Centerline Holding Company Reports Third Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091112005918/en

NEW YORK--(Business Wire)--
Centerline Holding Company (OTC:CLNH) ("Centerline" or the "Company"), the
parent company of Centerline Capital Group, a provider of real estate financial
and asset management services, today announced financial results for the third
quarter and nine months ended September 30, 2009.

Third Quarter 2009 Highlights:

* For the three months ended September 30, 2009, the Company reported a net loss
attributable to Centerline shareholders(1) of ($5.38) per share, as compared to
a net loss of ($3.03) per share for the three months ended September 30, 2008;
earnings per share ("EPS")(1), excluding certain items (primarily non cash), was
($0.08) for the three months ended September 30, 2009, as compared to EPS,
excluding certain items (primarily non cash) of ($0.17), for the three months
ended September 30, 2008;
* Net loss was driven primarily by: (i) lower business volume and lower interest
income in the third quarter 2009, as compared to the same period in 2008; (ii)
asset impairments in the Commercial Mortgage-Backed Securities ("CMBS") and
High-Yield Debt Funds Centerline manages; (iii) asset impairments on the Series
B Freddie Mac Certificates and stabilization escrow; (iv) write-off of goodwill
and intangible assets; (v) the loss reserve associated with Affordable Housing
transactions; and (vi) a reserve against the remaining carrying value of
Centerline's loan to American Mortgage Acceptance Company ("AMAC");
* Centerline paid down the outstanding balance of its senior credit facility
debt by $68.7 million to $228.2 million, from 2008 year-end levels of $296.9
million and repaid $8.7 million of the $13.8 million CMBS term loan balance
outstanding as of December 31, 2008. Since September 30, 2009 through the date
of this press release, Centerline has paid down an additional $5.0 million of
its senior credit facility debt;
* Centerline had direct assets under management ("AUM")(2) of $13.4 billion as
of September 30, 2009;
* Centerline originated $104.5 million of multifamily loans on behalf of Fannie
Mae and Freddie Mac in the third quarter of 2009, and raised nearly $3.8 million
of capital for Affordable Housing tax-credit funds; In October 2009, Centerline
originated $73.7 million of additional multifamily loans and closed an
additional $22.2 million of multifamily loans awaiting settlement on behalf of
Fannie Mae and Freddie Mac, and raised over $14.4 million of capital for
Affordable Housing tax-credit funds;
* As of September 30, 2009, the Company`s Fannie Mae servicing portfolio had
nine delinquent loans, with an outstanding balance of $47.3 million,
representing 0.5% of its $8.8 billion agency servicing portfolio; in addition,
as of September 30, 2009, there were three loans in Fannie Mae Real Estate Owned
properties with a combined outstanding balance of $15.8 million that were
formerly in the Centerline portfolio, subject to final resolution and loss
sharing settlement;
* As of September 30, 2009, Centerline was the named special servicer on a
portfolio of $109.7 billion. At that date, $3.8 billion (or 3.46% of the
portfolio) was delinquent, compared to an industry average of 4.23%, as reported
by Trepp;
* Centerline launched a new business initiative through its Agency Lending
Products Group: the multifamily small loan program; and
* The Company continues discussions with Island Capital Group LLC, and others,
to accomplish a recapitalization of Centerline.

(1)See "Selected Financial Data" for a reconciliation of GAAP net income (loss)
attributable to Centerline Holding Company shareholders to EPS (excluding
certain items (primarily non cash)).

(2)See AUM table and footnotes.

Financial Results

The table below summarizes Centerline`s financial results for the three and nine
months ended September 30, 2009:

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except per share data) 2009 2008 2009 2008
Revenues $ 114,534 $ 131,252 $ 352,116 $ 401,320
Revenues as adjusted (1) $ 54,325 $ 67,214 $ 168,191 $ 205,861
Expenses $ 1,719,107 $ 343,592 $ 2,584,403 $ 682,380
Expenses as adjusted(1) $ 371,261 $ 198,460 $ 544,884 $ 374,871
Equity loss and other items $ 1,321,199 $ 62,630 $ 1,868,932 $ 108,386
Equity loss and other items as adjusted(1) $ 33,562 $ (18,464 ) $ 13,338 $ (3,664 )
Income tax provision $ (778 ) $ (1,015 ) $ (1,023 ) $ (2,019 )
Net Loss Attributable to Centerline Shareholders $ (284,152 ) $ (150,725 ) $ (364,378 ) $ (174,693 )
Net Loss Attributable to Centerline Shareholders (excluding certain items (primarily non cash))(2) $ 829 $ (3,671 ) $ (8,638 ) $ (6,138 )

