================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT HAVE 1934
For the quarterly period ended June 30, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-9360
AMERICAN LAND LEASE, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1500244
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
29399 U.S. Hwy 19, North Suite 320 33761
Clearwater, Florida (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (727) 726-8868
2637 McCormick Drive 33759
Clearwater, Florida (Zip Code)
(FormerAddress)
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 __.
-
As of August 2, 2001, 7,670,273 shares of common stock were outstanding.
================================================================================
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION:
Item 1. Condensed Consolidated Financial Statements:
Balance Sheets as of June 30, 2001 (unaudited)
and December 31, 2000................................................... 1
Statements of Income for the three and six months ended
June 30, 2001 and 2000 (unaudited)...................................... 2
Statements of Cash Flows for the six months ended
June 30, 2001 and 2000 (unaudited)...................................... 3
Notes to Condensed Consolidated Financial Statements (unaudited)........ 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................... 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk.............. 18
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K........................................ 19
(i)
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
June 30, December 31,
2001 2000
----------- ------------
(unaudited)
ASSETS
Real estate, net of accumulated depreciation of $13,760 and
$12,238 $ 188,124 $ 196,969
Cash and cash equivalents 1,191 1,217
Inventory 7,699 6,476
Other assets, net 10,991 11,640
---------- -----------
Total Assets $ 208,005 $ 216,302
========== ===========
LIABILITIES
Secured long-term notes payable $ 90,798 $ 89,697
Secured short-term financing 4,526 7,867
Accounts payable and accrued liabilities 5,835 5,816
---------- -----------
Total liabilities 101,159 103,380
---------- -----------
COMMITMENTS AND CONTINGENCIES -- --
MINORITY INTEREST IN OPERATING PARTNERSHIP 15,021 14,811
MINORITY INTEREST IN OTHER ENTITIES -- 576
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share, 1,000 shares
authorized; no shares issued or outstanding -- --
Common stock, par value $.01 per share, 12,000 shares authorized;
8,425 and 8,355 shares issued; and 6,716 and 7,222 shares
outstanding, respectively 84 84
Additional paid-in capital 278,194 277,455
Notes receivable on common stock purchases (1,340) (964)
Deferred compensation on restricted stock (316) --
Dividends in excess of accumulated earnings (158,422) (159,603)
Treasury stock, 1,709 and 1,133 shares, at cost (26,375) (19,437)
---------- -----------
91,825 97,535
---------- -----------
Total Liabilities and Stockholders' Equity $ 208,005 $ 216,302
========== ===========
See Notes to Condensed Consolidated Financial Statements.
-1-
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
2001 2000 2001 2000
------- ------- ------- -------
Rental property operations
Rental and other property revenues $ 5,630 $ 4,429 $11,737 $ 8,898
Property operating expenses (2,114) (1,717) (4,529) (3,426)
Depreciation (1,559) (1,240) (3,168) (2,329)
------- ------- ------- -------
Income from rental property operations 1,957 1,472 4,040 3,143
Sales operations
Home sales revenues 4,433 3,083 7,609 5,366
Cost of home sales (3,722) (2,704) (6,401) (4,609)
Selling and marketing expenses (801) (835) (1,522) (1,623)
Minority interest in sales operations -- 147 -- 286
------- ------- ------- -------
Loss from sales operations (91) (309) (314) (580)
General and administrative expenses (394) (445) (858) (882)
Interest and other income 397 466 756 547
Interest expense (1,115) (916) (2,090) (1,810)
Income on participating mortgages and leases -- (22) -- 683
Commercial Assets management fees -- 145 -- 286
Property management income, net -- 54 -- 112
Amortization of management contracts -- (516) -- (1,032)
Equity in earnings of Commercial Assets -- 286 -- 494
Gain on sale of real estate -- -- 3,977 109
------- ------- ------- -------
Income before minority interest in Operating Partnership 754 215 5,511 1,070
Minority interest in Operating Partnership (103) (31) (708) (166)
------- ------- ------- -------
Net income $ 651 $ 184 $ 4,803 $ 904
======= ======= ======= =======
Basic and diluted earnings per share $ 0.09 $ 0.03 $ 0.68 $ 0.16
======= ======= ======= =======
Weighted average common shares outstanding 6,964 5,586 7,072 5,579
======= ======= ======= =======
Weighted average common shares and common share
equivalents outstanding 6,986 5,586 7,087 5,579
======= ======= ======= =======
Dividends paid per share $ 0.25 $ 0.25 $ 0.50 $ 0.50
======= ======= ======= =======
-2-
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months
Ended June 30,
-------------------------
2001 2000
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 4,803 $ 904
Adjustments to reconcile net income to net cash flows provided by operating
activities:
Depreciation and amortization 3,273 3,504
Amortization of discount on secured long-term notes payable 133 --
Minority interest in Operating Partnership and sales operations 708 (224)
Equity in earnings of Commercial Assets -- (285)
Income from participating mortgages -- (600)
Gain on sale of real estate (3,977) (109)
Increase in operating assets and liabilities (1,489) (558)
-------- --------
Net cash provided by operating activities 3,451 2,632
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of real estate 14,546 2,510
Purchases of real estate -- (765)
Capital replacements, improvements and additions (6,482) (2,863)
Dividends from Commercial Assets -- 718
Proceeds from notes receivable 375 --
Principal collection on CMBS bonds 1,228 --
-------- --------
Net cash provided by (used in) investing activities 9,667 (400)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of common stock dividends (3,622) (2,829)
Payment of distributions to minority interest in Operating Partnership (522) (522)
Proceeds from secured long-term notes payable 11,578 103
Principal payments on secured long-term notes payable (10,609) (6,810)
Proceeds from secured short-term financing 4,526 6,654
Principal payments on secured short-term financing (7,867) --
Purchase of common stock (6,938) --
Proceeds from notes receivable 19 18
Contributions for minority interest in subsidiary -- 1,782
Payment of loan costs (306) --
Collections of escrowed funds 649 --
-------- --------
Net cash used in financing activities (13,092) (1,604)
-------- --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (26) 628
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,217 570
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,191 $ 1,198
======== ========
See Notes to Condensed Consolidated Financial Statements.
-3-
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. The Company
American Land Lease, Inc. ("ALL") and, together with its subsidiaries and its
predecessors, the "Company", formerly Asset Investors Corporation ("AIC"), is a
Delaware corporation incorporated on May 25, 1999. Prior to May 25, 1999, AIC
was a Maryland corporation. ALL has elected to be taxed as a real estate
investment trust ("REIT"). ALL is the sole general partner of Asset Investors
Operating Partnership, L.P. (the "Operating Partnership") and held an
approximate 87% interest in the Operating Partnership as of June 30, 2001. The
Operating Partnership directly and indirectly owns and operates manufactured
home land lease communities, develops manufactured home land lease communities
and conducts homesale activities in pursuit of land lease originations in its
manufactured home land lease communities. ALL's Common Stock, par value $.01
per share ("Common Stock"), is listed on the New York Stock Exchange under the
symbol "ANL."
