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 March 31, 1995
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Commission file number 1-11060
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AMERICAN INSURED MORTGAGE INVESTORS
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(Exact name of registrant as specified in charter)
California 13-3180848
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11200 Rockville Pike, Rockville, Maryland 20852
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(Address of principal executive offices) (Zip Code)
(301) 468-9200
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(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 May 10, 1995, 10,000,000 depositary units of limited partnership
interest were outstanding.
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AMERICAN INSURED MORTGAGE INVESTORS
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1995
PAGE
----
PART I. Financial Information (Unaudited)
Item 1. Financial Statements
Balance Sheets - March 31, 1995 and
December 31, 1994........................ 3
Statements of Operations - for the three
months ended March 31, 1995 and 1994...... 4
Statement of Changes in Partners' Equity -
for the three months ended March 31,
1995..................................... 5
Statements of Cash Flows - for the three
months ended March 31, 1995 and 1994..... 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
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS
BALANCE SHEETS
March 31, December 31,
1995 1994
------------ ------------
ASSETS (Unaudited)
Investment in FHA-Insured Loans,
at amortized cost, net of unamortized
discount:
Acquired insured mortgages $ 9,103,243 $ 9,118,002
Originated insured mortgages 14,576,500 14,590,272
------------ ------------
23,679,743 23,708,274
Investment in FHA-Insured Certificates,
at fair value:
Acquired insured mortgages 13,806,410 13,355,026
Cash and cash equivalents 716,189 722,986
Receivables and other assets 375,395 374,647
------------ ------------
Total assets $ 38,577,737 $ 38,160,933
============ ============
LIABILITIES AND PARTNERS' EQUITY
Distributions payable $ 823,903 $ 823,903
Accounts payable and accrued expenses 106,298 96,483
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Total liabilities 930,201 920,386
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Partners' equity:
Limited partners' equity 40,243,278 40,306,817
General partner's deficit (4,916,920) (4,915,023)
Net unrealized gains on investment in
FHA-Insured Certificates 2,321,178 1,848,753
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Total partners' equity 37,647,536 37,240,547
------------ ------------
Total liabilities and partners'
equity $ 38,577,737 $ 38,160,933
============ ============
The accompanying notes are an integral part
of these financial statements.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS
STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended
March 31,
1995 1994
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Income:
Mortgage investment income $ 917,938 $ 950,747
Interest and other income 9,264 45,276
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927,202 996,023
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Expenses:
Asset management fee to related parties 85,773 98,561
General and administrative 82,962 79,080
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168,735 177,641
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Earnings before mortgage disposition 758,467 818,382
Gain on mortgage disposition -- 235,873
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Net earnings $ 758,467 $ 1,054,255
============ ============
Net earnings allocated to:
Limited partners - 97.1% $ 736,471 $ 1,023,682
General partner - 2.9% 21,996 30,573
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$ 758,467 $ 1,054,255
============ ============
Net earnings per Unit of limited
partnership interest $ 0.07 $ 0.10
============ ============
The accompanying notes are an integral part
of these financial statements.
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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, 1995
(Unaudited)
Net
Unrealized
Gains on
Investment in
General Limited FHA-Insured
Partner Partners Certificates Total
------------ ------------ -------------- -------------
Balance, January 1, 1995 $ (4,915,023) $ 40,306,817 $ 1,848,753 $ 37,240,547
Net earnings 21,996 736,471 -- 758,467
Distribution paid or accrued of
$0.08 per Unit (23,893) (800,010) -- (823,903)
Adjustment to net unrealized gains
on investment in FHA-Insured
Certificates -- -- 472,425 472,425
------------ ------------- ------------- -------------
Balance, March 31, 1995 $ (4,916,920) $ 40,243,278 $ 2,321,178 $ 37,647,536
============ ============= ============= =============
Limited Partnership Units
outstanding - March 31,
1995 10,000,125
=============
The accompanying notes are an integral part
of these financial statements.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS
STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended
March 31,
1995 1994
------------ ------------
Cash flows from operating activities:
Net earnings $ 758,467 $ 1,054,255
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Gain on mortgage disposition -- (235,873)
Changes in assets and liabilities:
(Increase) decrease in receivables
and other assets (748) 29,204
Increase in accounts payable and
accrued expenses 9,815 27,541
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Net cash provided by operating
activities 767,534 875,127
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Cash flows from investing activities:
Proceeds from disposition of insured
mortgages -- 8,177,380
Receipt of mortgage principal from
scheduled payments 49,572 44,803
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Net cash provided by investing
activities 49,572 8,222,183
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Cash flows from financing activities:
Distributions paid to partners (823,903) (3,810,552)
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Net (decrease) increase in cash and
cash equivalents (6,797) 5,286,758
Cash and cash equivalents, beginning
of period 722,986 3,778,696
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Cash and cash equivalents, end of
period $ 716,189 $ 9,065,454
============ ============
The accompanying notes are an integral part
of these financial statements.
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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.
