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 March 31, 2000 -------------- 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 Identification No.) incorporation or organization) 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 March 31, 2000, 10,000,125 depository units of limited partnership interest were outstanding. AMERICAN INSURED MORTGAGE INVESTORS INDEX TO FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2000 PAGE ---- PART I. Financial Information (Unaudited) Item 1. Financial Statements Balance Sheets - March 31, 2000 (unaudited) and December 31, 1999 4 Statements of Income and Comprehensive Income - for the three months ended March 31, 2000 and 1999 (unaudited) 5 Statement of Changes in Partners' Equity - for the three months ended March 31, 2000 (unaudited) 6 Statements of Cash Flows - for the three months ended March 31, 2000 and 1999 (unaudited) 7 Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 2A. Qualitative and Quantitative Disclosures About Market Risk 13 PART II. Other Information Item 6. Exhibits and Reports on Form 8-K 14 Signature 15 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS BALANCE SHEETS March 31, December 31, 2000 1999 ------------ ------------ (Unaudited) ASSETS Investment in FHA-Insured Loans, at amortized cost, net of unamortized discount: Originated insured mortgages $ 4,921,273 $ 4,936,416 Acquired insured mortgages 7,792,633 7,814,612 ------------ ------------ 12,713,906 12,751,028 Investment in FHA-Insured Certificates, at fair value 12,395,575 12,468,348 Cash and cash equivalents 580,695 982,930 Receivables and other assets 218,197 213,468 ------------ ------------ Total assets $ 25,908,373 $ 26,415,774 ============ ============ LIABILITIES AND PARTNERS' EQUITY Distributions payable $ 514,940 $ 926,891 Accounts payable and accrued expenses 72,813 67,190 ------------ ----------- Total liabilities 587,753 994,081 ------------ ----------- Partners' equity: Limited partners' equity, 10,000,125 Units authorized, issued and outstanding 28,805,806 28,865,520 General partners' deficit (5,258,514) (5,256,730) Accumulated other comprehensive income 1,773,328 1,812,903 ------------ ------------ Total Partners' equity 25,320,620 25,421,693 ------------ ------------ Total liabilities and partners' equity $ 25,908,373 $ 26,415,774 ============ ============ The accompanying notes are an integral part of these financial statements. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) For the three months ended March 31, ------------------------- 2000 1999 --------- --------- Income: Mortgage investment income $ 570,083 $ 584,478 Interest and other income 3,966 14,677 --------- --------- 574,049 599,155 --------- --------- Expenses: Asset management fee to related parties 59,316 60,905 General and administrative 61,291 78,547 --------- --------- 120,607 139,452 --------- --------- Net earnings $ 453,442 $ 459,703 ========= ========= Other comprehensive loss (39,575) (23,383) --------- --------- Comprehensive income $ 413,867 $ 436,320 --------- --------- Net earnings allocated to: Limited partners - 97.1% $ 440,292 $ 446,372 General Partner - 2.9% 13,150 13,331 --------- --------- $ 453,442 $ 459,703 ========= ========= Net earnings per Unit of limited partnership interest - basic $ 0.04 $ 0.04 ========= ========= The accompanying notes are an integral part of these financial statements. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS STATEMENT OF CHANGES IN PARTNERS' EQUITY For the three months ended March 31, 2000 (Unaudited) Accumulated Other General Limited Comprehensive Partner Partner Income Total ------------ ------------ ------------ ------------ Balance, December 31, 1999 $ (5,256,730) $ 28,865,520 $ 1,812,903 $ 25,421,693 Net Earnings 13,150 440,292 - 453,442 Adjustment to unrealized gains (losses) on investments in insured mortgages - - (39,575) (39,575) Distributions paid or accrued of $0.05 per Unit, including return of capital of $0.01 per Unit (14,934) (500,006) - (514,940) ------------ ------------ ------------ ------------ Balance, March 31, 2000 $ (5,258,514) $ 28,805,806 $ 1,773,328 $ 25,320,620 ============ ============ ============ ============ Limited Partnership Units outstanding - basic, as of March 31, 2000 10,000,125 ========== The accompanying notes are an integral part of these financial statements. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN INSURED MORTGAGE INVESTORS STATEMENTS OF CASH FLOWS (Unaudited) For the three months ended March 31, 2000 1999 ----------- ----------- Cash flows from operating activities: Net earnings $ 453,442 $ 459,703 Adjustments to reconcile net earnings to net cash provided by operating activities: Changes in assets and liabilities: (Increase) decrease in receivables and other assets (4,729) 62,206 Increase in accounts payable and accrued expenses 5,623 37,252 ----------- ----------- Net cash provided by operating activities 454,336 559,161 ----------- ----------- Cash flows from investing activities: Receipt of mortgage principal from scheduled payments 70,320 64,752 Debenture proceeds received from affiliate - 1,148,049 ----------- ----------- Net cash provided by investing activities 70,320 1,212,801 ----------- ----------- Cash flows from financing activities: Distributions paid to partners (926,891) (926,891) ----------- ----------- Net cash used in financing activities (926,891) (926,891) ----------- ----------- Net (decrease) increase in cash and cash equivalents (402,235) 845,071 Cash and cash equivalents, beginning of period 982,930 958,375 ----------- ----------- Cash and cash equivalents, end of period $ 580,695 $ 1,803,446 =========== =========== The accompanying notes are an integral part of these financial statements. 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 ("Partnership Agreement") states that the Partnership will terminate on December 31, 2008, unless previously terminated under the provisions of the Partnership Agreement. CRIIMI, Inc. (the "General Partne") holds a partnership interest of 2.9% and is a wholly owned subsidiary of CRIIMI MAE Inc. ("CRIIMI MAE"). AIM Acquisition Partners L.P. (the "Advisor") serves as the advisor to the Partnership. The general partner of the Advisor is AIM Acquisition Corporation ("AIM Acquisition") and the limited partners include, but are not limited to, AIM Acquisition, The Goldman Sachs Group, L.P., Sun America Investments, Inc. (successor to Broad, Inc.) and CRI/AIM Investment, L.P., an affiliate of CRIIMI MAE. AIM Acquisition is a Delaware corporation that is primarily owned by Sun America Investments, Inc. and The Goldman Sachs Group, L.P. Under the Advisory Agreement, the Advisor will render services to the Partnership, including but not limited to, the management of the Partnership's portfolio of mortgages and the disposition of the Partnership's mortgages. Such services will be subject to the review and ultimate authority of the General Partner. However, the General Partner is required to receive the consent of the Advisor prior to taking certain significant actions, including but not limited to the disposition of mortgages, any transaction or agreement with the General Partner, or its affiliates, or any material change as to policies regarding distributions or reserves of the Partnership. The Advisor is permitted to delegate the performance of services pursuant to a sub-advisory agreement (the "Sub-Advisory Agreement"). The delegation of such services will not relieve the Advisor of its obligation to perform such services. CRIIMI MAE Services Limited Partnership ("CMSLP"), an affiliate of CRIIMI MAE, manages the Partnership's portfolio, pursuant to the Sub-Advisory Agreement. The general partner of CMSLP is CRIIMI MAE Services, Inc., an affiliate of 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. On October 5, 1998, CRIIMI MAE, the parent of the General Partner, and CRIIMI MAE Management, Inc., an affiliate of CRIIMI MAE and provider of personnel and administrative services to the Partnership, filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). Such bankruptcy filings could result in certain adverse effects to the Partnership. For example, as a debtor-in-possession, CRIIMI MAE will not be permitted to provide any available capital to the General Partner or to the general partner of CMSLP, the Partnership's sub-advisor, without approval from the bankruptcy court. Even though this restriction or potential loss of the availability of a potential capital resource could adversely affect the General Partner and the Partnership, CRIIMI MAE has not historically represented a significant source of capital for the General Partner or the Partnership. Such bankruptcy filings could also result in the potential need to replace CRIIMI MAE Management, Inc. as a provider of personnel and administrative services to the Partnership. On April 25, 2000, CRIIMI MAE and CRIIMI MAE Management, Inc. filed their Third Amended Joint Plan of Reorganization (the "Plan") and proposed Second Amended Disclosure Statement (the "Disclosure Statement") with the United States Bankruptcy Court for the District of Maryland, in Greenbelt, Maryland (the "Bankruptcy Court"). The Plan and Disclosure Statement were filed with the support of the Official Committee of Equity Security Holders in the CRIIMI MAE Chapter 11 case, which is a co-proponent of the Plan. Subject to the completion of mutually satisfactory unsecured debt documentation, the Plan also has the support of the Official Committee of Unsecured Creditors of CRIIMI MAE, which was previously pursuing its own plan of reorganization. CRIIMI MAE, CRIIMI MAE Management, Inc., the Official Committee of Equity Security Holders, and the Official Committee of Unsecured Creditors are now all proceeding jointly toward confirmation of the Plan. On April 25, 2000, the Bankruptcy Court held a hearing on approval of the Disclosure Statement filed by CRIIMI MAE and CRIIMI MAE Management, Inc. At the conclusion of the hearing, the Bankruptcy Court directed CRIIMI MAE and Citicorp Real Estate,Inc./Salomon Smith Barney Inc., the only creditor whose objection to the Disclosure Statement was before the Bankruptcy Court, to submit additional legal briefs by May 9, 2000. There can be no assurance at this time that CRIIMI MAE's Plan will be confirmed and consummated. 