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, 1999
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 60523
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: 630-218-8000
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
-1-
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Balance Sheets
March 31, 1999 and December 31, 1998
(unaudited)
Assets
------ 1999 1998
---- ----
Cash and cash equivalents (Note 1)................ $ 1,214,323 14,310
Accrued interest and other receivables............ - 5,613
Investment property held for sale (Notes 1 and 3):
Land............................................ - 140,101
Building and improvements....................... - 991,538
------------ ------------
Total assets...................................... $ 1,214,323 1,151,562
============ ============
Liabilities and Partners' Capital
Liabilities: ---------------------------------
Accounts payable................................ $ 25,308 5,817
Due to Affiliates (Note 2)...................... 2,171 472
Security deposits............................... - 10,416
Accrued real estate taxes....................... - 28,369
Unearned income (Note 1)........................ - 2,927
------------ ------------
Total liabilities................................. 27,479 48,001
------------ ------------
Partners' capital (Notes 1 and 2):
General Partner:
Capital contribution.......................... 500 500
Cumulative net income......................... 277,417 277,972
Cumulative cash distributions................. (276,657) (276,657)
------------ ------------
1,260 1,815
Limited Partners: ------------ ------------
Units of $500. Authorized 40,000 Units,
20,129.24 Units outstanding (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......................... 5,790,067 5,706,229
Cumulative cash distributions................. (13,586,443) (13,586,443)
------------ ------------
1,185,584 1,101,746
------------ ------------
Total Partners' capital........................... 1,186,844 1,103,561
------------ ------------
Total liabilities and Partners' capital........... $ 1,214,323 1,151,562
============ ============
See accompanying notes to financial statements.
-2-
INLAND MORTGAGE INVESTORS FUND L.P.
(a limited partnership)
Statements of Operations
For the three months ended March 31, 1999 and 1998
(unaudited)
1999 1998
Income: ---- ----
Rental income................................... $ 56,237 73,144
Interest income................................. - 1,287
Other income.................................... 2,227 3,017
------------ ------------
58,464 77,448
------------ ------------
Expenses:
Professional services to Affiliates............. 822 2,077
Professional services to non-affiliates......... 17,790 17,200
General and administrative expenses to
Affiliates.................................... 5,922 6,290
General and administrative expenses to
non-affiliates................................ 530 1,154
Property operating expenses to Affiliates....... 3,905 8,433
Property operating expenses to non-affiliates... 85,000 72,352
------------ ------------
113,969 107,506
------------ ------------
Operating loss.................................... (55,505) (30,058)
Gain on sale of investment property (Note 3)...... 138,788 -
------------ ------------
Net income (loss)................................. $ 83,283 (30,058)
============ ============
Net income (loss) allocated to:
General Partner................................. (555) (300)
Limited Partners................................ 83,838 (29,758)
------------ ------------
Net income (loss)................................. $ 83,283 (30,058)
============ ============
Net loss allocated to the one General
Partner Unit.................................... $ (555) (300)
============ ============
Net income (loss) per Unit allocated to Limited
Partners per Limited Partnership Units of
20,129.24....................................... $ 4.14 (1.48)
============ ============
See accompanying notes to financial statements.
-3-
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the three months ended March 31, 1999 and 1998
(unaudited)
1999 1998
---- ----
Cash flows from operating activities:
Net income (loss)............................... $ 83,283 (30,058)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Gain on sale of investment property........... (138,788) -
Changes in assets and liabilities:
Accrued interest and other receivables...... 5,613 1,944
Accounts payable............................ 19,491 2,578
Unearned income............................. (2,927) 1,409
Security deposits........................... (10,416) (3,076)
Accrued real estate taxes................... (28,369) 10,886
Due to Affiliates........................... 1,699 8,478
------------ ------------
Net cash used in operating activities............. (70,414) (7,839)
------------ ------------
Cash flows from investing activities:
Proceeds from sale investment property.......... 1,270,427 -
------------ ------------
Net cash provided by investing activities......... 1,270,427 -
------------ ------------
Net increase (decrease) in cash and cash
equivalents..................................... 1,200,013 (7,839)
Cash and cash equivalents at beginning of period.. 14,310 108,890
------------ ------------
Cash and cash equivalents at end of period........ $ 1,214,323 101,051
============ ============
See accompanying notes to financial statements.
-4-
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Notes to Financial Statements
March 31, 1999
(unaudited)
Readers of this Quarterly Report should refer to the Partnership's audited
financial statements for the fiscal year ended December 31, 1998, which are
included in the Partnership's 1998 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 collateralized 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.
Certain amounts in the 1998 financial statements have been reclassified to
conform with the 1999 presentation.
Offering costs have been offset against the Limited Partners' capital accounts.
The Partnership considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
The investment property consisted of a 62-unit apartment building located in
Aurora, Illinois. Apartment complex leases are generally for a term of one
year or less. The Partnership had determined that all leases relating to this
property were properly classified as operating leases; therefore rental income
was recorded when earned. The investment property was sold on March 30, 1999.
See Note 3 of the Notes to Financial Statements.
-5-
INLAND MORTGAGE INVESTORS FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 1999
(unaudited)
Statement of Financial Accounting Standards No. 128 "Earnings per Share" was
adopted by the Partnership and has been applied to all prior earnings periods
presented in the financial statements. The Partnership has no dilutive
securities.
