-----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, aGyAT/+TPzOk0MwNolUEuogFUfr3ucjp5DjiHo+Eu7CyDHx5SfetUkjC1/M2kPlk Lg5j9DgeY8I5y+JMsr6LEQ== 0000950152-94-000535.txt : 19940520 0000950152-94-000535.hdr.sgml : 19940520 ACCESSION NUMBER: 0000950152-94-000535 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNION REAL ESTATE EQUITY & MORTGAGE INVESTMENTS CENTRAL INDEX KEY: 0000037008 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 346513657 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06249 FILM NUMBER: 94528522 BUSINESS ADDRESS: STREET 1: 55 PUBLIC SQUARE STREET 2: SUITE 1910 CITY: CLEVELAND STATE: OH ZIP: 44113 BUSINESS PHONE: 2167814030 MAIL ADDRESS: STREET 1: 55 PUBLIC SQUARE, SUITE 1910 CITY: CLEVELAND STATE: OH ZIP: 44113 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION REALTY DATE OF NAME CHANGE: 19691012 10-Q 1 FIRST UNION 10-Q 1 ________________________________________________________________________________ ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ________________ For Quarter Ended March 31, 1994 Commission File Number 1-6249 -------------- ------ First Union Real Estate Equity and Mortgage Investments - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 34-6513657 - - -------------------------------- ------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) 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, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ____ ____ | | | | Yes | X | No | | |____| |____| Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. 18,108,725 Shares of Beneficial Interest outstanding as of March 31, 1994 - - ------------------------------------------------------------------------------ ________________________________________________________________________________ ________________________________________________________________________________ Total number of pages contained in this report: 8 ----- 2 PART I - FINANCIAL INFORMATION - - ------------------------------ Item 1. Financial Statements. - - ------- --------------------- The combined financial statements included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the registrant believes that the disclosures contained herein are adequate to make the information presented not misleading. It is suggested that these combined financial statements be read in conjunction with the combined financial statements and the notes thereto included in the registrant's latest annual report on Form 10-K. The unaudited "Combined Balance Sheets" as of March 31, 1994 and December 31, 1993, and "Selected Financial Data, Combined Statements of Income and Combined Statements of Changes in Cash" for the periods ended March 31, 1994 and 1993, of the registrant, and "Notes to Combined Financial Statements," presented in the registrant's First Quarter Report, March 31, 1994, are incorporated herein by reference. These financial statements reflect, in the opinion of the registrant, all adjustments (consisting of normal recurring accruals) necessary to present fairly the combined financial position and results of operations for the respective periods in conformity with generally accepted accounting principles consistently applied. Item 2. Management's Discussion and Analysis of Financial Condition and - - ------- --------------------------------------------------------------- Results of Operations. ---------------------- Income from operations was $1.6 million, for the three months ended March 31, 1994 and $2.9 million for the three months ended March 31, 1993. Income from property operations, which is rents less operating expenses and real estate taxes, declined by $238,000 when comparing the first quarter of 1994 to the same period of 1993. This decrease was primarily attributed to increased maintenance expenses, weather related expenses from extreme winter conditions in 1994 and to the one time recognition, in 1993, of a real estate tax refund from an office building in Pittsburgh, PA. Short term investment interest increased when comparing the first quarter of 1994 to the same period of 1993 because of investments in short term securities averaging $35 million during the first quarter of 1994. During the first quarter of 1993, an average of approximately $3 million was invested in short term securities. Short term investments increased in 1994 due to First Union borrowing, then subsequently investing in short term securities, approximately $38 million under one of its lines of credit on December 31, 1993. This line of credit converted to a five year term loan based on the $60 million balance outstanding as of December 31, 1993. Mortgage interest expense increased when comparing the first quarter of 1994 to the same period of 1993. The increase was caused by the $35 million mortgage loan obtained in September 1993. The mortgage is secured by a shopping mall in St. Cloud, MN. Senior notes interest expense increased when comparing the three months ended March 31, 1994 and March 31, 1993. The increase was due to the issuance of $100 million