Interests in the Operating Partnership held by limited partners other than ALL
are referred to as "OP Units". The Operating Partnership's income is allocated
to holders of OP Units based on the weighted average number of OP Units
outstanding during the period. The Operating Partnership records the issuance
of OP Units and the assets acquired in purchase transactions based on the market
price of the Common Stock at the date of the execution of the purchase
contract. The holders of the OP Units receive distributions, prorated from the
date of issuance, in an amount equivalent to the dividends paid to holders of
Common Stock. After holding the OP Units for one year, the limited partners
generally have the right to redeem their OP Units for cash. Notwithstanding
that right, the Operating Partnership may elect to acquire some or all of the OP
Units tendered for redemption in exchange for shares of common stock in lieu of
cash. At June 30, 2001, the Operating Partnership had 1,045,000 OP units
outstanding, excluding those owned by ALL.
B. Presentation of Financial Statements
The accompanying unaudited consolidated financial statements of the Company have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. Operating results for the
three and six months ended June 30, 2001, are not necessarily indicative of the
results that may be expected for the year ending December 31, 2001.
The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
For further information, refer to the statements and notes thereto included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2000.
Certain 2000 financial statement amounts have been reclassified to conform to
the 2001 presentation.
-4-
C. Merger with Commercial Assets
Effective August 11, 2000, ALL and Commercial Assets, Inc. merged. Prior to the
merger, the Company owned 2,761,000 shares (approximately 27%) of the common
stock of Commercial Assets. Pursuant to the amended merger agreement,
Commercial Assets stockholders, with the exception of the Company, its officers
and directors, and the officers and directors of Commercial Assets, were
provided an election to receive either (1) $5.75 in cash per share of Commercial
Assets common stock or (2) 0.4075 shares of ALL Common Stock per share of
Commercial Assets common stock.
As a result of the merger, the Company acquired the remaining shares of
Commercial Assets by paying $20,418,000 in cash for 3,551,000 Commercial Assets
shares and issuing 1,664,000 shares of ALL Common Stock with a trading value of
$20,067,000 for 4,085,000 Commercial Assets shares, excluding ALL shares issued
in exchange for the Commercial Assets shares previously held by the Company,
which have been recorded as treasury stock. The merger with Commercial Assets
was recorded using the purchase method of accounting. The aggregate purchase
price was $97,372,000 (including the Company's previous investment in Commercial
Assets of $18,875,000, assumption of liabilities and minority interest of
$34,020,000 and transaction costs of $3,992,000).
D. Real Estate
Real estate at June 30, 2001 and December 31, 2000, was (in thousands):
June 30, December 31,
2001 2000
-------- ------------
Land $ 36,703 $ 38,514
Land improvements and buildings 164,672 170,215
Furniture and other equipment 509 478
-------- ------------
201,884 209,207
Less accumulated depreciation (13,760) (12,238)
-------- ------------
Real estate, net $188,124 $196,969
======== ============
Land improvements and buildings consist primarily of infrastructure, roads,
landscaping, clubhouses, maintenance buildings and common amenities.
During the six month period ended June 30, 2001, the Company sold three
properties containing 604 operational homesites to unaffiliated third parties.
Cash proceeds of approximately $14.5 million were used to repay all of the
Company's short term indebtedness and a portion of the Company's long term
outstanding indebtedness. The Company recognized a gain of approximately $4.0
million on the disposition of these properties, each of which was sold at a
gain.
During the six month period ended June 30, 2000, the Company sold one property
containing 138 operational homesites to an unaffiliated third party. Cash
proceeds from the sales of approximately $2.5 million were used to repay a
portion of the Company's outstanding indebtedness. The Company recognized a
gain of approximately $0.1 million on the disposition of this property.
The Company capitalizes direct and indirect costs (including interest, taxes and
other costs) in connection with the development of unoccupied sites and the
redevelopment of its owned properties during the periods of construction or
development. Interest of $678,000 and $482,000 was capitalized
-5-
for the three months ended June 30, 2001 and 2000, respectively, and $1,399,000
and $901,000 for the six months ended June 30, 2001 and 2000, respectively.
E. Sales Operations
Effective January 1, 2000, the Company acquired assets of Brandywine Home Sales
Corporation, which previously conducted home sales activities at our properties.
The Company now engages in this business through our home sales subsidiary in
order to accelerate the rate of absorption at our development properties through
the origination of new ground leases. Through the date of our merger with
Commercial Assets, the Company owned approximately 62% of the home sales
business in the form of nonvoting stock of the subsidiary, with the balance of
the subsidiary's non-voting stock owned by Commercial Assets. Two of our
directors owned, directly or indirectly, all of the voting stock of the
subsidiary, comprising 5% of its equity.
The Company views the home sales activities as a way to convert land held for
development to leased land with long term cash flows. The Company evaluates the
home sales activity on the same return on investment basis that it uses for
acquiring stabilized properties. The leases originated during the three and six
months ended June 30, 2001 by the home sales subsidiary are estimated to result
in a first year return on investment of 13.3% and 13.2 %, as shown below based
upon pro forma information:
Three Months Six Months
Ended Ended
June 30, 2001 June 30, 2001
------------- -------------
Sites Leased 66 104
Estimated first year annualized profit on leases originated $ 180,000 $ 295,000
Development costs of sites leased $1,260,000 $1,940,000
Loss from home sales business $ 90,000 $ 285,000
Total costs incurred to originate leases $1,350,000 $2,225,000
Estimated first year annualized return on investment 13.3% 13.2%
F. Secured Long-Term Notes Payable
June 30, 2001 December 31, 2000
------------- -----------------
Fixed rate, ranging from 6.5% to 8.75%, fully amortizing,
non-recourse notes maturing at various dates from 2018
through 2024 $75,173 $64,730
Fixed rate, ranging from 7.4% to 8.2%, partially amortizing,
non-recourse notes maturing at various dates from 2007
through 2011 11,562 16,117
Recourse note discounted at 7.0% maturing in 2002 4,063 3,930
Floating rate equal to LIBOR plus 2.5%, partially amortizing,
recourse note maturing at August 2001 -- 4,920
------- -------
$90,798 $89,697
======= =======
-6-
G. Secured Short-Term Notes Payable
In May 2001, the Company renewed its $15,000,000 revolving line of credit with a
bank. The line of credit bears interest at the bank's prime rate (6.75% at June
30, 2001) and matures in April 2002. The line of credit is secured by three
manufactured home communities and one recreational vehicle park which have a
combined net book value of $28,123,000 at June 30, 2001. At June 30, 2001,
$2,200,000 was outstanding and $12,800,000 was available borrowing capacity
under the revolving line of credit.
