-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OmO0RzjeQHMFuGSayMqjIyp6D9Vq+VgS1Wy7stfay5DOAkvQwpoYR7rPNgFduGnU C5bbPRnoQHzTS8v5QlOn9g== /in/edgar/work/20001103/0000912595-00-000016/0000912595-00-000016.txt : 20001106 0000912595-00-000016.hdr.sgml : 20001106 ACCESSION NUMBER: 0000912595-00-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001102 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MID AMERICA APARTMENT COMMUNITIES INC CENTRAL INDEX KEY: 0000912595 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 621543819 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12762 FILM NUMBER: 752582 BUSINESS ADDRESS: STREET 1: 6584 POPLAR AVE STREET 2: STE 340 CITY: MEMPHIS STATE: TN ZIP: 38138 BUSINESS PHONE: 9016826600 MAIL ADDRESS: STREET 1: 6584 POPLAR AVE STREET 2: SUITE 340 CITY: MEMPHIS STATE: TN ZIP: 38138 8-K 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 November 2, 2000 Date of Report (Date of earliest event reported) MID-AMERICA APARTMENT COMMUNITIES, INC. (Exact Name of Registrant as Specified in Charter) TENNESSEE 1-12762 62-1543819 --------- ------- ---------- (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number) 6584 POPLAR AVENUE, SUITE 340 MEMPHIS, TENNESSEE 38138 (Address of principal executive offices) (901) 682-6600 Registrant's telephone number, including area code (Former name or address, if changed since last report) Item 7. Financial Statements and Exhibits c. Exhibits Exhibit 99.1 Press Release Exhibit 99.2 Supplemental Data Item 9. Regulation FD On November 2, 2000, the Registrant issued a press release announcing its results for the third quarter of 2000. The related press release is attached hereto as Exhibit 99.1. Attached as Exhibit 99.2 is supplemental data to the financial information contained in the November 2, 2000 press release. On November 3, 2000, the Registrant held its third quarter 2000 conference call. The following is the script from that conference call. Third Quarter 2000 Conference Call November 3, 2000 Welcome to our commentary on Mid-America's third quarter earnings release yesterday afternoon. This is George Cates, CEO, and with me are Eric Bolton, President and COO and Simon Wadsworth, CFO. We'll not repeat particulars from that release, except for highlights. If you've not seen the release or would like a copy of our supplemental data, just contact Michelle Sargent at Mid-America or check our web site at www.maac.net. Before we begin, I would like to observe that some of our discussions this morning will involve forward-looking statements. Please refer to the safe-harbor language included in our press release and our 34-Act filings with the Securities and Exchange Commission (which are available at www.sec.gov), which describe certain risk factors that may impact our future results. This call is being recorded and members of the press may be participating. Highlights of our announcement yesterday are that o Funds From Operations were 67 cents per share for the third quarter, in line with forecasts and consensus o New development properties are leasing up as expected, performing well, and making a steadily growing contribution to both value and FFO per share. o Occupancy remains strong and resident turnover dropped as further evidence that homebuying pressures are easing. o Our capital structure risk was further reduced. o Almost 8% of our common equity has been repurchased in the last five quarters. o Eric is to become CEO in September, 2001 under our formal succession plan o And we won additional awards: the top national award for Community Service and numerous awards for portfolio excellence - more independent testimony to the superiority of our properties. The most important votes of that superiority are by our customers. Recently a regional peer company announced a big reduction in their development plans and earnings, also commenting on the highly competitive markets in which we all operate and the damage done to their earnings and balance sheet by their dependence upon variable rate debt. We believe that they over-dramatized the situation. Their remarks did not apply to Mid-America. o We said, 18 months ago, that it was time to reduce development commitments in our markets, and proceeded to do so. o The markets in which we each operate continue to be more-or-less in balance, with some slight oversupply. There has been no dramatic shift from the outlook that we've foreseen over the past several quarters, nor is there now. o We're accustomed to operating in a competitive environment, and like to stay ahead of the markets and market trends. Eric will address how we're continuing to outperform our regional market norms. o We've reduced our dependence upon conventional variable rate debt to 9% and have very little interest rate exposure risk. We continually gain balance sheet flexibility as our development pipeline matures. Our share prices were immediately caught in a market downdraft induced by their announcement, which had virtually no relation to our position. Bolton: Operating results for the third quarter reflect continued