0000724533-95-000006.txt : 19950810 0000724533-95-000006.hdr.sgml : 19950810 ACCESSION NUMBER: 0000724533-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950809 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN INSURED MORTGAGE INVESTORS CENTRAL INDEX KEY: 0000724533 STANDARD INDUSTRIAL CLASSIFICATION: INVESTORS, NEC [6799] IRS NUMBER: 133180848 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11060 FILM NUMBER: 95559904 BUSINESS ADDRESS: STREET 1: 11200 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 BUSINESS PHONE: 3014689200 MAIL ADDRESS: STREET 1: 11200 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 10-Q 1 LIVE FILE AIM84 10-Q 6/95 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1995 ------------- Commission file number 1-11060 -------------- AMERICAN INSURED MORTGAGE INVESTORS ----------------------------------------------------------------- (Exact name of registrant as specified in charter) California 13-3180848 ------------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11200 Rockville Pike, Rockville, Maryland 20852 ----------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) (301) 816-2300 ----------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of August 8, 1995, 10,000,000 depositary units of limited partnership interest were outstanding. 2 AMERICAN INSURED MORTGAGE INVESTORS INDEX TO FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995 PAGE ---- PART I. Financial Information Item 1. Financial Statements Balance Sheets - June 30, 1995 (unaudited) and December 31, 1994 . . . . . . . . . . . . . 3 Statements of Operations - for the three and six months ended June 30, 1995 and 1994 (unaudited) . . . . . . . . . . . . . . . 4 Statement of Changes in Partners' Equity - for the six months ended June 30, 1995 (unaudited) . . . . . . . . . . . . . . 5 Statements of Cash Flows - for the six months ended June 30, 1995 and 1994 (unaudited) . . . . . . . . . . . . . . . . . 6 Notes to Financial Statements (unaudited) . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . 11 PART II. Other Information Item 6. Exhibits and Reports on Form 8-K . . . . . . 14 Signature . . . . . . . . . . . . . . . . . . . . . . . 15 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS BALANCE SHEETS
June 30, December 31, 1995 1994 ------------ ------------ ASSETS (Unaudited) Investment in FHA-Insured Loans, at amortized cost, net of unamortized discount: Acquired insured mortgages $ 9,088,088 $ 9,118,002 Originated insured mortgages 14,562,379 14,590,272 ------------ ------------ 23,650,467 23,708,274 Investment in FHA-Insured Certificates, at fair value: Acquired insured mortgages 14,281,840 13,355,026 Cash and cash equivalents 669,956 722,986 Receivables and other assets 379,015 374,647 ------------ ------------ Total assets $ 38,981,278 $ 38,160,933 ============ ============ LIABILITIES AND PARTNERS' EQUITY Distributions payable $ 823,903 $ 823,903 Accounts payable and accrued expenses 69,944 96,483 ------------ ------------ Total liabilities 893,847 920,386 ------------ ------------ Partners' equity: Limited partners' equity 40,187,832 40,306,817 General partner's deficit (4,918,576) (4,915,023) Net unrealized gains on investment in FHA-Insured Certificates 2,818,175 1,848,753 ------------ ------------ Total partners' equity 38,087,431 37,240,547 ------------ ------------ Total liabilities and partners' equity $ 38,981,278 $ 38,160,933 ============ ============ The accompanying notes are an integral part of these financial statements.
4 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS STATEMENTS OF OPERATIONS (Unaudited)
For the three months ended For the six months ended June 30, June 30, ---------------------------- ---------------------------- 1995 1994 1995 1994 ------------ ------------ ------------ ------------ Income: Mortgage investment income $ 888,144 $ 906,045 $ 1,806,082 $ 1,856,792 Interest and other income 11,459 30,913 20,723 76,189 ------------ ------------ ------------ ------------ 899,603 936,958 1,826,805 1,932,981 ------------ ------------ ------------ ------------ Expenses: Asset management fee to related parties 85,773 85,773 171,546 184,334 General and administrative 47,029 72,476 129,991 151,556 ------------ ------------ ------------ ------------ 132,802 158,249 301,537 335,890 ------------ ------------ ------------ ------------ Earnings before mortgage disposition 766,801 778,709 1,525,268 1,597,091 Gain on mortgage disposition -- -- -- 235,873 ------------ ------------ ------------ ------------ Net earnings $ 766,801 $ 778,709 $ 1,525,268 $ 1,832,964 ============ ============ ============ ============ Net earnings allocated to: Limited partners - 97.1% $ 744,564 $ 756,126 $ 1,481,035 $ 1,779,808 General partner - 2.9% 22,237 22,583 44,233 53,156 ------------ ------------ ------------ ------------ $ 766,801 $ 778,709 $ 1,525,268 $ 1,832,964 ============ ============ ============ ============ Net earnings per Unit of limited partnership interest $ 0.07 $ 0.08 $ 0.15 $ 0.18 ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements.
