MMA Capital (Trading Symbol(s) MMAC MMAC) 8-K MuniMae Announces Third Quarter Financial Results

Supplemental Financial Information

Third Quarter 2005

Exhibit 99.2

1

MuniMae

Supplementary Financial Information

Third Quarter 2005

Table of Contents

25

23-24

22

20-21

18 -19

17

17-19

Contact Information

CAD Variance Analysis

CAD Income Statement

Analysis of Balance Sheet Components

Bond Portfolio Cash Flow Hedging

Bond Portfolio Distribution

Supplemental Information on Bond Portfolio

Appendix

15

14

13

12

10

11

9

7-8

6

5

3-4

2

Introduction

Financial Highlights

Coverage Ratios

Distribution Growth, CAD Growth, and Payout

Ratio                                                            

Market Capitalization and Leverage

Consolidated Financial Statements

Balance Sheet

Three Months Ended Income Statement

Nine Months Ended Income Statement

Net Income to CAD Reconciliation

Business Segments

Production Summary

Equity Research Coverage

2

MuniMae

Supplementary Financial Information

Third Quarter 2005

Introduction

It is the mission of MuniMae to be the premier real estate finance and investment

advisory company.  MuniMae provides debt and equity financing to

owners of real

estate investments and offers investment advisory services to institutional

investors.

We

rely

on

our

in-depth

industry

knowledge

and

expertise

to

successfully structure and manage investments for our own account and for others. 

We are dedicated to an environment where integrity, innovation and service are of

the highest importance.

MuniMae is organized as a limited liability company, which allows it to combine

the limited liability, governance and management characteristics

of a corporation

with

the

pass-through

income

features

of

a

partnership.

As

a

result,

the

tax-exempt

income

derived

from

certain

investments

remains

tax-exempt

when

passed

through

to shareholders. 

3

MuniMae

Supplementary Financial Information

Third Quarter 2005

Financial Highlights

(See footnotes on following page)

(in thousands)

Three months ended

Nine months ended

September 30,

September 30,

Summary Financial Results

2005

2004

% Change

2005

2004

% Change

GAAP

Income

67,094

$             

54,302

$         

24%

185,972

$   

153,072

$     

21%

Net Income

20,417

11,562

77%

46,226

21,437

116%

Basic Earnings per Common Share

0.54

0.33

64%

1.23

0.62

98%

Diluted Earnings per Common Share

0.52

0.33

58%

1.21

0.62

95%

Adjusted GAAP

(1)

Income

62,738

53,803

17%

171,438

155,214

10%

Net Income

23,933

15,784

52%

58,528

39,302

49%

Basic Earnings per Common Share

0.63

0.45

40%

1.56

1.14

37%

Diluted Earnings per Common Share

0.62

0.45

38%

1.53

1.13

35%

Weighted Average Common Shares Outstanding

38,064

34,928

37,629

34,343

Diluted Shares Outstanding

38,983

35,268

38,259

34,696

CAD

(2)

CAD Income

85,657

69,273

24%

218,440

185,213

18%

CAD 

28,848

25,194

15%

65,930

59,519

11%

CAD per Common Share

0.76

0.72

6%

1.73

1.70

2%

Common Shares Outstanding

38,106

35,075

4

MuniMae

Supplementary Financial Information

Third Quarter 2005

Financial Highlights

Note

(1)

–

We

adopted

FASB

Interpretation

No.

46R,

“Consolidation

of

Variable

Interest

Entities”

effective

March

31,

2004,

which

required

us

to

consolidate

certain

tax

credit

equity

funds

and

real

estate

operating

partnerships

in

which

we

have

a

1%

or

less

general

partnership

interest.

As

a

result

of

consolidating

the

funds,

syndication

and

other

fees

earned

on

these

funds

have

been

eliminated

in

consolidation.

These

changes,

coupled

with

the

finance

accounting

required

for

the

guaranteed

tax

credit

equity

funds

under

FAS

66,

make

the

year

over

year

comparisons

difficult.

