-----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, IQ4RXsmTCS5xb+jVEquLfTnnbbgfwSjAgvZAkbapGsxVmAQcH4Hm4QB5LXl4R6o3 F+b35SwOibBSZlxufzKALw== 0000724533-97-000003.txt : 19970808 0000724533-97-000003.hdr.sgml : 19970808 ACCESSION NUMBER: 0000724533-97-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970807 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: 97653227 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 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, 1997 ------------- 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, 1997, 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, 1997 PAGE ---- PART I. Financial Information (Unaudited) Item 1. Financial Statements Balance Sheets - June 30, 1997 (unaudited) and December 31, 1996.................... 3 Statements of Operations - for the three and six months ended June 30, 1997 and 1996 (unaudited).............................. 4 Statement of Changes in Partners' Equity - for the six months ended June 30, 1997 (unaudited)......................... 5 Statements of Cash Flows - for the six months ended June 30, 1997 and 1996 (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, 1997 1996 ------------- ------------ (Unaudited) ASSETS Investment in FHA-Insured Loans, at amortized cost, net of unamortized discount: Acquired Insured Mortgages $ 8,951,224 $ 8,988,210 Originated Insured Mortgages 14,230,460 14,274,528 ------------ ------------ 23,181,684 23,262,738 Investment in FHA-Insured Certificates, at fair value 13,763,831 14,105,760 Cash and cash equivalents 822,347 656,051 Receivables and other assets 346,378 360,640 ------------ ------------ Total assets $ 38,114,240 $ 38,385,189 ============ ============ LIABILITIES AND PARTNERS' EQUITY Distributions payable $ 720,916 $ 720,916 Accounts payable and accrued expenses 76,687 74,473 ------------ ------------ Total liabilities 797,603 795,389 ------------ ------------ Partners' equity: Limited partners' equity 39,754,563 39,737,785 General partner's deficit (4,931,518) (4,932,018) Unrealized gains on investment in FHA-Insured Certificates 2,493,592 2,784,033 ------------ ------------ Total partners' equity 37,316,637 37,589,800 ------------ ------------ Total liabilities and partners' equity $ 38,114,240 $ 38,385,189 ============ ============ 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, ---------------------------- ---------------------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Income: Mortgage investment income $ 829,454 $ 851,160 $ 1,722,483 $ 1,747,454 Interest and other income 10,500 7,575 18,093 16,997 ------------ ------------ ------------ ------------ 839,954 858,735 1,740,576 1,764,451 ------------ ------------ ------------ ------------ Expenses: Asset management fee to related parties 85,773 85,773 171,546 171,546 General and administrative 52,910 54,308 109,920 119,785 ------------ ------------ ------------ ------------ 138,683 140,081 281,466 291,331 ------------ ------------ ------------ ------------ Earnings before loss on mortgage modification 701,271 718,654 1,459,110 1,473,120 Loss on mortgage modification -- (146,464) -- (146,464) ------------ ------------ ------------ ------------ Net earnings $ 701,271 $ 572,190 $ 1,459,110 $ 1,326,656 ============ ============ ============ ============ Net earnings allocated to: Limited partners - 97.1% $ 680,934 $ 555,597 $ 1,416,796 $ 1,288,183 General partner - 2.9% 20,337 16,593 42,314 38,473 ------------ ----------- ------------ ------------ $ 701,271 $ 572,190 $ 1,459,110 $ 1,326,656 ============ ============ ============ ============ Net earnings per Unit of limited partnership interest $ 0.07 $ 0.06 $ 0.14 $ 0.13 ============ ============ ============ ============ 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, 1997 (Unaudited)
Unrealized Gains on Investment in General Limited FHA-Insured Partner Partners Certificates Total ------------ ------------ -------------- ------------- Balance, December 31, 1996 $ (4,932,018) $ 39,737,785 $ 2,784,033 $ 37,589,800 Net earnings 42,314 1,416,796 -- 1,459,110 Distributions paid or accrued of $0.14 per Unit (41,814) (1,400,018) -- (1,441,832) Adjustment to unrealized gains on investment in FHA-Insured Certificates -- -- (290,441) (290,441) ------------ ------------ ------------- ------------- Balance, June 30, 1997 $ (4,931,518) $ 39,754,563 $ 2,493,592 $ 37,316,637 ============ ============ ============= ============= Limited Partnership Units outstanding - June 30, 1997 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, 1997 1996 ------------ ------------ Cash flows from operating activities: Net earnings $ 1,459,110 $ 1,326,656 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 in receivables and other assets 14,262 9,611 Increase (decrease) in accounts payable and accrued expenses 2,214 (3,958) ------------ ------------ Net cash provided by operating activities 1,475,586 1,478,773 ------------ ------------ Cash flows from investing activities: Receipt of mortgage principal from scheduled payments 132,542 150,109 ------------ ------------ Net cash provided by investing activities 132,542 150,109 ------------ ------------ Cash flows from financing activities: Distributions paid to partners (1,441,832) (1,647,806) ------------ ------------ Net cash used in financing activities (1,441,832) (1,647,806) ------------ ------------ Net increase (decrease) in cash and cash equivalents 166,296 (18,924) Cash and cash equivalents, beginning of period 656,051 673,733 ------------ ------------ Cash and cash equivalents, end of period $ 822,347 $ 654,809 ============ ============ The accompanying notes are an integral part of these financial statements.