strong occupancy performance as well as improving trends in unit turnover. Occupancy within our stabilized portfolio of properties has been 95% or better for 6 consecutive quarters with resident turnover down 6% for this most recent quarter. In addition to consistently strong occupancy performance, we are generating a steady improvement in rent growth with same store rent growth in the third quarter at 2.9%, the highest we've seen in four quarters. Somewhat offsetting these improving trends and strong occupancy results is continued pressure from concession costs as several of our properties face new development competition. While job growth and new supply absorption continues to be generally stable throughout the Southeast and Texas markets, new development activity is currently creating pockets of market weakness in several locations. However, we remain comfortable with the stability of our markets as a whole and with the solid portfolio diversification we have in our large, middle and small tier markets throughout the region. The Southeast and Texas continues to generate very stable apartment housing demand and represents a number of the strongest job growth markets in the country. While new development will still over supply markets on occasion, we do see more discipline in the capital markets and remain confident that the pockets of over supply within our markets are temporary. In other words, it's pretty much business as usual in this highly competitive business. Thus, we continue to aggressively manage the fundamentals and operate our properties with our traditionally strong "hands on" intensity. As noted in the supplemental information to the press release, our portfolio's occupancy outperformed the market again for this most recent quarter. Additionally, with our markets on an weighted average basis generating 2.6% rent growth, our properties also outperformed the market's rent growth for the third quarter. This above market performance is a strong statement about the quality of our properties, their superior locations and the intensity of our property management operation. As anticipated, property operating expense growth was slightly higher in the third quarter than what we've seen over the last four quarters. Overall operating expense control remains strong. The majority of the property level operating expense pressure was limited to temporary marketing and advertising expense, as well as an increase in property and casualty insurance costs. With the hardening of the insurance markets since the first of the year, we incurred an increase in premium cost of 15% for the current policy year. Despite these increases and a comparison to a very strong prior year property level expense growth performance of only .2%, we were able to contain same store expense growth in the third quarter to 2.6%. Our water meter program continues to make very solid progress and steadily growing contributions. Same store portfolio utility expenses posted a 10% decline from the third quarter of last year. While we expect there to be some leveling off in the significant gains we made over the last two years in lowering water expense, we do expect to see some continued growth in the benefits associated with this initiative for the next couple of quarters. In general, we expect to see continued strong performance from our utility expense management program. We are unaffected by any potential run-up in heating oil or natural gas costs as virtually all of our properties are fully electric with the costs paid for by the resident. Our new development pipeline continues to lease up very well. We are off to a strong start with leasing at Grand View in Nashville where we took delivery of our first units early in the third quarter. We are currently 100% leased in the 129 units delivered to date. Overall, our lease up properties continue to meet expectations and although we expect some moderation in occupancy gains over the slower leasing winter season, we are on track for stabilizing the bulk of the existing pipeline in the second quarter of next year. At quarter end our overall leased status was 68% of those units turned over for leasing. We remain on target for completing lease up of three of our new development properties in the second quarter of next year. In addition, we continue to forecast initial delivery of units at our phase III expansion of our Reserve at Dexter Lake property in the second quarter. Ancillary income programs continued to grow during the quarter with non-rental income up 42% over last year. Revenues from our telephone service sales program have grown by 33% year to date. In addition, during the quarter we initiated sales of our new high speed internet service at 15 properties. We are working through the wiring and installation process for this new internet service and plans are to have the entire portfolio of units high-speed internet accessible by the end of the first quarter; laying the foundation for continued aggressive growth of non-rental income as the programs begin to mature in 2002. Wadsworth: During