MMA Capital 8K Results of Operations and Financial Condition | Trading Symbol(s) MMAC MMAC 12 Nov 04

Exhibit 99.1

MUNICIPAL MORTGAGE & EQUITY, LLC

EARNINGS PACKAGE

QUARTER ENDED SEPTEMBER 30, 2004

TABLE OF CONTENTS


GAAP Income Statement for the three and nine months ended September 30, 2004	Page	1
Variance Analysis for GAAP	Page	3
Rolling Five Quarters – GAAP	Page	5
Calculation of Diluted Earnings Per Share	Page	6
GAAP Net Income to CAD reconciliation for the Rolling Five Quarters	Page	7
GAAP Net Income to CAD reconciliation for the three and nine months ended September 30, 2004	Page	9
CAD Statement for the three and nine months ended September 30, 2004	Page	11
Variance Analysis for CAD	Page	12
Rolling Five Quarters – CAD	Page	14
Condensed Balance Sheets and Book Value Per Share	Page	15
Analysis of Consolidated Balance Sheet Components	Page	16
Summary of 3rd Quarter 2004 Investment Activity	Page	18
Participating Portfolio Property Net Operating Income Trends	Page	19
Units, Occupancy and Average Rents for Bond Portfolio	Page	20

MUNICIPAL MORTGAGE & EQUITY, LLC
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(unaudited)


	For the three months ended						For the nine months ended
	September 30,						September 30,
	2004			2003			2004			2003
INCOME:
Interest income
Interest on bonds and residual interests in bond securitizations	$	21,663		$	15,894		$	62,505		$	46,614
Interest on loans		10,872			9,790			32,981			27,594
Interest on short-term investments		1,338			309			4,004			832

Total interest income		33,873			25,993			99,490			75,040

Fee income
Syndication fees		6,861			5,764			14,802			9,000
Origination and brokerage fees		2,769			862			6,534			3,779
Guarantee fees		2,093			1,891			5,452			2,114
Asset management and advisory fees		1,685			3,191			9,818			5,465
Loan servicing fees		1,059			1,051			3,316			3,254
Other income		1,308			1,692			4,851			6,975

Total fee income		15,775			14,451			44,773			30,587

Net rental income		5,520			—			11,016			—

Total income		55,168			40,444			155,279			105,627

EXPENSES:
Interest expense		18,802			12,696			54,576			31,788
Interest expense on debentures and preferred shares		4,769			2,994			11,819			2,994
Salaries and benefits		17,824			12,065			53,868			26,702
General and administrative		7,276			3,272			17,627			6,928
Professional fees		2,478			1,105			6,703			2,971
Depreciation and amortization		3,825			3,108			9,700			4,192

Total expenses		54,974			35,240			154,293			75,575

Net gain on sale of loans		406			1,623			2,816			3,343
Net gain (loss) on sale of tax-exempt investments		(660	)		2,194			545			2,188
Net gain on sale of investments in tax credit equity partnerships		125			4,471			2,939			4,747
Net gain on termination of derivatives		—			—			—			741
Net holding gains (losses) on derivatives		(2,062	)		3,498			3,436			3,922
Impairments and valuation allowances related to investments		(2,646	)		—			(3,376	)		(1,144	)
Net losses from equity investments in partnerships		(46,250	)		(1,608	)		(127,985	)		(3,961	)

Net (losses) income before income taxes, income allocable to minority interest, discontinued operations and cumulative effect of accounting change		(50,893	)		15,382			(120,639	)		39,888
Income tax benefit (expense)		(73	)		2,622			2,264			3,094

Net (losses) income before income allocable to minority interest, discontinued operations, and cumulative effect of accounting change		(50,966	)		18,004			(118,375	)		42,982
Net income (expense) allocable to minority interest		51,663			131			128,427			(5,548	)

Net income before discontinued operations and cumulative effect of accounting change		697			18,135			10,052			37,434
Discontinued operations		10,865			—			10,865			25,748

Net income before cumulative effect of accounting change		11,562			18,135			20,917			63,182
Cumulative effect of a change in accounting principle		—			—			520			—

Net income	$	11,562		$	18,135		$	21,437		$	63,182

MUNICIPAL MORTGAGE & EQUITY, LLC
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(unaudited)


Basic earnings per common share:
Earnings before discontinued operations and cumulative effect of accounting change	$	0.02	$	0.63	$	0.29	$	1.32
Discontinued operations		0.31		—		0.31		0.91
Cumulative effect of a change in accounting principle		—		—		0.02		—

Basic earnings per common share	$	0.33	$	0.63	$	0.62	$	2.23

Weighted average common shares outstanding		34,927,975		28,842,447		34,343,492		28,353,040

Diluted earnings per common share:
Earnings before discontinued operations and cumulative effect of accounting change	$	0.02	$	0.62	$	0.29	$	1.30
Discontinued operations		0.31		—		0.31		0.90
Cumulative effect of a change in accounting principle		—		—		0.02		—

Diluted earnings per common share	$	0.33	$	0.62	$	0.62	$	2.20

Weighted average common shares outstanding		35,267,697		29,224,605		34,696,145		28,711,892

VARIANCE ANALYSIS FOR GAAP

3rd Quarter 2004 Compared to 3rd Quarter 2003:

GAAP net income for the third quarter of 2004 decreased $6.6 million compared to the same period last year due primarily to the following changes:

	(1)		An $8.4 million decrease in net gain on sale of loans, tax-exempt investments and tax credit equity partnerships;

	(2)		a $6.1 million increase in other operating expenses of which $5.0 million relates to tax credit equity funds consolidated pursuant to FIN 46R and $1.1 million relates to higher legal and accounting fees attributable to Sarbanes-Oxley compliance initiatives and new transactions;

	(3)		a $5.8 million increase in salaries and benefits due primarily to employment growth, bonuses, other compensation costs and tax credit equity funds consolidated pursuant to FIN 46R;

	(4)		a $5.6 million decrease in the fair value of derivatives;

	(5)		a $2.7 million increase in impairments on investments related to an other than temporary impairment taken on a tax-exempt bond; and

	(6)		a $2.7 million increase in income tax expense primarily related to a reduction in net operating losses attributable to TC Corp;

Offset in part by:

	(7)		a $10.9 million increase in discontinued operations resulting from the sale of a property acquired in a deed in lieu of foreclosure;

	(8)		a net increase of $7.0 million attributable to losses from equity investments in partnerships and income allocable to minority interests;

	(9)		an increase of $5.5 million in net rental income resulting from the consolidation of tax credit equity funds pursuant to FIN 46R; and

	(10)		a $1.3 million net increase in syndication fees, asset management fees, guarantee fees and other income generated by increased production in the tax credit equity business.

Year-to-date 2004 Compared to Year-to-date 2003:

GAAP net income for the nine months ended September 30, 2004 decreased $41.7 million compared to the same period last year due primarily to the following changes:

	(1)		A $27.2 million increase in salaries and benefits due primarily to a July 2003 acquisition, employment growth, bonuses, other compensation costs and tax credit equity funds consolidated pursuant to FIN 46 R;

	(2)		a $19.9 million increase in other operating expenses of which $10.3 million relates to tax credit equity funds consolidated pursuant to FIN 46R and $9.6 million relates primarily to new transactions, a 2003 acquisition and higher legal and accounting fees attributable to Sarbanes-Oxley compliance initiatives;

	(3)		a $14.9 million decrease in discontinued operations resulting from the sale of a property acquired in a deed in lieu of foreclosure;

	(4)		a $7.2 million decrease in net interest income;

	(5)		a $4.7 million decrease in net gain on sale of loans, tax-exempt investments and tax credit equity partnerships and termination of derivatives;

	(6)		a $2.3 million increase in impairments on investments primarily related to an other than temporary impairment taken on a tax-exempt bond;

	(7)		a $0.8 million decrease in income tax benefit primarily related to a reduction in the net operating losses attributable to TC Corp; and

	(8)		a $0.5 million decrease in the fair value of derivatives;

Offset in part by:

	(9)		a $14.2 million net increase in syndication fees, asset management fees, guarantee fees and other income generated by increased production in the tax credit equity business and the 2003 acquisition;

	(10)		an increase of $11.0 million in net rental income resulting from the consolidation of tax credit equity funds pursuant to FIN 46R;

	(11)		a net increase of $10.1 million attributable to losses from equity investments in partnerships and income allocable to minority interest; and

	(12)		a $0.5 million increase in cumulative effect of accounting change.

