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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2003
--------------
Commission file number 1-12704
--------------
AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86
----------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 13-2943272
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11200 Rockville Pike, Rockville, Maryland 20852
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(301) 816-2300
----------------------------------------------------
(Registrant's telephone number, including area code)
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of March 31, 2003, 9,576,290 Depositary Units of Limited Partnership
Interest were outstanding.
2
AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2003
PAGE
----
PART I. Financial Information
Item 1. Financial Statements
Balance Sheets - March 31, 2003 (unaudited) and December 31, 2002 3
Statements of Income and Comprehensive Income - for the three months
ended March 31, 2003 and 2002 (unaudited) 4
Statement of Changes in Partners' Equity - for the three months ended
March 31, 2003 (unaudited) 5
Statements of Cash Flows - for the three months ended March 31, 2003 and
2002 (unaudited) 6
Notes to Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 11
Item 3. Qualitative and Quantitative Disclosures about Market Risk 13
Item 4. Controls and Procedures 13
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
Certifications 16
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86
BALANCE SHEETS
March 31, December 31,
2003 2002
------------ ------------
(Unaudited)
ASSETS
Investment in FHA-Insured Certificates and GNMA
Mortgage-Backed Securities, at fair value
Acquired insured mortgages $ 24,737,749 $ 25,038,234
Investment in FHA-Insured Loans, at amortized cost,
net of unamortized discount and premium:
Originated insured mortgages 4,098,171 4,110,655
Cash and cash equivalents 2,495,323 3,409,202
Receivables and other assets 214,126 214,235
------------ ------------
Total assets $ 31,545,369 $ 32,772,326
============ ============
LIABILITIES AND PARTNERS' EQUITY
Distributions payable $ 2,316,032 $ 1,510,455
Accounts payable and accrued expenses 145,879 72,313
------------ ------------
Total liabilities 2,461,911 1,582,768
------------ ------------
Partners' equity:
Limited partners' equity, 15,000,000 Units authorized,
9,576,290 Units issued and outstanding 36,990,249 38,800,534
General partner's deficit (7,979,404) (7,886,129)
Accumulated other comprehensive income 72,613 275,153
------------ ------------
Total partners' equity 29,083,458 31,189,558
------------ ------------
Total liabilities and partners' equity $ 31,545,369 $ 32,772,326
============ ============
The accompanying notes are an integral part
of these financial statements.
4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
For the three months ended
March 31,
2003 2002
---------- ----------
Income:
Mortgage investment income $ 527,389 $ 647,301
Interest and other income 7,355 7,431
---------- ----------
534,744 654,732
---------- ----------
Expenses:
Asset management fee to related parties 58,956 72,152
General and administrative 63,316 68,390
---------- ----------
122,272 140,542
---------- ----------
Net earnings before gain on
mortgage dispositions 412,472 514,190
Gain on mortgage dispositions - 55,943
---------- ----------
Net earnings $ 412,472 $ 570,133
========== ==========
Other comprehensive loss - adjustment to unrealized
gains and losses on investments in insured mortgages (202,540) (111,219)
---------- ----------
Comprehensive income $ 209,932 $ 458,914
========== ==========
Net earnings allocated to:
Limited partners - 95.1% $ 392,261 $ 542,196
General Partner - 4.9% 20,211 27,937
---------- ----------
$ 412,472 $ 570,133
========== ==========
Net earnings per Unit of limited
partnership interest - basic $ 0.04 $ 0.06
========== ==========
The accompanying notes are an integral part
of these financial statements.
5
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86
STATEMENT OF CHANGES IN PARTNERS' EQUITY
For the three months ended March 31, 2003
(Unaudited)
Accumulated
Other
General Limited Comprehensive
Partner Partners Income Total
------------- ------------- ------------- -------------
Balance, December 31, 2002 $ (7,886,129) $ 38,800,534 $ 275,153 $ 31,189,558
Net earnings 20,211 392,261 - 412,472
Adjustment to unrealized gains on
investments in insured mortgages - - (202,540) (202,540)
Distributions paid or accrued of $0.23 per Unit,
including return of capital of $0.19 per Unit (113,486) (2,202,546) - (2,316,032)
------------- ------------- ------------- -------------
Balance, March 31, 2003 $ (7,979,404) $ 36,990,249 $ 72,613 $ 29,083,458
============= ============= ============= =============
Limited Partnership Units outstanding - basic, as
of March 31, 2003 9,576,290
=========
The accompanying notes are an integral part
of these financial statements.
