AIJ American Insured Mortgage Series 86

AIM 86 Reports Third Quarter Net Earnings Of Three Cents Per Unit ROCKVILLE, Md., Nov. 7 /PRNewswire/ -- American Insured Mortgage Investors L.P.-Series 86 (AIM 86) , a liquidating partnership that holds investments in federally insured multifamily mortgages, reported net earnings for the quarter ended September 30, 2003 of approximately $271,000 (three cents per unit) compared to approximately $480,000 (five cents per unit) for the quarter ended September 30, 2002. For the nine months ended September 30, 2003, AIM 86 reported net earnings of approximately $1.1 million (11 cents per unit) compared to approximately $1.6 million (16 cents per unit) for the first nine months of 2002. The decrease in net earnings for the three and nine months ended September 30, 2003, as compared to the same periods in 2002, is primarily due to a decrease in mortgage investment income. Mortgage investment income decreased primarily due to the reduction in the mortgage base. The mortgage base decreased due to seven mortgage dispositions since September 2002 with an aggregate principal balance of approximately $14.2 million, representing an approximate 45% decrease in the total mortgage portfolio. As of September 30, 2003, AIM 86 had invested in four fully federally insured mortgages with an aggregate amortized cost of approximately $17.1 million, an aggregate face value of approximately $16.9 million and an aggregate fair value of approximately $16.9 million. In late October 2003, AIM 86 received net proceeds of approximately $4.0 million from the prepayment of the mortgage on Colony Square Apartments. The Partnership expects to announce a distribution related to the prepayment of this mortgage in November 2003. As of November 1, 2003, the remaining three mortgages are current with respect to the payment of principal and interest. As AIM 86 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. Early prepayment of some or all the mortgages, or a sale of some or all of the mortgages by the Partnership, may effect an early termination and dissolution of AIM 86 before the stated termination date of December 31, 2020. Upon the termination and liquidation of the Partnership, distributions to unitholders will be made in accordance with the terms of its Partnership Agreement, as amended, which is not based on GAAP. As a result, it is likely that the amounts that unitholders receive upon termination and liquidation of AIM 86 will be substantially lower than the amounts reflected in the limited partners' equity account in the Partnership's GAAP financial statements. AMERICAN INSURED MORTGAGE INVESTORS L.P. - SERIES 86 STATEMENTS OF INCOME (Unaudited) For the three For the nine months ended months ended September 30, September 30, 2003 2002 2003 2002 Income: Mortgage investment income $ 376,524 $ 583,468 $1,400,859 $1,853,731 Interest and other income 14,744 13,190 29,922 27,070 391,268 596,658 1,430,781 1,880,801 Expenses: Asset management fee to related parties 44,256 64,290 159,688 205,132 General and administrative 67,496 52,774 195,430 183,924 111,752 117,064 355,118 389,056 Net earnings before net (loss) gain on mortgage dispositions 279,516 479,594 1,075,663 1,491,745 Net (loss) gain on mortgage dispositions (8,476) - 56,880 142,117 Net earnings $ 271,040 $ 479,594 $1,132,543 $1,633,862 Net earnings allocated to: Limited partners - 95.1% $ 257,759 $ 456,094 $1,077,048 $1,553,803 General Partner - 4.9% 13,281 23,500 55,495 80,059 $ 271,040 $ 479,594 $1,132,543 $1,633,862 Limited partnership units outstanding - basic 9,576,290 9,576,290 9,576,290 9,576,290 Net earnings per unit of limited partnership interest - basic $ 0.03 $ 0.05 $ 0.11 $ 0.16 Balance Sheet Data: September 30, December 31, 2003 2002 Investment in insured mortgages $17,062,945 $29,148,889 Total assets 26,819,351 32,772,326 DATASOURCE: American Insured Mortgage Investors L.P.-Series 86 CONTACT: Susan B. Railey, +1-301-468-3120, or Sharon Bramell, +1-301-231-0351, both for American Insured Mortgage Investors L.P.-Series 86

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