Per Share Data (diluted):
Net Loss Attributable to Centerline Shareholders $ (5.38 ) $ (3.03 ) $ (7.13 ) $ (3.98 )
EPS (excluding certain items (primarily non cash))(2) $ (0.08 ) $ (0.17 ) $ (0.44 ) $ (0.43 )

(1) Adjusted to exclude Consolidated Partnerships. See "Adjusted Revenues" and "Selected Financial Data" for a discussion of the use of Adjusted Revenues.

(2) See "Selected Financial Data" for a reconciliation of GAAP net income (loss) attributable to Centerline Holding Company Shareholders to EPS (excluding certain items (primarily non cash)).

During the third quarter of 2009, Centerline`s operating results were impacted
negatively by: (i) lower business volume and lower interest income compared to
the same period in 2008; (ii) asset impairments in the CMBS and High-Yield Debt
Funds Centerline manages (Centerline`s share of the impairments is $59.9 million
and $82.7 million for the third quarter and nine months ended September 30,
2009, respectively); (iii) a $30.5 million asset impairment on Series B Freddie
Mac Certificates due to projected buy downs in the collateral of the Freddie Mac
Securitization which will negatively impact the residual interest received by
the Series B Freddie Mac certificates causing an impairment to the investment;
(iv) a $42.0 million asset impairment on stabilization escrow due to the
Company`s expectation that most of the escrow funds will be used to restructure
non-stabilized bonds in the re-securitization portfolio and that Centerline
will, therefore, not receive the cash via escrow releases; (v) a $100.0 million
write-off of goodwill; (vi) a $90.0 million loss reserve associated with
Affordable Housing transactions; and (vii) a $5.0 million reserve against the
remaining carrying value of Centerline's loan to AMAC, a publicly-traded REIT
Centerline manages but which is developing a plan of liquidation.

The reduction in interest income resulted from: (i) lower rates of interest from
Centerline`s escrow and collateral accounts due to declining market rates; (ii)
reduced servicing portfolio and stabilization escrow balances; (iii) declining
cash interest from our Series B Freddie Mac Certificates; (iv) non-accrual of
interest for the Company`s loan to AMAC; and (v) varying levels of income from
mortgage revenue bonds as many re-securitized bonds not initially accounted for
as sold were deemed to be in 2008 and were no longer included in the Company`s
operating results. Subsequently, however, certain defaulted and specially
serviced bonds were re-recognized along with related interest income. Upon sale
recognition of any bonds, Centerline recognizes additional interest income on
the Freddie Mac certificates that it retained as part of the re-securitization
transaction. Interest income also decreased as a result of the sale of $145.0
million face amount of certain Series A-1 Freddie Mac certificates in July 2009.
The proceeds were used to redeem the corresponding preferred shares of Equity
Issuer Trust I.

Fluctuations in fee income resulted from lower tax-credit fund origination
volume and lower prepayment penalties and expense reimbursements in the third
quarter and nine months ended September 30, 2009, compared to the same periods
in 2008, and offset partially by increased collateral management and special
servicing fees.

Salaries and benefits expense declined 23.0% and 25.8% in the third quarter and
nine months ended September 30, 2009, respectively, as compared to the same
periods in 2008. The decline is primarily attributable to: (i) reduced base
salaries and benefits due to reduced headcount; (ii) lower share-based
compensation expense for shares issued in connection with Centerline`s
acquisition of ARCap (now Centerline Investors I LLC) in August 2006 as the
awards vest or are forfeited; (iii) a reduction in bonus compensation; and (iv)
a decrease in the third quarter and the year-to-date period in severance
expense.

Other general and administrative expenses decreased in the third quarter and
nine months ended September 30, 2009, compared to the same periods in 2008. The
decrease is primarily attributable to the following items: (i) a decrease in
professional fees, particularly audit and consulting costs; (ii) lower fund
origination expenses associated with Centerline`s tax credit business that
correspond with the lower level of fund origination activity; (iii) a decrease
in broker commissions related to lower mortgage originations period over period;
(iv) a reduction in overall expenses resulting from the reductions in personnel
in April and November 2008 and other cost saving initiatives; and (v) a decrease
in third quarter 2009 rent expense, primarily the result of rent accrued in 2008
in connection with office space Centerline no longer uses in operations.

