FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2000 or
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number: 0-20737
AMERICA FIRST APARTMENT INVESTORS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 47-0797793
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
Suite 400, 1004 Farnam Street, Omaha, Nebraska 68102
(Address of principal executive offices) (Zip Code)
(402) 444-1630
(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 (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
<PAGE> - i -
Part I. Financial Information
Item 1. Financial Statements
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, 2000 Dec. 31, 1999
(unaudited)
-------------- --------------
<S> <C> <C>
Assets
Cash and temporary cash investments, at cost which
approximates market value
Unrestricted $ 14,941,573 $ 14,436,672
Restricted 1,837,000 1,837,000
Investment in real estate, net of accumulated depreciation (Note 3) 110,983,742 113,643,708
Other assets 1,877,190 2,089,160
-------------- --------------
$ 129,639,505 $ 132,006,540
============== ==============
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses (Note 5) $ 5,044,289 $ 4,940,569
Bonds and mortgage notes payable (Note 4) 68,683,018 69,092,444
Distribution payable 1,150,333 372,928
-------------- --------------
74,877,640 74,405,941
-------------- --------------
Partners' Capital
General Partner 56,830 39,200
Beneficial Unit Certificate Holders
($10.81 per BUC in 2000 and $11.04 in 1999) 54,705,035 57,561,399
-------------- --------------
54,761,865 57,600,599
-------------- --------------
$ 129,639,505 $ 132,006,540
============== ==============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE> - 1 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the For the For the Nine For the Nine
Quarter Ended Quarter Ended Months Ended Months Ended
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Income
Rental income $ 5,683,119 $ 5,545,131 $ 16,885,443 $ 15,312,290
Interest income 235,775 159,253 721,103 435,942
--------------- --------------- --------------- ---------------
5,918,894 5,704,384 17,606,546 15,748,232
--------------- --------------- --------------- ---------------
Expenses
Real estate operating expenses 2,783,321 2,699,080 8,053,086 7,175,815
Depreciation 1,063,199 1,111,550 3,224,300 3,077,413
Interest expense 1,042,367 1,028,895 3,126,241 2,770,792
General and administrative expenses (Note 5) 381,388 334,434 1,182,871 1,183,636
--------------- --------------- --------------- ---------------
5,270,275 5,173,959 15,586,498 14,207,656
--------------- --------------- --------------- ---------------
Net income and comprehensive income $ 648,619 $ 530,425 $ 2,020,048 $ 1,540,576
=============== =============== =============== ===============
Net income allocated to:
General Partner $ 17,118 $ 16,420 $ 52,443 $ 46,180
BUC Holders 631,501 514,005 1,967,605 1,494,396
--------------- --------------- --------------- ---------------
$ 648,619 $ 530,425 $ 2,020,048 $ 1,540,576
=============== =============== =============== ===============
Net income, basic and diluted, per BUC $ .12 $ .10 $ .38 $ .29
=============== =============== =============== ===============
Weighted average number of BUCs outstanding 5,066,734 5,212,167 5,121,778 5,212,167
=============== =============== =============== ===============
</TABLE>
The accompanying notes are an integral part of the consolidated statements.