6
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86
STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended
March 31,
2003 2002
------------ ------------
Cash flows from operating activities:
Net earnings $ 412,472 $ 570,133
Adjustments to reconcile net earnings to net cash provided by operating activities:
Gain on mortgage dispositions - (55,943)
Changes in assets and liabilities:
Increase (decrease) in accounts payable and accrued expenses 73,566 (13,334)
Decrease in receivables and other assets 109 25,571
------------ ------------
Net cash provided by operating activities 486,147 526,427
------------ ------------
Cash flows from investing activities:
Receipt of mortgage principal from scheduled payments 110,429 119,217
Proceeds received from redemption of debentures - 230,670
Proceeds received from mortgage dispositions - 1,942,352
------------ ------------
Net cash provided by investing activities 110,429 2,292,239
------------ ------------
Cash flows used in financing activities:
Distributions paid to partners (1,510,455) (654,531)
------------ ------------
Net (decrease) increase in cash and cash equivalents (913,879) 2,164,135
Cash and cash equivalents, beginning of period 3,409,202 691,264
------------ ------------
Cash and cash equivalents, end of period $ 2,495,323 $ 2,855,399
============ ============
The accompanying notes are an integral part
of these financial statements.
7
AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION
American Insured Mortgage Investors L.P. - Series 86 (the "Partnership")
was formed pursuant to a limited partnership agreement, as amended,
("Partnership Agreement") under the Uniform Limited Partnership Act of the state
of Delaware on October 31, 1985. During the period from May 2, 1986 (the initial
closing date of the Partnership's public offering) through June 6, 1987 (the
termination date of the offering), the Partnership, pursuant to its public
offering of 9,576,165 Depository Units of limited partnership interest
("Units"), raised a total of $191,523,300 in gross proceeds. In addition, the
initial limited partner contributed $2,500 to the capital of the Partnership and
received 125 units of limited partnership interest in exchange therefor.
CRIIMI, Inc., a wholly-owned subsidiary of CRIIMI MAE Inc. ("CRIIMI MAE"),
acts as the General Partner (the "General Partner") for the Partnership and
holds a partnership interest of 4.9%. The General Partner provides management
and administrative services on behalf of the Partnership. AIM Acquisition
Partners L.P. serves as the advisor (the "Advisor") to the Partnership. The
general partner of the Advisor is AIM Acquisition Corporation ("AIM
Acquisition") and the limited partners include, but are not limited to, The
Goldman Sachs Group, L.P., Sun America Investments, Inc. (successor to Broad,
Inc.) and CRI/AIM Investment, L.P., a subsidiary of CRIIMI MAE, over which
CRIIMI MAE exercises 100% voting control. AIM Acquisition is a Delaware
corporation that is primarily owned by Sun America Investments, Inc. and The
Goldman Sachs Group, L.P.
Pursuant to the terms of certain origination and acquisition services,
management services and disposition services agreements between the Advisor and
the Partnership (collectively the "Advisory Agreements"), the Advisor renders
services to the Partnership, including but not limited to, the management of the
Partnership's portfolio of mortgages and the disposition of the Partnership's
mortgages. Such services are subject to the review and ultimate authority of the
General Partner. However, the General Partner is required to receive the consent
of the Advisor prior to taking certain significant actions, including but not
limited to the disposition of mortgages, any transaction or agreement with the
General Partner or its affiliates, or any material change as to policies
regarding distributions or reserves of the Partnership (collectively the
"Consent Rights"). The Advisor is permitted and has delegated the performance of
services to CRIIMI MAE Services Limited Partnership ("CMSLP"), a subsidiary of
CRIIMI MAE, pursuant to a sub-management agreement (the "Sub-Advisory
Agreement"). The general partner and limited partner of CMSLP are wholly-owned
subsidiaries of CRIIMI MAE. The delegation of such services by the Advisor to
CMSLP does not relieve the Advisor of its obligation to perform such services.
