UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 333-42441
MID-AMERICA CAPITAL PARTNERS, L.P.
(Exact Name of Registrant as Specified in Charter)
TENNESSEE 62-1717980
(State of Incorporation) (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
N/A (Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Number of Shares Outstanding
Class April 30, 2000
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none
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets of Mid-America Capital Partners, L.P.
(the "Partnership") as of March 31, 2000 (Unaudited)
and December 31, 1999
Statement of Operations of the Partnership for the three
months ended March 31, 2000 and 1999 (Unaudited)
Statement of Cash Flows of the Partnership for the three
months ended March 31, 2000 and 1999 (Unaudited)
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART I. Financial Information
ITEM 1.
Mid-America Capital Partners, L.P.
(a limited partnership)
Balance Sheets
March 31, 2000 (Unaudited) and December 31, 1999
(Dollars in thousands)
2000 1999
---- ----
Assets:
Real estate assets:
Land $ 21,305 $ 21,305
Buildings and improvements 210,879 210,761
Furniture, fixtures and equipment 5,459 5,439
Construction in progress 1,187 814
- -----------------------------------------------------------------------------
238,830 238,319
Less accumulated depreciation (33,506) (31,162)
- -----------------------------------------------------------------------------
Real estate assets, net 205,324 207,157
Cash 1,961 3,667
Restricted cash 34 34
Deferred financing costs, net 2,994 3,258
Other assets 150 79
- -----------------------------------------------------------------------------
Total assets $ 210,463 $ 214,195
=============================================================================
Liabilities and Partners' Capital
Liabilities:
Bonds payable $ 142,000 $ 142,000
Accounts payable 89 404
Accrued expenses and other liabilities 2,333 2,895
Due to affiliate 1,473 1,499
Security deposits 816 794
- -----------------------------------------------------------------------------
Total liabilities 146,711 147,592
Partners' Capital:
General Partner 2,466 2,453
Limited Partner 81,690 80,402
Due from limited partner (20,404) (16,252)
- -----------------------------------------------------------------------------
Total partners' capital 63,752 66,603
- -----------------------------------------------------------------------------
Total liabilities and partners' capital $ 210,463 $ 214,195
=============================================================================
See accompanying notes to financial statements.
Mid-America Capital Partners, L.P.
(a limited partnership)
Statements of Operations
Three months ended March 31, 2000 and 1999
(Dollars in thousands)
(Unaudited)
Three months ended
March 31,
-------------------
2000 1999
---- ----
Revenues:
Rental $ 10,013 $ 9,567
Other 123 88
- --------------------------------------------------------------------------------
Total revenues 10,136 9,655
- --------------------------------------------------------------------------------
Expenses:
Personnel 1,063 1,045
Building repairs and maintenance 435 423
Real estate taxes and insurance 1,009 965
Utilities 348 384
Landscaping 283 257
Other operating 415 428
Depreciation and amortization real estate assets 2,336 2,157
Depreciation and amortization non-real estate assets 8 7
General and administrative 406 386
Interest 2,268 2,268
Amortization of deferred financing costs 264 247
- --------------------------------------------------------------------------------
Total expenses 8,835 8,567
- --------------------------------------------------------------------------------
Net income $ 1,301 $ 1,088
================================================================================
See accompanying notes to financial statements.
Mid-America Capital Partners, L.P.
(a limited partnership)
Statements of Cash Flows
Three months ended March 31, 2000 and 1999
(Dollars in thousands)
2000 1999
---- ----
Cash flows from operating activities:
Net income $1,301 $1,088
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 2,608 2,411
Changes in assets and liabilities:
Restricted cash - 374
Due to/from affiliate (26) (474)
Other assets (71) 77
Accounts payable (315) (78)
Accrued expenses and other liabilities (562) 542
Security deposits 22 25
- -------------------------------------------------------------------------------
Net cash provided by operating activities 2,957 3,965
- -------------------------------------------------------------------------------
Cash flows from investing activities:
Improvements to properties (511) (1,118)
- -------------------------------------------------------------------------------
Net cash used in investing activities (511) (1,118)
- -------------------------------------------------------------------------------
Cash flows from financing activities:
Repayment of bank overdraft - (667)
Due from limited partner (4,152) 300
- -------------------------------------------------------------------------------
Net cash used in financing activities (4,152) (367)
- -------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (1,706) 2,480
- -------------------------------------------------------------------------------
Cash, beginning of period 3,667 -
- -------------------------------------------------------------------------------
Cash, end of period $ 1,961 $ 2,480
===============================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 2,268 $ 2,268
===============================================================================
See accompanying notes to financial statements.
MID-AMERICA CAPITAL PARTNERS, L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 2000 and 1999 (Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with the accounting policies in effect as of December 31, 1999, as set forth in
the annual financial statements of Mid-America Capital Partners, L.P. (the
"Partnership"), as of such date. In the opinion of management, all adjustments
necessary for a fair presentation of the financial statements have been included
and all such adjustments were of a normal recurring nature. The results of
operations for the three months ended March 31, 2000 are not necessarily
indicative of the results to be expected for the full year.
The Partnership is a special purpose Delaware limited partnership. The
Partnership was formed on November 24, 1997 for the sole purpose to own and
operate 26 apartment communities (the Mortgaged Properties) and manage,
renovate, improve, lease, sell, transfer, exchange, mortgage and otherwise deal
with the Mortgaged Properties. The sole limited partner of the Partnership is
Mid-America Apartments, L.P., a Tennessee limited partnership (MAALP), which is
a majority owned subsidiary of Mid-America Apartment Communities, Inc. (MAAC).