of senior notes at a coupon rate of 8.875% on October 1, 1993. The proceeds were used primarily to repay $45 million of 8.375% senior notes and $37.6 million of 10.25% convertible debentures on November 1, 1993. General and administrative expenses increased during the first quarter of 1994 as compared to the first quarter of 1993 primarily because of the expensing of previously deferred costs related to possible acquisitions and increased professional fees resulting from the registrant's management and portfolio reorganization efforts. Net income was $1.6 million for the first quarter of 1994 and $4.4 million for the first quarter of 1993. Included in net income was a capital gain of $1.5 million in the first quarter of 1993 from a prior year installment sale. The final portion of this gain was recognized during 1993. 2 3 Except as noted above, there has been no material change in the registrant's financial condition from December 31, 1993. PART II - OTHER INFORMATION - - --------------------------- Item 1. Legal Proceedings. - - ------- ------------------ None. Item 2. Changes in Securities. - - ------- ---------------------- None. Item 3. Defaults Upon Senior Securities. - - ------- -------------------------------- None. Item 4. Submission of Matters to a Vote of Security Holders. - - ------- ---------------------------------------------------- The following matters were considered at the Annual Meeting of Shareholders held on April 12, 1994: 1. Election of Trustees --------------------
Name Total Votes For Against Abstentions ---- ----------- --- ------- ----------- Kenneth K. Chalmers 14,590,364 14,068,499 --- 521,865 William E. Conway 14,590,364 14,071,606 --- 518,759 Russell R. Gifford 14,590,364 14,044,923 --- 545,441
3 4 Continuing Term Trustees ------------------------
Name Expiration of Term ---- ------------------ Stephen R. Hardis 1995 E. Bradley Jones 1995 James C. Mastandrea 1995 Otes Bennett, Jr. 1996 Allen H. Ford 1996 Daniel G. DeVos 1996
2. 1994 Long Term Incentive Performance Plan -----------------------------------------
Total Votes For Against Abstentions ----------- --- ------- ----------- 10,824,116 7,514,600 2,883,032 426,484
Item 5. Other Information. - - ------- ------------------ None. Item 6. Exhibits and Reports on Form 8-K. - - ------- --------------------------------- (a) Exhibits: --------- Exhibit (11) - Statements Re: Computation of Per Share Earnings. Exhibit (20) - First Quarter Report, March 31, 1994. (b) Reports on Form 8-K: -------------------- None. 4 5 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 thereunto duly authorized. First Union Real Estate Equity and Mortgage Investments ---------------------------------- (Registrant) Date: May 13, 1994 By: /s/ Gregory D. Bruhn --------------------- ------------------------------ Gregory D. Bruhn, Executive Vice President and Chief Financial Officer Date: May 13, 1994 By: /s/ John J. Dee --------------------- ------------------------------ John J. Dee, Senior Vice President-Controller (Principal Accounting Officer) 5 6 Index to Exhibits ----------------- Page Number ------ Exhibit (11) - Statements Re: Computation of Per Share Earnings ........................................ 7 Exhibit (20) - First Quarter Report, March 31, 1994 ........... 8 6 EX-11 2 EXHIBIT 1 Exhibit 11 ---------- FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS AND ----------------------------------------------------------- FIRST UNION MANAGEMENT, INC. ---------------------------- STATEMENTS RE: COMPUTATION OF PER SHARE EARNINGS ------------------------------------------------ (IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended March 31, ------------------------------ 1994 1993 --------- --------- Shares Outstanding: For computation of primary net income per share - Weighted average 18,109 18,090 ======== ======= For computation of fully diluted net income per share - Weighted average, without regard to exer- cise of shares under share option plans 18,109 18,086 Weighted average of outstanding shares issued under share option plans --- 4 -------- ------- Adjusted shares outstanding 18,109 18,090 ======== ======= Net Income $ 1,612 $ 4,357 -------- ------- Per Share - Primary and fully diluted: Income from operations $ .09 $ .16 Capital gains .08 -------- ------- Net income $ .09 $ .24 ======== =======
7 EX-20 3 EXHIBIT 1 Exhibit 20 ---------- First Quarter Report, March 31, 1994 8 2 SELECTED FINANCIAL DATA -----------------------
THREE MONTHS Unaudited (In thousands, except per share data) ENDED MARCH 31, ------------------------- 1994 1993 ---------- ----------- OPERATING RESULTS Revenues $ 18,917 $ 18,216 Income from operations 1,612 2,847 Net income 1,612 4,357 Funds from operations (1) 4,453 5,555 Dividends declared 1,811 3,257 PER SHARE Income from operations $ .09 $ .16 Net income .09 .24 Funds from operations .25 .31 Dividends declared .10 .18 (1) The amount of funds from operations is calculated as income from operations plus noncash charges for depreciation and amortization.
