<PAGE>
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, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR
------- 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-18491
CAPITAL MORTGAGE PLUS L.P.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3502020
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
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
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
============= ============
September 30, December 31,
2000 1999
------------- ------------
<S> <C> <C>
ASSETS
Investments in mortgage loans
(Note 2) $21,442,041 $21,698,812
Cash and cash equivalents 993,066 1,010,890
Accrued interest receivable
(net of allowance of $737,743
and $737,743, respectively) 655,020 437,183
Loan origination costs
(net of accumulated
amortization of $172,984
and $158,800 respectively) 660,965 675,149
----------- -----------
Total assets $23,751,092 $23,822,034
=========== ===========
</TABLE>
2
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(continued)
<TABLE>
<CAPTION>
============== ============
September 30, December 31,
2000 1999
------------- ------------
<S> <C> <C>
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Accounts payable and other
liabilities $ 2,491 $ 20,744
Due to general partner and
affiliates (Note 3) 51,768 57,264
----------- ------------
Total liabilities 54,259 78,008
----------- ------------
Partners' capital (deficit):
Limited Partners (1,836,660 BACs
issued and outstanding) 23,846,040 23,892,289
General Partner (149,207) (148,263)
----------- ------------
Total partners' capital (deficit) 23,696,833 23,744,026
----------- ------------
Total liabilities and partners' capital
(deficit) $23,751,092 $ 23,822,034
=========== ============
</TABLE>
See Accompanying Notes to Financial Statements.
3
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
====================== ======================
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2000 1999 2000 1999
---------------------- ----------------------
<S> <C> <C> <C> <C>
Revenues
Interest income:
Mortgage loans
(Note 2) $492,237 $496,609 $1,502,627 $1,491,819
Temporary
investments 10,736 9,154 33,850 51,445
Other income 1,063 2,258 2,589 4,784
-------- -------- ---------- ----------
Total revenues 504,036 508,021 1,539,066 1,548,048
-------- -------- ---------- ----------
Expenses
General and
administrative 8,486 12,472 36,929 39,959
General and
administrative-
related parties
(Note 3) 49,471 46,592 152,611 144,943
Amortization 54,760 54,761 164,281 164,281
-------- -------- ---------- ----------
Total expenses 112,717 113,825 353,821 349,183
-------- -------- ---------- ----------
Net income $391,319 $394,196 $1,185,245 $1,198,865
-------- -------- ---------- ----------
Allocation of Net
income:
Limited Partners $383,493 $386,312 $1,161,540 $1,174,888
======== ======== ========== ==========
General Partner$ 7,826 $ 7,884 $ 23,705 $ 23,977
======== ======== ========== ==========
Net income per BAC $ 0.21 $ .21 $ 0.63 $ .64
======== ======== ========== ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
STATEMENTS OF CHANGES IN
PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
=====================================
Limited General
Total Partners Partner
-------------------------------------
<S> <C> <C> <C>
Partners' capital
(deficit) -
January 1, 2000 $23,744,026 $23,892,289 $ (148,263)
Net income 1,185,245 1,161,540 23,705
Distributions (1,232,438) (1,207,789) (24,649)
----------- ----------- ----------
Partners' capital
(deficit) -
September 30, 2000 $23,696,833 $23,846,040 $ (149,207)
=========== =========== ==========
</TABLE>
See Accompanying Notes to Financial Statements.
