-----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, TfyFxFpI5INxkAS3/aS8YF+YNAVAci9uAWfRQ3NbghIJ0iLimMhAxc5OZCwTgpI/ mBfnOT4QG7LbuYPL6rRrCg== 0000912057-96-009881.txt : 19960517 0000912057-96-009881.hdr.sgml : 19960517 ACCESSION NUMBER: 0000912057-96-009881 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NYLIFE GOVERNMENT MORTGAGE PLUS LTD PARTNERSHIP CENTRAL INDEX KEY: 0000844414 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 133487910 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18226 FILM NUMBER: 96566382 BUSINESS ADDRESS: STREET 1: 51 MADISON AVE STREET 2: ROOM 1710 CITY: NEW YORK STATE: NY ZIP: 10010 BUSINESS PHONE: 212-576-7300 MAIL ADDRESS: STREET 1: 51 MADISON AVENUE STREET 2: ROOM1710 CITY: NEW YORK STATE: NY ZIP: 10010 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________________ Commission file number 0-18226 ------- NYLIFE GOVERNMENT MORTGAGE PLUS LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) MASSACHUSETTS 13-3487910 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 51 MADISON AVENUE, NEW YORK, NEW YORK 10010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 576-7300 -------------- 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Yes X No --- --- NYLIFE GOVERNMENT MORTGAGE PLUS LIMITED PARTNERSHIP MARCH 31, 1996 INDEX
PAGE NO. -------- Part I - Financial Information (Unaudited) Balance Sheets as of March 31, 1996 and December 31, 1995 3 Statement of Operations for the Three Months Ended March 31, 1996 and 1995 4 Statement of Partners' Capital for the Three Months Ended March 31, 1996 and for the Year Ended December 31, 1995 5 Statement of Cash Flows for the Three Months Ended March 31, 1996 and 1995 6 Notes to Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Part II - Other Information 13 Signatures 14
2 NYLIFE GOVERNMENT MORTGAGE PLUS LIMITED PARTNERSHIP BALANCE SHEETS AS OF MARCH 31, 1996 AND DECEMBER 31, 1995
1996 DECEMBER 31 ASSETS (UNAUDITED) 1995 - ------ ----------- ----------- Cash and cash equivalents $13,937,222 $ 867,686 Interest receivable 138,249 208,392 Investments in Participating Insured Mortgages 16,764,965 29,765,800 Deferred acquisition fees and expenses - net 873,295 875,965 Investments in Participating Guaranteed Loans 400,100 400,100 ----------- ----------- Total assets $32,113,831 $32,117,943 ----------- ----------- ----------- ----------- LIABILITIES AND PARTNERS' CAPITAL - --------------------------------- Due to affiliates $ 25,000 $ 21,729 Accrued liabilities 60,965 79,423 ----------- ----------- Total liabilities 85,965 101,152 ----------- ----------- Commitments and Contingencies Partners' capital: Capital contributions net of public offering expenses 36,028,557 36,028,557 Accumulated earnings 17,931,236 17,372,364 Cumulative distributions (21,931,927) (21,384,130) ----------- ----------- Total partners' capital 32,027,866 32,016,791 ----------- ----------- Total liabilities and partners' capital $32,113,831 $32,117,943 ----------- ----------- ----------- -----------
The accompanying notes are an integral part of these financial statements. 3 NYLIFE GOVERNMENT MORTGAGE PLUS LIMITED PARTNERSHIP STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (UNAUDITED)
INCOME 1996 1995 - ------ ------------ ------------ Interest - cash and cash equivalents $ 65,709 $ 23,952 Interest - Mortgages (net of write-off and amortization of deferred acquisition costs) 503,651 1,084,653 Other income 57,098 324,000 ------------ ------------ Total income 626,458 1,432,605 ------------ ------------ Expenses - -------- General and administrative 45,856 44,330 Asset management fees 21,729 27,667 ------------ ------------ Total expenses 67,585 71,997 ------------ ------------ Net income $ 558,873 $ 1,360,608 ------------ ------------ ------------ ------------ Net income allocated - -------------------- General Partner $ 10,619 $ 11,806 Corporate Limited Partner 13 33 Unitholders 548,241 1,348,769 ------------ ------------ $ 558,873 $1,360,608 ------------ ------------ ------------ ------------ Net income per Unit $ .07 $ .17 ------------ ------------ ------------ ------------ Number of Units 8,168,457.7 8,168,457.7 ------------ ------------ ------------ ------------