5 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS STATEMENT OF CHANGES IN PARTNERS' EQUITY For the six months ended June 30, 1995 (Unaudited)
Net Unrealized Gains on Investment in General Limited FHA-Insured Partner Partners Certificates Total ------------ ------------ -------------- ------------- Balance, January 1, 1995 $ (4,915,023) $ 40,306,817 $ 1,848,753 $ 37,240,547 Net earnings 44,233 1,481,035 -- 1,525,268 Distributions paid or accrued of $0.16 per Unit (47,786) (1,600,020) -- (1,647,806) Adjustment to net unrealized gains on investment in FHA-Insured Certificates -- -- 969,422 969,422 ------------ ------------- ------------- ------------- Balance, June 30, 1995 $ (4,918,576) $ 40,187,832 $ 2,818,175 $ 38,087,431 ============ ============= ============= ============= Limited Partnership Units outstanding - June 30, 1995 10,000,125 =============
The accompanying notes are an integral part of these financial statements. 6 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS STATEMENTS OF CASH FLOWS (Unaudited)
For the six months ended June 30, 1995 1994 ------------ ------------ Cash flows from operating activities: Net earnings $ 1,525,268 $ 1,832,964 Adjustments to reconcile net earnings to net cash provided by operating activities: Gain on mortgage disposition -- (235,873) Changes in assets and liabilities: (Increase) decrease in receivables and other assets (4,368) 61,502 (Decrease) increase in accounts payable and accrued expenses (26,539) 14,858 ------------ ------------ Net cash provided by operating activities 1,494,361 1,673,451 ------------ ------------ Cash flows from investing activities: Proceeds from disposition of insured mortgage -- 8,177,380 Receipt of mortgage principal from scheduled payments 100,415 90,758 ------------ ------------ Net cash provided by investing activities 100,415 8,268,138 ------------ ------------ Cash flows from financing activities: Distributions paid to partners (1,647,806) (12,976,475) ------------ ------------ Net decrease in cash and cash equivalents (53,030) (3,034,886) Cash and cash equivalents, beginning of period 722,986 3,778,696 ------------ ------------ Cash and cash equivalents, end of period $ 669,956 $ 743,810 ============ ============ The accompanying notes are an integral part of these financial statements.