5
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
========================
Nine Months Ended
September 30,
------------------------
2000 1999
------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $1,185,245 $1,198,865
Adjustments to reconcile net income
to net cash provided by
operating activities:
Amortization expense 164,281 164,281
Amortization of interest rate buydown (1,089) (1,089)
Increase in accrued interest
receivable (217,837) (98,961)
Decrease in accounts payable
and other liabilities (18,253) (19,272)
(Decrease) increase
in due to general partner
and affiliates (5,496) 13,001
---------- ----------
Net cash provided by operating
activities 1,106,851 1,256,825
---------- ----------
Cash flows from investing activities:
Receipt of principal on mortgage
loans 107,763 99,855
---------- ----------
Cash flows from financing activities:
Distributions to partners (1,232,438) (5,833,374)
---------- ----------
</TABLE>
6
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
(continued)
<TABLE>
<CAPTION>
========================
Nine Months Ended
September 30,
------------------------
2000 1999
------------------------
<S> <C> <C>
Net decrease in cash and
cash equivalents (17,824) (4,476,694)
Cash and cash equivalents at
beginning of period 1,010,890 5,491,915
---------- ----------
Cash and cash equivalents at
end of period $ 993,066 $1,015,221
========== ==========
See Accompanying Notes to Financial Statements.
</TABLE>
7
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
Note 1 - General
The unaudited financial statements have been prepared on the same basis as the
audited financial statements included in the Partnership's Form 10-K for the
year ended December 31, 1999. In the opinion of the General Partner, the
accompanying unaudited financial statements contain all adjustments (consisting
only of normal recurring adjustments) necessary to present fairly the financial
position of the Partnership as of September 30, 2000, the results of operations
for the three and nine months ended September 30, 2000 and 1999 and its cash
flows for the nine months ended September 30, 2000 and 1999. However, the
operating results and cash flows for the nine months ended September 30, 2000
may not be indicative of the results for the year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1999.
8
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
Note 2 - Investments in Loans
The Partnership originally funded five mortgage loans and originated five
noninterest bearing equity loans in the aggregate amount of $29,220,325. One
loan with a mortgage and equity loan in the aggregate amount of $5,100,000 was
repaid on December 16, 1998.
Information relating to investments in mortgage loans and equity loans as of
September 30, 2000 is as follows:
<TABLE>
<CAPTION>
Amounts Advanced
-------------------------------
No of Date
Apart- of Final Total Investment Investment
Property/ ment Invest- Maturity Mortgage Equity Amounts in Loans at in Loans at
Location Units ment Date Loans Loans Advanced 9/30/2000(E) 12/31/99(E)
-------------- ------ ------- -------- ----------- --------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortenson 104 8/90 8/30 $ 4,974,090 $ 577,885 $ 5,551,975 $ 4,757,075 $ 4,827,911
Manor
Apts./
Ames, IA
Windemere 204 9/90 9/30 8,110,300 736,550 8,846,850 7,921,119 8,006,301
Apts./
Wichita, KS
Fieldcrest III 112 8/91 8/31 3,343,700 383,300 3,727,000 3,333,002 3,370,691
Apts./
Dothan, AL
Holly Ridge 144 3/93 3/33 5,310,100 684,400 5,994,500 5,430,845 5,493,909
II Apts./
30.00%
Gresham, OR
-----------------------------------------------------------------------------------------------------
Total $21,738,190 $2,382,135 $24,120,325 $21,442,041 $21,698,812
=====================================================================================================
<CAPTION>
Interest earned by the Partnership during 2000
------------------------------------------------------------------
Non-contingent Contingent
------------------------------------------------------------------
Cash
Flow
Base Default Annual Partici-
Interest Interest Yield pation Total
Property/ Amount/ Amount/ Amount/ Amount/ Interest
Location Rate (A) Rate(B) Rate(C) Rate(D) Earned
-------------- ------------ ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Mortenson $ 223,458 $ 70,290 $0 $0 $ 293,748
Manor 6.45% 1.98% .97% 30.00%
Apts./
Ames, IA
Windemere 465,572 94,648 0 0 560,220
Apts./ 7.95% 1.60% 1.08% 30.00%
Wichita, KS
Fieldcrest III 211,133 0 35,137 0 246,270
Apts./ 8.68% 0% 1.36% 30.00%
Dothan, AL
Holly Ridge 316,003 64,729 0 21,657 402,389
II Apts./ 8.125% 1.00% .64% 30.00%
30.00%
Gresham, OR
-----------------------------------------------------------
Total $1,216,166 $229,667 $35,137 $21,657 $1,502,627
===========================================================
</TABLE>
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
(A) Base interest on the Mortgages is that amount that is insured/co-insured by
HUD and is shown net of servicing fees.