Loss reserves increased in the third quarter and nine months ended September 30,
2009, compared to the same periods in 2008. The increase in both periods is
primarily attributable to: (i) a $90.0 million loss reserve associated with
Affordable Housing transactions; (ii) a $29.5 million lease termination
restructuring charge Centerline recorded in June 2009 (applies only to the 2009
year-to-date period); and (iii) an increase of $4.1 million in the Company`s
provision for mortgage banking loss sharing (applies only to the 2009
year-to-date period).

Interest expense decreased 20.1% and 21.3% for the third quarter and nine months
ended September 30, 2009, as compared to the same periods in 2008. The decrease
in both periods was due primarily to the following factors: (i) the lower amount
of average corporate debt outstanding; and (ii) lower rates and borrowings for
warehousing mortgage loans.

Adjusted Revenues

Centerline`s operating results include the results of Tax Credit Fund
Partnerships consolidated pursuant to various accounting pronouncements, as well
as other Tax Credit Fund and Property Partnerships Centerline controls but in
which it has little or no equity interest. As Centerline has virtually no equity
interest in these partnerships, the net losses they generated were allocated
almost entirely to their investors. The consolidation, therefore, has an
insignificant impact on net income (loss), although certain Centerline revenues
are eliminated in consolidation, and revenues and expenses of the consolidated
partnerships are reflected in the income statement.

Centerline also consolidates a number of funds it manages that invest in CMBS
and ReREMIC certificates ("CMBS Fund Partnerships") and a High-Yield Debt
Investment Fund. Centerline maintains an equity interest in each of these funds
(typically 5%) and participates in the profits or losses they generate. Adjusted
equity income includes the Company`s proportionate share of the profits as well
as other allocations for general partner services.

As many of the Company`s revenues are eliminated when consolidating these
partnerships, the Company is presenting its revenues adjusted to exclude the
impact of consolidation.

The adjusted figures presented are not in accordance with generally accepted
accounting principles ("GAAP") but are presented for the purpose of enhancing
the understanding of the economics of our business, but may not be comparable to
figures reported by other companies.

Centerline Holding Company Equity and Adjusted Centerline Holding Company Equity

The Company reported a deficit allocable to Centerline Holding Company
shareholders at September 30, 2009 of $1.1 billion. The deficit was due
primarily to the declining fair values of investments in the funds Centerline
manages and consolidates. Prior to 2009, Centerline`s equity absorbed any of
these losses that would reduce the carrying amount of the third-party investors`
interests below zero. As of December 31, 2008, these unrealized losses totaled
$894.7 million. Following the adoption of SFAS No. 160, as of January 1, 2009,
any further declines in the asset values will reduce the third-party investors`
interests and the Company`s equity will be reduced only by its proportionate
share based on its co-investment percentage. However, the $894.7 million
previously recognized, will remain in the Company`s deficit balance.

Similar to the presentation described for Adjusted Revenues, Centerline also
presents its Centerline Holding Company equity adjusted to exclude the impact of
consolidated partnerships (see "Selected Financial Data"). The substantial
difference between the "as reported" and "as adjusted" amounts reflects the
unrealized losses in the Company`s consolidated partnerships, as described
above. If the losses were to be realized, Centerline would absorb only the
portion corresponding to its co-investment (typically 5%) in earnings. The "as
adjusted" amount excludes the unrealized losses in excess of Centerline`s
proportionate share.

The table below shows the difference between the total Centerline Holding
Company Deficit "as reported" and "as adjusted" at September 30, 2009:

(in thousands) September 30, 2009

Total Centerline Holding Company Deficit, as reported $ (1,066,530 )
Adjustments:

CMBS and High-Yield Debt Fund Partnerships
(Unrealized losses attributable to third-party non-controlling interests
prior to the adoption of SFAS 160) 894,711
(Our negative co-investment in these funds) 57,924

Re-securitization of Mortgage Revenue Bonds
(Accumulated other comprehensive income/loss related to those assets
which would be de-recognized if sale treatment is obtained) 11,712

Total Centerline Holding Company Deficit, as adjusted $ (102,183 )

Centerline Third Quarter and Nine Months 2009 Business Groups Activity Summary:
Affordable Housing
Three Months Ended September 30, 2009 Nine Months Ended September 30, 2009
Capital Raised (in thousands)
Tax Credit Funds $ 3,790 $ 77,129

Affordable Housing Mortgage Originations(1)
Agency Loan Originations (Fannie Mae/Freddie Mac) $ 33,753 $ 68,101

(1) The Affordable Housing Group originates and services loans for affordable housing properties via the same agency programs used by our Commercial Real Estate Group.

