-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EPwUf0tAyvAq5alfjcU4E/uhWtOJH6joPPPNY/x0BNDPdMXfHuBcODGLYERYqgNQ OQqj7Y9RUGDChMXMd5KSMA== 0000950134-96-000505.txt : 19960221 0000950134-96-000505.hdr.sgml : 19960221 ACCESSION NUMBER: 0000950134-96-000505 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951228 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960220 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL MORTGAGE & EQUITY TRUST CENTRAL INDEX KEY: 0000319416 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [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: 96523274 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 NO.1 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 28, 1995 ---------------------------------------------------- Date of Report (Date of Earliest Event Reported) CONTINENTAL MORTGAGE AND EQUITY TRUST -------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) California 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 28, 1995 and filed January 12, 1996 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, 1994 and the nine months ended September 30, 1995. A pro forma balance sheet as of September 30, 1995 is also presented. A summary of the pro forma transactions follows: In December 1995, the Trust purchased Brookfield Corporate Center, a 63,504 square foot industrial facility in Chantilly, Virginia for $3.5 million, exclusive of commissions and closing costs. The Trust paid $650,000 in cash and the seller provided mortgage financing in the amount of $2.8 million. The mortgage bears interest at a rate of 7.6% per annum, requires monthly payments of principal and interest of $21,000 and matures in December 1998. The $3.5 million purchase price of Brookfield Corporate Center is approximately 1.9% of the Trust's consolidated assets at December 31, 1994. Although not a significant acquisition in itself, when aggregated with the other acquisitions completed by the Trust in 1995 as described below, such acquisitions constitute a significant acquisition. In addition to the Brookfield Corporate Center acquisition discussed above, the Trust purchased four apartment complexes and two other commercial properties in 1995. The properties, located in Virginia, Texas, South Carolina and Florida, were purchased for a total of $35.4 million in separate transactions from unaffiliated sellers, and represent approximately 19.3% of the Trust's consolidated assets at December 31, 1994. The Trust paid a total of $7.1 million in cash and financed the remainder of the purchase prices. The mortgages bear interest at rates ranging from 6.0% to 9.9% and mature from 1997 to 2013. 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 Brookfield Corporate Center Audited Statement of Revenues and Direct Operating Expenses for the year ended December 31, 1994.
2 3 CONTINENTAL MORTGAGE AND EQUITY TRUST PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1995
Brookfield Other Corporate Property Actual Center (1) Acquisitions (1) Pro forma -------------- ----------- ---------------- ------------- (dollars in thousands) Assets ------ Notes and interest receivable Performing . . . . . . . . . . . $ 4,344 $ - $ - $ 4,344 Nonperforming, nonaccruing . . . 4,456 - - 4,456 -------------- ---------- ---------- ---------- 8,800 - - 8,800 Real estate held for sale, net of accumulated depreciation . . . . 25,333 - - 25,333 Less - allowance for estimated losses . . . . . . . . . . . . . (9,207) - - (9,207) -------------- ---------- ---------- ---------- 24,926 - - 24,926 Real estate held for investment, net of accumulated depreciation 150,024 3,450 9,465 162,939 Investments in marketable equity securities of affiliates, at market . . . . . . . . . . . . . 4,824 - - 4,824 Investments in partnerships . . . . 12,248 - - 12,248 Cash and cash equivalents . . . . . 6,954 (650) (2,034) 4,270 Other assets . . . . . . . . . . . 5,665 - - 5,665 -------------- ---------- ---------- ---------- $ 204,641 $ 2,800 $ 7,431 $ 214,872 ============== ========== ========== ==========
3 4 CONTINENTAL MORTGAGE AND EQUITY TRUST PRO FORMA CONSOLIDATED BALANCE SHEET - Continued SEPTEMBER 30, 1995
Brookfield Other Corporate Property Actual Center (1) Acquisitions (1) Pro forma -------------- ------------ ---------------- ---------- (dollars in thousands) Liabilities and Shareholders' Equity - ------------------------------------ Liabilities Notes and interest payable . . . . $ 121,920 $ 2,800 $ 7,431 $ 132,151 Other liabilities . . . . . . . . . 5,848 - - 5,848 -------------- ---------- ---------- ---------- 127,768 2,800 7,431 137,999 Commitments and contingencies Shareholders' equity Shares of Beneficial Interest, no par value; authorized shares, unlimited; issued and out- standing, 2,918,100 shares . . . 8,766 - - 8,766 Paid-in capital . . . . . . . . . . 260,060 - - 260,060 Accumulated distributions in excess of accumulated earnings . (195,053) - - (195,053) Net unrealizable gains on market- able equity securities . . . . . 3,100 - - 3,100 -------------- ---------- ---------- ---------- 76,873 - - 76,873 -------------- ---------- ---------- ---------- $ 204,641 $ 2,800 $ 7,431 $ 214,872 ============== ========== ========== ==========
- --------------------------------- (1) Assumes acquisition of Brookfield Corporate Center and other properties purchased by the Trust subsequent to September 30, 1995 to be on January 1, 1995. The effect of all other 1995 property purchases are included in the September 30, 1995 actual balances. 4 5 CONTINENTAL MORTGAGE AND EQUITY TRUST PRO FORMA STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1995
