FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
AT THE COMPANY
Carolyn Tiffany
Chief Operating Officer
(617) 570-4614
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS ANNOUNCES FINANCIAL
RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005
FOR IMMEDIATE RELEASE - Boston, Massachusetts- November 14, 2005 First Union
Real Estate Equity and Mortgage Investments (NYSE:FUR), a real estate investment
trust, announced today the operating results for the third quarter ended
September 30, 2005.
Highlights of the Quarter included:
o Excluding the accrual of income related to the Peachtree Mall
settlement of $11,000,000, income from continuing operations was
$5,273,000 for the nine months ended September 30, 2005 compared to
income from continuing operations of $263,000, which excludes
insurance recoveries, for the same period during 2004.
o Excluding the 2005 Peachtree Mall settlement and the 2004 insurance
recoveries, net income from continuing operations increased for the
three months ended September 30, 2005 to $2,232,000 from $965,000
for the three months ended September 30, 2004.
o Entered into an agreement on August 5, 2005 to acquire $50,000,000
in newly issued common shares of Newkirk Realty Trust, Inc., a newly
formed real estate investment trust and agreed to receive
$20,000,000 in common shares of Newkirk Realty Trust, Inc. in
exchange for a release of management's exclusivity as it relates to
net leased properties.
o Received notice of appropriated funding from the State of California
in the aggregate amount of $11,000,000 representing full settlement
of all claims against the State with respect to the loss incurred
from the Peachtree Mall flood in 1986
o Entered into a settlement agreement on September 9, 2005 with
Sizeler Property Investors, Inc., whereby all litigation between us
was dismissed, we received reimbursement of $375,000 for expenses
and Michael Ashner, our Chief Executive Officer was appointed to the
Board of Directors of Sizeler Property Investors, Inc.
o Made a first mortgage loan on a property located in Northbrook,
Illinois beneficially owned by an affiliate of Marc Realty in the
aggregate amount of $3,500,000.
Financial results for the three and nine months ended September 30, 2005 and
2004 are as follows:
(in thousands, except per-share data) For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
-------------------------- -------------------------
Revenues $ 8,770 $ 2,594 $22,848 $ 4,280
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Income from continuing operations $13,232 $ 2,209 $16,273 $ 1,507
Income (loss) from discontinued
operations 24 (491) 546 20,451
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Net income $13,256 $ 1,718 $16,819 $21,958
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Net income applicable to Common
Shares of Beneficial Interest $11,115 $ 1,202 $11,641 $20,410
======= ======= ======= =======
Per Share - Basic and Diluted:
Income from continuing operations, net
of preferred dividends $ 0.35 $ 0.05 $ 0.35 $ 0.00
(Loss) income from discontinued
operations 0.00 (0.02) 0.02 0.66
------- ------- ------- -------
Net income applicable to Common
Shares of Beneficial Interest $ 0.35 $ 0.03 $ 0.37 $ 0.66
======= ======= ======= =======
Net income for the nine months ended September 30, 2005 was $16,819,000 as
compared to net income of $21,958,000 for the nine months ended September 30,
2004. The primary reason for the decrease in net income was a decrease in income
from discontinued operations of $19,905,000, of which $19,268,000 resulted from
a gain on sale of Park Plaza Mall. Partially offsetting the decrease in net
income is other income of $11,000,000 representing the accrual of a legal
settlement with the State of California for the Peachtree Mall flood.
Revenues increased to $22,848,000 for the nine months ended September 30, 2005
from $4,280,000 for the same period in 2004. This was primarily due to an
increase in rental revenue of $16,976,000 to $18,076,000 for the nine months
ended September 30, 2005 from $1,100,000 for the nine months ended September 30,
2004. The increase was primarily due to the acquisition of the triple net leased
properties which generated revenue of $16,966,000.
Net income for the three months ended September 30, 2005 was $13,256,000 as
compared to net income of $1,718,000 for the three months ended September 30,
2004. The primary reason for the increase in net income was due to an increase
in rental revenues of $5,966,000 and other income of $11,000,000, offset by
increases in interest expense of $4,490,000 and depreciation and amortization
expense of $1,696,000.
Rental income increased by $5,966,000 to $6,323,000 for the three months ended
September 30, 2005 from $357,000 for the three months ended September 30, 2004.
The increase was primarily due to the acquisition of the triple net leased
properties which generated $5,927,000 of revenue.
Further details regarding the Company's results of operations, properties and
tenants are available in the Company's Form 10-Q for the quarterly period ended
September 30, 2005 as filed with the Securities and Exchange Commission which
can be accessed at the Company's website www.firstunion-reit.net or at the
Securities and Exchange Commission website www.sec.gov.
Certain statements contained in this press release that are forward-looking are
based on current expectations that are subject to a number of uncertainties and
risks, and actual results may differ materially. Further information about these
matters and the risks generally with respect to First Union can be found in
First Union's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed real
estate investment trust (REIT) headquartered in Boston, Massachusetts.