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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 2000, or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to _________
Commission File No.: 33-73748
FUND AMERICA INVESTORS CORPORATION II
(Exact name of registrant as specified in its charter)
Delaware 84-1218906
(State or other jurisdiction of (I.R.S. Employer identification number)
incorporation or organization)
6400 S. Fiddler's Green Circle, Suite 1200B, Englewood, Colorado 80111
(Address of principal executive offices)
Registrant's telephone number including area code: (303) 290-6025
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K. X
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: As of December 31, 2000: $0.00.
The number of shares outstanding of the Registrant's $0.01 par value
common stock, as of March 30, 2001 was 349,000 shares.
DOCUMENTS INCORPORATED BY REFERENCE None.
PART I
ITEM 1. BUSINESS
Fund America Investors Corporation II (the "Company") was incorporated
in the State of Delaware on December 14, 1992 as a limited purpose finance
corporation. The Company was established to engage in the issuance and
administration of Collateralized Mortgage Obligations (the "Bonds") and
Asset-Backed Certificates (the "Certificates", and together with the Bonds,
the "Securities"). The Securities are issued in one or more series, from time
to time, by the Company as described in the prospectus and series-related
prospectus supplement of the Company's latest effective registration
statement.
The Securities of each series can be issued by the Company, but typically
the Company forms a separate trust to act as the issuer solely for the
purpose of issuing a series. A series of Securities that include Bonds will be
issued pursuant to an indenture and will represent indebtedness of the trust
or issuer. A series of Securities that include Certificates will represent
beneficial ownership in the related trust or issuer. The sole source of
payments to Bondholders or Certificateholders within each series of
Securities is produced from the related trust property. The trust property is
generally comprised of mortgage loans and/or mortgage-related assets as
described in each of the series' related prospectus supplements.
The Company may not, either directly or indirectly through a beneficially
owned trust, engage in any business or investment activity other than to; (1)
issue and sell Bonds; (2) purchase, own, hold, pledge or sell collateral or
other mortgage-related assets; (3) invest and maintain cash balances on an
interim basis in high quality short-term securities; and (4) engage in other
activities which are necessary or convenient to accomplish the foregoing
and are incidental thereto.
On January 1, 2000, the Company had a total of $564 million registered and
unissued Securities on its Registration Statement No. 333-33823. During
the first quarter ended March 31, 2000, the Company issued one series of
Securities for $3.2 million. This series, Fund America Investors Corporation
II, Issuer Trust 2000-1, was issued pursuant to a separate prospectus
supplement filed on January 21, 2000. No Securities were issued during the
second, third and fourth quarters of 2000. After the first quarter issuance,
the balance of unissued Securities remaining on Registration Statement No.
333-33823 was $561 million as of December 31, 2000. From inception to
date, the Company has issued nineteen series of Securities which aggregate
$2.4 billion in original issued principal. The Company does not have any
further obligations in connection with the issuance of these Securities.
Under accounting principles generally accepted in the United States of
America, these issuances are considered to be a direct sale of the collateral.
The Company's fifth Registration Statement on Form S-3 was filed on
September 30, 1998 with the Securities and Exchange Commission. The
purpose of this filing was to register an additional amount of Securities and
to merge the Company's Effective Registration Statement No. 333-33823,
thereby increasing the total amount of Securities that can be issued by the
Company. As of December 31, 2000, this Registration Statement was not
effective and was subject to completion or amendment. The Company
intends to file one or more further amendments to complete this
Registration Statement and to bring it effective.
ITEM 2. PROPERTIES The Company has no material physical
properties.
ITEM 3. LEGAL PROCEEDINGS None.
Page 2
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders during the fourth
quarter of the fiscal year ended December 31, 2000.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no established public trading market for the Company's common
stock and no dividends have been declared or paid. All of the Company's
common stock is owned by a sole shareholder.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31,
--------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
Income Statement Data:
Revenue $ 94,956 $201,155 $370,890 $132,196 $199,448
Net income $ 51,682 $160,561 $196,084 $ 24,035 $ 42,165
Net income per share
of common stock (1) (1) (1) (1) (1)
Balance Sheet Data:
Total assets $257,353 $270,526 $475,180 $475,280 $442,444
Shareholder's equity $257,208 $270,526 $474,965 $466,479 $442,444
(1) Not presented, as all shares of common stock are held by a sole
shareholder.