From inception through September 6, 1991, affiliates of Integrated Resources,
Inc. served as managing general partner (with a partnership interest of 2.8%),
corporate general partner (with a partnership interest of 0.1%) and associate
general partner (with a partnership interest of 0.1%). All of the foregoing
general partners are sometimes collectively referred to as former general
partners. 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), formerly CRI Insured Mortgage Association, Inc. CRIIMI MAE is
managed by an adviser whose general partner is C.R.I., Inc. (CRI).
AIM Acquisition Partners L.P. (the Advisor) serves as the advisor of the
Partnership. The general partner of the Advisor is AIM Acquisition Corporation
and the limited partners include an entity owned by CRIIMI MAE and CRI. A sub-
advisory agreement exists whereby CRI/AIM Management, Inc. (the Sub-advisor), an
affiliate of CRI, manages the Partnership's portfolio.
During 1994, CRIIMI MAE's Board of Directors determined that it is in
CRIIMI MAE's best interest to consider a proposed transaction in which CRIIMI
MAE would become a self-managed and self-administered real estate investment
trust (REIT). Under the terms of the proposed transaction, CRIIMI MAE and its
affiliates would acquire certain mortgage advisory, servicing and related
businesses from affiliates of CRI, including the agreement with the Sub-advisor
to provide servicing and loan management services to the Partnership. This
transaction will have no effect on the Partnership's financial statements.
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, 1995
and December 31, 1994 and the results of its operations and cash flows for the
three months ended March 31, 1995 and 1994.
These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. While the General Partner believes that the disclosures
presented are adequate to make the information not misleading, it is suggested
that these financial statements be read in conjunction with the financial
statements and the notes to the financial statements included in the
Partnership's Annual Report filed on Form 10-K for the year ended December 31,
1994.
3. INVESTMENT IN FHA-INSURED LOANS
As of March 31, 1995 and December 31, 1994, the Partnership's investment in
FHA-Insured Loans consisted of four Acquired Insured Mortgages and two
Originated Insured Mortgages. As of March 31, 1995 and December 31, 1994,
8 AMERICAN INSURED MORTGAGE INVESTORS
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. INVESTMENT IN FHA-INSURED LOANS - Continued
these investments had an aggregate amortized cost of $23,679,743 and
$23,708,274, respectively, face value of $26,726,921 and $26,776,001,
respectively, and fair value of $26,568,777 and $26,065,185, respectively.
In addition to base interest payments under Originated Insured Mortgages,
the Partnership is entitled to additional interest based on a percentage of the
net cash flow from the underlying development and of the net proceeds from the
refinancing, sale or other disposition of the underlying development (referred
to as Participations). During the three months ended March 31, 1995, the
Partnership received $28,524 from the Participations. During the three months
ended March 31, 1994, the Partnership did not receive any monies from the
Participations. These amounts, if any, are included in mortgage investment
income in the accompanying statements of operations.
4. INVESTMENT IN FHA-INSURED CERTIFICATES
As of March 31, 1995 and December 31, 1994, the Partnership's investment in
FHA-Insured Certificates consisted of nine Acquired Insured Mortgages with an
aggregate amortized cost of $11,485,232 and $11,506,273, respectively, face
value of $14,149,724 and $14,190,281, respectively, and fair value of
$13,806,410 and $13,355,026, respectively.
9 AMERICAN INSURED MORTGAGE INVESTORS
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
5. DISTRIBUTION TO UNITHOLDERS
The distribution paid or accrued to Unitholders on a per Unit basis for the
three months ended March 31, 1995 and 1994 is as follows:
Quarter Ended 1995 1994
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March 31, $ 0.08 $ 0.89(1)
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<FN>
(1) This includes a special distribution of $0.81 per Unit comprised of: (i)
$0.80 per Unit return of capital and capital gain from the disposition of
the insured mortgage on Hidden Oaks Apartments and (ii) $0.01 per Unit of
previously accrued but undistributed interest received from the insured
mortgage on Creekside Village.
</FN>
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
payments received are temporarily invested prior to the payment of quarterly
distributions, (2) the reduction in the asset base due to monthly mortgage
payments received or mortgage dispositions, (3) variations in the cash flow
attributable to the delinquency or default of Insured Mortgages and (4) changes
in the Partnership's operating expenses.
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AMERICAN INSURED MORTGAGE INVESTORS
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
6. TRANSACTIONS WITH RELATED PARTIES
The General Partner and certain affiliated entities have, during the three
months ended March 31, 1995 and 1994, earned or received compensation or
payments for services from the Partnership as follows:
COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
----------------------------------------------
Capacity in Which For the three months ended March 31,
Name of Recipient Served/Item 1995 1994
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CRIIMI, Inc. General Partner/Distribution $ 23,893 $265,812
AIM Acquisition Advisor/Asset Management Fee 85,773(1) 98,561(1)
Partners, L.P.