At September 30, 2009, Centerline`s Affordable Housing Group`s AUM was $9.3 billion.

Commercial Real Estate
Three Months Ended September 30, 2009 Nine Months Ended September 30, 2009
Capital Deployed (in thousands)
Agency Loan Originations (Fannie Mae/Freddie Mac) $ 70,752 $ 359,104

Conduit/Other Loan Originations -- --
Collateralized Debt Obligation ("CDO") Securities -- --
High-Yield CMBS Certificates -- --
Real Estate Equity Investments -- --

Total $ 70,752 $ 359,104

At September 30, 2009, Centerline`s Commercial Real Estate Group`s AUM was $4.2
billion.

Portfolio Management

As of September 30, 2009, Centerline provided primary servicing for a $21.4
billion loan portfolio, an increase of 2.9% from the level at June 30, 2009.

In addition, Centerline is the named special servicer on a portfolio of $109.7
billion of CMBS as of September 30, 2009, a decrease of 1.3% from the level as
of June 30, 2009. The decline primarily was due to loan payoffs and losses.

Direct Assets Under Management

As of September 30, 2009 and December 31, 2008, Centerline`s direct AUM
consisted of the following:

(in millions)

9/30/2009 12/31/2008
Affordable Housing
Tax-Credit Funds(1)(2) $ 9,263.8 $ 9,614.5
Commercial Real Estate
CMBS Funds(1) 1,475.4 1,475.4
High-Yield Debt Fund(1) 535.7 535.7
Joint Venture Equity Funds(1) 181.1 179.4
CDO Asset Management(3) 1,838.1 1,844.6
Third-Party Commercial Loan Portfolio(4) 141.6 550.7
Total $ 13,435.7 $ 14,200.3

(1)Amounts represent committed and invested equity of investors.

(2)The decrease is due to the funds that were dissolved during the nine months ended September 30, 2009 period.

(3)Excludes $270.9 million of CDO securities owned by CRESS, which are included in the High-Yield Debt Fund total above. In total, Centerline earns fees from managing $2.1 billion of CDOs. Centerline began receiving CDO management fees from managing the AMAC CDO I during the first quarter of 2009 even though Centerline has been managing the AMAC CDO I since November 2006. Previously, Centerline earned management fees directly from AMAC. The December 31, 2008 period includes the AMAC CDO I management fees
for comparative periods.

(4)Centerline earns asset management and other fees on a portfolio of commercial real estate loans owned by a third-party.The decline was primarily due to the disposition of loans in the portfolio.Centerline anticipates this amount to decrease each quarter as it continues to sell assets.

Supplemental Financial Information

For more detailed financial information, please access the Supplemental
Financial Package, accessible via the Investor Relations section of the
Centerline website at www.centerline.com.

Please contact Centerline`s Investor Relations department at (800) 831-4826 with
any questions regarding the Company`s third quarter financial results for the
period ended September 30, 2009.

Risk Factors

Please refer to the last page of this press release for a brief discussion
regarding the forward-looking nature of the contents of this press release and a
summary of risks involved in investing in our Company. These risk factors are
more fully detailed in our filing on Form 10-K for the year ended December 31,
2008, and significant updates are detailed in our filing on Form 10-Q for the
quarter ended September 30, 2009.

About the Company

Centerline Capital Group, a subsidiary of Centerline Holding Company (OTC:
CLNH), provides real estate financial and asset management services, including
institutional debt and equity fund management, mortgage banking and primary and
special loan servicing. As of September 30, 2009, Centerline had more than $13.4
billion of assets under management. Centerline is headquartered in New York, New
York and has eight offices throughout the United States. For more information,
please visit Centerline's website at http://www.centerline.com or contact the
Investor Relations Department directly at (800) 831-4826.

