-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vp6fkrgT8W/sCr+GaHDRKtG4ZsjMx8CC6NmZ6eODB357AwPt7U+jxrdLh0OubfuB n+CrtJehxxSxg0XLpZ/ReA== 0000950131-96-001384.txt : 19960402 0000950131-96-001384.hdr.sgml : 19960402 ACCESSION NUMBER: 0000950131-96-001384 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960401 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INLAND MORTGAGE INVESTORS FUND LP CENTRAL INDEX KEY: 0000786149 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 363436439 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-15759 FILM NUMBER: 96542782 BUSINESS ADDRESS: STREET 1: 2901 BUTTERFIELD RD CITY: OAK BROOK STATE: IL ZIP: 60521 BUSINESS PHONE: 7082188000 MAIL ADDRESS: STREET 1: 2901 BUTTERFIELD ROAD CITY: OAK BROOK STATE: IL ZIP: 60521 10-K405 1 FORM 10-K405 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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, 1995 or [_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File #0-15759 Inland Mortgage Investors Fund, L.P. (Exact name of registrant as specified in its charter) Delaware 36-3436439 (State of organization) (I.R.S. Employer Identification Number) 2901 Butterfield Road, Oak Brook, Illinois 60521 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: 708-218-8000 Securities registered pursuant to Section 12(b) of the Act: Title of each class: Name of each exchange on which registered: None None Securities registered pursuant to Section 12(g) of the Act: LIMITED PARTNERSHIP UNITS (Title of class) 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 --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant 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 nonaffiliates of the registrant. Not applicable. The Prospectus of the Registrant dated February 12, 1986, as supplemented and filed pursuant to Rule 424(b) and 424(c) under the Securities Act of 1933 is incorporated by reference in Parts I, II and III of this Annual Report on Form 10-K. -1- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) TABLE OF CONTENTS Part I Page ------ ---- Item 1. Business...................................................... 3 Item 2. Properties.................................................... 3 Item 3. Legal Proceedings............................................. 4 Item 4. Submission of Matters to a Vote of Security Holders........... 4 Part II ------- Item 5. Market for the Partnership's Limited Partnership Units and Related Security Holder Matters.......................... 4 Item 6. Selected Financial Data....................................... 5 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................... 6 Item 8. Financial Statements and Supplementary Data................... 8 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure....................... 22 Part III -------- Item 10. Directors and Executive Officers of the Registrant............ 22 Item 11. Executive Compensation........................................ 27 Item 12. Security Ownership of Certain Beneficial Owners and Management................................................... 28 Item 13. Certain Relationships and Related Transactions................ 28 Part IV ------- Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................................. 29 SIGNATURES............................................................. 30 -2- PART I Item 1. Business The Registrant, Inland Mortgage Investors Fund, L.P. (the "Partnership"), is a limited partnership formed on December 5, 1985 pursuant to the Delaware Revised Uniform Limited Partnership Act, and will terminate on December 31, 2035 or earlier upon disposition of assets or certain other events. On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited Partnership Units (the "Units") at $500 per Unit, 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 resulting in gross offering proceeds of $10,064,620, not including $500 which is the General Partner contribution. All of the holders of these Units were admitted to the Partnership. A majority of these proceeds were used to fund first mortgage loans. The Partnership funded fifteen loans between October 1986 and August 1988 utilizing $8,466,875 of capital proceeds collected, net of participations. As of December 31, 1995, $2,933,531 has been repaid, which includes principal amortization, payoffs on seven loans, prepayment penalties and proceeds from the sale of three properties. The Limited Partners of the Partnership share in the benefits of ownership of the Partnership's first mortgage receivable investments in proportion to the number of Units held. Inland Real Estate Investment Corporation is the General Partner. The Partnership is engaged in the business of making and acquiring loans collateralized by mortgages on improved, income producing multi-family residential properties. As of December 31, 1995, the Partnership made and acquired mortgage loans in or near Chicago, Illinois. The loans are being serviced by Inland Mortgage Servicing Corporation, a subsidiary of the General Partner. The Partnership does not segregate revenues or assets by geographic region, and such a presentation would not be material to an understanding of the Partnership's business taken as a whole. The Partnership had no employees during 1995. The terms of transactions between the Partnership and Affiliates of the General Partner are set forth in Item 11 below and Note 3 of the Notes to Financial Statements (Item 8 of this Annual Report) to which reference is hereby made. Item 2. Properties As of December 31, 1995, the Registrant owned no real properties. On September 1, 1992, the Partnership sold the 26-unit apartment building located at 6910 North Sheridan, Chicago, Illinois to an unaffiliated third party for $625,000. Reference is made to Note 5 of the Notes to Financial Statements for further discussion on the sale of this property. -3- As of January 1, 1992, with consent of the borrower, an Affiliate of the General Partner began management of the properties located at 5420 North Kenmore and 712-720 West Grace in Chicago, Illinois. On May 15, 1992, the Partnership acquired title to the Kenmore property through a deed in lieu of foreclosure. On March 31, 1993, the Partnership sold the 56-unit apartment building located at 5420 North Kenmore to an unaffiliated third party for $1,000,000. Also on May 15, 1992, Inland Mortgage Investment Corporation ("IMIC"), an Affiliate which had sold the Partnership a participation in the mortgage loan collateralized by the Grace property, acquired title to the Grace property. It should also be noted that the Partnership had sold a portion of its participation interest in the mortgage loan collateralized by the Grace property to an unaffiliated third party lender. Under the Participation Agreement with the Affiliate, the Partnership and the third party lender are each entitled to their proportionate share of ownership interest in the Grace property. On October 19, 1993, IMIC sold the 34-unit apartment building located at 712-720 West Grace to an unaffiliated third party for $900,000. Reference is made to Note 5 of the Notes to Financial Statements for further discussion on the sales of these properties. Item 3. Legal Proceedings The Partnership is not subject to any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during 1995. PART II Item 5. Market for the Partnership's Limited Partnership Units and Related Security Holder Matters As of December 31, 1995, there were 796 holders of Units of the Partnership. There is no public market for Units nor is it anticipated that any public market for Units will develop. Reference is made to Item 6 below for a discussion of cash distributions made to the Limited Partners. The Partnership's Liquidity Plan is available to the Limited Partners. See "Liquidity Plan" and "Distribution Reinvestment Plan," page 18 and pages 37-38, respectively, of the Prospectus of the Partnership dated February 12, 1986, which is incorporated herein by reference. -4- Item 6. Selected Financial Data INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) For the years ended December 31, 1995, 1994, 1993, 1992 and 1991 (not covered by the Report of Independent Accountants)
