-----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, VTgtep55xSLrJxR1hNbUjiYZWvcvD9dOWnHb337yqmTijXKnb21DRBAiQGGXiw+j E871SzfrfF1tFwuvIKLyig== 0000950152-94-001142.txt : 19941117 0000950152-94-001142.hdr.sgml : 19941117 ACCESSION NUMBER: 0000950152-94-001142 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NYSE 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: 94559113 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 September 30, 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. 18,262,725 Shares of Beneficial Interest outstanding as of September 30, 1994 - - - ------------------------------------------------------------------------------- =============================================================================== Total number of pages contained in this report: 7 --- 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 September 30, 1994 and December 31, 1993 and "Selected Financial Data, Combined Statements of Income and Combined Statements of Changes in Cash" for the periods ended September 30, 1994 and 1993, of the registrant, and "Notes to Combined Financial Statements," presented in the registrant's Third Quarter Report, September 30, 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. In August 1994, the registrant acquired a 345-unit apartment complex in Durham, NC for $19 million in an all cash transaction. The $19 million had been invested in short term investments. In September 1994, the registrant contracted to sell on January 15, 1995 its 50% ownership interests in two malls located in Wilkes-Barre, PA and Fairmount, WV for $35.5 million. The contract provides for a $2 million payment in 1994, a $27.5 million payment to be received in January 1995 and a note of $6 million with an interest rate of 9% due in January of 1998. The proceeds will be net of $4.7 million of existing mortgages secured by the properties and results in a gain of $29.9 million given the registrant's basis of $10.3 million in the two properties. This transaction will be recorded by the registrant in January 1995. Proceeds of this transaction will be used for debt reduction, tenant alterations, capital improvements, and property acquisitions. Income from operations was $1.6 million and $2.9 million for the three months ended September 30, 1994 and 1993, respectively, and $4.9 million and $8.6 million for the nine months ended September 30, 1994 and 1993, respectively. Income from property operations, which is rents less operating expenses and real estate taxes, for properties in the portfolio for both the three and nine month periods of 1994 and 1993, decreased when comparing these periods. These decreases were primarily caused by the one time recognition in 1993 of a real estate tax refund from two office buildings. The apartment complex acquisition in August 1994 positively impacted income from property operations when comparing the three and nine month periods of 1994 to the same periods of 1993. Short term investment interest income increased when comparing the same periods of 1994 to that of 1993 because of investments in short term securities averaging approximately $31 million during the third quarter of 1994 and $35 million for the nine months ended September 30, 1994. In 1993, the registrant had an average of approximately $1 million invested in short term investments. The large increase in short term investments from 1994 to 1993 was due to the registrant borrowing $38 million under one of its lines of credit on December 31, 1993 and subsequently investing the funds in short term securities. In August 1994, the registrant used $19 million of short term investments to purchase the Durham, NC apartment complex. 3 Mortgage interest expense increased when comparing the third quarter and nine months of 1994 to the same periods of 1993. This increase was caused primarily by the $35 million mortgage, secured by a shopping mall in St. Cloud, MN. This mortgage was recorded in September 1993. Senior notes interest expense increased in the third quarter and first nine months of 1994 as compared to the same periods of 1993. The increase was caused by the issuance of $100 million of 8.875% senior notes on October 1, 1993. The proceeds were primarily used 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 costs increased when comparing the third quarter and nine months of 1994 to the same periods of 1993. The increase in expenses resulted from professional fees related to the registrant's reorganization of the portfolio and management, expenses associated with the new long term incentive performance plan and increased staffing to execute the new strategic plan. Net income was $1.6 million and $2.9 million for the third quarter of 1994 and 1993, respectively, and $4.9 million and $13.4 million for the nine months ended September 30, 1994 and 1993, respectively. Capital gains included in net income during the nine months of 1993 were $4.8 million. The majority of the capital gains was from an installment sale of an office building in 1983. 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. None. 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) - Third Quarter Report, September 30, 1994. Exhibit (27) - Financial Data Schedule. (b) Reports on Form 8-K: None. 4 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: November 14, 1994 By: /s/ Gregory D. Bruhn ----------------- --------------------------------- Gregory D. Bruhn, Executive Vice President and Chief Financial Officer Date: November 14, 1994 By: /s/ John J. Dee ----------------- --------------------------------- John J. Dee, Senior Vice President-Controller (Principal Accounting Officer) 5 Index to Exhibits
Page Number ------ Exhibit (11) - Statements Re: Computation of Per Share Earnings ........................................ 6 Exhibit (20) - Third Quarter Report, September 30, 1994 ........ 7 Exhibit (27) - Financial Data Schedule .........................