Brookfield Other Corporate Property Actual Center (1) Acquisitions (1) Pro forma ---------- ----------- ---------------- ----------- (dollars in thousands) Income Rentals . . . . . . . . . . . . . . . . . $ 27,318 $ 313 $ 2,847 $ 30,478 Interest . . . . . . . . . . . . . . . . 600 - - 600 Equity in income of partnerships . . . . 213 - - 213 ---------- ---------- ----------- ---------- 28,131 313 2,847 31,291 Expenses Property operations . . . . . . . . . . . 16,456 76 1,662 18,194 Interest . . . . . . . . . . . . . . . . 6,998 160 1,052 8,210 Depreciation . . . . . . . . . . . . . . 3,133 52 290 3,475 Advisory fee to affiliate . . . . . . . . 1,139 - - 1,139 General and administrative . . . . . . . 928 - - 928 Provision for losses . . . . . . . . . . 541 - - 541 ---------- ---------- ----------- ---------- 29,195 288 3,004 32,487 ---------- ---------- ----------- ---------- Net income (loss) . . . . . . . . . . . . . $ (1,064) $ 25 $ (157) $ (1,196) ========== ========== =========== ========== Earnings per share Net (loss) . . . . . . . . . . . . . . . $ (.36) $ (.41) ========== ========== Shares of beneficial interest outstanding . 2,918,114 2,918,114 ========== ==========
- ----------------------------- (1) Assumes acquisition by the Trust on January 1, 1995. 5 6 CONTINENTAL MORTGAGE AND EQUITY TRUST PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
Brookfield Other Corporate Property Actual Center (1) Acquisitions (1) Pro forma ---------- ----------- ---------------- ------------ (dollars in thousands) Income Rentals . . . . . . . . . . . . . . . . . $ 27,042 $ 418 $ 6,072 $ 33,532 Interest . . . . . . . . . . . . . . . . 2,699 - - 2,699 Other . . . . . . . . . . . . . . . . . . (479) - - (479) --------- ---------- ----------- ------------ 29,262 418 6,072 35,752 Expenses Property operations . . . . . . . . . . . 16,888 101 2,975 19,964 Interest . . . . . . . . . . . . . . . . 7,711 213 2,284 10,208 Depreciation . . . . . . . . . . . . . . 3,214 69 759 4,042 Advisory fee to affiliate . . . . . . . . 1,326 - - 1,326 General and administrative . . . . . . . 1,235 - - 1,235 Provision for losses . . . . . . . . . . 1,429 - - 1,429 --------- ---------- ----------- ------------ 31,803 383 6,018 38,204 --------- ---------- ----------- ------------ Income (loss) before gain on sale of real estate . . . . . . . . . . . . . . . . . (2,541) 35 54 (3,452) Gain on sale of real estate . . . . . . . . 1,708 - - 1,708 --------- ---------- ----------- ------------ Net income (loss) . . . . . . . . . . . . . $ (833) $ 35 $ 54 $ (744) ========= ========== =========== ============ Earnings per share (Loss) before gain on sale of real estate $ (.87) $ (.84) Gain on sale of real estate . . . . . . . .58 .58 --------- ------------ Net (loss) . . . . . . . . . . . . . . . $ (.29) $ (.26) ========= ============ Shares of beneficial interest outstanding . 2,919,815 2,919,815 ========= ============
- ---------------------------- (1) Assumes acquisition by the Trust on January 1, 1994. 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 20, 1996 By: /s/ Thomas A. Holland ------------------------- --------------------------------- Thomas A. Holland Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 7 8 CONTINENTAL MORTGAGE AND EQUITY TRUST EXHIBIT TO ITS CURRENT REPORT ON FORM 8-K/A Dated December 28, 1995
Exhibit Page Number Description Number - ------- ------------------------------------------- ------ 99.0 Brookfield Corporate Center Audited State- 9 ment of Revenues and Direct Operating Expenses for the year ended December 31, 1994.
8 EX-99 2 AUDITED STATEMENT OF REVENUES 1 BROOKFIELD CORPORATE CENTER STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1994 9 2 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 Brookfield Corporate Center for the year ended December 31, 1994. This statement of revenues and direct operating expenses is the responsibility of the Property'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 and 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 Brookfield Corporate Center for the year ended December 31, 1994, in conformity with generally accepted accounting principles. Farmer, Fuqua, Hunt & Munselle, P.C. Dallas, Texas February 8, 1996 10 3 BROOKFIELD CORPORATE CENTER STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES YEAR ENDED DECEMBER 31, 1994 REVENUES Rental revenues $ 332,793 Common area maintenance charges 84,971 ----------------- Total Revenues 417,764 ----------------- OPERATING EXPENSES Insurance 10,030 Postage and freight 1,220 Property taxes 28,158 Repairs and maintenance 31,442 Utilities 7,206 Other 2,032 ----------------- Total Operating Expenses 80,088 ----------------- REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 337,676 =================
The accompanying notes are an integral part of this statement. 11 4 BROOKFIELD CORPORATE CENTER NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES DECEMBER 31, 1994 NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION Brookfield Corporate Center consists of two warehouses with 32,020 and 31,484 square feet respectively, located in Fairfax County, Virginia. The warehouses can be utilized as office space, as well as storage space. During 1994, the property was owned by Reynolds Metals Development Company. The accompanying financial statement does not include a provision for depreciation and amortization, bad debt expense, interest expense or income taxes. Accordingly, this statement is not intended to be a complete presentation of the results of operations. NOTE 2: OTHER EXPENSE Other expense consists of the following: Property owner's fees $ 1,171 Miscellaneous 861 ------------ Total Other Expense $ 2,032 ============
NOTE 3: SUBSEQUENT EVENT The property was sold to Continental Mortgages and Equity Trust, a California business trust, on December 28, 1995. 12 -----END PRIVACY-ENHANCED MESSAGE-----