On February 28, 2019, America First Multifamily Investors, L.P.
(NASDAQ: ATAX) (the “Partnership”) reported the following results:
For the three months ended December 31,
2018
- Total revenue increased
approximately $1.2 million, or 5.7%, to $23.1 million in the fourth
quarter 2018, compared to $21.9 million in the fourth quarter
2017,
- Net income, basic and diluted,
decreased $0.01 per Beneficial Unit Certificate (“BUC”), or 4.3%,
to $0.22 per BUC in the fourth quarter 2018, compared to $0.23 per
BUC in the fourth quarter 2017, and
- Cash Available for Distribution was
$0.25 per BUC in the fourth quarter 2018, compared to $0.27 per BUC
in the fourth quarter 2017.
For the year to date 2018
- Total revenue increased
approximately $11.0 million, or 15.6%, to $81.4 million for YTD
December 31, 2018, compared to $70.4 million for the comparable
period in 2017,
- Net income, basic and diluted,
increased $0.16 per BUC, or 36.4%, to $0.60 per BUC for YTD
December 31, 2018, compared to $0.44 per BUC for the comparable
period in 2017, and
- Cash Available for Distribution
increased $0.13 per BUC, or 21.7%, to $0.73 per BUC for YTD
December 31, 2018, compared to $0.60 per BUC for the comparable
period in 2017.
The Partnership reported the following
notable transactions during the three months ended December 31,
2018
- Acquisition of three mortgage revenue bonds for approximately
$22.2 million,
- Redemptions of four mortgage revenue bonds for approximately
$39.8 million,
- Redemption of one taxable mortgage revenue bond for
approximately $924,000,
- Redemption of two property loan investments of approximately
$7.9 million,
- Additional investments in unconsolidated entities of
approximately $3.5 million, and
- Increased the net borrowing on its unsecured line of credit by
approximately $7.2 million.
In December 2018, two multifamily projects were
sold by their respective managing members and ATAX’s loan and
equity investments were repaid. The details of the sales are as
follows:
- Vantage at New Braunfels – ATAX invested in the Vantage at New
Braunfels multifamily, market-rate project as a loan investment in
the fourth quarter 2015. The sale of the 288-unit project resulted
in:
- Repayment, in full, of ATAX’s loan investment principal,
and
- Recognition of approximately $5.1 million of contingent
interest income in the fourth quarter 2018.
- Vantage at Corpus Christi – ATAX invested in the Vantage at
Corpus Christi multifamily, market-rate project as an equity
investment in Q1 2016. This was the first Vantage equity investment
made by ATAX and the sale of the 288-unit project resulted
in:
- Repayment, in full, of ATAX’s equity investment,
- Recognition of approximately $590,000 of additional investment
income, and
- Recognition of approximately $2.9 million as gain on sale.
“The
sales of Vantage at New Braunfels and Vantage at Corpus Christi
have provided the “proof of concept” that initially attracted us to
the investments,” said Chad Daffer, Chief Executive Officer of
ATAX. “We have partnered with a developer that has been able to
construct high quality, multifamily projects in geographic areas of
the country that have been attractive to tenants and prospective
buyers. Our Unitholders benefit from the positive outcome of these
transactions.”
On August 1, 2018, the Partnership initiated an
At the Market (“ATM”) offering to sell up to $75.0 million of BUCs
at prevailing market prices on the date of sale. During the fourth
quarter of 2018, the Partnership sold 243,186 BUCs under the ATM
Program for net proceeds of approximately $1.4 million, net of
issuance costs. On February 8, 2019, the ATM Program was
terminated.
“We continue to be pleased with our ability to
raise liquidity through the use of the ATM program,” said Chad
Daffer. “This has allowed us to raise capital without price
dilution and at substantially reduced issuance costs.”