Furthermore the Advisor has retained its Consent Rights.
The General Partner also serves as the General Partner for American Insured
Mortgage Investors ("AIM 84"), American Insured Mortgage Investors - Series 85,
L.P. ("AIM 85") and American Insured Mortgage Investors L.P. - Series 88 ("AIM
88") and owns general partner interests therein of 2.9%, 3.9% and 4.9%,
respectively. The Partnership, AIM 84, AIM 85 and AIM 88 are collectively
referred to as the "AIM Limited Partnerships".
Prior to December 1994, the Partnership was engaged in the business of
originating government insured mortgage loans ("Originated Insured Mortgages")
and acquiring government insured mortgage loans ("Acquired Insured Mortgages"
and, together with Originated Insured Mortgages, referred to herein as "Insured
Mortgages"). In accordance with the terms of the Partnership Agreement, the
Partnership is no longer authorized to originate or acquire Insured Mortgages
and, consequently, its primary objective is to manage its portfolio of mortgage
investments, all of which are insured under Section 221(d)(4) or Section 231 of
the National Housing Act of 1937, as amended (the "National Housing Act"). The
Partnership Agreement states that the Partnership will terminate on December 31,
2020, unless terminated earlier under the provisions thereof. The Partnership is
required, pursuant to the Partnership Agreement, to dispose of its assets prior
to this date. Early prepayment of the Partnership's Insured Mortgages or other
8
disposition by the General Partner in accordance with the terms of the
Partnership Agreement may effect an early termination and dissolution of the
Partnership before the stated termination date.
2. BASIS OF PRESENTATION
In the opinion of the General Partner, the accompanying unaudited financial
statements contain all adjustments of a normal recurring nature necessary to
present fairly the financial position of the Partnership as of March 31, 2003
and the results of its operations and its cash flows for the three months ended
March 31, 2003 and 2002.
These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. While the General Partner believes that the
disclosures presented are adequate to make the information not misleading, these
financial statements should be read in conjunction with the financial statements
and the notes to the financial statements included in the Partnership's Annual
Report on Form 10-K for the year ended December 31, 2002.
3. INVESTMENT IN INSURED MORTGAGES
Listed below is the Partnership's aggregate investment in Insured Mortgages
as of March 31, 2003 and December 31, 2002:
March 31, 2003 December 31, 2002
-------------- -----------------
Originated Mortgages:
Number of Mortgages 1 1
Amortized Cost $ 4,098,171 $ 4,110,655
Face Value 3,958,759 3,970,042
Fair Value 3,962,150 3,973,235
Acquired Mortgages:
Number of:
GNMA Mortgage-Backed Securities (1) 7 7
FHA-Insured Certificates 1 1
Amortized Cost $ 24,665,136 $ 24,763,081
Face Value 24,546,354 24,642,829
Fair Value 24,737,749 25,038,234
(1) In April 2003, the mortgage on Mountain Village Apartments was prepaid. The
Partnership received net proceeds of approximately $1.3 million and expects
to recognize a gain of approximately $7,000 in the second quarter of 2003.
A distribution of approximately $0.125 per Unit related to the prepayment
of this mortgage was declared in April 2003 and is expected to be paid to
Unitholders in August 2003.
As of May 1, 2003 all of the Partnership's Insured Mortgage investments are
current with respect to the payment of principal and interest.
9
4. DISTRIBUTIONS TO UNITHOLDERS
The distributions paid or accrued to Unitholders on a per Unit basis for
the three months ended March 31, 2003 and 2002 are as follows:
2003 2002
------ ------
Quarter ended March 31 $ 0.23(1) $ 0.27(2)
------ ------
$ 0.23 $ 0.27
====== ======
(1) This amount includes approximately $0.17 per Unit representing net proceeds
from the prepayment of the mortgage on Sunflower Apartments.
