-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jWJvVeDVS5g4E18l8ow+KOrDgsGan9RcOxLNa1zBdc97cZlFU1i1NtsWSv8QID9i tbpitgFvbtrw4TmFn8MtrQ== 0000950134-95-000165.txt : 19950517 0000950134-95-000165.hdr.sgml : 19950517 ACCESSION NUMBER: 0000950134-95-000165 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941222 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL MORTGAGE & EQUITY TRUST CENTRAL INDEX KEY: 0000319416 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 942738844 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-10503 FILM NUMBER: 95508895 BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPWY STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2146924700 FORMER COMPANY: FORMER CONFORMED NAME: CONSOLIDATED CAPITAL SPECIAL TRUST DATE OF NAME CHANGE: 19901122 8-K/A 1 AMENDMENT TO FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 December 22, 1994 ------------------------------------------------ Date of Report (Date of Earliest Event Reported) CONTINENTAL MORTGAGE AND EQUITY TRUST ----------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Califoria 0-10503 94-2738844 - - -------------------------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File No.) Identification No.) 10670 North Central Expressway, Suite 300, Dallas, TX 75231 - - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (214) 692-4700 -------------- Not Applicable ------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) 1 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS This Form 8-K/A amends a Form 8-K Current Report dated December 22, 1994 and filed January 10, 1995 by Continental Mortgage and Equity Trust (the "Trust") and provides required financial statements that were not available at the date of the original filing. (a) Pro forma financial information: Pro forma statements of operations are presented for the year ended December 31, 1993 and the nine months ended September 30, 1994. A pro forma balance sheet as of September 30, 1994 is also presented. A summary of the pro forma transactions follows: In December 1994, the Trust purchased The Pines Apartments, a 242 unit apartment complex in Gainesville, Florida for $6.2 million, exclusive of commissions and closing costs. The Trust paid $750,000 in cash, assumed an existing first mortgage of $2.7 million, and the seller provided additional mortgage financing of $2.7 million. The first mortgage bears interest at a rate of 9.6% per annum, requires monthly payments of principal and interest of $27,000 and matures in July 2011. The second mortgage bears interest at a rate of 9.5% per annum, requires monthly payments of interest only through September 1995 and monthly payments of principal and interest of $23,000 thereafter, and matures in December 1997. The $6.2 million purchase price of The Pines Apartments is approximately 3.9% of the Trust's consolidated assets at December 31, 1993. Although not a significant acquisition in itself, when aggregated with the other acquisitions completed by the Trust prior to December 1994, as described below, such acquisitions constitute a significant acquisition. In addition to The Pines Apartments acquisition discussed above, the Trust purchased six other apartment complexes and one commercial property in 1994. The properties, located in California, Texas and Florida, were purchased for a total of $26.5 million in separate transactions from unaffiliated sellers, and represent approximately 16.5% of the Trust's consolidated assets at December 31, 1993. The Trust paid a total of $7.8 million in cash and financed the remainder of the purchase prices. The mortgages bear interest at rates ranging from 5.9% to 9.5% and mature from 1998 to 2004. The Trust has previously provided audited statements of operations for two of the acquisitions above, the Parkwood Knoll Apartments in San Bernardino, California which the Trust acquired in August 1994 and the McLeod Commerce Center in Orlando, Florida which the Trust acquired in September 1994. Such acquisitions approximated 6.0% of the Trust's consolidated assets at December 31, 1993. The remaining acquisitions, for which the Trust has not provided audited statements of operations, do not in the aggregate constitute a significant subsidiary. The Trust also recorded the insubstance foreclosure of two apartment complexes in 1994. The properties had a combined estimated fair value (minus estimated costs of sale) of $11.4 million on the date of foreclosure. 2 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued) In addition, the Trust has also sold four properties in 1994, all of which were held for sale. In connection with the sales, the Trust received cash totaling $2.0 million and provided an additional $365,000 in purchase money financing. The pro forma statements of operations present the Trust's operations as if the transactions described above had occurred at the beginning of each of the periods presented. (b) Financial statements of property acquired:
Exhibit Number Description - - ------- ----------- 99.0 The Pines Apartments Audited Statement of Operations for the year ended December 31, 1993.
