UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------------
For the fiscal year ended December 31, 1999 Commission file number 1-11060
AMERICAN INSURED MORTGAGE INVESTORS
(Exact name of registrant as specified in it's charter)
California 13-3180848
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
11200 Rockville Pike
Rockville, Maryland 20852
(301) 816-2300
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ---------------------------------- ------------------------
Depositary Units of Limited American Stock Exchange
Partnership Interest
Securities registered pursuant to Section 12(g) of the Act:
None
------------------------------------
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of February 17, 2000, 10,000,125 depositary units of limited partnership
interest were outstanding and the aggregate market value of such units held by
non-affiliates of the Registrant on such date was $24,345,945.
Documents incorporated by Reference
None
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
1999 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I PAGE
-------- ----
<S> <C> <C>
Item 1. Business 4
Item 2. Properties 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 5
PART II
----------------
Item 5. Market for Registrant's Securities and Related Security Holder Matters 6
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations 8
Item 7A. Qualitative and Quantitative Disclosures About Market Risk 11
Item 8. Financial Statements and Supplementary Data 12
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure 12
PART III
----------------
Item 10. Directors and Executive Officers of the Registrant 12
Item 11. Executive Compensation 13
Item 12. Security Ownership of Certain Beneficial Owners and Management 14
Item 13. Certain Relationships and Related Transactions 14
PART IV
----------------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 14
Signatures 16
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS
FORWARD-LOOKING STATEMENTS. When used in this Annual Report on Form 10-K, 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 Annual Report on Form 10-K 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 Annual Report on Form 10-K,
including, without limitation, statements made under Item 7, 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.
Development and Description of Business
- ---------------------------------------
Information concerning the business of American Insured Mortgage Investors
(the "Partnership") is contained in Part II, Item 7, Management's Discussion and
Analysis of Financial Condition and Results of Operations and in Notes 1, 5, 6
and 7 of the Notes to Financial Statements of the Partnership (filed in response
to Item 8 hereof), all of which are incorporated by reference herein. See also
Schedule IV-Mortgage Loans on Real Estate for the table of the Insured Mortgages
(as defined below) invested in by the Partnership as of December 31, 1999, which
is hereby incorporated by reference herein.
Employees
- ---------
The Partnership has no employees. The business of the Partnership is
managed by CRIIMI, Inc. (the "General Partner"), while its portfolio of
mortgages is managed by AIM Acquisition Partners, L.P. (the "Advisor") pursuant
to an advisory agreement (the "Advisory Agreement"). The General Partner is a
wholly-owned subsidiary of CRIIMI MAE Inc. ("CRIIMI MAE").
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. and
(successor to Broad, Inc.)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.
Competition
- -----------
In disposing of mortgage investments, the Partnership competes with private
investors, mortgage banking companies, mortgage brokers, state and local
government agencies, lending institutions, trust funds, pension funds, and other
entities, some with similar objectives to those of the Partnership and some of
which are or may be affiliates of the Partnership, its General Partner, the
Advisor, CMSLP or their respective affiliates. Some of these entities may have
substantially greater capital resources and experience in disposing of Federal
Housing Administration ("FHA") insured mortgages than the Partnership.
CRIIMI MAE and its affiliates also may serve as general partners, sponsors
or managers of real estate limited partnerships, REITS or other entities in the
future. The Partnership may attempt to dispose of mortgage investments at or
about the same time that CRIIMI MAE, one or more of the "AIM Funds" (defined as
the Partnership, American Insured Mortgage Investors - Series 85, L.P. ("AIM
85"), American Insured Mortgage Investors L.P. - Series 86 ("AIM 86") and
American Insured Mortgage Investors L.P. - Series 88 ("AIM 88")), and/or other
entities sponsored or managed by CRIIMI MAE or its affiliates, are attempting to
dispose of mortgages. As a result of market conditions that could limit
dispositions, CMSLP and its affiliates could be faced with conflicts of interest
in determining which mortgages would be disposed of. Both CMSLP and the General
Partner, however, are subject to their fiduciary duties in evaluating the
appropriate action to be taken when faced with such conflicts.
ITEM 2. PROPERTIES
Although the Partnership does not own the underlying real estate, the
mortgages underlying the Partnership's mortgage investments are non-recourse
first liens on the respective multifamily residential developments.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings to which the Partnership is a
party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders to be voted on during the
fourth quarter of 1999.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S SECURITIES AND RELATED SECURITY HOLDER MATTERS
Principal Market and Market Price for Units and Distributions
- -------------------------------------------------------------
The Units are traded on the American Stock Exchange ("AMEX") with a trading
symbol of "AIA". The high and low trade prices for the Units as reported on AMEX
and the distributions, as applicable, for each quarterly period in 1999 and 1998
were as follows:
<TABLE>
<CAPTION> Amount of
1999 Distribution
Quarter Ended High Low Per Unit
-------------- -------- ------- ------------
<S> <C> <C> <C>
March 31 $ 2 7/8 $ 2 1/2 $ 0.17 (1)
June 30 2 3/4 2 3/8 0.05
September 30 2 9/16 2 3/8 0.05
December 31 2 5/8 2 3/8 0.09 (2)
--------
$ 0.36
========
Amount of
1998 Distribution
Quarter Ended High Low Per Unit
--------------------- --------- -------- ------------
<S> <C> <C> <C>
March 31 $ 3 1/2 $ 3 1/4 $ 0.07
June 30 3 1/2 3 1/4 0.07
September 30 3 11/16 3 5/16 1.06 (3)
December 31 3 15/16 2 5/8 0.09
--------
$ 1.29
========
</TABLE>
(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,
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.
(2) This amount includes approximately $0.04 per Unit representing net proceeds
from the prepayment of the mortgage on Lakeside Apartments.
(3) This amount includes approximately $0.99 per Unit representing net proceeds
from the prepayment of the mortgage on Water's Edge Apartments.
There are no material legal restrictions upon the Partnership's present or
future ability to make distributions in accordance with the provisions of the
partnership agreement.
Approximate Number of Unitholders
Title of Class as of December 31, 1999
- --------------------------- -----------------------
Depositary Units of Limited
Partnership Interest 7,600
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
(Dollars in thousands, except per Unit amounts)
<TABLE>
<CAPTION> For the years ended December 31,
1999 1998 1997 1996 1995
-------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Income $ 2,354 $ 3,191 $ 3,415 $ 3,445 $ 3,626
Net gains (losses) from
mortgage dispositions 67 1,290 -- (146) --
Net earnings 1,925 3,978 2,879 2,758 3,041
Net earnings per Limited
Partnership Unit - Basic (1) $ 0.19 $ 0.39 $ 0.28 $ 0.27 $ 0.30
Distributions per Limited
Partnership Unit (1)(2) $ 0.36 $ 1.29 $ 0.29 $ 0.30 $ 0.32
As of December 31,
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total assets $ 26,416 $ 28,735 $ 38,551 $ 38,385 $ 39,415
Partners' equity 25,422 27,750 37,661 37,590 38,493
(1) Calculated based upon the weighted average number of Limited Partnership
Units outstanding.
(2) Includes distributions due the Unitholders for the Partnership's fiscal
years ended December 31, 1999, 1998, 1997, 1996, and 1995 which were
paid subsequent to each year end. See Notes 7 and 8 of the Notes to
Financial Statements.
