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ASSET INVESTORS CORPORATION REPORTS FIRST QUARTER EARNINGS

 DENVER, May 17 /PRNewswire/ -- Asset Investors Corp. (NYSE: AIC) today announced that its REIT income for the three months ended March 31, 1993, is estimated to be $9,300,000 or 67 cents per share as compared to REIT income of $6,000,000 or 43 cents per share for the first quarter of 1992. In the first quarter of 1993, the company's excess inclusion income was estimated to be $16,400,000 or $1.17 per share as compared to excess inclusion income in the first quarter of 1992 of $10,600,000 or 76 cents per share.
 To maintain its status as a REIT, the company is required to distribute dividends to its stockholders equal to at least 95 percent of the greater of the company's (i) REIT income or (ii) excess inclusion income. Excess inclusion income results from many of the company's CMO ownership interests and cannot be reduced by losses from the company's other CMO ownership interests or operating expenses.
 On May 14, 1993, the company paid a first quarter dividend of 10 cents per share as compared to a dividend of 50 cents per share for the same period of 1992. Based on this dividend, as well as dividends paid through Dec. 31, 1992, the company currently estimates that it will have to distribute an additional $42,400,000 in dividends related to REIT income and excess inclusion income for 1992 and the first quarter of 1993 in order to satisfy its REIT distribution requirements. The specific form and timing of these dividend distributions has not yet been determined, but it is currently expected that all or a significant portion of these distributions will be securities. The company believes that as a result of the tax treatment of excess inclusion income, the company will have a net operating loss carryover of approximately $33,100,000 at March 31, 1993, which can be used when REIT income exceeds excess inclusion income.
 Spencer I. Browne, president and chief executive officer of Asset Investors, stated, "The increase in the company's REIT income and excess inclusion income primarily was due to earnings on the 30 CMO ownership interests and CMO classes acquired for approximately $88,000,000 during 1992 and 1993, which more than offset the adverse effect of high prepayments on the company's other ownership interests. These increased prepayments were due to the decline in mortgage interest rates to their lowest levels in 20 years. We anticipate that prepayment rates will be higher in the second quarter of 1992 than in the first quarter."
 The company incurred a book loss computed in accordance with generally accepted accounting principles (GAAP) of $6,486,000 or 46 cents per share for the three months ended March 31, 1993, as compared to book income for the three months ended March 31, 1992, of $4,737,000 or 34 cents per share. The decrease in the company's GAAP income primarily resulted from high levels of mortgage collateral prepayments in the first quarter of 1993.
 In addition, projected prepayment speeds at March 31, 1993, increased from their levels at Dec. 31, 1992, reducing the value of the projected excess cash flow from many of the company's CMO ownership interests at March 31, 1993, from the amount projected at Dec. 31, 1992. This resulted in write-downs and reserves of $7,012,000 with respect to the company's CMO residuals and CMO subsidiaries. The provision for reserves and write-downs have no effect on the determination of REIT income, excess inclusion income or the company's dividend distribution requirements. If prepayments continue to increase, additional reserves and write-downs may be required.
 Although the company has not made any definitive decision at this time, it believes that as a result of the current residential real estate environment and the company's distribution requirements, the business conducted by the company may be substantially restructured and may also focus in the future on other permissible REIT activities including, but not limited to, the acquisition of ownership interests in securitization of commercial real estate. The company expects to make a further announcement regarding this matter in the near future.
 Asset Investors Corp. is a real estate investment trust which generates income from a portfolio of ownership interests in the issuance of collateralized mortgage obligations (CMOs) and other mortgage-related assets.
 ASSET INVESTORS CORP. AND SUBSIDIARIES
 Summary of Financial Results
 (In thousands, except per share data)
 Three months ended March 31 1993 1992
 Estimated REIT income:
 REIT income $ 9,300 $ 6,000
 REIT income per share .67 .43
 Excess inclusion income:
 Excess Inclusion income $16,400 $ 10,600
 Excess Inclusion income per share 1.17 .76
 GAAP income:
 Revenues, before write-downs (A) $77,365 $118,429
 Net income, before provision for reserves
 and write-downs 526 5,097
 Provision for reserves and write-downs (7,012) (360)
 Net (loss) income (6,486) 4,737
 Net (loss) income per share (.46) .34
 Dividends:
 Dividends paid per share (B) $ .10 $ .50
 Shares outstanding:
 Weighted average shares outstanding 13,986 13,986
 (A) -- CMO subsidiaries are accounted for under the consolidation method (which records the gross amount of the mortgage collateral, CMO bonds, interest income and interest expense in the Condensed Consolidated Financial Statements).
 Conversely, CMO residuals and CMO classes are accounted for under a method which, unlike the consolidation method, requires the carrying amount of, and the earnings and cash flows from, such portfolio assets to be recorded as a single-line item on each of the respective Condensed Consolidated Financial Statements.
 Based on the criteria established under GAAP, all portfolio assets acquired by the company during the past four years were classified, for accounting purposes, as CMO residuals or CMO classes. Because the company has not acquired any CMO subsidiaries since July 1988, revenues and expenses from CMO subsidiaries have declined during each subsequent period. The decline results from mortgage loan repayments during these periods which decreased the principal balance of the related mortgage collateral and CMO bonds and, as a result, reduced interest income and interest expense. Unless the company acquires additional CMO subsidiaries, revenues and expenses from CMO subsidiaries are expected to continue to decline.
 2. The first quarter 1993 dividend was paid on May 14, 1993, to stockholders of record on May 3, 1993.
 -0- 5/17/93
 /NOTE TO EDITORS: For additional information on Asset Investors Corp. by FAX at no cost, dial 1-800-PRO-INFO, Code No. 016/
 /CONTACT: Spencer I. Browne, president and CEO, or Michael H. Feinstein, executive vice president of Asset Investors, 303-793-2703; or Gary Strong in Chicago, 312-266-7800, or Regina Ryan in New York, 212-661-8030, both of the Financial Relations Board, for Asset Investors/
 (AIC)


CO: Asset Investors Corp. ST: Colorado IN: FIN SU: ERN

GK -- NY045 -- 9160 05/17/93 11:31 EDT
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Date:May 17, 1993
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