In April 2001, the Company entered into a $7,000,000 floor plan credit facility
with a lender expiring April 2003. Advances are made under the facility for
100% of new inventory purchases and bear interest at the prime rate with spreads
ranging from 0% to 2.5% based upon the manufacturer and age of the inventory.
Advances under the facility require principal repayments of 3% after one year
and payment in full within 1 1/2 years. At June 30, 2001, $2,300,000 was
outstanding and $4,700,000 was available borrowing capacity under the floor plan
facility.
H. Commitments and Contingencies
The Company is party to various legal actions resulting from its operating
activities. These actions are routine litigation and administrative proceedings
arising in the ordinary course of business, some of which are covered by
liability insurance, and none of which is expected to have a material adverse
effect on the consolidated financial condition or results of operations of the
Company and its subsidiaries taken as a whole.
As a result of the Company's merger with Commercial Assets in August 2000, the
Company became subject to an earn-out agreement relating to a manufactured home
community with respect initially to 170 unoccupied homesites. The Company pays
an additional $17,000 pursuant to the earn-out agreement for each newly occupied
homesite. During the three and six months ended June 30, 2001, the Company
advanced $51,000 and $120,000, respectively for newly unoccupied homesites
subject to the earn-out. At June 30, 2001, there were 146 unoccupied homesites
subject to the earn-out.
In connection with the acquisition of a manufactured home community, the Company
entered into an earn-out agreement with respect initially to 142 unoccupied
homesites. The Company pays an additional $17,000 pursuant to the earn-out
agreement for each newly occupied homesite either in the form of cash or 946 OP
Units, as determined by the seller. During each of the three and six months
ended June 30, 2001 and 2000, the Company advanced $0 and $65,500 and $33,000
and $116,000, respectively, in cash for newly occupied homesites. At June 30,
2001, there were 100 unoccupied homesites subject to the earn-out.
As a result of the Company's merger with Commercial Assets in August 2000, the
Company became subject to an earn-out agreement on a mini storage facility with
391 units whereby it will pay the former owner an amount equal to the increase
in the property's net operating income divided by 9.5% up to a maximum of
$2,160,000. At June 30, 2001, $1,789,000 remained unpaid under the earn-out
agreement.
-7-
As a result of the Company's merger with Commercial Assets in August 2000, the
Company became subject to an agreement to invest up to an additional $680,000 in
a real estate joint venture beginning November 2000. No amount has been paid
from inception of the agreement through June 30, 2001.
I. Stockholders' Equity
The Company has adopted a key employee stock purchase assistance plan whereby
the Company may extend credit to officers and key executives to purchase the
Company's Common Stock through the exercise of options. These loans are secured
by the shares issued and are repaid pursuant to partial recourse promissory
notes. The notes bear interest at 7.5% payable quarterly and the loans mature
at various times in 2009 and 2010. These loans are included as a separate
component of stockholders' equity under the caption Notes Receivable on Common
Stock Purchases. During 2001, an executive officer of the Company exercised
options to purchase 40,000 shares of common stock by issuing a note payable to
the Company of $395,000. The options were simultaneously issued and exercised at
the market price on the date of issuance.
The amount receivable for these notes was $964,000 and $1,340,000 at December
31, 2000 and June 30, 2001, respectively. At June 30, 2001, $335,000 of the
balance due was recourse to the respective executive officers and $1,005,000 was
non-recourse.
On February 15, 2001, the Company made an award of 30,000 restricted shares to
key executives under the 1998 Stock Option Plan. The shares vest in equal
installments at various dates from 2005 through 2006. The market value of the
stock of $343,500 has been recorded as deferred compensation and is reflected as
a reduction of equity. Compensation expense is recognized ratably over the
vesting period. For the three and six months ended June 30, 2001, the Company
recognized compensation expense of $18,600 and $27,900 related to this award.
On October 17, 2000, the Board of Directors authorized the Company to repurchase
up to 2,000,000 shares of the outstanding Common Stock. The timing of stock
purchases is at the discretion of management. The Company repurchased 535,613
and 576,613 shares of Common Stock during the three and six months ended June
30, 2001 at a weighted average price of $12.08 and $12.03 per share,
respectively.
During the three and six month periods ended June 30, 2001 and 2000, the Company
paid $0.25 and $0.50 per share dividends on Common Stock totaling $1,802,000 and
$1,420,000, and $3,622,000 and $2,829,000, respectively.
J. Earnings Per Share
Basic earnings per share for the three and six months ended June 30, 2001 and
2000 are based upon the weighted-average number of shares of Common Stock
outstanding during each such period. Diluted earnings per share for the three
and six months ended June 30, 2001 and 2000 reflect the effect of dilutive,
unexercised stock options of 22,144 and 14,581, and 1,599 and 933, respectively,
without regard to vesting restrictions on options issued. For the three and six
months period ended June 30, 2001 and 2000, 479,163 and 516,603 and 532,355 and
520,156, respectively, of stock options were excluded from the computation of
diluted earnings per share due to their antidilutive effect.
-8-
K. Transactions with Related Parties
Commercial Assets Management Agreement
The Commercial Assets Management Agreement was terminated on August 1, 2000 as a
result of the Company's acquisition of Commercial Assets. The Company earned
management fees under the Commercial Assets Management Agreement during the
three and six months ended June 30, 2000 totaling $145,000 and $286,000,
respectively. As of August 11, 2000, (the date of the Company's acquisition of
Commercial Assets) the net book value of the Commercial Assets Management
Agreement was $638,000, and the Company expensed this amount in August 2000.
Formation of Taxable REIT Subsidiary
During 2000, certain subsidiaries of the Company and other entities engaged in
activities and received fees that would not otherwise be permitted under the tax
rules governing REITs during the year. In order to allow us to maintain our
REIT status for federal income tax purposes, activities related to home sales,
golf course, and certain utilities operations were conducted through entities in
which Messrs. Considine and Rhodes, the Company's Chief Executive Officer and a
director respectively, directly or indirectly, owned the outstanding voting
securities of these entities equally. We owned all of the outstanding non-
voting common stock of these entities.
H.R. 1180, the Work Incentives Improvement Act of 1999 (the "Act") was enacted
on December 17, 1999 and contained several provisions known as the REIT
Modernization Act. The Act was effective January 1, 2001.
