-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KwCxIWPS812Bll4rl6MJ0X/3fPrQWhXDPWoOkJLPkLCQFsQ0nAdP6XQ/q8OT34a8 febCjox5hsHVxn8EyF9FMQ== 0000724533-96-000003.txt : 19960807 0000724533-96-000003.hdr.sgml : 19960807 ACCESSION NUMBER: 0000724533-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960806 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: 96604271 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 AIM84 10-Q 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, 1996 -------------- 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 5, 1996, 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, 1996 PAGE ---- PART I. Financial Information (Unaudited) Item 1. Financial Statements Balance Sheets - June 30, 1996 (unaudited) and December 31, 1995.................... 3 Statements of Operations - for the three and six months ended June 30, 1996 and 1995 (unaudited)......................... 4 Statement of Changes in Partners' Equity - for the six months ended June 30, 1996 (unaudited)......................... 5 Statements of Cash Flows - for the six months ended June 30, 1996 and 1995 (unaudited).............................. 6 Notes to Financial Statements.............. 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........... 13 Signature............................................ 14 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS BALANCE SHEETS
June 30, December 31, 1996 1995 ------------- ------------ (Unaudited) ASSETS Investment in FHA-Insured Loans, at amortized cost, net of unamortized discount: Originated insured mortgages $ 14,316,789 $ 14,533,066 Acquired insured mortgages 9,023,284 9,056,545 ------------ ------------ 23,340,073 23,589,611 Investment in FHA-Insured Certificates, at fair value: Acquired insured mortgages 13,975,207 14,774,772 Cash and cash equivalents 654,809 673,733 Receivables and other assets 367,712 377,323 ------------ ------------ Total assets $ 38,337,801 $ 39,415,439 ============ ============ LIABILITIES AND PARTNERS' EQUITY Distributions payable $ 823,903 $ 823,903 Accounts payable and accrued expenses 94,334 98,292 ------------ ------------ Total liabilities 918,237 922,195 ------------ ------------ Partners' equity: Limited partners' equity 39,747,934 40,059,771 General partner's deficit (4,931,714) (4,922,401) Unrealized gains on investment in FHA-Insured Certificates 2,603,344 3,355,874 ------------ ------------ Total partners' equity 37,419,564 38,493,244 ------------ ------------ Total liabilities and partners' equity $ 38,337,801 $ 39,415,439 ============ ============ 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, ---------------------------- ---------------------------- 1996 1995 1996 1995 ------------ ------------ ------------ ------------ Income: Mortgage investment income $ 851,160 $ 888,144 $ 1,747,454 $ 1,806,082 Interest and other income 7,575 11,459 16,997 20,723 ------------ ------------ ------------ ------------ 858,735 899,603 1,764,451 1,826,805 ------------ ------------ ------------ ------------ Expenses: Asset management fee to related parties 85,773 85,773 171,546 171,546 General and administrative 54,308 47,029 119,785 129,991 ------------ ------------ ------------ ------------ 140,081 132,802 291,331 301,537 ------------ ------------ ------------ ------------ Earnings before loss on mortgage modification 718,654 766,801 1,473,120 1,525,268 Loss on mortgage modification (146,464) -- (146,464) -- ------------ ------------ ------------ ------------ Net earnings $ 572,190 $ 766,801 $ 1,326,656 $ 1,525,268 ============ ============ ============ ============ Net earnings allocated to: Limited partners - 97.1% $ 555,597 $ 744,564 $ 1,288,183 $ 1,481,035 General partner - 2.9% 16,593 22,237 38,473 44,233 ------------ ----------- ------------ ------------ $ 572,190 $ 766,801 $ 1,326,656 $ 1,525,268 ============ ============ ============ ============ Net earnings per Unit of limited partnership interest $ 0.06 $ 0.07 $ 0.13 $ 0.15 ============ ============ ============ ============ 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, 1996 (Unaudited)
Unrealized Gains on Investment in General Limited FHA-Insured Partner Partners Certificates Total ------------ ------------ -------------- ------------- Balance, December 31, 1995 $ (4,922,401) $ 40,059,771 $ 3,355,874 $ 38,493,244 Net earnings 38,473 1,288,183 -- 1,326,656 Distributions paid or accrued of $0.16 per Unit (47,786) (1,600,020) -- (1,647,806) Adjustment to unrealized gains on investment in FHA-Insured Certificates -- -- (752,530) (752,530) ------------ ------------- ------------- ------------- Balance, June 30, 1996 $ (4,931,714) $ 39,747,934 $ 2,603,344 $ 37,419,564 ============ ============= ============= ============= Limited Partnership Units outstanding - June 30, 1996 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, 1996 1995 ------------ ------------ Cash flows from operating activities: Net earnings $ 1,326,656 $ 1,525,268 Adjustments to reconcile net earnings to net cash provided by operating activities: Loss on modification of insured mortgage 146,464 -- Changes in assets and liabilities: Decrease (increase) in receivables and other assets 9,611 (4,368) Decrease in accounts payable and accrued expenses (3,958) (26,539) ------------ ------------ Net cash provided by operating activities 1,478,773 1,494,361 ------------ ------------ Cash flows from investing activities: Proceeds from modification of insured mortgage 35,748 -- Receipt of mortgage principal from scheduled payments 114,361 100,415 ------------ ------------ Net cash provided by investing activities 150,109 100,415 ------------ ------------ Cash flows from financing activities: Distributions paid to partners (1,647,806) (1,647,806) ------------ ------------ Net cash used in financing activities (1,647,806) (1,647,806) ------------ ------------ Net decrease in cash and cash equivalents (18,924) (53,030) Cash and cash equivalents, beginning of period 673,733 722,986 ------------ ------------ Cash and cash equivalents, end of period $ 654,809 $ 669,956 ============ ============ 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. 