FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1999 or
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 000-24843
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
(Exact name of registrant as specified in its
Agreement of Limited Partnership)
Delaware 47-0810385
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1004 Farnam Street, Omaha, Nebraska 68102
(Address of principal executive offices) (Zip Code)
(402) 444-1630
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by the Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
<PAGE> -i-
Part I. Financial Information
Item 1. Financial Statements
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1999 Dec. 31, 1998
-------------- --------------
<S> <C> <C>
Assets
Cash and temporary cash investments, at cost which
approximates market value (Note 4) $ 625,756 $ 920,801
Investment in tax-exempt mortgage bonds, at estimated fair value (Note 5) 71,720,000 71,720,000
Interest receivable 567,178 503,234
Other assets 344,125 277,890
-------------- --------------
$ 73,257,059 $ 73,421,925
============== ==============
Liabilities and Partners' Capital
Liabilities
Accounts payable (Note 6) $ 253,025 $ 276,184
Distribution payable (Note 3) 453,450 453,597
-------------- --------------
706,475 729,781
-------------- --------------
Partners' Capital
General Partner 4,011 5,426
Beneficial Unit Certificate Holders
($7.26 per BUC in 1999 and $7.28 in 1998) 72,546,573 72,686,718
-------------- --------------
72,550,584 72,692,144
-------------- --------------
$ 73,257,059 $ 73,421,925
============== ==============
The accompanying notes are an integral part of the combined financial statements.
</TABLE>
COMBINED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three
Months Ended For the Three
March 31, 1999 Months Ended
(combined) March 31, 1998
-------------- --------------
<S> <C> <C>
Income
Mortgage bond investment income $ 1,439,974 $ 1,584,569
Interest income on temporary cash investments 5,896 11,776
Contingent interest income (Note 5) 19,398 26,733
-------------- --------------
1,465,268 1,623,078
Expenses
General and administrative expenses (Note 6) 241,335 176,855
-------------- --------------
Net income $ 1,223,933 $ 1,446,223
============== ==============
Net income allocated to:
General Partner $ 16,895 $ 20,878
BUC Holders 1,207,038 1,425,345
-------------- --------------
$ 1,223,933 $ 1,446,223
============== ==============
Net income, basic and diluted, per BUC $ .12 $ .14
============== ==============
The accompanying notes are an integral part of the combined financial statements.
</TABLE>
<PAGE> -1-
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
STATEMENT OF PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Beneficial Unit
General Certificate
Partner Holders Total
-------------- --------------- --------------
<S> <C> <C> <C>
Partners' Capital (excluding accumulated other comprehensive income)
Balance at December 31, 1998 $ 5,426 $ 73,592,718 $ 73,598,144
Net income (combined) 16,895 1,207,038 1,223,933
Cash distributions paid or accrued (Note 3) (combined)
Income (18,310) (1,347,183) (1,365,493)
-------------- --------------- --------------
4,011 73,452,573 73,456,584
-------------- --------------- --------------
Accumulated Other Comprehensive Income
Balance at December 31, 1998 and March 31, 1999 - (906,000) (906,000)
-------------- --------------- --------------
Balance at March 31, 1999 $ 4,011 $ 72,546,573 $ 72,550,584
============== =============== ==============
The accompanying notes are an integral part of the combined financial statements.
</TABLE>
COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three
Months Ended For the Three
March 31, 1999 Months Ended
(combined) March 31, 1998
-------------- --------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 1,223,933 $ 1,446,223
Adjustments to reconcile net income to net cash
from operating activities
Increase in interest receivable (63,944) (49,763)
Decrease (increase) in other assets 66 (20,177)
Decrease in accounts payable (23,159) (80,610)
-------------- --------------
Net cash provided by operating activities 1,136,896 1,295,673
-------------- --------------
Cash flow used in investing activity
Bond issuance costs paid (66,301) -
-------------- --------------
Cash flow used in financing activity
Distributions paid (1,365,640) (1,367,271)
-------------- --------------
Net decrease in cash and temporary cash investments (295,045) (71,598)
Cash and temporary cash investments at beginning of period 920,801 1,522,893
-------------- --------------
Cash and temporary cash investments at end of period $ 625,756 $ 1,451,295
============== ==============
The accompanying notes are an integral part of the combined financial statements.
</TABLE>
Supplemental disclosure of non-cash investing activity:
During the three months ended March 31, 1999, the tax-exempt mortgage bond
secured by Shoals Crossing with a principal balance of $4,500,000 was
refinanced by its local housing finance authority. The bond held by the
Partnership was terminated and a new bond in the same principal amount was
issued to the Partnership.