1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- Total assets......... $5,923,235 6,470,865 7,142,969 7,585,470 7,371,191 ========== ========== ========== ========== ========== Total income......... $ 596,496 635,063 794,889 907,811 762,869 ========== ========== ========== ========== ========== Income from operations......... 521,719 555,677 541,702 527,464 557,600 Gain on sale of investment property - - 44,434 123,476 - ---------- ---------- ---------- ---------- ---------- Net income........... $ 521,719 555,677 586,136 650,940 557,600 ========== ========== ========== ========== ========== Income from operations allocated to the one General Partner Unit$ 26,480 26,766 28,394 23,960 28,472 ========== ========== ========== ========== ========== Net income per Unit allocated to Limited Partners from (b): Operations........... 24.60 26.28 25.50 25.01 26.29 Gain on sale of investment property - - 2.21 6.14 - ---------- ---------- ---------- ---------- ---------- $ 24.60 26.28 27.71 31.15 26.29 ========== ========== ========== ========== ========== Distributions to Limited Partners from: Operations........... 509,563 520,964 542,105 455,310 576,882 Repayment proceeds... 530,920 671,989 326,388 44,231 370,783 ---------- ---------- ---------- ---------- ---------- $1,040,483 1,192,953 868,493 499,541 947,665 ========== ========== ========== ========== ========== Distributions per Unit to Limited Partners from (b): Operations........... 25.31 25.88 26.93 22.62 28.66 Repayment proceeds... 26.38 33.38 16.22 2.20 18.42 ---------- ---------- ---------- ---------- ---------- $ 51.69 59.26 43.15 24.82 47.08 ========== ========== ========== ========== ==========
(a) The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report. (b) The net income and distributions per Limited Partnership Unit data are based upon the weighted average number of Units outstanding of 20,129.24. -5- Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 December 31, 1995, cumulative distributions to Limited Partners totaled $8,442,151, of which $2,933,531 represents principal amortization, payoffs on seven loans, prepayment penalties and proceeds from the sale of three properties. At December 31, 1995, the Partnership had cash and cash equivalents aggregating $250,761 which will be utilized for future distributions to partners and working capital requirements. The sources of future liquidity and distributions to the Limited and General Partners are expected to be from the collection of interest and repayment of principal of the Partnership's mortgage loan investments. To the extent that these sources are insufficient to meet the Partnership's needs, the Partnership may rely on advances from Affiliates of the General Partner, other short-term financing, or may liquidate certain mortgage loans or other assets. Results of Operations Interest income on mortgage loans receivable decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to a number of factors. On July 28, 1994 and May 23, 1995, the loans collateralized by the properties located at 2906-10 Eastwood and 2659 South Austin, respectively, were prepaid by the borrowers. Additionally, the loan collateralized by the property located at 7434-42 North Hermitage was modified in March 1995 to extend the loan for five years at an interest of 10.5% (a decrease from 11%.) These decreases in interest income were partially offset by an increase in the adjustable interest rate (5.687% to 6.747%) in the mortgage loan receivable collateralized by the property located at 7428 West Washington in April 1995. Interest income on mortgage loans receivable decreased for the year ended December 31, 1994, as compared to the year ended December 31, 1993, also due to a number of factors. On June 4, 1993, November 8, 1993 and July 28, 1994, the mortgage loans receivable collateralized by the properties located at 1728 West Farwell, 6724 Tudor Court and 2906-10 Eastwood, respectively, were prepaid by the borrowers. Additionally, the mortgage loan receivable collateralized by the property located at 7428 West Washington had a decrease in the adjustable interest rate (6.333% to 5.687%) in April 1994. This decrease in interest income was partially offset by the Partnership receiving a full year of interest on the mortgage loans receivable collateralized by the properties located at 5420 North Kenmore and 712-20 West Grace which were sold and the Partnership provided financing to the purchasers on March 31, 1993 and October 19, 1993, respectively. -6- Rental income, property operating expenses and depreciation expense decreased for the years ended December 31, 1995 and 1994, as compared to the year ended December 31, 1993, due to the Partnership selling 5420 North Kenmore and 712-720 West Grace on March 31, 1993 and October 19, 1993, respectively. Interest on investments increased for the years ended December 31, 1995 and 1994, as compared to the year ended December 31, 1993, due to an increase in interest rates and the Partnership investing repayment proceeds before being distributed to the Limited Partners. The other income recorded by the Partnership for the year ended December 31, 1995, is primarily the prepayment penalty received for the payoff of the loan collateralized by the property located at 2659 South Austin on May 23, 1995. The other income recorded by the Partnership for the year ended December 31, 1994, is primarily the prepayment penalty received from the payoff of the loan collateralized by the property located at 2906-10 Eastwood on July 28, 1994. The other income recorded by the Partnership for the year ended December 31, 1993, is primarily the prepayment penalty received from the payoff of the loan collateralized by the property located at 6724 Tudor Court on November 8, 1993. Professional services to Affiliates increased for the years ended December 31, 1995 and 1994, as compared to the year ended December 31, 1993, due to an increase in accounting services required by the Partnership. Professional services to non-affiliates decreased for the years ended December 31, 1995 and 1994, as compared to the year ended December 31, 1993, due to the decrease in legal expenses relating to properties owned by the Partnership through foreclosure and subsequently sold. General and administrative expenses to Affiliates decreased for the years ended December 31, 1995 and 1994, as compared to the year ended December 31, 1993, due to decreases in data processing, mortgage servicing fees and investor services expenses. This increase was partially offset by an increase in postage. General and administrative expenses to non-affiliates decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to decreases in supplies and printing expenses. The gain on sale of investment property recorded for the year ended December 31, 1993 is a result of the sales of 5420 North Kenmore and 712-720 West Grace on March 31, 1993 and October 19, 1993, respectively. Also, an additional gain of $18,125 was recorded in 1993 from the sale of 6910 North Sheridan, which was related to the sale of that property in 1992. Reference is made to Note 3 of the Notes to Financial Statements for further discussion on sales commission to Affiliate. Inflation The Partnership's right to additional interest in connection with certain mortgage notes as described in Note 4 of the Notes to Financial Statements, appearing in Item 8 of this Annual Report, is intended to provide a hedge against the impact of inflation. Sharing in the increases in rent and appreciation of the value of the property collateralizing the mortgage notes should result in an increase in the total yield of the notes, thereby offsetting the effects of inflation. To date, the operations of the Partnership have not been significantly affected by inflation. -7- Item 8. Financial Statements and Supplementary Data INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Index
