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 AND EXCHANGE ACT OF 1934
October 31, 2002
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 300
MEMPHIS, TENNEESSEE 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 9. Regulation FD
(a) Conference Call
Mid America Apartment Communities, Inc. (MAA)
3rd Quarter 2002 Earnings Release Conference Call Transcript
November 1, 2002
Eric Bolton: Good morning. This is Eric Bolton, CEO of Mid-America Apartment
Communities. With me are Simon Wadsworth, our Chief Financial Officer, and Al
Campbell, Vice-President of Financial Planning. Before we proceed, Al will
provide required statutory disclosure as well as instructions on how you can
obtain additional information on our results.
Al Campbell: This morning we will make forward-looking statements. Please refer
to the safe-harbor language included in our press release and our 34-Act filings
with the SEC, which describe risk factors that may impact future results. This
call is being recorded and the press may be participating.
To obtain a copy of yesterday's earnings release as well as a copy of the
transcript of our prepared comments this morning, we direct you to our web site
at www.maac.net. A replay of this morning's call will be available through
November 11th, 2002, by dialing 800-938-1595.
Eric Bolton: Thanks Al. In our prepared comments this morning we will provide
additional insights on third quarter results. I will provide an overview on
operating results for the quarter. Al will recap portfolio performance by market
segment and provide insights on what we expect from our major markets going
forward. Simon will discuss our balance sheet and forecast for the remainder of
the year. We will then open the phone lines for any questions that you may have.
Our prepared comments will last approximately 15 minutes.
Leasing and occupancy results during the third quarter continue to reflect the
tough market conditions. Same store occupancy performance during the quarter
averaged 94.7%, which is down slightly from the 94.8% of the preceding second
quarter. Leasing traffic declined 14% this past quarter as compared to the same
period of last year and concessions continue to run high in several of our
markets. Al will provide a little more insight on leasing concessions in his
market performance summary. In addition to the slightly weaker occupancy
performance, revenues were pressured by an increase in collection loss which was
up 9.7% over the third quarter of last year as job loss and the weak economy
take their toll. Off-setting these trends to some extent was a slight decline in
unit turnover as same store resident move-outs were down slightly by .7%.
While demand levels continue to be soft, we are encouraged by the steady decline
in construction starts and new unit delivery in most of our markets. We remain
comfortable with our prior assessment that market conditions have bottomed out
throughout the majority of our portfolio and continue to believe that we will
not see meaningful deterioration in performance from our portfolio from this
point forward.
Various initiatives and programs associated with on-site operations productivity
continue to post solid results as operating expenses controllable at the
property level posted only a 1.8% increase on a same store basis over the
comparable quarter of a year ago. Total property level expenses increased by
3.3% as a result of higher costs incurred in the renewal of our property and
casualty insurance program effective at the beginning of this quarter.
Al Campbell: I'll begin by providing an overview of the markets contributing
most to our performance during the current quarter. Our larger markets producing
the strongest revenue growth compared to prior year were Memphis (2.7%) and
Houston (2.5%). Our smaller tier markets as a whole also provided solid
performance, growing revenues 3.2% over the prior year. Our Florida markets of
Jacksonville and Tampa provided continued steady, essentially flat, performance
as compared to the prior year. Our most challenging markets for revenue growth
compared to the prior year were Dallas (9.3% decline), Austin (9.1% decline) and
Atlanta (2.4% decline).
We were encouraged by the continuing improvement in our Memphis portfolio.
Occupancy during the quarter increased 2.5% over the prior year, while
concession levels also slightly improved. The Memphis market is beginning to
improve, as multifamily permitting decreased 41% over the last 12 months while
the number of jobs in the market has increased 1.3% from the low point in
January of this year. We expect continued stable performance from our Memphis
portfolio throughout the remainder of this year and into 2003.
Dallas was our most challenging market during the quarter, as average occupancy
slipped 2.4% from the prior quarter. The Dallas market, particularly North
Dallas, continues to experience negative absorption as substantial new supply
deliveries occur amidst continued job losses. In contrast to many of our other
markets, concessions in our Dallas portfolio are significantly increasing,
currently at 4.7% of net potential rent. We expect Dallas to remain weak for the
next several quarters.
We also saw continued softness in our Atlanta portfolio during the quarter as
the sequential progress achieved over the last few quarters essentially stalled,
producing revenues flat with the prior quarter and 2.4% below the prior year.
