America First Tax Exempt Investors L.P. Reports First Quarter Financial Results
13 5월 2008 - 5:15AM
Business Wire
On May 9, 2008, America First Tax Exempt Investors, L.P. and
subsidiary (NASDAQ: ATAXZ) (the �Company�), reported its financial
results for the quarter ended March 31, 2008 on its Quarterly
Report on Form 10-Q. The Company reported net income of $13,000 and
net income allocated to Beneficial Unit Certificate (�BUC� or
�share�) holders of $660,000 or $0.05 per share for the quarter
ended March 31, 2008. As discussed further below, management
utilizes a calculation of Cash Available for Distribution (�CAD�)
as a means to determine the Company�s ability to make distributions
to BUC holders. We believe that CAD provides relevant information
about the Company�s operations and is necessary along with net
income for an understanding of the Company�s operating results. CAD
generated during the quarter was $1.5 million, or $0.11 per share.
This compares to CAD generated in the first quarter of 2007 of
approximately $1.3 million, or $0.13 per share, and CAD generated
in the fourth quarter of 2007 of approximately $1.4 million, or
$0.11 per share. CAD generated in the first quarter fell short of
the quarterly distribution of $0.135 per share due primarily to
higher borrowing costs. Our borrowing costs increased during the
fourth quarter of 2007, and remain at an increased level, as a
direct result of recent credit losses and rating downgrades
experienced by the our main credit provider resulting in higher
credit facility costs which are passed on to the Company. As of
March 31, 2008, the total outstanding debt subject to these
increased borrowing costs was approximately $71.4 million.
Alternative financing vehicles are currently being explored in
order to reduce interest expense and provide access to new leverage
financing on reasonable terms. We have not entered into any
agreements with respect to any such alternative debt financing and
there can be no assurances that we will be able to do so.
Notwithstanding the current issues being experienced by the Company
in its variable rate borrowing program, we believe it is prudent to
continue to pursue our repositioning and growth strategy, the
principal objective of which is to increase CAD through the
improvement of the quality and performance of its revenue bond
portfolio thereby creating value for investors. To this end, we
acquired two new Multifamily Housing Revenue Bond investments in
2008 totaling approximately $12.4 million in par value. We also
took advantage of an opportunity to sell two revenue bond
investments, one in March and one in April. Both sales were
completed at, or slightly above, the bond par values and resulted
in sale proceeds of approximately $14.9 million. A portion of the
sale proceeds was used in April to pay down $6.5 million of
outstanding debt thereby reducing our exposure to increased
borrowing costs. Remaining sale proceeds may be used for the
further reduction of outstanding debt or for general business
purposes. The well publicized turmoil within the credit markets has
had a significant impact on many entities. The Company continues to
stress the following commentary on our business: The Company is in
the business of investing in tax-exempt mortgage revenue bonds
secured by first mortgages on multifamily housing projects
throughout the United States which it holds as long-term
investments. The Company is not in the business of making mortgage
loans secured by mortgages on single-family residential properties,
including those categorized as subprime, and does not invest in
securities backed by such mortgages. The Company continues to be
pleased with the performance of its bond portfolio and the debt
service coverage and loan to value aspects of the portfolio. The
Company believes continued subprime and single family mortgage
defaults may help its business by creating additional demand for
affordable rental housing. It also feels the current tightening of
credit may create opportunities for additional investments
consistent with the Company�s investment strategy. While the
current environment may create new investing opportunities it has
also created new challenges for the Company in the form of
increased borrowing costs as discussed above. While the Company
believes that issues currently being experienced in its credit
facilities are short-term in nature and likely to be resolved there
can be no assurance that the increased cost of borrowing will not
continue for an extended period of time. If we are unable to obtain
alternative financing and the current increased borrowing costs
continue the annual distribution may need to be reduced. The
Company and its predecessor partnership have been continuously
operating this business since 1985 and have consistently
distributed tax-exempt income to our investors for 91 consecutive
quarters. In summary, the Company remains committed to executing
its business plan and generating steady, predictable distributions
of predominantly tax exempt income to its investors. Cash Available
for Distribution (�CAD�) Management utilizes a calculation of Cash
Available for Distribution (�CAD�) as a means to determine the
Partnership�s ability to make distributions to BUC holders. The
General Partner believes that CAD provides relevant information
about the Partnership�s operations and is necessary along with net
income for an understanding of the Partnership�s operating results.