Accordingly,

we

have

presented

adjusted

amounts

for

comparability

purposes

to

prior

years.

These

amounts

are

not

in

accordance

with

generally

accepted

accounting

principles

(“GAAP”).

Note

(2)

–

We

provide

investors

with

a

non-GAAP

supplemental

performance

measurement,

Cash

Available

for

Distribution

(“CAD”),

to

report

our

operating

results.

We

believe

this

measure,

in

addition

to

net

income,

provides

investors

with

the

information

necessary

to

assess

our

operating

results.

We

define

CAD

as

net

income,

adjusted

for:

(1)

cash

received

for

origination,

syndication

and

guarantee

fees

and

other

revenue

but

deferred

for

GAAP

purposes;

(2)

non-cash

items,

which

include

primarily

fair

market

value

adjustments

related

to

derivatives,

amortization

of

intangible

assets,

non-

cash

gains

and

losses

associated

with

the

sale

of

servicing

rights,

valuation

allowances

and

impairment

losses

related

to

our

investments

in

loans,

bonds

and

bond-related

investments,

changes

in

accounting

principle

and

deferred

compensation

and

deferred

tax

expenses;

(3)

cash

received

from

our

investments

in

certain

partnerships

rather

than

our

allocable

share

of

GAAP-based

net

income;

(4)

syndication

and

other

fees

eliminated

due

to

the

consolidation

of

certain

tax

credit

equity

funds

and

the

requirements

surrounding

the

guaranteed

tax

credit

equity

funds;

and

(5)

the

different

carrying

bases

for

GAAP

and

CAD

on

properties

sold.

Our

calculation

of

CAD

may

not

be

comparable

to

similarly

titled

measures

reported

by

other

companies

because

there

is

no

generally

accepted

methodology

for

computing

CAD

and

all

companies

do

not

calculate

CAD

in

the

same

manner.

It

should

not

be

considered

as

an

alternative

to

net

income,

determined

in

accordance

with

GAAP,

as

an

indication

of

our

financial

performance.

CAD

is

reconciled

to

net

income

on

page

12

of

this

supplemental

financial

information

package.

Notes

(1)

and

(2)

are

referenced

throughout

the

remainder

of

the

presentation.

5

MuniMae

Supplementary Financial Information

Third Quarter 2005

Coverage Ratios

(4)

CAD-based

Fixed

Charge

Coverage

equals

total

CAD

to

common

shares

plus

depreciation,

income

tax

expense,

interest

expense,

interest

expense

on

preferred

shares

and

subordinate

debentures

and

dividends

on

perpetual

preferred

shares,

divided

by

interest

expense

plus

interest

expense

on

preferred

shares

and

subordinate

debentures

and

dividends

on

perpetual

preferred

shares.

Notes:

(3)

Net

income-based

Fixed

Charge

Coverage

equals

net

income

plus

depreciation

and

amortization,

income

tax

expense,

interest

expense,

interest

expense

on

preferred

shares

and

subordinate

debentures,

and

interest

rate

swaps,

divided

by

interest

expense

plus

interest

expense

on

preferred

shares,

subordinate

debentures,

interest

rate

swaps

and

dividends

on

perpetual

preferred

shares.

Three months ended

September 30,

September 30,

Fixed Charge Coverage

2005

2004

Net income -

based

(3)

1.88

1.65

1.60

CAD -

based

(4)

2.20

2.28

1.98

Dividend Summary

Distributions per Common Share

0.4875

$    

0.4675

$    

1.92

$   

Dividend Yield

7.8%

7.4%

7.7%

CAD Payout Ratio

64.4%

65.1%

81.3%

Price

24.97

$      

25.22

$      

24.97

$ 

Rolling twelve months ended

2005

6

MuniMae

Supplementary Financial Information

Third Quarter 2005

Distribution Growth, CAD Growth,

and Payout Ratio

$1.72

$1.92

$2.00

$2.13

$2.33

$1.76

$1.80

$1.86

$1.94

(5)

$2.43

(5)

90%

88%

85%

80%

80%

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

$2.50

2001

2002

2003

2004

2005P

75%

80%

85%

90%

95%

100%

Distribution Per Share

CAD Per Share

CAD Payout Ratio

Note:

(5)

CAD

per

share

represents

latest

Management

guidance

for

fiscal

year

2005,

as

provided

in

the

November

7,

2005

press

release.

