<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 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 number 0-15724
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
(Exact name of registrant as specified in its charter)
DELAWARE 13-3294835
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 Cambridge Center, 9th Floor
Cambridge, Massachusetts 02142
(Address of principal executive offices)
(617) 234-3000
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check 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 / /
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
BALANCE SHEETS - March 31, 2000 and December 31, 1999 .................. 1
STATEMENTS OF OPERATIONS - For the three months ended March 31, 2000
and 1999 .......................................................... 2
STATEMENT OF PARTNERS' EQUITY - For the three months ended
March 31, 2000 .................................................... 3
STATEMENTS OF CASH FLOWS - For the three months ended
March 31, 2000 and 1999 ........................................... 4
NOTES TO FINANCIAL STATEMENTS .......................................... 5
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ............................. 10
ITEM 3 QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ........ 11
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K ................................ 12
SIGNATURES ................................................................. 13
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
BALANCE SHEETS
March 31, December 31,
2000 1999
---- ----
ASSETS
Cash and cash equivalents $ 2,116,415 $ 7,639,679
Investment in mortgage loan (net of allowance
for loan losses of $5,000,000) -- --
Real estate - net 3,987,803 4,024,056
Other assets 448,624 165,171
----------- -----------
$ 6,552,842 $11,828,906
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Mortgage loan payable $ 3,302,954 $ 3,327,004
Due to affiliates 460,892 460,892
Accounts payable and accrued expenses 155,254 196,854
----------- -----------
Total liabilities 3,919,100 3,984,750
----------- -----------
Commitments and contingencies
Partners' equity
Limited partners' equity (330,004 units
issued and outstanding) 2,502,105 7,451,999
General partners' equity 131,637 392,157
----------- -----------
Total partners' equity 2,633,742 7,844,156
----------- -----------
$ 6,552,842 $11,828,906
=========== ===========
See notes to financial statements.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
STATEMENTS OF OPERATIONS
For the three months ended
March 31,
2000 1999
---- ----
Revenues
Operating income - real estate $337,610 $321,417
Short-term investment interest 47,172 49,410
Other income -- 106,760
-------- --------
384,782 477,587
-------- --------
Costs and expenses
Operating expenses - real estate 245,089 240,524
Mortgage loan interest expense 70,615 72,326
General and administrative 28,943 43,291
Depreciation expense 39,959 37,894
-------- --------
384,606 394,035
-------- --------
Net income $ 176 $ 83,552
======== ========
Net income attributable to
Limited partners $ 167 $ 79,374
General partners 9 4,178
-------- --------
$ 176 $ 83,552
======== ========
Net income per unit of limited partnership
interest (330,004 units outstanding) $ -- $ .24
======== ========
See notes to financial statements.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
STATEMENT OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
General Limited Total
Partners' Partners' Partners'
Equity Equity Equity
------ ------ ------
<S> <C> <C> <C>
Balance, January 1, 2000 $ 392,157 $ 7,451,999 $ 7,844,156
Net income for the three months ended
March 31, 2000 9 167 176
Distributions to Partners ($15.79 per Limited
Partnership Unit) (260,529) (4,950,061) (5,210,590)
----------- ----------- -----------
Balance, March 31, 2000 $ 131,637 $ 2,502,105 $ 2,633,742
=========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the three months ended
March 31,
---------
2000 1999
---- ----
<S> <C> <C>
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS
Cash flows from operating activities
Net income $ 176 $ 83,552
Adjustments to reconcile net income to net cash
(used in) provided by operating activities
Depreciation 39,959 37,894
Changes in operating assets and liabilities
Other assets (283,453) 56,837
Accounts payable and accrued expenses (41,600) 80,782
Due to affiliates -- 5,000
----------- -----------
Net cash (used in) provided by operating activities (284,918) 264,065
----------- -----------
Cash flows from investing activities
Principal payments on mortgage loan payable (24,050) (22,254)
Additions to real estate assets (3,706) (119,381)
----------- -----------
Net cash used in investing activities (27,756) (141,635)
----------- -----------
Cash flows from financing activities
Distributions to partners (5,210,590) --
----------- -----------
Net (decrease) increase in cash and cash equivalents (5,523,264) 122,430
Cash and cash equivalents, beginning of period 7,639,679 4,639,050
----------- -----------
Cash and cash equivalents, end of period $ 2,116,415 $ 4,761,480
=========== ===========
Supplementary disclosure of cash flow information
Interest paid $ 70,615 $ 72,326
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS
1 INTERIM FINANCIAL INFORMATION
The summarized financial information of the Resources Accrued Mortgage
Investors, L.P. - Series 86 (the "Partnership") contained herein is
unaudited; however, in the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of such financial information have been included. The
accompanying financial statements, footnotes and discussions should be
read in conjunction with the financial statements, footnotes and
discussions contained in the Partnership's annual report on Form 10-K for
the year ended December 31, 1999. The accounting policies used in
preparing these financial statements are consistent with those described
in the December 31, 1999 financial statements. The results of operations
for the three months ended March 31, 2000, are not necessarily indicative
of the results to be expected for the year ending December 31, 2000.