CENTERLINE HOLDING COMPANY AND SUBSIDIARIES

SELECTED FINANCIAL DATA

(unaudited)
September 30, 2009
(in thousands) As Consolidated Mortgage Revenue As
Reported Partnerships Bonds Adjusted(1)

Assets
Cash and cash equivalents $ 99,163 $ - $ - $ 99,163
Restricted cash 11,030 - - 11,030
Investments:
Available-for-sale 616,722 428,128 (600,623 ) 444,227
Equity method 5,978 - - 5,978
Other 110,327 1,220 - 111,547
Investments in and loans to affiliates, net 12,940 74,867 - 87,807
Goodwill and other intangible assets, net 237,730 - 567 238,297
Deferred costs and other assets, net 109,545 7,427 (7,038 ) 109,934
Investments held by Consolidated Partnerships 4,285,814 (4,285,814 ) - -
Other assets of Consolidated Partnerships 1,112,195 (1,112,195 ) - -

Total Assets $ 6,601,444 $ (4,886,367 ) $ (607,094 ) $ 1,107,983

Liabilities and Equity
Liabilities
Notes payable $ 328,834 $ - $ - $ 328,834
Financing arrangements and secured financing 666,656 - (606,708 ) 59,948
Preferred shares of subsidiary (subject to mandatory repurchase) 128,500 - - 128,500
Accounts payable, accrued expenses and other liabilities 312,482 - (2,980 ) 309,502
Liabilities of Consolidated Partnerships 2,304,999 (2,304,999 ) - -

Total Liabilities 3,741,471 (2,304,999 ) (609,688 ) 826,784

Mezzanine Equity
Redeemable securities 330,988 - - 330,988

Equity
Centerline Holding Company (1,066,530 ) 961,753 2,594 (102,183 )
Non-controlling interests 3,595,515 (3,543,121 ) - 52,394

Total Liabilities and Equity $ 6,601,444 $ (4,886,367 ) $ (607,094 ) $ 1,107,983

(1) Adjusted to exclude Consolidated Partnerships (refer to "Adjusted Revenues" section) and mortgage revenue bonds re-securitized in December 2007 not accounted for as a sale.

CENTERLINE HOLDING COMPANY AND SUBSIDIARIES

SELECTED FINANCIAL DATA

(unaudited)
December 31, 2008
(in thousands) As Consolidated Mortgage Revenue As
Reported Partnerships Bonds Adjusted(1)

Assets
Cash and cash equivalents $ 103,879 $ - $ - $ 103,879
Restricted cash 10,852 - - 10,852
Investments:
Available-for-sale 539,213 422,042 (343,494 ) 617,761
Equity method 31,367 - - 31,367
Other 134,227 1,530 (3,737 ) 132,020
Investments in and loans to affiliates, net 19,222 125,155 - 144,377
Goodwill and other intangible assets, net 351,766 - 585 352,351
Deferred costs and other assets, net 135,679 8,369 (6,339 ) 137,709
Investments held by Consolidated Partnerships 4,997,564 (4,997,564 ) - -
Other assets of Consolidated Partnerships 1,071,354 (1,071,354 ) - -

Total Assets $ 7,395,123 $ (5,511,822 ) $ (352,985 ) $ 1,530,316

Liabilities and Equity
Liabilities
Notes payable $ 358,061 $ - $ - $ 358,061
Financing arrangements and secured financing 411,413 - (348,989 ) 62,424
Preferred shares of subsidiary (subject to mandatory repurchase) 273,500 - - 273,500
Accounts payable, accrued expenses and other liabilities 218,580 9,019 (2,044 ) 225,555
Liabilities of Consolidated Partnerships 2,619,154 (2,619,154 ) - -

Total Liabilities 3,880,708 (2,610,135 ) (351,033 ) 919,540

Mezzanine Equity
Redeemable securities 326,379 - - 326,379

Equity
Centerline Holding Company (867,511 ) 974,780 (1,952 ) 105,317
Non-controlling interests 4,055,547 (3,876,467 ) 179,080

Total Liabilities and Equity $ 7,395,123 $ (5,511,822 ) $ (352,985 ) $ 1,530,316

(1) Adjusted to exclude Consolidated Partnerships (refer to "Adjusted Revenues" section) and mortgage revenue bonds re-securitized in December 2007 not accounted for as a sale.