Page 3
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
1. General
As of December 31, 2000, the Company has issued nineteen series of
registered Pass-Through Securities aggregating $2,439,812,829 in initial
amount for all the issuances. Twelve series of Bonds remain outstanding on
December 31, 2000. The following list consists of the outstanding series
shown with the initial issuance amounts.
Series Amount Collateral
- ----------- -------------- ---------------------------------------------
1993-A $262,435,000 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-B $ 77,409,000 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-C $319,000,000 Trust consisting primarily of Federal National
Mortgage Association and Federal Home Loan
Mortgage Corporation Securities;private mortgage
backed securities including certain residual
interest securities;principal component of bonds
issued by the Resolution Funding Corporation
1993-E $190,145,165 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-H $ 45,634,831 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1993-J $150,069,158 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1994-A $ 44,599,100 Trust consisting primarily of adjustable rate
one- to four-family, first lien mortgage loans
1997-NMC1 $121,765,000 Trust assets consisting primarily of adjustable
rate mortgage loans that are secured by first
lien mortgages on one- to four-family residen-
tial property
1998-A $ 60,373,853 Trust consisting primarily of one Pooled Fannie
Mae Certificate, two Pooled Freddie Mac Certifi-
cates and one Pooled Non-Agency Certificate
1998-B $ 50,703,106 Trust consisting primarily of three Pooled
Fannie Mae Certificates, one Pooled Ginnie Mae
Certificate, two Pooled Freddie Mac Certificates
and one Pooled Non-Agency Certificate
1998-NMC1 $236,526,000 Trust assets consisting primarily of adjustable
rate mortgage loans that are secured by first
lien mortgages on one- to four-family residen-
tial properties
2000-1 $ 3,216,000 Trust consisting primarily of Federal National
Mortgage Association and Federal Home Loan
Mortgage Corporation Securities
Page 4
2. Liquidity and Capital Resources
The Company expects to fund ongoing operations from its cash balances,
revenues derived from the issuance of Securities, and if necessary, from
loans or capital contributions from its sole shareholder. The current cash
position will not adequately fund overhead costs over the next twelve
months without additional revenues generated during this period. Capital
funding will be provided by the sole shareholder to cover anticipated costs
on a monthly basis or until the Company generates sufficient revenue. The
funding source for additional capital costs relating to the registration of
securities will be determined when the funding is required and will depend
on the cash position at that time.
3. Results of Operations
The Company does not have any significant assets other than cash held for
operations and capitalized deferred offering costs. Major operating activity
is initiated from the issuance of Securities or the preparation in registering
Securities to be issued. Costs incurred with registering Securities are
capitalized until such time as the Securities are issued in an offering.
Net income may fluctuate from period to period based on the use of the
Company's registered and unissued Securities. The Company generally
charges the issuer of a series of Securities a flat fee and a proportionate
share of deferred costs associated with its registration statement.
An evaluation of long-lived assets at December 31, 1998 resulted in
impairment of the Company's deferred offering costs. It was determined
that costs in excess of the currently accepted market pass-through costs
should be charged to net income. The net impairment charged to operations
in 1998 was $1,127. Based on pass-through fees charged in 2000, deferred
offering costs of $256,361 as of December 31, 2000, are expected to be
recovered in future issuances.
The Company reported net income for the year ended December 31, 2000 of
$51,682 compared to net income of $160,561 for the year ended December
31, 1999 and net income of $196,084 for the year ended December 31,
1998. The income reported for December 31, 2000 was the result of net
issuance fees earned of $69,895 and call option income of $18,000 received
when the call rights on Fund America Investors Corporation II, Series
1993-H were sold. In 1999, the Company earned income of $195,006 from
call option fees received when Fund America Investors Corporation II,
Series 1993-F certificates were called by the servicer. Call option income is
not a usual event, and the Company does not anticipate the receipt of call
option fees in future periods. The Company earned fees of $360,418 from
the issuance of three series of Securities in 1998. Variables affecting
comparable results of operations are typically the number of securitizations
completed and/or impairments of assets.