Supplemental disclosure of non-cash financing activity:
In connection with the February 1, 1999, merger of the Partnership and America
First Tax Exempt Mortgage Fund Limited Partnership (the Prior Partnership)
described in Note 1 to the financial statements, unit holders of the Prior
Partnership received one Beneficial Unit Certificate (BUC) of the Partnership
for each BUC they held in the Prior Partnership as of the record date.
<PAGE> -2-
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
1. Organization
America First Tax Exempt Investors, L.P. (the New Partnership) was formed on
April 2, 1998 under the Delaware Revised Uniform Limited Partnership Act for
the purpose of acquiring, holding, operating, selling and otherwise dealing
with a portfolio of federally tax-exempt mortgage bonds which have been issued
to provide construction and/or permanent financing of multifamily residential
apartments. The New Partnership commenced operations on February 1, 1999,
when it was merged with America First Tax Exempt Mortgage Fund Limited
Partnership (the Prior Partnership). Under the terms of the merger agreement,
the New Partnership was the surviving partnership and effectively took over
the operations of the Prior Partnership as of that date. Unit holders of the
Prior Partnership received one Beneficial Unit Certificate (BUC) of the New
Partnership for each BUC they held in the Prior Partnership as of the record
date. The Prior Partnership was terminated under the provisions of the Prior
Partnership's Partnership Agreement. The New Partnership will terminate on
December 31, 2050, unless terminated earlier under the provisions of its
Partnership Agreement. The General Partner of both the Prior Partnership and
the New Partnership is America First Capital Associates Limited Partnership
Two (AFCA 2). The New Partnership and the Prior Partnership are collectively
referred to as the Partnership.
2. Summary of Significant Accounting Policies
A)Financial Statement Presentation
The accompanying 1999 financial statements include the combined accounts
of the New Partnership from February 1, 1999 (the Merger Date), through
March 31, 1999, and the accounts of the Prior Partnership from January 1,
1999 until the Merger Date. The combination of the accounts of the Prior
Partnership and the New Partnership is reflected on an "as-if" pooling
basis for a merger of entities under common control. Financial statements
for 1998 include the accounts of the Prior Partnership.
The financial statements of the Partnership are prepared without audit on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The financial statements should be read in
conjunction with the financial statements and notes thereto included in
the Prior Partnership's Annual Report on Form 10-K for the year ended
December 31, 1998 and the New Partnership's Annual Report on Form 10-K for
the year ended December 31, 1998. In the opinion of management, all
normal and recurring adjustments necessary to present fairly the financial
position at March 31, 1999, and results of operations for all periods
presented have been made.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
B)Investment in Tax-Exempt Mortgage Bonds
Investment securities are classified as held-to-maturity, available-for-
sale or trading. Investments classified as available-for-sale are reported
at fair value with any unrealized gains or losses excluded from earnings
and reflected as a separate component of partners' capital. Subsequent
increases and decreases in the net unrealized gain/loss on available-for-
sale securities are reflected as adjustments to the carrying value of the
portfolio and in other comprehensive income. The Partnership does not
have investment securities classified as held-to-maturity or trading. The
carrying value of tax-exempt mortgage bonds is periodically reviewed and
adjusted when there are significant changes in the estimated net
realizable value of the underlying collateral.
Accrual of mortgage bond investment income is excluded from income, when,
in the opinion of management, collection of related interest is doubtful.
This interest is recognized as income when it is received.
<PAGE> -3-
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
C)Income Taxes
No provision has been made for income taxes since the Beneficial Unit
Certificate (BUC) Holders are required to report their share of the
Partnership's taxable income for federal and state income tax purposes.
D)Temporary Cash Investments
Temporary cash investments are invested in federally tax-exempt securities
purchased with an original maturity of three months or less.
E)Net Income per BUC
Net income per BUC has been calculated based on the number of BUCs
outstanding (9,979,128) for all periods presented.
F)New Accounting Pronouncement
On January 1, 1999, the Partnership adopted Statement of Position 98-5,
"Reporting on the Costs of Start-up Activities" (SOP 98-5). SOP 98-5
requires costs of start-up activities and organization costs to be
expensed as incurred. The adoption of SOP 98-5 did not have an impact on
the Partnership's financial statements.
