<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended March 31, 1996
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 #0-15759
Inland Mortgage Investors Fund, L.P.
(Exact name of registrant as specified in its charter)
Delaware #36-3436439
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
2901 Butterfield Road, Oak Brook, Illinois 60521
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: 708-218-8000
N/A
-------------------------------------------
(Former name, former address and former fiscal
year, if changed since last report)
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
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<PAGE>
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Balance Sheets
March 31, 1996 and December 31, 1995
(unaudited)
Assets
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash and cash equivalents (Note 1)................ $ 243,526 250,761
Accrued interest and other receivables............ 47,409 47,500
Mortgage loans receivable (Note 3)................ 5,606,139 5,624,974
------------ -----------
Total assets...................................... $ 5,897,074 5,923,235
============ ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable................................ $ 8,915 858
Due to Affiliates (Note 2)...................... 8,155 3,740
Unearned income (Note 1)........................ 6,393 7,243
------------ -----------
Total liabilities............................. 23,463 11,841
------------ -----------
Partners' capital (Notes 1 and 2):
General Partner:
Capital contribution.......................... 500 500
Cumulative net income......................... 263,577 257,535
Cumulative cash distributions................. (255,662) (249,319)
------------ -----------
8,415 8,716
------------ -----------
Limited Partners:
Units of $500. Authorized 40,000 Units,
20,129.24 Units outstanding at 1995 and
1994 (net of offering costs of $1,082,660,
of which $219,526 was paid to Affiliates)... 8,981,960 8,981,960
Cumulative net income......................... 5,463,364 5,362,869
Cumulative cash distributions................. (8,580,128) (8,442,151)
------------ -----------
5,865,196 5,902,678
------------ -----------
Total Partners' capital....................... 5,873,611 5,911,394
------------ -----------
Total liabilities and Partners' capital........... $ 5,897,074 5,923,235
============ ===========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
INLAND MORTGAGE INVESTORS FUND L.P.
(a limited partnership)
Statements of Operations
For the three months ended March 31, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
Income: 1996 1995
---- ----
<S> <C> <C>
Interest and fees on mortgage loans receivable
(Note 3)...................................... $ 131,519 143,810
Interest on investments......................... 6,529 7,918
Other income.................................... 992 -
--------- ---------
139,040 151,728
--------- ---------
Expenses:
Professional services to Affiliates............. 3,133 4,271
Professional services to non-affiliates......... 18,500 17,800
General and administrative expenses to
Affiliates.................................... 7,683 7,753
General and administrative expenses to
non-affiliates................................ 3,187 2,766
--------- ---------
32,503 32,590
--------- ---------
Net income........................................ $ 106,537 119,138
========= =========
Net income allocated to:
General Partner................................. 6,042 6,696
Limited Partners................................ 100,495 112,442
--------- ---------
Net income...................................... $ 106,537 119,138
========= =========
Net income allocated to the one General Partner
Unit............................................ $ 6,042 6,696
========= =========
Net income allocated to Limited Partners per
Limited Partnership Units of 20,129.24.......... $ 4.99 5.59
========= =========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the three months ended March 31, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income...................................... $ 106,537 119,138
Adjustments to reconcile net income to
net cash provided by operating activities:
Unearned income............................... (850) (1,078)
Changes in assets and liabilities:
Accrued interest and other receivables...... 91 246
Accounts payable............................ 8,057 1,398
Due to Affiliates........................... 4,415 6,176
---------- ----------
Net cash provided by operating activities......... 118,250 125,880
---------- ----------
Cash flows from investing activities:
Principal payments collected.................... 18,835 18,853
---------- ----------
Net cash provided by investing activities......... 18,835 18,853
---------- ----------
Cash flows from financing activities:
Distributions paid.............................. (144,320) (152,087)
---------- ----------
Net cash used in financing activities............. (144,320) (152,087)
---------- ----------
Net decrease in cash and cash equivalents......... (7,235) (7,354)
Cash and cash equivalents at beginning of period.. 250,761 265,659
---------- ----------
Cash and cash equivalents at end of period........ $ 243,526 258,305
========== ==========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Notes to Financial Statements
March 31, 1996
(unaudited)
Readers of this Quarterly Report should refer to the Partnership's audited
financial statements for the fiscal year ended December 31, 1995, which are
included in the Partnership's 1995 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such audited
financial statements have been omitted from this Report.