Results of Operations - Other Matters: Recently Issued Accounting
Pronouncements
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities," is effective for all fiscal
years beginning after June 15, 2000. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. Under SFAS No. 133, certain contracts that were not
formerly considered derivatives may now meet the definition of a
derivative. The Company adopted SFAS No. 133 effective January 1, 2001.
The adoption of SFAS No. 133 did not have a significant impact on the
financial position, results of operations, or cash flows of the Company.
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" (SAB No. 101), issued in December 1999 by the Securities and
Exchange Commission, clarifies existing accounting principles related to
revenue recognition in financial statements. The Company adopted SAB
No. 101 during the fourth quarter of 2000 and the adoption did not affect the
Company's financial statements for the year ended December 31, 2000
Page 5
4. Forward Looking Statements
The statements contained in this Item 7 and Item 7A that are not historical
facts, including, but not limited to, statements that can be identified by the
use of forward-looking terminology such as "may," "will," "expect,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology, are forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995, and involve a number of risks and uncertainties. The actual
results of the future events described in such forward-looking statements
could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results to differ
materially are: the market for mortgage-backed securities, competition,
government regulation and possible future litigation.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Securities issued by the Company are either debt securities or securities
which evidence beneficial ownership interest in designated trusts
established to facilitate the transfer of trust asset payments to the
Bondholders who hold such debt securities or to the Certificateholders who
hold such beneficial ownership interests. Assets securing payments to
Bondholders or Certificateholders are pledged or sold to designated trusts
and are not assets of the Company. Additionally, Bonds and Certificates
that are issued either by the Company or a trust formed by the Company do
not represent an ownership interest in or an obligation of the Company.
Disclosures required in this Item 7A are intended to clarify a registrant's
exposures to market risk associated with activities in derivative financial
instruments, other financial instruments, and derivative commodity
instruments. The purpose of this section is to disclose the material effects on
earnings, fair values, and cash flows that are inherent to potential market
risk exposure. Potential market risk associated with Securities issued under
the Company's registration statement will not have a material effect on the
Company's earnings or cash flow since the Securities do not represent an
interest in or an obligation of the Company. In addition, the Company has
no public common equity; all common stock of the Company is held by one
shareholder. Therefore, material effects of potential market risk exposure
on Securities issued from the Company will not have any significant impact
on the Company.
Page 6
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholder
Fund America Investors Corporation II
Englewood, Colorado
We have audited the accompanying balance sheets of Fund America
Investors Corporation II as of December 31, 2000 and 1999, and the related
statements of operations, shareholder's equity, and cash flows for each of
the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Fund America Investors Corporation II as
of December 31, 2000 and 1999, and the results of its operations and its
cash flows for each of the three years in the period ended December 31,
2000 in conformity with accounting principles generally accepted in the
United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
March 21, 2001
Page 7
FUND AMERICA INVESTORS CORPORATION II
Balance Sheets
December 31,
-----------------------------
2000 1999
---------- ----------
Assets
Cash and cash equivalents $ 797 $ 15,513
Deferred offering costs, net 256,361 254,826
Prepaid expenses 195 187
--------- ---------
Total assets $ 257,353 $ 270,526
========= =========
Liabilities - accounts payable $ 145 $ -
--------- ---------
Commitments and Contingencies
Shareholder's equity
