MMA Capital Management Announces Fourth Quarter and Full Year 2014 Financial Results, Business Update and Investor Conference Call
BALTIMORE, March 18, 2015 /PRNewswire/ -- MMA Capital Management, LLC (NASDAQ: MMAC) ("MMA" or "the Company") today reported financial results for the year ended December 31, 2014, including common shareholders' equity of $91.5 million, or $12.51 per common share on a fully diluted basis. The Company filed its Annual Report on Form 10-K for the year ended December 31, 2014 (the "2014 Annual Report") with the Securities and Exchange Commission ("SEC") today and will hold an investor call on March 20, 2015 at 8:30 a.m. ET.
The Company reported an increase in equity per share of $1.50 to $12.51 at December 31, 2014 from $11.01 at September 30, 2014 on a fully diluted basis and an increase to common shareholders' equity of $10.1 million for the fourth quarter of 2014 to $91.5 million at December 31, 2014 from $81.4 million at September 30, 2014. The vast majority of the Company's growth during the fourth quarter of 2014 was due to $7.3 million of net income recognized from a real estate equity investment made during the fourth quarter of 2014.
For the full year 2014, common shareholders' equity increased by $26.1 million, or $4.54 per share on a fully diluted basis. The majority of the Company's growth during 2014 was driven by net realized gains on real estate sales and unrealized gains recorded on the bond portfolio.
For the full year 2014, we had an operating cash outflow of $0.2 million. Furthermore, the Company generated $41.6 million of cash from investing activities primarily from real estate sales, and the Company used $78.6 million of cash in financing activities, largely to pay down debt.
Business Update
Michael Falcone, MMA's Chief Executive Officer, stated, "We are pleased with the growth in shareholders' equity during the quarter and year ended December 31, 2014. Across our US Operations, credit quality is stable and asset management and sales have generated significant value. In our International Operations, we closed earlier this week with an investor for roughly $30 million of new capital for our second multi-investor fund, with a possible $50 million of additional capital should we continue to grow the fund. In the fourth quarter we bought back 118,700 shares, and our Board has expanded and extended our buyback plan by another 300,000 shares. We will continue to repurchase shares at prices that we believe are competitive with other investment opportunities and, as such, the Board has approved purchases at prices up to $12.51, our GAAP fully diluted common equity per share at year-end. Although we are not completely satisfied with the pace of our investment, continued discipline has afforded us the opportunity to make isolated investments at favorable projected rates of return. During the fourth quarter we had two transactions that are good examples of such favorable investment opportunities. First, we provided a combined $30.3 million of financing to Morrison Grove Management that financed a management buyout of their existing LIHTC business and also financed the acquisition of substantially all of our LIHTC business. The financing was split into a $13.0 million, 10 year term loan at 12%, 8% of which is current pay, and bridge financing of $17.3 million at 10% that provided an opportunity to put some of our capital to work in the near term. In the second opportunity, we made an equity investment in a real estate joint venture for $8.8 million and recognized $7.3 million of net income associated with this investment during the fourth quarter. We continue to see both investment and business opportunities which we think will allow us to make prudent use of our cash and help us build and expand our existing business lines. Along this front, we are pleased with the traction gained by our newly formed MMA Energy Capital during the first quarter of this year.
With respect to our continued efforts to create value from our balance sheet, we sold substantially all of our LIHTC business to Morrison Grove Management for $15.9 million, while obtaining an option to purchase the combined Morrison Grove Management business, all of which was financed through seller financing, as described above. The transaction resulted in a potential book gain of $15.2 million which was not included in our fourth quarter financial results primarily because the Company retained its yield guarantee to the investors in the LIHTC funds. In addition, the transaction turned an asset management business with limited and unpredictable near-term cash flow into a loan investment with consistent cash flow. With respect to our subordinate debt, our interest-only pay rate is scheduled to increase shortly from the current 75 basis points to LIBOR plus 330 basis points. We are actively engaged in discussions with our lenders to reduce the interest rate going forward in exchange for providing principal amortization. We believe that these discussions may result in amended agreements which mutually benefit the Company and our lenders; however, we cannot make any assurances that any of the three series of loans will be restructured. We do not presently expect to retire any of this subordinated debt at a discount in the foreseeable future. We will continue to look at opportunities to create additional value from our balance sheet and, in the interim, continue to expect favorable conditions to purchase additional shares under our buyback program."
The Company also announced that Lisa Roberts, Chief Financial Officer, would be leaving the Company for personal reasons. Ms. Roberts will step down as Chief Financial Officer on August 31, 2015 and will then provide accounting and finance related consulting services through the filing of the Company's Annual Report for 2015 in March of 2016. Over the course of the next several months, the Company will evaluate alternatives for filling this role going forward. Mr. Falcone stated, "I think it's fair to say we are disappointed to lose Lisa at both a professional and a personal level, but we completely understand. She is leaving for the best of personal reasons and we absolutely wish her well."
Tax Reporting
As a reminder to our shareholders, the Company converted from a partnership to a taxable corporation during calendar year 2013. As a result, shareholders should not expect any tax forms for purposes of preparing their 2014 tax returns. Shareholders should consult their tax advisors should they have any additional questions.