the 3rd quarter we continued to upgrade the portfolio through asset sales. We sold Whispering Oaks, a 22-year old property with 207 units in Little Rock, Arkansas, for net proceeds of $6.2 million with an effective cap rate of 8.9%. In October we sold two small properties, Riverwind and 2000 Wynnton, in Columbus, GA totaling 116 units for net proceeds of $2.9 million. These 17-year old assets were sold at an average cap rate of 9.5%. We plan to sell several other properties which are at various stages of negotiation. We have a contract to sell one 28-year old property this month for net proceeds of $5.4 million. We expect to sell two additional older properties next year for $13 million. As we have previously stated, we will fund the development pipeline through use of our credit facilities, and as of today have $42 million available on our credit line, although these asset sales will assist in maintaining our leverage at our desired level. This quarter we anticipate investing a total of $9 million in development, leaving a balance of $16.5 million to complete the program next year. We are projecting improving balance sheet flexibility and coverages as leasing continues; we are comfortable with our level of debt and preferred stock, and intend to manage the business within the existing balance sheet parameters. Likewise, our dividend coverage is sound and steadily improves along with the development lease-up. We continue to evaluate opportunities to recycle assets into share repurchases but at present we are focussed on maintaining our balance sheet strength until the bulk of our development properties are completed and further stabilized. As of the end of October, our developments at Reserve at Dexter Lake Phase II, Kenwood Club, and Grande Reserve in Lexington are complete, representing a total investment of almost $68 million. Eric has detailed lease-up information on these properties; we reached 80% occupancy as of the end of October at Reserve at Dexter Phase II, with Kenwood Club at 68% and Grande Reserve at 48% occupancy. Overall we continue to be pleased with the lease up progress on these properties and at Grande View Nashville which is still under construction (with completion anticipated in the first quarter of next year). On an annualized basis, our recurring capital expenditures have averaged $400/unit for the first three quarters of this year, which reflects our full year plan. With fully-diluted FFO for the first nine months of $2.08/share, FAD is $1.63/share, and free cash flow (including non-cash amortization of deferred financing costs and non-real estate depreciation) is $1.75/share, slightly ahead of our distributions. At $25 million, our development in process at quarter end was less than half of the level three months ago, which reflects the effective completion of the three developments that I mentioned. We do have a substantial, but declining, earnings drag from the unoccupied units, but our financial strength (and value per share) is projected to grow steadily with our leasing activity this quarter and through the next two years. As anticipated in the last conference call, G & A expense decreased to 6.5% of revenues from 6.8% for the same quarter last year, an absolute reduction of $149,000. For the full year, we continue to forecast G & A to increase less than 4% over last year's $14.5 million. We presently incorporate our property bonuses in our G & A which exaggerates the apparent G & A expense; we intend next year to capture these bonuses in property expense. Our overhead continues to be in line or below others in our industry. We have received approval of an increase of our Fannie Mae credit facility to almost $300 million, where we are borrowing at less than 67 bp over three month Libor. We announced previously we have fixed the rate on $65 million of this at 7.71%, and have swapped a further $50 million of this credit facility (of which $186 million is outstanding) at an effective rate of 7.45%. As we said in the press release, we continue to forecast FFO/share of 71 cents for the last quarter of this year and $2.90 for next year, with a 70 cent first quarter. The most important variables continue to be meeting our same-store NOI growth projection of around 2.5%, and our lease-up expectations for the development properties. As Eric has mentioned, markets continue to be competitive, but we believe that our projections are realistic. We see earnings accelerating as the development pipeline matures, with significant improvement next year and in 2002 as well. Cates: We have sold almost $200 million in assets since early 1999, adding share value through both new development and share repurchase. Most of those sold were older, higher cap rate properties; all showed sound cash flow. Since on the other hand any new development property is a temporary drag on earnings until leased up, these transactions created a short-term drop of FFO/share in 1999 - even carrying through to roughly 12 cents per share for this current year. We expect to recover that, and more, as the new properties mature