UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 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 No.: 33-73748
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 identification
incorporation or organization) 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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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. [X]
Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. X
State the aggregate market value of the voting stock held by
non-affiliates of the registrant: As of December 31, 1999: $0.00.
The number of shares outstanding of the Registrant's $0.01 par
value common stock, as of March 29, 2000 was 349,000 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
</PAGE>
<PAGE>
PART I
ITEM 1. BUSINESS
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 as described in
the prospectus and series-related prospectus supplement of the Company's
latest effective registration statement.
The Securities of each series can be issued by the Company, but
typically the Company forms a separate trust to act as the issuer solely
for the purpose of issuing a series. A series of Securities that
include Bonds will be issued pursuant to an indenture and will represent
indebtedness of the trust or issuer. A series of Securities that
include 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 property or assets within each trust are
comprised of mortgage-related assets as defined in each of the series'
related prospectus supplements, and represent the collateral for either
the Bonds or the Certificates.
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 collateral 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.
As of December 31, 1999, the Company has issued eighteen series of
Securities aggregating initial principal amount of $2.437 billion. In
1996 and prior years, the Company issued a total of $1.966 billion in
initial principal amount. During 1997, one Bond series was issued for
$122 million. In 1998, the Company issued three series of Securities
aggregating $348 million in initial 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 December 31, 1999,
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.
On January 1, 1999, the Company had a total of $564 million registered
and unissued Securities on its Registration Statement No. 333-33823.
During the year ended December 31, 1999, the Company did not issue any
Securities. The balance of unissued Securities on Registration
Statement No. 333-33823 remained $564 million for the year ended
December 31, 1999. The Company subsequently issued $3.2 million on
January 20, 2000.
ITEM 2. PROPERTIES The Company has no material physical properties.
ITEM 3. LEGAL PROCEEDINGS None.
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<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders during the fourth
quarter of the fiscal year ended December 31, 1999.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
There is no established public trading market for the Company's common
stock and no dividends have been declared or paid. All of the Company's
common stock is owned by a sole shareholder.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue $201,155 $370,890 $132,196 $199,448 $ 26,538
Net income(loss) $160,561 $196,084 $ 24,035 $ 42,165 $(94,766)
Net income(loss) per
share of common stock (1) (1) (1) (1) (1)
Balance Sheet Data:
Total assets $270,526 $475,180 $475,280 $442,444 $440,373
Shareholder's equity $270,526 $474,965 $466,479 $442,444 $440,279
(1) Not presented, as all shares of common stock are held by a
sole shareholder.
</TABLE>
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. General
As of December 31, 1999, the Company has issued eighteen series of
registered Pass-Through Securities aggregating $2,436,596,829 in initial
amount for all the issuances. Twelve series of Bonds remain outstanding
on December 31, 1999. The following list consists of the outstanding
series shown with initial issuance amounts.
Series Amount Collateral
-----------------------------------------------------------------------
1993-A $262,435,000 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-B $ 77,409,000 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-C $319,000,000 Trust consisting primarily of Federal National
Mortgage Association and Federal Home Loan
Mortgage Corporation Securities; private mort-
gage backed securities including certain resi-
dual interest securities; principal component
of bonds issued by the Resolution Funding Corp.
1993-E $190,145,165 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-H $ 45,634,831 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-J $150,069,158 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1994-A $ 44,599,100 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1996-A $295,315,915 Trust consisting primarily of adjustable rate,
conventional first lien mortgage loans and
fixed rate, second lien mortgage loans
1997-NMC1 $121,765,000 Trust assets consisting primarily of adjustable
rate mortgage loans that are secured by
first lien mortgages on one- to four-family
residential property
1998-A $ 60,373,853 Trust consisting primarily of one
Pooled Fannie Mae Certificate,
two Pooled Freddie Mac Certificates and
one Pooled Non-Agency Certificate
1998-B $ 50,703,106 Trust consisting primarily of three Pooled
Fannie Mae Certificates, one Pooled Ginnie Mae
Certificate, two Pooled Freddie Mac Certifi-
cates and one Pooled Non-Agency Certificate
1998-NMC1 $236,526,000 Trust assets consisting primarily of adjustable
rate mortgage loans that are secured by
first lien mortgages on one- to
four-family residential properties
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<PAGE>
2. The Year 2000 Issue
The Year 2000 problem is the potential for system and processing
failures of date related data arising from the use of two digits by
computer controlled systems, rather than four digits, to define the
applicable year. The Company completed its Year 2000 assessment in 1999
and to date it has not experienced any material Year 2000 difficulties
and does not expect to incur any material costs related to the Year 2000
issue. Additionally, since January 1, 2000, the Company has not
experienced any computer or operational disruptions as a result of Year
2000 problems or otherwise.