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 March 31, 2000 and December 31, 1999, the results of its operations for the three months ended March 31, 2000 and 1999 and its cash flows for the three months ended March 31, 2000 and 1999. 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 annual 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, 1999. Comprehensive Income -------------------- Comprehensive income is the change in Partners' equity during a period from transactions from non-owner sources. This includes 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." Unrealized gains and losses are reported in the equity section of the Balance Sheet as "Accumulated Other Comprehensive Income." 3. INVESTMENT IN FHA-INSURED LOANS Listed below is the Partnership's aggregate investment in FHA-Insured Loans as of March 31, 2000 and December 31, 1999: March 31, December 31, 2000 1999 ------------ ------------ Number of Acquired Insured Mortgages 3 3 Originated Insured Mortgages 1 1 Amortized Cost $ 12,713,906 $ 12,751,028 Face Value 14,881,301 14,941,299 Fair Value 14,148,100 14,215,731 As of May 1, 2000, all of the FHA-Insured Loans are current with respect to payment of principal and interest except for the mortgage on Town Park Apartments, which is delinquent with respect to the March and April 2000 payments of principal and interest. In April 2000, the servicer of the mortgage on Town Park Apartments filed a Notice of Default with HUD. 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 months ended March 31, 2000 and 1999, the Partnership received nothing from the Participations. These amounts, if any, are included in mortgage investment income on the accompanying statements of income and comprehensive income. 4. INVESTMENT IN FHA-INSURED CERTIFICATES Listed below is the Partnership's aggregate investment in FHA-Insured Certificates as of March 31, 2000 and December 31, 1999: March 31, December 31, 2000 1999 ------------ ------------ Number of mortgages 8 8 Amortized Cost $ 10,622,247 $ 10,655,445 Face Value 12,777,881 12,835,126 Fair Value 12,395,575 12,468,348 All of the FHA-Insured Certificates were current with respect to the payment of principal and interest as of May 1, 2000. 5. DISTRIBUTIONS TO UNITHOLDERS The distributions paid or accrued to Unitholders on a per Unit basis for the three months ended March 31, 2000 and 1999 are as follows: Quarter Ended 2000 1999 ------------- -------- -------- March 31, $ 0.05 $ 0.17 (1) ======== ======== (1) This amount includes approximately $0.12 per Unit due to redemption of debentures received from the assignment of the mortgage on Portervillage I Apartments. This amount was received from an affiliate of the Partnership, American Insured Mortgage Investors - Series 85, L.P. (AIM 85). The debenture was issued to AIM 85, since the mortgage on Portervillage I Apartments was owned 50% by the Partnership and 50% by AIM 85. 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. As the Partnership continues to liquidate its mortgage investments and investors receive distributions of return of capital and taxable gains, investors should expect a reduction in earnings and distributions due to the decreasing mortgage base. 6. TRANSACTIONS WITH RELATED PARTIES The General Partner and certain affiliated entities have, during the three months ended March 31, 2000 and 1999, earned or received compensation or payments for services from the Partnership as follows: COMPENSATION PAID OR ACCRUED TO RELATED PARTIES For the three months ended March 31, Capacity in Which --------------------- Name of Recipient Served/Item 2000 1999 - ----------------- ----------------- --------- --------- CRIIMI, Inc. (1) General Partner/Distribution $ 14,934 $ 50,773 AIM Acquisition Advisor/Asset Management Fee 59,316 60,905 Partners, L.P. (2) CRIIMI MAE Management,Inc. Affiliate of General Partner/ 11,170 6,806 Expense Reimbursement <FN> (1) The General Partner, pursuant to the Partnership Agreement, is entitled to receive 2.9% of the Partnership's income, loss, capital and distributions, including, without limitation, the Partnership's adjusted cash from operations and proceeds of mortgage prepayments, sales or insurance (both as defined in the Partnership Agreement). (2) 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). CMSLP is entitled to a fee equal to 0.28% of Total Invested Assets from the Advisor's Asset Management Fee. Of the