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 March 31, 1995 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: 0-14314
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 47-0695511
(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>
Part I. Financial Information
Item 1. Financial Statements
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1995
(Unaudited) Dec. 31, 1994
-------------- --------------
<S> <C> <C>
Assets
Cash and temporary cash investments, at cost which
approximates market value (Note 4) $ 920,572 $ 840,454
Investment in tax-exempt mortgage loans, net of
allowance for loan losses (Note 5) 66,026,000 66,026,000
Interest receivable 523,198 496,939
Other assets 32,142 16,263
-------------- --------------
$ 67,501,912 $ 67,379,656
============== ==============
Liabilities and Partners' Capital
Liabilities
Accounts payable (Note 6) $ 99,533 $ 125,198
Distribution payable (Note 3) 458,133 453,597
-------------- --------------
557,666 578,795
-------------- --------------
Partners' Capital
General Partner 4,887 3,453
Beneficial Unit Certificate Holders
($6.71 per BUC in 1995 and $6.69 in 1994) 66,939,359 66,797,408
-------------- --------------
66,944,246 66,800,861
-------------- --------------
$ 67,501,912 $ 67,379,656
============== ==============
</TABLE>
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the For the
Quarter Ended Quarter Ended
March 31, 1995 March 31, 1994
-------------- --------------
<S> <C> <C>
Income
Mortgage investment income $ 1,600,017 $ 1,559,725
Interest income on temporary cash investments 8,884 5,352
Contingent interest income (Note 5) 44,967 57,628
-------------- --------------
1,653,868 1,622,705
Expenses
General and administrative expenses (Note 6) 138,792 124,942
-------------- --------------
Net income $ 1,515,076 $ 1,497,763
============== ==============
Net income allocated to:
General Partner $ 25,943 $ 28,808
BUC Holders 1,489,133 1,468,955
-------------- --------------
$ 1,515,076 $ 1,497,763
============== ==============
Net income per BUC $ .1492 $ .1472
============== ==============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' CAPITAL
FOR THE QUARTER ENDED MARCH 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Beneficial Unit
General Certificate
Partner Holders Total
-------------- ---------------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1994 $ 3,453 $ 66,797,408 $ 66,800,861
Net income 25,943 1,489,133 1,515,076
Cash distributions paid or accrued (Note 3) (24,509) (1,347,182) (1,371,691)
-------------- ---------------- ---------------
Balance at March 31, 1995 $ 4,887 $ 66,939,359 $ 66,944,246
============== ================ ===============
</TABLE>
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the For the
Quarter Ended Quarter Ended
March 31, 1995 March 31, 1994
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 1,515,076 $ 1,497,763
Adjustments to reconcile net income to net cash
provided by operating activities
Decrease (increase) in interest receivable (26,259) 7,615
Increase in other assets (15,879) (4,645)
Decrease in accounts payable (25,665) (12,884)
--------------- ---------------
Net cash provided by operating activities 1,447,273 1,487,849
Cash flow used in financing activity
Distributions paid (1,367,155) (1,374,761)
--------------- ---------------
Net increase in cash and temporary cash investments 80,118 113,088
Cash and temporary cash investments at beginning of period 840,454 578,111
--------------- ---------------
Cash and temporary cash investments at end of period $ 920,572 $ 691,199
=============== ===============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. ORGANIZATION
America First Tax Exempt Mortgage Fund Limited Partnership (the Partnership)
was formed on November 11, 1985, under the Delaware Revised Uniform Limited
Partnership Act for the purpose of acquiring a portfolio of federally
tax-exempt participating first mortgage loans collateralized by
income-producing real estate consisting of multifamily residential
apartments. The Partnership will terminate on December 31, 2015, unless
terminated earlier under the provisions of the Partnership Agreement. The
General Partner of the Partnership is America First Capital Associates Limited
Partnership Two (AFCA 2).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A)Financial Statement Presentation
The financial statements of the Partnership are prepared without audit on
the accrual basis of accounting in accordance with generally accepted
accounting principles. In the opinion of management, all normal and
recurring adjustments necessary to present fairly the financial position at
March 31, 1995, and results of operations for all periods presented have
been made.
B)Investment in Tax-Exempt Mortgage Loans
The Partnership records its investment in tax-exempt mortgage loans at cost.
Accrual of mortgage interest income is excluded from income, when, in the
opinion of management, collection of such interest is doubtful. This
interest is recognized as income when it is received.
C)Allowance for Loan Losses
The allowance for loan losses is a valuation reserve which has been
established at a level that management feels is adequate to absorb potential
losses on outstanding loans. The allowance is based upon management's
estimates; however, the ultimate realized values may vary from the current
estimates. These estimates are periodically reviewed and, as adjustments
become necessary, they are reported in the period in which they become
known.
D)Income Taxes
No provision has been made for income taxes since the Beneficial Unit
Certificate (BUC) Holders are required to report their share of the
Partnership's taxable income for federal and state income tax purposes.
E)Temporary Cash Investments
Temporary cash investments are invested in federally tax-exempt securities
purchased with an original maturity of three months or less.
