Supplemental Financial Report for

Quarter Ended March 31, 2019

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 revenue increased approximately $1.2 million, or 7.3%, to $17.7 million for the first quarter 2019;

•

Net income, basic and diluted, decreased by $0.01 per Beneficial Unit Certificate (“BUC”), or 11.1%, to $0.08 per BUC in the first quarter 2019; and

•

Cash Available for Distribution(“CAD”) increased approximately $0.01 per BUC, or 10.0%, to $0.11 per BUC in the first quarter 2019.

•

Acquired two Mortgage Revenue Bonds for approximately $6.1 million;

•

Additional Investment in unconsolidated entities of approximately $6.6 million;

•

Redemption of one Mortgage Revenue Bond for approximately $5.6 million;

•

Redemption of one Property Loan for approximately $8.4 million; and

•

Executed two new Term A/B Trusts for approximately $5.3 million.

•

Vantage at Brooks – ATAX invested in the Vantage at Brooks multifamily, market-rate project as a loan investment in the fourth quarter 2015.  The sale of the 288-unit project resulted in:

o

Repayment, in full, of ATAX’s loan investment principal and accrued interest, and

o

Recognition of approximately $3.0 million of contingent interest income in the first quarter 2019.  

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 in multifamily, market rate projects throughout the U.S.

(As of March 31, 2019)

Symbol (NASDAQ)

ATAX

Annual Distribution

$

0.50

Price

$

6.87

Yield

7.3%

BUCs Outstanding (including Restricted Units)

60,691,467

Market Capitalization

$

416,950,378

52-week BUC price range

$5.20 to $6.87

Partnership Financial Information for the Q1 2019

($’s in 000’s, except per BUC)

Total Revenue

$

17,665

Net Income – ATAX Partnership

$

6,452

Total Assets

$

993,198

Leverage Ratio¹

60%

Cash Available for Distribution (“CAD”)²

$

6,574

Distribution Declared per BUC³

$

0.125

¹

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

²

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 for the last eight fiscal quarters is provided on page 18 of the Supplement herein.

³

The most recent distribution was paid on April 30, 2019 for BUC holders of record as of March 29, 2019. The distribution is payable to BUC holders 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.

5

6

•

Total mortgage revenue bonds, core assets of ATAX, have increased to 74% of Total Assets at March 31, 2019, 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

$48,081

$(94,959)

$(189,988)

$(285,099)

$(380,178)

TEBS Debt Financings

156,271

(145,351)

(286,397)

(427,743)

(569,093)

Other Investment Financings

67,619

(135,165)

(270,234)

(405,206)

(540,082)

Total

$271,971

$(375,475)

$(746,619)

$(1,118,048)

$(1,489,353)

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, property loans, taxable MRBs, initial finance costs and the MF Properties at cost.

10

•

During the first quarter of 2019, we recognized contingent interest of approximately $3.0 million.  Tier 2 income paid to the General Partner for this item was approximately $753,000.

•

During the fourth quarter of 2018, we recognized a gain on the sale of an investment in an unconsolidated entity of approximately $2.9 million and contingent interest of approximately $5.1 million. No Tier 2 income was paid to the General Partner for these items as the maximum annual Tier 2 distribution was met.

•

During the third quarter of 2018, we recognized a gain on the sale of Jade Park (an MF Property) of approximately $4.1 million before direct and indirect expense and contingent interest of approximately $4.2 million. Tier 2 income paid to the General Partner for these items was approximately $2.1 million.

•

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.

11

•

Since April 1, 2017, the ratio of “Salaries and benefits” and “General and administrative” expenses has averaged approximately 0.37% of Total Assets.

12

•

In 2019, we realized approximately $3.0 million of contingent interest. Approximately $753,000 was allocated to the General Partner and approximately $2.3 million was allocated to the BUC holders.

•

In 2018, we realized approximately $9.3 million of contingent interest, gains on sale of real estate assets of approximately $4.1 million, and gains on sale of an investment in an unconsolidated entity of approximately $2.9 million. Approximately $2.1 million was allocated to the General Partner and approximately $14.2 million was allocated to the BUC holders.

•

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 BUC holders.