</TABLE>
The selected income data presented above for the years ended December 31,
1999, 1998 and 1997 and the balance sheet data as of December 31, 1999 and 1998,
are derived from and are qualified by reference to the Partnership's financial
statements which have been included elsewhere in this Form 10-K. The selected
income data for the years ended December 31, 1996 and 1995 and the balance sheet
data as of December 31, 1997, 1996 and 1995 are derived from audited financial
statements not included in this Form 10-K. This data should be read in
conjunction with the Financial Statements and the Notes thereto.
<PAGE>
PART II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
- -------
The following discussion and analysis contains statements that may be
considered forward looking. These statements contain a number of risks and
uncertainties as discussed herein and in Item 1 of this Form 10-K that could
cause actual results to differ materially.
The American Insured Mortgage Investors (the "Partnership") was formed
under the Uniform Limited Partnership Act in the State of California on July 12,
1983. During the period from March 1, 1984 (the initial closing date of the
Partnership's public offering) through December 31, 1984, the Partnership,
pursuant to its public offering of 10,000,000 depositary units of limited
partnership interest ("Units"), raised a total of $200,000,000 in gross
proceeds. In addition, the initial limited partner contributed $2,500 to the
capital of the Partnership and received 125 Units of limited partnership
interest in exchange therefor.
CRIIMI, Inc. (the "General Partner") 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 pursuant to an advisory agreement (the "Advisory Agreement").
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.
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.
Mortgage Investments
- --------------------
Prior to the expiration of the Partnership's reinvestment period in
November 1988, the Partnership was engaged in the business of originating
mortgage loans ("Originated Insured Mortgages") and acquiring mortgage loans
("Acquired Insured Mortgages" and, together with Originated Insured Mortgages,
referred to herein as "Insured Mortgages"). In accordance with the terms of the
partnership agreement, the Partnership is no longer authorized to originate or
acquire Insured Mortgages and, consequently, its primary objective is to manage
its portfolio of mortgage investments, all of which are insured under Section
221(d)(4) or Section 231 of the National Housing Act of 1937, as amended (the
"National Housing Act"). The Partnership is a liquidating partnership and as it
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. The
partnership agreement states that the Partnership will terminate on December 31,
2008, unless previously terminated under the provisions of the Partnership
Agreement.
As of December 31, 1999, the Partnership had invested in 12 Insured
Mortgages, with an aggregate amortized cost of approximately $23 million, a face
value of approximately $28 million and a fair value of approximately $27
million, as discussed below.
Investment in Insured Mortgages
- -------------------------------
The Partnership's investment in Insured Mortgages consists of FHA-insured
mortgage loans ("FHA-Insured Loans") and 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"). The mortgages underlying the FHA-Insured
Certificates and FHA-Insured Loans are non-recourse first liens on multifamily
residential developments.
The following is a discussion of the types of the Partnership's mortgage
investments, along with the risks related to each type of investment:
Investment in FHA-Insured Loans
- -------------------------------
Listed below is the Partnership's aggregate investment in FHA-Insured Loans
as of December 31, 1999 and 1998:
<TABLE>
<CAPTION> December 31,
1999 1998
------------ ------------
<S> <C> <C>
Number of
Acquired Insured Mortgages 3 3
Originated Insured Mortgage 1 1
Amortized Cost $ 12,751,028 $ 12,891,015
Face Value 14,941,299 15,170,295
Fair Value 14,215,731 15,238,597
</TABLE>
All of the FHA-Insured Loans were current with respect to the payment of
principal and interest as of February 25, 2000.
In addition to base interest payments received 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 years ended December
31, 1999, 1998 and 1997, the Partnership received $0, $52,526 and $61,988,
respectively, from the Participations. These amounts, if any, are included in
mortgage investment income on the accompanying statements of income and
comprehensive income.
Investment in FHA-Insured Certificates
- --------------------------------------
Listed below is the Partnership's aggregate investment in FHA-Insured
Certificates as of December 31, 1999 and 1998:
<TABLE><CAPTION>
December 31,
1999 1998
------------ ------------
<S> <C> <C>
Number of mortgages (1) 8 9
Amortized Cost $ 10,655,445 $ 11,099,580
Face Value 12,835,126 13,440,088
Fair Value 12,468,348 13,458,100
</TABLE>
(1) In November 1999, the mortgage on Lakeside Apartments was prepaid. The
Partnership received net proceeds of approximately $384,000, and recognized
a gain of approximately $67,000 for the year ended December 31, 1999. A
distribution of $0.04 per Unit related to this prepayment was declared in
December 1999 and paid to Unitholders in February 2000.
All of the FHA-Insured Certificates were current with respect to the
payment of principal and interest as of February 25, 2000.
Results of Operations
- ---------------------
1999 versus 1998
- ----------------
Net earnings decreased for 1999 as compared to 1998 primarily due to a
reduction in mortgage investment income and a decrease in gains on mortgage
dispositions, as discussed below.
Mortgage investment income decreased for 1999 as compared 1998, primarily
due to the disposition of the mortgages on Portervillage I Apartments in March
1998, Waters Edge Apartments in September 1998 and Lakeside Apartments in
November 1999.
Interest and other income decreased for 1999 as compared to 1998, primarily
due to the timing of temporary investment of mortgage disposition proceeds prior
to distributions.
Asset management fees to related parties decreased for 1999 as compared
1998, due to the reduction in the mortgage base.
General and administrative expenses increased for 1999 as compared 1998,
primarily due to increased temporary employment costs and an increase in the
cost structure of certain expenses.
Gains on mortgage dispositions decreased for 1999 as compared 1998. In
1999, a gain of approximately $67,000 was recognized from the prepayment of the
mortgage on Lakeside Apartments. In 1998, a gain of approximately $1.1 million
was recognized from the prepayment of the mortgage on Waters Edge Apartments.
Also in 1998, a gain of approximately $200,000 was recognized from the
assignment of the mortgage on Portervillage I Apartments. 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.
1998 versus 1997
- ----------------
Net earnings increased for 1998 as compared to 1997 primarily due to an
increase in gains on mortgage dispositions. In 1998, gains were realized on the
prepayment of the mortgage on Waters Edge Apartments and the assignment of the
mortgage on Portervillage I Apartments, as discussed above. No mortgages were
disposed of during 1997.
The increase in net earnings was partially offset by a decrease in mortgage
investment income, caused by the reduction in the mortgage base, as discussed
previously.
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. Furthermore, the bankruptcy filings could negatively impact CMSLP
which could result in the need to obtain another party to perform the services
currently performed by CMSLP, as subadvisor, pursuant to the Sub-Advisory
Agreement.
On December 23, 1999, CRIIMI MAE and CRIIMI MAE Management, Inc. filed
their Amended Joint Plan of Reorganization and proposed disclosure statement
with the United States Bankruptcy Court for the District of Maryland, in
Greenbelt, Maryland (the "Bankruptcy Court"). The filing of such Amended Joint
Plan of Reorganization and proposed disclosure statement on December 23, 1999
was filed with the full support of the official committee of Equity Security
Holders in the CRIIMI MAE Chapter 11 case, which is a co-proponent of such
Amended Joint Plan of Reorganization. On or about February 11, 2000, the
Official Committee of Unsecured Creditors of CRIIMI MAE filed its own second
amended plan of reorganization and second amended proposed disclosure statement,
which, in general, provides for the liquidation of the assets of CRIIMI MAE. A
hearing has been scheduled for April 25 and April 26, 2000 on the proposed
disclosure statements filed with the Bankruptcy Court. There can be no assurance
at this time that CRIIMI MAE's Amended Joint Plan of Reorganization 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, are the Partnership's principal sources of cash flows,
and were sufficient for the years ended December 31, 1999, 1998 and 1997 to meet
operating requirements. The Partnership anticipates its cash flows to be
sufficient to meet operating expense requirements for 2000.