<PAGE> - 2 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Beneficial Unit Certificate Holders
-----------------------------------
General # of BUCs
Partner Outstanding Amount Total
------------ ------------ ------------------- ---------------
<S> <C> <C> <C> <C>
Partners' Capital
Balance at December 31, 1999 $ 39,200 5,212,167 $ 57,561,399 $ 57,600,599
Net income 52,443 - 1,967,605 2,020,048
Cash distributions paid or accrued
Income (34,813) - (222,182) (256,995)
Return of capital - - (3,224,300) (3,224,300)
Purchase of BUCs - (150,700) (1,377,487) (1,377,487)
------------ ------------ ------------------- --------------
Balance at September 30, 2000 $ 56,830 5,061,467 $ 54,705,035 $ 54,761,865
============ ============ =================== ==============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE> - 3 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months Ended Months Ended
Sept. 30, 2000 Sept. 30, 1999
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 2,020,048 $ 1,540,576
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 3,224,300 3,077,413
Decrease in other assets 211,970 379,427
Increase in accounts payable and accrued expenses 103,720 273,089
--------------- ---------------
Net cash provided by operating activities 5,560,038 5,270,505
--------------- ---------------
Cash flows from investing activities
Real estate capital improvements (564,334) (62,707)
Acquisition of real estate - (17,932,029)
--------------- ---------------
Net cash used in investing activities (564,334) (17,994,736)
--------------- ---------------
Cash flows from financing activities
Distributions paid (2,703,890) (3,269,292)
Principal payments on bonds and mortgage notes payable (409,426) (393,186)
Purchase of BUCs (1,377,487) -
Bond issuance and line of credit costs paid - (168,036)
Proceeds from issuance of bonds and mortgage notes payable - 12,975,000
--------------- ---------------
Net cash (used in) provided by financing activities (4,490,803) 9,144,486
--------------- ---------------
Net increase (decrease) in cash and temporary cash investments 504,901 (3,579,745)
Cash and temporary cash investments at beginning of period 14,436,672 19,694,420
--------------- ---------------
Cash and temporary cash investments at end of period $ 14,941,573 $ 16,114,675
=============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 3,275,644 $ 2,694,035
=============== ===============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE> - 4 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
1. Basis of Presentation
The consolidated financial statements include the accounts of the
Partnership and its subsidiaries. All significant intercompany
transactions and accounts have been eliminated in consolidation.
The accompanying interim unaudited consolidated financial statements have
been prepared according to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
according to such rules and regulations, although management believes that
the disclosures are adequate to make the information presented not
misleading. The consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Partnership's Annual Report on Form 10-K for the year ended
December 31, 1999. In the opinion of management, all normal and recurring
adjustments necessary to present fairly the financial position at
September 30, 2000, and results of operations for all periods presented have
been made. The results of operations for the three and nine-month periods
ended September 30, 2000 are not necessarily indicative of the results to
be expected for the full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
2. Stock Repurchase Plan
In connection with the Partnership's plan to repurchase up to $2,000,000 of
the Partnership's Beneficial Unit Certificates (BUCs), the Partnership
purchased and cancelled, in open market transactions, 150,700 BUCs at an
aggregate cost of $1,377,487 during the nine months ended September 30, 2000
(12,400 BUCs at an aggregate cost of $120,002 for the quarter ended
September 30, 2000).
<PAGE> - 5 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
3. Investment in Real Estate
The Partnership's investment in real estate is comprised of the following:
<TABLE>
<CAPTION>
Building
Number and Carrying
Property Name Location of Units Land Improvements Amount
--------------------------------- -------------------- -------- ------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Covey at Fox Valley Aurora, IL 216 $ 1,320,000 $ 10,156,135 $ 11,476,135
The Exchange at Palm Bay Palm Bay, FL 72,002(1) 1,296,002 4,368,158 5,664,160
The Park at Fifty Eight Chattanooga, TN 196 231,113 4,122,226 4,353,339
Shelby Heights Bristol, TN 100 175,000 2,952,847 3,127,847
Coral Point Mesa, AZ 336 2,240,000 9,029,284 11,269,284
Park at Countryside Port Orange, FL 120 647,000 2,616,648 3,263,648
The Retreat Atlanta, GA 226 1,800,000 7,315,697 9,115,697
Jackson Park Place Fresno, CA 296 1,400,000 10,777,135 12,177,135
Park Trace Apartments Norcross, GA 260 2,246,000 11,789,810 14,035,810
Littlestone at Village Green Gallatin, TN 200 621,340 9,942,197 10,563,537
St. Andrews at Westwood Apartments Orlando, FL 259 1,617,200 14,262,540 15,879,740
The Hunt Apartments Oklahoma City, OK 216 550,000 7,095,049 7,645,049
Greenbriar Apartments Tulsa, OK 120 648,000 3,697,643 4,345,643
Oakwell Farms Apartments Nashville, TN 414 1,946,000 15,785,253 17,731,253
-----------------
130,648,277
Less accumulated depreciation (19,664,535)
-----------------
Balance at September 30, 2000 $ 110,983,742
=================
</TABLE>
(1) Represents square feet.