Multifamily permitting has begun to slow with a 10% reduction shown over the
last 12 months, but job levels continue to be well below the prior year. We
expect the Atlanta market to continue to be difficult through the first half of
2003, with recovery beginning as the national economy improves.
As mentioned, our Florida markets of Jacksonville and Tampa remained relatively
stable during the quarter producing revenues essentially flat with the prior
year and the prior sequential quarter, and ending the quarter with stable
occupancy: Jacksonville (94.9%) and Tampa (92.9%). We expect continued stable
performance from our portfolios in these markets, as we see no significant
imbalances between supply and demand in the near term.
Also as mentioned, we were pleased with the stability of our portfolio of
properties in smaller tier markets during the quarter, which produced solid
revenue growth over prior year, lead by Jackson, TN (5.4%), Jackson, MS (4.2%),
Little Rock (4.4%), and Columbus, GA (3.3%). This performance reflects the
strength of our diversification across large, middle, and smaller tier markets
throughout the southeast.
Overall, we expect a tough operating environment to continue in most of our
markets well into 2003, with only slight general recovery beginning in the third
quarter. We are projecting little rent growth, with improving concessions during
the second half of the year.
We continue to pursue numerous acquisition opportunities for our joint venture
in the larger and higher growth markets of the Southeast and Texas, with current
activity in Houston, Dallas, Atlanta, Jacksonville and Nashville. Acquisition
markets continue to be very competitive and we remain very disciplined in our
approach.
Simon Wadsworth: We completed the purchase of Preston Hills for $33.5 million at
the beginning of the quarter, and we expect to contribute it as our first
investment in our joint venture with Crow Holdings during the first part of this
month. We'll apply the proceeds from the sale of the 2/3 share that Crow will be
buying to reduce our lines of credit. We've completed the negotiations for a
$100 million Freddie Mac credit facility for the joint venture, and we will be
using this to finance the additional investments we're hoping to make within the
JV over the next 3 to 6 months. As a reminder, we'll have a 1/3 ownership of the
JV, and we expect a total equity investment from Crow and MAC of $50 million.
Our average interest rate continues to drop, and at the end of the quarter was
6.0%. We completed only $15 million of refinancing in the quarter, but we did
execute $100 million of forward swaps, bringing the total of forward swaps
commencing in 2003 to $175 million at a blended all-in rate of 5.95%. This
compares to a total of $179 million of fixed rate maturities in 2003 at a
blended average interest rate of 7.09%; so we've locked the interest rate
savings of 1.14%, or $2 million/year on a full year basis, which have been
incorporated into our forecasts for next year. We successfully completed
negotiations with Fannie Mae during the quarter, increasing our credit facility
to $550 million as of September 1st which will provide the capacity for the
major refinancings scheduled for next year. These include a $142 million
maturity on March 3rd, on which the refinancing activity is well under way.
In October we completed a couple of significant refinancings. The first was to
refinance $30 million of tax-free bonds; despite increasing the amount of these
bonds that are fixed rate by $5 million, we will generate savings of 2 cents per
share on this refinancing. Using a window in the market for preferred stock, in
October we also completed the refinancing of our 9 1/2% Series E preferred. We
repurchased the Series E at a premium of 7%, which recognized the fact that this
contained a "put" feature, and was not callable. We financed this through a
combination of:
- $12 million of Series F preferred issued at a 9.25% yield
- a direct placement of $10 million of Series G preferred at 8 5/8% yield
- $5 million from our credit facility
The $10 million Series G private placement was sold by us directly to a private
investment group. It contains provisions whereby after three years, with one
year's notice, we can call the issue (or the owner can put it to us for stock or
cash, our choice).
As result of this refinancing, we
- realized savings of 1/2 cent to 1 cent/year in capital costs on our
preferred stock
- reduced the "put" liability from $25 million to $10 million three years out
- obtained one year notice, ample time, to address any potential put
liability
- and, most importantly, do not have to reserve idle balance sheet capacity
to fund a possible future put.
We continued our progress in improving our debt service and fixed charge
coverage. Our debt service coverage improved from 2.27 a year ago to 2.31, and
our fixed charge coverage improved from 2.29 to 2.36. With Grande Reserve
Lexington approaching stabilization, we have only three properties in lease up,
of which Grande View Nashville is 93% occupied, Reserve at Dexter Lake Phase II
is at 84% occupancy, and Reserve at Dexter Lake Phase III is at 64% occupancy.