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 after paying all
expenses of the Partnership. 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 professional fees and foreclosure costs
incurred in connection with those Insured Mortgages and (4) variations in the
Partnership's operating expenses.
Since the Partnership is obligated to distribute the Proceeds of Mortgage
Prepayments, Sales and Insurance of Insured Mortgages (as defined in the
partnership agreement) to its Unitholders, the size of the Partnership's
portfolio will continue to decrease. The magnitude of the decrease will depend
upon the size of the Insured Mortgages, which are prepaid, sold or assigned for
insurance proceeds.
Cash Flow - 1999 versus 1998
- ----------------------------
Net cash provided by operating activities decreased for 1999 as compared to
1998 primarily due to a reduction in mortgage investment income.
Net cash provided by investing activities decreased for 1999 as compared to
1999, due to the decrease in proceeds from mortgage dispositions.
Net cash used in financing activities decreased for 1999 as compared to
1998 due to a decrease in distributions paid to partners as a result of
decreases discussed above.
Cash Flow - 1998 versus 1997
- ----------------------------
Net cash provided by operating activities decreased for 1998 as compared to
1997 primarily due to an increase in due from affiliate, as discussed
previously, and a reduction in net earnings (excluding gains from mortgage
dispositions) in 1998.
Net cash provided by investing activities increased for 1998 as compared to
1997 due to proceeds received from the prepayment and assignment of two
mortgages in 1998.
Net cash used in financing activities increased for 1998 as compared to
1997 primarily due to larger distributions to Unitholders in 1998 related to the
prepayment of one mortgage.
ITEM 7A. 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 the Partnership's assets.
The table below provides information about the Partnership's Insured
Mortgages, all of which were entered into for purposes other than trading. The
table presents anticipated principal and interest cash flows based upon the
assumptions used in determining the fair value of these securities and the
related weighted average interest rates by expected maturity.
<TABLE>
<CAPTION>
Fair
2000 2001 2002 2003 2004 Thereafter Total Value
------- ------- ------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Insured Mortgages
(in millions) $ 3.7 $ 3.6 $ 3.6 $ 3.4 $ 3.9 $ 24.9 $ 43.1 $ 26.7
Average Interest 7.48% 7.48% 7.48% 7.49% 7.49% 7.53% -- --
Rate
</TABLE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is set forth in this Annual Report on
Form 10-K commencing on page 17.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a), (b), (c) and (e)
The Partnership has no officers or directors. CRIIMI, Inc. holds a general
partnership interest of 2.9%. The affairs of the Partnership are managed by the
General Partner, which is wholly owned by CRIIMI MAE, a corporation whose shares
are listed on the New York Stock Exchange.
The general partner of the Advisor is AIM Acquisition and the limited
partners include, but are not limited to, AIM Acquisition, The Goldman Sachs
Group, L.P., Sun America Investments, Inc. and CRI/AIM Investment, L.P., an
affiliate of CRIIMI MAE. Pursuant to the terms of certain amendments to the
partnership agreement, 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. 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 General Partner is also the general partner of AIM 85, AIM 86 and AIM
88, limited partnerships with investment objectives similar to those of the
Partnership.
The following table sets forth information concerning the executive
officers and directors of CRIIMI MAE, the sole shareholder of the General
Partner as of March 15, 2000:
Name Age Position
- ---- --- --------
William B. Dockser 63 Chairman of the Board
H. William Willoughby 53 President, Secretary
and Director
Cynthia O. Azzara 40 Senior Vice President,
Chief Financial Officer
and Treasurer
David B. Iannarone 39 Senior Vice President and
General Counsel
Brian L. Hanson 38 Senior Vice President
Garrett G. Carlson, Sr. 62 Director
G. Richard Dunnells 62 Director
Robert Merrick 54 Director
Robert E. Woods 52 Director
William B. Dockser has served as Chairman of the Board of the General
Partner since 1991. Mr. Dockser has been Chairman of the Board of CRIIMI MAE
since 1989 and Chairman of the Board of CRIIMI MAE Financial Corporation since
1995. Mr. Dockser is also the founder of C.R.I., Inc. ("CRI"), serving as its
Chairman of the Board since 1974.
H. William Willoughby has served as President and Secretary of the General
Partner since 1991. Mr. Willoughby has been President of CRIIMI MAE since 1990
and a Director and Secretary of CRIIMI MAE since 1989. He has also served as a
director of CRIIMI MAE Financial Corporation since 1995. Mr. Willoughby has been
a director of CRI since 1974, Secretary of CRI from 1974 to 1990 and President
of CRI since 1990.
Cynthia O. Azzara has served as Chief Financial Officer of the General
Partner since 1994. Ms. Azzara has served as Chief Financial Officer of CRIIMI
MAE since 1994. She has also served as Senior Vice President of CRIIMI MAE since
1995 and Treasurer of CRIIMI MAE since 1997, Accounting and Finance Departments
of CRI from 1985 to June 1995.
David B. Iannarone has served as Senior Vice President of the General
Partner since March 1998. Mr. Iannarone has served as Senior Vice President of
CRIIMI MAE since March 1998; General Counsel of CRIIMI MAE since July 1996;
Counsel-Securities and Finance for Federal Deposit Insurance
Corporation/Resolution Trust Corporation from 1991 to July 1996.
Brian L. Hanson has served as Senior Vice President of the General Partner
since March 1998. Mr. Hanson has served as Senior Vice President of CRIIMI MAE
since March 1998; Group Vice President of CRIIMI MAE from March 1996 to March
1998; Chief Operating Officer, Director of Asset Operations and Portfolio
Director of JCF Partners, Lanham, Maryland from 1991 to March 1996.
Garrett G. Carlson, Sr. has served as Director of the General Partner since
1989. Mr. Carlson has served as Director of CRIIMI MAE since 1989; President of
Can-American Realty Corp. and Canadian Financial Corp. since 1979 and 1974,
respectively; President of Garrett Real Estate Development since 1982; President
of the Satellite Broadcasting Corporation since 1996; Chairman of the Board of
SCA Realty Holdings Inc. from 1985 to 1995; Vice Chairman of Shelter Development
Corporation Ltd. from 1983 to 1995 and member of the board of Bank Windsor from
1992 to 1994.
G. Richard Dunnells has served as Director of the General Partner since
1991. Mr. Dunnells has served as Director of CRIIMI MAE since 1991; Firm-wide
Hiring Partner of the law firm of Holland & Knight since 1995; Chairman of the
Washington, D.C. law firm of Dunnells & Duvall from 1989 to 1993; Senior Partner
of such law firm from 1973 to 1993; Special Assistant to the Under-Secretary and
Deputy Assistant Secretary for Housing and Urban Renewal and Deputy Assistant
Secretary for Housing Management with the U.S. Department of Housing and Urban
Development from 1969 to 1973; President's Commission on Housing from 1981 to
1982.
