MUNICIPAL MORTGAGE & EQUITY, LLC
SUPPLEMENTAL INFORMATION
QUARTER ENDED SEPTEMBER 30, 2002
TABLE OF CONTENTS
CAD Statement for the three and nine months ended
September 30, 2002 ........................................... Page 3
Variance Analysis for CAD ...................................... Page 4
Rolling Five Quarters - CAD .................................... Page 5
GAAP Income Statement for the three and nine months
ended September 30, 2002 ..................................... Page 6
Variance Analysis for GAAP ..................................... Page 7
Rolling Five Quarters - GAAP ................................... Page 8
Calculation of Diluted Earnings Per Share ...................... Page 9
CAD to GAAP reconciliation for the three and nine
months ended September 30, 2002 .............................. Page 10
Condensed Balance Sheets and Book Value Per Share .............. Page 12
Leverage at September 30, 2002 ................................. Page 13
Summary of 3rd Quarter 2002 Investment Activity ................ Page 14
Participating Portfolio Property Net Operating Income Trends ... Page 15
Units and Average Rents for Bond Portfolio ..................... Page 16
MUNICIPAL MORTGAGE & EQUITY, LLC
CALCULATION OF CASH AVAILABLE FOR DISTRIBUTION
(in thousands, except share and per share data)
(unaudited)
For the three months ended For the nine months ended
September 30, September 30,
----------------------------- -------------------------------
2002 2001 2002 2001
-------------- ------------- ---------------- -------------
SOURCES OF CASH:
Interest on bonds, other bond related investments, other
notes and loans ............................................... $ 23,331 $ 21,263 $ 69,671 $ 63,223
Interest on short-term investments .............................. 260 237 991 840
Loan servicing fees ............................................. 1,544 1,659 5,112 5,020
Loan origination and brokerage fees ............................. 2,973 4,247 11,484 10,980
Other income .................................................... 3,607 2,275 8,388 6,459
Net gain (loss) on sales ........................................ 207 (187) 349 (177)
------------- ------------- ---------------- -------------
TOTAL SOURCES OF CASH ........................................... 31,922 29,494 95,995 86,345
-------------- ------------- ---------------- -------------
EXPENSES:
Salaries and benefits ........................................... 5,446 5,527 16,203 15,002
Professional fees ............................................... 467 1,114 2,076 2,718
Other operating expenses ........................................ 2,173 1,893 6,591 5,579
Interest expense ................................................ 8,134 7,351 24,324 22,550
Income taxes .................................................... (173) 301 586 805
-------------- ------------- ---------------- -------------
TOTAL EXPENSES .................................................. 16,047 16,186 49,780 46,654
-------------- ------------- ---------------- -------------
CASH AVAILABLE FOR DISTRIBUTION ................................. 15,875 13,308 46,215 39,691
-------------- ------------- ---------------- -------------
LESS:
Cash allocable to preferred shareholders and term
growth shares, including preferred shareholders
in a subsidiary company ....................................... 2,994 2,962 9,136 9,127
-------------- ------------- ---------------- -------------
CASH AVAILABLE FOR DISTRIBUTION TO COMMON SHARES ............... $ 12,881 $ 10,346 $ 37,079 $ 30,564
============== ============= ================ =============
CAD PER COMMON SHARE ............................................ $ 0.51 $ 0.48 $ 1.47 $ 1.42
============== ============= ================ =============
CALCULATION OF CASH DISTRIBUTION:
CASH AVAILABLE FOR DISTRIBUTION
TO COMMON SHARES ............................................ $ 12,881 $ 10,346 $ 37,079 $ 30,564
============== ============= ================ =============
ACTUAL AMOUNT PAID .............................................. $ 11,154 $ 9,296 $ 33,194 $ 27,652
============== ============= ================ =============
PAYOUT RATIO .................................................... 86.6% 89.9% 89.5% 90.5%
============== ============= ================ =============
COMMON SHARES OUTSTANDING ....................................... 25,349,585 21,618,144
============== =============
CASH DISTRIBUTION PER COMMON SHARE .............................. $ 0.4400 $ 0.4300 $ 1.3125 $ 1.2825
============== ============= ================ =============
The primary differences between Net Income as calculated under generally
accepted accounting principles ("GAAP") and Cash Available For Distribution
("CAD") result from the timing of income and expense recognition and non-cash
events. These differences between CAD and GAAP income include the treatment of
loan origination fees, which for CAD purposes are recognized when received but
for GAAP purposes are amortized over the life of the associated loan. In
addition, there are differences related to non-cash gains and losses associated
with bond valuations and sales, non-cash gains and losses associated with
changes in market value of derivative financial instruments, amortization of
goodwill and intangibles and capitalization of mortgage servicing rights, net of
deferred taxes for GAAP purposes, which are not included in the calculation of
CAD.
The common shares outstanding reported for Cash Available for Distribution
are the actual shares outstanding at the end of the quarter. For GAAP, the
weighted average shares outstanding during the period are reported for the basic
net income per share calculation. The weighted average shares outstanding for
diluted net income per share include the potential dilutive effect from the
exercise of options, vesting of restricted shares, conversion of the preferred
shares and provision for shares to be awarded under the Midland acquisition earn
out provision.
VARIANCE ANALYSIS FOR CAD
3rd Quarter 2002 Compared to 3rd Quarter 2001:
Total income for the third quarter of 2002 increased $2.4 million over the same
period last year due primarily to the following changes: (1) a $2.1 million
increase in collections of interest on bonds, other bond-related investments,
other notes and loans; (2) a $1.3 million decrease in loan origination and
brokerage fees due to a $2.2 million decrease in syndication fees related to tax
credit equity transactions (third quarter 2001 includes $1.2 million in fees
related to a tax credit re-syndication) offset by a $0.9 million increase in
origination fees; (3) a $1.3 million increase in other income due to $1.7
million in income on the CAPREIT investment offset by a $0.4 million decrease in
cancellation, late and other fees; and (4) a $0.4 million increase in gain on
sales.
Total expenses for the third quarter decreased $0.1 million over the same period
last year due primarily to the following changes: (1) a $0.6 million decrease in
professional fees due primarily to a $0.4 million adjustment to reflect
capitalization of legal expenses related to new securitization programs (these
legal expenses had previously been expensed) and a $0.2 million decrease in fees
related to information systems initiatives, as compared with the prior-year
period; (2) a $0.3 million increase in other operating expenses due primarily to
software hosting expenses that began in January 2002; (3) a $0.8 million
increase in interest expense primarily associated with an increase in financing
costs associated with on-balance sheet securitizations; and (4) a $0.5 million
decrease in income tax expense due to tax benefits derived from tax losses and
deductions generated by the CAPREIT investment.
Year-to-Date 2002 Compared to Year-to-Date 2001:
Total income for the nine months ended September 30, 2002 increased $9.7 million
over the same period last year due primarily to the following changes: (1) a
$6.4 million increase in collections of interest on bonds, other bond-related
investments, other notes and loans; (2) a $0.5 million increase in loan
origination and brokerage fees due to a $3.3 million increase in origination
fees offset by a $2.8 million decrease in syndication fees related to tax credit
equity transactions (year-to-date 2001 includes $2.3 million in fees related to
tax credit equity re-syndications); (3) a $1.9 million increase in other income
due to $2.0 million in income from the CAPREIT investment, a $0.7 million
increase in asset management fees and advisory fees offset by a $0.6 million
decrease in cancellation, late and other fees; and (4) a $0.5 million increase
in gain on sales.