F)Net Income per BUC
Net income per BUC has been calculated based on the number of BUCs
outstanding (9,979,128) for all periods presented.
3. PARTNERSHIP INCOME, EXPENSES AND CASH DISTRIBUTIONS
The Partnership Agreement contains provisions for the distribution of Net
Interest Income and Net Residual Proceeds and for the allocation of income and
expenses for tax purposes among AFCA 2 and BUC Holders.
Cash distributions included in the financial statements represent the actual
cash distributions made during each period and the cash distributions accrued
at the end of each period.
<PAGE>
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
4. PARTNERSHIP RESERVE ACCOUNT
The Partnership maintains a reserve account which totaled $918,147 at March
31, 1995. The reserve account was established to maintain working capital for
the Partnership and is available to supplement distributions to BUC Holders or
for any other contingencies related to the ownership of the mortgage loans and
the operation of the Partnership.
5. INVESTMENT IN TAX-EXEMPT MORTGAGE LOANS
Descriptions of the tax-exempt mortgage loans owned by the Partnership at
March 31, 1995, are as follows:
<TABLE>
Base
Number Maturity Interest Carrying
Property Name Location of Units Date Rate1 Amount
- ------------------------ ----------------- -------- -------- --------- ---------------
<S> <C> <C> <C> <C> <C>
Performing loans:
Shoals Crossing Atlanta, GA 176 12/01/09 8.5% $ 4,500,000
Arama Apartments Miami, FL 293 07/01/10 8.5% 12,100,000
---------------
$ 16,600,000
---------------
Nonperforming loans:2
Woodbridge Apts. of
Bloomington III Bloomington, IN 280 12/01/15 8.5% $ 12,600,000
Ashley Pointe at
Eagle Crest Evansville, IN 150 12/01/15 8.5% 6,700,000
Woodbridge Apts. of
Louisville II Louisville, KY 190 12/01/15 8.5% 8,976,000
Northwoods Lake
Apartments Duluth, GA 492 12/01/06 8.5% 25,250,000
Ashley Square Des Moines, IA 144 12/01/09 8.5% 6,500,000
---------------
$ 60,026,000
Less allowance for loan losses (10,600,000)
---------------
$ 49,426,000
---------------
Balance at March 31, 1995 $ 66,026,000
===============
</TABLE>
1 In addition to the base interest rate shown, the notes bear additional
contingent interest as defined in each revenue note which, when combined with
the base interest, is limited to a cumulative, noncompounded amount not greater
than 16% per annum. The Partnership received additional contingent interest
from Arama Apartments of $44,967 during 1995.
2 Nonperforming loans are loans for which interest is recognized as income
when it is received and is at a rate lower than the base interest rate. The
amount of foregone interest on nonperforming loans for 1995 was $28,286.
<PAGE>
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
6. TRANSACTIONS WITH RELATED PARTIES
Substantially all of the Partnership's general and administrative expenses are
paid by AFCA 2 or an affiliate and are reimbursed by the Partnership. The
amount of such expenses reimbursed to AFCA 2 during 1995 was $187,125. The
reimbursed expenses are presented on a cash basis and do not reflect accruals
made at quarter end.
AFCA 2 received from property owners administrative fees of $13,613 during
1995. Since these fees are not Partnership expenses, they have not been
reflected in the accompanying financial statements. In addition, pursuant to
the Limited Partnership Agreement, AFCA 2 is entitled to an administrative fee
from the Partnership in the event the Partnership becomes the equity owner of
a property by reason of foreclosure. AFCA 2 was entitled to receive
approximately $359,000 in administrative fees from the Partnership for the
year ended December 31, 1989. The payment of these fees, which has been
deferred by AFCA 2, is contingent upon, and will be paid only out of future
profits realized by the Partnership from the disposition of assets. This
amount will be recorded as an expense by the Partnership when it is probable
that these fees will be paid.
An affiliate of AFCA 2 has been retained to provide property management
services for Ashley Square and Northwoods Lake Apartments. 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 $43,048 in 1995.
<PAGE>
Item 2.
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Liquidity and Capital Resources
The Partnership originally acquired 14 tax-exempt mortgage loans, the proceeds
of which were used to provide construction and/or permanent financing for 14
multifamily housing properties. On June 1, 1993, the Partnership transferred
to America First REIT, Inc. (REIT) seven real estate properties acquired in
foreclosure. At March 31, 1995, the Partnership continued to hold seven
tax-exempt mortgage loans with a carrying value, net of allowance for loan
losses, equal to $66,026,000.
The following table shows the various occupancy levels of the properties
financed by the Partnership at March 31, 1995.