Page ---- Report of Independent Accountants........................................ 9 Financial Statements: Balance Sheets, December 31, 1995 and 1994............................. 10 Statements of Operations, for the years ended December 31, 1995, 1994 and 1993............................... 11 Statements of Partners' Capital, for the years ended December 31, 1995, 1994 and 1993............................... 12 Statements of Cash Flows, for the years ended December 31, 1995, 1994 and 1993..................................... 13 Notes to Financial Statements.......................................... 15
Schedules not filed: All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. -8- REPORT OF INDEPENDENT ACCOUNTANTS The Partners of Inland Mortgage Investors Fund, L.P. We have audited the financial statements of Inland Mortgage Investors Fund, L.P. listed in the index on page 8 of this Form 10-K. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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, the financial statements referred to above present fairly, in all material respects, the financial position of Inland Mortgage Investors Fund, L.P. as of December 31, 1995 and 1994 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Chicago, Illinois March 25, 1996 -9- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Balance Sheets December 31, 1995 and 1994 Assets ------
1995 1994 ---- ---- Cash and cash equivalents (Note 1)................ $ 250,761 265,659 Accrued interest and other receivables............ 47,500 59,242 Mortgage loans receivable (Note 4)................ 5,624,974 6,145,964 ----------- ----------- Total assets...................................... $ 5,923,235 6,470,865 ============ ============ Liabilities and Partners' Capital --------------------------------- Liabilities: Accounts payable................................ $ 858 623 Due to Affiliates (Note 3)...................... 3,740 423 Unearned income (Note 1)........................ 7,243 12,842 ----------- ----------- Total liabilities............................. 11,841 13,888 ----------- ----------- Partners' capital (Notes 1, 2 and 3): General Partner: Capital contribution.......................... 500 500 Cumulative net income......................... 257,535 231,055 Cumulative cash distributions................. (249,319) (222,500) ----------- ----------- 8,716 9,055 ----------- ----------- Limited Partners: Units of $500. Authorized 40,000 Units, 20,129.24 Units outstanding at 1995 and 1994 (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......................... 5,362,869 4,867,630 Cumulative cash distributions................. (8,442,151) (7,401,668) ----------- ----------- 5,902,678 6,447,922 ----------- ----------- Total Partners' capital....................... 5,911,394 6,456,977 ----------- ----------- Total liabilities and Partners' capital........... $ 5,923,235 6,470,865 ============ ============
See accompanying notes to financial statements. -10- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Statements of Operations For the years ended December 31, 1995, 1994 and 1993
Income: 1995 1994 1993 ---- ---- ---- Interest and fees on mortgage loans receivable (Note 4)............... $549,635 604,059 614,605 Rental income....................... - - 146,180 Interest on investments............. 36,270 25,975 18,521 Other income........................ 10,591 5,029 15,583 -------- -------- -------- 596,496 635,063 794,889 -------- -------- -------- Expenses: Professional services to Affiliates........................ 17,030 17,890 15,570 Professional services to non-affiliates.................... 18,690 17,967 31,914 General and administrative expenses to Affiliates............ 32,367 34,537 39,661 General and administrative expenses to non-affiliates........ 6,690 8,992 5,292 Property operating expenses to Affiliates..................... - - 8,012 Property operating expenses to non-affiliates................. - - 123,830 Depreciation........................ - - 28,908 -------- -------- -------- 74,777 79,386 253,187 -------- -------- -------- Income from operations................ 521,719 555,677 541,702 Gain on sale of investment property... - - 44,434 -------- -------- -------- Net income............................ $521,719 555,677 586,136 ======== ======== ======== Net income allocated to (Note 2): General Partner..................... $ 26,480 26,766 28,394 Limited Partners.................... 495,239 528,911 557,742 -------- -------- -------- Net income............................ $521,719 555,677 586,136 ======== ======== ======== Net income from operations allocated to the one General Partner Unit..... $ 26,480 26,766 28,394 ======== ======== ======== Net income allocated to Limited Partners per Limited Partnership Units of 20,129.24.................. $ 24.60 26.28 27.71 ======== ======== ========
See accompanying notes to financial statements. -11- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Statements of Partners' Capital For the years ended December 31, 1995, 1994 and 1993
General Limited Partner Partners Total --------- ---------- ---------- Balance at January 1, 1993.......... $ 9,837 7,422,715 7,432,552 Net income for the year ended December 31, 1993................. 28,394 557,742 586,136 Distributions to Partners ($43.15 per Limited Partnership Unit based on Units of 20,129.24)(Note 2)....... (28,523) (868,493) (897,016) --------- ---------- ---------- Balance at December 31, 1993........ 9,708 7,111,964 7,121,672 Net income for the year ended December 31, 1994................. 26,766 528,911 555,677 Distributions to Partners ($59.26 per Limited Partnership Unit based on Units of 20,129.24)(Note 2)....... (27,419) (1,192,953) (1,220,372) --------- ---------- ---------- Balance at December 31, 1994........ 9,055 6,447,922 6,456,977 Net income for the year ended December 31, 1995................. 26,480 495,239 521,719 Distributions to Partners ($51.69 per Limited Partnership Unit based on Units of 20,129.24)(Note 2)....... (26,819) (1,040,483) (1,067,302) --------- ---------- ---------- Balance at December 31, 1995........ $ 8,716 5,902,678 5,911,394 ========= ========== ==========
See accompanying notes to financial statements. -12- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Statements of Cash Flows For the years ended December 31, 1995, 1994 and 1993