Total expenses for the nine months ended September 30, 2002 increased $3.1
million over the same period last year due primarily to the following changes:
(1) a $1.2 million increase in salary and related benefits expense associated
with 2001 new hires; (2) a $0.6 million decrease in professional fees due
primarily to a $0.4 million adjustment to reflect capitalization of legal
expenses related to new securitization programs (these legal expenses had
previously been expensed) and a decrease in fees related to information systems
initiatives, as compared with the prior-year period; (3) a $1.0 million increase
in other operating expenses primarily driven by deployment of accounting
information systems and other upgrades in technology infrastructure; (4) a $1.8
million increase in interest expense, primarily associated with an increase in
financing costs associated with on-balance sheet securitizations; and (5) a $0.2
million decrease in income tax expense due to tax benefits derived from tax
losses and deductions generated by the CAPREIT investment.
CALCULATION OF CASH AVAILABLE FOR DISTRIBUTION
(in thousands, except share and per share data)
(unaudited)
Qtr Ended Qtr Ended Qtr Ended Qtr Ended Qtr Ended
09/30/02 06/30/02 03/31/02 12/31/01 09/30/01
-------------- -------------- --------------- -------------- --------------
SOURCES OF CASH:
Interest on bonds, other bond-related investments,
other notes and loans ............................. $ 23,331 $ 23,377 $ 22,963 $ 22,708 $ 21,263
Interest on short-term investments .................. 260 244 487 539 237
Loan servicing fees ................................. 1,544 1,660 1,908 1,962 1,659
Loan origination and brokerage fees ................. 2,973 5,385 3,126 4,075 4,247
Other income ........................................ 3,607 2,451 2,330 1,401 2,275
Net gain (loss) on sales ............................ 207 102 40 381 (187)
-------------- -------------- --------------- -------------- --------------
TOTAL SOURCES OF CASH ............................. 31,922 33,219 30,854 31,066 29,494
-------------- -------------- --------------- -------------- --------------
EXPENSES:
Salaries and benefits ............................... 5,446 5,930 4,827 6,379 5,527
Professional fees ................................... 467 1,437 172 1,468 1,114
Other operating expenses ............................ 2,173 2,227 2,191 1,801 1,893
Interest expense .................................... 8,134 7,900 8,290 7,101 7,351
Income taxes ........................................ (173) 345 414 (61) 301
-------------- -------------- --------------- -------------- --------------
TOTAL EXPENSES .................................... 16,047 17,839 15,894 16,688 16,186
-------------- -------------- --------------- -------------- --------------
CASH AVAILABLE FOR DISTRIBUTION ..................... 15,875 15,380 14,960 14,378 13,308
LESS:
Cash allocable to preferred shareholders and term
growth shares, including preferred shareholders
in a subsidiary company ......................... 2,994 2,995 3,147 3,376 2,962
-------------- -------------- --------------- -------------- --------------
CASH AVAILABLE FOR DISTRIBUTION
TO COMMON SHARES ................................ $ 12,881 $ 12,385 $ 11,813 $ 11,002 $ 10,346
============== ============== =============== ============== ==============
CAD PER COMMON SHARE ................................ $ 0.51 $ 0.49 $ 0.47 $ 0.50 $ 0.48
============== ============== =============== ============== ==============
CALCULATION OF CASH DISTRIBUTION:
CASH AVAILABLE FOR DISTRIBUTION
TO COMMON SHARES .................................. $ 12,881 $ 12,385 $ 11,813 $ 11,002 $ 10,346
============== ============== =============== ============== ==============
ACTUAL AMOUNT PAID .................................. $ 11,154 $ 11,072 $ 10,968 $ 9,438 $ 9,296
============== ============== =============== ============== ==============
PAYOUT RATIO ........................................ 86.6% 89.4% 92.8% 85.8% 89.9%
============== ============== =============== ============== ==============
COMMON SHARES OUTSTANDING ........................... 25,349,585 25,308,022 25,213,482 21,820,266 21,618,144
============== ============== =============== ============== ==============
CASH DISTRIBUTION PER COMMON SHARE .................. $ 0.4400 $ 0.4375 $ 0.4350 $ 0.4325 $ 0.4300
============== ============== =============== ============== ==============
Note: Certain prior quarter amounts have been reclassified to conform to the
9/30/02 presentation.
MUNICIPAL MORTGAGE & EQUITY, LLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except share and per share data)
For the three months ended For the nine months ended
September 30, September 30,
-------------------------- ---------------------------
2002 2001 2002 2001
-------------------------- ---------------------------
INCOME:
Interest on bonds, other bond-related investments, other notes
and loans .............................................................. $ 24,085 $ 20,614 $ 71,670 $ 61,542
Interest on short-term investments ........................................ 260 487 991 2,182
Loan servicing fees ....................................................... 1,544 1,659 5,112 5,020
Loan origination and brokerage fees ....................................... 2,781 2,926 9,373 8,149
Other income .............................................................. 381 1,843 4,463 8,493
Net gain on sales ......................................................... 657 4,760 3,526 6,905
------------ ------------ ------------- ------------
Total income .............................................................. 29,708 32,289 95,135 92,291
------------ ------------ ------------- ------------
EXPENSES:
Salaries and benefits ..................................................... 5,446 5,527 16,203 15,002
Professional fees ......................................................... 467 1,114 2,076 2,718
Operating expenses ........................................................ 2,173 1,881 6,591 5,562
Amortization of intangible assets ......................................... 334 694 985 2,015
Interest expense .......................................................... 8,771 7,873 26,230 23,468
Other-than-temporary impairments related to investments in
bonds and other bond-related investments ............................. - - 110 3,256
------------ ------------ ------------- ------------
Total expenses ............................................................ 17,191 17,089 52,195 52,021
------------ ------------ ------------- ------------
Net holding losses on trading securities .................................. (9,921) (4,670) (14,530) (8,263)
Income tax benefit (expense) .............................................. 635 (805) (1,224) (1,032)
Income allocable to preferred shareholders in a subsidiary company ........ (2,994) (2,606) (8,983) (7,818)
Cumulative effect on prior years of change in
accounting for derivative financial instruments ...................... - - - (12,277)
------------ ------------ ------------- ------------
Net income ................................................................ $ 237 $ 7,119 $ 18,203 $ 10,880
============ ============ ============= ============
LESS:
Net income allocable to preferred shares
and term growth shares ............................................ - 605 153 1,617
------------ ------------ ------------- ------------
Net income allocated to common shares ..................................... $ 237 $ 6,514 $ 18,050 $ 9,263
============ ============ ============= ============
OPERATING NET INCOME ALLOCATED TO COMMON SHARES (Note 1) .................. $ 10,158 $ 11,184 $ 32,580 $ 29,803
============ ============ ============= ============
NET INCOME PER COMMON SHARE:
Basic net income per common share:
Basic net income before cumulative effect of accounting change ....... $ 0.01 $ 0.30 $ 0.73 $ 1.02
============ ============ ============= ============
Basic net income per common share .................................... $ 0.01 $ 0.30 $ 0.73 $ 0.44
============ ============ ============= ============
Weighted average common shares outstanding ........................... 25,329,103 21,590,584 24,728,414 21,034,369
Diluted net income per common share:
Diluted net income before cumulative effect of accounting change ..... $ 0.01 $ 0.29 $ 0.71 $ 1.00
============ ============ ============= ============
Diluted net income per common share .................................. $ 0.01 $ 0.29 $ 0.71 $ 0.43
============ ============ ============= ============
Weighted average common shares outstanding ........................... 25,916,151 22,397,981 25,323,789 21,620,521
Operating net income per common share (Note 1) ............................ $ 0.40 $ 0.52 $ 1.32 $ 1.42
============ ============ ============= ============
Note 1 - Operating Net Income is Net Income before the change in market value of
the Company's derivative financial instruments. Operating Net Income per
share is calculated using basic weighted average common shares outstanding
for the relevant period.
