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Previous: US BANCORP \DE\, SC 13G/A, 2000-02-16 |
Next: FMC CORP, SC 13D/A, 2000-02-16 |
<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 EXCHANGE ACT OF 1934
---------------------------------
Date of Report February 16, 2000
-----------------
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
of Incorporation) 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: 3.
<PAGE> 2
ITEM 5. OTHER EVENTS
The registrant has announced its intention to spin-off Imperial Parking
Corporation (Impark) to its shareholders. Impark is owned by First Union
Management, Inc. (FUMI) whose shares are held in trust for the benefit of the
shareholders of the registrant. The spin-off is expected to occur in the first
half of 2000.
As part of this transaction, the registrant will repay Impark's bank
credit facility of approximately $22 million, contribute approximately $7
million in cash to Impark, contribute the 14 parking properties that it owns in
Canada to Impark and fund up to $6 million for a parking development to be owned
by Impark. Additionally, the registrant will provide a secured $8 million line
of credit to Impark. Prior to the spin-off, Ventek International, Inc. (Ventek),
a subsidiary of Impark, will be sold to FUMI.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements of Businesses Acquired
-------------------------------------------
Not applicable.
b) Pro Forma Financial Information
-------------------------------
Pro Forma Combined Balance Sheet as of September 30, 1999.
Pro Forma Combined Statement of Operations for the Nine Months
Ended September 30, 1999.
Pro Forma Combined Statement of Operations for the Twelve Months
Ended December 31, 1998.
The Pro Forma Combined Balance Sheet of the registrant as
of September 30, 1999, has five adjustment columns; a $29.6
million second mortgage loan obtained in October 1999 on the St.
Cloud shopping mall, the sale of six southwestern malls which
occurred in December 1999, the spin-off of Impark (including the
14 parking properties contributed by the registrant), the purchase
of Ventek by First Union Management, Inc., the repayment of
Impark's bank debt and $7 million cash contributed to Impark by
the registrant at the time of spin-off and the $6 million parking
development facility. The Pro Forma Combined Statements of
Operations for the twelve months ended December 31, 1998 and for
the nine months ended September 30, 1999 has six adjustment
columns; the sale of properties prior to September 30, 1999, a
$29.6 million second mortgage loan obtained in October 1999 on the
St. Cloud shopping mall, the sale of six southwestern malls which
occurred in December 1999, the spin-off of Impark (including the
14 parking properties contributed by the registrant), the purchase
of Ventek by First Union Management, Inc., the repayment of
Impark's bank debt and $7 million cash contributed to Impark by
the registrant at the time of spin-off and the $6 million parking
development facility. The Pro Forma Combined Statements of
Operations assume that the transactions occurred on the first day
of the respective periods; while the Pro Forma Combined Balance
Sheet as of September 30, 1999 assumes that the transactions
occurred on the last day of the period. The Pro Forma Combined
Statements of Operations for the twelve months ended December 31,
1998 and for the nine months ended September 30, 1999 are not
necessarily indicative of the actual results that would have
occurred had the transaction been consummated on the first day of
the respective periods or of future operations of the registrant.
The Pro Forma Financial Statements do not take into consideration
the increase in the registrant's liquidity or possible uses of the
funds.
<PAGE> 3
c) Exhibits
---------
99.1) Pro Forma Combined Balance Sheet as of September 30,
1999.
99.2) Pro Forma Combined Statement of Operations for the
Nine Months Ended September 30, 1999.
99.3) Pro Forma Combined Statement of Operations for the
Twelve Months Ended December 31, 1998.
99.4) Notes to Pro Forma Financial Statements.