After the effective date of the Act, the Company is permitted to own voting
control of Taxable REIT Subsidiaries, which provide certain services, which
cannot be provided directly by the Company. As a result and as of January 1,
2001, the Company has agreed to purchase from Messrs. Considine and Rhodes their
entire interest, which included voting control in these entities and "preferred
stock subsidiaries," for consideration including cancellation or assumption of
debt totaling $68,000 and amounts due under lease agreements.
L. Recent Accounting Developments
In June 1998, Statement of Financial Accounting Standards No. 133, Accounting
for Derivative Instruments and Hedging Activities ("SFAS 133") was issued. In
June 2000, Statement of Financial Accounting Standards No. 138, Accounting for
Certain Derivative Instruments and Hedging Activities, an amendment of FASB
Statement No. 133 ("SFAS 138") was issued. SFAS 133 and SFAS 138 address the
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, and hedging activities. The Company has adopted
SFAS 133 and SFAS 138 in the first quarter of 2001, which did not have a
material effect on its financial position or results of operations.
In September 2000, Statement of Financial Accounting Standards No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities ("SFAS 140") was issued. SFAS 140 provides accounting and
reporting standards for transfers and servicing of financial assets and
extinguishments of liabilities. SFAS 140 is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000 and
is effective for transfers and servicing of financial assets and extinguishments
of liabilities
-9-
occurring after March 31, 2001. The Company anticipates that the adoption of
SFAS 140 will not have a material effect on its financial position or results of
operations.
In June 2001, Statements of Financial Accounting Standards No. 141, Business
Combinations, and No. 142, Goodwill and Other Intangible Assets were issued,
which are effective for fiscal years beginning after December 15, 2001. Under
the new rules, goodwill and intangible assets deemed to have indefinite lives
will no longer be amortized but will be subject to annual impairment tests in
accordance with the Statements. Other intangibles assets will continue to be
amortized over their useful lives. The Company will apply the new rules on
accounting for goodwill and other intangible assets beginning in the first
quarter of 2002. The Company anticipates that the adoption of SFAS 141 and SFAS
142 will not have a material effect on its financial position or results of
operations.
M. Subsequent Events
Dividend Declared
On July 25, 2001, the Board of Directors declared a quarterly cash dividend of
$0.25 per common share for the quarter ended June 30, 2001, payable on August
22, 2001, to stockholders of record on August 10, 2001.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.
-----------------------------------
Introduction
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements in certain circumstances. Certain information
included in this report and our other filings with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, as well as information communicated orally or
in writing between the dates of these SEC filings, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements may include projections relating to our cash flow,
dividends, anticipated returns on real estate investments and opportunities to
acquire additional communities. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements. Such factors include: general economic and business conditions;
interest rate changes; financing and refinancing risks; risks inherent in owning
real estate or debt secured by real estate; future development rate of
homesites; competition; the availability of real estate assets at prices which
meet our investment criteria; our ability to reduce expense levels, implement
rent increases, use leverage and other risks set forth in our SEC filings.
-10-
The components of our portfolio are as follows:
Operational Developed Undeveloped RV
Homesites Homesites Homesites Sites Total
--------------------------------------------------------------------
As of December 31, 2000 6,350 1,291 1,761 129 9,531
Properties sold (604) (5) -- -- (609)
Properties redeveloped (82) (28) 135 -- 25
New leases originated 104 (104) -- -- --
--------------------------------------------------------------------
As of June 30, 2001 5,768 1,154 1,896 129 8,947
====================================================================
In this report, the words "the Company," "we," "ALL" and "us" refer to American
Land Lease, Inc., a Delaware corporation, our predecessor, Asset Investors
Corporation and, where appropriate, our subsidiaries.
Operating Strategy
We measure our economic profitability based on Funds From Operations or "FFO",
less an annual capital replacement reserve of at least $100 per developed
homesite. This reserve and its increase from prior reporting periods is
management's estimate based on its experience in owning, operating and managing
manufactured home communities. We believe that the presentation of FFO, when
considered with the financial data determined in accordance with generally
accepted accounting principles, provides a useful measure of our performance.
FFO is defined by the Board of Governors of the National Association of Real
Estate Investment Trusts ("NAREIT") as net income (loss), computed in accordance
with generally accepted accounting principles, excluding gains and losses from
debt restructuring and sales of property, plus real estate related depreciation
and amortization (excluding amortization of financing costs), and after
adjustments for unconsolidated partnerships and joint ventures. We calculate
FFO based upon the NAREIT definition, as further adjusted for minority interest
in the Operating Partnership, costs incurred in order to become self-managed and
amortization of property and investment contracts. There can be no assurance
that our basis for computing FFO is comparable with that of other real estate
investment trusts.
-11-
For the three and six months ended June 30, 2001 and 2000, our FFO was (in
thousands):
Three Months Six Months
Ended June 30, Ended June 30,
-------------------- ---------------------
2001 2000 2001 2000
-------- -------- -------- --------
Income before minority interest in Operating $ 754 $ 215 $ 5,511 $ 1,070
Partnership
Real estate depreciation 1,559 1,240 3,168 2,329
Amortization of management contracts -- 516 -- 1,032
Gain on sale of real estate -- -- (3,977) (109)
Equity in Commercial Assets' adjustments for FFO -- 130 -- 261
------- -------- -------- --------
Funds From Operations (FFO) $ 2,313 $ 2,101 $ 4,702 $ 4,583
======= ======== ======== ========
Weighted average common shares and OP Units 8,031 6,631 8,131 6,624
outstanding ======= ======== ======== ========
For the six months ended June 30, 2001 and 2000, net cash flows were as follows
(in thousands):
Six Months
Ended June 30,
--------------------
2001 2000
-------- --------
Cash provided by operating activities $ 3,451 $ 2,632
Cash provided by (used in) investing activities 9,667 (400)
Cash used in financing activities (13,092) (1,604)
Merger with Commercial Assets
Effective August 11, 2000, ALL and Commercial Assets merged. Prior to the
merger, the Company owned 2,761,000 shares of Commercial Assets representing
approximately 27% of Commercial Assets' issued and outstanding shares. Pursuant
to the amended merger agreement, Commercial Assets stockholders, with the
exception of the Company and its officers and directors and the officers and
directors of Commercial Assets, were provided an election to receive either (1)
$5.75 in cash per share of Commercial Assets common stock or (2) 0.4075 shares
of our Common Stock per share of Commercial Assets common stock.