Additional Financial Information
Additional financial information is reflected on Exhibits E and F and will be used during the Company's upcoming conference call. Exhibit E is a non-GAAP presentation that provides an Adjusted Balance Sheet showing on a deconsolidated basis the assets and liabilities that underlie the Company's reported common shareholders' equity at December 31, 2014 and 2013. Exhibit F is a non-GAAP presentation that provides an Adjusted Statement of Comprehensive Income that is a direct attribution of the Company's operating activities that are reported through the collection of the following line items within the Company's GAAP financial statements: Revenue from consolidated funds and ventures ("CFVs"); Expenses from CFVs; Net gains related to CFVs; Equity in losses from Lower Tier Property Partnerships ("LTPPs") of CFVs; Net losses due to deconsolidation of CFVs; Net losses (income) allocable to noncontrolling interests in CFVs and IHS, and Income from discontinued operations, net of tax.
These non-GAAP measures are used by management and are disclosed in addition to the 2014 Annual Report to provide investors a tool to more easily understand the Company's operating results and financial position. Exhibit B reconciles the non-GAAP historical presentation contained in Exhibit E to the Company's GAAP Consolidated Balance Sheets contained in Exhibit A as well as in the Company's 2014 Annual Report. Exhibit D reconciles the non-GAAP presentation contained in Exhibit F to the Company's Consolidated Statements of Operations contained in Exhibit C as well as in the Company's 2014 Annual Report.
Conference Call Information
The Company plans to host a conference call on Friday, March 20, 2015 at 8:30 a.m. ET to provide a business update and review financial results for the full year 2014. The conference call will be webcast. All interested parties are welcome to join the live webcast, which can be accessed through the Company's web site at www.mmacapitalmanagement.com, under Investor Relations. Participants may also join the conference call by dialing toll free 1-888-346-6987 or 1-412-902-4268 for international participants and 1-866-605-3851 for Canadian participants.
An archived replay of the event will be available one hour after the event through 9:00 a.m. on March 27, 2015, toll free at 1-877-344-7529, or 1-412-317-0088 for international participants and 1-855-669-9658 for Canadian participants (Passcode: 10062436).
Upon filing, the 2014 Annual Report will be posted to MMA Capital's web site at www.mmacapitalmanagement.com, under Investor Relations, and will be available at the SEC's web site at www.sec.gov.
Cautionary Statement Regarding Forward-Looking Statements
This Release contains forward-looking statements intended to qualify for the safe harbor contained in Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements often include words such as "may," "will," "should," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "seek," "would," "could," and similar words or are made in connection with discussions of future operating or financial performance.
Forward-looking statements reflect our management's expectations at the date of this Release regarding future conditions, events or results. They are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. Our actual results and financial condition may differ materially from what is anticipated in the forward-looking statements. There are many factors that could cause actual conditions, events or results to differ from those anticipated by the forward-looking statements contained in this Release. These factors include changes in market conditions that affect the willingness of potential investors or lenders to provide us with debt or equity, changes in market conditions that affect the value or marketability of assets we own, changes in market conditions or other factors that affect our access to cash that we may need to meet our commitments to other persons, changes in interest rates or other conditions that affect the value of mortgage loans we have made, changes in interest rates that affect our cost of funds, tax laws, environmental laws or other conditions that affect the value of the real estate underlying mortgage loans we own, and changes in tax laws or other things beyond our control that affect the tax benefits available to us and our investors. Readers are cautioned not to place undue reliance on forward-looking statements. We have not undertaken to update any forward-looking statements in this Release.
MMA: PERFORMANCE BUILT ON INTEGRITY, INNOVATION & SERVICE.
|
EXHIBIT A | |||||||
|
MMA Capital Management, LLC GAAP Consolidated Balance Sheets | |||||||
|
(in thousands, except per share data) |
December 31, 2014 |
December 31, 2013 |