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: February 16, 2000 By:/S/ Gregory C. Scott
-----------------
Gregory C. Scott
Controller
<PAGE> 1
EXHIBIT 99.1
<TABLE>
<CAPTION>
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
Pro Forma Combined Balance Sheets as of September 30, 1999
(in thousands)
St. Cloud Sold Southwestern
September 30, 1999 Refinancing Retail Properties
------------------- ------------------ ------------------
<S> <C> <C> <C>
ASSETS
Investments in real estate
Land $ 97,854 (38,070)
Buildings and improvements 428,059 (156,471)
--------------- ------------------ ----------------
525,913 -- (194,541)
Less - Accumulated depreciation (82,056) 9,336
--------------- ------------------ ----------------
Total investments in real estate 443,857 -- (185,205)
Investment in joint venture 1,704
Mortgage loans and notes receivable 8,426
Other assets
Cash and cash equivalents - unrestricted 49,120 28,611 32,706
- restricted 29,254 (11,091)
Accounts receivable and prepayments 10,942
Inventory 3,438
Goodwill, net 43,982
Management and lease agreements, net 735
Deferred charges and other, net 3,227 (341)
Unamortized debt issue costs 5,253 974 (2,568)
Other 5,064
----------------- ------------------ ----------------
Total assets $ 605,002 29,585 (166,499)
================= ================== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loans $ 326,825 29,585 (160,992)
Notes payable 125
Senior notes 12,538
Bank loans 21,394
Accounts payable and accrued liabilities 33,725
Deferred obligations 10,585
Deferred income 1,967
----------------- ------------------ ----------------
Total liabilities 407,159 29,585 (160,992)
----------------- ------------------ ----------------
Minority interest 436 -
Shareholders' equity
Preferred shares of beneficial interest,
$25 liquidation preference,
2,300,000 shares authorized
and 1,349,000 outstanding 31,737
Shares of beneficial interest, $1 par,
unlimited authorization, outstanding 42,477
Paid-in capital 125,148 (5,507)
Foreign currency translation adjustment (1,955)
----------------- ------------------ ----------------
Total shareholders' equity 197,407 (5,507)
----------------- ------------------ ----------------
$ 605,002 29,585 (166,499)
================= ================== ================
<CAPTION>
Repayment
of Impark
Bank Debt and
Impark and Canadian Cash Contributed
Real Estate by Registrant September 30, 1999
Subsidiaries Ventek to Impark Pro Forma
----------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in real estate
Land (7,012) $ 52,772
Buildings and improvements (1,695) 269,893
--------------- ----------------- ----------------- -----------------
(8,707) -- -- 322,665
Less - Accumulated depreciation 103 (72,617)
--------------- ----------------- ----------------- -----------------
Total investments in real estate (8,604) -- -- 250,048
Investment in joint venture 1,704
Mortgage loans and notes receivable (2,962) 5,464
Other assets
Cash and cash equivalents - unrestricted (2,633) 38 (20,000) 87,842
- restricted (15,000) 3,163
Accounts receivable and prepayments (6,636) 1,172 5,478
Inventory (3,438) 2,498 2,498
Goodwill, net (43,982) --
Management and lease agreements, net (735) --
Deferred charges and other, net 2,886
Unamortized debt issue costs (34) 3,625
Other (5,064) 243 243
---------------- ----------------- ----------------- -----------------
Total assets (74,088) 3,951 (35,000) $ 362,951
================ ================= ================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loans $ 195,418
Notes payable 125
Senior notes 12,538
Bank loans (21,394) --
Accounts payable and accrued liabilities (18,923) 675 15,477
Deferred obligations 10,585
Deferred income (958) 1,009
---------------- ----------------- ----------------- -----------------
Total liabilities (41,275) 675 0 235,152
---------------- ----------------- ----------------- -----------------
Minority interest (436) -- --
Shareholders' equity
Preferred shares of beneficial interest,
$25 liquidation preference,
2,300,000 shares authorized
and 1,349,000 outstanding 31,737
Shares of beneficial interest, $1 par,
unlimited authorization, outstanding 42,477
Paid-in capital (34,332) 3,276 (35,000) 53,585
Foreign currency translation adjustment 1,955 -
---------------- ----------------- ----------------- -----------------
Total shareholders' equity (32,377) 3,276 (35,000) 127,799
---------------- ----------------- ----------------- -----------------
(74,088) 3,951 (35,000) $ 362,951
================ ================= ================= =================
</TABLE>
<PAGE> 1
EXHIBIT 99.2
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