<TABLE>
Number Percentage
Number of Units of Units
Property Name Location of Units Occupied Occupied
- ------------------------------------- ------------------ --------- ---------- -----------
<S> <C> <C> <C> <C>
Woodbridge Apts. of Bloomington III Bloomington, IN 280 258 92%
Ashley Pointe at Eagle Crest Evansville, IN 150 142 95%
Woodbridge Apts. of Louisville II Louisville, KY 190 175 92%
Northwoods Lake Apartments Duluth, GA 492 485 99%
Shoals Crossing Atlanta, GA 176 161 91%
Ashley Square Des Moines, IA 144 144 100%
Arama Apartments Miami, FL 293 289 99%
--------- ---------- -----------
1,725 1,654 96%
========= ========== ===========
</TABLE>
The principal amounts of the tax-exempt mortgage loans do not amortize over
their terms. The tax-exempt mortgage loans provide for the payment of base
interest at a fixed rate. In addition, the Partnership may earn contingent
interest based on a participation in the net cash flow and net sale or
refinancing proceeds from the real estate collateralizing the tax-exempt
mortgage loans. The interest payments received on the tax-exempt mortgage loans
and interest on temporary cash investments represent the principal sources of
the Partnership's income and distributable cash. The Partnership may draw on
the reserve to pay operating expenses or to supplement cash distributions to
Beneficial Unit Certificate (BUC) Holders.
During the first quarter ended March 31, 1995, undistributed income totaling
$143,385 was placed in reserves. The total amount held in reserves at March
31, 1995, was $918,147. Future distributions to BUC Holders will depend upon
the amount of base and contingent interest received on the mortgage loans,
the size of the reserves established by the Partnership and the extent to which
withdrawals are made from reserves. Continuance of cash distributions at the
current rate may require withdrawals from Partnership reserves.
<PAGE>
AMERICA FIRST TAX EXEMPT MORTGAGE FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
DISTRIBUTIONS
Cash distributions paid or accrued per BUC were as follows:
<TABLE>
For the For the
Quarter Ended Quarter Ended
March 31, 1995 March 31, 1994
-------------- --------------
<S> <C> <C>
Regular monthly distributions
Income $ .1350 $ .1350
============== ==============
Distributions
Paid out of current and prior undistributed cash flow $ .1350 $ .1350
============== ==============
</TABLE>
Asset Quality
On a regular basis, management reviews each mortgage loan in the Partnership's
portfolio in order to assess its collectibility and, if necessary, the
Partnership provides a valuation reserve for potential losses. Internal
property valuations and reviews performed during the first quarter of 1995
indicated that the mortgage loans recorded on the balance sheet at March 31,
1995, required no adjustments to their current carrying amounts.
The overall status of the Partnership's mortgage loans has generally remained
constant since December 31, 1994.
RESULTS OF OPERATIONS
The table below compares the results of operations for each period shown.
<TABLE>
For the For the Increase
Quarter Ended Quarter Ended (Decrease)
March 31, 1995 March 31, 1994 From 1994
--------------- --------------- ---------------
<S> <C> <C> <C>
Mortgage investment income $ 1,600,017 $ 1,559,725 $ 40,292
Interest income on temporary cash investments 8,884 5,352 3,532
Contingent interest income 44,967 57,628 (12,661)
--------------- --------------- ---------------
1,653,868 1,622,705 31,163
General and administrative expenses 138,792 124,942 13,850
--------------- --------------- ---------------
Net income $ 1,515,076 $ 1,497,763 $ 17,313
=============== =============== ===============
</TABLE>
The increase in mortgage investment income for the quarter ended March 31,
1995, compared to the quarter ended March 31, 1994, is attributable to
increased cash flow from properties collateralizing the tax-exempt mortgage
loans. The decrease in contingent interest income is attributable to
decreased cash flow from the Arama Apartments primarily due to an increase in
operating expenses. The increase in interest income on temporary cash
investments is attributable to an increase in the amount of undistributed
income held in reserves and to slightly higher interest rates. General and
administrative expenses increased as a result of overall expense increases.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4(a) Agreement of Limited Partnership dated November 11, 1985
(incorporated herein by reference to Form 10-K dated
December 31, 1986 filed pursuant to Section 13 or 15(d) of
the Securities Act of 1934 by America First Tax Exempt
Mortgage Fund Limited Partnership (Commission File
No. 0-14314)).
4(b) Form of Certificate of Beneficial Unit Certificate
(incorporated herein by reference to Form S-11
Registration Statement filed August 30, 1985 with the
Securities and Exchange Commission by America First Tax
Exempt Mortgage Fund Limited Partnership (Commission File
No. 2-99997)).
(b) Form 8-K
The registrant did not file a report on Form 8-K during the
quarter for which this report is filed.
<PAGE>
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: May 12, 1995 AMERICA FIRST TAX EXEMPT MORTGAGE
FUND LIMITED PARTNERSHIP
By America First Capital
Associates Limited
Partnership Two, General
Partner
By America First Companies L.L.C.,
General Partner
By /s/ Michael Thesing
Michael Thesing
Vice President, Secretary,
Treasurer and Chief Financial
Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 920,572
<SECURITIES> 0
<RECEIVABLES> 523,198
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,443,770
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 67,501,912
<CURRENT-LIABILITIES> 557,666
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 66,944,246
<TOTAL-LIABILITY-AND-EQUITY> 67,501,912
<SALES> 0
<TOTAL-REVENUES> 1,653,868
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 138,792
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,515,076
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,515,076
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,515,076
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