|||||
|
ASSETS |
|||||||
|
1 |
Cash and cash equivalents |
$ |
29,619 |
$ |
66,794 |
||
|
2 |
Restricted cash |
50,189 |
87,903 |
||||
|
3 |
Bonds available-for-sale |
222,899 |
195,332 |
||||
|
4 |
Investments in Lower Tier Partnerships related to CFVs |
231,204 |
286,007 |
||||
|
5 |
SA Fund investments related to CFVs |
− |
158,325 |
||||
|
6 |
Real estate held-for-use, net |
18,417 |
120,576 |
||||
|
7 |
Real estate held-for-sale, net |
10,145 |
24,090 |
||||
|
8 |
Investment in preferred stock |
31,371 |
31,371 |
||||
|
9 |
Other assets |
77,848 |
44,960 |
||||
|
10 |
Total assets |
$ |
671,692 |
$ |
1,015,358 |
||
|
LIABILITIES AND EQUITY |
|||||||
|
11 |
Debt |
$ |
293,489 |
$ |
441,963 |
||
|
12 |
Adjusted accounts payable and accrued expenses |
5,538 |
8,723 |
||||
|
13 |
Unfunded equity commitments to Lower Tier Partnerships related to CFVs |
9,597 |
13,461 |
||||
|
14 |
Other liabilities |
41,870 |
12,352 |
||||
|
15 |
Total liabilities |
$ |
350,494 |
$ |
476,499 |
||
|
Equity: |
|||||||
|
16 |
Noncontrolling interests in CFVs and IHS |
$ |
229,714 |
$ |
473,513 |
||
|
Common shareholders' equity: |
|||||||
|
17 |
Common shares, no par value |
35,032 |
28,687 |
||||
|
18 |
Accumulated other comprehensive income |
56,452 |
36,659 |
||||
|
19 |
Total common shareholders' equity |
91,484 |
65,346 |
||||
|
20 |
Total equity |
321,198 |
538,859 |
||||
|
21 |
Total liabilities and equity |
$ |
671,692 |
$ |
1,015,358 |
||
|
Common shareholders' equity per share |
|||||||
|
22 |
Total common shareholders' equity |
$ |
91,484 |
$ |
65,346 |
||
|
23 |
Common shares outstanding(1) |
7,228 |
8,112 |
||||
|
24 |
Common shareholders' equity per common share |
$ |
12.66 |
$ |
8.06 |
||
|
Fully diluted common shareholders' equity per share |
|||||||
|
25 |
Diluted common shareholders' equity(2) |
$ |
94,448 |
$ |
67,046 |
||
|
26 |
Diluted common shares outstanding(3) |
7,547 |
8,412 |
||||
|
27 |
Fully diluted common shareholders' equity per common share |
$ |
12.51 |
$ |
7.97 |
||
|
(1) Includes shares issued and outstanding as well as non-employee directors' and employee vested deferred shares. | |||||||
|
(2) Excludes the Company's liability for options and deferred shares held by employees unless they are contingent upon a certain share price that has not yet been achieved ($2.8 million and $0.1 million at December 31, 2014 and $1.6 million and $0.1 million at December 31, 2013). | |||||||
|
(3) Includes the common stock equivalents associated with unvested share awards as well as in-the-money option awards unless they are contingent upon a certain share price that has not yet been achieved. The common stock equivalents (and gross share awards outstanding) were 0.3 million (0.4 million) at December 31, 2014 and 2013. | |||||||
|
EXHIBIT B | |||||||||||||||||
|
MMA Capital Management, LLC Reconciliation of Adjusted Balance Sheet December 31, 2014 | |||||||||||||||||
|
(in thousands, unaudited) |
GAAP Balance Sheet |
CFVs |
TRS Derivatives Reclassifications (5) |
Line Item Reclassifications (6) |
Adjusted Balance Sheet |
||||||||||||
|
ASSETS |
|||||||||||||||||
|
1 |
Cash and cash equivalents |
$ |
29,619 |
$ |
− |
$ |
− |
$ |
− |
$ |
29,619 |
||||||
|
2 |
Adjusted restricted cash |
50,189 |
(24,186) |
(1) |
− |
− |
26,003 |
||||||||||
|
3 |
Adjusted bonds available-for-sale |
222,899 |
− |
92,689 |
− |
315,588 |
|||||||||||
|
4 |
Adjusted investments in Lower Tier Property |
231,204 |
(231,204) |
(1) |
− |
− |
− |
||||||||||
|
5 |
Adjusted investment in SA Fund and SA Partnership |
− |
− |
− |
5,689 |
5,689 |
|||||||||||
|
6 |
Adjusted real estate held-for-use, net |
18,417 |
− |
− |
22,529 |
40,946 |
|||||||||||
|
7 |
Real estate held-for-sale, net |
10,145 |
− |
− |
− |
10,145 |
|||||||||||
|
8 |
Investment in preferred stock |
31,371 |
− |
− |
− |
31,371 |
|||||||||||
|
9 |
Adjusted other assets |
77,848 |
(10,738) |
(2) |
(2,382) |
(28,218) |
36,510 |
||||||||||
|
10 |
Total assets |
$ |
671,692 |
$ |
(266,128) |
$ |
90,307 |
$ |
− |
$ |
495,871 |
||||||
|
LIABILITIES AND EQUITY |
|||||||||||||||||
|
11 |
Adjusted debt |
$ |
293,489 |
$ |
(6,712) |
(1) |
$ |
90,185 |
$ |
− |
$ |
376,962 |
|||||
|
12 |
Adjusted accounts payable and accrued expenses |
5,538 |
− |
157 |
− |
5,695 |
|||||||||||
|
13 |
Adjusted unfunded equity commitments to Lower |
9,597 |
(9,597) |
(1) |
− |
− |
− |
||||||||||
|
14 |
Adjusted deferred revenue |
− |
12,123 |
(3) |
− |
2,331 |
14,454 |
||||||||||
|
15 |
Adjusted other liabilities |
41,870 |
(31,831) |
(1) |
(35) |
(2,331) |
7,673 |
||||||||||
|
16 |
Total liabilities |
$ |
350,494 |
$ |
(36,017) |
$ |
90,307 |
$ |
− |
$ |
404,784 |
||||||
|
Equity: |
|||||||||||||||||
|
17 |
Adjusted noncontrolling interests in CFVs and IHS |
$ |
229,714 |
$ |
(230,111) |
(4) |
$ |
− |
$ |
− |
$ |