7 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 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, 1997 and December 31, 1996, the results of its operations for the three and six months ended June 30, 1997 and 1996 and its cash flows for the six months ended June 30, 1997 and 1996. 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, 1996. New Accounting Standards ------------------------ In February 1997, FASB issued SFAS No. 128 "Earnings per Share" ("FAS 128"). FAS 128 changes the requirements for calculation and disclosure of earnings per share. This statement eliminates the calculation of primary earnings per share and requires the disclosure of basic earnings per share and diluted earnings per share. There will be no impact to the earnings per Unit of limited partnership interest. 8 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 2. BASIS OF PRESENTATION - Continued During 1997 FASB issued SFAS No. 129 "Disclosure of Information about Capital Structure" ("FAS 129"). FAS 129 continues the existing requirements to disclose the pertinent rights and privileges of all securities other than ordinary common stock but expands the number of companies subject to portions of its requirements. The Partnership does not anticipate an impact to its current disclosures. 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 either the statement of income or another statement of comprehensive 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 is effective beginning January 1, 1998. 3. INVESTMENT IN FHA-INSURED LOANS Listed below is the Partnership's aggregate investment in FHA-Insured Loans as of June 30, 1997 and December 31, 1996:
June 30, December 31, 1997 1996 ------------ ------------ Number of Acquired Insured Mortgages 4 4 Originated Insured Mortgages 2 2 Amortized Cost $ 23,181,684 $ 23,262,738 Face Value 26,210,541 26,338,828 Fair Value 26,195,338 26,801,846
All of the FHA-Insured Loans are current with respect to payment of principal and interest as of August 1, 1997, except for the mortgage on Portervillage I Apartments, which has been delinquent since January 1997. In May 1997, the servicer of this mortgage filed a Notice of Default and an Election to Assign the mortgage with HUD. The face value of this mortgage was approximately $1.2 million at December 31, 1996. The Partnership expects to receive 99% of this amount plus accrued interest. 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, 1997, the Partnership received $0 and $61,988, respectively, from the Participations. During the three and six months ended June 30, 1996, the Partnership received $0 and $12,158, respectively, from the Participations. These amounts are included in mortgage investment income on the accompanying statements of operations. 9 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 4. INVESTMENT IN FHA-INSURED CERTIFICATES Listed below is the Partnership's aggregate investment in FHA-Insured Certificates as of June 30, 1997 and December 31, 1996:
June 30, December 31, 1997 1996 ------------ ------------ Number of mortgages 9 9 Amortized Cost $ 11,270,239 $ 11,321,727 Face Value 13,747,729 13,843,564 Fair Value 13,763,831 14,105,760
All of the FHA-Insured Certificates were current with respect to the payment of principal and interest as of August 1, 1997. 5. DISTRIBUTIONS TO UNITHOLDERS The distributions paid or accrued to Unitholders on a per Unit basis for the six months ended June 30, 1997 and 1996 are as follows:
Quarter Ended 1997 1996 - ------------- -------- -------- March 31, $ 0.07 $ 0.08 June 30, 0.07 0.08 -------- -------- $ 0.14 $ 0.16 ======== ========
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 three and six months ended June 30, 1997 and 1996, earned or received compensation or payments for services from the Partnership as follows: 10 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 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 1997 1996 1997 1996 - ----------------- ---------------------------- -------- -------- -------- -------- CRIIMI, Inc. General Partner/Distribution $ 20,907 $ 23,893 $ 41,814 $ 47,786 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/ 13,286 23,860 23,280 32,829 Inc. 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). 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, 1997, respectively, and a fee equal to $25,278 and $50,556 for the three and six months ended June 30, 1996, 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 reports filed with the Securities and Exchange Commission that could cause actual results to differ materially. General - ------- As of June 30, 1997, the Partnership had invested in 15 Insured Mortgage Investments, with an aggregate amortized cost of approximately $34.5 million, face value of approximately $40.0 million and fair value of approximately $40.0 million. All of the mortgage investments are current with respect to payment of principal and interest as of August 1, 1997, except for the mortgage on Portervillage I Apartments, which has been delinquent since January 1997. In May 1997, the servicer of this mortgage filed a Notice of Default and an Election to Assign the mortgage with HUD. The face value of this mortgage was approximately $1.2 million at December 31, 1996. The Partnership expects to receive 99% of this amount plus accrued interest. Results of Operations - --------------------- Net earnings increased for the three and six months ended June 30, 1997, as compared to the corresponding periods in 1996, primarily due to the loss recognized on the modification of the mortgage on Creekside Village in May 1996. Mortgage investment income decreased slightly for the three and six months ended June 30, 1997, as compared to the corresponding periods in 1996. The decrease is due primarily to a reduction in mortgage investment income as a result of the normal amortization of the mortgages, partially offset by an increase in cash flow received from Participations. General and administrative expenses decreased for the three and six months ended June 30, 1997, as compared to the corresponding periods in 1996. This decrease was due primarily to decreases in legal and payroll related expenses. The Partnership did not dispose of any mortgage investments during the three and six months ended June 30, 1997 and 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. 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, 1997 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 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. Net cash provided by operating activities did not change significantly for the six months ended June 30, 1997, as compared to the corresponding period in 1996. Net cash provided by investing activities decreased for the six months ended June 30, 1997, as compared to the corresponding period in 1996 primarily due to the modification of the mortgage on Creekside Village, as discussed above. This decrease was offset by an increase in the receipt of mortgage principal from scheduled payments. Net cash used in financing activities decreased for the six months ended June 30, 1997, as compared to the corresponding period in 1996, primarily due to the decrease in the 1997 first and second quarters' distributions. 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, 1997. 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 By: /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 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q. 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 822 13,764 23,528 0 0 0 0 0 38,114 797 0 0 0 0 37,317 38,114 0 1,741 0 0 282 0 0 1,459 0 1,459 0 0 0 1,459 .14 0
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