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

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

March 31, 2019

December 31, 2018

Assets

Cash and cash equivalents

$

38,210,497

$

32,001,925

Restricted cash

792,321

1,266,686

Interest receivable, net

7,675,314

7,011,839

Mortgage revenue bonds held in trust, at fair value

656,062,961

645,258,873

Mortgage revenue bonds, at fair value

82,984,880

86,894,562

Public housing capital fund trusts, at fair value

46,406,868

48,672,086

Real estate assets:

Land and improvements

4,971,665

4,971,665

Buildings and improvements

71,949,453

71,897,070

Real estate assets before accumulated depreciation

76,921,118

76,868,735

Accumulated depreciation

(13,088,741

)

(12,272,387

)

Net real estate assets

63,832,377

64,596,348

Investments in unconsolidated entities

84,684,982

76,534,306

Property loans, net of loan loss allowance

7,593,377

15,961,012

Other assets

4,954,602

4,515,609

Total Assets

$

993,198,179

$

982,713,246

Liabilities

Accounts payable, accrued expenses and other liabilities

$

9,030,207

$

7,543,822

Distribution payable

8,393,271

7,576,167

Unsecured lines of credit

35,659,200

35,659,200

Debt financing, net

508,248,469

505,663,565

Mortgages payable and other secured financing, net

27,373,224

27,454,375

Total Liabilities

588,704,371

583,897,129

Redeemable preferred units

94,359,389

94,350,376

Partners' Capital

General Partner

401,277

344,590

Beneficial Unit Certificate holders

309,733,142

304,121,151

Total Partners' Capital

310,134,419

304,465,741

Total Liabilities and Partners' Capital

$

993,198,179

$

982,713,246

16

For The Three Months Ended March 31, 2019

For The Three Months Ended March 31, 2018

Revenues:

Investment income

$

12,407,876

$

13,378,486

Property revenues

1,993,629

2,336,512

Contingent interest income

3,012,102

-

Other interest income

222,238

743,036

Other income

28,753

-

   Total Revenues

17,664,598

16,458,034

Expenses:

Real estate operating (exclusive of items shown below)

1,176,818

1,395,493

Depreciation and amortization

820,808

906,315

Interest expense

6,394,920

5,347,077

General and administrative

2,778,591

2,811,845

   Total Expenses

11,171,137

10,460,730

Income before income taxes

6,493,461

5,997,304

Income tax expense (benefit)

41,648

(7,000)

Net income - ATAX Partnership

$

6,451,813

$

6,004,304

Net income - ATAX Partnership

6,451,813

6,004,304

   Redeemable preferred unit distributions and accretion

(717,763)

(717,763)

Net income available to Partners

$

5,734,050

$

5,286,541

Selected Segment Data (Partnership):

Revenue and Other Income

   Mortgage Revenue Bond Investments

$

10,443,413

$

12,070,556

   MF Properties

1,993,629

2,336,512

   Public Housing Capital Fund Trusts

638,146

620,106

Other Investments

4,589,410

1,430,860

Total Revenue and Other Income

$

17,664,598

$

16,458,034

Expenses

   Mortgage Revenue Bond Investments

$

8,400,059

$

7,770,961

   MF Properties

2,430,763

2,699,242

   Public Housing Capital Fund Trusts

381,963

(26,016)

Other Investments

-

9,543

Total Expenses

$

11,212,785

$

10,453,730

Net Income (loss) - ATAX Partnership

   Mortgage Revenue Bond Investments

$

2,043,354

$

4,299,595

   MF Properties

(437,134)

(362,730)

   Public Housing Capital Fund Trusts

256,183

646,122

Other Investments

4,589,410

1,421,317

Income from continuing operations

$

6,451,813

$

6,004,304

17

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

March 31, 2018

December 31, 2017

September 30, 2017

June 30, 2017

Partnership net income

$

6,451,813

$

13,914,049

$

17,883,055

$

3,338,121

$

6,004,304

$

15,647,453

$

3,545,483

$

4,109,400

Change in fair value of derivatives and interest

   rate derivative amortization

306,591

363,481

(91,679

)

(6,386

)

(989,995

)

(129,595

)