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
	9/30/04			6/30/04			03/31/04			12/31/03			09/30/03
INCOME:
Interest income
Interest on bonds and residual interests in bond securitizations	$	21,663		$	21,340		$	19,502		$	16,232		$	15,894
Interest on loans		10,872			11,388			10,721			9,616			9,790
Interest on short-term investments		1,338			1,859			807			305			309

Total interest income		33,873			34,587			31,030			26,153			25,993

Fee income
Syndication fees		6,861			4,190			3,751			17,856			5,764
Origination and brokerage fees		2,769			2,848			917			2,805			862
Loan servicing fees		2,093			1,139			1,119			981			1,051
Asset management and advisory fees		1,685			1,967			6,166			4,871			3,191
Guarantee fees		1,059			1,506			1,853			1,500			1,891
Other income		1,308			1,705			1,837			1,881			1,692

Total fee income		15,775			13,355			15,643			29,894			14,451

Net rental revenue		5,520			5,496			—			—			—

Total income		55,168			53,438			46,673			56,047			40,444

EXPENSES:
Interest expense		18,802			20,310			15,464			11,720			12,696
Interest expense on debentures and preferred shares		4,769			4,004			3,046			3,194			2,994
Salaries and benefits		17,824			20,460			15,584			15,034			12,065
General and administrative		7,276			6,653			3,698			4,223			3,272
Professional fees		2,478			2,731			1,494			1,217			1,105
Depreciation and amortization		3,825			3,936			1,939			3,300			3,108

Total expenses		54,974			58,094			41,225			38,688			35,240

Net gain on sale of loans		406			1,730			680			1,521			1,623
Net gain (loss) on sale of tax-exempt investments		(660	)		1,013			192			(4,525	)		2,194
Net gain on sale of investments in tax credit equity partnerships		125			379			2,435			2,471			4,471
Net gain (loss) on termination of derivatives		—			—			—			(193	)		—
Net holding gains (losses) on derivatives		(2,062	)		7,853			(2,355	)		2,400			3,498
Impairments and valuation allowances related to investments		(2,646	)		(430	)		(300	)		(5,839	)		—
Net losses (gains) from equity investments in partnerships		(46,250	)		(71,224	)		(10,511	)		788			(1,608	)
Income tax benefit (expense)		(73	)		(173	)		2,510			(2,956	)		2,622
Income (expense) allocable to minority interest		51,663			76,659			105			(485	)		131

Net income from continuing operations		697			11,151			(1,796	)		10,541			18,135
Discontinued operations		10,865			—			—			—			—
Cumulative effect of a change in accounting principle		—			—			520			(1,228	)		—

Net income	$	11,562		$	11,151		$	(1,276	)	$	9,313		$	18,135

EARNINGS PER COMMON SHARE:
Basic earnings per common share:
Net income from continuing operations	$	0.02		$	0.32		$	(0.06	)	$	0.33		$	0.63
Discontinued operations		0.31			—			—			—			—
Cumulative effect of a change in accounting principle		—			—			0.02			(0.04	)		—

Basic earnings per common share	$	0.33		$	0.32		$	(0.04	)	$	0.29		$	0.63

Weighted average common shares outstanding		34,927,975			34,800,580			33,301,337			32,496,904			28,842,447
Diluted earnings per common share:
Net income from continuing operations	$	0.02		$	0.32		$	(0.06	)	$	0.32		$	0.62
Discontinued operations		0.31			—			—			—			—
Cumulative effect of a change in accounting principle					—			0.02			(0.04	)		—

Diluted earnings per common share	$	0.33		$	0.32		$	(0.04	)	$	0.28		$	0.62

Weighted average common shares outstanding		35,267,697			35,140,968			33,679,188			32,894,390			29,224,605

Municipal Mortgage & Equity, LLC
Reconciliation of Basic and Diluted EPS
(unaudited)


	For the three months ended September 30, 2004						For the three months ended September 30, 2003
	Income		Shares		Per Share		Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
*(in thousands, except share and per share data)*
Basic EPS
Net income from continuing operations	$	697			$	0.02	$	18,135			$	0.63
Discontinued operations		10,865				0.31						—

Income allocable to common shares	$	11,562		34,927,975	$	0.33	$	18,135		28,842,447	$	0.63

Effect of Dilutive Securities
Options and deferred shares				339,722						382,158

Diluted EPS
Net income from continuing operations	$	697			$	0.02	$	18,135			$	0.62
Discontinued operations		10,865				0.31		—				—

Income allocable to common shares	$	11,562		35,267,697	$	0.33	$	18,135		29,224,605	$	0.62


	For the nine months ended September 30, 2004						For the nine months ended September 30, 2003
	Income		Shares		Per Share		Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
*(in thousands, except share and per share data)*
Basic EPS
Net income from continuing operations	$	10,052			$	0.29	$	37,434			$	1.32
Discontinued operations		10,865				0.31		25,748				0.91
Cumulative effect of a change in accounting principle		520				0.02		—				—

Income allocable to common shares	$	21,437		34,343,492	$	0.62	$	63,182		28,353,040	$	2.23

Effect of Dilutive Securities
Options and deferred shares				352,654						358,852

Diluted EPS
Net income from continuing operations	$	10,052			$	0.29	$	37,434			$	1.30
Discontinued operations		10,865				0.31		25,748				0.90
Cumulative effect of a change in accounting principle		520				0.02		—				—

Income allocable to common shares	$	21,437		34,696,146	$	0.62	$	63,182		28,711,892	$	2.20

MUNICIPAL MORTGAGE & EQUITY, LLC
RECONCILIATION OF GAAP INCOME TO CASH AVAILABLE FOR DISTRIBUTION
(in thousands)
(unaudited)


	Qtr Ended			Qtr Ended			Qtr Ended			Qtr Ended			Qtr Ended
	9/30/04			6/30/04			03/31/04			12/31/03			09/30/03
INCOME:
Interest income
Interest on bonds and residual interests in bond securitizations	$	21,663		$	21,340		$	19,502		$	16,232		$	15,894
Interest on loans		10,872			11,388			10,721			9,616			9,790
Interest on short-term investments		1,338			1,859			807			305			309

Total interest income		33,873			34,587			31,030			26,153			25,993

Fee income
Syndication fees		6,861			4,190			3,751			17,856			5,764
Origination and brokerage fees		2,769			2,848			917			2,805			862
Loan servicing fees		1,059			1,139			1,119			981			1,051
Asset management and advisory fees		1,685			1,967			6,166			4,871			3,191
Guarantee fees		2,093			1,506			1,853			1,500			1,891
Other income		1,308			1,705			1,837			1,881			1,692

Total fee income		15,775			13,355			15,643			29,894			14,451

Net rental income		5,520			5,496			—			—			—

Total income		55,168			53,438			46,673			56,047			40,444

EXPENSES:
Interest expense		18,802			20,310			15,464			11,720			12,696
Interest expense on preferred shares		4,769			4,004			3,046			3,194			2,994
Salaries and benefits		17,824			20,460			15,584			15,034			12,065
General and administrative		7,276			6,653			3,698			4,223			3,272
Professional fees		2,478			2,731			1,494			1,217			1,105
Depreciation and amortization		3,825			3,936			1,939			3,300			3,108

Total expenses		54,974			58,094			41,225			38,688			35,240

Net gain on sale of loans		406			1,730			680			1,521			1,623
Net gain (loss) on sale of tax-exempt investments		(660	)		1,013			192			(4,525	)		2,194
Net gain on sale of investments in tax credit equity partnerships		125			379			2,435			2,471			4,471
Net loss on termination of derivatives		—			—			—			(193	)		—
Net holding gains (losses) on derivatives		(2,062	)		7,853			(2,355	)		2,400			3,498
Impairments and valuation allowances related to investments		(2,646	)		(430	)		(300	)		(5,839	)		—
Net losses from equity investments in partnerships		(46,250	)		(71,224	)		(10,511	)		788			(1,608	)
Income tax benefit (expense)		(73	)		(173	)		2,510			(2,956	)		2,622
Net income allocable to minority interest		51,663			76,659			105			(485	)		131

Net income from continuing operations		697			11,151			(1,796	)		10,541			18,135
Discontinued operations		10,865			—			—			—			—
Cumulative effect of a change in accounting principle		—			—			520			(1,228	)		—

Net income	$	11,562		$	11,151		$	(1,276	)	$	9,313		$	18,135

Conversion to Cash Available for Distribution:
(1) Mark to market adjustments	$	2,061		$	(7,853	)	$	2,355		$	(2,400	)	$	(3,498	)
(2) Equity investments		(437	)		1,985			2,866			(235	)		1,995
(3) Net gain on sales		5,450			(1,663	)		(125	)		(2,211	)		(577	)
(3) Amortization of capitalized mortgage servicing fees		382			464			403			385			390
(3) Amortization of asset management contracts		1,179			1,179			1,179			2,458			2,422
(4) Origination and brokerage fees, syndication fees and other income, net		13,117			17,471			1,852			2,650			2,675
(5) Valuation allowances and other-than-temporary impairments		2,664			430			326			3,037			—
(6) Deferred tax expense		(494	)		(13	)		(2,514	)		21			(2,622	)
(7) Discontinued operations		(10,865	)		—			—			—			—
(7) Interest income		1,676			—			—			—			—
(8) Fund (income) loss		(1,142	)		(1,866	)		5,930			4,775			(3,629	)
(9) Cumulative change in accounting principle		—			—			(520	)		1,228			—
(10) Deferred compensation		41			39			2,525			—			—

Cash Available for Distribution (CAD)	$	25,194		$	21,324		$	13,001		$	19,021		$	15,291

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 gains and losses are not included in the Company’s calculation of CAD.

