Supplemental Financial Report for

Quarter Ended June 30, 2018

Pages

Supplemental Letter from the CEO

4

Quarterly Fact Sheet

5

Financial Performance Trend Graphs

6-13

Other Partnership Information

14

Partnership Financial Statements

15-17

Partnership Financial Measures and Schedules

18-24

•

Total assets of $1.02 billion;

•

Total Mortgage Revenue Bond (“MRB”) investments of $767.6 million;

•

Total revenues of $15.8 million;

•

Net income, basic and diluted, of 0.04 per Unit;

•

Acquisition of one Mortgage Revenue Bond for $19.5 million;

•

Increased Investment in unconsolidated entities by $6.8 million;

•

Redemptions of four Mortgage Revenue Bonds for $11.0 million;

•

Entered into a Commercial Purchase and Sale Agreement to sell its Jade Park MF Property; and

•

Cash Available for Distribution of $0.09 per Unit.

4

PARTNERSHIP DETAILS

ATAX was formed for the primary purpose of acquiring a portfolio of MRBs that are issued to provide construction and/or permanent financing of multifamily residential properties.  We continue to expect most of the interest paid on these MRBs to be excludable from gross income for federal income tax purposes. We continue to pursue a business strategy of acquiring additional MRBs and other investments on a leveraged basis.  We also invest in other securities which, if not secured by a direct or indirect interest in a multifamily property, must be rated in one of the four highest rating categories by at least one nationally recognized securities rating agency.  We have also acquired interests in multifamily projects (“MF Properties”) to position ourselves for future investments in MRBs issued to finance these properties.  In addition, we have invested in equity interests of multifamily, market rate, projects throughout the U.S.

(As of June 30, 2018)

Symbol (NASDAQ)

ATAX

Annual Distribution

$

0.50

Price

$

6.35

Yield

7.9%

Units Outstanding (including Restricted Units)

60,452,928

Market Capitalization

$

383,876,093

52-week Unit price range

$5.85 to $6.45

Partnership Financial Information for the Q2 2018

(amounts in thousands, except per Unit)

Total Revenue

$

15,785

Net Income – ATAX Partnership

$

3,338

Total Assets

$

1,023,531

Leverage Ratio³

64%

Cash Available for Distribution (“CAD”)¹

$

5,337

Distribution Declared per unit²

$

0.125

¹

Management utilizes a calculation of Cash Available for Distribution (“CAD”) to assess the Partnership’s operating performance. This is a non-GAAP financial measure and a reconciliation of our GAAP net income to CAD is provided on page 18 of the Supplement herein.

²

The most recent distribution was paid on July 31, 2018 for Unitholders of record as of June 29, 2018. The distribution is payable to Unitholders of record as of the last business day of the quarter end and ATAX trades ex-dividend two days prior to the record date, with a payable date of the last business day of the subsequent month.

³

Our overall leverage ratio is calculated as total outstanding debt divided by total partnership assets using the carrying value of the MRBs, PHC Certificates, initial finance costs, and the MF Properties at cost.

5

6

•

Total mortgage revenue bonds, core assets of ATAX, have increased to 75% of Total Assets at June 30, 2018, from 35% of Total Assets at December 31, 2012.

7

8

Description

- 25 basis points

+ 50 basis points

+ 100 basis points

+ 150 basis points

+ 200 basis points

TOB & Term A/B Debt

Financings

$(1,699)

$(602)

$(9,691)

$(10,922)

$(11,749)

TEBS Debt Financings

101,599

(99,065)

(174,379)

(279,330)

(387,764)

Other Investment Financings

79,470

(160,196)

(324,081)

(484,548)

(644,245)

Total

$179,370

$(259,863)

$(508,151)

$(774,800)

$(1,043,758)

¹

Represents the change over the next 12 months assuming an immediate shift in rates and management does not adjust its strategy in response.

9

¹

Total outstanding debt divided by total assets using the carrying value of the MRBs, PHC Certificates, initial finance costs and the MF Properties at cost.