<PAGE> - 6 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
4. Bonds Payable and Mortgage Notes Payables
Bonds and mortgage notes payable at September 30, 2000, consists of the
following:
<TABLE>
<CAPTION>
Effective Final
Interest Maturity Annual Carrying
Collateral Rate Date Payment Schedule Payments Amount
----------------------- --------- -------- ----------------------------------- --------------------- -------------
<S> <C> <C> <C> <C> <C>
Bonds Payable:
The Park at Fifty Eight 6.65% 3/1/2021 semiannual payments of range from $224,000 $ 2,515,000
principal and/or interest to $228,000
are due each March 1 and September 1
Shelby Heights and 6.10% 3/1/2022 semiannual payments of range from $266,000 3,235,000
Park at Countryside principal and/or interest to $276,000
are due each March 1 and September 1
Covey at Fox Valley 5.30% 11/1/2007 semiannual payments of $658,000 12,410,000
and Park Trace Apartments interest are due each May 1
and November 1
Jackson Park Place 5.80% 12/1/2007 monthly payment of $611,901 8,191,127
principal and interest
are due the 1st of each month
Coral Point and 4.96% 3/1/2008 semiannual payments of $650,033 13,090,000
St. Andrews at interest are due each
Westwood Apartments March 1 and September 1
The Hunt Apartments 4.66%(1) 7/1/2004 semiannual payments of interest interest only 6,930,000
are due each Jan. 1 and July 1
Greenbriar Apartments 4.66%(1) 7/1/2004 semiannual payments of interest interest only 3,980,000
are due each Jan. 1 and July 1
-------------
50,351,127
Mortgage Notes Payable:
Littlestone 7.68% 9/15/2005 monthly payment of $542,921 5,536,930
at Village Green principal and interest
are due the 15th of each month
Oakwell Farms 6.935% 5/01/2009 monthly payments of principal $1,029,088 12,794,961
Apartments and interest are due the 1st
of each month
-------------
18,331,891
-------------
Balance at September 30, 2000 $ 68,683,018
=============
(1) The bonds payable bear interest at a floating rate which averaged 4.66%
for the nine months ended September 30, 2000. The bonds payable are also
collateralized by cash of $1,166,495 and $670,505 for The Hunt Apartments
and Greenbriar Apartments, respectively.
<PAGE> - 7 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
5. Transactions with Related Parties
Substantially all of the Partnership's general and administrative expenses are
paid by the general partner of the Partnership, America First Capital
Associates Limited Partnership Four (AFCA 4), or an affiliate and reimbursed by
the Partnership. The amount of general and administrative expenses reimbursed
to AFCA 4 for the quarter and nine months ended September 30, 2000, was
$189,533 and $634,598 respectively. The reimbursed expenses included in this
footnote are presented on a cash basis and do not reflect accruals made at
quarter end which are reflected in the accompanying financial statements.
Pursuant to the Limited Partnership Agreement, AFCA 4 is entitled to an
administrative fee from the Partnership based on the original amount of the
mortgage bonds which were foreclosed on by the Partnership and the purchase
price of any additional properties acquired by the Partnership. The amount of
such fees paid to AFCA 4 for the quarter and nine months ended September 30, 2000,
was $193,450 and $580,350, respectively.
Pursuant to the terms of the Limited Partnership Agreement, AFCA 4 is entitled
to receive a property acquisition fee from the Partnership in connection with
the identification, evaluation and acquisition of additional properties and
the financing thereof. There were no acquisition fees incurred during the
quarter or nine months ended September 30, 2000.
An affiliate of AFCA 4 was retained to provide property management services
for the multifamily properties owned by the Partnership. The fees for
services provided represent the lower of (i) costs incurred in providing
management of the property, or (ii) customary fees for such services
determined on a competitive basis and amounted to $249,242 and $748,047 for
the quarter and nine months ended September 30, 2000.
<PAGE> - 8 -
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with all of the
financial statements and notes included in Item 1 of this report as well as
the Partnerships' Annual Report on Form 10-K for the year ended December 31,
1999.