(2) For GAAP reporting, the Company accounts for various investments in partnerships using the equity accounting method. As a result, the Company’s allocable share of the income or loss from the partnerships is reported in income (losses) from equity investments in partnerships. The income from these partnerships includes depreciation expense and changes in the fair value of investments in derivatives. For GAAP reporting, distributions are treated as a return of capital. For CAD reporting, the Company records the cash distributions it receives from the partnerships as other income.

(3) For GAAP reporting, the Company recognizes non-cash gains and losses and amortization of intangible assets, including (a) non-cash gains and losses associated with the sale of assets or capitalization of certain mortgage servicing rights; (b) amortization of certain mortgage servicing rights over the estimated life of the serviced loans; and (c) amortization of certain asset management contracts recorded in connection with a July 2003 acquisition. These non-cash items are not included in CAD.

(4) This adjustment reflects the net difference, for the relevant period, between fees reflected in income when received for CAD and the recognition of fees for GAAP. This line item reflects several types of income:

(a) Origination fees and certain other income amounts, which are recognized as income when received for CAD purposes, but for GAAP reporting are amortized over the life of the associated investment.

(b) Syndication fees, which are recognized as income when earned for CAD purposes, but for GAAP reporting a portion of the fee may be deferred until investors have paid in greater than 20% of their total capital contributions to the tax credit funds. For quarters ended and after June 30, 2004, for GAAP purposes syndication fees relating to certain tax credit equity funds are eliminated in consolidation as a result of consolidating those funds under Financial Interpretation No.46 (Revised), “Consolidation of Variable Interest Entities” (“FIN 46R”).

(c) Guarantee fees, which are recognized as income when received for CAD purposes, but for GAAP reporting are recorded into income over the guarantee period.

(d) Asset management fees, which are recognized as income when earned and collectible for CAD purposes, but for GAAP purposes are applied first to relieve accounts receivable recorded in conjunction with the July 2003 acquisition and second as income consistent with CAD revenue recognition. For the quarter ended June 30, 2004 and after, for GAAP purposes asset management fees relating to certain tax credit equity funds are eliminated as a result of consolidating certain tax credit equity funds under FIN 46R.

(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.

(7) For GAAP reporting, the Company recognized a gain upon the sale of a property. This gain was required to be classified as discontinued operations because the Company owned the property prior to the sale. For CAD reporting, the gain was significantly less due to recording a portion of the proceeds as interest income. In addition, the carrying value of the tax-exempt bond associated with the property was significantly more for CAD due to an impairment previously recognized for GAAP.

(8) For those of the Company’s tax credit equity syndication funds in which the Company provides a guarantee or otherwise has continuing involvement in the underlying assets of the fund, GAAP accounting requires the Company to record the net income (loss) from the fund. This non-cash item is not reflected in CAD. In addition, as a result of the adoption of FIN 46R, the company determined its residual interests in non-guaranteed tax credit equity funds represented equity interests in variable interest entities (“VIEs”) and the Company was the primary beneficiary of certain of those VIEs and, therefore, was required to consolidate the funds. The GAAP earnings (loss) from these tax credit equity funds is not included in CAD.

(9) In conjunction with (8) above, as a result of the adoption of FIN 46R, the Company recorded a cumulative effect adjustment for GAAP accounting. This adjustment is not included in CAD.

(10) For GAAP reporting, the Company records an expense for certain deferred compensation arrangements. These same non-cash costs are not included in the Company’s calculation of CAD until funds are disbursed.

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,						September 30,
	2004			2003			2004			2003
INCOME:
Interest income
Interest on bonds and residual interests in bond securitizations	$	21,663		$	15,894		$	62,505		$	46,614
Interest on loans		10,872			9,790			32,981			27,594
Interest on short-term investments		1,338			309			4,004			832

Total interest income		33,873			25,993			99,490			75,040

Fee income
Syndication fees		6,861			5,764			14,802			9,000
Origination and brokerage fees		2,769			862			6,534			3,779
Guarantee fees		2,093			1,891			5,452			2,114
Asset management and advisory fees		1,685			3,191			9,818			5,465
Loan servicing fees		1,059			1,051			3,316			3,254
Other income		1,308			1,692			4,851			6,975

Total fee income		15,775			14,451			44,773			30,587

Net rental income		5,520			—			11,016			—

Total income		55,168			40,444			155,279			105,627

EXPENSES:
Interest expense		18,802			12,696			54,576			31,788
Interest expense on debentures and preferred shares		4,769			2,994			11,819			2,994
Salaries and benefits		17,824			12,065			53,868			26,702
General and administrative		7,276			3,272			17,627			6,928
Professional fees		2,478			1,105			6,703			2,971
Depreciation and amortization		3,825			3,108			9,700			4,192

Total expenses		54,974			35,240			154,293			75,575

Net gain on sale of loans		406			1,623			2,816			3,343
Net gain (loss) on sale of tax-exempt investments		(660	)		2,194			545			2,188
Net gain on sale of investments in tax credit equity partnerships		125			4,471			2,939			4,747
Net gain on termination of interest rate swaps		—			—			—			741
Net holding gains (losses) on derivatives		(2,062	)		3,498			3,436			3,922
Impairments and valuation allowances related to investments		(2,646	)		—			(3,376	)		(1,144	)
Net gains (losses) from equity investments in partnerships		(46,250	)		(1,608	)		(127,985	)		(3,961	)
Income tax benefit (expense)		(73	)		2,622			2,264			3,094
Net income allocable to minority interest		51,663			131			128,427			(5,548	)

Net income from continuing operations		697			18,135			10,052			37,434
Discontinued operations		10,865			—			10,865			25,748
Cumulative effect of a change in accounting principle		—			—			520			—

Net income	$	11,562		$	18,135		$	21,437		$	63,182

Conversion to Cash Available for Distribution:
(1) Mark to market adjustments	$	2,061		$	(3,498	)	$	(3,437	)	$	(3,922	)
(2) Equity investments		(437	)		1,995			4,414			7,586
(3) Net gain on sales		5,450			(577	)		3,662			(11,390	)
(3) Amortization of capitalized mortgage servicing fees		382			390			1,249			1,156
(3) Amortization of asset management contracts		1,179			2,422			3,537			2,422
(4) Origination and brokerage fees, syndication fees and other income, net		13,117			2,675			32,440			4,291
(5) Valuation allowances and other-than-temporary impairments		2,664			—			3,420			1,097
(6) Deferred tax expense		(494	)		(2,622	)		(3,021	)		(1,010	)
(7) Discontinued operations		(10,865	)		—			(10,865	)		(25,748	)
(7) Interest income		1,676			—			1,676			10,793
(8) Fund (income) loss		(1,142	)		(3,629	)		2,922			(3,629	)
(9) Change in Accounting Principle		—			—			(520	)		—
(10) Deferred compensation		41			—			2,605			—

Cash Available for Distribution (CAD)	$	25,194		$	15,291		$	59,519		$	44,828

Notes:

(a) Origination fees and certain other income amounts, which are recognized as income when received for CAD purposes, but for GAAP reporting are amortized over the life of the associated investment.

(c) Guarantee fees, which are recognized as income when received for CAD purposes, but for GAAP reporting are recorded into income over the guarantee period.

(d) Asset management fees, which are recognized as income when earned and collectible for CAD purposes, but for GAAP purposes are applied first to relieve accounts receivable recorded in conjunction with the July 2003 acquisition, and second as income consistent with CAD revenue recognition. For the quarter ended June 30, 2004 and after, for GAAP purposes asset management fees relating to certain tax credit equity funds are eliminated as a result of consolidating certain tax credit equity funds under FIN 46R.

(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.

(9) In conjunction with (8) above, as a result of the adoption of FIN 46R, the Company recorded a cumulative effect adjustment for GAAP accounting. This adjustment is not included in CAD.

(10) For GAAP reporting, the Company records an expense for certain deferred compensation agreements. These same non-cash costs are not included in the Company’s calculation of CAD until funds are disbursed.