2 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
The Investment General Partner of the Partnership, RAM Funding, Inc., the
Administrative General Partner, Resources Capital Corp. and the Associate
General Partner, Presidio AGP Corp., are wholly-owned subsidiaries of
Presidio Capital Corp. ("Presidio"). The General Partners and certain of
their affiliates are general partners in several other limited
partnerships which are also affiliated with Presidio, and which are
engaged in businesses that are, or may in the future, be in direct
competition with the Partnership.
Subject to the rights of the Limited Partners under the Limited
Partnership Agreement, Presidio controls the Partnership through its
indirect ownership of the General Partners. On August 28, 1997, an
affiliate of NorthStar Capital Partners acquired all of the Class B shares
of Presidio. This acquisition, when aggregated with previous acquisitions,
caused NorthStar Capital Partners to acquire indirect control of the
General Partners. Effective July 31, 1998, Presidio is indirectly
controlled by NorthStar Capital Investment Corp. ("NorthStar"), a Maryland
corporation.
In August 1997, Presidio entered into a management agreement with
NorthStar Presidio Management Company, LLC ("NorthStar Presidio"), an
affiliate of NorthStar. Under the terms of the management agreement,
NorthStar Presidio provided the day-to-day management of Presidio and its
direct and indirect subsidiaries and affiliates. For the three months
ended March 31, 2000 and 1999, reimbursable expenses due to NorthStar
Presidio from the Partnership amounted to $0 and $5,000, respectively.
On October 21, 1999, Presidio entered into a new Services Agreement with
AP-PCC III, L.P. (the "Agent") pursuant to which the Agent was retained to
provide asset management and investor relation services to the Partnership
and other entities affiliated with the Partnership.
As a result of this agreement, the Agent has the duty to direct the day to
day affairs of the Partnership, including, without limitation, reviewing
and analyzing potential sale, financing or restructuring proposals
regarding the Partnership's assets, preparation of all Partnership
reports, maintaining Partnership records and maintaining bank accounts of
the Partnership. The Agent is not permitted, however, without the consent
of Presidio, or as otherwise required under the terms of the Partnership's
Agreement of Limited Partnership (the "Partnership Agreement") to, among
other things, cause the Partnership to sell or acquire an asset or file
for bankruptcy.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS
2 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
In order to facilitate the provision by the Agent of the asset management
services and the investor relation services, effective October 25, 1999,
the officers and directors of the General Partner resigned and nominees of
the Agent were elected as the officers and directors of the General
Partner. The Agent is an affiliate of Winthrop Financial Associates, a
Boston based company that provides asset management services, investor
relation services and property management services to over 150 limited
partnerships which own commercial property and other assets. The General
Partner does not believe that this transaction will have a material effect
on the operations of the Partnership.
The Administrative General Partner is entitled to receive an asset
management fee for services rendered in the administration and management
of the Partnership's operations equal to 1/4 of 1% per annum of the Net
Asset Value of the Partnership, as defined in the Limited Partnership
Agreement. Payment of the asset management fee was deferred until
commencement of the disposition of the Partnership's mortgage loans, with
interest on the amount deferred at 10% per annum, compounded annually. No
assets management fee was earned for the three months ended March 31, 2000
or 1999.
The Administrative General Partner is also entitled to receive a
mortgage-servicing fee at an annual rate of 1/4 of 1% per annum of the
principal balance of the Partnership's mortgage loans outstanding from
time to time. Payment of the mortgage servicing fee is deferred until
disposition of the applicable mortgage loan, with interest on the amount
deferred at 10% per annum, compounded annually. No mortgage-servicing fee
was earned for the three months ended March 31, 2000 or 1999.