3 4 CONTINENTAL MORTGAGE AND EQUITY TRUST PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1994
THE PINES ACTUAL APARTMENTS(1) PRO FORMA -------- ------------- --------- (DOLLARS IN THOUSANDS) Assets Notes and interest receivable Performing............................................... $ 19,956 $ -- $ 19,956 Nonperforming, nonaccruing............................... 3,791 -- 3,791 -------- ------- --------- 23,747 -- 23,747 Real estate held for sale, net of accumulated depreciation............................................. 24,773 -- 24,773 Less -- allowance for estimated losses..................... (8,088) -- (8,088) -------- ------- --------- 40,432 -- 40,432 Real estate held for investment, net of accumulated depreciation............................................. 119,902 6,742 126,644 Investments in marketable equity securities of affiliates, at market................................................ 4,001 -- 4,001 Investments in partnerships................................ 12,632 -- 12,632 Cash and cash equivalents.................................. 1,726 (1,342) 384 Other assets............................................... 5,511 -- 5,511 -------- ------- --------- $184,204 $ 5,400 $ 189,604 ======== ======= ========= Liabilities and Shareholders' Equity Liabilities Notes and interest payable................................. $100,298 $ 5,400 $ 105,698 Other liabilities.......................................... 4,741 -- 4,741 -------- ------- --------- 105,039 5,400 110,439 Commitments and contingencies Shareholders' equity Shares of Beneficial Interest, no par value; authorized shares, unlimited; issued and outstanding, 2,918,152 shares................................................... 8,766 -- 8,766 Paid-in capital............................................ 260,060 -- 260,060 Accumulated distributions in excess of accumulated earnings................................................. (191,938) -- (191,938) Net unrealizable gains on marketable equity securities..... 2,277 -- 2,277 -------- ------- --------- 79,165 -- 79,165 -------- ------- --------- $184,204 $ 5,400 $ 189,604 ======== ======= =========
- - --------------- (1) Assumes acquisition of The Pines Apartments by the Trust on January 1, 1994. The effects of all other 1994 property purchases, foreclosures and sales are included in the September 30, 1994 actual balances. 4 5 CONTINENTAL MORTGAGE AND EQUITY TRUST PRO FORMA STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1994
THE PINES OTHER PROPERTY INSUBSTANCE PROPERTY ACTUAL APARTMENTS(1) ACQUISITIONS(1) FORECLOSURES(2) SALES(3) PRO FORMA --------- ------------- --------------- --------------- -------- --------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE) Income Rentals.......................... $ 19,265 $ 995 $ 2,160 $ 2,229 $ (244) $ 24,405 Interest......................... 2,173 -- -- (453) 13 1,733 Equity in (loss) of partnerships.................. (406) -- -- -- -- (406) --------- ----- ------- ------- ------- --------- 21,032 995 2,160 1,776 (231) 25,732 Expenses Property operations.............. 12,211 502 1,197 1,304 (242) 14,972 Interest......................... 5,534 387 622 73 -- 6,616 Depreciation..................... 2,298 101 194 162 (20) 2,735 Advisory fee to affiliate........ 976 -- -- -- -- 976 General and administrative....... 921 -- -- -- -- 921 Provision for losses............. 200 -- -- -- -- 200 --------- ----- ------- ------- ------- --------- 22,140 990 2,013 1,539 (262) 26,420 Income (loss) before gain on sale of real estate................... (1,108) 5 147 237 31 (688) Gain on sale of real estate........ 577 -- -- -- -- 577 --------- ----- ------- ------- ------ --------- Net income (loss).................. $ (531) $ 5 $ 147 $ 237 $ 31 $ (111) ========= ===== ======= ======= ====== ========= Earnings per share (Loss) before gain on sale of real estate................... $ (.38) $ (.24) Gain on sale of real estate...... .20 $ (.20) --------- --------- Net (loss)......................... $ (.18) $ (.04) ========= ========= Shares of beneficial interest outstanding...................... 2,920,376 2,920,376 ========= =========
- - --------------- (1) Assumes acquisition by the Trust on January 1, 1994. (2) Assumes property obtained on January 1, 1994. (3) Assumes sale by the Trust on January 1, 1994. 5 6 CONTINENTAL MORTGAGE AND EQUITY TRUST PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