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,
	2004			2003			2004			2003
SOURCES OF CASH:
Interest on bonds, residual interests in bond securitizations and loans	$	33,299		$	24,626		$	94,500		$	81,071
Syndication fees		14,610			6,588			30,533			9,824
Asset management and advisory fees		5,351			3,777			16,915			6,051
Origination and brokerage fees		2,458			1,887			8,619			5,758
Guarantee fees		1,929			692			6,995			705
Loan servicing fees		2,087			1,708			5,900			5,452
Distributions from equity investments in partnerships		2,074			1,946			5,879			5,493
Other income		1,322			1,692			5,312			7,991
Interest on short-term investments		1,173			277			3,890			801
Net gain (loss) on sales		4,970			3,239			6,670			(4,843	)

TOTAL SOURCES OF CASH		69,273			46,432			185,213			118,303

EXPENSES:
Interest expense		15,614			11,920			45,834			29,861
Interest expense on debentures and preferred shares (Note 1)		4,769			2,994			11,819			2,994
Salaries and benefits		17,005			12,065			49,743			26,702
Professional fees		2,262			1,105			6,237			2,971
General and administrative		3,880			3,057			11,348			6,995
Loan loss expense		(18	)		—			(44	)		47
Income tax expense (benefit)		567			—			757			(2,084	)

TOTAL EXPENSES		44,079			31,141			125,694			67,486

CASH AVAILABLE FOR DISTRIBUTION		25,194			15,291			59,519			50,817

LESS:
Cash allocable to minority interest (Note 1)		—			—			—			5,989

CASH AVAILABLE FOR DISTRIBUTION TO COMMON SHARES	$	25,194		$	15,291		$	59,519		$	44,828

CAD PER COMMON SHARE	$	0.72		$	0.53		$	1.70		$	1.55

CALCULATION OF CASH DISTRIBUTION:
CASH AVAILABLE FOR DISTRIBUTION TO COMMON SHARES	$	25,194		$	15,291		$	59,519		$	44,828

ACTUAL AMOUNT PAID	$	16,398		$	14,643		$	48,476		$	40,383

PAYOUT RATIO		65.1	%		95.8	%		81.4	%		90.1	%

COMMON SHARES OUTSTANDING		35,074,882			32,540,412

CASH DISTRIBUTION PER COMMON SHARE	$	0.4675		$	0.4500		$	1.3875		$	1.3425

Note 1: As the result of adopting Financial Accounting Standards Board Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”, as of July 1, 2003 the Company was required to reclassify its preferred shareholders’ equity of $160.5 million, recording the $168.0 million redemption obligation as a liability and the $7.5 million of preferred equity issue costs as an asset, to be amortized until the redemption dates, on the consolidated balance sheets. In addition, amounts previously classified as distributions paid to the preferred shareholders have been recorded as interest expense starting in the third quarter of 2003.

Note 2: Certain prior year amounts have been reclassified to conform to the 9/30/04 presentation.

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 certain fees, which for CAD purposes are recognized when received but for GAAP purposes are amortized into income over the relevant period. 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, deferred compensation and capitalization of mortgage servicing rights, which are not included in the calculation of CAD. As a result of Financial Interpretation No.46 (Revised), “Consolidation of Variable Interest Entities”, effective in the second quarter of 2004 certain asset management and syndication fees are eliminated for GAAP as a result of consolidating certain tax credit equity funds.

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 and vesting of deferred shares.

VARIANCE ANALYSIS FOR CAD

3rd Quarter 2004 Compared to 3rd Quarter 2003:

CAD for the third quarter of 2004 increased $9.9 million over the same period last year due primarily to the following changes:

	(1)		A $9.8 million increase in syndication and asset management fees generated by an increase in production from the tax credit equity fund business;

	(2)		a $5.3 million increase in net interest income (interest on bonds, residual interests in bond securitizations and loans less interest expense attributable to bonds, residual interests in bond securitizations and loans) as a result of an $8.7 million, or 35%, increase in interest income on bonds and loans and a $3.4 million, or 30%, increase in interest expense;

	(3)		a $1.7 million increase in net gain on sale due primarily from the sale of a property acquired by deed in lieu of foreclosure;

	(4)		a $1.2 million increase in guarantee fees as a result of closing a new guaranteed tax credit equity fund;

	(5)		a $0.6 million increase in income on short-term investments due primarily to reimbursement of warehousing costs from tax credit equity funds;

Offset in part by:

	(6)		a $4.9 million increase in salaries and benefits due to growth in headcount and an increase in bonus expense accruals;

	(7)		a $1.8 million increase in interest expense on debentures and preferred shares due to the interest associated with the issuance of $60.0 million and $24.0 million of Trust Preferred Securities in May and September 2004, respectively;

	(8)		a $1.1 million increase in professional fees primarily due to an increase in accounting and legal expenses related to Sarbanes-Oxley compliance initiatives and new transactions; and

	(9)		a $0.6 million increase in income tax expense due to higher taxable income at the state level.

Year-to-Date 2004 Compared to Year-to-Date 2003:

CAD income for the nine months ended September 30, 2004 increased $14.7 million over the same period last year due primarily to the following changes:

	(1)		A $31.3 million increase in syndication and asset management fees generated by the tax credit equity fund business primarily as a result of a July 2003 acquisition and increased production;

	(2)		an $11.5 million increase in net gain on sale due primarily to

	(i)		$10.8 million loss recorded in 2003 on the termination of interest rate swaps;

	(ii)		$1.4 million increase in gain on sale of tax exempt bonds and taxable loans; offset in part by

	(iii)		$0.7 million decrease in gain on sale of loans to GNMA, FNMA and other conduit lenders;

	(3)		a $6.3 million increase in guarantee fee income resulting from the closing of new guaranteed tax credit equity funds;

	(4)		a $2.9 million increase in origination and brokerage fees due primarily to an increase in tax-exempt bond and permanent loan originations;

	(5)		a $2.0 million increase in income on short-term investments due primarily to reimbursement of warehousing costs from tax credit equity funds;

	(6)		a $0.8 million increase in distributions from equity investments in partnerships (additional investments), construction administrative fees and loan servicing fees;

Offset in part by:

	(7)		a $28.5 million increase in operating expenses excluding professional fees, primarily due to a $22.1 million increase from the tax credit equity fund business from additional employees and expenses from the July 2003 HCI acquisition;

	(8)		a $2.8 million increase in interest expense on debentures and preferred shares due primarily to the adoption of FAS No. 150 as of July 1, 2003 requiring that amounts previously classified as distributions be recorded as interest expense on a prospective basis; as a result, only one quarter of interest is included in the prior year whereas three quarters of interest are included in the current year; additionally, the increase is attributable to the issuance of the $60.0 and $24.0 million of Trust Preferred Securities in May and September 2004, respectively;

	(9)		a $2.8 million increase in income tax expense due to an increase in taxable income at the state level;

	(10)		a $2.7 million decrease in other income composed primarily of:

	(i)		a $4.6 million decrease in fees earned on nonrecurring transactions including prepayment penalties, a fee on a conventional equity transaction and other income related to the sale of a property (Northpointe); offset in part by

	(ii)		$1.0 million of other fee income generated by the tax credit equity business, which includes general partner fees, disposition fees and investment valuation services;

	(iii)		a $0.5 million increase in income on written put options;

	(iv)		a $0.5 million increase in fees from cancellations, extensions, applications and late charges;

	(11)		a $2.2 million increase in professional fees primarily due to an increase in accounting and legal expenses related to Sarbanes-Oxley compliance initiatives and new transactions; and

	(12)		a $1.4 million decrease in net interest income (interest on bonds, residual interests in bond securitizations and loans less interest expense attributable to bonds, residual interests in bond securitizations and loans) due primarily to:

	(i)		$10.8 million of deferred base interest and yield maintenance collected in 2003 upon the sale of Northpointe; partially offset by,

	(ii)		a $9.4 million increase in net interest income on bonds and loans.

MUNICIPAL MORTGAGE & EQUITY, LLC
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
	9/30/04			6/30/04			03/31/04			12/31/03			09/30/03
SOURCES OF CASH:
Interest on bonds, residual interests in bond securitizations and loans	$	33,299		$	32,342		$	28,859		$	24,708		$	24,626
Syndication fees		14,610			11,190			4,733			18,004			6,588
Asset management and advisory fees		5,351			5,398			6,166			6,267			3,777
Origination and brokerage fees		2,458			4,191			1,970			4,047			1,887
Guarantee fees		1,929			4,566			500			527			692
Loan servicing fees		2,087			1,940			1,873			1,705			1,708
Distributions from equity investments in partnerships		2,074			1,887			1,918			2,123			1,946
Other income		1,322			2,152			1,838			1,880			1,692
Interest on short-term investments		1,173			1,930			787			1,264			277
Net gain on sales		4,970			1,089			611			878			3,239

TOTAL SOURCES OF CASH		69,273			66,685			49,255			61,403			46,432

EXPENSES:
Interest expense		15,614			15,481			14,739			12,372			11,920
Interest expense on debentures and preferred shares		4,769			4,004			3,046			3,276			2,994
Salaries and benefits		17,005			19,679			13,059			15,034			12,065
Professional fees		2,262			2,481			1,494			1,217			1,105
General and administrative		3,880			3,529			3,939			4,746			3,057
Loan loss expense		(18	)		—			(26	)		2,802			—
Income tax expense		567			187			3			2,935			—

TOTAL EXPENSES		44,079			45,361			36,254			42,382			31,141

CASH AVAILABLE FOR DISTRIBUTION		25,194			21,324			13,001			19,021			15,291
CAD PER COMMON SHARE	$	0.72		$	0.61		$	0.37		$	0.58		$	0.53

COMMON SHARES OUTSTANDING		35,074,882			34,893,770			34,840,630			32,576,380			28,917,912

CALCULATION OF CASH DISTRIBUTION:
CASH AVAILABLE FOR DISTRIBUTION TO COMMON SHARES	$	25,194		$	21,324		$	13,001		$	19,021		$	15,291

ACTUAL AMOUNT PAID	$	16,398		$	16,138		$	15,940		$	14,739		$	14,643

PAYOUT RATIO (Note 1)		65.1	%		75.7	%		122.6	%		77.5	%		95.8	%

COMMON SHARES OUTSTANDING FOR DISTRIBUTION (Note 1)		35,074,882			34,893,770			34,840,630			32,576,380			32,540,512

CASH DISTRIBUTION PER COMMON SHARE	$	0.4675		$	0.4625		$	0.4575		$	0.4525		$	0.4500

Note 1: The payout ratio calculation for the quarter ended 9/30/03 is based on 32,540,412 common shares outstanding to reflect the 3,622,500 common shares issued in October 2003 that received the third quarter distribution.