The

distribution

(or

payout)

represents

actual

distributions

YTD

plus

a

proforma

distribution

for

the

4th

quarter

of

2005,

assuming

an

increase

in

the

quarterly

distribution

consistent

with

recent

increases

(1/2

a

penny

per

share).

7

MuniMae

Supplementary Financial Information

Third Quarter 2005

(in thousands, except per share data)

GAAP

Adj. GAAP

(1)

GAAP

Adj. GAAP

(1)

Total Market Capitalization

Senior Debt

(6)

1,620,142

$    

1,389,231

$    

1,589,632

$    

1,265,308

$    

Subordinate Debentures (Trust Preferred)

172,750

172,750

84,000

84,000

Preferred Shares in Subsidiary

241,000

241,000

241,000

241,000

Equity at Market Value (A*B)

951,496

951,496

955,432

955,432

Total Market Capitalization

2,985,388

$    

2,754,477

$    

2,870,064

$    

2,545,740

$    

Total Assets

3,542,638

$    

2,710,404

$    

3,310,330

$    

2,385,366

$    

Leverage Ratios

Senior Debt to Total Assets

45.7%

51.3%

48.0%

53.0%

Senior Debt to Total Market Capitalization

54.3%

50.4%

55.4%

49.7%

Common Shares Outstanding

A.  Total Shares Outstanding at  Period-End

38,106

38,106

35,113

35,113

B.  Closing Common Share Price at Period-End

24.97

$           

24.97

$           

27.21

$           

27.21

$           

September 30, 2005

December 31, 2004

Market Capitalization and

Leverage

Note:

(6) Senior Debt includes notes payable, short-term debt, and long -term debt.

8

MuniMae

Supplementary Financial Information

Third Quarter 2005

Market Capitalization

Total Market Capitalization

as of September 30, 2005

Note:

(7)

Equity

market

capitalization

is

based

on

shares

outstanding

as

of

last

day

of

the

fiscal

quarter

multiplied

by

closing

share

price

as

of

last

trading

day

in

the

quarter;

other

data

on

chart

are

GAAP-based

amounts

as

of

quarter-end.

Mortgage Notes

payable

4%

Short-term debt

32%

Long-term debt

18%

Subordinate

Debentures

6%

Preferred Shares

8%

Equity Market

Cap

(7)

32%

9

MuniMae

Supplementary Financial Information

Third Quarter 2005

Consolidated Balance Sheets

(in thousands)

GAAP

Adj. GAAP

(1)

GAAP

Adj. GAAP

(1)

ASSETS

Tax exempt bonds net

1,339,385

$         

1,339,385

$      

1,275,748

$       

1,275,748

$        

Taxable bonds and loans, net

756,869

752,860

630,939

630,939

Investment in partnerships

777,009

163,930

827,273

114,884

Cash, cash equivalents and interest receivable

83,711

83,711

111,249

111,249

Restricted and other assets

427,061

211,915

324,720

112,145

Goodwill and intangible assets

158,603

158,603

140,401

140,401

Total assets

3,542,638

$      

2,710,404

$    

3,310,330

$     

2,385,366

$      

LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgage Notes payable

109,627

$             

-

$                      

132,237

$          

-

$                        

Short-term debt

958,606

958,606

913,774

913,774

Long-term debt

551,909

430,625

543,621

351,534

Subordinate Debentures

172,750

172,750

84,000

84,000

Preferred Shares

168,000

168,000

168,000

168,000

Accounts payable and other liabilities

385,299

143,024

320,146

96,691

Total liabilities

2,346,191

$      

1,873,005

$    

2,161,778

$     

1,613,999

$      

Minority interest in subsidiary companies

384,525

154

404,586

-

Preferred shareholders' equity in a subsidiary company

71,031

71,031

71,031

71,031

Total shareholders' equity

740,891

766,214

672,935

700,336

Total liabilities and hsareholders' equity

3,542,638

$      

2,710,404

$    

3,310,330

$     

2,385,366

$      

September 30, 2005

December 31, 2004

10

MuniMae

Supplementary Financial Information

Third Quarter 2005

Consolidated Income Statements –Three Mos.