PRO FORMA COMBINED STATEMENTS OF INCOME
For the nine months Ended September 30, 1999
Unaudited
<TABLE>
<CAPTION>
Properties sold
First Union prior to
(Historical) September 30, 1999
---------------------------- ------------------------------
<S> <C> <C>
REVENUES
Rents $ 225,109 (18,009)
Interest - Mortgage loans 355
- Short-term investments 1,368 (48)
- Investments
Joint venture income and fees 228
Other 730
---------------------------- ------------------------------
227,790 (18,057)
---------------------------- ------------------------------
EXPENSES
Property operating 161,955 (7,158)
Real estate taxes 7,978 (1,772)
Depreciation and amortization 22,831 (6,413)
Interest-mortgages 20,959 (1,272)
- Notes payable 4,201 (4,193)
- Senior notes 835
- Bank loans and other 5,793 (3,253)
General and administrative 12,856 (159)
Realized currency gain (863)
Unrealized loss on carrying value
of assets held for disposition 9,000
---------------------------- ------------------------------
245,545 (24,220)
INCOME/ (LOSS) BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND $ (17,755) 6,163
============================ ==============================
Per share data
LOSS BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND, BASIC AND DILUTED $ (0.50)
============================
Adjusted shares of beneficial interest,basic 35,520
Adjusted shares of beneficial interest, diluted 35,524
St. Cloud Sold Southwestern
Refinancing Retail Properties
------------------------------- ----------------------------------
<S> <C> <C>
REVENUES
Rents (26,603)
Interest - Mortgage loans
- Short-term investments
- Investments
Joint venture income and fees
Other
------------------------------- ----------------------------------
- (26,603)
------------------------------- ----------------------------------
EXPENSES
Property operating (10,169)
Real estate taxes (1,488)
Depreciation and amortization (3,540)
Interest-mortgages (7,881)
- Notes payable 3,326
- Senior notes
- Bank loans and other
General and administrative (178)
Realized currency gain
Unrealized loss on carrying value
of assets held for disposition
------------------------------- ----------------------------------
3,326 (23,256)
INCOME/ (LOSS) BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND (3,326) (3,347)
=============================== ==================================
Per share data
LOSS BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND, BASIC AND DILUTED
Adjusted shares of beneficial interest,basic
Adjusted shares of beneficial interest, diluted
Repayment
of Impark
Bank Debt and
Impark and Canadian Cash Contributed
Real Estate by Registrant
Subsidiaries Ventek to Impark
------------------- --------------------------- -----------------------------
<S> <C> <C> <C>
REVENUES
Rents (139,473) 3,152
Interest - Mortgage loans (8)
- Short-term investments (5) (1,315)
- Investments
Joint venture income and fees
Other (8)
------------------- --------------------------- -----------------------------
(139,494) 3,152 (1,315)
------------------- --------------------------- -----------------------------
EXPENSES
Property operating (133,057) 3,727
Real estate taxes
Depreciation and amortization (3,480) 50
Interest-mortgages
- Notes payable
- Senior notes
- Bank loans and other (1,356) 6
General and administrative (3,945)
Realized currency gain 863
Unrealized loss on carrying value
of assets held for disposition
------------------- --------------------------- -----------------------------
(140,975) 3,783 -
------------------- --------------------------- -----------------------------
INCOME/ (LOSS) BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND 1,481 (631) (1,315)
=================== =========================== =============================
Per share data
LOSS BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND, BASIC AND DILUTED
Adjusted shares of beneficial interest,basic
Adjusted shares of beneficial interest, dilute
Pro Forma
--------------------
<S> <C>
REVENUES
Rents $ 44,176
Interest - Mortgage loans 347
- Short-term investments -
- Investments -
Joint venture income and fees 228
Other 722
--------------------
45,473
--------------------
EXPENSES
Property operating 15,298
Real estate taxes 4,718
Depreciation and amortization 9,448
Interest-mortgages 11,806
- Notes payable 3,334
- Senior notes 835
- Bank loans and other 1,190
General and administrative 8,574
Realized currency gain -
Unrealized loss on carrying value -
of assets held for disposition 9,000
--------------------
64,203
--------------------
INCOME/ (LOSS) BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND $ (18,730)
====================
Per share data
LOSS BEFORE CAPITAL GAINS AND
