Supplemental Financial Report for

Quarter Ended December 31, 2017

Pages

Supplemental Letter from the CEO

4

Quarterly Fact Sheet

5

Financial Performance Trend Graphs

6-11

Other Partnership Information

12

Partnership Financial Statements

13-15

Partnership Financial Measures and Schedules

16-21

•

Acquired approximately $49.3 million of mortgage revenue bonds,

•

Invested an additional $4.5 million in the Investment in unconsolidated entities, and

•

Executed on two subscription agreements from institutional investors to purchase $17.5 million of ATAX’s Series A Preferred Units.

•

Total revenue increased approximately 37.7% to $21.9 million, compared to $15.9 million in the fourth quarter of 2016, and

•

Total assets increased to $1.07 billion at December 31, 2017, compared to $944.1 million at December 31, 2016.

4

PARTNERSHIP DETAILS

ATAX was formed for the primary purpose of acquiring a portfolio of mortgage revenue bonds (“MRBs”) that are issued to provide construction and/or permanent financing of multifamily residential properties.  We continue to expect most of the interest paid on these MRBs is excludable from gross income for federal income tax purposes. We continue to pursue a business strategy of acquiring additional MRBs and other investments on a leveraged basis.  We also invest in other securities which, if not secured by a direct or indirect interest in a property, must be rated in one of the four highest rating categories by at least one nationally recognized securities rating agency.  We have also acquired interests in multifamily apartments (“MF Properties”) in order to position ourselves for future investments in mortgage revenue bonds issued to finance these properties.  In addition, we have invested in equity interests of multifamily, market rate, projects throughout the U.S.

(As of December 31, 2017)

Symbol (NASDAQ)

ATAX

Annual Distribution

$

0.50

Price

$

6.05

Yield

8.3%

Units Outstanding (including Restricted Units)

60,373,674

Market Capitalization

$

365,260,728

52-week Unit price range

$5.40 to $6.25

Partnership Financial Information for the Q4 2017

(amounts in thousands, except per Unit)

Total Revenue

$

21,872

Net Income – ATAX Partnership

$

15,647

Total Assets

$

1,069,768

Leverage Ratio³

64%

Cash Available for Distribution (“CAD”)¹

$

16,475

Distribution Declared per unit²

$

0.125

¹

Management utilizes a calculation of Cash Available for Distribution (“CAD”) to assess the Partnership’s operating performance. This is a non-GAAP financial measure and a reconciliation of our GAAP net income to CAD is provided on page 16 of the Supplement herein.

²

The most recent distribution was paid on January 31, 2018 for Unitholders of record as of December 29, 2017. The distribution is payable to Unitholders of record as of the last business day of the quarter end and ATAX trades ex-dividend two days prior to the record date, with a payable date of the last business day of the subsequent month.

³

Our overall leverage ratio is calculated as total outstanding debt divided by total partnership assets using the carrying value of the MRBs, PHC Certificates, initial finance costs, and the MF Properties at cost.

5

•

Total mortgage revenue bonds, core assets of ATAX, have increased to 74% of Total Assets at December 31, 2017, from 35% of Total Assets at December 31, 2012.

6

7

¹

Total outstanding debt divided by total assets using the carrying value of the MRBs, PHC Certificates, initial finance costs and the MF Properties at cost.

8

•

During the fourth quarter of 2017, we recognized gains on the sale of approximately $6.7 million, net of income taxes and before direct and indirect expense, from the sale of three MF Properties and contingent interest of approximately $2.9 million. Tier 2 income paid to the General Partner for these items was approximately $874,000.

•

During the second quarter of 2017, we recognized contingent interest of approximately $87,000,

•

During the first quarter of 2017, we recognized a gain on the sale of Northern View (an MF Property) of approximately $3.2 million, net of income taxes and Tier 2 income paid to the General Partner, and before direct and indirect expense, and contingent interest of approximately $133,000,

•

During the fourth quarter of 2016, we recognized contingent interest of approximately $1.7 million,

•

During the third quarter of 2016, we recognized a gain of approximately $1.1 million, net of tax, on the sale of Woodland Park, an MF Property, and contingent interest of $90,000,

•

During the second quarter of 2016, we recognized a gain of approximately $8.3 million, net of tax, on the sale of the Arboretum, an MF Property, and contingent interest income of approximately $45,000, and

•

During the first quarter of 2016, we recognized contingent interest income of approximately $174,000.