3. Liquidity and Capital Resources
Over the next 12 months, the Company expects to fund ongoing operations
as well as any potential amendments to its Registration Statement from
cash balances, revenues derived from the issuance of Securities, and
loans or capital contributions from its sole shareholder.
4. Results of Operations
The Company does not have any significant assets other than cash
held for operations and capitalized deferred offering costs. Major
operating activity is initiated from the issuance of Securities or the
preparation in registering Securities to be issued. Costs incurred with
registering Securities are capitalized until such time as the Securities
are issued in an offering.
Net income may fluctuate from period to period based on the use of the
Company's registered and unissued Securities. The Company generally
charges the issuer of a series of Securities a flat fee and a
proportionate share of deferred costs associated with its registration
statement.
Typically, periods reporting net income are the result of issuance fees
earned by the Company for the use of its shelf registration.
Conversely, in periods reflecting net losses, no issuance fees were
earned and the loss is the result of fixed general and administrative
expenses.
An evaluation of long-lived assets at December 31, 1998 and December 31,
1997 resulted in impairment of the Company's deferred offering costs.
It was determined that costs in excess of the currently accepted market
pass-through costs should be charged to net income. The net impairment
charged to operations in 1998 and 1997 was $1,127 and $18,503,
respectively.
The Company reported net income for the year ended December 31, 1999 of
$160,561 compared to net income of $196,084 for the year ended December
31, 1998 and net income of $24,035 for the year ended December 31, 1997.
In 1999, the Company earned income of $195,006 not as a result of
issuance income, but rather call option income received when the Fund
America Investors Corporation II, Series 1993-F certificates were called
by the servicer. Call option income is not a usual event, and the
Company does not anticipate the receipt of call option income in future
periods from other Securities that it has issued. In the previous two
years, the Company earned fees from the issuance of Securities; however,
in 1998 three bond series were issued versus one in 1997. Results for
1997 were affected by an impairment of $18,503. Variables affecting
comparable results of operations are typically the number of
securitizations completed and/or impairments of assets.
5. Forward Looking Statements
The statements contained in this Item 7 and Item 7A 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
Page 5
</PAGE>
<PAGE>
stated in such forward-looking statements. Among the factors that could
cause actual results to differ materially are: the Y2K preparedness of the
Company's third-party service providers, the market for mortgage-backed
securities, competition, government regulation and possible future litigation.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Securities issued by the Company are either debt securities or
securities which evidence beneficial ownership interest in designated
trusts established to facilitate the transfer of trust asset payments to
the Bondholders who hold such debt securities or to the
Certificateholders who hold such beneficial ownership interests. Assets
securing payments to Bondholders or Certificateholders are pledged or
sold to designated trusts and are not assets of the Company.
Additionally, Bonds and Certificates that are issued either by the
Company or a trust formed by the Company do not represent an ownership
interest in or an obligation of the Company.
Disclosures required in this Item 7A are intended to clarify a
registrant's exposures to market risk associated with activities in
derivative financial instruments, other financial instruments, and
derivative commodity instruments. The purpose of this section is to
disclose the material effects on earnings, fair values, and cash flows
that are inherent to potential market risk exposure. Potential market
risk associated with Securities issued under the Company's registration
statement will not have a material effect on the Company's earnings or
cash flow since the Securities do not represent an interest in or an
obligation of the Company. In addition, the Company has no public
common equity; all common stock of the Company is held by one
shareholder. Therefore, material effects of potential market risk
exposure on Securities issued from the Company will not have any
significant impact on the Company.