Disclosure Regarding Non-GAAP
Measures
This report refers to Cash Available for
Distribution (“CAD”), which is identified as a non-GAAP financial
measure. We believe CAD provides relevant information about our
operations and is necessary along with net income for understanding
our operating results. Net income is the GAAP measure most
comparable to CAD. There is no generally accepted methodology for
computing CAD, and our computation of CAD may not be comparable to
CAD reported by other companies. Although we consider CAD to be a
useful measure of our operating performance, CAD is a non-GAAP
measure and should not be considered as an alternative to net
income or net cash flows from operating activities which are
calculated in accordance with GAAP, or any other measures of
financial performance or liquidity presented in accordance with
GAAP. See the table at the end of this press release for a
reconciliation of our net income as determined in accordance with
GAAP and our CAD for the periods set forth.
Earnings Webcast/ Conference
Call
The Partnership will host a Webcast/Earnings
Call for Unitholders on Thursday, February 28, 2019, at 4:30 p.m.
Eastern Standard Time, to discuss its Fourth Quarter 2018 results.
Participants can access the Fourth Quarter 2018 Earnings Conference
Call in one of two ways:
- Webcast link:
https://edge.media-server.com/m6/p/4s8chd2t for
registration on Thursday, February 28, 2019, approximately 30
minutes prior to the start of the earnings call, or
- Participants may dial 1-855-854-0934, (direct 720-634-2907),
Conference ID# 8795658 ten minutes before the
earnings call is scheduled to begin, to listen to the audio portion
only.
Following completion of the earnings call, a recorded replay
will be available on the Partnership’s Investor Relations website
at www.ataxfund.com.
About America First Multifamily Investors,
L.P.
America First Multifamily Investors, L.P. was
formed on April 2, 1998 under the Delaware Revised Uniform Limited
Partnership Act for the primary purpose of acquiring, holding,
selling and otherwise dealing with a portfolio of mortgage revenue
bonds which have been issued to provide construction and/or
permanent financing for affordable multifamily, student housing and
commercial properties. The Partnership is pursuing a business
strategy of acquiring additional mortgage revenue bonds and other
investments on a leveraged basis. The Partnership expects and
believes the interest earned on these mortgage revenue bonds is
excludable from gross income for federal income tax purposes. The
Partnership seeks to achieve its investment growth strategy by
investing in additional mortgage revenue bonds and other
investments as permitted by the Partnership’s Amended and Restated
Limited Partnership Agreement, dated September 15, 2015, taking
advantage of attractive financing structures available in the
securities market, and entering into interest rate risk management
instruments. America First Multifamily Investors, L.P. press
releases are available at www.ataxfund.com.
Safe Harbor Statement
Information contained in this press release
contains “forward-looking statements,” which are based on current
expectations, forecasts and assumptions that involve risks and
uncertainties that could cause actual outcomes and results to
differ materially. These risks and uncertainties include, but are
not limited to, risks involving current maturities of our financing
arrangements and our ability to renew or refinance such maturities,
fluctuations in short-term interest rates, collateral valuations,
mortgage revenue bond investment valuations and overall economic
and credit market conditions. For a further list and description of
such risks, see the reports and other filings made by the
Partnership with the Securities and Exchange Commission, including
its Annual Report on Form 10-K for the year ended December 31,
2017. The Partnership disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
GAAP to Non-GAAP Reconciliation of
Partnership Net Income
The following tables show the calculation of CAD
(and a reconciliation of the Partnership’s net income (loss) as
determined in accordance with GAAP to CAD) for the years ended
December 31, 2018, 2017 and 2016.