Ended September 30, 2005 and 2004

(in thousands)

September 30, 2005

INCOME

GAAP

Adj. GAAP

(1)

GAAP

Adj. GAAP

(1)

Interest income

40,561

$   

40,480

$   

34,975

$    

34,754

$   

Fee income

21,705

22,258

14,176

19,049

Net rental income

4,828

-

5,151

-

Total Income

67,094

62,738

54,302

53,803

EXPENSES

Interest expense

19,907

18,133

16,937

14,332

Interest expense on debentures and preferred shares

6,818

6,818

4,769

4,769

Salaries and benefits

22,227

21,665

17,759

17,045

General and administrative

6,179

4,817

7,148

3,711

Professional fees

2,615

2,398

2,464

2,262

Depreciation and amortization

6,384

4,932

3,681

1,731

Total Expenses

64,130

58,763

52,758

43,850

Net gains (losses) and other, net

7,973

10,478

(847)

(5,034)

Income from continuing operations

10,937

14,453

697

4,919

Discontinued operations

9,480

9,480

10,865

10,865

Income (loss) before cumulative effect of a change

      in accounting principle

20,417

23,933

11,562

15,784

Cumulative effect of a change in accounting principle

-

-

-

-

Net income

20,417

$   

23,933

$   

11,562

$    

15,784

$   

Three months ended

Three months ended

September 30, 2004

11

MuniMae

Supplementary Financial Information

Third Quarter 2005

Consolidated Income Statements –

Nine Mos. 

Ended September 30, 2005 and 2004

(in thousands)

September 30, 2005

INCOME

GAAP

Adj. GAAP

(1)

GAAP

Adj. GAAP

(1)

Interest income

113,099

$  

113,712

$   

100,594

$    

100,423

$    

Fee income

55,923

57,726

42,188

54,791

Net rental income

16,950

-

10,290

-

Total Income

185,972

171,438

153,072

155,214

EXPENSES

Interest expense

55,726

49,096

49,304

42,737

Interest expense on debentures and preferred shares

18,130

18,130

11,819

11,819

Salaries and benefits

59,915

57,823

53,742

52,348

General and administrative

22,895

13,312

17,390

10,512

Professional fees

7,959

7,162

6,673

6,236

Depreciation and amortization

14,115

8,810

9,412

5,623

Total Expenses

178,740

154,333

148,340

129,275

Net gains and other, net

29,514

31,943

5,320

2,498

Income from continuing operations

36,746

49,048

10,052

28,437

Discontinued operations

9,480

9,480

10,865

10,865

Income before cumulative effect of a change

in accounting principle

46,226

58,528

20,917

39,302

Cumulative effect of a change in accounting principle

-

-

520

-

Net income

46,226

$    

58,528

$     

21,437

$      

39,302

$      

Nine months ended

Nine months ended

September 30, 2004

12

MuniMae

Supplementary Financial Information

Third Quarter 2005

Net Income to CAD Reconciliation

(in thousands)

Nine months ended

2005

2004

2005

2004

Net income

20,417

$  

11,562

$  

46,226

$  

21,437

$  

Adjustments to income due to the financing method and

consolidation of tax credit funds

3,525

(1,142)

12,304

2,402

Fees deferred for GAAP purposes

12,789

13,117

24,197

32,440

Non-cash Items

7,879

11,283

10,504

8,015

Adjustments for investments in partnerships

(6,282)

(437)

(17,821)

4,414

Different carrying bases

(9,480)

(9,189)

(9,480)

(9,189)

Cash Available for Distribution (CAD) 

28,848

$  

25,194

$  

65,930

$  

59,519

$  

Three months ended

September 30,

September 30,

13

MuniMae

Supplementary Financial Information

Third Quarter 2005

Business Segments

Note:

(8)

Includes

$12

million

of

taxable

loans

associated

with

tax-exempt

bond

originations,

$22

million

of

taxable

CDD

bonds

and

$103

million

of

off-

balance

sheet

assets

associated

with

CDD

securitizations

and

demand

notes.