PREFERRED DIVIDEND, BASIC AND DILUTED $ (0.53)
====================
Adjusted shares of beneficial interest,basic 35,520
Adjusted shares of beneficial interest, diluted 35,524
</TABLE>
<PAGE> 1
EXHIBIT 99.3
<TABLE>
<CAPTION>
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
Pro Forma Combined Statements of Income
For the twelve months Ended December 31, 1998
Unaudited
Properties sold
First Union prior to St. Cloud Sold Southwestern
(Historical) September 30, 1999 Refinancing Retail Properties
----------- ----------------- ------------ -----------------
<S> <C> <C> <C> <C>
REVENUES
Rents $ 320,592 (47,931) (37,095)
Interest - Mortgage loans 1,211
- Short-term investments 1,337
- Investments 302
Joint venture income and fees 501
Other 583
--------- --------- ------ -------
324,526 (47,931) -- (37,095)
--------- --------- ------ -------
EXPENSES
Property operating 223,667 (16,521) (14,395)
Real estate taxes 12,453 (4,834) (1,965)
Depreciation and amortization 33,389 (11,760) (4,737)
Interest-mortgages 29,032 (4,037) 4,435 (13,731)
- Notes payable 3,757 (3,757)
- Senior notes 5,856 (4,765)
- Bank loans and other 12,214 (7,938)
General and administrative 37,577 (150) (411)
Realized currency loss 2,198
Litigation and Proxy expenses 4,848
Unrealized loss on carrying value
of assets held for disposition 51,000 9,000
--------- --------- ------ -------
415,991 (53,762) 4,435 (26,239)
--------- --------- ------ -------
INCOME/(LOSS) BEFORE CAPITAL GAIN, EXTRAORDINARY LOSS
AND PREFERRED DIVIDEND $ (91,465) 5,831 (4,435) (10,856)
========= ========= ====== =======
Per share data
LOSS BEFORE CAPITAL GAIN, EXTRAORDINARY LOSS
AND PREFERRED DIVIDEND, BASIC AND DILUTED $ (2.97)
=========
Adjusted shares of beneficial interest,basic 30,772
Adjusted shares of beneficial interest, diluted 31,015
<CAPTION>
Repayment
of Impark
Bank Debt and
Impark and Canadian Cash Contributed
Real Estate by Registrant
Subsidiaries Ventek to Impark Pro Forma
------------ ------ --------- ---------
<S> <C> <C> <C> <C>
REVENUES
Rents (181,634) 5,170 $ 59,102
Interest - Mortgage loans 1,211
- Short-term investments (1,337) --
- Investments 302
Joint venture income and fees 501
Other 583
-------- ------ ------- ---------
(181,634) 5,170 (1,337) 61,699
-------- ------ ------- ---------
EXPENSES
Property operating (175,702) 7,008 24,057
Real estate taxes 5,654
Depreciation and amortization (5,832) 46 11,106
Interest-mortgages 15,699
- Notes payable --
- Senior notes 1,091
- Bank loans and other (2,684) 23 1,615
General and administrative (9,497) 27,519
Realized currency loss (2,198) --
Litigation and Proxy expenses 4,848
Unrealized loss on carrying value --
of assets held for disposition 60,000
-------- ------ ------- ---------
(195,913) 7,077 -- 151,589
-------- ------ ------- ---------
INCOME/(LOSS) BEFORE CAPITAL GAIN, EXTRAORDINARY LOSS
AND PREFERRED DIVIDEND 14,279 (1,907) (1,337) $ (89,890)
======== ====== ======= =========
Per share data
LOSS BEFORE CAPITAL GAIN, EXTRAORDINARY LOSS
AND PREFERRED DIVIDEND, BASIC AND DILUTED $ (2.92)
=========
Adjusted shares of beneficial interest,basic 30,772
Adjusted shares of beneficial interest, diluted 31,015
</TABLE>
<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 99.4
Notes to Pro Forma Combined Financial Statements
1) Proceeds from Property Sales
(In thousands) USE OF PROCEEDS
---------------------------------
NET PROCEEDS MORTGAGE NET PROCEEDS BANK
AFTER COSTS DEBT ASSUMED AFTER DEBT NOTE CREDIT
PROPERTY DATE SOLD AND PRORATIONS OR REPAID ASSUMPTION PAYABLE FACILITY CASH
-------- --------- -------------- --------- ---------- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Offices
Beck (a) March 23, 1999 $ 1,772 $ 1,772 $ 1,772
Sutter Buttes(a) April 1, 1999 3,627 3,627 3,627
Apartments (a),(b) May 12, 1999 83,523 $37,520 46,688 15,703 $30,985
Parking Facility
Magic Mile (a) May 17, 1999 1,894 1,894 1,894
Retail
Woodland Commons (a) February 17, 1999 20,789 11,469 9,320 9,320
Northwest properties May 5, 1999 36,075 36,075 2,675 33,400
(a),(c)
Fingerlakes Mall (a) June 1, 1999 2,168 2,168 2,168
Ft. Dodge and Kandi June 10, 1999 21,722 21,722 122 21,600
Malls(a),(d)
Mountaineer Mall (a) July 1, 1999 9,928 3,619 6,309 6,309
Fairgrounds Mall (a) July 28, 1999 24,019 24,019 5,872 $18,147
Southwestern Shopping December 15, 1999 182,606 160,990 21,615 21,615
Malls(e)
</TABLE>
(a)Properties were sold during the first seven months of 1999 and the
transactions have been recorded in the September 30, 1999 Combined
Balance Sheet. For purposes of the Pro Forma Combined Statement of
Operations, the transactions are assumed to have occurred on the
first day of each period.