To calculate CAD, amortization expense related to debt financing
costs and bond reissuance costs, Tier 2 income due to the General
Partner as defined in the Partnership�s Agreement of Limited
Partnership, interest rate derivative expense or income, provision
for loan losses, impairments on bonds and losses related to
variable interest entities (�VIE�s�) including depreciation expense
are added back to the Company�s net income (loss) as computed in
accordance with accounting principles generally accepted in the
United States of America (�GAAP�). There is no generally accepted
methodology for computing CAD, and the Company�s computation of CAD
may not be comparable to CAD reported by other companies. Although
the Company considers CAD to be a useful measure of its operating
performance, CAD should not be considered as an alternative to net
income or net cash flows from operating activities which are
calculated in accordance with GAAP. The following tables show the
calculation of CAD for the quarters ended March 31, 2008 and 2007.
� For the Three � For the Three Months Ended Months Ended March 31,
2008 March 31, 2007 � Net income $ 13,402 $ 938,777 Net loss
related to VIEs and eliminations due to consolidation � 652,783 �
315,884 Net income before impact of VIE consolidation 666,185
1,254,661 Change in fair value of derivatives and interest rate cap
amortization 183,191 31,953 Depreciation and amortization expense
(Partnership only) � 630,198 � 6,658 CAD $ 1,479,574 $ 1,293,272 �
� For the Three For the Three Months Ended Months Ended March 31,
2008 March 31, 2007 CAD $ 1,479,574 $ 1,293,272 � Weighted average
number of units outstanding, basic and diluted 13,512,928 9,837,928
� Net income, basic and diluted, per unit $ 0.05 $ 0.13 CAD per
unit $ 0.11 $ 0.13 About America First Tax Exempt Investors, L.P.
America First Tax Exempt Investors, L.P. was formed for the primary
purpose of acquiring, holding, selling and otherwise dealing with a
portfolio of federally tax-exempt mortgage revenue bonds which have
been issued to provide construction and/or permanent financing of
multifamily residential apartments. The Company is pursuing a
business strategy of acquiring additional tax-exempt mortgage
revenue bonds on a leveraged basis in order to: (i) increase the
amount of tax-exempt interest available for distribution to its
investors; (ii) reduce risk through asset diversification and
interest rate hedging; and (iii) achieve economies of scale. The
Company seeks to achieve its investment growth strategy by
investing in additional tax-exempt mortgage revenue bonds and
related investments, taking advantage of attractive financing
structures available in the tax-exempt securities market and
entering into interest rate risk management instruments. America
First Tax Exempt Investors, L.P. press releases are available on
the World Wide Web at www.ataxz.com. Information contained in this
Press Release contains �forward-looking statements� relating to,
without limitation, future performance, plans and objectives of
management for future operations and projections of revenue and
other financial items, which can be identified by the use of
forward-looking terminology such as �may,� �will,� �should,�
�expect,� �anticipate,� �estimate� or �continue� or the negative
thereof or other variations thereon or comparable terminology.
Several factors with respect to such forward-looking statements,
including certain risks and uncertainties, could cause actual
results to differ materially from those in such forward-looking
statements. Many of these risks and uncertainties are described in
filings made by the Company with the Securities and Exchange
Commission, including its annual reports on Form 10-K, its
quarterly reports on Form 10-Q and its current reports on Form 8-K.
America First Tax Exempt (NASDAQ:ATAXZ)
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