Interest Income

Distribution Income

Occasional Gains on Sale

Syndication Fees

Asset Management Fees

Guarantee Fees

Mortgage Servicing Fees

Origination Fees

Advisory Fees

Interest Spread Income

Investing

$1.5 billion tax-exempt bonds

$72 million taxable equity investments

Tax Credit Syndication

$6.5 billion tax credit equity

assets under management

Real Estate Finance

$7.9 billion loans serviced

MuniMae

(8)

14

MuniMae

Supplementary Financial Information

Third Quarter 2005

Notes:

(9)

Represents

equity

raised

from

investors.

(10)

Represents

bonds

originated

for

Fannie

Mae,

Freddie

Mac,

and

FHA/HUD

programs.

(11)

Most

MRC

production

(B-Notes,

Mezzanine

Loans,

and

Permanent

Whole

Loans)

is

expected

to

be

management

of

third

party

funds.

For

the

nine

months

ended

September

30,

2005,

all

of

the

MRC

production

was

third

party

funds.

Production Summary

($'s in thousands)

Business Segment Production

Q1

Q2

Q3

Total

Investing

Tax Exempt Bonds

55,275

$   

40,734

$   

80,209

$     

176,218

$  

Tax Credit Equity Syndication

(9)

107,436

215,252

370,197

692,885

Real Estate Finance

Permanent Loans

62,938

75,341

400,241

538,520

Construction Loans

55,964

57,985

73,722

187,671

Agency Bonds

(10)

7,100

21,725

10,000

38,825

Supplemental Loans

24,013

12,462

12,511

48,986

MRC Production

(11)

7,255

188,674

230,295

426,224

Total Production

319,981

$ 

612,173

$ 

1,177,175

$

2,109,329

$

2005

15

MuniMae

Supplementary Financial Information

Third Quarter 2005

Equity Research Coverage

Firm

Analyst

Telephone

A.G. Edwards

Matthew Park

212-557-1228

Legg Mason Wood Walker

Rod Petrik

410-454-4131

Merrill Lynch

Brian Legg

William Acheson

212-449-1153

212-449-1920

RBC Capital

Jay Leupp

415-633-8588

Wachovia Securities

Christopher Haley

443-263-6773

16

MuniMae

Supplementary Financial Information

Third Quarter 2005

Appendix

23-24

CAD Variance Analysis

25

Contact Information

20-21

Analysis of Balance Sheet Components

22

CAD Income Statement

18-19

Bond Portfolio Cash Flow Hedging

17

Bond Portfolio Distribution

17-19

Supplemental Information on Bond Portfolio

17

MuniMae

Supplementary Financial Information

Third Quarter 2005

Bond Portfolio Distribution

Definitions:

LIHTC –

Low income housing tax credit

CDD –

Community development district

501(c)(3) –

Non-profit entity

80/20 –

Properties where generally 20-

40% of the units must be set aside for

residents at 50-60% of the median income

By State

TX

29%

CA

12%

GA

12%

FL

9%

TN

6%

Other

32%

By Property Status

Lease up

18%

Stabilized

55%

Under

Construction

14%

CDD

6%

Rehabilitation

7%

By Bond Type

LIHTC

55%

CDD

6%

80/20

26%

501c3 Bond

13%

18

MuniMae

Supplementary Financial Information

Third Quarter 2005

Bond Portfolio Cash Flow Hedging

Un-hedged

10%

90%

Fixed-Rate

(12)

Includes

$87M

in

bonds

financed

through

off

balance

sheet

fixed-rate

securitizations.

