Segments

Effective in the second quarter of 2015, the Company changed its reportable segments due to the classification of the Company’s Consolidated VIEs as discontinued operations. As a result, the Company now consists of four reportable segments: Mortgage Revenue Bond Investments, MF Properties, Public Housing Capital Fund Trusts, and MBS Investments. In addition to the four reportable segments, the Company also separately reports its consolidation and elimination information because it does not allocate certain items to the segments.

Historically, the Company also had the Consolidated VIE segment, which was comprised of the results of operations of the underlying collateral for the related mortgage revenue bonds. The Company concluded its investment in the Consolidated VIE segment was not consistent with the Company’s portfolio of assets, (see Note 1). As such, the Company decided to implement a strategic shift in direction by discontinuing its Consolidated VIE segment. This decision was made for the following reasons:


•	The risk profile of the Consolidated VIE segment was unique as the substance of the investment was the result of the operations of the underlying properties and not the mortgage revenue bonds (which is the form of the investment).The risk profile includes:

•The underlying properties thin capitalization,

•Related party ownership groups, and

•The lack of ultimate decision-making authority.


•	The stated purpose of the Company was not to manage properties without having some type of ownership or ability to control the underlying property.


•	Subsequent to the disposition of the Consolidated VIE properties by their owners, the Company does not plan to include this type of investment as part of its strategic direction.

As such, in April 2015, the Partnership entered into separate brokerage contracts to sell Bent Tree and Fairmont Oaks. As a result, these entities met the criteria for discontinued operations presentation, and have been classified as such in the Company’s condensed consolidated financial statements for all periods presented. The Consolidated VIEs no longer meet the criteria for segment reporting, therefore are no longer presented as a segment (see Notes 1, 3, 7, and 9).

Mortgage Revenue Bond Investments Segment

The Mortgage Revenue Bond Investments segment consists of the Partnership’s portfolio of mortgage revenue bonds which have been issued to provide construction and/or permanent financing for Residential Properties and commercial properties in their market areas. Such mortgage revenue bonds are held as long-term investments. On September 30, 2015, the Partnership held fifty-nine mortgage revenue bonds, two of which are bonds that are eliminated in consolidation and were reported as Assets held for sale on the Company’s condensed consolidated financial statements. The Residential Properties financed by fifty-three mortgage revenue bonds contain a total of 7,332 rental units. In addition, two of the bonds’ properties are not operational and are under construction and two bonds are collateralized by commercial real estate (see Note 4).

MF Properties Segment

The MF Properties segment consists of indirect equity interests in multifamily, student housing, and senior citizen residential properties which are not currently financed by mortgage revenue bonds held by the Partnership but which the Partnership eventually intends to finance by such bonds through a restructuring. In connection with any such restructuring, the Partnership will be required to dispose of any equity interest held in such MF Properties. The Partnership’s interests in its current MF Properties are not currently classified as Assets held for sale because the Partnership is not actively marketing them for sale, there is no definitive purchase agreement in existence that, under current guidance, can be recognized as a sale of real estate assets and, therefore, no sale is expected in the next twelve months. During the time the Partnership holds an interest in an MF Property, any net rental income generated by the MF Properties in excess of debt service will be available for distribution to the Partnership in accordance with its interest in the MF Property. Any such cash distribution will contribute to the Partnership’s CAD. On September 30, 2015, the Partnership consolidated the results of eight MF Properties containing a total of 2,216 rental units (see Note 7).

Other Investments

The Amended and Restated LP Agreement authorizes the Partnership to make investments other than in mortgage revenue bonds. The amount of other investments is limited based on the conditions to the exemption from registration under the Investment Company Act of 1940. The Partnership currently owns other investments, PHC Certificates and MBS, which are reported as two separate segments.

The PHC Trusts segment consists of the assets, liabilities, and related income and expenses of the PHC Trusts. The Partnership consolidates the PHC Trusts due to its ownership of the LIFERS issued by the three PHC Trusts, which hold custodial receipts evidencing loans made to a number of local public housing authorities. Principal and interest on these loans are payable by the respective public housing authorities out of annual appropriations to be made to the public housing authorities by the HUD under HUD’s Capital Fund Program established under the Capital Fund Program.