(1) Organization and Basis of Accounting
Inland Mortgage Investors Fund, L.P. (the "Partnership") was organized on
December 5, 1985, pursuant to the Delaware Revised Uniform Limited Partnership
Act, to make or acquire loans secured by mortgages on improved, income-producing
multi-family residential properties in or near the Chicago metropolitan area. On
February 12, 1986, the Partnership commenced an Offering of 40,000 Limited
Partnership Units pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933. The Offering terminated on February 12, 1987, with total
sales of 20,129.24 Units at $500 per Unit resulting in $10,064,620 of gross
offering proceeds, not including the General Partner's contribution of $500.
Inland Real Estate Investment Corporation is the General Partner.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
Offering costs have been offset against the Limited Partners' capital accounts.
Loan assumption fees received are deferred as unearned income and amortized over
the remaining life of the related loan.
The Partnership considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents and are carried at cost,
which approximates fair value due to the short maturity of those instruments.
The fair value of the mortgage loans receivable and related mortgage interest
receivable is based upon contractual payments to be received and current market
interest rates for issuance of mortgage loans with similar terms and maturities.
The estimated fair value of the mortgage loans receivable at March 31, 1996
approximates their carrying value.
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<PAGE>
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 1996
(unaudited)
Interest income on mortgage loans receivable is accrued when earned. The accrual
of interest, on loans that are in default, is discontinued when, in the opinion
of the General Partner, the borrower has not complied with loan work-out
arrangements. Once a loan has been placed on a non-accrual status, all cash
received is applied against the outstanding loan balance until such time as the
borrower has demonstrated an ability to make payments under the terms of the
original or renegotiated loan agreement. The Partnership intends to pursue
collection of all amounts currently due from the borrowers.
No provision for Federal income taxes has been made as the liability for such
taxes is that of the Partners rather than the Partnership.
Disclosure of the estimated fair value of financial instruments is made in
accordance with the requirements of Statement of Financial Accounting Standards
No. 107, "Disclosures About Fair Value of Financial Instruments." The estimated
fair value amounts have been determined by using available market information
and appropriate valuation methodologies.
In the opinion of management, the financial statements contain all the
adjustments necessary, which are of a normal recurring nature, to present fairly
the financial position and results of operations for the period presented
herein. Results of interim periods are not necessarily indicative of results to
be expected for the year.
(2) Transactions with Affiliates
The General Partner and its Affiliates are entitled to reimbursement for
salaries and expenses of employees of the General Partner and its Affiliates
relating to the administration of the Partnership. Such costs are included in
professional services to Affiliates and general and administrative expenses to
Affiliates, of which $8,155 and $3,740 was unpaid as of March 31, 1996 and
December 31, 1995, respectively.
Inland Mortgage Servicing Corporation, a subsidiary of the General Partner,
services the Partnership's mortgage loans receivable. Its services include
processing mortgage collections and escrow deposits and maintaining related
records. For these services, the Partnership is obligated to pay fees at an
annual rate equal to 1/4 of 1% of the outstanding mortgage loans receivable
balance of the Partnership. Such fees of $3,511 and $3,837 for the three months
ended March 31, 1996 and 1995, respectively, have been incurred and paid to the
subsidiary and are included in the Partnership's general and administrative
expenses to Affiliates.
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<PAGE>
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 1996
(unaudited)
In connection with the sales of 6910 North Sheridan, 5420 North Kenmore and
712-720 West Grace, sales commissions of $18,125, $27,500 and $14,553,
respectively, that have not been included in the costs of sale, may be payable
to an Affiliate of the General Partner to the extent that the Limited Partners
have received their Original Capital plus a return thereon as specified in the
Partnership Agreement.
(3) Mortgage Loans Receivable
Mortgage loans receivable are collateralized by first mortgages and wrap
mortgages on multi-family residential properties located in Chicago, Illinois or
its surrounding metropolitan area. As additional collateral, the Partnership
holds assignments of rents and leases or personal guarantees of the borrowers.
Generally, the mortgage notes are payable in equal monthly installments based on
20 or 30 year amortization periods.
(4) Subsequent Events
On April 2, 1996, the loan collateralized by the property located at 5420 North
Kenmore, Chicago was prepaid by the borrower. The total proceeds received from
the prepayment were $840,077, which represented the current loan balance and
accrued interest. The proceeds were distributed to the Limited Partners in April
1996.