amounts paid to the Advisor, CMSLP earned a fee equal to $17,481 and $17,949 for the three months ended March 31, 2000 and 1999, respectively. The limited partner of CMSLP is a wholly owned subsidiary of CRIIMI MAE Inc., which filed for protection under chapter 11 of the Bankruptcy Code. </FN> PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS. When used in this Quarterly Report on Form 10-Q, the words "believes," "anticipates," "expects," "contemplates," and similar expressions are intended to identify forward-looking statements. Statements looking forward in time are included in this Quarterly Report on Form 10-Q pursuant to the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially. Accordingly, the following information contains or may contain forward-looking statements: (1) information included or incorporated by reference in this Quarterly Report on Form 10-Q, including, without limitation, statements made under Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, (2) information included or incorporated by reference in future filings by the Partnership with the Securities and Exchange Commission including, without limitation, statements with respect to growth, projected revenues, earnings, returns and yields on its portfolio of mortgage assets, the impact of interest rates, costs and business strategies and plans and (3) information contained in written material, releases and oral statements issued by or on behalf of, the Partnership, including, without limitation, statements with respect to growth, projected revenues, earnings, returns and yields on its portfolio of mortgage assets, the impact of interest rates, costs and business strategies and plans. Factors which may cause actual results to differ materially from those contained in the forward-looking statements identified above include, but are not limited to (i) regulatory and litigation matters, (ii) interest rates, (iii) trends in the economy, (iv) prepayment of mortgages and (v) defaulted mortgages. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only of the date hereof. The Partnership undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Year 2000 - --------- During the transition from 1999 to 2000, the Partnership did not experience any significant problems or errors in its information technology ("IT") systems or date-sensitive embedded technology that controls certain systems. Based on operations since January 1, 2000, the Partnership does not expect any significant impact to its business, operations, or financial condition as a result of the Year 2000 issue. However, it is possible that the full impact of the date change has not been fully recognized. The Partnership is not aware of any significant Year 2000 problems affecting third parties with which the Partnership interfaces directly or indirectly. General - ------- As of March 31, 2000, the Partnership had invested in 12 Insured Mortgage Investments, with an aggregate amortized cost of approximately $23 million, face value of approximately $28 million and fair value of approximately $27 million. As of May 1, 2000, all of the FHA-Insured Loans are current with respect to payment of principal and interest except for the mortgage on Town Park Apartments, which is delinquent with respect to the March and April 2000 payments of principal and interest. In April 2000, the servicer of the mortgage on Town Park Apartments filed a Notice of Default with HUD. Results of Operations - --------------------- Net earnings decreased slightly for the three months ended March 31, 2000, as compared to the corresponding period in 1999, primarily due to a reduction in mortgage investment income and interest and other income, partially offset by a decrease in general and administrative expense, as discussed below. Mortgage investment income decreased for the three months ended March 31, 2000, as compared to the corresponding period in 1999, primarily due to the normal amortization in the mortgage base. In addition, the mortgage base decreased due to one mortgage disposition with a principal balance of approximately $382,000, representing an approximate 1.4% decrease in the aggregate principal balance of the total mortgage portfolio since March 1999. Interest and other income decreased for the three months ended March 31, 2000, as compared to the corresponding period in 1999, primarily due to the timing of temporary investment of mortgage disposition proceeds prior to distribution. General and administrative expenses decreased for the three months ended March 31, 2000, as compared to the corresponding period in 1999, primarily due to a decrease in temporary employment costs. Liquidity and Capital Resources - ------------------------------- On October 5, 1998, CRIIMI MAE, the parent of the General Partner, and CRIIMI MAE Management, Inc., an affiliate of CRIIMI MAE and provider of personnel and administrative services to the