VARIANCE ANALYSIS FOR GAAP
3rd Quarter 2002 compared to 3rd Quarter 2001:
Total income for the third quarter of 2002 decreased $2.6 million over the same
period last year due primarily to the following changes: (1) a $3.5 million
increase in collections of interest on bonds, other bond-related investments,
other notes and loans; (2) a $0.2 million decrease in interest on short-term
investments resulting from the use of equity offering proceeds to repurchase
senior interests in certain securitization trusts and funding of other
operations, as well as lower investment yields on larger average balances held
in margin collateral accounts; (3) a $1.5 million decrease in other income due
primarily to a $1.2 million increase in losses from the CAPREIT investment and a
decrease in cancellation, late and other fees; and (4) a $4.1 million decrease
in gain on sales due primarily to a $0.8 million decrease in gain related to
capitalized mortgage servicing rights, a $1.2 million gain on a tax credit
equity re-syndication in the third quarter of 2001 and a $2.2 million gain from
the pay-off of the Newport-on-Seven bond in the third quarter of 2001.
Total expenses for the third quarter of 2002 increased $0.1 million over the
same period last year due primarily to the following changes: (1) a $0.6 million
decrease in professional fees due primarily to a $0.4 million adjustment to
reflect capitalization of legal expenses related to new securitization programs
(these legal expenses had previously been expensed) and a $0.2 million decrease
in fees related to information systems initiatives, as compared with the
prior-year period; (2) a $0.3 million increase in operating expenses due
primarily to software hosting expenses that began in January 2002; (3) a $0.4
million decrease in amortization expense due to changes in accounting guidelines
relating to amortization of goodwill; and (4) a $0.9 million increase in
interest expense primarily associated with an increase in financing costs
associated with on-balance sheet securitizations.
The Company recorded net holding losses for the change in market value of the
Company's derivative financial instruments of $9.9 million for the third quarter
of 2002. The Company's net operating income, which excludes this change in
market value, was $0.40 per common share.
Year-to-Date 2002 Compared to Year-to-Date 2001:
Total income for the nine months ended September 30, 2002 increased $2.8 million
over the same period last year due primarily to the following changes: (1) a
$10.1 million increase in collections of interest on bonds, other bond-related
investments, other notes and loans; (2) a $1.2 million decrease in interest on
short-term investments resulting from the use of equity offering proceeds to
repurchase senior interests in current securitization trusts and funding of
other operations, as well as lower investment yields on larger average balances
held in margin collateral accounts; (3) a $1.2 million increase in loan
origination and brokerage fees due to a $1.7 million increase in origination
fees offset by a $0.5 million decrease in syndication fees related to tax credit
equity transactions; (4) a $4.0 million decrease in other income primarily due
to a $4.3 million increase in losses from the CAPREIT investment and a $0.4
million decrease in cancellation, late and other fees offset by an increase of
$0.7 million in asset management and advisory fees; and (5) a $3.4 million
decrease in gain on sales due primarily to a $2.3 million gain on tax credit
equity re-syndications in 2001 and a $2.2 million gain from the pay-off of the
Newport-on-Seven bond in 2001 offset by a $1.0 million gain in the first quarter
of 2002 on the sale of an investment in RITES.
Total expenses for the nine months ended September 30, 2002 increased $0.2
million over the same period last year due primarily to the following changes:
(1) a $1.2 million increase in salary and related benefits expense associated
with 2001 new hires; (2) a $0.6 million decrease in professional fees due
primarily to a $0.4 million adjustment to reflect capitalization of legal
expenses related to new securitization programs (these legal expenses had
previously been expensed) and a decrease in fees related to information systems
initiatives, as compared with the prior-year period; (3) a $1.0 million increase
in other operating expenses driven primarily by deployment of accounting
information systems and other upgrades in technology infrastructure; (4) a $1.0
million decrease in amortization expense due to changes in accounting guidelines
relating to amortization of goodwill; (5) a $2.8 million increase in interest
expense primarily associated with an increase in financing costs associated with
on-balance sheet securitizations; and (6) a $0.1 million impairment recorded in
2002 associated with a subordinate bond investment compared to a $3.3 million
impairment recorded in 2001 on two investments (Hunter's Glen and Buchanan Bay).
The Company recorded net holding losses for the change in market value of the
Company's derivative financial instruments of $14.5 million for the nine months
ended September 30, 2002. The Company's net operating income, which excludes
this change in market value, was $1.32 per common share.
MUNICIPAL MORTGAGE & EQUITY, LLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(unaudited)
Qtr Ended Qtr Ended Qtr Ended Qtr Ended Qtr Ended
09/30/02 06/30/02 03/31/02 12/31/01 09/30/01
-------------- -------------- -------------- --------------- --------------
INCOME:
Interest on tax-exempt bonds and
other bond-related investments ............... $ 15,409 $ 15,399 $ 15,162 $ 17,311 $ 12,153
Interest on loans ............................... 8,676 8,594 8,430 7,930 8,461
Interest on short-term investments .............. 260 244 487 899 487
Loan servicing fees ............................. 1,544 1,660 1,908 1,962 1,659
Loan origination and brokerage fees ............. 2,781 3,885 2,707 3,764 2,926
Other income .................................... 381 2,393 1,689 272 1,843
Net gain on sales ............................... 657 703 2,166 1,334 4,760
-------------- -------------- -------------- --------------- --------------
TOTAL INCOME ............................... 29,708 32,878 32,549 33,472 32,289
-------------- -------------- -------------- --------------- --------------
EXPENSES:
Salaries and benefits ........................... 5,446 5,930 4,827 6,379 5,527
Professional fees ............................... 467 1,437 172 1,468 1,114
Operating expenses .............................. 2,173 2,227 2,191 2,280 1,881
Goodwill and other intangible amortization ...... 334 333 318 494 694
Interest expense ................................ 8,771 8,487 8,972 7,228 7,873
Other-than-temporary impairments ................ - - 110 - -
-------------- -------------- -------------- --------------- --------------
TOTAL EXPENSES ............................. 17,191 18,414 16,590 17,849 17,089
-------------- -------------- -------------- --------------- --------------
Net holding gains (losses) on trading securities. (9,921) (7,721) 3,112 2,691 (4,670)
Income tax benefit (expense) .................... 635 (828) (1,031) (351) (805)
Income allocable to preferred shareholders in a
subsidiary company ........................... (2,994) (2,995) (2,994) (2,961) (2,606)
-------------- -------------- -------------- --------------- --------------
Net income ...................................... $ 237 $ 2,920 $ 15,046 $ 15,002 $ 7,119
============== ============== ============== =============== ==============
LESS:
Net income allocable to preferred shares
and term growth shares .................. - - 153 418 605
-------------- -------------- -------------- --------------- --------------
Net income allocated to common shares ........... $ 237 $ 2,920 $ 14,893 $ 14,584 $ 6,514
============== ============== ============== =============== ==============
OPERATING NET INCOME ALLOCATED TO
COMMON SHARES ................................. $ 10,158 $ 10,641 $ 11,781 $ 11,893 $ 11,184
============== ============== ============== =============== ==============
EARNINGS PER COMMON SHARE:
Basic earnings before cumulative effect
of accounting change ..................... $ 0.01 $ 0.12 $ 0.63 $ 0.67 $ 0.30
============== ============== ============== =============== ==============
Basic net income per common share .......... $ 0.01 $ 0.12 $ 0.63 $ 0.67 $ 0.30
============== ============== ============== =============== ==============
Diluted earnings before cumulative effect
of accounting change ..................... $ 0.01 $ 0.11 $ 0.62 $ 0.65 $ 0.29
============== ============== ============== =============== ==============
Diluted net income per common share ........ $ 0.01 $ 0.11 $ 0.62 $ 0.65 $ 0.29
============== ============== ============== =============== ==============
Weighted average shares outstanding:
Basic ...................................... 25,329,103 25,252,124 23,584,635 21,708,191 21,590,584
============== ============== ============== =============== ==============
Diluted .................................... 25,916,151 25,835,808 24,200,030 22,349,645 22,397,981
============== ============== ============== =============== ==============
Operating net income per common share ........... $ 0.40 $ 0.42 $ 0.50 $ 0.55 $ 0.52
============== ============== ============== =============== ==============
Note: Certain prior quarter amounts have been reclassified to conform to the
9/30/02 presentation.