Robert J. Merrick has served as Director of the General Partner since 1997.
Mr. Merrick has served as Director of CRIIMI MAE since 1997, Chief Credit
Officer and Director of MCG Credit Corporation since February 1998; Executive
Vice President from 1985 and Chief Credit Officer of Signet Banking Corporation
through 1997, also served as Chairman of the Credit Policy Committee and member
of the Asset and Liability Committee and Management Committee; Credit
Officer-Virginia Banking Corporation, an affiliate of Signet Bank/Virginia, from
1980 to 1984; Senior Vice President of Bank of Virginia from 1976 to 1980.
Robert E. Woods has served as Director of the General Partner since 1998.
Mr. Woods has served as Director of CRIIMI MAE since 1998; Managing Director and
head of loan syndications for the Americas at Societe Generale, New York since
1997; Managing Director, head of Real Estate Capital Markets and Mortgage-backed
Securities division, Citicorp from 1991 to 1997, Head of Citicorp's
syndications, private placements, money markets and asset-backed businesses from
1985 to 1990.
(d) There is no family relationship between any of the officers and
directors of the General Partner.
(f) Involvement in certain legal proceedings.
None.
(g) Promoters and control persons.
Not applicable.
(h) Section 16 (a) Beneficial Ownership Reporting Compliance -Based
solely on its review of Forms 3 and 4 and amendments thereto
furnished to the Partnership, and written representations from
certain reporting persons that no Form 5's were required for
those persons, the Partnership believes that all reporting
persons have filed on a timely basis Forms 3, 4, and 5 as
required in the fiscal year ended December 31, 1999.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership does not have any directors or officers. None of the
directors or officers of the General Partner receive compensation from the
Partnership, and the General Partner does not receive reimbursement from the
Partnership for any portion of their salaries. Other information required by
Item 11 is hereby incorporated by reference herein to Note 7 of the Notes to
Financial Statements of the Partnership.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) The following table sets forth certain information regarding the beneficial
ownership of Units as of February 17, 2000, by holders of more than five
percent (5%) of the Partnership's Units.
<TABLE>
<CAPTION>
Number of Percent of
Name Address Units Class
------ --------- --------- ------------
<S> <C> <C> <C>
Financial and Investment 417 St. Joseph Street
Management Group, Ltd. P.O. Box 40 917,967 9.18%
Suttins Bay, MI 49682
</TABLE>
(b) The following table sets forth certain information regarding the beneficial
ownership of the Partnership's Units as of February 17, 2000 by each
director of the General Partner, each named executive officer of the
General Partner, and by affiliates of the Partnership. Unless otherwise
indicated, each Unitholder has sole voting and investment power with
respect to the Units beneficially owned.
Amount and Nature
of Units Percentage of Units
Name Beneficially Owned Outstanding
- ---- ------------------ -------------------
William B. Dockser 5,000 *
CRIIMI MAE 12,045 *
* Less than 1%
(c) There are no arrangements known to the Partnership, the operation of which
may at any subsequent date result in a change in control of the
Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with management and others.
Note 7 of the Notes to Financial Statements of the Partnership contains a
discussion of the amounts, fees and other compensation paid or accrued by
the Partnership to the directors and executive officers of the General
Partner and their affiliates, and is hereby incorporated by reference
herein.
(b) Certain business relationships.
Other than as set forth in Item 11 of this report which is hereby
incorporated by reference herein, the Partnership has no business
relationship with entities of which the General Partner of the Partnership
are officers, directors or equity owners.
(c) Indebtedness of management.
None.
(d) Transactions with promoters.
Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements:
Page
Description Number
- ----------- ------
Balance Sheets as of December 31, 1999 and 1998.............................19
Statements of Income and Comprehensive Income for the years
ended December 31, 1999, 1998 and 1997.................................20
Statements of Changes in Partners' Equity for the years
ended December 31, 1999, 1998 and 1997.................................21
Statements of Cash Flows for the years ended December 31, 1999,
1998 and 1997..........................................................22
Notes to Financial Statements...............................................23
(a)(2) Financial Statement Schedules:
IV - Mortgage Loans on Real Estate.................................29
All other schedules have been omitted because they are inapplicable,
not required, or the information is included in the Financial
Statements or Notes thereto.
(a)(3) Exhibits:
4.0 Amended and Restated Certificates of Limited Partnership are
incorporated by reference to Exhibit 4(a) to the Registration
Statement on Form S-11 (No. 33-6747) dated June 25, 1986 (such
Registration Statement, as amended, is referred to herein as the
"Registration Statement").
4.1 Agreement of Limited Partnership, incorporated by reference to
Exhibit 3 to the Registration Statement.
4.2 Form of Depository Receipt, incorporated by reference to Exhibit
4(b) to the Registration Statement.
4.3 Amendment to the Amended and Restated Agreement of Limited
Partnership of the Partnership dated February 12, 1990,
incorporated by reference to Exhibit 4(c) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1989.
4.4 Amendments to Partnership Agreement dated August 16, 1991,
incorporated by reference to Exhibit 28(c) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1991.
10.0 Origination and Acquisition Services Agreement, dated September
1, 1983, between the Partnership and IFI, incorporated by
reference to Exhibit 10(b) to the registration statement on Form
S-11 (No. 2-85476) dated November 30, 1983 (such registration
statement, as amended, is referred to herein as the "Initial
Registration Statement").
10.1 Management Services Agreement, dated November 30, 1983, between
the Partnership and IFI, incorporated by reference to Exhibit
10(c) to the Initial Registration Statement.
10.2 Disposition Services Agreement, dated November 30, 1983, between
the Partnership and IFI, incorporated by reference to Exhibit
10(d) to the Initial Registration Statement.
10.3 Agreement, dated November 30, 1983, among the former managing
general partner, the former associate general partner and
Integrated, incorporated by reference to Exhibit 10(e) to the
Initial Registration Statement.
10.4 Reinvestment Plan, incorporated by reference to the Prospectus
contained in the Registration Statement.
10.5 Mortgage Note dated March 26, 1986 between Mastic Associates and
IFI, incorporated by reference to Exhibit 10(l) to the
Partnership's Annual Report on Form 10-K for the year ended
December 31, 1986.
10.6 Mortgage dated March 26, 1986 between Mastic Associates and IFI,
incorporated by reference to Exhibit 10(m) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1986.
10.7 Mortgagor/Mortgagee Agreement dated March 26, 1986 between Mastic
Associates and IFI, incorporated by reference to Exhibit 10(n) to
the Partnership's Annual Report on Form 10-K for the year ended
December 31, 1986.
10.8 Lease Agreement dated as of December 10, 1984 between NHP Land
Associates, as Landlord and Mastic Associates, as Tenant,
incorporated by reference to Exhibit 10(o) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1986.
10.9 Purchase Agreement among AIM Acquisition, the former managing
general partner, the former corporate general partner, IFI and
Integrated dated as of December 1, 1990, as amended January 9,
1991, incorporated by reference to Exhibit 28(a) to the
Partnership's Annual Report on Form 10-K for the year ended
December 31, 1990.
10.10 Purchase Agreement among CRIIMI, Inc., AIM Acquisition, the
former managing general partner, the former corporate general
partner, IFI and Integrated dated as of December 13, 1990 and
executed as of September 6, 1991, incorporated by reference to
Exhibit 28(b) to the Partnership's Annual Report on Form 10-K for
the year ended December 31, 1990.