1995 1994 1993 ----------- ---------- -------- Cash flows from operating activities: Net income............................. $ 521,719 555,677 586,136 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation......................... - - 28,908 Gain on sale of investment properties.......................... - - (44,434) Unearned income...................... (5,599) (6,809) (5,061) Changes in assets and liabilities: Accrued interest and other receivables....................... 11,742 5,092 (9,012) Prepaid expenses................... - - 2,708 Deposits and other assets.......... - - 6,489 Accounts payable................... 235 (704) (8,074) Due to Affiliates.................. 3,317 104 (4,581) Deposits held for others........... - - 8,771 Accrued real estate taxes.......... - - (79,890) ----------- ---------- -------- Net cash provided by operating activities.............................. 531,414 553,360 481,960 ----------- ---------- -------- Cash flows from investing activities: Principal payments collected (net)..... 520,990 418,382 826,802 Participations reacquired.............. - - (394,661) Additions to investment properties..... - - (2,992) Proceeds from sale of investment properties............................ - - 165,557 ----------- ---------- -------- Net cash provided by investing activities.............................. 520,990 418,382 594,706 ----------- ---------- -------- Cash flows from financing activities: Distributions paid..................... (1,067,302) (1,220,372) (897,016) ----------- ---------- -------- Net cash used in financing activities.............................. (1,067,302) (1,220,372) (897,016) ----------- ---------- -------- Net increase (decrease) in cash and cash equivalents........................ (14,898) (248,630) 179,650 Cash and cash equivalents at beginning of year....................... 265,659 514,289 334,639 ----------- ---------- -------- Cash and cash equivalents at end of year............................. $ 250,761 265,659 514,289 =========== ========== ========
See accompanying notes to financial statements. -13- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Statements of Cash Flows (continued) For the years ended December 31, 1995, 1994 and 1993
1995 1994 1993 --------- --------- ---------- Sales of investment properties (Note 5): Addition to mortgage loans receivable................................ $ - - (1,295,307) Reduction of investment properties......... - - 1,522,029 Reduction of accumulated depreciation.............................. - - (62,813) Due to Affiliates for deferred sales commission (Note 3)................. - - (18,125) Security deposits and rent................. - - (24,661) Gain on sale of investment properties................................ - - 44,434 --------- --------- ---------- Proceeds from sale of investment properties................................ $ - - 165,557 ========= ========= ==========
See accompanying notes to financial statements. -14- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements For the years ended December 31, 1995, 1994 and 1993 (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. Offering costs have been offset against the Limited Partners' capital accounts. Loan assumption fees received are deferred as unearned income and amortized over the remaining life of the related loan. The Partnership considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents and are carried at cost which approximates fair value due to the short maturity of those instruments. Disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of Statement of Financial Accounting Standards No. 107, "Disclosures About Fair Value of Financial Instruments." The estimated fair value amounts have been determined by using available market information and appropriate valuation methodologies. The fair value of the mortgage loans receivable and related mortgage interest receivable is based upon contractual payments to be received and current market interest rates for issuance of mortgage loans with similar terms and maturities. The estimated fair value of the mortgage loans receivable at December 31, 1995 approximates their carrying value. Interest income on mortgage loans receivable is accrued when earned. The accrual of interest, on loans that are in default, is discontinued when, in the opinion of the General Partner, the borrower has not complied with loan work-out arrangements. Once a loan has been placed on a non-accrual status, all cash received is applied against the outstanding loan balance until such time as the borrower has demonstrated an ability to make payments under the terms of the original or renegotiated loan agreement. The Partnership intends to pursue collection of all amounts currently due from the borrowers. -15- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) The Partnership sold four participations in mortgage loans receivable which yielded the Partnership a return which is greater than the return based on the stated interest rate of the instrument. The differential between the stated rate and the interest rate paid to the participant was recognized as income over the term of the mortgage loan. No provision for Federal income taxes has been made as the liability for such taxes is that of the Partners rather than the Partnership. The Partnership records are maintained on the accrual basis of accounting in accordance with generally accepted accounting principles ("GAAP"). The Federal income tax return has been prepared from such records after making appropriate adjustments to reflect the Partnership's accounts as adjusted for Federal income tax reporting purposes. Such adjustments are not recorded on the records of the Partnership. The net effect of these items is summarized as follows:
1995 1994 ---------------------- ---------------------- GAAP Tax GAAP Tax Basis Basis Basis Basis ---------- --------- ---------- --------- Total assets................ $5,923,235 5,923,235 $6,470,865 6,470,865 Partners' capital: General Partner........... 8,716 1,614 9,055 1,614 Limited Partners.......... 5,902,678 5,909,780 6,447,922 6,455,363 Net income: General Partner........... 26,480 26,819 26,766 27,419 Limited Partners.......... 495,239 494,900 528,911 528,258 Net income per Limited Partnership Unit.......... 24.60 24.59 26.28 26.24
(2) Partnership Agreement The Partnership Agreement defines the distribution of Operating Cash Flow. Such Operating Cash Flow will be distributed 90% to the Limited Partners and 10% to the General Partner. Of the 10% of Operating Cash Flow allocated to the General Partner, one-half shall be subordinated to the Limited Partners' receipt of a Cumulative Preferred Return of 14% per annum. Distributions of Loan Repayment Proceeds will be distributed first to Limited Partners in proportion to their participating percentages until they have received an amount equal to their Invested Capital plus any deficiency in the Cumulative Preferred Return. Thereafter, any remaining Repayment Proceeds which are available for distribution will be distributed 90% to the Limited Partners and 10% to the General Partner. -16- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) The General Partner will be allocated net operating profits of the Partnership in an amount equal to the greater of 1% of net operating profits or the amount of the General Partner's distributive share of Operating Cash Flow, with the balance of such net operating profits allocated to the Limited Partners. The General Partner will be allocated net operating profits from repayments in an amount equal to the General Partner's distributive share of Repayment Proceeds, with the balance of such net operating profits allocated to the Limited Partners. Net operating losses will be allocated 1% to the General Partner and 99% to the Limited Partners. (3) 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 $3,740 and $423 was unpaid as of December 31, 1995 and 1994, respectively. Inland Mortgage Servicing Corporation, a subsidiary of the General Partner, services the Partnership's mortgage loans receivable. Its services include processing mortgage loan collections and escrow deposits and maintaining related records. For these services, the Partnership is obligated to pay fees at an annual rate equal to 1/4 of 1% of the outstanding mortgage loans receivable balance of the Partnership. Such fees of $14,838 in 1995, $16,040 in 1994 and $16,336 in 1993 have been incurred and paid to the subsidiary and are included in the Partnership's general and administrative expenses to