EX-11 2 EXHIBIT 11 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 Nine Months Ended September 30, September 30, ------------------- ------------------ 1994 1993 1994 1993 ----- ----- ----- ----- Shares Outstanding: For computation of primary net income per share - Weighted average 18,107 18,095 18,115 18,093 ======= ======= ======= ======= For computation of fully diluted net income per share - Weighted average, without regard to exercise of shares under share option or restricted stock plans 18,104 18,095 18,109 18,086 Weighted average of outstanding shares issued under restricted stock plan 6 -- 9 -- Weighted average of outstanding shares issued under share option plans -- -- -- 7 Weighted average of outstanding shares repurchased (3) -- (3) -- ------- ------- ------- ------- Adjusted shares outstanding 18,107 18,095 18,115 18,093 ======= ======= ======= ======= Net Income $ 1,605 $ 2,901 $ 4,871 $13,394 ------- ------- ------- ------- Per Share - Primary and fully diluted: Income from operations $ .09 $ .16 $ .27 $ .48 Capital gains .26 ------- ------- ------- ------- Net income $ .09 $ .16 $ .27 $ .74 ======= ======= ======= =======
EX-20 3 EXHIBIT 20 1
Exhibit (20) ------------ SELECTED FINANCIAL DATA ----------------------- THREE MONTHS NINE MONTHS Unaudited (In thousands, except per share data) ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ------------------------- ------------------------- 1994 1993 1994 1993 ------ ------ ------ ------ OPERATING RESULTS Revenues $19,326 $18,706 $56,975 $55,377 Income from operations 1,605 2,901 4,871 8,627 Net income 1,605 2,901 4,871 13,394 Funds from operations (1) 4,616 5,603 13,631 16,756 Dividends declared 1,826 3,257 5,448 9,771 PER SHARE Income from operations $ .09 $ .16 $ .27 $ .48 Net income .09 .16 .27 .74 Funds from operations .25 .31 .75 .93 Dividends declared .10 .18 .30 .54
(1) The amount of funds from operations is calculated as income from operations plus noncash charges for depreciation and amortization. 2
Combined Balance Sheets ----------------------- September 30, December 31, Unaudited (In thousands, except shares) 1994 1993 ------------- ------------ ASSETS Investments in real estate Land $ 44,337 $ 40,284 Buildings and improvements 389,021 368,776 --------- --------- 433,358 409,060 Less - Accumulated depreciation (110,167) (101,824) --------- --------- Total investments in real estate 323,191 307,236 Mortgage loans receivable 35,703 35,550 Other assets Cash and cash equivalents 24,049 38,523 Accounts receivable 4,947 4,621 Deferred charges, net 2,833 2,506 Unamortized debt issue costs 4,857 5,185 --------- --------- $ 395,580 $ 393,621 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Mortgage loans $ 91,870 $ 92,355 Senior notes 105,000 105,000 Bank loans 60,000 60,000 Accounts payable and accrued liabilities 17,343 14,356 Deferred obligations 10,488 10,394 Deferred capital gains and other deferred income 7,746 7,750 Shareholders' equity, including shares of beneficial interest, $1 par, unlimited authorization, outstanding 1994--18,262,725; 1993--18,108,725 103,133 103,766 --------- --------- $ 395,580 $ 393,621 ========= =========
3 COMBINED STATEMENTS OF INCOME -----------------------------