3. Partnership Income, Expenses and Cash Distributions
The Partnership Agreement contains provisions for the distribution of Net
Interest Income and Net Residual Proceeds and for the allocation of income and
expenses for tax purposes among AFCA 2 and BUC Holders.
Cash distributions included in the financial statements represent the actual
cash distributions made during each period and the cash distributions accrued
at the end of each period.
4. Partnership Reserve Account
The Partnership maintains a reserve account which totaled $732,919 at
March 31, 1999. The reserve account was established to maintain working
capital for the Partnership and is available to supplement distributions to
BUC Holders or for any other contingencies related to the ownership of the
mortgage bonds and the operation of the Partnership.
5. Investment in Tax-Exempt Mortgage Bonds
Descriptions of the tax-exempt mortgage bonds owned by the Partnership at
March 31, 1999, are as follows:
<TABLE>
Base
Number Maturity Interest
Property Name Location of Units Date Rate
- ------------------------ ----------------- -------- -------- ---------
<S> <C> <C> <C> <C>
Arama Apartments Miami, FL 293 07/01/10 8.5% (1)
Woodbridge Apts. of
Bloomington III Bloomington, IN 280 12/01/27 7.5% (2)
Shoals Crossing Atlanta, GA 176 12/01/25 7.5% (2), (3)
Ashley Pointe at
Eagle Crest Evansville, IN 150 12/01/27 7.0% (2)
Woodbridge Apts. of
Louisville II Louisville, KY 190 12/01/27 7.5% (2)
Northwoods Lake
Apartments Duluth, GA 492 09/01/25 7.5% (2)
Ashley Square Des Moines, IA 144 12/01/09 8.5% (1)
</TABLE>
(1) In addition to the base interest rates shown, the bonds bear additional
contingent interest as defined in each revenue note which, when combined with
the base interest, is limited to a cumulative, noncompounded amount not
greater than 12% per annum in the case of Arama Apartments and 16% per annum
in the case of Ashley Square. The Partnership received additional contingent
interest from Arama Apartments of $19,398 during the three months ended March
31, 1999.
<PAGE> -4-
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
(2) In addition to the base interest rates shown, the bonds bear additional
contingent interest as defined in each revenue note of up to an additional
3.5% per annum that is payable out of 50% (100% in the case of Shoals
Crossing, Ashley Pointe and Northwoods Lake Apartments) of the net cash flow
generated by the respective property.
(3) The tax-exempt bond secured by this property was reissued by the local
housing finance authority on February 25, 1999. The existing tax-exempt bond
held by the Partnership was terminated and a new bond in the same principal
amount was issued to the Partnership. The new bond provides for the payment
of base interest to the Partnership at a rate of 7.5% per annum compared to
8.5% per annum for the previous bond.
The Partnership classified its investment in tax-exempt mortgage bonds as
available-for-sale. At March 31, 1999, the total amortized cost, gross
unrealized holding losses and aggregate fair value of available-for-sale
securities were $72,626,000, $906,000 and $71,720,000 respectively.
6. Transactions with Related Parties
Substantially all of the Partnership's general and administrative expenses and
certain costs capitalized by the Partnership are paid by AFCA 2 or an
affiliate and are reimbursed by the Partnership. The capitalized costs were
incurred in connection with the reissuance of the tax-exempt bonds. The
amount of such expenses reimbursed to AFCA 2 during 1998 was $339,081. The
reimbursed expenses are presented on a cash basis and do not reflect accruals
made at quarter end.
AFCA 2 is entitled to receive an administrative fee from the Partnership equal
to 0.45% of the outstanding principal balance of any tax-exempt bond or other
mortgage investment, unless the owner of the property financed by such
tax-exempt bond or other mortgage investment or another third party is
required to pay such administrative fee. Under the terms of each of the
Partnership's existing tax-exempt mortgage bonds, the property owners are
obligated to pay the administrative fee to AFCA 2. Therefore, the Partnership
did not pay any administrative fees to AFCA 2 during the three months ended
March 31, 1999. The Partnership may become obligated to pay administrative
fees to AFCA 2 in the event it acquires additional tax-exempt bonds or other
mortgage investments and is not able to negotiate the payment of these fees by
the property owners or in the event it acquires title to any of the properties
securing its existing tax-exempt bonds by reason of foreclosure. In addition,
AFCA 2 was entitled to receive approximately $359,000 in administrative fees
from the Partnership for the year ended December 31, 1989. The payment of
these fees, which has been deferred by AFCA 2, is contingent upon, and will be
paid only out of future profits realized by the Partnership from the
disposition of any Partnership assets. This amount will be recorded as an
expense by the Partnership when it is probable that these fees will be paid.