over the next couple of years. We know that we're adding substantially to value, but we must complete the passage through the remaining short-term pressure on earnings induced by these productive transactions, all reflected in our forecasts and consensus. (Q & A Followed) A comment relating to share purchase that arose in the conference call: The decision to start a Reserve at Dexter Phase III, was made before MAA's price dropped 10%, an example of the difficulty in managing a long term business on short term market swings. The above project is a third phase of a large development. We believe it is in the best economic interest of shareholders to complete the project; also the company saved substantial construction dollars and also gained numerous intangible benefits from using the same construction crew by proceeding with construction immediately after the completion of Phase II. In order to maintain our balance sheet strength and maintain leverage as at present, the proceeds of any asset sales would need to be used to pay down debt disproportionately to our capital structure. Earnings and value per share additions would be very modest, at best.. Once the development pipeline matures, flexibility to move rapidly to repurchase shares improves. As indicated on the call, for various reasons we do not believe that it is necessarily the best time to be selling apartment assets in our markets at present. Sale cap rates are less attractive now than throughout 1999 and early 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MID-AMERICA APARTMENT COMMUNITIES, INC. Date: November 3, 2000 /s/ Simon R.C. Wadsworth ----------------- ----------------------------- Simon R.C. Wadsworth Executive Vice President (Principal Financial and Accounting Officer) EX-99.1 2 0002.txt EXHIBIT 99.1 NOVEMBER 2, 2000. MEMPHIS, TN . MID-AMERICA APARTMENT COMMUNITIES (NYSE:MAA) Announces new development performance and earnings meet expectations o Funds From Operations (FFO) of 67 cents per share for the third quarter, 2000, in line with company forecasts and consensus expectations o New development properties continue to lease up as expected and perform well; steadily growing contribution to value and FFO per share o Markets are balanced, with a few pockets of overbuilding. MAA's diversified portfolio in strong job growth states is well positioned o Occupancy remains strong at 95.4%. Resident turnover dropped by 6%. o Capital structure risk further reduced: conventional floating rate debt now only 9% of all debt o Over 1.7 million MAA shares (almost 8%) repurchased in the last five quarters o H. Eric Bolton, Jr. to become CEO in late 2001 under formal succession plan o More awards: U.S. Community Service and portfolio excellence Mid-America Apartment Communities, Inc. (MAA:NYSE) today announced Funds From Operations (FFO) of 67 cents per share for the third quarter which ended September 30, 2000. "Earnings for the quarter met our and consensus expectations and were one of our best third quarters ever. We continue to expect that FFO growth per share will accelerate in the latter half of 2001 as new development properties stabilize," said George E. Cates, Chairman and CEO. "When coupled with our solid dividend, the true return - share value growth plus cash paid out - - to our owners continues to grow at a solid rate, both short term and over long periods of time." "Three of our five new development properties, totaling 934 units and representing an investment of $68 million, are now effectively complete," said H. Eric Bolton, Jr., President and Chief Operating Officer. "63% are occupied or leased. We expect the leasing rate to slow somewhat during the winter months, a normal seasonal pattern, and to complete lease-up by the end of the second quarter next year. These properties are meeting forecasts. Two additional development properties with 677 apartments will be completed next year at a total expected cost of $52 million, of which $30 million has already been invested, with the balance to be financed by our credit facilities. We've already completed 129 of these apartments and 100% are occupied or leased." "On average, we anticipate that our new properties will generate a 10% NOI yield in their first year of stabilization. The new development pipeline continues to meet expectations. Upon stabilization, we will have added significant value to MAA shares as a result of our new development program over the last three years. While this investment strategy diminished our earnings last year, the short term FFO pressure now lessens steadily and should be behind us entirely by the end of next year. The value-building benefits of this major, positive investment in the future will show increasingly, especially as we reach the prime leasing quarters in the second half, 2001." "Our markets continue to be in balance generally, although we have seen some increase in new supply pressures over the summer in a few of our markets. Occupancy at September 30 was a solid 95.4%, down only 0.1% from a year earlier. Same store occupancy was 95.5%, down 