10

•

During the fourth quarter of 2017, we recognized gains on the sale of approximately $6.7 million, net of income taxes and before direct and indirect expense, from the sale of three MF Properties and contingent interest of approximately $2.9 million. Tier 2 income paid to the General Partner for these items was approximately $874,000.

•

During the second quarter of 2017, we recognized contingent interest of approximately $87,000,

•

During the first quarter of 2017, we recognized a gain on the sale of Northern View (an MF Property) of approximately $3.2 million, net of income taxes and Tier 2 income paid to the General Partner, and before direct and indirect expense, and contingent interest of approximately $133,000,

•

During the fourth quarter of 2016, we recognized contingent interest of approximately $1.7 million, and

•

During the third quarter of 2016, we recognized a gain of approximately $1.1 million, net of tax, on the sale of Woodland Park, an MF Property, and contingent interest of $90,000.

11

•

Since July 1, 2016, the ratio of “Salaries and benefits” and “General and administrative” expenses has averaged approximately 0.41% of Total Assets.

12

•

In 2017, we realized approximately $3.1 million of contingent interest and gains on sale of real estate assets of approximately $10.9 million, net of tax. Approximately $2.0 million was allocated to the General Partner and approximately $12.0 million was allocated to the Unitholders.

•

In 2016, we realized approximately $2.0 million of contingent interest, of which $505,000 was due the General Partner. In addition, we reported the sale of the Arboretum and Woodland Park which resulted in gains of approximately $8.3 million and $1.1 million, respectively, net of tax, of which approximately $2.4 million was due the General Partner.  There was approximately $8.6 million that was allocated to the Unitholders.

13

OTHER PARTNERSHIP INFORMATION

Corporate Office:

Transfer Agent:

1004 Farnam Street

American Stock Transfer & Trust Company

Suite 400

59 Maiden Lane

Omaha, NE  68102

Plaza Level

Phone:

402-444-1630

New York, NY 10038

Investor Services:

402-930-3098

Phone: 718-921-8124

K-1 Services:

855-4AT-AXK1

888-991-9902

Fax:

402-930-3047

Fax:718-236-2641

Web Site:

www.ataxfund.com

K-1 Services Email:

k1s@ataxfund.com

Ticker Symbol:

ATAX

Corporate Counsel:

Independent Accountants:

Barnes & Thornburg LLP

PwC

11 S. Meridian Street

1 North Wacker Drive

Indianapolis, IN 46204

Chicago, Illinois 60606

Burlington Capital LLC, General Partner of the General Partner for ATAX

Board of Managers

Michael B. Yanney

Chairman Emeritus of the Board

Lisa Y. Roskens

Chairman of the Board

Mariann  Byerwalter

Manager

Dr. William S. Carter

Manager

Patrick J. Jung

Manager

George  Krauss

Manager

Dr. Gail Yanney

Manager

Walter K. Griffith

Manager

Senator Michael Johanns

Manager

Corporate Officers

Chief Executive Officer – Chad L. Daffer

Chief Financial Officer – Craig S. Allen

14

Partnership Financial

Statements and Information

Schedules

June 30, 2018

December 31, 2017

Assets

Cash and cash equivalents

$

26,328,497

$

69,597,699

Restricted cash

1,493,295

1,985,630

Interest receivable, net

7,682,580

6,541,132

Mortgage revenue bonds held in trust, at fair value

673,152,217

710,867,447

Mortgage revenue bonds, at fair value

94,477,120

77,971,208

Public housing capital fund trusts, at fair value

49,070,710

49,641,588

Real estate assets:

Land and improvements

7,518,727

7,319,235

Buildings and improvements

79,378,136

78,953,488

Real estate assets before accumulated depreciation

86,896,863

86,272,723

Accumulated depreciation

(11,403,940

)

(9,580,531

)