These three properties should reach full stabilization during the first part of
next year further increasing our financial flexibility.
We plan a further $30 million of refinancing December 1st, when we will prepay
$16 million of existing fixed rate mortgages, and switch additional financing
from our bank line of credit to our expanded Fannie Mae credit facility, further
reducing our interest expense. It is likely that we will fix the rate on an
additional $25 million of our debt through a swap either during this quarter or
next. After we put Preston Hills into the joint venture, the interest rate on
approximately 86% of our debt will be fixed or capped, and while we cannot
eliminate all interest rate risk, by locking the rate on most of next year's
refinancings, we've substantially reduced it for the next year.
We made a slight adjustment to our FFO forecast and took the fourth quarter's
FFO to a range of 69 cents to 70 cents, with the forecast for the year in a
range of $2.75 to $2.76. We're now projecting same-store NOI to drop by 2.6% on
a full year basis on a 0.3% decrease in revenue, compared to a slight increase
that we previously anticipated for next year.
In our press release we think we're taking a conservative approach to
forecasting next year's FFO, which we're basing on a further 2.5% reduction in
same store NOI. We think the a range of $2.76 to $2.82 is realistic, and we've
included not only projections of a pretty tough economic environment, but also a
15% increase in our insurance rates next July, and a 2% same-store increase in
real estate taxes. We've projected variable interest rates off the forward yield
curve, which we think is the most reasonable approach. One factor impacting our
projection for next year is the rate of investment in the joint venture with
Crow Holdings. If the investment proceeds as anticipated, we should achieve
results in the upper end of the forecast range; if the investment program is
delayed, then our results should be at the lower end.
You will notice that our funds available for distribution ("FAD") year to date
is up by 12 cents a share over last year, on a $3 million reduction in recurring
capital expenditures. This reduction is a timing issue - on a full year basis
we're still forecasting recurring capex of $11.85 million, or $385/unit, very
close to last year's $375/unit. Thus we are forecasting FAD for this year of
$2.19/share, identical to that of 2001. For 2003, we're forecasting FAD in the
range of $2.18 to $2.28 based on recurring capital expenditures of $400/unit. If
our recurring capital expenditures stay at the same level of the past couple of
years, we may cover our dividend in the latter half of next year, depending
partially on the success of our ability to find acquisitions for our joint
venture.
We're forecasting $3.8 million of non-cash charges on a full year basis, equal
to 19 cents a share. This takes our planned free cash flow for this year to
$2.38, 4 cents greater than our dividend.
Eric Bolton: Despite the very challenging operating environment, we continue to
post fairly stable operating results and importantly, continue to improve the
balance sheet and coverage ratios. Our investment focus on product catering to
the largest segment of the rental market, located in some of the country's most
stable and strong job growth markets will, we believe, continue to provide a
platform for long-term steady, predictable and growing revenue performance. In
addition, by diversifying investments in various market tiers across this
southeast region and timing our exit from new development at the right time, we
have further positioned the balance sheet to deliver stable and predictable
results during this down part of the cycle.
Our properties are in excellent shape and are well positioned for stronger
revenue growth as market conditions improve. As a result of our consistent and
intense focus on property management operations and careful execution of our new
acquisition initiative, we believe that Mid-America is very well positioned for
steady and increasing earnings growth. Our current dividend level remains secure
within all of the current range of forecast that we consider to be reasonable
and further strengthening this coverage is a major priority for us.
That is all we have in the way of prepared comments and will now be glad to
answer any questions that you may have.
(b) Press Release
Mid-America Apartment Communities, Inc.
A self-managed Equity REIT
Press Release, 3rd Quarter Earnings 2002
FROM: Simon R. C. Wadsworth, CFO
SUBJECT: Third Quarter 2002 FFO In-Line with Forecast
DATE: October 31, 2002
Memphis, TN, Mid-America Apartment Communities, Inc. (NYSE: MAA) reported Funds
From Operations ("FFO"), the generally accepted measure of operating performance
for real estate investment trusts, of $14,211,000 or $0.69 per share for the
quarter ended September 30, 2002. This is in line with the company's estimate
for the quarter and a slight decline from the $0.70 per share reported for the
same quarter of last year. Net income available for common shareholders (after
considering the non-cash deduction for depreciation) for the third quarter was a
net loss available for common shareholders of $231,000 or -$0.01/share. This
compares to net income available for common shareholders of $9,062,000 or
$0.52/share for the comparable quarter of a year ago, when the company recorded
a gain of $9,900,000 million from the sale of two apartment properties.