0.1%. We're pleased with the progress made in lowering resident turnover, down 6% in the third quarter as compared to a year earlier." "Average rental rate per unit increased 3.7% to $637.20. Same store average rental rate per unit was up 2.9% and revenues, +2.2%. Same store property level expenses were up 2.5%, all expenses (including property taxes and casualty insurance) +2.6%, and net operating income +2.0%. We continue to foresee NOI growth of about 2.5% for the next year or so, reflected in consensus and our forecasts. As has been the case, market conditions remain demanding and most growth will result from the steadily increasing contribution of our new development pipeline." "Most new supply pressure has come from activity in our Columbia, SC; Columbus, GA, and Memphis markets, with modest overbuilding occurring in others. Austin, Atlanta, Dallas, Jacksonville and Jackson, MS continue to perform well. You will note from the details posted on our web page, www.maac.net, that we continue to outperform our markets. Our well-diversified portfolio, with a solid mix of large-, middle- and small-tier markets throughout the thirteen-state area of the southeast and Texas, is properly positioned for solid long-term performance. The sunbelt states remain as the most vibrant job growth areas of the country and should continue, over time, to deliver the highest risk-adjusted performance." Simon Wadsworth, CFO, said that "the company's internal forecast of 71 cents/share for the fourth quarter, 2000 remains intact. Subject to a number of variables such as changes in anticipated market conditions and the pace of new development lease-up, we continue to expect 2001 FFO per share to be 70 cents for the first quarter and $2.90 for the full year." Bolton added that "the first quarter will be the toughest as we'll be dealing with the demands of leasing 366 recently delivered and presently vacant new units during winter time, the traditionally weakest leasing season of the year." "Revenue yield per unit is increasing faster than same store revenue per unit, reflective of the unrelenting upgrading of our award winning portfolio, whose current average age is 11.4 years. We continually reduce our average portfolio age as we add new properties while selling older ones. As most recently announced on September 28 (see the company's web page), Mid-America continues to earn more independent recognition for portfolio excellence than does any other apartment REIT." Wadsworth: "In the last 12 months we've further improved our award-winning portfolio by selling 2,542 apartments whose average age was 22 years for $84 million, and at an average cap rate of 8.7%. We've simultaneously added 1,479 new or recently constructed units. Our overall return on assets continues among the leaders in our industry at 8.8% and rising. Overhead costs continue to be tightly controlled, and as projected early in the year we anticipate only inflationary growth for the full year." "Current street estimates of net asset value range from $27.51 to $29.25 per share, which seems to us a reasonable range. Even so, these estimates may understate our true intrinsic value, based upon the discounted present value of our anticipated future cash flow and thus including the growing and future contribution from our new development pipeline." "As planned, during the quarter we took advantage of a debt market rally to fix interest rates on $115 million of variable rate debt at the interest rates we'd projected, and therefore with no impact on our forecast for the remainder of this year or next year. This reduced our conventional variable rate debt to 9% of our outstanding debt; we have a further 4% in tax-free low-floaters. Our average debt cost is 7.15%. $40 million of 8.6% debt matures mid-2001; our projections assume its refinance at current rates," said Wadsworth. "Almost 8% of our equity has been repurchased in the pasts five quarters at an average price of $22.56 per share. We will continue to seek opportunities to repurchase when, by so doing, we can add materially to share value while maintaining leverage at or below its present and comfortably safe level. Our intense focus for now is on completing the lease-up of our development pipeline, at which time we will have several value-building options open to us." "Our financial position, including our sound dividend coverage, strengthens as the development pipeline is completed and stabilized. Our balance sheet is conservatively structured for the apartment market which over the years, especially in our very well diversified markets, has been a remarkably stable business." In addition to the third quarter results, the company also announced that under its formal succession plan, George E Cates will retire as CEO on September 25, 2001 at which time President and Chief Operating Officer H. Eric Bolton, Jr. will succeed to the CEO position. Cates will remain as executive Chairman of the Board until his 65th birthday on September 25, 2002. Cates said "my retirement and Eric's move into the CEO role has been under discussion