13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________________
Commission file number 0-18226
NYLIFE Government Mortgage Plus Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts 13-3487910
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) (Identification No.)
51 Madison Avenue, New York, New York 10010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 576-7300
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 __
Yes X No __
NYLIFE Government Mortgage Plus
Limited Partnership
September 30, 1995
INDEX
Page No.
Part I - Financial Information (Unaudited)
Balance Sheets as of September 30, 1995
and December 31, 1994 3
Statement of Operations for the Three and
Nine Months Ended September 30, 1995 and 1994 4
Statement of Partners' Capital for the
Nine Months Ended September 30, 1995 and
for the Year Ended December 31, 1994 5
Statement of Cash Flows for the Nine Months
Ended September 30, 1995 and 1994 6
Notes to Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II - Other Information 12
Signatures 13
-2-
NYLIFE Government Mortgage Plus Limited Partnership
Balance Sheets
as of September 30, 1995 and December 31, 1994
1995 1994
Assets (Unaudited)
Cash and cash equivalents $ 900,367 $ 950,967
Interest receivable 221,107 280,773
Investments in Participating
Insured Mortgages 30,677,598 31,343,138
Investments in Participating
Guaranteed Loans 400,100 1,495,900
Total assets $ 32,199,172 34,070,778
Liabilities and Partners' Capital
Due to affiliates $ 75,000 $ 100,000
Accrued liabilities 44,384 88,253
Total liabilities 119,384 188,253
Partners' capital:
Capital contributions
net of public offering expenses 36,028,557 36,028,557
Accumulated earning 16,859,159 14,419,332
Cumulative distributions (20,807,928) (16,565,364)
Total partners' capital 32,079,788 33,882,525
Total liabilities and partners'
capital $ 32,199,172 $ 34,070,778
The accompanying notes are an integral part of these financial statements
-3-
NYLIFE Government Mortgage Plus Limited Partnership
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
1994 1995 1994 1995
<S> <C> <C> <C> <C>
Income
Interest-cash and cash equivalent $ 9,150 $ 25,911 $ 55,437 $ 66,738
Interest-Mortgages (net of
amortization of acquisition costs) 598,436 651,582 2,282,186 1,969,075
Other income - - 324,000 -
Total income 607,586 677,493 2,661,623 2,035,813
Expenses
General and administrative 59,295 87,893 150,671 219,846
Asset management fees 21,729 39,542 71,125 118,625
Total expenses 81,024 127,435 221,796 338,471
Net income $ 526,562 $ 550,058 $2,439,827 $1,697,342
Net income allocated
General Partner $ 10,531 $ 11,001 $ 33,390 $ 33,947
Corporate Limited Partner 13 13 59 41
Unitholders 516,018 539,044 2,406,378 1,663,354
$ 526,562 $ 550,058 $2,439,827 $1,697,342
Net income per Unit $ .06 $ .07 $ .29 $ .20
Number of Units 8,168,457.7 8,168,457.7 8,168,457.7 8,168,457.7
The accompanying notes are an integral part of these financial statements
-4-
</TABLE>
NYLIFE Government Mortgage Plus Limited Partnership
Statement of Partners' Capital
for the Nine Months Ended September 30, 1995 (Unaudited)
and for the Year Ended December 31, 1994
Corporate Total
Limited General Partners'
Unitholders Partner Partner Capital
Balance at January 1, 1994 $35,994,847 $ 966 $ 2,494 $35,998,307
Net income 2,201,726 55 44,934 2,246,715
Distributions (4,275,142) (105) (87,250) (4,362,497)
Balance at December 31, 1994 33,921,431 916 (39,822) 33,882,525
Net income 2,406,378 59 33,390 2,439,827
Distributions (4,206,871) (103) (35,590) (4,242,564)
Balance at September 30, 1995 $32,120,938 $ 872 $ (42,022) $32,079,788
The accompanying notes are an integral part of these financial statements
-5-
NYLIFE Government Mortgage Plus Limited Partnership
Statement of Cash Flows
for the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
Cash flows from operating activities:
Net income $ 2,439,827 $ 1,697,342 "
Adjustments to reconcile net income to net cash
flows from operating activities:
Amortization of acquisition costs 570,203 13,371
Changes in assets and liabilities:
Decrease (increase) in interest receivable 59,666 (43,171)
(Decrease) increase in due to affiliates (25,000) 75,000
Decrease in accrued liabilities (43,869) (42,641)
Total adjustments 561,000 2,559
Net cash provided by operating activities 3,000,827 1,699,901
Cash flows from investing activities:
Repayment of Participating Insured Mortgages 95,337 80,197 "
Repayment of Participating Guaranteed Loans 1,095,800 -
Net cash provided by investing activities 1,191,137 80,197
Cash flows from financing activities:
Distributions to partners (4,242,564) (1,791,757)
Net cash used in financing activities (4,242,564) (1,791,757)
Net decrease in cash and cash equivalents (50,600) (11,659)
Cash and cash equivalents at beginning of period 950,967 2,919,058
Cash and cash equivalents at end of period $ 900,367 $ 2,907,399
The accompanying notes are an integral part of these financial statement
-6-
NYLIFE Government Mortgage Plus Limited Partnership
Notes to Financial Statements
September 30, 1995
(Unaudited)
NOTE 1 - GENERAL
The accompanying financial statements and related notes should be
read in conjunction with the Partnership's 1994 Annual Report on
Form 10-K. The Partnership terminates on December 31, 2028,
unless terminated earlier by the occurrence of certain events as
set forth in the Partnership Agreement.
The summarized financial information contained herein is
unaudited; however, in the opinion of management, all adjustments
(which include normal recurring adjustments) necessary for a fair
presentation of financial information have been included.
All capitalized terms used in these Notes to Financial
Statements, unless otherwise defined herein, shall have the
meanings set forth in the Partnership Agreement.
Certain amounts in the 1994 financial statements have been
reclassified to conform to the 1995 presentation.
NOTE 2 - INVESTMENTS IN MORTGAGES
Participating Insured Mortgages
Investment in Participating Insured Mortgages ("PIMs") on the
balance sheets as of September 30, 1995 and December 31, 1994 is
comprised of the following:
September 30, 1995:
Cross Creek The Highlands Signature Place Total
Investment in PIMs $7,226,406 $13,154,200 $ 9,756,900 $30,137,506
Principal repayments (93,354) (155,527) (90,101) (338,982)
Acquisition fees and
expenses net of
accumulated amortization 294,478 - 584,596 879,074
$7,427,530 $12,998,673 $10,251,395 $30,677,598
December 31, 1994:
Cross Creek The Highlands Signature Place Total
Investment in PIMs $7,226,406 $13,154,200 $ 9,756,900 $30,137,506
Principal repayments (71,831) (112,469) (61,943) (246,243)
Acquisition fees and
expenses net of
accumulated amortization 297,992 565,112 588,771 1,451,875
$7,452,567 $13,606,843 $10,283,728 $31,343,138
-7-
Participating Guaranteed Loans
Investment in Participating Guaranteed Loans ("PGLs") on the
balance sheets as of September 30, 1995 and December 31, 1994 is
comprised of the following:
September 30, 1995:
Cross Creek The Highlands Signature Place Total
Investment in PGL $ 400,000 $ 1,095,800 $100 $ 1,495,900
Principal Repayment (1) - (1,095,800) - (1,095,800)
$ 400,000 $ - $100 $ 400,100
December 31, 1994: Cross Creek The Highlands Signature Place Total
Investment in PGL $ 400,000 $ 1,095,800 $100 $1,495,900
(1) As described below in Recent Developments - the Highlands,
the Highlands PGL was repaid in full upon the sale of the
Highlands on January 31, 1995.
As the Earn-out periods for each of the Properties expired during
1994, the Partnership has no further commitments to fund amounts
under the PGLs.
Recent Developments - The Highlands
As discussed in the Partnership's 1994 Annual Report on Form 10-K
and Current Report on Form 8-K dated March 10, 1995, in
accordance with the terms and conditions of the Purchase and Sale
Agreement dated October 14, 1994, the Highlands Borrower sold the
Highlands to Richland Properties, Inc. (the "New Highlands
Borrower") effective January 31, 1995. The sale closed in escrow
pending the receipt by the Partnership of a new GNMA certificate
in the principal amount of $13,037,676 and bearing interest at
7.625% per annum. The new GNMA certificate was received by the
Partnership on February 15, 1995, at which time the sale was
completed and the Partnership received the payments described
below, together with the other closing documents. In addition, a
Mutual Release was delivered, effective January 31, 1995,
pursuant to which all obligations of, and claims against, the
Highlands Borrower and its general partners were released by the
Partnership and Related Mortgage Company ("RMC"), and all
obligations of, and claims against, the Partnership and RMC were
released by the Highlands Borrower and its general partners.
