-----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, Uy5yZ6wWOopMeTOefzl1fUz+Au+hIjRzaf43U3lwgF3K5xKg4fMbdWGjNdrtmx6U DvVtaX6fbvNtRxrUaY6piA== 0000724533-98-000003.txt : 19980814 0000724533-98-000003.hdr.sgml : 19980814 ACCESSION NUMBER: 0000724533-98-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 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: SEC FILE NUMBER: 001-11060 FILM NUMBER: 98684690 BUSINESS ADDRESS: STREET 1: 11200 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 BUSINESS PHONE: 3012310275 MAIL ADDRESS: STREET 1: 11200 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 10-Q 1 AIM 84 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, 1998 ------------------ 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 June 30, 1998, 10,000,000 depository units of limited partnership interest were outstanding. 2 AMERICAN INSURED MORTGAGE INVESTORS INDEX TO FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1998 PAGE ---- PART I. Financial Information (Unaudited) Item 1. Financial Statements Balance Sheets - June 30, 1998 (unaudited) and December 31, 1997.................... 3 Statements of Operations - for the three and six months ended June 30, 1998 and 1997 (unaudited).............................. 4 Statement of Changes in Partners' Equity - for the six months ended June 30, 1998 (unaudited)......................... 5 Statements of Cash Flows - for the six months ended June 30, 1998 and 1997 (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, 1998 1997 ------------- ------------ (Unaudited) ASSETS Investment in FHA-Insured Loans, at amortized cost, net of unamortized discount: Acquired Insured Mortgages $ 7,934,809 $ 8,912,223 Originated Insured Mortgages 14,136,583 14,184,505 ------------ ------------ 22,071,392 23,096,728 Investment in FHA-Insured Certificates, at fair value 13,970,760 14,178,168 Cash and cash equivalents 855,661 878,867 Receivables and other assets 1,585,682 397,201 ------------ ------------ Total assets $ 38,483,495 $ 38,550,964 ============ ============ LIABILITIES AND PARTNERS' EQUITY Distributions payable $ 720,915 $ 823,903 Accounts payable and accrued expenses 45,436 66,482 ------------ ------------ Total liabilities 766,351 890,385 ------------ ------------ Partners' equity: Limited partners' equity 39,834,809 39,633,683 General partner's deficit (4,929,121) (4,935,128) Unrealized gains on investment in FHA-Insured Certificates 2,811,456 2,962,024 ------------ ------------ Total partners' equity 37,717,144 37,660,579 ------------ ------------ Total liabilities and partners' equity $ 38,483,495 $ 38,550,964 ============ ============ 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, ---------------------------- ---------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------ Income: Mortgage investment income $ 799,377 $ 829,454 $ 1,673,496 $ 1,722,483 Interest and other income 37,801 10,500 50,681 18,093 ------------ ------------ ------------ ------------ 837,178 839,954 1,724,177 1,740,576 ------------ ------------ ------------ ------------ Expenses: Asset management fee to related parties 85,773 85,773 171,546 171,546 General and administrative 53,329 52,910 103,742 109,920 ------------ ------------ ------------ ----------- 139,102 138,683 275,288 281,466 ------------ ------------ ------------ ----------- Earnings before gain on mortgage disposition 698,076 701,271 1,448,889 1,459,110 Gain on mortgage disposition -- -- 200,074 -- ------------ ------------ ------------ ----------- Net earnings $ 698,076 $ 701,271 $ 1,648,963 $ 1,459,110 ============ ============ ============ =========== Net earnings allocated to: Limited partners - 97.1% $ 677,832 $ 680,934 $ 1,601,143 $ 1,416,796 General partner - 2.9% 20,244 20,337 47,820 42,314 ------------ ------------ ------------ ----------- $ 698,076 $ 701,271 $ 1,648,963 $ 1,459,110 ============ ============ ============ =========== Net earnings per limited partnership Unit-Basic $ 0.07 $ 0.07 $ 0.16 $ 0.14 ============ ============ ============ =========== 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, 1998 (Unaudited)