Partnership, filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). Such bankruptcy filings could result in certain adverse effects to the Partnership. For example, as a debtor-in-possession, CRIIMI MAE will not be permitted to provide any available capital to the General Partner or to the general partner of CMSLP, the Partnership's sub-advisor, without approval from the bankruptcy court. Even though this restriction or potential loss of the availability of a potential capital resource could adversely affect the General Partner and the Partnership, CRIIMI MAE has not historically represented a significant source of capital for the General Partner or the Partnership. Such bankruptcy filings could also result in the potential need to replace CRIIMI MAE Management, Inc. as a provider of personnel and administrative services to the Partnership. On April 25, 2000, CRIIMI MAE and CRIIMI MAE Management, Inc. filed their Third Amended Joint Plan of Reorganization (the "Plan") and proposed Second Amended Disclosure Statement (the "Disclosure Statement") with the United States Bankruptcy Court for the District of Maryland, in Greenbelt, Maryland (the "Bankruptcy Court"). The Plan and Disclosure Statement were filed with the support of the Official Committee of Equity Security Holders in the CRIIMI MAE Chapter 11 case, which is a co-proponent of the Plan. Subject to the completion of mutually satisfactory unsecured debt documentation, the Plan also has the support of the Official Committee of Unsecured Creditors of CRIIMI MAE, which was previously pursuing its own plan of reorganization. CRIIMI MAE, CRIIMI MAE Management, Inc., the Official Committee of Equity Security Holders, and the Official Committee of Unsecured Creditors are now all proceeding jointly toward confirmation of the Plan. On April 25, 2000, the Bankruptcy Court held a hearing on approval of the Disclosure Statement filed by CRIIMI MAE and CRIIMI MAE Management, Inc. At the conclusion of the hearing, the Bankruptcy Court directed CRIIMI MAE and Citicorp Real Estate,Inc./Salomon Smith Barney Inc., the only creditor whose objection to the Disclosure Statement was before the Bankruptcy Court, to submit additional legal briefs by May 9, 2000. There can be no assurance at this time that CRIIMI MAE's Plan will be confirmed and consummated. 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 three months ended March 31, 2000 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. As the Partnership continues to liquidate its mortgage investments and investors receive distributions of return of capital and taxable gains, investors should expect a reduction in earnings and distributions due to the decreasing mortgage base. Net cash provided by operating activities decreased for the three months ended March 31, 2000, as compared to the corresponding period in 1999, primarily due to decrease in the change in receivables and other assets and accounts payable and accrued expenses. The change in receivables and other assets is due to a decrease in interest on debenture received from affiliate, as discussed below. The change in accounts payable and accrued expenses is due to the timing of payment of certain general and administrative expenses. Net cash provided by investing activities decreased for the three months ended March 31, 2000, as compared to the corresponding period in 1999, primarily due to a decrease in debenture proceeds received from affiliate, as discussed below. In 1998 the mortgage on Portervillage I Apartments was assigned to HUD. The assignment proceeds were issued in the form of a 9.5% debenture. This mortgage was owned 50% by the Partnership 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 and earned interest semi-annually on January 1 and July 1. In January 1999, the debenture was redeemed and the net proceeds of approximately $1.1 million were received and distributed by the Partnership. ITEM 2A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK The Partnership's principal market risk is exposure to changes in interest rates in the U.S. Treasury market, which coupled with the related spread to treasury investors required for the Partnership's Insured Mortgages, will cause fluctuations in the market value of Partnership's assets. Management has determined that there has not been a material change as of March 31, 2000, in market risk from December 31, 1999 as reported in the Partnership's Annual Report on Form 10-K as of December 31, 1999. 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 March 31, 2000. The exhibits filed as part of this report are listed below: Exhibit No. Description ----------- ----------------------- 27 Financial Data Schedule PART II. OTHER INFORMATION 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 May 11, 2000 /s/ Cynthia O. Azzara - ------------ -------------------------- Date Cynthia O. Azzara Senior Vice President, Chief Financial Officer and Treasurer