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</PAGE>
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Fund America Investors Corporation II
Englewood, Colorado 80111
We have audited the accompanying balance sheets of Fund America
Investors Corporation II as of December 31, 1999 and 1998, and the
related statements of operations, shareholder's equity, and cash flows
for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company as of December
31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United
States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
March 10, 2000
Page 7
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<PAGE>
<TABLE>
FUND AMERICA INVESTORS CORPORATION II
Balance Sheets
<CAPTION>
December 31,
-------------------------
1999 1998
-------- --------
<S> <C> <C>
Assets
Cash and cash equivalents (Note 2) $ 15,513 $226,446
Deferred offering costs, net (Note 2) 254,826 248,555
Prepaid expenses 187 179
-------- --------
Total assets $270,526 $475,180
======== ========
Liabilities - Accounts payable $ - $ 215
-------- --------
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 (1,779,798) (1,414,798)
Retained earnings 1,601,324 1,440,763
--------- ---------
Total shareholder's equity 270,526 474,965
--------- ---------
Total liabilities and shareholder's equity $270,526 $475,180
========= =========
See notes to financial statements
</TABLE>
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<PAGE>
<TABLE>
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
<CAPTION>
Year Ended December 31,
----------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Revenue
Issuance fees $ - $360,418 $125,995
Interest 6,149 10,472 6,201
Other bond income 195,006 - -
-------- -------- --------
Total revenue 201,155 370,890 132,196
-------- -------- --------
Expenses
Amortization of deferred
offering costs - 135,418 50,995
General and administrative 16,594 14,261 14,663
Management fees (Note 4) 24,000 24,000 24,000
Impairment of long-lived
assets (Note 2) - 1,127 18,503
-------- -------- --------
Total expenses 40,594 174,806 108,161
-------- -------- --------
Net income $160,561 $196,084 $ 24,035
======== ======== ========
See notes to financial statements
</TABLE>
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<PAGE>
<TABLE>
FUND AMERICA INVESTORS CORPORATION II
Statements of Shareholder's Equity
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
Common Stock Addi- Share-
------------------ tional holder
Number of Par Paid-in Distri- Retained Shareholder's
Shares Value Capital butions Earnings Equity-Net
--------- ------- --------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
January 1,
1997 349,000 $3,490 $445,510 $(1,227,200) $1,220,644 $442,444
Net income - - - - 24,035 24,035
-------- ------ -------- ----------- ---------- --------
Balance at
December 31,
1997 349,000 3,490 445,510 (1,227,200) 1,244,679 466,479
Shareholder
distri-
butions - - - (187,598) - (187,598)
Net income - - - - 196,084 196,084
-------- ------ -------- ----------- ---------- --------
Balance at
December 31,
1998 349,000 3,490 445,510 (1,414,798) 1,440,763 474,965
Shareholder
distri-
butions - - - (365,000) - (365,000)
Net income - - - - 160,561 160,561
-------- ------ -------- ----------- ---------- --------
Balance at
December 31,
1999 $349,000 $3,490 $445,510 $(1,779,798) $1,601,324 $270,526
======== ====== ======== =========== ========== ========
See notes to financial statements
</TABLE>
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<PAGE>
<TABLE>
FUND AMERICA INVESTORS CORPORATION II
Statements of Cash Flows
<CAPTION>
Year ended December 31,
-----------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net cash flows from
operating activities:
Net income $160,561 $196,084 $ 24,035
Adjustments to reconcile
net income to net cash from
operating activities:
Amortization of deferred
offering costs - 135,418 50,995
Amortization of organization costs - - 583
Impairment of deferred offering costs - 1,127 18,503
Changes in operating assets and
liabilities:
Accounts payable (215) (8,586) 8,801
Prepaid expenses (8) (7) (9)
-------- -------- --------
Net cash provided by
operating activities: 160,338 324,036 102,908
Cash flows used in investing
activities:
Additions to deferred offering costs (6,271) (20,303) (183,171)
Cash flows used in financing
activities:
Shareholder distribution (365,000) (187,598) -
-------- -------- --------
Net increase (decrease) in cash
and cash equivalents (210,933) 116,135 (80,263)
Cash and cash equivalents
at beginning of year 226,446 110,311 190,574
-------- -------- --------
Cash and cash
equivalents at end of year $ 15,513 $226,446 $110,311
======== ======== ========
Supplemental cash flow information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
See notes to financial statements
</TABLE>
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<PAGE>
FUND AMERICA INVESTORS CORPORATION II
Notes to Financial Statements
Note 1. The Company
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 by the Company, but
typically the Company forms a separate trust to act as the issuer solely
for the purpose of issuing a series. A series of Securities that
include Bonds will be issued pursuant to an indenture and will represent
indebtedness of the trust or issuer. A series of Securities that
include 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 property or assets within each trust are
comprised of mortgage-related assets as defined in each of the series'
related prospectus supplements.