Unrealized Gains on Investment in General Limited FHA-Insured Partner Partners Certificates Total ------------ ------------ -------------- ------------- Balance, December 31, 1997 $ (4,935,128) $ 39,633,683 $ 2,962,024 $ 37,660,579 Net earnings 47,820 1,601,143 -- 1,648,963 Distributions paid or accrued of $0.14 per Unit (41,813) (1,400,017) -- (1,441,830) Adjustment to unrealized gains on investment in FHA-Insured Certificates -- -- (150,568) (150,568) ------------ ------------ ------------- ------------- Balance, June 30, 1998 $ (4,929,121) $ 39,834,809 $ 2,811,456 $ 37,717,144 ============ ============ ============= ============= Limited Partnership Units outstanding - Basic, June 30, 1998 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, 1998 1997 ------------ ------------ Cash flows from operating activities: Net earnings $ 1,648,963 $ 1,459,110 Adjustments to reconcile net earnings to net cash provided by operating activities: Gain on disposition of insured mortgage (200,074) -- Changes in assets and liabilities: (Increase) decrease in receivables and other assets (40,432) 14,262 (Decrease) increase in accounts payable and accrued expenses (21,046) 2,214 ------------ ------------ Net cash provided by operating activities 1,387,411 1,475,586 ------------ ------------ Cash flows from investing activities: Receipt of mortgage principal from scheduled payments 134,201 132,542 ------------ ------------ Net cash provided by investing activities 134,201 132,542 ------------ ------------ Cash flows from financing activities: Distributions paid to partners (1,544,818) (1,441,832) ------------ ------------ Net cash used in financing activities (1,544,818) (1,441,832) ------------ ------------ Net (decrease) increase in cash and cash equivalents (23,206) 166,296 ------------ ------------ Cash and cash equivalents, beginning of period 878,867 656,051 ------------ ------------ Cash and cash equivalents, end of period $ 855,661 $ 822,347 ============ ============ Non cash investing activity: 50% share of debenture received from HUD in exchange for the mortgage on Portervillage I Apartments (Debenture is held by an affiliate, AIM 85) $ 1,148,049 -- 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). 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, and together with FHA-Insured Certificates referred to herein as Insured Mortgages). 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, 1998 and December 31, 1997, the results of its operations for the three and six months ended June 30, 1998 and 1997 and its cash flows for the six months ended June 30, 1998 and 1997. 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, these financial statements should 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, 1997. New Accounting Standards ------------------------ During 1997 FASB issued SFAS No. 130 "Reporting Comprehensive Income" (FAS 130). FAS 130 states that all items that are required to be recognized under accounting standards as components of comprehensive income are to be reported in a separate statement of income. This would include net income as currently reported by the Partnership adjusted for unrealized gains and losses related to the Partnership's mortgages accounted for as "available for sale". FAS 130 was adopted by the Partnership January 1, 1998. For the three and six months ended June 30, 1998, comprehensive income was $520,729 and $1,498,395, respectively. For the three and six months ended June 30, 1997, comprehensive income was $800,480 and $1,168,669, respectively. 8 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 3. INVESTMENT IN FHA-INSURED LOANS Listed below is the Partnership's aggregate investment in FHA-Insured Loans as of June 30, 1998 and December 31, 1997:
June 30, December 31, 1998 1997 ------------- ------------ Number of Acquired Insured Mortgages (1) 3 4 Originated Insured Mortgages 2 2 Amortized Cost $ 22,071,392 $ 23,096,728 Face Value 24,803,213 26,077,186 Fair Value 25,374,100 26,840,133 (1) In March 1998, HUD issued assignment proceeds in the form of a 9.5% debenture for the mortgage on Portervillage I Apartments. This mortgage was owned 50% by AIM 84 and 50% by an affiliate of the partnership, American Insured Mortgage Investors - Series 85, L.P. (AIM 85). The debenture, with a face value of $2,296,098, was issued to AIM 85, with interest payable semi-annually on January 1 and July 1. The Partnership expects to receive net proceeds of approximately $1.1 million and has recognized a gain of approximately $200,000 for the six months ended June 30, 1998. The net proceeds and accrued interest are included on the Balance Sheet in Receivables and other assets. A distribution will be declared in the quarter in which cash is received for the debenture.