At September 30, 2000, the Partnership owned 13 apartment complexes containing
2,959 units located in seven states and one office/warehouse facility. The
following table sets forth certain information regarding the Partnership's
real estate as of September 30, 2000:
</TABLE>
<TABLE>
<CAPTION>
Number Percentage
Number of Units of Units
Property Name Location of Units Occupied Occupied
------------------------------- ----------------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Jackson Park Place Fresno, CA 296 292 99%
Covey at Fox Valley Aurora, IL 216 209 97%
The Park at Fifty Eight Chattanooga, TN 196 169 86%
Shelby Heights Bristol, TN 100 88 88%
Coral Point Mesa, AZ 336 307 91%
Park at Countryside Port Orange, FL 120 120 100%
The Retreat Atlanta, GA 226 221 98%
Park Trace Apartments Norcross, GA 260 254 98%
Littlestone at Village Green Gallatin, TN 200 172 86%
St. Andrews at Westwood Apartments Orlando, FL 259 239 92%
The Hunt Apartments Oklahoma City, OK 216 216 100%
Greenbriar Apartments Tulsa, OK 120 119 99%
Oakwell Farms Apartments Nashville, TN 414 402 97%
---------- ---------- -----------
2,959 2,808 95%
========== ========== ===========
The Exchange at Palm Bay Palm Bay, FL 72,002(1) 61,125(1) 85%
========== ========== ===========
</TABLE>
(1) Represents square feet.
Liquidity and Capital Resources
The Partnership's short-term liquidity needs include the payment of operating
expenses, current debt service requirements, distributions to BUC holders and
the acquisition of Partnership BUCs. The Partnership's long-term liquidity
requirements consist of funding acquisitions and repayment of maturing secured
debt. While the Partnership anticipates that cash-on-hand and cash provided
by operating and investing activities will be sufficient to meet most of its
short-term and long-term liquidity requirements, including distributions to
BUC holders, the Partnership does anticipate that future property acquisitions
will be financed by the assumption of existing taxable mortgage debt on
properties to be acquired, the origination of new debt or the issuance of
tax-exempt mortgage bonds. The Partnership currently does not anticipate
entering into short-term and long-term arrangements for purposes of paying
expenses and making distributions; however, the Partnership has the authority
to enter into such arrangements. The Partnership is not authorized to issue
additional BUCs to meet short-term or long-term liquidity requirements.
<PAGE> - 9 -
At September 30, 2000, the Partnership had debt obligations under nine
financing arrangements with an aggregate principal balance outstanding of
approximately $68,700,000. Such debt obligations consisted of seven
tax-exempt mortgage bonds with an aggregate principal balance outstanding of
approximately $50,351,000 and two mortgage notes payable with a combined
principal amount outstanding of approximately $18,332,000. Five of the debt
obligations which total approximately $32,300,000 require monthly, semiannual
or annual payments of principal and interest while four bonds with an
aggregate principal amount of approximately $36,400,000 require only
semiannual payments of interest. Maturity dates range from July 2004 to
March 2022. Approximately 84% of the Partnership's financing arrangements are
fixed-rate obligations with a weighted average interest rate of 5.99% at
September 30, 2000. The remaining 16% of the financing arrangements have
variable rates which averaged 4.66% for the nine months ended September 30,
2000. Each financing arrangement is a "non-recourse" obligation that is
secured by a first mortgage or deed of trust on one or two of the
Partnership's apartment complexes. Principal and interest payments on debt
obligations are made solely from the net cash flow and/or net sale or
refinancing proceeds of the mortgaged properties.
In connection with the Partnership's plan to repurchase up to $2,000,000 of
the Partnership's Beneficial Unit Certificates (BUCs), The Partnership
purchased and cancelled, in open market transactions, through September 30,
2000, 150,700 BUCs at an aggregate cost of $1,377,487 and an average cost of
$9.14 per unit.