7 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. ORGANIZATION American Insured Mortgage Investors (the Partnership) was formed under the Uniform Limited Partnership Act in the state of California on July 12, 1983. From inception through September 6, 1991, affiliates of Integrated Resources, Inc. served as managing general partner (with a partnership interest of 2.8%), corporate general partner (with a partnership interest of 0.1%) and associate general partner (with a partnership interest of 0.1%). All of the foregoing general partners are sometimes collectively referred to as former general partners. The Partnership Agreement states that the Partnership will terminate on December 31, 2008, unless previously terminated under the provisions of the Partnership Agreement. Effective September 6, 1991, CRIIMI, Inc. (the General Partner) succeeded the former general partners to become the sole general partner of the Partnership. CRIIMI, Inc. is a wholly owned subsidiary of CRIIMI MAE Inc. (CRIIMI MAE), formerly CRI Insured Mortgage Association, Inc. From inception through June 30, 1995, CRIIMI MAE was managed by an adviser whose general partner is C.R.I., Inc. (CRI). However, effective June 30, 1995, CRIIMI MAE became a self-managed and self-administered real estate investment trust (REIT) and, as a result, the adviser no longer advises CRIIMI MAE. AIM Acquisition Partners L.P. (the Advisor) serves as the advisor of the Partnership. The general partner of the Advisor is AIM Acquisition Corporation and the limited partners include an affiliate of CRIIMI MAE (and through June 30, 1995, an affiliate of CRI). Effective September 6, 1991 and through June 30, 1995, a sub-advisory agreement(the Sub-advisory Agreement) existed whereby CRI/AIM Management, Inc. (the Sub-advisor), an affiliate of CRI, managed the Partnership's portfolio. In connection with the transaction in which CRIIMI MAE became a self-managed and self-administered REIT, an affiliate of CRIIMI MAE acquired the Sub-advisory Agreement. As a consequence of this transaction, effective June 30, 1995, CRIIMI MAE Services Limited Partnership, an affiliate of CRIIMI MAE, manages the Partnership's portfolio. These transactions had no effect on the Partnership's financial statements. 2. BASIS OF PRESENTATION In the opinion of the General Partner, the accompanying unaudited financial statements contain all adjustments of a normal recurring nature necessary to present fairly the financial position of the Partnership as of June 30, 1995 and December 31, 1994 and the results of its operations for the three and six months ended June 30, 1995 and 1994, and its cash flows for the six months ended June 30, 1995 and 1994. These unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. While the General Partner believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and the notes to the financial statements included in the Partnership's Annual Report filed on Form 10-K for the year ended December 31, 1994. 8 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 3. INVESTMENT IN FHA-INSURED LOANS As of June 30, 1995 and December 31, 1994, the Partnership's investment in FHA-Insured Loans consisted of four Acquired Insured Mortgages and two Originated Insured Mortgages. As of June 30, 1995 and December 31, 1994, these investments had an aggregate amortized cost of $23,650,467 and $23,708,274, respectively, face value of $26,676,832 and $26,776,001, respectively, and fair value of $27,141,903 and $26,065,185, respectively. In addition to base interest payments under Originated Insured Mortgages, the Partnership is entitled to additional interest based on a percentage of the net cash flow from the underlying development and of the net proceeds from the refinancing, sale or other disposition of the underlying development (referred to as Participations). During the six months ended June 30, 1995 and 1994, the Partnership received $28,524 and $13,010, respectively, from the Participations. During the three months ended June 30, 1995 and 1994, the Partnership received $0 and $13,010, respectively, from the Participations. These amounts, if any, are included in mortgage investment income in the accompanying statements of operations. 4. INVESTMENT IN FHA-INSURED CERTIFICATES As of June 30, 1995 and December 31, 1994, the Partnership's investment in FHA-Insured Certificates consisted of nine Acquired Insured Mortgages with an aggregate amortized cost of $11,463,665 and $11,506,273, respectively, face value of $14,108,399 and $14,190,281, respectively, and fair value of $14,281,840 and $13,355,026, respectively. 9 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 5. DISTRIBUTIONS TO UNITHOLDERS The distributions paid or accrued to Unitholders on a per Unit basis for the six months ended June 30, 1995 and 1994 are as follows:
Quarter Ended 1995 1994 ------------- -------- -------- March 31, $ 0.08 $ 0.89(1) June 30, 0.08 0.08 -------- -------- Total $ 0.16 $ 0.97 ======== ======== (1) This includes a special distribution of $0.81 per Unit comprised of: (i) $0.80 per Unit return of capital and capital gain from the disposition of the insured mortgage on Hidden Oaks Apartments and (ii) $0.01 per Unit of previously accrued but undistributed interest received from the insured mortgage on Creekside Village.