(397) |
|||||
|
Common shareholders' equity: |
|||||||||||||||||
|
18 |
Adjusted common shares, no par value |
35,032 |
− |
(2,504) |
− |
32,528 |
|||||||||||
|
19 |
Adjusted accumulated other comprehensive income |
56,452 |
− |
2,504 |
− |
58,956 |
|||||||||||
|
20 |
Total common shareholders' equity |
91,484 |
− |
− |
− |
91,484 |
|||||||||||
|
21 |
Total equity |
321,198 |
(230,111) |
− |
− |
91,087 |
|||||||||||
|
22 |
Total liabilities and equity |
$ |
671,692 |
$ |
(266,128) |
$ |
90,307 |
$ |
− |
$ |
495,871 |
||||||
|
(1) Each of these adjustments are reflected on the Company's Consolidated Balance Sheets included with the 2014 Annual Report and denoted as balances related to CFVs. | |||||||||||||||||
|
(2) Represents the removal of $11.1 million of other assets related to CFVs as denoted on the Company's Consolidated Balance Sheets, partially offset by other assets attributable to the Company that were eliminated in consolidation of $0.4 million. | |||||||||||||||||
|
(3) Represents deferred revenue attributable to the Company that was eliminated in consolidation (primarily related to unamortized guarantee fees that the Company received in connection with its low income housing tax credit funds ("LIHTC Funds"). | |||||||||||||||||
|
(4) Represents the amount of noncontrolling interest attributable to the Company's consolidated LIHTC Funds. It does not include the noncontrolling interest attributable to IHS. | |||||||||||||||||
|
(5) These adjustments reflect the removal of derivative assets and liabilities reported through Other assets and Other liabilities on the Company's Consolidated Balance Sheets associated with Total Return Swaps ("TRS") which finance specific bonds, as well as the addition of these bonds and their related debt. Additionally, the net gains associated with these derivatives have been removed from net gains on assets and derivatives and included within other comprehensive income. | |||||||||||||||||
|
(6) These adjustments represent the reclassification of certain assets and liabilities on the Company's Consolidated Balance Sheets to better align with the Company's Adjusted Balance Sheet. | |||||||||||||||||
|
EXHIBIT B, continued | ||||||||||||||
|
MMA Capital Management, LLC Reconciliation of Adjusted Balance Sheet December 31, 2013 | ||||||||||||||
|
(in thousands, unaudited) |
GAAP Balance Sheet |
CFVs |
Line Item Reclassifications (7) |
Adjusted Balance Sheet |
||||||||||
|
ASSETS |
||||||||||||||
|
1 |
Cash and cash equivalents |
$ |
66,794 |
$ |
− |
$ |
− |
$ |
66,794 |
|||||
|
2 |
Adjusted restricted cash |
87,903 |
(52,897) |
(1) |
− |
35,006 |
||||||||
|
3 |
Adjusted bonds available-for-sale |
195,332 |
47,745 |
(2) |
− |
243,077 |
||||||||
|
4 |
Adjusted investments in Lower Tier Property |
286,007 |
(286,007) |
(1) |
− |
− |
||||||||
|
5 |
Adjusted SA Fund investments |
158,325 |
(158,325) |
(1) |
− |
− |
||||||||
|
6 |
Adjusted investment in SA Fund and SA Partnership |
− |
3,627 |
(3) |
1,194 |
4,821 |
||||||||
|
7 |
Adjusted real estate held-for-use, net |
120,576 |
(102,314) |
(1) |
6,270 |
24,532 |
||||||||
|
8 |
Real estate held-for-sale, net |
24,090 |
− |
− |
24,090 |
|||||||||
|
9 |
Investment in preferred stock |
31,371 |
− |
− |
31,371 |
|||||||||
|
10 |
Adjusted other assets |
44,960 |
(19,385) |
(4) |
(7,464) |
18,111 |
||||||||
|
11 |
Total assets |
$ |
1,015,358 |
$ |
(567,556) |
$ |
− |
$ |
447,802 |
|||||
|
LIABILITIES AND EQUITY |
||||||||||||||
|
12 |
Adjusted debt |
$ |
441,963 |
$ |
(91,602) |
(1) |
$ |
− |
$ |
350,361 |
||||
|
13 |
Accounts payable and accrued expenses |
8,723 |
− |
− |
8,723 |
|||||||||
|
14 |
Adjusted unfunded equity commitments to Lower Tier |
13,461 |
(13,461) |
(1) |
− |
− |
||||||||
|
15 |
Adjusted deferred revenue |
− |
16,711 |
(5) |
2,135 |
18,846 |
||||||||
|
16 |
Adjusted other liabilities |
12,352 |
(4,043) |
(1) |
(2,135) |
6,174 |
||||||||
|
17 |
Total liabilities |
$ |
476,499 |
$ |
(92,395) |
$ |
− |
$ |
384,104 |
|||||
|
Equity: |
||||||||||||||
|
18 |
Adjusted noncontrolling interests in CFVs and IHS |
$ |
473,513 |
$ |
(475,161) |
(6) |
$ |
− |
$ |
(1,648) |
||||
|
Common shareholders' equity: |
||||||||||||||
|
19 |
Adjusted common shares, no par value |
28,687 |
− |
− |
28,687 |
|||||||||
|
20 |
Adjusted accumulated other comprehensive income |
36,659 |
− |
− |
36,659 |
|||||||||
|
21 |
Total common shareholders' equity |
65,346 |
− |
− |
65,346 |
|||||||||
|
22 |
Total equity |
538,859 |
(475,161) |
− |
63,698 |
|||||||||
|
23 |
Total liabilities and equity |
$ |
1,015,358 |
$ |
(567,556) |
$ |
− |
$ |
447,802 |
|||||
|
(1) Each of these adjustments are reflected on the Company's Consolidated Balance Sheets included with the 2014 Annual Report and denoted as balances related to CFVs. | ||||||||||||||
|