10.11 Sub-Management Agreement by and between AIM Acquisition and
CRI/AIM Management, Inc. dated as of March 1, 1991, incorporated
by reference to Exhibit 28(d) to the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1992.
27. Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K filed during the last quarter of the fiscal
year: None
All other items are not applicable.
PART IV
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, 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
/s/ March 1, 2000 /s/ William B. Dockser
- --------------------------- ---------------------------
DATE William B. Dockser
Chairman of the Board
/s/ March 1, 2000 /s/ H. William Willoughby
- --------------------------- ---------------------------
DATE H. William Willoughby
President and Secretary
/s/ March 1, 2000 /s/ Cynthia O. Azzara
- --------------------------- ---------------------------
DATE Cynthia O. Azzara
Senior Vice President,
Chief Financial Officer and
Treasurer
/s/ March 1, 2000 /s/ Garrett G. Carlson, Sr.
- --------------------------- ---------------------------
DATE Garrett G. Carlson, Sr.
Director
/s/ March 1, 2000 /s/ G. Richard Dunnells
- --------------------------- ---------------------------
DATE G. Richard Dunnells
Director
/s/ March 1, 2000 /s/ Robert J. Merrick
- --------------------------- ---------------------------
DATE Robert J. Merrick
Director
/s/ March 1, 2000 /s/ Robert E. Woods
- --------------------------- ---------------------------
DATE Robert E. Woods
Director
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
Financial Statements
as of December 31, 1999 and 1998
and for the Years Ended
December 31, 1999, 1998, and 1997
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of American Insured Mortgage Investors:
We have audited the accompanying balance sheets of American Insured
Mortgage Investors (the "Partnership") as of December 31, 1999 and 1998, and the
related statements of income and comprehensive income, changes in partners'
equity and cash flows for the years ended December 31, 1999, 1998 and 1997.
These financial statements and the schedule referred to below are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements and the schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Partnership as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years ended December 31, 1999, 1998 and 1997, in conformity with
accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule IV-Mortgage Loans on Real Estate
as of December 31, 1999 is presented for purposes of complying with the
Securities and Exchange Commission's rules and regulations and is not a required
part of the basic financial statements. The information in this schedule has
been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Vienna, VA
March 6, 2000
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Investment in FHA-Insured Loans, at amortized cost,
net of unamortized discount:
Originated insured mortgages $ 4,936,416 $ 4,994,145
Acquired insured mortgages 7,814,612 7,896,870
----------- -----------
12,751,028 12,891,015
Investment in FHA-Insured Certificates,
at fair value 12,468,348 13,458,100
Cash and cash equivalents 982,930 958,375
Receivables and other assets 213,468 279,302
Due from Affiliate - 1,148,049
------------ ------------
Total assets $ 26,415,774 $ 28,734,841
============ ============
LIABILITIES AND PARTNERS' EQUITY
Distributions payable $ 926,891 $ 926,891
Accounts payable and accrued expenses 67,190 58,060
--------- ---------
Total liabilities 994,081 984,951
--------- ---------
Partners' equity:
Limited partners' equity, 10,000,125 Units authorized,
issued and outstanding 28,865,520 30,596,406
General partners' deficit (5,256,730) (5,205,036)
Accumulated other comprehensive income 1,812,903 2,358,520
------------ ------------
Total Partner's equity 25,421,693 27,749,890
------------ ------------
Total liabilities and partners' equity $ 26,415,774 $ 28,734,841
============ ============
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Mortgage investment income $ 2,325,545 $ 2,987,164 $ 3,376,465
Interest and other income 28,431 204,152 38,282
----------- ----------- -----------
2,353,976 3,191,316 3,414,747
----------- ----------- -----------
Expenses:
Asset management fee to related parties 240,997 319,794 343,092
General and administrative 255,145 183,621 192,218
----------- ----------- -----------
496,142 503,415 535,310
----------- ------------ -----------
Earnings before mortgage dispositions 1,857,834 2,687,901 2,879,437
Gains on mortgage dispositions 67,150 1,290,352 -
----------- ----------- -----------
Net earnings $ 1,924,984 $ 3,978,253 $ 2,879,437
=========== =========== ===========
Other comprehensive income (545,617) (603,504) 177,991
----------- ----------- -----------
Comprehensive income $ 1,379,367 $ 3,374,749 $ 3,057,428
----------- ----------- -----------
Net earnings allocated to:
Limited partners - 97.1% $ 1,869,159 $ 3,862,884 $ 2,795,933
General Partner - 2.9% 55,825 115,369 83,504
----------- ----------- -----------
$ 1,924,984 $ 3,978,253 $ 2,879,437
=========== =========== ===========
Net earnings per Limited Partnership Unit - Basic $ 0.19 $ 0.39 $ 0.28
====== ====== ======
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
For the years ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
Accumulated
Other Total
General Limited Comprehensive Partners'
Partner Partners Income Equity
------- -------- ------------- ----------
<S> <C> <C> <C> <C>
Balance, January 1, 1997 $ (4,932,018) $ 39,737,785 $ 2,784,033 $ 37,589,800
Net Earnings 83,504 2,795,933 - 2,879,437
Adjustment to unrealized gains on
investments in insured mortgages - - 177,991 177,991
Distributions paid or accrued of $0.29 per Unit,
including return of capital of $0.01 per Unit (86,614) (2,900,035) - (2,986,649)
------------ ------------ ------------ ------------
Balance, December 31, 1997 (4,935,128) 39,633,683 2,962,024 37,660,579
Net Earnings 115,369 3,862,884 - 3,978,253
Adjustment to unrealized gains on
investments in insured mortgages - - (603,504) (603,504)
Distributions paid or accrued of $1.29 per Unit,
including return of capital of $0.90 per Unit (385,277) (12,900,161) - (13,285,438)
------------ ------------ ------------ ------------
Balance, December 31, 1998 (5,205,036) 30,596,406 2,358,520 27,749,890
Net Earnings 55,825 1,869,159 - 1,924,984
Adjustment to unrealized gains on
investments in insured mortgages - - (545,617) (545,617)
Distributions paid or accrued of $0.36 per Unit,
including return of capital of $0.17 per Unit (107,519) (3,600,045) - (3,707,564)
------------ ------------ ------------ ------------
Balance, December 31, 1999 $ (5,256,730) $ 28,865,520 $ 1,812,903 $ 25,421,693
============ ============ ============ ============
Limited Partnership Units outstanding - Basic, as of
December 31, 1999, 1998, and 1997 10,000,125
==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the years ended December 31,
1999 1998 1997
----------- ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,924,984 $ 3,978,253 $ 2,879,437
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Gains on mortgage dispositions (67,150) (1,290,352) -
Changes in assets and liabilities:
Decrease (increase) in receivables and other assets 65,834 117,899 (36,561)
Increase (decrease) in accounts payable and accrued expenses 9,130 (8,422) (7,991)
----------- ----------- -----------
Net cash provided by operating activities 1,932,798 2,797,378 2,834,885
----------- ------------ -----------
Cash flows from investing activities:
Proceeds from disposition of mortgages 383,582 10,195,241 -
Debenture proceeds received from affiliate 1,148,049 - -
Receipt of mortgage principal from scheduled payments 267,690 269,339 271,593
----------- ----------- -----------
Net cash provided by investing activities 1,799,321 10,464,580 271,593
----------- ----------- -----------
Cash flows from financing activities:
Distributions paid to partners (3,707,564) (13,182,450) (2,883,662)
----------- ----------- -----------
Net increase in cash and cash equivalents 24,555 79,508 222,816
----------- ----------- -----------
Cash and cash equivalents, beginning of year 958,375 878,867 656,051
----------- ----------- -----------
Cash and cash equivalents, end of year $ 982,930 $ 958,375 $ 878,867
=========== =========== ===========
Non cash investing activity:
50% share of debenture received from HUD in exchange for the $ - $ 1,148,049 $ -
mortgage on Portervillage I Apartments (Debenture is held by
an affiliate, AIM 85)
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
American Insured Mortgage Investors (the "Partnership") was formed under
the Uniform Limited Partnership Act in the state of California on July 12, 1983.