9

•

Since January 1, 2016, the ratio of “Salaries and benefits” and “General and administrative” expenses has averaged approximately 0.44% of Total Assets.

10

•

In 2017, we realized approximately $3.1 million of contingent interest and gains on sale of real estate assets of approximately $10.9 million, net of tax. Approximately $2.0 million was allocated to the General Partner and approximately $12.0 million that was allocated to the Unitholders.

•

In 2016, we realized approximately $2.0 million of contingent interest, of which $505,000 was due the General Partner. In addition, we reported the sale of the Arboretum and Woodland Park which resulted in gains of approximately $8.3 million and $1.1 million, respectively, net of tax, of which approximately $2.4 million was due the General Partner.  There was approximately $8.6 million that was allocated to the Unitholders.

11

OTHER PARTNERSHIP INFORMATION

Corporate Office:

Transfer Agent:

1004 Farnam Street

American Stock Transfer & Trust Company

Suite 400

59 Maiden Lane

Omaha, NE  68102

Plaza Level

Phone:

402-444-1630

New York, NY 10038

Investor Services:

402-930-3098

Phone: 718-921-8124

K-1 Services:

855-4AT-AXK1

888-991-9902

Fax:

402-930-3047

Fax:718-236-2641

Web Site:

www.ataxfund.com

K-1 Services Email:

k1s@ataxfund.com

Ticker Symbol:

ATAX

Corporate Counsel:

Independent Accountants:

Barnes & Thornburg LLP

PwC

11 S. Meridian Street

1 North Wacker Drive

Indianapolis, IN 46204

Chicago, Illinois 60606

Burlington Capital LLC, General Partner of the General Partner for ATAX

Board of Managers

Michael B. Yanney

Chairman Emeritus of the Board

Lisa Y. Roskens

Chairman of the Board

Mariann  Byerwalter

Manager

Dr. William S. Carter

Manager

Patrick J. Jung

Manager

George  Krauss

Manager

Dr. Gail Yanney

Manager

Walter K. Griffith

Manager

Senator Michael Johanns

Manager

Corporate Officers

Chief Executive Officer – Chad L. Daffer

Chief Financial Officer – Craig S. Allen

12

Partnership Financial

Statements and Information

Schedules

December 31, 2017

December 31, 2016

Assets

Cash and cash equivalents

$

69,597,699

$

20,748,521

Restricted cash

1,985,630

6,757,699

Interest receivable

6,541,132

6,983,203

Mortgage revenue bonds, held in trust

710,867,447

590,194,179

Mortgage revenue bonds

77,971,208

90,016,872

Public housing capital fund trusts

49,641,588

57,158,068

Real estate assets:

Land and improvements

7,319,235

17,354,587

Buildings and improvements

78,953,488

113,089,041

Real estate assets before accumulated depreciation

86,272,723

130,443,628

Accumulated depreciation

(9,580,531

)

(16,217,028

)

Net real estate assets

76,692,192

114,226,600

Investment in equity interests

39,608,927

19,470,006

Property loans, net

29,513,874

29,763,334

Other assets

7,348,302

8,795,192

Total Assets

$

1,069,767,999

$

944,113,674

Liabilities

Accounts payable, accrued expenses and other liabilities

$

8,494,227

$

7,255,327

Distribution payable

8,423,803

8,017,950

Unsecured lines of credit

50,000,000

40,000,000

Secured line of credit, net

-

19,816,667

Debt financing, net

558,328,347

495,383,033

Mortgages payable and other secured financing, net

35,540,174

51,379,512

Derivative swaps

826,852

1,339,283

Total Liabilities

661,613,403

623,191,772

Redeemable preferred units

94,314,326

40,788,034

Partners' Capital

General Partner

437,256

102,536

Beneficial Unit Certificate holders

313,403,014

280,026,669

Total Partners' Capital

313,840,270

280,129,205

Noncontrolling interest

-

4,663

Total Capital

313,840,270

280,133,868

Total Liabilities and Partners' Capital

$

1,069,767,999

$

944,113,674

14

For The Three Months Ended December 31, 2017

For The Three Months Ended December 31, 2016

For The Twelve Months Ended December 31, 2017

For The Twelve Months Ended December 31, 2016

Revenues:

Investment income

$12,338,134

$9,654,395

$48,225,068

$36,892,996

Property revenues

3,218,705

3,920,679

13,499,645

17,404,439

Contingent interest income

2,927,948

1,711,681

3,147,165

2,021,077

Other interest income

2,634,522

617,076

4,681,578

2,660,238

Other Income

752,718

-

828,089

-

   Total Revenues

21,872,027

15,903,831

70,381,545

58,978,750

Expenses:

Real estate operating (exclusive of items shown below)

1,897,152

1,964,037

8,228,297

9,223,108

Impairment of securities

761,960

-

761,960

-

Impairment charge on real estate assets

-

-

-

61,506

Depreciation and amortization

1,090,599

1,569,641

5,212,859

6,862,530

Amortization of deferred financing costs

444,299

512,309

2,324,535

1,862,509

Interest expense

5,157,682

2,892,278

22,155,443

15,469,639

General and administrative

3,564,574

3,362,688

12,769,757

10,837,188

   Total Expenses

12,916,266

10,300,953

51,452,851

44,316,480

Other Income:

Gain on sale of real estate assets, net

10,600,791

(4,585)

17,753,303

14,072,317

Gain on sale of securities

-

-

-

8,097

Income before income taxes

19,556,552

5,598,293

36,681,997

28,742,684

Income tax expense

3,909,099

(25,000)

6,019,146

4,959,000

Income from continuing operations

15,647,453

5,623,293

30,662,851

23,783,684

Income from discontinued operations

-

-

-

-

Net income before noncontrolling interest

15,647,453

5,623,293

30,662,851

23,783,684

Income (loss) attributable to noncontrolling interest

-

(42)

71,653

(823)

Net income - ATAX Partnership

$15,647,453

$5,623,335

$30,591,198

$23,784,507

Net income - ATAX Partnership

15,647,453

5,623,335

30,591,198

23,784,507

   Redeemable preferred unit distributions and accretion

(701,664)

(274,772)

(1,982,538)

(583,407)

Net income available to Partners

$14,945,789

$5,348,563

$28,608,660

$23,201,100

Selected Segment Data (Partnership):

Revenue and Other Income

   Mortgage Revenue Bond Investments

$16,416,455

$10,549,925

$49,100,423

$36,632,574

   MF Properties

13,922,115

3,916,094

31,430,938

31,476,756

   Public Housing Capital Fund Trusts

811,944

709,408

2,951,735

2,888,035

   MBS Securities Investments

-

-

-

66,676

Other Investments

1,322,304

705,898

4,651,752

1,995,123

Total  Revenue and Other Income

$32,472,818

$15,881,325

$88,134,848

$73,059,164

Total Expenses:

   Mortgage Revenue Bond Investments

$8,404,682

$5,963,802

$33,661,840

$24,876,935

   MF Properties

7,390,829

3,931,527

21,762,887

23,033,229

   Public Housing Capital Fund Trusts

1,026,071

362,661

2,112,165

1,349,801

   MBS Securities Investments

-

-

-

14,692

Other Investments

3,783

-

6,758

-

Total

$16,825,365

$10,257,990

$57,543,650

$49,274,657

Net Income (loss) - ATAX Partnership

   Mortgage Revenue Bond Investments

$8,011,773

$4,586,123

$15,438,583

$11,755,639

   MF Properties

6,531,286

(15,433)

9,668,051

8,443,527

   Public Housing Capital Fund Trusts

(214,127)

346,747

839,570

1,538,234

   MBS Securities Investments

-

-

-

51,984

Other Investments

1,318,521

705,898

4,644,994

1,995,123

Income from continuing operations

$15,647,453

$5,623,335

$30,591,198

$23,784,507

15

December 31, 2017

September 30, 2017

June 30, 2017

March 31, 2017

December 31, 2016

September 30, 2016

June 30, 2016

March 31, 2016

Partnership net income

$

15,647,453

$

3,545,483

$

4,109,400

$

7,288,862

$

5,623,335

$

4,623,542

$

11,005,930

$

2,531,700

Change in fair value of derivatives and interest

   rate derivative amortization

(129,595

)