|
|
For the Years Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
Partnership net
income |
|
$ |
41,139,529 |
|
|
$ |
30,591,198 |
|
|
$ |
23,784,507 |
|
Change in fair value of
derivatives and interest rate derivative amortization |
|
|
(724,579 |
) |
|
|
240,091 |
|
|
|
(17,618 |
) |
Depreciation and
amortization expense |
|
|
3,556,265 |
|
|
|
5,212,859 |
|
|
|
6,862,530 |
|
Impairment of
securities |
|
|
1,141,020 |
|
|
|
761,960 |
|
|
|
- |
|
Impairment charge on real
estate assets |
|
|
150,000 |
|
|
|
- |
|
|
|
61,506 |
|
Amortization of deferred
financing costs |
|
|
1,673,044 |
|
|
|
2,324,535 |
|
|
|
1,862,509 |
|
Restricted unit
compensation expense |
|
|
1,822,525 |
|
|
|
1,615,242 |
|
|
|
833,142 |
|
Deferred income taxes |
|
|
(242,235 |
) |
|
|
(400,000 |
) |
|
|
366,000 |
|
Redeemable Series A
Preferred Unit distribution and accretion |
|
|
(2,871,050 |
) |
|
|
(1,982,538 |
) |
|
|
(583,407 |
) |
Tier 2 Income distributable to the General
Partner (1) |
|
|
(2,062,118 |
) |
|
|
(1,994,518 |
) |
|
|
(2,858,650 |
) |
Bond purchase premium
(discount) amortization (accretion), net of cash
received |
|
|
(14,633 |
) |
|
|
(270,048 |
) |
|
|
(106,439 |
) |
Total CAD |
|
$ |
43,567,768 |
|
|
$ |
36,098,781 |
|
|
$ |
30,204,080 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
BUCs outstanding, basic |
|
|
60,028,120 |
|
|
|
59,895,229 |
|
|
|
60,182,264 |
|
Net income per BUC,
basic |
|
$ |
0.60 |
|
|
$ |
0.44 |
|
|
$ |
0.34 |
|
Total CAD per BUC,
basic |
|
$ |
0.73 |
|
|
$ |
0.60 |
|
|
$ |
0.50 |
|
Distributions declared,
per BUC |
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
(1) As described in Note 3 to the Partnership’s
consolidated financial statements, Net Interest Income representing
contingent interest and Net Residual Proceeds representing
contingent interest (Tier 2 income) will be distributed 75% to the
BUC holders and 25% to the General Partner. This adjustment
represents the 25% of Tier 2 income due to the General Partner.
For the year ended December 31, 2018, we
realized contingent interest of approximately $4.2 million on
redemption of the Lake Forest MRB, contingent interest of
approximately $5.1 million on redemption of the Vantage at New
Braunfels, LLC property loan, a gain on sale of approximately $4.1
million related to the Jade Park MF Property, and a gain on sale of
approximately $2.9 million related to the Partnership’s investment
in Vantage at Corpus Christi, LLC. These transactions are
considered Tier 2 income up to a maximum amount allowed by the
Amended and Restated LP Agreement and are distributed 25% to the
General Partner. Tier 2 income is limited to 0.9% per annum of the
principal amount of the MRBs and other investments on a cumulative
basis. This limit was reached during the year ended December 31,
2018. All income in excess of the limit is considered Tier 3 income
that is allocated entirely to the BUCs. See Note 3 to the
Partnership’s consolidated financial statements for additional
information. For the year
ended December 31, 2017, we realized contingent interest of
approximately $219,000 from excess cash flow on the Lake Forest
MRBs and approximately $2.9 million of cash proceeds from
redemption of the Ashley Square MRB, which resulted in Tier 2
income allocable to the General Partner of approximately $787,000.
The remaining Tier 2 income allocated to the general partner was
realized on the gains on sale of the Northern View, Residences of
Weatherford, Residences of DeCordova and Eagle Village MF
Properties, net of tax. The Amended and Restated LP Agreement
limits Tier 2 income to 0.9% per annum of the principal amount of
the MRBs and other investments on a cumulative basis. This limit
was reached during the year ended December 31, 2017. All income in
excess of the limit is considered Tier 3 income that is allocated
entirely to the BUCs. See Note 3 to the Partnership’s consolidated
financial statements for additional information.
For the year ended December 31, 2016, we
realized contingent interest of approximately $642,000 from excess
cash flow on the Ashley Square and Lake Forest MRBs and
approximately $1.4 million on settlement of the Foundation for
Affordable Housing property loan, which resulted in Tier 2 income
allocable to the general partner of approximately $505,000. In
addition, we realized gross gains of approximately $12.4 million
and $1.7 million from the sales of the Arboretum and Woodland Park,
respectively. After consideration of income taxes, the gain on
these sales resulted in approximately $2.4 million allocable to the
General Partner.
There was no non-recurring CAD per BUC earned by
the Partnership during the years ended December 31, 2018, 2017 and
2016
CONTACT: Craig
AllenChief Financial
Officer800-283-2357
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