(b)The apartment portfolio, which was sold to one purchaser, consisted
of the following properties: Somerset Lakes in Indianapolis, IN,
Steeplechase and Hunter's Creek, both in Cincinnati, OH, Beechlake in
Durham, NC, Walden Village in Atlanta, GA, Briarwood in Fayetteville,
NC and Windgate Place and Woodfield Gardens, both in Charlotte, NC.
(c)The Northwest Malls, which were sold to one purchaser, consisted of
the following properties: Valley Mall in Yakima, WA, Valley North
Mall in Wenatchee, WA and Mall 205 and Plaza 205, both in Portland,
OR.
(d) Both malls were sold to one purchaser.
(e)The six Southwestern Shopping Malls consist of the following
properties: Alexandria Mall in Alexandria, LA, Brazos Mall in Lake
Jackson, TX, Killeen Mall in Killeen, TX, Mesilla Valley Mall in Las
Cruces, NM, Shawnee Mall in Shawnee, OK and Villa Linda Mall in Santa
Fe, NM. Net proceeds reflect a $5.5 million prepayment penalty for
the Park Plaza Mall in Little Rock, AR, which was not be sold in this
transaction but is cross collateralized with the aforementioned
malls. The Pro Forma Financial Statements also assume that the debt
associated with Park Plaza of approximately $36.8 million was repaid
with net proceeds from the sale of the Southwestern Shopping Malls at
1.25 times the balance outstanding (approximately $46 million). The
amount of the repayment of the Park Plaza debt in excess of the
balance outstanding at September 30, 1999 (approximately $9.2
million) was used to reduce the mortgage balances assumed on the six
Southwestern Shopping Malls. Consequently, the debt assumed by the
purchaser is approximately $161 million. Additionally, approximately
$11.1 million of cash as of September 30, 1999, which is additional
collateral for the mortgages securing these malls, was reclassified
from restricted to unrestricted cash upon the sale.
2) The registrant, in October 1999, obtained a $29.6 million non-recourse
second mortgage on its shopping mall in St. Cloud, MN. The second
mortgage loan bears interest at 15% and matures in 2004 with an
extension permitted by the registrant to 2009. As part of the terms of
the second mortgage loan, the registrant has provided the lender an
option to purchase the property on or before May 2002 for $2.5 million
above the balance of the first and second mortgage loans on the
property.
3) The registrant intends to repay Impark's outstanding bank balance of
approximately $22 million in exchange for common shares of Impark.
Additionally, the registrant intends to contribute $7 million in cash
to Impark and a $6 million investment in a parking facility in exchange
for additional equity in Impark. The $15 million deposit made by the
registrant to secure Impark's credit facility is returned after the
bank facility is repaid.
<PAGE> 2
<TABLE>
<CAPTION>
Mortgage Debt at September 30, 1999
------------------------------------
Property (In thousands) Six Malls Sold Park Plaza Repaid Total Repaid
-------------- ----------------- ------------
<S> <C> <C> <C>
Alexandria $21,075
Brazos 15,465
Killeen 27,807
Mesilla Valley 24,197
Shawnee 11,367
Park Plaza $36,833
Villa Linda 24,248
Required repayment of Park Plaza
Mortgage at 1.25 times
outstanding balance at payoff (9,208) 9,208
-------- ------- --------
$114,951 $46,041 $160,992
======== ======= ========
</TABLE>
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