The MBS segment consists of the assets, liabilities, and related income and expenses of the MBS TOB Trusts that the Partnership consolidated due to its ownership of the LIFERs issued by the MBS TOB Trusts. These MBS TOB Trusts are securitizations of state-issued mortgage-backed securities which are backed by residential mortgage loans. These investments were acquired during the fourth quarter of 2012 through the second quarter of 2013 and all but three MBS were sold in 2014.

The following table details certain key financial information for the Company’s reportable segments for the three and nine months ended September 30, 2015 and 2014 reflecting the impact of the segment changes discussed above, with the prior year periods recast in order to present that information on a basis consistent with the current year:



	For the Three Months Ended,						For the Nine Months Ended,
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Total revenues
Mortgage Revenue Bond Investments	$	8,238,652		$	6,256,085		$	24,235,550		$	20,444,236
MF Properties	5,312,220			3,675,140			17,118,044			9,959,704
Public Housing Capital Fund Trust Certificates	736,699			734,110			2,254,448			2,311,112
Mortgage-Backed Securities	(202,699		)	378,202			103,022			1,195,880
Total revenues	$	14,084,872		$	11,043,537		$	43,711,064		$	33,910,932

Interest expense
Mortgage Revenue Bond Investments	$	3,719,174		$	1,554,274		$	8,619,039		$	4,078,763
MF Properties	686,334			603,714			2,040,142			1,627,264
Public Housing Capital Fund Trust Certificates	308,889			316,561			905,929			988,958
Mortgage-Backed Securities	39,722			101,324			118,319			334,073
Total interest expense	$	4,754,119		$	2,575,873		$	11,683,429		$	7,029,058

Depreciation expense
Mortgage Revenue Bond Investments	$	—		$	—		$	—		$	—
MF Properties	1,360,720			1,277,548			4,204,599			3,324,026
Public Housing Capital Fund Trust Certificates	—			—			—			—
Mortgage-Backed Securities	—			—			—			—
Total depreciation expense	$	1,360,720		$	1,277,548		$	4,204,599		$	3,324,026

Income (loss) from continuing operations
Mortgage Revenue Bond Investments	$	1,818,273		$	2,944,136		$	8,424,562		$	11,514,499
MF Properties	282,721			(333,452		)	3,026,243			(761,723		)
Public Housing Capital Fund Trust Certificates	427,810			410,396			1,333,771			1,300,694
Mortgage-Backed Securities	(242,421		)	276,878			(15,738		)	859,139
Net income - America First Multifamily Investors, L. P.	$	2,286,383		$	3,297,958		$	12,768,838		$	12,912,609

Net income (loss)
Mortgage Revenue Bond Investments	$	1,818,273		$	2,944,136		$	8,424,562		$	11,514,499
MF Properties	283,093			(330,303		)	3,027,195			(758,097		)
Public Housing Capital Fund Trust Certificates	427,810			410,396			1,333,771			1,300,694
Mortgage-Backed Securities	(242,421		)	276,878			(15,738		)	859,139
Discontinued operations	253,894			6,722			516,609			96,880
Net income - America First Multifamily Investors, L. P.	$	2,540,649		$	3,307,829		$	13,286,399		$	13,013,115

The following table reports the total assets for the Partnership’s reportable segments on September 30, 2015 and December 31, 2014:



	September 30, 2015			December 31, 2014
Total assets
Mortgage Revenue Bond Investments	$	804,938,660		$	698,637,412
MF Properties	144,427,547			101,696,235
Public Housing Capital Fund Trust Certificates	60,294,026			61,577,848
Mortgage-Backed Securities	14,902,212			15,101,309
Assets held for sale	13,180,667			13,204,015
Consolidation/eliminations	(199,342,594		)	(145,977,602		)
Total assets	$	838,400,518		$	744,239,217