Highlights for the third quarter were:
o Leasing remains challenging as a strong home buying market and continued
weak job growth temporarily dampen demand for apartments.
o Same store occupancy at quarter end of 93.8% was down slightly from the
occupancy of 94.4% as of the end of the third quarter last year.
o Despite the tough operating environment, the balance sheet continues to
strengthen as coverage ratios show steady improvement and dividend coverage
remains sound.
o Closed on the purchase of Preston Hills, a new 464-unit community in
Atlanta, which is expected to become the initial investment in the
company's acquisition joint venture with Crow Holdings.
o During October the company concluded a successful refinancing of its Series
E 9 1/2% Preferred Stock.
Eric Bolton, Chairman and CEO said, "The leasing environment remains very
competitive. Historically low mortgage rate pricing, coupled with continued slow
job growth, dampen demand levels for multifamily housing. We are, however,
encouraged to see that new construction starts are slowing and remain
comfortable that market conditions for apartment housing have bottomed out in
most of our markets. Same store leasing concessions improved 6.8% in the third
quarter as compared to the proceeding second quarter of 2002. While we believe
that the leasing and revenue environment will now remain weak until well into
2003, we do not believe that overall performance from our portfolio will
deteriorate from current performance levels.
"We anticipate FFO for the 4th Quarter of $0.69 to $0.70 per share, and $2.75 to
$2.76 for the full year 2002. For 2003, we now forecast FFO in a range of $2.76
to $2.82, down slightly from an earlier estimate of $2.82 to $2.85. This change
reflects the continued pressure on occupancy and a forecast that assumes market
conditions will remain weak until the latter part of next year. The pace of
acquisitions in our joint venture with Crow Holdings is a key variable which may
help us achieve the upper end of next yea's FFO forecast. Our current forecast
for 2003 assumes that no additional acquisitions are made.
"The long term outlook for the multifamily housing market remains strong,
particularly in the southeastern region of the country. By diversifying our
investments over large, middle and small tier markets throughout this solid
growth region of the country, we are able to deliver a more consistent and
steady performance. Furthermore, at an average age of only twelve years, our
portfolio of properties is in great shape and well positioned to not only
compete in this environment, but produce strong long term results as the economy
begins to strengthen."
Simon Wadsworth, Executive Vice-President and CFO said, "Our coverage ratios
have improved this year as our cost of debt has dropped and our completed
development pipeline has become increasingly productive. Our fixed charge
coverage has increased to 2.36 from 2.29 for the same period of a year ago. Our
dividend continues to be secure and we remain committed to further enhancing
coverage.
"During the quarter we concluded an agreement with Fannie Mae to increase our
credit facility to $550 million, addressing next year's planned refinancing
needs. We were pleased with the results of our recently announced refinancing of
the $25 million 9 1/2% Series E preferred stock issue, which contained "put"
provisions beginning in 2004 that starting next year would have impaired the
ability to achieve more productivity and flexibility with our balance sheet. We
replaced the Series E preferred issue with a public 9 1/4% Series F preferred
issue, a privately placed 8 5/8% Series G preferred issue, and $5 million of
debt. The net result is to enhance capital deployment flexibility in 2003 and
slightly lower our cost of capital."
Al Campbell, Vice-President and Director of Financial Planning said, "Same store
property revenues in the third quarter decreased by -0.2% as compared to the
comparable period of a year ago. Total operating expenses on a same store basis
were up 3.3% as higher costs from the renewal of our property and casualty
insurance made an impact starting July 1st. Same store NOI performance was down
-2.3% as a result.
"We are encouraged by the continued improvement in our Memphis portfolio, as
occupancy was up 2.5% over the prior year, while concession levels also began to
ease. Dallas is our most challenging market as occupancy slipped to an average
of 89.2% for the quarter. We expect Dallas to remain weak for the next several
quarters. Our Atlanta portfolio continues to be stable as market conditions in
the Atlanta metro remain weak, making progress difficult. Revenues from our
Atlanta portfolio remained essentially unchanged from the previous quarter, as
slightly declining occupancy levels were largely offset by lower concession
costs. We continue to see steady performance from our other markets, such as
Jacksonville, Houston, and Greenville. In addition, our smaller markets continue
to generate stable results during the quarter, producing revenue growth of 3.2%
over the prior year."