(2) Represents the carrying basis of the bonds eliminated in consolidation. This amount excludes $2.5 million of net unrealized gains occurring since consolidation that have not been reflected in the Company's common shareholders' equity given that the Company is required to consolidate and account for the real estate. | ||||||||||||||
|
(3) Represents the Company's equity investment in the SA Fund that it manages that was eliminated in consolidation. | ||||||||||||||
|
(4) Represents the removal of $23.7 million of other assets related to CFVs as denoted on the Company's Consolidated Balance Sheets, partially offset by other assets attributable to the Company that were eliminated in consolidation of $4.3 million. | ||||||||||||||
|
(5) Represents deferred revenue attributable to the Company that was eliminated in consolidation (primarily related to unamortized guarantee fees that the Company received in connection with its LIHTC Funds). | ||||||||||||||
|
(6) Represents the amount of noncontrolling interest attributable to the Company's consolidated LIHTC Funds, SA Fund and Lower Tier Property Partnerships ("LTPPs"). It does not include the noncontrolling interest attributable to IHS. | ||||||||||||||
|
(7) These adjustments represent the reclassification of certain assets and liabilities on the Company's Consolidated Balance Sheets to better align with the Company's Adjusted Balance Sheet. | ||||||||||||||
|
EXHIBIT C | |||||||
|
MMA Capital Management, LLC GAAP Consolidated Statements of Operations | |||||||
|
For the year ended December 31, |
|||||||
|
2014 |
2013 |
||||||
|
Interest income |
|||||||
|
1 |
Interest on bonds |
$ |
16,493 |
$ |
37,280 |
||
|
2 |
Interest on loans and short-term investments |
1,114 |
648 |
||||
|
3 |
Total interest income |
17,607 |
37,928 |
||||
|
Interest expense |
|||||||
|
4 |
Bond related debt |
2,392 |
22,996 |
||||
|
5 |
Non-bond related debt |
728 |
1,256 |
||||
|
6 |
Total interest expense |
3,120 |
24,252 |
||||
|
7 |
Net interest income |
14,487 |
13,676 |
||||
|
Non-interest revenue |
|||||||
|
8 |
Income on preferred stock investment |
5,260 |
5,260 |
||||
|
9 |
Other income |
5,396 |
2,650 |
||||
|
10 |
Revenue from CFVs |
16,494 |
20,143 |
||||
|
11 |
Total non-interest revenue |
27,150 |
28,053 |
||||
|
12 |
Total revenues, net of interest expense |
41,637 |
41,729 |
||||
|
Operating and other expenses |
|||||||
|
13 |
Interest expense |
13,776 |
14,988 |
||||
|
14 |
Salaries and benefits |
12,708 |
12,318 |
||||
|
15 |
General and administrative |
3,447 |
4,699 |
||||
|
16 |
Professional fees |
5,372 |
8,492 |
||||
|
17 |
Other expenses |
3,482 |
8,047 |
||||
|
18 |
Expenses from CFVs |
90,435 |
52,572 |
||||
|
19 |
Total operating and other expenses |
129,220 |
101,116 |
||||
|
20 |
Net gains on assets and derivatives |
17,468 |
78,783 |
||||
|
21 |
Net gains on extinguishment of liabilities |
1,899 |
36,583 |
||||
|
22 |
Net gains due to initial real estate consolidation and foreclosure |
2,003 |
10,895 |
||||
|
23 |
Equity in income (losses) from unconsolidated funds and ventures |
6,738 |
(275) |
||||
|
24 |
Net gains related to CFVs |
15,227 |
31,795 |
||||
|
25 |
Equity in losses from Lower Tier Property Partnerships of CFVs |
(32,730) |
(26,609) |
||||
|
26 |
Net losses due to deconsolidation of CFVs |
(23,867) |
− |
||||
|
27 |
Net (loss) income from continuing operations before income taxes |
(100,845) |
71,785 |
||||
|
28 |
Income tax benefit |
45 |
1,304 |
||||
|
29 |
Income from discontinued operations, net of tax |
17,901 |
26,758 |
||||
|
30 |
Net (loss) income |
(82,899) |
99,847 |
||||
|
Loss (income) allocable to noncontrolling interests: |
|||||||
|
31 |
Income allocable to perpetual preferred shareholders of a subsidiary company |
− |
(3,714) |
||||
|
Net losses (income) allocable to noncontrolling interests in CFVs and IHS: |
|||||||
|
32 |
Related to continuing operations |
100,216 |
33,024 |
||||
|
33 |
Related to discontinued operations |
150 |
(1,317) |
||||
|
34 |
Net income to common shareholders |
$ |
17,467 |
$ |
127,840 |
||
|
EXHIBIT D | |||||||||||||||||
|
MMA Capital Management, LLC Reconciliation of Adjusted Statement of Operations December 31, 2014 | |||||||||||||||||
|
(in thousands, unaudited) |
GAAP Consolidated Statement of Operations |
CFVs |
TRS Derivatives Reclass (5) |
Line Item Reclass (6) |
Adjusted Statement of Operations |
||||||||||||
|
Interest income |
|||||||||||||||||
|
1 |
Adjusted interest on bonds |
$ |
16,493 |
$ |
1,526 |
(1) |
$ |
3,493 |
$ |
185 |
$ |
21,697 |
|||||
|
2 |
Interest on loans and short-term investments |
1,114 |
− |
− |
(1,114) |
− |
|||||||||||
|
3 |
Total interest income |
17,607 |
1,526 |
3,493 |
(929) |
21,697 |
|||||||||||
|
Interest expense |
|||||||||||||||||
|
4 |
Adjusted bond related debt |