Common stock, par value $.01
per share; 1,000,000 shares
authorized; 349,000 shares
issued and outstanding 3,490 3,490
Additional paid-in capital 450,510 445,510
Shareholder distributions (1,849,798) (1,779,798)
Retained earnings 1,653,006 1,601,324
--------- ---------
Total shareholder's equity 257,208 270,526
--------- ---------
Total liabilities and
shareholder's equity $ 257,353 $ 270,526
========= =========
See notes to financial statements
Page 8
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
Year Ended December 31,
----------------------------------------
2000 1999 1998
---------- ---------- ----------
Revenue
Issuance fees $ 76,253 $ - $ 360,418
Interest 703 6,149 10,472
Other bond income 18,000 195,006 -
--------- --------- ---------
Total revenue 94,956 201,155 370,890
--------- --------- ---------
Expenses
Amortization of deferred
offering costs 1,253 - 135,418
General and administrative 18,021 16,594 14,261
Management fees 24,000 24,000 24,000
Impairment of long-lived
assets - - 1,127
--------- --------- ---------
Total expenses 43,274 40,594 174,806
--------- --------- ---------
Net income $ 51,682 $ 160,561 $ 196,084
========= ========= =========
See notes to financial statements
Page 9
FUND AMERICA INVESTORS CORPORATION II
Statements of Shareholder's Equity
Years Ended December 31, 2000, 1999 and 1998
Common Stock Addi- Share-
---------------- tional holder
Number of Par Paid-in Distrib- Retained
Shares Value Capital utions Earnings Totals
------- ------ --------- ------------ ---------- ---------
Balances at
January 1,
1998 349,000 $3,490 $445,510 $(1,227,200) $1,244,679 $ 466,479
Shareholder
distributions - - - (187,598) - (187,598)
Net income - - - - 196,084 196,084
------- ------ -------- ----------- ---------- ---------
Balances at
December 31,
1998 349,000 3,490 445,510 (1,414,798) 1,440,763 474,965
Shareholder
distributions - - - (365,000) - (365,000)
Net income - - - - 160,561 160,561
------- ------ -------- ----------- ---------- ---------
Balances at
December 31,
1999 349,000 3,490 445,510 (1,779,798) 1,601,324 270,526
Shareholder
distributions - - - (70,000) - (70,000)
Capital
contribution - - 5,000 - - 5,000
Net income - - - - 51,682 51,682
------- ------ -------- ----------- ---------- --------
Balances at
December 31,
2000 349,000 $3,490 $450,510 $(1,849,798) $1,653,006 $257,208
======= ====== ======== =========== ========== ========
See notes to financial statements
Page 10
FUND AMERICA INVESTORS CORPORATION II
Statements of Cash Flows
Year Ended December 31,
--------------------------------------
2000 1999 1998
---------- ---------- ----------
Net cash flows from operating
activities:
Net income $ 51,682 $ 160,561 $ 196,084
Adjustments to reconcile net
income to net cash from
operating activities:
Amortization of deferred
offering costs 1,253 - 135,418
Impairment of deferred
offering costs - - 1,127
Changes in operating assets
and liabilities:
Accounts payable 145 (215) (8,586)
Prepaid expenses (8) (8) (7)
---------- ---------- ----------
Net cash provided by operating
activities: 53,072 160,338 324,036
Cash flows used in investing
activities:
Additions to deferred offering
costs (2,788) (6,271) (20,303)
Cash flows used in financing
activities:
Capital contributions 5,000 - -
Shareholder distributions (70,000) (365,000) (187,598)
---------- ---------- ----------
Net cash used in financing
activities: (65,000) (365,000) (187,598)
---------- ---------- ----------
Net (decrease) increase in cash
and cash equivalents (14,716) (210,933) 116,135
Cash and cash equivalents at
beginning of year 15,513 226,446 110,311
---------- ---------- ----------
Cash and cash equivalents at
end of year $ 797 $ 15,513 $ 226,446
========== ========== ==========
See notes to financial statements
Page 11
FUND AMERICA INVESTORS CORPORATION II
Notes to Financial Statements
Note 1. The Company
Fund America Investors Corporation II (the "Company") was incorporated
in the State of Delaware on December 14, 1992 as a limited purpose finance
corporation. The Company was established to engage in the issuance and
administration of Collateralized Mortgage Obligations (the "Bonds") and
Asset-Backed Certificates (the "Certificates", and together with the Bonds,
the "Securities"). The Securities are issued in one or more series, from time
to time, by the Company in accordance with the provisions in the
prospectus and series-related prospectus supplement of the Company's latest
effective registration statement.