Municipal Mortgage & Equity, LLC
Reconciliation of Basic and Diluted EPS
For the three months ended September 30, 2002 For the three months ended September 30, 2001
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
--------------- ------------- ------------- -------------- -------------- -----------
(in thousands, except share and per share data)
Basic EPS
Income allocable to common shares .... $ 237 25,329,103 $ 0.01 $ 6,514 21,590,584 $ 0.30
============= ===========
Effect of Dilutive Securities
Options and deferred shares .......... - 454,193 - 526,053
Convertible preferred shares to
the extent dilutive ................ - - 3 137,044
Earnings contingency ................. - 132,855 - 144,300
-------------- -------------- -------------- --------------
Diluted EPS
Income allocable to common shares
plus assumed conversions .......... $ 237 25,916,151 $ 0.01 $ 6,517 22,397,981 $ 0.29
============== ============= ============= ============== ============== ===========
For the nine months ended September 30, 2002 For the nine months ended September 30, 2001
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
-------------- -------------- ------------ -------------- -------------- -----------
(in thousands, except share and per share data)
Basic EPS
Income allocable to common shares .... $ 18,050 24,728,414 $ 0.73 $ 9,263 21,034,369 $ 0.44
========== ===========
Effect of Dilutive Securities
Options and deferred shares .......... - 462,520 - 492,371
Convertible preferred shares to
the extent dilutive ................ - - 3 45,681
Earnings contingency ................. - 132,855 - 48,100
-------------- -------------- -------------- --------------
Diluted EPS
Income allocable to common shares
plus assumed conversions .......... $ 18,050 25,323,789 $ 0.71 $ 9,266 21,620,521 $ 0.43
============== ============== ========== ============== ============== ===========
MUNICIPAL MORTGAGE & EQUITY, LLC
RECONCILIATION OF GAAP INCOME TO CASH AVAILABLE FOR DISTRIBUTION
(in thousands)
(unaudited)
For the three months ended For the nine months ended
September 30, 2002 September 30, 2002
------------------------ ------------------------
INCOME:
Interest on bonds, other bond-related investments, other notes and loans.. $ 24,085 $ 71,670
Interest on short-term investments ....................................... 260 991
Loan servicing fees ...................................................... 1,544 5,112
Loan origination and brokerage fees ...................................... 2,781 9,373
Other income ............................................................. 381 4,463
Net gain on sales ........................................................ 657 3,526
------------------------ ------------------------
Total income ............................................................. 29,708 95,135
------------------------ ------------------------
EXPENSES:
Salaries and benefits .................................................... 5,446 16,203
Professional fees ........................................................ 467 2,076
Operating expenses ....................................................... 2,173 6,591
Amortization ............................................................. 334 985
Interest expense ......................................................... 8,771 26,230
Other-than-temporary impairments related to investments in
bonds and other bond-related investments ............................ - 110
------------------------ ------------------------
Total expenses ........................................................... 17,191 52,195
------------------------ ------------------------
Net holding losses on trading securities ................................. (9,921) (14,530)
Income tax benefit (expense) ............................................. 635 (1,224)
Income allocable to preferred shareholders in a subsidiary company ....... (2,994) (8,983)
------------------------ ------------------------
Net income ............................................................... $ 237 $ 18,203
======================== ========================
LESS:
Net income allocable to term growth shares .......................... - 153
------------------------ ------------------------
Net income allocated to common shares - GAAP Basis ....................... $ 237 $ 18,050
======================== ========================
Conversion to Cash Available for Distribution:
(1)Mark to market adjustments ....................................... $ 9,921 $ 14,530
(2)CAPREIT investments .............................................. 3,248 3,767
(3)Net gain on sales ................................................ (450) (3,177)
(3)Amortization of capitalized mortgage servicing fees .............. 334 985
(4)Origination fees and other income, net ........................... 53 2,176
(5)Valuation allowances and other-than-temporary impairments ........ - 110
(6)Deferred tax (benefit) expense ................................... (462) 638
------------------------ ------------------------
Cash Available for Distribution (CAD) .................................... $ 12,881 $ 37,079
======================== ========================
Notes
(1) For GAAP reporting, the Company records the non-cash change in fair value
of its investment in interest rate swaps and other derivative financial
instruments through net income. These non-cash gains and losses are not
included in the Company's calculation of CAD.
(2) For GAAP reporting, the Company accounts for its investment in the CAPREIT
ventures on the equity accounting method. As a result, the Company reports
its share of the income or losses from the underlying properties and assets
in the CAPREIT ventures. The income from these ventures includes
depreciation expense and changes in the fair value of investments in
derivatives. For CAD reporting, the Company records the cash distributions
it receives from the ventures as income.
(3) For GAAP reporting, the Company recognizes non-cash gains and losses
associated with the sale of assets or capitalization of mortgage servicing
rights. The capitalized mortgage servicing rights are amortized into
expense over the estimated life of the serviced loans. The non-cash gains
and the associated amortization expense are not included in CAD.
(4) Origination fees and certain other income amounts are recognized as income
when received for CAD purposes, but for GAAP reporting these items are
deferred and amortized into income over the life of the associated
investment. This adjustment represents the net difference, for the relevant
period, between fees taken into income when received for CAD and the
amortization of fees recorded for GAAP.
(5) For GAAP reporting, the Company records valuation allowances and
other-than-temporary impairments on its investments in loans, bonds and
other bond-related investments. Such non-cash charges do not affect the
cash flow generated from the operation of the underlying properties,
distributions to shareholders, or the tax-exempt status of the income of
the financial obligation under the bonds. Therefore, these items are not
included in the calculation of CAD.
(6) For GAAP reporting, the Company's income tax expense contains both a
current and a deferred component. Only the Company's current income tax
expense is reflected in CAD.