The accompanying notes are an integral part of these financial statements. 4 NYLIFE Government Mortgage Plus Limited Partnership Statement of Partners' Capital for the Three Months Ended March 31, 1996 (Unaudited) and for the Year Ended December 31, 1995
CORPORATE TOTAL LIMITED GENERAL PARTNERS' UNITHOLDERS PARTNER PARTNER CAPITAL ----------- --------- -------- ----------- Balance at January 1, 1995 $33,921,431 $ 915 $(39,821) $33,882,525 Net income 2,909,307 71 43,654 2,953,032 Distributions (4,771,535) (117) (47,114) (4,818,766) ----------- ----- -------- ----------- Balance at December 31, 1995 32,059,203 869 (43,281) 32,016,791 Net income 548,241 13 10,619 558,873 Distributions (536,829) (13) (10,956) (547,798) ----------- ----- -------- ----------- Balance at March 31, 1996 $32,070,615 $ 869 $(43,618) $32,027,866 ----------- ----- -------- ----------- ----------- ----- -------- -----------
The accompanying notes are an integral part of these financial statements. 5 NYLIFE Government Mortgage Plus Limited Partnership Statement of Cash Flows for the Three Months Ended March 31, 1996 and 1995 (Unaudited)
1996 1995 ----------- ---------- Cash flows from operating activities: Net income $ 558,873 $1,360,608 ----------- ---------- Adjustments to reconcile net income to net cash flows provided by operating activities: Amortization of acquisition costs 2,670 567,642 Changes in assets and liabilities: Decrease in interest receivable 70,143 59,250 Increase (decrease) in due to affiliates 3,271 (47,333) Decrease in accrued liabilities (18,458) (6,875) ----------- ---------- Total adjustments 57,626 572,684 ----------- ---------- Net cash provided by operating activities 616,499 1,933,292 ----------- ---------- Cash flows from investing activities: Repayment of Participating Insured Mortgages 24,023 29,244 Repayment of GNMA Certificate 12,976,812 0 Repayment of Participating Guaranteed Loans 0 1,095,800 ----------- ---------- Net cash provided by investing activities 13,000,835 1,125,044 ----------- ---------- Cash flows from financing activities: Distributions to partners (547,798) (602,634) ----------- ---------- Net cash used in financing activities (547,798) (602,634) ----------- ---------- ----------- ---------- Net increase in cash and cash equivalents 13,069,536 2,455,702 Cash and cash equivalents at beginning of period 867,686 950,967 ----------- ---------- Cash and cash equivalents at end of period $13,937,222 $3,406,669 ----------- ---------- ----------- ----------
The accompanying notes are an integral part of these financial statements. 6 NYLIFE GOVERNMENT MORTGAGE PLUS LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS MARCH 31, 1996 (UNAUDITED) NOTE 1 - GENERAL The accompanying financial statements and related notes should be read in conjunction with the Partnership's 1995 Annual Report on Form 10-K. The Partnership terminates on December 31, 2028, unless terminated earlier by the occurrence of certain events as set forth in the Partnership Agreement. The summarized financial information contained herein is unaudited; however, in the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of financial information have been included. All capitalized terms used in these Notes to Financial Statements, unless otherwise defined herein, shall have the meanings set forth in the Partnership Agreement. NOTE 2 - INVESTMENTS IN MORTGAGES The Partnership's net proceeds of $33,580,000 were committed for investment in Participating Insured Mortgages ("PIMs") and Participating Guaranteed Loans ("PGLs"). Of this total amount committed, $1,946,594 had been included in the Partnership's working capital reserve and subsequently distributed to its Partners on November 15, 1994. PARTICIPATING INSURED MORTGAGES Investment in PIMs on the balance sheets as of March 31, 1996 and December 31, 1995 is comprised of the following:
MARCH 31, 1996: CROSS CREEK SIGNATURE PLACE TOTAL ----------- --------------- ----- Investment in PIM $7,226,406 $ 9,756,900 $16,983,306 Principal repayments (7,644) (9,981) (17,625) Acquisition fees and expenses net of accumulated amortization 292,057 581,238 873,295 ---------- ----------- ----------- $7,510,819 $10,328,157 $17,838,976 ---------- ----------- ----------- ---------- ----------- ----------- DECEMBER 31, 1995: CROSS CREEK THE HIGHLANDS SIGNATURE PLACE TOTAL ----------- ------------- --------------- ----- Investment in PIM $7,226,406 $13,037,676 $ 9,756,900 $30,020,982 Principal repayments (100,837) (170,991) (99,879) (371,707) Acquisition fees and expenses net of accumulated amortization 293,276 0 582,689 875,965 ---------- ----------- ----------- ----------- $7,418,845 $12,866,685 $10,239,710 $30,525,240 ---------- ----------- ----------- ----------- ---------- ----------- ----------- -----------
