Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Financial Report for

Quarter Ended September 30, 2019

 

 

 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

All statements in this document other than statements of historical facts, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. When used, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, are intended to identify forward-looking statements. We have based forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. This document may also contain estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties contained in this supplement and, accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the headings “Item 1A Risk Factors” in our 2018 Annual Report on Form 10-K for the year ended December 31, 2018.  These forward-looking statements are subject to various risks and uncertainties and America First Multifamily Investors, L.P. expressly disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Most, but not all, of the selected financial information furnished herein is derived from the America First Multifamily Investors, L.P.’s (“ATAX” or “Partnership”) consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis of financial condition and results of operations included in the Partnership’s reports on Forms 10-K and 10-Q. The Partnership’s annual consolidated financial statements were subject to an independent audit, dated February 28, 2019.

Disclosure Regarding Non-GAAP Measures

This document refers to certain financial measures that are identified as non-GAAP. We believe these non-GAAP measures are helpful to investors because they are the key information used by management to analyze our operations. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures.

Please see the consolidated financial statements we filed with the Securities and Exchange Commission on Forms 10-K and 10-Q.  Our GAAP consolidated financial statements can be located upon searching for the Partnership’s filings at www.sec.gov.

 

 

 

 

 

 

PARTNERSHIP FINANCIAL INFORMATION

TABLE OF CONTENTS

 

 

Pages

Supplemental Letter from the CEO

4

Quarterly Fact Sheet

5

Financial Performance Trend Graphs

6-11

Other Partnership Information

12

Partnership Financial Measures

13

 

 

 

 

 

 

 

 

 

 

 

AMERICA FIRST MULTIFAMILY INVESTORS L.P.

SUPPLEMENTAL LETTER FROM THE CEO

 

During Q3 2019, ATAX continued to focus its efforts to “fine tune” the Balance Sheet.  The results are as follows:

 

As of and for the three months ended September 30, 2019:

 

 

•

Total revenues of $14.9 million,

 

•

Net income, basic and diluted, of $0.13 per Beneficial Unit Certificate (“BUC”),

 

•

Cash Available for Distribution of $0.21 per BUC,

 

•

Total assets of $1.0 billion, and

 

•

Total Mortgage Revenue Bond (“MRB”) investments of $777.3 million.

 

For the nine months ended September 30, 2019:

 

 

•

Total revenues of $46.9 million,

 

•

Net income, basic and diluted, of $0.26 per BUC, and

 

•

Cash Available for Distribution of $0.39 per BUC.

 

The Partnership reported the following notable transactions during the third quarter of 2019:

 

 

•

Increased its Investment in unconsolidated entities by approximately $1.0 million,

 

•

Net repayment on unsecured lines of credit of $10.0 million,

 

•

Repayment of Tender Option Bond (“TOB”) Trust financings and Term TOB Trust financings of approximately

$71.7 million, and

 

•

Repayment of Term A/B Trust financings of approximately $10.5 million.

In July 2019, we refinanced the M24 and M33 TEBS financings with Freddie Mac, converted each to a fixed interest rate and extended their maturities to May 2027 and September 2030, respectively.

 

In September 2019, the membership interests of Vantage at Panama City Beach were sold to an unrelated third party. The Partnership received cash of approximately $22.7 million upon sale. The Partnership recognized approximately $547,000 of investment income and approximately $10.5 million of gain on sale of investment in an unconsolidated entity associated with the sale.

 

Thank you for your continued support of ATAX!

Chad Daffer

Chief Executive Officer

 

4

 

 

 

THIRD QUARTER 2019 FACT SHEET

 

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 September 30, 2019)

 

 

 

Symbol (NASDAQ)

 

 

ATAX

 

Annual Distribution

 

$

0.50

 

Price

 

$

8.18

 

Yield

 

 

6.1%

 

 

 

 

 

 

BUCs Outstanding (including

   Restricted Units)

 

 

60,835,204

 

Market Capitalization

 

$

497,631,969

 

52-week BUC price range

 

$5.20 to $8.18

 

 

 

 

 

 

 

 

 

 

 

Partnership Financial Information for Q3 2019

($’s in 000’s, except per BUC amounts)

 

 

9/30/2019

 

12/31/2018

 

 

 

 

 

 

Total Assets

$1,033,501

 

$982,713

 

Leverage Ratio1

61%

 

60%

 

 

 

 

 

 

 

Q3 2019

 

  YTD 2019

 

 

 

 

 

 

Total Revenue

$14,866

 

$46,877

 

Net Income

$9,708

 

$20,046

 

Cash Available for Distribution

  (“CAD”)2

$12,516

 

$23,701

 

Distribution Declared per BUC3

$0.125

 

$0.375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Our overall leverage ratio is calculated as total outstanding debt divided by total assets using cost adjusted for paydowns for MRBs, PHC Certificates, property loans, and taxable MRBs, and initial cost for deferred financing costs and MF Properties.

