Andy Grier - Fund Analyst Chad Daffer - Fund Manager Craig S. Allen - Chief Financial Officer.

Ronald Blaine - ValueForm David G. Rothchild - Raymond James.

At this time, I would like to welcome everyone to the America First Multifamily Investors, L.P ticker symbol ATAX Second Quarter 2015 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode [Operator Instructions] At this time, I would like to turn the conference call over to Andy Grier from the company..

Thank you. Welcome to the ATAX second quarter 2015 earnings conference call. During the course of this conference call, comments we make regarding ATAX which are not historical facts are forward looking statements are subject to risks and uncertainties that could cause the actual feature events or results to differ materially from these statements.

Such forward looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, forward looking statements can be identified by use of words like may, should, expect, plan, intend, and other similar terms. Your are cautioned that these forward-looking statements speak only as of today’s date.

Changes in economic business competitive, regulatory and other factors could cause our actual results to differ materially from those expressed, implied by the projections or forward looking statements made today.

For more details, information about these factors and other risks that may impact our business, please review the periodic reports and other documents filed from time-to-time by ATAX with the Securities and Exchange Commission.

Our internal projections and beliefs on which we base our expectations may change, but we will not necessarily inform you if they do. Today’s discussion will include non-GAAP measures and will be explained during this call.

First Chad Daffer, Fund Manager of our America First Multifamily Investors, L.P will give you an overview of ATAX’s strategic position and achievements, followed by Craig Allen, ATAX’s Chief Financial Officer, will provide an outline of the financial results. Then we’ll open the call up for question-and-answer session.

We would like to indicate that ATAX’s operating under the SEC Regulation FD and encourage you take full advantage of the question-and-session. Thank you for your participation and interest in ATAX. I will now pass the call to our Fund Manger, Chad Daffer..

Thank you, Andy. I would like to welcome everyone to our second quarter 2015 conference call. We believe this is another opportunity for us to communicate to you how we perform as a company. I wanted to begin by reviewing some of the highlights ATAX has reported during the second quarter of 2015. In May of 2015, we sold the Colonial Apartments.

We acquired the Colonial as an exceptional values; we were able to do a moderate rehab on the property, which enhanced the operations. During the first quarter of 2015, we accessed the market value determined as highest and best use was to sell the property.

In April 2015, we were able to sell the property for approximately $10.7 million, which resulted in a gain of approximately $3.4 million. The proceeds from this sale will be reinvested in the normal course of business.

I would like to spend some time to update you on the operations and financial results of individual residential properties securitized in the mortgage revenue bonds, and a multifamily properties in which it holds ownership.

Our total stabilized properties increased to 9,595 units at June 30, 2015 in addition with total stabilized units represented 72.5% of the portfolio as of June 30, 2015 compared to 58.2% as of December 31, 2014. In addition, we continue to be encouraged by our 92.6% [physical] (Ph) occupancy rate for a stabilized portfolios as of June 30, 2015.

There were a few events that occurred subsequent to the June 30, 2015 that was significant to ATAX and its operations. On July 10, 2015, ATAX closed on its third Freddie Mac Tax-Exempt Bond Securitization, long-term debt financing facility through the securitization of nine mortgage revenue bonds with a par value of approximately $105 million.

The TEBS financing facility has an initial cost of borrowing equal to approximately 2%. ATAX received net proceeds of approximately $82 million from the TEBS facility and utilized approximately $37.4 million of the proceeds to pay the entire balance previously drawn on the unsecured line of credit.

The remainder of the proceeds will be used in about 2015 to fund its investment pipeline. Another subsequent event of importance approved 2015 when ATAX executed multiple tender option bond trusts structured with the international investment bank to restructure eight of its existing TOB trust structures.

These restructurings were necessarily due to certain restriction impost by the Volcker Rule; the restructure increased ATAX’s total borrowings of approximately $12.2 million and extended the maturity dates to October 16, through July 2019. In addition, the interest rates were fixed for approximately 2.8% through 4.5%.

The final subsequent event of note was the completion of ATAX’s proxy, consent solicitation on July 24 of 2015. Craig will discuss this in more detail, but it’s sufficed to say that four vote on each of the eight proposals contained in the consent solicitation will allow ATAX to continue to focus on enhancements of value to our unit holders.