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). 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 C.R.I., Inc. (CRI)). Effective September 6, 1991 and through June 30, 1995, a sub-advisory agreement (the Sub-advisory Agreement) existed whereby CRI/AIM Management, Inc., an affiliate of CRI, managed the Partnership's portfolio. In connection with the transaction in which CRIIMI MAE became a self-administered real estate investment trust (REIT) on June 30, 1995, CRIIMI MAE Services Limited Partnership, an affiliate of CRIIMI MAE, acquired the Sub-advisory Agreement. As a result of this transaction, CRIIMI MAE Services Limited Partnership manages the Partnership's portfolio. These transactions had no effect on the Partnership's financial statements. The Partnership's investment in mortgages consists of participation certificates evidencing a 100% undivided beneficial interest in government insured multifamily mortgages issued or sold pursuant to Federal Housing Administration (FHA) programs (FHA-Insured Certificates) and FHA-insured mortgage loans (FHA-Insured Loans). The mortgages underlying the FHA-Insured Certificates and FHA-Insured Loans are non-recourse first liens on multifamily residential developments. 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, 1996 and December 31, 1995 and the results of its operations for the three and six months ended June 30, 1996 and 1995, and its cash flows for the six months ended June 30, 1996 and 1995. 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, 1995. 8 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 3. INVESTMENT IN FHA-INSURED LOANS As of June 30, 1996 and December 31, 1995, the Partnership's investment in FHA-Insured Loans consisted of four acquired insured mortgages and two originated insured mortgages. As of June 30, 1996 and December 31, 1995, these investments had an aggregate amortized cost of $23,340,073 and $23,589,611, respectively, face value of $26,465,984 and $26,573,553, respectively, and fair value of $26,596,082 and $27,625,663, respectively. All of the FHA-Insured Loans are current with respect to payment of principal and interest as of July 31, 1996. In May 1996, the mortgage note on Creekside Village was amended to reduce the mortgage interest rate from 11.50% to 7.75%. In connection with this modification, the Partnership recognized a loss of $146,464 on the accompanying statements of operations for the three and six months ended June 30, 1996, primarily representing the unamortized balance of acquisition and closing costs paid in connection with the origination of this mortgage. 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, 1996 and 1995, the Partnership received $12,158 and $28,524, respectively, from the Participations. The Partnership did not receive any monies from the Participations during the three months ended June 30, 1996 and 1995. These amounts, if any, are included in mortgage investment income on the accompanying statements of operations. 4. INVESTMENT IN FHA-INSURED CERTIFICATES As of June 30, 1996 and December 31, 1995, the Partnership's investment in FHA-Insured Certificates consisted of nine acquired insured mortgages with an aggregate amortized cost of $11,371,863 and $11,418,898, respectively, face value of $13,935,161 and $14,023,399, respectively, and fair value of $13,975,207 and $14,774,772, respectively. All of the FHA-Insured Certificates are current with respect to payment of principal and interest as of July 31, 1996. 5. DISTRIBUTIONS TO UNITHOLDERS The distributions paid or accrued to Unitholders on a per Unit basis for the three and six months ended June 30, 1996 and 1995 are as follows:
Quarter Ended 1996 1995 - ------------- -------- -------- March 31, $ 0.08 $ 0.08 June 30, 0.08 0.08 -------- -------- $ 0.16 $ 0.16 ======== ========
9 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 5. DISTRIBUTIONS TO UNITHOLDERS - Continued The basis for paying distributions to Unitholders is net proceeds from mortgage dispositions 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. 6. TRANSACTIONS WITH RELATED PARTIES The General Partner and certain affiliated entities have, during the three and six months ended June 30, 1996 and 1995, earned or received compensation or payments for services from the Partnership as follows: 10 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 6. TRANSACTIONS WITH RELATED PARTIES - Continued