As a result of the merger, we effectively acquired the remaining shares of
Commercial Assets by paying $20,418,000 in cash for 3,551,000 Commercial Assets
shares and issuing 1,664,000 shares of our Common Stock with a trading value of
$20,067,000 for 4,085,000 Commercial Assets shares excluding ALL shares issued
in exchange for the Commercial Assets shares previously held by the Company,
which have been recorded as treasury stock. The merger with Commercial Assets
was recorded using the purchase method of accounting. The aggregate purchase
price was $97,372,000 (including the Company's previous investment in Commercial
Assets of $18,875,000, assumed liabilities and minority interest of $34,020,000
and transaction costs of 3,992,000).
-12-
RESULTS OF OPERATIONS FOR THE
THREE AND SIX MONTHS ENDED JUNE 30, 2001
Comparison of Three Months Ended June 30, 2001 to Three Months Ended June 30,
2000
Rental Property Operations
Rental and other property revenues from our owned properties totaled $5,630,000
for the three months ended June 30, 2001 compared to $4,429,000 for the three
months ended June 30, 2000, an increase of $1,201,000 or 27%. The increase was
primarily a result of rental increases at our communities, continued absorption
at our development properties, and properties acquired in the merger with
Commercial Assets, offset by the sale of properties in 2001.
Property operating expenses from our owned properties totaled $2,114,000 for the
three months ended June 30, 2001 compared to $1,717,000 for the same period in
2000, an increase of $397,000 or 23%. The increase was primarily a result of
properties acquired in the merger with Commercial Assets, offset by the sale of
properties in 2001.
Depreciation expense was $1,559,000 during the three months ended June 30, 2001
compared to $1,240,000 during the same period in 2000. The increase was due to
acquisitions of manufactured home communities during 2000, continued investment
in our developing properties, and our acquisitions as a result of our merger
with Commercial Assets.
Same store revenues for the three months ended June 30, 2001, increased by 6.3%
from the three months ended June 30, 2000. Expenses related to those revenues
increased 4.1% over that same period. Same store net operating income, excluding
the Company's recreational vehicle (RV) communities, increased 7.4% for the
three months ended June 30, 2001 compared to the results of operations for the
three month period ended June 30, 2000. Including the results of RV communities,
the Company's same store revenue increased 5.5%, expenses increased 1.6% and net
operating income increased 7.3%.
Sales Operations
Revenues for the sales operations totaled $4.4 million for the three months
ended June 30, 2001 as compared to $3.1 million for the three months ended June
30, 2001, with the increase driven by higher unit volumes in new home sales.
Units sold increased from 43 for the three months ended June 30, 2000 to 67
units for the three-month period ended June 30, 2001. Total cost of sales for
the three months ended June 30, 2001 was $3.7 million compared to $2.7 million
for the three months ended June 30, 2000. Resulting margin increases are
attributable to product mix and greater quantities of homes closed under presold
contracts. Selling and marketing expenses in the 2001 period decreased $34,000
from the 2000 period as marketing programs were refined in response to results
achieved in the 2000 period. Minority interest in sales operations recorded for
the three months ended June 30, 2000 was related to Commercial Assets' ownership
in the sales operations that terminated with the merger between Commercial
Assets and the Company in August 2000.
Commercial Assets Transactions
Fee revenue from managing Commercial Assets was $145,000 for the three months
ended June 30, 2000. As a result of our acquisition of Commercial Assets in
August 2000, we no longer receive these fees.
-13-
Amortization of management contracts was $516,000 for the three months ended
June 30, 2000. The decrease is due to the expensing of our contract to manage
Commercial Assets in connection with our acquisition of Commercial Assets in
August 2000. As a result of our acquisition of Commercial Assets in August
2000, this item of expense no longer occurs.
As a result of our merger with Commercial Assets in August 2000, income from our
approximate 27% interest in Commercial Assets was $0 for the three months ended
June 30, 2001 compared to $286,000 for the same period in 2000. As a result of
our acquisition of Commercial Assets in August 2000, this item of income no
longer occurs.
General and Administrative Expenses
Our general and administrative expenses totaled $394,000 for the three months
ended June 30, 2001 compared to $445,000 for the same period of 2000. The
decrease in expense is primarily due to elimination of cash directors' fees and
a reduction in franchise tax expenses due to a lower share base.
Interest and Other Income
During the three months ended June 30, 2001 and 2000, interest and other income
were $397,000 and $466,000 respectively. The decrease in income is related to
maintaining lower cash balances as a result of the repurchase of the Company's
stock.
Interest Expense
During the three months ended June 30, 2001 and 2000, interest expense was
$1,115,000 and $916,000 respectively. The increase in interest expense is due
to additional debt assumed with the merger with Commercial Assets in August
2000.
Comparison of Six Months Ended June 30, 2001 to Six Months Ended June 30, 2000
Rental Property Operations
Rental and other property revenues from our owned properties totaled $11,737,000
for the six months ended June 30, 2001 compared to $8,898,000 for the six months
ended June 30, 2000, an increase of $2,839,000 or 32%. The increase was
primarily a result of rental increases at our communities, continued absorption
at our development properties, and properties acquired in the merger with
Commercial Assets, offset by the sale of properties in 2001.
Property operating expenses from our owned properties totaled $4,529,000 for the
six months ended June 30, 2001 compared to $3,426,000 for the same period in
2000, an increase of $1,103,000 or 32%. The increase was primarily a result of
properties acquired in the merger with Commercial Assets, offset by the sale of
properties in 2001.
Depreciation expense was $3,168,000 during the six months ended June 30, 2001
compared to $2,329,000 during the same period in 2000. The increase was due to
acquisitions of manufactured home communities during 2000, continued investment
in our developing properties, and our acquisitions as a result of our merger
with Commercial Assets.
-14-
Sales Operations
Revenues for the sales operations totaled $7.6 million for the six months ended
June 30, 2001 as compared to $5.4 million for the six months ended June 30,
2001, with the increase driven by higher unit volumes in new home sales. Units
sold increased from 75 for the six months ended June 30, 2000 to 106 units for
the six month period ended June 30, 2001. Total cost of sales for the six
months ended June 30, 2001 was $6.4 million compared to $4.6 million for the six
months ended June 30, 2000. Resulting margin increases are attributable to
product mix and greater quantities of homes closed under presold contracts.
Selling and marketing expenses in the 2001 period decreased $101,000 from the
2000 period as marketing programs were refined in response to results achieved
in the 2000 period. Minority interest in sales operations recorded for the six
months ended June 30, 2000 was related to Commercial Assets ownership in the
sales operations that terminated with the merger between Commercial Assets and
the Company in August 2000.
Commercial Assets Transactions
Fee revenue from managing Commercial Assets was $286,000 for the six months
ended June 30, 2000. As a result of our acquisition of Commercial Assets in
August 2000, we no longer receive these fees.