I would like to conclude my company overview by talking about our investment pipeline. We continue to build a robust pipeline of potential investment opportunities in our core business. We look forward to utilizing this pipeline to continue to focus on providing value to our unit holders by investing in multifamily properties and other investments.

I look forward to sharing our progress with you in the coming quarters. And at this time, I would like to turn it over to Craig Allen for a financial review..

Thank you, Chad. Good afternoon, to all of our unit holders and analysts that are listening to our second quarter 2015 conference call today.

I want to start by giving you a quick overview of our balance sheet, then present to you our statement of operations, discuss the results of our cash available for distribution or our CAD and then I will conclude my comments by discussing ATAX’s recently issued proxy consent solicitation. First to condensed consolidated balance sheet.

At June 30, 2015, our total assets were $780 million compared to $744 million at December 31, 2014. Our cash and cash equivalents decreased to $2.6 million at June 30, 2015, which was a decrease from the $49.2 million at December 31, 2014.

Year-to-date 2015 ATAX is acquired 10 mortgage revenue bonds totaling approximately $132 million of which seven mortgage revenue bonds in the amount of $78.5 million were acquired in the second quarter of 2015. These investments are secured by 1,715 units located on multifamily residential properties in Texas, New Mexico and California.

In addition, in April 2015, ATAX completed the sale of the Colonial and MF property for $10.7 million in recognized a gain of approximately $3.4 million. This gain is considered to be two-tier income.

To fund this investments activity in 2015, ATAX has utilized its unrestricted cash, proceeds from the sale of the Colonial MF property, we've drawn down approximately $37.4 million on our $50 million unsecured line of credit and we’ve executed four new tender option bond or TOB bond programs borrowing approximately $48.3 million.

On June 30, 2015, the overall leverage constraint of the partnership which is defined, as the total outstanding debt divided by the total partnership assets using the par value of the mortgage revenue bonds and the MF properties at cost, was approximately 62% compared to approximately 59% at December 31, 2014.

ATAX continues to focus its efforts on continuing to leverage its investments in a manner that will further enhance the value to its unit holders. As we discussed in our first quarter of 2015 earnings call, on May 19 of 2015 ATAX closed on its unsecured line of credit of up to $50 million with its Lead Participant, Bankers Trust Company.

This unsecured line of credit will provide ATAX with another funding option that will allow us to continue our efforts to increase the overall leverage by investing core multi-family and other - by investing in core multi-family or other investments.

During the three months ended, June 30, 2015 ATAX drew approximately $37.4 million on this unsecured line of credit to finance the acquisition of mortgage revenue bonds. In July 2015, the $37.4 million outstanding was paid in full from the proceeds of the TEBS financing facility discussed earlier by Chad.

In April 2015, ATAX entered into brokerage contracts to sell its properties formally reported as consolidated VIEs. As a result, these properties meet the criteria for discontinued operations and are presented and classified as such in ATAX’s condensed consolidated financial statements for all periods presented.

Next, I would like to present you an overview of the results of our statement of operations for the quarters ended June 30, 2015 and 2014 and the six months June 30, 2015 and 2014.

Property revenues increased approximately $952,000 for the three months ended June 30, 2015 compared to the same period in 2014 and increased approximately $2.1 million for the six months ended June 30, 2015 compared to the same period in 2014.

The increase of approximately $952,000 for the three months ended, June 30, 2015 and the increase of approximately $2.1 million for the six months ended June 30, 2015 was due to the completion and the lease up of The 50/50 property in August of 2014.

Investment income increased by approximately $3.1 million for the three months ended June 30, 2015 compared to the same period in 2014 and increased by approximately $4.9 million for the six months ended June 30, 2015 compared to the same period in 2014.

The increase of approximately $3.1 million for the three months ended June 30, 2015 was predominantly due to a $2.6 million increase in recurring investment income resulting from an increase of approximately $59 million in the net par value of the investment portfolio.

The increase of approximately $4.9 million for the six months ended June 30, 2015 was predominantly due to a $4.7 million increase in recurring investment income resulting from an increase of approximately $183 million in the net par value in the investment portfolio.

During the three months ended, June 30, 2015 the sale of an MF Property was realized as the Colonial was sold at a gain of approximately $3.4 million. No gain on sale of an MF Property was reported in the first six months of 2014.