All of the FHA-Insured Loans are current with respect to payment of principal and interest as of August 1, 1998. In addition to base interest payments from 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 three and six months ended June 30, 1998, the Partnership received $0 and $52,526, respectively, from the Participations. These amounts are included in mortgage investment income on the accompanying statements of operations. For the three and six months ended June 30, 1997, the Partnership received $0 and $61,988, respectively from the Participations. 9 AMERICAN INSURED MORTGAGE INVESTORS NOTES TO FINANCIAL STATEMENTS (Unaudited) 4. INVESTMENT IN FHA-INSURED CERTIFICATES Listed below is the Partnership's aggregate investment in FHA-Insured Certificates as of June 30, 1998 and December 31, 1997:
June 30, December 31, 1998 1997 ------------- ------------ Number of mortgages 9 9 Amortized Cost $ 11,159,302 $ 11,216,144 Face Value 13,546,494 13,648,992 Fair Value 13,970,760 14,178,168
All of the FHA-Insured Certificates were current with respect to the payment of principal and interest as of August 1, 1998. 5. DISTRIBUTIONS TO UNITHOLDERS The distributions paid or accrued to Unitholders on a per Unit basis for the six months ended June 30, 1998 and 1997 are as follows:
Quarter Ended 1998 1997 - ------------- -------- -------- March 31, $ 0.07 $ 0.07 June 30, 0.07 0.07 -------- -------- $ 0.14 $ 0.14 ======== ========
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 payment receipts are temporarily invested prior to the payment of quarterly distributions, (2) the reduction in the asset base resulting from 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 six months ended June 30, 1998 and 1997, 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 1998 1997 1998 1997 - ----------------- ---------------------------- -------- -------- -------- -------- CRIIMI, Inc. General Partner/Distribution $ 20,906 $ 20,907 $ 41,813 $ 41,814 AIM Acquisition Advisor/Asset Management Fee 85,773 85,773 171,546 171,546 Partners, L.P.(1) CRIIMI MAE Management, Affiliate of General Partner/ 11,323 13,286 18,569 23,280 Inc. Expense Reimbursement (1) The Advisor, pursuant to the Partnership Agreement is entitled to an Asset Management Fee equal to 0.95% of Total Invested Assets (as defined in the Partnership Agreement). CRIIMI MAE Services Limited Partnership, the sub-advisor to the Partnership (the Sub-advisor) is entitled to a fee of 0.28% of Total Invested Assets. Of the amounts paid to the Advisor, the Sub-advisor earned a fee equal to $25,278 and $50,556 for the three and six months ended June 30, 1998, respectively, and a fee equal to $25,278 and $50,556 for the three and six months ended June 30, 1997, respectively. The Sub-advisor is an affiliate of CRIIMI MAE.
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 other reports filed with the Securities and Exchange Commission that could cause actual results to differ materially. See Item 1, "Forward-Looking Statements" in the Partnership's Annual Report for 1997 on Form 10-K for a more detailed discussion of such risks and uncertainties. General - ------- As of June 30, 1998, the Partnership had invested in 14 Insured Mortgage Investments, with an aggregate amortized cost of approximately $33.2 million, face value of approximately $38.3 million and fair value of approximately $39.3 million. All of the mortgage investments are current with respect to payment of principal and interest as of August 1, 1998. Results of Operations - --------------------- Net earnings increased for the six months ended June 30, 1998, as compared to the corresponding period in 1997, primarily due to the gain recognized on the disposition of the mortgage on Portervillage I Apartments. Net earnings before gain on mortgage disposition did not change significantly for the three and six months ended June 30, 1998, as compared to the corresponding periods in 1997. In March 1998, HUD issued assignment proceeds in the form of a 9.5% debenture for the mortgage on Portervillage I Apartments. This mortgage was owned 50% by AIM 84 and 50% by an affiliate of the partnership, American Insured Mortgage Investors - Series 85, L.P. (AIM 85). The debenture, with a face value of $2,296,098, was issued to AIM 85, with interest payable semi-annually on January 1 and July 1. The Partnership expects to receive net proceeds of approximately $1.1 million and has recognized a gain of approximately $200,000 for the six months ended June 30, 1998. The net proceeds and accrued interest are included on the Balance Sheet in Receivables and other assets. A distribution will be declared in the quarter in which cash is received for the debenture. 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, 1998 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 payment receipts are temporarily invested prior to the payment of quarterly distributions, (2) the reduction in the asset base resulting from 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. 12 PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Net cash provided by operating activities decreased slightly for the six months ended June 30, 1998, as compared to the corresponding period in 1997. This was primarily due to an increase in accrued interest due on the 9.5% debenture, as previously discussed. Net cash used in financing activities increased for the six months ended June 30, 1998, as compared to the corresponding period in 1997, primarily resulting from an increase in distributions paid to partners. 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, 1998. 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 /s/ August 13, 1998 /s/ Cynthia O. Azzara - ------------------- ------------------------ Date Cynthia O. Azzara Principal Financial and Accounting Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE QUARTERLY REPORT ON FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q. 1,000 6-MOS DEC-31-1997 JAN-01-1998 JUN-30-1998 856 13,971 23,656 0 0 0 0 0 38,483 766 0 0 0 0 37,717 38,483 0 1,924 0 0 275 0 0 1,649 0 1,649 0 0 0 1,649 .16 0
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