No provision for Federal income taxes has been made as the liability for such
taxes is that of the Partners rather than the Partnership.
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 $2,171 and $472 was unpaid as of March 31, 1999 and
December 31, 1998, respectively.
The Partnership's investment property was managed by an Affiliate of the
General Partner which earned annual fees not to exceed 5% of gross rental
receipts. The Affiliate earned Property Management Fees of $3,250 and $3,956
for the three months ended March 31, 1999 and 1998, respectively, which are
included in property operating expenses to Affiliates.
(3) Sale of Investment Property
On March 30, 1999, the Partnership sold its remaining asset, a 62-unit
apartment building located at Indian Trail Road in Aurora, Illinois, to two
unaffiliated individuals for $1,275,000 on an all cash basis. The Partnership
had acquired title to this property on April 4, 1997 and had been accounting
for it as an investment property held for sale. The property had a basis of
$1,131,639, resulting in a gain of $138,788, net of closing costs. Net sales
proceeds will be distributed to the Limited Partners during second or third
quarter 1999 after a final reconciliation of property and Partnership expenses.
-6-
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Certain statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this quarterly report on
Form 10-Q constitute "forward-looking statements" within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. These forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the Partnership's actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking statements. These
factors include, among other things, federal, state or local regulations;
adverse changes in general economic or local conditions; inability of borrower
to meet financial obligations; uninsured losses; and potential conflicts of
interest between the Partnership and its Affiliates, including the General
Partner.
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, 1999,
cumulative distributions to Limited Partners totaled $13,586,443, of which
$7,558,390 represents principal amortization, payoffs on eleven loans,
prepayment penalties and proceeds from the sale of three properties.
At March 31, 1999, the Partnership had cash and cash equivalents aggregating
$1,214,323. The Partnership intends to use such funds to pay final expenses of
the Partnership and to provide cash distributions to Partners after a final
reconciliation of property and Partnership expenses.
Results of Operations
On March 30, 1999, the Partnership sold its remaining asset, a 62-unit
apartment building located at Indian Trail Road in Aurora, Illinois, to two
unaffiliated individuals for $1,275,000 on an all cash basis. The Partnership
had acquired title to this property on April 4, 1997 and had been accounting
for it as an investment property held for sale. The property had a basis of
$1,131,639, resulting in a gain of $138,788, net of closing costs. Net sales
proceeds will be distributed to the Limited Partners during second or third
quarter 1999 after a final reconciliation of property and Partnership expenses.
Rental income decreased for the three months ended March 31, 1999, as compared
to the three months ended March 31, 1998, due to lower occupancy at the Indian
Trail Road property.
Professional services to Affiliates decreased for the three months ended March
31, 1999, as compared to the three months ended March 31, 1998, due to a
decrease in accounting services required by the Partnership.
-7-
General and administrative expenses to non-affiliates decreased for the three
months ended March 31, 1999, as compared to the three months ended March 31,
1998, due primarily to decreases in postage, messenger fees and printing
expenses.
Property operating expenses to non-affiliates increased for the three months
ended March 31, 1999, as compared to the three months ended March 31, 1998, due
to increased expenditures to get the property ready for sale including
cleaning, decorating, landscaping and repairs and maintenance. Property
operating expenses to Affiliates decreased for the three months ended March 31,
1999, as compared to the three months ended March 31, 1998, due to a decrease
in management fees to Affiliates.
The following is a list of approximate occupancy levels for the Partnership's
investment property as of the end of each quarter during 1998 and 1999:
1998 1999
------------------------ ------------------------
at at at at at at at at
Properties 03/31 06/30 09/30 12/31 03/31 06/30 09/30 12/31
---------- ----- ----- ----- ----- ----- ----- ----- -----
Indian Trail Road 91% 85% 82% 79% N/A
Aurora, Illinois
Year 2000 Issues
On March 30, 1999, the Partnership sold its remaining asset, a 62-unit
apartment building located at Indian Trail Road in Aurora, Illinois. As a
result, Inland Mortgage Investors Fund, L.P. is expected to terminate during
second or third quarter of 1999 and, therefore, will not be impacted by the so-
called "Year 2000 Issue."
PART II - Other Information
Items 1 through 5(b) are omitted because of the absence of conditions under
which they are required.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits:
(27) Financial Data Schedule
(b) Reports on Form 8-K:
None
-8-
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, 1999
/S/ MARK ZALATORIS
By: Mark Zalatoris
Vice President
Date: May 13, 1999
/S/ KELLY TUCEK
By: Kelly Tucek
Principal Financial Officer and
Principal Accounting Officer
Date: May 13, 1999
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1214323
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1214323
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1214323
<CURRENT-LIABILITIES> 27479
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1186844
<TOTAL-LIABILITY-AND-EQUITY> 1214323
<SALES> 138788
<TOTAL-REVENUES> 197252
<CGS> 0
<TOTAL-COSTS> 88905
<OTHER-EXPENSES> 25064
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 83283
<INCOME-TAX> 0
<INCOME-CONTINUING> 83283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83283
<EPS-PRIMARY> 4.14
<EPS-DILUTED> 4.14
</TABLE>
