-----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, PhmemMUZ/9uS/Vfo4eZZFp127MhXY5zskUULjs8ILMo560X+XKqB2BjzslOvHYI3 6K/4jsuHc5SFu9ULFalMQg== 0000930661-99-002826.txt : 19991214 0000930661-99-002826.hdr.sgml : 19991214 ACCESSION NUMBER: 0000930661-99-002826 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991130 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSCONTINENTAL REALTY INVESTORS INC CENTRAL INDEX KEY: 0000733590 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 946565852 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09240 FILM NUMBER: 99773578 BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRWY STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2146924700 MAIL ADDRESS: STREET 1: 10670 N CENTRAL EXPRWY STREET 2: SUITE 300 CITY: DALLAS STATE: TX ZIP: 75231 FORMER COMPANY: FORMER CONFORMED NAME: JOHNSTOWN CONSOLIDATED REALTY TRUST /CA/ DATE OF NAME CHANGE: 19890815 FORMER COMPANY: FORMER CONFORMED NAME: JOHNSTOWN CONSOLIDATED REALTY TRUST DATE OF NAME CHANGE: 19861005 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 November 30, 1999 -------------------------------------------------- Date of Report (Date of Earliest Event Reported) TRANSCONTINENTAL REALTY INVESTORS, INC. -------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Nevada 0-13291 94-6565852 - -------------------------------------------------------------------------------- (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 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS - --------------------------------------------- On November 30, 1999, Transcontinental Realty Investors, Inc. ("TCI") and Continental Mortgage and Equity Trust ("CMET") closed the merger of the two companies with TCI as the survivor. Pursuant to the merger, TCI acquired all of the outstanding shares of CMET in a tax-free exchange of shares. TCI issued 1.181 shares of TCI common stock for each outstanding share of beneficial interest of CMET. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS - ------------------------------------------ (a) Pro forma financial information: The following unaudited pro forma combined financial information of TCI and CMET presents the historical consolidated balance sheets and statements of operations of TCI and CMET after giving effect to the merger. The unaudited pro forma combined balance sheet data at September 30, 1999 gives effect to the merger as if it had occurred on September 30, 1999. The unaudited pro forma combined statements of operations for the nine months ended September 30, 1999 and the fiscal year ended December 31, 1998 gives effect to the merger as if it had occurred on January 1, 1998. These statements have been prepared on the basis of accounting for the merger as a purchase and are based on the assumption set forth in the notes thereto. 2 UNAUDITED PRO FORMA COMBINED BALANCE SHEET September 30, 1999
Historical Pro forma Pro forma ----------------------- TCI CMET Adjustments Combined --------- ---------- ----------------- -------------- (dollars in thousands, except per share) Assets ------ Notes and interest receivable $ 1,761 $ 649 $ 2,410 Less- allowances for estimated losses (293) (250) (543) --------- --------- ---------- 1,468 399 1,867 Foreclosed real estate held for sale, net of accumulated depreciation 281 2,830 3,111 Real estate held for investment, net of accumulated depreciation 375,200 278,926 ${ 500 (B)} 629,522 { (25,104) (C)} Investment in real estate entities 1,669 - 1,669 Investment in marketable equity securities of affiliates, at market - 14,109 (873) (D) 13,236 Cash and cash equivalents 16,254 3,965 20,219 Other assets 29,380 18,465 (1,459) (C) 46,386 --------- --------- ----------- ---------- $ 424,252 $ 318,694 $ (26,936) $ 716,010 ========= ========= =========== ==========
3 UNAUDITED PRO FORMA COMBINED BALANCE SHEET September 30, 1999
Historical Pro forma Pro forma -------------------------- TCI CMET Adjustments Combined ----------- ------------ ------------- ---------- (dollars in thousands, except per share) Liabilities and Stockholders' Equity Liabilities Notes and interest payable $ 308,801 $ 219,278 $ 528,079 Other liabilities 12,672 12,006 $ 500 (B) 25,178 ----------- ----------- ----------- ----------- 321,473 231,284 500 553,257 Minority interest 384 - - 384 Stockholders' Equity TCI Preferred Stock Series A; $01 par value; authorized, 6,000 shares; issued and outstanding 5,829 shares (liquidation preference $583) - - Common Stock; $.01 par value, authorized 10,000,000 shares; issued and outstanding 3,881,503 shares historical; 8,549,903 shares pro forma 39 { (1) (D)} 85 { 47 (A)} Paid in capital 218,122 { 60,800 (A)} 278,050 { (872) (D)} Accumulated distributions in excess of accumulated earnings (115,766) (115,766) CMET Shares of beneficial interest, no par value; authorized shares unlimited; issued and outstanding 4,021,180 shares 8,058 (8,058) (A) - Paid in capital 257,121 (257,121) (A) - Accumulated distributions in excess of accumulated earnings (190,520) 190,520 (A) - Net unrealized gains on marketable equity securities of affiliates 12,751 (12,751) (A) - ----------- ----------- ----------- ----------- 102,395 87,410 (27,436) 162,369 ----------- ----------- ----------- ----------- $ 424,252 $ 318,694 $ (26,936) $ 716,010 =========== =========== =========== ===========
4 NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET September 30, 1999 (dollars in thousands) Note A. To record the purchase price of CMET at its estimated fair value. Estimate fair value of 4,749,013 shares of TCI common stock at $12.8125 per share (the closing price on November 30, 1999) issued at the exchange rate of 1.181 share of TCI common stock for each of the 4,021,180 outstanding CMET shares of beneficial interest or $60,847. Note B. To record estimate of additional closing costs. Note C. To record allocation of purchase price to assets and liabilities acquired as follows: Notes and interest receivable $ 399 Foreclosed real estate held for sale 2,830 Real estate held for investment 253,822 Investment in marketable equity securities of affiliates 14,109 Cash and cash equivalents 3,965 Other assets 17,006 Notes and interest payable (219,278) Other liabilities (12,006) ---------- $ 60,847 ========== The adjustment to "Real estate held for investment" resulting from the above allocation is due to the application of purchase accounting, and is not indicative of the appraised value of such real estate. Note D. To record retirement of 80,268 shares of TCI common stock included in the acquired CMET assets at CMET's carrying value (September 30, 1999 market value) of $873. 5 UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS For the Nine Months Ended September 30, 1999