(13)

Excludes

a

$75M

LIBOR

swap

that

was

terminated

on

11/01/05.

As

of

9/30/05,

the

unhedged

portion

of

the

total

bond

portfolio,

including

the

$75M

LIBOR

swap,

was

4%.

The

Company

generally

hedges

its

floating

rate

risk

related

to

bond

securitizations

using

swaps

based

on

BMA,

the

short-term

tax-exempt

rate

on

the

basis

of

which

its

tax-

exempt

bonds

are

priced.

However,

since

2003,

the

Company

has,

from

time

to

time,

hedged

this

risk

using

LIBOR

swaps.

This

number

reflects

the

Company’s

estimate

of

its

hedge

positions

assuming

all

LIBOR

swaps

were

converted

into

BMA

swaps,

based

on

market

data

as

to

the

ratio

of

LIBOR

to

BMA

as

of

the

relevant

date.

In

addition,

from

time

to

time,

the

Company

may

purchase

senior

interests

in

securitizations

(3rd

party

P-floats),

which

reduces

the

Company’s

floating-rate

risk.

(in thousands)

Total Amount

% Total

Bond

Portfolio

Total Bond Portfolio

(12)

$1,471,060

100%

Whole Bonds

(776,330)

53%

Fixed Rate Securitizations

(12)

(196,024)

13%

Floating Rate Securitizations

498,706

34%

Swaps & 3rd Party P-floats

(13)

(346,320)

24%

Unhedged Portion of Total

Bond Portfolio

152,386

$         

10%

19

MuniMae

Supplementary Financial Information

Third Quarter 2005

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2005

2006

2007

2008

2009

2010

2011

Cash Flow Hedging

“We

use

a

laddered

hedging

strategy

to

minimize

roll-over

risk

in

any

one

year.”

Weighted average swap rate of 3.63%

Interest Rate Swap Maturities

As of September 30, 2005 

(14)

Note:

(14) Not shown is a $75,000,000 swap that was not used to hedge the bond portfolio and was terminated on November 1, 2005.

(in thousands)

20

MuniMae

Supplementary Financial Information

Third Quarter 2005

Analysis of GAAP Balance

Sheet Components

(September 30, 2005, unaudited)

(in thousands)

Bond 

Taxable

Tax Credit

Tax Credit

Balance Sheet

Investments

(15)

Investments

(16)

Operations

(17)

Other

Funds

(18)

Total

Pre-FIN 46R

ASSETS

Tax-exempt bonds, net

1,339,385

$       

-

$                      

-

$                      

-

$                      

1,339,385

$       

1,339,385

$       

Taxable bonds and loans, net

-

752,860

-

-

4,009

756,869

752,860

Investments in partnerships

-

80,457

83,473

-

613,079

777,009

163,930

Derivative financial instruments

3,292

-

-

-

-

3,292

3,292

Cash and cash equivalents

-

-

-

64,514

-

64,514

64,514

Interest receivable

13,251

4,284

1,401

261

-

19,197

19,197

Restricted assets

17,002

24,100

1,197

-

71,779

114,078

42,299

Other assets

7,137

77,159

45,511

36,517

143,367

309,691

166,324

Goodwill and other intangibles

(19)