CENTERLINE HOLDING COMPANY AND SUBSIDIARIES

SELECTED FINANCIAL DATA

(unaudited)

(in thousands, except per share data) Three Months Ended September 30,
2009 2008
As As As As
Reported Adjustments(1) Adjusted(1) Reported Adjustments(1) Adjusted(1)
Revenues:
Interest income $ 16,454 7,577 $ 24,031 $ 22,562 8,220 $ 30,782
Fee Income 17,733 7,701 25,434 18,773 12,908 31,681
Other (2) 4,267 593 4,860 4,053 698 4,751
Revenues of Consolidated Partnerships 76,080 (76,080 ) - 85,864 (85,864 ) -
Total revenues 114,534 (60,209 ) 54,325 131,252 (64,038 ) 67,214

Expenses:
General and administrative:
Salaries and benefits 16,706 - 16,706 21,703 - 21,703
Other 105,025 - 105,025 19,227 - 19,227
Total general and administrative expenses 121,731 - 121,731 40,930 - 40,930
Interest 22,250 - 22,250 27,843 - 27,843
Depreciation and amortization 8,400 - 8,400 11,003 - 11,003
Write-off of goodwill and intangible assets 100,000 100,000 118,069 118,069
Loss on impairment of assets 118,880 - 118,880 615 - 615
Interest and other expenses of Consolidated Partnerships 1,347,846 (1,347,846 ) - 145,132 (145,132 ) -
Total expenses 1,719,107 (1,347,846 ) 371,261 343,592 (145,132 ) 198,460
(Loss) income before other (loss) income (1,604,573 ) 1,287,637 (316,936 ) (212,340 ) 81,094 (131,246 )
Equity and other (loss) income (7,965 ) (54,904 ) (62,869 ) (76,421 ) 2,220 (74,201 )
Gain (loss) from repayment or sale of investments 6 - 6 (2,547 ) - (2,547 )
Other losses from Consolidated Partnerships (62,312 ) 62,312 - (69,667 ) 69,667 -
Loss before income taxes (1,674,844 ) 1,295,045 (379,799 ) (360,975 ) 152,981 (207,994 )
Income tax provision (778 ) - (778 ) (1,015 ) - (1,015 )
Net loss (1,675,622 ) 1,295,045 (380,577 ) (361,990 ) 152,981 (209,009 )
Net loss attributable to non-controlling interests 1,391,470 (1,295,045 ) 96,425 211,265 (152,981 ) 58,284
Net loss attributable to Centerline Holding Company shareholders $ (284,152 ) $ - $ (284,152 ) $ (150,725 ) $ - $ (150,725 )
Dividends for preferred and participating securities (including dividends in arrears) (5,011 ) - (5,011 ) (5,014 ) - (5,014 )
Effect of redeemable share conversions (1,562 ) - (1,562 ) (1,577 ) - (1,577 )
Net loss for earnings per share calculations $ (290,725 ) $ - $ (290,725 ) $ (157,316 ) $ - $ (157,316 )

Net loss per share:
Basic and Diluted $ (5.38 ) $ (5.38 ) $ (3.03 ) $ (3.03 )

Weighted average shares outstanding:
Basic and Diluted 54,058 54,058 51,931 51,931

(1) Adjusted to exclude Consolidated Partnerships. Refer to "Adjusted Revenues" section.

(2) Includes prepayment penalties, expense reimbursements, gains on sales of mortgage loans and other revenues.

CENTERLINE HOLDING COMPANY AND SUBSIDIARIES

SELECTED FINANCIAL DATA

(unaudited)

(in thousands, except per share data) Nine Months Ended September 30,
2009 2008
As As As As
Reported Adjustments(1) Adjusted(1) Reported Adjustments(1) Adjusted(1)
Revenues:
Interest income $ 51,700 23,569 $ 75,269 $ 75,854 23,609 $ 99,463
Fee Income 48,941 27,953 76,894 52,205 37,319 89,524
Other (2) 14,017 2,011 16,028 14,569 2,305 16,874
Revenues of Consolidated Partnerships 237,458 (237,458 ) - 258,692 (258,692 ) -
Total revenues 352,116 (183,925 ) 168,191 401,320 (195,459 ) 205,861