Amounts due to affiliates for asset management and mortgage servicing fees
consist of the following:
March 31, December 31,
2000 1999
----------- ------------
Asset management fee
(principally deferred interest) $ 460,892 $ 460,892
=========== ===========
There are no amounts outstanding for mortgage servicing fees.
The General Partners collectively are allocated 5% of the net income or
loss of the Partnership and are entitled to receive 5% of distributions.
Such amounts are allocated or distributed 4.8% to the Administrative
General Partner, 0.1% to the Investment General Partner, and 0.1% to the
Associate General Partner.
In addition, affiliates of the General Partners hold a 5% special limited
partnership interest in West Palm and hold notes which are secured by a
35.7% limited partner interest in West Palm. To the extent any amounts are
paid to such affiliates on account of the loans secured by the limited
partner interests, the Partnership is entitled to 50% of such amounts.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS
2 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
Finally, on November 17, 1999, Bighorn Associates, LLC ("Bighorn"), a
wholly-owned subsidiary of Presidio Capital Investment Company, LLC, the
sole shareholder of Presidio, commenced a tender offer to purchase limited
partnership units of the Partnership. Upon the expiration of the tender
offer in December 1999, Bighorn purchased 46,766 limited partnership units
for $22 per unit, which represents approximately 14.2% of the
Partnership's outstanding limited partnership units. Accordingly, Bighorn
holds an approximately 14.2% limited partnership interest in the
Partnership.
3 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES
The Partnership originally invested its net proceeds in sixteen
non-recourse, zero-coupon junior mortgage loans which aggregated
$70,332,103. At March 31, 2000, continues to hold the West Palm loan and
the motel property in Richmond, Virginia which the Partnership acquired
title to as a result of its foreclosure on the Southern Inns Loan.
Collection of amounts due on the Partnership's junior mortgage loans is
solely dependent upon the sale or refinancing of the underlying properties
at amounts sufficient to satisfy the Partnership's mortgage loans, after
payment of the senior mortgage loans held by unaffiliated third parties.
West Palm loan
The West Palm loan, in the original principal amount of $9,200,000, was
made to West Palm Associates Limited Partnership ("West Palm"). The loan
is secured by a 582-unit apartment complex located in Los Angeles,
California.
On July 2, 1996, West Palm filed for protection under Chapter 11 of the
United States Bankruptcy Code. Although the bankruptcy protection enabled
West Palm to avoid an imminent foreclosure, there was no assurance that
West Palm will be able to successfully restructure its debt service
obligations on the first mortgage. The Partnership had reserved the entire
carrying value of the West Palm loan in 1993. The Partnership filed a
Proof of Claim for all outstanding principal, accrued interest, prepayment
penalties, additional interest and all other costs and obligations of West
Palm to the Partnership.
In February 1997, a Plan of Reorganization was filed which called for a
restructuring of the Partnership's mortgage, and in September 1997, the
restructuring agreement was executed. The Partnership has reduced its
indebtedness to $5,000,000, with interest accruing at 7% per annum and
extended the maturity date to February 2017. The Partnership is also
entitled to a participation interest in the event of a sale of the
property. The Partnership has fully reserved for this investment and is
unable to determine at the present time whether any amounts will be
received upon the ultimate sale or disposition of the property.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS
3 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES (CONTINUED)
West Palm loan (continued)
West Palm previously approached the General Partner seeking to restructure
the Partnership's loan. During the course of these negotiations, West Palm
entered into an agreement to sell its property to an unaffiliated third
party. As a condition to the entering into of this agreement, the
Partnership agreed to accept a payment of $5,000,000 in full satisfaction
of the West Palm loan. The agreement with West Palm is for the current
sale only, and if the sale is not consummated the Partnership and West
Palm would be required to continue their negotiations with respect to any
future sale. The Partnership has been advised that the sale is subject to
numerous conditions including the consent of the limited partners of West
Palm. At this time, there can be no assurance that the sale will occur.
Due to the uncertainties with respect to the sale of the West Palm
property and the potential payment to the Partnership, management has not
recorded any loan loss recovery as of March 31, 2000.
