1
Exhibit 20
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
- -------------------------------------------------------
Combined Balance Sheets
Unaudited (In thousands, except shares) June 30, December 31,
1996 1995
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ASSETS
Investments in real estate
Land $ 51,756 $ 54,403
Buildings and Improvements 395,382 395,157
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447,138 449,560
Less - Accumulated depreciation (106,828) (107,701)
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Total investments in real estate 340,310 341,859
Mortgage loans receivable 42,149 42,042
Other assets
Cash and cash equivalents 7,403 3,402
Accounts receivable and prepayments 7,962 4,536
Deferred charges and other, net 5,082 4,873
Unamortized debt issue costs 3,926 4,287
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$ 406,832 $ 400,999
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loans $ 118,832 $ 83,854
Senior notes 105,000 105,000
Bank loans 51,670 69,600
Accounts payable and accrued liabilities 14,044 21,779
Deferred obligations 10,752 10,670
Deferred capital gains and other deferred income 7,738 7,741
Shareholders' equity, including shares of
beneficial interest, $1 par, unlimited
authorization, outstanding 1996--17,459,144;
1995--17,485,057 98,796 102,355
--------------- -----------------
$ 406,832 $ 400,999
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2
Exhibit 20
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
- -------------------------------------------------------
Combined Statements of Income
Unaudited (In thousands, except per share data) Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
Revenues
Rents $ 18,095 $ 18,334 $ 36,780 $ 36,323
Interest - Mortgage loans 1,266 1,121 2,471 2,193
- Short-term investments 2 121 9 407
------------ ------------ ------------ ------------
19,363 19,576 39,260 38,923
------------ ------------ ------------ ------------
Expenses
Property operating 6,010 6,258 13,176 12,557
Real estate taxes 2,046 2,130 4,066 4,128
Depreciation and amortization 3,013 2,891 6,766 5,666
Interest - Mortgage loans 2,240 1,925 4,065 3,914
- Senior notes 2,325 2,325 4,652 4,652
- Bank loans and other 1,349 1,275 2,916 2,403
General and administrative 1,407 1,460 3,523 3,724
------------ ------------ ------------ ------------
18,390 18,264 39,164 37,044
------------ ------------ ------------ ------------
Income before capital gains and cumulative 973 1,312 96 1,879
effect of accounting change
Capital gains 29,870
------------ ------------ ------------ ------------
Income before cumulative effect of accounting 973 1,312 96 31,749
change for internal leasing costs
Cumulative effect of change in accounting for
internal leasing costs (4,325)
------------ ------------ ------------ ------------
Net income $ 973 $ 1,312 $ 96 $ 27,424
============ ============ ============ ============
Per share
Income before cumulative effect of accounting change $ .06 $ .07 $ .01 $ 1.74
Cumulative effect of change in accounting
for internal leasing costs (.24)
------------ ------------ ------------ ------------
Net income $ .06 $ .07 $ .01 $ 1.50
============ ============ ============ ============
Adjusted shares of beneficial interest 17,231 18,151 17,232 18,152
============ ============ ============ ============
3
Exhibit 20
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
- -------------------------------------------------------
Combined Statements of Changes in Cash
Unaudited (In thousands) Three Months Six Months
Ended June 30, Ended June 30,
------------------------ -----------------------
1996 1995 1996 1995
--------- --------- -------- --------
Cash provided by (used for) operations
Net Income $ 973 $ 1,312 $ 96 $ 27,424
Adjustments to reconcile net income to net
cash provided by operations --
Depreciation and amortization 3,013 2,891 6,766 5,666
Cumulative effect of change in accounting
for internal leasing costs 4,325
Capital gains (29,870)
Increase in deferred charges, net (245) (540) (574) (1,209)
Increase in deferred interest on
mortgage investments, net (97) (96) (193) (186)
Increase in deferred obligations 42 36 82 71
Net changes in other assets and liabilities (3,045) (2,995) (459) 1,354
---------- ---------- ---------- ----------
Net cash provided by operations 641 608 5,718 7,575
---------- ---------- ---------- ----------
Cash provided by (used for) investing
Repayment of mortgage investment 7,000 7,000
Principal received from mortgage investments 44 40 86 78
Proceeds from sale of properties 1,825 27,500
Advance deposit for property acquisitions (3,480) (3,480)
Investments in properties (32,529) (32,844)
Investments in capital and tenant improvements (4,784) (4,847) (13,446) (7,430)
---------- ---------- ---------- ----------
Net cash used for investing (1,220) (37,336) (8,015) (12,696)
---------- ---------- ---------- ----------
Cash provided by (used for) financing
Increase in mortgage loans 24,000 36,500
(Decrease) increase in short-term loans (18,030) 7,418 (17,930) 8,570
Repayment of mortgage loans (802) (890) (1,522) (1,845)
Sale of First Union shares 2 81 75
Dividends paid (1,920) (1,828) (3,948) (3,654)
Debt issue costs paid (166) (38) (777) (38)
Purchase of First Union shares (7,125)
Sale of interest rate protection agreement 1,025
Other (8) 13 (6) (4)
---------- ---------- ---------- ----------
Net cash provided by financing 3,076 4,675 6,298 3,104
---------- ---------- ---------- ----------
Increase (decrease) in cash and cash equivalents 2,497 (32,053) 4,001 (2,017)
Cash and cash equivalents at beginning of period 4,906 33,011 3,402 2,975
---------- ---------- ---------- ----------
Cash and cash equivalents at end of period $ 7,403 $ 958 $ 7,403 $ 958
========== ========== ========== ==========
<FN>
Notes to Combined Financial Statements
1. Income per share of beneficial interest has been computed on weighted
average shares and share equivalents outstanding for the applicable
periods.
2. In 1995, the Trust changed its accounting method to directly expense
internal leasing costs and recorded a $4.3 million charge for the
cumulative effect of the accounting change retroactive to January 1,
1995. Previously, the Trust deferred and amortized these costs over the
lives of consummated lease transactions. Depreciation and amortization,
general and administrative expenses, income before capital gains and
cumulative effect of accounting change, net income and earnings per
share on the 1995 Combined Statements of Income and investment in
properties on the 1995 Combined Statements of Changes in Cash have been
restated to reflect the change in accounting.
3. In February 1996, the Trust sold two office buildings in Cleveland,
Ohio for $1.8 million in cash and a $7 million mortgage note resulting
in a loss of $5.6 million. This loss had been previously recognized
during the fourth quarter of 1995. In January 1995, the Trust sold its
50% interests in two malls in Wilkes-Barre, Pennsylvania and Fairmount,
West Virginia for a $2 million payment which was received in 1994, a
tax-free exchange of these properties for $27.5 million of cash that
was deposited into a tax intermediary escrow account, a $6 million
mortgage note receivable and the assumption by the purchaser of $4.7
million in mortgage debt, resulting in a capital gain for financial
reporting purposes of approximately $29.9 million.