CRIIMI, Inc. (the "General Partner") 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.
Prior to the expiration of the Partnership's reinvestment period in
November 1988, the Partnership was engaged in the business of originating
mortgage loans ("Originated Insured Mortgages") and acquiring mortgage loans
("Acquired Insured Mortgages" and, together with Originated Insured Mortgages,
referred to herein as "Insured Mortgages"). In accordance with the terms of the
Partnership Agreement, the Partnership is no longer authorized to originate or
acquire Insured Mortgages and, consequently, its primary objective is to manage
its portfolio of mortgage investments, all of which are insured under Section
221(d)(4) or Section 231 of the National Housing Act. The Partnership Agreement
states that the Partnership will terminate on December 31, 2008, unless
previously terminated under the provisions of the partnership agreement.
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. Furthermore, the bankruptcy filings could negatively impact CMSLP
which could result in the need to obtain another party to perform the services
currently performed by CMSLP, as subadvisor, pursuant to the Sub-Advisory
Agreement.
On December 23, 1999, CRIIMI MAE and CRIIMI MAE Management, Inc. filed
their Amended Joint Plan of Reorganization and proposed disclosure statement
with the United States Bankruptcy Court for the District of Maryland, in
Greenbelt, Maryland (the "Bankruptcy Court"). The filing of such Amended Joint
Plan of Reorganization and proposed disclosure statement on December 23, 1999
was filed with the full support of the official committee of Equity Security
Holders in the CRIIMI MAE Chapter 11 case, which is a co-proponent of such
Amended Joint Plan of Reorganization. On or about February 11, 2000, the
Official Committee of Unsecured Creditors of CRIIMI MAE filed its own second
amended plan of reorganization and second amended proposed disclosure statement,
which, in general, provides for the liquidation of the assets of CRIIMI MAE. A
hearing has been scheduled for April 25 and April 26, 2000 on the proposed
disclosure statements filed with the Bankruptcy Court. There can be no assurance
at this time that CRIIMI MAE's Amended Joint Plan of Reorganization will be
confirmed and consummated.
2.SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting
--------------------
The Partnership's financial statements are prepared on the accrual
basis of accounting in accordance with generally accepted accounting
principles. 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 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.
Reclassification
----------------
Certain amounts in the financial statements for the year ended
December 31, 1997 have been reclassified to conform to the 1998 and 1999
presentation.
Investment in Insured Mortgages
-------------------------------
The Partnership's investment in Insured Mortgages is comprised of
FHA-insured mortgage loans ("FHA-Insured Loans") and participation
certificates evidencing a 100% undivided beneficial interest in government
insured multifamily mortgages issued or sold pursuant to programs of the
Federal Housing Administration ("FHA") ("FHA-Insured Certificates"). The
mortgages underlying the FHA-Insured Certificates and FHA-Insured Loans are
non-recourse first liens on multifamily residential developments.
Payment of principal and interest on FHA-Insured Certificates and
FHA-Insured Loans is insured by the United States Department of Housing and
Urban Development ("HUD") pursuant to Title 2 of the National Housing Act.
As of December 31, 1999, the weighted average remaining term of the
Partnership's investments in FHA-Insured Certificates is approximately 22
years. However, the partnership agreement states that the Partnership will
terminate in approximately 9 years, on December 31, 2008, unless previously
terminated under the provisions of the Partnership Agreement. As the
Partnership is anticipated to terminate prior to the weighted average
remaining term of its FHA-Insured Certificates, the Partnership does not
have the ability or intent, at this time, to hold these investments to
maturity. Consequently, the General Partner believes that the Partnership's
FHA-Insured Certificates should be included in the Available for Sale
category. Although the Partnership's FHA-Insured Certificates are
classified as Available for Sale for financial statement purposes, the
General Partner does not intend to voluntarily sell these assets other than
those which may be sold as a result of a default or those which are
eligible to be put to FHA at the expiration of 20 years from the date of
the final endorsement.
In connection with this classification, as of December 31, 1999 and
1998, all of the Partnership's investments in FHA-Insured Certificates are
recorded at fair value, with the net unrealized gains and losses on these
investments reported as other comprehensive income and as a separate
component of partners' equity. Subsequent increases or decreases in the
fair value of FHA-Insured Certificates classified as Available for Sale
will be included as a separate component of partners' equity. Realized
gains and losses on FHA-Insured Certificates classified as Available for
Sale will continue to be reported in earnings. The amortized cost of the
investments in this category is adjusted for amortization of discounts to
maturity. Such amortization is included in mortgage investment income.
As of December 31, 1999 and 1998, Investment in FHA-Insured Loans is
recorded at amortized cost.
Gains from dispositions of mortgage investments are recognized upon
the receipt of cash or debentures.
Losses on dispositions of mortgage investments are recognized when it
becomes probable that a mortgage will be disposed of and that the
disposition will result in a loss. In the case of Originated Insured
Mortgages fully insured by HUD, the Partnership's maximum exposure for
purposes of determining the loan losses would generally be an assignment
fee charged by HUD representing approximately 1% of the unpaid principal
balance of the Originated Insured Mortgage at the date of default, plus the
unamortized balance of acquisition fees and closing costs paid in
connection with the acquisition of the Originated Insured Mortgage and the
loss of 30 days accrued interest.
Since Acquired Insured Mortgages were purchased at a discount from the
unpaid principal balance of the mortgage, the Partnership's investment in
the Acquired Insured Mortgages is less than the amount that would be
recovered from HUD in the event of a default. Therefore, the Partnership
would experience no loan losses on discounted Acquired Insured Mortgages in
the case of a default.
Cash and Cash Equivalents
-------------------------
Cash and cash equivalents consist of time and demand deposits with
original maturities of four months or less.
Income Taxes
------------
No provision has been made for Federal, state or local income taxes in
the accompanying Statements of income and comprehensive income since they
are the personal responsibility of the Unitholders
Statements of Cash Flows
------------------------
No cash payments were made for interest expense during the years ended
December 31, 1999, 1998 and 1997. Since the statements of cash flows are
intended to reflect only cash receipt and cash payment activity, the
statements of cash flows do not reflect operating activities that affect
recognized assets and liabilities while not resulting in cash receipts or
cash payments.
3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following estimated fair values of the Partnership's financial
instruments are presented in accordance with generally accepted accounting
principles which define fair value as the amount at which a financial
instrument could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. These estimated fair
values, however, do not represent the liquidation value or the market value
of the Partnership.