-

49,332

107,410

1,861

-

158,603

158,603

Total assets

1,380,067

$       

988,192

$          

238,992

$          

103,153

$          

832,234

$          

3,542,638

$       

2,710,404

$       

LIABILITIES AND EQUITY

Mortgage notes payable

-

$                      

-

$                      

-

$                      

-

$                      

109,627

$          

109,627

$          

-

$                      

Short-term debt

501,719

374,213

82,674

-

-

958,606

958,606

Long-term debt

216,437

214,188

-

-

121,284

551,909

430,625

Subordinate Debentures

-

-

172,750

-

-

172,750

172,750

Preferred shares subject to mandatory

redemption

168,000

-

-

-

-

168,000

168,000

Tax credit equity guarantee liability

-

-

35

-

209,826

209,861

35

Derivative financial instruments

2,632

229

-

-

-

2,861

2,861

Interest payable

8,520

5,755

364

-

2,720

17,359

14,639

Accounts payable, accrued expenses &

other liabilities

643

97,340

14,473

13,033

29,729

155,218

125,489

Total liabilities

897,951

691,725

270,296

13,033

473,186

2,346,191

1,873,005

Minority interest in subsidiary

companies

-

-

154

-

384,371

384,525

154

Preferred shareholders' equity in a

subsidiary company

71,031

-

-

-

-

71,031

71,031

Total equity

(20)

411,085

296,467

(31,458)

90,120

(25,323)

740,891

766,214

Total liabilities and equity

1,380,067

$       

988,192

$          

238,992

$          

103,153

$          

832,234

$          

3,542,638

$       

2,710,404

$       

21

MuniMae

Supplementary Financial Information

Third Quarter 2005

Analysis of GAAP Balance Sheet

Components (footnotes)

NOTES

(15)

Bond

investments

includes

the

Company's

investments

in

tax-exempt

bonds,

bond

related

investments

and

derivatives

and

the

related

on-

balance

sheet

debt

and

cash

collateral.

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.

(16)

Taxable

investments

includes

the

Company's

construction

and

permanent

loans,

other

investments

from

the

MRC

business,

CAPREIT

equity

investments

and

the

related

borrowings

from

the

Midland

Affordable

Housing

Group

Trust,

pension

funds

and

lines

of

credit.

(17)

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.

(18)

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)"

(FIN46R),

which

requires

consolidation

of

certain

funds

which

are

considered

“variable

interest

entities”;

and

Statement

of

Financial

Accounting

Standards

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.

(19)

Goodwill

of

$31.7

million

related

to

the

1999

purchase

of

the

Midland

Companies

has

been

allocated

equally

between

taxable

investments

and

tax

credit

operations.

(20)

Total

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.

22

MuniMae

Supplementary Financial Information

Third Quarter 2005

Cash Available For Distribution

(in thousands, unaudited)

For the three months ended

For the nine months ended

September 30,

September 30,

2005

2004

2005

2004

SOURCES OF CASH:

Interest on bonds, interests in bond securitizations and loans

35,861

$               

33,299

$             

101,206

$             

94,500

$               

Syndication fees

12,792

14,610

29,390

30,533

Asset management and advisory fees

11,179

5,351

26,381

16,915

Origination and brokerage fees

5,872

2,458

10,789

8,619

Guarantee fees

401

1,929

7,513

6,995

Loan servicing fees

4,433

2,087

8,806

5,900

Distributions from equity investments in partnerships

3,822

2,074

9,032

5,879

Other income

3,601

1,322

8,103

5,312

Interest on short-term investments

1,455

1,173

3,631

3,890

Net gain on sales

6,241

4,970

13,589

6,670

TOTAL SOURCES OF CASH

85,657

69,273

218,440

185,213

EXPENSES:

Interest expense

18,220

15,614

49,551

45,834

Interest expense on debentures and preferred shares

6,340

4,769

18,168

11,819

Salaries and benefits

21,877

17,005

57,953

49,743

Professional fees

2,397

2,262

7,162

6,237

General and administrative

5,247

3,880

14,461

11,348

Loss (gain) on loans and investments

500

(18)

500

(44)

Income tax expense

1,284

567

1,878

757

TOTAL EXPENSES

55,865

44,079

149,673

125,694

CASH AVAILABLE FOR DISTRIBUTION

29,792

25,194

68,767

59,519

LESS:

Cash allocable to minority interest

944

-

2,837

-

CASH AVAILABLE FOR DISTRIBUTION TO COMMON SHARES

28,848

$               

25,194

$             

65,930

$               

59,519

$               

CAD PER COMMON SHARE

0.76

$                   

0.72

$                 

1.73

$                   

1.70

$                   

23

MuniMae

Supplementary Financial Information

Third Quarter 2005

CAD Variance Analysis

3rd

Quarter

2005

Compared

to

3rd

Quarter

2004:

CAD

for

the

third

quarter

of

2005

increased

$3.7

million

over

the

same

period

last

year

due

primarily

to

the

following

changes:

(1)

a

$5.8

million

increase

in

asset

management

and

advisory

fees

primarily

due

to

the

new

MRC

business;

(2)

a

$3.4

million

increase

in

origination

and

brokerage

fees

due

to

the

acquisitions

of

MRC

and

Glaser

as

well

as

an

increase

in

permanent

and

mezzanine

lending;

(3)

a

$2.3

million

increase

in

loan

servicing

fees

related

to

the

new

Glaser

business;

(4)

a

$2.3

million

increase

in

other

income

primarily

related

to

the

new

MRC

and

Glaser

businesses;

(5)

a

$1.7

million

increase

in

distributions

from

equity

investments

in

partnerships

due

to

an

increase

in

distributions

from

the

CAPREIT

investments;

and

(6)

a

$1.3

million

increase

in

net

gain

on

sales

primarily

related

to

the

gain

on

sale

of

loans

from

the

new

Glaser

business,

gains

from

tax-exempt

bond

sales,

as

well

as

a

gain

on

the

termination

of

one

interest

rate

swap;

24

MuniMae

Supplementary Financial Information

Third Quarter 2005

CAD Variance Analysis

Offset

in

part

by:

(7)

a

$2.3

million

decrease

in

net

interest

income

(interest

on

bonds,

interests

in

bond

securitizations,

loans

and

short-term

investments

less

interest

expense,

interest

expense

on

debentures

and

preferred

shares

and

cash

allocable

to

minority

interest)

due

primarily

to

decreases

in

interest

income

relative

to

increases

in

non

accrual

bonds,

loss

of

interest

income

from

bond

sales,

as

well

as

increases

in

interest

expense,

interest

expense

on

debentures

and

deferred

shares

and

cash

allocable

to

minority

interest

due

to

increases

in

senior

costs

on

securitizations

and

borrowing

rates

and

outstanding

debt

balances

and

increases

in

preferred

shares

and

trust

preferred

securities

from

offerings

that

occurred

in

March

and

June

of

2005

partially

offset

by

an

increase

in

interest

income

due

to

an

increase

in

loans

from

the

Glaser

acquisition;

(8)

a

$4.9

million

increase

in

salaries

and

benefits

due

to

an

increase

in

employee

headcount

resulting

from

the

current

year

MRC

and

Glaser

acquisitions;

(9)

a

$1.8

million

decrease

in

syndication

fees

primarily

due

to

prior

period

one-time

syndication

fee

receipts

relating

to

one

particular

tax

credit

equity

fund;

(10)

a

$1.5

million

decrease

in

guarantee

fees

primarily

due

to

the

formation

of

one

guaranteed

fund

in

the

prior

period

quarter

versus

forming

no

guaranteed

funds

in

the

current

period

quarter;

(11)

a

$1.4

million

increase

in

general

and

administrative

expenses

due

to

increases

in

office

rent,

travel,

insurance,

and

information

technology

expenses

related

to

increased

employee

headcount

resulting

from

the

current

year

MRC

and

Glaser

acquisitions

and

organic

growth;

(12)

a

$0.7

million

increase

in

income

tax

expense

due

to

an

increase

in

state

tax

liabilities

associated

with

the

acquisitions

of

MRC

and

Glaser;

and

(13)

a

$0.5

million

increase

in

loss

on

loans

and

investments

related

to

an

impairment

taken

on

one

supplemental

workout

loan.

25

MuniMae

Supplementary Financial Information

Third Quarter 2005

Contact Information

MuniMae

621 East Pratt Street, Suite 300

Baltimore, Maryland 21202-3140

Phone: 877-461-4895

Fax: 410-727-5387

Investor Contacts:

Mike Rulf

Principal, Investor Relations

443-263-2921

Angela Richardson

Investor Relations Representative

888-788-3863