A summary of mortgage activity is as follows:
<TABLE>
<CAPTION>
Three months ended Year ended
March 31, 2000 December 31, 1999
------------------------------------ --------------------------------------
Investment Interest Investment Interest
Method Method Total Method Total Total
---------- ---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Opening balance $ -- $ -- $ -- $ -- $ -- $ --
Recovery of loan losses -- -- -- 2,481,562 -- 2,481,562
Interest recognized -- -- -- 1,405,993 -- 1,405,993
Payments received on
mortgage loan -- -- -- (3,887,555) -- (3,887,555)
---------- ---------- ---------- ----------- ----------- -----------
Ending balance $ -- $ -- $ -- $ -- $ -- $ --
========== ========== ========== =========== =========== ===========
</TABLE>
Information with respect to the Partnership's investments in mortgage
loans is as follows:
<TABLE>
<CAPTION>
Date Mortgage Mortgage
Interest Compound Loan Maturity Prepayment Amount Purchased Placement
Description Rate Period Date Date Permissible Advanced Interest Fee
- ----------- ---- ------ ---- ---- ----------- -------- -------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Residential
West Palm 13.46% Monthly 16-Jun-88 1-Jul-2000 1-Jul-97 $9,200,000 $ -- $ 539,589
========== ======== =========
Los Angeles, CA
</TABLE>
<TABLE>
<CAPTION>
Interest recognized Carrying value
-------------------- Write-offs, --------------
March 31, 1999 and net of Payments March 31, December 31,
Description 2000 Prior Reserves Recoveries Received 2000 1999
- ----------- ---- ----- -------- ---------- -------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Residential
West Palm $ -- $ -- $(5,000,000) $(4,739,589) $ -- $ -- $ --
========= ========= =========== =========== ========= ========= =========
Los Angeles, CA
</TABLE>
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS
4 REAL ESTATE
The Partnership holds fee title to the Richmond Comfort Inn which it
acquired upon the foreclosure of one of its original mortgage loans. A
summary of the Partnership's real estate is as follows:
March 31, December 31,
2000 1999
----------- ------------
Land $ 444,700 $ 444,700
Building and improvements 4,309,185 4,305,479
----------- -----------
4,753,885 4,750,179
Less: accumulated depreciation (766,082) (726,123)
----------- -----------
$ 3,987,803 $ 4,024,056
=========== ===========
The land, building and improvements are pledged to collateralize the
mortgage loan payable.
5 MORTGAGE LOAN PAYABLE
In connection with the foreclosure of the Richmond Comfort Inn, the
Partnership acquired the property subject to a $4,000,000 nonrecourse
promissory note secured by a first mortgage on the hotel property. The
mortgage note has a current balance of $3,302,954 at March 31, 2000.
Interest rates on the loan are adjustable every five years, with a current
interest rate of 8.5%, through April 2002. Interest is based on a 2%
premium over the Federal Home Loan Bank of Atlanta five-year Advance Rate.
The loan presently requires monthly payments of interest and principal
aggregating $31,526. The loan is currently held by GMAC Commercial
Mortgage and the lender is permitted to accelerate the note as of April 1,
1997, and thereafter with six months notice. The Partnership has not
received any notice of acceleration from the lender. The loan matures on
February 1, 2016. A prepayment penalty of 2%, reducing to 1%, exists for
the first two years after an interest rate change.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
Item 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The matters discussed in this form 10-Q contain certain forward-looking
statements and involve risks uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-Q and the other filings with the
Securities and Exchange Commission made by the Partnership from time to
time. The discussion of the Partnership's liquidity, capital resources and
results of operations, including forward looking statements pertaining to
such matters, does not take into account the effects of any changes to the
Partnership's operations. Accordingly, actual results could differ
materially from those projected in the forward-looking statements as a
result of a number of factors, including those identified herein.
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in the report.
Liquidity and Capital Resources
The Partnership invested 100% of the net proceeds of its public offering
in zero coupon Junior Mortgage Loans secured by properties owned
principally by privately syndicated limited partnerships sponsored by
affiliates of the General Partners.
The Partnership originally invested its net proceeds in sixteen Mortgage
Loans, which aggregated $70,332,103. As of March 31, 2000, the
Partnership's investments consist of one mortgage loan outstanding, and a
hotel, which it acquired through foreclosure. Because the Partnership's
remaining loan is a zero-coupon loan, the Partnership receives no
guaranteed cash flow from such investment.