Affiliates. An Affiliate of the General Partner earned Property Management Fees in connection with managing the Partnership's properties in prior years. Such fees of $8,012 in 1993 have been incurred and paid to the Affiliate and are included in the Partnership's property operating expenses to Affiliates. No Property Management Fees were incurred in 1995 or 1994. In connection with the sales of 6910 North Sheridan, 5420 North Kenmore and 712- 720 West Grace, sales commissions of $18,125, $27,500 and $14,553, respectively, that have not been included in the costs of sale, may be payable to an Affiliate of the General Partner to the extent that the Limited Partners have received their Original Capital plus a return thereon as specified in the Partnership Agreement. -17- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) (4) Mortgage Loans Receivable Mortgage loans receivable are collateralized by first mortgages and wrap mortgages on multi-family residential properties located in Chicago, Illinois or its surrounding metropolitan area. As additional collateral, the Partnership holds assignments of rents and leases or personal guarantees of the borrowers. Generally, the mortgage notes are payable in equal monthly installments based on 20 or 30 year amortization periods. Mortgage loans receivable consist of the following:
Balance at Interest Balloon Monthly December 31, Rate at Maturity at P & I ------------------------- Property Location 12/31/95 Date Maturity Prepayment Payments 1995 1994 - --------------------- -------- -------- ----------- ---------- -------- ---------- ---------- Penn./Kenilworth, (A) 8.9% January $958,742 No Prepayment $8,564 $ 976,695 991,805 Glen Ellyn 1997 5830 W. 87th Street, (A,C) 8.9% January 430,612 No Prepayment 3,847 438,675 445,461 Burbank 1997 7428 W. Washington, (C) 6.747% March 823,307 At any time 6,261 846,712 864,927 Forest Park 1997 without penalty 2659 S. Austin, (B,C,E) - - - - - - 448,981 Cicero 7434-42 N. Hermitage, (F) 10.5% March 549,602 No Prepayment 5,673 585,029 591,094 Chicago 2000 Indian Trail Road, (A) 9.9% August 971,567 No Prepayment 9,311 1,008,854 1,020,096 Aurora 1998 6910 N. Sheridan, (D) 9.75% August 477,099 60 days notice 4,425 497,312 501,685 Chicago 1999 & 3% penalty 5420 N. Kenmore, (D) 9.5% March 801,193 60 days notice 7,147 834,842 840,978 Chicago 2000 & 3% penalty 712-20 W. Grace, (D) 8.00% October 411,808 At any time 3,268 436,855 440,937 Chicago 2000 without penalty ---------- ---------- $5,624,974 6,145,964 ========== ==========
-18- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) (A) These notes include provisions that entitle the Partnership to additional interest based on percentages (25-55%) of the excess of gross operating income of the properties over specified base rental income amounts plus percentages (25-50%) of the appreciated value of the property at maturity, defined as the difference between the market value of the properties at maturity and specified amounts. During 1995 and 1994, the Partnership received $14,808 and $11,264, respectively, in such additional interest based on percentages of operating income from the properties. (B) On April 1, 1988, the Partnership sold participations in first mortgage loans aggregating $1,000,000. The participation percentage ranged from approximately 20% to 40% at an annual interest rate of 9.75%. The Participant, an unrelated third party lender, participated in payments in accordance to its participating percentage. On July 9, 1993, the Partnership reacquired the participations in the first mortgage loans from the unaffiliated third party lender. The balances of these participations at payoff were: 2659 South Austin, Cicero $182,892 6724 Tudor Court, Westmont 77,007 2906-10 Eastwood, Chicago 134,762 -------- $394,661 The Partnership was able to reacquire these participations after receiving proceeds from the prepayment of the 1728 West Farwell mortgage loan receivable in June 1993. The General Partner believed it was in the best interest of the Partnership to reacquire the participations, which were at a 9.75% interest rate. The original first mortgage loans had interest rates of 11%, 11.5% and 11.375% for Austin, Tudor and Eastwood, respectively. (C) These mortgage loans have been assumed by the purchasers of the property collateralizing the loans. The terms of these loans were not changed by the assumption and the Partnership's approval of the purchasers was required prior to the assumption. The Partnership has also received fees ranging from 1% to 2% in connection with the assumptions, which are amortized and recognized as income over the remaining terms of the loans. (D) These mortgage loans are collateralized by properties which the Partnership, or an Affiliate of the General Partner, previously owned through foreclosure. The properties were sold to unaffiliated third parties and financing was provided by the Partnership. Reference is made to Note 5 of the Notes to Financial Statements for further discussion on the sales of these properties. (E) On May 23, 1995, the loan collateralized by the property located at 2659 South Austin, Chicago was prepaid by the borrower. The total proceeds received from the prepayment were $459,103, which represented the current loan balance, accrued interest and a 2% prepayment penalty. The proceeds were distributed to the Limited Partners in July 1995. -19- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) (F) Effective March 1, 1995, the Partnership and the borrower have agreed to extend the loan collateralized by the property located at 7434-42 North Hermitage, Chicago, for an additional five years. The new loan will be paid based on a 30-year amortization schedule at an interest rate of 10.5% per annum and a balloon payment due March 2000. (5) Sales of Investment Properties 5420 North Kenmore; Chicago, Illinois On March 31, 1993, the Partnership sold the 56-unit apartment building located at 5420 North Kenmore to an unaffiliated third party for $1,000,000. The Partnership provided financing in the amount of $850,000. The amount financed will be paid based on a 30-year amortization schedule at an interest rate of 9.5% per annum and a balloon payment due March 2000. The original loan made by the Partnership on this property was $900,000. The Partnership acquired a deed in lieu of foreclosure on this property on May 15, 1992 and recorded it as an investment in property at an amount of $964,741, net of $36,308 in accumulated depreciation through March 1993. The gain on sale recorded by the Partnership for this property was $4,609, net of costs of sale of $30,650. In connection with the sale of this property, a sales commission of $27,500, that has not been included in the costs of sale, may be payable to an Affiliate of the General Partner to the extent that the Limited Partners have received their Original Capital plus a return thereon as specified in the Partnership Agreement. A portion of the net cash received was used to replenish the Partnership's working capital reserve up to 1% of gross offering proceeds. The balance of the net cash received was distributed to investors in April 1993. 