The Partnership retained its beneficial interest in the Highlands
Mortgage (the "Modified Mortgage") and related promissory note
(the "Modified Note"), which were modified to provide for (a)
prepayment at any time with a prepayment charge payable to RMC
equal to 1% of the outstanding principal, and (b) a reduction in
the interest rate from 8.5% to 7.875% per annum, one-quarter of
one percent of which is retained by RMC and GNMA as a servicing
and guarantee fee. Accordingly, the Partnership earns an
interest rate of 7.625% per annum. The New Highlands Borrower is
required pursuant to the Modified Note and Modified Mortgage to
make equal monthly payments of principal and interest until
maturity on May 15, 2032. The Modified Mortgage is coinsured by
RMC and HUD under Section 221(d)(4) of the National Housing Act
for new construction of multi-family residential properties.
The Supplemental Interest Agreement was terminated, and the
Partnership and the New Highlands Borrower entered into an
Amended and Restated Subordinated Mortgage and Security Agreement
to secure the Partnership's call option. The Partnership has the
-8-
option, upon six months written notice, to require prepayment in
full of the Modified Note on or after January 31, 2005. No
prepayment fee will be imposed if the Partnership exercises this
option. Enforcement of this option would require the termination
of the coinsurance contract and the surrender of the new GNMA
certificate. In addition, the General Partner may decide to sell
the new GNMA certificate at any time prior to maturity if it
determines that prevailing market conditions warrant such sale.
The Additional Interest Agreement has been amended and restated
(the "Amended and Restated Agreement") to provide that the
Partnership will no longer be entitled to any participations in
net cash flow or net appreciation in value of the Highlands.
Concurrent with the sale of the Highlands as described above, the
Highlands PGL was repaid as the Partnership received $2,439,955,
which included $1,095,800 of principal, $210,798 of accrued
interest, a prepayment fee of $324,000 and participation in net
appreciation of the Highlands of $809,357. Subsequent thereto,
the Partnership received participation in net cash flow of the
Highlands in the amount of $23,105. The Partnership distributed
these proceeds, along with first quarter distributable cash flow
from operations, to its Partners on May 15, 1995.
Also on January 31, 1995, the Partnership and the Highlands
Borrower (together with its partners) entered into a Special
Closing Agreement, pursuant to which each of the two letters of
credit held by the Partnership were reduced from $75,000 to
$17,500. The two letters of credit are held as security for the
obligations of the Highlands Borrower and its partners under the
Special Closing Agreement. Such obligations represent the
payment of additional taxes due on the recording of the original
loan documents, in the event the State of Florida determines that
such amounts are due. The Highlands Borrower will be obligated
to pay 35% of these additional taxes in excess of the first
$35,000 of such liability, with the balance of such liability
remaining the responsibility of the Partnership.
NOTE 3 - TRANSACTIONS WITH THE GENERAL PARTNER
The following is a summary of the fees earned and reimbursable
expenses incurred by the General Partner for the nine months
ended September 30, 1995 and 1994:
Total for the nine Total for the nine
Unpaid at months ended months ended
September 30, 1995 September 30, 1995 September 30, 1995
Asset management fees $ - $ 71,125 $118,424
Reimbursement of general
and administrative
expenses to the
General Partner 75,000 75,000 93,750
$75,000 $146,125 $212,174
-9-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Partnership's cash and cash equivalents balance at September
30, 1995 consists of $426,266 of working capital reserves as well
as cash generated from operations net of accrued interest. The
Partnership's working capital reserves are invested in short-term
obligations of the United States government and other cash
equivalents.