In April 1996, the Partnership paid a distribution of $969,890 to the Partners,
of which $963,848 was distributed to the Limited Partners and $6,042 was
distributed to the General Partner. Of the $963,848 distributed to the Limited
Partners, $849,049 was principal amortization and principal prepayment of the
loan collateralized by the property located at 5420 North Kenmore and the
remainder was from net interest income.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited
Partnership Units pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933. The Offering terminated on February 12, 1987, with a
total of 20,129 Units being sold to the public at $500 per Unit resulting in
$10,064,620 of gross offering proceeds which were received by the Partnership,
not including $500 which is the General Partner's contribution. The Partnership
funded fifteen loans between October 1986 and August 1988 utilizing $8,466,875
of capital proceeds collected, net of participations. As of March 31, 1996,
cumulative distributions to Limited Partners totaled $8,580,128, of which
$2,950,996 represents principal amortization, payoffs on seven loans, prepayment
penalties and proceeds from the sale of three properties.
At March 31, 1996, the Partnership had cash and cash equivalents aggregating
$243,526 which will be utilized for future distributions to partners and working
capital requirements. The sources of future liquidity and distributions to the
Limited and General Partners are expected to be from the collection of interest
and repayment of principal of the Partnership's mortgage loan investments. To
the extent that these sources are insufficient to meet the Partnership's needs,
the Partnership may rely on advances from Affiliates of the General Partner,
other short-term financing, or may liquidate certain mortgage loans or other
assets.
At March 31, 1996, the Partnership had eight mortgage loans receivable totaling
$5,606,139. The maturity dates range from January 1997 to October 2000. When and
as the Partnership receives Repayment Proceeds as a result of the sale or
repayment of a loan, the Repayment Proceeds which are available for distribution
will be distributed to the Limited Partners. When the loans are repaid, cash
flows from operating activities will decrease as a result of the decrease in
interest income earned by the Partnership.
Results of Operations
The maturity dates of the eight remaining mortgage loans receivable range from
January 1997 to October 2000. As the loans are repaid by the borrowers and
Repayment Proceeds are distributed to the Limited Partners, interest income will
decrease accordingly.
Interest income on mortgage loans receivable decreased for the three months
ended March 31, 1996, as compared to the three months ended March 31, 1995, due
primarily to the prepayment of the mortgage loan receivable collateralized by
the property located at 2659 South Austin on May 23, 1995. Additionally, the
loan collateralized by the property located at 7434-42 North Hermitage was
modified in March 1995 to extend the loan for five years at an interest rate of
10.5% (a decrease from 11%). This decrease was partially offset by an increase
in interest income on mortgage loans receivable due to an increase in the
adjustable interest rate (5.687% to 6.747%) of the mortgage loan receivable
collateralized by the property located at 7428 West Washington in April 1995.
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<PAGE>
Interest on investments decreased for the three months ended March 31, 1996, as
compared to the three months ended March 31, 1995, due to a decrease in interest
rates.
Professional services to Affiliates decreased for the three months ended March
31, 1996, as compared to the three months ended March 31, 1995, due to a
decrease in legal and accounting services required by the Partnership.
Professional services to non-affiliates increased for the three months ended
March 31, 1996, as compared to the three months ended March 31, 1995, due to an
increase in outside accounting fees.
General and administrative expenses to non-affiliates increased for the three
months ended March 31, 1996, as compared to the three months ended March 31,
1995, primarily due to an increase in postage costs.
PART II
Items 1 through 6(b) are omitted because of the absence of conditions under
which they are required.
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<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.
INLAND MORTGAGE INVESTORS FUND, L.P.
By: Inland Real Estate Investment Corporation
General Partner
/S/ ROBERT D. PARKS
By: Robert D. Parks
Chairman
Date: May 13, 1996
/S/ MARK ZALATORIS
By: Mark Zalatoris
Vice President
Date: May 13, 1996
/S/ CYNTHIA M. HASSETT
By: Cynthia M. Hassett
Principal Financial Officer and
Principal Accounting Officer
Date: May 13, 1996
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 243,526
<SECURITIES> 0
<RECEIVABLES> 5,653,548
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 290,935
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,897,074
<CURRENT-LIABILITIES> 23,463
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 5,873,611
<TOTAL-LIABILITY-AND-EQUITY> 5,897,074
<SALES> 0
<TOTAL-REVENUES> 139,040
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 32,503
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 106,537
<INCOME-TAX> 0
<INCOME-CONTINUING> 106,537
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,537
<EPS-PRIMARY> 4.99
<EPS-DILUTED> 4.99
</TABLE>