During the three months ended June 30, 2014, the gain on the sale of the Autumn Pines mortgage revenue bond was recognized and accounted for the $850,000 gain reported. No gain on sale of mortgage revenue bonds were reported for the quarter ended, June 30, 2015.

During the six months ended June 30, 2014 the gain on the sale of the Autumn Pines and the Lost Creek mortgage revenue bonds was recognized and accounted for the $3.4 million gain reported. No gain on sale of a mortgage revenue bond was reported for the six months ended June 30, 2015.

Interest expense increased approximately $649,000 for the three months ended June 30, 2015 compared to the same period in 2014 and increased approximately $2.5 million for the six months ended June 30, 2015 compared to the same period in 2014.

The increase of approximately $649,000 in the three months ended June 30, 2015 was due to an increase of approximately $141 million in the average debt outstanding and an increase in the average cost of borrowing to 2.8% from 2.4% for the three months ended June 30, 2014.

Offsetting this increase was a decrease of approximately $622,000 due to the change in the mark-to-market adjustment of ATAX’s derivatives.

The increase of approximately $2.5 million for the six months ended June 30, 2015 was due to an increase of approximately $140 million in the average debt outstanding and an increase in the average cost of borrowings to 2.8% from 2.5% for the six months ended June 30, 2014.

In addition, there was an increase of approximately $102,000 due to the change in the mark-to-market adjustment of ATAX’s derivatives.

General and administrative expenses increased approximately $628,000 for the three months ended June 30, 2015 compared to the same period in 2014 and increased approximately $1.2 million for the six months ended June 30, 2015 compared to the same period in 2014.

The increase for both periods was the result of fees paid to AFCA 2, ATAX’s general partner for the acquisition of mortgage revenue bonds by ATAX in addition to an increase in consulting fees, legal fees and real estate tax, taxes paid through efforts to support the growth in ATAX’s core business.

Next, I would like to spend a few moments talking to you about the result of ATAX’s CAD or cash available for distribution. For the quarter ended June 30, 2015 and 2014 respectively, ATAX reported $0.16 and $0.09 respectively of CAD per unit. For the six months ended June 30, 2015 and 2014, ATAX reported $0.25 and $0.21 respectively.

The non-recurring items in CAD for 2015 were approximately $0.068, which included approximately $0.043 of CAD per unit from the sale of the Colonial MF Property.

An important item of note relating to our CAD for the first six months ended June 30, 2015, ATAX’s realized CAD of $0.25 per unit equaled to cash distribution to its unit holders of $0.25 per unit. Lastly, on July 24, 2015, ATAX filed a definitive proxy consent solicitation with the Securities and Exchange Commission.

The consent solicitation includes eight proposals each require a vote by our unit holders.

The eight proposals include proposals 1A through 1C, which will provide the partnership with greater operational flexibility, proposals 1D and 1E, which will provide the partnership with greater operational sustainability, proposal 1F, which will protect the partnership and its unit holders from unsolicited acquisition tactics, proposal 1G, which clarifies operational and related mechanical matters of the partnership and proposal 2, which asks the unit holders to approve the ATAX 2015 equity incentive plan.

Unit holders of record as of the close of business on July 17, 2015 are entitled to vote on each of these proposals and the consent solicitation will expire at 11.59 PM Eastern daylight time on September 8, 2015.

The board of managers of Burlington Capital, The General Partner of the General Partner recommends that unit holders vote for all, the all of the eight proposals we have discussed. This is an important step in moving ATAX forward and will allow it to continue to focus on the enhancement of value to our unit holders.

ATAX is focused on its core business of multi-family and other investments as a means to enhance the CAD during 2015.

The use of the $50 million unsecured line of credit, the TEBS Financing facility and the TEBS Financing facilities will provide ATAX with sources of funds to facilitate its investment growth rather than utilizing the equity markets as a primary source of funding.

At the appropriate time, ATAX will consider returning to the equity market as a means to broaden its investor base and provide a more permanent form of capital to our company. At this time, I would like to open it up to questions..

Thank you. [Operator Instructions]. And our first question comes from the line of Ronald Blaine from ValueForm. Your line is open. Please go ahead..

Is this Craig?.