2,392 |
− |
− |
(2,392) |
− |
|||||||||||
|
5 |
Adjusted non-bond related debt |
728 |
− |
− |
(728) |
− |
|||||||||||
|
6 |
Total interest expense |
3,120 |
− |
− |
(3,120) |
− |
|||||||||||
|
7 |
Net interest income |
14,487 |
1,526 |
3,493 |
2,191 |
21,697 |
|||||||||||
|
Non-interest revenue |
|||||||||||||||||
|
8 |
Income on preferred stock investment |
5,260 |
− |
− |
− |
5,260 |
|||||||||||
|
9 |
Adjusted asset management fees |
− |
4,103 |
(2) |
− |
3,580 |
7,683 |
||||||||||
|
10 |
Adjusted other income |
5,396 |
− |
− |
(2,466) |
2,930 |
|||||||||||
|
11 |
Revenue from CFVs |
16,494 |
(16,494) |
(3) |
− |
− |
− |
||||||||||
|
12 |
Total non-interest revenue |
27,150 |
(12,391) |
− |
1,114 |
15,873 |
|||||||||||
|
13 |
Total revenues, net of interest expense |
41,637 |
(10,865) |
3,493 |
3,305 |
37,570 |
|||||||||||
|
Operating and other expenses |
|||||||||||||||||
|
14 |
Adjusted interest expense |
13,776 |
− |
850 |
3,427 |
18,053 |
|||||||||||
|
15 |
Salaries and benefits |
12,708 |
− |
− |
(12,708) |
− |
|||||||||||
|
16 |
General and administrative |
3,447 |
− |
− |
(3,447) |
− |
|||||||||||
|
17 |
Professional fees |
5,372 |
− |
− |
(5,372) |
− |
|||||||||||
|
18 |
Adjusted other expenses |
3,482 |
− |
− |
20,112 |
23,594 |
|||||||||||
|
19 |
Expenses from CFVs |
90,435 |
(90,435) |
(3) |
− |
− |
− |
||||||||||
|
20 |
Total operating and other expenses |
129,220 |
(90,435) |
850 |
2,012 |
41,647 |
|||||||||||
|
EXHIBIT D, continued | |||||||||||||||||
|
(in thousands, unaudited) |
GAAP Consolidated Statement of Operations |
CFVs |
TRS Derivatives Reclass (5) |
Line Item Reclass (6) |
Adjusted Statement of Operations |
||||||||||||
|
21 |
Net gains on assets and derivatives |
17,468 |
− |
(5,147) |
18,010 |
30,331 |
|||||||||||
|
22 |
Net gains on extinguishment of liabilities |
1,899 |
− |
− |
− |
1,899 |
|||||||||||
|
23 |
Net gains due to initial real estate consolidation and foreclosure |
2,003 |
− |
− |
− |
2,003 |
|||||||||||
|
24 |
Equity in income from unconsolidated funds and ventures |
6,738 |
− |
− |
(6,738) |
− |
|||||||||||
|
25 |
Adjusted other net losses |
− |
(5, 350) |
(4) |
− |
5,699 |
349 |
||||||||||
|
26 |
Net gains related to CFVs |
15,227 |
(15,227) |
(3) |
− |
− |
− |
||||||||||
|
27 |
Equity in losses from Lower Tier Property Partnerships of CFVs |
(32,730) |
32,730 |
(3) |
− |
− |
− |
||||||||||
|
28 |
Net losses due to deconsolidation of CFVs |
(23,867) |
8,417 |
− |
− |
(15,450) |
|||||||||||
|
29 |
Net (loss) income from continuing operations before income taxes |
(100,845) |
100,140 |
(2,504) |
18,264 |
15,055 |
|||||||||||
|
30 |
Income tax benefit |
45 |
− |
− |
(137) |
(92) |
|||||||||||
|
31 |
Income from discontinued operations, net of tax |
17,901 |
− |
− |
(17,901) |
− |
|||||||||||
|
32 |
Net (loss) income |
(82,899) |
100,140 |
(2,504) |
226 |
14,963 |
|||||||||||
|
Loss allocable to noncontrolling interests: |
|||||||||||||||||
|
Net losses (income) allocable to noncontrolling interests in CFVs and IHS: |
|||||||||||||||||
|
33 |
Related to continuing operations |
100,216 |
(100,140) |
− |
(76) |
− |
|||||||||||
|
34 |
Related to discontinued operations |
150 |
− |
− |
(150) |
− |
|||||||||||
|
35 |
Net income to common shareholders |
$ |
17,467 |
− |
(2,504) |
− |
14,963 |
||||||||||
|
(1) Represents interest income on bonds primarily attributable to bonds eliminated in consolidation and recognized through an allocation of income. | |||||||||||||||||
|
(2) Represents asset management fees associated with SA Fund eliminated in consolidation and recognized through an allocation of income. | |||||||||||||||||
|
(3) Each of these adjustments are reflected on the Company's Consolidated Statement of Operations on Exhibit C and denoted as activity related to CFVs. | |||||||||||||||||
|
(4) Represents net losses associated with CFVs eliminated in consolidation and recognized through an allocation of income primarily driven by equity in losses from LTPPs. | |||||||||||||||||
|
(5) These adjustments reflect the removal of derivative net gains reported through Net gains on assets and derivatives on the Company's Consolidated Income Statement associated with TRS which finance specific bonds. Additionally, the net gains associated with these derivatives have been removed from net gains on assets and derivatives and included within accumulated other comprehensive income on the Adjusted Balance Sheet. | |||||||||||||||||
|
(6) These adjustments represent the reclassification of certain income and expenses on the Company's Consolidated Statements of Operations to better align with the Company's Adjusted Statement of Operations. | |||||||||||||||||
|
EXHIBIT D, continued | ||||||||||||||
|
MMA Capital Management, LLC Reconciliation of Adjusted Statement of Operations December 31, 2013 | ||||||||||||||