66,917

181,420

121,349

(1,395,730

)

(263,684

)

531,389

1,110,407

Depreciation and amortization expense

1,090,599

1,259,055

1,270,379

1,592,826

1,569,641

1,361,259

1,806,732

2,124,898

Impairment of securities

761,960

-

-

-

-

-

-

-

Impairment charge on real estate assets

-

-

-

-

-

-

61,506

-

Amortization of deferred financing costs

444,299

577,413

562,585

740,238

512,309

425,520

392,493

532,187

Restricted units compensation expense

455,119

550,390

438,893

170,840

802,092

31,050

-

-

Deferred income taxes

(26,000

)

(9,000

)

(201,000

)

(164,000

)

(51,000

)

(136,000

)

553,000

-

Redeemable Series A Preferred Unit distribution

   and accretion

(701,664

)

(523,682

)

(432,550

)

(324,642

)

(274,772

)

(181,969

)

(124,982

)

(1,684

)

Bond purchase premium (discount) amortization

   (accretion), net of cash received

(193,530

)

(26,270

)

(26,741

)

(23,507

)

(27,770

)

(147,033

)

33,668

34,696

Tier 2 Income distributable to the General Partner

(873,893

)

-

(16,224

)

(1,104,401

)

(426,774

)

(291,295

)

(2,096,982

)

(43,599

)

CAD

$

16,474,748

$

5,440,306

$

5,886,162

$

8,297,565

$

6,331,331

$

5,421,390

$

12,162,754

$

6,288,605

Weighted average number of units outstanding, basic

59,895,229

59,811,578

59,862,969

60,037,687

59,995,789

60,176,937

60,252,928

60,252,928

Partnership Only:

Net income, basic and diluted, per unit

$

0.23

$

0.05

$

0.06

$

0.10

$

0.09

$

0.07

$

0.15

$

0.04

CAD per unit, basic

$

0.27

$

0.09

$

0.10

$

0.14

$

0.11

$

0.09

$

0.20

$

0.10

Distributions declared, per unit

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

16

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

15 West Apartments

Vancouver, WA

7/1/2054

6.25

%

$

9,797,833

$

11,637,481

Arbors at Hickory Ridge

Memphis, TN

1/1/2049

6.25

%

11,237,041

13,035,860

Avistar on the Boulevard - Series A

San Antonio, TX

3/1/2050

6.00

%

16,109,972

18,057,437

Avistar at the Crest - Series A

San Antonio, TX

3/1/2050

6.00

%

9,456,384

10,643,526

Avistar (February 2013 Acquisition) - Series B (2 Bonds)

San Antonio, TX

4/1/2050

9.00

%

1,194,783

1,286,887

Avistar at the Oak - Series A

San Antonio, TX

8/1/2050

6.00

%

7,635,895

8,574,360

Avistar in 09 - Series A

San Antonio, TX

8/1/2050

6.00

%

6,593,300

7,310,244

Avistar on the Hill - Series A

San Antonio, TX

8/1/2050

6.00

%

5,275,623

5,924,006

Avistar (June 2013 Acquisition) - Series B (2 Bonds)