by the Board and planned for some time. We are fully confident that under his leadership, Mid-America will continue to grow share value and generate solid returns for our owners, employee associates, and resident customers." Mid-America was chosen as national winner of Multifamily Executive magazine's Community Service Award on October 18, awarded to the company that has best taken an active role in local or national markets by offering time, services, people and resources for charitable causes. The company's Open Arms and community services programs were particularly cited for excellence in the national award. A conference call will be held on Friday, November 3, 2000 at 10AM (CST) to discuss third quarter matters. Call in number is 800-837-6858; moderator's name George E. Cates; conference ID 2954342 or "Mid-America Apartment Communities." The conference will also be available on digital replay. To access the replay, please dial 888-843-8954 and enter the passcode 2954342, through November 10, 2000. The replay will also be available on our web site, www.maac.net. MAA is a self-administered, self-managed apartment-only real estate investment trust which owns or has ownership interest in 34,183 apartment units throughout the southeastern and midwest U.S. and in Texas, including 572 units in the development pipeline. For further details, please refer to our website at www.maac.net or contact Simon R. C. Wadsworth at (901) 682-6668, ext. 104. 6584 Poplar Ave., suite 340, Memphis, TN 38138. Certain matters in this press release may constitute forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Such statements include, but are not limited to, statements made about anticipated growth rate of revenues and expenses at Mid-America's properties, anticipated lease-up (and rental concessions) at development properties, costs remaining to complete development properties, planned disposition, disposition pricing, and planned acquisitions and developments. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including a downturn in general economic conditions or the capital markets, competitive factors including overbuilding or other supply/demand imbalances in some or all of our markets, construction delays that could cause new and add-on apartment units to reach the market later than anticipated, changes in interest rates and other items that are difficult to control such as insurance rates, increases in real estate taxes in many of our markets, as well as the other general risks inherent in the apartment and real estate businesses. Reference is hereby made to the filings of Mid-America Apartment Communities, Inc., with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, reports on Form 8-K, and its annual report on Form 10-K, particularly including the risk factors contained in the latter filing. MID-AMERICA APARTMENT COMMUNITIES, INC. ("MAA") CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands - except per share data)
Three months ended September 30, Nine months ended September 30, ------------------------------- ----------------------------------------- 2000 1999 2000 1999 -------------- --------------- -------------------- ------------------- Property revenues $56,470 $56,526 $166,553 $168,814 Property operating expenses 22,029 21,826 62,602 64,282 - --------------------------------------------------------------------------------------------------------------------------------- Net operating income 34,441 34,700 103,951 104,532 Interest and other non-property income 309 323 1,023 1,033 Management and development income, net 187 149 549 572 FFO from real estate joint ventures 274 235 723 474 General & adminstrative 3,700 3,844 11,226 9,993 Interest expense 13,006 12,116 37,544 36,312 Preferred dividend distribution 4,028 4,028 12,087 12,084 Depreciation and amortization non-real estate assets 167 95 359 289 Amortization of deferred financing costs 620 682 2,152 2,059 - --------------------------------------------------------------------------------------------------------------------------------- Funds from operations 13,690 14,642 42,878 45,874 Depreciation and amortization 12,570 12,100 38,496 37,047 Joint venture depreciation adjustment included in FFO 303 250 902 438 Preferred dividend distribution add back (4,028) (4,028) (12,087) (12,084) - --------------------------------------------------------------------------------------------------------------------------------- Income before gain on sale of assets, minority interest and extraordinary item 4,845 6,320 15,567 20,473 Net gain on sale of assets 1,119 5,125 10,504 5,457 Minority interest in operating partnership income (337) (917) (2,280) (1,699) - --------------------------------------------------------------------------------------------------------------------------------- Net income before extraordinary item 5,627 10,528 23,791 24,231 Ex item - Loss on debt extinguishment , net of MI - - 204 67 Preferred dividend distribution 4,028 4,028 12,087 12,084 - --------------------------------------------------------------------------------------------------------------------------------- Net