Net real estate assets

75,492,923

76,692,192

Investment in equity interests

60,494,767

39,608,927

Property loans, net

28,930,525

29,513,874

Other assets

6,408,246

7,348,302

Total Assets

$

1,023,530,880

$

1,069,767,999

Liabilities

Accounts payable, accrued expenses and other liabilities

$

7,837,981

$

8,494,227

Distribution payable

7,632,945

8,423,803

Unsecured lines of credit

49,540,000

50,000,000

Debt financing, net

542,172,329

558,328,347

Mortgages payable and other secured financing, net

35,212,789

35,540,174

Derivative swaps, at fair value

129,018

826,852

Total Liabilities

642,525,062

661,613,403

Redeemable preferred units

94,332,351

94,314,326

Partners' Capital

General Partner

180,641

437,256

Beneficial Unit Certificate holders

286,492,826

313,403,014

Total Partners' Capital

286,673,467

313,840,270

Total Liabilities and Partners' Capital

$

1,023,530,880

$

1,069,767,999

16

For The Three Months Ended June 30, 2018

For The Three Months Ended June 30, 2017

For The Six Months Ended June 30, 2018

For The Six Months Ended June 30, 2017

Revenues:

Investment income

$

12,249,035

$

12,174,215

$

25,627,521

$

23,644,401

Property revenues

2,403,142

3,306,722

4,739,654

7,036,500

Contingent interest income

-

86,567

-

219,217

Other interest income

1,058,688

666,796

1,801,724

1,311,933

Other income

74,300

-

74,300

62,637

   Total Revenues

15,785,165

16,234,300

32,243,199

32,274,688

Expenses:

Real estate operating (exclusive of items shown below)

1,290,487

1,621,084

2,685,980

4,105,300

Impairment of securities

831,062

-

831,062

-

Depreciation and amortization

921,816

1,270,379

1,828,131

2,863,205

Amortization of deferred financing costs

430,687

562,585

895,459

1,302,823

Interest expense

5,918,867

5,841,327

10,801,172

11,283,580

General and administrative

3,041,125

2,876,450

5,852,970

6,007,330

   Total Expenses

12,434,044

12,171,825

22,894,774

25,562,238

Other Income:

Gain (loss) on sale of real estate assets, net

-

(16,075)

-

7,152,512

Income before income taxes

3,351,121

4,046,400

9,348,425

13,864,962

Income tax expense (benefit)

13,000

(63,000)

6,000

2,395,047

Net income before noncontrolling interest

3,338,121

4,109,400

9,342,425

11,469,915

Income attributable to noncontrolling interest

-

-

-

71,653

Net income - ATAX Partnership

$

3,338,121

$

4,109,400

$

9,342,425

$

11,398,262

Net income - ATAX Partnership

3,338,121

4,109,400

9,342,425

11,398,262

   Redeemable preferred unit distributions and accretion

(717,762)

(432,550)

(1,435,525)

(757,192)

Net income available to Partners

$

2,620,359

$

3,676,850

$

7,906,900

$

10,641,070

Selected Segment Data (Partnership):

Revenue and Other Income

   Mortgage Revenue Bond Investments

$

11,098,140

$

11,059,940

$

23,168,696

$

21,648,438

   MF Properties

2,477,442

3,290,647

4,813,954

14,251,649

   Public Housing Capital Fund Trusts

622,961

719,182

1,243,067

1,427,968

Other Investments

1,586,622

1,148,456

3,017,482

2,099,145

Total Revenue and Other Income

$

15,785,165

$

16,218,225

$

32,243,199

$

39,427,200

Total Expenses:

   Mortgage Revenue Bond Investments

$

8,789,850

$

8,467,172

$

16,560,811

$

16,826,617

   MF Properties

2,572,867

3,272,600

5,272,109

10,488,057

   Public Housing Capital Fund Trusts

1,076,658

369,053

1,050,642

714,264

Other Investments

7,669

-

17,212

-

Total

$

12,447,044

$

12,108,825

$

22,900,774

$

28,028,938

Net Income (loss) - ATAX Partnership

   Mortgage Revenue Bond Investments

$

2,308,290

$

2,592,768

$

6,607,885

$

4,821,821

   MF Properties

(95,425)

18,047

(458,155)

3,763,592

   Public Housing Capital Fund Trusts

(453,697)