San Antonio, TX

9/1/2050

9.00

%

1,000,419

1,070,380

Avistar at Copperfield - Series A

Houston, TX

5/1/2054

5.75

%

10,000,000

10,628,644

Avistar at Copperfield - Series B

Houston, TX

6/1/2054

12.00

%

4,000,000

4,013,514

Avistar at the Parkway - Series A

San Antonio, TX

5/1/2052

6.00

%

13,233,665

14,166,418

Avistar at the Parkway - Series B

San Antonio, TX

6/1/2052

12.00

%

124,861

155,576

Avistar at Wilcrest - Series A

Houston, TX

5/1/2054

5.75

%

3,775,000

3,900,170

Avistar at Wilcrest - Series B

Houston, TX

6/1/2054

12.00

%

1,550,000

1,555,306

Avistar at Wood Hollow - Series A

Austin, TX

5/1/2054

5.75

%

31,850,000

33,715,826

Avistar at Wood Hollow - Series B

Austin, TX

6/1/2054

12.00

%

8,410,000

8,440,276

Bella Vista

Gainesville, TX

4/1/2046

6.15

%

6,295,000

6,337,718

Bridle Ridge

Greer, SC

1/1/2043

6.00

%

7,465,000

7,466,199

Brookstone

Waukegan, IL

5/1/2040

5.45

%

8,979,174

9,467,614

Bruton

Dallas, TX

8/1/2054

6.00

%

18,051,775

21,094,714

Columbia Gardens

Columbia, SC

12/1/2050

5.50

%

13,193,000

14,810,687

Companion at Thornhill Apartments

Lexington, SC

1/1/2052

5.80

%

11,404,758

12,689,199

Concord at Gulfgate - Series A

Houston, TX

2/1/2032

6.00

%

19,185,000

21,944,654

Concord at Little York - Series A

Houston, TX

2/1/2032

6.00

%

13,440,000

15,439,572

Concord at Williamcrest - Series A

Houston, TX

2/1/2032

6.00

%

20,820,000

23,814,839

Copper Gate Apartments

Lafayette, IN

12/1/2029

6.25

%

5,100,000

5,878,339

Courtyard Apartments - Series A

Fullerton, CA

12/1/2033

5.00

%

10,230,000

11,464,286

Courtyard Apartments - Series B

Fullerton, CA

12/1/2018

8.00

%

6,228,000

6,219,905

Cross Creek

Beaufort, SC

3/1/2049

6.15

%

8,168,529

8,986,897

Crossing at 1415 - Series A

San Antonio, TX

12/1/2052

6.00

%

7,540,000

8,174,091

Decatur Angle

Fort Worth, TX

1/1/2054

5.75

%

22,794,912

25,780,867

Glenview - Series A

Cameron Park, CA

12/1/2031

5.75

%

4,627,228

5,150,692

Greens of Pine Glen - Series A

Durham, NC

10/1/2047

6.50

%

8,126,000

9,239,852

Greens of Pine Glen - Series B

Durham, NC

10/1/2047

9.00

%

937,399

1,131,390

Harden Ranch - Series A

Salinas, CA

3/1/2030

5.75

%

6,845,985

8,028,899

Harmony Court Bakersfield - Series A

Bakersfield, CA

12/1/2033

5.00

%

3,730,000

4,160,637

Harmony Terrace - Series A

Simi Valley, CA

1/1/2034

5.00

%

6,900,000

7,773,321

Harmony Terrace - Series B

Simi Valley, CA

1/1/2019

5.50

%

7,400,000

7,397,900

Heights at 515 - Series A

San Antonio, TX

12/1/2052

6.00

%

6,903,000

7,483,522

Heritage Square - Series A

Edinburg, TX

9/1/2051

6.00

%

11,063,027

12,056,636

Lake Forest Apartments

Daytona Beach, FL

12/1/2031

6.25

%

8,505,000

10,084,885

Las Palmas II - Series A

Coachella, CA

11/1/2033

5.00

%

1,695,000

1,889,468

Las Palmas II - Series B

Coachella, CA

11/1/2018

8.00

%

1,770,000

1,768,950

17

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

Live 929

Baltimore, MD

7/1/2049

5.78

%

39,995,000

44,284,289

Montclair - Series A

Lemoore, CA

12/1/2031

5.75

%

2,506,828

2,905,668

Montecito at Williams Ranch Apartments - Series A

Salinas, CA

10/1/2034

5.50

%

7,690,000

8,809,710

Montecito at Williams Ranch Apartments - Series B

Salinas, CA

10/1/2019

5.50

%

4,781,000

4,773,097

Oaks at Georgetown - Series A

Georgetown, TX