66,917

181,420

Depreciation and amortization expense

820,808

863,534

864,600

921,816

906,315

1,090,599

1,259,055

1,270,379

Impairment of securities

-

-

309,958

831,062

-

761,960

-

-

Impairment charge on real estate assets

-

-

150,000

-

-

-

-

-

Amortization of deferred financing costs

361,305

368,165

409,420

430,687

464,772

444,299

577,413

562,585

Restricted units compensation expense

184,184

450,141

622,227

543,521

206,636

455,119

550,390

438,893

Deferred income taxes

(40,692

)

(276,235

)

-

-

34,000

(26,000

)

(9,000

)

(201,000

)

Redeemable Series A Preferred Unit distribution

   and accretion

(717,763

)

(717,762

)

(717,763

)

(717,762

)

(717,763

)

(701,664

)

(523,682

)

(432,550

)

Bond purchase premium (discount) amortization

   (accretion), net of cash received

(38,952

)

(3,214

)

(3,513

)

(3,808

)

(4,098

)

(193,530

)

(26,270

)

(26,741

)

Tier 2 Income distributable to the General Partner

(753,025

)

12,263

(2,074,381

)

-

-

(873,893

)

-

(16,224

)

CAD

$

6,574,269

$

14,974,422

$

17,351,924

$

5,337,251

$

5,904,171

$

16,474,748

$

5,440,306

$

5,886,162

Weighted average number of BUCs outstanding, basic

60,426,177

60,143,725

59,907,123

59,937,300

60,124,333

59,895,229

59,811,578

59,862,969

Partnership Only:

Net income, basic and diluted, per BUC

$

0.08

$

0.22

$

0.25

$

0.04

$

0.09

$

0.23

$

0.05

$

0.06

CAD per BUC, basic

$

0.11

$

0.25

$

0.29

$

0.09

$

0.10

$

0.27

$

0.09

$

0.10

Distributions declared, per BUC

$

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

%

$

9,721,717

$

11,298,714

Arbors at Hickory Ridge

Memphis, TN

1/1/2049

6.25

%

11,083,800

12,683,298

Avistar on the Boulevard - Series A

San Antonio, TX

3/1/2050

6.00

%

15,897,526

17,740,257

Avistar at the Crest - Series A

San Antonio, TX

3/1/2050

6.00

%

9,331,681

10,493,596

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

San Antonio, TX

4/1/2050

9.00

%

1,186,525

1,279,267

Avistar at the Oaks - Series A

San Antonio, TX

8/1/2050

6.00

%

7,538,088

8,357,177

Avistar in 09 - Series A

San Antonio, TX

8/1/2050

6.00

%

6,508,847

7,103,751

Avistar on the Hills - Series A

San Antonio, TX

8/1/2050

6.00

%

5,208,048

5,819,571

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

San Antonio, TX

9/1/2050

9.00

%

993,773

1,050,998

Avistar at Copperfield - Series A

Houston, TX

5/1/2054

5.75

%

10,000,000

10,712,262

Avistar at Copperfield - Series B

Houston, TX

6/1/2054

12.00

%

4,000,000

4,014,008

Avistar at the Parkway - Series A

San Antonio, TX

5/1/2052

6.00

%

13,083,475

14,601,702

Avistar at the Parkway - Series B

San Antonio, TX

6/1/2052

12.00

%

124,529

159,142

Avistar at Wilcrest - Series A

Houston, TX

5/1/2054

5.75

%

3,775,000

4,042,279

Avistar at Wilcrest - Series B

Houston, TX

6/1/2054

12.00

%

1,550,000

1,555,292

Avistar at Wood Hollow - Series A

Austin, TX

5/1/2054

5.75

%

31,850,000

33,993,030

Avistar at Wood Hollow - Series B

Austin, TX

6/1/2054

12.00

%

8,410,000

8,440,947

Bridle Ridge

Greer, SC

1/1/2043

6.00

%

7,355,000

7,401,949

Brookstone

Waukegan, IL

5/1/2040

5.45

%

8,849,684

9,439,217

Bruton

Dallas, TX

8/1/2054

6.00

%

17,902,767

20,308,711

Columbia Gardens

Columbia, SC

12/1/2050

5.50

%

13,027,000

14,863,224

Companion at Thornhill Apartments

Lexington, SC

1/1/2052

5.80

%

11,266,464

12,483,955

Concord at Gulfgate - Series A

Houston, TX

2/1/2032

6.00

%

19,103,188

21,817,693

Concord at Little York - Series A

Houston, TX

2/1/2032

6.00

%

13,382,687

15,345,192

Concord at Williamcrest - Series A

Houston, TX

2/1/2032

6.00

%

20,731,216

23,677,059

Copper Gate Apartments

Lafayette, IN

12/1/2029

6.25

%

5,055,000

5,723,044

Courtyard Apartments - Series A

Fullerton, CA

12/1/2033

5.00

%

10,209,805

11,234,966

Courtyard Apartments - Series B

Fullerton, CA

6/1/2019

8.00

%

6,228,000

6,228,251

Cross Creek

Beaufort, SC

3/1/2049

6.15

%

8,047,878

8,700,520

Crossing at 1415 - Series A

San Antonio, TX

12/1/2052

6.00

%

7,457,776

8,158,466

Decatur Angle

Fort Worth, TX

1/1/2054

5.75

%

22,587,594

24,999,162

Esperanza at Palo Alto

San Antonio, TX

7/1/2058

5.80

%

19,455,730

22,258,844

Gateway Village

Durham, NC

4/1/2032

6.10

%

2,600,000

2,914,632

Glenview - Series A

Cameron Park, CA

12/1/2031

5.75

%

4,570,194

5,190,982

Greens of Pine Glen - Series A

Durham, NC

10/1/2047

6.50

%

8,008,000

8,857,812

Greens of Pine Glen - Series B

Durham, NC

10/1/2047

12.00

%

932,993

1,083,658

Harden Ranch - Series A

Salinas, CA

3/1/2030

5.75

%

6,757,247

7,800,403

Harmony Court Bakersfield - Series A

Bakersfield, CA

12/1/2033

5.00

%

3,722,637

4,061,548

Harmony Terrace - Series A

Simi Valley, CA

1/1/2034

5.00

%

6,890,938

7,619,360

Heights at 515 - Series A

San Antonio, TX

12/1/2052

6.00

%

6,827,722

7,641,130

Heritage Square - Series A

Edinburg, TX

9/1/2051

6.00

%

10,777,579

11,877,771

Las Palmas II - Series A

Coachella, CA

11/1/2033

5.00

%

1,689,400

1,850,170

19

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

Live 929

Baltimore, MD

7/1/2049

5.78

%

39,830,000

42,296,320

Lynnhaven Apartments

Durham, NC

4/1/2032

6.10

%

3,450,000

3,795,712

Montclair - Series A

Lemoore, CA

12/1/2031

5.75

%

2,475,929

2,793,624

Montecito at Williams Ranch - Series A

