UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
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 Nos.: 33-67202
FUND AMERICA INVESTORS CORPORATION II
(Exact name of registrant as specified in its charter)
Delaware 84-1218906
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
6400 S. Fiddler's Green Circle, Suite 1200B, Englewood, Colorado 80111
(Address of principal executive offices)
Registrant's telephone number including area code: (303) 290-6025
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 require-
ments for the past 90 days. YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of May 15, 2000-- 349,000 shares
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FUND AMERICA INVESTORS CORPORATION II
FORM 10-Q FOR THE
THREE MONTHS ENDED MARCH 31, 2000
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements 3
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults upon Senior Securities 8
Item 4. Submission of Matters to a Vote
of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports 8
SIGNATURES 9
Page 2
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUND AMERICA INVESTORS CORPORATION II
BALANCE SHEETS
(Unaudited)
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
<S> <C> <C>
Assets
Cash $ 40,455 $ 15,513
Deferred offering costs 253,573 254,826
Prepaid expenses - 187
--------- ---------
Total assets $ 294,028 $ 270,526
========= =========
Liabilities - accounts payable $ 8,000 $ -
--------- ---------
Shareholder's equity
Common stock, par value $.01
per share; 1,000,000 shares
authorized; 349,000 shares
issued and outstanding 3,490 3,490
Additional paid-in capital 445,510 445,510
Shareholder distributions (1,824,798) (1,779,798)
Retained earnings 1,661,826 1,601,324
--------- ---------
Total shareholder's equity 286,028 270,526
--------- ---------
Total liabilities and
shareholder's equity $ 294,028 $ 270,526
========= =========
</TABLE>
See notes to financial statements
Page 3
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<TABLE>
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
(Unaudited)
<CAPTION>
Three months ended
March 31,
---------------------------
2000 1999
-------- --------
<S> <C> <C>
Revenue
Issuance income $ 76,253 $ -
Interest income 460 2,159
-------- --------
Total revenue 76,713 2,159
-------- --------
Expenses
General and administrative 8,853 8,207
Issuance expense 1,358 -
Management fees 6,000 6,000
-------- --------
Total expenses 16,211 14,207
-------- --------
Net income/(loss) $ 60,502 $(12,048)
======== ========
</TABLE>
See notes to financial statements
Page 4
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<TABLE>
FUND AMERICA INVESTORS CORPORATION II
Statements of Cash Flows
(Unaudited)
<CAPTION>
Three months ended
March 31,
--------------------------
2000 1999
-------- --------
<S> <C> <C>
Net cash flow used in operating activities:
Net income/(loss) $ 60,502 $(12,048)
Adjustments to reconcile net loss to net
cash flow from operating activities:
Deferred offering costs 1,253 -
Changes in operating assets and liabilities:
Prepaid expenses 187 (1,820)
Accounts payable 8,000 6,925
-------- --------
Net cash flow used in operating activities 69,942 (6,943)
Net cash flow used in financing activities:
Shareholder distributions (45,000) -
-------- --------
Net decrease in cash 24,942 (6,943)
Cash at beginning of period 15,513 226,446
-------- --------
Cash at end of period $ 40,455 $219,503
======== ========
</TABLE>
See notes to financial statements
Page 5
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FUND AMERICA INVESTORS CORPORATION II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Three months ended March 31, 2000 and 1999
1. Basis of Presentation
Organization
Fund America Investors Corporation II (the "Company") was incorporated in
the State of Delaware on December 14, 1992 as a limited purpose finance
corporation. The Company was established to engage in the issuance and
administration of Collateralized Mortgage Obligations (the "Bonds") and
Asset-Backed Certificates (the "Certificates", and together with the Bonds, the
"Securities"). The Securities are issued in one or more series, from time to
time, by the Company in accordance with the provisions in the prospectus and
series-related prospectus supplement of the Company's latest effective
registration statement.
The Securities of each series can be issued directly by the Company, but
typically the Company forms a separate trust to act as the issuer solely for the
purpose of issuing a series of Securities. A series of Securities that consist
of Bonds will be issued pursuant to an indenture and will represent indebtedness
of the trust or issuer. A series of Securities that consist of Certificates
will represent beneficial ownership in the related trust or issuer. The sole
source of payments to Bondholders or Certificateholders within each series of
Securities is produced from the related trust property. The trust property is
generally comprised of mortgage loans and/or mortgage-related assets as des-
cribed in each of the series' related prospectus supplements.