The Company will 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) invest cash balances on an
interim basis in high quality short-term securities; (3) purchase, own,
hold, pledge or sell Collateral or other mortgage-related assets; (4)
engage in other activities which are necessary or convenient to
accomplish the foregoing and are incidental thereto.
Note 2. Summary of Significant Accounting Policies
In connection with the issuance of Securities, the Company
generally will enter into a purchase agreement ("Purchase Agreement")
with the seller of the Mortgage Assets or the Collateral.
Simultaneously, the Collateral is conveyed, by the Company, to the trust
who issues the Securities, pursuant to a pooling and servicing agreement
("Pooling Agreement"). Correspondingly, the purchase price for the
Collateral payable to the seller is netted out from the proceeds
realized from the sale of the Securities. Therefore, the Company's
financial statements reflect the net result of the issuance and not the
gross amounts attributable to the purchase price of the Collateral and
the sales proceeds from the issuance of the Securities.
Costs of registering securities are deferred. As the Securities
are issued from the registered securities, costs are charged to
operations. The charge is based on the ratio of bonds issued to
securities registered but previously unissued.
Fees from the Security issuance transactions are recognized as
revenue when the transactions close. All expenses of the transaction,
including a portion of deferred offering costs, are charged to
operations.
For purposes of reporting cash flows, cash and cash equivalents
include demand deposit accounts.
Net income per share is not presented, as all shares of common
stock are held by a sole shareholder.
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<PAGE>
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 at the date of the financial statements, and the reported
amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
SFAS No. 107 "Disclosure about Fair Value of Financial
Instruments," requires disclosure of fair value information about
financial instruments, whether or not recognized in the balance sheet.
The Company's financial instruments include: cash and cash equivalents,
and accounts payable. The carrying amount of these assets and
liabilities approximates their fair value.
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and Long-Lived Assets to be Disposed Of" requires companies to evaluate
long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. If a long-lived asset is identified as impaired, the value
of the asset must be reduced to its fair value. The Company's deferred
offering costs are considered long-lived assets under this
pronouncement. An evaluation of long-lived assets resulted in
impairment of the Company's deferred offering costs at December 31, 1997
and December 31, 1998. It was determined that costs in excess of the
currently accepted market pass-through costs should be charged to net
income. The net impairment charged to operations was $18,503 in 1997
and $1,127 in 1998.
SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities" (SFAS No. 133) was issued by the Financial Accounting
Standards Board in June 1998. SFAS No. 133 establishes accounting and
reporting standards requiring that all derivative instruments be
recorded in the balance sheet as either an asset or liability measured
at fair value. SFAS No. 133 requires that changes in the derivative's
fair value be recognized currently in earnings unless specific hedge
accounting criteria are met. The accounting provisions for qualifying
hedges allow gains and losses recognized related to a hedged item in the
income statement to be offset by the related derivative's gains and
losses, and requires the Company to formally document, designate, and
assess the effectiveness of transactions that qualify for hedge
accounting. During 1999, the implementation of SFAS No. 133 was
deferred until January 1, 2001 by the issuance of SFAS No 137
"Accounting for Derivative Instruments and Hedging Activities - Deferral
of the Effective Date of FASB Statement No. 133." Preliminarily, the
Company does not expect SFAS No. 133 to have an impact on its financial
statements.
Note 3. Income Taxes
Under S Corporation guidelines of the Internal Revenue Code, the
Company has elected to be treated substantially as a partnership for
income tax purposes. As a result, the sole shareholder reports any
taxable income or loss of the Company on his individual tax return.
Accordingly, no provision for federal income taxes has been recorded in
the financial statements.
Note 4. Related Party Transactions
The Company has engaged in related party transactions as discussed
below. Accordingly, the accompanying financial statements are not
necessarily indicative of the financial position that would exist or the
results of operations that would have occurred if the transactions had
been with unaffiliated entities.