(2) This amount includes approximately $0.21 per Unit representing net proceeds
from the following: (a) approximately $0.19 per Unit related to the
prepayment of Southampton Apartments and (b) approximately $0.02 per Unit
related to the redemption of the Spring Lake debenture.
The basis for paying distributions to Unitholders is net proceeds from
mortgage dispositions, if any, and cash flow from operations, which includes
regular interest income and principal from Insured Mortgages. Although the
Partnership's Insured Mortgages pay a fixed monthly mortgage payment, the cash
distributions paid to the Unitholders will vary during each quarter due to (1)
the fluctuating yields in the short-term money market in which the monthly
mortgage payment receipts are temporarily invested prior to the payment of
quarterly distributions, (2) the reduction in the asset base resulting from
monthly mortgage payments received or mortgage dispositions, (3) variations in
the cash flow attributable to the delinquency or default of Insured Mortgages
and professional fees incurred in connection with those Insured Mortgages and
(4) changes in the Partnership's operating expenses. As the Partnership
continues to liquidate its mortgage investments and Unitholders receive
distributions of return of capital and taxable gains, Unitholders should expect
a reduction in earnings and distributions due to the decreasing mortgage base.
10
5. TRANSACTIONS WITH RELATED PARTIES
The General Partner, CMSLP and certain affiliated entities, during the
three months ended March 31, 2003 and 2002, earned or received compensation or
payments for services from the Partnership as follows:
COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
-----------------------------------------------
For the
three months ended
March 31,
Name of Recipient Capacity in Which Served/item 2003 2002
----------------- ----------------------------- ---- ----
CRIIMI, Inc.(1) General Partner/Distribution $ 113,486 $ 133,222
AIM Acquisition Partners,
L.P.(2) Advisor/Asset Management Fee 58,956 72,152
CRIIMI MAE Management, Inc.(3) Affiliate of General Partner/
Expense Reimbursement 14,626 11,829
(1) The General Partner, pursuant to amendments to the Partnership Agreement,
is entitled to receive 4.9% of the Partnership's income, loss, capital and
distributions, including, without limitation, the Partnership's adjusted
cash from operations and proceeds of mortgage prepayments, sales or
insurance (as defined in the Partnership Agreement).
(2) The Advisor, pursuant to the Partnership Agreement, is entitled to an Asset
Management Fee equal to 0.75% of Total Invested Assets (as defined in the
Partnership Agreement). CMSLP, pursuant to the Sub-Advisory Agreement, is
entitled to a fee of 0.28% of Total Invested Assets from the Advisor's
Asset Management Fee. Of the amounts paid to the Advisor, CMSLP earned a
fee equal to $22,011 and $26,934 for the three months ended March 31, 2003
and 2002, respectively. The general partner and limited partner of CMSLP
are a wholly owned subsidiaries of CRIIMI MAE Inc.
(3) CRIIMI MAE Management, Inc., an affiliate of the General Partner, is
reimbursed for personnel and administrative services on an actual cost
basis.
11
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS. When used in this Quarterly Report on Form 10-Q, the
words "believe," "anticipate," "expect," "contemplate," "may," "will," and
similar expressions are intended to identify forward-looking statements.
Statements looking forward in time are included in this Quarterly Report on Form
10-Q pursuant to the "safe harbor" provision of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially.
Accordingly, the following information contains or may contain forward-looking
statements: (1) information included or incorporated by reference in this
Quarterly Report on Form 10-Q, including, without limitation, statements made
under Item 2, Management's Discussion and Analysis of Financial Condition and
Results of Operations, (2) information included or incorporated by reference in
prior and future filings by the Partnership with the Securities and Exchange
Commission ("SEC") including, without limitation, statements with respect to
growth, projected revenues, earnings, returns and yields on its portfolio of
mortgage assets, the impact of interest rates, costs and business strategies and
plans and (3) information contained in written material, releases and oral
statements issued by or on behalf of, the Partnership, including, without
limitation, statements with respect to growth, projected revenues, earnings,
returns and yields on its portfolio of mortgage assets, the impact of interest
rates, costs and business strategies and plans. Factors which may cause actual
results to differ materially from those contained in the forward-looking
statements identified above include, but are not limited to (i) regulatory and
litigation matters, (ii) interest rates, (iii) trends in the economy, (iv)
prepayment of mortgages, (v) defaulted mortgages, (vi) errors in servicing
defaulted mortgages and (vii) sales of mortgage investments below fair market
value. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only of the date hereof. The Partnership
undertakes no obligation to publicly revise these forward-looking statements to
reflect events or circumstances occurring after the date hereof or to reflect
the occurrence of unanticipated events.