<TABLE>
<CAPTION> As of December 31, 1999 As of December 31, 1998
Amortized Fair Amortized Fair
Cost Value Cost Value
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Investment in FHA-Insured
Loans:
Originated Insured Mortgage $ 4,936,416 $ 4,496,672 $ 4,994,145 $ 5,048,745
Acquired Insured Mortgages 7,814,612 9,719,059 7,896,870 10,189,852
------------ ------------ ------------ ------------
$ 12,751,028 $ 14,215,731 $ 12,891,015 $ 15,238,597
============ ============ ============ ============
Investment in FHA-Insured
Certificates $ 10,655,445 $ 12,468,348 $ 11,099,580 $ 13,458,100
============ ============ ============ ============
Cash and cash equivalents $ 982,930 $ 982,930 $ 958,375 $ 958,375
Accrued interest receivable $ 190,403 $ 190,403 $ 195,172 $ 195,172
</TABLE>
The following methods and assumptions were used to estimate the fair value
of each class of financial instrument:
Investment in FHA-Insured Certificates and FHA-Insured Loans
------------------------------------------------------------
The fair value of the FHA-Insured Certificates and FHA-Insured Loans
is based on the quoted market price from an investment banking institution
which trades these instruments as part of its day-to-day activities.
Cash and cash equivalents and accrued interest receivable
---------------------------------------------------------
The carrying amount approximates fair value because of the short
maturity of these instruments.
4. COMPREHENSIVE INCOME
Comprehensive Income includes net earnings as currently reported by
the Partnership adjusted for other comprehensive income. Other
comprehensive income for the Partnership is changes in unrealized gains and
losses related to the Partnership's mortgages accounted for as available
for sale. The table below breaks out other comprehensive income for the
periods presented into the following two categories: (1) the change to
unrealized gains and losses that relate to mortgages which were disposed of
during the period with the resulting realized gain or loss reflected in net
earnings (reclassification adjustments) and (2) the change in the
unrealized gain or loss related to those investments that were not disposed
of during the period.
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Reclassification adjustment for(gains)
losses included in net income $ (67,656) $ -- $ --
Unrealized holding gains (losses) arising
during the period (477,961) (603,504) 177,991
----------- ----------- -----------
Net adjustment to unrealized gains (losses) on mortgages $ (545,617) $ (603,504) $ 177,991
=========== =========== ===========
</TABLE>
5. INVESTMENT IN FHA-INSURED LOANS
Listed below is the Partnership's aggregate investment in FHA-Insured Loans
as of December 31, 1999 and 1998:
<TABLE>
<CAPTION> December 31,
1999 1998
------------ ------------
<S> <C> <C>
Number of
Acquired Insured Mortgages 3 3
Originated Insured Mortgage 1 1
Amortized Cost $ 12,751,028 $ 12,891,015
Face Value 14,941,299 15,170,295
Fair Value 14,215,731 15,238,597
</TABLE>
All of the FHA-Insured Loans were current with respect to the payment
of principal and interest as of February 25, 2000.
In addition to base interest payments received 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 years
ended December 31, 1999, 1998 and 1997, the Partnership received $0,
$52,526 and $61,988, respectively, from the Participations. These amounts,
if any, are included in mortgage investment income on the accompanying
statements of income and comprehensive income.
6. INVESTMENT IN FHA-INSURED CERTIFICATES
Listed below is the Partnership's aggregate investment in FHA-Insured
Certificates as of December 31, 1999 and 1998:
<TABLE>
<CAPTION> December 31,
1999 1998
------------ ------------
<S> <C> <C>
Number of mortgages (1) 8 9
Amortized Cost $ 10,655,445 $ 11,099,580
Face Value 12,835,126 13,440,088
Fair Value 12,468,348 13,458,100
</TABLE>
(1) In November 1999, the mortgage on Lakeside Apartments was prepaid. The
Partnership received net proceeds of approximately $384,000, and recognized
a gain of approximately $67,000 for the year ended December 31, 1999. A
distribution of $0.04 per Unit related to this prepayment was declared in
December 1999 and paid to Unitholders in February 2000.
All of the FHA-Insured Certificates were current with respect to the
payment of principal and interest as of February 25, 2000.
7. TRANSACTIONS WITH RELATED PARTIES
The principal officers of the General Partner for the years ended December
31, 1999, 1998 and 1997 did not receive fees for serving as officers of the
General Partner, nor are any fees expected to be paid to the officers in the
future.
The General Partner, CMSLP and certain affiliated entities have, during the
years ended December 31, 1999, 1998 and 1997, earned or received compensation or
payments for services from the Partnership as follows:
<TABLE>
<CAPTION> COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
-----------------------------------------------
For the year ended December 31,
Name of Recipient Capacity in Which Served/Item 1999 1998 1997
------------------------------- ----------------------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CRIIMI, Inc. (1) General Partner/Distribution $ 107,519 $ 385,277 $ 86,614
AIM Acquisition Partners,L.P.(2) Advisor/Asset Management Fee 240,997 319,794 343,092
CRIIMI MAE Management, Inc. Affiliate of General
Partner/Expense 37,347 40,569 36,226
American Insured Mortgage Affiliate of Partnership/
Investors L.P. - Series 85 Reimbursement of Debenture -- 1,148,049 --
Proceeds
</TABLE>
(1) The General Partner, pursuant to amendments to the Partnership Agreement,
effective September 6, 1991, 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, effective October 1,
1991, 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 $71,024, $94,245, and $101,112 for the years ended
December 31, 1999, 1998 and 1997, respectively. The limited partner of
CMSLP is a wholly-owned subsidiary of CRIIMI MAE Inc. which filed for
protection under Chapter 11 of the U.S. Bankruptcy Code.
8. DISTRIBUTIONS TO UNITHOLDERS
The distributions paid or accrued to Unitholders on a per Unit basis for
the years ended December 31, 1999, 1998 and 1997 are as follows:
Quarter Ended 1999 1998 1997
- ------------- ------ ------ ------
March 31 $ 0.17(1) $ 0.07 $ 0.07
June 30 0.05 0.07 0.07
September 30 0.05 1.06 (3) 0.07
December 31 0.09 (2) 0.09 0.08
------ ------ ------
$ 0.36 $ 1.29 $ 0.29
====== ====== ======
(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.
(2) This amount includes approximately $0.04 per Unit representing net proceeds
from prepayment of the mortgage on Lakeside Apartments.
(3) This amount includes approximately $0.99 per Unit representing net proceeds
from the prepayment of the mortgage on Water's Edge Apartments.
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 year 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
professional fees and foreclosure costs incurred in connection with those
Insured Mortgages and (4) variations in the Partnership's operating expenses.
9. PARTNERS' EQUITY
Depositary Units representing economic rights in limited partnership
interests ("Units") were issued at a stated value of $20. A total of 10,000,000
Units were issued for an aggregate capital contribution of $200,000,000. In
addition, the initial limited partner contributed $2,500 to the capital of the
Partnership and received 125 Units in exchange therefor.
10. SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of unaudited quarterly results of operations for
the years ended December 31, 1999, 1998 and 1997:
(In Thousands, Except Per Unit Data)
<TABLE>
<CAPTION> 1999
Quarter ended
March 31 June 30 September 30 December 31
-------- -------- ------------ -----------
<S> <C> <C> <C> <C>
Income $ 599 $ 591 $ 583 $ 581
Net earnings 460 479 455 531
Gain on mortgage dispositions -- -- -- 67
Net earnings per Limited Partnership Unit - Basic $ 0.04 $ 0.05 $ 0.04 $ 0.06
</TABLE>
<TABLE>
<CAPTION> 1998
Quarter ended
March 31 June 30 September 30 December 31
-------- -------- ------------ -----------
<S> <C> <C> <C> <C>
Income $ 887 $ 837 $ 803 $ 664
Net earnings 951 698 1,763 566
Gain on mortgage dispositions 200 -- 1,090 --
Net earnings per Limited Partnership Unit - Basic $ 0.09 $ 0.07 $ 0.17 $ 0.06
</TABLE>
<TABLE>
<CAPTION> 1997
Quarter ended
March 31 June 30 September 30 December 31
-------- -------- ------------ -----------
<S> <C> <C> <C> <C>
Income $ 901 $ 840 $ 836 $ 838
Net earnings 758 701 708 712
Net earnings per Limited Partnership Unit - Basic $ 0.07 $ 0.07 $ 0.07 $ 0.07
</TABLE>
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Interest Face Net Annual Payment
Maturity Put Rate on Amount of Carrying Value (Principal and
Development Name/Location Date Date(1) Mortgage(5) Mortgage(3) (3)(6)(8)(9) Interest)(5)(7)
- ------------------------- ----------- ----------- ----------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Originated Insured Mortgages
- ----------------------------
Investment in FHA-Insured Loans
(carried at amortized cost)(2)
Creekside Village, Beaverton, OR 11/25 -- 7.75% $ 4,936,415 $ 4,936,416 $ 442,754
Total Investment in FHA-Insured Loans - ------------ ------------
Originated Insured Mortgages 4,936,415 4,936,416
------------ ------------
Acquired Insured Mortgages
- --------------------------
Investment in FHA-Insured Loans
(carried at amortized cost)(2)
Eastdale Apts., Montgomery, AL 3/23 10/01 7.5% 6,392,866 4,970,003 592,406
North River Place, Chillecothe, OH 10/21 12/01 7.5% 2,993,803 2,332,593 279,509
Town Park Apts., Rockingham, NC 10/22 10/02 7.5% 618,215(4) 512,016 56,755(4)
------------ ------------
Total Investment in FHA-Insured Loans -
Acquired Insured Mortgages 10,004,884 7,814,612
------------ ------------
Total Investment in FHA-Insured Loans 14,941,299 12,751,028
------------ ------------
Acquired Insured Mortgages
- --------------------------
Investment in FHA-Insured Certificates
(carried at fair value)
Bay Pointe Apts., Lafayette, IN 2/23 10/02 7.5% $ 2,005,166(4) $ 1,947,813 $ 185,272(4)
Baypoint Shoreline Apts, Duluth, MN 1/22 10/01 7.5% 946,479(4) 919,448 87,967(4)
Berryhill Apts., Grass Valley, CA 1/21 11/02 7.5% 1,223,861(4) 1,189,081 115,899(4)
Brougham Estates II, Kansas City, KS 11/22 3/02 7.5% 2,519,834(4) 2,447,602 230,860(4)
College Green Apts., Wilmington, NC 3/23 2/02 7.5% 1,354,862(4) 1,315,970 123,455(4)
Fox Run Apts., Dothan, AL 10/19 11/99 7.5% 1,194,069(4) 1,160,391 116,242(4)
Kaynorth Apts., Lansing, MI 4/23 9/02 7.5% 1,838,685(4) 1,785,887 167,318(4)
Westbrook Apts., Kokomo, IN 11/22 9/02 7.5% 1,752,170(4) 1,702,156 163,177(4)
------------ ------------
Total Investment in FHA-Insured Certificates 12,835,126 12,468,348
------------ ------------
TOTAL INVESTMENT IN INSURED MORTGAGES $ 27,776,425 $ 25,219,376
============ ============
See notes to Schedule IV - Mortgage Loans on Real Estate
</TABLE>
<PAGE>
AMERICAN INSURED MORTGAGE INVESTORS
NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
(1) Under the Section 221 program of the National Housing Act of 1937, as
amended, a mortgagee has the right to assign a mortgage ("put") to FHA at
the expiration of 20 years from the date of final endorsement if the
mortgage is not in default at such time. Any mortgagee electing to assign
an FHA-insured mortgage to FHA will receive, in exchange therefor, HUD
debentures having a total face value equal to the then outstanding
principal balance of the FHA-insured mortgage plus accrued interest to the
date of assignment. These HUD debentures will mature 10 years from the date
of assignment and will bear interest at the "going Federal rate" at such
date. This assignment procedure is applicable to an insured mortgage which
had a firm or conditional FHA commitment for insurance on or before
November 30, 1983. The Partnership anticipates that each eligible insured
mortgage, for which a prepayment has not occurred and which has not been
sold, will be assigned to FHA at the expiration of 20 years from the date
of final endorsement. The Partnership, therefore, does not anticipate
holding any eligible insured mortgage beyond the expiration of 20 years
from final endorsement of that insured mortgage. The Partnership has
initiated its request to put these mortgages to FHA as they become due.
(2) Inclusive of closing costs and acquisition fees.
(3) Prepayment of these insured mortgages would be based upon the unpaid
principal balance at the time of prepayment.
(4) These amounts represent the Partnership's 50% interest in these insured
mortgages. The remaining 50% interest was acquired by American Insured
Mortgage Investors - Series 85, L.P. ("AIM 85").
(5) In addition, the servicer of the insured mortgages (primarily unaffiliated
third parties) is entitled to receive compensation for certain services
rendered in an amount up to ten basis points (0.10%) of the unpaid
principal balance of the insured mortgages.
(6) The mortgages underlying the Partnership's investment in FHA-Insured
Certificates and FHA-Insured Loans are non-recourse first liens on
multifamily residential developments.
(7) Principal and interest are payable at level amounts over the life of the
Insured Mortgages.
(8) A reconciliation of the carrying value of Insured Mortgages, for the years
ended December 31, 1999 and 1998, is as follows:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Beginning balance $26,349,115 $37,274,896
Gain on mortgage dispositions 67,150 1,290,352
Proceeds from disposition of mortgages (383,582) (11,343,290)(1)
Principal receipts on Insured Mortgages (267,690) (269,339)
Adjustment to unrealized gains on
investment in Insured Mortgages (545,617) (603,504)
----------- -----------
Ending balance $25,219,376 $26,349,115
=========== ===========
(1) This amount represents cash proceeds of $10,195,241 (as reflected in the
Statements of Cash Flows) and non-cash proceeds of $1,148,049.
</TABLE>
(9) The tax basis of the Insured Mortgages was approximately $22.2 million and
$22.9 million as of December 31, 1999 and 1998, respectively.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED
FROM THE ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH ANNUAL REPORT ON FORM 10-K.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 983
<SECURITIES> 12,468
<RECEIVABLES> 12,965
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,416
<CURRENT-LIABILITIES> 994
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,422
<TOTAL-LIABILITY-AND-EQUITY> 26,416
<SALES> 0
<TOTAL-REVENUES> 2,421
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 496
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,925
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,925
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,925
<EPS-BASIC> .19
<EPS-DILUTED> 0
</TABLE>