712-720 West Grace; Chicago, Illinois On October 19, 1993, Inland Mortgage Investment Corporation ("IMIC") sold the 34-unit apartment building located at 712-720 West Grace to an unaffiliated third party for $900,000. IMIC provided financing in the amount of $765,000. The amount financed will be paid based on a 30-year amortization schedule at an interest rate of 8% per annum and a balloon payment October 2000. The Partnership's share of the new loan was $445,307. The original participation made by the Partnership, net of the portion sold to the third party lender, was $482,000. The Partnership was recording this property as an investment in property as of May 15, 1992 at an amount of $494,479, net of $26,501 in accumulated depreciation through October 1993. The gain on sale recorded by the Partnership for the property was $21,700, net of costs of sale of $7,711. In connection with the sale of this property, a sales commission of $14,553, that has not been included in the costs of sale, may be payable to an Affiliate of the General Partner to the extent that the Limited Partners have received their Original Capital plus a return thereon as specified in the Partnership Agreement. The net cash received was distributed to investors in January 1994. -20- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) 6910 North Sheridan Road; Chicago, Illinois On September 1, 1992, the Partnership sold the 26-unit apartment building located at 6910 North Sheridan Road to an unaffiliated third party for $625,000. The Partnership provided financing in the amount of $510,103. The amount financed will be paid based on a 30-year amortization schedule with an interest rate of 9.75% per annum and a balloon payment due in seven years. The original loan made by the Partnership on this property was $500,000. The Partnership acquired title to this property on August 29, 1991 and recorded it as an investment in property at an amount of $472,736, net of $54,365 in accumulated depreciation. The gain on sale recorded by the Partnership for this property was $123,476 for 1992 and $18,125 for 1993. The net cash received was used to replenish the Partnership's working capital reserve for 1988 and 1989 delinquent real estate taxes paid when this property was acquired. In connection with the sale of this property, a sales commission of $18,125, that has not been included in the costs of sale, may be payable to an Affiliate of the General Partner to the extent that the Limited Partners have received their Original Capital plus a return thereon as specified in the Partnership Agreement. (6) Subsequent Events In January 1996, the Partnership paid a distribution of $144,320 to the Partners of which $137,977 was distributed to the Limited Partners and $6,343 was distributed to the General Partner. Of the $137,977 distributed to the Limited Partners, $17,466 was repayment proceeds and the remainder was net interest income. -21- Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There were no disagreements on accounting or financial disclosure during 1995. PART III Item 10. Directors and Executive Officers of the Registrant The General Partner of the Partnership, Inland Real Estate Investment Corporation, was organized in 1984 for the purpose of acting as general partner of limited partnerships formed to acquire, own and operate real property, and make and acquire loans collateralized by mortgages on improved, income producing multi-family residential properties. The General Partner is a wholly-owned subsidiary of The Inland Group, Inc. In 1990, Inland Real Estate Investment Corporation became the replacement General Partner for an additional 301 privately-offered real estate limited partnerships syndicated by Affiliates. The General Partner has responsibility for all aspects of the Partnership's operations. The relationship of the General Partner to its Affiliates is described under the caption "Conflicts of Interest" at pages 10 and 11 of the Prospectus, incorporated herein by reference. Officers and Directors The officers, directors and key employees of The Inland Group, Inc. and its Affiliates ("Inland") that are likely to provide services to the Partnership are as follows: Functional Title ---------------- Daniel L. Goodwin.......... Chairman and Chief Executive Officer Robert H. Baum............. Executive Vice President-General Counsel G. Joseph Cosenza.......... Senior Vice President-Acquisitions Robert D. Parks............ Senior Vice President-Investments Catherine L. Lynch......... Treasurer Roberta S. Matlin.......... Assistant Vice President-Investments Mark Zalatoris............. Assistant Vice President-Due Diligence Patricia A. Challenger..... Vice President-Asset Management Frances C. Panico.......... Vice President-Mortgage Corporation Raymond E. Petersen........ Vice President-Mortgage Corporation Paul J. Wheeler............ Vice President-Personal Financial Services Group Cynthia M. Hassett......... Assistant Vice President-Partnership Accounting Venton J. Carlston......... Assistant Controller -22- DANIEL L. GOODWIN (age 52) is Chairman of the Board of Directors of The Inland Group, Inc., a billion-dollar real estate and financial organization located in Oak Brook, Illinois. Among Inland's subsidiaries is the largest property management firm in Illinois and one of the largest commercial real estate and mortgage banking firms in the Midwest. Mr. Goodwin has served as Director of the Avenue Bank of Oak Park and as a Director of the Continental Bank of Oakbrook Terrace. He was also Chairman of the Bank Holding Company of American National Bank of DuPage. Currently he is the President of Inland Mortgage Investment Corporation. Mr. Goodwin has been in the housing industry for more than 25 years, and has demonstrated a lifelong interest in housing-related issues. He is a licensed real estate broker and a member of the National Association of Realtors. He has developed thousands of housing units in the Midwest, New England, Florida, and the Southwest. He is also the author of a nationally recognized reference book for the management of residential properties. Mr. Goodwin serves on the Board of the Illinois State Affordable Housing Trust Fund for the past 6 years. He is an advisor for the Office of Housing Coordination Services of the State of Illinois, and a member of the Seniors Housing Committee of the National Multi-Housing Council. Recently, Governor Edgar appointed him Chairman of the Housing Production Committee for the Illinois State Affordable Housing Conference. He also served as a member of the Cook County Commissioner's Economic Housing Development Committee, and he was the Chairman of the DuPage County Affordable Housing Task Force. The 1992 Catholic Charities Award was presented to Mr. Goodwin for his work in addressing affordable housing needs. The City of Hope designated him as the 1980's Man of the Year for the Illinois construction industry. In 1989, the Chicago Metropolitan Coalition on Aging presented Mr. Goodwin with an award in recognition of his efforts in making housing more affordable to Chicago's Senior Citizens. On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter) presented Mr. Goodwin with an award, recognizing The Inland Group as the leading corporate provider of transitional housing for the homeless people of DuPage County. Mr. Goodwin is a product of Chicago-area schools, and obtained his Bachelor's and Master's Degrees from Illinois Universities. Following graduation, he taught for five years in Chicago Public Schools. His commitment to education has continued through his work with the Better Boys Foundation's Pilot Elementary School in Chicago, and the development of the Inland Vocational Training Center for the Handicapped located at Little City in Palatine, Illinois. He personally established an endowment which funds a perpetual scholarship program for inner-city disadvantaged youth. In 1990 he received the Northeastern Illinois University President's Meritorious Service Award. Mr. Goodwin holds a Master's Degree in Education from Northern Illinois University, and in 1986, he was awarded an Honorary Doctorate from Northeastern Illinois University College of Education. He served as a member of the Board of Governors of Illinois State Colleges and Universities, and he is currently a trustee of Illinois Benedictine College. He