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Financial Highlights
As of and for the three months ended
- Total revenues of approximately
$14.5 million - Net income, basic and diluted, of
$0.06 per Beneficial Unit Certificate (“BUC”) - Cash Available for Distribution of
$0.09 per BUC - Total assets of approximately
$1.0 billion - Total Mortgage Revenue Bond (“MRB”) investments of approximately
$787.6 million
For the six months ended
- Total revenues of approximately
$28.2 million - Net income, basic and diluted, of
$0.10 per BUC - Cash Available for Distribution of
$0.14 per BUC
The Partnership reported the following notable transactions during the second quarter of 2020:
- Acquired a Governmental Issuer Loan (“GIL”) for
$40.0 million and leveraged the investment using$36.0 million of proceeds from a Tender Option Bond (“TOB”) Trust financing - Acquired 100% of the first mortgage MRBs on a single project for approximately
$7.5 million - Received approximately
$10.3 million of cash upon the sale of Vantage atWaco - Terminated five
Term A/B Trust financings totaling approximately$43.7 million with Deutsche Bank and replaced with five newTOB Trust financings with Mizuho totaling approximately$55.4 million - Terminated the Master Trust Agreement with Deutsche Bank and is no longer subject to related debt covenants
In addition, in
Investment Updates and Management Remarks
The Partnership announced the following updates regarding its investment portfolio:
- Properties securing the Partnership’s mortgage revenue bond portfolio have reported average rental collections rates of 93% for
July 2020 rental payments. - All MRBs are current on contractual principal and interest payments as of
July 31, 2020 . - The Partnership has received no requests for forbearance of contractual principal and interest payments from borrowers associated with multifamily MRBs.
- All Vantage investments achieved increased occupancy during the second quarter.
- No Vantage project under construction has experienced material supply chain disruptions for either construction materials or labor during the second quarter.
- The universities associated with our owned student housing properties (“MF Properties”) have announced their fall semester plans. The
University of Nebraska-Lincoln , adjacent to The 50/50, has currently announced it will resume on-campus in-person classes.San Diego State University , adjacent to the Suites on Paseo, currently will hold limited on-campus in-person classes with residence halls open but with decreased density and a waiver of the requirement that first and second year students live on campus.
“We are very pleased with the performance of our investment portfolio in the second quarter,” said
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 that is calculated in accordance with GAAP, or any other measures of financial performance 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
- You can register for access to the live broadcast in listen-only mode using the following link: https://edge.media-server.com/mmc/p/varqyxpu.
- Participants wanting to ask questions may dial toll free 1-855-854-0934, (International Participants may dial 1-720-634-2907), using Conference ID# 2278486. To ensure a timely connection, please place your call at least 15 minutes prior to the start of the earnings call. At the conclusion of management’s presentation, the operator will open the lines for questions.
Following completion of the earnings call, a recorded replay will be available on the Partnership’s Investor Relations website at www.ataxfund.com.
About
Safe Harbor Statement
Certain statements in this press release are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of statements that include, but are not limited to, phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “potential,” “continue,” or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Partnership. The Partnership cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include, but are not limited to: general economic conditions, including the current and future impact of the novel coronavirus (COVID-19) on business operations, employment, and government-mandated mitigation measures; current maturities of the Partnership’s financing arrangements and the Partnership’s ability to renew or refinance such financing arrangements; defaults on the mortgage loans securing the Partnership’s mortgage revenue bonds; the competitive environment in which the Partnership operates; risks associated with investing in multifamily and student residential properties and commercial properties; changes in interest rates; the Partnership’s ability to use borrowings or obtain capital to finance its assets; recapture of previously issued Low Income Housing Tax Credits in accordance with Section 42 of the Internal Revenue Code; geographic concentration within the mortgage revenue bond portfolio held by the Partnership; appropriations risk related to the funding of federal housing programs; changes in the Internal Revenue Code and other government regulations affecting the Partnership’s business; and the other risks detailed in the Partnership’s
If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the developments and future events concerning the Partnership set forth in this press release may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this document. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. The Partnership assumes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.
Cash Available for Distribution (“CAD”)
The following table shows the calculation of CAD (and a reconciliation of the Partnership’s net income, as determined in accordance with GAAP, to CAD) for the three and six months ended
| For the Three Months Ended |
For the Six Months Ended |
|||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net income | $ | 4,588,348 | $ | 3,886,190 | $ | 7,570,105 | $ | 10,338,003 | ||||
| Change in fair value of derivatives and interest rate derivative amortization | (93,647 | ) | 83,217 | (118,848 | ) | 389,808 | ||||||
| Depreciation and amortization expense | 712,081 | 819,804 | 1,421,519 | 1,640,612 | ||||||||
| Reversal of impairment on securities (1) | - | - | (1,902,979 | ) | - | |||||||
| Provision for credit loss | 464,675 | - | 1,822,356 | - | ||||||||
| Impairment charge on real estate assets | 25,200 | - | 25,200 | - | ||||||||
| Amortization of deferred financing costs | 432,118 | 369,701 | 791,026 | 731,006 | ||||||||
| RUA compensation expense | 296,268 | 186,230 | 335,336 | 370,414 | ||||||||
| Deferred income taxes | (960 | ) | (15,472 | ) | (31,881 | ) | (56,164 | ) | ||||
| Redeemable Series A Preferred Unit distribution and accretion | (717,762 | ) | (717,763 | ) | (1,435,525 | ) | (1,435,526 | ) | ||||
| Tier 2 Income distributable (Loss allocable) to the General Partner (2) | - | - | 80,501 | (753,025 | ) | |||||||
| Bond purchase premium (discount) amortization (accretion), net of cash received | (5,761 | ) | (1,486 | ) | (19,567 | ) | (40,438 | ) | ||||
| Total CAD | $ | 5,700,560 | $ | 4,610,421 | $ | 8,537,243 | $ | 11,184,690 | ||||
| Weighted average number of BUCs outstanding, basic | 60,545,204 | 60,426,177 | 60,649,692 | 60,426,177 | ||||||||
| Net income per BUC, basic | $ | 0.06 | $ | 0.05 | $ | 0.10 | $ | 0.13 | ||||
| Total CAD per BUC, basic | $ | 0.09 | $ | 0.08 | $ | 0.14 | $ | 0.19 | ||||
| Distributions declared, per BUC | $ | 0.060 | $ | 0.125 | $ | 0.185 | $ | 0.250 | ||||
| (1) | This amount represents previous impairments recognized as adjustments to CAD in prior periods related to the PHC Certificates. Such adjustments were reversed in the first quarter of 2020 upon the sale of the PHC Certificates in |
| (2) | As described in Note 3 to the Partnership’s condensed 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 limited partners and BUC holders, as a class, and 25% to the General Partner. This adjustment represents the 25% of Tier 2 income due to the General Partner. For the six months ended |
CONTACT:
Chief Executive Officer
402-952-1235
Source: America First Multifamily Investors, L.P.