350,129

192,425

713,704

Other Investments

1,578,953

1,148,456

3,000,270

2,099,145

Income from continuing operations

$

3,338,121

$

4,109,400

$

9,342,425

$

11,398,262

17

June 30, 2018

March 31, 2018

December 31, 2017

September 30, 2017

June 30, 2017

March 31, 2017

December 31, 2016

September 30, 2016

Partnership net income

$

3,338,121

$

6,004,304

$

15,647,453

$

3,545,483

$

4,109,400

$

7,288,862

$

5,623,335

$

4,623,542

Change in fair value of derivatives and interest

   rate derivative amortization

(6,386

)

(989,995

)

(129,595

)

66,917

181,420

121,349

(1,395,730

)

(263,684

)

Depreciation and amortization expense

921,816

906,315

1,090,599

1,259,055

1,270,379

1,592,826

1,569,641

1,361,259

Impairment of securities

831,062

-

761,960

-

-

-

-

-

Impairment charge on real estate assets

-

-

-

-

-

-

-

-

Amortization of deferred financing costs

430,687

464,772

444,299

577,413

562,585

740,238

512,309

425,520

Restricted units compensation expense

543,521

206,636

455,119

550,390

438,893

170,840

802,092

31,050

Deferred income taxes

-

34,000

(26,000

)

(9,000

)

(201,000

)

(164,000

)

(51,000

)

(136,000

)

Redeemable Series A Preferred Unit distribution

   and accretion

(717,762

)

(717,763

)

(701,664

)

(523,682

)

(432,550

)

(324,642

)

(274,772

)

(181,969

)

Bond purchase premium (discount) amortization

   (accretion), net of cash received

(3,808

)

(4,098

)

(193,530

)

(26,270

)

(26,741

)

(23,507

)

(27,770

)

(147,033

)

Tier 2 Income distributable to the General Partner

-

-

(873,893

)

-

(16,224

)

(1,104,401

)

(426,774

)

(291,295

)

CAD

$

5,337,251

$

5,904,171

$

16,474,748

$

5,440,306

$

5,886,162

$

8,297,565

$

6,331,331

$

5,421,390

Weighted average number of units outstanding, basic

59,937,300

60,124,333

59,895,229

59,811,578

59,862,969

60,037,687

59,995,789

60,176,937

Partnership Only:

Net income, basic and diluted, per unit

$

0.04

$

0.09

$

0.23

$

0.05

$

0.06

$

0.10

$

0.09

$

0.07

CAD per unit, basic

$

0.09

$

0.10

$

0.27

$

0.09

$

0.10

$

0.14

$

0.11

$

0.09

Distributions declared, per unit

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

18

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

15 West Apartments

Vancouver, WA

7/1/2054

6.25

%

$

9,768,096

$

11,173,904

Arbors at Hickory Ridge

Memphis, TN

1/1/2049

6.25

%

11,177,175

12,251,402

Avistar on the Boulevard - Series A

San Antonio, TX

3/1/2050

6.00

%

16,026,896

17,314,241

Avistar at the Crest - Series A

San Antonio, TX

3/1/2050

6.00

%

9,407,620

10,285,659

Avistar (February 2013 Acquisition) - Series B (2 Bonds)

San Antonio, TX

4/1/2050

9.00

%

1,191,590

1,243,624

Avistar at the Oak - Series A

San Antonio, TX

8/1/2050

6.00

%

7,597,649

8,290,790

Avistar in 09 - Series A

San Antonio, TX

8/1/2050

6.00

%

6,560,275

7,129,562

Avistar on the Hill - Series A

San Antonio, TX

8/1/2050

6.00

%

5,249,199

5,728,088

Avistar (June 2013 Acquisition) - Series B (2 Bonds)