CRI(2) Affiliate of General Partner/
Expense Reimbursement 15,535 18,296
<FN>
(1) Of the amounts paid to the Advisor, the Sub-advisor, CRI/AIM Management, Inc., earned a fee equal to $25,278 and $29,046
or 0.28% of Total Invested Assets, for the three months ended March 31, 1995 and 1994, respectively.
(2) These amounts are paid to CRI as reimbursement for expenses incurred on behalf of the General Partner and the Partnership.
As discussed in Note 1, the proposed transaction in which CRIIMI MAE would become a self-managed and self-administered REIT has no
impact on the payments required to be made by the Partnership, other than that the expense reimbursement currently paid by the
Partnership to CRI in connection with the provision of services by the Sub-advisor will be paid to an affiliate of CRIIMI MAE
subsequent to the consummation of the proposed transaction.
</FN>
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PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
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As of March 31, 1995, the Partnership had invested in 15 Insured Mortgages,
as discussed further below, with an aggregate amortized cost of approximately
$35 million, a face value of approximately $41 million and a fair value of
approximately $40 million.
Investment in FHA-Insured Loans
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As of March 31, 1995 and December 31, 1994, the Partnership's investment in
FHA-Insured Loans consisted of four Acquired Insured Mortgages and two
Originated Insured Mortgages. As of March 31, 1995 and December 31, 1994, these
investments had an aggregate amortized cost of $23,679,743 and $23,708,274,
respectively, face value of $26,726,921 and $26,776,001, respectively, and fair
value of $26,568,777 and $26,065,185, respectively.
In addition to base interest payments under Originated Insured Mortgages,
the Partnership is entitled to additional interest based on a percentage of the
net cash flow from the underlying development and of the net proceeds from the
refinancing, sale or other disposition of the underlying development (referred
to as Participations). During the three months ended March 31, 1995, the
Partnership received $28,524 from the Participations. During the three months
ended March 31, 1994, the Partnership did not receive any monies from the
Participations. These amounts, if any, are included in mortgage investment
income in the accompanying statements of operations.
Investment in FHA-Insured Certificates
- --------------------------------------
As of March 31, 1995 and December 31, 1994, the Partnership's investment in
FHA-Insured Certificates consisted of nine Acquired Insured Mortgages with an
aggregate amortized cost of $11,485,232 and $11,506,273, respectively, face
value of $14,149,724 and $14,190,281, respectively, and fair value of
$13,806,411 and $13,355,026, respectively.
Results of Operations
- ---------------------
Net earnings decreased for the three months ended March 31, 1995 as
compared to the corresponding period in 1994 primarily due to the gain
recognized on the disposition of the mortgage on Hidden Oaks in February 1994.
Also contributing to the decrease in net earnings was the decrease in mortgage
investment income as a result of this mortgage disposition.
Interest and other income decreased for the three months ended March 31,
1995 as compared to the corresponding period in 1994 primarily due to the short-
term investment of disposition proceeds received during February 1994 prior to
the distribution to Unitholders in May 1994.
Asset management fees decreased for the three months ended March 31, 1995
as compared to the corresponding period in 1994 as a result of the reduction in
the mortgage base, as discussed above.
Gain on mortgage disposition decreased for the three months ended March 31,
1995 as compared to the corresponding period in 1994. Gains and losses on
mortgage dispositions are based on the number, carrying amounts and proceeds of
mortgage investments disposed of during the period. During the three months
ended March 31, 1994, the mortgage on Hidden Oaks was prepaid, resulting in a
gain of $235,873. The Partnership did not dispose of any mortgage investments
during the three months ended March 31, 1995.
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PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Continued
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 three months ended March 31,
1995 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 payments received are temporarily invested prior to the payment of
quarterly distributions, (2) the reduction in the asset base due to monthly
mortgage payments received or mortgage dispositions, (3) variations in the cash
flow attributable to the delinquency or default of Insured Mortgages and (4)
changes in the Partnership's operating expenses.
Net cash provided by operating activities decreased for the three months
ended March 31, 1995 as compared to the corresponding period in 1994 primarily
due to a decrease in mortgage investment income and interest and other income,
as discussed above.
Net cash provided by investing activities decreased for the three months
ended March 31, 1995 as compared to the corresponding period in 1994 primarily
due to the receipt in February 1994 of net proceeds of approximately $8.2
million from the prepayment of the insured mortgage on Hidden Oaks Apartments.
Net cash used in financing activities decreased for the three months ended
March 31, 1995 as compared to the corresponding period in 1994 primarily due to
the special distribution paid to Unitholders during the first quarter of 1994 of
net proceeds received in 1993 from the sale of the defaulted mortgages on
Chapelgate Apartments and Cumberland Village. This compares to the distribution
to Unitholders during the first quarter of 1995 of regular cash flow from the
fourth quarter of 1994.
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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, 1995.
The exhibits filed as part of this report are listed below:
Exhibit No. Description
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27 Financial Data Schedule
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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, 1995 By: /s/ Cynthia O. Azzara
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Date Cynthia O. Azzara
Principal Financial
and Accounting Officer