The Securities of each series can be issued by the Company, but typically
the Company forms a separate trust to act as the issuer solely for the
purpose of issuing a series. A series of Securities that include Bonds will be
issued pursuant to an indenture and will represent indebtedness of the trust
or issuer. A series of Securities that include Certificates will represent
beneficial ownership in the related trust or issuer. The sole source of
payments to Bondholders or Certificateholders within each series of
Securities is produced from the related trust property. The property or
assets within each trust are comprised of mortgage-related assets as defined
in each of the series' related prospectus supplements.
The Company will not, either directly or indirectly through a beneficially
owned trust engage in any business or investment activity other than to; (1)
issue and sell Bonds; (2) invest cash balances on an interim basis in high
quality short-term securities; (3) purchase, own, hold, pledge or sell
collateral or other mortgage-related assets; (4) engage in other activities
which are necessary or convenient to accomplish the foregoing and are
incidental thereto.
Note 2. Summary of Significant Accounting Policies
In connection with the issuance of Securities, the Company generally will
enter into a purchase agreement with the seller of the mortgage assets or the
collateral. Simultaneously, the collateral is conveyed, by the Company, to
the trust who issues the Securities, pursuant to a pooling and servicing
agreement. Correspondingly, the purchase price for the Collateral payable to
the seller is netted out from the proceeds realized from the sale of the
Securities. Therefore, the Company's financial statements reflect the net
result of the issuance and not the gross amounts attributable to the purchase
price of the collateral and the sales proceeds from the issuance of the
Securities.
Costs of registering securities are deferred. As the Securities are issued
from the registered securities, costs are charged to operations. The charge is
based on the ratio of bonds issued to securities registered but previously
unissued.
Fees from the Security issuance transactions are recognized as revenue
when the transactions close. All expenses of the transaction, including a
portion of deferred offering costs, are charged to operations.
For purposes of reporting cash flows, cash and cash equivalents include
demand deposit accounts.
Net income per share is not presented, as all shares of common stock are
held by a sole shareholder.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 amount of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Page 12
Note 2. Summary of Significant Accounting Policies (continued)
Statement of Financial Accounting Standards (SFAS) No. 107
"Disclosure about Fair Value of Financial Instruments," requires disclosure
of fair value information about financial instruments, whether or not
recognized in the balance sheet. The Company's financial instruments
include: cash and cash equivalents, and accounts payable. The carrying
amount of these assets and liabilities approximates their fair value.
The Company evaluates long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. If a long-lived asset is identified as impaired, the
value of the asset must be reduced to its fair value. The Company's deferred
offering costs are considered long-lived assets under this pronouncement.
An evaluation of long-lived assets resulted in impairment of the Company's
deferred offering costs at December 31, 1998. It was determined that costs
in excess of the currently accepted market pass-through costs should be
charged to net income. During 2000 and 1999, management determined
that there was no impairment of the Company's long-lived assets. The net
impairment charged to operations was $1,127 in 1998.
SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information," requires the disclosure of operating segments and the
geographic location of the Company. Management considers the
Company's business to presently comprise of a single operating segment,
and all of the Company's operations were concentrated in Englewood,
Colorado.
Recently Issued Accounting Standards
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," is effective for all fiscal years beginning after June 15, 2000.
SFAS No. 133, as amended, establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities. Under SFAS No.
133, certain contracts that were not formerly considered derivatives may
now meet the definition of a derivative. The Company adopted SFAS No.
133 effective January 1, 2001. The adoption of SFAS No. 133 did not have
a significant impact on the financial position, results of operations, or cash
flows of the Company.
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" (SAB No. 101) issued in December 1999 by the Securities and
Exchange Commission, clarifies existing accounting principles related to
revenue recognition in financial statements. The Company adopted SAB
No. 101 during the fourth quarter of 2000 and the adoption did not affect the
Company's financial statements for the year ended December 31, 2000.