Amortization of management contracts was $1,032,000 for the six months ended
June 30, 2000. The decrease is due to the expensing of our contract to manage
Commercial Assets in connection with our acquisition of Commercial Assets in
August 2000. As a result of our acquisition of Commercial Assets in August
2000, this item of expense no longer occurs.
As a result of our merger with Commercial Assets in August 2000, income from our
approximate 27% interest in Commercial Assets was $0 for the six months ended
June 30, 2001 compared to $494,000 for the same period in 2000. As a result of
our acquisition of Commercial Assets in August 2000, this item of income no
longer occurs.
General and Administrative Expenses
Our general and administrative expenses totaled $858,000 for the six months
ended June 30, 2001 compared to $882,000 for the same period of 2000. The
decrease in expense is primarily due to elimination of cash directors' fees and
a reduction in franchise tax expenses due to a lower share base.
Interest and Other Income
During the six months ended June 30, 2001 and 2000, interest and other income
were $756,000 and $547,000 respectively. The increase in income is related to
certain earning assets acquired from Commercial Assets in August 2000, including
an interest in CMBS bonds, offset by the maintenance of lower cash balances as a
result of the repurchase of the Company's Common Stock.
Interest Expense
During the six months ended June 30, 2001 and 2000, interest expense was
$2,090,000 and $1,810,000, respectively. The increase in interest expense is
due to additional debt assumed with the merger with Commercial Assets in August
2000.
-15-
Gain on sale of assets
During the six months ended June 30, 2001, the Company sold three properties.
All three properties were sold to the community residents and were sold in
support of the Company's program of property evaluation and continuous upgrade
of the property portfolio. Proceeds generated from these sales have been used
to repurchase the Company's Common Stock and retire short-term debt. A summary
of the transactions is as follows:
Net sales proceeds $14,546,000
Initial costs 11,630,000
Proceeds in excess of original costs 2,916,000
Gain after capital replacement expenditures 2,639,000
GAAP Gain on Sale 3,977,000
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2001, we had cash and cash equivalents of $1,191,000. Our
principal activities that demand liquidity include our normal operating
activities, payments of principal and interest on outstanding debt, acquisitions
of or additional investments in properties, payments of dividends to
stockholders and distributions made to OP Unit holders.
Our net cash provided by operating activities was $3.4 million and $2.6 million
for the six months ended June 30, 2001 and 2000, respectively. The increase of
$0.8 million was primarily a result of a $1.7 million increase in earnings
before depreciation, amortization, minority interests, equity in Commercial
Assets' earnings, income from participating mortgages, and gain on sale of real
estate offset by an increase of $0.9 million in cash used for operating assets
and liabilities as compared to the same period in 2000.
During the six months ended June 30, 2001, the net cash provided by investing
activities was $9.7 million compared with a net used by investing activities of
$0.4 million for the same period in 2000. The increase in net cash provided is
primarily due to an increase in proceeds from the sale of real estate over the
2000 period of $12.0 million, expenditures for purchases of real estate in 2000
totaling $0.8 million that did not recur in the 2001 period, collections
totaling $1.6 million in the 2001 period on assets acquired in our merger with
Commercial Assets, offset by dividends received on Commercial Assets stock in
the 2000 period totaling $0.7 million and greater expenditures in the 2001
period for capital replacements and improvements of $3.6 million as a result of
the larger portfolio and continued development of unleased sites.
During the six months ended June 30, 2001, net cash used in financing activities
was $13.1 million compared with uses of $1.6 million for the same period in
2000. The increase in uses is primarily because of higher principal payments on
long-term debt totaling $3.8 million as a result of property sales and higher
debt outstanding as a result of the Commercial Assets merger, higher net
payments of short-term debt totaling $10.0 million, the acquisition of treasury
stock in the 2001 period totaling $6.9 million, an increase in dividends paid
over the prior period of $0.8 million due to stock issued in August 2000 in
conjunction with our merger with Commercial Assets, the payment of loan costs in
the 2001 period totaling $0.3 million and a reduction in contributions for
minority interest in subsidiary of $1.8 million offset by incremental proceeds
from financings totaling $11.5 million as compared to the prior period and
-16-
the collection in 2001 period of funds from escrow accounts totaling $0.6
million. During the six months ended June 30, 2001, principal payments of
$979,000 related to scheduled amortization and $9,630,000 in payment of
outstanding balances from loans secured by property sold.
We have a line of credit with a bank providing total borrowing capacity of
$15,000,000 due in April 2002. This line of credit bears interest at the bank's
reference rate (6.75% at June 30, 2001) and is secured by three manufactured
home communities and one recreational vehicle park which have a combined net
book value of $28,122,000 at June 30, 2001. At June 30, 2001, $2,200,000 was
outstanding.
In April 2001, we entered into a $7,000,000 floor plan credit facility with a
lender expiring April 2003. Advances are made under the facility for 100% of
new inventory purchases and bear interest linked to the prime rate with spreads
ranging from 0% to 2.5% based upon the manufacturer and age of the inventory.
Advances under the facility require principal repayments of 3% after one year
and payment in full of an advance after 1 1/2 years. At June 30, 2001,
$2,300,000 was outstanding.
We expect to meet our long-term liquidity requirements through long-term,
secured borrowings, the issuance of OP Units and other equity securities and
cash generated by operations.
-17-
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
Our principal exposure to market risk is through our various debt instruments
and borrowings and through changes in interest rates. The following is a list
of these debt instruments and borrowing arrangements.
We have $75 million of fixed rate, fully amortizing, non-recourse, secured long-
term notes payable. We do not have significant exposure to changing interest
rates on these notes as the rates are fixed and the notes are fully amortizing.
We have a $4 million, recourse note issued at a discount of 7.0% and due in
2002. We have refunding and repricing risks with respect to this note.
We have $11.6 million of fixed rate, partially amortizing, non-recourse, secured
long-term notes payable.
We do not have significant exposure to changes in interest rates while the
interest rates are fixed, but we do have repricing and refunding risks as to the
unpaid balances due at the maturity of these notes.
We have a recourse, secured line of credit that bears interest at the Bank's
"Reference" rate. As of June 30, 2001, the outstanding balance was $2.2 million
If the Bank's "Reference" and icreased immediately by 1%, then our annual net
income and cash flows would decrease by $22,000 due to an increase in interest
expense on this line of credit, based on the outstanding balance at June 30,
2001. We have repricing and refunding risks as to the unpaid balance due at the
maturity of this note.