The Company may not, either directly or indirectly through a beneficially
owned trust, engage in any business or investment activity other than to; (1)
issue and sell Bonds; (2) purchase, own, hold, pledge or sell mortgage loans or
other mortgage-related assets; (3) invest and maintain cash balances on an
interim basis in high quality short-term securities; and (4) engage in other
activities which are necessary or convenient to accomplish the foregoing and
are incidental thereto.
On January 1, 2000, the Company had a total of $564 million registered and
unissued Securities on its Registration Statement No. 333-33823. During the
first quarter ended March 31, 2000, the Company issued one series of Securities
for 3.2 million. This series, Fund America Investors Corporation II, Issuer
Trust 2000-1, was issued pursuant to a seperate prospectus supplement filed on
January 21, 2000. The balance of unissued Securities on Registration Statement
No. 333-33823 remaining after the first quarter issuance was $561 million as of
March 31, 2000.
To date, the Company has issued nineteen series of Securities which aggregate
$2.7 billion in original issued principal. The Company does not have any
further obligations in connection with the issuance of these Securities. Under
generally accepted accounting principles, such issuances are considered to be a
direct sale of the collateral.
On September 30, 1998, the Company filed its fifth Registration Statement on
Form S-3 with the Securities and Exchange Commission. The purpose of this
Registration Statement is to register an additional amount of Securities and to
merge the Company's Effective Registration Statement No. 333-33823, thereby
increasing the total amount of Securities that can be issued by the Company.
As of March 31, 2000, this Registration Statement was not effective and was
subject to completion or amendment. The Company intends to file one or more
further amendments to complete this Registration Statement and to bring it
effective.
2. Unaudited Financial Statements
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the financial
position of the Company at March 31, 2000, and the results of its operations
and cash flows for the periods ended March 31, 2000 and 1999.
Page 6
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Company expects to fund ongoing operations from working capital and
revenues derived from the issuance of Securities. Management believes that the
Company's current cash position and additional issuance fees earned during the
year will adequately fund overhead and capital costs related to the registration
of additional securities for the remainder of 2000.
Results of Operations
The Company reported a net income for the three months ended March 31,
2000 of $60,502 as compared to a net loss for the three months ended March
31, 1999 of $12,048. The company earned net issuance fees of $75,000 in the
first quarter ended March 31, 2000, which makes up the primary difference in
the results of operations between the two reporting periods.
Forward Looking Statements
The statements contained in this Item 2 that are not historical facts,
including, but not limited to, statements that can be identified by the use
of forward-looking terminology such as "may," "will," "expect," "anticipate,"
"estimate" or "continue" or the negative thereof or other variations thereon
or comparable terminology, are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, and involve a number
of risks and uncertainties. The actual results of the future events described
in such forward-looking statements could differ materially from those stated in
such forward-looking statements.
Page 7
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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
Exhibit 27. Financial Data Schedule
B. Form 8-K -
Form 8-K filed on January 31, 2000 submitted the Underwriting
Agreement, Terms Indenture, Standard Indenture Provisions, Legal
Opinion, Amended and Reinstated Trust Agreement, Deposit and Sale
Agreements Purchase Agreement and Legal Consents as exhibits to
the Fund America Investors Corporation II, Issuer Trust 2000-1,
series Prospectus Supplement.
Page 8
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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.
FUND AMERICA INVESTORS CORPORATION II
(Registrant)
Date: May 15, 2000 By: /s/ Helen M. Dickens
------------------------ -------------------------------
Helen M. Dickens
Vice President and Secretary
(Duly authorized and
Principal Financial Officer
Page 9
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> $40,455
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 253,573
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 294,028
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 3,490
<OTHER-SE> 282,538
<TOTAL-LIABILITY-AND-EQUITY> 294,028
<SALES> 0
<TOTAL-REVENUES> 76,713
<CGS> 0
<TOTAL-COSTS> 16,211
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 60,502
<INCOME-TAX> 0
<INCOME-CONTINUING> 60,502
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,502
<EPS-BASIC> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>Not presented, as all shares of common stock are held
by a sole shareholder.
</FN>
</TABLE>