Eric Bolton said, "Our balance sheet is strengthening as our regional focus and
solid portfolio diversification across large, middle and small markets continues
to deliver fairly steady and predictable performance. Coverage ratios show
continued improvement and our dividend remains secure. We are committed to the
current level of cash paid to our owners. Our strategy focuses on generating a
steady improvement to our FFO and per share value growth, along with further
strengthening dividend coverage, and it remains solidly on track."
MAA is a self-administered, self-managed apartment-only real estate investment
trust which currently owns or has ownership interest in 33,923 apartment units
throughout the southeast and southcentral U.S. For further details, please refer
to our website at www.maac.net or contact Simon R. C. Wadsworth at (901)
682-6668, ext. 105. 6584 Poplar Ave., Suite 300, 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, expenses,
and net operating income at Mid-America's properties, anticipated lease-up (and
rental concessions) at development properties, planned acquisitions and
dispositions, and property financing. 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, changes in interest rates and other items that are difficult to control
such as insurance rates, increases in real estate taxes in numerous 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.
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CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------------------------------------------------------
In thousands except per share data
Three months ended September 30, Nine months ended September 30,
---------------------------------- ---------------------------------
2002 2001 2002 2001
---------------- ---------------- --------------- ----------------
Property revenues $ 58,038 $ 56,779 $ 170,389 $ 170,513
Property operating expenses 22,660 21,726 65,300 63,698
--------------------------------------------------------------------------------------------- ---------------------------------
Net operating income 35,378 35,053 105,089 106,815
Interest and other non-property income 169 271 471 987
Management and development income, net 191 190 570 569
FFO from real estate joint ventures 140 253 615 769
Property management expenses 2,297 2,241 7,247 7,523
General & administrative 1,686 1,514 4,643 4,427
Interest expense 12,657 13,024 37,381 40,326
Gain on disposition of non-depreciable assets - - - 229
Preferred dividend distribution 4,028 4,028 12,085 12,085
Depreciation and amortization non-real estate assets 309 156 865 481
Amortization of deferred financing costs 690 530 2,011 1,695
--------------------------------------------------------------------------------------------- ---------------------------------
Funds from operations 14,211 14,274 42,513 42,832
Depreciation and amortization 13,943 12,760 40,543 38,526
Joint venture depreciation adjustment included in FFO 344 316 1,032 943
Gain on disposition of non-depreciable assets included
in FFO - - - 229
Preferred dividend distribution add back (4,028) (4,028) (12,085) (12,085)
--------------------------------------------------------------------------------------------- ---------------------------------
Income before gain on disposition of assets,
minority interest and extraordinary items 3,952 5,226 13,023 15,219
Net gain(loss) on disposition of assets and
insurance settlement proceeds (128) 9,900 437 10,064
Minority interest in operating partnership income (28) (1,853) (366) (2,104)
--------------------------------------------------------------------------------------------- ---------------------------------
Income before extraordinary items 3,796 13,273 13,094 23,179
Ex item - Loss on debt extinguishment , net of MI (1) 183 27 626
Preferred dividend distribution 4,028 4,028 12,085 12,085
--------------------------------------------------------------------------------------------- ---------------------------------
Net income(loss) available for common shareholders $ (231) $ 9,062 $ 982 $ 10,468
--------------------------------------------------------------------------------------------- ---------------------------------
Weighted average common shares - Diluted 17,794 17,569 17,714 17,520
Weighted average common shares and units - Diluted 20,646 20,503 20,606 20,455
Funds from operations per share and units - Diluted $0.69 $0.70 $2.06 $2.09
Net income(loss) available for common shareholders