We have a recourse, secured floor plan facility that bears interest at the
lender's prime rate plus amounts ranging from 0% to 2.5% based upon the
manufacturer and age of the inventory. If the lender's prime rate increased
immediately by 1%, then our annual net income and cash flows would decrease by
$23,000 due to an increase in interest expense on this line of credit, based on
the outstanding balance at June 30, 2001. We have repricing and refunding risks
as to the unpaid balance due at the maturity of this note.
-18-
PART II
OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K.
---------------------------------
(a) Exhibits:
Exhibit No. Description
----------- -----------
2.1 Second Amended and Restated Agreement and Plan of Merger, dated as
of June 2, 2000, by and between the Registrant and Commercial
Assets, Inc. (incorporated herein by reference to Annex A to the
Registrant's Joint Proxy Statement/Prospectus dated June 13, 2000,
Commission File No. 1-9360, filed on June 13, 2000)
2.2 Assignment of Agreement of Sale dated as of June 1, 1998, between
Community Acquisition Joint Venture and Asset Investors Operating
Partnership, L.P. (incorporated herein by reference to Exhibit
2.6(b) to the Registrant's Current Report on Form 8-K dated May 29,
1998, Commission File No. 1-9360, filed on June 12, 1998).
2.3 Contribution Agreement dated effective as of January 1, 2000, by
and among Asset Investors Operating Partnership, L.P., CADC Holding
L.L.C. and Community Acquisition and Development Corporation
(incorporated herein by reference to Exhibit 2.8 to the
Registrant's Current Report on Form 8-K dated January 31, 2000,
Commission File No. 1-9360, filed on February 15, 2000).
2.4 Purchase and Sale Agreement dated effective as of January 1, 2000,
by and between Asset Investors Operating Partnership, L.P. and
Community Acquisition and Development Corporation (incorporated
herein by reference to Exhibit 2.8(a) to the Registrant's Current
Report on Form 8-K dated January 31, 2000, Commission File No.
1-9360, filed on February 15, 2000).
2.5 Purchase and Sale Agreement dated effective as of January 1, 2000,
by and between Prime Forest Partners and Community Acquisition and
Development Corporation (incorporated herein by reference to
Exhibit 2.8 (b) to the Registrant's Current Report on Form 8-K
dated January 31, 2000, Commission File No. 1-9360, filed on
February 15, 2000).
2.6 Purchase and Sale Agreement dated effective as of January 1, 2000,
by and between Asset Investors Operating Partnership, L.P. and
Community Acquisition and Development Corporation (incorporated
herein by reference to Exhibit 2.8(c) to the Registrant's Current
Report on Form 8-K dated January 31, 2000, Commission File No. 1-
9360, filed on February 15, 2000).
2.7 Asset Purchase Agreement dated effective as of January 1, 2000, by
and between AIC Homesales Corp. and Community Acquisition and
Development Corporation (incorporated herein by reference to
Exhibit 2.8(d) to the Registrant's Current Report on Form 8-K dated
January 31, 2000, Commission File No. 1-9360, filed on February 15,
2000).
-19-
2.8 Acquisition Agreement, dated effective as of January 1, 2000, by
and among AIC Community Management Holding Corp., AIC Management
Holdings, LLC and Community Management Investors Corporation
(incorporated herein by reference to Exhibit 10.0 to the
Registrant's Current Report on Form 8-K dated January 19, 2000,
Commission File No. 1-9360, filed on January 31, 2000).
2.9 Promissory Note, dated January 1, 2000, by and among AIC Community
Management Holding, LLC, Manufactured Housing Corp. and Community
Management Investors Corporation (incorporated herein by reference
to Exhibit 10.1(a) to the Registrant's Current Report on Form 8-K
dated January 19, 2000, Commission File No. 1-9360, filed on
January 31, 2000).
3.1 Second Amended and Restated Certificate of Incorporation of
American Land Lease, Inc. (incorporated by reference to 10K).
3.2 Second Amended and Restated By-laws of American Land Lease, Inc.
(incorporated by reference to 10K).
4.1 Waiver regarding stock ownership restrictions between the
Registrant and Terry Considine dated August 11, 2000 (incorporated
by reference to 10K).
4.2 Waiver regarding stock ownership restrictions between the
Registrant and Asset Investors Operating Partnership, L.P. dated
August 11, 2000 (incorporated by reference to 10K).
10.1* Form of Indemnification Agreement between the Registrant and each
Director of the Registrant (incorporated herein by reference to
Appendix A to the Proxy Statement of the Registrant, Commission
File No. 1-9360, dated May 18, 1987).
10.2* 1998 Stock Incentive Plan of the Registrant (incorporated herein by
reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of
the Registrant for the quarter ended June 30, 1998, Commission File
No. 1-9360, filed on August 14, 1998).
10.3 Trust Agreement dated as of March 26, 1997, among the Registrant,
as depositor, Asset Investors Secured Financing Corporation and
Wilmington Trust Company, as Owner Trustee (incorporated herein by
reference to Exhibit 10.5(a) to the Quarterly Report on Form 10-Q
of the Registrant for the quarter ended March 31, 1997, Commission
File No. 1-9360, filed on May 14, 1997).
10.4 Pooled Certificate Transfer Agreement between the Registrant and
Asset Investors Secured Financing Corporation dated as of March 26,
1997 (incorporated herein by reference to Exhibit 10.5(b) to the
Quarterly Report on Form 10-Q of the Registrant for the quarter
ended March 31, 1997, Commission File No. 1-9360, filed on May 14,
1997).
10.5 Indenture, dated as of March 27, 1997, between Structured Mortgage
Trust 1997-1 and State Street Bank and Trust Company (incorporated
herein by reference to Exhibit 10.5(c) to the Quarterly Report on
Form 10-Q of the Registrant for the quarter ended March 31, 1997,
Commission File No. 1-9360, Filed on May 14, 1997).
-20-
10.6 Note Purchase Agreement, dated as of March 26, 1997, among
Structured Mortgage Trust 1997-1, Asset Investors Secured Financing
Corporation and Bear, Stearns & Co., Inc. (incorporated herein by
reference to Exhibit 10.5(d) to the Quarterly Report on Form 10-Q
of the Registrant for the quarter ended March 31, 1997, Commission
File No. 1-9360, filed on May 14, 1997).
10.7 Trust Certificate issued to Asset Investors Secured Financing
Corporation evidencing its ownership of the Structured Mortgage
Trust 1997-1 (incorporated herein by reference to Exhibit 10.5(e)
to the Quarterly Report on Form 10-Q of the Registrant for the
quarter ended March 31, 1997, Commission File No. 1-9360, filed on
May 14, 1997).
10.8 Trust Agreement, dated as of November 3, 1997, between CAX DTR
Securitization Corp. and Wilmington Trust Company (incorporated
herein by reference to Exhibit 10.9 to Commercial Assets, Inc.'s
Current Report on Form 8-K dated November 3, 1997, Commission File
No. 1-2262, filed on November 14, 1997).