AFCA 2 received administrative fees of $48,489 during the three months ended
March 31, 1999, from the owners of properties financed by the tax-exempt bonds
held by the Partnership. Since these administrative fees are not Partnership
expenses, they have not been reflected in the accompanying financial
statements. However, such fees are payable by the property owners prior to
the payment of any contingent interest on the tax-exempt bonds secured by
these properties.
An affiliate of AFCA 2 has been retained by the owners of Ashley Square,
Northwoods Lake Apartments, Ashley Pointe at Eagle Crest and Shoals Crossing
to provide property management services for these properties. The management
fees paid to the affiliate of AFCA 2 reflect market rates for such services in
the areas in which these properties are located and totaled $79,510 during the
three months ended March 31, 1999. These management fees are not Partnership
expenses and, accordingly, have not been reflected in the accompanying
financial statements. However, such fees are paid out of the revenues
generated by these properties prior to the payment of any interest on the
tax-exempt bonds held by the Partnership on these properties.
<PAGE> -5-
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Liquidity and Capital Resources
On February 1, 1999, America First Tax Exempt Investors, L.P. (the New
Partnership) commenced operations when it merged with America First Tax Exempt
Mortgage Fund Limited Partnership (the Prior Partnership). Under the terms of
the merger agreement, the New Partnership was the surviving partnership and
effectively took over the operations of the Prior Partnership as of that
date. Unit holders of the Prior Partnership received one Beneficial Unit
Certificate (BUC) of the New Partnership for each BUC they held in the Prior
Partnership as of the record date. The Prior Partnership was terminated under
the provisions of the Prior Partnership's Partnership Agreement. The General
Partner of both the Prior Partnership and the New Partnership is America First
Capital Associates Limited Partnership Two (AFCA 2). The New Partnership and
the Prior Partnership are collectively referred to as the Partnership.
The Partnership's primary capital resource consists of seven tax-exempt
mortgage bonds which were issued to the Partnership in order to provide
construction and/or permanent financing for the seven multifamily housing
projects listed in the following table:
<TABLE>
At March 31, 1999
----------------------------------
Number Percentage
Number of Units of Units
Property Name Location of Units Occupied Occupied
- ------------------------------------- ------------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
Woodbridge Apts. of Bloomington III Bloomington, IN 280 257 92%
Ashley Pointe at Eagle Crest Evansville, IN 150 150 100%
Woodbridge Apts. of Louisville II Louisville, KY 190 174 92%
Northwoods Lake Apartments Duluth, GA 492 481 98%
Shoals Crossing Atlanta, GA 176 166 94%
Ashley Square Des Moines, IA 144 137 95%
Arama Apartments Miami, FL 293 286 98%
-------------- -------------- --------------
1,725 1,651 96%
============== ============== ==============
</TABLE>
The aggregate carrying value of the tax-exempt bonds at March 31, 1999 was
$71,720,000. Because the sole source of funds available for the repayment of
principal of the bonds is the net proceeds from the sale or refinancing of the
financed properties, the carrying value of the bonds reflects the general
partner's current estimate of the aggregate fair market value of the financed
properties.
Each of the bonds bears interest at a fixed rate and provides for the payment
of additional contingent interest that is payable solely from available net
cash flow generated by the financed property. The principal amount of the
bonds does not amortize over its terms. However, the principal of two of the
bonds the Partnership held as of December 31, 1998, was to be repaid to the
Partnership on December 1, 1997 and the principal of one of the other bonds
was to repaid to the Partnership on July 1, 1998. Because the net sale or
refinancing proceeds from the properties is the sole source of principal
repayment and the aggregate fair value of the properties is less than the
total principal amount of the bonds, the repayment of the bonds according to
their original terms was likely to have caused a loss of capital to the
Partnership. In order to avoid this result, the Partnership elected to
continue to hold the bonds beyond their original repayment date. However, in
order to allow the bonds to continue to generate tax-exempt interest for the
Partnership, the Partnership is coordinating the reissuance of the bonds with
the local housing finance authorities at interest rates that will allow debt
service on the bonds to be paid from the net revenues projected to be
generated by the financed properties.
