, basic 30,772 30,772
Adjusted shares of beneficial interest, diluted 31,015 31,015
</TABLE>
(a) To reflect the registrant's sales of 2 office buildings and a shopping mall
and contracts to sell one additional office building, nine shopping malls,
and eight apartment complexes.
(b) To reflect the use of proceeds from the sale of the properties, net of
mortgage debt on the properties. For purposes of the proforma combined
statements of operations, $60.3 million of Senior Notes are assumed to be
repaid as the Notes payable were used to repay $88.5 million of Senior
Notes in August 1988.
(c) To reflect the reduction of general and administrative expenses resulting
from the sale of the registrant's apartment division.