Cash distributions paid or accrued to BUC holders for the periods
shown were as follows:
<TABLE>
<CAPTION>
For the Nine For the Nine
Months Ended Months Ended
Sept. 30, 2000 Sept. 30, 1999
--------------- ---------------
<S> <C> <C>
Regular cash distributions
Income $ .0435 $ .0347
Return of capital .6315 .5904
--------------- ---------------
$ .6750 $ .6251
=============== ===============
Distributions
Paid out of current and prior undistributed cash flow $ .6750 $ .6251
=============== ===============
</TABLE>
Future distributions to BUC holders will depend on the amount of net rental
income and interest income earned by the Partnership and the amount of
undistributed cash.
Results of Operations
Comparison of the Quarters Ended September 30, 2000 and September 30, 1999
Rental income increased $137,988 (approximately 2%) for the quarter ended
September 30, 2000, compared to the same period in 1999. Such increase is the
net result of increased rental income of $287,582 earned by nine of the
Partnership's 14 properties which was partially offset by decreased rental
income of $149,594 earned by five properties. Rental income increases for the
nine properties averaged 8.1% while rental income decreases for the five
properties averaged 6%. Average occupancy for the quarter ended September 30,
2000, was 96% compared to 97% for the comparable period of 1999.
Interest income increased $76,522 (approximately 48%) for the quarter ended
September 30, 2000, compared to the same period in 1999 primarily due to an
increase in the average undistributed cash balance and an increase in the
average interest rate earned on such balances.
<PAGE> - 10 -
Real estate operating expenses increased $84,241 (approximately 3%) for the
quarter ended September 30, 2000, compared to the same period in 1999. This
increase is attributable to: (i) an increase of $65,421 for Coral Point
Apartments due to higher repairs and maintenance expenses and salaries and
related expenses and (ii) increases of $46,913 and $29,823 for The Retreat and
St. Andrews at Westwood Apartments primarily due to increased repairs and
maintenance expenses and (iii) net increases of $8,073 for the Partnership's
other properties partially offset by (iv) decreases of $38,692 and $27,297 for
Covey at Fox Valley and Oakwell Farms Apartments primarily attributable to a
decrease in repairs and maintenance expenses.
Depreciation expense decreased $48,351 (approximately 4%) for the quarter
ended September 30, 2000, compared to the same period in 1999. This decrease
is primarily attributable to certain assets at the Partnership's commercial
property becoming fully depreciated.
Interest expense increased $13,472 (approximately 1%) for the quarter ended
September 30, 2000, compared to the same period in 1999. This increase is
primarily due to: (i) an increase of $19,549 on the variable-rate borrowings
for The Hunt Apartments and Greenbriar Apartments due to an increase in the
average interest rate on such financings partially offset by (ii) a decrease
of $6,077 on other borrowings due to the slight amortization of principal
balances on such borrowings.
General and administrative expenses increased $46,904 (approximately 1%) for
the quarter ended September 30, 2000, compared to the same period in 1999.
This increase is primarily due to an increase in salaries and related
expenses.
Comparison of the Nine Months Ended September 30, 2000 and September 30, 1999
Rental income increased $1,573,153 (approximately 10%) for the nine months
ended September 30, 2000, compared to the same period in 1999. Approximately
$1,019,550 of such increase is due to the acquisition of Oakwell Farms
Apartments in April 1999. The remaining $553,603 increase is the net result
of increased rental income of $575,170 earned by 11 of the Partnership's other
13 properties which was partially offset by decreased rental income of $21,567
earned by two properties. Rental income increases for the 11 properties
averaged 11.8% while rental income decreases for the two properties averaged
1.6%. Average occupancy for the nine months ended September 30, 2000, was 97%
compared to 96% for the comparable period of 1999.
Interest income increased $285,161 (approximately 65%) for the nine months
ended September 30, 2000, compared to the same period in 1999 primarily due to
an increase in the average undistributed cash balance and an increase in the
average interest rate earned on such balances.
Real estate operating expenses increased $877,271 (approximately 12%) for the
nine months ended September 30, 2000, compared to the same period in 1999.