Note 2: Certain prior quarter amounts have been reclassified to conform to the 9/30/04 presentation.

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 certain fees, which for CAD purposes are recognized when received but for GAAP purposes are amortized into income over the relevant period. 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, deferred compensation, amortization of goodwill and intangibles and capitalization of mortgage servicing rights, which are not included in the calculation of CAD. As a result of Financial Interpretation No.46 (Revised), “Consolidation of Variable Interest Entities”, effective in the second quarter of 2004 certain asset management and syndication fees are eliminated for GAAP as a result of consolidating certain tax credit equity funds.

MUNICIPAL MORTGAGE & EQUITY, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)


	September 30,		December 31,
	2004		2003
ASSETS:
Investment in tax-exempt bonds, net	$	1,220,367	$	1,043,973
Loans receivable, net		611,539		497,884
Loans receivable held for sale		43,110		54,492
Investments in partnerships		1,638,319		282,492
Investments in derivative financial instruments		3,086		2,563
Cash, cash equivalents and interest receivable		82,833		67,669
Other assets		280,435		160,453
Land, building, and equipment		171,497		5,429
Goodwill and other intangible assets		130,232		134,664

TOTAL	$	4,181,418	$	2,249,619

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Notes payable	$	1,036,019	$	646,096
Mortgage notes payable		122,228		—
Short-term debt		427,693		371,881
Long-term debt		174,675		190,090
Subordinate debentures		84,000		—
Preferred shares subject to mandatory redemption (Note 1)		168,000		168,000
Tax credit equity guarantee liability		159,079		151,326
Distribution payable		16,399		—
Investments in derivative financial instruments		12,374		15,287
Other liabilities		113,197		65,073
Minority interest in subsidiary companies		1,207,312		31
Shareholders’ equity		660,442		641,835

TOTAL	$	4,181,418	$	2,249,619

BOOK VALUE PER COMMON SHARE	$	18.87	$	19.74

Note 1:

As the result of adopting Financial Accounting Standards Board Statement of Financial Accounting Standard No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”, as of July 1, 2003 the Company was required to reclassify its preferred shareholders’ equity of $160.5 million, recording the $168.0 million redemption obligation as a liability and the $7.5 million of preferred equity issue costs as an asset, to be amortized until the redemption dates, on the consolidated balance sheets. In addition, amounts previously classified as distributions paid to the preferred shareholders have been recorded as interest expense starting in the third quarter of 2003.

Municipal Mortgage & Equity, LLC
Analysis of Consolidated Balance Sheet Components

The table on page 17 provides an overview, organized according to major categories of invested assets or product types, of the Company’s assets and liabilities as of September 30, 2004. Management believes this presentation provides helpful detail on the components of the Company’s leverage and how the Company’s assets and liabilities relate to those major categories. The table also provides data on the Company’s off-balance-sheet bond securitizations as of September 30, 2004 in order to permit comparison of the Company’s leverage based on the GAAP balance sheet alone to leverage inclusive of those off-balance-sheet items. Readers are cautioned that (1) this table does not reflect formal operating units or business segments within the Company, (2) shareholders’ equity for each of columns A through G was calculated by taking assets minus liabilities for each column, and the related columnar shareholder equity figures should not, therefore, be construed as representing the actual or notional equity supporting the invested assets or product type represented by a given column, (3) various items grouped in column E (Other) relate to other columns but have been aggregated in column E for ease of presentation and simplicity (e.g., cash is not allocated among the various columns), and (4) the preferred equity interest in MuniMae TE Bond Subsidiary, LLC has been presented in a separate column F to highlight subsidiary preferred shares reclassified as debt as of July 1, 2003 according to Statement of Financial Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.”

MUNICIPAL MORTGAGE & EQUITY, LLC
ANALYSIS OF CONSOLIDATED BALANCE SHEET COMPONENTS
September 30, 2004
(in thousands, except percentages)
(unaudited)

	(A)			(B)		(C)		(D)		(E)			(F)			(G)			(H)			(I)		(J)
	Bond												Preferred						Balance					Adjusted
	Securitizations					Tax		CAPREIT					Equity in			Tax			Sheet			Off Balance		Balance Sheet
	and			Taxable		Credit		Equity					TE Bond			Credit			September 30,			Sheet Bond		September 30,
	Derivatives (1)			Lending (2)		Operations (3)		Investments (4)		Other			Sub (5)			Funds (6)			2004			Securitizations		2004
ASSETS
Investment in tax-exempt bonds, net	$	1,220,367		$	—	$	—	$	—	$	—		$	—		$	—		$	1,220,367		$	147,397	$	1,367,764
Loans receivable, net		27,993			581,250				2,296		—									611,539					611,539
Loans receivable held for sale					43,110						—									43,110					43,110
Investments in partnerships							89,324		70,273		(3	)					1,478,725			1,638,319					1,638,319
Investment in derivative financial instruments		3,086									—									3,086					3,086
Cash and cash equivalents											63,984									63,984					63,984
Interest receivable											18,849									18,849					18,849
Restricted assets		2,345							19,477		16,879						157,551			196,252					196,252
Other assets					7,915		27,603				32,300			7,299			(2,326	)		72,791					72,791
Land, building, and equipment											5,205						166,292			171,497					171,497
Mortgage servicing rights, net					11,392						—									11,392					11,392
Goodwill (7)					15,855		88,875				1,880									106,610					106,610
Other intangibles							23,622				—									23,622					23,622

Total assets	$	1,253,791		$	659,522	$	229,424	$	92,046	$	139,094		$	7,299		$	1,800,242		$	4,181,418		$	147,397	$	4,328,815

LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes payable	$	85,442		$	578,497	$	82,917	$	—		—		$	—		$	289,163		$	1,036,019		$	—	$	1,036,019
Mortgage notes payable											—						122,228			122,228					122,228
Short-term debt		427,693									—									427,693					427,693
Long-term debt		174,675									—									174,675			147,397		322,072
Debentures							84,000				—									84,000					84,000
Preferred shares subject to mandatory redemption											—			168,000						168,000					168,000
Tax credit syndication guarantee liability											—						159,079			159,079					159,079
Distribution payable											16,399									16,399					16,399
Investment in derivative financial instruments		12,374									—									12,374					12,374
Accounts payable and accrued expenses											24,988						1,338			26,326					26,326
Interest payable		3,033			3,685		253				—			4,356			4,610			15,937					15,937
Unearned revenue and other liabilities					21,991		5,399				10,083						33,461			70,934					70,934

Total liabilities		703,217			604,173		172,569		—		51,470			172,356			609,879			2,313,664			147,397		2,461,061

Minority interest in subsidiary companies																	1,207,312			1,207,312					1,207,312
Liabilities/Assets		56%	(9)		92%		75%		0%		37%			2361%			34%			55.3%	(10)		100%		56.9%
Percentage of liabilities — balance sheet 9/30/04		30%			26%		8%		0%		2%			8%			26%			100%			N/A		N/A
Percentage of liabilities — adjusted balance sheet 9/30/04		29%			25%		7%		0%		2%			7%			24%			N/A			6%		100%
Total shareholders’ equity (8)		550,574			55,349		56,855		92,046		87,624			(165,057	)		(16,949	)		660,442			—		660,442

Total liabilities and shareholders’ equity	$	1,253,791		$	659,522	$	229,424	$	92,046	$	139,094		$	7,299		$	1,800,242		$	4,181,418		$	147,397	$	4,328,815