10.9 Note Purchase Agreement, dated as of November 3, 1997, among
Structure Mortgage Trust 1997-2, CAX DTR Securitization Corp., and
Painewebber Incorporated Company (incorporated herein by reference
to Exhibit 10.9(a) to Commercial Assets, Inc.'s Current Report on
Form 8-K dated November 3, 1997, Commission File No. 1-2262, filed
on November 14, 1997).
10.10 Trust Indenture and Security Agreement, dated as of November 3,
1997, between Structured Mortgage Trust 1997-2 and LaSalle National
Bank, as Indenture Trustee Company (incorporated herein by
reference to Exhibit 10.9(b) to Commercial Assets, Inc.'s Current
Report on Form 8-K dated November 3, 1997, Commission File No. 1-
2262, filed on November 14, 1997).
10.11 Contribution Agreement, dated as of November 3, 1997, between
Commercial Assets, Inc. and CAX DTR Securitization Corp. Company
(incorporated herein by reference to Exhibit 10.9(c) to Commercial
Assets, Inc.'s Current Report on Form 8-K dated November 3, 1997.
Commission File No. 1-2262, filed on November 14, 1997).
10.12 Securitization Cooperation Agreement, dated as of November 3, 1997,
among CAX DTR Securitization Corp., Commercial Assets, Inc., 1997-
2, and Painewebber Incorporated Company (incorporated herein by
reference to Exhibit 10.9 to Commercial Assets, Inc.'s dated
November 3, 1997, Commission File No. 1-2262, filed on November 3,
1997, Commission File No. 1-2262, filed on November 14, 1997).
10.13 Securities Purchase Agreement, dated as of March 26, 1998, between
CAX and Westrec Marina Management, Inc. (incorporated herein by
reference to Exhibit 10.1 to Commercial Assets, Inc.'s Quarterly
Report on Form 10-Q dated March 31, 1998, Commission File No. 1-
2262, filed on May 14, 1998).
10.14 Put and Call Agreement dated as of November 30, 1998, between CAX
and Westrec Marina Management, Inc. and Michael M. Sachs
(incorporated herein by reference to Exhibit 10.10(a) to Commercial
Assets, Inc.'s Annual Report on Form 10-K dated December 31, 1998,
Commission File No. I-2262, filed on March 25, 1999.
-21-
10.15 Secured Promissory Note dated as of November 30, 1998, between CAX
and Michael M. Sachs (incorporated herein by reference to Exhibit
10.10 (a) to Commercial Assets, Inc.'s Annual Report on Form 10-K
dated December 31, 1998, Commission File No. 1-2262, filed on March
25, 1999).
10.16 Secured Promissory Note dated September 13, 1999 between Robert G.
Blatz and Asset Investors Operating Partnership, L.P. (incorporated
herein by reference to Exhibit 10.11 to the Registrant's Annual
Report on Form 10-K dated December 31, 1999, Commission File No.
1-2262, filed on March 28, 2000).
10.18 Assignment of Agreement dated May 6, 1999, between Community
Acquisition & Development Corp. and CAX Rancho Mirage, L.L.C.
(incorporated herein by reference to Exhibit 10.13 (a) to the
Registrant's Current Report on Form 8-K dated May 7, 1999,
Commission File No. 1-2262, filed on May 18, 1999).
10.19 Agreement of Sale dated May 6, 1999, between five Whites, L.L.C.
and Community Acquisition Development Corporation (incorporated
herein by reference to Exhibit 10.14 to the Registrant's Current
Report on Form 8-K dated June 30, 1999, Commission file No. 1-2262,
filed on July 14, 1999).
10.20 Agreement of Sale dated May 6, 1999, between White Gregg, L.L.C.
and Community Acquisition and Development Corporation (incorporated
herein by reference to Exhibit 10.14 to the Registrant's Current
Report on Form 8-K dated June 30, 1999, Commission file No. 1-2262,
filed on July 14, 1999).
10.21 Assignment of Agreement of Sale dated June 28, 1999, between
Community Acquisition and Development Corporation and CAX La Casa
Blanca, L.L.C. (incorporated herein by reference to Exhibit 10.14
to the Registrant's Current Report on Form 8-K dated June 30, 1999,
Commission File No. 1-2262, filed on July 14, 1999).
10.22 Assignment of Agreement of Sale dated June 28, 1999, between
Community Acquisition and Development Corporation and CAX La Casa
Blanca East, L.L.C. (incorporated herein by reference to Exhibit
10.14 to the Registrant's Current Report on Form 8-K dated June 30,
1999, Commission File No. 1-2262, filed on July 14, 1999).
10.23 Promissory Note dated June 30, 1999 between CAX La Casa Blanca
East, L.L.C. and White Gregg, L.L.C. (incorporated herein by
reference to Exhibit 10.14 to Commercial Assets, Inc.'s Current
Report on Form 8-K dated June 30, 1999, Commission File No. 1-2262,
filed on July 14, 1999).
10.24 Receipt, Release and Settlement Agreement, dated as of August 13,
1999, between the Registrant, Casa Encanta MHP, L.L.C., Southern
Palms MHP, L.L.C., Norman Andrus, and the Norman Andrus Irrevocable
Trust (incorporated herein by reference to Exhibit 10.11(b) to the
Registrant's Current Report on Form 8-K dated August 13, 1999,
Commission File No. 1-2262, filed on August 30, 1999).
10.25 Form of Assignment and Assumption of Membership Interest
(incorporated herein by reference to Exhibit 10.11 (c) to the
Registrant's Current Report on Form 8-K dated August 13, 1999,
Commission File No. 1-2262, filed on August 30, 1999).
-22-
10.26 Secured Promissory Note dated April 18, 2000 between Joseph Gaynor
and Asset Investors Operating Partnership, L.P. (incorporated
herein by reference to Exhibit 10.26 to the Registrant's Quarterly
Report on Form 10-Q dated March 31, 2001, Commission File No.
1-9360, filed on May 15, 2001).
10.27 Secured Promissory Note dated January 2, 2001 between Shannon E.
Smith and Asset Investors Operating Partnership, L.P. (incorporated
herein by reference to Exhibit 10.27 to the Registrant's Quarterly
Report on Form 10-Q dated March 31, 2001, Commission File No. 1-
9360, filed on May 15, 2001).
* Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K:
None
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.
AMERICAN LAND LEASE INC.
(Registrant)
Date: August 14, 2001 By /s/Shannon E. Smith
-----------------------------
Shannon E. Smith
Chief Financial Officer
-23-