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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
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Date of Report (Date of Earliest Event Reported)
CONTINENTAL MORTGAGE AND EQUITY TRUST
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(Exact Name of Registrant as Specified in its Charter)
Califoria 0-10503 94-2738844
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(State of Incorporation) (Commission (IRS Employer
File No.) Identification No.)
10670 North Central Expressway, Suite 300, Dallas, TX 75231
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (214) 692-4700
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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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.
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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
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99.0 The Pines Apartments Audited Statement of Operations for the year ended December 31, 1993.
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CONTINENTAL MORTGAGE AND EQUITY TRUST
PRO FORMA
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1994
THE PINES
ACTUAL APARTMENTS(1) PRO FORMA
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(DOLLARS IN THOUSANDS)
Assets
Notes and interest receivable
Performing............................................... $ 19,956 $ -- $ 19,956
Nonperforming, nonaccruing............................... 3,791 -- 3,791
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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)
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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
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$184,204 $ 5,400 $ 189,604
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Liabilities and Shareholders' Equity
Liabilities
Notes and interest payable................................. $100,298 $ 5,400 $ 105,698
Other liabilities.......................................... 4,741 -- 4,741
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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
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79,165 -- 79,165
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$184,204 $ 5,400 $ 189,604
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(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.
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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)
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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
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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
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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)
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Net (loss)......................... $ (.18) $ (.04)
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Shares of beneficial interest
outstanding...................... 2,920,376 2,920,376
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(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.
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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)
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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
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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
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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
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Net (loss)......................... $ .20 $ .49
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Shares of beneficial interest
outstanding...................... 3,014,256 3,014,256
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(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.
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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
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Thomas A. Holland
Senior Vice President and
Chief Accounting Officer
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CONTINENTAL MORTGAGE AND EQUITY TRUST
EXHIBIT TO ITS
CURRENT REPORT ON FORM 8-K/A
Dated December 22, 1994
Exhibit Page
Number Description Number
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99.0 The Pines Apartments Audited Statement of 9
Operations for the year ended December 31, 1993.
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