MAAC owns, directly or through its subsidiaries, all of the outstanding units of
partnership interest. MAAC is a self-administered and self-managed umbrella
partnership real estate investment trust (REIT). MAAC conducts a substantial
portion of its operation through MAALP and subsidiaries of MAALP. The sole
general partner of the Partnership is MAACP, Inc., a Tennessee corporation
(MAACP), a wholly-owned subsidiary of MAAC. The term of the Partnership shall be
to December 31, 2020, unless terminated earlier as provided in the Partnership
Agreement or as otherwise provided by law.
2. Segment Information
At March 31, 2000, the Partnership owned and operated 26 apartment communities
from which it derives all significant sources of earnings and operating cash
flows. The Partnership's operational structure is organized on a decentralized
basis, with individual property managers having overall responsibility and
authority regarding the operations of their respective properties. Each property
manager individually monitors local and area trends in rental rates, occupancy
percentages, and operating costs. Property managers are given the on-site
responsibility and discretion to react to such trends in the best interest of
the Partnership. Management evaluates the performance of each individual
property based on its contribution of revenues and net operating income ("NOI"),
which is composed of property revenues less all operating costs including
insurance and real estate taxes. The Partnership's reportable segments are its
individual properties because each is managed separately and requires different
operating strategy and expertise based on the geographic location, community
structure and quality, population mix and numerous other factors unique to each
community.
The revenues and profits for the aggregated communities are summarized as
follows:
Three months ended
March 31,
----------------------------------
2000 1999
---------------- ----------------
Rental revenues $10,013 $9,567
Other property revenues 123 88
---------------- ----------------
Total Revenues 10,136 9,655
---------------- ----------------
Property net operating income 6,583 6,153
Interest expense 2,268 2,268
General and administrative expenses 406 386
Amortization of deferred financing costs 264 247
Depreciation and amortization 2,344 2,164
---------------- ----------------
Net income $1,301 $1,088
================ ================
There have been no material changes in segment assets during the period.
PART I. Financial Information
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
The following is a discussion of the financial condition and results of
operations of the Partnership for the three ended March 31, 2000 and 1999. This
discussion should be read in conjunction with the financial statements included
in this report. These financial statements include all adjustments, which are,
in the opinion of management, necessary to reflect a fair statement of the
results for the interim periods presented, and all such adjustments are of a
normal recurring nature.
The total number of apartment units owned at March 31, 2000 and 1999 was 5,948
in 26 apartment communities. Average monthly rental per apartment unit increased
to $590 at March 31, 2000 from $574 at March 31, 1999. Overall occupancy was
95.8% and 94.6% at March 31, 2000 and 1999, respectively.
RESULTS OF OPERATIONS (Dollars in 000's)
COMPARISON OF THE PARTNERSHIP'S THREE MONTHS ENDED MARCH 31, 2000 TO THE THREE
MONTHS ENDED MARCH 31, 1999
Total revenues for the three months ended March 31, 2000 increased 5.0% from the
three months ended March 31, 1999. This increase is due to the increases in the
average rental rate and occupancy rate as compared to the same period a year
ago.
Property operating expenses for the three months ended March 31, 2000 increased
by 1% as compared to the same period a year ago. Reductions in miscellaneous
operating expenses and insurance were more than offset by increases in real
estate taxes, personnel and landscaping costs.
Depreciation and amortization expense also increased from $2,411 to $2,608
primarily due to additional depreciation related to normal capital additions to
maintain the properties within the increasingly competitive markets.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow provided by operating activities decreased to $2,957 for the three
months ended March 31, 2000 mainly related to changes in operating assets and
liabilities.
Net cash flow used in investing activities decreased by approximately $607 for
the three months ended March 31, 2000 as compared to the same period a year
earlier, as investing activities returned to a more normal level following
increased capital expenditures to bring properties to the portfolio standards of
the parent company (MAAC) in the first quarter of 1999.
Net cash used in financing activities increased during the period due to
additional cash remittances to the limited partner.
The Partnership believes that cash provided by operations is adequate and
anticipates that it will continue to be adequate in both the short and long-term
to meet operating requirements (including recurring capital expenditures at the
communities).
INSURANCE
In the opinion of management, property and casualty insurance is in place which
provides adequate coverage to provide financial protection against normal
insurable risks such that it believes that any loss experienced would not have a
significant impact on the Partnership's liquidity, financial position, or
results of operations.
INFLATION
Substantially all of the resident leases at the communities allow, at the time
of renewal, for adjustments in the rent payable thereunder, and thus may enable
the Partnership to seek rent increases. The substantial majority of these leases
are for one year or less. The short-term nature of these leases generally serves
to reduce the risk to the Partnership of the adverse effects of inflation.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS
The Management's Discussion and Analysis of Financial Condition and Results of
Operations contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. These statements include the plans and
objectives of management for future operations, including plans and objectives
relating to capital expenditures and rehabilitation costs on the apartment
communities. The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties which are discussed
in "Risk Factors" in this report. Although the Partnership believes that the
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included in this report will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Partnership or any other
person that the objectives and plans of the Partnership will be achieved.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
This information has been omitted as there have been no material changes in the
Partnership's market risk as disclosed in the 1999 Annual Report on Form 10-K.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits or Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule for the period ended 3/31/00.
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 CAPITAL PARTNERS, L.P.
4/15/00 /s/Simon R.C. Wadsworth
Date: _______________________ ___________________________
Simon R.C. Wadsworth
President and Director
(Principal Executive Officer)
4/15/00 /s/Mark S. Martini
Date: _______________________ ___________________________
Mark S. Martini
Director
(Principal Financial and Accounting Officer)