was elected Chairman of Northeastern Illinois University Board of Trustees in January 1996. -23- Mr. Goodwin served as a member of Governor Jim Edgar's Transition Team. In 1988 he received the Outstanding Business Leader Award from the Oak Brook Jaycees. He also serves as the Chairman of the Illinois Speaker of the House of Representatives Club, and has been the General Chairman of the National Football League Players Association Mackey Awards for the benefit of inner-city youth. In March 1994, he won the Excellence in Business Award from the DuPage Area Association of Business and Industry. Additionally, he was honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped Infant Program when they lost their lease last year, and on June 9, he received the 1995 March of Dimes Birth Defects Foundation Life Achievement Award. ROBERT H. BAUM (age 52) has been with Inland since 1968 and is one of the four original principals. Mr. Baum is Vice Chairman and Executive Vice President-General Counsel of The Inland Group, Inc. In his capacity as General Counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group, Inc. and its affiliates. This responsibility includes the supervision of The Inland Law Department and serving as liaison with all outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the Secretary of State of Illinois. He is a member of the American Corporation Counsel Association, as well as a member of several bar associations. Mr. Baum has been admitted to practice before the Supreme Courts of the United States and the State of Illinois, as well as the bars of several federal courts of appeals and federal district courts. He received his B.S. Degree from the University of Wisconsin and his J.D. Degree from Northwestern University School of Law. Mr. Baum has served as a director of American National Bank of DuPage and is a member of the Governing Council of Wellness House, a charitable organization that provides emotional support for cancer patients and their families. G. JOSEPH COSENZA (age 52) joined Inland in 1968. Mr. Cosenza, is a director, Vice Chairman and Chief Executive Officer of the Inland Group Inc. Mr. Cosenza oversees, coordinates and directs Inland's many enterprises and, in addition, immediately supervises a staff of five persons who engage in property acquisition. Mr. Cosenza has been a consultant to other real estate entities and lending institutions on property appraisal methods. Mr. Cosenza received his B.A. degree from Northeastern Illinois University and his M.S. degree from Northern Illinois University. From 1967 to 1968, Mr. Cosenza taught at the LaGrange School District in Hodgkins, and from 1968 to 1972, he served as Assistant Principal and teacher in the Wheeling School District. He has been a licensed real estate broker since 1968 and an active member of various national and local real estate associations, including the National Association of Realtors and the Urban Land Institute. Mr. Cosenza has also been Chairman of the Board of American National Bank of DuPage and part owner of American National Bank of DuPage and Burbank State Bank, and has served on the Board of Directors of Continental Bank of Oakbrook Terrace. -24- ROBERT D. PARKS (age 52) joined Inland in 1968. He is Director of The Inland Group, Inc. and is President, Chairman and Chief Executive Officer of Inland Real Estate Investment Corporation and is Director of Inland Securities Corporation. Mr. Parks is responsible for the ongoing administration of existing partnerships, corporate budgeting and administration for Inland Real Estate Investment Corporation. He oversees and coordinates the marketing of all limited partnership interests nationwide and has overall responsibility for the portfolio management of all partnership investments and investor relations. Mr. Parks received his B.A. degree from Northeastern Illinois University and M.A. degree from the University of Chicago. He is a registered Direct Participation Program Principal with the National Association of Securities Dealers, Inc., and a licensed real estate broker. He is a member of the Real Estate Investment Association and a member of the board of NAREIT. CATHERINE L. LYNCH (age 37) joined Inland in 1989 and is the Treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the Corporate Accounting Department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG Peat Marwick since 1980. She received her B.S. degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. She is registered with the National Association of Securities Dealers as a Financial Operations Principal. ROBERTA S. MATLIN (age 51) joined Inland in 1984 as Director of Investor Administration and currently serves as Senior Vice President-Investments. Prior to that, Ms. Matlin spent 11 years with the Chicago Region of the Social Security Administration of the United States Department of Health and Human Services. As Senior Vice President-Investments, she directs the day-to-day internal operations of the General Partner. Ms. Matlin received her B.A. degree from the University of Illinois. She is registered with the National Association of Securities Dealers, Inc. as a General Securities Principal. MARK ZALATORIS (age 38) joined Inland in 1985 and currently serves as Vice President of Inland Real Estate Investment Corporation. His responsibilities include the coordination of due diligence activities by selling broker/dealers and is also involved with limited partnership asset management including the mortgage funds. Mr. Zalatoris is a graduate of the University of Illinois where he received a Bachelors degree in Finance and a Masters degree in Accounting and Taxation. He is a Certified Public Accountant and holds a General Securities License with Inland Securities Corporation. PATRICIA A. CHALLENGER (age 43) joined Inland in 1985. Ms. Challenger serves as Senior Vice President of Inland Real Estate Investment Corporation in the area of Asset Management. As head of the Asset Management Department, she develops operating and disposition strategies for all investment-owned properties. Ms. Challenger received her bachelor's degree from George Washington University and her master's from Virginia Tech University. Ms. Challenger was selected and served from 1980-1984 as Presidential Management Intern, where she was part of a special government-wide task force to eliminate waste, fraud and abuse in government contracting and also served as Senior Contract Specialist responsible for capital improvements in 109 government properties. Ms. Challenger is a licensed real estate salesperson, NASD registered securities sales representative and is a member of the Urban Land Institute. -25- FRANCES C. PANICO (age 46) joined Inland in 1972 and is currently President of Inland Mortgage Servicing Corporation. Ms. Panico oversees the operation of loan services, which has a loan portfolio in excess of $612 million. She previously supervised the origination, processing and underwriting of single- family mortgages, and she packaged and sold mortgages to secondary markets. Ms. Panico's other primary duties at Inland have included coordinating collection procedures and overseeing the default analysis and resolution process. Ms. Panico received her B.A. in Business and Communication from Northern Illinois University in 1972. RAYMOND E. PETERSEN (age 56) joined Inland in 1981. Mr. Petersen is responsible for the selection and approval of all corporate and limited partnership financing, as well as for the daily supervision of the commercial lending activity of Inland Mortgage Corporation, where he is President. For the six years prior to joining Inland, Mr. Petersen was affiliated with the mortgage banking firm of Downs, Mohl Mortgage Corporation, serving as President and Chief Executive Officer. Previously he was also associated with the mortgage banking houses of B.B. Cohen & Company and Percy Wilson Mortgage and Finance Corporation. Mr. Petersen's professional credentials include a B.A. degree from DePaul University, senior membership in the National Association of Review Appraisers, state license as a real estate broker and licensed securities representative. Mr. Petersen was also a Director and Chairman of the Asset and Liability Committee of American National Bank of Downers Grove. PAUL J. WHEELER (age 43) joined Inland in 1982 and is currently the President of Inland Property Sales, Inc. and President of Inland Securities Corporation, Inland's broker/dealer. Mr. Wheeler received his B.A. degree in Economics from DePauw University and an M.B.A. in Finance/Accounting from Northwestern University. Mr. Wheeler is a Certified Public Accountant, a licensed real estate broker and is registered with the National Association of Securities Dealers, Inc. as a General Securities Principal. For three years prior to joining Inland, Mr. Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan & Tyson, Inc. CYNTHIA M. HASSETT (age 37) joined Inland in 1983 and is a Vice President of Inland Real Estate Investment Corporation. Ms. Hassett is responsible for the Investment Accounting Department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Hassett was on the audit staff of Altschuler, Melvoin and Glasser since 1980. She received her B.S. degree in Accounting from Illinois State University. Ms. Hassett is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. VENTON J. CARLSTON (age 38) joined Inland in 1985 and is the Assistant Controller of Inland Real Estate Investment Corporation where he supervises the corporate bookkeeping staff and is responsible for financial statement preparation and budgeting for Inland Real Estate Investment Corporation and its subsidiaries. Prior to joining Inland, Mr. Carlston was a partnership accountant with JMB Realty. He received his B.S. degree in Accounting from Southern Illinois University. Mr. Carlston is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. He is registered with the National Association of Securities Dealers, Inc. as a Financial Operations Principal. -26- Item 11. Executive Compensation The General Partner is entitled to receive a share of cash distributions, when and as cash distributions are made to the Limited Partners, as described under the caption "Cash Distributions" and a share of profit and losses as described under the caption "Allocation of Profits or Losses" of the Prospectus. The Partnership is permitted to engage in various transactions involving Affiliates of the General Partner of the Partnership, as described under the captions "Compensation and Fees" at pages 8 and 9, "Conflicts of Interest" at pages 10 and 11 of the Prospectus and at pages A-9 through A-17 of the Partnership Agreement, which is incorporated herein by reference. The relationship of the General Partner (and its directors and officers) to its Affiliates is set forth above in Item 10. The General Partner may be reimbursed for salaries and direct expenses of employees of the General Partner and its Affiliates for the administration of the Partnership. In 1995, costs relating to such services were $34,559, of which $3,740 was unpaid as of December 31, 1995. A subsidiary of the General Partner earned mortgage servicing fees of $14,838 in 1995, in connection with servicing the Partnership's mortgage loans receivable. In connection with the sales of 6910 North Sheridan, 5420 North Kenmore and 712- 720 West Grace, sales commissions of $18,125, $27,500 and $14,553, respectively, that have not been included in the costs of sale, may be payable to an Affiliate of the General Partner to the extent that the Limited Partners have received their Original Capital plus a return thereon as specified in the Partnership Agreement. -27- Item 12. Security Ownership of Certain Beneficial Owners and Management (a) The Liquidity Plan (page 18 of the Prospectus of the Partnership dated February 12, 1986, which is incorporated herein by reference) owns the following Units of the Partnership as of December 31, 1995: Amount and Nature of Beneficial Percent Title of Class Ownership of Class -------------- ----------------- -------- Limited Partnership 5,561.83 Units directly 27.63% Units (b) The officers and directors of the General Partner of the Partnership own as a group the following Units of the Partnership as of December 31, 1995: Amount and Nature of Beneficial Percent Title of Class Ownership of Class -------------- ----------------- -------- Limited Partnership 243.27 Units directly 1.21% Units No officer or director of the General Partner of the Partnership possesses a right to acquire beneficial ownership of Units of the Partnership. All of the outstanding shares of the General Partner of the Partnership are owned by an Affiliate or its officers and directors as set forth above in Item 10. (c) There exists no arrangement, known to the Partnership, the operation of which may, at a subsequent date, result in a change in control of the Partnership. Item 13. Certain Relationships and Related Transactions There were no significant transactions or business relationships with the General Partner, Affiliates or their management other than those described in Items 10 and 11 above. Reference is made to Note 3 of the Notes to Financial Statements (Item 8 of this Annual Report) for information regarding related party transactions. -28- PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) The financial statements listed in the index on page 8 of this Annual Report are filed as part of this Annual Report. (b) Exhibits. The following documents are filed as part of this Report: 3 Amended and Restated Agreement of Limited Partnership and Certificate of Limited Partnership, included as Exhibits A and B to the Prospectus dated February 12, 1986, as supplemented, are incorporated herein by reference thereto. 28 Prospectus dated February 12, 1986, as supplemented, included in Post- Effective Amendment No. 2 to Form S-11 Registration Statement, File No. 33- 2377, is incorporated herein by reference thereto. (c) Financial Statement Schedules: All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. (d) Reports on Form 8-K No reports on Form 8-K have been filed since the beginning of the last quarter of the period covered by this report. No Annual Report or proxy material for the year 1995 has been sent to the Partners of the Partnership. An Annual Report will be sent to the Partners subsequent to this filing and the Partnership will furnish copies of such report to the Commission when it is sent to the Partners. -29- 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. INLAND MORTGAGE INVESTORS FUND, L.P. Inland Real Estate Investment Corporation General Partner By: Robert D. Parks Chairman of the Board and Chief Executive Officer Date: March 28, 1996 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: By: Inland Real Estate Investment Corporation General Partner By: Robert D. Parks Chairman of the Board and Chief Executive Officer Date: March 28, 1996 By: Mark Zalatoris Vice President Date: March 28, 1996 By: Cynthia M. Hassett Principal Financial Officer and Principal Accounting Officer Date: March 28, 1996 By: Daniel L. Goodwin Director Date: March 28, 1996 By: Robert H. Baum Director Date: March 28, 1996 -30-
EX-27 2 FINANCIAL DATA SCHEDULE
5 YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 250,761 0 5,672,474 0 0 298,261 0 0 5,923,235 11,841 0 0 0 0 5,911,394 5,923,235 0 596,496 0 0 74,777 0 0 521,719 0 521,719 0 0 0 521,719 24.60 24.60
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