MUNICIPAL MORTGAGE & EQUITY, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30, December 31,
2002 2001
---------------- ---------------
ASSETS:
Cash, cash equivalents and interest receivable ................ $ 53,935 $ 113,232
Investment in bonds and other bond-related investments ........ 792,216 629,755
Investment in derivative financial instruments ................ 21,085 2,912
Loans receivable, net ......................................... 433,963 440,031
Investment in partnerships .................................... 83,841 5,393
Other assets .................................................. 81,547 68,948
Goodwill and other intangible assets .......................... 30,206 29,005
---------------- ---------------
TOTAL ......................................................... $ 1,496,793 $1,289,276
================ ===============
LIABILITIES AND EQUITY:
Current liabilities ........................................... $ 28,992 $ 31,974
Notes payable ................................................. 404,589 420,063
Investment in other bond-related investments .................. 943 7,979
Investment in derivative financial instruments ................ 51,349 18,646
Short-term debt ............................................... 219,945 78,560
Long-term debt ................................................ 137,945 134,881
Preferred shareholders' equity in a subsidiary company ........ 160,465 160,465
Shareholders' equity .......................................... 492,565 436,708
---------------- ---------------
TOTAL ......................................................... $ 1,496,793 $1,289,276
================ ===============
BOOK VALUE PER COMMON SHARE ................................... $ 19.43 $ 19.31
================ ===============
MUNICIPAL MORTGAGE & EQUITY, LLC
ADJUSTED BALANCE SHEET
(in thousands)
(unaudited)
Adjusted
September 30, 2002 Adjustments September 30, 2002
------------------- -------------- -------------------
Cash and cash equivalents ........................................... $ 37,890 $ - $ 37,890
Investment in bonds and loans, net .................................. 1,194,972 (544,855)(1) 650,117
Off balance sheet assets ............................................ - 301,694 (2) 301,694
Other assets ........................................................ 211,639 (30,206)(3) 181,433
------------------- -------------- -------------------
Total net assets .................................................... $ 1,444,501 $ (273,367) $ 1,171,134
=================== ============== ===================
Liabilities, including short-term debt .............................. $ 653,526 $ (455,491)(4) $ 198,035
Off balance sheet debt .............................................. - 301,694 (2) 301,694
Long-term debt ...................................................... 137,945 - 137,945
------------------- -------------- -------------------
Total liabilities ................................................... $ 791,471 $ (153,797) $ 637,674
=================== ============== ===================
Leverage Ratio 54.4%
(1) Adjustments to bonds and loans:
Remove Midland loans from assets and liabilities .............. $ 401,350
Remove Oxford from assets and liabilities ..................... 5,420
Adjustment to reflect CAD sale of pari passu taxable loans
accounted for as borrowings ................................ 16,759
Adjustment to reflect effect of highly leveraged obligations .. 121,326
-------------------
TOTAL .................................. $ 544,855
===================
(2) Off balance sheet assets includes the following:
FSA A Bonds ................................................... $ 67,400
Other A Bonds ................................................. 20,978
Demand Notes .................................................. 16,247
P-Floats ...................................................... 197,069
-------------------
TOTAL ...................... $ 301,694
===================
(3) Remove goodwill ............................................... $ 30,206
===================
(4) Adjustments to liabilities:
Remove other liabilities and normal accruals .................. $ 28,991
Adjustment to reflect CAD sale of pari passu taxable loans
accounted for as borrowings ................................ 16,501
Remove Oxford from assets and liabilities ..................... 5,410
Remove Midland loans from assets and liabilities .............. 404,589
-------------------
TOTAL ...................... $ 455,491
===================
MUNICIPAL MORTGAGE & EQUITY, LLC
2002 INVESTMENTS
THIRD QUARTER
(In thousands)
BOND PRODUCTION: QUARTER YTD
PERMANENT BOND AMOUNT PRODUCTION
INTEREST ------------------------------ ---------------------------
PROPERTY CITY STATE RATE CONSTRUCTION PERMANENT CONSTRUCTION PERMANENT
----------------------------------- ----------- -------- ------------ ---------------- ------------- -------------- ------------
Lockwood Plaza ...................... Providence .. RI ... 6.81% .. 4,050 4,050
Shady Oaks Manor .................... Fort Worth .. TX ... 6.35% .. 3,905
Park at Landmark .................... Alexandria .. VA ... Various . 15,820
---------------- ------------- ---------------------------
TOTAL ............................................................... $ 4,050 $ 23,775 $ 65,216 $ 96,595
================ ============= ============== ============
CONSTRUCTION/PERMANENT LENDING,
SYNDICATION AND OTHER PRODUCTION:
TOTAL FEES TOTAL FEES
RECOGNIZED RECOGNIZED
QUARTER THIS QUARTER YTD YTD
VOLUME FOR CAD VOLUME FOR CAD
---------------- ------------- -------------- ------------
Tax Credit Equity Syndications
(Equity Raised) ................................................... $ 21,027 $ 767 $ 100,224 $ 4,765
Tax Credit Lending Production ....................................... $ 23,043 $ - $ 92,898 $ -
Conventional Equity Production ...................................... $ 16,171 $ 580 $ 32,986 $ 1,139
Taxable Construction Loan Production
(generating a weighted average spread of 1.04%) ................... $ 97,253 $ 313 $ 226,689 $ 1,209
Taxable Permanent Loan Production ................................... $ 114,692 $ 1,403 $ 265,398 $ 3,270
Working Capital and Bridge Loans .................................... $ 15,914 $ 223 $ 47,432 $ 698
Equity Investment in CAPREIT Three M Venture ........................ $ - $ - $ 75,000 $ 750
OTHER INFORMATION:
Balance as of 9/30/02 of Midland Servicing
Portfolio under Management ........................................ $ 1,031,582 $ 984
Balance as of 9/30/02 of Midland Equity
Syndication Portfolio under Management ............................ $ 769,900 $ 755
MUNICIPAL MORTGAGE & EQUITY, LLC
PARTICIPATING BOND PORTFOLIO
NET OPERATING INCOME - TREND
As of September 30, 2002
Q3 2001 Q2 2002 Q3 2002(2) Q3 '02/ Q3 '02/
Property Actual Actual Actual Q3 '01 Q2 '02
-------- ----------- --------- ----------- --------- ---------
Alban .................................................... 242,953 277,851 260,293 7.1% -6.3%
(1) Arlington ................................................ 0 0 0 N/A N/A
Barkley Place ............................................ 379,015 264,048 346,729 -8.5% 31.3%
(1) Barrington at Beach Street ............................... 0 0 0 N/A N/A
Cobblestone .............................................. 179,580 179,912 167,498 -6.7% -6.9%
(1) Cool Springs ............................................. 0 0 0 N/A N/A
Creekside ................................................ 264,353 271,875 287,324 8.7% 5.7%
Crossings ................................................ 192,690 179,332 175,443 -9.0% -2.2%
Gilman Meadows ........................................... 178,290 167,729 180,562 1.3% 7.7%