The basis for paying distributions to Unitholders is net proceeds from mortgage dispositions, if any, and cash flow from operations, which includes regular interest income and principal from Insured Mortgages. Although Insured Mortgages yield a fixed monthly mortgage payment once purchased, the cash distributions paid to the Unitholders will vary during each period due to (1) the fluctuating yields in the short-term money market where the monthly mortgage payments received are temporarily invested prior to the payment of quarterly distributions, (2) the reduction in the asset base due to monthly mortgage payments received or mortgage dispositions, (3) variations in the cash flow attributable to the delinquency or default of Insured Mortgages and (4) changes in the Partnership's operating expenses. 10 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 6. TRANSACTIONS WITH RELATED PARTIES The General Partner and certain affiliated entities have, during the three and six months ended June 30, 1995 and 1994, earned or received compensation or payments for services from the Partnership as follows:
COMPENSATION PAID OR ACCRUED TO RELATED PARTIES ---------------------------------------------- For the three months For the six months Capacity in Which ended June 30, ended June 30, Name of Recipient Served/Item 1995 1994 1995 1994 ----------------- ---------------------------- -------- -------- -------- -------- CRIIMI, Inc. General Partner/Distribution $ 23,893 $ 23,893 $ 47,786 $289,705(3) AIM Acquisition Advisor/Asset Management Fee 85,773 85,773 171,546 184,334 Partners, L.P.(1) CRI(2) Affiliate of General Partner/ Expense Reimbursement 17,375 19,709 32,910 38,005 (1) Of the amounts paid to the Advisor, the Sub-advisor, CRI/AIM Management, Inc., earned a fee equal to $25,278 and $25,278, or .28% of Total Invested Assets, for the three months ended June 30, 1995 and 1994, respectively. The Sub-advisor earned a fee equal to $50,556 and $54,324, or .28% of Total Invested Assets, for the six months ended June 30, 1995 and 1994, respectively. As discussed in Note 1, above, effective June 30, 1995, CRIIMI MAE Services Limited Partnership will serve as the Sub-advisor. No amounts were paid to CRIIMI MAE Services Limited Partnership during the six months ended June 30, 1995. (2) Prior to June 30, 1995, these amounts were paid to CRI as reimbursement for expenses incurred on behalf of the General Partner and the Partnership. The transaction in which CRIIMI MAE became a self-managed and self-administered REIT, discussed in Note 1, has no impact on the payments required to be made by the Partnership, other than the expense reimbursement previously paid by the Partnership to CRI in connection with the provision of services by the Sub-advisor will be paid to a wholly-owned subsidiary of CRIIMI MAE, which is the General Partner of CRIIMI MAE Services Limited Partnership, effective June 30, 1995. No amounts were paid to CRIIMI MAE or its affiliates during the six months ended June 30, 1995. (3) This amount includes a special distribution as described above in Note 5.
11 PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General ------- As of June 30, 1995, the Partnership had invested in 15 Insured Mortgages, as discussed further below, with an aggregate amortized cost of approximately $35 million, face value of approximately $41 million and fair value of approximately $41 million. Investment in FHA-Insured Loans -------------------------------- As of June 30, 1995 and December 31, 1994, the Partnership's investment in FHA-Insured Loans consisted of four Acquired Insured Mortgages and two Originated Insured Mortgages. As of June 30, 1995 and December 31, 1994, these investments had an aggregate amortized cost of $23,650,467 and $23,708,274, respectively, face value of $26,676,832 and $26,776,001, respectively, and fair value of $27,141,903 and $26,065,185, respectively. In addition to base interest payments under Originated Insured Mortgages, the Partnership is entitled to additional interest based on a percentage of the net cash flow from the underlying development and of the net proceeds from the refinancing, sale or other disposition of the underlying development (referred to as Participations). During the six months ended June 30, 1995 and 1994, the Partnership received $28,524 and $13,010, respectively, from the Participations. During the three months ended June 30, 1995 and 1994, the Partnership received $0 and $13,010, respectively, from the Participations. These amounts, if any, are included in mortgage investment income in the accompanying statements of operations. Investment in FHA-Insured Certificates -------------------------------------- As of June 30, 1995 and December 31, 1994, the Partnership's investment in FHA-Insured Certificates consisted of nine Acquired Insured Mortgages with an aggregate amortized cost of $11,463,665 and $11,506,273, respectively, face value of $14,108,399 and $14,190,281, respectively, and fair value of $14,281,840 and $13,355,026, respectively. Results of Operations --------------------- Net earnings decreased for the six months ended June 30, 1995 as compared to the