Historical Pro forma Pro forma --------------------------- TCI CMET Adjustments Combined ------------ ----------- ------------- ---------- (dollars in thousands, except per share) Revenues Rents.......................................... $ 57,628 $ 49,764 $ 107,392 Interest....................................... 297 316 $ (36) (C) 577 ------------ ----------- ------ ----------- 57,925 50,080 (36) 107,969 Expenses Property operations............................ 30,154 28,849 59,003 Interest....................................... 18,722 15,832 34,554 Depreciation................................... 8,737 6,073 (615) (A) 14,195 Advisory fee................................... 2,220 1,826 (138) (B) 3,908 Net income fee................................. 1,055 178 59 (D) 1,292 General and administrative..................... 2,165 1,893 4,058 ------------ ----------- ------ ----------- 63,053 54,651 (694) 117,010 ------------ ----------- ------ ----------- (Loss) from operations........................... (5,128) (4,571) 658 (9,041) Equity in income of investees.................... 2,135 164 2,299 Gain on sale of real estate...................... 16,001 6,600 22,601 ------------ ----------- ------ ----------- Net income....................................... 13,008 2,193 658 15,859 Preferred dividend requirement................... (23) - (23) ------------ ----------- ------ ----------- Net income applicable to Common shares........... $ 12,985 $ 2,193 $ 658 $ 15,836 ============ =========== ====== =========== Earnings per share Net income....................................... $ 3.35 $ .55 $ 1.85 ============ =========== =========== Weighted average shares used in computing earnings per share............................... 3,879,954 4,022,199 8,549,903 ============ =========== ===========
6 NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS For the Nine Months Ended September 30, 1999 (dollars in thousands) Note A. To adjust depreciation for the $24,604 write down of the acquired real estate held for investment, amortized over such assets' 30 year estimated average remaining useful life. Note B. To adjust the .75% per annum advisory fee for the $24,604 write down of the acquired real estate held for investment. Note C. To eliminate the divided income of $.15 per share, on the 80,268 shares of TCI common stock acquired with CMET's assets and retired. Note D. To adjust the 7.5% net income fee for the effects of the items described in Notes A, B and C, above. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS For the Year Ended December 31, 1998
Historical Pro forma Pro forma -------------------------- TCI CMET Adjustments Combined ----------- ----------- ------------- ------------ (dollars in thousands, except per share) Revenues Rents....................................... $ 69,829 $ 63,593 $ 133,422 Interest.................................... 807 698 $ (48) (C) 1,457 ----------- ----------- ------- ----------- 70,636 64,291 (48) 134,879 Expenses Property operations......................... 38,282 37,368 75,650 Interest.................................... 22,797 21,362 44,159 Depreciation................................ 10,691 8,095 (832) (A) 17,954 Advisory fee................................ 1,962 1,507 (187) (B) 3,282 Net income fee.............................. 558 28 76 (D) 662 General and administrative.................. 2,312 2,305 4,617 Provision for losses........................ - (506) (506) ----------- ----------- ------- ----------- 76,602 70,159 (943) 145,818 ----------- ----------- ------- ----------- (Loss) from operations........................ (5,966) (5,868) 895 (10,939) Equity in income of investees................. 288 157 445 Gain on sale of real estate................... 12,584 6,058 18,642 ----------- ----------- ------- ----------- Net income.................................... 6,906 347 895 8,148 Preferred dividend requirement................ (1) - (1) ----------- ----------- ------- ----------- Net income applicable to Common shares........ $ 6,905 $ 347 $ 895 $ 8,147 =========== =========== ======= =========== Earnings per share Net income.................................... $ 1.78 $ .09 $ .95 =========== =========== =========== Weighted average shares used in computing earnings per share.......................... 3,876,797 4,012,614 8,615,694 =========== =========== ===========
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS For the Year Ended December 31, 1998 (dollars in thousands) Note A. To adjust depreciation for the $24,971 write down of the acquired real estate held for investment, amortized over such assets' 30 year estimated average remaining useful life. Note B. To adjust the .75% per annum advisory fee for the $24,971 write down of the acquired real estate held for investment. Note C. To eliminate the divided income of $.60 per share, on the 80,268 shares of TCI common stock acquired with CMET's assets and retired. Note D. To adjust the 7.5% net income fee for the effects of the items described in Notes A, B and C, above. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued) - ------------------------------------------ (b) Financial statements of property acquired: Exhibit Number Description - ------- ---------------------------------------------------------------------- 99.0 Audited Consolidated Financial Statements of Continental Mortgage and Equity Trust for the year ended December 1998 (incorporated by reference to Item 8. of Continental Mortgage and Equity Trust's Annual Report on Form 10-K, dated March 25, 1999. 99.1 Unaudited Consolidated Financial Statements of Continental Mortgage and Equity Trust for the nine months ended September 30, 1999 (incorporated by reference to Item 1. of Continental Mortgage and Equity Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, dated November 12, 1999). 10 SIGNATURE PAGE 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. TRANSCONTINENTAL REALTY INVESTORS, INC. Date: December 13, 1999 By: /s/ Thomas A. Holland ------------------------ ----------------------------------- Thomas A. Holland Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 11 -----END PRIVACY-ENHANCED MESSAGE-----