Hamilton Grove ........................................... 208,703 231,641 241,783 15.9% 4.4%
Jefferson Commons ........................................ 429,576 484,620 347,975 -19.0% -28.2%
Lakeview ................................................. 162,227 187,987 192,831 18.9% 2.6%
Mallard I ................................................ 58,433 30,358 40,316 -31.0% 32.8%
Mallard II ............................................... 133,411 102,851 107,228 -19.6% 4.3%
Montclair ................................................ 305,474 306,323 374,664 22.7% 22.3%
Newport Village .......................................... 318,144 257,432 302,726 -4.8% 17.6%
Nicollet Ridge ........................................... 394,316 379,089 458,948 16.4% 21.1%
North Pointe ............................................. 540,006 661,019 567,692 5.1% -14.1%
Palisades Park ........................................... 264,106 245,556 256,796 -2.8% 4.6%
Riverset I ............................................... 408,873 316,555 322,498 -21.1% 1.9%
Riverset II .............................................. 170,854 139,242 135,672 -20.6% -2.6%
Steeplechase Falls ....................................... 370,708 403,373 378,946 2.2% -6.1%
Meadows .................................................. 171,553 136,952 167,611 -2.3% 22.4%
Timber Ridge ............................................. 154,997 137,432 143,351 -7.5% 4.3%
Villas at LaRiviera ...................................... 249,233 193,778 189,837 -23.8% -2.0%
Whispering Lake .......................................... 302,653 344,172 397,903 31.5% 15.6%
Winter Oaks .............................................. 184,575 282,800 246,746 33.7% -12.7%
---------------------------------------- --------------------
Total .................................................... 6,264,723 6,181,926 6,291,372 0.4% 1.8%
Same Store Growth ........................................ 6,264,723 6,181,926 6,291,372 0.4% 1.8%
(1) Under construction
(2) Q3 2002 represents two months actual, one month budget
Real Estate Table
Occupancy
------------------------------------------------------------
Month Ended Month Ended Month Ended Month Ended
Month/Year Apartment September 30, June 30, September 30, September 30,
Apartment Community Acquired Units 2002 2002 2001 2000
------------------- ---------- ----------- ------------------------------------------------------------
Participating Mortgage Bonds:
Alban Place ................................... Sep-86 194 94.8% 94.8% 95.4% 97.4%
Cobblestone ................................... Aug-99 184 93.5% 95.1% 98.9% 94.0%
Creekside Village ............................. Nov-87 296 100.0% 99.3% 99.7% 99.7%
Crossings ..................................... Jan-97 200 94.0% 95.5% 95.5% 98.5%
Jefferson Commons ............................. Dec-00 173 83.0% 91.9% 96.5% N/A
Lakeview ...................................... Sep-87 180 98.3% 96.1% 97.8% 96.1%
North Pointe .................................. Sep-86 540 95.0% 92.4% 94.3% 95.9%
Timber Ridge .................................. Dec-00 168 98.8% 97.6% 97.6% N/A
Villas at LaRiviera ........................... Jun-99 199 98.0% 81.5% 96.0% 92.5%
-----------
Subtotal Participating Mortgage Bonds ..... 2,134
-----------
Mortgage Bonds:
Applewood (a.k.a. Paola) ...................... Jul-99 48 91.7% 91.7% 87.5% 89.6%
Buchanan Bay .................................. Mar-01 228 82.5% 82.0% 86.4% N/A
Charter House (2) ............................. Dec-96 - N/A N/A N/A N/A
Cielo Vista ................................... Aug-99 378 93.7% 95.0% 91.5% 94.2%
Country Club .................................. Jul-99 101 85.1% 90.1% 89.1% 89.1%
Delta Village ................................. Jun-99 80 96.3% 100.0% 95.0% 91.3%
Elmbrooke ..................................... Aug-00 54 100.0% 100.0% 100.0% N/A
Florida A&M ................................... Feb-00 96 92.0% 69.8% 69.8% N/A
Gannon (Broward) .............................. Feb-98 315 98.1% 96.2% 97.8% 92.4%
Gannon (Dade) (3) ............................. Feb-98 1,252 97.7% 95.5% 95.0% 97.9%
Gannon (St. Louis) ............................ Feb-98 336 89.6% 92.9% 94.0% 97.9%
Gannon A Bond ................................. Feb-98 - N/A N/A N/A N/A
Hidden Valley ................................. Dec-96 82 92.7% 92.7% 91.5% 93.9%
Honey Creek ................................... Mar-99 656 89.8% 95.1% 93.3% 95.9%
Hunter's Glen ................................. Mar-01 383 82.5% 86.7% 88.5% N/A
Lake Piedmont ................................. Apr-98 648 90.7% 95.2% 82.9% 83.2%
Monroe (Oakmont, Towne Oak) ................... Dec-98 364 97.0% 98.1% 99.4% 94.3%
Mountain View (Willowgreen) ................... Nov-86 241 95.9% 98.3% 97.5% 97.5%
Northridge Park II ............................ Aug-87 128 88.3% 96.9% 96.9% 98.4%
Oakbrook ...................................... Dec-96 170 92.4% 95.3% 99.4% 95.3%
Orangevale .................................... Apr-98 64 100.0% 98.4% 100.0% 100.0%
Parkwood ...................................... Jun-99 180 97.2% 97.8% 98.9% 98.3%
Riverset II (1) ............................... Jan-96 - N/A N/A N/A N/A
Riverview ..................................... Jun-00 224 96.9% 75.0% N/A N/A
Sahuarita ..................................... Jun-99 52 88.5% 100.0% 71.2% 67.3%
Santa Fe Springs .............................. Jun-00 310 89.7% 91.9% 81.6% 94.5%
Shadowbrook ................................... Jun-99 193 97.4% 97.4% 97.9% 95.9%
Silver Springs ................................ Dec-99 250 84.4% 70.0% 81.6% N/A
Southwind ..................................... Aug-00 88 98.6% 100.0% 95.5% N/A
Torries Chase ................................. Dec-96 99 92.9% 92.9% 99.0% 94.9%
Villa Hialeah ................................. Nov-87 245 99.2% 98.0% 98.0% 95.5%
Village Apartments ............................ May-00 210 93.8% 96.2% 74.3% 93.8%
Village at Stone Mountain ..................... Oct-97 722 90.6% 91.6% 93.5% 94.6%
Village Green ................................. Feb-00 200 85.2% 86.5% 94.0% N/A
Weatherstone .................................. Sep-00 100 96.0% 91.0% 14.0% N/A
Western Hills ................................. Dec-98 80 83.8% 91.3% 97.5% 95.0%
Willow Key .................................... Mar-99 384 97.0% 99.5% 99.0% 100.0%
Woodglen ...................................... Dec-99 250 87.2% 90.8% 77.2% N/A
Woodmark ...................................... Jun-99 173 99.4% 98.3% 96.0% 51.4%
-----------
Subtotal Mortgage Bonds ................... 9,384
-----------
Participating Subordinate Mortgage Bonds:
Barkley Place ................................. May-87 156 92.9% 89.7% 95.5% 95.5%
Gilman Meadows ................................ Mar-87 125 97.6% 90.4% 90.4% 96.8%
Hamilton Chase ................................ Feb-87 300 92.7% 93.7% 92.7% 99.3%
Mallard Cove I & II ........................... Feb-87 198 92.4% 90.4% 91.9% 95.5%
Meadows ....................................... Jan-88 200 96.5% 94.0% 94.0% 97.5%
Montclair ..................................... Oct-86 159 91.2% 97.5% 95.6% 95.6%
Newport Village ............................... Dec-86 220 90.0% 94.1% 97.7% 100.0%
Nicollet Ridge ................................ Dec-87 339 95.3% 92.0% 97.6% 98.8%
Riverset II ................................... Jan-96 148 94.0% 86.8% 89.0% 97.2%
Steeplechase .................................. Oct-88 450 95.3% 92.9% 96.2% 94.7%
Whispering Lake ............................... Oct-87 384 90.6% 93.5% 92.4% 90.9%
-----------
Subtotal Participating Subordinate Mortgage Bonds .... 2,679
-----------
Per Apartment Unit
--------------------------------------------------
Month Month Month Month
Ended Ended Ended Ended
Month/Year Apartment August 31, June 30, September 30, September 30,