Note 3. Income Taxes
Under S Corporation guidelines of the Internal Revenue Code, the
Company has elected to be treated substantially as a partnership for income
tax purposes. As a result, the sole shareholder reports any taxable income
or loss of the Company on his individual tax return. Accordingly, no
provision for federal income taxes has been recorded in the financial
statements.
Note 4. Related Party Transactions
The Company has engaged in related party transactions as discussed
below. Accordingly, the accompanying financial statements are not
necessarily indicative of the financial position that would exist or the results
of operations that would have occurred if the transactions had been with
unaffiliated entities.
The sole shareholder of the Company is also the sole shareholder,
President and Director of The Chotin Group Corporation. On January 1,
1993, the Company entered into a Management Agreement with The Chotin
Group Corporation (the "Facilities Manager"). This agreement remains in
force until written termination of the agreement is presented by either party.
As of December 31, 2000, no such notice of termination has been given or
received by the Company. Under the terms of the agreement, the
Page 13
Note 4. Related Party Transactions (continued)
Facilities Manager is required to provide facilities use and other services
necessary for the Company to manage its business affairs. The management
fees paid during each of the three years ended December 31, 2000 were
$24,000.
Note 5. CMO Information
At December 31, 2000 and 1999, the outstanding principal balance of the
issued Securities and the amount of publicly and privately issued securities
were as follows:
2000
----------------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
-------- -------------- -------------- ---------------
1993-A $ 57,486,997 $ 54,457,257 $ 3,029,740
1993-B 10,009,582 6,600,244 3,409,338
1993-C 139,299,724 139,299,724 -
1993-E 17,393,581 14,491,962 2,901,619
1993-H 4,144,862 4,144,862 -
1993-J 12,120,924 11,522,661 598,263
1994-A 3,290,964 2,874,174 416,790
1997-NMC1 13,327,473 13,327,473 -
1998-A 10,331,855 10,331,855 -
1998-B 37,578,296 37,578,296 -
1998-NMC1 44,459,845 44,459,845 -
2000-1 2,882,890 2,733,290 149,600
------------ ------------ -----------
Total $352,326,993 $341,821,643 $10,505,350
============ ============ ===========
1999
----------------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
-------- -------------- -------------- ---------------
1993-A $ 71,694,755 $ 68,444,059 $ 3,250,696
1993-B 12,692,393 9,173,079 3,519,314
1993-C 152,419,021 152,419,021 -
1993-E 24,858,455 20,711,537 4,146,918
1993-H 5,771,393 5,771,393 -
1993-J 15,776,894 14,975,146 801,748
1994-A 4,104,297 3,528,849 575,448
1996-A 41,747,842 41,747,842 -
1997-NMC1 29,819,797 29,819,797 -
1998-A 11,956,177 11,956,177 -
1998-B 38,532,238 38,532,238 -
1998-NMC1 122,158,583 122,158,583 -
------------ ------------ -----------
Total $531,531,845 $519,237,721 $12,294,124
============ ============ ===========
Page 14
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Position Age
- ------------------ ---------------------------------- -----
Steven B. Chotin Director, Chairman, Chief Executive
Officer and President 53
M. Garrett Smith Director 39
Helen M. Dickens Director, Vice President
and Secretary 47
Matthew T. Kennedy Assistant Secretary 25
Annel Henderson Principal Accounting Officer
and Controller 39
Steven B. Chotin, 53, has been a Director and the Chairman, Chief
Executive Officer and President of the Company since its inception.
Mr. Chotin has been President of The Chotin Group Corporation, a financial
service firm, since July 1984. Mr. Chotin was a director of American
Southwest Financial Corporation and of American Southwest Finance Co.,
Inc. from 1982 to 1994. Mr. Chotin may be deemed to be a "promoter"
within the meaning of Rule 405 under the Securities Act of 1933, as
amended (the "Act").