3 COMBINED BALANCE SHEETS -----------------------
MARCH 31, DECEMBER 31, Unaudited (In thousands, except shares) 1994 1993 ----------- ----------- ASSETS INVESTMENTS IN REAL ESTATE Land $ 40,346 $ 40,284 Buildings and improvements 370,057 368,776 ----------- ----------- 410,403 409,060 Less--Accumulated depreciation (104,533) (101,824) ----------- ----------- Total investments in real estate 305,870 307,236 MORTGAGE LOANS RECEIVABLE 35,596 35,550 OTHER ASSETS Cash and cash equivalents 37,801 38,523 Accounts receivable 4,883 4,621 Deferred charges, net 2,416 2,506 Unamortized debt issue costs 5,091 5,185 ----------- ----------- $ 391,657 $ 393,621 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Mortgage loans $ 89,220 $ 92,355 Senior notes 105,000 105,000 Bank loans 60,000 60,000 Accounts payable and accrued liabilities 15,720 14,356 Deferred obligations 10,424 10,394 Deferred capital gains and other deferred income 7,749 7,750 Shareholders' equity, including shares of beneficial interest, $1 par, unlimited authorization, outstanding 1994--18,108,725; 1993--18,108,725 103,544 103,766 ----------- ----------- $ 391,657 $ 393,621 =========== ===========
4 COMBINED STATEMENTS OF INCOME -----------------------------
THREE MONTHS Unaudited (In thousands, except per share data) ENDED MARCH 31, ------------------------ 1994 1993 --------- --------- REVENUES Rents $ 17,651 $ 17,122 Interest--Mortgage loans 975 1,070 --Short term investments 291 24 --------- --------- 18,917 18,216 --------- --------- EXPENSES Property operating 6,591 6,055 Real estate taxes 2,021 1,790 Depreciation and amortization 2,841 2,708 Interest--Mortgage loans 1,788 1,376 --Senior notes 2,327 1,050 --Convertible debentures 965 --Bank loans and other 1,010 1,037 General and administrative 727 388 --------- --------- 17,305 15,369 --------- --------- INCOME FROM OPERATIONS 1,612 2,847 CAPITAL GAINS 1,510 --------- --------- NET INCOME $ 1,612 $ 4,357 ========= ========= PER SHARE Income from operations $ .09 $ .16 Capital gains .08 --------- --------- Net income $ .09 $ .24 ========= ========= Dividends declared $ .10 $ .18 ========= ========= ADJUSTED SHARES OF BENEFICIAL INTEREST 18,109 18,090 ========= ========= NOTES TO COMBINED FINANCIAL STATEMENTS -------------------------------------- 1. Income per share of beneficial interest has been computed based on weighted average shares and share equivalents outstanding for the applicable periods. The shares issuable upon conversion of the convertible subordinated debentures have not been included in the per share computation because they were not dilutive. 2. Capital gains recognized in 1993 were from an installment sale which occurred in 1983.
5 COMBINED STATEMENTS OF CHANGES IN CASH --------------------------------------
THREE MONTHS Unaudited (In thousands) ENDED MARCH 31, ------------------------ 1994 1993 --------- --------- CASH PROVIDED BY (USED FOR) OPERATIONS: Net income $ 1,612 $ 4,357 Adjustments to reconcile net income to net cash provided by operations -- Depreciation and amortization 2,841 2,708 Capital gains (1,510) Decrease (Increase) in deferred charges, net 51 (348) Increase in deferred interest on mortgage investments, net (81) (95) Increase in deferred obligations 30 26 Recognition of deferred income, net (1) (52) Net changes in other assets and liabilities 2,551 1,546 --------- --------- Net cash provided by operations 7,003 6,632 --------- --------- CASH PROVIDED BY (USED FOR) INVESTING: Principal received from mortgage investments 35 2,142 Investments in properties (1,343) (1,795) --------- --------- Net cash provided by (used for) investing (1,308) 347 --------- --------- CASH PROVIDED BY (USED FOR) FINANCING: Increase in short term loans 2,000 Repayment of mortgage loans - Normal payments (910) (872) - Balloon payments (2,225) Dividends paid (3,260) (3,255) Other (22) 62 --------- --------- Net cash used for financing (6,417) (2,065) --------- --------- (Decrease) Increase in cash and cash equivalents (722) 4,914 Cash and cash equivalents at beginning of period 38,523 992 --------- --------- Cash and cash equivalents at end of period $ 37,801 $ 5,906 ========= =========
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