The sole shareholder of the Company is also the sole shareholder,
President and Director of The Chotin Group Corporation and Fund America
Management Corporation ("FAMC"). On January 1, 1993, the Company
entered into a Management Agreement with The Chotin Group Corporation
(the "Facilities Manager"). This agreement remains in force until written
termination of the agreement is presented by either party. As of
December 31, 1999, no such notice of termination has been given or received
by the Company. Under the terms of the agreement, the Facilities Manager
is required to provide facilities use and other services necessary for the
Company to manage its business affairs. The management fees paid during
each of the three years ended December 31, 1999 were $24,000.
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Note 5. CMO Information
At December 31, 1999 and 1998, the outstanding principal balance of
the issued Securities and the amount of publicly and privately issued
securities were as follows:
1999
----------------------------------------------------------
Total Publicly Privately
Series Certificates issued issued
--------- ------------ ---------- -----------
1993-A $ 71,694,755 $ 68,444,059 $ 3,250,696
1993-B 12,692,393 9,173,079 3,519,314
1993-C 152,419,021 152,419,021 -
1993-E 24,858,455 20,711,537 4,146,918
1993-H 5,771,393 5,771,393 -
1993-J 15,776,894 14,975,146 801,748
1994-A 4,104,297 3,528,849 575,448
1996-A 41,747,842 41,747,842 -
1997-NMC1 29,819,797 29,819,797 -
1998-A 11,956,177 11,956,177 -
1998-B 38,532,238 38,532,238 -
1998-NMC1 122,158,583 122,158,583 -
------------ ------------ ------------
Total $531,531,845 $519,237,721 $ 12,294,124
============ ============ ============
1998
----------------------------------------------------------
Total Publicly Privately
Series Certificates issued issued
--------- ------------ ---------- -----------
1993-A $ 95,272,301 $ 91,805,109 $ 3,467,192
1993-B 18,127,195 14,504,919 3,622,276
1993-C 183,230,771 183,230,771 -
1993-E 37,005,049 32,546,951 4,458,098
1993-F 6,862,610 6,862,610 -
1993-H 8,578,280 8,578,280 -
1993-J 24,714,688 23,532,771 1,151,917
1994-A 6,320,685 5,421,786 898,899
1996-A 79,139,451 79,139,451 -
1997-NMC1 72,903,391 72,903,391 -
1998-A 40,704,057 40,704,057 -
1998-B 42,849,600 40,849,600 -
1998-NMC1 208,756,942 208,756,942 -
------------ ------------ ------------
Totals $824,465,020 $810,866,638 $ 13,598,382
============ ============ ============
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE None.
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<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Position Age
Steven B. Chotin Director, Chairman,
Chief Executive Officer
and President 52
Howard J. Glicksman Director, Vice President
and Assistant Secretary 54
M. Garrett Smith Director 38
Helen M. Dickens Director, Vice President,
and Secretary 46
Matthew T. Kennedy Assistant Secretary 24
Annel Henderson Principal Accounting Officer
and Controller 38
Steven B. Chotin, 52, has been a Director and the Chairman, Chief
Executive Officer and President of the Company since its inception. Mr.
Chotin has been President of The Chotin Group Corporation, a financial
service firm, since July 1984. Mr. Chotin was a director of American
Southwest Financial Corporation and of American Southwest Finance Co.,
Inc. from 1982 to 1994. Mr. Chotin may be deemed to be a "promoter"
within the meaning of Rule 405 under the Securities Act of 1933, as
amended (the "Act").
Howard J. Glicksman, 54, has been a Director of the Company since
1995, Vice President since 1993 and Assistant Secretary since 1989. Mr.
Glicksman has been Vice President since 1993, Assistant Secretary and
General Counsel since 1989 of The Chotin Group Corporation. Prior to
joining The Chotin Group Corporation, Mr. Glicksman was a partner in the
Denver, Colorado law firm of Glicksman, Woodrow & Shaner. He currently
holds bar and association memberships in Colorado and New York.
M. Garrett Smith, 38, joined Stonebridge Technologies, based in
Dallas, in 1999 as its Chief Financial Officer. Previously, Mr. Smith
was Executive Vice President and Chief Financial Officer of Pioneer
Natural Resources Company. He also served as a Senior Vice President of
Corporate Acquisitions at Pioneer. Prior to joining Pioneer, Mr. Smith
was a partner with BTC Partners, a financial consultant to MESA, Inc.