PARTICIPATING GUARANTEED LOANS Investment in PGLs on the balance sheets as of March 31, 1996 and December 31, 1995 is comprised of the following: 7 MARCH 31, 1996: CROSS CREEK SIGNATURE PLACE TOTAL ----------- --------------- ----- Investment in PGL $400,000 $100 $400,100 -------- ---- -------- -------- ---- -------- DECEMBER 31, 1995: CROSS CREEK SIGNATURE PLACE TOTAL ----------- --------------- ----- Investment in PGL $400,000 $100 $400,100 -------- ---- -------- -------- ---- -------- As the Earn-out periods for each of the Properties expired during 1994, the Partnership has no further commitments to fund amounts under the PGLs. RECENT DEVELOPMENTS On February 27, 1996, the Partnership sold the Highlands GNMA for cash in the amount of $13,105,373.01. The Highlands GNMA was sold through Utendahl Capital Partners, an unaffiliated broker dealer, pursuant to which the Highlands Borrower agreed to pay a portion of any additional taxes determined by the State of Florida to be due in connection with the recording of the original loan documents. The State of Florida claimed that $136,800 in additional recording taxes were due. On March 12, 1996, the Partnership settled the recording tax claim of the State of Florida through a payment made on behalf of the Partnership in the amount of $64,000 ($53,850 of which was funded by the General Partner and $10,150 of which was funded by the Original Highlands Borrower). The Partnership has recently received the signed Closing Agreement settling the claim from the State of Florida and the letters of credit will be returned to the Original Highland Borrower. The sales price represents principal in the amount of $12,976,812.45, accrued interest in the amount of $71,462.59 and a premium of $57,097.97. The Partnership was not charged any separate fees or commissions in connection with the sale. The General Partner of the Partnership decided to sell the Highlands GNMA to take advantage of what it perceived to be a favorable market in which the Highlands GNMA could be sold at a premium. The Partnership intends to distribute such proceeds to its partners on May 15, 1996, the next scheduled distribution date. The sale of the Highlands GNMA, together with the 1995 sale of the Highlands and the related modification of the Highlands Mortgage, terminated the Partnership's beneficial interest in the Highlands Mortgage and the Highlands. CLASS ACTION LAWSUIT Two class action lawsuits were filed against certain affiliates of the General Partner in the District Court of Harris County, Texas on January 11, 1996, styled Grimshawe v. New York Life Insurance Co., et al (No. 96-001188) and Shea v. New York Life Insurance Co., et al (No. 96-001189) alleging misconduct in connection with the original sale of investment units in various partnerships, including violation of various laws and regulations and claims of continuing fraudulent conduct. The plaintiffs have asked for compensatory damages for their lost original investment, plus interest, costs (including attorneys fees), punitive damages, disgorgement of any earnings, compensation and benefits received by the defendants as a result of the alleged actions and other unspecified relief to which plaintiffs may be entitled. These suits were amended and refiled in a consolidated action in the United States District Court for the Southern District of Florida (the "Court") on March 18, 1996. In the federal action, the plaintiffs added the General Partner as a defendant and included allegations concerning the Partnership. The plaintiffs purport to represent a class of all persons (the "Class") who purchased or otherwise assumed rights and title to interests in certain limited 8 partnerships, including the Partnership, and other programs created, sponsored, marketed, sold, operated or managed by the defendants (the "Proprietary Partnerships"). The Partnership is not a defendant in the litigation. The defendants expressly deny any wrongdoing alleged in the complaint and concede no liability or wrongdoing in connection with the sale of the Units or the structure of the Proprietary Partnerships. Nevertheless, to reduce the burden of protracted litigation, the defendants have entered into a Stipulation of Settlement ("Settlement Agreement") with the plaintiffs because in their opinion such Settlement would (i) provide substantial benefits to the Class in a manner consistent with New York Life's position that it had previously determined to wind up most of the Proprietary Partnerships through orderly liquidation as the continuation of the business no longer serves the intended objectives of either the owners of interest in such Proprietary Partnerships or the defendants and to offer investors an enhancement to the liquidating distribution they would otherwise receive and (ii) provide an opportunity to wind up such partnerships on a schedule favorable to the Class and resolve the issues raised by the lawsuit. In connection with the proposed settlement (the "Settlement"), the General Partner will solicit consents of the Unitholders for the dissolution of the Partnership. Under the terms of the Settlement Agreement, any settling Unitholder will receive at least a complete return of their original investment, less distributions received prior to the final settlement date, in exchange for a release of any and all claims a Unitholder may have against the defendants in connection with the Proprietary Partnerships, including the Partnership, and all activities related to the dissolution and liquidation of such partnerships. Preliminary approval of the Settlement Agreement was given by the Court on March 19, 1996. The Settlement Agreement is further conditioned upon final approval by the Court as well as certain other conditions and is subject to certain rights of termination detailed in the consent solicitation material being mailed to the Unitholders. If the necessary consents of Unitholders for dissolution are obtained, the Partnership will be dissolved even if all necessary approvals for the Settlement Agreement are not obtained or the Settlement Agreement is otherwise terminated. In general, upon the dissolution of the Partnership, tax consequences will accrue to the partners. If the necessary consents of the Unitholders for dissolution are not obtained, the Partnership will continue to own the Mortgages and will continue to receive payments thereon. The financial statements do not include any adjustments that might result should the Unitholders vote to liquidate the Partnership. NOTE 3 - TRANSACTIONS WITH THE GENERAL PARTNER The following is a summary of the fees earned and reimbursable expenses incurred by the General Partner for the three months ended March 31, 1996 and 1995: 9
TOTAL EARNED FOR THE TOTAL EARNED FOR THE UNPAID AT THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 1996 MARCH 31, 1996 MARCH 31, 1995 -------------- -------------- -------------- Asset management fees $21,729 $21,729 $27,667 Reimbursement of general and administrative expenses to the General Partner 25,000 25,000 25,000 ------- ------- ------- $46,729 $46,729 $52,667 ------- ------- ------- ------- ------- -------
NOTE 4 - SUBSEQUENT EVENTS Surplus Cash - Signature Place A review of the borrower's audited financial statements for the year ended December 31, 1995 indicated that the sum of $79,840.20 is due the Partnership representing surplus cash. The Partnership filed an application for a distribution of surplus cash with the co-insurer for approval. On May 7, 1996 the Partnership received the co-insurer's approval and therefore expects to receive payment during the second quarter of 1996. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES The Partnership's cash and cash equivalents balance at March 31, 1996 consists of $426,269 of working capital reserves, $13,105,373 of proceeds from the sale of the Highlands GNMA and cash generated from operations net of accrued interest. The Partnership's working capital reserves are invested in short-term obligations of the United States government and other cash equivalents. As a result of the sale of the Highlands GNMA and the distribution of the proceeds from the sale to Unitholders on May 15, 1996, the Partnership's net cash provided by operating activities is expected to decline significantly. The Partnership will, however, still generate sufficient cash from operating activities to pay its operating expenses as well as continue to make quarterly distributions to the Unitholders. The Partnership currently derives its income primarily from its investments in mortgage backed securities ("MBSs"), which are long-term, fixed interest rate Government National Mortgage Association ("GNMA") securities, guaranteed as to the timely payment of principal and interest by GNMA and backed by the full faith and credit of the United States Government. The Partnership's only operating expenses are general and administrative expenses which include audit and tax return preparation fees, printing and postage costs for quarterly and annual reports, and reimbursement to the General Partner for reimbursable expenses incurred in accordance with the Partnership Agreement. In addition, the Partnership pays an asset management fee to the General Partner of .5% annually of the average aggregate amount invested in the Cross Creek and Signature Place Mortgages. In connection with the 1995 sale of the Highlands, the Highlands PIM (the "Highlands Mortgage") was modified and the Partnership is no longer entitled to any participation in net cash flow or net appreciation of the Highlands. Accordingly, effective January 31, 1995, the General Partner decided to forego an asset management fee with respect to the Highlands Mortgage. After payment of general and administrative expenses, the Partnership, distributes all of its income plus principal repayments on the MBSs to the partners on a quarterly basis. The Cross Creek and Signature Place PIMs and PGLs entitle the Partnership to participate in the net cash flow of the properties above certain levels and in any net appreciation in value upon refinancing. To date the Partnership has not received any such participations from these properties. Net cash provided by operating activities for the three months ended March 31, 1996 was $616,499 compared to $1,933,292 for the comparable 1995 period. This decrease is primarily a result of the sale of the Highlands property in January 1995 as discussed in the Partnerships Annual Report on Form 10-K. RESULTS OF OPERATIONS The decrease in the Partnership's net income for the three months ended March 31, 1996 as compared to the corresponding period in 1995 is primarily a result of the sale of the Highlands property in January 1995 as discussed in the Partnership's Annual Report on Form 10-K. The increase in interest income in cash and cash equivalents is due to the shift of funds from Investments in PIMs to short-term investments as a result of the sale of the Highland GNMA in the first quarter. In addition, as a result of the sale of the Highlands GNMA the Partnership recognized a gain of $57,098. As previously discussed, the distribution of the proceeds from the sale of the Highlands GNMA to Unitholders on May 15, 1996 will result in approximately a 33% decrease in net 11 income in the second quarter and remain at that level until such time, if any, that the Partnership receives participations on the Cross Creek and Signature Place Mortgages. 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings Incorporated by reference to Item 3 of Form 10-K For the fiscal year ended December 31, 1995 Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders Incorporated by reference to Form 8-K dated March 29, 1996 Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K The Partnership filed a report on Form 8-K dated March 29,1996, which is incorporated herein by reference. The contents of the report are as follows: Solicitation of Consents to Dissolve, Terminate and wind up the Partnership 13 SIGNATURES 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 on May 13, 1996. NYLIFE Government Mortgage Plus Limited Partnership By: NYLIFE Realty Inc. General Partner By: /s/ Kevin M. Micucci ------------------------------------- Kevin M. Micucci President and Controller (Principal Executive, Financial and Accounting Officer) 14 -----END PRIVACY-ENHANCED MESSAGE-----