<PAGE> -6-
In this regard, the tax-exempt bond secured by Shoals Crossing was reissued by
the respective local housing finance authority on February 25, 1999. The
existing tax-exempt bond held by the Partnership was terminated and a new bond
in the same principal amount was issued to the Partnership. The new bond has
a term expiring on December 1, 2025, and provides for the payment of base
interest to the Partnership at a rate of 7.5% per annum and for the payment to
the Partnership of contingent interest of up to an additional 3.5% per annum
that is payable out of 100% of the net cash flow generated by the financed
property.
The Partnership expects that the remaining two tax-exempt bonds will be
reissued in a similar manner and anticipates that the base and contingent
interest rates on these reissued bonds will also be less than the current base
and contingent interest rates. As a result of the refinancing of the
tax-exempt bonds in 1998 and 1999 and the reduction in the base and contingent
interest rates, AFCA 2 anticipates that base and contingent interest earned on
the mortgage bonds in 1999 will be approximately $200,000 to $300,000 less
than that earned in 1998. In addition, the reduction in the base interest
rates will make it more likely that AFCA 2 will receive its administrative
fees from the property owners on a current basis. A reduction in the
contingent interest rates will limit the Partnership's potential
participation in future increases, if any, in the net cash flow generated by
the financed properties and in the net proceeds generated by the ultimate sale
or refinancing of these properties.
Tax-exempt interest earned on the bonds represents the Partnership's principal
source of liquidity. The Partnership also earns tax-exempt interest on
temporary investments. The Partnership's principal uses of cash are the
payment of operating expenses and distributions to BUC holders. The following
table sets forth information relating to cash distributions paid to BUC
holders for the periods shown:
<TABLE>
For the Three
Months Ended For the Three
March 31, 1999 Months Ended
(combined) March 31, 1998
-------------- --------------
<S> <C> <C>
Regular monthly distributions
Income $ .1350 $ .1350
============== ==============
Distributions
Paid out of current and prior undistributed cash flow $ .1350 $ .1350
============== ==============
</TABLE>
In addition to current interest income, the Partnership may draw on its
reserve to pay operating expenses or to supplement cash distributions to BUC
holders. As of March 31, 1999, the amount held by the Partnership in the
reserve was $717,138. During the quarter ended March 31, 1999, a net amount
of undistributed income totaling $239,125 was withdrawn from reserves. Future
distributions to BUC Holders will depend upon the amount of base and
contingent interest received on the mortgage bonds, the size of the reserves
established by the Partnership and the extent to which withdrawals are made
from reserves.
The Partnership believes that cash provided by interest income from its
tax-exempt bonds and temporary investments, supplemented, if necessary, by
withdrawals from its reserve, will be adequate to meet its projected
short-term and long-term liquidity requirements, including the payments of
distributions to BUC Holders. Under the terms of the Partnership Agreement,
the Partnership has the authority to enter into short- and long-term debt
financing arrangements; however, the Partnership currently does not anticipate
entering into such arrangements. The Partnership is authorized to issue
additional BUCs to meet short-term and long-term liquidity requirements.
<PAGE> -7-
Asset Quality
It is the policy of the Partnership to make a periodic review of the real
estate collateralizing the Partnership's mortgage bonds in order to adjust,
when necessary, the carrying value of the mortgage bonds. Mortgage bonds are
classified as available-for-sale and are therefore carried at the estimated
fair value of the underlying collateral. The fair value of the underlying
collateral is based on management's best estimate of the net realizable value
of the properties; however the ultimate realized values may vary from these
estimates. Adjustments are made to the carrying value when there are
significant changes in the estimated net realizable value of the underlying
collateral. Internal property valuations and reviews performed during the
three months ended March 31, 1999, indicated that the mortgage bonds recorded
on the balance sheet at March 31, 1999, required no adjustments to their
current carrying amounts.
The overall status of the Partnership's mortgage bonds has generally remained
constant since December 31, 1998.
Results of Operations
The table below compares the results of operations for each period shown.
<TABLE>
For the Three
Months Ended For the Three Increase
March 31, 1999 Months Ended (Decrease)
(combined) March 31, 1998 From 1998
-------------- -------------- --------------
<S> <C> <C> <C>
Mortgage bond investment income $ 1,439,974 $ 1,584,569 $ (144,595)
Interest income on temporary cash investments 5,896 11,776 (5,880)
Contingent interest income 19,398 26,733 (7,335)
-------------- -------------- --------------
1,465,268 1,623,078 (157,810)
General and administrative expenses 241,335 176,855 64,480
-------------- -------------- --------------
Net income $ 1,223,933 $ 1,446,223 $ (222,290)
============== ============== ==============
</TABLE>
Mortgage bond investment income for the three months ended March 31, 1999,
decreased $144,595 compared to the same period in 1998. The tax-exempt
mortgage bonds secured by Woodbridge Apartments of Louisville II, Ashley
Pointe at Eagle Crest and Woodbridge Apartments of Bloomington III generated
approximately $90,000 less in mortgage bond investment income for the three
months ended March 31, 1999, compared to the same period in 1998.