Expenses:
General and administrative:
Salaries and benefits 53,789 - 53,789 72,504 - 72,504
Other 169,278 - 79,273 57,247 - 57,247
Total general and administrative expenses 223,067 - 133,062 129,751 - 129,751
Interest 55,594 - 55,594 70,646 - 70,646
Depreciation and amortization 31,877 - 31,877 34,350 - 34,350
Write-off of goodwill and intangible assets 100,000 100,000 118,069 118,069
Loss on impairment of assets 134,346 - 134,346 22,055 - 22,055
Interest and other expenses of Consolidated Partnerships 2,039,519 (2,039,519 ) - 307,509 (307,509 ) -
Total expenses 2,584,403 (2,039,519 ) 544,884 682,380 (307,509 ) 374,871
(Loss) income before other (loss) income (2,232,287 ) 1,855,594 (376,693 ) (281,060 ) 112,050 (169,010 )
Equity and other (loss) income (40,770 ) (67,111 ) (107,881 ) (78,800 ) 12,959 (65,841 )
Gain (loss) from repayment or sale of investments 583 - 583 (6,164 ) - (6,164 )
Other losses from Consolidated Partnerships (525,442 ) 525,442 - (215,657 ) 215,657 -
Loss before income taxes (2,797,916 ) 2,313,925 (483,991 ) (581,681 ) 340,666 (241,015 )
Income tax provision (1,023 ) - (1,023 ) (2,019 ) - (2,019 )
Net loss (2,798,939 ) 2,313,925 (485,014 ) (583,700 ) 340,666 (243,034 )
Net loss attributable to non-controlling interests 2,434,561 (2,313,925 ) 120,636 409,007 (340,666 ) 68,341
Net loss attributable to Centerline Holding Company shareholders $ (364,378 ) $ - $ (364,378 ) $ (174,693 ) $ - $ (174,693 )
Dividends for preferred and participating securities (including dividends in arrears) (15,035 ) - (15,035 ) (16,024 ) - (16,024 )
Effect of redeemable share conversions (4,685 ) - (4,685 ) (15,597 ) - (15,597 )
Net loss for earnings per share calculations $ (384,098 ) $ - $ (384,098 ) $ (206,314 ) $ - $ (206,314 )

Net loss per share:
Basic and Diluted $ (7.13 ) $ (7.13 ) $ (3.98 ) $ (3.98 )

Weighted average shares outstanding:
Basic and Diluted 53,896 53,896 51,840 51,840

(1) Adjusted to exclude Consolidated Partnerships. Refer to "Adjusted Revenues" section.

(2) Includes prepayment penalties, expense reimbursements, gains on sales of mortgage loans and other revenues.

Reconciliation of Net Income (Loss) attributable to

Centerline Holding Company Shareholders to Net Loss ("EPS")(1)

(in thousands, except per share data)

Three Months Ended September 30,
2009 2008
EPS / EPS Impact (diluted)(2) EPS / EPS Impact (diluted)(2)
(in thousands, except per share data)

Net loss Attributable to Centerline Holding Company Shareholders $ (284,152 ) $ (5.38 ) $ (150,725 ) $ (3.03 )
Certain items (primarily non cash): (3)
Loss on impairment of assets (held on our own account) 118,880 2.20 615 0.01
Our share of losses on impairment of assets held by Consolidated Partnerships (4)
59,917 1.11 4,367 0.08
Non-cash impact of derivatives 806 0.01 4,669 0.09
Mortgage revenue bonds re-securitized - - - -
Impairment of tax credit partnership investments (5) 1,782 0.03 - -
Impairment of loan to CMBS Fund Partnership 962 0.02 - -
Lease termination charge 1,022 0.02 - -
Reserves on Partnership advances, net 3,525 0.07 182 0.00
Equity losses in AMAC 5,000 0.09 75,775 1.46
Write-off of goodwill and intangible assets 100,000 1.85 118,069 2.27
Reserve for loan loss sharing - - - -
Affordable Housing loss reserve 90,000 1.66 - -
Non-controlling interest impact of above items (96,913 ) (1.79 ) (56,623 ) (1.09 )
Net loss Attributable to Centerline Holding Company Shareholders (excluding certain items (primarily non cash)) $ 829 $ (3,671 )
Effect of redeemable share conversions - 0.03 - 0.03
Dividends for preferred and participating securities including (5,011 ) (5,014 )
dividends in arrears (6)
EPS (excluding certain items (primarily non cash)) $ (4,182 ) $ (0.08 ) $ (8,685 ) $ (0.17 )

(1) We utilize Net Income (Loss) (on a segment basis) and earnings per share ("EPS") (on a consolidated basis) for purposes of measuring performance and capital allocation. These results are presented to assist investors in analyzing our performance as they exclude various items recorded in net loss that we believe are not indicative of the operating performance. There is no generally accepted accounting method for computing Net Income (Loss) and EPS and our computation may not be comparable to similar
measurements reported by other companies. For further information, see Notes to our condensed consolidated financial statements included in our Form 10-Q.

(2) EPS numbers may not add down to the total due to rounding.

(3) For a detailed description of these items, refer to the Company's Form 10-Q.

(4) Represents impact of our co-investment in the CMBS Funds and High-Yield Debt Fund Partnerships.