NOTES

(1)		Bond securitizations and derivatives includes the Company’s investments in tax-exempt bonds, bond related investments and derivatives and the related on-balance sheet debt and cash collateral.
(2)		Taxable lending includes the Company’s construction and permanent loans and the related borrowings from the Midland Affordable Housing Group Trust, pension funds and lines of credit.
(3)		Tax credit operations includes the Company’s investment in properties and advances to tax credit equity funds and the related borrowings under lines of credit.
(4)		CAPREIT equity investments includes the taxable equity investments in the CAPREIT joint ventures and the related cash collateral.
(5)		Due to Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” the preferred shares issued by TE Bond Subsidiary have been reclassified to debt.
(6)		Tax credit funds reflects the consolidation of assets and liabilities of certain tax credit equity funds under two GAAP rules: Financial Interpretation No. 46, “Consolidation of Variable Interest Entities (Revised)” (FIN 46R), which requires consolidation of certain funds which are considered “variable interest entities”; and Statement of Financial Accounting Statement No. 66, “Accounting for Sales of Real Estate”, which requires consolidation of funds where the Company has provided investors a guarantee or has continuing involvement with the assets of the funds. The great majority of assets, and all of the minority interest in subsidiary company, shown in this column relates to funds consolidated as of September 30, 2004 pursuant to FIN 46R.
(7)		Goodwill of $31.7 million related to the 1999 purchase of the Midland Companies has been allocated equally between taxable lending and tax credit operations.
(8)		Shareholders’ equity was calculated by taking assets minus liabilities and minority interest for each column, and therefore these amounts do not accurately represent the actual or notional amount of equity attributable to each column.
(9)		Including the assets and liabilities from off balance sheet bond securitizations the percentage relating to bond securitizations and derivatives would be 61%.
(10)		Adjusted to include minority interest as a liability the percentage would be 84%. Adjusted to exclude the assets and liabilities of the tax credit funds the percentage would be 72%.

MUNICIPAL MORTGAGE & EQUITY, LLC
2004 INVESTMENTS
THIRD QUARTER AND YTD
(In thousands)

UNRATED
BOND PRODUCTION:

										TOTAL FEES
						QUARTER				RECOGNISED		YTD				TOTAL FEES
			PERMANENT			BOND VOLUME				THIS QUARTER		BOND VOLUME				RECOGNIZED
			INTEREST													YTD
PROPERTY	CITY	STATE	RATE			CONSTRUCTION		PERMANENT		FOR CAD		CONSTRUCTION		PERMANENT		FOR CAD
Ashton Arbors	Marietta	GA		6.70	%	$	8,600	$	8,600	$	65	$	8,600	$	8,600	$	65
Kensington Place	Houston	TX		6.50	%		12,750		12,750		223		12,750		12,750		223
Mammoth Lakes	Mammoth Lakes	CA		6.55	%		5,500		5,500		64		5,500		5,500		64
Pinnacle Park	Dallas	TX		6.55	%		10,750		10,750		188		10,750		10,750		188
Primrose at Pasadena	Pasadena	TX		6.60	%		12,180		12,180		91		12,180		12,180		91
Witmer Manor	Los Angeles	CA		6.55	%		8,834		8,834		155		8,834		8,834		155

							58,614		58,614		786		58,614		58,614		786
First Quarter Volume													14,050		49,280		364
Second Quarter Volume													94,500		94,500		1,337

TOTAL							58,614		58,614		786		167,164		202,394		2,487



RATED BOND PRODUCTION:
										TOTAL FEES
						QUARTER				RECOGNISED		YTD				TOTAL FEES
			PERMANENT			BOND VOLUME				THIS QUARTER		BOND VOLUME				RECOGNIZED
			INTEREST													YTD
PROPERTY	CITY	STATE	RATE			CONSTRUCTION		PERMANENT		FOR CAD		CONSTRUCTION		PERMANENT		FOR CAD
Falcon Crest	Louisville	KY		6.07	%	$	—	$	10,075	$	97	$	—	$	10,075	$	97
Jacob’s Hill Village Apartments	Cortlandt	NY		7.20	%		—		5,000		54		—		5,000		54
The Sycamore	Shrewsbury	NJ		Var			—		15,750		149		—		15,750		149

							—		30,825		300		—		30,825		300
First Quarter Volume													—		—		—
Second Quarter Volume													—		22,600		196

TOTAL							—		30,825		300		—		53,425		496

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)	$	280,885	$	14,610	$	616,205	$	30,533
Tax Credit Acquisition Production	$	209,277	$	—	$	543,107	$	—
Conventional Equity Production	$	4,808	$	168	$	21,717	$	760
Conventional Lending Production

Taxable Construction Loan Production (generating a weighted average spread of .91%)	$	61,740	$	454	$	286,707	$	1,352
Taxable Permanent Loan Production	$	83,995	$	1,232	$	313,796	$	4,552
Supplemental Loan Production	$	10,830	$	12	$	31,676	$	92
OTHER INFORMATION:
Balance as of 9/30/04 of Permanent Loan Servicing Portfolio under Management	$	1,269,227	$	1,050			$	3,293
Balance as of 9/30/04 of Equity Syndication Portfolio under Management	$	5,961,570	$	5,165			$	15,687

MMA FINANCIAL, LLC
PARTICIPATING BOND PORTFOLIO
NET OPERATING INCOME — TREND
As of September 30, 2004


		Q3 2003		Q2 2004		Q3 2004		Q3 ’04 /			Q3 ’04 /
	Property	Actual		Actual		Actual (2)		Q3 ’03			Q2 ’04
	Alban		257,691		246,424		304,896		18.3	%		23.7	%
⁽¹⁾	Arlington		-40,828		-52,911		1,924		-104.7	%		-103.6	%
	Barkley Place		366,616		381,418		379,319		3.5	%		-0.6	%
⁽¹⁾	Barrington at Beach Street		119,151		273,855		266,527		123.7	%		-2.7	%
	Cobblestone		143,010		151,642		143,346		0.2	%		-5.5	%
⁽¹⁾	Cool Springs		7,450		10,326		1,817		-75.6	%		-82.4	%
	Creekside		288,752		253,292		282,074		-2.3	%		11.4	%
	Crossings		171,944		182,956		156,549		-9.0	%		-14.4	%
	Gilman Meadows		150,792		142,450		156,410		3.7	%		9.8	%
	Hamilton Grove		186,469		222,879		240,612		29.0	%		8.0	%
	Jefferson Commons		355,883		321,387		225,142		-36.7	%		-29.9	%
	Mallard I		28,865		29,604		35,812		24.1	%		21.0	%
	Mallard II		106,601		95,315		112,784		5.8	%		18.3	%
	Montclair		375,541		313,345		368,570		-1.9	%		17.6	%
	Newport Village		169,351		222,096		182,015		7.5	%		-18.0	%
	Nicollet Ridge		269,064		378,995		383,674		42.6	%		1.2	%
	Palisades Park		259,080		265,287		245,583		-5.2	%		-7.4	%
	Riverset I		342,677		427,293		359,507		4.9	%		-15.9	%
	Riverset II		124,114		142,815		133,186		7.3	%		-6.7	%
	Steeplechase Falls		398,027		371,629		343,976		-13.6	%		-7.4	%
	Meadows		133,055		118,717		132,757		-0.2	%		11.8	%
	Timber Ridge		127,235		124,349		124,841		-1.9	%		0.4	%
	Villas at LaRiviera		216,117		225,162		208,091		-3.7	%		-7.6	%
	Whispering Lake		339,534		262,414		316,124		-6.9	%		20.5	%

	Total		4,896,190		5,110,741		5,105,534		4.3	%		-0.1	%
	Same Store Growth		4,810,417		4,879,471		4,835,266		0.5	%		-0.9	%

⁽¹⁾ In Lease-up. Quarterly totals are not included in Same Store Growth calculations.

⁽²⁾ Q3 2004 includes July and August actuals plus the September budget.

