OMAHA, Neb., Aug. 11, 2008 (PRIME NEWSWIRE) -- On August 8, 2008, America First Tax Exempt Investors, L.P. and subsidiary (Nasdaq:ATAX) (the "Company"), reported its financial results for the quarter and six months ended June 30, 2008 on its Quarterly Report on Form 10-Q. The Company reported net income of $272,000 and net income allocated to Beneficial Unit Certificate ("BUC" or "share") holders of $1.1 million or $0.08 per share for the quarter ended June 30, 2008. For the six months ended June 30, 2008, the Company reported net income of $286,000 and net income allocated to BUC holders of $1.8 million or $0.13 per share.
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 second quarters ended June 30, 2008 and 2007, was $1.4 million, or $0.11 per share. CAD generated for the first six months was $2.9 million, or $0.22 per share, compared to approximately $2.7 million, or $0.24 per share, in the first six months of 2007.
CAD generated in the second 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 remained at an increased level throughout the first half of 2008, as a direct result of credit rating downgrades experienced by Merrill Lynch, our main credit provider, resulting in higher credit facility costs which were passed on to the Company. As previously reported, the Company has entered into a new credit facility with Bank of America to replace the Merrill Lynch credit facility. This new credit facility is expected to have a positive impact on the Company's future financial results and, as a result, the Company intends to maintain its current annual distribution rate of $0.54 per share.
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 over 90 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 quarter and six months ended June 30, 2008 and 2007.
For the For the For the For the
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Net income $ 272,217 $ 761,938 $ 285,619 $ 1,700,715
Net loss related to
VIEs and eliminat-
ions due to cons-
olidation 861,654 875,200 1,514,437 1,191,084
----------- ----------- ----------- -----------
Income before impact
of VIE consolid-
ation 1,133,871 1,637,138 1,800,056 2,891,799
Change in fair value
of derivatives and
interest rate cap
amortization (144,863) (149,839) 38,328 (117,886)
Tier 2 Income
distributable to
the General
Partner (13,796) (57,830) (13,796) (57,830)
Depreciation and
amortization expense
(Partnership only) 468,201 6,657 1,098,399 13,315
----------- ----------- ----------- -----------
CAD $ 1,443,413 $ 1,436,126 $ 2,922,987 $ 2,729,398
=========== =========== =========== ===========
For the For the For the For the
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
CAD $ 1,443,413 $ 1,436,126 $ 2,922,987 $ 2,729,398
----------- ----------- ----------- -----------
Contingent interest 55,186 231,319 55,186 231,319
----------- ----------- ----------- -----------
CAD excluding
contingent
interest $ 1,388,227 $ 1,204,807 $ 2,867,801 $ 2,498,079
=========== =========== =========== ===========
Weighted average
number of units
outstanding,
basic and diluted 13,512,928 13,050,565 13,512,928 11,453,121
Net income, basic
and diluted,
per unit $ 0.08 $ 0.12 $ 0.13 $ 0.25
=========== =========== =========== ===========
Total CAD per unit $ 0.11 $ 0.11 $ 0.22 $ 0.24
CAD from contingent
interest,
per unit $ 0.01 $ 0.02 $ 0.01 $ 0.02
----------- ----------- ----------- -----------
CAD excluding
contingent
interest,
per unit $ 0.10 $ 0.09 $ 0.21 $ 0.22
----------- ----------- ----------- -----------
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.ataxfund.com.
The America First Tax Exempt Investors, L.P. is available at http://www.primenewswire.com/newsroom/prs/?pkgid=5190
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.