1/1/2034

5.00

%

12,330,000

13,254,328

Oaks at Georgetown - Series B

Georgetown, TX

1/1/2019

5.50

%

5,512,000

5,503,377

Ohio Bond - Series A

Ohio

6/1/2050

7.00

%

14,113,000

14,901,199

Ohio Bond - Series B

Ohio

6/1/2050

10.00

%

3,536,060

3,685,690

Pro Nova - 2014-1

Knoxville, TN

5/1/2034

6.00

%

10,000,000

10,172,767

Renaissance - Series A

Baton Rouge, LA

6/1/2050

6.00

%

11,239,441

13,335,769

Rosewood Townhomes - Series A

Goose Creek, SC

7/1/2055

5.75

%

9,280,000

9,280,000

Rosewood Townhomes - Series B

Goose Creek, SC

8/1/2055

12.00

%

470,000

470,000

Runnymede

Austin, TX

10/1/2042

6.00

%

10,150,000

10,229,514

San Vicente - Series A

Soledad, CA

11/1/2033

5.00

%

3,495,000

3,807,215

San Vicente - Series B

Soledad, CA

11/1/2018

8.00

%

1,825,000

1,821,823

Santa Fe - Series A

Hesperia, CA

12/1/2031

5.75

%

3,036,928

3,572,601

Seasons at Simi Valley - Series A

Simi Valley, CA

9/1/2032

5.75

%

4,366,195

5,174,059

Seasons at Simi Valley - Series B

Simi Valley, CA

9/1/2018

8.00

%

1,944,000

1,943,534

Seasons Lakewood - Series A

Lakewood, CA

1/1/2034

5.00

%

7,350,000

8,241,605

Seasons Lakewood - Series B

Lakewood, CA

1/1/2019

5.50

%

5,260,000

5,252,932

Seasons San Juan Capistrano - Series A

San Juan Capistrano, CA

1/1/2034

5.00

%

12,375,000

13,619,434

Seasons San Juan Capistrano - Series B

San Juan Capistrano, CA

1/1/2019

5.50

%

6,574,000

6,563,136

Silver Moon - Series A

Albuquerque, NM

8/1/2055

6.00

%

7,879,590

9,020,038

South Pointe - Series A

Hanahan, SC

7/1/2055

5.75

%

21,600,000

21,600,000

South Pointe - Series B

Hanahan, SC

8/1/2055

12.00

%

1,100,000

1,100,000

Southpark

Austin, TX

12/1/2049

6.13

%

13,300,000

14,653,432

Summerhill - Series A

Bakersfield, CA

12/1/2033

5.00

%

6,423,000

7,164,551

Summerhill - Series B

Bakersfield, CA

12/1/2018

8.00

%

3,372,000

3,369,255

Sycamore Walk - Series A

Bakersfield, CA

1/1/2033

5.25

%

3,632,000

4,122,314

Sycamore Walk - Series B

Bakersfield, CA

1/1/2018

8.00

%

1,815,000

1,814,849

The Palms at Premier Park

Columbia, SC

1/1/2050

6.25

%

19,238,297

21,950,726

Tyler Park Townhomes

Greenfield, CA

1/1/2030

5.75

%

5,965,475

6,773,163

Vantage at Judson

San Antonio, TX

1/1/2053

6.00

%

26,133,557

29,251,526

The Village at Madera - Series A

Madera, CA

12/1/2033

5.00

%

3,085,000

3,441,171

The Village at Madera - Series B

Madera, CA

12/1/2018

8.00

%

1,719,000

1,718,132

Village at River's Edge

Columbia, SC

6/1/2033

6.00

%

10,000,000

11,182,706

Vineyard Gardens - Series A

Oxnard, CA

1/1/2035

5.50

%

3,995,000

3,995,000

Vineyard Gardens - Series B

Oxnard, CA

1/1/2020

5.50

%

2,846,000

2,846,000

Westside Village Market

Shafter, CA

1/1/2030

5.75

%

3,898,427

4,466,850

Willow Run

Columbia, SC

12/1/2050

5.50

%

13,009,000

14,604,123

Woodlynn Village

Maplewood, MN

11/1/2042

6.00

%

4,267,000

4,311,428

$

719,750,361

$

788,838,655

18

Weighted

Weighted Avg.

Principal

Estimated

Name

Average Lives

Coupon Rate

Outstanding

Fair Value

Public Housing Capital Fund Trust Certificate I

7.31

5.39

%

$

24,913,137

$

25,109,305

Public Housing Capital Fund Trust Certificate II

6.37

4.32

%

9,763,546

9,358,291

Public Housing Capital Fund Trust Certificate III

7.61

5.23

%

15,674,330

15,173,992

$

50,351,013

$

49,641,588

19