(B) Default Interest is the minimum amount due over the base rate, and is not
contingent upon cash flow. This interest is secured by Partnership interests.
(C) Annual Yield is the amount over the default rate and is contingent upon
property cash flow.
(D) Cash Flow Participation is the percent of cash flow due to the Partnership
after payment of the Annual Yield and is contingent upon property cash flow.
Holly Ridge provided sufficient cash flow in 1998 to pay the Partnership a
Participation during 2000.
10
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
(E) The Investments in Loans amount reflects the unpaid balance of the Mortgages
and the amortized balance of the equity loans in the amounts of $20,842,625 and
$599,416 at September 30, 2000 and $20,950,388 and $748,424, respectively, at
December 31, 1999.
<TABLE>
<S> <C>
Investments in loans
January 1, 1999 $22,031,917
Additions:
Fieldcrest discount amortization 1,452
Deductions:
Amortization of equity loans (200,130)
Collection of principal - Mortenson (43,761)
- Windemere (48,676)
- Fieldcrest (16,813)
- Holly Ridge (25,177)
-------------
(334,557)
-------------
Investments in loans December 31, 1999 21,698,812
-------------
Additions:
Fieldcrest discount amortization 1,089
Deductions
Amortization of equity loans (150,097)
Collection of principal - Mortenson (34,718)
- Windemere (39,148)
- Fieldcrest (13,608)
- Holly Ridge (20,289)
-------------
(257,860)
-------------
Investments in loans September 30, 2000 $21,442,041
=============
</TABLE>
The Mortenson Manor and Windemere Mortgages are co-insured by HUD and Related
Mortgage Corporation ("RMC"), an affiliate of the General Partner. The
Fieldcrest III and Holly Ridge Mortgages are insured by HUD.
11
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
In addition to the interest rate during the post-construction periods, the
Partnership will be entitled to payment of 30% of cash flow remaining after
payment of the permanent loan interest and accrued interest, if any, and certain
amounts from sales or refinancing proceeds.
The equity loans are non-interest bearing and are secured by the assignment of
the owner/developers' interests in the projects. The equity loans are not
insured by HUD or any other party and, for financial statement reporting
purposes, are considered to be premiums paid to obtain the Mortgages. These
premiums are amortized over the average expected lives of the respective
Mortgages.
All loans have call provisions effective ten years following final endorsement
and a grace period.
At September 30, 2000, all of the loans due to the Partnership are current with
respect to their FHA Mortgage obligations. Mortenson has not paid approximately
$608,800 of default interest due for the years ended December 31, 1993 to
December 31, 1999, and Windemere has not paid its default interest of
approximately $130,000 for the year ended December 31, 1996, resulting in an
allowance for uncollectability relating to the Default Interest amounting to
approximately $738,000 at both September 30, 2000 and December 31, 1999.
12
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
Note 3 - Related Parties
The costs incurred to related parties for the three and nine months ended
September 30, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ --------------------
2000 1999 2000 1999
------------------ --------------------
<S> <C> <C> <C> <C>
Partnership manage-
ment fees (a) $31,592 $31,592 $ 94,776 $ 94,776
Expense reimburse-
ment (b) 17,879 15,000 57,835 50,167
------ ------ -------- --------
Total general and
administrative-
related parties $49,471 $46,592 $152,611 $144,943
====== ====== ======= =======
</TABLE>
(a) A partnership management fee for managing the affairs of the Partnership
equal to .5% per annum of invested assets is payable out of cash flow to the
General Partner. At both September 30, 2000 and December 31, 1999 a balance of
approximately $32,000 was due to the General Partners for these fees.