Approximately $75,000 of this $90,000 decrease is attributable to the
reduction in the base interest rates on such bonds which resulted from the
1998 bond refinancings with the remaining $15,000 attributable to the
Partnership receiving less past due interest on the prior bonds in 1999 than
in 1998. Also contributing to the decrease for the three months was a decrease
in mortgage bond investment income from the tax-exempt mortgage bonds secured
by Ashley Square and Shoals Crossing due to decreases in net cash flow
generated by these properties attributable to increases in property
improvements. The decreases of $90,000 and $89,000 were partially offset by a
$34,000 increase in income on the tax-exempt mortgage bond secured by
Northwoods Lake Apartments as the Partnership received past due interest on
the prior bonds in 1999.
Interest income on temporary cash investments decreased for the three months
ended March 31, 1999, compared to the three months ended March 31, 1998 due
primarily to withdrawals made from the Partnership's reserve in 1998 and 1999
to supplement distributions to BUC holders.
The decrease in contingent interest income for the three months ended March
31, 1999, compared to the same period in 1998 is attributable to a slight
reduction in net operating income generated by the Arama Apartments.
General and administrative expenses increased $64,480 for the three months
ended March 31, 1999, compared to the same period in 1998. Approximately
$39,000 of such increase is attributable to an increase in salaries and
related expenses and approximately $25,000 is attributable to overall
increases in general and administrative expenses.
<PAGE> -8-
This report contains forward looking statements that reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, the Partnership's performance and financial results. All
statements, trend analysis and other information concerning possible or
assumed future results of operations of the Partnership and the real estate
investments it has made (including, but not limited to, the information
contained in Management's Discussion and Analysis of Financial Condition and
Results of Operations"), constitute forward-looking statements. BUC holders
and others should understand that these forward looking statements are subject
to numerous risks and uncertainties and a number of factors could affect the
future results of the Partnership and could cause those results to differ
materially from those expressed in the forward looking statements contained
herein.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes in the Partnerships market risk since
December 31, 1998.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of this report:
3. Exhibits. The following exhibits were filed as required
by Item 14(c) of this report. Exhibit numbers refer to the
paragraph numbers under Item 601 of Regulation S-K:
3. Articles of Incorporation and Bylaws of America First
Fiduciary Corporation Number Five (incorporated herein by
reference to Form S-11 Registration Statement filed August 30,
1985, with the Securities and Exchange Commission by America
First Tax Exempt Mortgage Fund Limited Partnership (Commission
File No. 2-99997)).
4(a) Form of Certificate of Beneficial Unit Certificate
incorporated by reference to Exhibit 4.1 to Registration
Statement on Form S-4 (No. 333-50513) filed by the Registrant
on April 17, 1998.
4(b) Agreement of Limited Partnership of the Registrant
(incorporated by reference to Form 10-K dated December 31, 1998
filed pursuant to Section 13 or 15(d) of the Securities Act of
1934 by America First Tax Exempt Investors, L.P. (commission
file No. 000-24843)).
4(c) Amended Agreement of Merger, dated June 12, 1998,
between the Registrant and America First Tax Exempt Mortgage
Fund Limited Partnership (incorporated by reference to Exhibit
4.3 to Amendment No. 3 to Registration Statement on Form S-4
(No. 333-50513) filed by the Registrant on September 14, 1998.
27. Financial Data Schedule.
(b) The Registrant filed the following reports on Form 8-K during
the period covered by this report.
Date of Report Item Reported Financial Statements Filed
---------------- ---------------------- --------------------------
February 1, 1999 Item 2 Acquisition Yes
or Disposition of Assets
Item 7 Financial
Statements and Exhibits
<PAGE> -9-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: May 12, 1999 AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
By America First Capital
Associates Limited
Partnership Two, General
Partner of the Registrant
By America First Companies L.L.C.,
General Partner of America First
Capital Associates Limited
Partnership Two
By /s/ Michael Thesing
Michael Thesing
Vice President
and Principal Financial Officer
<PAGE> -10-
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0
0
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