Apartment Community Acquired Units 2002 2002 2001 2000
------------------- ----------- --------- --------------------------------------------------
Participating Mortgage Bonds:
Alban Place .................................. Sep-86 194 933 924 886 863
Cobblestone .................................. Aug-99 184 575 572 570 544
Creekside Village ............................ Nov-87 296 570 559 526 504
Crossings .................................... Jan-97 200 748 749 739 718
Jefferson Commons ............................ Dec-00 173 1,357 1,361 1,322 N/A
Lakeview ..................................... Sep-87 180 697 695 669 668
North Pointe ................................. Sep-86 540 687 682 657 619
Timber Ridge ................................. Dec-00 168 497 464 493 N/A
Villas at LaRiviera .......................... Jun-99 199 693 682 644 581
-----------
Subtotal Participating Mortgage Bonds .... 2,134
-----------
Mortgage Bonds:
Applewood (a.k.a. Paola) ..................... Jul-99 48 503 502 553 490
Buchanan Bay ................................. Mar-01 228 716 716 677 N/A
Charter House (2) ............................ Dec-96 - N/A N/A N/A N/A
Cielo Vista .................................. Aug-99 378 423 424 423 424
Country Club ................................. Jul-99 101 438 438 442 438
Delta Village ................................ Jun-99 80 579 578 544 523
Elmbrooke .................................... Aug-00 54 1,021 1,021 705 N/A
Florida A&M .................................. Feb-00 96 1,382 1,385 1,384 1,352
Gannon (Broward) ............................. Feb-98 315 671 665 649 N/A
Gannon (Dade) (3) ............................ Feb-98 1,252 757 743 728 702
Gannon (St. Louis) ........................... Feb-98 336 576 573 554 N/A
Gannon A Bond ................................ Feb-98 - N/A N/A N/A N/A
Hidden Valley ................................ Dec-96 82 547 552 538 519
Honey Creek .................................. Mar-99 656 550 560 555 518
Hunter's Glen ................................ Mar-01 383 578 584 564 N/A
Lake Piedmont ................................ Apr-98 648 478 476 472 474
Monroe (Oakmont, Towne Oak) .................. Dec-98 364 483 481 474 452
Mountain View (Willowgreen) .................. Nov-86 241 631 628 610 574
Northridge Park II ........................... Aug-87 128 1,044 1,053 1,023 958
Oakbrook ..................................... Dec-96 170 437 430 446 446
Orangevale ................................... Apr-98 64 977 958 915 910
Parkwood ..................................... Jun-99 180 467 464 449 438
Riverset II (1) .............................. Jan-96 - N/A N/A N/A N/A
Riverview .................................... Jun-00 224 656 658 N/A N/A
Sahuarita .................................... Jun-99 52 529 529 546 N/A
Santa Fe Springs ............................. Jun-00 310 590 592 592 581
Shadowbrook .................................. Jun-99 193 482 484 475 459
Silver Springs ............................... Dec-99 250 809 809 782 N/A
Southwind .................................... Aug-00 88 713 711 666 N/A
Torries Chase ................................ Dec-96 99 504 498 488 472
Villa Hialeah ................................ Nov-87 245 718 720 666 650
Village Apartments ........................... May-00 210 568 568 491 466
Village at Stone Mountain .................... Oct-97 722 743 733 716 696
Village Green ................................ Feb-00 200 634 638 634 625
Weatherstone ................................. Sep-00 100 812 812 810 N/A
Western Hills ................................ Dec-98 80 502 502 497 502
Willow Key ................................... Mar-99 384 655 655 633 609
Woodglen ..................................... Dec-99 250 641 641 647 N/A
Woodmark ..................................... Jun-99 173 680 680 684 670
-----------
Subtotal Mortgage Bonds .................. 9,384
-----------
Participating Subordinate Mortgage Bonds:
Barkley Place ................................ May-87 156 2,048 2,068 2,110 2,050
Gilman Meadows ............................... Mar-87 125 1,014 1,020 1,022 964
Hamilton Chase ............................... Feb-87 300 614 613 605 587
Mallard Cove I & II .......................... Feb-87 198 217 218 215 200
Meadows ...................................... Jan-88 200 605 611 602 593
Montclair .................................... Oct-86 159 1,829 1,820 1,841 1,797
Newport Village .............................. Dec-86 220 839 839 817 765
Nicollet Ridge ............................... Dec-87 339 942 942 923 883
Riverset II .................................. Jan-96 148 705 706 700 710
Steeplechase ................................. Oct-88 450 604 590 565 566
Whispering Lake .............................. Oct-87 384 642 639 648 639
-----------
Subtotal Participating Subordinate Mortgage Bonds .... 2,679
-----------
Occupancy
----------------------------------------------------------
Month Ended Month Ended Month Ended Month Ended
Month/Year Apartment September 30, June 30, September 30, September 30,
Apartment Community Acquired Units 2002 2002 2001 2000
-------------------- ----------- --------- ----------------------------------------------------------
Subordinate Mortgage Bonds:
CAPREIT .................................... Sep-99 - N/A N/A N/A N/A
Cinnamon Ridge ............................. Jan-99 - N/A N/A N/A N/A
Farmington Meadows ......................... Aug-99 69 98.6% 100.0% 100.0% 100.0%
Independence Ridge ......................... Aug-96 336 75.3% 83.6% 78.9% 20.2%
Locarno .................................... Aug-96 110 90.0% 93.6% 94.5% 90.0%
Olde English Manor ......................... Nov-99 - N/A N/A N/A N/A
Peaks of Conyer ............................ Sep-01 260 89.2% 89.2% N/A N/A
Rillito Village ............................ Jul-00 - N/A N/A N/A N/A
Winter Oaks ................................ Nov-99 460 93.7% 92.0% 88.5% 95.1%
-----------
Subtotal Subordinate Mortgage Bonds ..... 1,235
-----------
Other Bond-Related Investments:
Briarwood .................................. Dec-98 600 97.5% 97.5% 95.5% 94.8%
Cinnamon Ridge ............................. Dec-97 264 97.0% 98.1% 90.5% 97.3%
Golfside Villas (f.k.a. Club West) ......... Mar-99 194 99.5% 100.0% 100.0% 100.0%
Park Center ................................ Oct-01 325 93.5% 94.2% 97.5% N/A
Park at Landmark ........................... Sep-00 396 95.0% 95.0% 99.0% N/A
Poplar Glen ................................ Jun-97 191 95.3% 95.8% 94.8% 99.0%
RITES - Charter House ...................... Dec-96 280 95.7% 98.2% 95.4% 92.5%
RITES - Indian Lakes ....................... Jul-97 296 94.9% 86.1% 95.9% 97.0%
RITES - LaPaloma ........................... Apr-99 120 98.3% 98.3% 96.7% 96.7%
RITES - LeMirador (Coleman Senior) ......... Apr-98 141 85.8% 92.9% 97.9% 98.6%
RITES - Museum Towers ...................... Apr-01 286 N/A 87.8% 95.5% N/A
RITES - Oklahoma City (4) .................. Aug-98 772 94.3% 86.8% 89.0% 93.3%
RITES - Olde English Manor ................. Jun-98 264 89.0% 90.5% 90.5% 87.1%
RITES - Palisades Park ..................... Feb-98 304 95.7% 97.4% 99.3% 99.3%
RITES - Pavillion .......................... Apr-99 132 100.0% 100.0% 99.2% 98.5%
RITES - Queen Anne IV ...................... Jul-98 110 93.6% 96.4% 97.3% 100.0%
RITES - Rancho/Villas ...................... May-00 417 90.2% 92.1% 82.7% 88.6%
RITES - Rillito Village .................... Aug-98 272 91.9% 91.2% 90.4% 90.8%
RITES - Riverset (1) ....................... Aug-88 352 94.0% 86.8% 89.0% 97.2%
RITES - Riverset II (1) .................... Jan-96 - N/A N/A N/A N/A
RITES - Sienna (a.k.a. Italian Gardens) .... Apr-98 140 82.9% 83.6% 97.1% 97.9%
RITES - Sonterra ........................... May-98 156 100.0% 94.2% 84.6% 94.9%