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 is provided on page 13 of the Supplement herein.

3

The most recent distribution was paid on October 31, 2019 for BUC holders of record as of September 30, 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

 

 

 

ATAX ASSET PROFILE

 

 

6

 

 

 

ATAX MORTGAGE REVENUE BOND PROFILE

 

 

 

 


 

7

 

 

 

ATAX DEBT AND EQUITY PROFILE

 

 


 

8

 

 

 

DEBT FINANCING, NET ($’s in 000’s)

 

 

 

 

INTEREST RATE SENSITIVITY ANALYSIS1

 

Description

 

- 25 basis points

 

+ 50 basis points

 

+ 100 basis points

 

+ 150 basis points

 

+ 200 basis points

TOB & Term A/B Debt

Financings

 

$152,728

 

$(276,955)

 

$(549,141)

 

$(826,363)

 

$(1,104,523)

TEBS Debt Financings

 

114,212

 

(207,204)

 

(304,896)

 

(346,539)

 

(388,804)

Other Investment Financings

 

24,987

 

(49,947)

 

(99,859)

 

(149,734)

 

(199,573)

Total

 

$291,927

 

$(534,106)

 

$(953,896)

 

$(1,322,636)

 

$(1,692,900)

 

 

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

 

 

 

TOTAL REVENUE TRENDS

 

 

10

 

 

 

OPERATING EXPENSE TRENDS

 

 

 

 

 

 

•

Since October 1, 2017, the ratio of “Salaries and benefits” and “General and administrative” expenses has averaged approximately 0.40% of Total Assets on a quarterly basis.

 

•

Salaries and benefits expense for the three months ended September 30, 2019 includes approximately $2.7 million of expense related to the accelerated vesting of restricted units upon the change in control of ATAX’s general partner on September 10, 2019.

 

11

 

 

 


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 & K-1 Services:

855-4AT-AXK1

 

 

Phone: 718-921-8124

Web Site:

www.ataxfund.com

 

 

888-991-9902

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

 

 

 

Board of Managers of Greystone AF Manager, LLC:

(acting as the directors of ATAX)

 

 

 

Stephen Rosenberg

 

Chairman of the Board

Curtis A. Pollock

 

Manager

Jeffrey M. Baevsky

 

Manager

Drew C. Fletcher

 

Manager

Steven C. Lilly

 

Manager

Walter K. Griffith

 

Manager

William P. Mando, Jr.

 

Manager

 

 

 

Corporate Officers:

Chief Executive Officer – Chad L. Daffer

Chief Financial Officer – Craig S. Allen

Chief Investment Officer - Kenneth C. Rogozinski

 

 

 

12

 

 

 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CASH AVAILABLE FOR DISTRIBUTION (CAD) AND OTHER PERFORMANCE MEASURES

 

The following table contains reconciliations of the Partnership’s GAAP net income to its CAD:

 

 

For the Three

 

 

For the Nine

 

 

Months Ended

 

 

Months Ended

 

 

September 30, 2019

 

 

September 30, 2019

 

Partnership net income

$

9,707,903

 

 

$

20,045,906

 

Change in fair value of derivatives and interest

   rate derivative amortization

 

68,333

 

 

 

458,141

 

Depreciation and amortization expense

 

743,503

 

 

 

2,384,115

 

Impairment charge on real estate assets

 

75,000

 

 

 

75,000

 

Amortization of deferred financing costs

 

745,457

 

 

 

1,476,463

 

Restricted units compensation expense

 

3,265,677

 

 

 

3,636,091

 

Deferred income taxes

 

(82,167

)

 

 

(138,331

)

Redeemable Series A Preferred Unit distribution

   and accretion

 

(717,762

)

 

 

(2,153,288

)

Tier 2 Income distributable to the General Partner

 

(1,264,949

)

 

 

(2,017,974

)

Bond purchase premium (discount) amortization

   (accretion), net of cash received

 

(24,532

)

 

 

(64,970

)

Total CAD

$

12,516,463

 

 

$

23,701,153

 

 

 

 

 

 

 

 

 

Weighted average number of BUCs outstanding, basic

 

60,519,542

 

 

 

60,457,299

 

 

 

 

 

 

 

 

 

Partnership Only:

 

 

 

 

 

 

 

Net income per BUC, basic

$

0.13

 

 

$

0.26

 

Total CAD per BUC, basic

$

0.21

 

 

$

0.39

 

Distributions declared per BUC

$

0.125

 

 

$

0.375

 

 

 

13