San Antonio, TX

9/1/2050

9.00

%

997,850

1,038,291

Avistar at Copperfield - Series A

Houston, TX

5/1/2054

5.75

%

10,000,000

10,281,641

Avistar at Copperfield - Series B

Houston, TX

6/1/2054

12.00

%

4,000,000

4,012,310

Avistar at the Parkway - Series A

San Antonio, TX

5/1/2052

6.00

%

13,174,934

14,251,211

Avistar at the Parkway - Series B

San Antonio, TX

6/1/2052

12.00

%

124,734

156,164

Avistar at Wilcrest - Series A

Houston, TX

5/1/2054

5.75

%

3,775,000

3,851,010

Avistar at Wilcrest - Series B

Houston, TX

6/1/2054

12.00

%

1,550,000

1,554,839

Avistar at Wood Hollow - Series A

Austin, TX

5/1/2054

5.75

%

31,850,000

32,369,528

Avistar at Wood Hollow - Series B

Austin, TX

6/1/2054

12.00

%

8,410,000

8,437,743

Bella Vista

Gainesville, TX

4/1/2046

6.15

%

6,225,000

6,261,768

Bridle Ridge

Greer, SC

1/1/2043

6.00

%

7,430,000

7,527,044

Brookstone

Waukegan, IL

5/1/2040

5.45

%

8,928,442

8,999,913

Bruton

Dallas, TX

8/1/2054

6.00

%

17,993,528

19,977,210

Columbia Gardens

Columbia, SC

12/1/2050

5.50

%

13,127,999

14,599,938

Companion at Thornhill Apartments

Lexington, SC

1/1/2052

5.80

%

11,350,638

12,294,978

Concord at Gulfgate - Series A

Houston, TX

2/1/2032

6.00

%

19,185,000

21,297,142

Concord at Little York - Series A

Houston, TX

2/1/2032

6.00

%

13,440,000

15,043,710

Concord at Williamcrest - Series A

Houston, TX

2/1/2032

6.00

%

20,820,000

23,207,983

Copper Gate Apartments

Lafayette, IN

12/1/2029

6.25

%

5,100,000

5,706,607

Courtyard Apartments - Series A

Fullerton, CA

12/1/2033

5.00

%

10,230,000

11,080,109

Courtyard Apartments - Series B

Fullerton, CA

12/1/2018

8.00

%

6,228,000

6,220,785

Cross Creek

Beaufort, SC

3/1/2049

6.15

%

8,121,376

8,783,033

Crossing at 1415 - Series A

San Antonio, TX

12/1/2052

6.00

%

7,507,847

8,043,269

Decatur Angle

Fort Worth, TX

1/1/2054

5.75

%

22,713,795

24,749,671

Esperanza at Palo Alto

San Antonio, TX

7/1/2058

5.80

%

19,540,000

21,679,382

Glenview - Series A

Cameron Park, CA

12/1/2031

5.75

%

4,604,904

4,991,648

Greens of Pine Glen - Series A

Durham, NC

10/1/2047

6.50

%

8,080,000

9,005,182

Greens of Pine Glen - Series B

Durham, NC

10/1/2047

9.00

%

935,715

1,103,283

Harden Ranch - Series A

Salinas, CA

3/1/2030

5.75

%

6,811,252

7,680,126

Harmony Court Bakersfield - Series A

Bakersfield, CA

12/1/2033

5.00

%

3,730,000

4,003,992

Harmony Terrace - Series A

Simi Valley, CA

1/1/2034

5.00

%

6,900,000

7,476,592

Harmony Terrace - Series B

Simi Valley, CA

1/1/2019

8.00

%

7,400,000

7,395,349

Heights at 515 - Series A

San Antonio, TX

12/1/2052

6.00

%

6,873,563

7,481,229

Heritage Square - Series A

Edinburg, TX

9/1/2051

6.00

%

11,011,625

11,879,866

Lake Forest Apartments

Daytona Beach, FL

12/1/2031

6.25

%

8,433,000

9,617,869

Las Palmas II - Series A

Coachella, CA

11/1/2033

5.00

%

1,695,000

1,818,705

Las Palmas II - Series B

Coachella, CA

11/1/2018

8.00

%

1,770,000

1,767,793

19

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

Live 929

Baltimore, MD

7/1/2049