West Palm previously approached the General Partner seeking to restructure
the Partnership's loan. During the course of these negotiations, West Palm
entered into an agreement to sell its property to an unaffiliated third
party. As a condition to the entering into of this agreement, the
Partnership agreed to accept a payment of $5,000,000 in full satisfaction
of the West Palm loan. The agreement with West Palm is for the current
sale only, and if the sale is not consummated the Partnership and West
Palm would be required to continue their negotiations with respect to any
future sale. The Partnership has been advised that the sale is subject to
numerous conditions including the consent of the limited partners of West
Palm. At this time, there can be no assurance that the sale will occur.
Due to the uncertainties with respect to the sale of the West Palm
property and the potential payment to the Partnership, management has not
recorded any loan loss recovery as of March 31, 2000.
The Partnership uses working capital reserves provided from any
undistributed cash from temporary investments plus any cash flow from the
operation of its hotel as its primary measure of liquidity. As of March
31, 2000, the Partnership's cash and cash equivalents decreased by
$5,523,264 from December 31, 1999 to $2,116,415. The decrease is due to a
$5,210,590 distribution to partners in January 2000, $284,918 of cash used
in operating activities and $27,756 used in investing activities. Cash
used by operating activities was primarily the result of the timing of
payments and receipt of cash. Cash used in investing activities consisted
of $24,050 of mortgage loan payments and $3,706 of improvements at the
Richmond Comfort Inn. The Partnership may utilize its working capital
reserves in the event the Partnership incurs additional expenses with
respect to its hotel property, in taking legal action or lending
additional funds to protect its interest in its remaining mortgage loan or
to pay fees. The Partnership's cash flow from the operations of its hotel
property is anticipated to be sufficient to meet such property's capital
expenditures in the near term.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
Item 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
Liquidity and Capital Resources (continued)
In January 2000, the Partnership distributed $5,210,589 of which the
Limited Partners received $4,950,060 or $15.00 per unit. Working capital
reserves will be temporarily invested in short-term money market
instruments and are expected to be sufficient to pay administrative
expenses during the term of the Partnership.
Except as discussed above, management is not aware of any other known
trends, events, commitments or uncertainties that will have a significant
impact on liquidity
Results of Operations
Net income decreased to $176,000 for the three-month period ended March
31, 2000 compared to $83,552 for the same period in the prior year due to
lower revenues which were partially offset by decreased expenses.
Revenues decreased for the three-month period ended March 31, 2000
compared with the corresponding period in the prior year due primarily to
a decrease in other income which was partially offset by an increase in
operating income. The decrease in other income was due primarily to a
decrease in the receipt of transfer fees. Operating income increased as a
result of an increase in motel operations revenue of $16,193 or 5% in the
three months ended March 31, 2000 compared to the same period in 1999 as a
result of higher occupancy at the Richmond Comfort Inn.
Costs and expenses decreased slightly for the three-month period ended
March 31, 2000 compared to the same period in the prior year. The decrease
was primarily due to decreases in mortgage loan interest expense and
general and administrative expenses, which were partially offset by an
increase in operating and depreciation expense at the Richmond Comfort
Inn. Mortgage loan interest expense decreased due to the decreased loan
balance. General and administrative expenses decreased due to lower legal
expenses.
Inflation
Inflation and changing economic conditions could adversely affect
occupancy, rental rates and operating expenses underlying the
Partnership's operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Partnership is not subject to market risk as its cash and cash
equivalents are invested in short term money market mutual fund. The
Partnership has no loans outstanding.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: 27. Financial Data Schedule
(b) Reports on Form 8-K: None.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS L.P. - SERIES 86
FORM 10-Q - MARCH 31, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RESOURCES ACCRUED MORTGAGE
INVESTORS, L.P. - SERIES 86
By: Resources Capital Corp.
Administrative General Partner
Dated: May 14, 2000 By: /S/ Michael L. Ashner
---------------------
Michael L. Ashner
President and Director
(Principal Executive Officer)
Dated: May 14, 2000 By: /S/ Carolyn B. Tiffany
----------------------
Carolyn B. Tiffany
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from unaudited
financial statements for the three months ended March 31, 2000 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 2,116,415
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,753,885
<DEPRECIATION> (766,082)
<TOTAL-ASSETS> 6,552,842
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,633,742
<TOTAL-LIABILITY-AND-EQUITY> 6,552,842
<SALES> 0
<TOTAL-REVENUES> 384,782
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 285,048
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,615
<INCOME-PRETAX> 176
<INCOME-TAX> 0
<INCOME-CONTINUING> 176
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 176
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