RITES - Southgate Crossings ................ Jun-97 215 97.2% 97.2% 97.2% 99.1%
RITES - Southwood .......................... Nov-97 1,286 84.4% 85.6% 85.4% 85.3%
-----------
Subtotal Other Bond-Related Investments .. 7,513
-----------
Total Units/Weighted Average Investments.. 22,945 92.7% 92.4% 92.1% 92.8%
===========
Total/Same Stores (5) 2000 ................. 19,464 93.2% 93.3% 92.7% 92.8%
Total/Same Stores (5) 2001 ................. 22,461 91.6% 92.6% 92.1%
Construction/Substantial Rehab Properties Other Investments
Arlington .................................. Dec-00 176 9.7% N/A N/A N/A
Barrington at Beach Street ................. Oct-00 398 44.0% 39.2% 3.5% N/A
Bedford Park ............................... Oct-00 312 67.9% 75.6% 37.8% N/A
CAPREIT (6) ................................ Mar-01 2,942 93.3% 93.3% N/A N/A
CAPREIT Joint Venture (7) .................. Jun-02 5,185 N/A N/A N/A N/A
Chancellor ................................. Nov-01 101 N/A N/A N/A N/A
Chancellor II .............................. Mar-02 46 N/A N/A N/A N/A
Cool Springs ............................... Aug-00 124 44.4% 28.2% 9.7% N/A
Coronel Village ............................ Apr-02 48 N/A N/A N/A N/A
Fort Branch ................................ Dec-00 250 37.2% 19.6% N/A N/A
Hidden Brooks .............................. Sep-01 201 86.1% 80.6% N/A N/A
Las Trojas ................................. Mar-02 49 N/A N/A N/A N/A
Lincoln Corner ............................. Dec-01 134 N/A N/A N/A N/A
Meridian at Bridgewater .................... Nov-99 90 83.3% 71.1% 30.0% N/A
Mountain View Village ...................... Jun-02 220 N/A N/A N/A N/A
North White Road ........................... Nov-01 157 N/A N/A N/A N/A
Oak Grove Commons .......................... Dec-01 168 N/A N/A N/A N/A
Penn Valley ................................ Dec-01 42 N/A N/A N/A N/A
Sycamore Senior Village .................... Jun-02 300 N/A N/A 0.0% N/A
Village at Sun Valley ...................... May-00 276 67.8% 60.1% 11.2% N/A
Walnut Tree ................................ Mar-02 64 N/A N/A N/A N/A
-----------
Subtotal Construction/Rehab Properties ... 11,283
-----------
Total Units ......................... 34,228
===========
Per Apartment Unit
-------------------------------------------------------
Month Month Month Month
Ended Ended Ended Ended
Month/Year Apartment August 31, June 30, September 30, September 30,
Apartment Community Acquired Units 2002 2002 2001 2000
-------------------- ----------- --------- -------------------------------------------------------
Subordinate Mortgage Bonds:
CAPREIT ..................................... Sep-99 - N/A N/A N/A N/A
Cinnamon Ridge .............................. Jan-99 - N/A N/A N/A N/A
Farmington Meadows .......................... Aug-99 69 810 814 814 814
Independence Ridge .......................... Aug-96 336 552 551 545 564
Locarno ..................................... Aug-96 110 881 877 861 833
Olde English Manor .......................... Nov-99 - N/A N/A N/A N/A
Peaks of Conyer ............................. Sep-01 260 738 738 N/A N/A
Rillito Village ............................. Jul-00 - N/A N/A N/A N/A
Winter Oaks ................................. Nov-99 460 555 554 541 529
-----------
Subtotal Subordinate Mortgage Bonds ...... 1,235
-----------
Other Bond-Related Investments:
Briarwood ................................... Dec-98 600 611 603 586 563
Cinnamon Ridge .............................. Dec-97 264 921 917 933 873
Golfside Villas (f.k.a. Club West) .......... Mar-99 194 618 618 581 568
Park Center ................................. Oct-01 325 1,473 1,470 1,389 N/A
Park at Landmark ............................ Sep-00 396 1,079 1,079 1,015 N/A
Poplar Glen ................................. Jun-97 191 951 938 915 862
RITES - Charter House ....................... Dec-96 280 620 619 613 526
RITES - Indian Lakes ........................ Jul-97 296 776 785 766 727
RITES - LaPaloma ............................ Apr-99 120 628 619 583 589
RITES - LeMirador (Coleman Senior) .......... Apr-98 141 890 871 799 831
RITES - Museum Towers ....................... Apr-01 286 1,372 1,367 1,355 N/A
RITES - Oklahoma City (4) ................... Aug-98 772 482 478 470 459
RITES - Olde English Manor .................. Jun-98 264 485 479 472 481
RITES - Palisades Park ...................... Feb-98 304 546 545 525 508
RITES - Pavillion ........................... Apr-99 132 669 669 659 613
RITES - Queen Anne IV ....................... Jul-98 110 1,096 1,094 1,073 912
RITES - Rancho/Villas ....................... May-00 417 547 543 541 577
RITES - Rillito Village ..................... Aug-98 272 442 444 450 457
RITES - Riverset (1) ........................ Aug-88 352 704 714 701 693
RITES - Riverset II (1) ..................... Jan-96 - N/A N/A N/A N/A
RITES - Sienna (a.k.a. Italian Gardens) ..... Apr-98 140 854 857 787 832
RITES - Sonterra ............................ May-98 156 856 847 845 864
RITES - Southgate Crossings ................. Jun-97 215 975 981 925 876
RITES - Southwood ........................... Nov-97 1,286 485 492 489 475
-----------
Subtotal Other Bond-Related Investments ... 7,513
-----------
Total Units/Weighted Average Investments .. 22,945 702 691 675 612
===========
Total/Same Stores (5) 2000 .................. 19,464 645 644 631 612
Total/Same Stores (5) 2001 .................. 22,461 693 668 675
Construction/Substantial Rehab Properties and Other Investments
Arlington ................................... Dec-00 176 N/A N/A N/A N/A
Barrington at Beach Street .................. Oct-00 398 847 847 N/A N/A
Bedford Park ................................ Oct-00 312 547 513 519 N/A
CAPREIT (6) ................................. Mar-01 2,942 623 623 N/A N/A
CAPREIT Joint Venture (7) ................... Jun-02 5,185 N/A N/A N/A N/A
Chancellor .................................. Nov-01 101 N/A N/A N/A N/A
Chancellor II ............................... Mar-02 46 N/A N/A N/A N/A
Cool Springs ................................ Aug-00 124 1,947 1,947 1,953 N/A
Coronel Village ............................. Apr-02 48 N/A N/A N/A N/A
Fort Branch ................................. Dec-00 250 829 830 N/A N/A
Hidden Brooks ............................... Sep-01 201 1,045 1,057 N/A N/A
Las Trojas .................................. Mar-02 49 N/A N/A N/A N/A
Lincoln Corner .............................. Dec-01 134 N/A N/A N/A N/A
Meridian at Bridgewater ..................... Nov-99 90 2,702 2,453 3,051 N/A
Mountain View Village ....................... Jun-02 220 N/A N/A N/A N/A
North White Road ............................ Nov-01 157 N/A N/A N/A N/A
Oak Grove Commons ........................... Dec-01 168 N/A N/A N/A N/A
Penn Valley ................................. Dec-01 42 N/A N/A N/A N/A
Sycamore Senior Village ..................... Jun-02 300 N/A N/A N/A N/A
Village at Sun Valley ....................... May-00 276 681 681 643 N/A
Walnut Tree ................................. Mar-02 64 N/A N/A N/A N/A
-----------
Subtotal Construction/Rehab Properties .... 11,283
-----------
Total Units .......................... 34,228
===========
(1) The Company owns a participating bond, a participating subordinate bond and
a RITES interest collateralized by the Riverset property.
(2) The Company owns a non-participating bond and a RITES interest
collateralized by the Charter House property.
(3) The Dade Gannon Portfolio represents eight properties.
(4) The Oklahoma City Portfolio represents three properties.
(5) Same Store includes only properties reporting for all three quarters.
(6) The CAPREIT Portfolio represents eleven properties.
(7) CAPREIT Joint Venture represents seventeen properties (not included
previously in CAPREIT Portfolio).