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 1996 1995 1996 1995 - ----------------- ---------------------------- -------- -------- -------- -------- CRIIMI, Inc. General Partner/Distribution $ 23,893 $ 23,893 $ 47,786 $ 47,786 AIM Acquisition Advisor/Asset Management Fee 85,773 85,773 171,546 171,546 Partners, L.P.(1) CRI(2) Affiliate of General Partner/ Expense Reimbursement -- 17,375 -- 32,910 CRIIMI MAE Management, Affiliate of General Partner/ 23,860 -- 32,829 -- Inc. (2) Expense Reimbursement (1) The Advisor, pursuant to the Partnership Agreement, effective July 12, 1983, is entitled to an Asset Management Fee equal to 0.95% of Total Invested Assets (as defined in the Partnership Agreement). The sub-advisor to the Partnership (the Sub-advisor) is entitled to a fee of 0.28% of Total Invested Assets. CRI/AIM Management, Inc., which acted as the Sub-advisor through June 30, 1995, earned a fee equal to $25,278 and $50,556, for the three and six months ended June 30, 1995, respectively. CRIIMI MAE Services Limited Partnership now serves as the Sub-advisor. Of the amounts paid to the Advisor, CRIIMI MAE Services Limited Partnership earned a fee equal to $25,278 and $50,556 for the three and six months ended June 30, 1996, respectively. (2) Prior to CRIIMI MAE becoming a self-administered REIT, amounts were paid to CRI as reimbursement for expenses incurred prior to June 30, 1995 on behalf of the General Partner and the Partnership. As discussed in Note 1, the transaction in which CRIIMI MAE became a self-administered REIT has no impact on the payments required to be made by the Partnership, other than that the expense reimbursement previously paid by the Partnership to CRI in connection with the provision of services by the Sub-advisor are, effective June 30, 1995, paid to a wholly-owned subsidiary of CRIIMI MAE, CRIIMI MAE Management, Inc.
11 PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction - ------------ The Partnership's Management's Discussion and Analysis of Financial Condition and Results of Operations contains statements that may be considered forward looking. These statements contain a number of risks and uncertainties as discussed herein and in the Partnership's reports filed with the Securities and Exchange Commission that could cause actual results to differ materially. General - ------- As of June 30, 1996, the Partnership had invested in 15 insured mortgages, with an aggregate amortized cost of approximately $35 million, face value of approximately $40 million and fair value of approximately $41 million. All of the Partnership's mortgage investments are current with respect to payment of principal and interest as of July 31, 1996. Results of Operations - --------------------- Net earnings decreased for the three and six months ended June 30, 1996 as compared to the corresponding periods in 1995 primarily due to the loss recognized on the modification of the mortgage on Creekside Village, as discussed below. Mortgage investment income and interest and other income did not change significantly for the three and six months ended June 30, 1996 as compared to the corresponding periods in 1995. Asset management fees did not change for the three and six months ended June 30, 1996 as compared to the corresponding periods in 1995. General and administrative expenses increased for the three months ended June 30, 1996 as compared to the corresponding period in 1995 primarily due to timing differences for certain expenses. General and administrative expenses decreased for the six months ended June 30, 1996 as compared to the corresponding period in 1995. These decreases were due primarily to decreases in investor services expenses, annual and quarterly reporting expenses and payroll. In May 1996, the mortgage note on Creekside Village was amended to reduce the mortgage interest rate from 11.50% to 7.75%. In connection with this modification, the Partnership recognized a loss of $146,464 on the accompanying statements of operations for the three and six months ended June 30, 1996, primarily representing the unamortized balance of acquisition and closing costs paid in connection with the origination of this mortgage. The Partnership did not dispose of or modify any mortgage investments during the three and 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 and proceeds from mortgage modifications, were sufficient for the six months ended June 30, 1996 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 12 PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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 did not change significantly for the six months ended June 30, 1996 as compared to the corresponding period in 1995. Net cash provided by investing activities increased for the six months ended June 30, 1996 as compared to the corresponding period in 1995 primarily due to receipt of proceeds from the modification of the mortgage on Creekside Village, as discussed above. Net cash used in financing activities did not change for the six months ended June 30, 1996 as compared to the corresponding period in 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, 1996. 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 5, 1996 /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 QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 655 13,975 23,708 0 0 0 0 0 38,338 918 0 0 0 0 37,420 38,338 0 1,764 0 0 291 146 0 1,327 0 1,327 0 0 0 1,327 .13 0
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