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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
November 30, 1995
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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)
California 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 November 30, 1995 and
filed December 27, 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, 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 November 1995, the Trust purchased Willow Wick Apartments, a 104 unit
apartment complex in North Augusta, South Carolina for $1.5 million, exclusive
of commissions and closing costs. The Trust paid $595,000 in cash and assumed
the existing first mortgage in the amount of $930,000. The mortgage bears
interest at a rate of 7% per annum, requires monthly payments of principal and
interest of $8,000 and matures in January 2013.
In December 1995, the Trust purchased Heritage on the River Apartments, a 301
unit apartment complex in Jacksonville, Florida for $7.9 million, exclusive of
commissions and closing costs. The Trust paid $1.4 million in cash, assumed
the existing first mortgage in the amount of $6.3 million and the seller
provided additional financing in the amount of $193,000. The mortgages bear
interest at a variable rate, currently 9.18% per annum, require monthly
payments of interest only and mature in December 1998.
The combined $9.4 million purchase price of Willow Wick and Heritage on the
River Apartments is approximately 5.1% of the Trust's consolidated assets at
December 31, 1994. Although not a significant acquisition in themselves, 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 Willow Wick and Heritage on the River Apartments
acquisitions discussed above, the Trust purchased two other apartment complexes
and two commercial properties in 1995. The properties, located in Virginia,
Texas and Florida, were purchased for a total of $26.0 million in separate
transactions from unaffiliated sellers, and represent approximately 14.2% of
the Trust's consolidated assets at December 31, 1994. The Trust paid a total
of $5.1 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 2002.
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.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Financial statements of property acquired:
Exhibit
Number Description
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99.0 Heritage on the River Apartments Audited Statement of Revenues and Direct Operating Expenses for the year
ended December 31, 1994.
99.1 Willow Wick Apartments Audited Financial Statements for the year ended December 31, 1994.
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CONTINENTAL MORTGAGE AND EQUITY TRUST
PRO FORMA
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
Heritage on
Willow Wick the River
Actual Apartments(1) Apartments(1) Pro forma
---------- ---------- ---------- -----------
(dollars in thousands)
Assets
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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 1,525 7,940 159,489
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 (595) (1,439) 4,920
Other assets.................... 5,665 - - 5,665
----------- ---------- -------- ----------
$ 204,641 $ 930 $ 6,501 $ 212,072
=========== ========== ======== ==========
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CONTINENTAL MORTGAGE AND EQUITY TRUST
PRO FORMA
CONSOLIDATED BALANCE SHEET - Continued
SEPTEMBER 30, 1995
Heritage on
Willow Wick the River
Actual Apartments(1) Apartments(1) Pro forma
---------- ---------- ---------- -----------
(dollars in thousands)
Liabilities and Shareholders' Equity
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Liabilities
Notes and interest payable....... $ 121,920 $ 930 $ 6,501 $ 129,351
Other liabilities................ 5,848 - - 5,848
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127,768 930 6,501 135,199
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 $ 930 $ 6,501 $ 212,072
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(1) Assumes acquisition of Willow Wick and Heritage on the River
Apartments by the Trust on January 1, 1995. The effects of all other
1995 property purchases are included in the September 30, 1995 actual
balances.
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CONTINENTAL MORTGAGE AND EQUITY TRUST
PRO FORMA
STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995
Heritage on
Willow Wick the River Other Property
Actual Apartments(1) Apartments(1) Acquisitions(1) Pro forma
---------- ----------- ---------- ------------ -------------
(dollars in thousands)
Income
Rentals...................... $ 27,318 $ 339 $ 1,202 $ 1,306 $ 30,165
Interest..................... 600 - - - 600
Equity in income of
partnerships............... 213 - - - 213
----------- -------- ----------- --------- -----------
28,131 339 1,202 1,306 30,978
Expenses
Property operations.......... 16,456 222 728 712 18,118
Interest..................... 6,998 49 448 555 8,050
Depreciation................. 3,133 23 119 148 3,423
Advisory fee to affiliate.... 1,139 - - - 1,139
General and administrative... 928 - - - 928
Provision for losses......... 541 - - - 541
----------- -------- ----------- --------- -----------
29,195 294 1,295 1,415 32,199
----------- -------- ----------- --------- -----------
Net income (loss)............. $ (1,064) $ 45 $ (93) $ (109) $ (1,221)
=========== ======== =========== ========= ===========
Earnings per share
Net (loss)................... $ (.36) $ (.42)
=========== ===========
Shares of beneficial interest
outstanding.................. 2,918,114 2,918,114
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(1) Assumes acquisition by the Trust on January 1, 1995.
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CONTINENTAL MORTGAGE AND EQUITY TRUST
PRO FORMA
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
Heritage on
Willow Wick the River Other Property
Actual Apartments(1) Apartments(1) Acquisitions(1) Pro forma
---------- ----------- ---------- ------------ -------------
(dollars in thousands)
Income
Rentals...................... $ 27,042 $ 452 $ 1,603 $ 4,017 $ 33,114
Interest..................... 2,699 - - - 2,699
Other........................ (479) - - - (479)
----------- -------- ----------- --------- -----------
29,262 452 1,603 4,017 35,334
Expenses
Property operations.......... 16,888 296 971 1,708 19,863
Interest..................... 7,711 65 597 1,622 9,995
Depreciation................. 3,214 30 159 570 3,973
Advisory fee to affiliate.... 1,326 - - - 1,326
General and administrative... 1,235 - - - 1,235
Provision for losses......... 1,429 - - - 1,429
----------- -------- ----------- --------- -----------
31,803 391 1,727 3,900 37,821
----------- -------- ----------- --------- -----------
Income (loss) before gain on
sale of real estate.......... (2,541) 61 (124) 117 (2,487)
Gain on sale of real estate... 1,708 - - - 1,708
----------- -------- ----------- --------- -----------
Net income (loss)............. $ (833) $ 61 $ (124) $ 117 $ (779)
=========== ======== =========== ========= ===========
Earnings per share
(Loss) before gain on sale of
real estate.................. $ (.87) $ (.85)
Gain on sale of real estate.. .58 .58
----------- -----------
Net (loss)................... $ (.29) $ (.27)
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Shares of beneficial interest
outstanding.................. 2,919,815 2,919,815
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(1) Assumes acquisition by the Trust on January 1, 1994.
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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: January 12, 1996 By: /s/ Thomas A. Holland
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Thomas A. Holland
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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CONTINENTAL MORTGAGE AND EQUITY TRUST
EXHIBIT TO ITS
CURRENT REPORT ON FORM 8-K/A
Dated November 30, 1995
Exhibit Page
Number Description Number
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99.0 Heritage on the River Apartments Audited Statement of Revenues and Direct 10
Operating Expenses for the year ended December 31, 1994.
99.1 Willow Wick Apartments Audited Financial Statements for the year ended 15
December 31, 1994.
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