income available for common shareholders $ 1,599 $ 6,500 $ 11,500 $ 12,080 ================================================================================================================================= PER SHARE DATA: Funds from operations per share - Basic $ 0.67 $ 0.66 $ 2.09 $ 2.09 Funds from operations per share - Fully Diluted $ 0.67 $ 0.66 $ 2.08 $ 2.08 Net income available for common shareholders before extraordinary items - Basic $ 0.09 $ 0.34 $ 0.67 $ 0.64 Net income available for common shareholders after extraordinary items - Basic $ 0.09 $ 0.34 $ 0.65 $ 0.64 Dividend declared per common share $ 0.580 $ 0.575 $ 1.740 $ 1.725 OTHER DATA: Weighted average common shares and units - Basic 20,436 22,024 20,522 21,972 Weighted average common shares and units - Fully Diluted 20,520 22,039 20,582 22,017 Number of apartment units with ownership interest, excluding development units not delivered 33,727 34,733 33,727 34,733 Apartment units added (sold) during period, net 136 (92) (174) 902
CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
(Unaudited) September 30, 2000 December 31, 1999 -------------------- ------------------- Assets: Real estate assets, net $1,249,346 $1,248,051 Cash and cash equivalents, including restricted cash 34,150 26,629 Other assets 27,447 24,143 - --------------------------------------------------------------------------------------------------------------------------------- Total assets $1,310,943 $1,298,823 ================================================================================================================================= Liabilities: Bonds and notes payable $ 776,512 $ 744,238 Other liabilities 40,200 34,641 - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 816,712 778,879 Shareholders' equity and minority interest 494,231 519,944 - --------------------------------------------------------------------------------------------------------------------------------- Total liabilities & shareholders' equity $1,310,943 $1,298,823 =================================================================================================================================
EX-99.2 3 0003.txt EXHIBIT 99.2 Supplementary Financial Information 3rd Quarter 2000 Financial Statistics ( in 000's, except per share data) - -----------------------------------------------------------------------------------------------------------------------------------
Payment Payment Record Dividends Information (latest declaration): per share Date Date ---------------- ---------------- ----------------- Common Dividend - quarterly $0.5800 10/31/2000 10/24/2000 Preferred Series A - monthly $0.1979 11/15/2000 11/01/2000 Preferred Series B - monthly $0.1849 11/15/2000 11/01/2000 Preferred Series C - quarterly $0.5859 10/15/2000 10/01/2000
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Annualized ROA: 3rd Qtr 2000 Trailing 4 Qtrs ---------------- ----------------- Gross Real Estate Assets, Average (in 000's) $1,414,426 $1,399,662 EBITDA $ 124,832 $ 125,498 EBITDA/Gross Real Estate Assets (%) 8.8% 9.0%
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3rd Qtr 2000 3rd Qtr 1999 ---------------- ---------------- Common and Preferred Dividends as % of FFO 89% 89% EBITDA/Debt Service (1) 2.14 2.28 EBITDA/Fixed Charges (2) 1.68 1.77 Total Debt as % of Gross Real Estate Assets 55% 51% MAA portion of JV debt $29,153 $27,495 Capitalized Interest YTD $ 2,950 $ 3,104
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FAD: 3rd Qtr 2000 3rd Qtr 1999 YTD 2000 YTD 1999 ---------------- ---------------- ----------------- ---------------- FFO $13,690 $14,642 $42,878 $45,874 Average Units 30,869 32,273 30,940 33,143 Average Shares - Fully Diluted 20,520 22,039 20,582 22,017 Recurring Capex (annual $400/unit) $ 3,087 $ 3,227 $ 9,282 $ 9,943 FAD $10,603 $11,415 $33,596 $35,931 Free Cash Flow (3) $11,390 $12,192 $36,107 $38,279 Per Share (Fully Diluted): FFO $ 0.67 $ 0.66 $ 2.08 $ 2.08 FAD $ 0.52 $ 0.52 $ 1.63 $ 1.63 Free Cash Flow (3) $ 0.56 $ 0.55 $ 1.75 $ 1.74 Distribution $ 0.58 $ 0.575 $ 1.74 $ 1.725
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Debt: Principal Average Years Balance To Maturity Average Rate ---------------- ---------------- ----------------- Fixed Rate -Conventional $505,734 8.9 7.4% Fixed Rate -Tax-free 94,870 22.9 6.2% Line of Credit - Swapped to Fixed Rate 75,000 4.6 6.9% Variable Rate - Tax-free 31,817 27.1 5.8% Variable Rate - Conventional 69,091 6.4 7.4% ---------------------------------------------------- Total $776,512 10.9 7.15% ====================================================
Future Payments as of September 30, 2000: Scheduled Amortization Maturities Total ----------------- --------------- ----------------- 2000 $ 1,042 $ 0 $ 1,042 2001 4,473 42,729 47,202 2002 4,542 11,390 15,932 2003 4,338 181,821 186,159 2004 4,279 71,168 75,447 Thereafter 173,445 277,285 450,730 ---------------------------------------------------- Total $192,119 $584,393 $776,512 - ------------------------------------------------------------------------------------------------------------------------