Helen M. Dickens, 46, has been a Director of the Company since
1995, Vice President and Secretary of the Company since 1989. Ms.
Dickens is also Vice President and Chief Operations Officer of The
Chotin Group Corporation, positions she has held since 1989. Prior to
joining The Chotin Group Corporation, Ms. Dickens served as Assistant
Corporate Secretary and Assistant to the Chairman of the Board and
President of Uniwest Financial Corp., a non-diversified savings and loan
holding company.
Matthew T. Kennedy, 24, has been the Assistant Secretary of the Company
since 1999. Mr. Kennedy joined The Chotin Group Corporation in 1999 as
a financial analyst. In 1998, Mr. Kennedy received a Bachelor of
Science degree from Miami University with a Major in Economics and a
Minor in Information Systems.
Annel Henderson, 38, has been the Controller of the Company since 1992
and the Principal Accounting Officer since 1995. Mrs. Henderson has
been the Controller of The Chotin Group Corporation since 1992. Prior
to 1992, she was Accounting Manager of Community Holdings Corporation.
Directors and Executive Officers are elected annually for a
one-year term.
Page 15
</PAGE>
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 1999, no executive officer had received any
compensation exceeding $100,000.
The Company has not paid any compensation pursuant to plans or any
other compensation arrangement. The Company pays its outside director a
monthly fee of $150.00. No other officers or directors receive any
compensation for their services.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Amount and
Nature Of
Title Beneficial Percent of
of Class Name and Address of Beneficial Owner Ownership (1) Class
-------- ------------------------------------ ------------- ----------
Common Steven B. Chotin 349,000 100%
6400 S. Fiddler's Green Circle
Suite 1200
Englewood, CO 80111
(1) Amount of such shares with respect to which persons indicated have
the right to acquire beneficial ownership as specified in Rule
13d-3(d)(1) under the Securities Exchange Act of 1934: Zero.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information relating to this Item is incorporated herein by
reference to Item 8, "Financial Statements and Supplementary Data" under
Note 4 "Related Party Transactions."
Page 16
</PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
( a )(1) Financial Statements
- Independent Auditors' Report
- Balance Sheets at December 31, 1999 and 1998
- Statements of Operations for the Years Ended
December 31, 1999, 1998 and 1997
- Statements of Shareholder's Equity for the Years
Ended December 31, 1999, 1998 and 1997
- Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997
- Notes to Financial Statements for the Years Ended
December 31, 1999, 1998 and 1997
( a )(2) Financial Statement Schedules
The financial statement schedules have been omitted because
they are inapplicable.
( b ) Reports on Form 8-K
None
( c ) Exhibits
Exhibit 27. Financial Data Schedule
Page 17
</PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: March 29, 2000 By: /s/ Helen M. Dickens
-------------------- -----------------------------
Helen M. Dickens
Vice President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
/s/ Steven B. Chotin Director, Chairman, Chief March 29, 2000
-------------------- Executive Officer and President
Steven B. Chotin (Principal Executive Officer)
/s/ Helen M. Dickens Director, Vice President and March 29, 2000
------------------- Treasurer (Principal Financial Officer)
Helen M. Dickens
/s/ Howard J. Glicksman Director, Vice President and March 29, 2000
---------------------- Assistant Secretary
Howard J. Glicksman
/s/ M. Garrett Smith Director March 29, 2000
-------------------
M. Garrett Smith
/s/ Annel Henderson Principal Accounting Officer March 29, 2000
------------------
Annel Henderson
/s/ Matthew T. Kennedy Assistant Secretary March 29, 2000
---------------------
Matthew T. Kennedy
Page 18
</PAGE>
<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE
NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
Since the Company has a sole shareholder, the Company has not sent
and will not send an annual report or proxy material to its shareholder.
Page 19
</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 15,513
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,700
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 270,526
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 3,490
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 270,526
<SALES> 0
<TOTAL-REVENUES> 201,155
<CGS> 0
<TOTAL-COSTS> 40,594
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 160,561
<INCOME-TAX> 0
<INCOME-CONTINUING> 160,561
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 160,561
<EPS-BASIC> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>
Not presented since all shares of common stock are held by a sole
shareholder.
</FN>
</TABLE>
