First Union Real Estate Investments Announces Fourth Quarter and Year End 2002 Results.Business Editors NEW YORK--(BUSINESS WIRE)--March 31, 2003 First Union Real Estate Investments (NYSE NYSE See: New York Stock Exchange :FUR fur, hairy covering of an animal, especially the skins of animals that have thick, soft, close-growing hair next to the skin itself and coarser protective hair above it. ) announced the operating results for the fourth quarter and year ended December December: see month. 31, 2002.
Financial results for the three and twelve months ended December
31, 2002 and 2001 are as follows:
Three Months Ended Twelve Months Ended
--------------------------------------
(in thousands) Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
--------------------------------------
Revenues $ 4,701 $ 5,843 $18,701 $ 31,391
======== ========= ======== ==========
Loss before (loss) gains on
sales of real estate and
extraordinary loss from
early extinguishment
of debt (1,229) (5,198) (5,032) (13,729)
(Loss) gains on sales of real
estate - (19) - 30,096
Extraordinary loss from early
extinguishment of debt - - - (889)
-------- --------- -------- ----------
Net (loss) income $(1,229) $ (5,217) $(5,032) $ 15,478
======== ========= ======== ==========
Net (loss) income applicable to
shares of beneficial
interest $(1,745) $ (5,734) $(7,099) $ 13,410
======== ========= ======== ==========
For the three months ended December 31, 2002, First Union's net loss applicable to shares of beneficial interest was $1.7 million compared to a net loss applicable to shares of beneficial interest of $5.7 million for the same period in 2001. Net loss applicable to shares of beneficial interest for the three months ended December 31, 2002 and 2001 included $0.7 million and $0.3 million, respectively, of transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). related to the proposed transaction with Gotham Gotham (gŏth`əm), name for New York City first used by Washington Irving and others in the Salmagundi Papers, with satirical reference to Gotham, England, where the wise men acted as fools in order to avoid paying for the king's upkeep. Golf Corp., which are included in general and administrative expenses. In addition, the net loss applicable to shares of beneficial interest for the three months ended December 31, 2002 included $0.5 million of costs related to the preferred shareholder lawsuit lawsuit: see procedure; tort. , which are included in general and administrative expenses. Net loss applicable to shares of beneficial interest for the three months ended December 31, 2001 included a $4.4 million write off of its investment in HQ Global Holdings, Inc. preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. dividends. Property net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , which is defined as rent less operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , and real estate taxes increased for the three months ended December 31, 2002 to $2.3 million from $2.2 million for the same period in 2001. The increase was attributable to an increase in rents as a result of increased rental rates at Park Plaza For the hotel in New York City, see . Plaza (IPA /'plaθa/ or /'plasa/ . First Union's affiliated manufacturing facility, VenTek, incurred a net loss of $0.7 million for the three months ended December 31, 2002, as compared to a net loss of $0.5 million for the three months ended December 30, 2001. Revenue decreased for the three months ended December 31, 2002 to $0.7 million from $1.8 million in 2001 and cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold decreased to $1.4 million from $2.2 million for the same period. The decrease in both revenues and cost of goods sold is due to the winding down of current contracts and having nominal new business. Interest income decreased during the three months ended December 31, 2002, as compared to the same period in 2001, due primarily to lower amounts invested and lower interest rates between the comparable three month periods. Proposed Transaction The proposed merger transaction between First Union and Gotham Golf Corp. currently is enjoined by an order of the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State Supreme Court for New York County that has been appealed by both First Union and Gotham Partners, L. P. Oral argument with respect to the appeal was held before a judicial panel of the Appellate Division In several jurisdictions, the Appellate Division is the name of a court, or division of a court, that hears appeals from lower courts.
A timetable or schedule is an organized list or schedule, usually set out in tabular form, providing information about a series of arranged events: in particular, the time at which for the appellate court A court having jurisdiction to review decisions of a trial-level or other lower court. An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. to render its decision. In the proposed merger transaction, holders of First Union common shares would receive for each common share held (i) $1.98 in cash, (ii) a choice of an additional $0.35 in cash or approximately 1/174th of a debt instrument to be issued by a First Union subsidiary with a face value of $100 and which is indirectly secured by First Union's principal real estate assets and (iii) rights to purchase common shares of Gotham Golf Corp. Holders of First Union preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. would receive preferred shares of Gotham Golf Corp., as provided for under the terms of the First Union preferred shares. In the event that, for any reason, the Gotham Golf Corp. merger were not consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , it is the current intention of the Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. of First Union to continue to operate First Union as an ongoing enterprise and to examine other alternatives as and when it may deem appropriate. The First Union Board of Trustees has no present intention of liquidating First Union in the event that the proposed transaction is not consummated. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements contained in this news release that are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, changes in market activity, changes in local real estate conditions and markets, actions by competitors, interest rate movements and general economic conditions. Further information about these matters can be found in the information included in the Annual Report filed by First Union with the SEC on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for its fiscal year ended December 31, 2002. First Union Real Estate Equity and Mortgage Investments is a NYSE-listed, stapled-stock real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) headquartered in New York, New York.
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
Combined Statements of Operations
(In thousands, except per share data)
Three Months Twelve Months
Ended Ended
Dec. 31, Dec. 31,
-------------------------------------
2002 2001 2002 2001
-------------------------------------
Revenues
Rents $3,630 $3,471 $13,643 $18,741
Sales 730 1,801 2,924 7,554
Interest and dividends 341 571 1,659 5,091
Other income - - 475 5
-------------------------------------
4,701 5,843 18,701 31,391
-------------------------------------
Expenses
Property operating 1,097 1,075 5,043 6,981
Cost of goods sold 1,354 2,227 4,892 8,777
Real estate taxes 225 237 899 1,218
Depreciation and amortization 537 507 2,077 3,837
Interest 1,217 1,212 5,102 7,094
General and administrative 1,500 1,383 5,720 5,750
Write-down of investment - 4,400 - 11,463
-------------------------------------
5,930 11,041 23,733 45,120
-------------------------------------
Loss before (loss) gains
on sales of real estate
and extraordinary
loss from early
extinguishment of debt (1,229) (5,198) (5,032) (13,729)
(Loss) gains on
sales of real estate - (19) - 30,096
-------------------------------------
(Loss) income before
extraordinary loss
from early
extinguishment
of debt (1,229) (5,217) (5,032) 16,367
Extraordinary loss from
early extinguishment
of debt - - - (889)
-------------------------------------
Net (loss) income (1,229) (5,217) (5,032) 15,478
Preferred dividend (516) (517) (2,067) (2,068)
-------------------------------------
Net (loss) income applicable to
shares of beneficial interest $(1,745) $(5,734) $(7,099) $ 13,410
=====================================
Per share data
Basic:
(Loss) income before
extraordinary loss from
early extinguishment
of debt $(0.05) $(0.16) $(0.20) $0.39
Extraordinary loss from
early extinguishment
of debt - - - (0.02)
-------------------------------------
Net (loss) income applicable
to shares of beneficial
interest $(0.05) $(0.16) $(0.20) $0.37
=====================================
Diluted:
(Loss) income before
extraordinary loss from
early extinguishment
of debt $(0.05) $(0.16) $(0.20) $0.39
Extraordinary loss from
early extinguishment
of debt - - - (0.02)
-------------------------------------
Net (loss) income applicable
to shares of beneficial
interest $(0.05) $(0.16) $(0.20) $0.37
=====================================
Basic weighted average shares 34,809 34,806 34,807 36,396
Diluted weighted average shares 34,809 34,806 34,807 36,396
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