(1) Annualized EBITDA for trailing six months to annualized debt service (aggregate of principal and interest) for same period. (2) Annualized EBITDA for trailing six months to annualized fixed charges (aggregate of preferred distributions, principal and interest)for same period. (3) Includes addback of other non-cash items, primarily non-real depreciation and amortization. Supplementary Financial Information 3rd Quarter 2000 Apartment Data (end of period) - -------------------------------------------------------------------------------------------
All Properties: 2000 1999 % Inc. --------------- ---------------- -------- Total Units, including ownership interests 33,727 34,733 -2.9% Average Rental Rate (1) (2) $637.20 $614.50 3.7% Physical Occupancy (1) (2) 95.4% 95.5% -0.1%
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Same Store (1): 3rd Qtr 2000 3rd Qtr 1999 --------------- --------------- Revenue $50,262 $49,187 2.2% -------------------------------- Operating Expenses 13,268 12,950 2.5% RE Taxes and Insurance 5,554 5,399 2.9% -------------------------------- Total Expenses 18,822 18,349 2.6% -------------------------------- NOI $31,440 $30,838 2.0% ================================ Units 27,769 27,769 Average Rental Rate $628.49 $610.74 2.9% Physical Occupancy 95.5% 95.6% -0.1%
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MAA Occupancy Market Occupancy by Geographic Market: End of Qtr (2) Occupancy (3) ----------------- --------------------- Alabama 95.3% 91.8% Arkansas & Missouri 96.9% 96.2% Chattanooga, TN 95.0% 91.7% Florida (except JAX) 95.5% 92.4% Georgia 95.0% 92.5% Jackson, TN 95.9% 93.9% Jacksonville, FL 94.7% 94.0% Kentucky & Ohio 96.5% 93.5% Memphis, TN 94.8% 93.4% Mississippi 94.6% 94.1% N. Carolina & Virginia 95.6% 95.9% Nashville, TN 96.3% 94.9% S. Carolina 95.6% 93.9% Texas 96.0% 94.4%
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MAA Rental Rate by Geographic Market (1) (2): 3rd Qtr 2000 3rd Qtr 1999 % Chg. --------------- ------------- ------ Alabama $640.30 $606.90 5.5% Arkansas & Missouri $580.20 $566.50 2.4% Chattanooga, TN $634.40 $626.20 1.3% Florida (except JAX) $679.40 $658.00 3.3% Georgia $686.10 $667.30 2.8% Jackson, TN $596.80 $582.00 2.5% Jacksonville, FL $651.40 $631.40 3.2% Kentucky & Ohio $621.40 $604.10 2.9% Memphis, TN $612.90 $575.40 6.5% Mississippi $559.50 $548.60 2.0% N. Carolina & Virginia $627.90 $594.10 5.7% Nashville, TN $676.00 $626.40 7.9% S. Carolina $605.20 $590.80 2.4% Texas $637.10 $621.10 2.6%
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3rd Qtr 2000 MAA Owned Properties, including Ownership Interests: Properties Apartments % total ------------- ---------------- -------- Memphis, TN 13 4,643 14% Chattanooga, TN 4 943 3% Nashville, TN 4 1,095 3% Jackson, TN 5 664 2% Georgia 25 5,981 18% Texas 15 4,312 13% S. Carolina 12 2,604 8% Jacksonville, FL 8 2,726 8% Florida (except JAX) 13 3,758 11% Mississippi 8 1,925 5% Kentucky & Ohio 8 1,962 6% Arkansas & Missouri 4 1,128 3% N. Carolina & Virginia 4 1,034 3% Alabama 4 952 3% ----------------------------------------- Total 127 33,727 100% - -------------------------------------------------------------------------------------------
(1) Prior year information restated to represent units currently owned. (2) Information represents owned properties not in lease-up. (3) Total market information as of end of second quarter 2000, latest available information. Supplementary Financial Information 3rd Quarter 2000 Development Pipeline Summary ($ in 000's) ($ in 000's) - ------------------------------------------------------------------------------------------------------------------------------------
Actual/Forecast Apartemnts ----------------------------------- -------------------------- Current Total Estimated Cost to Construction Initial Stabil- Units Cost Date Start Finish Occupancy ization Available Leased Occupied ------ --------- ------- ---------------- ---------- ------- --------- ------ -------- Development Communities: In Lease-up Location Grand Reserve Lexington Lexington, KY 370 33,136 30,730 3Q 1998 3Q 2000 4Q 1999 2Q 2001 370 165 155 Reserve at Dexter Lake Phs II Memphis, TN 244 16,670 15,597 2Q 1999 4Q 2000 1Q 2000 1Q 2001 220 186 168 Kenwood Club at the Park Katy, TX 320 17,962 17,335 2Q 1999 2Q 2000 1Q 2000 2Q 2001 320 226 213 Grande View Nashville Nashville, TN 433 35,822 28,598 1Q 1999 1Q 2001 3Q 2000 2Q 2002 129 131 97 ------------------------- -------------------------- 1,367 $103,590 $92,260 1,039 708 633 ------------------------- -------------------------- Under Construction / Pre-development: Reserve at Dexter Lake Phs III Memphis, TN 244 16,830 1,652 3Q 2000 4Q 2001 2Q 2001 2Q 2002 ------------------------- 244 $16,830 $ 1,652 ------------------------- Total 1,611 $120,420 $93,912 1,039 708 633 ========================= =========================== - ------------------------------------------------------------------------------------------------------------------------------------
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