Salinas, CA

10/1/2034

5.50

%

7,690,000

8,780,812

Oaks at Georgetown - Series A

Georgetown, TX

1/1/2034

5.00

%

12,313,807

13,153,057

Ohio Bond - Series A

Ohio

6/1/2050

7.00

%

13,956,000

14,082,387

Ohio Bond - Series B

Ohio

6/1/2050

10.00

%

3,516,859

3,544,104

Pro Nova - 2014-1

Knoxville, TN

5/1/2034

6.00

%

10,000,000

9,612,000

Renaissance - Series A

Baton Rouge, LA

6/1/2050

6.00

%

11,093,792

11,783,191

Rosewood Townhomes - Series A

Goose Creek, SC

7/1/2055

5.75

%

9,280,000

8,828,138

Rosewood Townhomes - Series B

Goose Creek, SC

8/1/2055

12.00

%

470,000

471,438

Runnymede

Austin, TX

10/1/2042

6.00

%

10,040,000

10,175,058

San Vicente - Series A

Soledad, CA

11/1/2033

5.00

%

3,483,453

3,814,952

Santa Fe - Series A

Hesperia, CA

12/1/2031

5.75

%

2,999,495

3,452,584

Seasons at Simi Valley - Series A

Simi Valley, CA

9/1/2032

5.75

%

4,315,002

5,059,439

Seasons Lakewood - Series A

Lakewood, CA

1/1/2034

5.00

%

7,340,347

8,081,417

Seasons San Juan Capistrano - Series A

San Juan Capistrano, CA

1/1/2034

5.00

%

12,358,748

13,606,468

Silver Moon - Series A

Albuquerque, NM

8/1/2055

6.00

%

7,807,824

8,859,946

Solano Vista - Series A

Vallejo, CA

1/1/2036

5.85

%

2,665,000

3,150,348

Solano Vista - Series B

Vallejo, CA

1/1/2021

5.85

%

3,103,000

3,097,298

South Pointe - Series A

Hanahan, SC

7/1/2055

5.75

%

21,600,000

20,639,412

South Pointe - Series B

Hanahan, SC

8/1/2055

12.00

%

1,100,000

1,102,830

Southpark

Austin, TX

12/1/2049

6.13

%

13,155,000

14,078,366

Summerhill - Series A

Bakersfield, CA

12/1/2033

5.00

%

6,410,320

6,993,919

Sycamore Walk - Series A

Bakersfield, CA

1/1/2033

5.25

%

3,588,448

4,001,385

The Palms at Premier Park

Columbia, SC

1/1/2050

6.25

%

18,994,280

21,231,510

The Village at Madera - Series A

Madera, CA

12/1/2033

5.00

%

3,078,910

3,359,216

Tyler Park Townhomes

Greenfield, CA

1/1/2030

5.75

%

5,887,277

6,628,897

Village at Avalon

Albuquerque, NM

1/1/2059

5.80

%

16,382,573

18,339,749

Village at River's Edge

Columbia, SC

6/1/2033

6.00

%

9,921,985

11,539,612

Vineyard Gardens - Series A

Oxnard, CA

1/1/2035

5.50

%

3,995,000

4,571,050

Westside Village Market

Shafter, CA

1/1/2030

5.75

%

3,847,324

4,353,684

Willow Run

Columbia, SC

12/1/2050

5.50

%

12,846,000

14,656,611

Woodlynn Village

Maplewood, MN

11/1/2042

6.00

%

4,221,000

4,230,297

Total Mortgage Revenue Bonds

$

676,916,881

$

739,047,841

20

Weighted

Weighted Avg.

Name

Average Lives

Coupon Rate

Principal  Outstanding

Estimated Fair Value

Public Housing Capital Fund Trust Certificate I

6.24

5.38

%

$

24,913,137

$

24,866,898

Public Housing Capital Fund Trust Certificate II

3.37

4.35

%

6,769,666

6,676,265

Public Housing Capital Fund Trust Certificate III

6.51

5.30

%

15,199,430

14,863,705

$

46,882,233

$

46,406,868

21

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

15 West Apartments

Vancouver, WA

7/1/2054

6.25

%

$

9,737,418

$

11,217,907

Arbors at Hickory Ridge

Memphis, TN

1/1/2049

6.25

%

11,115,410

12,594,151

Avistar on the Boulevard - Series A

San Antonio, TX

3/1/2050

6.00

%

15,941,296

17,569,565

Avistar at the Crest - Series A

San Antonio, TX

3/1/2050

6.00

%

9,357,374

10,393,662

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

San Antonio, TX

4/1/2050

9.00

%

1,188,251

1,266,240

Avistar at the Oaks - Series A

San Antonio, TX

8/1/2050

6.00

%

7,558,240

8,265,210

Avistar in 09 - Series A

San Antonio, TX

8/1/2050

6.00

%

6,526,247

7,052,186

Avistar on the Hills - Series A

San Antonio, TX

8/1/2050

6.00

%

5,221,971

5,779,055

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

San Antonio, TX

9/1/2050

9.00

%

995,162

1,042,642

Avistar at Copperfield - Series A

Houston, TX

5/1/2054

5.75

%

10,000,000

10,589,196

Avistar at Copperfield - Series B

Houston, TX

6/1/2054

12.00

%

4,000,000

4,011,730

Avistar at the Parkway - Series A

San Antonio, TX

5/1/2052

6.00

%

13,114,418

14,346,710

Avistar at the Parkway - Series B