					Occupancy												Avg. Monthly Rent Per Apartment Unit
					Month Ended			Month Ended			Month Ended			Month Ended			Month Ended		Month Ended		Month Ended		Month Ended
		Month/Year	Apartment		Sept 30			Jun 30			Sept 30			Sept 30			Aug 31		Jun 30		Sept 30		Sept 30
Apartment Community	Location	Acquired	Units		2004			2004			2003			2002			2004		2004		2003		2002
Participating Mortgage Bonds:
Alban Place	Frederick, MD	Sep-86		194		94.0	%		93.8	%		94.8	%		95.4	%		1,003		979		974		937
Cobblestone	San Antonio, TX	Aug-99		184		91.8	%		93.5	%		97.8	%		93.5	%		574		594		584		572
Creekside Village	Sacramento, CA	Nov-87		296		98.0	%		95.6	%		96.3	%		99.7	%		619		616		603		570
Crossings	Lithonia, GA	Jan-97		200		91.0	%		92.5	%		86.0	%		94.0	%		765		765		760		744
Jefferson Commons	San Marcos, TX	Dec-00		173		91.9	%		86.7	%		89.0	%		82.7	%		1,399		1,268		1,234		1,231
Timber Ridge	San Antonio, TX	Dec-00		168		94.0	%		95.8	%		92.9	%		98.8	%		463		481		495		496
Villas at LaRiviera	Sacramento, CA	Jun-99		199		92.5	%		85.9	%		88.5	%		98.0	%		725		728		711		700

Subtotal Participating Mortgage Bonds				1,414

Mortgage Bonds
Applewood (a.k.a. Paola)	Paola, KS	Jul-99		48		100.0	%		97.9	%		97.9	%		95.8	%		566		566		566		517
Autumn Oaks/Crest at Thousand Oaks		Feb-03		410		87.4	%		93.1	%		87.8	%		N/A			539		530		516		N/A
Charter House (2)	Lenexa, KS	Dec-96		—		N/A			N/A			N/A			N/A			N/A		N/A		N/A		N/A
Cielo Vista	El Paso, TX	Aug-99		378		93.1	%		95.8	%		95.5	%		93.7	%		427		423		423		425
Country Club	Topeka, KS	Jul-99		101		68.0	%		63.4	%		85.1	%		85.1	%		458		441		445		439
Delta Village	Stockton, CA	Jun-99		80		93.8	%		95.0	%		97.5	%		96.3	%		632		627		591		583
Diamond Fork		Feb-04		60		76.7	%		90.0	%		N/A			N/A			672		671		N/A		N/A
Elmbrooke	Minnetonka, MN	Aug-00		54		100.0	%		100.0	%		100.0	%		100.0	%		1,085		1,085		1,062		1,022
Florida A&M (8)	Tallahassee, FL	Feb-00		96		75.0	%		89.6	%		100.0	%		90.6	%		1,641		1,592		1,646		1,383
Fort Branch	Austin, TX	Dec-00		250		92.4	%		91.2	%		88.4	%		36.8	%		679		679		718		821
Gannon (Dade) (3)	Miami, FL	Feb-98		575		94.4	%		91.5	%		93.9	%		97.7	%		846		840		823		753
Gannon (St. Louis)	St. Louis, MO	Feb-98		336		86.9	%		87.8	%		89.0	%		89.6	%		609		606		595		578
Hidden Brooks		Sep-01		201		96.0	%		93.5	%		61.7	%		86.1	%		820		822		1,075		1,036
Hidden Valley (8)	Kansas City, MO	Dec-96		82		91.5	%		92.7	%		98.8	%		92.7	%		589		586		580		553
Honey Creek	Dallas, TX	Mar-99		656		86.4	%		90.7	%		85.1	%		89.8	%		541		530		544		551
Jefferson at Town Lake		Dec-02		216		77.0	%		83.8	%		88.0	%		N/A			1,382		1,434		N/A		N/A
Lake Piedmont	Indianapolis, IN	Apr-98		648		87.7	%		91.2	%		94.3	%		90.7	%		501		490		502		481
Madison Chase		Jun-04		230		97.0	%		93.5	%		N/A			N/A			810		814		N/A		N/A
Meridian at Bridgewater	Bridgewater, NJ	Nov-99		90		87.8	%		83.3	%		90.0	%		83.3	%		3,496		3,496		3,496		3,496
Monroe (Oakmont, Towne Oak) (8)	Monroe, LA	Dec-98		364		95.3	%		95.9	%		96.4	%		97.0	%		486		481		491		481
Mountain View (Willowgreen)	Tacoma, WA	Nov-86		241		92.1	%		97.1	%		95.4	%		95.9	%		648		648		646		633
Northridge Park II	Salinas, CA	Aug-87		128		96.1	%		99.2	%		99.2	%		88.3	%		1,022		1,020		1,019		1,032
Oakbrook	Topeka, KS	Dec-96		170		89.0	%		87.6	%		74.7	%		92.4	%		463		458		474		442
Oklahoma City (4)	Oklahoma City, OK	Aug-98		774		91.6	%		91.6	%		93.7	%		94.0	%		488		487		489		484
Orangevale	Orange, CA	Apr-98		64		100.0	%		100.0	%		96.9	%		100.0	%		1,011		1,005		969		968
Parkwood	Turlock, CA	Jun-99		180		92.2	%		90.6	%		93.9	%		97.2	%		516		504		484		469
Pembroke Gardens		Jul-04		198		99.0	%		N/A			N/A			N/A			761		N/A		N/A		N/A
Pointe at St. Joseph		Nov-03		202		90.1	%		93.1	%		N/A			N/A			681		729		N/A		N/A
Riverset II (1)	Memphis, TN	Jan-96		—		N/A			N/A			N/A			N/A			N/A		N/A		N/A		N/A
Riverview (8)	Fulton County, GA	Jun-00		228		85.1	%		93.4	%		98.2	%		96.9	%		663		667		652		656
Sahuarita	Sahuarita, AZ	Jun-99		52		63.5	%		82.7	%		67.3	%		100.0	%		561		574		566		459
Santa Fe Springs	Phoenix, AZ	Jun-00		310		89.4	%		91.9	%		91.9	%		89.7	%		600		599		593		608
Shadowbrook (8)	Selma, CA	Jun-99		193		100.0	%		99.0	%		99.5	%		96.9	%		533		530		511		482
Silver Springs (8)	Kent, WA	Dec-99		250		87.6	%		94.0	%		94.0	%		84.4	%		789		775		771		796
Southwind	Sacramento, CA	Aug-00		88		96.6	%		95.5	%		100.0	%		100.0	%		783		783		737		677
Torries Chase	Olathe, KS	Dec-96		99		85.3	%		79.8	%		90.9	%		92.9	%		520		516		517		505
Village Apartments (8)	Baytown, TX	May-00		210		96.2	%		96.7	%		95.2	%		93.8	%		634		586		585		568
Village at Stone Mountain	Stone Mountain, GA	Oct-97		722		90.3	%		92.5	%		88.0	%		90.6	%		769		771		737		747
Village Green	Austin, TX	Feb-00		200		89.0	%		88.5	%		92.5	%		90.5	%		642		649		635		634
Weatherstone	Rochester, MN	Sep-00		100		93.0	%		99.0	%		99.0	%		96.0	%		798		797		799		805
Western Hills (8)	Overland Park, KS	Dec-98		80		68.8	%		66.3	%		65.0	%		97.0	%		528		527		527		502
Willow Key	Orlando, FL	Mar-99		384		91.9	%		94.8	%		93.5	%		97.7	%		709		708		703		672
Woodglen	Houston, TX	Dec-99		250		68.8	%		74.0	%		86.0	%		87.2	%		669		749		679		650
Woodmark (8)	Woodland, CA	Jun-99		173		99.4	%		97.1	%		99.4	%		99.4	%		710		709		680		680

Subtotal Mortgage Bonds				10,171

					Occupancy												Avg. Monthly Rent Per Apartment Unit
					Month Ended			Month Ended			Month Ended			Month Ended			Month Ended		Month Ended		Month Ended		Month Ended
		Month/Year	Apartment		Sept 30			Jun 30			Sept 30			Sept 30			Aug 31		Jun 30		Sept 30		Sept 30
Apartment Community	Location	Acquired	Units		2004			2004			2003			2002			2004		2004		2003		2002
Participating Subordinate Mortgage Bonds:
Barkley Place	Ft. Myers, FL	May-87		156		98.1	%		96.8	%		96.2	%		92.9	%		2,192		2,177		2,140		2,050
Gilman Meadows	Issaquah, WA	Mar-87		125		90.4	%		91.2	%		99.2	%		97.6	%		988		989		961		1,020
Hamilton Chase	Chattanooga, TN	Feb-87		300		94.7	%		96.0	%		95.7	%		92.7	%		632		622		625		615
Mallard Cove I & II	Everett, WA	Feb-87		198		98.0	%		95.5	%		94.9	%		92.4	%		721		721		711		732
Meadows	Memphis, TN	Jan-88		200		95.0	%		94.5	%		92.0	%		96.5	%		613		611		610		603
Montclair	Springfield, MO	Oct-86		159		89.9	%		88.1	%		95.0	%		91.2	%		1,909		1,902		1,849		1,833
Newport Village	Thornton, CO	Dec-86		220		98.6	%		93.2	%		91.8	%		90.0	%		825		860		851		842
Nicollet Ridge	Burnsville, MN	Dec-87		339		93.2	%		92.0	%		95.0	%		95.3	%		998		981		955		941
Riverset II	Memphis, TN	Jan-96		148		96.4	%		95.0	%		91.4	%		94.0	%		730		726		716		709
Steeplechase	Knoxville, TN	Oct-88		450		92.9	%		95.6	%		98.2	%		95.3	%		633		624		618		604
Whispering Lake	Kansas City, MO	Oct-87		384		90.1	%		91.1	%		91.9	%		90.6	%		663		662		651		647