THE PINES OTHER PROPERTY INSUBSTANCE PROPERTY ACTUAL APARTMENTS(1) ACQUISITIONS(1) FORECLOSURES(2) SALES(3) PRO FORMA --------- ------------- --------------- --------------- -------- --------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE) Income Rentals.......................... $ 20,996 $1,327 $ 5,545 $ 2,972 $ (657) $ 30,183 Interest......................... 3,292 -- -- (821) 27 2,498 Other............................ (578) -- -- -- -- (578) --------- ------ ------- ------- ------- --------- 23,710 1,327 5,545 2,151 (630) 32,103 Expenses Property operations.............. 12,791 669 3,021 1,739 (672) 17,548 Interest......................... 5,531 516 1,373 100 -- 7,520 Depreciation..................... 2,431 135 489 216 (62) 3,209 Advisory fee to affiliate........ 1,160 -- -- -- -- 1,160 General and administrative....... 1,326 -- -- -- -- 1,326 Provision for losses............. 221 -- -- -- -- 221 --------- ------ ------- ------- ------- --------- 23,460 1,320 4,883 2,055 (734) 30,984 Income (loss) before gain on sale of real estate................... 250 7 662 96 104 1,119 Gain on sale of real estate........ 365 -- -- -- -- 365 --------- ------ ------- ------- ------- --------- Net income (loss).................. $ 615 $ 7 $ 662 $ 96 $ 104 $ 1,484 ========= ====== ======= ======= ====== ========= Earnings per share Income before gain on sale of real estate................... $ .08 $ .37 Gain on sale of real estate...... .12 .12 --------- --------- Net (loss)......................... $ .20 $ .49 ========= ========= Shares of beneficial interest outstanding...................... 3,014,256 3,014,256 ========= =========
- - --------------- (1) Assumes acquisition by the Trust on January 1, 1993. (2) Assumes property obtained on January 1, 1993. (3) Assumes sales by the Trust on January 1, 1993. 6 7 SIGNATURE 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 hereto duly authorized. CONTINENTAL MORTGAGE AND EQUITY TRUST Date: February 10, 1995 By: /s/ Thomas A. Holland ----------------- ------------------------- Thomas A. Holland Senior Vice President and Chief Accounting Officer 7 8 CONTINENTAL MORTGAGE AND EQUITY TRUST EXHIBIT TO ITS CURRENT REPORT ON FORM 8-K/A Dated December 22, 1994
Exhibit Page Number Description Number - - ------- ----------- ------ 99.0 The Pines Apartments Audited Statement of 9 Operations for the year ended December 31, 1993.
8 EX-99 2 THE PINES APARTMENTS STMNT OF REVENUE 1 EXHIBIT 99.0 THE PINES STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1993 9 2 [FARMER, FUQUA, HUNT & ROBERT, LLC LETTERHEAD] Independent Auditors' Report To the Board of Trustees Continental Mortgage and Equity Trust We have audited the accompanying statement of revenues and direct operating expenses of The Pines (a real estate project) for the year ended December 31, 1993. This statement of revenues and direct operating expenses is the responsibility of the Trust's management. Our responsibility is to express an opinion on this statement of revenues and direct operating expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and direct operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and direct operating expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of revenues and direct operating expenses presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying financial statement is prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Continental Mortgage & Equity Trust) and, as described in Note 1, is not intended to be a complete presentation of the results of operations. In our opinion, the statement of revenues and direct operating expenses referred to above presents fairly, in all material respects, the revenues and direct operating expenses of The Pines for the year ended December 31, 1993, in conformity with generally accepted accounting principles. FARMER, FUQUA, HUNT & ROBERT, LLC Dallas, Texas February 6, 1995 10 3 THE PINES STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1993 REVENUES: Rental revenues $1,278,965 Other 48,021 ---------- Total Revenue 1,326,986 ---------- OPERATING EXPENSES: Repairs & maintenance 58,028 Services 64,629 Administration 15,895 Marketing 25,416 Payroll & benefits 159,792 Utilities 113,973 Property taxes 128,910 Insurance 42,927 Management Fees 59,486 ---------- Total Operating Expenses 669,056 ---------- NET OPERATING INCOME $ 657,930 ==========
The accompanying notes are an integral part of this statement. 11 4 THE PINES NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES DECEMBER 31, 1993 NOTE 1: ORGANIZATION The Pines is a 242 unit apartment complex located in Gainesville, Florida. During 1993, the property was owned by Midland-Missouri Real Estate Holdings Trust, a Missouri corporation. The accompanying financial statement does not include provision for depreciation and amortization, interest expense or income taxes. Accordingly, this statement is not intended to be a complete presentation of the results of operations. NOTE 2: OTHER INCOME Other income consists of the following: Forfeited security deposits $ 2,560 Pet fees 3,670 Late fees 15,840 Application fee income 6,385 Vending income 12,942 Miscellaneous income 6,624 ------- Total Other Income $48,021 =======
NOTE 3: MANAGEMENT FEES The property has a management agreement with Dominion Management Corporation which calls for a fee equal to 4% of gross monthly receipts, as defined. NOTE 4: SUBSEQUENT EVENT On December 22, 1994, the property was sold to Continental Mortgage and Equity Trust, a California business trust. 12 -----END PRIVACY-ENHANCED MESSAGE-----