Mortgage Investments
- --------------------
As of March 31, 2003, the Partnership had invested in 9 insured mortgages,
with an aggregate amortized cost of approximately $28.8 million, an aggregate
face value of approximately $28.5 million and an aggregate fair value of
approximately $28.7 million, as discussed below.
In April 2003, the mortgage on Mountain Village Apartments was prepaid. The
Partnership received net proceeds of approximately $1.3 million and expects to
recognize a gain of approximately $7,000 in the second quarter of 2003. A
distribution of approximately $0.125 per Unit related to the prepayment of this
mortgage was declared in April 2003 and is expected to be paid to Unitholders in
August 2003.
As of May 1, 2003, all of the Partnership's Insured Mortgage investments
are current with respect to the payment of principal and interest.
Results of Operations
- ---------------------
Net earnings decreased by approximately $158,000 for the three months ended
March 31, 2003, as compared to the corresponding period in 2002, primarily due
to decreases in mortgage investment income and gain on mortgage dispositions, as
discussed below.
Mortgage investment income decreased by approximately $120,000 for the
three months ended March 31, 2003, as compared to the corresponding period in
2002, primarily due a reduction in the mortgage base. The mortgage base
decreased due to three mortgage dispositions with an aggregate principal balance
of approximately $6.0 million, representing an approximate 17% decrease in the
aggregate principal balance of the total mortgage portfolio since April 2002.
Asset management fee to related parties decreased by approximately $13,000
for the three months ended March 31, 2003, as compared to the corresponding
period in 2002, primarily due to a reduction in the mortgage base, as previously
discussed.
12
General and administrative expense decreased by approximately $5,000 for
the three months ended March 31, 2003 as compared to the corresponding period in
2002, primarily due to decreases in professional fees and public relations
expenses.
Gain on mortgage dispositions decreased by approximately $56,000 for the
three months ended March 31, 2003, as compared to the corresponding period in
2002. During the three months ended March 31, 2003, no gain or loss was
recognized by the Partnership. During the three months ended March 31, 2002, the
Partnership recognized a gain of approximately $30,000 from the prepayment of
the mortgage on Southampton Apartments and additional gain of approximately
$26,000 from the disposition of The Villas, a previously delinquent mortgage
coinsured by a third party.
Liquidity and Capital Resources
- -------------------------------
The Partnership's operating cash receipts, derived from payments of
principal and interest on Insured Mortgages, plus cash receipts from interest on
short-term investments, were sufficient during the first three months of 2003 to
meet operating requirements. The basis for paying distributions to Unitholders
is net proceeds from mortgage dispositions, if any, and cash flow from
operations, which includes regular interest income and principal from Insured
Mortgages. Although the Partnership's Insured Mortgages pay a fixed monthly
mortgage payment, the cash distributions paid to the Unitholders will vary
during each quarter due to (1) the fluctuating yields in the short-term money
market in which the monthly mortgage payment receipts are temporarily invested
prior to the payment of quarterly distributions, (2) the reduction in the asset
base resulting from monthly mortgage payments received or mortgage dispositions,
(3) variations in the cash flow attributable to the delinquency or default of
Insured Mortgages and professional fees incurred in connection with those
Insured Mortgages and (4) changes in the Partnership's operating expenses. As
the Partnership continues to liquidate its mortgage investments and Unitholders
receive distributions of return of capital and taxable gains, Unitholders should
expect a reduction in earnings and distributions due to the decreasing mortgage
base. Early prepayment of the Partnership's Insured Mortgages or other
disposition by the General Partner in accordance with the terms of the
Partnership Agreement may effect an early termination and dissolution of the
Partnership before the stated termination date of December 31, 2020.