before extraordinary items - Diluted -$0.01 $0.53 $0.06 $0.63
Net income(loss) available for common shareholders
after extraordinary items - Diluted -$0.01 $0.52 $0.06 $0.60
--------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------------------------------------------------------
In thousands
September 30, December 31,
2002 2001
---------------- ----------------
Assets
Real estate assets, net $1,225,333 $1,216,933
Cash and cash equivalents, including restricted cash 24,231 23,432
Other assets 28,929 23,123
---------------------------------------------------------------------------------------------
Total assets $1,278,493 $1,263,488
---------------------------------------------------------------------------------------------
Liabilities
Bonds and notes payable $ 822,732 $ 779,664
Other liabilities 63,287 41,564
---------------------------------------------------------------------------------------------
Total liabilities 886,019 821,228
Shareholders' equity and minority interest 392,474 442,260
---------------------------------------------------------------------------------------------
Total liabilities & shareholders' equity $1,278,493 $1,263,488
---------------------------------------------------------------------------------------------
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OPERATING RESULTS
--------------------------------------------------------------------------------------------------------------------
Dollars and shares in thousands except per share data
ROA Annualized Trailing
3Q02 4 Quarters
--------------- --------------
Gross Real Estate Assets, Average $1,497,866 $1,464,839
EBITDA $ 126,204 $ 124,948
EBITDA/Gross Real Estate Assets 8.4% 8.5%
Three Months Ended September 30,
--------------------------------
2002 2001
-------------- ---------------
Common and Preferred Dividends as % of FFO 88% 87%
EBITDA/Debt Service 2.31x 2.27x
EBITDA/Fixed Charges 2.36x 2.29x
Total Debt as % of Gross Real Estate Assets 55% 54%
MAA portion of JV debt $27,958 $26,903
Capitalized Interest YTD $ 239 $ 1,067
Nine Months Ended September 30,
-------------------------------
FAD 2002 2001
-------------- -------------
FFO $14,211 $14,274 $42,513 $42,832
Average Units 31,130 30,606 30,772 30,856
Average Shares - Diluted 20,646 20,503 20,606 20,455
Recurring Capex $ 1,762 $ 3,783 $ 7,157 $10,160
FAD $12,449 $10,491 $35,356 $32,672
Free Cash Flow (1) $13,448 $11,177 $38,232 $34,848
PER SHARE (DILUTED)
FFO $ 0.69 $ 0.70 $ 2.06 $ 2.09
FAD $ 0.60 $ 0.51 $ 1.72 $ 1.60
Free Cash Flow (1) $ 0.65 $ 0.55 $ 1.86 $ 1.70
Distribution $ 0.585 $ 0.585 $ 1.755 $ 1.755
(1) Includes addback of other non-cash items, primarily non-real estate
depreciation and amortization.
--------------------------------------------------------------------------------------------------------------------
OTHER DATA
--------------------------------------------------------------------------------------------------------------------
Shares and units in thousands except per share data
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ------------------------
2002 2001 2002 2001
------------ -------------- ------------- ---------
Weighted average common shares and units - Basic 20,432 20,340 20,404 20,362
Weighted average common shares and units - Diluted 20,646 20,503 20,606 20,455
Number of apartment units with ownership interest
(excluding development units not delivered) 33,923 33,291 33,923 33,291
Apartment units added during period, net 464 (487) 512 (321)
PER SHARE DATA
Funds from operations per share and units - Basic $ 0.70 $ 0.70 $ 2.08 $ 2.10
Funds from operations per share and units - Diluted $ 0.69 $ 0.70 $ 2.06 $ 2.09
Net income(loss) available for common shareholders
before extraordinary items - Diluted -$ 0.01 $ 0.53 $ 0.06 $ 0.63
Net income(loss) available for common shareholders
after extraordinary items - Diluted -$ 0.01 $ 0.52 $ 0.06 $ 0.60
Dividend declared per common share $ 0.585 $ 0.585 $ 1.755 $ 1.755
DIVIDEND INFORMATION (latest declaration) Payment Payment Record
per Share Date Date
----------- -------------- --------------
Common Dividend - quarterly $0.5850 10/31/2002 10/24/2002
Preferred Series A - monthly $0.1979 11/15/2002 11/1/2002
Preferred Series B - monthly $0.1849 11/15/2002 11/1/2002
Preferred Series C - quarterly $0.5859 10/15/2002 10/1/2002
Preferred Series F - monthly (2) $0.0932 11/15/2002 11/1/2002
(2) Represents initial partial month payment.