(5) Represents write-down of equity interests in tax credit property partnerships expected to be sold for less than our carrying value.

(6) Included in net loss per share (as reported).

Reconciliation of Net Income (Loss) attributable to

Centerline Holding Company Shareholders to Net Loss ("EPS")(1)
(in thousands, except per share data)

Nine Months Ended September 30,
2009 2008
EPS / EPS Impact (diluted) (2) EPS / EPS Impact (diluted) (2)
(in thousands, except per share data)

Net loss Attributable to Centerline Holding Company Shareholders $ (364,378 ) $ (7.13 ) $ (174,693 ) $ (3.98 )
Certain items (primarily non cash): (3)
Loss on impairment of assets (held on our own account) 134,346 2.49 22,055 0.43
Our share of losses on impairment of assets held
by Consolidated Partnerships (4) 82,687 1.53 7,076 0.14
Non-cash impact of derivatives (12,197 ) (0.23 ) (1,225 ) (0.02 )
Mortgage revenue bonds re-securitized - - 7,627 0.15
Impairments of tax credit partnership investments (5) 9,048 0.17 - -
Impairment loan to CMBS Fund Partnership 26,271 0.49 - -
Lease termination charge 29,456 0.55 - -
Reserves on Partnership advances, net 6,689 0.12 519 0.01
Equity losses in AMAC 5,000 0.09 78,057 1.51
Write-off goodwill and intangible assets 100,000 1.86 118,069 2.28
Reserve for loan loss sharing 5,460 0.10 1,325 -
Affordable Housing loss reserve 90,000 1.67 - -
Non-controlling interest impact of above items (121,020 ) (2.25 ) (64,948 ) (1.25 )
Net loss Attributable to Centerline Holding Company Shareholders (excluding certain items (primarily non cash)) $ (8,638 ) $ (6,138 )
Effect of redeemable share conversions - 0.09 - 0.30
Dividends for preferred and participating securities including (15,035 ) (16,024 )
dividends in arrears (6)
EPS (excluding certain items (primarily non cash)) $ (23,673 ) $ (0.44 ) $ (22,162 ) $ (0.43 )

(1) We utilize Net Income (Loss) (on a segment basis) and earnings per share ("EPS") (on a consolidated basis) for purposes of measuring performance and capital allocation. These results are presented to assist investors in analyzing our performance as they exclude various items recorded in net loss that we believe are not indicative of the operating performance. There is no generally accepted accounting method for computing Net Income (Loss) and EPS and our computation may not be comparable to similar
measurements reported by other companies. For further information, see Notes to our condensed consolidated financial statements included in our Form 10-Q.

(2) EPS numbers may not add down to the total due to rounding.

(3) For a detailed description of these items, refer to the Company's Form 10-Q.

(4) Represents impact of our co-investment in the CMBS Funds and High-Yield Debt Fund Partnerships.

(5) Represents write-down of equity interests in tax credit property partnerships expected to be sold for less than our carrying value.

(6) Included in net loss per share (as reported).

Certain statements in this document may constitute forward-looking statements
within the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on management's
current expectations and beliefs and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. Other risks and uncertainties are
detailed in Centerline Holding Company's most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission, and include, among others,
business limitations caused by adverse changes in real estate and credit markets
and general economic and business conditions; our ability to repay or
restructure our debt and the associated risks surrounding our contemplated
recapitalization; business limitations caused by adverse changes in real estate
and credit markets and general economic and business conditions; risks related
to the form and structure of our financing arrangements; our ability to generate
new income sources, raise capital for investment funds and maintain business
relationships with providers and users of capital;changes in applicable laws and
regulations; our tax treatment, the tax treatment of our subsidiaries and the
tax treatment of our investments; competition with other companies; risk of loss
from direct and indirect investments in commercial mortgage-backed securities
("CMBS") and collateralized debt obligations ("CDOs") and mortgage revenue
bonds; risk of loss under mortgage banking loss sharing agreements; risks
associated with providing credit intermediation; and risks associated with
enforcement by our creditors of any rights or remedies which they may possess.
Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks",
"estimates" and similar expressions are intended to identify forward-looking
statements. Such forward-looking statements speak only as of the date of this
document. Centerline Holding Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in Centerline Holding
Company's expectations with regard thereto or change in events, conditions, or
circumstances on which any such statement is based.

Centerline Holding Company
Hande Tuney, Investor Relations, 800-831-4826

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