Net cash provided by operating activities decreased by approximately
$40,000 for the three months ended March 31, 2003, as compared to the
corresponding period in 2002, primarily resulting from a decrease in mortgage
investment income, as previously discussed, partially offset by an increase in
accounts payable and accrued expenses. Accounts payable and accrued expenses
increased due to the timing of the payment of the quarterly asset management
fee.
Net cash provided by investing activities decreased by approximately $2.2
million for the three months ended March 31, 2003, as compared to the
corresponding period in 2002, primarily due to decreases in proceeds received
from redemption of debenture and mortgage dispositions.
Net cash used in financing activities increased by approximately $856,000
for the three months ended March 31, 2003, as compared to the corresponding
period in 2002, due to an increase in the amount of distributions paid to
partners in the first three months of 2003 compared to the same period in 2002.
13
PART I. FINANCIAL INFORMATION
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The General Partner has determined that there has not been a material
change as of March 31, 2003, in market risk from December 31, 2002 as reported
in the Partnership's Annual Report on Form 10-K as of December 31, 2002.
ITEM 4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of filing this quarterly report on Form
10-Q, the General Partner carried out an evaluation, under the supervision and
with the participation of the General Partner's management, including the
General Partner's Chairman of the Board and Chief Executive Officer (CEO) and
the Chief Financial Officer (CFO), of the effectiveness of the design and
operation of its disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. Based on that evaluation, the General Partner's CEO and CFO
concluded that its disclosure controls and procedures are effective and timely
in alerting them to material information relating to the Partnership required to
be included in the Partnership's periodic SEC filings. There were no significant
changes in the General Partner's internal controls or in other factors that
could significantly affect these internal controls subsequent to the date of its
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
14
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Purpose
----------- -------
99.1 Certification pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 from
Barry S. Blattman, Chairman of the Board,
Chief Executive Officer and President of the
General Partner (Filed herewith).
99.2 Certification pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 from
Cynthia O. Azzara, Senior Vice President,
Chief Financial Officer and Treasurer of the
General Partner (Filed herewith).
(b) Reports on Form 8-K
Date
----
March 26, 2003 To report (i) a press release issued on
March 21, 2003 announcing the March 2003
distribution to the Partnership's Unitholders
and (ii) a press release issued on March 24,
2003 announcing the Partnership's fourth
quarter and year ended December 31, 2002
financial results.
15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
AMERICAN INSURED MORTGAGE
INVESTORS L.P. - SERIES 86
(Registrant)
By: CRIIMI, Inc.
General Partner
May 13, 2003 /s/Cynthia O. Azzara
- ------------ ----------------------------------------
DATE Cynthia O. Azzara
Senior Vice President,
Chief Financial Officer and
Treasurer (Principal Accounting Officer)
16
CERTIFICATION
I, Barry S. Blattman, Chairman of the Board, Chief Executive Officer and
President, certify that:
1. I have reviewed this quarterly report on Form 10-Q of American Insured
Mortgage Investors L.P. - Series 86;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
AMERICAN INSURED MORTGAGE
INVESTORS L.P. - SERIES 86
(Registrant)
By: CRIIMI, Inc.
General Partner
Date: May 13, 2003 /s/ Barry S. Blattman
-------------------------------------
Barry S. Blattman
Chairman of the Board,
Chief Executive Officer and President
17
CERTIFICATION
I, Cynthia O. Azzara, Senior Vice President, Chief Financial Officer and
Treasurer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of American Insured
Mortgage Investors L.P. - Series 86;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
AMERICAN INSURED MORTGAGE
INVESTORS L.P. - SERIES 86
(Registrant)
By: CRIIMI, Inc.
General Partner
Date: May 13, 2003 /s/ Cynthia O. Azzara
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Cynthia O. Azzara
Senior Vice President, Chief Financial Officer
and Treasurer