This increase is attributable to: (i) an increase of $509,152 due to the
acquisition of Oakwell Farms Apartments in April 1999; (ii) a $109,120
increase for Coral Point due primarily to higher repairs and maintenance
expenses and salaries and related expenses; (iii) a $78,563 increase for The
Hunt Apartments due primarily to estimated taxes, higher salaries and related
expenses, and increased repairs and maintenance expenses; (iv) increases of
approximately $60,000 each for Jackson Park Place and St. Andrews at Westwood
Apartments due primarily to higher repairs and maintenance expenses, salaries
and related expenses and taxes and (v) net increases of approximately $60,000
for the Partnership's other properties.
Depreciation expense increased $146,887 (approximately 5%) for the nine months
ended September 30, 2000, compared to the same period in 1999. This increase
is primarily attributable to depreciation incurred on Oakwell Farms Apartments
which was acquired in April 1999, partially offset by a decrease in
depreciation expense by the Partnership's commercial property during the
quarter ended September 30, 2000, due to certain assets becoming fully
depreciated.
Interest expense increased $355,449 (approximately 13%) for the nine months
ended September 30, 2000, compared to the same period in 1999. This increase
is primarily due to: (i) an increase of $289,880 due to the acquisition of
Oakwell Apartments in April 1999 and (ii) an increase of $84,445 on the
variable-rate borrowings of The Hunt Apartments and Greenbriar Apartments due
to an increase in the average interest rate on such borrowings partially
<PAGE> - 11 -
offset by (iii) a decrease of $18,876 on other borrowings due to the slight
amortization of principal balances on such borrowings.
General and administrative expenses remained relatively constant for
the nine months ended September 30, 2000 compared to the same period in 1999.
Funds from Operations
Funds from operations, (FFO) which, for the Partnership, consists of net
income plus depreciation of real estate assets, increased approximately
$69,843 or 4% for the quarter ended September 30, 2000, compared to the same
period in 1999. Funds from operations was $1,711,818 for the quarter ended
September 30, 2000 compared to $1,641,975 for the same period of 1999. FFO
increased approximately $626,359 or 14% for the nine months ended September
30, 2000, compared to the same period in 1999. Funds from operations was
$5,244,348 for the nine months ended September 30, 2000 compared to $4,617,989
for the same period of 1999. FFO is not defined by generally accepted
accounting principles nor should it be considered as an alternative to net
income as an indication of operating performance or to net cash provided by
operating, investing and financing activities as a measure of liquidity. The
Partnership believes that FFO is helpful in understanding the Partnership's
results of operations in that such calculation reflects the Partnership's
ability to support interest payments and general operating expenses before the
impact of certain activities such as changes in other assets and accounts
payable. The Partnership's calculation of FFO may differ from the methodology
for calculating FFO utilized by other entities and, accordingly, may not be
comparable to such other entities.
New Accounting Pronouncement
The Partnership plans to adopt Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133)
effective January 1, 2001. Management is currently evaluating the effects of
adopting this statement and does not anticipate that such adoption will have a
material impact on the financial statements of the Partnership.
Forward Looking Statements
This report contains forward looking statements that reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, the Partnership's performance and financial results. All
statements, trend analysis and other information concerning possible or
assumed future results of operations of the Partnership and the real estate
investments it has made (including, but not limited to, the information
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations"), constitute forward-looking statements. BUC holders
and others should understand that these forward looking statements are subject
to numerous risks and uncertainties and a number of factors could affect the
future results of the Partnership and could cause those results to differ
materially from those expressed in the forward looking statements contained
herein. These factors include local and national economic conditions, the
amount of new construction, interest rates on single-family home mortgages,
government regulation, price inflation, the level of real estate and other
taxes imposed on the properties, labor problems and natural disasters.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes in the Partnership's market risk since
December 31, 1999.
<PAGE> - 12 -
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed as part of this report.
Exhibit numbers refer to the paragraph numbers under Item 601
of Regulation S-K:
3. Articles of Incorporation and Bylaws of America First
Fiduciary Corporation Number Eight (incorporated by
reference to Form S-11 Registration Statement filed May 8,
1986, with the Securities and Exchange Commission by
America First Tax Exempt Mortgage Fund 2 Limited
Partnership (Commission File No. 33-5521)).