Subtotal Participating Subordinate Mortgage Bonds				2,679

Subordinate Mortgage Bonds:
CAPREIT		Sep-99		—		N/A			N/A			N/A			N/A			N/A		N/A		N/A		N/A
Farmington Meadows	Aloha, OR	Aug-99		69		100.0	%		98.6	%		100.0	%		98.6	%		816		816		814		814
Independence Ridge (8)	Independence, MO	Aug-96		336		80.4	%		77.4	%		78.9	%		75.3	%		555		555		554		553
Locarno (8)	Kansas City, MO	Aug-96		110		98.2	%		91.8	%		76.4	%		90.0	%		892		891		890		882
Olde English Manor	Wichita, KS	Nov-99		—		N/A			N/A			N/A			N/A			N/A		N/A		N/A		N/A
Peaks of Conyer		Sep-01		260		94.6	%		89.2	%		81.9	%		88.8	%		676		686		732		735
Rillito Village		Jul-00		—		N/A			N/A			N/A			N/A			N/A		N/A		N/A		N/A

Subtotal Subordinate Mortgage Bonds				775

Other Bond Related Investments:
Briarwood (8)	Virginia Beach, VA	Dec-98		600		97.2	%		96.3	%		95.8	%		97.5	%		678		673		650		614
Cinnamon Ridge	Egan, MN	Dec-97		264		95.1	%		90.2	%		95.8	%		97.0	%		984		964		960		925
Golfside Villas (f.k.a. Club West) (8)	Dade Co., FL	Mar-99		194		99.5	%		99.5	%		99.5	%		100.0	%		627		612		615		606
Park at Landmark		Sep-00		396		91.4	%		92.9	%		97.0	%		99.0	%		1,123		1,107		1,064		1,091
Poplar Glen	Columbia, MD	Jun-97		191		95.3	%		93.2	%		93.7	%		95.3	%		1,026		1,020		1,005		956
RITES — Charter House	Lenexa, KS	Dec-96		280		92.1	%		91.1	%		94.6	%		92.9	%		632		629		625		622
RITES — Indian Lakes (8)	Virginia Beach, VA	Jul-97		296		95.9	%		97.3	%		97.3	%		86.8	%		822		818		791		785
RITES — LaPaloma	Azusa, CA	Apr-99		120		95.0	%		98.3	%		99.2	%		98.3	%		656		634		649		621
RITES — LeMirador (Coleman Senior)	San Jose, CA	Apr-98		141		93.6	%		86.5	%		85.1	%		85.8	%		824		841		853		842
RITES — Museum Towers		Apr-01		286		95.8	%		95.8	%		95.8	%		94.1	%		1,389		1,389		1,389		1,363
RITES — Olde English Manor	Wichita, KS	Jun-98		264		83.0	%		85.2	%		75.8	%		86.4	%		503		501		501		489
RITES — Palisades Park	Universal City, TX	Feb-98		304		95.1	%		94.4	%		99.0	%		95.7	%		568		565		560		547
RITES — Pavillion	Pico Rivera, CA	Apr-99		132		93.2	%		98.5	%		100.0	%		100.0	%		708		711		674		660
RITES — Rancho/Villas (9)	San Antonio, TX	May-00		417		57.1	%		74.4	%		87.0	%		90.2	%		577		577		534		492
RITES — Rillito Village	Tucson, AZ	Aug-98		272		89.7	%		92.3	%		94.5	%		92.6	%		476		476		472		444
RITES — Riverset (1)	Memphis, TN	Aug-88		352		96.4	%		95.0	%		91.4	%		94.0	%		726		722		722		698
RITES — Riverset II (1)	Memphis, TN	Jan-96		—		N/A			N/A			N/A			N/A			N/A		N/A		N/A		N/A
RITES — Sienna (a.k.a. Italian Gardens)	San Jose, CA	Apr-98		140		85.7	%		85.7	%		87.1	%		82.9	%		815		814		818		799
RITES — Sonterra	San Antonio, TX	May-98		156		94.2	%		94.9	%		89.1	%		91.0	%		887		918		861		855
RITES — Southgate Crossings	Columbia, MD	Jun-97		215		92.6	%		94.4	%		94.0	%		97.2	%		1,069		1,054		1,015		965

Subtotal Other Bond Related Investments				5,020

Total Units/Weighted Average Investments				20,059		90.8	%		91.7	%		91.9	%		92.2	%		744		741		718		717

Total/Same Stores (5) 2001				18,743		91.0	%		91.8	%		92.1	%		92.2	%		741		737		731		717
Total/Same Stores (5) 2002				19,369		90.7	%		91.7	%		91.9	%					729		725		718

Occupancy

Avg. Monthly Rent
Per Apartment Unit

Month
Ended

Month/Year

Apartment

Sept 30

Jun 30

Sept 30

Aug 31

Jun 30

Sept 30

Apartment Community

Location

Acquired

Units

2004

2003

2002

2004

2003

2002

Construction/Substantial
Rehab Properties and Other Investments

Arlington

Alta Ridenour

Arlington, TX

Jun-04

252

N/A

Arlington

Arlington, TX

Dec-00

176

42.6

40.3

36.9

9.7

1,390

1,389

N/A

Ashton Arbors

Sep-04

150

N/A

Barrington at Beach Street

Ft. Worth, TX

Oct-00

398

91.7

81.2

76.4

44.5

800

801

798

806

Bedford Park (9)

Indianapolis, IN

Oct-00

312

81.4

69.2

60.3

67.9

470

469

507

547

Brookside Park

Dec-03

200

N/A

CAPREIT Joint Venture (6)

Jun-02

6,185

94.3

93.6

94.5

95.2

796

711

739

741

CAPREIT TERA (7)

Mar-01

2,942

95.2

94.4

94.3

92.8

601

603

601

625

Cedar Park Ranch

Aug-03

180

31.7

N/A

661

N/A

Columbia Knoll

Apr-04

326

N/A

Chancellor

Nov-01

101

N/A

Chancellor II

Mar-02

N/A

City Views at Rosa Burney Park

Dec-02

180

68.9

73.9

N/A

679

677

579

N/A

Cool Springs

Franklin, TN

Aug-00

124

74.2

72.6

61.3

44.4

2,003

1,958

1,946

Coronel Village

Apr-02

N/A

Desert Tree Estates

Sep-03

196

N/A

Eden Park

May-03

104

36.5

N/A

677

N/A

Evergreen at Mesquite

Aug-03

200

N/A

Evergreen at Plano

May-04

250

N/A

Glenwood Farms

Nov-03

294

89.1

75.2

N/A

536

534

N/A

Kensington Place

Jul-04

216

N/A

Lake Pleasant Village

May-03

152

N/A

Las Trojas

Mar-02

N/A

Liberty Park Townhomes

Feb-03

184

86.4

81.0

54.9

N/A

892

N/A

Lincoln Corner

Dec-01

134

87.3

73.9

N/A

1,572

1,478

N/A

Mammoth Lakes

Sep-04

N/A

McEver Vineyards

Nov-03

221

N/A

North White Road

Nov-01

157

98.7

67.5

11.5

N/A

1,156

1,174

N/A

Oak Grove Commons (8)

Dec-01

168

87.5

60.1

83.9

N/A

532

527

N/A

Oaks at Riverview

Mar-04

N/A

Olathe Senior Residences

Dec-02

144

N/A

Penn Valley

Dec-01

97.6

38.1

N/A

848

N/A

Pinnacle Park

Jul-04

200

N/A

Primrose at Pasadena

Aug-04

248

N/A

Providence at Rush Creek

Jan-04

144

N/A

Riverview Manor

Dec-03

120

N/A

Rocky Creek

Dec-03

200

N/A

Rose Cove

Feb-04

124

79.8

73.4

N/A

641

N/A

Sanger Trails

Dec-02

208

82.7

65.4

10.1

N/A

636

645

330

N/A

Sterlingshire

Dec-03

200

81.0

80.0

N/A

555

N/A

Stonehouse Valley

Jun-04

248

N/A

Sycamore Senior Village

Jun-02

300

N/A

Tranquility Bay

Jun-04

246

N/A

Village at Sun Valley (8)

Mesa, AZ

May-00

276

81.9

83.0

81.5

67.4

641

663

684

681

Walnut Grove

Jul-03

80.0

51.7

N/A

447

451

N/A

Walnut Tree

Mar-02

N/A

Westchase

Mar-04

224

N/A

Witmer Manor

Jul-04

238

N/A

Woodland Village

May-03

198

91.4

76.8

N/A

558

555

N/A

Subtotal Construction/Rehab Properties

17,522

Total Units

37,581

(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 three properties.
(4)		The Oklahoma City Portfolio represents three properties.
(5)		Same Store includes only properties reporting for all three quarters.
(6)		CAPREIT Joint Venture represents twenty properties (not included previously in CAPREIT Portfolio).
(7)		The CAPREIT TERA Portfolio represents eleven properties.
(8)		August 2004 Occupancy used in place of September 2004.
(9)		July Average Rent used in place of August Average Rent

MMA Capital (Trading Symbol(s) MMAC MMAC) 8-KResults of Operations and Financial Condition