Yes, Craig is here with Chad..

Okay. And Chad, you’ve spoken with Allen our Advisor. Craig, I’m with 1000 member investment group called ValueForm and we have lot of fund managers and mostly individual people.

Have you ever thought about or is it possible to consider about paying monthly instead of quarterly, it’s two quick questions this is number one, instead of quarterly a lot of income investors prefer that and is holding a lot of folks back from invest I know it will be several million dollars more coming into the fund but I pull them out to ask that question, I could feel less personally but I know lot of folks really interested in that..

Yes. In response to your question that is not something we’ve contemplated, I mean it’s definitely something that we would consider internally, but it’s not something we had contemplated..

Question number two, I have personally seen two of your properties one in Gainesville, Florida and one in Daytona could they close by to where we live. Of all the properties you have, how many are considered low income.

What’s your percentage of that?.

I think the discussion and definition of low income I think some of it probably need to clarify. I think low income would be folks would be living in the properties under what they call it housing assistance program contract..

Right..

We have a very few of the properties that have what they call a half contract to provide subsidiary or very low-income residents. The majority of our housing units that appear in the ATAX portfolio are what we refer to as mix income or workforce housing where they would pay affordable rents as it is defined under Section 42 of the IRS code.

There are certain metrics that are defined there as a percent of yearly meeting income for workforce or mixed-use housing and I think the majority of our units would qualify in that subset, I’m trying to think rather top of my head, there’s probably two or three properties in the total right now that have ongoing half contracts on them but the majority of our units would be workforce next year’s reserve..

Interesting. Okay. Thank you.

Do I understand it for the first half this year, the first six months you have covered your distribution of $0.25, correct?.

That’s correct. Year-to-date through 2015 first quarter and second quarter we’ve made the $0.25 distribution and earn that through those two quarters..

Could you give any guidance, what you think the second half will be?.

I think if you take a look at our cash position and if you breakdown between recurring and non-recurring income and take a look at after we would become fully invested, you will have to make two assumptions, one when will the money go to work and two what net spreads will that money go to work at and then you can draw your own conclusion and estimates about how we are going to perform in the third and fourth quarter and the balance of 2016.

I think internally, we’re very positive on where we’re at as far as non-recurring income and recurring income going forward..

Yes. I think to expand upon that, I think we remain focused on trying to replicate the results of the first six months going forward..

Well done. Good job, gentlemen. Thank you..

Thank you, sir..

Thank you..

[Operator Instructions] Our next question is from David Rothchild from Raymond James. Your line is open. Please go ahead..

Thank you. Just a couple of questions.

On your distribution, what percentage of that is considered tax free for Federal Tax purposes?.

Yes. As of December 31 of last year, approximately 90% to 92% was considered to be predominantly federally tax-free..

Okay. Thank you.

On the CAD, you said you covered the distribution but that’s with including some capital gain of the sales of these properties, right?.

That is exactly right.

We look at in terms of recurring and non-recurring revenues, we focused on the recurring and that’s the predictability of coupons coming off the portfolios, as we break down between those two, those two line items there is $0.10 approximately of recurring and $0.06 of non-recurring and if you take a look at the cash position that we have as of the end of the second quarter, you can draw your own conclusions on when and what net spreads, we feel pretty strongly about our position going forward or continuing the performance from the first two quarters of 2015..

Yes.

It’d be nice if the dividend or the distribution was covered with the I guess would say the recurring stuff is opposed to the one-time type of thing?.

Recur ..

Yes.

The other thing I just want to make a commentary, I know your public release is, it sure be nice if you did more stuff with per share or per unit stuff and you have to think and calculate all these things out to what did you really earn and seen lot of your reports today see always $5 million, $8 million of that and you have to do all match yourself just a commentary it will be little more user friendly pressure to retail folks out there?.

But you would like to see it as the - both for recurring and non-recurring sir..

I would like to see everything on our per unit basis as opposed to $5 million of this and $8 million of that..

Yes, we would be happy to take a look at that in our next filing and see how we can expand the disclosure..

Thank you..

You’re welcome. Thank you. End of Q&A.

Thank you. And at this time, I’m showing no further questions. On behalf of ATAX, I would like to thank you for attending our second quarter 2015 earnings call. We appreciate your interest in our company..