4(a) Form of Certificate of Beneficial Unit Certificate
incorporated by reference to Exhibit 4.1 to Registration
Statement on Form S-4 (Commission File No. 333-2920) filed
by the Registrant on March 29, 1996).
4(b) Agreement of Limited Partnership of the Registrant
(incorporated by reference to Exhibit 4(b) to Form 8-K
(Commission File No. 0-20737) filed by the Registrant on
August 23, 1996).
10(a) Settlement Agreement among the Registrant and Jackson Park
Place, Artel Farms, Inc., and David A. Dyck dated April
11, 1997 (incorporated herein by reference to Form 10-Q
dated September 30, 1997 filed pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 by America
First Apartment Investors, L.P. (Commission File No.
0-20737)).
10(b) $12,410,000 Promissory Note, dated December 11, 1997,
from Park Trace Apartments Limited Partnership to the City
of Aurora, Illinois (The Covey at Fox Valley Apartment
Project) Series 1997 (incorporated herein by reference to
Form 10-K dated December 31, 1997 filed pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
by America First Apartment Investors, L.P. (Commission
File No. 0-20737)).
10(c) Loan Agreement, dated December 1, 1997, between Park
Trace Apartments Limited Partnership and City of Aurora,
Illinois (The Covey at fox Valley Apartment Project)
Series 1997 (incorporated herein by reference to Form 10-K
dated December 31, 1997 filed pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 by America
First Apartment Investors, L.P. (Commission File No.
0-20737)).
10(d) Indenture of Trust, dated December 1, 1997, between City
of Aurora, Illinois and UMB Bank, National Association
(The Covey at Fox Valley Apartment Project) Series 1997
(incorporated herein by reference to Form 10-K dated
December 31, 1997 filed pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 by America First
Apartment Investors, L.P. (Commission File No.
0-20737)).
10(e) $1,385,000 Promissory Note, dated April 2, 1998, from
Arizona Coral Point Apartments Limited Partnership to The
Industrial Development authority of the county of Maricopa
(Coral Point Apartments Project) Series 1998A and 1998B.
(incorporated herein by reference to Form 10-Q dated
June 30, 1998 filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 by America First Apartment
Investors, L.P. (Commission File No. 0-20737))
<PAGE> - 13 -
10(f) $11,705,000 Promissory Note, dated April 2, 1998, from
Arizona Coral Point Apartments Limited Partnership to The
Industrial Development authority of the county of Maricopa
(Coral Point Apartments Project) Series 1998A and 1998B.
(incorporated herein by reference to Form 10-Q dated
June 30, 1998 filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 by America First Apartment
Investors, L.P. (Commission File No. 0-20737))
10(g) Loan Agreement, dated March 1, 1998, between The
Industrial Development Authority of the County of Maricopa
and Arizona Coral Point Apartments Limited Partnership
(Coral Point Apartments Project) Series 1998A and 1998B.
(incorporated herein by reference to Form 10-Q dated
June 30, 1998 filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 by America First Apartment
Investors, L.P. (Commission File No. 0-20737))
10(h) Indenture of Trust, dated March 1, 1998, between The
Industrial Development Authority of the County of Maricopa
and UMB Bank, N.A. (Coral Point Apartments Project) Series
1998A and 1998B. (incorporated herein by reference to Form
10-Q dated June 30, 1998 filed pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 by America
First Apartment Investors, L.P. (Commission File No.
0-20737))
27. Financial Data Schedule
(b) Reports on Form 8-K
The Registrant did not file a report on Form 8-K during
the quarter for which this report is filed.
<PAGE> - 14 -
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.
Dated: November 10, 2000 AMERICA FIRST APARTMENT INVESTORS, L.P.
By America First Capital
Associates Limited
Partnership Four, General
Partner of the Registrant
By America First Companies L.L.C.,
General Partner of America First Capital
Associates Limited Partnership Four
By /s/ Michael Thesing
Michael Thesing
Vice President and Principal
Financial Officer
<PAGE> - 15 -