(b) The General Partner and its affiliates perform services for the Partnership
which include, but are not limited to: accounting and financial management,
register, transfer and assignment functions, asset management, investor
communications, printing services and other administrative services. The amount
of reimbursement from the Partnership is limited by the provisions of the
Partnership Agreement. An affiliate of the General Partner performs asset
monitoring for the Partnership. These services include site visits and
evaluations of the performance of the properties securing the loans. Fees owed
to the General Partner amounting to approximately $20,000 and $26,000 were
accrued and unpaid as of September 30, 2000 and December 31, 1999, respectively.
RMC is a co-insurer on the Mortenson and Windemere mortgage loans in which the
Partnership has invested. RMC is entitled to a mortgage insurance premium which
is paid by the mortgagors.
13
<PAGE>
CAPITAL MORTGAGE PLUS L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
Note 4 - Subsequent Event
It is anticipated that during November 2000, distributions of approximately
$400,000 and $8,000 will be paid to BACs holders and the General Partner,
respectively, representing the 2000 third quarter distribution.
14
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
CAPITAL RESOURCES AND LIQUIDITY
Sources of Partnership funds included interest earned on (1) investments in
mortgage loans and (2) the working capital reserve.
During the nine months ended September 30, 2000, cash and cash equivalents of
the Partnership decreased by approximately $18,000 due to cash provided by
operating activities of approximately $1,107,000, collections of principal on
mortgage loans of approximately $108,000 and distributions paid to Partners of
approximately $1,232,000 Included in the adjustments to reconcile the net income
to cash flow provided by operating activities is amortization of approximately
$163,000.
A distribution of approximately $1,208,000 was made to the Limited Partners or
BACs holders during the nine months ended September 30, 2000. A total of
approximately $25,000 was distributed to the General Partner during the nine
months ended September 30, 2000.
Management is not aware of any trends or events, commitments or uncertainties
that will impact liquidity in a material way. Management believes the only
impact would be from laws that have not yet been adopted. All base interest and
the principal of the Partnership's investments in mortgage loans are insured or
co-insured by HUD and a private mortgage lender (which is an affiliate of the
General Partner). The Partnership's investments in uninsured non-interest
bearing equity loans (which represent approximately 10% of the Partnership's
portfolio) are secured by a Partnership interest in properties which are
diversified by location so that if one area of the United States is experiencing
downturns in the economy, the remaining properties may be experiencing upswings.
However, the geographic diversification of the portfolio may not protect against
a general downturn in the national economy.
15
<PAGE>
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED WITH THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 1999
Results of operations for the three and nine months ended September 30, 2000 and
1999 consisted primarily of interest income earned from investment in mortgage
loans of approximately $493,000 and $497,000 and $1,503,000 and $1,492,000,
respectively.
Interest income from temporary investments decreased approximately $18,000 for
the nine months ended September 30, 2000 as compared to the same period in 1999
primarily due to higher cash and cash equivalents balances in 1999 from the cash
received from the repayment of the Willow Trace Mortgage in 1998. A significant
amount of the cash received from the repayment of the Willow Trace Mortgage was
distributed to BACs holders on February 15, 1999.
General and administrative expenses decreased approximately $4,000 for the three
months ended September 30, 2000 as compared to the same period in 1999 primarily
due to a decrease in printing costs in 2000.
16
<PAGE>
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:
27 Financial Data Schedule (filed herewith).
(b) Current report on Form 8-K -
No reports on form 8-K were filed during the quarter ended
September 30, 2000.
17
<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.
CAPITAL MORTGAGE PLUS L.P.
By: CIP ASSOCIATES, INC.
General Partner
Date: October 25, 2000
By:/s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Senior Vice President
(Principal Executive and Financial
Officer)
Date: October 25, 2000
By:/s/ Glenn F. Hopps
------------------
Glenn F. Hopps
Treasurer
(Principal Accounting Officer)
18