-----------------------------------------------------------------------------------------------------------
COMMUNITY STATISTICS
-----------------------------------------------------------------------------------------------------------
Properties are grouped by operational responsibilty and exclude properties in lease-up
At September 30, 2002
------------------------------------------------------------
Average
Number of Portfolio Rental Rate
Units Concentration Occupancy Per Unit
------------ ---------------- ------------- -------------
Tennessee
Memphis 4,429 13.5% 93.4% $ 621.38
Nashville 966 2.9% 93.1% $ 692.57
Chattanooga 943 2.9% 93.5% $ 562.79
Jackson 664 2.0% 90.2% $ 617.98
Florida
Jacksonville 2,846 8.6% 94.9% $ 688.68
Tampa 1,120 3.4% 92.9% $ 756.04
Other 2,518 7.6% 95.4% $ 717.31
Georgia
Atlanta 2,116 6.4% 91.5% $ 791.39
Columbus / LaGrange 1,509 4.6% 95.8% $ 654.07
Augusta / Aiken / Savannah 1,132 3.4% 95.8% $ 623.54
Other 1,742 5.3% 93.0% $ 657.31
Texas
Dallas 2,056 6.2% 87.8% $ 658.31
Austin 1,254 3.8% 96.0% $ 691.28
Houston 1,002 3.0% 95.7% $ 672.29
South Carolina
Greenville 1,492 4.5% 94.2% $ 554.10
Other 784 2.4% 94.3% $ 674.89
Kentucky
Lexington 924 2.8% 94.2% $ 725.84
Other 624 1.9% 93.8% $ 619.59
Mississippi 1,673 5.1% 95.6% $ 581.85
Alabama 952 2.9% 93.6% $ 647.90
Arkansas 808 2.4% 96.9% $ 609.80
North Carolina 738 2.2% 90.8% $ 569.69
Ohio 414 1.3% 89.4% $ 706.27
Virginia 296 0.9% 97.3% $ 695.28
------------ ---------------- ------------- -------------
Total 33,002 100.0% 93.7% $ 660.45
-----------------------------------------------------------------------------------------------------------
SAME STORE STATISTICS
-----------------------------------------------------------------------------------------------------------
Dollars in thousands except Average Rental Rate
Three Months Ended September 30,
---------------------------------------
Percent
2002 2001 Change
---------- ------------- ------------
Revenues $53,146 $53,239 -0.2%
Property Operating Expenses 14,258 14,002 1.8%
RE Taxes and Insurance 6,458 6,058 6.6%
---------- ------------- ------------
Total Operating Expenses 20,716 20,060 3.3%
---------- ------------- ------------
NOI $32,430 $33,179 -2.3%
---------- ------------- ------------
Units(1) 28,802 28,803
Average Rental Rate(1) $657.47 $654.83 0.4%
Average Physical Occupancy(1) 93.8% 94.4% -0.6%
(1) Values are at September 30, 2002 and 2001
---------------------------------------------------------------------------------------------------------------------------
DEBT AS OF SEPTEMBER 30, 2002
---------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
Principal Average Years Average
Balance to Maturity Rate
----------- -------------- ----------
Conventional - Fixed Rate or Swapped $ 560,395 8.4 6.9%
Tax-free - Fixed Rate or Swapped 117,218 22.8 6.1%
Conventional - Variable Rate 122,559 8.4 2.6%
Tax-free - Variable Rate 22,560 25.4 2.8%
----------- -------------- ----------
Total $ 822,732 10.9 6.0%
FUTURE PAYMENTS Average
Scheduled Rate for
Amortization Maturities Total Maturities
------------- ------------- --------- ----------
2002 $ 916 $ 15,000 $ 15,916 3.1%
2003 3,690 154,120 157,810 6.5%
2004 3,808 96,168 99,976 6.0%
2005 4,063 - 4,063
2006 4,166 36,010 40,176 6.4%
Thereafter 129,756 375,035 504,791 6.0%
------------- ------------- --------- ----------
Total $ 146,399 $ 676,333 $ 822,732 6.0%
---------------------------------------------------------------------------------------------------------------------------
DEVELOPMENT PIPELINE
---------------------------------------------------------------------------------------------------------------------------
Units Percentage of Available
--------------------------------------------
Available Units to Lease
-----------------------
Total to Lease Occupied Leased Occupied Leased
----------- --------- --------- -------- ---------- -----------
Properties in Lease-up
Grande View Nashville Nashville, TN 433 433 403 407 93% 94%
Reserve at Dexter Lake Phase II Memphis, TN 244 244 205 221 84% 91%
Reserve at Dexter Lake Phase III Memphis, TN 244 244 156 158 64% 65%
----------- --------- --------- -------- ---------- -----------
Total 921 921 764 786 83% 85%
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 1, 2002 /s/Simon R.C. Wadsworth
Simon R.C. Wadsworth
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)