EXHIBIT 99.1
Contact: Susan B. Railey FOR IMMEDIATE RELEASE
(301) 468-3120
Sharon Bramell
(301) 231-0351
AIM 85 REPORTS SECOND QUARTER NET EARNINGS
OF 11 CENTS PER UNIT
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ROCKVILLE, MD, August 11, 2004--(AMEX/AII) -- American Insured Mortgage
Investors-Series 85, L.P. (AIM 85), a liquidating partnership that holds
investments in government insured multifamily mortgages, reported net earnings
for the three months ended June 30, 2004 of approximately $1.4 million (11 cents
per unit) compared to approximately $1.3 million (11 cents per unit) for the
three months ended June 30, 2003. Net earnings increased by approximately
$45,000 for the three months ended June 30, 2004, as compared to the
corresponding period in 2003, primarily due to an increase in gains on mortgage
dispositions largely offset by a significant decrease in mortgage investment
income.
For the six months ended June 30, 2004, AIM 85 reported net earnings of
approximately $2.7 million (21 cents per unit) compared to $2.8 million (23
cents per unit) for the first six months of 2003. Net earnings decreased by
approximately $176,000 for the six months ended June 30, 2004, as compared to
the corresponding period in 2003, primarily due to a decrease in mortgage
investment income partially offset by a significant increase in gains on
mortgage dispositions.
Mortgage investment income decreased for the three and six months ended
June 30, 2004 due to the disposition of 13 mortgages with an aggregate principal
balance of approximately $35.5 million, representing an approximate 59% decrease
in the aggregate principal balance of the total mortgage portfolio since June
2003.
Gains on mortgage dispositions increased for the three and six months ended
June 30, 2004 compared to the corresponding periods in 2003. During the second
quarter of 2004, AIM 85 recognized gains of approximately $851,000 from the
prepayment of three mortgages compared to gains recognized of approximately
$293,000 from the prepayment of three mortgages and the assignment of one
mortgage during the second quarter of 2003. For the six months ended June 30,
2004, AIM 85 recognized gains of approximately $1.5 million from three mortgage
prepayments, one assignment and the sale of two mortgages. This compares to
gains recognized of approximately $746,000 from four mortgage prepayments and
three mortgage assignments for the six months ended June 30, 2003.
As of June 30, 2004, AIM 85 was invested in nine insured mortgages and one
debenture with an aggregate amortized cost of approximately $26.0 million, an
aggregate face value of approximately $26.2 million and an aggregate fair value
of approximately $26.7 million.
In July 2004, AIM 85, with the consent of the Partnership's Advisor, sold
the GNMA security secured by the mortgage on Oak Forest Apartments II. The
Partnership received net proceeds of approximately $10.6 million and declared a
distribution of 84 cents per unit, payable in November 2004, related to the sale
of this GNMA security.
AIM 85 distributes net proceeds, if any, from mortgage dispositions and
debenture redemptions to its investors, in addition to distributions of regular
cash flow. As AIM 85 continues to liquidate its mortgage investments and
investors receive distributions of return of capital and taxable gains,
investors should expect a reduction in earnings and distributions due to the
decreasing mortgage base. Based upon the current level of interest rates, the
recent trend in mortgage prepayments is expected to continue. Such mortgage
prepayments, if continued at the recent trend, will likely result in a
termination and liquidation of the Partnership significantly earlier than the
December 2009 stated termination date. Upon the termination and liquidation of
the Partnership, on or before December 31, 2009, distributions to investors will
be made in accordance with the terms of the Partnership Agreement. A final
distribution to unitholders will be based on the Partnership's remaining net
assets after deducting and setting aside amounts required to satisfy and
discharge any existing Partnership obligations and expenses, and such
distribution to unitholders is likely to be substantially less than the amount
referenced in limited partners' equity in the Partnership's financial
statements.
-table follows-
AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P.
STATEMENTS OF INCOME
(Unaudited)
For the three months ended For the six months ended
June 30, June 30,
2004 2003 2004 2003
--------- --------- ---------- ---------
Income:
Insured mortgage investment income $ 610,346 $ 1,262,635 $ 1,414,857 $ 2,583,860
Interest and other income 54,721 39,858 119,503 63,882
----------- ----------- ----------- -----------
665,067 1,302,493 1,534,360 2,647,742
----------- ----------- ----------- -----------
Expenses:
Asset management fee to related parties 80,813 157,123 187,442 320,574
General and administrative 67,862 115,950 156,151 223,041
----------- ----------- ----------- -----------
148,675 273,073 343,593 543,615
----------- ----------- ----------- -----------
Net earnings before gains on insured
mortgage dispositions 516,392 1,029,420 1,190,767 2,104,127
Net gains on insured mortgage dispositions 851,069 293,044 1,483,396 745,870
----------- ----------- ----------- -----------
Net earnings $ 1,367,461 $ 1,322,464 $ 2,674,163 $ 2,849,997
=========== =========== =========== ===========
Net earnings allocated to:
Limited partners - 96.1% $ 1,314,130 $ 1,270,888 $ 2,569,871 $ 2,738,847
General Partner - 3.9% 53,331 51,576 104,292 111,150
----------- ----------- ----------- -----------
$ 1,367,461 $ 1,322,464 $ 2,674,163 $ 2,849,997
=========== =========== =========== ===========
Net earnings per unit of limited
partnership interest - basic $ 0.11 $ 0.11 $ 0.21 $ 0.23
=========== =========== =========== ===========
Limited partnership units outstanding - basic 12,079,514 12,079,514 12,079,514 12,079,514
=========== =========== =========== ===========
Balance Sheet Data: June 30, December 31,
- ------------------ 2004 2003
---------- ------------
Investment in insured mortgages $24,977,429 $ 45,775,507
Investment in debentures 1,741,873 10,335,670
Total assets 39,008,379 69,048,427