The Partnership derives its income primarily from its investments
in PIMs, which are long-term, fixed interest rate Government
National Mortgage Association ("GNMA") securities, guaranteed as
to the timely payment of principal and interest by GNMA and
backed by the full faith and credit of the United States
Government. The Partnership's only operating expenses are
general and administrative expenses which include audit and tax
return preparation fees, printing and postage costs for quarterly
and annual reports, and reimbursement to the General Partner for
reimbursable expenses incurred in accordance with the Partnership
Agreement. In addition, the Partnership pays an Asset Management
Fee to the General Partner of .5% annually of the average
aggregate amount invested in the Cross Creek and Signature Place
Mortgages. As discussed in Note 2 to the financial statements,
the Amended and Restated Agreement entered into as a condition of
the sale of the Highlands provides that the Partnership will no
longer be entitled to any participations in net cash flow or net
appreciation of the Highlands. Accordingly, the General Partner
has decided to forego an asset management fee with respect to the
aggregate amount invested in the Highlands Modified Mortgage.
After the payment of general and administrative expenses, the
Partnership distributes all of its income plus principal
repayments on the PIMs to the Partners on a quarterly basis.
Management expects that the sale of the Highlands as previously
discussed in Note 2 will cause the Partnership's net income to
decrease by less than $100,000 per annum. This decrease is a
result of lower interest income related to the reduction of the
interest rate on the Modified Note and the repayment of the PGL
as offset by reductions in asset management fees and general and
administrative expenses. As more fully described in the
Partnership's Annual Report on Form 10-K, the Partnership sold
the Highlands PGL and realized a gain primarily as a result of
its participation in the net appreciation in value of the
Highlands. Accordingly, as referred to above, the Amended and
Restated Agreement provides that the Partnership will no longer
be entitled to any participations in net cash flow or net
appreciation in value of the Highlands. Conversely, the Cross
Creek and Signature Place Mortgages entitle the Partnership to
participate in the net cash flow of those properties above
certain levels and in any net appreciation in value upon
refinancing.
Results of Operations
The Partnership's decrease in net income for the three months
ended September 30, 1995 as compared to the corresponding period
of 1994 was a result of the loss of interest earned in 1994 on
the excess working capital reserves of $2,088,773 which were
distributed to Partners in November 1994 as well as the interest
rate reduction on the Modified Note and the repayment of the
Highlands PGL as referred to in Note 2 to the financial
statements. Partially offsetting the reduction in interest
income was a decrease in general and administrative expenses
primarily representing professional fees incurred during 1994
associated with the Highlands legal proceedings and sale. In
addition, asset management fees decreased as the General Partner
-10-
has decided to forego an asset management fee with respect to the
aggregate amount invested in the Highlands Modified Mortgage.
The Partnership's net income increased for the nine months ended
September 30, 1995 over the corresponding period in 1994. As
referred to in Note 2 to the financial statements, in conjunction
with the sale of the Highlands on January 31, 1995, the
Partnership received $1,367,260 representing interest on the PGL,
participations in net appreciation in value and net cash flow,
and a prepayment fee. Offsetting these proceeds was a non-cash
expense of approximately $563,000 representing unamortized
acquisition costs related to the Highlands taken against the
sales proceeds in the first quarter of 1995. Furthermore,
interest income declined during the third quarter of 1995
resulting from the interest rate redcution on the Modified Note
and the effect of the repayment of the PGL. Also contributing to
the increase in net income for the nine months ended September
30, 1995 were decreases in general and administrative expenses
and asset management fees as discussed above.
Until such time, if any, that the Partnership receives
participations on the Cross Creek and Signature Place Mortgages,
net income is expected to remain at the levels discussed above.
-11-
Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
-12-
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 on November 9, 1995.
NYLIFE Government Mortgage Plus
Limited Partnership
By: NYLIFE Realty Inc.
General Partner
By: /s/ Michael J. Nocera
Michael J. Nocera
President
By: /s/ Kevin M. Micucci
Kevin M. Micucci
Vice President and Controller
(Principal Financial and
Accounting Officer)
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 900,367
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,121,474
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,199,172
<CURRENT-LIABILITIES> 119,384
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 32,199,172
<SALES> 0
<TOTAL-REVENUES> 2,661,623
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 71,125
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,439,827
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,439,827
<EPS-PRIMARY> .29
<EPS-DILUTED> 0
</TABLE>