corresponding period in 1994 primarily due to the gain recognized on the disposition of the mortgage on Hidden Oaks in February 1994. Also contributing to this decrease in net earnings was the decrease in mortgage investment income as a result of this mortgage disposition. Net earnings did not change significantly for the three months ended June 30, 1995 as compared to the corresponding period in 1994. Interest and other income decreased for the three and six months ended June 30, 1995 as compared to the corresponding periods in 1994 primarily due to the short-term investment of disposition proceeds received during February 1994 prior to the distribution to Unitholders in May 1994. Asset management fees decreased for the six months ended June 30, 1995 as compared to the corresponding period in 1994 as a result of the reduction in the mortgage base, as discussed above. General and administrative expenses decreased for the three and six months ended June 30, 1995, as compared to the corresponding periods in 1994. These decreases were due primarily to decreases in investor services expenses and annual and quarterly reporting expenses resulting primarily from a reduction in the number of Unitholders. 12 PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Gain on mortgage disposition decreased for the six months ended June 30, 1995 as compared to the corresponding period in 1994. Gains and losses on mortgage dispositions are based on the number, carrying amounts and proceeds of mortgage investments disposed of during the period. During the six months ended June 30, 1994, the mortgage on Hidden Oaks was prepaid, resulting in a gain of $235,873. The Partnership did not dispose of any mortgage investments during the six months ended June 30, 1995. Liquidity and Capital Resources ------------------------------- The Partnership's operating cash receipts, derived from payments of principal and interest on Insured Mortgages, plus cash receipts from interest on short-term investments, were sufficient for the six months ended June 30, 1995 to meet operating requirements. The basis for paying distributions to Unitholders is net proceeds from insured mortgage dispositions, if any, and cash flow from operations, which includes regular interest income and principal from Insured Mortgages. Although Insured Mortgages yield a fixed monthly mortgage payment once purchased, the cash distributions paid to the Unitholders will vary during each period due to (1) the fluctuating yields in the short-term money market where the monthly mortgage payments received are temporarily invested prior to the payment of quarterly distributions, (2) the reduction in the asset base due to monthly mortgage payments received or mortgage dispositions, (3) variations in the cash flow attributable to the delinquency or default of Insured Mortgages and (4) changes in the Partnership's operating expenses. Net cash provided by operating activities decreased for the six months ended June 30, 1995 as compared to the corresponding period in 1994 primarily due to a decrease in mortgage investment income and interest and other income, as discussed above. Also contributing to the decrease in net cash provided by operations was a decrease in receivables and other assets in 1994 as a result of the prepayment of the mortgage on Hidden Oaks during the first quarter of 1994. Net cash provided by investing activities decreased for the six months ended June 30, 1995 as compared to the corresponding period in 1994 primarily due to the receipt in February 1994 of net proceeds of approximately $8.2 million from the prepayment of the insured mortgage on Hidden Oaks Apartments. Net cash used in financing activities decreased for the six months ended June 30, 1995 as compared to the corresponding period in 1994 primarily due to the special distributions paid to Unitholders during the first and second quarters of 1994 of net proceeds received in 1994 from the prepayment of the mortgage on Hidden Oaks Apartments and of net proceeds received in 1993 from the sale of the defaulted mortgages on Chapelgate Apartments and Cumberland Village. This compares to the distribution to Unitholders during the first two quarters of 1995 of regular cash flow from the fourth quarter of 1994 and the first quarter of 1995. 13 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed with the Securities and Exchange Commission during the quarter ended June 30, 1995. The exhibits filed as part of this report are listed below: Exhibit No. Description ------------- ----------------------- 27 Financial Data Schedule 14 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 thereunto duly authorized. AMERICAN INSURED MORTGAGE INVESTORS (Registrant) By: CRIIMI, Inc. General Partner August 8, 1995 By: /s/ Cynthia O. Azzara -------------- ------------------------ Date Cynthia O. Azzara Principal Financial and Accounting Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SECOND QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q. 1,000 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 670 14,282 24,029 0 0 0 0 0 38,981 0 0 0 0 0 38,087 38,981 0 1,827 0 0 302 0 0 1,525 0 1,525 0 0 0 1,525 .15 0