5.78

%

39,935,000

43,427,682

Montclair - Series A

Lemoore, CA

12/1/2031

5.75

%

2,494,734

2,811,023

Montecito at Williams Ranch Apartments - Series A

Salinas, CA

10/1/2034

5.50

%

7,690,000

8,543,197

Montecito at Williams Ranch Apartments - Series B

Salinas, CA

10/1/2019

5.50

%

4,781,000

4,771,666

Oaks at Georgetown - Series A

Georgetown, TX

1/1/2034

5.00

%

12,330,000

12,718,294

Ohio Bond - Series A

Ohio

6/1/2050

7.00

%

14,052,997

14,569,688

Ohio Bond - Series B

Ohio

6/1/2050

10.00

%

3,528,660

3,635,764

Pro Nova - 2014-1

Knoxville, TN

5/1/2034

6.00

%

10,000,000

9,969,884

Renaissance - Series A

Baton Rouge, LA

6/1/2050

6.00

%

11,182,486

12,681,186

Rosewood Townhomes - Series A

Goose Creek, SC

7/1/2055

5.75

%

9,280,000

8,802,910

Rosewood Townhomes - Series B

Goose Creek, SC

8/1/2055

12.00

%

470,000

471,467

Runnymede

Austin, TX

10/1/2042

6.00

%

10,095,000

10,166,494

San Vicente - Series A

Soledad, CA

11/1/2033

5.00

%

3,495,000

3,733,471

Santa Fe - Series A

Hesperia, CA

12/1/2031

5.75

%

3,022,276

3,429,622

Seasons at Simi Valley - Series A

Simi Valley, CA

9/1/2032

5.75

%

4,346,157

4,986,071

Seasons Lakewood - Series A

Lakewood, CA

1/1/2034

5.00

%

7,350,000

7,928,452

Seasons San Juan Capistrano - Series A

San Juan Capistrano, CA

1/1/2034

5.00

%

12,375,000

13,289,074

Seasons San Juan Capistrano - Series B

San Juan Capistrano, CA

1/1/2019

8.00

%

6,574,000

6,566,094

Silver Moon - Series A

Albuquerque, NM

8/1/2055

6.00

%

7,851,526

8,544,848

South Pointe - Series A

Hanahan, SC

7/1/2055

5.75

%

21,600,000

20,583,907

South Pointe - Series B

Hanahan, SC

8/1/2055

12.00

%

1,100,000

1,103,483

Southpark

Austin, TX

12/1/2049

6.13

%

13,300,000

14,412,365

Summerhill - Series A

Bakersfield, CA

12/1/2033

5.00

%

6,423,000

6,833,548

Sycamore Walk - Series A

Bakersfield, CA

1/1/2033

5.25

%

3,616,750

3,933,186

The Palms at Premier Park

Columbia, SC

1/1/2050

6.25

%

19,142,966

21,046,327

The Village at Madera - Series A

Madera, CA

12/1/2033

5.00

%

3,085,000

3,311,613

Tyler Park Townhomes

Greenfield, CA

1/1/2030

5.75

%

5,934,866

6,562,093

Vantage at Judson

San Antonio, TX

1/1/2053

6.00

%

26,022,746

28,093,433

Village at River's Edge

Columbia, SC

6/1/2033

6.00

%

9,969,493

11,297,035

Vineyard Gardens - Series A

Oxnard, CA

1/1/2035

5.50

%

3,995,000

4,495,383

Vineyard Gardens - Series B

Oxnard, CA

1/1/2020

5.50

%

2,846,000

2,843,708

Westside Village Market

Shafter, CA

1/1/2030

5.75

%

3,878,423

4,322,526

Willow Run

Columbia, SC

12/1/2050

5.50

%

12,945,000

14,396,406

Woodlynn Village

Maplewood, MN

11/1/2042

6.00

%

4,244,000

4,283,254

$

716,004,782

$

767,629,337

20

Name

Weighted Average Lives

Weighted Avg. Coupon Rate

Principal Outstanding

Estimated Fair Value

Public Housing Capital Fund Trust Certificate I

7

5.33

%

$

24,913,137

$

24,815,777

Public Housing Capital Fund Trust Certificate II

6.07

4.34

%

9,536,832

9,123,954

Public Housing Capital Fund Trust Certificate III

7.31

5.29

%

15,674,330