|
(in thousands, unaudited) |
GAAP Consolidated Statement of Operations |
CFVs |
Line Item Reclass (6) |
Adjusted Statement of Operations |
||||||||||
|
Interest income |
||||||||||||||
|
1 |
Adjusted interest on bonds |
$ |
37,280 |
$ |
2,149 |
(1) |
$ |
1,338 |
$ |
40,767 |
||||
|
2 |
Interest on loans and short-term investments |
648 |
− |
(648) |
− |
|||||||||
|
3 |
Total interest income |
37,928 |
2,149 |
690 |
40,767 |
|||||||||
|
Interest expense |
||||||||||||||
|
4 |
Adjusted bond related debt |
22,996 |
− |
(22,996) |
− |
|||||||||
|
5 |
Adjusted non-bond related debt |
1,256 |
− |
(1,256) |
− |
|||||||||
|
6 |
Total interest expense |
24,252 |
− |
(24,252) |
− |
|||||||||
|
7 |
Net interest income |
13,676 |
2,149 |
24,942 |
40,767 |
|||||||||
|
Non-interest revenue |
||||||||||||||
|
8 |
Income on preferred stock investment |
5,260 |
− |
− |
5,260 |
|||||||||
|
9 |
Adjusted asset management fees |
− |
4,556 |
(2) |
931 |
5,487 |
||||||||
|
10 |
Adjusted other income |
2,650 |
− |
(283) |
2,367 |
|||||||||
|
11 |
Revenue from CFVs |
20,143 |
(20,143) |
(3) |
− |
− |
||||||||
|
12 |
Total non-interest revenue |
28,053 |
(15,587) |
648 |
13,114 |
|||||||||
|
13 |
Total revenues, net of interest expense |
41,729 |
(13,438) |
25,590 |
53,881 |
|||||||||
|
Operating and other expenses |
||||||||||||||
|
14 |
Adjusted interest expense |
14,988 |
28,753 |
43,741 |
||||||||||
|
15 |
Salaries and benefits |
12,318 |
(12,318) |
− |
||||||||||
|
16 |
General and administrative |
4,699 |
(4,699) |
− |
||||||||||
|
17 |
Professional fees |
8,492 |
(8,492) |
− |
||||||||||
|
18 |
Adjusted other expenses |
8,047 |
21,001 |
29,048 |
||||||||||
|
19 |
Expenses from CFVs |
52,572 |
(52,572) |
(3) |
− |
− |
||||||||
|
20 |
Total operating and other expenses |
101,116 |
(52,572) |
24,245 |
72,789 |
|||||||||
|
EXHIBIT D, continued | ||||||||||||||
|
(in thousands, unaudited) |
GAAP Consolidated Statement of Operations |
CFVs |
Line Item Reclass (5) |
Adjusted Statement of Operations |
||||||||||
|
21 |
Adjusted net gains on assets and derivatives |
78,783 |
− |
24,198 |
102,981 |
|||||||||
|
22 |
Net gains on extinguishment of liabilities |
36,583 |
− |
− |
36,583 |
|||||||||
|
23 |
Net gains due to initial real estate consolidation and foreclosure |
10,895 |
− |
− |
10,895 |
|||||||||
|
24 |
Equity in losses from unconsolidated funds and ventures |
(275) |
− |
275 |
− |
|||||||||
|
25 |
Adjusted other net losses |
− |
(1,614) |
(4) |
(3,401) |
(5,015) |
||||||||
|
26 |
Net gains related to CFVs |
31,795 |
(31,795) |
(3) |
− |
− |
||||||||
|
27 |
Equity in losses from Lower Tier Property Partnerships of CFVs |
(26,609) |
26,609 |
(3) |
− |
− |
||||||||
|
28 |
Net (loss) income from continuing operations before income taxes |
71,785 |
32,334 |
22,417 |
126,536 |
|||||||||
|
29 |
Income tax benefit |
1,304 |
− |
− |
1,304 |
|||||||||
|
30 |
Income from discontinued operations, net of tax |
26,758 |
− |
(26,758) |
− |
|||||||||
|
31 |
Net income |
99,847 |
32,334 |
(4,341) |
127,840 |
|||||||||
|
Income allocable to noncontrolling interests: |
||||||||||||||
|
32 |
Income allocable to perpetual preferred shareholders of a subsidiary company |
(3,714) |
− |
3,714 |
− |
|||||||||
|
Net losses (income) allocable to noncontrolling interests in CFVs |
||||||||||||||
|
33 |
Related to continuing operations |
33,024 |
(32,334) |
(3) |
(690) |
− |
||||||||
|
34 |
Related to discontinued operations |
(1,317) |
− |
1,317 |
− |
|||||||||
|
35 |
Net income to common shareholders |
$ |
127,840 |
− |
− |
127,840 |
||||||||
|
(1) Represents interest income on bonds primarily attributable to bonds eliminated in consolidation and recognized through an allocation of income. | ||||||||||||||
|
(2) Represents asset management fees associated with SA Fund eliminated in consolidation and recognized through an allocation of income. | ||||||||||||||
|
(3) Each of these adjustments are reflected on the Company's Consolidated Statement of Operations on Exhibit C and denoted as activity related to CFVs. | ||||||||||||||
|
(4) Represents net losses associated with CFVs eliminated in consolidation and recognized through an allocation of income primarily driven by equity in losses from LTPPs. | ||||||||||||||
|
(5) These adjustments represent the reclassification of certain income and expenses on the Company's Consolidated Statements of Operations to better align with the Company's Adjusted Statement of Operations. | ||||||||||||||
|
EXHIBIT E | |||||||
|
MMA Capital Management, LLC Adjusted Balance Sheets (unaudited) | |||||||
|
(in thousands, except per share data) |
Adjusted Balance Sheet December 31, 2014 |
Adjusted Balance Sheet December 31, 2013 |
|||||
|
ASSETS |
|||||||
|
1 |
Cash and cash equivalents |
$ |
29,619 |