THREE MONTHS NINE MONTHS Unaudited (In thousands, except per share data) ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, -------------------------- ------------------------ 1994 1993 1994 1993 ------- ------- ------- ------- Revenues Rents $17,968 $17,723 $53,010 $52,297 Interest - Mortgage loans 985 981 2,941 3,051 - Investment interest 373 2 1,024 29 ------- ------- ------- ------- 19,326 18,706 56,975 55,377 ------- ------- ------- ------- Expenses Property operating 6,435 6,495 19,176 18,633 Real estate taxes 2,011 1,799 5,945 5,673 Depreciation and amortization 3,011 2,702 8,760 8,129 Interest - Mortgage loans 1,809 1,389 5,356 4,121 - Senior notes 2,327 1,050 6,979 3,149 - Convertible debentures 964 2,893 - Bank loans and other 1,223 1,035 3,362 3,107 General and administrative 905 371 2,526 1,045 ------- ------- ------- ------- 17,721 15,805 52,104 46,750 ------- ------- ------- ------- Income from operations 1,605 2,901 4,871 8,627 Capital gains 4,767 ------- ------- ------- ------- Net income $ 1,605 $ 2,901 $ 4,871 $13,394 ======= ======= ======= ======= Per share Income from operations $ .09 $ .16 $ .27 $ .48 Capital gains .26 ------- ------- ------- ------- Net income $ .09 $ .16 $ .27 $ .74 ======= ======= ======= ======= Dividends declared $ .10 $ .18 $ .30 $ .54 ======= ======= ======= ======= Adjusted shares of beneficial interest 18,107 18,095 18,115 18,093 ======= ======= ======= =======
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 were not included in the per share computation because they were not dilutive. 2. Capital gains recognized included $4.7 million for nine months ended September 30, 1993, from an installment sale which occurred in 1983. The final installment from this sale was received in June 1993. Capital gains for the nine months ended September 30, 1993 also included $71,000 from the sale of a small land parcel. 4 Combined Statements of Changes in Cash --------------------------------------
Three Months Nine Months Unaudited (In thousands) Ended September 30, Ended September 30, --------------------------- ---------------------------- 1994 1993 1994 1993 -------- -------- -------- -------- Cash provided by (used for) operations Net income $ 1,605 $ 2,901 $ 4,871 $ 13,394 Adjustments to reconcile net income to net cash provided by operations -- Depreciation and amortization 3,011 2,702 8,760 8,129 Capital gains (4,767) Increase in deferred charges, net (477) (204) (820) (423) Increase in deferred interest on mortgage investments, net (93) (108) (261) (299) Increase in deferred obligations 33 28 94 81 Recognition of deferred income, net (2) (1) (4) (81) Net changes in other assets and liabilities 3,693 884 4,127 1,052 -------- -------- -------- -------- Net cash provided by operations 7,770 6,202 16,767 17,086 -------- -------- -------- -------- Cash provided by (used for) investing Principal received from mortgage investments 37 33 108 4,390 Investments in properties (21,161) (4,166) (23,878) (10,398) Proceeds from sale of properties, net 71 -------- -------- -------- -------- Net cash used for investing (21,124) (4,133) (23,770) (5,937) -------- -------- -------- -------- Cash provided by (used for) financing Increase in mortgage loans 35,000 4,600 35,000 Decrease in short term loans (30,365) (31,305) Repayment of mortgage loans - Normal payments (947) (786) (2,860) (2,400) - Balloon payments (2,225) Dividends paid (1,811) (3,257) (6,881) (9,769) Debt issue costs paid 30 (2,107) (16) (2,465) Purchase of First Union securities (23) (57) Other (9) 2 (32) (28) -------- -------- -------- -------- Net cash used for financing (2,760) (1,513) (7,471) (10,967) -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents (16,114) 556 (14,474) 182 Cash and cash equivalents at beginning of period 40,163 618 38,523 992 -------- -------- -------- -------- Cash and cash equivalents at end of period $ 24,049 $ 1,174 $ 24,049 $ 1,174 ======== ======== ======== ========
EX-27 4 EXHIBIT 27
5 1 DOLLARS 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 1 24,049,000 0 40,650,00 0 0 7,690,000 433,358,000 (110,167,000) 395,580,000 35,577,000 256,870,000 103,133,000 0 0 0 395,580,000 53,010,000 56,975,000 0 25,121,000 11,286,000 0 15,697,000 4,871,000 0 4,871,000 0 0 0 4,871,000 0.27 0.27
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