M. Garrett Smith, 39, joined Pitkin Fuel Corporation out of Dallas, Texas
in January 2001 as it's Chief Financial Officer. Previously, Mr. Smith was
Chief Financial Officer at Stonebridge Technologies. Prior to Stonebridge,
Mr. Smith was Executive Vice President and Chief Financial Officer of
Pioneer Natural Resources Company. He also served as a Senior Vice
President of Corporate Acquisitions at Pioneer. Prior to joining Pioneer,
Mr. Smith was a partner with BTC Partners, a financial consultant to
MESA, Inc.
Helen M. Dickens, 47, has been a Director of the Company since 1995,
Vice President and Secretary of the Company since 1989. Ms. Dickens is
also Vice President and Chief Operations Officer of The Chotin Group
Corporation, positions she has held since 1989. Prior to joining The Chotin
Group Corporation, Ms. Dickens served as Assistant Corporate Secretary
and Assistant to the Chairman of the Board and President of Uniwest
Financial Corp., a non-diversified savings and loan holding company.
Matthew T. Kennedy, 25, has been the Assistant Secretary of the Company
since 1999. Mr. Kennedy joined The Chotin Group Corporation in 1999 as
a financial analyst. In 1998, Mr. Kennedy received a Bachelor of Science
degree from Miami University with a Major in Economics and a Minor in
Information Systems.
Annel Henderson, 39, has been the Controller of the Company since 1992
and the Principal Accounting Officer since 1995. Mrs. Henderson has been
the Controller of The Chotin Group Corporation since 1992. Prior to 1992,
she was Accounting Manager of Community Holdings Corporation.
Directors and Executive Officers are elected annually for a one-year term.
Page 15
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 2000, no executive officer had received any
compensation exceeding $100,000.
The Company has not paid any compensation pursuant to plans or any
other compensation arrangement. The Company pays its outside director a
monthly fee of $150.00. No other officers or directors receive any
compensation for their services.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Amount and
Nature Of
Title Beneficial Percent
of Class Name and Address of Beneficial Owner Ownership (1) of Class
- -------- ------------------------------------ ------------- --------
Common Steven B. Chotin 349,000 100%
6400 S. Fiddler's Green Circle
Suite 1200, Englewood, CO 80111
(1) Amount of such shares with respect to which persons indicated have the
right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under
the Securities Exchange Act of 1934: Zero.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information relating to this Item is incorporated herein by reference to
Item 8, "Financial Statements and Supplementary Data" under Note 4
"Related Party Transactions."
Page 16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
- Independent Auditors' Report
- Balance Sheets at December 31, 2000 and 1999
- Statements of Operations for the Years Ended
December 31, 2000, 1999 and 1998
- Statements of Shareholder's Equity for the Years
Ended December 31, 2000, 1999 and 1998
- Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998
- Notes to Financial Statements for the Years Ended
December 31, 2000, 1999 and 1998
(a)(2) Financial Statement Schedules
The financial statement schedules have been omitted because
they are inapplicable.
(b) Reports on Form 8-K
None
(c) Exhibits
None
Page 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
FUND AMERICA INVESTORS CORPORATION II
(Registrant)
Date: March 30, 2001 By: /s/ Helen M. Dickens
--------------------- ----------------------------------
Helen M. Dickens
Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Steven B. Chotin Director, Chairman, Chief March 30, 2001
- --------------------- Executive Officer and President
Steven B. Chotin (Principal Executive Officer)
/s/ Helen M. Dickens Director, Vice President and March 30, 2001
- --------------------- Treasurer (Principal Financial
Helen M. Dickens Officer)
/s/ Garrett Smith Director March 30, 2001
- ---------------------
Garrett Smith
/s/ Matthew T. Kennedy Assistant Secretary March 30, 2001
- ----------------------
Matthew T. Kennedy
/s/ Annel Henderson Principal Accounting Officer March 30, 2001
- ----------------------
Annel Henderson
Page 18
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT
TO SECTION 12 OF THE ACT.
Since the Company has a sole shareholder, the Company has not sent and
will not send an annual report or proxy material to its shareholder.
Page 19