$ |
66,794 |
||
|
2 |
Adjusted restricted cash(1) |
26,003 |
35,006 |
||||
|
3 |
Adjusted bonds available-for-sale(1) |
315,588 |
243,077 |
||||
|
4 |
Adjusted investment in SA Fund and SA Partnership(1) |
5,689 |
4,821 |
||||
|
5 |
Adjusted real estate held-for-use, net(1) |
40,946 |
24,532 |
||||
|
6 |
Real estate held-for-sale, net |
10,145 |
24,090 |
||||
|
7 |
Investment in preferred stock |
31,371 |
31,371 |
||||
|
8 |
Adjusted other assets(1) |
36,510 |
18,111 |
||||
|
9 |
Total assets |
$ |
495,871 |
$ |
447,802 |
||
|
LIABILITIES AND EQUITY |
|||||||
|
10 |
Adjusted debt(1) |
$ |
376,962 |
$ |
350,361 |
||
|
11 |
Adjusted accounts payable and accrued expenses |
5,695 |
8,723 |
||||
|
12 |
Adjusted deferred revenue(1) |
14,454 |
18,846 |
||||
|
13 |
Adjusted other liabilities(1) |
7,673 |
6,174 |
||||
|
14 |
Total liabilities |
$ |
404,784 |
$ |
384,104 |
||
|
Equity: |
|||||||
|
15 |
Adjusted noncontrolling interests in CFVs and IHS(1) |
$ |
(397) |
$ |
(1,648) |
||
|
Common shareholders' equity: |
|||||||
|
16 |
Adjusted common shares, no par value(1) |
32,528 |
28,687 |
||||
|
17 |
Adjusted accumulated other comprehensive income(1) |
58,956 |
36,659 |
||||
|
18 |
Total common shareholders' equity |
91,484 |
65,346 |
||||
|
19 |
Total equity |
91,087 |
63,698 |
||||
|
20 |
Total liabilities and equity |
$ |
495,871 |
$ |
447,802 |
||
|
Common shareholders' equity per share |
|||||||
|
21 |
Total common shareholders' equity |
$ |
91,484 |
$ |
65,346 |
||
|
22 |
Common shares outstanding(2) |
7,228 |
8,112 |
||||
|
23 |
Common shareholders' equity per common share |
$ |
12.66 |
$ |
8.06 |
||
|
Fully diluted common shareholders' equity per share |
|||||||
|
24 |
Diluted common shareholders' equity(3) |
$ |
94,448 |
$ |
67,046 |
||
|
25 |
Diluted common shares outstanding(4) |
7,547 |
8,412 |
||||
|
26 |
Fully diluted common shareholders' equity per common share |
$ |
12.51 |
$ |
7.97 |
||
|
(1) Indicates a non-GAAP financial measure. See Exhibit B for a reconciliation between the Adjusted Balance Sheet at December 31, 2014 and 2013, as presented above, and the Consolidated Balance Sheets included with the Company's 2014 Annual Report. Rows not indicated by the footnote reflect amounts as presented on the Company's Consolidated Balance Sheets included with the Company's 2014 Annual Report. | |||||||
|
(2) Includes shares issued and outstanding as well as non-employee directors' and employee vested deferred shares. | |||||||
|
(3) Excludes the Company's liability for options and deferred shares held by employees unless they are contingent upon a certain share price that has not yet been achieved ($2.8 million and $0.1 million at December 31, 2014 and $1.6 million and $0.1 million at December 31, 2013). | |||||||
|
(4) Includes the common stock equivalents associated with unvested share awards as well as in-the-money option awards unless they are contingent upon a certain share price that has not yet been achieved. The common stock equivalents (and gross share awards outstanding) were 0.3 million (0.4 million) at December 31, 2014 and 2013. | |||||||
|
EXHIBIT F | |||||||
|
MMA Capital Management, LLC | |||||||
|
Adjusted Statements of Comprehensive Income | |||||||
|
For the year ended December 31, |
|||||||
|
(in thousands, unaudited) |
2014 |
2013 |
|||||
|
1 |
Adjusted bond interest income(1) |
$ |
21,697 |
$ |
40,767 |
||
|
2 |
Income on preferred stock investment |
5,260 |
5,260 |
||||
|
3 |
Adjusted asset management fees (1) |
7,683 |
5,487 |
||||
|
4 |
Adjusted other income(1) |
2,930 |
2,367 |
||||
|
5 |
Total income |
37,570 |
53,881 |
||||
|
6 |
Adjusted interest expense(1) |
(18,053) |
(43,741) |
||||
|
7 |
Adjusted operating expenses(1) |
(23,594) |
(29,048) |
||||
|
8 |
Total expense |
(41,647) |
(72,789) |
||||
|
9 |
Adjusted net gains on assets and derivatives(1) |
30,331 |
102,981 |
||||
|
10 |
Net gains on extinguishment of liabilities |
1,899 |
36,583 |
||||
|
11 |
Net gains due to real estate consolidation and foreclosure |
2,003 |
10,895 |
||||
|
12 |
Adjusted other net income (losses) (1) |
349 |
(5,015) |
||||
|
13 |
Net losses due to deconsolidation of CFVs |
(15,450) |
− |
||||
|
14 |
Adjusted income tax (expense) benefit(1) |
(92) |
1,304 |
||||
|
15 |
Net income to common shareholders |
$ |
14,963 |
$ |
127,840 |
||
|
16 |
Adjusted total other comprehensive income (loss) to common shareholders(1) |
22,297 |
(102,028) |
||||
|
17 |
Comprehensive income to common shareholders |
$ |
37,260 |
$ |
25,812 |
||
|
(1) Indicates a non-GAAP financial measure. See Exhibit D for a reconciliation between the adjusted measures presented above and the Consolidated Statements of Operations included with the Company's 2014 Annual Report. | |||||||
SOURCE MMA Capital Management, LLC
Share this article